UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

x

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

 

For the quarterly period ended March 31, 2007

 

OR

o

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

 

For the transition period                   to                   

Commission File No. 000-50697

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)

 

280 Park Avenue, 22nd Floor, Building East, New York, NY 10017
(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   x      No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o

 

Accelerated filer x

 

Non-accelerated filer 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 x

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 May 9, 2007

Common stock, $0.001 par value

 

69,486,220

 



ARES CAPITAL CORPORATION

INDEX

Part I.

Financial Information

Item 1.

Financial Statements.

 

Consolidated Balance Sheets as of March 31, 2007 (unaudited) and December 31, 2006

 

Consolidated Schedules of Investments as of March 31, 2007 (unaudited) and December 31, 2006

 

Consolidated Statement of Operations for the three months ended March 31, 2007 (unaudited) and March 31, 2006 (unaudited)

 

Consolidated Statement of Stockholders’ Equity for the three months ended March 31, 2007 (unaudited) and March 31, 2006 (unaudited)

 

Consolidated Statement of Cash Flows for the three months ended March 31, 2007 (unaudited) and March 31, 2006 (unaudited)

 

Notes to Consolidated Financial Statements (unaudited)

Item 2.

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

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

Item 4.

Controls and Procedures.

Part II.

Other Information

Item 1.

Legal Proceedings.

Item 1A.

Risk Factors.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

Item 3.

Defaults Upon Senior Securities.

Item 4.

Submission of Matters to a Vote of Security Holders.

Item 5.

Other Information.

Item 6.

Exhibits.

 

2



PART I  —  FINANCIAL INFORMATION

Item 1.  Financial Statements.

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

 

 

As of

 

 

 

March 31, 2007

 

December 31, 2006

 

 

 

(unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Investments at fair value (amortized cost of $1,439,399,109 and $1,245,758,040, respectively)

 

 

 

 

 

Non-control/non-affiliate investments

 

$

1,186,483,547

 

$

991,529,464

 

Non-control affiliated company investments

 

247,264,574

 

244,292,372

 

Total investments at fair value

 

1,433,748,121

 

1,235,821,836

 

Cash and cash equivalents

 

54,333,411

 

91,538,878

 

Receivable for open trades

 

1,222,285

 

1,026,053

 

Interest receivable

 

14,105,571

 

10,121,104

 

Other assets

 

8,870,325

 

9,483,083

 

 

 

 

 

 

 

Total assets

 

$

1,512,279,713

 

$

1,347,990,954

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

Debt

 

$

670,000,000

 

$

482,000,000

 

Payable for open trades

 

—

 

60,000,000

 

Accounts payable and accrued expenses

 

1,863,910

 

2,027,948

 

Management and incentive fees payable

 

9,844,161

 

12,485,016

 

Interest and facility fees payable

 

2,809,253

 

2,044,586

 

Total liabilities

 

684,517,324

 

558,557,550

 

 

 

 

 

 

 

Commitments and contingencies (Note 6)

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Common stock, par value $.001 per share, 100,000,000 common shares authorized, 53,961,220 and 52,036,527 common shares issued and outstanding, respectively

 

53,961

 

52,037

 

Capital in excess of par value

 

822,000,330

 

785,192,573

 

Accumulated undistributed net investment income

 

3,913,272

 

7,038,469

 

Accumulated net realized gains on sale of investments

 

7,445,814

 

7,086,529

 

Net unrealized depreciation on investments

 

(5,650,988

)

(9,936,204

)

Total stockholders’ equity

 

827,762,389

 

789,433,404

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

1,512,279,713

 

$

1,347,990,954

 

 

 

 

 

 

 

NET ASSETS PER SHARE

 

$

15.34

 

$

15.17

 

 

See accompanying notes to consolidated financial statements.

3



ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

 

 

 

For the Three

 

For the Three

 

 

 

Months Ended

 

Months Ended

 

 

 

March 31, 2007

 

March 31, 2006

 

 

 

(unaudited)

 

(unaudited)

 

INVESTMENT INCOME:

 

 

 

 

 

From non-control/non-affiliate investments:

 

 

 

 

 

Interest from investments

 

$

29,976,327

 

$

15,051,133

 

Capital structuring service fees

 

4,284,547

 

1,746,205

 

Interest from cash & cash equivalents

 

820,833

 

231,229

 

Dividend income

 

375,000

 

—

 

Other income

 

152,152

 

42,543

 

Total invetment income from non-control/non-affiliate investments

 

35,608,859

 

17,071,110

 

 

 

 

 

 

 

From non-control affiliated company investments:

 

 

 

 

 

Interest from investments

 

3,840,254

 

2,476,932

 

Capital structuring service fees

 

37,500

 

583,810

 

Other income

 

228,410

 

59,453

 

Total investment income from non-control affiliated company investments

 

4,106,164

 

3,120,195

 

 

 

 

 

 

 

Total investment income

 

39,715,023

 

20,191,305

 

 

 

 

 

 

 

EXPENSES:

 

 

