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, 2011
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) |
245 Park Avenue, 44th Floor, New York, NY 10167
(Address of principal executive office) (Zip Code)
(212) 750-7300
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 |
|
Accelerated filer o |
|
|
|
|
|
Non-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 8, 2011 |
|
Common stock, $0.001 par value |
|
205,129,966 |
INDEX
|
Part I. |
Financial Information |
|
|
|
|
|
|
Item 1. |
Financial Statements |
|
|
|
|
|
|
|
Consolidated Balance Sheet as of September 30, 2011 (unaudited) and December 31, 2010 |
2 |
|
|
|
|
|
|
3 | |
|
|
|
|
|
|
Consolidated Schedule of Investments as of September 30, 2011 (unaudited) and December 31, 2010 |
4 |
|
|
|
|
|
|
40 | |
|
|
|
|
|
|
41 | |
|
|
|
|
|
|
42 | |
|
|
|
|
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
67 | |
|
|
|
|
|
91 | ||
|
|
|
|
|
91 | ||
|
|
|
|
|
| ||
|
|
|
|
|
92 | ||
|
|
|
|
|
92 | ||
|
|
|
|
|
92 | ||
|
|
|
|
|
92 | ||
|
|
|
|
|
92 | ||
|
|
|
|
|
93 | ||
|
|
|
|
|
93 |
ARES CAPITAL CORPORATION AND SUBSIDIARIES
(in thousands, except per share data)
|
|
|
As of |
| ||||
|
|
|
September 30, 2011 |
|
December 31, 2010 |
| ||
|
|
|
(unaudited) |
|
|
| ||
|
ASSETS |
|
|
|
|
| ||
|
Investments at fair value |
|
|
|
|
| ||
|
Non-controlled/non-affiliate investments |
|
$ |
2,876,091 |
|
$ |
2,482,642 |
|
|
Non-controlled affiliate company investments |
|
316,751 |
|
380,396 |
| ||
|
Controlled affiliate company investments |
|
1,562,311 |
|
1,454,952 |
| ||
|
Total investments at fair value (amortized cost of $4,803,420 and $4,291,955, respectively) |
|
4,755,153 |
|
4,317,990 |
| ||
|
Cash and cash equivalents |
|
103,146 |
|
100,752 |
| ||
|
Receivable for open trades |
|
22,560 |
|
8,876 |
| ||
|
Interest receivable |
|
82,663 |
|
72,548 |
| ||
|
Other assets |
|
81,984 |
|
62,380 |
| ||
|
Total assets |
|
$ |
5,045,506 |
|
$ |
4,562,546 |
|
|
LIABILITIES |
|
|
|
|
| ||
|
Debt |
|
$ |
1,800,212 |
|
$ |
1,378,509 |
|
|
Management and incentive fees payable |
|
83,843 |
|
52,397 |
| ||
|
Accounts payable and other liabilities |
|
37,201 |
|
34,742 |
| ||
|
Interest and facility fees payable |
|
20,972 |
|
21,763 |
| ||
|
Payable for open trades |
|
— |
|
24,602 |
| ||
|
Total liabilities |
|
1,942,228 |
|
1,512,013 |
| ||
|
Commitments and contingencies (Note 7) |
|
|
|
|
| ||
|
STOCKHOLDERS’ EQUITY |
|
|
|
|
| ||
|
Common stock, par value $.001 per share, 400,000 and 300,000 common shares authorized, respectively, 205,130 and 204,419 common shares issued and outstanding, respectively |
|
205 |
|
204 |
| ||
|
Capital in excess of par value |
|
3,271,595 |
|
3,205,326 |
| ||
|
Accumulated overdistributed net investment income |
|
(36,245 |
) |
(11,336 |
) | ||
|
Accumulated net realized loss on investments, foreign currency transactions, extinguishment of debt and other assets |
|
(84,010 |
) |
(169,696 |
) | ||
|
Net unrealized gain (loss) on investments and foreign currency transactions |
|
(48,267 |
) |
26,035 |
| ||
|
Total stockholders’ equity |
|
3,103,278 |
|
3,050,533 |
| ||
|
Total liabilities and stockholders’ equity |
|
$ |
5,045,506 |
|
$ |
4,562,546 |
|
|
NET ASSETS PER SHARE |
|
$ |
15.13 |
|
$ |
14.92 |
|
See accompanying notes to consolidated financial statements.
