Barings BDC, Inc. 10-Q

Item 1. Financial Statements. Barings BDC, Inc. Consolidated Balance Sheets September 30, 2020 December 31, 2019 (Unaudited) Assets: Investments at fair value: Non-Control / Non-Affiliate investments (cost of $903,128,567 and $1,085,866,720 as of September 30, 2020 and December 31, 2019, respectively) $ 886,610,176 $ 1,066,845,054 Affiliate investments (cost of $18,258,270 and $10,158,270 as of September 30, 2020 and December 31, 2019, respectively) 19,158,075 10,229,813 Short-term investments (cost of $210,503,875 and $96,568,940 as of September 30, 2020 and December 31, 2019, respectively) 210,503,390 96,568,940 Total investments at fair value 1,116,271,641 1,173,643,807 Cash 7,112,312 13,567,849 Foreign currencies (cost of $7,532,555 and $8,360,011 as of September 30, 2020 and December 31, 2019, respectively) 7,675,046 8,423,716 Interest and fees receivable 7,749,841 5,265,980 Prepaid expenses and other assets 3,831,057 1,112,559 Deferred financing fees 4,440,269 5,366,119 Receivable from unsettled transactions 75,486,443 45,254,808 Total assets $ 1,222,566,609 $ 1,252,634,838 Liabilities: Accounts payable and accrued liabilities $ 1,373,856 $ 1,524,830 Interest payable 766,815 2,491,534 Administrative fees payable 300,000 400,000 Base management fees payable 3,375,262 3,266,722 Payable from unsettled transactions — 4,924,150 Borrowings under credit facilities 463,703,208 352,488,419 Debt securitization 177,536,048 316,664,474 Notes payable 49,534,479 — Total liabilities 696,589,668 681,760,129 Commitments and contingencies (Note 7) Net Assets: Common stock, $0.001 par value per share (150,000,000 shares authorized, 47,961,753 and 48,950,803 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively) 47,962 48,951 Additional paid-in capital 846,636,727 853,766,370 Total distributable earnings (loss) (320,707,748) (282,940,612) Total net assets 525,976,941 570,874,709 Total liabilities and net assets $ 1,222,566,609 $ 1,252,634,838 Net asset value per share $ 10.97 $ 11.66 See accompanying notes. 3 Barings BDC, Inc. Unaudited Consolidated Statements of Operations Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 Investment income: Interest income: Non-Control / Non-Affiliate investments $ 15,205,310 $ 18,169,034 $ 47,850,786 $ 54,853,833 Short-term investments 12,237 279,908 336,842 703,947 Total interest income 15,217,547 18,448,942 48,187,628 55,557,780 Dividend income: Non-Control / Non-Affiliate investments — 4,221 2,603 8,932 Total dividend income — 4,221 2,603 8,932 Fee and other income: Non-Control / Non-Affiliate investments 769,126 848,792 2,380,552 1,669,819 Total fee and other income 769,126 848,792 2,380,552 1,669,819 Payment-in-kind interest income: Non-Control / Non-Affiliate investments 342,469 — 577,090 — Total payment-in-kind interest income 342,469 — 577,090 — Interest income from cash — 2,152 631 9,022 Total investment income 16,329,142 19,304,107 51,148,504 57,245,553 Operating expenses: Interest and other financing fees 3,738,991 6,727,780 14,367,855 19,598,992 Base management fee (Note 2) 3,375,262 3,263,803 10,904,422 8,845,753 Compensation expenses — 107,779 48,410 334,869 General and administrative expenses (Note 2) 1,254,723 1,217,570 4,044,453 5,108,595 Total operating expenses 8,368,976 11,316,932 29,365,140 33,888,209 Net investment income 7,960,166 7,987,175 21,783,364 23,357,344 Realized and unrealized gains (losses) on investments and foreign currency transactions: Net realized gains (losses): Non-Control / Non-Affiliate investments (19,477,823) (1,066,536) (36,233,667) (1,146,287) Net realized losses on investments (19,477,823) (1,066,536) (36,233,667) (1,146,287) Foreign currency transactions (1,028,262) 83,037 (1,089,787) 83,037 Net realized losses (20,506,085) (983,499) (37,323,454) (1,063,250) Net unrealized appreciation (depreciation): Non-Control / Non-Affiliate investments 56,467,202 (2,209,225) 2,522,789 25,202,059 Affiliate investments 1,624,230 40,119 828,262 (121,970) Net unrealized appreciation (depreciation) on investments 58,091,432 (2,169,106) 3,351,051 25,080,089 Foreign currency transactions (2,144,050) 374,278 (1,756,412) 374,278 Net unrealized appreciation (depreciation) 55,947,382 (1,794,828) 1,594,639 25,454,367 Net realized losses and unrealized appreciation (depreciation) on investments and foreign currency transactions 35,441,297 (2,778,327) (35,728,815) 24,391,117 Loss on extinguishment of debt (216,474) (13,357) (660,066) (143,108) Benefit from (provision for) taxes (7,362) — 10,105 (499) Net increase (decrease) in net assets resulting from operations $ 43,177,627 $ 5,195,491 $ (14,595,412) $ 47,604,854 Net investment income per share—basic and diluted $ 0.17 $ 0.16 $ 0.45 $ 0.46 Net increase (decrease) in net assets resulting from operations per share—basic and diluted $ 0.90 $ 0.10 $ (0.30) $ 0.94 Dividends/distributions per share: Total dividends/distributions per share $ 0.16 $ 0.14 $ 0.48 $ 0.39 Weighted average shares outstanding—basic and diluted 47,961,753 49,987,312 48,274,397 50,535,246 See accompanying notes. 4 Barings BDC, Inc. Unaudited Consolidated Statements of Changes in Net Assets Common Stock Additional Paid-In Capital Total Distributable Earnings (Loss) Total Net Assets Three Months Ended September 30, 2019 Number of Shares Par Value Balance, June 30, 2019 50,314,275 $ 50,314 $ 875,245,919 $ (292,216,528) $ 583,079,705 Net investment income — — — 7,987,175 7,987,175 Net realized gain on investments / foreign currency transactions — — — (983,499) (983,499) Net unrealized appreciation of investments / foreign currency transactions — — — (1,794,828) (1,794,828) Loss on extinguishment of debt — — — (13,357) (13,357) Dividends / distributions — — — (6,935,311) (6,935,311) Purchases of shares in repurchase plan (895,733) (895) (8,894,010) — (8,894,905) Balance, September 30, 2019 49,418,542 $ 49,419 $ 866,351,909 $ (293,956,348) $ 572,444,980 Common Stock Additional Paid-In Capital Total Distributable Earnings (Loss) Total Net Assets Three Months Ended September 30, 2020 Number of Shares Par Value Balance, June 30, 2020 47,961,753 $ 47,962 $ 846,636,727 $ (356,211,495) $ 490,473,194 Net investment income — — — 7,960,166 7,960,166 Net realized loss on investments / foreign currency transactions — — — (20,506,085) (20,506,085) Net unrealized appreciation of investments / foreign currency transactions — — — 55,947,382 55,947,382 Loss on extinguishment of debt — — — (216,474) (216,474) Provision for taxes — — — (7,362) (7,362) Dividends / distributions — — — (7,673,880) (7,673,880) Balance, September 30, 2020 47,961,753 $ 47,962 $ 846,636,727 $ (320,707,748) $ 525,976,941 See accompanying notes. 5 Barings BDC, Inc. Unaudited Consolidated Statements of Changes in Net Assets — (Continued) Common Stock Additional Paid-In Capital Total Distributable Earnings (Loss) Total Net Assets Nine Months Ended September 30, 2019 Number of Shares Par Value Balance, December 31, 2018 51,284,064 $ 51,284 $ 884,894,249 $ (321,978,246) $ 562,967,287 Net investment income — — — 23,357,344 23,357,344 Net realized loss on investments / foreign currency transactions — — — (1,063,250) (1,063,250) Net unrealized appreciation of investments / foreign currency transactions — — — 25,454,367 25,454,367 Loss on extinguishment of debt — — — (143,108) (143,108) Provision for taxes — — — (499) (499) Dividends / distributions — — — (19,582,956) (19,582,956) Purchases of shares in repurchase plan (1,865,522) (1,865) (18,542,340) — (18,544,205) Balance, September 30, 2019 49,418,542 $ 49,419 $ 866,351,909 $ (293,956,348) $ 572,444,980 Common Stock Additional Paid-In Capital Total Distributable Earnings (Loss) Total Net Assets Nine Months Ended September 30, 2020 Number of Shares Par Value Balance, December 31, 2019 48,950,803 $ 48,951 $ 853,766,370 $ (282,940,612) $ 570,874,709 Net investment income — — — 21,783,364 21,783,364 Net realized loss on investments / foreign currency transactions — — — (37,323,454) (37,323,454) Net unrealized appreciation of investments / foreign currency transactions — — — 1,594,639 1,594,639 Loss on extinguishment of debt — — — (660,066) (660,066) Income tax benefit — — — 10,105 10,105 Dividends / distributions — — — (23,171,724) (23,171,724) Purchases of shares in repurchase plan (989,050) (989) (7,129,643) — (7,130,632) Balance, September 30, 2020 47,961,753 $ 47,962 $ 846,636,727 $ (320,707,748) $ 525,976,941 See accompanying notes. 6 Barings BDC, Inc. Unaudited Consolidated Statements of Cash Flows Nine Months Ended Nine Months Ended September 30, 2020 September 30, 2019 Cash flows from operating activities: Net increase (decrease) in net assets resulting from operations $ (14,595,412) $ 47,604,854 Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities: Purchases of portfolio investments (316,723,958) (294,160,380) Repayments received / sales of portfolio investments 416,989,098 251,057,329 Purchases of short-term investments (697,141,628) (577,451,108) Sales of short-term investments 583,220,977 571,122,802 Loan origination and other fees received 6,075,019 5,118,390 Net realized loss on investments 36,233,667 1,146,287 Net realized (gain) loss on foreign currency transactions 1,089,787 (83,037) Net unrealized appreciation of investments (3,351,051) (25,080,089) Net unrealized (appreciation) depreciation of foreign currency transactions 1,756,412 (374,278) Payment-in-kind interest accrued, net of payments received (577,090) — Amortization of deferred financing fees 1,113,839 951,134 Loss on extinguishment of debt 660,066 143,108 Accretion of loan origination and other fees (1,676,063) (1,254,234) Amortization / accretion of purchased loan premium / discount (1,138,000) (187,967) Changes in operating assets and liabilities: Interest and fees receivables (2,699,114) 595,826 Prepaid expenses and other assets (2,569,056) 2,421,921 Accounts payable and accrued liabilities (118,876) 65,869 Interest payable (1,724,576) 2,141,975 Net cash provided by (used in) operating activities 4,824,041 (16,221,598) Cash flows from financing activities: Borrowings under credit facilities 236,239,474 188,225,262 Repayments of credit facilities (127,523,364) (466,000,000) Proceeds from debt securitization — 348,250,000 Repayment of debt securitization (139,897,128) (7,468,690) Proceeds from notes 50,000,000 — Financing fees paid (544,874) (8,246,692) Purchases of shares in repurchase plan (7,130,632) (18,544,205) Cash dividends / distributions paid (23,171,724) (19,582,956) Net cash provided by (used in) financing activities (12,028,248) 16,632,719 Net increase (decrease) in cash and foreign currencies (7,204,207) 411,121 Cash and foreign currencies, beginning of period 21,991,565 12,426,982 Cash and foreign currencies, end of period $ 14,787,358 $ 12,838,103 Supplemental disclosure of cash flow information: Cash paid for interest $ 13,372,484 $ 14,398,249 See accompanying notes. 7 Barings BDC, Inc. Unaudited Consolidated Schedule of Investments September 30, 2020 Portfolio Company Industry Type of Investment (1) (2) Principal Amount Cost Fair Value Non–Control / Non–Affiliate Investments: 1WorldSync, Inc. (4.2%)* (5) (7) (8) (10) IT Consulting & Other Services First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 07/19, Due 07/25) $ 858,894 $ 844,671 $ 841,716 First Lien Senior Secured Term Loan (LIBOR + 5.75%, 7.0% Cash, Acquired 07/19, Due 07/25) 21,418,269 21,061,882 20,989,904 22,277,163 21,906,553 21,831,620 Accelerate Learning, Inc. (1.4%)* (5) (7) (8) (11) Education Services First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.6% Cash, Acquired 12/18, Due 12/24) 7,567,965 7,455,531 7,195,485 7,567,965 7,455,531 7,195,485 Accurus Aerospace Corporation (4.1%)* (5) (7) (8) (10) Aerospace & Defense First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 10/18, Due 10/24) 24,562,500 24,298,740 21,393,938 24,562,500 24,298,740 21,393,938 Acrisure, LLC (0.4%)* (5) (8) (9) Property & Casualty Insurance First Lien Senior Secured Term Loan (LIBOR + 3.5%, 3.7% Cash, Acquired 03/20, Due 02/27) 1,990,000 1,714,306 1,917,863 1,990,000 1,714,306 1,917,863 ADE Holding (d/b/a AD Education) (1.0%)* (3) (5) (7) (8) (15) Education Services First Lien Senior Secured Term Loan (EURIBOR + 5.0%, 5.0% Cash, Acquired 01/20, Due 01/27) 5,232,622 4,972,254 5,099,606 5,232,622 4,972,254 5,099,606 ADMI Corp. (0.6%)* (6) (8) (9) Health Care Services First Lien Senior Secured Term Loan (LIBOR + 2.75%, 2.9% Cash, Acquired 08/18, Due 04/25) 3,421,732 3,431,035 3,281,441 3,421,732 3,431,035 3,281,441 Aftermath Bidco Corporation (2.2%)* (5) (7) (8) (10) Professional Services First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 04/19, Due 04/25) 11,581,395 11,374,840 11,320,814 11,581,395 11,374,840 11,320,814 Air Canada 2020-2 Class B Pass Through Trust (1.5%)* (5) Airlines Structured Secured Note - Class B (9.0% Cash, Acquired 09/20, Due 10/25) 7,500,000 7,500,000 7,852,969 7,500,000 7,500,000 7,852,969 Altice USA, Inc. (0.5%)* (3) (5) (8) (9) Cable & Satellite First Lien Senior Secured Term Loan (LIBOR + 2.25%, 2.4% Cash, Acquired 09/18, Due 01/26) 2,487,374 2,212,589 2,399,793 2,487,374 2,212,589 2,399,793 American Dental Partners, Inc. (1.8%)* (5) (7) (8) (10) Health Care Services First Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.3% Cash, Acquired 11/18, Due 03/23) 9,825,000 9,810,201 9,271,001 9,825,000 9,810,201 9,271,001 American Scaffold, Inc. (1.8%)* (5) (7) (8) (10) Aerospace & Defense First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 09/19, Due 09/25) 9,735,797 9,549,448 9,468,062 9,735,797 9,549,448 9,468,062 Anagram Holdings, LLC (2.7%)* (3) (5) (7) Chemicals, Plastics, & Rubber First Lien Senior Secured Note (10.0% Cash, 5.0% PIK, Acquired 08/20, Due 08/25) 13,673,780 12,526,549 14,220,731 13,673,780 12,526,549 14,220,731 Anchorage Capital CLO Ltd: Series 2013-1A (0.4%)* (3) (5) (8) (10) Structured Finance Structured Secured Note - Class DR (LIBOR + 6.8%, 7.1% Cash, Acquired 03/20, Due 10/30) 2,000,000 1,738,801 1,914,828 2,000,000 1,738,801 1,914,828 Anju Software, Inc. (2.5%)* (5) (7) (8) (10) Application Software First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.6% Cash, Acquired 02/19, Due 02/25) 13,701,182 13,428,607 13,008,014 13,701,182 13,428,607 13,008,014 Apex Bidco Limited (0.4%)* (3) (5) (7) (12) Business Equipment & Services First Lien Senior Secured Term Loan (GBP LIBOR + 6.50%, 7.0% Cash, Acquired 01/20, Due 01/27) (8) 1,883,976 1,846,562 1,827,457 Subordinated Senior Unsecured Term Loan (8.0% PIK, Acquired 01/20, Due 07/27) 238,623 234,872 231,464 2,122,599 2,081,434 2,058,921 Apex Tool Group, LLC (0.4%)* (5) (6) (8) (9) Industrial Machinery First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.5% Cash, Acquired 08/18, Due 08/24) 2,041,814 1,999,069 1,931,556 2,041,814 1,999,069 1,931,556 AQA Acquisition Holding, Inc. (f/k/a SmartBear) (0.9%)* (5) (7) (8) (10) High Tech Industries Second Lien Senior Secured Term Loan (LIBOR + 8.0%, 9.0% Cash, Acquired 10/18, Due 05/24) 4,959,088 4,872,484 4,865,857 4,959,088 4,872,484 4,865,857 8 Barings BDC, Inc. Unaudited Consolidated Schedule of Investments — (Continued) September 30, 2020 Portfolio Company Industry Type of Investment (1) (2) Principal Amount Cost Fair Value Arch Global Precision LLC (2.5%)* (5) (7) (8) (10) Industrial Machinery First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.0% Cash, Acquired 04/19, Due 04/26) $ 13,472,831 $ 13,265,371 $ 13,278,284 13,472,831 13,265,371 13,278,284 Armstrong Transport Group (Pele Buyer, LLC ) (1.4%)* (5) (7) (8) (10) Air Freight & Logistics First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 06/19, Due 06/24) 5,368,480 5,286,234 5,243,394 First Lien Senior Secured Term Loan (LIBOR + 6.0%, 6.2% Cash, Acquired 07/20, Due 06/24) 2,000,318 1,961,993 2,000,318 7,368,798 7,248,227 7,243,712 Ascensus Specialties, LLC (1.3%)* (5) (7) (8) (9) Specialty Chemicals First Lien Senior Secured Term Loan (LIBOR + 4.75%, 4.9% Cash, Acquired 09/19, Due 09/26) 7,037,126 6,975,230 6,942,179 7,037,126 6,975,230 6,942,179 ASPEQ Heating Group LLC (1.7%)* (5) (7) (8) (17) Building Products, Air and Heating First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 11/19, Due 11/25) 8,968,089 8,850,558 8,833,568 8,968,089 8,850,558 8,833,568 Auxi International (0.3%)* (3) (5) (7) (8) (14) Commercial Finance First Lien Senior Secured Term Loan (EURIBOR + 5.5%, 5.5% Cash, Acquired 12/19, Due 12/26) 1,641,711 1,513,488 1,596,564 1,641,711 1,513,488 1,596,564 Aveanna Healthcare Holdings, Inc. (0.9%)* (6) (8) (10) Health Care Facilities First Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.3% Cash, Acquired 10/18, Due 03/24) 1,465,984 1,452,738 1,378,391 First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 10/18, Due 03/24) 3,511,966 3,512,719 3,299,211 4,977,950 4,965,457 4,677,602 AVSC Holding Corp. (0.8%)* (5) (6) (8) (11) Advertising First Lien Senior Secured Term Loan (LIBOR + 3.25%, 4.25% Cash, Acquired 08/18, Due 03/25) 4,917,073 4,895,932 3,650,926 First Lien Senior Secured Term Loan (LIBOR + 4.50%, 5.5% Cash, Acquired 08/18, Due 03/25) (7) 750,000 550,978 562,500 5,667,073 5,446,910 4,213,426 Bass Pro Group, LLC (0.4%)* (5) (8) (10) General Merchandise Stores First Lien Senior Secured Term Loan (LIBOR + 5.0%, 5.8% Cash, Acquired 03/20, Due 09/24) 1,984,655 1,787,822 1,963,578 1,984,655 1,787,822 1,963,578 BDP International, Inc. (f/k/a BDP Buyer, LLC) (4.7%)* (5) (7) (8) (10) Air Freight & Logistics First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 12/18, Due 12/24) 24,562,500 24,197,584 24,562,500 24,562,500 24,197,584 24,562,500 Beacon Pointe Advisors, LLC (0.1%)* (5) (7) (8) (10) Asset Manager & Custody Bank First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 03/20, Due 03/26) 633,182 612,411 614,342 633,182 612,411 614,342 Benify (Bennevis AB) (0.3%)* (3) (5) (7) (8) (16) High Tech Industries First Lien Senior Secured Term Loan (STIBOR + 5.25%, 5.3% Cash, Acquired 07/19, Due 07/26) 1,458,053 1,365,873 1,436,182 1,458,053 1,365,873 1,436,182 Blackhawk Network Holdings Inc. (0.9%)* (6) (8) (9) Data Processing & Outsourced Services First Lien Senior Secured Term Loan (LIBOR + 3.0%, 3.1% Cash, Acquired 11/18, Due 06/25) 4,924,433 4,924,433 4,630,494 4,924,433 4,924,433 4,630,494 Boxer Parent Company Inc. (0.4%)* (5) (8) (9) Software/Services First Lien Senior Secured Term Loan (LIBOR + 4.25%, 4.4% Cash, Acquired 03/20, Due 10/25) 1,984,848 1,800,811 1,922,147 1,984,848 1,800,811 1,922,147 Brown Machine Group Holdings, LLC (1.0%)* (5) (7) (8) (10) Industrial Equipment First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 10/18, Due 10/24) 5,286,022 5,239,308 5,153,872 5,286,022 5,239,308 5,153,872 Cadent, LLC (f/k/a Cross MediaWorks) (1.4%)* (5) (7) (8) (10) Media & Entertainment First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 09/18, Due 09/23) 7,532,846 7,487,168 7,397,255 7,532,846 7,487,168 7,397,255 Carlson Travel, Inc (0.4%)* (5) (7) Business Travel Management First Lien Senior Secured Note (6.8% Cash, Acquired 09/20, Due 12/25) 3,000,000 2,362,500 2,265,000 3,000,000 2,362,500 2,265,000 Carlyle Aviation Partners Ltd. (0.2%)* (5) Structured Finance Structured Secured Note, Series 2019-2 - Class A (3.4% Cash, Acquired 3/20, Due 10/39) 929,148 841,103 870,716 Structured Secured Note, Series 2018-2 - Class A (4.5% Cash, Acquired 03/20, Due 11/38) 434,772 393,979 404,368 1,363,920 1,235,082 1,275,084 9 Barings BDC, Inc. Unaudited Consolidated Schedule of Investments — (Continued) September 30, 2020 Portfolio Company Industry Type of Investment (1) (2) Principal Amount Cost Fair Value Centralis Finco S.a.r.l. (0.2%)* (3) (5) (7) (8) (14) Diversified Financial Services First Lien Senior Secured Term Loan (EURIBOR + 5.25%, 5.3% Cash, Acquired 5/20, Due 5/27) $ 831,808 $ 731,243 $ 806,450 831,808 731,243 806,450 Cineworld Group PLC (0.4%)* (3) (5) (8) (11) Leisure Products First Lien Senior Secured Term Loan (LIBOR + 2.25%, 2.5% Cash, Acquired 4/20, Due 2/25) 2,981,586 1,989,848 1,971,156 2,981,586 1,989,848 1,971,156 Clarios Global LP (0.4%)* (5) (8) (9) Auto Parts & Equipment First Lien Senior Secured Term Loan (LIBOR + 3.5%, 3.6% Cash, Acquired 3/20, Due 4/26) 1,984,962 1,801,408 1,930,991 1,984,962 1,801,408 1,930,991 Classic Collision (Summit Buyer, LLC) (1.1%)* (5) (7) (8) (10) Auto Collision Repair Centers First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 01/20, Due 01/26) 5,582,424 5,303,593 5,582,424 5,582,424 5,303,593 5,582,424 CM Acquisitions Holdings Inc. (3.9%)* (5) (7) (8) (11) Internet & Direct Marketing First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 05/19, Due 05/25) 20,434,481 20,129,562 20,264,435 20,434,481 20,129,562 20,264,435 CMT Opco Holding, LLC (Concept Machine) (1.0%)* (5) (7) (8) (11) Distributors First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 01/20, Due 01/25) 5,437,083 5,340,979 5,007,553 LLC Units (10,185 units, Acquired 01/20) 407,915 306,379 5,437,083 5,748,894 5,313,932 Confie Seguros Holding II Co. (0.4%)* (5) (8) (9) Insurance Brokerage Services Second Lien Senior Secured Term Loan (LIBOR + 8.5%, 8.7% Cash, Acquired 10/19, Due 11/25) 2,500,000 2,365,231 1,906,250 2,500,000 2,365,231 1,906,250 Contabo Finco S.À R.L (0.3%)* (3) (5) (7) (8) (14) Internet Software and Services First Lien Senior Secured Term Loan (EURIBOR + 5.75%, 5.8% Cash, Acquired 10/19, Due 10/26) 1,421,669 1,308,924 1,376,558 1,421,669 1,308,924 1,376,558 Container Store Group, Inc., (The) (0.5%)* (3) (6) (8) (10) Retail First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 09/18, Due 09/23) 2,869,873 2,871,724 2,704,855 2,869,873 2,871,724 2,704,855 CSL DualCom (2.4%)* (3) (5) (7) (8) (12) Tele-communications First Lien Senior Secured Term Loan (GBP LIBOR + 5.5%, 5.6% Cash, Acquired 09/20, Due 09/27) 12,829,485 12,128,593 12,341,964 12,829,485 12,128,593 12,341,964 Dart Buyer, Inc. (2.3%)* (3) (5) (7) (8) (10) Aerospace & Defense First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 04/19, Due 04/25) 12,354,672 12,124,446 12,058,967 12,354,672 12,124,446 12,058,967 Diamond Sports Group, LLC (0.2%)* (5) (8) (9) Broadcasting First Lien Senior Secured Term Loan (LIBOR + 3.25%, 3.4% Cash, Acquired 03/20, Due 08/26) 992,481 785,480 765,868 992,481 785,480 765,868 Distinct Holdings, Inc. (1.4%)* (5) (7) (8) (10) Systems Software First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 04/19, Due 12/23) 7,535,774 7,467,659 7,396,362 7,535,774 7,467,659 7,396,362 DreamStart Bidco SAS (d/b/a SmartTrade) (0.5%)* (3) (5) (7) (8) (15) Diversified Financial Services First Lien Senior Secured Term Loan (EURIBOR + 4.5%, 4.5% Cash, 1.8% PIK, Acquired 03/20, Due 03/27) 2,862,667 2,597,617 2,757,703 2,862,667 2,597,617 2,757,703 Elmwood CLO: Series 2019-1A (0.6%)* (3) (5) (8) (10) Structured Finance Structured Secured Note - Class E (LIBOR + 7.10%, 7.4% Cash, Acquired 03/20, Due 04/30) 3,000,000 2,673,958 2,923,074 3,000,000 2,673,958 2,923,074 Endo International PLC (0.9%)* (3) (5) (6) (8) (10) Pharmaceuticals First Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.0% Cash, Acquired 09/18, Due 04/24) 4,825,914 4,861,718 4,584,618 4,825,914 4,861,718 4,584,618 Envision Healthcare Corp. (0.4%)* (5) (8) (9) Health Care Services First Lien Senior Secured Term Loan (LIBOR + 3.75%, 3.9% Cash, Acquired 03/20, Due 10/25) 3,164,825 2,231,579 2,275,857 3,164,825 2,231,579 2,275,857 Exeter Property Group, LLC (2.2%)* (5) (7) (8) (9) Real Estate First Lien Senior Secured Term Loan (LIBOR + 4.5%, 4.7% Cash, Acquired 02/19, Due 08/24) 11,893,750 11,763,359 11,655,875 11,893,750 11,763,359 11,655,875 Eyemart Express LLC (0.3%)* (6) (8) (9) Retail First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.0% Cash, Acquired 08/18, Due 08/24) 1,422,131 1,425,756 1,373,537 1,422,131 1,425,756 1,373,537 10 Barings BDC, Inc. Unaudited Consolidated Schedule of Investments — (Continued) September 30, 2020 Portfolio Company Industry Type of Investment (1) (2) Principal Amount Cost Fair Value F24 (Stairway BidCo Gmbh)) (0.7%)* (3) (5) (7) (8) (14) Software Services First Lien Senior Secured Term Loan (EURIBOR + 6.5%, 6.5% Cash, Acquired 08/20, Due 08/27) $ 3,912,838 $ 3,770,493 $ 3,731,425 3,912,838 3,770,493 3,731,425 Foundation Risk Partners, Corp. (0.3%)* (5) (8) (10) Financial Services First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 09/20, Due 11/23) 1,458,333 1,195,833 1,195,833 Second Lien Senior Secured Term Loan (LIBOR + 8.50%, 9.5% Cash, Acquired 09/20, Due 11/24) 486,111 325,694 325,694 1,944,444 1,521,527 1,521,527 Frazer Consultants, LLC (d/b/a Tribute Technology) (1.3%)* (5) (7) (8) (11) Software Services First Lien Senior Secured Term Loan (LIBOR + 4.5%, 4.9% Cash, Acquired 11/19, Due 08/23) 6,688,791 6,633,268 6,688,791 6,688,791 6,633,268 6,688,791 GoldenTree Loan Opportunities IX, Limited: Series 2014-9A (0.2%)* (3) (5) (8) (10) Structured Finance Structured Secured Note - Class DR2 (LIBOR + 3.0%, 3.3% Cash, Acquired 03/20, Due 10/29) 1,250,000 909,635 1,187,548 1,250,000 909,635 1,187,548 Gulf Finance, LLC (0.1%)* (5) (8) (9) Oil & Gas Exploration & Production First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 10/18, Due 08/23) 1,050,973 938,230 738,309 1,050,973 938,230 738,309 Hawaiian Airlines 2020-1 Class B Pass Through Certificates (1.4%)* (5) Airlines Structured Secured Note - Class B (11.3% Cash, Acquired 08/20, Due 09/25) 7,500,000 7,500,000 7,544,657 7,500,000 7,500,000 7,544,657 Heartland, LLC (0.9%)* (5) (7) (8) (11) Commercial Services & Supplies First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 08/19, Due 08/25) 5,462,750 5,289,830 4,954,660 5,462,750 5,289,830 4,954,660 Heilbron (f/k/a Sucsez (Bolt Bidco B.V.)) (2.0%)* (3) (5) (7) (8) (15) (20) Insurance First Lien Senior Secured Term Loan (EURIBOR + 5.0%, 5.0% Cash, Acquired 09/19, Due 09/26) 9,980,450 9,208,134 9,730,939 First Lien Senior Secured Term Loan (EURIBOR + 6.0%, 6.0% Cash, Acquired 07/20, Due 09/26) 1,047,298 809,090 820,844 11,027,748 10,017,224 10,551,783 Highbridge Loan Management Ltd: Series 2014A-19 (0.2%)* (3) (5) (8) (10) Structured Finance Structured Secured Note - Class E (LIBOR + 6.75%, 7.0% Cash, Acquired 03/20, Due 07/30) 1,000,000 833,957 953,633 1,000,000 833,957 953,633 Holley Performance Products (Holley Purchaser, Inc.) (4.2%)* (5) (7) (8) (10) Automotive Parts & Equipment First Lien Senior Secured Term Loan (LIBOR + 5.0%, 5.3% Cash, Acquired 10/18, Due 10/25) 22,140,638 21,885,536 22,091,928 22,140,638 21,885,536 22,091,928 HW Holdco, LLC (Hanley Wood LLC) (1.4%)* (5) (7) (8) (10) Advertising First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 12/18, Due 12/24) 7,527,218 