 

 

 

Interest and credit facility fees

 

8,549,315

 

1,729,620

 

Base management fees

 

5,089,497

 

2,543,659

 

Incentive management fees

 

4,754,664

 

2,922,884

 

Professional fees

 

965,813

 

471,451

 

Insurance

 

264,818

 

188,101

 

Administrative

 

210,357

 

177,537

 

Depreciation

 

101,177

 

—

 

Directors fees

 

64,750

 

63,250

 

Interest to the Investment Adviser

 

—

 

25,879

 

Other

 

760,140

 

168,509

 

Total expenses

 

20,760,531

 

8,290,890

 

 

 

 

 

 

 

NET INVESTMENT INCOME BEFORE INCOME TAXES

 

18,954,492

 

11,900,415

 

 

 

 

 

 

 

Income tax expense, including excise tax

 

10,166

 

208,880

 

 

 

 

 

 

 

NET INVESTMENT INCOME

 

18,944,326

 

11,691,535

 

 

 

 

 

 

 

REALIZED AND UNREALIZED NET GAINS ON INVESTMENTS:

 

 

 

 

 

Net realized gains (losses):

 

 

 

 

 

Net realized gains (losses) from non-control/non-affiliate investment transactions

 

269,285

 

563,603

 

Net realized gains (losses)from non-control affiliated company investment transactions

 

90,000

 

47,283

 

Net realized gains (losses) from investment transactions

 

359,285

 

610,886

 

Net unrealized gains (losses):

 

 

 

 

 

Net unrealized gains (losses) from non-control/non-affiliate investment transactions

 

(2,092,412

)

3,985,530

 

Net unrealized gains (losses) from non-control affiliated company investment transactions

 

6,377,628

 

(2,444,918

)

Net unrealized gains (losses) from investment transactions

 

4,285,216

 

1,540,612

 

 

 

 

 

 

 

Net realized and unrealized gains (losses) from investment transactions

 

4,644,501

 

2,151,498

 

 

 

 

 

 

 

NET INCREASE IN STOCKHOLDERS’ EQUITY RESULTING FROM OPERATIONS

 

$

23,588,827

 

$

13,843,033

 

 

 

 

 

 

 

BASIC AND DILUTED EARNINGS PER COMMON SHARE (see Note 4)

 

$

0.44

 

$

0.36

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING
(see Note 4)

 

53,178,927

 

37,988,700

 

 

See accompanying notes to consolidated financial statements.

4



ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of March 31, 2007

 

 

 

 

 

 

 

 

Initial

 

 

 

 

 

 

 

Percentage

 

 

 

 

 

 

 

 

 

Acquisition

 

Amortized

 

 

 

Fair Value

 

of Net

 

Company {1}

 

Industry

 

Investment

 

Interest {17}

 

Date

 

Cost

 

Fair Value

 

Per Unit

 

Assets

 

Healthcare - Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

American Renal Associates, Inc.

 

Dialysis provider

 

Senior secured loan ($2,688,524 par due 12/2010)

 

9.12% (Libor+ 3.75%/Q)

 

12/14/05

 

$

2,688,524

 

$

2,688,524

 

$

1.00

{3}

 

 

 

 

 

 

Senior secured loan ($196,721 par due 12/2010)

 

10.50% (Base Rate + 2.25%/D)

 

12/14/05

 

196,721

 

196,721

 

$

1.00

{3}

 

 

 

 

 

 

Senior secured loan ($5,788,525 par due 12/2011)

 

9.62% (Libor + 4.25%/Q)

 

12/14/05

 

5,788,525

 

5,788,525

 

$

1.00

{3}

 

 

 

 

 

 

Senior secured loan ($54,098 par due 12/2011)

 

11.00% (Base Rate + 2.75%/D)

 

12/14/05

 

54,098

 

54,098

 

$

1.00

{3}

 

 

 

 

 

 

Senior secured loan ($393,741 par due 12/2011)

 

12.37% (Libor + 7.00%/S)

 

12/14/05

 

393,741

 

393,741

 

$

1.00

 

 

 

 

 

 

 

Senior secured loan ($261,997 par due 12/2011)

 

12.37 (Libor + 7.00%/S)

 

12/14/05

 

261,997

 

261,997

 

$

1.00

{3}

 

 

 

 

 

 

Senior secured loan ($3,937,406 par due 12/2011)

 

12.36% (Libor + 7.00% /Q)

 

12/14/05

 

3,937,406

 

3,937,406

 

$

1.00

 

 

 

 

 

 

 

Senior secured loan ($2,619,971 par due 12/2011)

 

12.36% (Libor + 7.00% /Q)

 

12/14/05

 

2,619,971

 

2,619,971

 

$

1.00

{3}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capella Healthcare, Inc.

 

Acute care hospital operator

 

Junior secured loan ($1,000,000 par due 11/2013)

 

13.25% (Base Rate + 5.00%/D)

 

12/1/05

 

1,000,000

 

1,000,000

 

$

1.00

 

 

 

 

 

 

 

Junior secured loan ($30,000,000 par due 11/2013)

 

13.25% (Base Rate + 5.00%/D)

 

12/1/05

 

30,000,000

 

30,000,000

 

$

1.00

{2}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DSI Renal, Inc.

