# Bain Capital Specialty Finance, Inc.: Form 10-Q for the period ended Mar 31, 2022

- Company: [Bain Capital Specialty Finance, Inc.](/companies/bcsf.md) (CIK 1655050)
- Form: 10-Q
- Filed: 2022-05-05
- Accepted by EDGAR: May 5, 2022, 16:35 ET
- Period: 2022-03-31
- Accession: 0001104659-22-056502
- Inline XBRL: no
- Main document: https://www.sec.gov/Archives/edgar/data/1655050/000110465922056502/tm2213676d1_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1655050/000110465922056502/

## Management's discussion and analysis

As filed, 153,267 characters.

The following discussion and other parts of this report contain forward-looking information that involves risks and uncertainties. The discussion and analysis contained in this section refers to our financial condition, results of operations and cash flows. The information contained in this section should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this report. Please see “Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with this discussion and analysis. Our actual results could differ materially from those anticipated by such forward-looking information due to factors discussed under “Forward-Looking Statements” appearing elsewhere in this report.

### Overview

Bain Capital Specialty Finance, Inc. (the “Company”, “we”, “our” and “us”) is an externally managed specialty finance company focused on lending to middle market companies. We have elected to be regulated as a business development company (a “BDC”) under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “1940 Act”). We are managed by BCSF Advisors, LP (our “Advisor” or “BCSF Advisors”), a subsidiary of Bain Capital Credit, LP (“Bain Capital Credit”). Our Advisor is registered as an investment adviser with the SEC under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). Our Advisor also provides the administrative services necessary for us to operate (in such capacity, our “Administrator” or “BCSF Advisors”). Since we commenced operations on October 13, 2016 through March 31, 2022, we have invested approximately $5,322.3 million in aggregate principal amount of debt and equity investments prior to any subsequent exits or repayments. We seek to generate current income and, to a lesser extent, capital appreciation through direct originations of secured debt, including first lien, first lien/last-out, unitranche and second lien debt, investments in strategic joint ventures, equity investments and, to a lesser extent, corporate bonds.

On November 19, 2018, we closed our initial public offering (the “IPO”) issuing 7,500,000 shares of our common stock at a public offering price of $20.25 per share. Shares of common stock of the Company began trading on the New York Stock Exchange under the symbol “BCSF” on November 15, 2018.

Our primary focus is capitalizing on opportunities within our Senior Direct Lending strategy, which seeks to provide risk-adjusted returns and current income to our stockholders by investing primarily in middle-market companies with between $10.0 million and $150.0 million in annual earnings before interest, taxes, depreciation and amortization (“EBITDA”). However, we may, from time to time, invest in larger or smaller companies. We generally seek to retain effective voting control in respect of the loans or particular classes of securities in which we invest through maintaining affirmative voting positions or negotiating consent rights that allow us to retain a blocking position. We focus on senior investments with a first or second lien on collateral and strong structures and documentation intended to protect the lender. We may also invest in mezzanine debt and other junior securities, including common and preferred equity, on an opportunistic basis, and in secondary purchases of assets or portfolios but such investments are not the principal focus of our investment strategy. In addition, we may invest, from time to time, in distressed debt, debtor-in-possession loans, structured products, structurally subordinate loans, investments with deferred interest features, zero-coupon securities and defaulted securities.

We generate revenues primarily through receipt of interest income from the investments we hold. In addition, we generate income from various loan origination and other fees, dividends on direct equity investments and capital gains on the sales of investments. The companies in which we invest use our capital for a variety of reasons, including to support organic growth, to fund changes of control, to fund acquisitions, to make capital investments and for refinancing and recapitalizations.

#### Investments

Our level of investment activity may vary substantially from period to period depending on many factors, including the amount of debt and equity capital available to middle-market companies, the level of merger and acquisition activity for such companies, the level of investment and capital expenditures of such companies, the general economic environment, the amount of capital we have available to us and the competitive environment for the type of investments we make. Due to the impact of COVID-19 and related measures taken to contain its spread, the future duration and breadth of the adverse impact of COVID-19 on the broader markets in which the Company invests cannot currently be accurately predicted and future investment activity of the Company will be subject to these effects and the related uncertainty.

As a BDC, we may not acquire any assets other than “qualifying assets” specified in the 1940 Act, unless, at the time the acquisition is made, at least 70% of our total assets are qualifying assets (with certain limited exceptions). Qualifying assets include investments in “eligible portfolio companies.” Pursuant to rules adopted by the SEC, “eligible portfolio companies” include certain companies that do not have any securities listed on a national securities exchange and public companies whose securities are listed on a national securities exchange but whose market capitalization is less than $250 million.

As a BDC, we may also invest up to 30% of our portfolio opportunistically in “non-qualifying” portfolio investments, such as investments in non-U.S. companies.

#### Revenues

We primarily generate revenue in the form of interest income on debt investments and distributions on equity investments and, to a lesser extent, capital gains, if any, on equity securities that we may acquire in portfolio companies. Some of our investments may provide for deferred interest payments or payment-in-kind (“PIK”) interest. The principal amount of the debt investments and any accrued but unpaid interest generally becomes due at the maturity date. In addition, we may generate revenue in the form of commitment, origination, structuring or 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 into or against income over the life of the loan. We record contractual prepayment premiums on loans and debt securities as interest income.

Our debt investment portfolio consists of primarily floating rate loans. As of March 31, 2022 and December 31, 2021, 96.3% and 97.8%, respectively, of our debt investments, based on fair value, bore interest at floating rates, which may be subject to interest rate floors. Variable-rate investments subject to a floor generally reset periodically to the applicable floor, only if the floor exceeds the index. Trends in base interest rates, such as LIBOR, may affect our net investment income over the long term. In addition, our results may vary from period to period depending on the interest rates of new investments made during the period compared to investments that were sold or repaid during the period; these results reflect the characteristics of the particular portfolio companies that we invested in or exited during the period and not necessarily any trends in our business or macroeconomic trends.

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

#### Expenses

Our primary operating expenses include the payment of fees to our Advisor under the Amended Advisory Agreement, our allocable portion of overhead expenses under the administration agreement (the “Administration Agreement”) and other operating costs, including those described below. The Base Management Fee and Incentive Fee compensate our Advisor for its work in identifying, evaluating, negotiating, closing and monitoring our investments. We bear all other out-of-pocket costs and expenses of our operations and transactions, including:

- our operational and organizational cost;
- the costs of any public offerings of our common stock and other securities, including registration and listing fees;
- costs of calculating our net asset value (including the cost and expenses of any third-party valuation services);
- fees and expenses payable to third parties relating to evaluating, making and disposing of investments, including our Advisor’s or its affiliates’ travel expenses, research costs and out-of-pocket fees and expenses associated with performing due diligence and reviews of prospective investments, monitoring our investments and, if necessary, enforcing our rights;
- interest payable on debt and other borrowing costs, if any, incurred to finance our investments;
- costs of effecting sales and repurchases of our common stock and other securities;
- distributions on our common stock;
- transfer agent and custody fees and expenses;
- the allocated costs incurred by the Administrator in providing managerial assistance to those portfolio companies that request it;
- other expenses incurred by BCSF Advisors or us in connection with administering our business, including payments made to third-party providers of goods or services;
- brokerage fees and commissions;
- federal and state registration fees;
- U.S. federal, state and local taxes;
- Independent Director fees and expenses;
- costs associated with our reporting and compliance obligations under the 1940 Act and applicable U.S. federal and state securities laws;
- costs of any reports, proxy statements or other notices to our stockholders, including printing costs;
- costs of holding stockholder meetings;
- our fidelity bond;
- directors’ and officers’ errors and omissions liability insurance, and any other insurance premiums;
- litigation, indemnification and other non-recurring or extraordinary expenses;
- direct costs and expenses of administration and operation, including printing, mailing, long distance telephone, staff, audit, compliance, tax and legal costs;
- fees and expenses associated with marketing efforts;
- dues, fees and charges of any trade association of which we are a member; and
- all other expenses reasonably incurred by us or the Administrator in connection with administering our business.

To the extent that expenses to be borne by us are paid by BCSF Advisors, we will generally reimburse BCSF Advisors for such expenses. To the extent the Administrator outsources any of its functions, the Company will pay the fees associated with such functions on a direct basis without profit to the Administrator. We will also reimburse the Administrator for its costs and expenses and our allocable portion of overhead incurred by it in performing its obligations under the Administration Agreement, including certain rent and compensation paid to or compensatory distributions received by our officers (including our Chief Compliance Officer and Chief Financial Officer) and any of their respective staff who provide services to us, operations staff who provide services to us, internal audit staff, if any, to the extent internal audit performs a role in our Sarbanes-Oxley internal control assessment and fees paid to third-party providers for goods or services. Our allocable portion of overhead will be determined by the Administrator, which expects to use various methodologies such as allocation based on the percentage of time certain individuals devote, on an estimated basis, to our business and affairs, and will be subject to oversight by our Board of Directors (our “Board”). We incurred expenses related to the Administrator of $0.0 million and $0.0 million for the three months ended March 31, 2022 and 2021, respectively, which is included in other general and administrative expenses on the consolidated statements of operations. The sub-administrator is paid its compensation for performing its sub-administrative services under the sub-administration agreement. We incurred expenses related to the sub-administrator of $0. 2 million and $0.1 million for the three months ended March 31, 2022 and 2021, respectively which is included in other general and administrative expenses on the consolidated statements of operations. BCSF Advisors will not be reimbursed to the extent that such reimbursements would cause any distributions to our stockholders to constitute a return of capital. All of the foregoing expenses are ultimately borne by our stockholders.

### Leverage

We may borrow money from time to time. However, our ability to incur indebtedness (including by issuing preferred stock), is limited by applicable regulations such that our asset coverage, as defined in the 1940 Act, must equal at least 150%. In determining whether to borrow money, we will analyze the maturity, covenant package and rate structure of the proposed borrowings as well as the risks of such borrowings compared to our investment outlook. As of March 31, 2022, the Company’s asset coverage was 201%.

### Recent Events

On February 24, 2022, Russia launched a full-scaled military invasion of Ukraine. In response, countries worldwide, including the United States, have imposed sanctions against Russia on certain businesses and individuals, including, but not limited to, those in the banking, import and export sectors. This invasion has led, is currently leading, and for an unknown period of time will continue to lead to disruptions in local, regional, national, and global markets and economies affected thereby. These disruptions caused by the invasion have included, and may continue to include, political, social, and economic disruptions and uncertainties that may affect our business operations or the business operations of our portfolio companies.

### Investment Decision Process

The Advisor’s investment process can be broken into four processes: (1) Sourcing and Idea Generation, (2) Investment Diligence & Recommendation, (3) Credit Committee Approval and Portfolio Construction and (4) Portfolio & Risk Management.

#### Sourcing and Idea Generation

The investment decision-making process begins with sourcing ideas. Bain Capital Credit’s Private Credit Group interacts with over 1,500 global contacts as a means to generate middle market investment opportunities. Our Advisor also seeks to leverage the contacts of Bain Capital Credit’s industry groups, Trading Desk, Portfolio Group and Restructuring team, including private equity firms, banks and a variety of advisors and other intermediaries.

#### Investment Diligence & Recommendation

Our Advisor utilizes Bain Capital Credit’s bottom-up approach to investing, and it starts with the due diligence performed by its Private Credit Group. The group works with the close support of Bain Capital Credit’s industry groups. This diligence process typically begins with a detailed review of an offering memorandum as well as Bain Capital Credit’s own independent diligence efforts, including in-house materials and expertise, third-party independent research and interviews, and hands-on field checks where appropriate. For deals that progress beyond an initial stage, the team will usually schedule one or more meetings with company management, facilities visits and also meetings with the sponsor in order to ask more detailed questions and to better understand the sponsor’s view of the business and plans for it going forward. The team’s diligence work is summarized in investment memoranda and accompanying credit packs. Work product also includes full models and covenant analysis.

#### Credit Committee Approval and Portfolio Construction

If the reviewing team deems an investment worthy of serious consideration, it generally must be presented to the credit committee, which is comprised of at least three experienced credit professionals, who are selected based on strategy and geography. A portfolio manager leads the decision making process for each investment and engages the credit committee throughout the investment process in order to prioritize and direct the underwriting of each potential investment opportunity. For middle market holdings, the path to exit an investment is often discussed at credit committee meetings, including restructurings, acquisitions and sale to strategic buyers. Since most middle market investments are illiquid, exits are driven by a sale of the portfolio company or a refinancing of the portfolio company’s debt.

#### Portfolio & Risk Management

Our Advisor utilizes Bain Capital Credit’s Private Credit Group for the daily monitoring of its respective credits after an investment has been made. Our Advisor believes that the ongoing monitoring of financial performance and market developments of portfolio investments is critical to successful investment management. Accordingly, our Advisor is actively involved in an on-going portfolio review process and attends board meetings. To the extent a portfolio investment is not meeting our Advisor’s expectations, our Advisor takes corrective action when it deems appropriate, which may include raising interest rates, gaining a more influential role on its board, taking warrants and, where appropriate, restructuring the balance sheet to take control of the company. Our Advisor will utilize the Bain Capital Credit Risk and Oversight Committee. The Risk and Oversight Committee is responsible for monitoring and reviewing risk management, including portfolio risk, counterparty risk and firm-wide risk issues. In addition to the methods noted above, there are a number of proprietary methods and tools used through all levels of Bain Capital Credit to manage portfolio risk.

#### Environmental, Social and Governance

Our Advisor believes that environmental, social, and governance (ESG) management helps to create lasting impact for all of its stakeholder groups, including investors, portfolio companies, employees and communities. ESG risks can have a negative impact on an issuer’s ability to meet its financial obligations. Therefore, strong ESG management aligns with our Advisor’s goal to seek and generate attractive risk-adjusted returns with the capital it invests. Our Advisor considers ESG factors throughout its investment decision-making process. These factors include, but are not limited to, applying a negative screen to avoid investing in companies with outsized ESG risks; examining the impact a company has on society and the environment during the diligence process; seeking to consider ESG factors from a company-specific and sector-wide perspective; and engaging companies via proxy voting, corporate actions and board seats, where applicable.

### Portfolio and Investment Activity

During the three months ended March 31, 2022, we invested $374.9 million, including PIK, in 48 portfolio companies, and had $521.0 million in aggregate amount of principal repayments and sales, resulting in a net decrease in investments of $146.1 million for the period. Of the $374.9 million invested during the three months ended March 31, 2022, $25.8 million was related to drawdowns on delayed draw term loans and revolvers of our portfolio companies.

During the three months ended March 31, 2021, we invested $386.3 million, including PIK, in 30 portfolio companies, and had $549.4 million in aggregate amount of principal repayments and sales, resulting in a net increase in investments of $163.1 million for the period. Of the $386.3 million invested during the three months ended March 31, 2021, $25.7 million was related to drawdowns on delayed draw term loans and revolvers of our portfolio companies.

The following table shows the composition of the investment portfolio and associated yield data as of March 31, 2022 (dollars in thousands):

|  | As of March 31, 2022 Amortized Cost | Percentage of Total Portfolio | Fair Value | Percentage of Total Portfolio | Weighted Average Yield (1) at Amortized Cost | Market Value |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| First Lien Senior Secured Loans | $1,557,724 | 71.8% | $1,517,163 | 70.4% | 7.4% | 7.6% |
| Equity Interest | 199,422 | 9.2 | 204,417 | 9.5 | 8.9 | 9.9 |
| Subordinated Note Investment Vehicles (2) | 169,412 | 7.8 | 169,412 | 7.9 | 9.2 | 9.2 |
| Second Lien Senior Secured Loans | 112,625 | 5.2 | 111,126 | 5.2 | 9.9 | 10.0 |
| Preferred Equity | 43,443 | 2.0 | 60,980 | 2.8 | 10.0 | 9.7 |
| Equity Interest Investment Vehicles (1) | 47,703 | 2.2 | 51,855 | 2.4 | 11.4 | 10.4 |
| Subordinated Debt | 38,325 | 1.8 | 39,117 | 1.8 | 11.5 | 11.3 |
| Warrants | 478 | 0.0 | 592 | 0.0 | N/A | N/A |
| Preferred Equity Interest in Investment Vehicles (2) | 10 | 0.0 | 10 | 0.0 | N/A | N/A |
| Total | $2,169,142 | 100.0% | $2,154,672 | 100.0% | 7.9% | 8.1% |

(1) Weighted average yields are computed as (a) the annual stated interest rate or yield earned on the relevant accruing debt and other income producing securities, divided by (b) the total relevant investments at amortized cost or at fair value, as applicable. The weighted average yield does not represent the total return to our stockholders.

(2) Represents debt and equity investment in ISLP and SLP.

The following table shows the composition of the investment portfolio and associated yield data as of December 31, 2021 (dollars in thousands):

|  | As of December 31, 2021 Amortized Cost | Percentage of Total Portfolio | Fair Value | Percentage of Total Portfolio | Weighted Average Yield (1) at Amortized Cost | Market Value |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| First Lien Senior Secured Loans | $1,807,805 | 78.2% | $1,774,675 | 77.5% | 7.3% | 7.4% |
| Equity Interest | 156,399 | 6.8 | 151,844 | 6.6 | 7.9 | 9.7 |
| Subordinated Note Investment Vehicles (2) | 125,437 | 5.5 | 125,437 | 5.5 | 9.0 | 9.0 |
| Second Lien Senior Secured Loans | 120,058 | 5.2 | 118,561 | 5.2 | 9.8 | 9.9 |
| Preferred equity | 42,452 | 1.8 | 53,991 | 2.4 | 10.0 | 9.5 |
| Equity Interest in Investment Vehicles (2) | 39,596 | 1.7 | 44,444 | 1.9 | 8.4 | 7.5 |
| Subordinated Debt | 19,635 | 0.8 | 20,027 | 0.9 | 11.4 | 11.2 |
| Warrants | 2 | 0.0 | 126 | 0.0 | N/A | N/A |
| Total | $2,311,384 | 100.0% | $2,289,105 | 100.0% | 7.6% | 7.8% |

(1) Weighted average yields are computed as (a) the annual stated interest rate or yield earned on the relevant accruing debt and other income producing securities, divided by (b) the total relevant investments at amortized cost or at fair value, as applicable. The weighted average yield does not represent the total return to our stockholders.

(2) Represents debt and equity investment in ISLP.

76

The following table presents certain selected information regarding our investment portfolio as of March 31, 2022:

|  | As of March 31, 2022 |
| --- | ---: |
| Number of portfolio companies | 115 |
| Percentage of debt bearing a floating rate (1) | 96.3% |
| Percentage of debt bearing a fixed rate (1) | 3.7% |

(1) Measured on a fair value basis.

The following table presents certain selected information regarding our investment portfolio as of December 31, 2021:

|  | As of December 31, 2021 |
| --- | ---: |
| Number of portfolio companies | 106 |
| Percentage of debt bearing a floating rate (1) | 97.8% |
| Percentage of debt bearing a fixed rate (1) | 2.2% |

(1) Measured on a fair value basis.

