Table of Contents

 

 

 

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, 2008

 

 

 

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, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer x

Non-accelerated filer o

Accelerated filer o

Smaller reporting company o

 

(Do not check if a smaller reporting company)

 

 

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 6, 2008

Common stock, $0.001 par value

 

97,152,820

 

 

 



Table of Contents

 

ARES CAPITAL CORPORATION

 

INDEX

 

Part I.

Financial Information

 

 

 

 

Item 1.

Financial Statements.

 

 

 

 

 

Consolidated Balance Sheet as of September 30, 2008 (unaudited) and December 31, 2007

1

 

 

 

 

Consolidated Statement of Operations for the three and nine months ended September 30, 2008 (unaudited) and September 30, 2007 (unaudited)

2

 

 

 

 

Consolidated Schedule of Investments as of September 30, 2008 (unaudited) and December 31, 2007

3

 

 

 

 

Consolidated Statement of Stockholders’ Equity for the nine months ended September 30, 2008 (unaudited)

32

 

 

 

 

Consolidated Statement of Cash Flows for the nine months ended September 30, 2008 (unaudited) and September 30, 2007 (unaudited)

33

 

 

 

 

Notes to Consolidated Financial Statements (unaudited)

34

 

 

 

Item 2.

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

49

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

57

 

 

 

Item 4.

Controls and Procedures.

58

 

 

 

Part II.

Other Information

 

 

 

 

Item 1.

Legal Proceedings.

59

 

 

 

Item 1A.

Risk Factors.

59

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

60

 

 

 

Item 3.

Defaults Upon Senior Securities.

60

 

 

 

Item 4.

Submission of Matters to a Vote of Security Holders.

61

 

 

 

Item 5.

Other Information.

61

 

 

 

Item 6.

Exhibits.

62

 



Table of Contents

 

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(dollar amounts in thousands, except per share data)

 

 

 

As of

 

 

 

September 30, 2008

 

December 31, 2007

 

 

 

(unaudited)

 

 

 

ASSETS

 

 

 

 

 

Investments at fair value (amortized cost of $2,244,617 and $1,795,621, respectively)

 

 

 

 

 

Non-controlled/non-affiliate company investments

 

$

1,555,169

 

$

1,167,200

 

Non-controlled affiliate company investments

 

348,062

 

430,371

 

Controlled affiliate company investments

 

190,463

 

176,631

 

Total investments at fair value

 

2,093,694

 

1,774,202

 

Cash and cash equivalents

 

61,409

 

21,142

 

Receivable for open trades

 

2,103

 

1,343

 

Interest receivable

 

15,069

 

23,730

 

Other assets

 

12,235

 

8,988

 

Total assets

 

$

2,184,510

 

$

1,829,405

 

LIABILITIES

 

 

 

 

 

Debt

 

$

902,152

 

$

681,528

 

Accounts payable and accrued expenses

 

7,164

 

5,516

 

Management and incentive fees payable

 

25,183

 

13,041

 

Interest and facility fees payable

 

3,829

 

4,769

 

Total liabilities

 

 

938,328

 

 

704,854

 

Commitments and contingencies (Note 6)

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

Common stock, par value $.001 per share, 200,000,000 and 100,000,000 common shares authorized, respectively, 97,152,820 and 72,684,090 common shares issued and outstanding, respectively

 

97

 

73

 

Capital in excess of par value

 

1,399,298

 

1,136,599

 

Accumulated undistributed net investment income

 

(4,011

)

7,005

 

Accumulated undistributed net realized gain on sale of investments and foreign currencies

 

 

1,471

 

Net unrealized loss on investments and foreign currencies

 

(149,202

)

(20,597

)

Total stockholders’ equity

 

1,246,182

 

1,124,551

 

Total liabilities and stockholders’ equity

 

$

2,184,510

 

$

1,829,405

 

NET ASSETS PER SHARE

 

$

12.83

 

$

15.47

 

 

See accompanying notes to consolidated financial statements.

