Edgar Filing: ARES CAPITAL CORP

Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2017

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

For the transition period from _____ to _____

Commission File No. 814-00663

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 ý 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, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth 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)
Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. 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 ý

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 July 26, 2017
Common stock, $0.001 par value		426,299,165

ARES CAPITAL CORPORATION

INDEX



Part I.	Financial Information

Item 1.	Financial Statements
	Consolidated Balance Sheet as of June 30, 2017 (unaudited) and December 31, 2016	3

	Consolidated Statement of Operations for the three and six months ended June 30, 2017 and 2016 (unaudited)	4

	Consolidated Schedule of Investments as of June 30, 2017 (unaudited) and December 31, 2016	5

	Consolidated Statement of Stockholders’ Equity for the six months ended June 30, 2017 (unaudited)	65

	Consolidated Statement of Cash Flows for the six months ended June 30, 2017 and 2016 (unaudited)	66

	Notes to Consolidated Financial Statements (unaudited)	67

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	103

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	133

Item 4.	Controls and Procedures	134

Part II.	Other Information

Item 1.	Legal Proceedings	134

Item 1A.	Risk Factors	134

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	134

Item 3.	Defaults Upon Senior Securities	136

Item 4.	Mine Safety Disclosures	136

Item 5.	Other Information	136

Item 6.	Exhibits	136

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(in millions, except per share data)



	As of
	June 30, 2017			December 31, 2016
	(unaudited)
ASSETS
Investments at fair value
Non-controlled/non-affiliate company investments	$	7,756		$	5,940
Non-controlled affiliate company investments	212			185
Controlled affiliate company investments	3,530			2,695
Total investments at fair value (amortized cost of $11,735 and $9,034, respectively)	11,498			8,820
Cash and cash equivalents	536			223
Interest receivable	110			112
Receivable for open trades	33			29
Other assets	151			61
Total assets	$	12,328		$	9,245
LIABILITIES
Debt	$	4,838		$	3,874
Base management fees payable	44			34
Income based fees payable	20			32
Capital gains incentive fees payable	63			38
Accounts payable and other liabilities	194			58
Interest and facility fees payable	53			44
Payable for open trades	65			—
Total liabilities	5,277			4,080
Commitments and contingencies (Note 7)
STOCKHOLDERS' EQUITY
Common stock, par value $0.001 per share, 500 common shares authorized; 426 and 314 common shares issued and outstanding, respectively	—			—
Capital in excess of par value	7,206			5,292
Accumulated undistributed (overdistributed) net investment income	(69		)	37
Accumulated net realized gains on investments, foreign currency transactions, extinguishment of debt and other assets	165			57
Net unrealized losses on investments, foreign currency and other transactions	(251		)	(221		)
Total stockholders' equity	7,051			5,165
Total liabilities and stockholders' equity	$	12,328		$	9,245
NET ASSETS PER SHARE	$	16.54		$	16.45

See accompanying notes to consolidated financial statements.

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(in millions, except per share data)

(unaudited)



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2017			2016			2017			2016
INVESTMENT INCOME:
From non-controlled/non-affiliate company investments:
Interest income from investments	$	171		$	137		$	339		$	277
Capital structuring service fees	24			12			36			27
Dividend income	6			9			12			17
Other income	5			4			9			7
Total investment income from non-controlled/non-affiliate company investments	206			162			396			328
From non-controlled affiliate company investments:
Interest income from investments	4			4			8			8
Total investment income from non-controlled affiliate company investments	4			4			8			8
From controlled affiliate company investments:
Interest income from investments	56			62			115			126
Capital structuring service fees	5			1			5			1
Dividend income	10			10			28			20
Management and other fees	2			5			5			9
Other income	1			1			2			1
Total investment income from controlled affiliate company investments	74			79			155			157
Total investment income	284			245			559			493
EXPENSES:
Interest and credit facility fees	55			45			110			96
Base management fees	44			34			83			69
Income based fees	30			29			62			58
Capital gain incentive fees	10			10			26			14
Administrative fees	3			4			6			7
Professional fees and other costs related to the American Capital Acquisition	12			7			38			8
Other general and administrative	9			7			17			14
Total expenses	163			136			342			266
Waiver of income based fees	(10		)	—			(10		)	—
Total expenses, net of waiver of income based fees	153			136			332			266
NET INVESTMENT INCOME BEFORE INCOME TAXES	131			109			227			227
Income tax expense, including excise tax	7			4			9			9
NET INVESTMENT INCOME	124			105			218			218
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS, FOREIGN CURRENCY AND OTHER TRANSACTIONS:
Net realized gains (losses):
Non-controlled/non-affiliate company investments	67			33			73			52
Non-controlled affiliate company investments	—			1			—			1
Controlled affiliate company investments	45			—			52			6
Foreign currency and other transactions	(2		)	(3		)	(13		)	(1		)
Net realized gains	110			31			112			58
Net unrealized gains (losses):
Non-controlled/non-affiliate company investments	(85		)	(13		)	(99		)	(34		)
Non-controlled affiliate company investments	(2		)	12			(1		)	22
Controlled affiliate company investments	43			19			74			25
Foreign currency and other transactions	(8		)	3			(4		)	—
Net unrealized gains (losses)	(52		)	21			(30		)	13
Net realized and unrealized gains from investments, foreign currency and other transactions	58			52			82			71
REALIZED LOSSES ON EXTINGUISHMENT OF DEBT	(4		)	—			(4		)	—
NET INCREASE IN STOCKHOLDERS' EQUITY RESULTING FROM OPERATIONS	$	178		$	157		$	296		$	289
BASIC AND DILUTED EARNINGS PER COMMON SHARE (see Note 10)	$	0.42		$	0.50		$	0.70		$	0.92
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING (see Note 10)	426			314			424			314

