First Eagle Alternative Capital BDC, Inc. - Quarter Report: 2019 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2019

☐	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 814-00789

THL CREDIT, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		27-0344947
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

100 Federal St., 31^st Floor, Boston, MA		02110
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: 800-450-4424

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

Title of Each Class	Trading Symbols	Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share	TCRD	NASDAQ Global Select Market
6.75% Senior Notes due 2022	TCRZ	The New York Stock Exchange
6.125% Senior Notes due 2023	TCRW	The New York Stock Exchange

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

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

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

Large accelerated filer	☐	Accelerated filer	☒
Non-Accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes ☐ No ☒

The number of shares of the registrant’s common stock, $0.001 par value per share, outstanding at November 1, 2019 was 30,285,669.

THL CREDIT, INC.

FORM 10-Q FOR THE QUARTER ENDED September 30, 2019

Table of Contents

	INDEX	PAGE NO.
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Statements of Assets and Liabilities as of September 30, 2019 (unaudited) and December 31, 2018	4

	Consolidated Statements of Operations for the three and nine months ended September 30, 2019 and 2018 (unaudited)	5

	Consolidated Statements of Changes in Net Assets for the nine months ended September 30, 2019 and 2018 (unaudited)	6

	Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018 (unaudited)	7

	Consolidated Schedules of Investments as of September 30, 2019 (unaudited) and December 31, 2018	8

	Notes to Consolidated Financial Statements (unaudited)	25

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	68

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	99

Item 4.	Controls and Procedures	99

PART II.	OTHER INFORMATION	100

Item 1.	Legal Proceedings	100

Item 1A.	Risk Factors	100

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	100

Item 3.	Defaults Upon Senior Securities	100

Item 4.	Mine Safety Disclosures	100

Item 5.	Other Information	100

Item 6.	Exhibits	101

SIGNATURES		102

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report, and other statements that we may make, may contain forward-looking statements with respect to future financial or business performance, strategies or expectations, anticipated share repurchases or lack thereof, our plans and expectations about future investments, amount and timing of distributions, if any, and the future liquidity of the company. Forward-looking statements are typically identified by words or phrases such as “trend,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “potential,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” or similar expressions.

Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and we assume no duty to and do not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.

In addition to factors previously identified elsewhere in this filing, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance:

•

the introduction, withdrawal, success and timing of business initiatives and strategies;

•

changes in political, economic or industry conditions, the interest rate environment or financial and capital markets, which could result in changes in the value of our assets;

•

the relative and absolute investment performance and operations of our investment adviser;

•

the impact of increased competition;

•

the impact of future acquisitions and divestitures;

•

the resolution of legal proceedings;

•

our business prospects and the prospects of our portfolio companies;

•

the impact, extent and timing of technological changes and the adequacy of intellectual property protection;

•

the impact of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to us or THL Credit Advisors LLC, the Advisor;

•

the ability of the Advisor to identify suitable investments for us and to monitor and administer our investments;

•

our contractual arrangements and relationships with third parties;

•

any future financings by us;

•

the ability of the Advisor to attract and retain highly talented professionals;

•

fluctuations in foreign currency exchange rates;

•

the impact of changes to tax legislation and, generally, our tax position;

•

our ability to exit a control investment in a timely manner; and

•

the ability to fund Logan JV’s unfunded commitments to the extent approved by each member of the Logan JV investment committee.

THL Credit, Inc. and Subsidiaries

Consolidated Statements of Assets and Liabilities

(in thousands, except per share data)

(unaudited)

	September 30, 2019			December 31, 2018
Assets:
Investments at fair value:
Non-controlled, non-affiliated investments (cost of $276,994 and $333,023, respectively)	$	260,282		$	313,377
Controlled investments (cost of $170,169 and $181,325, respectively)		143,256			167,733
Non-controlled, affiliated investments (cost of $2 and $25,292, respectively)		4			12,543
Cash		14,278			6,860
Escrows and other receivables		12,181			7,306
Interest, dividends, and fees receivable		4,870			5,480
Deferred tax assets		2,255			2,056
Deferred financing costs		1,756			2,314
Prepaid expenses and other assets		368			198
Distributions receivable		311			207
Due from affiliate		276			377
Deferred offering costs		200			—
Total assets	$	440,037		$	518,451
Liabilities:
Loans payable	$	69,161		$	107,657
Notes payable ($111,607 and $111,607 face amounts, respectively, reported net of deferred financing costs of $2,938 and $3,541, respectively)		108,669			108,067
Accrued expenses and other liabilities		3,090			1,652
Deferred tax liability		1,834			1,972
Base management fees payable		1,215			2,112
Accrued incentive fees		677			677
Accrued interest and fees		319			633
Total liabilities		184,965			222,770
Commitments and contingencies (Note 8)
Net Assets:
Common stock, par value $.001 per share, 100,000 common shares authorized, 30,587 and 32,318 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively		31			32
Paid-in capital in excess of par		419,526			431,361
Accumulated deficit		(164,485	)		(135,712	)
Total net assets	$	255,072		$	295,681
Total liabilities and net assets	$	440,037		$	518,451
Net asset value per share attributable to THL Credit, Inc.	$	8.34		$	9.15

See accompanying notes to these consolidated financial statements.

THL Credit, Inc. and Subsidiaries

Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

	For the three months ended September 30,						For the nine months ended September 30,
	2019			2018			2019			2018
Investment Income:
From non-controlled, non-affiliated investments:
Interest income	$	7,264		$	10,034		$	23,838		$	35,019
Dividend income		—			—			—			17
Other income		276			165			2,475			716
From non-controlled, affiliated investments:
Interest income		—			835			57			1,444
Other income		101			248			493			791
From controlled investments:
Interest income		1,501			1,358			4,280			4,125
Dividend income		3,610			3,334			11,087			8,774
Other income		41			104			116			236
Total investment income		12,793			16,078			42,346			51,122
Expenses:
Interest and fees on borrowings		3,047			3,470			9,688			10,827
Base management fees		1,215			2,240			4,940			6,893
Incentive fees		—			1,658			—			1,649
Administrator expenses		373			512			1,215			1,640
Other general and administrative expenses		375			379			1,107			1,373
Amortization of deferred financing costs		340			317			1,370			937
Professional fees		281			413			1,230			1,124
Directors' fees		169			169			533			566
Total expenses		5,800			9,158			20,083			25,009
Incentive fee waiver		—			(1,658	)		—			(1,658	)
Management fee waiver		—			—			(525	)		—
Total expenses, net of fee waivers		5,800			7,500			19,558			23,351
Income tax provision, excise and other taxes		121			5			359			272
Net investment income		6,872			8,573			22,429			27,499
Realized (Loss) Gain and Change in Unrealized Appreciation (Depreciation) on Investments:
Net realized (loss) gain on investments:
Non-controlled, non-affiliated investments		280			(184	)		(26,203	)		(38,777	)
Non-controlled, affiliated investments		(24,652	)		—			(24,652	)		—
Controlled investments		16,701			(102	)		17,143			241
Foreign currency transactions		(191	)		2			(189	)		(202	)
Net realized loss on investments		(7,862	)		(284	)		(33,901	)		(38,738	)
Net change in unrealized appreciation (depreciation) on investments:
Non-controlled, non-affiliated investments		(4,972	)		(244	)		2,935			26,669
Non-controlled, affiliated investments		24,652			(2,478	)		12,752			619
Controlled investments		(18,694	)		(359	)		(13,323	)		(3,403	)
Translation of assets and liabilities in foreign currencies		251			(261	)		(391	)		933
Net change in unrealized appreciation (depreciation) on investments		1,237			(3,342	)		1,973			24,818
Net change in unrealized (depreciation) attributable to non-controlling interests		—			(102	)		—			(703	)
Net realized and unrealized loss from investments		(6,625	)		(3,728	)		(31,928	)		(14,623	)
Benefit (provision) for taxes on unrealized gain/loss on investments		64			(192	)		335			(346	)
Net increase (decrease) in net assets resulting from operations	$	311		$	4,653		$	(9,164	)	$	12,530
Net investment income per common share:
Basic and diluted	$	0.22		$	0.26		$	0.71		$	0.84
Net increase (decrease) in net assets resulting from operations per common share:
Basic and diluted	$	0.01		$	0.14		$	(0.29	)	$	0.38
Weighted average shares of common stock outstanding:
Basic and diluted		30,992			32,674			31,679			32,674

See accompanying notes to these consolidated financial statements.

THL Credit, Inc. and Subsidiaries

Consolidated Statements of Changes in Net Assets

(in thousands)

(unaudited)

	For the nine months ended September 30,
	2019			2018
(Decrease) increase in net assets from operations:
Net investment income	$	22,429		$	27,499
Net realized loss on investments		(33,901	)		(38,738	)
Net change in unrealized appreciation on investments		1,973			24,818
Net change in unrealized (depreciation) attributable to non-controlling interests		—			(703	)
Benefit (provision) for taxes on unrealized gain (loss) on investments		335			(346	)
Net (decrease) increase in net assets resulting from operations		(9,164	)		12,530
Distributions to stockholders:
Distributions to stockholders from net investment income		(19,855	)		(26,466	)
Total distributions to stockholders		(19,855	)		(26,466	)
Capital share transactions:
Repurchase of common stock		(11,590	)		—
Net decrease in net assets from capital share transactions		(11,590	)		—
Total decrease in net assets		(40,609	)		(13,936	)
Net assets at beginning of period		295,681			344,029
Net assets at end of period	$	255,072		$	330,093
Common shares outstanding at end of period		30,587			32,674
Capital share activity:
Shares repurchased		1,730			—

See accompanying notes to these consolidated financial statements.

THL Credit, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	For the nine months ended September 30,
	2019			2018
Cash flows from operating activities:
Net (decrease) increase in net assets resulting from operations	$	(9,164	)	$	12,530
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:
Net change in unrealized appreciation on investments		(1,973	)		(24,115	)
Net realized loss on investments		42,818			37,215
Net realized loss on foreign exchange currency transactions		189			161
Increase in investments due to interest paid-in-kind		(2,049	)		(1,524	)
Amortization of deferred financing costs		1,370			937
Accretion of discounts on investments and other fees		(918	)		(2,590	)
Changes in operating assets and liabilities:
Purchases of investments		(99,368	)		(56,708	)
Proceeds from sale and paydown of investments		151,906			115,075
Decrease in interest, dividends and fees receivable		610			829
(Increase) decrease in deferred offering costs		(196	)		148
(Increase) decrease in escrow and other receivables		(4,875	)		1,746
Decrease in due from affiliates		101			29
(Increase) decrease in deferred tax asset		(199	)		605
(Increase) decrease in prepaid expenses and other assets		(182	)		233
Increase (decrease) in accrued expenses and other liabilities		1,570			(473	)
Decrease in accrued credit facility fees and interest		(314	)		(176	)
Decrease in deferred tax liability		(138	)		(301	)
Decrease in base management fees payable, net		(897	)		(316	)
Decrease in other deferred liabilities		—			(41	)
Decrease in accrued incentive fees payable, net		—			(116	)
Net cash provided by operating activities		78,291			83,148
Cash flows from financing activities:
Repurchase of common stock		(11,590	)		—
Borrowings under credit facility		78,450			69,500
Repayments under credit facility		(117,529	)		(123,088	)
Distributions paid to stockholders		(19,855	)		(26,466	)
Financing and offering costs paid		(349	)		(152	)
Net cash (used in) financing activities		(70,873	)		(80,206	)
Net increase in cash		7,418			2,942
Cash, beginning of period		6,860			3,617
Cash, end of period	$	14,278		$	6,559
Supplemental Disclosure of Cash Flow Information:
Cash interest paid	$	9,312		$	10,138
Income taxes paid	$	6		$	20
PIK income earned	$	1,925		$	1,821

Non-cash Operating Activities:

See Note 5 in the notes to consolidated financial statements for non-cash restructurings.

See accompanying notes to these consolidated financial statements.

THL Credit, Inc. and Subsidiaries

Consolidated Schedules of Investments

September 30, 2019

(dollar amounts in thousands)

(unaudited)

			Initial	Maturity/	Principal⁽⁵⁾
			Acquisition	Dissolution	No. of Shares /
Type of Investment/Portfolio company ^(1)(2)(3)	Industry	Interest Rate⁽⁴⁾	Date	Date	No. of Units		Amortized Cost			Fair Value ⁽⁶⁾
Non-controlled/non-affiliated investments
—102.04% of net asset value
First lien senior secured debt
—87.33% of net asset value
Canada
—1.92% of net asset value
PDFTron Systems Inc. ⁽⁷⁾	IT services	7.8% (LIBOR + 5.8%)	5/15/2019	5/15/2024	$	5,000	$	4,954		$	4,903
PDFTron Systems Inc. ^(7)(10)(25)	IT services	7.8% (LIBOR + 5.8%)	5/15/2019	5/15/2024		—		(10	)		—
PDFTron Systems Inc. ^(7)(9)(10)	IT services	7.8% (LIBOR + 5.8%)	5/15/2019	5/15/2024		—		(5	)		—
				Subtotal Canada	$	5,000	$	4,939		$	4,903
Midwest
—7.59% of net asset value
1-800 Hansons, LLC	Consumer products and services	9.6% (LIBOR + 7.5%) (8.6% Cash + 1.0% PIK)	10/19/2017	10/19/2022	$	3,755	$	3,713		$	3,530
1-800 Hansons, LLC ^(9)(10)	Consumer products and services	8.6% (LIBOR + 6.5%)	10/19/2017	10/19/2022		—		(3	)		—
IRC Opco LLC	Healthcare	7.3% (LIBOR + 5.3%)	1/4/2019	1/4/2024		5,414		5,369			5,414
IRC Opco LLC ⁽⁹⁾	Healthcare	7.5% (LIBOR + 5.3%)	1/4/2019	1/4/2024		27		21			27
Matilda Jane Holdings, Inc.	Consumer products and services	10.6% (LIBOR + 8.5%)	4/28/2017	4/28/2022		11,427		11,292			10,399
				Subtotal midwest	$	20,623	$	20,392		$	19,370
Northeast
—17.21% of net asset value
Certify, Inc.	IT services	7.8% (LIBOR + 5.8%)	2/28/2019	2/28/2024		1,544		1,523			1,521
Certify, Inc. ⁽²⁶⁾	IT services	7.8% (LIBOR + 5.8%)	2/28/2019	2/28/2024		70		68			69
Certify, Inc. ^{(9) (10)}	IT services	7.8% (LIBOR + 5.8%)	2/28/2019	2/28/2024		—		(1	)		—
Communication Technology Intermediate ⁽⁷⁾	Business services	8.1% (LIBOR + 6.0%)	8/26/2019	8/26/2024		8,113		7,953			7,953
Communication Technology Intermediate ⁽⁷⁾⁽⁹⁾⁽¹⁰⁾	Business services	8.1% (LIBOR + 6.0%)	8/26/2019	8/26/2024		—		(15	)		—
DataOnline Corp.	IT services	8.0% (LIBOR + 5.8%)	6/7/2019	7/31/2024		2,687		2,661			2,687
HealthDrive Corporation	Healthcare	7.8% (LIBOR + 5.8%)	12/21/2018	12/21/2023		9,925		9,841			9,925
HealthDrive Corporation ^(9)(10)	Healthcare	7.8% (LIBOR + 5.8%)	12/21/2018	12/21/2023		—		(15	)		—
Simplicity Financial Marketing Holdings Inc.	Financial services	7.9% (LIBOR + 5.8%)	9/13/2019	9/13/2024		3,472		3,421			3,403
Simplicity Financial Marketing Holdings Inc. ^(9)(10)	Financial services	7.9% (LIBOR + 5.8%)	9/13/2019	9/13/2024		—		(6	)		—
Simplicity Financial Marketing Holdings Inc. ⁽²⁵⁾	Financial services	7.9% (LIBOR + 5.8%)	9/13/2019	9/13/2024		145		138			142

See accompanying notes to these consolidated financial statements.

THL Credit, Inc. and Subsidiaries

Consolidated Schedules of Investments

September 30, 2019

(dollar amounts in thousands)

(unaudited)

			Initial	Maturity/	Principal⁽⁵⁾
			Acquisition	Dissolution	No. of Shares /
Type of Investment/Portfolio company ^(1)(2)(3)	Industry	Interest Rate⁽⁴⁾	Date	Date	No. of Units		Amortized Cost			Fair Value ⁽⁶⁾
smarTours, LLC	Consumer products and services	8.9% (LIBOR + 6.8%)	10/31/2017	10/31/2022		5,305		5,238			5,305
smarTours, LLC^(9)(10)	Consumer products and services	8.9% (LIBOR + 6.8%)	10/31/2017	10/31/2022		—		(9	)		—
Urology Management Associates, LLC	Healthcare	7.0% (LIBOR + 5.0%)	8/31/2018	8/31/2024		5,034		4,959			4,982
Women's Health USA, Inc.	Healthcare	7.8% (LIBOR + 5.8%)	10/9/2018	10/9/2023		7,881		7,863			7,881
Women's Health USA, Inc.^(9)(10)	Healthcare	7.8% (LIBOR + 5.8%)	10/9/2018	10/9/2023		—		(15	)		—
Women's Health USA, Inc.	Healthcare	7.9% (LIBOR + 5.8%)	10/9/2018	10/9/2023		29		29			29
				Subtotal northeast	$	44,205	$	43,633		$	43,897
Southeast
—12.61% of net asset value
Virtus Pharmaceuticals, LLC	Healthcare	11.9% ⁽⁸⁾	7/17/2014	1/2/2020	$	24,013	$	23,981		$	24,013
Whitney, Bradley & Brown, Inc.	Business services	9.6% (LIBOR + 7.5%)	10/18/2017	10/18/2022		8,076		8,017			8,157
				Subtotal southeast	$	32,089	$	31,998		$	32,170
Southwest
—22.35% of net asset value
Allied Wireline Services, LLC	Energy / utilities	11.5% (LIBOR + 9.5%)	2/28/2014	6/30/2020	$	9,632	$	9,632		$	9,343
BCDI Rodeo Dental Buyer, LLC	Healthcare	7.2% (LIBOR + 5.0%)	5/14/2019	5/14/2025		5,802		5,747			5,715
BCDI Rodeo Dental Buyer, LLC ⁽⁹⁾	Healthcare	7.1% (LIBOR + 5.0%)	5/14/2019	5/14/2025		162		146			162
BCDI Rodeo Dental Buyer, LLC ⁽⁹⁾	Healthcare	7.2% (LIBOR + 5.0%)	5/14/2019	5/14/2025		—		—			—
Holland Intermediate Acquisition Corp.	Energy / utilities	11.1% (LIBOR + 9.0%)	5/29/2013	5/29/2020		21,323		21,323			13,860
Holland Intermediate Acquisition Corp. ⁽⁹⁾	Energy / utilities	11.1% (LIBOR + 9.0%)	5/29/2013	5/29/2020		—		—			—
Igloo Products Corp.	Consumer products and services	12.6% (LIBOR + 10.3%)	3/28/2014	3/28/2020		24,636		24,584			23,651
Riveron Acquisition Holdings, Inc.	Business services	8.4% (LIBOR + 6.3%)	5/22/2019	5/22/2025		4,337		4,255			4,254
				Subtotal southwest	$	65,892	$	65,687		$	56,985
West
—25.65% of net asset value
ABC Legal Services, Inc.	Business services	7.9% (LIBOR + 5.5%)	6/21/2019	6/21/2024	$	7,273	$	7,152		$	7,157
ABC Legal Services, Inc.^(9)(10)	Business services	7.9% (LIBOR + 5.5%)	6/21/2019	6/21/2024		—		(11	)		—
Alpine SG, LLC	IT services	7.8% (LIBOR + 5.5%)	4/9/2019	11/16/2022		1,316		1,305			1,305
Alpine SG, LLC	IT services	7.8% (LIBOR + 5.5%)	4/9/2019	11/16/2022		659		653			653
Barry's Bootcamp Holdings, LLC	Consumer products and services	8.8% (LIBOR + 6.5%)	5/23/2019	7/14/2022		891		891			891
EBS Intermediate LLC⁽²⁴⁾	Consumer products and services	7.5% (LIBOR + 5.5%)	10/2/2018	10/2/2023		7,906		7,795			7,906
EBS Intermediate LLC ^{(9) (10)(24)}	Consumer products and services	7.5% (LIBOR + 5.5%)	10/2/2018	10/2/2023		—		(24	)		—
Evergreen Services Group, LLC	IT services	8.1% (LIBOR + 6.0%)	11/13/2018	6/6/2023		9,452		9,376			9,358
Gener8, LLC	Business services	7.5% (LIBOR + 5.5%)	8/14/2018	8/14/2023		5,940		5,871			5,940
Gener8, LLC ⁽⁹⁾	Business services	7.5% (LIBOR + 5.5%)	8/14/2018	8/14/2023		1,000		982			1,000

THL Credit, Inc. and Subsidiaries

Consolidated Schedules of Investments

September 30, 2019

(dollar amounts in thousands)

(unaudited)

			Initial	Maturity/	Principal⁽⁵⁾
			Acquisition	Dissolution	No. of Shares /
Type of Investment/Portfolio company ^(1)(2)(3)	Industry	Interest Rate⁽⁴⁾	Date	Date	No. of Units		Amortized Cost			Fair Value ⁽⁶⁾
It's Just Lunch International LLC	Media, entertainment and leisure	10.5% (LIBOR + 8.5%)	7/28/2016	7/28/2021		5,500		5,459			5,500
MeriCal, LLC	Consumer products and services	7.9% (LIBOR + 5.8%)	11/16/2018	11/16/2021		7,510		7,510			7,059
NCP Investor Inc	Healthcare	7.6% (LIBOR + 5.5%)	10/19/2018	10/19/2023		7,098		7,011			7,009
NCP Investor Inc ^{(9) (10)}	Healthcare	7.6% (LIBOR + 5.5%)	10/19/2018	10/19/2023		—		(12	)		—
SolutionReach, Inc.	IT services	7.8% (LIBOR + 5.8%)	1/17/2019	1/17/2024		6,633		6,519			6,633
SolutionReach, Inc.^{(9) (10)}	IT services	7.8% (LIBOR + 5.8%)	1/17/2019	1/17/2024		—		(16	)		—
SRS Acquiom Holdings LLC	Financial services	7.8% (LIBOR + 5.8%)	11/8/2018	11/8/2024		4,963		4,920			5,012
SRS Acquiom Holdings LLC^(10)(23)	Financial services	7.8% (LIBOR + 5.8%)	11/8/2018	11/8/2023		—		(3	)		—
				Subtotal west	$	66,141	$	65,378		$	65,423

			Subtotal first lien senior secured debt		$	233,950	$	232,027		$	222,748

Second lien debt
—8.13% of net asset value
Northeast
—4.70% of net asset value
Merchants Capital Access, LLC ⁽¹⁵⁾	Financial services	12.6% (LIBOR + 10.5%)	4/20/2015	4/20/2021	$	12,000	$	11,936		$	12,000
				Subtotal northeast	$	12,000	$	11,936		$	12,000
Southeast
—3.43% of net asset value
MB Medical Operations LLC	Healthcare	11.4% (LIBOR + 9.0%)	12/7/2016	6/7/2022	$	9,023	$	8,933		$	8,750
				Subtotal southeast	$	9,023	$	8,933		$	8,750

			Subtotal second lien debt		$	21,023	$	20,869		$	20,750

Subordinated debt
—2.71% of net asset value
Southeast
—2.71% of net asset value
Martex Fiber Southern Corp.	Industrials and manufacturing	16.5% (12.0% Cash + 4.5% PIK) ⁽¹¹⁾	4/30/2012	3/31/2020	$	9,886	$	9,886		$	6,920
			Subtotal southeast		$	9,886	$	9,886		$	6,920

			Subtotal subordinated debt		$	9,886	$	9,886		$	6,920

Equity investments
—2.44% of net asset value
Midwest
—0.07% of net asset value

THL Credit, Inc. and Subsidiaries

Consolidated Schedules of Investments

September 30, 2019

(dollar amounts in thousands)

(unaudited)

			Initial	Maturity/	Principal⁽⁵⁾
			Acquisition	Dissolution	No. of Shares /
Type of Investment/Portfolio company ^(1)(2)(3)	Industry	Interest Rate⁽⁴⁾	Date	Date	No. of Units		Amortized Cost		Fair Value ⁽⁶⁾
Matilda Jane Holdings, Inc. ^(13)(18)	Consumer products and services		4/28/2017			488,896	$	489	$	—
New Host Holdings, LLC ⁽¹⁹⁾	IT services		12/27/2013			20,000		200		—
New Host Holdings, LLC ⁽¹⁸⁾	IT services		12/27/2013	12/13/2020		1,800		1,800		196
			Subtotal midwest				$	2,489	$	196
Northeast
—1.82% of net asset value
Alex Toys, LLC ^{(12)(13)(14)(19)}	Consumer products and services		5/22/2015			154	$	1,000	$	—
Alex Toys, LLC ^{(12)(13)(14) (18)}	Consumer products and services		6/22/2016	6/12/2021		121		888		—
Certify, Inc.⁽¹⁹⁾	IT services		2/28/2019			8,409		175		208
Specialty Brands Holdings, LLC ⁽¹⁸⁾	Restaurants		6/29/2018			58		—		—
Specialty Brands Holdings, LLC ⁽¹⁹⁾	Restaurants		6/29/2018			1,232		—		—
SPST Holdings, LLC ^(12)(14)(19)	Consumer products and services		10/31/2017			2,158		216		240
Urology Management Associates, LLC ⁽¹⁹⁾	Healthcare		8/31/2018			769		769		1,069
Wheels Up Partners, LLC ^(12)(14)(19)	Transportation		1/31/2014			1,000,000		1,000		3,124
			Subtotal northeast				$	4,048	$	4,641
Southeast
—0.11% of net asset value
Virtus Pharmaceuticals, LLC ^(12)(14)(19)	Healthcare		3/31/2015			8,275	$	127	$	—
Virtus Pharmaceuticals, LLC ^(12)(14)(18)	Healthcare		3/31/2015			232		244		269
Virtus Pharmaceuticals, LLC ^(12)(14)(18)	Healthcare		3/31/2015			590		590		—
			Subtotal southeast				$	961	$	269
Southwest
—0.24% of net asset value
Allied Wireline Services, LLC ^(12)(14)(19)	Energy / utilities		2/28/2014			618,868	$	619	$	—
Dimont & Associates, Inc. ⁽¹⁹⁾	Financial services		3/14/2016			313		129		—
Igloo Products Corp. ⁽¹⁹⁾	Consumer products and services		4/30/2014			1,902		1,716		621
			Subtotal southwest				$	2,464	$	621
West
—0.190% of net asset value
MeriCal, LLC ^{(12) (13) (18)}	Consumer products and services		9/30/2016			521	$	505	$	136
MeriCal, LLC ^{(12) (13) (19)}	Consumer products and services		9/30/2016			5,334		10		—
Sciens Building Solutions, LLC ^{(12) (18)}	Business services		7/12/2017			170		186		360
			Subtotal west					701	$	496

THL Credit, Inc. and Subsidiaries

Consolidated Schedules of Investments

September 30, 2019

(dollar amounts in thousands)

(unaudited)

			Initial	Maturity/	Principal⁽⁵⁾
			Acquisition	Dissolution	No. of Shares /
Type of Investment/Portfolio company ^(1)(2)(3)	Industry	Interest Rate⁽⁴⁾	Date	Date	No. of Units		Amortized Cost		Fair Value ⁽⁶⁾
				Subtotal equity				10,663		6,223

Warrants
—0.00% of net asset value
Southwest
—0.00% of net asset value
Allied Wireline Services, LLC ⁽¹⁴⁾	Energy / utilities		2/28/2014			501,159	$	175	$	—
				Subtotal southwest			$	175	$	—

				Subtotal warrants			$	175	$	—

Investments in funds
—1.43% of net asset value
Midwest
—1.23% of net asset value
Freeport Financial SBIC Fund LP ^(15)(22)	Financial services		6/14/2013				$	2,957	$	3,129
				Subtotal midwest			$	2,957	$	3,129
West
—0.20% of net asset value
Gryphon Partners 3.5, L.P. ^(15)(22)	Financial services		11/20/2012				$	417	$	512
				Subtotal west			$	417	$	512

			Subtotal investments in funds				$	3,374	$	3,641

Total non-controlled/non-affiliated investments
—102.04% of net asset value							$	276,994	$	260,282

Controlled investments
—56.16% of net asset value

First lien senior secured debt
—18.58% of net asset value
Southeast
—3.10% of net asset value
Loadmaster Derrick & Equipment, Inc.^(16)(20)	Energy / utilities	12.6% (LIBOR + 10.3% PIK)	7/1/2016	12/31/2020	$	9,707	$	7,307	$	728
Loadmaster Derrick & Equipment, Inc. ^(16)(20)	Energy / utilities	14.3% (LIBOR + 12.0%)	7/1/2016	12/31/2020		2,248		1,053		—

THL Credit, Inc. and Subsidiaries

Consolidated Schedules of Investments

September 30, 2019

(dollar amounts in thousands)

(unaudited)

			Initial	Maturity/	Principal⁽⁵⁾
			Acquisition	Dissolution	No. of Shares /
Type of Investment/Portfolio company ^(1)(2)(3)	Industry	Interest Rate⁽⁴⁾	Date	Date	No. of Units		Amortized Cost		Fair Value ⁽⁶⁾
Loadmaster Derrick & Equipment, Inc. ^(16)(20)	Energy / utilities	12.4% (LIBOR+ 10.3% PIK)	1/17/2017	12/31/2020		7,200		6,150		7,200
				Subtotal southeast	$	19,155	$	14,510	$	7,928
Southwest
—15.47% of net asset value



OEM Group, LLC ⁽¹⁶⁾	Industrials and manufacturing	11.5% (LIBOR + 9.5%) (7.5% Cash + 4.0% PIK)	3/16/2016	6/30/2022	$	19,678	$	19,678	$	19,678
OEM Group, LLC ⁽¹⁶⁾	Industrials and manufacturing	11.5% (LIBOR + 9.5%) (7.5% Cash + 4.0% PIK)	3/16/2016	6/30/2022		9,395		9,395		9,395
OEM Group, LLC ⁽¹⁶⁾	Industrials and manufacturing	11.5% (LIBOR + 9.5%) (7.5% Cash + 4.0% PIK)	6/26/2018	6/30/2022		10,388		10,267		10,388
				Subtotal southwest	$	39,461	$	39,340	$	39,461

			Subtotal first lien senior secured debt		$	58,616	$	53,850	$	47,389

Equity investments
—5.93% of net asset value
Southeast
—0.00% of net asset value
Loadmaster Derrick & Equipment, Inc. ^(16)(18)	Energy / utilities		7/1/2016			12,131		1,114		—
Loadmaster Derrick & Equipment, Inc. ^(16)(19)	Energy / utilities		12/21/2016			2,956		—		—
				Subtotal southeast			$	1,114	$	—
Southwest
—0.00% of net asset value
OEM Group, LLC^{(12)(13)(16)(21)}	Industrials and manufacturing		3/16/2016			10,000	$	8,890	$	—
				Subtotal southwest			$	8,890	$	—
West
—5.93% of net asset value
C&K Market, Inc. ^(16)(19)	Retail & grocery		11/3/2010			1,992,365	$	2,270	$	5,174
C&K Market, Inc. ^(16)(18)	Retail & grocery		11/3/2010	7/1/2024		1,992,365		10,956		9,962
				Subtotal west			$	13,226	$	15,136

				Subtotal equity			$	23,230	$	15,136
Investments in funds
—31.65% of net asset value

THL Credit, Inc. and Subsidiaries

Consolidated Schedules of Investments

September 30, 2019

(dollar amounts in thousands)

(unaudited)

			Initial	Maturity/	Principal⁽⁵⁾
			Acquisition	Dissolution	No. of Shares /
Type of Investment/Portfolio company ^(1)(2)(3)	Industry	Interest Rate⁽⁴⁾	Date	Date	No. of Units		Amortized Cost		Fair Value ⁽⁶⁾
Northeast
—31.65% of net asset value
THL Credit Logan JV LLC ^{(12)(15)(16)(17)(19)(22)}	Investment funds and vehicles		12/3/2014			—	$	93,089	$	80,731
				Subtotal northeast				93,089		80,731

			Subtotal investments in funds				$	93,089	$	80,731
Total controlled investments
—56.16% of net asset value							$	170,169	$	143,256

Non-controlled/affiliated investments
—0.00% of net asset value
Investments in funds
—0.00% of net asset value
Northeast
—0.00% of net asset value
THL Credit Greenway Fund LLC ^{(12)(15)(19)(22)}	Investment funds and vehicles		1/27/2011				$	—	$	1
THL Credit Greenway Fund II LLC ^{(12)(15)(19)(22)}	Investment funds and vehicles		3/1/2013					2		3
				Subtotal northeast			$	2	$	4

			Subtotal investments in funds				$	2	$	4

Total non-controlled/affiliated investments

—0.00% of net asset value							$	2	$	4

Total investments—158.21% of net asset value							$	447,165	$	403,542

(1)

All debt investments are income-producing, unless otherwise noted. Equity and member interests are non-income-producing unless otherwise noted. The Company generally acquires its investments in private transactions exempt from registration under the Securities Act of 1933, as amended, or the Securities Act. Its investments are therefore generally subject to certain limitations on resale, and may be deemed to be “restricted securities” under the Securities Act.

(2)	All investments are pledged as collateral under the Revolving Facility.

(3)	As of September 30, 2019, 27.1% of the Company’s total investments on a cost and fair value basis are in non-qualifying assets. The Company may not acquire any non-qualifying assets unless, at the time of the acquisition, qualifying assets represent at least 70% of the Company’s total assets.

(4)

Variable interest rate investments bear interest in reference to London Interbank offer rate, or LIBOR, or Alternate Base Rate, or ABR, which are effective as of September 30, 2019. LIBOR loans are typically indexed to 30-day, 90-day or 180-day LIBOR rates, at the borrower’s option, and ABR rates are typically indexed to the

THL Credit, Inc. and Subsidiaries

Consolidated Schedules of Investments

September 30, 2019

(dollar amounts in thousands)

(unaudited)

current prime rate or federal funds rate. Each LIBOR and ABR rate may be subject to interest floors. As of September 30, 2019, the 30-day, 90-day and 180-day LIBOR rates were 2.02%, 2.09% and 2.06%, respectively.

(5)	Principal includes accumulated PIK, interest and is net of repayments.

(6)	Unless otherwise indicated, all investments are valued using significant unobservable inputs. Refer to Level 3 fair value measurements quantitative information table in Note 3 of the Consolidated Financial Statements for further detail.

(7)	Foreign company or foreign co-borrower at the time of investment and, as a result, is not a qualifying asset under Section 55(a) of the 1940 Act.

(8)	Unitranche investment; interest rate reflected represents the implied interest rate earned on the investment for the most recent quarter.

(9)	Company pays 0.50% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

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

(11)	At the option of the issuer, interest can be paid in cash or cash and PIK. The percentage of PIK shown is the maximum PIK that can be elected by the company.

(12)	Member interests of limited liability companies are the equity equivalents of the stock of corporations.

(13)	Equity ownership may be held in shares or units of companies related to the portfolio company.

(14)	Interest held by a wholly owned subsidiary of THL Credit, Inc.

(15)	Not a qualifying asset under Section 55(a) of the 1940 Act.

(16)

As defined in Section 2(a)(9) of the 1940 Act, the Company is deemed to control this portfolio company because it owns more than 25% of the portfolio company’s outstanding voting securities. See Schedule 12-14 in the accompanying notes to the consolidated financial statements for transactions for the quarter ended September 30, 2019 in which the issuer was a portfolio company that the Company is deemed to control.

(17)

On December 3, 2014, the Company entered into an agreement with Perspecta (as described in Note 3 hereto) to create THL Credit Logan JV LLC, or Logan JV, a joint venture, which invests primarily in senior secured first lien term loans. All Logan JV investment decisions must be unanimously approved by the Logan JV investment committee consisting of one representative from each of the Company and Perspecta. Although the Company owns more than 25% of the voting securities of Logan JV, the Company does not believe that it has control over Logan JV (other than for purposes of the 1940 Act or otherwise).

(18)	Preferred stock.

(19)	Common stock and member interest.

(20)	Loan was on non-accrual as of September 30, 2019.

(21)	Includes $577 of cost and $0 of fair value related to a non-controlling interest as a result of consolidating a blocker corporation that holds equity in OEM Group, LLC as of September 30, 2019.

(22)	Investment is measured at fair value using net asset value.

(23)	Company pays 0.38% unfunded commitment fee on revolving loan facility.

(24)	Investment previously known as Rollins Enterprises LLC.

(25)	Company pays 1.00% unfunded commitment fee on delayed draw term loan facility.

(26)	Company pays 0.25% unfunded commitment fee on revolving loan facility.

THL Credit, Inc. and Subsidiaries

Consolidated Schedules of Investments

December 31, 2018

(dollar amounts in thousands)

			Initial	Maturity/	Principal⁽⁵⁾
			Acquisition	Dissolution	No. of Shares /
Type of Investment/Portfolio company ^(1)(2)(3)	Industry	Interest Rate⁽⁴⁾	Date	Date	No. of Units		Amortized Cost			Fair Value ⁽⁶⁾
Non-controlled/non-affiliated investments
—105.99% of net asset value
First lien senior secured debt
—93.34% of net asset value
Canada
—4.93% of net asset value
Fairstone Financial Inc. ^(7)(22)	Financial services	9.2% (CDOR + 7.0%)	3/31/2017	3/31/2023	$	14,643	$	15,001		$	14,570
				Subtotal Canada	$	14,643	$	15,001		$	14,570
Midwest
—7.77% of net asset value
1-800 Hansons, LLC ⁽²⁷⁾	Consumer products and services	9.3% (LIBOR + 6.5%)	10/19/2017	10/19/2022	$	3,892	$	3,837		$	3,600
1-800 Hansons, LLC ⁽⁹⁾ ⁽²⁷⁾	Consumer products and services	9.3% (LIBOR + 6.5%)	10/19/2017	10/19/2022		209		205			194
Home Partners of America, Inc. ⁽¹⁵⁾	Financial services	8.8% (LIBOR + 6.3%)	10/13/2016	10/13/2022		7,810		7,712			7,888
Home Partners of America, Inc. ^{(15) (9)}	Financial services	8.8% (LIBOR + 6.3%)	10/13/2016	10/13/2022		—		—			—
Matilda Jane Holdings, Inc.	Consumer products and services	11.0% (LIBOR + 8.5%)	4/28/2017	4/28/2022		11,408		11,235			11,294
				Subtotal midwest	$	23,319	$	22,989		$	22,976
Northeast
—16.99% of net asset value
Alex Toys, LLC	Consumer products and services	12.8% (LIBOR + 10.0%)	6/30/2014	8/15/2019	$	9,186	$	9,159		$	7,716
Anexinet Corp.	IT services	9.0% (LIBOR + 6.5%)	7/28/2017	7/28/2022		16,521		16,283			15,861
HealthDrive Corporation	Healthcare	8.6% (LIBOR + 5.8%)	12/21/2018	12/21/2023		10,000		9,901			9,900
HealthDrive Corporation ^{(9) (10)}	Healthcare	8.6% (LIBOR + 5.8%)	12/21/2018	12/21/2023		—		(18	)		—
smarTours, LLC	Consumer products and services	9.6% (LIBOR + 6.8%)	10/31/2017	10/31/2022		5,876		5,785			5,876
smarTours, LLC^(9)(10)	Consumer products and services	9.6% (LIBOR + 6.8%)	10/31/2017	10/31/2022		—		(12	)		—
Urology Management Associates, LLC	Healthcare	7.5% (LIBOR+ 5.0%)	8/31/2018	8/31/2024		5,072		4,988			4,983
Women's Health USA, Inc.	Healthcare	8.3% (LIBOR + 5.8%)	10/9/2018	10/9/2023		5,941		5,939			5,911
Women's Health USA, Inc.^{(9) (10)}	Healthcare	8.3% (LIBOR + 5.8%)	10/9/2018	10/9/2023		—		(18	)		—
Women's Health USA, Inc.	Healthcare	8.3% (LIBOR + 5.8%)	10/9/2018	10/9/2023		—		—			—
				Subtotal northeast	$	52,596	$	52,007		$	50,247
Southeast
—8.74% of net asset value
Virtus Pharmaceuticals, LLC	Healthcare	12.0%⁽⁸⁾	7/17/2014	7/17/2019	$	24,013	$	23,937		$	23,352
Whitney, Bradley & Brown, Inc.	Business services	11.5% (LIBOR + 9.0%)	10/18/2017	10/18/2022		2,459		2,422			2,484
				Subtotal southeast	$	26,472	$	26,359		$	25,836
Southwest
—35.21% of net asset value

THL Credit, Inc. and Subsidiaries

Consolidated Schedules of Investments

December 31, 2018

(dollar amounts in thousands)

			Initial	Maturity/	Principal⁽⁵⁾
			Acquisition	Dissolution	No. of Shares /
Type of Investment/Portfolio company ^(1)(2)(3)	Industry	Interest Rate⁽⁴⁾	Date	Date	No. of Units		Amortized Cost			Fair Value ⁽⁶⁾
Allied Wireline Services, LLC	Energy / utilities	12.0% (LIBOR + 9.5%)	2/28/2014	6/30/2020	$	9,902	$	9,903		$	9,902
Hart InterCivic, Inc.	IT services	13.3% (LIBOR + 10.5%)	3/31/2016	3/31/2019		24,717		24,676			24,964
Holland Intermediate Acquisition Corp.	Energy / utilities	11.8% (LIBOR + 9.0%)	5/29/2013	5/29/2020		21,323		21,323			19,191
Holland Intermediate Acquisition Corp. ⁽⁹⁾	Energy / utilities	11.8% (LIBOR + 9.0%)	5/29/2013	5/29/2020		—		—			—
Igloo Products Corp.	Consumer products and services	12.7% (LIBOR+ 10.3%)	3/28/2014	3/28/2020		24,636		24,506			23,404
LAI International, Inc.	Industrials and manufacturing	11.6%⁽⁸⁾	10/22/2014	10/22/2019		21,666		21,581			16,249
LAI International, Inc. ⁽⁹⁾	Industrials and manufacturing	9.7% (LIBOR+ 7.2%) ⁽⁸⁾	10/22/2014	10/22/2019		4,445		4,445			3,334
LAI International, Inc. ⁽⁹⁾	Industrials and manufacturing	12.3% ⁽⁸⁾	4/24/2017	10/22/2019		3,956		3,931			2,967
LAI International, Inc.	Industrials and manufacturing	19.7% (LIBOR+ 17.2%) (9.7% Cash + 10.0% PIK)⁽⁸⁾	10/12/2018	10/22/2019		4,090		4,090			4,090
				Subtotal southwest	$	114,735	$	114,455		$	104,101
West
—19.70% of net asset value
Evergreen Services Group, LLC	IT services	8.7% (LIBOR + 6.0%)	11/13/2018	6/6/2023	$	9,500	$	9,408		$	9,405
Gener8, LLC	Business services	8.0% (LIBOR + 5.5%)	8/14/2018	8/14/2023		5,985		5,902			5,925
Gener8, LLC ⁽⁹⁾	Business services	8.0% (LIBOR + 5.5%)	8/14/2018	8/14/2023		550		529			550
It's Just Lunch International LLC	Media, entertainment and leisure	11.0% (LIBOR + 8.5%)	7/28/2016	7/28/2021		5,500		5,442			5,500
MeriCal, LLC	Consumer products and services	8.6% (LIBOR+ 5.8%)	11/16/2018	11/16/2021		7,566		7,566			7,566
NCP Investor Inc	Healthcare	7.9% (LIBOR + 5.5%)	10/19/2018	10/19/2023		7,233		7,129			7,125
NCP Investor Inc ^{(9) (10)}	Healthcare	7.9% (LIBOR + 5.5%)	10/19/2018	10/19/2023		—		(14	)		—
Rollins Enterprises LLC	Consumer products and services	8.0% (LIBOR + 5.5%)	10/2/2018	10/2/2023		7,976		7,844			7,837
Rollins Enterprises LLC ^{(9) (10)}	Consumer products and services	8.0% (LIBOR + 5.5%)	10/2/2018	10/2/2023		—		(28	)		—
Sciens Building Solutions, LLC	Business services	8.6% (LIBOR + 5.8%)	2/2/2017	2/2/2022		9,440		9,318			9,392
Sciens Building Solutions, LLC ^{(9) (10)}	Business services	8.6% (LIBOR + 5.8%)	2/2/2017	2/2/2022		—		(33	)		—
SRS Acquiom Holdings LLC	Financial services	8.4% (LIBOR + 6.0%)	11/8/2018	11/8/2024		5,000		4,951			4,950
SRS Acquiom Holdings LLC^(10)(28)	Financial services	8.4% (LIBOR + 6.0%)	11/8/2018	11/8/2023		—		(4	)		—
				Subtotal west	$	58,750	$	58,010		$	58,250

			Subtotal first lien senior secured debt		$	290,515	$	288,821		$	275,980

Second lien debt
—6.72% of net asset value
Northeast
—4.04% of net asset value
Merchants Capital Access, LLC ⁽¹⁵⁾	Financial services	13.3% (LIBOR + 10.5%)	4/20/2015	4/20/2021	$	12,000	$	11,906		$	11,940

