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Section 1: 10-Q (10-Q)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

ý      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2017
OR
o         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____         
Commission File No. 814-00663 
ARES CAPITAL CORPORATION
(Exact name of Registrant as specified in its charter) 
Maryland
 
33-1089684
(State or other jurisdiction of
 
(I.R.S. Employer
incorporation or organization)
 
Identification Number)
245 Park Avenue, 44th Floor, New York, NY 10167
(Address of principal executive office)   (Zip Code)
(212) 750-7300
(Registrant’s telephone number, including area code)
____________________________________________________________________
N/A
(Former name, former address and former fiscal year, if changed since last report)
_____________________________________________________________________

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one): 
Large accelerated filer x
 
Accelerated filer o
Non-accelerated filer o
 
Smaller reporting company o
(Do not check if a smaller reporting company)
 
 
Emerging growth company o
 
 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  No ý
  
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class
 
Outstanding at July 26, 2017
Common stock, $0.001 par value
 
426,299,165





ARES CAPITAL CORPORATION
 
INDEX
 
Part I.
Financial Information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 





ARES CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in millions, except per share data)

 
As of
 
June 30, 2017
 
December 31, 2016
 
(unaudited)
 
 

ASSETS
 
 
 
Investments at fair value
 

 
 

Non-controlled/non-affiliate company investments
$
7,756

 
$
5,940

Non-controlled affiliate company investments
212

 
185

Controlled affiliate company investments
3,530

 
2,695

Total investments at fair value (amortized cost of $11,735 and $9,034, respectively)
11,498

 
8,820

Cash and cash equivalents
536

 
223

Interest receivable
110

 
112

Receivable for open trades
33

 
29

Other assets
151

 
61

Total assets
$
12,328

 
$
9,245

LIABILITIES


 
 
Debt
$
4,838

 
$
3,874

Base management fees payable
44

 
34

Income based fees payable
20

 
32

Capital gains incentive fees payable
63

 
38

Accounts payable and other liabilities
194

 
58

Interest and facility fees payable
53

 
44

Payable for open trades
65

 

Total liabilities
5,277

 
4,080

Commitments and contingencies (Note 7)
 
 
 
STOCKHOLDERS' EQUITY
 
 
 
Common stock, par value $0.001 per share, 500 common shares authorized; 426 and 314 common shares issued and outstanding, respectively

 

Capital in excess of par value
7,206

 
5,292

Accumulated undistributed (overdistributed) net investment income
(69
)
 
37

Accumulated net realized gains on investments, foreign currency transactions, extinguishment of debt and other assets
165

 
57

Net unrealized losses on investments, foreign currency and other transactions
(251
)
 
(221
)
Total stockholders' equity
7,051

 
5,165

Total liabilities and stockholders' equity
$
12,328

 
$
9,245

NET ASSETS PER SHARE
$
16.54

 
$
16.45



See accompanying notes to consolidated financial statements.


3



ARES CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in millions, except per share data)
(unaudited)
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
INVESTMENT INCOME:
 

 
 

 
 
 
 
From non-controlled/non-affiliate company investments:
 

 
 

 
 
 
 
Interest income from investments
$
171

 
$
137

 
$
339

 
$
277

Capital structuring service fees
24

 
12

 
36

 
27

Dividend income
6

 
9

 
12

 
17

Other income
5

 
4

 
9

 
7

Total investment income from non-controlled/non-affiliate company investments
206

 
162

 
396

 
328

From non-controlled affiliate company investments:
 

 
 

 
 
 
 

Interest income from investments
4

 
4

 
8

 
8

Total investment income from non-controlled affiliate company investments
4

 
4

 
8

 
8

From controlled affiliate company investments:
 

 
 

 
 
 
 

Interest income from investments
56

 
62

 
115

 
126

Capital structuring service fees
5

 
1

 
5

 
1

Dividend income
10

 
10

 
28

 
20

Management and other fees
2

 
5

 
5

 
9

Other income
1

 
1

 
2

 
1

Total investment income from controlled affiliate company investments
74

 
79

 
155

 
157

Total investment income
284

 
245

 
559

 
493

EXPENSES:
 

 
 

 
 
 
 

Interest and credit facility fees
55

 
45

 
110

 
96

Base management fees
44

 
34

 
83

 
69

Income based fees
30

 
29

 
62

 
58

Capital gain incentive fees
10

 
10

 
26

 
14

Administrative fees
3

 
4

 
6

 
7

Professional fees and other costs related to the American Capital Acquisition
12

 
7

 
38

 
8

Other general and administrative
9

 
7

 
17

 
14

Total expenses
163

 
136

 
342

 
266

Waiver of income based fees
(10
)
 

 
(10
)
 

Total expenses, net of waiver of income based fees
153

 
136

 
332

 
266

NET INVESTMENT INCOME BEFORE INCOME TAXES
131

 
109

 
227

 
227

Income tax expense, including excise tax
7

 
4

 
9

 
9

NET INVESTMENT INCOME
124

 
105

 
218

 
218

REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS, FOREIGN CURRENCY AND OTHER TRANSACTIONS:
 

 
 

 
 
 
 

Net realized gains (losses):
 

 
 

 
 
 
 
Non-controlled/non-affiliate company investments
67

 
33

 
73

 
52

Non-controlled affiliate company investments

 
1

 

 
1

Controlled affiliate company investments
45

 

 
52

 
6

Foreign currency and other transactions
(2
)
 
(3
)
 
(13
)
 
(1
)
Net realized gains
110

 
31

 
112

 
58

Net unrealized gains (losses):
 

 
 

 
 
 
 

Non-controlled/non-affiliate company investments
(85
)
 
(13
)
 
(99
)
 
(34
)
Non-controlled affiliate company investments
(2
)
 
