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 March 31, 2018

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 April 26, 2018
Common stock, $0.001 par value		426,298,200

ARES CAPITAL CORPORATION

INDEX



Part I.	Financial Information

Item 1.	Financial Statements

	Consolidated Balance Sheet as of March 31, 2018 (unaudited) and December 31, 2017	3

	Consolidated Statement of Operations for the three ended March 31, 2018 and 2017 (unaudited)	4

	Consolidated Schedule of Investments as of March 31, 2018 (unaudited) and December 31, 2017	5

	Consolidated Statement of Stockholders’ Equity for the three months ended March 31, 2018 (unaudited)	85

	Consolidated Statement of Cash Flows for the three months ended March 31, 2018 and 2017 (unaudited)	86

	Notes to Consolidated Financial Statements (unaudited)	87

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	122

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	143

Item 4.	Controls and Procedures	144

Part II.	Other Information

Item 1.	Legal Proceedings	144

Item 1A.	Risk Factors	145

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	145

Item 3.	Defaults Upon Senior Securities	146

Item 4.	Mine Safety Disclosures	146

Item 5.	Other Information	146

Item 6.	Exhibits	146

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(in millions, except per share data)



	As of
	March 31, 2018			December 31, 2017
	(unaudited)
ASSETS
Investments at fair value
Non-controlled/non-affiliate company investments	$	9,803		$	10,010
Non-controlled affiliate company investments	240			216
Controlled affiliate company investments	2,156			1,615
Total investments at fair value (amortized cost of $12,164 and $11,905, respectively)	12,199			11,841
Cash and cash equivalents	302			316
Interest receivable	89			93
Receivable for open trades	4			1
Other assets	99			96
Total assets	$	12,693		$	12,347
LIABILITIES
Debt	$	5,118		$	4,854
Base management fees payable	46			44
Income based fees payable	28			27
Capital gains incentive fees payable	99			79
Accounts payable and other liabilities	155			181
Interest and facility fees payable	44			64
Payable for open trades	25			—
Total liabilities	5,515			5,249
Commitments and contingencies (Note 7)
STOCKHOLDERS’ EQUITY
Common stock, par value $0.001 per share, 600 common shares authorized; 426 common shares issued and outstanding	—			—
Capital in excess of par value	7,192			7,192
Accumulated overdistributed net investment income	(99		)	(81		)
Accumulated net realized gains on investments, foreign currency transactions, extinguishment of debt and other assets	60			72
Net unrealized gains (losses) on investments, foreign currency and other transactions	25			(85		)
Total stockholders’ equity	7,178			7,098
Total liabilities and stockholders’ equity	$	12,693		$	12,347
NET ASSETS PER SHARE	$	16.84		$	16.65

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 March 31,
	2018			2017
INVESTMENT INCOME:
From non-controlled/non-affiliate company investments:
Interest income from investments (excluding payment-in-kind (“PIK”) interest income)	$	201		$	161
PIK interest income from investments	12			7
Capital structuring service fees	26			12
Dividend income	9			6
Other income	6			4
Total investment income from non-controlled/non-affiliate company investments	254			190
From non-controlled affiliate company investments:
Interest income from investments (excluding PIK interest income)	4			3
PIK interest income from investments	1			1
Total investment income from non-controlled affiliate company investments	5			4
From controlled affiliate company investments:
Interest income from investments (excluding PIK interest income)	30			56
PIK interest income from investments	6			3
Capital structuring service fees	3			—
Dividend income	13			18
Management and other fees	1			3
Other income	5			1
Total investment income from controlled affiliate company investments	58			81
Total investment income	317			275
EXPENSES:
Interest and credit facility fees	60			55
Base management fees	46			39
Income based fees	38			32
Capital gain incentive fees	20			16
Administrative fees	3			3
Professional fees and other costs related to the American Capital Acquisition	3			26
Other general and administrative	8			8
Total expenses	178			179
Waiver of income based fees	(10		)	—
Total expenses, net of waiver of income based fees	168			179
NET INVESTMENT INCOME BEFORE INCOME TAXES	149			96
Income tax expense, including excise tax	5			2
NET INVESTMENT INCOME	144			94
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS, FOREIGN CURRENCY AND OTHER TRANSACTIONS:
Net realized gains (losses):
Non-controlled/non-affiliate company investments	—			6
Controlled affiliate company investments	—			7
Foreign currency and other transactions	(12		)	(11		)
Net realized gains (losses)	(12		)	2
Net unrealized gains (losses):
Non-controlled/non-affiliate company investments	16			(14		)
Non-controlled affiliate company investments	2			1
Controlled affiliate company investments	78			31
Foreign currency and other transactions	14			4
Net unrealized gains	110			22
Net realized and unrealized gains from investments, foreign currency and other transactions	98			24
NET INCREASE IN STOCKHOLDERS’ EQUITY RESULTING FROM OPERATIONS	$	242		$	118
BASIC AND DILUTED EARNINGS PER COMMON SHARE (see Note 10)	$	0.57		$	0.28
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING (see Note 10)	426			422

See accompanying notes to consolidated financial statements.