The following table shows the amortized cost and fair value of our performing and non-accrual investments as of March 31, 2022 (dollars in thousands):

|  | As of March 31, 2022 Amortized Cost | Percentage at Amortized Cost | Fair Value | Percentage at Fair Value |
| --- | ---: | ---: | ---: | ---: |
| Performing | $2,169,142 | 100.0% | $2,154,672 | 100.0% |
| Non-accrual | — | 0.0 | — | 0.0 |
| Total | $2,169,142 | 100.0% | $2,154,672 | 100.0% |

The following table shows the amortized cost and fair value of our performing and non-accrual investments as of December 31, 2021 (dollars in thousands):

|  | As of December 31, 2021 Amortized Cost | Percentage at Amortized Cost | Fair Value | Percentage at Fair Value |
| --- | ---: | ---: | ---: | ---: |
| Performing | $2,311,384 | 100.0% | $2,289,105 | 100.0% |
| Non-accrual | — | 0.0 | — | 0.0 |
| Total | $2,311,384 | 100.0% | $2,289,105 | 100.0% |

Loans or debt securities are placed on non-accrual status when there is reasonable doubt that principal or interest will be collected. Accrued interest generally is reversed when a loan or debt security is placed on non-accrual status. Interest payments received on non-accrual loans or debt securities may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans and debt securities are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current. We may make exceptions to this treatment if the loan has sufficient collateral value and is in the process of collection. As of March 31, 2022, there were no loans placed on non-accrual in the Company’s portfolio. As of December 31, 2021, there were no loans placed on non-accrual in the Company’s portfolio.

The following table shows the amortized cost and fair value of the investment portfolio, cash and cash equivalents and foreign cash as of March 31, 2022 (dollars in thousands):

|  | As of March 31, 2022 Amortized Cost | Percentage of Total | Fair Value | Percentage of Total |
| --- | ---: | ---: | ---: | ---: |
| Cash and cash equivalents | $55,963 | 2.5% | $55,963 | 2.5% |
| Foreign cash | 24,844 | 1.1 | 24,844 | 1.1 |
| Restricted cash | 34,032 | 1.5 | 34,032 | 1.5 |
| First Lien Senior Secured Loans | 1,557,724 | 68.2 | 1,517,163 | 66.8 |
| Equity Interest | 199,422 | 8.7 | 204,417 | 9.0 |
| Subordinated Note in Investment Vehicles (1) | 169,412 | 7.4 | 169,412 | 7.5 |
| Second Lien Senior Secured Loans | 112,625 | 4.9 | 111,126 | 4.9 |
| Preferred Equity | 47,703 | 2.1 | 60,980 | 2.7 |
| Equity Interest Investment Vehicles (1) | 43,443 | 1.9 | 51,855 | 2.3 |
| Subordinated Debt | 38,325 | 1.7 | 39,117 | 1.7 |
| Warrants | 478 | 0.0 | 592 | 0.0 |
| Preferred Equity Interests in Investment Vehicles (1) | 10 | 0.0 | 10 | 0.0 |
| Total | $2,283,981 | 100.0% | $2,269,511 | 100.0% |

(1) Represents debt and equity investment in ISLP and SLP

The following table shows the amortized cost and fair value of the investment portfolio, cash and cash equivalents and foreign cash as of December 31, 2021 (dollars in thousands):

|  | As of December 31, 2021 Amortized Cost | Percentage of Total | Fair Value | Percentage of Total |
| --- | ---: | ---: | ---: | ---: |
| Cash and cash equivalents | $87,443 | 3.5% | $87,443 | 3.5% |
| Foreign cash | 30,877 | 1.2 | 29,979 | 1.2 |
| Restricted cash and cash equivalents | 86,159 | 3.4 | 86,159 | 3.5 |
| First Lien Senior Secured Loans | 1,807,805 | 71.9 | 1,774,675 | 71.2 |
| Equity Interest | 156,399 | 6.1 | 151,844 | 6.1 |
| Subordinated Note Investment Vehicles (1) | 125,437 | 5.0 | 125,437 | 5.0 |
| Second Lien Senior Secured Loans | 120,058 | 4.8 | 118,561 | 4.7 |
| Preferred Equity | 42,452 | 1.7 | 53,991 | 2.2 |
| Equity Interest Investment Vehicles (1) | 39,596 | 1.6 | 44,444 | 1.8 |
| Subordinated Debt | 19,635 | 0.8 | 20,027 | 0.8 |
| Warrants | 2 | 0.0 | 126 | 0.0 |
| Total | $2,515,863 | 100.0% | $2,492,686 | 100.0% |

(1) Represents debt and equity investment in ISLP

The following table shows the composition of the investment portfolio by industry, at amortized cost and fair value as of March 31, 2022 (with corresponding percentage of total portfolio investments) (dollars in thousands):

|  | As of March 31, 2022 Amortized Cost | Percentage of Total Portfolio | Fair Value | Percentage of Total Portfolio |
| --- | ---: | ---: | ---: | ---: |
| Aerospace & Defense | $317,801 | 14.8% | $299,223 | 13.8% |
| Services: Business | 252,382 | 11.6 | 249,548 | 11.5 |
| Investment Vehicles (2) | 217,125 | 10.0 | 221,277 | 10.3 |
| High Tech Industries | 190,399 | 8.8 | 190,481 | 8.8 |
| Consumer Goods: Non-Durable | 139,213 | 6.4 | 141,217 | 6.6 |
| Transportation: Cargo | 85,257 | 3.9 | 89,140 | 4.1 |
| Automotive | 83,261 | 3.8 | 82,738 | 3.8 |
| Healthcare & Pharmaceuticals | 82,673 | 3.8 | 80,994 | 3.8 |
| Consumer Goods: Durable | 81,927 | 3.8 | 76,386 | 3.5 |
| Transportation: Consumer | 81,494 | 3.8 | 71,221 | 3.3 |
| Energy: Oil & Gas | 54,672 | 2.5 | 69,769 | 3.2 |
| Wholesale | 62,627 | 2.9 | 66,522 | 3.1 |
| Hotel, Gaming & Leisure | 65,457 | 3.0 | 64,079 | 3.0 |
| Retail | 61,329 | 2.8 | 60,910 | 2.8 |
| Construction & Building | 60,712 | 2.8 | 58,504 | 2.7 |
| FIRE: Insurance (1) | 51,862 | 2.4 | 52,408 | 2.4 |
| FIRE: Finance (1) | 46,879 | 2.2 | 47,052 | 2.2 |
| Media: Diversified & Production | 40,315 | 1.9 | 38,911 | 1.8 |
| Media: Advertising, Printing & Publishing | 51,287 | 2.4 | 37,911 | 1.8 |
| Telecommunications | 33,421 | 1.5 | 34,047 | 1.6 |
| Services: Consumer | 30,729 | 1.4 | 31,255 | 1.5 |
| Beverage, Food & Tobacco | 7,563 | 0.3 | 19,740 | 0.9 |
| Capital Equipment | 18,601 | 0.9 | 18,487 | 0.9 |
| Chemicals, Plastics & Rubber | 13,922 | 0.6 | 14,391 | 0.7 |
| Containers, Packaging & Glass | 13,807 | 0.6 | 14,139 | 0.7 |
| Consumer Goods: Wholesale | 8,847 | 0.4 | 8,008 | 0.4 |
| Banking | 7,759 | 0.4 | 7,917 | 0.4 |
| Hospitality Holdings | 5,000 | 0.2 | 5,587 | 0.3 |
| Media: Broadcasting and Subscription | 2,821 | 0.1 | 2,810 | 0.1 |
| Total | $2,169,142 | 100.0% | $2,154,672 | 100.0% |

(1) Finance, Insurance, and Real Estate (“FIRE”).

(2) Represents debt and equity investment in ISLP and SLP.

The following table shows the composition of the investment portfolio by industry, at amortized cost and fair value as of December 31, 2021 (with corresponding percentage of total portfolio investments) (dollars in thousands):

|  | As of December 31, 2021 Amortized Cost | Percentage of Total Portfolio | Fair Value | Percentage of Total Portfolio |
| --- | ---: | ---: | ---: | ---: |
| Aerospace & Defense | $309,458 | 13.4% | $282,598 | 12.3% |
| Services: Business | 226,035 | 9.8 | 225,437 | 9.8 |
| High Tech Industries | 182,811 | 7.9 | 183,069 | 8.0 |
| Consumer Goods: Non-Durable | 179,733 | 7.8 | 182,063 | 8.0 |
| Investment Vehicles (2) | 165,033 | 7.1 | 169,881 | 7.4 |
| Transportation: Cargo | 103,012 | 4.5 | 106,458 | 4.7 |
| Healthcare & Pharmaceuticals | 102,116 | 4.4 | 100,771 | 4.4 |
| Automotive | 87,597 | 3.8 | 88,555 | 3.9 |
| Retail | 83,036 | 3.6 | 83,064 | 3.6 |
| Wholesale | 77,737 | 3.4 | 80,070 | 3.5 |
| Energy: Oil & Gas | 69,588 | 3.0 | 79,548 | 3.5 |
| Consumer Goods: Durable | 83,903 | 3.6 | 76,575 | 3.3 |
| Transportation: Consumer | 80,027 | 3.5 | 69,040 | 3.0 |
| Construction & Building | 70,256 | 3.0 | 68,570 | 3.0 |
| Capital Equipment | 65,129 | 2.8 | 64,841 | 2.8 |
| FIRE: Insurance | 62,165 | 2.7 | 63,123 | 2.8 |
| Hotel, Gaming & Leisure | 53,232 | 2.3 | 51,956 | 2.3 |
| Media: Diversified & Production | 46,420 | 2.0 | 44,835 | 2.0 |
| Telecommunications | 40,938 | 1.8 | 41,570 | 1.8 |
| Services: Consumer | 40,467 | 1.8 | 41,236 | 1.8 |
| Media: Advertising, Printing & Publishing | 50,389 | 2.2 | 39,459 | 1.7 |
| Containers, Packaging & Glass | 27,379 | 1.2 | 27,378 | 1.2 |
| Chemicals, Plastics & Rubber | 26,135 | 1.1 | 26,863 | 1.2 |
| FIRE: Finance (1) | 24,245 | 1.0 | 24,452 | 1.1 |
| Beverage, Food & Tobacco | 7,563 | 0.3 | 19,755 | 0.9 |
| Banking | 18,370 | 0.8 | 18,690 | 0.8 |
| Consumer Goods: Wholesale | 14,870 | 0.6 | 14,827 | 0.6 |
| Media: Broadcasting and Subscription | 8,740 | 0.4 | 8,979 | 0.4 |
| Hospitality Holdings | 5,000 | 0.2 | 5,442 | 0.2 |
| Total | $2,311,384 | 100.0% | $2,289,105 | 100.0% |

(1) Finance, Insurance, and Real Estate (“FIRE”).

(2) Represents debt and equity investment in ISLP.

Our Advisor monitors our portfolio companies on an ongoing basis. It monitors the financial trends of each portfolio company to determine if they are meeting their respective business plans and to assess the appropriate course of action for each company. The Advisor has several methods of evaluating and monitoring the performance and fair value of our investments, which may include the following:

- assessment of success in adhering to the portfolio company’s business plan and compliance with covenants;
- periodic or regular contact with portfolio company management and, if appropriate, the financial or strategic sponsor to discuss financial position, requirements and accomplishments;
- comparisons to our other portfolio companies in the industry, if any;
- attendance at and participation in board meetings or presentations by portfolio companies; and
- review of monthly and quarterly financial statements and financial projections of portfolio companies.

Our Advisor rates the investments in our portfolio at least quarterly and it is possible that the rating of a portfolio investment may be reduced or increased over time. For investments rated 3 or 4, our Advisor enhances its level of scrutiny over the monitoring of such portfolio company. 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.

- An investment is rated 1 if, in the opinion of our Advisor, it is performing above underwriting expectations, and the business trends and risk factors are generally favorable, which may include the performance of the portfolio company or the likelihood of a potential exit.
- An investment is rated 2 if, in the opinion of our Advisor, it is performing as expected at the time of our underwriting and there are generally no concerns about the portfolio company’s performance or ability to meet covenant requirements, interest payments or principal amortization, if applicable. All new investments or acquired investments in new portfolio companies are initially given a rating of 2.
- An investment is rated 3 if, in the opinion of our Advisor, the investment is performing below underwriting expectations and there may be concerns about the portfolio company’s performance or trends in the industry, including as a result of factors such as declining performance, non-compliance with debt covenants or delinquency in loan payments (but generally not more than 180 days past due).
- An investment is rated 4 if, in the opinion of our Advisor, the investment is performing materially below underwriting expectations. For debt investments, most of or all of the debt covenants are out of compliance and payments are substantially delinquent. Investments rated 4 are not anticipated to be repaid in full, if applicable, and there is significant risk that we may realize a substantial loss on our investment.

The following table shows the composition of our portfolio on the 1 to 4 rating scale as of March 31, 2022 (dollars in thousands):

| Investment Performance Rating | As of March 31, 2022 Fair Value | Percentage of Total | Number of Companies(1) | Percentage of Total |
| ---: | ---: | ---: | ---: | ---: |
| 1 | $30,836 | 1.5% | 3 | 2.6% |
| 2 | 1,939,645 | 90.0 | 105 | 91.3 |
| 3 | 184,191 | 8.5 | 7 | 6.1 |
| 4 | — | 0.0 | — | 0.0 |
| Total | $2,154,672 | 100.0% | 115 | 100.0% |

(1) Number of investment rated companies may not agree to total portfolio companies due to investments across investment types and structures.

The following table shows the composition of our portfolio on the 1 to 4 rating scale as of December 31, 2021 (dollars in thousands):

| Investment Performance Rating | As of December 31, 2021 Fair Value | Percentage of Total | Number of Companies(1) | Percentage of Total |
| ---: | ---: | ---: | ---: | ---: |
| 1 | $42,233 | 1.9% | 4 | 3.8% |
| 2 | 2,017,059 | 88.1 | 95 | 89.6 |
| 3 | 229,813 | 10.0 | 7 | 6.6 |
| 4 | — | 0.0 | — | 0.0 |
| Total | $2,289,105 | 100.0% | 106 | 100.0% |

(1) Number of investment rated companies may not agree to total portfolio companies due to investments across investment types and structures.

On February 9, 2021, the Company and Pantheon ("Pantheon"), a leading global alternative private markets manager, formed the International Senior Loan Program, LLC (“ISLP”), an unconsolidated joint venture. ISLP invests primarily in non-US first lien senior secured loans. ISLP was formed as a Delaware limited liability company. The Company and Pantheon committed to initially provide $138.3 million of debt and $46.1 million of equity capital, to ISLP. Equity contributions will be called from each member on a pro-rata basis, based on their equity commitments. Pursuant to the terms of the transaction, Pantheon invested $50.0 million to acquire a 29.5% stake in ISLP. The Company contributed debt investments of $317.1 million for a 70.5% stake in ISLP, and received a one-time gross distribution of $190.2 million in cash in consideration of contributing such investments. As of March 31, 2022, the Company’s investment in ISLP consisted of subordinated notes of $133.6 million, and equity interests of $46.3 million. As of December 31, 2021, the Company’s investment in ISLP consisted of subordinated notes of $125.4 million, and equity interests of $44.4 million

As of March 31, 2022, the Company had commitments with respect to their equity and subordinated note interests of ISLP in the aggregate amount of $249.3 million. The Company has contributed $178.2 million in capital and has $71.1 million in unfunded capital contributions. As of March 31, 2022, Pantheon had commitments with respect to their equity and subordinated note interests of ISLP in the aggregate amount of $103.9 million. Pantheon has contributed $69.2 million in capital and has $34.7 million in unfunded capital contributions.

As of December 31, 2021, the Company had commitments with respect to their equity and subordinated note interests of ISLP in the aggregate amount of $189.5 million. The Company has contributed $165.7 million in capital and has $23.8 million in unfunded capital contributions. As of March 31, 2022, Pantheon had commitments with respect to their equity and subordinated note interests of ISLP in the aggregate amount of $78.9 million. Pantheon has contributed $69.8 million in capital and has $9.1 million in unfunded capital contributions.

In future periods, the Company may sell certain of its investments or a participating interest in certain of its investments to ISLP. Since inception, the Company has sold $607.2 million of its investments to ISLP. The sale of the investments met the criteria set forth in ASC 860, Transfers and Servicing for treatment as a sale.

The Company has determined that ISLP is an investment company under ASC, Topic 946, Financial Services—Investment Companies; however, in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a wholly or substantially owned investment company subsidiary, which is an extension of the operations of the Company, or a controlled operating company whose business consists of providing services to the Company. The Company does not consolidate its investments in ISLP as it is not a substantially wholly owned investment company subsidiary. In addition, the Company does not control ISLP due to the allocation of voting rights among ISLP members. The Company measures the fair value of ISLP in accordance with ASC Subtopic 820, Fair Value Measurements and Disclosures, using the net asset value (or its equivalent) as a practical expedient. The Company and Pantheon each appointed two members to ISLP’s four-person Member Designees’ Committee. All material decisions with respect to ISLP, including those involving its investment portfolio, require unanimous approval of a quorum of Member Designees’ Committee.

As of March 31, 2022, ISLP had $519.8 million in debt investments, at fair value. As of December 31, 2021, ISLP had $501.5 million in debt investments, at fair value.

Additionally, ISLP, through a wholly-owned subsidiary, has entered into a $300.0 million senior secured revolving credit facility which bears interest at LIBOR (or an alternative risk-free interest rate index) plus 225 basis points with JP Morgan through its wholly-owned subsidiary, subject to leverage and borrowing base restrictions (the “ISLP Credit Facility”). The maturity date of the ISLP Credit Facility is February 9, 2026. On February 4, 2022, ISLP entered into the second amended and restated credit agreement, which among other things increased the financing limit from $300.0 million to $350.0 million. As of March 31, 2022, the ISLP Credit Facility had $304.9 million of outstanding debt under the credit facility. As of December 31, 2021 the ISLP Credit Facility had $272.1 million of outstanding debt under the credit facility. As of March 31, 2022, the effective rate on the ISLP Credit Facility was 2.5% per annum. As of December 31, 2021, the effective rate on the ISLP Credit Facility was 2.5% per annum.