12

 
(1
)
 
22

Controlled affiliate company investments
43

 
19

 
74

 
25

Foreign currency and other transactions
(8
)
 
3

 
(4
)
 

Net unrealized gains (losses)
(52
)
 
21

 
(30
)
 
13

Net realized and unrealized gains from investments, foreign currency and other transactions
58

 
52

 
82

 
71

REALIZED LOSSES ON EXTINGUISHMENT OF DEBT
(4
)
 

 
(4
)
 

NET INCREASE IN STOCKHOLDERS' EQUITY RESULTING FROM OPERATIONS
$
178

 
$
157

 
$
296

 
$
289

BASIC AND DILUTED EARNINGS PER COMMON SHARE (see Note 10)
$
0.42

 
$
0.50

 
$
0.70

 
$
0.92

WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING (see Note 10)
426

 
314

 
424

 
314


See accompanying notes to consolidated financial statements.

4

ARES CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of June 30, 2017
(dollar amounts in millions)
(unaudited)


Company(1)
 
Business Description
 
Investment
 
Interest(6)(12)
 
Acquisition
Date
 
Amortized
Cost
 
Fair 
Value
 
Percentage
of Net
Assets
Investment Funds and Vehicles
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ACAS CLO 2007-1, Ltd. (8)(9)(10)
 
Investment vehicle
 
Subordinated notes ($25.9 par due 4/2021)
 
 
 
1/3/2017
 
$

 
$

 
 
ACAS Equity Holdings Corporation (8)(10)
 
Investment company
 
Common stock (589 shares)
 
 
 
1/3/2017
 
0.5

 
0.4

 
 
Ares IIIR/IVR CLO Ltd. (8)(9)(10)
 
Investment vehicle
 
Subordinated notes ($20.0 par due 4/2021)
 
 
 
1/3/2017
 
0.7

 

 
 
Babson CLO Ltd. 2006-II (9)(10)
 
Investment vehicle
 
Subordinated notes ($15.0 par due 10/2020)
 
 
 
1/3/2017
 

 

 
 
Babson CLO Ltd. 2013-II (9)(10)
 
Investment vehicle
 
Subordinated notes ($5.0 par due 1/2025)
 
12.00%
 
1/3/2017
 
3.0

 
2.8

 
 
Babson CLO Ltd. 2014-I (9)(10)
 
Investment vehicle
 
Subordinated notes ($8.5 par due 7/2025)
 
11.80%
 
1/3/2017
 
4.6

 
5.0

 
 
Babson CLO Ltd. 2014-II (9)(10)
 
Investment vehicle
 
Subordinated notes ($25.0 par due 10/2026)
 
18.00%
 
1/3/2017
 
12.5

 
13.7

 
 
Blue Wolf Capital Fund II, L.P. (9)(10)
 
Investment partnership
 
Limited partnership interest (8.50% interest)
 
 
 
1/3/2017
 
7.1

 
7.4

 
 
Carlyle Global Market Strategies CLO 2015-3, Ltd. (9)(10)
 
Investment vehicle
 
Subordinated notes ($5.0 par due 7/2025)
 
8.50%
 
1/3/2017
 
2.7

 
2.7

 
 
Carlyle Global Market Strategies CLO 2013-3, Ltd. (9)(10)
 
Investment vehicle
 
Subordinated notes ($24.6 par due 7/2028)
 
10.80%
 
1/3/2017
 
19.5

 
21.7

 
 
Cent CDO 12 Limited (9)(10)
 
Investment vehicle
 
Subordinated notes ($26.4 par due 11/2020)
 
10.00%
 
1/3/2017
 
18.4

 
17.7

 
 
Cent CLO 22 Limited (9)(10)
 
Investment vehicle
 
Subordinated notes ($45.4 par due 11/2026)
 
11.80%
 
1/3/2017
 
24.6

 
21.1

 
 
Cent CLO 24 Limited (9)(10)
 
Investment vehicle
 
Subordinated notes ($28.0 par due 10/2026)
 
8.50%
 
1/3/2017
 
21.9

 
21.7

 
 
Centurion CDO 8 Limited (9)(10)
 
Investment vehicle
 
Subordinated notes ($5.0 par due 3/2019)
 
 
 
1/3/2017
 

 

 
 
CoLTs 2005-1 Ltd. (8)(9)(10)
 
Investment vehicle
 
Preferred shares (360 shares)
 
 
 
1/3/2017
 

 

 
 
CoLTs 2005-2 Ltd. (8)(9)(10)
 
Investment vehicle
 
Preferred shares (34,170,000 shares)
 
 
 
1/3/2017
 

 

 
 
CREST Exeter Street Solar 2004-1 (9)(10)
 
Investment vehicle
 
Preferred shares (3,500,000 shares)
 
 
 
1/3/2017
 

 

 
 
Eaton Vance CDO X plc (9)(10)
 
Investment vehicle
 
Subordinated notes ($15.0 par due 2/2027)
 
10.00%
 
1/3/2017
 
4.3

 
5.5

 
 
European Capital UK SME Debt LP (8)(9)(10)(23)
 
Investment partnership
 
Limited partnership interest (45% interest)
 
 
 
1/3/2017
 
25.6

 
27.3

 
 
Flagship CLO V (9)(10)
 
Investment vehicle
 
Subordinated securities (15,000 shares)
 
 
 
1/3/2017
 

 

 
 
GoldenTree Loan Opportunities VII, Limited (9)(10)
 
Investment vehicle
 
Subordinated notes ($35.3 par due 4/2025)
 
9.00%
 
1/3/2017
 
20.4

 
21.0

 
 
Halcyon Loan Advisors Funding 2014-1 Ltd. (9)(10)
 