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of March 31, 2018

(dollar amounts in millions)

(unaudited)



Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost		Fair Value			Percentage of Net Assets
Healthcare Services
Absolute Dental Management LLC and ADM Equity, LLC	Dental services provider	First lien senior secured loan ($18.9 par due 1/2022)	11.63% (Libor + 9.33%/Q)	1/5/2016	$	18.9	$	18.0	(2)(19)
		First lien senior secured loan ($5.1 par due 1/2022)	11.63% (Libor + 9.33%/Q)	1/5/2016	5.1		4.8		(4)(19)
		Class A preferred units (4,000,000 units)		1/5/2016	4.0		1.1		(2)
		Class A common units (4,000,000 units)		1/5/2016	—		—		(2)
					28.0		23.9
Acessa Health Inc. (fka HALT Medical, Inc.)	Medical supply provider	Common stock (569,823 shares)		6/22/2017	0.1		—
ADCS Billings Intermediate Holdings, LLC (23)	Dermatology practice	First lien senior secured revolving loan ($2.5 par due 5/2022)	9.50% (Base Rate + 4.75%/Q)	5/18/2016	2.5		2.5		(2)(19)(22)
ADG, LLC and RC IV GEDC Investor LLC (23)	Dental services provider	First lien senior secured revolving loan ($1.0 par due 9/2022)	6.46% (Libor + 4.75%/M)	9/28/2016	1.0		1.0		(2)(19)
		First lien senior secured revolving loan ($1.0 par due 9/2022)	6.57% (Libor + 4.75%/M)	9/28/2016	1.0		0.9		(2)(19)
		First lien senior secured revolving loan ($8.5 par due 9/2022)	6.63% (Libor + 4.75%/M)	9/28/2016	8.5		8.3		(2)(19)
		First lien senior secured revolving loan ($0.8 par due 9/2022)	8.50% (Base Rate + 3.75%/Q)	9/28/2016	0.8		0.8		(2)(19)
		Second lien senior secured loan ($87.5 par due 3/2024)	10.88% (Libor + 9.00%/M)	9/28/2016	87.5		81.4		(2)(19)
		Membership units (3,000,000 units)		9/28/2016	3.0		1.9		(2)
					101.8		94.3
Air Medical Group Holdings, Inc. and Air Medical Buyer Corp.	Emergency air medical services provider	Senior subordinated loan ($182.7 par due 3/2026)	9.64% (Libor + 7.88%/M)	3/14/2018	182.7		182.7		(2)(19)
		Warrant to purchase up to 115,733 units of common stock (expires 3/2028)		3/14/2018	0.9		0.9		(2)
					183.6		183.6
Alcami Holdings, LLC (8)(23)	Outsourced drug development services provider	First lien senior secured revolving loan ($7.7 par due 10/2019)	7.16% (Libor + 5.50%/M)	1/3/2017	7.7		7.7		(2)(19)
		First lien senior secured revolving loan ($2.0 par due 10/2019)	7.21% (Libor + 5.50%/M)	1/3/2017	2.0		2.0		(2)(19)
		First lien senior secured revolving loan ($15.9 par due 10/2019)	7.29% (Libor + 5.50%/M)	1/3/2017	15.9		15.9		(2)(19)
		First lien senior secured loan ($10.0 par due 10/2020)	7.38% (Libor + 5.50%/M)	1/3/2017	10.0		10.0		(2)(19)
		First lien senior secured loan ($95.4 par due 10/2020)	7.38% (Libor + 5.50%/M)	1/3/2017	95.4		95.4		(3)(19)
		First lien senior secured loan ($0.2 par due 10/2020)	11.25% (Base Rate + 6.50%/Q)	1/3/2017	0.2		0.2		(3)(19)
		Senior subordinated loan ($37.5 par due 10/2020)	14.75% PIK	1/3/2017	37.5		37.5		(2)
		Senior subordinated loan ($38.0 par due 10/2020)	15.25% PIK	1/3/2017	25.8		38.0		(2)
		Senior subordinated loan ($25.0 par due 10/2020)	12.25%	1/3/2017	25.0		25.0		(2)
		Senior subordinated loan ($30.0 par due 10/2020)	11.75%	1/3/2017	30.0		30.0		(2)
		Senior subordinated loan ($30.0 par due 10/2020)	12.00%	1/3/2017	30.0		30.0		(2)
		Series R preferred membership units (30,000 units)		1/3/2017	—		155.6
		Series R-2 preferred membership units (54,936 units)		1/3/2017	—		86.2
					279.5		533.5

