______________________________________________________________________________________________________

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

______________________________________________________________________________________________________ 

FORM 10-Q

þ                 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2018

OR

o         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number 814-00794

Golub Capital BDC, Inc.

(Exact name of registrant as specified in its charter)

Delaware		27-2326940
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

666 Fifth Avenue, 18th Floor

New York, NY 10103

(Address of principal executive offices)

(212) 750-6060

(Registrant's telephone number, including area code)

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 þ   No o

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

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

Large accelerated filer  þ	Accelerated filer o
Non-accelerated filer  o  (Do not check if a smaller reporting company)	Smaller reporting company o
Emerging growth company o

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

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

As of August 8, 2018, the Registrant had 60,006,524 shares of common stock, $0.001 par value, outstanding.

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Part I. Financial Information
Item 1.	Financial Statements	3
	Consolidated Statements of Financial Condition as of June 30, 2018 (unaudited) and September 30, 2017	3
	Consolidated Statements of Operations for the three and nine months ended June 30, 2018 (unaudited) and 2017 (unaudited)	4
	Consolidated Statements of Changes in Net Assets for the nine months ended June 30, 2018 (unaudited) and 2017 (unaudited)	5
	Consolidated Statements of Cash Flows for the nine months ended June 30, 2018 (unaudited) and 2017 (unaudited)	6
	Consolidated Schedules of Investments as of June 30, 2018 (unaudited) and September 30, 2017	8
	Notes to Consolidated Financial Statements (unaudited)	41
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	74
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	102
Item 4.	Controls and Procedures	103
Part II. Other Information
Item 1.	Legal Proceedings	104
Item 1A.	Risk Factors	104
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	104
Item 3.	Defaults Upon Senior Securities	104
Item 4.	Mine Safety Disclosures	104
Item 5.	Other Information	104
Item 6.	Exhibits	105

2

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Golub Capital BDC, Inc. and Subsidiaries

Consolidated Statements of Financial Condition

(In thousands, except share and per share data)

	June 30, 2018				September 30, 2017
	(unaudited)
Assets
Investments, at fair value
Non-controlled/non-affiliate company investments	$	1,701,948			$	1,586,293
Non-controlled affiliate company investments	3,988				3,707
Controlled affiliate company investments	92,579				95,015
Total investments at fair value (amortized cost of $1,789,214 and $1,671,239, respectively)	1,798,515				1,685,015
Cash and cash equivalents	6,814				3,988
Foreign currencies (cost of $111 and $0, respectively)	111				—
Restricted cash and cash equivalents	65,282				58,570
Interest receivable	6,463				6,271
Other assets	390				332
Total Assets	$	1,877,575			$	1,754,176
Liabilities
Debt	$	875,950			$	781,100
Less unamortized debt issuance costs	3,128				4,273
Debt less unamortized debt issuance costs	872,822				776,827
Other short-term borrowings (proceeds of $9,511 and $0, respectively)	9,425				—
Interest payable	6,783				3,800
Management and incentive fees payable	16,749				13,215
Accounts payable and accrued expenses	2,401				2,312
Accrued trustee fees	73				76
Total Liabilities	908,253				796,230
Commitments and Contingencies (Note 7)
Net Assets
Preferred stock, par value $0.001 per share, 1,000,000 shares authorized, zero shares issued and outstanding as of June 30, 2018 and September 30, 2017	—				—
Common stock, par value $0.001 per share, 100,000,000 shares authorized, 60,006,524 and 59,577,293 shares issued and outstanding as of June 30, 2018 and September 30, 2017, respectively	60				60
Paid in capital in excess of par	946,722				939,307
Undistributed (over distribution of) net investment income	(1,418		)		1,954
Net unrealized appreciation (depreciation) on investments, secured borrowings and foreign currency translation	12,054				16,444
Net realized gain (loss) on investments and foreign currency transactions	11,904				181
Total Net Assets	969,322				957,946
Total Liabilities and Total Net Assets	$	1,877,575			$	1,754,176
Number of common shares outstanding	60,006,524				59,577,293
Net asset value per common share	$	16.15			$	16.08

See Notes to Consolidated Financial Statements.

3

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Golub Capital BDC, Inc. and Subsidiaries

Consolidated Statements of Operations (unaudited)

(In thousands, except share and per share data)

	Three months ended June 30,								Nine months ended June 30,
	2018				2017				2018				2017
Investment income
From non-controlled/non-affiliate company investments:
Interest income	$	35,718			$	32,877			$	103,125			$	94,238
Dividend income	10				278				620				438
Fee income	459				990				1,655				1,422
Total investment income from non-controlled/non-affiliate company investments	36,187				34,145				105,400				96,098
From non-controlled affiliate company investments:
Interest income	159				372				475				1,023
Total investment income from non-controlled affiliate company investments	159				372				475				1,023
From controlled affiliate company investments:
Interest income	—				—				—				1,639
Dividend income	2,050				891				5,868				4,054
Total investment income from controlled affiliate company investments	2,050				891				5,868				5,693
Total investment income	38,396				35,408				111,743				102,814
Expenses
Interest and other debt financing expenses	8,556				8,099				24,176				23,379
Base management fee	6,125				6,059				17,984				17,744
Incentive fee	3,573				2,073				9,455				6,274
Professional fees	705				638				2,168				1,935
Administrative service fee	601				595				1,840				1,720
General and administrative expenses	120				136				365				437
Total expenses	19,680				17,600				55,988				51,489
Net investment income - before excise tax	18,716				17,808				55,755				51,325
Excise tax	—				—				—				17
Net investment income - after excise tax	18,716				17,808				55,755				51,308
Net gain (loss) on investments and foreign currency
Net realized gain (loss) on investments and foreign currency transactions:
Non-controlled/non-affiliate company investments	14,881				3,233				14,744				4,826
Non-controlled affiliate company investments	—				(6,442		)		—				(6,442		)
Foreign currency transactions	(42		)		—				(42		)		—
Net realized gain (loss) on investments and foreign currency transactions	14,839				(3,209		)		14,702				(1,616		)
Net change in unrealized appreciation (depreciation) on investments and foreign currency translation:
Non-controlled/non-affiliate company investments	(11,350		)		(245		)		(4,533		)		4,743
Non-controlled affiliate company investments	4				5,658				568				5,228
Controlled affiliate company investments	(575		)		99				(511		)		171
Foreign currency translation	86				—				86				—
Net change in unrealized appreciation (depreciation) on investments and foreign currency translation	(11,835		)		5,512				(4,390		)		10,142
Net change in unrealized appreciation (depreciation) on secured borrowings	—				—				—				1
Net gain (loss) on investments, secured borrowings and foreign currency	3,004				2,303				10,312				8,527
Net increase in net assets resulting from operations	$	21,720			$	20,111			$	66,067			$	59,835
Per Common Share Data
Basic and diluted earnings per common share	$	0.36			$	0.35			$	1.11			$	1.07
Dividends and distributions declared per common share	$	0.32			$	0.32			$	1.04			$	1.21
Basic and diluted weighted average common shares outstanding	59,872,113				57,719,505				59,732,945				56,058,642

See Notes to Consolidated Financial Statements.

4

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Golub Capital BDC, Inc. and Subsidiaries

Consolidated Statements of Changes in Net Assets (unaudited)

(In thousands, except share data)

	Common Stock							Paid in Capital in Excess of Par				Undistributed (Over Distribution) of Net Investment Income				Net Unrealized Appreciation (Depreciation) on Investments, Secured Borrowings and Foreign Currency Translation				Net Realized Gain (Loss) on Investments and Foreign Currency Transactions				Total Net Assets
	Shares			Par Amount
Balance at September 30, 2016	55,059,067			$	55			$	855,998			$	18,832			$	13,104			$	(9,164	)		$	878,825
Issuance of common stock, net of offering and underwriting costs(1)	3,762,500			4				69,489				—				—				—				69,493
Net increase in net assets resulting from operations	—			—				—				51,308				10,143				(1,616		)		59,835
Distributions to stockholders:
Stock issued in connection with dividend reinvestment plan	413,607			—				7,483				—				—				—				7,483
Distributions from net investment income	—			—				—				(66,278		)		—				—				(66,278		)
Distributions from net realized gain	—			—				—				—				—				(1,139		)		(1,139		)
Total increase (decrease) for the period ended June 30, 2017	4,176,107			4				76,972				(14,970		)		10,143				(2,755		)		69,394
Balance at June 30, 2017	59,235,174			$	59			$	932,970			$	3,862			$	23,247			$	(11,919	)		$	948,219
Balance at September 30, 2017	59,577,293			$	60			$	939,307			$	1,954			$	16,444			$	181			$	957,946
Issuance of common stock, net of offering and underwriting costs	—			—				—				—				—				—				—
Net increase in net assets resulting from operations	—			—				—				55,755				(4,390		)		14,702				66,067
Distributions to stockholders:
Stock issued in connection with dividend reinvestment plan	429,231			—				7,415				—				—				—				7,415
Distributions from net investment income	—			—				—				(59,127		)		—				—				(59,127		)
Distributions from net realized gain	—			—				—				—				—				(2,979		)		(2,979		)
Total increase (decrease) for the period ended June 30, 2018	429,231			—				7,415				(3,372		)		(4,390		)		11,723				11,376
Balance at June 30, 2018	60,006,524			$	60			$	946,722			$	(1,418	)		$	12,054			$	11,904			$	969,322

(1)

On March 21, 2017, Golub Capital BDC, Inc. priced a public offering of 1,750,000 shares of its common stock at a public offering price of $19.03 per share. On April 6, 2017, Golub Capital BDC, Inc. sold an additional 262,500 shares of its common stock at a public offering price of $19.03 per share pursuant to the underwriter's exercise of the option to purchase additional shares granted in connection with the public offering in March 2017. On June 6, 2017, Golub Capital BDC, Inc. entered into an agreement to sell 1,750,000 shares of its common stock pursuant to an underwritten, public offering at a price to the Company of $18.71 per share.

See Notes to Consolidated Financial Statements.

5

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Golub Capital BDC, Inc. and Subsidiaries

Consolidated Statements of Cash Flows (unaudited)

(In thousands)

	Nine months ended June 30,
	2018				2017
Cash flows from operating activities
Net increase in net assets resulting from operations	$	66,067			$	59,835
Adjustments to reconcile net increase in net assets resulting from operations to net cash (used in) provided by operating activities
Amortization of deferred debt issuance costs	2,242				2,488
Accretion of discounts and amortization of premiums	(7,420		)		(6,792		)
Net realized (gain) loss on investments	(14,744		)		1,616
Net change in unrealized (appreciation) depreciation on investments	4,476				(10,142		)
Net change in unrealized appreciation (depreciation) on secured borrowings	—				(1		)
Net change in unrealized appreciation (depreciation) on foreign currency and other transactions	(86		)		—
Proceeds from (fundings of) revolving loans, net	4,334				959
Fundings of investments	(464,209		)		(461,763		)
Proceeds from principal payments and sales of portfolio investments	364,773				336,464
PIK interest	(710		)		(1,537		)
Changes in operating assets and liabilities:
Interest receivable	(192		)		64
Receivable from investments sold	—				(1,317		)
Other assets	(58		)		248
Interest payable	2,983				3,045
Management and incentive fees payable	3,534				641
Payable for investments purchased	—				5,294
Accounts payable and accrued expenses	89				192
Accrued trustee fees	(3		)		(10		)
Net cash (used in) provided by operating activities	(38,924		)		(70,716		)
Cash flows from financing activities
Borrowings on debt	414,800				419,350
Repayments of debt	(319,950		)		(400,650		)
Capitalized debt issuance costs	(1,097		)		(1,145		)
Proceeds from other short-term borrowings	9,511				—
Repayments on secured borrowings	—				(69		)
Proceeds from shares sold, net of underwriting costs	—				69,893
Offering costs paid	—				(400		)
Distributions paid	(54,691		)		(59,934		)
Net cash provided by (used in) financing activities	48,573				27,045
Net change in cash, cash equivalents, foreign currencies and restricted cash and cash equivalents	9,649				(43,671		)
Cash, cash equivalents, foreign currencies and restricted cash and cash equivalents, beginning of period	62,558				89,540
Cash, cash equivalents, foreign currencies and restricted cash and cash equivalents, end of period	$	72,207			$	45,869
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	18,951			$	17,836
Distributions declared during the period	62,106				67,417
Supplemental disclosure of noncash operating activity:
Funding of LLC equity interests in SLF	$	—			$	(78,689	)
Proceeds from subordinated notes in SLF principal payment	—				78,689
Supplemental disclosure of noncash financing activity:
Proceeds from issuance of Class A-1-R, Class A-2-R, and Class B-R 2014 Notes	$	246,000			$	—
Redemptions of Class A-1, Class A-2, and Class B 2014 Notes	(246,000		)		—
Proceeds from issuance of Class A-Refi 2010 Notes	—				205,000
Redemptions of Class A and Class B 2010 Notes	—				(205,000		)
Stock issued in connection with dividend reinvestment plan	7,415				7,483

See Notes to Consolidated Financial Statements.

6

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Golub Capital BDC, Inc. and Subsidiaries

Consolidated Statements of Cash Flows (unaudited) - (continued)

(In thousands)

The following table provides a reconciliation of cash, cash equivalents, foreign currencies and restricted cash and cash equivalents reported within the Consolidated Statements of Financial Condition that sum to the total of the same such amounts in the Consolidated Statements of Cash Flows:

	As of June 30,
	2018				2017
Cash and cash equivalents	$	6,814			$	12,827
Foreign currencies	111				—
Restricted cash and cash equivalents	65,282				33,042
Total cash, cash equivalents, foreign currencies and restricted cash and cash equivalents shown in the Consolidated Statements of Cash Flows	$	72,207			$	45,869

See Note 2. Significant Accounting Policies and Recent Accounting Updates for a description of restricted cash and cash equivalents.

See Notes to Consolidated Financial Statements.

7

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Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited)

June 30, 2018

(In thousands)

	Investment Type		Spread Above Index(1)			Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets			Fair Value (4)
Investments
Non-controlled/non-affiliate company investments
Debt investments
Aerospace and Defense
ILC Dover, LP#	Senior loan		L + 4.75%	(c)(f)		7.09%		12/2023		$	9,978			$	9,886			1.0		%	$	9,978
NTS Technical Systems*^#	One stop		L + 6.25%	(a)		8.23%		6/2021		21,773				21,544				2.3			21,773
NTS Technical Systems(5)	One stop		L + 6.25%			N/A(6)		6/2021		—				(58		)		—			—
Tresys Technology Holdings, Inc.(7)	One stop		L + 6.75%	(a)		8.84%		12/2018		3,899				3,845				0.1			1,170
Tresys Technology Holdings, Inc.(7)	One stop		L + 6.75%	(a)		8.84%		12/2018		659				658				0.1			659
Tronair Parent, Inc.^	Senior loan		L + 4.75%	(c)(f)		7.11%		9/2023		367				364				—			367
Tronair Parent, Inc.	Senior loan		L + 4.50%	(a)(c)(f)		7.33%		9/2021		55				54				—			55
Whitcraft LLC*^	One stop		L + 6.25%	(c)		8.58%		4/2023		12,470				12,321				1.3			12,470
Whitcraft LLC^	One stop		L + 6.25%	(c)		8.58%		4/2023		195				192				—			195
Whitcraft LLC(5)	One stop		L + 6.25%			N/A(6)		4/2023		—				(1		)		—			—
Whitcraft LLC(5)	One stop		L + 6.25%			N/A(6)		4/2023		—				(2		)		—			—
										49,396				48,803				4.8			46,667
Automobile
Dent Wizard International Corporation*	Senior loan		L + 4.00%	(a)		6.10%		4/2020		4,488				4,472				0.5			4,488
Grease Monkey International, LLC*^	Senior loan		L + 4.75%	(a)		6.84%		11/2022		4,875				4,822				0.5			4,875
Grease Monkey International, LLC	Senior loan		L + 4.75%	(a)		6.73%		11/2022		76				76				—			76
Grease Monkey International, LLC	Senior loan		L + 4.75%	(a)		6.84%		11/2022		26				25				—			26
Grease Monkey International, LLC(5)	Senior loan		L + 4.75%			N/A(6)		11/2022		—				(2		)		—			—
Quick Quack Car Wash Holdings, LLC#	One stop		L + 6.50%	(a)		8.59%		4/2023		8,773				8,668				0.9			8,686
Quick Quack Car Wash Holdings, LLC	One stop		L + 6.50%	(a)		8.57%		4/2023		50				49				—			50
Quick Quack Car Wash Holdings, LLC(5)	One stop		L + 6.50%			N/A(6)		4/2023		—				(6		)		—			(5		)
										18,288				18,104				1.9			18,196
Beverage, Food and Tobacco
Abita Brewing Co., L.L.C.	One stop		L + 5.75%	(a)		7.84%		04/2021		7,086				7,007				0.7			7,086
Abita Brewing Co., L.L.C.	One stop		L + 5.75%			N/A(6)		04/2021		—				—				—			—
C. J. Foods, Inc.*^	One stop		L + 6.25%	(c)		8.58%		05/2020		8,603				8,539				0.9			8,603
C. J. Foods, Inc.^	One stop		L + 6.25%	(c)		8.58%		05/2020		651				648				0.1			651
C. J. Foods, Inc.	One stop		L + 6.25%	(b)(c)		8.52%		05/2019		345				342				—			345
Cafe Rio Holding, Inc.^	One stop		L + 5.75%	(a)		7.84%		09/2023		10,396				10,238				1.1			10,396
Cafe Rio Holding, Inc.	One stop		L + 5.75%	(a)		7.84%		09/2023		80				79				—			80
Cafe Rio Holding, Inc.	One stop		P + 4.75%	(f)		9.75%		09/2023		30				28				—			30
Cafe Rio Holding, Inc.(5)	One stop		L + 5.75%			N/A(6)		09/2023		—				(3		)		—			—
Firebirds International, LLC*	One stop		L + 5.75%	(a)		7.82%		12/2018		1,049				1,047				0.1			1,049
Firebirds International, LLC*	One stop		L + 5.75%	(a)		7.82%		12/2018		295				295				—			295
Firebirds International, LLC^	One stop		L + 5.75%	(a)		7.82%		12/2018		95				95				—			95
Firebirds International, LLC	One stop		L + 5.75%			N/A(6)		12/2018		—				—				—			—
Firebirds International, LLC	One stop		L + 5.75%			N/A(6)		12/2018		—				—				—			—
Flavor Producers, LLC#	Senior loan		L + 4.75%	(c)		7.07%		12/2023		2,161				2,131				0.2			2,161
Flavor Producers, LLC	Senior loan		L + 4.75%	(c)		7.09%		12/2022		2				1				—			2
FWR Holding Corporation^	One stop		L + 6.00%	(d)		8.14%		08/2023		5,285				5,217				0.6			5,285
FWR Holding Corporation	One stop		L + 6.00%	(b)(d)		7.96%		08/2023		65				63				—			65
FWR Holding Corporation	One stop		L + 6.00%	(a)(f)		7.96%		08/2023		22				21				—			22
Global Franchise Group, LLC*	Senior loan		L + 5.75%	(a)		7.84%		12/2019		3,306				3,285				0.3			3,306
Global Franchise Group, LLC	Senior loan		L + 5.75%			N/A(6)		12/2019		—				—				—			—
Global ID Corporation#	One stop		L + 6.50%	(c)		8.83%		11/2021		5,157				5,113				0.5			5,157
Global ID Corporation	One stop		L + 6.50%	(c)		8.84%		11/2021		72				70				—			72
Global ID Corporation	One stop		L + 6.50%	(c)		8.83%		11/2021		9				9				—			9
Hopdoddy Holdings, LLC	One stop		L + 8.00%	(c)		10.31%		08/2020		1,311				1,303				0.1			1,311
Hopdoddy Holdings, LLC	One stop		L + 8.00%	(c)		10.31%		08/2020		10				9				—			10

See Notes to Consolidated Financial Statements.

8

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Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2018

(In thousands)

	Investment Type		Spread Above Index(1)			Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets			Fair Value (4)
Beverage, Food and Tobacco - (continued)
Hopdoddy Holdings, LLC	One stop		L + 8.00%	(c)		10.30%		08/2020		$	3			$	2			—		%	$	3
Mendocino Farms, LLC(5)	One stop		L + 8.50%			N/A(6)		06/2023		—				(2		)		—			(2		)
Mid-America Pet Food, L.L.C.*^	One stop		L + 6.00%	(c)		8.33%		12/2021		10,780				10,684				1.1			10,780
Mid-America Pet Food, L.L.C.(5)	One stop		L + 6.00%			N/A(6)		12/2021		—				(1		)		—			—
NBC Intermediate, LLC^	Senior loan		L + 4.25%	(a)		6.35%		09/2023		2,119				2,101				0.2			2,119
NBC Intermediate, LLC	Senior loan		L + 4.25%			N/A(6)		09/2023		—				—				—			—
Purfoods, LLC	One stop		L + 6.00%	(c)		8.31%		05/2021		8,379				8,260				0.9			8,379
Purfoods, LLC	One stop		N/A			7.00% PIK		05/2026		116				116				—			118
Purfoods, LLC	One stop		L + 6.00%	(a)		8.05%		05/2021		65				64				—			65
Purfoods, LLC^	One stop		L + 6.00%	(c)		8.33%		05/2021		39				39				—			39
Purfoods, LLC	One stop		L + 6.00%	(c)		8.33%		05/2021		30				30				—			30
Purfoods, LLC^	One stop		L + 6.00%	(c)		8.33%		05/2021		24				23				—			24
Purfoods, LLC^	One stop		L + 6.00%	(c)		8.33%		05/2021		15				15				—			15
Purfoods, LLC^	One stop		L + 6.00%	(c)		8.33%		05/2021		15				15				—			15
Purfoods, LLC^	One stop		L + 6.00%	(c)		8.33%		05/2021		14				14				—			14
Purfoods, LLC^	One stop		L + 6.00%	(c)		8.33%		05/2021		11				11				—			11
Purfoods, LLC^	One stop		L + 6.00%	(c)		8.33%		05/2021		11				11				—			11
Purfoods, LLC^	One stop		L + 6.00%	(c)		8.33%		05/2021		10				10				—			10
Purfoods, LLC(5)	One stop		L + 6.00%			N/A(6)		05/2021		—				(1		)		—			—
Rubio's Restaurants, Inc.*^	Senior loan		L + 5.25%	(c)		7.58%		10/2019		11,203				10,985				1.2			11,203
Uinta Brewing Company^(7)	One stop		L + 8.50%	(a)		10.59%		08/2019		3,725				3,716				0.3			2,980
Uinta Brewing Company(7)	One stop		L + 8.50%	(a)		10.59%		08/2019		693				691				0.1			547
										83,282				82,320				8.4			82,391
Broadcasting and Entertainment
TouchTunes Interactive Networks, Inc.^	Senior loan		L + 4.75%	(a)		6.84%		05/2021		1,451				1,447				0.2			1,458
Buildings and Real Estate
Brooks Equipment Company, LLC*^	One stop		L + 5.00%	(c)		7.31%		08/2020		21,096				20,984				2.2			21,096
Brooks Equipment Company, LLC*	One stop		L + 5.00%	(c)		7.31%		08/2020		4,478				4,457				0.5			4,478
Brooks Equipment Company, LLC(5)	One stop		L + 5.00%			N/A(6)		08/2020		—				(7		)		—			—
Jensen Hughes, Inc.#	Senior loan		L + 4.50%	(a)		6.58%		03/2024		500				497				0.1			500
Jensen Hughes, Inc.#	Senior loan		L + 4.50%	(a)		6.59%		03/2024		153				151				—			153
Jensen Hughes, Inc.	Senior loan		L + 4.50%	(a)		6.59%		03/2024		2				2				—			2
MRI Software LLC^	One stop		L + 6.00%	(c)		8.34%		06/2023		23,743				23,186				2.5			23,743
MRI Software LLC*^	One stop		L + 5.50%	(c)		7.84%		06/2023		13,778				13,642				1.4			13,778
MRI Software LLC^	One stop		L + 5.50%	(c)		7.84%		06/2023		358				355				—			358
MRI Software LLC#	One stop		L + 5.50%	(c)		7.84%		06/2023		296				293				—			296
MRI Software LLC#	One stop		L + 5.50%	(c)		7.84%		06/2023		195				192				—			195
MRI Software LLC^	One stop		L + 5.50%	(a)		7.56%		06/2023		165				163				—			165
MRI Software LLC(5)	One stop		L + 5.50%			N/A(6)		06/2023		—				(3		)		—			—
MRI Software LLC(5)	One stop		L + 5.50%			N/A(6)		06/2023		—				(7		)		—			—
										64,764				63,905				6.7			64,764
Chemicals, Plastics and Rubber
Flexan, LLC*	One stop		L + 5.75%	(c)		8.08%		02/2020		2,316				2,299				0.2			2,316
Flexan, LLC^	One stop		L + 5.75%	(c)		8.08%		02/2020		1,088				1,083				0.1			1,088
Flexan, LLC	One stop		P + 4.50%	(f)		9.50%		02/2020		11				11				—			11
										3,415				3,393				0.3			3,415
Diversified/Conglomerate Manufacturing
Chase Industries, Inc.#	Senior loan		L + 4.00%	(c)		6.36%		05/2025		6,870				6,752				0.7			6,836
Chase Industries, Inc.(5)	Senior loan		L + 4.00%			N/A(6)		05/2023		—				(2		)		—			—
Chase Industries, Inc.(5)	Senior loan		L + 4.00%			N/A(6)		05/2025		—				(4		)		—			(1		)
Inventus Power, Inc.*^	One stop		L + 6.50%	(a)		8.59%		04/2020		7,307				7,285				0.7			6,577

See Notes to Consolidated Financial Statements.

9

---

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2018

(In thousands)

	Investment Type		Spread Above Index(1)			Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets			Fair Value (4)
Diversified/Conglomerate Manufacturing - (continued)
Inventus Power, Inc.	One stop		L + 6.50%	(a)(c)		8.68%		04/2020		$	230			$	228			—		%	$	194
Onicon Incorporated*^#	One stop		L + 5.50%	(c)		7.83%		04/2022		18,186				18,040				1.9			18,004
Onicon Incorporated(5)	One stop		L + 5.50%			N/A(6)		04/2022		—				(4		)		—			(10		)
PetroChoice Holdings, Inc.^	Senior loan		L + 5.00%	(b)(c)		7.10%		08/2022		1,737				1,702				0.2			1,737
Plex Systems, Inc.*^	One stop		L + 7.50%	(a)(b)		9.56%		06/2020		18,797				18,612				1.9			18,797
Plex Systems, Inc.(5)	One stop		L + 7.50%			N/A(6)		06/2020		—				(16		)		—			—
Reladyne, Inc.*^	Senior loan		L + 5.00%	(c)		7.31%		07/2022		16,921				16,721				1.8			16,921
Reladyne, Inc.^	Senior loan		L + 5.00%	(c)		7.34%		07/2022		173				171				—			173
Reladyne, Inc.	Senior loan		L + 5.00%	(b)(c)		7.10%		07/2022		142				141				—			142
Reladyne, Inc.(5)	Senior loan		L + 5.00%			N/A(6)		07/2022		—				(3		)		—			—
Source Refrigeration & HVAC, Inc.#	Senior loan		L + 4.75%	(c)		7.11%		04/2023		9,476				9,371				1.0			9,382
Source Refrigeration & HVAC, Inc.	Senior loan		P + 3.75%	(f)		8.75%		04/2023		67				65				—			65
Source Refrigeration & HVAC, Inc.(5)	Senior loan		L + 4.75%			N/A(6)		04/2023		—				(4		)		—			(4		)
Sunless Merger Sub, Inc.#	Senior loan		L + 5.00%	(a)		7.09%		07/2019		1,381				1,385				0.1			1,381
Sunless Merger Sub, Inc.	Senior loan		P + 3.75%	(f)		8.75%		07/2019		303				303				—			303
Togetherwork Holdings, LLC#	One stop		L + 6.50%	(a)		8.59%		03/2025		9,181				9,049				1.0			9,181
Togetherwork Holdings, LLC	One stop		L + 6.50%	(a)		8.59%		03/2025		116				114				—			116
Togetherwork Holdings, LLC	One stop		L + 6.50%	(a)		8.59%		03/2025		108				106				—			108
Togetherwork Holdings, LLC	One stop		L + 6.50%	(a)		8.59%		03/2024		63				62				—			63
Togetherwork Holdings, LLC(5)	One stop		L + 6.50%			N/A(6)		03/2025		—				(2		)		—			—
										91,058				90,072				9.3			89,965
Diversified/Conglomerate Service
Accela, Inc.#	One stop		L + 6.00%	(c)		8.33%		09/2023		5,261				5,189				0.5			5,261
Accela, Inc.(5)	One stop		L + 6.00%			N/A(6)		09/2023		—				(1		)		—			—
Agility Recovery Solutions Inc.*^	One stop		L + 6.50%	(a)		8.59%		03/2020		13,821				13,752				1.4			13,821
Agility Recovery Solutions Inc.(5)	One stop		L + 6.50%			N/A(6)		03/2020		—				(3		)		—			—
Anaqua, Inc.*^	One stop		L + 6.50%	(c)		8.86%		07/2022		6,965				6,880				0.7			6,965
Anaqua, Inc.(5)	One stop		L + 6.50%			N/A(6)		07/2022		—				(1		)		—			—
Apttus Corporation	One stop		L + 7.85%	(e)		10.06%		01/2023		5,627				5,400				0.6			5,627
Bazaarvoice, Inc.#	One stop		L + 8.00%	(a)		10.09%		02/2024		8,981				8,814				0.9			8,981
Bazaarvoice, Inc.	One stop		P + 7.00%	(f)		12.00%		02/2024		30				28				—			30
Browz LLC	One stop		L + 9.50%	(a)		9.98% cash/1.50% PIK		03/2023		1,497				1,466				0.2			1,497
Browz LLC	One stop		L + 9.50%			N/A(6)		03/2023		—				—				—			—
Centrify Corporation	One stop		L + 10.00%	(a)		12.09%		05/2023		4,843				4,796				0.5			5,061
Centrify Corporation	One stop		L + 5.50%			N/A(6)		05/2023		—				—				—			—
Centrify Corporation(5)	One stop		L + 10.00%			N/A(6)		05/2023		—				(1		)		—			—
Clearwater Analytics, LLC*^	One stop		L + 5.00%	(a)		7.09%		09/2022		8,688				8,460				0.9			8,688
Clearwater Analytics, LLC	One stop		L + 5.00%	(a)		7.08%		09/2022		5				3				—			5
Cloudbees, Inc.	One stop		L + 9.00%	(a)		10.59% cash/0.50% PIK		05/2023		1,898				1,837				0.2			1,844
Cloudbees, Inc.	One stop		L + 9.00%			N/A(6)		05/2023		—				—				—			—
Confluence Technologies, Inc.	One stop		L + 7.50%	(a)		9.55%		03/2024		7,051				6,900				0.7			7,051
Confluence Technologies, Inc.	One stop		L + 7.50%	(a)(b)(f)		9.76%		03/2024		30				29				—			30
Connexin Software, Inc.	One stop		L + 8.50%	(a)		10.59%		02/2024		2,401				2,345				0.2			2,401
Connexin Software, Inc.	One stop		L + 8.50%			N/A(6)		02/2024		—				—				—			—
Datto, Inc.	One stop		L + 8.00%	(a)		10.05%		12/2022		11,156				10,958				1.2			11,156
Datto, Inc.(5)	One stop		L + 8.00%			N/A(6)		12/2022		—				(1		)		—			—
Daxko Acquisition Corporation*^	One stop		L + 6.50%	(a)		8.59%		09/2022		11,275				11,146				1.2			11,275
Daxko Acquisition Corporation	One stop		L + 6.50%			N/A(6)		09/2022		—				—				—			—
Digital Guardian, Inc.	One stop		L + 9.00%	(c)		10.34% cash/1.00% PIK		06/2023		3,999				3,949				0.4			3,968
Digital Guardian, Inc.	Subordinated debt		N/A			8.00% PIK		01/2019		184				184				—			184
Digital Guardian, Inc.	One stop		L + 6.00%			N/A(6)		06/2023		—				—				—			—
Digital Guardian, Inc.	One stop		L + 9.00%			N/A(6)		06/2023		—				—				—			—

See Notes to Consolidated Financial Statements.

10

---

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2018

(In thousands)

	Investment Type		Spread Above Index(1)			Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets			Fair Value (4)
Diversified/Conglomerate Service - (continued)
DISA Holdings Acquisition Subsidiary Corp.*	Senior loan		L + 4.00%	(f)		6.69%		06/2022		$	2,006			$	1,996			0.2		%	$	1,996
DISA Holdings Acquisition Subsidiary Corp.	Senior loan		L + 4.00%			N/A(6)		06/2022		—				—				—			—
DISA Holdings Acquisition Subsidiary Corp.(5)	Senior loan		L + 4.00%			N/A(6)		06/2022		—				(1		)		—			(1		)
EGD Security Systems, LLC	One stop		L + 6.25%	(c)		8.58%		06/2022		11,113				10,949				1.1			11,114
EGD Security Systems, LLC^	One stop		L + 6.25%	(c)		8.56%		06/2022		98				97				—			98
EGD Security Systems, LLC^	One stop		L + 6.25%	(d)		8.25%		06/2022		52				52				—			52
EGD Security Systems, LLC	One stop		L + 6.25%	(c)		8.58%		06/2022		35				34				—			35
GS Acquisitionco, Inc.#	One stop		L + 4.75%	(a)		6.85%		05/2024		13,432				13,300				1.4			13,298
GS Acquisitionco, Inc.	One stop		L + 4.75%	(a)		6.85%		05/2024		880				871				0.1			871
GS Acquisitionco, Inc.(5)	One stop		L + 4.75%			N/A(6)		05/2024		—				(1		)		—			(1		)
GS Acquisitionco, Inc.(5)	One stop		L + 4.75%			N/A(6)		05/2024		—				(2		)		—			(2		)
HealthcareSource HR, Inc.*	One stop		L + 6.75%	(c)		9.08%		05/2020		23,450				23,233				2.4			23,450
HealthcareSource HR, Inc.(5)	One stop		L + 6.75%			N/A(6)		05/2020		—				(1		)		—			—
Host Analytics, Inc.	One stop		N/A			8.50% cash/2.25% PIK		08/2021		3,151				3,110				0.3			3,151
Host Analytics, Inc.	One stop		N/A			8.50% cash/2.25% PIK		08/2021		2,641				2,534				0.3			2,641
Host Analytics, Inc.	One stop		N/A			8.50% cash/2.25% PIK		08/2021		737				728				0.1			737
Host Analytics, Inc.(5)	One stop		N/A			8.50% cash/2.25% PIK		08/2021		3				(4		)		—			3
III US Holdings, LLC	One stop		L + 6.50%			N/A(6)		09/2022		—				—				—			—
Imprivata, Inc.#	Senior loan		L + 4.00%	(c)		6.33%		10/2023		13,078				12,933				1.3			13,078
Imprivata, Inc.(5)	Senior loan		L + 4.00%			N/A(6)		10/2023		—				(2		)		—			—
Infogix, Inc.#	One stop		L + 6.00%	(c)		8.33%		04/2024		3,338				3,322				0.3			3,305
Infogix, Inc.	One stop		L + 6.00%			N/A(6)		04/2024		—				—				—			—
Integration Appliance, Inc.*^	One stop		L + 8.25%	(a)		10.23%		09/2020		16,123				16,046				1.7			16,123
Integration Appliance, Inc.	One stop		L + 8.25%	(a)		10.23%		09/2020		7,914				7,833				0.8			7,914
Integration Appliance, Inc.	One stop		L + 8.25%	(a)		10.23%		09/2020		5,396				5,346				0.6			5,396
Integration Appliance, Inc.	One stop		L + 8.25%	(a)		10.23%		09/2020		2,484				2,468				0.3			2,484
Integration Appliance, Inc.	One stop		L + 8.25%	(a)		10.23%		09/2020		924				919				0.1			924
Integration Appliance, Inc.*	One stop		L + 8.25%	(a)		10.23%		09/2020		719				714				0.1			719
JAMF Holdings, Inc.	One stop		L + 8.00%	(c)		10.36%		11/2022		4,550				4,470				0.5			4,550
JAMF Holdings, Inc.(5)	One stop		L + 8.00%			N/A(6)		11/2022		—				(1		)		—			—
Maverick Bidco Inc.*#	One stop		L + 6.25%	(c)		8.58%		04/2023		17,512				17,223				1.8			17,512
Maverick Bidco Inc.	One stop		L + 6.25%	(c)		8.61%		04/2023		168				167				—			168
Maverick Bidco Inc.(5)	One stop		L + 6.25%			N/A(6)		04/2023		—				(2		)		—			—
Maverick Bidco Inc.(5)	One stop		L + 6.25%			N/A(6)		04/2023		—				(3		)		—			—
Ministry Brands, LLC#	Senior loan		L + 4.00%	(a)		6.10%		12/2022		868				864				0.1			864
Ministry Brands, LLC#	Senior loan		L + 4.00%	(a)		6.10%		12/2022		497				494				0.1			494
Ministry Brands, LLC	Senior loan		L + 4.00%			N/A(6)		12/2022		—				—				—			—
MMan Acquisition Co.^#	One stop		L + 6.00%	(a)		8.09%		08/2023		9,750				9,626				1.0			9,750
MMan Acquisition Co.	One stop		L + 6.00%	(a)(c)		8.14%		08/2023		86				85				—			86
Net Health Acquisition Corp.#	One stop		L + 5.50%	(a)		7.59%		12/2023		3,867				3,831				0.4			3,867
Net Health Acquisition Corp.(5)	One stop		L + 5.50%			N/A(6)		12/2023		—				(1		)		—			—
Netsmart Technologies, Inc.#	Senior loan		L + 4.50%	(a)		6.57%		04/2023		1,741				1,729				0.2			1,754
Netsmart Technologies, Inc.(5)	Senior loan		L + 4.75%			N/A(6)		04/2023		—				(7		)		—			—
Nextech Systems, LLC#	One stop		L + 6.00%	(a)		8.09%		03/2024		10,383				10,346				1.1			10,383
Nextech Systems, LLC	One stop		L + 6.00%			N/A(6)		03/2024		—				—				—			—
Nexus Brands Group, Inc.#	One stop		L + 6.00%	(c)		8.34%		11/2023		5,764				5,700				0.6			5,764
Nexus Brands Group, Inc.	One stop		L + 6.00%	(c)(f)		8.33%		11/2023		91				89				—			91
Nexus Brands Group, Inc.	One stop		L + 6.00%	(a)		8.09%		11/2023		3				2				—			3
Property Brands, Inc.	One stop		L + 6.00%	(a)		8.09%		01/2024		10,899				10,672				1.1			10,899
Property Brands, Inc.^	One stop		L + 6.00%	(a)		8.09%		01/2024		219				217				—			219
Property Brands, Inc.(5)	One stop		L + 6.00%			N/A(6)		01/2024		—				(1		)		—			—
Property Brands, Inc.(5)	One stop		L + 6.00%			N/A(6)		01/2024		—				(1		)		—			—

See Notes to Consolidated Financial Statements.

11

---

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2018

(In thousands)

	Investment Type		Spread Above Index(1)			Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets			Fair Value (4)
Diversified/Conglomerate Service - (continued)
Saba Software, Inc.*^#	Senior loan		L + 4.50%	(a)		6.59%		05/2023		$	22,571			$	22,258			2.3		%	$	22,571
Saba Software, Inc.(5)	Senior loan		L + 4.50%			N/A(6)		05/2023		—				(2		)		—			—
Saldon Holdings, Inc.*	Senior loan		L + 4.50%	(a)		6.59%		09/2022		775				767				0.1			775
Severin Acquisition, LLC#	Senior loan		L + 5.38%	(c)		7.74%		07/2021		877				869				0.1			888
Severin Acquisition, LLC#	Senior loan		L + 5.00%	(c)		7.36%		07/2021		780				773				0.1			783
Severin Acquisition, LLC#	Senior loan		L + 5.38%	(c)		7.74%		07/2021		597				591				0.1			605
Severin Acquisition, LLC#	Senior loan		L + 4.88%	(c)		7.24%		07/2021		284				281				—			284
Switchfly, Inc.	One stop		L + 10.00%	(c)		10.85% cash/1.50% PIK		04/2020		2,425				2,353				0.3			2,425
Switchfly, Inc.	One stop		L + 10.00%	(a)		10.57% cash/1.50% PIK		06/2018		203				203				—			203
Switchfly, Inc.	One stop		L + 10.00%			N/A(6)		04/2020		—				—				—			—
Telesoft, LLC*	One stop		L + 5.50%	(c)		7.81%		07/2022		4,171				4,137				0.4			4,171
Telesoft, LLC(5)	One stop		L + 5.50%			N/A(6)		07/2022		—				(1		)		—			—
Transaction Data Systems, Inc.*#	One stop		L + 5.25%	(a)		7.34%		06/2021		39,149				38,970				4.0			38,968
Transaction Data Systems, Inc.(5)	One stop		L + 5.25%			N/A(6)		06/2021		—				(1		)		—			(1		)
Trintech, Inc.^#	One stop		L + 6.00%	(c)		8.36%		12/2023		10,903				10,778				1.1			10,903
Trintech, Inc.^	One stop		L + 6.00%	(c)		8.36%		12/2023		3,421				3,381				0.4			3,421
Trintech, Inc.	One stop		L + 6.00%	(c)		8.36%		12/2023		30				28				—			30
True Commerce, Inc.^	One stop		L + 5.75%	(c)		8.08%		11/2023		5,624				5,561				0.6			5,624
True Commerce, Inc.(5)	One stop		L + 5.75%			N/A(6)		11/2023		—				(1		)		—			—
Valant Medical Solutions, Inc.	One stop		L + 11.00%	(a)		10.78% cash/2.25% PIK		10/2020		824				763				0.1			824
Valant Medical Solutions, Inc.	One stop		N/A			6.00% PIK		02/2020		149				149				—			210
Valant Medical Solutions, Inc.	One stop		L + 11.00%	(a)		10.78% cash/2.25% PIK		10/2020		10				10				—			10
Velocity Technology Solutions, Inc.#	One stop		L + 6.00%	(c)		8.33%		12/2023		8,248				8,117				0.9			8,248
Velocity Technology Solutions, Inc.(5)	One stop		L + 6.00%			N/A(6)		12/2023		—				(1		)		—			—
Vendavo, Inc.	One stop		L + 8.50%	(b)		10.67%		10/2022		28,936				28,411				3.0			28,647
Vendavo, Inc.(5)	One stop		L + 8.50%			N/A(6)		10/2022		—				(10		)		—			(13		)
Vendor Credentialing Service LLC^	One stop		L + 6.00%	(a)		8.09%		11/2021		12,146				11,966				1.3			12,146
Vendor Credentialing Service LLC(5)	One stop		L + 6.00%			N/A(6)		11/2021		—				(1		)		—			—
Verisys Corporation*	One stop		L + 7.75%	(c)		10.08%		01/2023		3,896				3,851				0.4			3,896
Verisys Corporation(5)	One stop		L + 7.75%			N/A(6)		01/2023		—				(1		)		—			—
Workforce Software, LLC^	One stop		L + 10.50%	(c)		5.84% cash/7.00% PIK		06/2021		5,633				5,611				0.6			5,633
Workforce Software, LLC	One stop		L + 10.50%	(c)		5.84% cash/7.00% PIK		06/2021		23				23				—			23
										419,359				413,935				43.4			418,908
Ecological
Pace Analytical Services, LLC	One stop		L + 6.25%	(a)		8.34%		09/2022		15,229				14,932				1.6			15,229
Pace Analytical Services, LLC^	One stop		L + 6.25%	(a)		8.34%		09/2022		1,416				1,399				0.2			1,416
Pace Analytical Services, LLC*	One stop		L + 6.25%	(a)		8.34%		09/2022		346				342				—			346
Pace Analytical Services, LLC^	One stop		L + 6.25%	(a)		8.33%		09/2022		119				117				—			119
Pace Analytical Services, LLC	One stop		L + 6.25%	(a)		8.33%		09/2022		91				90				—			91
Pace Analytical Services, LLC(5)	One stop		L + 6.25%			N/A(6)		09/2022		—				(3		)		—			—
WRE Holding Corp.*	Senior loan		L + 4.75%	(a)		6.84%		01/2023		1,011				1,001				0.1			1,011
WRE Holding Corp.	Senior loan		L + 4.75%	(a)		6.84%		01/2023		43				42				—			43
WRE Holding Corp.	Senior loan		L + 4.75%	(a)		6.84%		01/2023		17				17				—			17
WRE Holding Corp.	Senior loan		L + 4.75%	(c)		7.08%		01/2023		5				5				—			5
										18,277				17,942				1.9			18,277
Electronics
Appriss Holdings, Inc.*^#	One stop		L + 6.00%	(c)		8.33%		11/2020		22,268				22,075				2.3			22,268
Appriss Holdings, Inc.(5)	One stop		L + 6.00%			N/A(6)		11/2020		—				(23		)		—			—
Compusearch Software Holdings, Inc.*^	Senior loan		L + 4.25%	(c)		6.58%		05/2021		2,072				2,070				0.2			2,073
Diligent Corporation#	One stop		L + 5.50%	(c)		7.94%		04/2022		26,198				25,902				2.7			26,198
Diligent Corporation#	One stop		L + 5.50%	(c)		7.94%		04/2022		4,891				4,824				0.5			4,891

See Notes to Consolidated Financial Statements.

12

---

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2018

(In thousands)

	Investment Type		Spread Above Index(1)			Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets			Fair Value (4)
Electronics - (continued)
Diligent Corporation*	One stop		L + 5.50%	(d)		7.94%		04/2022		$	4,802			$	4,705			0.5		%	$	4,802
Diligent Corporation*^	One stop		L + 5.50%	(d)		7.94%		04/2022		2,628				2,590				0.3			2,628
Diligent Corporation	One stop		L + 5.50%	(d)		7.98%		04/2022		102				102				—			102
Diligent Corporation(5)	One stop		L + 5.50%			N/A(6)		04/2022		—				(1		)		—			—
Diligent Corporation(5)	One stop		L + 5.50%			N/A(6)		04/2022		—				(3		)		—			—
Gamma Technologies, LLC*^#	One stop		L + 5.50%	(a)		7.59%		06/2024		21,532				21,342				2.2			21,343
Gamma Technologies, LLC	One stop		L + 5.50%	(a)		7.60%		06/2024		20				19				—			20
SEI, Inc.*	Senior loan		L + 5.25%	(a)		7.34%		07/2023		5,491				5,439				0.6			5,491
Sloan Company, Inc., The#	One stop		L + 7.25%	(c)		9.58%		04/2020		6,426				6,378				0.6			5,783
Sloan Company, Inc., The	One stop		L + 7.25%	(c)		9.58%		04/2020		429				429				—			386
Sloan Company, Inc., The	One stop		L + 7.25%	(c)		9.60%		04/2020		50				50				—			45
Sovos Compliance*^	One stop		L + 6.00%	(a)		8.09%		03/2022		9,257				9,140				1.0			9,257
Sovos Compliance^	One stop		L + 6.00%	(a)		8.09%		03/2022		1,557				1,538				0.2			1,557
Sovos Compliance	One stop		L + 6.00%			N/A(6)		03/2022		—				—				—			—
Sovos Compliance(5)	One stop		L + 6.00%			N/A(6)		03/2022		—				(2		)		—			—
Watchfire Enterprises, Inc.	Second lien		L + 8.00%	(c)		10.33%		10/2021		9,435				9,330				1.0			9,435
										117,158				115,904				12.1			116,279
Grocery
MyWebGrocer, Inc.*	One stop		L + 5.00%	(d)		7.52%		09/2018		14,271				14,226				1.5			14,271
Healthcare, Education and Childcare
Active Day, Inc.	One stop		L + 6.00%	(a)		8.09%		12/2021		13,299				13,090				1.4			13,299
Active Day, Inc.^	One stop		L + 6.00%	(a)		8.09%		12/2021		1,026				1,016				0.1			1,026
Active Day, Inc.*	One stop		L + 6.00%	(a)		8.09%		12/2021		661				656				0.1			661
Active Day, Inc.*	One stop		L + 6.00%	(a)		8.09%		12/2021		457				452				0.1			457
Active Day, Inc.(5)	One stop		L + 6.00%			N/A(6)		12/2021		—				(1		)		—			—
Acuity Eyecare Holdings, LLC	One stop		L + 6.75%	(b)		8.87%		03/2022		2,564				2,516				0.3			2,564
Acuity Eyecare Holdings, LLC	One stop		L + 6.75%	(b)		8.85%		03/2022		204				179				—			204
Acuity Eyecare Holdings, LLC^	One stop		L + 6.75%	(b)		8.87%		03/2022		150				148				—			150
Acuity Eyecare Holdings, LLC(5)	One stop		L + 6.75%			N/A(6)		03/2022		—				(1		)		—			—
ADCS Clinics Intermediate Holdings, LLC	One stop		L + 5.75%	(b)		7.92%		05/2022		21,119				20,665				2.1			20,697
ADCS Clinics Intermediate Holdings, LLC*	One stop		L + 5.75%	(b)		7.92%		05/2022		107				106				—			105
ADCS Clinics Intermediate Holdings, LLC	One stop		L + 5.75%	(b)		7.92%		05/2022		83				82				—			81
ADCS Clinics Intermediate Holdings, LLC	One stop		L + 5.75%	(b)(f)		8.34%		05/2022		65				64				—			63
ADCS Clinics Intermediate Holdings, LLC*	One stop		L + 5.75%	(b)		7.92%		05/2022		32				31				—			31
Agilitas USA, Inc.#	One stop		L + 6.25%	(c)		8.56%		04/2022		8,375				8,312				0.8			8,208
Agilitas USA, Inc.	One stop		L + 6.25%	(c)		8.56%		04/2022		10				10				—			8
Agilitas USA, Inc.(5)	One stop		L + 6.25%			N/A(6)		04/2022		—				(1		)		—			—
Aris Teleradiology Company, LLC*	Senior loan		L + 5.50%	(d)		8.00%		03/2021		2,693				2,677				0.2			1,750
Aris Teleradiology Company, LLC	Senior loan		L + 5.50%	(c)		7.83%		03/2021		124				123				—			64
Avalign Technologies, Inc.^	Senior loan		L + 4.50%	(a)		6.60%		07/2021		1,416				1,413				0.2			1,416
BIORECLAMATIONIVT, LLC*^#	One stop		L + 5.75%	(a)		7.84%		01/2021		16,895				16,745				1.7			16,895
BIORECLAMATIONIVT, LLC	One stop		P + 4.75%	(f)		9.75%		01/2021		100				99				—			100
California Cryobank, LLC^	One stop		L + 5.50%	(c)		7.83%		08/2019		1,434				1,430				0.1			1,434
California Cryobank, LLC^	One stop		L + 5.50%	(c)		7.83%		08/2019		549				545				0.1			549
California Cryobank, LLC^	One stop		L + 5.50%	(c)		7.83%		08/2019		182				182				—			182
California Cryobank, LLC	One stop		L + 5.50%	(c)		7.82%		08/2019		99				98				—			99
California Cryobank, LLC	One stop		L + 5.50%			N/A(6)		08/2019		—				—				—			—
CLP Healthcare Services, Inc.^	Senior loan		L + 5.50%	(a)		7.59%		12/2020		3,894				3,865				0.4			3,816
Curo Health Services LLC#	Senior loan		P + 3.00%	(f)		8.00%		02/2022		3,248				3,238				0.3			3,256
DCA Investment Holding, LLC*^#	One stop		L + 5.25%	(c)		7.58%		07/2021		18,631				18,423				1.9			18,631
DCA Investment Holding, LLC*^#	One stop		L + 5.25%	(c)		7.58%		07/2021		13,365				13,275				1.4			13,365

See Notes to Consolidated Financial Statements.