ARES CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data)
|
|
|
For the three months ended |
|
For the nine months ended |
| ||||||||
|
|
|
September 30, 2011 |
|
September 30, 2010 |
|
September 30, 2011 |
|
September 30, 2010 |
| ||||
|
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
| ||||
|
INVESTMENT INCOME: |
|
|
|
|
|
|
|
|
| ||||
|
From non-controlled/non-affiliate company investments: |
|
|
|
|
|
|
|
|
| ||||
|
Interest from investments |
|
$ |
69,588 |
|
$ |
66,319 |
|
$ |
191,830 |
|
$ |
177,285 |
|
|
Capital structuring service fees |
|
20,006 |
|
8,122 |
|
38,412 |
|
15,258 |
| ||||
|
Dividend income |
|
4,886 |
|
1,381 |
|
7,094 |
|
3,299 |
| ||||
|
Management fees |
|
427 |
|
1,711 |
|
1,055 |
|
4,261 |
| ||||
|
Interest from cash & cash equivalents |
|
16 |
|
47 |
|
110 |
|
75 |
| ||||
|
Other income |
|
1,611 |
|
1,094 |
|
3,727 |
|
3,648 |
| ||||
|
Total investment income from non-controlled/non-affiliate company investments |
|
96,534 |
|
78,674 |
|
242,228 |
|
203,826 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
From non-controlled affiliate company investments: |
|
|
|
|
|
|
|
|
| ||||
|
Interest from investments |
|
7,909 |
|
13,607 |
|
26,800 |
|
33,602 |
| ||||
|
Capital structuring service fees |
|
730 |
|
— |
|
730 |
|
— |
| ||||
|
Dividend income |
|
549 |
|
127 |
|
4,008 |
|
318 |
| ||||
|
Management fees |
|
63 |
|
75 |
|
439 |
|
363 |
| ||||
|
Other income |
|
233 |
|
63 |
|
871 |
|
485 |
| ||||
|
Total investment income from non-controlled affiliate company investments |
|
9,484 |
|
13,872 |
|
32,848 |
|
34,768 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
From controlled affiliate company investments: |
|
|
|
|
|
|
|
|
| ||||
|
Interest from investments |
|
44,032 |
|
27,908 |
|
124,732 |
|
62,545 |
| ||||
|
Capital structuring service fees |
|
7,314 |
|
12,489 |
|
20,020 |
|
15,146 |
| ||||
|
Dividend income |
|
5,907 |
|
2,415 |
|
15,708 |
|
4,211 |
| ||||
|
Management fees |
|
3,677 |
|
2,652 |
|
10,723 |
|
5,430 |
| ||||
|
Other income |
|
417 |
|
116 |
|
1,104 |
|
300 |
| ||||
|
Total investment income from controlled affiliate company investments |
|
61,347 |
|
45,580 |
|
172,287 |
|
87,632 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Total investment income |
|
167,365 |
|
138,126 |
|
447,363 |
|
326,226 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
EXPENSES: |
|
|
|
|
|
|
|
|
| ||||
|
Interest and credit facility fees |
|
30,971 |
|
22,755 |
|
89,739 |
|
54,453 |
| ||||
|
Incentive management fees |
|
10,159 |
|
17,805 |
|
82,846 |
|
40,922 |
| ||||
|
Base management fees |
|
18,317 |
|
15,436 |
|
52,461 |
|
35,574 |
| ||||
|
Professional fees |
|
3,683 |
|
3,233 |
|
10,929 |
|
9,191 |
| ||||
|
Administrative fees |
|
2,017 |
|
2,642 |
|
6,901 |
|
6,251 |
| ||||
|
Professional fees and other costs related to the acquisition of Allied Capital Corporation |
|
1,116 |
|
1,450 |
|
2,016 |
|
17,773 |
| ||||
|
Other general and administrative |
|
2,061 |
|
3,749 |
|
7,890 |
|
9,236 |
| ||||
|
Total expenses |
|
68,324 |
|
67,070 |
|
252,782 |
|
173,400 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
NET INVESTMENT INCOME BEFORE INCOME TAXES |
|
99,041 |
|
71,056 |
|
194,581 |
|
152,826 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Income tax expense (benefit), including excise tax |
|
683 |
|
(164 |
) |
4,637 |
|
360 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
NET INVESTMENT INCOME |
|
98,358 |
|
71,220 |
|
189,944 |
|
152,466 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS AND FOREIGN CURRENCIES: |
|
|
|
|
|
|
|
|
| ||||
|
Net realized gains (losses): |
|
|
|
|
|
|
|
|
| ||||
|
Non-controlled/non-affiliate company investments |
|
(28,731 |
) |
1,225 |
|
29,458 |
|
10,998 |
| ||||
|
Non-controlled affiliate company investments |
|
33,120 |
|
9 |
|
31,104 |
|
(3,725 |
) | ||||
|
Controlled affiliate company investments |
|
44,420 |
|
(6 |
) |
44,442 |
|
1,296 |
| ||||
|
Foreign currency transactions |
|
— |
|
— |
|
— |
|
85 |
| ||||
|
Net realized gains |
|
48,809 |
|
1,228 |
|
105,004 |
|
8,654 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net unrealized gains (losses): |
|
|
|
|
|
|
|
|
| ||||
|
Non-controlled/non-affiliate company investments |
|
(22,672 |
) |
17,509 |
|
(43,244 |
) |
113,590 |
| ||||
|
Non-controlled affiliate company investments |
|
(34,454 |
) |
16,064 |
|
(37,214 |
) |
35,152 |
| ||||
|
Controlled affiliate company investments |
|
(49,402 |
) |
23,934 |
|
6,156 |
|
31,321 |
| ||||
|
Foreign currency transactions |
|
— |
|
— |
|
— |
|
(152 |
) | ||||
|
Net unrealized gains (losses) |
|
(106,528 |
) |
57,507 |
|
(74,302 |
) |
179,911 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net realized and unrealized gains (losses) from investments and foreign currencies |
|
(57,719 |
) |
58,735 |
|
30,702 |
|
188,565 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
GAIN ON THE ACQUISITION OF ALLIED CAPITAL CORPORATION |
|
— |
|
— |
|
— |
|
195,876 |
| ||||
|
REALIZED LOSS ON EXTINGUISHMENT OF DEBT |
|
— |
|
(1,578 |
) |
(19,318 |
) |
(1,961 |
) | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
NET INCREASE IN STOCKHOLDERS’ EQUITY RESULTING FROM OPERATIONS |
|
$ |
40,639 |
|
$ |
128,377 |
|
$ |
201,328 |
|
$ |
534,946 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
BASIC AND DILUTED EARNINGS PER COMMON SHARE (Note 10) |
|
$ |
0.20 |
|
$ |
0.67 |
|
$ |
0.98 |
|
$ |
3.16 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING — BASIC AND DILUTED (Note 10) |
|
205,130 |
|
192,167 |
|
204,770 |
|
169,500 |
| ||||
See accompanying notes to consolidated financial statements.