THL Credit, Inc. and Subsidiaries

Consolidated Schedules of Investments

December 31, 2018

(dollar amounts in thousands)

			Initial	Maturity/	Principal⁽⁵⁾
			Acquisition	Dissolution	No. of Shares /
Type of Investment/Portfolio company ^(1)(2)(3)	Industry	Interest Rate⁽⁴⁾	Date	Date	No. of Units		Amortized Cost		Fair Value ⁽⁶⁾
				Subtotal northeast	$	12,000	$	11,906	$	11,940
Southeast
—2.68% of net asset value
MB Medical Operations LLC	Healthcare	11.5% (LIBOR + 9.0%)	12/7/2016	6/7/2022	$	9,023	$	8,910	$	7,940
				Subtotal southeast	$	9,023	$	8,910	$	7,940

			Subtotal second lien debt		$	21,023	$	20,816	$	19,880

Subordinated debt
—2.22% of net asset value
Southeast
—2.22% of net asset value
Martex Fiber Southern Corp.	Industrials and manufacturing	16.5% (12.0% Cash + 4.5% PIK) ⁽¹¹⁾	4/30/2012	6/30/2019	$	9,365	$	9,365	$	6,556
			Subtotal southeast		$	9,365	$	9,365	$	6,556

			Subtotal subordinated debt		$	9,365	$	9,365	$	6,556

Equity investments
—2.32% of net asset value
Midwest
—0.18% of net asset value
Matilda Jane Holdings, Inc. ^(13)(18)	Consumer products and services		4/28/2017			488,896	$	489	$	343
New Host Holdings, LLC ^(19)(29)	IT services		12/27/2013			20,000		200		-
New Host Holdings, LLC ^(18)(29)	IT services		12/27/2013	12/13/2020		1,800		1,800		196
			Subtotal midwest				$	2,489	$	539
Northeast
—1.42% of net asset value
Alex Toys, LLC ^{(12)(13)(14)(19)}	Consumer products and services		5/22/2015			153.85	$	1,000	$	—
Alex Toys, LLC ^{(12)(13)(14) (18)}	Consumer products and services		6/22/2016	6/12/2021		121.18		888		—
Specialty Brands Holdings, LLC ⁽¹⁸⁾	Restaurants		6/29/2018			57.63		—		—
Specialty Brands Holdings, LLC ⁽¹⁹⁾	Restaurants		6/29/2018			1,232.27		—		—
SPST Holdings, LLC ^(12)(14)(19)	Consumer products and services		10/31/2017			2,158.27		216		228
Urology Management Associates, LLC ⁽¹⁹⁾	Healthcare		8/31/2018			769.23		769		842
Wheels Up Partners, LLC ^(12)(14)(19)	Transportation		1/31/2014			1,000,000.00		1,000		3,124
			Subtotal northeast				$	3,873	$	4,194
Southeast
—0.06% of net asset value
Virtus Pharmaceuticals, LLC ^(12)(14)(19)	Healthcare		3/31/2015			8,275.48	$	127	$	-

THL Credit, Inc. and Subsidiaries

Consolidated Schedules of Investments

December 31, 2018

(dollar amounts in thousands)

			Initial	Maturity/	Principal⁽⁵⁾
			Acquisition	Dissolution	No. of Shares /
Type of Investment/Portfolio company ^(1)(2)(3)	Industry	Interest Rate⁽⁴⁾	Date	Date	No. of Units		Amortized Cost		Fair Value ⁽⁶⁾
Virtus Pharmaceuticals, LLC ^(12)(14)(18)	Healthcare		3/31/2015			231.82		244		181
Virtus Pharmaceuticals, LLC ^(12)(14)(18)	Healthcare		3/31/2015			589.76		590		—
			Subtotal southeast				$	961	$	181
Southwest
—0.39% of net asset value
Allied Wireline Services, LLC ^(12)(14)(19)	Energy / utilities		2/28/2014			618,867.92	$	619	$	716
Dimont & Associates, Inc. ⁽¹⁹⁾	Financial services		3/14/2016			312.51		129		—
Igloo Products Corp. ⁽¹⁹⁾	Consumer products and services		4/30/2014			1,902.04		1,716		449
			Subtotal southwest				$	2,464	$	1,165
West
—0.27% of net asset value
MeriCal, LLC ^{(12) (13) (18)}	Consumer products and services		9/30/2016			520.77	$	505	$	594
MeriCal, LLC ^{(12) (13) (19)}	Consumer products and services		9/30/2016			5,334.10		10		—
Sciens Building Solutions, LLC ^{(12) (18)}	Business services		7/12/2017			170.39		170		197
			Subtotal west					685	$	791

				Subtotal equity				10,472		6,870

Warrants
—0.20% of net asset value
Southwest
—0.20% of net asset value
Allied Wireline Services, LLC ⁽¹⁴⁾	Energy / utilities		2/28/2014			501,159.24	$	175	$	580
				Subtotal southwest			$	175	$	580

				Subtotal warrants			$	175	$	580

Investments in funds
—1.19% of net asset value
Midwest
—1.02% of net asset value
Freeport Financial SBIC Fund LP ^(15)(23)	Financial services		6/14/2013				$	2,957	$	3,009
				Subtotal midwest			$	2,957	$	3,009
West
—0.17% of net asset value
Gryphon Partners 3.5, L.P. ^(15)(23)	Financial services		11/20/2012				$	417	$	502
				Subtotal west			$	417	$	502

THL Credit, Inc. and Subsidiaries

Consolidated Schedules of Investments

December 31, 2018

(dollar amounts in thousands)

			Initial	Maturity/	Principal⁽⁵⁾
			Acquisition	Dissolution	No. of Shares /
Type of Investment/Portfolio company ^(1)(2)(3)	Industry	Interest Rate⁽⁴⁾	Date	Date	No. of Units		Amortized Cost		Fair Value ⁽⁶⁾
			Subtotal investments in funds				$	3,374	$	3,511

Total non-controlled/non-affiliated investments
—105.99% of net asset value							$	333,023	$	313,377

Controlled investments
—56.72% of net asset value

First lien senior secured debt
—13.96% of net asset value
Southeast
—2.24% of net asset value
Loadmaster Derrick & Equipment, Inc.^(16)(20)	Energy / utilities	11.9% (LIBOR + 10.3% PIK)	7/1/2016	12/31/2020	$	8,315	$	7,307	$	1,663
Loadmaster Derrick & Equipment, Inc. ^(16)(20)	Energy / utilities	13.7% (LIBOR+ 12.0% PIK)	7/1/2016	12/31/2020		1,885		1,053		—
Loadmaster Derrick & Equipment, Inc. ^(16)(20)	Energy / utilities	12.7% (LIBOR + 10.3%)	1/17/2017	12/31/2020		5,000		5,000		5,000
				Subtotal southeast	$	15,200	$	13,360	$	6,663
Southwest
—11.72% of net asset value



OEM Group, LLC ⁽¹⁶⁾	Industrials and manufacturing	12.0% (LIBOR + 9.5%) (8.0% Cash + 4.0% PIK)	3/16/2016	6/30/2022	$	19,091	$	19,091	$	19,091
OEM Group, LLC ⁽¹⁶⁾	Industrials and manufacturing	12.0% (LIBOR + 9.5%) (8.0% Cash + 4.0% PIK)	3/16/2016	6/30/2022		9,115		9,113		9,115
OEM Group, LLC ⁽¹⁶⁾	Industrials and manufacturing	12.0% (LIBOR + 9.5%) (8.0% Cash + 4.0% PIK)	6/26/2018	6/30/2022		6,424		6,271		6,424
				Subtotal southwest	$	34,630	$	34,475	$	34,630

			Subtotal first lien senior secured debt		$	49,830	$	47,835	$	41,293

Second lien debt
—1.83% of net asset value
Southeast
—1.83% of net asset value
Copperweld Bimetallics LLC ⁽¹⁶⁾	Industrials and manufacturing	12.0%	10/5/2016	10/5/2021	$	5,415	$	5,415	$	5,415
				Subtotal southeast	$	5,415	$	5,415	$	5,415

THL Credit, Inc. and Subsidiaries

Consolidated Schedules of Investments

December 31, 2018

(dollar amounts in thousands)

			Initial	Maturity/	Principal⁽⁵⁾
			Acquisition	Dissolution	No. of Shares /
Type of Investment/Portfolio company ^(1)(2)(3)	Industry	Interest Rate⁽⁴⁾	Date	Date	No. of Units		Amortized Cost		Fair Value ⁽⁶⁾

			Subtotal second lien debt		$	5,415	$	5,415	$	5,415

Equity investments
—12.24% of net asset value
Southeast
—6.51% of net asset value
Copperweld Bimetallics LLC ^(16)(18)(24)	Industrials and manufacturing		10/5/2016			676.93	$	3,501	$	4,038
Copperweld Bimetallics LLC ^(16)(19)	Industrials and manufacturing		10/5/2016	10/5/2021		609,230		8,950		15,244
Loadmaster Derrick & Equipment, Inc. ^(16)(18)	Energy / utilities		7/1/2016			12,130.51		1,114		—
Loadmaster Derrick & Equipment, Inc. ^(16)(19)	Energy / utilities		12/21/2016			2,955.60		—		—
				Subtotal southeast			$	13,565	$	19,282
Southwest
—0.57% of net asset value
OEM Group, LLC^{(12)(13)(16)(21)}	Industrials and manufacturing		3/16/2016			10,000	$	8,890	$	1,674
				Subtotal southwest			$	8,890	$	1,674
West
—5.16% of net asset value
C&K Market, Inc. ^(16)(19)	Retail & grocery		11/3/2010			1,992,365	$	2,271	$	5,282
C&K Market, Inc. ^(16)(18)	Retail & grocery		11/3/2010	7/1/2024		1,992,365		10,956		9,962
				Subtotal West			$	13,227	$	15,244

				Subtotal equity			$	35,682	$	36,200
Investments in funds
—28.69% of net asset value
Northeast
—28.69% of net asset value
THL Credit Logan JV LLC ^{(12)(15)(16)(17)(19)(23)}	Investment funds and vehicles		12/3/2014			—	$	92,393	$	84,825
				Subtotal northeast				92,393		84,825

			Subtotal investments in funds				$	92,393	$	84,825
Total controlled investments
—56.72% of net asset value							$	181,325	$	167,733

Non-controlled/affiliated investments
—4.24% of net asset value

First lien senior secured debt
—4.08% of net asset value

THL Credit, Inc. and Subsidiaries

Consolidated Schedules of Investments

December 31, 2018

(dollar amounts in thousands)

			Initial	Maturity/	Principal⁽⁵⁾
			Acquisition	Dissolution	No. of Shares /
Type of Investment/Portfolio company ^(1)(2)(3)	Industry	Interest Rate⁽⁴⁾	Date	Date	No. of Units		Amortized Cost		Fair Value ⁽⁶⁾
Southwest
Charming Charlie LLC ^{(20) (25)}	Retail & grocery	12.5% (LIBOR + 10%) (7.5% Cash + 5.0% PIK)	4/24/2018	4/24/2023	$	11,469	$	11,063	$	5,850
Charming Charlie LLC ^{(20) (25)}	Retail & grocery	12.5% (LIBOR + 10%) (3.5% Cash + 9.0% PIK)	4/24/2018	4/24/2023		14,040		13,555		5,554
Charming Charlie LLC ^(25)(26)	Retail & grocery		4/24/2018	5/15/2019		—		—		—
Charming Charlie LLC ⁽²⁶⁾	Retail & grocery	20.0%	9/27/2018	5/15/2019		671		671		671

				Subtotal southwest	$	26,180	$	25,289	$	12,075

				Subtotal first lien senior secured debt			$	25,289	$	12,075
Equity investments
—0.16% of net asset value
Southwest
Charming Charlie LLC ⁽¹⁹⁾	Retail & grocery		4/24/2018			128,307,716	$	—	$	464
				Subtotal southwest			$	—	$	464

				Subtotal equity			$	—	$	464
Investments in funds
—0.00% of net asset value
Northeast
—0.00% of net asset value
THL Credit Greenway Fund LLC ^{(12)(15)(19)(23)}	Investment funds and vehicles		1/27/2011				$	1	$	1
THL Credit Greenway Fund II LLC ^{(12)(15)(19)(23)}	Investment funds and vehicles		3/1/2013					2		3
				Subtotal northeast			$	3	$	4

			Subtotal investments in funds				$	3	$	4

Total non-controlled/affiliated investments
—4.24% of net asset value							$	25,292	$	12,543

Total investments—166.95% of net asset value							$	539,640	$	493,653

(1)

(2)	All investments are pledged as collateral under the Revolving Facility.

THL Credit, Inc. and Subsidiaries

Consolidated Schedules of Investments

December 31, 2018

(dollar amounts in thousands)

(3)

As of December 31, 2018, 24.2% and 24.9% of the Company’s total investments on a cost and fair value basis, respectively, are in non-qualifying assets. The Company may not acquire any non-qualifying assets unless, at the time of the acquisition, qualifying assets represent at least 70% of the Company’s total assets.

(4)

Variable interest rate investments bear interest in reference to London Interbank offer rate, or LIBOR, Canadian Dollar offer rate, or CDOR, or Alternate Base Rate, or ABR, which are effective as of December 31, 2018. LIBOR loans and CDOR loans are typically indexed to 30-day, 60-day, 90-day or 180-day LIBOR or CDOR rates, at the borrower’s option, and ABR rates are typically indexed to the current prime rate or federal funds rate. Each of LIBOR, CDOR and ABR rates may be subject to interest floors. As of December 31, 2018, the 30-day, 60-day, 90-day and 180-day LIBOR rates were 2.52%, 2.62%, 2.80% and 2.87%, respectively. As of December 31, 2018, the 30-day, 60-day, 90-day and 180-day CDOR rates were 2.30%, 2.30%, 2.31% and 2.34%, respectively.

(5)	Principal includes accumulated PIK, interest and is net of repayments.

(6)	Unless otherwise indicated, all investments are valued using significant unobservable inputs. Refer to quantitative information about Level 3 fair value measurements table in the Note 3 of the Consolidated Financial Statements for further detail.

(7)	Foreign company at the time of investment and, as a result, is not a qualifying asset under Section 55(a) of the 1940 Act.

(8)	Unitranche investment; interest rate reflected represents the implied interest rate earned on the investment for the most recent quarter.

(9)	Company pays 0.50% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

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

(11)	At the option of the issuer, interest can be paid in cash or cash and PIK. The percentage of PIK shown is the maximum PIK that can be elected by the company.

(12)	Member interests of limited liability companies are the equity equivalents of the stock of corporations.

(13)	Equity ownership may be held in shares or units of companies related to the portfolio company.

(14)	Interest held by a substantially owned subsidiary of THL Credit, Inc.

(15)	Not a qualifying asset under Section 55(a) of the 1940 Act.

(16)

As defined in Section 2(a)(9) of the 1940 Act, the Company is deemed to control this portfolio company because it owns more than 25% of the portfolio company’s outstanding voting securities. See Schedule 12-14 in the accompanying notes to the consolidated financial statements for transactions for the year ended December 31, 2018 in which the issuer was a portfolio company that the Company is deemed to control.

(17)

On December 3, 2014, the Company entered into an agreement with Perspecta to create THL Credit Logan JV LLC, or Logan JV, a joint venture, which invests primarily in senior secured first lien term loans. All Logan JV investment decisions must be unanimously approved by the Logan JV investment committee consisting of one representative from each of the Company and Perspecta. Although the Company owns more than 25% of the voting securities of Logan JV, the Company does not believe that it has control over Logan JV (other than for purposes of the 1940 Act or otherwise).

(18)	Preferred stock.

(19)	Common stock and member interest.

(20)	Loan was on non-accrual as of December 31, 2018.

(21)	Includes $577 of cost and $0 of fair value related to a non-controlling interest as a result of consolidating a blocker corporation that holds equity in OEM Group, LLC as of December 31, 2018.

(22)	Canadian denominated investment with a par and fair market value of CAD $20,000 and CAD $19,900, respectively.

(23)	Investment is measured at fair value using net asset value.

(24)	Company’s preferred stock is income-producing with a stated rate of 12.0% due quarterly.

(25)

In January 2018, the Company's commitment in the DIP facilities allowed it to convert $17,893 of principal of its Pre-petition Term Loan into a DIP Roll-up Term Loan. As part of this conversion and in accordance with debt extinguishment rules under GAAP (as defined in Note 2), the Company recorded a realized loss of $8,369, which was offset by a corresponding change in unrealized appreciation in the same amount. Subsequently, on April 24, 2018, Charming Charlie LLC emerged from Chapter 11 bankruptcy proceedings whereby the Company converted its DIP facilities, Pre-petition Term Loan and DIP Roll-up Term Loan into two new exit first lien term loans and a non-controlling common equity interest (the Company and other funds managed by the Advisor collectively have a controlling equity interest in Charming Charlie LLC). On

THL Credit, Inc. and Subsidiaries

Consolidated Schedules of Investments

December 31, 2018

(dollar amounts in thousands)

the same date, the Company funded $894 of the remaining unfunded commitments under its DIP facilities and used an additional $2,236 to purchase another lender's existing DIP revolving credit facility, all of which converted to the exit first lien term loans. As a result of these transactions, the Company's debt investment in Charming Charlie is comprised of $24,601 in the exit first lien term loans. In addition, the Company provided $8,946 of commitments under a vendor financing facility (see tickmark 26 for further description), which was subsequently reduced to $8,275 with $671 funded into a first lien term loan. As part of this conversion and in accordance with GAAP, the company recorded a realized loss of $3,125, which was offset by a corresponding change in unrealized depreciation in the same amount.

(26)

In conjunction with the emergence from bankruptcy on April 24, 2018, a $20,000 vendor financing facility was established and will backstop the payment of vendor purchase order invoices not paid by the company but submitted under the program by participating vendors. Charming Charlie LLC pays a 2.5% fee on unfunded commitments, a percentage fee on each applicable purchase order and, if drawn, an interest rate on any invoices paid by the facility. All terms, including but not limited to interest rate, vendor credit terms and applicable percentage fees, are negotiated on a vendor-by-vendor basis. As of December 31, 2018, the Company had a commitment of $8,275 with no funded commitments or unpaid invoices submitted under the vendor financing facility. During the year ended December 31, 2018, the Company converted $671 of unfunded vendor financing commitments into a first lien term loan which was subsequently funded.

(27)	Investment formerly known as Hansons Window & Construction, Inc. The name change was effective January 1, 2018.

(28)	Company pays 0.38% unfunded commitment fee on revolving loan facility.

(29)	Investment formerly known as Hostway Corporation.

THL Credit, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2019

(in thousands, except per share data)

(unaudited)

1. Organization

THL Credit, Inc., or the Company, was organized as a Delaware corporation on May 26, 2009. The Company has elected to be regulated as a business development company, or BDC, under the Investment Company Act of 1940, as amended, or 1940 Act. The Company has elected to be treated for tax purposes as a regulated investment company, or RIC, under the Internal Revenue Code of 1986, as amended, or the Code. The Company’s investment objective is to generate both current income and capital appreciation, primarily through privately negotiated investments in debt and equity securities of middle market companies.

The Company has established from time to time wholly owned subsidiaries or other subsidiaries that are structured as Delaware entities, or as tax blockers, to hold equity or equity-like investments in portfolio companies organized as limited liability companies, or LLCs (or other forms of pass-through entities). Corporate subsidiaries are not consolidated for income tax purposes and may incur income tax expense as a result of their ownership of portfolio companies.

The Company has a wholly owned subsidiary, THL Corporate Finance, Inc., which serves as the administrative agent on certain investment transactions.

2. Significant Accounting Policies and Recent Accounting Updates

Basis of Presentation

The Company is an investment company following the accounting and reporting guidance under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services—Investment Companies.

The consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. In accordance with Article 6 of Regulation S-X under the Securities Act of 1933, as amended, and the Securities and Exchange Act of 1934, as amended, the Company generally will not consolidate its interest in any company other than in investment company subsidiaries and controlled operating companies substantially all of whose business consists of providing services to the Company. The Company has made reclassifications to the presentation of certain prior year information to conform with the current period presentation.

The accompanying consolidated financial statements of the Company have been presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with GAAP are omitted. In the opinion of management, the unaudited financial results included herein contain all adjustments, consisting solely of normal accruals, considered necessary for the fair statement of financial statements for the interim period included herein. The current period’s results of operations are not necessarily indicative of the operating results to be expected for the period ending December 31, 2019.

The information included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the audited consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2018 filed with the SEC on March 6, 2019. The financial results of the Company’s portfolio companies are not consolidated in the financial statements.

The accounting records of the Company are maintained in U.S. dollars.

Consolidation

The Company follows the guidance in ASC Topic 946 Financial Services—Investment Companies and will not generally consolidate its investment in a company other than substantially owned investment company subsidiaries or a controlled operating company whose business consists of providing services to the Company. The Company consolidated the results of its substantially owned subsidiaries in its consolidated financial statements. In conjunction with the consolidation of subsidiaries, the Company recognizes the non-controlling interest in THL Credit OEMG Investor, Inc. in its consolidated financial statements. The Company does not consolidate its non-controlling interest in THL Credit Logan JV LLC, or Logan JV. See also the disclosure under the heading, Logan JV.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that may affect the reported amounts and disclosures in the financial statements. Changes in the economic environment, financial markets, creditworthiness of the Company’s portfolio companies and any other parameters used in determining these estimates could cause actual results to differ and these differences could be material.

Cash

Cash consists of funds held in demand deposit accounts at two financial institutions and, at certain times, balances may exceed the Federal Deposit Insurance Corporation insured limit and is therefore subject to credit risk. There were no cash equivalents as of September 30, 2019 and December 31, 2018.

Deferred Financing Costs

Deferred financing costs consist of fees and expenses paid in connection with the closing and amendments of the Revolving Facility (as defined in Note 7 hereto) and public offering of Notes (as defined in Note 7 hereto) including legal, accounting, printing fees and other related expenses, as well as costs incurred in connection with the filing of a shelf registration statement. These costs are capitalized at the time of payment and are amortized using the straight line and effective yield methods over the term of the Revolving Facility and Notes, respectively.

Under the Notes payable, if there is a substantial modification of the terms of the existing agreement (greater than 10% change in the present value of cash flows under the old and new amended facilities) then the change would result in a debt extinguishment and any unamortized deferred financing costs would be expensed during that period. Third party costs under the new arrangement would be capitalized and amortized over the term of the new arrangement. Under the Revolving Facility, if the borrowing capacity of the old arrangement is lower than the borrowing capacity of the new arrangement evaluated on a lender by lender basis, then any unamortized deferred financing costs would be expensed during the period in proportion to the decrease in the old arrangement for that lender. Any remaining unamortized deferred financing costs related to the old arrangement would be deferred and amortized over the term of the new arrangement along with any costs associated with the new arrangement.

Capitalized deferred financing costs related to the Notes are presented net against the respective balances outstanding on the Consolidated Statements of Assets and Liabilities. Capitalized deferred financing costs related to the Revolving Facility are presented separately on the Company’s Consolidated Statements of Assets and Liabilities. See also the disclosure in Note 7, Borrowings.

Deferred Offering Costs

Deferred offering costs consist of fees and expenses incurred in connection with the offer and sale of the Company’s common stock and public debt offering of Notes, including legal, accounting, printing fees and other related expenses, as well as costs incurred in connection with the filing of a shelf registration statement. These amounts are capitalized when incurred and recognized as a reduction of offering proceeds when the offering becomes effective or expensed upon expiration of the registration statement.

Fair Value of Financial Instruments

The carrying amounts of the Company’s financial instruments, including cash, accounts payable and accrued expenses, approximate fair value due to their short-term nature. The carrying amounts and fair values of the Company’s long-term debt obligations are disclosed in Note 7, Borrowings.

Valuation of Investments

The Company accounts for its Investment Portfolio at fair value. As a result, the Company follows the provisions of ASC 820, Fair Value Measurements and Disclosures ("ASC 820"). ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value and enhances disclosure requirements for fair value measurements. ASC 820 requires the Company to assume that the portfolio investment is to be sold in the principal market to independent market participants, which may be a hypothetical market. Market participants are defined as buyers and sellers in the principal market that are independent, knowledgeable and willing and able to transact.

Investments, for which market quotations are readily available, are valued using market quotations, which are generally obtained from an independent pricing service or broker-dealers or market makers. Debt and equity securities, for which market quotations are not readily available or are determined to be unreliable are valued at fair value as determined in good faith by the Company’s board of directors. Because the Company expects that there will not be a readily available market value for many of the investments in the Company’s portfolio, it is expected that many of the Company’s portfolio investments’ values will be determined in good faith by the Company’s board of directors in accordance with a documented valuation policy that has been reviewed and approved by the Company’s board of directors and in accordance with GAAP. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.

With respect to investments for which market quotations are not readily available or are determined to be unreliable, the Company undertakes a multi- step valuation process each quarter, as described below:

•

the Company’s quarterly valuation process begins with each portfolio company or investment being initially valued by the investment professionals responsible for managing portfolio investments;

•

valuation recommendations are then presented to the pricing committee of the Advisor and voted upon;

•

to the extent determined by the audit committee of the Company’s board of directors, independent valuation firms are used to conduct independent appraisals of all “Level 3” investments and review the Advisor’s preliminary valuations in light of their own independent assessment unless the amounts are immaterial or have closed near quarter-end;

•

the audit committee of the Company’s board of directors reviews the preliminary valuations approved by the pricing committee of the Advisor and such valuations provided by the independent valuation firms and, if necessary, responds and supplements the valuation recommendation of the independent valuation firms to reflect any comments; and

•

the Company’s board of directors discusses valuations and determines the fair value of each investment in the Company’s portfolio in good faith based on the input of the Advisor, the respective independent valuation firms and the audit committee.

The types of factors that the Company may take into account in fair value pricing its investments include, as relevant, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flows, the markets in which the portfolio company does business, comparison to publicly traded securities and other relevant factors. The Company generally utilizes an income approach to value its debt investments and a combination of income and market approaches to value its equity investments. With respect to unquoted securities, the Advisor and the Company’s board of directors, in consultation with the Company’s independent third party valuation firms, values each investment considering, among other measures, discounted cash flow models, comparisons of financial ratios of peer companies that are public and other factors, which valuation is then approved by the board of directors.

Debt Investments

For debt investments, the Company generally determines the fair value using an income approach that analyzes the future cash flows of interest and principal for the debt security, as set forth in the associated loan agreements, discounted at the comparative yield which takes into consideration financial position and credit risk of each portfolio investment. The Company’s estimate of the expected repayment date is generally the legal maturity date of the instrument. The determination of the comparative yield considers changes in weighted average cost of capital, leverage levels, credit quality, portfolio company performance and other factors.

The enterprise value, determined using comparable company technique of the market approach, is used to determine the value of equity and debt investments that are credit impaired, close to maturity or where the Company also holds a controlling equity interest. The comparable company technique of the market approach determines enterprise value using a multiple analysis of comparable transactions, whereby appropriate multiples are applied to the portfolio company’s revenues or net income before net interest expense, income tax expense, depreciation and amortization, or EBITDA.

Escrow receivable and other receivables

Escrow receivables are categorized within Level 3 of the fair value hierarchy where the net realizable value of the escrow receivables approximates fair value. Other receivables are categorized within Level 3 of the fair value hierarchy where the net realizable value of the receivables approximates fair value. The fair value of escrow receivables and other receivables is determined using waterfall or liquidation analyses based on anticipated proceeds which may incorporate probability weighted scenario analysis.

Equity

The Company generally uses the market approach to value its equity investments. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The measurement is based on the value indicated by current market expectations about those future amounts. In following this approach, the types of factors that the Company may take into account in fair value pricing the Company’s investments include, as relevant: available current market data, including relevant and applicable market trading and transaction comparables, applicable market yields and multiples, the current investment performance rating, information rights, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, transaction comparables, the Company’s principal market as the reporting entity and enterprise values, among other factors.

Investment in Funds

In circumstances in which net asset value per share of an investment is indicative of fair value, the Company estimates the fair value of an investment in an investment company using the net asset value per share of the investment (or its equivalent) without further adjustment if the net asset value per share of the investment is determined in accordance with the specialized accounting guidance for investment companies as of the reporting entity’s measurement date.

Foreign Currency

Foreign currency amounts are translated into U.S. dollars on the following basis:

•

cash and cash equivalents, market value of investments, outstanding debt on revolving credit facilities, other assets and liabilities: at the spot exchange rate on the last business day of the period; and

•

purchases and sales of investments, borrowings and repayments of such borrowings, income and expenses: at the rates of exchange prevailing on the respective dates of such transactions.

Although net assets and fair values are presented based on the applicable foreign exchange rates described above, the Company does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in fair values of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments. Fluctuations arising from the translation of foreign currency borrowings are included with the net change in unrealized gains (losses) on translation of assets and liabilities in foreign currencies on the 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 U.S. dollar.

The Company’s current approach to hedging the foreign currency exposure in its non-U.S. dollar denominated investments is primarily to borrow the necessary local currency under the Company’s Revolving Facility (as defined in Note 7) to fund these investments.

As of September 30, 2019, the Company holds no investments denominated in foreign currency.

Security Transactions, Payment-in-Kind, Income Recognition, Realized/Unrealized Gains or Losses

Security transactions are recorded on a trade-date basis. The Company measures realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, using the specific identification method. Net realized gains and losses reflect the impact of investments written off during the period, if any. The Company reports changes in fair value of investments that are measured at fair value as a component of net change in unrealized appreciation or depreciation on investments in the Consolidated Statements of Operations.

Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis to the extent that the Company expects to collect such amounts. Original issue discount, representing the estimated fair value of detachable equity or warrants obtained in conjunction with the acquisition of debt securities and market discount or premium are capitalized and accreted or amortized into interest income over the life of the respective security using the effective yield method. The amortized cost of investments represents the original cost adjusted for the accretion/amortization of discounts and premiums and upfront loan origination fees.

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

Loans are placed on non-accrual status when principal or interest payments are past due 30 days or more and/or when it is no longer probable that principal or interest will be collected. However, the Company may make exceptions to this policy if the loan has sufficient collateral value and is in the process of collection. The Company records the reversal of any previously accrued income against the same income category reflected in the Consolidated Statement of Operations. As of September 30, 2019, the Company had loans on non-accrual status with an amortized cost basis of $14,510 and fair value of $7,928. As of September 30, 2018, the Company had loans on non-accrual status with an amortized cost basis of $14,357 and fair value of $7,844.

The Company has investments in its portfolio which contain a contractual paid-in-kind, or PIK, interest provision. PIK interest is computed at the contractual rate specified in each investment agreement, is added to the principal balance of the investment, and is recorded as income. The Company will cease accruing PIK interest if there is insufficient value to support the accrual or if the Company does not expect amounts to be collectible and will generally only begin to recognize PIK income again when all principal and interest have been paid or upon the restructuring of the investment where the interest is deemed collectable. To maintain the Company’s status as a RIC, PIK interest income, which is considered investment company taxable income, must be paid out to stockholders in the form of dividends even though the Company has not yet collected the cash. Amounts necessary to pay these dividends may come from available cash.

The following shows a rollforward of PIK income activity for the three and nine months ended September 30, 2019 and 2018:

	Three months ended September 30,						Nine months ended September 30,
	2019			2018			2019			2018
Accumulated PIK balance, beginning of period	$	4,679		$	3,699		$	3,879		$	3,922
PIK income capitalized/receivable		616			934			2,023			1,824
PIK reduction due to sale		(116	)		—			(185	)		—
PIK received in cash from repayments		—			(233	)		(538	)		(1,346	)
Accumulated PIK balance, end of period	$	5,179		$	4,400		$	5,179		$	4,400

Interest income from the Company’s tax receivable agreements (“TRAs”) was recorded based upon an estimation of an effective yield to expected maturity using anticipated cash flows. Amounts in excess of income recognized were recorded as a reduction to the cost basis of the investment. The Company monitored the anticipated cash flows from its TRA and adjusted its effective yield periodically as needed.

The Company capitalizes and amortizes upfront loan origination fees received in connection with the closing of investments. The unearned income from such fees is accreted into interest income over the contractual life of the loan based on the effective interest method. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized upfront loan origination fees, and unamortized discounts are recorded as interest income.

The Company will recognize any earned exit or back-end fees into income when it believes the amounts will ultimately become collected by using either the beneficial interest model or other appropriate income recognition frameworks.

In certain investment transactions, the Company may provide advisory services. For services that are separately identifiable and external evidence exists to substantiate fair value, income is recognized as earned. The Company had no income from advisory services related to portfolio companies for the three and nine months ended September 30, 2019 and 2018.

The Company may also generate revenue in the form of fees from the management of Greenway and Greenway II, prepayment premiums, commitment, loan origination, structuring or due diligence fees, exit fees, portfolio company administration fees, fees for providing significant managerial assistance and consulting fees.

U.S. Federal Income Taxes, Including Excise Tax

The Company has elected to be taxed as a RIC under Subchapter M of the Code and currently qualifies, and intends to continue to qualify each year, as a RIC under the Code. Accordingly, the Company is not subject to federal income tax on the portion of its taxable income and gains distributed to stockholders.

In order to qualify for favorable tax treatment as a RIC, the Company is required to distribute annually to its stockholders at least 90% of its investment company taxable income, as defined by the Code. To avoid a 4% U.S. federal excise tax on undistributed earnings, the Company is required to distribute each calendar year the sum of (i) 98% of its ordinary income for such calendar year (ii) 98.2% of its net capital gains for the one-year period ending October 31 of that calendar year (iii) any income recognized, but not distributed, in preceding years and on which the Company paid no U.S. federal income tax. The Company, at its discretion, may choose not to distribute all of its taxable income for the calendar year and pay a non-deductible 4% excise tax on this income. If the Company chooses to do so, all other things being equal, this would increase expenses and reduce the amount available to be distributed to stockholders. To the extent that the Company determines that its estimated current year annual taxable income will be in excess of estimated current year dividend distributions from such taxable income, the Company accrues excise taxes on estimated excess taxable income as taxable income is earned using an annual effective excise tax rate.

The annual effective excise tax rate is determined by dividing the estimated annual excise tax by the estimated annual taxable income. See also the disclosure in Note 10, Distributions, for a summary of recent dividends paid. For the three months ended September 30, 2019 and 2018, the Company incurred U.S. federal excise tax and other tax expenses (benefits) of $121 and $(1), respectively. For the nine months ended September 30, 2019 and 2018, the Company incurred U.S. federal excise tax and other tax expenses of $359 and $302, respectively.

Certain consolidated subsidiaries of the Company are subject to U.S. federal and state income taxes. These taxable entities are not consolidated for income tax purposes and may generate income tax liabilities or assets from permanent and temporary differences in the recognition of items for financial reporting and income tax purposes at the subsidiaries.

The following shows the breakdown of current and deferred income tax provisions for the three and nine months ended September 30, 2019 and 2018:

	For the three months ended September 30,					For the nine months ended September 30,
	2019		2018			2019		2018
Current income tax benefit:
Current income tax provision	$	—	$	(6	)	$	—	$	(13	)
Deferred income tax benefit (provision):
Deferred income tax benefit		—		—			—		43
Benefit (provision) for taxes on unrealized gain on investments		64		(192	)		335		(346	)

These current and deferred income taxes are determined from taxable income estimates provided by portfolio companies organized as pass-through entities where the Company holds equity or equity-like investments in its corporate subsidiaries. These tax estimates may be subject to further change once tax information is finalized for the year. As of September 30, 2019 and December 31, 2018, $5 of income tax receivable was included in prepaid expenses and other assets on the Consolidated Statements of Assets and Liabilities. As of September 30, 2019 and December 31, 2018, $1,834 and $1,972, respectively, were included in deferred tax liability on the Consolidated Statements of Assets and Liabilities primarily relating to deferred taxes on unrealized gains on investments and other temporary book to tax differences held in its corporate subsidiaries. As of September 30, 2019 and December 31, 2018, $2,255 (net of $6,206 allowance) and $2,056 (net of $4,396 allowance), respectively of deferred tax assets were included in deferred tax assets on the Consolidated Statements of Assets and Liabilities relating to net operating loss carryforwards and unrealized losses on investments and other temporary book to tax differences that are expected to be used in future periods.

Under the RIC Modernization Act (the “RIC Act”), we are permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010, for an unlimited period. However, any losses incurred during post-enactment taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses rather than being considered all short-term as permitted under the rules applicable to pre-enactment capital losses.

Because U.S. federal income tax regulations differ from GAAP, distributions in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in the consolidated financial statements to reflect their tax character. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future. Differences in classification may also result from the treatment of short-term gains as ordinary income for tax purposes.

The Company follows the provisions under the authoritative guidance on accounting for and disclosure of uncertainty in tax positions. The provisions require management to determine whether a tax position of the Company is more likely than not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. For tax positions not meeting the more likely than not threshold, the tax amount recognized in the consolidated financial statements is reduced by the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant taxing authority. There are no unrecognized tax benefits or obligations in the accompanying consolidated financial statements. Although the Company files U.S. federal and state tax returns, the Company’s major tax jurisdiction is U.S. federal. The Company’s U.S. federal tax years subsequent to 2015 remain subject to examination by taxing authorities.

Distributions

Distributions to stockholders are recorded on the applicable record date. The amount to be paid out as a distribution is determined by the Company’s board of directors on a quarterly basis. Net realized capital gains, if any, are generally distributed at least annually out of assets legally available for such distributions, although the Company may decide to retain such capital gains for investment.

Capital transactions in connection with the Company’s dividend reinvestment plan are recorded when shares are issued.

Recent Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”, which impacts fair value disclosure for both private and public companies. ASU 2018-13 removes, modifies, and adds certain fair value related disclosures. This guidance eliminates disclosures related to valuation processes for Level 3 fair value measurement and requires the disclosure of the range and weighted average of the significant unobservable inputs for Level 3 fair value measurements and the way it is calculated. ASU 2018-13 is effective for annual and interim reporting periods beginning after December 15, 2019. The Company has determined that this guidance will not have a material impact on its consolidated financial statements.

3. Investments

The following is a summary of the levels within the fair value hierarchy in which the Company invests as of September 30, 2019:

Description	Fair Value		Level 1		Level 2		Level 3
First lien senior secured debt	$	270,137	$	—	$	—	$	270,137
Second lien debt		20,750		—		—		20,750
Subordinated debt		6,920		—		—		6,920
Equity investments		21,359		—		—		21,359
Warrants		—		—		—		—
Investment in Logan JV ⁽¹⁾		80,731		—		—		—
Investments in funds⁽¹⁾		3,645		—		—		—
Total investments	$	403,542	$	—	$	—	$	319,166

The following is a summary of the levels within the fair value hierarchy in which the Company invests as of December 31, 2018:

Description	Fair Value		Level 1		Level 2		Level 3
First lien senior secured debt	$	329,348	$	—	$	—	$	329,348
Second lien debt		25,295		—		—		25,295
Subordinated debt		6,556		—		—		6,556
Equity investments		43,534		—		—		43,534
Warrants		580		—		—		580
Investment in Logan JV ⁽¹⁾		84,825		—		—		—
Investments in funds⁽¹⁾		3,515		—		—		—
Total investments	$	493,653	$	—	$	—	$	405,313

⁽¹⁾

Certain investments that are measured at fair value using net asset value have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Assets and Liabilities.

The following is a summary of the industry classification in which the Company invests as of September 30, 2019:

Industry	Amortized Cost		Fair Value		% of Total Portfolio			% of Net Assets
Investment funds and vehicles	$	93,091	$	80,735		20.01	%		31.66	%
Healthcare		75,588		75,245		18.66	%		29.51	%
Consumer products and services		65,811		59,738		14.80	%		23.42	%
Industrials and manufacturing		58,116		46,381		11.49	%		18.18	%
Business services		34,390		34,821		8.63	%		13.65	%
Energy / utilities		47,373		31,131		7.71	%		12.20	%
IT services		29,202		27,533		6.82	%		10.79	%
Financial services		23,909		24,198		6.00	%		9.49	%
Retail & grocery		13,226		15,136		3.75	%		5.93	%
Media, entertainment and leisure		5,459		5,500		1.36	%		2.16	%
Transportation		1,000		3,124		0.77	%		1.22	%
Total Investments	$	447,165	$	403,542		100.00	%		158.21	%

The following is a summary of the industry classification in which the Company invests as of December 31, 2018:

Industry	Amortized Cost		Fair Value		% of Total Portfolio			% of Net Assets
Industrials and manufacturing	$	104,643	$	94,197		19.09	%		31.86	%
Investment funds and vehicles		92,396		84,829		17.18	%		28.69	%
Consumer products and services		74,921		69,101		14.00	%		23.37	%
Healthcare		62,484		60,234		12.20	%		20.37	%
IT services		52,367		50,426		10.21	%		17.05	%
Energy / utilities		46,494		37,052		7.51	%		12.53	%
Financial services		43,069		42,859		8.68	%		14.49	%
Retail & grocery		38,516		27,783		5.63	%		9.40	%
Business services		18,308		18,548		3.76	%		6.27	%
Media, entertainment and leisure		5,442		5,500		1.11	%		1.86	%
Transportation		1,000		3,124		0.63	%		1.06	%
Total Investments	$	539,640	$	493,653		100.00	%		166.95	%

The following is a summary of the geographical concentration of the Company’s investment portfolio as of September 30, 2019:

Region	Amortized Cost		Fair Value		% of Total Portfolio			% of Net Assets
United States
Northeast	$	152,708	$	141,273		35.01	%		55.39	%
Southwest		116,556		97,067		24.05	%		38.05	%
West		79,722		81,567		20.21	%		31.98	%
Southeast		67,402		56,037		13.89	%		21.97	%
Midwest		25,838		22,695		5.62	%		8.90	%
Canada		4,939		4,903		1.22	%		1.92	%
Total Investments	$	447,165	$	403,542		100.00	%		158.21	%

The following is a summary of the geographical concentration of the Company’s investment portfolio as of December 31, 2018:

Region	Amortized Cost		Fair Value		% of Total Portfolio			% of Net Assets
United States
Southwest	$	185,747	$	154,689		31.34	%		52.31	%
Northeast		160,182	$	151,210		30.63	%		51.14	%
West		72,340	$	74,788		15.15	%		25.29	%
Southeast		77,935	$	71,874		14.56	%		24.31	%
Midwest		28,435	$	26,522		5.37	%		8.97	%
Canada		15,001	$	14,570		2.95	%		4.93	%
Total Investments	$	539,640	$	493,653		100.00	%		166.95	%

In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the Company discloses the fair value of its investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). If any transfers occur between the levels or categories of the fair value hierarchy, they are assumed to have occurred at the beginning of the period. The guidance establishes three levels of the fair value hierarchy as follows:

Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2—Quoted prices in markets that are not considered to be active or financial instruments for which significant inputs are observable, either directly or indirectly;

Level 3—Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

The level of an asset or liability within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by management.

The Company considers whether the volume and level of activity for the asset or liability have significantly decreased and identifies transactions that are not orderly in determining fair value. Accordingly, if the Company determines that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value. Valuation techniques such as an income approach might be appropriate to supplement or replace a market approach in those circumstances.

The Company has adopted the authoritative guidance under GAAP for estimating the fair value of investments in investment companies that have calculated net asset value in accordance with the specialized accounting guidance for investment companies. Accordingly, in circumstances in which net asset value of an investment is determinative of fair value, the Company estimates the fair value of an investment in an investment company using the net asset value of the investment (or its equivalent) without further adjustment if the net asset value of the investment is determined in accordance with the specialized accounting guidance for investment companies as of the reporting entity’s measurement date. Redemptions are not generally permitted in the Company’s investments in funds. The remaining term of the Company’s investments in funds is expected to be within one to four years.

The following provides quantitative information about Level 3 fair value measurements as of September 30, 2019:

Description	Fair Value		Valuation Technique	Unobservable Inputs	Weighted Range (Average) ⁽¹⁾
First lien senior secured debt ⁽²⁾	$	194,639	Discounted cash flows (income approach)	Comparative Yield		9	%	-	11%			(10	%)
		62,435	Market comparable companies (market approach)	EBITDA Multiple		6.4	x	-		7.4	x	(6.9	x)
		9,518	Market comparable companies (market approach)	Revenue Multiple		2.1	x	-		2.3	x	(2.2	x)
Second lien debt		20,750	Discounted cash flows (income approach)	Comparative Yield		12	%	-	13%			(13	%)
Subordinated debt		6,920	Market comparable companies (market approach)	EBITDA Multiple		4.5	x	-		5.5	x	(5.0	x)
Equity investments		18,027	Market comparable companies (market approach)	EBITDA Multiple		4.1	x	-		4.8	x	(4.4	x)
		3,332	Market comparable companies (market approach)	Revenue Multiple		3.2	x	-		3.7	x	(3.5	x)
Warrants		—	Market comparable companies (market approach)	EBITDA Multiple		5.0	x	-		5.5	x	(5.3	x)
Total Level 3 Investments	$	315,621

⁽¹⁾	Averages were determined using a weighted average based upon the fair value of the investments in each investment category.