13

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Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2018

(In thousands)

	Investment Type		Spread Above Index(1)			Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets			Fair Value (4)
Healthcare, Education and Childcare - (continued)
DCA Investment Holding, LLC#	One stop		L + 5.25%	(c)		7.58%		07/2021		$	2,456			$	2,425			0.3		%	$	2,456
DCA Investment Holding, LLC	One stop		L + 5.25%	(c)		7.58%		07/2021		152				150				—			152
DCA Investment Holding, LLC	One stop		L + 5.25%	(c)		7.58%		07/2021		47				47				—			47
DCA Investment Holding, LLC	One stop		L + 5.25%	(c)		7.58%		07/2021		26				16				—			26
DCA Investment Holding, LLC(5)	One stop		L + 5.25%			N/A(6)		07/2021		—				(9		)		—			—
Deca Dental Management LLC*^	One stop		L + 6.25%	(c)		8.58%		07/2020		4,074				4,048				0.4			4,074
Deca Dental Management LLC	One stop		L + 6.25%	(a)(c)		8.47%		07/2020		496				493				0.1			496
Deca Dental Management LLC	One stop		L + 6.25%	(a)		8.34%		07/2020		50				50				—			50
Deca Dental Management LLC(5)	One stop		L + 6.25%			N/A(6)		07/2020		—				(2		)		—			—
Dental Holdings Corporation	One stop		L + 5.50%	(d)		8.02%		02/2020		7,142				7,070				0.7			7,142
Dental Holdings Corporation	One stop		L + 5.50%	(d)		8.02%		02/2020		1,133				1,125				0.1			1,133
Dental Holdings Corporation	One stop		L + 5.50%	(a)(b)(f)		7.54%		02/2020		441				433				0.1			441
Elite Dental Partners LLC#	One stop		L + 5.25%	(c)		7.58%		06/2023		12,305				12,122				1.3			12,181
Elite Dental Partners LLC	One stop		P + 4.25%	(f)		9.25%		06/2023		10				9				—			9
Elite Dental Partners LLC(5)	One stop		L + 5.25%			N/A(6)		06/2023		—				(15		)		—			(10		)
ERG Buyer, LLC#	One stop		L + 5.50%	(c)		7.83%		05/2024		13,216				13,021				1.3			13,083
ERG Buyer, LLC(5)	One stop		L + 5.50%			N/A(6)		05/2024		—				(2		)		—			(2		)
ERG Buyer, LLC(5)	One stop		L + 5.50%			N/A(6)		05/2024		—				(11		)		—			(8		)
eSolutions, Inc.*^	One stop		L + 6.50%	(c)		8.83%		03/2022		19,098				18,855				2.0			19,098
eSolutions, Inc.(5)	One stop		L + 6.50%			N/A(6)		03/2022		—				(1		)		—			—
Excelligence Learning Corporation^	One stop		L + 6.00%	(a)		8.09%		04/2023		4,817				4,778				0.5			4,721
Eyecare Services Partners Holdings LLC	One stop		L + 6.25%	(c)		8.58%		05/2023		7,946				7,768				0.8			7,946
Eyecare Services Partners Holdings LLC	One stop		L + 6.25%	(c)		8.58%		05/2023		577				567				0.1			577
Eyecare Services Partners Holdings LLC	One stop		L + 6.25%	(c)		8.58%		05/2023		356				354				—			356
Eyecare Services Partners Holdings LLC	One stop		L + 6.25%	(c)		8.58%		05/2023		173				172				—			173
Eyecare Services Partners Holdings LLC	One stop		P + 5.25%	(f)		10.25%		05/2023		85				82				—			85
Eyecare Services Partners Holdings LLC	One stop		L + 6.25%	(c)		8.58%		05/2023		58				57				—			58
Eyecare Services Partners Holdings LLC	One stop		L + 6.25%	(c)		8.58%		05/2023		51				50				—			51
Eyecare Services Partners Holdings LLC	One stop		L + 6.25%	(c)		8.58%		05/2023		33				28				—			33
Eyecare Services Partners Holdings LLC	One stop		L + 6.25%	(c)		8.58%		05/2023		32				26				—			32
G & H Wire Company, Inc.^	One stop		L + 5.75%	(a)		7.84%		09/2023		5,600				5,539				0.6			5,600
G & H Wire Company, Inc.(5)	One stop		L + 5.50%			N/A(6)		09/2022		—				(1		)		—			—
Immucor, Inc.#	Senior loan		L + 5.00%	(a)		7.09%		06/2021		1,601				1,598				0.2			1,624
Joerns Healthcare, LLC*^	One stop		L + 6.00%	(c)		8.31%		05/2020		3,497				3,472				0.3			3,229
Kareo, Inc.	One stop		L + 9.00%	(a)		11.09%		06/2022		4,518				4,337				0.5			4,518
Kareo, Inc.	One stop		L + 9.00%	(a)		11.09%		06/2022		332				327				—			332
Kareo, Inc.	One stop		L + 9.00%			N/A(6)		06/2022		—				—				—			—
Katena Holdings, Inc.^	One stop		L + 6.75%	(c)		9.08%		06/2021		8,545				8,483				0.9			8,374
Katena Holdings, Inc.^	One stop		L + 6.75%	(c)		9.08%		06/2021		835				829				0.1			818
Katena Holdings, Inc.#	One stop		L + 6.75%	(c)		9.08%		06/2021		569				563				0.1			558
Katena Holdings, Inc.	One stop		P + 5.75%	(f)		10.75%		06/2021		100				99				—			98
Lombart Brothers, Inc.^	One stop		L + 6.75%	(c)		9.08%		04/2022		3,602				3,526				0.4			3,602
Lombart Brothers, Inc.^(8)	One stop		L + 6.75%	(c)		9.08%		04/2022		1,652				1,627				0.2			1,652
Lombart Brothers, Inc.	One stop		L + 6.75%			N/A(6)		04/2022		—				—				—			—
Lombart Brothers, Inc.(5)	One stop		L + 6.75%			N/A(6)		04/2022		—				(1		)		—			—
Maverick Healthcare Group, LLC*	Senior loan		L + 7.50%	(a)		7.59% cash/2.00% PIK		12/2017		1,388				1,388				0.1			1,388
MWD Management, LLC & MWD Services, Inc.#	One stop		L + 5.25%	(c)		7.58%		06/2023		5,881				5,819				0.6			5,881
MWD Management, LLC & MWD Services, Inc.^	One stop		L + 5.25%	(c)		7.58%		06/2023		229				228				—			229
MWD Management, LLC & MWD Services, Inc.(5)	One stop		L + 5.25%			N/A(6)		06/2022		—				(1		)		—			—
MWD Management, LLC & MWD Services, Inc.(5)	One stop		L + 5.25%			N/A(6)		06/2023		—				(3		)		—			—
Oliver Street Dermatology Holdings, LLC	One stop		L + 6.25%	(c)		8.58%		05/2022		9,362				9,167				1.0			9,362
Oliver Street Dermatology Holdings, LLC	One stop		L + 6.25%	(c)		8.58%		05/2022		944				931				0.1			944

See Notes to Consolidated Financial Statements.

14

---

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2018

(In thousands)

	Investment Type		Spread Above Index(1)			Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets			Fair Value (4)
Healthcare, Education and Childcare - (continued)
Oliver Street Dermatology Holdings, LLC	One stop		L + 6.25%	(c)		8.60%		05/2022		$	212			$	209			—		%	$	212
Oliver Street Dermatology Holdings, LLC*	One stop		L + 6.25%	(c)		8.58%		05/2022		210				208				—			210
Oliver Street Dermatology Holdings, LLC^	One stop		L + 6.25%	(c)		8.58%		05/2022		151				149				—			151
Oliver Street Dermatology Holdings, LLC	One stop		L + 6.25%	(c)		8.58%		05/2022		116				115				—			116
Oliver Street Dermatology Holdings, LLC^	One stop		L + 6.25%	(c)		8.58%		05/2022		90				90				—			90
Oliver Street Dermatology Holdings, LLC^	One stop		L + 6.25%	(c)		8.58%		05/2022		46				45				—			46
Oliver Street Dermatology Holdings, LLC*	One stop		L + 6.25%	(c)		8.58%		05/2022		42				41				—			42
Oliver Street Dermatology Holdings, LLC^	One stop		L + 6.25%	(c)		8.58%		05/2022		32				32				—			32
Oliver Street Dermatology Holdings, LLC^	One stop		L + 6.25%	(c)		8.58%		05/2022		30				29				—			30
Oliver Street Dermatology Holdings, LLC	One stop		L + 6.25%	(c)(f)		8.87%		05/2022		20				18				—			20
ONsite Mammography, LLC	One stop		L + 6.75%	(a)		8.84%		11/2023		3,072				3,009				0.3			3,072
ONsite Mammography, LLC	One stop		L + 6.75%	(d)		8.93%		11/2023		16				15				—			16
ONsite Mammography, LLC(5)	One stop		L + 6.75%			N/A(6)		11/2023		—				(1		)		—			—
Pinnacle Treatment Centers, Inc.	One stop		L + 6.25%	(c)		8.61%		08/2021		9,904				9,735				1.0			9,904
Pinnacle Treatment Centers, Inc.^	One stop		L + 6.25%	(c)		8.61%		08/2021		55				54				—			55
Pinnacle Treatment Centers, Inc.	One stop		L + 6.25%	(c)(f)		8.81%		08/2021		35				34				—			35
Pinnacle Treatment Centers, Inc.(5)	One stop		L + 6.25%			N/A(6)		08/2021		—				(1		)		—			—
PPT Management Holdings, LLC(7)	One stop		P + 7.00%	(f)		12.00%		12/2022		10,171				9,996				0.8			7,628
PPT Management Holdings, LLC(7)	One stop		P + 7.00%	(f)		12.00%		12/2022		200				197				—			150
PPT Management Holdings, LLC(7)	One stop		P + 7.00%	(f)		12.00%		12/2022		135				135				—			101
PPT Management Holdings, LLC(7)	One stop		P + 7.00%	(f)		12.00%		12/2022		81				81				—			60
PPT Management Holdings, LLC(5)(7)	One stop		L + 6.00%	(c)(f)		8.88%		12/2022		39				29				—			(33		)
Premise Health Holding Corp.*^#	One stop		L + 4.50%	(c)		6.83%		06/2020		14,700				14,657				1.5			14,700
Premise Health Holding Corp.(5)	One stop		L + 4.50%			N/A(6)		06/2020		—				(9		)		—			—
Radiology Partners, Inc.^#	One stop		P + 4.75%	(f)		9.75%		12/2023		28,990				28,880				3.0			28,990
Radiology Partners, Inc.	One stop		P + 4.75%	(f)		9.75%		12/2023		343				340				—			343
Reliant Pro ReHab, LLC*	Senior loan		L + 5.00%	(a)		12.09%		12/2018		2,416				2,414				0.2			2,416
Reliant Pro ReHab, LLC	Senior loan		P + 4.00%	(f)		9.00%		12/2018		498				498				0.1			498
Riverchase MSO, LLC#	Senior loan		L + 5.25%	(c)		7.58%		10/2022		4,943				4,889				0.5			4,943
Riverchase MSO, LLC	Senior loan		L + 5.25%	(c)		7.59%		10/2022		44				43				—			44
RXH Buyer Corporation*^	One stop		L + 5.75%	(c)		8.08%		09/2021		17,127				16,944				1.8			17,127
RXH Buyer Corporation*	One stop		L + 5.75%	(c)		8.08%		09/2021		1,938				1,918				0.2			1,938
RXH Buyer Corporation	One stop		P + 4.75%	(c)(f)		9.03%		09/2021		92				90				—			92
SLMP, LLC^	One stop		L + 6.00%	(a)		8.09%		05/2023		7,563				7,418				0.8			7,563
SLMP, LLC^	One stop		L + 6.00%	(a)		8.09%		05/2023		299				295				—			299
SLMP, LLC	One stop		N/A			7.50% PIK		05/2027		90				90				—			90
SLMP, LLC(5)	One stop		L + 6.00%			N/A(6)		05/2023		—				(1		)		—			—
SLMP, LLC(5)	One stop		L + 6.00%			N/A(6)		05/2023		—				(1		)		—			—
Spear Education, LLC^	One stop		L + 6.25%	(c)		8.56%		08/2019		4,609				4,595				0.5			4,609
Spear Education, LLC	One stop		L + 6.25%	(c)		8.56%		08/2019		74				74				—			74
Spear Education, LLC	One stop		L + 6.25%			N/A(6)		08/2019		—				—				—			—
Summit Behavioral Healthcare, LLC^	Senior loan		L + 4.75%	(c)		7.05%		10/2023		8,799				8,682				0.9			8,799
Summit Behavioral Healthcare, LLC	Senior loan		L + 4.75%	(c)		7.07%		10/2023		65				63				—			65
Summit Behavioral Healthcare, LLC(5)	Senior loan		L + 4.75%			N/A(6)		10/2023		—				(3		)		—			—
WHCG Management, LLC#	Senior loan		L + 5.00%	(c)		7.33%		03/2023		2,376				2,353				0.2			2,376
WHCG Management, LLC	Senior loan		L + 5.00%	(c)		7.31%		03/2023		50				49				—			50
WHCG Management, LLC(5)	Senior loan		L + 4.75%			N/A(6)		03/2023		—				(2		)		—			—
WIRB-Copernicus Group, Inc.*^	Senior loan		L + 4.25%	(a)		6.34%		08/2022		10,929				10,856				1.1			10,929
WIRB-Copernicus Group, Inc.(5)	Senior loan		L + 4.25%			N/A(6)		08/2022		—				(1		)		—			—
WIRB-Copernicus Group, Inc.(5)	Senior loan		L + 4.25%			N/A(6)		08/2022		—				(2		)		—			—
										364,813				360,418				36.9			359,602

See Notes to Consolidated Financial Statements.

15

---

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2018

(In thousands)

	Investment Type		Spread Above Index(1)			Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets			Fair Value (4)
Home and Office Furnishings, Housewares, and Durable Consumer
1A Smart Start LLC*	Senior loan		L + 4.50%	(a)		6.59%		02/2022		$	549			$	548			0.1		%	$	551
CST Buyer Company^	One stop		L + 5.00%	(d)		7.45%		03/2023		2,433				2,375				0.3			2,433
CST Buyer Company(5)	One stop		L + 5.00%			N/A(6)		03/2023		—				(1		)		—			—
Plano Molding Company, LLC*^#	One stop		L + 8.00%	(a)		10.09%		05/2021		13,065				12,932				1.3			12,543
										16,047				15,854				1.7			15,527
Hotels, Motels, Inns, and Gaming
Aimbridge Hospitality, LLC*^	One stop		L + 5.00%	(a)		7.09%		06/2022		9,966				9,827				1.0			9,816
Aimbridge Hospitality, LLC*#	One stop		L + 5.00%	(a)		7.09%		06/2022		4,842				4,772				0.5			4,770
Aimbridge Hospitality, LLC#	One stop		L + 5.00%	(a)		7.09%		06/2022		807				795				0.1			795
Aimbridge Hospitality, LLC	One stop		L + 5.00%	(a)		7.09%		06/2022		16				15				—			16
Aimbridge Hospitality, LLC(5)	One stop		L + 5.00%			N/A(6)		06/2022		—				(1		)		—			(1		)
										15,631				15,408				1.6			15,396
Insurance
Captive Resources Midco, LLC*^#	One stop		L + 6.00%	(a)		8.09%		12/2021		34,819				34,375				3.6			34,819
Captive Resources Midco, LLC(5)	One stop		L + 6.00%			N/A(6)		12/2021		—				(20		)		—			—
Captive Resources Midco, LLC(5)	One stop		L + 6.00%			N/A(6)		12/2021		—				(25		)		—			—
Internet Pipeline, Inc.	One stop		L + 7.25%	(a)		9.35%		08/2022		4,809				4,721				0.5			4,880
Internet Pipeline, Inc.*	One stop		L + 6.25%	(a)		8.34%		08/2022		2,082				2,065				0.2			2,043
Internet Pipeline, Inc.*	One stop		L + 6.25%	(a)		8.34%		08/2022		788				782				0.1			773
Internet Pipeline, Inc.	One stop		L + 7.25%			N/A(6)		08/2021		—				—				—			1
RSC Acquisition, Inc.#	Senior loan		L + 4.25%	(c)(d)(f)		6.75%		11/2022		1,615				1,605				0.2			1,615
RSC Acquisition, Inc.	Senior loan		L + 4.25%	(d)		6.75%		11/2021		42				42				—			42
RSC Acquisition, Inc.(5)	Senior loan		L + 4.25%			N/A(6)		11/2022		—				(2		)		—			—
										44,155				43,543				4.6			44,173
Leisure, Amusement, Motion Pictures, Entertainment
NFD Operating, LLC#	One stop		L + 7.00%	(a)		8.98%		06/2021		2,307				2,287				0.2			2,307
NFD Operating, LLC	One stop		L + 7.00%			N/A(6)		06/2021		—				—				—			—
PADI Holdco, Inc.(8)(17)(18)	One stop		E + 5.75%	(g)		5.75%		04/2023		9,616				9,616				1.0			9,401
PADI Holdco, Inc.*	One stop		L + 5.75%	(a)		7.85%		04/2023		9,701				9,478				1.0			9,701
PADI Holdco, Inc.	One stop		L + 5.75%	(a)		7.85%		04/2022		102				101				—			102
Self Esteem Brands, LLC*^	Senior loan		L + 4.75%	(a)		6.84%		02/2020		16,440				16,378				1.7			16,440
Self Esteem Brands, LLC(5)	Senior loan		L + 4.75%			N/A(6)		02/2020		—				(3		)		—			—
Sunshine Sub, LLC#	One stop		L + 4.75%	(a)		6.84%		05/2024		7,740				7,588				0.8			7,585
Sunshine Sub, LLC(5)	One stop		L + 4.75%			N/A(6)		05/2024		—				(1		)		—			(1		)
Sunshine Sub, LLC(5)	One stop		L + 4.75%			N/A(6)		05/2024		—				(3		)		—			(3		)
Teaching Company, The	One stop		L + 7.00%	(a)(c)		9.31%		08/2020		18,691				18,572				1.9			18,691
Teaching Company, The	One stop		L + 7.00%	(c)(f)		9.58%		08/2020		95				94				—			95
Titan Fitness, LLC*	One stop		L + 6.50%	(a)		8.48%		09/2019		12,985				12,923				1.3			12,985
Titan Fitness, LLC*	One stop		L + 6.50%	(a)		8.48%		09/2019		1,959				1,953				0.2			1,959
Titan Fitness, LLC*	One stop		L + 6.50%	(a)		8.48%		09/2019		1,720				1,715				0.2			1,720
Titan Fitness, LLC^	One stop		L + 6.50%	(a)		8.48%		09/2019		929				920				0.1			929
Titan Fitness, LLC(5)	One stop		L + 6.50%			N/A(6)		09/2019		—				(5		)		—			—
										82,285				81,613				8.4			81,911
Oil and Gas
Drilling Info, Inc.*^#	One stop		L + 5.50%	(b)		7.67%		06/2020		14,408				14,319				1.5			14,408
Drilling Info, Inc.	One stop		L + 5.75%			N/A(6)		06/2020		—				—				—			—
										14,408				14,319				1.5			14,408
Personal and Non Durable Consumer Products (Mfg. Only)
Georgica Pine Clothiers, LLC	One stop		L + 5.50%	(c)		7.83%		11/2021		5,635				5,572				0.6			5,635
Georgica Pine Clothiers, LLC^	One stop		L + 5.50%	(c)		7.83%		11/2021		491				488				0.1			491
Georgica Pine Clothiers, LLC*	One stop		L + 5.50%	(c)		7.83%		11/2021		344				342				—			344

See Notes to Consolidated Financial Statements.

16

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Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2018

(In thousands)

	Investment Type		Spread Above Index(1)			Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets			Fair Value (4)
Personal and Non Durable Consumer Products (Mfg. Only)
Georgica Pine Clothiers, LLC	One stop		L + 5.50%	(c)		7.83%		11/2021		$	33			$	32			—		%	$	33
IMPLUS Footwear, LLC	One stop		L + 6.75%	(a)		8.84%		04/2021		10,226				10,114				1.1			10,226
IMPLUS Footwear, LLC	One stop		L + 6.75%	(a)		8.84%		04/2021		1,800				1,781				0.2			1,800
Massage Envy, LLC*^#	One stop		L + 6.75%	(c)(f)		9.06%		09/2020		34,923				34,691				3.6			34,923
Massage Envy, LLC^	One stop		L + 6.75%	(c)(f)		9.08%		09/2020		99				98				—			99
Massage Envy, LLC^	One stop		L + 6.75%	(c)(f)		9.08%		09/2020		48				48				—			48
Massage Envy, LLC	One stop		L + 6.75%	(c)		9.08%		09/2020		42				41				—			42
Massage Envy, LLC^	One stop		L + 6.75%	(c)(f)		9.07%		09/2020		40				40				—			40
Massage Envy, LLC^	One stop		L + 6.75%	(c)(f)		9.11%		09/2020		38				38				—			38
Massage Envy, LLC^	One stop		L + 6.75%	(c)(f)		9.07%		09/2020		35				34				—			35
Massage Envy, LLC^	One stop		L + 6.75%	(c)(f)		9.10%		09/2020		19				19				—			19
Massage Envy, LLC^	One stop		L + 6.75%	(c)(f)		9.10%		09/2020		15				15				—			15
Massage Envy, LLC(5)	One stop		L + 6.75%			N/A(6)		09/2020		—				(1		)		—			—
Massage Envy, LLC(5)	One stop		L + 6.75%			N/A(6)		09/2020		—				(7		)		—			—
Orthotics Holdings, Inc.*#	One stop		L + 5.50%	(a)		7.59%		02/2020		8,226				8,180				0.8			8,062
Orthotics Holdings, Inc.*#(8)	One stop		L + 5.50%	(a)		7.59%		02/2020		1,348				1,341				0.1			1,322
Orthotics Holdings, Inc.(5)(8)	One stop		L + 5.50%			N/A(6)		02/2020		—				(1		)		—			—
Orthotics Holdings, Inc.(5)	One stop		L + 5.50%			N/A(6)		02/2020		—				(7		)		—			(4		)
Team Technologies Acquisition Company^	Senior loan		L + 5.00%	(c)(f)		7.36%		12/2018		4,253				4,252				0.4			4,243
Team Technologies Acquisition Company*	Senior loan		L + 5.50%	(c)(f)		7.86%		12/2018		784				783				0.1			794
Team Technologies Acquisition Company	Senior loan		P + 3.75%	(f)		8.75%		12/2018		72				72				—			72
										68,471				67,965				7.0			68,277
Personal, Food and Miscellaneous Services
Captain D's, LLC^	Senior loan		L + 4.50%	(a)		6.57%		12/2023		3,975				3,921				0.4			3,975
Captain D's, LLC	Senior loan		L + 4.50%	(a)		6.57%		12/2023		7				6				—			7
Community Veterinary Partners, LLC^	One stop		L + 5.50%	(b)		7.60%		10/2021		283				281				—			283
Community Veterinary Partners, LLC*	One stop		L + 5.50%	(b)		7.60%		10/2021		99				98				—			99
Community Veterinary Partners, LLC(5)	One stop		L + 5.50%			N/A(6)		10/2021		—				(4		)		—			—
PPV Intermediate Holdings II, LLC	One stop		N/A			7.90% PIK		05/2023		2				2				—			2
PPV Intermediate Holdings II, LLC(5)	One stop		L + 5.00%			N/A(6)		05/2023		—				(1		)		—			(1		)
PPV Intermediate Holdings II, LLC(5)	One stop		L + 5.00%			N/A(6)		05/2020		—				(7		)		—			(8		)
Ruby Slipper Cafe LLC, The	One stop		L + 7.50%	(c)		9.86%		01/2023		1,038				1,029				0.1			1,038
Ruby Slipper Cafe LLC, The	One stop		L + 7.50%	(c)		9.86%		01/2023		5				4				—			5
Ruby Slipper Cafe LLC, The	One stop		L + 7.50%			N/A(6)		01/2023		—				—				—			—
Southern Veterinary Partners, LLC#	One stop		L + 5.50%	(a)		7.59%		05/2025		3,880				3,819				0.4			3,880
Southern Veterinary Partners, LLC	One stop		L + 5.50%	(a)		7.59%		05/2025		232				229				—			232
Southern Veterinary Partners, LLC	One stop		L + 5.50%	(a)		7.59%		05/2025		173				171				—			173
Southern Veterinary Partners, LLC	One stop		L + 5.50%	(a)		7.59%		05/2023		88				86				—			88
Southern Veterinary Partners, LLC	One stop		L + 5.50%	(a)		7.59%		05/2025		77				76				—			77
Southern Veterinary Partners, LLC	One stop		L + 5.50%	(a)		7.59%		05/2025		67				66				—			67
Southern Veterinary Partners, LLC	One stop		L + 5.50%	(a)		7.59%		05/2025		50				48				—			50
Southern Veterinary Partners, LLC(5)	One stop		L + 5.50%			N/A(6)		05/2025		—				(3		)		—			—
Southern Veterinary Partners, LLC(5)	One stop		L + 5.50%			N/A(6)		05/2025		—				(10		)		—			(10		)
Vetcor Professional Practices LLC*^#	One stop		P + 5.25%	(f)		10.25%		04/2021		28,530				28,214				2.9			28,530
Vetcor Professional Practices LLC*	One stop		P + 5.25%	(f)		10.25%		04/2021		949				943				0.1			949
Vetcor Professional Practices LLC#	One stop		P + 5.25%	(f)		10.25%		04/2021		941				930				0.1			941
Vetcor Professional Practices LLC^	One stop		P + 5.25%	(f)		10.25%		04/2021		855				845				0.1			855
Vetcor Professional Practices LLC#	One stop		P + 5.25%	(f)		10.25%		04/2021		739				739				0.1			739
Vetcor Professional Practices LLC^	One stop		P + 5.25%	(f)		10.25%		04/2021		720				712				0.1			720
Vetcor Professional Practices LLC^	One stop		P + 5.25%	(f)		10.25%		04/2021		481				475				—			481
Vetcor Professional Practices LLC#	One stop		P + 5.25%	(f)		10.25%		04/2021		283				282				—			283
Vetcor Professional Practices LLC#	One stop		P + 5.25%	(f)		10.25%		04/2021		232				230				—			232

See Notes to Consolidated Financial Statements.

17

---

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2018

(In thousands)

	Investment Type		Spread Above Index(1)			Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets			Fair Value (4)
Personal, Food and Miscellaneous Services - (continued)
Vetcor Professional Practices LLC	One stop		P + 5.25%	(f)		10.25%		04/2021		$	151			$	141			—		%	$	151
Vetcor Professional Practices LLC	One stop		P + 5.25%	(f)		10.25%		04/2021		130				127				—			130
Veterinary Specialists of North America, LLC^	One stop		L + 5.50%	(c)		7.86%		07/2021		7,349				7,292				0.8			7,349
Veterinary Specialists of North America, LLC^	One stop		L + 5.50%	(a)		7.59%		07/2021		766				757				0.1			766
Veterinary Specialists of North America, LLC*	One stop		L + 5.50%	(a)		7.59%		07/2021		416				414				—			416
Veterinary Specialists of North America, LLC*	One stop		L + 5.50%	(a)		7.59%		07/2021		161				160				—			161
Veterinary Specialists of North America, LLC^	One stop		L + 5.50%	(a)		7.59%		07/2021		123				122				—			123
Veterinary Specialists of North America, LLC*	One stop		L + 5.50%	(a)		7.59%		07/2021		63				62				—			63
Veterinary Specialists of North America, LLC(5)	One stop		L + 5.50%			N/A(6)		07/2021		—				(2		)		—			—
Veterinary Specialists of North America, LLC(5)	One stop		L + 5.50%			N/A(6)		07/2021		—				(2		)		—			—
Wetzel's Pretzels, LLC*	One stop		L + 6.75%	(a)		8.73%		09/2021		8,971				8,843				0.9			8,904
Wetzel's Pretzels, LLC(5)	One stop		L + 6.75%			N/A(6)		09/2021		—				(1		)		—			—
										61,836				61,094				6.1			61,750
Printing and Publishing
Brandmuscle, Inc.^	Senior loan		L + 5.00%	(c)		7.33%		12/2021		620				615				0.1			624
Retail Stores
Batteries Plus Holding Corporation	One stop		L + 6.75%	(a)(f)		8.84%		07/2022		11,963				11,756				1.2			11,963
Batteries Plus Holding Corporation	One stop		L + 6.75%	(a)		8.81%		07/2022		15				13				—			15
Cycle Gear, Inc.^	One stop		L + 6.50%	(c)		8.81%		01/2020		10,347				10,278				1.1			10,347
Cycle Gear, Inc.^	One stop		L + 6.50%	(c)		8.81%		01/2020		604				601				0.1			604
Cycle Gear, Inc.(5)	One stop		L + 6.50%			N/A(6)		01/2020		—				(8		)		—			—
DTLR, Inc.*^#	One stop		L + 6.50%	(c)		8.86%		08/2022		22,788				22,506				2.4			22,788
Elite Sportswear, L.P.	Senior loan		L + 5.75%	(c)		8.08%		06/2020		6,889				6,824				0.7			6,889
Elite Sportswear, L.P.	Senior loan		L + 5.75%	(c)		8.08%		06/2020		2,770				2,744				0.3			2,770
Elite Sportswear, L.P.	Senior loan		L + 5.75%	(c)		8.08%		06/2020		1,425				1,415				0.2			1,425
Elite Sportswear, L.P.	Senior loan		L + 5.75%	(a)		7.84%		06/2020		784				780				0.1			784
Elite Sportswear, L.P.*	Senior loan		L + 5.75%	(c)		8.08%		06/2020		468				465				0.1			468
Elite Sportswear, L.P.	Senior loan		L + 5.75%	(c)		8.08%		06/2020		216				214				—			216
Elite Sportswear, L.P.*	Senior loan		L + 5.75%	(c)		8.08%		06/2020		207				205				—			207
Elite Sportswear, L.P.	One stop		P + 4.50%	(f)		9.50%		06/2020		20				20				—			20
Feeders Supply Company, LLC	One stop		L + 5.75%	(a)		7.84%		04/2021		4,839				4,777				0.5			4,839
Feeders Supply Company, LLC	Subordinated debt		N/A			12.50% cash/7.00% PIK		04/2021		63				63				—			63
Feeders Supply Company, LLC	One stop		L + 5.75%			N/A(6)		04/2021		—				—				—			—
Marshall Retail Group LLC, The^#	One stop		L + 6.00%	(c)		8.31%		08/2020		11,922				11,867				1.2			11,922
Marshall Retail Group LLC, The	One stop		P + 4.75%	(f)		9.75%		08/2019		366				356				—			366
Mills Fleet Farm Group LLC*^	One stop		L + 5.50%	(a)		7.59%		02/2022		1,815				1,738				0.2			1,815
Paper Source, Inc.^#	One stop		L + 6.25%	(c)		8.58%		09/2019		12,255				12,207				1.3			12,255
Paper Source, Inc.#	One stop		L + 6.25%	(c)		8.58%		09/2019		1,628				1,619				0.2			1,628
Paper Source, Inc.	One stop		P + 5.00%	(f)		10.00%		09/2019		423				416				—			423
Pet Holdings ULC*^(8)(9)	One stop		L + 5.50%	(c)		7.81%		07/2022		14,763				14,563				1.5			14,763
Pet Holdings ULC*^(8)(9)	One stop		L + 5.50%	(b)(c)		7.81%		07/2022		100				99				—			100
Pet Holdings ULC(5)(9)	One stop		L + 5.50%			N/A(6)		07/2022		—				(2		)		—			—
PetPeople Enterprises, LLC^	One stop		L + 5.50%	(a)		7.60%		09/2023		3,122				3,088				0.3			3,122
PetPeople Enterprises, LLC	One stop		N/A			8.25% PIK		01/2019		155				155				—			166
PetPeople Enterprises, LLC	One stop		L + 5.50%			N/A(6)		09/2023		—				—				—			—
PetPeople Enterprises, LLC(5)	One stop		L + 5.50%			N/A(6)		09/2023		—				(1		)		—			—
										109,947				108,758				11.4			109,958
Telecommunications
NetMotion Wireless Holdings, Inc.*^	One stop		L + 6.25%	(c)		8.58%		10/2021		6,409				6,321				0.7			6,409
NetMotion Wireless Holdings, Inc.(5)	One stop		L + 6.50%			N/A(6)		10/2021		—				(1		)		—			—
										6,409				6,320				0.7			6,409

See Notes to Consolidated Financial Statements.

18

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Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2018

(In thousands)

	Investment Type		Spread Above Index(1)			Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets			Fair Value (4)
Textiles and Leather
SHO Holding I Corporation*	Senior loan		L + 5.00%	(c)		7.36%		10/2022		$	2,216			$	2,184			0.2		%	$	2,128
SHO Holding I Corporation	Senior loan		L + 4.00%	(c)		6.31%		10/2021		15				15				—			12
										2,231				2,199				0.2			2,140
Utilities
Arcos, LLC	One stop		L + 6.00%	(c)		8.33%		02/2021		3,553				3,516				0.4			3,553
Arcos, LLC	One stop		L + 6.00%			N/A(6)		02/2021		—				—				—			—
										3,553				3,516				0.4			3,553
Total non-controlled/non-affiliate company debt investments										$	1,671,125			$	1,651,673			171.1		%	$	1,658,319
Equity investments (10)(11)
Aerospace and Defense
NTS Technical Systems	Common stock		N/A			N/A		N/A		2				$	1,506			0.1		%	$	545
NTS Technical Systems	Preferred stock		N/A			N/A		N/A		—				256				—			310
NTS Technical Systems	Preferred stock		N/A			N/A		N/A		—				128				—			172
Tresys Technology Holdings, Inc.(7)	Common stock		N/A			N/A		N/A		295				295				—			—
Whitcraft LLC	Common stock		N/A			N/A		N/A		4				375				0.1			521
														2,560				0.2			1,548
Automobile
Grease Monkey International, LLC	LLC units		N/A			N/A		N/A		354				354				—			407
Polk Acquisition Corp.	LP interest		N/A			N/A		N/A		1				144				—			93
Quick Quack Car Wash Holdings, LLC	LLC units		N/A			N/A		N/A		—				207				—			207
														705				—			707
Beverage, Food and Tobacco
Benihana, Inc.	LLC units		N/A			N/A		N/A		43				699				0.1			886
C. J. Foods, Inc.	Preferred stock		N/A			N/A		N/A		—				75				0.1			500
Cafe Rio Holding, Inc.	Common stock		N/A			N/A		N/A		2				224				—			243
Global ID Corporation	LLC interest		N/A			N/A		N/A		2				242				—			300
Hopdoddy Holdings, LLC	LLC units		N/A			N/A		N/A		27				130				—			128
Hopdoddy Holdings, LLC	LLC units		N/A			N/A		N/A		12				36				—			36
Mendocino Farms, LLC	Common stock		N/A			N/A		N/A		11				50				—			50
Purfoods, LLC	LLC interest		N/A			N/A		N/A		381				381				0.1			460
Rubio's Restaurants, Inc.	Preferred stock		N/A			N/A		N/A		2				945				0.2			1,486
Uinta Brewing Company(7)	LP interest		N/A			N/A		N/A		462				462				—			—
														3,244				0.5			4,089
Buildings and Real Estate
Brooks Equipment Company, LLC	Common stock		N/A			N/A		N/A		10				1,021				0.3			2,646
Chemicals, Plastics and Rubber
Flexan, LLC	Preferred stock		N/A			N/A		N/A		—				90				—			72
Flexan, LLC	Common stock		N/A			N/A		N/A		1				—				—			—
														90				—			72
Diversified/Conglomerate Manufacturing
Inventus Power, Inc.	Preferred stock		N/A			N/A		N/A		—				370				—			—
Inventus Power, Inc.	LLC units		N/A			N/A		N/A		—				54				—			54
Inventus Power, Inc.	Common stock		N/A			N/A		N/A		—				—				—			—
Reladyne, Inc.	LP interest		N/A			N/A		N/A		—				249				0.1			515
Sunless Merger Sub, Inc.	LP interest		N/A			N/A		N/A		160				160				—			—
														833				0.1			569
Diversified/Conglomerate Service
Accela, Inc.	LLC units		N/A			N/A		N/A		296				296				—			314
Agility Recovery Solutions Inc.	Preferred stock		N/A			N/A		N/A		67				341				0.1			407
Apttus Corporation	Preferred stock		N/A			N/A		N/A		18				263				—			280

See Notes to Consolidated Financial Statements.

19

---

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2018

(In thousands)

	Investment Type		Spread Above Index(1)			Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets			Fair Value (4)
Diversified/Conglomerate Service - (continued)
Apttus Corporation	Warrant		N/A			N/A		N/A		34				$	194			—		%	$	211
Cloudbees, Inc.	Preferred stock		N/A			N/A		N/A		33				207				—			207
Cloudbees, Inc.	Warrant		N/A			N/A		N/A		29				39				—			39
Confluence Technologies, Inc.	LLC interest		N/A			N/A		N/A		1				87				—			87
Connexin Software, Inc.	LLC interest		N/A			N/A		N/A		69				69				—			69
Digital Guardian, Inc.	Warrant		N/A			N/A		N/A		57				10				—			10
DISA Holdings Acquisition Subsidiary Corp.	Common stock		N/A			N/A		N/A		—				154				—			196
GS Acquisitionco, Inc.	LP interest		N/A			N/A		N/A		1				98				—			98
HealthcareSource HR, Inc.	LLC interest		N/A			N/A		N/A		—				348				0.1			325
Host Analytics, Inc.	Warrant		N/A			N/A		N/A		368				135				0.1			454
Maverick Bidco Inc.	LLC units		N/A			N/A		N/A		1				369				—			364
MMan Acquisition Co.	LP interest		N/A			N/A		N/A		263				263				—			254
Net Health Acquisition Corp.	LP interest		N/A			N/A		N/A		—				346				—			360
Nexus Brands Group, Inc.	LP interest		N/A			N/A		N/A		—				136				—			158
Project Alpha Intermediate Holding, Inc.	Common stock		N/A			N/A		N/A		—				417				0.1			435
Project Alpha Intermediate Holding, Inc.	Common stock		N/A			N/A		N/A		103				4				—			—
Property Brands, Inc.	Preferred stock		N/A			N/A		N/A		28				284				—			294
Switchfly, Inc.	Warrant		N/A			N/A		N/A		64				89				—			77
Valant Medical Solutions, Inc.	Warrant		N/A			N/A		N/A		5				68				—			56
Vendavo, Inc.	Preferred stock		N/A			N/A		N/A		1,017				1,017				0.1			1,058
Verisys Corporation	LLC interest		N/A			N/A		N/A		261				261				—			274
Vitalyst, LLC	Preferred stock		N/A			N/A		N/A		—				61				—			94
Vitalyst, LLC	Common stock		N/A			N/A		N/A		1				7				—			—
Workforce Software, LLC	LLC units		N/A			N/A		N/A		323				323				0.1			392
Xmatters, Inc. and Alarmpoint, Inc.	Preferred stock		N/A			N/A		N/A		242				221				—			260
Xmatters, Inc. and Alarmpoint, Inc.	Warrant		N/A			N/A		N/A		43				34				—			21
														6,141				0.6			6,794
Ecological
Pace Analytical Services, LLC	Common stock		N/A			N/A		N/A		3				304				—			271
Electronics
Diligent Corporation(12)	Preferred stock		N/A			N/A		N/A		56				1				—			151
Project Silverback Holdings Corp.	Preferred stock		N/A			N/A		N/A		3				6				—			142
SEI, Inc.	LLC units		N/A			N/A		N/A		340				265				0.1			617
Sloan Company, Inc., The	LLC units		N/A			N/A		N/A		—				152				—			—
Sloan Company, Inc., The	LLC units		N/A			N/A		N/A		2				14				—			—
														438				0.1			910
Grocery
MyWebGrocer, Inc.	LLC units		N/A			N/A		N/A		1,418				1,446				0.2			1,575
MyWebGrocer, Inc.	Preferred stock		N/A			N/A		N/A		71				165				—			243
														1,611				0.2			1,818
Healthcare, Education and Childcare
Advanced Pain Management Holdings, Inc.	Common stock		N/A			N/A		N/A		67				67				—			—
Advanced Pain Management Holdings, Inc.	Preferred stock		N/A			N/A		N/A		1				64				—			—
BIORECLAMATIONIVT, LLC	LLC units		N/A			N/A		N/A		—				407				0.1			682
Advanced Pain Management Holdings, Inc.	Preferred stock		N/A			N/A		N/A		8				829				—			—
Active Day, Inc.	LLC interest		N/A			N/A		N/A		1				614				0.1			558
Acuity Eyecare Holdings, LLC	LLC interest		N/A			N/A		N/A		198				198				—			187
ADCS Clinics Intermediate Holdings, LLC	Preferred stock		N/A			N/A		N/A		1				579				0.1			361
ADCS Clinics Intermediate Holdings, LLC	Common stock		N/A			N/A		N/A		—				6				—			—
California Cryobank, LLC	LLC units		N/A			N/A		N/A		—				28				—			38
California Cryobank, LLC	LLC units		N/A			N/A		N/A		—				11				—			13

See Notes to Consolidated Financial Statements.

20

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Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2018

(In thousands)

	Investment Type		Spread Above Index(1)			Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets			Fair Value (4)
Healthcare, Education and Childcare - (continued)
California Cryobank, LLC	LLC units		N/A			N/A		N/A		—				$	—			—		%	$	54
DCA Investment Holding, LLC	LLC units		N/A			N/A		N/A		8,637				864				0.1			1,078
DCA Investment Holding, LLC	LLC units		N/A			N/A		N/A		87				9				—			79
Deca Dental Management LLC	LLC units		N/A			N/A		N/A		357				357				0.1			419
Dental Holdings Corporation	LLC units		N/A			N/A		N/A		883				831				0.1			752
Elite Dental Partners LLC	Common stock		N/A			N/A		N/A		—				360				—			360
Encore GC Acquisition, LLC	LLC units		N/A			N/A		N/A		18				182				—			232
Encore GC Acquisition, LLC	LLC units		N/A			N/A		N/A		18				—				—			—
ERG Buyer, LLC	LLC units		N/A			N/A		N/A		—				349				0.1			349
ERG Buyer, LLC	LLC units		N/A			N/A		N/A		4				4				—			3
Eyecare Services Partners Holdings LLC	LLC units		N/A			N/A		N/A		—				133				—			144
Eyecare Services Partners Holdings LLC	LLC units		N/A			N/A		N/A		—				1				—			84
G & H Wire Company, Inc.	LLC interest		N/A			N/A		N/A		148				148				—			112
IntegraMed America, Inc.	LLC interest		N/A			N/A		N/A		—				417				—			194
Kareo, Inc.	Warrant		N/A			N/A		N/A		23				160				—			3
Katena Holdings, Inc.	LLC units		N/A			N/A		N/A		—				387				—			284
Lombart Brothers, Inc.	Common stock		N/A			N/A		N/A		1				149				—			100
MWD Management, LLC & MWD Services, Inc.	LLC interest		N/A			N/A		N/A		182				182				—			155
Oliver Street Dermatology Holdings, LLC	LLC units		N/A			N/A		N/A		234				234				0.1			335
Pentec Acquisition Sub, Inc.	Preferred stock		N/A			N/A		N/A		1				116				—			203
Pinnacle Treatment Centers, Inc.	Preferred stock		N/A			N/A		N/A		—				231				—			255
Pinnacle Treatment Centers, Inc.	Common stock		N/A			N/A		N/A		2				2				—			—
Radiology Partners, Inc.	LLC units		N/A			N/A		N/A		43				85				—			179
Radiology Partners, Inc.	LLC units		N/A			N/A		N/A		11				76				—			45
Reliant Pro ReHab, LLC	Preferred stock		N/A			N/A		N/A		2				183				0.1			867
RXH Buyer Corporation	LP interest		N/A			N/A		N/A		7				683				—			279
Sage Dental Management, LLC	LLC units		N/A			N/A		N/A		—				249				—			79
Sage Dental Management, LLC	LLC units		N/A			N/A		N/A		3				3				—			—
SLMP, LLC	LLC interest		N/A			N/A		N/A		289				289				0.1			360
Spear Education, LLC	LLC units		N/A			N/A		N/A		—				62				—			74
Spear Education, LLC	LLC units		N/A			N/A		N/A		1				1				—			25
SSH Corporation	Common stock		N/A			N/A		N/A		—				40				—			95
Summit Behavioral Healthcare, LLC	LLC interest		N/A			N/A		N/A		1				68				—			60
Summit Behavioral Healthcare, LLC	LLC interest		N/A			N/A		N/A		1				—				—			—
Surgical Information Systems, LLC	Common stock		N/A			N/A		N/A		4				414				0.1			583
U.S. Renal Care, Inc.	LP interest		N/A			N/A		N/A		1				2,665				0.2			1,689
WHCG Management, LLC	LLC interest		N/A			N/A		N/A		—				220				—			148
														12,957				1.3			11,517
Insurance
Captive Resources Midco, LLC	LLC units		N/A			N/A		N/A		1				—				—			333
Internet Pipeline, Inc.	Preferred stock		N/A			N/A		N/A		—				72				—			97
Internet Pipeline, Inc.	Common stock		N/A			N/A		N/A		44				1				—			160
														73				—			590
Leisure, Amusement, Motion Pictures, Entertainment
LMP TR Holdings, LLC	LLC units		N/A			N/A		N/A		712				712				0.1			1,180
PADI Holdco, Inc.	LLC units		N/A			N/A		N/A		—				414				—			410
Titan Fitness, LLC	LLC units		N/A			N/A		N/A		7				712				0.1			1,066
														1,838				0.2			2,656
Personal and Non Durable Consumer Products (Mfg. Only)
Georgica Pine Clothiers, LLC	LLC units		N/A			N/A		N/A		11				106				—			151
Massage Envy, LLC	LLC interest		N/A			N/A		N/A		749				210				0.1			1,164
Team Technologies Acquisition Company	Common stock		N/A			N/A		N/A		—				114				—			272
														430				0.1			1,587

See Notes to Consolidated Financial Statements.

21

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Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2018

(In thousands)

	Investment Type		Spread Above Index(1)			Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets			Fair Value (4)
Personal, Food and Miscellaneous Services
Captain D's, LLC	LLC interest		N/A			N/A		N/A		70				$	70			—		%	$	72
Community Veterinary Partners, LLC	Common stock		N/A			N/A		N/A		2				244				—			284
PPV Intermediate Holdings II, LLC	LLC interest		N/A			N/A		N/A		13				13				—			13
R.G. Barry Corporation	Preferred stock		N/A			N/A		N/A		—				161				—			156
Ruby Slipper Cafe LLC, The	LLC units		N/A			N/A		N/A		12				123				—			123
Southern Veterinary Partners, LLC	LLC units		N/A			N/A		N/A		—				216				—			319
Southern Veterinary Partners, LLC	LLC units		N/A			N/A		N/A		64				2				—			—
Vetcor Professional Practices LLC	LLC units		N/A			N/A		N/A		766				360				0.1			436
Vetcor Professional Practices LLC	LLC units		N/A			N/A		N/A		85				85				0.2			2,352
Veterinary Specialists of North America, LLC	LLC units		N/A			N/A		N/A		—				106				—			163
Wetzel's Pretzels, LLC	Common stock		N/A			N/A		N/A		—				160				—			222
														1,540				0.3			4,140
Printing and Publishing
Brandmuscle, Inc.	LLC interest		N/A			N/A		N/A		—				240				—			195
Retail Stores
Batteries Plus Holding Corporation	LP interest		N/A			N/A		N/A		5				529				0.1			780
Cycle Gear, Inc.	LLC units		N/A			N/A		N/A		19				248				0.1			453
DTLR, Inc.	LLC interest		N/A			N/A		N/A		4				411				0.1			619
Elite Sportswear, L.P.	LLC interest		N/A			N/A		N/A		—				158				—			53
Feeders Supply Company, LLC	Preferred stock		N/A			N/A		N/A		2				192				—			235
Feeders Supply Company, LLC	Common stock		N/A			N/A		N/A		—				—				—			59
Marshall Retail Group LLC, The	LLC units		N/A			N/A		N/A		15				154				—			103
Paper Source, Inc.	Common stock		N/A			N/A		N/A		8				1,387				0.1			685
Pet Holdings ULC(8)(9)	LP interest		N/A			N/A		N/A		455				386				0.1			533
														3,465				0.5			3,520
Total non-controlled/non-affiliate company equity investments														$	37,490			4.4		%	$	43,629
Total non-controlled/non-affiliate company investments										$	1,671,125			$	1,689,163			175.5		%	$	1,701,948
Non-controlled affiliate company investments(13)
Debt investments
Mining, Steel, Iron and Non-Precious Metals
Benetech, Inc.*(8)	One stop		L + 11.00%	(a)		11.09% cash/2.00% PIK		05/2019		$	4,302			$	4,299			0.4		%	$	3,872
Benetech, Inc.(8)	One stop		P + 9.75%	(a)(f)		12.66% cash/2.00% PIK		05/2019		220				220				—			106
										4,522				4,519				0.4			3,978
Total non-controlled affiliate company debt investments										$	4,522			$	4,519			0.4		%	$	3,978
Equity Investments (10)(11)
Mining, Steel, Iron and Non-Precious Metals
Benetech, Inc.(8)	LLC interest		N/A			N/A		N/A		56				$	—			—		%	$	10
Benetech, Inc.(8)	LLC interest		N/A			N/A		N/A		56				—				—			—
														—				—			10
Total non-controlled affiliate company equity investments														$	—			—		%	$	10
Total non-controlled affiliate company investments										$	4,522			$	4,519			0.4		%	$	3,988

See Notes to Consolidated Financial Statements.