As of March 31, 2018

(dollar amounts in millions)

(unaudited)



Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost	Fair Value		Percentage of Net Assets
Alegeus Technologies Holdings Corp.	Benefits administration and transaction processing provider	Preferred stock (2,997 shares)		12/13/2013	3.1	2.6
		Common stock (3 shares)		12/13/2013	—	—
					3.1	2.6
Alteon Health, LLC	Provider of physician management services	First lien senior secured loan ($3.5 par due 9/2022)	7.80% (Libor + 5.50%/Q)	5/15/2017	3.5	3.0	(2)(19)
American Academy Holdings, LLC (23)	Provider of education, training, certification, networking, and consulting services to medical coders and other healthcare professionals	First lien senior secured revolving loan ($0.9 par due 12/2022)	8.55% (Libor + 6.25%/Q)	12/15/2017	0.9	0.9	(2)(19)
		First lien senior secured loan ($199.8 par due 12/2022)	8.01% (Libor + 6.25%/S)	12/15/2017	199.8	197.8	(2)(19)
		Senior subordinated loan ($76.2 par due 6/2023)	15.76% (Libor + 8.00% Cash, 6.00% PIK/S)	12/15/2017	76.2	74.6	(2)(19)
					276.9	273.3
AwarePoint Corporation	Healthcare technology platform developer	First lien senior secured loan ($7.1 par due 12/2019)		9/5/2014	6.9	3.5	(2)(18)
		Warrant to purchase up to 3,213,367 shares of Series 1 preferred stock (expires 9/2024)		11/14/2014	—	—	(2)
					6.9	3.5
Bambino CI Inc. (23)	Manufacturer and provider of single-use obstetrics products	First lien senior secured revolving loan ($1.1 par due 10/2022)	7.88% (Libor + 6.00%/M)	10/17/2017	1.1	1.1	(2)(19)
		First lien senior secured loan ($43.6 par due 10/2023)	7.88% (Libor + 6.00%/M)	10/17/2017	43.6	43.2	(2)(19)
					44.7	44.3
CCS Intermediate Holdings, LLC and CCS Group Holdings, LLC (23)	Correctional facility healthcare operator	First lien senior secured revolving loan ($4.1 par due 7/2019)	6.30% (Libor + 4.00%/Q)	7/23/2014	4.1	3.8	(2)(19)(22)
		First lien senior secured loan ($6.5 par due 7/2021)	6.30% (Libor + 4.00%/Q)	7/23/2014	6.5	6.2	(2)(19)
		Second lien senior secured loan ($135.0 par due 7/2022)	10.36% (Libor + 8.38%/Q)	7/23/2014	134.3	124.2	(2)(19)
		Class A units (1,000,000 units)		8/19/2010	—	1.1	(2)
					144.9	135.3
Comprehensive EyeCare Partners, LLC (23)	Vision care practice management company	First lien senior secured loan ($5.4 par due 2/2024)	8.25% (Base Rate + 3.50%/Q)	2/14/2018	5.4	5.4	(2)(19)
Correctional Medical Group Companies, Inc.	Correctional facility healthcare operator	First lien senior secured loan ($48.8 par due 9/2021)	10.47% (Libor + 8.38%/Q)	9/29/2015	48.8	48.8	(3)(19)
		First lien senior secured loan ($3.1 par due 9/2021)	10.47% (Libor + 8.38%/Q)	9/29/2015	3.1	3.1	(2)(19)
					51.9	51.9
CSHM LLC (8)	Dental services provider	Class A membership units (1,979 units)		1/3/2017	—	—
D4C Dental Brands HoldCo, Inc. and Bambino Group Holdings, LLC (23)	Dental services provider	Class A preferred units (1,000,000 units)		12/21/2016	1.0	1.3	(2)
DCA Investment Holding, LLC (23)	Multi-branded dental practice management	First lien senior secured revolving loan	—	7/2/2015	—	—	(2)(21)
		First lien senior secured loan ($18.7 par due 7/2021)	7.56% (Libor + 5.25%/Q)	7/2/2015	18.6	18.3	(4)(19)
					18.6	18.3
Emerus Holdings, Inc. (23)	Freestanding 24-hour emergency care micro-hospitals operator	First lien senior secured revolving loan ($0.8 par due 9/2020)	6.38% (Libor + 4.50%/M)	3/14/2017	0.8	0.7	(2)(19)
		First lien senior secured revolving loan ($0.8 par due 9/2020)	6.33% (Libor + 4.50%/M)	3/14/2017	0.8	0.7	(2)(19)
		First lien senior secured loan ($3.2 par due 9/2021)	6.38% (Libor + 4.50%/M)	3/14/2017	2.9	2.8	(2)(19)
					4.5	4.2

