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Franklin BSP Lending Corp - Quarter Report: 2019 September (Form 10-Q)



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2019
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 814-00821
BUSINESS DEVELOPMENT CORPORATION OF AMERICA
(Exact Name of Registrant as Specified in its Charter)

Maryland
 
27-2614444
(State or Other Jurisdiction of
Incorporation or Organization)
 
(I.R.S. Employer
Identification No.)
 
 
 
9 West 57th Street, 49th Floor, Suite 4920
New York, New York
 
10019
(Address of Principal Executive Office)
 
(Zip Code)

(212) 588-6770
(Registrant’s Telephone Number, Including Area Code)

Not applicable
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

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

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

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

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

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



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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   
Yes o No x
The number of shares of the registrant's common stock, $0.001 par value, outstanding as of November 8, 2019 was 189,857,137.


BUSINESS DEVELOPMENT CORPORATION OF AMERICA
FORM 10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019

TABLE OF CONTENTS
 
 
 
 
Page
PART I - FINANCIAL INFORMATION
  
PART II - OTHER INFORMATION
 



PART I - FINANCIAL INFORMATION
Item 1. CONSOLIDATED FINANCIAL STATEMENTS

BUSINESS DEVELOPMENT CORPORATION OF AMERICA
 
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(dollars in thousands except share and per share data)
 
September 30,
 
December 31,
 
2019
 
2018
 
(Unaudited)
 
 
ASSETS
 
 
 
Investments, at fair value:
 
 
 
Control Investments, at fair value (amortized cost of $262,128 and $323,392, respectively)
$
308,695

 
$
307,680

Affiliate Investments, at fair value (amortized cost of $196,135 and $231,107, respectively)
135,991

 
176,560

Non-affiliate Investments, at fair value (amortized cost of $2,229,421 and $1,925,833, respectively)
2,132,059

 
1,850,474

Investments, at fair value (amortized cost of $2,687,684 and $2,480,332, respectively)
2,576,745

 
2,334,714

Cash and cash equivalents
98,497

 
96,692

Interest and dividends receivable
22,286

 
22,203

Receivable for unsettled trades
1,146

 
6,208

Prepaid expenses and other assets
2,335

 
2,514

Unrealized appreciation on forward currency exchange contracts
167

 
993

Total assets
$
2,701,176

 
$
2,463,324

 
 
 
 
LIABILITIES
 
 
 

Debt (net of deferred financing costs of $12,021 and $12,156, respectively)
$
1,122,065

 
$
884,522

Stockholder distributions payable
10,106

 
10,506

Management fees payable
10,269

 
9,711

Incentive fee on income payable
6,985

 
5,690

Accounts payable and accrued expenses
19,859

 
15,153

Payable for unsettled trades
53,592

 
32,921

Interest and debt fees payable
12,829

 
12,008

Payable for common stock repurchases
—

 
5

Directors' fees payable
54

 
89

Total liabilities
1,235,759

 
970,605

Commitments and contingencies (Note 7)
 
 
 
 
 
 
 
NET ASSETS
 
 
 
Preferred stock, $.001 par value, 50,000,000 shares authorized, none issued and outstanding
—

 
—

Common stock, $.001 par value, 450,000,000 shares authorized;
214,796,323 issued and 189,180,961 outstanding at September 30, 2019,
and 211,476,760 issued and 190,324,059 outstanding at December 31, 2018
189

 
190

Additional paid in capital
1,803,766

 
1,811,970

Total distributable loss
(338,538
)
 
(323,127
)
Total net assets attributable to Business Development Corporation of America
1,465,417

 
1,489,033

Net assets attributable to non-controlling interest
—

 
3,686

Total net assets
1,465,417

 
1,492,719

 
 
 
 
Total liabilities and net assets
$
2,701,176

 
$
2,463,324

 
 
 
 
Net asset value per share attributable to Business Development Corporation of America
$
7.75

 
$
7.82


1

BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands except share and 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 control investments
 
 
 
 
 
 
 
 
Interest income
 
$
4,464

 
$
5,433

 
$
14,369

 
$
17,115

Dividend income
 
5,136

 
2,691

 
12,456

 
7,898

Fee and other income
 
2

 
—

 
2

 
20

Total investment income from control investments
 
9,602

 
8,124

 
26,827

 
25,033

From affiliate investments
 
 
 
 
 
 
 
 
Interest income
 
3,307

 
5,776

 
10,210

 
16,141

Dividend income
 
1,672

 
875

 
2,936

 
2,958

Fee and other income
 
6

 
3

 
12

 
8

Total investment income from affiliate investments
 
4,985

 
6,654

 
13,158

 
19,107

From non-affiliate investments
 
 
 
 
 
 
 
 
Interest income
 
46,976

 
43,497

 
140,950

 
128,281

Dividend income
 
—

 
84

 
1,756

 
309

Fee and other income
 
1,052

 
579

 
2,631

 
3,389

Total investment income from non-affiliate investments
 
48,028

 
44,160

 
145,337

 
131,979

Interest from cash and cash equivalents
 
577

 
244

 
1,023

 
490

Total investment income
 
63,192

 
59,182

 
186,345

 
176,609

Operating expenses:
 
 

 
 

 
 

 
 

Management fees
 
10,269

 
10,082

 
29,739

 
30,117

Incentive fee on income
 
6,985

 
6,450

 
20,549

 
15,992

Interest and debt fees
 
14,131

 
13,862

 
41,505

 
41,095

Professional fees
 
1,207

 
1,639

 
4,342

 
4,475

Other general and administrative
 
1,871

 
1,161

 
5,345

 
5,504

Administrative services
 
199

 
195

 
592

 
594

Insurance
 
26

 
—

 
79

 
3

Directors' fees
 
226

 
227

 
688

 
760

Total expenses
 
34,914

 
33,616

 
102,839

 
98,540

 
 
 
 
 
 
 
 
 
Income tax (benefit) expense, including excise tax
 
338

 
(270
)
 
1,301

 
270

Net investment gain attributable to non-controlling interests
 
—

 
37

 
9

 
32

Net investment income
 
27,940

 
25,799

 
82,196

 
77,767

 
 
 
 
 
 
 
 
 
Realized and unrealized gain (loss):
 
 
 
 
 
 
 
 
Net realized gain (loss)
 
 
 
 
 
 
 
 
   Control investments
 
(41,306
)
 
—

 
(41,400
)
 
—

   Affiliate investments
 
928

 
503

 
1,483

 
(40,287
)
   Non-affiliate investments
 
2,183

 
(178
)
 
1,660

 
9,889

   Net realized gain (loss) on foreign currency transactions
 
(242
)
 
—

 
432

 
17

Total net realized gain (loss)
 
(38,437
)
 
325

 
(37,825
)
 
(30,381
)

The accompanying notes are an integral part of these consolidated financial statements.
2
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands except share and per share data)
(Unaudited)


 
 
For the three months ended September 30,
 
For the nine months ended September 30,
 
 
2019
 
2018
 
2019
 
2018
Net change in unrealized appreciation (depreciation) on investments
 
 
 
 
 
 
 
 
   Control investments
 
33,530

 
4,548

 
62,279

 
3,257

   Affiliate investments
 
(13,964
)
 
(5,508
)
 
(5,197
)
 
33,666

   Non-affiliate investments
 
(23,788
)
 
4,268

 
(22,403
)
 
(14,213
)
Net change in deferred taxes
 
2,225

 
(107
)
 
1,739

 
(886
)
Total net change in unrealized appreciation (depreciation) on investments, net of deferred taxes
 
(1,997
)
 
3,201

 
36,418

 
21,824

Net change in unrealized depreciation attributable to non-controlling interests
 
—

 
(567
)
 
(3,017
)
 
(236
)
Net change in unrealized appreciation (depreciation) from forward currency exchange contracts
 
444

 
(275
)
 
(826
)
 
(302
)
Net realized and unrealized gain (loss)
 
(39,990
)
 
2,684

 
(5,250
)
 
(9,095
)
Net increase (decrease) in net assets resulting from operations
 
$
(12,050
)
 
$
28,483

 
$
76,946

 
$
68,672

 
 
 
 
 
 
 
 
 
Per share information - basic and diluted
 
 
 
 
 
 
 
 
Net investment income
 
$
0.15

 
$
0.14

 
$
0.43

 
$
0.43

Net increase (decrease) in net assets resulting from operations
 
$
(0.06
)
 
$
0.16

 
$
0.41

 
$
0.38

Weighted average shares outstanding
 
190,060,251

 
178,984,007

 
189,973,074

 
179,087,323




The accompanying notes are an integral part of these consolidated financial statements.
3

BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
(dollars in thousands except share and per share data)
(Unaudited)

 
For the nine months ended September 30,
 
2019
 
2018
Operations:
 
 
 
Net investment income
$
82,196

 
$
77,767

Net realized loss from investments
(38,257
)
 
(30,398
)
Net realized gain on foreign currency transactions
432

 
17

Net change in unrealized appreciation on investments
34,679

 
22,710

Net change in deferred taxes
1,739

 
(886
)
Net change in unrealized depreciation attributable to non-controlling interests
(3,017
)
 
(236
)
Net change in unrealized depreciation from forward currency exchange contracts
(826
)
 
(302
)
Net increase in net assets resulting from operations
76,946

 
68,672

Stockholder distributions:
 
 
 

Distributions
(92,357
)
 
(87,066
)
Net decrease in net assets from stockholder distributions
(92,357
)
 
(87,066
)
Capital share transactions:
 
 
 

Acquisition of non-controlling interest
1,281

 
—

Reinvestment of stockholder distributions
26,587

 
29,766

Repurchases of common stock
(36,073
)
 
(42,310
)
Net decrease in net assets from capital share transactions
(8,205
)
 
(12,544
)
Total decrease in net assets, before non-controlling interest
(23,616
)
 
(30,938
)
Increase (decrease) in non-controlling interest
(3,686
)
 
268

Total decrease in net assets
(27,302
)
 
(30,670
)
Net assets at beginning of period
1,492,719

 
1,494,516

Net assets at end of period
$
1,465,417

 
$
1,463,846

 
 
 
 
Net asset value per common share attributable to Business Development Corporation of America
$
7.75

 
$
8.20

Common shares outstanding at end of period
189,180,961

 
178,224,771



The accompanying notes are an integral part of these consolidated financial statements.
4
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(Unaudited)

 
For the nine months ended September 30,
 
2019
 
2018
Operating activities:
 
 
 
Net increase in net assets resulting from operations
$
76,946

 
$
68,672

Adjustments to reconcile net increase in net assets from operations to net cash provided by (used in) operating activities:
 
 
 
Payment-in-kind interest income
(3,695
)
 
(3,653
)
Net accretion of discount on investments
(6,979
)
 
(6,395
)
Amortization of deferred financing costs
2,666

 
2,406

Amortization of discount on unsecured notes
408

 
384

Sales and repayments of investments
560,575

 
915,719

Purchases of investments
(795,510
)
 
(909,813
)
Net realized loss from investments
38,257

 
30,398

Net realized gain on foreign currency transactions
(432
)
 
(17
)
Net change in unrealized appreciation on investments
(34,679
)
 
(22,710
)
Net change in unrealized depreciation from forward currency exchange contracts
826

 
302

(Increase) decrease in operating assets:
 
 
 
Interest and dividends receivable
(83
)
 
(4,607
)
Receivable for unsettled trades
5,062

 
1,729

Prepaid expenses and other assets
179

 
3,560

Increase (decrease) in operating liabilities:
 
 
 
Management fees payable
558

 
150

Incentive fee on income payable
1,295

 
1,892

Accounts payable and accrued expenses
4,706

 
3,549

Payable for unsettled trades
20,671

 
(35,304
)
Interest and debt fees payable
821

 
1,402

Directors' fees payable
(35
)
 
(6
)
Net cash provided by (used in) operating activities
(128,443
)
 
47,658

 
 
 
 
Financing activities:
 
 
 

Acquisition of non-controlling interest
1,281

 
—

Repurchases of common stock
(36,078
)
 
(42,310
)
Proceeds from debt
282,000

 
634,298

Payments on debt
(45,000
)
 
(552,791
)
Payments of financing costs
(2,531
)
 
(3,993
)
Stockholder distributions
(66,170
)
 
(57,703
)
Increase (decrease) in non-controlling interest
(3,686
)
 
268

Net cash provided by (used in) financing activities
129,816

 
(22,231
)
 
 
 
 
Net increase in cash and cash equivalents
1,373

 
25,427

Effect of foreign currency exchange rates
432

 
17

Cash and cash equivalents, beginning of period
96,692

 
99,822

Cash and cash equivalents, end of period
$
98,497

 
$
125,266

 
 
 
 
 
 
 
 
Supplemental information:
 
 
 

Interest paid during the period
$
37,431

 
$
36,852

Taxes, including excise tax, paid during the period
$
53

 
$
52

Distributions reinvested
$
26,587

 
$
29,766


The accompanying notes are an integral part of these consolidated financial statements.
5
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

September 30, 2019
(Unaudited)
Portfolio Company (f) (q)
 
Industry
 
Investment Coupon Rate / Maturity (y)
 
Principal / Number of Shares
 
Amortized Cost
 
Fair Value
 
% of Net Assets (b)
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior Secured First Lien
Debt - 122.1% (b)
 
 
 
 
 
 
 
 
 
 
 
 
Abaco Systems Holding Corp. (c) (i)
 
Industrials
 
L+6.00% (8.34%), 12/7/2021
 
$
23,275

 
$
23,068

 
$
23,275

 
1.6
%
ABC Financial Intermediate, LLC (j)
 
Technology
 
L+4.25% (6.28%), 1/2/2025
 
12,401

 
12,349

 
12,308

 
0.9
%
Accentcare, Inc. (c) (j)
 
Healthcare
 
L+5.00% (7.28%), 6/22/2026
 
13,506

 
13,375

 
13,375

 
0.9
%
Acrisure, LLC (i) (j)
 
Financials
 
L+4.25% (6.35%), 11/22/2023
 
20,315

 
20,306

 
20,188

 
1.4
%
AHP Health Partners, Inc. (i)
 
Healthcare
 
L+4.50% (6.54%), 6/30/2025
 
19,936

 
19,782

 
19,961

 
1.4
%
Aldevron, LLC (i)
 
Healthcare
 
L+4.25% (6.23%), 10/13/2026
 
11,370

 
11,256

 
11,398

 
0.8
%
Aleris International, Inc. (j)
 
Industrials
 
L+4.75% (6.79%), 2/27/2023
 
21,149

 
21,032

 
21,149

 
1.4
%
Allied Universal Security Services, LLC (j)
 
Business Services
 
L+4.25% (6.51%), 7/10/2026
 
6,066

 
6,007

 
6,069

 
0.4
%
Alvogen Pharma US, Inc. (c) (j)
 
Healthcare
 
L+4.75% (6.79%), 4/1/2022
 
12,991

 
12,933

 
11,692

 
0.8
%
AM General, LLC (c) (i)
 
Industrials
 
L+7.25% (9.31%), 12/28/2021
 
1,672

 
1,672

 
1,672

 
0.1
%
American Greetings Corp. (j)
 
Consumer
 
L+4.50% (6.54%), 4/5/2024
 
1,742

 
1,715

 
1,726

 
0.1
%
AMI Entertainment Network, LLC (c) (i)
 
Media/Entertainment
 
L+5.50% (7.63%), 7/21/2022
 
3,667

 
3,613

 
3,612

 
0.2
%
AMI Entertainment Network, LLC (c) (i)
 
Media/Entertainment
 
L+5.50% (7.60%), 7/21/2022
 
13,098

 
12,951

 
12,901

 
0.9
%
AP Gaming I, LLC (a) (j)
 
Gaming/Lodging
 
L+3.50% (5.54%), 2/15/2024
 
7,641

 
7,635

 
7,586

 
0.5
%
AP NMT Acquisition B.V. (a) (j)
 
Media/Entertainment
 
L+5.75% (8.07%), 8/13/2021
 
6,517

 
6,527

 
6,423

 
0.4
%
Aq Carver Buyer, Inc. (i)
 
Business Services
 
L+5.00% (7.05%), 9/23/2025
 
9,415

 
8,662

 
9,321

 
0.6
%
AqGen Ascensus, Inc. (j)
 
Business Services
 
L+4.00% (6.10%), 12/5/2022
 
9,416

 
9,406

 
9,434

 
0.6
%
Arch Global Precision, LLC (c) (i)
 
Industrials
 
L+4.75% (6.79%), 4/1/2026
 
7,484

 
7,413

 
7,410

 
0.5
%
Athenahealth, Inc. (j)
 
Healthcare
 
L+4.50% (6.68%), 2/11/2026
 
12,825

 
12,658

 
12,777

 
0.9
%
Avaya Holdings Corp. (a) (j)
 
Technology
 
L+4.25% (6.28%), 12/16/2024
 
26,182

 
25,992

 
24,824

 
1.7
%
Aveanna Healthcare, LLC (c) (j)
 
Healthcare
 
L+4.25% (6.29%), 3/18/2024
 
786

 
737

 
759

 
0.1
%
Aveanna Healthcare, LLC (c) (j)
 
Healthcare
 
L+5.50% (7.54%), 3/18/2024
 
6,037

 
5,809

 
6,037

 
0.4
%
Axiom Global, Inc. (c) (i)
 
Business Services
 
L+4.75% (6.85%), 9/30/2026
 
10,974

 
10,864

 
10,864

 
0.7
%
BBB Industries, LLC (j)
 
Transportation
 
L+4.50% (6.59%), 8/1/2025
 
11,170

 
11,126

 
10,919

 
0.7
%
BCP Raptor, LLC (j)
 
Energy
 
L+4.25% (6.29%), 6/24/2024
 
19,082

 
18,944

 
17,489

 
1.2
%
BCP Renaissance, LLC (j)
 
Energy
 
L+3.50% (5.76%), 10/31/2024
 
3,429

 
3,416

 
3,268

 
0.2
%
Black Mountain Sand, LLC (c)
 
Energy
 
L+9.00% (11.13%), 11/30/2021
 
13,050

 
12,932

 
12,854

 
0.9
%

The accompanying notes are an integral part of these consolidated financial statements.
6
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

September 30, 2019
(Unaudited)
Portfolio Company (f) (q)
 
Industry
 
Investment Coupon Rate / Maturity (y)
 
Principal / Number of Shares
 
Amortized Cost
 
Fair Value
 
% of Net Assets (b)
Black Mountain Sand, LLC (c)
 
Energy
 
L+9.00% (11.32%), 11/30/2021
 
$
13,050

 
$
12,944

 
$
12,854

 
0.9
%
Blackboard, Inc. (i) (j)
 
Software/Services
 
L+5.00% (7.30%), 6/30/2021
 
14,600

 
14,544

 
14,549

 
1.0
%
BMC Software Finance, Inc. (j)
 
Technology
 
L+4.25% (6.29%), 10/2/2025
 
23,134

 
22,935

 
22,239

 
1.5
%
Bomgar Corp. (j)
 
Technology
 
L+4.00% (6.26%), 4/18/2025
 
1,967

 
1,960

 
1,883

 
0.1
%
BrightSpring Health Holdings Corp. (j)
 
Healthcare
 
L+4.50% (6.57%), 3/5/2026
 
4,988

 
4,947

 
4,993

 
0.3
%
California Resources Corp. (a) (j)
 
Energy
 
L+4.75% (6.79%), 12/30/2022
 
12,259

 
12,098

 
10,859

 
0.7
%
CareCentrix, Inc. (i) (j)
 
Healthcare
 
L+4.50% (6.60%), 4/3/2025
 
19,986

 
19,909

 
19,986

 
1.4
%
CCW, LLC (c)
 
Food & Beverage
 
L+7.00% (9.06%), 3/22/2021
 
1,300

 
1,300

 
1,235

 
0.1
%
CCW, LLC (c) (i)
 
Food & Beverage
 
L+7.00% (9.06%), 3/22/2021
 
26,869

 
26,727

 
25,525

 
1.7
%
CDHA Holdings, LLC (c)
 
Healthcare
 
L+6.00% (8.11%), 8/24/2023
 
555

 
547

 
555

 
0.0
%
CDHA Holdings, LLC (c)
 
Healthcare
 
L+6.00% (8.11%), 8/24/2023
 
430

 
430

 
430

 
0.0
%
CDHA Holdings, LLC (c) (i)
 
Healthcare
 
L+6.00% (8.11%), 8/24/2023
 
15,640

 
15,457

 
15,640

 
1.1
%
CDS U.S. Intermediate Holdings, Inc. (a) (i) (j)
 
Media/Entertainment
 
L+3.75% (5.85%), 7/8/2022
 
3,990

 
3,908

 
3,774

 
0.3
%
Chloe Ox Parent, LLC (i)
 
Healthcare
 
L+4.50% (6.60%), 12/23/2024
 
11,507

 
11,419

 
11,435

 
0.8
%
Clarion Events, Ltd. (a) (j)
 
Business Services
 
L+5.00% (7.12%), 9/30/2024
 
10,445

 
10,276

 
10,288

 
0.7
%
Clover Technologies Group, LLC (j)
 
Industrials
 
L+4.50% (6.54%), 5/8/2020
 
12,223

 
12,210

 
6,635

 
0.5
%
Cold Spring Brewing, Co. (c) (i)
 
Food & Beverage
 
L+4.75% (6.80%), 5/15/2024
 
3,031

 
2,984

 
3,031

 
0.2
%
Community Care Health Network, LLC (j)
 
Healthcare
 
L+4.75% (6.79%), 2/17/2025
 
5,089

 
5,074

 
5,063

 
0.3
%
CONSOL Energy, Inc. (a) (j)
 
Industrials
 
L+4.50% (6.55%), 9/27/2024
 
4,130

 
4,111

 
4,089

 
0.3
%
Conterra Ultra Broadband, LLC (j)
 
Telecom
 
L+4.50% (6.55%), 4/30/2026
 
5,021

 
4,998

 
5,028

 
0.3
%
Corfin Industries, LLC (c) (i)
 
Industrials
 
L+5.50% (7.76%), 2/15/2024
 
8,507

 
8,383

 
8,507

 
0.6
%
Crown Subsea Communications Holding, Inc. (c) (j)
 
Industrials
 
L+6.00% (8.10%), 11/3/2025
 
6,473

 
6,417

 
6,473

 
0.4
%
CRS-SPV, Inc. (c) (o)
 
Industrials
 
L+4.50% (6.56%), 3/8/2020
 
62

 
62

 
62

 
0.0
%
Deva Holdings, Inc. (c) (i)
 
Consumer
 
L+5.50% (7.61%), 10/31/2023
 
7,137

 
7,191

 
7,137

 
0.5
%
Digicel Group, Ltd. (a)
 
Telecom
 
8.75% 5/25/2024
 
10,607

 
10,553

 
10,024

 
0.7
%
Dynasty Acqusition Co., Inc. (j)
 
Industrials
 
L+4.00% (6.10%), 4/6/2026
 
3,881

 
3,867

 
3,896

 
0.3
%
Dynasty Acqusition Co., Inc. (j)
 
Industrials
 
L+4.00% (6.10%), 4/6/2026
 
2,086

 
2,079

 
2,095

 
0.1
%
Eagle Rx, LLC (c) (i)
 
Healthcare
 
L+4.75% (6.85%), 12/31/2021
 
26,557

 
26,554

 
26,557

 
1.8
%
Envision Healthcare Corp. (j)
 
Healthcare
 
L+3.75% (5.79%), 10/10/2025
 
3,980

 
3,809

 
3,235

 
0.2
%

The accompanying notes are an integral part of these consolidated financial statements.
7
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

September 30, 2019
(Unaudited)
Portfolio Company (f) (q)
 
Industry
 
Investment Coupon Rate / Maturity (y)
 
Principal / Number of Shares
 
Amortized Cost
 
Fair Value
 
% of Net Assets (b)
Florida Food Products, LLC (c)
 
Food & Beverage
 
L+6.75% (8.79%), 9/6/2023
 
$
1,416

 
$
1,416

 
$
1,387

 
0.1
%
Florida Food Products, LLC (c) (i)
 
Food & Beverage
 
L+6.75% (8.79%), 9/6/2025
 
22,170

 
21,701

 
21,682

 
1.5
%
Foresight Energy, LLC (j)
 
Industrials
 
L+5.75% (7.87%), 3/28/2022
 
5,919

 
5,884

 
3,137

 
0.2
%
Frank Entertainment Group, LLC (c) (l) (p) (t)
 
Media/Entertainment
 
L+9.00% (11.03%), 12/31/2019
 
810

 
723

 
—

 
—
%
Frank Entertainment Group, LLC (c) (p) (t)
 
Media/Entertainment
 
6.00% 12/31/2019
 
2,540

 
1,466

 
—

 
—
%
Frontier Communications Corp.
 
Telecom
 
8.00% 4/1/2027
 
15,332

 
15,341

 
16,209

 
1.1
%
Frontier Communications Corp. (j)
 
Telecom
 
L+3.75% (5.80%), 6/17/2024
 
9,844

 
9,658

 
9,812

 
0.7
%
Gold Standard Baking, Inc. (c) (l)
 
Food & Beverage
 
L+6.50% (8.63%), 7/25/2022
 
3,036

 
2,184

 
1,215

 
0.1
%
Green Energy Partners/Stonewall, LLC (j)
 
Energy
 
L+5.50% (7.60%), 11/15/2021
 
1,002

 
1,001

 
960

 
0.1
%
Green Energy Partners/Stonewall, LLC (j)
 
Energy
 
L+5.50% (7.60%), 11/15/2021
 
1,327

 
1,325

 
1,271

 
0.1
%
HC2 Holdings, Inc.
 
Industrials
 
11.50% 12/1/2021
 
10,796

 
10,696

 
9,500

 
0.6
%
HireRight, Inc. (i)
 
Business Services
 
L+3.75% (5.79%), 7/11/2025
 
2,992

 
2,970

 
2,906

 
0.2
%
ICR Operations, LLC (c)
 
Business Services
 
L+5.00% (7.10%), 3/26/2024
 
98

 
96

 
98

 
0.0
%
ICR Operations, LLC (c) (i)
 
Business Services
 
L+5.00% (7.10%), 3/26/2025
 
17,365

 
17,085

 
17,365

 
1.2
%
Ideal Tridon Holdings, Inc. (c)
 
Industrials
 
L+5.75% (7.88%), 7/31/2024
 
46

 
46

 
45

 
0.0
%
Ideal Tridon Holdings, Inc. (c)
 
Industrials
 
L+5.75% (7.86%), 7/31/2023
 
161

 
161

 
157

 
0.0
%
Ideal Tridon Holdings, Inc. (c) (i)
 
Industrials
 
L+5.75% (7.86%), 7/31/2024
 
839

 
823

 
822

 
0.1
%
Ideal Tridon Holdings, Inc. (c) (i)
 
Industrials
 
L+5.75% (8.01%), 7/31/2023
 
28,622

 
28,265

 
28,050

 
1.9
%
Integral Ad Science, Inc. (c) (l)
 
Software/Services
 
L+7.25% (9.30%), 7/19/2024
 
14,333

 
14,107

 
14,333

 
1.0
%
Integrated Efficiency Solutions, Inc. (c)
 
Industrials
 
L+10.25% (12.35%), 6/30/2022
 
3,658

 
3,657

 
3,344

 
0.2
%
Intelsat Jackson Holdings, SA (a) (j)
 
Telecom
 
L+4.50% (6.55%), 1/2/2024
 
10,000

 
10,189

 
10,108

 
0.7
%
Internap Corp. (c) (i) (l)
 
Business Services
 
L+7.00% (9.06%), 4/6/2022
 
11,823

 
11,811

 
8,560

 
0.6
%
International Cruise & Excursions, Inc. (c) (i)
 
Business Services
 
L+5.25% (7.29%), 6/6/2025
 
5,014

 
4,969

 
5,014

 
0.3
%
IPC Corp. (j)
 
Software/Services
 
L+4.50% (6.76%), 8/6/2021
 
3,784

 
3,754

 
3,126

 
0.2
%
Iri Holdings, Inc. (j)
 
Business Services
 
L+4.50% (6.62%), 12/1/2025
 
4,963

 
4,918

 
4,767

 
0.3
%
J.D. Power & Associates (j)
 
Business Services
 
L+3.75% (5.79%), 9/7/2023
 
3,557

 
3,517

 
3,558

 
0.2
%
K2 Intelligence Holdings, Inc. (c) (i)
 
Business Services
 
L+4.75% (6.85%), 9/23/2024
 
11,667

 
11,434

 
11,434

 
0.8
%
Kahala Ireland OpCo Designated Activity Company (a) (c) (l) (o)
 
Transportation
 
L+8.00% (13.00%), 12/22/2028
 
67,549

 
67,549

 
67,549

 
4.6
%
Kaman Distribution Corp. (c) (i)
 
Industrials
 
L+5.00% (7.13%), 8/26/2026
 
21,552

 
19,612

 
19,612

 
1.3
%
Kissner Milling Co. Ltd. (a)
 
Industrials
 
8.38% 12/1/2022
 
11,294

 
11,531

 
11,762

 
0.8
%

The accompanying notes are an integral part of these consolidated financial statements.
8
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

September 30, 2019
(Unaudited)
Portfolio Company (f) (q)
 
Industry
 
Investment Coupon Rate / Maturity (y)
 
Principal / Number of Shares
 
Amortized Cost
 
Fair Value
 
% of Net Assets (b)
Lakeland Tours, LLC (i) (j)
 
Education
 
L+3.75% (5.90%), 12/16/2024
 
$
9,264

 
$
9,209

 
$
9,283

 
0.6
%
Lakeview Health Holdings, Inc. (c) (t)
 
Healthcare
 
L+8.75% (11.07%), 12/15/2021
 
124

 
124

 
52

 
0.0
%
Lakeview Health Holdings, Inc. (c) (t)
 
Healthcare
 
L+8.75% (10.81%), 12/15/2021
 
3,554

 
2,665

 
1,497

 
0.1
%
LightSquared, LP (l)
 
Telecom
 
L+8.75% (10.85%), 12/7/2020
 
13,736

 
13,106

 
10,829

 
0.8
%
Lionbridge Technologies, Inc. (c) (i) (j)
 
Business Services
 
L+5.50% (7.54%), 2/28/2024
 
15,960

 
15,896

 
15,960

 
1.1
%
McDermott International, Inc. (a) (j)
 
Industrials
 
L+5.00% (7.10%), 5/12/2025
 
9,899

 
9,814

 
6,224

 
0.4
%
MCS Acquisition Corp. (c)
 
Business Services
 
L+4.75% (6.79%), 5/20/2024
 
14,045

 
14,004

 
6,039

 
0.4
%
MED Parentco, LP (j)
 
Healthcare
 
L+4.25% (6.29%), 8/31/2026
 
5,760

 
5,702

 
5,704

 
0.4
%
Medallion Midland Acquisition, LP (j)
 
Energy
 
L+3.25% (5.29%), 10/30/2024
 
4,372

 
4,364

 
4,237

 
0.3
%
Medical Depot Holdings, Inc. (c) (i)
 
Healthcare
 
L+5.50% (7.60%), 1/3/2023
 
18,757

 
17,818

 
14,105

 
1.0
%
MGTF Radio Company, LLC (c)
 
Media/Entertainment
 
L+6.00% (8.05%), 4/1/2024
 
59,317

 
59,162

 
55,165

 
3.8
%
Micross Solutions, LLC (c)
 
Software/Services
 
L+5.00% (7.14%), 8/7/2023
 
3,089

 
2,970

 
3,089

 
0.2
%
Midwest Can Company, LLC (c)
 
Paper & Packaging
 
P+4.00% (9.00%), 4/11/2023
 
78

 
78

 
77

 
0.0
%
Midwest Can Company, LLC (c) (i)
 
Paper & Packaging
 
L+5.00% (7.06%), 4/11/2024
 
4,633

 
4,598

 
4,633

 
0.3
%
Miller Environmental Group, Inc. (c) (i)
 
Business Services
 
L+6.50% (8.88%), 3/15/2024
 
11,609

 
11,402

 
11,388

 
0.8
%
MLN US Holdco, LLC (a) (j)
 
Technology
 
L+4.50% (6.61%), 11/28/2025
 
11,427

 
11,394

 
10,570

 
0.7
%
MMM Holdings, LLC (c) (i)
 
Healthcare
 
L+6.00% (8.06%), 3/15/2023
 
3,434

 
3,379

 
3,434

 
0.2
%
MMM Holdings, LLC (c) (i)
 
Healthcare
 
L+6.00% (8.05%), 3/15/2023
 
20,064

 
19,786

 
20,064

 
1.4
%
Monitronics International, Inc.
 
Business Services
 
L+6.50% (8.60%), 3/29/2024
 
7,594

 
7,610

 
6,948

 
0.5
%
Montreign Operating Company, LLC (c)
 
Gaming/Lodging
 
L+8.25% (10.37%), 1/24/2023
 
26,749

 
26,472

 
23,619

 
1.6
%
Mood Media Corp. (c) (i)
 
Media/Entertainment
 
L+7.25% (9.35%), 6/28/2022
 
13,984

 
13,810

 
13,145

 
0.9
%
Murray Energy Holdings Co. (j)
 
Industrials
 
L+7.25% (9.35%), 10/17/2022
 
9,161

 
9,048

 
3,440

 
0.2
%
Muth Mirror Systems, LLC (c) (i)
 
Technology
 
L+5.25% (7.39%), 4/23/2025
 
15,857

 
15,563

 
15,588

 
1.1
%
National Technical Systems, Inc. (c) (i)
 
Business Services
 
L+6.25% (8.35%), 6/14/2021
 
17,514

 
17,459

 
16,464

 
1.1
%
Navitas Midstream Midland Basin, LLC (c) (j)
 
Energy
 
L+4.50% (6.54%), 12/13/2024
 
13,360

 
13,338

 
13,010

 
0.9
%
Neon Holdings, Inc.
 
Chemicals
 
10.13% 4/1/2026
 
1,823

 
1,791

 
1,836

 
0.1
%
New Amsterdam Software Bidco, LLC (c) (i)
 
Technology
 
L+5.00% (7.10%), 5/1/2026
 
6,150

 
6,034

 
6,027

 
0.4
%
New Star Metals, Inc. (c) (i)
 
Industrials
 
L+6.00% (8.11%), 6/29/2023
 
22,752

 
22,338

 
22,752

 
1.6
%
NexSteppe, Inc. (c) (l) (o) (t)
 
Chemicals
 
12.00% 12/31/2019
 
2,201

 
1,750

 
—

 
—
%
NexSteppe, Inc. (c) (l) (o) (t)
 
Chemicals
 
12.00% 12/31/2019
 
14,825

 
10,453

 
—

 
—
%

The accompanying notes are an integral part of these consolidated financial statements.
9
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

September 30, 2019
(Unaudited)
Portfolio Company (f) (q)
 
Industry
 
Investment Coupon Rate / Maturity (y)
 
Principal / Number of Shares
 
Amortized Cost
 
Fair Value
 
% of Net Assets (b)
Norvax, LLC (c)
 
Business Services
 
L+6.50% (8.55%), 9/12/2025
 
$
11,518

 
$
11,232

 
$
11,230

 
0.8
%
NTM Acquisition Corp. (c) (i)
 
Media/Entertainment
 
L+6.25% (8.29%), 6/7/2022
 
19,290

 
19,166

 
19,291

 
1.3
%
Office Depot, Inc. (a) (j)
 
Retail
 
L+5.25% (7.31%), 11/8/2022
 
5,175

 
5,110

 
5,207

 
0.4
%
ORG Chemical Holdings, LLC (c) (g)
 
Chemicals
 
L+5.75% (7.86%), 6/30/2022
 
1,103

 
1,103

 
1,072

 
0.1
%
ORG Chemical Holdings, LLC (c) (i)
 
Chemicals
 
L+5.75% (7.86%), 6/30/2022
 
22,201

 
21,957

 
21,579

 
1.5
%
ORG GC Holdings, LLC (c) (i)
 
Business Services
 
L+6.00% (8.11%), 7/31/2022
 
21,689

 
21,505

 
21,689

 
1.5
%
Passport Food Group, LLC (c)
 
Food & Beverage
 
L+11.00% (13.33%), 3/31/2022
 
4,470

 
2,905

 
324

 
0.0
%
PeopLease Holdings, LLC (c) (i)
 
Business Services
 
L+8.25% (10.36%), 2/26/2021
 
20,000

 
19,943

 
19,400

 
1.3
%
PGX Holdings, Inc. (c) (j)
 
Consumer
 
L+5.25% (7.30%), 9/29/2020
 
11,911

 
11,894

 
11,077

 
0.8
%
PlayPower, Inc. (i)
 
Industrials
 
L+5.50% (7.60%), 5/8/2026
 
26,452

 
26,076

 
26,584

 
1.8
%
Premier Dental Services, Inc. (i) (j)
 
Healthcare
 
L+5.25% (7.29%), 6/30/2023
 
32,437

 
32,267

 
32,194

 
2.2
%
Premier Global Services, Inc. (j)
 
Telecom
 
L+6.50% (8.69%), 6/8/2023
 
8,586

 
8,389

 
5,289

 
0.4
%
PSKW, LLC (c)
 
Healthcare
 
L+7.69% (9.79%), 11/26/2021
 
17,750

 
17,622

 
17,750

 
1.2
%
PSKW, LLC (c)
 
Healthcare
 
L+7.69% (9.79%), 11/25/2021
 
1,972

 
1,951

 
1,972

 
0.1
%
PSKW, LLC (c)
 
Healthcare
 
L+7.69% (9.79%), 11/25/2021
 
1,930

 
1,918

 
1,930

 
0.1
%
PSKW, LLC (c) (i)
 
Healthcare
 
L+4.25% (6.35%), 11/26/2021
 
1,220

 
1,215

 
1,220

 
0.1
%
PT Network, LLC (c) (i) (l)
 
Healthcare
 
L+7.50% (9.80%), 11/30/2023
 
16,695

 
16,614

 
14,975

 
1.0
%
Questex, Inc. (c) (i)
 
Media/Entertainment
 
L+5.00% (7.11%), 9/9/2024
 
16,029

 
15,765

 
16,029

 
1.1
%
Red River Technology, LLC (c) (i)
 
Business Services
 
L+5.00% (7.10%), 8/30/2024
 
23,728

 
23,378

 
23,372

 
1.6
%
Reddy Ice Corp. (c) (i)
 
Food & Beverage
 
L+5.50% (7.82%), 7/1/2025
 
19,589

 
19,026

 
19,015

 
1.3
%
Refinitiv US Holdings, Inc.
 