22

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Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2018

(In thousands)

	Investment Type		Spread Above Index(1)			Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets			Fair Value (4)
Controlled affiliate company investments(14)
Equity investments
Investment Funds and Vehicles
Senior Loan Fund LLC(8)	LLC interest		N/A			N/A		N/A		95,532				$	95,532			9.6		%	$	92,579
Total controlled affiliate company equity investments														$	95,532			9.6		%	$	92,579
Total investments										$	1,675,647			$	1,789,214			185.5		%	$	1,798,515
Cash and cash equivalents, foreign currencies and restricted cash and cash equivalents
Cash, foreign currencies and restricted cash														$	54,729			5.7		%	$	54,729
BlackRock Liquidity Funds T-Fund Institutional Shares (CUSIP 09248U718)						1.77% (16)								17,478				1.8			17,478
Total cash and cash equivalents, foreign currencies and restricted cash and cash equivalents														$	72,207			7.5		%	$	72,207
Total investments and cash and cash equivalents, foreign currencies and restricted cash and cash equivalents														$	1,861,421			193.0		%	$	1,870,722

*		Denotes that all or a portion of the investment secures the notes offered in the 2010 Debt Securitization (as defined in Note 6).
^		Denotes that all or a portion of the investment secures the notes offered in the 2014 Debt Securitization (as defined in Note 6).
#		Denotes that all or a portion of the investment collateralizes the Credit Facility (as defined in Note 6).

(1)

The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate ("LIBOR" or "L"), Euro Interbank Offered Rate ("EURIBOR" or "E") or Prime ("P") and which reset daily, monthly, quarterly, semiannually, or annually. For each, the Company has provided the spread over LIBOR, EURIBOR or Prime and the weighted average current interest rate in effect as of June 30, 2018. Certain investments are subject to a LIBOR, EURIBOR or Prime interest rate floor. For fixed rate loans, a spread above a reference rate is not applicable. Listed below are the index rates as of June 29, 2018. The actual index rate for each loan listed may not be the applicable index rate outstanding as of June 29, 2018, as the loan may have priced or repriced based on an index rate prior to June 29, 2018, which was the last business day of the period on which LIBOR or EURIBOR was determined.

^(a) Denotes that all or a portion of the loan was indexed to the 30-day LIBOR, which was 2.09% as of June 29, 2018.

^(b) Denotes that all or a portion of the loan was indexed to the 60-day LIBOR, which was 2.17% as of June 29, 2018.

^(c) Denotes that all or a portion of the loan was indexed to the 90-day LIBOR, which was 2.34% as of June 29, 2018.

^(d) Denotes that all or a portion of the loan was indexed to the 180-day LIBOR, which was 2.50% as of June 29, 2018.

^(e) Denotes that all or a portion of the loan was indexed to the 360-day LIBOR, which was 2.76% as of June 29, 2018.

^(f) Denotes that all or a portion of the loan was indexed to the Prime rate, which was 5.00% as of June 29, 2018.

^(g) Denotes that all or a portion of the loan was indexed to the 90-day EURIBOR, which was -0.32% as of June 29, 2018.

(2)	For portfolio companies with multiple interest rate contracts, the interest rate shown is a weighted average current interest rate in effect as of June 30, 2018.

(3)	The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.

(4)	The fair value of the investment was valued using significant unobservable inputs. See Note 5. Fair Value Measurements.

(5)	The negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par. The negative amortized cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan.

(6)	The entire commitment was unfunded as of June 30, 2018. As such, no interest is being earned on this investment. The investment may be subject to an unused facility fee.

(7)	Loan was on non-accrual status as of June 30, 2018, meaning that the Company has ceased recognizing interest income on the loan.

(8)

The investment is treated as a non-qualifying asset 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. As of June 30, 2018, total non-qualifying assets at fair value represented 6.5% of the Company's assets calculated in accordance with the 1940 Act.

(9)	The headquarters of this portfolio company is located in Canada.

(10)	Equity investments are non-income producing securities unless otherwise noted.

(11)	Ownership of certain equity investments may occur through a holding company or partnership.

(12)	The Company holds an equity investment that entitles it to receive preferential dividends.

See Notes to Consolidated Financial Statements.

23

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Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2018

(In thousands)

(13)	As defined in the 1940 Act, the Company is deemed to be an "affiliated person" of the portfolio company as the Company owns five percent or more of the portfolio company's voting securities ("non-controlled affiliate"). Transactions related to investments in non-controlled affiliates for the nine months ended June 30, 2018 were as follows:

Portfolio Company		Fair value as of September 30, 2017				Purchases (cost)(h)				Redemptions (cost)				Transfer in (out)				Discount accretion				Net change in unrealized gain/(loss)				Fair value as of June 30, 2018				Net realized gain/(loss)				Interest and fee income				Dividend income
Benetech, Inc.		$	3,707			$	196			$	(484	)		$	—			$	1			$	568			$	3,988			$	—			$	475			$	—
Total Non-Controlled Affiliates		$	3,707			$	196			$	(484	)		$	—			$	1			$	568			$	3,988			$	—			$	475			$	—

(h)	Purchases at cost includes amounts related to payment-in-kind ("PIK") interest capitalized and added to the principal balance of the respective loans.

(14)

As defined in the 1940 Act, the Company is deemed to be both an "affiliated person" of and "control" this portfolio company as the Company owns more than 25% of the portfolio company's outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement) ("controlled affiliate"). Transactions related to investments in controlled affiliates for the nine months ended June 30, 2018 were as follows:

Portfolio Company		Fair value as of September 30, 2017				Purchases (cost)				Redemptions (cost)				Transfer in (out)				Discount accretion				Net change in unrealized gain/(loss)				Fair value as of June 30, 2018				Net realized gain/(loss)				Interest and fee income				Dividend income
Senior Loan Fund LLC(i)		$	95,015			$	6,738			$	(8,663	)		$	—			$	—			$	(511	)		$	92,579			$	—			$	—			$	5,868
Total Controlled Affiliates		$	95,015			$	6,738			$	(8,663	)		$	—			$	—			$	(511	)		$	92,579			$	—			$	—			$	5,868

(i)	Together with RGA Reinsurance Company ("RGA"), the Company co-invests through Senior Loan Fund LLC ("SLF"). SLF is capitalized as transactions are completed and all portfolio and investment decisions in respect to SLF must be approved by the SLF investment committee consisting of two representatives of the Company and RGA (with unanimous approval required from (i) one representative of each of the Company and RGA or (ii) both representatives of each of the Company and RGA). Therefore, although the Company owns more than 25% of the voting securities of SLF, the Company does not believe that it has control over SLF for purposes of the 1940 Act or otherwise.

(15)	The Company receives quarterly profit distributions from its equity investment in SLF. See Note 4. Investments.

(16)	The rate shown is the annualized seven-day yield as of June 30, 2018.

(17)	The sale of a portion of this loan does not qualify for sale accounting under ASC Topic 860 - Transfers and Servicing ("ASC Topic 860"), and therefore, the entire one stop loan asset remains in the Consolidated Schedule of Investments. See Note 6. Borrowings.

(18)	Loan is denominated in foreign currency and is translated into U.S. dollars as of the valuation date or the date of the transaction. See Note 2. Significant Accounting Policies and Recent Accounting Updates - Foreign Currency Transactions.

See Notes to Consolidated Financial Statements.

24

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Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments

September 30, 2017

(In thousands)

	Investment		Spread Above Index(1)		Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets				Fair Value (16)
Investments
Non-controlled/non-affiliate company investments
Debt investments
Aerospace and Defense
ILC Dover, LP*^#	One stop		L + 9.00%	(a)	8.24% cash/2.00% PIK		03/2020		$	17,617			$	17,521			1.8			%	$	17,617
ILC Dover, LP	One stop		L + 9.00%	(a)(c)	8.24% cash/2.00% PIK		03/2019		801				797				0.1				801
NTS Technical Systems*^#	One stop		L + 6.25%	(a)	7.49%		06/2021		21,773				21,486				2.3				21,773
NTS Technical Systems(4)	One stop		L + 6.25%		N/A(5)		06/2021		—				(72		)		—				—
NTS Technical Systems(4)	One stop		L + 6.25%		N/A(5)		06/2021		—				(120		)		—				—
Tresys Technology Holdings, Inc.(6)	One stop		L + 6.75%	(c)	8.08%		12/2017		3,899				3,845				0.1				1,170
Tresys Technology Holdings, Inc.(6)	One stop		L + 6.75%	(c)	8.06%		12/2017		659				658				0.1				659
Tronair Parent, Inc.#	Senior loan		L + 4.75%	(c)(e)	6.06%		09/2023		191				189				—				191
Tronair Parent, Inc.	Senior loan		L + 4.50%	(c)	5.81%		09/2021		32				31				—				31
Whitcraft LLC*^#	One stop		L + 6.25%	(c)	7.58%		04/2023		12,564				12,390				1.3				12,564
Whitcraft LLC	One stop		P + 5.25%	(e)	9.50%		04/2023		17				16				—				17
Whitcraft LLC(4)	One stop		L + 6.25%		N/A(5)		04/2023		—				(5		)		—				—
									57,553				56,736				5.7				54,823
Automobile
Dent Wizard International Corporation*	Senior loan		L + 4.75%	(a)	5.98%		04/2020		4,522				4,499				0.5				4,522
OEConnection LLC*	Senior loan		L + 5.00%	(c)	6.33%		06/2022		4,834				4,735				0.5				4,852
OEConnection LLC^	Senior loan		L + 4.75%	(c)	6.08%		06/2023		2,590				2,565				0.3				2,573
OEConnection LLC(4)	Senior loan		L + 5.00%		N/A(5)		06/2021		—				(1		)		—				—
T5 Merger Corporation*^	One stop		L + 6.25%	(a)	7.49%		03/2022		4,380				4,312				0.4				4,380
T5 Merger Corporation*	One stop		L + 6.25%	(a)	7.48%		03/2022		190				188				—				190
T5 Merger Corporation*	One stop		L + 6.25%	(a)	7.48%		03/2022		60				59				—				60
T5 Merger Corporation	One stop		L + 6.50%	(a)	7.74%		03/2022		8				6				—				8
									16,584				16,363				1.7				16,585
Banking
HedgeServ Holding L.P.*#	One stop		L + 8.00%	(c)	7.23% cash/2.00% PIK		02/2019		17,182				17,147				1.8				17,182
HedgeServ Holding L.P.(4)	One stop		L + 6.00%		N/A(5)		02/2019		—				(3		)		—				—
									17,182				17,144				1.8				17,182
Beverage, Food and Tobacco
Abita Brewing Co., L.L.C.	One stop		L + 5.75%	(a)	6.99%		04/2021		7,763				7,655				0.8				7,530
Abita Brewing Co., L.L.C.(4)	One stop		L + 5.75%		N/A(5)		04/2021		—				(1		)		—				(2		)
ABP Corporation*	Senior loan		L + 4.75%	(c)	6.07%		09/2018		4,647				4,632				0.5				4,647
ABP Corporation	Senior loan		P + 3.50%	(e)	7.75%		09/2018		334				332				—				334
Benihana, Inc.*^	One stop		L + 7.00%	(a)(c)	8.32%		01/2019		16,099				15,945				1.7				15,951
Benihana, Inc.	One stop		L + 7.00%	(c)(e)	9.16%		07/2018		1,726				1,711				0.2				1,706
C. J. Foods, Inc.*^	One stop		L + 6.25%	(c)	7.58%		05/2019		5,205				5,164				0.5				5,205
C. J. Foods, Inc.	One stop		L + 6.25%	(c)	7.58%		05/2019		656				651				0.1				656
C. J. Foods, Inc.	One stop		L + 6.25%	(c)	7.56%		05/2019		129				125				—				129
Cafe Rio Holding, Inc.*^	One stop		L + 5.75%	(c)	7.08%		09/2023		10,475				10,294				1.1				10,371
Cafe Rio Holding, Inc.(4)	One stop		L + 5.75%		N/A(5)		09/2023		—				(2		)		—				(1		)
Cafe Rio Holding, Inc.(4)	One stop		L + 5.75%		N/A(5)		09/2023		—				(5		)		—				(3		)
Firebirds International, LLC*	One stop		L + 5.75%	(c)	7.06%		05/2018		1,063				1,058				0.1				1,063
Firebirds International, LLC*	One stop		L + 5.75%	(c)	7.06%		05/2018		299				297				—				299
Firebirds International, LLC^	One stop		L + 5.75%	(c)	7.06%		12/2018		96				95				—				96
Firebirds International, LLC	One stop		L + 5.75%		N/A(5)		12/2018		—				—				—				—

See Notes to Consolidated Financial Statements.

25

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Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2017

(In thousands)

	Investment		Spread Above Index(1)		Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets				Fair Value (16)
Beverage, Food and Tobacco - (continued)
Firebirds International, LLC(4)	One stop		L + 5.75%		N/A(5)		05/2018		$	—			$	(1	)		—			%	$	—
FWR Holding Corporation^	One stop		L + 6.00%	(c)	7.40%		08/2023		5,312				5,234				0.6				5,259
FWR Holding Corporation	One stop		L + 6.00%	(a)(c)	7.28%		08/2023		18				17				—				18
FWR Holding Corporation(4)	One stop		L + 6.00%		N/A(5)		08/2023		—				(2		)		—				(2		)
Global Franchise Group, LLC*	Senior loan		L + 5.75%	(c)	7.07%		12/2019		3,530				3,496				0.4				3,495
Global Franchise Group, LLC	Senior loan		L + 5.75%		N/A(5)		12/2019		—				—				—				—
Hopdoddy Holdings, LLC	One stop		L + 8.00%	(a)	9.24%		08/2020		653				645				0.1				653
Hopdoddy Holdings, LLC	One stop		L + 8.00%	(a)	9.24%		08/2020		266				265				—				266
Hopdoddy Holdings, LLC	One stop		L + 8.00%		N/A(5)		08/2020		—				—				—				—
Julio & Sons Company	One stop		L + 5.50%		N/A(5)		12/2018		—				—				—				—
Mid-America Pet Food, L.L.C.^	One stop		L + 5.50%	(c)	6.83%		12/2021		5,640				5,568				0.6				5,640
Mid-America Pet Food, L.L.C.(4)	One stop		L + 5.50%		N/A(5)		12/2021		—				(1		)		—				—
NBC Intermediate, LLC #	Senior loan		L + 4.50%	(a)	5.74%		09/2023		2,288				2,265				0.2				2,265
NBC Intermediate, LLC	Senior loan		L + 4.50%		N/A(5)		09/2023		—				—				—				—
P&P Food Safety US Acquisition, Inc.*	One stop		L + 6.50%	(c)	7.82%		11/2021		4,126				4,083				0.4				4,126
P&P Food Safety US Acquisition, Inc.	One stop		P + 5.25%	(e)	9.50%		11/2021		13				13				—				13
Purfoods, LLC	One stop		L + 6.25%	(c)	7.57%		05/2021		8,561				8,407				0.9				8,561
Purfoods, LLC	One stop		N/A		7.00% PIK		05/2026		109				109				—				112
Purfoods, LLC	One stop		L + 6.25%	(a)(c)	7.55%		05/2021		70				69				—				70
Purfoods, LLC	One stop		L + 6.25%	(c)	7.58%		05/2021		15				15				—				15
Purfoods, LLC	One stop		L + 6.25%	(a)	7.49%		05/2021		15				15				—				15
Purfoods, LLC	One stop		L + 6.25%	(c)	7.58%		05/2021		14				14				—				14
Purfoods, LLC	One stop		L + 6.25%	(c)	7.58%		05/2021		11				11				—				11
Purfoods, LLC	One stop		L + 6.25%	(c)	7.58%		05/2021		10				10				—				10
Restaurant Holding Company, LLC#	Senior loan		L + 7.75%	(a)	8.99%		02/2019		4,469				4,455				0.4				4,246
Rubio's Restaurants, Inc.*^	Senior loan		L + 4.75%	(c)	6.07%		11/2018		8,828				8,807				0.9				8,828
Smashburger Finance LLC	Senior loan		L + 5.50%	(c)	6.83%		05/2018		79				79				—				69
Smashburger Finance LLC(4)	Senior loan		L + 5.50%		N/A(5)		05/2018		—				(1		)		—				—
Surfside Coffee Company LLC#c	One stop		L + 5.25%	(c)	6.58%		06/2020		4,436				4,411				0.5				4,436
Surfside Coffee Company LLC	One stop		L + 5.25%	(c)	6.58%		06/2020		335				334				—				335
Surfside Coffee Company LLC	One stop		L + 5.25%	(c)	6.57%		06/2020		30				30				—				30
Tate's Bake Shop, Inc.^	Senior loan		L + 5.00%	(c)	6.33%		08/2019		591				588				0.1				591
Uinta Brewing Company^	One stop		L + 8.50%	(a)	9.74%		08/2019		3,734				3,720				0.4				3,622
Uinta Brewing Company	One stop		L + 8.50%	(a)	9.74%		08/2019		539				535				0.1				517
									102,184				101,141				10.6				101,196
Broadcasting and Entertainment
TouchTunes Interactive Networks, Inc.^	Senior loan		L + 4.75%	(a)	5.99%		05/2021		1,462				1,458				0.2				1,469
Building and Real Estate
Brooks Equipment Company, LLC*^	One stop		L + 5.00%	(b)(c)	6.32%		08/2020		21,846				21,687				2.3				21,846
Brooks Equipment Company, LLC*	One stop		L + 5.00%	(c)	6.32%		08/2020		5,400				5,366				0.6				5,400
Brooks Equipment Company, LLC	One stop		L + 5.00%	(a)	6.24%		08/2020		890				880				0.1				890
Jensen Hughes, Inc.#	Senior loan		L + 5.00%	(d)	6.45%		12/2021		153				152				—				153
MRI Software LLC^	One stop		L + 6.00%	(c)	7.33%		06/2023		23,923				23,312				2.5				23,683
MRI Software LLC#	One stop		L + 6.00%	(c)	7.33%		06/2023		13,883				13,744				1.4				13,744
MRI Software LLC	One stop		L + 6.00%	(c)	7.32%		06/2023		167				165				—				165
MRI Software LLC(4)	One stop		L + 6.00%		N/A(5)		06/2023		—				(3		)		—				(2		)

See Notes to Consolidated Financial Statements.

26

---

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2017

(In thousands)

	Investment		Spread Above Index(1)		Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets				Fair Value (16)
Building and Real Estate - (continued)
MRI Software LLC(4)	One stop		L + 6.00%	(c)	N/A(5)		06/2023		$	—			$	(7	)		$	—		%	$	(5	)
									66,262				65,296				6.9				65,874
Chemicals, Plastics and Rubber
Flexan, LLC*	One stop		L + 5.75%	(c)	7.08%		02/2020		2,333				2,316				0.2				2,333
Flexan, LLC	One stop		P + 4.50%	(e)	8.75%		02/2020		2				1				—				2
									2,335				2,317				0.2				2,335
Diversified/Conglomerate Manufacturing
Chase Industries, Inc.*^#	One stop		L + 5.75%	(c)	7.05%		09/2020		31,371				31,164				3.3				31,371
Chase Industries, Inc.#	One stop		L + 5.75%	(c)	7.05%		09/2020		4,771				4,747				0.5				4,771
Chase Industries, Inc.	One stop		L + 5.75%	(a)	6.99%		09/2020		324				313				—				324
Inventus Power, Inc.*^	One stop		L + 6.50%	(a)	7.74%		04/2020		8,140				8,098				0.7				7,326
Inventus Power, Inc.	One stop		L + 6.50%	(a)	7.74%		04/2020		251				248				—				198
Onicon Incorporated*^#	One stop		L + 6.00%	(c)	7.33%		04/2020		12,878				12,782				1.3				12,878
Onicon Incorporated(4)	One stop		L + 6.00%		N/A(5)		04/2020		—				(4		)		—				—
PetroChoice Holdings, Inc.^	Senior loan		L + 5.00%	(b)	6.28%		08/2022		1,750				1,709				0.2				1,750
Plex Systems, Inc.*^	One stop		L + 7.50%	(d)	8.96%		06/2020		18,797				18,527				2.0				18,797
Plex Systems, Inc.(4)	One stop		L + 7.50%		N/A(5)		06/2020		—				(22		)		—				—
Reladyne, Inc.*^#	Senior loan		L + 5.00%	(a)	6.24%		07/2022		17,049				16,812				1.8				16,879
Reladyne, Inc.(4)	Senior loan		L + 5.00%		N/A(5)		07/2022		—				(2		)		—				(2		)
Reladyne, Inc.(4)	Senior loan		L + 5.00%		N/A(5)		07/2022		—				(5		)		—				(5		)
Sunless Merger Sub, Inc.#	Senior loan		L + 5.00%	(a)(e)	6.27%		07/2019		1,457				1,463				0.2				1,457
Sunless Merger Sub, Inc.	Senior loan		P + 3.75%	(e)	8.00%		07/2019		326				326				—				326
									97,114				96,156				10.0				96,070
Diversified/Conglomerate Service
Accela, Inc.#	One stop		L + 6.25%	(c)	7.58%		09/2023		5,842				5,754				0.6				5,783
Accela, Inc.	One stop		P + 5.25%	(e)	9.50%		09/2023		1				—				—				1
Actiance, Inc.*^	One stop		L + 9.00%	(a)	10.24%		10/2019		3,962				3,862				0.4				3,962
Actiance, Inc.	One stop		L + 9.00%	(a)	10.24%		10/2019		20				20				—				20
Agility Recovery Solutions Inc.*^	One stop		L + 6.50%	(c)	7.81%		03/2020		13,924				13,823				1.4				13,924
Agility Recovery Solutions Inc.(4)	One stop		L + 6.50%		N/A(5)		03/2020		—				(4		)		—				—
Anaqua, Inc.#	One stop		L + 6.50%	(c)	7.81%		07/2022		7,018				6,917				0.7				6,948
Anaqua, Inc.(4)	One stop		L + 6.50%		N/A(5)		07/2022		—				(1		)		—				(1		)
Bomgar Corporation^	One stop		L + 7.50%	(c)	8.83%		06/2022		4,839				4,762				0.5				4,839
Bomgar Corporation(4)	One stop		L + 7.50%		N/A(5)		06/2022		—				(2		)		—				—
Clearwater Analytics, LLC*^	One stop		L + 7.50%	(a)	8.74%		09/2022		9,594				9,451				1.0				9,594
Clearwater Analytics, LLC	One stop		L + 7.50%	(a)	8.74%		09/2022		9				8				—				9
Daxko Acquisition Corporation*^	One stop		L + 6.50%	(a)	7.74%		09/2022		8,472				8,366				0.9				8,472
Daxko Acquisition Corporation	One stop		L + 6.50%		N/A(5)		09/2022		—				—				—				—
EGD Security Systems, LLC	One stop		L + 6.25%	(c)	7.55%		06/2022		11,114				10,918				1.1				11,114
EGD Security Systems, LLC^	One stop		L + 6.25%	(a)	7.49%		06/2022		98				97				—				98
EGD Security Systems, LLC	One stop		L + 6.25%	(a)(c)	7.55%		06/2022		35				34				—				35
EGD Security Systems, LLC(4)	One stop		L + 6.25%		N/A(5)		06/2022		—				(1		)		—				—
HealthcareSource HR, Inc.*	One stop		L + 6.75%	(c)	8.08%		05/2020		20,719				20,439				2.1				20,719
HealthcareSource HR, Inc.(4)	One stop		L + 6.75%		N/A(5)		05/2020		—				(1		)		—				—
Host Analytics, Inc.	One stop		N/A		8.50% cash/2.25% PIK		08/2021		3,098				3,055				0.3				3,098
Host Analytics, Inc.	One stop		N/A		8.50% cash/2.25% PIK		08/2021		2,597				2,470				0.3				2,597
Host Analytics, Inc.(4)	One stop		N/A		N/A(5)		08/2021		—				(7		)		—				—

See Notes to Consolidated Financial Statements.

27

---

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2017

(In thousands)

	Investment		Spread Above Index(1)		Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets				Fair Value (16)
Diversified/Conglomerate Service - (continued)
III US Holdings, LLC(4)	One stop		L + 6.50%		N/A(5)		09/2022		$	—			$	(1	)		$	—		%	$	—
Integration Appliance, Inc.*^	One stop		L + 8.25%	(c)	9.57%		09/2020		16,123				16,020				1.7				16,123
Integration Appliance, Inc.	One stop		L + 8.25%	(c)	9.57%		09/2020		7,914				7,806				0.8				7,914
Integration Appliance, Inc.	One stop		L + 8.25%	(c)	9.57%		09/2020		5,396				5,329				0.6				5,396
Integration Appliance, Inc.	One stop		L + 8.25%	(c)	9.57%		09/2020		2,484				2,462				0.3				2,484
Integration Appliance, Inc.	One stop		L + 8.25%	(c)	9.57%		09/2020		924				917				0.1				924
Integration Appliance, Inc.*	One stop		L + 8.25%	(c)	9.57%		09/2020		719				712				0.1				719
Maverick Bidco Inc.*#	One stop		L + 6.25%	(c)	7.56%		04/2023		17,645				17,311				1.8				17,645
Maverick Bidco Inc.	One stop		L + 6.25%	(c)	7.57%		04/2023		27				25				—				27
Maverick Bidco Inc.(4)	One stop		L + 6.25%		N/A(5)		04/2023		—				(2		)		—				—
MMan Acquisition Co.#	One stop		L + 6.00%	(b)	7.26%		08/2023		9,824				9,680				1.0				9,726
MMan Acquisition Co.	One stop		L + 6.00%	(c)	7.33%		08/2023		10				9				—				9
Netsmart Technologies, Inc.#	Senior loan		L + 4.50%	(c)	5.83%		04/2023		1,755				1,740				0.2				1,779
Netsmart Technologies, Inc.(4)	Senior loan		L + 4.75%		N/A(5)		04/2023		—				(8		)		—				—
PT Intermediate Holdings III, LLC	One stop		L + 6.50%	(a)	7.74%		06/2022		22,028				21,594				2.3				22,028
PT Intermediate Holdings III, LLC*	One stop		L + 6.50%	(a)	7.74%		06/2022		2,177				2,157				0.2				2,177
PT Intermediate Holdings III, LLC	One stop		L + 6.50%	(a)(e)	7.90%		06/2022		200				197				—				200
Saba Software, Inc.#	One stop		L + 5.50%	(a)	6.74%		05/2023		20,297				19,967				2.1				20,297
Saba Software, Inc.(4)	One stop		L + 5.50%		N/A(5)		05/2023		—				(2		)		—				—
Saldon Holdings, Inc. *	Senior loan		L + 4.50%	(a)(b)	5.77%		09/2022		803				793				0.1				793
Secure-24, LLC*^	One stop		L + 5.00%	(c)	6.33%		08/2019		21,653				21,479				2.3				21,653
Secure-24, LLC(4)	One stop		L + 5.00%		N/A(5)		08/2019		—				(4		)		—				—
Severin Acquisition, LLC^	Senior loan		L + 5.38%	(a)	6.62%		07/2021		883				873				0.1				898
Severin Acquisition, LLC^	Senior loan		L + 5.00%	(a)	6.24%		07/2021		786				778				0.1				789
Severin Acquisition, LLC^	Senior loan		L + 5.38%	(a)	6.62%		07/2021		601				594				0.1				611
Severin Acquisition, LLC^	Senior loan		L + 4.88%	(a)	6.12%		07/2021		194				192				—				194
Switchfly, Inc.	One stop		L + 10.00%	(c)	9.80% cash/1.50% PIK		04/2020		2,398				2,296				0.3				2,398
Switchfly, Inc.	One stop		L + 10.00%		N/A(5)		04/2020		—				—				—				—
Telesoft, LLC#	One stop		L + 5.50%	(c)	6.81%		07/2022		4,192				4,152				0.4				4,150
Telesoft, LLC(4)	One stop		L + 5.50%		N/A(5)		07/2022		—				(1		)		—				(1		)
Trintech, Inc.*^#	One stop		L + 6.00%	(c)	7.31%		10/2021		12,096				11,987				1.3				12,096
Trintech, Inc.	One stop		L + 6.00%		N/A(5)		10/2021		—				—				—				—
Vendavo, Inc.	One stop		L + 8.50%	(c)	9.80%		10/2019		17,982				17,804				1.9				17,982
Vendavo, Inc.(4)	One stop		L + 8.50%		N/A(5)		10/2019		—				(6		)		—				—
Vendor Credentialing Service LLC^	One stop		L + 6.00%	(a)	7.24%		11/2021		12,239				12,018				1.3				12,239
Vendor Credentialing Service LLC(4)	One stop		L + 6.00%		N/A(5)		11/2021		—				(1		)		—				—
Verisys Corporation*	One stop		L + 6.75%	(c)	8.08%		01/2023		3,926				3,873				0.4				3,926
Verisys Corporation(4)	One stop		L + 6.75%		N/A(5)		01/2023		—				(1		)		—				—
Workforce Software, LLC^	One stop		L + 10.50%	(c)	4.80% cash/7.00% PIK		06/2021		5,343				5,315				0.6				5,343
Workforce Software, LLC	One stop		L + 10.50%	(c)	4.80% cash/7.00% PIK		06/2021		50				50				—				50
Xmatters, Inc. and Alarmpoint, Inc.	One stop		L + 9.25%	(a)	9.74% cash/0.75% PIK		08/2021		4,874				4,803				0.5				4,874
Xmatters, Inc. and Alarmpoint, Inc.	One stop		L + 9.25%	(a)	9.74% cash/0.75% PIK		08/2021		20				20				—				20
									286,905				282,887				29.9				286,675
Ecological
Pace Analytical Services, LLC	One stop		L + 6.00%	(a)	7.24%		09/2022		15,345				14,994				1.6				15,345
Pace Analytical Services, LLC^	One stop		L + 6.00%	(a)	7.24%		09/2022		1,427				1,406				0.2				1,427
Pace Analytical Services, LLC	One stop		L + 6.00%	(a)	7.24%		09/2022		349				344				—				349

See Notes to Consolidated Financial Statements.

28

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Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2017

(In thousands)

	Investment		Spread Above Index(1)		Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets				Fair Value (16)
Ecological - (continued)
Pace Analytical Services, LLC	One stop		L + 6.00%	(a)	7.24%		09/2022		$	25			$	24			$	—		%	$	25
Pace Analytical Services, LLC(4)	One stop		L + 6.00%		N/A(5)		09/2022		—				(5		)		—				—
WRE Holding Corp.#	Senior loan		L + 4.75%	(a)	5.99%		01/2023		1,019				1,008				0.1				1,019
WRE Holding Corp.	Senior loan		L + 4.75%	(a)(c)	6.00%		01/2023		7				7				—				7
WRE Holding Corp.	Senior loan		L + 4.75%		N/A(5)		01/2023		—				—				—				—
WRE Holding Corp.(4)	Senior loan		L + 4.75%		N/A(5)		01/2023		—				(1		)		—				—
									18,172				17,777				1.9				18,172
Electronics
Appriss Holdings, Inc.*^	Senior loan		L + 5.25%	(c)	6.58%		11/2020		15,295				15,157				1.6				15,295
Appriss Holdings, Inc.	Senior loan		L + 5.25%	(b)	6.53%		11/2020		1,892				1,869				0.2				1,892
Compusearch Software Holdings, Inc.^	Senior loan		L + 4.25%	(c)	5.58%		05/2021		1,735				1,733				0.2				1,735
Diligent Corporation#	One stop		L + 6.25%	(c)	7.58%		04/2022		4,928				4,860				0.5				4,928
Diligent Corporation*	One stop		L + 6.25%	(c)	7.58%		04/2022		4,839				4,735				0.5				4,839
Diligent Corporation*^	One stop		L + 6.25%	(c)	7.58%		04/2022		2,648				2,609				0.3				2,648
Diligent Corporation(4)	One stop		L + 6.25%		N/A(5)		04/2022		—				(2		)		—				—
Gamma Technologies, LLC^	One stop		L + 4.75%	(a)	5.99%		06/2021		7,555				7,508				0.8				7,555
Gamma Technologies, LLC(4)	One stop		L + 5.00%		N/A(5)		06/2021		—				(1		)		—				—
LD Intermediate Holdings, Inc.*^	Senior loan		L + 5.88%	(c)	7.19%		12/2022		2,540				2,362				0.2				2,390
Park Place Technologies LLC*^	Senior loan		L + 5.00%	(c)	6.33%		06/2022		15,751				15,587				1.6				15,594
Park Place Technologies LLC(4)	One stop		L + 5.00%		N/A(5)		06/2022		—				(2		)		—				(2		)
Sloan Company, Inc., The#	One stop		L + 7.25%	(c)	8.58%		04/2020		7,437				7,364				0.7				7,065
Sloan Company, Inc., The	One stop		L + 7.25%	(c)	8.57%		04/2020		33				32				—				30
Sovos Compliance*^	One stop		L + 6.00%	(a)	7.24%		03/2022		9,328				9,186				1.0				9,235
Sovos Compliance(4)	One stop		L + 6.00%		N/A(5)		03/2022		—				(2		)		—				(1		)
Sovos Compliance Formerly Taxware, LLC^	One stop		L + 6.00%	(a)	7.24%		03/2022		1,569				1,546				0.2				1,553
Sovos Compliance Formerly Taxware, LLC	One stop		L + 6.00%		N/A(5)		03/2022		—				—				—				—
Watchfire Enterprises, Inc.	Second Lien		L + 8.00%	(c)	9.33%		10/2021		9,434				9,306				1.0				9,434
									84,984				83,847				8.8				84,190
Grocery
MyWebGrocer, Inc.*	One stop		L + 8.75%	(a)	10.00%		10/2017		14,271				14,265				1.5				14,271
Healthcare, Education and Childcare
Active Day, Inc.	One stop		L + 6.00%	(a)	7.24%		12/2021		13,401				13,145				1.4				13,401
Active Day, Inc.^	One stop		L + 6.00%	(a)	7.24%		12/2021		1,034				1,021				0.1				1,034
Active Day, Inc.	One stop		L + 6.00%	(a)	7.24%		12/2021		666				660				0.1				666
Active Day, Inc.	One stop		L + 6.00%	(a)	7.24%		12/2021		460				455				—				460
Active Day, Inc.(4)	One stop		L + 6.00%		N/A(5)		12/2021		—				(1		)		—				—
Active Day, Inc.(4)	One stop		L + 6.00%		N/A(5)		12/2021		—				(3		)		—				—
Acuity Eyecare Holdings, LLC	One stop		L + 6.75%	(b)(c)	8.04%		03/2022		3,614				3,533				0.4				3,614
Acuity Eyecare Holdings, LLC	One stop		L + 6.75%	(c)	8.06%		03/2022		38				36				—				38
Acuity Eyecare Holdings, LLC(4)	One stop		L + 6.75%		N/A(5)		03/2022		—				(1		)		—				—
ADCS Clinics Intermediate Holdings, LLC	One stop		L + 5.75%	(c)	7.08%		05/2022		21,281				20,788				2.2				20,855
ADCS Clinics Intermediate Holdings, LLC*	One stop		L + 5.75%	(c)	7.08%		05/2022		108				107				—				106
ADCS Clinics Intermediate Holdings, LLC	One stop		P + 4.75%	(e)	9.00%		05/2022		95				93				—				93
ADCS Clinics Intermediate Holdings, LLC*	One stop		L + 5.75%	(c)	7.08%		05/2022		32				31				—				31
ADCS Clinics Intermediate Holdings, LLC	One stop		P + 4.75%	(e)	9.00%		05/2022		5				2				—				5
Agilitas USA, Inc.#	One stop		L + 6.00%	(c)	7.30%		04/2022		8,439				8,362				0.9				8,439

See Notes to Consolidated Financial Statements.

29

---

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2017

(In thousands)

	Investment		Spread Above Index(1)		Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets				Fair Value (16)
Healthcare, Education and Childcare - (continued)
Agilitas USA, Inc.	One stop		L + 6.00%	(c)	7.30%		04/2022		$	10			$	9			$	—		%	$	10
Agilitas USA, Inc.(4)	One stop		L + 6.00%		N/A(5)		04/2022		—				(1		)		—				—
Aris Teleradiology Company, LLC*	Senior loan		L + 5.50%	(c)	6.83%		03/2021		2,699				2,679				0.2				2,322
Aris Teleradiology Company, LLC	Senior loan		L + 5.50%	(c)	6.81%		03/2021		25				25				—				21
Avalign Technologies, Inc.^	Senior loan		L + 4.50%	(a)	5.74%		07/2021		1,442				1,437				0.2				1,438
BIORECLAMATIONIVT, LLC*^#	One stop		L + 5.75%	(a)	6.99%		01/2021		15,764				15,586				1.7				15,764
BIORECLAMATIONIVT, LLC	One stop		P + 4.75%	(e)	9.00%		01/2021		55				54				—				55
California Cryobank, LLC^	One stop		L + 5.50%	(c)	6.83%		08/2019		1,479				1,473				0.2				1,479
California Cryobank, LLC^	One stop		L + 5.50%	(c)	6.83%		08/2019		567				561				0.1				567
California Cryobank, LLC^	One stop		L + 5.50%	(c)	6.83%		08/2019		189				189				—				189
California Cryobank, LLC(4)	One stop		L + 5.50%		N/A(5)		08/2019		—				(1		)		—				—
CLP Healthcare Services, Inc.^	Senior loan		L + 5.25%	(c)	6.58%		12/2020		3,924				3,897				0.4				3,846
Curo Health Services LLC#	Senior loan		L + 4.00%	(b)(c)	5.31%		02/2022		3,273				3,261				0.3				3,283
DCA Investment Holding, LLC*^#	One stop		L + 5.25%	(c)	6.58%		07/2021		18,776				18,515				2.0				18,776
DCA Investment Holding, LLC*^#	One stop		L + 5.25%	(c)	6.58%		07/2021		13,467				13,355				1.4				13,467
DCA Investment Holding, LLC#	One stop		L + 5.25%	(c)	6.58%		07/2021		2,475				2,436				0.3				2,475
DCA Investment Holding, LLC	One stop		P + 4.25%	(e)	8.50%		07/2021		657				645				0.1				657
DCA Investment Holding, LLC(4)	One stop		L + 5.25%		N/A(5)		07/2021		—				(3		)		—				—
Deca Dental Management LLC*^	One stop		L + 6.25%	(c)	7.58%		07/2020		4,086				4,052				0.4				4,086
Deca Dental Management LLC	One stop		L + 6.25%	(a)(c)	7.57%		07/2020		497				493				0.1				497
Deca Dental Management LLC	One stop		L + 6.25%	(a)	7.49%		07/2020		50				50				—				50
Deca Dental Management LLC(4)	One stop		L + 6.25%		N/A(5)		07/2020		—				(2		)		—				—
Delta Educational Systems*(6)	Senior loan		P + 6.75%	(e)	9.00% cash/2.00% PIK		12/2018		1,438				1,433				—				—
Delta Educational Systems(4)(6)	Senior loan		L + 6.00%		N/A(5)		12/2018		—				—				—				(60		)
Dental Holdings Corporation	One stop		L + 5.50%	(c)	6.81%		02/2020		7,436				7,339				0.8				7,287
Dental Holdings Corporation	One stop		L + 5.50%	(b)	6.78%		02/2020		1,133				1,121				0.1				1,110
Dental Holdings Corporation	One stop		L + 5.50%	(c)	6.82%		02/2020		220				211				—				198
eSolutions, Inc.*^	One stop		L + 6.50%	(a)	7.74%		03/2022		20,091				19,787				2.1				20,091
eSolutions, Inc.(4)	One stop		L + 6.50%		N/A(5)		03/2022		—				(1		)		—				—
Excelligence Learning Corporation^	One stop		L + 6.00%	(a)	7.24%		04/2023		4,854				4,809				0.5				4,854
Eyecare Services Partners Holdings LLC	One stop		L + 6.25%	(c)	7.58%		05/2023		8,006				7,800				0.8				8,006
Eyecare Services Partners Holdings LLC	One stop		P + 5.25%	(e)	9.50%		05/2023		17				14				—				17
Eyecare Services Partners Holdings LLC(4)	One stop		L + 6.25%		N/A(5)		05/2023		—				(4		)		—				—
Eyecare Services Partners Holdings LLC(4)	One stop		L + 6.25%		N/A(5)		05/2023		—				(5		)		—				—
G & H Wire Company, Inc.#	One stop		L + 5.50%	(c)	6.81%		09/2023		5,642				5,572				0.6				5,585
G & H Wire Company, Inc.(4)	One stop		L + 5.50%		N/A(5)		09/2023		—				(1		)		—				(1		)
Immucor, Inc. #	Senior loan		L + 5.00%	(a)	6.24%		06/2021		1,613				1,592				0.2				1,639
Joerns Healthcare, LLC*^	One stop		L + 6.50%	(c)	7.82%		05/2020		3,497				3,462				0.3				3,281
Kareo, Inc.	One stop		L + 9.00%	(b)	10.27%		06/2022		4,518				4,303				0.5				4,518
Kareo, Inc.	One stop		L + 9.00%		N/A(5)		06/2022		—				—				—				—
Katena Holdings, Inc.^	One stop		L + 6.25%	(c)	7.58%		06/2021		8,611				8,555				0.9				8,439
Katena Holdings, Inc.^	One stop		L + 6.25%	(c)	7.58%		06/2021		841				836				0.1				824
Katena Holdings, Inc.	One stop		P + 5.25%	(e)	9.50%		06/2021		64				63				—				62
Lombart Brothers, Inc.#	One stop		L + 6.75%	(c)	8.08%		04/2022		3,631				3,548				0.4				3,631
Lombart Brothers, Inc.#(7)	One stop		L + 6.75%	(c)	8.08%		04/2022		1,664				1,639				0.2				1,664
Lombart Brothers, Inc.	One stop		P + 5.50%	(e)	9.75%		04/2022		36				35				—				36
Lombart Brothers, Inc.(7)	One stop		L + 6.75%		N/A(5)		04/2022		—				—				—				—

See Notes to Consolidated Financial Statements.

30

---

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2017

(In thousands)

	Investment		Spread Above Index(1)		Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets				Fair Value (16)
Healthcare, Education and Childcare - (continued)
Maverick Healthcare Group, LLC*	Senior loan		L + 7.50%	(a)	7.25% cash/2.00% PIK		12/2017		$	1,959			$	1,959			$	0.2		%	$	1,900
Maverick Healthcare Group, LLC	Senior loan		P + 6.50%	(e)	5.25% cash/5.50% PIK		12/2017		82				82				—				82
MWD Management, LLC & MWD Services, Inc.#	One stop		L + 5.25%	(c)	6.58%		06/2023		5,925				5,854				0.6				5,925
MWD Management, LLC & MWD Services, Inc.(4)	One stop		L + 5.25%		N/A(5)		06/2022		—				(1		)		—				—
MWD Management, LLC & MWD Services, Inc.(4)	One stop		L + 5.25%		N/A(5)		06/2023		—				(2		)		—				—
Oliver Street Dermatology Holdings, LLC	One stop		L + 6.50%	(c)	7.83%		05/2022		9,434				9,226				1.0				9,434
Oliver Street Dermatology Holdings, LLC	One stop		L + 6.50%	(c)	7.83%		05/2022		952				938				0.1				952
Oliver Street Dermatology Holdings, LLC	One stop		L + 6.50%	(a)(b)(c)	7.78%		05/2022		201				199				—				201
Oliver Street Dermatology Holdings, LLC	One stop		L + 6.50%	(c)	7.81%		05/2022		46				45				—				46
Oliver Street Dermatology Holdings, LLC*	One stop		L + 6.50%	(c)	7.83%		05/2022		42				41				—				42
Oliver Street Dermatology Holdings, LLC	One stop		L + 6.50%	(c)	7.83%		05/2022		33				32				—				33
Oliver Street Dermatology Holdings, LLC	One stop		L + 6.50%	(c)	7.83%		05/2022		30				30				—				30
Oliver Street Dermatology Holdings, LLC(4)	One stop		L + 6.50%		N/A(5)		05/2022		—				(1		)		—				—
Oliver Street Dermatology Holdings, LLC(4)	One stop		L + 6.50%		N/A(5)		05/2022		—				(1		)		—				—
Pinnacle Treatment Centers, Inc.	One stop		L + 6.25%	(b)	7.53%		08/2021		9,980				9,768				1.0				9,980
Pinnacle Treatment Centers, Inc.	One stop		P + 5.00%	(e)	9.25%		08/2021		30				29				—				30
Pinnacle Treatment Centers, Inc.(4)	One stop		L + 6.25%		N/A(5)		08/2021		—				(2		)		—				—
PPT Management Holdings, LLC^	One stop		L + 6.00%	(c)	7.33%		12/2022		10,223				10,022				1.0				10,018
PPT Management Holdings, LLC	One stop		L + 6.00%	(c)	7.33%		12/2022		135				132				—				132
PPT Management Holdings, LLC	One stop		L + 6.00%	(a)	7.24%		12/2022		50				46				—				46
Premise Health Holding Corp.*^#	One stop		L + 4.50%	(c)	5.83%		06/2020		14,812				14,753				1.5				14,812
Premise Health Holding Corp.(4)	One stop		L + 4.50%		N/A(5)		06/2020		—				(12		)		—				—
Pyramid Healthcare, Inc.	One stop		L + 6.50%	(a)	7.74%		08/2019		150				148				—				150
Radiology Partners, Inc.^#	One stop		L + 5.75%	(c)	7.08%		09/2020		22,345				22,111				2.3				22,345
Radiology Partners, Inc.	One stop		L + 5.75%	(c)	7.08%		09/2020		925				909				0.1				925
Radiology Partners, Inc.	One stop		L + 5.75%	(c)	7.08%		09/2020		701				700				0.1				701
Radiology Partners, Inc.(4)	One stop		L + 5.75%		N/A(5)		09/2020		—				(4		)		—				—
Reliant Pro ReHab, LLC*	Senior loan		L + 5.00%	(c)	6.33%		12/2017		2,474				2,472				0.3				2,474
Reliant Pro ReHab, LLC	Senior loan		P + 4.00%	(e)	8.25%		12/2017		352				351				—				352
Riverchase MSO, LLC#	Senior loan		L + 5.25%	(c)	6.58%		10/2022		4,981				4,917				0.5				4,981
Riverchase MSO, LLC	Senior loan		L + 5.25%	(c)	6.58%		10/2022		28				27				—				28
RXH Buyer Corporation*^	One stop		L + 5.75%	(c)	7.08%		09/2021		17,259				17,032				1.8				16,914
RXH Buyer Corporation*	One stop		L + 5.75%	(c)	7.08%		09/2021		1,953				1,928				0.2				1,914
RXH Buyer Corporation	One stop		L + 5.75%	(c)(e)	7.61%		09/2021		55				52				—				51
SLMP, LLC	One stop		L + 6.00%	(a)	7.24%		05/2023		6,196				6,050				0.6				6,196
SLMP, LLC	One stop		N/A		7.50% PIK		05/2027		83				83				—				83
SLMP, LLC(4)	One stop		L + 6.00%		N/A(5)		05/2023		—				(1		)		—				—
SLMP, LLC(4)	One stop		L + 6.00%		N/A(5)		05/2023		—				(1		)		—				—
Spear Education, LLC^	One stop		L + 6.00%	(c)	7.30%		08/2019		4,644				4,622				0.5				4,644
Spear Education, LLC	One stop		L + 6.00%	(c)	7.30%		08/2019		75				75				—				75
Spear Education, LLC(4)	One stop		L + 6.00%		N/A(5)		08/2019		—				—				—				(1		)
Summit Behavioral Holdings I, LLC*	One stop		L + 5.00%	(a)	6.24%		06/2021		4,338				4,297				0.5				4,338
Summit Behavioral Holdings I, LLC	One stop		L + 5.00%	(a)	6.24%		06/2021		113				112				—				113
Summit Behavioral Holdings I, LLC	One stop		L + 5.00%	(a)	6.24%		06/2021		5				5				—				5
WHCG Management, LLC*	Senior loan		L + 4.75%	(c)	6.08%		03/2023		2,394				2,367				0.2				2,394
WHCG Management, LLC(4)	Senior loan		L + 4.75%		N/A(5)		03/2023		—				(1		)		—				—

See Notes to Consolidated Financial Statements.