7,388,421 7,339,037 7,527,218 7,388,421 7,339,037 Hyperion Materials & Technologies, Inc. (2.5%)* (5) (7) (8) (10) Industrial Machinery First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 08/19, Due 08/26) 13,890,785 13,670,491 13,197,635 13,890,785 13,670,491 13,197,635 IM Analytics Holding, LLC (d/b/a NVT) (1.4%)* (5) (7) (8) (10) Electronic Instruments & Components First Lien Senior Secured Term Loan (LIBOR + 7.0%, 8.1% Cash, Acquired 11/19, Due 11/23) 8,229,921 8,163,688 7,214,349 Warrant (68,950 units, Acquired 11/19) — — 8,229,921 8,163,688 7,214,349 Institutional Shareholder Services, Inc. (0.9%)* (5) (7) (8) (10) Diversified Support Services Second Lien Senior Secured Term Loan (LIBOR + 8.5%, 8.7% Cash, Acquired 03/19, Due 03/27) 4,951,685 4,826,396 4,803,134 4,951,685 4,826,396 4,803,134 International Wire Group Inc. (0.4%)* (5) Electrical Components & Equipment Second Lien Senior Secured Note (10.8% Cash, Acquired 08/20, Due 08/21) 2,500,000 2,262,170 2,237,500 2,500,000 2,262,170 2,237,500 ISS#2, LLC (d/b/a Industrial Services Solutions) (1.4%)* (5) (7) (8) (11) Commercial Services & Supplies First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.8% Cash, Acquired 02/20, Due 02/26) 7,856,419 7,713,534 7,463,598 7,856,419 7,713,534 7,463,598 Jade Bidco Limited (Jane's) (2.3%)* (3) (5) (7) (8) Aerospace & Defense First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.0% Cash, 2.0% PIK, Acquired 11/19, Due 12/26) (11) 10,432,352 10,176,058 10,145,462 First Lien Senior Secured Term Loan (EURIBOR + 4.5%, 4.5% Cash, 2.0% PIK, Acquired 11/19, Due 12/26) (15) 1,951,595 1,791,142 1,897,926 12,383,947 11,967,200 12,043,388 11 Barings BDC, Inc. Unaudited Consolidated Schedule of Investments — (Continued) September 30, 2020 Portfolio Company Industry Type of Investment (1) (2) Principal Amount Cost Fair Value JetBlue 2019-1 Class B Pass Through Trust (1.0%)* (5) Airlines Structured Secured Note - Class B (8.0% Cash, Acquired 08/20, Due 11/27) $ 5,000,000 $ 5,000,000 $ 5,163,463 5,000,000 5,000,000 5,163,463 Kenan Advantage Group Inc. (0.8%)* (6) (8) (9) Trucking First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.0% Cash, Acquired 08/18, Due 07/22) 4,276,698 4,274,962 4,103,363 4,276,698 4,274,962 4,103,363 Kene Acquisition, Inc. (En Engineering) (1.4%)* (5) (7) (8) (10) Oil & Gas Equipment & Services First Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.3% Cash, Acquired 08/19, Due 08/26) 7,317,225 7,187,235 7,151,434 7,317,225 7,187,235 7,151,434 LAC Intermediate, LLC (f/k/a Lighthouse Autism Center) (1.7%)* (5) (7) (8) (10) Healthcare & Pharmaceuticals First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 10/18, Due 10/24) 9,261,163 9,075,623 8,866,605 Class A LLC Units (154,320 units, Acquired 10/18) 154,320 166,574 9,261,163 9,229,943 9,033,179 Learfield Communications, LLC (1.3%)* (5) (8) (9) (19) Broadcasting First Lien Senior Secured Term Loan (LIBOR + 3.25%, 4.3% Cash, Acquired 08/20, Due 12/23) 137,159 96,697 116,184 First Lien Senior Secured Term Loan (PRIME + 2.00%, 5.3% Cash, 10.0% PIK, Acquired 08/20, Due 12/23) 7,000,000 6,931,678 6,947,500 7,137,159 7,028,375 7,063,684 LTI Holdings, Inc. (Boyd Corporation) (2.1%)* (5) (6) (8) (9) Industrial Conglomerates First Lien Senior Secured Term Loan (LIBOR + 3.5%, 3.6% Cash, Acquired 09/18, Due 09/25) 11,760,000 11,809,119 10,905,518 11,760,000 11,809,119 10,905,518 Mallinckrodt Plc (0.5%)* (5) (6) (8) (10) Health Care Services First Lien Senior Secured Term Loan (LIBOR + 2.75%, 3.5% Cash, Acquired 08/18, Due 09/24) 3,229,053 3,220,610 2,702,329 3,229,053 3,220,610 2,702,329 MB2 Dental Solutions, LLC (1.5%)* (5) (7) (8) (10) Health Care Services First Lien Senior Secured Term Loan (LIBOR + 6.5%, 7.6% Cash, Acquired 09/19, Due 09/23) 7,970,743 7,900,309 7,869,116 7,970,743 7,900,309 7,869,116 Media Recovery, Inc. (SpotSee) (0.4%)* (5) (7) (8) (10) Containers, Packaging and Glass First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 11/19, Due 11/25) 2,227,543 2,188,757 2,135,693 2,227,543 2,188,757 2,135,693 Music Reports, Inc. (1.2%)* (5) (7) (8) (10) Media & Entertainment First Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 08/20, Due 08/26) 6,592,972 6,428,148 6,428,148 6,592,972 6,428,148 6,428,148 Neuberger Berman CLO Ltd: Series 2020-36A (0.5%)* (3) (5) (8) (10) Structured Finance Structured Secured Note - Class E (LIBOR + 7.81%, 8.1% Cash, Acquired 03/20, Due 04/33) 2,500,000 2,476,304 2,499,470 2,500,000 2,476,304 2,499,470 NGS US Finco, LLC (f/k/a Dresser Natural Gas Solutions) (2.3%)* (5) (7) (8) (9) Energy Equipment & Services First Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.3% Cash, Acquired 10/18, Due 10/25) 11,916,381 11,871,673 11,878,249 11,916,381 11,871,673 11,878,249 Nouryon Finance B.V. (Starfruit US Holdco, LLC) (0.4%)* (3) (5) (8) (9) Specialty Chemicals First Lien Senior Secured Term Loan (LIBOR + 3.0%, 3.2% Cash, Acquired 03/20, Due 10/25) 1,984,491 1,790,303 1,918,586 1,984,491 1,790,303 1,918,586 Options Technology Ltd. (2.1%)* (3) (5) (7) (8) (10) Computer Services First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 12/19, Due 12/25) 11,034,649 10,787,963 10,755,587 11,034,649 10,787,963 10,755,587 Pare SAS (SAS Maurice MARLE) (0.9%)* (3) (5) (7) (8) (14) Health Care Equipment First Lien Senior Secured Term Loan (EURIBOR + 5.25%, 6.8% Cash, 1.5% PIK, Acquired 12/19, Due 12/26) 4,734,565 4,413,816 4,637,507 4,734,565 4,413,816 4,637,507 Patriot New Midco 1 Limited (Forensic Risk Alliance) (1.6%)* (3) (5) (7) (8) Diversified Financial Services First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 02/20, Due 02/27) (11) 4,720,287 4,591,360 4,445,391 First Lien Senior Secured Term Loan (EURIBOR + 5.75%, 5.8% Cash, Acquired 02/20, Due 02/27) (15) 4,158,610 3,758,277 3,916,425 8,878,897 8,349,637 8,361,816 Phoenix Services International LLC (0.5%)* (6) (8) (9) Steel First Lien Senior Secured Term Loan (LIBOR + 3.75%, 4.8% Cash, Acquired 08/18, Due 03/25) 2,932,331 2,941,028 2,800,376 2,932,331 2,941,028 2,800,376 12 Barings BDC, Inc. Unaudited Consolidated Schedule of Investments — (Continued) September 30, 2020 Portfolio Company Industry Type of Investment (1) (2) Principal Amount Cost Fair Value Playtika Holding Corp. (0.7%)* (5) (8) (10) Leisure, Amusement & Entertainment First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.1% Cash, Acquired 03/20, Due 12/24) $ 3,850,000 $ 3,569,560 $ 3,848,576 3,850,000 3,569,560 3,848,576 Premier Technical Services Group (Project Graphite) (0.5%)* (3) (5) (7) (8) (13) Construction & Engineering First Lien Senior Secured Term Loan (GBP LIBOR + 6.75%, 7.5% Cash, Acquired 08/19, Due 06/26) 2,940,259 2,677,987 2,706,073 2,940,259 2,677,987 2,706,073 Process Equipment, Inc. (ProcessBarron) (1.2%)* (5) (7) (8) (10) (11) Industrial Air & Material Handling Equipment First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 03/19, Due 03/25) 6,684,916 6,588,875 6,063,219 6,684,916 6,588,875 6,063,219 Professional Datasolutions, Inc. (PDI) (4.4%)* (5) (7) (8) (10) Application Software First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 03/19, Due 10/24) 22,983,010 22,955,060 22,946,238 22,983,010 22,955,060 22,946,238 Project Potter Buyer, LLC (Command Alkon) (1.9%)* (5) (7) (8) (9) Software First Lien Senior Secured Term Loan (LIBOR + 8.25%, 9.3% Cash, Acquired 04/20, Due 04/27) 9,870,877 9,588,196 9,662,601 Class A Units (104.4 units, Acquired 04/20) 104,384 136,564 Class B Units (38,426.7 units, Acquired 4/20) — — 9,870,877 9,692,580 9,799,165 PSC UK Pty Ltd. (0.4%)* (3) (5) (7) (8) (12) Insurance Services First Lien Senior Secured Term Loan (GBP LIBOR + 6.0%, 6.5% Cash, Acquired 11/19, Due 11/24) 2,062,238 1,983,472 1,996,942 2,062,238 1,983,472 1,996,942 Radiate HoldCo, LLC (0.3%)* (5) (8) (9) Cable & Satellite First Lien Senior Secured Term Loan (LIBOR + 3.5%, 4.3% Cash, Acquired 09/20, Due 09/26) 1,746,415 1,746,415 1,713,669 1,746,415 1,746,415 1,713,669 Recovery Point Systems, Inc. (2.2%)* (5) (7) (8) (10) Technology First Lien Senior Secured Term Loan (LIBOR + 6.5%, 7.5% Cash, Acquired 08/20, Due 07/26) 11,795,776 11,564,165 11,559,860 11,795,776 11,564,165 11,559,860 Refinitiv US Holdings, Inc. (0.6%)* (5) (9) Data Processing & Outsourced Services First Lien Senior Secured Term Loan (LIBOR + 3.25%, 3.4% Cash, Acquired 03/20, Due 10/25) 3,012,716 2,745,948 2,979,908 3,012,716 2,745,948 2,979,908 RR Ltd: Series 2019-6A (0.4%)* (3) (5) (10) Structured Finance Structured Secured Note - Class D (LIBOR + 6.75%, 7.0% Cash, Acquired 03/20, Due 04/30) 2,000,000 1,649,961 1,849,426 2,000,000 1,649,961 1,849,426 Ruffalo Noel Levitz, LLC (1.8%)* (5) (7) (8) (10) Media Services First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 01/19, Due 05/22) 9,641,206 9,566,226 9,496,588 9,641,206 9,566,226 9,496,588 Scaled Agile, Inc. (0.9%)* (5) (7) (8) (9) Research & Consulting Services First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 06/19, Due 06/24) 4,857,479 4,817,601 4,808,905 4,857,479 4,817,601 4,808,905 SCI Packaging Inc. (0.9%)* (6) (8) (10) Metal & Glass Containers First Lien Senior Secured Term Loan (LIBOR + 3.25%, 3.5% Cash, Acquired 08/18, Due 04/24) 4,923,664 4,915,618 4,612,882 4,923,664 4,915,618 4,612,882 Seaworld Entertainment, Inc. (1.1%)* (3) (6) (8) (9) Leisure Facilities First Lien Senior Secured Term Loan (LIBOR + 3.0%, 3.1% Cash, Acquired 08/18, Due 03/24) 5,923,469 5,916,134 5,498,934 5,923,469 5,916,134 5,498,934 Serta Simmons Bedding LLC (2.0%)* (5) (8) (9) Home Furnishings Super Priority First Out (LIBOR + 7.5%, 8.5% Cash, Acquired 6/20, Due 08/23) 7,443,107 7,235,952 7,331,460 Super Priority Second Out (LIBOR + 7.5%, 8.5% Cash, Acquired 6/20, Due 08/23) 3,652,949 3,381,618 2,969,848 11,096,056 10,617,570 10,301,308 Smile Brands Group Inc. (1.1%)* (5) (7) (8) (10) (11) Health Care Services First Lien Senior Secured Term Loan (LIBOR + 4.5%, 4.9% Cash, Acquired 10/18, Due 10/24) 5,851,605 5,808,132 5,657,743 5,851,605 5,808,132 5,657,743 Springbrook Software (SBRK Intermediate, Inc.) (1.9%)* (5) (7) (8) (10) Enterprise Software and Services First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 12/19, Due 12/26) 10,442,083 10,214,537 10,191,155 10,442,083 10,214,537 10,191,155 Syniverse Holdings, Inc. (1.5%)* (5) (6) (8) (10) Technology Distributors First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 08/18, Due 03/23) 10,263,158 10,235,328 7,876,974 10,263,158 10,235,328 7,876,974 13 Barings BDC, Inc. Unaudited Consolidated Schedule of Investments — (Continued) September 30, 2020 Portfolio Company Industry Type of Investment (1) (2) Principal Amount Cost Fair Value Tahoe Subco 1 Ltd. (Almonde, Inc.) (2.1%)* (3) (5) (6) (8) (11) Internet Software & Services First Lien Senior Secured Term Loan (LIBOR + 3.5%, 4.5% Cash, Acquired 09/18, Due 06/24) $ 11,828,390 $ 11,836,116 $ 11,032,931 11,828,390 11,836,116 11,032,931 Team Health Holdings, Inc. (1.1%)* (5) (6) (8) (9) Health Care Services First Lien Senior Secured Term Loan (LIBOR + 2.75%, 3.8% Cash, Acquired 09/18, Due 02/24) 6,840,506 6,664,086 5,719,416 6,840,506 6,664,086 5,719,416 The Hilb Group, LLC (1.8%)* (5) (7) (8) (9) (10) Insurance Brokerage First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 12/19, Due 12/26) 9,767,134 9,503,409 9,474,877 9,767,134 9,503,409 9,474,877 Total Safety U.S. Inc. (1.3%)* (5) (8) (10) Diversified Support Services First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 11/19, Due 08/25) 6,948,915 6,687,013 6,611,893 6,948,915 6,687,013 6,611,893 Transit Technologies LLC (1.1%)* (5) (7) (8) (10) Software First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.0% Cash, Acquired 02/20, Due 02/25) 6,785,305 6,575,927 6,014,494 6,785,305 6,575,927 6,014,494 Transportation Insight, LLC (4.6%)* (5) (7) (8) (10) Air Freight & Logistics First Lien Senior Secured Term Loan (LIBOR + 4.5%, 4.8% Cash, Acquired 08/18, Due 12/24) 24,589,328 24,418,931 24,343,435 24,589,328 24,418,931 24,343,435 Triumph Group Inc. (0.7%)* (3) (5) Aerospace & Defense First Lien Senior Secured Note (8.9% Cash, Acquired 08/20, Due 06/24) 3,266,000 3,266,000 3,478,290 3,266,000 3,266,000 3,478,290 Truck-Lite Co., LLC (3.4%)* (5) (7) (8) (10) Automotive Parts and Equipment First Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 12/19, Due 12/26) 19,468,270 19,062,504 18,080,155 19,468,270 19,062,504 18,080,155 Trystar, LLC (3.0%)* (5) (7) (8) (10) Power Distribution Solutions First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 09/18, Due 09/23) 15,637,813 15,464,677 15,345,385 Class A LLC Units (361.5 units, Acquired 09/18) 361,505 365,533 15,637,813 15,826,182 15,710,918 U.S. Anesthesia Partners, Inc. (2.4%)* (5) (6) (8) (11) Managed Health Care First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.0% Cash, Acquired 09/18, Due 06/24) 13,481,027 13,524,906 12,705,868 13,481,027 13,524,906 12,705,868 U.S. Silica Company (0.2%)* (5) (8) (9) Metal & Glass Containers First Lien Senior Secured Term Loan (LIBOR + 4.0%, 5.0% Cash, Acquired 08/18, Due 05/25) 1,491,380 1,494,324 1,242,036 1,491,380 1,494,324 1,242,036 UKFast Leaders Limited (5.4%)* (3) (5) (7) (8) (18) Technology First Lien Senior Secured Term Loan (GBP LIBOR + 6.75%, 6.8% Cash, Acquired 09/20, Due 9/27) 22,912,134 22,121,627 22,224,770 Super Senior Secured Term Loan (GBP LIBOR + 3.25%, 3.3% Cash, Acquired 09/20, Due 3/27) 6,248,763 6,033,283 6,061,300 29,160,897 28,154,910 28,286,070 USF Holdings LLC (U.S. Farathane, LLC) (0.5%)* (6) (8) (10) Auto Parts & Equipment First Lien Senior Secured Term Loan (LIBOR + 3.5%, 4.5% Cash, Acquired 08/18, Due 12/21) 3,088,580 3,093,550 2,665,444 3,088,580 3,093,550 2,665,444 USLS Acquisition, Inc. (f/k/a US Legal Support, Inc.) (2.8%)* (5) (7) (8) (10) (11) Legal Services First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 11/18, Due 11/24) 16,430,096 16,194,004 14,884,078 16,430,096 16,194,004 14,884,078 Utac Ceram (2.6%)* (3) (5) (8) (14) Business Services First Lien Senior Secured Term Loan (EURIBOR + 5.75%, 5.8% Cash, Acquired 09/20, Due 09/27) 14,071,806 13,503,424 13,597,762 14,071,806 13,503,424 13,597,762 Validity, Inc. (0.9%)* (5) (7) (8) (10) IT Consulting & Other Services First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.1% Cash, Acquired 07/19, Due 05/25) 5,051,351 4,915,036 4,724,276 5,051,351 4,915,036 4,724,276 Winebow Group, LLC, (The) (2.6%)* (5) (8) (9) Consumer Goods First Lien Senior Secured Term Loan (LIBOR + 3.75%, 4.8% Cash, Acquired 11/19, Due 07/21) 10,787,718 10,070,655 8,896,525 Second Lien Senior Secured Term Loan (LIBOR + 7.5%, 8.5% Cash, Acquired 10/19, Due 01/22) (7) 7,141,980 4,813,864 4,999,386 17,929,698 14,884,519 13,895,911 14 Barings BDC, Inc. Unaudited Consolidated Schedule of Investments — (Continued) September 30, 2020 Portfolio Company Industry Type of Investment (1) (2) Principal Amount Cost Fair Value World 50, Inc. (2.6%)* (5) (7) (8) (9) Professional Services First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 01/20, Due 01/26) $ 13,945,025 $ 13,607,509 $ 13,535,173 13,945,025 13,607,509 13,535,173 Subtotal Non–Control / Non–Affiliate Investments 929,268,108 903,128,567 886,610,176 Affiliate Investments: (4) Jocassee Partners LLC (3.0%)* (3) (5) Investment Funds & Vehicles 9.1% Member Interest, Acquired 06/19 15,158,270 15,952,545 15,158,270 15,952,545 Thompson Rivers LLC (0.6%)* (3) (5) Investment Funds & Vehicles 10% Member Interest, Acquired 06/20 3,100,000 3,205,530 3,100,000 3,205,530 Subtotal Affiliate Investments 18,258,270 19,158,075 Short-Term Investments: BlackRock, Inc. (4.0%)* (5) Money Market Fund BlackRock Liquidity Temporary Fund (0.13% yield) 21,000,000 21,000,000 21,000,000 21,000,000 Federated Investment Management Company (30.4%)* (6) Money Market Fund Federated Government Obligation Fund (0.01% yield) 160,046,690 160,046,690 160,046,690 160,046,690 HSBC Holdings PLC (0.5%)* (5) Money Market Fund HSBC Funds U.S. Government Money Market Fund (0.03% yield) 2,600,330 2,600,330 2,600,330 2,600,330 JPMorgan Chase & Co. (5.1%)* (6) Money Market Fund JPMorgan Prime Money Market Fund (0.16% yield) 26,856,855 26,856,370 26,856,855 26,856,370 Subtotal Short-Term Investments 210,503,875 210,503,390 Total Investments, September 30, 2020 (212.23%)* $ 929,268,108 $ 1,131,890,712 $ 1,116,271,641 Foreign Currency Forward Contracts: Description Notional Amount to be Purchased Notional Amount to be Sold Settlement Date Unrealized Appreciation (Depreciation) Foreign currency forward contract (CAD) C$13,495,000 $10,081,420 10/02/20 $ 21,550 Foreign currency forward contract (CAD) $10,255,950 C$13,495,000 10/02/20 152,979 Foreign currency forward contract (EUR) €4,672,157 $5,487,094 10/02/20 (8,286) Foreign currency forward contract (EUR) $5,374,120 €4,672,157 10/02/20 (104,687) Foreign currency forward contract (EUR) $3,412,466 €2,906,604 01/05/21 (3,740) Foreign currency forward contract (GBP) £1,285,558 $1,594,070 10/02/20 67,899 Foreign currency forward contract (GBP) $1,696,763 £1,285,558 10/02/20 34,794 Foreign currency forward contract (GBP) $529,136 £415,299 01/05/21 (8,147) Foreign currency forward contract (SEK) $80,985 751,190kr 10/02/20 (2,947) Foreign currency forward contract (SEK) 751,190kr $84,268 10/02/20 (336) Foreign currency forward contract (SEK) $92,284 821,594kr 01/05/21 362 Total Foreign Currency Forward Contracts, September 30, 2020 $ 149,441 * Fair value as a percentage of net assets. (1) All debt investments are income producing, unless otherwise noted. Equity and any equity-linked investments are non-income producing, unless otherwise noted. The Company's Board of Directors (the "Board") determined in good faith that all investments were valued at fair value in accordance with the Company's valuation policies and procedures and the Investment Company Act of 1940, as amended, (the "1940 Act") based on, among other things, the input of the Company's external investment adviser, Barings LLC ("Barings"), the Company’s Audit Committee and an independent valuation firm that has been engaged to assist in the valuation of the Company's senior secured, middle-market investments. In addition, all debt investments are variable rate investments unless otherwise noted. Index-based floating interest rates are generally subject to a contractual minimum interest rate. A majority of the variable rate loans in the Company's investment portfolio bear interest at a rate that may be determined by reference to LIBOR, EURIBOR, GBP LIBOR, STIBOR or an alternate Base Rate (commonly based on the Federal Funds Rate or the Prime Rate), which typically reset semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. (2) All of the Company’s portfolio company investments (including joint venture and short-term investments), which as of September 30, 2020 represented 212.2 % of the Company’s net assets, are subject to legal restrictions on sales. The acquisition date represents the date of the Company's initial investment in the relevant portfolio company. 15 Barings BDC, Inc. Unaudited Consolidated Schedule of Investments — (Continued) September 30, 2020 (3) Investment is not a qualifying investment as defined under Section 55(a) of the 1940 Act. Non-qualifying assets represent 19.2 % of total investments at fair value as of September 30, 2020. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets. If at any time qualifying assets do not represent at least 70% of the Company's total assets, the Company will be precluded from acquiring any additional non-qualifying asset until such time as it complies with the requirements of Section 55(a). (4) As defined in the 1940 Act, the Company is deemed to be an “affiliated person” of the portfolio company as the Company owns 5% or more of the portfolio company's voting securities (“non-controlled affiliate”). Transactions related to investments in non-controlled affiliates for the nine months ended September 30, 2020 were listed below: Amount of Realized Gain (Loss) Amount of Unrealized Gain (Loss) Amount of Interest or Dividends Credited to Income(b) December 31, 2019 Value Gross Additions (c) Gross Reductions (d) September 30, 2020 Value Portfolio Company Type of Investment(a) Jocassee Partners LLC 9.1% Member Interest $ — $ 722,732 $ — $ 10,229,813 $ 5,722,732 $ — $ 15,952,545 — 722,732 — 10,229,813 5,722,732 — 15,952,545 Thompson Rivers LLC 10% Member Interest — 105,530 — — 3,205,530 — 3,205,530 — 105,530 — — 3,205,530 — 3,205,530 Total Affiliate Investments $ — $ 828,262 $ — $ 10,229,813 $ 8,928,262 $ — $ 19,158,075 (a) Equity and equity-linked investments are non-income producing, unless otherwise noted. (b) Represents the total amount of interest, fees or dividends credited to income for the portion of the year an investment was included in the Affiliate category. (c) Gross additions include increases in the cost basis of investments resulting from new investments and follow-on investments. Gross additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation. (d) Gross reductions include decreases in the total cost basis of investments resulting from principal repayments or sales. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation. (5) Some or all of the investment is or will be encumbered as security for the Company's credit facility entered into in February 2019 (and subsequently amended in December 2019) with ING Capital LLC (the "February 2019 Credit Facility"). (6) Some or all of the investment is encumbered as security for the Company's $449.3 million term debt securitization entered into in May 2019 (the "Debt Securitization"). (7) The fair value of the investment was determined using significant unobservable inputs. (8) Debt investment includes interest rate floor feature. (9) The interest rate on these loans is subject to 1 Month LIBOR, which as of September 30, 2020 was 0.14825%. (10) The interest rate on these loans is subject to 3 Month LIBOR, which as of September 30, 2020 was 0.23388%. (11) The interest rate on these loans is subject to 6 Month LIBOR, which as of September 30, 2020 was 0.25975%. (12) The interest rate on these loans is subject to 3 Month GBP LIBOR, which as of September 30, 2020 was 0.06088%. (13) The interest rate on these loans is subject to 6 Month GBP LIBOR, which as of September 30, 2020 was 0.08750%. (14) The interest rate on these loans is subject to 3 Month EURIBOR, which as of September 30, 2020 was -0.498%. (15) The interest rate on these loans is subject to 6 Month EURIBOR, which as of September 30, 2020 was -0.480%. (16) The interest rate on these loans is subject to 3 Month STIBOR, which as of September 30, 2020 was -0.084%. (17) The interest rate on these loans is subject to 2 Month LIBOR, which as of September 30, 2020 was 0.19388%. (18) The interest rate on these loans is subject to 1 month GBP LIBOR, which as of September 30, 2020 was 0.04538%. (19) The interest rate on these loans is subject to Prime, which as of September 30, 2020 was 3.25% . (20) The interest rate on these loans is subject to 1 Month EURIBOR, which as of September 30, 2020 was -0.529%. See accompanying notes. 