Below is a summary of ISLP’s portfolio at fair value:

|  | As of March 31, 2022 | As of December 31, 2021 |
| --- | ---: | ---: |
| Total investments | $519,752 | $501,545 |
| Weighted average yield on investments | 6.5% | 6.5% |
| Number of borrowers in ISLP | 27 | 27 |
| Largest portfolio company investment | $43,787 | $40,071 |
| Total of five largest portfolio company investments | $171,531 | $171,291 |
| Unfunded commitments | $4,502 | $105 |

84

Below is a listing of ISLP’s individual investments as of:

### (unaudited)

| Currency Industry Australian Dollar | Portfolio Company | Investment Type | Spread Above Index | Interest Rate | Maturity Date | Currency Principal/Shares Cost | Market Value | % of Members Equity |
| --- | --- | --- | --- | ---: | --- | --- | ---: | ---: |
| Healthcare & Pharmaceuticals | Datix Bidco Limited | First Lien Senior Secured Loan | BBSW+ 4.00% | 4.25% | 4/28/2025 | AUD 4,169 3,290 | 3,125 |  |
|  |  |  |  |  |  | **Healthcare & Pharmaceuticals Total** 3,290 | 3,125 | 4.8% |
| Media: Advertising, Printing & Publishing | TGI Sport Bidco Pty Ltd | First Lien Senior Secured Loan | BBSY+ 7.00% | 7.50% | 4/30/2026 | AUD 9,610 6,898 | 6,843 |  |
|  |  |  |  |  |  | **Media: Advertising, Printing & Publishing Total** 6,898 | 6,843 | 10.6% |
| Services: Consumer | Zeppelin BidCo Pty Limited | First Lien Senior Secured Loan | BBSY+ 5.00% | 5.19% | 6/28/2024 | AUD 20,415 16,057 | 15,303 |  |
|  |  |  |  |  |  | **Services: Consumer Total** 16,057 | 15,303 | 23.7% |
|  |  |  |  |  |  | **Australian Dollar Total** 26,245 | 25,271 | 39.1% |
| British Pound |  |  |  |  |  |  |  |  |
| Healthcare & Pharmaceuticals | Datix Bidco Limited | Second Lien Senior Secured Loan | L+ 7.75% | 8.21% | 4/27/2026 | £12,013 16,916 | 15,783 |  |
|  | Datix Bidco Limited | First Lien Senior Secured Loan - Revolver | SONIA+ 4.50% | 4.96% | 10/28/2024 | £963 1,323 | 1,265 |  |
|  |  |  |  |  |  | **Healthcare & Pharmaceuticals Total** 18,239 | 17,048 | 26.4% |
| High Tech Industries | Armstrong Bidco Limited | First Lien Senior Secured Loan | SONIA+ 5.25% | 6.06% | 4/30/2025 | £5,602 7,711 | 7,361 |  |
|  |  |  |  |  |  | **High Tech Industries Total** 7,711 | 7,361 | 11.4% |
| Media: Diversified & Production | International Entertainment Investments Limited | First Lien Senior Secured Loan | SONIA+ 4.75% | 5.06% | 5/31/2023 | £8,734 12,255 | 11,440 |  |
|  |  |  |  |  |  | **Media: Diversified & Production Total** 12,255 | 11,440 | 17.7% |
| Services: Business | Comet Bidco Limited | First Lien Senior Secured Loan | SONIA+ 5.25% | 5.42% | 9/30/2024 | £7,362 9,528 | 8,970 |  |
|  | Brook Bidco Facility B | First Lien Senior Secured Loan | L+ 6.00% | 6.31% | 7/7/2028 | £21,167 28,821 | 27,811 |  |
|  | Brook Bidco I T/L Capex and Acquisition 1 | First Lien Senior Secured Loan | SONIA+ 6.00% | 6.75% | 7/7/2028 | £4,600 6,168 | 6,044 |  |
|  | Brook Bidco I T/L Capex and Acquisition 2 | First Lien Senior Secured Loan | SONIA+ 6.00% | 6.75% | 7/7/2028 | £6,400 8,582 | 8,409 |  |
|  | Opus2 | First Lien Senior Secured Loan | SONIA+ 5.50% | 5.55% | 5/5/2028 | £12,151 16,341 | 15,966 |  |
|  | Parcel2Go Acquisition Facility | First Lien Senior Secured Loan | SONIA+ 5.75% | 6.20% | 7/15/2028 | £6,554 5,085 | 4,982 |  |
|  | Parcel2Go Facility B | First Lien Senior Secured Loan | SONIA+ 5.75% | 6.44% | 7/15/2028 | £12,395 16,634 | 16,204 |  |
|  |  |  |  |  |  | **Services: Business Total** 91,159 | 88,386 | 136.9% |
| Services: Consumer | Surrey Bidco Limited | First Lien Senior Secured Loan | SONIA+ 6.00% PIK | 6.50% | 5/11/2026 | £5,179 6,745 | 5,726 |  |
|  |  |  |  |  |  | **Services: Consumer Total** 6,745 | 5,726 | 8.9% |
|  |  |  |  |  |  | **British Pound Total** 136,109 | 129,961 | 201.3% |
| Canadian Dollar |  |  |  |  |  |  |  |  |
| Media: Diversified & Production | 9 Story Media Group Inc. | First Lien Senior Secured Loan - Revolver | - | - | 4/30/2026 | CAD - | - |  |
|  | 9 Story Media Group Inc. | First Lien Senior Secured Loan | CDOR+ 5.50% | 6.25% | 4/30/2026 | CAD 6,851 5,439 | 5,489 |  |
|  |  |  |  |  |  | **Media: Diversified & Production Total** 5,439 | 5,489 | 8.5% |
| Retail | New Look Vision Group | First Lien Senior Secured Loan | CDOR+ 5.25% | 6.25% | 5/26/2028 | CAD 18,011 14,723 | 14,429 |  |
|  |  |  |  |  |  | **Retail Total** 14,723 | 14,429 | 22.3% |
|  |  |  |  |  |  | **Canadian Dollar Total** 20,162 | 19,918 | 30.8% |
| Danish Krone |  |  |  |  |  |  |  |  |
| High Tech Industries | VPARK BIDCO AB | First Lien Senior Secured Loan | CIBOR+ 4.00% | 4.75% | 3/10/2025 | DKK 56,429 9,231 | 8,407 |  |
|  |  |  |  |  |  | **High Tech Industries Total** 9,231 | 8,407 | 13.0% |
|  |  |  |  |  |  | **Danish Krone Total** 9,231 | 8,407 | 13.0% |
| European Currency |  |  |  |  |  |  |  |  |
| FIRE: Insurance | MRHT Facility A | First Lien Senior Secured Loan | EURIBOR+ 5.50% | 5.50% | 7/26/2028 | €21,335 24,529 | 23,643 |  |
|  |  |  |  |  |  | **FIRE: Insurance Total** 24,529 | 23,643 | 36.6% |
| Healthcare & Pharmaceuticals | Mertus 522. GmbH | First Lien Senior Secured Loan | EURIBOR+ 6.25% | 6.25% | 5/28/2026 | €12,999 15,686 | 14,406 |  |
|  | Mertus 522. GmbH | First Lien Senior Secured Loan | EURIBOR+ 6.25% | 6.25% | 5/28/2026 | €22,244 26,841 | 24,650 |  |
|  | Pharmathen Bidco B.V. | First Lien Senior Secured Loan | EURIBOR+ 5.75% | 5.75% | 10/25/2028 | €13,492 14,933 | 14,578 |  |
|  | Pharmathen Bidco B.V. | First Lien Senior Secured Loan | EURIBOR+ 5.75% | 5.75% | 10/25/2028 | €2,453 2,713 | 2,651 |  |
|  |  |  |  |  |  | **Healthcare & Pharmaceuticals Total** 60,173 | 56,285 | 87.2% |
| Media: Diversified & Production | 9 Story Media Group Inc. | First Lien Senior Secured Loan | EURIBOR+ 5.25% | 5.25% | 4/30/2026 | €3,693 4,492 | 4,092 |  |
|  | Aptus 1724 Gmbh | First Lien Senior Secured Loan | EURIBOR+ 6.00% | 6.25% | 2/23/2028 | €35,000 40,992 | 38,787 |  |
|  |  |  |  |  |  | **Media: Diversified & Production Total** 45,484 | 42,879 | 66.4% |
| Services: Business | iBanFirst Facility B | First Lien Senior Secured Loan | EURIBOR+ 8.50% | 10.00% | 7/13/2028 | €10,572 11,986 | 11,716 |  |
|  | SumUp Holdings Luxembourg S.à.r.l. | First Lien Senior Secured Loan | EURIBOR+ 8.50% | 10.00% | 2/17/2026 | €24,000 28,430 | 26,597 |  |
|  |  |  |  |  |  | **Services: Business Total** 40,416 | 38,313 | 59.3% |
|  |  |  |  |  |  | **European Currency Total** 170,602 | 161,120 | 249.5% |
| Norwegian Krone |  |  |  |  |  |  |  |  |
| High Tech Industries | VPARK BIDCO AB | First Lien Senior Secured Loan | NIBOR+ 4.00% | 5.42% | 3/10/2025 | NOK 73,280 8,651 | 8,361 |  |
|  |  |  |  |  |  | **High Tech Industries Total** 8,651 | 8,361 | 12.9% |
|  |  |  |  |  |  | **Norwegian Krone Total** 8,651 | 8,361 | 12.9% |
| U.S. Dollar |  |  |  |  |  |  |  |  |
| Automotive | CST Buyer Company | First Lien Senior Secured Loan | L+ 5.55% | 6.50% | 10/3/2025 | $14,927 14,927 | 14,927 |  |
|  | Cardo | First Lien Senior Secured Loan | L+ 6.00% | 6.50% | 5/12/2028 | $9,653 9,564 | 9,653 |  |
|  |  |  |  |  |  | **Automotive Total** 24,491 | 24,580 | 38.1% |
| Chemicals, Plastics & Rubber | V Global Holdings LLC | First Lien Senior Secured Loan | SOFR+ 5.25% | 6.00% | 12/22/2027 | $23,634 23,634 | 23,634 |  |
|  |  |  |  |  |  | **Chemicals, Plastics & Rubber Total** 23,634 | 23,634 | 36.6% |
| Healthcare & Pharmaceuticals | Golden State Buyer, Inc. | First Lien Senior Secured Loan | L+ 4.75% | 5.50% | 6/22/2026 | $14,772 14,707 | 14,569 |  |
|  |  |  |  |  |  | **Healthcare & Pharmaceuticals Total** 14,707 | 14,569 | 22.6% |
| High Tech Industries | CB Nike IntermediateCo Ltd | First Lien Senior Secured Loan - Revolver | - | - | 10/31/2025 | $- | - |  |
|  | CB Nike IntermediateCo Ltd | First Lien Senior Secured Loan | L+ 4.75% | 5.75% | 10/31/2025 | $34,279 34,279 | 34,279 |  |
|  | Utimaco, Inc. | First Lien Senior Secured Loan | L+ 4.00% | 4.36% | 8/9/2027 | $14,701 14,701 | 14,701 |  |
|  |  |  |  |  |  | **High Tech Industries Total** 48,980 | 48,980 | 75.9% |
| Media: Broadcasting and Subscription Industry | Lightning Finco Limited | First Lien Senior Secured Loan | L+ 5.75% | 6.50% | 7/14/2028 | $23,907 23,704 | 23,907 |  |
|  | Lightning Finco Limited | First Lien Senior Secured Loan | L+ 5.75% | 6.50% | 7/14/2028 | $2,619 2,619 | 2,619 |  |
|  |  |  |  |  |  | **Media: Broadcasting and Subscription Industry Total** 26,323 | 26,526 | 41.1% |
| Media: Diversified & Production | Aptus 1724 Gmbh | First Lien Senior Secured Loan | L+ 6.25% | 6.50% | 2/23/2028 | $5,000 5,000 | 5,000 |  |
|  |  |  |  |  |  | **Media: Diversified & Production Total** 5,000 | 5,000 | 7.7% |
| Services: Business | Chamber Bidco Limited | First Lien Senior Secured Loan | L+ 6.00% | 6.50% | 6/7/2028 | $23,423 23,207 | 23,425 |  |
|  |  |  |  |  |  | **Services: Business Total** 23,207 | 23,425 | 36.3% |
|  |  |  |  |  |  | **U.S. Dollar Total** 166,342 | 166,714 | 258.3% |
|  |  |  |  |  |  | **Total** 537,342 | 519,752 | 804.9% |

### Forward Foreign Currency Exchange Contracts

| Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) |
| --- | --- | --- | --- | ---: |
| EURO 1,830 | AUSTRALIAN DOLLARS 2,862 | Morgan Stanley | 4/21/2022 | $(113) |
| EURO 729 | CANADIAN DOLLARS 1,035 | Standard Chartered | 4/21/2022 | (16) |
| EURO 874 | DANISH KRONE 6,502 | Standard Chartered | 4/21/2022 | (0) |
| EURO 8,404 | BRITISH POUNDS 7,000 | Morgan Stanley | 4/21/2022 | 140 |
| EURO 847 | NORWEGIAN KRONE 8,444 | Standard Chartered | 4/21/2022 | (23) |
| EURO 21,723 | US DOLLARS 24,710 | Morgan Stanley | 4/21/2022 | (529) |
| EURO 1,440 | US DOLLARS 1,631 | Morgan Stanley | 4/21/2022 | (28) |
| EURO 644 | US DOLLARS 720 | Morgan Stanley | 4/21/2022 | (4) |
| EURO 3,175 | US DOLLARS 3,518 | Goldman Sachs | 7/21/2022 | 32 |
| US DOLLARS 8,051 | AUSTRALIAN DOLLARS 11,078 | Morgan Stanley | 4/21/2022 | (270) |
| US DOLLARS 3,208 | CANADIAN DOLLARS 4,005 | Standard Chartered | 4/21/2022 | 3 |
| US DOLLARS 3,840 | DANISH KRONE 25,168 | Standard Chartered | 4/21/2022 | 73 |
| US DOLLARS 2,450 | EURO 2,209 | Goldman Sachs | 7/21/2022 | (20) |
| US DOLLARS 39,834 | EURO 35,050 | Morgan Stanley | 4/21/2022 | 817 |
| US DOLLARS 510 | EURO 448 | Standard Chartered | 4/21/2022 | 11 |
| US DOLLARS 720 | EURO 633 | Morgan Stanley | 4/21/2022 | 16 |
| US DOLLARS 36,943 | BRITISH POUNDS 27,100 | Goldman Sachs | 4/21/2022 | 1,270 |
| US DOLLARS 3,724 | NORWEGIAN KRONE 32,686 | Standard Chartered | 4/21/2022 | (13) |
|  |  |  |  | $1,346 |

85

Below is a listing of ISLP’s individual investments as of:

### As of December 31, 2021

### (in thousands)

| Currency Australian Dollar | Industry ​ | Portfolio Company ​ | Investment Type ​ | Spread Above Index ​ | Interest Rate ​ | Maturity Date ​ | Currency Principal/Shares ​ ​ | Cost ​ | Market Value ​ | % of Members’ Equity ​ |
| --- | --- | --- | --- | --- | ---: | --- | --- | ---: | ---: | --- |
| ​ | Healthcare & Pharmaceuticals | Datix Bidco Limited | First Lien Senior Secured Loan | BBSW+ 4.00% | 4.25% | 4/28/2025 | AUD 4,169 | 3,289 | 3,028 | ​ |
| ​ | ​ | ​ | ​ | ​ | **​** | ​ | ​ **Healthcare & Pharmaceuticals Total** | 3,289 | 3,028 | 4.9% |
| ​ | Information Technology Services | LEAP Legal Software PTY Ltd | First Lien Senior Secured Loan | BBSY+ 5.75% | 6.75% | 3/12/2025 | AUD 30,093 | 22,867 | 21,856 | ​ |
| ​ | ​ | ​ | ​ | ​ | **​** | ​ | ​ **Information Technology Services Total** | 22,867 | 21,856 | 35.1% |
| ​ | Media: Advertising, Printing & Publishing | TGI Sport Bidco Pty Ltd | First Lien Senior Secured Loan | BBSY+ 7.00% | 7.50% | 4/30/2026 | AUD 9,610 | 6,886 | 6,631 | ​ |
| ​ | ​ | ​ | ​ | ​ | **​** | ​ | ​ **Media: Advertising, Printing & Publishing Total** | 6,886 | 6,631 | 10.6% |
| ​ | Services: Consumer | Zeppelin BidCo Pty Limited | First Lien Senior Secured Loan | BBSY+ 6.00% | 5.12% | 6/28/2024 | AUD 20,415 | 16,045 | 14,827 | ​ |
| ​ | ​ | ​ | ​ | ​ | **​** | ​ | ​ **Services: Consumer Total** | 16,045 | 14,827 | 23.8% |
| ​ | ​ | ​ | ​ | ​ | **​** | ​ | ​ **Australian Dollar Total** | 49,087 | 46,342 | 74.4% |
| British Pound | ​ | ​ | ​ | ​ | ​ | ​ | ​ ​ | ​ | ​ | ​ |
| ​ | Healthcare & Pharmaceuticals | Datix Bidco Limited | Second Lien Senior Secured Loan | L+ 7.75% | 8.21% | 4/27/2026 | £963 | 1,323 | 1,303 | ​ |
| ​ | ​ | Datix Bidco Limited | First Lien Senior Secured Loan— Revolver | L+ 4.50% | 4.96% | 10/28/2024 | £12,013 | 16,916 | 16,255 | ​ |
| ​ | ​ | ​ | ​ | ​ | **​** | ​ | ​ **Healthcare & Pharmaceuticals Total** | 18,239 | 17,558 | 28.2% |
| ​ | High Tech Industries | Armstrong Bidco Limited | First Lien Senior Secured Loan | SONIA+ 4.75% | 5.00% | 4/30/2025 | £5,602 | 7,711 | 7,581 | ​ |
| ​ | ​ | ​ | ​ | ​ | **​** | ​ | ​ **High Tech Industries Total** | 7,711 | 7,581 | 12.2% |
| ​ | Media: Diversified & Production | International Entertainment Investments Limited | First Lien Senior Secured Loan | GBP LIBOR+ 4.75% | 5.06% | 5/31/2023 | £8,734 | 12,255 | 11,782 | ​ |
| ​ | ​ | ​ | ​ | ​ | **​** | ​ | ​ **Media: Diversified & Production Total** | 12,255 | 11,782 | 18.9% |
| ​ | Services: Business | Comet Bidco Limited | First Lien Senior Secured Loan | GBP LIBOR+ 5.25% | 5.42% | 9/27/2024 | £7,362 | 9,460 | 9,249 | ​ |
| ​ | ​ | Learning Pool Facility B | First Lien Senior Secured Loan | L+ 6.00% | 6.09% | 7/7/2028 | £21,000 | 28,584 | 28,417 | ​ |
| ​ | ​ | Opus2 | First Lien Senior Secured Loan | SONIA+ 5.50% | 5.55% | 5/5/2028 | £12,151 | 16,326 | 16,443 | ​ |
| ​ | ​ | Parcel2Go Facility B | First Lien Senior Secured Loan | SONIA+ 5.75% | 5.80% | 7/15/2028 | £12,395 | 16,619 | 16,689 | ​ |
| ​ | ​ | ​ | ​ | ​ | **​** | ​ | ​ **Services: Business Total** | 70,989 | 70,798 | 113.7% |
| ​ | Services: Consumer | Surrey Bidco Limited | First Lien Senior Secured Loan | GBP LIBOR+ 7.00% | 7.50% | 5/11/2026 | £4,979 | 6,732 | 5,929 | ​ |
| ​ | ​ | ​ | ​ | ​ | **​** | ​ | ​ **Services: Consumer Total** | 6,732 | 5,929 | 9.5% |
| ​ | ​ | ​ | ​ | ​ | **​** | ​ | ​ **British Pound Total** | 115,926 | 113,648 | 182.5% |
| Canadian Dollar | ​ | ​ | ​ | ​ | ​ | ​ | ​ ​ | ​ | ​ | ​ |
| ​ | Media: Diversified & Production | 9 Story Media Group Inc. | First Lien Senior Secured Loan— Revolver | CDOR+ 5.50% | 6.25% | 4/30/2026 | CAD 16 | 13 | 13 | ​ |
| ​ | ​ | 9 Story Media Group Inc. | First Lien Senior Secured Loan | CDOR+ 5.50% | 6.25% | 4/30/2026 | CAD 7,164 | 5,688 | 5,669 | ​ |