 

Dialysis provider

 

Senior subordinated note ($55,215,573 par due 4/2014)

 

12.00% Cash, 2.00% PIK

 

4/4/06

 

55,215,573

 

55,215,573

 

$

1.00

{4}

 

 

 

 

 

 

Senior subordinated note ($11,105,376 par due 4/2014)

 

12.00% Cash, 2.00% PIK

 

4/4/06

 

11,105,376

 

11,105,376

 

$

1.00

{3}{4}

 

 

 

 

 

 

Senior secured revolving loan ($4,000,000 par due 3/2013)

 

8.38% (Libor + 3.00%/Q)

 

4/4/06

 

4,000,000

 

4,000,000

 

$

1.00

 

 

 

 

 

 

 

Senior secured revolving loan ($960,000 par due 3/2013)

 

8.38% (Libor + 3.00%/Q)

 

4/4/06

 

960,000

 

960,000

 

$

1.00

 

 

 

 

 

 

 

Senior secured revolving loan ($1,600,000 par due 3/2013)

 

8.38% (Libor + 3.00%/Q)

 

4/4/06

 

1,600,000

 

1,600,000

 

$

1.00

 

 

 

 

 

 

 

Senior secured revolving loan ($2,096,000 par due 3/2013)

 

10.75% (Base Rate + 2.50%/D)

 

4/4/06

 

2,096,000

 

2,096,000

 

$

1.00

 

 

 

 

5



 

MPBP Holdings, Inc., Cohr Holdings, Inc. and MPBP Acquisition Co., Inc.

 

Healthcare equipment services

 

Junior secured loan ($20,000,000 par due 1/2014)

 

11.61% (Libor + 6.25%/Q)

 

1/31/07

 

20,000,000

 

20,000,000

 

$

1.00

 

 

 

 

 

 

 

Junior secured loan ($12,000,000 par due 1/2014)

 

11.61% (Libor + 6.25%/Q)

 

1/31/07

 

12,000,000

 

12,000,000

 

$

1.00

{3}

 

 

 

 

 

 

Common stock (50,000 shares)

 

 

 

1/31/07

 

5,000,000

 

5,000,000

 

$

100.00

{5}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OnCURE Medical Corp.

 

Radiation oncology care provider

 

Senior subordinated note ($25,758,837 par due 8/2013)

 

11.00% cash, 1.50% PIK

 

8/18/06

 

25,758,837

 

25,758,837

 

$

1.00

{4}

 

 

 

 

 

 

Senior secured loan ($3,259,375 par due 8/2011)

 

8.82% (Libor + 3.50%/S)

 

8/23/06

 

3,259,375

 

3,259,375

 

$

1.00

 

 

 

 

 

 

 

Senior secured loan ($696,690 par due 8/2008)

 

8.82% (Libor + 3.50%/S)

 

8/23/06

 

696,690

 

696,690

 

$

1.00

 

 

 

 

 

 

 

Common stock (857,143 shares)

 

 

 

8/18/06

 

3,000,000

 

3,000,000

 

$

3.50

{5}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Parker Group, Inc. {19}

 

Diversified healthcare services

 

Senior secured loan ($27,750,000 par due 3/2012)

 

13.75% (Base Rate + 5.50%/D)

 

3/1/07

 

27,750,000

 

27,750,000

 

$

1.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Triad Laboratory Alliance, LLC

 

Laboratory services

 

Senior subordinated note ($14,894,195 par due 12/2012)

 

12.00% cash, 1.75% PIK

 

12/21/05

 

14,894,195

 

14,894,195

 

$

1.00

{4}

 

 

 

 

 

 

Senior secured loan ($6,912,500 par due 12/2011)

 

8.60% (Libor + 3.25%/Q)

 

12/21/05

 

6,912,500

 

6,912,500

 

$

1.00

 

 

 

 

 

 

 

Senior secured loan ($2,962,500 par due 12/2011)

 

8.60% (Libor + 3.25%/Q)

 

12/21/05

 

2,962,500

 

2,962,500

 

$

1.00

{3}

 

 

 

 

 

 

 

 

 

 

 

 

244,152,029

 

244,152,029

 

 

 

29.50

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Apogee Retail, LLC

 

For-profit thrift retailer

 

Senior secured loan ($65,835,000 par due 3/2012)

 

10.58%(Libor + 5.25%/S)

 

3/27/07

 

65,835,000

 

65,835,000

 

$

1.00

 

 

 

 

 

 

 

Senior secured loan ($165,000 par due 3/2012)

 

10.60% (Libor + 5.25%/Q)

 

3/27/07

 

165,000

 

165,000

 

$

1.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savers, Inc and SAI Acquisition Corporation

 

For-profit thrift retailer

 

Senior subordinated note ($28,411,563 par due 8/2014)

