Edgar Filing: ARES CAPITAL CORP

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 June 30, 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 ¨

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 August 9, 2007
Common stock, $0.001 par value		69,757,588

ARES CAPITAL CORPORATION

INDEX

Part I.		Financial Information

Item 1.		Financial Statements.

		Consolidated Balance Sheets as of June 30, 2007 (unaudited) and December 31, 2006

		Consolidated Statement of Operations for the three and six months ended June 30, 2007 (unaudited) and June 30, 2006 (unaudited)

		Consolidated Schedules of Investments as of June 30, 2007 (unaudited) and December 31, 2006

		Consolidated Statement of Stockholders’ Equity for the six months ended June 30, 2007 (unaudited) and June 30, 2006 (unaudited)

		Consolidated Statement of Cash Flows for the six months ended June 30, 2007 (unaudited) and June 30, 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.

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	As of
	June 30, 2007			December 31, 2006
	(unaudited)
ASSETS

Investments at fair value (amortized cost of $1,605,205,297 and $1,245,758,040, respectively)
Non-control/non-affiliate investments	$	1,231,614,106		$	991,529,464
Non-control affiliated company investments	377,418,736			244,292,372
Control affiliated company investments	6,980,400			—
Total investments at fair value	1,616,013,242			1,235,821,836
Cash and cash equivalents	61,543,795			91,538,878
Receivable for open trades	1,023,688			1,026,053
Interest receivable	17,966,360			10,121,104
Other assets	7,943,269			9,483,083

Total assets	$	1,704,490,354		$	1,347,990,954

LIABILITIES

Debt	$	552,000,000		$	482,000,000
Payable for open trades	30,000,000			60,000,000
Accounts payable and accrued expenses	2,218,476			2,027,948
Management and incentive fees payable	12,042,680			12,485,016
Interest and facility fees payable	3,089,043			2,044,586
Total liabilities	599,350,199			558,557,550

Commitments and contingencies (Note 6)

STOCKHOLDERS’ EQUITY

Common stock, par value $.001 per share, 100,000,000 common shares authorized, 69,757,588 and 52,036,527 common shares issued and outstanding, respectively	69,757			52,037
Capital in excess of par value	1,094,284,316			785,192,573
Accumulated undistributed net investment income	415,395			7,038,469
Accumulated net realized gains (losses) on sale of investments	(437,258		)	7,086,529
Net unrealized appreciation (depreciation) on investments	10,807,945			(9,936,204		)
Total stockholders’ equity	1,105,140,155			789,433,404

Total liabilities and stockholders’ equity	$	1,704,490,354		$	1,347,990,954

NET ASSETS PER SHARE	$	15.84		$	15.17

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

	For the three			For the three			For the six			For the six
	months ended			months ended			months ended			months ended
	June 30, 2007			June 30, 2006			June 30, 2007			June 30, 2006
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
INVESTMENT INCOME:
From non-control/non-affiliate investments:
Interest from investments	$	34,250,691		$	20,737,226		$	64,145,489		$	35,788,359
Capital structuring service fees	1,982,411			4,670,493			6,266,957			6,416,698
Interest from cash & cash equivalents	671,122			199,948			1,491,956			431,177
Dividend income	375,000			1,170,000			750,000			1,170,000
Other income	388,589			244,466			506,681			287,009
Total investment income from non-control/non-affiliate investments	37,667,813			27,022,133			73,161,083			44,093,243

From non-control affiliated company investments:
Interest from investments	5,469,490			2,760,198			9,416,130			5,237,130
Capital structuring service fees	3,224,500			600,000			3,262,000			1,183,810
Dividend income	502,705			—			502,705			—
Other income	314,010			107,420			551,623			166,873
Total investment income from non-control affiliated company investments	9,510,705			3,467,618			13,732,458			6,587,812

From control affiliated company investments:
Interest from investments	55,400			—			55,400			—
Capital structuring service fees	165,000			—			165,000			—
Total investment income from control affiliated company investments	220,400			—			220,400			—