See accompanying notes to consolidated financial statements.

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of June 30, 2017

(dollar amounts in millions)

(unaudited)

Company(1)

Business Description

Investment

Interest(6)(12)

Acquisition
Date

Amortized
Cost

Fair

Value

Percentage
of Net
Assets

Investment Funds and Vehicles

ACAS CLO 2007-1, Ltd. (8)(9)(10)

Investment vehicle

Subordinated notes ($25.9 par due 4/2021)

1/3/2017

—

ACAS Equity Holdings Corporation (8)(10)

Investment company

Common stock (589 shares)

1/3/2017

0.5

0.4

Ares IIIR/IVR CLO Ltd. (8)(9)(10)

Investment vehicle

Subordinated notes ($20.0 par due 4/2021)

1/3/2017

0.7

—

Babson CLO Ltd. 2006-II (9)(10)

Investment vehicle

Subordinated notes ($15.0 par due 10/2020)

1/3/2017

—

Babson CLO Ltd. 2013-II (9)(10)

Investment vehicle

Subordinated notes ($5.0 par due 1/2025)

12.00%

1/3/2017

3.0

2.8

Babson CLO Ltd. 2014-I (9)(10)

Investment vehicle

Subordinated notes ($8.5 par due 7/2025)

11.80%

1/3/2017

4.6

5.0

Babson CLO Ltd. 2014-II (9)(10)

Investment vehicle

Subordinated notes ($25.0 par due 10/2026)

18.00%

1/3/2017

12.5

13.7

Blue Wolf Capital Fund II, L.P. (9)(10)

Investment partnership

Limited partnership interest (8.50% interest)

1/3/2017

7.1

7.4

Carlyle Global Market Strategies CLO 2015-3, Ltd. (9)(10)

Investment vehicle

Subordinated notes ($5.0 par due 7/2025)

8.50%

1/3/2017

2.7

Carlyle Global Market Strategies CLO 2013-3, Ltd. (9)(10)

Investment vehicle

Subordinated notes ($24.6 par due 7/2028)

10.80%

1/3/2017

19.5

21.7

Cent CDO 12 Limited (9)(10)

Investment vehicle

Subordinated notes ($26.4 par due 11/2020)

10.00%

1/3/2017

18.4

17.7

Cent CLO 22 Limited (9)(10)

Investment vehicle

Subordinated notes ($45.4 par due 11/2026)

11.80%

1/3/2017

24.6

21.1

Cent CLO 24 Limited (9)(10)

Investment vehicle

Subordinated notes ($28.0 par due 10/2026)

8.50%

1/3/2017

21.9

21.7

Centurion CDO 8 Limited (9)(10)

Investment vehicle

Subordinated notes ($5.0 par due 3/2019)

1/3/2017

—

CoLTs 2005-1 Ltd. (8)(9)(10)

Investment vehicle

Preferred shares (360 shares)

1/3/2017

—

CoLTs 2005-2 Ltd. (8)(9)(10)

Investment vehicle

Preferred shares (34,170,000 shares)

1/3/2017

—

CREST Exeter Street Solar 2004-1 (9)(10)

Investment vehicle

Preferred shares (3,500,000 shares)