86

| Currency Industry | Portfolio Company | Investment Type | Spread Above Index | Interest Rate | Maturity Date | Currency Principal/Shares | Cost | Market Value | % of Members’ Equity |
| --- | --- | --- | --- | ---: | --- | --- | ---: | ---: | ---: |
|  |  |  |  |  |  | Media: Diversified & Production Total | 5,701 | 5,682 | 9.1% |
| Retail | New Look Vision Group | First Lien Senior Secured Loan— Delayed Draw | CDOR+ 5.25% | 6.25% | 5/26/2028 | CAD 18,056 | 14,752 | 14,288 |  |
|  |  |  |  |  |  | Retail Total | 14,752 | 14,288 | 22.9% |
|  |  |  |  |  |  | Canadian Dollar Total | 20,453 | 19,970 | 32.0% |
| Danish Krone |  |  |  |  |  |  |  |  |  |
| High Tech Industries | VPARK BIDCO AB | First Lien Senior Secured Loan | CIBOR+ 4.00% | 4.75% | 3/10/2025 | DKK 56,429 | 9,231 | 8,628 |  |
|  |  |  |  |  |  | High Tech Industries Total | 9,231 | 8,628 | 13.9% |
|  |  |  |  |  |  | Danish Krone Total | 9,231 | 8,628 | 13.9% |
| European Currency |  |  |  |  |  |  |  |  |  |
| FIRE: Insurance | MRHT Facility A | First Lien Senior Secured Loan | EURIBOR+ 5.50% | 5.50% | 7/26/2028 | €21,335 | 24,521 | 24,257 |  |
|  |  |  |  |  |  | FIRE: Insurance Total | 24,521 | 24,257 | 39.0% |
| Healthcare & Pharmaceuticals | Mertus 522. GmbH | First Lien Senior Secured Loan—Delayed Draw | EURIBOR+ 6.25% | 6.25% | 5/28/2026 | €12,999 | 15,680 | 14,780 |  |
|  | Mertus 522. GmbH | First Lien Senior Secured Loan | EURIBOR+ 6.25% | 6.25% | 5/28/2026 | €22,244 | 26,830 | 25,291 |  |
|  |  |  |  |  |  | Healthcare & Pharmaceuticals Total | 42,510 | 40,071 | 64.4% |
| Media: Diversified & Production | 9 Story Media Group Inc. | First Lien Senior Secured Loan | EURIBOR+ 5.25% | 5.25% | 4/30/2026 | €3,859 | 4,694 | 4,388 |  |
|  | Aptus 1724 Gmbh | First Lien Senior Secured Loan | EURIBOR+ 6.00% | 6.25% | 2/23/2028 | €35,000 | 40,944 | 39,795 |  |
|  |  |  |  |  |  | Media: Diversified & Production Total | 45,638 | 44,183 | 71.0% |
| Services: Business | iBanFirst Facility B | First Lien Senior Secured Loan | EURIBOR+ 8.50% | 10.00% | 7/13/2028 | €10,058 | 11,387 | 11,437 |  |
|  | SumUp Holdings Luxembourg S.à.r.l. | First Lien Senior Secured Loan | EURIBOR+ 8.50% | 10.00% | 2/17/2026 | €21,000 | 25,038 | 23,877 |  |
|  |  |  |  |  |  | Services: Business Total | 36,425 | 35,314 | 56.7% |
|  |  |  |  |  |  | European Currency Total | 149,094 | 143,825 | 231.1% |
| Norwegian Krone |  |  |  |  |  |  |  |  |  |
| High Tech Industries | VPARK BIDCO AB | First Lien Senior Secured Loan | NIBOR+ 4.00% | 4.75% | 3/10/2025 | NOK 73,280 | 8,651 | 8,310 |  |
|  |  |  |  |  |  | High Tech Industries Total | 8,651 | 8,310 | 13.3% |
|  |  |  |  |  |  | Norwegian Krone Total | 8,651 | 8,310 | 13.3% |
| U.S. Dollar |  |  |  |  |  |  |  |  |  |
| Automotive | CST Buyer Company | First Lien Senior Secured Loan | L+ 5.55% | 6.50% | 10/3/2025 | $14,927 | 14,927 | 14,927 |  |
|  | Cardo | First Lien Senior Secured Loan | L+ 6.00% | 6.50% | 5/12/2028 | $9,653 | 9,560 | 9,653 |  |
|  |  |  |  |  |  | Automotive Total | 24,487 | 24,580 | 39.5% |
| Chemicals, Plastics & Rubber | V Global Holdings LLC | First Lien Senior Secured Loan | L+ 6.00% | 7.00% | 12/22/2027 | $23,634 | 23,634 | 23,634 |  |
|  |  |  |  |  |  | Chemicals, Plastics & Rubber Total | 23,634 | 23,634 | 38.0% |
| Healthcare & Pharmaceuticals | Golden State Buyer, Inc. | First Lien Senior Secured Loan | L+ 4.75% | 5.50% | 6/22/2026 | $14,779 | 14,709 | 14,733 |  |
|  |  |  |  |  |  | Healthcare & Pharmaceuticals Total | 14,709 | 14,733 | 23.7% |
| High Tech Industries | CB Nike IntermediateCo Ltd | First Lien Senior Secured Loan—Revolver | L+ 4.75% | 5.75% | 10/31/2025 | $4,384 | 4,384 | 4,384 |  |
|  | CB Nike IntermediateCo Ltd | First Lien Senior Secured Loan | L+ 4.75% | 5.75% | 10/31/2025 | $34,367 | 34,367 | 34,367 |  |

87

| Currency Industry | Portfolio Company | Investment Type | Spread Above Index | Interest Rate | Maturity Date | Currency Principal/Shares | Cost | Market Value | % of Members’ Equity |
| --- | --- | --- | --- | ---: | --- | --- | ---: | ---: | ---: |
|  | Utimaco, Inc. | First Lien Senior Secured Loan | L+ 4.00% | 4.10% | 8/9/2027 | $14,701 | 14,701 | 14,701 |  |
|  |  |  |  |  |  | High Tech Industries Total | 53,452 | 53,452 | 85.8% |
| Media: Broadcasting and Subscription Industry | Lightning Finco Limited | First Lien Senior Secured Loan | L+ 5.75% | 6.50% | 7/14/2028 | $21,000 | 20,790 | 21,000 |  |
|  |  |  |  |  |  | Media: Broadcasting and Subscription Total | 20,790 | 21,000 | 33.7% |
| Services: Business | Chamber Bidco Limited | First Lien Senior Secured Loan | L+ 6.00% | 6.50% | 6/7/2028 | $23,423 | 23,198 | 23,423 |  |
|  |  |  |  |  |  | Services: Business Total | 23,198 | 23,423 | 37.6% |
|  |  |  |  |  |  | U.S. Dollar Total | 160,270 | 160,822 | 258.3% |
|  |  |  |  |  |  | Total | 512,712 | 501,545 | 805.5% |

88

Below is the financial information for ISLP (dollars in thousands):

### Selected Balance Sheet Information

|  | As of March 31, 2022 | As of December 31, 2021 |
| --- | ---: | ---: |
| Investments at fair value (cost—$537,342 and $512,712, respectively) | $519,752 | $501,545 |
| Cash | 12,249 | 6,830 |
| Foreign cash | 27,420 | 3,937 |
| Deferred financing costs | 2,223 | 1,981 |
| Unrealized appreciation on forward currency exchange contracts | 1,840 | — |
| Other assets | 6,722 | 7,347 |
| Total assets | $570,206 | $521,640 |
| Debt | $304,853 | $272,133 |
| Subordinated notes payable to members | 187,029 | 176,336 |
| Dividend payable | 1,703 | 1,150 |
| Unrealized depreciation on forward currency exchange contracts | 494 | 61 |
| Other payables | 11,556 | 9,693 |
| Total liabilities | $505,635 | $459,373 |
| Members’ equity | 64,571 | 62,267 |
| Total liabilities and members’ equity | $570,206 | $521,640 |

### Selected Statement of Operations Information

| Investment Income | For the Three Months Ended March 31, 2022 | For the Three Months Ended March 31, 2021 |
| --- | ---: | ---: |
| Interest Income | $8,243 | $2,096 |
| Other | — | — |
| Total investment income | 8,243 | 2,096 |
| Expenses |  |  |
| Interest and debt financing expenses | 1,891 | 555 |
| Interest expense on members subordinated notes | 4,002 | 1,307 |
| General and administrative expenses | 567 | 357 |
| Total expenses | 6,460 | 2,219 |
| Net investment income (loss) | 1,783 | (123) |
| Net realized and unrealized gain (losses) |  |  |
| Net realized loss on investments | (676) | (22) |
| Net realized gain on foreign currency transactions | 635 | 3,344 |
| Net realized gain on forward contracts | 1,413 | — |
| Net unrealized gain on foreign currency | 3,856 | 2,992 |
| Net change in unrealized appreciation (depreciation) on forward contracts | (455) | 1,653 |
| Net change in unrealized depreciation on investments | (6,423) | (4,086) |
| Net gain (loss) on investments | (1,650) | 3,881 |
| Net increase in members’ equity resulting from operations | $133 | $3,758 |

### Bain Capital Senior Loan Program, LLC (“SLP”)

On February 9, 2022, the Company, and an entity advised by Amberstone Co., Ltd. (“Amberstone”), a credit focused investment manager that advises institutional investors, committed capital to a newly formed joint venture, SLP. Pursuant to an amended and restated limited liability company agreement (the “LLC Agreement”) between the Company and Amberstone, each such party has a 50% economic ownership interest in SLP. Amberstone's initial capital commitments to SLP are $179.0 million, with each party expected to maintain their pro rata proportionate share for each capital contribution. SLP will seek to invest primarily in senior secured first lien loans of U.S. borrowers. Through these capital contributions, SLP acquired 70% of the membership equity interests of the Company’s 2018-1 portfolio (“2018-1”). The Company retained 30% of the 2018-1 membership equity interests as a non-controlling equity interest. As of March 31, 2022, the Company’s investment in SLP consisted of subordinated notes of $35.8 million, preferred equity interests of $0.01 million and equity interests of $5.6 million.

In future periods, the Company may sell certain of its investments or a participating interest in certain of its investments to SLP. The Company has determined that SLP is an investment company under ASC, Topic 946, Financial Services—Investment Companies; however, in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a wholly or substantially owned investment company subsidiary, which is an extension of the operations of the Company, or a controlled operating company whose business consists of providing services to the Company. The Company does not consolidate its investments in SLP as it is not a substantially wholly owned investment company subsidiary. In addition, the Company does not control SLP due to the allocation of voting rights among SLP members. The Company measures the fair value of SLP in accordance with ASC Subtopic 820, Fair Value Measurements and Disclosures, using the net asset value (or its equivalent) as a practical expedient. The Company and Amberstone each appointed two members to SLP’s four-person Member Designees’ Committee. All material decisions with respect to SLP, including those involving its investment portfolio, require unanimous approval of a quorum of Member Designees’ Committee.

On March 7, 2022, SLP acquired 70% of the Company’s Membership Interests of BCC Middle Market CLO 2018-1 LLC (the “2018-1 Issuer”). The Company received $56.1 million in proceeds resulting in a realized gain of $1.2 million, which is included in net realized gain in non-controlled/non-affiliate investments. The sale of the investments met the criteria set forth in ASC 860, Transfers and Servicing for treatment as a sale. Through this acquisition, the 2018-1 Issuer became a consolidated subsidiary of SLP and was deconsolidated from the Company’s consolidated financial statements. The Company retained the remaining 30% of the 2018-1 membership interests as a non-controlling equity interest. Please see Note 6 for additional details on the formation of the 2018-1 Issuer and the related CLO Transaction.

The Class A-1 A, A-1 B, A-2, B and C 2018-1 Notes (the “2018-1 Notes”) are scheduled to mature on October 20, 2030 and are included in SLP’s consolidated financial statements. The Membership Interests are eliminated in consolidation on SLP’s consolidated financial statements. Below is a table summary of the 2018-1 Notes as of March 31, 2022:

| 2018-1 Notes | Principal Amount | Spread above Index | Interest rate at March 31, 2022 |
| --- | ---: | --- | ---: |
| Class A-1 A | $205,900 | 1.55% + 3 Month LIBOR | 1.80% |
| Class A-1 B | 45,000 | 1.50% + 3 Month LIBOR (first 24 months) | 2.05% |
|  |  | 1.80% + 3 Month LIBOR (thereafter) |  |
| Class A-2 | 55,100 | 2.15% + 3 Month LIBOR | 2.40% |
| Class B | 29,300 | 3.00% + 3 Month LIBOR | 3.25% |
| Class C | 30,400 | 4.00% + 3 Month LIBOR | 4.25% |
| Total 2018-1 Notes | $365,700 |  |  |

Below is a summary of SLP’s portfolio at fair value:

|  | As of March 31, 2022 |
| --- | ---: |
| Total investments | $372,320 |
| Weighted average yield on investments | 6.9% |
| Number of borrowers in SLP | 41 |
| Largest portfolio company investment | $13,200 |
| Total of five largest portfolio company investments | $65,456 |
| Unfunded commitments | $2,447 |

90

Below is a listing of SLP’s individual investments as of:

Senior Loan Program, LLC

(unaudited)

