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, 2023

OR

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

Commission file number: 814-00821

FRANKLIN BSP LENDING CORPORATION

(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)

Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class			Trading Symbol(s)			Name of Each Exchange on Which Registered
None			N/A			N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes 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 x 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.

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

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

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

The number of shares of the registrant's common stock, $0.001 par value, outstanding as of May 9, 2023 was 230,965,055.

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FRANKLIN BSP LENDING CORPORATION

FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 2023

TABLE OF CONTENTS

			Page
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements			4
Consolidated Statements of Assets and Liabilities as of March 31, 2023 (Unaudited) and December 31, 2022			4
Consolidated Statements of Operations for the Three Months Ended March 31, 2023 and 2022 (Unaudited)			5
Consolidated Statements of Changes in Net Assets for the Three Months Ended March 31, 2023 and 2022 (Unaudited)			7
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022 (Unaudited)			8
Consolidated Schedules of Investments as of March 31, 2023 (Unaudited) and December 31, 2022			9
Notes to Consolidated Financial Statements (Unaudited)			28
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			81
Item 3. Quantitative and Qualitative Disclosures About Market Risk			98
Item 4. Controls and Procedures			99
PART II - OTHER INFORMATION
Item 1. Legal Proceedings			100
Item 1A. Risk Factors			100
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			101
Item 3. Defaults Upon Senior Securities			101
Item 4. Mine Safety Disclosures			101
Item 5. Other Information			101
Item 6. Exhibits			102
Signatures			103

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PART I - FINANCIAL INFORMATION

Item 1. CONSOLIDATED FINANCIAL STATEMENTS

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(dollars in thousands except share and per share data)

			March 31,						December 31,
			2023						2022
			(Unaudited)
ASSETS
Investments, at fair value:
Control Investments, at fair value (amortized cost of $623,395 and $631,890, respectively)			$	655,574					$	665,915
Affiliate Investments, at fair value (amortized cost of $107,985 and $108,357, respectively)			60,612						59,107
Non-Affiliate Investments, at fair value (amortized cost of $2,224,465 and $2,186,884, respectively)			2,184,381						2,150,122
Investments, at fair value (amortized cost of $2,955,845 and $2,927,131, respectively)			2,900,567						2,875,144
Cash and cash equivalents			47,944						54,852
Interest and dividends receivable			41,551						38,752
Receivable for unsettled trades			4,857						3,752
Prepaid expenses and other assets			7,055						7,378
Total assets			$	3,001,974					$	2,979,878
LIABILITIES
Debt (net of deferred financing costs of $8,803 and $9,665, respectively)			$	1,236,817					$	1,224,187
Stockholder distributions payable			27,699						27,292
Management fees payable			11,110						11,122
Incentive fee on income payable			10,031						9,699
Accounts payable and accrued expenses			25,857						27,616
Interest and debt fees payable			8,976						14,477
Directors' fees payable			45						28
Total liabilities			1,320,535						1,314,421
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; 268,492,101 issued and 231,050,939 outstanding at March 31, 2023, and 262,627,186 issued and 228,658,723 outstanding at December 31, 2022			231						229
Additional paid in capital			2,141,774						2,124,264
Total distributable loss			(460,566)						(459,036)
Total net assets			1,681,439						1,665,457
Total liabilities and net assets			$	3,001,974					$	2,979,878
Net asset value per share			$	7.28					$	7.28

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

4

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FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands except share and per share data)

(Unaudited)

			For the three months ended March 31,
			2023						2022
Investment income:
From control investments:
Interest income			$	5,773					$	4,586
Dividend income			13,129						16,280
Fee and other income			74						70
Total investment income from control investments			18,976						20,936
From affiliate investments:
Interest income			1,099						1,881
Dividend income			133						484
Total investment income from affiliate investments			1,232						2,365
From non-affiliate investments:
Interest income			61,602						38,559
Fee and other income			1,065						1,915
Total investment income from non-affiliate investments			62,667						40,474
Interest from cash and cash equivalents			415						1
Total investment income			83,290						63,776
Operating expenses:
Management fees			11,062						10,503
Incentive fee on income			9,586						7,256
Interest and debt fees			20,120						12,284
Professional fees			1,266						853
Other general and administrative			1,728						1,407
Administrative services			198						195
Directors' fees			248						273
Total expenses			44,208						32,771
Income tax expense, including excise tax			739						1,979
Net investment income			38,343						29,026
Realized and unrealized gain (loss):
Net realized gain (loss)
Control investments			6						1
Affiliate investments			—						112
Non-Affiliate investments			(2,002)						4,907
Net realized gain on foreign currency transactions			—						193
Net realized loss on extinguishment of debt			—						(1,769)
Total net realized gain (loss)			(1,996)						3,444

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

5

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FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands except share and per share data)

(Unaudited)

			For the three months ended March 31,
			2023						2022
Net change in unrealized appreciation (depreciation) on investments
Control investments			$	(1,846)					$	9,523
Affiliate investments			1,877						1,044
Non-Affiliate investments			(3,322)						(7,800)
Net change in deferred taxes			(69)						229
Total net change in unrealized appreciation (depreciation) on investments, net of change in deferred taxes			(3,360)						2,996
Net change in unrealized depreciation from forward currency exchange contracts			—						(539)
Net realized and unrealized gain (loss)			(5,356)						5,901
Net increase in net assets resulting from operations			$	32,987					$	34,927
Per share information - basic and diluted
Net investment income			$	0.17					$	0.15
Net increase in net assets resulting from operations			$	0.14					$	0.17
Weighted average shares outstanding			230,155,576						199,948,106

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

6

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FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

(dollars in thousands except share and per share data)

(Unaudited)

			For the three months ended March 31,
			2023						2022
Operations:
Net investment income			$	38,343					$	29,026
Net realized gain (loss) from investments			(1,996)						5,020
Net realized gain on foreign currency transactions			—						193
Net realized loss on extinguishment of debt			—						(1,769)
Net change in unrealized appreciation (depreciation) on investments			(3,291)						2,767
Net change in deferred taxes			(69)						229
Net change in unrealized depreciation from forward currency exchange contracts			—						(539)
Net increase in net assets resulting from operations			32,987						34,927
Stockholder distributions:
Distributions			(34,517)						(29,778)
Net decrease in net assets from stockholder distributions			(34,517)						(29,778)
Capital share transactions:
Issuance of common stock, net of issuance costs			36,324						—
Reinvestment of stockholder distributions			6,816						6,806
Repurchases of common stock			(25,628)						(23,065)
Net increase (decrease) in net assets from capital share transactions			17,512						(16,259)
Total increase (decrease) in net assets			15,982						(11,110)
Net assets at beginning of period			1,665,457						1,509,492
Net assets at end of period			$	1,681,439					$	1,498,382
Net asset value per common share			$	7.28					$	7.51
Common shares outstanding at end of period			231,050,939						199,428,205

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

7

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FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

(Unaudited)

			For the three months ended March 31,
			2023						2022
Operating activities:
Net increase in net assets resulting from operations			$	32,987					$	34,927
Adjustments to reconcile net increase (decrease) in net assets from operations to net cash provided by (used in) operating activities:
Payment-in-kind interest income			(2,082)						(2,540)
Net accretion of discount on investments			(1,806)						(2,250)
Amortization of deferred financing costs			862						722
Amortization of discount on unsecured notes			268						308
Sales and repayments of investments			37,859						137,773
Purchases of investments			(64,681)						(59,702)
Net realized (gain) loss from investments			1,996						(5,020)
Net realized gain on foreign currency transactions			—						(193)
Net realized loss on extinguishment of debt			—						1,769
Net change in unrealized (appreciation) depreciation on investments			3,291						(2,767)
Net change in unrealized depreciation from forward currency exchange contracts			—						539
(Increase) decrease in operating assets:
Interest and dividends receivable			(2,799)						310
Receivable for unsettled trades			(1,105)						26,656
Prepaid expenses and other assets			323						3,637
Increase (decrease) in operating liabilities:
Management fees payable			(12)						86
Incentive fee on income payable			332						227
Accounts payable and accrued expenses			(1,759)						(2,601)
Payable for unsettled trades			—						(31,805)
Interest and debt fees payable			(5,501)						(660)
Directors' fees payable			17						(51)
Net cash provided by (used in) operating activities			(1,810)						99,365
Financing activities:
Proceeds from issuance of shares of common stock, net			36,324						—
Repurchases of common stock			(25,628)						(21,841)
Proceeds from debt			59,000						20,000
Payments on debt			(47,500)						(89,000)
Stockholder distributions			(27,294)						(23,253)
Net cash used in financing activities			(5,098)						(114,094)
Net decrease in cash and cash equivalents			(6,908)						(14,729)
Effect of foreign currency exchange rates			—						193
Cash and cash equivalents, beginning of period			54,852						42,774
Cash and cash equivalents, end of period			$	47,944					$	28,238
Supplemental information:
Interest and non-usage fees paid during the period			$	24,383					$	11,864
Net taxes, including excise tax, paid during the period			$	2,346					$	2,504
Distributions reinvested during the period			$	6,816					$	6,806

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

8

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FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2023

(Unaudited)

Portfolio Company (f) (g) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
Senior Secured First Lien Debt - 121.1% (b)
1236904 BC, Ltd. (c) (h)						Software/Services						L+ 7.50% (12.10%), 3/4/2027						$	10,441					$	10,306					$	10,600					0.6		%
1236904 BC, Ltd. (c) (h) (i)						Software/Services						L+ 5.50% (10.34%), 3/4/2027						18,403						17,983						17,796						1.1		%
Absolute Software Corp. (a) (c) (i)						Software/Services						L+ 6.00% (11.16%), 7/1/2027						44,978						44,341						44,304						2.6		%
ADCS Clinics Intermediate Holdings, LLC (c)						Healthcare						L+ 6.50% (11.70%), 5/7/2027						2,787						2,787						2,749						0.2		%
ADCS Clinics Intermediate Holdings, LLC (c) (h)						Healthcare						L+ 6.50% (11.43%), 5/7/2027						13,599						13,413						13,413						0.8		%
Alera Group Intermediate Holdings, Inc. (c)						Financials						S+ 6.50% (11.41%), 10/2/2028						5,875						5,769						5,769						0.3		%
Alera Group Intermediate Holdings, Inc. (c)						Financials						S+ 6.50% (11.41%), 10/2/2028						9,379						9,379						9,210						0.5		%
Arch Global Precision, LLC (c)						Industrials						L+ 4.75% (9.91%), 4/1/2026						2,350						2,350						2,350						0.1		%
Arch Global Precision, LLC (c)						Industrials						L+ 4.75% (9.70%), 4/1/2025						176						176						176						0.0		%
Arch Global Precision, LLC (c) (h) (i)						Industrials						L+ 4.75% (9.58%), 4/1/2026						7,460						7,439						7,460						0.4		%
Arctic Holdco, LLC (c)						Paper & Packaging						S+ 6.00% (11.00%), 12/23/2026						915						915						901						0.1		%
Arctic Holdco, LLC (c) (h) (i)						Paper & Packaging						S+ 6.00% (11.00%), 12/23/2026						60,520						59,724						59,612						3.5		%
Armada Parent, Inc. (c)						Industrials						S+ 5.75% (10.66%), 10/29/2027						44,604						43,924						43,886						2.6		%
Armada Parent, Inc. (c)						Industrials						S+ 5.75% (10.66%), 10/29/2027						2,247						2,247						2,211						0.1		%
Avalara, Inc. (c)						Software/Services						S+ 7.25% (12.15%), 10/19/2028						40,296						39,364						39,365						2.3		%
Aventine Holdings, LLC (c)						Media/Entertainment						L+ 6.00% (10.84%), 6/18/2027						9,681						9,681						9,555						0.6		%
Aventine Holdings, LLC (c)						Media/Entertainment						10.25% PIK, 6/18/2027						24,798						24,367						24,265						1.4		%
Aventine Holdings, LLC (c) (i)						Media/Entertainment						L+ 6.00% (10.84%), 6/18/2027						26,486						26,099						26,139						1.6		%
Axiom Global, Inc. (c) (h) (i)						Business Services						L+ 4.75% (9.46%), 10/1/2026						20,264						20,150						20,264						1.2		%
BCPE Oceandrive Buyer, Inc. (c)						Healthcare						L+ 6.25% (11.25%), 12/30/2026						2,626						2,626						2,536						0.2		%
BCPE Oceandrive Buyer, Inc. (c)						Healthcare						L+ 6.25% (11.41%), 12/29/2028						1,722						1,722						1,664						0.1		%
BCPE Oceandrive Buyer, Inc. (c) (i)						Healthcare						L+ 6.25% (11.08%), 12/29/2028						3,391						3,391						3,275						0.2		%
BCPE Oceandrive Buyer, Inc. (c) (i)						Healthcare						L+ 6.25% (11.08%), 12/29/2028						20,345						19,969						19,651						1.2		%
Black Mountain Sand, LLC (c)						Energy						L+ 9.00% (13.96%), 6/30/2024						6,325						6,311						6,325						0.4		%
Capstone Logistics (c)						Transportation						S+ 4.75% (9.66%), 11/12/2027						1,113						1,113						1,113						0.1		%
Capstone Logistics (c) (h)						Transportation						S+ 4.75% (9.66%), 11/12/2027						18,966						18,845						18,966						1.1		%
CHA Holdings, Inc. (c) (i)						Business Services						L+ 4.50% (9.40%), 4/10/2025						513						497						513						0.0		%
Cold Spring Brewing, Co. (c) (h) (i)						Food & Beverage						S+ 4.75% (9.56%), 12/19/2025						6,771						6,740						6,771						0.4		%
Communication Technology Intermediate, LLC (c)						Business Services						S+ 5.50% (10.41%), 5/5/2027						835						835						835						0.0		%
Communication Technology Intermediate, LLC (c) (h)						Business Services						S+ 5.50% (10.41%), 5/5/2027						17,845						17,602						17,845						1.1		%
Communication Technology Intermediate, LLC (c) (i)						Business Services						S+ 5.50% (10.41%), 5/5/2027						6,207						6,207						6,207						0.4		%
Corfin Industries, LLC (c)						Industrials						L+ 5.75% (10.99%), 12/27/2027						1,594						1,594						1,594						0.1		%
Corfin Industries, LLC (c)						Industrials						S+ 6.00% (11.41%), 2/5/2026						9,702						9,326						9,702						0.6		%
Corfin Industries, LLC (c) (h) (i)						Industrials						L+ 5.75% (10.99%), 2/5/2026						16,310						16,144						16,310						1.0		%
Cornerstone Chemical, Co.						Chemicals						10.25% PIK, 9/1/2027						14,850						14,264						13,366						0.8		%
CRS-SPV, Inc. (c) (o)						Industrials						S+ 4.50% (9.41%), 3/8/2024						62						62						62						0.0		%
Drilling Info Holdings, Inc. (c) (i)						Business Services						L+ 4.25% (9.09%), 7/30/2025						6,934						6,811						6,934						0.4		%
Dynagrid Holdings, LLC (c)						Utilities						L+ 6.00% (10.80%), 12/18/2025						1,131						1,131						1,131						0.1		%
Dynagrid Holdings, LLC (c) (h)						Utilities						L+ 6.00% (11.16%), 12/18/2025						3,887						3,828						3,887						0.2		%
Dynagrid Holdings, LLC (c) (i)						Utilities						L+ 6.00% (11.16%), 12/18/2025						14,155						13,987						14,155						0.8		%
Eliassen Group, LLC (c)						Business Services						S+ 5.50% (10.69%), 4/14/2028						438						438						434						0.0		%
Eliassen Group, LLC (c) (i)						Business Services						S+ 5.50% (10.40%), 4/14/2028						11,557						11,458						11,455						0.7		%
Faraday Buyer, LLC (c)						Utilities						S+ 7.00% (11.86%), 10/11/2028						26,132						25,410						25,408						1.5		%
FGT Purchaser, LLC (c)						Consumer						S+ 5.50% (10.50%), 9/13/2027						836						836						836						0.0		%
FGT Purchaser, LLC (c) (h)						Consumer						S+ 5.50% (10.50%), 9/13/2027						21,177						20,863						21,177						1.3		%

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

9

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FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2023

(Unaudited)

Portfolio Company (f) (g) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
First Eagle Holdings, Inc. (c)						Financials						S+ 6.50% (11.22%), 3/1/2027						$	15,000					$	14,614					$	14,613					0.9		%
Foresight Energy Operating, LLC (c) (p)						Energy						L+ 8.00% (13.16%), 6/30/2027						1,074						1,074						1,074						0.1		%
Galway Borrower, LLC (c)						Financials						L+ 5.25% (10.41%), 9/30/2027						407						407						399						0.0		%
Galway Borrower, LLC (c) (h)						Financials						L+ 5.25% (10.41%), 9/29/2028						29,698						29,315						29,178						1.7		%
Geosyntec Consultants, Inc. (c)						Business Services						S+ 5.25% (10.06%), 5/18/2029						27,168						26,751						26,752						1.6		%
Geosyntec Consultants, Inc. (c)						Business Services						S+ 5.25% (10.06%), 5/18/2029						2,015						2,015						1,984						0.1		%
Geosyntec Consultants, Inc. (c)						Business Services						S+ 5.25% (10.06%), 5/18/2027						867						867						855						0.1		%
Green Energy Partners/Stonewall, LLC (c)						Utilities						L+ 6.00% (11.16%), 11/12/2026						10,193						10,045						10,193						0.6		%
Higginbotham Insurance Agency, Inc. (c)						Financials						L+ 5.25% (10.09%), 11/25/2026						4,385						4,385						4,385						0.3		%
Higginbotham Insurance Agency, Inc. (c) (h)						Financials						L+ 5.25% (10.09%), 11/25/2026						14,589						14,485						14,589						0.9		%
Hospice Care Buyer, Inc. (c)						Healthcare						L+ 6.50% (11.33%), 12/9/2026						4,519						4,519						4,468						0.3		%
Hospice Care Buyer, Inc. (c)						Healthcare						L+ 6.50% (11.31%), 12/9/2026						2,775						2,775						2,745						0.2		%
Hospice Care Buyer, Inc. (c)						Healthcare						L+ 6.50% (11.66%), 12/9/2026						2,101						2,049						2,077						0.1		%
Hospice Care Buyer, Inc. (c) (h)						Healthcare						L+ 6.50% (11.33%), 12/9/2026						24,251						23,780						23,977						1.4		%
Hospice Care Buyer, Inc. (c) (h)						Healthcare						L+ 6.50% (11.33%), 12/9/2026						17,962						17,676						17,759						1.1		%
ICR Operations, LLC (c)						Business Services						S+ 5.25% (10.30%), 11/22/2028						42,238						41,557						41,466						2.5		%
ICR Operations, LLC (c)						Business Services						S+ 5.25% (10.16%), 11/22/2027						1,545						1,545						1,516						0.1		%
Ideal Tridon Holdings, Inc. (c)						Industrials						L+ 5.25% (10.41%), 7/31/2024						45						45						45						0.0		%
Ideal Tridon Holdings, Inc. (c)						Industrials						L+ 5.25% (10.11%), 7/31/2023						1,887						1,887						1,887						0.1		%
Ideal Tridon Holdings, Inc. (c) (h) (i)						Industrials						L+ 5.25% (10.41%), 7/31/2024						30,683						30,545						30,684						1.8		%
IG Investments Holdings, LLC (c) (h)						Business Services						S+ 6.00% (10.91%), 9/22/2028						17,584						17,309						17,424						1.0		%
IG Investments Holdings, LLC (c) (h)						Business Services						L+ 6.00% (10.83%), 9/22/2028						317						314						314						0.0		%
Indigo Buyer, Inc. (c)						Paper & Packaging						S+ 6.25% (11.18%), 5/23/2028						605						605						595						0.0		%
Indigo Buyer, Inc. (c)						Paper & Packaging						S+ 6.25% (11.18%), 5/23/2028						21,173						20,810						20,809						1.2		%
Indigo Buyer, Inc. (c)						Paper & Packaging						S+ 6.25% (11.03%), 5/23/2028						9,055						9,055						8,900						0.5		%
Indigo Buyer, Inc. (c)						Paper & Packaging						S+ 6.25% (11.03%), 5/23/2028						8,002						8,002						7,864						0.5		%
Integrated Efficiency Solutions, Inc. (c) (o)						Industrials						7.50%, 12/31/2025						1,418						1,418						1,418						0.1		%
Integrated Global Services, Inc. (c) (i)						Industrials						L+ 6.00% (10.81%), 2/4/2026						11,240						11,134						11,241						0.7		%
Internap Corp. (c) (h) (o)						Business Services						L+ 6.50% (11.36%), 5/8/2025						5,075						5,075						4,693						0.3		%
International Cruise & Excursions, Inc. (c) (i)						Business Services						S+ 5.35% (10.16%), 6/6/2025						4,837						4,821						4,402						0.3		%
IQN Holding Corp. (c) (i)						Software/Services						S+ 5.25% (10.38%), 5/2/2029						11,187						11,091						11,091						0.7		%
K2 Intelligence Holdings, Inc. (c) (h) (i)						Business Services						L+ 5.75% (10.91%), 9/23/2024						6,829						6,788						6,180						0.4		%
KidKraft, Inc. (c)						Consumer						S+ 6.00% (10.81%), 6/30/2023						1,060						1,060						957						0.1		%
Kissner Milling Co., Ltd.						Industrials						4.88%, 5/1/2028						2,983						2,983						2,659						0.2		%
Knowledge Pro Buyer, Inc. (c)						Business Services						L+ 5.75% (10.46%), 12/10/2027						2,316						2,316						2,276						0.1		%
Knowledge Pro Buyer, Inc. (c)						Business Services						P+ 4.75% (12.75%), 12/10/2027						911						911						895						0.1		%
Knowledge Pro Buyer, Inc. (c) (i)						Business Services						L+ 5.75% (10.46%), 12/10/2027						24,490						24,107						24,061						1.4		%
Labrie Environmental Group, LLC (a) (c)						Industrials						L+ 5.50% (10.34%), 9/1/2026						22,294						22,040						21,403						1.3		%
Lakeland Tours, LLC (c) (h) (i)						Education						L+ 6.00% (10.83%), 9/25/2025						4,513						4,272						4,061						0.2		%
Lakeland Tours, LLC (c) (h) (i)						Education						13.25% PIK, 9/25/2027						5,709						4,387						4,282						0.3		%
Lakeview Health Holdings, Inc. (c) (o)						Healthcare						P+ 6.00% (14.00%) PIK, 10/15/2024						607						607						607						0.0		%
Lakeview Health Holdings, Inc. (c) (o)						Healthcare						P+ 6.00% (14.00%) PIK, 10/15/2024						227						227						227						0.0		%

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

10

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2023

(Unaudited)

Portfolio Company (f) (g) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
Lakeview Health Holdings, Inc. (c) (o)						Healthcare						P+ 6.00% (14.00%) PIK, 10/15/2024						$	65					$	65					$	65					0.0		%
Lakeview Health Holdings, Inc. (c) (o) (t)						Healthcare						P+ 4.50% (12.50%) PIK, 10/15/2024						1,780						663						563						0.0		%
Manna Pro Products, LLC (c)						Consumer						L+ 6.00% (10.84%), 12/10/2026						3,992						3,992						3,833						0.2		%
Manna Pro Products, LLC (c)						Consumer						L+ 6.00% (10.84%), 12/10/2026						1,962						1,962						1,883						0.1		%
Manna Pro Products, LLC (c) (i)						Consumer						L+ 6.00% (10.84%), 12/10/2026						32,848						32,349						31,534						1.9		%
McDonald Worley, P.C. (c)						Business Services						26.00% PIK, 12/31/2024						15,077						15,077						9,858						0.6		%
MCS Acquisition Corp. (c) (p)						Business Services						L+ 6.00% (10.79%), 10/2/2025						770						770						770						0.0		%
Medical Depot Holdings, Inc. (c)						Healthcare						S+ 10.00% (14.90%) 9.00% PIK, 6/1/2025						3,647						3,591						3,588						0.2		%
Medical Depot Holdings, Inc. (c) (h) (i)						Healthcare						S+ 9.50% (14.40%) 4.00% PIK, 6/1/2025						20,703						20,440						19,045						1.1		%
Medical Management Resource Group, LLC (c)						Healthcare						L+ 5.75% (10.58%), 9/30/2027						6,581						6,581						6,493						0.4		%
Medical Management Resource Group, LLC (c)						Healthcare						L+ 5.75% (10.55%), 9/30/2026						530						530						523						0.0		%
Medical Management Resource Group, LLC (c) (h)						Healthcare						L+ 5.75% (10.58%), 9/30/2027						15,936						15,697						15,721						0.9		%
MGTF Radio Company, LLC (c) (o)						Media/Entertainment						S+ 6.00% (10.81%), 4/1/2024						46,896						46,869						39,697						2.4		%
Midwest Can Company, LLC (c) (h) (i)						Paper & Packaging						L+ 6.00% (11.16%), 3/2/2026						32,029						31,691						32,029						1.9		%
Miller Environmental Group, Inc. (c) (h) (i)						Business Services						L+ 6.50% (11.69%), 3/15/2024						11,200						11,158						11,200						0.7		%
Miller Environmental Group, Inc. (c) (h) (i)						Business Services						L+ 6.50% (11.69%), 3/15/2024						10,245						10,198						10,245						0.6		%
Mirra-Primeaccess Holdings, LLC (c)						Healthcare						L+ 6.50% (11.34%), 7/29/2026						48,703						48,055						48,703						2.9		%
Mirra-Primeaccess Holdings, LLC (c)						Healthcare						L+ 6.50% (11.34%), 7/29/2026						2,935						2,935						2,935						0.2		%
Monumental RSN, LLC (c)						Media/Entertainment						S+ 6.00% (10.76%), 9/20/2027						7,125						7,061						7,196						0.4		%
Muth Mirror Systems, LLC (c)						Technology						L+ 6.75% (11.89%), 4/23/2025						1,299						1,299						1,193						0.1		%
Muth Mirror Systems, LLC (c) (h) (i)						Technology						L+ 6.75% (11.86%), 4/23/2025						14,742						14,640						13,540						0.8		%
New Star Metals, Inc. (c) (h) (i)						Industrials						L+ 5.00% (10.16%), 1/9/2026						32,363						32,048						31,337						1.9		%
NTM Acquisition Corp. (c) (h) (i)						Media/Entertainment						S+ 7.25% (12.30%) 1.00% PIK, 6/7/2024						20,262						20,262						19,796						1.2		%
Odessa Technologies, Inc. (c) (h)						Software/Services						L+ 5.75% (10.51%), 10/19/2027						14,306						14,089						14,053						0.8		%
ORG GC Holdings, LLC (c) (o)						Business Services						L+ 6.50% (11.66%), 11/29/2026						9,340						9,340						9,340						0.6		%
Pie Buyer, Inc. (c)						Food & Beverage						L+ 5.50% (10.65%), 4/5/2027						6,052						6,052						6,052						0.4		%
Pie Buyer, Inc. (c)						Food & Beverage						L+ 5.50% (10.75%), 4/6/2026						583						583						583						0.0		%
Pie Buyer, Inc. (c) (i)						Food & Beverage						S+ 5.50% (10.57%), 4/5/2027						2,072						2,039						2,072						0.1		%
Pie Buyer, Inc. (c) (i)						Food & Beverage						L+ 5.50% (10.65%), 4/5/2027						27,963						27,402						27,963						1.7		%
PlayPower, Inc. (c) (h) (i)						Industrials						S+ 5.50% (10.25%), 5/8/2026						23,629						23,471						20,463						1.2		%
Pluralsight, LLC (c)						Software/Services						L+ 8.00% (12.78%), 4/6/2027						801						801						765						0.0		%
Pluralsight, LLC (c) (h)						Software/Services						L+ 8.00% (12.78%), 4/6/2027						18,826						18,574						17,966						1.1		%
Pluralsight, LLC (c) (h)						Software/Services						L+ 8.00% (12.78%), 4/6/2027						6,728						6,634						6,420						0.4		%
Point Broadband Acquisition, LLC (c)						Telecom						S+ 6.00% (10.88%), 10/2/2028						7,077						7,077						7,077						0.4		%
Point Broadband Acquisition, LLC (c) (h)						Telecom						S+ 6.00% (10.88%), 10/2/2028						19,098						18,723						19,098						1.1		%
Premier Global Services, Inc. (c) (t)						Telecom						P+ 5.50% (13.50%), 6/8/2023						5,024						4,908						—						—		%
Premier Global Services, Inc. (c) (t)						Telecom						P+ 5.50% (13.50%), 4/7/2023						969						969						146						0.0		%
PSKW, LLC (c) (h) (i)						Healthcare						L+ 6.25% (11.10%), 3/9/2026						29,100						28,744						29,100						1.7		%
Questex, Inc. (c) (h) (i)						Media/Entertainment						L+ 4.25% (9.28%), 9/9/2024						15,462						15,388						15,144						0.9		%
Reddy Ice Corp. (c)						Food & Beverage						L+ 6.00% (10.79%), 7/1/2025						1,779						1,771						1,744						0.1		%
Reddy Ice Corp. (c)						Food & Beverage						L+ 6.00% (10.79%), 7/1/2025						1,457						1,457						1,429						0.1		%

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

11

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2023

(Unaudited)

Portfolio Company (f) (g) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
Reddy Ice Corp. (c)						Food & Beverage						L+ 6.00% (10.79%), 7/1/2025						$	4,802					$	4,802					$	4,708					0.3		%
Reddy Ice Corp. (c)						Food & Beverage						P+ 5.00% (13.00%), 7/1/2024						694						694						681						0.0		%
Reddy Ice Corp. (c) (h) (i)						Food & Beverage						L+ 6.00% (10.79%), 7/1/2025						18,902						18,689						18,533						1.1		%
Relativity Oda, LLC (c) (i)						Software/Services						L+ 7.50% (12.35%) PIK, 5/12/2027						5,365						5,286						5,191						0.3		%
REP TEC Intermediate Holdings, Inc. (c)						Software/Services						L+ 6.50% (11.66%), 6/19/2025						519						519						519						0.0		%
REP TEC Intermediate Holdings, Inc. (c) (h) (i)						Software/Services						L+ 6.50% (11.66%), 6/19/2025						28,420						28,110						28,420						1.7		%
Roadsafe Holdings, Inc. (c)						Industrials						P+ 4.75% (12.75%), 10/19/2027						8,440						8,440						8,302						0.5		%
Roadsafe Holdings, Inc. (c) (i)						Industrials						L+ 5.75% (10.87%), 10/19/2027						7,733						7,625						7,607						0.5		%
RSC Acquisition, Inc. (c)						Financials						S+ 5.50% (10.55%), 10/30/2026						267						267						267						0.0		%
RSC Acquisition, Inc. (c)						Financials						S+ 5.50% (10.54%), 10/30/2026						2,404						2,404						2,404						0.1		%
RSC Acquisition, Inc. (c) (i)						Financials						S+ 5.50% (10.55%), 10/30/2026						15,151						15,138						15,151						0.9		%
Saturn SHC Buyer Holdings, Inc. (c) (h)						Healthcare						S+ 6.00% (10.94%), 11/18/2027						32,907						32,399						32,908						2.0		%
Sherlock Buyer Corp. (c) (i)						Business Services						S+ 5.75% (10.75%), 12/8/2028						11,013						10,834						10,820						0.6		%
Simplifi Holdings, Inc. (c)						Media/Entertainment						P+ 4.50% (12.50%), 10/1/2026						1,891						1,891						1,860						0.1		%
Simplifi Holdings, Inc. (c) (h)						Media/Entertainment						L+ 5.50% (10.20%), 10/1/2027						35,017						34,491						34,432						2.0		%
Skillsoft Corp. (a) (h)						Technology						S+ 5.25% (10.10%), 7/14/2028						1,370						1,355						1,152						0.1		%
St. Croix Hospice Acquisition Corp. (c)						Healthcare						L+ 6.00% (11.16%), 10/30/2026						2,801						2,801						2,801						0.2		%
St. Croix Hospice Acquisition Corp. (c) (i)						Healthcare						L+ 6.00% (11.16%), 10/30/2026						25,355						25,053						25,355						1.5		%
Striper Buyer, LLC (c) (h)						Paper & Packaging						L+ 5.50% (10.34%), 12/30/2026						12,236						12,158						12,236						0.7		%
Subsea Global Solutions, LLC (c)						Business Services						L+ 6.75% (11.94%), 12/31/2023						963						963						963						0.1		%
Subsea Global Solutions, LLC (c) (i)						Business Services						L+ 6.75% (11.94%), 12/31/2023						4,637						4,637						4,637						0.3		%
Subsea Global Solutions, LLC (c) (i)						Business Services						L+ 6.75% (11.94%), 12/31/2023						7,040						7,040						7,040						0.4		%
SunMed Group Holdings, LLC (c)						Healthcare						L+ 5.75% (10.77%), 6/16/2027						264						264						261						0.0		%
SunMed Group Holdings, LLC (c) (h)						Healthcare						L+ 5.75% (10.91%), 6/16/2028						8,941						8,824						8,808						0.5		%
Tax Defense Network, LLC (c) (p) (t)						Consumer						L+ 6.00% (10.76%) PIK, 3/31/2023						7,492						3,833						191						0.0		%
Tax Defense Network, LLC (c) (p) (t)						Consumer						10.00% PIK, 3/31/2023						4,371						2,986						4,371						0.2		%
Tax Defense Network, LLC (c) (p) (t)						Consumer						L+ 6.00% (10.76%) PIK, 3/31/2023						42,207						21,646						1,076						0.1		%
The NPD Group, LP (c)						Business Services						S+ 6.25% (10.95%) 2.75% PIK, 12/1/2028						34,364						33,759						33,749						2.0		%
The NPD Group, LP (c)						Business Services						S+ 5.75% (10.45%), 12/1/2027						269						269						264						0.0		%
Therapy Brands Holdings, LLC (c) (h)						Healthcare						L+ 4.00% (8.78%), 5/18/2028						4,316						4,304						4,316						0.3		%
Trinity Air Consultants Holdings Corp. (c)						Business Services						L+ 5.25% (10.35%), 6/29/2027						3,836						3,836						3,778						0.2		%
Trinity Air Consultants Holdings Corp. (c) (h)						Business Services						L+ 5.25% (10.18%), 6/29/2027						20,424						20,135						20,118						1.2		%
Triple Lift, Inc. (c)						Software/Services						S+ 5.25% (9.58%), 5/5/2028						1,265						1,265						1,244						0.1		%
Triple Lift, Inc. (c) (i)						Software/Services						S+ 5.50% (10.45%), 5/5/2028						28,191						27,769						27,711						1.5		%
University of St. Augustine Acquisition Corp. (c) (h) (i)						Education						S+ 4.25% (9.16%), 2/2/2026						23,218						22,982						23,218						1.4		%
Urban One, Inc. (a)						Media/Entertainment						7.38%, 2/1/2028						1,561						1,561						1,419						0.1		%
US Oral Surgery Management Holdco, LLC (c)						Healthcare						L+ 6.00% (11.10%), 11/18/2027						4,821						4,821						4,773						0.3		%
US Oral Surgery Management Holdco, LLC (c)						Healthcare						L+ 6.50% (11.78%), 11/18/2027						1,271						1,271						1,258						0.1		%

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

12

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2023

(Unaudited)

Portfolio Company (f) (g) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
US Oral Surgery Management Holdco, LLC (c) (h)						Healthcare						L+ 6.00% (10.91%), 11/18/2027						$	12,173					$	11,985					$	12,051					0.7		%
US Salt Investors, LLC (c)						Chemicals						L+ 5.50% (10.34%), 7/19/2028						19,881						19,580						19,510						1.2		%
Vantage Mobility International, LLC (c) (p) (t)						Transportation						L+ 6.00% (10.67%) PIK, 3/21/2024						2,005						251						—						—		%
Vantage Mobility International, LLC (c) (p) (t)						Transportation						L+ 6.00% (10.67%) PIK, 3/21/2024						257						244						—						—		%
Vensure Employer Services, Inc. (c) (i)						Business Services						S+ 4.75% (9.55%), 4/1/2027						11,852						11,793						11,852						0.7		%
Victors CCC Buyer, LLC (c)						Business Services						S+ 5.75% (10.52%), 6/1/2029						16,904						16,606						16,607						1.0		%
West Coast Dental Services, Inc. (c)						Healthcare						S+ 5.75% (10.57%), 7/1/2028						340						340						334						0.0		%
West Coast Dental Services, Inc. (c)						Healthcare						S+ 5.75% (10.58%), 7/1/2028						19,715						19,411						19,413						1.2		%
Westwood Professional Services, Inc. (c)						Business Services						S+ 6.00% (10.91%), 5/26/2026						1,007						1,007						1,007						0.1		%
Westwood Professional Services, Inc. (c) (i)						Business Services						S+ 6.00% (10.91%), 5/26/2026						8,539						8,431						8,539						0.5		%
WHCG Purchaser III, Inc. (c)						Healthcare						L+ 5.75% (10.91%), 6/22/2028						7,060						7,060						5,939						0.4		%
WHCG Purchaser III, Inc. (c)						Healthcare						L+ 5.75% (10.91%), 6/22/2026						4,213						4,213						3,728						0.2		%
WHCG Purchaser III, Inc. (c) (h)						Healthcare						L+ 5.75% (10.91%), 6/22/2028						29,051						28,617						24,437						1.5		%
WIN Holdings III Corp. (c) (h)						Consumer						L+ 5.25% (10.40%), 7/16/2028						31,230						30,758						31,230						1.9		%
WMK, LLC (c)						Business Services						S+ 5.75% (10.80%), 9/5/2025						348						346						348						0.0		%
WMK, LLC (c)						Business Services						S+ 5.75% (10.58%), 9/5/2024						2,618						2,618						2,618						0.2		%
WMK, LLC (c)						Business Services						S+ 5.75% (10.56%), 9/5/2025						11,118						11,118						11,118						0.6		%
WMK, LLC (c)						Business Services						S+ 5.75% (10.81%), 9/5/2025						7,980						7,697						7,980						0.5		%
WMK, LLC (c) (h) (i)						Business Services						S+ 5.75% (10.56%), 9/5/2025						17,928						17,804						17,928						1.1		%
WMK, LLC (c) (i)						Business Services						S+ 5.75% (10.80%), 9/5/2025						2,525						2,520						2,525						0.1		%
WMK, LLC (c) (i)						Business Services						S+ 5.75% (10.70%), 9/5/2025						3,687						3,621						3,687						0.2		%
Zendesk, Inc. (c)						Software/Services						S+ 7.00% (11.88%) 3.50% PIK, 11/22/2028						42,801						41,996						41,996						2.5		%
Subtotal Senior Secured First Lien Debt																								$	2,091,184					$	2,035,733					121.1		%
Senior Secured Second Lien Debt - 11.9% (b)
Accentcare, Inc. (c) (h)						Healthcare						L+ 8.75% (13.70%), 6/21/2027						$	30,152					$	29,717					$	25,026					1.5		%
Anchor Glass Container Corp. (c) (t)						Paper & Packaging						L+ 7.75% (12.56%), 12/7/2024						6,667						5,949						2,003						0.1		%
Aruba Investments Holdings, LLC (c) (i)						Chemicals						L+ 7.75% (12.59%), 11/24/2028						3,759						3,719						3,576						0.2		%
Astro AB Merger Sub, Inc. (a) (c) (h)						Financials						L+ 8.00% (12.83%), 4/30/2025						8,162						8,147						6,183						0.4		%
Carlisle FoodService Products, Inc. (c)						Consumer						L+ 7.75% (12.99%), 3/20/2026						10,719						10,640						10,166						0.6		%
CommerceHub, Inc. (c)						Technology						S+ 7.00% (11.78%), 12/29/2028						12,360						12,316						10,506						0.6		%
Corelogic, Inc.						Business Services						L+ 6.50% (11.38%), 6/4/2029						10,808						10,724						7,950						0.5		%
HAH Group Holding Company, LLC (c) (h)						Healthcare						L+ 8.50% (13.35%), 10/30/2028						12,445						12,228						12,445						0.7		%
Integrated Efficiency Solutions, Inc. (c) (o)						Industrials						10.00%, 12/31/2026						1,627						1,134						815						0.1		%
Mercury Merger Sub, Inc. (c)						Business Services						L+ 6.50% (11.31%), 8/2/2029						13,965						13,873						13,518						0.8		%
ORG GC Holdings, LLC (c) (o)						Business Services						18.00%, 11/29/2027						4,296						4,296						4,044						0.2		%
PetVet Care Centers, LLC (c) (h)						Healthcare						L+ 6.25% (11.09%), 2/13/2026						3,539						3,533						3,464						0.2		%
Project Boost Purchaser, LLC (c)						Business Services						L+ 8.00% (12.84%), 5/31/2027						1,848						1,848						1,848						0.1		%

