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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 March 31, 2018

OR

o         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____         

Commission File 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 April 26, 2018
Common stock, $0.001 par value
 
426,298,200



ARES CAPITAL CORPORATION
 
INDEX
 
Part I.
Financial Information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




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

 
As of
 
March 31, 2018

December 31, 2017

(unaudited)

 

ASSETS
 

 
Investments at fair value
 


 

Non-controlled/non-affiliate company investments
$
9,803


$
10,010

Non-controlled affiliate company investments
240


216

Controlled affiliate company investments
2,156


1,615

Total investments at fair value (amortized cost of $12,164 and $11,905, respectively)
12,199


11,841

Cash and cash equivalents
302


316

Interest receivable
89


93

Receivable for open trades
4


1

Other assets
99


96

Total assets
$
12,693


$
12,347

LIABILITIES
 



Debt
$
5,118


$
4,854

Base management fees payable
46


44

Income based fees payable
28


27

Capital gains incentive fees payable
99


79

Accounts payable and other liabilities
155


181

Interest and facility fees payable
44


64

Payable for open trades
25

 
—

Total liabilities
5,515


5,249

Commitments and contingencies (Note 7)





STOCKHOLDERS’ EQUITY





Common stock, par value $0.001 per share, 600 common shares authorized; 426 common shares issued and outstanding
—


—

Capital in excess of par value
7,192


7,192

Accumulated overdistributed net investment income
(99
)

(81
)
Accumulated net realized gains on investments, foreign currency transactions, extinguishment of debt and other assets
60


72

Net unrealized gains (losses) on investments, foreign currency and other transactions
25


(85
)
Total stockholders’ equity
7,178


7,098

Total liabilities and stockholders’ equity
$
12,693


$
12,347

NET ASSETS PER SHARE
$
16.84


$
16.65


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
March 31,
 
2018
 
2017
INVESTMENT INCOME:
 

 
 

From non-controlled/non-affiliate company investments:
 

 
 

Interest income from investments (excluding payment-in-kind (“PIK”) interest income)
$
201

 
$
161

PIK interest income from investments
12

 
7

Capital structuring service fees
26

 
12

Dividend income
9

 
6

Other income
6

 
4

Total investment income from non-controlled/non-affiliate company investments
254

 
190

From non-controlled affiliate company investments:
 

 
 

Interest income from investments (excluding PIK interest income)
4


3

PIK interest income from investments
1

 
1

Total investment income from non-controlled affiliate company investments
5

 
4

From controlled affiliate company investments:
 

 
 

Interest income from investments (excluding PIK interest income)
30

 
56

PIK interest income from investments
6

 
3

Capital structuring service fees
3

 
—

Dividend income
13

 
18

Management and other fees
1

 
3

Other income
5

 
1

Total investment income from controlled affiliate company investments
58

 
81

Total investment income
317

 
275

EXPENSES:
 
 
 

Interest and credit facility fees
60

 
55

Base management fees
46

 
39

Income based fees
38

 
32

Capital gain incentive fees
20

 
16

Administrative fees
3

 
3

Professional fees and other costs related to the American Capital Acquisition
3

 
26

Other general and administrative
8

 
8

Total expenses
178

 
179

Waiver of income based fees
(10
)

—

Total expenses, net of waiver of income based fees
168

 
179

NET INVESTMENT INCOME BEFORE INCOME TAXES
149

 
96

Income tax expense, including excise tax
5

 
2

NET INVESTMENT INCOME
144

 
94

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

 
 

Net realized gains (losses):
 

 
 

Non-controlled/non-affiliate company investments
—

 
6

Controlled affiliate company investments
—

 
7

Foreign currency and other transactions
(12
)
 
(11
)
Net realized gains (losses)
(12
)
 
2

Net unrealized gains (losses):
 

 
 

Non-controlled/non-affiliate company investments
16

 
(14
)
Non-controlled affiliate company investments
2

 
1

Controlled affiliate company investments
78

 
31

Foreign currency and other transactions
14

 
4

Net unrealized gains
110

 
22

Net realized and unrealized gains from investments, foreign currency and other transactions
98

 
24

NET INCREASE IN STOCKHOLDERS’ EQUITY RESULTING FROM OPERATIONS
$
242

 
$
118

BASIC AND DILUTED EARNINGS PER COMMON SHARE (see Note 10)
$
0.57

 
$
0.28

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

 
422


See accompanying notes to consolidated financial statements.

4
ARES CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of March 31, 2018
(dollar amounts in millions)
(unaudited)


Company(1)
 
Business Description
 
Investment
 
Interest(6)(12)
 
Acquisition
Date
 
Amortized
Cost
 
Fair 
Value
 
Percentage
of Net
Assets
Healthcare Services
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Absolute Dental Management LLC and ADM Equity, LLC
 
Dental services provider
 
First lien senior secured loan ($18.9 par due 1/2022)
 
11.63% (Libor + 9.33%/Q)
 
1/5/2016
 
$
18.9

 
$
18.0

(2)(19)
 
 
 
 
 
First lien senior secured loan ($5.1 par due 1/2022)
 
11.63% (Libor + 9.33%/Q)
 
1/5/2016
 
5.1

 
4.8

(4)(19)
 
 
 
 
 
Class A preferred units (4,000,000 units)
 
 
 
1/5/2016
 
4.0

 
1.1

(2)
 
 
 
 
 
Class A common units (4,000,000 units)
 
 
 
1/5/2016
 
—

 
—

(2)
 
 
 
 
 
 
 
 
 
 
 
28.0

 
23.9

 
 
Acessa Health Inc. (fka HALT Medical, Inc.)
 