 

1



Table of Contents

 

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(dollar amounts in thousands, except per share data)

 

 

 

For the three months ended

 

For the nine months ended

 

 

 

September 30, 2008

 

September 30, 2007

 

September 30, 2008

 

September 30, 2007

 

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

INVESTMENT INCOME:

 

 

 

 

 

 

 

 

 

From non-controlled/non-affiliate company investments:

 

 

 

 

 

 

 

 

 

Interest from investments

 

$

45,425

 

$

35,827

 

$

118,112

 

$

99,973

 

Capital structuring service fees

 

3,029

 

578

 

14,175

 

6,845

 

Interest from cash & cash equivalents

 

325

 

791

 

1,314

 

2,282

 

Dividend income

 

375

 

635

 

1,246

 

1,385

 

Management fees

 

 

 

 

 

Other income

 

599

 

218

 

2,007

 

725

 

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

 

49,753

 

38,049

 

136,854

 

111,210

 

 

 

 

 

 

 

 

 

 

 

From non-controlled affiliate company investments:

 

 

 

 

 

 

 

 

 

Interest from investments

 

7,924

 

5,669

 

24,668

 

13,315

 

Capital structuring service fees

 

281

 

 

1,376

 

2,635

 

Dividend income

 

256

 

389

 

522

 

892

 

Management fees

 

188

 

188

 

564

 

564

 

Other income

 

136

 

41

 

379

 

198

 

Total investment income from non-controlled affiliate company investments

 

8,785

 

6,287

 

27,509

 

17,604

 

 

 

 

 

 

 

 

 

 

 

From controlled affiliate company investments:

 

 

 

 

 

 

 

 

 

Interest from investments

 

2,946

 

1,355

 

9,126

 

3,181

 

Capital structuring service fees

 

 

2,107

 

3,000

 

2,899

 

Dividend income

 

133

 

121

 

133

 

121

 

Management fees

 

437

 

 

1,068

 

 

Other income

 

13

 

12

 

48

 

30

 

Total investment income from controlled affiliate company investments

 

3,529

 

3,595

 

13,375

 

6,231

 

 

 

 

 

 

 

 

 

 

 

Total investment income

 

62,067

 

47,931

 

177,738

 

135,045

 

 

 

 

 

 

 

 

 

 

 

EXPENSES:

 

 

 

 

 

 

 

 

 

Interest and credit facility fees

 

9,535

 

9,353

 

26,613

 

25,467

 

Base management fees

 

7,963

 

6,159

 

22,729

 

17,062

 

Incentive management fees

 

8,205

 

5,966

 

23,713

 

16,949

 

Professional fees

 

1,499

 

1,040

 

4,370

 

3,529

 

Insurance

 

301

 

270

 

927

 

801

 

Administrative

 

802

 

291

 

1,702

 

736

 

Depreciation

 

134

 

103

 

338

 

307

 

Directors fees

 

57

 

65

 

197

 

193

 

Other

 

869

 

854

 

2,597

 

2,268

 

Total expenses

 

29,365

 

24,101

 

83,186

 

67,312

 

 

 

 

 

 

 

 

 

 

 

NET INVESTMENT INCOME BEFORE INCOME TAXES

 

32,702

 

23,830

 

94,552

 

67,733

 

 

 

 

 

 

 

 

 

 

 

Income tax expense (benefit), including excise tax

 

(118

)

(79

)

(302

)

(112

)

 

 

 

 

 

 

 

 

 

 

NET INVESTMENT INCOME

 

32,820

 

23,909

 

94,854

 

67,845

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Net realized gains (losses):

 

 

 

 

 

 

 

 

 

Non-controlled/non-affiliate company investments

 

2,018

 

7,398

 

2,235

 

(446

)

Non-controlled affiliate company investments

 

2,600

 

 

2,601

 

 

Controlled affiliate company investments

 

 

3,488

 

 

3,809

 

Foreign currency transactions

 

(38

)

 

(40

)

 

Net realized gains (losses)

 

4,580

 

10,886

 

4,796

 

3,363

 

 

 

 

 

 

 

 

 

 

 

Net unrealized gains (losses):

 

 

 

 

 

 

 

 

 

Non-controlled/non-affiliate company investments

 

(52,689

)

(2,853

)

(81,283

)

9,431

 

Non-controlled affiliate company investments

 

(21,354

)

(9,018

)

(45,212

)

(7,968

)

Controlled affiliate company investments

 

(4,750

)

 

(2,117

)

7,410

 

Foreign currency transactions

 

 

 

7

 

 

Net unrealized gains (losses)

 

(78,793

)

(11,871

)

(128,605

)

8,873

 

 

 

 

 

 

 

 

 

 

 

Net realized and unrealized gains (losses) from investments and foreign currency transactions

 

(74,213

)

(985

)

(123,809

)

12,236

 

 

 

 

 

 

 

 

 

 

 

NET INCREASE (DECREASE) IN STOCKHOLDERS’ EQUITY RESULTING FROM OPERATIONS

 

$

(41,393

)

$

22,924

 

$

(28,955

)

$

80,081

 

 

 

 

 

 

 

 

 

 

 

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

 

$

(0.43

)

$

0.32

 

$

(0.33

)

$

1.22

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING – BASIC AND DILUTED (see Note 4)

 

97,152,820

 

72,059,957

 

87,152,501

 

65,522,194

 

 

See accompanying notes to consolidated financial statements.