 

10.00% cash, 2.00% PIK

 

8/8/06

 

28,411,563

 

28,411,563

 

$

1.00

{2}{4}

 

 

 

 

 

 

Common stock (1,170,182 shares)

 

 

 

8/8/06

 

4,500,000

 

4,500,000

 

$

3.85

{5}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Things Remembered, Inc. and TRM Holdings Corporation

 

Personalized gifts retailer

 

Senior secured loan ($4,776,000 par due 9/2012)

 

10.07% (Libor + 4.75%/M)

 

9/28/06

 

4,776,000

 

4,776,000

 

$

1.00

{3}

 

 

 

 

 

 

Senior secured loan ($14,000,000 par due 9/2012)

 

11.32% (Libor + 6.00%/M)

 

9/28/06

 

14,000,000

 

14,000,000

 

$

1.00

 

 

 

 

 

 

 

Senior secured loan ($14,000,000 par due 9/2012)

 

11.32% (Libor + 6.00%/M)

 

9/28/06

 

14,000,000

 

14,000,000

 

$

1.00

{2}

 

 

 

 

 

 

Senior secured loan ($7,200,000 par due 9/2012)

 

11.32% (Libor + 6.00%/M)

 

9/28/06

 

7,200,000

 

7,200,000

 

$

1.00

{3}

 

 

 

 

 

 

Preferred stock (80 shares)

 

 

 

9/28/06

 

1,800,000

 

1,800,000

 

$

22,500.00

{5}

 

 

 

 

 

 

Common stock (800 shares)

 

 

 

9/28/06

 

200,000

 

200,000

 

$

250.00

{5}

 

 

 

 

 

 

 

 

 

 

 

 

140,887,563

 

140,887,563

 

 

 

17.03

%

 

6



 

Education

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Instituto de Banca y Comercio, Inc. and National College of Business and Technology Company, Inc.

 

Private school operator

 

Senior secured revolving loan ($1,500,000 par due 3/2014)

 

8.32% (Libor + 3.00%/M)

 

3/15/07

 

1,500,000

 

1,500,000

 

1.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior secured loan ($64,000,000 par due 3/2014)

 

10.35% (Libor + 5.00%/Q)

 

3/15/07

 

64,000,000

 

64,000,000

 

1.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equinox SMU Partners LLC and SMU Acquisition Corp. {9} {15} {20}

 

Medical school operator

 

Senior secured revolving loan ($6,550,000 par due 12/2010)

 

13.25% (Base Rate + 5.00%/D)

 

1/26/06

 

6,550,000

 

6,550,000

 

$

1.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior secured revolving loan ($1,032,342 par due 12/2010)

 

11.36% (Libor + 6.00%/Q)

 

1/26/06

 

1,032,342

 

1,032,342

 

$

1.00

 

 

 

 

 

 

 

Senior secured loan ($4,524,354 par due 12/2010)

 

11.35% (Libor + 6.00%/Q)

 

1/26/06

 

4,524,354

 

4,524,354

 

$

1.00

 

 

 

 

 

 

 

Senior secured loan ($4,625,646 par due 12/2010)

 

11.35% (Libor + 6.00%/Q)

 

1/26/06

 

4,625,646

 

4,625,646

 

$

1.00

{3}

 

 

 

 

 

 

Senior secured loan ($250,000 par due 12/2010)

 

11.35% (Libor + 6.00%/Q)

 

1/26/06

 

250,000

 

250,000

 

$

1.00

 

 

 

 

 

 

 

Senior secured loan ($250,000 par due 12/2010)

 

11.35% (Libor + 6.00%/Q)

 

1/26/06

 

250,000

 

250,000

 

$

1.00

{3}

 

 

 

 

 

 

Limited liability company membership interest (17.39% interest)

 

 

 

1/25/06

 

4,000,000

 

4,000,000

 

 

{5}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ELC Acquisition Corporation

 

Developer, manufacturer and retailer of educational products

 

Senior secured loan ($3,085,714 par due 11/2012)

 

9.13% (Libor + 3.75%/S)

 

11/30/06

 

3,085,714

 

3,085,714

 

$

1.00

 

 

 

 

 

 

 

Junior secured loan ($8,333,333 par due 11/2013)

 

12.35% (Libor + 7.00%/Q)

 

11/30/06

 

8,333,333

 

8,333,333

 

$

1.00

{3}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lakeland Finance, LLC

 

Private school operator

 

Senior secured note ($18,000,000 par due 12/2012)

 

11.50%

 

12/13/05

 

18,000,000

 

18,000,000

 

$

1.00

 

 

 

 

 

 

 

Senior secured note ($15,000,000 par due 12/2012)

 

11.50%

 

12/13/05

 

15,000,000

 

15,000,000

 

$

1.00

{2}

 

 

 

 

 

 

 

 

 

 

 

 

131,151,389

 

131,151,389

 

 

 

15.85

%

 

7



 

Printing, Publishing and Media

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Canon Communications LLC

 

