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 September 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, 22^nd 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 November 8, 2007
Common stock, $0.001 par value		72,684,090

ARES CAPITAL CORPORATION

INDEX

Part I.	Financial Information

Item 1.	Financial Statements.

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

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

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

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

	Consolidated Statement of Cash Flows for the nine months ended September 30, 2007 (unaudited) and September 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
	September 30, 2007			December 31, 2006
	(unaudited)
ASSETS

Investments at fair value (amortized cost of $1,616,635,547 and $1,245,758,040, respectively)
Non-control/non-affiliate investments	$	1,216,373,487		$	991,529,464
Non-control affiliated company investments	288,372,864			244,292,372
Control affiliated company investments	110,826,428			—
Total investments at fair value	1,615,572,779			1,235,821,836
Cash and cash equivalents	48,707,617			91,538,878
Receivable for open trades	142,155			1,026,053
Interest receivable	17,428,045			10,121,104
Other assets	8,487,911			9,483,083

Total assets	$	1,690,338,507		$	1,347,990,954

LIABILITIES

Debt	$	527,500,000		$	482,000,000
Payable for open trades	—			60,000,000
Accounts payable and accrued expenses	3,483,917			2,027,948
Management and incentive fees payable	12,124,595			12,485,016
Interest and facility fees payable	2,904,578			2,044,586
Total liabilities	546,013,090			558,557,550

Commitments and contingencies (Note 6)

STOCKHOLDERS' EQUITY

Common stock, par value $.001 per share, 100,000,000 common shares authorized, 72,684,090 and 52,036,527 common shares issued and outstanding, respectively	72,683			52,037
Capital in excess of par value	1,140,951,235			785,192,573
Accumulated undistributed net investment income	—			7,038,469
Accumulated net realized gains on sale of investments	4,364,267			7,086,529
Net unrealized depreciation on investments	(1,062,768		)	(9,936,204		)
Total stockholders’ equity	1,144,325,417			789,433,404

Total liabilities and stockholders’ equity	$	1,690,338,507		$	1,347,990,954

NET ASSETS PER SHARE	$	15.74		$	15.17

See accompanying notes to consolidated financial statements.

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

	For the Three			For the Three			For the Nine			For the Nine
	Months Ended			Months Ended			Months Ended			Months Ended
	September 30, 2007			September 30, 2006			September 30, 2007			September 30, 2006
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
INVESTMENT INCOME:
From non-control/non-affiliate company investments:
Interest from investments	$	35,827,080		$	22,894,133		$	99,972,569		$	58,682,492
Capital structuring service fees	578,147			3,888,145			6,845,104			10,304,843
Interest from cash & cash equivalents	790,522			938,670			2,282,478			1,369,847
Dividend income	634,816			—			1,384,816			1,170,000
Other income	218,131			154,962			724,812			441,972
Total investment income from non-control/non-affiliate company investments	38,048,696			27,875,910			111,209,779			71,969,154

From non-control affiliated company investments:
Interest from investments	5,669,413			3,611,098			13,315,182			8,848,228
Capital structuring service fees	—			200,000			2,635,000			1,383,810
Dividend income	388,885			121,074			891,590			121,074
Other income	228,490			23,712			762,500			190,584
Total investment income from non-control affiliated company investments	6,286,788			3,955,884			17,604,272			10,543,696

From control affiliated company investments:
Interest from investments	1,355,340			—			3,181,102			—
Capital structuring service fees	2,107,231			—			2,899,231			—
Dividend income	121,074			—			121,074			—
Other income	12,305			—			29,918			—
Total investment income from control affiliated company investments	3,595,950			—			6,231,325			—

Total investment income	47,931,434			31,831,794			135,045,376			82,512,850

EXPENSES:
Interest and credit facility fees	9,352,757			4,901,647			25,466,645			11,405,010
Base management fees	6,158,583			3,660,997			17,062,254			9,311,853
Incentive management fees	5,966,011			4,464,141			16,949,183			14,327,424
Professional fees	1,039,619			618,059			3,529,025			1,766,147
Insurance	270,180			205,670			801,035			592,202
Administrative	291,000			201,763			736,357			567,787
Depreciation	103,425			99,595			306,903			148,896
Directors fees	64,750			52,750			192,750			189,919
Interest to the Investment Adviser	—			—			—			25,879
Other	855,059			552,221			2,268,655			937,837
Total expenses	24,101,384			14,756,843			67,312,807			39,272,954