 

2



Table of Contents

 

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of September 30, 2008 (unaudited)

(dollar amounts in thousands, except per unit data)

 

Company (1)

 

Industry

 

Investment

 

Interest (10)

 

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 ($1,607 par due 12/2010)

 

6.73% (Libor+ 3.25%/Q)

 

12/14/05

 

$

1,607

 

$

1,607

 

$

1.00

(3)

 

 

 

 

 

 

Senior secured loan ($197 par due 12/2010)

 

6.75% (Base Rate + 1.75%/D)

 

12/14/05

 

197

 

197

 

$

1.00

(3)

 

 

 

 

 

 

Senior secured loan ($5,738 par due 12/2011)

 

6.73% (Libor+ 3.25%/Q)

 

12/14/05

 

5,738

 

5,738

 

$

1.00

(3)

 

 

 

 

 

 

Senior secured loan ($16 par due 12/2011)

 

6.75% (Base Rate + 1.75%/D)

 

12/14/05

 

16

 

16

 

$

1.00

(3)

 

 

 

 

 

 

Senior secured loan ($262 par due 12/2011)

 

6.73% (Libor+ 3.25%/Q)

 

12/14/05

 

262

 

262

 

$

1.00

(3)

 

 

 

 

 

 

Senior secured loan ($2,620 par due 12/2011)

 

6.03% (Libor + 3.25% /Q)

 

12/14/05

 

2,620

 

2,620

 

$

1.00

(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capella Healthcare, Inc.

 

Acute care hospital operator

 

Junior secured loan ($65,000 par due 2/2016)

 

13.00%

 

2/29/08

 

65,000

 

61,750

 

$

0.95

 

 

 

 

 

 

 

Junior secured loan ($30,000 par due 2/2016)

 

13.00%

 

2/29/08

 

30,000

 

28,500

 

$

0.95

(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CT Technologies Intermediate Holdings, Inc. and CT Technologies Holdings, LLC (6)

 

Healthcare analysis

services

 

Preferred stock (7,170 shares)

 

14.00% PIK

 

6/15/07

 

7,170

 

7,170

 

$

1,000.00

(4)

 

 

 

 

 

 

Common stock (9,679 shares)

 

 

 

6/15/07

 

4,000

 

5,383

 

$

556.10

(5)

 

 

 

 

 

 

Common stock (1,546 shares)

 

 

 

6/15/07

 

 

 

$

(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DSI Renal, Inc.

 

Dialysis provider

 

Senior subordinated note ($28,427 par due 4/2014)

 

12.00% Cash, 2.00% PIK

 

4/4/06

 

28,516

 

24,135

 

$

0.85

(4)

 

 

 

 

 

 

Senior subordinated note ($26,251 par due 4/2014)

 

12.00% Cash, 2.00% PIK

 

4/4/06

 

26,252

 

22,329

 

$

0.85

(2)(4)

 

 

 

 

 

 

Senior subordinated note ($11,751 par due 4/2014)

 

12.00% Cash, 2.00% PIK

 

4/4/06

 

11,751

 

9,988

 

$

0.85

(3)(4)

 

 

 

 

 

 

Senior secured revolving loan ($122 par due 3/2013)

 

8.00% (Base Rate + 3.00%/D)

 

4/4/06

 

122

 

109

 

$

0.90

 

 

 

 

3



Table of Contents

 

 

 

 

 

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

 

5.81% (Libor + 3.00%/Q)

 

4/4/06

 

1,600

 

1,440

 

$

0.90

 

 

 

 

 

 

 

Senior secured revolving loan ($1,920 par due 3/2013)

 

5.81% (Libor + 3.00%/Q)

 

4/4/06

 

1,920

 

1,728

 

$

0.90

 

 

 

 

 

 

 

Senior secured revolving loan ($1,120 par due 3/2013)

 

6.25% (Libor + 3.00%/Q)

 

4/4/06

 

1,120

 

1,008

 

$

0.90

 

 

 

 

 

 

 

Senior secured revolving loan ($1,152 par due 3/2013)

 

5.80% (Libor + 3.00%/Q)

 

4/4/06

 

1,152

 

1,037

 

$

0.90

 

 

 

 

 

 

 

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

 

6.81% (Libor + 3.00%/Q)

 

4/4/06

 

1,600

 

1,440

 

$

0.90

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GG Merger Sub I, Inc.