Total investment income	47,398,918			30,489,751			87,113,941			50,681,056

EXPENSES:
Interest and credit facility fees	7,564,573			4,773,743			16,113,887			6,503,364
Base management fees	5,814,174			3,107,197			10,903,671			5,650,856
Incentive management fees	6,228,506			6,940,399			10,983,170			9,863,283
Professional fees	1,523,592			676,637			2,489,406			1,148,088
Insurance	266,039			198,431			530,856			386,532
Administrative	235,000			188,488			445,357			366,025
Depreciation	102,301			49,302			203,478			49,302
Directors fees	63,250			73,919			128,000			137,169
Interest to the Investment Adviser	—			—			—			25,879
Other	653,457			217,105			1,413,598			385,612
Total expenses	22,450,892			16,225,221			43,211,423			24,516,110

NET INVESTMENT INCOME BEFORE INCOME TAXES	24,948,026			14,264,530			43,902,518			26,164,946

Income tax expense (benefit), including excise tax	(43,447		)	4,971,635			(33,281		)	5,180,515

NET INVESTMENT INCOME	24,991,473			9,292,895			43,935,799			20,984,431

REALIZED AND UNREALIZED NET GAINS ON INVESTMENTS:
Net realized gains (losses):
Net realized gains (losses) from non-control/non-affiliate investments	(8,113,543		)	23,879,988			(7,844,257		)	24,443,591
Net realized gains (losses) from non-control affiliated company investments	230,470			—			320,470			47,283
Net realized gains (losses) from investments	(7,883,073		)	23,879,988			(7,523,787		)	24,490,874

Net unrealized gains (losses):
Net unrealized gains (losses) from non-control/non-affiliate investments	14,376,312			(16,480,203		)	12,283,900			(12,494,673		)
Net unrealized gains (losses) from non-control affiliated company investments	2,082,621			—			8,460,249			(2,444,918		)
Net unrealized gains (losses) from investments	16,458,933			(16,480,203		)	20,744,149			(14,939,591		)

Net realized and unrealized gains (losses) from investments	8,575,860			7,399,785			13,220,362			9,551,283

NET INCREASE IN STOCKHOLDERS’ EQUITY RESULTING FROM OPERATIONS	$	33,567,333		$	16,692,680		$	57,156,161		$	30,535,714

BASIC AND DILUTED EARNINGS PER COMMON SHARE (see Note 4)	$	0.49		$	0.44		$	0.93		$	0.80

WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING (see Note 4)	68,806,785			38,089,889			61,375,116			38,039,574

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of June 30, 2007

						Initial														Percentage
Company {1}	Industry	Investment		Interest {21}		Acquisition Date		Amortized Cost			Fair Value			Fair Value Per Unit						of Net Assets
Healthcare - Services
American Renal Associates, Inc.	Dialysis provider	Senior secured loan ($2,688,524 par due 12/2010)		8.61% (Libor+ 3.25%/Q)		12/14/05		$		2,688,524	$		2,688,524	$		1.00		{3}
		Senior secured loan ($16,393 par due 12/2010)		10.00% (Base Rate + 1.75%/D)		12/14/05		16,393			16,393			$		1.00		{3}
		Senior secured loan ($5,788,525 par due 12/2011)		8.61% (Libor + 3.25%/Q)		12/14/05		5,788,525			5,788,525			$		1.00		{3}
		Senior secured loan ($39,344 par due 12/2011)		10.00% (Base Rate + 1.75%/D)		12/14/05		39,344			39,344			$		1.00		{3}
		Senior secured loan ($393,741 par due 12/2011)		8.61% (Libor + 3.25%/Q)		12/14/05		393,741			393,741			$		1.00
		Senior secured loan ($261,997 par due 12/2011)		8.61% (Libor + 3.25%/Q)		12/14/05		261,997			261,997			$		1.00		{3}
		Senior secured loan ($3,937,406 par due 12/2011)		8.60% (Libor + 3.25% /Q)		12/14/05		3,937,406			3,937,406			$		1.00
		Senior secured loan ($2,619,971 par due 12/2011)		8.60% (Libor + 3.25% /Q)		12/14/05		2,619,971			2,619,971			$		1.00		{3}

Capella Healthcare, Inc.	Acute care hospital operator	Junior secured loan ($19,000,000 par due 11/2013)		10.86% (Libor + 5.50%/Q)		12/1/05		19,000,000			19,000,000			$		1.00
		Junior secured loan ($30,000,000 par due 11/2013)		10.86% (Libor + 5.50%/Q)		12/1/05		30,000,000			30,000,000			$		1.00		{2}