⁽²⁾	Excluded from the presentation is $3,545 of first lien senior secured debt as the investments were valued at cost based upon recent purchase price.

The following provides quantitative information about Level 3 fair value measurements as of December 31, 2018:

Description	Fair Value		Valuation Technique	Unobservable Inputs	Weighted Range (Average) ⁽¹⁾
First lien senior secured debt ⁽²⁾	$	216,662	Discounted cash flows (income approach)	Weighted average cost of capital (WACC)		12	%	-	13%			(12	%)
		98,307	Market comparable companies (market approach)	EBITDA Multiple		5.8	x	-		7.0	x	(6.4	x)
		6,663	Market comparable companies (market approach)	Revenue Multiple		0.5	x	-		0.6	x	(0.6	x)
Second lien debt		19,880	Discounted cash flows (income approach)	Weighted average cost of capital (WACC)		15	%	-	17%			(16	%)
		5,415	Market comparable companies (market approach)	EBITDA Multiple		5.0	x	-		5.5	x	(5.3	x)
Subordinated debt		6,556	Market comparable companies (market approach)	EBITDA Multiple		0.4	x	-		0.6	x	(0.5	x)
Equity investments		40,410	Market comparable companies (market approach)	EBITDA Multiple		4.5	x	-		5.1	x	(4.8	x)
		3,124	Market comparable companies (market approach)	Revenue Multiple		2.8	x	-		3.8	x	(3.3	x)
Warrants		580	Market comparable companies (market approach)	EBITDA Multiple		4.8	x	-		5.8	x	(5.3	x)
Total Level 3 Investments	$	397,597

⁽¹⁾	Averages were determined using a weighted average based upon the fair value of the investments in each investment category.

⁽²⁾	Fair value of Alex Toys, LLC term loan was excluded from the first lien senior secured totals as the investment was valued based on a sale transaction which occurred in Q1 2019.

The primary significant unobservable input used in the fair value measurement of the Company’s debt securities (first lien secured debt, second lien debt and subordinated debt), including income-producing investments in funds and income producing securities is the comparative yield. Significant increases (decreases) in the comparative yield in isolation would result in a significantly lower (higher) fair value measurement. In determining the comparative yield, for the income, or yield approach, the Company considers current market yields and multiples, weighted average cost of capital, portfolio company performance, leverage levels, credit quality, among other factors, including U.S. federal tax rates, in its analysis. Changes in one or more of these factors can have a similar directional change on other factors in determining the appropriate comparative yield to use in the income approach.

The primary significant unobservable input used in the fair value measurement of the Company’s equity investments, investments in warrants and debt investments where the Company has a controlling equity investment is the EBITDA multiple adjusted by management for differences between the investment and referenced comparables, or the multiple. Significant increases (decreases) in the multiple in isolation would result in a significantly higher (lower) fair value measurement. To determine the multiple for the market approach, the Company considers current market trading and/or transaction multiples, portfolio company performance (financial ratios) relative to public and private peer companies and leverage levels, among other factors. Changes in one or more of these factors can have a similar directional change on other factors in determining the appropriate multiple to use in the market approach.

The following table rolls forward the changes in fair value during the nine months ended September 30, 2019 for investments classified within Level 3:

	First lien senior secured debt			Second lien debt			Subordinated debt			Equity investments			Warrants			Totals
Beginning balance, January 1, 2019	$	329,348		$	25,295		$	6,556		$	43,534		$	580		$	405,313
Purchases		95,438			—			—			191			—			95,629
Sales and repayments		(116,481	)		(5,418	)		—			(27,048	)		—			(148,947	)
Unrealized appreciation (depreciation)⁽¹⁾		16,856			820			(157	)		(9,917	)		(580	)		7,022
Realized loss		(57,417	)		—			—			14,599			—			(42,818	)
Net amortization of premiums, discounts and fees		865			53			—			—			—			918
PIK		1,528			—			521			—			—			2,049
Ending balance, September 30, 2019	$	270,137		$	20,750		$	6,920		$	21,359		$	-		$	319,166
Net change in unrealized appreciation (depreciation) from investments still held as of the reporting date	$	(5,498	)	$	820		$	(156	)	$	(2,619	)	$	(580	)	$	(8,033	)

⁽¹⁾	All unrealized appreciation (depreciation) in the table above is reflected in the accompanying Consolidated Statements of Operations.

The following table rolls forward the changes in fair value during the nine months ended September 30, 2018 for investments classified within Level 3:

	First lien senior secured debt			Second lien debt			Subordinated debt			Equity investments			Warrants		Investment in payment rights			Totals
Beginning balance, January 1, 2018	$	407,097		$	32,765		$	19,105		$	69,174		$	75	$	11,259		$	539,475
Purchases		30,996			—			—			769			—		403			32,168
Sales and repayments		(89,922	)		(6,223	)		(12,302	)		(14,067	)		—		—			(122,514	)
Unrealized appreciation (depreciation)⁽¹⁾		(689)			20,578			928			2,581			603		(121	)		23,880
Realized (loss) gain		(10,748	)		(21,013	)		(1,210	)		(1,119	)		—		—			(34,090	)
Net amortization of premiums, discounts and fees		2,387			61			71			71			—		—			2,590
PIK		962			—			350			211			—		—			1,523
Ending balance, September 30, 2018	$	340,083		$	26,168		$	6,942		$	57,620		$	678	$	11,541		$	443,032
Net change in unrealized appreciation (depreciation) from investments still held as of the reporting date	$	(8,403	)	$	20		$	(88	)	$	1,534		$	603	$	(120	)	$	(6,454	)

⁽¹⁾	All unrealized appreciation (depreciation) in the table above is reflected in the accompanying Consolidated Statements of Operations.

Significant Unconsolidated Subsidiaries

In accordance with the SEC’s Regulation S-X and GAAP, the Company is not permitted to consolidate any subsidiary or other entity that is not an investment company or a controlled operating company whose business consists of providing services to the Company, including those in which the Company has a controlling interest. The Company had certain unconsolidated subsidiaries for the nine months ended September 30, 2019 and 2018 that met at least one of the significance conditions under the SEC’s Regulation S-X. Accordingly, pursuant to Rule 4-08 of Regulation S-X, summarized, comparative financial information is presented below for the Company’s significant unconsolidated subsidiaries, which include C&K Market, Inc., Loadmaster Derrick & Equipment, Inc., OEM Group, LLC, and THL Credit Logan JV, LLC for the nine months ended September 30, 2019 and C&K Market, Inc., Copperweld Bimetallics, LLC, Loadmaster Derrick & Equipment, Inc., OEM Group, LLC, THL Credit Logan JV, LLC and Tri-Starr Management Services, Inc. for the nine months ended September 30, 2018. The below table summarizes the above mentioned financial data, with the exception OEM Group, LLC for the nine months ended September 30, 2019, which is presented in a separate tabular disclosure further below.

	For the nine months ended September 30
Income Statement	2019		2018
Net Sales	$	185,350	$	451,749
Gross Profit		66,886		106,005
Net gain (loss)		4,560		(8,427	)

The below table summarizes the financial information for OEM Group, LLC for the nine months ended September 30, 2019.


Income Statement	For the nine months ended September 30, 2019
Net Sales	$	24,230
Gross Profit		6,400
Net loss		(13,545	)

Logan JV

On December 3, 2014, the Company entered into an agreement with Perspecta Trident LLC, an affiliate of Perspecta Trust LLC, or Perspecta, to create THL Credit Logan JV LLC, or Logan JV, a joint venture, which invests primarily in senior secured first lien term loans. All Logan JV investment decisions must be unanimously approved by the Logan JV investment committee consisting of one representative from each of the Company and Perspecta.

Logan JV is an investment company under ASC 946. However, in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a wholly owned investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. Accordingly, the Company does not consolidate its non-controlling interest in Logan JV.

Logan JV is capitalized with capital contributions which are generally called from its members, on a pro-rata basis based on their capital commitments, as transactions are completed. Any decision by the Logan JV to call down on capital commitments requires the explicit authorization of the Company, coupled with that of Perspecta, and the Company may withhold such authorization for any reason in its sole discretion.

As of September 30, 2019 and December 31, 2018, Logan JV had the following commitments, contributions and unfunded commitments from its Members.

	As of September 30, 2019
Member	Total Commitments		Contributed Capital ⁽¹⁾		Unfunded Commitments
THL Credit, Inc.	$	200,000	$	96,600	$	103,400
Perspecta Trident LLC		50,000		24,150		25,850
Total Investments	$	250,000	$	120,750	$	129,250

	As of December 31, 2018
Member	Total Commitments		Contributed Capital		Unfunded Commitments
THL Credit, Inc.	$	200,000	$	92,600	$	107,400
Perspecta Trident LLC		50,000		23,150		26,850
Total Investments	$	250,000	$	115,750	$	134,250

⁽¹⁾	Includes $3,200 of non-recallable return of capital for THL Credit, Inc. and $800 non-recallable return of capital for Perspecta Trident LLC

Logan JV has a senior credit facility, or the Logan JV Credit Facility, with Deutsche Bank AG and other banks. As of September 30, 2019 and December 31, 2018, the Logan JV Credit Facility had $275,000 of commitments subject to leverage and borrowing base restrictions with an interest rate of three month LIBOR (with no LIBOR floor) plus 2.20%. The final maturity date of the Logan JV Credit Facility is January 12, 2023 with the revolving loan period ending on January 12, 2021. As of September 30, 2019 and December 31, 2018, Logan JV had $234,007 and $241,679 of outstanding borrowings under the credit facility, respectively. At September 30, 2019, the effective interest rate on the Logan JV Credit Facility was 4.58% per annum.

As of September 30, 2019 and December 31, 2018, Logan JV had total investments at fair value of $335,202 and $329,771, respectively. As of September 30, 2019 and December 31, 2018, Logan JV’s portfolio was comprised of senior secured first lien loans and second lien loans to 132 and 130 different borrowers, respectively. As of September 30, 2019, there was one loan on non-accrual status with an amortized cost and fair value of $2,423 and $1,435, respectively. As of December 31, 2018, there were no loans on non-accrual status. As of September 30, 2019 and December 31, 2018, Logan JV had unfunded commitments to fund revolver and delayed draw loans to its portfolio companies totaling $4,116 and $4,263, respectively. The portfolio companies in Logan JV are in industries similar to those in which the Company may invest directly.

Below is a summary of Logan JV’s portfolio, followed by a listing of the individual loans in Logan JV’s portfolio as of September 30, 2019 and December 31, 2018:


	As of September 30, 2019			As of December 31, 2018
First lien secured debt, at par	$	341,215		$	327,574
Second lien debt, at par		10,629			16,962
Total debt investments, at par	$	351,844		$	344,536
Weighted average yield on first lien secured loans ⁽¹⁾		6.9	%		7.2	%
Weighted average yield on second lien loans⁽¹⁾		10.0	%		10.4	%
Weighted average yield on all loans⁽¹⁾		7.0	%		7.4	%
Number of borrowers in Logan JV		132			130
Largest loan to a single borrower ⁽²⁾	$	5,009		$	5,101
Total of five largest loans to borrowers ⁽²⁾	$	24,997		$	25,001

⁽¹⁾	Weighted average yield at their current amortized cost.

⁽²⁾	At current principal amount.

The weighted average yield of Logan JV’s debt investments is not the same as a return on Logan JV investment for the Company’s stockholders but, rather, relates to a portion of the Company’s investment portfolio and is calculated before the payment of the Company’s expenses. The weighted average yield was computed using the effective interest rates as of September 30, 2019 and December 31, 2018, respectively. There can be no assurance that the weighted average yield will remain at its current level.

For the three months ended September 30, 2019 and 2018, the Company’s share of income from distributions related to its Logan JV LLC equity interest was $2,400 and $2,560, respectively, which amounts are included in dividend income from controlled investments in the Consolidated Statement of Operations. For the nine months ended September 30, 2019 and 2018, the Company’s share of income from distributions related to its Logan JV LLC equity interest was $7,560 and $7,360, respectively. As of September 30, 2019 and December 31, 2018, $2,689 and $2,481, respectively, of income related to the Logan JV was included in interest, dividends and fees receivable on the Consolidated Statements of Assets and Liabilities. As of September 30, 2019 and December 31, 2018, $311 and $207, respectively, of return of capital associated with distribution declared was included the Distribution receivable on the Consolidated Statements of Assets and Liabilities. As of September 30, 2019, distributions declared and earned of $9,849 for the twelve months ended September 30, 2019, represented a dividend yield to the Company of 10.7% based upon average capital invested. As of December 31, 2018, distributions declared and earned of $9,912 for the twelve months ended December 31, 2018, represented a dividend yield to the Company of 12.0% based upon average capital invested.

Logan JV Portfolio as of September 30, 2019

(dollar amounts in thousands)

Type of Investment/ Portfolio company⁽¹²⁾	Industry	Interest Rate ⁽¹⁾	Initial Acquisition Date	Maturity Date	Principal		Amortized Cost		Fair Value ⁽²⁾
Senior Secured First Lien Term Loans
Canada
Avison Young Canada Inc.	Services: Business	7.33% (LIBOR +5%)	03/07/2019	02/01/2026		3,474	$	3,409	$	3,413
PNI Canada Acquireco Corp	High Tech Industries	6.61% (LIBOR +4.5%)	10/31/2018	10/31/2025		1,720		1,712		1,717

Total Canada							$	5,121	$	5,130

Germany
Rhodia Acetow	Consumer goods: Non-Durable	8.15% (LIBOR +5.5%)	04/21/2017	05/31/2023		978	$	969	$	932
VAC Germany Holding GmbH	Metals & Mining	6.33% (LIBOR +4%)	02/26/2018	02/26/2025		2,955		2,943		2,911
Total Germany							$	3,912	$	3,843

Luxembourg
Travelport Finance	Services: Consumer	7.54% (LIBOR +5%)	03/18/2019	05/30/2026		3,000	$	2,943	$	2,725
Total Luxembourg							$	2,943	$	2,725

United Kingdom
Auxey Bidco Ltd.	Services: Consumer	7.05% (LIBOR +5%)	08/07/2018	08/07/2025		5,000	$	4,828	$	4,800
EG Group	Retail	6.33% (LIBOR +4%)	03/23/2018	02/07/2025		2,824		2,813		2,797

Total United Kingdom							$	7,641	$	7,597

United States of America
1A Smart Start LLC	Services: Consumer	6.83% (LIBOR +4.5%)	08/28/2015	02/21/2022		4,313	$	4,301	$	4,313
A Place for Mom Inc	Media: Advertising, Printing & Publishing	5.86% (LIBOR +3.75%)	07/28/2017	08/10/2024		3,920		3,906		3,862
A10 Capital, LLC	Banking, Finance, Insurance & Real Estate	8.53% (LIBOR +6.5%)	04/25/2018	04/27/2023		5,000		4,964		4,926
Achilles Acquisition LLC	Banking, Finance, Insurance & Real Estate	6.13% (LIBOR +4%)	10/04/2018	10/03/2025		3,980		3,971		3,988
Advanced Computer Software	High Tech Industries	6.79% (LIBOR +4.75%)	05/25/2018	05/31/2024		1,485		1,482		1,488
Advanced Integration Technology LP	Aerospace & Defense	6.86% (LIBOR +4.75%)	07/15/2016	04/03/2023		1,940		1,929		1,918
Advisor Group Holdings Inc	Banking, Finance, Insurance & Real Estate	7.11% (LIBOR +5%)	07/31/2019	07/31/2026		1,714		1,697		1,683
AG Parent Holdings LLC	High Tech Industries	7.26% (LIBOR +5%)	07/30/2019	07/31/2026		2,667		2,641		2,663
AgroFresh Inc.	Chemicals, Plastics & Rubber	7.37% (LIBOR +4.75%)	12/01/2015	07/31/2021		1,920		1,915		1,795
Air Medical Group Holdings Inc	Healthcare & Pharmaceuticals	6.36% (LIBOR +4.25%)	09/26/2017	03/14/2025		2,211		2,198		2,076
Alcami Carolinas Corp	Healthcare & Pharmaceuticals	6.36% (LIBOR +4.25%)	07/09/2018	07/06/2025		3,960		3,943		3,722
Alchemy US Holdco 1 LLC	Chemicals, Plastics & Rubber	7.56% (LIBOR +5.5%)	10/01/2018	10/10/2025		1,963		1,937		1,943
AMCP Clean Acquisition Co LLC	Wholesale	6.58% (LIBOR +4.25%)	07/10/2018	07/10/2025		2,389		2,379		2,365
AMCP Clean Acquisition Co LLC	Wholesale	6.58% (LIBOR +4.25%)	07/10/2018	07/10/2025		578		576		572
American Sportsman Holdings Co	Retail	7.11% (LIBOR +5%)	11/22/2016	09/25/2024		3,920		3,882		3,783
Ansira Holdings, Inc. ⁽³⁾	Media: Diversified & Production	7.86% (LIBOR +5.75%)	04/17/2018	12/20/2022		610		402		342
Ansira Holdings, Inc.	Media: Diversified & Production	7.86% (LIBOR +5.75%)	12/20/2016	12/20/2022		1,836		1,826		1,652
AP Gaming I LLC	Hotel, Gaming & Leisure	5.61% (LIBOR +3.5%)	06/06/2016	02/15/2024		2,444		2,440		2,437
APC Aftermarket	Automotive	7.18% (LIBOR +5%)	05/09/2017	05/10/2024		489		482		372
APFS Staffing Holdings Inc	Services: Consumer	7.06% (LIBOR +5%)	04/04/2019	04/10/2026		1,995		1,957		1,988
AQA Acquisition Holding, Inc	High Tech Industries	6.58% (LIBOR +4.25%)	10/01/2018	05/24/2023		1,980		1,980		1,970

Logan JV Portfolio as of September 30, 2019

(dollar amounts in thousands)

Type of Investment/

Portfolio company⁽¹²⁾

Industry

Interest Rate ⁽¹⁾

Initial

Acquisition

Date

Maturity

Date

Principal

Amortized

Cost

Fair

Value ⁽²⁾

Ascend Performance Materials Operations LLC

Chemicals, Plastics & Rubber

7.4% (LIBOR +5.25%)

08/16/2019

08/27/2026

1,150

1,127

1,156

ATI Merger Sub Inc.

Healthcare & Pharmaceuticals

6.7% (LIBOR +4.5%)

12/19/2018

12/05/2025

4,301

4,262

4,279

Avaya Inc

Telecommunications

6.43% (LIBOR +4.25%)

11/09/2017

12/15/2024

2,568

2,548

2,447

Axiom Global Inc ⁽¹⁰⁾

Services: Business

6.84% (LIBOR +4.75%)

09/25/2019

09/25/2026

3,000

2,970

Barbri Inc

Media: Diversified & Production

6.46% (LIBOR +4.25%)

12/01/2017

12/01/2023

3,122

3,111

3,090

BCP Qualtek Merger Sub LLC

Telecommunications

8.01% (LIBOR +5.75%)

07/16/2018

07/18/2025

3,900

3,835

3,816

Big Ass Fans LLC

Capital Equipment

6.08% (LIBOR +3.75%)

11/07/2017

05/21/2024

2,456

2,447

2,464

Big River Steel LLC

Metals & Mining

7.33% (LIBOR +5%)

08/15/2017

08/23/2023

1,960

1,947

1,950

BI-LO LLC

Retail

10.34% (LIBOR +8%)

05/15/2018

05/31/2024

1,485

1,439

1,421

Brand Energy & Infrastructure Services, Inc.

Energy: Oil & Gas

6.58% (LIBOR +4.25%)

06/16/2017

06/21/2024

2,933

2,913

2,874

California Cryobank LLC

Healthcare & Pharmaceuticals

6.32% (LIBOR +4%)

08/03/2018

08/06/2025

3,176

3,163

3,168

Cambium Learning Inc.

Services: Consumer

6.61% (LIBOR +4.5%)

12/18/2018

12/18/2025

1,985

1,896

1,945

CC Amulet Intermediate, LLC ^(4)(11)

Healthcare & Pharmaceuticals

3.09% (LIBOR +1%)

06/18/2018

04/30/2024

1,538

)

CC Amulet Intermediate, LLC

Healthcare & Pharmaceuticals

6.87% (LIBOR +4.75%)

06/18/2018

04/30/2024

3,418

3,392

3,410

Clarity Telecom, LLC

Telecommunications

6.61% (LIBOR +4.5%)

06/27/2019

08/31/2026

4,000

3,960

4,005

Clarkson Eyecare, LLC

Healthcare & Pharmaceuticals

8.37% (LIBOR +6.25%)

08/21/2019

04/02/2021

2,100

2,059

2,069

Clarkson Eyecare, LLC

Healthcare & Pharmaceuticals

8.39% (LIBOR +6.25%)

08/21/2019

04/02/2021

1,400

1,372

1,379

Clear Balance Holdings, LLC

Banking, Finance, Insurance & Real Estate

8.08% (LIBOR +5.75%)

07/07/2015

10/05/2023

4,795

4,781

4,795

Commercial Barge Line Co

Transportation: Cargo

10.86% (LIBOR +8.75%)

11/06/2015

11/12/2020

1,238

1,224

690

Connect Finco SARL ⁽¹⁰⁾

Telecommunications

6.59% (LIBOR +4.5%)

09/23/2019

09/23/2026

1,432

1,403

1,412

Constellis Holdings, LLC

Aerospace & Defense

7.26% (LIBOR +5%)

04/18/2017

04/21/2024

1,955

1,942

1,200

Conyers Park Parent Merger Sub Inc

Beverage, Food & Tobacco

5.84% (LIBOR +3.5%)

06/21/2017

07/07/2024

1,960

1,953

1,966

CryoLife Inc

Healthcare & Pharmaceuticals

5.58% (LIBOR +3.25%)

11/15/2017

12/02/2024

1,965

1,958

1,973

CT Technologies Intermediate Holdings, Inc

Healthcare & Pharmaceuticals

6.36% (LIBOR +4.25%)

02/11/2015

12/01/2021

1,905

1,909

1,748

Datto, Inc.

Services: Business

6.58% (LIBOR +4.25%)

03/29/2019

04/02/2026

1,870

1,862

1,891

Deerfield Holdings Corp

Banking, Finance, Insurance & Real Estate

5.36% (LIBOR +3.25%)

12/06/2017

02/13/2025

246

243

Discovery Practice Management, Inc.

Healthcare & Pharmaceuticals

6.61% (LIBOR +4.5%)

07/22/2019

06/15/2024

4,987

4,963

4,925

Drilling Info Inc.

High Tech Industries

6.36% (LIBOR +4.25%)

07/27/2018

07/30/2025

4,454

4,436

DXP Enterprises, Inc.

Wholesale

6.86% (LIBOR +4.75%)

08/16/2017

08/29/2023

1,470

1,460

1,477

E2open, LLC

Transportation: Cargo

7.87% (LIBOR +5.75%)

06/21/2019

11/26/2024

5,000

4,952

4,950

Eliassen Group, LLC

Services: Business

6.61% (LIBOR +4.5%)

10/19/2018

11/05/2024

4,650

4,630

4,627

Empower Payments Acquisition

Services: Business

6.11% (LIBOR +4%)

10/05/2018

10/05/2025

3,970

3,961

3,946

Evo Payments International, LLC

Banking, Finance, Insurance & Real Estate

5.31% (LIBOR +3.25%)

12/08/2016

12/22/2023

2,574

2,559

2,587

Gold Standard Baking, Inc. ⁽¹³⁾

Wholesale

6.88% (LIBOR +4.5%)

05/19/2015

07/23/2022

2,518

2,423

1,435

Golden West Packaging Group LLC

Containers, Packaging & Glass

7.36% (LIBOR +5.25%)

02/09/2018

06/20/2023

4,693

4,677

4,693

Granite Holdings US Acquisition Co⁽¹⁰⁾

Capital Equipment

7.34% (LIBOR +5.25%)

09/25/2019

09/25/2026

2,933

2,845

2,864

Great Dane Merger Sub Inc

High Tech Industries

5.61% (LIBOR +3.5%)

05/02/2018

05/21/2025

2,963

2,951

2,927

Gruden Acquisition Inc.

Transportation: Cargo

7.83% (LIBOR +5.5%)

06/21/2017

08/18/2022

1,954

1,927

1,949

Heartland Dental LLC^(5)(11)

Healthcare & Pharmaceuticals

5.84% (LIBOR +3.75%)

04/19/2018

04/17/2025

)

Heartland Dental LLC

Healthcare & Pharmaceuticals

5.86% (LIBOR +3.75%)

04/19/2018

04/30/2025

1,450

1,444

1,422

Help/Systems Holdings, Inc.

High Tech Industries

6.08% (LIBOR +3.75%)

03/23/2018

03/28/2025

1,975

1,971

1,973

Higginbotham Insurance Agency, Inc.

Banking, Finance, Insurance & Real Estate

6.11% (LIBOR +4%)

12/14/2017

12/19/2024

4,913

4,894

4,827

Hoffman Southwest Corporation

Environmental Industries

6.83% (LIBOR +4.5%)

05/16/2019

08/14/2023

1,610

1,595

1,594

Hornblower Sub LLC

Hotel, Gaming & Leisure

6.83% (LIBOR +4.5%)

03/08/2019

04/27/2025

1,771

1,763

1,779

Idera Inc

High Tech Industries

6.62% (LIBOR +4.5%)

06/27/2017

06/28/2024

2,314

2,298

2,316

Logan JV Portfolio as of September 30, 2019

(dollar amounts in thousands)

Type of Investment/

Portfolio company⁽¹²⁾

Industry

Interest Rate ⁽¹⁾

Initial

Acquisition

Date

Maturity

Date

Principal

Amortized

Cost

Fair

Value ⁽²⁾

Infoblox Inc.

High Tech Industries

6.61% (LIBOR +4.5%)

11/03/2016

11/07/2023

2,120

2,090

2,133

Institutional Shareholder Services, Inc.

Services: Business

6.83% (LIBOR +4.5%)

03/04/2019

02/26/2026

1,990

1,972

1,970

Intermedia Holdings, Inc.

Telecommunications

8.11% (LIBOR +6%)

07/13/2018

07/11/2025

2,978

2,953

2,982

International Textile Group Inc

Consumer goods: Durable

7.1% (LIBOR +5%)

04/20/2018

04/19/2024

969

965

828

Isagenix International LLC

Services: Consumer

7.85% (LIBOR +5.75%)

04/26/2018

06/14/2025

1,874

1,859

1,448

LifeScan Global Corp

Healthcare & Pharmaceuticals

8.66% (LIBOR +6%)

06/19/2018

10/01/2024

2,132

2,078

1,937

LSCS Holdings Inc.

Healthcare & Pharmaceuticals

6.58% (LIBOR +4.25%)

03/09/2018

03/17/2025

467

465

LSCS Holdings Inc.

Healthcare & Pharmaceuticals

6.58% (LIBOR +4.25%)

03/09/2018

03/17/2025

1,809

1,802

1,800

MAG DS Corp.

Aerospace & Defense

6.86% (LIBOR +4.75%)

06/01/2018

05/30/2025

2,963

2,938

2,948

Mavenir Systems Inc

Telecommunications

8.34% (LIBOR +6%)

05/01/2018

05/01/2025

1,975

1,943

1,950

MCS Group Holdings LLC

Banking, Finance, Insurance & Real Estate

6.86% (LIBOR +4.75%)

05/12/2017

05/20/2024

1,955

1,948

886

MDVIP Inc

Healthcare & Pharmaceuticals

6.36% (LIBOR +4.25%)

11/10/2017

11/14/2024

4,224

4,213

4,198

Merrill Communications LLC ⁽¹⁰⁾

Media: Advertising, Printing & Publishing

7.09% (LIBOR +5%)

09/26/2019

09/25/2026

2,000

1,980

1,995

Miller's Ale House Inc

Hotel, Gaming & Leisure

6.93% (LIBOR +4.75%)

05/24/2018

05/21/2025

2,370

2,360

2,204

MLN US Holdco LLC

Telecommunications

6.61% (LIBOR +4.5%)

07/13/2018

11/30/2025

2,978

2,971

2,777

Nasco Healthcare, Inc.

Healthcare & Pharmaceuticals

6.83% (LIBOR +4.5%)

07/13/2015

06/30/2021

4,454

4,447

4,454

New Insight Holdings Inc

Services: Business

7.75% (LIBOR +5.5%)

12/08/2017

12/20/2024

1,965

1,892

1,975

NextCare, Inc. ^(6)(11)

Healthcare & Pharmaceuticals

6.84% (LIBOR +4.75%)

02/13/2018

06/30/2024

630

)

NextCare, Inc.

Healthcare & Pharmaceuticals

6.61% (LIBOR +4.5%)

02/13/2018

06/30/2024

3,826

3,797

3,788

Northern Star Holdings Inc.

Utilities: Electric

6.83% (LIBOR +4.5%)

03/28/2018

03/14/2025

4,186

4,170

4,123

Oak Point Partners, LLC

Banking, Finance, Insurance & Real Estate

7.28% (LIBOR +5.25%)

09/13/2017

09/13/2023

2,925

2,901

2,896

OB Hospitalist Group Inc

Healthcare & Pharmaceuticals

6.29% (LIBOR +4%)

08/08/2017

08/01/2024

2,192

2,184

2,186

Odyssey Logistics & Technology Corporation

Transportation: Cargo

6.11% (LIBOR +4%)

10/06/2017

10/12/2024

1,943

1,936

1,931

OpenLink

High Tech Industries

7.15% (LIBOR +4.5%)

03/02/2018

03/21/2025

1,771

1,764

1,762

Orion Business Innovations

High Tech Industries

6.64% (LIBOR +4.5%)

10/18/2018

10/19/2024

562

557

559

Orion Business Innovations

High Tech Industries

6.64% (LIBOR +4.5%)

03/04/2019

10/21/2024

829

822

825

Orion Business Innovations

High Tech Industries

6.82% (LIBOR +4.5%)

10/18/2018

10/19/2024

1,921

1,905

1,911

OSM MSO, LLC

Healthcare & Pharmaceuticals

7.33% (LIBOR +5%)

10/16/2018

08/09/2023

3,960

3,928

3,881

Output Services Group Inc

Services: Business

6.61% (LIBOR +4.5%)

03/26/2018

03/21/2024

4,434

4,417

3,880

Park Place Technologies, LLC

High Tech Industries

6.11% (LIBOR +4%)

03/22/2018

03/22/2025

2,311

2,302

2,304

PH Beauty Holdings III, Inc.

Containers, Packaging & Glass

7.11% (LIBOR +5%)

10/04/2018

09/28/2025

2,970

2,944

2,851

Ping Identity Corp

High Tech Industries

5.86% (LIBOR +3.75%)

01/23/2018

01/24/2025

462

460

462

Pivotal Payments

Services: Business

7.06% (LIBOR +5%)

09/27/2018

09/29/2025

3,963

3,937

3,924

PLH Group Inc

Energy: Oil & Gas

8.21% (LIBOR +6%)

08/01/2018

07/25/2023

3,976

3,899

3,951

Polar US Borrower

Chemicals, Plastics & Rubber

7.08% (LIBOR +4.75%)

08/21/2018

10/15/2025

2,978

2,874

2,899

Premise Health Holding Corp ^(7)(11)

Healthcare & Pharmaceuticals

5.59% (LIBOR +3.5%)

08/14/2018

07/10/2025

294

)

Premise Health Holding Corp

Healthcare & Pharmaceuticals

5.83% (LIBOR +3.5%)

08/14/2018

07/10/2025

3,669

3,653

3,635

Project Leopard Holdings Inc

High Tech Industries

6.7% (LIBOR +4.5%)

06/21/2017

07/07/2023

1,715

1,712

1,720

PSC Industrial Outsourcing, LP

Chemicals, Plastics & Rubber

5.78% (LIBOR +3.75%)

10/05/2017

10/11/2024

1,965

1,951

1,961

Pure Fishing Inc

Consumer goods: Non-Durable

6.83% (LIBOR +4.5%)

12/20/2018

11/30/2025

1,194

1,151

1,067

QuickBase Inc.

Services: Business

6.07% (LIBOR +4%)

03/29/2019

04/03/2026

2,095

2,085

2,084

Quidditch Acquisition Inc

Beverage, Food & Tobacco

9.11% (LIBOR +7%)

03/16/2018

03/21/2025

1,006

990

1,021

Red Ventures LLC

Media: Advertising, Printing & Publishing

5.11% (LIBOR +3%)

10/18/2017

11/08/2024

2,023

2,009

2,034

Sabre Industries Inc

Capital Equipment

6.31% (LIBOR +4.25%)

04/04/2019

04/02/2026

1,197

1,186

1,204

Silverback Merger Sub Inc

High Tech Industries

5.61% (LIBOR +3.5%)

08/11/2017

08/21/2024

1,176

1,174

1,000

Logan JV Portfolio as of September 30, 2019

(dollar amounts in thousands)

Type of Investment/

Portfolio company⁽¹²⁾

Industry

Interest Rate ⁽¹⁾

Initial

Acquisition

Date

Maturity

Date

Principal

Amortized

Cost

Fair

Value ⁽²⁾

SMS Systems Maintenance Services Inc

High Tech Industries

7.11% (LIBOR +5%)

02/09/2017

10/30/2023

2,918

2,909

2,392

SoClean, Inc

Healthcare & Pharmaceuticals

8.32% (LIBOR +6%)

02/13/2018

12/20/2022

5,009

4,974

5,009

Starfish- V Merger Sub Inc

High Tech Industries

6.61% (LIBOR +4.5%)

08/11/2017

08/16/2024

1,225

1,217

1,222

Teneo Holdings LLC

Services: Business

7.29% (LIBOR +5.25%)

07/15/2019

07/12/2025

2,250

2,163

2,157

ThoughtWorks, Inc.

High Tech Industries

6.11% (LIBOR +4%)

10/06/2017

10/11/2024

3,951

3,941

3,961

Titan Sub LLC⁽¹⁰⁾

Aerospace & Defense

7.09% (LIBOR +5%)

09/19/2019

09/19/2026

2,250

2,228

2,253

TOMS Shoes LLC

Retail

7.76% (LIBOR +5.5%)

12/18/2014

10/30/2020

1,910

1,883

1,222

Tupelo Buyer Inc

Transportation: Cargo

5.8% (LIBOR +3.75%)

10/02/2017

10/07/2024

2,188

2,175

2,141

Uber Technologies, Inc.

Services: Consumer

6.03% (LIBOR +4%)

03/22/2018

04/04/2025

2,765

2,754

US Shipping Corp

Utilities: Oil & Gas

6.36% (LIBOR +4.25%)

03/09/2016

06/26/2021

206

202

191

Utility One Source L.P.

Construction & Building

7.83% (LIBOR +5.5%)

04/07/2017

04/18/2023

978

972

990

Vertiv Group Corporation

Capital Equipment

6.33% (LIBOR +4%)

09/30/2016

11/30/2023

1,504

1,476

1,435

Vistage Worldwide, Inc.

Services: Consumer

6.15% (LIBOR +4%)

02/06/2018

02/10/2025

2,482

2,477

2,472

W3 Topco LLC

Energy: Oil & Gas

8.04% (LIBOR +6%)

08/13/2019

08/13/2025

204

190

193

W3 Topco LLC

Energy: Oil & Gas

8.17% (LIBOR +6%)

08/13/2019

08/16/2025

1,796

1,673

1,701

Weight Watchers International, Inc.

Services: Consumer

7.07% (LIBOR +4.75%)

11/20/2017

11/29/2024

2,376

2,341

2,384

Women's Care Florida LLP

Healthcare & Pharmaceuticals

6.61% (LIBOR +4.5%)

08/18/2017

09/29/2023

4,913

4,895

4,888

Wrench Group LLC

Construction & Building

6.45% (LIBOR +4.25%)

04/15/2019

04/12/2026

3,117

3,088

3,121

Wrench Group LLC ^(8)(11)

Construction & Building

6.34% (LIBOR +4.25%)

04/15/2019

04/30/2026

1,042

(10

)

Yak Access LLC

Energy: Oil & Gas

7.11% (LIBOR +5%)

06/29/2018

07/02/2025

2,925

2,852

2,698

Zenith American Holding, Inc.

Services: Business

7.58% (LIBOR +5.25%)

03/11/2019

12/13/2024

3,958

3,948

3,919

Zenith American Holding, Inc.⁽⁹⁾

Services: Business

7.36% (LIBOR +5.25%)

03/11/2019

12/13/2024

497

120

119

Total United States of America

314,317

306,964

Total Senior Secured First Lien Term Loans

333,934

326,259

Second Lien Term Loans

United States of America

AQA Acquisition Holding, Inc

High Tech Industries

10.32% (LIBOR +8%)

10/01/2018

05/24/2024

1,000

992

995

Constellis Holdings, LLC

Aerospace & Defense

11.26% (LIBOR +9%)

04/18/2017

04/21/2025

1,000

990

213

DigiCert, Inc.

High Tech Industries

10.11% (LIBOR +8%)

09/20/2017

10/31/2025

600

598

599

DiversiTech Holdings Inc

Consumer goods: Durable

9.83% (LIBOR +7.5%)

05/18/2017

06/02/2025

2,000

1,985

1,960

Gruden Acquisition Inc.

Transportation: Cargo

10.83% (LIBOR +8.5%)

07/31/2015

08/18/2023

500

488

497

Midwest Physician Administrative Services, LLC

Healthcare & Pharmaceuticals

9.11% (LIBOR +7%)

08/11/2017

08/15/2025

979

972

950

Optiv Security Inc

High Tech Industries

9.36% (LIBOR +7.25%)

01/19/2017

01/31/2025

1,500

1,495

729

Park Place Technologies, LLC

High Tech Industries

10.11% (LIBOR +8%)

03/22/2018

03/29/2026

700

694

695

TKC Holdings Inc

Services: Business

10.12% (LIBOR +8%)

01/31/2017

02/01/2024

1,850

1,840

1,816

Wash Multifamily Laundry Systems, LLC.

Services: Consumer

9.11% (LIBOR +7%)

05/04/2015

05/15/2023

425

424

416

Wash Multifamily Laundry Systems, LLC.

Services: Consumer

9.11% (LIBOR +7%)

05/04/2015

05/12/2023

Total United States of America

10,552

8,943

Logan JV Portfolio as of September 30, 2019

(dollar amounts in thousands)

Type of Investment/ Portfolio company⁽¹²⁾	Industry	Interest Rate ⁽¹⁾	Initial Acquisition Date	Maturity Date	Principal	Amortized Cost		Fair Value ⁽²⁾

Total Second Lien Term Loans						$	10,552	$	8,943

Total Investments						$	344,486	$	335,202


Cash equivalents
Dreyfus Government Cash Management Fund							13,472		13,472
Other cash accounts							946		946
Total Cash equivalents						$	14,418	$	14,418

⁽¹⁾	Variable interest rates indexed to 30-day, 60-day, 90-day or 180-day LIBOR rates, at the borrower’s option. LIBOR rates are subject to interest rate floors.

⁽²⁾	Represents fair value in accordance with ASC Topic 820.

⁽³⁾

Represents a delayed draw commitment of $610,201, of which $206,785 was unfunded as of September 30, 2019. Unfunded amounts of a delayed draw position have a lower rate than the contractual fully funded rate. Company pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁴⁾	Represents a delayed draw commitment of $1,538,462, which was unfunded as of September 30, 2019. Company pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁵⁾	Represents a delayed draw commitment of $32,609, which was unfunded as of September 30, 2019. Company pays 3.75% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁶⁾	Represents a delayed draw commitment of $630,036, which was unfunded as of September 30, 2019. Company pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁷⁾	Represents a delayed draw commitment of $294,107, which was unfunded as of September 30, 2019. Company pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁸⁾	Represents a delayed draw commitment of $1,041,667, which was unfunded as of September 30, 2019. Company pays 4.25% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁹⁾

Represents a delayed draw commitment of $496,514, of which $372,386 was unfunded as of September 30, 2019. Unfunded amounts of a delayed draw position have a lower rate than the contractual fully funded rate. Company pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽¹⁰⁾	Unsettled trade that interest will start to accrue on when the trade settles. Three month LIBOR as of September 30, 2019 is shown to reflect possible projected interest rate.

⁽¹¹⁾	Unfunded amount will start to accrue interest when the position is funded. Three month LIBOR as of September 30, 2019 is shown to reflect possible projected interest rate.

⁽¹²⁾	All investments are pledged as collateral for loans payable unless otherwise noted.

⁽¹³⁾	Loan was on non-accrual as of September 30, 2019.

Logan JV Loan Portfolio as of December 31, 2018

(dollar amounts in thousands)

Type of Investment/

Portfolio company

Industry

Interest Rate ⁽¹⁾

Initial

Acquisition

Date

Maturity

Date

Principal

Amortized

Cost

Fair

Value ⁽²⁾

Senior Secured First Lien Term Loans

Canada

PNI Canada Acquireco Corp

High Tech Industries

6.85% (LIBOR +4.5%)

10/31/2018

10/31/2025

1,733

1,724

1,699

Total Canada

1,724

1,699

Germany

Rhodia Acetow

Consumer goods: Non-Durable

8.09% (LIBOR +5.5%)

04/21/2017

05/31/2023

985

974

955

VAC Germany Holding GmbH

Metals & Mining

6.8% (LIBOR +4%)

02/26/2018

02/26/2025

2,978

2,964

2,974

Total Germany

3,938

3,929

United Kingdom

Auxey Bidco Ltd.

Services: Business

7.97% (LIBOR +5.5%)

08/07/2018

08/07/2025

5,000

4,806

4,813

EG Group

Retail

6.81% (LIBOR +4%)

03/23/2018

02/07/2025

2,845

2,832

2,749

Total United Kingdom

7,638

7,562

United States of America

1A Smart Start LLC

Services: Consumer

7.09% (LIBOR +4.5%)

08/28/2015

02/21/2022

4,347

4,329

4,347

A Place for Mom Inc

Media: Advertising, Printing & Publishing

6.27% (LIBOR +3.75%)

07/28/2017

08/10/2024

3,950

3,934

3,970

A10 Capital, LLC

Banking, Finance, Insurance & Real Estate

8.96% (LIBOR +6.5%)

04/25/2018

04/27/2023

5,000

4,957

4,925

Achilles Acquisition LLC

Banking, Finance, Insurance & Real Estate

6.56% (LIBOR +4%)

10/04/2018

10/03/2025

4,000

3,990

3,950

Advanced Computer Software

High Tech Industries

7.14% (LIBOR +4.75%)

05/25/2018

05/31/2024

1,496

1,493

1,485

Advanced Integration Technology LP

Aerospace & Defense

7.46% (LIBOR +4.75%)

07/15/2016

04/03/2023

1,955

1,941

1,936

AgroFresh Inc.

Chemicals, Plastics & Rubber

7.55% (LIBOR +4.75%)

12/01/2015

07/31/2021

1,935

1,928

1,909

Air Medical Group Holdings Inc

Healthcare & Pharmaceuticals

6.75% (LIBOR +4.25%)

09/26/2017

03/14/2025

2,228

2,213

2,081

Alcami Carolinas Corp

Healthcare & Pharmaceuticals

6.71% (LIBOR +4.25%)

07/09/2018

07/06/2025

3,990

3,971

3,970

Alchemy US Holdco 1 LLC

Chemicals, Plastics & Rubber

8.12% (LIBOR +5.5%)

10/01/2018

09/28/2025

2,000

1,971

1,995

Alpha Media LLC

Media: Broadcasting & Subscription

9% (LIBOR +6.5%)

02/24/2016

02/25/2022

3,043

2,962

2,931

AMCP Clean Acquisition Co LLC

Wholesale

7.05% (LIBOR +4.25%)

07/10/2018

07/10/2025

2,407

2,396

2,386

AMCP Clean Acquisition Co LLC ⁽³⁾

Wholesale

7.15% (LIBOR +4.25%)

07/10/2018

07/10/2025

581

225

222

American Sportsman Holdings Co

Retail

7.52% (LIBOR +5%)

11/22/2016

09/25/2024

3,950

3,906

3,796

Ansira Holdings, Inc. ⁽⁴⁾

Media: Diversified & Production

8.27% (LIBOR +5.75%)

04/17/2018

12/20/2022

613

150

149

Ansira Holdings, Inc.

Media: Diversified & Production

8.27% (LIBOR +5.75%)

12/20/2016

12/20/2022

1,850

1,838

1,841

AP Gaming I LLC

Hotel, Gaming & Leisure

6.02% (LIBOR +3.5%)

06/06/2016

02/15/2024

2,463

2,457

2,424

APC Aftermarket

Automotive

7.62% (LIBOR +5%)

05/09/2017

05/10/2024

493

485

448

Aptean, Inc.

