UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 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)

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

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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

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

    The number of shares of the registrant's common stock, $0.001 par value, outstanding as of May 10, 2019 was 189,920,624.

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BUSINESS DEVELOPMENT CORPORATION OF AMERICA

FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 2019

TABLE OF CONTENTS

 

	Page
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements	1
Consolidated Statements of Assets and Liabilities as of March 31, 2019 (Unaudited) and December 31, 2018	1
Consolidated Statements of Operations for the Three Months Ended March 31, 2019 and 2018 (Unaudited)	2
Consolidated Statements of Changes in Net Assets for the Three Months Ended March 31, 2019 and 2018 (Unaudited)	4
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2019 and 2018 (Unaudited)	5
Consolidated Schedules of Investments as of March 31, 2019 (Unaudited) and December 31, 2018	6
Notes to Consolidated Financial Statements (Unaudited)	39
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	76
Item 3. Quantitative and Qualitative Disclosures About Market Risk	88
Item 4. Controls and Procedures	89
PART II - OTHER INFORMATION
Item 1. Legal Proceedings	89
Item 1A. Risk Factors	89
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	90
Item 3. Defaults Upon Senior Securities	90
Item 4. Mine Safety Disclosures	90
Item 5. Other Information	90
Item 6. Exhibits	91
Signatures	92

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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)

	March 31,				December 31,
	2019				2018
	(Unaudited)
ASSETS
Investments, at fair value:
Control Investments, at fair value (amortized cost of $374,293 and $323,392, respectively)	$	370,247			$	307,680
Affiliate Investments, at fair value (amortized cost of $224,038 and $231,107, respectively)	178,965				176,560
Non-affiliate Investments, at fair value (amortized cost of $2,042,715 and $1,925,833, respectively)	1,979,604				1,850,474
Investments, at fair value (amortized cost of $2,641,046 and $2,480,332, respectively)	2,528,816				2,334,714
Cash and cash equivalents	79,385				96,692
Interest and dividends receivable	25,752				22,203
Receivable for unsettled trades	1,902				6,208
Prepaid expenses and other assets	1,570				2,514
Unrealized appreciation on forward currency exchange contracts	—				993
Total assets	$	2,637,425			$	2,463,324
LIABILITIES
Debt (net of deferred financing costs of $11,817 and $12,156, respectively)	$	1,012,995			$	884,522
Stockholder distributions payable	10,443				10,506
Management fees payable	9,444				9,711
Incentive fee on income payable	8,206				5,690
Accounts payable and accrued expenses	17,787				15,153
Payable for unsettled trades	56,404				32,921
Interest and debt fees payable	12,094				12,008
Payable for common stock repurchases	5				5
Directors' fees payable	61				89
Unrealized depreciation on forward currency exchange contracts	42				—
Total liabilities	1,127,481				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; 212,563,164 issued, and 189,170,326 outstanding at March 31, 2019, and 211,476,760 issued, and 190,324,059 outstanding at December 31, 2018	189				190
Additional paid in capital	1,802,511				1,811,970
Total distributable loss	(297,736		)		(323,127		)
Total net assets attributable to Business Development Corporation of America	1,504,964				1,489,033
Net assets attributable to non-controlling interest	4,980				3,686
Total net assets	1,509,944				1,492,719
Total liabilities and net assets	$	2,637,425			$	2,463,324
Net asset value per share attributable to Business Development Corporation of America	$	7.96			$	7.82

1

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BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands except share and per share data)

(Unaudited)

		For the Three Months Ended March 31,
		2019				2018
Investment income:
From control investments
Interest income		$	5,074			$	5,809
Dividend income		2,263				3,083
Total investment income from control investments		7,337				8,892
From affiliate investments
Interest income		4,258				5,219
Dividend income		882				1,352
Fee and other income		3				2
Total investment income from affiliate investments		5,143				6,573
From non-affiliate investments
Interest income		45,682				41,353
Dividend income		1,756				113
Fee and other income		1,022				1,445
Total investment income from non-affiliate investments		48,460				42,911
Interest from cash and cash equivalents		161				128
Total investment income		61,101				58,504
Operating expenses:
Management fees		9,433				9,955
Incentive fee on income		6,791				4,611
Interest and debt fees		13,258				13,450
Professional fees		1,707				1,132
Other general and administrative		1,828				2,464
Administrative services		196				199
Insurance		26				1
Directors' fees		234				273
Total expenses		33,473				32,085
Income tax expense, including excise tax		462				270
Net investment gain (loss) attributable to non-controlling interests		2				(5		)
Net investment income		27,164				26,154
Realized and unrealized gain (loss):
Net realized gain (loss)
Control investments		(94		)		394
Affiliate investments		6				(41,028		)
Non-affiliate investments		(2,545		)		6,199
Net realized gain on foreign currency transactions		722				26
Total net realized loss		(1,911		)		(34,409		)
Net change in unrealized appreciation (depreciation) on investments, net of deferred taxes
Control investments		11,184				(4,309		)
Affiliate investments		9,472				40,570

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

2

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BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands except share and per share data)

(Unaudited)

		For the Three Months Ended March 31,
		2019				2018
Non-affiliate investments		12,250				(6,345		)
Total net change in unrealized appreciation on investments, net of deferred taxes		32,906				29,916
Net change in unrealized appreciation (depreciation) attributable to non-controlling interests		(1,292		)		315
Net change in unrealized depreciation from forward currency exchange contracts		(1,035		)		—
Net realized and unrealized gain (loss)		28,668				(4,178		)
Net increase in net assets resulting from operations		$	55,832			$	21,976
Per share information - basic and diluted
Net investment income		$	0.14			$	0.15
Net increase in net assets resulting from operations		$	0.29			$	0.12
Weighted average shares outstanding		189,950,319				179,247,608

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

3

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BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

(dollars in thousands except share and per share data)

(Unaudited)

	For the Three Months Ended March 31,
	2019				2018
Operations:
Net investment income	$	27,164			$	26,154
Net realized loss from investments	(2,633		)		(34,435		)
Net realized gain on foreign currency transactions	722				26
Net change in unrealized appreciation on investments, net of deferred taxes	32,906				29,916
Net change in unrealized appreciation (depreciation) attributable to non-controlling interests	(1,292		)		315
Net change in unrealized depreciation from forward currency exchange contracts	(1,035		)		—
Net increase in net assets resulting from operations	55,832				21,976
Stockholder distributions:
Distributions	(30,441		)		(28,727		)
Net decrease in net assets from stockholder distributions	(30,441		)		(28,727		)
Capital share transactions:
Reinvestment of stockholder distributions	8,916				10,167
Repurchases of common stock	(18,376		)		(22,549		)
Net decrease in net assets from capital share transactions	(9,460		)		(12,382		)
Total increase (decrease) in net assets, before non-controlling interest	15,931				(19,133		)
Increase (decrease) in non-controlling interest	1,294				(319		)
Total increase (decrease) in net assets	17,225				(19,452		)
Net assets at beginning of period	1,492,719				1,494,516
Net assets at end of period	$	1,509,944			$	1,475,064
Net asset value per common share attributable to Business Development Corporation of America	$	7.96			$	8.26
Common shares outstanding at end of period	189,170,326				178,245,519

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

4

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BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

(Unaudited)

	For the Three Months Ended March 31,
	2019				2018
Operating activities:
Net increase in net assets resulting from operations	$	55,832			$	21,976
Adjustments to reconcile net increase in net assets from operations to net cash used in operating activities:
Payment-in-kind interest income	(873		)		(1,410		)
Net accretion of discount on investments	(2,304		)		(2,147		)
Amortization of deferred financing costs	856				796
Amortization of discount on unsecured notes	135				119
Sales and repayments of investments	122,781				160,643
Purchases of investments	(282,951		)		(284,392		)
Net realized loss from investments	2,633				34,435
Net realized gain on foreign currency transactions	(722		)		(26		)
Net unrealized appreciation on investments, gross of deferred taxes	(33,388		)		(30,458		)
Net unrealized depreciation from forward currency exchange contracts	1,035				—
(Increase) decrease in operating assets:
Interest and dividends receivable	(3,549		)		144
Receivable for unsettled trades	4,306				17,279
Prepaid expenses and other assets	944				2,326
Increase (decrease) in operating liabilities:
Management fees payable	(267		)		23
Incentive fee on income payable	2,516				53
Accounts payable and accrued expenses	2,634				1,691
Payable for unsettled trades	23,483				(38,563		)
Interest and debt fees payable	86				369
Directors' fees payable	(28		)		7
Net cash used in operating activities	(106,841		)		(117,135		)
Financing activities:
Repurchases of common stock	(18,376		)		(22,162		)
Proceeds from debt	128,000				132,912
Payments of financing costs	(518		)		—
Stockholder distributions	(21,588		)		(18,640		)
Increase (decrease) in non-controlling interest	1,294				(319		)
Net cash provided by financing activities	88,812				91,791
Net decrease in cash and cash equivalents	(18,029		)		(25,344		)
Effect of foreign currency exchange rates	722				26
Cash and cash equivalents, beginning of period	96,692				99,822
Cash and cash equivalents, end of period	$	79,385			$	74,504
Supplemental information:
Interest paid during the period	$	12,113			$	12,133
Taxes, including excise tax, paid during the period	$	4			$	16
Distributions reinvested	$	8,916			$	10,167

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

5

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BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2019 (Unaudited)
Portfolio Company (q)		Industry		Investment Coupon Rate / Maturity (y)		Principal / Number of Shares				Amortized Cost				Fair Value				% of Net Assets (b)
Senior Secured First Lien Debt - 114.4% (b)
Abaco Systems Holding Corp. (c) (i)		Business Services		L+6.00% (8.78%), 12/7/2021		$	23,396			$	23,141			$	23,045			1.5	%
ABC Financial Intermediate, LLC (j)		Media		L+4.25% (6.74%), 1/2/2025		7,662				7,630				7,662				0.5	%
AccentCare, Inc. (c) (f)		Health Care		L+4.50% (7.24%), 4/2/2019		3,353				3,345				3,336				0.2	%
AccentCare, Inc. (c) (i)		Health Care		L+4.50% (7.10%), 4/3/2024		28,646				28,402				28,503				1.9	%
AHP Health Partners, Inc.		Health Care		9.75%, 7/15/2026		6,589				6,505				7,135				0.5	%
Aleris International, Inc. (j)		Metals & Mining		L+4.75% (7.25%), 2/27/2023		18,248				18,114				18,212				1.2	%
Allied Universal (j)		Business Services		L+3.75% (6.25%), 7/28/2022		14,961				14,653				14,432				1.0	%
Altice France SA (a)		Cable		8.13%, 2/1/2027		15,000				14,821				15,150				1.0	%
Alvogen Pharma US, Inc. (j)		Health Care		L+4.75% (7.25%), 4/1/2022		13,338				13,266				12,948				0.9	%
Am General Llc (c) (i)		Industrials		L+7.25% (9.90%), 12/28/2021		1,703				1,703				1,703				0.1	%
American Greetings Corporation (j)		Consumer Products		L+4.50% (7.00%), 4/5/2024		1,751				1,721				1,746				0.1	%
AMI Entertainment Network, LLC (c) (f) (i)		Hotels, Restaurants & Leisure		L+6.00% (8.60%), 7/21/2022		13,397				13,220				13,156				0.9	%
AP Gaming I, LLC (a) (j)		Gaming/Lodging		L+3.50% (6.00%), 2/15/2024		18,679				18,653				18,581				1.2	%
AP NMT Acquisition B.V. (a) (j)		Media		L+5.75% (8.55%), 8/13/2021		6,551				6,565				6,506				0.4	%
AqGen Ascensus Inc. (j)		Technology		L+4.00% (6.60%), 12/3/2022		9,464				9,452				9,428				0.6	%
Ardent Legacy Acquisitions, Inc. (i)		Health Care		L+4.50% (7.00%), 6/16/2025		18,841				18,670				18,794				1.2	%
Athena Health (j)		Health Care		L+4.50% (7.20%), 2/11/2026		12,889				12,708				12,696				0.8	%
Avantor Performance Materials, Inc.		Health Care		9.00%, 10/1/2025		13,000				13,318				14,073				0.9	%
Avatar Purchaser, Inc. (c) (j)		Business Services		L+7.50% (10.16%), 11/17/2025		11,716				11,425				11,259				0.7	%
Avaya Holdings Corp. (a) (j)		Communications Equipment		L+4.25% (6.73%), 12/15/2024		26,315				26,106				26,178				1.7	%
Aveanna Healthcare LLC (c)		Health Care		L+5.50% (8.13%), 3/18/2024		6,067				5,813				5,994				0.4	%
Aveanna Healthcare LLC (c) (j)		Health Care		L+4.25% (6.88%), 3/18/2024		790				741				760				0.1	%
BCP Raptor, LLC (j)		Energy Equipment & Services		L+4.25% (6.88%), 6/24/2024		19,180				19,027				17,969				1.2	%
BCP Renaissance, LLC (j)		Energy Equipment & Services		L+3.50% (6.24%), 10/31/2024		3,446				3,432				3,428				0.2	%
BDS Solutions Group, LLC (c)		Business Services		L+8.75% (11.35%), 6/1/2021		6,884				6,815				6,416				0.4	%
BDS Solutions Group, LLC (c) (i)		Business Services		L+8.75% (11.35%), 6/1/2021		25,546				25,295				23,809				1.6	%
Blackboard Inc (j)		Software/Services		L+5.00% (7.78%), 6/30/2021		4,987				4,917				4,895				0.3	%

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

6

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BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2019 (Unaudited)
Portfolio Company (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 Equipment & Services		L+9.00% (11.80%), 11/30/2021		$	13,050			$	12,919			$	12,854			0.9	%
Black Mountain Sand, LLC (c)		Energy Equipment & Services		L+9.00% (11.63%), 11/30/2021		13,050				12,905				12,854				0.9	%
BMC Software Finance, Inc.		Technology		9.75%, 9/1/2026		5,000				4,698				4,848				0.3	%
BMC Software Finance, Inc. (j)		Software		L+4.25% (6.85%), 6/28/2025		23,251				23,034				22,743				1.5	%
Bomgar Corp. (j)		Software		L+4.00% (6.50%), 4/17/2025		1,977				1,969				1,951				0.1	%
BrightSpring (f) (j)		Health care		L+4.50% (6.98%), 3/5/2026		4,583				4,543				4,507				0.3	%
California Resources Corp. (a) (j)		Metals & Mining		L+4.75% (7.25%), 12/31/2022		12,259				12,073				12,037				0.8	%
Capstone Nutrition (fka Integrity Nutraceuticals, Inc.) (c) (l) (o) (t)		Food Products		L+12.50% (15.24%), 9/25/2020		25,629				16,406				3,588				0.2	%
Capstone Nutrition (fka Integrity Nutraceuticals, Inc.) (c) (l) (o) (t)		Food Products		L+12.50% (15.24%), 9/25/2020		56,992				33,647				7,979				0.5	%
Capstone Nutrition (fka Integrity Nutraceuticals, Inc.) (c) (l) (o) (t)		Food Products		L+12.50% (15.24%), 9/25/2020		5,260				4,633				5,234				0.3	%
CareCentrix, Inc. (j)		Health Care		L+4.50% (7.10%), 4/2/2025		13,233				13,161				13,067				0.9	%
CCW, LLC (c) (f)		Hotels, Restaurants & Leisure		L+7.00% (9.50%), 3/18/2021		1,300				1,300				1,235				0.1	%
CCW, LLC (c) (i)		Hotels, Restaurants & Leisure		L+7.00% (9.50%), 3/21/2021		27,156				26,965				25,798				1.7	%
CDHA Holdings, LLC (c) (f)		Health Care		L+6.00% (8.60%), 8/24/2023		683				683				672				—	%
CDHA Holdings, LLC (c) (i)		Health Care		L+6.00% (8.60%), 8/24/2023		15,719				15,512				15,468				1.0	%
Chloe Ox Parent, LLC (c) (i)		Health Care Providers & Services		L+4.50% (7.10%), 12/23/2024		10,660				10,572				10,618				0.7	%
Clarion Events, Ltd (a) (j)		Business Services		L+5.00% (7.63%), 3/22/2025		10,497				10,309				10,209				0.7	%
Clover Technologies Group, LLC (j)		Commercial Services & Supplies		L+4.50% (7.00%), 5/8/2020		13,142				13,118				12,748				0.8	%
Cold Spring Brewing Company (c) (f) (i)		Food & Beverage		L+5.50% (7.98%), 5/15/2024		3,344				3,286				3,290				0.2	%
Community Care Health Network, LLC (j)		Health Care		L+4.75% (7.25%), 2/16/2025		5,114				5,098				5,063				0.3	%
CONSOL Energy Inc. (c) (j)		Metals & Mining		L+4.50% (7.00%), 11/28/2022		4,151				4,130				4,193				0.3	%
Corfin Industries LLC (c) (f)		Industrials		L+6.50% (9.07%), 2/15/2024		382				382				376				—	%
Corfin Industries LLC (c) (i)		Industrials		L+6.25% (8.99%), 2/15/2024		8,550				8,411				8,414				0.6	%
Deva Holdings, Inc. (c) (f) (i)		Consumer Products		L+5.50% (8.74%), 10/31/2023		7,173				7,234				7,245				0.5	%
Digicel Group (a)		Telecom		8.75%, 5/25/2024		10,607				10,547				10,448				0.7	%
Dun & Bradstreet (j)		Business Services		L+5.00% (7.49%), 2/8/2026		10,000				9,803				9,863				0.7	%
Eagle Rx, LLC (c) (i)		Health Care Providers & Services		L+4.75% (7.24%), 8/15/2019		26,794				26,771				26,606				1.8	%
Florida Foods Products, LLC (c) (f)		Food & Beverage		L+6.75% (9.25%), 9/6/2023		1,285				1,285				1,258				0.1	%
Florida Foods Products, LLC (c) (i)		Food & Beverage		L+6.75% (9.25%), 9/6/2025		22,282				21,770				21,770				1.5	%

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

7

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BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2019 (Unaudited)
Portfolio Company (q)		Industry		Investment Coupon Rate / Maturity (y)		Principal / Number of Shares				Amortized Cost				Fair Value				% of Net Assets (b)
Foresight Energy (a) (j)		Industrials		L+5.75% (8.38%), 3/28/2022		$	6,075			$	6,033			$	5,928			0.4	%
Frank Entertainment Group, LLC (c) (l) (p) (t)		Media Entertainment		L+9.00% (11.50%), 7/4/2019		527				440				527				—	%
Frank Entertainment Group, LLC (c) (p) (t)		Media Entertainment		6.00%, 6/30/2019		2,540				1,466				1,100				0.1	%
Frontier Communications (a) (j)		Diversified Telecommunication Services		L+3.75% (6.25%), 6/17/2024		9,894				9,687				9,647				0.6	%
Frontier Communications (a)		Diversified Telecommunication Services		8.00%, 4/1/2027		15,332				15,341				15,871				1.1	%
Gold Standard Baking (c)		Food & Beverage		L+4.50% (7.13%), 4/23/2021		2,968				1,912				1,484				0.1	%
Green Energy Partners/Stonewall LLC (c) (j)		Utilities		L+5.50% (8.10%), 11/15/2021		1,007				1,005				990				0.1	%
Green Energy Partners/Stonewall LLC (c) (j)		Utilities		L+5.50% (8.10%), 11/15/2021		1,334				1,331				1,311				0.1	%
HC Group Holdings III, Inc. (j)		Health Care		L+3.75% (6.25%), 4/7/2022		14,592				14,442				14,519				1.0	%
Hc2 Holdings Inc		Industrials		11.50%, 12/1/2021		10,796				10,676				9,429				0.6	%
ICR Operations, LLC (c) (f)		Business Services		L+5.50% (8.10%), 3/26/2024		111				109				109				—	%
ICR Operations, LLC (c) (i)		Business Services		L+5.50% (8.10%), 3/26/2025		17,460				17,153				17,163				1.1	%
Ideal Tridon Holdings, Inc. (c) (f)		Commercial Services & Supplies		L+6.50% (9.00%), 7/31/2022		2,239				2,216				2,217				0.1	%
Ideal Tridon Holdings, Inc. (c) (i)		Commercial Services & Supplies		L+6.50% (9.08%), 7/31/2023		5,159				5,094				5,107				0.3	%
Ideal Tridon Holdings, Inc. (c) (i)		Commercial Services & Supplies		L+6.50% (9.24%), 7/31/2023		23,609				23,269				23,373				1.6	%
Integral Ad Science, INC. (c) (f) (l)		Advertising		L+7.25% (9.75%), 7/19/2024		14,241				13,992				13,843				0.9	%
Integrated Efficiency Solutions, Inc. (c) (l)		Energy		L+9.25% (12.05%), 6/1/2022		3,825				3,824				3,530				0.2	%
Intelsat Jackson Hldgs SA (a) (j)		Telecom		L+4.50% (6.99%), 1/2/2024		10,000				10,211				10,008				0.7	%
Internap Corporation (a) (c) (i)		Communications Equipment		L+5.75% (8.24%), 4/6/2022		11,850				11,836				11,494				0.8	%
International Cruise & Excursions, Inc. (c) (i)		Consumer		L+5.25% (7.75%), 6/6/2025		5,039				4,990				4,901				0.3	%
IPC Corp. (j)		Diversified Telecommunication Services		L+4.50% (7.25%), 8/6/2021		3,784				3,746				3,043				0.2	%
Iri Holdings Inc (j)		Business Services		L+4.50% (7.13%), 11/30/2025		4,987				4,940				4,909				0.3	%
Iridium Communications, Inc.		Diversified Telecommunication Services		10.25%, 4/15/2023		3,536				3,536				3,891				0.3	%
Kahala Ireland OpCo Designated Activity Company (a) (c) (l) (o)		Aerospace & Defense		L+8.00% (13.00%), 12/23/2028		91,549				91,549				91,549				6.1	%
Kissner Milling Co. Ltd. (a)		Chemicals		8.38%, 12/1/2022		11,294				11,563				11,813				0.8	%
Lakeland Tours, LLC (j)		Diversified Consumer Services		L+4.00% (6.61%), 12/15/2024		9,334				9,274				9,276				0.6	%
Lakeview Health Holdings, Inc. (c)		Health Care		L+8.75% (11.35%), 12/15/2021		3,572				2,678				2,858				0.2	%
Lakeview Health Holdings, Inc. (c) (f)		Health Care		L+8.75% (11.36%), 12/15/2021		124				124				99				—	%
Lightsquared LP (l)		Diversified Telecommunication Services		L+8.75% (11.36%), 12/7/2020		12,969				12,380				9,545				0.6	%