CT Technologies Intermediate Holdings, Inc. and CT Technologies Holdings, LLC {15}	Healthcare information management services	Senior secured revolving loan ($2,430,000 par due 3/2012)		12.25% (Base Rate + 4.00%/D)		6/15/07		2,430,000			2,430,000			$		1.00
		Senior secured loan ($61,000,000 par due 3/2012)		12.25% (Base Rate + 4.00%/D)		6/15/07		61,000,000			61,000,000			$		1.00
		Preferred Stock (6,000 shares)				6/15/07		6,000,000			6,000,000			$		1,000.00		{5}
		Common Stock (9,679 shares)				6/15/07		4,000,000			4,000,000			$		413.27		{5}

DSI Renal, Inc.	Dialysis provider	Senior subordinated note ($55,196,910 par due 4/2014)		12.00% Cash, 2.00% PIK		4/4/06		55,196,911			55,196,910			$		1.00		{4}
		Senior subordinated note ($11,460,271 par due 4/2014)		12.00% Cash, 2.00% PIK		4/4/06		11,460,272			11,460,271			$		1.00		{4} {3}
		Senior secured revolving loan ($3,200,000 par due 3/2013)		8.38% (Libor + 3.00%/Q)		4/4/06		3,200,000			3,200,000			$		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 ($2,400,000 par due 3/2013)		8.38% (Libor + 3.00%/Q)		4/4/06		2,400,000			2,400,000			$		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 ($1,440,000 par due 3/2013)		10.75% (Base Rate + 2.50%/D)		4/4/06		1,440,000			1,440,000			$		1.00

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}

MWD Acquisition Sub, Inc.	Dental services	Senior secured loan ($4,987,500 par due 5/2013)		8.61% (Libor + 3.25%/B)		5/3/07		4,987,500			4,987,500			$		1.00
		Junior secured loan ($5,000,000 par due 5/2012)		11.61% (Libor + 6.25%/B)		5/3/07		5,000,000			5,000,000			$		1.00

OnCURE Medical Corp.	Radiation oncology care provider	Senior subordinated note ($25,857,583 par due 8/2013)		11.00% Cash, 1.50% PIK		8/18/06		25,857,583			25,857,583			$		1.00		{4}
		Senior secured loan ($696,690 par due 8/2008)		8.82% (Libor + 3.50%/Q)		8/23/06		696,690			696,690			$		1.00
		Senior secured loan ($720,000 par due 8/2008)		10.25% (Base Rate + 2.00%D)		8/23/06		720,000			720,000			$		1.00
		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
		Common stock (857,143 shares)				8/18/06		3,000,000			3,000,000			$		3.50		{5}

The Parker Group, Inc. {23}	Diversified healthcare services	Senior secured loan ($16,222,500 par due 3/2012)		12.32% (Libor + 7.00%/M)		3/1/07		15,750,000			15,750,000			$		1.00
		Senior secured loan ($12,360,000 par due 3/2012)		12.32% (Libor + 7.00%/M)		3/1/07		12,000,000			12,000,000			$		1.00		{3}

Triad Laboratory Alliance, LLC	Laboratory services	Senior subordinated note ($14,959,352 par due 12/2012)		12.00% cash, 1.75% PIK		12/21/05		14,959,352			14,959,352			$		1.00		{4}
		Senior secured loan ($6,895,000 par due 12/2011)		8.61% (Libor + 3.25%/Q)		12/21/05		6,895,000			6,895,000			$		1.00
		Senior secured loan ($2,955,000 par due 12/2011)		8.61% (Libor + 3.25%/Q)		12/21/05		2,955,000			2,955,000			$		1.00		{3}
								347,513,585			347,513,583									31.70	%

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}

Courtside Acquisition Corp.	Community newspaper publisher	Senior subordinated loan ($30,000,000 par due 6/2014)		15.00% PIK		6/29/07		30,000,000			30,000,000			$		1.00		{4}