ARES CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of September 30, 2011
(dollar amounts in thousands)
(unaudited)
|
Company(1) |
|
Business Description |
|
Investment |
|
Interest(5)(12) |
|
Acquisition |
|
Amortized |
|
Fair Value |
|
Percentage |
| ||
|
Investment Funds and Vehicles |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
AGILE Fund I, LLC (7)(9) |
|
Investment partnership |
|
Member interest (0.50% interest) |
|
|
|
4/1/2010 |
|
$ |
245 |
|
$ |
130 |
|
|
|
|
CIC Flex, LP (9) |
|
Investment partnership |
|
Limited partnership units (0.94 unit) |
|
|
|
9/7/2007 |
|
2,533 |
|
3,137 |
|
|
| ||
|
Covestia Capital Partners, LP (9) |
|
Investment partnership |
|
Limited partnership interest (47.00% interest) |
|
|
|
6/17/2008 |
|
1,059 |
|
1,088 |
|
|
| ||
|
Dynamic India Fund IV, LLC (9) |
|
Investment company |
|
Member interest (5.44% interest) |
|
|
|
4/1/2010 |
|
4,822 |
|
4,728 |
|
|
| ||
|
Firstlight Financial Corporation (6)(9) |
|
Investment company |
|
Senior subordinated loan ($71,363 par due 12/2016) |
|
1.00% PIK |
|
12/31/2006 |
|
71,089 |
|
55,918 |
(4) |
|
| ||
|
|
|
|
|
Class A common stock (10,000 shares) |
|
|
|
12/31/2006 |
|
10,000 |
|
— |
|
|
| ||
|
|
|
|
|
Class B common stock (30,000 shares) |
|
|
|
12/31/2006 |
|
30,000 |
|
— |
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
111,089 |
|
55,918 |
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
HCI Equity, LLC (7)(8)(9) |
|
Investment company |
|
Member interest (100.00% interest) |
|
|
|
4/1/2010 |
|
808 |
|
715 |
|
|
| ||
|
Imperial Capital Private Opportunities, LP (9) |
|
Investment partnership |
|
Limited partnership interest (80.00% interest) |
|
|
|
5/10/2007 |
|
6,643 |
|
5,120 |
|
|
| ||
|
Ivy Hill Middle Market Credit Fund, Ltd. (7)(8)(9) |
|
Investment company |
|
Class B deferrable interest notes ($40,000 par due 11/2018) |
|
6.25% (Libor + 6.00%/Q) |
|
11/20/2007 |
|
40,000 |
|
37,600 |
|
|
| ||
|
|
|
|
|
Subordinated notes ($16 par due 11/2018) |
|
15.00% |
|
11/20/2007 |
|
15,515 |
|
16,000 |
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
55,515 |
|
53,600 |
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
Knightsbridge CLO 2008-1 Ltd. (7)(8)(9) |
|
Investment company |
|
Class C notes ($14,400 par due 6/2018) |
|
7.75% (Libor + 7.50%/Q) |
|
3/24/2010 |
|
14,400 |
|
14,400 |
|
|
| ||
|
|
|
|
|
Class D notes ($9,000 par due 6/2018) |
|
8.75% (Libor + 8.50%/Q) |
|
3/24/2010 |
|
9,000 |
|
9,000 |
|
|
| ||
|
|
|
|
|
Class E notes ($14,850 par due 6/2018) |
|
5.25% (Libor + 5.00%/Q) |
|
3/24/2010 |
|
13,596 |
|
13,749 |
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
36,996 |
|
37,149 |
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
Kodiak Funding, LP (9) |
|
Investment partnership |
|
Limited partnership interest (1.52% interest) |
|
|
|
4/1/2010 |
|
877 |
|
823 |
|
|
| ||
|
Novak Biddle Venture Partners III, L.P. (9) |
|
Investment partnership |
|
Limited partnership interest (2.47% interest) |
|
|
|
4/1/2010 |
|
221 |
|
196 |
|
|
| ||
|
Partnership Capital Growth Fund I, L.P. (9) |
|
Investment partnership |
|
Limited partnership interest (25.00% interest) |
|
|
|
6/16/2006 |
|
2,126 |
|
4,006 |
|
|
| ||
|
Senior Secured Loan Fund LLC (7)(11)(17) |
|
Co-investment vehicle |
|
Subordinated certificates ($788,128 par due 12/2020) |
|
8.29% (Libor + 8.00%/Q) |
|
10/30/2009 |
|
777,406 |
|
796,513 |
|
|
| ||
|
VSC Investors LLC (9) |
|
Investment company |
|
Membership interest (1.95% interest) |
|
|
|
1/24/2008 |
|
1,139 |
|
1,139 |
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