NET INVESTMENT INCOME BEFORE INCOME TAXES	23,830,050			17,074,951			67,732,569			43,239,896

Income tax expense (benefit), including excise tax	(78,788		)	(253,044		)	(112,069		)	4,927,471

NET INVESTMENT INCOME	23,908,838			17,327,995			67,844,638			38,312,425

REALIZED AND UNREALIZED NET GAINS ON INVESTMENTS:
Net realized gains (losses):
Net realized gains from non-control/non-affiliate company investments	7,398,059			1,611,935			(446,199		)	26,055,526
Net realized gains from non-control affiliated company investments	—			—			—			47,283
Net realized gains from control affiliated company investments	3,488,289			—			3,808,759			—
Net realized gains from investments	10,886,348			1,611,935			3,362,560			26,102,809

Net unrealized gains (losses):
Net unrealized gains (losses) from non-control/non-affiliate company investments	(2,852,640		)	(2,302,632		)	9,431,260			(14,797,305		)
Net unrealized gains (losses) from non-control affiliated company investments	(9,018,072		)	1,503,824			(7,968,317		)	(941,094		)
Net unrealized gains from control affiliated company investments	—			—			7,410,493			—
Net unrealized gains (losses) from investments	(11,870,712		)	(798,808		)	8,873,436			(15,738,399		)

Net realized and unrealized gains (losses) from investments	(984,364		)	813,127			12,235,996			10,364,410

NET INCREASE IN STOCKHOLDERS' EQUITY RESULTING FROM OPERATIONS	$	22,924,474		$	18,141,122		$	80,080,634		$	48,676,835

BASIC AND DILUTED EARNINGS PER COMMON SHARE (see Note 4)	$	0.32		$	0.39		$	1.25		$	1.19

WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING (see Note 4)	70,712,458			46,880,245			64,296,949			41,018,821

See accompanying notes to consolidated financial statements.

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of September 30, 2007

Company {1}	Industry	Investment	Interest {20}	Initial Acquisition Date	Amortized Cost		Fair Value		Fair Value Per Unit			Percentage of Net Assets

Healthcare - Services
American Renal Associates, Inc.	Dialysis provider	Senior secured loan ($2,131,147 par due 12/2010)	8.36% (Libor+ 3.25%/S)	12/14/05	$	2,131,147	$	2,131,147	$	1.00	{3}
		Senior secured loan ($5,770,492 par due 12/2011)	8.36% (Libor + 3.25%/S)	12/14/05	5,770,492		5,770,492		$	1.00	{3}
		Senior secured loan ($42,623 par due 12/2011)	9.50% (Base Rate + 1.75%/D)	12/14/05	42,623		42,623		$	1.00	{3}
		Senior secured loan ($393,741 par due 12/2011)	8.36% (Libor + 3.25%/Q)	12/14/05	393,741		393,741		$	1.00
		Senior secured loan ($261,997 par due 12/2011)	8.36% (Libor + 3.25%/Q)	12/14/05	261,997		261,997		$	1.00	{3}
		Senior secured loan ($196,721 par due 12/2010)	8.45% (Libor + 3.25%/Q)	12/14/05	196,721		196,721		$	1.00	{3}
		Senior secured loan ($196,721 par due 12/2010)	9.20% (Libor + 4.00%/Q)	12/14/05	196,721		196,721		$	1.00	{3}
		Senior secured loan ($3,937,406 par due 12/2011)	8.61% (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)	8.61% (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)	10.70% (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)	10.70% (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 ($810,000 par due 3/2012)	10.38% (Libor + 5.00%/S)	6/15/07	810,000		810,000		$	1.00
		Senior secured revolving loan ($810,000 par due 3/2012)	10.82% (Libor + 5.00%/M)	6/15/07	810,000		810,000		$	1.00
		Senior secured revolving loan ($810,000 par due 3/2012)	10.36% (Libor + 5.00%/Q)	6/15/07	810,000		810,000		$	1.00
		Senior secured loan ($20,333,333 par due 3/2012)	10.38% (Libor + 5.00%/S)	6/15/07	20,333,333		20,333,333		$	1.00
		Senior secured loan ($20,333,333 par due 3/2012)	10.82% (Libor + 5.00%/M)	6/15/07	20,333,333		20,333,333		$	1.00
		Senior secured loan ($20,333,333 par due 3/2012)	10.36% (Libor + 5.00%/Q)	6/15/07	20,333,333		20,333,333		$	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}
		Common stock (1,546 shares)		6/15/07	—		—		$	—	{5}