Medical supply provider
 
Common stock (569,823 shares)
 
 
 
6/22/2017
 
0.1

 
—

 
 
ADCS Billings Intermediate Holdings, LLC (23)
 
Dermatology practice
 
First lien senior secured revolving loan ($2.5 par due 5/2022)
 
9.50% (Base Rate + 4.75%/Q)
 
5/18/2016
 
2.5

 
2.5

(2)(19)(22)
 
ADG, LLC and RC IV GEDC Investor LLC (23)
 
Dental services provider
 
First lien senior secured revolving loan ($1.0 par due 9/2022)
 
6.46% (Libor + 4.75%/M)
 
9/28/2016
 
1.0

 
1.0

(2)(19)
 
 
 
 
 
First lien senior secured revolving loan ($1.0 par due 9/2022)
 
6.57% (Libor + 4.75%/M)
 
9/28/2016
 
1.0

 
0.9

(2)(19)
 
 
 
 
 
First lien senior secured revolving loan ($8.5 par due 9/2022)
 
6.63% (Libor + 4.75%/M)
 
9/28/2016
 
8.5

 
8.3

(2)(19)
 
 
 
 
 
First lien senior secured revolving loan ($0.8 par due 9/2022)
 
8.50% (Base Rate + 3.75%/Q)
 
9/28/2016
 
0.8

 
0.8

(2)(19)
 
 
 
 
 
Second lien senior secured loan ($87.5 par due 3/2024)
 
10.88% (Libor + 9.00%/M)
 
9/28/2016
 
87.5

 
81.4

(2)(19)
 
 
 
 
 
Membership units (3,000,000 units)
 
 
 
9/28/2016
 
3.0

 
1.9

(2)
 
 
 
 
 
 
 
 
 
 
 
101.8

 
94.3

 
 
Air Medical Group Holdings, Inc. and Air Medical Buyer Corp.
 
Emergency air medical services provider
 
Senior subordinated loan ($182.7 par due 3/2026)
 
9.64% (Libor + 7.88%/M)
 
3/14/2018
 
182.7

 
182.7

(2)(19)
 
 
 
 
 
Warrant to purchase up to 115,733 units of common stock (expires 3/2028)
 
 
 
3/14/2018
 
0.9

 
0.9

(2)
 
 
 
 
 
 
 
 
 
 
 
183.6

 
183.6

 
 
Alcami Holdings, LLC (8)(23)
 
Outsourced drug development services provider
 
First lien senior secured revolving loan ($7.7 par due 10/2019)
 
7.16% (Libor + 5.50%/M)
 
1/3/2017
 
7.7

 
7.7

(2)(19)
 
 
 
 
 
First lien senior secured revolving loan ($2.0 par due 10/2019)
 
7.21% (Libor + 5.50%/M)
 
1/3/2017
 
2.0

 
2.0

(2)(19)
 
 
 
 
 
First lien senior secured revolving loan ($15.9 par due 10/2019)
 
7.29% (Libor + 5.50%/M)
 
1/3/2017
 
15.9

 
15.9

(2)(19)
 
 
 
 
 
First lien senior secured loan ($10.0 par due 10/2020)
 
7.38% (Libor + 5.50%/M)
 
1/3/2017
 
10.0

 
10.0

(2)(19)
 
 
 
 
 
First lien senior secured loan ($95.4 par due 10/2020)
 
7.38% (Libor + 5.50%/M)
 
1/3/2017
 
95.4

 
95.4

(3)(19)
 
 
 
 
 
First lien senior secured loan ($0.2 par due 10/2020)
 
11.25% (Base Rate + 6.50%/Q)
 
1/3/2017
 
0.2

 
0.2

(3)(19)
 
 
 
 
 
Senior subordinated loan ($37.5 par due 10/2020)
 
14.75% PIK
 
1/3/2017
 
37.5

 
37.5

(2)
 
 
 
 
 
Senior subordinated loan ($38.0 par due 10/2020)
 
15.25% PIK
 
1/3/2017
 
25.8

 
38.0

(2)
 
 
 
 
 
Senior subordinated loan ($25.0 par due 10/2020)
 
12.25%
 
1/3/2017
 
25.0

 
25.0

(2)
 
 
 
 
 
Senior subordinated loan ($30.0 par due 10/2020)
 
11.75%
 
1/3/2017
 
30.0

 
30.0

(2)
 
 
 
 
 
Senior subordinated loan ($30.0 par due 10/2020)
 
12.00%
 
1/3/2017
 
30.0

 
30.0

(2)
 
 
 
 
 
Series R preferred membership units (30,000 units)
 
 
 
1/3/2017
 
—

 
155.6

 
 
 
 
 
 
Series R-2 preferred membership units (54,936 units)
 
 
 
1/3/2017
 
—

 
86.2

 
 
 
 
 
 
 
 
 
 
 
 
279.5

 
533.5

 
 

5


As of March 31, 2018
(dollar amounts in millions)
(unaudited)

Company(1)
 
Business Description
 
Investment
 
Interest(6)(12)
 
Acquisition
Date
 
Amortized
Cost
 
Fair 
Value
 
Percentage
of Net
Assets
Alegeus Technologies Holdings Corp.
 