Business Services
 
L+3.75% (5.79%), 10/1/2025
 
2,992

 
2,948

 
3,007

 
0.2
%
Regionalcare Hospital Partners Holdings, Inc. (j)
 
Healthcare
 
L+4.50% (6.55%), 11/14/2025
 
19,850

 
19,507

 
19,853

 
1.4
%
Resco Products, Inc. (c)
 
Industrials
 
L+6.25% (8.29%), 3/7/2020
 
10,000

 
10,000

 
10,000

 
0.7
%
Safety Products/JHC Acquisition Corp. (j)
 
Industrials
 
L+4.50% (6.54%), 6/28/2026
 
17,761

 
17,602

 
17,384

 
1.2
%
Schenectady International Group, Inc. (j)
 
Chemicals
 
L+4.75% (7.06%), 10/15/2025
 
19,643

 
19,194

 
19,078

 
1.3
%
SCUF Gaming, Inc. (c)
 
Consumer
 
L+8.50% (10.54%), 12/7/2021
 
5,477

 
4,763

 
4,847

 
0.3
%
SFR Group, SA (a) (i)
 
Telecom
 
L+3.69% (5.72%), 2/2/2026
 
15,000

 
14,963

 
14,878

 
1.0
%
SFR Group, SA (a) (i) (j)
 
Telecom
 
L+4.00% (6.03%), 8/14/2026
 
13,000

 
12,891

 
12,957

 
0.9
%
Shields Health Solutions Holdings, LLC (c) (i)
 
Healthcare
 
L+5.00% (7.04%), 8/14/2026
 
6,980

 
6,910

 
6,910

 
0.5
%

The accompanying notes are an integral part of these consolidated financial statements.
10
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

September 30, 2019
(Unaudited)
Portfolio Company (f) (q)
 
Industry
 
Investment Coupon Rate / Maturity (y)
 
Principal / Number of Shares
 
Amortized Cost
 
Fair Value
 
% of Net Assets (b)
SitusAMC Holdings Corp. (c) (i)
 
Financials
 
L+4.75% (6.79%), 6/30/2025
 
$
8,508

 
$
8,384

 
$
8,387

 
0.6
%
Skillsoft Corp. (j)
 
Technology
 
L+4.75% (6.95%), 4/28/2021
 
24,585

 
23,618

 
19,779

 
1.3
%
Squan Holding Corp. (c) (l)
 
Telecom
 
L+7.00% (9.11%), 6/30/2020
 
16,408

 
16,181

 
13,455

 
0.9
%
SSH Group Holdings, Inc. (j)
 
Education
 
L+4.25% (6.29%), 7/30/2025
 
10,763

 
10,730

 
10,749

 
0.7
%
Subsea Global Solutions, LLC (c)
 
Business Services
 
L+7.00% (9.31%), 3/29/2023
 
330

 
330

 
317

 
0.1
%
Subsea Global Solutions, LLC (c) (i)
 
Business Services
 
L+7.00% (9.13%), 3/29/2023
 
8,348

 
8,231

 
8,022

 
0.5
%
Tax Defense Network, LLC (c) (l) (p) (t)
 
Consumer
 
L+6.00% (10.00%), 4/30/2020
 
5,184

 
3,833

 
1,244

 
0.1
%
Tax Defense Network, LLC (c) (l) (p) (t)
 
Consumer
 
L+6.00% (10.00%), 4/30/2020
 
29,204

 
21,646

 
7,009

 
0.5
%
The Dun & Bradstreet Corp. (j)
 
Business Services
 
L+5.00% (7.05%), 2/6/2026
 
10,000

 
9,817

 
10,059

 
0.7
%
TIBCO Software, Inc. (j)
 
Technology
 
L+4.00% (6.07%), 6/30/2026
 
5,000

 
5,000

 
5,002

 
0.3
%
Tillamook Country Smoker, LLC (c)
 
Food & Beverage
 
L+5.75% (8.07%), 5/19/2022
 
1,483

 
1,483

 
1,438

 
0.1
%
Tillamook Country Smoker, LLC (c) (i)
 
Food & Beverage
 
L+5.75% (7.91%), 5/19/2022
 
10,142

 
10,061

 
9,847

 
0.7
%
Tivity Health, Inc. (a) (j)
 
Healthcare
 
L+4.25% (6.29%), 3/8/2024
 
1,641

 
1,626

 
1,627

 
0.1
%
Tivity Health, Inc. (a) (j)
 
Healthcare
 
L+5.25% (7.29%), 3/6/2026
 
4,396

 
4,295

 
4,362

 
0.3
%
Trademark Global, LLC (c)
 
Consumer
 
L+6.00% (8.04%), 10/31/2021
 
2,072

 
2,072

 
2,072

 
0.1
%
Traverse Midstream Partners, LLC (j)
 
Energy
 
L+4.00% (6.05%), 9/27/2024
 
16,263

 
15,867

 
14,271

 
1.0
%
Trilogy International Partners, LLC (a)
 
Telecom
 
8.88% 5/1/2022
 
14,875

 
14,833

 
14,308

 
1.0
%
University of St. Augustine Acquisition Corp. (c) (i)
 
Education
 
L+4.75% (6.80%), 2/2/2026
 
24,064

 
23,519

 
23,583

 
1.6
%
USF S&H Holdco, LLC (c)
 
Health/Fitness
 
L+5.75% (7.86%), 3/20/2023
 
1,050

 
1,050

 
1,050

 
0.1
%
USF S&H Holdco, LLC (c) (i)
 
Health/Fitness
 
L+5.75% (7.85%), 3/19/2024
 
24,063

 
23,795

 
24,063

 
1.7
%
Veritext Corp. (i)
 
Business Services
 
L+3.75% (5.85%), 8/1/2025
 
4,987

 
4,987

 
4,964

 
0.3
%
Vertex Aerospace Services Corp. (i)
 
Industrials
 
L+4.50% (6.54%), 6/30/2025
 
8,748

 
8,712

 
8,765

 
0.6
%
Von Drehle Corp. (c) (i) (l)
 
Paper & Packaging
 
L+11.50% (13.60%), 3/6/2023
 
26,584

 
26,308

 
23,740

 
1.6
%
Vyaire Medical, Inc. (c) (j)
 
Healthcare
 
L+4.75% (7.07%), 4/16/2025
 
8,873

 
8,589

 
7,985

 
0.5
%
WaterBridge Midstream Operating, LLC (j)
 
Energy
 
L+5.75% (7.83%), 6/22/2026
 
11,864

 
11,591

 
11,434

 
0.8
%
WMK, LLC (c)
 
Business Services
 
L+5.75% (7.79%), 9/5/2025
 
1,828

 
1,820

 
1,828

 
0.1
%
WMK, LLC (c)
 
Business Services
 
L+5.75% (7.85%), 9/5/2024
 
1,222

 
1,222

 
1,222

 
0.1
%
WMK, LLC (c) (i)
 
Business Services
 
L+5.75% (7.79%), 9/5/2025
 
20,231

 
19,889

 
20,231

 
1.4
%
Xplornet Communications, Inc. (a) (i) (j)
 
Telecom
 
L+4.00% (6.10%), 9/9/2021
 
15,888

 
15,848

 
15,848

 
1.1
%

The accompanying notes are an integral part of these consolidated financial statements.
11
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

September 30, 2019
(Unaudited)
Portfolio Company (f) (q)
 
Industry
 
Investment Coupon Rate / Maturity (y)
 
Principal / Number of Shares
 
Amortized Cost
 
Fair Value
 
% of Net Assets (b)
YummyEarth, Inc. (c)
 
Food & Beverage
 
L+7.00% (9.02%), 8/1/2025
 
$
2,626

 
$
1,917

 
$
2,626

 
0.2
%
Sub Total Senior Secured First Lien Debt
 
 
 
 
 
 
 
$
1,893,967

 
$
1,789,730

 
122.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior Secured Second Lien Debt - 21.3% (b)
 
 
 
 
 
 
 
 
 
 
 
 
Accentcare, Inc. (c) (i)
 
Healthcare
 
L+8.75% (11.03%), 6/21/2027
 
$
17,795

 
$
17,366

 
$
17,357

 
1.2
%
Anchor Glass Container Corp. (c)
 
Paper & Packaging
 
L+7.75% (9.81%), 12/6/2024
 
20,000

 
19,845

 
11,400

 
0.8
%
Astro AB Merger Sub, Inc. (a) (c) (i)
 
Financials
 
L+7.50% (9.76%), 4/28/2023
 
7,758

 
7,758

 
7,758

 
0.5
%
Asurion Corp. (j)
 
Business Services
 
L+6.50% (8.54%), 8/4/2025
 
17,668

 
17,803

 
17,942

 
1.2
%
Avatar Purchaser, Inc. (c) (j)
 
Software/Services
 
L+7.50% (10.13%), 11/17/2025
 
11,716

 
11,447

 
11,259

 
0.8
%
Aveanna Healthcare, LLC (c)
 
Healthcare
 
L+8.00% (10.04%), 3/17/2025
 
15,000

 
14,845

 
14,190

 
1.0
%
Baker Hill Acquisition, LLC (c)
 
Financials
 
L+11.00% (13.33%), 3/22/2021
 
3,017

 
1,508

 
1,584

 
0.1
%
Baker Hill Acquisition, LLC (c)
 
Financials
 
L+11.00% (13.33%), 3/22/2021
 
447

 
410

 
447

 
0.0
%
Boston Market Corp. (c)
 
Food & Beverage
 
L+4.50% (6.81%), 1/9/2021
 
3,701

 
3,701

 
3,701

 
0.3
%
Boston Market Corp. (c)
 
Food & Beverage
 
L+8.25% (10.36%), 1/18/2021
 
26,328

 
24,150

 
13,164

 
0.9
%
Boston Market Corp. (c)
 
Food & Beverage
 
L+4.50% (6.84%), 1/9/2021
 
926

 
926

 
926

 
0.1
%
BrandMuscle Holdings, Inc. (c)
 
Business Services
 
L+8.50% (10.82%), 6/1/2022
 
24,500

 
24,298

 
24,500

 
1.7
%
Carlisle FoodService Products, Inc. (c) (i)
 
Consumer
 
L+7.75% (9.79%), 3/20/2026
 
10,719

 
10,546

 
10,719

 
0.7
%
CDS U.S. Intermediate Holdings, Inc. (a) (c)
 
Media/Entertainment
 
L+8.25% (10.35%), 7/10/2023
 
9,177

 
8,930

 
8,287

 
0.6
%
Constellis Holdings, LLC (c)
 
Business Services
 
L+9.00% (11.26%), 4/21/2025
 
1,117

 
1,117

 
279

 
0.0
%
Dentalcorp Perfect Smile, ULC (a) (c)
 
Healthcare
 
L+7.50% (9.54%), 6/8/2026
 
10,139

 
10,053

 
10,139

 
0.7
%
Dimora Brands, Inc. (c)
 
Consumer
 
L+8.50% (10.54%), 8/25/2025
 
4,464

 
4,463

 
4,464

 
0.3
%
Edelman Financial Services, LLC (a) (j)
 
Financials
 
L+6.75% (8.81%), 7/20/2026
 
6,764

 
6,735

 
6,747

 
0.5
%
Frank Entertainment Group, LLC (c) (l) (p) (t)
 
Media/Entertainment
 
12.00% 12/31/2019
 
724

 
—

 
—

 
—
%
Hyland Software, Inc. (c) (i)
 
Technology
 
L+7.00% (9.04%), 7/7/2025
 
6,904

 
6,931

 
6,904

 
0.5
%
ICP Industrial, Inc. (c)
 
Chemicals
 
L+8.25% (10.31%), 5/3/2024
 
5,588

 
5,587

 
5,588

 
0.4
%
KidKraft, Inc. (c) (l)
 
Consumer
 
12.00% 3/31/2022
 
6,357

 
6,294

 
6,071

 
0.4
%
MLN US Holdco, LLC (a) (c) (i)
 
Technology
 
L+8.75% (10.86%), 11/30/2026
 
3,000

 
2,946

 
2,540

 
0.2
%
Navicure, Inc. (c)
 
Healthcare
 
L+7.50% (9.54%), 10/31/2025
 
1,341

 
1,341

 
1,341

 
0.1
%
Northstar Financial Services Group, LLC (c)
 
Financials
 
L+7.50% (9.54%), 5/25/2026
 
2,666

 
2,655

 
2,666

 
0.2
%
PetVet Care Centers, LLC (c)
 
Healthcare
 
L+6.25% (8.29%), 2/13/2026
 
3,539

 
3,525

 
3,461

 
0.2
%

The accompanying notes are an integral part of these consolidated financial statements.
12
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

September 30, 2019
(Unaudited)
Portfolio Company (f) (q)
 
Industry
 
Investment Coupon Rate / Maturity (y)
 
Principal / Number of Shares
 
Amortized Cost
 
Fair Value
 
% of Net Assets (b)
PI US Holdco III, Ltd. (a) (c)
 
Financials
 
L+7.25% (9.29%), 12/22/2025
 
$
6,696

 
$
6,643

 
$
6,562

 
0.4
%
ProAmpac, LLC (c)
 
Paper & Packaging
 
L+8.50% (10.62%), 11/18/2024
 
3,352

 
3,351

 
3,352

 
0.2
%
Project Boost Purchaser, LLC (c)
 
Business Services
 
L+8.00% (10.04%), 5/31/2027
 
1,848

 
1,848

 
1,848

 
0.1
%
QuickBase, Inc. (c)
 
Technology
 
L+8.00% (10.07%), 4/2/2027
 
7,484

 
7,344

 
7,334

 
0.5
%
Recess Holdings, Inc. (c) (i)
 
Industrials
 
L+7.75% (9.79%), 9/29/2025
 
15,008

 
14,834

 
15,008

 
1.0
%
Renaissance Holding Corp.
 
Software/Services
 
L+7.00% (9.04%), 5/29/2026
 
8,456

 
8,314

 
8,123

 
0.5
%
River Cree Enterprises, LP (a) (c) (z)
 
Gaming/Lodging
 
10.00% 5/17/2025
 
CAD
21,275

 
16,420

 
16,068

 
1.1
%
SCA Pharmaceuticals, LLC (c)
 
Healthcare
 
L+9.00% (11.10%), 12/16/2020
 
2,235

 
2,184

 
1,989

 
0.1
%
SSH Group Holdings, Inc. (c) (i)
 
Education
 
L+8.25% (10.35%), 7/30/2026
 
10,122

 
10,035

 
10,122

 
0.7
%
St. Croix Hospice Acquisition Corp. (c)
 
Healthcare
 
L+8.75% (10.79%), 3/29/2024
 
2,056

 
1,978

 
2,056

 
0.1
%
TierPoint, LLC (c)
 
Business Services
 
L+7.25% (9.29%), 5/5/2025
 
5,334

 
5,297

 
5,014

 
0.3
%
Travelpro Products, Inc. (a) (c) (l)
 
Consumer
 
13.00% 11/1/2022
 
2,392

 
2,392

 
2,392

 
0.2
%
Travelpro Products, Inc. (a) (c) (l) (z)
 
Consumer
 
13.00% 11/21/2022
 
CAD
2,772

 
2,124

 
2,093

 
0.1
%
US Salt, LLC (c) (i)
 
Industrials
 
L+8.63% (10.67%), 1/18/2027
 
26,968

 
26,169

 
26,213

 
1.8
%
Vantage Mobility International, LLC (c) (l) (t)
 
Transportation
 
L+6.00% (8.04%), 6/30/2023
 
2,826

 
2,743

 
2,826

 
0.2
%
Vital Proteins, LLC (c) (l)
 
Consumer
 
12.00% 5/16/2022
 
8,530

 
8,372

 
8,359

 
0.6
%
Sub Total Senior Secured Second Lien Debt
 
 
 
 
 
 
 
$
335,228

 
$
312,793

 
21.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Subordinated Debt - 7.5% (b)
 
 
 
 
 
 
 
 
 
 
 
 
AHP Health Partners, Inc.
 
Healthcare
 
9.75% 7/15/2026
 
$
6,589

 
$
6,509

 
$
6,980

 
0.5
%
BMC Software Finance, Inc.
 
Technology
 
9.75% 9/1/2026
 
2,988

 
2,816

 
2,848

 
0.2
%
Captek Softgel International, Inc. (c) (l)
 
Health/Fitness
 
11.50% 1/30/2023
 
7,072

 
7,071

 
5,948

 
0.4
%
Community Intervention Services, Inc. (c) (l) (t)
 
Healthcare
 
13.00% 1/29/2021
 
5,879

 
—

 
—

 
—
%
Del Real, LLC (c)
 
Food & Beverage
 
11.00% 4/1/2023
 
3,129

 
2,988

 
2,641

 
0.2
%
Dyno Acquiror, Inc. (c) (l)
 
Consumer
 
12.00% 8/1/2020
 
1,070

 
1,070

 
1,070

 
0.1
%
HemaSource, Inc. (c) (x)
 
Healthcare
 
11.00% 1/1/2024
 
2,235

 
2,147

 
2,156

 
0.1
%
HTC Borrower, LLC (c) (l)
 
Consumer
 
13.00% 9/1/2020
 
5,535

 
5,417

 
5,535

 
0.4
%
Iridium Communications, Inc.
 
Telecom
 
10.25% 4/15/2023
 
3,536

 
3,536

 
3,825

 
0.2
%
Park Ave RE Holdings, LLC (c) (l) (o) (w)
 
Financials
 
13.00% 12/31/2021
 
35,487

 
35,487

 
35,487

 
2.4
%
PCX Aerostructures, LLC (c) (l)
 
Industrials
 
6.00% 8/9/2021
 
7,759

 
5,946

 
5,819

 
0.4
%
RMP Group, Inc. (c) (l)
 
Financials
 
11.50% 9/1/2022
 
2,294

 
2,229

 
2,294

 
0.2
%
Siena Capital Finance, LLC (c) (o)
 
Financials
 
12.50% 8/16/2021
 
22,500

 
22,490

 
22,500

 
1.5
%
Xplornet Communications, Inc. (a)
 
Telecom
 
9.63% 6/1/2022
 
12,304

 
12,304

 
12,552

 
0.9
%
Sub Total Subordinated Debt
 
 
 
 
 
 
 
$
110,010

 
$
109,655

 
7.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Collateralized Securities - 7.5% (b)
 
 
 
 
 
 
 
 
 
 
 
 

The accompanying notes are an integral part of these consolidated financial statements.
13
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

September 30, 2019
(Unaudited)
Portfolio Company (f) (q)
 
Industry
 
Investment Coupon Rate / Maturity (y)
 
Principal / Number of Shares
 
Amortized Cost
 
Fair Value
 
% of Net Assets (b)
Collateralized Securities - Debt Investment
 
 
 
 
 
 
 
 
 
 
 
 
Crown Point CLO, Ltd. 2019-8A E (a) (c)
 
Diversified Investment Vehicles
 
L+7.10% (9.23%), 10/20/2032
 
$
3,000

 
$
2,866

 
$
2,870

 
0.2
%
Dryden Senior Loan Fund 2014-36A ER2 (a) (c)
 
Diversified Investment Vehicles
 
L+6.88% (9.18%), 4/15/2029
 
2,000

 
1,945

 
1,946

 
0.1
%
Figueroa CLO, Ltd. 2014-1A FR (a) (c) (p)
 
Diversified Investment Vehicles
 
L+10.00% (12.30%), 1/15/2027
 
8,000

 
8,000

 
7,877

 
0.5
%
KKR Financial CLO, Ltd. 27A E (a) (c)
 
Diversified Investment Vehicles
 
L+6.90% (8.90%), 10/15/2032
 
1,250

 
1,188

 
1,188

 
0.1
%
NewStar Arlington Senior Loan Program, LLC 14-1A FR (a) (c) (p)
 
Diversified Investment Vehicles
 
L+11.00% (13.28%), 4/25/2031
 
4,750

 
4,545

 
4,607

 
0.3
%
Newstar Fairfield Fund CLO, Ltd. 2015-1RA F (a) (c) (p)
 
Diversified Investment Vehicles
 
L+7.50% (9.78%), 1/20/2027
 
10,728

 
9,545

 
9,243

 
0.6
%
OCP CLO, Ltd. 2019-17A E (a) (c)
 
Diversified Investment Vehicles
 
L+6.66% (8.96%), 7/20/2032
 
3,000

 
2,911

 
2,887

 
0.2
%
Sound Point CLO, Ltd. 19-3A E (a) (c)
 
Diversified Investment Vehicles
 
L+7.31% (9.41%), 10/25/2032
 
3,000

 
2,910

 
2,918

 
0.2
%
Sound Point CLO, Ltd. 2015-3A ER (a) (c)
 
Diversified Investment Vehicles
 
L+5.25% (7.53%), 1/20/2028
 
2,000

 
1,877

 
1,880

 
0.1
%
Symphony CLO, Ltd. 2012-9A ER2 (a) (c)
 
Diversified Investment Vehicles
 
L+6.95% (9.24%), 7/16/2032
 
3,000

 
2,941

 
2,915

 
0.2
%
Vibrant CLO, Ltd. 2016-4A DR (a) (c)
 
Diversified Investment Vehicles
 
L+4.33% (6.48%), 7/20/2032
 
3,000

 
2,911

 
2,915

 
0.2
%
Whitehorse, Ltd. 2014-1A E (a) (c) (p)
 
Diversified Investment Vehicles
 
L+4.55% (6.80%), 5/1/2026
 
8,000

 
7,706

 
7,908

 
0.6
%
Zais CLO 13, Ltd. 19-13A D1 (a) (c)
 
Diversified Investment Vehicles
 
L+4.52% (6.60%), 7/15/2032
 
3,000

 
2,851

 
2,858

 
0.2
%
Collateralized Securities - Equity Investment (n)
 
 
 
 
 
 
 
 
 
 
 
 
B&M CLO, Ltd. 2014-1A SUB (a) (c) (p) (v)
 
Diversified Investment Vehicles
 
0.00% 4/16/2026
 
$
40,250

 
$
7,596

 
$
3,386

 
0.2
%
CVP Cascade CLO, Ltd. 2013-CLO1 Side Letter (a) (c) (p)
 
Diversified Investment Vehicles
 
0.00% 1/16/2026
 
3,243

 
155

 
25

 
0.0
%
CVP Cascade CLO, Ltd. 2013-CLO1 SUB (a) (c) (p) (v)
 
Diversified Investment Vehicles
 
0.00% 1/16/2026
 
31,000

 
643

 
—

 
—
%
CVP Cascade CLO, Ltd. 2014-2A Side Letter (a) (c) (p)
 
Diversified Investment Vehicles
 
0.00% 7/18/2026
 
3,755

 
510

 
38

 
0.0
%
Figueroa CLO, Ltd. 2014-1A Side Letter (a) (c) (p)
 
Diversified Investment Vehicles
 
2.46% 1/15/2027
 
2,986

 
768

 
75

 
0.0
%
Figueroa CLO, Ltd. 2014-1A SUB (a) (c) (p) (v)
 
Diversified Investment Vehicles
 
0.00% 1/15/2027
 
35,057

 
9,160

 
6,645

 
0.5
%
MidOcean Credit CLO 2013-2A INC (a) (c) (p) (v)
 
Diversified Investment Vehicles
 
0.00% 1/29/2025
 
37,600

 
17,993

 
14,690

 
1.0
%
MidOcean Credit CLO 2015-4A INC (a) (c) (p) (v)
 
Diversified Investment Vehicles
 
0.00% 4/15/2027
 
21,500

 
9,119

 
4,328

 
0.3
%
NewStar Arlington Senior Loan Program, LLC 14-1A SUB (a) (c) (p) (v)
 
Diversified Investment Vehicles
 
21.53% 7/25/2025
 
31,603

 
19,606

 
20,723

 
1.4
%
Newstar Fairfield Fund CLO, Ltd. 2015-1RA SUB (a) (c) (p) (v)
 
Diversified Investment Vehicles
 
32.93% 1/20/2027
 
31,575

 
8,076

 
7,397

 
0.5
%
OFSI Fund, Ltd. 2014-6A Side Letter (a) (c) (p)
 
Diversified Investment Vehicles
 
7.02% 3/20/2025
 
1,970

 
263

 
—

 
—
%
OFSI Fund, Ltd. 2014-6A SUB (a) (c) (p) (v)
 
Diversified Investment Vehicles
 
0.00% 3/20/2025
 
38,000

 
9,141

 
763

 
0.1
%
Whitehorse, Ltd. 2014-1A Side Letter (a) (c) (p)
 
Diversified Investment Vehicles
 
0.00% 5/1/2026
 
1,886

 
297

 
79

 
0.0
%

The accompanying notes are an integral part of these consolidated financial statements.
14
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

September 30, 2019
(Unaudited)
Portfolio Company (f) (q)
 
Industry
 
Investment Coupon Rate / Maturity (y)
 
Principal / Number of Shares
 
Amortized Cost
 
Fair Value
 
% of Net Assets (b)
Whitehorse, Ltd. 2014-1A SUB (a) (c) (p) (v)
 
Diversified Investment Vehicles
 
0.00% 5/1/2026
 
$
36,000

 
$
7,148

 
$
54

 
0.0
%
Sub Total Collateralized Securities
 
 
 
 
 
 
 
$
142,671

 
$
110,215

 
7.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity/Other - 17.4% (b) (d)
 
 
 
 
 
 
 
 
 
 
 
 
Aden & Anais Holdings, Inc. (c) (e) (x)
 
Retail
 
 
 
4,470

 
$
—

 
$
—

 
—
%
Answers Corp. (c) (p)
 
Media/Entertainment
 
 
 
908,911

 
11,361

 
727

 
0.0
%
Avaya Holdings Corp. (a) (e) (s)
 
Technology
 
 
 
208,402

 
3,309

 
2,132

 
0.1
%
Baker Hill Acquisition, LLC (c) (e)
 
Financials
 
 
 
22,653

 
—

 
—

 
—
%
Boston Market Corp. (c) (e) (u)
 
Food & Beverage
 
 
 
160,327

 
—

 
—

 
—
%
Capstone Nutrition Development, LLC (c) (e) (p) (u)
 
Consumer
 
 
 
42,883

 
4,288

 
4,288

 
0.3
%
Captek Softgel International, Inc. (c) (e) (x)
 
Health/Fitness
 
 
 
8,498

 
942

 
193

 
0.0
%
Centerfield Media Holdings, LLC (c) (e)
 
Media/Entertainment
 
 
 
112

 
245

 
228

 
0.0
%
CRD Holdings, LLC (a) (c) (o) (u)
 
Energy
 
9.00
%
 
52,285,603

 
31,696

 
32,600

 
2.3
%
CRS-SPV, Inc. (c) (e) (o)
 
Industrials
 
 
 
246

 
2,219

 
2,221

 
0.2
%
CWS Holding Company, LLC (c) (e)
 
Consumer
 
 
 
335,255

 
—

 
559

 
0.0
%
Danish CRJ, Ltd. (a) (c) (e) (p) (r)
 
Transportation
 
 
 
5,002

 
—

 
—

 
—
%
Data Source Holdings, LLC (c) (e)
 
Business Services
 
 
 
10,617

 
140

 
93

 
0.0
%
Del Real, LLC (c) (e) (u)
 
Food & Beverage
 
 
 
670,510

 
382

 
—

 
—
%
Dyno Acquiror, Inc. (c) (e)
 
Consumer
 
 
 
134,102

 
58

 
80

 
0.0
%
Frank Entertainment Group, LLC (c) (e) (p) (u)
 
Media/Entertainment
 
 
 
135,566

 
—

 
—

 
—
%
Frank Entertainment Group, LLC (c) (e) (p) (u)
 
Media/Entertainment
 
 
 
625,810

 
—

 
—

 
—
%
Frank Entertainment Group, LLC (c) (e) (p) (u)
 
Media/Entertainment
 
 
 
625,810

 
—

 
—

 
—
%
HemaSource, Inc. (c) (e) (x)
 
Healthcare
 
 
 
223,503

 
168

 
127

 
0.0
%
ICP Industrial, Inc. (c) (e)
 
Chemicals
 
 
 
288

 
279

 
380

 
0.0
%
Integrated Efficiency Solutions, Inc. (c) (e)
 
Industrials
 
 
 
53,215

 
56

 
32

 
0.0
%
Integrated Efficiency Solutions, Inc. (c) (e)
 
Industrials
 
 
 
2,975

 
3

 
4

 
0.0
%
Kahala Ireland OpCo Designated Activity Company (a) (c) (e) (h) (o)
 
Transportation
 
 
 
1

 
—

 
51,806

 
3.6
%
Kahala Ireland OpCo Designated Activity Company (a) (c) (e) (h) (o)
 
Transportation
 
 
 
3,250,000

 
2,816

 
3,250

 
0.2
%
Kahala US OpCo, LLC (a) (c) (e) (k) (o)
 
Transportation
 
13.00
%
 
4,413,472

 
—

 
—

 
—
%
K-Square Restaurant Partners, LP (c) (e) (x)
 
Food & Beverage
 
 
 
447

 
175

 
—

 
—
%
Lakeview Health Holdings, Inc. (c) (e)
 
Healthcare
 
 
 
447

 
—

 
—

 
—
%
MGTF Holdco, LLC (c) (e) (u)
 
Media/Entertainment
 
 
 
330,000

 
—

 
—

 
—
%
MIC Holding, LLC (c) (e)
 
Consumer
 
 
 
1,470

 
3,687

 
4,369

 
0.3
%
MIC Holding, LLC (c) (e)
 
Consumer
 
 
 
30,000

 
3,750

 
3,822

 
0.3
%
Micross Solutions, LLC (c) (e)
 
Software/Services
 
 
 
442,430

 
223

 
664

 
0.0
%
Mood Media Corp. (c) (e)
 
Media/Entertainment
 
 
 
121,021

 
27

 
—

 
—
%

The accompanying notes are an integral part of these consolidated financial statements.
15
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

September 30, 2019
(Unaudited)
Portfolio Company (f) (q)
 
Industry
 
Investment Coupon Rate / Maturity (y)
 
Principal / Number of Shares
 
Amortized Cost
 
Fair Value
 
% of Net Assets (b)
Motor Vehicle Software Corp. (c) (e) (x)
 
Business Services
 
 
 
223,503

 
$
318

 
$
246

 
0.0
%
NexSteppe, Inc. (c) (e) (o)
 
Chemicals
 
 
 
237,239,694

 
737

 
—

 
—
%
NMFC Senior Loan Program I, LLC (a) (o)
 
Diversified Investment Vehicles
 
 
 
50,000

 
50,000

 
47,800

 
3.3
%
Nomacorc, LLC (c) (e) (u)
 
Industrials
 
 
 
356,816

 
56

 
143

 
0.0
%
Park Ave RE Holdings, LLC (c) (e) (o) (w)
 
Financials
 

 
719

 
346

 
8,505

 
0.6
%
Passport Food Group, LLC (c) (e) (x)
 
Food & Beverage
 
 
 
4,470

 
—

 
—

 
—
%
PCX Aerostructures, LLC (c) (e)
 
Industrials
 
 
 
315

 
—

 
—

 
—
%
PCX Aerostructures, LLC (c) (e)
 
Industrials
 
 
 
27,250

 
—

 
—

 
—
%
PCX Aerostructures, LLC (c) (e)
 
Industrials
 
 
 
1,356

 
—

 
—

 
—
%
PennantPark Credit Opportunities Fund II, LP (a) (p)
 
Diversified Investment Vehicles
 
 
 
8,739

 
8,739

 
8,574

 
0.6
%
PT Network, LLC (c) (e) (u)
 
Healthcare
 
 
 
3

 
—

 
—

 
—
%
RMP Group, Inc. (c) (e) (u)
 
Financials
 
 
 
223

 
164

 
274

 
0.0
%
RockYou, Inc. (c) (e)
 
Media/Entertainment
 
 
 
15,105

 
—

 
—

 
—
%
Schweiger Dermatology Group, LLC (c) (e) (u)
 
Healthcare
 
 
 
265,024

 
—

 
—

 
—
%
SCUF Gaming, Inc. (c) (e)
 
Consumer
 
 
 
6,060

 
21

 
157

 
0.0
%
Siena Capital Finance, LLC (c) (o)
 
Financials
 
 
 
35,839,400

 
36,523

 
36,915

 
2.5
%
Smile Brands, Inc. (c) (e)
 
Healthcare
 
 
 
712

 
815

 
1,101

 
0.1
%
Squan Holding Corp. (c) (e)
 
Telecom
 
 
 
180,835

 
—

 
—

 
—
%
Squan Holding Corp. (c) (e)
 
Telecom
 
 
 
8,962

 
—

 
—

 
—
%
St. Croix Hospice Acquisition Corp. (c) (e)
 
Healthcare
 
 
 
112

 
—

 
31

 
0.0
%
St. Croix Hospice Acquisition Corp. (c) (e)
 
Healthcare
 
 
 
112

 
64

 
131

 
0.0
%
SYNACOR, Inc. (e) (s)
 
Technology
 
 
 
59,785

 
—

 
84

 
0.0
%
Tap Rock Resources, LLC (c) (e) (g) (u)
 
Energy
 
 
 
12,803,401

 
12,803

 
12,803

 
0.9
%
Tax Advisors Group, LLC (c) (e) (u)
 
Financials
 
 
 
86

 
609

 
755

 
0.1
%
Tax Defense Network, LLC (c) (e) (p)
 
Consumer
 
 
 
633,382

 
—

 
—

 
—
%
Tax Defense Network, LLC (c) (e) (p)
 
Consumer
 
 
 
147,099

 
425

 
—

 
—
%
Team Waste, LLC (c) (e) (p) (u)
 
Industrials
 
 
 
111,752

 
2,235

 
2,235

 
0.2
%
Tennenbaum Waterman Fund, LP (a) (p)
 
Diversified Investment Vehicles
 
 
 
10,000

 
10,000

 
9,752

 
0.7
%
THL Credit Greenway Fund II, LLC (a) (p)
 
Diversified Investment Vehicles
 
 
 
7,398

 
7,398

 
5,674

 
0.4
%
Travelpro Products, Inc. (a) (c) (e)
 
Consumer
 
 
 
447,007

 
506

 
581

 
0.0
%
TwentyEighty, Inc. (c) (e) (p)
 
Business Services
 
 
 
54,586

 
—

 
4,895

 
0.3
%
United Biologics, LLC (c) (e) (u)
 
Healthcare
 
 
 
39,769

 
132

 
21

 
0.0
%
United Biologics, LLC (c) (e) (u)
 
Healthcare
 
 
 
3,155

 
—

 
—

 
—
%
United Biologics, LLC (c) (e) (u)
 
Healthcare
 
 
 
99,236

 
—

 
—

 
—
%
United Biologics, LLC (c) (e) (u)
 
Healthcare
 
 
 
223

 
35

 
9

 
0.0
%
United Biologics, LLC (c) (e) (u)
 
Healthcare
 
 
 
4,206

 
31

 
15

 
0.0
%
USASF Holdco, LLC (c) (e) (u)
 
Financials
 
 
 
10,000

 
10

 
—

 
—
%
USASF Holdco, LLC (c) (e) (u)
 
Financials
 
 
 
490

 
490

 
640

 
0.0
%

The accompanying notes are an integral part of these consolidated financial statements.
16
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

September 30, 2019
(Unaudited)
Portfolio Company (f) (q)
 
Industry
 
Investment Coupon Rate / Maturity (y)
 
Principal / Number of Shares
 
Amortized Cost
 
Fair Value
 
% of Net Assets (b)
USASF Holdco, LLC (c) (e) (u)
 
Financials
 
 
 
56

 
$
56

 
$
111

 
0.0
%
Vantage Mobility International, LLC (c) (e)
 
Transportation
 
 
 
1,468,221

 
—

 
—

 
—
%
Vantage Mobility International, LLC (c) (e)
 
Transportation
 
 
 
391,131

 
—

 
—

 
—
%
Vantage Mobility International, LLC (c) (e)
 
Transportation
 
 
 
3,139,625

 
3,140

 
1,570

 
0.1
%
Women's Marketing, Inc. (c) (e)
 
Media/Entertainment
 
 
 
3,643

 
—

 
—

 
—
%
Women's Marketing, Inc. (c) (e)
 
Media/Entertainment
 
 
 
2,235

 
—

 
—

 
—
%
World Business Lenders, LLC (c) (e) (p)
 
Financials
 
 
 
922,669

 
3,750

 
3,755

 
0.3
%
WPNT, LLC (c) (e) (u)
 
Media/Entertainment
 
 
 
330,000

 
—

 
—

 
—
%
WSO Holdings, LP (c) (e)
 
Food & Beverage
 
 
 
698

 
279

 
—

 
—
%
Wythe Will Tzetzo, LLC (c) (e) (u)
 
Food & Beverage
 
 
 
22,312

 
302

 
—

 
—
%
YummyEarth, Inc. (c) (e)
 
Food & Beverage
 
 
 
223

 
—

 
—

 
—
%
Sub Total Equity/Other
 
 
 
 
 
 
 
$
205,808

 
$
254,352

 
17.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
TOTAL INVESTMENTS - 175.8% (b)
 
 
 
 
 
 
 
$
2,687,684

 
$
2,576,745

 
175.8
%
Forward foreign currency contracts:
Counterparty
 
Contract to Deliver
 
In Exchange For
 
Maturity Date
 
Unrealized Appreciation
Goldman Sachs International
 
CAD 21,275
 
$
16,232

 
10/10/2019
 
$
167

_____________
(a)
All of the Company's investments, except the investments noted by this footnote, are qualifying assets under Section 55(a) of the Investment Company Act of 1940, as amended (the "1940 Act"). Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. Qualifying assets represent 77.4% of the Company's total assets. The significant majority of all investments held are deemed to be illiquid.
(b)
Percentages are based on net assets of $1,465,417 as of September 30, 2019.
(c)
The fair value of investments with respect to securities for which market quotations are not readily available is determined in good faith by the Company's board of directors as required by the 1940 Act. Such investments are valued using significant unobservable inputs (See Note 3 to the consolidated financial statements).
(d)
All amounts are in thousands except share amounts.
(e)
Non-income producing at September 30, 2019.
(f)
The Company has various unfunded commitments to portfolio companies. Please refer to Note 7 - Commitments and Contingencies for details of these unfunded commitments.
(g)
The commitment related to this investment is discretionary.
(h)
The Company's investment is held through the consolidated subsidiaries, Kahala Aviation Holdings, LLC and Kahala LuxCo, which own 100% of the equity of the operating company, Kahala Ireland OpCo Designated Activity Company.
(i)
The Company's investment or a portion thereof is pledged as collateral under the Wells Fargo Credit Facility. Individual investments can be divided into parts which are pledged to separate credit facilities.
(j)
The Company's investment or a portion thereof is pledged as collateral under the Citi Credit Facility. Individual investments can be divided into parts which are pledged to separate credit facilities.
(k)
The Company's investment is held through the consolidated subsidiaries, Kahala Aviation Holdings, LLC and Kahala Aviation US, Inc. which own 100% of the equity of the operating company, Kahala US OpCo LLC.

The accompanying notes are an integral part of these consolidated financial statements.
17
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

(l)
For the three months ended September 30, 2019, the following investments paid or have the option to pay all or a portion of interest and dividends via payment-in-kind (“PIK”):
September 30, 2019
(Unaudited)
Portfolio Company
 
Investment Type
 
Cash
 
PIK
 
All-in Rate
 
PIK earned for the three months ended September 30, 2019
Frank Entertainment Group, LLC
 
Senior Secured First Lien Debt
 
—
%
 
11.03
%
 
11.03
%
 
$
—

Gold Standard Baking, Inc.
 
Senior Secured First Lien Debt
 
6.63
%
 
2.00
%
 
8.63
%
 
69

Integral Ad Science, Inc.
 
Senior Secured First Lien Debt
 
8.05
%
 
1.25
%
 
9.30
%
 
47

Internap Corp.
 
Senior Secured First Lien Debt
 
8.31
%
 
0.75
%
 
9.06
%
 
23

Kahala Ireland OpCo Designated Activity Company
 
Senior Secured First Lien Debt
 
13.00
%
 
—
%
 
13.00
%
 
—

LightSquared, LP
 
Senior Secured First Lien Debt
 
—
%
 
10.85
%
 
10.85
%
 
391

NexSteppe, Inc.
 
Senior Secured First Lien Debt
 
—
%
 
12.00
%
 
12.00
%
 
—

NexSteppe, Inc.
 
Senior Secured First Lien Debt
 
—
%
 
12.00
%
 
12.00
%
 
—

PT Network, LLC
 
Senior Secured First Lien Debt
 
7.80
%
 
2.00
%
 
9.80
%
 
16

Squan Holding Corp.
 
Senior Secured First Lien Debt
 
8.11
%
 
1.00
%
 
9.11
%
 
42

Tax Defense Network, LLC
 
Senior Secured First Lien Debt
 
4.53
%
 
5.47
%
 
10.00
%
 
—

Tax Defense Network, LLC
 
Senior Secured First Lien Debt
 
4.53
%
 
5.47
%
 
10.00
%
 
—

TwentyEighty, Inc.
 
Senior Secured First Lien Debt
 
4.00
%
 
4.00
%
 
8.00
%
 
70

TwentyEighty, Inc.
 
Senior Secured First Lien Debt
 
0.25
%
 
8.75
%
 
9.00
%
 
150

Von Drehle Corp.
 
Senior Secured First Lien Debt
 
9.60
%
 
4.00
%
 
13.60
%
 
276

Frank Entertainment Group, LLC
 
Senior Secured Second Lien Debt
 
—
%
 
12.00
%
 
12.00
%
 
—

KidKraft, Inc.
 
Senior Secured Second Lien Debt
 
11.00
%
 
1.00
%
 
12.00
%
 
16

Travelpro Products, Inc.
 
Senior Secured Second Lien Debt
 
11.00
%
 
2.00
%
 
13.00
%
 
12

Travelpro Products, Inc.
 
Senior Secured Second Lien Debt
 
11.00
%
 
2.00
%
 
13.00
%
 
10

Vantage Mobility International, LLC
 
Senior Secured Second Lien Debt
 
—
%
 
8.04
%
 
8.04
%
 
—

Vital Proteins, LLC
 
Senior Secured Second Lien Debt
 
7.50
%
 
4.50
%
 
12.00
%
 
70

Captek Softgel International, Inc.
 
Subordinated Debt
 
10.00
%
 
1.50
%
 
11.50
%
 
27

Community Intervention Services, Inc.
 
Subordinated Debt
 
—
%
 
13.00
%
 
13.00
%
 
—

Dyno Acquiror, Inc.
 
Subordinated Debt
 
10.50
%
 
1.50
%
 
12.00
%
 
4

HTC Borrower, LLC
 
Subordinated Debt
 
10.00
%
 
3.00
%
 
13.00
%
 
42

Park Ave RE Holdings, LLC
 
Subordinated Debt
 
13.00
%
 
—
%
 
13.00
%
 
—

PCX Aerostructures, LLC
 
Subordinated Debt
 
—
%
 
6.00
%
 
6.00
%
 
117

RMP Group, Inc.
 
Subordinated Debt
 
10.50
%
 
1.00
%
 
11.50
%
 
6

Total
 
 
 
 
 
 
 
 
 
$
1,388

(m)
The investment is held through a participation interest in which the Company has a contractual relationship only with the loan transferor, not the underlying borrower. The Company may be subject to the credit risk of the loan transferor as well as of the borrower. As of September 30, 2019, no investments were held through a participation interest.
(n)
For equity investments in Collateralized Securities, the effective yield is presented in place of the investment coupon rate for each investment. Refer to footnote (v) for a further description of an equity investment in a Collateralized Security.
(o)
The provisions of the 1940 Act classify investments based on the level of control that the Company maintains in a particular portfolio company. As defined in the 1940 Act, a company is generally presumed to be "non-controlled" when the Company owns 25% or less of the portfolio company's voting securities and "controlled" when the Company owns more than 25% of the portfolio company's voting securities. The Company classifies this investment as "controlled".
(p)
The provisions of the 1940 Act classify investments further based on the level of ownership that the Company maintains in a particular portfolio company. As defined in the 1940 Act, a company is generally deemed as "non-affiliated" when the Company owns less than 5% of a portfolio company's voting securities and "affiliated" when the Company owns 5% or more of a portfolio company's voting securities. The Company classifies this investment as "affiliated".
(q)
Unless otherwise indicated, all investments in the consolidated schedule of investments are non-affiliated, non-controlled investments.
(r)
The Company's investment is held through the Consolidated Holding Company, Kahala Aviation Holdings, LLC, which owns 49% of the operating company, Danish CRJ LTD.
(s)
The investment is not a restricted security. All other securities are restricted securities.

The accompanying notes are an integral part of these consolidated financial statements.
18
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

(t)
The investment is on non-accrual status as of September 30, 2019.
(u)
Investments are held in the taxable wholly-owned, consolidated subsidiary, 54th Street Equity Holdings, Inc.
(v)
The Collateralized Securities - subordinated notes are treated as equity investments and are entitled to recurring distributions which are generally equal to the remaining cash flow of the payments made by the underlying fund’s securities less contractual payments to debt holders and fund expenses. The estimated yield indicated is based upon a current projection of the amount and timing of these recurring distributions and the estimated amount of repayment of principal upon termination. Such projections are periodically reviewed and adjusted, and the estimated yield may not ultimately be realized.
(w)
The Company's investment is held through the consolidated subsidiary, Park Ave RE, Inc., which owns 100% of the equity of the operating company, Park Ave RE Holdings, LLC.
(x)
The investment is held through BSP TCAP Acquisition Holdings LP which, as further outlined in Note 1, is an affiliated acquisition entity utilized for the Triangle Transaction. Due to certain restrictions, such as limits on the number of partners allowable within the equity structures of the newly acquired investments, these investments are still held within the acquisition entity as of September 30, 2019. 
(y)
The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate ("LIBOR" or "L") or Prime ("P") and which reset daily, monthly, quarterly, or semiannually. For each, the Company has provided the spread over LIBOR or Prime and the current interest rate in effect at September 30, 2019. Certain investments are subject to a LIBOR or Prime interest rate floor. For fixed rate loans, a spread above a reference rate is not applicable.
(z)
The principal amount (par amount) is denominated in Canadian Dollars or CAD.