1,001,479 |
|
964,262 |
|
31.07 |
% | ||
|
Healthcare-Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
CCS Group Holdings, LLC |
|
Correctional facility healthcare operator |
|
Class A units (601,937 units) |
|
|
|
8/19/2010 |
|
602 |
|
936 |
|
|
| ||
|
CT Technologies Intermediate Holdings, Inc. and CT Technologies Holdings LLC (6) |
|
Healthcare analysis services |
|
Senior secured loan ($7,263 par due 3/2017) |
|
7.75% (Libor + 6.50%/Q) |
|
3/15/2011 |
|
7,263 |
|
6,900 |
(2)(16) |
|
| ||
|
|
|
|
|
Senior secured loan ($7,661 par due 3/2017) |
|
7.75% (Libor + 6.50%/Q) |
|
3/15/2011 |
|
7,661 |
|
7,278 |
(3)(16) |
|
| ||
|
|
|
|
|
Class A common stock (9,679 shares) |
|
|
|
6/15/2007 |
|
4,000 |
|
9,337 |
|
|
| ||
|
|
|
|
|
Class C common stock (1,546 shares) |
|
|
|
6/15/2007 |
|
— |
|
1,491 |
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
18,924 |
|
25,006 |
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
HCP Acquisition Holdings, LLC (7) |
|
Healthcare compliance advisory services |
|
Class A units (10,720,874 units) |
|
|
|
6/26/2008 |
|
10,721 |
|
4,437 |
|
|
| ||
|
INC Research, Inc. |
|
Pharmaceutical and biotechnology consulting services |
|
Common stock (1,410,000 shares) |
|
|
|
9/27/2010 |
|
1,512 |
|
1,101 |
|
|
| ||
As of September 30, 2011
(dollar amounts in thousands)
(unaudited)
|
Company(1) |
|
Business Description |
|
Investment |
|
Interest(5)(12) |
|
Acquisition |
|
Amortized |
|
Fair Value |
|
Percentage |
|
|
Magnacare Holdings, Inc., Magnacare Administrative Services, LLC, and Magnacare, LLC |
|
Healthcare professional provider |
|
Senior secured loan ($12,973 par due 9/2016) |
|
9.75% (Libor + 8.75%/Q) |
|
9/15/2010 |
|
12,973 |
|
12,973 |
(16) |
|
|
|
|
|
|
|
Senior secured loan ($45,570 par due 9/2016) |
|
9.75% (Libor + 8.75%/Q) |
|
9/15/2010 |
|
45,570 |
|
45,570 |
(2)(16) |
|
|
|
|
|
|
|
Senior secured loan ($8,476 par due 9/2016) |
|
9.75% (Libor + 8.75%/Q) |
|
9/15/2010 |
|
8,476 |
|
8,476 |
(3)(16) |
|
|
|
|
|
|
|
|
|
|
|
|
|
67,019 |
|
67,019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MW Dental Holding Corp. |
|
Dental services |
|
Senior secured revolving loan ($1,700 par due 4/2017) |
|
8.50% (Libor + 7.00%/M) |
|
4/12/2011 |
|
1,700 |
|
1,649 |
(16) |
|
|
|
|
|
|
|
Senior secured loan ($30,723 par due 4/2017) |
|
8.50% (Libor + 7.00%/M) |
|
4/12/2011 |
|
30,723 |
|
29,801 |
(16) |
|
|
|
|
|
|
|
Senior secured loan ($49,875 par due 4/2017) |
|
8.50% (Libor + 7.00%/M) |
|
4/12/2011 |
|
49,875 |
|
48,379 |
(2)(16) |
|
|
|
|
|
|
|
Senior secured loan ($2,693 par due 4/2017) |
|
8.50% (Libor + 7.00%/M) |
|
4/12/2011 |
|
2,693 |
|
2,612 |
(3)(16) |
|
|
|
|
|
|
|
|
|
|
|
|
|
84,991 |
|
82,441 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Napa Management Services Corporation |
|
Anesthesia management services provider |
|
Senior secured loan ($10,961 par due 4/2016) |
|
8.50% (Libor + 7.00%/Q) |
|
4/15/2011 |
|
10,605 |
|
10,961 |
(16) |
|
|
|
|
|
|
|
Senior secured loan ($29,625 par due 4/2016) |
|
8.50% (Libor + 7.00%/Q) |
|
4/15/2011 |
|
29,625 |
|
29,625 |
(2)(16) |
|
|
|
|
|
|
|
Senior secured loan ($7,801 par due 4/2016) |
|
8.50% (Libor + 7.00%/Q) |
|
4/15/2011 |
|
7,801 |
|
7,801 |
(3)(16) |
|
|
|
|
|
|
|
Common units (5,000 units) |
|
|
|
|
|
5,000 |
|
5,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53,031 |
|
53,387 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NS Merger Sub. Inc. and NS Holdings, Inc. |
|
Healthcare technology provider |
|
Senior subordinated loan ($579 par due 6/2017) |
|
13.50% |
|
6/21/2010 |
|
579 |
|
579 |
|
|
|
|
|
|
|
|