16 Barings BDC, Inc. Consolidated Schedule of Investments December 31, 2019 Portfolio Company Industry Type of Investment (1) (2) Principal Amount Cost Fair Value Non–Control / Non–Affiliate Investments: 1WorldSync, Inc. (3.9%)* (5) (7) (8) IT Consulting & Other Services First Lien Senior Secured Term Loan (LIBOR + 7.25%, 9.2% Cash, Acquired 07/19, Due 07/25) $ 22,445,913 $ 22,024,832 $ 22,000,839 22,445,913 22,024,832 22,000,839 24 Hour Fitness Worldwide, Inc. (0.6%)* (4) (6) (8) Leisure Facilities First Lien Senior Secured Term Loan (LIBOR + 3.5%, 5.3% Cash, Acquired 08/18, Due 05/25) 4,612,441 4,652,772 3,475,889 4,612,441 4,652,772 3,475,889 Accelerate Learning, Inc. (1.3%)* (5) (7) (8) Education Services First Lien Senior Secured Term Loan (LIBOR + 4.5%, 6.4% Cash, Acquired 12/18, Due 12/24) 7,567,964 7,438,417 7,271,525 7,567,964 7,438,417 7,271,525 Accurus Aerospace Corporation (4.1%)* (5) (7) (8) Aerospace & Defense First Lien Senior Secured Term Loan (LIBOR + 4.5%, 6.4% Cash, Acquired 10/18, Due 10/24) 24,750,000 24,442,153 23,423,629 24,750,000 24,442,153 23,423,629 Acrisure, LLC (0.9%)* (6) (8) Property & Casualty Insurance First Lien Senior Secured Term Loan (LIBOR + 4.25%, 6.2% Cash, Acquired 08/18, Due 11/23) 4,961,929 4,986,542 4,968,131 4,961,929 4,986,542 4,968,131 ADMI Corp. (0.6%)* (6) (8) Health Care Services First Lien Senior Secured Term Loan (LIBOR + 2.75%, 4.5% Cash, Acquired 08/18, Due 04/25) 3,447,500 3,458,266 3,449,672 3,447,500 3,458,266 3,449,672 Aftermath Bidco Corporation (2.1%)* (5) (7) (8) Professional Services First Lien Senior Secured Term Loan (LIBOR + 5.75%, 7.8% Cash, Acquired 04/19, Due 04/25) 12,259,030 12,010,502 12,016,813 12,259,030 12,010,502 12,016,813 AlixPartners LLP (0.9%)* (6) (8) Investment Banking & Brokerage First Lien Senior Secured Term Loan (LIBOR + 2.75%, 4.5% Cash, Acquired 09/18, Due 04/24) 4,961,735 4,980,608 4,985,005 4,961,735 4,980,608 4,985,005 Alliant Holdings LP (0.9%)* (6) (8) Property & Casualty Insurance First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.8% Cash, Acquired 09/18, Due 05/25) 4,922,531 4,929,349 4,919,775 4,922,531 4,929,349 4,919,775 American Dental Partners, Inc. (1.7%)* (5) (8) Health Care Services First Lien Senior Secured Term Loan (LIBOR + 4.25%, 6.2% Cash, Acquired 11/18, Due 03/23) 9,900,000 9,880,958 9,751,500 9,900,000 9,880,958 9,751,500 American Scaffold, Inc. (1.7%)* (5) (7) (8) Aerospace & Defense First Lien Senior Secured Term Loan (LIBOR + 5.25%, 7.2% Cash, Acquired 09/19, Due 09/25) 9,784,844 9,574,185 9,576,821 9,784,844 9,574,185 9,576,821 Anju Software, Inc. (2.4%)* (5) (7) (8) Application Software First Lien Senior Secured Term Loan (LIBOR + 5.5%, 7.4% Cash, Acquired 02/19, Due 02/25) 13,820,065 13,505,384 13,485,435 13,820,065 13,505,384 13,485,435 Apex Tool Group, LLC (1.2%)* (4) (6) (8) Industrial Machinery First Lien Senior Secured Term Loan (LIBOR + 5.5%, 7.3% Cash, Acquired 08/18, Due 08/24) 7,145,435 7,014,166 7,032,680 7,145,435 7,014,166 7,032,680 Applied Systems Inc. (0.9%)* (6) (8) Application Software First Lien Senior Secured Term Loan (LIBOR + 3.25%, 5.2% Cash, Acquired 09/19, Due 09/24) 4,963,321 4,993,617 4,978,360 4,963,321 4,993,617 4,978,360 AQA Acquisition Holding, Inc. (f/k/a SmartBear) (0.9%)* (5) (7) (8) High Tech Industries Second Lien Senior Secured Term Loan (LIBOR + 8.0%, 10.1% Cash, Acquired 10/18, Due 05/24) 4,959,088 4,857,998 4,859,316 4,959,088 4,857,998 4,859,316 Arch Global Precision LLC (1.4%)* (5) (7) (8) Industrial Machinery First Lien Senior Secured Term Loan (LIBOR + 4.75%, 6.6% Cash, Acquired 04/19, Due 04/26) 8,285,058 8,160,532 8,202,739 8,285,058 8,160,532 8,202,739 Armstrong Transport Group (Pele Buyer, LLC ) (0.8%)* (5) (7) (8) Air Freight & Logistics First Lien Senior Secured Term Loan (LIBOR + 4.75%, 6.5% Cash, Acquired 06/19, Due 06/24) 4,679,427 4,581,840 4,575,617 4,679,427 4,581,840 4,575,617 Ascend Learning, LLC (0.9%)* (6) (8) IT Consulting & Other Services First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.8% Cash, Acquired 09/18, Due 07/24) 4,961,928 4,971,130 4,989,864 4,961,928 4,971,130 4,989,864 Ascensus Specialties, LLC (1.4%)* (5) (7) (8) Specialty Chemicals First Lien Senior Secured Term Loan (LIBOR + 4.75%, 6.4% Cash, Acquired 09/19, Due 09/26) 8,092,810 8,014,212 8,023,386 8,092,810 8,014,212 8,023,386 17 Barings BDC, Inc. Consolidated Schedule of Investments — (Continued) December 31, 2019 Portfolio Company Industry Type of Investment (1) (2) Principal Amount Cost Fair Value ASPEQ Heating Group LLC (1.8%)* (5) (7) (8) Building Products, Air and Heating First Lien Senior Secured Term Loan (LIBOR + 5.25%, 7.2% Cash, Acquired 11/19, Due 11/25) $ 10,535,858 $ 10,381,002 $ 10,403,101 10,535,858 10,381,002 10,403,101 AssuredPartners Capital, Inc. (0.9%)* (6) (8) Property & Casualty Insurance First Lien Senior Secured Term Loan (LIBOR + 3.5%, 5.3% Cash, Acquired 08/18, Due 10/24) 4,957,568 4,966,915 4,968,722 4,957,568 4,966,915 4,968,722 Auxi International (1.0%)* (3) (5) (7) (8) Commercial Finance First Lien Senior Secured Term Loan (EURIBOR + 5.5%, 5.5% Cash, Acquired 12/19, Due 12/26) 5,578,822 5,359,131 5,429,359 5,578,822 5,359,131 5,429,359 Avantor, Inc. (0.3%)* (3) (6) (8) Health Care Equipment First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.8% Cash, Acquired 08/18, Due 11/24) 1,477,017 1,494,467 1,489,320 1,477,017 1,494,467 1,489,320 Aveanna Healthcare Holdings, Inc. (0.8%)* (6) (8) Health Care Facilities First Lien Senior Secured Term Loan (LIBOR + 4.25%, 6.0% Cash, Acquired 10/18, Due 03/24) 1,473,559 1,457,678 1,415,545 First Lien Senior Secured Term Loan (LIBOR + 5.5%, 7.3% Cash, Acquired 10/18, Due 03/24) 3,529,748 3,530,607 3,400,700 5,003,307 4,988,285 4,816,245 AVSC Holding Corp. (1.4%)* (4) (5) (6) (8) Advertising First Lien Senior Secured Term Loan (LIBOR + 3.25%, 5.1% Cash, Acquired 08/18, Due 03/25) 7,879,699 7,843,898 7,840,301 7,879,699 7,843,898 7,840,301 Bausch Health Companies Inc. (0.8%)* (3) (6) (8) Health Care Services First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.7% Cash, Acquired 08/18, Due 05/25) 4,581,718 4,600,701 4,604,627 4,581,718 4,600,701 4,604,627 BDP International, Inc. (f/k/a BDP Buyer, LLC) (4.3%)* (5) (7) (8) Air Freight & Logistics First Lien Senior Secured Term Loan (LIBOR + 4.75%, 6.7% Cash, Acquired 12/18, Due 12/24) 24,750,000 24,326,180 24,449,263 24,750,000 24,326,180 24,449,263 Benify (Bennevis AB) (0.2%)* (3) (5) (7) (8) High Tech Industries First Lien Senior Secured Term Loan (STIBOR + 5.75%, 5.85% Cash, Acquired 07/19, Due 07/26) 1,394,029 1,363,957 1,373,219 1,394,029 1,363,957 1,373,219 Berlin Packaging LLC (1.5%)* (4) (5) (6) (8) Forest Products /Containers First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.7% Cash, Acquired 08/18, Due 11/25) 8,372,500 8,389,597 8,297,734 8,372,500 8,389,597 8,297,734 Blackhawk Network Holdings Inc. (0.9%)* (6) (8) Data Processing & Outsourced Services First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.8% Cash, Acquired 11/18, Due 06/25) 4,962,217 4,962,217 4,957,056 4,962,217 4,962,217 4,957,056 Brown Machine Group Holdings, LLC (0.9%)* (5) (7) (8) Industrial Equipment First Lien Senior Secured Term Loan (LIBOR + 5.25%, 7.2% Cash, Acquired 10/18, Due 10/24) 5,286,022 5,231,847 5,016,305 5,286,022 5,231,847 5,016,305 Cadent, LLC (f/k/a Cross MediaWorks) (1.4%)* (5) (7) (8) Media & Entertainment First Lien Senior Secured Term Loan (LIBOR + 5.25%, 7.0% Cash, Acquired 09/18, Due 09/23) 7,866,556 7,806,344 7,827,224 7,866,556 7,806,344 7,827,224 Capital Automotive LLC (0.9%)* (6) (8) Automotive Retail First Lien Senior Secured Term Loan (LIBOR + 2.5%, 4.3% Cash, Acquired 09/18, Due 03/24) 4,987,277 4,999,916 4,998,199 4,987,277 4,999,916 4,998,199 CM Acquisitions Holdings Inc. (f/k/a Campaign Monitor (UK) Limited) (3.5%)* (5) (7) (8) Internet & Direct Marketing First Lien Senior Secured Term Loan (LIBOR + 4.75%, 6.5% Cash, Acquired 05/19, Due 05/25) 20,537,685 20,188,267 20,161,398 20,537,685 20,188,267 20,161,398 Confie Seguros Holding II Co. (0.4%)* (5) (7) (8) Insurance Brokerage Services Second Lien Senior Secured Term Loan (LIBOR + 8.5%, 10.4% Cash, Acquired 10/19, Due 11/25) 2,500,000 2,350,797 2,312,500 2,500,000 2,350,797 2,312,500 Contabo Finco S.À R.L (0.9%)* (3) (5) (7) (8) Internet Software and Services First Lien Senior Secured Term Loan (EURIBOR + 5.75%, 5.75% Cash, Acquired 10/19, Due 10/26) 5,069,246 4,853,087 4,900,448 5,069,246 4,853,087 4,900,448 Container Store Group, Inc., (The) (0.5%)* (6) (7) (8) Retail First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.8% Cash, Acquired 09/18, Due 09/23) 2,929,197 2,931,249 2,753,445 2,929,197 2,931,249 2,753,445 Core & Main LP (0.7%)* (6) (8) Building Products First Lien Senior Secured Term Loan (LIBOR + 2.75%, 4.5% Cash, Acquired 09/18, Due 08/24) 3,979,695 3,995,692 3,978,024 3,979,695 3,995,692 3,978,024 18 Barings BDC, Inc. Consolidated Schedule of Investments — (Continued) December 31, 2019 Portfolio Company Industry Type of Investment (1) (2) Principal Amount Cost Fair Value CPG Intermediate LLC (0.4%)* (6) (8) Specialty Chemicals First Lien Senior Secured Term Loan (LIBOR + 3.5%, 5.3% Cash, Acquired 08/18, Due 11/24) $ 2,110,623 $ 2,112,734 $ 2,122,506 2,110,623 2,112,734 2,122,506 CPI International Inc. (0.8%)* (6) (8) Electronic Components First Lien Senior Secured Term Loan (LIBOR + 3.5%, 5.3% Cash, Acquired 09/18, Due 07/24) 4,747,070 4,753,808 4,557,187 4,747,070 4,753,808 4,557,187 Dart Buyer, Inc. (1.8%)* (3) (5) (7) (8) Aerospace & Defense First Lien Senior Secured Term Loan (LIBOR + 5.25%, 7.2% Cash, Acquired 04/19, Due 04/25) 10,571,782 10,307,197 10,315,912 10,571,782 10,307,197 10,315,912 Dimora Brands, Inc. (0.5%)* (6) (8) Building Products First Lien Senior Secured Term Loan (LIBOR + 3.5%, 5.3% Cash, Acquired 08/18, Due 08/24) 2,941,442 2,944,373 2,919,381 2,941,442 2,944,373 2,919,381 Distinct Holdings, Inc. (1.3%)* (5) (7) (8) Systems Software First Lien Senior Secured Term Loan (LIBOR + 4.75%, 6.7% Cash, Acquired 04/19, Due 12/23) 7,592,719 7,509,950 7,519,228 7,592,719 7,509,950 7,519,228 Duff & Phelps Corporation (1.2%)* (4) (6) (8) Research & Consulting Services First Lien Senior Secured Term Loan (LIBOR + 3.25%, 5.0% Cash, Acquired 09/18, Due 02/25) 6,754,286 6,769,081 6,725,310 6,754,286 6,769,081 6,725,310 Edelman Financial Center, LLC, The (f/k/a Edelman Financial Group, Inc.) (0.9%)* (6) (8) Investment Banking & Brokerage First Lien Senior Secured Term Loan (LIBOR + 3.25%, 5.0% Cash, Acquired 09/18, Due 07/25) 4,962,406 4,999,143 4,986,176 4,962,406 4,999,143 4,986,176 Endo International PLC (1.3%)* (3) (4) (6) (8) Pharmaceuticals First Lien Senior Secured Term Loan (LIBOR + 4.25%, 6.1% Cash, Acquired 09/18, Due 04/24) 7,878,788 7,939,415 7,524,242 7,878,788 7,939,415 7,524,242 Exeter Property Group, LLC (2.2%)* (5) (7) (8) Real Estate First Lien Senior Secured Term Loan (LIBOR + 4.5%, 6.2% Cash, Acquired 02/19, Due 08/24) 12,437,500 12,276,532 12,351,037 12,437,500 12,276,532 12,351,037 ExGen Renewables IV, LLC (f/k/a Exelon Corp.) (0.5%)* (3) (6) (8) Electric Utilities First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.9% Cash, Acquired 09/18, Due 11/24) 2,865,257 2,888,576 2,822,278 2,865,257 2,888,576 2,822,278 Eyemart Express (0.6%)* (6) (8) Retail First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.8% Cash, Acquired 08/18, Due 08/24) 3,452,217 3,462,081 3,456,463 3,452,217 3,462,081 3,456,463 Fieldwood Energy LLC (1.5%)* (4) (5) (6) (8) Oil & Gas Equipment & Services First Lien Senior Secured Term Loan (LIBOR + 5.25%, 7.2% Cash, Acquired 08/18, Due 04/22) 10,000,000 10,065,208 8,322,200 10,000,000 10,065,208 8,322,200 Filtration Group Corporation (0.8%)* (6) (8) Industrial Machinery First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.8% Cash, Acquired 09/18, Due 03/25) 4,774,230 4,804,208 4,788,840 4,774,230 4,804,208 4,788,840 Flex Acquisition Holdings, Inc. (1.7%)* (4) (5) (6) (8) Paper Packaging First Lien Senior Secured Term Loan (LIBOR + 3.25%, 5.3% Cash, Acquired 08/18, Due 06/25) 9,782,731 9,800,160 9,695,077 9,782,731 9,800,160 9,695,077 Frazer Consultants, LLC (d/b/a Tribute Technology) (1.3%)* (5) (7) (8) Software Services First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.7% Cash, Acquired 11/19, Due 08/23) 7,742,985 7,667,700 7,684,869 7,742,985 7,667,700 7,684,869 Graftech International Ltd. (1.6%)* (3) (4) (6) (7) (8) Specialty Chemicals First Lien Senior Secured Term Loan (LIBOR + 3.5%, 5.3% Cash, Acquired 08/18, Due 02/25) 9,013,889 9,081,525 8,980,087 9,013,889 9,081,525 8,980,087 Gulf Finance, LLC (0.1%)* (4) (8) Oil & Gas Exploration & Production First Lien Senior Secured Term Loan (LIBOR + 5.25%, 7.0% Cash, Acquired 10/18, Due 08/23) 1,058,979 920,988 826,003 1,058,979 920,988 826,003 Harbor Freight Tools USA Inc.(1.0%)* (6) (8) Specialty Stores First Lien Senior Secured Term Loan (LIBOR + 2.5%, 4.3% Cash, Acquired 08/18, Due 08/23) 5,979,675 5,931,148 5,951,870 5,979,675 5,931,148 5,951,870 Hayward Industries, Inc. (1.4%)* (4) (6) (8) Leisure Products First Lien Senior Secured Term Loan (LIBOR + 3.5%, 5.3% Cash, Acquired 08/18, Due 08/24) 8,221,922 8,247,578 8,147,924 8,221,922 8,247,578 8,147,924 19 Barings BDC, Inc. Consolidated Schedule of Investments — (Continued) December 31, 2019 Portfolio Company Industry Type of Investment (1) (2) Principal Amount Cost Fair Value Heartland, LLC (0.9%)* (5) (7) (8) Commercial Services & Supplies First Lien Senior Secured Term Loan (LIBOR + 4.75%, 6.7% Cash, Acquired 08/19, Due 08/25) $ 5,504,030 $ 5,260,931 $ 5,280,431 5,504,030 5,260,931 5,280,431 Heilbron (f/k/a Sucsez (Bolt Bidco B.V.)) (1.2%)* (3) (5) (7) (8) Insurance First Lien Senior Secured Term Loan (EURIBOR + 5.0%, 5.0% Cash, Acquired 09/19, Due 09/26) 6,948,082 6,633,562 6,713,253 6,948,082 6,633,562 6,713,253 Hertz Corporation (The) (1.0%)* (3) (6) (8) Rental & Leasing Services First Lien Senior Secured Term Loan (LIBOR + 2.75%, 4.6% Cash, Acquired 09/18, Due 06/23) 5,814,910 5,806,679 5,845,206 5,814,910 5,806,679 5,845,206 Holley Performance Products (Holley Purchaser, Inc.) (3.9%)* (5) (7) (8) Packaging First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.9% Cash, Acquired 10/18, Due 10/25) 22,309,650 22,020,784 22,015,260 22,309,650 22,020,784 22,015,260 Hub International Limited (0.9%)* (6) (8) Property & Casualty Insurance First Lien Senior Secured Term Loan (LIBOR + 2.75%, 4.7% Cash, Acquired 08/18, Due 04/25) 4,962,217 4,966,855 4,955,666 4,962,217 4,966,855 4,955,666 HW Holdco, LLC (f/k/a Hanley Wood LLC) (1.3%)* (5) (7) (8) Advertising First Lien Senior Secured Term Loan (LIBOR + 6.25%, 8.1% Cash, Acquired 12/18, Due 12/24) 7,584,677 7,422,931 7,447,061 7,584,677 7,422,931 7,447,061 Hyland Software Inc. (0.9%)* (6) (8) Technology Distributors First Lien Senior Secured Term Loan (LIBOR + 3.5%, 5.3% Cash, Acquired 09/18, Due 07/24) 4,962,312 5,001,673 4,984,046 4,962,312 5,001,673 4,984,046 Hyperion Materials & Technologies, Inc. (2.4%)* (5) (7) (8) Industrial Machinery First Lien Senior Secured Term Loan (LIBOR + 5.5%, 7.3% Cash, Acquired 08/19, Due 08/26) 13,995,753 13,751,206 13,873,283 13,995,753 13,751,206 13,873,283 IM Analytics Holding, LLC (d/b/a NVT) (1.6%)* (5) (7) (8) Electronic Instruments and Components First Lien Senior Secured Term Loan (LIBOR + 6.5%, 8.4% Cash, Acquired 11/19, Due 11/23) 9,292,112 9,201,220 9,222,019 Warrant (77,265 units, Acquired 11/19) — — 9,292,112 9,201,220 9,222,019 Immucor Inc. (0.4%)* (4) (8) Healthcare First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.9% Cash, Acquired 09/18, Due 06/21) 2,466,061 2,486,174 2,454,496 2,466,061 2,486,174 2,454,496 Infor Software Parent, LLC (0.9%)* (6) (8) Systems Software First Lien Senior Secured Term Loan (LIBOR + 2.75%, 4.7% Cash, Acquired 08/18, Due 02/22) 4,970,073 4,976,381 4,989,606 4,970,073 4,976,381 4,989,606 Institutional Shareholder Services, Inc. (0.8%)* (5) (7) (8) Diversified Support Services Second Lien Senior Secured Term Loan (LIBOR + 8.5%, 10.4% Cash, Acquired 03/19, Due 03/27) 4,951,685 4,816,340 4,840,149 4,951,685 4,816,340 4,840,149 Internet Brands, Inc.(f/k/a Micro Holding Corp.) (0.7%)* (6) (8) Entertainment First Lien Senior Secured Term Loan (LIBOR + 3.75%, 5.5% Cash, Acquired 08/18, Due 09/24) 3,969,543 3,992,088 3,973,949 3,969,543 3,992,088 3,973,949 ION Trading Technologies Ltd. (2.5%)* (3) (4) (6) (8) Electrical Components & Equipment First Lien Senior Secured Term Loan (LIBOR + 4.0%, 6.1% Cash, Acquired 08/18, Due 11/24) 14,773,869 14,745,732 14,145,980 14,773,869 14,745,732 14,145,980 IRB Holding Corporation (0.7%)* (6) (8) Food Retail First Lien Senior Secured Term Loan (LIBOR + 3.25%, 5.2% Cash, Acquired 08/18, Due 02/25) 3,969,697 3,984,302 3,990,657 3,969,697 3,984,302 3,990,657 Jade Bidco Limited (4.2%)* (3) (5) (7) (8) Aerospace & Defense First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.9% Cash, Acquired 11/19, Due 12/26) 20,933,517 20,363,170 20,377,010 First Lien Senior Secured Term Loan (EURIBOR + 6.0%, 6.0% Cash, Acquired 11/19, Due 12/26) 3,748,582 3,581,938 3,648,928 24,682,099 23,945,108 24,025,938 Jaguar Holding Company I (0.9%)* (6) (8) Life Sciences Tools & Services First Lien Senior Secured Term Loan (LIBOR + 2.5%, 4.3% Cash, Acquired 08/18, Due 08/22) 4,922,680 4,923,566 4,945,620 4,922,680 4,923,566 4,945,620 Kenan Advantage Group Inc. (1.1%)* (4) (5) (6) (8) Trucking First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.8% Cash, Acquired 08/18, Due 07/22) 6,203,297 6,200,149 6,145,172 6,203,297 6,200,149 6,145,172 20 Barings BDC, Inc. Consolidated Schedule of Investments — (Continued) December 31, 2019 Portfolio Company Industry Type of Investment (1) (2) Principal Amount Cost Fair Value Kene Acquisition, Inc. (1.1%)* (5) (7) (8) Oil & Gas Equipment & Services First Lien Senior Secured Term Loan (LIBOR + 4.25%, 6.2% Cash, Acquired 08/19, Due 08/26) $ 6,635,895 $ 6,488,912 $ 6,490,475 6,635,895 6,488,912 6,490,475 K-Mac Holdings Corp. (0.2%)* (6) (8) Restaurants First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.8% Cash, Acquired 08/18, Due 03/25) 994,342 997,356 979,925 994,342 997,356 979,925 Kronos Inc. (1.1%)* (6) (8) Application Software First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.9% Cash, Acquired 08/18, Due 11/23) 5,998,096 6,018,120 6,024,727 5,998,096 6,018,120 6,024,727 LAC Intermediate, LLC (f/k/a Lighthouse Autism Center) (1.4%)* (5) (7) (8) Healthcare & Pharmaceuticals First Lien Senior Secured Term Loan (LIBOR + 5.75%, 7.7% Cash, Acquired 10/18, Due 10/24) 7,887,705 7,666,906 7,550,895 Class A LLC Units (154,320 units, Acquired 10/18) 154,320 163,135 7,887,705 7,821,226 7,714,030 LTI Holdings, Inc. (1.9%)* (4) (6) (8) Industrial Conglomerates First Lien Senior Secured Term Loan (LIBOR + 3.5%, 5.3% Cash, Acquired 09/18, Due 09/25) 11,850,000 11,906,192 10,610,016 11,850,000 11,906,192 10,610,016 Mallinckrodt Plc (0.5%)* (3) (4) (5) (6) (8) Health Care Services First Lien Senior Secured Term Loan (LIBOR + 2.75%, 4.9% Cash, Acquired 08/18, Due 09/24) 3,254,149 3,243,401 2,648,519 3,254,149 3,243,401 2,648,519 MB2 Dental Solutions, LLC (0.8%)* (5) (7) (8) Health Care Services First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.9% Cash, Acquired 09/19, Due 09/23) 4,723,425 4,670,058 4,671,419 4,723,425 4,670,058 4,671,419 Media Recovery, Inc. (0.6%)* (5) (7) (8) Containers, Packaging and Glass First Lien Senior Secured Term Loan (LIBOR + 5.75%, 7.7% Cash, Acquired 11/19, Due 11/25) 3,233,126 3,169,337 3,176,175 3,233,126 3,169,337 3,176,175 Men's Wearhouse, Inc. (The) (1.4%)* (4) (6) (8) Apparel Retail First Lien Senior Secured Term Loan (LIBOR + 3.25%, 4.9% Cash, Acquired 08/18, Due 04/25) 9,845,114 9,928,392 7,843,307 9,845,114 9,928,392 7,843,307 Nautilus Power, LLC (0.6%)* (6) (8) Independent Power Producers & Energy Traders First Lien Senior Secured Term Loan (LIBOR + 4.25%, 6.0% Cash, Acquired 09/18, Due 05/24) 3,220,650 3,234,041 3,206,157 3,220,650 3,234,041 3,206,157 NFP Corp. (1.5%)* (4) (6) (8) Specialized Finance First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.8% Cash, Acquired 08/18, Due 01/24) 8,564,081 8,562,584 8,521,261 8,564,081 8,562,584 8,521,261 NGS US Finco, LLC (f/k/a Dresser Natural Gas Solutions) (2.1%)* (5) (7) (8) Energy Equipment & Services First Lien Senior Secured Term Loan (LIBOR + 4.25%, 6.0% Cash, Acquired 10/18, Due 10/25) 11,994,231 11,943,470 11,870,574 11,994,231 11,943,470 11,870,574 NVA Holdings, Inc. (0.7%)* (6) (8) Health Care Facilities First Lien Senior Secured Term Loan (LIBOR + 2.75%, 6.5% Cash, Acquired 08/18, Due 02/25) 3,979,900 3,973,472 3,975,761 3,979,900 3,973,472 3,975,761 Omaha Holdings LLC (0.9%)* (6) (8) Auto Parts & Equipment First Lien Senior Secured Term Loan (LIBOR + 2.75%, 4.5% Cash, Acquired 09/18, Due 03/24) 4,961,929 4,991,732 4,961,929 4,961,929 4,991,732 4,961,929 Omnitracs, LLC (0.8%)* (6) (8) Application Software First Lien Senior Secured Term Loan (LIBOR + 2.75%, 4.7% Cash, Acquired 08/18, Due 03/25) 4,619,141 4,606,867 4,600,387 4,619,141 4,606,867 4,600,387 Options Technology Ltd. (1.9%)* (3) (5) (7) (8) Computer Services First Lien Senior Secured Term Loan (LIBOR + 4.5%, 6.5% Cash, Acquired 12/19, Due 12/25) 11,090,100 10,810,546 10,838,484 11,090,100 10,810,546 10,838,484 Ortho-Clinical Diagnostics Bermuda Co. Ltd. (2.0%)* (4) (6) (8) Health Care Services First Lien Senior Secured Term Loan (LIBOR + 3.25%, 5.3% Cash, Acquired 08/18, Due 06/25) 11,286,170 11,289,852 11,142,722 11,286,170 11,289,852 11,142,722 Pare SAS (SAS Maurice MARLE) (2.4%)* (3) (5) (7) (8) Health Care Equipment First Lien Senior Secured Term Loan (EURIBOR + 6.75%, 5.75% Cash, 1.0% PIK, Acquired 12/19, Due 12/26) 13,918,994 13,521,804 13,640,614 13,918,994 13,521,804 13,640,614 PAREXEL International Corp. (1.1%)* (4) (6) (8) Pharmaceuticals First Lien Senior Secured Term Loan (LIBOR + 2.75%, 4.6% Cash, Acquired 09/18, Due 09/24) 6,680,843 6,655,192 6,544,821 6,680,843 6,655,192 6,544,821 21 Barings BDC, Inc. Consolidated Schedule of Investments — (Continued) December 31, 2019 Portfolio Company Industry Type of Investment (1) (2) Principal Amount Cost Fair Value Penn Engineering & Manufacturing Corp. (0.3%)* (6) (8) Industrial Conglomerates First Lien Senior Secured Term Loan (LIBOR + 2.75%, 4.5% Cash, Acquired 09/18, Due 06/24) $ 1,684,725 $ 1,696,539 $ 1,682,619 1,684,725 1,696,539 1,682,619 PeroxyChem Holdings, L.P. (1.5%)* (5) (7) (8) Diversified Chemicals First Lien Senior Secured Term Loan (LIBOR + 5.0%, 7.1% Cash, Acquired 10/19, Due 09/24) 8,415,118 8,374,666 8,384,879 8,415,118 8,374,666 8,384,879 Phoenix Services International LLC (0.5%)* (6) (8) Steel First Lien Senior Secured Term Loan (LIBOR + 3.75%, 5.5% Cash, Acquired 08/18, Due 03/25) 2,954,887 2,964,982 2,757,885 2,954,887 2,964,982 2,757,885 PODS Enterprises, Inc. (0.9%)* (6) (8) Packaging First Lien Senior Secured Term Loan (LIBOR + 2.75%, 4.5% Cash, Acquired 09/18, Due 12/24) 4,961,943 4,975,275 4,982,088 4,961,943 4,975,275 4,982,088 Premier Technical Services Group (0.5%)* (3) (5) (7) (8) Construction & Engineering First Lien Senior Secured Term Loan (GBP LIBOR + 6.75%, 7.5% Cash, Acquired 08/19, Due 08/26) 2,875,549 2,533,643 2,752,808 2,875,549 2,533,643 2,752,808 Pro Mach Inc. (1.0%)* (5) (6) (8) Industrial Machinery First Lien Senior Secured Term Loan (LIBOR + 2.75%, 4.5% Cash, Acquired 08/18, Due 03/25) 5,909,774 5,893,603 5,847,013 5,909,774 5,893,603 5,847,013 ProAmpac Intermediate Inc. (1.7%)* (4) (6) (8) Packaged Foods & Meats First Lien Senior Secured Term Loan (LIBOR + 3.5%, 5.4% Cash, Acquired 08/18, Due 11/23) 9,846,482 9,857,895 9,680,372 9,846,482 9,857,895 9,680,372 Process Equipment, Inc. (1.1%)* (5) (7) (8) Industrial Air & Material Handling Equipment First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.9% Cash, Acquired 03/19, Due 03/25) 6,762,500 6,635,562 6,546,325 6,762,500 6,635,562 6,546,325 Professional Datasolutions, Inc. (PDI) (4.0%)* (5) (7) (8) Application Software First Lien Senior Secured Term Loan (LIBOR + 4.5%, 6.4% Cash, Acquired 03/19, Due 10/24) 23,158,008 23,120,723 22,879,936 23,158,008 23,120,723 22,879,936 PSC UK Pty Ltd. (0.6%)* (3) (5) (7) (8) Insurance Services First Lien Senior Secured Term Loan (GBP LIBOR + 5.5%, 6.3% Cash, Acquired 11/19, Due 11/24) 3,625,921 3,396,509 3,494,295 3,625,921 3,396,509 3,494,295 Qlik Technologies Inc. (Alpha Intermediate Holding, Inc.) (0.9%)* (6) (8) Application Software First Lien Senior Secured Term Loan (LIBOR + 3.5%, 5.5% Cash, Acquired 08/18, Due 04/24) 4,974,555 4,974,727 4,977,689 4,974,555 4,974,727 4,977,689 Red Ventures, LLC (1.0%)* (6) (8) Advertising First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.8% Cash, Acquired 09/18, Due 11/24) 5,954,774 5,985,039 5,990,919 5,954,774 5,985,039 5,990,919 RedPrairie Holding, Inc. (0.9%)* (6) (8) Computer Storage & Peripherals First Lien Senior Secured Term Loan (LIBOR + 2.75%, 4.6% Cash, Acquired 09/18, Due 10/23) 4,961,637 4,990,946 4,989,571 4,961,637 4,990,946 4,989,571 Renaissance Learning, Inc. (0.9%)* (6) (8) Application Software First Lien Senior Secured Term Loan (LIBOR + 3.25%, 5.0% Cash, Acquired 08/18, Due 05/25) 5,391,318 5,387,730 5,354,711 5,391,318 5,387,730 5,354,711 Reynolds Group Holdings Ltd. (0.9%)* (6) (8) Packaging First Lien Senior Secured Term Loan (LIBOR + 2.75%, 4.5% Cash, Acquired 09/18, Due 02/23) 4,961,637 4,979,527 4,973,297 4,961,637 4,979,527 4,973,297 Ruffalo Noel Levitz, LLC (1.7%)* (5) (7) (8) Media Services First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.9% Cash, Acquired 01/19, Due 05/22) 9,714,617 9,607,656 9,641,334 9,714,617 9,607,656 9,641,334 Scaled Agile, Inc. (0.9%)* (5) (7) (8) Research & Consulting Services First Lien Senior Secured Term Loan (LIBOR + 5.25%, 7.0% Cash, Acquired 06/19, Due 06/24) 4,986,980 4,940,603 4,941,809 4,986,980 4,940,603 4,941,809 SCI Packaging Inc. (0.9%)* (6) (8) Metal & Glass Containers First Lien Senior Secured Term Loan (LIBOR + 3.25%, 5.2% Cash, Acquired 08/18, Due 04/24) 4,961,832 4,952,139 4,940,149 4,961,832 4,952,139 4,940,149 Seadrill Ltd. (0.9%)* (3) (4) (8) Oil & Gas Equipment & Services First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.9% Cash, Acquired 09/18, Due 02/21) 9,809,097 9,508,856 4,883,066 9,809,097 9,508,856 4,883,066 22 Barings BDC, Inc. Consolidated Schedule of Investments — (Continued) December 31, 2019 Portfolio Company Industry Type of Investment (1) (2) Principal Amount Cost Fair Value Seaworld Entertainment, Inc. (1.0%)* (3) (6) (8) Leisure Facilities First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.8% Cash, Acquired 08/18, Due 03/24) $ 5,954,081 $ 5,945,241 $ 5,978,910 5,954,081 5,945,241 5,978,910 Serta Simmons Bedding LLC (0.6%)* (4) (5) (8) Home Furnishings First Lien Senior Secured Term Loan (LIBOR + 3.5%, 5.2% Cash, Acquired 10/19, Due 11/23) 4,961,929 3,927,986 3,184,963 4,961,929 3,927,986 3,184,963 SIWF Holdings, Inc. (1.6%)* (4) (6) (8) Home Furnishings First Lien Senior Secured Term Loan (LIBOR + 4.25%, 6.0% Cash, Acquired 08/18, Due 06/25) 9,350,501 9,403,797 9,303,749 9,350,501 9,403,797 9,303,749 SK Blue Holdings, LP (0.7%)* (6) (7) (8) Commodity Chemicals First Lien Senior Secured Term Loan (LIBOR + 4.75%, 6.8% Cash, Acquired 09/18, Due 10/25) 4,160,612 4,158,472 4,129,407 4,160,612 4,158,472 4,129,407 Smile Brands Group Inc. (0.9%)* (5) (7) (8) Health Care Services First Lien Senior Secured Term Loan (LIBOR + 4.5%, 6.6% Cash, Acquired 10/18, Due 10/24) 5,390,141 5,339,191 5,293,980 5,390,141 5,339,191 5,293,980 Solenis International, LLC (f/k/a Solenis Holdings, L.P.) (1.4%)* (5) (6) (8) Specialty Chemicals First Lien Senior Secured Term Loan (LIBOR + 4.0%, 5.9% Cash, Acquired 08/18, Due 06/25) 7,880,000 7,922,706 7,781,500 7,880,000 7,922,706 7,781,500 SonicWALL, Inc. (0.8%)* (6) (8) Internet Software & Services First Lien Senior Secured Term Loan (LIBOR + 3.5%, 5.4% Cash, Acquired 08/18, Due 05/25) 4,455,000 4,457,031 4,336,185 4,455,000 4,457,031 4,336,185 Springbrook Software (SBRK Intermediate, Inc.) (1.8%)* (5) (7) (8) Enterprise Software and Services First Lien Senior Secured Term Loan (LIBOR + 5.75%, 7.7% Cash, Acquired 12/19, Due 12/26) 10,520,990 10,269,533 10,294,130 10,520,990 10,269,533 10,294,130 SRS Distribution, Inc. (0.9%)* (6) (8) Building Products First Lien Senior Secured Term Loan (LIBOR + 3.25%, 5.0% Cash, Acquired 09/18, Due 05/25) 4,974,811 4,899,772 4,930,038 4,974,811 4,899,772 4,930,038 SS&C Technologies, Inc. (0.3%)* (3) (6) (8) Computer & Electronics Retail First Lien Senior Secured Term Loan (LIBOR + 2.25%, 4.0% Cash, Acquired 10/18, Due 04/25) 1,742,327 1,738,643 1,753,042 1,742,327 1,738,643 1,753,042 Syniverse Holdings, Inc. (1.7%)* (4) (6) (8) Technology Distributors First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.8% Cash, Acquired 08/18, Due 03/23) 10,342,105 10,306,230 9,612,573 10,342,105 10,306,230 9,612,573 Tahoe Subco 1 Ltd. (2.6%)* (3) (4) (6) (8) Internet Software & Services First Lien Senior Secured Term Loan (LIBOR + 3.5%, 5.7% Cash, Acquired 09/18, Due 06/24) 14,800,754 14,806,789 14,677,463 14,800,754 14,806,789 14,677,463 Team Health Holdings, Inc. (1.0%)* (4) (6) (8) Health Care Services First Lien Senior Secured Term Loan (LIBOR + 2.75%, 4.5% Cash, Acquired 09/18, Due 02/24) 6,893,671 6,679,490 5,560,159 6,893,671 6,679,490 5,560,159 Tempo Acquisition LLC (1.0%)* (6) (8) Investment Banking & Brokerage First Lien Senior Secured Term Loan (LIBOR + 2.75%, 4.5% Cash, Acquired 09/18, Due 05/24) 5,589,753 5,606,977 5,618,876 5,589,753 5,606,977 5,618,876 The Hilb Group, LLC (1.8%)* (5) (7) (8) Insurance Brokerage First Lien Senior Secured Term Loan (LIBOR + 5.75%, 7.4% Cash, Acquired 12/19, Due 12/26) 10,357,834 10,029,427 10,049,762 10,357,834 10,029,427 10,049,762 Total Safety U.S. Inc. (0.8%)* (5) (8) Diversified Support Services First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.9% Cash, Acquired 11/19, Due 08/25) 4,937,500 4,668,972 4,650,533 4,937,500 4,668,972 4,650,533 Transportation Insight, LLC (3.9%)* (5) (7) (8) Air Freight & Logistics First Lien Senior Secured Term Loan (LIBOR + 4.5%, 6.3% Cash, Acquired 08/18, Due 12/24) 22,286,485 22,088,329 22,245,067 22,286,485 