1/3/2017

—

Eaton Vance CDO X plc (9)(10)

Investment vehicle

Subordinated notes ($15.0 par due 2/2027)

10.00%

1/3/2017

4.3

5.5

European Capital UK SME Debt LP (8)(9)(10)(23)

Investment partnership

Limited partnership interest (45% interest)

1/3/2017

25.6

27.3

Flagship CLO V (9)(10)

Investment vehicle

Subordinated securities (15,000 shares)

1/3/2017

—

GoldenTree Loan Opportunities VII, Limited (9)(10)

Investment vehicle

Subordinated notes ($35.3 par due 4/2025)

9.00%

1/3/2017

20.4

21.0

Halcyon Loan Advisors Funding 2014-1 Ltd. (9)(10)

Investment vehicle

Subordinated notes ($1.3 par due 4/2026)

13.80%

1/3/2017

0.5

0.4

Halcyon Loan Advisors Funding 2015-2, Ltd. (9)(10)

Investment vehicle

Subordinated notes ($21.7 par due 7/2027)

13.50%

1/3/2017

14.8

13.0

HCI Equity, LLC (8)(9)(10)

Investment company

Member interest (100.00% interest)

4/1/2010

—

0.1

Herbert Park B.V. (9)(10)

Investment vehicle

Subordinated notes ($22.5 par due 10/2026)

1/3/2017

2.7

—

Imperial Capital Private Opportunities, LP (10)

Investment partnership

Limited partnership interest (80.00% interest)

5/10/2007

3.2

15.6

(2)

LightPoint CLO VII, Ltd. (9)(10)

Investment vehicle

Subordinated notes ($9.0 par due 5/2021)

1/3/2017

—

Montgomery Lane, LLC and Montgomery Lane, Ltd. (8)(9)(10)

Investment company

Common stock (100 shares)

1/3/2017

—

0.6

Common stock (50,000 shares)

1/3/2017

—

0.6

NYLIM Flatiron CLO 2006-1 LTD. (9)(10)

Investment vehicle

Subordinated securities (10,000 shares)

1/3/2017

—

Octagon Investment Partners XVIII, Ltd. (9)(10)

Investment vehicle

Subordinated notes ($16.4 par due 12/2024)

13.30%

1/3/2017

7.2

7.1

Octagon Investment Partners XIX, Ltd. (9)(10)

Investment vehicle

Subordinated notes ($25.0 par due 4/2026)

11.50%

1/3/2017

11.5

12.0

OHA Credit Partners XI, Ltd. (9)(10)

Investment vehicle

Subordinated notes ($17.8 par due 10/2028)

9.50%

1/3/2017

14.5

13.8

As of June 30, 2017

(dollar amounts in millions)

(unaudited)



Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost	Fair Value		Percentage of Net Assets
Partnership Capital Growth Fund I, L.P. (10)	Investment partnership	Limited partnership interest (25.00% interest)		6/16/2006	—	0.1	(2)
Partnership Capital Growth Investors III, L.P. (10)(23)	Investment partnership	Limited partnership interest (2.50% interest)		10/5/2011	2.5	3.5	(2)
PCG-Ares Sidecar Investment II, L.P. (10)(23)	Investment partnership	Limited partnership interest (100.00% interest)		10/31/2014	7.5	12.8	(2)
PCG-Ares Sidecar Investment, L.P. (10)(23)	Investment partnership	Limited partnership interest (100.00% interest)		5/22/2014	3.9	4.6	(2)
Piper Jaffray Merchant Banking Fund I, L.P. (10)(23)	Investment partnership	Limited partnership interest (2.00% interest)		8/16/2012	1.6	1.6
Qualium Investissement (9)(10)	Investment partnership	Class A common stock (99,000 shares)		1/3/2017	7.3	7.5
		Class B common stock (100,000 shares)		1/3/2017	0.1	0.1
		Class C common stock (48,939 shares)		1/3/2017	0.1	0.1
					7.5	7.7
Sapphire Valley CDO I, Ltd. (9)(10)	Investment vehicle	Subordinated notes ($14.0 par due 12/2022)		1/3/2017	—	—
Senior Direct Lending Program, LLC (8)(10)(25)	Co-investment vehicle	Subordinated certificates ($393.9 par due 12/2036)	9.15% (Libor + 8.00%/Q)(19)	7/27/2016	393.9	393.9
		Member interest (87.50% interest)		7/27/2016	—	—
					393.9	393.9
Senior Secured Loan Fund LLC (8)(11)(24)	Co-investment vehicle	Subordinated certificates ($2,004.0 par due 12/2024)	5.75% (18)	10/30/2009	1,938.4	1,920.5
		Member interest (87.50% interest)		10/30/2009	—	—
					1,938.4	1,920.5
Vitesse CLO, Ltd. (9)(10)	Investment vehicle	Preferred shares (20,000,000 shares)		1/3/2017	—	—
Voya CLO 2014-4, Ltd. (9)(10)	Investment vehicle	Subordinated notes ($26.7 par due 10/2026)	10.00%	1/3/2017	17.6	17.6
VSC Investors LLC (10)	Investment company	Membership interest (1.95% interest)		1/24/2008	0.3	1.3	(2)
					2,593.4	2,594.2		36.79%
Business Services
Accruent, LLC and Athena Parent, Inc. (22)	Real estate and facilities management software provider	Second lien senior secured loan ($53.0 par due 11/2022)	10.93% (Libor + 9.75%/Q)	9/19/2016	53.0	53.0	(2)(17)
		Series A preferred stock (778 shares)		9/19/2016	0.8	0.6	(2)
		Common stock (3,000 shares)		5/16/2016	3.0	2.3	(2)
					56.8	55.9
Achilles Acquisition LLC (22)	Benefits broker and outsourced workflow automation platform provider for brokers	First lien senior secured loan ($10.3 par due 6/2023)	7.22% (Libor + 6.00%/Q)	6/6/2017	10.3	10.2	(2)(17)
Acrisure, LLC, Acrisure Investors FO, LLC and Acrisure Investors SO, LLC (22)	Retail insurance advisor and brokerage	Second lien senior secured loan ($4.4 par due 11/2024)	10.54% (Libor + 9.25%/Q)	5/10/2017	4.4	4.4	(2)(17)
		Second lien senior secured loan ($9.7 par due 11/2024)	10.55% (Libor + 9.25%/Q)	11/22/2016	9.7	9.7	(2)(17)
		Second lien senior secured loan ($88.6 par due 11/2024)	10.55% (Libor + 9.25%/Q)	11/22/2016	88.6	88.6	(2)(17)
		Second lien senior secured loan ($15.0 par due 11/2024)	10.55% (Libor + 9.25%/Q)	5/10/2017	15.0	15.0	(2)(17)
		Membership interests (8,502,697 units)		11/18/2016	10.8	10.8	(2)
		Membership interests (2,125,674 units)		11/18/2016	2.7	2.7	(2)
					131.2	131.2
BeyondTrust Software, Inc. (22)	Management software solutions provider	First lien senior secured loan ($29.4 par due 9/2019)	8.00% (Libor + 7.00%/Q)	1/3/2017	29.1	28.6	(3)(17)
BluePay Processing, LLC	Payment processing solutions provider	Second lien senior secured loan ($32.8 par due 8/2022)	9.67% (Libor + 8.50%/Q)	1/3/2017	32.8	32.8	(2)(17)

As of June 30, 2017

(dollar amounts in millions)

(unaudited)



Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost	Fair Value		Percentage of Net Assets
Brandtone Holdings Limited (9)	Mobile communications and marketing services provider	First lien senior secured loan ($4.7 par due 11/2018)		5/11/2015	4.5	—	(2)(16)
		First lien senior secured loan ($3.1 par due 2/2019)		5/11/2015	2.9	—	(2)(16)
		Warrant to purchase up to 184,003 units of convertible preferred shares (expires 8/2026)		5/11/2015	—	—	(2)
					7.4	—
CallMiner, Inc.	Provider of cloud-based conversational analytics solutions	Second lien senior secured loan ($1.3 par due 5/2018)	10.70% (Libor + 9.50%/M)	7/23/2014	1.3	1.3	(2)(17)
		Second lien senior secured loan ($0.8 par due 8/2018)	10.70% (Libor + 9.50%/M)	7/23/2014	0.8	0.8	(2)(17)
		Warrant to purchase up to 2,350,636 shares of Series 1 preferred stock (expires 7/2024)		7/23/2014	—	—	(2)
					2.1	2.1
Cast & Crew Payroll, LLC	Payroll and accounting services provider to the entertainment industry	Second lien senior secured loan ($26.7 par due 8/2023)	9.05% (Libor + 7.75%/Q)	1/3/2017	26.7	26.7	(2)(17)
Clearwater Analytics, LLC (22)	Provider of integrated cloud-based investment portfolio management, accounting, reporting and analytics software	First lien senior secured revolving loan ($0.6 par due 9/2022)	8.72% (Libor + 7.50%/Q)	9/1/2016	0.6	0.6	(2)(17)
CMW Parent LLC (fka Black Arrow, Inc.)	Multiplatform media firm	Series A units (32 units)		9/11/2015	—	—	(2)
Columbo Midco Limited, Columbo Bidco Limited and Columbo Topco Limited (8)(9)	Compliance, accounting and tax consulting services provider	Preferred stock (34,028,135 shares)		1/3/2017	2.3	6.3
		Preferred stock (17,653,253 shares)		1/3/2017	21.6	24.3
		Preferred stock (3,232,666 shares)		1/3/2017	4.0	4.4
					27.9	35.0
Command Alkon, Incorporated and CA Note Issuer, LLC	Software solutions provider to the ready-mix concrete industry	Second lien senior secured loan ($10.0 par due 8/2020)	9.48% (Libor + 8.25%/Q)	9/28/2012	10.0	10.0	(2)(17)
		Second lien senior secured loan ($11.5 par due 8/2020)	9.37% (Libor + 8.25%/Q)	9/28/2012	11.5	11.5	(2)(17)
		Second lien senior secured loan ($26.5 par due 8/2020)	9.48% (Libor + 8.25%/Q)	9/28/2012	26.5	26.5	(2)(17)
		Senior subordinated loan ($25.0 par due 8/2021)	14.00% PIK	8/8/2014	25.0	25.0	(2)
					73.0	73.0
Compusearch Software Systems, Inc.	Provider of enterprise software and services for organizations in the public sector	Second lien senior secured loan ($51.0 par due 11/2021)	9.93% (Libor + 8.75%/Q)	1/3/2017	51.0	51.0	(2)(17)
Compuware Parent, LLC	Web and mobile cloud performance testing and monitoring services provider	Class A-1 common stock (4,132 units)		12/15/2014	2.3	1.8	(2)
		Class B-1 common stock (4,132 units)		12/15/2014	0.5	0.4	(2)
		Class C-1 common stock (4,132 units)		12/15/2014	0.3	0.2	(2)
		Class A-2 common stock (4,132 units)		12/15/2014	—	—	(2)
		Class B-2 common stock (4,132 units)		12/15/2014	—	—	(2)
		Class C-2 common stock (4,132 units)		12/15/2014	—	—	(2)
					3.1	2.4
Convergint Technologies LLC (22)	Integrated services provider for security, fire and life safety	Second lien senior secured loan ($11.0 par due 12/2020)	9.82% (Libor + 8.50%/Q)	1/3/2017	11.0	11.0	(2)(17)

As of June 30, 2017

(dollar amounts in millions)

(unaudited)



Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost	Fair Value		Percentage of Net Assets
		Second lien senior secured loan ($6.0 par due 12/2020)	9.91% (Libor + 8.50%/Q)	1/3/2017	6.0	6.0	(2)(17)
		Second lien senior secured loan ($11.0 par due 12/2020)	9.92% (Libor + 8.50%/Q)	1/3/2017	11.0	11.0	(2)(17)
		Second lien senior secured loan ($75.0 par due 12/2020)	9.43% (Libor + 8.00%/Q)	1/3/2017	75.0	75.0	(2)(17)
					103.0	103.0
Datapipe, Inc.	Data center provider	Second lien senior secured loan ($29.5 par due 9/2019)	9.17% (Libor + 8.00%/Q)	1/3/2017	28.5	28.6	(2)(17)
Directworks, Inc. and Co-Exprise Holdings, Inc.	Provider of cloud-based software solutions for direct materials sourcing and supplier management for manufacturers	First lien senior secured loan ($1.9 par due 4/2018)	10.25% (Libor + 9.25%/M)	12/19/2014	1.9	1.7	(2)(17)
		Warrant to purchase up to 1,875,000 shares of Series 1 preferred stock (expires 12/2024)		12/19/2014	—	—	(2)
					1.9	1.7
DTI Holdco, Inc. and OPE DTI Holdings, Inc. (22)	Provider of legal process outsourcing and managed services	First lien senior secured loan ($4.1 par due 9/2023)	6.42% (Libor + 5.25%/Q)	9/23/2016	4.1	4.1	(4)(17)
		Class A common stock (7,500 shares)		8/19/2014	7.5	6.8	(2)
		Class B common stock (7,500 shares)		8/19/2014	—	—	(2)
					11.6	10.9
Emergency Communications Network, LLC (22)	Provider of mission critical emergency mass notification solutions	First lien senior secured loan ($61.2 par due 6/2023)	7.30% (Libor + 6.25%/Q)	6/1/2017	60.7	60.6	(2)(17)
Entertainment Partners, LLC and Entertainment Partners Canada Inc. (22)	Provider of entertainment workforce and production management solutions	First lien senior secured loan ($7.7 par due 5/2022)	6.50% (Libor + 5.50%/Q)	5/8/2017	7.3	7.6	(2)(9)(17)
		First lien senior secured loan ($12.8 par due 5/2023)	6.81% (Libor + 5.75%/Q)	5/8/2017	12.8	12.7	(2)(17)
		First lien senior secured loan ($15.2 par due 5/2023)	6.81% (Libor + 5.75%/Q)	5/8/2017	15.2	15.1	(3)(17)
		First lien senior secured loan ($14.6 par due 5/2023)	6.93% (Libor + 5.75%/Q)	5/8/2017	14.6	14.5	(2)(17)
		First lien senior secured loan ($17.4 par due 5/2023)	6.93% (Libor + 5.75%/Q)	5/8/2017	17.4	17.2	(3)(17)
		First lien senior secured loan ($14.6 par due 5/2023)	7.19% (Libor + 5.75%/Q)	5/8/2017	14.6	14.5	(2)(17)
		First lien senior secured loan ($17.4 par due 5/2023)	7.19% (Libor + 5.75%/Q)	5/8/2017	17.4	17.2	(3)(17)
					99.3	98.8
EN Engineering, L.L.C. (22)	National utility services firm providing engineering and consulting services to natural gas, electric power and other energy and industrial end markets	First lien senior secured revolving loan	-	6/30/2015	—	—	(20)
Faction Holdings, Inc. and The Faction Group LLC (fka PeakColo Holdings, Inc.) (22)	Wholesaler of cloud-based software applications and services	First lien senior secured loan ($8.0 par due 1/2021)	10.41% (Libor + 9.25%/M)	1/6/2017	8.0	8.0	(2)(17)
		Warrant to purchase up to 5,185 shares of Series A preferred stock (expires 1/2027)		1/6/2017	—	0.2	(2)
		Warrant to purchase up to 1,481 shares of Series A preferred stock (expires 12/2025)		12/3/2015	—	0.1	(2)
		Warrant to purchase up to 2,037 shares of Series A preferred stock (expires 11/2024)		11/3/2014	0.1	0.1	(2)

As of June 30, 2017

(dollar amounts in millions)

(unaudited)



Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost	Fair Value		Percentage of Net Assets
					8.1	8.4
First Insight, Inc.	Software company providing merchandising and pricing solutions to companies worldwide	Warrant to purchase up to 122,827 units of Series C preferred stock (expires 3/2024)		3/20/2014	—	—	(2)
Flexera Software LLC	Provider of software and software applications that manages application usage, compliance and security risk	Second lien senior secured loan ($5.0 par due 4/2021)	8.30% (Libor + 7.00%/Q)	1/3/2017	4.8	5.0	(2)(17)
GTCR Valor Companies, Inc.	Public relations software as service provider	Second lien senior secured loan ($100.0 par due 6/2024)	10.69% (Libor + 9.50%/Q)	1/3/2017	98.1	100.0	(2)(17)
IfByPhone Inc.	Voice-based marketing automation software provider	Warrant to purchase up to 124,300 shares of Series C preferred stock (expires 10/2022)		10/15/2012	0.1	0.1	(2)
Infogix, Inc. and Infogix Parent Corporation	Enterprise data analytics and integrity software solutions provider	First lien senior secured loan ($54.6 par due 12/2021)	7.80% (Libor + 6.50%/Q)	1/3/2017	54.6	54.6	(2)(14)(17)
		First lien senior secured loan ($34.9 par due 12/2021)	7.80% (Libor + 6.50%/Q)	1/3/2017	34.9	34.9	(3)(14)(17)
		Series A preferred stock (2,475 shares)		1/3/2017	2.5	2.8
		Common stock (1,297,768 shares)		1/3/2017	—	1.7
					92.0	94.0
Inmar, Inc.	Technology-driven solutions provider for retailers, wholesalers and manufacturers	Second lien senior secured loan ($28.3 par due 5/2025)	11.25% (Base Rate + 7.00%/Q)	4/25/2017	27.9	27.9	(2)(17)
Interactions Corporation	Developer of a speech recognition software based customer interaction system	Second lien senior secured loan ($5.9 par due 3/2021)	9.85% (Libor + 8.60%/M)	6/16/2015	5.8	5.9	(2)(15)(17)
		Second lien senior secured loan ($19.1 par due 3/2021)	9.85% (Libor + 8.60%/M)	6/16/2015	18.9	19.2	(5)(15)(17)
		Warrant to purchase up to 68,187 shares of Series G-3 convertible preferred stock (expires 6/2022)		6/16/2015	0.3	0.3	(2)
					25.0	25.4
InterVision Systems, LLC and InterVision Holdings, LLC	Provider of cloud based IT solutions, infrastructure and services	First lien senior secured loan ($32.5 par due 5/2022)	10.06% (Libor + 8.65%/Q)	5/31/2017	32.5	32.5	(2)(17)
		Class A membership units (1,000 units)		5/31/2017	1.0	1.0
					33.5	33.5
iParadigms Holdings, LLC	Anti-plagiarism software provider to the education market	Second lien senior secured loan ($39.5 par due 7/2022)	8.55% (Libor + 7.25%/Q)	1/3/2017	38.8	38.7	(2)(17)
iPipeline, Inc., Internet Pipeline, Inc. and iPipeline Holdings, Inc. (22)	Provider of SaaS-based software solutions to the insurance and financial services industry	First lien senior secured loan ($6.7 par due 8/2022)	7.42% (Libor + 6.25%/Q)	6/15/2017	6.7	6.7	(2)(17)
		First lien senior secured loan ($46.4 par due 8/2022)	8.48% (Libor + 7.25%/Q)	8/4/2015	46.4	46.4	(3)(17)
		First lien senior secured loan ($14.7 par due 8/2022)	8.48% (Libor + 7.25%/Q)	8/4/2015	14.7	14.7	(4)(17)
		Preferred stock (1,100 shares)		8/4/2015	1.1	2.9	(2)
		Common stock (668,781 shares)		8/4/2015	—	—	(2)
					68.9	70.7