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)

March 31, 2019 (Unaudited)
Portfolio Company (q)		Industry		Investment Coupon Rate / Maturity (y)		Principal / Number of Shares				Amortized Cost				Fair Value				% of Net Assets (b)
Lionbridge Technologies, Inc. (c) (i) (j)		Business Services		L+5.50% (8.00%), 2/28/2024		$	16,131			$	16,059			$	16,067			1.1	%
Loparex International Holding B.V. (j)		Industrials		L+4.25% (6.75%), 4/11/2025		1,988				1,979				1,985				0.1	%
McDermott International (a) (j)		Industrials		L+5.00% (7.50%), 5/10/2025		9,950				9,856				9,518				0.6	%
MCS Acquisition Corp. (c) (j)		Professional Services		L+4.75% (7.25%), 5/18/2024		14,117				14,071				11,011				0.7	%
Medallion Midland Acquisition, L.P. (j)		Energy Equipment & Services		L+3.25% (5.75%), 11/13/2024		4,394				4,386				4,274				0.3	%
Medical Depot Holdings, Inc. (c) (i)		Health Care		L+5.50% (8.10%), 1/3/2023		19,011				17,917				14,638				1.0	%
Micross Solutions LLC (c)		Technology		L+5.50% (8.10%), 8/7/2023		3,122				2,986				3,091				0.2	%
Midwest Can Company, LLC (c) (i)		Energy Equipment & Services		L+5.00% (7.50%), 4/11/2024		4,657				4,618				4,596				0.3	%
Midwest Can Company, LLC (c) (f)		Energy Equipment & Services		P+4.00% (9.50%), 4/11/2023		78				78				77				—	%
Miller Environmental Group (c) (i)		Business Services		L+6.50% (9.13%), 3/15/2024		11,667				11,435				11,434				0.8	%
Miller Environmental Group (c) (f)		Business Services		P+5.50% (11.00%), 3/15/2024		159				159				156				—	%
MLN US Holdco LLC (a) (j)		Technology		L+4.50% (7.00%), 7/11/2025		13,421				13,381				13,160				0.9	%
MMM Holdings, LLC (c) (i) (f)		Health Care		L+6.25% (8.72%), 3/14/2023		3,478				3,415				3,478				0.2	%
MMM Holdings, LLC (c) (i)		Health Care		L+6.25% (8.74%), 3/14/2023		20,321				19,999				20,321				1.3	%
Monitronics International, Inc. (j)		Diversified Consumer Services		L+7.50% (10.10%), 9/30/2022		10,046				10,069				8,364				0.6	%
Montreign Operating Company, LLC (c)		Hotels, Restaurants & Leisure		L+8.25% (10.88%), 1/24/2023		26,884				26,564				24,169				1.6	%
Mood Media Corporation (c) (i) (l)		Business Services		L+7.25% (9.85%), 6/28/2022		14,207				13,998				13,709				0.9	%
Murray Energy Holdings Co. (j)		Energy Equipment & Services		L+7.25% (9.61%), 10/17/2022		9,207				9,075				7,566				0.5	%
National Technical Systems, Inc. (c) (i)		Professional Services		L+6.25% (8.74%), 6/12/2021		17,605				17,535				16,549				1.1	%
Navitas Midstream Midland Basin, LLC (j)		Energy Equipment & Services		L+4.50% (6.99%), 12/13/2024		13,428				13,403				12,757				0.8	%
New Star Metals, Inc. (c) (i)		Business Services		L+6.00% (8.61%), 7/9/2023		22,874				22,441				22,874				1.5	%
Nexeo Plastics		Chemicals		10.13%, 4/1/2026		1,823				1,790				1,859				0.1	%
NexSteppe Inc. (c) (l) (o) (t)		Chemicals		12.00%, 6/30/2019		2,071				1,750				—				—	%
NexSteppe Inc. (c) (l) (o) (t)		Chemicals		12.00%, 6/30/2019		13,952				10,453				—				—	%
NTM Acquisition Corp. (c) (i)		Media		L+6.25% (8.75%), 6/7/2022		19,847				19,698				19,549				1.3	%
Office Depot, Inc. (a) (j)		Specialty Retail		L+5.25% (7.73%), 11/8/2022		5,632				5,549				5,730				0.4	%
ORG Chemical Holdings, LLC (c) (i)		Chemicals		L+5.75% (8.35%), 6/30/2022		27,473				27,116				26,703				1.8	%
ORG GC Holdings, LLC (c) (i)		Business Services		L+6.00% (8.61%), 7/31/2022		25,226				24,974				24,898				1.7	%
Passport Food Group, LLC (c)		Food & Beverage		L+9.00% (11.79%), 3/1/2022		4,470				2,905				2,347				0.2	%
PeopLease Holdings, LLC (c) (i)		Commercial Services & Supplies		L+9.00% (11.60%), 2/26/2021		20,000				19,923				18,000				1.2	%

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)

March 31, 2019 (Unaudited)
Portfolio Company (q)		Industry		Investment Coupon Rate / Maturity (y)		Principal / Number of Shares				Amortized Cost				Fair Value				% of Net Assets (b)
PGX Holdings, Inc. (c) (j)		Transportation Infrastructure		L+5.25% (7.75%), 9/29/2020		$	12,092			$	12,067			$	11,851			0.8	%
Premier Dental Services, Inc. (j)		Health Care		L+5.25% (7.75%), 6/30/2023		32,603				32,409				31,788				2.1	%
Premier Global Services, Inc. (c) (j)		Diversified Telecommunication Services		L+6.50% (9.24%), 12/8/2021		8,715				8,515				5,821				0.4	%
Pride Plating, Inc. (c) (i)		Aerospace & Defense		L+5.50% (8.00%), 6/13/2019		12,066				12,063				12,066				0.8	%
PSKW, LLC (c) (i)		Health Care Providers & Services		L+8.26% (10.87%), 11/25/2021		1,334				1,328				1,334				0.1	%
PSKW, LLC (c)		Health Care Providers & Services		L+8.26% (10.87%), 11/25/2021		17,750				17,592				17,750				1.2	%
PSKW, LLC (c)		Health Care Providers & Services		L+8.26% (10.87%), 11/25/2021		1,972				1,946				1,972				0.1	%
PSKW, LLC (c)		Health Care Providers & Services		L+8.24% (11.04%), 11/25/2021		1,930				1,915				1,930				0.1	%
PT Network, LLC (c) (f)		Health Care		P+4.50% (10.00%), 11/30/2021		1,021				1,021				916				0.1	%
PT Network, LLC (c) (i)		Health Care		L+5.50% (8.30%), 11/30/2021		16,679				16,590				14,994				1.0	%
Questex, Inc. (c) (f) (i)		Media Entertainment		L+6.25% (8.86%), 9/7/2024		16,110				15,818				15,852				1.1	%
Quorum Health Corporation (j)		Health Care		L+6.75% (9.25%), 4/29/2022		7,633				7,701				7,492				0.5	%
Regionalcare Hospital Prtnrs (j)		Health Care		L+4.50% (6.98%), 11/16/2025		19,950				19,577				19,710				1.3	%
Resco Products, Inc. (c)		Metals & Mining		L+4.50% (7.00%), 3/7/2020		10,000				10,000				9,850				0.7	%
RR Donnelley & Sons Co (a) (j)		Publishing		L+5.00% (7.50%), 1/15/2024		9,975				9,904				9,938				0.7	%
SCA Pharmaceuticals, LLC (c)		Health Care		L+9.00% (11.59%), 12/1/2020		2,235				2,163				1,989				0.1	%
Schenectady International Group (j)		Chemicals		L+4.75% (7.35%), 8/21/2025		19,742				19,254				19,692				1.3	%
SCUF Gaming, Inc. (c)		Gaming/Lodging		L+8.50% (10.99%), 12/1/2021		5,477				4,600				4,792				0.3	%
SCUF Gaming, Inc. (c)		Gaming/Lodging		L+8.50% (10.99%), 4/15/2019		335				300				293				—	%
Siena Capital Finance (c) (o)		Financials		12.50%, 8/16/2021		20,000				20,000				20,000				1.3	%
Skillsoft Corp. (j)		Technology		L+4.75% (7.25%), 4/28/2021		24,715				23,433				20,674				1.4	%
SRC Worldwide (c) (f)		Business Services		L+4.50% (6.98%), 3/8/2020		67				67				67				—	%
Squan Holding Corp. (c) (l)		Diversified Telecommunication Services		L+7.00% (9.60%), 10/10/2019		16,672				15,931				12,504				0.8	%
SSH Group Holdings, Inc. (j)		Consumer Products		L+4.25% (6.75%), 7/25/2025		7,805				7,774				7,714				0.5	%
Steel City Media (c)		Media		P+3.50% (9.00%), 3/29/2020		37,935				37,935				37,556				2.5	%
St Augustine (c) (f) (i)		Education		L+4.75% (7.24%), 2/1/2026		24,185				23,594				23,580				1.6	%
StandardAero (j)		Industrials		L+4.00% (6.60%), 4/4/2026		3,880				3,865				3,879				0.3	%
StandardAero (j)		Industrials		L+4.00% (6.60%), 4/4/2026		2,087				2,079				2,086				0.1	%
Subcom (j)		Telecom		L+6.00% (8.49%), 11/2/2025		9,895				9,801				9,746				0.7	%

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)

March 31, 2019 (Unaudited)
Portfolio Company (q)		Industry		Investment Coupon Rate / Maturity (y)		Principal / Number of Shares				Amortized Cost				Fair Value				% of Net Assets (b)
Subsea Global Solutions, LLC (c) (f)		Business Services		L+7.00% (9.59%), 3/28/2023		$	350			$	350			$	338			—	%
Subsea Global Solutions, LLC (c) (i)		Business Services		L+7.00% (9.80%), 3/28/2023		8,390				8,256				8,113				0.5	%
Sutherland Global		Business Services		L+5.38% (7.98%), 4/23/2021		487				459				474				—	%
Sutherland Global		Business Services		L+5.38% (7.98%), 4/23/2021		2,092				1,974				2,037				0.1	%
Tax Defense Network, LLC (c) (l) (p) (t)		Diversified Consumer Services		L+6.00% (8.60%), 4/30/2020		33,461				25,872				8,031				0.5	%
Tillamook Country Smoker, LLC (c) (f)		Food Products		L+5.75% (8.35%), 5/19/2022		2,292				2,292				2,250				0.1	%
Tillamook Country Smoker, LLC (c) (i)		Food Products		L+5.75% (8.39%), 5/19/2022		10,167				10,072				9,984				0.7	%
Tivity Health (j)		Health care		L+4.25% (6.75%), 3/8/2024		1,938				1,919				1,918				0.1	%
Tivity Health (j)		Health care		L+5.25% (7.75%), 3/6/2026		4,607				4,493				4,508				0.3	%
Trademark Global LLC (c)		Consumer Products		L+6.00% (8.50%), 10/1/2022		2,182				2,182				2,156				0.1	%
Transperfect Global, Inc. (c) (i)		Business Services		L+6.75% (9.24%), 5/7/2024		6,790				6,675				6,723				0.5	%
Traverse Midstream Partners, LLC (j)		Energy Equipment & Services		L+4.00% (6.50%), 9/27/2024		6,320				6,295				6,304				0.4	%
Trilogy International Partners, LLC (a)		Diversified Telecommunication Services		8.88%, 5/1/2022		14,875				14,826				14,458				1.0	%
TwentyEighty, Inc. (c) (f) (l) (p)		Media		8.00%, 3/31/2020		6,618				5,715				6,485				0.4	%
TwentyEighty, Inc. (c) (l) (p)		Media		L+8.00% (10.60%), 3/31/2020		269				248				269				—	%
TwentyEighty, Inc. (c) (l) (p)		Media		9.00%, 3/31/2020		6,418				5,596				6,289				0.4	%
USF S&H Holdco, LLC (c) (f)		Hotels, Restaurants & Leisure		L+5.75% (8.55%), 3/16/2023		485				485				480				—	%
USF S&H Holdco, LLC (c) (i)		Hotels, Restaurants & Leisure		L+5.75% (8.35%), 3/19/2024		24,184				23,884				23,943				1.6	%
Veritas US, Inc.		Technology		10.50%, 2/1/2024		1,245				1,221				1,117				0.1	%
Veritas US Inc. (j)		Technology		L+4.50% (7.10%), 1/27/2023		4,186				4,196				3,865				0.3	%
Vertex Aerospace Services (i)		Industrials		L+4.75% (7.25%), 6/16/2025		8,788				8,748				8,793				0.6	%
Von Drehle Corporation (c) (i) (l)		Life Sciences Tools & Services		L+11.50% (14.10%), 3/6/2023		26,432				26,125				23,604				1.6	%
Vyaire Medical, Inc. (c) (j)		Health Care		L+4.75% (7.55%), 4/16/2025		8,918				8,607				7,580				0.5	%
WMK, LLC (c) (i)		Travel Services		L+5.75% (8.23%), 9/5/2025		20,558				20,180				20,167				1.3	%
WMK, LLC (c) (f)		Travel Services		L+5.75% (8.24%), 9/5/2025		873				864				856				0.1	%
WMK, LLC (c) (f)		Travel Services		L+5.75% (8.24%), 9/5/2024		524				524				514				—	%
Xplornet Communications, Inc. (a) (j)		Diversified Telecommunication Services		L+4.00% (6.60%), 9/9/2021		12,832				12,781				12,735				0.8	%
YummyEarth Inc. (c)		Food & Beverage		L+8.50% (11.08%), 8/1/2023		2,626				1,917				2,626				0.2	%
Sub Total Senior Secured First Lien Debt										$	1,835,019			$	1,727,617			114.4	%
Senior Secured Second Lien Debt - 19.4% (b)

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)

March 31, 2019 (Unaudited)
Portfolio Company (q)		Industry		Investment Coupon Rate / Maturity (y)		Principal / Number of Shares				Amortized Cost				Fair Value				% of Net Assets (b)
Anchor Glass Container Corporation (c)		Containers & Packaging		L+7.75% (10.23%), 12/7/2024		$	20,000			$	19,845			$	11,400			0.8	%
Astro AB Merger Sub, Inc. (a) (i)		Diversified Financial Services		L+7.50% (10.24%), 4/30/2023		7,758				7,758				7,739				0.5	%
Asurion Corp (j)		Business Services		L+6.50% (9.00%), 8/4/2025		17,668				17,811				17,881				1.2	%
Baker Hill Acquisition, LLC (c)		Technology		L+11.00% (13.79%), 3/1/2021		3,017				1,508				1,509				0.1	%
Baker Hill Acquisition, LLC (c)		Technology		L+11.00% (13.79%), 3/1/2021		447				397				447				—	%
Boston Market Corporation (c)		Hotels, Restaurants & Leisure		P+7.25% (12.75%), 1/16/2021		23,789				23,783				18,436				1.2	%
BrandMuscle Holdings Inc. (c)		Internet Software & Services		L+8.50% (11.30%), 6/1/2022		24,500				24,260				24,010				1.6	%
Cafe Enterprises, Inc. (c) (t)		Restaurants		P+5.50% (11.00%), 3/31/2019		475				—				—				—	%
Carlisle FoodService Products, Incorporated (c) (i)		Food Products		L+7.75% (10.25%), 3/20/2026		10,719				10,532				10,515				0.7	%
CDS U.S. Intermediate Holdings, Inc. (a) (c)		Hotels, Restaurants & Leisure		L+8.25% (10.75%), 7/8/2023		9,177				8,897				8,186				0.5	%
Constellis Holdings, LLC (c)		Business Services		L+9.00% (11.74%), 4/1/2025		1,117				1,117				1,061				0.1	%
Dentalcorp Perfect Smile ULC (a) (c)		Health Care		L+7.50% (10.00%), 6/1/2026		8,111				8,038				7,990				0.5	%
Dentalcorp Perfect Smile ULC (a) (c) (f)		Health Care		L+7.50% (10.00%), 6/1/2026		1,505				1,490				1,482				0.1	%
Dimora Brands, Inc. (c)		Consumer Products		L+8.50% (11.00%), 8/25/2025		4,470				4,469				4,470				0.3	%
Edelman Financial Services LLC (a) (j)		Financial Services		L+6.75% (9.54%), 6/26/2026		6,764				6,733				6,781				0.5	%
Epic Health Services, Inc. (c)		Health Care Providers & Services		L+8.00% (10.63%), 3/17/2025		15,000				14,831				14,400				1.0	%
Frank Entertainment Group, LLC (c) (p) (t)		Media Entertainment		6.00%, 6/30/2019		724				—				—				—	%
Hyland Software Inc (i)		Technology		L+7.00% (9.50%), 7/7/2025		5,837				5,872				5,805				0.4	%
ICP Industrial, Inc. (c)		Chemicals		L+8.25% (10.74%), 5/3/2024		5,588				5,587				5,532				0.4	%
IDERA, Inc. (c)		Technology		L+9.00% (11.50%), 6/1/2025		1,788				1,788				1,788				0.1	%
KidKraft, Inc. (c) (l)		Consumer Products		12.00%, 3/1/2022		6,325				6,249				6,230				0.4	%
MLN US Holdco LLC (a) (i)		Technology		L+8.75% (11.25%), 7/13/2026		3,000				2,943				2,933				0.2	%
Navicure, Inc. (c)		Health Care		L+7.50% (10.00%), 12/1/2026		1,341				1,341				1,334				0.1	%
Northstar Financial Services Group, LLC (c)		Media Entertainment		L+7.50% (10.08%), 5/25/2026		2,666				2,654				2,666				0.2	%
Oxbow Carbon LLC		Industrials		L+7.50% (10.00%), 1/4/2024		1,395				1,428				1,395				0.1	%
PetVet Care Centers, LLC (c)		Business Services		L+6.25% (8.73%), 2/13/2026		3,539				3,524				3,380				0.2	%
PI US Holdco III Limited (a)		Consumer Finance		L+7.25% (9.75%), 12/20/2025		6,696				6,639				6,428				0.4	%
ProAmpac, LLC (c)		Paper & Packaging		L+8.50% (11.19%), 1/1/2024		3,352				3,351				3,352				0.2	%
Recess Holdings, Inc. (c) (i)		Hotels, Restaurants & Leisure		L+7.75% (10.25%), 9/29/2025		15,008				14,819				14,783				1.0	%