22,088,329 22,245,067 Truck-Lite Co., LLC (3.7%)* (5) (7) (8) Automotive Parts and Equipment First Lien Senior Secured Term Loan (LIBOR + 6.25%, 8.1% Cash, Acquired 12/19, Due 12/24) 21,794,872 21,298,442 21,337,947 21,794,872 21,298,442 21,337,947 Trystar, LLC (2.9%)* (5) (7) (8) Power Distribution Solutions First Lien Senior Secured Term Loan (LIBOR + 4.75%, 6.7% Cash, Acquired 09/18, Due 09/23) 15,999,318 15,782,579 15,963,771 LLC Units (361.5 units, Acquired 09/18) 361,505 597,581 15,999,318 16,144,084 16,561,352 23 Barings BDC, Inc. Consolidated Schedule of Investments — (Continued) December 31, 2019 Portfolio Company Industry Type of Investment (1) (2) Principal Amount Cost Fair Value U.S. Anesthesia Partners, Inc. (2.4%)* (4) (6) (8) Managed Health Care First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.8% Cash, Acquired 09/18, Due 06/24) $ 13,585,533 $ 13,637,823 $ 13,534,587 13,585,533 13,637,823 13,534,587 U.S. Silica Company (0.2%)* (3) (4) (5) (8) Metal & Glass Containers First Lien Senior Secured Term Loan (LIBOR + 4.0%, 5.8% Cash, Acquired 08/18, Due 05/25) 1,502,945 1,506,348 1,324,200 1,502,945 1,506,348 1,324,200 USF Holdings LLC (0.5%)* (6) (7) (8) Auto Parts & Equipment First Lien Senior Secured Term Loan (LIBOR + 3.5%, 5.3% Cash, Acquired 08/18, Due 12/21) 3,224,841 3,233,041 2,902,357 3,224,841 3,233,041 2,902,357 USIC Holdings, Inc. (1.2%)* (5) (6) (8) Packaged Foods & Meats First Lien Senior Secured Term Loan (LIBOR + 3.25%, 5.0% Cash, Acquired 08/18, Due 12/23) 6,896,886 6,925,717 6,866,746 6,896,886 6,925,717 6,866,746 USI Holdings Corp. (0.9%)* (6) (8) Property & Casualty Insurance First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.9% Cash, Acquired 08/18, Due 05/24) 4,961,929 4,956,994 4,956,967 4,961,929 4,956,994 4,956,967 USLS Acquisition, Inc. (f/k/a US Legal Support, Inc.) (2.8%)* (5) (7) (8) Legal Services First Lien Senior Secured Term Loan (LIBOR + 5.75%, 7.7% Cash, Acquired 11/18, Due 11/24) 16,513,432 16,260,417 16,107,839 16,513,432 16,260,417 16,107,839 Validity, Inc. (0.7%)* (5) (7) (8) IT Consulting & Other Services First Lien Senior Secured Term Loan (LIBOR + 4.75%, 6.7% Cash, Acquired 07/19, Due 05/25) 4,178,543 3,989,821 3,977,081 4,178,543 3,989,821 3,977,081 Venator Materials LLC (0.3%)* (3) (6) (8) Commodity Chemicals First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.8% Cash, Acquired 09/18, Due 08/24) 1,562,199 1,566,972 1,547,873 1,562,199 1,566,972 1,547,873 Veritas Bermuda Intermediate Holdings Ltd. (0.8%)* (6) (8) Technology Distributors First Lien Senior Secured Term Loan (LIBOR + 4.5%, 6.3% Cash, Acquired 09/18, Due 01/23) 4,961,735 4,784,696 4,767,235 4,961,735 4,784,696 4,767,235 VF Holding Corp. (2.1%)* (4) (5) (6) (8) Systems Software First Lien Senior Secured Term Loan (LIBOR + 3.25%, 5.0% Cash, Acquired 08/18, Due 07/25) 11,880,000 11,885,248 11,728,768 11,880,000 11,885,248 11,728,768 Wilsonart, LLC (0.9%)* (6) (8) Building Products First Lien Senior Secured Term Loan (LIBOR + 3.25%, 5.2% Cash, Acquired 11/18, Due 12/23) 4,961,832 4,961,832 4,970,118 4,961,832 4,961,832 4,970,118 Winebow Group, LLC, (The) (1.7%)* (4) (5) (8) Consumer Goods First Lien Senior Secured Term Loan (LIBOR + 3.75%, 5.5% Cash, Acquired 11/19, Due 07/21) 7,088,420 6,425,336 6,361,857 Second Lien Senior Secured Term Loan (LIBOR + 7.5%, 9.3% Cash, Acquired 10/19, Due 01/22) 4,911,766 3,314,045 3,209,004 12,000,186 9,739,381 9,570,861 Wink Holdco, Inc. (0.7%)* (6) (8) Managed Health Care First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.8% Cash, Acquired 08/18, Due 12/24) 3,969,620 3,967,724 3,972,121 3,969,620 3,967,724 3,972,121 Xperi Corp. (0.4%)* (3) (6) (8) Semiconductor Equipment First Lien Senior Secured Term Loan (LIBOR + 2.5%, 4.3% Cash, Acquired 08/18, Due 12/23) 2,049,364 2,042,322 2,048,729 2,049,364 2,042,322 2,048,729 Subtotal Non–Control / Non–Affiliate Investments 1,099,631,654 1,085,886,720 1,066,845,054 Affiliate Investment: (9) Jocassee Partners LLC (1.8%)* (3) (5) (8) Investment Funds & Vehicles 9.1% Member Interest, Acquired 06/19 10,158,270 10,229,813 10,158,270 10,229,813 Subtotal Affiliate Investment 10,158,270 10,229,813 24 Barings BDC, Inc. Consolidated Schedule of Investments — (Continued) December 31, 2019 Portfolio Company Industry Type of Investment (1) (2) Principal Amount Cost Fair Value Short-Term Investments: BNY Mellon Investment Advisor, Inc. (12.6%)* (4) (5) Money Market Fund Dreyfus Government Cash Management Fund (1.5% yield) $ 71,963,994 $ 71,963,994 71,963,994 71,963,994 Federated Investment Management Company (4.3%)* (6) Money Market Fund Federated Government Obligation Fund (1.5% yield) 24,604,946 24,604,946 24,604,946 24,604,946 Subtotal Short-Term Investments 96,568,940 96,568,940 Total Investments, December 31, 2019 (205.6%)* $ 1,099,631,654 $ 1,192,613,930 $ 1,173,643,807 Foreign Currency Forward Contracts: Description Notional Amount to be Purchased Notional Amount to be Sold Settlement Date Unrealized Appreciation (Depreciation) Foreign currency forward contract (EUR) $158,244 €142,781 01/02/20 $ (2,028) Foreign currency forward contract (EUR) €142,781 $158,547 01/02/20 1,724 Foreign currency forward contract (EUR) $506,967 €453,920 04/02/20 (5,440) Foreign currency forward contract (GBP) $707,963 £549,253 01/02/20 (19,660) Foreign currency forward contract (GBP) £549,253 $718,861 01/02/20 8,763 Foreign currency forward contract (GBP) $227,890 £175,529 04/02/20 (5,215) Foreign currency forward contract (SEK) $95,654 920,569kr 01/02/20 (2,687) Foreign currency forward contract (SEK) 920,569kr $96,846 01/02/20 1,495 Foreign currency forward contract (SEK) $97,360 912,212kr 04/02/20 (511) Total Foreign Currency Forward Contracts, December 31, 2019 $ (23,559) * Fair value as a percentage of net assets. (1) All debt investments are income producing, unless otherwise noted. Equity and any equity-linked investments are non-income producing, unless otherwise noted. The Board determined in good faith that all investments were valued at fair value in accordance with the Company's valuation policies and procedures and the 1940 Act based on, among other things, the input of Barings, the Company’s Audit Committee and an independent valuation firm that has been engaged to assist in the valuation of the Company's middle-market investments. In addition, all debt investments are variable rate investments unless otherwise noted. Index-based floating interest rates are generally subject to a contractual minimum interest rate. A majority of the variable rate loans in the Company's investment portfolio bear interest at a rate that may be determined by reference to either LIBOR or an alternate Base Rate (commonly based on the Federal Funds Rate or the Prime Rate), which typically reset semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. (2) All of the Company’s portfolio company investments (including joint venture and short-term investments), which as of December 31, 2019 represented 206% of the Company’s net assets, are subject to legal restrictions on sales. The acquisition date represents the date of the Company's initial investment in the relevant portfolio company. (3) Investment is not a qualifying investment as defined under Section 55(a) of the 1940 Act. Non-qualifying assets represent 14.8% of total investments at fair value as of December 31, 2019. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets. If at any time qualifying assets do not represent at least 70% of the Company's total assets, the Company will be precluded from acquiring any additional non-qualifying asset until such time as it complies with the requirements of Section 55(a). (4) Some or all of the investment is or will be encumbered as security for Barings BDC Senior Funding I, LLC's credit facility entered into in August 2018 with Bank of America, N.A., as subsequently amended in December 2018 and February 2020 (the "August 2018 Credit Facility"). (5) Some or all of the investment is or will be encumbered as security for the February 2019 Credit Facility. (6) Some or all of the investment is encumbered as security for the Company's Debt Securitization. (7) The fair value of the investment was determined using significant unobservable inputs. (8) Debt investment includes interest rate floor feature. 25 Barings BDC, Inc. Consolidated Schedule of Investments — (Continued) December 31, 2019 (9) As defined in the 1940 Act, the Company is deemed to be an “affiliated person” of the portfolio company as the Company owns 5% or more of the portfolio company's voting securities (“non-controlled affiliate”). Transactions related to investments in non-controlled affiliates for the year ended December 31, 2019 were as follows: Amount of Realized Gain (Loss) Amount of Unrealized Gain (Loss) Amount of Interest or Dividends Credited to Income(b) December 31, 2018 Value Gross Additions (c) Gross Reductions (d) December 31, 2019 Value Portfolio Company Type of Investment(a) Jocassee Partners LLC 9.1% Member Interest $ — $ 71,543 $ — $ — $ 10,229,813 $ — $ 10,229,813 Total Affiliate Investments $ — $ 71,543 $ — $ — $ 10,229,813 $ — $ 10,229,813 (a) Equity and equity-linked investments are non-income producing, unless otherwise noted. (b) Represents the total amount of interest, fees or dividends credited to income for the portion of the year an investment was included in the Affiliate category. (c) Gross additions include increases in the cost basis of investments resulting from new investments and follow-on investments. Gross additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation. (d) Gross reductions include decreases in the total cost basis of investments resulting from principal repayments or sales. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation. See accompanying notes. 26 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements 1. ORGANIZATION, BUSINESS AND BASIS OF PRESENTATION Barings BDC, Inc. (the "Company") and its wholly-owned subsidiaries are specialty finance companies. The Company currently operates as a closed-end, non-diversified investment company and has elected to be treated as a business development company ("BDC") under the Investment Company Act of 1940, as amended (the "1940 Act"). The Company has elected for federal income tax purposes to be treated as a regulated investment company ("RIC") under the Internal Revenue Code of 1986, as amended (the "Code"). Organization The Company is a Maryland corporation incorporated on October 10, 2006. On August 2, 2018, the Company entered into an investment advisory agreement (the "Advisory Agreement") and an administration agreement (the "Administration Agreement") and became an externally-managed BDC managed by the Barings LLC ("Barings" or the "Adviser"). An externally-managed BDC generally does not have any employees, and its investment and management functions are provided by an outside investment adviser and administrator under an advisory agreement and administration agreement. Instead of the Company directly compensating employees, the Company pays the Adviser for investment and management services pursuant to the terms of the Advisory Agreement and the Administration Agreement. See Note 2 - Agreements and Related Party Transactions for additional information regarding the Advisory Agreement and the Administration Agreement. Basis of Presentation The financial statements of the Company include the accounts of Barings BDC, Inc. and its wholly-owned subsidiaries. The effects of all intercompany transactions between the Company and its wholly-owned subsidiaries have been eliminated in consolidation. The Company is an investment company and, therefore, applies the specialized accounting and reporting guidance in Accounting Standards Codification ("ASC") Topic 946, Financial Services – Investment Companies. ASC 946 states that consolidation by the Company of an investee that is not an investment company is not appropriate, except when the Company holds a controlling interest in an operating company that provides all or substantially all of its services directly to the Company or to its portfolio companies. None of the portfolio investments made by the Company qualify for this exception. Therefore, the Company's investment portfolio is carried on the Unaudited and Audited Consolidated Balance Sheets at fair value, as discussed further in Note 3, with any adjustments to fair value recognized as "Net unrealized appreciation (depreciation)" on the Unaudited Consolidated Statements of Operations. The accompanying unaudited consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6, 10 and 12 of Regulation S-X. Accordingly, certain disclosures accompanying annual consolidated financial statements prepared in accordance with U.S. GAAP are omitted. In the opinion of management, all adjustments, consisting solely of normal recurring adjustments necessary for the fair presentation of financial statements for the interim period, have been reflected in the unaudited consolidated financial statements. The current period’s results of operations are not necessarily indicative of results that ultimately may be achieved for the year. Additionally, the unaudited consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2019. Financial statements prepared on a U.S. GAAP basis require management to make estimates and assumptions that affect the amounts and disclosures reported in the unaudited consolidated financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein. Recently Issued Accounting Standards In August 2018, the FASB issued Accounting Standards Update, 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement ("ASU 2018-13"), which includes new, eliminated and modified fair value disclosure requirements. The new guidance requires disclosure of the range and weighted average of the significant unobservable inputs for Level 3 fair value measurements and the way it is calculated. The guidance also eliminates the following disclosures: (i) amount and reason for transfers between Level 1 and Level 2, (ii) policy for timing of transfers between levels of the fair value hierarchy and (iii) valuation processes for Level 3 fair value measurement. In addition, the disclosure is modified such that the narrative description for the recurring Level 3 fair value measures should communicate information about the measurement uncertainty in fair value measurements as of the reporting date rather than a point in the future. The guidance is effective for all entities for interim and annual periods beginning after December 15, 2019. The Company adopted the aforementioned guidance on January 1, 2020 and it did not have a material impact on the Company’s consolidated financial statements. In March 2020, the FASB issued Accounting Standards Update, 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04") . The amendments in ASU 2020-04 provide optional expedients and 27 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. ASU 2020- 04 is effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact of adopting ASU 2020- 04 on its consolidated financial statements. Share Purchase Programs On September 24, 2018, the Adviser entered into a Rule 10b5-1 Purchase Plan (the “10b5-1 Plan”) that qualified for the safe harbors provided by Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Pursuant to the 10b5-1 Plan, an independent broker made purchases of shares of the Company's common stock on the open market on behalf of the Adviser in accordance with purchase guidelines specified in the 10b5-1 Plan. The maximum aggregate purchase price of all shares purchased under the 10b5-1 Plan was $50.0 million. On February 11, 2019, the Adviser fulfilled its obligations under the 10b5-1 Plan to purchase an aggregate amount of $50.0 million in shares of the Company's common stock and the 10b5-1 Plan terminated in accordance with its terms. Upon completion of the 10b5-1 Plan, the Adviser had purchased 5,084,302 shares of the Company's common stock pursuant to the 10b5-1 Plan. As of September 30, 2020, the Adviser owned a total of 13,639,681 shares of our common stock, or 28.4% of the total shares outstanding. On February 25, 2019, the Company adopted a share repurchase plan, pursuant to Board approval, for the purpose of repurchasing shares of the Company's common stock in the open market during the 2019 fiscal year (the "2019 Share Repurchase Plan"). The Board authorized the Company to repurchase in 2019 up to a maximum of 5.0% of the amount of shares outstanding under the following targets: • a maximum of 2.5% of the amount of shares of the Company's common stock outstanding if shares traded below NAV per share but in excess of 90% of NAV per share; and • a maximum of 5.0% of the amount of shares of the Company's common stock outstanding if shares traded below 90% of NAV per share. The 2019 Share Repurchase Plan was executed in accordance with applicable rules under the Exchange Act including Rules 10b5-1 and 10b-18 thereunder, as well as certain price, market volume and timing constraints specified in the 2019 Share Repurchase Plan. The 2019 Share Repurchase Plan was designed to allow the Company to repurchase its shares both during its open window periods and at times when it otherwise might be prevented from doing so under applicable insider trading laws or because of self-imposed trading blackout periods. A broker selected by the Company was delegated the authority to repurchase shares on the Company's behalf in the open market, pursuant to, and under the terms and limitations of, the 2019 Share Repurchase Plan. During the three and nine months ended September 30, 2019, the Company repurchased a total of 895,733 shares and 1,865,522 shares, respectively, of its common stock in the open market under the Share Repurchase Plan at an average price of $9.93 per share and $9.94 per share, respectively, including broker commissions. On February 27, 2020, the Board approved an open-market share repurchase program for the 2020 fiscal year (the “2020 Share Repurchase Program”). Under the 2020 Share Repurchase Program, the Company is authorized during fiscal year 2020 to repurchase up to a maximum of 5.0% of the amount of shares outstanding as of February 27, 2020 if shares trade below NAV per share, subject to liquidity and regulatory constraints. Purchases under the 2020 Share Repurchase Program may be made in open-market transactions and include transactions being executed by a broker selected by the Company that has been delegated the authority to repurchase shares on the Company's behalf in the open market in accordance with applicable rules under the Exchange Act, including Rules 10b5-1 and 10b-18 thereunder, and pursuant to, and under the terms and limitations of, the 2020 Share Repurchase Program. There is no assurance that the Company will purchase shares at any specific discount levels or in any specific amounts. During the nine months ended September 30, 2020, the Company repurchased a total of 989,050 shares of its common stock in the open market under the 2020 Share Repurchase Program at an average price of $7.21 per share including broker commissions. 2. AGREEMENTS AND RELATED PARTY TRANSACTIONS On August 2, 2018, the Company entered into the Advisory Agreement and the Administration Agreement with the Adviser, an investment adviser registered under the Investment Advisers Act of 1940, as amended. Pursuant to the Advisory Agreement and the Administration Agreement, the Adviser serves as the Company’s investment adviser and administrator and manages its investment portfolio. The Company’s then-current board of directors unanimously approved the Advisory Agreement at an in-person meeting on March 22, 2018. The Company’s stockholders approved the Advisory Agreement at a July 24, 2018 special meeting of stockholders. 28 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) Advisory Agreement Pursuant to the Advisory Agreement, the Adviser manages the Company's day-to-day operations and provides the Company with investment advisory services. Among other things, the Adviser (i) determines the composition of the portfolio of the Company, the nature and timing of the changes therein and the manner of implementing such changes; (ii) identifies, evaluates and negotiates the structure of the investments made by the Company; (iii) executes, closes, services and monitors the investments that the Company makes; (iv) determines the securities and other assets that the Company will purchase, retain or sell; (v) performs due diligence on prospective portfolio companies and (vi) provides the Company with such other investment advisory, research and related services as the Company may, from time to time, reasonably require for the investment of its funds. The Advisory Agreement provides that, absent fraud, willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations, the Adviser, and its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with the Adviser (collectively, the "IA Indemnified Parties"), are entitled to indemnification from the Company for any damages, liabilities, costs, demands, charges, claims and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) incurred by the IA Indemnified Parties in or by reason of any pending, threatened or completed action, suit, investigation or other proceeding (including an action or suit by or in the right of the Company or its security holders) arising out of any actions or omissions or otherwise based upon the performance of any of the Adviser’s duties or obligations under the Advisory Agreement or otherwise as an investment adviser of the Company. The Adviser’s services under the Advisory Agreement are not exclusive, and the Adviser is generally free to furnish similar services to other entities so long as its performance under the Advisory Agreement is not adversely affected. The Adviser has entered into a personnel-sharing arrangement with its affiliate, Barings International Investment Limited ("BIIL"). BIIL is a wholly-owned subsidiary of Baring Asset Management Limited, which in turn is an indirect, wholly-owned subsidiary of the Adviser. Pursuant to this arrangement, certain employees of BIIL may serve as "associated persons" of the Adviser and, in this capacity, subject to the oversight and supervision of the Adviser, may provide research and related services, and discretionary investment management and trading services (including acting as portfolio managers) to the Company on behalf of the Adviser. This arrangement is based on no-action letters of the staff of the Securities and Exchange Commission (the "SEC") that permit SEC-registered investment advisers to rely on and use the resources of advisory affiliates or "participating affiliates," subject to the supervision of that SEC-registered investment adviser. BIIL is a "participating affiliate" of the Adviser, and the BIIL employees are "associated persons" of the Adviser. Under the Advisory Agreement, the Company pays the Adviser (i) a base management fee (the "Base Management Fee") and (ii) an incentive fee (the "Incentive Fee") as compensation for the investment advisory and management services it provides the Company thereunder. Base Management Fee The Base Management Fee is calculated based on the Company’s gross assets, including assets purchased with borrowed funds or other forms of leverage and excluding cash and cash equivalents, at an annual rate of 1.375%. The annual rate of the Base Management Fee was 1.0% for the period from August 2, 2018 through December 31, 2018, and was 1.125% for the period commencing on January 1, 2019 through December 31, 2019. The Base Management Fee is payable quarterly in arrears on a calendar quarter basis. The Base Management Fee is calculated based on the average value of the Company’s gross assets, excluding cash and cash equivalents, at the end of the two most recently completed calendar quarters prior to the quarter for which such fees are being calculated. Base Management Fees for any partial month or quarter are appropriately pro-rated. For the three and nine months ended September 30, 2020, the Base Management Fee determined in accordance with the terms of the Advisory Agreement was approximately $3.4 million and $10.9 million, respectively. For the three and nine months ended September 30, 2019, the Base Management Fee was approximately $3.3 million and $8.8 million, respectively. As of September 30, 2020, the Base Management Fee of $3.4 million for the three months ended September 30, 2020 was unpaid and included in "Base management fees payable" in the accompanying Unaudited Consolidated Balance Sheet. As of December 31, 2019, the Base Management Fee of $3.3 million for the three months ended December 31, 2019 was unpaid and included in "Base management fees payable" in the accompanying Consolidated Balance Sheet. 29 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) Incentive Fee The Incentive Fee is comprised of two parts: (1) a portion based on the Company’s pre-incentive fee net investment income (the "Income-Based Fee") and (2) a portion based on the net capital gains received on the Company’s portfolio of securities on a cumulative basis for each calendar year, net of all realized capital losses and all unrealized capital depreciation for that same calendar year (the "Capital Gains Fee"). The Income-Based Fee is calculated as follows: (i) For each quarter from and after August 2, 2018 through December 31, 2019 (the "Pre-2020 Period"), the Income-Based Fee was calculated and payable quarterly in arrears based on the Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter for which such fees were being calculated. In respect of the Pre-2020 Period, "Pre-Incentive Fee Net Investment Income" means interest income, dividend income and any other income (including any other fees, such as commitment, origination, structuring, diligence, managerial assistance and consulting fees or other fees that the Company receives from portfolio companies) accrued during the relevant calendar quarter, minus the Company’s operating expenses for such quarter (including the Base Management Fee, expenses payable under the Administration Agreement, any interest expense and any dividends paid on any issued and outstanding preferred stock, but excluding the Incentive Fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with payment-in-kind interest and zero coupon securities), accrued income not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. (ii) For each quarter beginning on and after January 1, 2020 (the "Post-2019 Period"), the Income-Based Fee is calculated and payable quarterly in arrears based on the Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter and the eleven preceding calendar quarters (or such fewer number of preceding calendar quarters counting each calendar quarter beginning on or after January 1, 2020) (each such period referred to as the "Trailing Twelve Quarters") for which such fees are being calculated and is payable promptly following the filing of the Company’s financial statements for such quarter. In respect of the Post-2019 Period, "Pre-Incentive Fee Net Investment Income" means interest income, dividend income and any other income (including any other fees, such as commitment, origination, structuring, diligence, managerial assistance and consulting fees or other fees that the Company receives from portfolio companies) accrued during the relevant Trailing Twelve Quarters, minus the Company’s operating expenses for such Trailing Twelve Quarters (including the Base Management Fee, expenses payable under the Administration Agreement, any interest expense and any dividends paid on any issued and outstanding preferred stock, but excluding the Incentive Fee) divided by the number of quarters that comprise the relevant Trailing Twelve Quarters. Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with payment-in-kind interest and zero coupon securities), accrued income not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. (iii) Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the value of the Company’s net assets (defined as total assets less senior securities constituting indebtedness and preferred stock) at the end of the calendar quarter for which such fees are being calculated, is compared to a "hurdle rate", expressed as a rate of return on the value of the Company’s net assets at the end of the most recently completed calendar quarter, of 2% per quarter (8% annualized). The Company pays the Adviser the Income-Based Fee with respect to the Company’s Pre-Incentive Fee Net Investment Income in each calendar quarter as follows: (1) (a) With respect to the Pre-2020 Period, no Income-Based Fee for any calendar quarter in which the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (i) above) did not exceed the hurdle rate; (b) With respect to the Post-2019 Period, no Income-Based Fee for any calendar quarter in which the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above) does not exceed the hurdle rate; (2) (a) With respect to the Pre-2020 Period, 100% of the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (i) above) for any calendar quarter with respect to that portion of the Pre-Incentive Fee Net Investment Income for such quarter, if any, that exceeded the hurdle rate but was less than 2.5% (10% annualized) (the "Pre-2020 Catch-Up Amount"). The Pre-2020 Catch-Up Amount was intended to provide the Adviser with an incentive fee of 20% on all of the Company’s Pre-Incentive Fee Net Investment Income (as 30 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) defined in paragraph (i) above) when the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (i) above) reached 2% per quarter (8% annualized); (b) With respect to the Post-2019 Period, 100% of the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above) with respect to that portion of the Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above), if any, that exceeds the hurdle rate but is less than 2.5% (10% annualized) (the "Post-2019 Catch-Up Amount"). The Post-2019 Catch-Up Amount is intended to provide the Adviser with an incentive fee of 20% on all of the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above) when the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above) reaches 2% per quarter (8% annualized); (3) (a) With respect to the Pre-2020 Period, 20% of the amount of the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (i) above) for any calendar quarter with respect to that portion of the Pre-Incentive Fee Net Investment Income (as defined in paragraph (i) above) for such quarter, if any, that exceeded the Pre-2020 Catch-Up Amount; and (b) With respect to the Post-2019 Period, 20% of the amount of the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above) for any calendar quarter with respect to that portion of the Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above), if any, that exceeds the Post-2019 Catch-Up Amount. However, with respect to the Post-2019 Period, the Income-Based Fee paid to the Adviser will not be in excess of the Incentive Fee Cap. With respect to the Post-2019 Period, the "Incentive Fee Cap" for any quarter is an amount equal to (a) 20% of the Cumulative Net Return (as defined below) during the relevant Trailing Twelve Quarters minus (b) the aggregate Income-Based Fee that was paid in respect of the first eleven calendar quarters (or the portion thereof) included in the relevant Trailing Twelve Quarters. The Incentive Fee Cap is not subject to recoupment. Cumulative Net Return means (x) the aggregate net investment income in respect of the relevant Trailing Twelve Quarters minus (y) any Net Capital Loss (as defined below), if any, in respect of the relevant Trailing Twelve Quarters. If, in any quarter, the Incentive Fee Cap is zero or a negative value, the Company pays no Income-Based Fee to the Adviser for such quarter. If, in any quarter, the Incentive Fee Cap for such quarter is a positive value but is less than the Income-Based Fee that is payable to the Adviser for such quarter (before giving effect to the Incentive Fee Cap) calculated as described above, the Company pays an Income-Based Fee to the Adviser equal to the Incentive Fee Cap for such quarter. If, in any quarter, the Incentive Fee Cap for such quarter is equal to or greater than the Income-Based Fee that is payable to the Adviser for such quarter (before giving effect to the Incentive Fee Cap) calculated as described above, the Company pays an Income-Based Fee to the Adviser equal to the Income-Based Fee calculated as described above for such quarter without regard to the Incentive Fee Cap. Net Capital Loss in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in such period and (ii) aggregate capital gains, whether realized or unrealized, in such period. The Capital Gains Fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Advisory Agreement), and is calculated at the end of each applicable year by subtracting (1) the sum of the Company’s cumulative aggregate realized capital losses and aggregate unrealized capital depreciation from (2) the Company’s cumulative aggregate realized capital gains, in each case calculated from August 2, 2018. If such amount is positive at the end of such year, then the Capital Gains Fee payable for such year is equal to 20% of such amount, less the cumulative aggregate amount of Capital Gains Fees paid in all prior years. If such amount is negative, then there is no Capital Gains Fee payable for such year. If the Advisory Agreement is terminated as of a date that is not a calendar year end, the termination date will be treated as though it were a calendar year end for purposes of calculating and paying a Capital Gains Fee. The Company did not pay any Incentive Fee for the three or nine months ended September 30, 2020 or 2019. Payment of Company Expenses Under the Advisory Agreement, all investment professionals of the Adviser and its staff, when and to the extent engaged in providing services required to be provided by the Adviser under the Advisory Agreement, and the compensation and routine overhead expenses of such personnel allocable to such services, are provided and paid for by the Adviser and not by the Company, except that all costs and expenses relating to the Company's operations and transactions, including, without limitation, those items listed in the Advisory Agreement, will be borne by the Company. 31 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) Administration Agreement Under the terms of the Administration Agreement, the Adviser performs (or oversees, or arranges for, the performance of) the administrative services necessary for the operation of the Company, including, but not limited to, office facilities, equipment, clerical, bookkeeping and record-keeping services at such office facilities and such other services as the Adviser, subject to review by the Board, from time to time, determines to be necessary or useful to perform its obligations under the Administration Agreement. The Adviser also, on behalf of the Company and subject oversight by the Board, arranges for the services of, and oversees, custodians, depositories, transfer agents, dividend disbursing agents, other stockholder servicing agents, accountants, attorneys, valuation experts, underwriters, brokers and dealers, corporate fiduciaries, insurers, banks and such other persons in any such other capacity deemed to be necessary or desirable. The Company is required to reimburse the Adviser for the costs and expenses incurred by the Adviser in performing its obligations and providing personnel and facilities under the Administration Agreement, or such lesser amount as may be agreed to in writing by the Company and the Adviser from time to time. If the Company and the Adviser agree to a reimbursement amount for any period which is less than the full amount otherwise permitted under the Administration Agreement, then the Adviser will not be entitled to recoup any difference thereof in any subsequent period or otherwise. The costs and expenses incurred by the Adviser on behalf of the Company under the Administration Agreement include, but are not limited to: • the allocable portion of the Adviser’s rent for the Company’s Chief Financial Officer and the Chief Compliance Officer and their respective staffs, which is based upon the allocable portion of the usage thereof by such personnel in connection with their performance of administrative services under the Administration Agreement; • the allocable portion of the salaries, bonuses, benefits and expenses of the Company’s Chief Financial Officer and Chief Compliance Officer and their respective staffs, which is based upon the allocable portion of the time spent by such personnel in connection with performing administrative services for the Company under the Administration Agreement; • the actual cost of goods and services used for the Company and obtained by the Adviser from entities not affiliated with the Company, which is reasonably allocated to the Company on the basis of assets, revenues, time records or other method conforming with generally accepted accounting principles; • all fees, costs and expenses associated with the engagement of a sub-administrator, if any; and • costs associated with (a) the monitoring and preparation of regulatory reporting, including registration statements and amendments thereto, prospectus supplements, and tax reporting, (b) the coordination and oversight of service provider activities and the direct cost of such contractual matters related thereto and (c) the preparation of all financial statements and the coordination and oversight of audits, regulatory inquiries, certifications and sub-certifications. For the three and nine months ended September 30, 2020, the Company incurred and was invoiced by the Adviser for expenses of approximately $0.3 million and $0.9 million, respectively, under the terms of the Administration Agreement, which amount is included in "General and administrative expenses" in the accompanying Unaudited Consolidated Statements of Operations. For the three and nine months ended September 30, 2019, the Company incurred and was invoiced by the Adviser for expenses of approximately $0.5 million and $1.9 million, respectively, under the terms of the Administration Agreement, which amount is included in "General and administrative expenses" in the accompanying Unaudited Consolidated Statements of Operations. As of September 30, 2020, the administrative expenses for the three months ended September 30, 2020 were unpaid and included in "Administrative fees payable" in the accompanying Unaudited Consolidated Balance Sheet. As of December 31, 2019, the administrative expenses of $0.4 million incurred for the three months ended December 31, 2019 were unpaid and included in "Administrative fees payable" in the accompanying Consolidated Balance Sheet. 3. INVESTMENTS Portfolio Composition The Company invests in senior secured private debt investments in well-established middle-market businesses that operate across a wide range of industries, as well as syndicated senior secured loans, structured products, bonds and other fixed income securities. Structured products include collateralized loan obligations and asset-backed securities. The Adviser's existing SEC co-investment exemptive relief under the 1940 Act, permits the Company and the Adviser's affiliated private funds and SEC-registered funds to co-invest in loans originated by the Adviser, which allows the Adviser to efficiently implement its senior secured private debt investment strategy for the Company. 32 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) The cost basis of the Company's debt investments includes any unamortized purchased premium or discount, unamortized loan origination fees and PIK interest, if any. Summaries of the composition of the Company’s investment portfolio at cost and fair value, and as a percentage of total investments, are shown in the following tables: Cost Percentage of Total Portfolio Fair Value Percentage of Total Portfolio Percentage of Total Net Assets September 30, 2020: Senior debt and 1 st lien notes $ 850,882,033 75 % $ 833,101,689 75 % 158 % Subordinated debt and 2 nd lien notes 19,700,711 2 19,369,286 2 4 Structured products 31,517,698 3 33,164,151 3 6 Equity shares 1,028,125 — 975,050 — — Investments in joint ventures 18,258,270 2 19,158,075 2 4 Short-term investments 210,503,875 18 210,503,390 18 40 $ 1,131,890,712 100 % $ 1,116,271,641 100 % 212 % December 31, 2019: Senior debt and 1 st lien notes $ 1,070,031,715 90 % $ 1,050,863,369 90 % 184 % Subordinated debt and 2 nd lien notes 15,339,180 1 15,220,969 1 3 Equity shares 515,825 — 760,716 — — Investment in joint venture 10,158,270 1 10,229,813 1 2 Short-term investments 96,568,940 8 96,568,940 8 17 $ 1,192,613,930 100 % $ 1,173,643,807 100 % 206 % During the three months ended September 30, 2020, the Company made 15 new investments totaling $127.3 million, nine investments in existing portfolio companies totaling $16.3 million and an additional investment in one joint venture equity portfolio company totaling $1.6 million. During the nine months ended September 30, 2020, the Company made 47 new investments totaling $263.9 million, investments in 18 existing portfolio companies totaling $39.8 million, one new joint venture equity investment totaling $3.1 million and an additional investment in one joint venture equity portfolio company totaling $5.0 million. During the three months ended September 30, 2019, the Company made 12 new investments totaling $106.4 million, six investments in existing portfolio companies totaling $13.9 million and one new joint venture equity investment totaling $10.2 million. During the nine months ended September 30, 2019, the Company made 26 new investments totaling $245.9 million, six investments in existing portfolio companies totaling $12.2 million and one new joint venture equity investment totaling $10.2 million. 33 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) The industry composition of investments at fair value at September 30, 2020 and December 31, 2019, excluding short-term investments, was as follows: September 30, 2020 December 31, 2019 Aerospace and Defense $ 58,442,645 6.4 % $ 71,899,486 6.7 % Automotive 50,350,943 5.5 % 29,879,546 2.8 % Banking, Finance, Insurance and Real Estate 47,351,823 5.2 % 83,826,677 7.8 % Beverage, Food and Tobacco 13,895,909 1.5 % 11,837,328 1.1 % Capital Equipment 42,783,842 4.7 % 62,694,548 5.8 % Chemicals, Plastics, and Rubber 23,081,495 2.5 % 31,989,552 3.0 % Construction and Building 8,833,568 1.0 % 23,222,638 2.2 % Consumer Goods: Durable 12,232,864 1.4 % 30,207,496 2.8 % Consumer Goods: Non-durable — — % 13,958,377 1.3 % Containers, Packaging and Glass 6,748,576 0.8 % 32,465,070 3.0 % Electrical Components & Equipment 2,237,500 0.3 % — — % Energy: Electricity 15,710,919 1.7 % 16,561,352 1.5 % Energy: Oil and Gas 738,309 0.1 % 14,031,270 1.3 % Healthcare and Pharmaceuticals 82,142,249 9.1 % 106,336,903 9.9 % High Tech Industries 104,643,133 11.6 % 124,598,066 11.6 % Hotel, Gaming and Leisure 7,470,090 0.8 % 5,978,910 0.6 % Investment Funds and Vehicles 19,158,075 2.1 % 10,229,813 0.9 % Media: Advertising, Printing and Publishing 21,049,051 2.3 % 30,919,615 2.9 % Media: Broadcasting and Subscription 11,423,663 1.3 % — — % Media: Diversified and Production 34,609,190 3.8 % 31,962,571 3.0 % Metals and Mining 17,320,696 1.9 % 12,284,823 1.1 % Retail 10,672,464 1.2 % 28,438,030 2.6 % Services: Business 127,022,048 14.0 % 127,261,336 11.8 % Services: Consumer 26,897,347 3.0 % 35,667,981 3.3 % Structured Products 33,164,151 3.6 % — — % Telecommunications 48,505,008 5.4 % 33,725,812 3.1 % Transportation: Cargo 60,253,010 6.7 % 83,353,452 7.7 % Transportation: Consumer — — % 5,845,206 0.5 % Utilities: Electric 7,151,434 0.8 % 6,028,435 0.6 % Utilities: Oil and Gas 11,878,249 1.3 % 11,870,574 1.1 % Total $ 905,768,251 100.0 % $ 1,077,074,867 100.0 % Jocassee Partners LLC On May 8, 2019, the Company entered into an agreement with South Carolina Retirement Systems Group Trust ("SCRS") to create and co-manage Jocassee Partners LLC ("Jocassee"), a joint venture, which invests in a highly diversified asset mix including senior secured, middle-market, private debt investments, syndicated senior secured loans and structured products. The Company and SCRS committed to initially provide $50.0 million and $500.0 million, respectively, of equity capital to Jocassee. Equity contributions will be called from each member on a pro-rata basis, based on their equity commitments. As of September 30, 2020, Jocassee had $118.6 million in senior secured private middle-market debt investments, $370.0 million in U.S. syndicated senior secured loans, $152.1 million in European syndicated senior secured loans, $23.8 million in structured product investments, $6.2 million in an equity investment, $28.8 million in a joint venture investment and $24.4 million in short-term investments. As of December 31, 2019, Jocassee had $41.3 million in senior secured private middle-market debt investments, $140.8 million in U.S. syndicated senior secured loans, $57.3 million in European syndicated senior secured loans, $8.2 million in an equity investment and $36.7 million in a short-term investment. 34 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) The Company may sell portions of its investments via assignment to Jocassee. Since inception, as of September 30, 2020 and December 31, 2019, the Company had sold $107.1 million and $36.1 million, respectively, of its investments to Jocassee. The sale of the investments met the criteria set forth in ASC 860, Transfers and Servicing for treatment as a sale and satisfies the following conditions: • Assigned investments have been isolated from the Company, and put presumptively beyond the reach of the Company and its creditors, even in bankruptcy or other receivership; • each participant has the right to pledge or exchange the assigned investments it received, and no condition both constrains the participant from taking advantage of its right to pledge or exchange and provides more than a trivial benefit to the Company; and • the Company, its consolidated affiliates or its agents do not maintain effective control over the assigned investments through either: (i) an agreement that entitles and/or obligates the Company to repurchase or redeem the assets before maturity, or (ii) the ability to unilaterally cause the holder to return specific assets, other than through a cleanup call. The Company has determined that Jocassee is an investment company under ASC, Topic 946, Financial Services - Investment Companies , however, in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a substantially wholly owned investment company subsidiary, which is an extension of the operations of the Company, or a controlled operating company whose business consists of providing services to the Company. The Company does not consolidate its interest in Jocassee as it is not a substantially wholly owned investment company subsidiary. In addition, the Company does not control Jocassee due to the allocation of voting rights among Jocassee members. As of September 30, 2020 and December 31, 2019, Jocassee had the following commitments, contributions and unfunded commitments from its members: As of September 30, 2020 Member Total Commitments Contributed Capital Return of Capital (not recallable) Unfunded Commitments Barings BDC, Inc. $ 50,000,000 $ 15,000,000 $ — $ 35,000,000 South Carolina Retirement Systems Group Trust 500,000,000 150,000,000 — 350,000,000 Total $ 550,000,000 $ 165,000,000 $ — $ 385,000,000 As of December 31, 2019 Member Total Commitments Contributed Capital Return of Capital (not recallable) Unfunded Commitments Barings BDC, Inc. $ 50,000,000 $ 10,000,000 $ — $ 40,000,000 South Carolina Retirement Systems Group Trust 500,000,000 100,000,000 — 400,000,000 Total $ 550,000,000 $ 110,000,000 $ — $ 440,000,000 Thompson Rivers, LLC On April 28, 2020, Thompson Rivers LLC (“Thompson Rivers”) was formed as a Delaware limited liability company. On May 13, 2020, the Company entered into a limited liability company agreement (“LLC Agreement”) with Jocassee. The Company and Jocassee have committed to initially provide $10.0 million and $90.0 million, respectively, of equity capital to Thompson Rivers. Equity contributions (and equity ownership) are on a pro-rata basis, based on their equity commitments (10% for the Company and 90% for Jocassee). As of September 30, 2020, Thompson Rivers had $79.5 million in commercial mortgage-backed securities and $7.7 million in cash. 35 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) The Company has determined that Thompson Rivers is an investment company under ASC, Topic 946, Financial Services - Investment Companies , however, in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a substantially wholly owned investment company subsidiary, which is an extension of the operations of the Company, or a controlled operating company whose business consists of providing services to the Company. The Company does not consolidate its interest in Thompson Rivers as it is not a substantially wholly owned investment company subsidiary. In addition, the Company does not control Thompson Rivers due to the allocation of voting rights among Thompson Rivers members. As of September 30, 2020, Thompson Rivers had the following commitments, contributions and unfunded commitments from its members: As of September 30, 2020 Member Total Commitments Contributed Capital Return of Capital (not recallable) Unfunded Commitments Barings BDC, Inc. $ 10,000,000 $ 3,100,000 $ — $ 6,900,000 Jocassee Partners LLC 90,000,000 27,900,000 — 62,100,000 Total $ 100,000,000 $ 31,000,000 $ — $ 69,000,000 Investment Valuation The Company has a valuation policy, as well as established and documented processes and methodologies for determining the fair values of portfolio company investments on a recurring (at least quarterly) basis in accordance with the 1940 Act and FASB ASC Topic 820, Fair Value Measurements and Disclosures ("ASC Topic 820"). The Company's current valuation policy and processes were established by the Adviser and have been approved by the Board. Under ASC Topic 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between a willing buyer and a willing seller at the measurement date. For the Company’s portfolio securities, fair value is generally the amount that the Company might reasonably expect to receive upon the current sale of the security. Under ASC Topic 820, the fair value measurement assumes that the sale occurs in the principal market for the security, or in the absence of a principal market, in the most advantageous market for the security. Under ASC Topic 820, if no market for the security exists or if the Company does not have access to the principal market, the security should be valued based on the sale occurring in a hypothetical market. Under ASC Topic 820, there are three levels of valuation inputs, as follows: Level 1 Inputs – include quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 Inputs – include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 Inputs – include inputs that are unobservable and significant to the fair value measurement. A financial instrument is categorized within the ASC Topic 820 valuation hierarchy based upon the lowest level of input to the valuation process that is significant to the fair value measurement. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore, unrealized appreciation and depreciation related to such investments categorized as Level 3 investments within the tables below may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3). The Company’s investment portfolio includes certain debt and equity instruments of privately held companies for which quoted prices or other inputs falling within the categories of Level 1 and Level 2 are generally not available. In such cases, the Company determines the fair value of its investments in good faith primarily using Level 3 inputs. In certain cases, quoted prices or other observable inputs exist, and the Company assesses the appropriateness of the use of these third-party quotes in determining fair value based on (i) its understanding of the level of actual transactions used by the broker to develop the quote and whether the quote was an indicative price or binding offer and (ii) the depth and consistency of broker quotes and the correlation of changes in broker quotes with the underlying performance of the portfolio company. There is no single technique for determining fair value in good faith, as fair value depends upon the specific circumstances of each individual investment. The recorded fair values of the Company’s Level 3 investments may differ significantly from fair values that would have been used had an active market for the securities existed. In addition, changes in 36 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the valuations currently assigned. Investment Valuation Process The Adviser has established a Pricing Committee that is, subject to the oversight of the Board, responsible for the approval, implementation and oversight of the processes and methodologies that relate to the pricing and valuation of assets held by the Company. The Adviser uses internal pricing models, in accordance with internal pricing procedures established by the Adviser's Pricing Committee, to price an asset in the event an acceptable price cannot be obtained from an approved external source. The Adviser reviews its valuation methodologies on an ongoing basis and updates are made accordingly to meet changes in the marketplace. The Adviser has established internal controls to ensure its valuation process is operating in an effective manner. The Adviser (1) maintains valuation and pricing procedures that describe the specific methodology used for valuation and (2) approves and documents exceptions and overrides of valuations. In addition, the Pricing Committee performs an annual review of valuation methodologies. The Company's money market fund investments are generally valued using Level 1 inputs and its syndicated senior secured loans and structured product investments are generally valued using Level 2 inputs. The Company's senior secured, middle-market, private debt investments are generally valued using Level 3 inputs. Independent Valuation Review The Company has engaged an independent valuation firm to provide third-party valuation consulting services at the end of each fiscal quarter which consist of certain limited procedures that the Company identified and requested the valuation firm to perform (hereinafter referred to as the "Procedures"). The Procedures generally consist of a review of the quarterly fair values of the Company's middle-market investments, and are generally performed with respect to each middle-market investment at least once in every calendar year and for new investments, at least once in the twelve-month period subsequent to the initial investment. In addition, the Procedures will generally be performed with respect to an investment where there has been a significant change in the fair value or performance of the investment. Prior to the first quarter of 2020, the Procedures were generally performed with respect to each investment every quarter beginning in the quarter after the investment was made. In certain instances, the Company may determine that it is not cost-effective, and as a result is not in the stockholders' best interests, to request the independent valuation firm to perform the Procedures on certain investments. Such instances include, but are not limited to, situations where the fair value of the investment in the portfolio company is determined to be insignificant relative to the total investment portfolio. The total number of middle-market investments and the percentage of the Company's total middle-market investment portfolio on which the Procedures were performed are summarized below by period: For the quarter ended: Total companies Percent of total investments at fair value(1) March 31, 2019 18 100% June 30, 2019 22 100% September 30, 2019 28 100% December 31, 2019 38 100% March 31, 2020 30 62% June 30, 2020 33 53% September 30, 2020 66 100% (1) Exclusive of the fair value of new middle-market investments made during the quarter for which the Procedures were not performed and certain middle-market investments repaid subsequent to the end of the reporting period. For September 30, 2020, the Procedures were performed on two of the seven investments made during the quarter. Upon completion of the Procedures, the valuation firm concluded that, with respect to each investment reviewed by the valuation firm, the fair value of those investments subjected to the Procedures appeared reasonable. Finally, the Board determined in good faith that the Company's investments were valued at fair value in accordance with the Company's valuation policies and procedures and the 1940 Act based on, among other things, the input of Barings, the Company’s Audit Committee and the independent valuation firm. 37 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) Valuation Techniques The Company's valuation techniques are based upon both observable and unobservable pricing inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument. The Company determines the estimated fair value of its loans and investments using primarily an income approach. Generally, an independent pricing service provider is the preferred source of pricing a loan, however, to the extent the independent pricing service provider price is unavailable or not relevant and reliable, the Company may use broker quotes. The Company attempts to maximize the use of observable inputs and minimize the use of unobservable inputs. The availability of observable inputs can vary from investment to investment and is affected by a wide variety of factors, including the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets and other characteristics particular to the security. Market Approach The Company values its syndicated senior secured loans and structured product investments using values provided by independent pricing services that have been approved by the Adviser's Pricing Committee. The prices received from these pricing service providers are based on yields or prices of securities of comparable quality, type, coupon and maturity and/or indications as to value from dealers and exchanges. The Company will seek to obtain two prices from the pricing services with one price representing the primary source and the other representing an independent control valuation. The Company evaluates the prices obtained from brokers or independent pricing service providers based on available market information, including trading activity of the subject or similar securities, or by performing a comparable security analysis to ensure that fair values are reasonably estimated. The Company also performs back-testing of valuation information obtained from independent pricing service providers and brokers against actual prices received in transactions. In addition to ongoing monitoring and back-testing, the Company performs due diligence procedures surrounding independent pricing service providers to understand their methodology and controls to support their use in the valuation process. Income Approach The Company utilizes an Income Approach model in valuing its private debt investment portfolio, which consists primarily of middle-market senior secured loans with floating reference rates. As independent pricing service provider and broker quotes have not historically been consistently relevant and reliable, the fair value is determined using an internal index-based pricing model that takes into account both the movement in the spread of one or more performing credit indices as well as changes in the credit profile of the borrower. The implicit yield for each debt investment is calculated at the date the investment is made. This calculation takes into account the acquisition price (par less any upfront fee) and the relative maturity assumptions of the underlying asset. As of each balance sheet date, the implied yield for each investment is reassessed, taking into account changes in the discount margin of the baseline index, probabilities of default and any changes in the credit profile of the issuer of the security, such as fluctuations in operating levels and leverage. If there is an observable price available on a comparable security/issuer, it is used to calibrate the internal model. If the valuation process for a particular debt investment results in a value above par, the value is typically capped at the greater of the principal amount plus any prepayment penalty in effect or 100% of par on the basis that a market participant is likely unwilling to pay a greater amount than that at which the borrower could refinance. Enterprise Value Waterfall Approach In valuing equity securities, the Company estimates fair value using an "Enterprise Value Waterfall" valuation model. The Company estimates the enterprise value of a portfolio company and then allocates the enterprise value to the portfolio company’s securities in order of their relative liquidation preference. In addition, the model assumes that any outstanding debt or other securities that are senior to the Company’s equity securities are required to be repaid at par. Generally, the waterfall proceeds flow from senior debt tranches of the capital structure to junior and subordinated debt, followed by each class or preferred stock and finally the common stock. Additionally, the Company may estimate the fair value of a debt security using the Enterprise Value Waterfall approach when the Company does not expect to receive full repayment. 38 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) To estimate the enterprise value of the portfolio company, the Company primarily uses a valuation model based on a transaction multiple, which generally is the original transaction multiple, and measures of the portfolio company’s financial performance. In addition, the Company considers other factors, including but not limited to (i) offers from third parties to purchase the portfolio company, (ii) the implied value of recent investments in the equity securities of the portfolio company, (iii) publicly available information regarding recent sales of private companies in comparable transactions and (iv) when the Company believes there are comparable companies that are publicly traded, the Company performs a review of these publicly traded companies and the market multiple of their equity securities. For certain non-performing assets, the Company may utilize the liquidation or collateral value of the portfolio company's assets in its estimation of enterprise value. Valuation of Investment in Jocassee The Company estimates the fair value of its investment in Jocassee Partners LLC using the net asset value of Jocassee Partners LLC and its ownership percentage. The net asset value of Jocassee Partners LLC is determined in accordance with the specialized accounting guidance for investment companies. Valuation of Investment in Thompson Rivers The Company estimates the fair value of its investment in Thompson Rivers LLC using the net asset value of Thompson Rivers LLC and its ownership percentage. The net asset value of Thompson Rivers LLC is determined in accordance with the specialized accounting guidance for investment companies. Level 3 Unobservable Inputs The following tables summarize the significant unobservable inputs the Company used in the valuation of its Level 3 debt and equity securities as of September 30, 2020 and December 31, 2019. The weighted average range of unobservable inputs is based on fair value of investments. September 30, 2020: Fair Value Valuation Model Level 3 Input Range of Inputs Weighted Average Senior debt and 1 st lien notes (1) $ 639,860,762 Income Approach Implied Spread 4.3% – 12.0% 6.5% Subordinated debt and 2 nd lien notes (2) 9,900,456 Income Approach Implied Spread 8.7% – 9.7% 9.2% Equity shares 975,050 Enterprise Value Waterfall Approach Adjusted EBITDA Multiple 8.2x – 11.9x 9.7x (1) Excludes investments with an aggregate fair value amounting to $14,783,231, which the Company valued using unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available. (2) Excludes investments with an aggregate fair value amounting to $4,999,386, which the Company valued using unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available. December 31, 2019: Fair Value Valuation Model Level 3 Input Range of Inputs Weighted Average Senior debt and 1st lien notes (1) $ 528,907,788 Income Approach Implied Spread 4.6% – 8.0% 5.7% Subordinated debt and 2nd lien notes (2) 9,699,465 Income Approach Implied Spread 8.8% – 9.4% 9.1% Equity shares 760,716 Enterprise Value Waterfall Approach Adjusted EBITDA Multiple 10.0x – 12.3x 10.5x (1) Excludes investments with an aggregate fair value amounting to $26,592,519, which the Company valued using unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available. (2) Excludes investments with an aggregate fair value amounting to $2,312,500, which the Company valued using unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available. 39 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) The following tables present the Company’s investment portfolio at fair value as of September 30, 2020 and December 31, 2019, categorized by the ASC Topic 820 valuation hierarchy, as previously described: Fair Value as of September 30, 2020 Level 1 Level 2 Level 3 Total Senior debt and 1 st lien notes $ — $ 178,457,696 $ 654,643,993 $ 833,101,689 Subordinated debt and 2 nd lien notes — 4,469,444 14,899,842 19,369,286 Structured products — 33,164,151 — 33,164,151 Equity shares — — 975,050 975,050 Short-term investments 210,503,390 — — 210,503,390 Investments subject to leveling $ 210,503,390 $ 216,091,291 $ 670,518,885 $ 1,097,113,566 Investments in joint ventures(1) 19,158,075 $ 1,116,271,641 Fair Value as of December 31, 2019 Level 1 Level 2 Level 3 Total Senior debt and 1 st lien notes $ — $ 495,363,062 $ 555,500,307 $ 1,050,863,369 Subordinated debt and 2 nd lien notes — 3,209,004 12,011,965 15,220,969 Equity shares — — 760,716 760,716 Short-term investments 96,568,940 — — 96,568,940 Investments subject to leveling $ 96,568,940 $ 498,572,066 $ 568,272,988 $ 1,163,413,994 Investment in joint venture(1) 10,229,813 $ 1,173,643,807 (1) The Company's investments in Jocassee and Thompson Rivers are measured at fair value using net asset value and have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Unaudited Consolidated Balance Sheet and Consolidated Balance Sheet. 40 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) The following tables reconcile the beginning and ending balances of the Company’s investment portfolio measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine months ended September 30, 2020 and 2019: Nine Months Ended September 30, 2020: Senior Debt and 1 st Lien Notes Subordinated Debt and 2 nd Lien Notes Equity Shares Total Fair value, beginning of period $ 555,500,307 $ 12,011,965 $ 760,716 $ 568,272,988 New investments 206,929,866 660,263 512,299 208,102,428 Transfers into Level 3, net 19,063,921 1,996,471 — 21,060,392 Proceeds from sales of investments (91,889,896) (415,977) — (92,305,873) Loan origination fees received (4,744,340) (19,808) — (4,764,148) Principal repayments received (20,157,266) — — (20,157,266) Payment in kind interest earned 236,572 35,108 — 271,680 Accretion of loan premium 16,426 — — 16,426 Accretion of deferred loan origination revenue 1,653,596 26,081 — 1,679,677 Realized gain (loss) 70,946 (26,253) — 44,693 Unrealized appreciation (depreciation) (12,036,139) 631,992 (297,965) (11,702,112) Fair value, end of period $ 654,643,993 $ 14,899,842 $ 975,050 $ 670,518,885 Nine Months Ended September 30, 2019: Senior Debt and 1 st Lien Notes Subordinated Debt and 2 nd Lien Notes Equity Shares Total Fair value, beginning of period $ 257,987,259 $ 7,679,132 $ 515,825 $ 266,182,216 New investments 249,345,678 4,951,685 — 254,297,363 Transfers out of Level 3 (37,144,143) — — (37,144,143) Proceeds from sales of investments (13,765,869) — — (13,765,869) Loan origination fees received (4,939,839) (148,551) — (5,088,390) Principal repayments received (46,384,560) (2,980,874) — (49,365,434) Accretion of loan premium (13,011) — — (13,011) Accretion of deferred loan origination revenue 1,163,453 63,413 — 1,226,866 Realized loss (47,768) — — (47,768) Unrealized appreciation 1,501,737 124,484 179,835 1,806,056 Fair value, end of period $ 407,702,937 $ 9,689,289 $ 695,660 $ 418,087,886 All realized gains and losses and unrealized appreciation and depreciation are included in earnings (changes in net assets) and are reported on separate line items within the Company’s Unaudited Consolidated Statements of Operations. Pre-tax net unrealized appreciation (depreciation) on Level 3 investments of $18.8 million and $(13.8) million during the three and nine months ended September 30, 2020 was related to portfolio company investments that were still held by the Company as of September 30, 2020. Pre-tax net unrealized appreciation on Level 3 investments of $3.1 million and $19.6 million during the three and nine months ended September 30, 2019 was related to portfolio company investments that were still held by the Company as of September 30, 2019. Exclusive of short-term investments, during the nine months ended September 30, 2020, the Company made investments of approximately $297.0 million in portfolio companies to which it was not previously contractually committed to provide such financing. During the nine months ended September 30, 2020, the Company made investments of $14.8 million in portfolio companies to which it was previously committed to provide such financing. Exclusive of short-term investments, during the nine months ended September 30, 2019, the Company made investments of approximately $257.5 million in portfolio companies to which it was not previously contractually committed to provide such financing. During the nine months ended September 30, 2019, the Company made investments of $10.7 million in portfolio companies to which it was previously committed to provide such financing. 41 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) Unsettled Purchases and Sales of Investments Investment transactions are recorded based on the trade date of the transaction. As a result, unsettled purchases and sales are recorded as payables and receivables from unsettled transactions, respectively. While purchases and sales of the Company's syndicated senior secured loans generally settle on a T+7 basis, the settlement period will sometimes extend past the scheduled settlement. In such cases, the Company generally is contractually owed and recognizes interest income equal to the applicable margin ("spread") beginning on the T+7 date. Such income is accrued as interest receivable and is collected upon settlement of the investment transaction. Realized Gain or Loss and Unrealized Appreciation or Depreciation of Portfolio Investments Realized gains or losses are recorded upon the sale or liquidation of investments and are calculated as the difference between the net proceeds from the sale or liquidation, if any, and the cost basis of the investment using the specific identification method. Unrealized appreciation or depreciation reflects the difference between the fair value of the investments and the cost basis of the investments. Investment Classification In accordance with the provisions of the 1940 Act, the Company classifies investments by level of control. As defined in the 1940 Act, "Control Investments" are investments in those companies that the Company is deemed to "Control." "Affiliate Investments" are investments in those companies that are "Affiliated Persons" of the Company, as defined in the 1940 Act, other than Control Investments. "Non-Control / Non-Affiliate Investments" are those that are neither Control Investments nor Affiliate Investments. Generally, under the 1940 Act, the Company is deemed to control a company in which it has invested if the Company owns more than 25.0% of the outstanding voting securities (i.e., securities with the right to elect directors) and/or has the power to exercise control over the management or policies of such portfolio company. As of September 30, 2020, the Company does not “Control” any of its portfolio companies for the purposes of the 1940 Act. Under the 1940 Act, the Company is deemed to be an Affiliated Person of a company in which the Company has invested if it owns at least 5.0%, but no more than 25.0%, of the outstanding voting securities of such company. Investment Income Interest income, including amortization of premium and accretion of discount, is recorded on the accrual basis to the extent that such amounts are expected to be collected. Generally, when interest and/or principal payments on a loan become past due, or if the Company otherwise does not expect the borrower to be able to service its debt and other obligations, the Company will place the loan on non-accrual status and will generally cease recognizing interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. The Company writes off any previously accrued and uncollected interest when it is determined that interest is no longer considered collectible. Dividend income is recorded on the ex-dividend date. Payment-in-Kind Interest As of September 30, 2020 and December 31, 2019, the Company held investments that contained PIK interest provisions, and the Company may hold additional investments with PIK interest provisions in the future. PIK interest, computed at the contractual rate specified in each loan agreement, is periodically added to the principal balance of the loan, rather than being paid to the Company in cash, and is recorded as interest income. Thus, the actual collection of PIK interest may be deferred until the time of debt principal repayment. PIK interest, which is a non-cash source of income at the time of recognition, is included in the Company’s taxable income and therefore affects the amount the Company is required to distribute to its stockholders to maintain its tax treatment as a RIC for federal income tax purposes, even though the Company has not yet collected the cash. Generally, when current cash interest and/or principal payments on a loan become past due, or if the Company otherwise does not expect the borrower to be able to service its debt and other obligations, the Company will place the loan on non-accrual status and will generally cease recognizing PIK interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. The Company writes off any accrued and uncollected PIK interest when it is determined that the PIK interest is no longer collectible. 42 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) Fee Income Origination, facility, commitment, consent and other advance fees received in connection with loan agreements ("Loan Origination Fees") are recorded as deferred income and recognized as investment income over the term of the loan. Upon prepayment of a loan, any unamortized Loan Origination Fees are recorded as investment income. In the general course of its business, the Company receives certain fees from portfolio companies, which are non-recurring in nature. Such fees include loan prepayment penalties, structuring fees and loan waiver and amendment fees, and are recorded as investment income when earned. Fee income for the three and nine months ended September 30, 2020 and 2019 was as follows: Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 Recurring Fee Income: Amortization of loan origination fees $ 503,114 $ 245,038 $ 1,396,253 $ 591,162 Management, valuation and other fees 174,416 80,431 504,171 211,313 Total Recurring Fee Income 677,530 325,469 1,900,424 802,475 Non-Recurring Fee Income: Prepayment fees — — 84,151 59,617 Acceleration of unamortized loan origination fees 31,549 465,695 280,123 663,073 Advisory, loan amendment and other fees 60,047 57,628 115,854 144,654 Total Non-Recurring Fee Income 91,596 523,323 480,128 867,344 Total Fee Income $ 769,126 $ 848,792 $ 2,380,552 $ 1,669,819 Concentration of Credit Risk As of both September 30, 2020 and December 31, 2019, there were no individual investments representing greater than 10% of the fair value of the Company’s portfolio. As of September 30, 2020 and December 31, 2019, the Company’s largest single portfolio company investment, excluding short-term investments, represented approximately 3.1% and 2.3%, respectively, of the fair value of the Company’s portfolio, exclusive of short-term investments. Income, consisting of interest, dividends, fees, other investment income and realization of gains or losses on equity interests, can fluctuate dramatically upon repayment of an investment or sale of an equity interest and in any given year can be highly concentrated among several portfolio companies. As of September 30, 2020, $965.3 million of the Company's assets were or will be pledged as collateral for the February 2019 Credit Facility, and $257.3 million of the Company's assets were pledged as collateral for the Debt Securitization. Investments Denominated in Foreign Currencies As of September 30, 2020 the Company held one investment that was denominated in Swedish kronas, eleven investments that were denominated in Euros and five investments that were denominated in British pounds sterling. As of December 31, 2019, the Company held one investment that was denominated in Swedish kronas, five investments that were denominated in Euros and two investments that were denominated in British pounds sterling. At each balance sheet date, portfolio company investments denominated in foreign currencies are translated into United States dollars using the spot exchange rate on the last business day of the period. Purchases and sales of foreign portfolio company investments, and any income from such investments, are translated into United States dollars using the rates of exchange prevailing on the respective dates of such transactions. Although the fair values of foreign portfolio company investments and the fluctuation in such fair values are translated into United States dollars using the applicable foreign exchange rates described above, the Company does not separately report that portion of the change in fair values resulting from foreign currency exchange rates fluctuations from the change in fair values of the underlying investment. All fluctuations in fair value are included in net unrealized appreciation (depreciation) of investments in the Company's Unaudited Consolidated Statements of Operations. In addition, during the nine months ended September 30, 2020, the Company entered into forward currency contracts primarily to help mitigate the impact that an adverse change in foreign exchange rates would have on net interest income from 43 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) the Company's investments and related borrowings denominated in foreign currencies. Net unrealized appreciation or depreciation on foreign currency contracts are included in "Net unrealized appreciation (depreciation) - foreign currency transactions" and net realized gains or losses on forward currency contracts are included in "Net realized gains (losses) - foreign currency transactions" in the Company's Unaudited Consolidated Statements of Operations. Investments denominated in foreign currencies and foreign currency transactions may involve certain considerations and risks not typically associated with those of domestic origin, including unanticipated movements in the value of the foreign currency relative to the U.S. Dollar. 