31

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Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2017

(In thousands)

	Investment		Spread Above Index(1)		Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets				Fair Value (16)
Healthcare, Education and Childcare - (continued)
WHCG Management, LLC(4)	Senior loan		L + 4.75%		N/A(5)		03/2023		$	—			$	(3	)		$	—		%	$	—
WIRB-Copernicus Group, Inc.*^	Senior loan		L + 5.00%	(c)	6.33%		08/2022		9,812				9,733				1.0				9,812
WIRB-Copernicus Group, Inc.	Senior loan		L + 5.00%		N/A(5)		08/2022		—				—				—				—
Young Innovations, Inc.*	Senior loan		L + 5.00%	(c)	6.33%		01/2019		3,587				3,566				0.4				3,587
Young Innovations, Inc.	Senior loan		L + 5.00%	(c)	6.33%		01/2019		9				9				—				9
									328,333				323,739				33.9				324,658
Home and Office Furnishings, Housewares, and Durable Consumer
CST Buyer Company^	Senior loan		L + 6.25%	(c)	7.58%		03/2023		2,642				2,576				0.3				2,642
CST Buyer Company(4)	Senior loan		L + 6.25%		N/A(5)		03/2023		—				(1		)		—				—
Plano Molding Company, LLC*^#	One stop		L + 7.50%	(a)	8.74%		05/2021		14,485				14,331				1.3				12,312
									17,127				16,906				1.6				14,954
Hotels, Motels, Inns, and Gaming
Aimbridge Hospitality, LLC*^	One stop		L + 5.50%	(a)	6.74%		06/2022		10,041				9,875				1.0				10,041
Aimbridge Hospitality, LLC	One stop		L + 5.50%	(a)	6.74%		06/2022		16				15				—				16
Aimbridge Hospitality, LLC(4)	One stop		L + 5.50%		N/A(5)		06/2022		—				(1		)		—				—
									10,057				9,889				1.0				10,057
Insurance
Captive Resources Midco, LLC*^#	One stop		L + 5.75%	(a)	6.99%		06/2020		24,253				24,075				2.5				24,253
Captive Resources Midco, LLC(4)	One stop		L + 5.75%		N/A(5)		06/2020		—				(12		)		—				—
Captive Resources Midco, LLC(4)	One stop		L + 5.75%		N/A(5)		06/2020		—				(13		)		—				—
Higginbotham Insurance Agency, Inc.*	Senior loan		L + 5.00%	(a)	6.24%		11/2021		1,595				1,584				0.2				1,595
Internet Pipeline, Inc.	One stop		L + 7.25%	(a)	8.49%		08/2022		4,847				4,743				0.5				4,917
Internet Pipeline, Inc.*	One stop		L + 6.25%	(a)	7.48%		08/2022		2,098				2,078				0.2				2,046
Internet Pipeline, Inc.*	One stop		L + 6.25%	(a)	7.48%		08/2022		794				786				0.1				775
Internet Pipeline, Inc.(4)	One stop		L + 7.25%		N/A(5)		08/2021		—				(1		)		—				1
RSC Acquisition, Inc.#	Senior loan		L + 5.25%	(c)	6.58%		11/2022		919				913				0.1				919
RSC Acquisition, Inc.(4)	Senior loan		L + 5.25%		N/A(5)		11/2022		—				(1		)		—				—
									34,506				34,152				3.6				34,506
Leisure, Amusement, Motion Pictures, Entertainment
NFD Operating, LLC#	One stop		L + 7.00%	(c)	8.30%		06/2021		2,325				2,299				0.2				2,325
NFD Operating, LLC	One stop		L + 7.00%		N/A(5)		06/2021		—				—				—				—
NFD Operating, LLC(4)	One stop		L + 7.00%		N/A(5)		06/2021		—				(1		)		—				—
PADI Holdco, Inc.*^#	One stop		L + 6.50%	(c)	7.84%		04/2023		19,550				19,278				2.1				19,550
PADI Holdco, Inc.	One stop		L + 6.50%	(b)(c)	7.78%		04/2022		72				70				—				72
Self Esteem Brands, LLC*^#	Senior loan		L + 4.75%	(a)	5.99%		02/2020		17,983				17,889				1.9				17,983
Self Esteem Brands, LLC(4)	Senior loan		L + 4.75%		N/A(5)		02/2020		—				(4		)		—				—
Teaching Company, The	One stop		L + 7.00%	(a)(c)	8.32%		08/2020		18,835				18,673				1.9				18,459
Teaching Company, The	One stop		L + 7.00%	(a)(e)	8.24%		08/2020		25				24				—				23
Titan Fitness, LLC*	One stop		L + 7.00%	(a)	8.25%		09/2019		13,088				12,987				1.4				13,088
Titan Fitness, LLC	One stop		L + 7.00%	(a)	8.25%		09/2019		1,972				1,962				0.2				1,972
Titan Fitness, LLC*	One stop		L + 7.00%	(a)	8.25%		09/2019		1,733				1,725				0.2				1,733
Titan Fitness, LLC(4)	One stop		L + 7.00%		N/A(5)		09/2019		—				(9		)		—				—
Titan Fitness, LLC(4)	One stop		L + 7.00%		N/A(5)		09/2019		—				(14		)		—				—
									75,583				74,879				7.9				75,205

See Notes to Consolidated Financial Statements.

32

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Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2017

(In thousands)

	Investment		Spread Above Index(1)		Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets				Fair Value (16)
Oil and Gas
Drilling Info, Inc.*^#	One stop		L + 6.25%	(b)	7.52%		06/2020		$	6,399			$	6,362			0.7			%	$	6,351
Drilling Info, Inc.	One stop		L + 6.25%		N/A(5)		06/2020		—				—				—				—
									6,399				6,362				0.7				6,351
Personal and Non Durable Consumer Products (Mfg. Only)
Georgica Pine Clothiers, LLC	One stop		L + 5.50%	(c)	6.83%		11/2021		5,678				5,600				0.6				5,678
Georgica Pine Clothiers, LLC^	One stop		L + 5.50%	(c)	6.83%		11/2021		495				491				0.1				495
Georgica Pine Clothiers, LLC*	One stop		L + 5.50%	(c)	6.83%		11/2021		347				344				0.1				347
Georgica Pine Clothiers, LLC	One stop		L + 5.50%	(c)	6.83%		11/2021		58				57				—				58
IMPLUS Footwear, LLC	One stop		L + 6.75%	(c)	8.08%		04/2021		10,307				10,165				1.1				10,307
IMPLUS Footwear, LLC	One stop		L + 6.75%	(c)	8.07%		04/2021		1,815				1,790				0.2				1,815
Massage Envy, LLC*^#	One stop		L + 6.75%	(c)(e)	8.09%		09/2020		35,191				34,868				3.7				35,191
Massage Envy, LLC	One stop		L + 6.75%	(a)	7.99%		09/2020		316				306				—				316
Massage Envy, LLC	One stop		L + 6.75%	(c)(e)	8.07%		09/2020		100				99				—				100
Massage Envy, LLC	One stop		L + 6.75%	(c)	8.07%		09/2020		40				40				—				40
Massage Envy, LLC	One stop		L + 6.75%	(c)(e)	8.08%		09/2020		35				35				—				35
Massage Envy, LLC	One stop		L + 6.75%	(c)(e)	8.10%		09/2020		15				15				—				15
Massage Envy, LLC(4)	One stop		L + 6.75%		N/A(5)		09/2020		—				(1		)		—				—
Orthotics Holdings, Inc.*#	One stop		L + 6.00%	(a)	7.24%		02/2020		8,290				8,222				0.8				8,125
Orthotics Holdings, Inc.*#(7)	One stop		L + 6.00%	(a)	7.24%		02/2020		1,359				1,348				0.1				1,332
Orthotics Holdings, Inc.(4)(7)	One stop		L + 6.00%		N/A(5)		02/2020		—				(1		)		—				—
Orthotics Holdings, Inc.(4)	One stop		L + 6.00%		N/A(5)		02/2020		—				(10		)		—				(4		)
Team Technologies Acquisition Company^	Senior loan		L + 5.00%	(c)(e)	6.32%		12/2017		4,287				4,284				0.4				4,278
Team Technologies Acquisition Company#	Senior loan		L + 5.50%	(c)(e)	6.82%		12/2017		790				789				0.1				799
Team Technologies Acquisition Company(4)	Senior loan		L + 5.00%		N/A(5)		12/2017		—				—				—				(1		)
									69,123				68,441				7.2				68,926
Personal, Food and Miscellaneous Services
Community Veterinary Partners, LLC	One stop		L + 5.50%	(c)	6.83%		10/2021		42				41				—				42
Ignite Restaurant Group, Inc.^(6)	One stop		P + 6.00%	(e)	10.25%		02/2019		4,312				4,285				0.1				1,186
PetVet Care Centers LLC*^#	One stop		L + 6.00%	(c)	7.33%		06/2023		16,780				16,620				1.8				16,780
PetVet Care Centers LLC	One stop		L + 6.00%	(c)	7.32%		06/2023		430				421				—				430
PetVet Care Centers LLC	One stop		L + 6.00%	(b)	7.27%		06/2023		69				66				—				69
Southern Veterinary Partners, LLC#	One stop		L + 5.00%	(a)	6.24%		06/2020		3,900				3,873				0.4				3,900
Southern Veterinary Partners, LLC	One stop		L + 5.00%	(a)	6.23%		06/2020		160				158				—				160
Southern Veterinary Partners, LLC	One stop		L + 5.00%	(a)	6.23%		06/2020		17				17				—				17
Vetcor Professional Practices LLC*^#	One stop		L + 6.00%	(c)	7.33%		04/2021		28,750				28,348				3.0				28,750
Vetcor Professional Practices LLC*	One stop		L + 6.00%	(c)	7.33%		04/2021		956				949				0.1				956
Vetcor Professional Practices LLC#	One stop		L + 6.00%	(c)	7.33%		04/2021		948				934				0.1				948
Vetcor Professional Practices LLC	One stop		L + 6.00%	(c)	7.33%		04/2021		861				849				0.1				861
Vetcor Professional Practices LLC#	One stop		L + 6.00%	(c)	7.33%		04/2021		745				745				0.1				745
Vetcor Professional Practices LLC^	One stop		L + 6.00%	(c)	7.33%		04/2021		725				715				0.1				725
Vetcor Professional Practices LLC#	One stop		L + 6.00%	(c)	7.33%		04/2021		285				283				—				285
Vetcor Professional Practices LLC#	One stop		L + 6.00%	(c)	7.33%		04/2021		233				232				—				233
Vetcor Professional Practices LLC	One stop		L + 6.00%	(c)	7.33%		04/2021		219				211				—				219
Vetcor Professional Practices LLC	One stop		L + 6.00%	(c)	7.33%		04/2021		17				13				—				17
Veterinary Specialists of North America, LLC^	One stop		L + 5.25%	(c)	6.56%		07/2021		7,406				7,334				0.8				7,406
Veterinary Specialists of North America, LLC	One stop		L + 5.25%	(c)	6.58%		07/2021		89				74				—				89

See Notes to Consolidated Financial Statements.

33

---

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2017

(In thousands)

	Investment		Spread Above Index(1)		Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets				Fair Value (16)
Personal, Food and Miscellaneous Services - (continued)
Veterinary Specialists of North America, LLC#	One stop		L + 5.25%	(c)	6.56%		07/2021		$	63			$	63			—			%	$	63
Veterinary Specialists of North America, LLC(4)	One stop		L + 5.25%		N/A(5)		07/2021		—				(2		)		—				—
Wetzel's Pretzels, LLC	One stop		L + 6.75%	(a)	7.99%		09/2021		6,472				6,332				0.7				6,472
Wetzel's Pretzels, LLC(4)	One stop		L + 6.75%		N/A(5)		09/2021		—				(1		)		—				—
									73,479				72,560				7.3				70,353
Printing and Publishing
Brandmuscle, Inc.^	Senior loan		L + 5.00%	(c)	6.33%		12/2021		624				619				0.1				629
Marketo, Inc.	One stop		L + 9.50%	(c)	10.83%		08/2021		9,940				9,709				1.0				9,940
Marketo, Inc.(4)	One stop		L + 9.50%		N/A(5)		08/2021		—				(1		)		—				—
									10,564				10,327				1.1				10,569
Retail Stores
Batteries Plus Holding Corporation	One stop		L + 6.75%	(a)	7.99%		07/2022		13,722				13,440				1.4				13,722
Batteries Plus Holding Corporation(4)	One stop		L + 6.75%		N/A(5)		07/2022		—				(2		)		—				—
CVS Holdings I, LP*^#	One stop		L + 6.25%	(a)	7.49%		08/2021		22,058				21,773				2.3				22,058
CVS Holdings I, LP*	One stop		L + 6.25%	(a)	7.49%		08/2021		318				313				—				318
CVS Holdings I, LP	One stop		L + 6.25%	(a)	7.49%		08/2021		34				28				—				34
CVS Holdings I, LP(4)	One stop		L + 6.25%		N/A(5)		08/2020		—				(2		)		—				—
Cycle Gear, Inc.^	One stop		L + 6.50%	(c)	7.80%		01/2020		10,427				10,321				1.1				10,427
Cycle Gear, Inc.	One stop		L + 6.50%	(c)	7.82%		01/2020		607				602				0.1				607
Cycle Gear, Inc.(4)	One stop		L + 6.50%		N/A(5)		01/2020		—				(12		)		—				—
DTLR, Inc.*^#	One stop		L + 6.50%	(c)	7.81%		08/2022		22,962				22,626				2.4				22,617
Elite Sportswear, L.P.	Senior loan		L + 5.25%	(c)	6.58%		03/2020		6,942				6,854				0.7				6,957
Elite Sportswear, L.P.	Senior loan		L + 5.00%	(c)	6.33%		03/2020		2,792				2,756				0.3				2,779
Elite Sportswear, L.P.	Senior loan		L + 5.25%	(c)	6.58%		03/2020		1,436				1,423				0.2				1,439
Elite Sportswear, L.P.*	Senior loan		L + 5.25%	(c)	6.55%		03/2020		471				467				0.1				472
Elite Sportswear, L.P.	Senior loan		L + 5.25%	(c)	6.58%		03/2020		218				215				—				218
Elite Sportswear, L.P.*	Senior loan		L + 5.25%	(a)	6.49%		03/2020		208				206				—				209
Elite Sportswear, L.P.	One stop		L + 5.00%		N/A(5)		06/2018		—				—				—				—
Elite Sportswear, L.P.(4)	Senior loan		L + 5.00%		N/A(5)		03/2020		—				(5		)		—				(4		)
Feeders Supply Company, LLC	One stop		L + 5.75%	(a)	6.99%		04/2021		5,049				4,966				0.5				5,049
Feeders Supply Company, LLC	Subordinated debt		N/A		12.50% cash/7.00% PIK		04/2021		59				59				—				59
Feeders Supply Company, LLC	One stop		L + 5.75%		N/A(5)		04/2021		—				—				—				—
Marshall Retail Group LLC, The^#	One stop		L + 6.00%	(c)	7.30%		08/2020		12,023				11,950				1.3				12,023
Marshall Retail Group LLC, The	One stop		P + 4.75%	(e)	9.00%		08/2019		293				279				—				293
Mills Fleet Farm Group LLC*^	One stop		L + 5.50%	(a)	6.74%		02/2022		1,815				1,723				0.2				1,815
Paper Source, Inc.^#	One stop		L + 6.25%	(c)	7.58%		09/2019		12,626				12,558				1.3				12,626
Paper Source, Inc.*	One stop		L + 6.25%	(c)	7.58%		09/2019		1,677				1,666				0.2				1,677
Paper Source, Inc.	One stop		P + 5.00%	(e)	9.25%		09/2019		525				515				0.1				525
Pet Holdings ULC*^(7)(8)	One stop		L + 5.50%	(c)	6.80%		07/2022		14,627				14,394				1.5				14,627
Pet Holdings ULC(7)(8)	One stop		L + 5.50%	(c)	6.81%		07/2022		56				55				—				56
Pet Holdings ULC(4)(7)(8)	One stop		L + 5.50%		N/A(5)		07/2022		—				(2		)		—				—
PetPeople Enterprises, LLC#	One stop		L + 6.00%	(c)	7.32%		09/2023		3,145				3,107				0.3				3,114
PetPeople Enterprises, LLC	One stop		N/A		8.25% PIK		01/2019		155				155				—				155
PetPeople Enterprises, LLC(4)	One stop		L + 6.00%		N/A(5)		09/2023		—				—				—				(1		)
PetPeople Enterprises, LLC(4)	One stop		L + 6.00%		N/A(5)		09/2023		—				(1		)		—				—
									134,245				132,427				14.0				133,871

See Notes to Consolidated Financial Statements.

34

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Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2017

(In thousands)

	Investment		Spread Above Index(1)		Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets				Fair Value (16)
Telecommunications
Arise Virtual Solutions, Inc.^	One stop		L + 6.00%	(c)	7.33%		12/2018		$	1,260			$	1,256			0.1			%	$	1,260
Arise Virtual Solutions, Inc.	One stop		L + 6.00%		N/A(5)		12/2018		—				—				—				—
NetMotion Wireless Holdings, Inc.*^#	One stop		L + 6.25%	(c)	7.58%		10/2021		7,338				7,249				0.8				7,338
NetMotion Wireless Holdings, Inc.(4)	One stop		L + 6.25%		N/A(5)		10/2021		—				(1		)		—				—
									8,598				8,504				0.9				8,598
Textile and Leather
SHO Holding I Corporation*	Senior loan		L + 5.00%	(a)	6.24%		10/2022		2,233				2,194				0.2				2,233
SHO Holding I Corporation	Senior loan		L + 4.00%	(a)(b)	5.24%		10/2021		16				15				—				14
									2,249				2,209				0.2				2,247
Utilities
Arcos, LLC	One stop		L + 6.00%	(c)	7.33%		02/2021		3,679				3,629				0.4				3,679
Arcos, LLC	One stop		L + 6.00%		N/A(5)		02/2021		—				—				—				—
Power Plan Holdings, Inc.*^	Senior loan		L + 5.25%	(a)	6.49%		02/2022		6,434				6,346				0.7				6,434
PowerPlan Holdings, Inc.*	Senior loan		L + 5.25%	(a)	6.49%		02/2022		5,659				5,606				0.5				5,659
PowerPlan Holdings, Inc.(4)	Senior loan		L + 5.25%		N/A(5)		02/2021		—				(6		)		—				—
									15,772				15,575				1.6				15,772
Total non-controlled/non-affiliate company debt investments									$	1,551,043			$	1,531,357			160.2			%	$	1,534,909
Equity Investments (9)(10)
Aerospace and Defense
NTS Technical Systems	Common stock		N/A		N/A		N/A		2				$	1,506			0.1			%	$	835
NTS Technical Systems	Preferred stock B		N/A		N/A		N/A		—				256				—				275
NTS Technical Systems	Preferred stock A		N/A		N/A		N/A		—				128				—				150
Tresys Technology Holdings, Inc.	Common stock		N/A		N/A		N/A		295				295				—				—
Whitcraft LLC	Common stock		N/A		N/A		N/A		4				375				0.1				375
													2,560				0.2				1,635
Automobile
Polk Acquisition Corp.	LP interest		N/A		N/A		N/A		1				144				—				92
Beverage, Food and Tobacco
Atkins Nutritionals, Inc	LLC interest		N/A		N/A		N/A		57				—				0.1				578
Benihana, Inc.	LLC units		N/A		N/A		N/A		43				699				—				357
C. J. Foods, Inc.	Preferred stock		N/A		N/A		N/A		—				75				—				302
Cafe Rio Holding, Inc.	Common stock		N/A		N/A		N/A		2				224				—				224
Hopdoddy Holdings, LLC	LLC interest		N/A		N/A		N/A		27				130				—				89
Hopdoddy Holdings, LLC	LLC interest		N/A		N/A		N/A		12				36				—				25
Julio & Sons Company	LLC interest		N/A		N/A		N/A		521				521				0.1				1,012
P&P Food Safety US Acquisition, Inc.	LLC interest		N/A		N/A		N/A		2				204				—				210
Purfoods, LLC	LLC interest		N/A		N/A		N/A		381				381				—				411
Richelieu Foods, Inc.	LP interest		N/A		N/A		N/A		220				220				0.1				580
Rubio's Restaurants, Inc.	Preferred stock		N/A		N/A		N/A		2				945				0.2				1,951
Tate's Bake Shop, Inc.	LP interest		N/A		N/A		N/A		462				428				0.1				647
Uinta Brewing Company	LP interest		N/A		N/A		N/A		462				462				—				—
													4,325				0.6				6,386
Buildings and Real Estate
Brooks Equipment Company, LLC	Common stock		N/A		N/A		N/A		10				1,021				0.1				1,502

See Notes to Consolidated Financial Statements.

35

---

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2017

(In thousands)

	Investment		Spread Above Index(1)		Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets				Fair Value (16)
Chemicals, Plastics and Rubber
Flexan, LLC	Preferred stock A		N/A		N/A		N/A		—				$	90			0.1			%	$	108
Flexan, LLC	Common stock		N/A		N/A		N/A		1				—				—				17
													90				0.1				125
Diversified/Conglomerate Manufacturing
Chase Industries, Inc.	LLC units		N/A		N/A		N/A		1				1,186				0.2				2,131
Inventus Power, Inc.	Preferred stock		N/A		N/A		N/A		—				370				—				—
Inventus Power, Inc.	Common stock		N/A		N/A		N/A		—				—				—				—
Reladyne, Inc.	LP interest		N/A		N/A		N/A		—				249				0.1				463
Sunless Merger Sub, Inc.	LP interest		N/A		N/A		N/A		160				160				—				—
													1,965				0.3				2,594
Diversified/Conglomerate Service
Accela, Inc.	LLC units		N/A		N/A		N/A		296				296				—				296
Actiance, Inc.	Warrant		N/A		N/A		N/A		510				122				—				178
Agility Recovery Solutions Inc.	Preferred stock		N/A		N/A		N/A		67				341				0.1				429
Bomgar Corporation	Common stock		N/A		N/A		N/A		—				107				—				120
Bomgar Corporation	Common stock		N/A		N/A		N/A		72				1				—				6
DISA Holdings Acquisition Subsidiary Corp.	Common stock		N/A		N/A		N/A		—				154				—				150
HealthcareSource HR, Inc.	LLC interest		N/A		N/A		N/A		—				348				0.1				371
Host Analytics, Inc.	Warrant		N/A		N/A		N/A		347				130				—				277
Marathon Data Operating Co., LLC	LLC units		N/A		N/A		N/A		1				264				0.1				550
Marathon Data Operating Co., LLC	LLC units		N/A		N/A		N/A		1				264				0.1				986
Maverick Bidco Inc.	LLC units		N/A		N/A		N/A		1				369				0.1				369
MMan Acquisition Co.	LP interest		N/A		N/A		N/A		263				263				—				263
Project Alpha Intermediate Holding, Inc.	Common stock		N/A		N/A		N/A		—				417				0.1				459
Project Alpha Intermediate Holding, Inc.	Common stock		N/A		N/A		N/A		103				4				—				4
Secure-24, LLC	LLC units		N/A		N/A		N/A		263				148				0.1				802
Switchfly, Inc.	Warrant		N/A		N/A		N/A		60				85				—				136
Vendavo, Inc.	Preferred stock		N/A		N/A		N/A		894				894				0.1				831
Verisys Corporation	LLC interest		N/A		N/A		N/A		261				261				—				284
Vitalyst, LLC	Preferred stock A		N/A		N/A		N/A		—				61				—				58
Vitalyst, LLC	Common stock		N/A		N/A		N/A		1				7				—				—
Workforce Software, LLC	LLC units		N/A		N/A		N/A		308				308				—				357
Xmatters, Inc. and Alarmpoint, Inc.	Warrant		N/A		N/A		N/A		43				34				—				31
													4,878				0.8				6,957
Ecological
Pace Analytical Services, LLC	LLC units		N/A		N/A		N/A		3				304				—				364
													304				—				364
Electronics
Diligent Corporation (11)	Preferred stock		N/A		N/A		N/A		83				66				—				121
Gamma Technologies, LLC	LLC units		N/A		N/A		N/A		1				134				—				331
Project Silverback Holdings Corp.	Preferred stock		N/A		N/A		N/A		3				6				—				256
SEI, Inc.	LLC units		N/A		N/A		N/A		340				265				0.1				482
Sloan Company, Inc., The	LLC units		N/A		N/A		N/A		—				122				—				1
Sloan Company, Inc., The	LLC units		N/A		N/A		N/A		1				14				—				—
													607				0.1				1,191

See Notes to Consolidated Financial Statements.

36

---

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2017

(In thousands)

	Investment		Spread Above Index(1)		Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets				Fair Value (16)
Grocery
MyWebGrocer, Inc.	LLC units		N/A		N/A		N/A		1,418				$	1,446			0.2			%	$	2,064
MyWebGrocer, Inc.	Preferred stock		N/A		N/A		N/A		71				165				—				268
													1,611				0.2				2,332
Healthcare, Education and Childcare
Active Day, Inc.	LLC interest		N/A		N/A		N/A		1				614				0.1				718
Acuity Eyecare Holdings, LLC	LLC interest		N/A		N/A		N/A		198				198				—				247
ADCS Clinics Intermediate Holdings, LLC	Preferred stock		N/A		N/A		N/A		1				579				0.1				467
ADCS Clinics Intermediate Holdings, LLC	Common stock		N/A		N/A		N/A		—				6				—				—
Advanced Pain Management Holdings, Inc.	Preferred stock		N/A		N/A		N/A		8				829				—				—
Advanced Pain Management Holdings, Inc.	Common stock		N/A		N/A		N/A		67				67				—				—
Advanced Pain Management Holdings, Inc.	Preferred stock		N/A		N/A		N/A		1				64				—				—
BIORECLAMATIONIVT, LLC	LLC interest		N/A		N/A		N/A		—				407				0.1				614
California Cryobank, LLC	LLC units		N/A		N/A		N/A		—				28				—				36
California Cryobank, LLC	LLC units		N/A		N/A		N/A		—				11				—				12
California Cryobank, LLC	LLC units		N/A		N/A		N/A		—				—				—				12
DCA Investment Holding, LLC	LLC units		N/A		N/A		N/A		8,637				864				0.1				938
DCA Investment Holding, LLC	LLC units		N/A		N/A		N/A		87				9				—				—
Deca Dental Management LLC	LLC units		N/A		N/A		N/A		357				357				0.1				410
Dental Holdings Corporation	LLC units		N/A		N/A		N/A		805				805				0.1				550
Encore GC Acquisition, LLC	LLC units		N/A		N/A		N/A		18				182				—				149
Encore GC Acquisition, LLC	LLC units		N/A		N/A		N/A		18				—				—				—
Eyecare Services Partners Holdings LLC	LLC units		N/A		N/A		N/A		—				133				—				133
Eyecare Services Partners Holdings LLC	LLC units		N/A		N/A		N/A		—				1				—				1
G & H Wire Company, Inc.	LLC interest		N/A		N/A		N/A		148				148				—				148
IntegraMed America, Inc.	LLC interest		N/A		N/A		N/A		1				458				0.1				358
IntegraMed America, Inc.	LLC interest		N/A		N/A		N/A		—				417				—				328
Kareo, Inc.	Warrant		N/A		N/A		N/A		22				160				—				160
Katena Holdings, Inc.	LLC units		N/A		N/A		N/A		—				387				—				258
Lombart Brothers, Inc.	Common stock		N/A		N/A		N/A		—				132				—				176
MWD Management, LLC & MWD Services, Inc.	LLC interest		N/A		N/A		N/A		121				121				—				121
Oliver Street Dermatology Holdings, LLC	LLC units		N/A		N/A		N/A		234				234				0.1				313
Pentec Acquisition Sub, Inc.	Preferred stock		N/A		N/A		N/A		1				116				—				248
Pinnacle Treatment Centers, Inc.	Preferred stock		N/A		N/A		N/A		—				221				—				227
Pinnacle Treatment Centers, Inc.	Common stock		N/A		N/A		N/A		2				2				—				—
Radiology Partners, Inc.	LLC units		N/A		N/A		N/A		43				85				—				100
Reliant Pro ReHab, LLC	Preferred stock A		N/A		N/A		N/A		2				183				0.1				869
RXH Buyer Corporation	LP interest		N/A		N/A		N/A		7				683				—				239
Sage Dental Management, LLC	LLC units		N/A		N/A		N/A		—				249				0.1				370
Sage Dental Management, LLC	LLC units		N/A		N/A		N/A		3				3				—				134
SLMP, LLC	LLC interest		N/A		N/A		N/A		256				256				—				256
Spear Education, LLC	LLC units		N/A		N/A		N/A		—				62				—				71
Spear Education, LLC	LLC units		N/A		N/A		N/A		1				1				—				23
SSH Corporation	Common stock		N/A		N/A		N/A		—				40				—				61
Surgical Information Systems, LLC	Common stock		N/A		N/A		N/A		4				414				0.1				688
U.S. Renal Care, Inc.	LP interest		N/A		N/A		N/A		1				2,665				0.1				1,153
WHCG Management, LLC	LLC interest		N/A		N/A		N/A		—				220				—				217
Young Innovations, Inc.	LLC units		N/A		N/A		N/A		—				236				—				183

See Notes to Consolidated Financial Statements.

37

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Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2017

(In thousands)

	Investment		Spread Above Index(1)		Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets				Fair Value (16)
Healthcare, Education and Childcare - (continued)
Young Innovations, Inc.	Common stock		N/A		N/A		N/A		2				$	—			—			%	$	234
													12,647				1.2				11,222
Insurance
Captive Resources Midco, LLC	LLC units		N/A		N/A		N/A		1				—				0.1				346
Internet Pipeline, Inc. (11)	Preferred stock		N/A		N/A		N/A		—				72				—				87
Internet Pipeline, Inc.	Common stock		N/A		N/A		N/A		44				1				—				143
													73				0.1				576
Leisure, Amusement, Motion Pictures, Entertainment
LMP TR Holdings, LLC	LLC units		N/A		N/A		N/A		712				712				—				509
PADI Holdco, Inc.	LLC units		N/A		N/A		N/A		—				414				—				414
Titan Fitness, LLC	LLC units		N/A		N/A		N/A		7				712				0.1				826
													1,838				0.1				1,749
Personal and Non Durable Consumer Products (Mfg. Only)
Georgica Pine Clothiers, LLC	LLC interest		N/A		N/A		N/A		11				106				—				103
Massage Envy, LLC	LLC interest		N/A		N/A		N/A		749				210				0.1				866
Team Technologies Acquisition Company	Common stock		N/A		N/A		N/A		—				114				—				297
													430				0.1				1,266
Personal, Food and Miscellaneous Services
Community Veterinary Partners, LLC	Common stock		N/A		N/A		N/A		1				147				0.1				153
R.G. Barry Corporation	Preferred stock A		N/A		N/A		N/A		—				161				—				108
Southern Veterinary Partners, LLC	LLC units		N/A		N/A		N/A		—				38				—				37
Southern Veterinary Partners, LLC	LLC units		N/A		N/A		N/A		40				2				—				2
Vetcor Professional Practices LLC	LLC units		N/A		N/A		N/A		766				459				0.1				510
Vetcor Professional Practices LLC	LLC units		N/A		N/A		N/A		85				85				0.1				1,027
Veterinary Specialists of North America, LLC	LLC units		N/A		N/A		N/A		—				106				—				141
Wetzel's Pretzels, LLC	Common stock		N/A		N/A		N/A		—				160				—				186
													1,158				0.3				2,164
Printing and Publishing
Brandmuscle, Inc.	LLC interest		N/A		N/A		N/A		—				240				—				236
Retail Stores
Barcelona Restaurants, LLC	LP interest		N/A		N/A		N/A		1,996				—				0.7				6,945
Batteries Plus Holding Corporation	LLC units		N/A		N/A		N/A		5				529				0.1				685
Cycle Gear, Inc.	LLC interest		N/A		N/A		N/A		19				248				0.1				379
DTLR, Inc.	LLC interest		N/A		N/A		N/A		4				411				0.1				573
Elite Sportswear, L.P.	LLC interest		N/A		N/A		N/A		—				158				—				97
Feeders Supply Company, LLC	Preferred stock		N/A		N/A		N/A		2				192				—				219
Feeders Supply Company, LLC	Common stock		N/A		N/A		N/A		—				—				—				105
Marshall Retail Group LLC, The	LLC units		N/A		N/A		N/A		15				154				—				82
Paper Source, Inc.	Common stock		N/A		N/A		N/A		8				1,387				0.1				911
Pet Holdings ULC(7)(8)	LP interest		N/A		N/A		N/A		455				386				—				469
													3,465				1.1				10,465

See Notes to Consolidated Financial Statements.

38

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Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2017

(In thousands)

	Investment		Spread Above Index(1)		Interest Rate(2)		Maturity Date		Principal ($) / Shares(3)				Amortized Cost				Percentage of Net Assets				Fair Value (16)
Utilities
PowerPlan Holdings, Inc.	Common stock		N/A		N/A		N/A		—				$	260			—			%	$	260
PowerPlan Holdings, Inc.	Common stock		N/A		N/A		N/A		152				3				0.1				268
													263				0.1				528
Total non-controlled/non-affiliate company equity investments													$	37,619			5.4			%	$	51,384
Total non-controlled/non-affiliate company investments									$	1,551,043			$	1,568,976			165.6			%	$	1,586,293
Non-controlled affiliate company investments(12)
Debt investments
Mining, Steel, Iron and Non-Precious Metals
Benetech, Inc.*(7)	One stop		L + 11.00%	(a)	10.25% cash/2.00% PIK		08/2018		$	4,438			$	4,435			0.4			%	$	3,551
Benetech, Inc.(7)	One stop		P + 9.75%	(a)(e)	11.96% cash/2.00% PIK		08/2018		371				371				—				146
									4,809				4,806				0.4				3,697
Total non-controlled affiliate company debt investments									$	4,809			$	4,806			0.4			%	$	3,697
Equity Investments (9)(10)
Mining, Steel, Iron and Non-Precious Metals
Benetech, Inc.(7)	LLC interest		N/A		N/A		N/A		—				$	—			—			%	$	10
Benetech, Inc.(7)	LLC interest		N/A		N/A		N/A		—				—				—				—
													—				—				10
Total non-controlled affiliate company equity investments													$	—			—			%	$	10
Total non-controlled affiliate company investments									$	4,809			$	4,806			0.4			%	$	3,707
Controlled affiliate company investments(13)
Equity Investments(9)
Investment Funds and Vehicles
Senior Loan Fund LLC(7)(14)	LLC interest		N/A		N/A				—				$	97,457			9.9			%	$	95,015
Total controlled affiliate company equity investments													$	97,457			9.9			%	$	95,015
Total investments									$	1,555,852			$	1,671,239			175.9			%	$	1,685,015
Cash, cash equivalents and restricted cash and cash equivalents
Cash and restricted cash													$	48,733			5.1			%	$	48,733
BlackRock Liquidity Funds T-Fund Institutional Shares (CUSIP 09248U718)					0.91% (15)								13,825				1.4				13,825
Total cash, cash equivalents and restricted cash and cash equivalents													$	62,558			6.5			%	$	62,558
Total investments and cash, cash equivalents and restricted cash and cash equivalents													$	1,733,797			182.4			%	$	1,747,573

See Notes to Consolidated Financial Statements.

39

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Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2017

(In thousands)

*		Denotes that all or a portion of the loan secures the notes offered in the 2010 Debt Securitization (as defined in Note 6).
^		Denotes that all or a portion of the loan secures the notes offered in the 2014 Debt Securitization (as defined in Note 6).
#		Denotes that all or a portion of the loan collateralizes the Credit Facility (as defined in Note 6).

(1)

The majority of the investments bear interest at a rate that may be determined by reference to LIBOR or Prime and which reset daily, quarterly or semiannually. For each, the Company has provided the spread over LIBOR or Prime and the weighted average current interest rate in effect at September 30, 2017. Certain investments are subject to a LIBOR or Prime interest rate floor. For fixed rate loans, a spread above a reference rate is not applicable. Listed below are the index rates as of September 29, 2017. The actual index rate for each loan listed may not be the applicable index rate outstanding as of September 30, 2017, as the loan may have priced or repriced based on an index rate prior to September 29, 2017, which was the last business day of the period on which LIBOR was determined.

^(a) Denotes that all or a portion of the loan was indexed to the 30-day LIBOR, which was 1.23% as of September 29, 2017.

^(b) Denotes that all or a portion of the loan was indexed to the 60-day LIBOR, which was 1.27% as of September 29, 2017.

^(c) Denotes that all or a portion of the loan was indexed to the 90-day LIBOR, which was 1.33% as of September 29, 2017.

^(d) Denotes that all or a portion of the loan was indexed to the 180-day LIBOR, which was 1.51% as of September 29, 2017.

^(e) Denotes that all or a portion of the loan was indexed to the Prime rate, which was 4.25% as of September 29, 2017.

(2)	For portfolio companies with multiple interest rate contracts, the interest rate shown is a weighted average current interest rate in effect as of September 30, 2017.

(3)	The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.

(4)	The negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par. The negative amortized cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan.

(5)	The entire commitment was unfunded as of September 30, 2017. As such, no interest is being earned on this investment.

(6)	Loan was on non-accrual status as of September 30, 2017, meaning that the Company has ceased recognizing interest income on the loan.

(7)

The investment is treated as a non-qualifying asset 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.  As of September 30, 2017, total non-qualifying assets at fair value represented 6.7% of the Company's assets calculated in accordance with the 1940 Act.

(8)	The headquarters of this portfolio company is located in Canada.

(9)	Equity investments are non-income producing securities unless otherwise noted.

(10)	Ownership of certain equity investments may occur through a holding company or partnership.

(11)	The Company holds an equity investment that entitles it to receive preferential dividends

(12)	As defined in the 1940 Act, the Company is deemed to be an "affiliated person" of the company as the Company along with affiliated entities owns five percent or more of the portfolio company's securities. Transactions related to investments in non-controlled affiliates for the year ended September 30, 2017 were as follows:

Portfolio Company		Fair value as of September 30, 2016				Purchases (cost)(f)				Redemptions (cost)				Transfer in (out)				Discount accretion				Net change in unrealized gain/(loss)				Fair value as of September 30, 2017				Net realized gain/(loss)				Interest and fee income				Dividend income
Benetech, Inc.(g)		$	—			$	17			$	(68	)		$	3,738			$	2			$	18			$	3,707			$	—			$	113			$	—
Competitor Group, Inc.		9,618				491				(15,615		)		—				278				5,228				—				(6,442		)		1,023				—
Total Non-Controlled Affiliates		$	9,618			$	508			$	(15,683	)		$	3,738			$	280			$	5,246			$	3,707			$	(6,442	)		$	1,136			$	—

(f)	Purchases at cost includes amounts related to PIK interest capitalized and added to the principal balance of the respective loans.
(g)	During the three months ended September 30, 2017, the Company's ownership increased to over five percent of the portfolio company's voting securities.

(13)

As defined in the 1940 Act, the Company is deemed to be both an "affiliated person" of and "control" this portfolio company as the Company owns more than 25% of the portfolio company's outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement). Transactions related to investments in controlled affiliates for the year ended September 30, 2017 were as follows:

Portfolio Company		Fair value as of September 30, 2016				Purchases (cost)(h)				Redemptions (cost)				Transfer in (out)				Discount accretion				Net change in unrealized gain/(loss)				Fair value as of September 30, 2017				Net realized gain/(loss)				Interest and fee income				Dividend income
Senior Loan Fund LLC(i)		$	104,228			$	96,688			$	(107,870	)		$	—			$	—			$	1,969			$	95,015			$	—			$	1,639			$	4,929
Total Controlled Affiliates		$	104,228			$	96,688			$	(107,870	)		$	—			$	—			$	1,969			$	95,015			$	—			$	1,639			$	4,929

(h)	Purchases at cost includes amounts related to PIK interest capitalized and added to the principal balance of the respective loans.
(i)	Together with RGA, the Company co-invests through SLF. SLF is capitalized as transactions are completed and all portfolio and investment decisions in respect to SLF must be approved by the SLF investment committee consisting of two representatives of the Company and RGA (with unanimous approval required from (i) one representative of each of the Company and RGA or (ii) both representatives of each of the Company and RGA). Therefore, although the Company owns more than 25% of the voting securities of SLF, the Company does not believe that it has control over SLF for purposes of the 1940 Act or otherwise.

(14)	The Company receives quarterly profit distributions from its equity investment in SLF. See note 4. Investments.

(15)	The rate shown is the annualized seven-day yield as of September 30, 2017.

(16)	The fair value of the investment was valued using significant unobservable inputs. See Note 5. Fair Value Measurements.

See Notes to Consolidated Financial Statements.

40

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

Note 1. Organization

Golub Capital BDC, Inc. (“GBDC” and, collectively with its subsidiaries, the “Company”) is an externally managed, closed-end, non-diversified management investment company. GBDC 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, for U.S. federal income tax purposes, GBDC has elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).

The Company’s investment strategy is to invest primarily in one stop (a loan that combines characteristics of traditional first lien senior secured loans and second lien or subordinated loans and that are often referred to by other middle-market lenders as unitranche loans) and other senior secured loans of U.S. middle-market companies. The Company may also selectively invest in second lien and subordinated (a loan that ranks senior only to a borrower’s equity securities and ranks junior to all of such borrower’s other indebtedness in priority of payment) loans of, and warrants and minority equity securities in, U.S. middle-market companies. The Company has entered into an investment advisory agreement (the “Investment Advisory Agreement”) with GC Advisors LLC (the “Investment Adviser”), under which the Investment Adviser manages the day-to-day operations of, and provides investment advisory services to, the Company. Under an administration agreement (the “Administration Agreement”) the Company is provided with certain services by an administrator (the “Administrator”), which is currently Golub Capital LLC.

Note 2. Significant Accounting Policies and Recent Accounting Updates

Basis of presentation:  The Company is an investment company as defined in the accounting and reporting guidance under Accounting Standards Codification (“ASC”) Topic 946 — Financial Services — Investment Companies (“ASC Topic 946”).

The accompanying interim consolidated financial statements of the Company and related financial information have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6, 10 and 12 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, the consolidated financial statements reflect all adjustments and reclassifications consisting solely of normal accruals that are necessary for the fair presentation of financial results as of and for the periods presented. All intercompany balances and transactions have been eliminated. Certain prior period amounts have been reclassified to conform to the current period presentation. The unaudited interim consolidated financial statements and notes thereto should be read in conjunction with the financial statements and notes thereto in the Company’s Form 10-K for the year ended September 30, 2017, as filed with the U.S. Securities and Exchange Commission (the "SEC").

Fair value of financial instruments:  The Company applies fair value to all of its financial instruments in accordance with ASC Topic 820 — Fair Value Measurement (“ASC Topic 820”). ASC Topic 820 defines fair value, establishes a framework used to measure fair value and requires disclosures for fair value measurements. In accordance with ASC Topic 820, the Company has categorized its financial instruments carried at fair value, based on the priority of the valuation technique, into a three-level fair value hierarchy. Fair value is a market-based measure considered from the perspective of the market participant who holds the financial instrument rather than an entity-specific measure. Therefore, when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that management believes market participants would use in pricing the financial instrument at the measurement date.

The availability of observable inputs can vary depending on the financial instrument and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new, whether the product is traded on an active exchange or in the secondary market and the current market conditions. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for financial instruments classified as Level 3.

Any changes to the valuation methodology are reviewed by management and the Company’s board of directors (the “Board”) to confirm that the changes are appropriate. As markets change, new products develop and the pricing for products becomes more or less transparent, the Company will continue to refine its valuation methodologies. See Note 5.

Use of estimates:  The preparation of the consolidated financial statements in conformity with 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

41

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Consolidation:  As provided under Regulation S-X and ASC Topic 946, the Company will generally not consolidate its investment in a company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. Accordingly, the Company consolidated the results of the Company’s wholly-owned subsidiaries Golub Capital BDC 2010-1 Holdings LLC (“Holdings”), Golub Capital BDC 2010-1 LLC (“2010 Issuer”), Golub Capital BDC CLO 2014 LLC (“2014 Issuer”), Golub Capital BDC Funding LLC (“Funding”), Golub Capital BDC Holdings, LLC (“BDC Holdings”), GC SBIC IV, L.P. (“SBIC IV”), GC SBIC V, L.P. (“SBIC V”) and GC SBIC VI, L.P. (“SBIC VI”). The Company does not consolidate its non-controlling interest in SLF. See further description of the Company’s investment in SLF in Note 4.

Assets related to transactions that do not meet ASC Topic 860 requirements for accounting sale treatment are reflected in the Company’s Consolidated Statements of Financial Condition as investments. Those assets are owned by special purpose entities, including 2010 Issuer, 2014 Issuer and Funding that are consolidated in the Company’s consolidated financial statements. The creditors of the special purpose entities have received security interests in such assets and such assets are not intended to be available to the creditors of GBDC (or any affiliate of GBDC).

Cash and cash equivalents: Cash and cash equivalents are highly liquid investments with an original maturity of three months or less at the date of acquisition. The Company deposits its cash in financial institutions and, at times, such balances may be in excess of the Federal Deposit Insurance Corporation insurance limits.

Restricted cash and cash equivalents:  Restricted cash and cash equivalents include amounts that are collected and are held by trustees who have been appointed as custodians of the assets securing certain of the Company’s financing transactions. Restricted cash and cash equivalents are held by the trustees for payment of interest expense and principal on the outstanding borrowings or reinvestment into new assets. In addition, restricted cash and cash equivalents include amounts held within the Company’s small business investment company (“SBIC”) subsidiaries. The amounts held within the SBICs are generally restricted to the originations of new loans by the SBICs and the payment of U.S. Small Business Administration (“SBA”) debentures and related interest expense.

Foreign currency translation: The Company’s books and records are maintained in U.S. dollars. Any foreign currency amounts are translated into U.S. dollars on the following basis:

(1)	cash and cash equivalents, fair value of investments, interest receivable, and other assets—at the spot exchange rate on the last business day of the period; and

(2)	purchases and sales of investments, income and expenses—at the exchange rates prevailing on the respective dates of such transactions.

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

Foreign security and currency transactions may involve certain considerations and risks not typically associated with investing in U.S. companies. These risks include, but are not limited to, currency fluctuations and revaluations and future adverse political, social and economic developments, which could cause investments in foreign markets to be less liquid and prices more volatile than those of comparable U.S. companies or U.S. government securities.

Revenue recognition:

Investments and related investment income:  Interest income is accrued based upon the outstanding principal amount and contractual interest terms of debt investments.

Loan origination fees, original issue discount and market discount or premium are capitalized, and the Company accretes or amortizes such amounts over the life of the loan as interest income. For the three and nine months ended June 30, 2018, interest income included $2,350 and $7,420, respectively, of accretion of discounts. For the three and nine months ended June 30, 2017, interest income

42

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

included $3,169 and $6,792, respectively, of accretion of discounts. For the three and nine months ended June 30, 2018, the Company received loan origination fees of $1,933 and $6,038, respectively. For the three and nine months ended June 30, 2017, the Company received loan origination fees of $3,947 and $6,976, respectively.

For investments with contractual PIK interest, which represents contractual interest accrued and added to the principal balance that generally becomes due at maturity, the Company will not accrue PIK interest if the portfolio company valuation indicates that the PIK interest is not collectible. For the three and nine months ended June 30, 2018, the Company recorded PIK income of $203 and $722, respectively, and received PIK payments in cash of $0 and $2, respectively. For the three and nine months ended June 30, 2017, the Company recorded PIK income of $632 and $2,028, respectively, and received PIK payments in cash of $233 and $419, respectively.

 

In addition, the Company may generate revenue in the form of amendment, structuring or due diligence fees, fees for providing managerial assistance, consulting fees and prepayment premiums on loans. The Company records these fees as fee income when earned. All other income is recorded into income when earned. For the three and nine months ended June 30, 2018, fee income included $346 and $1,312, respectively, of prepayment premiums, which fees are non-recurring. For the three and nine months ended June 30, 2017, fee income included $926 and $1,191, respectively, of prepayment premiums, which fees are non-recurring.

For the three and nine months ended June 30, 2018, the Company received interest and fee income in cash, which excludes capitalized loan origination fees, in the amounts of $34,961 and $96,924, respectively. For the three and nine months ended June 30, 2017, the Company received interest and fee income in cash, which excludes capitalized loan origination fees, in the amounts of $30,805 and $89,962, respectively.

Dividend income on preferred equity securities is recorded as dividend income 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 securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies. Each distribution received from limited liability company (“LLC”) and limited partnership (“LP”) investments is evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, the Company will not record distributions from equity investments in LLCs and LPs as dividend income unless there are sufficient accumulated tax-basis earnings and profits in the LLC or LP prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment.

For the three and nine months ended June 30, 2018, excluding the Company's investment in LLC equity interests in SLF, the Company recorded dividend income of $10 and $620, respectively, and return of capital distributions of $0 and $373, respectively. For the three and nine months ended June 30, 2018, the Company recorded dividend income of $2,050 and $5,868, respectively, and return of capital distributions of $4,463 and $8,663, respectively, from the Company's investment in LLC equity interests in SLF. For the three and nine months ended June 30, 2017, excluding the Company's investment in LLC equity interests in SLF, the Company recorded dividend income of $278 and $438, respectively, and return of capital distributions of $18 and $999, respectively. For the three and nine months ended June 30, 2017, the Company recorded dividend income of $891 and $4,054, respectively, and return of capital distributions of $7,350 and $9,450, respectively, from the Company's investment in LLC equity interests in SLF.

Investment transactions are accounted for on a trade-date basis. Realized gains or losses on investments are measured by the difference between the net proceeds from the disposition and the amortized cost basis of investment, without regard to unrealized gains or losses previously recognized. The Company reports current period changes in fair value of investments that are measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investments and foreign currency translation in the Consolidated Statements of Operations.

Non-accrual loans: A loan may be left on accrual status during the period the Company is pursuing repayment of the loan. Management reviews all loans that become 90 days or more past due on principal and interest, or when there is reasonable doubt that principal or interest will be collected, for possible placement on non-accrual status. When a loan is placed on non-accrual status, unpaid interest credited to income is reversed. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management’s judgment, payments are likely to remain current. The total fair value of non-accrual loans was $13,262 and $2,955 as of June 30, 2018 and September 30, 2017, respectively.

Partial loan sales:  The Company follows the guidance in ASC Topic 860 when accounting for loan participations and other partial loan sales. Such guidance requires a participation or other partial loan sale to meet the definition of a “participating interest”, as

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

defined in the guidance, in order for sale treatment to be allowed. Participations or other partial loan sales which do not meet the definition of a participating interest remain on the Company’s Consolidated Statements of Financial Condition and the proceeds are recorded as a secured borrowing until the definition is met. Secured borrowings are carried at fair value to correspond with the related investments, which are carried at fair value. See Note 6 for additional information.