Senior subordinated loan ($50,000 par due 6/2017) |
|
13.50% |
|
6/21/2010 |
|
50,000 |
|
50,000 |
(2) |
|
|
|
|
|
|
|
Common stock (2,500,000 shares) |
|
|
|
6/21/2010 |
|
2,500 |
|
2,388 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53,079 |
|
52,967 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OnCURE Medical Corp. |
|
Radiation oncology care provider |
|
Common stock (857,143 shares) |
|
|
|
8/18/2006 |
|
3,000 |
|
3,038 |
|
|
|
|
Passport Health Communications, Inc., Passport Holding Corp. and Prism Holding Corp. |
|
Healthcare technology provider |
|
Senior secured loan ($10,202 par due 5/2014) |
|
8.25% (Libor + 7.00%/M) |
|
5/9/2008 |
|
10,202 |
|
10,202 |
(2)(16) |
|
|
|
|
|
|
|
Senior secured loan ($9,417 par due 5/2014) |
|
8.25% (Libor + 7.00%/M) |
|
5/9/2008 |
|
9,417 |
|
9,417 |
(3)(16) |
|
|
|
|
|
|
|
Series A preferred stock (1,594,457 shares) |
|
|
|
7/30/2008 |
|
11,156 |
|
8,550 |
|
|
|
|
|
|
|
|
Common stock (16,106 shares) |
|
|
|
7/30/2008 |
|
100 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,875 |
|
28,169 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PG Mergersub, Inc. and PGA Holdings, Inc. |
|
Provider of patient surveys, management reports and national databases for the integrated healthcare delivery system |
|
Senior secured loan ($9,131 par due 11/2015) |
|
6.75% (Libor + 5.00%/Q) |
|
11/3/2010 |
|
9,106 |
|
9,131 |
(3)(16) |
|
|
|
|
|
|
|
Senior subordinated loan ($4,000 par due 3/2016) |
|
12.50% |
|
3/12/2008 |
|
3,954 |
|
4,000 |
|
|
|
|
|
|
|
|
Preferred stock (333 shares) |
|
|
|
3/12/2008 |
|
125 |
|
14 |
|
|
|
|
|
|
|
|
Common stock (16,667 shares) |
|
|
|
3/12/2008 |
|
167 |
|
705 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,352 |
|
13,850 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PRA Holdings, Inc. |
|
Drug testing services |
|
Senior secured loan ($11,330 par due 12/2014) |
|
4.35% (Libor + 4.00%/Q) |
|
12/14/2007 |
|
11,011 |
|
11,103 |
(2) |
|
|
|
|
|
|
|
Senior secured loan ($12,000 par due 12/2014) |
|
4.35% (Libor + 4.00%/Q) |
|
12/14/2007 |
|
11,657 |
|
11,760 |
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
22,668 |
|
22,863 |
|
|
|
As of September 30, 2011
(dollar amounts in thousands)
(unaudited)
|
Company(1) |
|
Business Description |
|
Investment |
|
Interest(5)(12) |
|
Acquisition |
|
Amortized |
|
Fair Value |
|
Percentage |
|
|
Reed Group, Ltd. |
|
Medical disability management services provider |
|
Senior secured revolving loan ($1,250 par due 12/2013) |
|
|
|
4/1/2010 |
|
1,097 |
|
1,062 |
(15) |
|
|
|
|
|
|
|
Senior secured loan ($10,755 par due 12/2013) |
|
|
|
4/1/2010 |
|
9,129 |
|
9,142 |
(15) |
|
|
|
|
|
|
|
Senior secured loan ($20,576 par due 12/2013) |
|
|
|
4/1/2010 |
|
15,918 |
|
4,242 |
(15) |
|
|
|
|
|
|
|
Equity interests |
|
|
|
4/1/2010 |
|
203 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,347 |
|
14,446 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Soteria Imaging Services, LLC (6) |
|
Outpatient medical imaging provider |
|
Junior secured loan ($1,275 par due 11/2010) |
|
14.50% |
|
4/1/2010 |
|
1,134 |
|
914 |
|
|
|
|
|
|
|
|
Junior secured loan ($1,822 par due 11/2010) |
|
12.50% |
|
4/1/2010 |
|
1,640 |
|
1,305 |
|
|
|
|
|
|
|
|
Preferred member units (1,823,179 units) |
|
|
|
4/1/2010 |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,774 |
|
2,219 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sunquest Information Systems, Inc. |
|
Laboratory software solutions provider |
|
Junior secured loan ($75,000 par due 6/2017) |
|
9.75% (Libor + 8.50%/Q) |
|
12/16/2010 |
|
75,000 |
|