4. INCOME TAXES The Company has elected for federal income tax purposes to be treated as a RIC under the Code and intends to make the required distributions to its stockholders as specified therein. In order to maintain its tax treatment as a RIC, the Company must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then the Company is generally required to pay taxes only on the portion of its taxable income and gains it does not distribute (actually or constructively) and certain built-in gains. The Company has historically met its minimum distribution requirements and continually monitors its distribution requirements with the goal of ensuring compliance with the Code. The minimum distribution requirements applicable to RICs require the Company to distribute to its stockholders at least 90% of its investment company taxable income ("ICTI"), as defined by the Code, each year. Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of current year distributions into the next tax year and pay a 4% U.S. federal excise tax on such excess. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI. ICTI generally differs from net investment income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses. The Company may be required to recognize ICTI in certain circumstances in which it does not receive cash. For example, if the Company holds debt obligations that are treated under applicable tax rules as having original issue discount (such as debt instruments issued with warrants), the Company must include in ICTI each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by the Company in the same taxable year. The Company may also have to include in ICTI other amounts that it has not yet received in cash, such as interest income from investments that have been classified as non-accrual for financial reporting purposes. Interest income on non-accrual investments is not recognized for financial reporting purposes, but generally is recognized in ICTI. Because any original issue discount or other amounts accrued will be included in the Company’s ICTI for the year of accrual, the Company may be required to make a distribution to its stockholders in order to satisfy the minimum distribution requirements, even though the Company will not have received and may not ever receive any corresponding cash amount. ICTI also excludes net unrealized appreciation or depreciation, as investment gains or losses are not included in taxable income until they are realized. In addition, the Company has a wholly-owned taxable subsidiary (the “Taxable Subsidiary”), which holds certain portfolio investments that are listed on the Unaudited and Audited Consolidated Schedules of Investments. The Taxable Subsidiary is consolidated for financial reporting purposes, such that the Company’s consolidated financial statements reflect the Company’s investments in the portfolio companies owned by the Taxable Subsidiary. The purpose of the Taxable Subsidiary is to permit the Company to hold certain portfolio companies that are organized as LLCs (or other forms of pass-through entities) and still satisfy the RIC tax requirement that at least 90% of the RIC’s gross revenue for income tax purposes must consist of qualifying investment income. Absent the Taxable Subsidiary, a proportionate amount of any gross income of an LLC (or other pass-through entity) portfolio investment would flow through directly to the RIC. To the extent that such income did not consist of qualifying investment income, it could jeopardize the Company’s ability to qualify as a RIC and therefore cause the Company to incur significant amounts of federal income taxes. When LLCs (or other pass-through entities) are owned by the Taxable Subsidiary, their income is taxed to the Taxable Subsidiary and does not flow through to the RIC, thereby helping the Company preserve its RIC tax treatment and resultant tax advantages. The Taxable Subsidiary is not consolidated for income tax purposes and may generate income tax expense or benefit as a result of their ownership of the portfolio companies. This income tax expense or benefit is reflected in the Company’s Unaudited Consolidated Statements of Operations. Additionally, any unrealized appreciation related to portfolio investments held by the Taxable Subsidiary (net of unrealized depreciation related to portfolio investments held by the Taxable Subsidiary) is reflected net of applicable federal and state income taxes in the Company's Consolidated Statements of Operations, with the related deferred tax assets or liabilities included in "Accounts payable and accrued liabilities" in the Company's Unaudited and Audited Consolidated Balance Sheets. For federal income tax purposes, the cost of investments owned as of September 30, 2020 and December 31, 2019 was approximately $1,132.2 million and $1,192.7 million, respectively. As of September 30, 2020, net unrealized depreciation on 44 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) the Company's investments (tax basis) was approximately $18.7 million, consisting of gross unrealized appreciation, where the fair value of the Company's investments exceeds their tax cost, of approximately $9.7 million and gross unrealized depreciation, where the tax cost of the Company's investments exceeds their fair value, of approximately $28.4 million. As of December 31, 2019, net unrealized depreciation on the Company's investments (tax basis) was approximately $20.1 million, consisting of gross unrealized appreciation, where the fair value of the Company's investments exceeds their tax cost, of approximately $2.5 million and gross unrealized depreciation, where the tax cost of the Company's investments exceeds their fair value, of approximately $22.6 million. 5. BORROWINGS The Company had the following borrowings outstanding as of September 30, 2020 and December 31, 2019: Issuance Date Maturity Date Interest Rate as of September 30, 2020 September 30, 2020 December 31, 2019 Credit Facilities: August 3, 2018 - Class A-1 NA NA $ — $ 107,200,000 February 21, 2019 February 21, 2024 2.138% 463,703,208 245,288,419 Total Credit Facilities $ 463,703,208 $ 352,488,419 Debt Securitization: May 9, 2019 - Class A-1 2019 Notes April 15, 2027 1.295% $ 126,813,048 $ 266,710,176 May 9, 2019 - Class A-2 2019 Notes April 15, 2027 1.925% 51,500,000 51,500,000 (Less: Deferred financing fees) (777,000) (1,545,702) Total Debt Securitization $ 177,536,048 $ 316,664,474 Notes: September 24, 2020 - August 2025 Notes August 4, 2025 4.660% $ 25,000,000 $ — September 29, 2020 - August 2025 Notes August 4, 2025 4.660% 25,000,000 — (Less: Deferred financing fees) (465,521) — Total Notes $ 49,534,479 $ — August 2018 Credit Facility On July 3, 2018, the Company formed Barings BDC Senior Funding I, LLC, an indirectly wholly-owned Delaware limited liability company (“BSF”), the primary purpose of which was to function as the Company's special purpose, bankruptcy-remote, financing subsidiary. On August 3, 2018, BSF entered into the August 2018 Credit Facility (as subsequently amended in December 2018 and in February 2020) with Bank of America, N.A., as administrative agent (the "Administrative Agent") and Class A-1 Lender, Société Générale, as Class A Lender, and Bank of America Merrill Lynch, as sole lead arranger and sole book manager. BSF and the Administrative Agent also entered into a security agreement dated as of August 3, 2018 (the "Security Agreement") pursuant to which BSF’s obligations under the August 2018 Credit Facility were secured by a first-priority security interest in substantially all of the assets of BSF, including its portfolio of investments (the "Pledged Property"). In connection with the first-priority security interest established under the Security Agreement, all of the Pledged Property was held in the custody of State Street Bank and Trust Company, as collateral administrator (the "Collateral Administrator"). The Collateral Administrator maintained and performed certain collateral administration services with respect to the Pledged Property pursuant to a collateral administration agreement among BSF, the Administrative Agent and the Collateral Administrator. Generally, the Collateral Administrator was authorized to make distributions and payments from Pledged Property based only on the written instructions of the Administrative Agent. The August 2018 Credit Facility initially provided for borrowings in an aggregate amount up to $750.0 million, including up to $250.0 million borrowed under the Class A Loan Commitments and up to $500.0 million borrowed under the Class A-1 Loan Commitments. Effective February 28, 2019, the Company reduced its Class A Loan Commitments to $100.0 million, which reduced total commitments under the August 2018 Credit Facility to $600.0 million. Effective May 9, 2019, the Company further reduced its Class A Loan Commitments under the August 2018 Credit Facility from $100.0 million to zero and reduced its Class A-1 Loan Commitments under the August 2018 Credit Facility from $500.0 million to $300.0 million, which collectively reduced total commitments under the August 2018 Credit Facility to $300.0 million. Effective June 18, 2019, the Company further reduced its Class A-1 Loan Commitments, and therefore total commitments, under the August 2018 Credit Facility from $300.0 million to $250.0 million. Effective August 14, 2019, the Company further reduced its Class A-1 Loan Commitments, and therefore total commitments, under the August 2018 Credit Facility from $250.0 million to $177.0 million. Effective October 29, 2019, the Company further reduced its Class A-1 Loan Commitments, and therefore total 45 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) commitments, under the August 2018 Credit Facility from $177.0 million to $150.0 million. Effective January 21, 2020, the Company further reduced its Class A-1 Loan Commitments, and therefore total commitments, under the August 2018 Credit Facility from $150.0 million to $80.0 million. Effective April 23, 2020, the Company further reduced its Class A-1 Loan Commitments, and therefore total commitments, under the August 2018 Credit Facility from $80.0 million to $30.0 million. Finally, effective June 26, 2020, the Company further reduced its Class A-1 Loan Commitments, and therefore total commitments, under the August 2018 Credit Facility from $30.0 million to zero. In connection with these reductions, the pro rata portion of the unamortized deferred financing costs related to the August 2018 Credit Facility was written off and recognized as a loss on extinguishment of debt in the Company's Consolidated Statements of Operations. On February 21, 2020, the Company extended the maturity date of the August 2018 Credit Facility from August 3, 2020 to August 3, 2021. On June 30, 2020, following the repayment of all borrowings, interest, and fees payable thereunder and at the election of the Company, the August 2018 Credit Facility was terminated, including all commitments and obligations of Bank of America, N.A. to lend or make advances to BSF. In addition, the Security Agreement was terminated and all security interests in the assets of BSF in favor of the lenders were terminated. As a result of these terminations, all obligations of BSF under the August 2018 Credit Facility and Security Agreement were fully discharged. All borrowings under the August 2018 Credit Facility bore interest, subject to BSF’s election, on a per annum basis equal to (i) the applicable base rate plus the applicable spread or (ii) the applicable LIBOR rate plus the applicable spread. The applicable base rate was equal to the greater of (i) the federal funds rate plus 0.5%, (ii) the prime rate or (iii) one-month LIBOR plus 1.0%. The applicable LIBOR rate depended on the term of the borrowing under the August 2018 Credit Facility, which could be either one month or three months. BSF was required to pay commitment fees on the unused portion of the August 2018 Credit Facility. BSF could prepay any borrowing at any time without premium or penalty, except that BSF could have been liable for certain funding breakage fees if prepayments occurred prior to expiration of the relevant interest period. BSF could also permanently reduce all or a portion of the commitment amount under the August 2018 Credit Facility without penalty. Borrowings under the August 2018 Credit Facility were subject to compliance with a borrowing base, pursuant to which the amount of funds advanced by the lenders to BSF would vary depending upon the types of assets in BSF’s portfolio. Assets were required to meet certain criteria to be included in the borrowing base, and the borrowing base was subject to certain portfolio restrictions including investment size, sector concentrations, investment type and credit ratings. Under the August 2018 Credit Facility, BSF made certain representations and warranties and was required to comply with various covenants, reporting requirements and other customary requirements for credit facilities of this nature. In addition to other customary events of default included in financing transactions, the August 2018 Credit Facility contained the following events of default: (a) the failure to make principal payments when due or interest payments within two business days of when due; (b) borrowings under the credit facility exceeding the applicable advance rates; (c) the purchase by BSF of certain ineligible assets; (d) the insolvency or bankruptcy of BSF; and (e) the decline of BSF’s NAV below a specified threshold. Borrowings of BSF were considered borrowings by the Company for purposes of complying with the asset coverage requirements under the 1940 Act applicable to business development companies. The obligations of BSF under the August 2018 Credit Facility were non-recourse to the Company. As of December 31, 2019, BSF had borrowings of $107.2 million, outstanding under the August 2018 Credit Facility with an interest rate of 2.940%. As of December 31, 2019, the total fair value of the borrowings outstanding under the August 2018 Credit Facility was $107.2 million. The fair values of the borrowings outstanding under the August 2018 Credit Facility are based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model. February 2019 Credit Facility On February 21, 2019, the Company entered into the February 2019 Credit Facility (as subsequently amended in December 2019) with ING Capital LLC ("ING"), as administrative agent, and the lenders party thereto. The initial commitments under the February 2019 Credit Facility total $800.0 million. The February 2019 Credit Facility has an accordion feature that allows for an increase in the total commitments of up to $400.0 million, subject to certain conditions and the satisfaction of specified financial covenants. The Company can borrow foreign currencies directly under the February 2019 Credit Facility. The February 2019 Credit Facility, which is structured as a revolving credit facility, is secured primarily by a material portion of the Company's assets and guaranteed by certain subsidiaries of the Company. Following the termination of the August 2018 Credit Facility on June 30, 2020, BSF became a subsidiary guarantor and its assets will secure the February 2019 Credit Facility. The revolving period of the February 2019 Credit Facility ends on February 21, 2023, followed by a one-year repayment period with a final maturity date of February 21, 2024. 46 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) Borrowings under the February 2019 Credit Facility bear interest, subject to the Company's election, on a per annum basis equal to (i) the applicable base rate plus 1.00% (or 1.25% if the Company no longer maintains an investment grade credit rating), (ii) the applicable LIBOR rate plus 2.00% (or 2.25% if the Company no longer maintains an investment grade credit rating), (iii) for borrowings denominated in certain foreign currencies other than Australian dollars, the applicable currency rate for the foreign currency as defined in the credit agreement plus 2.00% (or 2.25% if the Company no longer maintains an investment grade credit rating) or (iv) for borrowings denominated in Australian dollars, the applicable Australian dollars Screen Rate, plus 2.20% (or 2.45% if the Company no longer maintains an investment grade credit rating). The applicable base rate is equal to the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.5%, (iii) the Overnight Bank Funding Rate plus 0.5%, (iv) the adjusted three-month applicable currency rate plus 1.0% and (v) 1%. The applicable currency rate depends on the currency and term of the draw under the February 2019 Credit Facility. In addition, the Company (i) paid a commitment fee of 0.375% per annum on undrawn amounts for the period beginning on the closing date of the February 2019 Credit Facility to and including the date that was six months after the closing date of the February 2019 Credit Facility, and (ii) thereafter pays a commitment fee of (x) 0.5% per annum on undrawn amounts if the unused portion of the February 2019 Credit Facility is greater than two-thirds of total commitments or (y) 0.375% per annum on undrawn amounts if the unused portion of the February 2019 Credit Facility is equal to or less than two-thirds of total commitments. In connection with entering into the February 2019 Credit Facility, the Company incurred financing fees of approximately $6.4 million, which will be amortized over the remaining life of the February 2019 Credit Facility. The February 2019 Credit Facility contains certain affirmative and negative covenants, including but not limited to (i) maintaining minimum stockholders' equity, (ii) maintaining minimum obligors' net worth, (iii) maintaining a minimum asset coverage ratio, (iv) meeting a minimum liquidity test and (v) maintaining the Company's status as a regulated investment company and as a business development company. The February 2019 Credit Facility also contains customary events of default with customary cure and notice provisions, including, without limitation, nonpayment, misrepresentation of representations and warranties in a material respect, breach of covenant, cross-default to other indebtedness, bankruptcy, change of control, and material adverse effect. The February 2019 Credit Facility also permits the administrative agent to select an independent third party valuation firm to determine valuations of certain portfolio investments for purposes of borrowing base provisions. In connection with the February 2019 Credit Facility, the Company also entered into new collateral documents. As of September 30, 2020, the Company was in compliance with all covenants under the February 2019 Credit Facility. As of September 30, 2020, the Company had U.S. dollar borrowings of $325.0 million outstanding under the February 2019 Credit Facility with a weighted average interest rate of 2.188% (weighted average one month LIBOR of 0.188%) , borrowings denominated in Swedish kronas of 12.8kr million ($1.4 million U.S. dollars) with an interest rate of 2.00% (one month STIBOR of 0.000%), borrowings denominated in British pounds sterling of £40.3 million ($52.1 million U.S. dollars) with a weighted average interest rate of 2.063% (weighted average one month GBP LIBOR of 0.063% ) and borrowings denominated in Euros of €72.6 million ($85.1 million U.S. dollars) with an interest rate of 2.00% (weighted average one month EURIBOR of 0.000% ). The borrowings denominated in foreign currencies were translated into U.S. dollars based on the spot rate at the relevant balance sheet date. The impact resulting from changes in foreign exchange rates on the February 2019 Credit Facility borrowings is included in "Net unrealized appreciation (depreciation) - foreign currency transactions" in the Company's Unaudited Consolidated Statements of Operations. As of December 31, 2019, the Company had U.S. dollar borrowings of $195.0 million outstanding under the February 2019 Credit Facility with a weighted average interest rate of 4.054%, borrowings denominated in Swedish kronas of 12.8kr million ($1.4 million U.S. dollars) with an interest rate of 2.25%, borrowings denominated in British pounds sterling of £4.7 million ($6.3 million U.S. dollars) with an interest rate of 3.0%, and borrowings denominated in Euros of €38.0 million ($42.7 million U.S. dollars) with an interest rate of 2.25%. The borrowings denominated in foreign currencies were translated into U.S. dollars based on the spot rate at the relevant balance sheet date. The impact resulting from changes in foreign exchange rates on the February 2019 Credit Facility borrowings is included in "Net unrealized appreciation (depreciation) - foreign currency transactions" in the Company's Unaudited Consolidated Statements of Operations. As of September 30, 2020 and December 31, 2019, the total fair value of the borrowings outstanding under the February 2019 Credit Facility was $463.7 million and $245.3 million, respectively. The fair values of the borrowings outstanding under the February 2019 Credit Facility are based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model. Debt Securitization On May 9, 2019, the Company completed a $449.3 million term debt securitization. Term debt securitizations are also known as collateralized loan obligations and are a form of secured financing incurred by the Company, which is consolidated by the Company for financial reporting purposes and subject to its overall asset coverage requirement. The notes offered in the 47 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) Debt Securitization (collectively, the “2019 Notes”) were issued by Barings BDC Static CLO Ltd. 2019-I (“BBDC Static CLO Ltd.”) and Barings BDC Static CLO 2019-I, LLC, wholly-owned and consolidated subsidiaries of the Company (collectively, the “Issuers”), and are secured by a diversified portfolio of senior secured loans and participation interests therein. The Debt Securitization was executed through a private placement of approximately $296.8 million of AAA(sf) Class A-1 Senior Secured Floating Rate 2019 Notes (“Class A-1 2019 Notes”), which bore interest at the three-month LIBOR plus 1.02%; $51.5 million of AA(sf) Class A-2 Senior Secured Floating Rate 2019 Notes (“Class A-2 2019 Notes”), which bore interest at the three-month LIBOR plus 1.65%; and $101.0 million of Subordinated 2019 Notes which did not bear interest and were not rated. The Company retained all of the Subordinated 2019 Notes issued in the Debt Securitization in exchange for the Company’s sale and contribution to BBDC Static CLO Ltd. of the initial closing date portfolio, which included senior secured loans and participation interests therein distributed to the Company by BSF. The 2019 Notes were scheduled to mature on April 15, 2027; however, the 2019 Notes could be redeemed by the Issuers, at the direction of the Company as holder of the Subordinated 2019 Notes, on any business day after May 9, 2020. In connection with the sale and contribution, the Company made customary representations, warranties and covenants to the Issuers. The Class A-1 2019 Notes and Class A-2 2019 Notes were the secured obligations of the Issuers, the Subordinated 2019 Notes are the unsecured obligations of BBDC Static CLO Ltd., and the indenture governing the 2019 Notes included customary covenants and events of default. The 2019 Notes were not registered under the Securities Act or any state securities or “blue sky” laws and could not be offered or sold in the United States absent registration with the SEC or an applicable exemption from registration. As of September 30, 2020, the Company was in compliance with all covenants under the Class A-1 2019 Notes and Class A-2 2019 Notes. The Company serves as collateral manager to BBDC Static CLO Ltd. under a collateral management agreement and has agreed to irrevocably waive all collateral management fees payable pursuant to the collateral management agreement. The Class A-1 2019 Notes and the Class A-2 2019 Notes issued in connection with the Debt Securitization had floating rate interest provisions based on the three-month LIBOR that reset quarterly, except that LIBOR for the first interest accrual period was calculated by reference to an interpolation between the rate for deposits with a term equal to the next shorter period of time for which rates were available and the rate appearing for deposits with a term equal to the next longer period of time for which rates were available. During the three and nine months ended September 30, 2020, $48.1 million and $139.9 million, respectively, of the Class A-1 2019 Notes were repaid. As of September 30, 2020, the Company had borrowings of $126.8 million outstanding under the Class A-1 2019 Notes with an interest rate of 1.295% (three month LIBOR of 0.275%) and borrowings of $51.5 million outstanding under the Class A-2 2019 Notes with an interest rate of 1.925% (three month LIBOR of 0.275%). During the year ended December 31, 2019, $30.0 million of the Class A-1 2019 Notes were repaid. As of December 31, 2019, the Company had borrowings of $266.7 million outstanding under the Class A-1 2019 Notes with an interest rate of 3.021% and borrowings of $51.5 million outstanding under the Class A-2 2019 Notes with an interest rate of 3.651%. As of September 30, 2020, the total fair value of the Class A-1 2019 Notes and the Class A-2 2019 Notes was $126.1 million and $51.0 million, respectively. As of December 31, 2019, the total fair value of the Class A-1 2019 Notes and the Class A-2 2019 Notes was $266.8 million and $51.5 million, respectively. The fair value determinations of the Company’s 2019 Notes were based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model. On October 15, 2020, the remaining 2019 Notes were repaid in full. August 2025 Notes On August 3, 2020, the Company entered into a Note Purchase Agreement (the "Note Purchase Agreement") with Massachusetts Mutual Life Insurance Company governing the issuance of (i) $50.0 million in aggregate principal amount of Series A senior unsecured notes (the "Series A Notes") due August 2025 with a fixed interest rate of 4.66% per year, and (ii) up to $50.0 million in aggregate principal amount of additional senior unsecured notes (the "Additional Notes" and, collectively with the Series A Notes, the "August 2025 Notes") due August 2025 with a fixed interest rate per year to be determined, in each case, to qualified institutional investors in a private placement. An aggregate principal amount of $25.0 million of the Series A Notes was issued on September 24, 2020 and an aggregate principal amount of $25.0 million of the Series A Notes was issued on September 29, 2020, both of which will mature on August 4, 2025 unless redeemed, purchased or prepaid prior to such date by the Company or its affiliates in accordance with their terms. Interest on the August 2025 Notes will be due semiannually in March and September, beginning in March 2021. In addition, the Company is obligated to offer to repay the August 2025 Notes 48 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) at par if certain change in control events occur. The August 2025 Notes are the Company's general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company. The Note Purchase Agreement contains customary terms and conditions for senior unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of the Company’s status as a BDC within the meaning of the 1940 Act, minimum shareholders’ equity, maximum net debt to equity ratio and minimum asset coverage ratio. The Note Purchase Agreement also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under our other indebtedness or that of our subsidiary guarantors, certain judgements and orders, and certain events of bankruptcy. As of September 30, 2020, the Company was in compliance with all covenants of the Note Purchase Agreement. The August 2025 Notes were offered in reliance on Section 4(a)(2) of the Securities Act. The August 2025 Notes have not and will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, as applicable. As of September 30, 2020, the fair value of the outstanding Series A Notes was $50.0 million. The fair value of the Series A Notes is based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model. 