Daily Candy, Inc. {11}	Internet publication provider	Senior secured loan ($10,355,330 par due 5/2009)		10.38% (Libor + 5.00%/S)		5/25/06		10,917,986			10,355,330			$		1.00
		Senior secured loan ($11,695,431 par due 5/2009)		10.38% (Libor + 5.00%/S)		5/25/06		12,330,901			11,695,431			$		1.00		{3}
		Senior secured loan ($152,267 par due 5/2009)		10.38% (Libor + 5.00%/S)		5/25/06		160,540			152,267			$		1.00
		Senior secured loan ($171,972 par due 5/2009)		10.38% (Libor + 5.00%/S)		5/25/06		181,316			171,972			$		1.00		{3}
			Senior secured loan ($58,701 par due 5/2009)		10.36% (Libor + 5.00%/Q)		5/25/06		61,891			58,701			$		1.00
			Senior secured loan ($66,299 par due 5/2009)		10.36% (Libor + 5.00%/Q)		5/25/06		69,901			66,299			$		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 ($905,238 par due 3/2012)	10.75% (Base Rate + 2.50%/D)	3/2/06	905,238	905,238	$	1.00
		Senior secured revolving loan ($684,783 par due 3/2012)	8.82% (Libor + 3.50%/M)	3/2/06	684,783	684,783	$	1.00
		Senior secured loan ($5,147,283 par due 3/2012)	8.86% (Libor + 3.50%/Q)	3/2/06	5,147,283	5,147,283	$	1.00	{3}
		Senior secured loan ($239,674 par due 3/2012)	10.75% (Base Rate + 2.50%/D)	3/2/06	239,674	239,674	$	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)	12.34% (Libor + 7.00%/B)	3/2/06	2,319,368	2,319,368	$	1.00
		Senior secured loan ($419,763 par due 8/2012)	12.34% (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. {22}	Education publications provider	Senior secured loan ($40,000,000 par due 9/2012)	10.50%	9/29/06	40,000,000	40,000,000	$	1.00
		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}
					144,791,902	147,169,366				13.42	%

Education
ELC Acquisition Corporation	Developer, manufacturer and retailer of educational products	Senior secured loan ($2,728,379 par due 11/2012)	9.13% (Libor + 3.75%/S)	11/30/06	2,728,379	2,728,379	$	1.00
		Junior secured loan ($8,333,333 par due 11/2013)	12.36% (Libor + 7.00%/S)	11/30/06	8,333,333	8,333,333	$	1.00	{3}
		Senior secured loan ($357,335 par due 11/2012)	9.13% (Libor + 3.75%/Q)	11/30/06	357,335	357,335	$	1.00	{3}

Equinox EIC Partners LLC and MUA Management Company, LTD. {18} {19}	Medical school operator	Senior secured revolving loan ($4,000,000 par due 12/2012)	11.36% (Libor + 6.00%/Q)	4/3/07	4,000,000	4,000,000	$	1.00
		Senior secured revolving loan ($4,738,503 par due 12/2012)	13.25% (Base Rate + 5.00%/D)	4/3/07	4,738,503	4,738,503	$	1.00
		Senior secured loan ($7,500,000 par due 12/2012)	11.36% (Libor + 6.00%/Q)	4/3/07	7,500,000	7,500,000	$	1.00	{3}
		Senior secured loan ($2,500,000 par due 12/2012)	11.36% (Libor + 6.00%/Q)	4/3/07	2,500,000	2,500,000	$	1.00
		Preferred membership interest (22,222 shares)		4/3/07	4,444,400	4,444,400	$	200.00	{5}
		Common membership interest (15,556 shares)		4/3/07	1,555,600	1,555,600	$	100.00	{5}

Equinox SMU Partners LLC and SMU Acquisition Corp. {9} {19}	Medical school operator	Senior secured revolving loan ($3,482,342 par due 12/2010)	13.25% (Base Rate + 5.00%/D)	1/26/06	3,482,342	3,482,342	$	1.00
		Senior secured revolving loan ($2,000,000 par due 12/2010)	11.33% (Libor + 6.00%/S)	1/26/06	2,000,000	2,000,000	$	1.00
		Senior secured loan ($8,475,000 par due 12/2010)	11.36% (Libor + 6.00%/Q)	1/26/06	8,475,000	8,475,000	$	1.00
		Senior secured loan ($500,000 par due 12/2010)	11.36% (Libor + 6.00%/Q)	1/26/06	500,000	500,000	$	1.00
		Common stock (15,251 shares)		1/25/06	4,000,000	4,000,000	262.28		{5}