Investment vehicle
 
Subordinated notes ($1.3 par due 4/2026)
 
13.80%
 
1/3/2017
 
0.5

 
0.4

 
 
Halcyon Loan Advisors Funding 2015-2, Ltd. (9)(10)
 
Investment vehicle
 
Subordinated notes ($21.7 par due 7/2027)
 
13.50%
 
1/3/2017
 
14.8

 
13.0

 
 
HCI Equity, LLC (8)(9)(10)
 
Investment company
 
Member interest (100.00% interest)
 
 
 
4/1/2010
 

 
0.1

 
 
Herbert Park B.V. (9)(10)
 
Investment vehicle
 
Subordinated notes ($22.5 par due 10/2026)
 
 
 
1/3/2017
 
2.7

 

 
 
Imperial Capital Private Opportunities, LP (10)
 
Investment partnership
 
Limited partnership interest (80.00% interest)
 
 
 
5/10/2007
 
3.2

 
15.6

(2)
 
LightPoint CLO VII, Ltd. (9)(10)
 
Investment vehicle
 
Subordinated notes ($9.0 par due 5/2021)
 
 
 
1/3/2017
 

 

 
 
Montgomery Lane, LLC and Montgomery Lane, Ltd. (8)(9)(10)
 
Investment company
 
Common stock (100 shares)
 
 
 
1/3/2017
 

 
0.6

 
 
 
 
 
 
Common stock (50,000 shares)
 
 
 
1/3/2017
 

 

 
 
 
 
 
 
 
 
 
 
 
 

 
0.6

 
 
NYLIM Flatiron CLO 2006-1 LTD. (9)(10)
 
Investment vehicle
 
Subordinated securities (10,000 shares)
 
 
 
1/3/2017
 

 

 
 
Octagon Investment Partners XVIII, Ltd. (9)(10)
 
Investment vehicle
 
Subordinated notes ($16.4 par due 12/2024)
 
13.30%
 
1/3/2017
 
7.2

 
7.1

 
 
Octagon Investment Partners XIX, Ltd. (9)(10)
 
Investment vehicle
 
Subordinated notes ($25.0 par due 4/2026)
 
11.50%
 
1/3/2017
 
11.5

 
12.0

 
 
OHA Credit Partners XI, Ltd. (9)(10)
 
Investment vehicle
 
Subordinated notes ($17.8 par due 10/2028)
 
9.50%
 
1/3/2017
 
14.5

 
13.8

 
 

5



As of June 30, 2017
(dollar amounts in millions)
(unaudited)

Company(1)
 
Business Description
 
Investment
 
Interest(6)(12)
 
Acquisition
Date
 
Amortized
Cost
 
Fair 
Value
 
Percentage
of Net
Assets
Partnership Capital Growth Fund I, L.P. (10)
 
Investment partnership
 
Limited partnership interest (25.00% interest)
 
 
 
6/16/2006
 

 
0.1

(2)
 
Partnership Capital Growth Investors III, L.P. (10)(23)
 
Investment partnership
 
Limited partnership interest (2.50% interest)
 
 
 
10/5/2011
 
2.5

 
3.5

(2)
 
PCG-Ares Sidecar Investment II, L.P. (10)(23)
 
Investment partnership
 
Limited partnership interest (100.00% interest)
 
 
 
10/31/2014
 
7.5

 
12.8

(2)
 
PCG-Ares Sidecar Investment, L.P. (10)(23)
 
Investment partnership
 
Limited partnership interest (100.00% interest)
 
 
 
5/22/2014
 
3.9

 
4.6

(2)
 
Piper Jaffray Merchant Banking Fund I, L.P. (10)(23)
 
Investment partnership
 
Limited partnership interest (2.00% interest)
 
 
 
8/16/2012
 
1.6

 
1.6

 
 
Qualium Investissement (9)(10)
 
Investment partnership
 
Class A common stock (99,000 shares)
 
 
 
1/3/2017
 
7.3

 
7.5

 
 
 
 
 
 
Class B common stock (100,000 shares)
 
 
 
1/3/2017
 
0.1

 
0.1

 
 
 
 
 
 
Class C common stock (48,939 shares)
 
 
 
1/3/2017
 
0.1

 
0.1

 
 
 
 
 
 
 
 
 
 
 
 
7.5

 
7.7

 
 
Sapphire Valley CDO I, Ltd. (9)(10)
 
Investment vehicle
 
Subordinated notes ($14.0 par due 12/2022)
 
 
 
1/3/2017
 

 

 
 
Senior Direct Lending Program, LLC (8)(10)(25)
 
Co-investment vehicle
 
Subordinated certificates ($393.9 par due 12/2036)
 
9.15% (Libor + 8.00%/Q)(19)
 
7/27/2016
 
393.9

 
393.9

 
 
 
 
 
 
Member interest (87.50% interest)
 
 
 
7/27/2016
 

 

 
 
 
 
 
 
 
 
 
 
 
 
393.9

 
393.9

 
 
Senior Secured Loan Fund LLC (8)(11)(24)
 
Co-investment vehicle
 
Subordinated certificates ($2,004.0 par due 12/2024)
 
5.75% (18)
 
10/30/2009
 
1,938.4

 
1,920.5

 
 
 
 
 
 
Member interest (87.50% interest)
 
 
 
10/30/2009
 

 

 
 
 
 
 
 
 
 
 
 
 
 
1,938.4

 
1,920.5

 
 
Vitesse CLO, Ltd. (9)(10)
 
Investment vehicle
 
Preferred shares (20,000,000 shares)
 
 
 
1/3/2017
 

 

 
 
Voya CLO 2014-4, Ltd. (9)(10)
 
Investment vehicle
 
Subordinated notes ($26.7 par due 10/2026)
 