Print publications services

 

Junior secured loan ($7,525,000 par due 11/2011)

 

12.07% (Libor + 6.75%/M)

 

5/25/05

 

7,525,000

 

7,525,000

 

$

1.00

 

 

 

 

 

 

 

Junior secured loan ($4,250,000 par due 11/2011)

 

12.07% (Libor + 6.75%/M)

 

5/25/05

 

4,250,000

 

4,250,000

 

$

1.00

{2}

 

 

 

 

 

 

Junior secured loan ($12,000,000 par due 11/2011)

 

12.07% (Libor + 6.75%/M)

 

5/25/05

 

12,000,000

 

12,000,000

 

$

1.00

{3}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Daily Candy, Inc. {11}{20}

 

Internet publication provider

 

Senior secured loan ($12,422,111 par due 5/2009)

 

10.36% (Libor + 5.00%/S)

 

5/25/06

 

12,889,397

 

12,422,111

 

$

1.00

 

 

 

 

 

 

 

Senior secured loan ($11,577,889 par due 5/2009)

 

10.36% (Libor + 5.00%/S)

 

5/25/06

 

12,013,418

 

11,577,889

 

$

1.00

{3}

 

 

 

 

 

 

Senior secured loan ($258,794 par due 5/2009)

 

10.35% (Libor + 5.00%/Q)

 

5/25/06

 

268,529

 

258,794

 

$

1.00

 

 

 

 

 

 

 

Senior secured loan ($241,206 par due 5/2009)

 

10.35% (Libor + 5.00%/Q)

 

5/25/06

 

250,280

 

241,206

 

$

1.00

{3}

 

 

 

 

 

 

Senior secured loan ($64,698 par due 5/2009)

 

12.25% (Base Rate + 4.00%/D)

 

5/25/06

 

67,132

 

64,698

 

$

1.00

 

 

 

 

 

 

 

Senior secured loan ($60,302 par due 5/2009)

 

12.25% (Base Rate + 4.00%/D)

 

5/25/06

 

62,570

 

60,302

 

$

1.00

{3}

 

 

 

 

 

 

Common stock (1,250,000 shares)

 

 

 

5/25/06

 

2,375,000

 

4,085,000

 

$

3.27

{5}

 

 

 

 

 

 

Warrants to purchase 1,381,578 shares

 

 

 

5/25/06

 

2,624,998

 

4,514,997

 

$

3.27

{5}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

National Print Group, Inc.

 

Printing management services

 

Senior secured revolving loan ($531,499 par due 3/2012)

 

10.75% (Base Rate + 2.50%/D)

 

3/2/06

 

531,499

 

531,499

 

$

1.00

 

 

 

 

 

 

 

Senior secured revolving loan ($798,913 par due 3/2012)

 

8.82% (Libor + 3.50%/M)

 

3/2/06

 

798,913

 

798,913

 

$

1.00

 

 

 

 

 

 

 

Senior secured loan ($5,295,652 par due 3/2012)

 

8.85% (Libor + 3.50%/Q)

 

3/2/06

 

5,295,652

 

5,295,652

 

$

1.00

{3}

 

 

 

 

 

 

Senior secured loan ($273,913 par due 3/2012)

 

10.75% (Base Rate + 2.50%/D)

 

3/2/06

 

273,913

 

273,913

 

$

1.00

{3}

 

 

 

 

 

 

Senior secured loan ($5,295,652 par due 3/2012)

 

8.86% (Libor + 3.50%/Q)

 

3/2/06

 

5,295,652

 

5,295,652

 

$

1.00

{3}

 

 

 

 

 

 

Senior secured loan ($2,319,368 par due 8/2012)

 

12.35% (Libor + 7.00%/B)

 

3/2/06

 

2,319,368

 

2,319,368

 

$

1.00

 

 

 

 

 

 

 

Senior secured loan ($419,763 par due 8/2012)

 

12.35% (Libor + 7.00%/B)

 

3/2/06

 

419,763

 

419,763

 

$

1.00

{3}

 

 

 

 

 

 

Senior secured loan ($1,932,806 par due 8/2012)

 

12.36% (Libor + 7.00%/Q)

 

3/2/06

 

1,932,806

 

1,932,806

 

$

1.00

 

 

 

 

 

 

 

Senior secured loan ($349,802 par due 8/2012)

 

12.36% (Libor + 7.00%/Q)

 

3/2/06

 

349,802

 

349,802

 

$

1.00

{3}

 

 

 

 

 

 

Preferred stock (9,344 shares)

 

 

 

3/2/06

 

2,000,000

 

2,000,000

 

$

214.04

{5}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Teaching Company, LLC and The Teaching Company Holdings, Inc. {18}

 

Education publications provider

 

Senior secured loan ($28,000,000 par due 9/2012)

 

10.50%

 

9/29/06

 

28,000,000

 

28,000,000

 

$

1.00

 

 

 

 

 

 

 

Senior secured loan ($12,000,000 par due 9/2012)

 

10.50%

 

9/29/06

 