High Tech Industries

7.06% (LIBOR +4.25%)

12/15/2017

12/20/2022

929

922

920

AQA Acquisition Holding, Inc

High Tech Industries

7.05% (LIBOR +4.25%)

10/01/2018

05/24/2023

1,995

1,985

ATI Merger Sub Inc.⁽¹¹⁾

Healthcare & Pharmaceuticals

7.31% (LIBOR +4.5%)

12/19/2018

12/05/2025

4,333

4,290

4,301

Avaya Inc

Telecommunications

6.71% (LIBOR +4.25%)

11/09/2017

12/15/2024

2,588

2,564

2,506

Barbri Inc

Media: Diversified & Production

6.6% (LIBOR +4.25%)

12/01/2017

12/01/2023

3,122

3,109

3,059

BCP Qualtek Merger Sub LLC

Telecommunications

8.28% (LIBOR +5.75%)

07/16/2018

07/18/2025

3,990

3,915

3,903

Beasley Mezzanine Holdings LLC

Media: Broadcasting & Subscription

6.47% (LIBOR +4%)

11/17/2017

11/01/2023

2,927

2,915

2,893

Big Ass Fans LLC

Capital Equipment

6.55% (LIBOR +3.75%)

11/07/2017

05/21/2024

2,475

2,465

2,444

Logan JV Loan Portfolio as of December 31, 2018

(dollar amounts in thousands)

Type of Investment/

Portfolio company

Industry

Interest Rate ⁽¹⁾

Initial

Acquisition

Date

Maturity

Date

Principal

Amortized

Cost

Fair

Value ⁽²⁾

Big River Steel LLC

Metals & Mining

7.8% (LIBOR +5%)

08/15/2017

08/23/2023

1,975

1,960

BI-LO LLC

Retail

10.78% (LIBOR +8%)

05/15/2018

05/31/2024

1,493

1,438

1,434

Bomgar Corp

High Tech Industries

6.52% (LIBOR +4%)

04/17/2018

04/18/2025

3,985

3,976

3,865

Brand Energy & Infrastructure Services, Inc.

Energy: Oil & Gas

6.76% (LIBOR +4.25%)

06/16/2017

06/21/2024

2,955

2,932

2,814

California Cryobank LLC

Healthcare & Pharmaceuticals

6.8% (LIBOR +4%)

08/03/2018

08/06/2025

3,200

3,185

3,200

Cambium Learning Inc.

Services: Consumer

4.5% (LIBOR +4.5%)

12/18/2018

12/11/2025

2,000

1,900

1,908

CC Amulet Intermediate, LLC ^{(5) (12)}

Healthcare & Pharmaceuticals

7.56% (LIBOR +4.75%)

06/18/2018

04/30/2024

1,538

(14

)

(15

)

CC Amulet Intermediate, LLC

Healthcare & Pharmaceuticals

7.27% (LIBOR +4.75%)

06/18/2018

04/30/2024

3,444

3,413

3,410

Clear Balance Holdings, LLC

Banking, Finance, Insurance & Real Estate

8.55% (LIBOR +5.75%)

07/07/2015

10/05/2023

4,938

4,920

4,937

Commercial Barge Line Co

Transportation: Cargo

11.27% (LIBOR +8.75%)

11/06/2015

11/12/2020

1,294

1,270

939

Constellis Holdings, LLC

Aerospace & Defense

7.52% (LIBOR +5%)

04/18/2017

04/21/2024

1,970

1,955

1,891

Conyers Park Parent Merger Sub Inc

Beverage, Food & Tobacco

6.27% (LIBOR +3.5%)

06/21/2017

07/07/2024

1,975

1,967

1,955

Country Fresh Holdings, LLC

Beverage, Food & Tobacco

7.8% (LIBOR +5%)

07/14/2017

03/31/2023

4,340

4,308

3,668

Covenant Surgical Partners Inc

Healthcare & Pharmaceuticals

7.3% (LIBOR +4.5%)

09/29/2017

10/04/2024

2,972

2,966

2,928

CPI Acquisition, Inc.

Services: Consumer

7.02% (LIBOR +4.5%)

08/14/2015

08/17/2022

4,187

4,106

2,684

CryoLife Inc

Healthcare & Pharmaceuticals

6.05% (LIBOR +3.25%)

11/15/2017

12/02/2024

1,980

1,972

1,940

CT Technologies Intermediate Holdings, Inc

Healthcare & Pharmaceuticals

6.77% (LIBOR +4.25%)

02/11/2015

12/01/2021

1,920

1,925

1,602

Deerfield Holdings Corp

Banking, Finance, Insurance & Real Estate

5.77% (LIBOR +3.25%)

12/06/2017

02/13/2025

248

236

DigiCert, Inc.

High Tech Industries

6.52% (LIBOR +4%)

09/20/2017

10/31/2024

995

991

978

Drilling Info Inc.

High Tech Industries

6.77% (LIBOR +4.25%)

07/27/2018

07/30/2025

4,489

4,468

4,478

DXP Enterprises, Inc.

Wholesale

7.27% (LIBOR +4.75%)

08/16/2017

08/29/2023

1,481

1,470

Eliassen Group, LLC

Services: Business

7.02% (LIBOR +4.5%)

10/19/2018

11/05/2024

4,167

4,146

Empower Payments Acquisition

Services: Business

7.05% (LIBOR +4.25%)

10/05/2018

10/05/2025

4,000

3,990

Evo Payments International, LLC

Banking, Finance, Insurance & Real Estate

5.76% (LIBOR +3.25%)

12/08/2016

12/22/2023

2,594

2,576

2,512

Gold Standard Baking, Inc.

Wholesale

7.31% (LIBOR +4.5%)

05/19/2015

04/23/2021

2,481

2,476

2,257

Golden West Packaging Group LLC

Containers, Packaging & Glass

7.77% (LIBOR +5.25%)

02/09/2018

06/20/2023

4,731

4,711

4,719

Great Dane Merger Sub Inc

High Tech Industries

6.27% (LIBOR +3.75%)

05/02/2018

05/21/2025

2,985

2,971

2,918

Gruden Acquisition Inc.

Transportation: Cargo

8.3% (LIBOR +5.5%)

06/21/2017

08/18/2022

1,970

1,935

1,933

Gulf Finance, LLC

Energy: Oil & Gas

8.06% (LIBOR +5.25%)

08/17/2016

08/25/2023

1,875

1,837

1,446

Heartland Dental LLC ^{(6) (12)}

Healthcare & Pharmaceuticals

6.56% (LIBOR +3.75%)

04/19/2018

04/17/2025

125

)

Heartland Dental LLC

Healthcare & Pharmaceuticals

6.27% (LIBOR +3.75%)

04/19/2018

04/30/2025

1,368

1,362

1,315

Help/Systems Holdings, Inc.

High Tech Industries

6.27% (LIBOR +3.75%)

03/23/2018

03/28/2025

1,990

1,986

1,915

Higginbotham Insurance Agency, Inc.

Banking, Finance, Insurance & Real Estate

6.26% (LIBOR +3.75%)

12/14/2017

12/19/2024

4,950

4,929

4,801

Idera Inc

High Tech Industries

7.03% (LIBOR +4.5%)

06/27/2017

06/28/2024

2,332

2,313

2,336

Infoblox Inc.

High Tech Industries

7.02% (LIBOR +4.5%)

11/03/2016

11/07/2023

2,136

2,100

2,132

Intermedia Holdings, Inc.

Telecommunications

8.52% (LIBOR +6%)

07/13/2018

07/11/2025

3,000

2,972

2,996

International Textile Group Inc

Consumer goods: Durable

7.35% (LIBOR +5%)

04/20/2018

04/19/2024

988

983

970

Isagenix International LLC

Services: Consumer

8.55% (LIBOR +5.75%)

04/26/2018

06/14/2025

1,950

1,932

1,896

Kestra Financial, Inc.

Banking, Finance, Insurance & Real Estate

6.76% (LIBOR +4.25%)

06/10/2016

06/24/2022

3,902

3,868

3,902

LifeScan Global Corp

Healthcare & Pharmaceuticals

8.4% (LIBOR +6%)

06/19/2018

10/01/2024

2,250

2,185

2,132

LSCS Holdings Inc.

Healthcare & Pharmaceuticals

6.96% (LIBOR +4.25%)

03/09/2018

03/17/2025

467

465

LSCS Holdings Inc.

Healthcare & Pharmaceuticals

6.96% (LIBOR +4.25%)

03/09/2018

03/17/2025

1,809

1,801

1,800

Lyons Magnus Inc aka

Beverage, Food & Tobacco

6.02% (LIBOR +3.5%)

06/08/2018

11/11/2024

3,964

3,952

3,944

MAG DS Corp.

Aerospace & Defense

7.27% (LIBOR +4.75%)

06/01/2018

05/30/2025

2,985

2,958

2,970

Mavenir Systems Inc

Telecommunications

8.39% (LIBOR +6%)

05/01/2018

05/01/2025

1,990

1,954

1,984

Logan JV Loan Portfolio as of December 31, 2018

(dollar amounts in thousands)

Type of Investment/

Portfolio company

Industry

Interest Rate ⁽¹⁾

Initial

Acquisition

Date

Maturity

Date

Principal

Amortized

Cost

Fair

Value ⁽²⁾

MCS Group Holdings LLC

Banking, Finance, Insurance & Real Estate

7.27% (LIBOR +4.75%)

05/12/2017

05/20/2024

1,970

1,962

1,623

MDVIP Inc

Healthcare & Pharmaceuticals

6.75% (LIBOR +4.25%)

11/10/2017

11/14/2024

4,256

4,244

4,230

Merrill Communications LLC

Media: Advertising, Printing & Publishing

7.78% (LIBOR +5.25%)

05/29/2015

06/01/2022

748

745

748

Miller's Ale House Inc

Hotel, Gaming & Leisure

7.1% (LIBOR +4.75%)

05/24/2018

05/21/2025

2,388

2,377

2,352

MLN US Holdco LLC

Telecommunications

7.02% (LIBOR +4.5%)

07/13/2018

11/30/2025

3,000

2,993

2,916

Morphe, LLC

Consumer goods: Non-Durable

8.52% (LIBOR +6%)

02/21/2017

02/10/2023

2,738

2,709

2,724

Nasco Healthcare, Inc.

Healthcare & Pharmaceuticals

7.28% (LIBOR +4.5%)

07/13/2015

06/30/2021

4,489

4,480

4,467

New Insight Holdings Inc

Services: Business

8.02% (LIBOR +5.5%)

12/08/2017

12/20/2024

1,980

1,895

1,948

NextCare, Inc. ^{(7) (12)}

Healthcare & Pharmaceuticals

7.56% (LIBOR +4.75%)

02/13/2018

02/28/2023

588

)

NextCare, Inc.

Healthcare & Pharmaceuticals

7.27% (LIBOR +4.75%)

02/13/2018

02/28/2023

3,386

3,358

3,386

Northern Star Holdings Inc.

Utilities: Electric

7.55% (LIBOR +4.75%)

03/28/2018

03/14/2025

4,218

4,199

4,213

Oak Point Partners, LLC

Banking, Finance, Insurance & Real Estate

8.03% (LIBOR +5.25%)

09/13/2017

09/13/2023

3,000

2,971

2,955

OB Hospitalist Group Inc

Healthcare & Pharmaceuticals

6.35% (LIBOR +4%)

08/08/2017

08/01/2024

2,238

2,229

2,204

Odyssey Logistics & Technology Corporation

Transportation: Cargo

6.52% (LIBOR +4%)

10/06/2017

10/12/2024

1,980

1,971

1,921

OpenLink

High Tech Industries

7.27% (LIBOR +4.75%)

03/02/2018

03/21/2025

1,831

1,822

1,820

Orion Business Innovations ^{(8) (12)}

High Tech Industries

7.31% (LIBOR +4.5%)

10/18/2018

10/19/2024

565

)

Orion Business Innovations

High Tech Industries

7.16% (LIBOR +4.5%)

10/18/2018

10/19/2024

1,931

1,912

1,911

OSM MSO, LLC

Healthcare & Pharmaceuticals

7.8% (LIBOR +5%)

10/16/2018

08/09/2023

3,990

3,952

3,950

Output Services Group Inc

Services: Business

6.77% (LIBOR +4.25%)

03/26/2018

03/21/2024

4,468

4,448

4,345

Park Place Technologies, LLC

High Tech Industries

6.52% (LIBOR +4%)

03/22/2018

03/22/2025

2,328

2,318

2,308

PH Beauty Holdings III, Inc.

Containers, Packaging & Glass

7.52% (LIBOR +5%)

10/04/2018

09/28/2025

2,993

2,963

2,888

Ping Identity Corp

High Tech Industries

6.27% (LIBOR +3.75%)

01/23/2018

01/24/2025

1,493

1,486

1,485

Pivotal Payments

Services: Business

9% (LIBOR +4.5%)

09/27/2018

09/29/2025

3,096

3,066

3,065

Pivotal Payments⁽⁹⁾

Services: Business

6.98% (LIBOR +4.5%)

09/27/2018

09/29/2025

897

550

PLH Group Inc

Energy: Oil & Gas

8.59% (LIBOR +6%)

08/01/2018

07/25/2023

3,173

3,085

3,109

Polar US Borrower

Chemicals, Plastics & Rubber

7.19% (LIBOR +4.75%)

08/21/2018

10/15/2025

3,000

2,883

2,895

Premise Health Holding Corp ^{(10) (12)}

Healthcare & Pharmaceuticals

6.56% (LIBOR +3.75%)

08/14/2018

07/10/2025

294

)

Premise Health Holding Corp

Healthcare & Pharmaceuticals

6.55% (LIBOR +3.75%)

08/14/2018

07/10/2025

3,697

3,679

3,641

Project Leopard Holdings Inc

High Tech Industries

6.52% (LIBOR +4%)

06/21/2017

07/07/2023

1,728

1,725

1,691

PSC Industrial Outsourcing, LP

Chemicals, Plastics & Rubber

6.21% (LIBOR +3.75%)

10/05/2017

10/11/2024

1,980

1,964

1,935

Pure Fishing Inc⁽¹¹⁾

Consumer goods: Non-Durable

7.06% (LIBOR +4.25%)

12/20/2018

11/30/2025

1,200

1,152

1,158

Quidditch Acquisition Inc

Beverage, Food & Tobacco

9.47% (LIBOR +7%)

03/16/2018

03/21/2025

1,014

996

1,009

Red Ventures LLC

Media: Advertising, Printing & Publishing

5.52% (LIBOR +3%)

10/18/2017

11/08/2024

2,039

2,022

1,947

SCS Holdings Inc

High Tech Industries

6.77% (LIBOR +4.25%)

11/20/2015

10/30/2022

1,558

1,551

1,541

Silverback Merger Sub Inc

High Tech Industries

6.01% (LIBOR +3.5%)

08/11/2017

08/21/2024

1,185

1,182

1,068

Situs Group Holdings Corporation

Banking, Finance, Insurance & Real Estate

7.02% (LIBOR +4.5%)

02/21/2018

02/27/2023

2,972

2,959

2,972

SMS Systems Maintenance Services Inc

High Tech Industries

7.52% (LIBOR +5%)

02/09/2017

10/30/2023

2,940

2,929

2,240

SoClean, Inc

Healthcare & Pharmaceuticals

8.74% (LIBOR +6%)

02/13/2018

12/20/2022

5,101

5,057

5,126

Starfish- V Merger Sub Inc

High Tech Industries

7.02% (LIBOR +4.5%)

08/11/2017

08/16/2024

1,234

1,224

1,223

STS Operating, Inc.

Capital Equipment

6.77% (LIBOR +4.25%)

04/27/2018

12/11/2024

1,489

1,485

1,453

ThoughtWorks, Inc.

High Tech Industries

6.52% (LIBOR +4%)

10/06/2017

10/11/2024

3,981

3,970

3,931

TKC Holdings Inc

Services: Business

6.28% (LIBOR +3.75%)

06/08/2017

02/01/2023

295

294

281

TOMS Shoes LLC

Retail

8.3% (LIBOR +5.5%)

12/18/2014

10/30/2020

1,925

1,879

1,519

Tupelo Buyer Inc

Transportation: Cargo

6.22% (LIBOR +3.75%)

10/02/2017

10/07/2024

2,204

2,190

2,160

TV Borrower US LLC

High Tech Industries

7.55% (LIBOR +4.75%)

02/16/2017

02/22/2024

983

979

978

Logan JV Loan Portfolio as of December 31, 2018

(dollar amounts in thousands)

Type of Investment/ Portfolio company	Industry	Interest Rate ⁽¹⁾	Initial Acquisition Date	Maturity Date	Principal		Amortized Cost		Fair Value ⁽²⁾
Uber Technologies, Inc.	Services: Consumer	6.39% (LIBOR +4%)	03/22/2018	04/04/2025		2,786		2,773		2,722
US Salt LLC	Consumer goods: Non-Durable	7.27% (LIBOR +4.75%)	11/30/2017	12/01/2023		2,978		2,952		2,977
US Shipping Corp	Utilities: Oil & Gas	6.77% (LIBOR +4.25%)	03/09/2016	06/26/2021		206		200		198
Utility One Source L.P.	Construction & Building	8.02% (LIBOR +5.5%)	04/07/2017	04/18/2023		985		978		985
Verdesian Life Sciences LLC	Chemicals, Plastics & Rubber	7.53% (LIBOR +5%)	12/09/2014	07/01/2020		1,996		1,897		1,876
Vertiv Group Corporation	Capital Equipment	6.71% (LIBOR +4%)	09/30/2016	11/30/2023		1,504		1,471		1,375
Vistage Worldwide, Inc.	Services: Consumer	6.46% (LIBOR +4%)	02/06/2018	02/10/2025		2,501		2,496		2,464
Weight Watchers International, Inc.	Services: Consumer	7.56% (LIBOR +4.75%)	11/20/2017	11/29/2024		2,565		2,522		2,543
Women's Care Florida LLP	Healthcare & Pharmaceuticals	7.02% (LIBOR +4.5%)	08/18/2017	09/29/2023		4,950		4,930		4,950
Yak Access LLC	Energy: Oil & Gas	7.52% (LIBOR +5%)	06/29/2018	07/02/2025		2,981		2,897		2,504
Zenith Merger Sub, Inc.	Services: Business	8.3% (LIBOR +5.5%)	12/22/2017	12/13/2023		2,970		2,945		2,970




Total United States of America							$	306,982	$	299,972

Total Senior Secured First Lien Term Loans							$	320,282	$	313,162

Second Lien Term Loans
United States of America
ABG Intermediate Holdings 2 LLC	Retail	10.27% (LIBOR +7.75%)	09/26/2017	09/29/2025		2,333	$	2,318	$	2,298
AQA Acquisition Holding, Inc	High Tech Industries	10.4% (LIBOR +8%)	10/01/2018	05/24/2024		1,000		990		1,000
CH Hold Corp	Automotive	9.77% (LIBOR +7.25%)	01/26/2017	02/03/2025		1,000		996		999
Constellis Holdings, LLC	Aerospace & Defense	11.52% (LIBOR +9%)	04/18/2017	04/21/2025		1,000		988		957
DigiCert, Inc.	High Tech Industries	10.52% (LIBOR +8%)	09/20/2017	10/31/2025		600		597		584
DiversiTech Holdings Inc	Consumer goods: Durable	10.3% (LIBOR +7.5%)	05/18/2017	06/02/2025		2,000		1,984		1,930
Gruden Acquisition Inc.	Transportation: Cargo	11.3% (LIBOR +8.5%)	07/31/2015	08/18/2023		500		486		501
Midwest Physician Administrative Services, LLC	Healthcare & Pharmaceuticals	9.5% (LIBOR +7%)	08/11/2017	08/15/2025		979		971		948
NextCare, Inc.	Healthcare & Pharmaceuticals	11.27% (LIBOR +8.75%)	02/13/2018	08/28/2023		1,000		987		1,030
Optiv Security Inc	High Tech Industries	9.77% (LIBOR +7.25%)	01/19/2017	01/31/2025		1,500		1,494		1,365
Park Place Technologies, LLC	High Tech Industries	10.52% (LIBOR +8%)	03/22/2018	03/29/2026		700		694		697
SESAC Holdco II LLC	Media: Diversified & Production	9.76% (LIBOR +7.25%)	02/13/2017	02/24/2025		1,000		992		985
TKC Holdings Inc	Services: Business	10.53% (LIBOR +8%)	01/31/2017	02/01/2024		1,850		1,839		1,825
TV Borrower US LLC	High Tech Industries	11.05% (LIBOR +8.25%)	02/16/2017	02/22/2025		1,000		988		1,006
Wash Multifamily Laundry Systems, LLC.	Services: Consumer	9.52% (LIBOR +7%)	05/04/2015	05/15/2023		425		424		412
Wash Multifamily Laundry Systems, LLC.	Services: Consumer	9.52% (LIBOR +7%)	05/04/2015	05/12/2023		75		74		72

Total United States of America							$	16,822	$	16,609

Total Second Lien Term Loans							$	16,822	$	16,609

Total Investments							$	337,104	$	329,771

Logan JV Loan Portfolio as of December 31, 2018

(dollar amounts in thousands)

Type of Investment/ Portfolio company	Industry	Interest Rate ⁽¹⁾	Initial Acquisition Date	Maturity Date	Principal	Amortized Cost		Fair Value ⁽²⁾

Cash and cash equivalents
Dreyfus Government Cash Management Fund							21,559		21,559
Other cash accounts							5,309		5,309
Total Cash and cash equivalents						$	26,868	$	26,868

⁽¹⁾	Variable interest rates indexed to 30-day, 60-day, 90-day or 180-day LIBOR rates, at the borrower’s option. LIBOR rates are subject to interest rate floors.

⁽²⁾	Represents fair value in accordance with ASC Topic 820.

⁽³⁾

Represents a delayed draw commitment of $580,645, of which $353,371 was unfunded as of December 31, 2018. Unfunded amounts of a delayed draw position have a lower rate than the contractual fully funded rate. Company pays 1.50% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁴⁾

Represents a delayed draw commitment of $612,996, of which $460,886 was unfunded as of December 31, 2018. Unfunded amounts of a delayed draw position have a lower rate than the contractual fully funded rate. Company pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁵⁾	Represents a delayed draw commitment of $1,538,462, which was unfunded as of December 31, 2018. Company pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁶⁾	Represents a delayed draw commitment of $125,217, which was unfunded as of December 31, 2018. Company pays 3.75% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁷⁾	Represents a delayed draw commitment of $588,235, which was unfunded as of December 31, 2018. Company pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁸⁾	Represents a delayed draw commitment of $564,516, which was unfunded as of December 31, 2018. Company does not pay unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁹⁾

Represents a delayed draw commitment of $896,552, of which $338,056 was unfunded as of December 31, 2018. Unfunded amounts of a delayed draw position have a lower rate than the contractual fully funded rate. Company pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽¹⁰⁾	Represents a delayed draw commitment of $294,107, which was unfunded as of December 31, 2018. Company pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽¹¹⁾	Unsettled trade that will start to accrue interest on when the trade settles. 3 month Libor as of December 31, 2018 is shown to reflect possible projected interest rate.

⁽¹²⁾	Unfunded amount will start to accrue interest when the borrower draws on the delayed draw/ revolver facility. 3 month Libor as of December 31, 2018 is shown to reflect possible projected interest rate.

Logan JV Summarized Financial Information:

Below is certain summarized financial information for Logan JV as of September 30, 2019 and December 31, 2018 and for the three and nine months ended September 30, 2019 and 2018:

Selected Balance Sheet Information:


	As of September 30, 2019		As of December 31, 2018
	(Dollars in thousands)		(Dollars in thousands)
Assets:
Investments at fair value (cost of $344,486 and $337,104, respectively)	$	335,202	$	329,771
Cash		14,418		26,868
Other assets		1,383		2,194
Total assets	$	351,003	$	358,833
Liabilities:
Loans payable reported net of unamortized debt issuance costs	$	232,284	$	239,356
Payable for investments purchased		11,426		7,342
Distribution payable		3,750		3,360
Other liabilities		2,630		2,744
Total liabilities	$	250,090	$	252,802
Members' capital	$	100,913	$	106,031
Total liabilities and members' capital	$	351,003	$	358,833

Selected Statement of Operations Information:

	For the three months ended September 30, 2019			For the three months ended September 30, 2018			For the nine months ended September 30, 2019			For the nine months ended September 30, 2018
	(Dollars in thousands)			(Dollars in thousands)			(Dollars in thousands)			(Dollars in thousands)
Interest income	$	6,311		$	6,011		$	19,231		$	15,974
Fee income		50			(6	)		104			102
Total revenues		6,361			6,005			19,335			16,076
Credit facility expenses ⁽¹⁾		2,883			2,681			9,682			6,821
Other fees and expenses		296			298			331			854
Total expenses		3,179			2,979			10,013			7,675
Net investment income		3,182			3,026			9,322			8,401
Net realized (loss) gain		5			92			(4,040	)		371
Net change in unrealized (depreciation) on investments		(3,012	)		201			(1,950	)		(724	)
Net increase in members' capital from operations	$	175		$	3,319		$	3,332		$	8,048

⁽¹⁾	As of September 30, 2019, Logan JV had $234,007 of outstanding debt under the credit facility with an effective interest rate of 4.58% per annum. As of December 31, 2018, Logan JV had $241,679 of outstanding debt under the credit facility with an effective interest rate of 4.72% per annum.

Revolving and Unfunded Delayed Draw Loans

For the Company’s investments in revolving and delayed draw loans, the cost basis of the investments purchased is adjusted for the cash received for the discount on the total balance committed. The fair value is also adjusted for price appreciation or depreciation on the unfunded portion. As a result, the purchase of commitments not completely funded may result in a negative value until it is offset by the future amounts called and funded.

4. Related Party Transactions

Investment Management Agreement

On March 5, 2019, the Company’s investment management agreement, together with the proposed fee waivers, with the Advisor was re-approved by its board of directors, including a majority of the Company’s directors who are not interested persons of the Company and the board of directors approved an amended and restated investment management agreement, which was also approved by the Company’s stockholders at the 2019 Annual Meeting of the Stockholders on June 14, 2019. Under the investment management agreement, the Advisor, subject to the overall supervision of the Company’s board of directors, manages the day-to-day operations of, and provides investment advisory services to the Company.

Base Management Fee

Effective June 14, 2019, our stockholders approved an amended and restated investment management agreement, pursuant to which the base management fee is calculated at an annual rate of 1.0% of our gross assets payable quarterly in arrears on a calendar quarter basis. Commencing April 1, 2019, the Advisor waived base management fees in excess of 1.0% per annum. Prior to June 14, 2019, the contractual base management fee was calculated at an annual rate of 1.5% of our gross assets payable quarterly in arrears on a calendar quarter basis. For purposes of calculating the base management fee, “gross assets” is determined as the value of the Company’s assets without deduction for any liabilities. The base management fee is calculated based on the value of the Company’s gross assets at the end of the most recently completed calendar quarter, and appropriately adjusted for any share issuances or repurchases during the current calendar quarter.

For the three months ended September 30, 2019 and 2018, the Company incurred $1,215 and $2,240, respectively, of base management fees. For the nine months ended September 30, 2019 and 2018, the Company incurred $4,415 and $6,893, respectively, of base management fees, net of management fees waived of $525 and $0, respectively. As of September 30, 2019 and December 31, 2018, $1,215 and $2,112, respectively, was payable to the Advisor.

Incentive Fee

The incentive fee consists of two components as described in detail below: incentive fee on net investment income and incentive fee on capital gains. The two components are determined independent of each other.

The Company accepted the Advisor’s proposals to waive 100% of the incentive fees accrued for the period commencing on January 1, 2018 and ending on December 31, 2019 (“Incentive Fee Waiver”). Such waived incentive fees shall not be subject to recoupment. Additionally, if, at any time during the fiscal year 2020, the aggregate incentive fees on Net Investment Income on a quarterly basis, as calculated based on the amended and restated investment management agreement, described herein as the Reduced Incentive Fee on Net Investment Income is greater than the aggregate incentive fees on such applicable quarter, as calculated based on the incentive fee formula as reflected in the original investment management agreement prior to giving effect to such amendment, the Advisor will waive such excess.

Incentive Fee on Net Investment Income as of January 1, 2020

On June 14, 2019, the shareholders of the Company approved an amended and restated investment management agreement that modified the incentive fee on net investment income as indicated below (“Reduced Incentive Fee on Net Investment Income”). The Reduced Incentive Fee on Net Investment Income is calculated by reference to the most recent trailing twelve quarter period or, if shorter, the number of quarters that have occurred since January 1, 2018 (“Trailing Twelve Quarter Period”), rather than on the standalone quarterly basis as set forth in the original investment management agreement. Pre-incentive fee net investment income is expressed as a rate of return on the value of the Company’s net assets (defined as total assets less indebtedness and before taking into account any incentive fees payable during the period) at the beginning of each applicable calendar quarter comprising of the relevant Trailing Twelve Quarter Period. The hurdle amount for incentive fee based on pre-incentive fee net investment income continues to be determined on a quarterly basis and equal to 2.0% (which is 8.0% annualized) but is multiplied by the net asset value attributable to the Company’s common stock at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarter Period (also referred to as “minimum income level”). The hurdle amount will be calculated after making appropriate adjustments for subscriptions (which includes all issuances by the Company of shares of our common stock, including issuances pursuant to its dividend reinvestment plan) and distributions that occurred during the relevant Trailing Twelve Quarter Period.

The calculation of pre-incentive fee net investment income continues to mean interest income, amortization of original issue discount, commitment and origination fees, dividend income and any other income (including any other fees, such as, structuring, diligence, managerial assistance and consulting fees or other fees that we receive from portfolio companies) accrued during the calendar quarter, minus the Company’s operating expenses for the quarter (including the base management fee, expenses payable under the Company’s administration agreement (discussed below), and any interest expense and any dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee and any offering expenses and other expenses not charged to operations but excluding certain reversals to the extent such reversals have the effect of reducing previously accrued incentive fees based on the deferral of non-cash interest. Furthermore, pre-incentive fee net investment income continues to include, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with PIK interest and zero coupon securities), accrued income that we have not yet received in cash.

The incentive fee based on pre-incentive net investment income for each quarter will be determined as follows:

•

The Advisor receives no incentive fee for any calendar quarter in which the Company’s pre-incentive fee net investment income does not exceed the minimum income level.

•

Subject to the Incentive Fee Cap (as defined below), the Advisor receives 100% of the Company’s pre-incentive fee net investment income for the Trailing Twelve Quarters with respect to that portion of the pre-incentive net investment income for such quarter, if any, that exceeds the minimum income level but is less than 2.5% (which is 10.0% annualized) (also referred to as the “catch-up” provision); and

•

17.5% of the Company’s pre-incentive fee net investment income, if any, greater than 2.5% (10.0% annualized) for the Trailing Twelve Quarter Period.

The amount of the incentive fee on pre-incentive net investment income that will be paid for a particular quarter will equal the excess of the incentive fee so calculated minus the aggregate incentive fees on pre-incentive net investment income that were paid in respect of the eleven calendar quarters (or if shorter, the appropriate number of quarters that have occurred since January 1, 2018) included in the relevant Trailing Twelve Quarters but not in excess of the Incentive Fee Cap (as described below).

The foregoing incentive fee is subject to an Incentive Fee Cap (as defined below). The Incentive Fee Cap for any quarter is an amount equal to (a) 17.5% of the Cumulative Net Return (as defined below) during the relevant Trailing Twelve Quarter Period, minus (b) the aggregate incentive fees based on income that were paid in respect of the first eleven calendar quarters (or the portion thereof) included in the relevant Trailing Twelve Quarter Period. “Cumulative Net Return” means (x) pre-incentive fee net investment income in respect of the relevant Trailing Twelve Quarter Period minus (y) any Net Capital Loss, if any, in respect of the relevant Trailing Twelve Quarter Period. If, in any quarter, the Incentive Fee Cap is zero or a negative value, the Company pays no incentive fee based on income to the Advisor for such quarter. If, in any quarter, the Incentive Fee Cap for such quarter is a positive value but is less than the incentive fee based on pre-incentive net investment income that is payable to the Advisor for such quarter (before giving effect to the Incentive Fee Cap) calculated as described above, the Company pays an incentive fee based on pre-incentive fee net investment income to the Advisor equal to the Incentive Fee Cap for such quarter. If, in any quarter, the Incentive Fee Cap for such quarter is equal to or greater than the incentive fee based on pre-incentive fee net investment income that is payable to the Advisor for such quarter (before giving effect to the Incentive Fee Cap) calculated as described above, the Company pays an incentive fee based on income to the Advisor equal to the incentive fee calculated as described above for such quarter without regard to the Incentive Fee Cap. “Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in such period and (ii) aggregate capital gains, whether realized or unrealized, in such period.

Additionally, if, at any time during the fiscal year 2020, the aggregate incentive fees on a quarterly basis, as calculated based on the amended and restated investment management agreement, described herein as the Reduced Incentive Fee on Net Investment Income is greater than the aggregate incentive fees on such applicable quarter, as calculated based on the incentive fee formula as reflected in the original investment management agreement prior to giving effect to such amendment, the Advisor will waive such excess.

For the three and nine months ended September 30, 2019, the Company incurred no incentive fee related to ordinary income under the new calculation.

For the three and nine months ended September 30, 2018, the Company would have incurred $951 and $2,645 of incentive fees, respectively, related to ordinary income under the new calculation. These fees were calculated based on the incentive fee rate of 20.0% which was in effect through June 14, 2019, the date when a reduced rate of 17.5% was approved by the shareholders. These fees under the new formula were greater on a cumulative basis than the fees calculated based on the formula as in effect under the original investment management agreement and therefore, the fees under the old formula were reflected as an expense as well as a corresponding waiver in the same amount.

Incentive Fee on Net Investment Income Prior to January 1, 2018 Pursuant to the Original Investment Management Agreement

The incentive fee on net investment income is calculated, and payable, quarterly in arrears based on the Company’s pre-incentive fee net investment income for the immediately preceding calendar quarter, subject to a cumulative total return requirement and to deferral of non-cash amounts. The pre-incentive fee net investment income, which is expressed as a rate of return on the value of the Company’s net assets attributable to its common stock, for the immediately preceding calendar quarter, will have a 2.0% (which is 8.0% annualized) hurdle rate (also referred to as “minimum income level”). Pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees, such as commitment, origination, structuring, diligence, managerial assistance and consulting fees or other fees that we receive from portfolio companies) accrued during the calendar quarter, minus our operating expenses for the quarter (including the base management fee, expenses payable under our administration agreement (discussed below), and any interest expense and any dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee and any offering expenses and other expenses not charged to operations but excluding certain reversals to the extent such reversals have the effect of reducing previously accrued incentive fees based on the deferral of non-cash interest. Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with PIK interest and zero coupon securities), and accrued income that we have not yet received in cash. The Advisor receives no incentive fee for any calendar quarter in which the Company’s pre-incentive fee net investment income does not exceed the minimum income level. Subject to the cumulative total return requirement described below, the Advisor receives 100% of the Company’s pre-incentive fee net investment income for any calendar quarter with respect to that portion of the pre-incentive fee net investment income for such quarter, if any, that exceeds the minimum income level but is less than 2.5% (which is 10.0% annualized) of net assets (also referred to as the “catch-up” provision) and 20.0% of the Company’s pre-incentive fee net investment income for such calendar quarter, if any, greater than 2.5% (10.0% annualized) of net assets. The foregoing incentive fee is subject to a total return requirement, which provides that no incentive fee in respect of the Company’s pre-incentive fee net investment income is payable except to the extent 20.0% of the cumulative net increase in net assets resulting from operations over the then current and 11 preceding calendar quarters exceeds the cumulative incentive fees accrued and/or paid for the 11 preceding quarters. In other words, any ordinary income incentive fee that is payable in a calendar quarter is limited to the lesser of (i) 20% of the amount by which our pre-incentive fee net investment income for such calendar quarter exceeds the 2.0% hurdle, subject to the “catch- up” provision, and (ii) (x) 20% of the cumulative net increase in net assets resulting from operations for the then current and 11 preceding quarters minus (y) the cumulative incentive fees accrued and/or paid for the 11 preceding calendar quarters. For the foregoing purpose, the “cumulative net increase in net assets resulting from operations” is the amount, if positive, of the sum of the Company’s pre-incentive fee net investment income, base management fees, realized gains and losses and unrealized appreciation and depreciation for the then current and 11 preceding calendar quarters. In addition, the portion of such incentive fee that is attributable to deferred interest (sometimes referred to as payment-in-kind interest, or PIK, or original issue discount, or OID) will be paid to the Advisor, together with interest thereon from the date of deferral to the date of payment, only if and to the extent we actually receive such interest in cash, and any accrual thereof will be reversed if and to the extent such interest is reversed in connection with any write-off or similar treatment of the investment giving rise to any deferred interest accrual. There is no accumulation of amounts on the hurdle rate from quarter to quarter and accordingly there is no clawback of amounts previously paid if subsequent quarters are below the quarterly hurdle rate and there is no delay of payment if prior quarters are below the quarterly hurdle rate.

Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Because of the structure of the incentive fee, it is possible that the Company may pay an incentive fee in a quarter where it incurs a loss, subject to the total return requirement and deferral of non-cash amounts. For example, if the Company receives pre-incentive fee net investment income in excess of the quarterly minimum hurdle rate, it will pay the applicable incentive fee even if the Company has incurred a loss in that quarter due to realized and unrealized capital losses. The Company’s net investment income used to calculate this component of the incentive fee is also included in the amount of its gross assets used to calculate the base management fee. These calculations will be appropriately prorated for any period of less than three months and adjusted for any share issuances or repurchases during the current quarter.

For the three and nine months ended September 30, 2019, the Company would have incurred no incentive fees related to ordinary income under the old calculation.

For the three and nine months ended September 30, 2018, the Company incurred $0 and reversed $9 of incentive fees, respectively related to ordinary income under the old calculation, net of incentive fee waived of $1,658 and $1,658, respectively. These fees were less on a cumulative basis than the fees calculated based on the formula in place after January 1, 2018, therefore, these fees were booked as an expense for the aforementioned periods.

Incentive Fee on Net Investment Income Payable

For the three and nine months ended September 30, 2019 the Company recognized no incentive fees related to the adjustment of previously deferred incentive fees payable. For the three and nine months ended September 30, 2018, the Company reversed $9 and $9, respectively, of incentive fees related to the adjustment of previously deferred incentive fees.

As of September 30, 2019 and December 31, 2018, $0 and $143, respectively, of incentive fees related to previously deferred income now received in cash are currently payable to the Advisor and reflected in accrued expenses and other payables on the Consolidated Statements of Assets and Liabilities. As of September 30, 2019 and December 31, 2018, $677 and $677, respectively of incentive fees incurred by the Company were generated from deferred interest (i.e. PIK, certain discount accretion and deferred interest) and are not payable until such amounts are received in cash. These amounts are reflected in accrued incentive fees on the Consolidated Statements of Assets and Liabilities.

Incentive Fee on Capital Gains

The second component of the incentive fee (capital gains incentive fee) is determined and payable in arrears as of the end of each calendar year (or upon termination of the investment management agreement, as of the termination date). Effective June 14, 2019, this component is equal to 17.5% (prior thereto before giving effect to any waivers was 20.0%) of the Company’s cumulative aggregate realized capital gains from inception through the end of that calendar year, computed net of the cumulative aggregate realized capital losses and cumulative aggregate unrealized capital depreciation through the end of such year. The calculation of the capital gains incentive fee has not been modified. The aggregate amount of any previously paid capital gains incentive fees is subtracted from such capital gains incentive fee calculated. There was no capital gains incentive fee payable to the Company’s Advisor under the investment management agreement as of September 30, 2019 and December 31, 2018. The Advisor has agreed to waive any capital gains incentive fee due and payable as of December 31, 2019.

GAAP Incentive Fee Accrual

GAAP requires that the incentive fee accrual be calculated assuming a hypothetical liquidation of the Company at the balance sheet date. A hypothetical liquidation considers the cumulative aggregate realized gains and losses and unrealized capital appreciation or depreciation of investments or other financial instruments, in the calculation, as an incentive fee would be payable if such realized gains and losses or unrealized capital appreciation or depreciation were realized, even though such realized gains and losses and unrealized capital appreciation or depreciation is not permitted to be considered in calculating the fee actually payable under the investment management agreement (“GAAP Incentive Fee”). There can be no assurance that such unrealized appreciation or depreciation will be realized in the future. Accordingly, such fee, as calculated and accrued, would not necessarily be payable under the investment management agreement, and may never be paid based upon the computation of incentive fees in subsequent periods. For the three and nine months ended September 30, 2019 and 2018, the Company incurred no incentive fees related to the GAAP incentive fee.

Administration Agreement

The Company has also entered into an administration agreement with the Advisor under which the Advisor will provide administrative services to the Company. Under the administration agreement, the Advisor performs, or oversees the performance of administrative services necessary for the operation of the Company, which include, among other things, being responsible for the financial records which the Company is required to maintain and preparing reports to the Company’s stockholders and reports filed with the SEC. In addition, the Advisor assists in determining and publishing the Company’s net asset value, oversees the preparation and filing of the Company’s tax returns and the printing and dissemination of reports to the Company’s stockholders, and generally oversees the payment of the Company’s expenses and the performance of administrative and professional services rendered to the Company by others. The Company will reimburse the Advisor for its allocable portion of the costs and expenses incurred by the Advisor for overhead in performance by the Advisor of its duties under the administration agreement and the investment management agreement, including facilities, office equipment and the Company’s allocable portion of cost of compensation and related expenses of the Company’s chief financial officer and chief compliance officer and their respective staffs, as well as any costs and expenses incurred by the Advisor relating to any administrative or operating services provided by the Advisor to the Company. The Company’s board of directors reviews the allocation methodologies with respect to such expenses. Such costs are reflected as administrator expenses in the accompanying Consolidated Statements of Operations. Under the administration agreement, the Advisor provides, on behalf of the Company, managerial assistance to those portfolio companies to which the Company is required to provide such assistance. To the extent that the Company’s Advisor outsources any of its functions, the Company pays the fees associated with such functions on a direct basis without profit to the Advisor.

For the three months ended September 30, 2019 and 2018, the Company incurred administrator expenses of $373 and $512, respectively. For the nine months ended September 30, 2019 and 2018, the Company incurred administrator expenses of $1,215 and $1,640, respectively. As of September 30, 2019 and December 31, 2018, $32 and $81 of administrator expenses true-up were due from the Advisor, respectively, which was included in Due from affiliate on the Consolidated Statement of Assets and Liabilities.

License Agreement

The Company and the Advisor have entered into a license agreement with THL Partners, L.P., or THL Partners, under which THL Partners has granted to the Company and the Advisor a non-exclusive, personal, revocable, worldwide, non-transferable license to use the trade name and service mark THL, which is a proprietary mark of THL Partners, for specified purposes in connection with the Company’s and the Advisor’s respective businesses. This license agreement is royalty-free, which means the Company is not charged a fee for its use of the trade name and service mark THL. The license agreement is terminable either in its entirety or with respect to the Company or the Advisor by THL Partners at any time in its sole discretion upon 60 days prior written notice, and is also terminable with respect to either the Company or the Advisor by THL Partners in the case of certain events of non-compliance. After the expiration of its first one year term, the entire license agreement is terminable by either the Company or the Advisor at the Company or its sole discretion upon 60 days prior written notice. Upon termination of the license agreement, the Company and the Advisor must cease to use the name and mark THL, including any use in the Company’s respective legal names, filings, listings and other uses that may require the Company to withdraw or replace the Company’s names and marks. Other than with respect to the limited rights contained in the license agreement, the Company and the Advisor have no right to use, or other rights in respect of, the THL name and mark. The Company is an entity operated independently from THL Partners, and third parties who deal with the Company have no recourse against THL Partners.

Managed Funds

The Advisor and its affiliates may also manage other funds in the future that may have investment mandates that are similar, in whole or in part, with ours. For example, the Advisor may serve as investment adviser to one or more private funds, registered closed-end funds and collateralized loan obligations (CLO). In addition, the Company’s officers may serve in similar capacities for one or more private funds, registered closed-end funds and CLOs. The Advisor and its affiliates may determine that an investment is appropriate for us and for one or more of those other funds. In such event, depending on the availability of such investment and other appropriate factors, the Advisor or its affiliates may determine that the Company should invest side- by-side with one or more other funds. The Advisor’s policies are designed to manage and mitigate the conflicts of interest associated with the allocation of investment opportunities if we are able to co-invest, either pursuant to SEC interpretive positions or an exemptive order, with other funds managed by the Advisor and its affiliates. As a result, the Advisor and/or its affiliates may face conflicts in allocating investment opportunities between us and such other entities. Although the Advisor and its affiliates will endeavor to allocate investment opportunities in a fair and equitable manner and consistent with applicable allocation procedures, it is possible that we may not be given the opportunity to participate in investments made by investment funds managed by the Advisor or its affiliates.

The 1940 Act generally prohibits BDCs from making certain negotiated co-investments with affiliates absent an order from the SEC permitting the BDC to do so. The SEC has granted the Company the relief it sought in an exemptive application that expands the Company’s ability to co-invest in portfolio companies with certain other funds managed by the Advisor or its affiliates (“Affiliated Funds”) and, subject to certain conditions, proprietary accounts of the Advisor or its affiliates (“THL Proprietary Accounts”) in a manner consistent with the Company’s investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors, subject to compliance with certain conditions (the “Order”). Pursuant to the Order, the Company is permitted to co-invest with Affiliated Funds and/or THL Proprietary Accounts if, among other things, a “required majority” (as defined in Section 57(o) of the 1940 Act) or its independent directors make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transactions, including the consideration to be paid, are reasonable and fair to the Company and its stockholders and do not involve overreaching of the Company or its stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of the Company’s stockholders and is consistent with its investment objective and strategies.