Benefits administration and transaction processing provider
 
Preferred stock (2,997 shares)
 
 
 
12/13/2013
 
3.1

 
2.6

 
 
 
 
 
 
Common stock (3 shares)
 
 
 
12/13/2013
 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
3.1

 
2.6

 
 
Alteon Health, LLC
 
Provider of physician management services
 
First lien senior secured loan ($3.5 par due 9/2022)
 
7.80% (Libor + 5.50%/Q)
 
5/15/2017
 
3.5

 
3.0

(2)(19)
 
American Academy Holdings, LLC (23)
 
Provider of education, training, certification, networking, and consulting services to medical coders and other healthcare professionals
 
First lien senior secured revolving loan ($0.9 par due 12/2022)
 
8.55% (Libor + 6.25%/Q)
 
12/15/2017
 
0.9

 
0.9

(2)(19)
 
 
 
 
 
First lien senior secured loan ($199.8 par due 12/2022)
 
8.01% (Libor + 6.25%/S)
 
12/15/2017
 
199.8

 
197.8

(2)(19)
 
 
 
 
 
Senior subordinated loan ($76.2 par due 6/2023)
 
15.76% (Libor + 8.00% Cash, 6.00% PIK/S)
 
12/15/2017
 
76.2

 
74.6

(2)(19)
 
 
 
 
 
 
 
 
 
 
 
276.9

 
273.3

 
 
AwarePoint Corporation
 
Healthcare technology platform developer
 
First lien senior secured loan ($7.1 par due 12/2019)
 
 
 
9/5/2014
 
6.9

 
3.5

(2)(18)
 
 
 
 
 
Warrant to purchase up to 3,213,367 shares of Series 1 preferred stock (expires 9/2024)
 
 
 
11/14/2014
 
—

 
—

(2)
 
 
 
 
 
 
 
 
 
 
 
6.9

 
3.5

 
 
Bambino CI Inc. (23)
 
Manufacturer and provider of single-use obstetrics products
 
First lien senior secured revolving loan ($1.1 par due 10/2022)
 
7.88% (Libor + 6.00%/M)
 
10/17/2017
 
1.1

 
1.1

(2)(19)
 
 
 
 
 
First lien senior secured loan ($43.6 par due 10/2023)
 
7.88% (Libor + 6.00%/M)
 
10/17/2017
 
43.6

 
43.2

(2)(19)
 
 
 
 
 
 
 
 
 
 
 
44.7

 
44.3

 
 
CCS Intermediate Holdings, LLC and CCS Group Holdings, LLC (23)
 
Correctional facility healthcare operator
 
First lien senior secured revolving loan ($4.1 par due 7/2019)
 
6.30% (Libor + 4.00%/Q)
 
7/23/2014
 
4.1

 
3.8

(2)(19)(22)
 
 
 
 
 
First lien senior secured loan ($6.5 par due 7/2021)
 
6.30% (Libor + 4.00%/Q)
 
7/23/2014
 
6.5

 
6.2

(2)(19)
 
 
 
 
 
Second lien senior secured loan ($135.0 par due 7/2022)
 
10.36% (Libor + 8.38%/Q)
 
7/23/2014
 
134.3

 
124.2

(2)(19)
 
 
 
 
 
Class A units (1,000,000 units)
 
 
 
8/19/2010
 
—

 
1.1

(2)
 
 
 
 
 
 
 
 
 
 
 
144.9

 
135.3

 
 
Comprehensive EyeCare Partners, LLC (23)
 
Vision care practice management company
 
First lien senior secured loan ($5.4 par due 2/2024)
 
8.25% (Base Rate + 3.50%/Q)
 
2/14/2018
 
5.4

 
5.4

(2)(19)
 
Correctional Medical Group Companies, Inc.
 
Correctional facility healthcare operator
 
First lien senior secured loan ($48.8 par due 9/2021)
 
10.47% (Libor + 8.38%/Q)
 
9/29/2015
 
48.8

 
48.8

(3)(19)
 
 
 
 
 
First lien senior secured loan ($3.1 par due 9/2021)
 
10.47% (Libor + 8.38%/Q)
 
9/29/2015
 
3.1

 
3.1

(2)(19)
 
 
 
 
 
 
 
 
 
 
 
51.9

 
51.9

 
 
CSHM LLC (8)
 
Dental services provider
 
Class A membership units (1,979 units)
 
 
 
1/3/2017
 
—

 
—

 
 
D4C Dental Brands HoldCo, Inc. and Bambino Group Holdings, LLC (23)
 
Dental services provider
 
Class A preferred units (1,000,000 units)
 
 
 
12/21/2016
 
1.0

 
1.3

(2)
 
DCA Investment Holding, LLC (23)
 
Multi-branded dental practice management
 
First lien senior secured revolving loan
 
—
 
7/2/2015
 
—

 
—

(2)(21)
 
 
 
 
 
First lien senior secured loan ($18.7 par due 7/2021)
 
7.56% (Libor + 5.25%/Q)
 
7/2/2015
 
18.6

 
18.3

(4)(19)
 
 
 
 
 
 
 
 
 
 
 
18.6

 
18.3

 
 
Emerus Holdings, Inc. (23)
 
Freestanding 24-hour emergency care micro-hospitals operator
 
First lien senior secured revolving loan ($0.8 par due 9/2020)
 
6.38% (Libor + 4.50%/M)
 
3/14/2017
 
0.8

 
0.7

(2)(19)
 
 
 
 
 
First lien senior secured revolving loan ($0.8 par due 9/2020)
 
6.33% (Libor + 4.50%/M)
 
3/14/2017
 
0.8

 
0.7

(2)(19)
 
 
 
 
 
First lien senior secured loan ($3.2 par due 9/2021)
 
6.38% (Libor + 4.50%/M)
 
3/14/2017
 
2.9

 
2.8

(2)(19)
 
 
 
 
 
 
 
 
 
 
 
4.5

 
4.2

 
 

6


As of March 31, 2018
(dollar amounts in millions)
(unaudited)

Company(1)
 
Business Description
 
Investment
 
Interest(6)(12)
 
Acquisition
Date
 
Amortized
Cost
 
Fair 
Value
 
Percentage
of Net
Assets
GHX Ultimate Parent Corporation, Commerce Parent, Inc. and Commerce Topco, LLC
 