10.00%
 
1/3/2017
 
17.6

 
17.6

 
 
VSC Investors LLC (10)
 
Investment company
 
Membership interest (1.95% interest)
 
 
 
1/24/2008
 
0.3

 
1.3

(2)
 
 
 
 
 
 
 
 
 
 
 
2,593.4

 
2,594.2

 
36.79%

Business Services
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accruent, LLC and Athena Parent, Inc. (22)
 
Real estate and facilities management software provider
 
Second lien senior secured loan ($53.0 par due 11/2022)
 
10.93% (Libor + 9.75%/Q)
 
9/19/2016
 
53.0

 
53.0

(2)(17)
 
 
 
 
 
Series A preferred stock (778 shares)
 
 
 
9/19/2016
 
0.8

 
0.6

(2)
 
 
 
 
 
Common stock (3,000 shares)
 
 
 
5/16/2016
 
3.0

 
2.3

(2)
 
 
 
 
 
 
 
 
 
 
 
56.8

 
55.9

 
 
Achilles Acquisition LLC (22)
 
Benefits broker and outsourced workflow automation platform provider for brokers
 
First lien senior secured loan ($10.3 par due 6/2023)
 
7.22% (Libor + 6.00%/Q)
 
6/6/2017
 
10.3

 
10.2

(2)(17)
 
Acrisure, LLC, Acrisure Investors FO, LLC and Acrisure Investors SO, LLC (22)
 
Retail insurance advisor and brokerage
 
Second lien senior secured loan ($4.4 par due 11/2024)
 
10.54% (Libor + 9.25%/Q)
 
5/10/2017
 
4.4

 
4.4

(2)(17)
 
 
 
 
 
Second lien senior secured loan ($9.7 par due 11/2024)
 
10.55% (Libor + 9.25%/Q)
 
11/22/2016
 
9.7

 
9.7

(2)(17)
 
 
 
 
 
Second lien senior secured loan ($88.6 par due 11/2024)
 
10.55% (Libor + 9.25%/Q)
 
11/22/2016
 
88.6

 
88.6

(2)(17)
 
 
 
 
 
Second lien senior secured loan ($15.0 par due 11/2024)
 
10.55% (Libor + 9.25%/Q)
 
5/10/2017
 
15.0

 
15.0

(2)(17)
 
 
 
 
 
Membership interests (8,502,697 units)
 
 
 
11/18/2016
 
10.8

 
10.8

(2)
 
 
 
 
 
Membership interests (2,125,674 units)
 
 
 
11/18/2016
 
2.7

 
2.7

(2)
 
 
 
 
 
 
 
 
 
 
 
131.2

 
131.2

 
 
BeyondTrust Software, Inc. (22)
 
Management software solutions provider
 
First lien senior secured loan ($29.4 par due 9/2019)
 
8.00% (Libor + 7.00%/Q)
 
1/3/2017
 
29.1

 
28.6

(3)(17)
 
BluePay Processing, LLC
 
Payment processing solutions provider
 
Second lien senior secured loan ($32.8 par due 8/2022)
 
9.67% (Libor + 8.50%/Q)
 
1/3/2017
 
32.8

 
32.8

(2)(17)
 

6



As of June 30, 2017
(dollar amounts in millions)
(unaudited)

Company(1)
 
Business Description
 
Investment
 
Interest(6)(12)
 
Acquisition
Date
 
Amortized
Cost
 
Fair 
Value
 
Percentage
of Net
Assets
Brandtone Holdings Limited (9)
 
Mobile communications and marketing services provider
 
First lien senior secured loan ($4.7 par due 11/2018)
 
 
 
5/11/2015
 
4.5

 

(2)(16)
 
 
 
 
 
First lien senior secured loan ($3.1 par due 2/2019)
 
 
 
5/11/2015
 
2.9

 

(2)(16)
 
 
 
 
 
Warrant to purchase up to 184,003 units of convertible preferred shares (expires 8/2026)
 
 
 
5/11/2015
 

 

(2)
 
 
 
 
 
 
 
 
 
 
 
7.4

 

 
 
CallMiner, Inc.
 
Provider of cloud-based conversational analytics solutions
 
Second lien senior secured loan ($1.3 par due 5/2018)
 
10.70% (Libor + 9.50%/M)
 
7/23/2014
 
1.3

 
1.3

(2)(17)
 
 
 
 
 
Second lien senior secured loan ($0.8 par due 8/2018)
 
10.70% (Libor + 9.50%/M)
 
7/23/2014
 
0.8

 
0.8

(2)(17)
 
 
 
 
 
Warrant to purchase up to 2,350,636 shares of Series 1 preferred stock (expires 7/2024)
 
 
 
7/23/2014
 

 

(2)
 
 
 
 
 
 
 
 
 
 
 
2.1

 
2.1

 
 
Cast & Crew Payroll, LLC
 
Payroll and accounting services provider to the entertainment industry
 
Second lien senior secured loan ($26.7 par due 8/2023)
 
9.05% (Libor + 7.75%/Q)
 
1/3/2017
 
26.7

 
26.7

(2)(17)
 
Clearwater Analytics, LLC (22)
 
Provider of integrated cloud-based investment portfolio management, accounting, reporting and analytics software
 
First lien senior secured revolving loan ($0.6 par due 9/2022)
 
8.72% (Libor + 7.50%/Q)
 
9/1/2016
 
0.6

 
0.6

(2)(17)
 
CMW Parent LLC (fka Black Arrow, Inc.)
 