    

The accompanying notes are an integral part of these consolidated financial statements.
19
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

September 30, 2019
(Unaudited)
The following table shows the portfolio composition by industry grouping based on fair value at September 30, 2019:
 
At September 30, 2019
 
Investments at
Fair Value
 
Percentage of
Total Portfolio
Healthcare
$
380,631

 
14.8
%
Business Services
336,635

 
13.1
%
Industrials
308,516

 
12.0
%
Diversified Investment Vehicles
182,015

 
7.1
%
Financials
165,575

 
6.4
%
Telecom
155,122

 
6.0
%
Energy
147,910

 
5.7
%
Technology
140,062

 
5.4
%
Media/Entertainment
139,582

 
5.4
%
Transportation
137,920

 
5.4
%
Food & Beverage
107,757

 
4.2
%
Consumer
89,671

 
3.5
%
Software/Services
55,143

 
2.1
%
Education
53,737

 
2.1
%
Chemicals
49,533

 
1.9
%
Gaming/Lodging
47,273

 
1.8
%
Paper & Packaging
43,202

 
1.7
%
Health/Fitness
31,254

 
1.2
%
Retail
5,207

 
0.2
%
Total
$
2,576,745

 
100.0
%

The accompanying notes are an integral part of these consolidated financial statements.
20
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

December 31, 2018
Portfolio Company (f) (q)
 
Industry
 
Investment Coupon Rate / Maturity (y)
 
Principal / Number of Shares
 
Amortized Cost
 
Fair Value
 
% of Net Assets (b)
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior Secured First Lien
Debt - 106.8% (b)
 
 
 
 
 
 
 
 
 
 
 
 
Abaco Systems Holding Corp. (c) (i)
 
Industrials
 
L+6.00% (8.41%), 12/7/2021
 
$
23,456

 
$
23,177

 
$
22,980

 
1.5
%
ABC Financial Intermediate, LLC (c) (j)
 
Technology
 
L+4.25% (6.64%), 1/2/2025
 
7,681

 
7,648

 
7,681

 
0.5
%
AccentCare, Inc. (c)
 
Healthcare
 
L+4.50% (7.04%), 4/2/2019
 
3,353

 
3,349

 
3,323

 
0.2
%
AccentCare, Inc. (c) (i)
 
Healthcare
 
L+4.50% (7.30%), 4/3/2024
 
28,646

 
28,390

 
28,388

 
1.9
%
AHP Health Partners, Inc. (i)
 
Healthcare
 
L+4.50% (7.02%), 6/30/2025
 
18,888

 
18,711

 
18,558

 
1.2
%
Aleris International, Inc. (j)
 
Industrials
 
L+4.75% (7.25%), 2/27/2023
 
18,294

 
18,151

 
18,100

 
1.2
%
Altice France SA (a)
 
Telecom
 
8.13%, 2/1/2027
 
15,000

 
14,816

 
14,172

 
0.9
%
Alvogen Pharma US, Inc. (j)
 
Healthcare
 
L+4.75% (7.27%), 4/1/2022
 
13,511

 
13,433

 
13,207

 
0.9
%
AM General, LLC (c) (i)
 
Industrials
 
L+7.25% (9.77%), 12/28/2021
 
1,781

 
1,780

 
1,781

 
0.1
%
American Greetings Corp. (j)
 
Consumer
 
L+4.50% (7.00%), 4/6/2024
 
1,755

 
1,724

 
1,722

 
0.1
%
AMI Entertainment Network, LLC (c) (i)
 
Media/Entertainment
 
L+6.00% (8.80%), 7/21/2022
 
13,397

 
13,207

 
13,157

 
0.9
%
AP Gaming I, LLC (a) (j)
 
Gaming/Lodging
 
L+3.50% (6.02%), 2/15/2024
 
18,726

 
18,698

 
18,305

 
1.2
%
AP NMT Acquisition B.V. (a) (j)
 
Media/Entertainment
 
L+5.75% (8.15%), 8/13/2021
 
6,568

 
6,583

 
6,283

 
0.4
%
AqGen Ascensus, Inc. (j)
 
Business Services
 
L+3.50% (6.12%), 12/3/2022
 
8,472

 
8,465

 
8,239

 
0.6
%
Avantor Performance Materials, Inc.
 
Healthcare
 
9.00%, 10/1/2025
 
13,000

 
13,326

 
13,000

 
0.9
%
Avaya Holdings Corp. (a) (j)
 
Technology
 
L+4.25% (6.69%), 12/15/2024
 
26,382

 
26,164

 
25,425

 
1.7
%
Aveanna Healthcare, LLC (c)
 
Healthcare
 
L+5.50% (8.02%), 3/18/2024
 
4,694

 
4,428

 
4,569

 
0.3
%
Aveanna Healthcare, LLC (c) (j)
 
Healthcare
 
L+4.25% (6.77%), 3/18/2024
 
792

 
742

 
743

 
0.0
%
BCP Raptor, LLC (j)
 
Energy
 
L+4.25% (6.87%), 6/24/2024
 
19,229

 
19,068

 
17,907

 
1.2
%
BCP Renaissance, LLC (j)
 
Energy
 
L+3.50% (6.03%), 10/31/2024
 
3,455

 
3,440

 
3,355

 
0.2
%
BDS Solutions Group, LLC (c)
 
Business Services
 
L+8.75% (11.56%), 6/1/2021
 
7,033

 
6,953

 
6,646

 
0.4
%
BDS Solutions Group, LLC (c) (i)
 
Business Services
 
L+8.75% (11.56%), 6/1/2021
 
26,098

 
25,813

 
24,662

 
1.7
%
Beaver-Visitec International Holdings, Inc. (j)
 
Healthcare
 
L+4.00% (6.62%), 8/21/2023
 
6,514

 
6,514

 
6,449

 
0.4
%
Black Mountain Sand, LLC (c)
 
Energy
 
L+9.00% (11.40%), 11/30/2021
 
13,050

 
12,907

 
12,742

 
0.9
%
Black Mountain Sand, LLC (c)
 
Energy
 
L+9.00% (11.40%), 11/30/2021
 
13,050

 
12,892

 
12,742

 
0.9
%
BMC Software Finance, Inc. (j)
 
Technology
 
L+4.25% (7.05%), 10/2/2025
 
23,309

 
23,083

 
22,428

 
1.5
%
Bomgar Corp. (j)
 
Technology
 
L+4.00% (6.55%), 4/18/2025
 
1,982

 
1,974

 
1,907

 
0.1
%
California Resources Corp. (a) (j)
 
Energy
 
L+4.75% (7.26%), 12/31/2022
 
12,259

 
12,060

 
11,850

 
0.8
%

The accompanying notes are an integral part of these consolidated financial statements.
21
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

December 31, 2018
Portfolio Company (f) (q)
 
Industry
 
Investment Coupon Rate / Maturity (y)
 
Principal / Number of Shares
 
Amortized Cost
 
Fair Value
 
% of Net Assets (b)
Capstone Nutrition (fka Integrity Nutraceuticals) (c) (l) (o) (t)
 
Consumer
 
L+12.50% (15.03%), 9/25/2020
 
$
24,706

 
$
16,406

 
$
3,459

 
0.2
%
Capstone Nutrition (fka Integrity Nutraceuticals) (c) (l) (o) (t)
 
Consumer
 
L+12.50% (15.03%), 9/25/2020
 
54,940

 
33,647

 
7,692

 
0.5
%
Capstone Nutrition (fka Integrity Nutraceuticals) (c) (l) (o) (t)
 
Consumer
 
L+12.50% (15.03%), 9/25/2020
 
3,285

 
2,829

 
3,219

 
0.2
%
CareCentrix, Inc. (j)
 
Healthcare
 
L+4.50% (7.30%), 4/3/2025
 
9,604

 
9,561

 
9,412

 
0.6
%
CCW, LLC (c)
 
Food & Beverage
 
L+7.00% (9.56%), 3/21/2021
 
1,300

 
1,300

 
1,235

 
0.1
%
CCW, LLC (c) (i)
 
Food & Beverage
 
L+7.00% (9.56%), 3/21/2021
 
27,300

 
27,088

 
25,935

 
1.7
%
CDHA Holdings, LLC (c)
 
Healthcare
 
L+6.00% (8.80%), 8/24/2023
 
430

 
430

 
424

 
0.0
%
CDHA Holdings, LLC (c) (i)
 
Healthcare
 
L+6.00% (8.80%), 8/24/2023
 
15,759

 
15,539

 
15,546

 
1.0
%
Chloe Ox Parent, LLC (c) (i)
 
Healthcare
 
L+4.50% (7.30%), 12/23/2024
 
10,687

 
10,595

 
10,701

 
0.7
%
Clarion Events, Ltd. (a) (c) (j)
 
Business Services
 
L+5.00% (7.71%), 9/29/2024
 
10,497

 
10,301

 
10,268

 
0.7
%
Clover Technologies Group, LLC (j)
 
Industrials
 
L+4.50% (7.02%), 5/8/2020
 
13,178

 
13,149

 
12,437

 
0.8
%
Cold Spring Brewing, Co. (c) (i)
 
Food & Beverage
 
L+5.25% (7.71%), 5/15/2024
 
3,352

 
3,292

 
3,286

 
0.2
%
Community Care Health Network, LLC (j)
 
Healthcare
 
L+4.75% (7.27%), 2/16/2025
 
2,672

 
2,666

 
2,592

 
0.2
%
CONSOL Energy Inc. (c) (j)
 
Industrials
 
L+6.00% (8.53%), 11/28/2022
 
3,208

 
3,157

 
3,220

 
0.2
%
Contura Energy Inc. (a) (c) (j)
 
Industrials
 
L+5.00% (7.52%), 3/18/2024
 
6,448

 
6,195

 
6,432

 
0.4
%
Corfin Industries, LLC (c)
 
Industrials
 
L+6.50% (8.95%), 2/15/2024
 
574

 
574

 
563

 
0.0
%
Corfin Industries, LLC (c) (i)
 
Industrials
 
L+6.50% (9.00%), 2/15/2024
 
8,572

 
8,426

 
8,420

 
0.6
%
Crown Subsea Communications Holding, Inc. (j)
 
Industrials
 
L+6.00% (8.35%), 11/2/2025
 
10,020

 
9,922

 
9,607

 
0.7
%
Deva Holdings, Inc. (c) (i)
 
Consumer
 
L+6.25% (8.77%), 10/31/2023
 
7,191

 
7,256

 
7,263

 
0.5
%
DLC Acquisition, LLC (c)
 
Business Services
 
L+8.00% (10.80%), 12/30/2020
 
4,340

 
4,340

 
4,340

 
0.3
%
DLC Acquisition, LLC (c) (l)
 
Business Services
 
12.00%, 12/1/2020
 
3,325

 
3,325

 
3,325

 
0.2
%
Eagle Rx, LLC (c) (i)
 
Healthcare
 
L+4.25% (6.60%), 8/15/2019
 
26,790

 
26,752

 
26,589

 
1.8
%
Florida Food Products, LLC (c)
 
Food & Beverage
 
L+6.75% (9.27%), 9/6/2023
 
1,021

 
1,021

 
997

 
0.1
%
Florida Food Products, LLC (c) (i)
 
Food & Beverage
 
L+6.75% (9.27%), 9/6/2025
 
22,338

 
21,805

 
21,780

 
1.5
%
Frank Entertainment Group, LLC (c) (p) (t)
 
Media/Entertainment
 
6.00%, 6/30/2019
 
3,014

 
1,836

 
1,441

 
0.1
%
Frontier Communications Corp. (a) (j)
 
Telecom
 
L+3.75% (6.28%), 6/17/2024
 
9,919

 
9,702

 
9,182

 
0.6
%
Gold Standard Baking, Inc.
 
Food & Beverage
 
L+4.50% (7.31%), 4/23/2021
 
2,977

 
1,812

 
1,786

 
0.1
%
Green Energy Partners/Stonewall, LLC (j)
 
Energy
 
L+5.50% (8.30%), 11/13/2021
 
1,010

 
1,008

 
999

 
0.1
%
Green Energy Partners/Stonewall, LLC (j)
 
Energy
 
L+5.50% (8.30%), 11/13/2021
 
1,337

 
1,335

 
1,323

 
0.1
%

The accompanying notes are an integral part of these consolidated financial statements.
22
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

December 31, 2018
Portfolio Company (f) (q)
 
Industry
 
Investment Coupon Rate / Maturity (y)
 
Principal / Number of Shares
 
Amortized Cost
 
Fair Value
 
% of Net Assets (b)
HC Group Holdings III, Inc. (c) (j)
 
Healthcare
 
L+3.75% (6.27%), 4/7/2022
 
$
14,630

 
$
14,467

 
$
14,630

 
1.0
%
Hexion Inc.
 
Chemicals
 
10.38%, 2/1/2022
 
5,000

 
4,944

 
4,013

 
0.3
%
Hexion Inc.
 
Chemicals
 
6.63%, 4/15/2020
 
5,000

 
4,675

 
3,988

 
0.3
%
Hexion Inc.
 
Chemicals
 
10.00%, 4/15/2020
 
10,000

 
9,363

 
8,270

 
0.6
%
ICR Operations, LLC (c)
 
Business Services
 
L+5.50% (8.31%), 3/26/2024
 
111

 
109

 
109

 
0.0
%
ICR Operations, LLC (c) (i)
 
Business Services
 
L+5.50% (8.31%), 3/26/2025
 
13,567

 
13,326

 
13,337

 
0.9
%
Ideal Tridon Holdings, Inc. (c)
 
Industrials
 
L+6.50% (9.02%), 7/31/2022
 
2,021

 
1,996

 
1,993

 
0.1
%
Ideal Tridon Holdings, Inc. (c) (i)
 
Industrials
 
L+6.50% (9.02%), 7/31/2023
 
5,185

 
5,116

 
5,111

 
0.3
%
Ideal Tridon Holdings, Inc. (c) (i)
 
Industrials
 
L+6.50% (9.02%), 7/31/2023
 
23,663

 
23,302

 
23,324

 
1.6
%
Integral Ad Science, Inc. (c) (l)
 
Software/Services
 
L+6.00% (8.53%), 7/19/2024
 
14,198

 
13,937

 
13,914

 
0.9
%
Integrated Efficiency Solutions, Inc. (c) (l)
 
Industrials
 
L+9.25% (12.05%), 6/1/2022
 
3,876

 
3,875

 
3,760

 
0.3
%
Intelsat Jackson Holdings, SA (a) (j)
 
Telecom
 
L+4.50% (7.01%), 1/2/2024
 
10,000

 
10,222

 
9,910

 
0.7
%
Internap Corp. (a) (c) (i)
 
Business Services
 
L+5.75% (8.19%), 4/6/2022
 
11,880

 
11,865

 
11,648

 
0.8
%
IPC Corp. (j)
 
Software/Services
 
L+4.50% (7.03%), 8/6/2021
 
3,784

 
3,742

 
3,235

 
0.2
%
Iri Holdings, Inc. (j)
 
Business Services
 
L+4.50% (7.02%), 11/30/2025
 
5,000

 
4,950

 
4,863

 
0.3
%
Kahala Ireland OpCo Designated Activity Company (a) (c) (l) (o)
 
Transportation
 
L+8.00% (13.00%), 12/23/2028
 
111,549

 
111,549

 
111,549

 
7.5
%
Kissner Milling Co. Ltd. (a)
 
Industrials
 
8.38%, 12/1/2022
 
21,199

 
21,472

 
21,345

 
1.4
%
Lakeland Tours, LLC (i)
 
Education
 
L+4.00% (6.79%), 12/15/2024
 
6,052

 
6,040

 
5,881

 
0.4
%
Lakeview Health Holdings, Inc. (c)
 
Healthcare
 
L+8.75% (11.55%), 12/15/2021
 
4,077

 
3,057

 
3,262

 
0.2
%
LightSquared, LP (l)
 
Telecom
 
L+8.75% (11.52%), 12/7/2020
 
12,606

 
12,017

 
8,667

 
0.6
%
Lionbridge Technologies, Inc. (i) (j)
 
Business Services
 
L+5.50% (8.02%), 2/28/2024
 
16,166

 
16,090

 
16,024

 
1.1
%
Loparex International Holding B.V. (j)
 
Paper & Packaging
 
L+4.25% (7.05%), 4/11/2025
 
1,993

 
1,984

 
1,953

 
0.1
%
McDermott Technology, B.V. (a) (j)
 
Industrials
 
L+5.00% (7.52%), 5/10/2025
 
9,975

 
9,877

 
9,285

 
0.6
%
MCS Acquisition Corp. (c) (j)
 
Business Services
 
L+4.75% (7.27%), 5/18/2024
 
14,153

 
14,105

 
11,464

 
0.8
%
Medallion Midland Acquisition, LP (j)
 
Energy
 
L+3.25% (5.77%), 10/30/2024
 
4,406

 
4,396

 
4,147

 
0.3
%
Medical Depot Holdings, Inc. (c) (i)
 
Healthcare
 
L+5.50% (8.30%), 1/3/2023
 
19,264

 
18,084

 
17,492

 
1.2
%
MGTF Radio Company, LLC (c)
 
Media/Entertainment
 
P+3.50% (9.00%), 3/29/2020
 
37,956

 
37,956

 
37,576

 
2.5
%
Micross Solutions, LLC (c)
 
Software/Services
 
L+5.50% (8.27%), 8/7/2023
 
3,163

 
3,017

 
3,084

 
0.2
%
Midwest Can Company, LLC (c) (i)
 
Paper & Packaging
 
L+5.00% (7.56%), 4/11/2024
 
4,669

 
4,627

 
4,604

 
0.3
%
MLN US Holdco, LLC (a) (j)
 
Technology
 
L+4.50% (7.02%), 11/30/2025
 
13,455

 
13,414

 
13,009

 
0.9
%
MMM Holdings, LLC (c)
 
Healthcare
 
L+6.25% (8.68%), 3/15/2023
 
3,500

 
3,432

 
3,472

 
0.2
%

The accompanying notes are an integral part of these consolidated financial statements.
23
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

December 31, 2018
Portfolio Company (f) (q)
 
Industry
 
Investment Coupon Rate / Maturity (y)
 
Principal / Number of Shares
 
Amortized Cost
 
Fair Value
 
% of Net Assets (b)
MMM Holdings, LLC (c) (i)
 
Healthcare
 
L+6.25% (8.71%), 3/15/2023
 
$
20,449

 
$
20,106

 
$
20,288

 
1.4
%
Monitronics International, Inc. (j)
 
Business Services
 
L+5.50% (8.30%), 9/30/2022
 
10,072

 
10,095

 
8,901

 
0.6
%
Montreign Operating Company, LLC (j)
 
Gaming/Lodging
 
L+8.25% (10.96%), 1/24/2023
 
26,957

 
26,615

 
24,900

 
1.7
%
Mood Media Corp. (c) (i) (l)
 
Media/Entertainment
 
L+7.25% (10.05%), 6/28/2022
 
14,318

 
14,092

 
13,817

 
0.9
%
Murray Energy Holdings Co. (j)
 
Industrials
 
L+7.25% (9.78%), 10/17/2022
 
9,231

 
9,089

 
7,777

 
0.5
%
National Technical Systems, Inc. (c) (i)
 
Business Services
 
L+6.25% (8.60%), 6/12/2021
 
17,648

 
17,569

 
16,589

 
1.1
%
Navitas Midstream Midland Basin, LLC (c) (j)
 
Energy
 
L+4.50% (7.00%), 12/13/2024
 
13,462

 
13,436

 
13,387

 
0.9
%
New Star Metals, Inc. (c) (i)
 
Industrials
 
L+6.00% (8.80%), 7/9/2023
 
22,934

 
22,615

 
22,714

 
1.5
%
NexSteppe, Inc. (c) (l) (o) (t)
 
Chemicals
 
12.00%, 3/31/2019
 
2,010

 
1,750

 
—

 
—
%
NexSteppe, Inc. (c) (l) (o) (t)
 
Chemicals
 
12.00%, 3/31/2019
 
13,542

 
10,453

 
—

 
—
%
NTM Acquisition Corp. (c) (i)
 
Media/Entertainment
 
L+6.25% (8.96%), 6/7/2022
 
17,692

 
17,552

 
17,427

 
1.2
%
Office Depot, Inc. (a) (j)
 
Retail
 
L+5.25% (7.71%), 11/8/2022
 
5,860

 
5,768

 
5,894

 
0.4
%
ORG Chemical Holdings, LLC (c) (i)
 
Chemicals
 
L+5.75% (8.55%), 6/30/2022
 
27,543

 
27,158

 
26,741

 
1.8
%
ORG GC Holdings, LLC (c) (i)
 
Business Services
 
L+6.00% (8.80%), 7/31/2022
 
25,291

 
25,019

 
24,942

 
1.7
%
Passport Food Group, LLC (c)
 
Food & Beverage
 
L+9.00% (11.40%), 3/1/2022
 
4,470

 
2,905

 
2,682

 
0.2
%
Peabody Energy Corp
 
Industrials
 
6.38%, 3/31/2025
 
5,000

 
4,821

 
4,692

 
0.3
%
PeopLease Holdings, LLC (c) (i)
 
Business Services
 
L+9.00% (11.81%), 2/26/2021
 
20,000

 
19,913

 
17,500

 
1.2
%
PGX Holdings, Inc. (c) (j)
 
Consumer
 
L+5.25% (7.78%), 9/29/2020
 
12,183

 
12,154

 
11,940

 
0.8
%
Premier Dental Services, Inc. (i) (j)
 
Healthcare
 
L+5.25% (7.75%), 6/30/2023
 
32,686

 
32,480

 
30,725

 
2.1
%
Premier Global Services, Inc. (c) (j)
 
Telecom
 
L+6.25% (8.84%), 12/8/2021
 
8,843

 
8,640

 
7,511

 
0.5
%
Pride Plating, Inc. (c) (i)
 
Industrials
 
L+5.50% (8.02%), 6/13/2019
 
12,222

 
12,215

 
12,222

 
0.8
%
PSKW, LLC (c) (i)
 
Healthcare
 
L+4.25% (7.05%), 11/25/2021
 
1,392

 
1,385

 
1,392

 
0.1
%
PSKW, LLC (c)
 
Healthcare
 
L+8.25% (11.05%), 11/25/2021
 
17,750

 
17,578

 
17,750

 
1.2
%
PSKW, LLC (c)
 
Healthcare
 
L+8.25% (11.05%), 11/25/2021
 
1,972

 
1,944

 
1,972

 
0.1
%
PSKW, LLC (c)
 
Healthcare
 
L+8.25% (11.05%), 11/25/2021
 
1,930

 
1,914

 
1,930

 
0.1
%
PT Network, LLC (c)
 
Healthcare
 
P+4.50% (10.00%), 11/30/2021
 
658

 
658

 
609

 
0.0
%
PT Network, LLC (c) (i)
 
Healthcare
 
L+5.50% (7.93%), 11/30/2021
 
16,679

 
16,582

 
15,448

 
1.0
%
Questex, Inc. (c)
 
Media/Entertainment
 
L+6.25% (9.02%), 9/7/2024
 
431

 
431

 
423

 
0.0
%
Questex, Inc. (c) (i)
 
Media/Entertainment
 
L+6.25% (9.02%), 9/7/2024
 
16,151

 
15,845

 
15,858

 
1.1
%
Quorum Health Corporation (j)
 
Healthcare
 
L+6.75% (9.27%), 4/29/2022
 
5,212

 
5,282

 
5,149

 
0.4
%

The accompanying notes are an integral part of these consolidated financial statements.
24
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

December 31, 2018
Portfolio Company (f) (q)
 
Industry
 
Investment Coupon Rate / Maturity (y)
 
Principal / Number of Shares
 
Amortized Cost
 
Fair Value
 
% of Net Assets (b)
Regionalcare Hospital Partners Holdings, Inc. (a) (j)
 
Healthcare
 
L+4.50% (7.13%), 11/16/2025
 
$
20,000

 
$
19,618

 
$
18,925

 
1.3
%
Resco Products, Inc. (c)
 
Industrials
 
L+4.50% (7.02%), 3/7/2020
 
10,000

 
10,000

 
9,850

 
0.7
%
RR Donnelley & Sons Co (a) (j)
 
Publishing
 
L+5.00% (7.51%), 1/15/2024
 
10,000

 
9,925

 
9,775

 
0.7
%
Schenectady International Group, Inc. (j)
 
Chemicals
 
L+4.75% (7.19%), 10/15/2025
 
19,791

 
19,283

 
18,999

 
1.3
%
SCUF Gaming, Inc. (c)
 
Consumer
 
L+9.50% (12.01%), 12/1/2021
 
5,434

 
4,483

 
4,619

 
0.3
%
SCUF Gaming, Inc. (c)
 
Consumer
 
L+9.50% (12.01%), 3/1/2019
 
335

 
335

 
285

 
0.0
%
Skillsoft Corp. (j)
 
Technology
 
L+4.75% (7.27%), 4/28/2021
 
24,779

 
23,349

 
19,968

 
1.3
%
Squan Holding Corp. (c) (l)
 
Telecom
 
L+7.00% (9.40%), 10/10/2019
 
16,804

 
15,718

 
12,099

 
0.8
%
SSH Group Holdings, Inc. (j)
 
Education
 
L+4.25% (6.77%), 7/30/2025
 
6,043

 
6,029

 
5,786

 
0.4
%
Subsea Global Solutions, LLC (c)
 
Business Services
 
L+7.00% (9.78%), 3/28/2023
 
215

 
215

 
208

 
0.0
%
Subsea Global Solutions, LLC (c) (i)
 
Business Services
 
L+7.00% (9.80%), 3/28/2023
 
8,411

 
8,269

 
8,137

 
0.6
%
Sutherland Global
 
Business Services
 
L+5.38% (8.18%), 4/23/2021
 
488

 
460

 
458

 
0.0
%
Sutherland Global
 
Business Services
 
L+5.38% (8.18%), 4/23/2021
 
2,097

 
1,976

 
1,966

 
0.1
%
Tax Defense Network, LLC (c) (l) (p) (t)
 
Consumer
 
L+6.00% (10.00%), 4/30/2020
 
33,028

 
26,218

 
7,927

 
0.5
%
Tillamook Country Smoker, LLC (c)
 
Food & Beverage
 
L+5.75% (8.57%), 5/19/2022
 
3,235

 
3,235

 
3,154

 
0.2
%
Tillamook Country Smoker, LLC (c) (i)
 
Food & Beverage
 
L+5.75% (8.40%), 5/19/2022
 
10,193

 
10,089

 
9,942

 
0.7
%
Trademark Global, LLC (c)
 
Consumer
 
L+5.50% (8.02%), 10/1/2022
 
2,188

 
2,187

 
2,171

 
0.1
%
Transperfect Global, Inc. (c) (i)
 
Business Services
 
L+6.75% (9.25%), 5/7/2024
 
6,808

 
6,686

 
6,709

 
0.5
%
Traverse Midstream Partners, LLC (j)
 
Energy
 
L+4.00% (6.60%), 9/27/2024
 
6,352

 
6,326

 
6,082

 
0.4
%
Trilogy International Partners, LLC (a)
 
Telecom
 
8.88%, 5/1/2022
 
14,875

 
14,822

 
14,257

 
1.0
%
TwentyEighty, Inc. (c) (l) (p)
 
Business Services
 
8.00%, 3/31/2020
 
6,553

 
5,460

 
6,422

 
0.4
%
TwentyEighty, Inc. (c) (l) (p)
 
Business Services
 
L+8.00% (10.80%), 3/31/2020
 
304

 
274

 
300

 
0.0
%
TwentyEighty, Inc. (c) (l) (p)
 
Business Services
 
8.75%, 3/31/2020
 
6,283

 
5,289

 
6,158

 
0.4
%
US Salt, LLC (c)
 
Industrials
 
L+4.75% (7.27%), 12/1/2023
 
1,244

 
1,244

 
1,244

 
0.1
%
US Salt, LLC (c) (i)
 
Industrials
 
L+4.75% (7.27%), 12/1/2023
 
5,150

 
5,107

 
5,150

 
0.3
%
USF S&H Holdco, LLC (c)
 
Health/Fitness
 
L+5.75% (8.17%), 3/16/2023
 
485

 
485

 
478

 
0.0
%
USF S&H Holdco, LLC (c) (i)
 
Health/Fitness
 
L+5.75% (8.54%), 3/19/2024
 
24,245

 
23,929

 
23,896

 
1.6
%
Veritas US, Inc.
 
Technology
 
10.50%, 2/1/2024
 
7,289

 
7,144

 
4,701

 
0.3
%
Veritas US, Inc. (j)
 
Technology
 
L+4.50% (7.30%), 1/27/2023
 
7,550

 
7,568

 
6,412

 
0.4
%
Vertex Aerospace Services Corp. (i)
 
Industrials
 
L+4.75% (7.27%), 6/16/2025
 
8,815

 
8,774

 
8,705

 
0.6
%

The accompanying notes are an integral part of these consolidated financial statements.
25
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

December 31, 2018
Portfolio Company (f) (q)
 
Industry
 
Investment Coupon Rate / Maturity (y)
 
Principal / Number of Shares
 
Amortized Cost
 
Fair Value
 
% of Net Assets (b)
Von Drehle Corp. (c) (i) (l)
 
Paper & Packaging
 
L+11.50% (14.30%), 3/6/2023
 
$
26,176

 
$
25,855

 
$
23,373

 
1.6
%
Vyaire Medical, Inc. (c) (j)
 
Healthcare
 
L+4.75% (7.14%), 4/16/2025
 
8,940

 
8,616

 
8,270

 
0.6
%
WMK, LLC (c) (i)
 
Business Services
 
L+5.75% (8.29%), 9/5/2025
 
20,609

 
20,216

 
20,210

 
1.4
%
Xplornet Communications, Inc. (a) (j)
 
Telecom
 
L+4.00% (6.80%), 9/9/2021
 
12,996

 
12,939

 
12,833

 
0.9
%
YummyEarth, Inc. (c)
 
Food & Beverage
 
L+8.50% (11.31%), 8/1/2023
 
2,626

 
1,917

 
2,626

 
0.2
%
YummyEarth, Inc. (c)
 
Food & Beverage
 
L+8.50% (11.31%), 8/1/2023
 
4,150

 
3,029

 
2,075

 
0.1
%
Sub Total Senior Secured First Lien Debt
 
 
 
 
 
 
 
$
1,712,904

 
$
1,594,063

 
106.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior Secured Second Lien Debt - 18.5% (b)
 
 
 
 
 
 
 
 
 
 
 
 
Anchor Glass Container Corp. (c)
 
Paper & Packaging
 
L+7.75% (10.22%), 12/7/2024
 
$
20,000

 
$
19,845

 
$
11,600

 
0.8
%
Astro AB Merger Sub, Inc. (a) (c)
 
Financials
 
L+7.50% (10.03%), 4/30/2023
 
7,758

 
7,758

 
7,758

 
0.5
%
Avatar Purchaser, Inc. (c) (j)
 
Software/Services
 
L+7.50% (10.16%), 11/17/2025
 
11,716

 
11,414

 
11,229

 
0.8
%
Aveanna Healthcare, LLC (c) (j)
 
Healthcare
 
L+8.00% (10.52%), 3/17/2025
 
15,000

 
14,824

 
14,321

 
1.0
%
Baker Hill Acquisition, LLC (c)
 
Financials
 
L+11.00% (13.40%), 3/1/2021
 
3,017

 
1,508

 
1,500

 
0.1
%
Baker Hill Acquisition, LLC (c)
 
Financials
 
L+11.00% (13.40%), 3/1/2021
 
447

 
391

 
447

 
0.0
%
Boston Market Corp. (c)
 
Food & Beverage
 
L+8.25% (10.96%), 1/16/2021
 
23,851

 
23,828

 
19,916

 
1.3
%
BrandMuscle Holdings Inc. (c)
 
Business Services
 
L+8.50% (10.90%), 6/1/2022
 
24,500

 
24,241

 
24,010

 
1.6
%
Cafe Enterprises, Inc. (c) (t)
 
Food & Beverage
 
14.00%, 3/31/2019
 
475

 
—

 
—

 
—
%
Carlisle FoodService Products, Inc. (c)
 
Consumer
 
L+7.75% (10.26%), 3/20/2026
 
10,719

 
10,526

 
10,515

 
0.7
%
CDS U.S. Intermediate Holdings, Inc. (a) (c)
 
Media/Entertainment
 
L+8.25% (11.05%), 7/8/2023
 
7,927

 
7,830

 
6,983

 
0.5
%
Constellis Holdings, LLC (c)
 
Business Services
 
L+9.00% (11.52%), 4/21/2025
 
1,117

 
1,117

 
1,061

 
0.1
%
Dentalcorp Perfect Smile, ULC (a) (c)
 
Healthcare
 
L+7.50% (10.02%), 6/1/2026
 
8,111

 
8,035

 
8,030

 
0.5
%
Dentalcorp Perfect Smile, ULC (a) (c)
 
Healthcare
 
L+7.50% (10.02%), 6/1/2026
 
1,156

 
1,145

 
1,144

 
0.1
%
Dimora Brands, Inc. (c)
 
Consumer
 
L+8.50% (11.02%), 8/25/2025
 
4,470

 
4,469

 
4,470

 
0.3
%
Edelman Financial Services, LLC (a) (j)
 
Financials
 
L+6.75% (9.19%), 7/20/2026
 
6,764

 
6,732

 
6,426

 
0.4
%
Frank Entertainment Group, LLC (c) (p) (t)
 
Media/Entertainment
 
10.00%, 6/30/2019
 
724

 
—

 
—

 
—
%
Hyland Software, Inc.
 
Technology
 
L+7.00% (9.52%), 7/7/2025
 
5,837

 
5,874

 
5,728

 
0.4
%
ICP Industrial, Inc. (c)
 
Chemicals
 
L+8.25% (10.68%), 5/3/2024
 
5,588

 
5,587

 
5,504

 
0.4
%
IDERA, Inc. (c)
 
Technology
 
L+4.50% (7.03%), 6/1/2025
 
1,788

 
1,788

 
1,788

 
0.1
%
KidKraft, Inc. (c) (l)
 
Consumer
 
12.00%, 3/30/2022
 
6,309

 
6,228

 
6,215

 
0.4
%
MLN US Holdco, LLC (a)
 
Technology
 
L+8.75% (11.27%), 11/30/2026
 
3,000

 
2,941

 
2,918

 
0.2
%

The accompanying notes are an integral part of these consolidated financial statements.
26
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

December 31, 2018
Portfolio Company (f) (q)
 
Industry
 
Investment Coupon Rate / Maturity (y)
 
Principal / Number of Shares
 
Amortized Cost
 
Fair Value
 
% of Net Assets (b)
Navicure, Inc. (c)
 
Healthcare
 
L+7.50% (10.02%), 10/31/2025
 
$
1,341

 
$
1,341

 
$
1,321

 
0.1
%
Northstar Financial Services Group, LLC (c)
 
Financials
 
L+7.50% (10.12%), 5/25/2026
 
3,381

 
3,365

 
3,381

 
0.2
%
Oxbow Carbon LLC (c)
 
Industrials
 
L+7.50% (10.02%), 1/4/2024
 
1,395

 
1,430

 
1,409

 
0.1
%
PetVet Care Centers, LLC (c)
 
Healthcare
 
L+6.25% (8.75%), 2/13/2026
 
3,539

 
3,523

 
3,449

 
0.2
%
PI US Holdco III, Ltd. (a) (c)
 
Financials
 
L+7.25% (9.77%), 12/20/2025
 
6,696

 
6,637

 
6,661

 
0.5
%
ProAmpac, LLC (c)
 
Paper & Packaging
 
L+8.50% (11.14%), 11/18/2024
 
3,352

 
3,351

 
3,352

 
0.2
%
Recess Holdings, Inc. (c)
 
Industrials
 
L+7.75% (10.55%), 9/29/2025
 
15,008

 
14,812

 
14,783

 
1.0
%
Renaissance Holding Corp. (j)
 
Software/Services
 
L+7.00% (9.50%), 5/29/2026
 
8,456

 
8,298

 
7,751

 
0.5
%
River Cree Enterprises, LP (a) (c) (z)
 
Gaming/Lodging
 
10.00%, 5/17/2025
 
21,275

 
16,399

 
15,367

 
1.0
%
SCA Pharmaceuticals, LLC (c)
 
Healthcare
 
L+9.00% (11.80%), 12/16/2020
 
2,235

 
2,152

 
2,051

 
0.1
%
SSH Group Holdings, Inc. (c) (j)
 
Education
 
L+8.25% (10.77%), 7/30/2026
 
10,122

 
10,026

 
10,021

 
0.7
%
St. Croix Hospice Acquisition Corp. (c)
 
Healthcare
 
L+8.75% (11.27%), 3/1/2024
 
2,056

 
1,965

 
2,056

 
0.1
%
TierPoint, LLC (c)
 
Business Services
 
L+7.25% (9.77%), 5/5/2025
 
5,334

 
5,292

 
5,227

 
0.4
%
Travelpro Products, Inc. (a) (c) (l)
 
Consumer
 
13.00%, 11/1/2022
 
2,357

 
2,356

 
2,357

 
0.2
%
Travelpro Products, Inc. (a) (c) (l) (z)
 
Consumer
 
13.00%, 11/1/2022
 
CAD
2,731

 
2,088

 
2,003

 
0.1
%
U.S. Auto (c)
 
Financials
 
L+10.50% (12.85%), 6/8/2020
 
30,000

 
29,849

 
29,850

 
2.0
%
US Salt, LLC (c)
 
Industrials
 
L+8.75% (11.14%), 12/1/2024
 
12,872

 
12,709

 
12,872

 
0.9
%
Sub Total Senior Secured Second Lien Debt
 
 
 
 
 
 
 
$
291,674

 
$
275,474

 
18.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Subordinated Debt - 9.3% (b)
 
 
 
 
 
 
 
 
 
 
 
 
AHP Health Partners, Inc.
 
Healthcare
 
9.75%, 7/15/2026
 
$
6,589

 
$
6,503

 
$
6,725

 
0.4
%
BMC Software Finance, Inc.
 
Technology
 
9.75%, 9/1/2026
 
5,000

 
4,691

 
4,575

 
0.3
%
Cafe Enterprises, Inc. (c) (t)
 
Food & Beverage
 
14.00%, 9/30/2019
 
3,681

 
—

 
—

 
—
%
Capital Contractors, Inc. (c) (t)
 
Business Services
 
16.00%, 6/30/2020
 
2,200

 
—

 
—

 
—
%
Captek Softgel International, Inc. (c) (l)
 
Health/Fitness
 
11.50%, 1/1/2023
 
6,992

 
6,991

 
6,625

 
0.4
%
Community Intervention Services, Inc. (c) (l) (t)
 
Healthcare
 
13.00%, 1/31/2021
 
5,335

 
—

 
—

 
—
%
Del Real, LLC (c)
 
Food & Beverage
 
11.00%, 4/1/2023
 
3,129

 
2,958

 
2,926

 
0.2
%
Dyno Acquiror, Inc. (c) (l)
 
Consumer
 
12.00%, 2/1/2020
 
1,058

 
1,058

 
1,058

 
0.1
%
Frontier Communications Corp. (a)
 
Telecom
 
8.50%, 4/15/2020
 
10,000

 
9,490

 
8,888

 
0.6
%
Frontstreet Facility Solutions, Inc. (c) (p)
 
Business Services
 
13.00%, 3/1/2021
 
1,891

 
227

 
189

 
0.0
%
HC2 Holdings, Inc.
 
Industrials
 
11.50%, 12/1/2021
 
10,796

 
10,666

 
10,067

 
0.7
%
HemaSource, Inc. (c) (ac)
 
Healthcare
 
11.00%, 1/1/2024
 
2,235

 
2,131

 
2,168

 
0.1
%
HTC Borrower, LLC (c) (l)
 
Consumer
 
13.00%, 9/1/2020
 
5,633

 
5,409

 
5,604

 
0.4
%
Iridium Communications, Inc.
 