On-demand supply chain automation solutions provider to the healthcare industry
 
Second lien senior secured loan ($103.7 par due 6/2025)
 
10.30% (Libor + 8.00%/Q)
 
6/30/2017
 
102.8

 
103.7

(2)(19)
 
 
 
 
 
Series A preferred stock (110,425 shares)
 
13.06% PIK (Libor + 10.75%/Q)
 
6/30/2017
 
121.2

 
121.3

(2)(19)
 
 
 
 
 
Class A units (14,013,303 units)
 
 
 
6/30/2017
 
14.0

 
15.9

(2)
 
 
 
 
 
 
 
 
 
 
 
238.0

 
240.9

 
 
Greenphire, Inc. and RMCF III CIV XXIX, L.P
 
Software provider for clinical trial management
 
Limited partnership interest (99.90% interest)
 
 
 
12/19/2014
 
1.0

 
2.5

(2)
 
Heartland Dental, LLC
 
Detanl services provider
 
Dental services provider ($27.8 par due 7/2024)
 
10.38% (Libor + 8.50%/M)
 
7/31/2017
 
27.4

 
28.3

(2)(19)
 
Hygiena Borrower LLC (23)
 
Adenosine triphosphate testing technology provider
 
First lien senior secured revolving loan
 
—
 
8/26/2016
 
—

 
—

(2)(21)
 
 
 
 
 
Second lien senior secured loan ($10.0 par due 8/2023)
 
11.30% (Libor + 9.00%/Q)
 
8/26/2016
 
10.0

 
10.0

(2)(19)
 
 
 
 
 
Second lien senior secured loan ($10.7 par due 8/2023)
 
11.30% (Libor + 9.00%/Q)
 
2/27/2017
 
10.7

 
10.7

(2)(19)
 
 
 
 
 
 
 
 
 
 
 
20.7

 
20.7

 
 
Intermedix Corporation
 
Revenue cycle management provider to the emergency healthcare industry
 
First lien senior secured loan ($72.3 par due 12/2019)
 
6.45% (Libor + 4.75%/Q)
 
7/26/2017
 
72.3

 
72.3

(2)(19)
 
 
 
 
 
First lien senior secured loan ($79.7 par due 12/2019)
 
6.67% (Libor + 4.75%/Q)
 
7/26/2017
 
79.7

 
79.7

(2)(19)
 
 
 
 
 
First lien senior secured loan ($35.2 par due 12/2019)
 
6.45% (Libor + 4.75%/Q)
 
7/26/2017
 
35.2

 
35.2

(3)(19)
 
 
 
 
 
First lien senior secured loan ($38.8 par due 12/2019)
 
6.67% (Libor + 4.75%/Q)
 
7/26/2017
 
38.8

 
38.8

(3)(19)
 
 
 
 
 
First lien senior secured loan ($9.3 par due 12/2019)
 
6.45% (Libor + 4.75%/Q)
 
7/26/2017
 
9.3

 
9.3

(4)(19)
 
 
 
 
 
First lien senior secured loan ($10.3 par due 12/2019)
 
6.67% (Libor + 4.75%/Q)
 
7/26/2017
 
10.3

 
10.3

(4)(19)
 
 
 
 
 
Second lien senior secured loan ($112.0 par due 6/2020)
 
10.24% (Libor + 8.25%/Q)
 
12/27/2012
 
112.0

 
112.0

(2)(19)
 
 
 
 
 
 
 
 
 
 
 
357.6

 
357.6

 
 
JDC Healthcare Management, LLC (23)
 
Dental services provider
 
First lien senior secured revolving loan ($0.5 par due 4/2022)
 
8.22% (Libor + 6.50%/M)
 
4/10/2017
 
0.5

 
0.5

(2)(19)
 
 
 
 
 
First lien senior secured revolving loan ($2.0 par due 4/2022)
 
8.38% (Libor + 6.50%/M)
 
4/10/2017
 
2.0

 
2.0

(2)(19)
 
 
 
 
 
First lien senior secured loan ($4.2 par due 4/2023)
 
8.76% (Libor + 6.50%/A)
 
4/10/2017
 
4.2

 
4.1

(2)(19)
 
 
 
 
 
First lien senior secured loan ($9.9 par due 4/2023)
 
8.38% (Libor + 6.50%/M)
 
4/10/2017
 
9.9

 
9.7

(2)(19)
 
 
 
 
 
First lien senior secured loan ($19.9 par due 4/2023)
 
8.38% (Libor + 6.50%/M)
 
4/10/2017
 
19.9

 
19.5

(4)(19)
 
 
 
 
 
 
 
 
 
 
 
36.5

 
35.8

 
 
KBHS Acquisition, LLC (d/b/a Alita Care, LLC) (23)
 
Provider of behavioral health services
 
First lien senior secured revolving loan ($0.3 par due 3/2022)
 
6.74% (Libor + 5.00%/M)
 
3/17/2017
 
0.3

 
0.2

(2)(19)
 
 
 
 
 
First lien senior secured revolving loan ($0.1 par due 3/2022)
 
6.79% (Libor + 5.00%/M)
 
3/17/2017
 
0.1

 
0.1

(2)(19)
 
 
 
 
 
First lien senior secured revolving loan ($0.3 par due 3/2022)
 
6.85% (Libor + 5.00%/M)
 
3/17/2017
 
0.3

 
0.2

(2)(19)
 
 
 
 
 
First lien senior secured revolving loan ($1.7 par due 3/2022)
 
6.88% (Libor + 5.00%/M)
 
3/17/2017
 
1.7

 
1.7

(2)(19)
 
 
 
 
 
First lien senior secured revolving loan ($0.3 par due 3/2022)
 
8.75% (Base Rate + 4.00%/Q)
 