Greenway

On January 14, 2011, THL Credit Greenway Fund LLC, or Greenway, was formed as a Delaware limited liability company. Greenway is a portfolio company of the Company. Greenway is a closed-end investment fund which provides for no liquidity or redemption options and is not readily marketable. Greenway operates under a limited liability agreement dated January 19, 2011, or the Agreement. Greenway will continue in existence until January 14, 2021, subject to earlier termination pursuant to certain terms of the Agreement. The term may also be extended for up to three additional one-year periods pursuant to certain terms of the Agreement. Greenway had a two year investment period.

Greenway had $150,000 of capital committed by affiliates of a single institutional investor and is managed by the Company. The Company’s capital commitment to Greenway is $15. As of September 30, 2019, Greenway’s committed capital had been fully called. The Company’s nominal investment in Greenway is reflected in the September 30, 2019 and December 31, 2018 Consolidated Schedules of Investments.

The Company acts as the investment adviser to Greenway and is entitled to receive certain fees relating to its investment management services provided, including a base management fee, a performance fee and a portion of the closing fees on each investment transaction. As a result, Greenway is classified as an affiliate of the Company. For the three and nine months ended September 30, 2019, the Company earned $11 and $35, respectively, in fees related to Greenway, which is included in other income from non-controlled, affiliated investments in the Consolidated Statements of Operations. For the three and nine months ended September 30, 2018, the Company earned $11 and $32, respectively, in fees related to Greenway, which is included in other income from non-controlled, affiliated investments in the Consolidated Statements of Operations. As of September 30, 2019 and December 31, 2018, $11 and $12 of fees and expenses related to Greenway, respectively, were included in due from affiliate on the Consolidated Statements of Assets and Liabilities.

Greenway invested in securities similar to those of the Company pursuant to investment and allocation guidelines which address, among other things, the size of the borrowers, the types of transactions and the concentration and investment ratio amongst Greenway and the Company. However, the Company has the discretion to invest in other securities.

Greenway II

On January 31, 2013, THL Credit Greenway Fund II, LLC, or Greenway II LLC, was formed as a Delaware limited liability company and is a portfolio company of the Company. Greenway II LLC is a closed-end investment fund which provides for no liquidity or redemption options and is not readily marketable. Greenway II LLC operates under a limited liability agreement dated February 11, 2013, as amended, or the Greenway II LLC Agreement. Greenway II LLC will continue until October 10, 2021, subject to earlier termination pursuant to certain terms of the Greenway II LLC Agreement. The term may also be extended for up to three additional one-year periods pursuant to certain terms of the Greenway II LLC Agreement. Greenway II LLC has a two year investment period, which has now expired.

As contemplated in the Greenway II LLC Agreement, the Company has established a related investment vehicle and entered into an investment management agreement with an account set up by an unaffiliated third party investor to invest alongside Greenway II LLC pursuant to similar economic terms. The account is also managed by the Company. References to “Greenway II” herein include Greenway II LLC and the account of the related investment vehicle. Greenway II had $186,500 of capital commitments primarily from institutional investors. As of September 30, 2019, Greenway II’s committed capital had been fully called. The Company’s nominal investment in Greenway II is reflected in the September 30, 2019 and December 31, 2018 Consolidated Schedules of Investments.

The Company acts as the investment adviser to Greenway II and is entitled to receive certain fees relating to its investment management services provided, including a base management fee, a performance fee and a portion of the closing fees on each investment transaction. As a result, Greenway II is classified as an affiliate of the Company. For the three and nine months ended September 30, 2019, the Company earned $109 and $360, respectively, in fees related to Greenway II, which are included in other income from non-controlled, affiliated investments in the Consolidated Statements of Operations. For the three and nine months ended September 30, 2018, the Company earned $180 and $660, respectively, in fees related to Greenway II, which is included in other income from non-controlled, affiliated investments in the Consolidated Statements of Operations. As of September 30, 2019 and December 31, 2018, $229 and $145, respectively, of fees related to Greenway II and legal expenses related to certain former portfolio companies were included in due from affiliate on the Consolidated Statements of Assets and Liabilities.

Greenway II invested in securities similar to those of the Company pursuant to investment and allocation guidelines which address, among other things, the size of the borrowers, the types of transactions and the concentration and investment ratio amongst Greenway II and the Company. However, the Company has the discretion to invest in other securities.

Due To and From Affiliates

The Advisor pays certain other general and administrative expenses on behalf of the Company. As of September 30, 2019 and December 31, 2018, there were $102 and $166, respectively, due to affiliate, which was included in accrued expenses and other payables on the Consolidated Statements of Assets and Liabilities.

As of September 30, 2019 and December 31, 2018, the Advisor owed $32 and $81, respectively, of administrator expenses as a reimbursement to the Company, which was included in due from affiliate on the Consolidated Statements of Assets and Liabilities.

The Company acts as the investment adviser to Greenway and Greenway II and is entitled to receive certain fees. As a result, Greenway and Greenway II are classified as affiliates of the Company. As of September 30, 2019 and December 31, 2018, $240 and $267 of total fees and expenses related to Greenway and Greenway II, respectively, were included in due from affiliate on the Consolidated Statements of Assets and Liabilities.

For the Company’s controlled equity investments, as of September 30, 2019, it had $3,290 of dividends receivable from Logan JV and C&K Market, Inc., $279 of interest and fees from OEM Group, LLC included in interest, dividends, and fees receivable and $311 of distribution receivable from Logan JV included in distribution receivable on the Consolidated Statements of Assets and Liabilities. As of December 31, 2018, it had $3,154 of dividends receivable from Logan JV, Copperweld Bimetallics, LLC and C&K Market, Inc. and $217 of interest and fees from OEM Group, LLC, included in interest, dividends, and fees receivable and $207 distribution receivable from Logan JV included in distribution receivable on the Consolidated Statements of Assets and Liabilities.

Advisor Stock Trading Plan

On March 12, 2018, the Advisor adopted a stock trading plan in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, to purchase up to $10,000 of shares of the Company’s common stock. The Advisor previously informed the Company that it intended to enter into such plan. As part of this plan, during the three and nine months ended September 30, 2018, the Advisor purchased 97,172 shares at an average cost of $8.13 per share and 1,259,102 shares at an average cost of $7.92 per share, respectively, inclusive of commissions. The plan fulfilled its purchase limits in July 2018.

5. Realized Gains and Losses on Investments, net of income tax provision

The following shows the breakdown of net realized gains and losses for the three and nine months ended September 30, 2019 and 2018:

	For the three months ended September 30,						For the nine months ended September 30,
	2019			2018				2019			2018
Aerogroup International Inc. ⁽¹⁾	$	—		$	(366	)		$	(2,203	)	$	(6,675	)
Alex Toys, LLC ⁽²⁾		—			—				(1,460	)		—
Charming Charlie LLC ⁽³⁾		(24,652	)		—				(24,652	)		(11,494	)
Copperweld Bimetallics LLC ⁽⁴⁾		16,701			—				16,701			—
Fairstone Financial Inc. ⁽⁵⁾		249			—				249			157
Food Processing Holdings, LLC		—			28							28
Gryphon Partners 3.5, L.P.		—			128				—			176
Home Partners of America, Inc.⁽⁶⁾		—			—				18			—
LAI International, Inc. ⁽⁷⁾		—			—				(22,713	)		—
Specialty Brands Holdings, LLC ⁽⁸⁾		—			—				—			(21,013	)
THL Credit Logan JV LLC		—			(101	)			—			242
Tri-Starr Management Services, Inc. ⁽⁹⁾		—			—				443			—
YP Equity Investors, LLC		—			—				—			21
Other		31			25				(95	)		22
Net realized losses	$	(7,671	)	$	(286	)		$	(33,712	)	$	(38,536	)

⁽¹⁾		In March 2018, Aerogroup International Inc. was sold through bankruptcy proceedings and the Company received $2,494 in proceeds with an additional $8,042 reflected as escrow receivable. Subsequently, the Company collected the outstanding escrow proceeds in cash through June 2019 realizing additional losses to reflect amounts collected and associated expenses.
⁽²⁾		On January 11, 2019, the Company sold its first lien senior secured term loan in Alex Toys, LLC for total proceeds of $7,699. The realized loss of $1,460 was offset by a corresponding change in unrealized appreciation in the same amount.

⁽³⁾		On July 11, 2019, Charming Charlie LLC filed for Chapter 11 bankruptcy protection in Delaware with plans to liquidate the company and any of its remaining assets. In connection with the liquidation, the Company removed Charming Charlie LLC from Investments, at fair value and reflected $4,439 of the expected liquidation proceeds as Escrow and other receivable on the Consolidated Statements of Assets and Liabilities as of September 30, 2019. As of the reporting date, Charming Charlie LLC has ceased its operations and has been actively liquidating its assets. The Company expects to collect its share of liquidation proceeds in the near term. The realized loss of $24,652 was offset by a corresponding change in unrealized appreciation. For further detail on the restructuring loss incurred in 2018, please refer to prior year filings.
⁽⁴⁾		On September 28, 2019, the Company was repaid on its second lien term loan in connection with the sale of its controlling common and preferred equity positions in Copperweld Bimetallics LLC with proceeds received of $32,519 and expects an additional $2,101 in escrow proceeds that are reflected as Escrow and other receivables on the Consolidated Statements of Assets and Liabilities as of September 30, 2019. The escrow proceeds are expected to be received throughout 2020 and 2021. The realized gain was largely offset by a corresponding change in unrealized depreciation.
⁽⁵⁾		Includes the impact of foreign exchange gain.
⁽⁶⁾		On February 8, 2019, the Company sold its first lien senior secured term loan in Home Partners of America, Inc. for total proceeds of $7,732.
⁽⁷⁾		In May 2019, the Company received $16,820 in proceeds from a sale of certain business segments of LAI International Inc. An additional $4,414 in proceeds reflected as Escrow and other receivables on the Consolidated Statements of Assets and Liabilities as of September 30, 2019 are expected from a sale of another segment of the business and realization of certain receivables. The realized loss of $22,713 was largely offset by a corresponding change unrealized appreciation.
⁽⁸⁾		On June 29, 2018, as part of restructuring the business, the Company agreed to sell its second lien term loan for $450 in cash and received nominal equity interests in an affiliated entity. In connection with the sale, during the three months ended June 30, 2018, the Company recognized a loss of $21,016 and reversed $20,347 of unrealized depreciation.
⁽⁹⁾		On February 5, 2019, the Company received an additional $442 in cash proceeds related to the final purchase price true-up in connection with the sale of its investment in Tri-Starr Management Services, Inc. in October 2018. These proceeds were in addition to the escrow receivable balance.

6. Net Increase in Net Assets Per Share Resulting from Operations

The following information sets forth the computation of basic and diluted net increase in net assets per share resulting from operations:

	For the three months ended September 30,				For the nine months ended September 30,
	2019		2018		2019			2018
Numerator—net increase (decrease) in net assets resulting from operations:	$	311	$	4,653	$	(9,164	)	$	12,530
Denominator—basic and diluted weighted average common shares:		30,992		32,674		31,679			32,674
Basic and diluted net increase (decrease) in net assets per common share resulting from operations:	$	0.01	$	0.14	$	(0.29	)	$	0.38

Diluted net increase in net assets per share resulting from operations equals basic net increase in net assets per share resulting from operations for each period because there were no common stock equivalents outstanding during the above periods.

7. Borrowings

The following shows a summary of the Company’s borrowings as of September 30, 2019 and December 31, 2018:

	As of
	September 30, 2019									December 31, 2018
Facility	Commitments		Borrowings Outstanding ⁽¹⁾		Weighted Average Borrowings Outstanding⁽²⁾⁽³⁾		Weighted Average Interest Rate ⁽⁸⁾			Commitments		Borrowings Outstanding ⁽⁴⁾		Weighted Average Borrowings Outstanding ⁽³⁾⁽⁵⁾		Weighted Average Interest Rate ⁽⁸⁾
Revolving Facility⁽⁶⁾⁽⁷⁾	$	190,000	$	69,161	$	103,184		4.56	%	$	275,000	$	107,657	$	135,121		4.90	%
2021 Notes		-		-		-		-			-		-		42,361		-
2022 Notes		60,000		60,000		60,000		6.75	%		60,000		60,000		15,000		6.75	%
2023 Notes		51,607		51,607		51,607		6.13	%		51,607		51,607		12,136		6.13	%
Total	$	301,607	$	180,768	$	214,791		5.73	%	$	386,607	$	219,264	$	204,618		5.70	%

(1)	As of September 30, 2019, excludes deferred financing costs of $1,171 for the 2022 Notes and $1,769 for the 2023 Notes, respectively, presented as a reduction to the respective balances outstanding in the Consolidated Statements of Assets and Liabilities.

(2)	Represents the weighted average borrowings outstanding for the nine months ended September 30, 2019.

(3)	Canadian denominated borrowings are converted to United States dollars (USD) using the respective quarter-end spot rate for purposes of this calculation.

(4)	As of December 31, 2018, excludes deferred financing costs of $1,443 for the 2022 Notes and $2,097 for the 2023 Notes presented as a reduction to the respective balances outstanding in the Consolidated Statements of Assets and Liabilities.

(5)	Represents the weighted average borrowings outstanding for the year ended December 31, 2018.

(6)

The Company may borrow amounts in U.S. dollars or certain other permitted currencies. As of September 30, 2019, the Company had no Canadian denominated debt outstanding its Revolving Facility. As of December 31, 2018, the Company had outstanding debt denominated in CAD of $19,389 on its Revolving Facility. The CAD was converted into USD at a spot exchange rate of $0.73 CAD to $1.00 USD as of December 31, 2018.

(7)	As part of Amendment No.1 to Second Amended and Restated Senior Secured Revolving Credit Agreement and Third Amended and Restated Guarantee, Pledge and Security Agreement (“Amendment No.1”) dated March 26, 2019, the revolver commitments have been reduced to $190,000 from $275,000.

(8)	Represents the weighted average interest rate as of September 30, 2019 and December 31, 2018.

Credit Facility

On December 15, 2017, the Company entered into an amendment, or the Revolving Amendment, to its existing revolving credit agreement, or Revolving Facility. The Revolving Amendment revised the Revolving Facility dated August 19, 2015 to, among other things, extend the maturity date from August 2019 to December 2022 (with a one year term out period beginning in December 2021). The one year term out period is the one year anniversary between the revolver termination date, or the end of the availability period, and the maturity date. During this time, the Company is required to make mandatory prepayments on its loans from the proceeds it receives from the sale of assets, extraordinary receipts, returns of capital or the issuances of equity or debt. The Revolving Amendment also reduced the size of the revolver commitments from $303,500 to $275,000. On March 26, 2019, the Company entered into Amendment No. 1 which further amended the Revolving Facility to, among other things, reduce the size of the commitments thereunder to $190,000, provide a $20,000 letter of credit subfacility and lower the testing levels of certain financial covenants.

The Revolving Facility, denominated in U.S. dollars, has an interest rate of LIBOR plus 2.5% (with no LIBOR floor). The non-use fee is 1.0% annually if the Company uses 35% or less of the Revolving Facility and 0.50% annually if the Company uses more than 35% of the Revolving Facility. The Company elects the LIBOR rates on the loans outstanding on its Revolving Facility, which can have a LIBOR period that is one, two, three or nine months. The LIBOR rate on the USD borrowings outstanding on its Revolving Facility had a one month LIBOR period as of September 30, 2019. There are no CAD borrowings outstanding as of the September 30, 2019.

As of September 30, 2019, the Company had USD borrowings of $69,161 outstanding under the Revolving Facility with a quarter-end interest rate of 4.56%. As of December 31, 2018, the Company had USD borrowings of $93,461 outstanding under the Revolving Facility with a weighted average interest rate of 4.94% and non-U.S dollar borrowings denominated in CAD of $19,389 ($14,196 in USD) outstanding under the Revolving Facility with a weighted average interest rate of 4.68%. The borrowings denominated in CAD were translated into USD based on the spot rate at each balance sheet date for the applicable periods. The impact resulting from changes in foreign exchange rates on the Revolving Facility borrowings is included in unrealized appreciation (depreciation) on foreign currency borrowings in our Consolidated Statements of Operations.

The Revolving Facility includes an accordion feature permitting the Company to expand the Revolving Facility, if certain conditions are satisfied; provided, however, that the aggregate amount of the Revolving Facility, collectively, is capped. The Second Revolving Amendment revised the cap from $600,000 to $500,000.

The Revolving Facility generally requires payment of interest on a quarterly basis for ABR loans (commonly based on the Prime Rate or the Federal Funds Rate), and at the end of the applicable interest period for Eurocurrency loans bearing interest at LIBOR, the interest rate benchmark used to determine the variable rates paid on the Revolving Facility. All outstanding principal is due upon each maturity date. The Revolving Facility also requires a mandatory prepayment of interest and principal upon certain triggering events (including, without limitation, the disposition of assets or the issuance of certain securities).

Borrowings under the Revolving Facility are subject to, among other things, a minimum borrowing/collateral base. The Revolving Facility has certain collateral requirements and/or covenants, including, but not limited to covenants related to: (a) limitations on the incurrence of additional indebtedness and liens, (b) limitations on certain investments, (c) limitations on certain restricted payments, (d) limitations on the creation or existence of agreements that prohibit liens on certain properties of the Company and its subsidiaries, and (e) compliance with certain financial maintenance standards including (i) minimum stockholders’ equity, (ii) a ratio of total assets (less total liabilities not represented by senior securities) to the aggregate amount of senior securities representing indebtedness, of the Company and its consolidated subsidiaries, of not less than 2.00, (iii) minimum liquidity, (iv) minimum net worth, and (v) a consolidated interest coverage ratio. In addition to the financial maintenance standards, described in the preceding sentence, borrowings under the Revolving Facility (and the incurrence of certain other permitted debt) are subject to compliance with a borrowing base that applies different advance rates to different types of assets in the Company’s portfolio.

The credit agreement governing the Revolving Facility also includes default provisions such as the failure to make timely payments under the Revolving Facility, the occurrence of a change in control, and the failure by the Company to materially perform under the operative agreements governing the Revolving Facility, which, if not complied with, could, at the option of the lenders under the Revolver Facility, accelerate repayment under the Revolving Facility, thereby materially and adversely affecting the Company’s liquidity, financial condition and results of operations. The Company cannot be assured that it will be able to borrow funds under the Revolving Facility at any particular time or at all. The Company is currently in compliance with all financial covenants under the Revolving Facility.

As of September 30, 2019 and December 31, 2018, the carrying amount of the Company’s outstanding Revolving Facility approximated fair value. The fair values of the Company’s Revolving Facility are determined in accordance with ASC 820, which defines fair value in terms of the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value of the Company’s Revolving Facility is estimated based upon market interest rates and entities with similar credit risk. As of September 30, 2019 and December 31, 2018, the Revolving Facility is deemed to be Level 3 of the fair value hierarchy.

Interest expense and related fees, excluding amortization of deferred financing costs, of $1,244 and $4,282, respectively, were incurred in connection with the Revolving Facility for the three and nine months ended September 30, 2019. Interest expense and related fees, excluding amortization of deferred financing costs, of $1,614 and $5,253, respectively, were incurred in connection with the Revolving Facility for the three and nine months ended September 30, 2018. Amortization of deferred financing costs of $137 and $148, respectively, were incurred with the Facilities for the three months ended September 30, 2019 and 2018. Amortization of deferred financing costs of $768, which included a $352 one-time acceleration charge in connection with a reduction in the revolver commitment size, and $437, respectively, were incurred in connection with the Facilities for the nine months ended September 30, 2019 and 2018. As of September 30, 2019, the Company had $1,756 of deferred financing costs related to the Revolving Facility, which is presented as an asset. As of December 31, 2018, the Company had $2,314 of deferred financing costs related to the Revolving Facility, which is presented as an asset.

Recent legislation has modified the 1940 Act by allowing a BDC to increase the maximum amount of leverage it may incur under the 1940 Act from an asset coverage ratio of 200% to an asset coverage ratio of 150%, if certain requirements are met. At the Annual Meeting of Stockholders on June 14, 2019, stockholders approved a proposal to reduce the asset coverage ratio to 150%. Such asset coverage ratio became effective on June 15, 2019. The Company may be able to increase its leverage up to an amount that reduces the asset coverage to 150% once the Revolving Facility is amended, which would require lender consent. The Company’s asset coverage as of September 30, 2019 was in excess of 200%.

Notes

In December 2015 and November 2016, the Company completed a public offering of $35,000 and $25,000, respectively, in aggregate principal amount of 6.75% notes due 2022, or the 2022 Notes. The 2022 Notes mature on December 30, 2022, and may be redeemed in whole or in part at any time or from time to time at the Company’s option on or after December 30, 2018. The 2022 Notes bear interest at a rate of 6.75% per year payable quarterly on March 30, June 30, September 30 and December 30, of each year, beginning March 30, 2016 and trade on the New York Stock Exchange under the trading symbol “TCRZ”.

On October 5, 2018, the Company completed a public offering of $50,000 in aggregate principal amount of 6.125% notes due 2023 ("2023 Notes"). The 2023 Notes mature on October 30, 2023 and may be redeemed in whole or in part at any time or from time to time at the Company’s option on or after October 30, 2021. The 2023 Notes bear interest at a rate of 6.125% per year payable quarterly on March 30, June 30, September 30 and December 30, of each year, beginning December 30, 2018 and trade on the New York Stock Exchange under the trading symbol “TCRW”. On October 16, 2018, the underwriters exercised their option to purchase an additional $1,607 to cover overallotments. The proceeds from this public offering were used to redeem the previously issued notes due 2021, or 2021 Notes, and partially repay the Revolving Facility. The redemption of the 2021 Notes was completed on November 5, 2018.

The 2022 Notes and the 2023 Notes are collectively referred to as the Notes. 2021 Notes are included and the 2023 Notes are excluded from the definition for the prior years presented.

As of September 30, 2019, the carrying amount and fair value of the Notes was $111,607 and $114,368, respectively. As of December 31, 2018, the carrying amount and fair value of the Notes was $111,607 and $111,029, respectively. The fair value the Notes are determined in accordance with ASC 820, which defines fair value in terms of the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value of the Notes is based on the closing price of the security, which is a Level 2 input under ASC 820 due to the trading volume.

In connection with the issuance of the Notes, the Company incurred $4,760 of fees and expenses. These deferred financing costs are presented as a reduction to the notes payable balance and are being amortized using the effective yield method over the term of the Notes. For the three months ended September 30, 2019 and 2018, the Company amortized approximately $203 and $168 of deferred financing costs, respectively, which is reflected in amortization of deferred financing costs on the Consolidated Statements of Operations. For the nine months ended September 30, 2019 and 2018, the Company amortized approximately $602 and $500, respectively, which is reflected in amortization of deferred financing costs on the Consolidated Statements of Operations. As of September 30, 2019 and December 31, 2018, the Company had $2,938 and $3,541 remaining deferred financing costs on the Notes, which reduced the notes payable balance on the Consolidated Statements of Assets and Liabilities.

For the three months ended September 30, 2019 and 2018, the Company incurred interest expense on the Notes of $1,803 and $1,856, respectively. For the nine months ended September 30, 2019 and 2018, the Company incurred interest expense on the Notes of $5,408 and $5,569, respectively.

The indenture and supplements thereto relating to the Notes contain certain covenants, including but not limited to (i) an inability to incur additional borrowings, including through the issuance of additional debt or the sale of additional debt securities unless the Company’s asset coverage, meets the definition in the 1940 Act after such borrowing and (ii) if the Company is not subject to the reporting requirements under the Securities and Exchange Act of 1934 to file periodic reports with the SEC the Company will provide interim and consolidated financial information to the holders of the Notes and the trustee.

8. Contractual Obligations and Off-Balance Sheet Arrangements

From time to time, the Company, or the Advisor, may become party to legal proceedings in the ordinary course of business, including proceedings related to the enforcement of the Company’s rights under contracts with its portfolio companies. Neither the Company, nor the Advisor, is currently subject to any material legal proceedings.

Unfunded commitments to provide funds to portfolio companies are not reflected on the Company’s Consolidated Statements of Assets and Liabilities. The Company’s unfunded commitments may be significant from time to time. These commitments will be subject to the same underwriting and ongoing portfolio maintenance as are the on-balance sheet financial instruments that the Company holds. Since these commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. The Company intends to use cash flow from normal and early principal repayments and proceeds from borrowings and offerings to fund these commitments.

As of September 30, 2019 and December 31, 2018, the Company has the following unfunded commitments to portfolio companies:

	As of
	September 30, 2019		December 31, 2018
Unfunded delayed draw facilities
Barry's Bootcamp Holdings, LLC	$	2,679		—
BCDI Rodeo Dental Buyer, LLC		1,980		—
Certify, Inc.		140		—
Charming Charlie LLC ⁽²⁾		—		8,275
Home Partners of America, Inc.		—		5,858
PDFTron Systems		1,089		—
Simplicity Financial Marketing Holdings Inc.		1,013		—
Women's Health USA, Inc.		—		29
		6,901		14,162
Unfunded revolving commitments
1-800 Hansons, LLC ⁽¹⁾		313		103
ABC Legal Intermediate Holding II, LLC		663		—
BCDI Rodeo Dental Buyer, LLC		1,454		—
Certify, Inc.		70		—
Communication Technology Intermediate		761
EBS Intermediate LLC		1,667		1,667
Gener8, LLC		500		950
HealthDrive Corporation⁽²⁾		1,761		1,761
Holland Intermediate Acquisition Corp. ⁽¹⁾		3,000		3,000
IRC Opco LLC		791		—
Loadmaster Derrick & Equipment, Inc.		50		—
NCP Investor, Inc.		1,000		1,000
OEM Group, LLC⁽²⁾		3,864		2,326
PDFTron Systems Inc.		533		—
Sciens Building Solutions, LLC		—		2,556
Simplicity Financial Marketing Holdings Inc.		370		—
SolutionReach, Inc.		933		—
SPST Holdings, LLC		755		755
SRS Acquiom Holdings, LLC		400		400
Women's Health USA, Inc.		1,500		1,500
		20,385		16,018
Unfunded commitments to investments in funds
Freeport Financial SBIC Fund LP		680		680
Gryphon Partners 3.5, L.P.		354		380
		1,034		1,060

Total unfunded commitments	$	28,320	$	31,240

	⁽¹⁾The Company has sole discretion as to whether to lend under this revolving commitment.
	⁽²⁾Includes amounts set aside for issued standby letters of credit.

The changes in fair value of the Company’s unfunded commitments are considered to be immaterial as the yield determined at the time of underwriting is expected to be materially consistent with the yield upon funding.

9. Distributions

The Company has elected to be taxed as a RIC under Subchapter M of the Code. In order to maintain its status as a RIC, the Company is required to distribute annually to its stockholders at least 90% of its investment company taxable income. To avoid a 4% excise tax on undistributed earnings, the Company is required to distribute each calendar year the sum of (i) 98% of its ordinary income for such calendar year, (ii) 98.2% of its capital gain net income for the one-year period ending October 31 of that calendar year and (iii) any income recognized, but not distributed, in preceding years and on which the Company paid no federal income tax.

The Company’s quarterly distributions, if any, will be determined by its board of directors. The Company intends to make distributions to stockholders on a quarterly basis of substantially all of its net investment income. Although the Company intends to make distributions of net realized capital gains, if any, at least annually, out of assets legally available for such distributions, the Company may in the future decide to retain such capital gains for investment. In addition, the extent and timing of special dividends, if any, will be determined by its board of directors and will largely be driven by portfolio specific events and tax considerations at the time.

In addition, the Company may be limited in its ability to make distributions due to the BDC asset coverage test for borrowings applicable to the Company as a BDC under the 1940 Act.

The following table summarizes the Company’s recent distributions declared and paid or to be paid on all shares, including distributions reinvested, if any:

Date Declared	Record Date	Payment Date	Amount Per Share
March 8, 2016	March 21, 2016	March 31, 2016	$	0.34
May 3, 2016	June 15, 2016	June 30, 2016	$	0.34
August 2, 2016	September 15, 2016	September 30, 2016	$	0.34
November 8, 2016	December 15, 2016	December 30, 2016	$	0.27
March 7, 2017	March 20, 2017	March 31, 2017	$	0.27
May 5, 2017	June 15, 2017	June 30, 2017	$	0.27
August 1, 2017	September 15, 2017	September 29, 2017	$	0.27
November 7, 2017	December 15, 2017	December 29, 2017	$	0.27
March 2, 2018	March 20, 2018	March 30, 2018	$	0.27
May 1, 2018	June 15, 2018	June 29, 2018	$	0.27
August 7, 2018	September 14, 2018	September 28, 2018	$	0.27
November 6, 2018	December 14, 2018	December 31, 2018	$	0.27
March 5, 2019	March 20, 2019	March 29, 2019	$	0.21
May 7, 2019	June 14, 2019	June 28, 2019	$	0.21
August 6, 2019	September 16, 2019	September 30, 2019	$	0.21
October 31, 2019	December 16, 2019	December 31, 2019	$	0.21

The Company may not be able to achieve operating results that will allow it to make distributions at a specific level or to increase the amount of these distributions from time to time. If the Company does not distribute a certain percentage of its income annually, it will suffer adverse tax consequences, including possible loss of its status as a regulated investment company. The Company cannot assure stockholders that they will receive any distributions at a particular level.

The Company maintains an “opt in” dividend reinvestment plan for our common stockholders. As a result, unless stockholders specifically elect to have their dividends automatically reinvested in additional shares of common stock, stockholders will receive all such dividends in cash. There were no dividends reinvested for the three and nine months ended September 30, 2019 and 2018.

Under the terms of the dividend reinvestment plan, dividends will primarily be paid in newly issued shares of common stock. However, the Company reserves the right to purchase shares in the open market in connection with the implementation of the plan. This feature of the plan means that, under certain circumstances, the Company may issue shares of our common stock at a price below net asset value per share, which could cause the Company’s stockholders to experience dilution.

Distributions in excess of the Company’s current and accumulated earnings and profits would generally be treated as a return of capital to the extent of a stockholder’s adjusted tax basis in its shares. If a stockholder’s tax basis is reduced to zero, the stockholder would treat any remaining distributions as a capital gain. The determination of the tax attributes of our distributions will be made annually as of the end of the fiscal year based upon the Company’s taxable income for the full year and distributions paid for the full year. Therefore, a determination made on a quarterly basis may not be representative of the actual tax attributes of our distributions for a full year. If the Company had determined the tax attributes of its 2019 distributions as of September 30, 2019, 100% would be from ordinary income, 0% would be from capital gains and 0% would be a return of capital. Each year, a statement on Form 1099-DIV identifying the source of the distribution will be mailed to the Company’s stockholders of record.

The Company may generate qualified interest income and short-term capital gains that may be exempt from United States withholding tax on foreign accounts. A regulated investment company, or RIC, is permitted to designate distributions in the form of dividends that represent interest income (commonly referred to as qualified interest income) and short-term capital gains as exempt from U.S. withholding tax when paid to non-U.S. stockholders with proper documentation.

10. Financial Highlights

	For the nine months ended September 30,
	2019			2018
Per Share Data⁽¹⁾:
Net asset value attributable to THL Credit, Inc., beginning of period	$	9.15		$	10.51
Net investment income, after taxes⁽²⁾		0.71			0.84
Net realized loss on investments⁽²⁾		(1.07	)		(1.19	)
Net change in unrealized appreciation (depreciation) on investments⁽²⁾		0.06			0.75
Benefit (provision) for taxes on unrealized gain on investments⁽²⁾		0.01			—
Net (decrease) increase in net assets resulting from operations		(0.29	)		0.40
Accretive effect of repurchase of common stock		0.10			—
Distributions to stockholders from net investment income		(0.62	)		(0.81	)
Net asset value attributable to THL Credit, Inc., end of period	$	8.34		$	10.10

Per share market value at end of period	$	6.80		$	8.07
Total return⁽³⁾⁽⁵⁾		22.75	%		(1.35	%)
Shares outstanding at end of period		30,587			32,674
Ratio/Supplemental Data:
Net assets at end of period, attributable to THL Credit Inc.	$	255,072		$	330,093
Ratio of total expenses to average net assets, attributable to THL Credit, Inc.^(4)(6)(7)		9.22	%		9.38	%
Ratio of net investment income to average net assets, attributable to THL Credit, Inc. ⁽⁶⁾⁽⁸⁾		10.70	%		10.85	%
Portfolio turnover, attributable to THL Credit, Inc.		21.38	%		9.87	%

⁽¹⁾	Includes the cumulative effect of rounding.
⁽²⁾	Calculated based on weighted average common shares outstanding.
⁽³⁾	Total return is based on the change in market price per share during the period. Total return takes into account dividends and distributions, if any, reinvested in accordance with the Company's dividend reinvestment plan.
⁽⁴⁾	For the nine months ended September 30, 2019 and 2018, the ratio components included 2.08% and 2.71% of net base management fee, 0.00% and 0.00% of net incentive fee, 5.21% and 4.63% of borrowing costs, 1.92% and 1.85% of other operating expenses, and 0.01% and 0.19% of the impact of all taxes, respectively.
⁽⁵⁾	Not annualized.
⁽⁶⁾	Annualized, except for taxes and the related impact of incentive fees.

⁽⁷⁾	Ratio of total expenses before management fee waiver to average net assets attributable to THL Credit Inc. is 9.47% for the nine months ended September 30, 2019. There was no management fee waiver during the nine months ended September 30, 2018.
⁽⁸⁾	Ratio of net investment income before management fee waiver to average net assets attributable to THL Credit Inc. is 10.45% for the nine months ended September 30, 2019. There was no management fee waived for the nine months ended September 30, 2018.

11. Stock Repurchase Program

On March 2, 2018 the Company’s board of directors authorized a $17,500 stock repurchase program, which was amended and extended on March 5, 2019 to authorize the repurchase of outstanding shares in an aggregate amount of up to $15,000. Unless extended by its board of directors, the stock repurchase program will expire on March 5, 2020 and may be modified or terminated at any time for any reason without prior notice. The Company has provided its stockholders with notice of its ability to repurchase shares of its common stock in accordance with 1940 Act requirements. The Company will retire immediately all such shares of common stock that it purchases in connection with the stock repurchase program.

The following table summarizes our share repurchases under the Company’s stock repurchase program for the three and nine months ended September 30, 2019 and 2018:

	For the three months ended September 30,					For the nine months ended September 30,
	2019			2018		2019			2018
Dollar amount repurchased⁽¹⁾	$	5,571		$	—	$	11,590		$	—
Shares repurchased		831			—		1,730			—
Average price per share (including commission)	$	6.70		$	—	$	6.70		$	—
Weighted average discount to net asset value		25.23	%		—		23.63	%		—

⁽¹⁾	Effective March 14, 2019, the Company adopted a stock trading plan in accordance with Rule 10b5-1 of the Exchange Act.

12. Subsequent Events

From October 1, 2019 through November 1, 2019, the Company repurchased 301,825 shares of stock for a total cost of $2,066 as part of a 10b5-1 Stock Repurchase Plan, which is the most recent information available to the Company as of the time at which the financial statements are issued. This brings up total shares repurchased since the Company began the 2019 stock repurchase program on March 11, 2019 to 2,031,921 shares at an aggregate cost of $13,656.

On October 31, 2019, the Company’s board of directors declared a dividend of $0.21 per share payable on December 31, 2019 to stockholders of record at the close of business on December 16, 2019.

Schedule 12-14

THL Credit, Inc. and Subsidiaries

Schedule of Investments in and Advances to Affiliates

(dollar amounts in thousands)

(unaudited)

Type of Investment/Portfolio company ^(1)(2)(9)	Principal/No.of Shares /No.of Units		Purchases		Sales			Net Realized Gain (Loss)		Net Unrealized Appreciation (Depreciation)			Dividends/ Interest Income/ Other Income		Fair Value at September 30, 2019
Control Investments
—56.16% of net asset value
Control Investments - Majority Owned
—50.23% of net asset value
First lien senior secured debt
—18.58% of net asset value
Southeast
—3.10% of net asset value
Loadmaster Derrick & Equipment, Inc. - Senior secured revolving term loan⁽³⁾ 12.4% (LIBOR+ 10.3% PIK) due 12/31/2020	$	6,801	$	1,150	$	—		$	—	$	1,050		$	—	$	7,200
Loadmaster Derrick & Equipment, Inc. - Senior secured term loan 12.6% (LIBOR + 10.3% PIK) ⁽³⁾due 12/31/2020		9,406		—		—			—		(935	)		—		728
Loadmaster Derrick & Equipment, Inc. - Senior secured term loan 14.3% (LIBOR + 12% PIK) ⁽³⁾due 12/31/2020		2,169		—		—			—		—			—		—
Subtotal Southeast	$	18,376	$	1,150	$	—		$	—	$	115		$	—	$	7,928

Southwest
—15.48% of net asset value
OEM Group, LLC - Senior secured term loan 11.5% (LIBOR+9.5%)(7.5% Cash and 4.0% PIK) due 6/30/2022	$	19,473	$	—	$	—		$	—	$	—		$	1,735	$	19,678
OEM Group, LLC - Senior secured revolving term loan 11.5% (LIBOR+9.5%)(7.5% Cash and 4.0% PIK) due 6/30/2022		9,781		4,700		—			—		(32	)		810		10,388
OEM Group, LLC - Senior secured revolving term loan 11.5% (LIBOR+9.5%)(7.5% Cash and 4.0% PIK) due 6/30/2022		9,298		—		—			—		(2	)		831		9,395
Subtotal Southwest	$	38,552	$	4,700	$	—		$	—	$	(34	)	$	3,376	$	39,461

Subtotal first lien senior secured debt	$	56,928	$	5,850	$	—		$	—	$	81		$	3,376	$	47,389

Second lien debt
—0.00% of net asset value
Southeast
—0.00% of net asset value
Copperweld Bimetallics, LLC - 12% cash due 10/5/2021	$	5,415	$	—	$	(5,415	)	$	—	$	—		$	540	$	-
Subtotal Southeast	$	5,415	$	—	$	(5,415	)	$	—	$	—		$	540	$	-

Subtotal second lien debt	$	5,415	$	—	$	(5,415	)	$	—	$	—		$	540	$	-

Equity Investments
—0.00% of net asset value

Southeast
—0.00% of net asset value
Copperweld Bimetallics, LLC ⁽⁵⁾		677	$	—	$	(4,036	)	$	535	$	(538	)	$	365	$	—
Copperweld Bimetallics, LLC ⁽⁶⁾		609,230		—		(23,014	)		16,166		(6,295	)		1,829		—
Loadmaster Derrick & Equipment, Inc. ⁽³⁾⁽⁵⁾		12,131		—		—			—		—			—		—
Loadmaster Derrick & Equipment, Inc. ⁽³⁾⁽⁶⁾		2,956		—		—			—		—			—		—
Subtotal Southeast			$	—	$	(27,050	)	$	16,701	$	(6,833	)	$	2,194	$	—

Southwest

THL Credit, Inc. and Subsidiaries

Schedule of Investments in and Advances to Affiliates

(dollar amounts in thousands)

(unaudited)

Type of Investment/Portfolio company ^(1)(2)(9)	Principal/No.of Shares /No.of Units		Purchases		Sales			Net Realized Gain (Loss)			Net Unrealized Appreciation (Depreciation)			Dividends/ Interest Income/ Other Income		Fair Value at September 30, 2019
—0.00% of net asset value
OEM Group, LLC ⁽⁶⁾		10,000	$	—	$	—		$	—		$	(1,674	)	$	—	$	—
Subtotal Southwest			$	—	$	—		$	—		$	(1,674	)	$	—	$	—

Subtotal equity investments			$	—	$	(27,050	)	$	16,701		$	(8,507	)	$	2,194	$	—

Investments in funds
—31.65% of net asset value
Northeast
—31.65% of net asset value
THL Credit Logan JV LLC ^{(4) (7)}			$	4,000	$	(3,304	)	$	—		$	(4,790	)	$	7,457	$	80,731
Subtotal investments in funds			$	4,000	$	(3,304	)	$	—		$	(4,790	)	$	7,457	$	80,731

Total Control Investments - Majority Owned			$	9,850	$	(35,769	)	$	16,701		$	(13,216	)	$	13,567	$	128,120

Control Investments - Less Than Majority Owned
—5.93% of net asset value
Equity Investments

West
—5.93% of net asset value
C&K Market, Inc. ⁽⁶⁾		1,992,365	$	—	$	—		$	—		$	(107	)	$	1,916	$	5,174
C&K Market, Inc. due 7/1/2024 ⁽⁵⁾		1,992,365		—		—			—			—			—		9,962
Subtotal West			$	—	$	—		$	—		$	(107	)	$	1,916	$	15,136

Subtotal equity investments			$	—	$	—		$	—		$	(107	)	$	1,916	$	15,136

Total Control Investments - Less Than Majority Owned			$	—	$	—		$	—		$	(107	)	$	1,916	$	15,136

Total Control Investments			$	9,850	$	(35,769	)	$	16,701		$	(13,323	)	$	15,483	$	143,256

Non-controlled, affiliated Investments
—0.00% of net asset value
First lien senior secured debt
—0.00% of net asset value
Southwest
—0.00% of net asset value
Charming Charlie LLC Senior Secured Term Loan ⁽¹⁰⁾12.6% (LIBOR+10%)(7.5% Cash and 5.0% PIK) due 4/23/2023	$	12,209	$	—	$	—		$	(11,064	)		5,215		$	—	$	—
Charming Charlie LLC Senior Secured Term Loan ⁽¹⁰⁾12.6% (LIBOR+10%)(3.5% Cash and 9.0% PIK) due 4/23/2023		14,949		—		—			(13,554	)		8,001			—		—
Charming Charlie LLC Senior Secured Term Loan⁽¹⁰⁾20% Cash Due 5/15/19		671		—		—			(34	)		—			154		—
Charming Charlie LLC Senior Secured Delayed Draw Term Loan ⁽¹⁰⁾due 5/15/2019		—		—		—			—			—			—		—
Charming Charlie LLC Senior Secured Delayed Draw Term Loan ⁽¹⁰⁾due 5/15/2019		—		3,802		—			—			—			—		—
Subtotal Southwest	$	27,829	$	3,802	$	—		$	(24,652	)	$	13,216		$	154	$	—

Subtotal first lien senior secured debt	$	27,829	$	3,802	$	—		$	(24,652	)	$	13,216		$	154	$	—

Equity Investments
—0.00% of net asset value
Southwest

THL Credit, Inc. and Subsidiaries

Schedule of Investments in and Advances to Affiliates

(dollar amounts in thousands)

(unaudited)

Type of Investment/Portfolio company ^(1)(2)(9)	Principal/No.of Shares /No.of Units		Purchases		Sales			Net Realized Gain (Loss)			Net Unrealized Appreciation (Depreciation)			Dividends/ Interest Income/ Other Income		Fair Value at September 30, 2019
—0.00% of net asset value
Charming Charlie LLC ⁽⁶⁾		128,307,716	$	—	$	—		$	—			(464	)	$	—	$	—
Subtotal Southwest			$	—	$	—		$	—		$	(464	)	$	—	$	—

Subtotal equity investments			$	—	$	—		$	—		$	(464	)	$	—	$	—

Investments in funds
—0.00% of net asset value
Northeast
—0.00% of net asset value
THL Credit Greenway Fund LLC ^{(4) (8)}			$	—	$	—		$	—		$	—		$	35	$	1
THL Credit Greenway Fund II LLC ^{(4) (8)}				—		—			—			-			361		3
Subtotal Northeast			$	—	$	—		$	—		$	-		$	396	$	4

Subtotal investments in funds			$	—	$	—		$	—		$	-		$	396	$	4

Total Affiliate Investments			$	3,802	$	—		$	(24,652	)	$	12,752		$	550	$	4

Total Control and Affiliate Investments—— 56.16% of net asset value			$	13,652	$	(35,769	)	$	(7,951	)	$	(571	)	$	16,033	$	143,260

⁽¹⁾	The principal amount and ownership detail as shown in the Consolidated Schedule of Investments as of September 30, 2019. Unless otherwise noted, all investments are valued using significant unobservable inputs.
⁽²⁾	Variable interest rate investments bear interest in reference to London Interbank offer rate, or LIBOR, Canadian Dollar offer rate, or CDOR, or Alternate Base Rate, or ABR, which are effective as of September 30, 2019. LIBOR loans and CDOR loans are typically indexed to 30-day, 90-day or 180-day LIBOR, at the borrower’s option, and ABR rates are typically indexed to the current prime rate or federal funds rate. Each of LIBOR and ABR rates may be subject to interest floors. As of September 30, 2019, the 30-day, 90-day and 180-day LIBOR rates were 2.01%, 2.09%, and 2.06%, respectively.
⁽³⁾	Loan was on non-accrual as of September 30, 2019.
⁽⁴⁾	Investment is measured at fair value using net asset value.
⁽⁵⁾	Preferred Stock.
⁽⁶⁾	Common stock and member interest.
⁽⁷⁾	Together with Perspecta Trident LLC, or Perspecta, an affiliate of Perspecta Trust LLC, the Company invests in THL Credit Logan JV LLC, of Logan JV. Logan JV is capitalized through equity contributions from its members and investment decisions must be unanimously approved by the Logan JV investment committee consisting of one representative from each of the Company and Perspecta.
⁽⁸⁾	Income includes certain fees relating to investment management services provided by the Company, including a base management fee, a performance fee and a portion of the closing fees on each investment transaction.
⁽⁹⁾	All debt investments are income-producing, unless otherwise noted. Equity and member interests are non-income-producing unless otherwise noted. The Company generally acquires its investments in private transactions exempt from registration under the Securities Act of 1933, as amended, or the Securities Act. Its investments are therefore generally subject to certain limitations on resale, and may be deemed to be “restricted securities” under the Securities Act.
⁽¹⁰⁾	On July 11, 2019, Charming Charlie LLC filed for Chapter 11 bankruptcy protection in Delaware with plans to liquidate the company and any of its remaining assets. In connection with the liquidation, the investment was removed from Investments, at fair value and reflected $4.4 million of the expected liquidation proceeds as Escrow and other receivable on the Consolidated Statements of Assets and Liabilities as of September 30, 2019. As of the reporting date, Charming Charlie LLC has ceased its operations and has been actively liquidating its assets. The Company expects to collect its share of liquidation proceeds in the near term.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The information contained in this section should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this report and the Annual Report on Form 10-K for the year ended December 31, 2018. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results could differ materially from those contained in or implied by the forward-looking statements. See “Cautionary Statement Regarding Forward-Looking Statements” following the Table of Contents for further information regarding forward-looking statements. Certain amounts and percentages in this discussion and analysis have been rounded for convenience of presentation. Unless otherwise noted, the figures in the following discussions are unaudited.