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)

March 31, 2019 (Unaudited)
Portfolio Company (q)		Industry		Investment Coupon Rate / Maturity (y)		Principal / Number of Shares				Amortized Cost				Fair Value				% of Net Assets (b)
Renaissance Holding Corp		Education		L+7.00% (9.50%), 5/25/2026		$	8,456			$	8,304			$	7,723			0.5	%
River Cree Entertainment (a) (c) (z)		Gaming/Lodging		10.00%, 5/17/2025		CAD	21,275			16,406				15,698				1.0	%
SSH Group Holdings, Inc. (c) (i)		Consumer Products		L+8.25% (10.75%), 7/24/2026		10,122				10,029				10,021				0.7	%
St. Croix Hospice Acquisition Corp. (c)		Health Care		L+8.75% (11.25%), 3/1/2024		2,056				1,970				2,056				0.1	%
TierPoint, LLC (c)		Technology		L+7.25% (9.75%), 5/5/2025		5,334				5,293				5,227				0.3	%
Travelpro Products, Inc. (a) (c) (l)		Retail		13.00%, 11/1/2022		2,368				2,368				2,368				0.2	%
Travelpro Products, Inc. (a) (c) (l) (z)		Retail		13.00%, 11/1/2022		CAD	2,744			2,100				2,056				0.1	%
U.S. Auto (c)		Diversified Consumer Services		L+10.50% (12.99%), 6/8/2020		30,000				29,875				30,000				2.0	%
US Salt LLC (c) (i)		Food Products		L+8.63% (11.11%), 1/16/2027		26,968				26,114				26,092				1.7	%
Sub Total Senior Secured Second Lien Debt										$	310,123			$	293,174			19.4	%
Subordinated Debt - 7.9% (b)
Cafe Enterprises, Inc. (c) (t)		Restaurants		14.00%, 9/30/2019		$	3,681			$	—			$	—			—	%
Capital Contractors, Inc. (c) (t)		Business Services		14.00%, 6/30/2020		2,200				—				—				—	%
Captek Softgel International, Inc. (c) (l)		Health Care		11.50%, 1/1/2023		7,019				7,017				6,513				0.4	%
Community Intervention Services, Inc. (c) (l) (t)		Health Care		13.00%, 1/31/2021		5,509				—				—				—	%
Del Real, LLC (c)		Consumer Products		11.00%, 4/1/2023		3,129				2,967				2,876				0.2	%
Dyno Acquiror, Inc. (c) (l)		Business Services		12.00%, 2/1/2020		1,062				1,062				1,062				0.1	%
Frontier Communications (a)		Diversified Telecommunication Services		8.50%, 4/15/2020		15,000				14,138				14,512				1.0	%
HemaSource, Inc. (c) (x)		Health Care		11.00%, 1/1/2024		2,235				2,136				2,190				0.1	%
HTC Borrower, LLC (c) (l)		Technology		13.00%, 9/1/2020		5,675				5,484				5,646				0.4	%
Park Ave RE Holdings, LLC (c) (d) (l) (o)		Real Estate Management & Development		13.00%, 12/31/2021		37,192				37,192				37,192				2.4	%
PCX Aerostructures, LLC (c) (l)		Industrials		6.00%, 8/9/2021		7,525				5,713				5,644				0.4	%
RMP Group, Inc. (c) (l)		Financials		11.50%, 9/1/2022		2,282				2,206				2,271				0.2	%
Steel City Media (c) (l) (t)		Media		16.00%, 3/30/2020		24,490				24,309				20,082				1.3	%
Trademark Global LLC (c) (l)		Consumer Products		11.25%, 4/1/2023		3,308				3,310				3,208				0.2	%
Vantage Mobility International, LLC (c)		Automotive		L+7.75% (10.26%), 9/1/2021		6,863				5,946				5,490				0.4	%
Xplornet Communications, Inc. (a) (l)		Diversified Telecommunication Services		6.25%, 6/1/2022		11,683				11,683				12,092				0.8	%
Sub Total Subordinated Debt										$	123,163			$	118,778			7.9	%
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			$	7,779			0.5	%
NewStar Arlington Senior Loan Program LLC Class FR Notes (a) (c) (p)		Diversified Investment Vehicles		13.49%, 4/25/2031		4,750				4,536				4,617				0.3	%
NewStar Exeter Fund CLO - Debt (a) (c) (p)		Diversified Investment Vehicles		9.97%, 1/20/2027		10,728				9,464				9,252				0.6	%

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)

March 31, 2019 (Unaudited)
Portfolio Company (q)		Industry		Investment Coupon Rate / Maturity (y)		Principal / Number of Shares				Amortized Cost				Fair Value				% of Net Assets (b)
WhiteHorse VIII, Ltd. CLO - Debt (a) (c) (p)		Diversified Investment Vehicles		7.09%, 5/1/2026		$	8,000			$	7,684			$	7,283			0.5	%
Collateralized Securities - Equity Investment (n)
B&M CLO 2014-1, LTD. Subordinated Notes (a) (c) (p) (v)		Diversified Investment Vehicles		0.00%, 4/16/2026		$	40,250			$	9,421			$	7,334			0.5	%
CVP Cascade CLO, LTD. Subordinated Notes (a) (c) (p) (v)		Diversified Investment Vehicles		89.86%, 1/16/2026		31,000				858				927				0.1	%
Figueroa CLO 2014-1, LTD. Subordinated Notes (a) (c) (p) (v)		Diversified Investment Vehicles		4.89%, 1/15/2027		35,057				10,761				7,688				0.5	%
MidOcean Credit CLO II, LLC Income Notes (a) (c) (p) (v)		Diversified Investment Vehicles		8.11%, 1/29/2025		37,600				19,882				18,698				1.2	%
MidOcean Credit CLO III, LLC Subordinated Notes (a) (c) (p) (v)		Diversified Investment Vehicles		13.99%, 7/21/2026		43,300				16,915				16,740				1.1	%
MidOcean Credit CLO IV, LLC Income Notes (a) (c) (p) (v)		Diversified Investment Vehicles		0.00%, 4/15/2027		21,500				11,079				7,577				0.5	%
NewStar Arlington Senior Loan Program LLC Class FR Notes (a) (c) (p) (v)		Diversified Investment Vehicles		17.88%, 7/25/2025		31,603				19,606				23,835				1.6	%
NewStar Exeter Fund CLO - Equity (a) (c) (p) (v)		Diversified Investment Vehicles		16.65%, 1/19/2027		31,575				9,759				10,278				0.7	%
OFSI Fund VI, Ltd. Subordinated Notes (a) (c) (p) (v)		Diversified Investment Vehicles		0.00%, 3/20/2025		38,000				9,519				2,637				0.1	%
Related Fee Agreements (a) (c) (s)		Diversified Investment Vehicles				13,840				3,130				777				0.1	%
WhiteHorse VIII, Ltd. CLO Subordinated Notes (a) (c) (v)		Diversified Investment Vehicles		0.00%, 5/1/2026		36,000				7,924				3,042				0.2	%
Sub Total Collateralized Securities										$	148,538			$	128,464			8.5	%
Equity/Other - 17.3% (b)
Aden & Anais Holdings, Inc (c) (e) (x)		Retail				4,470				$	—			$	—			—	%
Answers Corporation - Common Equity (c) (e) (p)		Technology				908,911				11,361				1,909				0.1	%
Avaya Holdings Corp. (a) (e) (aa)		Communications Equipment				208,402				3,309				3,507				0.2	%
Baker Hill Acquisition, LLC (c) (e)		Technology				22,653				—				—				—	%
California Resources Development JV, LLC - Preferred Equity (a) (c) (o) (u)		Metals & Mining		9.00%		38,858,603				28,402				29,921				2.0	%
California Resources Corp Development JV (a) (c) (o) (u)		Metals & Mining		9.00%		13,427,000				13,158				13,158				0.9	%
Capital Contractors, Inc. (c) (e)		Business Services				45				—				—				—	%
Capital Contractors, Inc. (c) (e)		Business Services				4,470				—				—				—	%
Capstone Nutrition - Common Stock (fka Integrity Nutraceuticals, Inc.) (c) (e) (o)		Food Products				6,023				1,630				—				—	%
Capstone Nutrition - Common Stock (fka Integrity Nutraceuticals, Inc.) (c) (e) (o) (u)		Food Products				24,656				—				—				—	%
Captek Softgel International, Inc. (c) (e) (x)		Health Care				8,498				942				504				—	%
Centerfield Media Holding Company (c) (e)		Business Services				112				245				228				—	%
CRS-SPV, Inc. (c) (e) (o)		Business Services				246				2,219				2,221				0.1	%
CWS Holding Company, LLC (c) (e)		Building Materials				335,255				—				—				—	%

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

14

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BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2019 (Unaudited)
Portfolio Company (q)		Industry		Investment Coupon Rate / Maturity (y)		Principal / Number of Shares				Amortized Cost				Fair Value				% of Net Assets (b)
Danish CRJ LTD. - Common Equity (a) (c) (e) (p) (r)		Aerospace & Defense				5,002				$	—			$	—			—	%
Data Source Holdings, LLC (c) (e)		Media/Entertainment				10,617				140				124				—	%
Del Real, LLC (c) (e) (u)		Consumer Products				670,510				382				201				—	%
Dyno Acquiror, Inc. (c) (e)		Business Services				134,102				58				84				—	%
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)		Health Care				223,503				168				170				—	%
ICP Industrial, Inc. (c) (e)		Chemicals				288				279				340				—	%
Integrated Efficiency Solutions, Inc. (c) (e)		Energy				53,215				56				47				—	%
Integrated Efficiency Solutions, Inc. (c) (e)		Energy				2,975				3				3				—	%
Kahala Ireland OpCo Designated Activity Company - Common Equity (a) (c) (e) (h) (o)		Aerospace & Defense				—				—				32,663				2.2	%
Kahala Ireland OpCo Designated Activity Company - Profit Participating Note (a) (c) (e) (h) (o)		Aerospace & Defense				3,250,000				2,816				3,250				0.2	%
Kahala US OpCo LLC - Class A Preferred Units (a) (c) (e) (k) (o)		Aerospace & Defense		13.00%		4,413,472				—				—				—	%
K-Square Restaurant Partners, LP (c) (e) (x)		Food & Beverage				447				175				—				—	%
Lakeview Health Holdings, Inc. (c) (e)		Health Care				447				—				—				—	%
MIC Holding LLC (c) (e)		Business Services				1,470				3,687				4,082				0.3	%
MIC Holding LLC (c) (e)		Business Services				30,000				3,750				3,822				0.3	%
Micross Solutions LLC (c) (e)		Technology				442,430				223				491				—	%
Mood Media Corporation - Warrants (c) (e)		Business Services				121,021				27				—				—	%
Motor Vehicle Software Corporation (c) (e) (m)		Technology				223,503				318				273				—	%
New Star Metals Inc. - Warrants (c) (e)		Business Services		Expires 12/22/2036		60,841				92				658				—	%
NexSteppe Inc. - Series C Preferred Stock Warrant (c) (e) (o)		Chemicals				237,240				737				—				—	%
NMFC Senior Loan Program I, LLC (a) (o)		Diversified Investment Vehicles				50,000				50,000				47,822				3.2	%
Nomacorc, LLC (c) (e) (m) (u)		Consumer Products				356,816				56				114				—	%
Park Ave RE Holdings, LLC - Common Shares (c) (e) (o) (w)		Real Estate Management & Development				1,000				481				16,450				1.1	%
Park Ave RE Holdings, LLC - Preferred Shares (c) (e) (o) (w)		Real Estate Management & Development		8.00%		47,290				23,645				23,645				1.6	%
Passport Food Group, LLC (c) (e) (x)		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) (f) (g) (p)		Diversified Investment Vehicles				8,436				8,436				8,372				0.6	%
RMP Group, Inc. (c) (e) (u)		Financials				223				164				221				—	%

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)

March 31, 2019 (Unaudited)
Portfolio Company (q)		Industry		Investment Coupon Rate / Maturity (y)		Principal / Number of Shares				Amortized Cost				Fair Value				% of Net Assets (b)
RockYou, Inc. (c) (e)		Advertising				15,105				$	—			$	—			—	%
Schweiger Dermatology Group, LLC (c) (e) (u)		Health Care				265,024				—				—				—	%
SCUF Gaming, Inc. (c) (e)		Gaming/Lodging				6,060				21				122				—	%
Siena Capital Finance (c) (o)		Financials				34,892,500				35,575				35,575				2.4	%
Smile Brands, Inc. (c) (e)		Health Care				669				748				602				—	%
Squan Holding Corp. - Class A Common Stock (c) (e)		Diversified Telecommunication Services				180,835				—				—				—	%
Squan Holding Corp. - Series A Preferred Stock (c) (e)		Diversified Telecommunication Services				8,962				—				—				—	%
St. Croix Hospice Acquisition Corp. (c) (e)		Health Care				112				—				—				—	%
St. Croix Hospice Acquisition Corp. (c) (e)		Health Care				112				64				120				—	%
SYNACOR INC (e) (aa)		Technology				59,785				—				94				—	%
Tax Advisors Group, LLC (c) (e) (u)		Financials				86				609				641				—	%
Tax Defense Network, LLC (c) (e) (p)		Diversified Consumer Services				494,359				—				—				—	%
Tax Defense Network, LLC - Common Equity (c) (e) (p)		Diversified Consumer Services				147,099				425				—				—	%
TCG BDC, Inc. - Common Stock (fka Carlyle GMS Finance, Inc.) (a)		Diversified Investment Vehicles				226				4,336				3,208				0.2	%
Team Waste, LLC (c) (e) (u)		Industrials				111,752				2,234				2,235				0.2	%
Tennenbaum Waterman Fund, L.P. (a) (c) (e) (p)		Diversified Investment Vehicles				10,000				10,000				10,157				0.7	%
THL Credit Greenway Fund II LLC (a) (p)		Diversified Investment Vehicles				7,641				7,641				6,526				0.5	%
Travelpro Products, Inc. (a) (c)		Retail				447,007				506				568				—	%
TwentyEighty, Inc. - Class A Common Equity (c) (p)		Media				54,586				—				2,129				0.2	%
U.S. Auto - Series A Common Units (c) (e) (u)		Diversified Consumer Services				10,000				10				—				—	%
U.S. Auto - Series A Preferred Units (c) (e) (u)		Diversified Consumer Services				490				490				615				—	%
U.S. Auto - Series C Preferred Equity Units (c) (e) (u)		Diversified Consumer Services				56				56				111				—	%
United Biologics, LLC (c) (e) (u)		Health Care				39,769				132				21				—	%
United Biologics, LLC (c) (e) (u)		Health Care				3,155				—				—				—	%
United Biologics, LLC (c) (e) (u)		Health Care				4,206				31				15				—	%
United Biologics, LLC (c) (e) (u)		Health Care				99,236				—				—				—	%
United Biologics, LLC (c) (e) (u)		Health Care				223				35				9				—	%
Vantage Mobility International, LLC (c) (e)		Automotive				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 - Preferred Stock (c) (e) (p)		Consumer Finance				922,669				3,750				3,755				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										$	224,203			$	260,783			17.3	%

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)

March 31, 2019 (Unaudited)
Portfolio Company (q)		Industry		Investment Coupon Rate / Maturity (y)		Principal / Number of Shares				Amortized Cost				Fair Value				% of Net Assets (b)
TOTAL INVESTMENTS - 167.5% (b)										$	2,641,046			$	2,528,816			167.5	%

Forward foreign currency contracts:

Counterparty

Contract to Deliver

In Exchange For

Maturity Date

Unrealized Appreciation/(Depreciation)

Goldman Sachs International

CAD 21,275

$

15,899

4/8/2019

$

(42

)

_____________

(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 73.1% 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 $1,509,944 as of March 31, 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)	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 March 31, 2019.

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)

(f)	The Company has various unfunded commitments to portfolio companies. The remaining amount of these unfunded commitments as of March 31, 2019 are comprised of the following:

March 31, 2019 (Unaudited)
Portfolio Company Name		Investment Type		Commitment Type		Original Commitment				Remaining Commitment
AccentCare, Inc.		Senior Secured First Lien Debt		Delayed draw term loan		$	4,310			$	948
AMI Entertainment Network, LLC		Senior Secured First Lien Debt		Revolver term loan		1,234				1,234
BrightSpring		Senior Secured First Lien Debt		Delayed draw term loan		417				417
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				581
Cold Spring Brewing Company		Senior Secured First Lien Debt		Revolver term loan		238				238
Corfin Industries LLC		Senior Secured First Lien Debt		Revolver term loan		956				574
Dentalcorp Perfect Smile ULC		Senior Secured Second Lien Debt		Delayed draw term loan		2,028				523
Deva Holdings, Inc.		Senior Secured First Lien Debt		Revolver term loan		559				559
Florida Foods Products, LLC		Senior Secured First Lien Debt		Revolver term loan		1,774				362
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				492
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
Midwest Can Company, LLC		Senior Secured First Lien Debt		Revolver term loan		547				469
Miller Environmental Group		Senior Secured First Lien Debt		Delayed draw term loan		2,651				2,651
Miller Environmental Group		Senior Secured First Lien Debt		Revolver term loan		1,324				1,165
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				2,055
PT Network, LLC		Senior Secured First Lien Debt		Revolver term loan		1,316				295
Questex, Inc.		Senior Secured First Lien Debt		Revolver term loan		2,584				2,584
SRC Worldwide		Senior Secured First Lien Debt		Revolver term loan		224				157
St Augustine		Senior Secured First Lien Debt		Revolver term loan		2,615				2,615
Subsea Global Solutions, LLC		Senior Secured First Lien Debt		Revolver term loan		963				613
Tillamook Country Smoker, LLC		Senior Secured First Lien Debt		Revolver term loan		2,696				404
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				1,745
WMK, LLC		Senior Secured First Lien Debt		Revolver term loan		2,618				2,094
Total						$	64,982			$	39,306

(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.

18

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BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

(l)For the three months ended March 31, 2019, the following investments paid or have the option to pay all or a portion of interest and dividends via payment-in-kind (“PIK”):

March 31, 2019 (Unaudited)
Portfolio Company		Investment Type		Cash			PIK			All-in Rate			PIK earned for the three months ended March 31, 2019
Capstone Nutrition (fka Integrity Nutraceuticals)		Senior Secured First Lien Debt		—	%		15.24	%		15.24	%		$	—
Capstone Nutrition (fka Integrity Nutraceuticals)		Senior Secured First Lien Debt		—	%		15.24	%		15.24	%		—
Capstone Nutrition (fka Integrity Nutraceuticals)		Senior Secured First Lien Debt		—	%		15.24	%		15.24	%		—
Frank Entertainment Group, LLC		Senior Secured First Lien Debt		—	%		11.50	%		11.50	%		—
Integral Ad Science, INC.		Senior Secured First Lien Debt		8.50	%		1.25	%		9.75	%		43
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		—	%		11.36	%		11.36	%		363
Mood Media Corporation		Senior Secured First Lien Debt		9.85	%		—	%		9.85	%		—
NexSteppe Inc.		Senior Secured First Lien Debt		—	%		12.00	%		12.00	%		—
NexSteppe Inc.		Senior Secured First Lien Debt		—	%		12.00	%		12.00	%		—
Squan Holding Corp.		Senior Secured First Lien Debt		8.60	%		1.00	%		9.60	%		42
Tax Defense Network, LLC		Senior Secured First Lien Debt		—	%		8.60	%		8.60	%		—
TwentyEighty, Inc.		Senior Secured First Lien Debt		4.00	%		4.00	%		8.00	%		64
TwentyEighty, Inc.		Senior Secured First Lien Debt		0.25	%		8.75	%		9.00	%		135
TwentyEighty, Inc.		Senior Secured First Lien Debt		10.60	%		—	%		10.60	%		—
Von Drehle Corporation		Senior Secured First Lien Debt		14.10	%		—	%		14.10	%		—
KidKraft, Inc.		Senior Secured Second Lien Debt		11.00	%		1.00	%		12.00	%		15
Travelpro Products, Inc.		Senior Secured Second Lien Debt		11.00	%		2.00	%		13.00	%		10
Travelpro Products, Inc.		Senior Secured Second Lien Debt		11.00	%		2.00	%		13.00	%		12
Captek Softgel International, Inc.		Subordinated Debt		10.00	%		1.50	%		11.50	%		26
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		—	%		13.00	%		13.00	%		42
Park Ave RE Holdings, LLC		Subordinated Debt		13.00	%		—	%		13.00	%		—
PCX Aerostructures, LLC		Subordinated Debt		—	%		6.00	%		6.00	%		111
RMP Group, Inc.		Subordinated Debt		10.50	%		1.00	%		11.50	%		6
Steel City Media		Subordinated Debt		—	%		16.00	%		16.00	%		—
Trademark Global LLC		Subordinated Debt		10.00	%		1.25	%		11.25	%		—
Xplornet Communications, Inc.		Subordinated Debt		—	%		6.25	%		6.25	%		—
Total													$	873

(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.