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

13

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2023

(Unaudited)

Portfolio Company (f) (g) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
Proofpoint, Inc. (c) (h)						Software/Services						L+ 6.25% (11.09%), 8/31/2029						$	7,842					$	7,811					$	7,502					0.4		%
QuickBase, Inc. (c)						Technology						L+ 8.00% (12.84%), 4/2/2027						7,484						7,409						7,484						0.4		%
RealPage, Inc. (c) (i)						Software/Services						L+ 6.50% (11.34%), 4/23/2029						13,647						13,492						13,067						0.8		%
Recess Holdings, Inc. (c) (h)						Industrials						L+ 7.75% (12.58%), 9/29/2025						16,134						16,046						16,134						1.0		%
SSH Group Holdings, Inc. (c)						Education						L+ 8.25% (13.41%), 7/30/2026						10,122						10,080						10,122						0.6		%
Therapy Brands Holdings, LLC (c) (h)						Healthcare						L+ 6.75% (11.53%), 5/18/2029						4,654						4,629						4,654						0.3		%
Travelpro Products, Inc. (a) (c)						Consumer						13.00%, 2.00% PIK, 11/20/2024						2,998						2,998						2,998						0.2		%
Travelpro Products, Inc. (a) (c) (m)						Consumer						13.00%, 2.00% PIK, 11/20/2024						CAD	3,462					2,684						2,562						0.2		%
USIC Holdings, Inc. (c) (h)						Business Services						L+ 6.50% (11.34%), 5/14/2029						5,798						5,753						5,589						0.3		%
Vantage Mobility International, LLC (c) (p) (t)						Transportation						L+ 6.00% (10.67%) PIK, 3/21/2024						1,245						17						—						—		%
Vantage Mobility International, LLC (c) (p) (t)						Transportation						L+ 6.00% (10.67%) PIK, 3/21/2024						4,042						2,915						—						—		%
Victory Buyer, LLC (c)						Industrials						L+ 7.00% (11.78%), 11/19/2029						31,686						31,417						29,405						1.7		%
Subtotal Senior Secured Second Lien Debt																								$	223,375					$	201,061					11.9		%
Subordinated Debt - 7.3% (b)
Post Road Equipment Finance, LLC (c) (o)						Financials						L+ 7.75% (12.54%), 12/31/2028						$	16,457					$	16,457					$	16,457					1.0		%
Post Road Equipment Finance, LLC (c) (o)						Financials						L+ 7.75% (12.54%), 12/31/2028						38,100						37,988						38,099						2.3		%
Siena Capital Finance, LLC (c) (o)						Financials						12.50%, 11/26/2026						67,000						67,000						67,000						4.0		%
Subtotal Subordinated Debt																								$	121,445					$	121,556					7.3		%
Collateralized Securities - 1.7% (b)
Collateralized Securities - Debt Investments
NewStar Arlington Senior Loan Program, LLC 14-1A FR (a) (c) (p)						Diversified Investment Vehicles						L+ 11.00% (15.82%), 4/25/2031						$	4,750					$	4,607					$	4,181					0.3		%
Newstar Fairfield Fund CLO, Ltd. 2015-1RA F (a) (c) (p)						Diversified Investment Vehicles						L+ 7.50% (12.31%), 1/20/2027						10,728						10,342						9,228						0.5		%
Whitehorse, Ltd. 2014-1A E (a) (c) (p)						Diversified Investment Vehicles						L+ 4.55% (9.36%) PIK, 5/1/2026						8,181						8,135						7,038						0.4		%
Collateralized Securities - Equity Investments (n)
NewStar Arlington Senior Loan Program, LLC 14-1A SUB (a) (c) (k) (p)						Diversified Investment Vehicles						16.15%, 4/25/2031						$	31,603					$	11,112					$	8,842					0.5		%
Newstar Fairfield Fund CLO, Ltd. 2015-1RA SUB (a) (c) (k) (p)						Diversified Investment Vehicles						0.00%, 1/20/2027						31,575						6,285						—						—		%
OFSI Fund, Ltd. 2014-6A Side Letter (a) (c)						Diversified Investment Vehicles						0.00%, 3/20/2025						1,970						47						—						—		%
Whitehorse, Ltd. 2014-1A Side Letter (a) (c) (p)						Diversified Investment Vehicles						0.00%, 5/1/2026						1,886						134						—						—		%
Whitehorse, Ltd. 2014-1A SUB (a) (c) (k) (p)						Diversified Investment Vehicles						0.00%, 5/1/2026						36,000						6,965						—						—		%
Subtotal Collateralized Securities																								$	47,627					$	29,289					1.7		%
Equity/Other - 30.5% (b) (d)
Aden & Anais Holdings, Inc. (c) (e) (v)						Retail												4,470						$	—					$	—					—		%
Baker Hill Acquisition, LLC (c) (e)						Financials												22,653						—						—						—		%
Black Mountain Sand, LLC (c) (e) (u)						Energy												55,463						—						2,007						0.1		%
Cirque Du Soleil Holding USA Newco, Inc. (a) (e) (p)						Media/Entertainment												539,708						1,224						5,531						0.3		%

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

14

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2023

(Unaudited)

Portfolio Company (f) (g) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
Cirque Du Soleil Holding USA Newco, Inc. (a) (e) (p)						Media/Entertainment												874,000						$	437					$	2,258					0.1		%
Clover Technologies Group, LLC (c) (e)						Industrials												180,274						1,153						52						0.0		%
Clover Technologies Group, LLC (c) (e)						Industrials												2,753						275						1,122						0.1		%
CRS-SPV, Inc. (c) (e) (o)						Industrials												246						2,219						1,559						0.1		%
Danish CRJ, Ltd. (a) (c) (e) (o) (r)						Transportation												5,002						—						—						—		%
Del Real, LLC (c) (e) (u)						Food & Beverage												670,510						382						221						0.0		%
Dyno Acquiror, Inc. (c) (e)						Consumer												134,102						58						21						0.0		%
FBLC Senior Loan Fund, LLC (a) (c) (j) (o)						Diversified Investment Vehicles												304,934						304,934						304,934						18.1		%
First Eagle Greenway Fund II, LLC (a) (e) (p)						Diversified Investment Vehicles												5,329						3,977						401						0.0		%
Foresight Energy Operating, LLC (c) (e) (p) (u)						Energy												158,093						2,087						3,519						0.2		%
HemaSource, Inc. (c) (e) (v)						Healthcare												223,503						168						410						0.0		%
Integrated Efficiency Solutions, Inc. (c) (e) (o) (u)						Industrials												55,991						—						—						—		%
Integrated Efficiency Solutions, Inc. (c) (e) (o) (u)						Industrials												57,427						—						—						—		%
Internap Corp. (c) (e) (o)						Business Services												1,293,189						543						505						0.1		%
Jakks Pacific, Inc. (c)						Consumer												5,303						232						788						0.1		%
Kahala Ireland OpCo Designated Activity Company (a) (c) (e) (o) (x)						Transportation												3,250,000						—						3,250						0.2		%
Kahala Ireland OpCo Designated Activity Company (a) (c) (o) (x)						Transportation												1						—						3,237						0.2		%
Kahala US OpCo, LLC (a) (c) (e) (o) (w)						Transportation												4,413,472						—						—						—		%
KidKraft, Inc. (c) (e) (u)						Consumer												2,682,257						—						751						0.0		%
Lakeview Health Holdings, Inc. (c) (e) (o)						Healthcare												5,272						—						—						—		%
McDonald Worley, P.C. (c) (e)						Business Services												20,167						20						3,706						0.2		%
MCS Acquisition Corp. (c) (e) (p)						Business Services												31,521						4,103						747						0.1		%
MCS Acquisition Corp. (c) (e) (p)						Business Services												525,257						525						525						0.0		%
MGTF Holdco, LLC (c) (e) (o) (u)						Media/Entertainment												402,000						—						—						—		%
Motor Vehicle Software Corp. (c) (e) (v)						Business Services												223,503						318						262						0.0		%
ORG GC Holdings, LLC (c) (e) (o) (u)						Business Services												93,380						212						—						—		%
ORG GC Holdings, LLC (c) (e) (o) (u)						Business Services												1,771						—						—						—		%
PennantPark Credit Opportunities Fund II, LP (a) (e) (p)						Diversified Investment Vehicles												8,739						751						1,197						0.1		%
Point Broadband Acquisition, LLC (c) (e) (u)						Telecom												2,550,487						2,550						3,407						0.2		%
Post Road Equipment Finance, LLC (c) (o) (u)						Financials												79,479						81,787						81,692						4.9		%
RMP Group, Inc. (c) (e) (u)						Financials												223						164						369						0.0		%
Siena Capital Finance, LLC (c) (o)						Financials												41,789,400						42,499						77,310						4.6		%
Skillsoft Corp. (a) (e) (s)						Technology												248,712						2,636						497						0.0		%
Smile Brands, Inc. (c) (e)						Healthcare												712						—						874						0.1		%
Squan Holding Corp. (c) (e)						Telecom												180,835						—						—						—		%
Tap Rock Resources, LLC (c) (p) (u)						Energy												18,356,442						—						1,215						0.1		%
Tax Defense Network, LLC (c) (e) (p)						Consumer												147,099						425						—						—		%

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

15

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2023

(Unaudited)

Portfolio Company (f) (g) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
Tax Defense Network, LLC (c) (e) (p)						Consumer												633,382						$	—					$	—					—		%
Tennenbaum Waterman Fund, LP (a) (p)						Diversified Investment Vehicles												10,000						10,000						8,448						0.5		%
Travelpro Products, Inc. (a) (c) (e)						Consumer												447,007						506						498						0.0		%
United Biologics, LLC (c) (e) (u)						Healthcare												39,769						132						—						—		%
United Biologics, LLC (c) (e) (u)						Healthcare												3,155						—						—						—		%
United Biologics, LLC (c) (e) (u)						Healthcare												4,206						31						—						—		%
United Biologics, LLC (c) (e) (u)						Healthcare												99,236						—						—						—		%
United Biologics, LLC (c) (e) (u)						Healthcare												223						35						—						—		%
USASF Holdco, LLC (c) (e) (u)						Financials												10,000						10						—						—		%
USASF Holdco, LLC (c) (e) (u)						Financials												490						490						—						—		%
USASF Holdco, LLC (c) (e) (u)						Financials												139						139						—						—		%
Vantage Mobility International, LLC (c) (e) (p)						Transportation												512,923						—						—						—		%
Vantage Mobility International, LLC (c) (e) (p)						Transportation												4,639,261						3,140						—						—		%
Vantage Mobility International, LLC (c) (e) (p)						Transportation												1,940,977						—						—						—		%
World Business Lenders, LLC (c) (e)						Financials												922,669						3,750						1,615						0.1		%
WPNT, LLC (c) (e) (o) (u)						Media/Entertainment												402,000						—						—						—		%
Wythe Will Tzetzo, LLC (c) (e) (u)						Food & Beverage												22,312						302						—						—		%
YummyEarth, Inc. (c) (e)						Food & Beverage												223						—						—						—		%
Subtotal Equity/Other																								$	472,214					$	512,928					30.5		%
TOTAL INVESTMENTS - 172.5% (b)																								$	2,955,845					$	2,900,567					172.5		%

_____________

(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 85.3% 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 as of March 31, 2023.

(c)The fair value of investments with respect to securities for which market quotations are not readily available is determined in good faith by the Company's Board of Directors as required by the 1940 Act. Such investments are valued using significant unobservable inputs (See Note 3 to the consolidated financial statements).

(d)All amounts are in thousands except share amounts.

(e)Non-income producing at March 31, 2023.

(f)The Company has various unfunded commitments to portfolio companies. Please refer to Note 7 - Commitments and Contingencies for details of these unfunded commitments.

(g)Unless otherwise indicated, all of the Company's investments or a portion thereof are pledged as collateral under the JPM Revolver Facility.

(h)The Company's investment or a portion thereof is pledged as collateral under the JPM Credit Facility. Individual investments can be divided into parts which are pledged to separate credit facilities.

(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 falls under the definition of a significant subsidiary, as it exceeded the threshold of at least one of the tests under Rule 4-08(g), or exceeded the threshold of at least one of the tests under Rule 3-09. See Note 3 for summarized financial information.

(k)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.

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

16

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2023

(Unaudited)

(l)The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate ("LIBOR" or "L"), Secured Overnight Financing Rate ("SOFR" or "S"), or Prime ("P") and which reset daily, monthly, quarterly, or semiannually. For each, the Company has provided the spread over the relevant reference rate and the current interest rate in effect at March 31, 2023. Certain investments are subject to reference rate floors. For fixed rate loans, a spread above a reference rate is not applicable. For floating rate securities the all-in rate is disclosed within parentheses.

(m)The principal amount (par amount) is denominated in Canadian Dollars ("CAD").

(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 (k) 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/or does not have the power to exercise control over the management or policies of such portfolio company. A company is generally presumed to be "controlled" when the Company owns more than 25% of the portfolio company's voting securities and/or has the power to exercise control over the management or policies of such portfolio company. The Company classifies this investment as "controlled".

(p)The provisions of the 1940 Act classify investments further based on the level of ownership that the Company maintains in a particular portfolio company. As defined in the 1940 Act, a company is generally deemed as "non-affiliated" when the Company owns less than 5% of a portfolio company's voting securities and "affiliated" when the Company owns 5% or more of a portfolio company's voting securities. The Company classifies this investment as "affiliated".

(q)Unless otherwise indicated, all investments in the Consolidated Schedules of Investments are non-affiliated, non-controlled investments.

(r)The Company's investment is held through the consolidated subsidiary, Kahala Aviation Holdings, LLC, which owns 49% of the operating company, Danish CRJ LTD.

(s)The investment is not a restricted security. All other securities are restricted securities.

(t)The investment is on non-accrual status as of March 31, 2023.

(u)Investments are held in the taxable wholly-owned, consolidated subsidiary, 54th Street Equity Holdings, Inc.

(v)The investment is held through BSP TCAP Acquisition Holdings LP, which is an affiliated acquisition entity. 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, 2023.

(w)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.

(x)The Company's investment is held through the consolidated subsidiary, Kahala Aviation Holdings, LLC, which owns 100% of the equity of the operating company, Kahala Ireland OpCo Designated Activity Company.

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

17

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2023

(Unaudited)

The following table shows the portfolio composition by industry grouping based on fair value at March 31, 2023:

			At March 31, 2023
			Investments at Fair Value						Percentage of Total Portfolio
Business Services			$	442,990					15.2		%
Healthcare			415,139						14.3		%
Financials			384,690						13.3		%
Diversified Investment Vehicles (1)			344,269						11.9		%
Software/Services			288,010						9.9		%
Industrials			269,884						9.3		%
Media/Entertainment			187,292						6.5		%
Paper & Packaging			144,949						5.0		%
Consumer			114,872						4.0		%
Food & Beverage			70,757						2.4		%
Utilities			54,774						1.9		%
Education			41,683						1.4		%
Chemicals			36,452						1.3		%
Technology			34,372						1.2		%
Telecom			29,728						1.0		%
Transportation			26,566						0.9		%
Energy			14,140						0.5		%
Total			$	2,900,567					100.0		%

_____________

(1) Includes FBLC's investment in FBLC Senior Loan Fund, LLC, which represents 10.5% of the fair value of investments as of March 31, 2023.

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

18

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

December 31, 2022
Portfolio Company (f) (q) (v)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
Senior Secured First Lien Debt - 119.8% (b)
1236904 BC, Ltd. (c) (h)						Software/Services						L+ 7.50% (11.85%), 3/4/2027						$	10,441					$	10,298					$	10,600					0.6		%
1236904 BC, Ltd. (c) (h) (i)						Software/Services						L+ 5.50% (9.88%), 3/4/2027						18,450						18,003						17,841						1.1		%
Absolute Software Corp. (a) (c) (i)						Software/Services						L+ 6.00% (10.73%), 7/1/2027						45,093						44,417						44,416						2.7		%
ADCS Clinics Intermediate Holdings, LLC (c) (h)						Healthcare						L+ 6.50% (11.43%), 5/7/2027						13,633						13,436						13,379						0.8		%
ADCS Clinics Intermediate Holdings, LLC (c)						Healthcare						L+ 6.50% (11.70%), 5/7/2027						2,794						2,794						2,742						0.2		%
Alera Group Intermediate Holdings, Inc. (c)						Financials						S+ 6.50% (10.92%), 10/2/2028						5,890						5,779						5,779						0.3		%
Alera Group Intermediate Holdings, Inc. (c)						Financials						S+ 6.50% (10.92%), 10/2/2028						6,598						6,598						6,473						0.4		%
Arch Global Precision, LLC (c)						Industrials						L+ 4.75% (8.42%), 4/1/2026						2,356						2,356						2,356						0.1		%
Arch Global Precision, LLC (c) (h) (i)						Industrials						L+ 4.75% (9.17%), 4/1/2026						7,479						7,457						7,479						0.4		%
Arctic Holdco, LLC (c)						Paper & Packaging						S+ 6.00% (10.68%), 12/23/2026						2,439						2,439						2,403						0.1		%
Arctic Holdco, LLC (c) (h) (i)						Paper & Packaging						S+ 6.00% (10.68%), 12/23/2026						60,674						59,823						59,764						3.6		%
Armada Parent, Inc. (c)						Industrials						L+ 5.75% (10.13%), 10/29/2027						44,717						43,998						43,997						2.6		%
Armada Parent, Inc. (c)						Industrials						L+ 5.75% (10.13%), 10/29/2027						2,253						2,253						2,217						0.1		%
Avalara, Inc. (c)						Software/Services						S+ 7.25% (11.83%), 10/19/2028						40,296						39,323						39,321						2.4		%
Aveanna Healthcare, LLC (h)						Healthcare						L+ 3.75% (7.77%), 7/17/2028						910						905						696						0.0		%
Aventine Holdings, LLC (c)						Media/Entertainment						L+ 6.00% (10.38%) 4.00% PIK, 6/18/2027						9,584						9,584						9,459						0.6		%
Aventine Holdings, LLC (c)						Media/Entertainment						10.25% PIK, 6/18/2027						24,798						24,342						24,265						1.5		%
Aventine Holdings, LLC (c) (i)						Media/Entertainment						L+ 6.00% (10.38%) 4.00% PIK, 6/18/2027						26,220						25,811						25,876						1.6		%
Axiom Global, Inc. (c) (h) (i)						Business Services						L+ 4.75% (9.04%), 10/1/2026						20,316						20,195						20,316						1.2		%
BCPE Oceandrive Buyer, Inc. (c) (i)						Healthcare						L+ 6.25% (10.67%), 12/29/2028						3,399						3,399						3,284						0.2		%
BCPE Oceandrive Buyer, Inc. (c) (i)						Healthcare						L+ 6.25% (10.67%), 12/29/2028						20,396						20,003						19,701						1.2		%
BCPE Oceandrive Buyer, Inc. (c)						Healthcare						L+ 6.25% (10.99%), 12/30/2026						3,425						3,425						3,308						0.2		%
BCPE Oceandrive Buyer, Inc. (c)						Healthcare						L+ 6.25% (10.67%), 12/29/2028						1,727						1,727						1,668						0.1		%
Black Mountain Sand, LLC (c)						Energy						L+ 9.00% (13.70%), 6/30/2024						8,332						8,310						8,332						0.5		%
Capstone Logistics (c)						Transportation						L+ 4.75% (9.13%), 11/12/2027						1,115						1,115						1,115						0.1		%
Capstone Logistics (c) (h)						Transportation						L+ 4.75% (9.13%), 11/12/2027						19,014						18,882						19,015						1.1		%
CHA Holdings, Inc. (c) (i)						Business Services						L+ 4.50% (9.23%), 4/10/2025						514						496						514						0.0		%
Cold Spring Brewing, Co. (c) (h) (i)						Food & Beverage						S+ 4.75% (9.07%), 12/19/2025						7,008						6,973						7,008						0.4		%
Communication Technology Intermediate, LLC (c) (h)						Business Services						L+ 5.50% (9.88%), 5/5/2027						17,891						17,632						17,891						1.1		%
Communication Technology Intermediate, LLC (c) (i)						Business Services						L+ 5.50% (9.88%), 5/5/2027						6,223						6,223						6,223						0.4		%
Communication Technology Intermediate, LLC (c)						Business Services						L+ 5.50% (9.88%), 5/5/2027						205						205						205						0.0		%
Corfin Industries, LLC (c)						Industrials						L+ 5.75% (9.82%), 12/27/2027						1,602						1,602						1,602						0.1		%
Corfin Industries, LLC (c) (h) (i)						Industrials						L+ 5.75% (9.42%), 2/5/2026						16,394						16,212						16,394						1.0		%
Cornerstone Chemical, Co.						Chemicals						6.75%, 8/15/2024						14,850						14,541						11,919						0.7		%
CRS-SPV, Inc. (c) (o)						Industrials						L+ 4.50% (8.88%), 3/8/2023						62						62						62						0.0		%
Drilling Info Holdings, Inc. (c) (i)						Business Services						L+ 4.25% (8.63%), 7/30/2025						6,952						6,816						6,952						0.4		%
Dynagrid Holdings, LLC (c) (h)						Utilities						L+ 6.00% (10.02%), 12/18/2025						3,897						3,832						3,897						0.2		%
Dynagrid Holdings, LLC (c) (i)						Utilities						L+ 6.00% (9.67%), 12/18/2025						14,191						14,012						14,191						0.9		%
Eliassen Group, LLC (c) (i)						Business Services						S+ 5.50% (10.08%), 4/14/2028						11,586						11,482						11,484						0.7		%
Eliassen Group, LLC (c)						Business Services						S+ 5.50% (8.88%), 4/14/2028						439						439						435						0.0		%
Faraday Buyer, LLC (c)						Utilities						S+ 7.00% (11.32%), 10/11/2028						26,132						25,377						25,377						1.5		%
FGT Purchaser, LLC (c) (h)						Consumer						S+ 5.50% (10.18%), 9/13/2027						21,231						20,898						21,231						1.3		%
FGT Purchaser, LLC (c)						Consumer						L+ 5.50% (10.18%), 9/13/2027						815						815						815						0.0		%
First Eagle Holdings, Inc. (c)						Financials						S+ 6.50% (10.73%), 3/1/2027						15,000						14,590						14,592						0.9		%

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

19

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

December 31, 2022
Portfolio Company (f) (q) (v)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
Foresight Energy Operating, LLC (c) (p)						Energy						L+ 8.00% (12.73%), 6/30/2027						$	1,077					$	1,077					$	1,077					0.1		%
Galway Borrower, LLC (c) (h)						Financials						L+ 5.25% (9.98%), 9/29/2028						29,773						29,372						29,252						1.8		%
Geosyntec Consultants, Inc. (c)						Business Services						S+ 5.25% (9.57%), 5/18/2029						27,236						26,802						26,803						1.6		%
Green Energy Partners/Stonewall, LLC (c)						Utilities						L+ 6.00% (10.73%), 11/12/2026						10,244						10,086						10,244						0.6		%
Higginbotham Insurance Agency, Inc. (c) (h)						Financials						L+ 5.25% (9.63%), 11/25/2026						14,626						14,514						14,626						0.9		%
Higginbotham Insurance Agency, Inc. (c)						Financials						L+ 5.25% (9.63%), 11/25/2026						2,910						2,910						2,910						0.2		%
Hospice Care Buyer, Inc. (c)						Healthcare						L+ 6.50% (11.24%), 12/9/2026						4,530						4,530						4,479						0.3		%
Hospice Care Buyer, Inc. (c) (h)						Healthcare						L+ 6.50% (10.92%), 12/9/2026						24,313						23,809						24,038						1.4		%
Hospice Care Buyer, Inc. (c) (h)						Healthcare						L+ 6.50% (10.92%), 12/9/2026						18,008						17,702						17,804						1.1		%
Hospice Care Buyer, Inc. (c)						Healthcare						P+ 5.50% (13.00%), 12/9/2026						1,903						1,903						1,882						0.1		%
Hospice Care Buyer, Inc. (c)						Healthcare						L+ 6.50% (11.23%), 12/9/2026						2,106						2,050						2,083						0.1		%
ICR Operations, LLC (c)						Business Services						L+ 5.25% (9.98%), 11/22/2028						42,345						41,633						41,570						2.5		%
ICR Operations, LLC (c)						Business Services						L+ 5.25% (9.98%), 11/22/2027						1,545						1,545						1,516						0.1		%
Ideal Tridon Holdings, Inc. (c)						Industrials						L+ 5.25% (8.92%), 7/31/2024						45						45						45						0.0		%
Ideal Tridon Holdings, Inc. (c) (h) (i)						Industrials						L+ 5.25% (8.92%), 7/31/2024						30,683						30,519						30,684						1.8		%
Ideal Tridon Holdings, Inc. (c)						Industrials						L+ 5.25% (9.60%), 7/31/2023						1,566						1,566						1,566						0.1		%
IG Investments Holdings, LLC (c) (h)						Business Services						L+ 6.00% (10.38%), 9/22/2028						17,629						17,341						17,469						1.0		%
IG Investments Holdings, LLC (c) (h)						Business Services						L+ 6.00% (10.38%), 9/22/2028						318						315						315						0.0		%
IG Investments Holdings, LLC (c)						Business Services						L+ 6.00% (10.39%), 9/22/2027						556						556						551						0.0		%
Indigo Buyer, Inc. (c)						Paper & Packaging						S+ 5.75% (10.17%), 5/23/2028						605						605						594						0.0		%
Indigo Buyer, Inc. (c)						Paper & Packaging						S+ 5.75% (10.17%), 5/23/2028						21,226						20,845						20,844						1.3		%
Integrated Efficiency Solutions, Inc. (c) (o)						Industrials						7.50%, 12/31/2025						1,421						1,421						1,421						0.1		%
Integrated Global Services, Inc. (c) (i)						Industrials						L+ 6.00% (10.51%), 2/4/2026						11,269						11,153						11,269						0.7		%
Internap Corp. (c) (h) (o)						Business Services						L+ 6.50% (11.09%) 5.50% PIK, 5/8/2025						5,192						5,191						4,802						0.3		%
International Cruise & Excursions, Inc. (c) (i)						Business Services						S+ 5.35% (9.44%), 6/6/2025						4,850						4,831						4,413						0.3		%
IQN Holding Corp. (c) (i)						Software/Services						P+ 4.50% (12.00%), 5/2/2029						11,023						10,924						10,925						0.7		%
IQN Holding Corp. (c)						Software/Services						S+ 5.50% (9.68%), 5/2/2029						191						191						190						0.0		%
K2 Intelligence Holdings, Inc. (c) (h) (i)						Business Services						L+ 5.75% (10.48%), 9/23/2024						7,047						6,999						6,378						0.4		%
KidKraft, Inc. (c)						Consumer						L+ 6.00% (10.72%), 6/30/2023						1,060						1,060						994						0.1		%
Kissner Milling Co., Ltd.						Industrials						4.88%, 5/1/2028						2,983						2,983						2,562						0.2		%
Knowledge Pro Buyer, Inc. (c) (i)						Business Services						L+ 5.75% (10.04%), 12/10/2027						24,552						24,148						24,122						1.4		%
Knowledge Pro Buyer, Inc. (c)						Business Services						L+ 5.75% (10.04%), 12/10/2027						2,322						2,322						2,282						0.1		%
Labrie Environmental Group, LLC (a) (c)						Industrials						L+ 5.50% (9.57%), 9/1/2026						22,352						22,078						21,457						1.3		%
Lakeland Tours, LLC (c) (h) (i)						Education						L+ 6.00% (10.42%), 9/25/2025						4,523						4,258						4,071						0.2		%
Lakeland Tours, LLC (c) (h) (i)						Education						13.25% PIK, 9/25/2027						5,353						3,958						4,015						0.2		%
Lakeview Health Holdings, Inc. (c) (o)						Healthcare						P+ 6.00% (13.00%) PIK, 10/15/2024						579						579						579						0.0		%
Lakeview Health Holdings, Inc. (c) (o) (t)						Healthcare						P+ 4.50% (12.00%) PIK, 10/15/2024						1,728						664						546						0.0		%
Lakeview Health Holdings, Inc. (c) (o)						Healthcare						P+ 6.00% (13.00%) PIK, 10/15/2024						227						227						227						0.0		%
LightSquared, LP						Telecom						15.50% PIK, 11/1/2023						2,096						2,082						677						0.0		%
Manna Pro Products, LLC (c)						Consumer						L+ 6.00% (10.07%), 12/10/2026						4,002						4,002						3,842						0.2		%
Manna Pro Products, LLC (c) (i)						Consumer						L+ 6.00% (10.07%), 12/10/2026						32,915						32,381						31,598						1.9		%
Manna Pro Products, LLC (c)						Consumer						L+ 6.00% (10.07%), 12/10/2026						1,962						1,962						1,883						0.1		%
McDonald Worley, P.C. (c)						Business Services						26.00% PIK, 12/31/2024						15,077						15,077						11,488						0.7		%
MCS Acquisition Corp. (c) (p)						Business Services						L+ 6.00% (9.74%), 10/2/2025						772						772						772						0.0		%

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

20

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

December 31, 2022
Portfolio Company (f) (q) (v)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
Medical Depot Holdings, Inc. (c) (h) (i)						Healthcare						S+ 9.50% (13.14%) 4.00% PIK, 6/1/2025						$	20,545					$	20,252					$	18,899					1.1		%
Medical Depot Holdings, Inc. (c)						Healthcare						S+ 10.00% (14.58%) 9.00% PIK, 6/1/2025						3,574						3,512						3,510						0.2		%
Medical Management Resource Group, LLC (c)						Healthcare						L+ 5.75% (9.83%), 9/30/2027						6,598						6,598						6,509						0.4		%
Medical Management Resource Group, LLC (c) (h)						Healthcare						L+ 5.75% (10.17%), 9/30/2027						15,977						15,724						15,761						1.0		%
MGTF Radio Company, LLC (c) (o)						Media/Entertainment						L+ 6.00% (10.73%), 4/1/2024						47,271						47,237						40,015						2.4		%
Midwest Can Company, LLC (c) (h) (i)						Paper & Packaging						L+ 6.00% (10.73%), 3/2/2026						32,056						31,688						32,056						1.9		%
Miller Environmental Group, Inc. (c) (h) (i)						Business Services						L+ 6.50% (10.19%), 3/15/2024						11,229						11,176						11,229						0.7		%
Miller Environmental Group, Inc. (c) (h) (i)						Business Services						L+ 6.50% (11.25%), 3/15/2024						10,271						10,213						10,271						0.6		%
Mirra-Primeaccess Holdings, LLC (c)						Healthcare						L+ 6.50% (10.88%), 7/29/2026						48,827						48,129						48,827						2.9		%
Mirra-Primeaccess Holdings, LLC (c)						Healthcare						L+ 6.50% (10.57%), 7/29/2026						2,935						2,935						2,935						0.2		%
Monumental RSN, LLC (c)						Media/Entertainment						S+ 6.00% (10.32%), 9/20/2027						7,313						7,243						7,386						0.5		%
Muth Mirror Systems, LLC (c) (h) (i)						Technology						L+ 6.75% (10.07%), 4/23/2025						14,821						14,707						13,613						0.8		%
Muth Mirror Systems, LLC (c)						Technology						L+ 6.75% (11.48%), 4/23/2025						650						650						597						0.0		%
New Star Metals, Inc. (c) (h) (i)						Industrials						L+ 5.00% (9.73%), 1/9/2026						32,454						32,113						32,454						1.9		%
NTM Acquisition Corp. (c) (h) (i)						Media/Entertainment						L+ 7.25% (11.98%) 1.00% PIK, 6/7/2024						20,547						20,547						19,992						1.2		%
Odessa Technologies, Inc. (c) (h)						Software/Services						L+ 5.75% (10.09%), 10/19/2027						14,343						14,113						14,089						0.8		%
ORG GC Holdings, LLC (c) (o)						Business Services						L+ 6.50% (11.23%) PIK, 11/29/2026						9,082						9,082						9,082						0.5		%
Pie Buyer, Inc. (c) (i)						Food & Beverage						S+ 5.50% (8.69%), 4/5/2027						2,077						2,042						2,077						0.1		%
Pie Buyer, Inc. (c) (i)						Food & Beverage						L+ 5.50% (8.38%), 4/5/2027						28,034						27,437						28,034						1.7		%
Pie Buyer, Inc. (c)						Food & Beverage						L+ 5.50% (9.67%), 4/5/2027						6,068						6,068						6,068						0.4		%
Pie Buyer, Inc. (c)						Food & Beverage						L+ 5.50% (10.67%), 4/6/2026						460						460						460						0.0		%
PlayPower, Inc. (c) (h) (i)						Industrials						L+ 5.50% (9.17%), 5/8/2026						23,695						23,525						20,520						1.2		%
Pluralsight, LLC (c) (h)						Software/Services						L+ 8.00% (11.83%), 4/6/2027						18,826						18,559						18,513						1.1		%
Pluralsight, LLC (c) (h)						Software/Services						L+ 8.00% (12.75%), 4/6/2027						6,728						6,628						6,616						0.4		%
Pluralsight, LLC (c)						Software/Services						L+ 8.00% (12.75%), 4/6/2027						801						801						788						0.0		%
Point Broadband Acquisition, LLC (c) (h)						Telecom						L+ 6.00% (9.75%), 10/2/2028						19,147						18,753						18,754						1.1		%
Point Broadband Acquisition, LLC (c)						Telecom						L+ 6.00% (10.56%), 10/2/2028						3,810						3,810						3,731						0.2		%
Premier Global Services, Inc. (c) (t)						Telecom						P+ 5.50% (13.00%), 6/8/2023						5,024						4,908						—						—		%
Premier Global Services, Inc. (c) (t)						Telecom						P+ 5.50% (13.00%), 1/31/2023						969						969						145						0.0		%
PSKW, LLC (c) (h) (i)						Healthcare						L+ 6.25% (10.64%), 3/9/2026						29,175						28,788						29,175						1.8		%
Questex, Inc. (c) (h) (i)						Media/Entertainment						L+ 4.25% (8.98%), 9/9/2024						15,503						15,416						15,044						0.9		%
Reddy Ice Corp. (c)						Food & Beverage						L+ 6.50% (10.24%), 7/1/2025						1,785						1,776						1,751						0.1		%
Reddy Ice Corp. (c)						Food & Beverage						L+ 6.50% (10.24%), 7/1/2025						1,461						1,461						1,433						0.1		%
Reddy Ice Corp. (c)						Food & Beverage						L+ 6.50% (10.24%), 7/1/2025						4,814						4,814						4,720						0.3		%
Reddy Ice Corp. (c) (h) (i)						Food & Beverage						L+ 6.50% (10.24%), 7/1/2025						18,951						18,714						18,581						1.1		%
Relativity Oda, LLC (c) (i)						Software/Services						L+ 7.50% (11.89%) PIK, 5/12/2027						5,309						5,225						5,137						0.3		%
REP TEC Intermediate Holdings, Inc. (c) (h) (i)						Software/Services						L+ 6.50% (11.23%), 6/19/2025						28,492						28,147						28,147						1.7		%
REP TEC Intermediate Holdings, Inc. (c)						Software/Services						L+ 6.50% (11.23%), 6/19/2025						519						519						513						0.0		%
Roadsafe Holdings, Inc. (c)						Industrials						P+ 4.75% (12.25%), 10/19/2027						6,797						6,797						6,686						0.4		%
Roadsafe Holdings, Inc. (c) (i)						Industrials						L+ 5.75% (10.87%), 10/19/2027						7,753						7,639						7,627						0.5		%
RSC Acquisition, Inc. (c) (i)						Financials						S+ 5.50% (10.23%), 10/30/2026						15,193						15,178						15,194						0.9		%
RSC Acquisition, Inc. (c)						Financials						S+ 5.50% (10.23%), 10/30/2026						1,484						1,484						1,484						0.1		%