3/17/2017
 
0.3

 
0.3

(2)(19)
 
 
 
 
 
 
 
 
 
 
 
2.7

 
2.5

 
 

7


As of March 31, 2018
(dollar amounts in millions)
(unaudited)

Company(1)
 
Business Description
 
Investment
 
Interest(6)(12)
 
Acquisition
Date
 
Amortized
Cost
 
Fair 
Value
 
Percentage
of Net
Assets
Key Surgical LLC (23)
 
Provider of sterile processing, operating room and instrument care supplies for hospitals
 
First lien senior secured loan ($18.4 par due 6/2023)
 
5.75% (EURIBOR + 4.75%/Q)
 
6/1/2017
 
16.8

 
18.4

(2)(19)
 
 
 
 
 
First lien senior secured loan ($4.3 par due 6/2023)
 
6.76% (Libor + 4.75%/Q)
 
6/1/2017
 
4.3

 
4.3

(4)(19)
 
 
 
 
 
 
 
 
 
 
 
21.1

 
22.7

 
 
MB2 Dental Solutions, LLC (23)
 
Dental services provider
 
First lien senior secured revolving loan ($2.1 par due 9/2023)
 
8.50% (Base Rate + 3.75%/Q)
 
9/29/2017
 
2.1

 
2.1

(2)(19)
 
 
 
 
 
First lien senior secured loan ($4.7 par due 9/2023)
 
7.04% (Libor + 4.75%/Q)
 
9/29/2017
 
4.7

 
4.7

(2)(19)
 
 
 
 
 
 
 
 
 
 
 
6.8

 
6.8

 
 
MCH Holdings, Inc. and MC Acquisition Holdings I, LLC
 
Healthcare professional provider
 
First lien senior secured loan ($65.3 par due 1/2020)
 
7.29% (Libor + 5.50%/M)
 
7/26/2017
 
65.3

 
64.6

(2)(19)
 
 
 
 
 
First lien senior secured loan ($79.0 par due 1/2020)
 
7.38% (Libor + 5.50%/M)
 
7/26/2017
 
79.0

 
78.3

(2)(19)
 
 
 
 
 
First lien senior secured loan ($9.0 par due 1/2020)
 
7.29% (Libor + 5.50%/M)
 
7/26/2017
 
9.0

 
9.0

(4)(19)
 
 
 
 
 
First lien senior secured loan ($11.0 par due 1/2020)
 
7.38% (Libor + 5.50%/M)
 
7/26/2017
 
11.0

 
10.8

(4)(19)
 
 
 
 
 
Class A units (1,438,643 shares)
 
 
 
1/17/2014
 
1.5

 
1.0

(2)
 
 
 
 
 
 
 
 
 
 
 
165.8

 
163.7

 
 
MW Dental Holding Corp. (23)
 
Dental services provider
 
First lien senior secured revolving loan ($2.3 par due 4/2021)
 
8.93% (Libor + 6.75%/Q)
 
4/12/2011
 
2.3

 
2.3

(2)(19)
 
 
 
 
 
First lien senior secured revolving loan ($2.2 par due 4/2021)
 
9.04% (Libor + 6.75%/Q)
 
4/12/2011
 
2.2

 
2.2

(2)(19)
 
 
 
 
 
First lien senior secured loan ($2.3 par due 4/2021)
 
9.04% (Libor + 6.75%/Q)
 
3/19/2018
 
2.3

 
2.3

(2)(19)
 
 
 
 
 
First lien senior secured loan ($0.6 par due 4/2021)
 
8.93% (Libor + 6.75%/Q)
 
3/19/2018
 
0.6

 
0.6

(2)(19)
 
 
 
 
 
First lien senior secured loan ($58.7 par due 4/2021)
 
9.05% (Libor + 6.75%/Q)
 
4/12/2011
 
58.7

 
58.7

(2)(19)
 
 
 
 
 
First lien senior secured loan ($46.6 par due 4/2021)
 
9.05% (Libor + 6.75%/Q)
 
4/12/2011
 
46.6

 
46.6

(3)(19)
 
 
 
 
 
First lien senior secured loan ($19.3 par due 4/2021)
 
9.05% (Libor + 6.75%/Q)
 
4/12/2011
 
19.3

 
19.3

(4)(19)
 
 
 
 
 
 
 
 
 
 
 
132.0

 
132.0

 
 
My Health Direct, Inc.
 
Healthcare scheduling exchange software solution provider
 
Warrant to purchase up to 4,548 shares of Series D preferred stock (expires 9/2024)
 
 
 
9/18/2014
 
—

 
—

(2)
 
National Home Health Care Corp (23)
 
Provider of post-acute in-home care
 
First lien senior secured revolving loan ($1.4 par due 12/2021)
 
6.38% (Libor + 4.50%/M)
 
2/8/2018
 
1.4

 
1.4

(2)(19)
 
 
 
 
 
First lien senior secured revolving loan ($0.2 par due 12/2021)
 
8.25% (Base Rate + 3.50%/Q)
 
2/8/2018
 
0.2

 
0.2

(2)(19)
 
 
 
 
 
 
 
 
 
 
 
1.6

 
1.6

 
 
New Trident Holdcorp, Inc. and Trident Holding Company, LLC
 
Outsourced mobile diagnostic healthcare service provider
 
First lien senior secured loan ($30.5 par due 7/2019)
 
8.05% (Libor + 5.75%/Q)
 
8/1/2013
 
24.0

 
23.2

(2)(19)
 
 
 
 
 
Second lien senior secured loan ($84.7 par due 7/2020)
 
 
 
8/1/2013
 
79.3

 
43.2

(15)(18)
 
 
 
 
 
Senior subordinated loan ($9.1 par due 7/2020)
 
 
 
11/29/2017
 
8.8

 
—

(2)(18)
 
 
 
 
 
 
 
 
 
 
 
112.1

 
66.4

 
 
NMSC Holdings, Inc. and ASP NAPA Holdings, LLC
 
Anesthesia management services provider
 
Second lien senior secured loan ($72.8 par due 10/2023)
 
12.45% (Libor + 10.00%/B)
 
4/19/2016
 
72.8

 
65.5

(2)(19)
 
 
 
 
 
Class A units (25,277 units)
 
 
 
4/19/2016
 
2.5

 
0.9

(2)
 
 
 
 
 
 
 
 
 
 
 
75.3

 
66.4

 
 
Nodality, Inc.
 