As of June 30, 2017

(dollar amounts in millions)

(unaudited)



Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost	Fair Value		Percentage of Net Assets
IQMS	Provider of enterprise resource planning and manufacturing execution software for small and midsized manufacturers	First lien senior secured loan ($27.8 par due 3/2022)	9.48% (Libor + 8.25%/Q)	3/28/2017	27.8	27.8	(2)(17)
		First lien senior secured loan ($10.0 par due 3/2022)	9.48% (Libor + 8.25%/Q)	3/28/2017	10.0	10.0	(4)(17)
					37.8	37.8
Iron Bow Technologies, LLC	Provider and value added reseller of information technology products and solutions	Second lien senior secured loan ($9.9 par due 2/2021)	12.80% (Libor + 11.75%/Q)	1/3/2017	9.9	9.9	(2)(17)
IronPlanet, Inc.	Online auction platform provider for used heavy equipment	Warrant to purchase to up to 133,333 shares of Series C preferred stock (expires 9/2023)		9/23/2013	0.2	0.2	(2)
Itel Laboratories, Inc. (22)	Data services provider for building materials to property insurance industry	Preferred units (1,798,391 units)		6/29/2012	1.0	1.6	(2)
LLSC Holdings Corporation (dba Lawrence Merchandising Services) (8)	Marketing services provider	Series A preferred stock (9,000 shares)		1/3/2017	19.2	20.6
		Common stock (1,000 shares)		1/3/2017	—	—
		Warrant to purchase up to 675 shares of common stock (expires 9/2017)		1/3/2017	—	—
					19.2	20.6
Miles 33 (Finance) Limited (8)(9)	Software provider to the regional media industry and magazines	First lien senior secured loan ($1.6 par due 9/2018)	6.75% (Libor + 6.50%/Q)	1/3/2017	1.5	1.6
		First lien senior secured loan ($3.9 par due 9/2018)	6.75% (Libor + 6.50%/Q)	1/3/2017	3.7	3.9
		Senior subordinated loan ($16.3 par due 9/2021)	4.75% (Libor + 4.50%/Q)	1/3/2017	9.5	16.0
		Preferred stock (19,500,000 shares)		1/3/2017	—	—
		Preferred stock (900,000 shares)		1/3/2017	—	—
		Common stock (600,000 shares)		1/3/2017	—	—
					14.7	21.5
Ministry Brands, LLC and MB Parent HoldCo, L.P. (22)	Software and payment services provider to faith-based institutions	First lien senior secured loan ($6.5 par due 12/2022)	6.23% (Libor + 5.00%/Q)	4/6/2017	6.5	6.5	(2)(17)
		First lien senior secured loan ($16.7 par due 12/2022)	6.23% (Libor + 5.00%/Q)	4/6/2017	16.6	16.7	(2)(17)
		Second lien senior secured loan ($2.9 par due 6/2023)	10.48% (Libor + 9.25%/Q)	4/6/2017	2.9	2.9	(2)(17)
		Second lien senior secured loan ($9.2 par due 6/2023)	10.48% (Libor + 9.25%/Q)	4/6/2017	9.2	9.2	(2)(17)
		Second lien senior secured loan ($16.6 par due 6/2023)	10.48% (Libor + 9.25%/Q)	12/2/2016	16.6	16.6	(2)(17)
		Second lien senior secured loan ($90.0 par due 6/2023)	10.48% (Libor + 9.25%/Q)	12/2/2016	89.3	90.0	(2)(17)
		Class A units (500,000 units)		12/2/2016	5.0	6.8	(2)
					146.1	148.7
Mitchell International, Inc.	Provider of mission-critical software and solutions to the property and casualty claims industry	Second lien senior secured loan ($17.0 par due 10/2021)	8.67% (Libor + 7.50%/Q)	1/3/2017	17.0	17.0	(2)(17)
MVL Group, Inc. (8)	Marketing research provider	Senior subordinated loan ($0.5 par due 7/2012)		4/1/2010	0.2	0.2	(2)(16)
		Common stock (560,716 shares)		4/1/2010	—	—	(2)
					0.2	0.2
NAS, LLC, Nationwide Marketing Group, LLC and Nationwide Administrative Services, Inc.	Buying and marketing services organization for appliance, furniture and consumer electronics dealers	Second lien senior secured loan ($24.1 par due 12/2021)	9.80% (Libor + 8.75%/Q)	6/1/2015	24.1	23.6	(2)(17)