| Currency Industry U.S. Dollar | Portfolio Company | Investment Type | Spread Above Index | Interest Rate | Maturity Date | Principal/Shares | Cost | Market Value | % of Members' Equity |
| --- | --- | --- | --- | ---: | --- | ---: | ---: | ---: | ---: |
| Aerospace & Defense | WCI-HSG Purchaser, Inc. | First Lien Senior Secured Loan - Revolver | L+ 4.75% | 5.75% | 2/22/2025 | 900 | 900 | 900 |  |
|  | WCI-HSG Purchaser, Inc. | First Lien Senior Secured Loan | L+ 4.75% | 5.75% | 2/24/2025 | 8,688 | 8,688 | 8,688 |  |
|  | Whitcraft LLC | First Lien Senior Secured Loan | L+ 6.00% | 7.01% | 4/3/2023 | 10,766 | 10,444 | 10,416 |  |
|  |  |  |  |  |  | **Aerospace & Defense Total** | **20,032** | **20,004** | **65.6%** |
| Automotive | Cardo | First Lien Senior Secured Loan | L+ 6.00% | 6.50% | 5/12/2028 | 10,800 | 10,800 | 10,800 |  |
|  | CST Buyer Company | First Lien Senior Secured Loan | L+ 5.55% | 6.50% | 10/3/2025 | 5,600 | 5,600 | 5,600 |  |
|  | JHCC Holdings, LLC | First Lien Senior Secured Loan | L+ 5.75% | 6.76% | 9/9/2025 | 7,579 | 7,579 | 7,200 |  |
|  |  |  |  |  |  | **Automotive Total** | **23,979** | **23,600** | **77.4%** |
| Banking | Green Street Parent, LLC | First Lien Senior Secured Loan | L+ 5.75% | 6.50% | 8/27/2026 | 10,725 | 10,725 | 10,725 |  |
|  |  |  |  |  |  | **Banking Total** | **10,725** | **10,725** | **35.2%** |
| Chemicals, Plastics & Rubber | V Global Holdings LLC | First Lien Senior Secured Loan | SOFR+ 5.25% | 6.00% | 12/22/2027 | 10,421 | 10,421 | 10,421 |  |
|  |  |  |  |  |  | **Chemicals, Plastics & Rubber Total** | **10,421** | **10,421** | **34.2%** |
| Construction & Building | YLG Holdings, Inc. | First Lien Senior Secured Loan | L+ 5.25% | 6.25% | 10/31/2025 | 10,616 | 10,616 | 10,616 |  |
|  |  |  |  |  |  | **Construction & Building Total** | **10,616** | **10,616** | **34.8%** |
| Consumer goods: Durable | Stanton Carpet T/L 2nd Lien | Second Lien Senior Secured Loan | L+ 9.00% | 10.00% | 4/1/2028 | 5,000 | 4,901 | 4,925 |  |
|  | TLC Purchaser, Inc. | First Lien Senior Secured Loan | L+ 6.25% | 7.25% | 10/13/2025 | 9,587 | 8,465 | 8,437 |  |
|  |  |  |  |  |  | **Consumer goods: Durable Total** | **13,366** | **13,362** | **43.8%** |
| Consumer Goods: Non-Durable | RoC Opco LLC | First Lien Senior Secured Loan | L+ 8.50% | 9.50% | 2/25/2025 | 8,820 | 8,820 | 8,820 |  |
|  | Solaray, LLC | First Lien Senior Secured Loan | L+ 5.50% | 6.50% | 9/11/2023 | 10,693 | 10,693 | 10,693 |  |
|  | WU Holdco, Inc. | First Lien Senior Secured Loan | L+ 5.50% | 6.50% | 3/26/2026 | 6,577 | 6,577 | 6,577 |  |
|  | WU Holdco, Inc. | First Lien Senior Secured Loan | L+ 5.50% | 6.50% | 3/26/2026 | 6,368 | 6,368 | 6,368 |  |
|  |  |  |  |  |  | **Consumer Goods: Non-Durable Total** | **32,458** | **32,458** | **106.4%** |
| Consumer goods: Wholesale | WSP Initial Term Loan | First Lien Senior Secured Loan | L+ 6.25% | 7.25% | 4/27/2027 | 6,172 | 6,066 | 5,972 |  |
|  |  |  |  |  |  | **Consumer goods: Wholesale Total** | **6,066** | **5,972** | **19.6%** |
| Containers, Packaging, & Glass | ASP-r-pac Acquisition Co LLC | First Lien Senior Secured Loan | L+ 6.00% | 6.75% | 12/29/2027 | 13,200 | 12,940 | 13,200 |  |
|  |  |  |  |  |  | **Containers, Packaging, & Glass Total** | **12,940** | **13,200** | **43.3%** |
| Energy: Oil & Gas | Amspec Services, Inc. | First Lien Senior Secured Loan | L+ 5.75% | 6.76% | 7/2/2024 | 9,847 | 9,847 | 9,847 |  |
|  | Blackbrush Oil & Gas, L.P. | First Lien Senior Secured Loan | L+ 5.00% (2% PIK) | 8.00% | 9/3/2025 | 4,348 | 4,348 | 4,348 |  |
|  |  |  |  |  |  | **Energy: Oil & Gas Total** | **14,195** | **14,195** | **46.5%** |
| FIRE: Finance | Allworth Financial Group, L.P. | First Lien Senior Secured Loan | SOFR+ 4.75% | 5.75% | 12/23/2026 | 1,394 | 1,394 | 1,394 |  |
|  |  |  |  |  |  | **FIRE: Finance Total** | **1,394** | **1,394** | **4.6%** |
| FIRE: Insurance | McLarens Acquisition Inc. | First Lien Senior Secured Loan | L+ 5.50% | 6.68% | 12/19/2024 | 10,533 | 10,533 | 10,533 |  |
|  |  |  |  |  |  | **FIRE: Insurance Total** | **10,533** | **10,533** | **34.5%** |
| Healthcare & Pharmaceuticals | CPS Group Holdings, Inc. | First Lien Senior Secured Loan | L+ 5.25% | 6.00% | 3/3/2025 | 9,801 | 9,801 | 9,801 |  |
|  | SunMed Group Holdings, LLC | First Lien Senior Secured Loan | L+ 5.75% | 6.50% | 6/16/2028 | 9,703 | 9,703 | 9,703 |  |
|  |  |  |  |  |  | **Healthcare & Pharmaceuticals Total** | **19,504** | **19,504** | **63.9%** |
| High Tech Industries | AMI US Holdings Inc. | First Lien Senior Secured Loan - Revolver | L+ 5.25% | 5.71% | 4/1/2024 | 698 | 698 | 698 |  |
|  | AMI US Holdings Inc. | First Lien Senior Secured Loan | L+ 5.25% | 6.25% | 4/1/2025 | 972 | 972 | 972 |  |
|  | Drilling Info Holdings, Inc | First Lien Senior Secured Loan | L+ 4.25% | 4.71% | 7/30/2025 | 10,858 | 10,753 | 10,743 |  |
|  | Superna Inc. | First Lien Senior Secured Loan | SOFR + 6.25% | 7.25% | 3/6/2028 | 10,800 | 10,693 | 10,692 |  |
|  | Ventiv Holdco, Inc. | First Lien Senior Secured Loan | L+ 5.50% | 6.50% | 9/3/2025 | 9,877 | 9,877 | 9,877 |  |
|  |  |  |  |  |  | **High Tech Industries Total** | **32,993** | **32,982** | **108.1%** |
| Hotel, Gaming & Leisure | Captain D's LLC | First Lien Senior Secured Loan | L+ 4.50% | 5.50% | 12/15/2023 | 5,729 | 5,729 | 5,729 |  |
|  | Quidditch Acquisition, Inc. | First Lien Senior Secured Loan | L+ 7.00% | 8.00% | 3/21/2025 | 9,436 | 9,316 | 9,200 |  |
|  |  |  |  |  |  | **Hotel, Gaming & Leisure Total** | **15,045** | **14,929** | **48.9%** |
| Retail | Batteries Plus Holding Corporation | First Lien Senior Secured Loan | L+ 6.75% | 7.75% | 7/6/2022 | 10,500 | 10,500 | 10,500 |  |
|  | Thrasio, LLC | First Lien Senior Secured Loan | L+ 7.00% | 8.00% | 12/18/2026 | 13,146 | 13,146 | 13,146 |  |
|  |  |  |  |  |  | **Retail Total** | **23,646** | **23,646** | **77.5%** |
| Services: Business | Avalon Acquiror, Inc. | First Lien Senior Secured Loan | SOFR+ 6.25% | 7.25% | 3/10/2028 | 10,800 | 10,693 | 10,692 |  |
|  | Refine Intermediate, Inc. | First Lien Senior Secured Loan | L+ 4.50% | 5.50% | 3/3/2027 | 10,800 | 10,800 | 10,800 |  |
|  | Smartronix T/L | First Lien Senior Secured Loan | L+ 6.00% | 7.00% | 11/23/2028 | 13,167 | 12,907 | 13,003 |  |
|  | TEI Holdings Inc. | First Lien Senior Secured Loan | L+ 5.75% | 6.75% | 12/23/2026 | 9,902 | 9,902 | 9,902 |  |
|  | WCI Gigawatt Purchaser T/L | First Lien Senior Secured Loan | L+ 5.75% | 6.75% | 11/19/2027 | 10,773 | 10,534 | 10,665 |  |
|  |  |  |  |  |  | **Services: Business Total** | **54,836** | **55,062** | **180.4%** |
| Services: Consumer | MZR Buyer, LLC | First Lien Senior Secured Loan | L+ 6.75% | 7.75% | 12/21/2026 | 13,163 | 13,163 | 13,163 |  |
|  |  |  |  |  |  | **Services: Consumer Total** | **13,163** | **13,163** | **43.1%** |
| Telecommunications | Horizon Telcom, Inc. | First Lien Senior Secured Loan - Delayed Draw | L+ 5.00% | 6.00% | 6/15/2023 | 632 | 632 | 632 |  |
|  | Horizon Telcom, Inc. | First Lien Senior Secured Loan | L+ 5.00% | 6.00% | 6/15/2023 | 9,300 | 9,300 | 9,300 |  |
|  |  |  |  |  |  | **Telecommunications Total** | **9,932** | **9,932** | **32.6%** |
| Transportation: Cargo | A&R Logistics, Inc. | First Lien Senior Secured Loan | SOFR+ 6.00% | 7.00% | 5/5/2025 | 10,751 | 10,751 | 10,751 |  |
|  | Grammer Purchaser, Inc. | First Lien Senior Secured Loan - Revolver | - | - | 9/30/2024 | - | - | - |  |
|  | Grammer Purchaser, Inc. | First Lien Senior Secured Loan | L+ 4.50% | 5.50% | 9/30/2024 | 3,475 | 3,475 | 3,475 |  |
|  | Omni Logistics, LLC | Second Lien Senior Secured Loan | L+ 9.00% | 10.00% | 12/30/2027 | 5,000 | 5,000 | 5,000 |  |
|  |  |  |  |  |  | **Transportation: Cargo Total** | **19,226** | **19,226** | **63.0%** |
| Wholesale | Abracon Group Holding, LLC | First Lien Senior Secured Loan | L+ 5.25% | 6.25% | 7/18/2024 | 7,838 | 7,838 | 7,838 |  |
|  | Aramsco, Inc. | First Lien Senior Secured Loan | L+ 5.25% | 5.71% | 8/28/2024 | 9,558 | 9,558 | 9,558 |  |
|  |  |  |  |  |  | **Wholesale Total** | **17,396** | **17,396** | **57.0%** |
|  |  |  |  |  |  | **Total** | **372,466** | **372,320** | **1220.4%** |

91

Below is the financial information for SLP (dollars in thousands):

### Selected Balance Sheet Information

|  | As of March 31, 2022 |
| --- | ---: |
| Investments at fair value (cost—$372,466) | $372,320 |
| Cash | 77,768 |
| Other assets | 19,945 |
| Total assets | $470,033 |
| Debt | $364,220 |
| Subordinated notes payable to members | 71,570 |
| Other payables | 3,734 |
| Total liabilities | $439,524 |
| Members’ equity | 30,509 |
| Total liabilities and members’ equity | $470,033 |

### Selected Statement of Operations Information

| Investment Income | For the Three Months Ended March 31, 2022 |
| --- | ---: |
| Interest Income | $2,516 |
| Other | — |
| Total investment income | 2,516 |
| Expenses |  |
| Interest and debt financing expenses | 744 |
| Interest expense on members subordinated notes | 636 |
| General and administrative expenses | 112 |
| Total expenses | 1,492 |
| Net investment income | 1,024 |
| Net realized and unrealized gain (losses) |  |
| Net realized gain on investments | 6 |
| Net change in unrealized depreciation on investments | (146) |
| Net loss on investments | (140) |
| Net increase in members’ equity resulting from operations | $884 |

92

### Results of Operations

Our operating results for the three months ended March 31, 2022 and 2021 were as follows (dollars in thousands):

|  | For the Three Months Ended March 31, 2022 | 2021 |
| --- | ---: | ---: |
| Total investment income | $46,011 | $49,831 |
| Total expenses, net of fee waivers | 24,308 | 27,666 |
| Net investment income | 21,703 | 22,165 |
| Net realized gain | 2,172 | 8,858 |
| Net change in unrealized appreciation | 9,806 | 730 |
| Net increase (decrease) in net assets resulting from operations | $33,681 | $31,753 |

Net increase in net assets resulting from operations can vary from period to period as a result of various factors, including additional financing, new investment commitments, the recognition of realized gains and losses and changes in unrealized appreciation and depreciation on the investment portfolio. Due to these factors, comparisons may not be meaningful.

### Investment Income

The composition of our investment income for the three months ended March 31, 2022 and 2021 was as follows (dollars in thousands):

|  | For the Three Months Ended March 31, 2022 | 2021 |
| --- | ---: | ---: |
| Interest income | $38,033 | $41,974 |
| Dividend income | 3,601 | 2,036 |
| PIK income | 3,912 | 2,365 |
| Other income | 465 | 3,456 |
| Total investment income | $46,011 | $49,831 |

Interest income from investments, which includes interest and accretion of discounts and fees, decreased to $38.0 million for the three months ended March 31, 2022 from $42.0 million for the three months ended March 31, 2021, primarily due to the decrease in the Company’s investment portfolio between the periods. Our investment portfolio at amortized cost decreased to $2,178.2 million as March 31, 2022 compared to $2,378.2 million as of March 31, 2021. Accelerated unamortized discounts from paydowns decreased to $0.7 million for the three months ended March 31, 2022 from $1.7 million for the three months ended March 31, 2021. Dividend income increased to $3.6 million for the three months ended March 31, 2022 from $2.0 million for the three months ended March 31, 2021, primarily due to a increase in dividend income from our equity interests. Other income decreased to approximately $0.5 million for the three months ended March 31, 2022 from $3.5 million for the three months ended March 31, 2021, primarily due to an decrease in one-time fees earned on certain investments. As of March 31, 2022, the weighted average yield of our investment portfolio at amortized cost increased to 7.9% from 7.6% as of March 31, 2021.

### Operating Expenses

The composition of our operating expenses for the three months ended March 31, 2022 and 2021 was as follows (dollars in thousands):

|  | For the Three Months Ended March 31, 2022 | 2021 |
| --- | ---: | ---: |
| Interest and debt financing expenses | $10,643 | $11,833 |
| Base management fee | 8,369 | 8,698 |
| Incentive fee | 3,311 | 6,728 |
| Professional fees | 390 | 959 |
| Directors fees | 175 | 171 |
| Other general and administrative expenses | 1,420 | 1,390 |
| Total expenses, before fee waivers | $24,308 | $29,779 |
| Base management fee waiver | — | (2,113) |
| Incentive fee waiver | — | — |
| Total expenses, net of fee waivers | $24,308 | $27,666 |

93

### Interest and Debt Financing Expenses

Interest and debt financing expenses on our borrowings totaled approximately $10.6 million and $11.8 million for the three months ended March 31, 2022 and 2021, respectively. Interest and debt financing expense for the three months ended March 31, 2022 as compared to March 31, 2021 decreased primarily due to a decrease in total principal debt outstanding and improved average stated interest rate on debt between periods. The weighted average principal debt balance outstanding for the three months ended March 31, 2022 was $1,314.4 million compared to $1,449.9 million for the three months ended March 31, 2021.

The weighted average interest rate (excluding deferred upfront financing costs and unused fees) on our debt outstanding was 2.9% and 2.9% as of March 31, 2022 and December 31, 2021, respectively.

### Management Fees

Management fees (net of waivers) increased to $8.4 million for the three months ended March 31, 2022 from $6.6 million for the three months ended March 31, 2021. Management fees (gross of waivers) decreased to $8.4 million for the three months ended March 31, 2022 compared to $8.7 million for the three months ended March 31, 2021. Management fees waived for the three months ended March 31, 2022 and 2021 were $0.0 million and $2.1 million, respectively.

### Incentive Fees

Incentive fee (net of waivers) decreased to $3.3 million for the three months ended March 31, 2022 from $6.7 million for the three months ended March 31, 2021. Incentive fee waivers related to pre-incentive fee net investment income consisted of voluntary waivers of $0.0 million for both the three months ended March 31, 2022 and March 31, 2021. For the three months ended March 31, 2022 there were no incentive fees related to the GAAP Incentive Fee.

### Professional Fees and Other General and Administrative Expenses

Professional fees and other general and administrative expenses decreased to $1.8 million for the three months ended March 31, 2022 from $2.5 million for the three months ended March 31, 2021, primarily due to a decrease in costs associated with servicing our investment portfolio.

### Net Realized and Unrealized Gains and Losses

The following table summarizes our net realized and unrealized gains (losses) for the three months ended March 31, 2022 and 2021 (dollars in thousands):

|  | For the Three Months Ended March 31, 2022 | 2021 |
| --- | ---: | ---: |
| Net realized gain on investments | $3,625 | $19,860 |
| Net realized loss on investments | (2,208) | (4,684) |
| Net realized gain on foreign currency transactions | 61 | 33 |
| Net realized loss on foreign currency transactions | (549) | (3,059) |
| Net realized gain on forward currency exchange contracts | 1,283 | — |
| Net realized loss on forward currency exchange contracts | (40) | (3,292) |
| Net realized gains | $2,172 | $8,858 |
| Change in unrealized appreciation on investments | $21,872 | $27,530 |
| Change in unrealized depreciation on investments | (14,063) | (31,763) |
| Net change in unrealized appreciation (depreciation) on investments | 7,809 | (4,233) |
| Unrealized appreciation on foreign currency translation | 346 | 386 |
| Unrealized appreciation on forward currency exchange contracts | 1,651 | 4,577 |
| Net change in unrealized appreciation on foreign currency and forward currency exchange contracts | 1,997 | 4,963 |
| Net change in unrealized appreciation | $9,806 | $730 |

94

For the three months ended March 31, 2022, and 2021, we had net realized gains on investments of $1.4 million and $15.2 million, respectively. For the three months ended March 31, 2022 and 2021, we had net realized losses on foreign currency transactions of ($0.5) million and ($3.0) million, respectively. For the three months ended March 31, 2022 and 2021, we had net realized gains (losses) on forward currency contracts of $1.2 million and ($3.3) million, respectively, primarily as a result of settling GBP and EUR forward contracts, respectively.

For the three months ended March 31, 2022, we had $21.7 million in unrealized appreciation on 36 portfolio company investments, which was offset by ($14.1) million in unrealized depreciation on 74 portfolio company investments. Unrealized appreciation for the three months ended March 31, 2022 resulted from an increase in fair value, primarily due to a tightening positive investment-related adjustments, and the reversal of unrealized depreciation from the sale of our debt investments. Unrealized depreciation was primarily due to negative valuation adjustments.

For the three months ended March 31, 2021, we had $27.5 million in unrealized appreciation on 57 portfolio company investments, which was offset by $31.8 million in unrealized depreciation on 55 portfolio company investments. Unrealized appreciation for the three months ended March 31, 2021 resulted from an increase in fair value, primarily due to a tightening spread environment, positive investment-related adjustments, and the reversal of unrealized depreciation from the sale of our debt investments. Unrealized depreciation was primarily due to negative valuation adjustments.

For the three months ended March 31, 2022 and 2021, we had unrealized appreciation on forward currency exchange contracts of $1.7 million and $4.6 million, respectively. For the three months ended March 31, 2022, unrealized appreciation on forward currency exchange contracts was due to EUR and GBP forward contracts.

The following table summarizes the impact of foreign currency for the three months ended March 31, 2022 and 2021 (dollars in thousands):

|  | For the Three months ended March 31, 2022 | 2021 |
| --- | ---: | ---: |
| Net change in unrealized depreciation on investments due to foreign currency | $(2,876) | $(17,338) |
| Net realized gain (loss) on investments due to foreign currency | (153) | 15,916 |
| Net change in unrealized appreciation on foreign currency translation | 346 | 386 |
| Net realized loss on foreign currency transactions | (488) | (3,026) |
| Net change in unrealized appreciation on forward currency exchange contracts | 1,651 | 4,577 |
| Net realized gain (loss) on forward currency exchange contracts | 1,243 | (3,292) |
| Foreign currency impact to net decrease in net assets resulting from operations | $(277) | $(2,777) |

Included in total net gains (losses) on the consolidated statements of operations is net gains (losses) of ($3.2) million and ($4.1) million related to realized and unrealized gains and losses on investments, foreign currency holdings and non-investment assets and liabilities attributable to the changes in foreign currency exchange rates for the three months ended March 31, 2022 and 2021, respectively. Including the total net realized and unrealized gains on forward currency exchange contracts of $2.9 million and $1.3 million, respectively, included in the above table, the net impact of foreign currency on total net gains (losses) on the consolidated statements of operations is ($0.3) million and ($2.8) million for the three months ended March 31, 2022 and 2021, respectively.

### Net Increase (Decrease) in Net Assets Resulting from Operations

For the three months ended March 31, 2022 and 2021, the net increase in net assets resulting from operations was $33.7 million and $31.8 million, respectively. Based on the weighted average shares of common stock outstanding for the three months ended March 31, 2022 and 2021, our per share net increase in net assets resulting from operations was $0.52 and $0.49, respectively.

### Financial Condition, Liquidity and Capital Resources

Our liquidity and capital resources are derived primarily from proceeds from equity issuances, advances from our credit facilities, 2019-1 Debt, 2023 Notes, March 2026 Notes, October 2026 Notes and cash flows from operations. The primary uses of our cash are for (1) investments in portfolio companies and other investments and to comply with certain portfolio diversification requirements; (2) the cost of operations (including payments to the Advisor under the Investment Advisory and Administration Agreements); (3) debt service, repayment, and other financing costs; and, (4) cash distributions to the holders of our common shares.

We intend to continue to generate cash primarily from cash flows from operations, future borrowings and future offerings of securities. We may from time to time raise additional equity or debt capital through registered offerings, enter into additional debt facilities, or increase the size of existing facilities or issue debt securities. Any such incurrence or issuance would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors. We are required to meet an asset coverage ratio, defined under the 1940 Act as the ratio of our total assets (less all liabilities and indebtedness not represented by senior securities) to our outstanding senior securities, of at least 150% after each issuance of senior securities. As of March 31, 2022 and December 31, 2021, our asset coverage ratio was 201% and 177%, respectively.

At March 31, 2022 and December 31, 2021, we had $114.8 million and $203.6 million in cash, foreign cash, restricted cash and cash equivalents, respectively.

At March 31, 2022, we had approximately $261.0 million of availability on our Sumitomo Credit Facility and $50.0 million of availability on our Revolving Advisor Loan, subject to existing terms and regulatory requirements. At December 31, 2021, we had approximately $300.0 million of availability on our Sumitomo Credit Facility and $50.0 million of availability on our Revolving Advisor Loan, subject to existing terms and regulatory requirements.

For the three months ended March 31, 2022, cash, foreign cash, restricted cash, and cash equivalents decreased by $88.7 million. During the three months ended March 31, 2022, we used $101.8 million in cash for operating activities. The decrease in cash used for operating activities was primarily related to the purchases of investments of $247.4 million, which was offset by proceeds from principal payments and sales of investments of $117.1 million and a net increase in assets resulting from operations of $33.7 million.

During the three months ended March 31, 2022, we provided $14.9 million for financing activities, primarily due to borrowings and repayments on our Sumitomo Credit Facility.