Instituto de Banca y Comercio, Inc. {19}	Private school operator	Senior secured revolving loan ($1,125,000 par due 3/2014)	8.32% (Libor + 3.00%/M)	3/15/07	1,125,000	1,125,000	$	1.00
		Senior secured revolving loan ($2,625,000 par due 3/2014)	8.32% (Libor + 3.00%/M)	3/15/07	2,625,000	2,625,000	$	1.00
		Senior secured revolving loan ($750,000 par due 3/2014)	8.34% (Libor + 3.00%/B)	3/15/07	750,000	750,000	$	1.00
		Senior secured loan ($37,000,000 par due 3/2014)	10.34% (Libor + 5.00%/M)	3/15/07	37,000,000	37,000,000	$	1.00
		Senior secured loan ($12,000,000 par due 3/2014)	10.34% (Libor + 5.00%/M)	3/15/07	12,000,000	12,000,000	$	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}
					141,114,892	141,114,893				12.87	%

Financial
Abingdon Investments Limited {13} {19} {20}	Investment company	Ordinary shares (948,500 shares)		12/15/06	9,032,978	9,143,540	$	9.64	{5}

Firstlight Financial Corporation {14} {20}	Investment company	Senior subordinated loan ($61,773,712 par due 12/2016)	10.00% PIK	12/31/06	61,773,712	61,773,712	$	1.00	{4}
		Common stock (10,000 shares)		12/31/06	10,000,000	10,000,000	$	1,000.00	{5}
		Common stock (30,000 shares)		12/31/06	30,000,000	30,000,000	$	1,000.00	{5}

Imperial Capital Group, LLC {20}	Investment banking services	Membership units (7,710 shares)		5/10/07	14,997,159	14,997,159	$	1,945.16	{5}
		Membership units (2,526 shares)		5/10/07	2,526	2,526	$	1.00	{5}
		Membership units (315 units)		5/10/07	315	315	$	1.00	{5}

Partnership Capital Growth Fund I, L.P. {20}	Investment partnership	Limited partnership interest (25% interest)		6/16/06	1,232,810	1,232,810			{5}
					127,039,499	127,150,061				11.60	%

Retail
Apogee Retail, LLC	For-profit thrift retailer	Senior secured loan ($19,445,769 par due 3/2012)	10.58% (Libor + 5.25%/S)	3/27/07	19,445,769	19,445,769	$	1.00
		Senior secured loan ($19,950,000 par due 3/2012)	10.58% (Libor + 5.25%/S)	3/27/07	19,950,000	19,950,000	$	1.00	{2}
		Senior secured loan ($11,970,000 par due 3/2012)	10.58% (Libor + 5.25%/S)	3/27/07	11,970,000	11,970,000	$	1.00	{3}

Savers, Inc. and SAI Acquisition Corporation	For-profit thrift retailer	Senior subordinated note ($28,556,391 par due 8/2014)	10.00% cash, 2.00% PIK	8/8/06	28,556,391	28,556,391	$	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 ($2,388,000 par due 9/2012)	10.11% (Libor + 4.75%/M)	9/28/06	2,388,000	2,388,000	$	1.00	{3}
		Senior secured loan ($2,388,000 par due 9/2012)	10.07% (Libor + 4.75%/M)	9/28/06	2,388,000	2,388,000	$	1.00	{3}
		Senior secured loan ($2,795,792 par due 9/2012)	11.36% (Libor + 6.00%/Q)	9/28/06	2,795,792	2,795,792	$	1.00	{2}
		Senior secured loan ($2,795,792 par due 9/2012)	11.36% (Libor + 6.00%/Q)	9/28/06	2,795,792	2,795,792	$	1.00
		Senior secured loan ($1,437,836 par due 9/2012)	11.36% (Libor + 6.00%/Q)	9/28/06	1,437,836	1,437,836	$	1.00	{3}
		Senior secured loan ($11,204,208 par due 9/2012)	11.32% (Libor + 6.00%/M)	9/28/06	11,204,208	11,204,208	$	1.00	{2}
		Senior secured loan ($11,204,208 par due 9/2012)	11.32% (Libor + 6.00%/M)	9/28/06	11,204,208	11,204,208	$	1.00
		Senior secured loan ($5,762,164 par due 9/2012)	11.32% (Libor + 6.00%/M)	9/28/06	5,762,164	5,762,164	$	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}
					126,398,160	126,398,160				11.53	%