Overview

THL Credit, Inc., or we, us, our or the Company, was organized as a Delaware corporation on May 26, 2009 and initially funded on July 23, 2009. We commenced principal operations on April 21, 2010. Our investment objective is to generate both current income and capital appreciation, primarily through investments in privately negotiated investments in debt and equity securities of middle market companies.

As of September 30, 2019, we, together with our credit-focused affiliates, collectively had $16.8 billion of assets under management. This amount included our assets, assets of the managed funds and a separate account managed by us, and assets of the collateralized loan obligations (CLOs), separate accounts and various fund formats, including any uncalled commitments of private funds, as managed by the investment professionals of the Advisor or its consolidated subsidiary.

We are a direct lender to middle market companies and invest primarily in directly originated first lien senior secured loans, including unitranche investments. In certain instances, we also make second lien, subordinated, or mezzanine, debt investments, which may include an associated equity component such as warrants, preferred stock or other similar securities and direct equity investments. Our first lien senior secured loans may be structured as traditional first lien senior secured loans or as unitranche loans. Unitranche structures combine characteristics of traditional first lien senior secured as well as second lien and subordinated loans and our unitranche loans will expose us to the risks associated with second lien and subordinated loans to the extent we invest in the “last-out” tranche or subordinated tranche (or piece) of the unitranche loan. We may also provide advisory services to managed funds.

We are an externally managed, non-diversified, closed-end investment company that has elected to be regulated as a business development company, or BDC, under the Investment Company Act of 1940 Act, as amended, or the 1940 Act. As a BDC, we are required to comply with certain regulatory requirements. For instance, we generally have to invest at least 70% of our total assets in “qualifying assets,” including securities of private or thinly traded public U.S. companies, cash, cash equivalents, U.S. Government securities and high-quality debt investments that mature in one year or less.

As a BDC, we must not acquire any assets other than “qualifying assets” specified in the 1940 Act unless, at the time the acquisition is made, at least 70% of our total assets are qualifying assets (with certain limited exceptions). Qualifying assets include investments in “eligible portfolio companies.” Under the relevant U.S. Securities and Exchange Commission, or SEC, rules the term “eligible portfolio company” includes all private companies, companies whose securities are not listed on a national securities exchange, and certain public companies that have listed their securities on a national securities exchange and have a market capitalization of less than $250 million, in each case organized in the United States.

We are also registered as an investment adviser under the Investment Advisers Act of 1940, as amended.

Since April 2010, after we completed our initial public offering and commenced principal operations, through September 30, 2019, we have been responsible for making, on behalf of ourselves, our managed funds and separately managed account, over $2.2 billion in aggregate commitments into 117 separate portfolio companies through a combination of both initial and follow-on investments. Since April 2010 through September 30, 2019, we, along with our managed funds and separately managed account, have received $1.6 billion of gross proceeds from the realization of investments. We alone have received $1.4 billion of gross proceeds from the realization of our investments during this same time period. As of September 30, 2019, our managed funds, THL Credit Greenway, LLC, or Greenway, and THL Credit Greenway II, LLC, or Greenway II, and its separately managed account, collectively Greenway II, have received $189.5 million, or 126.3% of committed capital, and $178.2 million, or 95.3% of the committed capital, respectively.

We have elected to be treated for tax purposes as a regulated investment company, or RIC, under Subchapter M of the Internal Revenue Code of 1986, as amended, or the Code. To qualify as a RIC, we must, among other things, meet certain source of income and asset diversification requirements. As a RIC, we generally will not have to pay corporate-level income taxes on any income we distribute to our stockholders.

Portfolio Composition and Investment Activity

Portfolio Composition

As of September 30, 2019, we had $403.5 million of portfolio investments (at fair value), which represents a $90.2 million, or 18.3% decrease from the $493.7 million (at fair value) as of December 31, 2018. Our portfolio consisted of 47 investments, including Greenway, and Greenway II, as of September 30, 2019, compared to 42 portfolio investments, including Greenway and Greenway II, as of December 31, 2018. The decrease in fair value of our portfolio is largely attributed to portfolio contraction. As of September 30, 2019, we had $143.3 million of controlled portfolio investments (at fair value) in four portfolio companies, which represents a $24.4 million, or 14.5%, decrease from $167.7 million (at fair value) as of December 31, 2018 in five portfolio companies. The decrease in controlled portfolio companies was largely the result of a realization of Copperweld Bimetallics LLC. Our average controlling equity position at September 30, 2019 was approximately $42.5 million and $35.8 million at cost and fair value, respectively. Our investment in THL Credit Logan JV LLC (the “Logan JV”) represented 20.0% and 17.2% of our portfolio investments at fair value as of September 30, 2019 and December 31, 2018, respectively. Going forward, we intend to limit new investments in new portfolio companies to 2.5% of our investment portfolio based upon the most recent fair market value.

The following table shows certain portfolio highlights based on cost and fair value (in millions).

	As of
	September 30, 2019				December 31, 2018
	Cost		Fair Value		Cost		Fair Value
Largest portfolio company investment - Logan JV	$	93.1	$	80.7	$	92.4	$	84.8
Largest portfolio company investment - excluding Logan JV, Greenway I and II, investments where we hold controlling equity position and investments where we hold equity only		26.3		24.3		34.0		26.6
Average portfolio company investment - excluding Logan JV, Greenway I and II, investments where we hold controlling equity position and investments where we hold equity only		8.1		7.7		11.7		10.6
Total investments where we hold controlling equity position and investments where we hold equity only, including Greenway I and II		85.7		69.9		95.4		114.4

At September 30, 2019, based upon fair value, 97.7% of our debt investments bore interest based on floating rates, which may be subject to interest rate floors, such as LIBOR, and 2.3% bore interest at fixed rates. At December 31, 2018, 96.5% of our debt investments bore interest based on floating rates, which may be subject to interest rate floors, such as LIBOR and CDOR, and 3.5% bore interest at fixed rates.

The following table shows the weighted average yield by investment category at their current cost.

	As of
Description:	September 30, 2019			December 31, 2018
First lien senior secured debt ⁽¹⁾		9.5	%		10.1	%
Second lien debt		12.3	%		12.7	%
Subordinated debt		16.5	%		16.5	%
Income-producing equity securities ⁽²⁾		0.0	%		9.6	%
Debt and income-producing investments ⁽¹⁾⁽³⁾		9.9	%		10.4	%
Logan JV ⁽⁴⁾		10.7	%		12.0	%
All investments including Logan JV ⁽¹⁾⁽⁴⁾		10.1	%		10.7	%

⁽¹⁾	Includes all loans on non-accrual status.

⁽²⁾	Includes income from debt-like equity securities where there is a stated rate and amounts are due on a fixed payment schedule. At September 30, 2019, there is one debt-like income-producing security which we do not expect to collect stated income on.

⁽³⁾	Includes yields on controlled investments, but excludes the yield on the Logan JV.

⁽⁴⁾

As of September 30, 2019 and December 31, 2018, the dividend declared and earned of $9.8 million and $9.8 million for the last twelve months, represented a yield to us of 10.7% and 14.2%, respectively, based on average capital invested. We expect the dividend yield to fluctuate as a result of the timing of additional capital invested, the changes in asset yields in the underlying portfolio and the overall performance of the Logan JV investment portfolio.

The weighted average yield of our debt investments is not the same as a return on investment for our stockholders but, rather, relates to a portion of our investment portfolio and is calculated before the payment of our fees and expenses. The weighted average yield was computed using the effective interest rates as of September 30, 2019, including accretion of original issue discount and loan origination fees. This weighted average yield reflects the impact of loans on non-accrual status. There can be no assurance that the weighted average yield will remain at its current level. As of September 30, 2019 and December 31, 2018, 1.5% and 1.9%, respectively, of our investment portfolio at fair value was comprised of non-income producing equity and warrant investments. We intend to continue to further reduce our non-income producing investments in 2019 and beyond. No assurance can be given that we will be successful in achieving this target.

In evaluating our portfolio performance, among other factors, we consider portfolio companies’ EBITDA and leverage as an investment metric. As of September 30, 2019 and December 31, 2018, portfolio investments, in which we have debt investments, had a median adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, of approximately $13.9 million and $9.0 million, respectively, based on the latest available financial information provided by the portfolio companies for each of these periods. As of September 30, 2019 and December 31, 2018, our median attachment point in the capital structure of our debt investments in portfolio companies is approximately 4.5 times and 4.8 times the portfolio company’s EBITDA, respectively, based on our latest available financial information for each of these periods.

We expect the percent of our portfolio investments in the companies not owned by a private equity sponsor, or unsponsored investments, to decrease over time as we work through restructurings, which may include providing additional liquidity through revolving loans, and ultimately exit our unsponsored investments. However, these portfolio investments may require follow-on capital as we work through restructurings, which will increase our exposure to these investments. Going forward, we expect unsponsored investments we make, if any, would only be in first lien senior secured investments. As of September 30, 2019, our portfolio of unsponsored debt investments included two investments, excluding our investment in Wheels Up Partners, LLC, which is a non-income producing equity security. One unsponsored investment is performing above our expectations and has an Investment Score of 1. The other unsponsored investment has an Investment Score of 3. As of December 31, 2018, our portfolio of unsponsored debt investments included three investments, excluding our investment in Wheels Up Partners, LLC, which is a non-income producing equity security. Two were performing at or above our expectations and have an Investment Score of 1 or 2. The other unsponsored investment had an Investment Score of 3.

As of September 30, 2019, we have closed portfolio investments with 70 different sponsors since inception. As of December 31, 2018, we had closed portfolio investments with 67 different sponsors since inception.

The following table summarizes sponsored and unsponsored investments based on amortized cost and fair value (in millions).

	As of September 30, 2019							As of December 31, 2018
	Amortized Cost		Fair Value		Fair Value as % of Total			Amortized Cost		Fair Value		Fair Value as % of Total
Sponsored Investments ⁽¹⁾	$	291.6	$	265.1		82.1	%	$	371.8	$	329.5		80.6	%
Unsponsored Investments ⁽¹⁾	62.5		57.7			17.9	%	75.5		79.4			19.4	%
Total	$	354.1	$	322.8		100.0	%	$	447.3	$	408.9		100.0	%

⁽¹⁾	Excludes THL Credit Greenway Fund I LLC, THL Credit Greenway Fund II LLC, and THL Credit Logan JV LLC.

The following table summarizes the amortized cost and fair value of investments as of September 30, 2019 (in millions).

Description	Amortized Cost		Percentage of Total			Fair Value ⁽¹⁾		Percentage of Total
First lien senior secured debt	$	285.8		63.9	%	$	270.1		67.0	%
Investment in Logan JV		93.1		20.8	%		80.7		20.0	%
Equity investments		33.9		7.6	%		21.4		5.3	%
Second lien debt		20.9		4.7	%		20.8		5.1	%
Subordinated debt		9.9		2.2	%		6.9		1.7	%
Investments in funds		3.4		0.8	%		3.6		0.9	%
Warrants		0.2		0.0	%		-		0.0	%
Total investments	$	447.2		100.0	%	$	403.5		100.0	%

⁽¹⁾	All investments are categorized as Level 3 in the fair value hierarchy, except for investments in funds and the Logan JV, which are excluded from the fair value hierarchy in accordance with ASU 2015-07. These assets are valued at net asset value.

The following table summarizes the amortized cost and fair value of investments as of December 31, 2018 (in millions).

Description	Amortized Cost		Percentage of Total			Fair Value ⁽¹⁾		Percentage of Total
First lien senior secured debt	$	361.8		67.1	%	$	329.4		66.8	%
Investment in Logan JV		92.4		17.1	%		84.8		17.2	%
Equity investments		46.2		8.6	%		43.5		8.8	%
Second lien debt		26.2		4.9	%		25.3		5.1	%
Subordinated debt		9.4		1.7	%		6.6		1.3	%
Investments in funds		3.4		0.6	%		3.5		0.7	%
Warrants		0.2		0.0	%		0.6		0.1	%
Total investments	$	539.6		100.0	%	$	493.7		100.0	%

⁽¹⁾	All investments are categorized as Level 3 in the fair value hierarchy, except for investments in funds and the Logan JV, which are excluded from the fair value hierarchy in accordance with ASU 2015-07. These assets are valued at net asset value.

We expect the percent of our core assets, which we define as first lien senior secured loans and the Logan JV, to continue to increase as a percent of total investments as we exit non-qualifying BDC assets as defined under the 1940 Act and our controlled equity investments, through sales or repayments, and redeploy these proceeds. We intend to continue our efforts to reposition the portfolio towards these core assets, which we believe will reduce our exposure to portfolio company risks and potential changes in interest rates.

The following is a summary of the industry classification in which we invest as of September 30, 2019 (in millions).

Industry	Amortized Cost		Fair Value		% of Total Portfolio			% of Net Assets
Investment funds and vehicles	$	93.1	$	80.7		20.01	%		31.66	%
Healthcare		75.6		75.3		18.66	%		29.51	%
Consumer products and services		65.8		59.8		14.80	%		23.42	%
Industrials and manufacturing		58.1		46.4		11.49	%		18.18	%
Business services		34.4		34.8		8.63	%		13.65	%
Energy / utilities		47.4		31.1		7.71	%		12.20	%
IT services		29.2		27.5		6.82	%		10.79	%
Financial services		23.9		24.2		6.00	%		9.49	%
Retail & grocery		13.2		15.1		3.75	%		5.93	%
Media, entertainment and leisure		5.5		5.5		1.36	%		2.16	%
Transportation		1.0		3.1		0.77	%		1.22	%
Total Investments	$	447.2	$	403.5		100.00	%		158.21	%

The following is a summary of the industry classification in which we invest as of December 31, 2018 (in millions).

Industry	Amortized Cost		Fair Value		% of Total Portfolio			% of Net Assets
Industrials and manufacturing	$	104.6	$	94.3		19.09	%		31.86	%
Investment funds and vehicles		92.4		84.8		17.18	%		28.69	%
Consumer products and services		74.9		69.1		14.00	%		23.37	%
Healthcare		62.5		60.2		12.20	%		20.37	%
IT services		52.4		50.4		10.21	%		17.05	%
Energy / utilities		46.5		37.1		7.51	%		12.53	%
Financial services		43.1		42.9		8.68	%		14.49	%
Retail & grocery		38.5		27.8		5.63	%		9.40	%
Business services		18.3		18.5		3.76	%		6.27	%
Media, entertainment and leisure		5.4		5.5		1.11	%		1.86	%
Transportation		1.0		3.1		0.63	%		1.06	%
Total Investments	$	539.6	$	493.7		100.00	%		166.95	%

Investment Activity

The following is a summary of our investment activity, presented on a cost basis, for the three and nine months ended September 30, 2019 and 2018 (in millions).

	Three months ended September 30,						Nine months ended September 30,
		2019			2018			2019			2018
New portfolio investments	$	11.5		$	11.7		$	57.2		$	11.7
Existing portfolio investments:
Follow-on investments ^{(1) (2)}		3.8			4.6			31.5			30.3
Delayed draw and revolver investments ⁽¹⁾		3.9			3.9			10.9			14.5
Total existing portfolio investments		7.7			8.5			42.4			44.8
Total portfolio investment activity	$	19.2		$	20.2		$	99.6		$	56.5
Number of new portfolio investments		2			2		12				2
Number of follow-on investments		9			6		13				9
First lien senior secured debt	$	19.2		$	15.4		$	95.4		$	34.1
Investment in Logan JV		—			4.0			4.0			21.6
Equity investments		—			0.8			0.2			0.8
Total portfolio investments	$	19.2		$	20.2		$	99.6		$	56.5
Weighted average yield of new debt investments ⁽³⁾		8.5	%		8.5	%		7.8	%		8.4	%
Weighted average yield, including all new income-producing investments		8.5	%		9.5	%		8.4	%		10.4	%

⁽¹⁾	Includes follow-on investments in controlled investments. Refer to Schedule 12-14 for additional detail.

⁽²⁾	Includes follow-on investments in Logan JV.

For the three and nine months ended September 30, 2019, we had prepayments and sales of our investments, including any prepayment premiums, totaling $67.5 million and $152.3 million, respectively. For the three and nine months ended September 30, 2018, we had prepayments and sales of our investments, including any prepayment premiums, totaling $45.4 million and $115.5 million, respectively. Please refer to “Results of Operations- Net Realized Gains and Losses on Investments, net of income tax provision” for additional details surrounding certain investments that were sold.

The following are proceeds received from notable prepayments, sales and other activity related to our investments (in millions):

For the nine months ended September 30, 2019

•

Sale of a first lien senior secured term loan in Alex Toys, LLC with proceeds received of $7.7 million;

•

Repayment of a first lien senior secured term loan in Anexinet Corp, which resulted in proceeds received of $16.5 million, including a prepayment premium of $0.2 million;

•

Repayment of a first lien senior secured term loan in Hart Intercivic, Inc at par, which resulted in proceeds received of $24.7 million;

•

Repayment of a second lien senior secured term loan in connection with a sale of the controlling common and preferred equity in Copperweld Bimetallics, LLC with total proceeds received of $32.5 million and additional escrow receivable accrual of $2.1 million;

•

Sale of a first lien senior secured term loan in Home Partners of America, Inc. with proceeds received of $7.7 million, and

•

Repayment of a first lien senior secured term loan in Fairstone Financial Inc., which resulted in proceeds received of $15.4 million, including a $0.2 million prepayment premium;

•

Repayment of the first lien senior secured term loans in LAI International, Inc., which resulted in proceeds received of $16.8 million and an additional $4.4 million in expected proceeds reflected as a receivable;

•

Repayment of a first lien senior secured term and revolving loans in Sciens Building Solutions LLC at par, which resulted in total proceeds received of $11.0 million.

For the nine months ended September 30, 2018

•

Repayment of a subordinated term loan and realization of preferred equity interest in A10 Capital, LLC, which resulted in proceeds of $26.6 million, including a prepayment premium of $0.3 million;

•

Partial repayment of a first lien senior secured term loan in Alex Toys, LLC, which resulted in proceeds of $15.0 million;

•

Repayment of a senior secured term loan and senior secured delayed draw term loan in BeneSys Inc, which resulted proceeds of $11.1 million;

•

Repayment of a first lien senior secured term loan in Dodge Data & Analytics LLC, which resulted in proceeds of $10.2 million;

•

Partial sale of a first lien senior secured term loan in Fairstone Financial Inc., which resulted in proceeds of $7.7 million;

•

Repayment of a second lien term loan in Gold, Inc., which resulted in proceeds of $5.2 million;

•

Partial repayment of a first lien senior secured term loan in Home Partners of America, Inc., which resulted in proceeds of $5.9 million;

•

Repayment of a first lien senior secured term loan in The John Gore Organization, Inc., which resulted in proceeds of $13.8 million, including a prepayment premium of $0.1 million;

•

Sale of a second lien term loan in Specialty Brands Holdings, LLC, which resulted in proceeds received of $0.4 million;

•

Repayment of a first lien senior secured term loan and revolver in Togetherwork Holdings, LLC, which resulted in proceeds of $5.7 million, including a prepayment premium of $0.1 million, and

•

Sale of a first lien senior secured term loan, subordinated term loans, preferred equity and common equity in Aerogroup International Inc., which resulted in proceeds received of $2.5 million and $8.0 million recorded as an initial escrow receivable, at the time of sale.

Our level of investment activity can vary substantially from period to period depending on many factors, including the amount of debt and equity capital available to middle market companies, the level of merger and acquisition activity, the general economic environment and the competitive environment for the types of investments we make. The frequency and volume of any prepayments may fluctuate significantly from period to period.

Aggregate Cash Flow Realized Gross Internal Rate of Return

For the period from April 2010, when we completed our initial public offering and commenced principal operations, through September 30, 2019, our fully exited investments have resulted in an aggregate cash flow realized gross internal rate of return to us of 11.3% (based on cash invested of $1.4 billion and total proceeds from these exited investments of $1.7 billion). 83.7% of these exited investments resulted in an aggregate cash flow realized gross internal rate of return to us of 10% or greater. Internal rate of return, or IRR, is a measure of our discounted cash flows (inflows and outflows). Specifically, IRR is the discount rate at which the net present value of all cash flows is equal to zero. That is, IRR is the discount rate at which the present value of total cash invested in our investments is equal to the present value of all realized returns from the investments. Our IRR calculations are unaudited.

Investment Risk

The value of our investments will generally fluctuate with, among other things, changes in prevailing interest rates, federal tax rates, counterparty risk, general economic conditions, the condition of certain financial markets, developments or trends in any particular industry and the financial condition of the issuer. During periods of limited liquidity and higher price volatility, our ability to dispose of investments at a price and time that we deem advantageous may be impaired.

Lower-quality debt securities involve greater risk of default or price changes due to changes in the credit quality of the issuer. The value of lower-quality debt securities often fluctuates in response to company, political, or economic developments and can decline significantly over short periods of time or during periods of general or regional economic difficulty. Lower-quality debt securities can be thinly traded or have restrictions on resale, making them difficult to sell at an acceptable price. The default rate for lower-quality debt securities is likely to be higher during economic recessions or periods of high interest rates.

Logan JV

On December 3, 2014, we entered into an agreement with Perspecta Trident LLC, an affiliate of Perspecta Trust LLC, or Perspecta, to the Logan JV, a joint venture, which invests primarily in senior secured first lien term loans. All Logan JV investment decisions must be unanimously approved by the Logan JV investment committee consisting of one representative from each of us and Perspecta.

Logan JV is an investment company under ASC 946, however, in accordance with such guidance, we will generally not consolidate our investment in a company other than a substantially owned investment company subsidiary or a controlled operating company whose business consists of providing services to us. Accordingly, we do not consolidate our non-controlling interest in Logan JV.

Logan JV is capitalized with equity contributions which are generally called from its members, on a pro-rata basis based on their equity commitments, as transactions are completed. Any decision by the Logan JV to call down on capital commitments requires the explicit authorization of us, coupled with that of Perspecta, and we may withhold such authorization for any reason in our sole discretion.

As of September 30, 2019 and December 31, 2018, Logan JV had the following commitments, contributions and unfunded commitments from its members (in millions).

	As of September 30, 2019
Member	Total Commitments		Contributed Capital ⁽¹⁾		Unfunded Commitments
THL Credit, Inc.	$	200.0	$	96.6	$	103.4
Perspecta Trident LLC		50.0		24.2		25.8
Total Investments	$	250.0	$	120.8	$	129.2

(1)	Includes $3.2 of non-recallable return of capital for THL Credit, Inc. and $0.8 non-recallable return of capital for Perspecta Trident LLC

	As of December 31, 2018
Member	Total Commitments		Contributed Capital		Unfunded Commitments
THL Credit, Inc.	$	200.0	$	92.6	$	107.4
Perspecta Trident LLC		50.0		23.2		26.8
Total Investments	$	250.0	$	115.8	$	134.2

Logan JV has a senior credit facility, or the Logan JV Credit Facility, with Deutsche Bank AG and other banks. As of September 30, 2019 and December 31, 2018, the Logan JV Credit Facility had $275.0 million of commitments, which are subject to leverage and borrowing base restrictions with an interest rate of three month LIBOR (with no LIBOR floor) plus 2.20%. The final maturity date of the Logan JV Credit Facility is January 12, 2023 with the revolving loan period ending on January 12, 2021. As of September 30, 2019 and December 31, 2018, Logan JV had $234.0 million and $241.7 million of outstanding borrowings under the credit facility, respectively. At September 30, 2019, the effective interest rate on the Logan JV Credit Facility was 4.58% per annum.

As of September 30, 2019 and December 31, 2018, Logan JV had total investments at fair value of $335.2 million and $329.8 million, respectively. As of September 30, 2019 and December 31, 2018, Logan JV’s portfolio was comprised of senior secured first lien and second lien loans to 132 and 130 different borrowers, respectively. As of September 30, 2019, one loan in Logan JV’s portfolio was on non-accrual status with an amortized cost of $2.4 million and fair value of $1.4 million. As of December 31, 2018, there were no loans on non-accrual status. As of September 30, 2019 and December 31, 2018, Logan JV had unfunded commitments to fund revolver and delayed draw loans to its portfolio companies totaling $4.1 million and $4.3 million, respectively. The portfolio companies in Logan JV’s portfolio are in industries similar to those in which we would invest directly.

Below is a summary of Logan JV’s portfolio, followed by a listing of the individual loans in Logan JV’s portfolio as of September 30, 2019 and December 31, 2018 (dollar amounts in thousands):


	As of September 30, 2019			As of December 31, 2018
First lien secured debt, at par	$	341,215		$	327,574
Second lien debt, at par		10,629			16,962
Total debt investments, at par	$	351,844		$	344,536
Weighted average yield on first lien secured loans ⁽¹⁾		6.9	%		7.2	%
Weighted average yield on second lien loans⁽¹⁾		10.0	%		10.4	%
Weighted average yield on all loans⁽¹⁾		7.0	%		7.4	%
Number of borrowers in Logan JV		132			130
Largest loan to a single borrower ⁽²⁾	$	5,009		$	5,101
Total of five largest loans to borrowers ⁽²⁾	$	24,997		$	25,001

⁽¹⁾	Weighted average yield at their current cost.

⁽²⁾	At current principal amount.

The weighted average yield of Logan JV’s debt investments is not the same as a return on Logan JV investment for our stockholders but, rather, relates to a portion of our investment portfolio and is calculated before the payment of our expenses. The weighted average yield was computed using the effective interest rates as of September 30, 2019 and December 31, 2018, respectively, but excluding the effective rates on investments on non-accrual status, if any. There can be no assurance that the weighted average yield will remain at its current level.

For the three and nine months ended September 30, 2019, our share of income from distributions declared related to our Logan JV LLC equity interest was $2.4 million and $7.6 million, respectively, which amounts are included in dividend income from controlled investments in the Consolidated Statement of Operations and reduction of cost basis on the Consolidated Statement of Assets and Liabilities. For the three and nine months ended September 30, 2018, our share of income from distributions declared related to our Logan JV LLC equity interest was $2.6 million and $7.4 million, respectively, which amounts are included in dividend income and realized gains from controlled investments in the Consolidated Statements of Operations. As of September 30, 2019 and December 31, 2018, $2.7 million and $2.4 million, respectively, of income related to the Logan JV was included in interest, dividends and fees receivable on the Consolidated Statements of Assets and Liabilities. As of September 30, 2019, the distributions declared and earned of $9.8 million for the twelve months ended September 30, 2019, represented a dividend yield to us of 10.7% based upon average capital invested. As of December 31, 2018, $9.8 million for the twelve months ended December 31, 2018, represented a dividend yield to us of 12.0% based upon average capital invested. As of September 30, 2019 and December 31, 2018, $0.3 million and $0.2 million, respectively, of return of capital associated with distributions declared was included in the Distributions receivable on our Consolidated Statements of Assets and Liabilities. We expect the dividend yield to fluctuate as a result of the timing of additional capital invested, the changes in asset yields in the underlying portfolio and the overall performance of the Logan JV investment portfolio.

Logan JV Loan Portfolio as of September 30, 2019

(dollar amounts in thousands)

Type of Investment/ Portfolio company⁽¹²⁾	Industry	Interest Rate ⁽¹⁾	Initial Acquisition Date	Maturity Date	Principal		Amortized Cost		Fair Value ⁽²⁾
Senior Secured First Lien Term Loans
Canada
Avison Young Canada Inc.	Services: Business	7.33% (LIBOR +5%)	03/07/2019	02/01/2026		3,474	$	3,409	$	3,413
PNI Canada Acquireco Corp	High Tech Industries	6.61% (LIBOR +4.5%)	10/31/2018	10/31/2025		1,720		1,712		1,717

Total Canada							$	5,121	$	5,130

Germany
Rhodia Acetow	Consumer goods: Non-Durable	8.15% (LIBOR +5.5%)	04/21/2017	05/31/2023		978	$	969	$	932
VAC Germany Holding GmbH	Metals & Mining	6.33% (LIBOR +4%)	02/26/2018	02/26/2025		2,955		2,943		2,911
Total Germany							$	3,912	$	3,843

Luxembourg
Travelport Finance	Services: Consumer	7.54% (LIBOR +5%)	03/18/2019	05/30/2026		3,000	$	2,943	$	2,725
Total Luxembourg							$	2,943	$	2,725

United Kingdom
Auxey Bidco Ltd.	Services: Consumer	7.05% (LIBOR +5%)	08/07/2018	08/07/2025		5,000	$	4,828	$	4,800
EG Group	Retail	6.33% (LIBOR +4%)	03/23/2018	02/07/2025		2,824		2,813		2,797

Total United Kingdom							$	7,641	$	7,597

United States of America
1A Smart Start LLC	Services: Consumer	6.83% (LIBOR +4.5%)	08/28/2015	02/21/2022		4,313	$	4,301	$	4,313
A Place for Mom Inc	Media: Advertising, Printing & Publishing	5.86% (LIBOR +3.75%)	07/28/2017	08/10/2024		3,920		3,906		3,862
A10 Capital, LLC	Banking, Finance, Insurance & Real Estate	8.53% (LIBOR +6.5%)	04/25/2018	04/27/2023		5,000		4,964		4,926
Achilles Acquisition LLC	Banking, Finance, Insurance & Real Estate	6.13% (LIBOR +4%)	10/04/2018	10/03/2025		3,980		3,971		3,988
Advanced Computer Software	High Tech Industries	6.79% (LIBOR +4.75%)	05/25/2018	05/31/2024		1,485		1,482		1,488
Advanced Integration Technology LP	Aerospace & Defense	6.86% (LIBOR +4.75%)	07/15/2016	04/03/2023		1,940		1,929		1,918
Advisor Group Holdings Inc	Banking, Finance, Insurance & Real Estate	7.11% (LIBOR +5%)	07/31/2019	07/31/2026		1,714		1,697		1,683
AG Parent Holdings LLC	High Tech Industries	7.26% (LIBOR +5%)	07/30/2019	07/31/2026		2,667		2,641		2,663
AgroFresh Inc.	Chemicals, Plastics & Rubber	7.37% (LIBOR +4.75%)	12/01/2015	07/31/2021		1,920		1,915		1,795
Air Medical Group Holdings Inc	Healthcare & Pharmaceuticals	6.36% (LIBOR +4.25%)	09/26/2017	03/14/2025		2,211		2,198		2,076
Alcami Carolinas Corp	Healthcare & Pharmaceuticals	6.36% (LIBOR +4.25%)	07/09/2018	07/06/2025		3,960		3,943		3,722
Alchemy US Holdco 1 LLC	Chemicals, Plastics & Rubber	7.56% (LIBOR +5.5%)	10/01/2018	10/10/2025		1,963		1,937		1,943
AMCP Clean Acquisition Co LLC	Wholesale	6.58% (LIBOR +4.25%)	07/10/2018	07/10/2025		2,389		2,379		2,365
AMCP Clean Acquisition Co LLC	Wholesale	6.58% (LIBOR +4.25%)	07/10/2018	07/10/2025		578		576		572
American Sportsman Holdings Co	Retail	7.11% (LIBOR +5%)	11/22/2016	09/25/2024		3,920		3,882		3,783
Ansira Holdings, Inc. ⁽³⁾	Media: Diversified & Production	7.86% (LIBOR +5.75%)	04/17/2018	12/20/2022		610		402		342
Ansira Holdings, Inc.	Media: Diversified & Production	7.86% (LIBOR +5.75%)	12/20/2016	12/20/2022		1,836		1,826		1,652
AP Gaming I LLC	Hotel, Gaming & Leisure	5.61% (LIBOR +3.5%)	06/06/2016	02/15/2024		2,444		2,440		2,437
APC Aftermarket	Automotive	7.18% (LIBOR +5%)	05/09/2017	05/10/2024		489		482		372
APFS Staffing Holdings Inc	Services: Consumer	7.06% (LIBOR +5%)	04/04/2019	04/10/2026		1,995		1,957		1,988

Logan JV Loan Portfolio as of September 30, 2019

(dollar amounts in thousands)

Type of Investment/

Portfolio company⁽¹²⁾

Industry

Interest Rate ⁽¹⁾

Initial

Acquisition

Date

Maturity

Date

Principal

Amortized

Cost

Fair

Value ⁽²⁾

AQA Acquisition Holding, Inc

High Tech Industries

6.58% (LIBOR +4.25%)

10/01/2018

05/24/2023

1,980

1,970

Ascend Performance Materials Operations LLC

Chemicals, Plastics & Rubber

7.4% (LIBOR +5.25%)

08/16/2019

08/27/2026

1,150

1,127

1,156

ATI Merger Sub Inc.

Healthcare & Pharmaceuticals

6.7% (LIBOR +4.5%)

12/19/2018

12/05/2025

4,301

4,262

4,279

Avaya Inc

Telecommunications

6.43% (LIBOR +4.25%)

11/09/2017

12/15/2024

2,568

2,548

2,447

Axiom Global Inc ⁽¹⁰⁾

Services: Business

6.84% (LIBOR +4.75%)

09/25/2019

09/25/2026

3,000

2,970

Barbri Inc

Media: Diversified & Production

6.46% (LIBOR +4.25%)

12/01/2017

12/01/2023

3,122

3,111

3,090

BCP Qualtek Merger Sub LLC

Telecommunications

8.01% (LIBOR +5.75%)

07/16/2018

07/18/2025

3,900

3,835

3,816

Big Ass Fans LLC

Capital Equipment

6.08% (LIBOR +3.75%)

11/07/2017

05/21/2024

2,456

2,447

2,464

Big River Steel LLC

Metals & Mining

7.33% (LIBOR +5%)

08/15/2017

08/23/2023

1,960

1,947

1,950

BI-LO LLC

Retail

10.34% (LIBOR +8%)

05/15/2018

05/31/2024

1,485

1,439

1,421

Brand Energy & Infrastructure Services, Inc.

Energy: Oil & Gas

6.58% (LIBOR +4.25%)

06/16/2017

06/21/2024

2,933

2,913

2,874

California Cryobank LLC

Healthcare & Pharmaceuticals

6.32% (LIBOR +4%)

08/03/2018

08/06/2025

3,176

3,163

3,168

Cambium Learning Inc.

Services: Consumer

6.61% (LIBOR +4.5%)

12/18/2018

12/18/2025

1,985

1,896

1,945

CC Amulet Intermediate, LLC ^(4)(11)

Healthcare & Pharmaceuticals

3.09% (LIBOR +1%)

06/18/2018

04/30/2024

1,538

)

CC Amulet Intermediate, LLC

Healthcare & Pharmaceuticals

6.87% (LIBOR +4.75%)

06/18/2018

04/30/2024

3,418

3,392

3,410

Clarity Telecom, LLC

Telecommunications

6.61% (LIBOR +4.5%)

06/27/2019

08/31/2026

4,000

3,960

4,005

Clarkson Eyecare, LLC

Healthcare & Pharmaceuticals

8.37% (LIBOR +6.25%)

08/21/2019

04/02/2021

2,100

2,059

2,069

Clarkson Eyecare, LLC

Healthcare & Pharmaceuticals

8.39% (LIBOR +6.25%)

08/21/2019

04/02/2021

1,400

1,372

1,379

Clear Balance Holdings, LLC

Banking, Finance, Insurance & Real Estate

8.08% (LIBOR +5.75%)

07/07/2015

10/05/2023

4,795

4,781

4,795

Commercial Barge Line Co

Transportation: Cargo

10.86% (LIBOR +8.75%)

11/06/2015

11/12/2020

1,238

1,224

690

Connect Finco SARL ⁽¹⁰⁾

Telecommunications

6.59% (LIBOR +4.5%)

09/23/2019

09/23/2026

1,432

1,403

1,412

Constellis Holdings, LLC

Aerospace & Defense

7.26% (LIBOR +5%)

04/18/2017

04/21/2024

1,955

1,942

1,200

Conyers Park Parent Merger Sub Inc

Beverage, Food & Tobacco

5.84% (LIBOR +3.5%)

06/21/2017

07/07/2024

1,960

1,953

1,966

CryoLife Inc

Healthcare & Pharmaceuticals

5.58% (LIBOR +3.25%)

11/15/2017

12/02/2024

1,965

1,958

1,973

CT Technologies Intermediate Holdings, Inc

Healthcare & Pharmaceuticals

6.36% (LIBOR +4.25%)

02/11/2015

12/01/2021

1,905

1,909

1,748

Datto, Inc.

Services: Business

6.58% (LIBOR +4.25%)

03/29/2019

04/02/2026

1,870

1,862

1,891

Deerfield Holdings Corp

Banking, Finance, Insurance & Real Estate

5.36% (LIBOR +3.25%)

12/06/2017

02/13/2025

246

243

Discovery Practice Management, Inc.

Healthcare & Pharmaceuticals

6.61% (LIBOR +4.5%)

07/22/2019

06/15/2024

4,987

4,963

4,925

Drilling Info Inc.

High Tech Industries

6.36% (LIBOR +4.25%)

07/27/2018

07/30/2025

4,454

4,436

DXP Enterprises, Inc.

Wholesale

6.86% (LIBOR +4.75%)

08/16/2017

08/29/2023

1,470

1,460

1,477

E2open, LLC

Transportation: Cargo

7.87% (LIBOR +5.75%)

06/21/2019

11/26/2024

5,000

4,952

4,950

Eliassen Group, LLC

Services: Business

6.61% (LIBOR +4.5%)

10/19/2018

11/05/2024

4,650

4,630

4,627

Empower Payments Acquisition

Services: Business

6.11% (LIBOR +4%)

10/05/2018

10/05/2025

3,970

3,961

3,946

Evo Payments International, LLC

Banking, Finance, Insurance & Real Estate

5.31% (LIBOR +3.25%)

12/08/2016

12/22/2023

2,574

2,559

2,587

Gold Standard Baking, Inc. ⁽¹³⁾

Wholesale

6.88% (LIBOR +4.5%)

05/19/2015

07/23/2022

2,518

2,423

1,435

Golden West Packaging Group LLC

Containers, Packaging & Glass

7.36% (LIBOR +5.25%)

02/09/2018

06/20/2023

4,693

4,677

4,693

Granite Holdings US Acquisition Co⁽¹⁰⁾

Capital Equipment

7.34% (LIBOR +5.25%)

09/25/2019

09/25/2026

2,933

2,845

2,864

Great Dane Merger Sub Inc

High Tech Industries

5.61% (LIBOR +3.5%)

05/02/2018

05/21/2025

2,963

2,951

2,927

Gruden Acquisition Inc.

Transportation: Cargo

7.83% (LIBOR +5.5%)

06/21/2017

08/18/2022

1,954

1,927

1,949

Heartland Dental LLC^(5)(11)

Healthcare & Pharmaceuticals

5.84% (LIBOR +3.75%)

04/19/2018

04/17/2025

)

Heartland Dental LLC

Healthcare & Pharmaceuticals

5.86% (LIBOR +3.75%)

04/19/2018

04/30/2025

1,450

1,444

1,422

Help/Systems Holdings, Inc.

High Tech Industries

6.08% (LIBOR +3.75%)

03/23/2018

03/28/2025

1,975

1,971

1,973

Higginbotham Insurance Agency, Inc.

Banking, Finance, Insurance & Real Estate

6.11% (LIBOR +4%)

12/14/2017

12/19/2024

4,913

4,894

4,827

Hoffman Southwest Corporation

Environmental Industries

6.83% (LIBOR +4.5%)

05/16/2019

08/14/2023

1,610

1,595

1,594

Hornblower Sub LLC

Hotel, Gaming & Leisure

6.83% (LIBOR +4.5%)

03/08/2019

04/27/2025

1,771

1,763

1,779

Logan JV Loan Portfolio as of September 30, 2019

(dollar amounts in thousands)

Type of Investment/

Portfolio company⁽¹²⁾

Industry

Interest Rate ⁽¹⁾

Initial

Acquisition

Date

Maturity

Date

Principal

Amortized

Cost

Fair

Value ⁽²⁾

Idera Inc

High Tech Industries

6.62% (LIBOR +4.5%)

06/27/2017

06/28/2024

2,314

2,298

2,316

Infoblox Inc.

High Tech Industries

6.61% (LIBOR +4.5%)

11/03/2016

11/07/2023

2,120

2,090

2,133

Institutional Shareholder Services, Inc.

Services: Business

6.83% (LIBOR +4.5%)

03/04/2019

02/26/2026

1,990

1,972

1,970

Intermedia Holdings, Inc.

Telecommunications

8.11% (LIBOR +6%)

07/13/2018

07/11/2025

2,978

2,953

2,982

International Textile Group Inc

Consumer goods: Durable

7.1% (LIBOR +5%)

04/20/2018

04/19/2024

969

965

828

Isagenix International LLC

Services: Consumer

7.85% (LIBOR +5.75%)

04/26/2018

06/14/2025

1,874

1,859

1,448

LifeScan Global Corp

Healthcare & Pharmaceuticals

8.66% (LIBOR +6%)

06/19/2018

10/01/2024

2,132

2,078

1,937

LSCS Holdings Inc.

Healthcare & Pharmaceuticals

6.58% (LIBOR +4.25%)

03/09/2018

03/17/2025

467

465

LSCS Holdings Inc.

Healthcare & Pharmaceuticals

6.58% (LIBOR +4.25%)

03/09/2018

03/17/2025

1,809

1,802

1,800

MAG DS Corp.

Aerospace & Defense

6.86% (LIBOR +4.75%)

06/01/2018

05/30/2025

2,963

2,938

2,948

Mavenir Systems Inc

Telecommunications

8.34% (LIBOR +6%)

05/01/2018

05/01/2025

1,975

1,943

1,950

MCS Group Holdings LLC

Banking, Finance, Insurance & Real Estate

6.86% (LIBOR +4.75%)

05/12/2017

05/20/2024

1,955

1,948

886

MDVIP Inc

Healthcare & Pharmaceuticals

6.36% (LIBOR +4.25%)

11/10/2017

11/14/2024

4,224

4,213

4,198

Merrill Communications LLC ⁽¹⁰⁾

Media: Advertising, Printing & Publishing

7.09% (LIBOR +5%)

09/26/2019

09/25/2026

2,000

1,980

1,995

Miller's Ale House Inc

Hotel, Gaming & Leisure

6.93% (LIBOR +4.75%)

05/24/2018

05/21/2025

2,370

2,360

2,204

MLN US Holdco LLC

Telecommunications

6.61% (LIBOR +4.5%)

07/13/2018

11/30/2025

2,978

2,971

2,777

Nasco Healthcare, Inc.

Healthcare & Pharmaceuticals

6.83% (LIBOR +4.5%)

07/13/2015

06/30/2021

4,454

4,447

4,454

New Insight Holdings Inc

Services: Business

7.75% (LIBOR +5.5%)

12/08/2017

12/20/2024

1,965

1,892

1,975

NextCare, Inc. ^(6)(11)

Healthcare & Pharmaceuticals

6.84% (LIBOR +4.75%)

02/13/2018

06/30/2024

630

)

NextCare, Inc.

Healthcare & Pharmaceuticals

6.61% (LIBOR +4.5%)

02/13/2018

06/30/2024

3,826

3,797

3,788

Northern Star Holdings Inc.