DSI Renal, Inc.	Dialysis provider	Senior subordinated note ($70,971,360 par due 4/2014)	12.00% Cash, 2.00% PIK	4/4/06	70,588,540		70,971,360		$	1.00	{4}
		Senior subordinated note ($11,459,476 par due 4/2014)	12.00% Cash, 2.00% PIK	4/4/06	11,459,476		11,459,476		$	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		3,158,400		$	0.99
		Senior secured revolving loan ($1,600,000 par due 3/2013)	8.63% (Libor + 3.00%/Q)	4/4/06	1,600,000		1,579,200		$	0.99
		Senior secured revolving loan ($800,000 par due 3/2013)	8.56% (Libor + 3.00%/Q)	4/4/06	800,000		789,600		$	0.99
		Senior secured revolving loan ($800,000 par due 3/2013)	8.56% (Libor + 3.00%/M)	4/4/06	800,000		789,600		$	0.99
		Senior secured revolving loan ($267,200 par due 3/2013)	10.25% (Base Rate + 2.50%/D)	4/4/06	267,200		263,726		$	0.99

MPBP Holdings, Inc., Cohr Holdings, Inc.	Healthcare equipment services	Junior secured loan ($20,000,000 par due 1/2014)	11.53% (Libor + 6.25%/S)	1/31/07	20,000,000		20,000,000		$	1.00
and MPBP Acquisition Co., Inc.		Junior secured loan ($12,000,000 par due 1/2014)	11.53% (Libor + 6.25%/S)	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 ($4,974,519 par due 5/2013)	8.57% (Libor + 3.25%/S)	5/3/07	4,962,083		4,962,083		$	1.00
		Senior secured loan ($12,740 par due 5/2013)	8.61% (Libor + 3.25%/Q)	5/3/07	12,709		12,709		$	1.00
		Junior secured loan ($5,000,000 par due 5/2012)	11.57% (Libor + 6.25%/S)	5/3/07	5,000,000		5,000,000		$	1.00

OnCURE Medical Corp.	Radiation oncology care provider	Senior subordinated note ($25,956,654 par due 8/2013)	11.00% Cash, 1.50% PIK	8/18/06	25,956,654		25,956,654		$	1.00	{4}
		Senior secured loan ($1,416,690 par due 8/2008)	9.25% (Libor + 3.50%/Q)	8/23/06	1,416,690		1,416,690		$	1.00
		Senior secured loan ($3,248,438 par due 8/2011)	9.25% (Libor + 3.50%/Q)	8/23/06	3,248,438		3,248,438		$	1.00
		Common stock (857,143 shares)		8/18/06	3,000,000		3,000,000		$	3.50	{5}

Triad Laboratory Alliance, LLC	Laboratory services	Senior subordinated note ($15,026,980 par due 12/2012)	12.00% cash, 1.75% PIK	12/21/05	15,026,980		15,026,980		$	1.00	{4}
		Senior secured loan ($6,877,500 par due 12/2011)	8.45% (Libor + 3.25%/Q)	12/21/05	6,877,500		6,877,500		$	1.00
		Senior secured loan ($2,947,500 par due 12/2011)	8.45% (Libor + 3.25%/Q)	12/21/05	2,947,500		2,947,500		$	1.00	{3}
					332,144,588		332,440,734					29.13	%

Education
ELC Acquisition Corporation	Developer, manufacturer and retailer of educational products	Senior secured loan ($2,707,304 par due 11/2012)	9.18% (Libor + 3.75%/S)	11/30/06	2,707,304		2,707,304		$	1.00
		Junior secured loan ($8,333,333 par due 11/2013)	12.50% (Libor + 7.00%/M)	11/30/06	8,333,333		8,333,333		$	1.00	{3}
		Senior secured loan ($355,268 par due 11/2012)	9.18% (Libor + 3.75%/S)	11/30/06	355,268		355,268		$	1.00	{3}