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

21

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

December 31, 2022
Portfolio Company (f) (q) (v)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
Saturn SHC Buyer Holdings, Inc. (c) (h)						Healthcare						L+ 6.00% (10.77%), 11/18/2027						$	32,991					$	32,454					$	32,991					2.0		%
SCIH Salt Holdings, Inc. (c)						Industrials						L+ 4.00% (7.74%), 3/17/2025						1,123						1,123						1,025						0.1		%
Sherlock Buyer Corp. (c) (i)						Business Services						L+ 5.75% (10.48%), 12/8/2028						11,041						10,852						10,848						0.7		%
Simplifi Holdings, Inc. (c) (h)						Media/Entertainment						L+ 5.50% (9.25%), 10/1/2027						35,105						34,550						34,519						2.1		%
Skillsoft Corp. (h)						Technology						S+ 5.25% (9.58%), 7/14/2028						1,374						1,357						1,140						0.1		%
St. Croix Hospice Acquisition Corp. (c)						Healthcare						L+ 6.00% (10.70%), 10/30/2026						2,809						2,809						2,809						0.2		%
St. Croix Hospice Acquisition Corp. (c) (i)						Healthcare						L+ 6.00% (10.42%), 10/30/2026						25,420						25,096						25,420						1.5		%
STRIPER BUYER, LLC (c) (h)						Paper & Packaging						L+ 5.50% (9.57%), 12/30/2026						12,268						12,184						12,268						0.7		%
Subsea Global Solutions, LLC (c) (i)						Business Services						L+ 6.75% (11.50%), 12/31/2023						4,649						4,643						4,649						0.3		%
Subsea Global Solutions, LLC (c) (i)						Business Services						L+ 6.75% (11.50%), 3/29/2023						7,061						7,054						7,061						0.4		%
Subsea Global Solutions, LLC (c)						Business Services						L+ 6.75% (10.50%), 12/31/2023						905						905						905						0.1		%
SunMed Group Holdings, LLC (c) (h)						Healthcare						L+ 5.75% (10.48%), 6/16/2028						8,964						8,841						8,830						0.5		%
SunMed Group Holdings, LLC (c)						Healthcare						L+ 5.75% (10.49%), 6/16/2027						288						288						285						0.0		%
Tax Defense Network, LLC (c) (p) (t)						Consumer						L+ 6.00% (10.00%) PIK, 3/31/2023						7,296						3,833						186						0.0		%
Tax Defense Network, LLC (c) (p) (t)						Consumer						10.00% PIK, 3/31/2023						4,264						2,986						4,264						0.3		%
Tax Defense Network, LLC (c) (p) (t)						Consumer						L+ 6.00% (10.00%) PIK, 3/31/2023						41,102						21,646						1,048						0.1		%
The NPD Group, LP (c)						Business Services						S+ 5.75% (10.07%) 2.75% PIK, 12/1/2028						34,210						33,577						33,571						2.0		%
The NPD Group, LP (c)						Business Services						S+ 5.75% (10.07%) 2.75% PIK, 12/1/2027						231						231						226						0.0		%
Therapy Brands Holdings, LLC (c) (h)						Healthcare						L+ 4.00% (8.35%), 5/18/2028						4,327						4,314						4,327						0.3		%
Trinity Air Consultants Holdings Corp. (c)						Business Services						L+ 5.25% (10.40%), 6/29/2027						3,836						3,836						3,778						0.2		%
Trinity Air Consultants Holdings Corp. (c) (h)						Business Services						L+ 5.25% (10.18%), 6/29/2027						20,424						20,118						20,118						1.2		%
Triple Lift, Inc. (c)						Software/Services						S+ 5.25% (9.58%), 5/5/2028						1,265						1,265						1,243						0.1		%
Triple Lift, Inc. (c) (i)						Software/Services						S+ 5.50% (10.45%), 5/5/2028						28,262						27,819						27,782						1.7		%
University of St. Augustine Acquisition Corp. (c) (h) (i)						Education						L+ 4.25% (8.33%), 2/2/2026						23,278						23,021						23,278						1.4		%
Urban One, Inc.						Media/Entertainment						7.38%, 2/1/2028						1,561						1,561						1,319						0.1		%
US Oral Surgery Management Holdco, LLC (c)						Healthcare						L+ 5.50% (10.72%), 11/18/2027						3,525						3,525						3,490						0.2		%
US Oral Surgery Management Holdco, LLC (c) (h)						Healthcare						L+ 6.00% (10.68%), 11/18/2027						12,173						11,975						12,051						0.7		%
US Salt Investors, LLC (c)						Chemicals						L+ 5.50% (9.17%), 7/19/2028						19,932						19,616						19,559						1.2		%
Vantage Mobility International, LLC (c) (p) (t)						Transportation						L+ 6.00% (10.13%) PIK, 3/21/2024						1,991						251						—						—		%
Vantage Mobility International, LLC (c) (p) (t)						Transportation						L+ 6.00% (10.13%) PIK, 3/21/2024						256						244						—						—		%
Vensure Employer Services, Inc. (c) (i)						Business Services						S+ 4.75% (8.71%), 4/1/2027						11,882						11,819						11,882						0.7		%
Victors CCC Buyer, LLC (c)						Business Services						S+ 5.75% (10.69%), 6/1/2029						16,947						16,636						16,637						1.0		%
West Coast Dental Services, Inc. (c)						Healthcare						S+ 5.75% (9.99%), 7/1/2028						255						255						251						0.0		%
West Coast Dental Services, Inc. (c)						Healthcare						S+ 5.75% (9.99%), 7/1/2028						19,765						19,446						19,448						1.2		%
Westwood Professional Services, Inc. (c)						Business Services						L+ 6.00% (9.75%), 5/26/2026						1,007						1,007						1,007						0.1		%
Westwood Professional Services, Inc. (c) (i)						Business Services						L+ 6.00% (9.75%), 5/26/2026						8,561						8,444						8,561						0.5		%
WHCG Purchaser III, Inc. (c) (h)						Healthcare						L+ 5.75% (9.42%), 6/22/2028						29,124						28,669						25,940						1.6		%
WHCG Purchaser III, Inc. (c)						Healthcare						L+ 5.75% (9.42%), 6/22/2028						7,078						7,078						6,304						0.4		%
WHCG Purchaser III, Inc. (c)						Healthcare						L+ 5.75% (10.48%), 6/22/2026						1,426						1,426						1,305						0.1		%
WIN Holdings III Corp. (c) (h)						Consumer						L+ 5.25% (10.40%), 7/16/2028						31,310						30,814						30,815						1.9		%
WMK, LLC (c) (i)						Business Services						S+ 5.75% (9.45%), 9/5/2025						2,532						2,526						2,532						0.2		%

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

22

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FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

December 31, 2022
Portfolio Company (f) (q) (v)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
WMK, LLC (c)						Business Services						S+ 5.75% (10.48%), 9/5/2025						$	349					$	347					$	349					0.0		%
WMK, LLC (c) (h) (i)						Business Services						S+ 5.75% (9.73%), 9/5/2025						17,975						17,838						17,975						1.1		%
WMK, LLC (c)						Business Services						L+ 5.75% (9.99%), 9/5/2024						2,618						2,618						2,618						0.2		%
WMK, LLC (c)						Business Services						S+ 5.75% (10.15%), 9/5/2025						11,118						11,118						11,118						0.7		%
WMK, LLC (c) (i)						Business Services						S+ 5.75% (10.17%), 9/5/2025						3,697						3,627						3,697						0.2		%
WMK, LLC (c)						Business Services						S+ 5.75% (10.30%), 9/5/2025						8,000						7,690						8,000						0.5		%
Zendesk, Inc. (c)						Software/Services						S+ 6.50% (11.04%) 3.50% PIK, 11/22/2028						42,801						41,961						41,962						2.5		%
Subtotal Senior Secured First Lien Debt																								$	2,048,997					$	1,995,273					119.8		%
Senior Secured Second Lien Debt - 12.2% (b)
Accentcare, Inc. (c) (h)						Healthcare						L+ 8.75% (13.49%), 6/21/2027						$	30,152					$	29,691					$	25,026					1.5		%
Anchor Glass Container Corp. (c) (t)						Paper & Packaging						L+ 7.75% (11.53%), 12/7/2024						6,667						6,150						2,003						0.1		%
Aruba Investments Holdings, LLC (i)						Chemicals						L+ 7.75% (12.14%), 11/24/2028						3,759						3,717						3,401						0.2		%
Astro AB Merger Sub, Inc. (a) (c) (h)						Financials						L+ 8.00% (12.42%), 4/30/2025						8,162						8,145						7,560						0.5		%
Carlisle FoodService Products, Inc. (c)						Consumer						L+ 7.75% (11.32%), 3/20/2026						10,719						10,633						10,166						0.6		%
CommerceHub, Inc. (c)						Technology						S+ 7.00% (11.53%), 12/29/2028						12,360						12,314						10,506						0.6		%
Corelogic, Inc. (c)						Business Services						L+ 6.50% (10.94%), 6/4/2029						10,808						10,721						9,252						0.6		%
HAH Group Holding Company, LLC (c) (h)						Healthcare						L+ 8.50% (12.89%), 10/30/2028						12,445						12,218						12,445						0.7		%
Integrated Efficiency Solutions, Inc. (c) (o)						Industrials						10.00% PIK, 12/31/2026						1,586						1,062						760						0.0		%
Mercury Merger Sub, Inc. (c)						Business Services						L+ 6.50% (10.25%), 8/2/2029						13,965						13,869						13,518						0.8		%
ORG GC Holdings, LLC (c) (o)						Business Services						18.00% PIK, 11/29/2027						4,109						4,109						3,868						0.2		%
PetVet Care Centers, LLC (c) (h)						Healthcare						L+ 6.25% (10.63%), 2/13/2026						3,539						3,532						3,464						0.2		%
Project Boost Purchaser, LLC (c)						Business Services						L+ 8.00% (12.38%), 5/31/2027						1,848						1,848						1,848						0.1		%
Proofpoint, Inc. (h)						Software/Services						L+ 6.25% (10.99%), 8/31/2029						7,842						7,809						7,502						0.5		%
QuickBase, Inc. (c)						Technology						L+ 8.00% (12.38%), 4/2/2027						7,484						7,404						7,484						0.4		%
RealPage, Inc. (i)						Software/Services						L+ 6.50% (10.88%), 4/23/2029						13,647						13,485						13,067						0.8		%
Recess Holdings, Inc. (c) (h)						Industrials						L+ 7.75% (12.17%), 9/29/2025						16,134						16,038						16,134						1.0		%
SSH Group Holdings, Inc. (c)						Education						L+ 8.25% (12.98%), 7/30/2026						10,122						10,077						10,122						0.6		%
Therapy Brands Holdings, LLC (c) (h)						Healthcare						L+ 6.75% (11.10%), 5/18/2029						4,654						4,628						4,654						0.3		%
Travelpro Products, Inc. (a) (c)						Consumer						13.00%, 2.00% PIK, 11/20/2024						2,983						2,983						2,983						0.2		%
Travelpro Products, Inc. (a) (c) (m)						Consumer						13.00%, 2.00% PIK, 11/20/2024						CAD	3,445					2,671						2,542						0.2		%
USIC Holdings, Inc. (c) (h)						Business Services						L+ 6.50% (10.57%), 5/14/2029						5,798						5,751						5,589						0.3		%
Vantage Mobility International, LLC (c) (p) (t)						Transportation						L+ 6.00% (10.13%) PIK, 3/21/2024						1,212						17						—						—		%
Vantage Mobility International, LLC (c) (p) (t)						Transportation						L+ 6.00% (10.13%) PIK, 3/21/2024						3,936						2,914						—						—		%
Victory Buyer, LLC (c)						Industrials						L+ 7.00% (11.35%), 11/19/2029						31,686						31,407						29,405						1.8		%
Subtotal Senior Secured Second Lien Debt																								$	223,193					$	203,299					12.2		%
Subordinated Debt - 8.1% (b)
Del Real, LLC (c)						Food & Beverage						16.00%, 12.00% PIK, 4/7/2023						$	4,848					$	4,679					$	4,772					0.3		%
Post Road Equipment Finance, LLC (c) (o)						Financials						L+ 7.75% (11.94%), 12/31/2028						15,086						15,086						15,086						0.9		%
Post Road Equipment Finance, LLC (c) (o)						Financials						L+ 7.75% (11.94%), 12/31/2028						38,100						37,982						38,100						2.3		%
Siena Capital Finance, LLC (c) (j) (o)						Financials						12.50%, 11/26/2026						77,000						76,995						77,000						4.6		%
Subtotal Subordinated Debt																								$	134,742					$	134,958					8.1		%
Collateralized Securities - 1.8% (b)
Collateralized Securities - Debt Investments
NewStar Arlington Senior Loan Program, LLC 14-1A FR (a) (c) (p)						Diversified Investment Vehicles						L+ 11.00% (15.36%), 4/25/2031						$	4,750					$	4,603					$	4,165					0.3		%

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

23

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

December 31, 2022
Portfolio Company (f) (q) (v)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
Newstar Fairfield Fund CLO, Ltd. 2015-1RA F (a) (c) (p)						Diversified Investment Vehicles						L+ 7.50% (11.74%), 1/20/2027						$	10,728					$	10,264					$	8,849					0.5		%
Whitehorse, Ltd. 2014-1A E (a) (c) (p)						Diversified Investment Vehicles						L+ 4.55% (8.99%) PIK, 5/1/2026						8,132						8,076						6,996						0.4		%
Collateralized Securities - Equity Investments (n)
NewStar Arlington Senior Loan Program, LLC 14-1A SUB (a) (c) (k) (p)						Diversified Investment Vehicles						19.92%, 4/25/2031						$	31,603					$	11,714					$	10,278					0.6		%
Newstar Fairfield Fund CLO, Ltd. 2015-1RA SUB (a) (c) (k) (p)						Diversified Investment Vehicles						0.00%, 1/20/2027						31,575						6,285						—						—		%
OFSI Fund, Ltd. 2014-6A Side Letter (a) (c)						Diversified Investment Vehicles						0.00%, 3/20/2025						1,970						47						—						—		%
Whitehorse, Ltd. 2014-1A Side Letter (a) (c) (p)						Diversified Investment Vehicles						0.00%, 5/1/2026						1,886						134						—						—		%
Whitehorse, Ltd. 2014-1A SUB (a) (c) (k) (p)						Diversified Investment Vehicles						0.00%, 5/1/2026						36,000						6,965						—						—		%
Subtotal Collateralized Securities																								$	48,088					$	30,288					1.8		%
Equity/Other - 30.7% (b) (d)
Aden & Anais Holdings, Inc. (c) (e) (w)						Retail												4,470						$	—					$	—					—		%
Baker Hill Acquisition, LLC (c) (e)						Financials												22,653						—						—						—		%
Black Mountain Sand, LLC (c) (e) (u)						Energy												55,463						—						1,659						0.1		%
CDS U.S. Intermediate Holdings, Inc. (a) (e) (p)						Media/Entertainment												539,708						1,224						4,721						0.3		%
CDS U.S. Intermediate Holdings, Inc. (a) (e) (p)						Media/Entertainment												874,000						437						1,311						0.1		%
Clover Technologies Group, LLC (c) (e)						Industrials												180,274						1,153						52						0.0		%
Clover Technologies Group, LLC (c) (e)						Industrials												2,753						275						1,122						0.1		%
CRS-SPV, Inc. (c) (e) (o)						Industrials												246						2,218						1,559						0.1		%
Danish CRJ, Ltd. (a) (c) (e) (o) (r)						Transportation												5,002						—						—						—		%
Del Real, LLC (c) (e) (u)						Food & Beverage												670,510						382						143						0.0		%
Dyno Acquiror, Inc. (c) (e)						Consumer												134,102						58						21						0.0		%
FBLC Senior Loan Fund, LLC (a) (c) (j) (o)						Diversified Investment Vehicles												304,934						304,934						304,934						18.3		%
First Eagle Greenway Fund II, LLC (a) (e) (p)						Diversified Investment Vehicles												5,329						3,977						360						0.0		%
Foresight Energy Operating, LLC (c) (e) (p) (u)						Energy												158,093						2,087						3,519						0.2		%
HemaSource, Inc. (c) (e) (w)						Healthcare												223,503						168						369						0.0		%
Integrated Efficiency Solutions, Inc. (c) (e) (o) (u)						Industrials												55,991						—						—						—		%
Integrated Efficiency Solutions, Inc. (c) (e) (o) (u)						Industrials												57,427						—						—						—		%
Internap Corp (c) (e) (o)						Business Services												1,293,189						543						595						0.0		%
Jakks Pacific, Inc. (c)						Consumer												5,303						223						788						0.0		%
Kahala Ireland OpCo Designated Activity Company (a) (c) (o) (y)						Transportation												1						—						5,027						0.3		%
Kahala Ireland OpCo Designated Activity Company (a) (c) (e) (o) (y)						Transportation												3,250,000						—						3,250						0.2		%
Kahala US OpCo, LLC (a) (c) (e) (o) (x)						Transportation												4,413,472						—						—						—		%
KidKraft, Inc. (c) (e) (u)						Consumer												2,682,257						—						1,770						0.1		%
Lakeview Health Holdings, Inc. (c) (e) (o)						Healthcare												5,272						—						—						—		%
McDonald Worley, P.C. (c) (e)						Business Services												20,167						20						2,799						0.2		%
MCS Acquisition Corp. (c) (e) (p)						Business Services												31,521						4,103						747						0.0		%

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

24

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

December 31, 2022
Portfolio Company (f) (q) (v)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
MCS Acquisition Corp. (c) (e) (p)						Business Services												356,537						$	357					$	357					0.0		%
MGTF Holdco, LLC (c) (e) (o) (u)						Media/Entertainment												402,000						—						—						—		%
Motor Vehicle Software Corp. (c) (e) (w)						Business Services												223,503						318						262						0.0		%
ORG GC Holdings, LLC (c) (e) (o)						Business Services												93,380						212						—						—		%
ORG GC Holdings, LLC (c) (e) (o)						Business Services												1,771						—						—						—		%
PennantPark Credit Opportunities Fund II, LP (a) (e) (p)						Diversified Investment Vehicles												8,739						826						1,162						0.1		%
Point Broadband Acquisition, LLC (c) (e) (u)						Telecom												2,550,487						2,550						3,009						0.2		%
Post Road Equipment Finance, LLC (c) (o) (u)						Financials												79,479						81,787						81,692						4.9		%
RMP Group, Inc. (c) (e) (u)						Financials												223						164						369						0.0		%
Siena Capital Finance, LLC (c) (j) (o)						Financials												41,789,400						42,499						77,310						4.7		%
Skillsoft Corp. (e) (s)						Technology												248,712						2,636						323						0.0		%
Smile Brands, Inc. (c) (e)						Healthcare												712						—						874						0.1		%
Squan Holding Corp. (c) (e)						Telecom												180,835						—						—						—		%
Tap Rock Resources, LLC (c) (g) (p) (u)						Energy												18,356,442						—						596						0.0		%
Tax Defense Network, LLC (c) (e) (p)						Consumer												147,099						425						—						—		%
Tax Defense Network, LLC (c) (e) (p)						Consumer												633,382						—						—						—		%
Tennenbaum Waterman Fund, LP (a) (p)						Diversified Investment Vehicles												10,000						10,000						8,699						0.6		%
Travelpro Products, Inc. (a) (c) (e)						Consumer												447,007						506						313						0.0		%
United Biologics, LLC (c) (e) (u)						Healthcare												39,769						132						—						—		%
United Biologics, LLC (c) (e) (u)						Healthcare												3,155						—						—						—		%
United Biologics, LLC (c) (e) (u)						Healthcare												4,206						31						—						—		%
United Biologics, LLC (c) (e) (u)						Healthcare												99,236						—						—						—		%
United Biologics, LLC (c) (e) (u)						Healthcare												223						35						—						—		%
USASF Holdco, LLC (c) (e) (u)						Financials												10,000						10						—						—		%
USASF Holdco, LLC (c) (e) (u)						Financials												490						490						—						—		%
USASF Holdco, LLC (c) (e) (u)						Financials												139						139						—						—		%
Vantage Mobility International, LLC (c) (e) (p)						Transportation												512,923						—						—						—		%
Vantage Mobility International, LLC (c) (e) (p)						Transportation												4,639,261						3,140						—						—		%
Vantage Mobility International, LLC (c) (e) (p)						Transportation												1,940,977						—						—						—		%
World Business Lenders, LLC (c) (e)						Financials												922,669						3,750						1,614						0.1		%
WPNT, LLC (c) (e) (o) (u)						Media/Entertainment												402,000						—						—						—		%
Wythe Will Tzetzo, LLC (c) (e) (u)						Food & Beverage												22,312						302						—						—		%
YummyEarth, Inc. (c) (e)						Food & Beverage												223						—						—						—		%
Subtotal Equity/Other																								$	472,111					$	511,326					30.7		%
TOTAL INVESTMENTS - 172.6% (b)																								$	2,927,131					$	2,875,144					172.6		%

_____________

(a)All of the Company's investments, except the investments noted by this footnote, are qualifying assets under Section 55(a) of 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 85.2% 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 as of December 31, 2022.

(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).

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

25

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FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

(d)All amounts are in thousands except share amounts.

(e)Non-income producing at December 31, 2022.

(f)The Company has various unfunded commitments to portfolio companies. Please refer to Note 7 - Commitments and Contingencies for details of these unfunded commitments.

(g)The commitment related to this investment is discretionary.

(h)The Company's investment or a portion thereof is pledged as collateral under the JPM Credit Facility. Individual investments can be divided into parts which are pledged to separate credit facilities.

(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 falls under the definition of a significant subsidiary, as it exceeded the threshold of at least one of the tests under Rule 3-09. See Note 18 in the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and the relevant portfolio companies' audited financial statements filed as an exhibit thereto for additional disclosure.

(k)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.

(l)The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate ("LIBOR" or "L"), Secured Overnight Financing Rate ("SOFR" or "S"), or Prime ("P") and which reset daily, monthly, quarterly, or semiannually. For each, the Company has provided the spread over the relevant reference rate and the current interest rate in effect at December 31, 2022. Certain investments are subject to reference rate floors. For fixed rate loans, a spread above a reference rate is not applicable. For floating rate securities the all-in rate is disclosed within parentheses.

(m)The principal amount (par amount) is denominated in Canadian Dollars ("CAD").

(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 (k) 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/or does not have the power to exercise control over the management or policies of such portfolio company. A company is generally presumed to be "controlled" when the Company owns more than 25% of the portfolio company's voting securities and/or has the power to exercise control over the management or policies of such portfolio company. The Company classifies this investment as "controlled".

(p)The provisions of the 1940 Act classify investments further based on the level of ownership that the Company maintains in a particular portfolio company. As defined in the 1940 Act, a company is generally deemed as "non-affiliated" when the Company owns less than 5% of a portfolio company's voting securities and "affiliated" when the Company owns 5% or more of a portfolio company's voting securities. The Company classifies this investment as "affiliated".

(q)Unless otherwise indicated, all investments in the Consolidated Schedules of Investments are non-affiliated, non-controlled investments.

(r)The Company's investment is held through the Consolidated Holding Company, Kahala Aviation Holdings, LLC, which owns 49% of the operating company, Danish CRJ LTD.

(s)The investment is not a restricted security. All other securities are restricted securities.

(t)The investment is on non-accrual status as of December 31, 2022.

(u)Investments are held in the taxable wholly-owned, consolidated subsidiary, 54th Street Equity Holdings, Inc.

(v)Unless otherwise indicated, all of the Company's investments or a portion thereof are pledged as collateral under the JPM Revolver Facility.

(w)The investment is held through BSP TCAP Acquisition Holdings LP, which is an affiliated acquisition entity. 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, 2022.

(x)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.

(y)The Company's investment is held through the consolidated subsidiary, Kahala Aviation Holdings, LLC, which owns 100% of the equity of the operating company, Kahala Ireland OpCo Designated Activity Company.

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

26

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FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

December 31, 2022

The following table shows the portfolio composition by industry grouping based on fair value at December 31, 2022:

			At December 31, 2022
			Investments at Fair Value						Percentage of Total Portfolio
Business Services			$	441,450					15.5		%
Healthcare			412,315						14.3		%
Financials			389,041						13.5		%
Diversified Investment Vehicles (1)			345,443						12.0		%
Software/Services			288,652						10.0		%
Industrials			260,455						9.1		%
Media/Entertainment			183,907						6.4		%
Paper & Packaging			129,932						4.5		%
Consumer			115,259						4.0		%
Food & Beverage			75,047						2.6		%
Utilities			53,709						1.9		%
Education			41,486						1.4		%
Chemicals			34,879						1.2		%
Technology			33,663						1.2		%
Transportation			28,407						1.0		%
Telecom			26,316						0.9		%
Energy			15,183						0.5		%
Total			$	2,875,144					100.0		%

_____________

(1) Includes FBLC's investment in FBLC Senior Loan Fund, LLC, which represents 10.6% of the fair value of investments as of December 31, 2022.

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

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

Note 1 — Organization and Basis of Presentation

Franklin BSP Lending Corporation (the “Company” or "FBLC") 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 Franklin BSP Lending Adviser, L.L.C. (the “Adviser”), a subsidiary of Benefit Street Partners L.L.C. (“BSP”) and supervised by the Company’s Board of Directors ("Board" or "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 EBITDA of between $25 million and $100 million annually. 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 February 1, 2019, Franklin Resources, Inc. (“FRI”) and Templeton International, Inc. (collectively with FRI, “Franklin Templeton”) acquired BSP, including BSP’s 100% ownership interest in the Adviser (the “FT Transaction”).

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, 2023, the Company had issued 268.5 million shares of common stock for gross proceeds of $2.6 billion including the shares purchased by affiliates and shares issued under the Company's distribution reinvestment plan (“DRIP”). As of March 31, 2023, the Company had repurchased a cumulative 37.4 million shares of common stock through its share repurchase program for payments of $308.4 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.

28

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

Although the Small Business Credit Availability Act of 2018 (the “SBCAA”) 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 for 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").

We have also formed and expect to continue to form consolidated subsidiaries (the “Consolidated Holding Companies”). The Company consolidates the following subsidiaries for accounting purposes: FBLC Funding I, LLC (“Funding I”), FBLC 57th Street Funding, LLC ("57th Street") and 54th Street Equity Holdings, Inc. The Company owns 100% of the equity of Kahala Aviation Holdings, LLC and Kahala Aviation US, Inc., which are consolidated for accounting purposes. All significant intercompany balances and transactions have been eliminated in consolidation. Prior to February 18, 2022, the Company also consolidated BDCA Asset Financing, LLC ("BDCA Asset Financing"); and prior to January 20, 2021, the Company consolidated BDCA-CB Funding, LLC (“CB Funding”). Refer to Note 3 and Note 5 for more information.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Consolidation

As provided under ASC 946, the Company will generally not consolidate its investment in a company other than a substantially or wholly-owned investment company or controlled operating company whose business consists of providing services to the Company. Accordingly, the Company consolidated the accounts of the Company's substantially wholly-owned subsidiaries in its consolidated financial statements. Although the Company owns more than 25% of the voting securities of FBLC Senior Loan Fund, LLC, ("SLF"), the Company does not have sole control over significant actions of SLF for purposes of the 1940 Act or otherwise, and thus does not consolidate its interest.

Valuation of Portfolio Investments

Portfolio investments are reported on the consolidated statements of assets and liabilities at fair value. The Board of Directors has delegated to the Adviser as valuation designee (the "Valuation Designee") the responsibility of determining the fair value of the Company's investment portfolio, subject to oversight of the Board of Directors, pursuant to Rule 2a-5 under the 1940 Act. As such, the Valuation Designee is charged with determining the fair value of the Company's investment portfolio, subject to oversight of the Board of Directors. On a quarterly basis, the Valuation Designee 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 Valuation Designee 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 Valuation Designee determines whether the quote obtained is readily available according to U.S. GAAP to determine the fair value of the security. If determined to be readily available, the Valuation Designee uses the quote obtained.

29

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

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 Valuation Designee 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 Valuation Designee undertakes a multi-step valuation process each quarter, as described below:

•Each portfolio company or investment will be valued by the Valuation Designee, 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 Valuation Designee, under the supervision of the Board of Directors, determines the fair value of each investment, in good faith, based on the input of independent valuation firms (to the extent applicable) and the Valuation Designee's own analysis. The Valuation Designee also has established a Valuation Committee to assist the Valuation Designee in carrying out its designated responsibilities, subject to oversight of the Board.

For an investment in an investment fund that does not have a readily determinable fair value, the Valuation Designee 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 Valuation Designee 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.

30

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

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 and/or has the power to exercise control over the management or policies of such portfolio 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 and/or does not have the power to exercise control over the management or policies of such portfolio 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.

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, 2023 and 2022 the Company did not incur any offering costs subject to the Adviser limitation.

Deferred Financing Costs

Financing costs incurred in connection with the Company’s unsecured notes and revolving credit facilities 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.

Distributions

The Company’s Board of Directors authorizes and declares cash distributions payable on a quarterly basis to stockholders of record on each record date. 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 quarter using record and declaration dates. The distributions are payable by the fifth day following each record date. 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 14 - Income Tax Information and Distributions to Stockholders for additional information.

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

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.

Dividend Income

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

Dividend income from SLF is recorded on accrual basis once dividends are declared by SLF's board of directors. Distributions from SLF are evaluated at the time of distribution to determine if the distribution should be recorded as dividend income or a return of capital. Generally, the Company will not record distributions as dividend income unless there are sufficient accumulated tax-basis earnings and profit in SLF prior to distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment.

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 income 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 may hold debt and equity investments in its portfolio that contain payment-in-kind (“PIK”) interest and dividend provisions. PIK interest and PIK dividends, which represent contractually deferred interest or dividends that add to the investment balance that is generally due at maturity, are recorded on accrual basis to the extent such amounts are expected to be collected.

Non-accrual Income

Investments may be placed on non-accrual status when principal or interest payments are past due and/or when there is reasonable doubt that principal or interest will be collected. Accrued interest which may include un-capitalized PIK interest is generally reversed when an investment is placed on non-accrual status. Previously capitalized PIK interest is not reversed when an investment is placed on non-accrual status. Interest payments received on non-accrual investments may be recognized as income or applied to principal depending upon management's judgment of the ultimate outcome. Non-accrual investments are restored to accrual status when past due principal and interest is paid and, in management's judgment, are likely to remain current.

Net Realized Gain or Loss and Net Change in Unrealized Appreciation or Depreciation

Gain or loss on the sale of investments is calculated using the specific identification method. The Company measures realized gain or loss by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized. Net change in unrealized appreciation or depreciation will reflect the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when a gain or loss is realized.

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

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 14 - Income Tax Information and Distributions to Stockholders for additional information.

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:

•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, 2023 and December 31, 2022, 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, 2023 and December 31, 2022 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.

33

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

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 Valuation Designee 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 Valuation Designee 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 Valuation Designee 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 the contractual 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 Valuation Designee considers broker quotations and/or comparable trade activity, which are considered as inputs to determining fair value when available.

As part of the Company's quarterly valuation process, the Valuation Designee may be assisted by one or more independent valuation firms. The Valuation Designee, under the supervision of the Board of Directors, determines the fair value of each investment, in good faith, based on the input of independent valuation firm(s) (to the extent applicable) and the Valuation Designee's own analysis.

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, 2023, 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			$	—					$	18,596					$	2,017,137					$	—					$	2,035,733
Senior Secured Second Lien Debt			—						7,950						193,111						—						201,061
Subordinated Debt			—						—						121,556						—						121,556
Collateralized Securities			—						—						29,289						—						29,289
Equity/Other			497						7,789						189,662						10,046						207,994
FBLC Senior Loan Fund, LLC			—						—						304,934						—						304,934
Total			$	497					$	34,335					$	2,855,689					$	10,046					$	2,900,567

34

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

______________

(1) In accordance with ASC Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient election have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated statements of assets and liabilities.

The following table presents fair value measurements of investments, by major class, as of December 31, 2022, 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			$	—					$	18,313					$	1,976,960					$	—					$	1,995,273
Senior Secured Second Lien Debt			—						23,970						179,329						—						203,299
Subordinated Debt			—						—						134,958						—						134,958
Collateralized Securities			—						—						30,288						—						30,288
Equity/Other			323						6,032						189,816						10,221						206,392
FBLC Senior Loan Fund, LLC			—						—						304,934						—						304,934
Total			$	323					$	48,315					$	2,816,285					$	10,221					$	2,875,144

______________

(1) In accordance with ASC Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient election have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated statements of assets and liabilities.

The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the three months ended March 31, 2023:

			Senior Secured First Lien Debt						Senior Secured Second Lien Debt						Subordinated Debt						Collateralized Securities						Equity/Other (1)						Total
Balance as of December 31, 2022			$	1,976,960					$	179,329					$	134,958					$	30,288					$	494,750					$	2,816,285
Purchases and other adjustments to cost			66,537						375						1,607						143						179						68,841
Sales and repayments			(21,172)						(201)						(14,406)						(602)						121						(36,260)
Net realized gain (loss)			93						—						(499)						—						(121)						(527)
Transfers in			—						23,971						—						—						—						23,971
Transfers out			—						(9,252)						—						—						—						(9,252)
Net change in unrealized depreciation on investments			(5,281)						(1,111)						(104)						(540)						(333)						(7,369)
Balance as of March 31, 2023			$	2,017,137					$	193,111					$	121,556					$	29,289					$	494,596					$	2,855,689
Net change in unrealized depreciation for the period relating to those Level 3 assets that were still held by the Company at the end of the period:			$	(5,281)					$	(1,111)					$	(10)					$	(540)					$	(333)					$	(7,275)

_______________

(1) Includes FBLC's investment in FBLC Senior Loan Fund, LLC.

For the three months ended March 31, 2023, transfers from Level 2 to Level 3 were due to current assessments of investment liquidity and a decrease in the number of observable market inputs. For the three months ended March 31, 2023, transfers from Level 3 to Level 2 were due to an increase in the number of observable market inputs.

35

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

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

			Senior Secured First Lien Debt						Senior Secured Second Lien Debt						Subordinated Debt						Collateralized Securities						Equity/Other (1)						Total
Balance as of December 31, 2021			$	1,779,316					$	219,023					$	118,077					$	37,097					$	523,378					$	2,676,891
Purchases and other adjustments to cost			492,616						2,919						32,653						513						866						529,567
Sales and repayments			(291,141)						(19,832)						(15,537)						(3,509)						(24,574)						(354,593)
Net realized gain (loss)			1,587						(113)						—						—						3,032						4,506
Transfers in			10,243						10,882						—						—						—						21,125
Transfers out			—						(22,297)						—						—						(2,884)						(25,181)
Net change in unrealized depreciation on investments			(15,661)						(11,253)						(235)						(3,813)						(5,068)						(36,030)
Balance as of December 31, 2022			$	1,976,960					$	179,329					$	134,958					$	30,288					$	494,750					$	2,816,285
Net change in unrealized depreciation for the period relating to those Level 3 assets that were still held by the Company at the end of the period:			$	(16,421)					$	(11,176)					$	(234)					$	(3,813)					$	(8,173)					$	(39,817)

_______________

(1) Includes FBLC's investment in FBLC Senior Loan Fund, LLC.

For the year ended December 31, 2022, transfers from Level 2 to Level 3 were due to current assessments of investment liquidity and a decrease in the number of observable market inputs. For the year ended December 31, 2022, transfers from Level 3 to Level 2 were due to an increase in the number of observable market inputs.

The composition of the Company’s investments as of March 31, 2023, 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			$	2,091,184					$	2,035,733					70.2		%
Senior Secured Second Lien Debt			223,375						201,061						6.9
Subordinated Debt			121,445						121,556						4.2
Collateralized Securities			47,627						29,289						1.0
Equity/Other			167,280						207,994						7.2
FBLC Senior Loan Fund, LLC			304,934						304,934						10.5
Total			$	2,955,845					$	2,900,567					100.0		%

36

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

The composition of the Company’s investments as of December 31, 2022, 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			$	2,048,997					$	1,995,273					69.4		%
Senior Secured Second Lien Debt			223,193						203,299						7.1
Subordinated Debt			134,742						134,958						4.7
Collateralized Securities			48,088						30,288						1.1
Equity/Other			167,177						206,392						7.1
FBLC Senior Loan Fund, LLC			304,934						304,934						10.6
Total			$	2,927,131					$	2,875,144					100.0		%

37

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(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, 2023. 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

$

1,956,753

Yield Analysis

Market Yield

8.62%

51.58%

11.24%

Senior Secured First Lien Debt (c)

32,615

N/A

N/A

N/A

N/A

N/A

Senior Secured First Lien Debt

19,106

Waterfall Analysis

EBITDA Multiple

5.16x

9.00x

8.99x

Senior Secured First Lien Debt

8,663

Waterfall Analysis

Revenue Multiple

0.17x

0.79x

0.35x

Senior Secured Second Lien Debt

186,249

Yield Analysis

Market Yield

11.11%

22.92%

15.22%

Senior Secured Second Lien Debt

6,047

Waterfall Analysis

EBITDA Multiple

4.50x

7.85x

6.74x

Senior Secured Second Lien Debt (b)

815

Waterfall Analysis

Revenue Multiple

0.43x

0.43x

0.43x

Subordinated Debt

121,556

Waterfall Analysis

Tangible Net Asset Value Multiple

1.59x

1.85x

1.71x

Collateralized Securities

29,289

Discounted Cash Flow

Discount Rate

13.80%

19.00%

17.26%

Equity/Other

159,003

Waterfall Analysis

Tangible Net Asset Value Multiple

1.59x

1.85x

1.72x

Equity/Other

15,051

Waterfall Analysis

EBITDA Multiple

3.73x

22.50x

9.78x

Equity/Other

6,487

Waterfall Analysis

Discount Rate

18.00%

18.00%

18.00%

Equity/Other

4,494

Yield Analysis

Market Yield

13.25%

23.43%

21.65%

Equity/Other (b)

1,615

Waterfall Analysis

TBV Multiple

0.90x

0.90x

0.90x

Equity/Other

1,293

Waterfall Analysis

Revenue Multiple

0.30x

0.70x

0.69x

Equity/Other (b) (c)

1,215

N/A

N/A

N/A

N/A

N/A

Equity/Other (b) (d)

504

Waterfall Analysis

Asset Recovery

$110.00

$110.00

$110.00

FBLC Senior Loan Fund, LLC (b)

304,934

Discounted Cash Flow

Discount Rate

13.75%

13.75%

13.75%

Total

$

2,855,689

______________

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

(b)This asset category contains one investment.

(c)Investment(s) were valued based on recent or pending transactions expected to close after the valuation date.

(d)Range and weighted average shown in millions.

There were no significant changes in valuation approach or technique as of March 31, 2023.

38

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

The following table summarizes the significant unobservable inputs used to value the majority of the Level 3 investments as of December 31, 2022. 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

$

1,949,582

Yield Analysis

Market Yield

6.86%

56.39%

11.34%

Senior Secured First Lien Debt

18,961

Waterfall Analysis

EBITDA Multiple

4.77x

9.00x

8.99x

Senior Secured First Lien Debt

8,417

Waterfall Analysis

Revenue Multiple

0.10x

0.77x

0.32x

Senior Secured Second Lien Debt

172,697

Yield Analysis

Market Yield

10.98%

19.94%

15.46%

Senior Secured Second Lien Debt

5,872

Waterfall Analysis

EBITDA Multiple

4.80x

7.75x

6.74x

Senior Secured Second Lien Debt (b)

760

Waterfall Analysis

Revenue Multiple

0.51x

0.51x

0.51x

Subordinated Debt

130,185

Waterfall Analysis

Tangible Net Asset Value Multiple

1.66x

1.87x

1.75x

Subordinated Debt (b)

4,773

Yield Analysis

Market Yield

19.28%

19.28%

19.28%

Collateralized Securities

30,288

Discounted Cash Flow

Discount Rate

14.32%

23.50%

19.59%

Equity/Other

159,003

Waterfall Analysis

Tangible Net Asset Value Multiple

1.66x

1.87x

1.77x

Equity/Other

15,018

Waterfall Analysis

EBITDA Multiple

4.13x

20.75x

9.03x

Equity/Other

8,277

Waterfall Analysis

Discount Rate

14.00%

14.00%

14.00%

Equity/Other

3,587

Yield Analysis

Market Yield

13.00%

27.50%

24.32%

Equity/Other (b)

1,615

Waterfall Analysis

TBV Multiple

0.95x

0.95x

0.95x

Equity/Other

1,125

Waterfall Analysis

Revenue Multiple

0.30x

0.70x

0.69x

Equity/Other (b) (c)

596

N/A

N/A

N/A

N/A

N/A

Equity/Other (b) (d)

595

Waterfall Analysis

Asset Recovery

$110.00

$110.00

$110.00

FBLC Senior Loan Fund, LLC (b)

304,934

Discounted Cash Flow

Discount Rate

13.69%

13.69%

13.69%

Total

$

2,816,285

______________

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

(b)This asset category contains one investment.

(c)Investment(s) were valued based on recent or pending transactions expected to close after the valuation date.

(d)Range and weighted average shown in millions

There were no significant changes in valuation approach or technique as of December 31, 2022.

Level 3 Inputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are included in this category include investments in privately held entities where the fair value is based on unobservable inputs.

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.