Utilities: Electric

6.83% (LIBOR +4.5%)

03/28/2018

03/14/2025

4,186

4,170

4,123

Oak Point Partners, LLC

Banking, Finance, Insurance & Real Estate

7.28% (LIBOR +5.25%)

09/13/2017

09/13/2023

2,925

2,901

2,896

OB Hospitalist Group Inc

Healthcare & Pharmaceuticals

6.29% (LIBOR +4%)

08/08/2017

08/01/2024

2,192

2,184

2,186

Odyssey Logistics & Technology Corporation

Transportation: Cargo

6.11% (LIBOR +4%)

10/06/2017

10/12/2024

1,943

1,936

1,931

OpenLink

High Tech Industries

7.15% (LIBOR +4.5%)

03/02/2018

03/21/2025

1,771

1,764

1,762

Orion Business Innovations

High Tech Industries

6.64% (LIBOR +4.5%)

10/18/2018

10/19/2024

562

557

559

Orion Business Innovations

High Tech Industries

6.64% (LIBOR +4.5%)

03/04/2019

10/21/2024

829

822

825

Orion Business Innovations

High Tech Industries

6.82% (LIBOR +4.5%)

10/18/2018

10/19/2024

1,921

1,905

1,911

OSM MSO, LLC

Healthcare & Pharmaceuticals

7.33% (LIBOR +5%)

10/16/2018

08/09/2023

3,960

3,928

3,881

Output Services Group Inc

Services: Business

6.61% (LIBOR +4.5%)

03/26/2018

03/21/2024

4,434

4,417

3,880

Park Place Technologies, LLC

High Tech Industries

6.11% (LIBOR +4%)

03/22/2018

03/22/2025

2,311

2,302

2,304

PH Beauty Holdings III, Inc.

Containers, Packaging & Glass

7.11% (LIBOR +5%)

10/04/2018

09/28/2025

2,970

2,944

2,851

Ping Identity Corp

High Tech Industries

5.86% (LIBOR +3.75%)

01/23/2018

01/24/2025

462

460

462

Pivotal Payments

Services: Business

7.06% (LIBOR +5%)

09/27/2018

09/29/2025

3,963

3,937

3,924

PLH Group Inc

Energy: Oil & Gas

8.21% (LIBOR +6%)

08/01/2018

07/25/2023

3,976

3,899

3,951

Polar US Borrower

Chemicals, Plastics & Rubber

7.08% (LIBOR +4.75%)

08/21/2018

10/15/2025

2,978

2,874

2,899

Premise Health Holding Corp ^(7)(11)

Healthcare & Pharmaceuticals

5.59% (LIBOR +3.5%)

08/14/2018

07/10/2025

294

)

Premise Health Holding Corp

Healthcare & Pharmaceuticals

5.83% (LIBOR +3.5%)

08/14/2018

07/10/2025

3,669

3,653

3,635

Project Leopard Holdings Inc

High Tech Industries

6.7% (LIBOR +4.5%)

06/21/2017

07/07/2023

1,715

1,712

1,720

PSC Industrial Outsourcing, LP

Chemicals, Plastics & Rubber

5.78% (LIBOR +3.75%)

10/05/2017

10/11/2024

1,965

1,951

1,961

Pure Fishing Inc

Consumer goods: Non-Durable

6.83% (LIBOR +4.5%)

12/20/2018

11/30/2025

1,194

1,151

1,067

QuickBase Inc.

Services: Business

6.07% (LIBOR +4%)

03/29/2019

04/03/2026

2,095

2,085

2,084

Quidditch Acquisition Inc

Beverage, Food & Tobacco

9.11% (LIBOR +7%)

03/16/2018

03/21/2025

1,006

990

1,021

Red Ventures LLC

Media: Advertising, Printing & Publishing

5.11% (LIBOR +3%)

10/18/2017

11/08/2024

2,023

2,009

2,034

Sabre Industries Inc

Capital Equipment

6.31% (LIBOR +4.25%)

04/04/2019

04/02/2026

1,197

1,186

1,204

Logan JV Loan Portfolio as of September 30, 2019

(dollar amounts in thousands)

Type of Investment/

Portfolio company⁽¹²⁾

Industry

Interest Rate ⁽¹⁾

Initial

Acquisition

Date

Maturity

Date

Principal

Amortized

Cost

Fair

Value ⁽²⁾

Silverback Merger Sub Inc

High Tech Industries

5.61% (LIBOR +3.5%)

08/11/2017

08/21/2024

1,176

1,174

1,000

SMS Systems Maintenance Services Inc

High Tech Industries

7.11% (LIBOR +5%)

02/09/2017

10/30/2023

2,918

2,909

2,392

SoClean, Inc

Healthcare & Pharmaceuticals

8.32% (LIBOR +6%)

02/13/2018

12/20/2022

5,009

4,974

5,009

Starfish- V Merger Sub Inc

High Tech Industries

6.61% (LIBOR +4.5%)

08/11/2017

08/16/2024

1,225

1,217

1,222

Teneo Holdings LLC

Services: Business

7.29% (LIBOR +5.25%)

07/15/2019

07/12/2025

2,250

2,163

2,157

ThoughtWorks, Inc.

High Tech Industries

6.11% (LIBOR +4%)

10/06/2017

10/11/2024

3,951

3,941

3,961

Titan Sub LLC⁽¹⁰⁾

Aerospace & Defense

7.09% (LIBOR +5%)

09/19/2019

09/19/2026

2,250

2,228

2,253

TOMS Shoes LLC

Retail

7.76% (LIBOR +5.5%)

12/18/2014

10/30/2020

1,910

1,883

1,222

Tupelo Buyer Inc

Transportation: Cargo

5.8% (LIBOR +3.75%)

10/02/2017

10/07/2024

2,188

2,175

2,141

Uber Technologies, Inc.

Services: Consumer

6.03% (LIBOR +4%)

03/22/2018

04/04/2025

2,765

2,754

US Shipping Corp

Utilities: Oil & Gas

6.36% (LIBOR +4.25%)

03/09/2016

06/26/2021

206

202

191

Utility One Source L.P.

Construction & Building

7.83% (LIBOR +5.5%)

04/07/2017

04/18/2023

978

972

990

Vertiv Group Corporation

Capital Equipment

6.33% (LIBOR +4%)

09/30/2016

11/30/2023

1,504

1,476

1,435

Vistage Worldwide, Inc.

Services: Consumer

6.15% (LIBOR +4%)

02/06/2018

02/10/2025

2,482

2,477

2,472

W3 Topco LLC

Energy: Oil & Gas

8.04% (LIBOR +6%)

08/13/2019

08/13/2025

204

190

193

W3 Topco LLC

Energy: Oil & Gas

8.17% (LIBOR +6%)

08/13/2019

08/16/2025

1,796

1,673

1,701

Weight Watchers International, Inc.

Services: Consumer

7.07% (LIBOR +4.75%)

11/20/2017

11/29/2024

2,376

2,341

2,384

Women's Care Florida LLP

Healthcare & Pharmaceuticals

6.61% (LIBOR +4.5%)

08/18/2017

09/29/2023

4,913

4,895

4,888

Wrench Group LLC

Construction & Building

6.45% (LIBOR +4.25%)

04/15/2019

04/12/2026

3,117

3,088

3,121

Wrench Group LLC ^(8)(11)

Construction & Building

6.34% (LIBOR +4.25%)

04/15/2019

04/30/2026

1,042

(10

)

Yak Access LLC

Energy: Oil & Gas

7.11% (LIBOR +5%)

06/29/2018

07/02/2025

2,925

2,852

2,698

Zenith American Holding, Inc.

Services: Business

7.58% (LIBOR +5.25%)

03/11/2019

12/13/2024

3,958

3,948

3,919

Zenith American Holding, Inc.⁽⁹⁾

Services: Business

7.36% (LIBOR +5.25%)

03/11/2019

12/13/2024

497

120

119

Total United States of America

314,317

306,964

Total Senior Secured First Lien Term Loans

333,934

326,259

Second Lien Term Loans

United States of America

AQA Acquisition Holding, Inc

High Tech Industries

10.32% (LIBOR +8%)

10/01/2018

05/24/2024

1,000

992

995

Constellis Holdings, LLC

Aerospace & Defense

11.26% (LIBOR +9%)

04/18/2017

04/21/2025

1,000

990

213

DigiCert, Inc.

High Tech Industries

10.11% (LIBOR +8%)

09/20/2017

10/31/2025

600

598

599

DiversiTech Holdings Inc

Consumer goods: Durable

9.83% (LIBOR +7.5%)

05/18/2017

06/02/2025

2,000

1,985

1,960

Gruden Acquisition Inc.

Transportation: Cargo

10.83% (LIBOR +8.5%)

07/31/2015

08/18/2023

500

488

497

Midwest Physician Administrative Services, LLC

Healthcare & Pharmaceuticals

9.11% (LIBOR +7%)

08/11/2017

08/15/2025

979

972

950

Optiv Security Inc

High Tech Industries

9.36% (LIBOR +7.25%)

01/19/2017

01/31/2025

1,500

1,495

729

Park Place Technologies, LLC

High Tech Industries

10.11% (LIBOR +8%)

03/22/2018

03/29/2026

700

694

695

TKC Holdings Inc

Services: Business

10.12% (LIBOR +8%)

01/31/2017

02/01/2024

1,850

1,840

1,816

Wash Multifamily Laundry Systems, LLC.

Services: Consumer

9.11% (LIBOR +7%)

05/04/2015

05/15/2023

425

424

416

Wash Multifamily Laundry Systems, LLC.

Services: Consumer

9.11% (LIBOR +7%)

05/04/2015

05/12/2023

Logan JV Loan Portfolio as of September 30, 2019

(dollar amounts in thousands)

Type of Investment/ Portfolio company⁽¹²⁾	Industry	Interest Rate ⁽¹⁾	Initial Acquisition Date	Maturity Date	Principal	Amortized Cost		Fair Value ⁽²⁾
Total United States of America						$	10,552	$	8,943

Total Second Lien Term Loans						$	10,552	$	8,943

Total Investments						$	344,486	$	335,202


Cash equivalents
Dreyfus Government Cash Management Fund							13,472		13,472
Other cash accounts							946		946
Total Cash equivalents						$	14,418	$	14,418

⁽¹⁾	Variable interest rates indexed to 30-day, 60-day, 90-day or 180-day LIBOR rates, at the borrower’s option. LIBOR rates are subject to interest rate floors.

⁽²⁾	Represents fair value in accordance with ASC Topic 820.

⁽³⁾

⁽⁴⁾	Represents a delayed draw commitment of $1,538,462, which was unfunded as of September 30, 2019. Company pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁵⁾	Represents a delayed draw commitment of $32,609, which was unfunded as of September 30, 2019. Company pays 3.75% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁶⁾	Represents a delayed draw commitment of $630,036, which was unfunded as of September 30, 2019. Company pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁷⁾	Represents a delayed draw commitment of $294,107, which was unfunded as of September 30, 2019. Company pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁸⁾	Represents a delayed draw commitment of $1,041,667, which was unfunded as of September 30, 2019. Company pays 4.25% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁹⁾

⁽¹⁰⁾	Unsettled trade that interest will start to accrue on when the trade settles. Three month LIBOR as of September 30, 2019 is shown to reflect possible projected interest rate.

⁽¹¹⁾	Unfunded amount will start to accrue interest when the position is funded. Three month LIBOR as of September 30, 2019 is shown to reflect possible projected interest rate.

⁽¹²⁾	All investments are pledged as collateral for loans payable unless otherwise noted.

⁽¹³⁾	Loan was on non-accrual as of September 30, 2019.

Logan JV Loan Portfolio as of December 31, 2018

(dollar amounts in thousands)

Type of Investment/

Portfolio company

Industry

Interest Rate ⁽¹⁾

Initial

Acquisition

Date

Maturity

Date

Principal

Amortized

Cost

Fair

Value ⁽²⁾

Senior Secured First Lien Term Loans

Canada

PNI Canada Acquireco Corp

High Tech Industries

6.85% (LIBOR +4.5%)

10/31/2018

10/31/2025

1,733

1,724

1,699

Total Canada

1,724

1,699

Germany

Rhodia Acetow

Consumer goods: Non-Durable

8.09% (LIBOR +5.5%)

04/21/2017

05/31/2023

985

974

955

VAC Germany Holding GmbH

Metals & Mining

6.8% (LIBOR +4%)

02/26/2018

02/26/2025

2,978

2,964

2,974

Total Germany

3,938

3,929

United Kingdom

Auxey Bidco Ltd.

Services: Business

7.97% (LIBOR +5.5%)

08/07/2018

08/07/2025

5,000

4,806

4,813

EG Group

Retail

6.81% (LIBOR +4%)

03/23/2018

02/07/2025

2,845

2,832

2,749

Total United Kingdom

7,638

7,562

United States of America

1A Smart Start LLC

Services: Consumer

7.09% (LIBOR +4.5%)

08/28/2015

02/21/2022

4,347

4,329

4,347

A Place for Mom Inc

Media: Advertising, Printing & Publishing

6.27% (LIBOR +3.75%)

07/28/2017

08/10/2024

3,950

3,934

3,970

A10 Capital, LLC

Banking, Finance, Insurance & Real Estate

8.96% (LIBOR +6.5%)

04/25/2018

04/27/2023

5,000

4,957

4,925

Achilles Acquisition LLC

Banking, Finance, Insurance & Real Estate

6.56% (LIBOR +4%)

10/04/2018

10/03/2025

4,000

3,990

3,950

Advanced Computer Software

High Tech Industries

7.14% (LIBOR +4.75%)

05/25/2018

05/31/2024

1,496

1,493

1,485

Advanced Integration Technology LP

Aerospace & Defense

7.46% (LIBOR +4.75%)

07/15/2016

04/03/2023

1,955

1,941

1,936

AgroFresh Inc.

Chemicals, Plastics & Rubber

7.55% (LIBOR +4.75%)

12/01/2015

07/31/2021

1,935

1,928

1,909

Air Medical Group Holdings Inc

Healthcare & Pharmaceuticals

6.75% (LIBOR +4.25%)

09/26/2017

03/14/2025

2,228

2,213

2,081

Alcami Carolinas Corp

Healthcare & Pharmaceuticals

6.71% (LIBOR +4.25%)

07/09/2018

07/06/2025

3,990

3,971

3,970

Alchemy US Holdco 1 LLC

Chemicals, Plastics & Rubber

8.12% (LIBOR +5.5%)

10/01/2018

09/28/2025

2,000

1,971

1,995

Alpha Media LLC

Media: Broadcasting & Subscription

9% (LIBOR +6.5%)

02/24/2016

02/25/2022

3,043

2,962

2,931

AMCP Clean Acquisition Co LLC

Wholesale

7.05% (LIBOR +4.25%)

07/10/2018

07/10/2025

2,407

2,396

2,386

AMCP Clean Acquisition Co LLC ⁽³⁾

Wholesale

7.15% (LIBOR +4.25%)

07/10/2018

07/10/2025

581

225

222

American Sportsman Holdings Co

Retail

7.52% (LIBOR +5%)

11/22/2016

09/25/2024

3,950

3,906

3,796

Ansira Holdings, Inc. ⁽⁴⁾

Media: Diversified & Production

8.27% (LIBOR +5.75%)

04/17/2018

12/20/2022

613

150

149

Ansira Holdings, Inc.

Media: Diversified & Production

8.27% (LIBOR +5.75%)

12/20/2016

12/20/2022

1,850

1,838

1,841

AP Gaming I LLC

Hotel, Gaming & Leisure

6.02% (LIBOR +3.5%)

06/06/2016

02/15/2024

2,463

2,457

2,424

APC Aftermarket

Automotive

7.62% (LIBOR +5%)

05/09/2017

05/10/2024

493

485

448

Aptean, Inc.

High Tech Industries

7.06% (LIBOR +4.25%)

12/15/2017

12/20/2022

929

922

920

AQA Acquisition Holding, Inc

High Tech Industries

7.05% (LIBOR +4.25%)

10/01/2018

05/24/2023

1,995

1,985

ATI Merger Sub Inc.⁽¹¹⁾

Healthcare & Pharmaceuticals

7.31% (LIBOR +4.5%)

12/19/2018

12/05/2025

4,333

4,290

4,301

Avaya Inc

Telecommunications

6.71% (LIBOR +4.25%)

11/09/2017

12/15/2024

2,588

2,564

2,506

Barbri Inc

Media: Diversified & Production

6.6% (LIBOR +4.25%)

12/01/2017

12/01/2023

3,122

3,109

3,059

BCP Qualtek Merger Sub LLC

Telecommunications

8.28% (LIBOR +5.75%)

07/16/2018

07/18/2025

3,990

3,915

3,903

Beasley Mezzanine Holdings LLC

Media: Broadcasting & Subscription

6.47% (LIBOR +4%)

11/17/2017

11/01/2023

2,927

2,915

2,893

Big Ass Fans LLC

Capital Equipment

6.55% (LIBOR +3.75%)

11/07/2017

05/21/2024

2,475

2,465

2,444

Logan JV Loan Portfolio as of December 31, 2018

(dollar amounts in thousands)

Type of Investment/

Portfolio company

Industry

Interest Rate ⁽¹⁾

Initial

Acquisition

Date

Maturity

Date

Principal

Amortized

Cost

Fair

Value ⁽²⁾

Big River Steel LLC

Metals & Mining

7.8% (LIBOR +5%)

08/15/2017

08/23/2023

1,975

1,960

BI-LO LLC

Retail

10.78% (LIBOR +8%)

05/15/2018

05/31/2024

1,493

1,438

1,434

Bomgar Corp

High Tech Industries

6.52% (LIBOR +4%)

04/17/2018

04/18/2025

3,985

3,976

3,865

Brand Energy & Infrastructure Services, Inc.

Energy: Oil & Gas

6.76% (LIBOR +4.25%)

06/16/2017

06/21/2024

2,955

2,932

2,814

California Cryobank LLC

Healthcare & Pharmaceuticals

6.8% (LIBOR +4%)

08/03/2018

08/06/2025

3,200

3,185

3,200

Cambium Learning Inc.

Services: Consumer

4.5% (LIBOR +4.5%)

12/18/2018

12/11/2025

2,000

1,900

1,908

CC Amulet Intermediate, LLC ^{(5) (12)}

Healthcare & Pharmaceuticals

7.56% (LIBOR +4.75%)

06/18/2018

04/30/2024

1,538

(14

)

(15

)

CC Amulet Intermediate, LLC

Healthcare & Pharmaceuticals

7.27% (LIBOR +4.75%)

06/18/2018

04/30/2024

3,444

3,413

3,410

Clear Balance Holdings, LLC

Banking, Finance, Insurance & Real Estate

8.55% (LIBOR +5.75%)

07/07/2015

10/05/2023

4,938

4,920

4,937

Commercial Barge Line Co

Transportation: Cargo

11.27% (LIBOR +8.75%)

11/06/2015

11/12/2020

1,294

1,270

939

Constellis Holdings, LLC

Aerospace & Defense

7.52% (LIBOR +5%)

04/18/2017

04/21/2024

1,970

1,955

1,891

Conyers Park Parent Merger Sub Inc

Beverage, Food & Tobacco

6.27% (LIBOR +3.5%)

06/21/2017

07/07/2024

1,975

1,967

1,955

Country Fresh Holdings, LLC

Beverage, Food & Tobacco

7.8% (LIBOR +5%)

07/14/2017

03/31/2023

4,340

4,308

3,668

Covenant Surgical Partners Inc

Healthcare & Pharmaceuticals

7.3% (LIBOR +4.5%)

09/29/2017

10/04/2024

2,972

2,966

2,928

CPI Acquisition, Inc.

Services: Consumer

7.02% (LIBOR +4.5%)

08/14/2015

08/17/2022

4,187

4,106

2,684

CryoLife Inc

Healthcare & Pharmaceuticals

6.05% (LIBOR +3.25%)

11/15/2017

12/02/2024

1,980

1,972

1,940

CT Technologies Intermediate Holdings, Inc

Healthcare & Pharmaceuticals

6.77% (LIBOR +4.25%)

02/11/2015

12/01/2021

1,920

1,925

1,602

Deerfield Holdings Corp

Banking, Finance, Insurance & Real Estate

5.77% (LIBOR +3.25%)

12/06/2017

02/13/2025

248

236

DigiCert, Inc.

High Tech Industries

6.52% (LIBOR +4%)

09/20/2017

10/31/2024

995

991

978

Drilling Info Inc.

High Tech Industries

6.77% (LIBOR +4.25%)

07/27/2018

07/30/2025

4,489

4,468

4,478

DXP Enterprises, Inc.

Wholesale

7.27% (LIBOR +4.75%)

08/16/2017

08/29/2023

1,481

1,470

Eliassen Group, LLC

Services: Business

7.02% (LIBOR +4.5%)

10/19/2018

11/05/2024

4,167

4,146

Empower Payments Acquisition

Services: Business

7.05% (LIBOR +4.25%)

10/05/2018

10/05/2025

4,000

3,990

Evo Payments International, LLC

Banking, Finance, Insurance & Real Estate

5.76% (LIBOR +3.25%)

12/08/2016

12/22/2023

2,594

2,576

2,512

Gold Standard Baking, Inc.

Wholesale

7.31% (LIBOR +4.5%)

05/19/2015

04/23/2021

2,481

2,476

2,257

Golden West Packaging Group LLC

Containers, Packaging & Glass

7.77% (LIBOR +5.25%)

02/09/2018

06/20/2023

4,731

4,711

4,719

Great Dane Merger Sub Inc

High Tech Industries

6.27% (LIBOR +3.75%)

05/02/2018

05/21/2025

2,985

2,971

2,918

Gruden Acquisition Inc.

Transportation: Cargo

8.3% (LIBOR +5.5%)

06/21/2017

08/18/2022

1,970

1,935

1,933

Gulf Finance, LLC

Energy: Oil & Gas

8.06% (LIBOR +5.25%)

08/17/2016

08/25/2023

1,875

1,837

1,446

Heartland Dental LLC ^{(6) (12)}

Healthcare & Pharmaceuticals

6.56% (LIBOR +3.75%)

04/19/2018

04/17/2025

125

)

Heartland Dental LLC

Healthcare & Pharmaceuticals

6.27% (LIBOR +3.75%)

04/19/2018

04/30/2025

1,368

1,362

1,315

Help/Systems Holdings, Inc.

High Tech Industries

6.27% (LIBOR +3.75%)

03/23/2018

03/28/2025

1,990

1,986

1,915

Higginbotham Insurance Agency, Inc.

Banking, Finance, Insurance & Real Estate

6.26% (LIBOR +3.75%)

12/14/2017

12/19/2024

4,950

4,929

4,801

Idera Inc

High Tech Industries

7.03% (LIBOR +4.5%)

06/27/2017

06/28/2024

2,332

2,313

2,336

Infoblox Inc.

High Tech Industries

7.02% (LIBOR +4.5%)

11/03/2016

11/07/2023

2,136

2,100

2,132

Intermedia Holdings, Inc.

Telecommunications

8.52% (LIBOR +6%)

07/13/2018

07/11/2025

3,000

2,972

2,996

International Textile Group Inc

Consumer goods: Durable

7.35% (LIBOR +5%)

04/20/2018

04/19/2024

988

983

970

Isagenix International LLC

Services: Consumer

8.55% (LIBOR +5.75%)

04/26/2018

06/14/2025

1,950

1,932

1,896

Kestra Financial, Inc.

Banking, Finance, Insurance & Real Estate

6.76% (LIBOR +4.25%)

06/10/2016

06/24/2022

3,902

3,868

3,902

LifeScan Global Corp

Healthcare & Pharmaceuticals

8.4% (LIBOR +6%)

06/19/2018

10/01/2024

2,250

2,185

2,132

LSCS Holdings Inc.

Healthcare & Pharmaceuticals

6.96% (LIBOR +4.25%)

03/09/2018

03/17/2025

467

465

LSCS Holdings Inc.

Healthcare & Pharmaceuticals

6.96% (LIBOR +4.25%)

03/09/2018

03/17/2025

1,809

1,801

1,800

Lyons Magnus Inc aka

Beverage, Food & Tobacco

6.02% (LIBOR +3.5%)

06/08/2018

11/11/2024

3,964

3,952

3,944

MAG DS Corp.

Aerospace & Defense

7.27% (LIBOR +4.75%)

06/01/2018

05/30/2025

2,985

2,958

2,970

Mavenir Systems Inc

Telecommunications

8.39% (LIBOR +6%)

05/01/2018

05/01/2025

1,990

1,954

1,984

Logan JV Loan Portfolio as of December 31, 2018

(dollar amounts in thousands)

Type of Investment/

Portfolio company

Industry

Interest Rate ⁽¹⁾

Initial

Acquisition

Date

Maturity

Date

Principal

Amortized

Cost

Fair

Value ⁽²⁾

MCS Group Holdings LLC

Banking, Finance, Insurance & Real Estate

7.27% (LIBOR +4.75%)

05/12/2017

05/20/2024

1,970

1,962

1,623

MDVIP Inc

Healthcare & Pharmaceuticals

6.75% (LIBOR +4.25%)

11/10/2017

11/14/2024

4,256

4,244

4,230

Merrill Communications LLC

Media: Advertising, Printing & Publishing

7.78% (LIBOR +5.25%)

05/29/2015

06/01/2022

748

745

748

Miller's Ale House Inc

Hotel, Gaming & Leisure

7.1% (LIBOR +4.75%)

05/24/2018

05/21/2025

2,388

2,377

2,352

MLN US Holdco LLC

Telecommunications

7.02% (LIBOR +4.5%)

07/13/2018

11/30/2025

3,000

2,993

2,916

Morphe, LLC

Consumer goods: Non-Durable

8.52% (LIBOR +6%)

02/21/2017

02/10/2023

2,738

2,709

2,724

Nasco Healthcare, Inc.

Healthcare & Pharmaceuticals

7.28% (LIBOR +4.5%)

07/13/2015

06/30/2021

4,489

4,480

4,467

New Insight Holdings Inc

Services: Business

8.02% (LIBOR +5.5%)

12/08/2017

12/20/2024

1,980

1,895

1,948

NextCare, Inc. ^{(7) (12)}

Healthcare & Pharmaceuticals

7.56% (LIBOR +4.75%)

02/13/2018

02/28/2023

588

)

NextCare, Inc.

Healthcare & Pharmaceuticals

7.27% (LIBOR +4.75%)

02/13/2018

02/28/2023

3,386

3,358

3,386

Northern Star Holdings Inc.

Utilities: Electric

7.55% (LIBOR +4.75%)

03/28/2018

03/14/2025

4,218

4,199

4,213

Oak Point Partners, LLC

Banking, Finance, Insurance & Real Estate

8.03% (LIBOR +5.25%)

09/13/2017

09/13/2023

3,000

2,971

2,955

OB Hospitalist Group Inc

Healthcare & Pharmaceuticals

6.35% (LIBOR +4%)

08/08/2017

08/01/2024

2,238

2,229

2,204

Odyssey Logistics & Technology Corporation

Transportation: Cargo

6.52% (LIBOR +4%)

10/06/2017

10/12/2024

1,980

1,971

1,921

OpenLink

High Tech Industries

7.27% (LIBOR +4.75%)

03/02/2018

03/21/2025

1,831

1,822

1,820

Orion Business Innovations ^{(8) (12)}

High Tech Industries

7.31% (LIBOR +4.5%)

10/18/2018

10/19/2024

565

)

Orion Business Innovations

High Tech Industries

7.16% (LIBOR +4.5%)

10/18/2018

10/19/2024

1,931

1,912

1,911

OSM MSO, LLC

Healthcare & Pharmaceuticals

7.8% (LIBOR +5%)

10/16/2018

08/09/2023

3,990

3,952

3,950

Output Services Group Inc

Services: Business

6.77% (LIBOR +4.25%)

03/26/2018

03/21/2024

4,468

4,448

4,345

Park Place Technologies, LLC

High Tech Industries

6.52% (LIBOR +4%)

03/22/2018

03/22/2025

2,328

2,318

2,308

PH Beauty Holdings III, Inc.

Containers, Packaging & Glass

7.52% (LIBOR +5%)

10/04/2018

09/28/2025

2,993

2,963

2,888

Ping Identity Corp

High Tech Industries

6.27% (LIBOR +3.75%)

01/23/2018

01/24/2025

1,493

1,486

1,485

Pivotal Payments

Services: Business

9% (LIBOR +4.5%)

09/27/2018

09/29/2025

3,096

3,066

3,065

Pivotal Payments⁽⁹⁾

Services: Business

6.98% (LIBOR +4.5%)

09/27/2018

09/29/2025

897

550

PLH Group Inc

Energy: Oil & Gas

8.59% (LIBOR +6%)

08/01/2018

07/25/2023

3,173

3,085

3,109

Polar US Borrower

Chemicals, Plastics & Rubber

7.19% (LIBOR +4.75%)

08/21/2018

10/15/2025

3,000

2,883

2,895

Premise Health Holding Corp ^{(10) (12)}

Healthcare & Pharmaceuticals

6.56% (LIBOR +3.75%)

08/14/2018

07/10/2025

294

)

Premise Health Holding Corp

Healthcare & Pharmaceuticals

6.55% (LIBOR +3.75%)

08/14/2018

07/10/2025

3,697

3,679

3,641

Project Leopard Holdings Inc

High Tech Industries

6.52% (LIBOR +4%)

06/21/2017

07/07/2023

1,728

1,725

1,691

PSC Industrial Outsourcing, LP

Chemicals, Plastics & Rubber

6.21% (LIBOR +3.75%)

10/05/2017

10/11/2024

1,980

1,964

1,935

Pure Fishing Inc⁽¹¹⁾

Consumer goods: Non-Durable

7.06% (LIBOR +4.25%)

12/20/2018

11/30/2025

1,200

1,152

1,158

Quidditch Acquisition Inc

Beverage, Food & Tobacco

9.47% (LIBOR +7%)

03/16/2018

03/21/2025

1,014

996

1,009

Red Ventures LLC

Media: Advertising, Printing & Publishing

5.52% (LIBOR +3%)

10/18/2017

11/08/2024

2,039

2,022

1,947

SCS Holdings Inc

High Tech Industries

6.77% (LIBOR +4.25%)

11/20/2015

10/30/2022

1,558

1,551

1,541

Silverback Merger Sub Inc

High Tech Industries

6.01% (LIBOR +3.5%)

08/11/2017

08/21/2024

1,185

1,182

1,068

Situs Group Holdings Corporation

Banking, Finance, Insurance & Real Estate

7.02% (LIBOR +4.5%)

02/21/2018

02/27/2023

2,972

2,959

2,972

SMS Systems Maintenance Services Inc

High Tech Industries

7.52% (LIBOR +5%)

02/09/2017

10/30/2023

2,940

2,929

2,240

SoClean, Inc

Healthcare & Pharmaceuticals

8.74% (LIBOR +6%)

02/13/2018

12/20/2022

5,101

5,057

5,126

Starfish- V Merger Sub Inc

High Tech Industries

7.02% (LIBOR +4.5%)

08/11/2017

08/16/2024

1,234

1,224

1,223

STS Operating, Inc.

Capital Equipment

6.77% (LIBOR +4.25%)

04/27/2018

12/11/2024

1,489

1,485

1,453

ThoughtWorks, Inc.

High Tech Industries

6.52% (LIBOR +4%)

10/06/2017

10/11/2024

3,981

3,970

3,931

TKC Holdings Inc

Services: Business

6.28% (LIBOR +3.75%)

06/08/2017

02/01/2023

295

294

281

TOMS Shoes LLC

Retail

8.3% (LIBOR +5.5%)

12/18/2014

10/30/2020

1,925

1,879

1,519

Tupelo Buyer Inc

Transportation: Cargo

6.22% (LIBOR +3.75%)

10/02/2017

10/07/2024

2,204

2,190

2,160

TV Borrower US LLC

High Tech Industries

7.55% (LIBOR +4.75%)

02/16/2017

02/22/2024

983

979

978

Logan JV Loan Portfolio as of December 31, 2018

(dollar amounts in thousands)

Type of Investment/ Portfolio company	Industry	Interest Rate ⁽¹⁾	Initial Acquisition Date	Maturity Date	Principal		Amortized Cost		Fair Value ⁽²⁾
Uber Technologies, Inc.	Services: Consumer	6.39% (LIBOR +4%)	03/22/2018	04/04/2025		2,786		2,773		2,722
US Salt LLC	Consumer goods: Non-Durable	7.27% (LIBOR +4.75%)	11/30/2017	12/01/2023		2,978		2,952		2,977
US Shipping Corp	Utilities: Oil & Gas	6.77% (LIBOR +4.25%)	03/09/2016	06/26/2021		206		200		198
Utility One Source L.P.	Construction & Building	8.02% (LIBOR +5.5%)	04/07/2017	04/18/2023		985		978		985
Verdesian Life Sciences LLC	Chemicals, Plastics & Rubber	7.53% (LIBOR +5%)	12/09/2014	07/01/2020		1,996		1,897		1,876
Vertiv Group Corporation	Capital Equipment	6.71% (LIBOR +4%)	09/30/2016	11/30/2023		1,504		1,471		1,375
Vistage Worldwide, Inc.	Services: Consumer	6.46% (LIBOR +4%)	02/06/2018	02/10/2025		2,501		2,496		2,464
Weight Watchers International, Inc.	Services: Consumer	7.56% (LIBOR +4.75%)	11/20/2017	11/29/2024		2,565		2,522		2,543
Women's Care Florida LLP	Healthcare & Pharmaceuticals	7.02% (LIBOR +4.5%)	08/18/2017	09/29/2023		4,950		4,930		4,950
Yak Access LLC	Energy: Oil & Gas	7.52% (LIBOR +5%)	06/29/2018	07/02/2025		2,981		2,897		2,504
Zenith Merger Sub, Inc.	Services: Business	8.3% (LIBOR +5.5%)	12/22/2017	12/13/2023		2,970		2,945		2,970




Total United States of America							$	306,982	$	299,972

Total Senior Secured First Lien Term Loans							$	320,282	$	313,162

Second Lien Term Loans
United States of America
ABG Intermediate Holdings 2 LLC	Retail	10.27% (LIBOR +7.75%)	09/26/2017	09/29/2025		2,333	$	2,318	$	2,298
AQA Acquisition Holding, Inc	High Tech Industries	10.4% (LIBOR +8%)	10/01/2018	05/24/2024		1,000		990		1,000
CH Hold Corp	Automotive	9.77% (LIBOR +7.25%)	01/26/2017	02/03/2025		1,000		996		999
Constellis Holdings, LLC	Aerospace & Defense	11.52% (LIBOR +9%)	04/18/2017	04/21/2025		1,000		988		957
DigiCert, Inc.	High Tech Industries	10.52% (LIBOR +8%)	09/20/2017	10/31/2025		600		597		584
DiversiTech Holdings Inc	Consumer goods: Durable	10.3% (LIBOR +7.5%)	05/18/2017	06/02/2025		2,000		1,984		1,930
Gruden Acquisition Inc.	Transportation: Cargo	11.3% (LIBOR +8.5%)	07/31/2015	08/18/2023		500		486		501
Midwest Physician Administrative Services, LLC	Healthcare & Pharmaceuticals	9.5% (LIBOR +7%)	08/11/2017	08/15/2025		979		971		948
NextCare, Inc.	Healthcare & Pharmaceuticals	11.27% (LIBOR +8.75%)	02/13/2018	08/28/2023		1,000		987		1,030
Optiv Security Inc	High Tech Industries	9.77% (LIBOR +7.25%)	01/19/2017	01/31/2025		1,500		1,494		1,365
Park Place Technologies, LLC	High Tech Industries	10.52% (LIBOR +8%)	03/22/2018	03/29/2026		700		694		697
SESAC Holdco II LLC	Media: Diversified & Production	9.76% (LIBOR +7.25%)	02/13/2017	02/24/2025		1,000		992		985
TKC Holdings Inc	Services: Business	10.53% (LIBOR +8%)	01/31/2017	02/01/2024		1,850		1,839		1,825
TV Borrower US LLC	High Tech Industries	11.05% (LIBOR +8.25%)	02/16/2017	02/22/2025		1,000		988		1,006
Wash Multifamily Laundry Systems, LLC.	Services: Consumer	9.52% (LIBOR +7%)	05/04/2015	05/15/2023		425		424		412
Wash Multifamily Laundry Systems, LLC.	Services: Consumer	9.52% (LIBOR +7%)	05/04/2015	05/12/2023		75		74		72

Total United States of America							$	16,822	$	16,609

Total Second Lien Term Loans							$	16,822	$	16,609

Total Investments							$	337,104	$	329,771

Logan JV Loan Portfolio as of December 31, 2018

(dollar amounts in thousands)

Type of Investment/ Portfolio company	Industry	Interest Rate ⁽¹⁾	Initial Acquisition Date	Maturity Date	Principal	Amortized Cost		Fair Value ⁽²⁾

Cash and cash equivalents
Dreyfus Government Cash Management Fund							21,559		21,559
Other cash accounts							5,309		5,309
Total Cash and cash equivalents						$	26,868	$	26,868

⁽¹⁾	Variable interest rates indexed to 30-day, 60-day, 90-day or 180-day LIBOR rates, at the borrower’s option. LIBOR rates are subject to interest rate floors.

⁽²⁾	Represents fair value in accordance with ASC Topic 820.

⁽³⁾

⁽⁴⁾

⁽⁵⁾	Represents a delayed draw commitment of $1,538,462, which was unfunded as of December 31, 2018. Company pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁶⁾	Represents a delayed draw commitment of $125,217, which was unfunded as of December 31, 2018. Company pays 3.75% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁷⁾	Represents a delayed draw commitment of $588,235, which was unfunded as of December 31, 2018. Company pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁸⁾	Represents a delayed draw commitment of $564,516, which was unfunded as of December 31, 2018. Company does not pay unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁹⁾

⁽¹⁰⁾	Represents a delayed draw commitment of $294,107, which was unfunded as of December 31, 2018. Company pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽¹¹⁾	Unsettled trade that will start to accrue interest on when the trade settles. 3 month Libor as of December 31, 2018 is shown to reflect possible projected interest rate.

⁽¹²⁾	Unfunded amount will start to accrue interest when the borrower draws on the delayed draw/ revolver facility. 3 month Libor as of December 31, 2018 is shown to reflect possible projected interest rate.

Below is certain summarized financial information for Logan JV as of September 30, 2019 and December 31, 2018 and for the three and nine months ended September 30, 2019 and 2018:

Selected Balance Sheet Information


	As of September 30, 2019		As of December 31, 2018
	(Dollars in thousands)		(Dollars in thousands)
Assets:
Investments at fair value (cost of $344,486 and $337,104, respectively)	$	335,202	$	329,771
Cash		14,418		26,868
Other assets		1,383		2,194
Total assets	$	351,003	$	358,833
Liabilities:
Loans payable reported net of unamortized debt issuance costs	$	232,284	$	239,356
Payable for investments purchased		11,426		7,342
Distribution payable		3,750		3,360
Other liabilities		2,630		2,744
Total liabilities	$	250,090	$	252,802
Members' capital	$	100,913	$	106,031
Total liabilities and members' capital	$	351,003	$	358,833

Selected Statement of Operations Information

	For the three months ended September 30, 2019			For the three months ended September 30, 2018			For the nine months ended September 30, 2019			For the nine months ended September 30, 2018
	(Dollars in thousands)			(Dollars in thousands)			(Dollars in thousands)			(Dollars in thousands)
Interest income	$	6,311		$	6,011		$	19,231		$	15,974
Fee income		50			(6	)		104			102
Total revenues		6,361			6,005			19,335			16,076
Credit facility expenses ⁽¹⁾		2,883			2,681			9,682			6,821
Other fees and expenses		296			298			331			854
Total expenses		3,179			2,979			10,013			7,675
Net investment income		3,182			3,026			9,322			8,401
Net realized (loss) gain		5			92			(4,040	)		371
Net change in unrealized (depreciation) appreciation on investments		(3,012	)		201			(1,950	)		(724	)
Net increase in members' capital from operations	$	175		$	3,319		$	3,332		$	8,048

⁽¹⁾	As of September 30, 2019, Logan JV had $234,007 of outstanding debt under its credit facility with an effective interest rate of 4.58% per annum. As of December 31, 2018, Logan JV had $241,679 of outstanding debt under its credit facility with an effective interest rate of 4.72% per annum.

Asset Quality

We employ the use of board observation and information rights, regular dialogue with company management and sponsors, and detailed internally generated monitoring reports to actively monitor performance. Additionally, THL Credit has developed a monitoring template that promotes compliance with these standards and that is used as a tool to assess investment performance relative to plan.

As part of the monitoring process, the Advisor assesses the risk profile of each of our investments and assigns each portfolio investment a score of a 1, 2, 3, 4 or 5

The investment performance scores, are as follows:

1 – The portfolio investment is performing above our underwriting expectations.

2 – The portfolio investment is performing as expected at the time of underwriting. All new investments are initially scored a 2.

3 – The portfolio investment is operating below our underwriting expectations and requires closer monitoring. The company may be out of compliance with financial covenants, however, principal or interest payments are generally not past due.

4 – The portfolio investment is performing materially below our underwriting expectations and returns on our investment are likely to be impaired. Principal or interest payments may be past due, however, full recovery of principal and interest payments are expected.

5 – The portfolio investment is performing substantially below expectations and the risk of the investment has increased substantially. The company is in payment default and the principal and interest payments are not expected to be repaid in full.

For purposes of clarity, underwriting as referenced herein may be redetermined after the initial investment as a result of a transformative credit event or other material event whereby such initial underwriting is deemed by the Advisor to be no longer appropriate for the purpose of assessing investment performance relative to plan. For any investment receiving a score of a 3 or lower THL Credit Advisors will increase their level of focus and prepare regular updates for the investment committee summarizing current operating results, material impending events and recommended actions.

The Advisor monitors and, when appropriate, changes the investment scores assigned to each investment in our portfolio. In connection with our investment valuation process, the Advisor and board of directors review these investment scores on a quarterly basis. Our average portfolio company investment score was 2.19 and 2.05 at September 30, 2019 and December 31, 2018, respectively. The following is a distribution of the investment scores of our portfolio companies at September 30, 2019 and December 31, 2018 (in millions):

	September 30, 2019										December 31, 2018
Investment Score	Amortized Cost		% of Total Portfolio based on Amortized Cost			Fair Value		% of Total Portfolio based on FV			Amortized Cost		% of Total Portfolio based on Amortized Cost			Fair Value		% of Total Portfolio based on FV
1^(a)	$	49.5		11.1	%	$	52.0		12.8	%	$	122.7		22.7	%	$	132.6		26.9	%
2^(b)		241.2		53.9	%		230.4		57.1	%		242.1		44.9	%		232.7		47.1	%
3^(c)		139.0		31.1	%		113.2		28.1	%		135.0		25.0	%		109.2		22.1	%
4^(d)		—		0.0	%		—		0.0	%		—		0.0	%		—		0.0	%
5^(e)		17.5		3.9	%		7.9		2.0	%		39.8		7.4	%		19.2		3.9	%
Total	$	447.2		100.0	%	$	403.5		100.0	%		539.6		100.0	%		493.7		100.0	%

^(a)	As of September 30, 2019 and December 31, 2018, Investment Score “1” included $5.3 million and $30.6 million, respectively, of loans to companies in which we also hold equity securities.

^(b)	As of September 30, 2019 and December 31, 2018, Investment Score “2” included $37.6 million and $47.2 million, respectively, of loans to companies in which we also hold equity securities.

^(c)	As of September 30, 2019 and December 31, 2018, Investment Score “3” included $82.9 million and $65.8 million, respectively, of loans to companies in which we also hold equity securities.

^(d)	As of September 30, 2019 and December 31, 2018, Investment Score “4” included no loans to companies in which we also hold equity securities.

^(e)	As of September 30, 2019 and December 31, 2018, Investment Score “5” included $7.9 million and $18.7, respectively, of loans to companies in which we also hold equity securities.

Loans are placed on non-accrual status when principal or interest payments are past due 30 days or more and/or when it is no longer probable that principal or interest will be collected. However, we may make exceptions to this policy if the loan has sufficient collateral value and is in the process of collection. As of September 30, 2019, we had loans on non-accrual status with an amortized cost basis of $14.5 million and fair value of $7.9 million. As of December 31, 2018, we had loans on non-accrual status with an amortized cost basis of $38.0 million and fair value of $18.1 million. For additional information, please refer to the Consolidated Schedules of Investments as of September 30, 2019 and December 31, 2018. We record the reversal of any previously accrued income against the same income category reflected in the Consolidated Statement of Operations.

Results of Operations

Comparison of the three and nine months ended September 30, 2019 and 2018

Investment Income

We generate revenues primarily in the form of interest on the debt and other income-producing securities we hold. Other income-producing securities include investments in funds. Our investments in fixed income instruments generally have an expected maturity of five to seven years, and typically bear interest at a fixed or floating rate. Interest on our debt securities is generally payable quarterly. Payments of principal of our debt investments may be amortized over the stated term of the investment, deferred for several years or due entirely at maturity. In some cases, our debt instruments and preferred stock investments may defer payments of dividends or pay interest in-kind, or PIK. Any outstanding principal amount of our debt securities and any accrued but unpaid interest will generally become due at the maturity date. The level of interest income we receive is directly related to the balance of interest-bearing investments multiplied by the weighted average yield of our investments. In addition to interest income, we may receive dividends and other distributions related to our equity investments. We may also generate revenue in the form of fees from the management of Greenway and Greenway II, prepayment premiums, commitment, loan origination, structuring or due diligence fees, exit fees, amendment fees, portfolio company administration fees, fees for providing significant managerial assistance and consulting fees. These fees may or may not be recurring in nature as part of our normal business operations. We will disclose below what amounts, if any, are material non-recurring fees that have been recorded as income during each respective period.