As of March 31, 2018

(dollar amounts in millions)

(unaudited)



Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost	Fair Value		Percentage of Net Assets
GHX Ultimate Parent Corporation, Commerce Parent, Inc. and Commerce Topco, LLC	On-demand supply chain automation solutions provider to the healthcare industry	Second lien senior secured loan ($103.7 par due 6/2025)	10.30% (Libor + 8.00%/Q)	6/30/2017	102.8	103.7	(2)(19)
		Series A preferred stock (110,425 shares)	13.06% PIK (Libor + 10.75%/Q)	6/30/2017	121.2	121.3	(2)(19)
		Class A units (14,013,303 units)		6/30/2017	14.0	15.9	(2)
					238.0	240.9
Greenphire, Inc. and RMCF III CIV XXIX, L.P	Software provider for clinical trial management	Limited partnership interest (99.90% interest)		12/19/2014	1.0	2.5	(2)
Heartland Dental, LLC	Detanl services provider	Dental services provider ($27.8 par due 7/2024)	10.38% (Libor + 8.50%/M)	7/31/2017	27.4	28.3	(2)(19)
Hygiena Borrower LLC (23)	Adenosine triphosphate testing technology provider	First lien senior secured revolving loan	—	8/26/2016	—	—	(2)(21)
		Second lien senior secured loan ($10.0 par due 8/2023)	11.30% (Libor + 9.00%/Q)	8/26/2016	10.0	10.0	(2)(19)
		Second lien senior secured loan ($10.7 par due 8/2023)	11.30% (Libor + 9.00%/Q)	2/27/2017	10.7	10.7	(2)(19)
					20.7	20.7
Intermedix Corporation	Revenue cycle management provider to the emergency healthcare industry	First lien senior secured loan ($72.3 par due 12/2019)	6.45% (Libor + 4.75%/Q)	7/26/2017	72.3	72.3	(2)(19)
		First lien senior secured loan ($79.7 par due 12/2019)	6.67% (Libor + 4.75%/Q)	7/26/2017	79.7	79.7	(2)(19)
		First lien senior secured loan ($35.2 par due 12/2019)	6.45% (Libor + 4.75%/Q)	7/26/2017	35.2	35.2	(3)(19)
		First lien senior secured loan ($38.8 par due 12/2019)	6.67% (Libor + 4.75%/Q)	7/26/2017	38.8	38.8	(3)(19)
		First lien senior secured loan ($9.3 par due 12/2019)	6.45% (Libor + 4.75%/Q)	7/26/2017	9.3	9.3	(4)(19)
		First lien senior secured loan ($10.3 par due 12/2019)	6.67% (Libor + 4.75%/Q)	7/26/2017	10.3	10.3	(4)(19)
		Second lien senior secured loan ($112.0 par due 6/2020)	10.24% (Libor + 8.25%/Q)	12/27/2012	112.0	112.0	(2)(19)
					357.6	357.6
JDC Healthcare Management, LLC (23)	Dental services provider	First lien senior secured revolving loan ($0.5 par due 4/2022)	8.22% (Libor + 6.50%/M)	4/10/2017	0.5	0.5	(2)(19)
		First lien senior secured revolving loan ($2.0 par due 4/2022)	8.38% (Libor + 6.50%/M)	4/10/2017	2.0	2.0	(2)(19)
		First lien senior secured loan ($4.2 par due 4/2023)	8.76% (Libor + 6.50%/A)	4/10/2017	4.2	4.1	(2)(19)
		First lien senior secured loan ($9.9 par due 4/2023)	8.38% (Libor + 6.50%/M)	4/10/2017	9.9	9.7	(2)(19)
		First lien senior secured loan ($19.9 par due 4/2023)	8.38% (Libor + 6.50%/M)	4/10/2017	19.9	19.5	(4)(19)
					36.5	35.8
KBHS Acquisition, LLC (d/b/a Alita Care, LLC) (23)	Provider of behavioral health services	First lien senior secured revolving loan ($0.3 par due 3/2022)	6.74% (Libor + 5.00%/M)	3/17/2017	0.3	0.2	(2)(19)
		First lien senior secured revolving loan ($0.1 par due 3/2022)	6.79% (Libor + 5.00%/M)	3/17/2017	0.1	0.1	(2)(19)
		First lien senior secured revolving loan ($0.3 par due 3/2022)	6.85% (Libor + 5.00%/M)	3/17/2017	0.3	0.2	(2)(19)
		First lien senior secured revolving loan ($1.7 par due 3/2022)	6.88% (Libor + 5.00%/M)	3/17/2017	1.7	1.7	(2)(19)
		First lien senior secured revolving loan ($0.3 par due 3/2022)	8.75% (Base Rate + 4.00%/Q)	3/17/2017	0.3	0.3	(2)(19)
					2.7	2.5