Biotechnology company
 
First lien senior secured loan ($2.3 par due 8/2016)
 
 
 
11/12/2015
 
2.1

 
—

(2)(18)
 
 
 
 
 
First lien senior secured loan ($10.9 par due 8/2016)
 
 
 
4/25/2014
 
9.7

 
—

(2)(18)
 

8


As of March 31, 2018
(dollar amounts in millions)
(unaudited)

Company(1)
 
Business Description
 
Investment
 
Interest(6)(12)
 
Acquisition
Date
 
Amortized
Cost
 
Fair 
Value
 
Percentage
of Net
Assets
 
 
 
 
Warrant to purchase up to 3,736,255 shares of common stock (expires 3/2026)
 
 
 
5/1/2016
 
—

 
—

(2)
 
 
 
 
 
 
 
 
 
 
 
11.8

 
—

 
 
nThrive, Inc. (fka Precyse Acquisition Corp.)
 
Provider of healthcare information management technology and services
 
Second lien senior secured loan ($10.0 par due 4/2023)
 
11.63% (Libor + 9.75%/M)
 
4/20/2016
 
9.7

 
10.0

(2)(19)
 
OmniSYS Acquisition Corporation, OmniSYS, LLC, and OSYS Holdings, LLC (23)
 
Provider of technology-enabled solutions to pharmacies
 
First lien senior secured loan ($5.5 par due 11/2018)
 
9.80% (Libor + 7.50%/Q)
 
11/21/2013
 
5.5

 
5.5

(4)(19)
 
 
 
 
 
Limited liability company membership interest (1.57%)
 
 
 
11/21/2013
 
1.0

 
0.7

(2)
 
 
 
 
 
 
 
 
 
 
 
6.5

 
6.2

 
 
Pathway Partners Vet Management Company LLC (23)
 
Owner and operator of veterinary hospitals
 
First lien senior secured loan ($1.6 par due 10/2024)
 
6.13% (Libor + 4.25%/M)
 
10/4/2017
 
1.6

 
1.6

(2)(19)
 
 
 
 
 
First lien senior secured loan ($6.0 par due 10/2024)
 
6.13% (Libor + 4.25%/M)
 
10/4/2017
 
6.0

 
6.0

(2)(19)
 
 
 
 
 
 
 
 
 
 
 
7.6

 
7.6

 
 
Patterson Medical Supply, Inc.
 
Distributor of rehabilitation supplies and equipment
 
Second lien senior secured loan ($78.0 par due 8/2023)
 
10.29% (Libor + 8.50%/B)
 
9/2/2015
 
76.5

 
71.8

(2)(19)
 
PhyMED Management LLC
 
Provider of anesthesia services
 
Second lien senior secured loan ($47.2 par due 5/2021)
 
10.71% (Libor + 8.75%/Q)
 
12/18/2015
 
46.8

 
45.8

(2)(19)
 
Practice Insight, LLC (23)
 
Revenue cycle management provider to the emergency healthcare industry
 
First lien senior secured revolving loan ($0.6 par due 8/2022)
 
8.75% (Base Rate + 4.00%/Q)
 
8/23/2017
 
0.6

 
0.6

(2)(19)
 
 
 
 
 
First lien senior secured loan ($12.7 par due 8/2022)
 
6.88% (Libor + 5.00%/M)
 
8/23/2017
 
12.7

 
12.7

(2)(19)
 
 
 
 
 
 
 
 
 
 
 
13.3

 
13.3

 
 
ProVation Medical, Inc.
 
Provider of documentation and coding software for GI physicians
 
First lien senior secured loan ($13.1 par due 3/2024)
 
9.06% (Libor + 7.00%/Q)
 
3/9/2018
 
12.9

 
13.0

(2)(19)
 
RecoveryDirect Acquisition, L.L.C. (23)
 
Outpatient physical therapy provider
 
First lien senior secured revolving loan ($0.7 par due 1/2023)
 
6.22% (Libor + 4.50%/M)
 
1/3/2018
 
0.7

 
0.7

(2)(19)
 
 
 
 
 
First lien senior secured loan ($7.0 par due 1/2024)
 
6.19% (Libor + 4.50%/S)
 
1/3/2018
 
7.0

 
6.9

(2)(19)
 
 
 
 
 
First lien senior secured loan ($34.9 par due 1/2024)
 
6.80% (Libor + 4.50%/Q)
 
1/3/2018
 
34.9

 
34.6

(2)(19)
 
 
 
 
 
First lien senior secured loan ($0.1 par due 1/2024)
 
8.25% (Base Rate + 3.50%/Q)
 
1/3/2018
 
0.1

 
0.1

(2)(19)
 
 
 
 
 
 
 
 
 
 
 
42.7

 
42.3

 
 
Respicardia, Inc.
 