Telecom
 
10.25%, 4/15/2023
 
3,536

 
3,536

 
3,753

 
0.3
%
MGTF Radio Company, LLC (c) (l) (t)
 
Media/Entertainment
 
16.00%, 3/30/2020
 
24,490

 
24,309

 
20,082

 
1.3
%

The accompanying notes are an integral part of these consolidated financial statements.
27
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

December 31, 2018
Portfolio Company (f) (q)
 
Industry
 
Investment Coupon Rate / Maturity (y)
 
Principal / Number of Shares
 
Amortized Cost
 
Fair Value
 
% of Net Assets (b)
Park Ave RE Holdings, LLC (c) (d) (l) (o)
 
Financials
 
13.00%, 12/31/2021
 
$
37,192

 
$
37,192

 
$
37,192

 
2.5
%
PCX Aerostructures, LLC (c) (l)
 
Industrials
 
6.00%, 8/9/2021
 
7,414

 
5,601

 
5,560

 
0.4
%
RMP Group, Inc. (c) (l)
 
Financials
 
11.50%, 9/1/2022
 
2,277

 
2,195

 
2,254

 
0.2
%
Trademark Global, LLC (c)
 
Consumer
 
11.25%, 4/1/2023
 
3,308

 
3,310

 
3,241

 
0.2
%
Vantage Mobility International, LLC (c)
 
Transportation
 
L+7.75% (10.28%), 9/1/2021
 
6,863

 
5,853

 
5,696

 
0.4
%
Xplornet Communications, Inc. (a) (l)
 
Telecom
 
9.63%, 6/1/2022
 
11,683

 
11,683

 
11,566

 
0.8
%
Sub Total Subordinated Debt
 
 
 
 
 
 
 
$
143,803

 
$
138,169

 
9.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Collateralized Securities - 8.5% (b)
 
 
 
 
 
 
 
 
 
 
 
 
Collateralized Securities - Debt Investment
 
 
 
 
 
 
 
 
 
 
 
 
Figueroa - Class F Notes (a) (c) (p)
 
Diversified Investment Vehicles
 
12.79%, 1/15/2027
 
$
8,000

 
$
8,000

 
$
7,508

 
0.5
%
NewStar Arlington Senior Loan Program, LLC 14-1A FR (a) (c) (p)
 
Diversified Investment Vehicles
 
13.77%, 4/25/2031
 
4,750

 
4,532

 
4,425

 
0.3
%
Newstar Fairfield Fund CLO, Ltd. 2015-1RA F (a) (c) (p)
 
Diversified Investment Vehicles
 
10.26%, 1/20/2027
 
10,728

 
9,424

 
8,580

 
0.6
%
Whitehorse, Ltd. 2014-1A E (a) (c) (p)
 
Diversified Investment Vehicles
 
7.29%, 5/1/2026
 
8,000

 
7,673

 
7,269

 
0.5
%
Collateralized Securities - Equity Investment (n)
 
 
 
 
 
 
 
 
 
 
 
 
B&M CLO, Ltd. 2014-1A SUB (a) (c) (p) (v)
 
Diversified Investment Vehicles
 
0.00%, 4/16/2026
 
$
40,250

 
$
10,524

 
$
6,029

 
0.4
%
CVP Cascade CLO, Ltd. 2013-CLO1 Side Letter (a) (c) (p) (s)
 
Diversified Investment Vehicles
 
 
 
3,243

 
535

 
68

 
0.0
%
CVP Cascade CLO, Ltd. 2013-CLO1 SUB (a) (c) (p) (v)
 
Diversified Investment Vehicles
 
0.00%, 1/16/2026
 
31,000

 
974

 
1,166

 
0.1
%
CVP Cascade CLO, Ltd. 2014-2A Side Letter (a) (c) (p) (s)
 
Diversified Investment Vehicles
 
 
 
3,755

 
1,022

 
274

 
0.0
%
Figueroa CLO, Ltd. 2014-1A Side Letter (a) (c) (p) (s)
 
Diversified Investment Vehicles
 
 
 
2,986

 
1,244

 
483

 
0.1
%
Figueroa CLO, Ltd. 2014-1A SUB (a) (c) (p) (v)
 
Diversified Investment Vehicles
 
0.00%, 1/15/2027
 
35,057

 
11,568

 
7,468

 
0.5
%
MidOcean Credit CLO 2013-2A INC (a) (c) (p) (v)
 
Diversified Investment Vehicles
 
12.07%, 1/29/2025
 
37,600

 
20,445

 
16,534

 
1.1
%
MidOcean Credit CLO 2014-3A SUB (a) (c) (p) (v)
 
Diversified Investment Vehicles
 
14.97%, 7/21/2026
 
43,300

 
16,915

 
14,651

 
1.0
%
MidOcean Credit CLO 2015-4A INC (a) (c) (p) (v)
 
Diversified Investment Vehicles
 
0.00%, 4/15/2027
 
21,500

 
12,105

 
8,595

 
0.6
%
NewStar Arlington Senior Loan Program, LLC 14-1A SUB (a) (c) (p) (v)
 
Diversified Investment Vehicles
 
17.51%, 7/25/2025
 
31,603

 
19,799

 
24,788

 
1.6
%
Newstar Fairfield Fund CLO, Ltd. 2015-1RA SUB (a) (c) (p) (v)
 
Diversified Investment Vehicles
 
12.31%, 1/19/2027
 
31,575

 
10,329

 
11,895

 
0.8
%
OFSI Fund, Ltd. 2014-6A Side Letter (a) (c) (p) (s)
 
Diversified Investment Vehicles
 
 
 
1,970

 
501

 
199

 
0.0
%
OFSI Fund, Ltd. 2014-6A SUB (a) (c) (p) (v)
 
Diversified Investment Vehicles
 
0.00%, 3/20/2025
 
38,000

 
10,003

 
3,008

 
0.2
%
Whitehorse, Ltd. 2014-1A Side Letter (a) (c) (p) (s)
 
Diversified Investment Vehicles
 
 
 
1,886

 
477

 
297

 
0.0
%
Whitehorse, Ltd. 2014-1A SUB (a) (c) (p) (v)
 
Diversified Investment Vehicles
 
0.00%, 5/1/2026
 
36,000

 
8,860

 
3,975

 
0.2
%
Sub Total Collateralized Securities
 
 
 
 
 
 
 
$
154,930

 
$
127,212

 
8.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity/Other - 13.3% (b) (ad)
 
 
 
 
 
 
 
 
 
 
 
 

The accompanying notes are an integral part of these consolidated financial statements.
28
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

December 31, 2018
Portfolio Company (f) (q)
 
Industry
 
Investment Coupon Rate / Maturity (y)
 
Principal / Number of Shares
 
Amortized Cost
 
Fair Value
 
% of Net Assets (b)
Aden & Anais Holdings, Inc. (c) (e) (ac)
 
Retail
 
 
 
4,470

 
$
—

 
$
—

 
—
%
Answers Corp. (c) (p)
 
Media/Entertainment
 
 
 
908,911

 
11,361

 
1,909

 
0.1
%
Avaya Holdings Corp. (a) (e) (aa)
 
Technology
 
 
 
207,310

 
3,292

 
3,018

 
0.2
%
Baker Hill Acquisition, LLC (c) (e)
 
Financials
 
 
 
22,653

 
—

 
—

 
—
%
Cafe Enterprises, Inc. (c) (e)
 
Food & Beverage
 
 
 
2,235

 
—

 
—

 
—
%
Capital Contractors, Inc. (c) (e)
 
Business Services
 
 
 
45

 
—

 
—

 
—
%
Capital Contractors, Inc. (c) (e)
 
Business Services
 
 
 
4,470

 
—

 
—

 
—
%
Capstone Nutrition Class B and C Common Stock (fka Integrity Nutraceuticals) (c) (e) (o) (u)
 
Consumer
 
 
 
24,656

 
—

 
—

 
—
%
Capstone Nutrition Common Stock (fka Integrity Nutraceuticals) (c) (e) (o) (u)
 
Consumer
 
 
 
6,023

 
1,630

 
—

 
—
%
Captek Softgel International, Inc. (c) (e) (ac)
 
Health/Fitness
 
 
 
8,498

 
942

 
712

 
0.1
%
Centerfield Media Holdings, LLC (c) (e)
 
Media/Entertainment
 
 
 
112

 
245

 
263

 
0.0
%
CRD Holdings, LLC (a) (c) (o) (u)
 
Energy
 
9.00%
 
38,858,603

 
28,402

 
28,973

 
2.0
%
CRS-SPV, Inc. (c) (e) (o)
 
Industrials
 
 
 
246

 
2,219

 
2,221

 
0.2
%
CWS Holding Company, LLC (c) (e)
 
Consumer
 
 
 
335,255

 
—

 
—

 
—
%
Danish CRJ, Ltd. (a) (c) (e) (p) (r)
 
Transportation
 
 
 
5,002

 
—

 
—

 
—
%
Data Source Holdings, LLC (c) (e)
 
Business Services
 
 
 
10,617

 
140

 
124

 
0.0
%
Del Real, LLC (c) (e) (u)
 
Food & Beverage
 
 
 
670,510

 
382

 
297

 
0.0
%
Dyno Acquiror, Inc. (c) (e)
 
Consumer
 
 
 
134,102

 
58

 
64

 
0.0
%
Frank Entertainment Group, LLC (c) (e) (p) (u)
 
Media/Entertainment
 
 
 
135,566

 
—

 
—

 
—
%
Frank Entertainment Group, LLC (c) (e) (p) (u)
 
Media/Entertainment
 
 
 
625,810

 
—

 
—

 
—
%
Frank Entertainment Group, LLC (c) (e) (p) (u)
 
Media/Entertainment
 
 
 
625,810

 
—

 
—

 
—
%
Frontstreet Facility Solutions, Inc. (c) (e) (p)
 
Business Services
 
 
 
24,114

 
—

 
—

 
—
%
HemaSource, Inc. (c) (e) (ac)
 
Healthcare
 
 
 
223,503

 
168

 
185

 
0.0
%
ICP Industrial, Inc. (c) (e)
 
Chemicals
 
 
 
288

 
279

 
301

 
0.0
%
Integrated Efficiency Solutions, Inc. (c) (e)
 
Industrials
 
 
 
53,215

 
56

 
67

 
0.0
%
Integrated Efficiency Solutions, Inc. (c) (e)
 
Industrials
 
 
 
2,975

 
3

 
3

 
0.0
%
Kahala Ireland OpCo Designated Activity Company (a) (c) (e) (h) (o)
 
Transportation
 
 
 
—

 
—

 
20,329

 
1.4
%
Kahala Ireland OpCo Designated Activity Company (a) (c) (e) (h) (o)
 
Transportation
 
 
 
3,250,000

 
2,831

 
3,250

 
0.2
%
Kahala US OpCo, LLC (a) (c) (e) (k) (o)
 
Transportation
 
13.00%
 
4,413,472

 
—

 
—

 
—
%
K-Square Restaurant Partners, LP (c) (e) (ac)
 
Food & Beverage
 
 
 
447

 
175

 
16

 
0.0
%
Lakeview Health Holdings, Inc. (c) (e)
 
Healthcare
 
 
 
447

 
—

 
—

 
—
%
MIC Holding, LLC (c) (e)
 
Consumer
 
 
 
1,470

 
3,686

 
3,947

 
0.3
%
MIC Holding, LLC (c) (e)
 
Consumer
 
 
 
30,000

 
4,916

 
4,798

 
0.3
%
Micross Solutions, LLC (c) (e)
 
Software/Services
 
 
 
442,430

 
223

 
310

 
0.0
%
Mood Media Corp. (c) (e)
 
Media/Entertainment
 
 
 
121,021

 
27

 
11

 
0.0
%

The accompanying notes are an integral part of these consolidated financial statements.
29
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

December 31, 2018
Portfolio Company (f) (q)
 
Industry
 
Investment Coupon Rate / Maturity (y)
 
Principal / Number of Shares
 
Amortized Cost
 
Fair Value
 
% of Net Assets (b)
Motor Vehicle Software Corp. (c) (e) (ab)
 
Business Services
 
 
 
223,503

 
$
318

 
$
260

 
0.0
%
New Star Metals, Inc. (c) (e)
 
Industrials
 
Expire 12/22/2036
 
100,216

 
151

 
702

 
0.0
%
NexSteppe, Inc. (c) (e) (o)
 
Chemicals
 
 
 
237,240

 
737

 
—

 
—
%
NMFC Senior Loan Program I, LLC (a) (o)
 
Diversified Investment Vehicles
 
 
 
50,000

 
50,000

 
50,573

 
3.4
%
Nomacorc, LLC (c) (e) (u) (ab)
 
Industrials
 
 
 
356,816

 
56

 
68

 
0.0
%
Park Ave RE Holdings, LLC (c) (e) (o) (w)
 
Financials
 
 
 
1,000

 
102

 
15,578

 
1.0
%
Park Ave RE Holdings, LLC (c) (e) (o) (w)
 
Financials
 
8.00%
 
47,290

 
23,645

 
23,645

 
1.6
%
Passport Food Group, LLC (c) (e) (ac)
 
Food & Beverage
 
 
 
4,470

 
—

 
—

 
—
%
PCX Aerostructures, LLC (c) (e)
 
Industrials
 
 
 
27,250

 
—

 
—

 
—
%
PCX Aerostructures, LLC (c) (e)
 
Industrials
 
 
 
1,356

 
—

 
—

 
—
%
PCX Aerostructures, LLC (c) (e)
 
Industrials
 
 
 
315

 
—

 
—

 
—
%
PennantPark Credit Opportunities Fund II, LP (a) (g) (p)
 
Diversified Investment Vehicles
 
 
 
8,436

 
8,436

 
8,705

 
0.6
%
RMP Group, Inc. (c) (e) (u)
 
Financials
 
 
 
223

 
164

 
191

 
0.0
%
RockYou, Inc. (c) (e)
 
Media/Entertainment
 
 
 
15,105

 
—

 
—

 
—
%
Schweiger Dermatology Group, LLC (c) (e) (u)
 
Healthcare
 
 
 
265,024

 
—

 
—

 
—
%
SCUF Gaming, Inc. (c) (e)
 
Consumer
 
 
 
6,060

 
21

 
49

 
0.0
%
Smile Brands, Inc. (c) (e)
 
Healthcare
 
 
 
669

 
747

 
658

 
0.0
%
Squan Holding Corp. (c) (e)
 
Telecom
 
 
 
180,835

 
—

 
—

 
—
%
Squan Holding Corp. (c) (e)
 
Telecom
 
 
 
8,962

 
—

 
—

 
—
%
St. Croix Hospice Acquisition Corp. (c) (e)
 
Healthcare
 
 
 
112

 
—

 
—

 
—
%
St. Croix Hospice Acquisition Corp. (c) (e)
 
Healthcare
 
 
 
112

 
64

 
100

 
0.0
%
SYNACOR, Inc. (e) (aa)
 
Technology
 
 
 
59,785

 
—

 
88

 
0.0
%
Tax Advisors Group, LLC (c) (e) (u)
 
Financials
 
 
 
86

 
609

 
638

 
0.0
%
Tax Defense Network, LLC (c) (e) (p)
 
Consumer
 
 
 
351,944

 
—

 
—

 
—
%
Tax Defense Network, LLC (c) (e) (p)
 
Consumer
 
 
 
147,099

 
425

 
—

 
—
%
TCG BDC, Inc. - Common Stock (fka Carlyle GMS Finance, Inc.) (a)
 
Financials
 
 
 
226

 
4,336

 
2,733

 
0.2
%
Team Waste, LLC (c) (e) (p) (u)
 
Industrials
 
 
 
111,752

 
2,235

 
2,235

 
0.2
%
Tennenbaum Waterman Fund, LP (a) (c) (p)
 
Diversified Investment Vehicles
 
 
 
10,000

 
10,000

 
10,137

 
0.7
%
THL Credit Greenway Fund II, LLC (a) (p)
 
Diversified Investment Vehicles
 
 
 
8,339

 
8,339

 
7,435

 
0.5
%
Travelpro Products, Inc. (a)
 
Consumer
 
 
 
447,007

 
506

 
541

 
0.0
%
TwentyEighty, Inc. (c) (p)
 
Business Services
 
 
 
54,586

 
—

 
—

 
—
%
TZ Holdings, Inc. - Preferred Shares (fka Zimbra, Inc.) (c) (e)
 
Technology
 
Expire 10/25/2023
 
1,000,000

 
10

 
179

 
0.0
%
United Biologics, LLC (c) (e) (u)
 
Healthcare
 
 
 
39,769

 
132

 
18

 
0.0
%
United Biologics, LLC (c) (e) (u)
 
Healthcare
 
 
 
3,155

 
—

 
—

 
—
%
United Biologics, LLC (c) (e) (u)
 
Healthcare
 
 
 
4,206

 
31

 
15

 
0.0
%
United Biologics, LLC (c) (e) (u)
 
Healthcare
 
 
 
99,236

 
—

 
—

 
—
%
United Biologics, LLC (c) (e) (u)
 
Healthcare
 
 
 
223

 
35

 
9

 
0.0
%
USASF Holdco, LLC (c) (e) (u)
 
Financials
 
 
 
10,000

 
10

 
—

 
—
%

The accompanying notes are an integral part of these consolidated financial statements.
30
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

December 31, 2018
Portfolio Company (f) (q)
 
Industry
 
Investment Coupon Rate / Maturity (y)
 
Principal / Number of Shares
 
Amortized Cost
 
Fair Value
 
% of Net Assets (b)
USASF Holdco, LLC (c) (e) (u)
 
Financials
 
 
 
490

 
$
490

 
$
571

 
0.0
%
USASF Holdco, LLC (c) (e) (u)
 
Financials
 
 
 
56

 
56

 
111

 
0.0
%
Vantage Mobility International, LLC (c) (e)
 
Transportation
 
 
 
391,131

 
—

 
—

 
—
%
Women's Marketing, Inc. (c) (e)
 
Media/Entertainment
 
 
 
3,643

 
—

 
—

 
—
%
Women's Marketing, Inc. (c) (e)
 
Media/Entertainment
 
 
 
2,235

 
—

 
—

 
—
%
World Business Lenders, LLC (c) (e) (p)
 
Financials
 
 
 
922,669

 
3,750

 
3,759

 
0.3
%
WSO Holdings, LP (c) (e)
 
Food & Beverage
 
 
 
698

 
279

 
—

 
—
%
Wythe Will Tzetzo, LLC (c) (e) (u)
 
Food & Beverage
 
 
 
22,312

 
302

 
—

 
—
%
YummyEarth, Inc. (c) (e)
 
Food & Beverage
 
 
 
223

 
—

 
—

 
—
%
Sub Total Equity/Other
 
 
 
 
 
 
 
$
177,021

 
$
199,796

 
13.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
TOTAL INVESTMENTS - 156.4% (b)
 
 
 
 
 
 
 
$
2,480,332

 
$
2,334,714

 
156.4
%
Forward foreign currency contracts:
Counterparty
 
Contract to Deliver
 
In Exchange For
 
Maturity Date
 
Unrealized Appreciation/(Depreciation)
Goldman Sachs International
 
CAD 21,275
 
$
16,597

 
1/7/2019
 
$
993

_____________
(a)
All of the Company's investments, except the investments noted by this footnote, are qualifying assets under Section 55(a) of the Investment Company Act of 1940, as amended (the "1940 Act"). Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. Qualifying assets represent 71.9% of the Company's total assets. The significant majority of all investments held are deemed to be illiquid.
(b)
Percentages are based on net assets of $1,492,719 as of December 31, 2018.
(c)
The fair value of investments with respect to securities for which market quotations are not readily available is determined in good faith by the Company's board of directors as required by the 1940 Act. Such investments are valued using significant unobservable inputs (See Note 3 to the consolidated financial statements).
(d)
As of the date of election, the portfolio company elected to pay cash interest, noting the company has the option to elect a portion of the interest to be payment-in-kind (“PIK”).
(e)
Non-income producing at December 31, 2018.
(f)
The Company has various unfunded commitments to portfolio companies. Please refer to Note 7 - Commitments and Contingencies for details of these unfunded commitments.
(g)
The investment is subject to a three year lock-up restriction on withdrawals. The lock-up expires on March 31, 2019.
(h)
The Company's investment is held through the consolidated subsidiaries, Kahala Aviation Holdings, LLC and Kahala LuxCo, which own 100% of the equity of the operating company, Kahala Ireland OpCo Designated Activity Company.
(i)
The Company's investment or a portion thereof is pledged as collateral under the Wells Fargo Credit Facility. Individual investments can be divided into parts which are pledged to separate credit facilities.
(j)
The Company's investment or a portion thereof is pledged as collateral under the Citi Credit Facility. Individual investments can be divided into parts which are pledged to separate credit facilities.
(k)
The Company's investment is held through the consolidated subsidiaries, Kahala Aviation Holdings, LLC and Kahala Aviation US, Inc. which own 100% of the equity of the operating company, Kahala US OpCo LLC.

The accompanying notes are an integral part of these consolidated financial statements.
31
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

(l)
For the year ended December 31, 2018, the following investments paid or have the option to pay all or a portion of interest and dividends via payment-in-kind (“PIK”):
December 31, 2018
Portfolio Company
 
Investment Type
 
Cash
 
PIK
 
All-in Rate
 
PIK Earned for the year ended December 31, 2018
Capstone Nutrition (fka Integrity Nutraceuticals)
 
Senior Secured First Lien Debt
 
—
%
 
15.03
%
 
15.03
%
 
$
—

Capstone Nutrition (fka Integrity Nutraceuticals)
 
Senior Secured First Lien Debt
 
—
%
 
15.03
%
 
15.03
%
 
—

Capstone Nutrition (fka Integrity Nutraceuticals)
 
Senior Secured First Lien Debt
 
—
%
 
15.03
%
 
15.03
%
 
—

DLC Acquisition, LLC
 
Senior Secured First Lien Debt
 
10.00
%
 
2.00
%
 
12.00
%
 
29

Greenwave Holdings, Inc. (s)
 
Senior Secured First Lien Debt
 
10.00
%
 
3.00
%
 
13.00
%
 
271

Integral Ad Science, Inc.
 
Senior Secured First Lien Debt
 
7.28
%
 
1.25
%
 
8.53
%
 
81

Integrated Efficiency Solutions, Inc.
 
Senior Secured First Lien Debt
 
12.05
%
 
—
%
 
12.05
%
 
—

Kahala Ireland OpCo Designated Activity Company
 
Senior Secured First Lien Debt
 
13.00
%
 
—
%
 
13.00
%
 
—

LightSquared, LP
 
Senior Secured First Lien Debt
 
—
%
 
11.52
%
 
11.52
%
 
1,291

Mood Media Corp.
 
Senior Secured First Lien Debt
 
10.05
%
 
—
%
 
10.05
%
 
103

NexSteppe, Inc.
 
Senior Secured First Lien Debt
 
—
%
 
12.00
%
 
12.00
%
 
—

NexSteppe, Inc.
 
Senior Secured First Lien Debt
 
—
%
 
12.00
%
 
12.00
%
 
—

Pure Barre, LLC (s)
 
Senior Secured First Lien Debt
 
—
%
 
9.08
%
 
9.08
%
 
162

Pure Barre, LLC (s)
 
Senior Secured First Lien Debt
 
7.99
%
 
1.25
%
 
9.24
%
 
3

Squan Holding Corp.
 
Senior Secured First Lien Debt
 
8.40
%
 
1.00
%
 
9.40
%
 
163

Tax Defense Network, LLC
 
Senior Secured First Lien Debt
 
—
%
 
10.00
%
 
10.00
%
 
—

TwentyEighty, Inc.
 
Senior Secured First Lien Debt
 
10.80
%
 
—
%
 
10.80
%
 
12

TwentyEighty, Inc.
 
Senior Secured First Lien Debt
 
4.00
%
 
4.00
%
 
8.00
%
 
262

TwentyEighty, Inc.
 
Senior Secured First Lien Debt
 
—
%
 
8.75
%
 
8.75
%
 
531

United Central Industrial Supply Company, LLC (s)
 
Senior Secured First Lien Debt
 
9.35
%
 
—
%
 
9.35
%
 
85

Von Drehle Corp.
 
Senior Secured First Lien Debt
 
14.03
%
 
—
%
 
14.03
%
 
131

KidKraft, Inc.
 
Senior Secured Second Lien Debt
 
11.00
%
 
1.00
%
 
12.00
%
 
26

Travelpro Products, Inc.
 
Senior Secured Second Lien Debt
 
11.00
%
 
2.00
%
 
13.00
%
 
7

Travelpro Products, Inc.
 
Senior Secured Second Lien Debt
 
11.00
%
 
2.00
%
 
13.00
%
 
20

Captek Softgel International, Inc.
 
Subordinated Debt
 
10.00
%
 
1.50
%
 
11.50
%
 
45

Community Intervention Services, Inc.
 
Subordinated Debt
 
—
%
 
13.00
%
 
13.00
%
 
—

Dyno Acquiror, Inc.
 
Subordinated Debt
 
10.50
%
 
1.50
%
 
12.00
%
 
7

Frozen Specialties, Inc. (s)
 
Subordinated Debt
 
10.00
%
 
4.00
%
 
14.00
%
 
22

HTC Borrower, LLC
 
Subordinated Debt
 
10.00
%
 
3.00
%
 
13.00
%
 
71

Orchid Underwriters Agency, LLC (s)
 
Subordinated Debt
 
—
%
 
11.50
%
 
11.50
%
 
1

Orchid Underwriters Agency, LLC (s)
 
Subordinated Debt
 
—
%
 
13.50
%
 
13.50
%
 
5

Park Ave RE Holdings, LLC
 
Subordinated Debt
 
13.00
%
 
—
%
 
13.00
%
 
—

PCX Aerostructures, LLC
 
Subordinated Debt
 
—
%
 
6.00
%
 
6.00
%
 
170

RMP Group, Inc.
 
Subordinated Debt
 
10.50
%
 
1.00
%
 
11.50
%
 
10

Rotolo Consultants, Inc. (s)
 
Subordinated Debt
 
11.00
%
 
3.00
%
 
14.00
%
 
13

Smile Brands, Inc. (s)
 
Subordinated Debt
 
10.00
%
 
2.00
%
 
12.00
%
 
17

Steel City Media
 
Subordinated Debt
 
9.00
%
 
7.00
%
 
16.00
%
 
829

Xplornet Communications, Inc.
 
Subordinated Debt
 
8.63
%
 
1.00
%
 
9.63
%
 
1,149

Total
 
 
 
 
 
 
 
 
 
$
5,516

(m)
The Company's investment or a portion thereof is pledged as collateral under the UBS Credit Facility. Individual investments can be divided into parts which are pledged to separate credit facilities.
(n)
For equity investments in Collateralized Securities, the effective yield is presented in place of the investment coupon rate for each investment. Refer to footnote (v) for a further description of an equity investment in a Collateralized Security.

The accompanying notes are an integral part of these consolidated financial statements.
32
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

(o)
The provisions of the 1940 Act classify investments based on the level of control that the Company maintains in a particular portfolio company. As defined in the 1940 Act, a company is generally presumed to be "non-controlled" when the Company owns 25% or less of the portfolio company's voting securities and "controlled" when the Company owns more than 25% of the portfolio company's voting securities. The Company classifies this investment as "controlled".
(p)
The provisions of the 1940 Act classify investments further based on the level of ownership that the Company maintains in a particular portfolio company. As defined in the 1940 Act, a company is generally deemed as "non-affiliated" when the Company owns less than 5% of a portfolio company's voting securities and "affiliated" when the Company owns 5% or more of a portfolio company's voting securities. The Company classifies this investment as "affiliated".
(q)
Unless otherwise indicated, all investments in the consolidated schedule of investments are non-affiliated, non-controlled investments.
(r)
The Company's investment is held through the Consolidated Holding Company, Kahala Aviation Holdings, LLC, which owns 49% of the operating company, Danish CRJ LTD.
(s)
Investment sold during the year ended December 31, 2018.
(t)
The investment is on non-accrual status as of December 31, 2018.
(u)
Investments are held in the taxable wholly-owned, consolidated subsidiary, 54th Street Equity Holdings, Inc.
(v)
The Collateralized Securities - subordinated notes are treated as equity investments and are entitled to recurring distributions which are generally equal to the remaining cash flow of the payments made by the underlying fund’s securities less contractual payments to debt holders and fund expenses. The estimated yield indicated is based upon a current projection of the amount and timing of these recurring distributions and the estimated amount of repayment of principal upon termination. Such projections are periodically reviewed and adjusted, and the estimated yield may not ultimately be realized.
(w)
The Company's investment is held through the consolidated subsidiary, Park Ave RE, Inc., which owns 100% of the equity of the operating company, Park Ave RE Holdings, LLC.
(x)
The Company's investment or a portion thereof is pledged as collateral under the JPMC PB Account. Individual investments can be divided into parts which are pledged to separate credit facilities.
(y)
The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate ("LIBOR" or "L") or Prime ("P") and which reset daily, monthly, quarterly, or semiannually. For each, the Company has provided the spread over LIBOR or Prime and the current interest rate in effect at December 31, 2018. Certain investments are subject to a LIBOR or Prime interest rate floor. For fixed rate loans, a spread above a reference rate is not applicable.
(z)
The principal amount (par amount) is denominated in Canadian Dollars or CAD.
(aa)
The investment is not a restricted security. All other securities are restricted securities.
(ab)
The investment is held through a participation interest in which the Company has a contractual relationship only with the loan transferor, not the underlying borrower. The Company may be subject to the credit risk of the loan transferor as well as of the borrower.
(ac)
The investment is held through BSP TCAP Acquisition Holdings LP which, as further outlined in Note 1, is an affiliated acquisition entity utilized for the Triangle Transaction.  Due to certain restrictions, such as limits on the number of partners allowable within the equity structures of the newly acquired investments, these investments are still held within the acquisition entity as of December 31, 2018. 
(ad)
All amounts are in thousands except share amounts.

        















The accompanying notes are an integral part of these consolidated financial statements.
33
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS
(dollars in thousands)

December 31, 2018
The following table shows the portfolio composition by industry grouping based on fair value at December 31, 2018:
 
At December 31, 2018
 
Investments at
Fair Value
 
Percentage of
Total Portfolio
Healthcare
$
357,065

 
15.3
%
Industrials
270,699

 
11.6
%
Business Services
264,296

 
11.3
%
Diversified Investment Vehicles
204,062

 
8.8
%
Financials
142,695

 
6.1
%
Transportation
140,824

 
6.0
%
Media/Entertainment
135,230

 
5.8
%
Technology
119,825

 
5.1
%
Energy
113,507

 
4.9
%
Telecom
112,838

 
4.8
%
Food & Beverage
98,653

 
4.2
%
Consumer
95,159

 
4.1
%
Chemicals
67,816

 
2.9
%
Gaming/Lodging
58,572

 
2.5
%
Paper & Packaging
44,882

 
1.9
%
Software/Services
39,523

 
1.7
%
Health/Fitness
31,711

 
1.4
%
Education
21,688

 
0.9
%
Publishing
9,775

 
0.4
%
Retail
5,894

 
0.3
%
Total
$
2,334,714

 
100.0
%


The accompanying notes are an integral part of these consolidated financial statements.
34
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)


Note 1 — Organization and Basis of Presentation
Business Development Corporation of America (the “Company” or "BDCA") is an externally managed, non-diversified closed-end management investment company incorporated in Maryland in May 2010 that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (“the 1940 Act”). In addition, the Company has elected to be treated for tax purposes as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). The Company’s investment activities are managed by BDCA Adviser, LLC (the “Adviser”), a subsidiary of Benefit Street Partners L.L.C. (“BSP”) and supervised by the Company’s board of directors, a majority of whom are independent of the Adviser and its affiliates. As a BDC, the Company is required to comply with certain regulatory requirements.
The Company’s investment objective is to generate both current income and to a lesser extent long-term capital appreciation through debt and equity investments. The Company invests primarily in first and second lien senior secured loans and mezzanine debt issued by middle market companies. The Company defines middle market companies as those with annual revenues up to $1 billion. The Company also purchases interests in loans through secondary market transactions. First and second lien secured loans generally are senior debt instruments that rank ahead of subordinated debt and equity in bankruptcy priority and are generally secured by liens on the operating assets of a borrower, which may include inventory, receivables, plant, property, and equipment. Mezzanine debt is subordinated to senior loans and is generally unsecured. The Company may invest in the equity and junior debt tranches of collateralized loan obligation investment vehicles (“Collateralized Securities” or "CLOs"). CLOs are entities that are formed to manage a portfolio of senior secured loans made to companies whose debt is typically rated below investment grade or, in limited circumstances, unrated. The senior secured loans within these Collateralized Securities meet specified credit and diversity criteria and are subject to concentration limitations in order to create a diverse investment portfolio. In most cases, companies to whom the Company provides customized financing solutions will be privately held at the time the Company invests in them.
On April 3, 2018, BSP, through its affiliate BSP TCAP Acquisition Holdings LP (the “Acquisition Entity”), entered into an Asset Purchase Agreement (the “APA”) with Triangle Capital Corporation (“Triangle”) under which certain funds advised by BSP agreed to acquire Triangle’s Investment Portfolio (the “Triangle Portfolio”) for $981.2 million in cash, as adjusted in accordance with the terms of the APA (the “Triangle Transaction”). The Company’s Adviser is an affiliate of BSP, and the Company participated in the Triangle Transaction by purchasing a portion of the Triangle Portfolio, facilitated through the Acquisition Entity.
On July 31, 2018, BSP completed the Triangle Transaction. The gross cash proceeds paid to Triangle were approximately $793.3 million, after adjustments to take into account portfolio activity and other matters occurring since December 31, 2017. In accordance with BSP’s allocation policy, the Company acquired approximately 24% of the assets in the Triangle Portfolio for an aggregate purchase price of $188.1 million. The final allocation of the investments in the Triangle Portfolio by BSP was based on a number of factors, including, among others, the Company's available capital at the time of allocation, changes in the composition of the Triangle Portfolio between the signing of the APA and the closing of the Triangle Transaction, the suitability of the investments in Triangle’s Portfolio for the Company as compared to the other funds managed by BSP, regulatory guidance regarding the allocation of certain Triangle Portfolio assets between funds managed by BSP, and changes in the relative size of the funds managed by BSP.
The Company accounted for the Triangle Transaction under the accounting and reporting guidance within Accounting Standards Codification ("ASC") Topic 805, Business Combinations (“ASC 805”). The Company concluded that the Triangle Transaction should be accounted for as an asset acquisition and no further considerations or disclosures required for a business combination under ASC 805 are warranted.
On February 1, 2019, Franklin Templeton acquired BSP, including BSP’s 100% ownership interest in the Company's Adviser (the “FT Transaction”). All investment professionals currently managing the Company and its investments, and all members of the BSP’s Investment Committee are expected to maintain their current responsibilities after the FT Transaction.
During the nine months ended September 30, 2019, the Company invested approximately $795.5 million to portfolio companies to contribute to the support of their business objectives of which some were contractually obligated. See Note 7 - Commitments and Contingencies. As of September 30, 2019, the Company held investments in loans it made to investee companies with aggregate principal amounts of $2,402.1 million. The details of such investments have been disclosed on the consolidated schedule of investments as well as in Note 3 - Fair Value of Financial Instruments. In addition to providing loans to investee companies, from time to time the Company may assist investee companies in securing financing from other sources by introducing such investee companies to sponsors or other lending institutions.

35
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

While the structure of the Company’s investments is likely to vary, the Company may invest in senior secured debt, senior unsecured debt, subordinated secured debt, subordinated unsecured debt, mezzanine debt, convertible debt, convertible preferred equity, preferred equity, common equity, warrants, CLOs, and other instruments, many of which generate current yields. If the Adviser deems appropriate, the Company may invest in more liquid senior secured and second lien debt securities, some of which may be traded. The Company will make such investments to the extent allowed by the 1940 Act and consistent with its continued qualification as a RIC for federal income tax purposes.
On January 25, 2011, the Company commenced its initial public offering (the “IPO”) on a “reasonable best efforts basis” of up to 150.0 million shares of common stock, $0.001 par value per share, and subsequently amended the offering to issue up to an additional 101.1 million shares of its common stock (the “Offering”). The Company closed the Offering to new investments on April 30, 2015. As of September 30, 2019, the Company had issued 214.8 million shares of common stock for gross proceeds of $2.3 billion including the shares purchased by affiliates and shares issued under the Company's distribution reinvestment plan (“DRIP”). As of September 30, 2019, the Company had repurchased a cumulative 25.6 million shares of common stock through its share repurchase program for payments of $222.0 million.
The Company intends to co-invest, subject to the conditions included in the exemptive order the Company received from the Securities and Exchange Commission ("SEC"), with certain of its affiliates. The Company believes that such co-investments may afford it additional investment opportunities and an ability to achieve greater diversification.
As a BDC, the Company is generally required to invest at least 70% of its total assets primarily in securities of private and certain U.S. public companies (other than certain financial institutions), cash, cash equivalents and U.S. Government securities, and other high-quality debt investments that mature in one year or less.
The Company is permitted to borrow money from time to time within the levels permitted by the 1940 Act (which generally currently allows it to incur leverage for up to one half of its total assets). The Company has used, and expects to continue to use, its credit facilities and other borrowings, along with proceeds from the rotation of its portfolio and proceeds from private securities offerings to finance its investment objectives.
Although Congress passed the Small Business Credit Availability Act (the “SBCAA”) on March 23, 2018, which amended the 1940 Act to permit BDCs to incur increased leverage if certain conditions are met, the Company does not presently intend to avail itself of the increased leverage limits permitted by the SBCAA. If the Company were to avail itself of the increased leverage permitted by the SBCAA, this would effectively allow the Company to double its leverage, which would increase leverage risk and expenses.
Note 2 — Summary of Significant Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The consolidated financial statements reflect all adjustments, both normal and recurring which, in the opinion of management, are necessary of the fair presentation of the Company’s results of operations and financial condition for the periods presented. The Company is an investment company and follows accounting and reporting guidance in ASC Topic 946 - Financial Services - Investment Companies ("ASC 946").
The Company consolidates the following subsidiaries for accounting purposes: BDCA Funding I, LLC (“Funding I”), BDCA-CB Funding, LLC (“CB Funding”), BDCA Helvetica Funding, Ltd. (“Helvetica Funding”), 54th Street Equity Holdings, Inc. and the Consolidated Holding Companies. All significant intercompany balances and transactions have been eliminated in consolidation. 
Prior to September 30, 2019, in conjunction with the consolidation of subsidiaries, the Company had recognized non-controlling interests attributable to third party ownership in the following Consolidated Holding Companies: Kahala Aviation Holdings, LLC, Kahala Aviation US, Inc., and Kahala LuxCo. On September 30, 2019, the Company entered an agreement to purchase the third party ownership of Kahala Aviation Holdings LLC, which in turn owns 100% of the equity of Kahala Aviation US, Inc. and Kahala Luxco. As a result of this agreement, the company owns 100% of the equity of Kahala Aviation Holdings LLC, Kahala Aviation US, Inc, and Kahala Luxco, and therefore no longer recognizes a non-controlling interest in these Consolidated Holding Companies. See Note 9 - Common Stock for detail of the activity attributable to non-controlling interests.

36
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

Interim financial statements are prepared in accordance with U.S. GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X, as appropriate. Accordingly, the consolidated financial statements may not include all of the information and notes required by U.S. GAAP for annual consolidated financial statements. U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reported periods. Changes in the economic environment, financial markets, and any other parameters used in determining these estimates could cause actual results to differ materially. The current period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the fiscal year ending on December 31, 2019.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Consolidation
As provided under ASC 946, the Company will generally not consolidate its investment in a company other than a substantially or wholly-owned investment company or controlled operating company whose business consists of providing services to the Company. Accordingly, the Company consolidated the accounts of the Company's substantially wholly-owned subsidiaries in its consolidated financial statements.
Valuation of Portfolio Investments
Portfolio investments are reported on the consolidated statements of assets and liabilities at fair value. On a quarterly basis, the Company performs an analysis of each investment to determine fair value as follows:
Securities for which market quotations are readily available on an exchange are valued at the reported closing price on the valuation date. The Company may also obtain quotes with respect to certain of the Company's investments from pricing services or brokers or dealers in order to value assets. When doing so, the Company determines whether the quote obtained is readily available according to U.S. GAAP to determine the fair value of the security. If determined to be readily available, the Company uses the quote obtained.
Investments without a readily determined market value are primarily valued using a market approach, an income approach, or both approaches, as appropriate. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that 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, security covenants, call protection provisions, information rights, the nature and realizable value of any collateral, the portfolio company's ability to make payments, its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, M&A comparables, and enterprise values, among other factors. When available, broker quotations and/or quotations provided by pricing services are considered as an input in the valuation process.
With respect to investments for which market quotations are not readily available, the Adviser undertakes a multi-step valuation process each quarter, as described below:
•
Each portfolio company or investment will be valued by the Adviser, with assistance from one or more independent valuation firms engaged by the Company's board of directors or as noted below, with respect to investments in an investment fund;
•
The independent valuation firm(s) conduct independent appraisals and make an independent assessment of the value of each investment; and
•
The board of directors determines the fair value of each investment, in good faith, based on the input of the Adviser and independent valuation firm (to the extent applicable).

37
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

For an investment in an investment fund that does not have a readily determinable fair value, the Company measures the fair value of the investment predominately based on the net asset value per share of the investment fund if the net asset value of the investment fund is calculated in a manner consistent with the measurement principles of ASC 946, as of the Company's measurement date. However, there can be no assurance that the Company will be able to sell such investment at a price equal to its net asset value per share and the Company may ultimately sell such investment at a discount to its net asset value per share.
The Company’s investments in funds that offer periodic liquidity have redemption frequencies which range from monthly to quarterly and redemption notice periods which range from 30 to 90 days. Investments in private equity typically do not offer liquidity and instead, capital is returned through periodic distributions.
Because there is not a readily available market value for most of the investments in its portfolio, the Company values substantially all of its portfolio investments at fair value as determined in good faith by its board of directors, as described herein. 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 fluctuate from period to period. Additionally, the fair value of the Company's investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that the Company may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If the Company was required to liquidate a portfolio investment in a forced or liquidation sale, the Company could realize significantly less than the value at which the Company has recorded it.
Investment Classification
The Company classifies its investments in accordance with the requirements of the 1940 Act. Under the 1940 Act, “Control” is defined as the power to exercise a controlling influence over the management or policies of a company, unless such power is solely the result of an official position with such company. In addition, any person “who owns beneficially, either directly or through one or more controlled companies, more than 25% of the voting securities of a company shall be presumed to control such company. Typically, any person who does not so own more than 25% of the voting securities of any company shall be presumed not to control such company.” Consistent with the 1940 Act, “Affiliated Investments” are defined as those investments in companies in which the Company owns 5% or more of the voting securities. Consistent with the 1940 Act, “Non-affiliated Investments” are defined as investments that are neither Control Investments nor Affiliated Investments.
Where appropriate, prior period consolidated financial statements may have been reclassified to disclose the Company's Control Investments and Affiliate Investments as defined above. The current period's industry classifications may have been revised to more precisely reflect the business of the Company's investments. Further, prior period classifications have been revised in a consistent manner with the current period.
Cash and Cash Equivalents
Cash and cash equivalents include short-term, liquid investments in a money market deposit account. Cash and cash equivalents are carried at cost which approximates fair value.
Offering Costs
The Company incurs certain costs in connection with the registration of shares of its common stock. Offering costs principally relate to professional fees, printing costs, direct marketing expenses, due diligence costs, fees paid to regulators, and other expenses, including the salaries and/or expenses of the Adviser and its affiliates engaged in registering and marketing the Company’s common stock. Such allocated expenses of the Adviser and its affiliates may include the development of marketing materials and presentations, training and educational meetings, and generally coordinating the marketing process for the Company.
Pursuant to the Investment Advisory Agreement, the Company and the Adviser have agreed that the Company will not be liable for organization and offering costs, including transfer agent fees, in excess of 1.5% of the aggregate gross proceeds from the Company’s on-going offering. Should the Company resume continually offering its shares, any offering costs incurred will be capitalized and amortized as an expense on a straight-line basis over a 12-month period. For the periods ended September 30, 2019, and December 31, 2018 the Company did not incur any offering costs.
Deferred Financing Costs
Financing costs incurred in connection with the Company’s unsecured notes and revolving credit facilities with Wells Fargo, Citi, and UBS are capitalized and amortized into expense using the straight-line method, which approximates the effective yield method over the life of the respective facility. See Note 5 - Borrowings for details on the credit facilities and unsecured notes.

38
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

Distributions
The Company’s board of directors has authorized, and has declared, cash distributions payable on a monthly basis to stockholders of record on each day since it commenced operations. From November 2013 until July 2017, the distribution rate has been $0.002378082 per day, which is equivalent to $0.868 per annum, per share of common stock, except for 2016 where the daily distribution rate was $0.002371585 per day to accurately reflect 2016 being a leap year. In July 2017, the board of directors reduced the distribution rate with respect to the Company's cash distributions to $0.00178082 per day, which is equivalent to $0.65 annually, per share of common stock.
The amount of each such distribution is subject to the discretion of the board of directors and applicable legal restrictions related to the payment of distributions. The Company calculates each stockholder’s specific distribution amount for the month using record and declaration dates and accrues distributions on the date the Company accepts a subscription for shares of the Company’s common stock. The distributions are payable by the fifth day following each month end to stockholders of record at the close of business each day during the prior month. From time to time, the Company may also pay interim distributions, including capital gains distributions, at the discretion of the Company’s board of directors. The Company’s distributions may exceed earnings, especially during the period before it has substantially invested the proceeds from the offering. As a result, a portion of the distributions made by the Company may represent a return of capital for U.S. federal income tax purposes. A return of capital is a return of each stockholder’s investment rather than earnings or gains derived from the Company’s investment activities.
The Company may fund cash distributions to stockholders from any sources of funds available to the Company, including advances from the Adviser that are subject to reimbursement, as well as offering proceeds, borrowings, net investment income from operations, capital gain proceeds from the sale of assets, and non-capital gain proceeds from the sale of assets. The Company has not established limits on the amount of funds it may use from available sources to make distributions. See Note 13 - Income Tax Information and Distributions to Stockholders for additional information.
Revenue Recognition
Interest Income
Investment transactions are accounted for on the trade date. Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis. Discount and premium on investments purchased are accreted/amortized over the expected life of the respective investment using the effective yield method. The amortized cost of investments represents the original cost adjusted for the accretion of discount and amortization of premium on investments.
The Company has a number of investments in Collateralized Securities. Interest income from investments in the “equity” class of these Collateralized Securities (in the Company's case, preferred shares or subordinated notes) is recorded based upon an estimation of an effective yield to expected maturity utilizing assumed cash flows in accordance with ASC 325-40-35, Beneficial Interests in Securitized Financial Assets ("ASC 325-40-35"). The Company monitors the expected cash inflows from its equity investments in Collateralized Securities, including the expected principal repayments. The effective yield is determined and updated quarterly. In accordance with ASC 325-40, investments in CLOs are periodically assessed for other-than-temporary impairment ("OTTI"). When the Company determines that a CLO has OTTI, the amortized cost basis of the CLO is written down as of the date of the determination based on events and information evaluated and that write-down is recognized as a realized loss.
Fee Income
Fee income, such as structuring fees, origination, closing, amendment fees, commitment, termination, and other upfront fees are generally non-recurring and are recognized as revenue when earned, either upon receipt or amortized into income. Upon the re-payment of a loan or debt security, any prepayment penalties and unamortized loan origination, structuring, closing, commitment, and other upfront fees are recorded as income.
Payment-in-Kind Interest/Dividends
The Company holds debt and equity investments in its portfolio that contain payment-in-kind (“PIK”) interest and dividend provisions. The PIK interest and PIK dividend, which represent contractually deferred interest or dividends that add to the investment balance that is generally due at maturity, are generally recorded on the accrual basis.