As of March 31, 2018

(dollar amounts in millions)

(unaudited)



Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost	Fair Value		Percentage of Net Assets
Key Surgical LLC (23)	Provider of sterile processing, operating room and instrument care supplies for hospitals	First lien senior secured loan ($18.4 par due 6/2023)	5.75% (EURIBOR + 4.75%/Q)	6/1/2017	16.8	18.4	(2)(19)
		First lien senior secured loan ($4.3 par due 6/2023)	6.76% (Libor + 4.75%/Q)	6/1/2017	4.3	4.3	(4)(19)
					21.1	22.7
MB2 Dental Solutions, LLC (23)	Dental services provider	First lien senior secured revolving loan ($2.1 par due 9/2023)	8.50% (Base Rate + 3.75%/Q)	9/29/2017	2.1	2.1	(2)(19)
		First lien senior secured loan ($4.7 par due 9/2023)	7.04% (Libor + 4.75%/Q)	9/29/2017	4.7	4.7	(2)(19)
					6.8	6.8
MCH Holdings, Inc. and MC Acquisition Holdings I, LLC	Healthcare professional provider	First lien senior secured loan ($65.3 par due 1/2020)	7.29% (Libor + 5.50%/M)	7/26/2017	65.3	64.6	(2)(19)
		First lien senior secured loan ($79.0 par due 1/2020)	7.38% (Libor + 5.50%/M)	7/26/2017	79.0	78.3	(2)(19)
		First lien senior secured loan ($9.0 par due 1/2020)	7.29% (Libor + 5.50%/M)	7/26/2017	9.0	9.0	(4)(19)
		First lien senior secured loan ($11.0 par due 1/2020)	7.38% (Libor + 5.50%/M)	7/26/2017	11.0	10.8	(4)(19)
		Class A units (1,438,643 shares)		1/17/2014	1.5	1.0	(2)
					165.8	163.7
MW Dental Holding Corp. (23)	Dental services provider	First lien senior secured revolving loan ($2.3 par due 4/2021)	8.93% (Libor + 6.75%/Q)	4/12/2011	2.3	2.3	(2)(19)
		First lien senior secured revolving loan ($2.2 par due 4/2021)	9.04% (Libor + 6.75%/Q)	4/12/2011	2.2	2.2	(2)(19)
		First lien senior secured loan ($2.3 par due 4/2021)	9.04% (Libor + 6.75%/Q)	3/19/2018	2.3	2.3	(2)(19)
		First lien senior secured loan ($0.6 par due 4/2021)	8.93% (Libor + 6.75%/Q)	3/19/2018	0.6	0.6	(2)(19)
		First lien senior secured loan ($58.7 par due 4/2021)	9.05% (Libor + 6.75%/Q)	4/12/2011	58.7	58.7	(2)(19)
		First lien senior secured loan ($46.6 par due 4/2021)	9.05% (Libor + 6.75%/Q)	4/12/2011	46.6	46.6	(3)(19)
		First lien senior secured loan ($19.3 par due 4/2021)	9.05% (Libor + 6.75%/Q)	4/12/2011	19.3	19.3	(4)(19)
					132.0	132.0
My Health Direct, Inc.	Healthcare scheduling exchange software solution provider	Warrant to purchase up to 4,548 shares of Series D preferred stock (expires 9/2024)		9/18/2014	—	—	(2)
National Home Health Care Corp (23)	Provider of post-acute in-home care	First lien senior secured revolving loan ($1.4 par due 12/2021)	6.38% (Libor + 4.50%/M)	2/8/2018	1.4	1.4	(2)(19)
		First lien senior secured revolving loan ($0.2 par due 12/2021)	8.25% (Base Rate + 3.50%/Q)	2/8/2018	0.2	0.2	(2)(19)
					1.6	1.6
New Trident Holdcorp, Inc. and Trident Holding Company, LLC	Outsourced mobile diagnostic healthcare service provider	First lien senior secured loan ($30.5 par due 7/2019)	8.05% (Libor + 5.75%/Q)	8/1/2013	24.0	23.2	(2)(19)
		Second lien senior secured loan ($84.7 par due 7/2020)		8/1/2013	79.3	43.2	(15)(18)
		Senior subordinated loan ($9.1 par due 7/2020)		11/29/2017	8.8	—	(2)(18)
					112.1	66.4
NMSC Holdings, Inc. and ASP NAPA Holdings, LLC	Anesthesia management services provider	Second lien senior secured loan ($72.8 par due 10/2023)	12.45% (Libor + 10.00%/B)	4/19/2016	72.8	65.5	(2)(19)
		Class A units (25,277 units)		4/19/2016	2.5	0.9	(2)
					75.3	66.4
Nodality, Inc.	Biotechnology company	First lien senior secured loan ($2.3 par due 8/2016)		11/12/2015	2.1	—	(2)(18)
		First lien senior secured loan ($10.9 par due 8/2016)		4/25/2014	9.7	—	(2)(18)