 

Drug testing services

 

Senior secured loan ($23,330 par due 12/2014)

 

8.36% (Libor + 4.00%/S)

 

12/14/07

 

22,390

 

21,930

 

 0.94

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HCP Acquisition Holdings, LLC (7)

 

Healthcare compliance advisory services

 

Class A units (8,567,000 units)

 

 

 

6/26/08

 

8,567

 

8,567

 

$

1.00

(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Heartland Dental Care, Inc.

 

Dental services

 

Senior subordinated note ($40,217 par due 8/2013)

 

11.00% Cash, 3.25% PIK

 

7/31/08

 

40,217

 

40,217

 

$

1.00

(4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Healthcare equipment services

 

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

 

9.19% (Libor + 6.25%/S)

 

1/31/07

 

20,000

 

10,000

 

$

0.50

 

 

 

 

 

 

 

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

 

9.19% (Libor + 6.25%/S)

 

1/31/07

 

12,000

 

6,000

 

$

0.50

(3)

 

 

 

 

 

 

Common stock (50,000 shares)

 

 

 

1/31/07

 

5,000

 

 

$

(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MWD Acquisition Sub, Inc.

 

Dental services

 

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

 

9.13% (Libor + 6.25%/S)

 

5/3/07

 

5,000

 

4,500

 

$

0.90

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OnCURE Medical Corp.

 

Radiation oncology care provider

 

Senior subordinated note ($32,053 par due 8/2013)

 

11.00% Cash, 1.50% PIK

 

8/18/06

 

32,053

 

30,426

 

$

0.95

(4)

 

 

 

 

 

 

Senior secured loan ($3,083 par due 8/2009)

 

6.00% (Libor + 3.50%/M)

 

8/18/06

 

3,083

 

2,867

 

$

0.93

 

 

 

 

 

 

 

Common stock (857,143 shares)

 

 

 

8/18/06

 

3,000

 

3,000

 

$

3.50

(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Passport Health Communications, Inc., Passport Holding Corp. and Prism Holding Corp.

 

Healthcare technology provider

 

Senior secured loan ($15,000 par due 5/2014)

 

10.50% (Libor + 7.50%/S)

 

5/9/08

 

15,000

 

15,000

 

$

1.00

 

 

 

 

4



Table of Contents

 

 

 

 

 

Senior secured loan ($10,000 par due 5/2014)

 

10.50% (Libor + 7.50%/S)

 

5/9/08

 

10,000

 

10,000

 

$

1.00

(3)

 

 

 

 

 

 

Series A Preferred stock (1,594,457 shares)

 

 

 

7/30/08

 

9,900

 

9,900

 

$

6.21

(5)

 

 

 

 

 

 

Common stock (16,106 shares)

 

 

 

7/30/08

 

100

 

100

 

$

6.21

(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PG Mergersub, Inc.

 

Provider of patient surveys, management reports and national databases for the integrated healthcare delivery system

 

Senior subordinated loan ($5,000 par due 3/2016)

 

12.50%

 

3/12/08

 

4,900

 

4,900

 

$

0.98

 

 

 

 

 

 

 

Preferred stock (333 shares)

 

 

 

3/12/08

 

333

 

333

 

$

1,000.00

(5)

 

 

 

 

 

 

Common stock (16,667 shares)

 

 

 

3/12/08

 

167

 

167

 

$

10.00

(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Schumacher Group of Delaware, Inc.

 

Outsourced physician service provider

 

Senior subordinated loan ($35,000 par due 7/2012)

 

11.00% Cash, 2.50% PIK

 

7/18/08

 

35,000

 

35,000

 

$

1.00

(4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Triad Laboratory Alliance, LLC

 

Laboratory services

 

Senior subordinated note ($15,288 par due 12/2012)

 

12.00% cash, 1.75% PIK

 

12/21/05

 

15,288

 

15,288

 

$

1.00

(4)

 

 

 

 

 

 

Senior secured loan ($2,479 par due 12/2011)

 

7.01% (Libor + 3.25%/Q)

 

12/21/05

 

2,478

 

2,206

 

$

0.89

(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VOTC Acquisition Corp.