39
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

Non-accrual Income
Investments may be placed on non-accrual status when principal or interest/dividend payments are past due 30 days or more and/or when there is reasonable doubt that principal or interest will be collected. Accrued interest which may include un-capitalized PIK interest is generally reversed when an investment is placed on non-accrual status. Previously capitalized PIK interest is not reversed when an investment is placed on non-accrual status. Interest payments received on non-accrual investments may be recognized as income or applied to principal depending upon management's judgment of the ultimate outcome. Non- accrual investments are restored to accrual status when past due principal and interest is paid and, in management's judgment, are likely to remain current.
Net Realized Gain or Loss and Net Change in Unrealized Appreciation or Depreciation
Gain or loss on the sale of investments is calculated using the specific identification method. The Company measures realized gain or loss by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized. Net change in unrealized appreciation or depreciation will reflect the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when a gain or loss is realized.
Income Taxes
The Company has elected to be treated for federal income tax purposes as a RIC under Subchapter M of the Code. Generally, a RIC is not subject to federal income taxes in respect of each taxable year if it distributes dividends for federal income tax purposes to stockholders of an amount generally equal to at least 90% of ‘‘investment company taxable income,’’ as defined in the Code, and determined without regard to any deduction for dividends paid. Distributions declared prior to the filing of the previous year's tax return and paid up to twelve months after the previous tax year can be carried back to the prior tax year in determining the distributions paid in such tax year. The Company intends to make sufficient distributions to maintain its ability to be subject to be taxed as a RIC each year. The Company may be subject to federal excise tax imposed at a rate of 4% on certain undistributed amounts. See Note 13 - Income Tax Information and Distributions to Stockholders for additional information.
New Accounting Pronouncements
Adopted
In August 2018, the SEC released its Final Rule on Disclosure Update and Simplification (the “Final Rule”) which is intended to simplify an issuer’s disclosure compliance efforts by removing redundant or outdated disclosure requirements without significantly altering the mix of information provided to investors. The Company has adopted the Final Rule with the most notable impacts being that the Company is no longer required to present the components of distributable earnings on the consolidated statements of assets and liabilities or the sources of distributions to shareholders and the amount of undistributed net investment income on the consolidated statements of changes in net assets.    
New Standards Pending
In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2018-13, Fair Value Measurement (Topic 820) – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”) which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. The Company is evaluating the impact of ASU 2018-13 on its consolidated financial statements.
Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s consolidated financial statements.
Note 3 — Fair Value of Financial Instruments
The Company’s fair value measurements are classified into a fair value hierarchy in accordance with ASC Topic 820, Fair Value Measurement, based on the markets in which the assets and liabilities are traded, and the reliability of the assumptions used to determine fair value. Market price observability is affected by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

40
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. This alternative approach also reflects the contractual terms of the derivatives, if any, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The guidance defines three levels of inputs that may be used to measure fair value:
•
Level 1—Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date.
•
Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability.
•
Level 3—Unobservable inputs that reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.
The determination of where an asset or liability falls in the above hierarchy requires significant judgment and factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter.
For investments for which Level 1 inputs, such as quoted prices, were not available at September 30, 2019, the investments were valued at fair value as determined in good faith using the valuation policy approved by the board of directors using Level 2 and Level 3 inputs. The Company evaluates the source of inputs, including any markets in which the Company's investments are trading, in determining fair value. Due to the inherent uncertainty in the valuation process, the estimate of fair value of the Company’s investment portfolio at September 30, 2019 may differ materially from values that would have been used had a ready market for the securities existed.
In addition to using the above inputs in investment valuations, the Company continues to employ the valuation policy approved by the board of directors. Portfolio investments are reported on the consolidated statements of assets and liabilities at fair value. On a quarterly basis the Company performs an analysis of each investment to determine fair value as described below.
Securities for which market quotations are readily available on an exchange are valued at the reported closing price on the valuation date. The Company may also obtain quotes with respect to certain of the Company's investments from pricing services or brokers or dealers in order to value assets. When doing so, the Company determines whether the quote obtained is readily available according to U.S. GAAP to determine the fair value of the security. If determined readily available, the Company uses the quote obtained.
Investments without a readily determined market value are primarily valued using a market approach, an income approach, or both approaches, as appropriate. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that 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, security covenants, call protection provisions, information rights, the nature and realizable value of any collateral, the portfolio company's ability to make payments, its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, M&A comparables, and enterprise values, among other factors. When available, broker quotations and/or quotations provided by pricing services are considered as an input in the valuation process.
For an investment in an investment fund that does not have a readily determinable fair value, the Company measures the fair value of the investment predominately based on the net asset value per share of the investment fund if the net asset value of the investment fund is calculated in a manner consistent with the measurement principles of ASC Topic 946, as of the Company's measurement date.

41
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

For investments in Collateralized Securities, the Adviser models both the assets and liabilities of each Collateralized Securities' capital structure. The model uses a waterfall engine to store the collateral data, generate cash flows from the assets, and distribute the cash flows to the liability structure based on priority of payments. The cash flows are discounted using rates that incorporate risk factors such as default risk, interest rate risk, downgrade risk, and credit spread risk, among others. In addition, the Adviser considers broker quotations and/or comparable trade activity is considered as an input to determining fair value when available.
As part of the Company's quarterly valuation process, the Adviser may be assisted by one or more independent valuation firms engaged by the Company. The board of directors determines the fair value of each investment, in good faith, based on the input of the Adviser and the independent valuation firm(s) (to the extent applicable).
Determination of fair values involves subjective judgments and estimates. Accordingly, the notes to the consolidated financial statements refer to the uncertainty with respect to the possible effect of such valuations, and any change in such valuations on the consolidated financial statements.
For discussion of the fair value measurement of the Company's borrowings, refer to Note 5 - Borrowings.
For discussion of the fair value measurement of the Company's foreign currency contracts, refer to Note 6 - Derivatives.
The following table presents fair value measurements of investments, by major class, as of September 30, 2019, according to the fair value hierarchy:
 
Fair Value Measurements
 
Level 1
 
Level 2
 
Level 3
 
Measured at Net Asset Value (1)
 
Total
Senior Secured First Lien Debt
$
—

 
$
748,697

 
$
1,041,033

 
$
—

 
$
1,789,730

Senior Secured Second Lien Debt
—

 
32,812

 
279,981

 
—

 
312,793

Subordinated Debt
—

 
26,205

 
83,450

 
—

 
109,655

Collateralized Securities
—

 
—

 
110,215

 
—

 
110,215

Equity/Other
2,216

 
—

 
180,336

 
71,800

 
254,352

Total
$
2,216

 
$
807,714

 
$
1,695,015

 
$
71,800

 
$
2,576,745

______________
(1) In accordance with ASC Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient election have not been classified 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 table presents fair value measurements of investments, by major class, as of December 31, 2018, according to the fair value hierarchy:
 
Fair Value Measurements
 
Level 1
 
Level 2
 
Level 3
 
Measured at Net Asset Value (1)
 
Total
Senior Secured First Lien Debt
$
—

 
$
554,840

 
$
1,039,223

 
$
—

 
$
1,594,063

Senior Secured Second Lien Debt
—

 
22,823

 
252,651

 
—

 
275,474

Subordinated Debt
—

 
45,574

 
92,595

 
—

 
138,169

Collateralized Securities
—

 
—

 
127,212

 
—

 
127,212

Equity/Other
3,106

 
2,733

 
117,107

 
76,850

 
199,796

Total
$
3,106

 
$
625,970

 
$
1,628,788

 
$
76,850

 
$
2,334,714

______________

42
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

(1) In accordance with ASC Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient election have not been classified 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 table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the nine months ended September 30, 2019:
 
Senior Secured First Lien Debt
 
Senior Secured Second Lien Debt
 
Subordinated Debt
 
Collateralized Securities
 
Equity/Other
 
Total
Balance as of December 31, 2018
$
1,039,223

 
$
252,651

 
$
92,595

 
$
127,212

 
$
117,107

 
$
1,628,788

Net change in unrealized appreciation (depreciation) on investments
20,488

 
(7,042
)
 
3,244

 
(4,743
)
 
29,482

 
41,429

Purchases and other adjustments to cost
228,331

 
97,241

 
23,377

 
22,568

 
65,722

 
437,239

Sales and repayments
(190,639
)
 
(71,972
)
 
(35,158
)
 
(35,366
)
 
(36,242
)
 
(369,377
)
Net realized gain (loss)
(42,984
)
 
458

 
(608
)
 
544

 
4,267

 
(38,323
)
Transfers in
40,624

 
8,645

 
—

 
—

 
—

 
49,269

Transfers out
(54,010
)
 
—

 
—

 
—

 
—

 
(54,010
)
Balance as of September 30, 2019
$
1,041,033

 
$
279,981

 
$
83,450

 
$
110,215

 
$
180,336

 
$
1,695,015

Net change in unrealized appreciation (depreciation) for the period relating to those Level 3 assets that were still held by the Company at the end of the period:
$
(19,869
)
 
$
(6,898
)
 
$
(1,247
)
 
$
(7,006
)
 
$
29,143

 
$
(5,877
)
Purchases represent the acquisition of new investments at cost. Sales and repayments represent principal payments received during the period.
For the nine months ended September 30, 2019, there were no transfers out of Level 1 to Level 2. For the nine months ended September 30, 2019, investments in six companies were transferred out of Level 2 to Level 3 as the number of observable market quotes decreased. For the nine months ended September 30, 2019, investments in six companies were transferred from Level 3 to Level 2 as the number of observable market quotes increased.

43
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the year ended December 31, 2018:
 
Senior Secured First Lien Debt
 
Senior Secured Second Lien Debt
 
Subordinated Debt
 
Collateralized Securities
 
Equity/Other
 
Total
Balance as of December 31, 2017
$
1,242,983

 
$
215,401

 
$
61,089

 
$
160,195

 
$
103,738

 
$
1,783,406

Net change in unrealized appreciation (depreciation) on investments
(1,768
)
 
(15,159
)
 
(1,404
)
 
5,618

 
(5,362
)
 
(18,075
)
Purchases and other adjustments to cost
452,140

 
102,561

 
57,183

 
22,103

 
49,838

 
683,825

Sales and repayments
(669,650
)
 
(58,890
)
 
(24,407
)
 
(29,822
)
 
(37,962
)
 
(820,731
)
Net realized gain (loss)
(3,876
)
 
961

 
134

 
(30,882
)
 
6,855

 
(26,808
)
Transfers in
110,613

 
7,777

 
—

 
—

 
—

 
118,390

Transfers out
(91,219
)
 
—

 
—

 
—

 
—

 
(91,219
)
Balance as of December 31, 2018
$
1,039,223

 
$
252,651

 
$
92,595

 
$
127,212

 
$
117,107

 
$
1,628,788

Net change in unrealized appreciation (depreciation) for the period relating to those Level 3 assets that were still held by the Company at the end of the period:
$
(18,535
)
 
$
(14,850
)
 
$
(1,763
)
 
$
859

 
$
(2,169
)
 
$
(36,458
)
Purchases represent the acquisition of new investments at cost. Sales and repayments represent principal payments received during the period.
For the year ended December 31, 2018, there were no transfers out of Level 1 to Level 2. For the year ended December 31, 2018, investments in thirteen companies were transferred out of Level 2 to Level 3. For the year ended December 31, 2018, investments in eight companies were transferred from Level 3 to Level 2 as the number of observable market quotes increased.
The composition of the Company’s investments as of September 30, 2019, at amortized cost and fair value, were as follows:
 
Investments at
Amortized Cost
 
Investments at
Fair Value
 
Fair Value
Percentage of
Total Portfolio
Senior Secured First Lien Debt
$
1,893,967

 
$
1,789,730

 
69.5
%
Senior Secured Second Lien Debt
335,228

 
312,793

 
12.1

Subordinated Debt
110,010

 
109,655

 
4.2

Collateralized Securities
142,671

 
110,215

 
4.3

Equity/Other
205,808

 
254,352

 
9.9

Total
$
2,687,684

 
$
2,576,745

 
100.0
%
The composition of the Company’s investments as of December 31, 2018, at amortized cost and fair value, were as follows:
 
Investments at
Amortized Cost
 
Investments at
Fair Value
 
Fair Value
Percentage of
Total Portfolio
Senior Secured First Lien Debt
$
1,712,904

 
$
1,594,063

 
68.3
%
Senior Secured Second Lien Debt
291,674

 
275,474

 
11.8

Subordinated Debt
143,803

 
138,169

 
5.9

Collateralized Securities
154,930

 
127,212

 
5.4

Equity/Other
177,021

 
199,796

 
8.6

Total
$
2,480,332

 
$
2,334,714

 
100.0
%


44
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

Significant Unobservable Inputs
The following table summarizes the significant unobservable inputs used to value the majority of the Level 3 investments as of September 30, 2019. The table is not intended to be all-inclusive, but instead identifies the significant unobservable inputs relevant to the determination of fair values.
 
 
 
 
Range
 
 
Asset Category
 
Fair Value
 
Primary Valuation Technique
 
Unobservable Inputs
 
Minimum
 
Maximum
 
Weighted Average (a)
Senior Secured First Lien Debt
 
$
800,138

 
Discounted Cash Flow
 
Market Yield
 
5.90
%
 
39.00
%
 
10.16
%
Senior Secured First Lien Debt (c)
 
$
87,034

 
N/A
 
N/A
 
N/A

 
N/A

 
N/A

Senior Secured First Lien Debt
 
$
81,655

 
Waterfall Analysis
 
Discount Rate
 
15.50
%
 
18.94
%
 
16.09
%
Senior Secured First Lien Debt
 
$
60,804

 
Yield Analysis
 
Market Yield
 
6.10%

 
17.94%

 
10.81%

Senior Secured First Lien Debt
 
$
8,315

 
Waterfall Analysis
 
EBITDA Multiple
 
3.40x

 
6.67x

 
3.42x

Senior Secured First Lien Debt
 
$
3,087

 
Waterfall Analysis
 
Revenue Multiple
 
0.15x

 
0.88x

 
0.63x

Senior Secured Second Lien Debt
 
$
193,001

 
Discounted Cash Flow
 
Market Yield
 
8.57
%
 
28.00
%
 
11.77
%
Senior Secured Second Lien Debt
 
$
52,505

 
Yield Analysis
 
Market Yield
 
10.27
%
 
23.23
%
 
11.57
%
Senior Secured Second Lien Debt
 
$
18,070

 
Waterfall Analysis
 
EBITDA Multiple
 
4.20x

 
8.05x

 
4.26x

Senior Secured Second Lien Debt (c)
 
$
10,207

 
N/A
 
N/A
 
N/A

 
N/A

 
N/A

Senior Secured Second Lien Debt
 
$
4,857

 
Waterfall Analysis
 
Revenue Multiple
 
0.43x

 
1.63x

 
0.93x

Senior Secured Second Lien Debt (b)
 
$
1,341

 
Transaction Price
 
N/A
 
N/A

 
N/A

 
N/A

Subordinated Debt (b)
 
$
35,487

 
Other
 
Discount Rate
 
10.00
%
 
10.00
%
 
10.00
%
Subordinated Debt (b)
 
$
22,500

 
Waterfall Analysis
 
Tangible Net Asset Value Multiple
 
1.75x

 
1.75x

 
1.75x

Subordinated Debt
 
$
19,644

 
Yield Analysis
 
Market Yield
 
12.18
%
 
19.22
%
 
15.82
%
Subordinated Debt (b)
 
$
5,819

 
Waterfall Analysis
 
Asset Recovery
 
6.25x

 
6.25x

 
6.25x

Collateralized Securities
 
$
110,215

 
Discounted Cash Flow
 
Discount Rate
 
4.75
%
 
37.50
%
 
14.19
%
Equity/Other
 
$
67,860

 
Waterfall Analysis
 
Discount Rate
 
15.50
%
 
25.00
%
 
17.29
%
Equity/Other (b)
 
$
36,915

 
Waterfall Analysis
 
Tangible Net Asset Value Multiple
 
1.75x

 
1.75x

 
1.75x

Equity/Other
 
$
32,599

 
Discounted Cash Flow
 
Market Yield
 
9.06%

 
13.35%

 
11.33%

Equity/Other
 
$
16,190

 
Waterfall Analysis
 
EBITDA Multiple
 
4.20x

 
12.50x

 
7.06x

Equity/Other (b)
 
$
8,505

 
Other
 
Discount Rate
 
10.00
%
 
10.00
%
 
10.00
%

45
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

Equity/Other (b)
 
$
4,895

 
Waterfall Analysis
 
Asset Recovery
 
0.90x

 
0.90x

 
0.90x

Equity/Other (b) (c)
 
$
4,288

 
N/A
 
N/A
 
N/A

 
N/A

 
N/A

Equity/Other
 
$
4,506

 
Waterfall Analysis
 
TBV Multiple
 
1.85x

 
4.40x

 
3.98x

Equity/Other
 
$
2,343

 
Waterfall Analysis
 
Revenue Multiple
 
0.15x

 
0.43x

 
0.38x

Equity/Other (b)
 
$
2,235

 
Waterfall Analysis
 
Other
 
N/A

 
N/A

 
N/A

Total
 
$
1,695,015

 
 
 
 
 
 
 
 
 
 
______________
(a) 
Weighted averages are calculated based on fair value of investments.
(b) 
This asset category contains one investment.
(c) 
This instrument(s) was held at cost.
There were no significant changes in valuation approach or technique as of September 30, 2019.
Increases or decreases in any of the above unobservable inputs in isolation would result in a lower or higher fair value measurement for such assets.

46
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

The following table summarizes the significant unobservable inputs used to value the majority of the Level 3 investments as of December 31, 2018. The table is not intended to be all-inclusive, but instead identifies the significant unobservable inputs relevant to the determination of fair values.
 
 
 
 
Range
 
 
Asset Category
 
Fair Value
 
Primary Valuation Technique
 
Unobservable Inputs
 
Minimum
 
Maximum
 
Weighted Average (a)
Senior Secured First Lien Debt (b)
 
$
555,066

 
Discounted Cash Flow
 
Market Yield
 
6.98
%
 
18.95
%
 
10.42
%
Senior Secured First Lien Debt (b)
 
$
288,547

 
Yield Analysis
 
Market Yield
 
6.50
%
 
19.43
%
 
11.50
%
Senior Secured First Lien Debt (b)
 
$
111,549

 
Waterfall Analysis
 
Discount Rate
 
17.00
%
 
19.00
%
 
18.00
%
Senior Secured First Lien Debt (b)
 
$
6,142

 
Waterfall Analysis
 
Revenue Multiple
 
0.38x

 
0.89x

 
0.77x

Senior Secured First Lien Debt (b)
 
$
5,944

 
Waterfall Analysis
 
EBITDA Multiple
 
0.29x

 
6.05x

 
3.45x

Senior Secured Second Lien Debt (d)
 
$
171,022

 
Yield Analysis
 
Market Yield
 
10.00
%
 
23.04
%
 
13.39
%
Senior Secured Second Lien Debt (d)
 
$
66,029

 
Discounted Cash Flow
 
Market Yield
 
10.05
%
 
15.44
%
 
12.21
%
Senior Secured Second Lien Debt (d)
 
$
1,947

 
Waterfall Analysis
 
Revenue Multiple
 
 1.6x

 
1.7x

 
1.65x

Subordinated Debt (c) (e)
 
$
37,192

 
Waterfall Analysis
 
Discount Rate
 
8.00
%
 
9.00
%
 
N/A

Subordinated Debt (e)
 
$
31,623

 
Yield Analysis
 
Market Yield
 
11.63
%
 
21.84
%
 
15.32
%
Subordinated Debt (c) (e)
 
$
5,560

 
Waterfall Analysis
 
EBITDA Multiple
 
9.54x

 
9.54x

 
N/A

Subordinated Debt (c) (e)
 
$
189

 
Asset Recovery / Take Out
 
Asset Recovery Percentage
 
36.96
%
 
36.96
%
 
N/A

Collateralized Securities
 
$
127,212

 
Discounted Cash Flow
 
Discount Rate
 
7.50
%
 
33.00
%
 
17.85
%
Equity/Other (f)
 
$
28,973

 
Discounted Cash Flow
 
Market Yield
 
11.07
%
 
12.07
%
 
11.57
%
Equity/Other (f)
 
$
23,579

 
Waterfall Analysis
 
Discount Rate
 
17.00
%
 
19.00
%
 
18.00
%
Equity/Other (f)
 
$
15,819

 
Waterfall Analysis
 
EBITDA Multiple
 
 4.25x

 
 12.0x

 
 6.47x

Equity/Other (f)
 
$
2,235

 
Waterfall Analysis
 
Appraisal Value
 
21,923.96

 
21,923.96

 
 N/A

Equity/Other (f)
 
$
682

 
Waterfall Analysis
 
TBV Multiple
 
 1.45x

 
 1.45x

 
 1.45x

Equity/Other (f)
 
$
42

 
Waterfall Analysis
 
Revenue Multiple
 
 0.12x

 
 0.12x

 
 0.12x

Equity/Other (f)
 
$
11

 
Option Pricing Method
 
Volatility
 
50.00
%
 
70.00
%
 
60.00
%

______________
(a) 
Weighted averages are calculated based on fair value of investments.
(b) 
The remaining $72.0 million of senior secured first lien debt was valued using a Scenario-Based analysis technique factoring in various unobservable inputs.

47
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

(c) 
Weighted average not applicable as this asset category contains one investment.
(d) 
The remaining $13.7 million of senior secured second lien debt was valued using a Scenario-Based analysis technique factoring in various unobservable inputs.
(e) 
The remaining $18.0 million of subordinated debt was valued using a Scenario-Based analysis technique factoring in various unobservable inputs.
(f) 
The remaining $45.8 million of equity/other investments was valued using the Current Method.
There were no significant changes in valuation approach or technique as of December 31, 2018.
Increases or decreases in any of the above unobservable inputs in isolation would result in a lower or higher fair value measurement for such assets.
As of September 30, 2019, the Company had six portfolio companies, which represented eleven investments, on non-accrual status with a total principal amount of $67.9 million, amortized cost of $45.4 million, and fair value of $12.6 million which represented 2.1%, 1.7%, and 0.5% of the investment portfolio's total principal, amortized cost, and fair value, respectively. As of December 31, 2018, the Company had eight portfolio companies, which represented fourteen portfolio investments, on non-accrual status with a total principal amount of $171.4 million, amortized cost of $117.4 million, and fair value of $43.8 million, which represented 5.7%, 4.7%, and 1.9% of the investment portfolio's total principal, amortized cost, and fair value, respectively. Refer to Note 2 - Summary of Significant Accounting Policies - for additional details regarding the Company’s non-accrual policy.
Note 4 — Related Party Transactions and Arrangements
Investment Advisory Agreement
Pursuant to the Investment Advisory Agreement and for the investment advisory and management services provided thereunder, the Company pays the Adviser a base management fee and an incentive fee.
Prior to February 1, 2019, the Company's Adviser provided investment advisory and management services under the investment advisory and management services agreement, effective November 1, 2016 (the “Prior Investment Advisory Agreement”), and most recently re-approved by the Board in August 2018. The terms of the Prior Investment Advisory Agreement were materially identical to the Investment Advisory Agreement. The Prior Investment Advisory Agreement automatically terminated on February 1, 2019 upon the indirect change of control of the Adviser on the consummation of Franklin Resources, Inc.’s (“FRI”) and Templeton International, Inc.’s (collectively with FRI, “Franklin Templeton”) acquisition of BSP (the “FT Transaction”). The Investment Advisory Agreement was approved by the Board, including a majority of independent directors, on October 22, 2018, and by stockholders at a special meeting held on January 11, 2019 and took effect February 1, 2019.
Base Management Fee
The base management fee is calculated at an annual rate of 1.5% of the Company’s average gross assets. The Company's gross assets increase or decrease with any appreciation or depreciation associated with a derivative contract. Average gross assets is calculated based on the average value of the Company’s gross assets at the end of the two most recently completed calendar quarters. The base management fee is payable quarterly in arrears and is appropriately pro-rated for any partial month or quarter. All or any part of the base management fee not taken as to any quarter may be deferred without interest and may be taken in such other quarter as the Adviser will determine within three years.
As of September 30, 2019 and December 31, 2018, $10.3 million and $9.7 million was payable to the Adviser for base management fees, respectively.
For the three and nine months ended September 30, 2019, the Company incurred $10.3 million and $29.7 million, respectively, in base management fees under the Investment Advisory Agreement. For the three and nine months ended September 30, 2018, the Company incurred $10.1 million and $30.1 million, respectively, in base management fees under the Investment Advisory Agreement.

48
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

Incentive Fees
The incentive fee consists of two parts. The first part is referred to as the incentive fee on income and it is calculated and payable quarterly in arrears based on the Company’s “Pre-Incentive Fee Net Investment Income” for the immediately preceding quarter. “Pre-Incentive Fee Net Investment Income” means interest income, dividend income, and any other income (including any other fees, other than fees for providing managerial assistance, such as commitment, origination, structuring, diligence, and consulting fees or other fees that the Company receives 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 administration agreement and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as original issue discount debt instruments with payment-in-kind interest and zero coupon securities), accrued income that the Company has not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains or losses or unrealized capital appreciation or depreciation. The payment of the incentive fee on income shall be subject to payment of a preferred return to investors each quarter, expressed as a quarterly rate of return on the value of the Company's net assets at the end of the most recently completed calendar quarter, of 1.75% (7.00% annualized), subject to a “catch up” feature (as described below). The calculation of the incentive fee on income for each quarter is as follows:
•
No incentive fee on income shall be payable to the Adviser in any calendar quarter in which the Company’s Pre-Incentive Fee Net Investment Income does not exceed the preferred return rate of 1.75% or 7.00% annualized (the “Preferred Return”) on net assets;
•
100% of the Company’s Pre-Incentive Fee Net Investment Income, if any, that exceeds the preferred return but is less than or equal to 2.1875% in any calendar quarter (8.75% annualized) shall be payable to the Adviser. This portion of the Company’s incentive fee on income is referred to as the “catch up” and is intended to provide the Adviser with an incentive fee of 20% on all of the Company’s Pre-Incentive Fee Net Investment Income when the Company’s Pre-Incentive Fee Net Investment Income reaches 2.1875% (8.75% annualized) in any calendar quarter; and
•
For any quarter in which the Company's Pre-Incentive Fee Net Investment Income exceeds 2.1875% (8.75% annualized), the incentive fee on income shall equal 20% of the amount of the Company’s Pre-Incentive Fee Net Investment Income, as the Preferred Return and catch-up will have been achieved.
As of September 30, 2019 and December 31, 2018, $7.0 million and $5.7 million was payable to the Adviser for the incentive fee on income, respectively.
For the three and nine months ended September 30, 2019, the Company incurred $7.0 million and $20.5 million, respectively, in incentive fees on income under the Investment Advisory Agreement. For the three and nine months ended September 30, 2018, the Company incurred $6.5 million and $16.0 million, respectively, in incentive fees on income under the Investment Advisory Agreement.
The second part of the incentive fee, referred to as the “incentive fee on capital gains during operations,” shall be an incentive fee on capital gains earned on liquidated investments from the portfolio during operations prior to the Company’s liquidation and shall be determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, if earlier). This fee shall equal 20.0% of the Company’s incentive fee capital gains, which shall equal the Company’s realized capital gains on a cumulative basis from inception, calculated as of the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees. For the three and nine months ended September 30, 2019 and 2018, the Company did not incur incentive fees on capital gains during operations under the Investment Advisory Agreement.
Administration Agreement
In connection with the Administration Agreement, BSP provides the Company with office facilities and administrative services. As of September 30, 2019 and December 31, 2018, $0.6 million and $0.7 million was payable to BSP under the Administration Agreement, respectively.
For the three and nine months ended September 30, 2019, the Company incurred $0.6 million and $1.8 million, respectively, in administrative service fees under the Administration Agreement. For the three and nine months ended September 30, 2018, the Company incurred $0.6 million and $1.8 million, respectively, in administrative service fees under the Administration Agreement.

49
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

Co-Investment Relief
The 1940 Act generally prohibits BDCs from entering into negotiated co-investments with affiliates absent an order from the SEC. The SEC staff has granted the Company exemptive relief that allows it to enter into certain negotiated co-investment transactions alongside with other funds managed by the Adviser or its affiliates (“Affiliated Funds”) in a manner consistent with its 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 its affiliates if a “required majority” (as defined in Section 57(o) of the 1940 Act) of its eligible 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 the Company's stockholders and do not involve overreaching in respect of the Company or the Company's 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 the Company’s investment objective and strategies.    
Triangle Transaction
On April 3, 2018, BSP, through the Acquisition Entity, entered into the APA with Triangle under which certain funds advised by BSP agreed to acquire the Triangle Portfolio for $981.2 million in cash, as adjusted in accordance with the terms of the APA. The Adviser is an affiliate of BSP, and the Company participated in the Triangle Transaction by purchasing a portion of the Triangle Portfolio, facilitated through the Acquisition Entity.
On July 31, 2018, BSP completed the Triangle Transaction. The gross cash proceeds paid to Triangle were approximately $793.3 million, after adjustments to take into account portfolio activity and other matters occurring since December 31, 2017. In accordance with BSP’s allocation policy, the Company acquired approximately 24% of the assets in the Triangle Portfolio for an aggregate purchase price of $188.1 million. The final allocation of the investments in the Triangle Portfolio by BSP was based on a number of factors, including, among others, the Company’s available capital at the time of allocation, changes in the composition of the Triangle Portfolio between the signing of the APA and the closing of the Triangle Transaction, the suitability of the investments in Triangle’s Portfolio for the Company as compared to the other funds managed by BSP, regulatory guidance regarding the allocation of certain Triangle Portfolio assets between funds managed by BSP, and changes in the relative size of the funds managed by BSP.
Private Placement in connection with FT Transaction
In connection with the FT Transaction, on November 1, 2018, the Company issued approximately 6.1 million and 4.9 million shares of the Company's common stock to FRI and BSP, respectively, at a purchase price of $8.20 per share in a private placement in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”).
Offering Costs
The Company incurs certain costs in connection with the registration of shares of its common stock. Offering costs principally relate to professional fees, printing costs, direct marketing expenses, due diligence costs, fees paid to regulators, and other expenses, including the salaries and/or expenses of the Adviser and its affiliates engaged in registering and marketing the Company’s common stock. Such allocated expenses of the Adviser and its affiliates may include the development of marketing materials and presentations, training and educational meetings, and generally coordinating the marketing process for the Company. The Company incurred no offering costs for the three and nine months ended September 30, 2019 and 2018, respectively.
Other Affiliated Parties
The Adviser is the investment adviser of BDCA. The Adviser is an affiliate of BSP, an SEC registered investment adviser. The Adviser and BSP are under common control. Prior to the consummation of the FT Transaction on February 1, 2019, the Adviser was affiliated and under common control with Providence Equity Capital Markets L.L.C. (“PECM”), an SEC registered investment adviser on the BSP platform. The Adviser was affiliated and under common control with Providence Equity Partners L.L.C. (“PEP”), an SEC registered investment adviser. PEP is a global private equity investment adviser and maintained an information barrier between itself and the Adviser, BSP and PECM. The Adviser was affiliated and under common control with Merganser Capital Management, LLC (“Merganser”), an SEC registered investment adviser. BSP, the Adviser, PECM, Merganser and PEP’s respective Form ADV’s are publicly available for review on the SEC Investment Adviser Public Disclosure website.

50
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

Note 5 — Borrowings
Wells Fargo Credit Facility
On July 24, 2012, the Company, through a wholly-owned, consolidated special purpose financing subsidiary, Funding I, entered into a revolving credit facility with Wells Fargo and U.S. Bank as collateral agent, account bank, and collateral custodian (as amended from time to time, the “Wells Fargo Credit Facility”). The Wells Fargo Credit Facility, which has been amended from time to time, was last amended on March 15, 2019 and provides for borrowings in an aggregate principal amount of up to $600.0 million on a committed basis. The Wells Fargo Credit Facility has a maturity date of May 9, 2023.
The Wells Fargo Credit Facility is priced at the one-month maturity LIBOR, with no LIBOR floor, plus a spread ranging between 1.65% and 2.50% per annum, depending on the composition of the portfolio of loans owned by Funding I for the relevant period. Interest is payable quarterly in arrears. Funding I is subject to a non-usage fee to the extent the aggregate principal amount available under the Wells Fargo Credit Facility has not been borrowed. The non-usage fee for the three months from the most recent amendment is 0.50% on any principal amount unused. After the three months from the most recent amendment, the non-usage fee per annum is 0.50% for the first 25% of the unused balance and 2.0% for the portion of the unused balance that exceeds 25%.
Borrowings under the Wells Fargo Credit Facility are subject to compliance with a borrowing base, pursuant to which the amount of funds advanced to Funding I varies depending upon the types of loans in Funding I's portfolio. The Wells Fargo Credit Facility may be prepaid in whole or in part, subject to customary breakage costs.
The Wells Fargo Credit Facility contains customary default provisions for facilities of this type pursuant to which Wells Fargo may terminate the rights, obligations, power, and authority of the Company, in its capacity as servicer of the portfolio assets under the Wells Fargo Credit Facility, including, but not limited to, non-performance of Wells Fargo Credit Facility obligations, insolvency, defaults of certain financial covenants, and other events with respect to the Company that may be adverse to Wells Fargo and the secured parties under the Wells Fargo Credit Facility.
In connection with the Wells Fargo Credit Facility, Funding I has made certain representations and warranties, is required to comply with various covenants, reporting requirements, and other customary requirements for similar facilities and is subject to certain customary events of default. Upon the occurrence and during the continuation of an event of default, Wells Fargo may declare the outstanding advances and all other obligations under the Wells Fargo Credit Facility immediately due and payable. During the continuation of an event of default, Funding I must pay interest at a default rate.
On April 6, 2018, the Company borrowed $90.6 million under the Wells Fargo Credit Facility and used such proceeds, together with cash on hand, to repay at maturity the debt financing facility that it had entered into with UBS AG, London Branch through a wholly-owned special-purpose, bankruptcy-remote subsidiary, BDCA Helvetica Funding, Ltd.
Citi Credit Facility
On June 27, 2014, the Company, through a wholly-owned, special purpose financing subsidiary, CB Funding, entered into a credit facility (as amended from time to time, the “Citi Credit Facility”) with Citibank, N.A. ("Citi") as administrative agent and U.S. Bank as collateral agent, account bank, and collateral custodian. The Citi Credit Facility, which was subsequently amended on October 14, 2015, provides for borrowings in an aggregate principal amount of up to $400.0 million on a committed basis, subject to the administrative agent’s right to approve the assets acquired by CB Funding and pledged as collateral under the Citi Credit Facility. On June 27, 2019, the Company, through a wholly-owned, consolidated special purpose financing subsidiary, BDCA-CB Funding LLC, entered into an amendment (the "Amendment") to its Credit and Security Agreement with Citibank, N.A., dated as of June 27, 2014 (as amended from time to time, the "Credit Agreement"). The Amendment, among other things, (i) extends the end of the reinvestment period from July 1, 2019 to May 31, 2021 and (ii) extends the maturity date of the Credit Agreement from May 28, 2020 to May 31, 2022.
The Citi Credit Facility is priced at three-month LIBOR, with no LIBOR floor, plus a spread of 1.60% per annum through and including the last day of the investment period and 2.00% per annum thereafter. Interest is payable quarterly in arrears. CB Funding is subject to a non-usage fee to the extent the aggregate principal amount available under the Citi Credit Facility has not been borrowed. The non-usage fee per annum is 0.50%. Any amounts borrowed under the Citi Credit Facility along with any accrued and unpaid interest thereunder will mature, and will be due and payable, in three years.

51
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

UBS Credit Facility
On April 7, 2015, the Company, through a wholly-owned, special-purpose, bankruptcy-remote subsidiary, Helvetica Funding, entered into a debt financing facility with UBS AG, London Branch (“UBS”), pursuant to which $150.0 million was made available to the Company to fund investments in new securities and for other general corporate purposes (as amended from time to time, the “UBS Credit Facility”). The UBS Credit Facility was subsequently amended on July 10, 2015 to increase the amount of debt available to the Company under the facility from $150.0 million to $210.0 million. On June 6, 2016, the UBS Credit Facility was again amended to increase the amount of debt available from $210.0 million to $232.5 million. In addition, the amended facility increased the applicable spread over a three-month LIBOR from 3.90% to 4.05% per annum for the relevant period and increased the permissible percentage of second lien loans from 60% to 70%. Pricing under the UBS Credit Facility was based on three-month LIBOR plus a spread of 4.05% per annum for the relevant period. The maturity date of the UBS Credit Facility was April 7, 2018.
On April 6, 2018, the Company repaid the UBS Credit Facility and all related liens were released.
2020 Notes
On August 26, 2015, the Company entered into a Purchase Agreement with Sandler O’Neill & Partners, L.P (the “Initial Purchaser”), relating to the Company’s sale of $100.0 million aggregate principal amount of its 6.00% fixed rate senior notes due 2020 (the “2020 Notes”) to the Initial Purchaser in a private placement in reliance on Section 4(a)(2) of the Securities Act and for initial resale by the Initial Purchaser to qualified institutional buyers pursuant to the exemption from registration provided by Rule 144A promulgated under the Securities Act . The Company relied upon these exemptions from registration based in part on representations made by the Initial Purchaser. The Purchase Agreement includes customary representations, warranties, and covenants by the Company. Under the terms of the Purchase Agreement, the Company has agreed to indemnify the Initial Purchaser against certain liabilities under the Securities Act. The 2020 Notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The net proceeds from the sale of the 2020 Notes was approximately $97.9 million, after deducting Initial Purchaser's discounts and commissions of approximately $1.6 million payable by the Company and estimated offering expenses of approximately $0.5 million payable by the Company. The Company used the net proceeds to make investments in accordance with the Company’s investment objectives and for general corporate purposes.
The 2020 Notes were issued pursuant to an Indenture, dated as of August 31, 2015 (the “Indenture”), between the Company and U.S. Bank National Association, trustee (the “Trustee”). The 2020 Notes will mature on September 1, 2020 and may be redeemed in whole or in part at the Company’s option at any time, or from time to time, at the redemption prices set forth in the Indenture. The 2020 Notes bear interest at a rate of 6.00% per year payable semi-annually on March 1 and September 1 of each year, commencing on March 1, 2016. The 2020 Notes will be general unsecured obligations of the Company that rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the 2020 Notes. The 2020 Notes will rank equally in right of payment with all of the Company’s existing and future senior liabilities that are not so subordinated, effectively junior to any of the Company’s secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and structurally junior to all existing and future indebtedness incurred by the Company’s subsidiaries, financing vehicles or similar facilities, including credit facilities held by the Company’s wholly owned, special purpose financing subsidiaries.
The Indenture contains certain covenants, including covenants requiring the Company to: (i) comply with the asset coverage requirements of Section 18(a)(1)(A) as modified by Section 61(a)(1) of the 1940 Act as in effect immediately prior to the issuance of the 2020 Notes, whether or not the Company is subject to such provisions; (ii) provide financial information to the holders of the 2020 Notes and the Trustee if the Company is no longer subject to the reporting requirements under the Securities Exchange Act of 1934, as amended; and (iii) maintain total unencumbered assets, as defined in the Indenture, of at least 175% of the aggregate principal amount of all of the Company and the Company’s consolidated subsidiaries’ outstanding unsecured debt determined on a consolidated basis in accordance with U.S. GAAP. These covenants are subject to important limitations and exceptions that are described in the Indenture.

52
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

2022 Notes
On December 14, 2017, the Company entered into a Purchase Agreement (the “2022 Notes Purchase Agreement”) with the Initial Purchaser relating to the Company's sale of $150.0 million aggregate principal amount of its 4.75% fixed rate notes due 2022 (the “2022 Notes”) to the Initial Purchaser in a private placement in reliance on Section 4(a)(2) of the Securities Act and for initial resale by the Initial Purchaser to qualified institutional buyers pursuant to the exemption from registration provided by Rule 144A promulgated under the Securities Act and to institutional accredited investors under Rule 501(a)(1), (2), (3), or (7) under the Securities Act. The Company relied upon these exemptions from registration based in part on representations made by the Initial Purchaser. The 2022 Notes Purchase Agreement also includes customary representations, warranties, and covenants by the Company. Under the terms of the 2022 Notes Purchase Agreement, the Company has agreed to indemnify the Initial Purchaser against certain liabilities under the Securities Act. The 2022 Notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration. The net proceeds from the sale of the 2022 Notes was approximately $147.0 million, after deducting an offering price discount of approximately $0.8 million, as well as Initial Purchaser’s discounts and commissions of approximately $1.7 million and offering expenses of approximately $0.6 million, each payable by the Company. The Company used the net proceeds to repay outstanding indebtedness, to make investments in portfolio companies in accordance with its investment objectives, and for general corporate purposes.
The 2022 Notes were issued pursuant to the Indenture dated as of December 19, 2017, between the Company and the Trustee, and a Supplemental Indenture, dated as of December 19, 2017 (the “Supplemental Indenture”), between the Company and the Trustee. The 2022 Notes will mature on December 30, 2022, unless repurchased or redeemed in accordance with their terms prior to such date. The 2022 Notes bear interest at a rate of 4.75% per year payable semi-annually on June 30 and December 30 of each year, commencing on June 30, 2018. The 2022 Notes will be general unsecured obligations of the Company that rank senior in right of payment to all of the Company's existing and future indebtedness that is expressly subordinated in right of payment to the 2022 Notes. The 2022 Notes will rank equally in right of payment with all of the Company's existing and future senior liabilities that are not so subordinated, effectively junior to any of the Company's secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and structurally junior to all existing and future indebtedness incurred by the Company's subsidiaries, financing vehicles, or similar facilities, including credit facilities entered into by the Company's wholly owned, special purpose financing subsidiaries.
The Indenture contains certain covenants, including covenants requiring the Company to (i) comply with the asset coverage requirements of the 1940 Act, whether or not it is subject to those requirements, and (ii) provide financial information to the holders of the 2022 Notes and the Trustee if the Company is no longer subject to the reporting requirements under the Securities Exchange Act of 1934, as amended. These covenants are subject to important limitations and exceptions that are described in the Indenture.
In addition, if a change of control repurchase event, as defined in the Indenture, occurs prior to maturity, holders of the 2022 Notes will have the right, at their option, to require the Company to repurchase for cash some or all of the 2022 Notes at a repurchase price equal to 100% of the principal amount of the 2022 Notes being repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date.