The following shows the breakdown of investment income for the three and nine months ended September 30, 2019 and 2018 (in millions):

	Three months ended September 30,				Nine months ended September 30,
	2019		2018		2019		2018
Interest income on debt securities
Cash interest	$	7.7	$	10.1	$	24.5	$	33.7
PIK interest		0.5		0.9		1.9		1.6
Prepayment premiums		0.2		—		0.4		0.4
Net accretion of discounts and other fees		0.3		0.7		0.9		2.5
Total interest on debt securities		8.7		11.7		27.7		38.2
Dividend income ⁽¹⁾		3.6		3.3		11.1		8.8
Interest income on other income-producing securities ⁽¹⁾		0.1		0.6		0.4		2.4
Fees related to non-controlled, affiliated investments		0.1		0.2		0.5		0.7
Other income ⁽²⁾		0.3		0.3		2.6		1.0
Total investment income	$	12.8	$	16.1	$	42.3	$	51.1

(1)	Includes dividend income from preferred and common equity interests in C&K Market, Inc., Copperweld Bimetallics, LLC, and Logan JV.

(2)

For three months ended September 30, 2019 and 2018, we recognized $0.0 million and $0.1 million, respectively, of non-recurring fees from portfolio companies. For the nine months ended September 30, 2019 and 2018, we recognized $1.5 million and $0.1 million, respectively, of non-recurring fees from portfolio companies.

The decrease in investment income between the three and nine month periods was primarily due to the contraction in overall investment portfolio since September 30, 2018, which led to lower interest income, offset by higher dividend income from certain equity investments and non-recurring other fee income.

The following shows a rollforward of PIK income activity for the three and nine months ended September 30, 2019 and 2018 (in millions):

	Three months ended September 30,						Nine months ended September 30,
	2019			2018			2019			2018
Accumulated PIK balance, beginning of period	$	4.7		$	3.7		$	3.9		$	3.9
PIK income capitalized/receivable		0.6			0.9			2.0			1.8
PIK reduction due to sale		(0.1	)		—			(0.2	)		—
PIK received in cash from repayments		—			(0.2	)		(0.5	)		(1.3	)
Accumulated PIK balance, end of period	$	5.2		$	4.4		$	5.2		$	4.4

In certain investment transactions, we may provide advisory services. For services that are separately identifiable and external evidence exists to substantiate fair value, income is recognized as earned. We earned no income from advisory services related to portfolio companies for the three and nine months ended September 30, 2019 and 2018.

Expenses

Our primary operating expenses include the payment of base management fees, borrowing expenses related to our credit facilities and Notes, and expenses reimbursable under the investment management agreement and the allocable portion of overhead under the administration and investment management agreements (“administrator expenses”). The base management fee compensates the Advisor for work in identifying, evaluating, negotiating, closing and monitoring our investments. Our investment management agreement and administration agreement provides that we will reimburse the Advisor for costs and expenses incurred by the Advisor for facilities, office equipment and utilities allocable to the performance by the Advisor of its duties under the agreements, as well as any costs and expenses incurred by the Advisor relating to any administrative or operating services provided by the Advisor to us. We bear all other costs and expenses of our operations and transactions.

The following shows the breakdown of expenses for the three and nine months ended September 30, 2019 and 2018 (in millions):

	For the three months ended September 30,					For the nine months ended September 30,
	2019		2018			2019			2018
Expenses
Interest and fees on Borrowings ^(a)	$	3.4	$	3.8		$	11.0		$	11.8
Base management fees		1.2		2.2			4.9			6.9
Incentive fees		—		1.7			—			1.6
Other expenses		0.8		1.0			2.9			3.1
Administrator expenses		0.4		0.5			1.2			1.6
Total expenses		5.8		9.2			20.0			25.0
Management fee waiver		—		—			(0.5	)		—
Incentive fee waiver		—		(1.7	)		—			(1.7	)
Total expenses, net of fee waivers		5.8		7.5			19.5			23.3
Income tax provision, excise and other taxes^(b)		0.1		—			0.4			0.2
Total expenses after taxes	$	5.9	$	7.5		$	19.9		$	23.5

^(a)	Interest, fees and amortization of deferred financing costs related to our Revolving Facility and Notes.

^(b)	Amounts include the income taxes related to earnings by our consolidated corporate subsidiaries established to hold equity or equity-like portfolio company investments organized as pass-through entities and excise taxes related to our undistributed earnings and other taxes.

The decrease in operating expenses between the three and nine month periods was due primarily to lower base management fees as a result of portfolio contraction, lower administrator expenses allocated from the Advisor and lower interest on Borrowings as a result of portfolio contraction and lower borrowing costs.

We expect certain of our operating expenses, including administrator expenses, professional fees and other general and administrative expenses to decline as a percentage of our total assets during periods of growth and increase as a percentage of our total assets during periods of asset declines.

Net Investment Income

Net investment income was $6.9 million, or $0.22 per common share based on a weighted average of 30,991,585 common shares outstanding for the for the three months ended September 30, 2019, as compared to $8.6 million, or $0.26 per common share based on a weighted average of 32,673,590 common shares outstanding for the three months ended September 30, 2018.

Net investment income was $22.4 million, or $0.71 per common share based on a weighted average of 31,678,632 common shares outstanding for the nine months ended September 30, 2019 as compared to $27.5 million, or $0.84 per common share based on a weighted average of 32,673,590 common shares outstanding for the nine months ended September 30, 2018.

The decrease in net investment income between the three and nine month periods is primarily attributable to a decrease in interest on debt and other income-producing investments due to portfolio contraction offset by lower base net management fees, administrator expenses, and interest and fees on Borrowings.

Net Realized Gains and Losses on Investments, net of income tax provision

We measure realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, using the specific identification method, without regard to unrealized appreciation or depreciation previously recognized.

The following shows the breakdown of net realized gains and losses for the three and nine months ended September 30, 2019 and 2018 (in millions):

	For the three months ended September 30,						For the nine months ended September 30,
	2019			2018				2019			2018
Aerogroup International Inc. ⁽¹⁾	$	—		$	(0.4	)		$	(2.2	)	$	(6.7	)
Alex Toys, LLC⁽²⁾		—			—				(1.4	)		—
Charming Charlie LLC ⁽³⁾		(24.6	)		—				(24.6	)		(11.4	)
Copperweld Bimetallics LLC ⁽⁴⁾		16.7			—				16.7			—
Fairstone Financial Inc.⁽⁵⁾		0.2			—				0.2			0.2
Gryphon Partners 3.5, L.P.		—			0.1				—			0.2
Home Partners of America, Inc.⁽⁶⁾		—			—				0.0			—
LAI International, Inc. ⁽⁷⁾		—			—				(22.7	)		—
Specialty Brands Holdings, LLC ⁽⁸⁾		—			—				—			(21.0	)
THL Credit Logan JV LLC		—			(0.1	)			—			0.2
Tri-Starr Management Services, Inc.⁽⁹⁾		—			—				0.4			—
YP Equity Investors, LLC		—			—				—			—
Other		0.0			0.1				(0.1	)		—
Net realized losses	$	(7.7	)	$	(0.3	)		$	(33.7	)	$	(38.5	)

⁽¹⁾		In March 2018, Aerogroup International Inc. was sold through bankruptcy proceedings and we received $2.5 million in proceeds with an additional $8.0 million reflected as escrow receivable. Subsequently, we collected the outstanding escrow proceeds in cash through June 2019 realizing additional losses to reflect amounts collected and associated expenses.
⁽²⁾		On January 11, 2019, we sold our first lien senior secured term loan in Alex Toys, LLC for total proceeds of $7.7 million. The realized loss of $1.5 million was offset by a corresponding change in unrealized appreciation in the same amount.
⁽³⁾		On July 11, 2019, Charming Charlie LLC filed for Chapter 11 bankruptcy protection in Delaware with plans to liquidate the company and any of its remaining assets. In connection with the liquidation, we removed Charming Charlie LLC from Investments, at fair value and reflected $4.4 million of the expected liquidation proceeds as Escrow and other receivable on the Consolidated Statements of Assets and Liabilities as of September 30, 2019. As of the reporting date, Charming Charlie LLC has ceased its operations and has been actively liquidating its assets. We expect to collect our share of liquidation proceeds in the near term. The realized loss of $24.6 million was offset by a corresponding change in unrealized appreciation. For further detail on the restructuring loss incurred in 2018, please refer to prior year filings.

⁽⁴⁾		On September 28, 2019, we were repaid on our second lien term loan in connection with the sale of our controlling common and preferred equity positions in Copperweld Bimetallics LLC with proceeds received of $32.5 million and expects an additional $2.1 million in escrow proceeds that are reflected as Escrow and other receivables on the Consolidated Statements of Assets and Liabilities as of September 30, 2019. The escrow proceeds are expected to be received throughout 2020 and 2021. The realized gain was largely offset by a corresponding change in unrealized depreciation.
⁽⁵⁾		Includes the impact of foreign exchange gain.
⁽⁶⁾		On February 8, 2019, we sold our first lien senior secured term loan in Home Partners of America, Inc. for total proceeds of $7.7 million.
⁽⁷⁾		In May 2019, we received $16.8 million in proceeds from a sale of certain business segments of LAI International Inc. An additional $4.4 million in proceeds reflected as Escrow and other receivables on the Consolidated Statements of Assets and Liabilities as of September 30, 2019 are expected from a sale of another segment of the business and realization of certain receivables. The realized loss of $22.7 million was largely offset by a corresponding change unrealized appreciation.
⁽⁸⁾		On June 29, 2018, as part of restructuring the business, we agreed to sell our second lien term loan for $0.5 million in cash and received nominal equity interests in an affiliated entity. In connection with the sale, during the three months ended June 30, 2018, we recognized a loss of $21.0 million and reversed $20.3 million of unrealized depreciation.
⁽⁹⁾		On February 5, 2019, we received an additional $0.4 million in cash proceeds related to the final purchase price true-up in connection with the sale of our investment in Tri-Starr Management Services, Inc. in October 2018. These proceeds were in addition to the escrow receivable balance.

Net Change in Unrealized Appreciation (Depreciation) of Investments

Net change in unrealized appreciation primarily reflects the change in portfolio investment values during the reporting period, including the reversal of previously recorded appreciation or depreciation when gains or losses are realized.

The following shows the breakdown in the changes in unrealized appreciation of investments for the three and nine months ended September 30, 2019 and 2018 (in millions):

	Three months ended September 30,						Nine months ended September 30,
	2019			2018			2019			2018
Gross unrealized appreciation on investments	$	1.7		$	5.8		$	4.8		$	22.6
Gross unrealized depreciation on investments		(9.6	)		(9.0	)		(17.5	)		(29.7	)
Reversal of prior period net unrealized depreciation upon a realization		8.9			-			15.1			30.3
Total	$	1.0		$	(3.2	)	$	2.4		$	23.2

The net change in unrealized appreciation (depreciation) on our investments for the three and nine months ended September 30, 2019 and 2018 was the result of the write-down of investments offset by reversal of net unrealized losses due to realization of certain portfolio investments and the performance of certain portfolio investments, including controlled investments. See Schedule 12-14 in the accompanying notes to the consolidated financial statements.

For the three and nine months ended September 30, 2019, the largest reduction in value for the investments still held as of the reporting date was related to Holland Intermediate Acquisition Corp. and a market driven reduction of Logan JV, an investment where we hold a controlling equity interest. This was offset by a net increase in the value of approximately $13.8 million due to realizations: a reversal of prior period unrealized depreciation to realized losses for Charming Charlie Inc. and LAI International Inc. and a reversal of unrealized appreciation to realized gains for Copperweld Bimetallics LLC (See “Net Realized Gains and Losses on Investments” above).

Provision for Taxes on Unrealized Gains on Investments

Certain consolidated subsidiaries of ours are subject to U.S. federal and state income taxes. These taxable entities are not consolidated with us for income tax purposes and may generate income tax liabilities or assets from temporary differences in the recognition of items for financial reporting and income tax purposes at the subsidiaries. For the three months ended September 30, 2019 and 2018, we recognized a benefit (provision) for tax on unrealized gains on investments of $0.1 million and $(0.2) million for consolidated subsidiaries, respectively. For the nine months ended September 30, 2019 and 2018, we recognized a benefit (provision) for tax on unrealized gains on investments of $0.3 and $(0.3) million for consolidated subsidiaries, respectively. As of September 30, 2019 and December 31, 2018, $1.8 million and $2.0 million, respectively, were included in deferred tax liability on the Consolidated Statements of Assets and Liabilities relating to deferred tax on unrealized gain on investments. The change in provision for tax on unrealized gains on investments relates primarily to changes to the unrealized appreciation (depreciation) of the investments held in these taxable consolidated subsidiaries, other temporary differences and a change in the prior year estimates received from certain portfolio companies.

Net Increase (Decrease) in Net Assets Resulting from Operations

Net increase (decrease) in net assets resulting from operations totaled $0.3 million, or $0.01 per common share based on a weighted average of 30,991,585 common shares for the three months ended September 30, 2019, as compared to $4.7 million, or $0.14 per common share based on a weighted average of 32,673,590 common shares for the three months ended September 30, 2018, respectively.

Net (decrease) increase in net assets resulting from operations totaled $(9.2) million, or $(0.29) per common share based on a weighted average of 31,678,632 common shares for the nine months ended September 30, 2019, as compared to $12.5 million, or $0.38 per common share based on a weighted average of 32,673,590 common shares for the nine months ended September 30, 2018, respectively.

The changes in net assets from operations between the three months ended September 30, 2019 and 2018 and the nine months ended September 30, 2019 and 2018 is due primarily to lower interest income as a result of portfolio contraction and the increase of the realized and unrealized losses in the portfolio and the related tax impact.

Financial condition, liquidity and capital resources

Cash Flows from Operating and Financing Activities

Our liquidity and capital resources are derived from our borrowings, equity raises and cash flows from operations, including investment sales and repayments, and investment income earned. Our primary use of funds from operations includes investments in portfolio companies, payment of distributions to the holders of our common stock and payments of fees and other operating expenses we incur. We have used, and expect to continue to use, our borrowings and the proceeds from the turnover in our portfolio and from public and private offerings of securities to finance our investment objectives, to the extent permitted by the 1940 Act.

We may raise additional equity or debt capital through both registered offerings off our shelf registration statement and private offerings of securities, by securitizing a portion of our investments or borrowings from credit facilities. To the extent we determine to raise additional equity through an offering of our common stock at a price below net asset value, existing investors will experience dilution.

In December 2015 and November 2016, we closed a public debt offering selling $35.0 million and $25.0 million, respectively, of Notes due in 2022, or the 2022 Notes, including the exercise of the overallotment option, through a group of underwriters, less an underwriting discount, and received net proceeds of $34.0 million and $24.3 million, respectively. In October 2018 we closed a public debt offering selling $51.6 million of Notes due in 2023 or the 2023 Notes, including the exercise of the overallotment option, through a group of underwriters, less an underwriting discount, and received net proceeds of $50.1 million. The proceeds received from the issuance of the 2023 Notes were primarily used to repay the 2021 Notes. Collectively, the 2022 Notes and 2023 Notes are referred to as the Notes.

We borrowed $78.5 million under our Revolving Facility for the nine months ended September 30, 2019 and repaid $117.5 million (includes CAD $19.4 million converted to USD $14.8 million) on our Revolving Facility from proceeds received from prepayments and sales and investment income. We borrowed $69.5 million under our Revolving Facility for the nine months ended September 30, 2018 and repaid $123.1 million on our Revolving Facility (includes CAD $10.0 million converted to USD $7.7 million) from proceeds received from prepayments and sales and investment income.

Our operating activities (used) provided cash of $78.3 million and $83.1 million for the nine months ended September 30, 2019 and 2018, respectively, primarily in connection with the purchase and sales of portfolio investments. For the nine months ended September 30, 2019, our financing activities included net borrowings of $39.0 million on our Revolving Facility, used $19.9 million for distributions to stockholders, $11.6 million to repurchase common stock and $0.3 million for the payment of financing costs. For the nine months ended September 30, 2018, our financing activities included net repayments of $53.6 million on our Revolving Facility and used $26.5 million for distributions to stockholders.

As of September 30, 2019 and December 31, 2018, we had cash of $14.3 million and $6.9 million, respectively. We had no cash equivalents as of September 30, 2019 and December 31, 2018.

We believe cash balances, our Revolving Facility capacity and any proceeds generated from the sale or pay down of investments provides us with the liquidity necessary to acquit our pipeline in the near future.

Borrowings

The following shows a summary of our Borrowings as of September 30, 2019 and December 31, 2018 (in millions):

	As of
	September 30, 2019									December 31, 2018
Facility	Commitments		Borrowings Outstanding ⁽¹⁾		Weighted Average Borrowings Outstanding ⁽²⁾⁽³⁾		Weighted Average Interest Rate ⁽⁸⁾			Commitments		Borrowings Outstanding ⁽⁴⁾		Weighted Average Borrowings Outstanding ⁽³⁾⁽⁵⁾		Weighted Average Interest Rate ⁽⁸⁾
Revolving Facility ⁽⁶⁾⁽⁷⁾	$	190.0	$	69.2	$	103.2		4.56	%	$	275.0	$	107.7	$	135.1		4.90	%
2021 Notes		-		-		-		-			-		-		42.4		-
2022 Notes		60.0		60.0		60.0		6.75	%		60.0		60.0		15.0		6.75	%
2023 Notes		51.6		51.6		51.6		6.13	%		51.6		51.6		12.1		6.13	%
Total	$	301.6	$	180.8	$	214.8		5.73	%	$	386.6	$	219.3	$	204.6		5.70	%

⁽¹⁾	As of September 30, 2019, excludes deferred financing costs of $1.2 million for the 2022 Notes and $1.7 for the 2023 Notes, respectively, presented as a reduction to the respective balances outstanding in the Consolidated Statements of Assets and Liabilities.

⁽²⁾	Represents the weighted average borrowings outstanding for the nine months ended September 30, 2019.

⁽³⁾	Canadian denominated borrowings are converted to USD using the current quarter-end spot rate for purposes of this calculation.

⁽⁴⁾	As of December 31, 2018, excludes deferred financing costs of $1.4 million for the 2022 Notes and $2.1 million for the 2023 Notes presented as a reduction to the respective balances outstanding in the Consolidated Statements of Assets and Liabilities.

⁽⁵⁾	Represents the weighted average borrowings outstanding for the year ended December 31, 2018.

⁽⁶⁾

We may borrow amounts in U.S. dollars or certain other permitted currencies. As of September 30, 2019, we had no Canadian denominated debt outstanding on our Revolving Facility. As of December 31, 2018, we had outstanding debt denominated in CAD of $19.4 million on our Revolving Facility. The CAD was converted into USD at a spot exchange rate of $0.73 CAD to $1.00 USD as of December 31, 2018.

⁽⁷⁾	As part of Amendment No.1 to Second Amended and Restated Senior Secured Revolving Credit Agreement and Third Amended and Restated Guarantee, Pledge and Security Agreement (“Amendment No.1”) dated March 26, 2019, the revolver commitments have been reduced to $190.0 million from $275.0 million.

⁽⁸⁾	Represents the weighted average interest rate as of September 30, 2019 and December 31, 2018.

Credit Facility

On December 15, 2017, we entered into an amendment, or the Revolving Amendment, to our existing revolving credit agreement, or Revolving Facility. The Revolving Amendment revised the Revolving Facility dated August 19, 2015 to, among other things, extend the maturity date from August 2019 to December 2022 (with a one year term out period beginning in December 2021). The one year term out period is the one year anniversary between the revolver termination date, or the end of the availability period, and the maturity date. During this time, we are required to make mandatory prepayments on our loans from the proceeds we receive from the sale of assets, extraordinary receipts, returns of capital or the issuances of equity or debt. The Revolving Amendment also reduced the size of the revolver commitments from $303.5 million to $275.0 million and terminated the $75.0 million term loan facility. On March 26, 2019, we entered into Amendment No. 1 which amended our Revolving Facility to, among other things, reduce the size of the commitments thereunder to $190.0 million, provide a $20.0 million letter of credit subfacility and lower the testing levels of certain financial covenants.

The Revolving Facility, denominated in USD, has an interest rate of LIBOR plus 2.5% (with no LIBOR floor). The non-use fee is 1.0% annually if we use 35% or less of the Revolving Facility and 0.50% annually if we use more than 35% of the Revolving Facility. We elect the LIBOR rates on the loans outstanding on our Revolving Facility, which has a LIBOR period that is one, two, three or nine months. The LIBOR rate on the USD borrowings outstanding on our Revolving Facility had a one month LIBOR period as of September 30, 2019. A recent amendment to the Revolving Facility included a provision to provide for a replacement rate for LIBOR in anticipation of the expected LIBOR phase-out.

As of September 30, 2019, we had USD borrowings of $69.2 million outstanding under the Revolving Facility with a quarter-end interest rate of 4.56%. The borrowings denominated in CAD are translated into USD based on the spot rate at each balance sheet date. The impact resulting from changes in foreign exchange rates on the Revolving Facility borrowings is included in unrealized appreciation (depreciation) on foreign currency borrowings in our Consolidated Statements of Operations. As of September 30, 2019, we had no CAD borrowings outstanding.

The Revolving Facility includes an accordion feature permitting us to expand the Revolving Facility, if certain conditions are satisfied; provided, however, that the aggregate amount of the Revolving Facility, collectively, is capped. The Revolving Amendment revised the cap from $600.0 million to $500.0 million.

The Revolving Facility generally requires payment of interest on a quarterly basis for ABR loans (commonly based on the Prime Rate or the Federal Funds Rate), and at the end of the applicable interest period for Eurocurrency loans bearing interest at LIBOR or CDOR, the interest rate benchmarks used to determine the variable rates paid on the Revolving Facility. All outstanding principal is due upon each maturity date. The Revolving Facility also requires a mandatory prepayment of interest and principal upon certain customary triggering events (including, without limitation, the disposition of assets or the issuance of certain securities).

Borrowings under the Revolving Facility are subject to, among other things, a minimum borrowing/collateral base. The facilities have certain collateral requirements and/or covenants, including, but limited to, covenants related to: (a) limitations on the incurrence of additional indebtedness and liens, (b) limitations on certain investments, (c) limitations on certain restricted payments, (d) limitations on the creation or existence of agreements that prohibit liens on certain properties of ours and our subsidiaries, and (e) compliance with certain financial maintenance standards including (i) minimum stockholders’ equity, (ii) a ratio of total assets (less total liabilities not represented by senior securities) to the aggregate amount of senior securities representing indebtedness, of us and our consolidated subsidiaries, of not less than 2.00: 1.00, (iii) minimum liquidity, (iv) minimum net worth, and (v) a consolidated interest coverage ratio. In addition to the financial maintenance standards, described in the preceding sentence, borrowings under the facilities (and the incurrence of certain other permitted debt) are subject to compliance with a borrowing base that applies different advance rates to different types of assets in our portfolio.

We cannot be assured that we will be able to borrow funds under the Revolving Facility at any particular time or at all. We are currently in compliance with all financial covenants under the Revolving Facility.

As of September 30, 2019 and December 31, 2018, the carrying amount of our outstanding Revolving Facility approximated fair value. The fair value of our Revolving Facility is determined in accordance with ASC 820, which defines fair value in terms of the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value of our Revolving Facility is estimated based upon market interest rates and entities with similar credit risk. As of September 30, 2019 and December 31, 2018, the Revolving Facility would be deemed to be Level 3 of the fair value hierarchy.

Interest expense and related fees, excluding amortization of deferred financing costs, of $1.2 million and $1.6 million were incurred in connection with the Revolving Facility during the three months ended September 30, 2019 and 2018, respectively. Interest expense and related fees, excluding amortization of deferred financing costs, of $4.3 million and $5.3 million were incurred in connection with the Revolving Facility during the nine months ended September 30, 2019 and 2018, respectively.

Amortization of deferred financing costs of $0.1 million and $0.1 million, respectively, were incurred in connection with the Revolving Facility for the three months ended September 30, 2019 and 2018. Amortization of deferred financing costs of $0.8 million, which included a one-time accelerated amortization of $0.4 million in connection with a reduction in the revolver commitment size, and $0.4 million, respectively, were incurred in connection with the Revolving Facility for the nine months ended September 30, 2019 and 2018. As of September 30, 2019, we, had $1.8 million of deferred financing costs related to the Revolving Facility, which is presented as an asset. As of December 31, 2018, we, had $2.3 million of deferred financing costs related to the Revolving Facility, which is presented as an asset.

Recent legislation has modified the 1940 Act by allowing a BDC to increase the maximum amount of leverage it may incur under the 1940 Act from an asset coverage ratio of 200% to an asset coverage ratio of 150%, if certain requirements are met. At our Annual Meeting of Stockholders on June 14, 2019, stockholders approved a proposal to reduce our asset coverage ratio to 150%. Such asset coverage ratio became effective on June 15, 2019. We may be able to increase our leverage up to an amount that reduces our asset coverage to 150% once we amend the Revolving Facility, which would require our lender consent. Our asset coverage as of September 30, 2019 was in excess of 200%.

Notes

In December 2015 and November 2016, we completed a public offering of $35.0 million and $25.0 million, respectively, in aggregate principal amount of 6.75% notes due 2022, or the 2022 Notes. The 2022 Notes mature on December 30, 2022 and may be redeemed in whole or in part at any time or from time to time at our option on or after December 30, 2018. The 2022 Notes bear interest at a rate of 6.75% per year payable quarterly on March 30, June 30, September 30 and December 30, of each year, beginning March 30, 2016 and trade on the New York Stock Exchange under the trading symbol “TCRZ”.

On October 5, 2018, we completed a public offering of $50.0 million in aggregate principal amount of 6.125% notes due 2023. The 2023 Notes mature on October 30, 2023, and may be redeemed in whole or in part at any time or from time to time at our option on or after October 30, 2021. The 2023 Notes bear interest at a rate of 6.125% per year payable quarterly on March 30, June 30, September 30 and December 30, of each year, beginning December 30, 2018 and trade on the New York Stock Exchange under the trading symbol “TCRW”. On October 16, 2018, the underwriters exercised their option to purchase an additional $1.6 million to cover overallotments. The proceeds from this public offering were used to redeem the previously issued notes due 2021, or 2021 Notes and partially repay the Revolving Facility. The redemption of the 2021 Notes was completed on November 5, 2018. As a result of this redemption, we recognized approximately $0.9 million of one-time costs from the accelerated amortization of deferred financing costs related to the 2021 Notes during 2018. We refer to the 2022 Notes and 2023 Notes collectively as the Notes. The 2021 Notes are included and the 2023 Notes are excluded under the definition for the prior years presented.

The Notes are our direct unsecured obligations and rank: (i) pari passu with our other outstanding and future senior unsecured indebtedness; (ii) senior to any of our future indebtedness that expressly provides it is subordinated to the Notes; (iii) effectively subordinated to all our existing and future secured indebtedness (including indebtedness that is initially unsecured to which we subsequently grant security), to the extent of the value of the assets securing such indebtedness, including without limitation, borrowings under our Revolving Facility; (iv) structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries.

The Base Indenture, as supplemented by the First, Second and Third Supplemental Indentures (the “Indenture”), contains certain covenants including covenants requiring us to comply with (regardless of whether it is subject to) Section 18 (a)(1)(A) as modified by Section 61(a)(1) of the 1940 Act or any successor provisions, whether or not we continue to be subject to such provisions of the 1940 Act, but giving effect, in either case, to any exemptive relief granted to us by the SEC. Currently these provisions generally prohibit us from making additional borrowings, including through the issuance of additional debt or the sale of additional debt securities, unless our asset coverage, as defined in the 1940 Act, equals at least 150% after such borrowings. These covenants are subject to important limitations and exceptions that are described in the Indenture. The Indenture provides for customary events of default and further provides that the Trustee or the holders of 25% in aggregate principal amount of the outstanding Notes in a series may declare such Notes immediately due and payable upon the occurrence of any event of default after expiration of any applicable grace period. As of September 30, 2019, we were in compliance with the terms of the Base Indenture and the First, Second and Third Supplemental Indentures governing the Notes. See Note 7 to our consolidated financial statements for more detail on the Notes.

As of September 30, 2019, the carrying amount and fair value of our Notes was $111.6 million and $114.4 million, respectively. As of December 31, 2018, the carrying value and fair value of our Notes was $111.6 million and $111.0 million, respectively. The fair value of our Notes is determined in accordance with ASC 820, which defines fair value in terms of the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value of the Notes is based on the closing price of the security, which is a Level 2 input under ASC 820 due to the trading volume.

In connection with the issuance of the 2022 and 2023 Notes, we incurred $4.8 million of fees and expenses. Any of these deferred financing costs are presented as a reduction to the notes payable balance and are being amortized using the effective interest method over the term of the Notes. For the three months ended September 30, 2019 and 2018, we amortized approximately $0.2 million and $0.2 million of deferred financing costs, respectively, which is reflected in amortization of deferred financing costs on the Consolidated Statements of Operations. For the nine months ended September 30, 2019 and 2018, we amortized approximately $0.6 million and $0.5 million of deferred financing costs, respectively, which is reflected in amortization of deferred financing costs on the Consolidated Statements of Operations. As of September 30, 2019 and December 31, 2018, we had $2.9 million and $3.5 million, respectively, of remaining deferred financing costs on the Notes, which reduced the notes payable balance on our Consolidated Statements of Assets and Liabilities.

For the three months ended September 30, 2019 and 2018, we incurred interest expense on the Notes of approximately $1.8 million and $1.9 million, respectively. For the nine months ended September 30, 2019 and 2018, we incurred interest expense on the Notes of approximately $5.4 million and $5.6 million, respectively.

Commitments and Contingencies and Off-Balance Sheet Arrangements

From time to time, we, or the Advisor, may become party to legal proceedings in the ordinary course of business, including proceedings related to the enforcement of our rights under contracts with our portfolio companies. Neither we, nor the Advisor, are currently subject to any material legal proceedings.

Unfunded commitments to provide funds to portfolio companies are not reflected in our Consolidated Statements of Assets and Liabilities. Our unfunded commitments may be significant from time to time. These commitments will be subject to the same underwriting and ongoing portfolio maintenance as are the on-balance sheet financial instruments that we hold. Since these commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. We intend to use cash flow from normal and early principal repayments and proceeds from borrowings and offerings to fund these commitments.

As of September 30, 2019 and December 31, 2018, we have the following unfunded commitments to portfolio companies (in millions):

	As of
	September 30, 2019		December 31, 2018

Unfunded delayed draw facilities
Barry's Bootcamp Holdings, LLC		2.7		—
BCDI Rodeo Dental Buyer, LLC		2.0		—
Certify, Inc.		0.1		—
Charming Charlie LLC⁽²⁾		—		8.3
Home Partners of America, Inc.		—		5.9
PDFTron Systems		1.1
Simplicity Financial Marketing Holdings Inc.		1.0		—
Women's Health USA, Inc.		0.0		—
		6.9		14.2
Unfunded revolving commitments
1-800 Hansons, LLC ⁽¹⁾		0.3		0.1
ABC Legal Intermediate Holding II, LLC		0.7		—
BCDI Rodeo Dental Buyer, LLC		1.4		—
Certify, Inc.		0.1		—
Communication Technology Intermediate		0.8		—
EBS Intermediate LLC		1.7		1.7
Gener8, LLC		0.5		1.0
HealthDrive Corporation⁽²⁾		1.8		1.8
Holland Intermediate Acquisition Corp. ⁽¹⁾		3.0		3.0
IRC Opco LLC		0.8		—
Loadmaster Derrick & Equipment, Inc.		0.1		—
NCP Investor, Inc.		1.0		1.0
OEM Group, LLC ⁽²⁾		3.8		2.3
PDFTron Systems Inc.		0.5		—
Sciens Building Solutions, LLC		—		2.5
Simplicity Financial Marketing Holdings Inc.		0.4		—
SolutionReach, Inc.		0.9		—
SPST Holdings, LLC		0.7		0.7
SRS Acquiom Holdings, LLC		0.4		0.4
Women's Health USA, Inc.		1.5		1.5
		20.4		16.0
Unfunded commitments to investments in funds
Freeport Financial SBIC Fund LP		0.7		0.7
Gryphon Partners 3.5, L.P.		0.3		0.3
		1.0		1.0

Total unfunded commitments	$	28.3	$	31.2

⁽¹⁾We have sole discretion as to whether to lend under this revolving commitment.
⁽²⁾Includes amounts set aside for issued standby letters of credit.

The changes in fair value of our unfunded commitments are considered to be immaterial as the yield determined at the time of underwriting is expected to be materially consistent with the yield upon funding. We will fund our unfunded commitments from the same sources we use to fund our investment commitments that are funded at the time they are made (which are typically existing cash and cash equivalents and borrowings under our Revolving Facility). We manage our liquidity to ensure that we have available capital to fund our unfunded commitments as necessary.

Distributions

We have elected to be taxed as a RIC under Subchapter M of the Code. In order to maintain our status as a RIC, we are required to distribute, for each taxable year, at least 90% of our investment company taxable income. To avoid a 4% excise tax on undistributed earnings, we are required to distribute each calendar year the sum of (i) 98% of our ordinary income for such calendar year (ii) 98.2% of our capital gain net income for the one-year period ending October 31 of that calendar year and (iii) any income recognized, but not distributed, in preceding years and on which we paid no federal income tax.

Our quarterly distributions, if any, will be determined by our board of directors. We intend to make distributions to stockholders on a quarterly basis of substantially all of our net investment income. Although we intend to make distributions of net realized capital gains, if any, at least annually, out of assets legally available for such distributions, we may in the future decide to retain such capital gains for investment. In addition, the extent and timing of special dividends, if any, will be determined by our board of directors and will largely be driven by portfolio specific events and tax considerations at the time.

In addition, we may be limited in our ability to make distributions due to the BDC asset coverage test for borrowings applicable to us as a BDC under the 1940 Act.

The following table summarizes our recent distributions declared and paid or to be paid on all shares including distributions reinvested, if any:

Date Declared	Record Date	Payment Date	Amount Per Share
March 8, 2016	March 21, 2016	March 31, 2016	$	0.34
May 3, 2016	June 15, 2016	June 30, 2016	$	0.34
August 2, 2016	September 15, 2016	September 30, 2016	$	0.34
November 8, 2016	December 15, 2016	December 30, 2016	$	0.27
March 7, 2017	March 20, 2017	March 31, 2017	$	0.27
May 5, 2017	June 15, 2017	June 30, 2017	$	0.27
August 1, 2017	September 15, 2017	September 29, 2017	$	0.27
November 7, 2017	December 15, 2017	December 29, 2017	$	0.27
March 2, 2018	March 20, 2018	March 30, 2018	$	0.27
May 1, 2018	June 15, 2018	June 29, 2018	$	0.27
August 7, 2018	September 14, 2018	September 28, 2018	$	0.27
November 6, 2018	December 14, 2018	December 31, 2018	$	0.27
March 5, 2019	March 20, 2019	March 29, 2019	$	0.21
May 7, 2019	June 14, 2019	June 28, 2019	$	0.21
August 6, 2019	September 16, 2019	September 30, 2019	$	0.21
October 31, 2019	December 16, 2019	December 31, 2019	$	0.21

We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of these distributions from time to time. If we do not distribute a certain percentage of our income annually, we will suffer adverse tax consequences, including possible loss of our status as a regulated investment company. We cannot assure stockholders that they will receive any distributions at a particular level.

We maintain an “opt in” dividend reinvestment plan for our common stockholders. As a result, unless stockholders specifically elect to have their dividends automatically reinvested in additional shares of common stock, stockholders will receive all such dividends in cash. There were no dividends reinvested for the three and nine months ended September 30, 2019. There were no dividends reinvested for the three and nine months ended September 30, 2018, respectively.

Under the terms of our dividend reinvestment plan, dividends will primarily be paid in newly issued shares of common stock. However, we reserve the right to purchase shares in the open market in connection with the implementation of the plan. This feature of the plan means that, under certain circumstances, we may issue shares of our common stock at a price below net asset value per share, which could cause our stockholders to experience dilution.

Distributions in excess of our current and accumulated earnings and profits would generally be treated as a return of capital to the extent of the stockholder’s adjusted tax basis in our shares. If a stockholder’s tax basis is reduced to zero, the stockholder would generally treat any remaining distributions in excess of our current and accumulated earnings and profits as a capital gain. The determination of the tax attributes of our distributions will be made annually as of the end of our fiscal year based upon our taxable income for the full year and distributions paid for the full year. Therefore, a determination made on a quarterly basis may not be representative of the actual tax attributes of our distributions for a full year. Each year, a statement on Form 1099-DIV identifying the source of the distributions will be sent to our U.S. stockholders of record (other than certain exempt recipients). Our board of directors presently intends to declare and pay quarterly distributions. Our ability to pay distributions could be affected by future business performance, liquidity, capital needs, alternative investment opportunities and loan covenants.

We may generate qualified interest income and short-term capital gains that may be exempt from United States withholding tax when distributed to foreign accounts. A RIC is permitted to designate distributions in the form of dividends that represent interest income from U.S. sources (commonly referred to as qualified interest income) and short-term capital gains as exempt from U.S. withholding tax when paid to non-U.S. stockholders with proper documentation. As of September 30, 2019, the percentage of 2019 income estimated as qualified interest income for tax purposes was 78.2%.

Stock Repurchase Program

On March 2, 2018 our board of directors authorized a $17.5 million stock repurchase program, which was amended and extended on March 5, 2019 to authorize the repurchase of outstanding shares in an aggregate amount of up to $15.0 million. Unless extended by our board of directors, the stock repurchase program will expire on March 5, 2020 and may be modified or terminated at any time for any reason without prior notice. We have provided our stockholders with notice of our ability to repurchase shares of our common stock in accordance with 1940 Act requirements. We will retire immediately all such shares of common stock that we purchase in connection with the stock repurchase program.

The following table summarizes our share repurchases under our stock repurchase program for the three and nine months ended September 30, 2019 and 2018 (in millions):

	For the three months ended September 30,					For the nine months ended September 30,
	2019			2018		2019			2018
Dollar amount repurchased⁽¹⁾	$	5.6		$	—	$	11.6		$	—
Shares repurchased		0.8			—		1.7			—
Average price per share (including commission)	$	6.70		$	—	$	6.70		$	—
Weighted average discount to net asset value		25.23	%		—		23.63	%		—

⁽¹⁾	Effective March 14, 2019, we adopted a stock trading plan in accordance with Rule 10b5-1 of the Exchange Act.

Related Party Transactions

Refer to Note 4 – “Related Party Transactions”, in the Notes to the Consolidated Financial Statements.

Critical accounting policies

For a description of the Company’s critical accounting policies, refer to “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in the Company’s 2018 Annual Report on Form 10-K. The Company considers its most significant accounting policies to be those related to its Valuation of Portfolio Investments, Revenue Recognition, Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation and U.S. Federal Income Taxes, including excise tax. There have been no material changes to the Company’s critical accounting policies as described in the Company’s 2018 Annual report on Form 10-K.

Recent Developments

From October 1, 2019 through November 1, 2019, we repurchased 301,825 shares of stock for a total cost of $2.1 million as part of a 10b5-1 Stock Repurchase Plan, which is the most recent information available to us as of the time at which the financial statements are issued. This brings up total shares repurchased since we began the 2019 stock repurchase program on March 11, 2019 to 2,031,921 shares at an aggregate cost of $13.7 million.

On October 31, 2019, our board of directors declared a dividend of $0.21 per share payable on December 31, 2019 to stockholders of record at the close of business on December 16, 2019.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

We are subject to financial market risks, including changes in interest rates. As of September 30, 2019, 97.7% of the debt investments in our portfolio are floating rate loans, based upon fair market value. In the future, we expect other debt investments in our portfolio will have floating rates. These floating rate loans typically bear interest in reference to LIBOR, which are indexed to 30-day, 90-day or 180-day LIBOR rates subject to an interest rate floor. As of September 30, 2019 and December 31, 2018, the weighted average interest rate floor on our floating rate loans was 0.96% and 0.90%, respectively. Our Revolving Facility is also subject to floating interest rates.

Based on our September 30, 2019, Consolidated Statement of Assets and Liabilities, the following table shows the annual impact on net income of changes in interest rates, which assumes no changes in our investments and borrowings (in millions):

Change in Basis Points	Interest Income			Interest Expense			Net Income⁽¹⁾
Up 300 basis points	$	8.8		$	2.1		$	6.7
Up 200 basis points	$	5.9		$	1.4		$	4.5
Up 100 basis points	$	2.9		$	0.7		$	2.2
Down 300 basis points	$	(3.4	)	$	(1.4	)	$	(2.0	)
Down 200 basis points	$	(3.4	)	$	(1.4	)	$	(2.0	)
Down 100 basis points	$	(2.8	)	$	(0.7	)	$	(2.1	)

(1)	Excludes the impact of incentive fees based on pre-incentive fee net investment income. See “Note 4. - Related Party Transaction” footnote to our consolidated financial statements for the three and nine months ended September 30, 2019 and 2018 for more information on the incentive fee.

Although we believe that this measure is indicative of our sensitivity to interest rate changes, it does not adjust for potential changes in credit quality, size and composition of the assets on the balance sheet and other business developments, including borrowings under our Revolving Facility, that could affect net increase in net assets resulting from operations, or net income.

In the future, we may use other standard hedging instruments such as futures, options and forward contacts subject to the requirements of the 1940 Act. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in the benefits of lower interest rates with respect to our portfolio of investments.

From time to time, we may make investments that are denominated in a foreign currency. These investments are translated into U.S. dollars at each balance sheet date, exposing us to movements in foreign exchange rates. We have the ability to borrow in certain foreign currencies under our Revolving Credit Facility. Instead of entering into a foreign exchange forward contract in connection with loans or other investments we have made that are denominated in a foreign currency, we may borrow in that currency to establish a natural hedge against our loan or investment.

Item 4.

Controls and Procedures

Disclosure Controls and Procedures

Our management with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as of the end of the period covered by this quarterly report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this quarterly report on form 10-Q, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Acts recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that information required to be disclosed by us in the reports that we file or submit under the Exchange Act 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.

Changes in Internal Control Over Financial Reporting

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

PART II. OTHER INFORMATION

Item 1.

Legal proceedings

We are not a defendant in any material pending legal proceeding, and no such material proceedings are known to be contemplated. However, from time to time, we may be party to certain legal proceedings incidental to the normal course of our business including the enforcement of our rights under the contracts with our portfolio companies.

Item 1A.

Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our 2018 Annual Report on Form 10-K and in Part II, “Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, which could materially affect our business, financial condition or future results.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Stock Repurchase Program

There were no stock repurchases during the nine months ended September 30, 2018. The following table presents information with respect to the Company’s purchases of its common stock during the nine months ended September 30, 2019.

Period ⁽¹⁾	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Program		Maximum Dollar Value of Shares That May Yet Be Purchased Under Publicly Announced Plans
January 1, 2019 through January 31, 2019		—	$	—		—	$	17,442,468
February 1, 2019 through February 28, 2019		—	$	—		—	$	17,442,468
March 1, 2019 through March 31, 2019		198,483	$	6.67		198,483	$	16,177,034
April 1, 2019 through April 30, 2019		244,388	$	6.72		244,388	$	14,535,162
May 1, 2019 through May 31, 2019		198,363	$	6.78		198,363	$	13,189,417
June 1, 2019 through June 30, 2019		257,767	$	6.63		257,767	$	11,480,796
July 1, 2019 through July 31, 2019		287,728	$	6.67		287,728	$	9,563,023
August 1, 2019 through August 31, 2019		288,792	$	6.65		288,792	$	7,642,397
September 1, 2019 through September 30, 2019		254,575	$	6.81		254,575	$	5,909,936
		1,730,096	$	6.70		1,730,096

⁽¹⁾

Effective March 2, 2018, the board of directors authorized a $17.5 million stock repurchase program, which was amended and extended on March 5, 2019 to authorize the repurchase of outstanding shares in an aggregate amount of up to $15.0 million. Unless extended by our board of directors, the stock repurchase program will expire on March 5, 2020 and may be modified or terminated at any time for any reason without prior notice.

We have provided our stockholders with notice of our ability to repurchase shares of our common stock in accordance with 1940 Act requirements. We will retire immediately all such shares of common stock that we purchase in connection with the stock repurchase program.

Item 3.

Defaults Upon Senior Securities

None.

Item 4.

Mine Safety Disclosures

Not applicable.

Item 5.

Other Information

None.

100

Item 6.

Exhibits

Listed below are the exhibits that are filed as part of this report (according to the number assigned to them in Item 601 of Regulation S-K):

10.1	Amended and Restated Investment Management Agreement, dated as of June 14, 2019, between THL Credit, Inc., a Delaware corporation, and THL Credit Advisors LLC, a Delaware limited liability company (Incorporated by reference from the Registrant’s post-effective Amendment No. 4 to the Registration Statement under the Securities Act of 1933, as amended, on Form N-2, filed on June 19, 2019)
11	Computation of Per Share Earnings (included in the notes to the consolidated financial statements contained in this report).

31.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.*

31.2	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.*

32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).*

32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).*

(*)	Filed herewith

101

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

	THL CREDIT, INC.


Date: November 4, 2019	By:	/s/ Christopher J. Flynn
		Christopher J. Flynn
		Chief Executive Officer

Date: November 4, 2019	By:	/s/ Terrence W. Olson
		Terrence W. Olson
		Chief Financial Officer

102