 

Provider of expert cancer care and treatment

 

Senior secured loan ($2,982 par due 7/2012)

 

11.00% Cash, 2.00% PIK

 

6/30/08

 

2,982

 

2,982

 

$

1.00

(4)

 

 

 

 

 

 

Senior secured loan ($14,000 par due 7/2012)

 

11.00% Cash, 2.00% PIK

 

6/30/08

 

14,000

 

14,000

 

$

1.00

(4)

 

 

 

 

 

 

Series E preferred shares (3,888,222 shares)

 

 

 

7/14/08

 

8,749

 

8,749

 

$

2.25

(5)

 

 

 

 

 

 

 

 

 

 

 

 

460,850

 

422,589

 

 

 

33.91%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beverage, Food and Tobacco

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3091779 Nova Scotia Inc.

 

Baked goods manufacturer

 

Junior secured loan (Cdn$14,000 par due 11/2012)

 

11.50% Cash, 1.50% PIK

 

11/2/07

 

14,850

 

12,494

 

$

0.95

(4)(12)

 

 

 

 

 

 

Warrants to purchase 57,545 shares

 

 

 

 

 

 

 

$

(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Apple & Eve, LLC and US Juice Partners, LLC (6)

 

Juice manufacturer

 

Senior secured revolving loan ($2,000 par due 10/2013)

 

9.73% (Libor + 6.00%/B)

 

10/5/07

 

2,000

 

1,800

 

$

0.90

 

 

 

 

 

 

 

Senior secured revolving loan ($500 par due 10/2013)

 

8.49% (Libor + 6.00%/M)

 

10/5/07

 

500

 

450

 

$

0.90

 

 

 

 

5



Table of Contents

 

 

 

 

 

Senior secured revolving loan ($1,000 par due 10/2013)

 

8.49% (Libor + 6.00%/M)

 

10/5/07

 

1,000

 

900

 

$

0.90

 

 

 

 

 

 

 

Senior secured loan ($10,979 par due 10/2013)

 

9.05% (Libor + 6.00%/S)

 

10/5/07

 

10,979

 

9,881

 

$

0.90

 

 

 

 

 

 

 

Senior secured loan (716 par due 10/2013)

 

8.80% (Libor + 6.00%/M)

 

10/5/07

 

716

 

644

 

$

0.90

 

 

 

 

 

 

 

Senior secured loan ($21,695 par due 10/2013)

 

9.05% (Libor + 6.00%/S)

 

10/5/07

 

21,965

 

19,768

 

$

0.90

(2)

 

 

 

 

 

 

Senior secured loan ($11,880 par due 10/2013)

 

9.05% (Libor + 6.00%/S)

 

10/5/07

 

11,880

 

10,692

 

$

0.90

(3)

 

 

 

 

 

 

Senior units (50,000 units)

 

 

 

10/5/07

 

5,000

 

4,000

 

$

80.00

(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Best Brands Corporation

 

Baked goods manufacturer

 

Senior secured loan ($6,972 par due 12/2012)

 

11.49% (Libor + 4.50% Cash + 4.50% PIK/M)

 

2/15/2008

 

6,972

 

6,474

 

$

0.85

(4)

 

 

 

 

 

 

Junior secured loan ($1,044 par due 6/2013)

 

10.00% Cash, 8.00% PIK

 

12/14/06

 

1,044

 

888

 

$

0.85

(4)

 

 

 

 

 

 

Junior secured loan ($28,716 par due 6/2013)

 

10.00% Cash, 8.00% PIK

 

12/14/06

 

28,716

 

24,406

 

$

0.85

(2)(4)

 

 

 

 

 

 

Junior secured loan ($11,845 par due 6/2013)

 

10.00% Cash, 8.00% PIK

 

12/14/06

 

11,845

 

10,068

 

$

0.85

(3)(4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charter Baking Company, Inc.

 

Baked goods manufacturer

 

Senior subordinated note ($5,388 par due 2/2013)

 

12.00% PIK

 

2/6/08

 

5,388

 

5,388

 

$

1.03

(2)(4)

 

 

 

 

 

 

Preferred stock (6,258 shares)

 

 

 

9/1/06

 

2,500

 

2,500

 

$

399.48

(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTG Management, Inc.