12,000,000

 

12,000,000

 

$

1.00

{3}

 

 

 

 

 

 

Preferred stock (29,969 shares)

 

 

 

9/29/06

 

2,996,921

 

2,996,921

 

$

100.00

{5}

 

 

 

 

 

 

Common stock (15,393 shares)

 

 

 

9/29/06

 

3,079

 

3,079

 

$

0.20

{5}

 

 

 

 

 

 

 

 

 

 

 

 

116,543,692

 

119,217,365

 

 

 

14.41

%

 

8



 

Services - Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

American Residential Services, LLC

 

Plumbing, heating and air-conditioning services

 

Senior subordinated note ($8,833,181 par due 9/2013)

 

12.00% Cash, 3.00% PIK

 

11/9/06

 

8,833,181

 

8,833,181

 

$          1.00

{2}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diversified Collection Services, Inc.

 

Collections services

 

Senior secured loan ($5,242,025 par due 2/2011)

 

9.57% (Libor + 4.25%/M)

 

2/2/05

 

5,242,025

 

4,560,561

 

$          0.87

{3}

 

 

 

 

 

 

Senior secured loan ($1,742,026 par due 8/2011)

 

11.32% (Libor + 6.00%/M)

 

2/2/05

 

1,742,026

 

1,358,781

 

$          0.78

{2}

 

 

 

 

 

 

Senior secured loan ($6,757,974 par due 8/2011)

 

11.32% (Libor + 6.00%/M)

 

2/2/05

 

6,757,974

 

5,271,219

 

$          0.78

{3}

 

 

 

 

 

 

Preferred stock (14,927 shares)

 

 

 

5/18/06

 

169,123

 

—

 

$             —

{5}

 

 

 

 

 

 

Common stock (114,004 shares)

 

 

 

2/2/05

 

295,270

 

—

 

$             —

{5}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GCA Services Group, Inc.

 

Custodial services

 

Senior secured loan ($8,000,000 par due 12/2011)

 

12.00%

 

12/15/06

 

8,000,000

 

8,000,000

 

$          1.00

 

 

 

 

 

 

 

Senior secured loan ($30,000,000 par due 12/2011)

 

12.00%

 

12/15/06

 

30,000,000

 

30,000,000

 

$          1.00

{2}

 

 

 

 

 

 

Senior secured loan ($12,000,000 par due 12/2011)

 

12.00%

 

12/15/06

 

12,000,000

 

12,000,000

 

$          1.00

{3}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Growing Family, Inc. and GFH Holdings, LLC

 

Photography services

 

Senior secured loan ($11,937,500 par due 8/2011)

 

8.36% (Libor + 3.00%/Q)

 

3/16/07

 

11,937,500

 

11,937,500

 

$          1.00

 

 

 

 

 

 

 

Senior secured loan ($3,591,000 par due 8/2011)

 

12.36% (Libor + 7.00%/Q)

 

3/16/07

 

3,591,000

 

3,591,000

 

$          1.00

 

 

 

 

 

 

 

Common stock (552,430 shares)

 

 

 

3/15/07

 

872,286

 

872,286

 

$          1.58

{5}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NPA Acquisition, LLC

 

Powersport vehicle auction operator

 

Senior secured loan ($4,533,333 par due 8/2012)

 

8.56% (Libor + 3.25%/S)

 

8/28/06

 

4,533,333

 

4,533,333

 

$          1.00

 

 

 

 

 

 

 

Senior secured loan ($333,333 par due 8/2012)

 

8.57% (Libor + 3.25%/M)

 

8/28/06

 

333,333

 

333,333

 

$          1.00

 

 

 

 

 

 

 

Senior secured loan ($91,667 par due 8/2012)

 

10.25% (Base Rate + 2.00%/D)

 

8/28/06

 

91,667

 

91,667

 

$          1.00

 

 

 

 

 

 

 

Junior secured loan ($2,000,000 par due 2/2013)

 

12.08% (Libor + 6.75%/Q)

 

8/23/06

 

2,000,000

 

2,000,000

 

$          1.00

 

 

 

 

 

 

 

Junior secured loan ($12,000,000 par due 2/2013)

 

12.08% (Libor + 6.75%/Q)

 

8/23/06

 

12,000,000

 

12,000,000

 

$          1.00

{3}

 

 

 

 

 

 

Common units (1,709 shares)

 

 

 

8/23/06

 

1,000,000

 

1,000,000

 

$      585.14

{5}

 

 

 

 

 

 

 

 

 

 

 

 

109,398,718

 

106,382,861

 

 

 

12.86

%

 

9



 

Manufacturing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Arrow Group Industries, Inc.