For the three months ended March 31, 2021, cash, foreign cash, restricted cash, and cash equivalents increased by $32.7 million. During the three months ended March 31, 2021, we provided $174.8 million in cash for operating activities. The increase in cash used for operating activities was primarily related to the proceeds from principal payments and sales of investments of $415.7 million,and a net increase in net assets resulting from operations of $31.8 million, which was offset by purchases of investments of $262.1 million and net realized gain from investments of $15.2 million.

During the three months ended March 31, 2021, we used $138.9 million from financing activities, primarily from borrowings on our debt from the JPM Credit Facility and the issuance of the $300.0 million 2026 Notes, offset by repayments on our debt of $486.8 million, including the termination of our BCSF Revolving Credit Facility, and distributions paid during the period of $21.9 million.

### Equity

On November 19, 2018, we closed our initial public offering (the “IPO”) issuing 7,500,000 shares of its common stock at a public offering price of $20.25 per share. Shares of common stock of the Company began trading on the New York Stock Exchange under the symbol “BCSF” on November 15, 2018. The offering generated net proceeds, after expenses, of $145.4 million. All outstanding capital commitments from the Company’s Private Offering were cancelled as of the completion of the IPO.

During the three months ended March 31, 2022, we did not issue shares of our common stock to investors who have opted into our dividend reinvestment plan. During the three months ended March 31, 2021, we did not issue shares of our common stock to investors who have opted into our dividend reinvestment plan.

On May 7, 2019, the Company’s Board of Directors authorized the Company to repurchase up to $50 million of its outstanding common stock in accordance with safe harbor rules under the Exchange Act of 1934. Any such repurchases will depend upon market conditions and there is no guarantee that the Company will repurchase any particular number of shares or any shares at all. As of March 31, 2022, there have been no repurchases of common stock.

On May 4, 2020, the Company’s Board of Directors approved a transferable subscription rights offering to our stockholders of record as of May 13, 2020. The rights entitled record stockholders to subscribe for up to an aggregate of 12,912,453 shares of our common stock. Record stockholders received one right for each share of common stock owned on the record date. The rights entitled the holders to purchase one new share of common stock for every four rights held, and record stockholders who fully exercised their rights were entitled to subscribe, subject to certain limitations and allotment rules, for additional shares that remain unsubscribed as a result of any unexercised rights. The rights were transferable and listed on the New York Stock Exchange under the symbol “BCSF RT”. The rights offering expired June 5, 2020. Based on the terms of the offering and the market price of the stock during the applicable period, holders of rights participating in the offering were entitled to purchase one new share of common stock for every four rights held at a subscription price of $10.2163 per share. On June 16, 2020, the Company closed its transferrable rights offering and issued 12,912,453 shares. The offering generated net proceeds, before expenses, of $129.6 million, including the underwriting discount and commissions of $2.3 million.

### Debt

Debt consisted of the following as of March 31, 2022 and December 31, 2021 (dollars in thousands):

|  | As of March 31, 2022 Total Aggregate Principal Amount Committed | Principal Amount Outstanding | Carrying Value (1) | As of December 31, 2021 Total Aggregate Principal Amount Committed | Principal Amount Outstanding | Carrying Value (1) |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| 2018-1 Notes | $— | $— | $— | $365,700 | $365,700 | $364,178 |
| 2019-1 Debt | 352,500 | 352,500 | 351,001 | 352,500 | 352,500 | 350,969 |
| Revolving Advisor Loan | 50,000 | — | — | 50,000 | — | — |
| 2023 Notes | 150,000 | 112,500 | 111,357 | 150,000 | 112,500 | 111,133 |
| March 2026 Notes | 300,000 | 300,000 | 295,539 | 300,000 | 300,000 | 295,260 |
| October 2026 Notes | 300,000 | 300,000 | 293,780 | 300,000 | 300,000 | 293,442 |
| Sumitomo Credit Facility | 300,000 | 39,000 | 39,000 | 300,000 | — | — |
| Total Debt | $1,452,500 | $1,104,000 | $1,090,677 | $1,818,200 | $1,430,700 | $1,414,982 |

(1) Carrying value represents aggregate principal amount outstanding less unamortized debt issuance costs.

### BCSF Revolving Credit Facility

On October 4, 2017, the Company entered into the revolving credit agreement (the “BCSF Revolving Credit Facility”) with us, as equity holder, BCSF I, LLC, a Delaware limited liability company and a wholly owned and consolidated subsidiary of the Company, as borrower, and Goldman Sachs Bank USA, as sole lead arranger (“Goldman Sachs”). The BCSF Revolving Credit Facility was subsequently amended on May 15, 2018 to reflect certain clarifications regarding margin requirements and hedging currencies. The maximum commitment amount under the BCSF Revolving Credit Facility is $500.0 million, and may be increased up to $750.0 million. Proceeds of the loans under the BCSF Revolving Credit Facility may be used to acquire certain qualifying loans and such other uses as permitted under the BCSF Revolving Credit Facility. The BCSF Revolving Credit Facility includes customary affirmative and negative covenants, including certain limitations on the incurrence of additional indebtedness and liens, as well as usual and customary events of default for revolving credit facilities of this nature.

On January 8, 2020, the Company entered into an amended and restated credit agreement of its BCSF Revolving Credit Facility. The amendment amended the existing credit facility to, among other things, modify various financial covenants, including removing a liquidity covenant and adding a net asset value covenant with respect to the Company, as sponsor.

On March 31, 2020, the Parties entered into Omnibus Amendment No. 1 to the amended and restated credit agreement. The amendment amended the existing credit facility to, among other things, provide for enhanced flexibility to purchase or contribute and borrow against revolving loans and delayed draw term loans, and to count certain additional assets in the calculation of collateral for the outstanding advances; increase the spread payable under the facility from 2.50% to 3.25% per annum; include additional events of default to the existing credit facility, including but not limited to, a qualified equity raise not effected on or prior to June 22, 2020; and, after June 22, 2020, require the Company to maintain at least $50.0 million of unencumbered liquidity or pay down the facility by at least $50.0 million.

On May 27, 2020, the Parties entered into Amendment No. 2 to the amended and restated credit agreement. The amendment amended the existing credit facility to, among other things, (i) permit the Company to incur a lien on assets purchased with the proceeds of the rights offering and (ii) remove the requirement that the Company maintain $50.0 million in unencumbered cash after the completion of the rights offering, instead requiring a pay down of $50.0 million within two business days after the closing of the rights offering, which was subsequently paid.

On August 14, 2020, the Parties entered into the second amended and restated credit agreement and the third amended and restated margining agreement (collectively, the “Amendment”), which amended and restated the terms of the existing credit facility (the “Amended and Restated Credit Facility”). The Amendment amends the existing credit facility to, among other things, (i) decrease the financing limit from $500.0 million to $425.0 million, (ii) decrease the interest rate on financing from LIBOR plus 3.25% per annum to LIBOR plus 3.00% per annum, and (iii) provide enhanced flexibility to contribute and borrow against revolving and delayed draw loans and modify certain other terms relating to collaterals.

On March 11, 2021, the BCSF Revolving Credit Facility was terminated. The proceeds from the March 2026 Notes were used to repay the total outstanding debt.

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the BCSF Revolving Credit Facility were as follows (dollars in thousands):

|  | For the Three Months Ended March 31, 2022 | 2021 |
| --- | ---: | ---: |
| Borrowing interest expense | $— | $509 |
| Unused facility fee | — | 118 |
| Amortization of deferred financing costs and upfront commitment fees | — | — |
| Total interest and debt financing expenses | $— | $627 |

### 2018-1 Notes

On September 28, 2018 (the “2018-1 Closing Date”), we, through BCC Middle Market CLO 2018-1 LLC (the “2018-1 Issuer”), a Delaware limited liability company and a wholly owned and consolidated subsidiary of the Company, completed its $451.2 million term debt securitization (the “CLO Transaction”). The notes issued in connection with the CLO Transaction (the “2018-1 Notes”) are secured by a diversified portfolio of the 2018-1 Issuer consisting primarily of middle market loans, the majority of which are senior secured loans (the “2018-1 Portfolio”). At the 2018-1 Closing Date, the 2018-1 Portfolio was comprised of assets transferred from the Company and its consolidated subsidiaries. All transfers were eliminated in consolidation and there were no realized gains or losses recognized in the CLO Transaction.

The CLO Transaction was executed through a private placement of the following 2018-1 Notes. The Class A-1 A, A-1 B, A-2, B and C 2018-1 Notes were issued at par and are scheduled to mature on October 20, 2030. The Company received 100% of the membership interests (the “Membership Interests”) in the 2018-1 Issuer in exchange for its sale to the 2018-1 Issuer of the initial closing date loan portfolio. The Membership Interests do not bear interest. As of December 31, 2021, the Class A-1 A, A-1 B, A-2, B and C 2018-1 Notes were included in the consolidated financial statements. The Membership Interests were eliminated in consolidation.

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the 2018-1 Issuer were as follows:

|  | For the Three Months Ended March 31, 2022 | 2021 |
| --- | ---: | ---: |
| Borrowing interest expense | $1,299 | $2,024 |
| Amortization of debt issuance costs and upfront commitment fees | 28 | 43 |
| Total interest and debt financing expenses | $1,327 | $2,067 |

98

On March 7, 2022, the Company sold 70% of the membership equity interests of the Company’s 2018-1 Notes to SLP, which resulted in the deconsolidation of the 2018-1 Notes from the Company’s consolidated financial statements.

### JPM Credit Facility

On April 30, 2019, the Company entered into a loan and security agreement (the “JPM Credit Agreement” or the “JPM Credit Facility”) as Borrower, with JPMorgan Chase Bank, National Association, as Administrative Agent, and Wells Fargo Bank, National Association as Collateral Administrator, Collateral Agent, Securities Intermediary and Bank. The facility amount under the JPM Credit Agreement was $666.6 million. Borrowings under the JPM Credit Facility bore interest at LIBOR plus 2.75%.

On January 29, 2020, the Company entered into an amended and restated loan and security agreement (the “Amended Loan and Security Agreement”) as Borrower, with JPMorgan Chase Bank, National Association, as Administrative Agent, and Wells Fargo Bank, National Association as Collateral Administrator, Collateral Agent, Securities Intermediary and Bank. The Amended Loan and Security Agreement amended the Existing Loan and Security Agreement to, among other things, (1) decrease the financing limit under the agreement from $666.6 million to $500.0 million; (2) decrease the minimum facility amount from $466.6 million to $300.0 million period from January 29, 2020 to July 29, 2020 (the minimum facility amount will increase to $350.0 million after July 29, 2020 until the end of the reinvestment period); (3) decrease the interest rate on financing from 2.75% per annum over the applicable LIBOR to 2.375% per annum over the applicable LIBOR; and (4) extend the scheduled termination date of the agreement from November 29, 2022 to January 29, 2025.

On March 20, 2020, the Company entered into a second amended and restated loan and security agreement between the parties (the “Second Amended Loan and Security Agreement”). The Second Amended Loan and Security Agreement, among other things, provided flexibility to contribute and borrow against revolving loans, reduce the amount required to be reserved for unfunded revolvers and delayed draw obligations and decreased the financing limit by $50.0 million within 90 days or, based on the occurrence of certain events, such earlier period as may be set forth in the Second Amended Loan and Security Agreement. The Company paid to the Administrative Agent $50.0 million to the prepayment of Advances and the Financing Commitments reduced by the amount of principal so prepaid on the earlier of two Business days following the closing of the Rights Offering and June 18, 2020.

On July 2, 2020, the Company entered into a third amended and restated loan and security agreement with respect to the JPM Credit Agreement to, among other things, adjust the advance rates and make certain changes of an updating nature.

The facility amount under the JPM Credit Agreement is $450.0 million. Proceeds of the loans under the JPM Credit Facility were used to acquire certain qualifying loans and such other uses as permitted under the JPM Credit Agreement. The period from the effective date of the amendment until January 29, 2023 is referred to as the reinvestment period and during such reinvestment period, the Borrower could request drawdowns under the JPM Credit Facility.

The maturity date was the earliest of: (a) January 29, 2025, (b) the date on which the secured obligations become due and payable following the occurrence of an event of default, (c) the date on which the advances are repaid in full and (d) the date after a market value cure failure occurs on which all portfolio investments have been sold and proceeds there from have been received by the Borrower. The stated maturity date of January 29, 2025 could be extended for successive one-year periods by mutual agreement of the Borrower and the Administrative Agent.

The JPM Credit Agreement included customary affirmative and negative covenants, including certain limitations on the incurrence of additional indebtedness and liens, as well as usual and customary events of default for revolving credit facilities of this nature.

Borrowings under the JPM Credit Facility bore interest at LIBOR plus a margin. The Company paid an unused commitment fee of between 37.5 basis points (0.375%) and 75 basis points (0.75%) per annum depending on the size of the unused portion of the facility. Interest was payable quarterly in arrears. As of December 31, 2020, the JPM Credit Facility was accruing interest expense at a rate of LIBOR plus 2.375%. We paid an unused commitment fee of 75 basis points (0.75%) per annum.

On December 27, 2021, the JPM Credit Facility was terminated.

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the JPM Credit Facility were as follows (dollars in thousands):

|  | For the Three Months Ended March 31, 2022 | 2021 |
| --- | ---: | ---: |
| Borrowing interest expense | $— | $2,424 |
| Unused facility fee | — | — |
| Amortization of deferred financing costs and upfront commitment fees | — | 64 |
| Total interest and debt financing expenses | $— | $2,488 |

### 2019-1 Debt

On August 28, 2019, the Company, through BCC Middle Market CLO 2019-1 LLC (the “2019-1 Issuer”), a Cayman Islands limited liability company and a wholly-owned and consolidated subsidiary of the Company, and BCC Middle Market CLO 2019-1 Co-Issuer, LLC (the “Co-Issuer” and, together with the Issuer, the “Co-Issuers”), a Delaware limited liability company, completed its $501.0 million term debt securitization (the “2019-1 CLO Transaction”). The notes issued in connection with the 2019-1 CLO Transaction (the “2019-1 Notes”) are secured by a diversified portfolio of the Co-Issuers consisting primarily of middle market loans, the majority of which are senior secured loans (the “2019-1 Portfolio”). The Co-Issuers also issued Class A-1L Loans (the “Loans” and, together with the 2019-1 Notes, the “2019-1 Debt”). The Loans are also secured by the 2019-1 Portfolio. At the 2019-1 closing date, the 2019-1 Portfolio was comprised of assets transferred from the Company and its consolidated subsidiaries. All transfers were eliminated in consolidation and there were no realized gains or losses recognized in the 2019-1 CLO Transaction.

On November 30, 2021, the Co-Issuers refinanced the 2019-1 CLO Transaction through a private placement of $410 million of senior secured and senior deferrable notes consisting of: (i) $282.5 million of Class A-1-R Senior Secured Floating Rate Notes, which currently bear interest at the applicable reference rate plus 1.50% per annum; (ii) $55 million of Class A-2-R Senior Secured Floating Rate Notes, which bear interest at the applicable reference rate plus 2.00% per annum; (iii) $47.5 million of Class B-R Senior Deferrable Floating Rate Notes, which bear interest at the applicable reference rate plus 2.60% per annum; and (iv) $25.0 million of Class C-R Senior Deferrable Floating Rate Notes, which bear interest at the applicable reference rate plus 3.75% per annum (collectively, the “2019-1 CLO Reset Notes”). The 2019-1 CLO Reset Notes are scheduled to mature on October 15, 2033 and the reinvestment period ends October 15, 2025. The Company retained $32.5 million of the Class B-R Notes and $25.0 million of the Class C-R Notes. The retained notes by the Company are eliminated in consolidation. The transaction resulted in a realized loss on the extinguishment of debt of $2.3 million from the acceleration of unamortized debt issuance costs of. The obligations of the Issuer under the CLO Transaction are non-recourse to the Company.

2019-1 CLO Reset Notes was executed through a private placement of the following 2019-1 Debt (dollars in thousands):

| 2019-1 Debt | Principal Amount | Spread above Index | Interest rate at March 31, 2022 |
| --- | ---: | --- | ---: |
| Class A-1-R | $282,500 | 1.50% + 3 Month LIBOR | 1.74% |
| Class A-2-R | 55,000 | 2.00% + 3 Month LIBOR | 2.24% |
| Class B-R | 15,000 | 2.60% + 3 Month LIBOR | 2.84% |
| Total 2019-1 Debt | 352,500 |  |  |
| Membership Interests | 102,250 | Non-interest bearing | Not applicable |
| Total | $454,750 |  |  |

The Loans and Class A-1-R, A-2-R, and B-R Notes are included in the consolidated financial statements of the Company. The $32.5 million of the Class B-R Notes, $25.0 million of the Class C-R Notes and Membership Interests retained by the Company are eliminated in consolidation.

The Company serves as portfolio manager of the 2019-1 Issuer pursuant to a portfolio management agreement between the Company and the 2019-1 Issuer. For so long as the Company serves as portfolio manager, the Company will not charge any management fee or subordinated interest to which it may be entitled.

During the reinvestment period, pursuant to the indenture and loan agreement governing the 2019-1 Notes and Loans, respectively, all principal collections received on the underlying collateral may be used by the 2019-1 Issuer to purchase new collateral under the direction of the Company in its capacity as portfolio manager of the 2019-1 Issuer and in accordance with the 2019-1 Issuer investment strategy and the terms of the indenture and loan agreement, as applicable.

The Company has agreed to hold on an ongoing basis the Membership Interests with an aggregate dollar purchase price at least equal to 5% of the aggregate amount of all obligations issued by the 2019-1 Co-Issuers for so long as the 2019-1 Debt remains outstanding.

The 2019-1 Issuer pays ongoing administrative expenses to the trustee, 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 2019-1 Issuer.

As of March 31, 2022, there were 47 first lien and second lien senior secured loans with a total fair value of approximately $468.7 million and cash of $34.0 million securing the 2019-1 Debt. As of December 31, 2021, there were 45 first lien and second lien senior secured loans with a total fair value of approximately $441.0 million and cash of $62.6 million securing the 2019-1 Debt. Assets that are pledged as collateral for the 2019-1 Debt are not directly available to the creditors of the Company to satisfy any obligations of the Company other than the Company’s obligations under the indenture and loan agreement governing the 2019-1 Debt. The creditors of the 2019-1 Co-Issuers have received security interests in such assets and such assets are not intended to be available to the creditors of the Company (or an affiliate of the Company). The 2019-1 Portfolio must meet certain requirements, including asset mix and concentration, term, agency rating, collateral coverage, minimum coupon, minimum spread and sector diversity requirements in the indenture and loan agreement governing the 2019-1 Debt. As of March 31, 2022 and December 31, 2021, the Company was in compliance with its covenants related to the 2019-1 Debt.

Costs of the offering of $1.5 million were incurred in connection with the 2019-1 CLO Reset Notes which have been recorded as debt issuance costs and presented as a reduction to the outstanding principal amount of the 2019-1 Debt on the consolidated statements of assets and liabilities and are being amortized over the life using the effective interest method. The balance of the unamortized debt issuance costs related to the 2019-1 Issuer was $1.5 million and $1.5 million as of March 31, 2022 and December 31, 2021, respectively.