6. DERIVATIVE INSTRUMENTS The Company enters into forward currency contracts from time to time to primarily help mitigate the impact that an adverse change in foreign exchange rates would have on net interest income from the Company's investments and related borrowings denominated in foreign currencies. Net unrealized appreciation or depreciation on foreign currency contracts are included in "Net unrealized appreciation (depreciation) - foreign currency transactions" and net realized gains or losses on forward currency contracts are included in "Net realized gains (losses) - foreign currency transactions" in the Unaudited Consolidated Statements of Operations. Forward currency contracts are considered undesignated derivative instruments. The following table presents the Company's foreign currency forward contracts as of September 30, 2020 and December 31, 2019: As of September 30, 2020: Description Notional Amount to be Purchased Notional Amount to be Sold Maturity Date Gross Amount of Recognized Assets Balance Sheet Location of Net Amounts Foreign currency forward contract (CAD) C$13,495,000 $10,081,420 10/02/20 $ 21,550 Prepaid expenses and other assets Foreign currency forward contract (CAD) $10,255,950 C$13,495,000 10/02/20 152,979 Prepaid expenses and other assets Foreign currency forward contract (EUR) €4,672,157 $5,487,094 10/02/20 (8,286) Prepaid expenses and other assets Foreign currency forward contract (EUR) $5,374,120 €4,672,157 10/02/20 (104,687) Prepaid expenses and other assets Foreign currency forward contract (EUR) $3,412,466 €2,906,604 01/05/21 (3,740) Prepaid expenses and other assets Foreign currency forward contract (GBP) £1,285,558 $1,594,070 10/02/20 67,899 Prepaid expenses and other assets Foreign currency forward contract (GBP) $1,696,763 £1,285,558 10/02/20 34,794 Prepaid expenses and other assets Foreign currency forward contract (GBP) $529,136 £415,299 01/05/21 (8,147) Prepaid expenses and other assets Foreign currency forward contract (SEK) $80,985 751,190kr 10/02/20 (2,947) Prepaid expenses and other assets Foreign currency forward contract (SEK) 751,190kr $84,268 10/02/20 (336) Prepaid expenses and other assets Foreign currency forward contract (SEK) $92,284 821,594kr 01/05/21 362 Prepaid expenses and other assets Total $ 149,441 49 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) As of December 31, 2019: Description Notional Amount to be Purchased Notional Amount to be Sold Maturity Date Gross Amount of Recognized Assets Balance Sheet Location of Net Amounts Foreign currency forward contract (EUR) $158,244 €142,781 01/02/20 $ (2,028) Accounts payable and accrued liabilities Foreign currency forward contract (EUR) €142,781 $158,547 01/02/20 1,724 Accounts payable and accrued liabilities Foreign currency forward contract (EUR) $506,967 €453,920 04/02/20 (5,440) Accounts payable and accrued liabilities Foreign currency forward contract (GBP) $707,963 £549,253 01/02/20 (19,660) Accounts payable and accrued liabilities Foreign currency forward contract (GBP) £549,253 $718,861 01/02/20 8,763 Accounts payable and accrued liabilities Foreign currency forward contract (GBP) $227,890 £175,529 04/02/20 (5,215) Accounts payable and accrued liabilities Foreign currency forward contract (SEK) $95,654 920,569kr 01/02/20 (2,687) Accounts payable and accrued liabilities Foreign currency forward contract (SEK) 920,569kr $96,846 01/02/20 1,495 Accounts payable and accrued liabilities Foreign currency forward contract (SEK) $97,360 912,212kr 04/02/20 (511) Accounts payable and accrued liabilities Total $ (23,559) As of September 30, 2020 and December 31, 2019, the total fair value of the Company's foreign currency forward contracts was $149,441 and $(23,559), respectively. The fair values of the Company's foreign currency forward contracts are based on unadjusted prices from independent pricing services and independent indicative broker quotes, which are Level 2 inputs. 50 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) 7. COMMITMENTS AND CONTINGENCIES In the normal course of business, the Company is party to financial instruments with off-balance sheet risk, consisting primarily of unused commitments to extend financing to the Company's portfolio companies. Since commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. The Company maintains sufficient borrowing capacity to cover unused commitments to extend financing. The balances of unused commitments to extend financing as of September 30, 2020 and December 31, 2019 were as follows: Portfolio Company Investment Type September 30, 2020 December 31, 2019 ADE Holding(2) Committed Capex Line $ 87,995 $ — Anju Software, Inc.(1) Delayed Draw Term Loan 1,981,371 1,981,371 Arch Global Precision, LLC Delayed Draw Term Loan 7,446,226 1,012,661 Armstrong Transport Group (Pele Buyer, LLC)(1) Delayed Draw Term Loan — 712,567 Beacon Pointe Advisors, LLC(1) Delayed Draw Term Loan 363,636 — Centralis Finco S.a.r.l.(3) Acquisition Facility 475,319 — Classic Collision (Summit Buyer, LLC)(1) Delayed Draw Term Loan 10,123,058 — CM Acquisitions Holdings Inc.(1) Delayed Draw Term Loan 1,859,111 1,859,111 Contabo Finco S.À R.L(4) Delayed Draw Term Loan 218,718 1,013,849 CSL Dualcom(5) Delayed Draw Term Loan 3,421,195 — Dart Buyer, Inc.(1) Delayed Draw Term Loan 2,430,569 4,294,503 DreamStart Bidco SAS(6) Acquisition Facility 954,222 — Foundation Risk Partners, Corp. Delayed Draw Term Loan 15,555,555 — Heartland, LLC(1) Delayed Draw Term Loan 8,729,695 8,729,695 Heilbron (f/k/a Sucsez (Bolt Bidco B.V.))(7) Accordion Facility 9,799,720 2,605,531 Jocassee Partners LLC Joint Venture 35,000,000 40,000,000 Kene Acquisition, Inc.(1) Delayed Draw Term Loan 322,928 1,076,427 LAC Intermediate, LLC(1) Delayed Draw Term Loan 2,731,482 4,367,284 Options Technology Ltd.(1) Delayed Draw Term Loan 2,918,447 2,918,447 Premier Technical Services Group(8) Acquisition Facility 1,132,547 1,297,915 Process Equipment, Inc.(1) Delayed Draw Term Loan — 654,493 Professional Datasolutions, Inc. (PDI)(1) Delayed Draw Term Loan — 1,666,994 PSC UK Pty Ltd.(9) GBP Acquisition Facility 189,350 1,010,706 Smile Brands Group, Inc.(1) Delayed Draw Term Loan 422,242 927,046 Springbrook Software (SBRK Intermediate, Inc.)(1) Delayed Draw Term Loan 3,896,663 3,896,663 Stairway BidCo GmbH(10) Delayed Draw Term Loan 2,134,276 — The Hilb Group, LLC(1) Delayed Draw Term Loan 1,923,114 2,904,066 Thompson Rivers LLC Joint Venture 6,900,000 — Transit Technologies LLC(1) Delayed Draw Term Loan 6,785,305 — Transportation Insight, LLC(1) Delayed Draw Term Loan — 2,464,230 Truck-Lite Co., LLC(1) Delayed Draw Term Loan 2,884,615 3,205,128 USLS Acquisition, Inc.(1) Delayed Draw Term Loan 450,466 — Utac Ceram(11) Delayed Draw Term Loan 3,166,156 — Validity, Inc.(1) Delayed Draw Term Loan — 898,298 Total unused commitments to extend financing $ 134,303,981 $ 89,496,985 (1) Represents a commitment to extend financing to a portfolio company where one or more of the Company's current investments in the portfolio company are carried at less than cost. The Company's estimate of the fair value of the current investments in this portfolio company includes an analysis of the fair value of any unfunded commitments. (2) Actual commitment amount is denominated in Euros (€75,039) which was translated into U.S. dollars using the September 30, 2020 spot rate. (3) Actual commitment amount is denominated in Euros (€405,337) which was translated into U.S. dollars using the September 30, 2020 spot rate. (4) September 30, 2020 commitment amount is denominated in Euros (€186,516) which was translated into U.S. dollars using the September 30, 2020 spot rate. December 31, 2019 commitment amount was denominated in Euros (€903,207) which was translated into U.S. dollars using the December 31, 2019 spot rate. (5) Actual commitment amount is denominated in British pounds sterling (£2,646,346) which was translated into U.S. dollars using the using the September 30, 2020 spot rate. 51 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) (6) Actual commitment amount is denominated in Euros (€813,731) which was translated into U.S. dollars using the September 30, 2020 spot rate. (7) September 30, 2020 commitment amount is denominated in Euros (€8,356,897) which was translated into U.S. dollars using the September 30, 2020 spot rate. December 31, 2019 commitment amount was denominated in Euros (€2,321,187) which was translated into U.S. dollars using the December 31, 2019 spot rate. (8) September 30, 2020 commitment amount is denominated in British pounds sterling (£876,042) which was translated into U.S. dollars using the September 30, 2020 spot rate. December 31, 2019 commitment amount was denominated in British pounds sterling (£979,743) which was translated into U.S. dollars using the December 31, 2019 spot rate. (9) September 30, 2020 commitment amount is denominated in British pounds sterling (£146,466) which was translated into U.S. dollars using the September 30, 2020 spot rate. December 31, 2019 commitment amount was denominated in British pounds sterling (£762,941) which was translated into U.S. dollars using the December 31, 2019 spot rate. (10) September 30, 2020 commitment amount is denominated in British pounds sterling (€1,820,044) which was translated into U.S. dollars using the September 30, 2020 spot rate. (11) September 30, 2020 commitment amount is denominated in British pounds sterling (€2,700,000) which was translated into U.S. dollars using the September 30, 2020 spot rate. The Company and certain of its former executive officers have been named as defendants in two putative securities class action lawsuits, each filed in the United States District Court for the Southern District of New York (and then transferred to the United States District Court for the Eastern District of North Carolina) on behalf of all persons who purchased or otherwise acquired our common stock between May 7, 2014 and November 1, 2017. The first lawsuit was filed on November 21, 2017, and was captioned Elias Dagher, et al., v. Triangle Capital Corporation, et al. , Case No. 5:18-cv-00015-FL (the “ Dagher Action”). The second lawsuit was filed on November 28, 2017, and was captioned Gary W. Holden, et al., v. Triangle Capital Corporation, et al. , Case No. 5:18-cv-00010-FL (the “ Holden Action”). The Dagher Action and the Holden Action were consolidated and are currently captioned In re Triangle Capital Corp. Securities Litigation , Master File No. 5:18-cv-00010-FL. On April 10, 2018, the plaintiff filed its First Consolidated Amended Complaint. The complaint alleged certain violations of the securities laws, including, among other things, that the defendants made certain materially false and misleading statements and omissions regarding the Company’s business, operations and prospects between May 7, 2014 and November 1, 2017. The plaintiff seeks compensatory damages and attorneys’ fees and costs, among other relief, but did not specify the amount of damages being sought. On May 25, 2018, the defendants filed a motion to dismiss the complaint. On March 7, 2019, the court entered an order granting the defendants’ motion to dismiss. On March 28, 2019, the plaintiff filed a motion seeking leave to file a Second Consolidated Amended Complaint. On September 20, 2019, the court entered an order denying the plaintiff’s motion for leave to file a Second Consolidated Amended Complaint and dismissing the action with prejudice. On October 17, 2019, the plaintiff filed a notice of appeal seeking review of the court’s September 20, 2019 order. The plaintiff filed its opening brief with the United States Court of Appeals for the Fourth Circuit on January 6, 2020. The defendants filed their response brief on February 28, 2020, and the plaintiff filed its reply brief on March 27, 2020. The appeal is currently pending before the United States Court of Appeals for the Fourth Circuit. In addition, the Company may be party to certain lawsuits in the normal course of business. Furthermore, third parties may try to seek to impose liability on the Company in connection with the activities of its portfolio companies. While the outcome of any open legal proceedings, including those described above, cannot at this time be predicted with certainty, the Company does not expect that any reasonably possible losses arising from these matters will materially affect its financial condition or results of operations. Furthermore, in management's opinion, it is not possible to estimate a range of reasonably possible losses with respect to litigation contingencies. COVID-19 Developments During the three and nine months ended September 30, 2020, the spread of the Coronavirus and the COVID-19 pandemic had a significant impact on the U.S economy. To the extent the Company's portfolio companies are adversely impacted by the effects of the COVID-19 pandemic, it may have a material adverse impact on the Company's future net investment income, the fair value of its portfolio investments, its financial condition and the results of operations and financial condition of the Company's portfolio companies. 52 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) 8. FINANCIAL HIGHLIGHTS The following is a schedule of financial highlights for the nine months ended September 30, 2020 and 2019: Nine Months Ended September 30, 2020 2019 Per share data: Net asset value at beginning of period $ 11.66 $ 10.98 Net investment income(1)(4) 0.45 0.46 Net realized loss on investments / foreign currency transactions(1) (0.77) (0.02) Net unrealized appreciation on investments / foreign currency transactions(1) 0.03 0.50 Total increase (decrease) from investment operations(1) (0.29) 0.94 Dividends/distributions paid to stockholders from net investment income (0.48) (0.39) Purchases of shares in share repurchase plan 0.05 0.06 Loss on extinguishment of debt(1) (0.01) — Other(2) 0.04 (0.01) Net asset value at end of period $ 10.97 $ 11.58 Market value at end of period(3) $ 8.00 $ 10.15 Shares outstanding at end of period 47,961,753 49,418,542 Net assets at end of period $ 525,976,941 $ 572,444,980 Average net assets $ 513,677,913 $ 580,900,618 Ratio of total expenses, including loss on extinguishment of debt and provision for taxes, to average net assets (annualized)(4) 7.79 % 7.81 % Ratio of net investment income to average net assets (annualized) 5.65 % 5.36 % Portfolio turnover ratio (annualized) 91.95 % 71.57 % Total return(5) (16.51) % 17.08 % (1) Weighted average per share data—basic and diluted. (2) Represents the impact of the different share amounts used in calculating per share data as a result of calculating certain per share data based upon the weighted average basic shares outstanding during the period and certain per share data based on the shares outstanding as of a period end or transaction date. (3) Represents the closing price of the Company’s common stock on the last day of the period. (4) Does not include expenses of underlying investment companies, including joint ventures and short-term investments. (5) Total return is based on purchase of stock at the current market price on the first day and a sale at the current market price on the last day of each period reported on the table and assumes reinvestment of dividends at prices obtained by the Company's dividend reinvestment plan during the period. Total return is not annualized. 9. MVC ACQUISITION On August 10, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) among MVC Capital, Inc., a Delaware corporation (“MVC”), Mustang Acquisition Sub, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Acquisition Sub”), and Barings. The Merger Agreement provides that, on the terms and subject to the conditions set forth in the Merger Agreement, Acquisition Sub will merge with and into MVC, with MVC continuing as the surviving company and as a wholly-owned subsidiary of the Company (the “First Step”) and, immediately thereafter, MVC will merge with and into the Company, with the Company continuing as the surviving company (the “Second Step” and, together with the First Step, the “Merger”). The boards of directors of both the Company and MVC, including all of the respective independent directors, have approved the Merger Agreement and the transactions contemplated therein. The parties to the Merger Agreement intend the Merger to be treated as a “reorganization” within the meaning of Section 368(a)(1)(A) of the Code of 1986. In the First Step, each share of MVC common stock issued and outstanding immediately prior to the effective time of the First Step (excluding any shares cancelled pursuant to the Merger Agreement) will be converted into the right to receive (i) $0.39492 per share in cash, without interest, from Barings (such amount of cash, the “Cash Consideration”) and (ii) 0.94024 (the "Exchange Ratio," such ratio as may be adjusted pursuant to the Merger Agreement) of a validly issued, fully paid and non-assessable share of the Company's common stock, par value $0.001 per share (the “Share Consideration” and together with the Cash Consideration, the “Merger Consideration”). Pursuant to the Merger Agreement, total value of the consideration to be received by MVC stockholders at closing is subject to adjustment as set forth in the Merger Agreement and may be different than the estimated total consideration described herein depending on a number of factors, including the number of outstanding 53 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) shares of the Company's and MVC's common stock, the payment of tax dividends by MVC, undistributed investment company taxable income and undistributed net capital gains of MVC and changes of the Euro-to-U.S. dollar exchange rate relating to certain of MVC’s investments between April 30, 2020 and the closing date. Consummation of the First Step, which is currently anticipated to occur during the fourth quarter of fiscal year 2020, is subject to certain customary closing conditions, including (1) adoption of the Merger Agreement by a majority of the outstanding shares of MVC's common stock, (2) approval of the issuance of the Company's common stock in the First Step by a majority of the votes cast by the Company's stockholders on the matter, (3) approval of the issuance of the Company’s common stock in connection with the First Step at a price below the then-current net asset value per share of the Company common stock, if applicable, by the vote specified in Section 63(2)(A) of the 1940 Act, as amended, (4) the absence of certain legal impediments to the consummation of the Merger, (5) effectiveness of the registration statement for the Company's common stock to be issued as consideration in the First Step, (6) approval for listing on the New York Stock Exchange of the Company's common stock to be issued as consideration in the First Step, (7) subject to certain materiality standards, the accuracy of the representations and warranties and compliance with the covenants of each party to the Merger Agreement, and (8) required regulatory approvals (including expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act")). Early termination of the waiting period under the HSR Act was granted on September 30, 2020. In addition, the Company and MVC will take steps necessary to provide for the repayment at closing of MVC’s credit facilities and the redemption or assumption of MVC’s 6.25% senior notes due November 30, 2022. The Company is expected to account for the Merger as an asset acquisition in accordance with the asset acquisition method of accounting as detailed in ASC 805-50, Business Combinations-Related Issues . Under asset acquisition accounting, acquiring assets in groups not only requires ascertaining the cost of the asset (or net assets), but also allocating that cost to the individual assets (or individual assets and liabilities) that make up the group. Per ASC 805-50-30-1, the acquired assets (as a group) are recognized based on their cost to the acquiring entity, which generally includes transaction costs of the asset acquisition, and no gain or loss is recognized unless the fair value of noncash assets given as consideration differs from the assets carrying amounts on the acquiring entity’s records. ASC 805-50-30-2 goes on to say asset acquisitions in which the consideration given is cash are measured by the amount of cash paid. However, if the consideration given is not in the form of cash (that is, in the form of noncash assets, liabilities incurred, or equity interests issued), measurement is based on the cost to the acquiring entity or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and, thus, more reliably measured. If the fair value of the net assets to be acquired exceeds the fair value of the Merger Consideration to be paid by the Company, then the Company would recognize a deemed contribution from Barings in an amount up to approximately $7.0 million. If the fair value of net assets to be acquired exceeds the fair value of the Merger Consideration to be paid by the Company and by Barings, then the Company would also recognize a purchase accounting gain. Alternatively, if the fair value of the net assets to be acquired is less than the fair value of the portion of the Merger Consideration to be paid by the Company, then the Company would recognize a purchase accounting loss. The Company expects any potential gain or loss would be classified as unrealized on the statement of operations until the underlying assets are sold. The cost of the group of assets acquired in an asset acquisition is allocated to the individual assets acquired or liabilities assumed based on their relative fair values of net identifiable assets acquired other than “non-qualifying” assets (for example cash) and does not give rise to goodwill. The final allocation of the purchase price will be determined after the Merger is completed and after completion of a final analysis to determine the estimated relative fair values of the acquired assets and liabilities. 10. SUBSEQUENT EVENTS Subsequent to September 30, 2020, the Company made approximately $155.4 million of new commitments, of which $130.6 million closed and funded. The $130.6 million of investments consist of $128.5 million of first lien senior secured debt investments and a $2.1 million second lien senior secured term loan with a combined weighted average yield of 6.2%. In addition, the Company funded $8.7 million of previously committed delayed draw term loans. On October 15, 2020, the 2019 Notes were repaid in full. See Note 5 to our Unaudited Consolidated Financial Statements for information regarding the 2019 Notes. On November 4, 2020, the Company entered into a Note Purchase Agreement (the “November NPA”) governing the issuance of (1) $62.5 million in aggregate principal amount of Series B senior unsecured notes (“Series B Notes”) due November 2025 with a fixed interest rate of 4.25% per year and (2) $112.5 million in aggregate principal amount of Series C senior unsecured notes (“Series C Notes” and, collectively with the Series B Notes, the “November Notes”) due November 54 Barings BDC, Inc. Notes to Unaudited Consolidated Financial Statements — (Continued) 2027 with a fixed interest rate of 4.75% per year, in each case, to qualified institutional investors in a private placement. Each stated interest rate is subject to a step up of (x) 0.75% per year, to the extent the applicable November Notes do not satisfy certain investment grade conditions and/or (y) 1.50% per year, to the extent the ratio of secured debt to total assets exceeds specified thresholds, measured as of each fiscal quarter end. The November Notes were delivered and paid for on November 5, 2020. The Series B Notes will mature on November 4, 2025 and the Series C Notes will mature on November 4, 2027 unless redeemed, purchased or prepaid prior to such date by the Company or its affiliates in accordance with their terms. Interest on the November Notes will be due semiannually. In addition, the Company is obligated to offer to repay the November Notes at par if certain change in control events occur. The August 2025 Notes will be the Company's general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company. In connection with the November NPA, also on November 4, 2020, the Company amended the Note Purchase Agreement entered into on August 3, 2020 to reduce the aggregate principal amount of unissued Additional Notes from $50.0 million to $25.0 million. On November 9, 2020 the Board declared a quarterly distribution of $0.17 per share payable on December 2, 2020 to holders of record as of November 25, 2020. See Note 7 to our Unaudited Consolidated Financial Statements for information regarding the potential impact of the COVID-19 pandemic. To the extent the Company's portfolio companies are adversely impacted by the effects of the COVID-19 pandemic, it may have a material adverse impact on the Company's future net investment income, the fair value of its portfolio investments, its financial condition and the results of operations and financial condition of the Company's portfolio companies. 55