 

Residential and outdoor shed manufacturer

 

Senior secured loan ($6,000,000 par due 4/2010)

 

10.35% (Libor + 5.00%/Q)

 

3/28/05

 

6,037,770

 

6,000,000

 

$         1.00

{3}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Emerald Performance Materials, LLC

 

Polymers and performance materials manufacturer

 

Senior secured loan ($10,344,019 par due 5/2011)

 

9.60% (Libor + 4.25%/B)

 

5/22/06

 

10,344,019

 

10,344,019

 

$         1.00

{3}

 

 

 

 

 

 

Senior secured loan ($52,632 par due 5/2011)

 

10.00% (Base Rate + 1.75%/D)

 

5/22/06

 

52,632

 

52,632

 

$         1.00

{3}

 

 

 

 

 

 

Senior secured loan ($3,728,092 par due 5/2011)

 

11.35% (Libor + 6.00%/M)

 

5/22/06

 

3,728,092

 

3,728,092

 

$         1.00

 

 

 

 

 

 

 

Senior secured loan ($1,522,742 par due 5/2011)

 

11.35% (Libor + 6.00%/M)

 

5/22/06

 

1,522,742

 

1,522,742

 

$         1.00

{3}

 

 

 

 

 

 

Senior secured loan ($4,321,657 par due 5/2011)

 

13.00% cash, 3.00% PIK

 

5/22/06

 

4,321,657

 

4,321,657

 

$         1.00

{4}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Saw Mill PCG Partners LLC

 

Precision components manufacturer

 

Common units (1,000 shares)

 

 

 

2/2/07

 

1,000,000

 

1,000,000

 

1,000.00

{5}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Qualitor, Inc.

 

Automotive aftermarket components supplier

 

Senior secured loan ($1,955,000 par due 12/2011)

 

9.60% (Libor + 4.25%/Q)

 

12/29/04

 

1,955,000

 

1,955,000

 

$         1.00

{3}

 

 

 

 

 

 

Junior secured loan ($5,000,000 par due 6/2012)

 

12.60% (Libor + 7.25%/Q)

 

12/29/04

 

5,000,000

 

5,000,000

 

$         1.00

{3}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Professional Paint, Inc.

 

Paint manufacturer

 

Junior secured loan ($4,500,000 par due 5/2013)

 

11.13% (Libor + 5.75%/S)

 

5/25/06

 

4,500,000

 

4,500,000

 

$         1.00

 

 

 

 

 

 

 

Junior secured loan ($12,000,000 par due 5/2013)

 

11.13% (Libor + 5.75%/S)

 

5/25/06

 

12,000,000

 

12,000,000

 

$         1.00

{3}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reflexite Corporation {10} {20}

 

Developer and manufacturer of high visibility reflective products

 

Senior subordinated loan ($7,692,581 par due 12/2011)

 

11.00% cash, 3.00% PIK

 

12/30/04

 

7,692,581

 

7,923,052

 

$         1.03

{2}{4}

 

 

 

 

 

 

Common Stock (1,729,627 shares)

 

 

 

3/28/06

 

25,682,891

 

26,530,057

 

$       15.34

{5}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Universal Trailer Corporation {6} {20}

 

Livestock and specialty trailer manufacturer

 

Common stock (50,000 shares)

 

 

 

10/8/04

 

6,424,645

 

5,500,000

 

$     110.00

{5}

 

 

 

 

 

 

Warrants to purchase 22,208 shares

 

 

 

10/8/04

 

1,505,776

 

2,442,880

 

$     110.00

{5}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Varel Holdings, Inc.

 

Drill bit manufacturer

 

Common stock (30,451 shares)

 

 

 

5/18/05

 

3,045

 

1,011,569

 

$       33.22

{5}

 

 

 

 

 

 

 

 

 

 

 

 

91,770,850

 

93,831,700

 

 

 

11.34

%

 

10



 

Consumer Products - Non-Durable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AWTP, LLC

 

Water treatment services

 

Junior secured loan ($1,600,000 par due 12/2012)

 

12.85% (Libor + 7.50%/Q)

 

12/21/05

 

1,600,000

 

1,600,000

 

$         1.00

 

 

 

 

 

 

 

Junior secured loan ($12,000,000 par due 12/2012)

 

12.85% (Libor + 7.50%/Q)

 

12/21/05

 

12,000,000

 

12,000,000

 

$         1.00

{3}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Badanco Enterprises, Inc.

 

Luggage manufacturer

 

Senior secured revolving loan ($550,337 par due 1/2012)

 

11.50% (Base Rate + 3.25%/D)

 

1/24/07

 

550,337

 

550,337

 

$         1.00

 

 

 

 

 

 

 

Senior secured revolving loan ($500,000 par due 1/2012)

 

9.82% (Libor + 4.50%/M)

 

1/24/07

 

500,000

 

500,000

 

$         1.00

 

 

 

 

 

 

 

Senior secured loan ($312,500 par due 1/2012)

 

11.50% (Base Rate + 3.25%/D)

 

1/24/07

 

312,500

 

312,500

 

$         1.00

{3}

 

 

 

 

 

 

Senior secured loan ($5,937,500 par due 1/2012)

 

9.86% (Libor + 4.50%/Q)

 

1/24/07

 

5,937,500

 

5,937,500

 

$         1.00

{3}

 

 

 

 

 

 