74,250 |
(16) |
|
|
|
|
|
|
|
Junior secured loan ($50,000 par due 6/2017) |
|
9.75% (Libor + 8.50%/Q) |
|
12/16/2010 |
|
50,000 |
|
49,500 |
(2)(16) |
|
|
|
|
|
|
|
|
|
|
|
|
|
125,000 |
|
123,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Renal Care, Inc. |
|
Dialysis provider |
|
Senior secured loan ($7,462 par due 12/2016) |
|
5.50% (Libor + 4.00%/Q) |
|
6/9/2011 |
|
7,425 |
|
7,164 |
(16) |
|
|
|
|
|
|
|
Senior subordinated loan ($50,314 par due 6/2017) |
|
11.25% Cash, 2.00% PIK |
|
5/24/2010 |
|
50,314 |
|
50,314 |
(2)(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
57,739 |
|
57,478 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vantage Oncology, Inc. |
|
Radiation oncology care provider |
|
Common stock (62,157 shares) |
|
|
|
2/3/2011 |
|
4,670 |
|
6,005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
576,304 |
|
559,112 |
|
18.02 |
% |
|
Business Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aviation Properties Corporation (7) |
|
Aviation services |
|
Common stock (100 shares) |
|
|
|
4/1/2010 |
|
— |
|
— |
|
|
|
|
BenefitMall Holdings Inc. (7) |
|
Employee benefits broker services company |
|
Senior subordinated loan ($40,326 par due 6/2014) |
|
18.00% |
|
4/1/2010 |
|
40,326 |
|
40,326 |
|
|
|
|
|
|
|
|
Common stock (39,274,290 shares) |
|
|
|
4/1/2010 |
|
53,510 |
|
53,871 |
|
|
|
|
|
|
|
|
Warrants |
|
|
|
4/1/2010 |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93,836 |
|
94,197 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CitiPostal Inc. (7) |
|
Document storage and management services |
|
Senior secured revolving loan ($1,950 par due 12/2013) |
|
6.50% (Libor + 4.50%/Q) |
|
4/1/2010 |
|
1,950 |
|
1,950 |
(16) |
|
|
|
|
|
|
|
Senior secured revolving loan ($1,250 par due 12/2013) |
|
6.75% (Base Rate + 3.25%/Q) |
|
4/1/2010 |
|
1,250 |
|
1,250 |
(16) |
|
|
|
|
|
|
|
Senior secured loan ($492 par due 12/2013) |
|
8.50% Cash, 5.50% PIK |
|
4/1/2010 |
|
492 |
|
492 |
(4) |
|
|
|
|
|
|
|
Senior secured loan ($50,437 par due 12/2013) |
|
8.50% Cash, 5.50% PIK |
|
4/1/2010 |
|
50,437 |
|
50,437 |
(2)(4) |
|
|
|
|
|
|
|
Senior subordinated loan ($14,108 par due 12/2015) |
|
|
|
4/1/2010 |
|
13,038 |
|
2,880 |
(15) |
|
|
|
|
|
|
|
Common stock (37,024 shares) |
|
|
|
4/1/2010 |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
67,167 |
|
57,009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cook Inlet Alternative Risk, LLC |
|
Risk management services |
|
Senior subordinated note ($4,000 par due 9/2015) |
|
9.00% |
|
9/30/2011 |
|
4,000 |
|
4,000 |
|
|
|
|
|
|
|
|
Member interest (3.17%) |
|
|
|
4/1/2010 |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000 |
|
4,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cornerstone Records Management, LLC |
|
Physical records storage and management service provider |
|
Senior secured loan ($16,277 par due 8/2016) |
|
8.50% (Libor + 7.00%/M) |
|
8/12/2011 |
|
16,277 |
|
15,951 |
(16) |
|
|
|
Coverall North America, Inc. (7) |
|
Commercial janitorial service provider |
|
Subordinated notes ($9,386 par due 2/2016) |
|
10.00% Cash, 2.00% PIK |
|
2/22/2011 |
|
9,386 |
|
9,386 |
(4) |
|
|
As of September 30, 2011
(dollar amounts in thousands)
(unaudited)
|
Company(1) |
|
Business Description |
|
Investment |
|
Interest(5)(12) |
|
Acquisition |
|
Amortized |
|
Fair Value |
|
Percentage |
|
|
Diversified Collections Services, Inc. |
|
Collections services |
|
Senior secured loan ($34,000 par due 9/2012) |
|
13.75% (Libor + 11.75%/M) |
|
6/25/2010 |
|
34,000 |
|
34,000 |
(2)(16) |
|
|
|
|
|
|
|
Senior secured loan ($5,719 par due 3/2012) |