The income and market approaches were used in the determination of fair value of certain Level 3 assets as of March 31, 2023 and December 31, 2022. The significant unobservable inputs used in the income approach are the discount rate or market yield used to discount the estimated future cash flows expected to be received from the underlying investment, which include both future principal and interest payments. An increase in the discount rate or market yield would result in a decrease in the fair value. Included in the consideration and selection of discount rates is risk of default, rating of the investment, call provisions and comparable company investments. The significant unobservable inputs used in the market approach are based on market comparable transactions and market multiples of publicly traded comparable companies. Increases or decreases in market comparable transactions or market multiples would result in an increase or decrease, respectively, in the fair value.

39

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

Valuations of loans, corporate debt, and other debt obligations are generally based on discounted cash flow techniques, for which the significant inputs are the amount and timing of expected future cash flows, market yields and recovery assumptions. The significant inputs are generally determined based on relative value analysis, which incorporate comparisons to other debt instruments for which observable prices or broker quotes are available. Other valuation methodologies are used as appropriate including market comparables, transactions in similar instruments and recovery/liquidation analysis. The Company also considers the use of EBITDA multiples, revenue multiples, tangible net asset value multiples, TBV multiples, and other relevant multiples on its debt and equity investments to determine any credit gains or losses in certain instances. Increases or decreases in either of these inputs in isolation may result in a significantly lower or higher fair value measurement of the respective subject instrument.

As of March 31, 2023, the Company had 5 portfolio companies on non-accrual with a total amortized cost of $44.4 million and fair value of $8.4 million, which represented 1.5% and 0.3% of the investment portfolio's total amortized cost and fair value, respectively. As of December 31, 2022, the Company had 5 portfolio companies on non-accrual with a total amortized cost of $44.6 million and fair value of $8.2 million, which represented 1.5%, and 0.3% of the investment portfolio's total 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.

40

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

FBLC Senior Loan Fund, LLC

On January 20, 2021, FBLC and Cliffwater Corporate Lending Fund (“CCLF”) formed a joint venture, FBLC Senior Loan Fund, LLC (the “SLF”), that invests primarily in senior secured loans, and to a lesser extent may invest in mezzanine loans, unsecured loans and equity of predominantly private U.S. middle market companies. SLF was formed as a Delaware limited liability company and is not consolidated by FBLC for financial reporting purposes. FBLC provides capital to SLF in the form of LLC equity interests. At formation, FBLC and CCLF owned 87.5% and 12.5%, respectively, of the LLC equity interests of SLF. As of March 31, 2023 and December 31, 2022, FBLC and CCLF owned 79.8% and 20.2%, respectively, of the LLC equity interests of SLF. Profit and loss are allocated based on each members' ownership percentage of the joint venture's net asset value. SLF has an Administrative and Loan Services Agreement with BSP, an affiliate of the Company, pursuant to which BSP provides certain operational and valuation services for SLF's investments; as well as certain agreements with third-party service providers. FBLC and CCLF each appoint two members to SLF's four-person board of members. All material decisions with respect to SLF, including those involving its investment portfolio, require unanimous approval of a quorum of the board of members. Quorum is defined as (i) the presence of two members of the board of members; provided that at least one individual is present that was elected, designated or appointed by each member; (ii) the presence of three members of the board of members; provided that the individual that was elected, designated or appointed by the member with only one individual present shall be entitled to cast two votes on each matter; and (iii) the presence of four members of the board of members; provided that two individuals are present that were elected, designated or appointed by each member.

As part of the initial contribution to SLF, FBLC contributed $751.8 million of assets, including $664.2 million of investments and $42.4 million of cash, as well as $446.9 million worth of liabilities, including the Citi Credit Facility (as defined in Note 5) debt of $344.4 million in exchange for $304.9 million of equity in SLF. As of March 31, 2023 and December 31, 2022, FBLC’s investment in SLF consisted of equity contributions of $304.9 million. FBLC’s investment in SLF is classified as “Equity/Other” on the Consolidated Schedules of Investments, and other disclosures unless otherwise indicated. Subsequent to the initial contribution, FBLC may sell investments to SLF. For the three months ended March 31, 2023 and the year ended December 31, 2022, FBLC had not sold any investments to SLF.

Below is a summary of SLF’s portfolio as of March 31, 2023 and December 31, 2022. A listing of the individual investments in SLF’s portfolio as of such dates can be found below:

						March 31, 2023						December 31, 2022
						(Unaudited)
Total assets						$	972,174					$	965,671
Total investments (1)						$	867,931					$	855,705
Weighted Average Current Yield for Total Portfolio (2)						10.6		%				10.2		%
Number of Portfolio companies in SLF						162						163
Largest portfolio company investment (1)						$	19,375					$	19,381
Total of five largest portfolio company investments (1)						$	87,457					$	86,158

_____________________

(1) At fair value.

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

SLF may invest in portfolio companies in the same industries in which FBLC directly invests.

Below is a listing of SLF’s individual investments as of March 31, 2023:

March 31, 2023
Portfolio Company (d)						Industry						Investment Coupon Rate (a)						Maturity						Principal/ Number of Shares						Amortized Cost						Fair Value						% of Members' Capital (c)
Senior Secured First Lien Debt
Accentcare, Inc. (b)						Healthcare						L+ 4.00% (8.95%)						6/22/2026						$	9,904					$	9,904					$	6,965					2.0		%
Access Cig, LLC (b)						Business Services						L+ 3.75% (8.73%)						2/27/2025						4,177						4,170						4,128						1.2		%
Acrisure, LLC (b)						Financials						L+ 3.50% (8.34%)						2/15/2027						20,061						19,728						19,375						5.6		%
Adtalem Global Education, Inc. (f)						Education						5.50%						3/1/2028						1,042						1,042						989						0.3		%
Adtalem Global Education, Inc. (f)						Education						L+ 4.00% (8.84%)						8/12/2028						692						692						691						0.2		%
Advisor Group, Inc. (f)						Financials						L+ 4.50% (9.34%)						7/31/2026						7,802						7,802						7,661						2.2		%
Alchemy US Holdco 1, LLC (b)						Industrials						L+ 5.50% (10.34%)						10/10/2025						15,555						15,454						14,603						4.2		%
Allegiant Travel, Co. (f)						Transportation						7.25%						8/15/2027						1,199						1,194						1,195						0.3		%

41

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

March 31, 2023
Portfolio Company (d)						Industry						Investment Coupon Rate (a)						Maturity						Principal/ Number of Shares						Amortized Cost						Fair Value						% of Members' Capital (c)
Altice Financing, SA (f)						Telecom						5.00%						1/15/2028						$	1,999					$	1,940					$	1,624					0.5		%
Alvogen Pharma US, Inc. (b)						Healthcare						S+ 7.50% (12.55%)						6/30/2025						11,720						11,662						10,994						3.2		%
Amentum Government Services Holdings, LLC (f)						Industrials						L+ 4.00% (8.84%)						1/29/2027						1,965						1,956						1,925						0.6		%
Amentum Government Services Holdings, LLC (b)						Industrials						S+ 4.00% (9.03%)						2/15/2029						4,963						4,901						4,841						1.4		%
American Airlines Inc/AAdvantage Loyalty IP, Ltd. (b)						Transportation						L+ 4.75% (9.56%)						4/20/2028						8,316						8,252						8,433						2.5		%
American Rock Salt Company, LLC (f)						Chemicals						L+ 4.00% (8.84%)						6/9/2028						4,717						4,717						4,534						1.3		%
AP Gaming I, LLC (f)						Gaming/Lodging						S+ 4.00% (8.91%)						2/15/2029						7,392						7,280						7,272						2.1		%
Apollo Commercial Real Estate Finance, Inc. (f)						Financials						4.63%						6/15/2029						3,000						3,000						2,106						0.6		%
AppLovin Corp. (b)						Media/Entertainment						S+ 3.10% (7.91%)						10/25/2028						8,910						8,895						8,851						2.6		%
Artera Services, LLC (f)						Utilities						L+ 3.50% (8.66%)						3/6/2025						2,456						2,447						2,073						0.6		%
Ascensus Holidngs, Inc. (b)						Business Services						L+ 3.50% (8.38%)						8/2/2028						7,900						7,896						7,653						2.2		%
Astoria Energy, LLC (f)						Utilities						L+ 3.50% (8.35%)						12/10/2027						1,933						1,933						1,913						0.6		%
Astro AB Merger Sub, Inc. (f)						Financials						L+ 4.25% (9.41%)						4/30/2024						3,780						3,779						3,024						0.9		%
Asurion, LLC (b)						Business Services						L+ 3.25% (8.09%)						12/23/2026						4,912						4,850						4,545						1.3		%
Athenahealth, Inc. (b)						Healthcare						S+ 3.50% (8.26%)						2/15/2029						12,918						12,861						12,078						3.5		%
Athletico Management, LLC (f)						Healthcare						S+ 4.25% (9.30%)						2/15/2029						4,963						4,941						3,614						1.1		%
Avaya Holdings Corp.						Technology						S+ 8.00% (12.83%)						8/15/2023						1,596						1,563						1,636						0.5		%
Avaya Holdings Corp.						Technology						S+ 8.00% (12.89%)						12/15/2027						8,543						8,543						1,977						0.6		%
Bally's Corp. (b)						Gaming/Lodging						L+ 3.25% (7.96%)						10/2/2028						2,696						2,674						2,568						0.7		%
BCP Renaissance, LLC (f)						Energy						L+ 3.50% (8.66%)						10/31/2024						467						465						461						0.1		%
Bella Holding Company, LLC (f)						Healthcare						S+ 3.75% (8.66%)						5/10/2028						2,944						2,922						2,831						0.8		%
Blackstone CQP Holdco, LP (b)						Industrials						L+ 3.50% (8.66%)						6/5/2028						8,219						8,191						8,147						2.4		%
BMC Software Finance, Inc. (b)						Technology						L+ 3.75% (8.59%)						10/2/2025						12,564						12,579						12,387						3.6		%
Bomgar Corp. (f)						Technology						L+ 4.00% (8.84%)						4/18/2025						3,838						3,847						3,748						1.1		%
Cablevision Lightpath, LLC (f)						Telecom						3.88%						9/15/2027						1,999						1,939						1,609						0.5		%
Cirque Du Soleil Holding USA Newco, Inc. (f)						Media/Entertainment						S+ 4.25% (9.15%)						3/8/2030						3,500						3,465						3,456						1.0		%
CLP Health Services, Inc. (b)						Healthcare						L+ 4.25% (9.09%)						12/31/2026						12,752						12,717						11,933						3.5		%
Cnt Holdings I Corp. (f)						Consumer						S+ 3.50% (8.13%)						11/8/2027						3,430						3,430						3,368						1.0		%
CommerceHub, Inc. (f)						Technology						S+ 4.00% (8.78%)						12/29/2027						9,517						9,527						8,843						2.6		%
Community Care Health Network, LLC (b)						Healthcare						L+ 4.75% (9.59%)						2/17/2025						9,636						9,621						8,189						2.4		%
Compass Power Generation, LLC (b)						Utilities						S+ 4.25% (9.17%)						4/14/2029						4,490						4,368						4,464						1.3		%
Connect Finco SARL (f)						Telecom						L+ 3.50% (8.35%)						12/11/2026						7,442						7,460						7,386						2.1		%
Connectwise, LLC (f)						Software/Services						L+ 3.50% (8.34%)						9/29/2028						6,913						6,903						6,660						1.9		%
Conservice Midco, LLC (b)						Business Services						L+ 4.25% (9.09%)						5/13/2027						7,603						7,610						7,455						2.2		%
Conterra Ultra Broadband, LLC (b)						Telecom						S+ 4.75% (9.66%)						4/30/2026						6,625						6,625						6,625						1.9		%
Corelogic, Inc. (b)						Business Services						L+ 3.50% (8.38%)						6/2/2028						7,880						7,869						6,701						1.9		%
Directv Financing, LLC (b)						Media/Entertainment						L+ 5.00% (9.84%)						8/2/2027						4,325						4,290						4,153						1.2		%
Dish Dbs Corp. (f)						Cable						5.25%						12/1/2026						700						700						556						0.2		%
Dish Dbs Corp. (f)						Cable						5.75%						12/1/2028						1,000						1,000						745						0.2		%
Division Holding Corp. (b)						Business Services						L+ 4.75% (9.59%)						5/27/2028						8,630						8,634						8,274						2.4		%
Dynasty Acquisition Co., Inc. (e)						Industrials						S+ 3.50% (8.41%)						4/6/2026						2,788						2,727						2,719						0.8		%
Dynasty Acquisition Co., Inc. (e)						Industrials						S+ 3.50% (8.41%)						4/6/2026						5,185						5,073						5,057						1.5		%
Edgewater Generation, LLC (b)						Utilities						L+ 3.75% (8.59%)						12/13/2025						2,374						2,364						2,208						0.6		%
Flex Acquisition Company, Inc. (f)						Paper & Packaging						S+ 4.18% (9.08%)						4/13/2029						2,481						2,425						2,420						0.7		%
Florida Food Products, LLC (f)						Food & Beverage						L+ 5.00% (9.84%)						10/18/2028						7,920						7,822						7,484						2.2		%
Foley Products Co, LLC (b)						Industrials						S+ 4.75% (9.80%)						12/29/2028						3,077						3,050						3,037						0.9		%

42

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

March 31, 2023
Portfolio Company (d)						Industry						Investment Coupon Rate (a)						Maturity						Principal/ Number of Shares						Amortized Cost						Fair Value						% of Members' Capital (c)
Frontier Communications Corp. (f)						Telecom						5.00%						5/1/2028						$	1,240					$	1,292					$	1,073					0.3		%
Frontier Communications Corp. (b)						Telecom						L+ 3.75% (8.63%)						5/1/2028						19,181						19,169						18,166						5.3		%
Galaxy US OpCo, Inc. (b) (f)						Software/Services						S+ 4.75% (9.56%)						4/29/2029						5,869						5,306						5,179						1.5		%
Geon Performance Solutions, LLC (b)						Chemicals						L+ 4.50% (9.66%)						8/18/2028						4,646						4,618						4,571						1.3		%
Gordian Medical, Inc. (b)						Healthcare						L+ 6.25% (11.41%)						1/31/2027						10,922						10,870						10,059						2.9		%
Greeneden U.S. Holdings I, LLC (b)						Software/Services						L+ 4.00% (8.84%)						12/1/2027						4,878						4,793						4,798						1.4		%
GVC Holdings Gibraltar, Ltd. (f)						Gaming/Lodging						S+ 2.50% (7.44%)						3/29/2027						4,913						4,908						4,895						1.4		%
HAH Group Holding Company, LLC (b)						Healthcare						S+ 5.00% (9.91%)						10/29/2027						728						728						715						0.2		%
HAH Group Holding Company, LLC (b)						Healthcare						S+ 5.00% (9.91%)						10/29/2027						5,754						5,688						5,653						1.6		%
Hamilton Projects Acquiror, LLC (f)						Utilities						L+ 4.50% (9.66%)						6/17/2027						5,092						5,074						5,040						1.5		%
Heartland Dental, LLC (e)						Healthcare						L+ 3.75% (8.59%)						4/30/2025						4,100						3,870						3,826						1.1		%
Hertz Corp. (b) (f)						Transportation						L+ 3.25% (8.10%)						6/30/2028						4,133						4,121						4,102						1.2		%
Hertz Corp. (b) (f)						Transportation						L+ 3.25% (8.10%)						6/30/2028						793						791						788						0.2		%
HireRight, Inc. (f)						Business Services						S+ 3.75% (8.59%)						7/11/2025						5,161						5,146						5,118						1.5		%
Hudson River Trading, LLC (b)						Financials						S+ 3.00% (7.92%)						3/20/2028						5,378						5,321						5,015						1.5		%
ICP Industrial, Inc. (f)						Chemicals						S+ 3.75% (8.91%)						12/29/2027						6,110						6,102						4,631						1.3		%
IDERA, Inc. (f)						Technology						L+ 3.75% (8.51%)						3/2/2028						6,895						6,903						6,557						1.9		%
Indicor, LLC (f)						Industrials						S+ 4.50% (9.40%)						11/22/2029						5,600						5,407						5,550						1.6		%
Ineos Us Finance, LLC (f)						Chemicals						S+ 2.50% (7.41%)						11/8/2028						3,960						3,956						3,884						1.1		%
Intelsat Jackson Holdings, SA (b)						Telecom						S+ 4.25% (9.08%)						2/1/2029						8,240						8,160						8,137						2.4		%
Jack Ohio Finance, LLC (f)						Gaming/Lodging						L+ 4.75% (9.59%)						10/4/2028						3,948						3,933						3,827						1.1		%
Jane Street Group, LLC (f)						Financials						4.50%						11/15/2029						5,000						4,868						4,500						1.3		%
Jump Financial, LLC (b)						Financials						S+ 4.50% (9.66%)						8/7/2028						7,400						7,287						6,789						2.0		%
Kissner Milling Co., Ltd. (f)						Industrials						4.88%						5/1/2028						2,000						1,931						1,783						0.5		%
LABL, Inc. (b)						Paper & Packaging						L+ 5.00% (9.84%)						10/29/2028						3,950						3,901						3,822						1.1		%
Lightstone Holdco, LLC (f)						Utilities						S+ 5.75% (10.56%)						1/29/2027						398						357						340						0.1		%
Lightstone Holdco, LLC (f)						Utilities						S+ 5.75% (10.56%)						1/29/2027						7,037						6,316						6,010						1.7		%
Liquid Tech Solutions Holdings, LLC (b) (f)						Industrials						S+ 4.75% (9.72%)						3/20/2028						10,087						10,046						9,775						2.8		%
Luxembourg Investment Co., 428 SARL (b)						Chemicals						S+ 5.00% (10.05%)						1/3/2029						3,686						3,657						2,940						0.9		%
Madison IAQ, LLC (f)						Industrials						4.13%						6/30/2028						2,000						1,986						1,736						0.5		%
Medallion Midland Acquisition, LP (f)						Energy						S+ 3.75% (8.91%)						10/18/2028						5,558						5,531						5,474						1.6		%
MH Sub I, LLC (f)						Business Services						L+ 3.75% (8.59%)						9/13/2024						8,531						8,527						8,377						2.4		%
Michael Baker International, LLC (b)						Industrials						L+ 5.00% (9.84%)						12/1/2028						3,292						3,266						3,200						0.9		%
MPH Acquisition Holdings, LLC (f)						Healthcare						5.50%						9/1/2028						2,000						1,992						1,612						0.5		%
MPH Acquisition Holdings, LLC (b)						Healthcare						L+ 4.25% (9.20%)						9/1/2028						4,925						4,849						4,208						1.2		%
MYOB US Borrower, LLC (f)						Business Services						S+ 4.00% (8.81%)						5/6/2026						5,397						5,388						5,122						1.5		%
Naked Juice, LLC (f)						Food & Beverage						S+ 3.25% (8.25%)						1/24/2029						1,419						1,417						1,245						0.4		%
National Mentor Holdings, Inc. (f)						Healthcare						S+ 3.75% (8.75%)						3/2/2028						179						178						136						0.0		%
National Mentor Holdings, Inc. (b) (f)						Healthcare						S+ 3.75% (8.66%)						3/2/2028						5,431						5,408						4,122						1.2		%
Nexus Buyer, LLC (f)						Business Services						L+ 3.75% (8.59%)						11/9/2026						9,418						9,195						8,497						2.5		%
Nouryon Finance B.V. (e)						Chemicals						S+ 2.75% (7.53%)						10/1/2025						2,311						2,295						2,289						0.7		%
Novae, LLC (f)						Industrials						S+ 5.00% (9.70%)						12/22/2028						4,950						4,919						4,059						1.2		%
Pathway Vet Alliance, LLC (b)						Healthcare						L+ 3.75% (8.59%)						3/31/2027						2,962						2,968						2,590						0.8		%
Paysafe Finance, PLC (f)						Software/Services						4.00%						6/15/2029						400						400						311						0.1		%
Peraton Corp. (b)						Industrials						L+ 3.75% (8.59%)						2/1/2028						2,908						2,881						2,866						0.8		%

43

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

March 31, 2023
Portfolio Company (d)						Industry						Investment Coupon Rate (a)						Maturity						Principal/ Number of Shares						Amortized Cost						Fair Value						% of Members' Capital (c)
PG&E Corp. (f)						Utilities						L+ 3.00% (7.88%)						6/23/2025						$	10,562					$	10,587					$	10,516					3.1		%
Polaris Newco, LLC (f)						Business Services						L+ 4.00% (9.16%)						6/2/2028						1,975						1,928						1,797						0.5		%
Power Stop, LLC (f)						Transportation						L+ 4.75% (9.59%)						1/26/2029						3,544						3,513						2,646						0.8		%
Project Accelerate Parent, LLC (e)						Technology						L+ 4.25% (9.09%)						1/2/2025						15,900						15,422						15,324						4.5		%
Proofpoint, Inc. (b)						Software/Services						L+ 3.25% (8.09%)						8/31/2028						6,421						6,380						6,266						1.8		%
Protective Industrial Products, Inc. (b)						Industrials						L+ 4.00% (8.84%)						12/29/2027						9,012						8,976						8,858						2.6		%
Pug, LLC (f)						Technology						L+ 3.50% (8.34%)						2/12/2027						4,899						4,808						3,530						1.0		%
Quikrete Holdings, Inc. (f)						Industrials						L+ 3.00% (7.84%)						3/18/2029						7,920						7,883						7,814						2.3		%
Regionalcare Hospital Partners Holdings, Inc. (f)						Healthcare						4.38%						2/15/2027						2,000						2,000						1,647						0.5		%
Regionalcare Hospital Partners Holdings, Inc. (b)						Healthcare						L+ 3.75% (8.58%)						11/16/2025						5,195						5,209						4,940						1.4		%
Renaissance Learning, Inc. (f)						Software/Services						S+ 4.50% (9.23%)						3/30/2029						1,985						1,932						1,975						0.6		%
RXB Holdings, Inc. (f)						Healthcare						S+ 4.50% (9.35%)						12/17/2027						10,077						10,103						9,750						2.8		%
S&S Holdings, LLC (f)						Consumer						L+ 5.00% (9.83%)						3/11/2028						6,860						6,700						6,455						1.9		%
Safe Fleet Holdings, LLC (b)						Industrials						S+ 3.75% (8.61%)						2/17/2029						7,425						7,388						7,255						2.1		%
Safety Products/JHC Acquisition Corp. (b)						Industrials						S+ 4.50% (9.41%)						6/28/2026						926						886						880						0.3		%
Safety Products/JHC Acquisition Corp. (b) (f)						Industrials						S+ 4.50% (9.41%)						6/28/2026						17,138						16,536						16,281						4.7		%
Schenectady International Group, Inc. (b)						Chemicals						S+ 4.75% (9.02%)						10/15/2025						19,721						19,644						16,358						4.8		%
SCIH Salt Holdings, Inc. (f)						Industrials						L+ 4.00% (8.83%)						3/16/2027						3,678						3,655						3,581						1.0		%
SFR Group, SA (b) (e)						Telecom						L+ 4.00% (8.86%)						8/14/2026						12,542						12,377						12,138						3.5		%
Sierra Acquisition, Inc. (b)						Food & Beverage						L+ 4.00% (8.83%)						11/11/2024						4,837						4,727						3,256						0.9		%
Sophia, LP (f)						Software/Services						L+ 3.50% (8.66%)						10/7/2027						2,966						2,969						2,927						0.9		%
Sotera Health Holdings, LLC (f)						Healthcare						S+ 3.75% (8.82%)						12/11/2026						4,240						4,115						4,166						1.2		%
SSH Group Holdings, Inc. (e)						Education						S+ 4.00% (8.90%)						7/30/2025						10,410						10,218						10,294						3.0		%
Staples, Inc. (b)						Business Services						L+ 5.00% (9.81%)						4/16/2026						4,886						4,847						4,488						1.3		%
Team Health Holdings, Inc. (e) (f)						Healthcare						S+ 5.25% (10.06%)						3/2/2027						5,418						4,982						3,860						1.1		%
Tecta America Corp. (f)						Industrials						S+ 4.00% (8.92%)						4/10/2028						8,931						8,911						8,739						2.5		%
Tenet Healthcare Corp. (f)						Healthcare						4.25%						6/1/2029						2,000						1,716						1,809						0.5		%
The Dun & Bradstreet Corp. (f)						Business Services						L+ 3.25% (8.10%)						2/6/2026						4,671						4,682						4,657						1.4		%
Traverse Midstream Partners, LLC (b)						Energy						S+ 3.75% (8.73%)						2/16/2028						13,054						13,039						12,934						3.8		%
Triton Water Holdings, Inc. (f)						Food & Beverage						L+ 3.50% (8.66%)						3/31/2028						7,369						7,356						6,586						1.9		%
Truck Hero, Inc. (f)						Transportation						L+ 3.75% (8.59%)						1/31/2028						1,470						1,467						1,302						0.4		%
United Airlines, Inc. (f)						Transportation						4.63%						4/15/2029						500						442						454						0.1		%
United Airlines, Inc. (f)						Transportation						L+ 3.75% (8.57%)						4/21/2028						3,747						3,736						3,714						1.1		%
University Support Services, LLC (f)						Education						S+ 3.25% (8.16%)						2/10/2029						4,938						4,922						4,855						1.4		%
Urban One, Inc. (f)						Media/Entertainment						7.38%						2/1/2028						5,000						5,134						4,545						1.3		%
Venga Finance Sarl (b)						Telecom						L+ 4.75% (9.70%)						6/28/2029						3,980						3,870						3,791						1.1		%
Veritext Corp. (f)						Business Services						L+ 3.50% (8.34%)						8/1/2025						3,449						3,421						3,394						1.0		%
Vyaire Medical, Inc. (f)						Healthcare						L+ 4.75% (9.52%)						4/16/2025						7,335						6,543						5,579						1.6		%
WaterBridge Midstream Operating, LLC (b)						Energy						L+ 5.75% (10.57%)						6/22/2026						8,631						7,900						8,468						2.6		%
Watlow Electric Manufacturing Co. (b)						Industrials						S+ 3.75% (8.69%)						3/2/2028						9,354						9,319						9,132						2.8		%
Western Dental Services, Inc. (f)						Healthcare						L+ 4.50% (9.34%)						8/18/2028						8,961						8,956						8,240						2.4		%
Western Dental Services, Inc. (f)						Healthcare						L+ 4.50% (9.34%)						8/18/2028						915						915						841						0.2		%
Wilsonart, LLC (b)						Consumer						L+ 3.25% (8.46%)						12/31/2026						7,356						7,352						7,067						2.1		%
WMG Acquisition Corp.						Media/Entertainment						3.00%						2/15/2031						500						396						417						0.1		%

44

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

March 31, 2023
Portfolio Company (d)						Industry						Investment Coupon Rate (a)						Maturity						Principal/ Number of Shares						Amortized Cost						Fair Value						% of Members' Capital (c)
WWEX UNI TopCo Holdings, LLC (b)						Transportation						S+ 4.00% (9.16%)						7/26/2028						$	2,466					$	2,389					$	2,383					0.7		%
YI, LLC (e)						Healthcare						L+ 4.00% (8.84%)						11/7/2024						8,856						8,501						8,768						2.6		%
Zayo Group Holdings, Inc. (f)						Telecom						L+ 3.00% (7.84%)						3/9/2027						4,000						3,390						3,239						0.9		%
Subtotal Senior Secured First Lien Debt																														$	819,560					$	769,487					223.9		%
Senior Secured Second Lien Debt
American Rock Salt Company, LLC (b)						Chemicals						L+ 7.25% (12.09%)						6/11/2029						$	1,943					$	1,924					$	1,858					0.5		%
Asurion, LLC (b) (f)						Business Services						L+ 5.25% (10.09%)						1/31/2028						9,632						9,376						7,985						2.3		%
Edelman Financial Services, LLC (b) (e)						Financials						L+ 6.75% (11.59%)						7/20/2026						7,972						7,764						7,438						2.2		%
IDERA, Inc. (b) (e)						Technology						L+ 6.75% (11.51%)						3/2/2029						1,545						1,401						1,435						0.4		%
Tecta America Corp. (b)						Industrials						S+ 8.50% (13.42%)						4/9/2029						4,998						4,973						4,894						1.4		%
Subtotal Senior Secured Second Lien Debt																														$	25,438					$	23,610					6.8		%
Collateralized Securities
Collateralized Securities - Debt Investments
AIG CLO, Ltd. 21-1A F						Diversified Investment Vehicles						L+ 6.90% (11.72%)						4/22/2034						$	1,410					$	1,293					$	1,053					0.3		%
Battalion CLO, Ltd. 21-17A F						Diversified Investment Vehicles						L+ 7.50% (12.31%)						3/9/2034						1,224						1,138						894						0.3		%
Carlyle GMS CLO, 16-3A FRR						Diversified Investment Vehicles						L+ 8.60% (13.41%)						7/20/2034						2,100						1,991						1,642						0.5		%
Covenant Credit Partners CLO, Ltd. 17 1A E						Diversified Investment Vehicles						L+ 6.45% (11.24%)						10/15/2029						2,500						2,303						2,059						0.6		%
Eaton Vance CDO, Ltd. 15-1A FR						Diversified Investment Vehicles						L+ 7.97% (12.78%)						1/20/2030						2,000						1,764						1,554						0.5		%
Elevation CLO, Ltd. 13-1A D2						Diversified Investment Vehicles						L+ 7.65% (12.51%)						8/15/2032						2,000						1,963						1,803						0.5		%
Fortress Credit BSL, Ltd. 22-1A E						Diversified Investment Vehicles						S+ 8.15% (12.80%)						10/23/2034						1,000						981						927						0.3		%
Great Lakes CLO, Ltd. 21-6A E						Diversified Investment Vehicles						L+ 8.03% (12.82%)						1/15/2034						5,150						4,959						4,380						1.3		%
Greywolf CLO, Ltd. 20-3RA ER						Diversified Investment Vehicles						S+ 9.00% (13.65%)						4/15/2033						1,000						880						815						0.2		%
Hayfin Kingsland XI, Ltd. 19-2A ER						Diversified Investment Vehicles						L+ 7.72% (12.53%)						10/20/2034						2,500						2,431						2,125						0.6		%
Highbridge Loan Management, Ltd. 11A-17 E						Diversified Investment Vehicles						L+ 6.10% (10.91%)						5/6/2030						3,000						2,724						2,335						0.7		%
Jamestown CLO, Ltd. 22-18A E						Diversified Investment Vehicles						S+ 7.87% (12.53%)						7/25/2035						3,000						2,738						2,680						0.8		%
KKR Financial CLO, Ltd. 15 FR						Diversified Investment Vehicles						L+ 8.50% (13.30%)						1/18/2032						2,000						1,900						1,579						0.5		%
LCM, Ltd. Partnership 16A ER2						Diversified Investment Vehicles						L+ 6.38% (11.17%)						10/15/2031						2,500						2,300						2,114						0.6		%
Marble Point CLO, Ltd. 20-1A E						Diversified Investment Vehicles						L+ 6.82% (11.63%)						4/20/2033						4,500						4,408						3,905						1.1		%
Medalist Partners Corporate Finance CLO, Ltd. 21-1A D						Diversified Investment Vehicles						L+ 7.48% (12.29%)						10/20/2034						3,000						2,862						2,498						0.7		%
Northwoods Capital, Ltd. 17-15A ER						Diversified Investment Vehicles						L+ 7.64% (12.60%)						6/20/2034						3,000						2,926						2,568						0.7		%
Ocean Trails CLO 22-12A E						Diversified Investment Vehicles						S+ 8.11% (12.75%)						7/20/2035						3,460						3,192						3,050						0.9		%

45

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

March 31, 2023
Portfolio Company (d)						Industry						Investment Coupon Rate (a)						Maturity						Principal/ Number of Shares						Amortized Cost						Fair Value						% of Members' Capital (c)
OCP CLO, Ltd. 14-5A DR						Diversified Investment Vehicles						L+ 5.70% (10.52%)						4/26/2031						$	2,200					$	2,090					$	1,802					0.5		%
OZLM, Ltd. 16-15A DR						Diversified Investment Vehicles						L+ 6.75% (11.56%)						4/20/2033						2,000						1,911						1,604						0.5		%
Palmer Square CLO, Ltd. 21-4A F						Diversified Investment Vehicles						L+ 7.66% (12.45%)						10/15/2034						1,500						1,431						1,254						0.4		%
Regatta II Funding, LP 13-2A DR2						Diversified Investment Vehicles						L+ 6.95% (11.74%)						1/15/2029						2,000						1,934						1,759						0.5		%
Saranac CLO, Ltd. 20-8A E						Diversified Investment Vehicles						L+ 8.12% (13.04%)						2/20/2033						1,455						1,442						1,281						0.4		%
Sculptor CLO, Ltd. 27A E						Diversified Investment Vehicles						L+ 7.05% (11.86%)						7/20/2034						1,500						1,460						1,286						0.4		%
Sound Point CLO, Ltd. 17-1A E						Diversified Investment Vehicles						L+ 5.96% (10.78%)						1/23/2029						4,000						3,646						3,223						0.9		%
Sound Point CLO, Ltd. 17-2A E						Diversified Investment Vehicles						L+ 6.10% (10.92%)						7/25/2030						2,400						2,100						1,821						0.5		%
Sound Point CLO, Ltd. 18-3A D						Diversified Investment Vehicles						L+ 5.79% (10.61%)						10/26/2031						1,000						908						723						0.2		%
Symphony CLO, Ltd. 2012-9A ER2						Diversified Investment Vehicles						L+ 6.95% (11.74%)						7/16/2032						3,000						2,788						2,587						0.8		%
Trimaran CAVU 2021-2A, Ltd. 21-2A E						Diversified Investment Vehicles						L+ 7.20% (12.02%)						10/25/2034						3,000						2,946						2,554						0.7		%
Trysail CLO, Ltd. 21-1A E						Diversified Investment Vehicles						L+ 7.38% (12.19%)						7/20/2032						1,500						1,449						1,287						0.4		%
Venture CDO, Ltd. 16-23A ER2						Diversified Investment Vehicles						L+ 7.55% (12.35%)						7/19/2034						3,000						2,918						2,550						0.7		%
Venture CDO, Ltd. 16-25A E						Diversified Investment Vehicles						L+ 7.20% (12.01%)						4/20/2029						2,000						1,951						1,692						0.5		%
Venture CDO, Ltd. 20-39A E						Diversified Investment Vehicles						L+ 7.63% (12.42%)						4/15/2033						4,995						4,963						4,384						1.3		%
Venture CLO 43, Ltd. 21-43A E						Diversified Investment Vehicles						L+ 7.15% (11.94%)						4/15/2034						3,000						2,919						2,560						0.7		%
Wind River CLO, Ltd. 14-2A FR						Diversified Investment Vehicles						L+ 7.87% (12.66%)						1/15/2031						3,000						2,540						1,861						0.5		%
Zais CLO 13, Ltd. 19-13A D1						Diversified Investment Vehicles						L+ 4.52% (9.31%)						7/15/2032						3,000						2,746						2,625						0.8		%
Subtotal Collateralized Securities																														$	84,895					$	74,834					21.8		%
TOTAL INVESTMENTS																														$	929,893					$	867,931					252.5		%

______________

(a)The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate ("LIBOR" or "L"), Secured Overnight Financing Rate ("SOFR" or "S"), or Prime ("P") and which reset daily, monthly, quarterly, or semiannually. For each, SLF has provided the spread over the relevant reference rate and the current interest rate in effect at March 31, 2023. Certain investments are subject to reference rate floors. For fixed rate loans, a spread above a reference rate is not applicable. For floating rate securities the all-in rate is disclosed within parentheses.

(b)SLF'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.

(c)Percentages are based on SLF members' capital as of March 31, 2023.

(d)SLF has various unfunded commitments to portfolio companies.

(e)SLF's investment or a portion thereof is held through a total return swap with J.P. Morgan.

(f)SLF's investment or a portion thereof is pledged as collateral under a credit facility with CIBC. Individual investments can be divided into parts which are pledged to separate credit facilities.

SLF had $1.6 million of unfunded commitments on delayed draw term loans as of March 31, 2023.