Multiplatform media firm
 
Series A units (32 units)
 
 
 
9/11/2015
 

 

(2)
 
Columbo Midco Limited, Columbo Bidco Limited and Columbo Topco Limited (8)(9)
 
Compliance, accounting and tax consulting services provider
 
Preferred stock (34,028,135 shares)
 
 
 
1/3/2017
 
2.3

 
6.3

 
 
 
 
 
 
Preferred stock (17,653,253 shares)
 
 
 
1/3/2017
 
21.6

 
24.3

 
 
 
 
 
 
Preferred stock (3,232,666 shares)
 
 
 
1/3/2017
 
4.0

 
4.4

 
 
 
 
 
 
 
 
 
 
 
 
27.9

 
35.0

 
 
Command Alkon, Incorporated and CA Note Issuer, LLC
 
Software solutions provider to the ready-mix concrete industry
 
Second lien senior secured loan ($10.0 par due 8/2020)
 
9.48% (Libor + 8.25%/Q)
 
9/28/2012
 
10.0

 
10.0

(2)(17)
 
 
 
 
 
Second lien senior secured loan ($11.5 par due 8/2020)
 
9.37% (Libor + 8.25%/Q)
 
9/28/2012
 
11.5

 
11.5

(2)(17)
 
 
 
 
 
Second lien senior secured loan ($26.5 par due 8/2020)
 
9.48% (Libor + 8.25%/Q)
 
9/28/2012
 
26.5

 
26.5

(2)(17)
 
 
 
 
 
Senior subordinated loan ($25.0 par due 8/2021)
 
14.00% PIK
 
8/8/2014
 
25.0

 
25.0

(2)
 
 
 
 
 
 
 
 
 
 
 
73.0

 
73.0

 
 
Compusearch Software Systems, Inc.
 
Provider of enterprise software and services for organizations in the public sector
 
Second lien senior secured loan ($51.0 par due 11/2021)
 
9.93% (Libor + 8.75%/Q)
 
1/3/2017
 
51.0

 
51.0

(2)(17)
 
Compuware Parent, LLC
 
Web and mobile cloud performance testing and monitoring services provider
 
Class A-1 common stock (4,132 units)
 
 
 
12/15/2014
 
2.3

 
1.8

(2)
 
 
 
 
 
Class B-1 common stock (4,132 units)
 
 
 
12/15/2014
 
0.5

 
0.4

(2)
 
 
 
 
 
Class C-1 common stock (4,132 units)
 
 
 
12/15/2014
 
0.3

 
0.2

(2)
 
 
 
 
 
Class A-2 common stock (4,132 units)
 
 
 
12/15/2014
 

 

(2)
 
 
 
 
 
Class B-2 common stock (4,132 units)
 
 
 
12/15/2014
 

 

(2)
 
 
 
 
 
Class C-2 common stock (4,132 units)
 
 
 
12/15/2014
 

 

(2)
 
 
 
 
 
 
 
 
 
 
 
3.1

 
2.4

 
 
Convergint Technologies LLC (22)
 
Integrated services provider for security, fire and life safety
 
Second lien senior secured loan ($11.0 par due 12/2020)
 
9.82% (Libor + 8.50%/Q)
 
1/3/2017
 
11.0

 
11.0

(2)(17)
 

7



As of June 30, 2017
(dollar amounts in millions)
(unaudited)

Company(1)
 
Business Description
 
Investment
 
Interest(6)(12)
 
Acquisition
Date
 
Amortized
Cost
 
Fair 
Value
 
Percentage
of Net
Assets
 
 
 
 
Second lien senior secured loan ($6.0 par due 12/2020)
 
9.91% (Libor + 8.50%/Q)
 
1/3/2017
 
6.0

 
6.0

(2)(17)
 
 
 
 
 
Second lien senior secured loan ($11.0 par due 12/2020)
 
9.92% (Libor + 8.50%/Q)
 
1/3/2017
 
11.0

 
11.0

(2)(17)
 
 
 
 
 
Second lien senior secured loan ($75.0 par due 12/2020)
 
9.43% (Libor + 8.00%/Q)
 
1/3/2017
 
75.0

 
75.0

(2)(17)
 
 
 
 
 
 
 
 
 
 
 
103.0

 
103.0

 
 
Datapipe, Inc.
 
Data center provider
 
Second lien senior secured loan ($29.5 par due 9/2019)
 
9.17% (Libor + 8.00%/Q)
 
1/3/2017
 
28.5

 
28.6

(2)(17)
 
Directworks, Inc. and Co-Exprise Holdings, Inc.
 
Provider of cloud-based software solutions for direct materials sourcing and supplier management for manufacturers
 
First lien senior secured loan ($1.9 par due 4/2018)
 
10.25% (Libor + 9.25%/M)
 
12/19/2014
 
1.9

 
1.7

(2)(17)
 
 
 
 
 
Warrant to purchase up to 1,875,000 shares of Series 1 preferred stock (expires 12/2024)
 
 
 
12/19/2014
 

 

(2)
 
 
 
 
 
 
 
 
 
 
 
1.9

 
1.7

 
 
DTI Holdco, Inc. and OPE DTI Holdings, Inc. (22)
 
Provider of legal process outsourcing and managed services
 
First lien senior secured loan ($4.1 par due 9/2023)
 
6.42% (Libor + 5.25%/Q)
 
9/23/2016
 
4.1

 
4.1

(4)(17)
 
 
 
 
 
Class A common stock (7,500 shares)
 
 
 
8/19/2014
 
7.5

 
6.8

(2)
 
 
 
 
 
Class B common stock (7,500 shares)
 
 
 
8/19/2014
 

 

(2)
 
 
 
 
 
 
 
 
 
 
 
11.6

 
10.9

 
 
Emergency Communications Network, LLC (22)
 
Provider of mission critical emergency mass notification solutions
 
First lien senior secured loan ($61.2 par due 6/2023)
 
7.30% (Libor + 6.25%/Q)
 