Services - Other
American Residential Services, LLC	Plumbing, heating and air-conditioning services	Junior secured loan ($10,041,666 par due 4/2015)	10.00% Cash, 2.00% PIK	4/17/07	10,041,666	10,041,666	$	1.00	{4}

Diversified Collection Services, Inc.	Collections services	Senior secured loan ($5,126,932 par due 2/2011)	10.32% (Libor + 5.00%/M)	2/2/05	5,126,932	4,460,431	$	0.87	{3}
		Senior secured loan ($1,742,026 par due 8/2011)	13.25% (Base rate + 5.00%/D)	2/2/05	1,742,026	1,358,781	$	0.78	{2}
		Senior secured loan ($6,757,974 par due 8/2011)	13.25% (Base rate + 5.00%/D)	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 revolving loan ($900,000 par due 8/2011)	9.75% (Base Rate + 1.50%/D)	3/16/07	900,000	900,000	$	1.00
		Senior secured loan ($319,764 par due 8/2011)	8.86% (Libor + 3.50%/Q)	3/16/07	319,764	319,764	$	1.00
		Senior secured loan ($8,405,236 par due 8/2011)	8.86% (Libor + 3.50%/Q)	3/16/07	8,405,236	8,405,236	$	1.00	{3}
		Senior secured loan ($47,186 par due 8/2011)	8.86% (Libor + 3.50%/Q)	3/16/07	47,186	47,186	$	1.00
		Senior secured loan ($1,240,314 par due 8/2011)	8.86% (Libor + 3.50%/Q)	3/16/07	1,240,314	1,240,314	$	1.00	{3}
		Senior secured loan ($70,550 par due 8/2011)	8.85% (Libor + 3.50%/Q)	3/16/07	70,550	70,550	$	1.00
		Senior secured loan ($1,854,450 par due 8/2011)	8.85% (Libor + 3.50%/Q)	3/16/07	1,854,450	1,854,450	$	1.00	{3}
		Senior secured loan ($3,575,000 par due 8/2011)	11.36% (Libor + 6.00%/Q)	3/16/07	3,575,000	3,575,000	$	1.00
		Senior secured loan ($16,000 par due 8/2011)	9.75% (Base Rate + 1.50%/D)	3/16/07	16,000	16,000	$	1.00
		Common stock (552,430 shares)		3/16/07	872,286	872,286	$	1.58	{5}

NPA Acquisition, LLC	Powersport vehicle auction operator	Senior secured loan ($4,466,667 par due 8/2012)	8.57% (Libor + 3.25%/M)	8/28/06	4,466,667	4,466,667	$	1.00
		Senior secured loan ($50,000 par due 8/2012)	10.25% (Base Rate + 2.00%/D)	8/28/06	50,000	50,000	$	1.00
		Junior secured loan ($2,000,000 par due 2/2013)	12.08% (Libor + 6.75%/S)	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%/S)	8/23/06	12,000,000	12,000,000	$	1.00	{3}
		Common units (1,709 units)		8/23/06	1,000,000	1,000,000	$	585.14	{5}
					110,950,444	107,949,549				9.85	%

Consumer Products - Non-Durable
Badanco Enterprises, Inc.	Luggage manufacturer	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 ($5,312,500 par due 1/2012)	9.86% (Libor + 4.50%/Q)	1/24/07	5,312,500	5,312,500	$	1.00	{3}

Innovative Brands, LLC	Consumer products and personal care manufacturer	Senior secured loan ($12,935,000 par due 9/2011)	11.13%	10/12/06	12,935,000	12,935,000	$	1.00
		Senior secured loan ($11,940,000 par due 9/2011)	11.13%	10/12/06	11,940,000	11,940,000	$	1.00	{3}