46

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

Below is a listing of SLF’s individual investments as of December 31, 2022:

December 31, 2022
Portfolio Company (d)						Industry						Investment Coupon Rate (a)						Maturity						Principal/ Number of Shares						Amortized Cost						Fair Value						% of Members' Capital (c)
Senior Secured First Lien Debt
Accentcare, Inc. (b)						Healthcare						L+ 4.00% (8.74%)						6/22/2026						$	9,929					$	9,929					$	6,652					2.0		%
Access Cig, LLC (b)						Business Services						L+ 3.75% (7.82%)						2/27/2025						4,188						4,180						4,094						1.2		%
Acrisure, LLC (b)						Financials						L+ 3.50% (7.88%)						2/15/2027						20,112						19,758						18,830						5.6		%
Adtalem Global Education, Inc.						Education						5.50%						3/1/2028						1,042						1,042						953						0.3		%
Adtalem Global Education, Inc. (f)						Education						L+ 4.00% (8.39%)						8/12/2028						692						693						685						0.2		%
Advisor Group, Inc. (f)						Financials						L+ 4.50% (8.57%)						7/31/2026						7,823						7,823						7,638						2.3		%
Alchemy US Holdco 1, LLC (b)						Industrials						L+ 5.50% (9.88%)						10/10/2025						15,555						15,441						14,467						4.3		%
Allegiant Travel, Co.						Transportation						7.25%						8/15/2027						1,200						1,194						1,143						0.3		%
Altice Financing, SA						Telecom						5.00%						1/15/2028						2,000						1,937						1,616						0.5		%
Alvogen Pharma US, Inc. (b)						Healthcare						S+ 7.50% (12.23%)						6/30/2025						11,873						11,809						10,638						3.3		%
Amentum Government Services Holdings, LLC (f)						Industrials						L+ 4.00% (7.67%)						1/29/2027						1,970						1,960						1,922						0.6		%
Amentum Government Services Holdings, LLC (b)						Industrials						S+ 4.00% (7.56%)						2/15/2029						4,975						4,909						4,837						1.4		%
American Airlines Inc/AAdvantage Loyalty IP, Ltd. (b)						Transportation						L+ 4.75% (8.99%)						4/20/2028						8,316						8,249						8,271						2.5		%
American Rock Salt Company, LLC (f)						Chemicals						L+ 4.00% (8.38%)						6/9/2028						4,729						4,729						4,433						1.3		%
AmWINS Group, Inc. (f)						Financials						L+ 2.25% (6.32%)						2/19/2028						4,925						4,869						4,831						1.4		%
AP Gaming I, LLC (f)						Gaming/Lodging						S+ 4.00% (8.73%)						2/15/2029						7,411						7,291						7,003						2.1		%
Apollo Commercial Real Estate Finance, Inc.						Financials						4.63%						6/15/2029						3,000						3,000						2,418						0.7		%
AppLovin Corp. (b)						Media/Entertainment						P+ 2.00% (9.50%)						10/25/2028						8,933						8,913						8,464						2.5		%
Artera Services, LLC (f)						Utilities						L+ 3.50% (8.23%)						3/6/2025						2,463						2,453						2,012						0.6		%
Ascensus Holidngs, Inc. (b)						Business Services						L+ 3.50% (8.25%)						8/2/2028						7,920						7,913						7,547						2.2		%
Astoria Energy, LLC (f)						Utilities						L+ 3.50% (7.57%)						12/10/2027						1,937						1,937						1,908						0.6		%
Astro AB Merger Sub, Inc. (f)						Financials						L+ 4.25% (8.98%)						4/30/2024						3,795						3,792						3,675						1.1		%
Asurion, LLC (b)						Business Services						L+ 3.25% (7.63%)						12/23/2026						4,925						4,857						4,380						1.3		%
Athenahealth, Inc. (b)						Healthcare						S+ 3.50% (7.82%)						2/15/2029						12,951						12,891						11,660						3.5		%
Athletico Management, LLC (f)						Healthcare						S+ 4.25% (8.98%)						2/15/2029						4,975						4,952						4,024						1.2		%
Avaya Holdings Corp.						Technology						L+ 4.00% (8.32%)						12/15/2027						8,543						8,543						2,879						0.9		%
Aveanna Healthcare, LLC (f)						Healthcare						L+ 3.75% (7.77%)						7/17/2028						93						92						71						0.0		%
Bally's Corp. (b)						Gaming/Lodging						L+ 3.25% (7.54%)						10/2/2028						2,703						2,680						2,494						0.7		%
BCP Renaissance, LLC (f)						Energy						L+ 3.50% (7.88%)						10/31/2024						1,049						1,043						1,037						0.3		%
Bella Holding Company, LLC (f)						Healthcare						L+ 3.75% (7.82%)						5/10/2028						2,951						2,927						2,779						0.8		%
Blackstone CQP Holdco, LP (b)						Industrials						L+ 3.75% (8.48%)						6/5/2028						7,887						7,857						7,840						2.3		%
BMC Software Finance, Inc. (b)						Technology						L+ 3.75% (8.13%)						10/2/2025						12,601						12,621						12,044						3.6		%
Bomgar Corp. (f)						Technology						L+ 4.00% (8.38%)						4/18/2025						3,848						3,857						3,721						1.1		%
Cablevision Lightpath, LLC						Telecom						3.88%						9/15/2027						2,000						1,936						1,661						0.5		%
CDK Global, Inc. (f)						Software/Services						S+ 4.50% (9.08%)						7/6/2029						2,625						2,551						2,598						0.9		%
CLP Health Services, Inc. (b)						Healthcare						L+ 4.25% (7.13%)						12/31/2026						12,784						12,744						11,997						3.6		%
Cnt Holdings I Corp. (f)						Consumer						S+ 3.50% (7.24%)						11/8/2027						3,439						3,439						3,301						1.0		%
CommerceHub, Inc. (f)						Technology						L+ 4.00% (7.67%)						12/29/2027						9,541						9,551						8,726						2.6		%
Community Care Health Network, LLC (b)						Healthcare						L+ 4.75% (9.13%)						2/17/2025						9,661						9,641						8,211						2.4		%
Compass Power Generation, LLC (b)						Utilities						S+ 4.25% (8.69%)						4/14/2029						4,511						4,384						4,466						1.3		%
Connect Finco SARL (f)						Telecom						L+ 3.50% (7.58%)						12/11/2026						7,461						7,479						7,365						2.2		%
Connectwise, LLC (f)						Software/Services						L+ 3.50% (7.88%)						9/29/2028						6,930						6,923						6,568						2.0		%
Conservice Midco, LLC (b)						Business Services						L+ 4.25% (8.63%)						5/13/2027						7,622						7,630						7,514						2.2		%
Conterra Ultra Broadband, LLC (b)						Telecom						S+ 4.75% (9.18%)						4/30/2026						6,642						6,642						6,642						2.0		%

47

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

December 31, 2022
Portfolio Company (d)						Industry						Investment Coupon Rate (a)						Maturity						Principal/ Number of Shares						Amortized Cost						Fair Value						% of Members' Capital (c)
Corelogic, Inc. (b)						Business Services						L+ 3.50% (7.94%)						6/2/2028						$	7,900					$	7,887					$	6,567					2.0		%
Directv Financing, LLC (b)						Media/Entertainment						L+ 5.00% (9.38%)						8/2/2027						4,437						4,400						4,311						1.3		%
Dish Dbs Corp.						Cable						5.25%						12/1/2026						700						700						589						0.2		%
Dish Dbs Corp.						Cable						5.75%						12/1/2028						1,000						1,000						797						0.2		%
Division Holding Corp. (b)						Business Services						L+ 4.75% (9.13%)						5/27/2028						8,651						8,657						8,424						2.5		%
Dynasty Acquisition Co., Inc. (e)						Industrials						L+ 3.50% (7.92%)						4/6/2026						5,199						4,990						4,946						1.5		%
Dynasty Acquisition Co., Inc. (e)						Industrials						L+ 3.50% (7.92%)						4/6/2026						2,795						2,683						2,659						0.8		%
Echo Global Logistics, Inc. (b)						Transportation						L+ 3.50% (7.57%)						11/23/2028						3,305						3,298						3,096						0.9		%
Edelman Financial Services, LLC (b)						Financials						L+ 3.50% (7.88%)						4/7/2028						1,980						1,944						1,843						0.5		%
Edgewater Generation, LLC (b)						Utilities						L+ 3.75% (8.13%)						12/13/2025						2,374						2,363						2,245						0.7		%
Flex Acquisition Company, Inc. (f)						Paper & Packaging						S+ 3.93% (8.60%)						4/13/2029						2,488						2,430						2,364						0.7		%
Florida Food Products, LLC (f)						Food & Beverage						L+ 5.00% (9.38%)						10/18/2028						7,940						7,835						7,503						2.2		%
Foley Products Co, LLC (b)						Industrials						S+ 4.75% (9.48%)						12/29/2028						3,175						3,146						3,062						0.9		%
Frontier Communications Corp.						Telecom						5.00%						5/1/2028						1,240						1,294						1,079						0.3		%
Frontier Communications Corp. (b)						Telecom						L+ 3.75% (8.50%)						5/1/2028						19,229						19,215						18,302						5.5		%
Geon Performance Solutions, LLC (b)						Chemicals						L+ 4.50% (9.23%)						8/18/2028						4,658						4,627						4,658						1.4		%
Gordian Medical, Inc. (b)						Healthcare						L+ 6.25%(10.98%)						1/31/2027						10,949						10,890						10,084						3.0		%
Greeneden U.S. Holdings I, LLC (b)						Software/Services						L+ 4.00% (8.38%)						12/1/2027						4,890						4,801						4,685						1.4		%
GVC Holdings Gibraltar, Ltd. (f)						Gaming/Lodging						L+ 2.50% (7.23%)						3/29/2027						4,925						4,920						4,887						1.5		%
HAH Group Holding Company, LLC (b)						Healthcare						S+ 5.00% (9.43%)						10/29/2027						5,768						5,700						5,667						1.7		%
HAH Group Holding Company, LLC (b)						Healthcare						S+ 5.00% (9.43%)						10/29/2027						730						730						717						0.2		%
Hamilton Projects Acquiror, LLC (f)						Utilities						L+ 4.50% (9.23%)						6/17/2027						5,092						5,074						5,005						1.5		%
Heartland Dental, LLC (e)						Healthcare						L+ 3.75% (8.13%)						4/30/2025						4,111						3,792						3,790						1.1		%
Hertz Corp. (b) (f)						Transportation						L+ 3.25% (7.63%)						6/30/2028						4,143						4,130						4,053						1.2		%
Hertz Corp. (b) (f)						Transportation						L+ 3.25% (7.63%)						6/30/2028						793						791						776						0.2		%
HireRight, Inc. (f)						Business Services						L+ 3.75% (7.82%)						7/11/2025						5,177						5,158						4,972						1.5		%
Hudson River Trading, LLC (b)						Financials						S+ 3.00% (7.44%)						3/20/2028						5,392						5,331						5,090						1.5		%
ICP Industrial, Inc. (f)						Chemicals						L+ 3.75% (8.48%)						12/29/2027						6,905						6,897						4,964						1.5		%
IDERA, Inc. (f)						Technology						L+ 3.75% (7.50%)						3/2/2028						6,912						6,921						6,498						1.9		%
Ineos Us Finance, LLC (f)						Chemicals						S+ 2.50% (6.92%)						11/8/2028						3,970						3,966						3,819						1.1		%
Intelsat Jackson Holdings, SA (b)						Telecom						S+ 4.25% (7.45%)						2/1/2029						8,543						8,462						8,232						2.5		%
Jack Ohio Finance, LLC (f)						Gaming/Lodging						L+ 4.75% (8.82%)						10/4/2028						3,959						3,942						3,838						1.1		%
Jane Street Group, LLC						Financials						4.50%						11/15/2029						5,000						4,864						4,340						1.3		%
Jump Financial, LLC (b)						Financials						S+ 4.50% (9.34%)						8/7/2028						7,419						7,298						7,029						2.1		%
Kissner Milling Co., Ltd.						Industrials						4.88%						5/1/2028						2,000						1,928						1,718						0.5		%
LABL, Inc. (b)						Paper & Packaging						L+ 5.00% (9.07%)						10/29/2028						3,960						3,908						3,748						1.1		%
Lightstone Holdco, LLC (f)						Utilities						S+ 5.75% (10.07%)						2/1/2027						7,113						6,351						6,494						1.9		%
Lightstone Holdco, LLC (f)						Utilities						S+ 5.75% (10.07%)						2/1/2027						402						359						367						0.2		%
Liquid Tech Solutions Holdings, LLC (b) (f)						Industrials						L+ 4.75% (8.92%)						3/20/2028						10,113						10,071						9,557						2.8		%
Luxembourg Investment Co., 428 SARL (b)						Chemicals						S+ 5.00% (9.73%)						1/3/2029						3,686						3,654						3,296						1.0		%
Madison IAQ, LLC						Industrials						4.13%						6/30/2028						2,000						1,985						1,661						0.5		%
Medallion Midland Acquisition, LP (f)						Energy						S+ 3.75% (8.59%)						10/18/2028						5,572						5,544						5,511						1.6		%
MH Sub I, LLC (f)						Business Services						L+ 3.75% (8.13%)						9/13/2024						8,553						8,549						8,300						2.5		%

48

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

December 31, 2022
Portfolio Company (d)						Industry						Investment Coupon Rate (a)						Maturity						Principal/ Number of Shares						Amortized Cost						Fair Value						% of Members' Capital (c)
Michael Baker International, LLC (b)						Industrials						L+ 5.00% (9.38%)						12/1/2028						$	3,301					$	3,272					$	3,208					1.0		%
Monitronics International, Inc. (b)						Business Services						L+ 7.50% (11.92%)						3/29/2024						5,452						5,336						3,593						1.1		%
MPH Acquisition Holdings, LLC						Healthcare						5.50%						9/1/2028						2,000						1,991						1,560						0.5		%
MPH Acquisition Holdings, LLC (b)						Healthcare						L+ 4.25% (8.99%)						9/1/2028						4,938						4,857						4,197						1.3		%
MYOB US Borrower, LLC (f)						Business Services						L+ 4.00% (8.07%)						5/6/2026						5,411						5,400						5,036						1.5		%
Naked Juice, LLC (f)						Food & Beverage						S+ 3.25% (7.93%)						1/24/2029						1,423						1,420						1,269						0.4		%
National Mentor Holdings, Inc. (f)						Healthcare						L+ 3.75% (8.48%)						3/2/2028						179						178						125						0.0		%
National Mentor Holdings, Inc. (b) (f)						Healthcare						L+ 3.75% (8.48%)						3/2/2028						5,445						5,422						3,790						1.1		%
Nexus Buyer, LLC (f)						Business Services						L+ 3.75% (8.13%)						11/9/2026						4,443						4,442						4,248						1.3		%
Nouryon Finance B.V. (e)						Chemicals						L+ 2.75% (7.17%)						10/1/2025						2,319						2,257						2,283						0.7		%
Novae, LLC (f)						Industrials						S+ 5.00% (9.70%)						12/22/2028						4,963						4,928						4,069						1.2		%
Pathway Vet Alliance, LLC (b)						Healthcare						L+ 3.75% (8.13%)						3/31/2027						2,970						2,976						2,456						0.7		%
Paysafe Finance, PLC						Software/Services						4.00%						6/15/2029						400						400						308						0.1		%
Peraton Corp. (b)						Industrials						L+ 3.75% (8.13%)						2/1/2028						2,916						2,886						2,842						0.8		%
PG&E Corp. (f)						Utilities						L+ 3.00% (7.44%)						6/23/2025						10,589						10,616						10,493						3.1		%
Polaris Newco, LLC (f)						Business Services						L+ 4.00% (7.67%)						6/2/2028						1,980						1,931						1,802						0.5		%
Power Stop, LLC (f)						Transportation						L+ 4.75% (9.49%)						1/26/2029						3,553						3,520						2,653						0.8		%
Project Accelerate Parent, LLC (e)						Technology						L+ 4.25% (8.63%)						1/2/2025						15,942						14,823						14,906						4.4		%
Proofpoint, Inc. (b)						Software/Services						L+ 3.25% (7.99%)						8/31/2028						6,437						6,395						6,176						1.8		%
Protective Industrial Products, Inc. (b)						Industrials						L+ 4.00% (8.38%)						12/29/2027						9,035						8,999						8,880						2.6		%
Pug, LLC (f)						Technology						L+ 3.50% (7.88%)						2/12/2027						4,911						4,814						4,044						1.2		%
Quikrete Holdings, Inc. (f)						Industrials						L+ 3.00% (7.38%)						6/11/2028						7,940						7,901						7,868						2.3		%
Regionalcare Hospital Partners Holdings, Inc.						Healthcare						4.38%						2/15/2027						2,000						2,000						1,696						0.5		%
Regionalcare Hospital Partners Holdings, Inc. (b)						Healthcare						L+ 3.75% (8.17%)						11/16/2025						5,195						5,210						4,886						1.5		%
Renaissance Learning, Inc. (f)						Software/Services						S+ 4.50% (8.72%)						3/30/2029						1,990						1,935						1,908						0.7		%
RXB Holdings, Inc. (f)						Healthcare						L+ 4.50% (8.72%)						12/20/2027						10,103						10,134						9,446						2.8		%
S&S Holdings, LLC (f)						Consumer						L+ 5.00% (9.29%)						3/11/2028						6,878						6,715						6,578						2.0		%
Safe Fleet Holdings, LLC (b)						Industrials						S+ 3.75% (8.17%)						2/23/2029						7,444						7,407						7,179						2.1		%
Safety Products/JHC Acquisition Corp. (b)						Industrials						L+ 4.50% (8.88%)						6/28/2026						17,182						16,536						16,323						4.9		%
Safety Products/JHC Acquisition Corp. (b)						Industrials						L+ 4.50% (8.88%)						6/28/2026						929						888						882						0.3		%
Schenectady International Group, Inc. (b)						Chemicals						S+ 4.75% (9.02%)						10/15/2025						19,721						19,631						15,836						4.7		%
SCIH Salt Holdings, Inc. (f)						Industrials						L+ 4.00% (8.42%)						3/16/2027						3,690						3,667						3,578						1.1		%
SFR Group, SA (b) (e)						Telecom						L+ 4.00% (8.65%)						8/14/2026						12,574						12,380						11,668						3.5		%
Sierra Acquisition, Inc. (b)						Food & Beverage						L+ 4.00% (8.42%)						11/11/2024						4,851						4,724						3,711						1.1		%
Sophia, LP (f)						Software/Services						L+ 3.50% (8.23%)						10/7/2027						2,973						2,976						2,864						0.9		%
SSH Group Holdings, Inc. (e)						Education						L+ 4.25% (8.73%)						7/30/2025						10,409						10,130						10,140						3.0		%
Staples, Inc. (b)						Business Services						L+ 5.00% (7.78%)						4/16/2026						4,898						4,856						4,520						1.3		%
Team Health Holdings, Inc. (e) (f)						Healthcare						S+ 5.25% (9.57%)						3/2/2027						5,433						4,603						4,061						1.2		%
Tecta America Corp. (f)						Industrials						S+ 4.25% (8.69%)						4/10/2028						8,954						8,931						8,573						2.6		%
Tenet Healthcare Corp.						Healthcare						4.25%						6/1/2029						2,000						1,707						1,731						0.5		%
The Dun & Bradstreet Corp. (f)						Business Services						L+ 3.25% (7.64%)						2/6/2026						4,683						4,699						4,632						1.4		%
Traverse Midstream Partners, LLC (b)						Energy						S+ 4.25% (8.80%)						9/27/2024						13,421						13,405						13,375						4.0		%
Triton Water Holdings, Inc. (f)						Food & Beverage						L+ 3.50% (8.23%)						3/31/2028						7,387						7,373						6,845						2.0		%
Truck Hero, Inc. (f)						Transportation						L+ 3.75% (8.13%)						1/31/2028						1,474						1,471						1,258						0.4		%

49

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

December 31, 2022
Portfolio Company (d)						Industry						Investment Coupon Rate (a)						Maturity						Principal/ Number of Shares						Amortized Cost						Fair Value						% of Members' Capital (c)
United Airlines, Inc.						Transportation						4.63%						4/15/2029						$	500					$	440					$	435					0.1		%
United Airlines, Inc. (f)						Transportation						L+ 3.75% (8.11%)						4/21/2028						3,756						3,745						3,702						1.1		%
University Support Services, LLC (f)						Education						L+ 3.25% (7.63%)						2/10/2029						4,950						4,933						4,805						1.4		%
Urban One, Inc.						Media/Entertainment						7.38%						2/1/2028						5,000						5,140						4,227						1.3		%
Venga Finance Sarl (b)						Telecom						L+ 4.75% (9.49%)						6/28/2029						3,990						3,878						3,798						1.1		%
Veritext Corp. (f)						Business Services						L+ 3.50% (7.88%)						8/1/2025						3,458						3,426						3,334						1.0		%
Vyaire Medical, Inc. (f)						Healthcare						L+ 4.75% (8.51%)						4/16/2025						7,354						6,478						5,593						1.7		%
WaterBridge Midstream Operating, LLC (b)						Energy						L+ 5.75% (9.13%)						6/22/2026						8,653						7,878						8,299						2.5		%
Watlow Electric Manufacturing Co. (b)						Industrials						S+ 3.75% (8.15%)						3/2/2028						9,378						9,340						8,997						2.7		%
Western Dental Services, Inc. (f)						Healthcare						L+ 4.50% (9.24%)						8/18/2028						8,984						8,978						8,190						2.4		%
Western Dental Services, Inc. (f)						Healthcare						L+ 4.50% (9.24%)						8/18/2028						917						917						836						0.2		%
Wilsonart, LLC (b)						Consumer						L+ 3.25% (7.98%)						12/31/2026						7,375						7,370						7,002						2.1		%
WMG Acquisition Corp.						Media/Entertainment						3.00%						2/15/2031						500						394						398						0.1		%
WMG Holdings, Inc. (b)						Business Services						S+ 3.25% (7.67%)						11/2/2029						834						809						824						0.3		%
YI, LLC (e)						Healthcare						L+ 4.00% (8.38%)						11/7/2024						8,880						8,524						8,525						2.5		%
Subtotal Senior Secured First Lien Debt																														$	809,938					$	754,019					224.8		%
Senior Secured Second Lien Debt
American Rock Salt Company, LLC (b)						Chemicals						L+ 7.25% (11.63%)						6/11/2029						$	1,943					$	1,924					$	1,858					0.5		%
Asurion, LLC (b)						Business Services						L+ 5.25% (9.63%)						1/31/2028						7,632						7,605						5,921						1.8		%
CDS U.S. Intermediate Holdings, Inc.						Media/Entertainment						L+ 8.00% (12.73%) 7.00% PIK						11/24/2027						5,459						5,444						5,317						1.6		%
Edelman Financial Services, LLC (b) (e)						Financials						L+ 6.75% (11.13%)						7/20/2026						7,972						7,256						7,145						2.1		%
IDERA, Inc. (b) (e)						Technology						L+ 6.75% (10.50%)						3/2/2029						1,545						1,375						1,435						0.4		%
Tecta America Corp. (b)						Industrials						S+ 8.50% (12.94%)						4/9/2029						4,998						4,973						4,894						1.5		%
Subtotal Senior Secured Second Lien Debt																														$	28,577					$	26,570					7.9		%
Collateralized Securities
Collateralized Securities - Debt Investments
AIG CLO, Ltd. 21-1A F						Diversified Investment Vehicles						L+ 6.90% (11.23%)						4/22/2034						$	1,410					$	1,291					$	1,053					0.3		%
Battalion CLO, Ltd. 21-17A F						Diversified Investment Vehicles						L+ 7.50% (11.74%)						3/9/2034						1,224						1,137						933						0.3		%
Carlyle GMS CLO, 16-3A FRR						Diversified Investment Vehicles						L+ 8.60% (12.84%)						7/20/2034						2,100						1,990						1,642						0.5		%
Covenant Credit Partners CLO, Ltd. 17 1A E						Diversified Investment Vehicles						L+ 6.45% (10.53%)						10/15/2029						2,500						2,298						2,059						0.6		%
Eaton Vance CDO, Ltd. 15-1A FR						Diversified Investment Vehicles						L+ 7.97% (12.21%)						1/20/2030						2,000						1,758						1,554						0.5		%
Elevation CLO, Ltd. 13-1A D2						Diversified Investment Vehicles						L+ 7.65% (12.26%)						8/15/2032						2,000						1,963						1,804						0.5		%
Fortress Credit BSL, Ltd. 22-1A E						Diversified Investment Vehicles						S+ 8.15% (12.19%)						10/23/2034						1,000						981						927						0.3		%
Great Lakes CLO, Ltd. 21-6A E (f)						Diversified Investment Vehicles						L+ 8.03% (12.11%)						1/15/2034						5,150						4,956						4,380						1.3		%
Greywolf CLO, Ltd. 20-3RA ER						Diversified Investment Vehicles						S+ 9.00% (13.04%)						4/15/2033						1,000						879						815						0.2		%

50

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

December 31, 2022
Portfolio Company (d)						Industry						Investment Coupon Rate (a)						Maturity						Principal/ Number of Shares						Amortized Cost						Fair Value						% of Members' Capital (c)
Hayfin Kingsland XI, Ltd. 19-2A ER						Diversified Investment Vehicles						L+ 7.72% (11.96%)						10/20/2034						$	2,500					$	2,430					$	2,125					0.6		%
Highbridge Loan Management, Ltd. 11A-17 E (f)						Diversified Investment Vehicles						L+ 6.10% (10.63%)						5/6/2030						3,000						2,716						2,429						0.7		%
Jamestown CLO, Ltd. 22-18A E						Diversified Investment Vehicles						S+ 7.87% (11.93%)						7/25/2035						3,000						2,735						2,680						0.8		%
KKR Financial CLO, Ltd. 15 FR						Diversified Investment Vehicles						L+ 8.50% (12.69%)						1/18/2032						2,000						1,899						1,579						0.5		%
LCM, Ltd. Partnership 16A ER2 (f)						Diversified Investment Vehicles						L+ 6.38% (10.46%)						10/15/2031						2,500						2,295						2,114						0.6		%
Marble Point CLO, Ltd. 20-1A E (f)						Diversified Investment Vehicles						L+ 6.82% (11.06%)						4/20/2033						4,500						4,406						3,905						1.2		%
Medalist Partners Corporate Finance CLO, Ltd. 21-1A D (f)						Diversified Investment Vehicles						L+ 7.48% (11.72%)						10/20/2034						3,000						2,860						2,498						0.7		%
Northwoods Capital, Ltd. 17-15A ER						Diversified Investment Vehicles						L+ 7.64% (12.39%)						6/20/2034						3,000						2,924						2,568						0.8		%
Ocean Trails CLO 22-12A E						Diversified Investment Vehicles						S+ 8.11% (12.07%)						7/20/2035						3,460						3,188						3,050						0.9		%
OCP CLO, Ltd. 14-5A DR (f)						Diversified Investment Vehicles						L+ 5.70% (10.03%)						4/26/2031						2,200						2,087						1,802						0.5		%
OZLM, Ltd. 16-15A DR (f)						Diversified Investment Vehicles						L+ 6.75% (10.99%)						4/20/2033						2,000						1,909						1,604						0.5		%
Palmer Square CLO, Ltd. 21-4A F						Diversified Investment Vehicles						L+ 7.66% (11.74%)						10/15/2034						1,500						1,430						1,156						0.3		%
Regatta II Funding, LP 13-2A DR2 (f)						Diversified Investment Vehicles						L+ 6.95% (11.03%)						1/15/2029						2,000						1,931						1,759						0.5		%
Saranac CLO, Ltd. 20-8A E						Diversified Investment Vehicles						L+ 8.12% (12.80%)						2/20/2033						1,455						1,442						1,281						0.4		%
Sculptor CLO, Ltd. 27A E						Diversified Investment Vehicles						L+ 7.05% (11.29%)						7/20/2034						1,500						1,459						1,286						0.4		%
Sound Point CLO, Ltd. 17-1A E (f)						Diversified Investment Vehicles						L+ 5.96% (10.29%)						1/23/2029						4,000						3,634						3,223						1.0		%
Sound Point CLO, Ltd. 17-2A E (f)						Diversified Investment Vehicles						L+ 6.10% (10.46%)						7/25/2030						2,400						2,092						1,821						0.5		%
Sound Point CLO, Ltd. 18-3A D (f)						Diversified Investment Vehicles						L+ 5.79% (10.12%)						10/26/2031						1,000						906						752						0.2		%
Symphony CLO, Ltd. 2012-9A ER2 (f)						Diversified Investment Vehicles						L+ 6.95% (11.03%)						7/16/2032						3,000						2,784						2,587						0.8		%
Trimaran CAVU 2021-2A, Ltd. 21-2A E (f)						Diversified Investment Vehicles						L+ 7.20% (11.56%)						10/25/2034						3,000						2,945						2,660						0.8		%
Trysail CLO, Ltd. 21-1A E						Diversified Investment Vehicles						L+ 7.38% (11.62%)						7/20/2032						1,500						1,448						1,287						0.4		%
Venture CDO, Ltd. 16-23A ER2 (f)						Diversified Investment Vehicles						L+ 7.55% (11.78%)						7/19/2034						3,000						2,916						2,550						0.9		%
Venture CDO, Ltd. 16-25A E (f)						Diversified Investment Vehicles						L+ 7.20% (11.44%)						4/20/2029						2,000						1,949						1,692						0.4		%
Venture CDO, Ltd. 20-39A E						Diversified Investment Vehicles						L+ 7.63% (11.71%)						4/15/2033						4,995						4,962						4,384						1.3		%
Venture CLO 43, Ltd. 21-43A E (f)						Diversified Investment Vehicles						L+ 7.15% (11.23%)						4/15/2034						3,000						2,918						2,560						0.7		%
Wind River CLO, Ltd. 14-2A FR						Diversified Investment Vehicles						L+ 7.87% (11.95%)						1/15/2031						3,000						2,530						2,061						0.6		%
Zais CLO 13, Ltd. 19-13A D1 (f)						Diversified Investment Vehicles						L+ 4.52% (8.60%)						7/15/2032						3,000						2,741						2,536						0.9		%
Subtotal Collateralized Securities																														$	84,789					$	75,116					22.4		%
TOTAL INVESTMENTS																														$	923,304					$	855,705					255.1		%

______________

(a)The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered

51

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

Rate ("LIBOR" or "L"), Secured Overnight Financing Rate ("SOFR" or "S"), or Prime ("P") and which reset daily, monthly, quarterly, or semiannually. For each, SLF has provided the spread over the relevant reference rate and the current interest rate in effect at December 31, 2022. Certain investments are subject to reference rate floors. For fixed rate loans, a spread above a reference rate is not applicable. For floating rate securities the all-in rate is disclosed within parentheses.

(b)SLF'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.

(c)Percentages are based on SLF members' capital as of December 31, 2022.

(d)SLF has various unfunded commitments to portfolio companies.

(e)SLF's investment or a portion thereof is held through a total return swap with J.P. Morgan.

(f)SLF's investment or a portion thereof is pledged as collateral under a credit facility with CIBC. Individual investments can be divided into parts which are pledged to separate credit facilities.

SLF had $1.6 million of unfunded commitments on delayed draw term loans as of December 31, 2022.

Below is certain summarized financial information for SLF as of March 31, 2023 and December 31, 2022 and for the periods ended March 31, 2023 and March 31, 2022:

Selected Statements of Assets and Liabilities Information			March 31,						December 31,
			2023						2022
			(Unaudited)
ASSETS
Investments, at fair value (amortized cost of $929,893 and $923,304, respectively)			$	867,931					$	855,705
Cash and other assets			104,243						109,966
Total assets			$	972,174					$	965,671
LIABILITIES
Revolving credit facilities (net of deferred financing costs of $1,235 and $1,483, respectively)			$	537,815					$	549,067
Secured borrowings			62,744						60,899
Other liabilities			27,904						20,264
Total liabilities			$	628,463					$	630,230
MEMBERS' CAPITAL
Total members' capital			$	343,711					$	335,441
Total liabilities and members' capital			$	972,174					$	965,671

52

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

Selected Statements of Operations Information																					For the three months ended March 31,
																					2023						2022
																					(Unaudited)						(Unaudited)
Investment income:
Total investment income																					$	22,572					$	14,429
Operating expenses:
Interest and credit facility financing expenses																					9,755						3,368
Other expenses																					576						634
Total expenses																					10,331						4,002
Net investment income																					12,241						10,427
Realized and unrealized gain (loss):
Net realized and unrealized gain (loss)																					4,539						(13,249)
Net increase (decrease) in members' capital resulting from operations																					$	16,780					$	(2,822)

53

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

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.

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. The Board renewed the Investment Advisory Agreement on January 30, 2023.

Base Management Fee

The base management fee is calculated at an annual rate of 1.5% of the Company's average gross assets (including assets purchased with borrowed funds). The Company's gross assets increase or decrease with any appreciation or depreciation associated with a derivative contract. Average gross assets is calculated based on the average value of the Company’s gross assets at the end of the two most recently completed calendar quarters. The base management fee is payable quarterly in arrears and is appropriately pro-rated for any partial month or quarter. All or any part of the base management fee not taken as to any quarter may be deferred without interest and may be taken in such other quarter as the Adviser will determine within three years.

As of March 31, 2023 and December 31, 2022, $11.1 million and $11.1 million was payable to the Adviser for base management fees, respectively.

For the three months ended March 31, 2023 and 2022, the Company incurred $11.1 million and $10.5 million, respectively, in base management fees under the Investment Advisory Agreement.

Incentive Fees

The incentive fee consists of two parts. The first part is referred to as the incentive fee on income and it is calculated and payable quarterly in arrears based on the Company’s “Pre-Incentive Fee Net Investment Income” for the immediately preceding quarter. “Pre-Incentive Fee Net Investment Income” means interest income, dividend income, and any other income (including any other fees, other than fees for providing managerial assistance, such as commitment, origination, structuring, diligence, and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the Company’s operating expenses for the quarter (including the base management fee, expenses payable under the administration agreement and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as original issue discount debt instruments with payment-in-kind interest and zero coupon securities), accrued income that the Company has not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains or losses, or unrealized capital appreciation or depreciation. The payment of the incentive fee on income is 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 will 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) will 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 will be equal to 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, 2023 and December 31, 2022, $10.0 million and $9.7 million was payable to the Adviser for the incentive fee on income, respectively.

For the three months ended March 31, 2023 and 2022, the Company incurred $9.6 million and $7.3 million, respectively, in incentive fees on income under the Investment Advisory Agreement.

54

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

The second part of the incentive fee, referred to as the “incentive fee on capital gains during operations,” is an incentive fee on capital gains earned on liquidated investments from the portfolio during operations prior to the Company’s liquidation and is 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 equals 20% of the Company’s incentive fee capital gains, which equals the Company’s realized capital gains on a cumulative basis from inception, calculated as of the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees. For the three months ended March 31, 2023 and 2022, the Company did not incur incentive fees on capital gains during operations under the Investment Advisory Agreement.

Administration Agreement

In connection with the Administration Agreement, BSP provides the Company with office facilities and administrative services. As of March 31, 2023 and December 31, 2022, $0.4 million and $1.4 million was payable to BSP under the Administration Agreement, respectively.

For the three months ended March 31, 2023 and 2022, the Company incurred $0.4 million and 0.3 million, respectively, in administrative service fees under the Administration Agreement.

Co-Investment Relief

The 1940 Act generally prohibits BDCs from entering into negotiated co-investments with affiliates absent an order from the SEC. 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.    

Note 5 — Borrowings

Wells Fargo Credit Facility

On August 28, 2020, the Company entered into a $300.0 million revolving credit facility with the Company, as collateral manager, Funding I, a wholly owned, consolidated special purpose financing subsidiary, as borrower, the lenders party thereto, Wells Fargo, as administrative agent, and U.S. Bank, as collateral agent and collateral custodian (the “Wells Fargo Credit Facility”).The Wells Fargo Credit Facility provides for borrowings through August 28, 2023, and any amounts borrowed under the Wells Fargo Credit Facility will mature on August 28, 2025. Prior to the Second Amendment (defined below), the Wells Fargo Credit Facility was priced at three-month LIBOR, with a LIBOR floor of zero, plus a spread calculated based upon the composition of loans in the collateral pool, which will not exceed 2.75% per annum. Interest is payable quarterly in arrears. Funding I will be subject to a non-usage fee to the extent the commitments available under the Wells Fargo Credit Facility have not been borrowed. The non-usage fee per annum is 0.50% for the first 25% of the unused balance and up to 2.0% for the remaining unused balance. Funding I paid a structuring fee and incurred other customary costs and expenses in connection with the Wells Fargo Credit Facility. Pursuant to an amendment entered into on April 6, 2021, the commitment fee for any unused portion of the Wells Fargo Credit Facility was temporarily reduced until September 30, 2021 (the "First Amendment"). Additionally, pursuant to the First Amendment, the maximum spread was reduced from 2.75% to 2.50% as a result of this amendment. The other terms of the Wells Fargo Credit Facility were unchanged. Pursuant to an amendment entered into on May 27, 2022 (the "Second Amendment"), the benchmark rate was transitioned from LIBOR to SOFR. After the Second Amendment, the Wells Fargo Credit Facility is priced at Daily Simple SOFR, with a Daily Simple SOFR floor of zero, plus a spread calculated based upon the composition of loans in the collateral pool, which will not exceed 2.60% per annum.

Funding I’s obligations under the Wells Fargo Credit Facility are secured by a first priority security interest in substantially all of the assets of Funding I, including its portfolio of investments and the Company’s equity interest in Funding I. The obligations of Funding I under the Wells Fargo Credit Facility are non-recourse to the Company.

55

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

In connection with the Wells Fargo Credit Facility, the Company and Funding I have made certain representations and warranties and are required to comply with various covenants and other customary requirements. The Wells Fargo Credit Facility contains customary default provisions pursuant to which the administrative agent and the lenders under the Wells Fargo Credit Facility may terminate the Company in its capacity as collateral manager/portfolio manager under the Wells Fargo Credit Facility. Upon the occurrence of an event of default under the Wells Fargo Credit Facility, the administrative agent or the lenders may declare the outstanding advances and all other obligations under the Wells Fargo Credit Facility immediately due and payable.

JPM Credit Facility

On August 28, 2020, the Company, through a wholly-owned, consolidated special purpose financing subsidiary, 57th Street, entered into a $300.0 million revolving credit facility with JPMorgan Chase Bank, National Association, as administrative agent (“JPM”), and U.S. Bank, as collateral agent, collateral administrator and securities intermediary (the “JPM Credit Facility”).

The JPM Credit Facility provides for borrowings through August 28, 2023, and any amounts borrowed under the JPM Credit Facility will mature on August 28, 2023 unless the administrative agent exercises its option to extend the maturity date to August 28, 2024. The JPM Credit Facility is priced at three-month LIBOR, with a LIBOR floor of zero, plus a spread of 2.75% per annum. Interest is payable quarterly in arrears. 57th Street will be subject to a non-usage fee to the extent the commitments available under the JPM Credit Facility have not been borrowed. The non-usage fee per annum is 0.50% for the first 20% of the unused balance and up to 2.75% for the remaining unused balance until August 28, 2021, when the non-usage fee per annum is 0.75% for the first 20% of the unused balance and up to 2.75% for the remaining unused balance. 57th Street paid a structuring fee and incurred other customary costs and expenses in connection with the JPM Credit Facility. On January 21, 2021, the Company entered into an amendment (the “JPM Amendment”) to the JPM Credit Facility. The JPM Amendment, among other things, increases the amount that the Company is permitted to borrow under the JPM Credit Agreement from $300.0 million to $400.0 million. On April 12, 2021, the Company, through 57th Street, amended and restated the JPM Credit Facility. The amendment and restatement temporarily reduced the previous minimum funding amount until October 13, 2021. The other material terms of the JPM Credit Facility were unchanged.

On December 9, 2022, the Company entered into an amendment (the "JPM 2022 Amendment") to the JPM Credit Facility. The JPM 2022 Amendment, among other things, (1) extends the maturity date of the JPM Credit Facility to August 28, 2024, (2) extends the maturity date, upon the exercise of the Extension Options (as defined in the JPM Credit Facility), of the JPM Credit Facility to August 28, 2025, and (3) changes the benchmark rate and applicable margin for advances under the JPM Credit Facility to three-month Term SOFR plus 3.00% (subject to further increases consistent with the terms of the JPM Credit Facility).

    57th Street’s obligations under the JPM Credit Facility are secured by a first priority security interest in substantially all of the assets of 57th Street, including its portfolio of investments and the Company’s equity interest in 57th Street. The obligations of 57th Street under the JPM Credit Facility are non-recourse to the Company.

In connection with the JPM Credit Facility, the Company and 57th Street have made certain representations and warranties and are required to comply with various covenants and other customary requirements. The JPM Credit Facility contains customary default provisions pursuant to which the administrative agent and the lenders under the JPM Credit Facility may terminate the Company in its capacity as collateral manager/portfolio manager under the JPM Credit Facility. Upon the occurrence of an event of default under the JPM Credit Facility, the administrative agent or the lenders may declare the outstanding advances and all other obligations under the JPM Credit Facility immediately due and payable.

JPM Revolver Facility

On June 10, 2022, the Company entered into a $495.0 million revolving credit facility with JPMorgan Chase Bank, as administrative agent and as collateral agent, MUFG Union Bank, N.A., Sumitomo Mitsui Banking Corporation, and Wells Fargo Bank, National Association as syndication agents, as well as other Lender parties (the “JPM Revolver Facility”).

56

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

The JPM Revolver Facility provides for borrowings through June 10, 2026, and any amounts borrowed under the JPM Revolver Facility will mature on June 10, 2027. The JPM Revolver Facility is priced at three-month Term SOFR, plus a spread calculated based upon the composition of loans in the collateral pool, which will not exceed 1.98% per annum. Interest is payable quarterly in arrears. The Company will be subject to a non-usage fee of 0.38% to the extent the commitments available under the JPM Revolver Facility have not been borrowed. The Company paid a structuring fee and incurred other customary costs and expenses in connection with the JPM Revolver Facility.

In connection with the JPM Revolver Facility, the Company has made certain customary representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. The JPM Revolver Facility contains customary events of default for similar financing transactions. Upon the occurrence and during the continuation of an event of default, JPMorgan Chase Bank, N.A. may declare the outstanding advances and all other obligations under the JPM Revolver Facility immediately due and payable.