|
7.50% (Libor + 5.50%/M) |
|
6/25/2010 |
|
5,719 |
|
5,719 |
(3)(16) |
|
|
|
|
|
|
|
Senior secured loan ($2,000 par due 9/2012) |
|
13.75% (Libor + 11.75%/M) |
|
6/25/2010 |
|
2,000 |
|
2,000 |
(3)(16) |
|
|
|
|
|
|
|
Preferred stock (14,927 shares) |
|
|
|
5/18/2006 |
|
169 |
|
304 |
|
|
|
|
|
|
|
|
Common stock (478,816 shares) |
|
|
|
4/1/2010 |
|
1,478 |
|
3,091 |
|
|
|
|
|
|
|
|
Common stock (114,004 shares) |
|
|
|
2/5/2005 |
|
295 |
|
1,171 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43,661 |
|
46,285 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact Innovations Group, LLC |
|
IT consulting and outsourcing services |
|
Member interest (50.00% interest) |
|
|
|
4/1/2010 |
|
— |
|
200 |
|
|
|
|
Interactive Technology Solutions, LLC |
|
IT services provider |
|
Senior secured loan ($7,391 par due 6/2015) |
|
8.75% (Base Rate + 5.50%/Q) |
|
10/21/2010 |
|
7,391 |
|
7,391 |
(16) |
|
|
|
|
|
|
|
Senior secured loan ($8,281 par due 6/2015) |
|
8.75% (Base Rate + 5.50%/Q) |
|
10/21/2010 |
|
8,281 |
|
8,281 |
(3)(16) |
|
|
|
|
|
|
|
|
|
|
|
|
|
15,672 |
|
15,672 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor Group Services, LLC (6) |
|
Business consulting for private equity and corporate clients |
|
Senior secured revolving loan ($500 par due 6/2013) |
|
5.75% (Libor + 5.50%/M) |
|
6/22/2006 |
|
500 |
|
500 |
|
|
|
|
|
|
|
|
Limited liability company membership interest (10.00% interest) |
|
|
|
6/22/2006 |
|
— |
|
649 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500 |
|
1,149 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Microstar Logistics LLC |
|
Keg management solutions provider |
|
Junior secured loan ($85,000 par due 8/2016) |
|
10.00% (Libor + 9.00%/Q) |
|
8/5/2011 |
|
85,000 |
|
85,000 |
(16) |
|
|
|
Multi-Ad Services, Inc. (6) |
|
Marketing services and software provider |
|
Preferred units (1,725,280 units) |
|
|
|
4/1/2010 |
|
788 |
|
1,379 |
|
|
|
|
|
|
|
|
Common units (1,725,280 units) |
|
|
|
4/1/2010 |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
788 |
|
1,379 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MVL Group, Inc. (7) |
|
Marketing research provider |
|
Senior secured loan ($22,772 par due 7/2012) |
|
12.00% |
|
4/1/2010 |
|
22,772 |
|
22,772 |
|
|
|
|
|
|
|
|
Senior subordinated loan ($35,619 par due 7/2012) |
|
12.00% Cash, 2.50% PIK |
|
4/1/2010 |
|
35,050 |
|
35,619 |
(4) |
|
|
|
|
|
|
|
Junior subordinated loan ($144 par due 7/2012) |
|
10.00% |
|
4/1/2010 |
|
— |
|
12 |
|
|
|
|
|
|
|
|
Common stock (560,716 shares) |
|
|
|
4/1/2010 |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
57,822 |
|
58,403 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pillar Processing LLC and PHL Holding Co. (6) |
|
Mortgage services |
|
Senior secured loan ($1,875 par due 5/2014) |
|
14.50% |
|
7/31/2008 |
|
1,875 |
|
1,875 |
|
|
|
|
|
|
|
|
Senior secured loan ($5,500 par due 5/2014) |
|
14.50% |
|
7/31/2008 |
|
5,500 |
|
5,500 |
(2) |
|
|
|
|
|
|
|
Senior secured loan ($7,253 par due 11/2013) |
|
5.73% (Libor + 5.50%/M) |
|
11/20/2007 |
|
7,253 |
|
7,253 |
(2) |
|
|
|
|
|
|
|
Senior secured loan ($4,527 par due 11/2013) |
|
5.73% (Libor + 5.50%/M) |
|
11/20/2007 |
|
4,527 |
|
4,527 |
(3) |
|
|
|
|
|
|
|
Common stock (85 shares) |
|
|
|
|
|
3,768 |
|
2,729 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,923 |
|
21,884 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prommis Solutions, LLC, E-Default Services, LLC, Statewide Tax and Title Services, LLC & Statewide Publishing Services, LLC |
|
Bankruptcy and foreclosure processing services |