6/1/2017
 
60.7

 
60.6

(2)(17)
 
Entertainment Partners, LLC and Entertainment Partners Canada Inc. (22)
 
Provider of entertainment workforce and production management solutions
 
First lien senior secured loan ($7.7 par due 5/2022)
 
6.50% (Libor + 5.50%/Q)
 
5/8/2017
 
7.3

 
7.6

(2)(9)(17)
 
 
 
 
 
First lien senior secured loan ($12.8 par due 5/2023)
 
6.81% (Libor + 5.75%/Q)
 
5/8/2017
 
12.8

 
12.7

(2)(17)
 
 
 
 
 
First lien senior secured loan ($15.2 par due 5/2023)
 
6.81% (Libor + 5.75%/Q)
 
5/8/2017
 
15.2

 
15.1

(3)(17)
 
 
 
 
 
First lien senior secured loan ($14.6 par due 5/2023)
 
6.93% (Libor + 5.75%/Q)
 
5/8/2017
 
14.6

 
14.5

(2)(17)
 
 
 
 
 
First lien senior secured loan ($17.4 par due 5/2023)
 
6.93% (Libor + 5.75%/Q)
 
5/8/2017
 
17.4

 
17.2

(3)(17)
 
 
 
 
 
First lien senior secured loan ($14.6 par due 5/2023)
 
7.19% (Libor + 5.75%/Q)
 
5/8/2017
 
14.6

 
14.5

(2)(17)
 
 
 
 
 
First lien senior secured loan ($17.4 par due 5/2023)
 
7.19% (Libor + 5.75%/Q)
 
5/8/2017
 
17.4

 
17.2

(3)(17)
 
 
 
 
 
 
 
 
 
 
 
99.3

 
98.8

 
 
EN Engineering, L.L.C. (22)
 
National utility services firm providing engineering and consulting services to natural gas, electric power and other energy and industrial end markets
 
First lien senior secured revolving loan
 
-
 
6/30/2015
 

 

(20)
 
Faction Holdings, Inc. and The Faction Group LLC (fka PeakColo Holdings, Inc.) (22)
 
Wholesaler of cloud-based software applications and services
 
First lien senior secured loan ($8.0 par due 1/2021)
 
10.41% (Libor + 9.25%/M)
 
1/6/2017
 
8.0

 
8.0

(2)(17)
 
 
 
 
 
Warrant to purchase up to 5,185 shares of Series A preferred stock (expires 1/2027)
 
 
 
1/6/2017
 

 
0.2

(2)
 
 
 
 
 
Warrant to purchase up to 1,481 shares of Series A preferred stock (expires 12/2025)
 
 
 
12/3/2015
 

 
0.1

(2)
 
 
 
 
 
Warrant to purchase up to 2,037 shares of Series A preferred stock (expires 11/2024)
 
 
 
11/3/2014
 
0.1

 
0.1

(2)
 

8



As of June 30, 2017
(dollar amounts in millions)
(unaudited)

Company(1)
 
Business Description
 
Investment
 
Interest(6)(12)
 
Acquisition
Date
 
Amortized
Cost
 
Fair 
Value
 
Percentage
of Net
Assets
 
 
 
 
 
 
 
 
 
 
8.1

 
8.4

 
 
First Insight, Inc.
 
Software company providing merchandising and pricing solutions to companies worldwide
 
Warrant to purchase up to 122,827 units of Series C preferred stock (expires 3/2024)
 
 
 
3/20/2014
 

 

(2)
 
Flexera Software LLC
 
Provider of software and software applications that manages application usage, compliance and security risk
 
Second lien senior secured loan ($5.0 par due 4/2021)
 
8.30% (Libor + 7.00%/Q)
 
1/3/2017
 
4.8

 
5.0

(2)(17)
 
GTCR Valor Companies, Inc.
 
Public relations software as service provider
 
Second lien senior secured loan ($100.0 par due 6/2024)
 
10.69% (Libor + 9.50%/Q)
 
1/3/2017
 
98.1

 
100.0

(2)(17)
 
IfByPhone Inc.
 
Voice-based marketing automation software provider
 
Warrant to purchase up to 124,300 shares of Series C preferred stock (expires 10/2022)
 
 
 
10/15/2012
 
0.1

 
0.1

(2)
 
Infogix, Inc. and Infogix Parent Corporation
 
Enterprise data analytics and integrity software solutions provider
 
First lien senior secured loan ($54.6 par due 12/2021)
 
7.80% (Libor + 6.50%/Q)
 
1/3/2017
 
54.6

 
54.6

(2)(14)(17)
 
 
 
 
 
First lien senior secured loan ($34.9 par due 12/2021)
 
7.80% (Libor + 6.50%/Q)
 
1/3/2017
 
34.9

 
34.9

(3)(14)(17)
 
 
 
 
 
Series A preferred stock (2,475 shares)
 
 
 
1/3/2017
 
2.5

 
2.8

 
 
 
 
 
 
Common stock (1,297,768 shares)
 
 
 
1/3/2017
 

 
1.7

 
 
 
 
 
 
 
 
 
 
 
 
92.0

 
94.0

 
 
Inmar, Inc.
 