(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 schedule of investments are non-affiliated, non-controlled investments.

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

19

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BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

(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)	Related Fee Agreements consist of five investments with a total fair value of $0.8 million that are classified as Affiliated Investments.

(t)	The investment is on non-accrual status as of March 31, 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 March 31, 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 March 31, 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.

(aa)	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.

20

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BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2019

(Unaudited)

The following table shows the portfolio composition by industry grouping based on fair value at March 31, 2019:

	At March 31, 2019
	Investments at Fair Value				Percentage of Total Portfolio
Health Care	$	312,830			12.4	%
Business Services	262,583				10.4	%
Diversified Investment Vehicles	204,549				8.1	%
Aerospace & Defense	139,528				5.5	%
Hotels, Restaurants & Leisure	130,186				5.1	%
Diversified Telecommunication Services	114,119				4.5	%
Media	106,527				4.2	%
Metals & Mining	87,371				3.5	%
Energy Equipment & Services	82,679				3.3	%
Technology	82,305				3.3	%
Real Estate Management & Development	77,287				3.1	%
Health Care Providers & Services	74,610				3.0	%
Chemicals	65,939				2.6	%
Food Products	65,642				2.6	%
Commercial Services & Supplies	61,445				2.4	%
Industrials	61,385				2.4	%
Financials	58,708				2.3	%
Diversified Consumer Services	56,397				2.2	%
Consumer Products	45,981				1.8	%
Communications Equipment	41,179				1.6	%
Gaming/Lodging	39,486				1.6	%
Food & Beverage	32,775				1.3	%
Education	31,303				1.2	%
Telecom	30,202				1.2	%
Professional Services	27,560				1.1	%
Software	24,694				1.0	%
Internet Software & Services	24,010				0.9	%
Life Sciences Tools & Services	23,604				0.9	%
Travel Services	21,537				0.9	%
Media Entertainment	20,145				0.8	%
Cable	15,150				0.6	%
Advertising	13,843				0.5	%
Transportation Infrastructure	11,851				0.5	%
Containers & Packaging	11,400				0.5	%
Consumer Finance	10,183				0.4	%
Publishing	9,938				0.4	%
Diversified Financial Services	7,739				0.3	%
Financial Services	6,781				0.3	%
Specialty Retail	5,730				0.2	%
Automotive	5,490				0.2	%
Retail	4,992				0.2	%

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

21

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BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

Consumer	$	4,901			0.2	%
Software/Services	4,895				0.2	%
Energy	3,580				0.1	%
Paper & Packaging	3,352				0.1	%
Utilities	2,301				0.1	%
Media/Entertainment	124				—	%
Total	$	2,528,816			100.0	%

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

22

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BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

December 31, 2018
Portfolio Company (q)		Industry		Investment Coupon Rate / Maturity (y)		Principal / Number of Shares				Amortized Cost				Fair Value				% of Net Assets (b)
Senior Secured First Lien Debt - 109.4% (b)
Abaco Systems Holding Corp. (c) (i)		Business Services		L+6.00% (8.41%), 12/7/2021		$	23,456			$	23,177			$	22,980			1.5	%
ABC Financial Intermediate, LLC (c) (j)		Media		L+4.25% (6.64%), 1/2/2025		7,681				7,648				7,681				0.5	%
AccentCare, Inc. (c) (f)		Health Care		L+4.50% (7.04%), 4/2/2019		3,353				3,349				3,323				0.2	%
AccentCare, Inc. (c) (i)		Health Care		L+4.50% (7.30%), 4/3/2024		28,646				28,390				28,388				1.9	%
AHP Health Partners, Inc.		Health Care		9.75%, 7/15/2026		6,589				6,503				6,725				0.5	%
Aleris International, Inc. (j)		Metals & Mining		L+4.75% (7.25%), 2/27/2023		18,294				18,151				18,100				1.2	%
Altice France SA (a)		Cable		8.13%, 2/1/2027		15,000				14,816				14,172				0.9	%
Alvogen Pharma US, Inc. (j)		Health Care		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 Corporation (j)		Consumer Products		L+4.50% (7.00%), 4/5/2024		1,755				1,724				1,722				0.1	%
AMI Entertainment Network, LLC (c) (f) (i)		Hotels, Restaurants & Leisure		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		L+5.75% (8.15%), 8/13/2021		6,568				6,583				6,283				0.4	%
AqGen Ascensus Inc. (j)		Technology		L+3.50% (6.12%), 12/3/2022		8,472				8,465				8,239				0.6	%
Ardent Legacy Acquisitions, Inc. (i)		Health Care		L+4.50% (7.02%), 6/16/2025		18,888				18,711				18,558				1.2	%
Avantor Performance Materials, Inc.		Health Care		9.00%, 10/1/2025		13,000				13,326				13,000				0.9	%
Avatar Purchaser, Inc. (c) (j)		Business Services		L+7.50% (10.16%), 11/17/2025		11,716				11,414				11,229				0.8	%
Avaya Holdings Corp. (a) (j)		Communications Equipment		L+4.25% (6.69%), 12/15/2024		26,382				26,164				25,425				1.7	%
Aveanna Healthcare LLC (c)		Health Care		L+5.50% (8.02%), 3/18/2024		4,694				4,428				4,569				0.3	%
Aveanna Healthcare LLC (c) (j)		Health Care		L+4.25% (6.77%), 3/18/2024		792				742				743				—	%
BCP Raptor, LLC (j)		Energy Equipment & Services		L+4.25% (6.87%), 6/24/2024		19,229				19,068				17,907				1.2	%
BCP Renaissance, LLC (j)		Energy Equipment & Services		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)		Health Care		L+4.00% (6.62%), 8/21/2023		6,514				6,514				6,449				0.4	%
Black Mountain Sand, LLC (c)		Energy Equipment & Services		L+9.00% (11.40%), 11/30/2021		13,050				12,907				12,742				0.9	%
Black Mountain Sand, LLC (c)		Energy Equipment & Services		L+9.00% (11.40%), 11/30/2021		13,050				12,892				12,742				0.9	%
BMC Software Finance, Inc.		Technology		9.75%, 9/1/2026		5,000				4,691				4,575				0.3	%

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

23

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BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

December 31, 2018
Portfolio Company (q)		Industry		Investment Coupon Rate / Maturity (y)		Principal / Number of Shares				Amortized Cost				Fair Value				% of Net Assets (b)
BMC Software Finance, Inc. (j)		Software		L+4.25% (7.05%), 6/28/2025		$	23,309			$	23,083			$	22,428			1.5	%
Bomgar Corp. (j)		Software		L+4.00% (6.55%), 4/17/2025		1,982				1,974				1,907				0.1	%
California Resources Corp. (a) (j)		Metals & Mining		L+4.75% (7.26%), 12/31/2022		12,259				12,060				11,850				0.8	%
Capstone Nutrition (fka Integrity Nutraceuticals, Inc.) (c) (f) (l) (o) (t)		Food Products		L+12.50% (15.03%), 9/25/2020		24,706				16,406				3,459				0.2	%
Capstone Nutrition (fka Integrity Nutraceuticals, Inc.) (c) (l) (o) (t)		Food Products		L+12.50% (15.03%), 9/25/2020		54,940				33,647				7,692				0.5	%
Capstone Nutrition (fka Integrity Nutraceuticals, Inc.) (c) (l) (o) (t)		Food Products		L+12.50% (15.03%), 9/25/2020		3,285				2,829				3,219				0.2	%
CareCentrix, Inc. (j)		Health Care		L+4.50% (7.30%), 4/2/2025		9,604				9,561				9,412				0.6	%
CCW, LLC (c) (f)		Hotels, Restaurants & Leisure		L+7.00% (9.56%), 3/18/2021		1,300				1,300				1,235				0.1	%
CCW, LLC (c) (i)		Hotels, Restaurants & Leisure		L+7.00% (9.56%), 3/21/2021		27,300				27,088				25,935				1.7	%
CDHA Holdings, LLC (c) (f)		Health Care		L+6.00% (8.80%), 8/24/2023		430				430				424				—	%
CDHA Holdings, LLC (c) (i)		Health Care		L+6.00% (8.80%), 8/24/2023		15,759				15,539				15,546				1.0	%
Chloe Ox Parent, LLC (c) (i)		Health Care Providers & Services		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%), 3/22/2025		10,497				10,301				10,268				0.7	%
Clover Technologies Group, LLC (j)		Commercial Services & Supplies		L+4.50% (7.02%), 5/8/2020		13,178				13,149				12,437				0.8	%
Cold Spring Brewing Company (c) (f) (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)		Health Care		L+4.75% (7.27%), 2/16/2025		2,672				2,666				2,592				0.2	%
CONSOL Energy Inc. (c) (j)		Metals & Mining		L+6.00% (8.53%), 11/28/2022		3,208				3,157				3,220				0.2	%
Contura Energy Inc. (a) (c) (j)		Energy Equipment & Services		L+5.00% (7.52%), 3/18/2024		6,448				6,195				6,432				0.4	%
Corfin Industries LLC (c) (f)		Industrials		L+6.50% (8.95%), 2/15/2024		574				574				563				—	%
Corfin Industries LLC (c) (i)		Industrials		L+6.50% (9.00%), 2/15/2024		8,572				8,426				8,420				0.6	%
Deva Holdings, Inc. (c) (f) (i)		Consumer Products		L+6.25% (8.77%), 10/31/2023		7,191				7,256				7,263				0.5	%
DLC Acquisition, LLC (c) (f)		Financials		L+8.00% (10.80%), 12/30/2020		4,340				4,340				4,340				0.3	%
DLC Acquisition, LLC (c) (l)		Financials		12.00%, 12/1/2020		3,325				3,325				3,325				0.2	%
Eagle Rx, LLC (c) (i)		Health Care Providers & Services		L+4.25% (6.60%), 8/15/2019		26,790				26,752				26,589				1.8	%
Florida Foods Products, LLC (c) (f)		Food & Beverage		L+6.75% (9.27%), 9/6/2023		1,021				1,021				997				0.1	%
Florida Foods 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 (a) (j)		Diversified Telecommunication Services		L+3.75% (6.28%), 6/17/2024		9,919				9,702				9,182				0.6	%
Gold Standard Baking		Food & Beverage		L+4.50% (7.31%), 4/23/2021		2,977				1,812				1,786				0.1	%

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

24

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BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

December 31, 2018
Portfolio Company (q)		Industry		Investment Coupon Rate / Maturity (y)		Principal / Number of Shares				Amortized Cost				Fair Value				% of Net Assets (b)
Green Energy Partners/Stonewall LLC (j)		Utilities		L+5.50% (8.30%), 11/15/2021		$	1,010			$	1,008			$	999			0.1	%
Green Energy Partners/Stonewall LLC (j)		Utilities		L+5.50% (8.30%), 11/15/2021		1,337				1,335				1,323				0.1	%
HC Group Holdings III, Inc. (c) (j)		Health Care		L+3.75% (6.27%), 4/7/2022		14,630				14,467				14,630				1.0	%
Hc2 Holdings Inc		Industrials		11.50%, 12/1/2021		10,796				10,666				10,067				0.7	%
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) (f)		Business Services		L+5.50% (8.31%), 3/26/2024		111				109				109				—	%
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) (f)		Commercial Services & Supplies		L+6.50% (9.02%), 7/31/2022		2,021				1,996				1,993				0.1	%
Ideal Tridon Holdings, Inc. (c) (i)		Commercial Services & Supplies		L+6.50% (9.02%), 7/31/2023		5,185				5,116				5,111				0.3	%
Ideal Tridon Holdings, Inc. (c) (i)		Commercial Services & Supplies		L+6.50% (9.02%), 7/31/2023		23,663				23,302				23,324				1.6	%
Integral Ad Science, INC. (c) (f) (l)		Advertising		L+6.00% (8.53%), 7/19/2024		14,198				13,937				13,914				0.9	%
Integrated Efficiency Solutions, Inc. (c) (l)		Energy		L+9.25% (12.05%), 6/1/2022		3,876				3,875				3,760				0.3	%
Intelsat Jackson Hldgs SA (a) (j)		Telecom		L+4.50% (7.01%), 1/2/2024		10,000				10,222				9,910				0.7	%
Internap Corporation (a) (c) (i)		Communications Equipment		L+5.75% (8.19%), 4/6/2022		11,880				11,865				11,648				0.8	%
IPC Corp. (j)		Diversified Telecommunication 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	%
Iridium Communications, Inc.		Diversified Telecommunication Services		10.25%, 4/15/2023		3,536				3,536				3,753				0.3	%
Kahala Ireland OpCo Designated Activity Company (a) (c) (l) (o)		Aerospace & Defense		L+8.00% (13.00%), 12/23/2028		111,549				111,549				111,549				7.5	%
Kissner Milling Co. Ltd. (a)		Chemicals		8.38%, 12/1/2022		21,199				21,472				21,345				1.4	%
Lakeland Tours, LLC (i)		Diversified Consumer Services		L+4.00% (6.79%), 12/15/2024		6,052				6,040				5,881				0.4	%
Lakeview Health Holdings, Inc. (c) (f)		Health Care		L+8.75% (11.55%), 12/15/2021		4,077				3,057				3,262				0.2	%
Lightsquared LP (l)		Diversified Telecommunication Services		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)		Industrials		L+4.25% (7.05%), 4/11/2025		1,993				1,984				1,953				0.1	%
McDermott International (a) (j)		Industrials		L+5.00% (7.52%), 5/10/2025		9,975				9,877				9,285				0.6	%
MCS Acquisition Corp. (c) (j)		Professional Services		L+4.75% (7.27%), 5/18/2024		14,153				14,105				11,464				0.8	%
Medallion Midland Acquisition, L.P. (j)		Energy Equipment & Services		L+3.25% (5.77%), 11/13/2024		4,406				4,396				4,147				0.3	%
Medical Depot Holdings, Inc. (c) (i)		Health Care		L+5.50% (8.30%), 1/3/2023		19,264				18,084				17,492				1.2	%
Micross Solutions LLC (c)		Technology		L+5.50% (8.27%), 8/7/2023		3,163				3,017				3,084				0.2	%

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 (q)		Industry		Investment Coupon Rate / Maturity (y)		Principal / Number of Shares				Amortized Cost				Fair Value				% of Net Assets (b)
Midwest Can Company, LLC (c) (f) (i)		Energy Equipment & Services		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%), 7/11/2025		13,455				13,414				13,009				0.9	%
MMM Holdings, LLC (c) (f)		Health Care		L+6.25% (8.68%), 3/14/2023		3,500				3,432				3,472				0.2	%
MMM Holdings, LLC (c) (i)		Health Care		L+6.25% (8.71%), 3/14/2023		20,449				20,106				20,288				1.4	%
Monitronics International, Inc. (j)		Diversified Consumer Services		L+5.50% (8.30%), 9/30/2022		10,072				10,095				8,901				0.6	%
Montreign Operating Company, LLC (j)		Hotels, Restaurants & Leisure		L+8.25% (10.96%), 1/24/2023		26,957				26,615				24,900				1.7	%
Mood Media Corporation (c) (i) (l)		Business Services		L+7.25% (10.05%), 6/28/2022		14,318				14,092				13,817				0.9	%
Murray Energy Holdings Co. (j)		Energy Equipment & Services		L+7.25% (9.78%), 10/17/2022		9,231				9,089				7,777				0.5	%
National Technical Systems, Inc. (c) (i)		Professional 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 Equipment & Services		L+4.50% (7.00%), 12/13/2024		13,462				13,436				13,387				0.9	%
New Star Metals, Inc. (c) (i)		Business Services		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%, 9/30/2018		2,010				1,750				—				—	%
NexSteppe Inc. (c) (l) (o) (t)		Chemicals		12.00%, 9/30/2018		13,542				10,453				—				—	%
NTM Acquisition Corp. (c) (i)		Media		L+6.25% (8.96%), 6/7/2022		17,692				17,552				17,427				1.2	%
Office Depot, Inc. (a) (j)		Specialty 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)		Commercial Services & Supplies		L+9.00% (11.81%), 2/26/2021		20,000				19,913				17,500				1.2	%
PGX Holdings, Inc. (c) (j)		Transportation Infrastructure		L+5.25% (7.78%), 9/29/2020		12,183				12,154				11,940				0.8	%
Premier Dental Services, Inc. (i) (j)		Health Care		L+5.25% (7.75%), 6/30/2023		32,686				32,480				30,725				2.1	%
Premier Global Services, Inc. (c) (j)		Diversified Telecommunication Services		L+6.25% (8.84%), 12/8/2021		8,843				8,640				7,511				0.5	%
Pride Plating, Inc. (c) (i)		Aerospace & Defense		L+5.50% (8.02%), 6/13/2019		12,222				12,215				12,222				0.8	%
PSKW, LLC (c) (i)		Health Care Providers & Services		L+4.25% (7.05%), 11/25/2021		1,392				1,385				1,392				0.1	%
PSKW, LLC (c)		Health Care Providers & Services		L+8.25% (11.05%), 11/25/2021		17,750				17,578				17,750				1.2	%
PSKW, LLC (c)		Health Care Providers & Services		L+8.25% (11.05%), 11/25/2021		1,972				1,944				1,972				0.1	%
PSKW, LLC (c)		Health Care Providers & Services		L+8.25% (11.05%), 11/25/2021		1,930				1,914				1,930				0.1	%
PT Network, LLC (c) (f)		Health Care		P+4.50% (10.00%), 11/30/2021		658				658				609				—	%
PT Network, LLC (c) (i)		Health Care		L+5.50% (7.93%), 11/30/2021		16,679				16,582				15,448				1.0	%

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 (q)		Industry		Investment Coupon Rate / Maturity (y)		Principal / Number of Shares				Amortized Cost				Fair Value				% of Net Assets (b)
Questex, Inc. (c) (f)		Media Entertainment		L+6.25% (9.02%), 9/7/2024		$	431			$	431			$	423			—	%
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)		Health Care		L+6.75% (9.27%), 4/29/2022		5,212				5,282				5,149				0.3	%
Regionalcare Hospital Prtnrs (a) (j)		Health Care		L+4.50% (7.13%), 11/16/2025		20,000				19,618				18,925				1.3	%
Resco Products, Inc. (c)		Metals & Mining		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	%
SCA Pharmaceuticals, LLC (c)		Health Care		L+9.00% (11.80%), 12/1/2020		2,235				2,152				2,051				0.1	%
Schenectady International Group (j)		Chemicals		L+4.75% (7.19%), 8/21/2025		19,791				19,283				18,999				1.3	%
SCUF Gaming, Inc. (c)		Gaming/Lodging		L+9.50% (12.01%), 12/1/2021		5,434				4,483				4,619				0.3	%
SCUF Gaming, Inc. (c)		Gaming/Lodging		L+9.50% (12.01%), 3/1/2019		335				335				285				—	%
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)		Diversified Telecommunication Services		L+7.00% (9.40%), 10/10/2019		16,804				15,718				12,099				0.8	%
SSH Group Holdings, Inc. (j)		Consumer Products		L+4.25% (6.77%), 7/25/2025		6,043				6,029				5,786				0.4	%
Steel City Media (c)		Media		P+3.50% (9.00%), 3/29/2020		37,956				37,956				37,576				2.5	%
Subcom (j)		Telecom		L+6.00% (8.35%), 11/2/2025		10,020				9,922				9,607				0.7	%
Subsea Global Solutions, LLC (c) (f)		Business Services		L+7.00% (9.78%), 3/28/2023		215				215				208				—	%
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				—	%
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)		Diversified Consumer Services		L+6.00% (10.00%), 4/30/2020		33,028				26,218				7,927				0.5	%
Tillamook Country Smoker, LLC (c)		Food Products		L+5.75% (8.57%), 5/19/2022		3,235				3,235				3,154				0.2	%
Tillamook Country Smoker, LLC (c) (i)		Food Products		L+5.75% (8.40%), 5/19/2022		10,193				10,089				9,942				0.7	%
Trademark Global LLC (c)		Consumer Products		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 Equipment & Services		L+4.00% (6.60%), 9/27/2024		6,352				6,326				6,082				0.4	%
Trilogy International Partners, LLC (a)		Diversified Telecommunication Services		8.88%, 5/1/2022		14,875				14,822				14,257				1.0	%
TwentyEighty, Inc. (c) (l) (p)		Media		8.00%, 3/31/2020		6,553				5,460				6,422				0.4	%
TwentyEighty, Inc. (c) (l) (p)		Media		L+8.00% (10.80%), 3/31/2020		304				274				300				—	%
TwentyEighty, Inc. (c) (f) (l) (p)		Media		8.75%, 3/31/2020		6,283				5,289				6,158				0.4	%