Income taxes:  The Company has elected to be treated as a RIC under Subchapter M of the Code and operates in a manner so as to qualify for the tax treatment applicable to RICs. In order to qualify and be subject to tax as a RIC, among other things, the Company is required to meet certain source of income and asset diversification requirements and timely distribute dividends for U.S. federal income tax purposes to its stockholders of an amount generally at least equal to 90% of investment company taxable income, as defined by the Code and determined without regard to any deduction for dividends paid, for each tax year. The Company has made, and intends to continue to make, the requisite distributions to its stockholders, which will generally relieve the Company from U.S. federal income taxes with respect to all income distributed to its stockholders.

Depending on the level of taxable income earned in a tax year, the Company may choose to retain taxable income in excess of current year dividend distributions and would distribute such taxable income in the next tax year. The Company may then be required to incur a 4% excise tax on such income. To the extent that the Company determines that it's estimated current year annual taxable income, determined on a calendar year basis, could exceed estimated current calendar year dividend distributions, the Company accrues excise tax, if any, on estimated excess taxable income as taxable income is earned. For the three and nine months ended June 30, 2018, $0 and $0, respectively, was incurred for U.S. federal excise tax. For the three and nine months ended June 30, 2017, $0 and $17, respectively, was incurred for U.S. federal excise tax.

The Company accounts for income taxes in conformity with ASC Topic 740 — Income Taxes (“ASC Topic 740”). ASC Topic 740 provides guidelines for how uncertain tax positions should be recognized, measured, presented and disclosed in financial statements. ASC Topic 740 requires the evaluation of tax positions taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense or tax benefit in the current year. It is the Company’s policy to recognize accrued interest and penalties related to uncertain tax benefits in income tax expense. There were no material unrecognized tax benefits or unrecognized tax liabilities related to uncertain income tax positions through June 30, 2018. The Company's tax returns for the 2014 through 2017 tax years remain subject to examination by U.S. federal and most state tax authorities.

Dividends and distributions:  Dividends and distributions to common stockholders are recorded on the ex-dividend date. The amount to be paid out as a dividend or distribution is determined by the Board each quarter and is generally based upon the earnings estimated by management. Net realized capital gains, if any, are distributed at least annually, although the Company may decide to retain such capital gains for investment.

The Company has adopted a dividend reinvestment plan (“DRIP”) that provides for reinvestment of any distributions the Company declares in cash on behalf of its stockholders, unless a stockholder elects to receive cash. As a result, if the Board authorizes and the Company declares a cash distribution, then stockholders who participate in the DRIP will have their cash distribution reinvested in additional shares of the Company’s common stock, rather than receiving the cash distribution. The Company may use newly issued shares under the guidelines of the DRIP (if the Company’s shares are trading at a premium to net asset value), or the Company may purchase shares in the open market in connection with the obligations under the plan. In particular, if the Company’s shares are trading at a significant discount to net asset value (“NAV”) and the Company is otherwise permitted under applicable law to purchase such shares, the Company intends to purchase shares in the open market in connection with any obligations under the DRIP.

In the event the market price per share of the Company’s common stock on the date of a distribution exceeds the most recently computed NAV per share of the common stock, the Company will issue shares of common stock to participants in the DRIP at the greater of the most recently computed NAV per share of common stock or 95% of the current market price per share of common stock (or such lesser discount to the current market price per share that still exceeds the most recently computed NAV per share of common stock).

Share repurchase plan:  The Company has a share repurchase program (the “Program”) which allows the Company to repurchase up to $75,000 of the Company’s outstanding common stock on the open market at prices below the Company’s NAV as reported in its most recently published consolidated financial statements. The Board most recently reapproved the Program in August 2018 and the Program may be implemented at the discretion of management. The shares may be purchased from time to time at prevailing market

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

prices, through open market transactions, including block transactions. The Company did not make any repurchases of its common stock during each of the three and nine months ended June 30, 2018 and 2017.

Deferred debt issuance costs: Deferred debt issuance costs represent fees and other direct incremental costs incurred in connection with the Company’s borrowings. As of June 30, 2018 and September 30, 2017, the Company had deferred debt issuance costs of $3,128 and $4,273, respectively. These amounts are amortized and included in interest expense in the Consolidated Statements of Operations over the estimated average life of the borrowings. Amortization expense for the three and nine months ended June 30, 2018 was $807 and $2,242, respectively. Amortization expense for the three and nine months ended June 30, 2017 was $843 and $2,488, respectively.

Deferred offering costs: Deferred offering costs consist of fees paid in relation to legal, accounting, regulatory and printing work completed in preparation of equity offerings. Deferred offering costs are charged against the proceeds from equity offerings when received. As of June 30, 2018 and September 30, 2017, deferred offering costs, which are included in other assets on the Consolidated Statements of Financial Condition, were $112 and $111, respectively.

Accounting for derivative instruments:  The Company does not utilize hedge accounting and marks its derivatives, if any, to market through a net change in unrealized appreciation (depreciation) on derivative instruments in the Consolidated Statements of Operations.

Recent accounting pronouncements:  In November 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash Restricted Cash, a consensus of the FASB Emerging Issues Task Force, which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This guidance is effective for annual reporting periods, and the interim periods within those periods, beginning after December 15, 2017. The Company adopted the ASU, which did not have a material impact on the Company’s consolidated financial statements. Prior to adoption, the Company presented the change in restricted cash and cash equivalents separately as a cash flow from investing activity. Upon adoption, the Company included the restricted cash and cash equivalents in each of the balances of the cash, cash equivalents and restricted cash and cash equivalents at the beginning of and end of periods and included the change in restricted cash and cash equivalents as part of the net change in cash, cash equivalents and restricted cash and cash equivalents in the Consolidated Statements of Cash Flows and retrospectively restated the nine months ended June 30, 2017.

Note 3. Related Party Transactions

Investment Advisory Agreement: Under the Investment Advisory Agreement, the Investment Adviser manages the day-to-day operations of, and provides investment advisory services to, GBDC. The Board most recently reapproved the Investment Advisory Agreement in May 2018. The Investment Adviser is a registered investment adviser with the (the SEC). The Investment Adviser receives fees for providing services, consisting of two components, a base management fee and an Incentive Fee (as defined below).

The base management fee is calculated at an annual rate equal to 1.375% of average adjusted gross assets at the end of the two most recently completed calendar quarters (including assets purchased with borrowed funds and securitization-related assets, leverage, unrealized depreciation or appreciation on derivative instruments and cash collateral on deposit with custodian but adjusted to exclude cash and cash equivalents so that investors do not pay the base management fee on such assets) and is payable quarterly in arrears. Additionally, the Investment Adviser voluntarily excludes any assets funded with secured borrowing proceeds from the base management fee calculation. The base management fee is adjusted, based on the actual number of days elapsed relative to the total number of days in such calendar quarter, for any share issuances or repurchases during such calendar quarter. For purposes of the Investment Advisory Agreement, cash equivalents means U.S. government securities and commercial paper instruments maturing within 270 days of purchase (which is different than the GAAP definition, which defines cash equivalents as U.S. government securities and commercial paper instruments maturing within 90 days of purchase). To the extent that the Investment Adviser or any of its affiliates provides investment advisory, collateral management or other similar services to a subsidiary of the Company, the base management fee will be reduced by an amount equal to the product of (1) the total fees paid to the Investment Adviser by such subsidiary for such services and (2) the percentage of such subsidiary’s total equity, including membership interests and any class of notes not exclusively held by one or more third parties, that is owned, directly or indirectly, by the Company.

The Company has structured the calculation of the Incentive Fee to include a fee limitation such that an Incentive Fee for any quarter can only be paid to the Investment Adviser if, after such payment, the cumulative Incentive Fees paid to the Investment Adviser since April 13, 2010, the effective date of the Company’s election to become a BDC, would be less than or equal to 20.0% of the Company’s Cumulative Pre-Incentive Fee Net Income (as defined below).

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

The Company accomplishes this limitation by subjecting each quarterly Incentive Fee payable under the Income and Capital Gain Incentive Fee Calculation (as defined below) to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in any quarter is equal to the difference between (a) 20.0% of Cumulative Pre-Incentive Fee Net Income and (b) cumulative Incentive Fees of any kind paid to the Investment Adviser by GBDC since April 13, 2010. To the extent the Incentive Fee Cap is zero or a negative value in any quarter, no Incentive Fee would be payable in that quarter. If, for any relevant period, the Incentive Fee Cap calculation results in the Company paying less than the amount of the Incentive Fee calculated above, then the difference between the Incentive Fee and the Incentive Fee Cap will not be paid by GBDC and will not be received by the Investment Adviser as an Incentive Fee either at the end of such relevant period or at the end of any future period. “Cumulative Pre-Incentive Fee Net Income” is equal to the sum of (a) Pre-Incentive Fee Net Investment Income (as defined below) for each period since April 13, 2010 and (b) cumulative aggregate realized capital gains, cumulative aggregate realized capital losses, cumulative aggregate unrealized capital depreciation and cumulative aggregate unrealized capital appreciation since April 13, 2010.

“Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies but excluding fees for providing managerial assistance) accrued during the calendar quarter, minus operating expenses for the calendar quarter (including the base management fee, taxes, any expenses payable under the Investment Advisory Agreement and the Administration Agreement, any expenses of securitizations and any interest expense and dividends paid on any 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 market discount, debt instruments with PIK interest, preferred stock with PIK dividends and zero coupon securities, accrued income that the Company has not yet received in cash.

Incentive Fees are calculated and payable quarterly in arrears (or, upon termination of the Investment Advisory Agreement, as of the termination date).

The income and capital gains incentive fee calculation (the “Income and Capital Gain Incentive Fee Calculation”) has two parts, the income component (the “Income Incentive Fee”) and the capital gains component (the “Capital Gain Incentive Fee” and, together with the Income Incentive Fee, the “Incentive Fee”). The Income Incentive Fee is calculated quarterly in arrears based on the Company’s Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter.

For the three and nine months ended June 30, 2018, the Income Incentive Fee incurred was $2,832 and $7,181, respectively. For the three and nine months ended June 30, 2017, the Income Incentive Fee incurred was $1,485 and $4,300, respectively.

Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Because of the structure of the Income Incentive Fee, it is possible that an Incentive Fee may be calculated under this formula with respect to a period in which the Company has incurred a loss. For example, if the Company receives Pre-Incentive Fee Net Investment Income in excess of the hurdle rate (as defined below) for a calendar quarter, the Income Incentive Fee will result in a positive value and an Incentive Fee will be paid even if the Company has incurred a loss in such period due to realized and/or unrealized capital losses unless the payment of such Incentive Fee would cause the Company to pay Incentive Fees on a cumulative basis that exceed the Incentive Fee Cap. Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the value of the Company’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the end of the immediately preceding calendar quarter, is compared to a fixed “hurdle rate” of 2.0% quarterly. If market interest rates rise, the Company may be able to invest funds in debt instruments that provide for a higher return, which would increase Pre-Incentive Fee Net Investment Income and make it easier for the Investment Adviser to surpass the fixed hurdle rate and receive an Incentive Fee based on such net investment income.

The Company’s Pre-Incentive Fee Net Investment Income used to calculate this part of the Incentive Fee is also included in the amount of its total assets (excluding cash and cash equivalents but including assets purchased with borrowed funds and securitization-related assets, unrealized depreciation or appreciation on derivative instruments and cash collateral on deposit with custodian) used to calculate the 1.375% base management fee annual rate.

The Company calculates the Income Incentive Fee with respect to its Pre-Incentive Fee Net Investment Income quarterly, in arrears, as follows:

•	Zero in any calendar quarter in which the Pre-Incentive Fee Net Investment Income does not exceed the hurdle rate;

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

•

100% of the Company’s Pre-Incentive Fee Net Investment Income with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the hurdle rate but is less than 2.5% in any calendar quarter. This portion of the Company’s Pre-Incentive Fee Net Investment Income (which exceeds the hurdle rate but is less than 2.5%) is referred to as the “catch-up” provision. The catch-up is meant to provide the Investment Adviser with 20.0% of the Pre-Incentive Fee Net Investment Income as if a hurdle rate did not apply if the Company’s Pre-Incentive Fee Net Investment Income exceeds 2.5% in any calendar quarter; and

•	20.0% of the amount of the Company’s Pre-Incentive Fee Net Investment Income, if any, that exceeds 2.5% in any calendar quarter.

The Capital Gain Incentive Fee equals (a) 20.0% of the Company’s Capital Gain Incentive Fee Base (as defined below), if any, calculated in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), which commenced with the calendar year ending December 31, 2010, less (b) the aggregate amount of any previously paid Capital Gain Incentive Fees. The Company’s “Capital Gain Incentive Fee Base” equals (1) the sum of (i) realized capital gains, if any, on a cumulative positive basis from the date the Company elected to become a BDC through the end of each calendar year, (ii) all realized capital losses on a cumulative basis and (iii) all unrealized capital depreciation on a cumulative basis less (2) all unamortized deferred debt issuance costs, if and to the extent such costs exceed all unrealized capital appreciation on a cumulative basis.

•	The cumulative aggregate realized capital losses are calculated as the sum of the amounts by which (a) the net sales price of each investment in the Company’s portfolio when sold is less than (b) the accreted or amortized cost basis of such investment.

•	The cumulative aggregate realized capital gains are calculated as the sum of the differences, if positive, between (a) the net sales price of each investment in the Company’s portfolio when sold and (b) the accreted or amortized cost basis of such investment.

•	The aggregate unrealized capital depreciation is calculated as the sum of the differences, if negative, between (a) the valuation of each investment in the Company’s portfolio as of the applicable Capital Gain Incentive Fee calculation date and (b) the accreted or amortized cost basis of such investment.

In accordance with GAAP, the Company also is required to include the aggregate unrealized capital appreciation on investments in the calculation and accrue a capital gain incentive fee on a quarterly basis as if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Advisory Agreement. If the Capital Gain Incentive Fee Base, adjusted as required by GAAP to include unrealized capital appreciation, is positive at the end of a period, then GAAP requires the Company to accrue a capital gain incentive fee equal to 20% of such amount, less the aggregate amount of the actual Capital Gain Incentive Fees paid and capital gain incentive fees accrued under GAAP in all prior periods. If such amount is negative, then there is no accrual for such period. The resulting accrual under GAAP in a given period may result in additional expense if such cumulative amount is greater than in the prior period or a reversal of previously recorded expense if such cumulative amount is less than in the prior period. There can be no assurance that such unrealized capital appreciation will be realized in the future. For the three and nine months ended June 30, 2018, the Company accrued a capital gain incentive fee of $741 and $2,274, respectively, which accruals are included in incentive fee in the Consolidated Statements of Operations. For the three and nine months ended June 30, 2017, the Company accrued a capital gain incentive fee of $588 and $1,974, respectively, which accruals are included in incentive fee in the Consolidated Statements of Operations. As of June 30, 2018 and September 30, 2017, included in management and incentive fees payable on the Consolidated Statements of Financial Condition were $7,975 and $6,896, respectively, for cumulative accruals for capital gain incentive fees under GAAP, including the amounts payable pursuant to the Investment Advisory Agreement described above.

As June 30, 2018 and September 30, 2017 the Capital Gain Incentive Fee payable as calculated under the Investment Advisory Agreement (as described above) was $2,618 and $388, respectively. Any payment due under the terms of the Investment Advisory Agreement is calculated in arrears at the end of each calendar year and the Company paid a $1,196 Capital Gain Incentive Fee calculated in accordance with the Investment Advisory Agreement as of December 31, 2017. The Company did not pay any capital gain incentive fee under the Investment Advisory Agreement for any period ended prior to December 31, 2017.

The sum of the Income Incentive Fee and the Capital Gain Incentive Fee is the “Incentive Fee.”

Administration Agreement:  Under the Administration Agreement, the Administrator furnishes the Company with office facilities and equipment, provides the Company with clerical, bookkeeping and record keeping services at such facilities and provides the

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

Company with other administrative services as the Administrator, subject to review by the Board, determines necessary to conduct the Company’s day-to-day operations. The Company reimburses the Administrator the allocable portion of overhead and other expenses incurred by it in performing its obligations under the Administration Agreement, including rent, fees and expenses associated with performing compliance functions and the Company's allocable portion of the cost of its chief financial officer and chief compliance officer and their respective staffs. The Board reviews such expenses to determine that these expenses, including any allocation of expenses among the Company and other entities for which the Administrator provides similar services, are reasonable and comparable to administrative services charged by unaffiliated third party asset managers. Under the Administration Agreement, the Administrator also provides, on the Company’s behalf, managerial assistance to those portfolio companies to which the Company is required to provide such assistance and will be paid an additional amount based on the cost of the services provided, which amount shall not exceed the amount the Company receives from such portfolio companies.

Included in accounts payable and accrued expenses is $601 and $620 as of June 30, 2018 and September 30, 2017, respectively, for accrued allocated shared services under the Administration Agreement.

Other related party transactions:  The Administrator pays for certain unaffiliated third-party expenses incurred by the Company. Such expenses include postage, printing, office supplies, rating agency fees and professional fees. These expenses are not marked-up and represent the same amount the Company would have paid had the Company paid the expenses directly. These expenses are subsequently reimbursed in cash.

Total expenses reimbursed to the Administrator during the three and nine months ended June 30, 2018 were $410 and $1,730, respectively. Total expenses reimbursed to the Administrator during the three and nine months ended June 30, 2017 were $430 and $1,749, respectively.

As of June 30, 2018 and September 30, 2017, included in accounts payable and accrued expenses were $681 and $799, respectively, for accrued expenses paid on behalf of the Company by the Administrator.

On June 22, 2016, the Company entered into an unsecured revolving credit facility with the Investment Adviser (the "Adviser Revolver"), with a maximum credit limit of $20,000 and expiration date of June 22, 2019. Refer to Note 6 for discussion of the Adviser Revolver.

During the three and nine months ended June 30, 2018, the Company sold $0 and $6,191, respectively, of investments and unfunded commitments to SLF at fair value and recognized $0 and $20, respectively, of net realized gains. During the three and nine months ended June 30, 2017, the Company sold $8,852 and $93,083, respectively, of investments and unfunded commitments to SLF at fair value and recognized $22 and $598, respectively, of net realized gains.

During the three and nine months ended June 30, 2018, SLF incurred an administrative service fee of $119 and $340, respectively, to reimburse the Administrator for expenses pursuant to an administrative and loan services agreement by and between SLF and the Administrator. During the three and nine months ended June 30, 2017, SLF incurred an administrative service fee of $123 and $354, respectively to reimburse the Administrator for expenses pursuant to an administrative and loan services agreement by and between SLF and the Administrator.

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

Note 4. Investments

Investments as of June 30, 2018 and September 30, 2017 consisted of the following:

	As of June 30, 2018												As of September 30, 2017
	Principal				Amortized Cost				Fair Value				Principal				Amortized Cost				Fair Value
Senior secured	$	218,376			$	216,216			$	217,131			$	197,734			$	195,790			$	195,029
One stop	1,447,589				1,430,399				1,435,484				1,348,625				1,331,008				1,334,084
Second lien	9,435				9,330				9,435				9,434				9,306				9,434
Subordinated debt	247				247				247				59				59				59
LLC equity interests in SLF(1)	N/A				95,532				92,579				N/A				97,457				95,015
Equity	N/A				37,490				43,639				N/A				37,619				51,394
Total	$	1,675,647			$	1,789,214			$	1,798,515			$	1,555,852			$	1,671,239			$	1,685,015

(1)	SLF’s proceeds from the LLC equity interests invested in SLF were utilized by SLF to invest in senior secured loans.

The following tables show the portfolio composition by geographic region at amortized cost and fair value as a percentage of total investments in portfolio companies. The geographic composition is determined by the location of the corporate headquarters of the portfolio company, which may not be indicative of the primary source of the portfolio company’s business.

	As of June 30, 2018							As of September 30, 2017
Amortized Cost:
United States
Mid-Atlantic	$	373,774			20.9	%		$	341,612			20.4	%
Midwest	351,112				19.6			405,901				24.3
West	320,378				17.9			266,546				16.0
Southeast	391,240				21.9			354,663				21.2
Southwest	181,293				10.1			153,520				9.2
Northeast	156,371				8.7			134,164				8.0
Canada	15,046				0.9			14,833				0.9
Total	$	1,789,214			100.0	%		$	1,671,239			100.0	%
Fair Value:
United States
Mid-Atlantic	$	368,300			20.5	%		$	339,358			20.1	%
Midwest	351,606				19.6			406,694				24.1
West	322,135				17.9			270,185				16.0
Southeast	396,410				22.0			356,846				21.2
Southwest	184,053				10.2			152,312				9.1
Northeast	160,615				8.9			144,468				8.6
Canada	15,396				0.9			15,152				0.9
Total	$	1,798,515			100.0	%		$	1,685,015			100.0	%

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

The industry compositions of the portfolio at amortized cost and fair value as of June 30, 2018 and September 30, 2017 were as follows:

	As of June 30, 2018							As of September 30, 2017
Amortized Cost:
Aerospace and Defense	$	51,363			2.9	%		$	59,296			3.6	%
Automobile	18,809				1.0			16,507				1.0
Banking	—				—			17,144				1.0
Beverage, Food and Tobacco	85,564				4.8			105,466				6.3
Broadcasting and Entertainment	1,447				0.1			1,458				0.1
Buildings and Real Estate	64,926				3.6			66,317				4.0
Chemicals, Plastics and Rubber	3,483				0.2			2,407				0.1
Diversified/Conglomerate Manufacturing	90,905				5.1			98,121				5.9
Diversified/Conglomerate Service	420,076				23.5			287,765				17.2
Ecological	18,246				1.0			18,081				1.1
Electronics	116,342				6.5			84,454				5.1
Grocery	15,837				0.9			15,876				0.9
Healthcare, Education and Childcare	373,375				20.9			336,386				20.1
Home and Office Furnishings, Housewares, and Durable Consumer	15,854				0.9			16,906				1.0
Hotels, Motels, Inns, and Gaming	15,408				0.9			9,889				0.6
Insurance	43,616				2.4			34,225				2.1
Investment Funds and Vehicles	95,532				5.3			97,457				5.8
Leisure, Amusement, Motion Pictures, Entertainment	83,451				4.7			76,717				4.6
Mining, Steel, Iron and Non-Precious Metals	4,519				0.2			4,806				0.3
Oil and Gas	14,319				0.8			6,362				0.4
Personal and Non Durable Consumer Products (Mfg. Only)	68,395				3.8			68,871				4.1
Personal, Food and Miscellaneous Services	62,634				3.5			73,718				4.4
Printing and Publishing	855				0.0	*		10,567				0.6
Retail Stores	112,223				6.3			135,892				8.1
Telecommunications	6,320				0.4			8,504				0.5
Textiles and Leather	2,199				0.1			2,209				0.1
Utilities	3,516				0.2			15,838				1.0
Total	$	1,789,214			100.0	%		$	1,671,239			100.0	%

* Represents an amount less than 0.1%.

50

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

	As of June 30, 2018							As of September 30, 2017
Fair Value:
Aerospace and Defense	$	48,215			2.7	%		$	56,458			3.4	%
Automobile	18,903				1.1			16,677				1.0
Banking	—				—			17,182				1.0
Beverage, Food and Tobacco	86,480				4.8			107,582				6.4
Broadcasting and Entertainment	1,458				0.1			1,469				0.1
Buildings and Real Estate	67,410				3.7			67,376				4.0
Chemicals, Plastics and Rubber	3,487				0.2			2,460				0.1
Diversified/Conglomerate Manufacturing	90,534				5.0			98,664				5.9
Diversified/Conglomerate Service	425,702				23.7			293,632				17.4
Ecological	18,548				1.0			18,536				1.1
Electronics	117,189				6.5			85,381				5.1
Grocery	16,089				0.9			16,603				1.0
Healthcare, Education and Childcare	371,119				20.6			335,880				19.9
Home and Office Furnishings, Housewares, and Durable Consumer	15,527				0.9			14,954				0.9
Hotels, Motels, Inns, and Gaming	15,396				0.9			10,057				0.6
Insurance	44,763				2.5			35,082				2.1
Investment Funds and Vehicles	92,579				5.1			95,015				5.6
Leisure, Amusement, Motion Pictures, Entertainment	84,567				4.7			76,954				4.5
Mining, Steel, Iron and Non-Precious Metals	3,988				0.2			3,707				0.2
Oil and Gas	14,408				0.8			6,351				0.4
Personal and Non Durable Consumer Products (Mfg. Only)	69,864				3.9			70,192				4.2
Personal, Food and Miscellaneous Services	65,890				3.7			72,517				4.3
Printing and Publishing	819				0.0	*		10,805				0.6
Retail Stores	113,478				6.3			144,336				8.6
Telecommunications	6,409				0.4			8,598				0.5
Textiles and Leather	2,140				0.1			2,247				0.1
Utilities	3,553				0.2			16,300				1.0
Total	$	1,798,515			100.0	%		$	1,685,015			100.0	%

* Represents an amount less than 0.1%.

Senior Loan Fund LLC:

The Company co-invests with RGA in senior secured loans through SLF, an unconsolidated Delaware LLC. SLF is capitalized as transactions are completed and all portfolio and investment decisions in respect of SLF must be approved by the SLF investment committee consisting of two representatives of each of the Company and RGA (with unanimous approval required from (i) one representative of each of the Company and RGA or (ii) both representatives of each of the Company and RGA). SLF may cease making new investments upon notification of either member but operations will continue until all investments have been sold or paid-off in the normal course of business. Investments held by SLF are measured at fair value using the same valuation methodologies as described in Note 5.

As of June 30, 2018, SLF was capitalized by LLC equity interest subscriptions from its members. On December 14, 2016, the SLF investment committee approved the recapitalization of the commitments of SLF’s members. On December 30, 2016, SLF’s members entered into additional LLC equity interest subscriptions totaling $160,000, SLF issued capital calls totaling $89,930 to the Company and RGA and the subordinated notes previously issued by SLF were redeemed and terminated.

As of June 30, 2018 and September 30, 2017, the Company and RGA owned 87.5% and 12.5%, respectively, of the LLC equity interests of SLF. SLF’s profits and losses are allocated to the Company and RGA in accordance with their respective ownership interests.

SLF has entered into a senior secured revolving credit facility (as amended, the “SLF Credit Facility”) with Wells Fargo Bank, N.A., through its wholly-owned subsidiary Senior Loan Fund II LLC (“SLF II”), which as of June 30, 2018 allowed SLF II to borrow up to $200,000 at any one time outstanding, subject to leverage and borrowing base restrictions.

51

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

As of June 30, 2018 and September 30, 2017, SLF had the following commitments from its members (in the aggregate):

	As of June 30, 2018								As of September 30, 2017
	Committed				Funded(1)				Committed				Funded(1)
LLC equity commitments	$	200,000			$	109,180			$	200,000			$	111,380
Total	$	200,000			$	109,180			$	200,000			$	111,380

(1)	Funded LLC equity commitments are presented net of return of capital distributions subject to recall.

As of June 30, 2018 and September 30, 2017, SLF had total assets at fair value of $229,785 and $306,235, respectively. As of June 30, 2018, SLF had no portfolio company investments on non-accrual status. As of September 30, 2017, SLF had one portfolio company investment on non-accrual status with a fair value of $329. The portfolio companies in SLF are in industries and geographies similar to those in which the Company may invest directly. Additionally, as of June 30, 2018 and September 30, 2017, SLF had commitments to fund various undrawn revolvers and delayed draw investments to its portfolio companies totaling $9,644 and $13,318, respectively.

Below is a summary of SLF’s portfolio, followed by a listing of the individual investments in SLF’s portfolio as of June 30, 2018 and September 30, 2017:

	As of				As of
	June 30, 2018				September 30, 2017
Senior secured loans(1)	$	228,891			$	301,583
Weighted average current interest rate on senior secured loans(2)	7.6		%		6.4		%
Number of borrowers in SLF	38				50
Largest portfolio company investments(1)	$	13,750			$	13,820
Total of five largest portfolio company investments(1)	$	59,619			$	61,187

(1)	At principal amount.

(2)	Computed as the (a) annual stated interest rate on accruing senior secured loans divided by (b) total senior secured loans at principal amount.

52

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

SLF Investment Portfolio as of June 30, 2018
Portfolio Company		Business Description		Security Type		Maturity Date		Current Interest Rate(1)				Principal ($) / Shares(2)				Fair Value(3)
1A Smart Start LLC		Home and Office Furnishings, Housewares, and Durable Consumer		Senior loan		02/2022		6.8		%		$	2,079			$	2,086
1A Smart Start LLC (4)		Home and Office Furnishings, Housewares, and Durable Consumer		Senior loan		02/2022		6.6				924				926
Advanced Pain Management Holdings, Inc.,		Healthcare, Education and Childcare		Senior loan		08/2018		7.1				6,561				4,921
Advanced Pain Management Holdings, Inc.,		Healthcare, Education and Childcare		Senior loan		08/2018		7.1				449				337
Boot Barn, Inc.		Retail Stores		Senior loan		06/2021		6.8				9,533				9,533
Brandmuscle, Inc.		Printing and Publishing		Senior loan		12/2021		7.1				4,678				4,675
Captain D's, LLC (4)		Personal, Food and Miscellaneous Services		Senior loan		12/2023		6.6				2,505				2,505
Captain D's, LLC (4)		Personal, Food and Miscellaneous Services		Senior loan		12/2023		6.6				4				4
CLP Healthcare Services, Inc.		Healthcare, Education and Childcare		Senior loan		12/2020		7.6				8,524				8,354
CLP Healthcare Services, Inc.		Healthcare, Education and Childcare		Senior loan		12/2020		7.6				4,295				4,209
Community Veterinary Partners, LLC		Personal, Food and Miscellaneous Services		Senior loan		10/2021		7.6				2,423				2,423
Community Veterinary Partners, LLC		Personal, Food and Miscellaneous Services		Senior loan		10/2021		7.6				1,218				1,218
Community Veterinary Partners, LLC		Personal, Food and Miscellaneous Services		Senior loan		10/2021		7.6				58				58
Community Veterinary Partners, LLC		Personal, Food and Miscellaneous Services		Senior loan		10/2021		7.6				40				40
Curo Health Services LLC (4)		Healthcare, Education and Childcare		Senior loan		02/2022		8.0				5,805				5,820
DISA Holdings Acquisition Subsidiary Corp. (4)		Diversified/Conglomerate Service		Senior loan		06/2022		6.7				4,821				4,797
DISA Holdings Acquisition Subsidiary Corp. (4)(5)		Diversified/Conglomerate Service		Senior loan		06/2022		N/A		(6)		—				(5		)
Encore GC Acquisition, LLC		Healthcare, Education and Childcare		Senior loan		01/2020		7.7				4,540				4,540
Flexan, LLC		Chemicals, Plastics and Rubber		Senior loan		02/2020		8.1				5,982				5,982
Flexan, LLC		Chemicals, Plastics and Rubber		Senior loan		02/2020		8.1				1,661				1,661
Flexan, LLC (4)		Chemicals, Plastics and Rubber		Senior loan		02/2020		9.5				304				304
Gamma Technologies, LLC (4)		Electronics		Senior loan		06/2024		7.6				10,211				10,122
III US Holdings, LLC		Diversified/Conglomerate Service		Senior loan		09/2022		8.8				4,927				4,927
Jensen Hughes, Inc.		Buildings and Real Estate		Senior loan		03/2024		6.6				2,293				2,293
Jensen Hughes, Inc.		Buildings and Real Estate		Senior loan		03/2024		6.6				119				119
Jensen Hughes, Inc.		Buildings and Real Estate		Senior loan		03/2024		6.6				64				64
Joerns Healthcare, LLC (4)		Healthcare, Education and Childcare		Senior loan		05/2020		8.3				8,745				8,075
Paradigm DKD Group, LLC		Buildings and Real Estate		Senior loan		11/2018		8.3				1,967				1,475
Paradigm DKD Group, LLC		Buildings and Real Estate		Senior loan		11/2018		8.3				792				644
Pasternack Enterprises, Inc. and Fairview Microwave, Inc		Diversified/Conglomerate Manufacturing		Senior loan		05/2022		9.0				5,331				5,331
Payless ShoeSource, Inc.		Retail Stores		Senior loan		08/2022		11.3				764				660
Polk Acquisition Corp.		Automobile		Senior loan		06/2022		7.1				4,525				4,434
Polk Acquisition Corp.		Automobile		Senior loan		06/2022		7.1				53				52
Polk Acquisition Corp.		Automobile		Senior loan		06/2022		7.3				50				48
Premise Health Holding Corp. (4)		Healthcare, Education and Childcare		Senior loan		06/2020		6.8				11,682				11,682
Pyramid Healthcare, Inc.		Healthcare, Education and Childcare		Senior loan		08/2019		8.9				10,178				10,178
Pyramid Healthcare, Inc.		Healthcare, Education and Childcare		Senior loan		08/2019		8.6				206				206
Pyramid Healthcare, Inc.		Healthcare, Education and Childcare		Senior loan		08/2019		8.9				149				149
Pyramid Healthcare, Inc.		Healthcare, Education and Childcare		Senior loan		08/2019		8.9				45				45
R.G. Barry Corporation		Personal, Food and Miscellaneous Services		Senior loan		09/2019		7.1				4,834				4,834
Radiology Partners, Inc. (4)		Healthcare, Education and Childcare		Senior loan		12/2023		9.8				8,854				8,854
Radiology Partners, Inc. (4)		Healthcare, Education and Childcare		Senior loan		12/2023		9.8				163				163
Reliant Pro ReHab, LLC (4)		Healthcare, Education and Childcare		Senior loan		12/2018		12.1				3,164				3,164

53

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

SLF Investment Portfolio as of June 30, 2018 - (continued)
Portfolio Company		Business Description		Security Type		Maturity Date		Current Interest Rate(1)				Principal ($) / Shares(2)				Fair Value(3)
RSC Acquisition, Inc. (4)		Insurance		Senior loan		11/2022		6.8		%		$	3,844			$	3,844
RSC Acquisition, Inc. (4)		Insurance		Senior loan		11/2021		6.8				33				33
Rubio's Restaurants, Inc. (4)		Beverage, Food and Tobacco		Senior loan		10/2019		7.6				4,954				4,954
Rug Doctor LLC		Personal and Non Durable Consumer Products (Mfg. Only)		Senior loan		04/2019		7.6				5,195				5,195
Sage Dental Management, LLC		Healthcare, Education and Childcare		Senior loan		10/2019		8.1				4,746				4,271
Sage Dental Management, LLC		Healthcare, Education and Childcare		Senior loan		10/2019		8.1				70				63
Sage Dental Management, LLC		Healthcare, Education and Childcare		Senior loan		10/2019		8.1				70				63
Sage Dental Management, LLC		Healthcare, Education and Childcare		Senior loan		10/2019		8.1				50				44
Saldon Holdings, Inc. (4)		Diversified/Conglomerate Service		Senior loan		09/2022		6.6				2,435				2,435
SEI, Inc. (4)		Electronics		Senior loan		07/2023		7.3				13,750				13,750
Self Esteem Brands, LLC (4)		Leisure, Amusement, Motion Pictures, Entertainment		Senior loan		02/2020		6.8				10,342				10,342
Severin Acquisition, LLC		Diversified/Conglomerate Service		Senior loan		07/2021		7.1				5,251				5,231
Severin Acquisition, LLC (4)		Diversified/Conglomerate Service		Senior loan		07/2021		7.2				4,795				4,795
Severin Acquisition, LLC		Diversified/Conglomerate Service		Senior loan		07/2021		7.4				663				665
Severin Acquisition, LLC		Diversified/Conglomerate Service		Senior loan		07/2021		7.1				81				80
Teasdale Quality Foods, Inc.		Grocery		Senior loan		10/2020		7.1				4,518				4,518
Teasdale Quality Foods, Inc.		Grocery		Senior loan		10/2020		6.8				3,541				3,541
Teasdale Quality Foods, Inc.		Grocery		Senior loan		10/2020		6.8				659				659
Teasdale Quality Foods, Inc.		Grocery		Senior loan		10/2020		7.1				493				493
Teasdale Quality Foods, Inc.		Grocery		Senior loan		10/2020		6.9				243				243
Upstream Intermediate, LLC		Healthcare, Education and Childcare		Senior loan		01/2024		6.8				2,838				2,838
W3 Co.		Oil and Gas		Senior loan		03/2022		8.3				1,257				1,252
WHCG Management, LLC (4)		Healthcare, Education and Childcare		Senior loan		03/2023		7.3				7,920				7,920
WIRB-Copernicus Group, Inc. (4)		Healthcare, Education and Childcare		Senior loan		08/2022		6.3				5,623				5,623
Total senior loan investments												$	228,891			$	224,759
Payless ShoeSource, Inc. (7)(8)		Retail Stores		LLC interest		N/A		N/A				35				$	139
W3 Co. (7)(8)		Oil and Gas		LLC units		N/A		N/A				3				1,138
Total equity investments																$	1,277
Total investments												$	228,891			$	226,036

(1)	Represents the weighted average annual current interest rate as of June 30, 2018. All interest rates are payable in cash.

(2)	The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.

(3)	Represents the fair value in accordance with ASC Topic 820. The determination of such fair value is not included in the Board's valuation process described elsewhere herein.

(4)	The Company also holds a portion of the first lien senior secured loan in this portfolio company.

(5)	The negative fair value is the result of the unfunded commitment being valued below par.

(6)	The entire commitment was unfunded as of June 30, 2018. As such, no interest is being earned on this investment. The investment may be subject to an unused facility fee.

(7)	Equity investment received as a result of the portfolio company's debt restructuring.

(8)	Non-income producing.

54

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

SLF Investment Portfolio as of September 30, 2017
Portfolio Company		Business Description		Security Type		Maturity Date		Current Interest Rate(1)				Principal ($) / Shares (2)				Fair Value(3)
1A Smart Start LLC		Home and Office Furnishings, Housewares, and Durable Consumer		Senior loan		02/2022		6.1		%		$	2,094			$	2,105
1A Smart Start LLC		Home and Office Furnishings, Housewares, and Durable Consumer		Senior loan		02/2022		5.8				928				928
Advanced Pain Management Holdings, Inc.		Healthcare, Education and Childcare		Senior loan		02/2018		6.3				6,805				5,784
Advanced Pain Management Holdings, Inc.		Healthcare, Education and Childcare		Senior loan		02/2018		6.3				466				396
Argon Medical Devices, Inc.		Healthcare, Education and Childcare		Senior loan		12/2021		6.0				3,184				3,184
Arise Virtual Solutions, Inc. (4)		Telecommunications		Senior loan		12/2018		7.3				9,856				9,856
Boot Barn, Inc.		Retail Stores		Senior loan		06/2021		5.8				10,073				10,073
Brandmuscle, Inc.		Printing and Publishing		Senior loan		12/2021		6.1				4,851				4,845
CLP Healthcare Services, Inc.		Healthcare, Education and Childcare		Senior loan		12/2020		6.6				8,590				8,418
CLP Healthcare Services, Inc.		Healthcare, Education and Childcare		Senior loan		12/2020		6.6				4,328				4,242
Community Veterinary Partners, LLC		Personal, Food and Miscellaneous Services		Senior loan		10/2021		6.8				2,442				2,442
Community Veterinary Partners, LLC		Personal, Food and Miscellaneous Services		Senior loan		10/2021		6.8				1,227				1,227
Community Veterinary Partners, LLC		Personal, Food and Miscellaneous Services		Senior loan		10/2021		6.8				59				59
Community Veterinary Partners, LLC		Personal, Food and Miscellaneous Services		Senior loan		10/2021		6.8				41				41
Curo Health Services LLC (4)		Healthcare, Education and Childcare		Senior loan		02/2022		5.3				5,850				5,867
DISA Holdings Acquisition Subsidiary Corp.		Diversified/Conglomerate Service		Senior loan		12/2020		5.5				4,401				4,401
DISA Holdings Acquisition Subsidiary Corp.		Diversified/Conglomerate Service		Senior loan		12/2020		5.6				428				428
EAG, INC.		Diversified/Conglomerate Service		Senior loan		07/2018		5.5				1,964				1,964
Encore GC Acquisition, LLC		Healthcare, Education and Childcare		Senior loan		01/2020		6.8				4,725				4,725
Flexan, LLC		Chemicals, Plastics and Rubber		Senior loan		02/2020		7.1				6,029				6,029
Flexan, LLC		Chemicals, Plastics and Rubber		Senior loan		02/2020		7.1				1,686				1,686
Flexan, LLC (4)		Chemicals, Plastics and Rubber		Senior loan		02/2020		8.8				47				47
Gamma Technologies, LLC (4)		Electronics		Senior loan		06/2021		6.0				10,264				10,264
Harvey Tool Company, LLC		Diversified/Conglomerate Manufacturing		Senior loan		03/2020		6.1				3,064				3,064
III US Holdings, LLC		Diversified/Conglomerate Service		Senior loan		09/2022		7.9				5,044				5,044
Jensen Hughes, Inc.		Buildings and Real Estate		Senior loan		12/2021		6.3				2,293				2,293
Jensen Hughes, Inc.		Buildings and Real Estate		Senior loan		12/2021		6.4				102				102
Jensen Hughes, Inc.		Buildings and Real Estate		Senior loan		12/2021		6.4				64				64
Joerns Healthcare, LLC (4)		Healthcare, Education and Childcare		Senior loan		05/2020		7.8				8,745				8,202
Julio & Sons Company		Beverage, Food and Tobacco		Senior loan		12/2018		6.7				6,762				6,762
Julio & Sons Company		Beverage, Food and Tobacco		Senior loan		12/2018		6.7				2,226				2,226
Julio & Sons Company		Beverage, Food and Tobacco		Senior loan		12/2018		6.7				822				822
Loar Group Inc.		Aerospace and Defense		Senior loan		01/2022		6.0				2,164				2,164
Loar Group Inc.		Aerospace and Defense		Senior loan		01/2022		6.0				1,492				1,492
Paradigm DKD Group, LLC		Buildings and Real Estate		Senior loan		11/2018		6.2				1,977				1,977
Paradigm DKD Group, LLC		Buildings and Real Estate		Senior loan		11/2018		6.2				596				596
Park Place Technologies LLC (4)		Electronics		Senior loan		06/2022		6.3				5,341				5,287
Pasternack Enterprises, Inc. and Fairview Microwave, Inc.		Diversified/Conglomerate Manufacturing		Senior loan		05/2022		6.2				5,372				5,372
Payless ShoeSource, Inc.		Retail Stores		Senior loan		08/2022		10.3				768				757
Polk Acquisition Corp.		Automobile		Senior loan		06/2022		6.2				4,560				4,469
Polk Acquisition Corp.		Automobile		Senior loan		06/2022		6.7				83				81
Polk Acquisition Corp.		Automobile		Senior loan		06/2022		6.2				53				52
PowerPlan Holdings, Inc. (4)		Utilities		Senior loan		02/2022		6.5				11,365				11,365

55

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

SLF Investment Portfolio as of September 30, 2017 - (continued)
Portfolio Company		Business Description		Security Type		Maturity Date		Current Interest Rate(1)				Principal ($) / Shares (2)				Fair Value(3)
Premise Health Holding Corp. (4)		Healthcare, Education and Childcare		Senior loan		06/2020		5.8		%		$	11,772			$	11,772
Pyramid Healthcare, Inc.		Healthcare, Education and Childcare		Senior loan		08/2019		7.7				9,738				9,738
Pyramid Healthcare, Inc.		Healthcare, Education and Childcare		Senior loan		08/2019		7.9				597				597
R.G. Barry Corporation		Personal, Food and Miscellaneous Services		Senior loan		09/2019		6.2				5,217				5,217
Radiology Partners, Inc. (4)		Healthcare, Education and Childcare		Senior loan		09/2020		7.1				7,793				7,793
Radiology Partners, Inc. (4)		Healthcare, Education and Childcare		Senior loan		09/2020		7.1				595				595
Radiology Partners, Inc. (4)		Healthcare, Education and Childcare		Senior loan		09/2020		7.1				505				505
Reliant Pro ReHab, LLC (4)		Healthcare, Education and Childcare		Senior loan		12/2017		6.3				3,240				3,240
RSC Acquisition, Inc. (4)		Insurance		Senior loan		11/2022		6.6				3,864				3,864
RSC Acquisition, Inc.		Insurance		Senior loan		11/2020		6.1				15				15
Rubio's Restaurants, Inc. (4)		Beverage, Food and Tobacco		Senior loan		11/2018		6.1				4,992				4,992
Rug Doctor LLC		Personal and Non Durable Consumer Products (Mfg. Only)		Senior loan		06/2018		6.6				5,792				5,792
Sage Dental Management, LLC		Healthcare, Education and Childcare		Senior loan		10/2019		7.0				4,782				4,686
Sage Dental Management, LLC		Healthcare, Education and Childcare		Senior loan		10/2019		7.8				70				69
Sage Dental Management, LLC		Healthcare, Education and Childcare		Senior loan		10/2019		7.0				50				49
Sage Dental Management, LLC		Healthcare, Education and Childcare		Senior loan		10/2019		8.8				34				33
Saldon Holdings, Inc. (4)		Diversified/Conglomerate Service		Senior loan		09/2022		5.8				2,521				2,490
Sarnova HC, LLC		Healthcare, Education and Childcare		Senior loan		01/2022		6.0				3,684				3,684
SEI, Inc.		Electronics		Senior loan		07/2021		6.0				13,820				13,820
Self Esteem Brands, LLC (4)		Leisure, Amusement, Motion Pictures, Entertainment		Senior loan		02/2020		6.0				11,313				11,313
Severin Acquisition, LLC (4)		Diversified/Conglomerate Service		Senior loan		07/2021		6.1				4,832				4,830
Severin Acquisition, LLC		Diversified/Conglomerate Service		Senior loan		07/2021		6.0				5,290				5,265
Severin Acquisition, LLC		Diversified/Conglomerate Service		Senior loan		07/2021		6.2				668				670
Severin Acquisition, LLC (5)		Diversified/Conglomerate Service		Senior loan		07/2021		N/A		(6)		—				(1		)
Smashburger Finance LLC		Beverage, Food and Tobacco		Senior loan		05/2018		6.8				867				754
Smashburger Finance LLC		Beverage, Food and Tobacco		Senior loan		05/2018		6.8				68				60
Smashburger Finance LLC		Beverage, Food and Tobacco		Senior loan		05/2018		6.8				68				59
Smashburger Finance LLC		Beverage, Food and Tobacco		Senior loan		05/2018		6.8				68				59
Smashburger Finance LLC		Beverage, Food and Tobacco		Senior loan		05/2018		6.8				68				59
Smashburger Finance LLC (5)		Beverage, Food and Tobacco		Senior loan		05/2018		N/A		(6)		—				(15		)
Stomatcare DSO, LLC (7)		Healthcare, Education and Childcare		Senior loan		05/2022		6.2% PIK				625				329
Tate's Bake Shop, Inc. (4)		Beverage, Food and Tobacco		Senior loan		08/2019		6.3				2,926				2,926
Teasdale Quality Foods, Inc.		Grocery		Senior loan		10/2020		5.5				4,553				4,553
Teasdale Quality Foods, Inc.		Grocery		Senior loan		10/2020		6.1				3,567				3,567
Teasdale Quality Foods, Inc.		Grocery		Senior loan		10/2020		6.1				687				687
Teasdale Quality Foods, Inc.		Grocery		Senior loan		10/2020		6.0				514				514
Teasdale Quality Foods, Inc.		Grocery		Senior loan		10/2020		6.1				252				252
Transaction Data Systems, Inc.		Diversified/Conglomerate Service		Senior loan		06/2021		6.6				7,393				7,393
Transaction Data Systems, Inc.		Diversified/Conglomerate Service		Senior loan		06/2020		5.8				22				21
W3 Co.		Oil and Gas		Senior loan		03/2022		7.2				1,266				1,269
WHCG Management, LLC (4)		Healthcare, Education and Childcare		Senior loan		03/2023		6.1				7,980				7,980
WIRB-Copernicus Group, Inc.		Healthcare, Education and Childcare		Senior loan		08/2022		6.3				5,666				5,666
Young Innovations, Inc. (4)		Healthcare, Education and Childcare		Senior loan		01/2019		6.3				10,369				10,369
Young Innovations, Inc. (4)		Healthcare, Education and Childcare		Senior loan		01/2019		6.3				209				209
Total senior loan investments												$	301,583			$	298,941

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

SLF Investment Portfolio as of September 30, 2017 - (continued)

Portfolio Company

Business Description

Security Type

Maturity Date

Current Interest Rate(1)

Principal ($) / Shares (2)

Fair Value(3)

Payless ShoeSource, Inc. (8)(9)

Retail Stores

LLC interest

N/A

N/A

35

$

843

W3 Co. (8)(9)

Oil and Gas

LLC units

N/A

N/A

3

1,146

Total equity investments

$

1,989

Total investments

$

301,583

$

300,930

(1)	Represents the weighted average annual current interest rate as of September 30, 2017. All interest rates are payable in cash.

(2)	The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.

(3)	Represents the fair value in accordance with ASC Topic 820. The determination of such fair value is not included in the Board's valuation process described elsewhere herein.

(4)	The Company also holds a portion of the first lien senior secured loan in this portfolio company.

(5)	The negative fair value is the result of the unfunded commitment being valued below par.

(6)	The entire commitment was unfunded as of September 30, 2017. As such, no interest is being earned on this investment.

(7)	Loan was on non-accrual status as of September 30, 2017, meaning that SLF has ceased recognizing interest income on the loan.

(8)	Equity investment received as a result of the portfolio company's debt restructuring.

(9)	Non-income producing.

As of June 30, 2018, the Company has committed to fund $175,000 of LLC equity interest subscriptions to SLF. As of June 30, 2018 and September 30, 2017, $95,533 and $97,457, respectively, of the Company’s LLC equity interest subscriptions to SLF had been called and contributed, net of return of capital distributions subject to recall. For the three and nine months ended June 30, 2018, the Company received $2,050 and $5,868, respectively, in dividend income from the SLF LLC equity interest. For the three and nine months ended June 30, 2017, the Company received $891 and $4,054, respectively, in dividend income from the SLF LLC equity interest.