53
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

2023 Notes
On May 11, 2018, the Company entered into a Purchase Agreement (the “2023 Notes Purchase Agreement”) with the Initial Purchaser relating to the Company’s sale of $60.0 million aggregate principal amount of its 5.375% fixed rate notes due 2023 (the “2023 Notes”) to the Initial Purchaser in a private placement in reliance on Section 4(a)(2) of the Securities Act of 1933, and for initial resale by the Initial Purchaser to qualified institutional buyers pursuant to the exemption from registration provided by Rule 144A promulgated under the Securities Act and to institutional accredited investors under Rule 501 (a)(1), (2), (3), or (7) under the Securities Act. The Company relied upon these exemptions from registration based in part on representations made by the Initial Purchaser. The 2023 Notes Purchase Agreement also includes customary representations, warranties, and covenants by the Company. Under the terms of the 2023 Notes Purchase Agreement, the Company has agreed to indemnify the Initial Purchaser against certain liabilities under the Securities Act. The 2023 Notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration. The net proceeds from the sale of the 2023 Notes were approximately $58.7 million, after deducting an offering price discount of approximately $0.3 million, as well as Initial Purchaser’s discounts and commissions of approximately $0.6 million and estimated offering expenses of approximately $0.4 million, each payable by the Company. The Company used the net proceeds to repay outstanding indebtedness, to make investments in portfolio companies in accordance with its investment objectives, and for general corporate purposes. The 2023 Notes were issued pursuant to the Indenture between the Company and The Trustee, and a Second Supplemental Indenture, dated as of May 16, 2018, between the Company and the Trustee. The 2023 Notes will mature on May 30, 2023, unless repurchased or redeemed in accordance with their terms prior to such date. The 2023 Notes bear interest at a rate of 5.375% per year payable semi-annually on May 30 and November 30 of each year, commencing on November 30, 2018. The 2023 Notes will be general unsecured obligations of the Company that rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the 2023 Notes. The 2023 Notes will rank equally in right of payment with all of the Company’s existing and future senior liabilities that are not so subordinated, effectively junior to any of the Company’s secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and structurally junior to all existing and future indebtedness incurred by the Company’s subsidiaries, financing vehicles, or similar facilities, including credit facilities entered into by the Company’s wholly owned, special purpose financing subsidiaries. The Indenture contains certain covenants, including covenants requiring the Company to (i) comply with the asset coverage requirements of the 1940 Act, whether or not it is subject to those requirements, and (ii) provide financial information to the holders of the 2023 Notes and the Trustee if the Company is no longer subject to the reporting requirements under the Securities Exchange Act of 1934, as amended. These covenants are subject to important limitations and exceptions that are described in the Indenture. In addition, if a change of control repurchase event, as defined in the Indenture, occurs prior to maturity, holders of the 2023 Notes will have the right, at their option, to require the Company to repurchase for cash some or all of the 2023 Notes at a repurchase price equal to 100% of the principal amount of the 2023 Notes being repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date.
JP Morgan Securities LLC Prime Brokerage Account
On January 20, 2017, the Company entered into a prime brokerage account agreement with JP Morgan Securities LLC (the “JPMC PB Account”). The JPMC PB Account provided a full suite of services around the custody of bonds and equities and also access to leverage, which is dependent on the price, credit quality, and diversity of the pool of assets held within the account. The borrowing availability is recalculated daily based on changes to the assets, with margin calls issued in the morning as appropriate. The cost to borrow is 1 week LIBOR + 90 bps and there is no mandatory usage or period wherein the debt needs to be repaid.
On May 8, 2018 the Company fully repaid its borrowings under the JPMC PB Account and closed the account.
The weighted average annualized interest cost for all borrowings for the nine months ended September 30, 2019 and 2018 was 4.67% and 4.45%, respectively. The average daily debt outstanding for the nine months ended September 30, 2019 and 2018 was $1.0 billion and $1.3 billion, respectively. The maximum debt outstanding for the nine months ended September 30, 2019 and 2018 was $1.2 billion and $1.5 billion, respectively.

54
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

The following table represents borrowings as of September 30, 2019:
 
 
Maturity Date
 
Total Aggregate Borrowing Capacity
 
Total Principal Outstanding
 
Less Deferred Financing Costs
 
Amount per Consolidated Statements of Assets and Liabilities
Wells Fargo Credit Facility
 
5/9/2023
 
$
600,000

 
$
494,652

 
$
(7,232
)
 
$
487,420

Citi Credit Facility
 
5/31/2022
 
400,000

 
330,500

 
(2,500
)
 
328,000

2023 Notes
 
5/30/2023
 
60,000

 
59,761

 
(691
)
 
59,070

2022 Notes
 
12/30/2022
 
150,000

 
149,463

 
(1,482
)
 
147,981

2020 Notes
 
9/1/2020
 
100,000

 
99,710

 
(116
)
 
99,594

Totals
 
 
 
$
1,310,000

 
$
1,134,086

 
$
(12,021
)
 
$
1,122,065

    
The following table represents borrowings as of December 31, 2018:
 
 
Maturity Date
 
Total Aggregate Borrowing Capacity
 
Total Principal Outstanding
 
Less Deferred Financing Costs
 
Amount per Consolidated Statements of Assets and Liabilities
Wells Fargo Credit Facility
 
5/9/2023
 
$
545,000

 
$
294,651

 
$
(8,163
)
 
$
286,488

Citi Credit Facility
 
5/28/2020
 
400,000

 
293,500

 
(1,127
)
 
292,373

2023 Notes
 
5/30/2023
 
60,000

 
59,713

 
(833
)
 
58,880

2022 Notes
 
12/30/2022
 
150,000

 
149,340

 
(1,824
)
 
147,516

2020 Notes
 
9/1/2020
 
100,000

 
99,474

 
(209
)
 
99,265

Totals
 
 
 
$
1,255,000

 
$
896,678

 
$
(12,156
)
 
$
884,522


The following table represents interest and debt fees for the three and nine months ended September 30, 2019:
 
Three months ended September 30, 2019
 
Nine months ended September 30, 2019
 
Interest Rate
 
Non-Usage Rate
 
Interest Expense
 
Deferred Financing Costs (3)
 
Other Fees (4)
 
Interest Rate
 
Non-Usage Rate
 
Interest Expense
 
Deferred Financing Costs (3)
 
Other Fees (4)
Wells Fargo Credit Facility
(1) 
 
(2) 
 
$
5,193

 
$
494

 
$
214

 
(1) 
 
(2) 
 
$
14,678

 
$
1,461

 
$
952

Citi Credit Facility
L+1.60%
 
0.50%
 
3,454

 
230

 
98

 
L+1.60%
 
0.50%
 
10,133

 
629

 
366

2023 Notes
5.38%
 
n/a
 
823

 
47

 
9

 
5.38%
 
n/a
 
2,467

 
141

 
9

2022 Notes
4.75%
 
n/a
 
1,823

 
115

 
2

 
4.75%
 
n/a
 
5,467

 
341

 
7

2020 Notes
6.00%
 
n/a
 
1,596

 
32

 
1

 
6.00%
 
n/a
 
4,753

 
94

 
7

Totals
 
 
 
 
$
12,889

 
$
918

 
$
324

 
 
 
 
 
$
37,498

 
$
2,666

 
$
1,341

______________
(1) Interest rate is priced at one month's LIBOR with no LIBOR floor, plus a spread ranging between 1.65% and 2.50% per annum, depending on the composition of the portfolio of loans owned.

55
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

(2) The non-usage fee for the three months from the most recent amendment (March 15, 2019) is 0.50% on any principal amount unused. After the three months from the most recent amendment, the non-usage fee per annum is 0.50% for the first 25% of the unused balance and 2.0% for the portion of the unused balance that exceeds 25%.
(3) Amortization of deferred financing costs.
(4) Includes non-usage fees and custody fees.
The following table represents interest and debt fees for the three and nine months ended September 30, 2018:
 
Three months ended September 30, 2018
 
Nine months ended September 30, 2018
 
Interest Rate
 
Non-Usage Rate
 
Interest Expense
 
Deferred Financing Costs (3)
 
Other Fees (4)
 
Interest Rate
 
Non-Usage Rate
 
Interest Expense
 
Deferred Financing Costs (3)
 
Other Fees (4)
Wells Fargo Credit Facility
(1) 
 
(2) 
 
$
4,910

 
$
437

 
$
120

 
(1) 
 
(2) 
 
$
11,619

 
$
1,197

 
$
785

Citi Credit Facility
L+1.60%
 
0.50%
 
3,719

 
202

 
42

 
L+1.60%
 
0.50%
 
10,323

 
597

 
192

UBS Credit Facility
n/a
 
n/a
 
—

 
—

 
11

 
L+4.05%
 
n/a
 
3,696

 
110

 
57

2023 Notes
5.38%
 
n/a
 
823

 
47

 
—

 
5.38%
 
n/a
 
1,234

 
67

 
—

2022 Notes
4.75%
 
n/a
 
1,823

 
115

 
2

 
4.75%
 
n/a
 
5,467

 
341

 
10

2020 Notes
6.00%
 
n/a
 
1,579

 
32

 
—

 
6.00%
 
n/a
 
4,736

 
94

 
—

JPMC PB Account
n/a
 
n/a
 
—

 
—

 
—

 
L+0.90%
 
n/a
 
570

 
—

 
—

Totals
 
 
 
 
$
12,854

 
$
833

 
$
175

 
 
 
 
 
$
37,645

 
$
2,406

 
$
1,044

_____________
(1) Interest rate is priced at one month's LIBOR with no LIBOR floor, plus a spread ranging between 1.65% and 2.50% per annum, depending on the composition of the portfolio of loans owned.
(2) The non-usage fee per annum is 0.50% for the first 25% of the unused balance and 2.0% for the portion of the unused balance that exceeds 25%.
(3) Amortization of deferred financing costs.
(4) Includes non-usage fees, custody fees, and trustee fees.    
The Company is required to disclose the fair value of financial instruments for which it is practicable to estimate fair value. The fair value of short-term financial instruments such as cash and cash equivalents, due to affiliates, and accounts payable approximate their carrying value on the accompanying consolidated statements of assets and liabilities due to their short-term nature. The fair value of the Company's 2020 Notes, 2022 Notes, and 2023 Notes are derived from market indications provided by Bloomberg Finance L.P. at September 30, 2019. The fair value of the Company's 2020 Notes, 2022 Notes, and 2023 Notes are derived from market indications provided by Bloomberg Finance L.P. at December 31, 2018.
At September 30, 2019, the carrying amount of the Company's secured borrowings approximated their fair value. The fair values of the Company's debt obligations 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 borrowings is estimated based upon market interest rates for the Company's own borrowings or entities with similar credit risk, adjusted for nonperformance risk, if any. As of September 30, 2019 and December 31, 2018, the Company's borrowings would be deemed to be Level 3, as defined in Note 3 - Fair Value of Financial Instruments.

56
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

The fair values of the Company’s remaining financial instruments that are not reported at fair value on the accompanying consolidated statements of assets and liabilities are reported below (amounts in thousands):
 
Level
 
Carrying Amount at September 30, 2019
 
Fair Value at
September 30, 2019
Wells Fargo Credit Facility
3
 
$
494,652

 
$
494,652

Citi Credit Facility
3
 
330,500

 
330,500

2023 Notes
3
 
59,761

 
61,321

2022 Notes
3
 
149,463

 
153,419

2020 Notes
3
 
99,710

 
102,329

 
 
 
$
1,134,086

 
$
1,142,221

 
Level
 
Carrying Amount at December 31, 2018
 
Fair Value at
December 31, 2018
Wells Fargo Credit Facility
3
 
$
294,651

 
$
294,651

Citi Credit Facility
3
 
293,500

 
293,500

2023 Notes
3
 
59,713

 
59,820

2022 Notes
3
 
149,340

 
147,717

2020 Notes
3
 
99,474

 
102,287

 
 
 
$
896,678

 
$
897,975


Note 6 — Derivatives
Foreign Currency
The Company may enter into forward foreign currency contracts from time to time to facilitate settlement of purchases and sales of investments denominated in foreign currencies or to help mitigate the impact that an adverse change in foreign exchange rates would have on the value of the Company's investments denominated in foreign currencies. A forward foreign currency contract is a commitment to purchase or sell a foreign currency at a future date (usually the security transaction settlement date) at a negotiated forward rate. These contracts are marked-to-market by recognizing the difference between the contract exchange rate and the current market rate as unrealized appreciation or depreciation. Realized gains or losses are recognized when contracts are settled. The Company's forward foreign currency contracts generally have terms of approximately three months. The volume of open contracts at the end of each reporting period is reflective of the typical volume of transactions during each calendar quarter. Risks may arise as a result of the potential inability of the counterparties to meet the terms of their contracts. The Company attempts to limit this risk by dealing with creditworthy counterparties.
At September 30, 2019, the forward foreign currency contract was classified within Level 2 of the fair value hierarchy. The derivative held at period end was not subject to a master netting arrangement or other similar agreement.
Note 7 — Commitments and Contingencies
Commitments
In the ordinary course of business, the Company may enter into future funding commitments. As of September 30, 2019, the Company had unfunded commitments on delayed draw term loans of $26.3 million (including $22.2 million of non-discretionary commitments and $4.1 million of discretionary commitments), unfunded commitments on revolver term loans of $29.0 million, unfunded commitments on bridge loans of $11.5 million, unfunded commitments on letter of credit facilities of $10.1 million, and unfunded equity capital discretionary commitments of $29.3 million. As of December 31, 2018, the Company had unfunded commitments on delayed draw term loans of $15.2 million, unfunded commitments on revolver term loans of $21.1 million, and unfunded equity capital commitments of $0.5 million. The Company maintains sufficient cash on hand and available borrowings to fund such unfunded commitments.



57
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

As of September 30, 2019 the Company's unfunded commitments consisted of the following:
September 30, 2019
(Unaudited)
Portfolio Company Name
 
Investment Type
 
Commitment Type
 
Total Commitment
 
Remaining Commitment
Allied Universal Security Services, LLC
 
Senior Secured First Lien Debt
 
Delayed draw term loan
 
$
601

 
$
601

AMI Entertainment Network, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
1,234

 
1,234

Arch Global Precision, LLC
 
Senior Secured First Lien Debt
 
Delayed draw term loan
 
2,268

 
2,268

Arch Global Precision, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
1,008

 
1,008

Aveanna Healthcare, LLC (1)
 
Senior Secured First Lien Debt
 
Bridge loan
 
11,480

 
11,480

CCW, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
1,500

 
200

CDHA Holdings, LLC
 
Senior Secured First Lien Debt
 
Delayed draw term loan
 
7,582

 
7,027

CDHA Holdings, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
1,264

 
834

Cold Spring Brewing, Co.
 
Senior Secured First Lien Debt
 
Revolver term loan
 
238

 
238

Corfin Industries, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
956

 
956

CRS-SPV, Inc.
 
Senior Secured First Lien Debt
 
Revolver term loan
 
224

 
162

Deva Holdings, Inc.
 
Senior Secured First Lien Debt
 
Revolver term loan
 
559

 
559

Florida Food Products, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
1,647

 
231

ICR Operations, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
2,753

 
2,655

Ideal Tridon Holdings, Inc.
 
Senior Secured First Lien Debt
 
Delayed draw term loan
 
80

 
34

Ideal Tridon Holdings, Inc.
 
Senior Secured First Lien Debt
 
Revolver term loan
 
2,810

 
2,649

Integral Ad Science, Inc.
 
Senior Secured First Lien Debt
 
Revolver term loan
 
1,085

 
1,085

Lakeview Health Holdings, Inc.
 
Senior Secured First Lien Debt
 
Revolver term loan
 
310

 
186

McDermott International, Inc.
 
Senior Secured First Lien Debt
 
Letter of credit facility
 
10,053

 
10,053

MED Parentco, LP
 
Senior Secured First Lien Debt
 
Delayed draw term loan
 
1,438

 
1,438

Midwest Can Company, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
547

 
469

Miller Environmental Group, Inc.
 
Senior Secured First Lien Debt
 
Delayed draw term loan
 
2,651

 
2,651

Miller Environmental Group, Inc.
 
Senior Secured First Lien Debt
 
Revolver term loan
 
1,324

 
1,324

MMM Holdings, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
1,761

 
1,761

Muth Mirror Systems, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
1,299

 
1,299

New Amsterdam Software Bidco, LLC
 
Senior Secured First Lien Debt
 
Delayed draw term loan
 
1,790

 
1,790

Norvax, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
1,152

 
1,152

ORG Chemical Holdings, LLC
 
Senior Secured First Lien Debt
 
Delayed draw term loan
 
5,202

 
4,099

PT Network, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
1,316

 
1,316

Questex, Inc.
 
Senior Secured First Lien Debt
 
Revolver term loan
 
2,584

 
2,584

Reddy Ice Corp.
 
Senior Secured First Lien Debt
 
Delayed draw term loan
 
2,518

 
2,518

Reddy Ice Corp.
 
Senior Secured First Lien Debt
 
Revolver term loan
 
1,762

 
1,762

Safety Products/JHC Acquisition Corp.
 
Senior Secured First Lien Debt
 
Delayed draw term loan
 
2,171

 
2,171

SitusAMC Holdings Corp.
 
Senior Secured First Lien Debt
 
Delayed draw term loan
 
752

 
752

Subsea Global Solutions, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
963

 
633

Tap Rock Resources, LLC
 
Equity/Other
 
Equity
 
42,100

 
29,297

Tillamook Country Smoker, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
1,618

 
135

University of St. Augustine Acquisition Corp.
 
Senior Secured First Lien Debt
 
Revolver term loan
 
2,615

 
2,615

USF S&H Holdco, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
1,616

 
566

Vantage Mobility International, LLC
 
Senior Secured First Lien Debt
 
Delayed draw term loan
 
196

 
196

WMK, LLC
 
Senior Secured First Lien Debt
 
Delayed draw term loan
 
2,613

 
785

WMK, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
2,618

 
1,396

Total
 
 
 
 
 
$
130,258

 
$
106,169

(1)
The commitment is contingent upon the issuance of the underlying bond. Should the underlying bond be successfully issued, our commitment would be extinguished.

58
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

As of December 31, 2018 the Company's unfunded commitments consisted of the following:
December 31, 2018
Portfolio Company Name
 
Investment Type
 
Commitment Type
 
Total Commitment
 
Remaining Commitment
AccentCare, Inc.
 
Senior Secured First Lien Debt
 
Delayed draw term loan
 
$
4,301

 
$
948

AMI Entertainment Network, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
1,234

 
1,234

Aveanna Healthcare, LLC
 
Senior Secured Second Lien Debt
 
Delayed draw term loan
 
1,373

 
1,373

Capstone Nutrition (fka Integrity Nutraceuticals)
 
Senior Secured First Lien Debt
 
Delayed draw term loan
 
5,089

 
1,804

CCW, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
3,000

 
1,700

CDHA Holdings, LLC
 
Senior Secured First Lien Debt
 
Delayed draw term loan
 
7,583

 
7,583

CDHA Holdings, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
1,264

 
834

Cold Spring Brewing, Co.
 
Senior Secured First Lien Debt
 
Revolver term loan
 
238

 
238

Corfin Industries, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
956

 
382

Dentalcorp Perfect Smile, ULC
 
Senior Secured Second Lien Debt
 
Delayed draw term loan
 
2,028

 
872

Deva Holdings, Inc.
 
Senior Secured First Lien Debt
 
Revolver term loan
 
559

 
559

DLC Acquisition, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
694

 
694

Florida Food Products, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
1,647

 
626

ICR Operations, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
2,753

 
2,642

Ideal Tridon Holdings, Inc.
 
Senior Secured First Lien Debt
 
Revolver term loan
 
2,731

 
710

Integral Ad Science, Inc.
 
Senior Secured First Lien Debt
 
Revolver term loan
 
1,085

 
1,085

Lakeview Health Holdings, Inc.
 
Senior Secured First Lien Debt
 
Revolver term loan
 
310

 
310

Midwest Can Company, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
547

 
547

MMM Holdings, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
1,761

 
1,761

PennantPark Credit Opportunities Fund II, LP
 
Equity/Other
 
Equity
 
10,764

 
538

PT Network, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
1,316

 
658

Questex, Inc.
 
Senior Secured First Lien Debt
 
Revolver term loan
 
2,584

 
2,153

Subsea Global Solutions, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
963

 
748

TwentyEighty, Inc.
 
Senior Secured First Lien Debt
 
Revolver term loan
 
443

 
443

USF S&H Holdco, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
1,616

 
1,131

WMK, LLC
 
Senior Secured First Lien Debt
 
Delayed draw term loan
 
2,618

 
2,618

WMK, LLC
 
Senior Secured First Lien Debt
 
Revolver term loan
 
2,618

 
2,618

Total
 
 
 
 
 
$
62,075

 
$
36,809

Litigation and Regulatory Matters
In the ordinary course of business, the Company may become subject to litigation, claims, and regulatory matters. The Company has no knowledge of material legal or regulatory proceedings pending or known to be contemplated against the Company at this time.
Indemnifications
In the ordinary course of its business, the Company may enter into contracts or agreements that contain indemnifications or warranties. Future events could occur that lead to the execution of these provisions against the Company. Based on its history and experience, management feels that the likelihood of such an event is remote.

59
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

Guarantees
Park Ave RE, Inc. through its wholly-owned subsidiaries (including Park Ave RE Holdings, LLC), is in the business of purchasing commercial properties from owner-operators and leasing the properties back to the original owners under long term leasing arrangements. The Company has provided a non-recourse carveout guarantee to its controlled portfolio company, Park Ave RE Holdings, LLC, in connection with a secured loan. Although the loan is generally non-recourse in nature, the Company will nevertheless be responsible for liabilities of the portfolio company upon the occurrence of certain events deemed carveouts to such non-recourse nature (including fraud or misrepresentation, bankruptcy, misapplication of funds, and distributions or incurrence of additional indebtedness in violation of the terms of the loan). This guarantee no longer exists as of September 30, 2019.
Note 8 — Economic Dependency
Under various agreements, the Company has engaged or will engage the Adviser and its affiliates to provide certain services that are essential to the Company, including asset management services, asset acquisition, and disposition decisions, the sale of shares of the Company’s common stock available for issuance, as well as other administrative responsibilities for the Company including accounting services and investor relations.
As a result of these relationships, the Company is dependent upon the Adviser and its affiliates. In the event that these companies were unable to provide the Company with the respective services, the Company would be required to find alternative providers of these services.
Note 9 — Common Stock
On August 25, 2011, the Company had raised sufficient funds to break escrow on its IPO. On July 1, 2014, the Company's registration statement on Form N-2 (File No.333-193241) for its Follow-on was declared effective by the SEC. Simultaneously with the effectiveness of the registration statement of the Follow-on, the Company's IPO terminated. Through September 30, 2019, the Company issued 214.8 million shares of common stock for gross proceeds of $2.3 billion, including the shares purchased by an affiliate of BSP and shares issued under the Company's DRIP. Following the time the Company's updated registration statement was declared effective on June 30, 2015, the Company issued shares for subscription agreements that had been accepted through that date. From inception of the Company's DRIP plan to September 30, 2019, the Company had repurchased 25.6 million shares of common stock through its share repurchase program for payments of $222.0 million.
The following table reflects the common stock activity for the nine months ended September 30, 2019:
 
 
Shares
 
Value
Shares Sold
 
—

 
$
—

Shares Issued through DRIP
 
3,320,427

 
26,587

Share Repurchases
 
(4,463,525
)
 
(36,073
)
 
 
(1,143,098
)
 
$
(9,486
)
    
The following table reflects the common stock activity for the year ended December 31, 2018:
 
 
Shares
 
Value
Shares Sold
 
10,975,610

 
$
90,000

Shares Issued through DRIP
 
4,720,005

 
38,983

Share Repurchases
 
(5,105,553
)
 
(42,313
)
 
 
10,590,062

 
$
86,670



60
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

The following table reflects the stockholders' equity activity for the nine months ended September 30, 2019:
 
Nine months ended September 30, 2019
 
Common stock - shares
 
Common stock - par
 
Additional paid in capital
 
Total distributable earnings (loss)
 
Net assets attributable to non-controlling interest
 
Total Stockholders' Equity
Balance as of December 31, 2018
190,324,059

 
$
190

 
$
1,811,970

 
$
(323,127
)
 
$
3,686

 
$
1,492,719

Net investment income
—

 
—

 
—

 
27,164

 
2

 
27,166

Net realized loss from investment transactions
—

 
—

 
—

 
(1,911
)
 
—

 
(1,911
)
Net change in unrealized appreciation on investments and foreign exchange currency contracts, net of deferred taxes
—

 
—

 
—

 
30,579

 
1,292

 
31,871

Repurchases
(2,241,001
)
 
(2
)
 
(18,374
)
 
—

 
—

 
(18,376
)
Distributions to stockholders
—

 
—

 
—

 
(30,441
)
 
—

 
(30,441
)
Reinvested dividends
1,087,268

 
1

 
8,915

 
—

 
—

 
8,916

Balance as of March 31, 2019
189,170,326

 
$
189

 
$
1,802,511

 
$
(297,736
)
 
$
4,980

 
$
1,509,944

Net investment income
—

 
—

 
—

 
27,092

 
7

 
27,099

Net realized gain from investment transactions
—

 
—

 
—

 
2,523

 
—

 
2,523

Net change in unrealized appreciation on investments and foreign exchange currency contracts, net of deferred taxes
—

 
—

 
—

 
3,549

 
1,725

 
5,274

Repurchases
(25,215
)
 
—

 
(206
)
 
—

 
—

 
(206
)
Distributions to stockholders
—

 
—

 
—

 
(30,779
)
 
—

 
(30,779
)
Reinvested dividends
1,147,112

 
1

 
9,021

 
—

 
—

 
9,022

Balance as of June 30, 2019
190,292,223

 
$
190

 
$
1,811,326


$
(295,351
)
 
$
6,712

 
$
1,522,877

Net investment income
—

 
—

 
—

 
27,940

 
—

 
27,940

Net realized loss from investment transactions
—

 
—

 
—

 
(38,437
)
 
—

 
(38,437
)
Net change in unrealized depreciation on investments and foreign exchange currency contracts, net of deferred taxes
—

 
—

 
—

 
(1,553
)
 
—

 
(1,553
)
Acquisition of non-controlling interest
—

 
—

 
1,281

 
—

 
(6,712
)
 
(5,431
)
Repurchases
(2,197,309
)
 
(2
)
 
(17,489
)
 
—

 
—

 
(17,491
)
Distributions to stockholders
—

 
—

 
—

 
(31,137
)
 
—

 
(31,137
)
Reinvested dividends
1,086,047

 
1

 
8,648

 
—

 
—

 
8,649

Balance as of September 30, 2019
189,180,961

 
$
189

 
$
1,803,766

 
$
(338,538
)
 
$
—

 
$
1,465,417


61
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

The following table reflects the stockholders' equity activity for the nine months ended September 30, 2018:
 
Nine months ended September 30, 2018
 
Common stock - shares
 
Common stock - par
 
Additional paid in capital
 
Total distributable earnings (loss)
 
Net assets attributable to non-controlling interest
 
Total Stockholders' Equity
Balance as of December 31, 2017
179,733,998

 
$
180

 
$
1,752,793

 
$
(261,278
)
 
$
2,821

 
$
1,494,516

Net investment income (loss)
—

 
—

 
—

 
26,154

 
(5
)
 
26,149

Net realized loss from investment transactions
—

 
—

 
—

 
(34,409
)
 
—

 
(34,409
)
Net change in unrealized appreciation (depreciation) on investments and foreign exchange currency contracts, net of deferred taxes
—

 
—

 
—

 
30,231

 
(314
)
 
29,917

Repurchases
(2,711,841
)
 
(3
)
 
(22,546
)
 
—

 
—

 
(22,549
)
Distributions to stockholders
—

 
—

 
—

 
(28,727
)
 
—

 
(28,727
)
Reinvested dividends
1,223,362

 
1

 
10,166

 
—

 
—

 
10,167

Balance as of March 31, 2018
178,245,519

 
$
178

 
$
1,740,413

 
$
(268,029
)
 
$
2,502

 
$
1,475,064

Net investment income
—

 
—

 
—

 
25,815

 
—

 
25,815

Net realized gain from investment transactions
—

 
—

 
—

 
3,703

 
—

 
3,703

Net change in unrealized depreciation on investments and foreign exchange currency contracts, net of deferred taxes
—

 
—

 
—

 
(11,306
)
 
(16
)
 
(11,322
)
Distributions to stockholders
—

 
—

 
—

 
(29,016
)
 
—

 
(29,016
)
Reinvested dividends
1,203,374

 
1

 
9,971

 
—

 
—

 
9,972

Balance as of June 30, 2018
179,448,893

 
$
179

 
$
1,750,384

 
$
(278,833
)
 
$
2,486

 
$
1,474,216

Net investment income
—

 
—

 
—

 
25,799

 
37

 
25,836

Net realized gain from investment transactions
—

 
—

 
—

 
325

 
—

 
325

Net change in unrealized appreciation on investments, and foreign exchange currency contracts, net of deferred taxes
—

 
—

 
—

 
2,360

 
566

 
2,926

Repurchases
(2,392,535
)
 
(2
)
 
(19,760
)
 
—

 
—

 
(19,762
)
Distributions to stockholders
—

 
—

 
—

 
(29,323
)
 
—

 
(29,323
)
Reinvested dividends
1,168,413

 
1

 
9,627

 
—

 
—

 
9,628

Balance as of September 30, 2018
178,224,771

 
$
178

 
$
1,740,251

 
$
(279,672
)
 
$
3,089

 
$
1,463,846


Note 10 — Share Repurchase Program
The Company intends to conduct semi-annual tender offers pursuant to its share repurchase program (“SRP”). The Company’s board of directors considers the following factors in making its determination regarding whether to cause the Company to offer to repurchase shares and under what terms:
•the effect of such repurchases on the Company's qualification as a RIC (including the consequences of any necessary asset sales);
•the liquidity of the Company's assets (including fees and costs associated with disposing of assets);
•the Company's investment plans and working capital requirements;

62
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

•the relative economies of scale with respect to the Company's size;
•the Company's history in repurchasing shares or portions thereof;
•the condition of the securities markets.
On March 8, 2016, the Company's board of directors amended the Company's SRP. The Company intends to conduct tender offers on a semi-annual basis, instead of on a quarterly basis as was done previously. The Company intends to continue to limit the number of shares to be repurchased in any calendar year to 10% of the weighted average number of shares outstanding in the prior calendar year, or 5.0% at each semi-annual tender offer. In addition, in the event of a stockholder’s death or disability, the Company may, in its sole discretion, accept up to the full amount tendered by such stockholder of the current net asset value per share. Any repurchases of shares made in connection with a stockholder’s death or disability may be included within the overall limitation imposed on tender offers during the relevant redemption period, which provides that the Company may limit the number of shares to be repurchased during any redemption period to the number of shares of common stock the Company is able to repurchase with the proceeds received from the sale of shares of common stock under the DRIP during such redemption period. The Company's seven most recent tender offers were oversubscribed.
Offer Date
 
Repurchase Date
 
Shares Tendered
 
Shares Repurchased
 
Repurchase Price Per Share
 
Aggregate Consideration for Repurchased Shares (in thousands)
September 12, 2012
 
October 8, 2012
 
—

 
—

 
$
9.71

 
$
—

December 13, 2012
 
January 15, 2013
 
46,975

 
10,732

 
$
9.90

 
$
106.22

March 27, 2013
 
April 25, 2013
 
29,625

 
29,625

 
$
10.18

 
$
301.58

July 15, 2013
 
August 13, 2013
 
30,365

 
30,365

 
$
10.18

 
$
308.97

October 22, 2013
 
November 21, 2013
 
55,255

 
55,255

 
$
10.36

 
$
572.44

February 4, 2014
 
March 6, 2014
 
68,969

 
68,969

 
$
10.36

 
$
714.52

June 6, 2014
 
July 11, 2014
 
117,425

 
117,425

 
$
10.36

 
$
1,216.38

August 7, 2014
 
September 10, 2014
 
111,854

 
111,854

 
$
10.36

 
$
1,158.80

December 19, 2014
 
January 23, 2015
 
313,101

 
313,101

 
$
10.36

 
$
3,243.73

March 16, 2015
 
April 15, 2015
 
162,688

 
162,688

 
$
10.36

 
$
1,685.45

June 26, 2015
 
July 31, 2015
 
533,527

 
533,527

 
$
9.72

 
$
5,185.88

September 18, 2015
 
October 20, 2015
 
728,874

 
728,874

 
$
9.53

 
$
6,946.17

December 23, 2015
 
January 25, 2016
 
7,375,871

 
3,053,869

 
$
9.22

 
$
28,156.67

July 26, 2016
 
December 31, 2016
 
17,004,354

 
6,715,864

 
$
8.58

 
$
57,622.10

June 8, 2017
 
July 6, 2017
 
11,747,753

 
3,433,482

 
$
8.52

 
$
28,576.26

December 19, 2017
 
January 19, 2018
 
21,521,235

 
2,547,524

 
$
8.31

 
$
21,350.21

June 15, 2018
 
July 16, 2018
 
20,864,620

 
2,348,835

 
$
8.26

 
$
19,401.38

December 14, 2018
 
January 18, 2019
 
21,586,074

 
2,241,000

 
$
8.20

 
$
18,376.18

June 18, 2019
 
July 23, 2019
 
31,263,410

 
2,199,337

 
$
7.96

 
$
17,506.70

Share amounts in the table above represent amounts filed in the tender offer.
Through September 30, 2019, the Company had repurchased an aggregate of 25.6 million shares of common stock for payments of $222.0 million. As of December 31, 2018, the Company had repurchased 21.2 million shares of common stock for payments of $185.9 million. Amounts include additional shares tendered for death and disability as permitted.
Note 11 — Earnings Per Share
Basic earnings per share is computed by dividing earnings available to common stockholders by the weighted average number of shares outstanding during the period. Other potentially dilutive shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis. The Company had no potentially dilutive securities as of September 30, 2019 and 2018.

63
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

The following information sets forth the computation of the weighted average basic and diluted net increase in net assets per share resulting from operations 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
Basic and diluted
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(12,050
)
 
$
28,483

 
$
76,946

 
$
68,672

Weighted average common shares outstanding
190,060,251

 
178,984,007

 
189,973,074

 
179,087,323

Net increase (decrease) in net assets resulting from operations per share
$
(0.06
)
 
$
0.16

 
$
0.41

 
$
0.38

Note 12 — Distributions
The Company’s board of directors has authorized, and has declared, cash distributions payable on a monthly basis to stockholders of record on each day since it commenced operations. From November 2013 until July 2017, the distribution rate has been $0.002378082 per day, which is equivalent to $0.868 per annum, per share of common stock, except for 2016 where the daily distribution rate was $0.002371585 per day to accurately reflect 2016 being a leap year. In July 2017, the board of directors reduced the distribution rate with respect to the Company's cash distributions to $0.00178082 per day, which is equivalent to approximately $0.65 annually, per share of common stock.
The amount of each such distribution is subject to the discretion of the board of directors and applicable legal restrictions related to the payment of distributions. The Company calculates each stockholder’s specific distribution amount for the month using record and declaration dates and accrues distributions on the date the Company accepts a subscription for shares of the Company’s common stock. The distributions are payable by the fifth day following each month end to stockholders of record at the close of business each day during the prior month.
From time to time, the Company may also pay interim distributions at the discretion of its board of directors. The Company may fund its cash distributions to stockholders from any sources of funds available to it, including offering proceeds, borrowings, net investment income from operations, capital gain proceeds from the sale of assets and non-capital gain proceeds from the sale of assets. The Company’s distributions may exceed its earnings, and as a result, a portion of the distributions the Company will make may represent a return of capital for tax purposes. As of September 30, 2019, the Company had accrued $10.1 million in stockholder distributions that were unpaid. As of December 31, 2018, the Company had accrued $10.5 million in stockholder distributions that were unpaid.
Note 13 — Income Tax Information and Distributions to Stockholders
The Company has elected to be treated for federal income tax purposes as a RIC under the Code. Generally, a RIC is exempt from federal income taxes if it meets certain quarterly asset diversification requirements, annual income tests, and distributes to stockholders its ‘‘investment company taxable income,’’ as defined in the Code, each taxable year. Distributions declared prior to the filing of the previous year's tax return and paid up to one year after the previous tax year can be carried back to the prior tax year for determining the distributions paid in such tax year. The Company intends to make sufficient distributions to maintain its RIC status each year. The Company may also be subject to federal excise taxes of 4%.
A RIC is limited in its ability to deduct expenses in excess of its “investment company taxable income” (which is, generally, ordinary income plus net realized short-term capital gains in excess of net realized long-term capital losses). If the Company's expenses in a given taxable year exceed gross taxable income (e.g., as the result of large amounts of equity-based compensation), it would incur a net operating loss for that year. However, a RIC is not permitted to carry forward net operating losses to subsequent taxable years and such net operating losses do not pass through to the RIC’s stockholders. In addition, deductible expenses can be used only to offset investment company taxable income, not net capital gain. A RIC may not use any net capital losses (that is, realized capital losses in excess of realized capital gains) to offset the RIC’s investment company taxable income, but may carry forward such net capital losses, and use them to offset capital gains indefinitely. Due to these limits on the deductibility of expenses and net capital losses, the Company may for tax purposes have aggregate taxable income for several taxable years that it is required to distribute and that is taxable to stockholders even if such taxable income is greater than the aggregate net income the Company actually earned during those taxable years. Such required distributions may be made from the Company cash assets or by liquidation of investments, if necessary. The Company may realize gains or losses from such liquidations. In the event the Company realizes net capital gains from such transactions, the Company may receive a larger capital gain distribution than it would have received in the absence of such transactions.

64
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

Depending on the level of taxable income earned in a tax year, for excise tax purposes the Company may choose to carry forward taxable income in excess of current year distributions into the next tax year and incur a 4% U.S. federal excise tax on such income, as required. To the extent that the Company determines that its estimated current year annual taxable income will be in excess of estimated current year distributions, the Company accrues excise tax, if any, on estimated excess taxable income as taxable income is earned.
The Company did not have any uncertain tax positions that met the recognition or measurement criteria of ASC 740-10-25, Income Taxes (“ASC Topic 740”), nor did the Company have any unrecognized tax benefits as of the periods presented herein. The Company's 2018, 2017, 2016, and 2015 federal tax returns remain subject to examination by the Internal Revenue Service.
As of September 30, 2019, the Company had a deferred tax asset of $1.5 million and a deferred tax liability of $(2.4) million. Given the losses generated by certain entities, deferred tax assets have been offset by valuation allowances of $1.5 million. As of December 31, 2018, the Company had a deferred tax asset of $1.3 million and a deferred tax liability of $(4.1) million. Given the losses generated by certain entities, deferred tax assets have been offset by valuation allowances of $1.3 million.
The deferred tax asset valuation allowance has been determined pursuant to the provisions of ASC Topic 740, including the Company's estimation of future taxable income, if necessary, and is adequate to reduce the total deferred tax asset to an amount that will more likely than not be realized.


65
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

Note 14 — Financial Highlights
The following is a schedule of financial highlights for the nine months ended September 30, 2019 and 2018:
 
For the nine months ended September 30,
 
2019
 
2018
Per share data:
 
 
 
Net asset value, beginning of period
$
7.82

 
$
8.30

Results of operations (1)
 
 
 
        Net investment income
0.43

 
0.43

Net realized and unrealized loss, net of deferred taxes
(0.01
)
 
(0.05
)
Net change in unrealized depreciation attributable to non-controlling interests
(0.01
)
 
—

Net increase in net assets resulting from operations
0.41

 
0.38

Stockholder distributions (2)
 
 
 
Distributions from net investment income
(0.49
)
 
(0.49
)
Net decrease in net assets resulting from stockholder distributions
(0.49
)
 
(0.49
)
Capital share transactions
 
 
 
Repurchases of common stock
—

 
0.01

Acquisition of non-controlling interest
0.01

 
—

Net increase in net assets resulting from capital share transactions
0.01

 
0.01

Net asset value, end of period
$
7.75

 
$
8.20

Shares outstanding at end of period
189,180,961

 
178,224,771

Total return (4)
5.19
%
 
4.71
%
Ratio/Supplemental data:
 
 
 
Net assets attributable to BDCA, end of period
$
1,465,417

 
$
1,460,757

Total net assets, end of period
1,465,417

 
1,463,846

Ratio of net investment income to average net assets (3)(6)
7.90
%
 
7.39
%
Ratio of total expenses to average net assets (3)(6)(7)
8.95
%
 
8.57
%
Portfolio turnover rate (5)
22.83
%
 
36.37
%
______________
(1) 
The per share data was derived by using the weighted average shares outstanding during the period.
(2) 
The per share data for distributions reflects the actual amount of distributions declared per share during the period.
(3) 
Ratios are annualized, except for incentive fees.
(4) 
Total return is calculated assuming a purchase of shares of common stock at the current net asset value on the first day and a sale at the current net asset value on the last day of the periods reported. Distributions, if any, are assumed for purposes of this calculation to be reinvested at prices obtained under the DRIP.
(5) 
Portfolio turnover rate is calculated using the lesser of year-to-date purchases or sales over the average of the invested assets at fair value. Portfolio turnover rate is not annualized.
(6) 
There were no offering costs during the period.
(7) 
Ratio of total expenses to average net assets is calculated using total operating expenses, including income tax expense over average net assets.