Technology-driven solutions provider for retailers, wholesalers and manufacturers
 
Second lien senior secured loan ($28.3 par due 5/2025)
 
11.25% (Base Rate + 7.00%/Q)
 
4/25/2017
 
27.9

 
27.9

(2)(17)
 
Interactions Corporation
 
Developer of a speech recognition software based customer interaction system
 
Second lien senior secured loan ($5.9 par due 3/2021)
 
9.85% (Libor + 8.60%/M)
 
6/16/2015
 
5.8

 
5.9

(2)(15)(17)
 
 
 
 
 
Second lien senior secured loan ($19.1 par due 3/2021)
 
9.85% (Libor + 8.60%/M)
 
6/16/2015
 
18.9

 
19.2

(5)(15)(17)
 
 
 
 
 
Warrant to purchase up to 68,187 shares of Series G-3 convertible preferred stock (expires 6/2022)
 
 
 
6/16/2015
 
0.3

 
0.3

(2)
 
 
 
 
 
 
 
 
 
 
 
25.0

 
25.4

 
 
InterVision Systems, LLC and InterVision Holdings, LLC
 
Provider of cloud based IT solutions, infrastructure and services
 
First lien senior secured loan ($32.5 par due 5/2022)
 
10.06% (Libor + 8.65%/Q)
 
5/31/2017
 
32.5

 
32.5

(2)(17)
 
 
 
 
 
Class A membership units (1,000 units)
 
 
 
5/31/2017
 
1.0

 
1.0

 
 
 
 
 
 
 
 
 
 
 
 
33.5

 
33.5

 
 
iParadigms Holdings, LLC
 
Anti-plagiarism software provider to the education market
 
Second lien senior secured loan ($39.5 par due 7/2022)
 
8.55% (Libor + 7.25%/Q)
 
1/3/2017
 
38.8

 
38.7

(2)(17)
 
iPipeline, Inc., Internet Pipeline, Inc. and iPipeline Holdings, Inc. (22)
 
Provider of SaaS-based software solutions to the insurance and financial services industry
 
First lien senior secured loan ($6.7 par due 8/2022)
 
7.42% (Libor + 6.25%/Q)
 
6/15/2017
 
6.7

 
6.7

(2)(17)
 
 
 
 
 
First lien senior secured loan ($46.4 par due 8/2022)
 
8.48% (Libor + 7.25%/Q)
 
8/4/2015
 
46.4

 
46.4

(3)(17)
 
 
 
 
 
First lien senior secured loan ($14.7 par due 8/2022)
 
8.48% (Libor + 7.25%/Q)
 
8/4/2015
 
14.7

 
14.7

(4)(17)
 
 
 
 
 
Preferred stock (1,100 shares)
 
 
 
8/4/2015
 
1.1

 
2.9

(2)
 
 
 
 
 
Common stock (668,781 shares)
 
 
 
8/4/2015
 

 

(2)
 
 
 
 
 
 
 
 
 
 
 
68.9

 
70.7

 
 

9



As of June 30, 2017
(dollar amounts in millions)
(unaudited)

Company(1)
 
Business Description
 
Investment
 
Interest(6)(12)
 
Acquisition
Date
 
Amortized
Cost
 
Fair 
Value
 
Percentage
of Net
Assets
IQMS
 
Provider of enterprise resource planning and manufacturing execution software for small and midsized manufacturers
 
First lien senior secured loan ($27.8 par due 3/2022)
 
9.48% (Libor + 8.25%/Q)
 
3/28/2017
 
27.8

 
27.8

(2)(17)
 
 
 
 
 
First lien senior secured loan ($10.0 par due 3/2022)
 
9.48% (Libor + 8.25%/Q)
 
3/28/2017
 
10.0

 
10.0

(4)(17)
 
 
 
 
 
 
 
 
 
 
 
37.8

 
37.8

 
 
Iron Bow Technologies, LLC
 
Provider and value added reseller of information technology products and solutions
 
Second lien senior secured loan ($9.9 par due 2/2021)
 
12.80% (Libor + 11.75%/Q)
 
1/3/2017
 
9.9

 
9.9

(2)(17)
 
IronPlanet, Inc.
 
Online auction platform provider for used heavy equipment
 
Warrant to purchase to up to 133,333 shares of Series C preferred stock (expires 9/2023)
 
 
 
9/23/2013
 
0.2

 
0.2

(2)
 
Itel Laboratories, Inc. (22)
 
Data services provider for building materials to property insurance industry
 
Preferred units (1,798,391 units)
 
 
 
6/29/2012
 
1.0

 
1.6

(2)
 
LLSC Holdings Corporation (dba Lawrence Merchandising Services) (8)
 
Marketing services provider
 
Series A preferred stock (9,000 shares)
 
 
 
1/3/2017
 
19.2

 
20.6

 
 
 
 
 
 
Common stock (1,000 shares)
 
 
 
1/3/2017
 

 

 
 
 
 
 
 
Warrant to purchase up to 675 shares of common stock (expires 9/2017)
 
 
 
1/3/2017
 

 

 
 
 
 
 
 
 
 
 
 
 
 
19.2

 
20.6

 
 
Miles 33 (Finance) Limited (8)(9)
 
Software provider to the regional media industry and magazines
 
First lien senior secured loan ($1.6 par due 9/2018)
 
6.75% (Libor + 6.50%/Q)
 
1/3/2017
 
1.5

 
1.6

 
 
 
 
 
 
First lien senior secured loan ($3.9 par due 9/2018)
 
6.75% (Libor + 6.50%/Q)
 
1/3/2017
 
3.7

 
3.9

 
 
 
 
 
 
Senior subordinated loan ($16.3 par due 9/2021)
 
4.75% (Libor + 4.50%/Q)
 
1/3/2017
 
9.5

 
16.0

 
 
 
 
 
 
Preferred stock (19,500,000 shares)
 
 
 
1/3/2017
 

 

 
 
 
 
 
 
Preferred stock (900,000 shares)
 
 
 
1/3/2017
 

 

 
 
 
 
 
 
Common stock (600,000 shares)
 
 
 
1/3/2017
 

 

 
 
 
 
 
 
 
 
 
 
 
 
14.7

 
21.5

 
 
Ministry Brands, LLC and MB Parent HoldCo, L.P. (22)
 