As of March 31, 2018

(dollar amounts in millions)

(unaudited)



Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost	Fair Value		Percentage of Net Assets
		Warrant to purchase up to 3,736,255 shares of common stock (expires 3/2026)		5/1/2016	—	—	(2)
					11.8	—
nThrive, Inc. (fka Precyse Acquisition Corp.)	Provider of healthcare information management technology and services	Second lien senior secured loan ($10.0 par due 4/2023)	11.63% (Libor + 9.75%/M)	4/20/2016	9.7	10.0	(2)(19)
OmniSYS Acquisition Corporation, OmniSYS, LLC, and OSYS Holdings, LLC (23)	Provider of technology-enabled solutions to pharmacies	First lien senior secured loan ($5.5 par due 11/2018)	9.80% (Libor + 7.50%/Q)	11/21/2013	5.5	5.5	(4)(19)
		Limited liability company membership interest (1.57%)		11/21/2013	1.0	0.7	(2)
					6.5	6.2
Pathway Partners Vet Management Company LLC (23)	Owner and operator of veterinary hospitals	First lien senior secured loan ($1.6 par due 10/2024)	6.13% (Libor + 4.25%/M)	10/4/2017	1.6	1.6	(2)(19)
		First lien senior secured loan ($6.0 par due 10/2024)	6.13% (Libor + 4.25%/M)	10/4/2017	6.0	6.0	(2)(19)
					7.6	7.6
Patterson Medical Supply, Inc.	Distributor of rehabilitation supplies and equipment	Second lien senior secured loan ($78.0 par due 8/2023)	10.29% (Libor + 8.50%/B)	9/2/2015	76.5	71.8	(2)(19)
PhyMED Management LLC	Provider of anesthesia services	Second lien senior secured loan ($47.2 par due 5/2021)	10.71% (Libor + 8.75%/Q)	12/18/2015	46.8	45.8	(2)(19)
Practice Insight, LLC (23)	Revenue cycle management provider to the emergency healthcare industry	First lien senior secured revolving loan ($0.6 par due 8/2022)	8.75% (Base Rate + 4.00%/Q)	8/23/2017	0.6	0.6	(2)(19)
		First lien senior secured loan ($12.7 par due 8/2022)	6.88% (Libor + 5.00%/M)	8/23/2017	12.7	12.7	(2)(19)
					13.3	13.3
ProVation Medical, Inc.	Provider of documentation and coding software for GI physicians	First lien senior secured loan ($13.1 par due 3/2024)	9.06% (Libor + 7.00%/Q)	3/9/2018	12.9	13.0	(2)(19)
RecoveryDirect Acquisition, L.L.C. (23)	Outpatient physical therapy provider	First lien senior secured revolving loan ($0.7 par due 1/2023)	6.22% (Libor + 4.50%/M)	1/3/2018	0.7	0.7	(2)(19)
		First lien senior secured loan ($7.0 par due 1/2024)	6.19% (Libor + 4.50%/S)	1/3/2018	7.0	6.9	(2)(19)
		First lien senior secured loan ($34.9 par due 1/2024)	6.80% (Libor + 4.50%/Q)	1/3/2018	34.9	34.6	(2)(19)
		First lien senior secured loan ($0.1 par due 1/2024)	8.25% (Base Rate + 3.50%/Q)	1/3/2018	0.1	0.1	(2)(19)
					42.7	42.3
Respicardia, Inc.	Developer of implantable therapies to improve cardiovascular health	Warrant to purchase up to 99,094 shares of Series C preferred stock (expires 6/2022)		6/28/2012	—	—	(2)
Salter Labs (23)	Developer, manufacturer and supplier of consumable products for medical device customers	First lien senior secured revolving loan ($0.6 par due 3/2020)	6.00% (Libor + 4.25%/Q)	2/8/2018	0.6	0.6	(2)(19)
		First lien senior secured revolving loan ($0.2 par due 3/2020)	6.34% (Libor + 4.25%/Q)	2/8/2018	0.2	0.2	(2)(19)
		First lien senior secured revolving loan ($0.5 par due 3/2020)	8.00% (Base Rate + 3.25%/Q)	2/8/2018	0.5	0.5	(2)(19)
					1.3	1.3
Sarnova HC, LLC, Tri-Anim Health Services, Inc., and BEMS Holdings, LLC	Distributor of emergency medical service and respiratory products	Second lien senior secured loan ($54.0 par due 7/2022)	11.38% (Libor + 9.50%/M)	1/29/2016	54.0	54.5	(2)(19)
Siromed Physician Services, Inc. and Siromed Equity Holdings, LLC (23)	Outsourced anesthesia provider	First lien senior secured loan ($17.5 par due 3/2024)	7.04% (Libor + 4.75%/Q)	3/26/2018	17.5	17.4	(2)(19)
		Common units (171,784 units)		3/26/2018	4.6	4.6	(2)
					22.1	22.0