 

Airport restaurant operator

 

Junior secured loan ($10,252 par due 6/2013)

 

18.00% (Libor + 11.00% Cash, 4.00% PIK/Q)

 

6/19/08

 

10,252

 

10,252

 

$

1.00

(4)

 

 

 

 

 

 

Junior secured loan ($4,905 par due 6/2013)

 

18.00% (Libor + 11.00% Cash, 4.00% PIK/Q)

 

6/19/08

 

4,905

 

4,905

 

$

1.00

(4)

 

 

 

 

 

 

Warrants to purchase up to 9 shares of common stock

 

 

 

 

 

 

 

$

(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vistar Corporation and Wellspring Distribution Corp.

 

Foodservice distributor

 

Senior subordinated loan ($73,625 par due 5/2015)

 

13.50%

 

5/23/08

 

73,625

 

73,625

 

$

1.00

 

 

 

 

 

 

 

Class A non-voting common stock (1,366,120 shares)

 

 

 

5/23/08

 

7,500

 

7,500

 

$

1.00

(5)

 

 

 

 

 

 

 

 

 

 

 

 

221,637

 

206,635

 

 

 

16.58%

 

 

6



Table of Contents

 

Education

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Campus Management Corp. and Campus

 

Education software developer

 

Senior secured revolving loan ($700 par due 8/2013)

 

11.00%

 

2/8/08

 

700

 

700

 

$

1.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management  Acquisition Corp. (6)

 

 

 

Senior secured loan ($19,810 par due 8/2013)

 

11.00%

 

2/8/08

 

19,810

 

19,810

 

$

1.00

 

 

 

 

 

 

 

Senior secured loan ($24,965 par due 8/2013)

 

11.00%

 

2/8/08

 

24,965

 

24,965

 

$

1.00

(2)

 

 

 

 

 

 

Preferred stock (431,408 shares)

 

8.00% PIK

 

2/8/08

 

7,831

 

7,831

 

$

18.15

(4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ELC Acquisition Corporation

 

Developer, manufacturer and retailer of educational products

 

Senior secured loan ($263 par due 11/2012)

 

6.06% (Libor + 3.25%/Q)

 

11/30/06

 

263

 

263

 

$

1.00

(3)

 

 

 

 

 

 

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

 

10.21% (Libor + 7.00%/Q)

 

11/30/06

 

8,333

 

8,333

 

$

1.00

(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Instituto de Banca y Comercio, Inc. (8)

 

Private school operator

 

Senior secured loan ($7,500 par due 3/2014)

 

7.80% (Libor + 5.00%/Q)

 

3/15/07

 

7,500

 

7,500

 

$

1.00

 

 

 

 

 

 

 

Senior secured loan ($7,284 par due 3/2014)

 

7.80% (Libor + 5.00%/Q)

 

3/15/07

 

7,284

 

7,284

 

$

1.00

 

 

 

 

 

 

 

Senior secured loan ($5,000 par due 3/2014)

 

7.80% (Libor + 5.00%/Q)

 

3/15/07

 

5,000

 

5,000

 

$

1.00

(2)

 

 

 

 

 

 

Senior secured loan ($11,850 par due 3/2014)

 

7.80% (Libor + 5.00%/Q)

 

3/15/07

 

11,850

 

11,850

 

$

1.00

(3)

 

 

 

 

 

 

Senior subordinated loan ($19,471 par due 6/2014)

 

10.50% Cash, 3.50% PIK

 

6/4/08

 

19,470

 

19,470

 

$

1.00

(4)

 

 

 

 

 

 

Promissory note ($429 par due 9/2015)

 

6.00%

 

6/4/08

 

429

 

1,206

 

$

2.81

 

 

 

 

 

 

 

Preferred stock (214,286 shares)

 

 

 

6/4/08

 

1,018

 

2,864

 

$

13.36

(5)

 

 

 

 

 

 

Common stock (214,286 shares)

 

 

 

6/4/08

 

54

 

151

 

$

0.70

(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lakeland Finance, LLC

 

Private school operator

 

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

 

11.50%

 

12/13/05

 

18,000

 

18,000

 

$

  1.00

 

 

 

 

 

 

 

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

 

11.50%

 

12/13/05

 

15,000

 