Software and payment services provider to faith-based institutions
 
First lien senior secured loan ($6.5 par due 12/2022)
 
6.23% (Libor + 5.00%/Q)
 
4/6/2017
 
6.5

 
6.5

(2)(17)
 
 
 
 
 
First lien senior secured loan ($16.7 par due 12/2022)
 
6.23% (Libor + 5.00%/Q)
 
4/6/2017
 
16.6

 
16.7

(2)(17)
 
 
 
 
 
Second lien senior secured loan ($2.9 par due 6/2023)
 
10.48% (Libor + 9.25%/Q)
 
4/6/2017
 
2.9

 
2.9

(2)(17)
 
 
 
 
 
Second lien senior secured loan ($9.2 par due 6/2023)
 
10.48% (Libor + 9.25%/Q)
 
4/6/2017
 
9.2

 
9.2

(2)(17)
 
 
 
 
 
Second lien senior secured loan ($16.6 par due 6/2023)
 
10.48% (Libor + 9.25%/Q)
 
12/2/2016
 
16.6

 
16.6

(2)(17)
 
 
 
 
 
Second lien senior secured loan ($90.0 par due 6/2023)
 
10.48% (Libor + 9.25%/Q)
 
12/2/2016
 
89.3

 
90.0

(2)(17)
 
 
 
 
 
Class A units (500,000 units)
 
 
 
12/2/2016
 
5.0

 
6.8

(2)
 
 
 
 
 
 
 
 
 
 
 
146.1

 
148.7

 
 
Mitchell International, Inc.
 
Provider of mission-critical software and solutions to the property and casualty claims industry
 
Second lien senior secured loan ($17.0 par due 10/2021)
 
8.67% (Libor + 7.50%/Q)
 
1/3/2017
 
17.0

 
17.0

(2)(17)
 
MVL Group, Inc. (8)
 
Marketing research provider
 
Senior subordinated loan ($0.5 par due 7/2012)
 
 
 
4/1/2010
 
0.2

 
0.2

(2)(16)
 
 
 
 
 
Common stock (560,716 shares)
 
 
 
4/1/2010
 

 

(2)
 
 
 
 
 
 
 
 
 
 
 
0.2

 
0.2

 
 
NAS, LLC, Nationwide Marketing Group, LLC and Nationwide Administrative Services, Inc.
 
Buying and marketing services organization for appliance, furniture and consumer electronics dealers
 
Second lien senior secured loan ($24.1 par due 12/2021)
 
9.80% (Libor + 8.75%/Q)
 
6/1/2015
 
24.1

 
23.6

(2)(17)
 

10



As of June 30, 2017
(dollar amounts in millions)
(unaudited)

Company(1)
 
Business Description
 
Investment
 
Interest(6)(12)
 
Acquisition
Date
 
Amortized
Cost
 
Fair 
Value
 
Percentage
of Net
Assets
Novetta Solutions, LLC
 
Provider of advanced analytics solutions for the government, defense and commercial industries
 
First lien senior secured loan ($12.8 par due 10/2022)
 
6.30% (Libor + 5.00%/Q)
 
1/3/2017
 
12.3

 
12.3

(2)(17)
 
 
 
 
 
Second lien senior secured loan ($31.0 par due 10/2023)
 
9.80% (Libor + 8.50%/Q)
 
1/3/2017
 
28.4

 
28.2

(2)(17)
 
 
 
 
 
 
 
 
 
 
 
40.7

 
40.5

 
 
Palermo Finance Corporation (22)
 
Provider of mission-critical integrated public safety software and services to local, state, and federal agencies
 
First lien senior secured revolving loan
 
-
 
4/17/2017
 

 

(2)(20)
 
 
 
 
 
First lien senior secured loan ($14.1 par due 4/2023)
 
5.66% (Libor + 4.50%/Q)
 
4/17/2017
 
13.9

 
13.9

(4)(17)
 
 
 
 
 
Second lien senior secured loan ($54.3 par due 10/2023)
 
9.66% (Libor + 8.50%/Q)
 
4/17/2017
 
54.3

 
54.3

(2)(17)
 
 
 
 
 
 
 
 
 
 
 
68.2

 
68.2

 
 
Park Place Technologies, LLC
 
Provider of third party hardware maintenance and support services for IT data centers
 
Second lien senior secured loan ($41.5 par due 12/2022)
 
10.22% (Libor + 9.00%/Q)
 
1/3/2017
 
41.5

 
41.5

(2)(17)
 
PayNearMe, Inc.
 
Electronic cash payment system provider
 
Warrant to purchase up to 195,726 shares of Series E preferred stock (expires 3/2023)
 
 
 
3/11/2016
 
0.2

 

(2)(5)
 
Pegasus Intermediate Holdings, LLC (22)
 
Plant maintenance and scheduling process software provider
 
First lien senior secured loan ($1.3 par due 11/2022)
 
7.37% (Libor + 6.25%/Q)
 
11/7/2016
 
1.3

 
1.3

(2)(17)
 
PHL Investors, Inc., and PHL Holding Co. (8)
 
Mortgage services
 
Class A common stock (576 shares)
 
 
 
7/31/2012
 
3.8

 

(2)
 
PHNTM Holdings, Inc. and Planview Parent, Inc.
 
Provider of project and portfolio management software
 
First lien senior secured loan ($36.8 par due 1/2023)
 
6.48% (Libor + 5.25%/Q)
 
1/27/2017
 
36.1

 
36.8

(2)(17)
 
 
 
 
 
Second lien senior secured loan ($62.0 par due 7/2023)
 
10.98% (Libor + 9.75%/Q)
 
1/27/2017
 
61.1

 
62.0

(2)(17)
 
 
 
 
 
Class A common shares (990 shares)