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. From January 1, 2020 to January 20, 2021 the Citi Credit Facility provided for borrowings in an aggregate principal amount of up to $400.0 million on a committed basis, with a reinvestment period ending on May 31, 2021 and maturity date of May 31, 2022. On January 20, 2021, SLF, the Company's joint venture with CCLF entered into an amendment to the Citi Credit Facility (the “Citi Credit Agreement”). The amendment, among other things, (i) replaces the Company with SLF as the collateral manager under the Citi Credit Agreement, (ii) extends the end of the reinvestment period from May 31, 2021 to May 31, 2023 and (iii) extends the final maturity date from May 31, 2022 to May 31, 2024. As a result of this amendment to the Citi Credit Facility, the Company incurred a realized loss on extinguishment of debt of $1.3 million. In connection with the Citi Credit Facility, CB Funding 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, Citi may declare the outstanding advances and all other obligations under the Citi Credit Facility immediately due and payable. During the continuation of an event of default, CB Funding must pay interest at a default rate.

The Citi Credit Facility contains customary default provisions for facilities of this type pursuant to which Citi may terminate the rights, obligations, power, and authority of the Company, in its capacity as servicer of the portfolio assets under the Citi Credit Facility, including, but not limited to, non-performance of Citi Credit Facility obligations, insolvency, defaults of certain financial covenants, and other events with respect to the Company that may be adverse to Citi and the secured parties under the Citi Credit Facility.

The Citi Credit Facility is priced at three-month LIBOR 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.

MassMutual Credit Facility

On July 7, 2020, the Company and a wholly-owned, special purpose financing subsidiary, BDCA Asset Financing, entered into a loan and servicing agreement (the “MassMutual Credit Facility”) with Massachusetts Mutual Life Insurance Company (“MassMutual”) as facility servicer and a lender and U.S. Bank National Association as collateral custodian, collateral administrator and administrative agent. The MassMutual Credit Facility provides for borrowings of up to $100.0 million on a committed basis, and, subject to satisfaction of certain conditions, contains an accordion feature whereby the Mass Mutual Credit Facility can be expanded to $150.0 million.

BDCA Asset Financing’s obligations under the MassMutual Credit Facility are secured by a first priority security interest in substantially all of the assets of BDCA Asset Financing, including its portfolio of investments and the Company’s equity interest in BDCA Asset Financing. The obligations of BDCA Asset Financing under the MassMutual Credit Facility are non-recourse to the Company.

The MassMutual Credit Facility provides for borrowings through December 31, 2021 and matures on December 31, 2025.

57

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

The MassMutual Credit Facility is priced at three-month LIBOR, with a LIBOR floor of 0.75%, plus a spread of 5.0% per annum. Interest is payable quarterly in arrears. BDCA Asset Financing will be subject to a non-usage fee of 0.50% to the extent the aggregate principal amount available under the MassMutual Credit Facility has not been borrowed. BDCA Asset Financing paid a structuring fee and incurred other customary costs and expenses in connection with the MassMutual Credit Facility.

In connection with the MassMutual Credit Facility, the Company and BDCA Asset Financing have made certain representations and warranties and are required to comply with various covenants and other customary requirements. The MassMutual Credit Facility contains customary default provisions pursuant to which MassMutual may terminate the Company in its capacity as portfolio asset servicer of the portfolio assets under the MassMutual Credit Facility. Upon the occurrence of an event of default, MassMutual may declare the outstanding advances and all other obligations under the MassMutual Credit Facility immediately due and payable.

Effective February 18, 2022, the Company terminated the Mass Mutual Credit Facility. As a result of this termination, the Company incurred a realized loss on extinguishment of debt of $1.8 million.

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 the Indenture dated as of December 19, 2017 (the “2017 Indenture”), between the Company and the Trustee, and a Supplemental Indenture, dated as of December 19, 2017 (the “Supplemental Indenture”), between the Company and the Trustee. The 2022 Notes will mature on December 30, 2022, unless repurchased or redeemed in accordance with their terms prior to such date. The 2022 Notes bear interest at a rate of 4.75% per year payable semi-annually on June 30 and December 30 of each year, commencing on June 30, 2018. The 2022 Notes will be general unsecured obligations of the Company that rank senior in right of payment to all of the Company's existing and future indebtedness that is expressly subordinated in right of payment to the 2022 Notes. The 2022 Notes will rank equally in right of payment with all of the Company's existing and future senior liabilities that are not so subordinated, effectively junior to any of the Company's secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and structurally junior to all existing and future indebtedness incurred by the Company's subsidiaries, financing vehicles, or similar facilities, including credit facilities entered into by the Company's wholly owned, special purpose financing subsidiaries.

The 2017 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 2017 Indenture.

In addition, if a change of control repurchase event, as defined in the 2017 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.

On December 30, 2022, the Company paid off the 2022 Notes.

58

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

2023 Notes

On May 11, 2018, the Company entered into a Purchase Agreement (the “2023 Notes Purchase Agreement”) with the Initial Purchaser relating to the Company’s sale of $60.0 million aggregate principal amount of its 5.38% fixed rate notes due 2023 (the “2023 Notes”) to the Initial Purchaser in a private placement in reliance on Section 4(a)(2) of the Securities Act of 1933, and for initial resale by the Initial Purchaser to qualified institutional buyers pursuant to the exemption from registration provided by Rule 144A promulgated under the Securities Act and to institutional accredited investors under Rule 501 (a)(1), (2), (3), or (7) under the Securities Act. The Company relied upon these exemptions from registration based in part on representations made by the Initial Purchaser. The 2023 Notes Purchase Agreement also includes customary representations, warranties, and covenants by the Company. Under the terms of the 2023 Notes Purchase Agreement, the Company has agreed to indemnify the Initial Purchaser against certain liabilities under the Securities Act. The 2023 Notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration. The net proceeds from the sale of the 2023 Notes were approximately $58.7 million, after deducting an offering price discount of approximately $0.3 million, as well as Initial Purchaser’s discounts and commissions of approximately $0.6 million and estimated offering expenses of approximately $0.4 million, each payable by the Company. The Company used the net proceeds to repay outstanding indebtedness, to make investments in portfolio companies in accordance with its investment objectives, and for general corporate purposes. The 2023 Notes were issued pursuant to the 2017 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 2017 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 2017 Indenture. In addition, if a change of control repurchase event, as defined in the 2017 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.

59

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

2024 Notes

On December 3, 2019, the Company entered into a Purchase Agreement (the “2024 Notes Purchase Agreement”) with the Initial Purchaser relating to the Company’s sale of $100.0 million aggregate principal amount of its 4.85% fixed rate notes due 2024 (the “2024 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 2024 Notes Purchase Agreement also includes customary representations, warranties, and covenants by the Company. Under the terms of the 2024 Notes Purchase Agreement, the Company has agreed to indemnify the Initial Purchaser against certain liabilities under the Securities Act. The 2024 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 2024 Notes were approximately $98.4 million, after deducting the Initial Purchaser’s discounts and commissions of approximately $1.2 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 2024 Notes were issued pursuant to the 2017 Indenture between the Company and The Trustee, and a Third Supplemental Indenture, dated as of December 5, 2019, between the Company and the Trustee. The 2024 Notes will mature on December 15, 2024, unless repurchased or redeemed in accordance with their terms prior to such date. The 2024 Notes bear interest at a rate of 4.85% per year payable semi-annually on June 15 and December 15 of each year, commencing on June 15, 2020. The 2024 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 2024 Notes. The 2024 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 2017 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 2024 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 2017 Indenture. In addition, if a change of control repurchase event, as defined in the 2017 Indenture, occurs prior to maturity, holders of the 2024 Notes will have the right, at their option, to require the Company to repurchase for cash some or all of the 2024 Notes at a repurchase price equal to 100% of the principal amount of the 2024 Notes being repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date.

60

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

2026 Notes

On March 24, 2021, the Company entered into a Purchase Agreement (the “2026 Notes Purchase Agreement”) with the initial purchaser listed therein relating to the Company’s sale of $300.0 million aggregate principal amount of its 3.25% fixed rate notes due 2026 (the “Restricted 2026 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 certain non-U.S. persons outside the United States pursuant to Regulation S under the Securities Act. The Company relied upon these exemptions from registration based in part on representations made by the Initial Purchaser. The 2026 Notes Purchase Agreement also includes customary representations, warranties, and covenants by the Company. Under the terms of the 2026 Notes Purchase Agreement, the Company has agreed to indemnify the Initial Purchaser against certain liabilities under the Securities Act. The Restricted 2026 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 2026 Notes were approximately $296.0 million, after deducting the Initial Purchaser’s discounts and commissions and estimated offering expenses. 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 Restricted 2026 Notes were issued pursuant to the Indenture dated as of March 29, 2021 (the “2021 Indenture”), between the Company and the Trustee, and a Supplemental Indenture, dated as of March 29, 2021 (the “First Supplemental Indenture”), between the Company and the Trustee. The 2026 Notes (as defined below) will mature on March 30, 2026, unless repurchased or redeemed in accordance with their terms prior to such date. The 2026 Notes bear interest at a rate of 3.25% per year payable semi-annually on March 30 and September 30 of each year, commencing on September 30, 2021. The 2026 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 2026 Notes. The 2026 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 2021 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 2026 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 2021 Indenture. In addition, if a change of control repurchase event, as defined in the 2021 Indenture, occurs prior to maturity, holders of the 2026 Notes will have the right, at their option, to require the Company to repurchase for cash some or all of the 2026 Notes at a repurchase price equal to 100% of the principal amount of the 2026 Notes being repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date. Pursuant to a Registration Statement on Form N-14 (File No. 333-257321), on September 22, 2021, the Company closed an exchange offer in which holders of the Restricted 2026 Notes were offered the opportunity to exchange their Restricted 2026 Notes for new registered notes with substantially identical terms (the “Unrestricted 2026 Notes” and, together with the Restricted 2026 Notes, the 2026 Notes), through which holders representing 99.88% of the outstanding principal of the then Restricted 2026 Notes obtained Unrestricted 2026 Notes.

The weighted average annualized interest cost for all borrowings for the three months ended March 31, 2023 and 2022 was 6.06% and 3.41% respectively. The average daily debt outstanding for the three months ended March 31, 2023 and 2022 was $1.2 billion and $1.3 billion, respectively. The maximum debt outstanding for the three months ended March 31, 2023 and 2022 was $1.3 billion and $1.3 billion, respectively.

61

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

The following table represents borrowings as of March 31, 2023:

						Maturity Date						Total Aggregate Borrowing Capacity						Total Principal Outstanding						Less Deferred Financing Costs						Amount per Consolidated Statements of Assets and Liabilities
Wells Fargo Credit Facility						8/28/2025						$	300,000					$	225,000					$	(3,675)					$	221,325
JPM Credit Facility						8/28/2024						400,000						320,000						(1,097)						318,903
JPM Revolver Facility						6/10/2027						495,000						243,376						(3,611)						239,765
2026 Notes						3/30/2026						300,000						297,661						(326)						297,335
2024 Notes						12/15/2024						100,000						99,593						(63)						99,530
2023 Notes						5/30/2023						60,000						59,990						(31)						59,959
Totals												$	1,655,000					$	1,245,620					$	(8,803)					$	1,236,817

The following table represents borrowings as of December 31, 2022:

						Maturity Date						Total Aggregate Borrowing Capacity						Total Principal Outstanding						Less Deferred Financing Costs						Amount per Consolidated Statements of Assets and Liabilities
Wells Fargo Credit Facility						8/28/2025						$	300,000					$	225,000					$	(4,051)					$	220,949
JPM Credit Facility						8/28/2024						400,000						320,000						(1,289)						318,711
JPM Revolver Facility						6/10/2027						495,000						231,876						(3,823)						228,053
2026 Notes						3/30/2026						300,000						297,469						(353)						297,116
2024 Notes						12/15/2024						100,000						99,534						(72)						99,462
2023 Notes						5/30/2023						60,000						59,973						(77)						59,896
Totals												$	1,655,000					$	1,233,852					$	(9,665)					$	1,224,187

The following table represents interest and debt fees for the three months ended March 31, 2023:

									Three months ended March 31, 2023
																																	Interest Rate						Non-Usage Rate						Interest Expense						Deferred Financing Costs (6)						Other Fees (7)
Wells Fargo Credit Facility																																	(1)						(2)						$	3,954					$	376					$	123
JPM Credit Facility																																	(3)						(4)						6,072						192						190
JPM Revolver Facility																																	(5)						0.38%						3,929						212						267
2026 Notes																																	3.25%						n/a						2,630						27						—
2024 Notes																																	4.85%						n/a						1,271						9						—
2023 Notes																																	5.38%						n/a						822						46						—
Totals																																													$	18,678					$	862					$	580

______________

(1) From May 27, 2022 through March 31, 2023, the Wells Fargo Credit Facility had an interest rate priced at Daily Simple SOFR, with a Daily Simple SOFR floor of zero, plus a spread calculated based upon the composition of the loans in the collateral pool, which will not exceed 2.60% per annum.

(2) The non-usage fee per annum is 0.50% for the first 25% of the unused balance and up to 2.0% for the remaining unused balance.

(3) From December 9, 2022 through March 31, 2023, interest rate was priced at three-month Term SOFR, plus a spread of 3.00% per annum.

62

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

(4) The non-usage fee per annum is 0.75% for the first 20% of the unused balance and up to 2.75% for the remaining unused balance.

(5) Interest rate is priced at three-month Term SOFR, plus a spread calculated based upon the composition of the loans in the collateral pool,which will not exceed 1.98% per annum.

(6) Amortization of deferred financing costs.

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

The following table represents interest and debt fees for the three months ended March 31, 2022:

									Three months ended March 31, 2022
																																	Interest Rate						Non-Usage Rate						Interest Expense						Deferred Financing Costs (6)						Other Fees (7)
Wells Fargo Credit Facility																																	(1)						(2)						$	1,947					$	376					$	49
JPM Credit Facility																																	(3)						(4)						2,927						104						68
MassMutual Credit Facility																																	(5)						0.50%						—						38						26
2026 Notes																																	3.25%						n/a						2,630						35						—
2024 Notes																																	4.85%						n/a						1,271						9						—
2023 Notes																																	5.38%						n/a						822						47						—
2022 Notes																																	4.75%						n/a						1,822						113						—
Totals																																													$	11,419					$	722					$	143

______________

(1) From April 6, 2021 through March 31, 2022, the Wells Fargo Credit Facility had an interest rate priced at three-month LIBOR, with a LIBOR floor of zero, plus a spread calculated based upon the composition of the loans in the collateral pool, which will not exceed 2.50% per annum.

(2) The non-usage fee per annum is 0.50% for the first 25% of the unused balance and up to 2.0% for the remaining unused balance.

(3) Interest rate is priced at three-month LIBOR, with a LIBOR floor of zero, plus a spread of 2.75% per annum.

(4) The non-usage fee per annum is 0.75% for the first 20% of the unused balance and up to 2.75% for the remaining unused balance.

(5) Interest rate is priced at three-month LIBOR, with a LIBOR floor of 0.75%, plus a spread of 5.0% per annum.

(6) Amortization of deferred financing costs.

(7) Includes non-usage fees and custody 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 2022 Notes, 2023 Notes, 2024 Notes, and 2026 Notes are derived from market indications provided by Bloomberg Finance L.P. at March 31, 2023 and December 31, 2022, as applicable.

At March 31, 2023 and December 31, 2022, 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, 2023 and December 31, 2022, the Company's borrowings would be deemed to be Level 3, as defined in Note 3 - Fair Value of Financial Instruments.

63

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(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:

			Level						Carrying Amount at March 31, 2023						Fair Value at March 31, 2023
Wells Fargo Credit Facility			3						$	225,000					$	225,000
JPM Credit Facility			3						320,000						320,000
JPM Revolver Facility			3						243,376						243,376
2026 Notes			3						297,661						265,923
2024 Notes			3						99,593						95,153
2023 Notes			3						59,990						59,792
									$	1,245,620					$	1,209,244

			Level						Carrying Amount at December 31, 2022						Fair Value at December 31, 2022
Wells Fargo Credit Facility			3						$	225,000					$	225,000
JPM Credit Facility			3						320,000						320,000
JPM Revolver Facility			3						231,876						231,876
2026 Notes			3						297,469						264,438
2024 Notes			3						99,534						93,706
2023 Notes			3						59,973						59,399
									$	1,233,852					$	1,194,419

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.

The Company is operated by a person who has claimed an exclusion from the definition of the "commodity pool operator" under the Commodity Exchange Act, and, therefore, who is not subject to registration or regulation as a pool operator under such Act.

Note 7 — Commitments and Contingencies

Commitments

In the ordinary course of business, the Company may enter into future funding commitments. As of March 31, 2023, the Company had unfunded commitments on delayed draw term loans of $103.3 million, unfunded commitments on revolver term loans of $113.3 million, and unfunded commitments on term loans of $0.4 million. As of December 31, 2022, the Company had unfunded commitments on delayed draw term loans of $128.8 million, unfunded commitments on revolver term loans of $121.4 million, unfunded equity capital discretionary commitments of $11.1 million, and unfunded commitments on term loans of $0.4 million. The Company maintains sufficient cash on hand and available borrowing capacity to fund such unfunded commitments.

64

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

As of March 31, 2023, the Company's unfunded commitments consisted of the following:

March 31, 2023

Portfolio Company Name

Investment Type

Commitment Type

Total Commitment

Remaining Commitment

ADCS Clinics Intermediate Holdings, LLC

Senior Secured First Lien Debt

Delayed draw term loan

$

3,576

$

789

ADCS Clinics Intermediate Holdings, LLC

Senior Secured First Lien Debt

Delayed draw term loan

2,951

2,951

ADCS Clinics Intermediate Holdings, LLC

Senior Secured First Lien Debt

Revolver term loan

1,264

1,264

Alera Group Intermediate Holdings, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

11,771

2,392

Arch Global Precision, LLC

Senior Secured First Lien Debt

Revolver term loan

1,008

832

Arctic Holdco, LLC

Senior Secured First Lien Debt

Revolver term loan

4,574

3,659

Armada Parent, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

4,506

2,259

Armada Parent, Inc.

Senior Secured First Lien Debt

Revolver term loan

5,420

5,420

Avalara, Inc.

Senior Secured First Lien Debt

Revolver term loan

4,030

4,030

Aventine Holdings, LLC

Senior Secured First Lien Debt

Delayed draw term loan

10,486

805

BCPE Oceandrive Buyer, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

11,404

9,682

BCPE Oceandrive Buyer, Inc.

Senior Secured First Lien Debt

Revolver term loan

3,425

799

Capstone Logistics

Senior Secured First Lien Debt

Revolver term loan

1,804

1,804

Communication Technology Intermediate, LLC

Senior Secured First Lien Debt

Revolver term loan

2,363

1,528

CRS-SPV, Inc.

Senior Secured First Lien Debt

Revolver term loan

224

162

Dynagrid Holdings, LLC

Senior Secured First Lien Debt

Revolver term loan

2,262

1,131

Eliassen Group, LLC

Senior Secured First Lien Debt

Delayed draw term loan

2,931

2,493

Faraday Buyer, LLC

Senior Secured First Lien Debt

Delayed draw term loan

2,551

2,551

FGT Purchaser, LLC

Senior Secured First Lien Debt

Revolver term loan

2,144

1,308

Galway Borrower, LLC

Senior Secured First Lien Debt

Revolver term loan

1,894

1,487

Galway Borrower, LLC

Senior Secured First Lien Debt

Delayed draw term loan

275

275

Geosyntec Consultants, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

13,000

10,985

Geosyntec Consultants, Inc.

Senior Secured First Lien Debt

Revolver term loan

4,769

3,902

Gogo Intermediate Holdings, LLC

Senior Secured First Lien Debt

Revolver term loan

1,053

1,053

Higginbotham Insurance Agency, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

6,836

2,451

ICR Operations, LLC

Senior Secured First Lien Debt

Revolver term loan

6,178

4,633

Ideal Tridon Holdings, Inc.

Senior Secured First Lien Debt

Revolver term loan

2,810

923

IG Investments Holdings, LLC

Senior Secured First Lien Debt

Revolver term loan

1,390

1,390

Indigo Buyer, Inc.

Senior Secured First Lien Debt

Revolver term loan

3,630

3,025

Integrated Efficiency Solutions, Inc.

Senior Secured First Lien Debt

Revolver term loan

600

600

Integrated Global Services, Inc.

Senior Secured First Lien Debt

Revolver term loan

2,028

2,028

IQN Holding Corp.

Senior Secured First Lien Debt

Delayed draw term loan

2,349

2,349

IQN Holding Corp.

Senior Secured First Lien Debt

Revolver term loan

1,017

1,017

Knowledge Pro Buyer, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

5,049

2,733

Knowledge Pro Buyer, Inc.

Senior Secured First Lien Debt

Revolver term loan

2,531

1,620

Manna Pro Products, LLC

Senior Secured First Lien Debt

Revolver term loan

2,706

744

McDonald Worley, P.C.

Senior Secured First Lien Debt

Term loan

15,491

414

Medical Management Resource Group, LLC

Senior Secured First Lien Debt

Revolver term loan

1,326

796

Midwest Can Company, LLC

Senior Secured First Lien Debt

Revolver term loan

2,019

2,019

Miller Environmental Group, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

1,131

1,131

Miller Environmental Group, Inc.

Senior Secured First Lien Debt

Revolver term loan

1,324

1,324

Mirra-Primeaccess Holdings, LLC

Senior Secured First Lien Debt

Revolver term loan

7,827

4,892

Monumental RSN, LLC

Senior Secured First Lien Debt

Revolver term loan

3,238

3,238

Norvax, LLC

Senior Secured First Lien Debt

Revolver term loan

1,152

1,152

Odessa Technologies, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

2,676

2,676

Odessa Technologies, Inc.

Senior Secured First Lien Debt

Revolver term loan

3,747

3,747

ORG GC Holdings, LLC

Senior Secured First Lien Debt

Delayed draw term loan

584

584

Pie Buyer, Inc.

Senior Secured First Lien Debt

Revolver term loan

1,840

1,257

Pie Buyer, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

7,213

7,213

Pluralsight, LLC

Senior Secured First Lien Debt

Revolver term loan

1,602

801

65

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

Portfolio Company Name						Investment Type						Commitment Type						Total Commitment						Remaining Commitment
Point Broadband Acquisition, LLC						Senior Secured First Lien Debt						Delayed draw term loan						$	8,044					$	967
Post Road Equipment Finance, LLC						Subordinated Debt						Delayed draw term loan						24,000						7,543
Premier Global Services, Inc.						Senior Secured First Lien Debt						Revolver term loan						1,042						73
Questex, Inc.						Senior Secured First Lien Debt						Revolver term loan						2,584						2,584
Reddy Ice Corp.						Senior Secured First Lien Debt						Revolver term loan						1,762						1,068
Relativity Oda, LLC						Senior Secured First Lien Debt						Revolver term loan						464						464
REP TEC Intermediate Holdings, Inc.						Senior Secured First Lien Debt						Revolver term loan						1,354						835
Roadsafe Holdings, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						10,123						1,683
RSC Acquisition, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						2,659						2,392
Saturn SHC Buyer Holdings, Inc.						Senior Secured First Lien Debt						Revolver term loan						8,886						8,886
SCIH Salt Holdings, Inc.						Senior Secured First Lien Debt						Revolver term loan						3,746						3,746
Sherlock Buyer Corp.						Senior Secured First Lien Debt						Delayed draw term loan						3,209						3,209
Sherlock Buyer Corp.						Senior Secured First Lien Debt						Revolver term loan						1,284						1,284
Simplifi Holdings, Inc.						Senior Secured First Lien Debt						Revolver term loan						3,782						1,891
St. Croix Hospice Acquisition Corp.						Senior Secured First Lien Debt						Revolver term loan						2,256						2,256
Subsea Global Solutions, LLC						Senior Secured First Lien Debt						Revolver term loan						963						0
SunMed Group Holdings, LLC						Senior Secured First Lien Debt						Revolver term loan						601						337
The NPD Group, LP						Senior Secured First Lien Debt						Revolver term loan						1,922						1,653
Trinity Air Consultants Holdings Corp.						Senior Secured First Lien Debt						Delayed draw term loan						6,974						3,138
Trinity Air Consultants Holdings Corp.						Senior Secured First Lien Debt						Revolver term loan						1,993						1,993
Triple Lift, Inc.						Senior Secured First Lien Debt						Revolver term loan						3,300						2,035
University of St. Augustine Acquisition Corp.						Senior Secured First Lien Debt						Revolver term loan						2,615						2,615
US Oral Surgery Management Holdco, LLC						Senior Secured First Lien Debt						Delayed draw term loan						4,202						2,931
US Oral Surgery Management Holdco, LLC						Senior Secured First Lien Debt						Revolver term loan						1,167						1,167
US Salt Investors, LLC						Senior Secured First Lien Debt						Revolver term loan						2,169						2,169
Victors CCC Buyer, LLC						Senior Secured First Lien Debt						Delayed draw term loan						4,391						4,391
Victors CCC Buyer, LLC						Senior Secured First Lien Debt						Revolver term loan						3,179						3,179
West Coast Dental Services, Inc.						Senior Secured First Lien Debt						Revolver term loan						2,547						2,207
West Coast Dental Services, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						3,396						3,396
Westwood Professional Services, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						3,023						2,016
Westwood Professional Services, Inc.						Senior Secured First Lien Debt						Revolver term loan						378						378
WHCG Purchaser III, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						13,639						6,579
WHCG Purchaser III, Inc.						Senior Secured First Lien Debt						Revolver term loan						4,224						11
WIN Holdings III Corp.						Senior Secured First Lien Debt						Revolver term loan						4,448						4,448
Zendesk, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						10,700						10,700
Zendesk, Inc.						Senior Secured First Lien Debt						Revolver term loan						4,406						4,406
Total																		$	343,411					$	216,948

66

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

As of December 31, 2022, the Company's unfunded commitments consisted of the following:

December 31, 2022

Portfolio Company Name

Investment Type

Commitment Type

Total Commitment

Remaining Commitment

ADCS Clinics Intermediate Holdings, LLC

Senior Secured First Lien Debt

Delayed draw term loan

$

3,583

$

789

ADCS Clinics Intermediate Holdings, LLC

Senior Secured First Lien Debt

Delayed draw term loan

2,951

2,951

ADCS Clinics Intermediate Holdings, LLC

Senior Secured First Lien Debt

Revolver term loan

1,264

1,264

Alera Group Intermediate Holdings, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

11,795

5,197

Arch Global Precision, LLC

Senior Secured First Lien Debt

Revolver term loan

1,008

1,008

Arctic Holdco, LLC

Senior Secured First Lien Debt

Revolver term loan

4,574

2,135

Armada Parent, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

4,512

2,259

Armada Parent, Inc.

Senior Secured First Lien Debt

Revolver term loan

5,420

5,420

Avalara, Inc.

Senior Secured First Lien Debt

Revolver term loan

4,030

4,030

Aventine Holdings, LLC

Senior Secured First Lien Debt

Delayed draw term loan

10,389

805

BCPE Oceandrive Buyer, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

11,409

9,682

Capstone Logistics

Senior Secured First Lien Debt

Revolver term loan

1,804

1,804

Communication Technology Intermediate, LLC

Senior Secured First Lien Debt

Revolver term loan

2,363

2,158

CRS-SPV, Inc.

Senior Secured First Lien Debt

Revolver term loan

224

162

Dynagrid Holdings, LLC

Senior Secured First Lien Debt

Revolver term loan

2,262

2,262

Eliassen Group, LLC

Senior Secured First Lien Debt

Delayed draw term loan

2,932

2,493

Faraday Buyer, LLC

Senior Secured First Lien Debt

Delayed draw term loan

2,551

2,551

FGT Purchaser, LLC

Senior Secured First Lien Debt

Revolver term loan

2,144

1,329

Galway Borrower, LLC

Senior Secured First Lien Debt

Delayed draw term loan

275

275

Galway Borrower, LLC

Senior Secured First Lien Debt

Revolver term loan

1,894

1,894

Geosyntec Consultants, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

13,005

13,005

Geosyntec Consultants, Inc.

Senior Secured First Lien Debt

Revolver term loan

4,769

4,769

Gogo Intermediate Holdings, LLC

Senior Secured First Lien Debt

Revolver term loan

1,053

1,053

Higginbotham Insurance Agency, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

6,847

3,937

Hospice Care Buyer, Inc.

Senior Secured First Lien Debt

Revolver term loan

2,775

872

ICR Operations, LLC

Senior Secured First Lien Debt

Revolver term loan

6,178

4,633

Ideal Tridon Holdings, Inc.

Senior Secured First Lien Debt

Revolver term loan

2,810

1,244

IG Investments Holdings, LLC

Senior Secured First Lien Debt

Revolver term loan

1,390

834

Indigo Buyer, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

9,078

9,078

Indigo Buyer, Inc.

Senior Secured First Lien Debt

Revolver term loan

3,630

3,025

Integrated Efficiency Solutions, Inc.

Senior Secured First Lien Debt

Revolver term loan

600

600

Integrated Global Services, Inc.

Senior Secured First Lien Debt

Revolver term loan

2,028

2,028

IQN Holding Corp.

Senior Secured First Lien Debt

Delayed draw term loan

2,540

2,349

IQN Holding Corp.

Senior Secured First Lien Debt

Revolver term loan

1,017

1,017

Knowledge Pro Buyer, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

5,055

2,733

Knowledge Pro Buyer, Inc.

Senior Secured First Lien Debt

Revolver term loan

2,531

2,531

Manna Pro Products, LLC

Senior Secured First Lien Debt

Revolver term loan

2,706

744

McDonald Worley, P.C.

Senior Secured First Lien Debt

Term loan

15,491

414

Medical Management Resource Group, LLC

Senior Secured First Lien Debt

Revolver term loan

1,326

1,326

Midwest Can Company, LLC

Senior Secured First Lien Debt

Revolver term loan

2,019

2,019

Miller Environmental Group, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

1,131

1,131

Miller Environmental Group, Inc.

Senior Secured First Lien Debt

Revolver term loan

1,324

1,324

Mirra-Primeaccess Holdings, LLC

Senior Secured First Lien Debt

Revolver term loan

7,827

4,892

Monumental RSN, LLC

Senior Secured First Lien Debt

Revolver term loan

3,238

3,238

Muth Mirror Systems, LLC

Senior Secured First Lien Debt

Revolver term loan

1,300

650

Norvax, LLC

Senior Secured First Lien Debt

Revolver term loan

1,152

1,152

Odessa Technologies, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

2,676

2,676

67

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

Portfolio Company Name						Investment Type						Commitment Type						Total Commitment						Remaining Commitment
Odessa Technologies, Inc.						Senior Secured First Lien Debt						Revolver term loan						$	3,747					$	3,747
ORG GC Holdings, LLC						Senior Secured First Lien Debt						Delayed draw term loan						584						584
Pie Buyer, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						7,213						7,213
Pie Buyer, Inc.						Senior Secured First Lien Debt						Revolver term loan						1,840						1,380
Pluralsight, LLC						Senior Secured First Lien Debt						Revolver term loan						1,602						801
Point Broadband Acquisition, LLC						Senior Secured First Lien Debt						Delayed draw term loan						8,054						4,244
Post Road Equipment Finance, LLC						Subordinated Debt						Delayed draw term loan						24,000						8,914
Premier Global Services, Inc.						Senior Secured First Lien Debt						Revolver term loan						1,042						73
Questex, Inc.						Senior Secured First Lien Debt						Revolver term loan						2,584						2,584
Reddy Ice Corp.						Senior Secured First Lien Debt						Revolver term loan						1,762						1,762
Relativity Oda, LLC						Senior Secured First Lien Debt						Revolver term loan						464						464
REP TEC Intermediate Holdings, Inc.						Senior Secured First Lien Debt						Revolver term loan						1,354						835
Roadsafe Holdings, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						10,140						3,343
RSC Acquisition, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						5,069						3,585
Saturn SHC Buyer Holdings, Inc.						Senior Secured First Lien Debt						Revolver term loan						8,886						8,886
SCIH Salt Holdings, Inc.						Senior Secured First Lien Debt						Revolver term loan						3,746						2,623
Sherlock Buyer Corp.						Senior Secured First Lien Debt						Delayed draw term loan						3,209						3,209
Sherlock Buyer Corp.						Senior Secured First Lien Debt						Revolver term loan						1,284						1,284
Simplifi Holdings, Inc.						Senior Secured First Lien Debt						Revolver term loan						3,782						3,782
St. Croix Hospice Acquisition Corp.						Senior Secured First Lien Debt						Revolver term loan						2,256						2,256
Subsea Global Solutions, LLC						Senior Secured First Lien Debt						Revolver term loan						963						58
SunMed Group Holdings, LLC						Senior Secured First Lien Debt						Revolver term loan						601						313
Tap Rock Resources, LLC (1)						Equity/Other						Equity						29,470						11,114
The NPD Group, LP						Senior Secured First Lien Debt						Revolver term loan						1,922						1,691
Trinity Air Consultants Holdings Corp.						Senior Secured First Lien Debt						Delayed draw term loan						6,974						3,138
Trinity Air Consultants Holdings Corp.						Senior Secured First Lien Debt						Revolver term loan						1,993						1,993
Triple Lift, Inc.						Senior Secured First Lien Debt						Revolver term loan						3,300						2,035
University of St. Augustine Acquisition Corp.						Senior Secured First Lien Debt						Revolver term loan						2,615						2,615
US Oral Surgery Management Holdco, LLC						Senior Secured First Lien Debt						Delayed draw term loan						4,202						4,202
US Oral Surgery Management Holdco, LLC						Senior Secured First Lien Debt						Delayed draw term loan						4,821						1,296
US Oral Surgery Management Holdco, LLC						Senior Secured First Lien Debt						Revolver term loan						1,167						1,167
US Salt Investors, LLC						Senior Secured First Lien Debt						Revolver term loan						2,169						2,169
Victors CCC Buyer, LLC						Senior Secured First Lien Debt						Delayed draw term loan						4,391						4,391
Victors CCC Buyer, LLC						Senior Secured First Lien Debt						Revolver term loan						3,179						3,179
West Coast Dental Services, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						3,396						3,396
West Coast Dental Services, Inc.						Senior Secured First Lien Debt						Revolver term loan						2,547						2,292
Westwood Professional Services, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						3,023						2,016
Westwood Professional Services, Inc.						Senior Secured First Lien Debt						Revolver term loan						378						378
WHCG Purchaser III, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						13,657						6,579
WHCG Purchaser III, Inc.						Senior Secured First Lien Debt						Revolver term loan						4,224						2,798
WIN Holdings III Corp.						Senior Secured First Lien Debt						Revolver term loan						4,448						4,448
Zendesk, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						10,700						10,700
Zendesk, Inc.						Senior Secured First Lien Debt						Revolver term loan						4,406						4,406
Total																		$	390,044					$	261,685

_____________

68

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

(1) The commitment related to this investment is discretionary.

Litigation and Regulatory Matters

In the ordinary course of business, the Company may become subject to litigation, claims, and regulatory matters. The Company has no knowledge of material legal or regulatory proceedings pending or known to be contemplated against the Company at this time.

Indemnifications

In the ordinary course of its business, the Company may enter into contracts or agreements that contain indemnifications or warranties. Future events could occur that lead to the execution of these provisions against the Company. Based on its history and experience, management feels that the likelihood of such an event is remote.

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, 2023, the Company issued 268.5 million shares of common stock for gross proceeds of $2.6 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. The Company suspended the DRIP from March 29, 2020 through June 26, 2020. While the DRIP was suspended, participants and all other holders of the Company's common stock received distributions paid by the Company in cash. From inception of the Company's DRIP plan to March 31, 2023, the Company had repurchased 37.4 million shares of common stock through its share repurchase program for payments of $308.4 million. As of December 31, 2022, the Company had repurchased 34.0 million shares of common stock for payments of $282.8 million. Amounts include additional shares tendered for death and disability as permitted.

On April 1, 2022, April 12, 2022 and May 13, 2022, the Company entered into stock purchase agreements with certain investors (collectively, the “Purchase Agreements”) and associated subscription agreements (collectively, the “Subscription Agreements”), totaling $234.8 million, for the sale of the Company’s common stock at the net asset value of each drawdown date. Investors are required to make capital contributions to purchase the Company’s common stock each time the Company delivers a drawdown notice in an aggregate amount not to exceed their respective capital commitments. All purchases will generally be made subject to the terms and conditions set forth in the Purchase Agreements and Subscription Agreements, at a per-share price as determined by the Company’s Board, which price will be determined prior to the issuance of the Company’s common stock and in accordance with the limitations under Section 23 of the 1940 Act. As of March 31, 2023, the Company has called $234.8 million of capital commitments.

In connection with the Purchase Agreements, the Adviser has sold and will sell additional shares of the Company to such investors at a discounted price or contribute other consideration in connection with each drawdown. The Company is not obligated to reimburse the Adviser for the shares that were sold at a discounted price or the other consideration that was provided by the Adviser.

    

69

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

The following table reflects the common stock activity for the three months ended March 31, 2023:

						Shares						Value
Shares Sold						4,928,566						$	36,324
Shares Issued through DRIP						936,348						6,816
Share Repurchases						(3,472,698)						(25,628)
						2,392,216						$	17,512

The following table reflects the common stock activity for the three months ended March 31, 2022:

						Shares						Value
Shares Sold						—						$	—
Shares Issued through DRIP						908,625						6,806
Share Repurchases						(3,091,177)						(23,065)
						(2,182,552)						$	(16,259)

The following table reflects the stockholders' equity activity For the three months ended March 31, 2023:

			Common stock - shares						Common stock - par						Additional paid in capital						Total distributable earnings (loss)						Total Stockholders' Equity
Balance as of December 31, 2022			228,658,723						$	229					$	2,124,264					$	(459,036)					$	1,665,457
Net investment income			—						—						—						38,343						38,343
Net realized loss from investment transactions			—						—						—						(1,996)						(1,996)
Net change in unrealized depreciation on investments and foreign exchange currency contracts, net of change in deferred taxes			—						—						—						(3,360)						(3,360)
Issuance of common stock, net of issuance costs			4,928,566						4						36,320						—						36,324
Repurchases			(3,472,698)						(3)						(25,625)						—						(25,628)
Distributions to stockholders			—						—						—						(34,517)						(34,517)
Reinvested dividends			936,348						1						6,815						—						6,816
Balance as of March 31, 2023			231,050,939						$	231					$	2,141,774					$	(460,566)					$	1,681,439

The following table reflects the stockholders' equity activity for the three months ended March 31, 2022:

			Common stock - shares						Common stock - par						Additional paid in capital						Total distributable earnings (loss)												Total Stockholders' Equity
Balance as of December 31, 2021			201,610,757						$	202					$	1,913,365					$	(404,075)											$	1,509,492
Net investment income			—						—						—						29,026												29,026
Net realized gain from investment transactions			—						—						—						3,444												3,444
Net change in unrealized appreciation on investments and foreign exchange currency contracts, net of change in deferred taxes			—						—						—						2,457												2,457
Repurchases			(3,091,177)						(3)						(23,062)						—												(23,065)
Distributions to stockholders			—						—						—						(29,778)												(29,778)
Reinvested dividends			908,625						—						6,806						—												6,806
Balance as of March 31, 2022			199,428,205						$	199					$	1,897,109					$	(398,926)											$	1,498,382

70

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

Note 10 — Capital

Investor Commitments

As of March 31, 2023 the Company had $234.8 million in total capital commitments, which were fully funded, in connection with the Purchase Agreements and Subscription Agreements (as defined in Note 9). As of December 31, 2022, the Company had $234.8 million in total capital commitments, of which $36.3 million was unfunded, in connection with the Purchase Agreements and Subscription Agreements (as defined in Note 9).