Equinox EIC Partners, LLC and	Medical school operator	Senior secured revolving loan ($5,000,000 par due 12/2012)	11.36% (Libor + 6.00%/Q)	4/3/07	5,000,000		5,000,000		$	1.00
MUA Management Company, Ltd. {1}, {9}		Senior secured revolving loan ($988,503 par due 12/2012)	13.25% (Base Rate + 5.00%/D)	4/3/07	988,503		988,503		$	1.00

		Senior secured revolving loan ($2,000,000 par due 12/2012)	11.33% (Libor + 6.00%/Q)	4/3/07	2,000,000	2,000,000	$	1.00
		Senior secured loan ($7,700,000 par due 12/2012)	11.20% (Libor + 6.00%/Q)	4/3/07	7,700,000	7,700,000	$	1.00
		Senior secured loan ($30,500,000 par due 12/2012)	11.11% (Libor + 6.00%/S)	9/21/07	30,500,000	30,500,000	$	1.00
		Senior secured loan ($7,375,000 par due 12/2012)	11.36% (Libor + 6.00%/Q)	4/3/07	7,375,000	7,375,000	$	1.00	{3}
		Senior secured loan ($100,000 par due 12/2012)	12.75% (Base Rate + 5.00%/Q)	4/3/07	100,000	100,000	$	1.00	{3}
		Common membership units (26.27% interest)		9/21/07	15,500,000	15,500,000			{5}

Instituto de Banca y Comercio, Inc. {18}	Private school operator	Senior secured revolving loan ($1,500,000 par due 3/2014)	8.13% (Libor + 3.00%/M)	3/15/07	1,500,000	1,500,000	$	1.00
		Senior secured loan ($24,438,750 par due 3/2014)	10.36% (Libor + 5.00%/Q)	3/15/07	24,438,750	24,438,750	$	1.00
		Senior secured loan ($11,970,000 par due 3/2014)	10.36% (Libor + 5.00%/Q)	3/15/07	11,970,000	11,970,000	$	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}
					151,468,158	151,468,158				13.27	%

Printing, Publishing and Media
Canon Communications LLC	Print publications services	Junior secured loan ($7,525,000 par due 11/2011)	11.88% (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)	11.88% (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)	11.88% (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 ($31,150,000 par due 6/2014)	15.00% PIK	6/29/07	31,150,000	31,150,000	$	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	11,067,442	10,355,330	$	1.00
		Senior secured loan ($11,695,431 par due 5/2009)	10.38% (Libor + 5.00%/S)	5/25/06	12,499,698	11,695,431	$	1.00	{3}
		Senior secured loan ($152,267 par due 5/2009)	10.38% (Libor + 5.00%/S)	5/25/06	162,738	152,267	$	1.00
		Senior secured loan ($171,972 par due 5/2009)	10.38% (Libor + 5.00%/S)	5/25/06	183,798	171,972	$	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 ($827,524 par due 3/2012)	10.75% (Base Rate + 2.50%/D)	3/2/06	827,524	827,524	$	1.00
		Senior secured revolving loan ($913,043 par due 3/2012)	9.22% (Libor + 3.50%/M)	3/2/06	913,043	913,043	$	1.00
		Senior secured loan ($4,911,854 par due 3/2012)	8.70% (Libor + 3.50%/Q)	3/2/06	4,911,854	4,911,854	$	1.00	{3}
		Senior secured loan ($239,674 par due 3/2012)	10.25% (Base Rate + 2.50%/D)	3/2/06	239,674	239,674	$	1.00	{3}
		Senior secured loan ($5,110,685 par due 3/2012)	9.04% (Libor + 3.50%/Q)	3/2/06	5,110,685	5,110,685	$	1.00	{3}
		Senior secured loan ($2,244,052 par due 8/2012)	12.34% (Libor + 7.00%/B)	3/2/06	2,244,052	2,244,052	$	1.00
		Senior secured loan ($406,132 par due 8/2012)	12.34% (Libor + 7.00%/B)	3/2/06	406,132	406,132	$	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	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
The Teaching Company Holdings, Inc. {21}		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}
					145,774,246	147,835,569				12.95	%