As of March 31, 2018

(dollar amounts in millions)

(unaudited)



Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost	Fair Value		Percentage of Net Assets
TerSera Therapeutics LLC	Acquirer and developer of specialty therapeutic pharmaceutical products	First lien senior secured loan ($5.3 par due 3/2023)	7.56% (Libor + 5.25%/Q)	5/3/2017	5.2	5.3	(4)(19)
Transaction Data Systems, Inc.	Pharmacy management software provider	Second lien senior secured loan ($3.8 par due 6/2022)	10.74% (Libor + 9.00%/Q)	12/19/2017	3.8	3.8	(2)(19)
		Second lien senior secured loan ($35.3 par due 6/2022)	10.70% (Libor + 9.00%/Q)	6/15/2015	35.3	35.3	(2)(19)
					39.1	39.1
U.S. Anesthesia Partners, Inc.	Anesthesiology service provider	Second lien senior secured loan ($71.8 par due 6/2025)	9.13% (Libor + 7.25%/M)	6/16/2017	70.8	71.8	(2)(19)
Urgent Cares of America Holdings I, LLC and FastMed Holdings I, LLC (23)	Operator of urgent care clinics	Preferred units (7,696,613 units)		6/11/2015	7.7	2.8
		Series A common units (2,000,000 units)		6/11/2015	2.0	—
		Series C common units (5,288,427 units)		6/11/2015	—	—
					9.7	2.8
VistaPharm, Inc. and Vertice Pharma UK Parent Limited	Manufacturer and distributor of generic pharmaceutical products	First lien senior secured loan ($7.8 par due 12/2021)	7.86% (Libor + 6.00%/A)	11/6/2017	7.8	7.7	(2)(19)
		Preferred shares (40,662 shares)		12/21/2015	0.3	0.4	(9)
					8.1	8.1
West Dermatology, LLC (23)	Dermatology practice	First lien senior secured revolving loan ($1.8 par due 4/2022)	6.81% (Libor + 4.50%/Q)	2/8/2018	1.8	1.8	(2)(19)
WSHP FC Acquisition LLC (23)	Provider of biospecimen products	First lien senior secured revolving loan ($2.5 par due 3/2024)	8.81% (Libor + 6.50%/Q)	3/30/2018	2.5	2.5	(2)(19)
		First lien senior secured loan ($28.7 par due 3/2024)	8.81% (Libor + 6.50%/Q)	3/30/2018	28.7	28.4	(2)(19)
					31.2	30.9
					2,826.6	2,976.4		41.47	%
Business Services
Accruent, LLC, Accruent Holding, LLC and Athena Parent, Inc. (23)	Real estate and facilities management software provider	First lien senior secured revolving loan ($1.8 par due 7/2023)	6.63% (Libor + 4.75%/B)	7/28/2017	1.8	1.8	(2)(19)
		First lien senior secured revolving loan ($0.7 par due 7/2023)	6.67% (Libor + 4.75%/B)	7/28/2017	0.7	0.7	(2)(19)
		Second lien senior secured loan ($13.2 par due 7/2024)	10.52% (Libor + 8.75%/Q)	7/28/2017	13.2	13.2	(2)(19)
		Second lien senior secured loan ($0.5 par due 7/2024)	10.67% (Libor + 8.75%/Q)	7/28/2017	0.5	0.5	(2)(19)
		Second lien senior secured loan ($2.6 par due 7/2024)	10.57% (Libor + 8.75%/Q)	7/28/2017	2.6	2.6	(2)(19)
		Second lien senior secured loan ($58.4 par due 7/2024)	10.52% (Libor + 8.75%/Q)	7/28/2017	58.4	58.4	(2)(19)
		Senior subordinated loan ($21.8 par due 7/2025)	11.50% PIK	7/28/2017	21.8	21.2	(2)
		Senior subordinated loan ($77.9 par due 7/2025)	11.50% PIK	7/28/2017	77.9	75.6	(2)
		Common stock (3,464 shares)		5/16/2016	3.6	3.6	(2)
		Warrant to purchase up to 11,380 shares of common stock (expires 7/2037)		7/28/2017	—	4.0	(2)
					180.5	181.6
Achilles Acquisition LLC (23)	Benefits broker and outsourced workflow automation platform provider for brokers	First lien senior secured loan ($4.0 par due 6/2023)	7.88% (Libor + 6.00%/M)	6/6/2017	4.0	4.0	(2)(19)
		First lien senior secured loan ($3.3 par due 6/2023)	7.88% (Libor + 6.00%/M)	2/2/2018	3.3	3.3	(2)(19)
		First lien senior secured loan ($10.2 par due 6/2023)	7.88% (Libor + 6.00%/M)	6/6/2017	10.2	10.2	(4)(19)
					17.5	17.5