The subordinated notes, previously issued by SLF to the Company and RGA were redeemed and terminated on December 30, 2016. For the three and nine months ended June 30, 2017, the Company earned interest income on the subordinated notes of $0 and $1,639, respectively.

See below for certain summarized financial information for SLF as of June 30, 2018 and September 30, 2017 and for the three and nine months ended June 30, 2018 and 2017:

	As of				As of
	June 30, 2018				September 30, 2017
Selected Balance Sheet Information:
Investments, at fair value	$	226,036			$	300,930
Cash and other assets	3,749				5,305
Total assets	$	229,785			$	306,235
Senior credit facility	$	123,500			$	197,700
Unamortized debt issuance costs	(84		)		(712		)
Other liabilities	565				658
Total liabilities	123,981				197,646
Members’ equity	105,804				108,589
Total liabilities and members' equity	$	229,785			$	306,235

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

	Three months ended June 30,								Nine months ended June 30,
	2018				2017				2018				2017
Selected Statement of Operations Information:
Interest income	$	4,692			$	5,645			$	14,444			$	16,311
Fee income	—				5				25				5
Total investment income	4,692				5,650				14,469				16,316
Interest and other debt financing expense	1,662				2,129				5,506				8,148
Administrative service fee	119				123				340				354
Other expenses	30				34				87				98
Total expenses	1,811				2,286				5,933				8,600
Net investment income	2,881				3,364				8,536				7,716
Net realized gain (loss) on investments	—				29				—				3
Net change in unrealized appreciation (depreciation) on    investments	(1,196		)		(2,262		)		(2,414		)		(2,891		)
Net increase (decrease) in members' equity	$	1,685			$	1,131			$	6,122			$	4,828

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

Note 5. Fair Value Measurements

The Company follows ASC Topic 820 for measuring fair value. Fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the assets or liabilities or market and the assets’ or liabilities’ complexity. The Company’s fair value analysis includes an analysis of the value of any unfunded loan commitments. Assets and liabilities are categorized for disclosure purposes based upon the level of judgment associated with the inputs used to measure their value. The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the asset or liability as of the measurement date. The three levels are defined as follows:

Level 1:     Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

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

Level 3: Inputs include significant unobservable inputs for the assets or liabilities and include situations where there is little, if any, market activity for the assets or liabilities. The inputs into the determination of fair value are based upon the best information available and may require significant management judgment or estimation.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset’s or a liability’s categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Company assesses the levels of assets and liabilities at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfers. There were no transfers among Level 1, 2 and 3 of the fair value hierarchy for assets and liabilities during the three and nine months ended June 30, 2018 and 2017. The following section describes the valuation techniques used by the Company to measure different assets and liabilities at fair value and includes the level within the fair value hierarchy in which the assets and liabilities are categorized.

Investments

Level 1 investments are valued using quoted market prices. Level 2 investments are valued using market consensus prices that are corroborated by observable market data and quoted market prices for similar assets and liabilities. Level 3 investments are valued at fair value as determined in good faith by the Board, based on input of management, the audit committee and independent valuation firms that have been engaged at the direction of the Board to assist in the valuation of each portfolio investment without a readily available market quotation at least once during a trailing twelve-month period under a valuation policy and a consistently applied valuation process. This valuation process is conducted at the end of each fiscal quarter, with approximately 25% (based on the number of portfolio companies) of the Company’s valuations of debt and equity investments without readily available market quotations subject to review by an independent valuation firm. All investments as of June 30, 2018 and September 30, 2017, with the exception of money market funds included in cash, cash equivalents and restricted cash and cash equivalents (Level 1 investments) and investments measured at fair value using the NAV, were valued using Level 3 inputs.

When determining fair value of Level 3 debt and equity investments, the Company may take into account the following factors, where relevant: the enterprise value of a portfolio company, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons to publicly traded securities, and changes in the interest rate environment and the credit markets generally that may affect the price at which similar investments may be made and other relevant factors. The primary method for determining enterprise value uses a multiple analysis whereby appropriate multiples are applied to the portfolio company’s net income before net interest expense, income tax expense, depreciation and amortization (“EBITDA”). A portfolio company’s EBITDA may include pro forma adjustments for items such as acquisitions, divestitures, or expense reductions. The enterprise value analysis is performed to determine the value of equity investments and to determine if debt investments are credit impaired. If debt investments are credit impaired, the Company will use the enterprise value analysis or a liquidation basis analysis to determine fair value. For debt investments that are not determined to be credit impaired, the Company uses a market interest rate yield analysis to determine fair value.

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

In addition, for certain debt investments, the Company may base its valuation on indicative bid and ask prices provided by an independent third party pricing service. Bid prices reflect the highest price that the Company and others may be willing to pay. Ask prices represent the lowest price that the Company and others may be willing to accept. The Company generally uses the midpoint of the bid/ask range as its best estimate of fair value of such investment.

Due to the inherent uncertainty of determining the fair value of Level 3 investments that do not have a readily available market value, the fair value of the 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 may ultimately be received or settled. Further, such investments are generally subject to legal and other restrictions or otherwise are less liquid than publicly traded instruments. If the Company were required to liquidate a portfolio investment in a forced or liquidation sale, the Company may realize significantly less than the value at which such investment had previously been recorded. The Company’s investments are subject to market risk. Market risk is the potential for changes in the value due to market changes. Market risk is directly impacted by the volatility and liquidity in the markets in which the investments are traded.

Secured Borrowings

The Company has elected the fair value option under ASC Topic 825 - Financial Instruments, relating to accounting for debt obligations at their fair value for its secured borrowings which arose due to partial loan sales which did not meet the criteria for sale treatment under ASC Topic 860. The Company reports changes in the fair value of its secured borrowings as a component of the net change in unrealized (appreciation) depreciation on secured borrowings in the Consolidated Statements of Operations. The net gain or loss reflects the difference between the fair value and the principal amount due on maturity.

As of June 30, 2018 and September 30, 2017, there were no secured borrowings outstanding. As of June 30, 2017 all secured borrowings were valued using Level 3 inputs under the fair value hierarchy, and the Company’s approach to determining fair value of Level 3 secured borrowings is consistent with its approach to determining fair value of the Level 3 investments that are associated with these secured borrowings as previously described.

The following tables present fair value measurements of the Company’s investments and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value as of June 30, 2018 and September 30, 2017:

As of June 30, 2018		Fair Value Measurements Using
Description		Level 1				Level 2				Level 3				Total
Assets, at fair value:
Debt investments(1)		$	—			$	—			$	1,662,297			$	1,662,297
Equity investments(1)		—				—				43,639				43,639
Money market funds(1)(2)		17,478				—				—				17,478
Investment measured at NAV(3)(4)		—				—				—				92,579
Total assets, at fair value:		$	17,478			$	—			$	1,705,936			$	1,815,993

As of September 30, 2017		Fair Value Measurements Using
Description		Level 1				Level 2				Level 3				Total
Assets, at fair value:
Debt investments(1)		$	—			$	—			$	1,538,606			$	1,538,606
Equity investments(1)		—				—				51,394				51,394
Money market funds(1)(2)		13,825				—				—				13,825
Investment measured at NAV(3)(4)		—				—				—				95,015
Total assets, at fair value:		$	13,825			$	—			$	1,590,000			$	1,698,840

(1)	Refer to the Consolidated Schedules of Investments for further details.

(2)	Included in cash and cash equivalents and restricted cash and cash equivalents on the Consolidated Statements of Financial Condition.

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

(3)	Certain investments that are measured at fair value using the NAV have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Financial Condition.

(4)	Represents the Company's investment in LLC equity interests in SLF. The fair value of this investment has been determined using the NAV of the Company’s ownership interest in members’ capital.

The net change in unrealized appreciation (depreciation) for the three and nine months ended June 30, 2018 reported within the net change in unrealized appreciation (depreciation) on investments in the Company’s Consolidated Statements of Operations attributable to the Company’s Level 3 assets held as of June 30, 2018 was $1,374 and $6,702, respectively. The net change in unrealized appreciation (depreciation) for the three and nine months ended June 30, 2017 reported within the net change in unrealized appreciation (depreciation) on investments in the Company’s Consolidated Statements of Operations attributable to the Company’s Level 3 assets held as of June 30, 2017 was $3,882 and $8,874, respectively.

The following table presents the changes in investments and secured borrowings measured at fair value using Level 3 inputs for the nine months ended June 30, 2018 and 2017:

	For the nine months ended June 30, 2018
	Debt Investments				Equity Investments				Total Investments				Secured Borrowings
Fair value, beginning of period	$	1,538,606			$	51,394			$	1,590,000			$	—
Net change in unrealized appreciation (depreciation)     on investments	3,661				(7,626		)		(3,965		)		—
Realized gain (loss) on investments	(4,175		)		18,919				14,744				—
Funding of (proceeds from) revolving loans, net	(4,334		)		—				(4,334		)		—
Fundings of investments	453,084				4,387				457,471				—
PIK interest	710				—				710				—
Proceeds from principal payments and sales of portfolio     investments	(332,675		)		(23,435		)		(356,110		)		—
Accretion of discounts and amortization of premiums	7,420				—				7,420				—
Fair value, end of period	$	1,662,297			$	43,639			$	1,705,936			$	—

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

	For the nine months ended June 30, 2017
	Debt Investments				Equity Investments				Total Investments				Secured Borrowings
Fair value, beginning of period	$	1,573,953			$	59,732			$	1,633,685			$	475
Net change in unrealized appreciation (depreciation)     on investments	3,621				6,350				9,971				—
Net change in unrealized appreciation (depreciation)     on secured borrowings	—				—				—				(1		)
Realized gain (loss) on investments	(640		)		(976		)		(1,616		)		—
Funding of (proceeds from) revolving loans, net	(959		)		—				(959		)		—
Fundings of investments	446,059				3,162				449,221				—
PIK interest	1,537				—				1,537				—
Proceeds from principal payments and sales of portfolio investments	(320,143		)		(6,871		)		(327,014		)		—
Non-cash proceeds from subordinated notes in SLF principal payments	(78,689		)		—				(78,689		)		—
Repayments on secured borrowings	—				—				—				(69		)
Accretion of discounts and amortization of premiums	6,793				—				6,793				1
Fair value, end of period	$	1,631,532			$	61,397			$	1,692,929			$	406

The following tables present quantitative information about the significant unobservable inputs of the Company’s Level 3 investments as of June 30, 2018 and September 30, 2017.

Quantitative information about Level 3 Fair Value Measurements
	Fair value as of June 30, 2018				Valuation Techniques		Unobservable Input		Range (Weighted Average)
Assets:
Senior secured loans(1)	$	208,488			Market rate approach		Market interest rate		6.8% - 25.0% (7.3%)
					Market comparable companies		EBITDA multiples		5.0x - 15.0x (10.3x)
	8,643				Market comparable		Broker/dealer bids or quotes		N/A
One stop loans(1)(2)(3)	$	1,418,992			Market rate approach		Market interest rate		5.8% - 19.0% (9.1%)
					Market comparable companies		EBITDA multiples		4.5x - 35.0x (13.5x)
							Revenue multiples		2.5x - 10.2x (4.1x)
	3,229				Market comparable		Broker/dealer bids or quotes		N/A
Subordinated debt and second lien loans(1)(4)	$	9,682			Market rate approach		Market interest rate		10.8% - 19.5% (10.9%)
					Market comparable companies		EBITDA multiples		10.5x - 11.0x (10.5x)
							Revenue multiples		5.1x
Equity(5)(6)	$	43,639			Market comparable companies		EBITDA multiples		4.5x - 28.5x (12.1x)
							Revenue multiples		2.5x - 10.2x (3.8x)

(1)	The fair value of this asset class was determined using the market rate approach as the investments in this asset class were determined not to be credit impaired using the market comparable companies approach. The unobservable inputs for both valuation techniques have been presented, but the fair value as of June 30, 2018 was determined using the market rate approach.

(2)	Excludes $13,263 of non-accrual loans at fair value, which the Company valued using the market comparable companies approach.

(3)	The Company valued $1,259,835 and $159,157 of one stop loans using EBITDA and revenue multiples, respectively. All one stop loans were also valued using the market rate approach.

(4)	The Company valued $9,498 and $184 of subordinated debt and second lien loans using EBITDA and revenue multiples, respectively. All subordinated debt and second lien loans were also valued using the market rate approach.

(5)	Excludes $92,579 of LLC equity interests in SLF at fair value, which the Company valued using the NAV.

(6)	The Company valued $38,597 and $5,042 of equity investments using EBITDA and revenue multiples, respectively.

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

Quantitative information about Level 3 Fair Value Measurements
	Fair value as of September 30, 2017				Valuation Techniques		Unobservable Input		Range (Weighted Average)
Assets:
Senior secured loans(1)(2)	$	184,529			Market rate approach		Market interest rate		5.6% - 12.5% (6.9%)
					Market comparable companies		EBITDA multiples		5.0x - 17.5x (11.6x)
	10,560				Market comparable		Broker/dealer bids or quotes		N/A
One stop loans(1)(3)(4)	$	1,327,788			Market rate approach		Market interest rate		2.3% - 39.5% (8.1%)
					Market comparable companies		EBITDA multiples		4.0x - 35.0x (12.5x)
							Revenue multiples		2.0x - 7.5x (3.9x)
	3,281				Market comparable		Broker/dealer bids or quotes		N/A
Subordinated debt and second lien loans(1)	$	9,493			Market rate approach		Market interest rate		9.3% - 19.5% (9.4%)
					Market comparable companies		EBITDA multiples		10.5x - 11.0x (10.5x)
Equity(5)(6)	$	51,394			Market comparable companies		EBITDA multiples		4.0x - 43.3x (12.5x)
							Revenue multiples		2.0x - 5.8x (3.0x)

(1)	The fair value of this asset class was determined using the market rate approach as the investments in this asset class were determined not to be credit impaired using the market comparable companies approach. The unobservable inputs for both valuation techniques have been presented, but the fair value as of September 30, 2017 was determined using the market rate approach.

(2)	Excludes $(60) of non-accrual loans at fair value, which the Company valued using the market comparable companies approach.

(3)	Excludes $3,015 of non-accrual loans at fair value, which the Company valued using the market comparable companies approach.

(4)	The Company valued $1,189,176 and $138,612 of one stop loans using EBITDA and revenue multiples, respectively. All one stop loans were also valued using the market rate approach.

(5)	Excludes $95,015 of LLC equity interests in SLF at fair value, which the Company valued using the NAV.

(6)	The Company valued $47,092 and $4,302 of equity investments using EBITDA and revenue multiples, respectively.

The above tables are not intended to be all-inclusive but rather to provide information on significant unobservable inputs and valuation techniques used by the Company.

The significant unobservable inputs used in the fair value measurement of the Company’s debt and equity investments are EBITDA multiples, revenue multiples and market interest rates. The Company uses EBITDA multiples and, to a lesser extent, revenue multiples on its debt and equity investments and secured borrowings to determine any credit gains or losses. Increases or decreases in either of these inputs in isolation would result in a significantly lower or higher fair value measurement. The Company uses market interest rates for loans to determine if the effective yield on a loan is commensurate with the market yields for that type of loan. If a loan’s effective yield is significantly less than the market yield for a similar loan with a similar credit profile, then the resulting fair value of the loan may be lower.

Other Financial Assets and Liabilities

ASC Topic 820 requires disclosure of the fair value of financial instruments for which it is practical to estimate such value. As a result, with the exception of the line item titled “debt” which is reported at cost, all assets and liabilities approximate fair value on the Consolidated Statements of Financial Condition due to their short maturity. Fair value of the Company’s debt is estimated using Level 3 inputs by discounting remaining payments using comparable market rates or market quotes for similar instruments at the measurement date, if available.

63

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

The following are the carrying values and fair values of the Company’s debt and other short-term borrowings as of June 30, 2018 and September 30, 2017. Fair value is estimated by discounting remaining payments using applicable market rates or market quotes for similar instruments at the measurement date, if available.

	As of June 30, 2018								As of September 30, 2017
	Carrying Value				Fair Value				Carrying Value				Fair Value
Debt	$	875,950			$	873,445			$	781,100			$	788,762
Other short-term borrowings	9,425				9,425				—				—

Note 6. Borrowings

In accordance with the 1940 Act, with certain limited exceptions, the Company is currently allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 200% after such borrowing. The Small Business Credit Availability Act (“SBCAA”), which was signed into law on March 23, 2018, among other things, amended Section 61(a) of the 1940 Act to add a new Section 61(a)(2) that reduces the asset coverage requirement applicable to business development companies from 200% to 150% so long as the business development company meets certain disclosure requirements and obtains certain approvals. The reduced asset coverage requirement would permit a business development company to have a ratio of total consolidated assets to outstanding indebtedness of 2:1 as compared to a maximum of 1:1 under the 200% asset coverage requirement. Effectiveness of the reduced asset coverage requirement to a business development company requires approval by either (1) a “required majority,” as defined in Section 57(o) of the 1940 Act, of such business development company’s board of directors with effectiveness one year after the date of such approval or (2) a majority of votes cast at a special or annual meeting of such business development company’s stockholders at which a quorum is present, which is effective the day after such stockholder approval. The Company has not sought or obtained either approval and, as a result and subject to the exemptive relief described below, remains subject to the 200% asset coverage requirement under Section 61(a)(1) of the 1940 Act. On September 13, 2011, the Company received exemptive relief from the SEC allowing it to modify the asset coverage requirement to exclude the SBA debentures from the asset coverage calculation. As such, the Company’s ratio of total consolidated assets to outstanding indebtedness may be less than 200% even if the Company does not approve the modified asset coverage requirement permitted by Section 61(a)(2) of the 1940 Act. This provides the Company with increased investment flexibility but also increases its risks related to leverage. As of June 30, 2018, the Company’s asset coverage for borrowed amounts was 258.5% (excluding the SBA debentures).

Debt Securitizations: On July 16, 2010, the Company completed a $300,000 term debt securitization, which was subsequently increased to $350,000 (as amended, “2010 Debt Securitization”). Term debt securitizations are also known as collateralized loan obligations ("CLOs") and are a form of secured financing incurred by the Company, which is consolidated by the Company and subject to the Company's overall asset coverage requirements. The notes (“2010 Notes”) offered in the 2010 Debt Securitization were issued by the 2010 Issuer, a subsidiary of Holdings. Through October 19, 2016, the 2010 Debt Securitization consisted of $203,000 of Aaa/AAA Class A 2010 Notes that bore interest at a rate of three-month LIBOR plus 1.74%, $12,000 of Class B 2010 Notes that bore interest at a rate of three-month LIBOR plus 2.40% and $135,000 of Subordinated 2010 Notes that do not bear interest. On October 20, 2016, the Company and the 2010 Issuer further amended the 2010 Debt Securitization to, among other things, (a) refinance the issued Class A 2010 Notes by redeeming in full the Class A 2010 Notes and issuing new Class A-Refi 2010 Notes in an aggregate principal amount of $205,000 that as of June 30, 2018, bore interest at a rate of three-month LIBOR plus 1.90%, (b) refinance the Class B Notes by redeeming in full the Class B 2010 Notes and issuing new Class B-Refi 2010 Notes in an aggregate principal amount of $10,000 that as of June 30, 2018, bore interest at a rate of three-month LIBOR plus 2.40%, and (c) extend the reinvestment period applicable to the 2010 Issuer to July 20, 2018. Following the refinancing, Holdings retained the Class B-Refi 2010 Notes. As of June 30, 2018, the Class A-Refi 2010 Notes and Class B-Refi 2010 Notes were secured by the assets held by the 2010 Issuer.

The Class A-Refi 2010 Notes are included in the June 30, 2018 and September 30, 2017, Consolidated Statement of Financial Condition as debt of the Company and the Class B-Refi 2010 Notes were eliminated in consolidation. As of June 30, 2018 and September 30, 2017, the Subordinated 2010 Notes were eliminated in consolidation.

Through July 20, 2018, all principal collections received on the underlying collateral could have been used by the 2010 Issuer to purchase new collateral under the direction of the Investment Adviser in its capacity as collateral manager of the 2010 Issuer and in accordance with the Company’s investment strategy, allowing the Company to maintain the leverage in the 2010 Debt Securitization. The 2010 Notes were scheduled to mature on July 20, 2023.

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

As of June 30, 2018 and September 30, 2017, there were 76 and 81 portfolio companies with a total fair value of $336,598 and $345,750, respectively, securing the 2010 Notes. The pool of loans in the 2010 Debt Securitization were required to meet certain requirements, including asset mix and concentration, collateral coverage, term, agency rating, minimum coupon, minimum spread and sector diversity requirements.

The interest charged under the 2010 Debt Securitization was based on three-month LIBOR. The three-month LIBOR in effect as of June 30, 2018 based on the last interest rate reset was 2.4%. For the three and nine months ended June 30, 2018 and 2017, the components of interest expense, cash paid for interest, annualized average interest rates and average outstanding balances for the 2010 Debt Securitization were as follows:

	For the three months ended June 30,								For the nine months ended June 30,
	2018				2017				2018				2017
Stated interest expense	$	2,141			$	1,570			$	5,666			$	4,492
Amortization of debt issuance costs	43				67				180				193
Total interest and other debt financing expenses	$	2,184			$	1,637			$	5,846			$	4,685
Cash paid for interest expense	$	1,826			$	1,502			$	5,253			$	4,317
Annualized average stated interest rate	4.2		%		3.1		%		3.7		%		2.9		%
Average outstanding balance	$	205,000			$	205,000			$	205,000			$	205,696

As of June 30, 2018, the amounts, ratings and interest rates (expressed as a spread to three-month LIBOR) of the Class A-Refi 2010 Notes were as follows:

Description		Class A-Refi 2010 Notes
Type		Senior Secured Floating Rate
Amount Outstanding		$205,000
Moody’s Rating		"Aaa"
S&P Rating		"AAA"
Interest Rate		LIBOR + 1.90%

On June 5, 2014, the Company completed a $402,569 term debt securitization (“2014 Debt Securitization”). Term debt securitizations are also known as CLOs and are a form of secured financing incurred by the Company, which is consolidated by the Company and subject to the Company’s overall asset coverage requirements. The notes (“2014 Notes”) offered in the 2014 Debt Securitization were issued by the 2014 Issuer and are secured by a diversified portfolio of senior secured and second lien loans held by the 2014 Issuer. The 2014 Debt Securitization initially consisted of $191,000 of Aaa/AAA Class A-1 2014 Notes, $20,000 of Aaa/AAA Class A-2 2014 Notes and $35,000 of Aa2/AA Class B 2014 Notes. In partial consideration for the loans transferred to the 2014 Issuer as part of the 2014 Debt Securitization, the Company received $37,500 of Class C 2014 Notes and $119,069 of LLC equity interests in the 2014 Issuer. The Company retained all of the Class C 2014 Notes and LLC equity interests totaling $37,500 and $119,069, respectively. On March 23, 2018, the Company and the 2014 Issuer amended the 2014 Debt Securitization to, among other things, (a) refinance the issued Class A-1 2014 Notes by redeeming in full the $191.0 million of Class A-1 2014 Notes and issuing new Class A-1-R 2014 Notes in an aggregate principal amount of $191,000 that bear interest at a rate of three-month LIBOR plus 0.95%, which is a decrease from the rate of three-month LIBOR plus 1.75% of the previously outstanding Class A-1 2014 Notes, (b) refinance the Class A-2 2014 Notes by redeeming in full the $20,000 of Class A-2 2014 Notes and issuing new Class A-2-R 2014 Notes in an aggregate principal amount of $20,000 that bear interest at a rate of three-month LIBOR plus 0.95%, which is a decrease from the rate of three-month LIBOR plus 1.95% of the previously outstanding Class A-2 2014 Notes, (c) refinance the Class B 2014 Notes by redeeming in full the $35,000 of Class B 2014 Notes and issuing new Class B-R 2014 Notes in an aggregate principal amount of $35,000 that bear interest at a rate of three-month LIBOR plus 1.40%, which is a decrease from the rate of three-month LIBOR plus 2.50% of the previously outstanding Class B 2014 Notes, (d) refinance the Class C 2014 Notes by redeeming in full the $37,500 of Class C 2014 Notes and issuing new Class C-R 2014 Notes in an aggregate principal amount of $37,500 that bear interest at a rate of three-month LIBOR plus 1.55%, which is a decrease from the rate of three-month LIBOR plus 3.50% of the previously outstanding Class C 2014 Notes. The Class C-R 2014 Notes were retained by the Company, and the Company remains the sole owner of the equity of the 2014 Issuer. The Class A-1-R, Class A-2-R and Class B-R 2014 Notes are included in the June 30, 2018 Consolidated Statements of Financial Condition as debt of the Company and the Class C-R 2014 Notes and LLC equity interests were eliminated in consolidation. The

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

Class A-1, Class A-2 and Class B 2014 Notes are included in the September 30, 2017 Consolidated Statements of Financial Condition as debt of the Company and the Class C 2014 Notes and LLC equity interests were eliminated in consolidation.

Through April 28, 2018, all principal collections received on the underlying collateral could have been used by the 2014 Issuer to purchase new collateral under the direction of the Investment Adviser in its capacity as collateral manager of the 2014 Issuer and in accordance with the Company’s investment strategy, allowing the Company to maintain the initial leverage in the 2014 Debt Securitization. The 2014 Notes are scheduled to mature on April 25, 2026.

As of June 30, 2018 and September 30, 2017, there were 88 and 85 portfolio companies with a total fair value of $379,949 and $382,957, respectively, securing the 2014 Notes. The pool of loans in the 2014 Debt Securitization must meet certain requirements, including asset mix and concentration, collateral coverage, term, agency rating, minimum coupon, minimum spread and sector diversity requirements.

The interest charged under the 2014 Debt Securitization is based on three-month LIBOR. The three-month LIBOR in effect as of June 30, 2018 based on the last interest rate reset was 2.4%. For the three and nine months ended June 30, 2018 and 2017, the components of interest expense, cash paid for interest, annualized average interest rates and average outstanding balances for the 2014 Debt Securitization were as follows:

	For the three months ended June 30,								For the nine months ended June 30,
	2018				2017				2018				2017
Stated interest expense	$	2,083			$	1,864			$	6,254			$	5,333
Amortization of debt issuance costs	371				159				710				478
Total interest and other debt financing expenses	$	2,454			$	2,023			$	6,964			$	5,811
Cash paid for interest expense	$	741			$	1,790			$	6,191			$	5,149
Annualized average stated interest rate	3.4		%		3.0		%		3.4		%		2.9		%
Average outstanding balance	$	246,000			$	246,000			$	246,000			$	246,000

As of June 30, 2018, the classes, amounts, ratings and interest rates (expressed as a spread to three-month LIBOR) of the Class A-1-R, A-2-R and B-R 2014 Notes are as follows:

Description		Class A-1-R 2014 Notes		Class A-2-R 2014 Notes		Class B-R 2014 Notes
Type		Senior Secured Floating Rate		Senior Secured Floating Rate		Senior Secured Floating Rate
Amount Outstanding		$191,000		$20,000		$35,000
Moody’s Rating		"Aaa"		"Aaa"		"Aa1"
S&P Rating		"AAA"		"AAA"		"AA"
Interest Rate		LIBOR + 0.95%		LIBOR + 0.95%		LIBOR + 1.40%

The Investment Adviser served as collateral manager to the 2010 Issuer and serves as collateral manager to the 2014 Issuer under separate collateral management agreements and receives a fee for providing these services. The total fees payable by the Company under its Investment Advisory Agreement are reduced by an amount equal to the total aggregate fees paid to the Investment Adviser by the 2010 Issuer and the 2014 Issuer for rendering such collateral management services.

As part of each of the 2010 Debt Securitization and the 2014 Debt Securitization, GBDC entered into master loan sale agreements under which GBDC agreed to directly or indirectly sell or contribute certain senior secured and second lien loans (or participation interests therein) to the 2010 Issuer and the 2014 Issuer, as applicable, and to purchase or otherwise acquire the Subordinated 2010 Notes and the LLC equity interests in the 2014 Issuer, as applicable. As of June 30, 2018, the 2010 Notes (other than the Subordinated 2010 Notes) and the 2014 Notes were the secured obligations of the 2010 Issuer and 2014 Issuer, respectively, and indentures governing each of the 2010 Notes and the 2014 Notes include customary covenants and events of default.

SBA Debentures: On August 24, 2010, SBIC IV received approval for a license from the SBA to operate as an SBIC. On December 5, 2012, SBIC V received a license from the SBA to operate as an SBIC. On January 10, 2017, SBIC VI received a license from the SBA to operate as an SBIC. SBICs are subject to a variety of regulations and oversight by the SBA concerning the size and nature of the companies in which they may invest as well as the structures of those investments.

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

The licenses allow the SBICs to obtain leverage by issuing SBA-guaranteed debentures, subject to issuance of a capital commitment by the SBA and customary procedures. These debentures are non-recourse to GBDC, have interest payable semiannually and a ten-year maturity. The interest rate is fixed at the time of issuance at a market-driven spread over U.S. Treasury Notes with ten-year maturities.

Under present SBIC regulations, the maximum amount of SBA-guaranteed debentures that may be issued by multiple licensees under common management is $350,000 and the maximum amount that a single SBIC licensee may issue is $150,000. As of June 30, 2018, SBIC IV, SBIC V and SBIC VI had $115,000, $150,000 and $12,500, respectively, of outstanding SBA-guaranteed debentures that mature between September 2021 and March 2028, leaving incremental borrowing capacity of $72,500 under present SBIC regulations. As of September 30, 2017, SBIC IV, SBIC V and SBIC VI had $125,000 and $133,000 and $9,000, respectively, of outstanding SBA-guaranteed debentures that mature between September 2021 and September 2027.

The interest rate on the outstanding debentures as of June 30, 2018 is fixed at an average annualized interest rate of 3.4%. For the three and nine months ended June 30, 2018 and 2017, the components of interest expense, cash paid for interest, annualized average interest rates and average outstanding balances for the SBA debentures were as follows:

	For the three months ended June 30,								For the nine months ended June 30,
	2018				2017				2018				2017
Stated interest expense	$	2,337			$	2,473			$	6,876			$	7,339
Amortization of debt issuance costs	272				320				821				1,032
Total interest and other debt financing expenses	$	2,609			$	2,793			$	7,697			$	8,371
Cash paid for interest expense	$	—			$	—			$	4,512			$	4,764
Annualized average stated interest rate	3.4		%		3.5		%		3.4		%		3.5		%
Average outstanding balance	$	277,500			$	284,594			$	272,780			$	282,366

Revolving Credit Facility: On July 21, 2011, Funding entered into a senior secured revolving credit facility (as amended, the “Credit Facility”) with Wells Fargo Bank, N.A., as administrative agent and lender, which as of June 30, 2018, allowed Funding to borrow up to $170,000 at any one time outstanding, subject to leverage and borrowing base restrictions.

Through a series of amendments, most recently on December 14, 2017, the Company and Funding amended the Credit Facility to, among other things, decrease the size of the Credit Facility from $225,000 to $170,000 and decrease the interest the Credit Facility bears from one-month LIBOR plus 2.25% to one-month LIBOR plus 2.15%. The reinvestment period expires on September 27, 2018 and the stated maturity date is September 28, 2022. In addition to the stated interest rate on the Credit Facility, the Company is required to pay a non-usage fee at a rate between 0.50% and 2.00% per annum depending on the size of the unused portion of the Credit Facility.

The Credit Facility is collateralized by all of the assets held by Funding, and GBDC has pledged its interests in Funding as collateral to Wells Fargo Bank, N.A., as the collateral agent, under an ancillary agreement to secure the obligations of GBDC as the transferor and servicer under the Credit Facility. Both GBDC and Funding have made customary representations and warranties and are required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities. Borrowing under the Credit Facility is subject to the 200% asset coverage requirements contained in the 1940 Act.

The Company has transferred certain loans and debt securities it has originated or acquired from time to time to Funding through a purchase and sale agreement and may cause Funding to originate or acquire loans in the future, consistent with the Company’s investment objectives.

As of June 30, 2018 and September 30, 2017, the Company had outstanding debt under the Credit Facility of $147,450 and $63,100, respectively. For the three and nine months ended June 30, 2018, the Company had borrowings on the Credit Facility of $150,950 and $394,300, respectively, and repayments on the Credit Facility of $110,200 and $309,950, respectively. For the three and nine months ended June 30, 2017, the Company had borrowings on the Credit Facility of $181,600 and $408,350, respectively, and repayments on the Credit Facility of $166,850 and $390,650, respectively.

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

For the three and nine months ended June 30, 2018 and 2017, the components of interest expense, cash paid for interest and facility fees, annualized average interest rates and average outstanding balances for the Credit Facility were as follows:

	For the three months ended June 30,								For the nine months ended June 30,
	2018				2017				2018				2017
Stated interest expense	$	1,052			$	1,237			$	2,565			$	3,475
Facility fees	84				109				521				242
Amortization of debt issuance costs	121				297				531				785
Total interest and other debt financing expenses	$	1,257			$	1,643			$	3,617			$	4,502
Cash paid for interest expense and facility fees	$	1,061			$	1,324			$	2,995			$	3,606
Annualized average stated interest rate	4.1		%		3.3		%		3.7		%		3.1		%
Average outstanding balance	$	102,335			$	148,087			$	92,197			$	148,956

Revolver:  On June 22, 2016, the Company entered into the Adviser Revolver with the Investment Adviser, with a maximum credit limit of $20,000 and expiration date of June 22, 2019. The Adviser Revolver bears an interest rate equal to the short-term Applicable Federal Rate, which was 2.3% as of June 30, 2018. As of June 30, 2018 and September 30, 2017, the Company had no outstanding debt under the Adviser Revolver. For the three and nine months ended June 30, 2018 and 2017, the Company had no borrowings and repayments, did not incur any interest expense and no cash was paid for interest on the Adviser Revolver.

Other Short-Term Borrowings:  Borrowings with original maturities of less than one year are classified as short-term.  The Company’s short-term borrowings as of June 30, 2018 are the result of an investment that was sold under a repurchase agreement.  Investments sold under repurchase agreements are accounted for as collateralized borrowings as the sale of the investment does not qualify for sale accounting under ASC Topic 860 and remains as an investment on the Consolidated Statements of Financial Condition. The investment sold under the repurchase agreement is denominated in foreign currency and the Company entered into the repurchase agreement to help mitigate the impact that an adverse change in exchange rates would have on the value of that investment. 

As of June 30, 2018, the Company had $9,425 of short-term borrowings and the fair value of the loan that is associated with the short-term borrowing was $9,401. For each of the three and nine months ended June 30, 2018, the annualized effective interest rate on short-term borrowings was 4.9% and interest expense was $52. The maturity date on the short-term borrowing is August 17, 2018.

The average total debt outstanding (including the debt under the 2010 Debt Securitization, the 2014 Debt Securitization, SBA debentures, Credit Facility, Adviser Revolver, and other short-term borrowings) for the three and nine months ended June 30, 2018 was $835,120 and $817,405, respectively. The average total debt outstanding (including the debt under the 2010 Debt Securitization, the 2014 Debt Securitization, SBA debentures, Credit Facility and Adviser Revolver) for the three and nine months ended June 30, 2017 was $883,681 and $883,018, respectively.

For the three and nine months ended June 30, 2018, the effective annualized average interest rate, which includes amortization of debt financing costs and non-usage facility fees, on the Company’s total debt outstanding was 4.1% and 4.0%, respectively. For the three and nine months ended June 30, 2017, the effective annualized average interest rate, which includes amortization of debt financing costs and non-usage facility fees, on the Company’s total debt outstanding (excluding secured borrowings) was 3.7% and 3.5%, respectively.

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

A summary of the Company’s maturity requirements for borrowings as of June 30, 2018 is as follows:

	Payments Due by Period
	Total				Less Than 1 Year				1 – 3 Years				3 – 5 Years				More Than 5 Years
2010 Debt Securitization	$	205,000			$	—			$	—			$	—			$	205,000
2014 Debt Securitization	246,000				—				—				—				246,000
SBA debentures	277,500				—				—				115,000				162,500
Credit Facility	147,450				—				—				147,450				—
Adviser Revolver	—				—				—				—				—
Other short-term borrowings	9,425				9,425				—				—				—
Total borrowings	$	885,375			$	9,425			$	—			$	262,450			$	613,500

Secured Borrowings:  Certain partial loan sales do not qualify for sale accounting under ASC Topic 860 because these sales do not meet the definition of a “participating interest”, as defined in the guidance, in order for sale treatment to be allowed. Participations or other partial loan sales which do not meet the definition of a participating interest remain as an investment on the Consolidated Statement of Financial Condition and the portion sold is recorded as a secured borrowing in the liabilities section of the Consolidated Statement of Financial Condition. For these partial loan sales, the interest earned on the entire loan balance is recorded within “interest income” and the interest earned by the buyer in the partial loan sale is recorded within “interest and other debt financing expenses” in the Consolidated Statement of Operations.

As of June 30, 2018 and September 30, 2017, there were no secured borrowings outstanding.

Past secured borrowings were the result of the Company’s completion of partial loan sales of one stop loans associated with a portfolio company that did not meet the definition of a “participating interest.” As a result, sale treatment was not allowed and the partial loan sales were treated as secured borrowings.

During the three and nine months ended June 30, 2017, there were no partial loan sales, no fundings on revolving and delayed draw secured borrowings and repayments on secured borrowings totaled $42 and $69, respectively.

For the three and nine months ended June 30, 2017, the effective annualized average interest rate on secured borrowings, which includes amortization of original issuance costs, was 2.9% and 2.7%, respectively, and interest expense was $3 and $9, respectively and amortization of original issue discount was an amount less than $1 and $1, respectively.

Note 7. Commitments and Contingencies

Commitments: The Company had outstanding commitments to fund investments totaling $58,775 and $60,497 under various undrawn revolvers and other credit facilities as of June 30, 2018 and September 30, 2017, respectively. As described in Note 4, the Company had commitments of up to $79,467 and $77,543 to SLF as of June 30, 2018 and September 30, 2017, respectively that may be contributed primarily for the purpose of funding new investments approved by the SLF investment committee.

Indemnifications:  In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties that provide general indemnifications. The Company’s maximum exposure under these arrangements is unknown, as these involve future claims that may be made against the Company but that have not occurred. The Company expects the risk of any future obligations under these indemnifications to be remote.

Off-balance sheet risk: Off-balance sheet risk refers to an unrecorded potential liability that may result in a future obligation or loss, even though it does not appear on the Consolidated Statements of Financial Condition. The Company has entered and, in the future, may again enter into derivative instruments that contain elements of off-balance sheet market and credit risk. There were no commitments outstanding for derivative contracts as of June 30, 2018 and September 30, 2017. Derivative instruments can be affected by market conditions, such as interest rate volatility, which could impact the fair value of the derivative instruments. If market conditions move against the Company, it may not achieve the anticipated benefits of the derivative instruments and may realize a loss. The Company minimizes market risk through monitoring its investments and borrowings.

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

Concentration of credit and counterparty risk:  Credit risk arises primarily from the potential inability of counterparties to perform in accordance with the terms of the contract. The Company has engaged and, in the future, may engage again in derivative transactions with counterparties. In the event that the counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counterparties or issuers of the instruments. The Company’s maximum loss that it could incur related to counterparty risk on its derivative instruments is the value of the collateral for that respective derivative instrument. It is the Company’s policy to review, as necessary, the credit standing of each counterparty.

Legal proceedings:  In the normal course of business, the Company may be subject to legal and regulatory proceedings that are generally incidental to its ongoing operations. While there can be no assurance of the ultimate disposition of any such proceedings, the Company does not believe any disposition will have a material adverse effect on the Company’s consolidated financial statements.

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

Note 8. Financial Highlights

The financial highlights for the Company are as follows:

		Nine months ended June 30,
Per share data:(1)		2018				2017
Net asset value at beginning of period		$	16.08			$	15.96
Net increase in net assets as a result of issuance of shares(2)		—				0.01
Net increase in net assets as a result of public offering		—				0.18
Distributions declared:
From net investment income		(0.99		)		(1.19		)
From capital gains		(0.05		)		(0.02		)
Net investment income(3)		0.93				0.92
Net realized gain (loss) on investments and foreign currency transactions		0.25				(0.03		)
Net change in unrealized appreciation (depreciation) on investments and foreign currency translation		(0.07		)		0.18
Net asset value at end of period		$	16.15			$	16.01
Per share market value at end of period		$	18.30			$	19.12
Total return based on market value(4)		3.21		%		10.01		%
Number of common shares outstanding		60,006,524				59,235,174

		Nine months ended June 30,
Listed below are supplemental data and ratios to the financial highlights:		2018				2017
Ratio of net investment income to average net assets*		7.74		%		7.70		%
Ratio of total expenses to average net assets(5)*		7.44		%		7.73		%
Ratio of incentive fees to average net assets		0.98		%		0.94		%
Ratio of expenses (without incentive fees) to average net assets*		6.46		%		6.79		%
Total return based on average net asset value(6)*		9.18		%		8.98		%
Net assets at end of period		$	969,322			$	948,219
Average debt outstanding		$	817,405			$	883,018
Average debt outstanding per share		$	13.60			$	14.91
Portfolio turnover*		27.94		%		26.03		%
Asset coverage ratio(7)		258.50		%		258.36		%
Asset coverage ratio per unit(8)		$	2,585			$	2,584
Average market value per unit:(9)
2010 Debt Securitization		N/A				N/A
2014 Debt Securitization		N/A				N/A
SBA Debentures		N/A				N/A
Credit Facility		N/A				N/A
Revolver		N/A				N/A
Adviser Revolver		N/A				N/A

* Annualized for periods of less than one year.

(1)	Based on actual number of shares outstanding at the end of the corresponding period or the weighted average shares outstanding for the period, unless otherwise noted, as appropriate.

(2)	Net increase in net assets as a result of issuance of shares related to shares issued through the DRIP.

(3)	Net investment income per share for the nine months ended June 30, 2018 and 2017 is shown after a net expense of $0 and $17, respectively, for U.S. federal excise tax.

(4)	Total return based on market value assumes distributions are reinvested in accordance with the DRIP. Total return does not include sales load.

(5)	Expenses, other than incentive fees, are annualized for a period less than one year.

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

(6)	Total return based on average net asset value is calculated as (a) the net increase in net assets resulting from operations divided by (b) the daily average of total net assets. Total return does not include sales load.

(7)	In accordance with the 1940 Act, with certain limited exceptions, the Company currently is allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 200% after such borrowing (excluding the Company's SBA debentures pursuant to exemptive relief received by the Company from the SEC).

(8)

Asset coverage ratio per unit is the ratio of the carrying value of our total consolidated assets, less all liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing indebtedness. Asset coverage ratio per unit is expressed in terms of dollar amounts per $1,000 of indebtedness. These amounts exclude the SBA debentures pursuant to exemptive relief the Company received from the SEC on September 13, 2011.

(9)	Not applicable because such senior securities are not registered for public trading.

Note 9. Earnings Per Share

The following information sets forth the computation of the net increase in net assets per share resulting from operations for the three and nine months ended June 30, 2018 and 2017:

	Three months ended June 30,								Nine months ended June 30,
	2018				2017				2018				2017
Earnings available to stockholders	$	21,720			$	20,111			$	66,067			$	59,835
Basic and diluted weighted average shares outstanding	59,872,113				57,719,505				59,732,945				56,058,642
Basic and diluted earnings per share	$	0.36			$	0.35			$	1.11			$	1.07

Note 10. Dividends and Distributions

The Company’s dividends and distributions are recorded on the ex-dividend date. The following table summarizes the Company’s dividend declarations and distributions during the nine months ended June 30, 2018 and 2017:

Date Declared			Record Date		Payment Date		Amount Per Share				Cash Distribution				DRIP Shares Issued			DRIP Shares Value
Nine months ended June 30, 2017
	11/14/2016		12/12/2016		12/29/2016		$	0.57		(1)	$	28,239			177,970			$	3,145
	02/07/2017		03/07/2017		03/30/2017		$	0.32			$	15,509			116,386			$	2,167
	05/04/2017		06/06/2017		06/29/2017		$	0.32			$	16,186			119,251			$	2,171
Nine months ended June 30, 2018
	11/17/2017		12/12/2017		12/28/2017		$	0.40		(2)	$	20,959			163,955			$	2,872
	02/06/2018		03/08/2018		03/30/2018		$	0.32			$	16,978			126,283			$	2,139
	05/04/2018		06/08/2018		06/28/2018		$	0.32			$	16,754			138,993			$	2,404

(1)	Includes a special distribution of $0.25 per share.

(2)	Includes a special distribution of $0.08 per share.

Note 11. Subsequent Events

On August 7, 2018, the Board declared a quarterly distribution of $0.32 per share payable on September 28, 2018 to holders of record as of September 7, 2018.

On July 20, 2018, the 2010 Issuer entered into a credit facility (the “MS Credit Facility”) with Morgan Stanley Bank, N.A., as lender, Morgan Stanley Senior Secured Funding, Inc., as administrative agent, and U.S. Bank National Association, as collateral agent for the administrative agent and the lenders. The MS Credit Facility allows the 2010 Issuer to borrow up to $300,000 at any one time outstanding. The period from the closing date until January 18, 2019 is referred to as the revolving period and during such revolving period, the 2010 Issuer may request drawdowns under the MS Credit Facility. During the period prior to the last day of the revolving period, borrowings under the MS Credit Facility will bear interest at a rate equal to the one-month LIBOR plus 1.90%. Commencing on the last day of the revolving period, the interest rate on borrowings under

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Golub Capital BDC, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (In thousands, except shares and per share data)

the MS Credit Facility will reset to one-month LIBOR plus 2.15% for the remaining term of the MS Credit Facility. The scheduled maturity date of the MS Credit Facility is March 20, 2019.

The MS Credit Facility is secured by all of the assets held by the 2010 Issuer. Pursuant to a collateral management agreement, the Investment Adviser has agreed to perform certain duties with respect to the purchase and management of the assets securing the MS Credit Facility. The Investment Adviser will not be paid a fee for such services under the collateral management agreement, but will be reimbursed for expenses incurred in the performance of such obligations other than any ordinary overhead expenses, which shall not be reimbursed. The 2010 Issuer made customary representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities. Borrowing under the MS Credit Facility is subject to the leverage restrictions contained in the Investment Company Act of 1940, as amended.

In connection with entry into the MS Credit Facility, on July 20, 2018, the 2010 Issuer redeemed the outstanding 2010 Notes pursuant to the terms of the indenture governing such 2010 Notes. Following such redemption, the agreements governing the 2010 Debt Securitization were terminated.

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

The information contained in this section should be read in conjunction with our interim and unaudited consolidated financial statements and related notes thereto appearing elsewhere in this quarterly report on Form 10-Q. In this report, “we,” “us,” “our” and “Golub Capital BDC” refer to Golub Capital BDC, Inc. and its consolidated subsidiaries.

Forward-Looking Statements

Some of the statements in this quarterly report on Form 10-Q constitute forward-looking statements, which relate to future events or our future performance or financial condition. The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties, including statements as to:

•	our future operating results;

•	our business prospects and the prospects of our portfolio companies;

•	the effect of investments that we expect to make and the competition for those investments;

•	our contractual arrangements and relationships with third parties;

•	actual and potential conflicts of interest with GC Advisors LLC, or GC Advisors, and other affiliates of Golub Capital LLC, collectively, Golub Capital;

•	the dependence of our future success on the general economy and its effect on the industries in which we invest;

•	the ability of our portfolio companies to achieve their objectives;

•	the use of borrowed money to finance a portion of our investments;

•	the adequacy of our financing sources and working capital;

•	the timing of cash flows, if any, from the operations of our portfolio companies;

•	general economic and political trends and other external factors;

•	the ability of GC Advisors to locate suitable investments for us and to monitor and administer our investments;

•	the ability of GC Advisors or its affiliates to attract and retain highly talented professionals;

•	our ability to qualify and maintain our qualification as a regulated investment company, or RIC,

and as a business development company;

•	general price and volume fluctuations in the stock markets;

•	the impact on our business of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations issued thereunder and any actions toward repeal thereof; and

•	the effect of changes to tax legislation and our tax position.

Such forward-looking statements may include statements preceded by, followed by or that otherwise include the words “may,” “might,” “will,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “predict,” “potential,” “plan” or similar words. The forward looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth elsewhere in this quarterly report on Form 10-Q and as “Risk Factors” in our annual report on Form 10-K for the year ended September 30, 2017 and our quarterly report on Form 10-Q for the quarter ended March 31, 2018.

We have based the forward-looking statements included in this report on information available to us on the date of this report. Actual results could differ materially from those anticipated in our forward-looking statements and future results could differ materially from historical performance. You are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the Securities and Exchange Commission, or the SEC, including annual reports on Form 10-K, registration statements on Form N-2, quarterly reports on Form 10-Q and current reports on Form 8-K. This quarterly report on Form 10-Q contains statistics and other data that have been obtained from or compiled from information made available by third-party service providers. We have not independently verified such statistics or data.

Overview

We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended, or the 1940 Act. In addition, for U.S. federal income tax purposes, we have elected to be treated as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended, or the Code. As a business development company and a RIC, we are also subject to certain constraints, including limitations imposed by the 1940 Act and the Code.

Our shares are currently listed on The Nasdaq Global Select Market under the symbol “GBDC”.

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Our investment objective is to generate current income and capital appreciation by investing primarily in one stop (a loan that combines characteristics of traditional first lien senior secured loans and second lien or subordinated loans and that are often referred to by other middle-market lenders as unitranche loans) and other senior secured loans of U.S. middle-market companies. We may also selectively invest in second lien and subordinated loans of, and warrants and minority equity securities in U.S. middle-market companies. We intend to achieve our investment objective by (1) accessing the established loan origination channels developed by Golub Capital, a leading lender to U.S. middle-market companies with over $25.0 billion in capital under management as of June 30, 2018, (2) selecting investments within our core middle-market company focus, (3) partnering with experienced private equity firms, or sponsors, in many cases with whom Golub Capital has invested alongside in the past, (4) implementing the disciplined underwriting standards of Golub Capital and (5) drawing upon the aggregate experience and resources of Golub Capital.

Our investment activities are managed by GC Advisors and supervised by our board of directors of which a majority of the members are independent of us, GC Advisors and its affiliates.