15,000

 

$

  1.00

(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

R3 Education, Inc. (formerly known as Equinox EIC

 

Medical school operator

 

Senior secured revolving loan ($4,000 par due 12/2012)

 

8.79% (Libor + 6.00%/Q)

 

4/3/07

 

4,000

 

4,000

 

$

  1.00

 

 

 

 

7



Table of Contents

 

Partners, LLC and MUA Management Company, Ltd.)  (7)(8)

 

 

 

Senior secured revolving loan ($4,900 par due 12/2012)

 

10.00% (Base Rate + 5.00%/D)

 

4/3/07

 

4,900

 

4,900

 

$

1.00

 

 

 

 

 

 

 

Senior secured revolving loan ($400 par due 12/2012)

 

10.00% (Base Rate + 5.00%/D)

 

4/3/07

 

400

 

400

 

$

1.00

 

 

 

 

 

 

 

Senior secured loan ($3,637 par due 12/2012)

 

9.19% (Libor + 6.00%/S)

 

4/3/07

 

3,637

 

3,637

 

$

1.00

(2)

 

 

 

 

 

 

Senior secured loan ($14,113 par due 12/2012)

 

9.48% (Libor + 6.00%/Q)

 

9/21/07

 

14,113

 

14,113

 

$

1.00

(2)

 

 

 

 

 

 

Senior secured loan ($7,350 par due 12/2012)

 

9.09% (Libor + 6.00%/S)

 

4/3/07

 

7,350

 

7,350

 

$

1.00

(3)

 

 

 

 

 

 

Senior secured loan ($25 par due 12/2012)

 

10.00% (Base Rate + 5.00%/D)

 

4/3/07

 

25

 

25

 

$

1.00

(3)

 

 

 

 

 

 

Common membership interest (26.27% interest)

 

 

 

9/21/07

 

15,800

 

20,800

 

 

(5)

 

 

 

 

 

 

Preferred stock (800 shares)

 

 

 

 

 

200

 

200

 

 

(5)

 

 

 

 

 

 

 

 

 

 

 

 

197,932

 

205,652

 

 

 

16.50

%

 

8



Table of Contents

 

Financial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Abingdon Investments Limited (6)(8)(9)

 

Investment company

 

Ordinary shares (948,500 shares)

 

 

 

12/15/06

 

9,033

 

5,995

 

$

6.32

(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CIC Flex, LP (9)

 

Investment partnership

 

Limited partnership units (1 unit)

 

 

 

9/7/07

 

28

 

28

 

$

50,000.00

(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Covestia Capital Partners, LP (9)

 

Investment partnership

 

Limited partnership interest (47% interest)

 

 

 

6/17/08

 

1,059

 

1,059

 

$

1.00

(5)

 

 

 

9



Table of Contents

 

Firstlight Financial Corporation  (6)(9)

 

Investment company

 

Senior subordinated loan ($69,910 par due 12/2016)

 

10.00% PIK

 

12/31/06

 

69,910

 

69,910

 

$

1.00

(4)

 

 

 

 

 

 

Common stock (10,000 shares)

 

 

 

12/31/06

 

10,000

 

3,750

 

$

375.00

(5)

 

 

 

 

 

 

Common stock (30,000 shares)

 

 

 

12/31/06

 

30,000

 

11,250

 

$

375.00

(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ivy Hill Middle Market Credit Fund, Ltd. (7)(8)(9)

 

Investment company

 

Class B deferrable interest notes ($40,000 par due 11/2018)

 

8.66% (Libor + 6.00%/Q)

 

11/20/07

 

40,000

 

40,000

 

$

1.00

 

 

 

 

 

 

 

Subordinated notes ($16,000 par due 11/2018)

 

 

 

11/20/07

 

16,000

 

14,398

 

$

0.90

(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Imperial Capital Group, LLC and Imperial Capital Private Opportunities, LP (6)(9)

 

Investment banking services

 

Limited partnership interest (80% interest)

 

 

 

5/10/07

 

584

 

584

 

$

1.00

 

 

 

 

 

 

 

Common units (7,710 units)

 

 

 

5/10/07

 

14,997

 

14,997

 

$

1,945.16

(5)

 

 

 

 

 

 

Common units (2,526 units)

 

 

 

5/10/07

 

3

 

3

 

$

1.00

(5)

 

 

 

 

 

 

Common units (315 units)

 

 

 

5/10/07

 