As of June 30, 2017

(dollar amounts in millions)

(unaudited)



Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost	Fair Value		Percentage of Net Assets
Novetta Solutions, LLC	Provider of advanced analytics solutions for the government, defense and commercial industries	First lien senior secured loan ($12.8 par due 10/2022)	6.30% (Libor + 5.00%/Q)	1/3/2017	12.3	12.3	(2)(17)
		Second lien senior secured loan ($31.0 par due 10/2023)	9.80% (Libor + 8.50%/Q)	1/3/2017	28.4	28.2	(2)(17)
					40.7	40.5
Palermo Finance Corporation (22)	Provider of mission-critical integrated public safety software and services to local, state, and federal agencies	First lien senior secured revolving loan	-	4/17/2017	—	—	(2)(20)
		First lien senior secured loan ($14.1 par due 4/2023)	5.66% (Libor + 4.50%/Q)	4/17/2017	13.9	13.9	(4)(17)
		Second lien senior secured loan ($54.3 par due 10/2023)	9.66% (Libor + 8.50%/Q)	4/17/2017	54.3	54.3	(2)(17)
					68.2	68.2
Park Place Technologies, LLC	Provider of third party hardware maintenance and support services for IT data centers	Second lien senior secured loan ($41.5 par due 12/2022)	10.22% (Libor + 9.00%/Q)	1/3/2017	41.5	41.5	(2)(17)
PayNearMe, Inc.	Electronic cash payment system provider	Warrant to purchase up to 195,726 shares of Series E preferred stock (expires 3/2023)		3/11/2016	0.2	—	(2)(5)
Pegasus Intermediate Holdings, LLC (22)	Plant maintenance and scheduling process software provider	First lien senior secured loan ($1.3 par due 11/2022)	7.37% (Libor + 6.25%/Q)	11/7/2016	1.3	1.3	(2)(17)
PHL Investors, Inc., and PHL Holding Co. (8)	Mortgage services	Class A common stock (576 shares)		7/31/2012	3.8	—	(2)
PHNTM Holdings, Inc. and Planview Parent, Inc.	Provider of project and portfolio management software	First lien senior secured loan ($36.8 par due 1/2023)	6.48% (Libor + 5.25%/Q)	1/27/2017	36.1	36.8	(2)(17)
		Second lien senior secured loan ($62.0 par due 7/2023)	10.98% (Libor + 9.75%/Q)	1/27/2017	61.1	62.0	(2)(17)
		Class A common shares (990 shares)		1/27/2017	1.0	1.0	(2)
		Class B common shares (168,329 shares)		1/27/2017	—