Financial
Abingdon Investments Limited {13} {18} {19}	Investment company	Ordinary shares (948,500 shares)		12/15/06	9,032,978	8,195,040	$	8.64	{5}

Firstlight Financial Corporation {14} {19}	Investment company	Senior subordinated loan ($63,313,824 par due 12/2016)	10.00% PIK	12/31/06	63,313,824	63,313,824	$	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 {19}	Investment banking services	Common units (7,710 shares)		5/10/07	14,997,159	14,997,159	$	1,945.16	{5}
		Common units (2,526 shares)		5/10/07	2,526	2,526	$	1.00	{5}
		Common units (315 shares)		5/10/07	315	315	$	1.00	{5}

Partnership Capital Growth Fund I, L.P. {19}	Investment partnership	Limited partnership interest (25% interest)		6/16/06	1,317,082	1,317,082			{5}
					128,663,884	127,825,946				11.20	%

Retail
Apogee Retail, LLC	For-profit thrift retailer	Senior secured loan ($19,397,033 par due 3/2012)	10.39% (Libor + 5.25%/S)	3/27/07	19,397,033	19,397,033	$	1.00
		Senior secured loan ($19,900,000 par due 3/2012)	10.39% (Libor + 5.25%/S)	3/27/07	19,900,000	19,900,000	$	1.00	{2}
		Senior secured loan ($11,940,000 par due 3/2012)	10.39% (Libor + 5.25%/S)	3/27/07	11,940,000	11,940,000	$	1.00	{3}

Savers, Inc. and SAI Acquisition Corporation	For-profit thrift retailer	Senior subordinated note ($28,416,285 par due 8/2014)	10.00% cash, 2.00% PIK	8/8/06	28,416,285	28,416,285	$	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 ($4,752,000 par due 9/2012)	10.25% (Libor + 4.75%/Q)	9/28/06	4,752,000	4,752,000	$	1.00	{3}
		Senior secured loan ($14,000,000 par due 9/2012)	11.50% (Libor + 6.00%/M)	9/28/06	14,000,000	14,000,000	$	1.00	{2}
		Senior secured loan ($14,000,000 par due 9/2012)	11.50% (Libor + 6.00%/M)	9/28/06	14,000,000	14,000,000	$	1.00
		Senior secured loan ($7,200,000 par due 9/2012)	11.50% (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}
					126,105,318	126,105,318				11.05	%

Services - Other
American Residential Services, LLC	Plumbing, heating and air-conditioning services	Junior secured loan ($10,050,555 par due 4/2015)	10.00% Cash, 2.00% PIK	4/17/07	10,050,555	10,050,555	$	1.00	{4}

Diversified Collection Services, Inc.	Collections services	Senior secured loan ($5,011,838 par due 2/2011)	10.88% (Libor + 5.00%/M)	2/2/05	5,011,838	4,360,299	$	0.87	{3}
		Senior secured loan ($1,742,026 par due 8/2011)	14.07% (Libor + 8.50%/M)	2/2/05	1,742,026	1,358,781	$	0.78	{2}
		Senior secured loan ($6,757,974 par due 8/2011)	14.07% (Libor + 8.50%/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 revolving loan ($762,500 par due 8/2011)	9.25% (Base Rate + 1.50%/D)	3/16/07	762,500	762,500	$	1.00
		Senior secured revolving loan ($500,000 par due 8/2011)	8.36% (Libor + 3.00%/B)	3/16/07	500,000	500,000	$	1.00
		Senior secured loan ($366,950 par due 8/2011)	9.01% (Libor + 3.50%/Q)	3/16/07	366,950	366,950	$	1.00
		Senior secured loan ($9,645,550 par due 8/2011)	9.01% (Libor + 3.50%/Q)	3/16/07	9,645,550	9,645,550	$	1.00	{3}
		Senior secured loan ($70,550 par due 8/2011)	9.15% (Libor + 3.50%/Q)	3/16/07	70,550	70,550	$	1.00
		Senior secured loan ($1,854,450 par due 8/2011)	9.15% (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)	11.65% (Libor + 6.00%/Q)	3/16/07	3,575,000	3,575,000	$	1.00
		Senior secured loan ($35,814 par due 8/2011)	11.65% (Libor + 6.00%/Q)	3/16/07	35,814