 

 —

 

$

(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Partnership Capital Growth Fund I, LP (9)

 

Investment partnership

 

Limited partnership interest (25% interest)

 

 

 

6/16/06

 

2,364

 

2,364

 

 

(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trivergance Capital Partners, LP (9)

 

Investment partnership

 

Limited partnership interest (100% interest)

 

 

 

6/5/08

 

387

 

387

 

 

(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VSC Investors LLC (9)

 

Investment company

 

Membership interest (4.63% interest)

 

 

 

1/24/08

 

302

 

302

 

 

(5)

 

 

 

 

 

 

 

 

 

 

 

 

194,667

 

165,027

 

 

 

13.24

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Apogee Retail, LLC

 

For-profit thrift retailer

 

Senior secured loan ($10,849 par due 11/2012)

 

12.00% Cash, 4.00% PIK

 

5/28/08

 

10,849

 

10,849

 

$

1.00

(4)

 

 

 

 

 

 

Senior secured loan ($2,307 par due 3/2012)

 

8.71% (Libor + 5.25%/S)

 

3/27/07

 

2,307

 

2,238

 

$

0.97

 

 

 

 

 

 

 

Senior secured loan ($24,637 par due 3/2012)

 

8.71% (Libor + 5.25%/S)

 

3/27/07

 

24,637

 

23,898

 

$

0.97

(2)

 

 

 

 

 

 

Senior secured loan ($11,790 par due 3/2012)

 

8.71% (Libor + 5.25%/S)

 

3/27/07

 

11,790

 

11,436

 

$

0.97

(3)

 

 

 

 

 

 

Senior secured loan ($6 par due 3/2012)

 

8.46% (Libor + 5.25%/Q)

 

3/27/07

 

6

 

6

 

$

0.97

 

 

 

 

10



Table of Contents

 

 

 

 

 

Senior secured loan ($63 par due 3/2012)

 

8.46% (Libor + 5.25%/Q)

 

3/27/07

 

63

 

61

 

$

0.97

(2)

 

 

 

 

 

 

Senior secured loan ($30 par due 3/2012)

 

8.46% (Libor + 5.25%/Q)

 

3/27/07

 

30

 

29

 

$

0.97

(3)

 

 

 

 

 

 

Senior secured loan ($4,876 par due 3/2012)

 

8.03% (Libor + 5.25%/S)

 

3/27/07

 

4,876

 

4,730

 

$

0.97

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hudson Group, Inc. and Advent - Hudson, LLC

 

Retail newsstand operator

 

Junior secured loan ($35,272 par due 3/2015)

 

11.50% Cash, 1.50% PIK

 

3/28/08

 

35,272

 

38,034

 

$

1.08

(4)

 

 

 

 

 

 

Common stock (6,057,000 shares)

 

 

 

3/28/08

 

3,000

 

3,000

 

$

0.50

(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savers, Inc. and SAI Acquisition Corporation

 

For-profit thrift retailer

 

Senior subordinated note ($6,000 par due 8/2014)

 

10.00% cash, 2.00% PIK

 

8/8/06

 

6,000

 

5,880

 

$

0.98

(4)

 

 

 

 

 

 

Senior subordinated note ($22,000 par due 8/2014)

 

10.00% cash, 2.00% PIK

 

8/8/06

 

22,000

 

21,560

 

$

0.98

(2)(4)

 

 

 

 

 

 

Common stock (1,170,182 shares)

 

 

 

8/8/06

 

4,500

 

5,300

 

$

4.53

(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Things Remembered, Inc. and TRM Holdings Corporation

 

Personalized gifts retailer

 

Senior secured loan ($4,716 par due 9/2012)

 

8.75% (Base Rate + 3.50%/D)

 

9/28/06

 

4,716

 

4,480

 

$

0.95

(3)

 

 

 

 

 

 

Senior secured loan ($14,024 par due 9/2012)

 

10.75% (Base Rate + 5.75%/D)

 

9/28/06

 

14,024

 

13,323

 

$

0.95

 

 

 

 

 

 

 

Senior secured loan ($14,024 par due 9/2012)

 

10.75% (Base Rate + 5.75%/D)

 

9/28/06

 

14,024

 

13,323

 

$

0.95

(2)

 

 

 

 

 

 

Senior secured loan ($7,225 par due 9/2012)

 

10.75% (Base Rate + 5.75%/D)

 

9/28/06