66
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)


Note 15 – Schedules of Investments and Advances to Affiliates
The following table presents the Schedule of Investments and Advances to Affiliates as of September 30, 2019:
Portfolio Company (1)
 
Type of Asset
 
Industry
 
Amount of dividends and interest included in income
 
Beginning Fair Value at December 31, 2018
 
Gross additions*
 
Gross reductions**
 
Realized Gain/(Loss)
 
Change in Unrealized Gain (Loss) (4)
 
Fair Value at September 30, 2019
Control Investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
California Resources Development JV, LLC (2) (5) (7)
 
Equity/Other
 
Energy
 
$
887

 
$
28,973

 
$
—

 
$
(28,402
)
 
$
—

 
$
(571
)
 
$
—

Capstone Nutrition Common Stock (fka Integrity Nutraceuticals, Inc.) (2) (5) (7) (8)
 
Equity/Other
 
Consumer
 
—

 
—

 
—

 
(159
)
 
(1,471
)
 
1,630

 
—

Capstone Nutrition (fka Integrity Nutraceuticals, Inc.) - L+12.50% (15.08%), 9/25/2020 (2) (5) (6) (7)
 
Senior Secured First Lien Debt
 
Consumer
 
—

 
3,219

 
1,804

 
(5,471
)
 
838

 
(390
)
 
—

Capstone Nutrition (fka Integrity Nutraceuticals, Inc.) - L+12.50% (15.08%), 9/19/2020 (2) (5) (6) (7)
 
Senior Secured First Lien Debt
 
Consumer
 
(12
)
 
3,459

 
—

 
(1,612
)
 
(14,794
)
 
12,947

 
—

Capstone Nutrition (fka Integrity Nutraceuticals, Inc.) - L+12.50% (15.08%), 9/25/2020 (2) (5) (6) (7)
 
Senior Secured First Lien Debt
 
Consumer
 
—

 
7,692

 
—

 
(3,282
)
 
(30,365
)
 
25,955

 
—

Capstone Nutrition Class B and C Common Stock (fka Integrity Nutraceuticals, Inc.) (2) (5) (7) (8)
 
Equity/Other
 
Consumer
 
—

 
—

 
—

 
—

 
—

 
—

 
—

CRD Holdings, LLC - 9.00% (2) (7)
 
Equity/Other
 
Energy
 
3,487

 
—

 
41,560

 
(9,864
)
 
—

 
904

 
32,600

CRS-SPV, Inc. (2) (7) (8)
 
Equity/Other
 
Industrials
 
26

 
2,221

 
—

 
—

 
—

 
—

 
2,221

CRS-SPV, Inc. - L+4.50% (6.56%), 3/8/2020 (2) (7)
 
Senior Secured First Lien Debt
 
Industrials
 
1

 
—

 
68

 
(6
)
 
—

 
—

 
62

Kahala Ireland OpCo Designated Activity Company - L+8.00% (13.00%), 12/22/2028 (2) (3) (6) (7)
 
Senior Secured First Lien Debt
 
Transportation
 
9,135

 
111,549

 
—

 
(44,000
)
 
—

 
—

 
67,549

Kahala Ireland OpCo Designated Activity Company (2) (3) (7) (8)
 
Equity/Other
 
Transportation
 
—

 
20,329

 
—

 
—

 
—

 
31,477

 
51,806

Kahala Ireland OpCo Designated Activity Company (2) (3) (7) (8)
 
Equity/Other
 
Transportation
 
—

 
3,250

 
—

 
(15
)
 
—

 
15

 
3,250

Kahala US OpCo, LLC - 13.00% (2) (3) (7) (8)
 
Equity/Other
 
Transportation
 
—

 
—

 
—

 
—

 
—

 
—

 
—

NexSteppe, Inc. (2) (7) (8)
 
Equity/Other
 
Chemicals
 
—

 
—

 
—

 
—

 
—

 
—

 
—

NexSteppe, Inc. - 12.00% 12/31/2019 (2) (6) (7)
 
Senior Secured First Lien Debt
 
Chemicals
 
—

 
—

 
—

 
—

 
—

 
—

 
—

NexSteppe, Inc. - 12.00% 12/31/2019 (2) (6) (7)
 
Senior Secured First Lien Debt
 
Chemicals
 
—

 
—

 
—

 
—

 
—

 
—

 
—

NMFC Senior Loan Program I, LLC (2)
 
Equity/Other
 
Diversified Investment Vehicles
 
4,440

 
50,573

 
—

 
—

 
—

 
(2,773
)
 
47,800

Park Ave RE Holdings, LLC - 13.00% 12/31/2021 (2) (6) (7)
 
Subordinated Debt
 
Financials
 
3,625

 
37,192

 
—

 
(1,705
)
 
—

 
—

 
35,487

Park Ave RE Holdings, LLC (2) (7) (8)
 
Equity/Other
 
Financials
 
—

 
15,578

 
—

 
(4,242
)
 
4,486

 
(7,317
)
 
8,505

Park Ave RE Holdings, LLC (2) (5) (7) (8)
 
Equity/Other
 
Financials
 
—

 
23,645

 
—

 
(23,645
)
 
—

 
—

 
—

Siena Capital Finance, LLC - 12.50% 8/16/2021 (2) (7)
 
Subordinated Debt
 
Financials
 
1,622

 
—

 
22,490

 
—

 
—

 
10

 
22,500


67
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

Portfolio Company (1)
 
Type of Asset
 
Industry
 
Amount of dividends and interest included in income
 
Beginning Fair Value at December 31, 2018
 
Gross additions*
 
Gross reductions**
 
Realized Gain/(Loss)
 
Change in Unrealized Gain (Loss) (4)
 
Fair Value at September 30, 2019
Siena Capital Finance, LLC (2) (7)
 
Equity/Other
 
Financials
 
$
3,616

 
$
—

 
$
36,617

 
$
—

 
$
(94
)
 
$
392

 
$
36,915

  Total Control Investments
 
 
 
 
 
$
26,827

 
$
307,680

 
$
102,539

 
$
(122,403
)
 
$
(41,400
)
 
$
62,279

 
$
308,695

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Affiliate Investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Answers Corp. (7)
 
Equity/Other
 
Media/Entertainment
 
$
818

 
$
1,909

 
$
—

 
$
—

 
$
—

 
$
(1,182
)
 
$
727

B&M CLO, Ltd. 2014-1A SUB - 0.00%, 4/16/2026 (7)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
46

 
6,029

 
—

 
(2,928
)
 
—

 
285

 
3,386

Capstone Nutrition Development, LLC (7) (8)
 
Equity/Other
 
Consumer
 
—

 
—

 
4,288

 
—

 
—

 
—

 
4,288

CVP Cascade CLO, Ltd. 2013-CLO1 SUB - 0.00%, 1/16/2026 (7)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
221

 
1,166

 
—

 
(331
)
 
—

 
(835
)
 
—

CVP Cascade CLO, Ltd. 2013-CLO1 Side Letter - 0.00%, 1/16/2026 (7)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
12

 
68

 
—

 
(379
)
 
—

 
336

 
25

CVP Cascade CLO, Ltd. 2014-2A Side Letter - 0.00%, 7/18/2026 (7)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
43

 
274

 
—

 
(512
)
 
—

 
276

 
38

Danish CRJ, Ltd. (7) (8)
 
Equity/Other
 
Transportation
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Figueroa CLO, Ltd. 2014-1A FR - L+10.00% (12.30%), 1/15/2027 (7)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
762

 
7,508

 
—

 
—

 
—

 
369

 
7,877

Figueroa CLO, Ltd. 2014-1A SUB - 0.00%, 1/15/2027 (7)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
324

 
7,468

 
—

 
(2,409
)
 
—

 
1,586

 
6,645

Figueroa CLO, Ltd. 2014-1A Side Letter - 2.46%, 1/15/2027 (7)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
37

 
483

 
—

 
(475
)
 
—

 
67

 
75

Frank Entertainment Group, LLC - 6.00% 12/31/2019 (7)
 
Senior Secured First Lien Debt
 
Media/Entertainment
 
—

 
1,441

 
—

 
(346
)
 
(24
)
 
(1,071
)
 
—

Frank Entertainment Group, LLC - L+9.00% (11.03%), 12/31/2019 (6) (7)
 
Senior Secured First Lien Debt
 
Media/Entertainment
 
—

 
—

 
723

 
—

 
—

 
(723
)
 
—

Frank Entertainment Group, LLC - 12.00% 12/31/2019 (6) (7)
 
Senior Secured Second Lien Debt
 
Media/Entertainment
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Frank Entertainment Group, LLC (7) (8)
 
Equity/Other
 
Media/Entertainment
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Frank Entertainment Group, LLC (7) (8)
 
Equity/Other
 
Media/Entertainment
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Frank Entertainment Group, LLC (7) (8)
 
Equity/Other
 
Media/Entertainment
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Frontstreet Facility Solutions, Inc. - 13.00%, 3/1/2021 (5) (7)
 
Subordinated Debt
 
Telcom
 
26

 
189

 
—

 
(123
)
 
(104
)
 
38

 
—

Frontstreet Facility Solutions, Inc. (5) (7) (8)
 
Equity/Other
 
Telcom
 
—

 
—

 
—

 
(128
)
 
128

 
—

 
—

MidOcean Credit CLO 2013-2A INC - 0.00%, 1/29/2025 (7)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
375

 
16,534

 
—

 
(2,451
)
 
—

 
607

 
14,690

MidOcean Credit CLO III, LLC - 13.99%, 7/21/2026 (5) (7)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
431

 
14,651

 
—

 
(17,458
)
 
544

 
2,263

 
—

MidOcean Credit CLO 2015-4A INC - 0.00%, 4/15/2027 (7)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
—

 
8,595

 
—

 
(2,986
)
 
—

 
(1,281
)
 
4,328

NewStar Arlington Senior Loan Program, LLC 14-1A SUB - 21.53%, 7/25/2025 (7)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
2,906

 
24,788

 
—

 
(193
)
 
—

 
(3,872
)
 
20,723


68
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

Portfolio Company (1)
 
Type of Asset
 
Industry
 
Amount of dividends and interest included in income
 
Beginning Fair Value at December 31, 2018
 
Gross additions*
 
Gross reductions**
 
Realized Gain/(Loss)
 
Change in Unrealized Gain (Loss) (4)
 
Fair Value at September 30, 2019
NewStar Arlington Senior Loan Program, LLC 14-1A FR - L+11.00% (13.28%), 4/25/2031 (7)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
$
502

 
$
4,425

 
$
13

 
$
—

 
$
—

 
$
169

 
$
4,607

Newstar Fairfield Fund CLO, Ltd. 2015-1RA F - L+7.50% (9.78%), 1/20/2027 (7)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
942

 
8,580

 
122

 
—

 
—

 
541

 
9,243

Newstar Fairfield Fund CLO, Ltd. 2015-1RA SUB - 32.93%, 1/20/2027 (7)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
1,414

 
11,895

 
—

 
(2,253
)
 
—

 
(2,245
)
 
7,397

OFSI Fund, Ltd. 2014-6A SUB - 0.00%, 3/20/2025 (7)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
—

 
3,008

 
—

 
(862
)
 
—

 
(1,383
)
 
763

OFSI Fund, Ltd. 2014-6A Side Letter - 7.02%, 3/20/2025 (7)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
—

 
199

 
—

 
(239
)
 
—

 
40

 
—

PennantPark Credit Opportunities Fund II, LP
 
Equity/Other
 
Diversified Investment Vehicles
 
465

 
8,705

 
303

 
—

 
—

 
(434
)
 
8,574

Tax Defense Network, LLC - L+6.00% (10.00%), 4/30/2020 (6) (7)
 
Senior Secured First Lien Debt
 
Consumer
 
(4
)
 
1,195

 
—

 
(111
)
 
—

 
160

 
1,244

Tax Defense Network, LLC - L+6.00% (10.00%), 4/30/2020 (6) (7)
 
Senior Secured First Lien Debt
 
Consumer
 
(30
)
 
6,732

 
—

 
(631
)
 
3

 
905

 
7,009

Tax Defense Network, LLC (7) (8)
 
Equity/Other
 
Consumer
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Tax Defense Network, LLC (7) (8)
 
Equity/Other
 
Consumer
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Team Waste, LLC (7) (8)
 
Equity/Other
 
Industrials
 
—

 
2,235

 
—

 
—

 
—

 
—

 
2,235

Tennenbaum Waterman Fund, LP
 
Equity/Other
 
Diversified Investment Vehicles
 
1,082

 
10,137

 
—

 
—

 
—

 
(385
)
 
9,752

THL Credit Greenway Fund II, LLC
 
Equity/Other
 
Diversified Investment Vehicles
 
571

 
7,435

 
—

 
(940
)
 
—

 
(821
)
 
5,674

TwentyEighty, Inc. (7) (8)
 
Equity/Other
 
Business Services
 
—

 
—

 
—

 
—

 
—

 
4,895

 
4,895

TwentyEighty, Inc. - L+8.00% (10.33%), 3/31/2020 (5) (6) (7)
 
Senior Secured First Lien Debt
 
Business Services
 
40

 
300

 
13

 
(304
)
 
17

 
(26
)
 
—

TwentyEighty, Inc. - 8.00%, 3/31/2020 (5) (6) (7)
 
Senior Secured First Lien Debt
 
Business Services
 
1,013

 
6,422

 
813

 
(6,754
)
 
481

 
(962
)
 
—

TwentyEighty, Inc. - 9.00%, 3/31/2020 (5) (6) (7)
 
Senior Secured First Lien Debt
 
Business Services
 
992

 
6,158

 
981

 
(6,709
)
 
438

 
(868
)
 
—

Whitehorse, Ltd. 2014-1A SUB - 0.00%, 5/1/2026 (7)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
10

 
3,975

 
—

 
(1,712
)
 
—

 
(2,209
)
 
54

Whitehorse, Ltd. 2014-1A Side Letter - 0.00%, 5/1/2026 (7)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
8

 
297

 
—

 
(179
)
 
—

 
(39
)
 
79

Whitehorse, Ltd. 2014-1A E - L+4.55% (6.80%), 5/1/2026 (7)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
152

 
—

 
7,302

 
—

 
—

 
606

 
7,908

World Business Lenders, LLC (7) (8)
 
Equity/Other
 
Financials
 
—

 
3,759

 
—

 
—

 
—

 
(4
)
 
3,755

Total Affiliate Investments
 
 
 
 
 
$
13,158

 
$
176,560

 
$
14,558

 
$
(51,413
)
 
$
1,483

 
$
(5,197
)
 
$
135,991

Total Control & Affiliate Investments
 
 
 
 
 
$
39,985

 
$
484,240

 
$
117,097

 
$
(173,816
)
 
$
(39,917
)
 
$
57,082

 
$
444,686

______________________________________________________

69
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

*     Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK interest or dividends, the amortization of unearned income, the exchange of one or more existing securities for one or more new securities, and the movement of an existing portfolio company into this category from a different category.
**     Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, the exchange of one or more existing securities for one or more new securities, and the movement of an existing portfolio company out of this category into a different category.
(1) 
The principal amount and ownership detail are shown in the consolidated schedules of investments.
(2) 
This investment was not deemed significant under Regulation S-X as of September 30, 2019.
(3) 
For the year ended December 31, 2018, the Company had determined that it must include audited financial statements of Kahala Ireland Opco Designated Activity Company because it was a controlled investment and was required to do so under SEC Rule 3-09. The audited financial statements were attached as Exhibit 99.1 in the Company's 2018 Form 10-K.
(4) 
Gross of deferred taxes in the amount of $1.7 million.
(5) 
Investment no longer held as of September 30, 2019.
(6) 
Investment paid or has the option to pay all or a portion of interest and dividends via payment-in-kind.
(7) 
The fair value of investments with respect to securities for which market quotations are not readily available is determined in good faith by the Company's board of directors as required by the 1940 Act. Such investments are valued using significant unobservable inputs (See Note 3 to the consolidated financial statements).
(8) 
Investment is non-income producing at September 30, 2019.
Dividends and interest for the nine months ended September 30, 2019 attributable to Controlled and Affiliated investments no longer held as of September 30, 2019 were $3.4 million.
Realized loss for the nine months ended September 30, 2019 attributable to Controlled and Affiliated investments no longer held as of September 30, 2019 was $44.3 million.
Change in unrealized gain for the nine months ended September 30, 2019 attributable to Controlled and Affiliated investments no longer held as of September 30, 2019 was $40.0 million.
The following table presents the Schedule of Investments and Advances to Affiliates as of December 31, 2018:
Portfolio Company (1)
 
Type of Asset
 
Industry
 
Amount of dividends and interest included in income
 
Beginning Fair Value at December 31, 2017
 
Gross additions*
 
Gross reductions**
 
Realized Gain/(Loss)
 
Change in Unrealized Gain (Loss) (6)
 
Fair Value at December 31, 2018
Control Investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capstone Nutrition Common Stock (fka Integrity Nutraceuticals) (4) (5) (10)
 
Equity/Other
 
Consumer
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Capstone Nutrition (fka Integrity Nutraceuticals) - L+12.50% (15.03%), 9/25/2020 (4) (5) (8)
 
Senior Secured First Lien Debt
 
Consumer
 
—

 
—

 
2,829

 
—

 
—

 
390

 
3,219

Capstone Nutrition (fka Integrity Nutraceuticals) - L+12.50% (15.03%), 9/25/2020 (4) (5) (8)
 
Senior Secured First Lien Debt
 
Consumer
 
—

 
4,096

 
—

 
—

 
—

 
(637
)
 
3,459

Capstone Nutrition (fka Integrity Nutraceuticals) - L+12.50% (15.03%), 9/25/2020 (4) (5) (8)
 
Senior Secured First Lien Debt
 
Consumer
 
—

 
9,467

 
—

 
—

 
—

 
(1,775
)
 
7,692

Capstone Nutrition Class B and C Common Stock (fka Integrity Nutraceuticals) (4) (5) (10)
 
Equity/Other
 
Consumer
 
—

 
—

 
—

 
—

 
—

 
—

 
—

CRD Holdings, LLC - 9.00% (5)
 
Equity/Other
 
Energy
 
4,132

 
26,984

 
11,899

 
(9,680
)
 
—

 
(230
)
 
28,973

CRS-SPV, Inc. (5) (10)
 
Equity/Other
 
Industrials
 
—

 
—

 
2,219

 
—

 
—

 
2

 
2,221

Kahala Ireland OpCo Designated Activity Company - L+8.00% (13.00%), 12/23/2028 (3) (5) (8)
 
Senior Secured First Lien Debt
 
Transportation
 
17,447

 
141,549

 
—

 
(30,000
)
 
—

 
—

 
111,549

Kahala Ireland OpCo Designated Activity Company (3) (5) (10)
 
Equity/Other
 
Transportation
 
—

 
11,709

 
—

 
—

 
—

 
8,620

 
20,329

Kahala Ireland OpCo Designated Activity Company (3) (5) (10)
 
Equity/Other
 
Transportation
 
—

 
3,250

 
—

 
(20
)
 
—

 
20

 
3,250

Kahala US OpCo, LLC - 13.00% (3) (5) (10)
 
Equity/Other
 
Transportation
 
—

 
—

 
—

 
—

 
—

 
—

 
—


70
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

Portfolio Company (1)
 
Type of Asset
 
Industry
 
Amount of dividends and interest included in income
 
Beginning Fair Value at December 31, 2017
 
Gross additions*
 
Gross reductions**
 
Realized Gain/(Loss)
 
Change in Unrealized Gain (Loss) (6)
 
Fair Value at December 31, 2018
NexSteppe, Inc. (5) (10)
 
Equity/Other
 
Chemicals
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

NexSteppe, Inc. - 12.00%, 3/31/2019 (5) (8)
 
Senior Secured First Lien Debt
 
Chemicals
 
—

 
—

 
250

 
—

 
—

 
(250
)
 
—

NexSteppe, Inc. - 12.00%, 3/31/2019 (5) (8)
 
Senior Secured First Lien Debt
 
Chemicals
 
—

 
—

 
—

 
—

 
—

 
—

 
—

NMFC Senior Loan Program I, LLC
 
Equity/Other
 
Diversified Investment Vehicles
 
6,051

 
50,805

 
—

 
—

 
—

 
(232
)
 
50,573

Park Ave RE Holdings, LLC - 13.00%, 12/31/2021 (2) (5) (8) (9)
 
Subordinated Debt
 
Financials
 
4,902

 
37,192

 
—

 
—

 
—

 
—

 
37,192

Park Ave RE Holdings, LLC (2) (5) (10)
 
Equity/Other
 
Financials
 
—

 
12,678

 
102

 
—

 
—

 
2,798

 
15,578

Park Ave RE Holdings, LLC - 8.00% (2) (5) (10)
 
Equity/Other
 
Financials
 
—

 
23,645

 
—

 
—

 
—

 
—

 
23,645

South Grand MM CLO I, LLC (7)
 
Equity/Other
 
Diversified Investment Vehicles
 
100

 
28,904

 
—

 
(29,555
)
 
460

 
191

 
—

  Total Control Investments
 
 
 
 
 
$
32,632

 
$
350,279

 
$
17,299

 
$
(69,255
)
 
$
460

 
$
8,897

 
$
307,680

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Affiliate Investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Answers Corp. (5)
 
Equity/Other
 
Media/Entertainment
 
$
—

 
$
14,231

 
$
—

 
$
—

 
$
—

 
$
(12,322
)
 
$
1,909

Answers Corp. (5) (7)
 
Senior Secured First Lien Debt
 
Media/Entertainment
 
82

 
2,916

 
7

 
(3,007
)
 
55

 
29

 
—

Answers Corp. - L+7.90% (9.00%), 9/15/2021 (5) (7)
 
Senior Secured Second Lien Debt
 
Media/Entertainment
 
557

 
4,371

 
153

 
(4,675
)
 
435

 
(284
)
 
—

B&M CLO, Ltd. 2014-1A SUB - 0.00%, 4/16/2026 (5)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
767

 
12,804

 
—

 
(3,003
)
 
(1,857
)
 
(1,915
)
 
6,029

Basho Technologies, Inc. (7)
 
Senior Secured First Lien Debt
 
Software
 
—

 
—

 
—

 
(1,238
)
 
(5,247
)
 
6,485

 
—

Basho Technologies, Inc. (7) 
 
Senior Secured First Lien Debt
 
Software
 
—

 
—

 
—

 
—

 
(2,550
)
 
2,550

 
—

Basho Technologies, Inc. (7)
 
Equity/Other
 
Software
 
—

 
—

 
—

 
—

 
(2,000
)
 
2,000

 
—

CVP Cascade CLO, Ltd. 2013-CLO1 SUB - 0.00%, 1/16/2026 (5)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
633

 
4,121

 
—

 
(1,143
)
 
(5,500
)
 
3,688

 
1,166

CVP Cascade CLO, Ltd. 2013-CLO1 Side Letter (5)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
15

 
602

 
—

 
(629
)
 
(343
)
 
438

 
68

CVP Cascade CLO, Ltd. 2014-2A Side Letter (5)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
19

 
1,101

 
—

 
(701
)
 
—

 
(126
)
 
274

Danish CRJ, Ltd. (5) (10)
 
Equity/Other
 
Transportation
 
—

 
605

 
—

 
(1
)
 
—

 
(604
)
 
—

Figueora - Class F Notes - 12.79%, 1/15/2027 (5)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
465

 
—

 
8,000

 
—

 
—

 
(492
)
 
7,508

Figueroa CLO, Ltd. 2014-1A Side Letter (5)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
44

 
895

 
—

 
(617
)
 
—

 
205

 
483

Figueroa CLO, Ltd. 2014-1A SUB - 0.00%, 1/15/2027 (5)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
882

 
12,508

 
—

 
(852
)
 
(4,000
)
 
(188
)
 
7,468

Frank Entertainment Group, LLC - 6.00%, 6/30/2019 (5)
 
Senior Secured First Lien Debt
 
Media/Entertainment
 
—

 
—

 
1,836

 
—

 
—

 
(395
)
 
1,441


71
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

Portfolio Company (1)
 
Type of Asset
 
Industry
 
Amount of dividends and interest included in income
 
Beginning Fair Value at December 31, 2017
 
Gross additions*
 
Gross reductions**
 
Realized Gain/(Loss)
 
Change in Unrealized Gain (Loss) (6)
 
Fair Value at December 31, 2018
Frank Entertainment Group, LLC - 10.00%, 6/30/2019 (5)
 
Senior Secured Second Lien Debt
 
Media/Entertainment
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Frank Entertainment Group, LLC (5) (10)
 
Equity/Other
 
Media/Entertainment
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Frank Entertainment Group, LLC (5) (10) 
 
Equity/Other
 
Media/Entertainment
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Frank Entertainment Group, LLC (5) (10) 
 
Equity/Other
 
Media/Entertainment
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Frontstreet Facility Solutions, Inc. (5) (10)
 
Equity/Other
 
Business Services
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Frontstreet Facility Solutions, Inc. - 13.00%, 3/1/2021 (5)
 
Subordinated Debt
 
Business Services
 
126

 
—

 
227

 
—

 
—

 
(38
)
 
189

MidOcean Credit CLO 2013-2A INC - 12.07%, 1/29/2025 (5)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
2,130

 
20,651

 
—

 
(431
)
 
—

 
(3,686
)
 
16,534

MidOcean Credit CLO 2014-3A SUB - 14.97%, 7/21/2026 (5)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
2,398

 
17,508

 
1,738

 
(1,847
)
 
(3,300
)
 
552

 
14,651

MidOcean Credit CLO 2015-4A INC - 0.00%, 4/15/2027 (5)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
1,128

 
12,212

 
—

 
(1,184
)
 
—

 
(2,433
)
 
8,595

NewStar Arlington Senior Loan Program, LLC 14-1A FR - 13.77%, 4/25/2031 (5)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
455

 
—

 
4,532

 
—

 
—

 
(107
)
 
4,425

NewStar Arlington Senior Loan Program, LLC 14-1A SUB - 17.51%, 7/25/2025 (5)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
3,973

 
25,439

 
—

 
(2,050
)
 
—

 
1,399

 
24,788

Newstar Fairfield Fund CLO, Ltd. 2015-1RA F - 10.26%, 1/20/2027 (5)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
1,212

 
8,660

 
161

 
—

 
—

 
(241
)
 
8,580

Newstar Fairfield Fund CLO, Ltd. 2015-1RA SUB - 12.31%, 1/19/2027 (5)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
517

 
13,089

 
—

 
(2,141
)
 
(7,000
)
 
7,947

 
11,895

OFSI Fund, Ltd. 2014-6A Side Letter (5)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
(25
)
 
680

 
—

 
(485
)
 
—

 
4

 
199

OFSI Fund, Ltd. 2014-6A SUB - 0.00%, 3/20/2025 (5)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
183

 
10,162

 
—

 
(3,003
)
 
(1,000
)
 
(3,151
)
 
3,008

PennantPark Credit Opportunities Fund II, LP
 
Equity/Other
 
Diversified Investment Vehicles
 
1,264

 
10,136

 
—

 
(1,518
)
 
—

 
87

 
8,705

Silver Spring CLO, Ltd. - 4.84%, 10/16/2026 (5) (7)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
370

 
10,363

 
—

 
(8,241
)
 
(6,882
)
 
4,760

 
—

Tax Defense Network, LLC - L+6.00% (10.00%), 4/30/2020 (5) (8)
 
Senior Secured First Lien Debt
 
Consumer
 
157

 
7,477

 
—

 
(314
)
 
—

 
764

 
7,927

Tax Defense Network, LLC (5) (10)
 
Equity/Other
 
Consumer
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Tax Defense Network, LLC (5) (10)
 
Equity/Other
 
Consumer
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Team Waste, LLC (5) (10)
 
Equity/Other
 
Industrials
 
—

 
—

 
2,234

 
—

 
—

 
1

 
2,235

Tennenbaum Waterman Fund, LP (5)
 
Equity/Other
 
Diversified Investment Vehicles
 
1,254

 
10,427

 
—

 
—

 
—

 
(290
)
 
10,137

THL Credit Greenway Fund II, LLC
 
Equity/Other
 
Diversified Investment Vehicles
 
1,048

 
11,373

 
856

 
(4,659
)
 
—

 
(135
)
 
7,435

TwentyEighty, Inc. (5)
 
Equity/Other
 
Business Services
 
—

 
—

 
—

 
—

 
—

 
—

 
—

TwentyEighty, Inc. - L+8.00% (10.80%), 3/31/2020 (5) (8)
 
Senior Secured First Lien Debt
 
Business Services
 
307

 
2,853

 
131

 
(2,620
)
 
337

 
(401
)
 
300


72
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

Portfolio Company (1)
 
Type of Asset
 
Industry
 
Amount of dividends and interest included in income
 
Beginning Fair Value at December 31, 2017
 
Gross additions*
 
Gross reductions**
 
Realized Gain/(Loss)
 
Change in Unrealized Gain (Loss) (6)
 
Fair Value at December 31, 2018
TwentyEighty, Inc. - 8.00%, 3/31/2020 (5) (8)
 
Senior Secured First Lien Debt
 
Business Services
 
$
1,183

 
$
4,719

 
$
925

 
$
—

 
$
—

 
$
778

 
$
6,422

TwentyEighty, Inc. - 8.75%, 3/31/2020 (5) (8)
 
Senior Secured First Lien Debt
 
Business Services
 
1,137

 
3,739

 
1,125

 
—

 
—

 
1,294

 
6,158

Whitehorse, Ltd. 2014-1A Side Letter (5)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
39

 
639

 
—

 
(406
)
 
—

 
64

 
297

Whitehorse, Ltd. 2014-1A SUB - 0.00%, 5/1/2026 (5)
 
Collateralized Securities
 
Diversified Investment Vehicles
 
(30
)
 
8,761

 
—

 
(3,087
)
 
(1,000
)
 
(699
)
 
3,975

World Business Lenders, LLC (5) (10)
 
Equity/Other
 
Financials
 
—

 
3,759

 
—

 
—

 
—

 
—

 
3,759

Total Affiliate Investments
 
 
 
 
 
$
22,290

 
$
236,801

 
$
21,925

 
$
(47,852
)
 
$
(39,852
)
 
$
5,538

 
$
176,560

Total Control & Affiliate Investments
 
 
 
 
 
$
54,922

 
$
587,080

 
$
39,224

 
$
(117,107
)
 
$
(39,392
)
 
$
14,435

 
$
484,240

_____________________________________________________
*     Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK interest or dividends, the amortization of unearned income, the exchange of one or more existing securities for one or more new securities, and the movement of an existing portfolio company into this category from a different category.
**     Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, the exchange of one or more existing securities for one or more new securities, and the movement of an existing portfolio company out of this category into a different category.
(1) 
The principal amount and ownership detail are shown in the consolidated schedules of investments.
(2) 
This investment was not deemed significant under Regulation S-X as of December 31, 2018.
(3) 
For the year ended December 31, 2018, the Company had determined that it must include audited financial statements of Kahala Ireland Opco Designated Activity Company because it was a controlled investment and was required to do so under SEC Rule 3-09. The audited financial statements were attached as Exhibit 99.1 in the Company's 2018 Form 10-K.
(4) 
This investment was not deemed significant under Regulation S-X as of December 31, 2018.
(5) 
The fair value of investments with respect to securities for which market quotations are not readily available is determined in good faith by the Company's board of directors as required by the 1940 Act. Such investments are valued using significant unobservable inputs (See Note 3 to the consolidated financial statements).
(6) 
Gross of deferred taxes in the amount of $0.5 million.
(7) 
Investment no longer held as of December 31, 2018.
(8) 
Investment paid or has the option to pay all or a portion of interest and dividends via payment-in-kind.
(9) 
Portfolio company elected to pay cash interest, noting the company has the option to elect a portion of the interest to be payment-in-kind.
(10) 
Investment is non-income producing at December 31, 2018.
Dividends and interest for the year ended December 31, 2018 attributable to Controlled and Affiliated investments no longer held as of December 31, 2018 were $1.1 million.
Realized loss for the year ended December 31, 2018 attributable to Controlled and Affiliated investments no longer held as of December 31, 2018 was $15.7 million.
Change in unrealized gain for the year ended December 31, 2018 attributable to Controlled and Affiliated investments no longer held as of December 31, 2018 was $15.7 million.
Note 16 – Subsequent Events
The Company has evaluated subsequent events through the filing of this Form 10-Q and has determined that there have been no events that have occurred that would require adjustments to the Company’s disclosures in the consolidated financial statements except for the following:

73
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
For the period ended September 30, 2019
(Unaudited)

DRIP Sales
From October 1, 2019 through the filing of this Form 10-Q, the Company has issued 0.70 million shares of common stock including shares issued pursuant to the DRIP. Total gross proceeds from these issuances, including proceeds from shares issued pursuant to the DRIP were $5.6 million.




74

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements of Business Development Corporation of America (the "Company," "BDCA," "we," or "our") and the notes thereto and other financial information included elsewhere in this Quarterly Report on Form 10-Q. We are externally managed by our adviser, BDCA Adviser, LLC (the “Adviser”).
The forward-looking statements contained in this Quarterly Report on Form 10-Q may include statements as to:
•
our future operating results;
•
our business prospects and the prospects of our portfolio companies;
•
the impact of the investments that we expect to make;
•
the ability of our portfolio companies to achieve their objectives;
•
our contractual arrangements and relationships with third parties;
•
our expected financings and investments;
•
the adequacy of our cash resources and working capital;
•
the timing of cash flows, if any, from the operations of our portfolio companies;
•
our repurchase of shares;
•
actual and potential conflicts of interest with our Adviser and its affiliates;
•
the dependence of our future success on the general economy and its effect on the industries in which we invest;
•
the ability to qualify and maintain our qualifications as a regulated investment company (“RIC”) and a business development company (“BDC”);
•
the timing, form, and amount of any distributions;
•
the impact of fluctuations in interest rates on our business;
•
the valuation of any investments in portfolio companies, particularly those having no liquid trading market;
•
the impact of changes to generally accepted accounting principles, and the impact to BDCA; and
•
the impact of changes to tax legislation and, generally, our tax position.
In addition, words such as "anticipate," "believe," "expect," and "intend" indicate a forward-looking statement, although not all forward-looking statements include these words. The forward-looking statements contained in this Quarterly Report on Form 10-Q involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors discussed in Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K. Other factors that could cause actual results to differ materially include:
•
changes in the economy;
•
risks associated with possible disruption in our operations or the economy generally due to terrorism or natural disasters; and
•
future changes in laws or regulations and conditions in our operating areas.
You should not place undue reliance on these forward-looking statements. The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligations to update any forward-looking statement to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.
Overview
We are an externally managed, non-diversified closed-end management investment company incorporated in Maryland in May 2010 that has elected to be regulated as a BDC under the Investment Company Act of 1940, as amended (“the 1940 Act”). In addition, we have elected to be treated for tax purposes as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). Our investment activities are managed by the Adviser, a subsidiary of Benefit Street Partners L.L.C. (“BSP”) and supervised by our board of directors, a majority of whom are independent of the Adviser and its affiliates. As a BDC, we are required to comply with certain regulatory requirements.

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Our investment objective is to generate both current income and to a lesser extent long-term capital appreciation through debt and equity investments. We invest primarily in senior secured loans, and to a lesser extent, mezzanine loans, unsecured loans, and equity of predominantly private U.S. middle-market companies. We define middle market companies as those with annual revenues of less than $1 billion, although we may invest in larger or smaller companies. We may also purchase interests in loans or corporate bonds through secondary market transactions. We expect that each investment generally will range between approximately 0.5% and 3.0% of our total assets. As of September 30, 2019, 81.6% of our portfolio was invested in senior secured loans.
Senior secured loans generally are senior debt instruments that rank ahead of subordinated debt and equity in priority of payments and are generally secured by liens on the operating assets of a borrower which may include inventory, receivables, plant, property, and equipment. Mezzanine debt is subordinated to senior loans and is generally unsecured. We may also invest in the equity and junior debt tranches of collateralized loan obligation investment vehicles (“Collateralized Securities” or “CLO's”).
Financial and Operating Highlights
(Dollars in millions, except per share amounts)
 
At September 30, 2019:
 
 
Investment Portfolio
$
2,576.7

 
Net assets attributable to BDCA
1,465.4

 
Debt (net of deferred financing costs)
1,122.1

 
Net asset value per share attributable to BDCA
7.75

 
 
 
Portfolio Activity for the Nine Months Ended September 30, 2019:
 
 
Cost of investments purchased during period, including PIK
799.2

 
Sales, repayments, and other exits during the period
560.6

 
Number of portfolio companies at end of period
232

 
 
 
Operating results for the Nine Months Ended September 30, 2019:
 
 
Net investment income per share
0.43

 
Distributions declared per share
0.49

 
Net increase in net assets resulting from operations per share
0.41

 
Net investment income
82.2

 
Net realized and unrealized loss, net of deferred taxes
(5.3
)
 
Net increase in net assets resulting from operations
76.9

Portfolio and Investment Activity
During the nine months ended September 30, 2019, we made $795.5 million of investments in new and existing portfolio companies and had $560.6 million in aggregate amount of exits and repayments, resulting in net investments of $234.9 million for the period. The total portfolio of debt investments at fair value consisted of 90.6% bearing variable interest rates and 9.4% bearing fixed interest rates.

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Our portfolio composition, based on fair value at September 30, 2019 was as follows:
 
September 30, 2019
 
Percentage of
Total Portfolio
 
Weighted Average Current Yield for Total Portfolio (1)
Senior Secured First Lien Debt
69.5
%
 
8.6
%
Senior Secured Second Lien Debt
12.1

 
12.3

Subordinated Debt
4.2

 
12.0

Collateralized Securities (2)
4.3

 
10.7

Equity/Other (3)
9.9

 
7.4

Total
100.0
%
 
9.2
%
______________
(1) Includes the effect of the amortization or accretion of loan premiums or discounts.
(2) Weighted average current yield for Collateralized Securities is based on the estimation of effective yield to expected maturity for each security as calculated in accordance with Accounting Standards Codification ("ASC") Topic 325-40-35, Beneficial Interests in Securitized Financial Assets (see Note 2 - Summary of Significant Accounting Policies).
(3) Weighted average current yield for Equity/Other may be based on actual or annualized income, where applicable.
During the year ended December 31, 2018, we made $1,102.5 million of investments in new and existing portfolio companies and had $1,211.1 million in aggregate amount of exits and repayments, resulting in net exits and repayments of $(108.6) million for the period. The total portfolio of debt investments at fair value consisted of 86.8% bearing variable interest rates and 13.2% bearing fixed interest rates.
Our portfolio composition, based on fair value at December 31, 2018 was as follows:
 
December 31, 2018
 
Percentage of
Total Portfolio
 
Weighted Average Current Yield for Total Portfolio (1)
Senior Secured First Lien Debt
68.3
%
 
9.6
%
Senior Secured Second Lien Debt
11.8

 
12.3

Subordinated Debt
5.9

 
10.8

Collateralized Securities (2)
5.4

 
10.3

Equity/Other (3)
8.6

 
6.6

Total
100.0
%
 
9.8
%
______________
(1) Includes the effect of the amortization or accretion of loan premiums or discounts.
(2) Weighted average current yield for Collateralized Securities is based on the estimation of effective yield to expected maturity for each security as calculated in accordance with ASC Topic 325-40-35, Beneficial Interests in Securitized Financial Assets (see Note 2 - Summary of Significant Accounting Policies).
(3) Weighted average current yield for Equity/Other may be based on actual or annualized income, where applicable.
Portfolio Asset Quality
Our Adviser employs an investment rating system to categorize our investments. In addition to various risk management and monitoring tools, our Adviser grades the credit risk of all debt investments on a scale of 1 to 5 no less frequently than quarterly. This system is intended primarily to reflect the underlying risk of a portfolio debt investment relative to the inherent risk at the time the original debt investment was made (i.e., at the time of acquisition), although it may also take into account under certain circumstances the performance of the portfolio company's business, the collateral coverage of the investment and other relevant factors.

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 Loan Rating
 
Summary Description
1
  
Debt investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since the time of investment are favorable.
 
 
2
  
Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable. All investments are initially rated a “2”.
 
 
3
  
Performing debt investment requiring closer monitoring. Trends and risk factors show some deterioration.
 
 
4
  
Underperforming debt investment. Some loss of interest or dividend expected, but still expecting a positive return on investment. Trends and risk factors are negative.
 
 
5
  
Underperforming debt investment with expected loss of interest and some principal.
The weighted average risk rating of our investments based on fair value was 2.53 and 2.50 as of September 30, 2019 and December 31, 2018, respectively. As of September 30, 2019, we had six portfolio companies, which represented eleven investments, on non-accrual status with a total principal amount of $67.9 million, amortized cost of $45.4 million, and fair value of $12.6 million which represented 2.1%, 1.7%, and 0.5% of the investment portfolio's total principal, amortized cost, and fair value, respectively. As of December 31, 2018, we had eight portfolio companies, which represented fourteen portfolio investments, on non-accrual status with a total principal amount of $171.4 million, amortized cost of $117.4 million, and fair value of $43.8 million, which represented 5.7%, 4.7%, and 1.9% of the investment portfolio's total principal, amortized cost, and fair value, respectively. Refer to Note 2 - Summary of Significant Accounting Policies - in our consolidated financial statements included in this report for additional details regarding our non-accrual policy.
RESULTS OF OPERATIONS
Operating results for the three and nine months ended September 30, 2019 and 2018 were as follows (dollars in thousands):
 
For the three months ended September 30,
 
For the nine months ended September 30,
 
2019
 
2018
 
2019
 
2018
Total investment income
$
63,192

 
$
59,182

 
$
186,345

 
$
176,609

Total expenses
34,914

 
33,616

 
102,839

 
98,540

Income tax (benefit) expense, including excise tax
338

 
(270
)
 
1,301

 
270

Net investment gain attributable to non-controlling interests
—

 
37

 
9

 
32

Net investment income
$
27,940

 
$
25,799

 
$
82,196

 
$
77,767


 Investment Income
For the three and nine months ended September 30, 2019, total investment income was $63.2 million and $186.3 million, respectively and was primarily attributable to interest income from investments in portfolio companies with an average portfolio fair value of $2.5 billion and a weighted average current yield of 9.2%. Included within total investment income was $1.1 million and $2.6 million, respectively, of fee income for the three and nine months ended September 30, 2019. Fee income consists primarily of prepayment and amendment fees. For the three and nine months ended September 30, 2018, total investment income was $59.2 million and $176.6 million, respectively, and was primarily attributable to interest income from investments in portfolio companies with an average portfolio fair value of $2.5 billion and a weighted average current yield of 8.9%. Included within total investment income was $0.6 million and $3.4 million, respectively, of fee income for the three and nine months ended September 30, 2018. Fee income consists primarily of prepayment and amendment fees.

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Operating Expenses
The composition of our operating expenses for the three and nine months ended September 30, 2019 and 2018 was as follows (dollars in thousands):
 
For the three months ended September 30,
 
For the nine months ended September 30,
 
2019
 
2018
 
2019
 
2018
Management fees
$
10,269

 
$
10,082

 
$
29,739

 
$
30,117

Incentive fee on income
6,985

 
6,450

 
20,549

 
15,992

Interest and debt fees
14,131

 
13,862

 
41,505

 
41,095

Professional fees
1,207

 
1,639

 
4,342

 
4,475

Other general and administrative
1,871

 
1,161

 
5,345

 
5,504

Administrative services
199

 
195

 
592

 
594

Insurance
26

 
—

 
79

 
3

Directors' fees
226

 
227

 
688

 
760

Total operating expenses
$
34,914

 
$
33,616

 
$
102,839

 
$
98,540


For the three and nine months ended September 30, 2019, we incurred $10.3 million and $29.7 million, respectively, of management fees. For the three and nine months ended September 30, 2019, we incurred $7.0 million and $20.5 million, respectively, of incentive fees on income. For the three and nine months ended September 30, 2018, we incurred $10.1 million and $30.1 million, respectively, of management fees. For the three and nine months ended September 30, 2018, we incurred $6.5 million and $16.0 million, respectively, of incentive fees on income.
For the three and nine months ended September 30, 2019, we incurred interest and debt fees of $14.1 million and $41.5 million, respectively. For the three and nine months ended September 30, 2018, we incurred interest and debt fees of $13.9 million and $41.1 million, respectively. Interest and debt fees are comprised of interest expense, non-usage fees, trustee fees, amortization of deferred financing costs, and amortization of discount if applicable related to the Wells Fargo Credit Facility, Citi Credit Facility, UBS Credit Facility, 2023 Notes, 2022 Notes, 2020 Notes, and the JPMC PB Account, each as defined herein in the section entitled "Borrowings". The increase in interest and debt fees for the three months ended September 30, 2019 as compared to the same period in 2018 is primarily a result of an increase in average debt outstanding and higher non-usage fees on our Wells Fargo credit facility, partially offset by a decrease in average debt outstanding on our Citi credit facility and a decrease in LIBOR rates. The increase in interest and debt fees for the nine months ended September 30, 2019 as compared to the same period in 2018 is primarily a result of an increase in average debt outstanding, higher cost of financing and higher non-usage fees on our Wells Fargo credit facility, partially offset by the closing of our JP Morgan and UBS credit facilities.