Developer of implantable therapies to improve cardiovascular health
 
Warrant to purchase up to 99,094 shares of Series C preferred stock (expires 6/2022)
 
 
 
6/28/2012
 
—

 
—

(2)
 
Salter Labs (23)
 
Developer, manufacturer and supplier of consumable products for medical device customers
 
First lien senior secured revolving loan ($0.6 par due 3/2020)
 
6.00% (Libor + 4.25%/Q)
 
2/8/2018
 
0.6

 
0.6

(2)(19)
 
 
 
 
 
First lien senior secured revolving loan ($0.2 par due 3/2020)
 
6.34% (Libor + 4.25%/Q)
 
2/8/2018
 
0.2

 
0.2

(2)(19)
 
 
 
 
 
First lien senior secured revolving loan ($0.5 par due 3/2020)
 
8.00% (Base Rate + 3.25%/Q)
 
2/8/2018
 
0.5

 
0.5

(2)(19)
 
 
 
 
 
 
 
 
 
 
 
1.3

 
1.3

 
 
Sarnova HC, LLC, Tri-Anim Health Services, Inc., and BEMS Holdings, LLC
 
Distributor of emergency medical service and respiratory products
 
Second lien senior secured loan ($54.0 par due 7/2022)
 
11.38% (Libor + 9.50%/M)
 
1/29/2016
 
54.0

 
54.5

(2)(19)
 
Siromed Physician Services, Inc. and Siromed Equity Holdings, LLC (23)
 
Outsourced anesthesia provider
 
First lien senior secured loan ($17.5 par due 3/2024)
 
7.04% (Libor + 4.75%/Q)
 
3/26/2018
 
17.5

 
17.4

(2)(19)
 
 
 
 
 
Common units (171,784 units)
 
 
 
3/26/2018
 
4.6

 
4.6

(2)
 
 
 
 
 
 
 
 
 
 
 
22.1

 
22.0

 
 

9


As of March 31, 2018
(dollar amounts in millions)
(unaudited)

Company(1)
 
Business Description
 
Investment
 
Interest(6)(12)
 
Acquisition
Date
 
Amortized
Cost
 
Fair 
Value
 
Percentage
of Net
Assets
TerSera Therapeutics LLC
 
Acquirer and developer of specialty therapeutic pharmaceutical products
 
First lien senior secured loan ($5.3 par due 3/2023)
 
7.56% (Libor + 5.25%/Q)
 
5/3/2017
 
5.2

 
5.3

(4)(19)
 
Transaction Data Systems, Inc.
 
Pharmacy management software provider
 
Second lien senior secured loan ($3.8 par due 6/2022)
 
10.74% (Libor + 9.00%/Q)
 
12/19/2017
 
3.8

 
3.8

(2)(19)
 
 
 
 
 
Second lien senior secured loan ($35.3 par due 6/2022)
 
10.70% (Libor + 9.00%/Q)
 
6/15/2015
 
35.3

 
35.3

(2)(19)
 
 
 
 
 
 
 
 
 
 
 
39.1

 
39.1

 
 
U.S. Anesthesia Partners, Inc.
 
Anesthesiology service provider
 
Second lien senior secured loan ($71.8 par due 6/2025)
 
9.13% (Libor + 7.25%/M)
 
6/16/2017
 
70.8

 
71.8

(2)(19)
 
Urgent Cares of America Holdings I, LLC and FastMed Holdings I, LLC (23)
 
Operator of urgent care clinics
 
Preferred units (7,696,613 units)
 
 
 
6/11/2015
 
7.7

 
2.8

 
 
 
 
 
 
Series A common units (2,000,000 units)
 
 
 
6/11/2015
 
2.0

 
—

 
 
 
 
 
 
Series C common units (5,288,427 units)
 
 
 
6/11/2015
 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
9.7

 
2.8

 
 
VistaPharm, Inc. and Vertice Pharma UK Parent Limited
 
Manufacturer and distributor of generic pharmaceutical products
 
First lien senior secured loan ($7.8 par due 12/2021)
 
7.86% (Libor + 6.00%/A)
 
11/6/2017
 
7.8

 
7.7

(2)(19)
 
 
 
 
 
Preferred shares (40,662 shares)
 
 
 
12/21/2015
 
0.3

 
0.4

(9)
 
 
 
 
 
 
 
 
 
 
 
8.1

 
8.1

 
 
West Dermatology, LLC (23)
 
Dermatology practice
 
First lien senior secured revolving loan ($1.8 par due 4/2022)
 
6.81% (Libor + 4.50%/Q)
 
2/8/2018
 
1.8

 
1.8

(2)(19)
 
WSHP FC Acquisition LLC (23)
 
Provider of biospecimen products
 
First lien senior secured revolving loan ($2.5 par due 3/2024)
 
8.81% (Libor + 6.50%/Q)
 
3/30/2018
 
2.5

 
2.5

(2)(19)
 
 
 
 
 
First lien senior secured loan ($28.7 par due 3/2024)
 
8.81% (Libor + 6.50%/Q)
 
3/30/2018
 
28.7

 
28.4

(2)(19)
 
 
 
 
 
 
 
 
 
 
 
31.2

 
30.9

 
 
 
 
 
 
 
 
 
 
 
 
2,826.6

 
2,976.4

 
41.47
%
Business Services
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accruent, LLC, Accruent Holding, LLC and Athena Parent, Inc. (23)
 
Real estate and facilities management software provider
 
First lien senior secured revolving loan ($1.8 par due 7/2023)
 
6.63% (Libor + 4.75%/B)
 
7/28/2017
 
1.8

 
1.8

(2)(19)
 
 
 
 
 
First lien senior secured revolving loan ($0.7 par due 7/2023)
 
6.67% (Libor + 4.75%/B)
 
7/28/2017
 
0.7

 
0.7

(2)(19)
 
 
 
 
 
Second lien senior secured loan ($13.2 par due 7/2024)
 
10.52% (Libor + 8.75%/Q)
 