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 (q)		Industry		Investment Coupon Rate / Maturity (y)		Principal / Number of Shares				Amortized Cost				Fair Value				% of Net Assets (b)
US Salt, LLC (c)		Food Products		L+4.75% (7.27%), 12/1/2023		$	1,244			$	1,244			$	1,244			0.1	%
US Salt, LLC (c) (i)		Food Products		L+4.75% (7.27%), 12/1/2023		5,150				5,107				5,150				0.3	%
USF S&H Holdco, LLC (c) (f)		Hotels, Restaurants & Leisure		L+5.75% (8.17%), 3/16/2023		485				485				478				—	%
USF S&H Holdco, LLC (c) (i)		Hotels, Restaurants & Leisure		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 (i)		Industrials		L+4.75% (7.27%), 6/16/2025		8,815				8,774				8,705				0.6	%
Von Drehle Corporation (c) (i) (l)		Life Sciences Tools & Services		L+11.50% (14.30%), 3/6/2023		26,176				25,855				23,373				1.6	%
Vyaire Medical, Inc. (c) (j)		Health Care		L+4.75% (7.14%), 4/16/2025		8,940				8,616				8,270				0.6	%
WMK, LLC (c) (f) (i)		Travel Services		L+5.75% (8.29%), 9/5/2025		20,609				20,216				20,210				1.4	%
Xplornet Communications, Inc. (a) (j)		Diversified Telecommunication Services		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										$	1,751,866			$	1,632,463			109.4	%
Senior Secured Second Lien Debt - 17.6% (b)
Anchor Glass Container Corporation (c)		Containers & Packaging		L+7.75% (10.22%), 12/7/2024		$	20,000			$	19,845			$	11,600			0.8	%
Astro AB Merger Sub, Inc. (a) (c)		Diversified Financial Services		L+7.50% (10.03%), 4/30/2023		7,758				7,758				7,758				0.5	%
Baker Hill Acquisition, LLC (c)		Technology		L+11.00% (13.40%), 3/1/2021		3,017				1,508				1,500				0.1	%
Baker Hill Acquisition, LLC (c)		Technology		L+11.00% (13.40%), 3/1/2021		447				391				447				—	%
Boston Market Corporation (c)		Hotels, Restaurants & Leisure		L+8.25% (10.96%), 12/16/2018		23,851				23,828				19,916				1.3	%
BrandMuscle Holdings Inc. (c)		Internet Software & Services		L+8.50% (10.90%), 6/1/2022		24,500				24,241				24,010				1.6	%
Cafe Enterprises, Inc. (c) (t)		Restaurants		14.00%, 3/31/2019		475				—				—				—	%
Carlisle FoodService Products, Incorporated (c)		Food Products		L+7.75% (10.26%), 3/20/2026		10,719				10,526				10,515				0.7	%
CDS U.S. Intermediate Holdings, Inc. (a) (c)		Hotels, Restaurants & Leisure		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%), 4/1/2025		1,117				1,117				1,061				0.1	%
Dentalcorp Perfect Smile ULC (a) (c)		Health Care		L+7.50% (10.02%), 6/1/2026		8,111				8,035				8,030				0.5	%
Dentalcorp Perfect Smile ULC (a) (c) (f)		Health Care		L+7.50% (10.02%), 6/1/2026		1,156				1,145				1,144				0.1	%
Dimora Brands, Inc. (c)		Consumer Products		L+8.50% (11.02%), 8/25/2025		4,470				4,469				4,470				0.3	%
Edelman Financial Services LLC (a) (j)		Financial Services		L+6.75% (9.19%), 6/26/2026		6,764				6,732				6,426				0.4	%

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 (q)		Industry		Investment Coupon Rate / Maturity (y)		Principal / Number of Shares				Amortized Cost				Fair Value				% of Net Assets (b)
Epic Health Services, Inc. (c) (f) (j)		Health Care Providers & Services		L+8.00% (10.52%), 3/17/2025		$	15,000			$	14,824			$	14,321			1.0	%
Frank Entertainment Group, LLC (c) (p) (t)		Media Entertainment		10.00%, 6/30/2019		724				—				—				—	%
Hyland Software Inc		Food Products		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 Products		12.00%, 3/1/2022		6,309				6,228				6,215				0.4	%
MLN US Holdco LLC (a)		Technology		L+8.75% (11.27%), 7/13/2026		3,000				2,941				2,918				0.2	%
Navicure, Inc. (c)		Health Care		L+7.50% (10.02%), 12/1/2026		1,341				1,341				1,321				0.1	%
Northstar Financial Services Group, LLC (c)		Media Entertainment		L+7.50% (10.12%), 5/25/2026		3,381				3,365				3,381				0.2	%
Oxbow Carbon LLC (c)		Food Products		L+7.50% (10.02%), 1/4/2024		1,395				1,430				1,409				0.1	%
PetVet Care Centers, LLC (c)		Business Services		L+6.25% (8.75%), 2/13/2026		3,539				3,523				3,449				0.2	%
PI US Holdco III Limited (a) (c)		Consumer Finance		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%), 1/1/2024		3,352				3,351				3,352				0.2	%
Recess Holdings, Inc. (c)		Hotels, Restaurants & Leisure		L+7.75% (10.55%), 9/29/2025		15,008				14,812				14,783				1.0	%
Renaissance Holding Corp (j)		Education		L+7.00% (9.50%), 5/25/2026		8,456				8,298				7,751				0.5	%
River Cree Entertainment (a) (c) (z)		Gaming/Lodging		10.00%, 5/17/2025		CAD	21,275			16,399				15,367				1.0	%
SSH Group Holdings, Inc. (c) (j)		Consumer Products		L+8.25% (10.77%), 7/24/2026		10,122				10,026				10,021				0.7	%
St. Croix Hospice Acquisition Corp. (c)		Health Care		L+8.75% (11.27%), 3/1/2024		2,056				1,965				2,056				0.1	%
TierPoint, LLC (c)		Technology		L+7.25% (9.77%), 5/5/2025		5,334				5,292				5,227				0.4	%
Travelpro Products, Inc. (a) (c) (l)		Retail		13.00%, 11/1/2022		2,357				2,356				2,357				0.2	%
Travelpro Products, Inc. (a) (c) (l) (z)		Retail		13.00%, 11/1/2022		CAD	2,731			2,088				2,003				0.1	%
U.S. Auto (c)		Diversified Consumer Services		L+10.50% (12.85%), 6/8/2020		30,000				29,849				29,850				2.0	%
US Salt, LLC (c)		Food Products		L+8.75% (11.14%), 12/1/2024		12,872				12,709				12,872				0.9	%
Sub Total Senior Secured Second Lien Debt										$	278,108			$	262,194			17.6	%
Subordinated Debt - 7.6% (b)
Cafe Enterprises, Inc. (c) (t)		Restaurants		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 Care		11.50%, 1/1/2023		6,992				6,991				6,625				0.4	%
Community Intervention Services, Inc. (c) (l) (t)		Health Care		13.00%, 1/31/2021		5,335				—				—				—	%
Del Real, LLC (c)		Consumer Products		11.00%, 4/1/2023		3,129				2,958				2,926				0.2	%
Dyno Acquiror, Inc. (c) (l)		Business Services		12.00%, 2/1/2020		1,058				1,058				1,058				0.1	%

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

29

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BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

December 31, 2018
Portfolio Company (q)		Industry		Investment Coupon Rate / Maturity (y)		Principal / Number of Shares				Amortized Cost				Fair Value				% of Net Assets (b)
Frontier Communications (a)		Diversified Telecommunication Services		8.50%, 4/15/2020		$	10,000			$	9,490			$	8,888			0.6	%
Frontstreet Facility Solutions, Inc. (c) (p)		Telecom		13.00%, 3/1/2021		1,891				227				189				—	%
HemaSource, Inc. (c) (ac)		Health Care		11.00%, 1/1/2024		2,235				2,131				2,168				0.1	%
HTC Borrower, LLC (c) (l)		Technology		13.00%, 9/1/2020		5,633				5,409				5,604				0.4	%
Park Ave RE Holdings, LLC (c) (d) (l) (o)		Real Estate Management & Development		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	%
Steel City Media (c) (l) (t)		Media		16.00%, 3/30/2020		24,490				24,309				20,082				1.3	%
Trademark Global LLC (c)		Consumer Products		11.25%, 4/1/2023		3,308				3,310				3,241				0.2	%
Vantage Mobility International, LLC (c)		Automotive		L+7.75% (10.28%), 9/1/2021		6,863				5,853				5,696				0.4	%
Xplornet Communications, Inc. (a) (l)		Diversified Telecommunication Services		9.63%, 6/1/2022		11,683				11,683				11,566				0.8	%
Sub Total Subordinated Debt										$	118,407			$	113,049			7.6	%
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 Class FR Notes (a) (c) (p)		Diversified Investment Vehicles		13.77%, 4/25/2031		4,750				4,532				4,425				0.3	%
NewStar Exeter Fund CLO - Debt (a) (c) (p)		Diversified Investment Vehicles		10.26%, 1/20/2027		10,728				9,424				8,580				0.6	%
WhiteHorse VIII, Ltd. CLO - Debt (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 2014-1, LTD. Subordinated Notes (a) (c) (p) (v)		Diversified Investment Vehicles		0.00%, 4/16/2026		$	40,250			$	10,524			$	6,029			0.4	%
CVP Cascade CLO, LTD. Subordinated Notes (a) (c) (p) (v)		Diversified Investment Vehicles		0.00%, 1/16/2026		31,000				974				1,166				0.1	%
Figueroa CLO 2014-1, LTD. Subordinated Notes (a) (c) (p) (v)		Diversified Investment Vehicles		0.00%, 1/15/2027		35,057				11,568				7,468				0.5	%
MidOcean Credit CLO II, LLC Income Notes (a) (c) (p) (v)		Diversified Investment Vehicles		12.07%, 1/29/2025		37,600				20,445				16,534				1.1	%
MidOcean Credit CLO III, LLC Subordinated Notes (a) (c) (p) (v)		Diversified Investment Vehicles		14.97%, 7/21/2026		43,300				16,915				14,651				1.0	%
MidOcean Credit CLO IV, LLC Income Notes (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 Class FR Notes (a) (c) (p) (v)		Diversified Investment Vehicles		17.51%, 7/25/2025		31,603				19,799				24,788				1.6	%
NewStar Exeter Fund CLO - Equity (a) (c) (p) (v)		Diversified Investment Vehicles		12.31%, 1/19/2027		31,575				10,329				11,895				0.8	%
OFSI Fund VI, Ltd. Subordinated Notes (a) (c) (p) (v)		Diversified Investment Vehicles		0.00%, 3/20/2025		38,000				10,003				3,008				0.2	%
Related Fee Agreements (a) (c) (s)		Diversified Investment Vehicles				13,840				3,779				1,321				0.1	%
WhiteHorse VIII, Ltd. CLO Subordinated Notes (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	%

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

30

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BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

December 31, 2018
Portfolio Company (q)		Industry		Investment Coupon Rate / Maturity (y)		Principal / Number of Shares				Amortized Cost				Fair Value				% of Net Assets (b)
Equity/Other - 13.3% (b)
Aden & Anais Holdings, Inc (c) (e) (ac)		Retail				4,470				$	—			$	—			—	%
Answers Corporation - Common Equity (c) (e) (p)		Technology				908,911				11,361				1,909				0.1	%
Avaya Holdings Corp. (a) (e) (aa)		Communications Equipment				207,310				3,292				3,018				0.2	%
Baker Hill Acquisition, LLC (c) (e)		Technology				22,653				—				—				—	%
Cafe Enterprises, Inc. (c) (e)		Restaurants				2,235				—				—				—	%
California Resources Development JV, LLC - Preferred Equity (a) (c) (o) (u)		Metals & Mining		9.00%		38,858,603				28,402				28,973				2.0	%
Capital Contractors, Inc. (c) (e)		Business Services				45				—				—				—	%
Capital Contractors, Inc. (c) (e)		Business Services				4,470				—				—				—	%
Capstone Nutrition - Common Stock (fka Integrity Nutraceuticals, Inc.) (c) (e) (o) (u)		Food Products				6,023				1,630				—				—	%
Capstone Nutrition - Common Stock (fka Integrity Nutraceuticals, Inc.) (c) (e) (o) (u)		Food Products				24,656				—				—				—	%
Captek Softgel International, Inc. (c) (e) (ac)		Health Care				8,498				942				712				0.1	%
Centerfield Media Holding Company (c) (e)		Business Services				112				245				263				—	%
CRS-SPV, Inc. (c) (e)		Business Services				246				2,219				2,221				0.2	%
CWS Holding Company, LLC (c) (e)		Building Materials				335,255				—				—				—	%
Danish CRJ LTD. - Common Equity (a) (c) (e) (p) (r)		Aerospace & Defense				5,002				—				—				—	%
Data Source Holdings, LLC (c) (e)		Media/Entertainment				10,617				140				124				—	%
Del Real, LLC (c) (e) (u)		Consumer Products				670,510				382				297				—	%
Dyno Acquiror, Inc. (c) (e)		Business Services				134,102				58				64				—	%
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)		Telecom				24,114				—				—				—	%
HemaSource, Inc. (c) (e) (ac)		Health Care				223,503				168				185				—	%
ICP Industrial, Inc. (c) (e)		Chemicals				288				279				301				—	%
Integrated Efficiency Solutions, Inc. (c) (e)		Energy				53,215				56				67				—	%
Integrated Efficiency Solutions, Inc. (c) (e)		Energy				2,975				3				3				—	%
Kahala Ireland OpCo Designated Activity Company - Common Equity (a) (c) (e) (h) (o)		Aerospace & Defense				—				—				20,329				1.4	%
Kahala Ireland OpCo Designated Activity Company - Profit Participating Note (a) (c) (e) (h) (o)		Aerospace & Defense				3,250,000				2,831				3,250				0.2	%
Kahala US OpCo LLC - Class A Preferred Units (a) (c) (e) (k) (o)		Aerospace & Defense		13.00%		4,413,472				—				—				—	%
K-Square Restaurant Partners, LP (c) (e) (ac)		Food & Beverage				447				175				16				—	%

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

31

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BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

December 31, 2018
Portfolio Company (q)		Industry		Investment Coupon Rate / Maturity (y)		Principal / Number of Shares				Amortized Cost				Fair Value				% of Net Assets (b)
Lakeview Health Holdings, Inc. (c) (e)		Health Care				447				$	—			$	—			—	%
MIC Holding LLC (c) (e)		Business Services				1,470				3,686				3,947				0.3	%
MIC Holding LLC (c) (e)		Business Services				30,000				4,916				4,798				0.3	%
Micross Solutions LLC (c) (e)		Technology				442,430				223				310				—	%
Mood Media Corporation - Warrants (c) (e)		Business Services				121,021				27				11				—	%
Motor Vehicle Software Corporation (c) (e) (ab)		Technology				223,503				318				260				—	%
New Star Metals Inc. - Warrants (c) (e)		Business Services		Expire 12/22/2036		100,216				151				702				—	%
NexSteppe Inc. - Series C Preferred Stock Warrant (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)		Consumer Products				356,816				56				68				—	%
Park Ave RE Holdings, LLC - Common Shares (c) (e) (o) (w)		Real Estate Management & Development				1,000				102				15,578				1.0	%
Park Ave RE Holdings, LLC - Preferred Shares (c) (e) (o) (w)		Real Estate Management & Development		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) (f) (g) (p)		Diversified Investment Vehicles				8,436				8,436				8,705				0.6	%
RMP Group, Inc. (c) (e) (u)		Financials				223				164				191				—	%
RockYou, Inc. (c) (e)		Advertising				15,105				—				—				—	%
Schweiger Dermatology Group, LLC (c) (e) (u)		Health Care				265,024				—				—				—	%
SCUF Gaming, Inc. (c) (e)		Gaming/Lodging				6,060				21				49				—	%
Smile Brands, Inc. (c) (e)		Health Care				669				747				658				—	%
Squan Holding Corp. - Class A Common Stock (c) (e) (p)		Diversified Telecommunication Services				180,835				—				—				—	%
Squan Holding Corp. - Series A Preferred Stock (c) (e) (p)		Diversified Telecommunication Services				8,962				—				—				—	%
St. Croix Hospice Acquisition Corp. (c) (e)		Health Care				112				—				—				—	%
St. Croix Hospice Acquisition Corp. (c) (e)		Health Care				112				64				100				—	%
SYNACOR INC (e) (aa)		Technology				59,785				—				88				—	%
Tax Advisors Group, LLC (c) (e) (u)		Financials				86				609				638				—	%
Tax Defense Network, LLC (c) (e)		Diversified Consumer Services				351,944				—				—				—	%
Tax Defense Network, LLC - Common Equity (c) (e)		Diversified Consumer Services				147,099				425				—				—	%
TCG BDC, Inc. - Common Stock (fka Carlyle GMS Finance, Inc.) (a)		Diversified Investment Vehicles				226				4,336				2,733				0.2	%
Team Waste, LLC (c) (e) (u)		Industrials				111,752				2,235				2,235				0.2	%
Tennenbaum Waterman Fund, L.P. (a) (c) (e) (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	%

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

32

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BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

December 31, 2018
Portfolio Company (q)		Industry		Investment Coupon Rate / Maturity (y)		Principal / Number of Shares				Amortized Cost				Fair Value				% of Net Assets (b)
Travelpro Products, Inc. (a)		Retail				447,007				$	506			$	541			—	%
TwentyEighty, Inc. - Class A Common Equity (c)		Media				54,586				—				—				—	%
TZ Holdings, Inc. - Preferred Shares (fka Zimbra, Inc.) (c) (e)		Software		Expire 10/25/2023		1,000,000				10				179				—	%
U.S. Auto - Series A Common Units (c) (e) (u)		Diversified Consumer Services				10,000				10				—				—	%
U.S. Auto - Series A Preferred Units (c) (e) (u)		Diversified Consumer Services				490				490				571				—	%
U.S. Auto - Series C Preferred Equity Units (c) (e) (u)		Diversified Consumer Services				56				56				111				—	%
United Biologics, LLC (c) (e) (u)		Health Care				39,769				132				18				—	%
United Biologics, LLC (c) (e) (u)		Health Care				3,155				—				—				—	%
United Biologics, LLC (c) (e) (u)		Health Care				4,206				31				15				—	%
United Biologics, LLC (c) (e) (u)		Health Care				99,236				—				—				—	%
United Biologics, LLC (c) (e) (u)		Health Care				223				35				9				—	%
Vantage Mobility International, LLC (c) (e)		Automotive				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 - Preferred Stock (c) (e) (p)		Consumer Finance				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.

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

33

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BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

(f)	The Company has various unfunded commitments to portfolio companies. The remaining amount of these unfunded commitments as of December 31, 2018 are comprised of the following:

December 31, 2018
Portfolio Company Name		Investment Type		Commitment Type		Original Commitment				Remaining Commitment
AccentCare, Inc.		Senior Secured First Lien Debt		Delayed draw term loan		$	4,310			$	948
AMI Entertainment Network, LLC		Senior Secured First Lien Debt		Revolver term loan		1,234				1,234
Capstone Nutrition (fka Integrity Nutraceuticals)		Senior Secured First Lien Debt		Delayed draw term loan		4,691				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 Company		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
Epic Health Services, Inc		Senior Secured Second Lien Debt		Delayed draw term loan		1,373				1,373
Florida Foods Products, LLC		Senior Secured First Lien Debt		Revolver term loan		1,774				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		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						$	61,813			$	36,809

(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.