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the 2019-1 Co-Issuers were as follows (dollars in thousands):

|  | For the Three Months Ended March 31, 2022 | 2021 |
| --- | ---: | ---: |
| Borrowing interest expense | $1,624 | $2,526 |
| Amortization of debt issuance costs and upfront commitment fees | 32 | 57 |
| Total interest and debt financing expenses | $1,656 | $2,583 |

### Revolving Advisor Loan

On March 27, 2020, the Company entered into an unsecured revolving loan agreement (the “Revolving Advisor Loan”) with BCSF Advisors, LP, the investment adviser of the Company. The Revolving Advisor Loan has a maximum credit limit of $50.0 million and a maturity date of March 27, 2023. The Revolving Advisor Loan accrues interest at the Applicable Federal Rate from the date of such loan until the loan is repaid in full. As of March 31, 2022, there were no borrowings under the Revolving Advisor Loan.

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the Revolving Advisor Loan were as follows (dollars in thousands):

|  | For the Three Months Ended March 31, 2022 | 2021 |
| --- | ---: | ---: |
| Borrowing interest expense | $— | $— |
| Total interest and debt financing expenses | $— | $— |

101

### 2023 Notes

On June 10, 2020, the Company entered into a Master Note Purchase Agreement with institutional investors listed on the Purchaser Schedule thereto (the “Note Purchase Agreement”), in connection with the Company’s issuance of $150.0 million aggregate principal amount of its 8.50% senior unsecured notes due 2023 (the “ 2023 Notes”). The sale of the 2023 Notes generated net proceeds of approximately $146.4 million, including an offering discount of $1.5 million and debt issuance costs in connection with the transaction, including fees and commissions, of $2.1 million.

The 2023 Notes will mature on June 10, 2023 and may be redeemed in whole or in part at the Company’s option at any time or from time to time at the redemption prices set forth in the Note Purchase Agreement. The 2023 Notes will bear interest at a rate of 8.50% per year payable semi-annually on June 10 and December 10 of each year, commencing on December 10, 2020. As of March 31, 2022, the Company was in compliance with the terms of the Note Purchase Agreement governing the 2023 Notes.

On July 16, 2021 the Company repurchased $37.5 million of the 2023 Notes at a total cost of $39.5 million. This resulted in a realized loss on the extinguishment of debt of $2.5 million, which included a premium paid of $2.0 million and acceleration of unamortized debt issuance costs and original issue discount of $0.5 million.

As of March 31, 2022 and December 31, 2021, the components of the carrying value of the 2023 Notes were as follows (dollars in thousands):

|  | March 31, 2022 | December 31, 2021 |
| --- | ---: | ---: |
| Principal amount of debt | $112,500 | $112,500 |
| Unamortized debt issuance cost | (687) | (822) |
| Original issue discount, net of accretion | (456) | (545) |
| Carrying value of 2023 Notes | $111,357 | $111,133 |

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the 2023 Notes were as follows (dollars in thousands):

|  | For the Three Months Ended March 31, 2022 | 2021 |
| --- | ---: | ---: |
| Borrowing interest expense | $2,250 | $3,188 |
| Amortization of debt issuance cost | 135 | 180 |
| Accretion of original issue discount | 90 | 119 |
| Total interest and debt financing expenses | $2,475 | $3,487 |

### March 2026 Notes

On March 10, 2021, the Company and U.S. Bank National Association (the “Trustee”), entered into an Indenture (the “Base Indenture”) and First Supplemental Indenture (the “First Supplemental Indenture,” and together with the Base Indenture, the “Indenture”) between the Company and the Trustee. The First Supplemental Indenture relates to the Company’s issuance of $300.0 million aggregate principal amount of its 2.95% notes due 2026 (the “2026 Notes”).

The March 2026 Notes will mature on March 10, 2026 and may be redeemed in whole or in part at the Company’s option at any time or from time to time at the redemption prices set forth in the Indenture. The March 2026 Notes bear interest at a rate of 2.95% per year payable semi-annually on March 10th and September 10th of each year, commencing on September 10, 2021. The March 2026 Notes are general unsecured obligations of the Company that rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the March 2026 Notes, rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by the Company, rank effectively junior to any of the Company’s secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company’s subsidiaries, financing vehicles or similar facilities.

The net proceeds to the Company were approximately $294.3 million, after deducting the underwriting discounts and commissions of $4.4 million and offering expenses of $1.3 million.

As of March 31, 2022 and December 31, 2021, the components of the carrying value of the March 2026 Notes were as follows (dollars in thousands):

|  | March 31, 2022 | December 31, 2021 |
| --- | ---: | ---: |
| Principal amount of debt | $300,000 | $300,000 |
| Unamortized debt issuance cost | (2,559) | (2,719) |
| Original issue discount, net of accretion | (1,902) | (2,021) |
| Carrying value of March 2026 Notes | $295,539 | $295,260 |

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the 2026 Notes were as follows (dollars in thousands):

|  | For the Three Months Ended March 31, 2022 | 2021 |
| --- | ---: | ---: |
| Borrowing interest expense | $2,213 | $516 |
| Amortization of debt issuance cost | 159 | 37 |
| Amortization of original issue discount | 119 | 28 |
| Total interest and debt financing expenses | $2,491 | $581 |

### October 2026 Notes

On October 13, 2021, the Company and the Trustee entered into a Second Supplemental Indenture (the “Second Supplemental Indenture”) to the Indenture between the Company and the Trustee. The Second Supplemental Indenture relates to the Company’s issuance of $300.0 million aggregate principal amount of its 2.55% notes due 2026 (the “October 2026 Notes,” and together with the March 2026 Notes, the “2026 Notes”).

The October 2026 Notes will mature on October 13, 2026 and may be redeemed in whole or in part at the Company’s option at any time or from time to time at the redemption prices set forth in the Indenture. The October 2026 Notes bear interest at a rate of 2.55% per year payable semi-annually on April 13 and October 13 of each year, commencing on April 13, 2022. The October 2026 Notes are general unsecured obligations of the Company that rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the October 2026 Notes, rank *pari passu* with all existing and future unsecured unsubordinated indebtedness issued by the Company, rank effectively junior to any of the Company’s secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company’s subsidiaries, financing vehicles or similar facilities.

The net proceeds to the Company were approximately $293.1 million, after deducting the underwriting discounts and commissions of $6.2 million and offering expenses of $0.7 million.

As of March 31, 2022 and December 31, 2021, the components of the carrying value of the October 2026 Notes were as follows (dollars in thousands):

|  | March 31, 2022 | December 31, 2021 |
| --- | ---: | ---: |
| Principal amount of debt | $300,000 | $300,000 |
| Unamortized debt issuance cost | (3,315) | (3,495) |
| Original issue discount, net of accretion | (2,905) | (3,063) |
| Carrying value of October 2026 Notes | $293,780 | $293,442 |

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the 2026 Notes were as follows (dollars in thousands):

|  | For the Three Months Ended March 31, 2022 | 2021 |
| --- | ---: | ---: |
| Borrowing interest expense | $1,912 | $— |
| Amortization of debt issuance cost | 180 | — |
| Amortization of original issue discount | 158 | — |
| Total interest and debt financing expenses | $2,250 | $— |

103

### Sumitomo Credit Facility

On December 24, 2021, the Company entered into a senior secured revolving credit agreement (the “Sumitomo Credit Agreement” or the “Sumitomo Credit Facility”) as Borrower, with Sumitomo Mitsui Banking Corporation, as Administrative Agent and Sole Book Runner, and with Sumitomo Mitsui Banking Corporation and MUFG Union Bank, N.A., as Joint Lead Arrangers. The Credit Agreement is effective as of December 24, 2021.

The facility amount under the Sumitomo Credit Agreement is $300.0 million with an accordion provision to permit increases to the total facility amount up to $1.0 billion. Proceeds of the loans under the Sumitomo Credit Agreement may be used for general corporate purposes of the Company, including, without limitation, repaying outstanding indebtedness, making distributions, contributions and investments, and acquisition and funding, and such other uses as permitted under the Sumitomo Credit Agreement. The maturity date is December 24, 2026.

Interest under the Sumitomo Credit Agreement for (i) loans for which the Company elects the base rate option, (A) if the borrowing base is equal to or greater than the product of 1.60 and the revolving credit exposure, is payable at an “alternate base rate” (which is the greater of zero and the highest of (a) the prime rate as published in the print edition of The Wall Street Journal, Money Rates Section, (b) the federal funds effective rate plus 0.5% and (c) the one-month Eurocurrency rate plus 1% per annum) plus 0.75% per annum and (B) if the borrowing base is less than the product of 1.60 and the revolving credit exposure, the alternate base rate plus 0.875% per annum; (ii) loans for which the Company elects the Eurocurrency option, (A) if the borrowing base is equal to or greater than the product of 1.60 and the revolving credit exposure, is payable at a rate equal to the Eurocurrency rate plus 1.75% per annum and (B) if the borrowing base is less than the product of 1.60 and the revolving credit exposure, is payable at a rate equal to the Eurocurrency rate plus 1.875% per annum; and (iii) loans for which the Company elects the risk-free-rate option, (A) if the borrowing base is equal to or greater than the product of 1.60 and the revolving credit exposure, is payable at a rate equal to risk-free-rate plus 1.8693% per annum and (B) if the borrowing base is less than the product of 1.60 and the revolving credit exposure, is payable at a rate equal to risk-free-rate plus 1.9943% per annum. The Company pays a used commitment fee of 37.5 basis points (0.375%) on the average daily unused amount of the dollar commitment.

The Sumitomo Credit Agreement includes customary affirmative and negative covenants, including certain limitations on the incurrence of additional indebtedness and liens, as well as usual and customary events of default for revolving credit facilities of this nature. As of March 31, 2022, the Company was in compliance with its covenants related to the Sumitomo Credit Facility.

As of March 31, 2022 and December 31, 2021, there were $39.0 million and $0.0 million of borrowings under the Sumitomo Credit Facility, and the company was in compliance with the terms of the Sumitomo Credit Facility.

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the Sumitomo Credit Facility were as follows (dollars in thousands):

|  | For the Three Months Ended March 31, 2022 | 2021 |
| --- | ---: | ---: |
| Borrowing interest expense | $44 | $— |
| Unused facility fee | 292 | — |
| Amortization of original issue discount | 108 | — |
| Total interest and debt financing expenses | $444 | $— |

104

### Distribution Policy

The Company’s distributions are recorded on the record date. The following table summarizes distributions declared during the three months ended March 31, 2022 (dollars in thousands, except per share data):

| Date Declared | Record Date | Payment Date | Amount Per Share | Total Distributions |
| --- | --- | --- | ---: | ---: |
| February 16, 2022 | March 31, 2022 | April 29, 2022 | $0.34 | $21,951 |
| Total distributions declared |  |  | $0.34 | $21,951 |

The distributions declared during the three months ended March 31, 2022 were derived from investment company taxable income and net capital gain, if any.

The Company’s distributions are recorded on the record date. The following table summarizes distributions declared during the three months ended March 31, 2021 (dollars in thousands, except per share data):

| Date Declared | Record Date | Payment Date | Amount Per Share | Total Distributions |
| --- | --- | --- | ---: | ---: |
| February 18, 2021 | March 31, 2021 | April 30, 2021 | $0.34 | $21,951 |
| Total distributions declared |  |  | $0.34 | $21,951 |

Distributions to common stockholders are recorded on the record date. To the extent that we have income available, we intend to distribute quarterly distributions to our stockholders. Our quarterly distributions, if any, will be determined by the Board. Any distributions to our stockholders will be declared out of assets legally available for distribution.

We have elected to be treated, and intend to operate in a manner so as to continuously qualify, as a regulated investment company (a “RIC) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), beginning with our taxable year ended December 31, 2016. To qualify for and maintain RIC tax treatment, among other things, we must distribute dividends to our stockholders in respect of each taxable year of an amount generally at least equal to 90% of the sum of our net ordinary income and net short-term capital gains in excess of our net long-term capital losses. In order to avoid the imposition of certain excise taxes imposed on RICs, we must distribute dividends to our stockholders in respect of each calendar year of an amount at least equal to the sum of: (1) 98% of our net ordinary income (taking into account certain deferrals and elections) for such calendar year; (2) 98.2% of our capital gains in excess of capital losses, adjusted for certain ordinary losses, generally for the one-year period ending on October 31 of such calendar year; and (3) the sum of any net ordinary income plus capital gains net income for preceding years that were not distributed during such years and on which we paid no federal income tax.

We intend to distribute net capital gains (i.e., net long-term capital gains in excess of net short-term capital losses), if any, at least annually out of the assets legally available for such distributions. However, we may decide in the future to retain all or a portion of our net capital gains for investment, incur a corporate-level tax on such capital gains, and elect to treat such capital gains as deemed distributions to our stockholders.

We have adopted a dividend reinvestment plan that provides for the reinvestment of cash dividends and distributions. Prior to the IPO, stockholders who “opted in” to our dividend reinvestment plan had their cash dividends and distributions automatically reinvested in additional shares of our common stock, rather than receiving cash dividends and distributions. Subsequent to the IPO, stockholders who do not “opt out” of our dividend reinvestment plan will have their cash dividends and distributions automatically reinvested in additional shares of our common stock, rather than receiving cash dividends and distributions. Stockholders could elect to “opt in” or “opt out” of our dividend reinvestment plan in their subscription agreements, through the private offering. The elections of stockholders prior to the IPO shall remain effective after the IPO.

The U.S. federal income tax characterization of distributions declared and paid for the fiscal year will be determined at fiscal year-end based upon our investment company taxable income for the full fiscal year and distributions paid during the full year.

### Commitments and Off-Balance Sheet Arrangements

We may become a party to financial instruments with off-balance sheet risk in the normal course of our business to fund investments and 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 on the statements of assets and liabilities.

As of March 31, 2022, the Company had $235.1 million of unfunded commitments under loan and financing agreements as follows (dollars in thousands):

| Portfolio Company & Investment | Expiration Date (1) | Unfunded Commitments (2) |
| --- | --- | ---: |
| 9 Story Media Group Inc. - Revolver | 4/30/2026 | $1 |
| A&R Logistics, Inc. - Revolver | 5/5/2025 | 3,051 |
| Abracon Group Holding, LLC - Revolver | 7/18/2024 | 2,833 |
| Allworth Financial Group, L.P. - Delayed Draw | 12/23/2026 | 511 |
| Allworth Financial Group, L.P. - Revolver | 12/23/2026 | 2,440 |
| Amspec Services, Inc. - Revolver | 7/2/2024 | 4,958 |
| Ansira Holdings, Inc. - Revolver | 12/20/2024 | 1,700 |
| Appriss Holdings, Inc. - Revolver | 5/6/2027 | 753 |
| Aramsco, Inc. - Revolver | 8/28/2024 | 1,089 |
| Armstrong Bidco Limited - Delayed Draw | 4/30/2025 | 4,762 |
| Avalon Acquiror, Inc. - Revolver | 3/10/2028 | 7,353 |
| Batteries Plus Holding Corporation - Revolver | 7/6/2022 | 2,691 |
| Captain D's LLC - Revolver | 12/15/2023 | 1,862 |
| CB Nike IntermediateCo Ltd - Revolver | 10/31/2025 | 44 |
| Concert Golf Partners Holdco DD T/L - Delayed Draw | 3/30/2029 | 4,201 |
| Concert Golf Partners Holdco R/C - Revolver | 3/31/2028 | 2,136 |
| CPS Group Holdings, Inc. - Revolver | 3/3/2025 | 4,933 |
| CST Buyer Company - Revolver | 10/3/2025 | 2,190 |
| DC Blox Inc. - Delayed Draw | 3/22/2026 | 10,590 |
| Direct Travel, Inc. - Delayed Draw | 10/2/2023 | 2,625 |
| Efficient Collaborative Retail Marketing Company, LLC - Revolver | 6/15/2022 | 2,267 |
| Element Buyer, Inc. - Revolver | 7/19/2024 | 2,550 |
| Grammer Purchaser, Inc. - Revolver | 9/30/2024 | 750 |
| Great Expressions Dental Center PC - Revolver | 9/28/2022 | 219 |
| Green Street Parent, LLC - Revolver | 8/27/2025 | 2,419 |
| GSP Holdings, LLC - Revolver | 11/6/2025 | 1,813 |
| JHCC Holdings, LLC - Revolver | 9/9/2025 | 1,160 |
| Kellstrom Commercial Aerospace, Inc. - Revolver | 7/1/2025 | 1,493 |
| Mach Acquisition R/C - Revolver | 10/18/2026 | 10,043 |
| Margaux Acquisition Inc. - Revolver | 12/19/2024 | 2,872 |

106

|  | Expiration Date (1) | Unfunded Commitments (2) |
| --- | --- | ---: |
| Margaux UK Finance Limited - Revolver | 12/19/2024 | 656 |
| masLabor Revolver - Revolver | 7/1/2027 | 1,034 |
| MRHT Acquisition Facility - First Lien Senior Secured Loan | 7/26/2028 | 259 |
| MRI Software LLC - Revolver | 2/10/2026 | 1,782 |
| MZR Buyer, LLC - Revolver | 12/21/2026 | 5,210 |
| New Look (Delaware) Corporation - Delayed Draw | 5/26/2028 | 2,005 |
| New Look Vision Group - Delayed Draw | 5/26/2028 | 3,818 |
| New Look Vision Group - Revolver | 5/26/2026 | 1,033 |
| Omni Intermediate DD T/L 2 - First Lien Senior Secured Loan | 11/23/2026 | 504 |
| Omni Intermediate R/C - Revolver | 11/23/2025 | 732 |
| Opus2 - Delayed Draw | 5/5/2028 | 7,167 |
| Paisley Bidco Limited - Delayed Draw | 11/26/2028 | 8,374 |
| Parcel2Go Acquisition Facility - Subordinated Debt | 7/15/2028 | 36 |
| Premier Imaging, LLC - Delayed Draw | 1/2/2025 | 5,235 |
| Refine Intermediate, Inc. - Revolver | 9/3/2026 | 5,340 |
| Revalize, Inc. - Delayed Draw | 4/15/2027 | 13,395 |
| Revalize, Inc. - Revolver | 4/15/2027 | 503 |
| RoC Opco LLC - Revolver | 2/25/2025 | 10,241 |
| Service Master Revolving Loan - Revolver | 8/16/2027 | 2,612 |
| Service Master Term Note - First Lien Senior Secured Loan | 8/16/2027 | 2 |
| Smartronix RC - Revolver | 11/23/2028 | 6,321 |
| Solaray, LLC - Revolver | 9/9/2022 | 10,484 |
| SunMed Group Holdings, LLC - Revolver | 6/16/2027 | 1,032 |
| Superna Inc. - Delayed Draw | 3/6/2028 | 2,631 |
| Superna Inc. - Revolver | 3/6/2028 | 2,631 |
| ASP-r-pac Acquisition Co LLC - Revolver | 12/29/2027 | 3,253 |
| Swoogo LLC - Revolver | 12/9/2026 | 1,243 |
| TEI Holdings Inc. - Revolver | 12/23/2025 | 4,070 |
| TGI Sport Bidco Pty Ltd - Revolver | 4/30/2026 | 3,123 |
| TLC Purchaser, Inc. - Delayed Draw | 10/13/2025 | 7,119 |

107

|  | Expiration Date (1) | Unfunded Commitments (2) |
| --- | --- | ---: |
| TLC Purchaser, Inc. - Revolver | 10/13/2025 | 2,492 |
| V Global Holdings LLC - Revolver | 12/22/2025 | 7,885 |
| Ventiv Holdco, Inc. - Revolver | 9/3/2025 | 3,407 |
| WCI Gigawatt Purchaser DD T/L - Delayed Draw | 11/19/2027 | 1,609 |
| WCI Gigawatt Purchaser R/C - Revolver | 11/19/2027 | 2,735 |
| WCI-HSG Purchaser, Inc. - Revolver | 2/22/2025 | 378 |
| Whitcraft LLC - Revolver | 4/3/2023 | 1,812 |
| World Insurance - Revolver | 4/1/2026 | 861 |
| WSP Initial Term Loan - First Lien Senior Secured Loan | 4/27/2023 | 1,797 |
| WSP Revolving Loan - Revolver | 4/27/2027 | 402 |
| WU Holdco, Inc. - Revolver | 3/26/2025 | 5,071 |
| YLG Holdings, Inc. - Revolver | 10/31/2025 | 8,545 |
| Total First Lien Senior Secured Loans |  | $235,148 |

(1) Commitments are generally subject to borrowers meeting certain criteria such as compliance with covenants and certain operational metrics. These amounts may remain outstanding until the commitment period of an applicable loan expires, which may be shorter than its maturity.