Senior secured loan ($5,625,000 par due 1/2012)

 

9.86% (Libor + 4.50%/Q)

 

1/24/07

 

5,625,000

 

5,625,000

 

$         1.00

{3}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Innovative Brands, LLC

 

Consumer products and personal care manufacturer

 

Senior Secured Loan ($12,967,500 par due 9/2011)

 

11.13 %

 

10/12/06

 

12,967,500

 

12,967,500

 

$         1.00

 

 

 

 

 

 

 

Senior Secured Loan ($11,970,000 par due 9/2011)

 

11.13 %

 

10/12/06

 

11,970,000

 

11,970,000

 

$         1.00

{3}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Making Memories Wholesale, Inc. {7} {20}

 

Scrapbooking branded products manufacturer

 

Senior secured loan ($7,600,000 par due 3/2011)

 

9.88% (Libor + 4.50%/Q)

 

5/5/05

 

7,600,000

 

7,600,000

 

$         1.00

{3}

 

 

 

 

 

 

Senior subordinated loan ($10,255,347 par due 5/2012)

 

12.50% cash, 2.00% PIK

 

5/5/05

 

10,255,347

 

10,255,347

 

$         1.00

{2}{4}

 

 

 

 

 

 

Preferred stock (3,759 shares)

 

 

 

5/5/05

 

3,758,800

 

1,320,000

 

$     351.16

{5}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shoes for Crews, LLC

 

Safety footwear and slip-related mats

 

Senior secured loan ($1,248,680 par due 7/2010)

 

8.61% (Libor + 3.25%/S)

 

10/8/04

 

1,256,027

 

1,256,027

 

$         1.01

{3}

 

 

 

 

 

 

Senior secured revolving loan ($3,333,333 par due 7/2010)

 

10.25% (Base Rate + 2.00%/D)

 

6/16/06

 

3,333,333

 

3,333,333

 

$         1.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UCG Paper Crafts, Inc.

 

Scrapbooking materials manufacturer

 

Senior secured loan ($1,980,000 par due 2/2013)

 

8.57% (Libor + 3.25%/M)

 

2/23/06

 

1,980,000

 

1,980,000

 

$         1.00

{3}

 

 

 

 

 

 

Junior secured loan ($9,877,557 par due 2/2013)

 

12.82% (Libor + 7.50%/M)

 

2/23/06

 

9,877,557

 

9,877,557

 

$         1.00

{3}

 

 

 

 

 

 

 

 

 

 

 

 

89,523,901

 

87,085,101

 

 

 

10.52

%

 

11



 

Containers-Packaging

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Captive Plastics, Inc.

 

Plastics container manufacturer

 

Junior secured loan ($15,500,000 par due 2/2012)

 

12.61% (Libor + 7.25%/Q)

 

12/19/05

 

15,500,000

 

15,500,000

 

$

1.00

 

 

 

 

 

 

 

Junior secured loan ($12,000,000 par due 2/2012)

 

12.61% (Libor + 7.25%/Q)

 

12/19/05

 

12,000,000

 

12,000,000

 

$

1.00

{3}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial Container Services, LLC {8} {20}

 

Industrial container manufacturer, reconditioner and servicer

 

Senior secured loan ($15,426,242 par due 9/2011)

 

11.34% (Libor + 6.00%/S)

 

9/30/05

 

15,426,242

 

15,426,242

 

$

1.00

 

 

 

 

 

 

 

Senior secured loan ($994,937 par due 9/2011)

 

11.34% (Libor + 6.00%/S)

 

6/21/06

 

994,937

 

994,937

 

$

1.00

{2}

 

 

 

 

 

 

Senior secured loan ($11,879,093 par due 9/2011)

 

11.34% (Libor + 6.00%/S)

 

6/21/06

 

11,879,093

 

11,879,093

 

$

1.00

{3}

 

 

 

 

 

 

Senior secured loan ($39,253 par due 9/2011)

 

11.35% (Libor + 6.00%/Q)

 

6/21/06

 

39,253

 

39,253

 

$

1.00

 

 

 

 

 

 

 

Senior secured loan ($2,532 par due 9/2011)

 

11.35% (Libor + 6.00%/Q)

 

6/21/06

 

2,532

 

2,532

 

$

1.00

{2}

 

 

 

 

 

 

Senior secured loan ($30,227 par due 9/2011)

 

11.35% (Libor + 6.00%/Q)

 

6/21/06

 

30,227

 

30,227

 

$

1.00

{3}

 

 

 

 

 

 

Senior secured loan ($9,900,000 par due 9/2011)

 

11.34% (Libor + 6.00.%/S)

 

9/30/05

 

9,900,000

 

9,900,000

 

$

1.00

 

 

 

 

 

 

 

Senior secured loan ($25,000 par due 9/2011)

 

11.35% (Libor + 6.00%/Q)

 

9/30/05

 

25,000

 

25,000

 

$

1.00

 

 

 

 

 

 

 

Senior secured revolving loan ($536,957 par due 9/2011)