Capital Drawdowns

The following table summarizes the total shares issued and proceeds received, net of issuance costs, related to capital drawdowns of Common Stock in connection with the Purchase Agreements and Subscription Agreements for the three months ended March 31, 2023:

Share Issue Date						Shares Issued						Net Proceeds Received
For the three months ended March 31, 2023
February 7, 2023						4,928,566						$	36,324
Total Capital Drawdowns						4,928,566						$	36,324

There were no shares issued or proceeds received related to capital drawdowns of Common Stock in connection with

the Purchase Agreements and Subscription Agreements for the three months ended March 31, 2022.

The issuances of Common Stock described above were exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), pursuant to Section 4(a)(2) thereof and Regulation D thereunder. The Company relied, in part, upon representations from investors in the relevant Subscription Agreements that each investor is an "accredited investor," as defined in Regulation D under the Securities Act.

Note 11 — Share Repurchase Program

The Company intends to conduct 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.

On June 26, 2020, the Company's Board of Directors amended the Company's SRP. The Company intends to conduct tender offers on an annual basis, instead of on a semi-annual basis as was done previously. The Company intends to continue to limit the number of shares to be repurchased in any calendar year to the lesser of (i) 10% of the weighted average number of shares outstanding in the prior calendar year or (ii) 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 the relevant redemption period. 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 eleven most recent tender offers were oversubscribed.

71

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

Offer Date						Repurchase Date						Shares Tendered						Shares Repurchased						Repurchase Price Per Share						Aggregate Consideration for Repurchased Shares (in thousands)
December 14, 2021						February 24, 2022						45,067,174						2,927,837						$	7.46					$	21,841.64
December 14, 2022						February 24, 2023						45,205,567						3,472,698						$	7.38					$	25,628.49

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

Note 12 — 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 for the three months ended March 31, 2023 and 2022.

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, 2023 and 2022.

									For the three months ended March 31,
															2023						2022
Basic and diluted
Net increase in net assets resulting from operations															$	32,987					$	34,927
Weighted average shares outstanding															230,155,576						199,948,106
Net increase in net assets resulting from operations per share															$	0.14					$	0.17

Note 13 — Distributions

The following table reflects the distributions declared on shares of the Company’s Common Stock for the three months ended March 31, 2023:    

Date Declared

Record Date

Payment Date

Amount Per Share

For the Three Months Ended March 31, 2023

March 8, 2023

March 31, 2023

April 3, 2023

$

0.13

March 8, 2023 (special)

March 31, 2023

April 3, 2023

$

0.02

The following table reflects the distributions declared on shares of the Company’s Common Stock for the three months ended March 31, 2022:

Date Declared

Record Date

Payment Date

Amount Per Share

For the Three Months Ended March 31, 2022

March 10, 2022

March 31, 2022

April 5, 2022

$

0.13

March 10, 2022 (special)

March 31, 2022

April 5, 2022

$

0.02

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 quarter using record and declaration dates. The distributions are payable by the fifth day following each record date.

As of March 31, 2023 and December 31, 2022, the Company had accrued $27.7 million and $27.3 million, respectively, in stockholder distributions that were unpaid.

72

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

Note 14 — Income Tax Information and Distributions to Stockholders

    The Company has elected to be treated for federal income tax purposes as a RIC under the Code. Generally, a RIC is exempt from federal income taxes if it meets certain quarterly asset diversification requirements, annual income tests, and distributes to stockholders its ‘‘investment company taxable income,’’ as defined in the Code, each taxable year. Distributions declared prior to the filing of the previous year's tax return and paid up to one year after the previous tax year can be carried back to the prior tax year for determining the distributions paid in such tax year. The Company intends to make sufficient distributions to maintain its RIC status each year. The Company may also be subject to federal excise taxes of 4%.

    A RIC is limited in its ability to deduct expenses in excess of its “investment company taxable income” (which is, generally, ordinary income plus net realized short-term capital gains in excess of net realized long-term capital losses). If the Company's expenses in a given taxable year exceed gross taxable income (e.g., as the result of large amounts of equity-based compensation), it would incur a net operating loss for that year. However, a RIC is not permitted to carry forward net operating losses to subsequent taxable years and such net operating losses do not pass through to the RIC’s stockholders. In addition, deductible expenses can be used only to offset investment company taxable income, not net capital gain. A RIC may not use any net capital losses (that is, realized capital losses in excess of realized capital gains) to offset the RIC’s investment company taxable income, but may carry forward such net capital losses, and use them to offset capital gains indefinitely. Due to these limits on the deductibility of expenses and net capital losses, the Company may for tax purposes have aggregate taxable income for several taxable years that it is required to distribute and that is taxable to stockholders even if such taxable income is greater than the aggregate net income the Company actually earned during those taxable years. Such required distributions may be made from the Company cash assets or by liquidation of investments, if necessary. The Company may realize gains or losses from such liquidations. In the event the Company realizes net capital gains from such transactions, the Company may make a larger capital gain distribution than it would have made 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 current tax year as well as 2022, 2021, 2020 and 2019 federal and state tax returns remain subject to examination by the Internal Revenue Service and state departments of revenue.

    As of March 31, 2023, the Company's domestic subsidiary had a cumulative net operating loss and unrealized gain. As a result, the Company has a deferred tax asset of $10.6 million and a deferred tax liability of $(22.1) million. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred tax assets will not be realized. The future realization of the tax benefits of existing deductible temporary differences or carryforwards ultimately depend on the existence of sufficient taxable income in the carryback (if permitted under the tax law) and carryforward periods. The Company has concluded that future reversal of existing taxable temporary differences is sufficient to support a conclusion that a valuation allowance is not necessary as of March 31, 2023. For the three months ended March 31, 2023, there was no change in the valuation allowance.

As of December 31, 2022, the Company's domestic subsidiary had a cumulative net operating loss and unrealized gain. As a result, the Company had a deferred tax asset of $4.6 million and a deferred tax liability of $(16.0) million. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred tax assets will not be realized. The future realization of the tax benefits of existing deductible temporary differences or carryforwards ultimately depend on the existence of sufficient taxable income in the carryback (if permitted under the tax law) and carryforward periods. The Company concluded that future reversal of existing taxable temporary differences was sufficient to support a conclusion that a valuation allowance was not necessary as of December 31, 2022. For the year ended December 31, 2022, there was a change in the valuation allowance of $2.0 million.

    The deferred tax asset valuation allowance, if applicable, 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.

73

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

Note 15 — Financial Highlights

The following is a schedule of financial highlights for the three months ended March 31, 2023 and 2022:

			For the three months ended March 31,
			2023						2022
Per share data:
Net asset value, beginning of period			$	7.28					$	7.49
Results of operations (1)
Net investment income			0.17						0.15
Net realized and unrealized gain (loss), net of change in deferred taxes			(0.03)						0.02
Net increase in net assets resulting from operations			0.14						0.17
Stockholder distributions (2)
Distributions from net investment income			(0.15)						(0.15)
Net decrease in net assets resulting from stockholder distributions			(0.15)						(0.15)
Other (6)			0.01						—
Net asset value, end of period			$	7.28					$	7.51
Shares outstanding at end of period			231,050,939						199,428,205
Total return (3)			1.97		%				2.36		%
Ratio/Supplemental data:
Total net assets, end of period			$	1,681,439					$	1,498,382
Ratio of net investment income to average net assets (7)			11.04		%				9.30		%
Ratio of total expenses to average net assets (5) (7)			9.14		%				7.90		%
Portfolio turnover rate (4)			1.31		%				2.17		%

______________

(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)    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.

(4)    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.

(5)    Ratio of total expenses to average net assets is calculated using total operating expenses, including income tax expense over average net assets.

(6)    Represents the impact of calculating certain per share amounts based on weighted average shares outstanding during the period and certain per share amounts based on shares outstanding as a of period end.

(7)    Ratios are annualized, except for incentive fees.

74

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

Note 16 – Schedules of Investments and Advances to Affiliates

An affiliated company is generally a portfolio company in which FBLC owns 5% or more of its voting securities. A controlled affiliated company is generally a portfolio company in which FBLC owns more than 25% of its voting securities or has the power to exercise control over its management or policies (including through a management agreement). Transactions related to investments in affiliated and controlled affiliated companies for the three months ended March 31, 2023 were as follows:

Portfolio Company (1)						Type of Asset						Amount of dividends and interest included in income						Beginning Fair Value at December 31, 2022						Gross additions*						Gross reductions**						Realized Gain/(Loss)						Change in Unrealized Gain (Loss) (7)						Fair Value at March 31, 2023
Control Investments
CRS-SPV, Inc. (2) (3) (6)						Equity/Other						$	—					$	1,559					$	—					$	—					$	—					$	—					$	1,559
CRS-SPV, Inc. (2) (6)						Senior Secured First Lien Debt						1						62						—						—						—						—						62
Danish CRJ, Ltd. (2) (3) (6)						Equity/Other						—						—						—						—						—						—						—
FBLC Senior Loan Fund, LLC (2) (4) (6) (8)						Equity/Other						6,767						304,934						—						—						—						—						304,934
Integrated Efficiency Solutions, Inc. (2) (6)						Senior Secured First Lien Debt						1						—						—						—						—						—						—
Integrated Efficiency Solutions, Inc. (2) (6)						Senior Secured First Lien Debt						27						1,421						—						(3)						—						—						1,418
Integrated Efficiency Solutions, Inc. (2) (6)						Senior Secured Second Lien Debt						72						760						73						—						—						(18)						815
Integrated Efficiency Solutions, Inc. (2) (3) (6)						Equity/Other						—						—						—						—						—						—						—
Integrated Efficiency Solutions, Inc. (2) (3) (6)						Equity/Other						—						—						—						—						—						—						—
Internap Corp. (2) (3) (6)						Equity/Other						—						595						—						—						—						(90)						505
Internap Corp. (2) (6)						Senior Secured First Lien Debt						157						4,802						73						(190)						—						8						4,693
Kahala Ireland OpCo Designated Activity Company (2) (6)						Equity/Other						1,790						5,027						—						—						—						(1,790)						3,237
Kahala Ireland OpCo Designated Activity Company (2) (3) (6)						Equity/Other						—						3,250						—						—						—						—						3,250
Kahala US OpCo, LLC (2) (3) (6)						Equity/Other						—						—						—						—						—						—						—
Lakeview Health Holdings, Inc. (2) (6)						Senior Secured First Lien Debt						28						579						28						—						—						—						607
Lakeview Health Holdings, Inc. (2) (6)						Senior Secured First Lien Debt						6						227						—						—						—						—						227
Lakeview Health Holdings, Inc. (2) (6)						Senior Secured First Lien Debt						—						—						65						—						—						—						65
Lakeview Health Holdings, Inc. (2) (6)						Senior Secured First Lien Debt						—						546						—						—						—						17						563
Lakeview Health Holdings, Inc. (2) (3) (6)						Equity/Other						—						—						—						—						—						—						—
MGTF Holdco, LLC (2) (3) (6)						Equity/Other						—						—						—						—						—						—						—
MGTF Radio Company, LLC (2) (6)						Senior Secured First Lien Debt						1,277						40,015						7						(375)						—						50						39,697
ORG GC Holdings, LLC (2) (6)						Senior Secured First Lien Debt						256						9,082						258						—						—						—						9,340
ORG GC Holdings, LLC (2) (6)						Senior Secured Second Lien Debt						185						3,868						187						—						—						(11)						4,044
ORG GC Holdings, LLC (2) (3) (6)						Equity/Other						—						—						—						—						—						—						—
ORG GC Holdings, LLC (2) (3) (6)						Equity/Other						—						—						—						—						—						—						—
Post Road Equipment Finance, LLC (2) (6)						Subordinated Debt						473						15,086						1,371						—						—						—						16,457
Post Road Equipment Finance, LLC (2) (6)						Equity/Other						1,810						81,692						—						—						—						—						81,692
Post Road Equipment Finance, LLC (2) (6)						Subordinated Debt						1,190						38,100						5						—						—						(6)						38,099
Siena Capital Finance, LLC (2) (6)						Subordinated Debt						2,174						77,000						—						(10,000)						6						(6)						67,000
Siena Capital Finance, LLC (2) (6)						Equity/Other						2,762						77,310						—						—						—						—						77,310
WPNT, LLC (2) (3) (6)						Equity/Other						—						—						—						—						—						—						—
Total Control Investments												$	18,976					$	665,915					$	2,067					$	(10,568)					$	6					$	(1,846)					$	655,574
Affiliate Investments
Cirque Du Soleil Holding USA Newco, Inc. (3)						Equity/Other						$	—					$	4,721					$	—					$	—					$	—					$	810					$	5,531

75

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

Portfolio Company (1)						Type of Asset						Amount of dividends and interest included in income						Beginning Fair Value at December 31, 2022						Gross additions*						Gross reductions**						Realized Gain/(Loss)						Change in Unrealized Gain (Loss) (7)						Fair Value at March 31, 2023
Cirque Du Soleil Holding USA Newco, Inc. (3)						Equity/Other						$	—					$	1,311					$	—					$	—					$	—					$	947					$	2,258
First Eagle Greenway Fund II, LLC (3)						Equity/Other						—						360						—						—						—						41						401
Foresight Energy Operating, LLC (3) (6)						Equity/Other						—						3,519						—						—						—						—						3,519
Foresight Energy Operating, LLC (6)						Senior Secured First Lien Debt						34						1,077						—						(3)						—						—						1,074
MCS Acquisition Corp. (3) (6)						Equity/Other						—						357						168						—						—						—						525
MCS Acquisition Corp. (3) (6)						Equity/Other						—						747						—						—						—						—						747
MCS Acquisition Corp. (6)						Senior Secured First Lien Debt						21						772						—						(2)						—						—						770
NewStar Arlington Senior Loan Program, LLC 14-1A FR (6)						Collateralized Securities						191						4,165						4						—						—						12						4,181
NewStar Arlington Senior Loan Program, LLC 14-1A SUB (6)						Collateralized Securities						368						10,278						—						(602)						—						(834)						8,842
Newstar Fairfield Fund CLO, Ltd. 2015-1RA F (6)						Collateralized Securities						286						8,849						78						—						—						301						9,228
Newstar Fairfield Fund CLO, Ltd. 2015-1RA SUB (6)						Collateralized Securities						—						—						—						—						—						—						—
PennantPark Credit Opportunities Fund II, LP (3)						Equity/Other						—						1,162						—						(75)						—						110						1,197
Tap Rock Resources, LLC (6)						Equity/Other						—						596						—						—						—						619						1,215
Tax Defense Network, LLC (6)						Senior Secured First Lien Debt						—						186						—						—						—						5						191
Tax Defense Network, LLC (6)						Senior Secured First Lien Debt						—						4,264						—						—						—						107						4,371
Tax Defense Network, LLC (6)						Senior Secured First Lien Debt						—						1,048						—						—						—						28						1,076
Tax Defense Network, LLC (3) (6)						Equity/Other						—						—						—						—						—						—						—
Tax Defense Network, LLC (3) (6)						Equity/Other						—						—						—						—						—						—						—
Tennenbaum Waterman Fund, LP						Equity/Other						133						8,699						—						—						—						(251)						8,448
Vantage Mobility International, LLC (6)						Senior Secured First Lien Debt						—						—						—						—						—						—						—
Vantage Mobility International, LLC (6)						Senior Secured First Lien Debt						—						—						—						—						—						—						—
Vantage Mobility International, LLC (6)						Senior Secured Second Lien Debt						—						—						—						—						—						—						—
Vantage Mobility International, LLC (6)						Senior Secured Second Lien Debt						—						—						—						—						—						—						—
Vantage Mobility International, LLC (3) (6)						Equity/Other						—						—						—						—						—						—						—
Vantage Mobility International, LLC (3) (6)						Equity/Other						—						—						—						—						—						—						—
Vantage Mobility International, LLC (3) (6)						Equity/Other						—						—						—						—						—						—						—
Whitehorse, Ltd. 2014-1A E (6)						Collateralized Securities						199						6,996						60						—						—						(18)						7,038
Whitehorse, Ltd. 2014-1A Side Letter (6)						Collateralized Securities						—						—						—						—						—						—						—
Whitehorse, Ltd. 2014-1A SUB (6)						Collateralized Securities						—						—						—						—						—						—						—
Total Affiliate Investments												$	1,232					$	59,107					$	310					$	(682)					$	—					$	1,877					$	60,612
Total Control & Affiliate Investments												$	20,208					$	725,022					$	2,377					$	(11,250)					$	6					$	31					$	716,186

______________________________________________________

*    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, 2023.

76

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

(3)Investment is non-income producing at March 31, 2023.

(4)FBLC and CCLF are the members of SLF, a joint venture formed as a Delaware limited liability company that is not consolidated by either member for financial reporting purposes. The members make investments in SLF in the form of LLC equity interests as SLF makes investments, and all portfolio and other material decisions regarding SLF must be submitted to SLF’s board of directors which is comprised of an equal number of members appointed by each of FBLC and CCLF. Because management of SLF is shared equally between us and CCLF, we do not believe we control SLF for purposes of the 1940 Act or otherwise.

(5)Investment no longer held as of March 31, 2023.

(6)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).

(7)Gross of net change in deferred taxes in the amount of $(0.1) million.

(8)The Company's investment falls under the definition of a significant subsidiary, as it exceeded the threshold of at least one of the tests under Rule 4-08(g), or exceeded the threshold of at least one of the tests under Rule 3-09. See Note 3 for summarized financial information.

Dividends and interest for the three months ended March 31, 2023 attributable to Controlled and Affiliated investments no longer held as of March 31, 2023 were $0.0 million.

Realized loss for the three months ended March 31, 2023 attributable to Controlled and Affiliated investments no longer held as of March 31, 2023 was $0.0 million.

Change in unrealized gain for the three months ended March 31, 2023 attributable to Controlled and Affiliated investments no longer held as of March 31, 2023 was $0.0 million.

The following table presents the Schedule of Investments and Advances to Affiliates as of December 31, 2022:

Portfolio Company (1)						Type of Asset						Amount of dividends and interest included in income						Beginning Fair Value at December 31, 2021						Gross additions*						Gross reductions**						Realized Gain/(Loss)						Change in Unrealized Gain (Loss) (7)						Fair Value at December 31, 2022
Control Investments
CRS-SPV, Inc. (2) (3) (6)						Equity/Other						$	—					$	1,266					$	—					$	—					$	—					$	293					$	1,559
CRS-SPV, Inc. (2) (6)						Senior Secured First Lien Debt						4						62						—						—						—						—						62
Danish CRJ, Ltd. (2) (3) (6)						Equity/Other						—						—						—						—						—						—						—
FBLC Senior Loan Fund, LLC (2) (4) (6) (8)						Equity/Other						25,163						304,934						—						—						—						—						304,934
Integrated Efficiency Solutions, Inc. (2) (5)(6)						Senior Secured First Lien Debt						12						131						240						(371)						—						—						—
Integrated Efficiency Solutions, Inc. (2) (6)						Senior Secured First Lien Debt						109						1,436						—						(15)						—						—						1,421
Integrated Efficiency Solutions, Inc. (2) (6)						Senior Secured Second Lien Debt						282						780						282						—						—						(302)						760
Integrated Efficiency Solutions, Inc. (2) (3) (6)						Equity/Other						—						—						—						—						—						—						—
Integrated Efficiency Solutions, Inc. (2) (3) (6)						Equity/Other						—						—						—						—						—						—						—
Internap Corp (2) (3) (6)						Equity/Other						—						—						1,552						—						—						(957)						595
Internap Corp. (2) (6)						Senior Secured First Lien Debt						514						—						5,813						(1,441)						—						430						4,802
Kahala Ireland OpCo Designated Activity Company (2) (6)						Equity/Other						17,904						23,732						—						—						—						(18,705)						5,027
Kahala Ireland OpCo Designated Activity Company (2) (3) (6)						Equity/Other						—						3,250						—						—						—						—						3,250
Kahala US OpCo, LLC (2) (3) (6)						Equity/Other						—						—						—						—						—						—						—
Lakeview Health Holdings, Inc. (2) (6)						Senior Secured First Lien Debt						66						414						165						—						—						—						579
Lakeview Health Holdings, Inc. (2) (6)						Senior Secured First Lien Debt						7						—						227						—						—						—						227

77

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

Portfolio Company (1)						Type of Asset						Amount of dividends and interest included in income						Beginning Fair Value at December 31, 2021						Gross additions*						Gross reductions**						Realized Gain/(Loss)						Change in Unrealized Gain (Loss) (7)						Fair Value at December 31, 2022
Lakeview Health Holdings, Inc. (2) (6)						Senior Secured First Lien Debt						$	64					$	584					$	64					$	—					$	—					$	(102)					$	546
Lakeview Health Holdings, Inc. (2) (3) (6)						Equity/Other						—						—						—						—						—						—						—
MGTF Holdco, LLC (2) (3) (6)						Equity/Other						—						—						—						—						—						—						—
MGTF Radio Company, LLC (2) (6)						Senior Secured First Lien Debt						4,006						42,567						29						(4,324)						4						1,739						40,015
ORG GC Holdings, LLC (2) (6)						Senior Secured First Lien Debt						743						8,343						739						—						—						—						9,082
ORG GC Holdings, LLC (2) (6)						Senior Secured Second Lien Debt						672						3,439						670						—						—						(241)						3,868
ORG GC Holdings, LLC (2) (3) (6)						Equity/Other						—						212						—						—						—						(212)						—
ORG GC Holdings, LLC (2) (3) (6)						Equity/Other						—						—						—						—						—						—						—
Park Ave RE Holdings, LLC (2) (5) (6)						Equity/Other						—						4,461						—						(8,461)						6,838						(2,838)						—
Park Ave RE Holdings, LLC (2) (5) (6)						Subordinated Debt						31						1,537						—						(1,537)						—						—						—
Post Road Equipment Finance, LLC (2) (6)						Subordinated Debt						894						—						15,086						—						—						—						15,086
Post Road Equipment Finance, LLC (2)(4)(6)						Equity/Other						7,159						81,693						—						94						—						(95)						81,692
Post Road Equipment Finance, LLC (2) (6)						Subordinated Debt						3,882						37,964						19						—						—						117						38,100
Siena Capital Finance, LLC (2) (6) (8)						Subordinated Debt						8,906						75,000						16,000						(14,000)						—						—						77,000
Siena Capital Finance, LLC (2) (6) (8)						Equity/Other						9,988						65,609						—						—						—						11,701						77,310
WPNT, LLC (2) (3) (6)						Equity/Other						—						—						—						—						—						—						—
Total Control Investments												$	80,406					$	657,414					$	40,886					$	(30,055)					$	6,842					$	(9,172)					$	665,915
Affiliate Investments
Answers Corp. (3) (5) (6)						Equity/Other						$	—					$	145					$	—					$	(499)					$	(10,144)					$	10,498					$	—
CDS U.S. Intermediate Holdings, Inc. (5)						Senior Secured First Lien Debt						412						5,565						13						(5,543)						16						(51)						—
CDS U.S. Intermediate Holdings, Inc. (5)						Senior Secured Second Lien Debt						1,004						10,262						568						(10,555)						(284)						9						—
CDS U.S. Intermediate Holdings, Inc. (3)						Equity/Other						—						5,442						—						—						—						(721)						4,721
CDS U.S. Intermediate Holdings, Inc. (3)						Equity/Other						—						2,884						—						—						—						(1,573)						1,311
First Eagle Greenway Fund II, LLC (3)						Equity/Other						—						464						—						(72)						—						(32)						360
Foresight Energy Operating, LLC (3) (6)						Equity/Other						—						3,965						—						—						—						(446)						3,519
Foresight Energy Operating, LLC (6)						Senior Secured First Lien Debt						113						1,102						—						(14)						—						(11)						1,077
Internap Corp (3) (6)						Equity/Other						—						1,552						—						(1,552)						—						—						—
Internap Corp. (6)						Senior Secured First Lien Debt						—						5,475						—						(5,475)						—						—						—
Jakks Pacific, Inc. (3) (5)						Equity/Other						(6)						2,412						—						(5,423)						3,037						(26)						—
Jakks Pacific, Inc. (6)						Equity/Other						—						785						28						(813)						—						—						—
MCS Acquisition Corp. (3) (6)						Equity/Other						—						—						357						—						—						—						357
MCS Acquisition Corp. (3) (6)						Equity/Other						—						—						2,431						—						—						(1,684)						747
MCS Acquisition Corp. (6)						Senior Secured First Lien Debt						63						—						780						(8)						—						—						772
NewStar Arlington Senior Loan Program, LLC 14-1A FR (6)						Collateralized Securities						638						4,575						17						—						—						(427)						4,165
NewStar Arlington Senior Loan Program, LLC 14-1A SUB (6)						Collateralized Securities						2,826						17,114						—						(3,508)						—						(3,328)						10,278

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

Portfolio Company (1)						Type of Asset						Amount of dividends and interest included in income						Beginning Fair Value at December 31, 2021						Gross additions*						Gross reductions**						Realized Gain/(Loss)						Change in Unrealized Gain (Loss) (7)						Fair Value at December 31, 2022
Newstar Fairfield Fund CLO, Ltd. 2015-1RA F (6)						Collateralized Securities						$	1,089					$	8,237					$	319					$	—					$	—					$	293					$	8,849
Newstar Fairfield Fund CLO, Ltd. 2015-1RA SUB (6)						Collateralized Securities						—						—						—						—						—						—						—
PennantPark Credit Opportunities Fund II, LP (3)						Equity/Other						—						4,953						—						(3,110)						—						(681)						1,162
Tap Rock Resources, LLC (6)						Equity/Other						557						8,742						—						(8,641)						2,152						(1,657)						596
Tax Defense Network, LLC (6)						Senior Secured First Lien Debt						—						464						—						—						—						(278)						186
Tax Defense Network, LLC (6)						Senior Secured First Lien Debt						—						3,678						—						—						—						586						4,264
Tax Defense Network, LLC (6)						Senior Secured First Lien Debt						—						2,616						—						—						—						(1,568)						1,048
Tax Defense Network, LLC (3) (6)						Equity/Other						—						—						—						—						—						—						—
Tax Defense Network, LLC (3) (6)						Equity/Other						—						—						—						—						—						—						—
Team Waste, LLC (5) (6)						Equity/Other						—						3,073						—						(3,073)						504						(504)						—
Tennenbaum Waterman Fund, LP						Equity/Other						611						9,764						—						—						—						(1,065)						8,699
Vantage Mobility International, LLC (6)						Senior Secured First Lien Debt						9						251						—						—						—						(251)						—
Vantage Mobility International, LLC (6)						Senior Secured First Lien Debt						3						244						—						—						—						(244)						—
Vantage Mobility International, LLC (6)						Senior Secured Second Lien Debt						5						17						—						—						—						(17)						—
Vantage Mobility International, LLC (6)						Senior Secured Second Lien Debt						—						—						—						—						—						—						—
Vantage Mobility International, LLC (3) (6)						Equity/Other						—						—						—						—						—						—						—
Vantage Mobility International, LLC (3) (6)						Equity/Other						—						—						—						—						—						—						—
Vantage Mobility International, LLC (3) (6)						Equity/Other						—						—						—						—						—						—						—
Whitehorse, Ltd. 2014-1A E (6)						Collateralized Securities						568						7,171						176						—						—						(351)						6,996
Whitehorse, Ltd. 2014-1A Side Letter (6)						Collateralized Securities						—						—						—						—						—						—						—
Whitehorse, Ltd. 2014-1A SUB (6)						Collateralized Securities						—						—						—						—						—						—						—
Total Affiliate Investments												$	7,892					$	110,952					$	4,689					$	(48,286)					$	(4,719)					$	(3,529)					$	59,107
Total Control & Affiliate Investments												$	88,298					$	768,366					$	45,575					$	(78,341)					$	2,123					$	(12,701)					$	725,022

_____________________________________________________

*    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, 2022.

(3)Investment is non-income producing at December 31, 2022.

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2023

(Unaudited)

(4)FBLC and CCLF are the members of SLF, a joint venture formed as a Delaware limited liability company that is not consolidated by either member for financial reporting purposes. The members make investments in SLF in the form of LLC equity interests as SLF makes investments, and all portfolio and other material decisions regarding SLF must be submitted to SLF’s board of directors which is comprised of an equal number of members appointed by each of FBLC and CCLF. Because management of SLF is shared equally between us and CCLF, we do not believe we control SLF for purposes of the 1940 Act or otherwise.

(5)Investment no longer held as of December 31, 2022.

(6)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).

(7)Gross of net change in deferred taxes in the amount of $(1.7) million.

(8)The Company's investment falls under the definition of a significant subsidiary, as it exceeded the threshold of at least one of the tests under Rule 3-09. Audited financial statements, as required under Rule 3-09, are attached to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Dividends and interest for the year ended December 31, 2022 attributable to Controlled and Affiliated investments no longer held as of December 31, 2022 were $1.5 million.

Realized loss for the year ended December 31, 2022 attributable to Controlled and Affiliated investments no longer held as of December 31, 2022 was $0.0 million.

Change in unrealized gain for the year ended December 31, 2022 attributable to Controlled and Affiliated investments no longer held as of December 31, 2022 was $7.1 million.

Note 17 – Subsequent Events

The Company has evaluated subsequent events through the filing of this Form 10-Q and has determined that there have been no events that have occurred that would require adjustments to the Company’s disclosures in the consolidated financial statements.

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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 Franklin BSP Lending Corporation (the "Company," "FBLC," "we," or "our") and the notes thereto and other financial information included elsewhere in this Quarterly Report on Form 10-Q. We are externally managed by our adviser, Franklin BSP Lending Adviser, L.L.C. (the “Adviser”).

Forward Looking Statements

This report, and other statements that we may make, may contain forward-looking statements with respect to future financial or business performance, strategies, or expectations. Forward-looking statements are typically identified by words or phrases such as “trend,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “potential,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future conditional verbs such as “will,” “would,” “should,” “could,” “may,” or similar expressions.

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

In addition to factors previously disclosed in our U.S. Securities and Exchange Commission (“SEC”) reports and those identified elsewhere in this report, including the “Risk Factors” section, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance:

•our future operating results;

•changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets, including the effect of rising interest rates and a potential global recession;

•the impact of geopolitical conditions, including revolution, insurgency, terrorism or war, including those arising out of the ongoing conflict between Russia and Ukraine;

•the impact that the discontinuation of LIBOR and the transition to new reference rates could have on the value of our LIBOR-indexed portfolio investments and the cost of borrowing under our credit facilities;

•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 FBLC; and

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

Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Item 1A. Risk Factors” and elsewhere in this Quarterly Report.    

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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.

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 EBITDA of between $25 million and $100 million annually, 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, 2023, 77.1% 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”). Effective April 1, 2022, we have elected to not invest, directly or indirectly, in coal-related companies, or invest in portfolio companies primarily engaged in directly investing in the exploration for, or the production of, coal at the discretion of the Adviser; provided, however, we shall be considered in compliance with this investment restriction if, from this date forward, we do not invest in any portfolio company that has a Global Industry Classification Standard designation of "coal and consumable fuels."

Financial and Operating Highlights

(Dollars in millions, except per share amounts)
At March 31, 2023:
			Investment Portfolio			$	2,900.6
			Net assets			1,681.4
			Debt (net of deferred financing costs)			1,236.8
			Net asset value per share			7.28
Portfolio Activity for the Three Months Ended March 31, 2023:
			Purchases during the period			64.7
			Sales, repayments, and other exits during the period			37.9
			Number of portfolio companies at end of period			148
Operating results for the Three Months Ended March 31, 2023:
			Net investment income per share			0.17
			Distributions declared per share			0.15
			Net increase in net assets resulting from operations per share			0.14
			Net investment income			38.3
			Net realized and unrealized loss, net of change in deferred taxes			(5.4)
			Net increase in net assets resulting from operations			33.0

Portfolio and Investment Activity

During the three months ended March 31, 2023, we made $64.7 million of investments in new and existing portfolio companies and had $37.9 million in aggregate amount of sales and repayments, resulting in a net increase in investments of $26.8 million for the period. The total portfolio of debt investments at fair value consisted of 94.2% bearing variable interest rates and 5.8% bearing fixed interest rates.

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Our portfolio composition, based on fair value at March 31, 2023 was as follows:

			March 31, 2023
			Percentage of Total Portfolio (4)						Weighted Average Current Yield for Total Portfolio (1)
Senior Secured First Lien Debt			70.2		%				11.6		%
Senior Secured Second Lien Debt			6.9						13.6
Subordinated Debt			4.2						12.5
Debt Subtotal			81.3		%				11.8		%
Collateralized Securities (2)			1.0						16.3
Equity/Other (3)			7.2						12.5
FBLC Senior Loan Fund, LLC (3)			10.5						9.0
Total			100.0		%				11.6		%

______________

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

(2) Weighted average current yield for Collateralized Securities is based on the estimation of effective yield to expected maturity for each security as calculated in accordance with Accounting Standards Codification ("ASC") Topic 325-40-35, Beneficial Interests in Securitized Financial Assets (see Note 2 - Summary of Significant Accounting Policies).

(3) Weighted average current yield for Equity/Other may be based on actual or annualized income, where applicable.

(4) As of March 31, 2023, FBLC Senior Loan Fund, LLC's holdings consisted of 91.4% senior secured debt, of which 88.7% represented senior secured first lien debt. As of March 31, 2023, we held investments in Siena Capital Finance, LLC ("Siena") consisting of subordinated debt and equity, which represented 2.3% and 2.7% of our total portfolio, respectively. As of March 31, 2023, we held investments in Post Road Equipment Finance, LLC ("Post Road") consisting of subordinated debt and equity, which represented 1.9% and 2.8% of our portfolio, respectively. The respective businesses of Siena and Post Road primarily involve making senior secured asset-based loans to middle market companies and equipment finance transactions secured by mission-critical equipment of middle market companies, respectively. If the underlying investments of FBLC Senior Loan Fund described above were held by us and we were to treat the investments in Siena and Post Road as senior secured first lien investments, given the underlying businesses of those portfolio companies, then our portfolio composition as of March 31, 2023 would be as follows:

			March 31, 2023
			Percentage of Total Portfolio
Senior Secured First Lien Debt			89.1		%
Senior Secured Second Lien Debt			6.7
Senior Secured - Subtotal			95.8		%
Collateralized Securities			2.7
Equity/Other			1.5
Total			100.0		%

During the year ended December 31, 2022, we made $510.0 million of investments in new and existing portfolio companies and had $396.0 million in aggregate amount of sales and repayments, resulting in net investments of $114.0 million for the period. The total portfolio of debt investments at fair value consisted of 93.5% bearing variable interest rates and 6.5% bearing fixed interest rates.

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Our portfolio composition, based on fair value at December 31, 2022 was as follows:

			December 31, 2022
			Percentage of Total Portfolio (4)						Weighted Average Current Yield for Total Portfolio (1)
Senior Secured First Lien Debt			69.4		%				11.0		%
Senior Secured Second Lien Debt			7.1						12.9
Subordinated Debt			4.7						12.9
Debt Subtotal			81.2		%				11.3		%
Collateralized Securities (2)			1.1						17.2
Equity/Other (3)			7.1						18.1
FBLC Senior Loan Fund, LLC (3)			10.6						9.0
Total			100.0		%				11.6		%

______________

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

(2) Weighted average current yield for Collateralized Securities is based on the estimation of effective yield to expected maturity for each security as calculated in accordance with Accounting Standards Codification ("ASC") Topic 325-40-35, Beneficial Interests in Securitized Financial Assets (see Note 2 - Summary of Significant Accounting Policies).

(3) Weighted average current yield for Equity/Other may be based on actual or annualized income, where applicable.

(4) As of December 31, 2022, FBLC Senior Loan Fund, LLC's holdings consisted of 91.2% senior secured debt, of which 88.1% represented senior secured first lien debt. As of December 31, 2022, we held investments in Siena Capital Finance, LLC ("Siena") consisting of subordinated debt and equity, which represented 2.7% and 2.7% of our total portfolio, respectively. As of December 31, 2022, we held investments in Post Road Equipment Finance, LLC ("Post Road") consisting of subordinated debt and equity, which represented 1.9% and 2.8% of our total portfolio, respectively. The respective businesses of Siena and Post Road primarily involve making senior secured asset-based loans to middle market companies and equipment finance transactions secured by mission-critical equipment of middle market companies, respectively. If the underlying investments of FBLC Senior Loan Fund described above were held by us and we were to treat the investments in Siena and Post Road as senior secured first lien investments, given the underlying businesses of those portfolio companies, then our portfolio composition as of December 31, 2022 would be as follows:

			December 31, 2022
			Percentage of Total Portfolio
Senior Secured First Lien Debt			88.7		%
Senior Secured Second Lien Debt			6.9
Senior Secured - Subtotal			95.6		%
Subordinated Debt			0.1
Debt Subtotal			95.7		%
Collateralized Securities			2.8
Equity/Other			1.5
Total			100.0		%

Portfolio Asset Quality

Our Adviser employs an investment rating system to categorize our investments. In addition to various risk management and monitoring tools, our Adviser grades the credit risk of all debt investments on a scale of 1 to 5 no less frequently than quarterly. This system is intended primarily to reflect the underlying risk of a portfolio debt investment relative to the inherent risk at the time the original debt investment was made (i.e., at the time of acquisition), although it may also take into account under certain circumstances the performance of the portfolio company's business, the collateral coverage of the investment and other relevant factors.

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Loan Rating						Summary Description
1						Debt investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since the time of investment are favorable.
2						Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable. All investments are initially rated a “2”.
3						Performing debt investment requiring closer monitoring. Trends and risk factors show some deterioration.
4						Underperforming debt investment. Some loss of interest or dividend expected, but still expecting a positive return on investment. Trends and risk factors are negative.
5						Underperforming debt investment with expected loss of interest and some principal.

The weighted average risk rating of our investments based on fair value was 2.2 and 2.2 as of March 31, 2023 and December 31, 2022, respectively. As of March 31, 2023, we had 5 portfolio companies on non-accrual with a total amortized cost of $44.4 million and fair value of $8.4 million, which represented 1.5% and 0.3% of the investment portfolio's total amortized cost and fair value, respectively. As of December 31, 2022, we had 5 portfolio companies on non-accrual with a total amortized cost of $44.6 million and fair value of $8.2 million, which represented 1.5%, and 0.3% of the investment portfolio's total 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.

FBLC Senior Loan Fund, LLC

On January 20, 2021, FBLC and Cliffwater Corporate Lending Fund (“CCLF”) formed a joint venture, FBLC Senior Loan Fund, LLC (the “SLF”), that invests primarily in senior secured loans, and to a lesser extent may invest in mezzanine loans, unsecured loans and equity of predominantly private U.S. middle market companies. SLF was formed as a Delaware limited liability company and is not consolidated by FBLC for financial reporting purposes. FBLC provides capital to SLF in the form of LLC equity interests. At formation, FBLC and CCLF owned 87.5% and 12.5%, respectively, of the LLC equity interests of SLF. For both the quarter and year ended, March 31, 2023 and December 31, 2022, FBLC and CCLF owned 79.8% and 20.2%, respectively, of the LLC equity interests of SLF. Profit and loss are allocated based on each members' ownership percentage of the joint venture's net asset value. SLF has an Administrative and Loan Services Agreement with BSP, an affiliate of the Company, pursuant to which BSP provides certain operational and valuation services for SLF's investments; as well as certain agreements with third-party service providers. FBLC and CCLF each appoint two members to SLF's four-person board of members. All material decisions with respect to SLF, including those involving its investment portfolio, require unanimous approval of a quorum of the board of members. Quorum is defined as (i) the presence of two members of the board of members; provided that at least one individual is present that was elected, designated or appointed by each member; (ii) the presence of three members of the board of members; provided that the individual that was elected, designated or appointed by the member with only one individual present shall be entitled to cast two votes on each matter; and (iii) the presence of four members of the board of members; provided that two individuals are present that were elected, designated or appointed by each member.