(2) Unfunded commitments denominated in currencies other than U.S. dollars have been converted to U.S. dollars using the applicable foreign currency exchange rate as of March 31, 2022.

As of December 31, 2021, the Company had $234.0 million of unfunded commitments under loan and financing agreements as follows (dollars in thousands):

| Portfolio Company & Investment | Expiration Date (1) | Unfunded Commitments (2) |
| --- | --- | ---: |
| 9 Story Media Group Inc. - Revolver | 4/30/2026 | $1 |
| A&R Logistics, Inc. - Revolver | 5/5/2025 | 3,281 |
| Abracon Group Holding, LLC - Revolver | 7/18/2024 | 2,833 |
| Allworth Financial Group, L.P. - Delayed Draw | 12/23/2026 | 507 |
| Allworth Financial Group, L.P. - Revolver | 12/23/2026 | 2,440 |
| AMI US Holdings Inc. - Revolver | 4/1/2024 | 1,047 |
| Amspec Services, Inc. - Revolver | 7/2/2024 | 4,179 |
| Ansira Holdings, Inc. - Revolver | 12/20/2022 | 1,700 |
| Appriss Holdings, Inc. - Revolver | 5/6/2027 | 753 |
| Aramsco, Inc. - Revolver | 8/28/2024 | 3,387 |
| Armstrong Bidco T/L – First Lien Senior Secured Loan | 4/30/2025 | 6,542 |
| ASP-r-pac Acquisition Co LLC – Revolver | 12/29/2027 | 2,603 |
| Batteries Plus Holding Corporation – Revolver | 6/30/2023 | 3,433 |
| Captain D’s LLC – Revolver | 12/15/2023 | 1,862 |
| CPS Group Holdings, Inc. – Revolver | 3/3/2025 | 4,933 |
| CST Buyer Company – Revolver | 10/3/2025 | 2,190 |
| DC Blox Inc. – First Lien Senior Secured Loan | 3/22/2026 | 12,781 |
| Direct Travel, Inc. – Delayed Draw | 10/2/2023 | 2,625 |
| Efficient Collaborative Retail Marketing Company, LLC – Revolver | 6/15/2022 | 2,267 |

108

|  | Expiration Date (1) | Unfunded Commitments (2) |
| --- | --- | ---: |
| Element Buyer, Inc. – Revolver | 7/19/2024 | 2,550 |
| Grammer Purchaser, Inc. – Revolver | 9/30/2024 | 1,050 |
| Great Expressions Dental Center PC – Revolver | 9/28/2022 | 215 |
| Green Street Parent, LLC – Revolver | 8/27/2025 | 2,419 |
| GSP Holdings, LLC – Revolver | 11/6/2025 | 2,947 |
| JHCC Holdings, LLC – Revolver | 9/9/2025 | 1,939 |
| Kellstrom Commercial Aerospace, Inc. – Revolver | 7/1/2025 | 3,092 |
| Mach Acquisition R/C – Revolver | 10/18/2026 | 10,043 |
| Margaux Acquisition Inc. – Revolver | 12/19/2024 | 2,872 |
| Margaux UK Finance Limited – Revolver | 12/19/2024 | 675 |
| masLabor Revolver – Revolver | 7/1/2027 | 1,034 |
| MRHT Acquisition Facility – First Lien Senior Secured Loan | 7/26/2028 | 569 |
| MRI Software LLC – Revolver | 2/10/2026 | 1,782 |
| MZR Buyer, LLC – Revolver | 12/22/2026 | 5,210 |
| New Look (Delaware) Corporation – Delayed Draw | 5/26/2028 | 2,005 |
| New Look Vision Group – Delayed Draw | 5/26/2028 | 3,803 |
| New Look Vision Group – Revolver | 5/26/2026 | 1,700 |
| Omni Intermediate DD T/L 2 – First Lien Senior Secured Loan | 11/30/2027 | 870 |
| Omni Intermediate R/C – Revolver | 11/30/2026 | 549 |
| Opus2 – Delayed Draw | 5/5/2028 | 7,382 |
| Paisley Bidco Limited – Delayed Draw | 11/24/2028 | 8,624 |
| Parcel2Go Acquisition Facility – Subordinated Debt | 7/17/2028 | 3,731 |
| Refine Intermediate, Inc. – Revolver | 9/3/2026 | 5,340 |
| Revalize, Inc. – Delayed Draw | 4/15/2027 | 13,395 |
| Revalize, Inc. – Revolver | 4/15/2027 | 1,340 |
| RoC Opco LLC – Revolver | 2/25/2025 | 10,241 |
| Service Master Revolving Loan – Revolver | 8/16/2027 | 3,240 |
| Smartronix RC – Revolver | 11/23/2028 | 6,321 |
| Solaray, LLC – Revolver | 9/9/2022 | 11,844 |
| SunMed Group Holdings, LLC – Revolver | 6/16/2027 | 1,032 |
| Swoogo LLC – Revolver | 12/9/2026 | 1,243 |
| TEI Holdings Inc. – Revolver | 12/23/2025 | 4,070 |
| TGI Sport Bidco Pty Ltd – Revolver | 4/30/2027 | 3,026 |
| Tidel Engineering, L.P. – Revolver | 3/1/2023 | 4,250 |
| TLC Purchaser, Inc. – Delayed Draw | 10/10/2025 | 7,119 |
| TLC Purchaser, Inc. – Revolver | 10/13/2025 | 2,492 |
| V Global Holdings LLC – Revolver | 12/22/2025 | 5,835 |
| Ventiv Holdco, Inc. – Revolver | 9/3/2025 | 3,407 |
| WCI Gigawatt Purchaser DD T/L – Delayed Draw | 11/19/2027 | 1,646 |
| WCI Gigawatt Purchaser R/C – Revolver | 11/19/2027 | 3,218 |
| WCI-HSG Purchaser, Inc. – Revolver | 2/24/2025 | 1,478 |
| Whitcraft LLC – Revolver | 4/3/2023 | 1,812 |
| World Insurance – Revolver | 4/1/2026 | 861 |
| WSP Initial Term Loan – First Lien Senior Secured Loan | 4/27/2023 | 1,797 |
| WSP Revolving Loan – Revolver | 4/27/2027 | 402 |
| WU Holdco, Inc. – First Lien Senior Secured Loan | 3/26/2026 | 1,708 |
| WU Holdco, Inc. – Revolver | 3/26/2025 | 3,944 |
| YLG Holdings, Inc. – Revolver | 10/31/2025 | 8,545 |
| Total First Lien Senior Secured Loans |  | $234,031 |

(1) Commitments are generally subject to borrowers meeting certain criteria such as compliance with covenants and certain operational metrics. These amounts may remain outstanding until the commitment period of an applicable loan expires, which may be shorter than its maturity.

(2) Unfunded commitments denominated in currencies other than U.S. dollars have been converted to U.S. dollars using the applicable foreign currency exchange rate as of December 31, 2021.

109

### Significant Accounting Estimates and Critical Accounting Policies

### Basis of Presentation

The Company’s unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). The Company’s unaudited consolidated financial statements and related financial information have been prepared pursuant to the requirements for reporting on Form 10-Q and Articles 1, 6, 10 and 12 of Regulation S-X. These consolidated financial statements reflect adjustments that in the opinion of the Company are necessary for the fair statement of the financial position and results of operations for the periods presented herein and are not necessarily indicative of the full fiscal year. We have determined we meet the definition of an investment company and follow the accounting and reporting guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946 — Financial Services — Investment Companies (“ASC 946”). Our financial currency is U.S. dollars and these consolidated financial statements have been prepared in that currency.

### Use of Estimates

The preparation of the consolidated financial statements in conformity with US GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates and such differences could be material.

### Revenue Recognition

We record our investment transactions on a trade date basis. We record realized gains and losses based on the specific identification method. We record interest income, adjusted for amortization of premium and accretion of discount, on an accrual basis. Discount and premium to par value on investments acquired are accreted and amortized, respectively, into interest income over the life of the respective investment using the effective interest method. Loan origination fees, original issue discount and market discount or premium are capitalized and amortized into or against interest income using the effective interest method or straight-line method, as applicable. We record any prepayment premiums, unamortized upfront loan origination fees and unamortized discounts received upon prepayment of a loan or debt security as interest income.

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

Certain investments may have contractual PIK interest or dividends. PIK represents accrued interest or accumulated dividends that are added to the loan principal of the investment on the respective interest or dividend payment dates rather than being paid in cash and generally becomes due at maturity or upon being called by the issuer. We record PIK as interest or dividend income, as applicable. If at any point we believe PIK may not be realized, we place the investment generating PIK on non-accrual status. When a PIK investment is placed on non-accrual status, the accrued, uncapitalized interest or dividends are generally reversed through interest or dividend income, as applicable.

Certain structuring fees and amendment fees are recorded as other income when earned. We record administrative agent fees received as other income when the services are rendered.

### Valuation of Portfolio Investments

Investments for which market quotations are readily available are typically valued at such market quotations. Market quotations are obtained from an independent pricing service, where available. If we cannot obtain a price from an independent pricing service or if the independent pricing service is not deemed to be representative with the market, we value certain investments held by us on the basis of prices provided by principal market makers. Generally investments marked in this manner will be marked at the mean of the bid and ask of the independent broker quotes obtained, in some cases, primarily illiquid securities, multiple quotes may not be available and the mid of the bid/ask from one broker will be used. To validate market quotations, we utilize a number of factors to determine if the quotations are representative of fair value, including the source and number of quotations. Debt and equity securities that are not publicly traded or whose market prices are not readily available are valued at fair value, subject at all times to the oversight and approval of the Board, based on the input of our Advisor, our Audit Committee and one or more independent third party valuation firms engaged by our Board.

With respect to unquoted securities, we value each investment considering, among other measures, discounted cash flow models, comparisons of financial ratios of peer companies that are public and other factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we use the pricing indicated by the external event to corroborate and/or assist us in our 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 our investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.

With respect to investments for which market quotations are not readily available, the Advisor will undertake a multi-step valuation process, which includes among other things, the below:

- Our quarterly valuation process begins with each portfolio company or investment being initially valued by the investment professionals of our Advisor responsible for the portfolio investment or by an independent valuation firm;
- Preliminary valuation conclusions are then documented and discussed with our senior management and our Advisor. Agreed upon valuation recommendations are presented to our Audit Committee;
- Our Audit Committee of our Board reviews the valuations presented and recommends values for each of the investments to our Board;
- At least once annually, the valuation for each portfolio investment constituting a material portion of the Company’s portfolio will be reviewed by an independent valuation firm; and
- Our Board discusses valuations and determines the fair value of each investment in good faith based upon, among other things, the input of our Advisor, independent valuation firms, where applicable, and our Audit Committee.

In following this approach, the types of factors that are taken into account in the fair value pricing of investments include, as relevant, but are not limited to: comparison to publicly traded securities, including factors such as yield, maturity and measures of credit quality; the enterprise value of a portfolio company; the nature and realizable value of any collateral; the portfolio companies ability to make payments and its earnings and discounted cash flows; and the markets in which the portfolio company does business. In cases where an independent valuation firm provides fair valuations for investments, the independent valuation firm provides a fair valuation report, a description of the methodology used to determine the fair value and their analysis and calculations to support their conclusion.

### Recent Accounting Pronouncements

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848),” which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), which expanded the scope of Topic 848 to include derivative instruments impacted by discounting transition. ASU 2020-04 and ASU 2021-01 are effective for all entities through December 31, 2022. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2022, except for hedging transactions as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The Company is currently evaluating the impact of the adoption of ASU 2020-04 and 2021-01 on its consolidated financial statements.

### Contractual Obligations

We have entered into the Amended Advisory Agreement with our Advisor (which supersedes the Prior Investment Advisory Agreement dated November 14, 2018 we had previously entered into). Our Advisor has agreed to serve as our investment adviser in accordance with the terms of the Amended Advisory Agreement. Under the Amended Advisory Agreement, we have agreed to pay an annual base management fee as well as an incentive fee based on our investment performance.

On November 28, 2018, our Board, including a majority of our Independent Directors, approved the Amended Advisory Agreement. On February 1, 2019 the Company’s stockholders approved the Amended Advisory Agreement. Pursuant to this Agreement, effective February 1, 2019, the base management fee of 1.5% (0.375% per quarter) of the average value of the Company’s gross assets (excluding cash and cash equivalents, but including assets purchased with borrowed amounts) will continue to apply to assets held at an asset coverage ratio of 200%, but a lower base management fee of 1.0% (0.25% per quarter) of the average value of the Company’s gross assets (excluding cash and cash equivalents, but including assets purchased with borrowed amounts) will apply to any amount of assets attributable to leverage decreasing the Company’s asset coverage ratio below 200%. The Amended Advisory Agreement incorporates (i) a three-year lookback provision and (ii) a cap on quarterly income incentive fee payments based on net realized or unrealized capital loss, if any, during the applicable three-year lookback period.

We have entered into an Administration Agreement with the Administrator pursuant to which the Administrator will furnish us with administrative services necessary to conduct our day-to-day operations. We reimburse the Administrator for its costs and expenses and our allocable portion of overhead incurred by it in performing its obligations under the Administration Agreement, including certain compensation paid to or compensatory distributions received by our officers (including our Chief Compliance Officer and Chief Financial Officer) and any of their respective staff who provide services to us, operations staff who provide services to us, and internal audit staff, if any, to the extent internal audit performs a role in our Sarbanes-Oxley internal control assessment.

If any of our contractual obligations discussed above are terminated, our costs may increase under any new agreements that we enter into as replacements. We would also likely incur expenses in locating alternative parties to provide the services we expect to receive under our Amended Advisory Agreement and Administration Agreement.

The following table shows the contractual maturities of our debt obligations as of March 31, 2022 (dollars in thousands):

|  | Payments Due by Period Total | Less than 1 year | 1 — 3 years | 3 — 5 years | More than 5 years |
| --- | ---: | ---: | ---: | ---: | ---: |
| 2019-1 Debt | $352,500 | $— | $— | $— | $352,500 |
| 2023 Notes | 112,500 | — | 112,500 | — | — |
| March 2026 Notes | 300,000 | — | — | 300,000 | — |
| October 2026 Notes | 300,000 | — | — | 300,000 | — |
| Sumitomo Credit Facility | 39,000 | — | — | 39,000 | — |
| Total Debt Obligations | $1,104,000 | $— | $112,500 | $639,000 | $352,500 |

### Subsequent Events

The Company’s management has evaluated the events and transactions that have occurred through May 5, 2022, the issuance date of the consolidated financial statements, and noted no items requiring disclosure in this Form 10-Q or adjustment of the consolidated financial statements.

## Market risk

As filed, 2,110 characters.

We are subject to financial market risks, including changes in interest rates. We will generally invest in illiquid loans and securities including debt and equity securities of middle-market companies. Because we expect that there will not be a readily available market for many of the investments in our portfolio, we expect to value many of our portfolio investments at fair value as determined in good faith by the Board using a documented valuation policy and a consistently applied valuation process. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.

Assuming that the statement of financial condition as of March 31, 2022 were to remain constant and that we took no actions to alter our existing interest rate sensitivity, the following table shows the annualized impact of hypothetical base rate changes in interest rates (dollars in thousands):

| Change in Interest Rates | Increase (Decrease) in Interest Income | Increase (Decrease) in Interest Expense | Net Increase (Decrease) in Net Investment Income |
| --- | ---: | ---: | ---: |
| Down 25 basis points | $(1,233) | $(979) | $(254) |
| Up 100 basis points | 15,776 | 3,915 | 11,861 |
| Up 200 basis points | 34,285 | 7,830 | 26,455 |
| Up 300 basis points | 52,871 | 11,745 | 41,126 |

From time to time, we may make investments that are denominated in a foreign currency. These investments are translated into U.S. dollars at the balance sheet date, exposing us to movements in foreign exchange rates. We may employ hedging techniques to minimize these risks, but we cannot assure you that such strategies will be effective or without risk to us. We may seek to utilize instruments such as, but not limited to, forward contracts to seek to hedge against fluctuations in the relative values of our portfolio positions from changes in currency exchange rates.

## Controls and procedures

As filed, 1,818 characters.

### Evaluation of Disclosure Controls and Procedures

As of March 31, 2022 (the end of the period covered by this report), our management has carried out an evaluation, under the supervision of and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15 and 15d-15(e) under the Exchange Act). Based on that evaluation our Chief Executive Officer and Chief Financial Officer have concluded that our current disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act 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 Chief Executive Officer and Chief Financial Officer as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

### Changes in Internal Controls Over Financial Reporting

There have been no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that occurred during our most recently completed fiscal quarter ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 1,578 characters.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which could materially affect our business, financial condition and/or operating results. The risks described in our Annual Report on Form 10-K are not the only risks we face. Additional risks and uncertainties are not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. During the three months ended March 31, 2022, there have been no material changes from the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2021.

### Risks Related to Invastion of Ukraine

On February 24, 2022, Russia launched a full-scaled military invasion of Ukraine. In response, countries worldwide, including the United States, have imposed sanctions against Russia on certain businesses and individuals, including, but not limited to, those in the banking, import and export sectors. This invasion has led, is currently leading, and for an unknown period of time will continue to lead to disruptions in local, regional, national, and global markets and economies affected thereby. These disruptions caused by the invasion have included, and may continue to include, political, social, and economic disruptions and uncertainties that may affect our business operations or the business operations of our portfolio companies.

Filed May 5, 2022.
Source: SEC EDGAR, the filing index for accession 0001104659-22-056502. Last ingested by Listed: Nov 10, 2026, 04:19 ET. No prices; not investment advice.