As of March 31, 2018

(dollar amounts in millions)

(unaudited)



Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost	Fair Value		Percentage of Net Assets
Acrisure, LLC, Acrisure Investors FO, LLC and Acrisure Investors SO, LLC	Retail insurance advisor and brokerage	Membership interests (1.91% interest)		11/18/2016	11.0	13.7	(2)
		Membership interests (0.95% interest)		11/18/2016	3.7	3.8	(2)
					14.7	17.5
BeyondTrust Software, Inc.	Management software solutions provider	First lien senior secured loan ($46.0 par due 11/2023)	8.09% (Libor + 6.25%/M)	11/21/2017	45.4	45.6	(3)(19)
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)(18)
		First lien senior secured loan ($3.1 par due 2/2019)		5/11/2015	2.9	—	(2)(18)
		Warrant to purchase up to 184,003 units of convertible preferred shares (expires 8/2026)		8/5/2016	—	—	(2)
					7.4	—
CallMiner, Inc.	Provider of cloud-based conversational analytics solutions	Warrant to purchase up to 2,350,636 shares of Series 1 preferred stock (expires 7/2024)		7/23/2014	—	—	(2)
Chesapeake Research Review, LLC and Schulman Associates Institutional Review Board, Inc. (23)	Provider of central institutional review boards over clinical trials	First lien senior secured loan ($30.7 par due 11/2023)	8.05% (Libor + 5.75%/Q)	11/7/2017	30.7	30.3	(2)(19)
Clearwater Analytics, LLC (23)	Provider of integrated cloud-based investment portfolio management, accounting, reporting and analytics software	First lien senior secured revolving loan ($0.9 par due 9/2022)	6.87% (Libor + 5.00%/M)	9/1/2016	0.9	0.9	(2)(19)
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	22.5
		Preferred stock (17,653,253 shares)		1/3/2017	21.6	9.2
		Preferred stock (3,232,666 shares)		1/3/2017	4.0	4.9
					27.9	36.6
Command Alkon Incorporated (23)	Software solutions provider to the ready-mix concrete industry	First lien senior secured revolving loan ($1.5 par due 9/2022)	8.75% (Base Rate + 4.00%/Q)	9/1/2017	1.5	1.5	(2)(19)(22)
		First lien senior secured loan ($25.5 par due 9/2023)	6.66% (Libor + 5.00%/M)	9/1/2017	25.5	25.5	(2)(19)
		Second lien senior secured loan ($33.8 par due 3/2024)	11.01% (Libor + 9.00%/Q)	9/1/2017	33.8	33.8	(2)(19)
					60.8	60.8
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)	10.07% (Libor + 8.25%/Q)	1/3/2017	51.0	51.0	(2)(19)
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	2.8	(2)
		Class B-1 common stock (4,132 units)		12/15/2014