79


Net Realized Gain (Loss) and Net Change in Unrealized Appreciation (Depreciation) on Investments, foreign currency transactions and forward currency exchange contracts
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments and foreign currency transactions, net of deferred taxes for the three and nine months ended September 30, 2019 and 2018 were as follows (dollars in thousands):
 
For the three months ended September 30,
 
For the nine months ended September 30,
 
2019
 
2018
 
2019
 
2018
Net realized gain (loss)
 
 
 
 
 
 
 
   Control investments
$
(41,306
)
 
$
—

 
$
(41,400
)
 
$
—

   Affiliate investments
928

 
503

 
1,483

 
(40,287
)
   Non-affiliate investments
2,183

 
(178
)
 
1,660

 
9,889

   Net realized gain (loss) on foreign currency transactions
(242
)
 
—

 
432

 
17

Total net realized gain (loss)
(38,437
)
 
325

 
(37,825
)
 
(30,381
)
Net change in unrealized appreciation (depreciation) on investments
 
 
 
 
 
 
 
   Control investments
33,530

 
4,548

 
62,279

 
3,257

   Affiliate investments
(13,964
)
 
(5,508
)
 
(5,197
)
 
33,666

   Non-affiliate investments
(23,788
)
 
4,268

 
(22,403
)
 
(14,213
)
Net change in deferred taxes
2,225

 
(107
)
 
1,739

 
(886
)
Total net change in unrealized appreciation (depreciation) on investments, net of deferred taxes
(1,997
)
 
3,201

 
36,418

 
21,824

Net change in unrealized depreciation attributable to non-controlling interests
—

 
(567
)
 
(3,017
)
 
(236
)
Net change in unrealized appreciation (depreciation) from forward currency exchange contracts
444

 
(275
)
 
(826
)
 
(302
)
Net realized and unrealized gain (loss)
$
(39,990
)
 
$
2,684

 
$
(5,250
)
 
$
(9,095
)

Net realized and unrealized loss on investments and foreign currency transactions, net of deferred taxes, resulted in a net loss of $(40.0) million and $(5.3) million for the three and nine months ended September 30, 2019 compared to a net gain of $2.7 million and a net loss of $(9.1) million, respectively, for the same periods in 2018. We look at net realized gain (loss) and change in unrealized appreciation (depreciation) together, as movement in unrealized appreciation or depreciation can be the result of realizations.
The net realized and unrealized loss for the three and nine months ended September 30, 2019 was primarily driven by greater realized losses on our investments. The net realized and unrealized gain for the three months ended September 30, 2018 and the net realized and unrealized loss for the nine months ended September 30, 2018 were the result of approximately $30.0 million of realized loss on CLOs as a result of the Company's assessment for other than temporary impairment ("OTTI") in accordance with ASC 325-40. As this OTTI was previously reserved for as part of unrealized depreciation on CLOs, the movement between unrealized and realized gain (loss) during the period relates to the approximately $30.0 million realization and the offsetting reversal of approximately $30.0 million of previously reported unrealized depreciation of approximately $30.0 million. The remaining loss was driven by unrealized depreciation on investments.
Changes in Net Assets from Operations
For the three and nine months ended September 30, 2019, we recorded a net increase (decrease) in net assets resulting from operations of $(12.1) million and $76.9, respectively, versus a net increase in net assets resulting from operations of $28.5 million and $68.7 million for the three and nine months ended September 30, 2018. The decrease is primarily attributable to greater realized losses on our investments. Based on the weighted average shares of common stock outstanding for the periods ended September 30, 2019 and 2018, respectively, our per share net increase (decrease) in net assets resulting from operations was $(0.06) and $0.41, respectively, for the three and nine months ended September 30, 2019, versus a net increase in net assets resulting from operations of $0.16 and $0.38, respectively, for the three and nine months ended September 30, 2018.

80


Cash Flows
For the nine months ended September 30, 2019, net cash used in operating activities was $128.4 million. The level of cash flows used in or provided by operating activities is affected by the timing of purchases, redemptions, and sales of portfolio investments. The decrease in cash flows used in operating activities for the nine months ended September 30, 2019 was primarily a result of purchases of investments of $795.5 million, offset by sales and repayments of investments of $560.6 million.
Net cash provided by financing activities of $129.8 million during the nine months ended September 30, 2019 primarily related to proceeds from debt of $282.0 million, which was partially offset by repurchases of common stock of $36.1 million, payments of stockholder distributions of $66.2 million, and payments on debt of $45.0 million.
For the nine months ended September 30, 2018, net cash provided by operating activities was $47.7 million. The level of cash flows used in or provided by operating activities is affected by the timing of purchases, redemptions, and sales of portfolio investments. The increase in cash flows provided by operating activities for the nine months ended September 30, 2018 was primarily result of purchases of investments of $909.8 million, offset by sales and repayments of investments of $915.7 million.
Net cash used in financing activities of $22.2 million during the nine months ended September 30, 2018 primarily related to net proceeds from the Wells Fargo Credit Facility, Citi Credit Facility, and the JPMC PB Account of $634.3 million offset by payments on debt of $552.8 million, net repurchases of common stock of $42.3 million and payments of stockholder distributions of $57.7 million.
Recent Developments
Distribution Reinvestment Plan (“DRIP”) Sales
From October 1, 2019 through the filing of this Form 10-Q, we issued 0.70 million shares of common stock including shares issued pursuant to the DRIP. Total gross proceeds from these issuances including proceeds from shares issued pursuant to the DRIP were $5.6 million.
Liquidity and Capital Resources
We generate cash flows from fees, interest, and dividends earned from our investments, as well as proceeds from sales of our investments and, previously, from the net proceeds of our Offering. As of September 30, 2019, we had issued 214.8 million shares of our common stock for gross proceeds of $2.3 billion, including the shares purchased by affiliates and shares issued pursuant to the DRIP.
Our principal demands for funds in both the short-term and long-term are for portfolio investments, for the payment of operating expenses, distributions to our investors, repurchases under our share repurchase program, and for the payment of principal and interest on our outstanding indebtedness. We may also from time to time enter into other agreements with third parties whereby third parties will contribute to specific investment opportunities. Other potential future sources of capital include proceeds from secured or unsecured financings from banks or other lenders, proceeds from private offerings, proceeds from the sale of investments, and undistributed funds from operations. However, our ability to incur additional debt will be dependent on a number of factors, including our degree of leverage, the value of our unencumbered assets, and borrowing restrictions that may be imposed by lenders.
We intend to conduct semi-annual tender offers pursuant to our share repurchase program. Our board of directors will consider the following factors, among others, in making its determination regarding whether to cause us to offer to repurchase shares and under what terms:
•
the effect of such repurchases on our qualification as a RIC (including the consequences of any necessary asset sales);
•
the liquidity of our assets (including fees and costs associated with disposing of assets);
•
our investment plans and working capital requirements;
•
the relative economies of scale with respect to our size;
•
our history in repurchasing shares or portions thereof; and
•
the condition of the securities markets.
We intend to conduct tender offers on a semi-annual basis, instead of on a quarterly basis as was done previously. We intend to continue to limit the number of shares to be repurchased in any calendar year to 10% of the weighted average number of shares outstanding in the prior calendar year, or 5.0% at each semi-annual tender offer. In addition, in the event of a stockholder’s death or disability, any repurchases of shares made in connection with a stockholder’s death or disability may be included within the overall limitation imposed on tender offers during the relevant redemption period, which provides that we may limit the number of shares to be repurchased during any redemption period to the number of shares of common stock we are able to repurchase with the proceeds received from the sale of shares of common stock under the DRIP during such redemption period.

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Distributions
Our board of directors has authorized, and has declared, cash distributions payable on a monthly basis to stockholders of record on each day since it commenced operations. From November 2013 until July 2017, the distribution rate has been $0.002378082 per day, which is equivalent to $0.868 per annum, per share of common stock, except for 2016, where the daily distribution rate was $0.002371585 per day to accurately reflect 2016 being a leap year. In July 2017, the board of directors reduced the distribution rate with respect to our cash distributions to $0.00178082 per day, which is equivalent to approximately $0.65 annually, per share of common stock.
The amount of each such distribution is subject to the discretion of our board of directors and applicable legal restrictions related to the payment of distributions. We calculate each stockholder’s specific distribution amount for the month using record and declaration dates and accrue distributions on the date we accept a subscription for shares of our common stock. The distributions are payable by the fifth day following each month end to stockholders of record at the close of business each day during the prior month.
From time to time, we may also pay interim distributions at the discretion of our board of directors. Our distributions may exceed our earnings, and as a result, a portion of the distributions we make may represent a return of capital for tax purposes.
The table below shows the components of the distributions we have declared and/or paid during the nine months ended September 30, 2019 and 2018 (dollars in thousands).
 
For the nine months ended September 30,
 
2019
 
2018
Distributions declared
$
92,357

 
$
87,066

Distributions paid
$
92,757

 
$
87,469

Portion of distributions paid in cash
$
66,170

 
$
57,703

Portion of distributions paid in DRIP shares
$
26,587

 
$
29,766

As of September 30, 2019, we had $10.1 million of distributions accrued and unpaid. As of December 31, 2018, we had $10.5 million of distributions accrued and unpaid.
We may fund our cash distributions to stockholders from any sources of funds available to us, including offering proceeds, borrowings, net investment income from operations, capital gain proceeds from the sale of assets, and non-capital gain proceeds from the sale of assets. We have not established limits on the amount of funds we may use from available sources to make distributions. We may have distributions which could be characterized as a return of capital for tax purposes. During the nine months ended September 30, 2019 and 2018, no portion of our distributions was characterized as return of capital for tax purposes. The specific tax characteristics of our distributions made in respect of our anticipated fiscal year ending December 31, 2019 will be reported to stockholders shortly after the end of the calendar year 2019 as well as in our periodic reports with the SEC. Stockholders should read any written disclosure accompanying a distribution payment carefully and should not assume that the source of any distribution is our ordinary income or gain. Moreover, you should understand that any such distributions were not based on our investment performance and can only be sustained if we achieve positive investment performance in future periods and/or our Adviser continues to make such reimbursements. There can be no assurance that we will achieve the performance necessary to sustain our distributions or that we will be able to pay distributions at all.
The following table sets forth the distributions declared during the nine months ended September 30, 2019 and 2018 (dollars in thousands):
 
For the nine months ended September 30,
 
2019
 
2018
Monthly distributions
$
92,357

 
$
87,066

Total distributions
$
92,357

 
$
87,066

Taxation as a RIC
We have elected to be treated as a RIC under Subchapter M of the Code commencing with our tax year ended December 31, 2011 and intend to maintain our qualification as a RIC thereafter. As a RIC, we generally will not be subject to corporate-level U.S. federal income taxes on any income that we distribute as dividends for U.S. federal income tax purposes to our stockholders. To maintain our qualification as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements. In addition, in order to maintain RIC tax treatment, we must distribute to our stockholders, for each tax year, an amount equal to at least 90% of our “investment company taxable income,” which is generally our net ordinary income plus the excess, if any, of realized net short-term capital gain over realized net long-term capital loss and determined without regard to any deduction for dividends paid, or the annual distribution requirement. Even if we qualify as a RIC, we generally will be subject to corporate-level U.S. federal income tax on our undistributed taxable income and could be subject to state, local and foreign taxes.

82


Additionally, in order to avoid the imposition of a U.S. federal excise tax, we are required to distribute, in respect of each calendar year, dividends to our stockholders of an amount at least equal to the sum of 98% of our calendar year net ordinary income (taking into account certain deferrals and elections); 98.2% of our capital gain net income (adjusted for certain ordinary losses) for the one year period ending on October 31 of such calendar year; and any net ordinary income and capital gain net income for preceding calendar years that were not distributed during such calendar years and on which we previously did not incur any U.S. federal income tax. If we fail to qualify as a RIC for any reason and become subject to corporate tax, the resulting corporate taxes could substantially reduce our net assets, the amount of income available for distribution and the amount of our distributions. Such a failure would have a material adverse effect on us and our stockholders. In addition, we could be required to recognize unrealized gains, incur substantial taxes and interest and make substantial distributions in order to re-qualify as a RIC. We cannot assure stockholders that they will receive any distributions.
Related Party Transactions and Agreements
Triangle Transaction
On April 3, 2018, BSP, through its affiliate BSP TCAP Acquisition Holdings LP (the “Acquisition Entity”), entered into an Asset Purchase Agreement (the “APA”) with Triangle Capital Corporation (“Triangle”) under which certain funds advised by BSP agreed to acquire Triangle’s Investment Portfolio (the “Triangle Portfolio”) for $981.2 million in cash, as adjusted in accordance with the terms of the APA (the “Triangle Transaction”). Our Adviser is an affiliate of BSP, and we participated in the Triangle Transaction by purchasing a portion of the Triangle Portfolio, facilitated through the Acquisition Entity.
On July 31, 2018, BSP completed the Triangle Transaction. The gross cash proceeds paid to Triangle were approximately $793.3 million, after adjustments to take into account portfolio activity and other matters occurring since December 31, 2017. In accordance with BSP’s allocation policy, we acquired approximately 24% of the assets in the Triangle Portfolio for an aggregate purchase price of $188.1 million. The final allocation of the investments in the Triangle Portfolio by BSP was based on a number of factors, including, among others, our available capital at the time of allocation, changes in the composition of the Triangle Portfolio between the signing of the APA and the closing of the Triangle Transaction, the suitability of the investments in Triangle’s Portfolio for us as compared to the other funds managed by BSP, regulatory guidance regarding the allocation of certain Triangle Portfolio assets between funds managed by BSP, and changes in the relative size of the funds managed by BSP.
Private Placement in connection with FT Transaction
On February 1, 2019, Franklin Templeton acquired BSP, including BSP’s 100% ownership interest in our Adviser (the “FT Transaction”). All investment professionals currently managing the Company and its investments, and all members of the BSP’s Investment Committee are expected to maintain their current responsibilities after the FT Transaction.
In connection with the FT Transaction, on November 1, 2018, we issued approximately 6.1 and 4.9 million shares of our common stock to Franklin Resources, Inc. and BSP, respectively, at a purchase price of $8.20 per share in a private placement in reliance on Section 4(a)(2) of the Securities Act of 1933. As a result of this issuance, the Company received aggregate cash proceeds of $90.0 million.
Investment Advisory Agreement
We entered into an Investment Advisory Agreement as of February 1, 2019 under which the Adviser, subject to the overall supervision of our board of directors manages the day-to-day operations of, and provides investment advisory services to us. The Adviser and its affiliates also provide investment advisory services to other funds that have investment mandates that are similar, in whole and in part, with ours. The Adviser and its affiliates serve as investment adviser or sub-adviser to private funds and registered open-end funds, and serves as an investment adviser to a public real estate investment trust. The Adviser’s policies are designed to manage and mitigate the conflicts of interest associated with the allocation of investment opportunities. In addition, any affiliated fund currently formed or formed in the future and managed by the Adviser or its affiliates may have overlapping investment objectives with our own and, accordingly, may invest in asset classes similar to those targeted by us. However, in certain instances due to regulatory, tax, investment, or other restrictions, certain investment opportunities may not be appropriate for either us or other funds managed by the Adviser or its affiliates.
Prior to February 1, 2019, our Adviser provided investment advisory and management services under the Prior Investment Advisory Agreement, effective November 1, 2016, and most recently re-approved by the Board in August 2018. The terms of the Prior Investment Advisory Agreement were materially identical to the Investment Advisory Agreement. The Prior Investment Advisory Agreement automatically terminated upon the indirect change of control of the Adviser on the consummation of the FT Transaction.

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Administration Agreement
On November 1, 2016, we entered into the Administration Agreement with BSP, pursuant to which BSP provides us with office facilities and administrative services. The Administration Agreement may be terminated by either party without penalty upon not less than 60 days’ written notice to the other. For the three and nine months ended September 30, 2019, the Company incurred $0.6 million and $1.8 million, respectively, in administrative service fees under the Administrative Agreement. For the three and nine months ended September 30, 2018, the Company incurred $0.6 million and $1.8 million, respectively, in administrative service fees under the Administration Agreement.
Co-Investment Relief
The 1940 Act generally prohibits BDCs from entering into negotiated co-investments with affiliates absent an order from the SEC permitting the BDC to do so. The SEC staff has granted us exemptive relief that allows it to enter into certain negotiated co-investment transactions alongside other funds managed by the Adviser or its affiliates (“Affiliated Funds”) in a manner consistent with our 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, we are permitted to co-invest with our affiliates if a “required majority” (as defined in Section 57(o) of the 1940 Act) of our eligible 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 us and our stockholders and do not involve overreaching in respect of us or our stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of our stockholders and is consistent with our investment objective and strategies.
Borrowings
We are only allowed to borrow money such that our asset coverage, which, as defined in the 1940 Act, measures the ratio of total assets less total liabilities not represented by senior securities to total borrowings, equals at least 200% after such borrowing, with certain limited exceptions. We are continually exploring additional forms of alternative debt financing which could include new or expanded credit facilities or the issuance of debt securities. We may use borrowed funds, known as “leverage,” to make investments and to attempt to increase returns to our stockholders by reducing our overall cost of capital. We currently have credit facilities with Wells Fargo and Citi and have sold $310.0 million in aggregate principal of unsecured notes.
Wells Fargo Credit Facility
On July 24, 2012, the Company, through a wholly-owned, consolidated special purpose financing subsidiary, Funding I, entered into a revolving credit facility with Wells Fargo and U.S. Bank as collateral agent, account bank, and collateral custodian (as amended from time to time, the “Wells Fargo Credit Facility”). The Wells Fargo Credit Facility, which was subsequently amended on January 14, 2013, April 26, 2013, September 9, 2013, June 30, 2014, May 29, 2015, November 4, 2015, January 8, 2016, October 31, 2016, May 18, 2017, April 3, 2018, May 9, 2018, November 8, 2018, December 21, 2018, and March 15, 2019, provides for borrowings in an aggregate principal amount of up to $600.0 million on a committed basis subject to compliance with a borrowing base. The Wells Fargo Credit Facility has a maturity date of May 9, 2023.
The Wells Fargo Credit Facility is priced at the one-month maturity LIBOR, with no LIBOR floor, plus a spread ranging between 1.65% and 2.50% per annum, depending on the composition of the portfolio of loans owned by Funding I for the relevant period. Interest is payable quarterly in arrears. Funding I is subject to a non-usage fee to the extent the aggregate principal amount available under the Wells Fargo Credit Facility has not been borrowed. The non-usage fee for the three months from the most recent amendment is 0.50% on any principal amount unused. After the three months from the most recent amendment, the non-usage fee per annum is 0.50% for the first 25% of the unused balance and 2.0% for the portion of the unused balance that exceeds 25%.
In connection with the Wells Fargo Credit Facility, Funding I has made certain representations and warranties, is required to comply with various covenants, reporting requirements, and other customary requirements for similar facilities, and is subject to certain customary events of default. Upon the occurrence and during the continuation of an event of default, Wells Fargo may declare the outstanding advances and all other obligations under the Wells Fargo Credit Facility immediately due and payable. During the continuation of an event of default, Funding I must pay interest at a default rate.
On November 8, 2018, the Company entered into an amendment to the Wells Fargo Credit Facility to permit the inclusion of Second Lien Loans as part of the borrowing base, which are not to exceed 10% of the outstanding balance of all Loan Assets (as defined in the Amendment).
On March 15, 2019, the Company entered into an amendment to the Wells Fargo Credit Facility to increase the size of the Wells Fargo Credit Facility from $545.0 to $600.0 million (as defined in the Amendment).

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Citi Credit Facility
On June 27, 2014, the Company, through a wholly-owned, special purpose financing subsidiary, CB Funding, entered into a credit facility as amended from time to time, (the “Citi Credit Facility”) with Citibank, N.A. as administrative agent and U.S. Bank as collateral agent, account bank, and collateral custodian. The Citi Credit Facility, which was subsequently amended on October 14, 2015, provides for borrowings in an aggregate principal amount of up to $400.0 million on a committed basis, subject to the administrative agent’s right to approve the assets acquired by CB Funding and pledged as collateral under the Citi Credit Facility. On June 27, 2019, the Company, through a wholly-owned, consolidated special purpose financing subsidiary, BDCA-CB Funding LLC, entered into an amendment (the "Amendment") to its Credit and Security Agreement with Citibank, N.A., dated as of June 27, 2014 (as amended from time to time, the "Credit Agreement"). The Amendment, among other things, (i) extends the end of the reinvestment period from July 1, 2019 to May 31, 2021 and (ii) extends the maturity date of the Credit Agreement from May 28, 2020 to May 31, 2022.
The Citi Credit Facility is priced at three month LIBOR, with no LIBOR floor, plus a spread of 1.60% per annum through and including the last day of the investment period and 2.00% per annum thereafter. Interest is payable quarterly in arrears. CB Funding is subject to a non-usage fee to the extent the aggregate principal amount available under the Citi Credit Facility has not been borrowed. The non-usage fee per annum is 0.50%. Any amounts borrowed under the Citi Credit Facility along with any accrued and unpaid interest thereunder will mature, and will be due and payable, in three years.
UBS Credit Facility
On April 7, 2015, the Company, through a wholly-owned, special-purpose, bankruptcy-remote subsidiary, Helvetica Funding, entered into a debt financing facility with UBS AG, London Branch (“UBS”), pursuant to which $150.0 million was made available to the Company to fund investments in new securities and for other general corporate purposes (as amended from time to time, the “UBS Credit Facility”). The UBS Credit Facility was subsequently amended on July 10, 2015 to increase the amount of debt available to the Company under the facility from $150.0 million to $210.0 million. On June 6, 2016, the UBS credit facility was again amended to increase the amount of debt available from $210.0 million to $232.5 million. In addition, the amended facility increased the applicable spread over a three-month LIBOR from 3.90% to 4.05% per annum for the relevant period and increased the permissible percentage of second lien loans from 60% to 70%. Pricing under the transaction is based on three-month LIBOR plus a spread of 4.05% per annum for the relevant period. The maturity date of the UBS Credit Facility was April 7, 2018.
On April 6, 2018, the Company repaid the UBS Credit Facility and all related liens were released.
2020 Notes
On August 26, 2015, the Company entered into a Purchase Agreement relating to the Company’s sale of $100.0 million aggregate principal amount of its 6.00% fixed rate senior notes due September 1, 2020 (the “2020 Notes”). The 2020 Notes are subject to customary indemnification provisions and representations, warranties, and covenants. The net proceeds from the sale of the 2020 Notes were approximately $97.9 million. The 2020 Notes bear interest at a rate of 6.00% per year payable semi-annually.
2022 Notes
On December 14, 2017, the Company entered into a Purchase Agreement relating to the Company's sale of $150.0 million aggregate principal amount of its 4.75% fixed rate notes due December 30, 2022 (the “2022 Notes”). The 2022 Notes are subject to customary indemnification provisions and representations, warranties, and covenants. The net proceeds from the sale of the 2022 Notes was approximately $147.0 million. The 2022 Notes bear interest at a rate of 4.75% per year payable semi-annually.
2023 Notes
On May 11, 2018, the Company entered into a Purchase Agreement relating to the Company's sale of $60.0 million aggregate principal amount of its 5.375% fixed rate notes due May 30, 2023 (the “2023 Notes”). The 2023 Notes are subject to customary indemnification provisions and representations, warranties, and covenants. The net proceeds from the sale of the 2023 Notes was approximately $58.7 million. The 2023 Notes bear interest at a rate of 5.375% per year payable semi-annually.
JP Morgan Securities LLC Prime Brokerage Account
On January 20, 2017, the Company entered into a prime brokerage account agreement with JP Morgan Securities LLC (the “JPMC PB Account”). The JPMC PB Account provides a full suite of services around the custody of bonds and equities and also access to leverage, which is dependent on the price, credit quality, and diversity of the pool of assets held within the account. The borrowing availability is recalculated daily based on changes to the assets, with margin calls issued in the morning as appropriate. The cost to borrow is 1 week LIBOR + 90 bps and there is no mandatory usage or period wherein the debt needs to be repaid.
On May 8, 2018 the Company fully repaid its borrowings under the JPMC PB Account and closed the account.

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See Note 5 to our consolidated financial statements contained in this Quarterly Report on Form 10-Q for a more detailed discussion of our borrowings.
Contractual Obligations
The following table shows our payment obligations for repayment of debt and other contractual obligations at September 30, 2019 (dollars in thousands):
 
 
 
Payment Due by Period
 
Total
 
Less than 1 year
 
1 - 3 years
 
3- 5 years
 
More than 5 years
Wells Fargo Credit Facility (1)
$
494,652

 
$
—

 
$
—

 
$
494,652

 
$
—

Citi Credit Facility (2)
330,500

 
—

 
330,500

 
—

 
—

2023 Notes (3)
59,761

 
—

 
—

 
59,761

 
—

2022 Notes (4)
149,463

 
—

 
—

 
149,463

 
—

2020 Notes (5)
99,710

 
99,710

 
—

 
—

 
—

Total contractual obligations
$
1,134,086

 
$
99,710

 
$
330,500

 
$
703,876

 
$
—

______________
(1) 
As of September 30, 2019, we had $105.3 million of unused borrowing capacity under the Wells Fargo Credit Facility, subject to borrowing base limits.
(2) 
As of September 30, 2019, we had $69.5 million of unused borrowing capacity under the Citi Credit Facility, subject to borrowing base limits.
(3) 
As of September 30, 2019, we had no unused borrowing capacity under the 2023 Notes.
(4) 
As of September 30, 2019, we had no unused borrowing capacity under the 2022 Notes.
(5) 
As of September 30, 2019, we had no unused borrowing capacity under the 2020 Notes.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.
Commitments
In the ordinary course of business, we may enter into future funding commitments. As of September 30, 2019, the Company had unfunded commitments on delayed draw term loans of $26.3 million (including $22.2 million of non-discretionary commitments and $4.1 million of discretionary commitments), unfunded commitments on revolver term loans of $29.0 million, unfunded commitments on bridge loans of $11.5 million, unfunded commitments on letter of credit facilities of $10.1 million, and unfunded equity capital discretionary commitments of $29.3 million. As of December 31, 2018, we had unfunded commitments on delayed draw term loans of $15.2 million, unfunded commitments on revolver term loans of $21.1 million and unfunded equity capital commitments of $0.5 million. Please refer to Note 7 - Commitments and Contingencies for further detail of these unfunded commitments. We maintain sufficient cash on hand and available borrowing capacity to fund such unfunded commitments.
Significant Accounting Estimates and Critical Accounting Policies
Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
While our significant accounting policies are more fully described in Note 2 - Summary of Significant Accounting Policies appearing elsewhere in this report, we believe the following accounting policies require the most significant judgment in the preparation of our consolidated financial statements.
Valuation of Portfolio Investments
Portfolio investments are reported on the consolidated statements of assets and liabilities at fair value. On a quarterly basis we perform an analysis of each investment to determine fair value as follows:

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Securities for which market quotations are readily available on an exchange are valued at the reported closing price on the valuation date. We may also obtain quotes with respect to certain of our investments from pricing services or brokers or dealers in order to value assets. When doing so, we determine whether the quote obtained is readily available according to U.S. GAAP to determine the fair value of the security. If determined readily available, we use the quote obtained.
Investments without a readily determined market value are primarily valued using a market approach, an income approach, or both approaches, as appropriate. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that we may take into account in fair value pricing our investments include, as relevant: available current market data, including relevant and applicable market trading and transaction comparables, applicable market yields and multiples, security covenants, call protection provisions, information rights, the nature and realizable value of any collateral, the portfolio company's ability to make payments, its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, M&A comparables, and enterprise values, among other factors. When available, broker quotations and/or quotations provided by pricing services are considered as an input in the valuation process.
For an investment in an investment fund that does not have a readily determinable fair value, we measure the fair value of the investment predominately based on the net asset value per share of the investment fund if the net asset value of the investment fund is calculated in a manner consistent with the measurement principles of ASC 946, as of our measurement date.
For investments in Collateralized Securities, both the assets and liabilities of each Collateralized Securities' capital structure are modeled. The model uses a waterfall engine to store the collateral data, generate collateral cash flows from the assets and distribute the cash flows to the liability structure based on the priority of payments. The waterfall cash flows are discounted using rates that incorporate risk factors such as default risk, interest rate risk, downgrade risk, and credit spread risk, among others. In addition, broker quotations and/or comparable trade activity is considered as an input to determining fair value when available.
As part of our quarterly valuation process the Adviser may be assisted by one or more independent valuation firms engaged by us. The board of directors determines the fair value of each investment, in good faith, based on the input of the Adviser and the independent valuation firm(s) (to the extent applicable).
With respect to investments for which market quotations are not readily available, the Adviser undertakes a multi-step valuation process each quarter, as described below:
•
Each portfolio company or investment will be valued by the Adviser, potentially with assistance from one or more independent valuation firms engaged by our board of directors;
•
The independent valuation firm(s), if involved, will conduct independent appraisals and make an independent assessment of the value of each investment; and
•
The board of directors determines the fair value of each investment, in good faith, based on the input of the Adviser, independent valuation firm (to the extent applicable) and the audit committee of the board of directors.
Because there is not a readily available market value for most of the investments in its portfolio, we value substantially all of our portfolio investments at fair value as determined in good faith by our board of directors, as described herein. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Additionally, the fair value of our investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that we may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we could realize significantly less than the value at which we have recorded it.
Revenue Recognition
Interest Income
Investment transactions are accounted for on the trade date. Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis. Discount and premium on investments purchased are accreted/amortized over the expected life of the respective investment using the effective yield method. The amortized cost of investments represents the original cost adjusted for the accretion of discount and amortization of premium on investments.

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The Company has a number of investments in Collateralized Securities. Interest income from investments in the “equity” class of these Collateralized Securities (in the Company's case, preferred shares, or subordinated notes) is recorded based upon an estimation of an effective yield to expected maturity utilizing assumed cash flows in accordance with ASC 325-40-35, Beneficial Interests in Securitized Financial Assets ("ASC 325-40-35"). The Company monitors the expected cash inflows from its equity investments in Collateralized Securities, including the expected principal repayments. The effective yield is determined and updated quarterly. In accordance with ASC 325-40, investments in CLOs are periodically assessed for other-than-temporary impairment ("OTTI"). When the Company determines that a CLO has OTTI, the amortized cost basis of the CLO is written down as of the date of the determination based on events and information evaluated and that write-down is recognized as a realized loss.
Fee Income
Fee income, such as structuring fees, origination, closing, amendment fees, commitment, and other upfront fees are generally non-recurring and are recognized as revenue when earned, either upfront or amortized into income. Upon the payment of a loan or debt security, any prepayment penalties and unamortized loan origination, structuring, closing, commitment, and other upfront fees are recorded as income.
Payment-in-Kind Interest/Dividends
We hold debt and equity investments in our portfolio that contain PIK interest and dividend provisions. The PIK interest and PIK dividend, which represent contractually deferred interest or dividends that add to the investment balance that is generally due at maturity, are generally recorded on the accrual basis.
Non-accrual Income
Investments are placed on non-accrual status when principal or interest/dividend payments are past due 30 days or more and/or when there is reasonable doubt that principal or interest will be collected. Accrued cash and un-capitalized PIK interest is generally reversed when an investment is placed on non-accrual status. Previously capitalized PIK interest is not reversed when an investment is placed on non-accrual status. Interest payments received on non-accrual investments may be recognized as income or applied to principal depending upon management's judgment of the ultimate outcome. Non-accrual investments are restored to accrual status when past due principal and interest is paid and, in management's judgment, are likely to remain current.
Net Realized Gain or Loss and Net Change in Unrealized Appreciation or Depreciation
Gain or loss on the sale of investments is calculated using the specific identification method. We measure realized gain or loss by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized. Net change in unrealized appreciation or depreciation will reflect the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when a gain or loss is realized.
See Note 2 - Summary of Significant Accounting Policies to the consolidated financial statements for a description of other accounting policies and recently issued accounting pronouncements.
ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The market risk associated with financial instruments and derivative financial instruments is the risk of loss from adverse changes in market prices or interest rates. Our market risk arises primarily from interest rate risk relating to interest rate fluctuations. Many factors including governmental monetary and tax policies, domestic and international economic and political considerations, and other factors that are beyond our control contribute to interest rate risk. To meet our short and long-term liquidity requirements, we borrow funds at a combination of fixed and variable rates. Our interest rate risk management objectives are to limit the impact of interest rate changes in earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, from time to time, we may enter into interest rate hedge contracts such as swaps, collars, and treasury lock agreements, subject to the requirements of the 1940 Act, in order to mitigate our interest rate risk with respect to various debt instruments. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in benefits of lower interest rates with respect to our portfolio of investments with fixed interest rates. During the periods covered by this report, we did not engage in interest rate hedging activities. We would not hold or issue these derivative contracts for trading or speculative purposes.

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As of September 30, 2019, our debt included variable-rate debt, bearing a weighted average interest rate of LIBOR plus 2.01% and fixed rate debt, bearing a weighted average interest rate of 5.27% with a total carrying value (net of deferred financing costs) of $1,122.1 million. The following table quantifies the potential changes in interest income net of interest expense should interest rates increase or decrease by 100 or 200 basis points assuming that our current consolidated statement of assets and liabilities was to remain constant and no actions were taken to alter our existing interest rate sensitivity. Interest rate floors, if applicable, are not reflected in the sensitivity analysis below.
Change in Interest Rates
 
Estimated Percentage Change in Interest Income net of Interest Expense
(-) 200 Basis Points
 
(17.10
)%
(-) 100 Basis Points
 
(8.55
)%
Base Interest Rate
 
—
 %
(+) 100 Basis Points
 
8.55
 %
(+) 200 Basis Points
 
17.10
 %
Because we may borrow money to make investments, our net investment income may be dependent on the difference between the rate at which we borrow funds and the rate at which we invest these funds. In periods of increasing interest rates, our cost of funds would increase, which may reduce our net investment income. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.
ITEM 4.  CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
In accordance with Rules 13a-15(b) and 15d-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 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 the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were (a) designed to ensure that the information we are required to disclose in our reports under the Exchange Act is recorded, processed, and reported in an accurate manner and on a timely basis and the information that we are required to disclose in our Exchange Act reports is accumulated and communicated to management to permit timely decisions with respect to required disclosure and (b) operating in an effective manner.
Change in Internal Control Over Financial Reporting
No change occurred in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) during the quarter ended September 30, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As of September 30, 2019, we were not defendants 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. Third parties may also seek to impose liability on us in connection with the activities of 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 below and in Part I., “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, which could materially affect our business, financial condition, and/or operating results. The risks described below and in our Annual Report on Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results.

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Because we borrow money, the potential for gain or loss on amounts invested in us will be magnified and may increase the risk of investing in us.
As of September 30, 2019, we had approximately $1.1 billion of debt financing. The use of borrowings, also known as leverage, increases the volatility of investments by magnifying the potential for gain or loss on invested equity capital. Because we use leverage to partially finance our investments, through borrowing from banks and other lenders, you will experience increased risks of investing in our common stock. If the value of our assets increases, leveraging would cause the net asset value attributable to our common stock to increase more sharply than it would have had we not leveraged. Conversely, if the value of our assets decreases, leveraging would cause our net asset value to decline more sharply than it otherwise would have had we not leveraged. Similarly, any increase in our income in excess of interest payable on the borrowed funds would cause our net income to increase more than it would without the leverage, while any decrease in our income would cause net income to decline more sharply than it would have had we not borrowed. Such a decline could negatively affect our ability to make common stock distribution payments. Leverage is generally considered a speculative investment technique.
Illustration. The following table illustrates the effect of leverage on returns from an investment in our common stock assuming various annual returns, net of expenses. The calculations in the table below are hypothetical and actual returns may be higher or lower than those appearing below. The calculation assumes (i) $2.9 billion in total assets, (ii) a weighted average cost of funds of 4.67%, (iii) $1.3 billion in debt outstanding (i.e., assumes that the $310.0 million principal amount of 2020 Notes, 2022 Notes, and 2023 Notes sold and the full $1.0 billion available to us under the revolving credit facilities we have with Wells Fargo and Citi is outstanding), and (iv) $1.5 billion in stockholders’ equity. In order to compute the “Corresponding return to stockholders,” the “Assumed Return on Our Portfolio (net of expenses)” is multiplied by the assumed total assets to obtain an assumed return to us. From this amount, the interest expense is calculated by multiplying the assumed weighted average cost of funds by the assumed debt outstanding, and the product is subtracted from the assumed return to us in order to determine the return available to stockholders. The return available to stockholders is then divided by our stockholders’ equity to determine the “Corresponding return to stockholders.” Actual interest payments may be different.
Assumed Return on Our Portfolio (net of expenses)
 
(10)%
 
(5)%
 
—%
 
5%
 
10%
Corresponding return to stockholders (1)
 
(23.63)%
 
(13.90)%
 
(4.17)%
 
5.55%
 
15.28%
___________________
(1) In order for us to cover our annual interest payments on indebtedness, we must achieve annual returns on our September 30, 2019 total assets of at least 2.15%.
As of September 30, 2019, the Wells Fargo Facility provided for borrowings in an aggregate principal amount of up to $600.0 million on a committed basis, due May 9, 2023; the Citi Credit Facility provided for borrowings in an aggregate principal amount of up to $400.0 million on a committed basis, due May 31, 2022; the 2020 Unsecured Notes provided borrowings in an aggregate principal amount of $100.0 million, due September 1, 2020, the 2022 Unsecured Notes provided borrowings in an aggregate principal amount of $150.0 million, due December 30, 2022, and the 2023 Unsecured Notes provided borrowings in an aggregate principal amount of $60.0 million, due May 30, 2023. See Item 7 in the Annual Report filed on Form 10-K for more information about these financing arrangements.
Regulations governing our operation as a BDC and RIC will affect our ability to raise, and the way in which we raise, additional capital or borrow for investment purposes, which may have a negative effect on our growth.
We may need to access the capital markets periodically to raise cash to fund new investments. We may also issue “senior securities,” including borrowing money from banks or other financial institutions, in amounts such that our asset coverage, as defined in the 1940 Act, equals at least 200% after such incurrence or issuance. Our ability to issue different types of securities is also limited. Compliance with these requirements may unfavorably limit our investment opportunities and reduce our ability compared to other companies to profit from favorable spreads between the rates at which we can borrow and the rates at which we can lend. As a BDC, therefore, we intend to continuously issue equity at a rate more frequent than our privately owned competitors, which may lead to greater stockholder dilution.
Although Congress passed the SBCAA on March 23, 2018, which amended the 1940 Act to permit BDCs to incur increased leverage if certain conditions are met, we do not presently intend to avail ourselves of the increased leverage limits permitted by the SBCAA. If we were to avail ourselves of the increased leverage permitted by the SBCAA, this would effectively allow us to double our leverage, which would increase leverage risk and expenses.
We have incurred leverage to generate capital to make additional investments. If the value of our assets declines, we may be unable to satisfy the asset coverage test under the 1940 Act, which could prohibit us from paying distributions and could prevent us from being subject to tax as a RIC. If we cannot satisfy the asset coverage test, we may be required to sell a portion of our investments and, depending on the nature of our debt financing, repay a portion of our indebtedness at a time when such sales and repayments may be disadvantageous.

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Under the 1940 Act, we generally are prohibited from issuing or selling our common stock at a price per share, after deducting selling commissions and dealer manager fees, that is below net asset value per share, which may be a disadvantage as compared to other public companies. We may, however, sell our common stock, or warrants, options, or rights to acquire our common stock, at a price below the then-current net asset value of our common stock if (1) our board of directors and independent directors determine that such sale is in our best interests and the best interests of our stockholders, and (2) our stockholders in general, as well as those stockholders that are not affiliated with us approve such sale. In any such case, the price at which our securities are to be issued and sold may not be less than a price that, in the determination of our board of directors, closely approximates the fair value of such securities.
The discontinuation of LIBOR and the transition to any new reference rates may affect the value of our LIBOR-indexed portfolio investments and may increase the cost of borrowing under our credit facilities, which in each case could affect our results of operations or financial condition.
On July 27, 2017, the U.K. Financial Conduct Authority (“FCA”) announced that LIBOR would be phased out of use after the 2021 calendar year, and the FCA has determined not to compel participant banks to submit LIBOR information after 2021. In response to the expected discontinuation of LIBOR, the Federal Reserve Board and the Federal Reserve Bank of New York formed the Alternative Reference Rates Committee (“ARRC”), a U.S. working group of private-sector representatives and financial regulators, to recommend an alternative reference rate to U.S. dollar LIBOR. Similarly, financial regulators in the UK, the European Union, Japan and Switzerland formed working groups with the aim of recommending alternatives to LIBOR denominated in their local currencies. The ARRC has recommended the Secured Overnight Financing Rate (“SOFR”) together with a spread adjustment, as appropriate in the particular market, as its preferred alternative reference rate for U.S. dollar LIBOR. SOFR represents the average interest rate to borrow cash overnight collateralized by U.S. Treasury securities, and is based primarily on recent U.S. Treasury-backed repurchase transactions.
At this time, it is not possible to predict how the discontinuation of LIBOR will affect financial instruments that utilize LIBOR, whether SOFR or any other alternative reference rates will be established, or will attain general acceptance in the financial markets, or the pace at which any such transition away from LIBOR and to any other reference rate may occur. The process of phasing out LIBOR or any further changes or reforms to the determination or supervision of LIBOR or alternative reference rates, may result in a sudden or prolonged increase or decrease in reported LIBOR or alternative reference rates, which could have an adverse impact on the market for or value of any securities, loans, derivatives and other financial obligations or extensions of credit indexed to LIBOR or such alternative reference rate that may be held by or due to us or on our overall financial condition or results of operations.
Additionally, the effect of changes or reforms to LIBOR may require us to engage in time-consuming renegotiations of any credit or similar agreements with our portfolio companies that utilize LIBOR as a factor in determining the interest rate and extend beyond 2021. We may need to renegotiate, among other provisions, the new reference rates to be used, the timing and frequency of determining rates and making interest payments and the methods for calculating or determining the interest rate adjustment. If agreements with portfolio companies are unable to be renegotiated, our investments may bear interest at a lower rate, which would decrease investment income and potentially the value and liquidity of such investments. This could have an adverse effect on our overall financial condition or results of operations. Moreover, any such reforms to LIBOR or the establishment or adoption of other reference rates may require us to renegotiate certain terms of the Wells Fargo Credit Facility and the Citi Credit Facility. If we are unable to do so, amounts drawn under such credit facilities may bear interest at a higher rate, which would increase our cost of borrowing and, in turn, affect our results of operations.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer Purchases of Equity Securities
Repurchases of our common stock pursuant to our tender offer are as follows:
Period
 
Total Number of Shares Purchased
 
Average Price per Share
 
Cumulative Number of Shares Purchased as Part of Publicly Announced Plans or Programs
 
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (in millions)
July 1, 2019 through July 31, 2019
 
2,199,337

 
$
7.96

 
2,199,337

 
—

August 1, 2019 through August 31, 2019
 
—

 
$
—

 
—

 
—

September 1, 2019 through September 30, 2019
 
—

 
$
—

 
—

 
—

    
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.

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BUSINESS DEVELOPMENT CORPORATION OF AMERICA


ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.

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ITEM 6. EXHIBITS
The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q for the nine months ended September 30, 2019 (and are numbered in accordance with Item 601 of Regulation S-K).
Exhibit No.
Description
 
 
 
 
 
 


93


SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
 
 
 
Signature
 
Title
 
Date
 
 
 
 
 
/s/ Richard J. Byrne
Richard J. Byrne
 
Chief Executive Officer, President and Chairman of the Board of Directors
(Principal Executive Officer)
 
November 12, 2019
/s/ Nina Kang Baryski         
Nina Kang Baryski
 
Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)
 
November 12, 2019




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