As part of the initial contribution to SLF, FBLC contributed $751.8 million of assets including $664.2 million of investments and $42.4 million of cash as well as $446.9 million worth of liabilities including the Citi Credit Facility (as defined in Note 5) debt of $344.4 million in exchange for $304.9 million of equity in SLF. As of March 31, 2023 and December 31, 2022, FBLC’s investment in SLF consisted of equity contributions of $304.9 million.

Below is a summary of SLF’s portfolio as of March 31, 2023 and December 31, 2022. A listing of the individual investments in SLF’s portfolio as of such dates can be found in “Note 3 – Fair Value of Investments” in the notes to the accompanying consolidated financial statements (dollars in thousands):

						March 31, 2023						December 31, 2022
						(Unaudited)
Total assets						$	972,174					$	965,671
Total investments (1)						$	867,931					$	855,705
Weighted Average Current Yield for Total Portfolio (2)						10.6		%				10.2		%
Number of Portfolio companies in SLF						162						163
Largest portfolio company investment (1)						$	19,375					$	19,381
Total of five largest portfolio company investments (1)						$	87,457					$	86,158

_____________________

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(1) At fair value

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

Below is certain summarized financial information for SLF as of March 31, 2023 and December 31, 2022 and for the periods ended March 31, 2023 and March 31, 2022 (dollars in thousands):

Selected Statements of Assets and Liabilities Information			March 31,						December 31,
			2023						2022
			(Unaudited)
ASSETS
Investments, at fair value (amortized cost of $929,893 and $923,304, respectively)			$	867,931					$	855,705
Cash and other assets			104,243						109,966
Total assets			$	972,174					$	965,671
LIABILITIES
Revolving credit facilities (net of deferred financing costs of $1,235 and $1,483, respectively)			$	537,815					$	549,067
Secured borrowings			62,744						60,899
Other liabilities			27,904						20,264
Total liabilities			$	628,463					$	630,230
MEMBERS' CAPITAL
Total members' capital			$	343,711					$	335,441
Total liabilities and members' capital			$	972,174					$	965,671

Selected Statements of Operations Information																					For the three months ended March 31,
																					2023						2022
																					(Unaudited)						(Unaudited)
Investment income:
Total investment income																					$	22,572					$	14,429
Operating expenses:
Interest and credit facility financing expenses																					9,755						3,368
Other expenses																					576						634
Total expenses																					10,331						4,002
Net investment income																					12,241						10,427
Realized and unrealized gain (loss):
Net realized and unrealized gain (loss)																					4,539						(13,249)
Net increase (decrease) in members' capital resulting from operations																					$	16,780					$	(2,822)

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RESULTS OF OPERATIONS

Operating results for the three months ended March 31, 2023 and 2022 were as follows (dollars in thousands):

									For the three months ended March 31,
															2023						2022
Total investment income															$	83,290					$	63,776
Total expenses															44,208						32,771
Income tax expense, including excise tax															739						1,979
Net investment income															$	38,343					$	29,026

Investment Income

For the three months ended March 31, 2023, total investment income was $83.3 million and was primarily attributable to interest income from investments in portfolio companies with an average portfolio fair value of $2.9 billion and a weighted average current yield of 11.6%. Included within total investment income was $1.1 million of fee income for the three months ended March 31, 2023. Fee income consists primarily of prepayment and amendment fees. For the three months ended March 31, 2022 total investment income was $63.8 million and was primarily attributable to interest income from investments in portfolio companies with an average portfolio fair value of $2.7 billion and a weighted average current yield of 9.0%. Included within total investment income was $2.0 million of fee income for the three months ended March 31, 2022. Fee income consists primarily of prepayment and amendment fees.

Operating Expenses

The composition of our operating expenses for the three months ended March 31, 2023 and 2022 was as follows (dollars in thousands):

									For the three months ended March 31,
															2023						2022
Management fees															$	11,062					$	10,503
Incentive fee on income															9,586						7,256
Interest and debt fees															20,120						12,284
Professional fees															1,266						853
Other general and administrative															1,728						1,407
Administrative services															198						195
Directors' fees															248						273
Total operating expenses															$	44,208					$	32,771

For the three months ended March 31, 2023 and 2022, we incurred management fees of $11.1 million and $10.5 million, respectively. For the three months ended March 31, 2023 and 2022, we incurred incentive fees on income of $9.6 million and $7.3 million.

For the three months ended March 31, 2023 and 2022, we incurred interest and debt fees of $20.1 million and $12.3 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 our revolving credit facilities and unsecured notes, each as defined herein in the section entitled "Borrowings". The increase in interest and debt fees for the three months ended March 31, 2023 as compared to the same periods in 2022 is primarily the result of higher interest rates.

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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 change in deferred taxes for the three months ended March 31, 2023 and 2022 were as follows (dollars in thousands):

									For the three months ended March 31,
															2023						2022
Net realized gain (loss)
Control investments															$	6					$	1
Affiliate investments															—						112
Non-Affiliate investments															(2,002)						4,907
Net realized gain on foreign currency transactions															—						193
Net realized loss on extinguishment of debt															—						(1,769)
Total net realized gain (loss)															(1,996)						3,444
Net change in unrealized appreciation (depreciation) on investments
Control investments															(1,846)						9,523
Affiliate investments															1,877						1,044
Non-Affiliate investments															(3,322)						(7,800)
Net change in deferred taxes															(69)						229
Total net change in unrealized appreciation (depreciation) on investments, net of change in deferred taxes															(3,360)						2,996
Net change in unrealized depreciation from forward currency exchange contracts															—						(539)
Net realized and unrealized gain (loss)															$	(5,356)					$	5,901

Net realized and unrealized loss on investments and foreign currency transactions, net of change in deferred taxes, resulted in net losses of $5.4 million for the three months ended March 31, 2023 compared to a net gain of $5.9 million for the same period in 2022. We look at net realized gain (loss) and change in unrealized appreciation (depreciation) together, as movement in unrealized appreciation or depreciation can be the result of realizations.

The net realized and unrealized loss for the three months ended March 31, 2023 was primarily driven by unrealized losses on Senior Secured Investments.

The net realized and unrealized gain for the three months ended March 31, 2022 was primarily driven by unrealized gains on Equity Investments.

Changes in Net Assets from Operations

For the three months ended March 31, 2023, we recorded a net increase in net assets resulting from operations of $33.0 million versus a net increase in net assets resulting from operations of $34.9 million for the three months ended March 31, 2022. The decrease from prior year is primarily driven by an increase in unrealized losses on investments. Based on the weighted average shares of common stock outstanding for the three months ended March 31, 2023 and 2022, respectively, our per share net increase in net assets resulting from operations was $0.14 for the three months ended March 31, 2023, versus a net increase in net assets of $0.17 for the three months ended March 31, 2022.

Cash Flows

For the three months ended March 31, 2023, net cash used in operating activities was $1.8 million. This was primarily driven by sales and repayments of investments of $37.9 million and net change in unrealized depreciation of $3.3 million, offset by purchases of investments of $64.7 million. The level of cash flows used in or provided by operating activities is affected by the timing of purchases, redemptions and sales of portfolio investments.

Net cash used in financing activities of $5.1 million during the three months ended March 31, 2023 was primarily driven by payments on debt of $47.5 million, stockholder distributions of $27.3 million and repurchases of common stock of $25.6 million, partially offset by proceeds from issuance of shares of $36.3 million and proceeds from debt of $59.0 million.

For the three months ended March 31, 2022, net cash provided by operating activities was $99.4 million. The level of cash flows used in or provided by operating activities is affected by the timing of purchases, redemptions, and sales of portfolio investments. The increase in cash flows used in operating activities for the three months ended March 31, 2022 was primarily a result of sales and repayments of investments of $137.8 million, offset by purchases of investments of $59.7 million.

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Net cash used in financing activities of $114.1 million during the three months ended March 31, 2022 related to payments on debt of $89.0 million, stockholder distributions of $23.3 million and repurchases of common stock of $21.8 million, partially offset by proceeds from debt of $20.0 million.

Recent Developments

On May 10, 2023, the Company's Board of Directors appointed Colleen Corwell as Chief Compliance Officer of the Company, effective as of the close of business on May 10, 2023, upon the resignation of Guy Talarico from such position. Mr. Talarico's resignation is not a result of any disagreement with the Company on any matter relating to the Company's operations, policies, practices or accounting matters.

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, 2023, we had issued 268.5 million shares of our common stock for gross proceeds of $2.6 billion, including the shares purchased by affiliates and shares issued pursuant to the DRIP. As of March 31, 2023, we had $460.0 million of senior unsecured notes outstanding. As of March 31, 2022, we had issued 233.3 million shares of our common stock for gross proceeds of $2.4 billion, including the shares purchased by affiliates and shares issued pursuant to the DRIP.

Our principal demands for funds in both the short-term and long-term are for portfolio investments, for the payment of operating expenses, distributions to our investors, repurchases under our share repurchase program, and for the payment of principal and interest on our outstanding indebtedness. We may also from time to time enter into other agreements with third parties whereby third parties will contribute to specific investment opportunities. Other potential future sources of capital include proceeds from secured or unsecured financings from banks or other lenders, proceeds from private offerings, proceeds from the sale of investments, and undistributed funds from operations. However, our ability to incur additional debt will be dependent on a number of factors, including our degree of leverage, the value of our unencumbered assets, and borrowing restrictions that may be imposed by lenders.

We intend to conduct 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 an annual basis. We intend to continue to limit the number of shares to be repurchased in any calendar year to the lesser of (i) 10% of the weighted average number of shares outstanding in the prior calendar year or (ii) 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 the relevant redemption period. 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

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 quarter using record and declaration dates. The distributions are payable by the fifth day following each record date.

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The table below shows the components of the distributions we have declared and/or paid during the three months ended March 31, 2023 and 2022 (dollars in thousands).

			For the three months ended March 31,
			2023						2022
Distributions declared			$	34,517					$	29,778
Distributions paid			$	34,110					$	30,059
Portion of distributions paid in cash			$	27,294					$	23,253
Portion of distributions paid in DRIP shares			$	6,816					$	6,806

As of March 31, 2023, we had $27.7 million of distributions accrued and unpaid. As of December 31, 2022, we had $27.3 million of distributions accrued and unpaid.

We may fund our cash distributions to stockholders from any sources of funds available to us, including offering proceeds, borrowings, net investment income from operations, capital gain proceeds from the sale of assets, and non-capital gain proceeds from the sale of assets. We have not established limits on the amount of funds we may use from available sources to make distributions. We may have distributions which could be characterized as a return of capital for tax purposes. During the three months ended March 31, 2023 and 2022, no portion of our distributions was characterized as return of capital for tax purposes. The estimated tax characteristics of our quarterly distributions are reported in our periodic reports with the SEC made available to stockholders. The final tax characteristics of our distributions made in respect of our anticipated fiscal year ending December 31, 2023 will be reported after the end of the calendar year 2023 in our periodic reports with the SEC made available to stockholders. Stockholders should read any written disclosure accompanying a distribution payment carefully and should not assume that the source of any distribution is our ordinary income or gain. Moreover, you should understand that any such distributions were not based on our investment performance and can only be sustained if we achieve positive investment performance in future periods and/or our Adviser continues to make such reimbursements. There can be no assurance that we will achieve the performance necessary to sustain our distributions or that we will be able to pay distributions at all.

The following table sets forth the distributions declared during the three months ended March 31, 2023 and 2022 (dollars in thousands):

			For the three months ended March 31,
			2023						2022
Distributions			$	34,517					$	29,778
Total distributions			$	34,517					$	29,778

Private Placement of Shares

On April 1, 2022, April 12, 2022 and May 13, 2022, we entered into stock purchase agreements with certain investors (collectively, the “Purchase Agreements”) and associated subscription agreements (collectively, the “Subscription Agreements”), totaling $234.8 million, for the sale of our common stock at the net asset value of each drawdown date. Investors are required to make capital contributions to purchase our common stock each time we deliver a drawdown notice in an aggregate amount not to exceed their respective capital commitments. All purchases will generally be made subject to the terms and conditions set forth in the Purchase Agreements and Subscription Agreements, at a per-share price as determined by our Board, which price will be determined prior to the issuance of our common stock and in accordance with the limitations under Section 23 of the 1940 Act. As of March 31, 2023, we have fully called $234.8 million of capital commitments.

In connection with the Purchase Agreements, the Adviser has sold and will sell additional shares of the Company to such investors at a discounted price or contribute other consideration in connection with each drawdown. The Company is not obligated to reimburse the Adviser for the shares that were sold at a discounted price or the other consideration that was provided by the Adviser.

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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

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. The Board renewed the Investment Advisory Agreement on January 30, 2023.

Administration Agreement

On November 1, 2016, we entered into the Administration Agreement with BSP, pursuant to which BSP provides us with office facilities and administrative services. The Administration Agreement may be terminated by either party without penalty upon not less than 60 days’ written notice to the other. For the three months ended March 31, 2023 and 2022, the Company incurred $0.4 million and $0.3 million, respectively, in administrative service fees under the Administration Agreement.

Co-Investment Relief

The 1940 Act generally prohibits BDCs from entering into negotiated co-investments with affiliates absent an order from the SEC permitting the BDC to do so. The SEC staff has granted us exemptive relief that allows it to enter into certain negotiated co-investment transactions alongside other funds managed by the Adviser or its affiliates (“Affiliated Funds”) in a manner consistent with our investment objective, positions, policies, strategies, and restrictions as well as regulatory requirements and other pertinent factors, subject to compliance with certain conditions (the “Order”). Pursuant to the Order, we are permitted to co-invest with our affiliates if a “required majority” (as defined in Section 57(o) of the 1940 Act) of our eligible directors make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transactions, including the consideration to be paid, are reasonable and fair to us and our stockholders and do not involve overreaching in respect of us or our stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of our stockholders and is consistent with our investment objective and strategies.

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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 JPM and have $460.0 million in aggregate principal of unsecured notes outstanding.

Wells Fargo Credit Facility

On August 28, 2020, the Company entered into a $300.0 million revolving credit facility with the Company, as collateral manager, Funding I, as borrower, the lenders party thereto, Wells Fargo, as administrative agent, and U.S. Bank, as collateral agent and collateral custodian (the “Wells Fargo Credit Facility”).

The Wells Fargo Credit Facility provides for borrowings through August 28, 2023, and any amounts borrowed under the Wells Fargo Credit Facility will mature on August 28, 2025. Prior to the Second Amendment (defined below), the Wells Fargo Credit Facility was priced at three-month LIBOR, with a LIBOR floor of zero, plus a spread calculated based upon the composition of loans in the collateral pool, which will not exceed 2.75% per annum. Interest is payable quarterly in arrears. Funding I will be subject to a non-usage fee to the extent the commitments available under the Wells Fargo Credit Facility have not been borrowed. The non-usage fee per annum is 0.50% for the first 25% of the unused balance and up to 2.0% for the remaining unused balance. Funding I paid a structuring fee and incurred other customary costs and expenses in connection with the Wells Fargo Credit Facility. Pursuant to an amendment entered into on April 6, 2021, the commitment fee for any unused portion of the Wells Fargo Credit Facility was temporarily reduced until September 30, 2021 (the "First Amendment"). Additionally, pursuant to the First Amendment, the maximum spread was reduced from 2.75% to 2.50% as a result of this amendment. The other terms of the Wells Fargo Credit Facility were unchanged. Pursuant to an amendment entered into on May 27, 2022 (the "Second Amendment"), the benchmark rate was transitioned from LIBOR to SOFR. After the Second Amendment, the Wells Fargo Credit Facility is priced at Daily Simple SOFR, with a Daily Simple SOFR floor of zero, plus a spread calculated based upon the composition of loans in the collateral pool, which will not exceed 2.60% per annum.

Funding I’s obligations under the Wells Fargo Credit Facility are secured by a first priority security interest in substantially all of the assets of Funding I, including its portfolio of investments and the Company’s equity interest in Funding I. The obligations of Funding I under the Wells Fargo Credit Facility are non-recourse to the Company.

In connection with the Wells Fargo Credit Facility, the Company and Funding I have made certain representations and warranties and are required to comply with various covenants and other customary requirements. The Wells Fargo Credit Facility contains customary default provisions pursuant to which the administrative agent and the lenders under the Wells Fargo Credit Facility may terminate the Company in its capacity as collateral manager/portfolio manager under the Wells Fargo Credit Facility. Upon the occurrence of an event of default under the Wells Fargo Credit Facility, the administrative agent or the lenders may declare the outstanding advances and all other obligations under the Wells Fargo Credit Facility immediately due and payable.

JPM Credit Facility

On August 28, 2020, the Company, through a wholly-owned, consolidated special purpose financing subsidiary, 57th Street, entered into a $300.0 million revolving credit facility with JPMorgan Chase Bank, Nation Association, as administrative agent ("JPM"), and U.S. Bank, as collateral agent, collateral administrator and securities intermediary (the "JPM Credit Facility").

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The JPM Credit Facility provides for borrowings through August 28, 2023, and any amounts borrowed under the JPM Credit Facility will mature on August 28, 2023 unless the administrative agent exercises its option to extend the maturity date to August 28, 2024. The JPM Credit Facility is priced at three-month LIBOR, with a LIBOR floor of zero, plus a spread of 2.75% per annum. Interest is payable quarterly in arrears. 57th Street will be subject to a non-usage fee to the extent the commitments available under the JPM Credit Facility have not been borrowed. The non-usage fee per annum is 0.50% for the first 20% of the unused balance and up to 2.75% for the remaining unused balance until August 28, 2021, when the non-usage fee per annum is 0.75% for the first 20% of the unused balance and up to 2.75% for the remaining unused balance. 57th Street paid a structuring fee and incurred other customary costs and expenses in connection with the JPM Credit Facility. On January 21, 2021, the Company entered into an amendment (the “JPM Amendment”) to the JPM Credit Facility. The JPM Amendment, among other things, increases the amount that the Company is permitted to borrow under the JPM Credit Agreement from $300.0 million to $400.0 million. On April 12, 2021, the Company, through 57th Street, amended and restated the JPM Credit Facility. The amendment and restatement temporarily reduced the previous minimum funding amount until October 13, 2021. The other material terms of the JPM Credit Facility were unchanged.

On December 9, 2022, the Company entered into an amendment (the "JPM 2022 Amendment") to the JPM Credit Facility. The JPM 2022 Amendment, among other things, (1) extends the maturity date of the JPM Credit Facility to August 28, 2024, (2) extends the maturity date, upon the exercise of the Extension Options (as defined in the JPM Credit Facility), of the JPM Credit Facility to August 28, 2025, and (3) changes the benchmark rate and applicable margin for advances under the JPM Credit Facility to three-month Term SOFR plus 3.00% (subject to further increases consistent with the terms of the JPM Credit Facility).

57th Street’s obligations under the JPM Credit Facility are secured by a first priority security interest in substantially all of the assets of 57th Street, including its portfolio of investments and the Company’s equity interest in 57th Street. The obligations of 57th Street under the JPM Credit Facility are non-recourse to the Company.

In connection with the JPM Credit Facility, the Company and 57th Street have made certain representations and warranties and are required to comply with various covenants and other customary requirements. The JPM Credit Facility contains customary default provisions pursuant to which the administrative agent and the lenders under the JPM Credit Facility may terminate the Company in its capacity as collateral manager/portfolio manager under the JPM Credit Facility. Upon the occurrence of an event of default under the JPM Credit Facility, the administrative agent or the lenders may declare the outstanding advances and all other obligations under the JPM Credit Facility immediately due and payable.

JPM Revolver Facility

On June 10, 2022, the Company entered into a $495.0 million revolving credit facility with JPMorgan Chase Bank, as administrative agent and as collateral agent, MUFG Union Bank, N.A., Sumitomo Mitsui Banking Corporation, and Wells Fargo Bank, National Association as syndication agents, as well as other Lender parties (the “JPM Revolver Facility”).

The JPM Revolver Facility provides for borrowings through June 10, 2026, and any amounts borrowed under the JPM Revolver Facility will mature on June 10, 2027. The JPM Revolver Facility is priced at three-month Term SOFR, plus a spread calculated based upon the composition of loans in the collateral pool, which will not exceed 1.98% per annum. Interest is payable quarterly in arrears. The Company will be subject to a non-usage fee of 0.38% to the extent the commitments available under the JPM Revolver Facility have not been borrowed. The Company paid a structuring fee and incurred other customary costs and expenses in connection with the JPM Revolver Facility.

In connection with the JPM Revolver Facility, the Company has made certain customary representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. The JPM Revolver Facility contains customary events of default for similar financing transactions. Upon the occurrence and during the continuation of an event of default, JPMorgan Chase Bank, N.A. may declare the outstanding advances and all other obligations under the JPM Revolver Facility immediately due and payable.

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Citi Credit Facility

On June 27, 2014, the Company, through a wholly-owned, special purpose financing subsidiary, CB Funding, entered into a credit facility (as amended from time to time, the “Citi Credit Facility”) with Citibank, N.A. ("Citi") as administrative agent and U.S. Bank as collateral agent, account bank, and collateral custodian. From January 1, 2020 to January 20, 2021, the Citi Credit Facility provided for borrowings in an aggregate principal amount of up to $400.0 million on a committed basis, with a reinvestment period ending on May 31, 2021 and maturity date of May 31, 2022. On January 20, 2021, SLF, the Company's joint venture with CCLF entered into an amendment to the Citi Credit Facility (the “Citi Credit Agreement”). The amendment, among other things, (i) replaces the Company with SLF as the collateral manager under the Citi Credit Agreement, (ii) extends the end of the reinvestment period from May 31, 2021 to May 31, 2023 and (iii) extends the final maturity date from May 31, 2022 to May 31, 2024. As a result of this amendment to the Citi Credit Facility, the Company incurred a realized loss on extinguishment of debt of $1.3 million. In connection with the Citi Credit Facility, CB Funding 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, Citi may declare the outstanding advances and all other obligations under the Citi Credit Facility immediately due and payable. During the continuation of an event of default, CB Funding must pay interest at a default rate.

The Citi Credit Facility contains customary default provisions for facilities of this type pursuant to which Citi may terminate the rights, obligations, power, and authority of the Company, in its capacity as servicer of the portfolio assets under the Citi Credit Facility, including, but not limited to, non-performance of Citi Credit Facility obligations, insolvency, defaults of certain financial covenants, and other events with respect to the Company that may be adverse to Citi and the secured parties under the Citi Credit Facility.

The Citi Credit Facility is priced at three-month LIBOR 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.

MassMutual Credit Facility

On July 7, 2020, the Company and a wholly-owned, special purpose financing subsidiary of the Company, BDCA Asset Financing, LLC (“BDCA Asset Financing”), entered into a loan and servicing agreement (the “MassMutual Credit Facility”) with Massachusetts Mutual Life Insurance Company (“MassMutual”) as facility servicer and a lender and U.S. Bank National Association as collateral custodian, collateral administrator and administrative agent. The MassMutual Credit Facility provides for borrowings of up to $100.0 million on a committed basis, and, subject to satisfaction of certain conditions, contains an accordion feature whereby the Mass Mutual Credit Facility can be expanded to $150.0 million.

BDCA Asset Financing’s obligations under the MassMutual Credit Facility are secured by a first priority security interest in substantially all of the assets of BDCA Asset Financing, including its portfolio of investments and the Company’s equity interest in BDCA Asset Financing. The obligations of BDCA Asset Financing under the MassMutual Credit Facility are non-recourse to the Company.

The MassMutual Credit Facility provides for borrowings through December 31, 2021 and matures on December 31, 2025. The MassMutual Credit Facility is priced at three-month LIBOR, with a LIBOR floor of 0.75%, plus a spread of 5.0% per annum. Interest is payable quarterly in arrears. BDCA Asset Financing will be subject to a non-usage fee of 0.50% to the extent the aggregate principal amount available under the MassMutual Credit Facility has not been borrowed. BDCA Asset Financing paid a structuring fee and incurred other customary costs and expenses in connection with the MassMutual Credit Facility.

In connection with the MassMutual Credit Facility, the Company and BDCA Asset Financing have made certain representations and warranties and are required to comply with various covenants and other customary requirements. The MassMutual Credit Facility contains customary default provisions pursuant to which MassMutual may terminate the Company in its capacity as portfolio asset servicer of the portfolio assets under the MassMutual Credit Facility. Upon the occurrence of an event of default, MassMutual may declare the outstanding advances and all other obligations under the MassMutual Credit Facility immediately due and payable.

Effective February 18, 2022, the Company terminated the Mass Mutual Credit Facility. As a result of this termination, the Company incurred a realized loss on extinguishment of debt of $1.8 million.

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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 were approximately $147.0 million. The 2022 Notes bear interest at a rate of 4.75% per year payable semi-annually. On December 30, 2022, the Company paid off the 2022 Notes.

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 5.38% 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 were approximately $58.7 million. The 2023 Notes bear interest at a rate of 5.375% per year payable semi-annually.

2024 Notes

On December 3, 2019, the Company entered into a Purchase Agreement relating to the Company's sale of $100.0 million aggregate principal amount of its 4.85% fixed rate notes due December 15, 2024 (the “2024 Notes”). The 2024 Notes are subject to customary indemnification provisions and representations, warranties, and covenants. The net proceeds from the sale of the 2024 Notes were approximately $98.4 million. The 2024 Notes bear interest at a rate of 4.85% per year payable semi-annually.

2026 Notes

On March 24, 2021, the Company entered into a Purchase Agreement relating to the Company's sale of $300.0 million aggregate principal amount of its 3.25% fixed rate notes due March 30, 2026 (the “Restricted 2026 Notes”). The net proceeds from the sale of the Restricted 2026 Notes were approximately $296.0 million. Pursuant to a Registration Statement on Form N-14 (File No. 333-257321), on September 22, 2021, the Company closed an exchange offer in which holders of the Restricted 2026 Notes were offered the opportunity to exchange their Restricted 2026 Notes for new registered notes with substantially identical terms (the "Unrestricted 2026 Notes" and, together with the Restricted 2026 Notes, the 2026 Notes), through which holders representing 99.88% of the outstanding principal of the then Restricted 2026 Notes obtained Unrestricted 2026 Notes. The 2026 Notes are subject to customary indemnification provisions and representations, warranties and covenants. The 2026 Notes bear interest at a rate of 3.25% per year payable semi-annually.

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 as of March 31, 2023 (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)			$	225,000					$	—					$	225,000					$	—					$	—
JPM Credit Facility (2)			320,000						—						320,000						—						—
JPM Revolver Facility (3)			243,376						—						—						243,376						—
2026 Notes (4)			297,661						—						297,661						—						—
2024 Notes (5)			99,593						—						99,593						—						—
2023 Notes (6)			59,990						59,990						—						—						—
Total contractual obligations			$	1,245,620					$	59,990					$	942,254					$	243,376					$	—

______________

(1)As of March 31, 2023, we had $75.0 million of unused borrowing capacity under the Wells Fargo Credit Facility, subject to borrowing base limits.

(2)As of March 31, 2023, we had $80.0 million of unused borrowing capacity under the JPM Credit Facility, subject to borrowing base limits.

(3)As of March 31, 2023, we had $251.6 million of unused borrowing capacity under the JPM Revolver Facility, subject to borrowing base limits.

(4)As of March 31, 2023, we had no unused borrowing capacity under the 2026 Notes.

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(5)As of March 31, 2023, we had no unused borrowing capacity under the 2024 Notes.

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

Commitments

In the ordinary course of business, we may enter into future funding commitments. As of March 31, 2023, the Company had unfunded commitments on delayed draw term loans of $103.3 million, unfunded commitments on revolver term loans of $113.3 million, and unfunded commitments on term loans of $0.4 million. As of December 31, 2022, the Company had unfunded commitments on delayed draw term loans of $128.8 million, unfunded commitments on revolver term loans of $121.4 million, unfunded equity capital discretionary commitments of $11.1 million, and unfunded commitments on term loans of $0.4 million. Please refer to Note 7 - Commitments and Contingencies for further detail of these unfunded commitments. We maintain sufficient cash on hand and available borrowing capacity to fund such unfunded commitments.

Significant Accounting Estimates and Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

While our significant accounting policies are more fully described in Note 2 - Summary of Significant Accounting Policies appearing elsewhere in this report, we believe the following accounting policies require the most significant judgment in the preparation of our consolidated financial statements.

Valuation of Portfolio Investments

Portfolio investments are reported on the consolidated statements of assets and liabilities at fair value. The Board of Directors (the "Board of Directors") has delegated to the Adviser as valuation designee (the "Valuation Designee") the responsibility of determining the fair value of the Company's investment portfolio, subject to oversight of the Board of Directors, pursuant to Rule 2a-5 under the 1940 Act. As such, our Valuation Designee is charged with determining the fair value of the Company's investment portfolio, subject to oversight of the Board of Directors. 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 contractual 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.

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As part of our quarterly valuation process our Valuation Designee may be assisted by one or more independent valuation firms, whom we've engaged. Our Valuation Designee, under the supervision of the Board of Directors, determines the fair value of each investment, in good faith, based on the input of the independent valuation firm(s) (to the extent applicable) and our Valuation Designee's own analysis.

With respect to investments for which market quotations are not readily available, our Valuation Designee undertakes a multi-step valuation process each quarter, as described below:

•Each portfolio company or investment will be valued by our Valuation Designee, 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

•Our Valuation Designee, under the supervision of the Board of Directors, determines the fair value of each investment, in good faith, based on the input of independent valuation firms (to the extent applicable) and our Valuation Designee's own analysis. Our Valuation Designee also has established a Valuation Committee to assist our Valuation Designee in carrying out its designated responsibilities that the Board has designated to the Adviser as Valuation Designee, subject to oversight of the Board.

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.

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.

Dividend Income

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

Dividend income from SLF is recorded on accrual basis once dividends are declared by SLF's board of directors. Distributions from SLF are evaluated at the time of distribution to determine if the distribution should be recorded as dividend income or a return of capital. Generally, the Company will not record distributions as dividend income unless there are sufficient accumulated tax-basis earnings and profit in SLF prior to distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment.

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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 may hold debt and equity investments in our portfolio that contain PIK interest and dividend provisions. 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 recorded on accrual basis to the extent such amounts are expected to be collected.

Non-accrual Income

Investments are placed on non-accrual status when principal or interest/dividend payments are past due and/or when there is reasonable doubt that principal or interest will be collected. Accrued cash and un-capitalized PIK interest is generally reversed when an investment is placed on non-accrual status. Previously capitalized PIK interest is not reversed when an investment is placed on non-accrual status. Interest payments received on non-accrual investments may be recognized as income or applied to principal depending upon management's judgment of the ultimate outcome. Non-accrual investments are restored to accrual status when past due principal and interest is paid and, in management's judgment, are likely to remain current.

Net Realized Gain or Loss and Net Change in Unrealized Appreciation or Depreciation

Gain or loss on the sale of investments is calculated using the specific identification method. We measure realized gain or loss by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized. Net change in unrealized appreciation or depreciation will reflect the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when a gain or loss is realized.

See Note 2 - Summary of Significant Accounting Policies to the consolidated financial statements for a description of other accounting policies and recently issued accounting pronouncements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

The market risk associated with financial instruments and derivative financial instruments is the risk of loss from adverse changes in market prices or interest rates. Our market risk arises primarily from interest rate risk relating to interest rate fluctuations. Many factors including governmental monetary and tax policies, domestic and international economic and political considerations, and other factors that are beyond our control contribute to interest rate risk. To meet our short and long-term liquidity requirements, we borrow funds at a combination of fixed and variable rates. Our interest rate risk management objectives are to limit the impact of interest rate changes in earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, from time to time, we may enter into interest rate hedge contracts such as swaps, collars, and treasury lock agreements, subject to the requirements of the 1940 Act, in order to mitigate our interest rate risk with respect to various debt instruments. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in benefits of lower interest rates with respect to our portfolio of investments with fixed interest rates. During the periods covered by this report, we did not engage in interest rate hedging activities. We would not hold or issue these derivative contracts for trading or speculative purposes.

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As of March 31, 2023, our debt included variable-rate debt, bearing a weighted average interest rate of LIBOR or SOFR plus 2.56% and fixed rate debt, bearing a weighted average interest rate of 3.88% with a total carrying value (net of deferred financing costs) of $1.2 billion. The following table quantifies the potential changes in interest income net of interest expense should base interest rates increase or decrease by the amounts below assuming that our current consolidated statement of assets and liabilities was to remain constant and no actions were taken to alter our existing interest rate sensitivity. Interest rate floors, if applicable, are not reflected in the sensitivity analysis below.

Change in Base Interest Rates						Estimated Change in Interest Income net of Interest Expense (in thousands)
(-) 519 Basis Points						$	(77,229)
(-) 200 Basis Points						$	(29,745)
(-) 100 Basis Points						$	(14,873)
(-) 50 Basis Points						$	(7,436)
(+) 50 Basis Points						$	7,436
(+) 100 Basis Points						$	14,873
(+) 200 Basis Points						$	29,745

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.

Valuation Risk

We have invested, and plan to continue to invest, primarily in illiquid debt and equity securities of private companies. Most of our investments will not have a readily available market price, and our Adviser, as our Valuation Designee under Rule 2a-5, values these investments at fair value as determined in good faith subject to the oversight of our Board, based on, among other things, the input of the Adviser and independent third-party valuation firms, in accordance with our valuation policy. There is no single standard for determining fair value. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we may realize amounts that are different from the amounts presented.

Inflation and Supply Chain Risk

Economic activity has continued to accelerate across sectors and regions. Nevertheless, due to global supply chain issues, geopolitical events, a rise in energy prices and strong consumer demand as economies continue to reopen, inflation is showing signs of acceleration in the U.S. and globally. Inflation is likely to continue in the near to medium-term, particularly in the U.S., with the possibility that monetary policy may tighten in response. Persistent inflationary pressures could affect our portfolio companies' profit margins.

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, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

As of March 31, 2023, 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, 2022, 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.

Because we borrow money, the potential for gain or loss on amounts invested in us will be magnified and may increase the risk of investing in us.

    As of March 31, 2023, we had approximately $1.2 billion of debt financing. The use of borrowings, also known as leverage, increases the volatility of investments by magnifying the potential for gain or loss on invested equity capital. Because we use leverage to partially finance our investments, through borrowing from banks and other lenders, you will experience increased risks of investing in our common stock. If the value of our assets increases, leveraging would cause the net asset value attributable to our common stock to increase more sharply than it would have had we not leveraged. Conversely, if the value of our assets decreases, leveraging would cause our net asset value to decline more sharply than it otherwise would have had we not leveraged. Similarly, any increase in our income in excess of interest payable on the borrowed funds would cause our net income to increase more than it would without the leverage, while any decrease in our income would cause net income to decline more sharply than it would have had we not borrowed. Such a decline could negatively affect our ability to make common stock distribution payments. Leverage is generally considered a speculative investment technique.

Illustration. The following table illustrates the effect of leverage on returns from an investment in our common stock assuming various annual returns, net of expenses. The calculations in the table below are hypothetical and actual returns may be higher or lower than those appearing below. The calculation assumes (i) $3.4 billion in total assets, (ii) a weighted average cost of funds of 6.06%, (iii) $1.7 billion in debt outstanding (i.e., assumes that the $460.0 million principal amount of our unsecured notes sold and the full $1.2 billion available to us under our revolving credit facilities is outstanding), and (iv) $1.7 billion in stockholders’ equity. In order to compute the “Corresponding return to stockholders,” the “Assumed Return on Our Portfolio (net of expenses)” is multiplied by the assumed total assets to obtain an assumed return to us. From this amount, the interest expense is calculated by multiplying the assumed weighted average cost of funds by the assumed debt outstanding, and the product is subtracted from the assumed return to us in order to determine the return available to stockholders. The return available to stockholders is then divided by our stockholders’ equity to determine the “Corresponding return to stockholders.” Actual interest payments may be different.

Assumed Return on Our Portfolio (net of expenses)						(10)%						(5)%						—%						5%						10%
Corresponding return to stockholders (1)						(25.94)%						(15.95)%						(5.96)%						4.02%						14.01%

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(1) In order for us to cover our hypothetical annual interest payments on indebtedness, we would need to achieve annual returns on our March 31, 2023 total assets of at least 2.99%.

As of March 31, 2023, the Wells Fargo Credit Facility provided for borrowings in an aggregate principal amount of up to $300.0 million on a committed basis, due August 28, 2025; the JPM Credit Facility provided for borrowings in an aggregate principal amount of up to $400.0 million on a committed basis, due August 28, 2024; the JPM Revolver Facility provided for borrowings in an aggregate principal amount of up to $495.0 million on a committed basis, due June 10, 2027; the 2023 Notes provided borrowings in an aggregate principal amount of $60.0 million, due May 30, 2023; the 2024 Notes provided borrowings in an aggregate principal amount of $100.0 million, due December 15, 2024; and the 2026 Notes provided borrowings in an aggregate principal amount of $300.0 million, due March 30, 2026. See Item 7 in the Annual Report filed on Form 10-K for more information about these financing arrangements.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Unregistered Sales of Equity Securities

On February 7, 2023, pursuant to a drawdown notice previously delivered to investors, the Company issued and sold approximately 4.9 million shares of the Company's common stock, par value $0.001 per share (the "Common Stock") for an aggregate offering price of approximately $36.3 million.

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, 2023 through January 31, 2023						—						—						—						—
February 1, 2023 through February 28, 2023						3,472,698						7.38						3,472,698						—
March 1, 2023 through March 31, 2023						—						—						—						—

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, 2023 (and are numbered in accordance with Item 601 of Regulation S-K).

Exhibit No.			Description
3.1			Third Articles of Amendment and Restatement of the Registrant (previously filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 filed on August 10, 2017 and herein incorporated by reference).
3.2			Bylaws (previously filed as Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 filed on August 10, 2017 and herein incorporated by reference).
10.1			Form of Purchase Agreement between the Company and investors (filed as Exhibit 1.1 to the Company's Current Report on Form 8-K filed on April 7, 2022 and herein incorporated by reference).
10.2			Form of Subscription Agreement between the Company and investors (filed as Exhibit 1.2 to the Company's Current Report on Form 8-K filed on April 7, 2022 and herein incorporated by reference).
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).
101.INS			XBRL Instance Document—the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the XBRL document (filed herewith).
101.SCH			Inline XBRL Taxonomy Extension Schema Document (filed herewith).
101.CAL			Inline XBRL Taxonomy Calculation Linkbase Document (filed herewith).
101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith).
101.LAB			Inline XBRL Taxonomy Label Linkbase Document (filed herewith).
101.PRE			Inline XBRL Taxonomy Presentation Linkbase Document (filed herewith).
104			Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) (filed herewith).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be

signed on its behalf by the undersigned thereunto duly authorized.

Signature

Title

Date

/s/ Richard J. Byrne Richard J. Byrne

Chief Executive Officer, President, and Chairman of the Board of Directors (Principal Executive Officer)

May 12, 2023

/s/ Nina Kang Baryski Nina Kang Baryski

Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

May 12, 2023

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