34

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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. (ad)		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 Corporation		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 (ad)		Senior Secured First Lien Debt		—	%		9.08	%		9.08	%		162
Pure Barre, LLC (ad)		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 (ad)		Senior Secured First Lien Debt		9.35	%		—	%		9.35	%		85
Von Drehle Corporation		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. (ad)		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 (ad)		Subordinated Debt		—	%		11.50	%		11.50	%		1
Orchid Underwriters Agency, LLC (ad)		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. (ad)		Subordinated Debt		11.00	%		3.00	%		14.00	%		13
Smile Brands, Inc. (ad)		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.

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

35

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BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

(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 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)	Related Fee Agreements consist of five investments with a total fair value of $1.3 million that are classified as Affiliated Investments.

(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)	Investment sold during the year ended December 31, 2018.

        

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

36

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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
Health Care	$	286,298			12.3	%
Diversified Investment Vehicles	206,795				8.9	%
Business Services	206,643				8.9	%
Aerospace & Defense	147,350				6.3	%
Hotels, Restaurants & Leisure	131,283				5.6	%
Media	101,929				4.4	%
Diversified Telecommunication Services	91,991				3.9	%
Energy Equipment & Services	89,175				3.8	%
Chemicals	89,161				3.8	%
Technology	85,767				3.7	%
Real Estate Management & Development	76,415				3.3	%
Health Care Providers & Services	74,655				3.2	%
Metals & Mining	71,993				3.1	%
Commercial Services & Supplies	60,365				2.6	%
Food Products	57,247				2.5	%
Industrials	54,670				2.3	%
Diversified Consumer Services	53,241				2.3	%
Consumer Products	44,180				1.9	%
Communications Equipment	40,091				1.7	%
Gaming/Lodging	38,625				1.7	%
Food & Beverage	35,248				1.5	%
Professional Services	28,053				1.2	%
Software	24,514				1.0	%
Internet Software & Services	24,010				1.0	%
Life Sciences Tools & Services	23,373				1.0	%
Media Entertainment	21,103				0.9	%
Travel Services	20,210				0.9	%
Telecom	19,706				0.8	%
Cable	14,172				0.6	%
Advertising	13,914				0.6	%
Transportation Infrastructure	11,940				0.5	%
Containers & Packaging	11,600				0.5	%
Financials	10,748				0.5	%
Consumer Finance	10,420				0.4	%
Publishing	9,775				0.4	%
Diversified Financial Services	7,758				0.3	%
Education	7,751				0.3	%
Financial Services	6,426				0.3	%
Specialty Retail	5,894				0.3	%
Automotive	5,696				0.2	%
Retail	4,901				0.2	%
Energy	3,830				0.2	%

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

37

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BUSINESS DEVELOPMENT CORPORATION OF AMERICA

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

Paper & Packaging	$	3,352			0.1	%
Utilities	2,322				0.1	%
Media/Entertainment	124				—	%
Total	$	2,334,714			100.0	%

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

38

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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 March 31, 2019

(Unaudited)

Note 1 — Organization and Basis of Presentation

Business Development Corporation of America (the “Company”) 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 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 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.

During the three months ended March 31, 2019, the Company invested approximately $283.0 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 March 31, 2019, the Company held investments in loans it made to investee companies with aggregate principal amounts of $2,366.2 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.

39

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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 March 31, 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 March 31, 2019, the Company had issued 212.6 million shares of common stock for gross proceeds of $2.2 billion including the shares purchased by affiliates and shares issued under the Company's distribution reinvestment plan (“DRIP”). As of March 31, 2019, the Company had repurchased a cumulative 23.4 million shares of common stock through its share repurchase program for payments of $204.3 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 Accounting Standards Codification ("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. In conjunction with the consolidation of subsidiaries, the Company recognizes 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.

40

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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 March 31, 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 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 Regulation S-X and 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 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).

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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 March 31, 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. In addition, prior period consolidated financial statements may have been reclassified to present investment industry classifications in a consistent manner with the current year.

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 March 31, 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.

42

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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 March 31, 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 $0.001780822 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 accrue 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.

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

43

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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 March 31, 2019

(Unaudited)

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 Gains or Losses and Net Change in Unrealized Appreciation or Depreciation

Gains or losses on the sale of investments are calculated using the specific identification method. The Company measures realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, 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 gains or losses are 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 in the current reporting period 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.

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:

44

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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 March 31, 2019

(Unaudited)

•	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 March 31, 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 March 31, 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.

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.

45

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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 March 31, 2019

(Unaudited)

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 March 31, 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	$	—			$	679,337			$	1,048,280			$	—			$	1,727,617
Senior Secured Second Lien Debt	—				56,685				236,489				—				293,174
Subordinated Debt	—				26,604				92,174				—				118,778
Collateralized Securities	—				—				128,464				—				128,464
Equity/Other	3,601				3,208				181,097				72,877				260,783
Total	$	3,601			$	765,834			$	1,686,504			$	72,877			$	2,528,816

______________

⁽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	$	—			$	579,960			$	1,052,503			$	—			$	1,632,463
Senior Secured Second Lien Debt	—				22,823				239,371				—				262,194
Subordinated Debt	—				20,454				92,595				—				113,049
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

______________

⁽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.

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 March 31, 2019

(Unaudited)

The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the three months ended March 31, 2019:

	Senior Secured First Lien Debt				Senior Secured Second Lien Debt				Subordinated Debt				Collateralized Securities				Equity/Other				Total
Balance as of December 31, 2018	$	1,052,503			$	239,371			$	92,595			$	127,212			$	117,107			$	1,628,788
Net change in unrealized appreciation (depreciation) on investments	(4,903		)		(1,252		)		(529		)		7,643				16,125				17,084
Purchases and other adjustments to cost	79,754				27,681				335				55				47,616				155,441
Sales and redemptions	(52,797		)		(13,649		)		(123		)		(6,446		)		(312		)		(73,327		)
Net realized gains (losses)	(444		)		165				(104		)		—				561				178
Transfers in	20,132				—				—				—				—				20,132
Transfers out	(45,965		)		(15,827		)		—				—				—				(61,792		)
Balance as of March 31, 2019	$	1,048,280			$	236,489			$	92,174			$	128,464			$	181,097			$	1,686,504
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:	$	(5,576	)		$	(1,088	)		$	(567	)		$	7,643			$	16,294			$	16,706

Purchases represent the acquisition of new investments at cost. Redemptions represent principal payments received during the period.

For the three months ended March 31, 2019, there were no transfers out of Level 1 to Level 2. For the three months ended March 31, 2019, investments in four companies were transferred out of Level 2 to Level 3. For the three months ended March 31, 2019, investments in seven companies were transferred from Level 3 to Level 2 as the number of observable market quotes increased.

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	$	1,254,503			$	203,881			$	61,089			$	160,195			$	103,738			$	1,783,406
Net change in unrealized appreciation (depreciation) on investments	(2,206		)		(14,721		)		(1,404		)		5,618				(5,362		)		(18,075		)
Purchases and other adjustments to cost	454,338				100,363				57,183				22,103				49,838				683,825
Sales and redemptions	(669,650		)		(58,890		)		(24,407		)		(29,822		)		(37,962		)		(820,731		)
Net realized gains (losses)	(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	$	1,052,503			$	239,371			$	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:	$	(18,972	)		$	(14,413	)		$	(1,763	)		$	859			$	(2,169	)		$	(36,458	)

47

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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 March 31, 2019

(Unaudited)

Purchases represent the acquisition of new investments at cost. Redemptions 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 March 31, 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	$	1,835,019			$	1,727,617			68.3	%
Senior Secured Second Lien Debt	310,123				293,174				11.6
Subordinated Debt	123,163				118,778				4.7
Collateralized Securities	148,538				128,464				5.1
Equity/Other	224,203				260,783				10.3
Total	$	2,641,046			$	2,528,816			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	$	1,751,866			$	1,632,463			70.0	%
Senior Secured Second Lien Debt	278,108				262,194				11.2
Subordinated Debt	118,407				113,049				4.8
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	%

48

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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 March 31, 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 March 31, 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 (b)		$	533,488			Discounted Cash Flow		Market Yield		6.59	%		19.78	%		10.32	%
Senior Secured First Lien Debt (b)		$	273,979			Yield Analysis		Market Yield		6.84	%		20.74	%		11.86	%
Senior Secured First Lien Debt (b)		$	10,405			Waterfall Analysis		EBITDA Multiple		3.75x			7.25x			5.51x
Senior Secured First Lien Debt (b) (c)		$	2,347			Waterfall Analysis		Revenue Multiple		0.3x			0.3x			0.3x
Senior Secured Second Lien Debt (d)		$	160,561			Yield Analysis		Market Yield		10.25%			30.04%			14.06%
Senior Secured Second Lien Debt (d)		$	36,481			Discounted Cash Flow		Market Yield		9.72	%		14.84	%		12.09	%
Senior Secured Second Lien Debt (d)		$	1,956			Waterfall Analysis		Revenue Multiple		1.63x			1.63x			1.63x
Subordinated Debt (e)		$	29,257			Yield Analysis		Market Yield		12.21%			25.01%			16.03%
Subordinated Debt (c ) (e)		$	5,644			Waterfall		EBITDA Multiple		6.00x			6.00x			6.00x
Collateralized Securities		$	128,464			Discounted Cash Flow		Discount Rate		6.75	%		40.00	%		17.89	%
Equity/Other (f)		$	43,080			Discounted Cash Flow		Market Yield		11.31	%		11.31	%		11.31	%
Equity/Other (f)		$	35,913			Waterfall Analysis		Discount Rate		15.50	%		15.50	%		15.50	%
Equity/Other (f)		$	14,979			Waterfall Analysis		EBITDA Multiple		4.25x			12.0x			7.08x
Equity/Other (f)		$	726			Waterfall		TBV Multiple		1.5x			1.5x			1.5x
Equity/Other (f)		$	658			Enterprise Valuation		EBITDA Multiple		7.25x			7.25x			7.25x
Equity/Other (f)		$	46			Waterfall		Revenue Multiple		0.15x			0.15x			0.15x

______________

(a)	Weighted averages are calculated based on fair value of investments.

(b)	The remaining $228.1 million of senior secured first lien debt consisted of $91.6 million which was valued using other analysis technique, $76.4 million which were valued using a Scenario-Based analysis technique factoring in various unobservable inputs, and $60.1 million which were valued based on their respective acquisition prices as the investments closed near year end.

(c)	Weighted average not applicable as this asset category contains one investment.

(d)	The remaining $37.5 million of senior secured second lien debt consisted of $26.1 million which was valued based on their respective acquisition prices as the investments closed near year end and $11.4 million which was valued using a Scenario-Based analysis technique factoring in various unobservable inputs.

(e)	The remaining $57.3 million of subordinated debt consisted of $37.2 million of discount rate valuation techniques and $20.1 valued using a Scenario-Based analysis technique factoring in various unobservable inputs.

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 March 31, 2019

(Unaudited)

(f)	The remaining $85.7 million of equity/other investments consisted of $40.1 million valued with other techniques and discount rate, $35.6 million which were valued based on their respective acquisition prices as the investments closed near year end, $7.8 million were valued using the Current Method, and $2.2 million were valued using the waterfall technique.

There were no significant changes in valuation approach or technique as of March 31, 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.

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 March 31, 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)		$	566,295			Discounted Cash Flow		Market Yield		6.98	%		18.95	%		10.44	%
Senior Secured First Lien Debt (b)		$	290,597			Yield Analysis		Market Yield		6.50	%		19.43	%		11.55	%
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)		$	54,800			Discounted Cash Flow		Market Yield		10.05	%		15.44	%		12.29	%
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)		$	29,572			Yield Analysis		Market Yield		11.63	%		21.84	%		15.14	%
Subordinated Debt (c) (e)		$	5,560			Waterfall		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		Appraisal Value		21,923.96			21,923.96			N/A
Equity/Other (f)		$	682			Waterfall		TBV Multiple		1.45x			1.45x			1.45x
Equity/Other (f)		$	42			Waterfall		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 $183.5 million of senior secured first lien debt consisted of $72.0 million which were valued using a Scenario-Based analysis technique factoring in various unobservable inputs.

(c)	Weighted average not applicable as this asset category contains one investment.

51

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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 March 31, 2019

(Unaudited)

(d)	The remaining $11.6 million of senior secured second lien debt were valued using a Scenario-Based analysis technique factoring in various unobservable inputs.

(e)	The remaining $20.1 million of subordinated debt were valued using a Scenario-Based analysis technique factoring in various unobservable inputs.

(f)	The remaining $45.8 million of equity/other investments were 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 March 31, 2019, the Company had eight portfolio companies, which represented fifteen investments, on non-accrual status with a total principal amount of $177.5 million, amortized cost of $119.0 million, and fair value of $46.5 million which represented 5.6%, 4.5% and 1.8% 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. The base management fee is payable quarterly in arrears. 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. 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. The base management fee for any partial month or quarter is appropriately pro-rated.

As of March 31, 2019 and December 31, 2018, $9.4 million and $9.7 million was payable to the Adviser for base management fees, respectively.

For the three months ended March 31, 2019 and 2018, the Company incurred $9.4 million and $10.0 million, respectively, in base management fees under the Investment Advisory Agreement.

52

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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 March 31, 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, realized capital 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 March 31, 2019 and December 31, 2018, $8.2 million and $5.7 million was payable to the Adviser for the incentive fee on income, respectively.

For the three months ended March 31, 2019 and 2018, the Company incurred $6.8 million and $4.6 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.

Administration Agreement

In connection with the Administration Agreement, BSP provides the Company with office facilities and administrative services. As of March 31, 2019 and December 31, 2018, $1.3 million and $0.7 million was payable to BSP under the Administration Agreement, respectively.

For the three months ended March 31, 2019 and 2018, the Company incurred $0.6 million and $0.7 million, respectively, in administrative service fees under the Administration Agreement.

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 March 31, 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 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 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 months ended March 31, 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 maintains 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.

54

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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 March 31, 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 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. 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. The Citi Credit Facility was amended on November 28, 2017 to extend the investment period to May 31, 2019. The Citi Credit Facility has a maturity date of May 28, 2020.

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.

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 March 31, 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 has been 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 the initial purchasers, 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 purchasers in a private placement in reliance on Section 4(a)(2) of the Securities Act and for initial resale by the initial purchasers 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 purchasers. 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 purchasers 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 purchasers’ 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 the Indenture, dated as of August 31, 2015, between the Company and 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.

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 March 31, 2019

(Unaudited)

2022 Notes

On December 14, 2017, the Company entered into a Purchase Agreement (the “2022 Notes Purchase Agreement”) with Sandler O’Neill & Partners, L.P (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 an Indenture dated as of December 19, 2017 (the “Indenture”), between the Company and U.S. Bank National Association, trustee (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 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.

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 March 31, 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 million aggregate principal amount of its 5.375% fixed rate notes due 2023 (the “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 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 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.

The weighted average annualized interest cost for all borrowings for the three months ended March 31, 2019 and 2018 was 4.83% and 4.36%, respectively. The average daily debt outstanding for the three months ended March 31, 2019 and 2018 was $958.8 million and $1.1 billion, respectively. The maximum debt outstanding for the three months ended March 31, 2019 and 2018 was $1.0 billion and $1.2 billion, respectively.

58

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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 March 31, 2019

(Unaudited)

The following table represents borrowings as of March 31, 2019:

		Maturity Date		Total Aggregate Borrowing Capacity				Total Principal Outstanding				Less Deferred Financing Costs				Amount per Balance Sheet
Wells Fargo Credit Facility		5/9/2023		$	600,000			$	402,651			$	(8,211	)		$	394,440
Citi Credit Facility		5/28/2020		400,000				313,500				(930		)		312,570
2023 Notes		5/30/2023		60,000				59,729				(786		)		58,943
2022 Notes		12/30/2022		150,000				149,381				(1,711		)		147,670
2020 Notes		9/1/2020		100,000				99,551				(179		)		99,372
Totals				$	1,310,000			$	1,024,812			$	(11,817	)		$	1,012,995

    

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 Balance Sheet
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 months ended March 31, 2019:

	Three months ended March 31, 2019
	Interest Rate		Non-Usage Rate		Interest Expense				Deferred Financing Costs (3)				Other Fees (4)
Wells Fargo Credit Facility	(1)		(2)		$	4,144			$	468			$	544
Citi Credit Facility	L+1.60%		0.50%		3,352				198				136
2023 Notes	5.38%		n/a		822				47				—
2022 Notes	4.75%		n/a		1,822				112				—
2020 Notes	6.00%		n/a		1,578				31				4
Totals					$	11,718			$	856			$	684

______________

⁽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 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%.

⁽³⁾ Amortization of deferred financing costs.

⁽⁴⁾ Includes non-usage fees and custody fees.

59

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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 March 31, 2019

(Unaudited)

The following table represents interest and debt fees for the three months ended March 31, 2018:

	Three months ended March 31, 2018
	Interest Rate		Non-Usage Rate		Interest Expense				Deferred Financing Costs (3)				Other Fees (4)
Wells Fargo Credit Facility	(1)		(2)		$	2,161			$	355			$	498
Citi Credit Facility	L+1.60%		0.50%		2,798				195				96
UBS Credit Facility	L+4.05%		n/a		3,372				103				25
2022 Notes	4.75%		n/a		1,822				112				4
2020 Notes	6.00%		n/a		1,578				31				—
JPMC PB Account	L+0.90%		n/a		300				—				—
Totals					$	12,031			$	796			$	623

______________

⁽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 March 31, 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 March 31, 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 March 31, 2019 and 2018, the Company's borrowings would be deemed to be Level 3, as defined in Note 3.

60

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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 March 31, 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 March 31, 2019				Fair Value at March 31, 2019
Wells Fargo Credit Facility	3		$	402,651			$	402,651
Citi Credit Facility	3		313,500				313,500
2023 Notes	3		59,729				61,746
2022 Notes	3		149,381				152,025
2020 Notes	3		99,551				102,820
			$	1,024,812			$	1,032,742

	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 March 31, 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 March 31, 2019, the Company had unfunded commitments on delayed draw term loans of $13.9 million, unfunded commitments on revolver term loans of $23.4 million and unfunded equity capital commitments of $2.1 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 unfunded commitments are disclosed in the Company's consolidated schedule of investments. The Company maintains sufficient cash on hand and available borrowings to fund such unfunded commitments.

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.

61

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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 March 31, 2019

(Unaudited)

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.

Guarantees

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).

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.

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 March 31, 2019, the Company sold 212.6 million shares of common stock for gross proceeds of $2.2 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 March 31, 2019, the Company had repurchased 23.4 million shares of common stock through its share repurchase program for payments of $204.3 million.

The following table reflects the common stock activity for the three months ended March 31, 2019 (dollars in thousands except share amounts):

		Shares			Value
Shares Sold		—			$	—
Shares Issued through DRIP		1,087,268			8,916
Share Repurchases		(2,241,001	)		(18,376		)
		(1,153,733	)		$	(9,460	)

    

The following table reflects the common stock activity for the year ended December 31, 2018 (dollars in thousands except share amounts):

		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

62

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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 March 31, 2019

(Unaudited)

The following table reflects the stockholders' equity activity for the three months ended March 31, 2019 (dollars in thousands except share amounts):

	Three Months Ended March 31, 2019
	Common stock - shares			Common stock - par				Additional paid in capital				Total distributable (loss) earnings				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 gains (losses) from investment transactions	—			—				—				(1,911		)		1,292				(619		)
Net change in unrealized appreciation on investments	—			—				—				30,579				—				30,579
Repurchases	(2,241,001	)		(2		)		(18,374		)		—				—				(18,376		)
Distributions to stockholders	1,087,268			—				—				(30,441		)		—				(30,441		)
Reinvested dividends	—			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

The following table reflects the stockholders' equity activity for the three months ended March 31, 2018 (dollars in thousands except share amounts):

	Three Months Ended March 31, 2018
	Common stock - shares			Common stock - par				Additional paid in capital				Total distributable (loss) earnings				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 losses from investment transactions	—			—				—				(34,409		)		—				(34,409		)
Net change in unrealized appreciation (depreciation) on investments	—			—				—				30,231				(314		)		29,917
Repurchases	(2,711,841	)		(3		)		(22,546		)		—				—				(22,549		)
Distributions to stockholders	1,223,362			1				10,166				(28,727		)		—				(18,560		)
Reinvested dividends	—			—				—				—				—				—
Balance as of March 31, 2018	178,245,519			$	178			$	1,740,413			$	(268,029	)		$	2,502			$	1,475,064

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;

•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.