7/28/2017
 
13.2

 
13.2

(2)(19)
 
 
 
 
 
Second lien senior secured loan ($0.5 par due 7/2024)
 
10.67% (Libor + 8.75%/Q)
 
7/28/2017
 
0.5

 
0.5

(2)(19)
 
 
 
 
 
Second lien senior secured loan ($2.6 par due 7/2024)
 
10.57% (Libor + 8.75%/Q)
 
7/28/2017
 
2.6

 
2.6

(2)(19)
 
 
 
 
 
Second lien senior secured loan ($58.4 par due 7/2024)
 
10.52% (Libor + 8.75%/Q)
 
7/28/2017
 
58.4

 
58.4

(2)(19)
 
 
 
 
 
Senior subordinated loan ($21.8 par due 7/2025)
 
11.50% PIK
 
7/28/2017
 
21.8

 
21.2

(2)
 
 
 
 
 
Senior subordinated loan ($77.9 par due 7/2025)
 
11.50% PIK
 
7/28/2017
 
77.9

 
75.6

(2)
 
 
 
 
 
Common stock (3,464 shares)
 
 
 
5/16/2016
 
3.6

 
3.6

(2)
 
 
 
 
 
Warrant to purchase up to 11,380 shares of common stock (expires 7/2037)
 
 
 
7/28/2017
 
—

 
4.0

(2)
 
 
 
 
 
 
 
 
 
 
 
180.5

 
181.6

 
 
Achilles Acquisition LLC (23)
 
Benefits broker and outsourced workflow automation platform provider for brokers
 
First lien senior secured loan ($4.0 par due 6/2023)
 
7.88% (Libor + 6.00%/M)
 
6/6/2017
 
4.0

 
4.0

(2)(19)
 
 
 
 
 
First lien senior secured loan ($3.3 par due 6/2023)
 
7.88% (Libor + 6.00%/M)
 
2/2/2018
 
3.3

 
3.3

(2)(19)
 
 
 
 
 
First lien senior secured loan ($10.2 par due 6/2023)
 
7.88% (Libor + 6.00%/M)
 
6/6/2017
 
10.2

 
10.2

(4)(19)
 
 
 
 
 
 
 
 
 
 
 
17.5

 
17.5

 
 

10


As of March 31, 2018
(dollar amounts in millions)
(unaudited)

Company(1)
 
Business Description
 
Investment
 
Interest(6)(12)
 
Acquisition
Date
 
Amortized
Cost
 
Fair 
Value
 
Percentage
of Net
Assets
Acrisure, LLC, Acrisure Investors FO, LLC and Acrisure Investors SO, LLC
 
Retail insurance advisor and brokerage
 
Membership interests (1.91% interest)
 
 
 
11/18/2016
 
11.0

 
13.7

(2)
 
 
 
 
 
Membership interests (0.95% interest)
 
 
 
11/18/2016
 
3.7

 
3.8

(2)
 
 
 
 
 
 
 
 
 
 
 
14.7

 
17.5

 
 
BeyondTrust Software, Inc.
 
Management software solutions provider
 
First lien senior secured loan ($46.0 par due 11/2023)
 
8.09% (Libor + 6.25%/M)
 
11/21/2017
 
45.4

 
45.6

(3)(19)
 
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)(18)
 
 
 
 
 
First lien senior secured loan ($3.1 par due 2/2019)
 
 
 
5/11/2015
 
2.9

 
—

(2)(18)
 
 
 
 
 
Warrant to purchase up to 184,003 units of convertible preferred shares (expires 8/2026)
 
 
 
8/5/2016
 
—

 
—

(2)
 
 
 
 
 
 
 
 
 
 
 
7.4

 
—

 
 
CallMiner, Inc.
 
Provider of cloud-based conversational analytics solutions
 
Warrant to purchase up to 2,350,636 shares of Series 1 preferred stock (expires 7/2024)
 
 
 
7/23/2014
 
—

 
—

(2)
 
Chesapeake Research Review, LLC and Schulman Associates Institutional Review Board, Inc. (23)
 
Provider of central institutional review boards over clinical trials
 
First lien senior secured loan ($30.7 par due 11/2023)
 
8.05% (Libor + 5.75%/Q)
 
11/7/2017
 
30.7

 
30.3

(2)(19)
 
Clearwater Analytics, LLC (23)
 
Provider of integrated cloud-based investment portfolio management, accounting, reporting and analytics software
 
First lien senior secured revolving loan ($0.9 par due 9/2022)
 
6.87% (Libor + 5.00%/M)
 
9/1/2016
 
0.9

 
0.9

(2)(19)
 
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

 
22.5

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

 
9.2

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

 
4.9

 
 
 
 
 
 
 
 
 
 
 
 
27.9

 
36.6

 
 
Command Alkon Incorporated (23)
 
Software solutions provider to the ready-mix concrete industry
 
First lien senior secured revolving loan ($1.5 par due 9/2022)
 
8.75% (Base Rate + 4.00%/Q)
 
9/1/2017
 
1.5

 
1.5

(2)(19)(22)
 
 
 
 
 
First lien senior secured loan ($25.5 par due 9/2023)
 
6.66% (Libor + 5.00%/M)
 
9/1/2017
 
25.5

 
25.5

(2)(19)
 
 
 
 
 
Second lien senior secured loan ($33.8 par due 3/2024)
 
11.01% (Libor + 9.00%/Q)
 
9/1/2017
 
33.8

 
33.8

(2)(19)
 
 
 
 
 
 
 
 
 
 
 
60.8

 
60.8

 
 
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)
 
10.07% (Libor + 8.25%/Q)
 
1/3/2017
 
51.0

 
51.0

(2)(19)
 
Compuware Parent, LLC