Under an investment advisory agreement, or the Investment Advisory Agreement, which was most recently reapproved by our board of directors in May 2018, we have agreed to pay GC Advisors an annual base management fee based on our average adjusted gross assets as well as an incentive fee based on our investment performance. Under an administration agreement, or the Administration Agreement, we are provided with certain administrative services by an administrator, or the Administrator, which is currently Golub Capital LLC.

Under the Administration Agreement, we have agreed to reimburse the Administrator for our allocable portion (subject to the review and approval of our independent directors) of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement.

We seek to create a portfolio that includes primarily one stop and other senior secured loans by primarily investing approximately $5.0 million to $30.0 million of capital, on average, in the securities of U.S. middle-market companies. We may also selectively invest more than $30.0 million in some of our portfolio companies and generally expect that the size of our individual investments will vary proportionately with the size of our capital base.

We generally invest in securities that have been rated below investment grade by independent rating agencies or that would be rated below investment grade if they were rated. These securities, which may be referred to as “junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal. In addition, many of our debt investments have floating interest rates that reset on a periodic basis and typically do not fully pay down principal prior to maturity, which may increase our risk of losing part or all of our investment.

As of June 30, 2018 and September 30, 2017, our portfolio at fair value was comprised of the following:

		As of June 30, 2018							As of September 30, 2017
Investment Type		Investments at  Fair Value (In thousands)				Percentage of Total Investments			Investments at  Fair Value (In thousands)				Percentage of Total Investments
Senior secured		$	217,131			12.1	%		$	195,029			11.6	%
One stop		1,435,484				79.8			1,334,084				79.2
Second lien		9,435				0.5			9,434				0.6
Subordinated debt		247				0.0	*		59				0.0	*
LLC equity interests in SLF(1)		92,579				5.2			95,015				5.6
Equity		43,639				2.4			51,394				3.0
Total		$	1,798,515			100.0	%		$	1,685,015			100.0	%

*	Represents an amount less than 0.1%.

(1)	Proceeds from the limited liability company, or LLC, equity interests invested in Senior Loan Fund LLC, or SLF, were utilized by SLF to invest in senior secured loans.

One stop loans include loans to technology companies undergoing strong growth due to new services, increased adoption and/or entry into new markets. We refer to loans to these companies as late stage lending loans. Other targeted characteristics of late stage lending businesses include strong customer revenue retention rates, a diversified customer base and backing from growth

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equity or venture capital firms. In some cases, the borrower’s high revenue growth is supported by a high level of discretionary spending. As part of the underwriting of such loans and consistent with industry practice, we may adjust our characterization of the earnings of such borrowers for a reduction or elimination of such discretionary expenses, if appropriate. As of June 30, 2018 and September 30, 2017, one stop loans included $159.2 million and $138.6 million, respectively, of late stage lending loans at fair value. As of June 30, 2018 and September 30, 2017, we had debt and equity investments in 192 and 185 portfolio companies, respectively, and an investment in SLF.

The following table shows the weighted average annualized income yield and weighted average annualized investment income yield of our earning portfolio company investments, which represented nearly 100% of our debt investments, as well as the total return based on our average net asset value, and the total return based on the change in the quoted market price of our stock and assuming distributions were reinvested in accordance with our dividend reinvestment plan, or DRIP, in each case for the three and nine months ended June 30, 2018 and 2017 was as follows:

	For the three months ended June 30,				For the nine months ended June 30,
	2018		2017		2018		2017
Weighted average annualized income yield(1)(2)	8.5%		7.9%		8.2%		7.8%
Weighted average annualized investment income yield(1)(3)	9.1%		8.7%		8.8%		8.4%
Total return based on average net asset value(4)*	9.0%		8.8%		9.2%		9.0%
Total return based on market value(5)	4.2%		(2.1)%		3.2%		10.0%

* Annualized for periods of less than one year.

(1)	For the three and nine months ended June 30, 2018 and for the three months ended June 30, 2017, weighted average annualized income yield and weighted average annualized investment income yield do not reflect interest income from subordinated notes in SLF, which were redeemed on December 30, 2016.

(2)	Represents income from interest, including subordinated notes in SLF, and fees, excluding amortization of capitalized fees and discounts, divided by the average fair value of earning portfolio company investments, and does not represent a return to any investor in us.

(3)	Represents income from interest, including subordinated notes in SLF, fees and amortization of capitalized fees and discounts divided by the average fair value of earning portfolio investments, and does not represent a return to any investor in us.

(4)	Total return based on average net asset value is calculated as (a) the net increase in net assets resulting from operations divided by (b) the daily average of total net assets. Total return does not include sales load.

(5)	Total return based on market value assumes distributions are reinvested in accordance with the DRIP. Total return does not include sales load.

Revenues: We generate revenue in the form of interest and fee income on debt investments and capital gains and distributions, if any, on portfolio company investments that we originate or acquire. Our debt investments, whether in the form of senior secured, one stop, second lien or subordinated loans, typically have a term of three to seven years and bear interest at a fixed or floating rate. In some instances, we receive payments on our debt investments based on scheduled amortization of the outstanding balances. In addition, we receive repayments of some of our debt investments prior to their scheduled maturity date. The frequency or volume of these repayments fluctuates significantly from period to period. Our portfolio activity also reflects the proceeds of sales of securities. In some cases, our investments provide for deferred interest payments or payment-in-kind, or PIK, interest. The principal amount of loans and any accrued but unpaid interest generally become due at the maturity date. In addition, we may generate revenue in the form of commitment, origination, amendment, structuring or due diligence fees, fees for providing managerial assistance and consulting fees. Loan origination fees, original issue discount and market discount or premium are capitalized, and we accrete or amortize such amounts as interest income. We record prepayment premiums on loans as fee income. For additional details on revenues, see “Critical Accounting Policies—Revenue Recognition.”

We recognize realized gains or losses on investments based on the difference between the net proceeds from the disposition and the amortized cost basis of the investment or derivative instrument, without regard to unrealized gains or losses previously recognized. We record current period changes in fair value of investments and derivative instruments that are measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investments in the Consolidated Statements of Operations.

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Expenses:  Our primary operating expenses include the payment of fees to GC Advisors under the Investment Advisory Agreement and interest expense on our outstanding debt. We bear all other out-of-pocket costs and expenses of our operations and transactions, including:

•	calculating our net asset value, or NAV (including the cost and expenses of any independent valuation firm);

•

fees and expenses incurred by GC Advisors payable to third parties, including agents, consultants or other advisors, in monitoring financial and legal affairs for us and in monitoring our investments and performing due diligence on our prospective portfolio companies or otherwise relating to, or associated with, evaluating and making investments, which fees and expenses may include, among other items, due diligence reports, appraisal reports, any studies that may be commissioned by GC Advisors and travel and lodging expenses;

•	expenses related to unsuccessful portfolio acquisition efforts;

•	offerings of our common stock and other securities;

•	administration fees and expenses, if any, payable under the Administration Agreement (including payments based upon our allocable portion of the Administrator’s overhead in performing its obligations under the Administration Agreement, including rent and the allocable portion of the cost of our chief compliance officer, chief financial officer and their respective staffs);

•	fees payable to third parties, including agents, consultants or other advisors, relating to, or associated with, evaluating and making investments in portfolio companies, including costs associated with meeting financial sponsors;

•	transfer agent, dividend agent and custodial fees and expenses;

•	U.S. federal and state registration and franchise fees;

•	all costs of registration and listing our shares on any securities exchange;

•	U.S. federal, state and local taxes;

•	independent directors’ fees and expenses;

•	costs of preparing and filing reports or other documents required by the SEC or other regulators;

•	costs of any reports, proxy statements or other notices to stockholders, including printing costs;

•	costs associated with individual or group stockholders;

•	costs associated with compliance under the Sarbanes-Oxley Act;

•	our allocable portion of any fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums;

•	direct costs and expenses of administration, including printing, mailing, long distance telephone, copying, secretarial and other staff, independent auditors and outside legal costs;

•	proxy voting expenses; and

•	all other expenses incurred by us or the Administrator in connection with administering our business.

We expect our general and administrative expenses to be relatively stable or decline as a percentage of total assets during periods of asset growth and to increase during periods of asset declines.

GC Advisors, as collateral manager for Golub Capital BDC 2010-1 LLC, or the 2010 Issuer, our indirect subsidiary, under a collateral management agreement, or the 2010 Collateral Management Agreement, was entitled to receive an annual fee in an amount equal to 0.35% of the principal balance of the portfolio loans held by the 2010 Issuer at the beginning of the collection period relating to each payment date, which is payable in arrears on each payment date. Under the 2010 Collateral Management Agreement, the term ‘‘collection period’’ refers to a quarterly period running from the day after the end of the prior collection period to the fifth business day of the calendar month in which a payment date occurs. Following redemption of the notes issued by the 2010 Issuer, or the 2010 Notes, on July 20, 2018, the 2010 Collateral Management Agreement was terminated.

GC Advisors, as collateral manager for Golub Capital BDC CLO 2014 LLC, or the 2014 Issuer, our wholly-owned subsidiary, under a collateral management agreement, or the 2014 Collateral Management Agreement, is entitled to receive an annual fee in an amount equal to 0.25% of the principal balance of the portfolio loans held by the 2014 Issuer at the beginning of the collection period relating to each payment date, which is payable in arrears on each payment date. Under the 2014 Collateral Management Agreement, the term ‘‘collection period’’ refers to a quarterly period running from the day after the end of the prior collection period to the tenth business day prior to the payment date.

Collateral management fees are paid directly by the 2010 Issuer and the 2014 Issuer to GC Advisors and offset against the management fees payable under the Investment Advisory Agreement. In addition, the 2010 Issuer and 2014 Issuer paid Wells Fargo Securities, LLC structuring and placement fees for its services in connection with the initial structuring and subsequent amendments of a $350.0 million term debt securitization, or the 2010 Debt Securitization and the initial structuring of a $402.6 million term debt securitization, or the 2014 Debt Securitization and, together with the 2010 Debt Securitization, the Debt Securitizations. Term debt securitizations are also known as collateralized loan obligations and are a form of secured financing

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incurred by us, which is consolidated by us and subject to our overall asset coverage requirement. The 2010 Issuer and 2014 Issuer also agreed to pay ongoing administrative expenses to the trustee, collateral manager, independent accountants, legal counsel, rating agencies and independent managers in connection with developing and maintaining reports, and providing required services in connection with the administration of the 2010 Debt Securitization and the 2014 Debt Securitization, as applicable.

We believe that these administrative expenses approximate the amount of ongoing fees and expenses that we would be required to pay in connection with a traditional secured credit facility. Our common stockholders indirectly bear all of these expenses.

Recent Developments

On August 7, 2018, our board of directors declared a quarterly distribution of $0.32 per share payable on September 28, 2018 to holders of record as of September 7, 2018.

On July 20, 2018, the 2010 Issuer entered into a credit facility, or the MS Credit Facility, with Morgan Stanley Bank, N.A., as lender, Morgan Stanley Senior Secured Funding, Inc., as administrative agent, and U.S. Bank National Association, as collateral agent for the administrative agent and the lenders, which permits up to $300 million in borrowings at any one time outstanding. The period through January 18, 2019 is referred to as the revolving period and during such revolving period the 2010 Issuer may request drawdowns under the MS Credit Facility. During the period prior to the last day of the revolving period, borrowings under the MS Credit Facility will bear interest at a rate equal to the one-month London Interbank Offered Rate, or LIBOR, plus 1.90%. Commencing on the last day of the revolving period, the interest rate on borrowings under the MS Credit Facility will reset to one-month LIBOR plus 2.15% for the remaining term of the MS Credit Facility. The scheduled maturity date of the MS Credit Facility is March 20, 2019.

The MS Credit Facility is secured by all of the assets held by the 2010 Issuer. Pursuant to a collateral management agreement, the GC Advisors has agreed to perform certain duties with respect to the purchase and management of the assets securing the MS Credit Facility. GC Advisors will not be paid a fee for such services under the collateral management agreement, but will be reimbursed for expenses incurred in the performance of such obligations other than any ordinary overhead expenses, which shall not be reimbursed. The 2010 Issuer made customary representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities. Borrowing under the MS Credit Facility is subject to the leverage restrictions contained in the Investment Company Act of 1940, as amended.

In connection with entry into the MS Credit Facility, on July 20, 2018, the 2010 Issuer redeemed the outstanding 2010 Notes pursuant to the terms of the indenture governing such 2010 Notes. Following such redemption, the agreements governing the 2010 Debt Securitization were terminated.

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Consolidated Results of Operations

Consolidated operating results for the three and nine months ended June 30, 2018 and 2017 are as follows:

	For the three months ended June 30,								Variances				For the nine months ended June 30,								Variances
	2018				2017				2018 vs. 2017				2018				2017				2018 vs. 2017
	(In thousands)												(In thousands)
Interest income	$	33,527			$	30,080			$	3,447			$	96,180			$	88,469			$	7,711
Income from accretion of discounts and origination fees	2,350				3,169				(819		)		7,420				6,792				628
Interest and dividend income from investments in SLF(1)	2,050				891				1,159				5,868				5,693				175
Dividend income	10				278				(268		)		620				438				182
Fee income	459				990				(531		)		1,655				1,422				233
Total investment income	38,396				35,408				2,988				111,743				102,814				8,929
Total expenses	19,680				17,600				2,080				55,988				51,489				4,499
Net investment income - before excise tax	18,716				17,808				908				55,755				51,325				4,430
Excise tax	—				—				—				—				17				(17		)
Net investment income - after excise tax	18,716				17,808				908				55,755				51,308				4,447
Net realized gain (loss) on investments and foreign currency transactions	14,839				(3,209		)		18,048				14,702				(1,616		)		16,318
Net change in unrealized appreciation (depreciation) on investments, foreign currency translation and secured borrowings	(11,835		)		5,512				(17,347		)		(4,390		)		10,143				(14,533		)
Net increase in net assets resulting from    operations	$	21,720			$	20,111			$	1,609			$	66,067			$	59,835			$	6,232
Average earning debt investments, at fair value(2)	$	1,599,024			$	1,579,961			$	19,063			$	1,591,820			$	1,546,012			$	45,808
Average investments in subordinated notes of SLF,    at fair value	—				—				—				—				25,760				(25,760		)
Average earning portfolio company    investments, at fair value(2)	$	1,599,024			$	1,579,961			$	19,063			$	1,591,820			$	1,571,772			$	20,048

(1)	The investments in SLF include our investments in LLC equity interests in SLF for the three and nine months ended June 30, 2018 and the three months ended June 30, 2017. For the nine months ended June 30, 2017, the investments in SLF include our investments in both subordinated notes (prior to their redemption by SLF on December 30, 2016) and LLC equity interests in SLF.

(2)	Does not include our investment in LLC equity interests in SLF.

Net income can vary substantially from period to period for various reasons, including the recognition of realized gains and losses and unrealized appreciation and depreciation. As a result, quarterly comparisons of net income may not be meaningful.

Investment Income

Investment income increased from the three months ended June 30, 2017 to the three months ended June 30, 2018 by $3.0 million primarily as a result of an increase in the average earning debt investments balance, which is the average balance of accruing loans in our investment portfolio, of $19.1 million and an increase in LIBOR as well as an increase in income from our investments in SLF. These increases were partially offset by a decline in accretion of discounts resulting from decreased debt investment payoffs and a decline in prepayment fee income.

Investment income increased from the nine months ended June 30, 2017 to the nine months ended June 30, 2018 by $8.9 million primarily as a result of an increase in the average earning debt investment balance of $20.0 million and an increase in LIBOR, as well as increased prepayment fee income and accretion of discounts resulting from increased debt investment payoffs.

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The annualized income yield by debt security type for the three and nine months ended June 30, 2018 and 2017 was as follows:

	For the three months ended June 30,				For the nine months ended June 30,
	2018		2017		2018		2017
Senior secured	7.2%		6.4%		6.5%		6.3%
One stop	8.7%		8.0%		8.5%		7.9%
Second lien	10.5%		9.9%		9.9%		10.5%
Subordinated debt	20.4%		8.5%		20.0%		8.0%
Subordinated notes in SLF(1)	N/A		N/A		N/A		8.5%

(1)	SLF’s proceeds from the subordinated notes were utilized by SLF to invest in senior secured loans. SLF redeemed the outstanding balance on the subordinated notes on December 30, 2016.

Annualized income yields on one stop and senior secured loans increased for the three and nine months ended June 30, 2018 primarily due to the rise in LIBOR. As of June 30, 2018, we have one second lien investment and two subordinated debt investments as shown in the Consolidated Schedule of Investments. Due to the limited number of second lien and subordinated debt investments, quarterly income yields on second lien and subordinated debt investments can be significantly impacted by the addition, subtraction or refinancing of one investment. The increase in the annualized income yield on second lien investments for the three months ended June 30, 2018 was driven by the rise in LIBOR. The decrease in the annualized income yield on second lien investments for the nine months ended June 30, 2018 was driven by the payoff on higher yielding second lien investments. The increase in the annualized income yield on subordinated debt investments for the three and nine months ended June 30, 2018 was driven by the payoff of a lower yielding subordinated debt investment.

For additional details on investment yields and asset mix, refer to the “Liquidity and Capital Resources - Portfolio Composition, Investment Activity and Yield” section below.

Expenses

The following table summarizes our expenses for the three and nine months ended June 30, 2018 and 2017:

		For the three months ended June 30,								Variances				For the nine months ended June 30,								Variances
		2018				2017				2018 vs. 2017				2018				2017				2018 vs. 2017
		(In thousands)												(In thousands)
Interest and other debt financing expenses		$	7,749			$	7,256			$	493			$	21,934			$	20,891			$	1,043
Amortization of debt issuance costs		807				843				(36		)		2,242				2,488				(246		)
Base management fee		6,125				6,059				66				17,984				17,744				240
Income incentive fee		2,832				1,485				1,347				7,181				4,300				2,881
Capital gain incentive fee		741				588				153				2,274				1,974				300
Professional fees		705				638				67				2,168				1,935				233
Administrative service fee		601				595				6				1,840				1,720				120
General and administrative expenses		120				136				(16		)		365				437				(72		)
Total expenses		$	19,680			$	17,600			$	2,080			$	55,988			$	51,489			$	4,499
Average debt outstanding(1)		$	835,120			$	883,681			$	(48,561	)		$	817,405			$	883,018			$	(65,613	)

(1)

For the three and nine months ended June 30, 2018, there were no secured borrowings outstanding. For the three and nine months ended June 30, 2017, we have excluded $0.4 million of secured borrowings, at fair value, which were the result of participations and partial loan sales that did not meet the definition of a “participating interest”, as defined in the guidance to Accounting Standards Codification, or ASC, Topic 860 — Transfers and Servicing, or ASC Topic 860.

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Interest Expense

Interest and other debt financing expenses increased by $0.5 million from the three months ended June 30, 2017 to the three months ended June 30, 2018 primarily due to the increase in LIBOR which was partially offset by a decrease in the weighted average of outstanding borrowings from $883.7 million for the three months ended June 30, 2017 to $835.1 million for the three months ended June 30, 2018. The decrease in our debt was primarily driven by a decrease in the weighted average of outstanding borrowings on our amended and restated senior secured revolving credit facility that Golub Capital BDC Funding LLC, or Funding, our wholly-owned subsidiary, originally entered into on July 21, 2011, as most recently amended on December 14, 2017, with Wells Fargo Securities, LLC, as administrative agent, and Wells Fargo Bank, N.A., as lender and collateral agent, or the Credit Facility, from $149.5 million to $102.3 million. The effective annualized average interest rate on our outstanding debt increased to 4.1% for the three months ended June 30, 2018 from 3.7% for the three months ended June 30, 2017 primarily due to the increase in LIBOR.

Interest and other debt financing expenses increased by $1.0 million from the nine months ended June 30, 2017 to the nine months ended June 30, 2018 primarily due to the increase in LIBOR which was partially offset by a decrease in the weighted average of outstanding borrowings from $883.0 million for the nine months ended June 30, 2017 to $817.4 million for the nine months ended June 30, 2018. The effective annualized average interest rate on our outstanding debt increased to 4.0% for the nine months ended June 30, 2018 from 3.5% for the nine months ended June 30, 2017 primarily due to the increase in LIBOR.

Management Fee

The base management fee remained stable from the three and nine months ended June 30, 2017 to the three and nine months ended June 30, 2018.

Incentive Fees

The incentive fee payable under the Investment Advisory Agreement consists of two parts: (1) the income component, or the Income Incentive Fee, and (2) the capital gains component, or the Capital Gain Incentive Fee. The Income Incentive Fee increased by $1.3 million and $2.9 million from the three and nine months ended June 30, 2017 to the three and nine months ended June 30, 2018, respectively, primarily as a result of the increase in net investment income. This resulted in an increase in the rate of return on the value of our net assets for the three and nine months ended June 30, 2018. For the three months ended June 30, 2018, while still not fully through the catch-up provision of the Income Incentive Fee calculation, the Income Incentive Fee as a percentage of Pre-Incentive Fee Net Investment Income (as defined in Note 4 to our consolidated financial statements) increased to 12.7% compared to 7.5% for the three months ended June 30, 2017. For the nine months ended June 30, 2018, while still not fully through the catch-up provision of the Income Incentive Fee calculation, the Income Incentive Fee as a percentage of Pre-Incentive Fee Net Investment Income increased to 11.0% compared to 7.5% for the nine months ended June 30, 2017.

The Capital Gain Incentive Fee equals (a) 20.0% of our Capital Gain Incentive Fee Base (as defined below), if any, calculated in arrears as of the end of each calendar year less (b) the aggregate amount of any previously paid Capital Gain Incentive Fees. Our “Capital Gain Incentive Fee Base” equals (1) the sum of (i) realized capital gains, if any, on a cumulative positive basis from the date the we elected to become a business development company through the end of each calendar year, (ii) all realized capital losses on a cumulative basis and (iii) all unrealized capital depreciation on a cumulative basis less (2) all unamortized deferred financing costs, if and to the extent such costs exceed all unrealized capital appreciation on a cumulative basis.  In addition, in accordance with generally accepted accounting principles in the United States of America, or GAAP, we are required to also include the aggregate unrealized capital appreciation on investments in the calculation and accrue the capital gain incentive fee as if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Advisory Agreement. 

The accrual for capital gain incentive fee under GAAP was $0.7 million, or $0.02 per share, and $2.3 million, or $0.04 per share, for the three and nine months ended June 30, 2018, respectively. The accrual for capital gain incentive fee under GAAP was $0.6 million, or $0.01 per share, and $2.0 million, or $0.04 per share, for the three and nine months ended June 30, 2017, respectively. For additional details on unrealized appreciation and depreciation of investments, refer to the “Net Realized and Unrealized Gains and Losses” section below.

The capital gain incentive fee accrual which was calculated in accordance with GAAP as of June 30, 2018 and 2017 was $8.0 million and $6.9 million, respectively, of which $2.6 million and $0.4 million, respectively, were payable as a Capital Gain Incentive Fee pursuant to the Investment Advisory Agreement. Any payment due under the terms of the Investment Advisory Agreement is calculated in arrears at the end of each calendar year, and we paid a $1.2 million Capital Gain Incentive Fee

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calculated in accordance with the Investment Advisory Agreement as of December 31, 2017. The Company did not pay any Capital Gain Incentive Fee calculated under the Investment Advisory Agreement as of any date prior to December 31, 2017.

Professional Fees, Administrative Service Fee, and General and Administrative Expenses

In total, professional fees, the administrative service fee, and general and administrative expenses remained stable from the three months ended June 30, 2017 to the three months ended June 30, 2018 and increased by $0.3 million from the nine months ended June 30, 2017 to the nine months ended June 30, 2018. In general, we expect certain of our operating expenses, including professional fees, the administrative service fee, and other general and administrative expenses to decline as a percentage of our total assets during periods of growth and increase as a percentage of our total assets during periods of asset declines.

The Administrator pays for certain expenses incurred by us. These expenses are subsequently reimbursed in cash. Total expenses reimbursed by us to the Administrator for the three and nine months ended June 30, 2018 were $0.4 million and $1.7 million, respectively. Total expenses reimbursed by us to the Administrator for the three and nine months ended June 30, 2017 were $0.4 million and $1.7 million, respectively.

As of June 30, 2018 and September 30, 2017, included in accounts payable and accrued expenses were $0.7 million and $0.8 million, respectively, for accrued expenses paid on behalf of us by the Administrator.

Excise Tax Expense

We have elected to be treated as a RIC under Subchapter M of the Code and operate in a manner so as to qualify for the tax treatment applicable to RICs. In order to be subject to tax as a RIC, we are required to meet certain source of income and asset diversification requirements, as well as timely distribute to our stockholders dividends for U.S. federal income tax purposes of an amount generally at least equal to 90% of investment company taxable income, as defined by the Code, and determined without regard to any deduction for dividends paid for each tax year. We have made and intend to continue to make the requisite distributions to our stockholders that will generally relieve us from U.S. federal income taxes.

Depending on the level of taxable income earned in a tax year, we may choose to retain taxable income in excess of current year distributions into the next tax year in an amount less than what would trigger payments of U.S. federal income tax under Subchapter M of the Code. We may then be required to incur a 4% excise tax on such income. To the extent that we determine that our estimated current year annual taxable income may exceed estimated current year distributions, we accrue excise tax, if any, on estimated excess taxable income as taxable income is earned. For the three and nine months ended June 30, 2018, we did not incur a net expense for U.S. federal excise tax. For the three and nine months ended June 30, 2017, we incurred a net expense of $0 and $17,000, respectively, for U.S. federal excise tax.

Net Realized and Unrealized Gains and Losses

The following table summarizes our net realized and unrealized gains (losses) for the periods presented:

	For the three months ended June 30,								Variances				For the nine months ended June 30,								Variances
	2018				2017				2018 vs. 2017				2018				2017				2018 vs. 2017
	(In thousands)												(In thousands)
Net realized gain (loss) on investments	$	14,881			$	(3,209	)		$	18,090			$	14,744			$	(1,616	)		$	16,360
Foreign currency transactions	(42		)		—				(42		)		(42		)		—				(42		)
Net realized gain (loss) on investments and foreign currency transactions	$	14,839			$	(3,209	)		$	18,048			$	14,702			$	(1,616	)		$	16,318
Unrealized appreciation on investments	10,756				19,206				(8,450		)		23,003				28,465				(5,462		)
Unrealized (depreciation) on investments	(22,102		)		(13,793		)		(8,309		)		(26,968		)		(18,494		)		(8,474		)
Unrealized appreciation on investments in SLF(1)	—				99				(99		)		—				171				(171		)
Unrealized (depreciation) on investments in SLF(2)	(575		)		—				(575		)		(511		)		—				(511		)
Unrealized appreciation on secured borrowings	—				—				—				—				1				(1		)
Unrealized appreciation on foreign currency translation	86				—				86				86				—				86
Net change in unrealized appreciation (depreciation) on investments, investments in SLF, secured borrowings and foreign currency	$	(11,835	)		$	5,512			$	(17,347	)		$	(4,390	)		$	10,143			$	(14,533	)

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(1)	Unrealized appreciation on investments in SLF includes our investment in LLC equity interests in SLF.

(2)	Unrealized (depreciation) on investments in SLF includes our investment in LLC equity interests in SLF.

For the three months ended June 30, 2018, we had a net realized gain on investments and foreign currency transactions of $14.8 million primarily due to sale of equity investments in seven portfolio companies, which was substantially greater than in recent periods. For the nine months ended June 30, 2018, we had a net realized gain on investments and foreign currency transactions of $14.7 million primarily due to sale of equity investments in seven portfolio companies and the sale of portfolio company investments to SLF, which was partially offset by the write off of one non-accrual portfolio company investment.

For the three months ended June 30, 2018, we had $10.8 million in unrealized appreciation on 112 portfolio company investments, which was offset by $22.1 million in unrealized depreciation on 161 portfolio company investments. For the nine months ended June 30, 2018, we had $23.0 million in unrealized appreciation on 146 portfolio company investments, which was offset by $27.0 million in unrealized depreciation on 161 portfolio company investments. Unrealized appreciation during the three and nine months ended June 30, 2018 resulted from an increase in fair value primarily due to the rise in market prices of portfolio company investments. Unrealized depreciation primarily resulted from the reversal of the net unrealized appreciation associated with the sales of portfolio company investments, the amortization of discounts, and negative credit related adjustments that caused a reduction in fair value during the three and nine months ended June 30, 2018.

For the three and nine months ended June 30, 2018, we had $0.6 million and $0.5 million, respectively, in unrealized depreciation on our investment in SLF LLC equity interests, which was primarily driven by net negative credit related adjustments associated with SLF's investment portfolio.

For the three months ended June 30, 2017, we had a net realized loss of $3.2 million primarily due to the sale of a debt and equity investment in a single portfolio company, which was partially offset by the gain on the sale of five equity investments. For the nine months ended June 30, 2017, we had a net realized loss of $1.6 million primarily due to the sale of a debt and equity investment in a single portfolio company, which was partially offset by the net realized gains on the sale of portfolio company investments to SLF and the sale of eight equity investments.

For the three months ended June 30, 2017, we had $19.2 million in unrealized appreciation on 118 portfolio company investments, which was partially offset by $13.8 million in unrealized depreciation on 154 portfolio company investments. For the nine months ended June 30, 2017, we had $28.5 million in unrealized appreciation on 144 portfolio company investments, which was partially offset by $18.5 million in unrealized depreciation on 147 portfolio company investments. Unrealized appreciation during the three and nine months ended June 30, 2017 resulted from an increase in fair value primarily due to the rise in market prices of portfolio company investments. Unrealized depreciation primarily resulted from the amortization of discounts, negative credit related adjustments that caused a reduction in fair value and the reversal of the net unrealized appreciation associated with the sales of portfolio company investments during the three and nine months ended June 30, 2017.

For the three and nine months ended June 30, 2017, we had $0.1 million and $0.2 million, respectively, in unrealized appreciation on our investment in SLF LLC equity interests, which was primarily driven by stable net investment income that was partially offset by net negative credit related adjustments associated with SLF's investment portfolio.

Liquidity and Capital Resources

For the nine months ended June 30, 2018, we experienced a net increase in cash, cash equivalents, foreign currencies and restricted cash and cash equivalents of $9.6 million. During the period, cash used in operating activities was $38.9 million, primarily as a result of fundings of portfolio investments of $464.2 million, partially offset by the proceeds from principal payments and sales of portfolio investments of $364.8 million and net investment income of $55.8 million. Lastly, cash provided by financing activities was $48.6 million, primarily driven by borrowings on debt of $414.8 million that were partially offset by repayments of debt of $320.0 million and distributions paid of $54.7 million.

For the nine months ended June 30, 2017, we experienced a net decrease in cash and cash equivalents and restricted cash and cash equivalents of $43.7 million. During the period, cash used in operating activities was $70.7 million, primarily as a result of fundings of portfolio investments of $461.8 million, partially offset by the proceeds from principal payments and sales of portfolio investments of $336.5 million and net investment income of $51.3 million. Lastly, cash provided by financing activities was $27.0 million, primarily driven by borrowings on debt of $419.4 million and proceeds from shares sold of $69.9 million that were partially offset by repayments of debt of $400.7 million and distributions paid of $59.9 million.

As of June 30, 2018 and September 30, 2017, we had cash and cash equivalents of $6.8 million and $4.0 million, respectively. In addition, we had foreign currencies of $0.1 million as of June 30, 2018 and restricted cash and cash equivalents of $65.3

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million and $58.6 million as of June 30, 2018 and September 30, 2017, respectively. Cash and cash equivalents are available to fund new investments, pay operating expenses and pay distributions. As of June 30, 2018, $53.9 million of our restricted cash and cash equivalents could be used to fund new investments that meet the investment guidelines established in the Debt Securitizations, which are described in further detail in Note 6 to our consolidated financial statements, and for the payment of principal and interest expense on the notes issued in the Debt Securitizations. As of June 30, 2018, $5.2 million of our restricted cash and cash equivalents could be used to fund investments that meet the guidelines under the Credit Facility as well as for the payment of interest expense and revolving debt of the Credit Facility. As of June 30, 2018, $6.2 million of our restricted cash and cash equivalents could be used to fund new investments that meet the regulatory and investment guidelines established by the U.S. Small Business Administration, or SBA, for our small business investment company, or SBIC, subsidiaries which are described in further detail in Note 6 to our consolidated financial statements, and for interest expense and fees on our outstanding SBA debentures.

As of June 30, 2018, the Credit Facility allowed Funding to borrow up to $170.0 million at any one time outstanding, subject to leverage and borrowing base restrictions. As of June 30, 2018 and September 30, 2017, we had $147.5 million and $63.1 million outstanding under the Credit Facility, respectively. As of June 30, 2018 and September 30, 2017, subject to leverage and borrowing base restrictions, we had approximately $22.6 million and $161.9 million, respectively, of remaining commitments and $22.6 million and $95.0 million, respectively, of availability on the Credit Facility.

On June 22, 2016, we entered into an unsecured revolving credit facility with GC Advisors, or the Adviser Revolver, which permits us to borrow up to $20.0 million at any one time outstanding. We entered into the Adviser Revolver in order to have the ability to borrow funds on a short-term basis and have in the past repaid, and generally intend in the future to repay, borrowings under the Adviser Revolver within the same quarter in which they are drawn. As of June 30, 2018 and September 30, 2017, we had no amounts outstanding on the Adviser Revolver.

On July 16, 2010, we completed the 2010 Debt Securitization, which was subsequently increased to $350.0 million. On October 20, 2016, we further amended the 2010 Debt Securitization to, among other things, (a) refinance the issued Class A 2010 Notes, by redeeming in full the $203.0 million Class A 2010 Notes and issuing new Class A-Refi 2010 Notes in an aggregate principal amount of $205.0 million that bear interest at a rate of three-month LIBOR plus 1.90%, (b) refinance the Class B 2010 Notes by redeeming in full the $12.0 million Class B 2010 Notes and issuing new Class B-Refi 2010 Notes in an aggregate principal amount of $10.0 million that bear interest at a rate of three-month LIBOR plus 2.40%, and (c) extend the reinvestment period applicable to the 2010 Issuer to July 20, 2018. Following the refinancing, Golub Capital BDC 2010-1 Holdings LLC, our wholly-owned subsidiary, or Holdings, retained the Class B-Refi 2010 Notes.

As of June 30, 2018 and September 30, 2017, the 2010 Notes consisted of $205.0 million of Class A-Refi 2010 Notes, which bore interest at a rate of three-month LIBOR plus 1.90%, $10.0 million of Class B-Refi 2010 Notes, which bore interest at a rate of three-month LIBOR plus 2.40%, and $135.0 million face amount of Subordinated 2010 Notes that did not bear interest. The Class A-Refi 2010 Notes are included in the June 30, 2018 and September 30, 2017 Consolidated Statements of Financial Condition as our debt and the Class B-Refi 2010 Notes and Subordinated 2010 Notes were eliminated in consolidation. As of June 30, 2018 and September 30, 2017, we had outstanding debt under the 2010 Debt Securitization of $205.0 million. On July 20, 2018, the 2010 Notes were redeemed and, following such redemption, the agreements governing the 2010 Debt Securitization were terminated.

On June 5, 2014, we completed the 2014 Debt Securitization in which the 2014 Issuer issued an aggregate of $402.6 million of notes, or the 2014 Notes, including, prior to their redemption on March 23, 2018, $191.0 million of Class A-1 2014 Notes, which bore interest at a rate of three-month LIBOR plus 1.75%, $20.0 million of Class A-2 2014 Notes, which bore interest at a rate of three-month LIBOR plus 1.95%, $35.0 million of Class B 2014 Notes, which bore interest at a rate of three-month LIBOR plus 2.50%, $37.5 million of Class C 2014 Notes, which bore interest at a rate of three-month LIBOR plus 3.50%, and $119.1 million of LLC equity interests in the 2014 Issuer that do not bear interest. We retained all of the Class C 2014 Notes and LLC equity interests in the 2014 Issuer totaling $37.5 million and $119.1 million, respectively. On March 23, 2018, we amended the 2014 Debt Securitization to, among other things, (a) refinance the issued Class A-1 notes issued by the 2014 Issuer by redeeming in full the $191.0 million of Class A-1 2014 Notes and issuing new Class A-1-R 2014 Notes in an aggregate principal amount of $191.0 million that bear interest at a rate of three-month LIBOR plus 0.95%, which is a decrease from the rate of three-month LIBOR plus 1.75% of the previously outstanding Class A-1 2014 Notes, (b) refinance the Class A-2 2014 Notes by redeeming in full the $20.0 million of Class A-2 2014 Notes and issuing new Class A-2-R 2014 Notes in an aggregate principal amount of $20.0 million that bear interest at a rate of three-month LIBOR plus 0.95%, which is a decrease from the rate of three-month LIBOR plus 1.95% of the previously outstanding Class A-2 2014 Notes, (c) refinance the Class B 2014 Notes by redeeming in full the $35.0 million of Class B 2014 Notes and issuing new Class B-R 2014 Notes in an aggregate principal amount of $35.0 million that bear interest at a rate of three-month LIBOR plus 1.40%, which is a decrease from the rate of three-month LIBOR plus 2.50% of the previously outstanding Class B 2014 Notes, (d) refinance the Class C

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2014 Notes by redeeming in full the $37.5 million of Class C 2014 Notes and issuing new Class C-R 2014 Notes in an aggregate principal amount of $37.5 million that bear interest at a rate of three-month LIBOR plus 1.55%, which is a decrease from the rate of three-month LIBOR plus 3.50% of the previously outstanding Class C 2014 Notes. The Class C-R 2014 Notes were retained by us, and we remain the sole owner of the equity of the 2014 Issuer.

The Class A-1-R, Class A-2-R and Class B-R 2014 Notes are included in the June 30, 2018 Consolidated Statements of Financial Condition as our debt and the Class C-R 2014 Notes and LLC equity interests in the 2014 Issuer were eliminated in consolidation. As of June 30, 2018, we had outstanding debt under the 2014 Debt Securitization of $246.0 million. The Class A-1, Class A-2 and Class B 2014 Notes are included in the September 30, 2017 Consolidated Statements of Financial Condition as our debt and the Class C 2014 Notes and LLC equity interests in the 2014 Issuer were eliminated in consolidation. As of September 30, 2017, we had outstanding debt under the 2014 Debt Securitization of $246.0 million.

Under present SBIC regulations, the maximum amount of SBA-guaranteed debentures that may be issued by multiple licensees under common management is $350.0 million and the maximum amount that a single SBIC licensee may issue is $150.0 million. As of June 30, 2018, GC SBIC IV, L.P., or SBIC IV, GC SBIC V, L.P., or SBIC V, and GC SBIC VI, L.P., or SBIC VI, had $115.0 million, $150.0 million, and $12.5 million, respectively, of outstanding SBA-guaranteed debentures that mature between September 2021 and March 2028 leaving incremental borrowing capacity of $72.5 million under present SBIC regulations. As of September 30, 2017, SBIC IV, SBIC V and SBIC VI had $125.0 million, $133.0 million and $9.0 million, respectively, of outstanding SBA-guaranteed debentures that mature between September 2021 and September 2027.

In accordance with the 1940 Act, with certain limited exceptions, we are currently allowed to borrow amounts such that our asset coverage, as defined in the 1940 Act, is at least 200% after such borrowing. The Small Business Credit Availability Act, or SBCAA, which was signed into law on March 23, 2018, among other things, amended Section 61(a) of the 1940 Act to add a new Section 61(a)(2) that reduces the asset coverage requirement applicable to business development companies from 200% to 150% so long as the business development company meets certain disclosure requirements and obtains certain approvals. The reduced asset coverage requirement would permit a business development company to have a ratio of total consolidated assets to outstanding indebtedness of 2:1 as compared to a maximum of 1:1 under the 200% asset coverage requirement. Effectiveness of the reduced asset coverage requirement to a business development company requires approval by either (1) a “required majority,” as defined in Section 57(o) of the 1940 Act, of such business development company’s board of directors with effectiveness one year after the date of such approval or (2) a majority of votes cast at a special or annual meeting of such business development company’s stockholders at which a quorum is present, which is effective the day after such stockholder approval. We are still evaluating the merits of operating with a higher leverage ratio, and have not sought or obtained either approval and, as a result, remain subject to the 200% asset coverage requirement under Section 61(a)(1) of the 1940 Act.

On September 13, 2011, we received exemptive relief from the SEC allowing us to modify the asset coverage requirement to exclude the SBA debentures from our asset coverage calculation. As such, our ratio of total consolidated assets to outstanding indebtedness may be less than 200% even if we do not approve the modified asset coverage requirement permitted by Section 61(a)(2) of the 1940 Act. This provides us with increased investment flexibility but also increases our risks related to leverage. As of June 30, 2018, our asset coverage for borrowed amounts was 258.5% (excluding the SBA debentures).

As of June 30, 2018 and September 30, 2017, we had outstanding commitments to fund investments, excluding our investments in SLF, totaling $58.8 million and $60.5 million, respectively. These amounts may or may not be funded to the borrowing party now or in the future. The unfunded commitments relate to loans with various maturity dates, but the entire amount was eligible for funding to the borrowers, subject to the terms of each loan’s respective credit agreement. As of June 30, 2018, we believe that we had sufficient assets and liquidity to adequately cover future obligations under our unfunded commitments based on historical rates of drawings upon unfunded commitments, cash and restricted cash balances that we maintain, availability under our Credit Facility and Adviser Revolver and ongoing principal repayments on debt investments. In addition, we generally hold some syndicated loans in larger portfolio companies that are saleable over a relatively short period to generate cash.

Due to the interplay of the 1940 Act restrictions on principal and joint transactions and the U.S. risk retention rules adopted pursuant to Section 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or Dodd-Frank, as a business development company we may be unable to enter into certain types of securitization transactions.  We have requested no action relief from the SEC that, if granted, would permit us to once again utilize securitizations in which assets are transferred through GC Advisors, but we cannot provide assurance that the SEC or any other regulatory authority will grant our request, which would permit us to enter into certain types of securitization transactions, on a timely basis or at all. The reinvestment period for the 2010 Debt Securitization expired on July 20, 2018 and on such date we redeemed the 2010 Notes and terminated the 2010 Debt Securitization. In connection with these actions, we entered into the MS Credit Facility which permits up to $300.0 million in borrowings at any one time outstanding.  As the reinvestment period for our 2014 Debt Securitization expired on

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April 28, 2018, we are continuing to explore expanding our secured debt financing facilities, including through an expansion of our Credit Facility.

Although we expect to fund the growth of our investment portfolio through the net proceeds from future securities offerings and through our DRIP as well as future borrowings, to the extent permitted by the 1940 Act, we cannot assure you that our efforts to raise capital will be successful. In addition, we may, from time to time, amend or refinance our leverage facilities and securitization financings, to the extent permitted by applicable law. In addition to capital not being available, it also may not be available on favorable terms. To the extent we are not able to raise capital on what we believe are favorable terms, we will focus on optimizing returns by investing capital generated from repayments into new investments we believe are attractive from a risk/reward perspective. Furthermore, to the extent we are not able to raise capital and are at or near our targeted leverage ratios, we may receive smaller allocations, if any, on new investment opportunities under GC Advisors’ allocation policy and have, in the past, received such smaller allocations under similar circumstances.

Portfolio Composition, Investment Activity and Yield

As of June 30, 2018 and September 30, 2017, we had investments in 192 and 185 portfolio companies, respectively, with a total fair value of $1,705.9 million and $1,590.0 million, respectively, and had investments in SLF with a total fair value of $92.6 million and $95.0 million, respectively.

The following table shows the asset mix of our new investment commitments for the three and nine months ended June 30, 2018 and 2017:

	For the three months ended June 30,														For the nine months ended June 30,
	2018							2017							2018							2017
	(In thousands)				Percentage of Commitments			(In thousands)				Percentage of Commitments			(In thousands)				Percentage of Commitments			(In thousands)				Percentage of Commitments
Senior secured	$	23,414			11.8	%		$	27,678			11.5	%		$	89,295			18.6	%		$	111,015			23.6	%
One stop	170,496				85.9			212,465				87.8			379,586				79.1			338,457				71.9
Second lien	—				—			—				—			—				—			—				—
Subordinated debt	184				0.1			—				—			184				0.0	*		12				0.0	*
Subordinated notes in SLF(1)	—				—			—				—			—				—			5,457				1.1
LLC equity interests in SLF(1)	2,625				1.3			—				—			6,737				1.4			12,542				2.7
Equity	1,754				0.9			1,795				0.7			4,387				0.9			3,162				0.7
Total new investment commitments	$	198,473			100.0	%		$	241,938			100.0	%		$	480,189			100.0	%		$	470,645			100.0	%

^* Represents an amount less than 0.1%.

(1)	SLF’s proceeds from the subordinated notes and LLC equity interests were utilized by SLF to invest in senior secured loans. As of June 30, 2018, SLF had investments in senior secured loans to 38 different borrowers.

For the three and nine months ended June 30, 2018, we had approximately $138.0 million and $333.5 million, respectively, in proceeds from principal payments and return of capital distributions of portfolio companies. For the three and nine months ended June 30, 2018, we had sales of investments in seven and seventeen portfolio companies, respectively, aggregating approximately $19.0 million and $31.3 million, respectively, in net proceeds.

For the three and nine months ended June 30, 2017, we had approximately $156.0 million and $241.0 million, excluding $78.7 million of proceeds from the repayment in full and termination of our investment in subordinated notes of SLF, respectively, in proceeds from principal payments and return of capital distributions of portfolio companies. For the three and nine months ended June 30, 2017, we had sales of investments in 9 and 28 portfolio companies, respectively, aggregating approximately $13.4 million and $95.5 million, respectively, in net proceeds.

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The following table shows the principal, amortized cost and fair value of our portfolio of investments by asset class:

	As of June 30, 2018(1)												As of September 30, 2017(1)
	Principal				Amortized Cost				Fair Value				Principal				Amortized Cost				Fair Value
	(In thousands)
Senior secured:
Performing	$	218,376			$	216,216			$	217,131			$	196,296			$	194,357			$	195,089
Non-accrual(2)	—				—				—				1,438				1,433				(60		)	(3)
One stop:
Performing	1,427,988				1,411,051				1,422,222				1,339,755				1,322,220				1,331,069
Non-accrual(2)	19,601				19,348				13,262				8,870				8,788				3,015
Second lien:
Performing	9,435				9,330				9,435				9,434				9,306				9,434
Non-accrual(2)	—				—				—				—				—				—
Subordinated debt:
Performing	247				247				247				59				59				59
Non-accrual(2)	—				—				—				—				—				—
LLC equity interests in SLF(4)	N/A				95,532				92,579				N/A				97,457				95,015
Equity	N/A				37,490				43,639				N/A				37,619				51,394
Total	$	1,675,647			$	1,789,214			$	1,798,515			$	1,555,852			$	1,671,239			$	1,685,015

(1)	23 and 19 of our loans included a feature permitting a portion of the interest due on such loan to be PIK interest as of June 30, 2018 and September 30, 2017, respectively.

(2)	We refer to a loan as non-accrual when we cease recognizing interest income on the loan because we have stopped pursuing repayment of the loan or, in certain circumstances, it is past due 90 days or more on principal and interest or our management has reasonable doubt that principal or interest will be collected. See “— Critical Accounting Policies — Revenue Recognition.”

(3)	The negative fair value is the result of the unfunded commitment being valued below par.

(4)	Proceeds from the LLC equity interests invested in SLF were utilized by SLF to invest in senior secured loans.

As of June 30, 2018, we had three debt investments on non-accrual status and non-accrual investments as a percentage of total investments at cost and fair value were 1.2% and 0.8%, respectively.  As of September 30, 2017, we had three debt investments on non-accrual status and non-accrual investments as a percentage of total investments at cost and fair value were 0.6% and 0.2%, respectively. As of June 30, 2018 and September 30, 2017, the fair value of our debt investments as a percentage of the outstanding principal value was 99.2% and 98.9%, respectively.

The following table shows the weighted average rate, spread over LIBOR of floating rate and fees of investments originated and the weighted average rate of sales and payoffs of portfolio companies during the three and nine months ended June 30, 2018 and 2017:

	For the three months ended June 30,				For the nine months ended June 30,
	2018		2017		2018		2017
Weighted average rate of new investment fundings(1)	7.8%		7.3%		7.9%		7.0%
Weighted average spread over LIBOR of new floating rate investment fundings(1)	5.7%		6.0%		6.0%		5.9%
Weighted average rate of new fixed rate investment fundings	8.0%		7.5%		9.6%		7.5%
Weighted average fees of new investment fundings	1.0%		1.6%		1.3%		1.5%
Weighted average rate of sales and payoffs of portfolio investments(1)(2)	8.2%		7.9%		7.9%		7.3%
Weighted average annualized income yield(3)(4)	8.5%		7.9%		8.2%		7.8%

(1)	Excludes our subordinated note investments in SLF, which were redeemed on December 30, 2016.

(2)	Excludes exits on investments on non-accrual status.

(3)	Represents income from interest, including subordinated notes in SLF, and fees, excluding amortization of capitalized fees and discounts, divided by the average fair value of earning debt investments, and does not represent a return to any investor in us.

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(4)	For the three and nine months ended June 30, 2018 and for the three months ended June 30, 2017, weighted average annualized income yield does not reflect interest income from subordinated notes in SLF, which were redeemed on December 30, 2016.

As of June 30, 2018, 99.5% and 99.5% of our debt portfolio at fair value and at amortized cost, respectively, had interest rate floors that limit the minimum applicable interest rates on such loans. As of September 30, 2017, 99.6% and 99.6% of our debt portfolio at fair value and at amortized cost, respectively, had interest rate floors that limit the minimum applicable interest rates on such loans.

As of June 30, 2018 and September 30, 2017, the portfolio median earnings before interest, taxes, depreciation and amortization, or EBITDA, for our portfolio companies (excluding SLF) was $26.0 million and $25.2 million, respectively. The portfolio median EBITDA is based on the most recently reported trailing twelve-month EBITDA received from the portfolio company.