63

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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 March 31, 2019

(Unaudited)

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 six 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

Share amounts in the table above represent amounts filed in the tender offer.

Through March 31, 2019, the Company had repurchased an aggregate of 23.4 million shares of common stock for payments of $204.3 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 March 31, 2019 and 2018.

64

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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 March 31, 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 months ended March 31, 2019 and 2018.

	For the Three Months Ended March 31,
	2019				2018
Basic and diluted
Net increase in net assets resulting from operations	$	55,832			$	21,976
Weighted average common shares outstanding	189,950,319				179,247,608
Net increase in net assets resulting from operations per share	$	0.29			$	0.12

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 $0.001780822 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 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 gains proceeds from the sale of assets and non-capital gains 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 March 31, 2019, the Company had accrued $10.4 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.

65

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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 March 31, 2019

(Unaudited)

The table below reflects the cash distributions per share that the Company has paid on its common stock since January 2017.

Record Date		Payment Date		Per share				Distributions Paid in Cash				Distributions Paid Through the DRIP				Total Distributions Paid
2017:
January 31, 2017		February 3, 2017		$	0.07			$	7,983			$	5,081			$	13,064
February 28, 2017		March 1, 2017		0.07				7,250				4,612				11,862
March 31, 2017		April 3, 2017		0.07				8,135				5,060				13,195
April 30, 2017		May 1, 2017		0.07				7,942				4,881				12,823
May 31, 2017		June 1, 2017		0.07				8,270				4,995				13,265
June 30, 2017		July 3, 2017		0.07				8,064				4,813				12,877
July 31, 2017		August 3, 2017		0.06				6,307				3,692				9,999
August 31, 2017		September 1, 2017		0.06				6,223				3,622				9,845
September 30, 2017		October 2, 2017		0.05				6,060				3,477				9,537
October 31, 2017		November 1, 2017		0.06				6,303				3,574				9,877
November 30, 2017		December 1, 2017		0.05				6,140				3,443				9,583
December 31, 2017		January 2, 2018		0.06				6,388				3,535				9,923
								$	85,065			$	50,785			$	135,850
2018:
January 31, 2018		February 1, 2018		$	0.06			$	6,443			$	3,503			$	9,946
February 28, 2018		March 1, 2018		0.05				5,809				3,129				8,938
March 31, 2018		April 1, 2018		0.05				6,436				3,407				9,843
April 30, 2018		May 1, 2018		0.05				6,288				3,255				9,543
May 31, 2018		June 1, 2018		0.06				6,577				3,309				9,886
June 29, 2018		July 2, 2018		0.05				6,405				3,182				9,587
July 31, 2018		August 1, 2018		0.06				6,670				3,258				9,928
August 31, 2018		September 4, 2018		0.06				6,687				3,188				9,875
September 28, 2018		October 1, 2018		0.05				6,459				3,061				9,520
October 31, 2018		November 1, 2018		0.05				6,713				3,144				9,857
November 30, 2018		December 3, 2018		0.05				7,137				3,012				10,149
December 31, 2018		January 2, 2019		0.06				7,411				3,095				10,506
								$	79,035			$	38,543			$	117,578
2019:
January 31, 2019		February 1, 2019		$	0.06			$	7,461			$	3,065			$	10,526
February 28, 2019		March 1, 2019		0.05				6,716				2,756				9,472
March 29, 2019		April 1, 2019		0.05				7,352				3,091				10,443
								$	21,529			$	8,912			$	30,441

The Company has not established any limit on the extent to which it may use borrowings, if any, or proceeds from its IPO and Follow-on to fund distributions (which may reduce the amount of capital it ultimately invests in assets). There can be no assurance that the Company will be able to sustain distributions at any particular level.

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

66

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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 March 31, 2019

(Unaudited)

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.

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 March 31, 2019, the Company had a deferred tax asset of $1.3 million and a deferred tax liability of $(4.6) million. Given the losses generated by certain entities, deferred tax assets have been offset by valuation allowances of $1.3 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.

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (“the Tax Act”) was signed into law. The Tax Act reduced the statutory income tax rate applicable to corporations from 35 percent to 21 percent. This change affected the Company’s estimates of the current income tax expense and the deferred tax asset and liability balances used in the calculation of its net asset value. The Company has assessed that the reduction in the corporate tax rate did not have a significant impact on the Company’s net asset value. The Company will continue to assess the effects of the Tax Act on the deferred tax asset and liability balances and valuation allowances and continually assess the recoverability of their deferred tax assets based upon the weight of available evidence.

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.

67

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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 March 31, 2019

(Unaudited)

Note 14 — Financial Highlights

The following is a schedule of financial highlights for the three months ended March 31, 2019 and 2018:

	For the Three Months Ended March 31,
	2019				2018
Per share data:
Net asset value, beginning of period	$	7.82			$	8.30
Results of operations (1)
Net investment income	0.14				0.15
Net realized and unrealized gain (loss) on investments, net of deferred taxes	0.16				(0.03		)
Net change in unrealized depreciation attributable to non-controlling interests	(0.01		)		—
Net increase in net assets resulting from operations	0.29				0.12
Stockholder distributions (2)
Distributions from net investment income	(0.16		)		(0.16		)
Net decrease in net assets resulting from stockholder distributions	(0.16		)		(0.16		)
Capital share transactions
Issuance of common stock (3)	0.01				—
Repurchases of common stock	—				—
Net increase (decrease) in net assets resulting from capital share transactions	0.01				—
Net asset value, end of period	$	7.96			$	8.26
Shares outstanding at end of period	189,170,326				178,245,519
Total return (4)	3.69		%		1.47		%
Ratio/Supplemental data:
Net assets, end of period (in thousands)	$	1,509,944			$	1,475,064
Ratio of net investment income to average net assets (6)(7)	8.72		%		8.09		%
Ratio of total expenses to average net assets (6)(7)	7.66		%		7.82		%
Portfolio turnover rate (5)	5.05		%		6.26		%

______________

(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)	The issuance of common stock on a per share basis reflects the incremental net asset value changes as a result of the issuance of shares of common stock.

(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)	Ratios are annualized, except for incentive fees.

(7)	There were no offering costs during the period.

68

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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 March 31, 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 March 31, 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) (6)				Fair Value at March 31, 2019
Control Investments
California Resources Development JV, LLC - Preferred Equity - 9.00% (11)		Equity/Other		Metals & Mining		$	888			$	28,973			$	—			$	—			$	—			$	948			$	29,921
California Resources Corp. - Preferred Equity D		Equity/Other		Metals & Mining		—				—				13,158				—				—				—				13,158
Capstone Nutrition - Common Stock (fka Integrity Nutraceuticals, Inc.) (4) (10) (11)		Equity/Other		Food Products		—				—				—				—				—				—				—
Capstone Nutrition (fka Integrity Nutraceuticals, Inc.) - L+12.50% (15.03%), 9/25/2020 (4) (8) (11)		Senior Secured First Lien Debt		Food Products		—				3,219				1,804				—				—				211				5,234
Capstone Nutrition (fka Integrity Nutraceuticals, Inc.) - L+12.50% (15.03%), 9/25/2020 (4) (8) (11)		Senior Secured First Lien Debt		Food Products		—				3,459				—				—				—				129				3,588
Capstone Nutrition (fka Integrity Nutraceuticals, Inc.) - L+12.50% (15.03%), 9/25/2020 (4) (8) (11)		Senior Secured First Lien Debt		Food Products		—				7,692				—				—				—				287				7,979
Capstone Nutrition - Common Stock (fka Integrity Nutraceuticals, Inc.) (4) (10) (11)		Equity/Other		Food Products		—				—				—				—				—				—				—
CRS-SPV, Inc. (10) (11)		Equity/Other		Business Services		—				2,221				—				—				—				—				2,221
Kahala Ireland OpCo Designated Activity Company - L+5.00% (13.00%), 12/23/2028 (3) (8) (11)		Senior Secured First Lien Debt		Aerospace & Defense		3,553				111,549				—				(20,000		)		—				—				91,549
Kahala Ireland OpCo Designated Activity Company - Common Equity (3) (10) (11)		Equity/Other		Aerospace & Defense		—				20,329				—				—				—				12,334				32,663
Kahala Ireland OpCo Designated Activity Company - Profit Participating Note (3) (10) (11)		Equity/Other		Aerospace & Defense		—				3,250				—				(15		)		—				15				3,250
Kahala US OpCo LLC - Class A Preferred Units - 13.00% (3) (10) (11)		Equity/Other		Aerospace & Defense		—				—				—				—				—				—				—
NexSteppe Inc. - Series C Preferred Stock Warrant (10) (11)		Equity/Other		Chemicals		—				—				—				—				—				—				—
NexSteppe Inc. - 12.00%, 6/30/2019 (8) (11)		Senior Secured First Lien Debt		Chemicals		—				—				—				—				—				—				—
NexSteppe Inc. - 12.00%, 6/30/2019 (8) (11)		Senior Secured First Lien Debt		Chemicals		—				—				—				—				—				—				—
NMFC Senior Loan Program I, LLC		Equity/Other		Diversified Investment Vehicles		1,375				50,573				—				—				—				(2,751		)		47,822
Park Ave RE Holdings, LLC - 13.00%, 12/31/2021 (2) (8) (9) (11)		Subordinated Debt		Real Estate Management & Development		1,209				37,192				—				—				—				—				37,192
Park Ave RE Holdings, LLC - Common Shares (2) (10) (11)		Equity/Other		Real Estate Management & Development		—				15,578				379				—				—				493				16,450
Park Ave RE Holdings, LLC - Preferred Shares - 8.00% (2) (10) (11)		Equity/Other		Real Estate Management & Development		—				23,645				—				—				—				—				23,645
Siena Capital Finance - 12.50%, 8/16/2021		Senior Secured First Lien Debt		Financials		312				—				20,000				—				—				—				20,000
Siena Capital Finance		Equity/Other		Financials		—				—				35,669				—				(94		)		—				35,575

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 March 31, 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) (6)				Fair Value at March 31, 2019
Total Control Investments						$	7,337			$	307,680			$	71,010			$	(20,015	)		$	(94	)		$	11,666			$	370,247
Affiliate Investments
Answers Corporation - Common Equity (10) (11)		Equity/Other		Technology		$	—			$	1,909			$	—			$	—			$	—			$	—			$	1,909
B&M CLO 2014-1, LTD. Subordinated Notes - 4/16/2026 (11)		Collateralized Securities		Diversified Investment Vehicles		—				6,029				—				(1,103		)		—				2,408				7,334
CVP Cascade CLO, LTD. Subordinated Notes - 89.86%, 1/16/2026 (11)		Collateralized Securities		Diversified Investment Vehicles		376				1,166				—				(115		)		—				(124		)		927
Danish CRJ LTD. - Common Equity (10) (11)		Equity/Other		Aerospace & Defense		—				—				—				—				—				—				—
Figueora - Class F Notes - 12.79%, 1/15/2027 (11)		Collateralized Securities		Diversified Investment Vehicles		255				7,508				—				—				—				271				7,779
Figueroa CLO 2014-1, LTD. Subordinated Notes - 4.89%, 1/15/2027 (11)		Collateralized Securities		Diversified Investment Vehicles		258				7,468				—				(807		)		—				1,027				7,688
Frank Entertainment Group, LLC - 6.00%, 6/30/2019 (11)		Senior Secured First Lien Debt		Media Entertainment		—				1,441				—				(346		)		(24		)		29				1,100
Frank Entertainment Group, LLC - L+9.00% (11.50%), 7/4/2019		Senior Secured First Lien Debt		Media Entertainment		—				—				440				—				—				87				527
Frank Entertainment Group, LLC - 6.00%, 6/30/2019 (11)		Senior Secured Second Lien Debt		Media Entertainment		—				—				—				—				—				—				—
Frank Entertainment Group, LLC (10) (11)		Equity/Other		Media Entertainment		—				—				—				—				—				—				—
Frank Entertainment Group, LLC (10) (11)		Equity/Other		Media Entertainment		—				—				—				—				—				—				—
Frank Entertainment Group, LLC (10) (11)		Equity/Other		Media Entertainment		—				—				—				—				—				—				—
Frontstreet Facility Solutions, Inc. (10) (11)		Equity/Other		Telcom		—				—				—				(128		)		128				—				—
Frontstreet Facility Solutions, Inc. -13.00%, 3/1/2021 (11)		Subordinated Debt		Telcom		26				189				—				(123		)		(104		)		38				—
MidOcean Credit CLO II, LLC Income Notes - 8.11%, 1/29/2025 (11)		Collateralized Securities		Diversified Investment Vehicles		255				16,534				—				(563		)		—				2,727				18,698
MidOcean Credit CLO III, LLC Subordinated Notes - 13.99%, 7/21/2026 (11)		Collateralized Securities		Diversified Investment Vehicles		551				14,651				—				—				—				2,089				16,740
MidOcean Credit CLO IV, LLC Income Notes - 4/15/2027 (11)		Collateralized Securities		Diversified Investment Vehicles		—				8,595				—				(1,026		)		—				8				7,577
NewStar Arlington Senior Loan Program LLC Class FR Notes - 17.88%, 7/25/2025 (11)		Collateralized Securities		Diversified Investment Vehicles		881				24,788				—				(193		)		—				(760		)		23,835
NewStar Arlington Senior Loan Program LLC Class FR Notes - 13.49%, 4/25/2031 (11)		Collateralized Securities		Diversified Investment Vehicles		167				4,425				4				—				—				188				4,617
NewStar Exeter Fund CLO – Debt - 9.97%, 1/20/2027 (11)		Collateralized Securities		Diversified Investment Vehicles		310				8,580				40				—				—				632				9,252
NewStar Exeter Fund CLO – Equity - 16.65%, 1/19/2027 (11)		Collateralized Securities		Diversified Investment Vehicles		498				11,895				—				(570		)		—				(1,047		)		10,278
OFSI Fund VI, Ltd. - Subordinated Notes - 0.00% 3/20/2025 (11)		Collateralized Securities		Diversified Investment Vehicles		—				3,008				—				(484		)		—				113				2,637

70

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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 March 31, 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) (6)				Fair Value at March 31, 2019
PennantPark Credit Opportunities Fund II, LP		Equity/Other		Diversified Investment Vehicles		$	182			$	8,705			$	—			$	—			$	—			$	(333	)		$	8,372
Related Fee Agreements (5)		Collateralized Securities		Diversified Investment Vehicles		59				1,321				—				(650		)		—				106				777
Tax Defense Network, LLC - L+6.00% (10.00%), 8/27/2019 (8) (11)		Senior Secured First Lien Debt		Diversified Consumer Services		(34		)		7,927				—				(348		)		3				449				8,031
Tax Defense Network, LLC - Common Equity (10) (11)		Equity/Other		Diversified Consumer Services		—				—				—				—				—				—				—
Tax Defense Network, LLC - Preferred Equity (10) (11)		Equity/Other		Diversified Consumer Services		—				—				—				—				—				—				—
Team Waste, LLC - Preferred Units (10) (11)		Equity/Other		Industrials		—				2,235				—				—				—				—				2,235
Tennenbaum Waterman Fund, L.P. (10) (11)		Equity/Other		Diversified Investment Vehicles		387				10,137				—				—				—				20				10,157
THL Credit Greenway Fund II LLC		Equity/Other		Diversified Investment Vehicles		313				7,435				—				(697		)		—				(212		)		6,526
TwentyEighty, Inc. - Class A Common Equity (11)		Equity/Other		Media		—				—				—				—				—				2,129				2,129
TwentyEighty, Inc. - L+8.00% (10.60%), 3/31/2020 (8) (11)		Senior Secured First Lien Debt		Media		16				300				6				(35		)		3				(5		)		269
TwentyEighty, Inc. - L+4.00% (8.00%), 3/31/2020 (8) (11)		Senior Secured First Lien Debt		Media		322				6,422				255				—				—				(192		)		6,485
TwentyEighty, Inc. - L+0.25% (9.00%), 3/31/2020 (8) (11)		Senior Secured First Lien Debt		Media		314				6,158				306				—				—				(175		)		6,289
WhiteHorse VIII, Ltd. CLO Subordinated Notes - 5/1/2026 (11)		Collateralized Securities		Diversified Investment Vehicles		7				3,975				—				(936		)		—				3				3,042
World Business Lenders, LLC - Preferred Stock (10) (11)		Equity/Other		Consumer Finance		—				3,759				—				—				—				(4		)		3,755
Total Affiliate Investments						$	5,143			$	176,560			$	1,051			$	(8,124	)		$	6			$	9,472			$	178,965
Total Control & Affiliate Investments						$	12,480			$	484,240			$	72,061			$	(28,139	)		$	(88	)		$	21,138			$	549,212

______________________________________________________

*     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 March 31, 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)	This investment was not deemed significant under Regulation S-X as of March 31, 2019.

(5)	Not all Related Fee Agreements shown on the consolidated schedules of investments are Affiliated Investments.

(6)	Gross of deferred taxes in the amount of $0.5 million.

(7)	Investment no longer held as of March 31, 2019.

(8)	Investment paid or has the option to pay all or a portion of interest and dividends via payment-in-kind.

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 March 31, 2019

(Unaudited)

(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 March 31, 2019.

(11)	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).

Dividends and interest for the three months ended March 31, 2019 attributable to Controlled and Affiliated investments no longer held as of March 31, 2019 was $0.03 million.

Realized gain for the three months ended March 31, 2019 attributable to Controlled and Affiliated investments no longer held as of March 31, 2019 was $0.02 million.