|
Senior subordinated loan ($17,126 par due 2/2014) |
|
|
|
2/9/2007 |
|
16,788 |
|
5,819 |
(15) |
|
|
|
|
|
|
|
Senior subordinated loan ($27,576 par due 2/2014) |
|
|
|
2/9/2007 |
|
27,032 |
|
9,371 |
(2)(15) |
|
|
|
|
|
|
|
Preferred units (30,000 units) |
|
|
|
4/11/2006 |
|
3,000 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46,820 |
|
15,190 |
|
|
|
As of September 30, 2011
(dollar amounts in thousands)
(unaudited)
|
Company(1) |
|
Business Description |
|
Investment |
|
Interest(5)(12) |
|
Acquisition |
|
Amortized |
|
Fair Value |
|
Percentage |
|
|
Promo Works, LLC |
|
Marketing services |
|
Senior secured loan ($8,655 par due 12/2013) |
|
|
|
4/1/2010 |
|
4,463 |
|
3,404 |
(15) |
|
|
|
R2 Acquisition Corp. |
|
Marketing services |
|
Common stock (250,000 shares) |
|
|
|
5/29/2007 |
|
250 |
|
192 |
|
|
|
|
Summit Business Media Parent Holding Company LLC |
|
Business media consulting services |
|
Limited liability company membership interest (45.98% interest) |
|
|
|
5/20/2011 |
|
— |
|
754 |
|
|
|
|
Tradesmen International, Inc. |
|
Construction labor support |
|
Junior secured loan ($14,014 par due 5/2014) |
|
13.00% Cash, 1.00% PIK |
|
4/1/2010 |
|
10,718 |
|
14,014 |
(4) |
|
|
|
|
|
|
|
Warrants to purchase up to 771,036 shares |
|
|
|
4/1/2010 |
|
— |
|
3,411 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,718 |
|
17,425 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tripwire, Inc. |
|
IT security software provider |
|
Senior secured loan ($30,000 par due 5/2018) |
|
10.50% (Libor + 9.25%/Q) |
|
5/23/2011 |
|
30,000 |
|
30,000 |
(16) |
|
|
|
|
|
|
|
Senior secured loan ($50,000 par due 5/2018) |
|
10.50% (Libor + 9.25%/Q) |
|
5/23/2011 |
|
50,000 |
|
50,000 |
(2)(16) |
|
|
|
|
|
|
|
Class A common stock (2,970 shares) |
|
|
|
5/23/2011 |
|
2,970 |
|
2,976 |
|
|
|
|
|
|
|
|
Class B common stock (2,655,638 shares) |
|
|
|
5/23/2011 |
|
30 |
|
30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
83,000 |
|
83,006 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Venturehouse-Cibernet Investors, LLC |
|
Financial settlement services for intercarrier wireless roaming |
|
Equity interest |
|
|
|
4/1/2010 |
|
— |
|
— |
|
|
|
|
VSS-Tranzact Holdings, LLC (6) |
|
Management consulting services |
|
Common membership interest (8.51% interest) |
|
|
|
10/26/2007 |
|
10,204 |
|
2,108 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
572,487 |
|
532,594 |
|
17.16 |
% |
|
Education |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American Academy Holdings, LLC |
|
Provider of education, training, certification, networking, and consulting services to medical coders and other healthcare professionals |
|
Senior secured revolving loan ($1,000 par due 3/2016) |
|
9.50% (Libor + 8.50%/Q) |
|
3/18/2011 |
|
1,000 |
|
1,000 |
(16) |
|
|
|
|
|
|
|
Senior secured loan ($31,466 par due 3/2016) |
|
9.50% (Libor + 8.50%/Q) |
|
3/18/2011 |
|
31,466 |
|
31,466 |
(16) |
|
|
|
|
|
|
|
Senior secured loan ($49,012 par due 3/2016) |
|
9.50% (Libor + 8.50%/Q) |
|
3/18/2011 |
|
49,012 |
|
49,012 |
(2)(16) |
|
|
|
|
|
|
|
|
|
|
|
|
|
81,478 |
|
81,478 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Campus Management Corp. and Campus Management Acquisition Corp. (6) |
|
Education software developer |
|
Preferred stock (485,159 shares) |
|
|
|
2/8/2008 |
|
10,520 |
|
13,231 |
|
|
|
|
Community Education Centers, Inc. |
|
Offender re-entry and in-prison treatment services provider |
|
Senior secured loan ($18,571 par due 12/2014) |
|
6.25% (Libor + 5.25%/Q) |
|
12/10/2010 |
|
18,571 |
|
18,571 |
(16) |
|
|
|
|
|
|
|