As part of the monitoring process, GC Advisors regularly assesses the risk profile of each of our investments and rates each of them based on an internal system developed by Golub Capital and its affiliates. This system is not generally accepted in our industry or used by our competitors. It is based on the following categories, which we refer to as GC Advisors’ internal performance ratings:

Internal Performance Ratings
Rating		Definition
5		Involves the least amount of risk in our portfolio. The borrower is performing above expectations, and the trends and risk factors are generally favorable.
4		Involves an acceptable level of risk that is similar to the risk at the time of origination. The borrower is generally performing as expected, and the risk factors are neutral to favorable.
3		Involves a borrower performing below expectations and indicates that the loan’s risk has increased somewhat since origination. The borrower may be out of compliance with debt covenants; however, loan payments are generally not past due.
2		Involves a borrower performing materially below expectations and indicates that the loan’s risk has increased materially since origination. In addition to the borrower being generally out of compliance with debt covenants, loan payments may be past due (but generally not more than 180 days past due).
1		Involves a borrower performing substantially below expectations and indicates that the loan’s risk has substantially increased since origination. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. Loans rated 1 are not anticipated to be repaid in full and we will reduce the fair market value of the loan to the amount we anticipate will be recovered.

Our internal performance ratings do not constitute any rating of investments by a nationally recognized statistical rating organization or represent or reflect any third-party assessment of any of our investments.

For any investment rated 1, 2 or 3, GC Advisors will increase its monitoring intensity and prepare regular updates for the investment committee, summarizing current operating results and material impending events and suggesting recommended actions.

GC Advisors monitors and, when appropriate, changes the internal performance ratings assigned to each investment in our portfolio. In connection with our valuation process, GC Advisors and our board of directors review these internal performance ratings on a quarterly basis.

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The following table shows the distribution of our investments on the 1 to 5 internal performance rating scale at fair value as of June 30, 2018 and September 30, 2017:

		June 30, 2018							September 30, 2017
Internal Performance Rating		Investments at Fair Value (In thousands)				Percentage of Total Investments			Investments at Fair Value (In thousands)				Percentage of Total Investments
5		$	188,815			10.5	%		$	91,525			5.5	%
4		1,437,556				79.9			1,378,316				81.8
3		157,032				8.7			212,629				12.6
2		15,102				0.9			249				0.0*
1		10				0.0*			2,296				0.1
Total		$	1,798,515			100.0	%		$	1,685,015			100.0	%

*	Represents an amount less than 0.1%.

Senior Loan Fund LLC

We co-invest with RGA Reinsurance Company, or RGA, in senior secured loans through SLF, an unconsolidated Delaware LLC. SLF is capitalized as transactions are completed and all portfolio and investment decisions in respect to SLF must be approved by the SLF investment committee consisting of two representatives of each of us and RGA (with unanimous approval required from (i) one representative of each of us and RGA or (ii) both representatives of each of us and RGA). SLF may cease making new investments upon notification of either member but operations will continue until all investments have been sold or paid-off in the normal course of business.

As of June 30, 2018, SLF is capitalized by LLC equity interest subscriptions from its members. On December 14, 2016, the SLF investment committee approved the recapitalization of the commitments of SLF’s members. On December 30, 2016, SLF’s members entered into additional LLC equity interest subscriptions totaling $160.0 million, SLF issued capital calls totaling $89.9 million to us and RGA and the subordinated notes previously issued by SLF were redeemed and terminated. As of June 30, 2018 and September 30, 2017, we and RGA owned 87.5% and 12.5%, respectively, of the LLC equity interests. SLF’s profits and losses are allocated to us and RGA in accordance with our respective ownership interests.

As of June 30, 2018 and September 30, 2017, SLF had the following commitments from its members (in the aggregate):

	As of June 30, 2018								As of September 30, 2017
	Committed				Funded(1)				Committed				Funded(1)
	(In thousands)
LLC equity commitments	$	200,000			$	109,180			$	200,000			$	111,380
Total	$	200,000			$	109,180			$	200,000			$	111,380

(1)	Funded LLC equity commitments are presented net of return of capital distributions subject to recall.

As of June 30, 2018, the senior secured revolving credit facility, or, as amended, the SLF Credit Facility, that Senior Loan Fund II LLC, a wholly-owned subsidiary of SLF, or SLF II, entered into with Wells Fargo Securities, LLC, as administrative agent, and Wells Fargo Bank, N.A., as lender, allows SLF II to borrow up to $200.0 million subject to leverage and borrowing base restrictions. The reinvestment period of the SLF Credit Facility ends August 29, 2018, and the stated maturity date is August 30, 2020. As of June 30, 2018 and September 30, 2017, SLF II had outstanding debt under the SLF Credit Facility of $123.5 million and $197.7 million, respectively. Through the reinvestment period, the SLF Credit Facility bears interest at one-month LIBOR plus a rate between 1.75% and 2.15%, depending on the composition of the collateral asset portfolio, per annum.

As of June 30, 2018 and September 30, 2017, SLF had total assets at fair value of $229.8 million and $306.2 million, respectively. As of June 30, 2018, SLF did not have any portfolio companies on non-accrual status. As of September 30, 2017, SLF had one portfolio company investment on non-accrual status with a fair value of $0.3 million. The portfolio companies in SLF are in industries and geographies similar to those in which we may invest directly. Additionally, as of June 30, 2018 and

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September 30, 2017, SLF had commitments to fund various undrawn revolving credit and delayed draw loans to its portfolio companies totaling $9.6 million and $13.3 million, respectively.

Below is a summary of SLF’s portfolio, followed by a listing of the individual investments in SLF’s portfolio as of June 30, 2018 and September 30, 2017:

	As of June 30, 2018				As of September 30, 2017
	(Dollars in thousands)
Senior secured loans(1)	$	228,891			$	301,583
Weighted average current interest rate on senior secured loans(2)	7.6		%		6.4		%
Number of borrowers in SLF	38				50
Largest portfolio company investment(1)	$	13,750			$	13,820
Total of five largest portfolio company investments(1)	$	59,619			$	61,187

(1)	At principal amount.

(2)	Computed as the (a) annual stated interest rate on accruing senior secured loans divided by (b) total senior secured loans at principal amount.

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SLF Investment Portfolio as of June 30, 2018
Portfolio Company		Business Description		Investment Type		Maturity Date		Current Interest Rate(1)				Principal ($) / Shares(2)				Fair Value(3)
												(In thousands)
1A Smart Start LLC		Home and Office Furnishings, Housewares, and Durable Consumer		Senior loan		02/2022		6.8		%		$	2,079			$	2,086
1A Smart Start LLC (4)		Home and Office Furnishings, Housewares, and Durable Consumer		Senior loan		02/2022		6.6				924				926
Advanced Pain Management Holdings, Inc.,		Healthcare, Education and Childcare		Senior loan		08/2018		7.1				6,561				4,921
Advanced Pain Management Holdings, Inc.,		Healthcare, Education and Childcare		Senior loan		08/2018		7.1				449				337
Boot Barn, Inc.		Retail Stores		Senior loan		06/2021		6.8				9,533				9,533
Brandmuscle, Inc.		Printing and Publishing		Senior loan		12/2021		7.1				4,678				4,675
Captain D's, LLC (4)		Personal, Food and Miscellaneous Services		Senior loan		12/2023		6.6				2,505				2,505
Captain D's, LLC (4)		Personal, Food and Miscellaneous Services		Senior loan		12/2023		6.6				4				4
CLP Healthcare Services, Inc.		Healthcare, Education and Childcare		Senior loan		12/2020		7.6				8,524				8,354
CLP Healthcare Services, Inc.		Healthcare, Education and Childcare		Senior loan		12/2020		7.6				4,295				4,209
Community Veterinary Partners, LLC		Personal, Food and Miscellaneous Services		Senior loan		10/2021		7.6				2,423				2,423
Community Veterinary Partners, LLC		Personal, Food and Miscellaneous Services		Senior loan		10/2021		7.6				1,218				1,218
Community Veterinary Partners, LLC		Personal, Food and Miscellaneous Services		Senior loan		10/2021		7.6				58				58
Community Veterinary Partners, LLC		Personal, Food and Miscellaneous Services		Senior loan		10/2021		7.6				40				40
Curo Health Services LLC (4)		Healthcare, Education and Childcare		Senior loan		02/2022		8.0				5,805				5,820
DISA Holdings Acquisition Subsidiary Corp. (4)		Diversified/Conglomerate Service		Senior loan		06/2022		6.7				4,821				4,797
DISA Holdings Acquisition Subsidiary Corp. (4)(5)		Diversified/Conglomerate Service		Senior loan		06/2022		N/A		(6)		—				(5		)
Encore GC Acquisition, LLC		Healthcare, Education and Childcare		Senior loan		01/2020		7.7				4,540				4,540
Flexan, LLC		Chemicals, Plastics and Rubber		Senior loan		02/2020		8.1				5,982				5,982
Flexan, LLC		Chemicals, Plastics and Rubber		Senior loan		02/2020		8.1				1,661				1,661
Flexan, LLC (4)		Chemicals, Plastics and Rubber		Senior loan		02/2020		9.5				304				304
Gamma Technologies, LLC (4)		Electronics		Senior loan		06/2024		7.6				10,211				10,122
III US Holdings, LLC		Diversified/Conglomerate Service		Senior loan		09/2022		8.8				4,927				4,927
Jensen Hughes, Inc.		Buildings and Real Estate		Senior loan		03/2024		6.6				2,293				2,293
Jensen Hughes, Inc.		Buildings and Real Estate		Senior loan		03/2024		6.6				119				119
Jensen Hughes, Inc.		Buildings and Real Estate		Senior loan		03/2024		6.6				64				64
Joerns Healthcare, LLC (4)		Healthcare, Education and Childcare		Senior loan		05/2020		8.3				8,745				8,075
Paradigm DKD Group, LLC		Buildings and Real Estate		Senior loan		11/2018		8.3				1,967				1,475
Paradigm DKD Group, LLC		Buildings and Real Estate		Senior loan		11/2018		8.3				792				644
Pasternack Enterprises, Inc. and Fairview Microwave, Inc.		Diversified/Conglomerate Manufacturing		Senior loan		05/2022		9.0				5,331				5,331
Payless ShoeSource, Inc.		Retail Stores		Senior loan		08/2022		11.3				764				660
Polk Acquisition Corp.		Automobile		Senior loan		06/2022		7.1				4,525				4,434
Polk Acquisition Corp.		Automobile		Senior loan		06/2022		7.1				53				52
Polk Acquisition Corp.		Automobile		Senior loan		06/2022		7.3				50				48
Premise Health Holding Corp. (4)		Healthcare, Education and Childcare		Senior loan		06/2020		6.8				11,682				11,682
Pyramid Healthcare, Inc.		Healthcare, Education and Childcare		Senior loan		08/2019		8.9				10,178				10,178
Pyramid Healthcare, Inc.		Healthcare, Education and Childcare		Senior loan		08/2019		8.6				206				206
Pyramid Healthcare, Inc.		Healthcare, Education and Childcare		Senior loan		08/2019		8.9				149				149
Pyramid Healthcare, Inc.		Healthcare, Education and Childcare		Senior loan		08/2019		8.9				45				45
R.G. Barry Corporation		Personal, Food and Miscellaneous Services		Senior loan		09/2019		7.1				4,834				4,834
Radiology Partners, Inc. (4)		Healthcare, Education and Childcare		Senior loan		12/2023		9.8				8,854				8,854
Radiology Partners, Inc. (4)		Healthcare, Education and Childcare		Senior loan		12/2023		9.8				163				163
Reliant Pro ReHab, LLC (4)		Healthcare, Education and Childcare		Senior loan		12/2018		12.1				3,164				3,164
RSC Acquisition, Inc. (4)		Insurance		Senior loan		11/2022		6.8				3,844				3,844

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SLF Investment Portfolio as of June 30, 2018 - (continued)
Portfolio Company		Business Description		Investment Type		Maturity Date		Current Interest Rate(1)				Principal ($) / Shares(2)				Fair Value(3)
												(In thousands)
RSC Acquisition, Inc. (4)		Insurance		Senior loan		11/2021		6.8		%		$	33			$	33
Rubio's Restaurants, Inc. (4)		Beverage, Food and Tobacco		Senior loan		10/2019		7.6				4,954				4,954
Rug Doctor LLC		Personal and Non Durable Consumer Products (Mfg. Only)		Senior loan		04/2019		7.6				5,195				5,195
Sage Dental Management, LLC		Healthcare, Education and Childcare		Senior loan		10/2019		8.1				4,746				4,271
Sage Dental Management, LLC		Healthcare, Education and Childcare		Senior loan		10/2019		8.1				70				63
Sage Dental Management, LLC		Healthcare, Education and Childcare		Senior loan		10/2019		8.1				70				63
Sage Dental Management, LLC		Healthcare, Education and Childcare		Senior loan		10/2019		8.1				50				44
Saldon Holdings, Inc. (4)		Diversified/Conglomerate Service		Senior loan		09/2022		6.6				2,435				2,435
SEI, Inc. (4)		Electronics		Senior loan		07/2023		7.3				13,750				13,750
Self Esteem Brands, LLC (4)		Leisure, Amusement, Motion Pictures, Entertainment		Senior loan		02/2020		6.8				10,342				10,342
Severin Acquisition, LLC		Diversified/Conglomerate Service		Senior loan		07/2021		7.1				5,251				5,231
Severin Acquisition, LLC (4)		Diversified/Conglomerate Service		Senior loan		07/2021		7.2				4,795				4,795
Severin Acquisition, LLC		Diversified/Conglomerate Service		Senior loan		07/2021		7.4				663				665
Severin Acquisition, LLC		Diversified/Conglomerate Service		Senior loan		07/2021		7.1				81				80
Teasdale Quality Foods, Inc.		Grocery		Senior loan		10/2020		7.1				4,518				4,518
Teasdale Quality Foods, Inc.		Grocery		Senior loan		10/2020		6.8				3,541				3,541
Teasdale Quality Foods, Inc.		Grocery		Senior loan		10/2020		6.8				659				659
Teasdale Quality Foods, Inc.		Grocery		Senior loan		10/2020		7.1				493				493
Teasdale Quality Foods, Inc.		Grocery		Senior loan		10/2020		6.9				243				243
Upstream Intermediate, LLC		Healthcare, Education and Childcare		Senior loan		01/2024		6.8				2,838				2,838
W3 Co.		Oil and Gas		Senior loan		03/2022		8.3				1,257				1,252
WHCG Management, LLC (4)		Healthcare, Education and Childcare		Senior loan		03/2023		7.3				7,920				7,920
WIRB-Copernicus Group, Inc. (4)		Healthcare, Education and Childcare		Senior loan		08/2022		6.3				5,623				5,623
Total senior loan investments												$	228,891			$	224,759
Payless ShoeSource, Inc. (7)(8)		Retail Stores		LLC interest		N/A		N/A				35				$	139
W3 Co. (7)(8)		Oil and Gas		LLC units		N/A		N/A				3				1,138
Total equity investments																$	1,277
Total investments												$	228,891			$	226,036

(1)	Represents the weighted average annual current interest rate as of June 30, 2018.

(2)	The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.

(3)	Represents the fair value in accordance with ASC Topic 820 - Fair Value Measurement, or ASC Topic 820. The determination of such fair value is not included in our board of directors’ valuation process described elsewhere herein.

(4)	We also hold a portion of the first lien senior secured loan in this portfolio company.

(5)	The negative fair value is the result of the unfunded commitment being valued below par.

(6)	The entire commitment was unfunded as of June 30, 2018. As such, no interest is being earned on this investment. The investment may be subject to an unused facility fee.

(7)	Equity investment received as a result of the portfolio company's debt restructuring.

(8)	Non-income producing securities.

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SLF Investment Portfolio as of September 30, 2017
Portfolio Company		Business Description		Investment Type		Maturity Date		Current Interest Rate(1)				Principal ($) / Shares(2)				Fair Value(3)
												(In thousands)
1A Smart Start LLC		Home and Office Furnishings, Housewares, and Durable Consumer		Senior loan		02/2022		6.1		%		$	2,094			$	2,105
1A Smart Start LLC		Home and Office Furnishings, Housewares, and Durable Consumer		Senior loan		02/2022		5.8				928				928
Advanced Pain Management Holdings, Inc.		Healthcare, Education and Childcare		Senior loan		02/2018		6.3				6,805				5,784
Advanced Pain Management Holdings, Inc.		Healthcare, Education and Childcare		Senior loan		02/2018		6.3				466				396
Argon Medical Devices, Inc.		Healthcare, Education and Childcare		Senior loan		12/2021		6.0				3,184				3,184
Arise Virtual Solutions, Inc. (4)		Telecommunications		Senior loan		12/2018		7.3				9,856				9,856
Boot Barn, Inc.		Retail Stores		Senior loan		06/2021		5.8				10,073				10,073
Brandmuscle, Inc.		Printing and Publishing		Senior loan		12/2021		6.1				4,851				4,845
CLP Healthcare Services, Inc.		Healthcare, Education and Childcare		Senior loan		12/2020		6.6				8,590				8,418
CLP Healthcare Services, Inc.		Healthcare, Education and Childcare		Senior loan		12/2020		6.6				4,328				4,242
Community Veterinary Partners, LLC		Personal, Food and Miscellaneous Services		Senior loan		10/2021		6.8				2,442				2,442
Community Veterinary Partners, LLC		Personal, Food and Miscellaneous Services		Senior loan		10/2021		6.8				1,227				1,227
Community Veterinary Partners, LLC		Personal, Food and Miscellaneous Services		Senior loan		10/2021		6.8				59				59
Community Veterinary Partners, LLC		Personal, Food and Miscellaneous Services		Senior loan		10/2021		6.8				41				41
Curo Health Services LLC (4)		Healthcare, Education and Childcare		Senior loan		02/2022		5.3				5,850				5,867
DISA Holdings Acquisition Subsidiary Corp.		Diversified/Conglomerate Service		Senior loan		12/2020		5.5				4,401				4,401
DISA Holdings Acquisition Subsidiary Corp.		Diversified/Conglomerate Service		Senior loan		12/2020		5.6				428				428
EAG, INC.		Diversified/Conglomerate Service		Senior loan		07/2018		5.5				1,964				1,964
Encore GC Acquisition, LLC		Healthcare, Education and Childcare		Senior loan		01/2020		6.8				4,725				4,725
Flexan, LLC		Chemicals, Plastics and Rubber		Senior loan		02/2020		7.1				6,029				6,029
Flexan, LLC		Chemicals, Plastics and Rubber		Senior loan		02/2020		7.1				1,686				1,686
Flexan, LLC (4)		Chemicals, Plastics and Rubber		Senior loan		02/2020		8.8				47				47
Gamma Technologies, LLC (4)		Electronics		Senior loan		06/2021		6.0				10,264				10,264
Harvey Tool Company, LLC		Diversified/Conglomerate Manufacturing		Senior loan		03/2020		6.1				3,064				3,064
III US Holdings, LLC		Diversified/Conglomerate Service		Senior loan		09/2022		7.9				5,044				5,044
Jensen Hughes, Inc.		Buildings and Real Estate		Senior loan		12/2021		6.3				2,293				2,293
Jensen Hughes, Inc.		Buildings and Real Estate		Senior loan		12/2021		6.4				102				102
Jensen Hughes, Inc.		Buildings and Real Estate		Senior loan		12/2021		6.4				64				64
Joerns Healthcare, LLC (4)		Healthcare, Education and Childcare		Senior loan		05/2020		7.8				8,745				8,202
Julio & Sons Company		Beverage, Food and Tobacco		Senior loan		12/2018		6.7				6,762				6,762
Julio & Sons Company		Beverage, Food and Tobacco		Senior loan		12/2018		6.7				2,226				2,226
Julio & Sons Company		Beverage, Food and Tobacco		Senior loan		12/2018		6.7				822				822
Loar Group Inc.		Aerospace and Defense		Senior loan		01/2022		6.0				2,164				2,164
Loar Group Inc.		Aerospace and Defense		Senior loan		01/2022		6.0				1,492				1,492
Paradigm DKD Group, LLC		Buildings and Real Estate		Senior loan		11/2018		6.2				1,977				1,977
Paradigm DKD Group, LLC		Buildings and Real Estate		Senior loan		11/2018		6.2				596				596
Park Place Technologies LLC (4)		Electronics		Senior loan		06/2022		6.3				5,341				5,287
Pasternack Enterprises, Inc. and Fairview Microwave, Inc.		Diversified/Conglomerate Manufacturing		Senior loan		05/2022		6.2				5,372				5,372
Payless ShoeSource, Inc.		Retail Stores		Senior loan		08/2022		10.3				768				757
Polk Acquisition Corp.		Automobile		Senior loan		06/2022		6.2				4,560				4,469
Polk Acquisition Corp.		Automobile		Senior loan		06/2022		6.7				83				81
Polk Acquisition Corp.		Automobile		Senior loan		06/2022		6.2				53				52
PowerPlan Holdings, Inc. (4)		Utilities		Senior loan		02/2022		6.5				11,365				11,365
Premise Health Holding Corp. (4)		Healthcare, Education and Childcare		Senior loan		06/2020		5.8				11,772				11,772
Pyramid Healthcare, Inc.		Healthcare, Education and Childcare		Senior loan		08/2019		7.7				9,738				9,738

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SLF Investment Portfolio as of September 30, 2017 - (continued)
Portfolio Company		Business Description		Investment Type		Maturity Date		Current Interest Rate(1)				Principal ($) / Shares(2)				Fair Value(3)
												(In thousands)
Pyramid Healthcare, Inc.		Healthcare, Education and Childcare		Senior loan		08/2019		7.9		%		$	597			$	597
R.G. Barry Corporation		Personal, Food and Miscellaneous Services		Senior loan		09/2019		6.2				5,217				5,217
Radiology Partners, Inc. (4)		Healthcare, Education and Childcare		Senior loan		09/2020		7.1				7,793				7,793
Radiology Partners, Inc. (4)		Healthcare, Education and Childcare		Senior loan		09/2020		7.1				595				595
Radiology Partners, Inc. (4)		Healthcare, Education and Childcare		Senior loan		09/2020		7.1				505				505
Reliant Pro ReHab, LLC (4)		Healthcare, Education and Childcare		Senior loan		12/2017		6.3				3,240				3,240
RSC Acquisition, Inc. (4)		Insurance		Senior loan		11/2022		6.6				3,864				3,864
RSC Acquisition, Inc.		Insurance		Senior loan		11/2020		6.1				15				15
Rubio's Restaurants, Inc. (4)		Beverage, Food and Tobacco		Senior loan		11/2018		6.1				4,992				4,992
Rug Doctor LLC		Personal and Non Durable Consumer Products (Mfg. Only)		Senior loan		06/2018		6.6				5,792				5,792
Sage Dental Management, LLC		Healthcare, Education and Childcare		Senior loan		10/2019		7.0				4,782				4,686
Sage Dental Management, LLC		Healthcare, Education and Childcare		Senior loan		10/2019		7.8				70				69
Sage Dental Management, LLC		Healthcare, Education and Childcare		Senior loan		10/2019		7.0				50				49
Sage Dental Management, LLC		Healthcare, Education and Childcare		Senior loan		10/2019		8.8				34				33
Saldon Holdings, Inc. (4)		Diversified/Conglomerate Service		Senior loan		09/2022		5.8				2,521				2,490
Sarnova HC, LLC		Healthcare, Education and Childcare		Senior loan		01/2022		6.0				3,684				3,684
SEI, Inc.		Electronics		Senior loan		07/2021		6.0				13,820				13,820
Self Esteem Brands, LLC (4)		Leisure, Amusement, Motion Pictures, Entertainment		Senior loan		02/2020		6.0				11,313				11,313
Severin Acquisition, LLC (4)		Diversified/Conglomerate Service		Senior loan		07/2021		6.1				4,832				4,830
Severin Acquisition, LLC		Diversified/Conglomerate Service		Senior loan		07/2021		6.0				5,290				5,265
Severin Acquisition, LLC		Diversified/Conglomerate Service		Senior loan		07/2021		6.2				668				670
Severin Acquisition, LLC (5)		Diversified/Conglomerate Service		Senior loan		07/2021		N/A		(6)		—				(1		)
Smashburger Finance LLC		Beverage, Food and Tobacco		Senior loan		05/2018		6.8				867				754
Smashburger Finance LLC		Beverage, Food and Tobacco		Senior loan		05/2018		6.8				68				60
Smashburger Finance LLC		Beverage, Food and Tobacco		Senior loan		05/2018		6.8				68				59
Smashburger Finance LLC		Beverage, Food and Tobacco		Senior loan		05/2018		6.8				68				59
Smashburger Finance LLC		Beverage, Food and Tobacco		Senior loan		05/2018		6.8				68				59
Smashburger Finance LLC (5)		Beverage, Food and Tobacco		Senior loan		05/2018		N/A		(6)		—				(15		)
Stomatcare DSO, LLC (7)		Healthcare, Education and Childcare		Senior loan		05/2022		6.2% PIK				625				329
Tate's Bake Shop, Inc. (4)		Beverage, Food and Tobacco		Senior loan		08/2019		6.3				2,926				2,926
Teasdale Quality Foods, Inc.		Grocery		Senior loan		10/2020		5.5				4,553				4,553
Teasdale Quality Foods, Inc.		Grocery		Senior loan		10/2020		6.1				3,567				3,567
Teasdale Quality Foods, Inc.		Grocery		Senior loan		10/2020		6.1				687				687
Teasdale Quality Foods, Inc.		Grocery		Senior loan		10/2020		6.0				514				514
Teasdale Quality Foods, Inc.		Grocery		Senior loan		10/2020		6.1				252				252
Transaction Data Systems, Inc.		Diversified/Conglomerate Service		Senior loan		06/2021		6.6				7,393				7,393
Transaction Data Systems, Inc.		Diversified/Conglomerate Service		Senior loan		06/2020		5.8				22				21
W3 Co.		Oil and Gas		Senior loan		03/2022		7.3				1,266				1,269
WHCG Management, LLC (4)		Healthcare, Education and Childcare		Senior loan		03/2023		6.1				7,980				7,980
WIRB-Copernicus Group, Inc.		Healthcare, Education and Childcare		Senior loan		08/2022		6.3				5,666				5,666
Young Innovations, Inc. (4)		Healthcare, Education and Childcare		Senior loan		01/2019		6.3				10,369				10,369
Young Innovations, Inc. (4)		Healthcare, Education and Childcare		Senior loan		01/2019		6.3				209				209
Total senior loan investments												$	301,583			$	298,941

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SLF Investment Portfolio as of September 30, 2017 - (continued)

Portfolio Company

Business Description

Investment Type

Maturity Date

Current Interest Rate(1)

Principal ($) / Shares(2)

Fair Value(3)

(In thousands)

Payless ShoeSource, Inc. (8)(9)

Retail Stores

LLC interest

N/A

N/A

35

$

843

W3 Co. (8)(9)

Oil and Gas

LLC units

N/A

N/A

3

1,146

Total equity investments

$

1,989

Total investments

$

301,583

$

300,930

(1)	Represents the weighted average annual current interest rate as of September 30, 2017. All interest rates are payable in cash.

(2)	The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.

(3)	Represents the fair value in accordance with ASC Topic 820. The determination of such fair value is not included in our board of directors’ valuation process described elsewhere herein.

(4)	We also hold a portion of the senior secured loan in this portfolio company.

(5)	The negative fair value is the result of the unfunded commitment being valued below par.

(6)	The entire commitment was unfunded as of September 30, 2017. As such, no interest is being earned on this investment.

(7)	Loan was on non-accrual status as of September 30, 2017, meaning that SLF has ceased recognizing interest income on the loan.

(8)	Equity investment received as a result of the portfolio company's debt restructuring.

(9)	Non-income producing.

As of June 30, 2018, we have committed to fund $175.0 million of LLC equity interests to SLF. As of June 30, 2018 and September 30, 2017, $95.5 million and $97.5 million, respectively, of our LLC equity interest commitment to SLF had been called and contributed, net of return of capital distributions subject to recall. For the three and nine months ended June 30, 2018, we received $2.1 million and $5.9 million, respectively, in dividend income from the SLF LLC equity interests. For the three and nine months ended June 30, 2017, we received $0.9 million and $4.1 million, respectively, in dividend income from the SLF LLC equity interests.

The subordinated notes issued by SLF and previously held by us were redeemed on December 30, 2016, and therefore no interest income was earned for the three and nine months ended June 30, 2018. For the nine months ended June 30, 2018, we earned interest income of $1.6 million on the subordinated notes.

For the three and nine months ended June 30, 2018, we earned an annualized total return on our weighted average capital invested in SLF of 6.2% and 7.6%, respectively. For the three and nine months ended June 30, 2017, we earned an annualized total return on our weighted average capital invested in SLF of 3.4% and 7.0%, respectively. The annualized total return on weighted average capital invested is calculated by dividing total income earned on our investments in SLF by the combined daily average of our investments in (1) the principal of the SLF subordinated notes, if any, and (2) the NAV of the SLF LLC equity interests.

 

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Below is certain summarized financial information for SLF as of June 30, 2018 and September 30, 2017, and for the three and nine months ended June 30, 2018 and 2017:

	June 30, 2018				September 30, 2017
	(In thousands)
Selected Balance Sheet Information, at fair value
Investments, at fair value	$	226,036			$	300,930
Cash and other assets	3,749				5,305
Total assets	$	229,785			$	306,235
Senior credit facility	$	123,500			$	197,700
Unamortized debt issuance costs	(84		)		(712		)
Other liabilities	565				658
Total liabilities	123,981				197,646
Members’ equity	105,804				108,589
Total liabilities and members' equity	$	229,785			$	306,235

	Three months ended June 30,								Nine months ended June 30,
	2018				2017				2018				2017
	(In thousands)								(In thousands)
Selected Statement of Operations Information:
Interest income	$	4,692			$	5,645			$	14,444			$	16,311
Fee income	—				5				25				5
Total investment income	4,692				5,650				14,469				16,316
Interest and other debt financing expenses	1,662				2,129				5,506				8,148
Administrative service fee	119				123				340				354
Other expenses	30				34				87				98
Total expenses	1,811				2,286				5,933				8,600
Net investment income	2,881				3,364				8,536				7,716
Net realized gains (losses) on investments	—				29				—				3
Net change in unrealized appreciation (depreciation)      on investments	(1,196		)		(2,262		)		(2,414		)		(2,891		)
Net increase (decrease) in members' equity	$	1,685			$	1,131			$	6,122			$	4,828

Prior to their termination, SLF elected to fair value the subordinated notes issued to us and RGA under ASC Topic 825 — Financial Instruments, or ASC Topic 825. The subordinated notes were valued by calculating the net present value of the future expected cash flow streams using an appropriate risk-adjusted discount rate model. For the nine months ended June 30, 2017, SLF did not recognize unrealized appreciation or depreciation on the subordinated notes, which were redeemed by SLF on December 30, 2016.

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Contractual Obligations and Off-Balance Sheet Arrangements

A summary of our significant contractual payment obligations as of June 30, 2018 is as follows:

	Payments Due by Period (In millions)
	Total				Less Than 1 Year				1 – 3 Years				3 – 5 Years				More Than 5 Years
2010 Debt Securitization	$	205.0			$	—			$	—			$	—			$	205.0
2014 Debt Securitization	246.0				—				—				—				246.0
SBA debentures	277.5				—				—				115.0				162.5
Credit Facility	147.5				—				—				147.5				—
Adviser Revolver	—				—				—				—				—
Other short-term borrowings	9.4				9.4				—				—				—
Unfunded commitments(1)	58.8				58.8				—				—				—
Total contractual obligations	$	934.8			$	58.8			$	—			$	262.5			$	613.5

(1)

Unfunded commitments represent unfunded commitments to fund investments, excluding our investments in SLF, as of June 30, 2018. These amounts may or may not be funded to the borrowing party now or in the future. The unfunded commitments relate to loans with various maturity dates, but we are showing this amount in the less than one year category as this entire amount was eligible for funding to the borrowers as of June 30, 2018, subject to the terms of each loan’s respective credit agreement.

We may become a party to financial instruments with off-balance sheet risk in the normal course of our business to meet the financial needs of our portfolio companies. These instruments may include commitments to extend credit and involve, to varying degrees, elements of liquidity and credit risk in excess of the amount recognized in the balance sheet. As of June 30, 2018 and September 30, 2017, we had outstanding commitments to fund investments, excluding our investments in SLF, totaling $58.8 million and $60.5 million, respectively. We have commitments of up to $79.5 million and $77.5 million to SLF as of June 30, 2018 and September 30, 2017, respectively, that may be contributed primarily for the purpose of funding new investments approved by the SLF investment committee.

We have certain contracts under which we have material future commitments. We have entered into the Investment Advisory Agreement with GC Advisors in accordance with the 1940 Act. Under the Investment Advisory Agreement, GC Advisors provides us with investment advisory and management services.

Under the Administration Agreement, the Administrator furnishes us with office facilities and equipment, provides us with clerical, bookkeeping and record keeping services at such facilities and provides us with other administrative services necessary to conduct our day-to-day operations. The Administrator also provides on our behalf managerial assistance to those portfolio companies to which we are required to offer to provide such assistance.

If any of the contractual obligations discussed above are terminated, our costs under any new agreements that we enter into may increase. In addition, we would likely incur significant time and expense in locating alternative parties to provide the services we receive under our Investment Advisory Agreement and our Administration Agreement. Any new investment advisory agreement would also be subject to approval by our stockholders.

Distributions

We intend to make quarterly distributions to our stockholders as determined by our board of directors. For additional details on distributions, see “Income taxes” in Note 2 to our consolidated financial statements.

We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of our distributions from time to time. In addition, we may be limited in our ability to make distributions due to the asset coverage requirements applicable to us as a business development company under the 1940 Act. If we do not distribute a certain percentage of our income annually, we will suffer adverse U.S. federal income tax consequences, including the possible loss of our ability to be subject to tax as a RIC. We cannot assure stockholders that they will receive any distributions.

Because federal income tax regulations differ from GAAP, distributions in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified within capital accounts in the financial statements to reflect their tax character. For example, permanent differences in classification may result from the treatment of distributions paid from short-term gains as

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ordinary income dividends for tax purposes. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future.

To the extent our taxable earnings fall below the total amount of our distributions for any tax year, a portion of those distributions may be deemed a return of capital to our stockholders for U.S. federal income tax purposes. Thus, the source of a distribution to our stockholders may be the original capital invested by the stockholder rather than our income or gains. Stockholders should read any written disclosure accompanying a distribution payment carefully and should not assume that the source of any distribution is our ordinary income or gains.

We have adopted an “opt out” dividend reinvestment plan for our common stockholders. As a result, if we declare a distribution, our stockholders’ cash distributions will be automatically reinvested in additional shares of our common stock unless a stockholder specifically “opts out” of our dividend reinvestment plan. If a stockholder opts out, that stockholder will receive cash distributions. Although distributions paid in the form of additional shares of our common stock will generally be subject to U.S. federal, state and local taxes in the same manner as cash distributions, stockholders participating in our dividend reinvestment plan will not receive any corresponding cash distributions with which to pay any such applicable taxes.

Related Party Transactions

We have entered into a number of business relationships with affiliated or related parties, including the following:

•	We entered into the Investment Advisory Agreement with GC Advisors. Mr. Lawrence Golub, our chairman, is a manager of GC Advisors, and Mr. David Golub, our chief executive officer, is a manager of GC Advisors, and each of Messrs. Lawrence Golub and David Golub owns an indirect pecuniary interest in GC Advisors.

•	Golub Capital LLC provides, and other affiliates of Golub Capital have historically provided, us with the office facilities and administrative services necessary to conduct day-to-day operations pursuant to our Administration Agreement.

•	We have entered into a license agreement with Golub Capital LLC, pursuant to which Golub Capital LLC has granted us a non-exclusive, royalty-free license to use the name “Golub Capital.”

•

Under the Staffing Agreement, Golub Capital LLC has agreed to provide GC Advisors with the resources necessary to fulfill its obligations under the Investment Advisory Agreement. The Staffing Agreement provides that Golub Capital LLC will make available to GC Advisors experienced investment professionals and provide access to the senior investment personnel of Golub Capital LLC for purposes of evaluating, negotiating, structuring, closing and monitoring our investments. The Staffing Agreement also includes a commitment that the members of GC Advisors’ investment committee will serve in such capacity. Services under the Staffing Agreement are provided on a direct cost reimbursement basis. We are not a party to the Staffing Agreement.

•

GC Advisors serves as collateral manager to the the 2014 Issuer and, prior to the redemption of the 2010 Notes on July 20, 2018, served as the collateral manager to the 2010 Issuer under the 2014 Collateral Management Agreement and 2010 Collateral Management Agreement, respectively. Fees payable to GC Advisors for providing these services offset against the base management fee payable by us under the Investment Advisory Agreement.

•	We have entered into the Adviser Revolver with GC Advisors in order to have the ability to borrow funds on a short-term basis.

•

During the first six months of calendar year 2018, the Golub Capital Employee Grant Program Rabbi Trust, or the Trust, purchased approximately $7.2 million of shares, or 396,099 shares, of our common stock for the purpose of awarding incentive compensation to employees of Golub Capital. During calendar year 2017, the Trust purchased approximately $17.7 million of shares, or 955,896 shares, of our common stock, for the purpose of awarding incentive compensation to employees of Golub Capital.

GC Advisors also sponsors or manages, and may in the future sponsor or manage, other investment funds, accounts or investment vehicles (together referred to as “accounts”) that have investment mandates that are similar, in whole and in part, with ours. For example, GC Advisors presently serves as the investment adviser to Golub Capital Investment Corporation and Golub Capital BDC 3, Inc., each an unlisted business development company that primarily focuses on investing in one stop and other senior secured loans. In addition, our officers and directors serve in similar capacities for and Golub Capital Investment Corporation and Golub Capital BDC 3, Inc. GC Advisors and its affiliates may determine that an investment is appropriate for

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us and for one or more of those other accounts. In such event, depending on the availability of such investment and other appropriate factors, and pursuant to GC Advisors’ allocation policy, GC Advisors or its affiliates may determine that we should invest side-by-side with one or more other accounts. We do not intend to make any investments if they are not permitted by applicable law and interpretive positions of the SEC and its staff, or if they are inconsistent with GC Advisors’ allocation procedures.

In addition, we have adopted a formal code of ethics that governs the conduct of our and GC Advisors’ officers, directors and employees. Our officers and directors also remain subject to the duties imposed by both the 1940 Act and the General Corporation Law of the State of Delaware.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following items as critical accounting policies.

Fair Value Measurements

We value investments for which market quotations are readily available at their market quotations. However, a readily available market value is not expected to exist for many of the investments in our portfolio, and we value these portfolio investments at fair value as determined in good faith by our board of directors under our valuation policy and process.

Valuation methods may include comparisons of the portfolio companies to peer companies that are public, determination of the enterprise value of a portfolio company, discounted cash flow analysis and a market interest rate approach. The factors that are taken into account in fair value pricing investments include: 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 and the markets in which it does business; comparisons of financial ratios of peer companies that are public; comparable merger and acquisition transactions; and the principal market and enterprise values. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we will consider the pricing indicated by the external event to corroborate the private equity valuation. 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 investments may differ significantly from the values that would have been used had a readily available market value existed for such investments and may differ materially from values that may ultimately be received or settled.

Our board of directors is ultimately and solely responsible for determining, in good faith, the fair value of investments that are not publicly traded, whose market prices are not readily available on a quarterly basis or any other situation where portfolio investments require a fair value determination.

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

Our quarterly valuation process begins with each portfolio company investment being initially valued by the investment professionals of GC Advisors responsible for credit monitoring. Preliminary valuation conclusions are then documented and discussed with our senior management and GC Advisors. The audit committee of our board of directors reviews these preliminary valuations. At least once annually, the valuation for each portfolio investment is reviewed by an independent valuation firm. The board of directors discusses valuations and determines the fair value of each investment in our portfolio in good faith.

Determination of fair values involves subjective judgments and estimates. Under current accounting standards, the notes to our consolidated financial statements refer to the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our consolidated financial statements.

We follow ASC Topic 820 for measuring fair value. Fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the assets or liabilities or market and the assets’

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or liabilities’ complexity. Our fair value analysis includes an analysis of the value of any unfunded loan commitments. Assets and liabilities are categorized for disclosure purposes based upon the level of judgment associated with the inputs used to measure their value. The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the asset or liability as of the measurement date. The three levels are defined as follows:

Level 1: Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

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

Level 3: Inputs include significant unobservable inputs for the assets or liabilities and include situations where there is little, if any, market activity for the assets or liabilities. The inputs into the determination of fair value are based upon the best information available and may require significant management judgment or estimation.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset’s or a liability’s categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and we consider factors specific to the asset or liability. We assess the levels of assets and liabilities at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfers. There were no transfers among Level 1, 2 and 3 of the fair value hierarchy for assets and liabilities during the three and nine months ended June 30, 2018 and 2017. The following section describes the valuation techniques used by us to measure different assets and liabilities at fair value and includes the level within the fair value hierarchy in which the assets and liabilities are categorized.

Valuation of Investments

Level 1 investments are valued using quoted market prices. Level 2 investments are valued using market consensus prices that are corroborated by observable market data and quoted market prices for similar assets and liabilities. Level 3 investments are valued at fair value as determined in good faith by our board of directors, based on input of management, the audit committee and independent valuation firms that have been engaged at the direction of our board of directors to assist in the valuation of each portfolio investment without a readily available market quotation at least once during a trailing twelve-month period under a valuation policy and a consistently applied valuation process. This valuation process is conducted at the end of each fiscal quarter, with approximately 25% (based on the number of portfolio companies) of our valuations of debt and equity investments without readily available market quotations subject to review by an independent valuation firm. As of June 30, 2018 and September 30, 2017, with the exception of money market funds included in cash and cash equivalents and restricted cash and cash equivalents (Level 1 investments) and investments measured at fair value using the NAV, all investments were valued using Level 3 inputs of the fair value hierarchy.

When determining fair value of Level 3 debt and equity investments, we may take into account the following factors, where relevant: the enterprise value of a portfolio company, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons to publicly traded securities, and changes in the interest rate environment and the credit markets generally that may affect the price at which similar investments may be made and other relevant factors. The primary method for determining enterprise value uses a multiple analysis whereby appropriate multiples are applied to the portfolio company’s EBITDA. A portfolio company’s EBITDA may include pro-forma adjustments for items such as acquisitions, divestitures, or expense reductions. The enterprise value analysis is performed to determine the value of equity investments and to determine if debt investments are credit impaired. If debt investments are credit impaired, we will use the enterprise value analysis or a liquidation basis analysis to determine fair value. For debt investments that are not determined to be credit impaired, we use a market interest rate yield analysis to determine fair value.

In addition, for certain debt investments, we may base our valuation on indicative bid and ask prices provided by an independent third party pricing service. Bid prices reflect the highest price that we and others may be willing to pay. Ask prices represent the lowest price that we and others may be willing to accept. We generally use the midpoint of the bid/ask range as our best estimate of fair value of such investment.

Due to the inherent uncertainty of determining the fair value of Level 3 investments that do not have a readily available market value, the fair value of the investments may differ significantly from the values that would have been used had a market existed for such investments and may differ materially from the values that may ultimately be received or settled. Further, such investments are generally subject to legal and other restrictions or otherwise are less liquid than publicly traded instruments. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we may realize significantly less than the value at which such investment had previously been recorded.

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Our investments are subject to market risk. Market risk is the potential for changes in the value due to market changes. Market risk is directly impacted by the volatility and liquidity in the markets in which the investments are traded.

Valuation of Other Financial Assets and Liabilities

Fair value of our debt is estimated using Level 3 inputs by discounting remaining payments using comparable market rates or market quotes for similar instruments at the measurement date, if available.

Revenue Recognition:

Our revenue recognition policies are as follows:

Investments and Related Investment Income: Interest income is accrued based upon the outstanding principal amount and contractual interest terms of debt investments. Premiums, discounts, and origination fees are amortized or accreted into interest income over the life of the respective debt investment. For investments with contractual PIK interest, which represents contractual interest accrued and added to the principal balance that generally becomes due at maturity, we do not accrue PIK interest if the portfolio company valuation indicates that the PIK interest is not likely to be collectible. In addition, we may generate revenue in the form of amendment, structuring or due diligence fees, fees for providing managerial assistance, consulting fees and prepayment premiums on loans and record these fees as fee income when received. Loan origination fees, original issue discount and market discount or premium are capitalized, and we accrete or amortize such amounts as interest income. We record prepayment premiums on loans as fee income. Dividend income on preferred equity securities is recorded as dividend income 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 securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies. Distributions received from LLC and limited partnership, or LP, investments are evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, we will not record distributions from equity investments in LLCs and LPs as dividend income unless there are sufficient accumulated tax-basis earnings and profits in the LLC or LP prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment.

We account for investment transactions on a trade-date basis. Realized gains or losses on investments are measured by the difference between the net proceeds from the disposition and the cost basis of investment, without regard to unrealized gains or losses previously recognized. We report changes in fair value of investments from the prior period that is measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investments in our Consolidated Statements of Operations.

Non-accrual: Loans may be left on accrual status during the period we are pursuing repayment of the loan. Management reviews all loans that become past due 90 days or more on principal and interest or when there is reasonable doubt that principal or interest will be collected for possible placement on non-accrual status. We generally reverse accrued interest when a loan is placed on non-accrual. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. We restore non-accrual loans to accrual status when past due principal and interest is paid and, in our management’s judgment, are likely to remain current. The total fair value of our non-accrual loans was $13.3 million as of June 30, 2018 and $3.0 million as of September 30, 2017.

Partial loan sales: We follow the guidance in ASC Topic 860, when accounting for loan participations and other partial loan sales. Such guidance requires a participation or other partial loan sale to meet the definition of a “participating interest”, as defined in the guidance, in order for sale treatment to be allowed. Participations or other partial loan sales that do not meet the definition of a participating interest remain on our statements of assets and liabilities and the proceeds are recorded as a secured borrowing until the definition is met. Secured borrowings are carried at fair value to correspond with the related investments, which are carried at fair value.

Income taxes: See “Consolidated Results of Operations - Expenses - Excise Tax Expense.”

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are subject to financial market risks, including changes in interest rates. Many of the loans in our portfolio have floating interest rates, and we expect that our loans in the future may also have floating interest rates. These loans are usually based on a floating LIBOR and typically have interest rate reset provisions that adjust applicable interest rates under such loans to current market rates on a quarterly basis. The loans that are subject to the floating LIBOR are also subject to a minimum base rate, or floor, that we charge on our loans if the current market rates are below the respective floors. As of June 30, 2018 and September 30, 2017, the weighted average LIBOR floor on the loans subject to floating interest rates was 1.02% and 1.03%, respectively. Prior to their redemption on October 20, 2016, the Class A 2010 Notes issued as part of the 2010 Debt Securitization had floating interest rate provisions based on three-month LIBOR that reset quarterly as did the Class A-Refi 2010 Notes issued in connection with the refinancing of the 2010 Debt Securitization prior to their redemption on July 20, 2018. Prior to their redemption on March 23, 2018 the Class A-1, A-2 and B 2014 Notes issued as part of the 2014 Debt Securitization had floating interest rate provisions based on three-month LIBOR that reset quarterly as do the Class A-1-R, A-2 and B-R 2014 Notes issued in connection with the refinancing of the 2014 Debt Securitization. In addition, the Credit Facility has a floating interest rate provision based on one-month LIBOR that resets daily. We expect that other credit facilities into which we enter in the future may have floating interest rate provisions.

Assuming that the interim and unaudited Consolidated Statement of Financial Condition as of June 30, 2018 were to remain constant and that we took no actions to alter interest rate sensitivity as of such date, the following table shows the annualized impact of hypothetical base rate changes in interest rates.

Change in interest rates		Increase (decrease) in interest income				Increase (decrease) in interest expense				Net increase (decrease) in  investment income
		(In thousands)
Down 25 basis points		$	(3,947	)		$	(1,496	)		$	(2,451	)
Up 50 basis points		7,896				2,992				4,904
Up 100 basis points		15,792				5,985				9,807
Up 150 basis points		23,687				8,977				14,710
Up 200 basis points		31,582				11,969				19,613

Although we believe that this analysis is indicative of our sensitivity to interest rate changes as of June 30, 2018, it does not adjust for changes in the credit market, credit quality, the size and composition of the assets in our portfolio and other business developments, including borrowings under the Debt Securitizations and the Credit Facility, or other borrowings, that could affect net increase in net assets resulting from operations, or net income. Accordingly, we can offer no assurances that actual results would not differ materially from the analysis above.

We may in the future hedge against interest rate fluctuations by using standard hedging instruments such as interest rate swaps, futures, options and forward contracts to the limited extent permitted under the 1940 Act and applicable commodities laws. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in the benefits of lower interest rates with respect to the investments in our portfolio with fixed interest rates.

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Item 4: Controls and Procedures.

As of June 30, 2018 (the end of the period covered by this report), management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, or the Exchange Act). Based on that evaluation, our management, including the chief executive officer and chief financial officer, concluded that, at the end of such period, our disclosure controls and procedures were effective and provided reasonable assurance that information required to be disclosed in our periodic SEC filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in the Company’s periodic reports. There has not been any change in our internal controls over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

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Part II - Other Information

Item 1: Legal Proceedings.

We, GC Advisors and Golub Capital LLC may, from time to time, be involved in legal and regulatory proceedings arising out of our respective operations in the normal course of business or otherwise. While there can be no assurance of the ultimate disposition of any such proceedings, each of us, GC Advisors and Golub Capital LLC do not believe it is currently subject to any material legal proceedings.

Item 1A: Risk Factors.

There have been no material changes during the three months ended June 30, 2018 to the risk factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended September 30, 2017 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018.

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

None.

Item 3: Defaults Upon Senior Securities.

None.

Item 4: Mine Safety Disclosures.

None.

Item 5: Other Information.

None.

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Item 6: Exhibits.

EXHIBIT INDEX

Number		Description
31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*
31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*
32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

_________________

* Filed herewith

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Golub Capital BDC, Inc.
Dated: August 8, 2018	By	/s/ David B. Golub
		David B. Golub
		Chief Executive Officer
		(Principal Executive Officer)
Dated: August 8, 2018	By	/s/ Ross A. Teune
		Ross A. Teune
		Chief Financial Officer
		(Principal Accounting and Financial Officer)

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