Change in unrealized gain for the three months ended March 31, 2019 attributable to Controlled and Affiliated investments no longer held as of March 31, 2019 was $0.04 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
California Resources Development JV, LLC - Preferred Equity - 9.00% (11)		Equity/Other		Metals & Mining		$	4,132			$	26,984			$	11,899			$	(9,680	)		$	—			$	(230	)		$	28,973
Capstone Nutrition - Common Stock (fka Integrity Nutraceuticals, Inc.) (4) (10) (11)		Equity/Other		Food Products		—				—				—				—				—				—				—
Capstone Nutrition (fka Integrity Nutraceuticals, Inc.) - L+12.50% (14.84%), 9/25/2020 (4) (8) (11)		Senior Secured First Lien Debt		Food Products		—				—				2,829				—				—				390				3,219
Capstone Nutrition (fka Integrity Nutraceuticals, Inc.) - L+12.50% (14.84%), 9/25/2020 (4) (8) (11)		Senior Secured First Lien Debt		Food Products		—				4,096				—				—				—				(637		)		3,459
Capstone Nutrition (fka Integrity Nutraceuticals, Inc.) - L+12.50% (14.84%), 9/25/2020 (4) (8) (11)		Senior Secured First Lien Debt		Food Products		—				9,467				—				—				—				(1,775		)		7,692
Capstone Nutrition - Common Stock (fka Integrity Nutraceuticals, Inc.) (4) (10) (11)		Equity/Other		Food Products		—				—				—				—				—				—				—
CRS-SPV, Inc. (10) (11)		Equity/Other		Business Services		—				—				2,219				—				—				2				2,221
Kahala Ireland OpCo Designated Activity Company - L+5.00% (13.00%), 12/23/2028 (3) (8) (11)		Senior Secured First Lien Debt		Aerospace & Defense		17,447				141,549				—				(30,000		)		—				—				111,549
Kahala Ireland OpCo Designated Activity Company - Common Equity (3) (10) (11)		Equity/Other		Aerospace & Defense		—				11,709				—				—				—				8,620				20,329
Kahala Ireland OpCo Designated Activity Company - Profit Participating Note (3) (10) (11)		Equity/Other		Aerospace & Defense		—				3,250				—				(20		)		—				20				3,250
Kahala US OpCo LLC - Class A Preferred Units - 13.00% (3) (10) (11)		Equity/Other		Aerospace & Defense		—				—				—				—				—				—				—
NexSteppe Inc. - Series C Preferred Stock Warrant (10) (11)		Equity/Other		Chemicals		—				—				—				—				—				—				—
NexSteppe Inc. - 12.00%, 9/30/2018 (8) (11)		Senior Secured First Lien Debt		Chemicals		—				—				250				—				—				(250		)		—
NexSteppe Inc. - 12.00%, 9/30/2018 (8) (11)		Senior Secured First Lien Debt		Chemicals		—				—				—				—				—				—				—
NMFC Senior Loan Program I, LLC		Equity/Other		Diversified Investment Vehicles		6,051				50,805				—				—				—				(232		)		50,573

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 March 31, 2019

(Unaudited)

Park Ave RE Holdings, LLC - 13.00%, 12/31/2021 (2) (8) (9) (11)		Subordinated Debt		Real Estate Management & Development		$	4,902			$	37,192			$	—			$	—			$	—			$	—			$	37,192
Park Ave RE Holdings, LLC - Common Shares (2) (10) (11)		Equity/Other		Real Estate Management & Development		—				12,678				102				—				—				2,798				15,578
Park Ave RE Holdings, LLC - Preferred Shares - 8.00% (2) (10) (11)		Equity/Other		Real Estate Management & Development		—				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 Corporation - Common Equity (10) (11)		Equity/Other		Technology		$	—			$	14,231			$	—			$	—			$	—			$	(12,322	)		$	1,909
Answers Corporation (7) (11)		Senior Secured First Lien Debt		Technology		82				2,916				7				(3,007		)		55				29				—
Answers Corporation - L+7.90% (9.00%), 9/15/2021 (7) (11)		Senior Secured Second Lien Debt		Technology		557				4,371				153				(4,675		)		435				(284		)		—
B&M CLO 2014-1, LTD. Subordinated Notes - 11.61%, 4/16/2026 (11)		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. - Series G Senior Participating Preferred Stock Warrant (7)		Equity/Other		Software		—				—				—				—				(2,000		)		2,000				—
CVP Cascade CLO, LTD. Subordinated Notes - 62.02%, 1/16/2026 (11)		Collateralized Securities		Diversified Investment Vehicles		633				4,121				—				(1,143		)		(5,500		)		3,688				1,166
Danish CRJ LTD. - Common Equity (10) (11)		Equity/Other		Aerospace & Defense		—				605				—				(1		)		—				(604		)		—
Figueora - Class F Notes - 12.34%, 1/15/2027 (11)		Collateralized Securities		Diversified Investment Vehicles		465				—				8,000				—				—				(492		)		7,508
Figueroa CLO 2014-1, LTD. Subordinated Notes - 18.83%, 1/15/2027 (11)		Collateralized Securities		Diversified Investment Vehicles		882				12,508				—				(852		)		(4,000		)		(188		)		7,468
Frank Entertainment Group, LLC - 6.00%, 6/1/2022 (11)		Senior Secured First Lien Debt		Media Entertainment		—				—				1,836				—				—				(395		)		1,441
Frank Entertainment Group, LLC - 2.50%, 6/1/2022 (11)		Senior Secured Second Lien Debt		Media Entertainment		—				—				—				—				—				—				—
Frank Entertainment Group, LLC (10) (11)		Equity/Other		Media Entertainment		—				—				—				—				—				—				—
Frank Entertainment Group, LLC (10) (11)		Equity/Other		Media Entertainment		—				—				—				—				—				—				—
Frank Entertainment Group, LLC (10) (11)		Equity/Other		Media Entertainment		—				—				—				—				—				—				—
Frontstreet Facility Solutions, Inc. (10) (11)		Equity/Other		Telecom		—				—				—				—				—				—				—
Frontstreet Facility Solutions, Inc. -13.00%, 3/1/2021 (11)		Subordinated Debt		Telecom		126				—				227				—				—				(38		)		189
MidOcean Credit CLO II, LLC Income Notes - 12.13%, 1/29/2025 (11)		Collateralized Securities		Diversified Investment Vehicles		2,130				20,651				—				(431		)		—				(3,686		)		16,534

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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 March 31, 2019

(Unaudited)

MidOcean Credit CLO III, LLC Subordinated Notes - 15.05%, 7/21/2026 (11)		Collateralized Securities		Diversified Investment Vehicles		$	2,398			$	17,508			$	1,738			$	(1,847	)		$	(3,300	)		$	552			$	14,651
MidOcean Credit CLO IV, LLC Income Notes - 10.02%, 4/15/2027 (11)		Collateralized Securities		Diversified Investment Vehicles		1,128				12,212				—				(1,184		)		—				(2,433		)		8,595
NewStar Arlington Senior Loan Program LLC Class FR Notes - 18.47%, 7/25/2025 (11)		Collateralized Securities		Diversified Investment Vehicles		3,973				25,439				—				(2,050		)		—				1,399				24,788
NewStar Arlington Senior Loan Program LLC Class FR Notes - 13.34%, 4/25/2031 (11)		Collateralized Securities		Diversified Investment Vehicles		455				—				4,532				—				—				(107		)		4,425
NewStar Exeter Fund CLO – Debt - 9.85%, 1/20/2027 (11)		Collateralized Securities		Diversified Investment Vehicles		1,212				8,660				161				—				—				(241		)		8,580
NewStar Exeter Fund CLO – Equity - 17.24%, 1/19/2027 (11)		Collateralized Securities		Diversified Investment Vehicles		517				13,089				—				(2,141		)		(7,000		)		7,947				11,895
OFSI Fund VI, Ltd. - Subordinated Notes - 0.00%, 3/20/2025 (11)		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
Related Fee Agreements (5)		Collateralized Securities		Diversified Investment Vehicles		92				3,917				—				(2,838		)		(343		)		585				1,321
Silver Spring CLO, Ltd. - 4.84%, 10/16/2026 (11)		Collateralized Securities		Diversified Investment Vehicles		370				10,363				—				(8,241		)		(6,882		)		4,760				—
Tax Defense Network, LLC - L+6.00% (10.00%), 8/27/2019 (8) (11)		Senior Secured First Lien Debt		Diversified Consumer Services		157				7,477				—				(314		)		—				764				7,927
Tax Defense Network, LLC - Common Equity (10) (11)		Equity/Other		Diversified Consumer Services		—				—				—				—				—				—				—
Tax Defense Network, LLC - Preferred Equity (10) (11)		Equity/Other		Diversified Consumer Services		—				—				—				—				—				—				—
Team Waste, LLC - Preferred Units (10) (11)		Equity/Other		Industrials		—				—				2,234				—				—				1				2,235
Tennenbaum Waterman Fund, L.P. (10) (11)		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. - Class A Common Equity (11)		Equity/Other		Media		—				—				—				—				—				—				—
TwentyEighty, Inc. - L+8.00% (10.33%), 3/31/2020 (8) (11)		Senior Secured First Lien Debt		Media		307				2,853				131				(2,620		)		337				(401		)		300
TwentyEighty, Inc. - 4.00%, 3/31/2020 (8) (11)		Senior Secured First Lien Debt		Media		1,183				4,719				925				—				—				778				6,422
TwentyEighty, Inc. - 0.25%, 3/31/2020 (8) (11)		Senior Secured First Lien Debt		Media		1,137				3,739				1,125				—				—				1,294				6,158
WhiteHorse VIII, Ltd. CLO Subordinated Notes - 6.89%, 5/1/2026 (11)		Collateralized Securities		Diversified Investment Vehicles		(30		)		8,761				—				(3,087		)		(1,000		)		(699		)		3,975
World Business Lenders, LLC - Preferred Stock (10) (11)		Equity/Other		Consumer Finance		—				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

_____________________________________________________

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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 March 31, 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 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)	Not all Related Fee Agreements shown on the consolidated schedules of investments are Affiliated Investments.

(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.

(11)	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).

Dividends and interest for the year ended December 31, 2018 attributable to Controlled and Affiliated investments no longer held as of December 31, 2018 was $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 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:

DRIP Sales

From April 1, 2019 through the filing of this Form 10-Q, the Company has issued 0.78 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 $6.1 million.

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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 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 March 31, 2019, 79.9% 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 March 31, 2019:
	Investment Portfolio	$	2,528.8
	Net Assets attributable to Business Development Corporation of America	1,505.0
	Debt (net of deferred financing costs)	1,013.0
	Net Asset Value per share	7.96
Portfolio Activity for the Three Months Ended March 31, 2019:
	Cost of investments purchased during period, including PIK	283.8
	Sales, repayments and other exits during the period	122.8
	Number of portfolio companies at end of period	210
Operating results for the Three Months Ended March 31, 2019:
	Net investment income per share	0.14
	Distributions declared per share	0.16
	Net increase in net assets resulting from operations per share	0.29
	Net investment income	27.2
	Net realized and unrealized gain, net of deferred taxes	28.7
	Net increase in net assets resulting from operations	55.8

Portfolio and Investment Activity

During the three months ended March 31, 2019, we made $283.0 million of investments in new and existing portfolio companies and had $122.8 million in aggregate amount of exits and repayments, resulting in net investments of $160.2 million for the period. The portfolio composition by loan market consisted of 64.0% Middle Market ⁽¹⁾, 19.7% Large Corporate ⁽²⁾, and 16.3% Other ⁽³⁾ investments. In addition, the total portfolio of debt investments at fair value consisted of 86.7% bearing variable interest rates and 13.3% bearing fixed interest rates.

______________

⁽¹⁾ Middle market represents companies with annual revenues of less than $1.0 billion.

⁽²⁾ Large corporate represents companies with annual revenues exceeding $1.0 billion.

⁽³⁾ Other represents collateralized securities and equity investments.

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Our portfolio composition, based on fair value at March 31, 2019 was as follows:

	March 31, 2019
	Percentage of Total Portfolio			Weighted Average Current Yield for Total Portfolio (1) (2)
Senior Secured First Lien Debt	68.3	%		9.5	%
Senior Secured Second Lien Debt	11.6			12.7
Subordinated Debt	4.7			10.4
Collateralized Securities (3)	5.1			7.8
Equity/Other	10.3			—
Total	100.0	%		9.0	%

______________

⁽¹⁾ Includes the effect of the amortization or accretion of loan premiums or discounts.

⁽²⁾ The weighted average current yield including the effect of the amortization or accretion of loan premiums or discounts on income producing securities is 9.8%.

⁽³⁾ 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).

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 portfolio composition by loan market consisted of 66.9% Middle Market ⁽¹⁾, 17.0% Large Corporate ⁽²⁾, and 16.1% Other ⁽³⁾ investments. In addition, the total portfolio of debt investments at fair value consisted of 86.8% bearing variable interest rates and 13.2% bearing fixed interest rates.

______________

⁽¹⁾ Middle market represents companies with annual revenues of less than $1.0 billion.

⁽²⁾ Large corporate represents companies with annual revenues exceeding $1.0 billion.

⁽³⁾ Other represents collateralized securities and equity investments.

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) (2)
Senior Secured First Lien Debt	70.0	%		9.7	%
Senior Secured Second Lien Debt	11.2			12.1
Subordinated Debt	4.8			10.3
Collateralized Securities (3)	5.4			10.3
Equity/Other	8.6			—
Total	100.0	%		9.2	%

______________

⁽¹⁾ Includes the effect of the amortization or accretion of loan premiums or discounts.

⁽²⁾ The weighted average current yield including the effect of the amortization or accretion of loan premiums or discounts on income producing securities is 10.0%.

⁽³⁾ 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).

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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.

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 ratings of our investments based on fair value was 2.32 and 2.23 as of March 31, 2019 and December 31, 2018, respectively. As of March 31, 2019, we had eight portfolio companies, which represented fifteen investments, on non-accrual status with a total principal amount of $177.5 million, amortized cost of $119.0 million, and fair value of $46.5 million which represented 5.6%, 4.5% and 1.8% 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 months ended March 31, 2019 and 2018 were as follows (dollars in thousands):

	For the Three Months Ended March 31,
	2019				2018
Total investment income	$	61,101			$	58,504
Total expenses	33,473				32,085
Income tax expense, including excise tax	462				270
Net investment gain (loss) attributable to non-controlling interests	2				(5		)
Net investment income	$	27,164			$	26,154

 Investment Income

For the three months ended March 31, 2019, total investment income was $61.1 million and was primarily attributable to interest income from investments in portfolio companies with an average portfolio fair value of $2.4 billion and a weighted average current yield of 9.8%. Included within total investment income was $1.0 million of fee income for the three months ended March 31, 2019. Fee income consists primarily of prepayment and amendment fees. For the three months ended March 31, 2018, total investment income was $58.5 million and was primarily attributable to interest income from investments in portfolio companies with an average portfolio fair value of $2.6 billion and a weighted average current yield of 9.2%. Included within total investment income was $1.4 million of fee income for the three months ended March 31, 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 months ended March 31, 2019 and 2018 was as follows (dollars in thousands):

	For the Three Months Ended March 31,
	2019				2018
Management fees	$	9,433			$	9,955
Incentive fee on income	6,791				4,611
Interest and debt fees	13,258				13,450
Professional fees	1,707				1,132
Other general and administrative	1,828				2,464
Administrative services	196				199
Insurance	26				1
Directors' fees	234				273
Total operating expenses	$	33,473			$	32,085

For the three months ended March 31, 2019, we incurred $9.4 million of management fees. For the three months ended March 31, 2019, we incurred $6.8 million of incentive fees on income. For the three months ended March 31, 2018, we incurred $10.0 million of management fees. For the year ended March 31, 2018, we incurred $4.6 million of incentive fees on income.

For the three months ended March 31, 2019 and 2018, we incurred interest and debt fees of $13.3 million and $13.5 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 decrease in debt fees for the three months ended March 31, 2019 as compared to the same period in 2018 is a result of a decrease in average debt outstanding, under the Company’s Credit Facilities, offset by an increase in LIBOR rates.

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 months ended March 31, 2019 and 2018 were as follows (dollars in thousands):

	For the Three Months Ended March 31,
	2019				2018
Net realized gain (loss)
Control investments	$	(94	)		$	394
Affiliate investments	6				(41,028		)
Non-affiliate investments	(2,545		)		6,199
Net realized gain on foreign currency transactions	722				26
Total net realized loss	(1,911		)		(34,409		)
Net change in unrealized appreciation (depreciation) on investments, net of deferred taxes
Control investments	11,184				(4,309		)
Affiliate investments	9,472				40,570
Non-affiliate investments	12,250				(6,345		)
Total net change in unrealized appreciation on investments, net of deferred taxes	32,906				29,916
Net change in unrealized appreciation (depreciation) attributable to non-controlling interests	(1,292		)		315
Net change in unrealized depreciation from forward currency exchange contracts	(1,035		)		—
Net realized and unrealized gain (loss)	$	28,668			$	(4,178	)

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Net realized and unrealized gain on investments and foreign currency transactions, net of deferred taxes, resulted in a net gain of $28.7 million for the three months ended March 31, 2019 compared to a net loss of $(4.2) million, for the same period in 2018. We look at net realized gains (losses) 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 months ended March 31, 2019 was primarily driven by unrealized appreciation on our Level II Senior Secured investments and CLOs, partially offset by realized losses on our Senior Secured Notes investments. The net realized and unrealized loss for the three months ended March 31, 2018 was 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 months ended March 31, 2019, we recorded a net increase in net assets resulting from operations of $55.8 million versus a net increase in net assets resulting from operations of $22.0 million for the three months ended March 31, 2018. The increase is primarily attributable to greater unrealized gains on our investments. Based on the weighted average shares of common stock outstanding for the periods ended March 31, 2019 and 2018, respectively, our per share net increase in net assets resulting from operations was $0.29 for the three months ended March 31, 2019, versus a net increase in net assets resulting from operations of $0.12 for the three months ended March 31, 2018.

Cash Flows

For the three months ended March 31, 2019, net cash used in operating activities was $106.8 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 three months ended March 31, 2019 was primarily a result of purchases of investments of $283.0 million, offset by sales and repayments of investments of $122.8 million.

Net cash provided by financing activities of $88.8 million during the three months ended March 31, 2019 primarily related to proceeds from debt of $128.0 million, which was partially offset by repurchases of common stock of $18.4 million and payments of stockholder distributions of $21.6 million.

For the three months ended March 31, 2018, net cash used in operating activities was $117.1 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 three months ended March 31, 2018 was primarily result of purchases of investments of $284.4 million, offset by sales and repayments of investments of $160.6 million.

Net cash provided by financing activities of $91.8 million during the three months ended March 31, 2018 primarily related to net proceeds from the Wells Fargo Credit Facility, Citi Credit Facility, and the JPMC PB Account of $132.9 million partially offset by net repurchases of common stock of $22.2 million and payments of stockholder distributions of $18.6 million.

Recent Developments

Distribution Reinvestment Plan (“DRIP”) Sales

From April 1, 2019 through the filing of this Form 10-Q, we issued 0.78 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 $6.1 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 March 31, 2019, we had issued 212.6 million shares of our common stock for gross proceeds of $2.2 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.

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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.

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 $0.001780822 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 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 three months ended March 31, 2019 and 2018 (dollars in thousands).

	For the Three Months Ended March 31,
	2019				2018
Distributions declared	$	30,441			$	28,727
Distributions paid	$	30,504			$	28,807
Portion of distributions paid in cash	$	21,588			$	18,640
Portion of distributions paid in DRIP shares	$	8,916			$	10,167

As of March 31, 2019, we had $10.4 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 gains proceeds from the sale of assets and non-capital gains 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 three months ended March 31, 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 gains. 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

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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 made during the months ended March 31, 2019 and 2018 (dollars in thousands):

	For the Three Months Ended March 31,
	2019				2018
Monthly distributions	$	30,441			$	28,727
Total distributions	$	30,441			$	28,727

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.

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 the Acquisition Entity, entered into an 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 in 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

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 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. As a result of this issuance, the Company received aggregate cash proceeds of $90.0 million.

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.

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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.

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. We paid BSP $0.6 million and $0.7 million in fees under the Administration Agreement for the three months ended March 31, 2019 and 2018, respectively.

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%.

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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).

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. The Citi Credit Facility was amended on November 28, 2017 to extend the investment period to May 31, 2019. The Citi Credit Facility has a maturity date of May 28, 2020.

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 has been 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 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 Notes bear interest at a rate of 5.375% per year payable semi-annually.

JP Morgan Securities LLC Prime Brokerage Account

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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.

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 March 31, 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)	$	402,651			$	—			$	—			$	402,651			$	—
Citi Credit Facility (2)	313,500				—				313,500				—				—
2023 Notes (3)	59,729				—				—				59,729				—
2022 Notes (4)	149,381				—				—				149,381				—
2020 Notes (5)	99,551				—				99,551				—				—
Total contractual obligations	$	1,024,812			$	—			$	413,051			$	611,761			$	—

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(1)	As of March 31, 2019, we had $197.3 million of unused borrowing capacity under the Wells Fargo Credit Facility, subject to borrowing base limits.

(2)	As of March 31, 2019, we had $86.5 million of unused borrowing capacity under the Citi Credit Facility, subject to borrowing base limits.

(3)	As of March 31, 2019, we had no unused borrowing capacity under the 2023 Notes.

(4)	As of March 31, 2019, we had no unused borrowing capacity under the 2022 Notes.

(5)	As of March 31, 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 March 31, 2019, we had unfunded commitments on delayed draw term loans of $13.9 million, unfunded commitments on revolver term loans of $23.4 million and unfunded equity capital commitments of $2.1 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. The unfunded commitments are disclosed in our consolidated schedule of investments. We believe 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 of notes to consolidated financial statements appearing elsewhere in this report, we believe the following accounting policies require the most significant judgment in the preparation of our consolidated financial statements.

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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:

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 Gains or Losses and Net Change in Unrealized Appreciation or Depreciation

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

See Note 2 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. We do not have any foreign operations and thus we are not exposed to foreign currency fluctuations.

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As of March 31, 2019, our debt included variable-rate debt, bearing a weighted average interest rate of LIBOR plus 2.00% and fixed rate debt, bearing a weighted average interest rate of 5.27% with a total carrying value (net of deferred financing costs) of $1,013.0 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 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		(15.67	)%
(-) 100 Basis Points		(7.83	)%
Base Interest Rate		—	%
(+) 100 Basis Points		7.83	%
(+) 200 Basis Points		15.67	%

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 March 31, 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 March 31, 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. There have been no material changes from the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2018.

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

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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.

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.

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)
January 1, 2019 through January 31, 2019		2,241,000			$	8.20			2,241,000			—
February 1, 2019 through February 28, 2019		—			$	—			—			—
March 1, 2019 through March 31, 2019		—			$	—			—			—

    

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

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 three months ended March 31, 2019 (and are numbered in accordance with Item 601 of Regulation S-K).

Exhibit No.	Description
31.1	Certification of the Principal Executive Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.2	Certification of the Principal Financial Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32	Written statement of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

Signature		Title		Date
/s/ Richard J. Byrne Richard J. Byrne		Chief Executive Officer, President and Chairman of the Board of Directors (Principal Executive Officer)		May 14, 2019
/s/ Corinne D. Pankovcin Corinne D. Pankovcin		Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)		May 14, 2019

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