What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-08-09 compared with 2022-05-05 · 181 added, 135 removed, 619 unchanged (34% of the section changed)

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

The following discussion is designed to provide a better understanding of our unaudited consolidated financial statements for the three months ended March 31, 2022, including a brief discussion of our business, key factors that impacted our performance and a summary of our operating results.

The following discussion is designed to provide a better understanding of our unaudited consolidated financial statements for the three and six months ended June 30, 2022, including a brief discussion of our business, key factors that impacted our performance and a summary of our operating results.

The following discussion should be read in conjunction with the Unaudited Consolidated Financial Statements and the notes thereto included in Item 1 of this Quarterly Report on Form 10-Q, and the Consolidated Financial Statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2021.

40 unchanged sentences

From time to time, certain of our investments may have a form of interest, referred to as payment-in-kind, or PIK, interest, which is not paid currently but is instead accrued and added to the loan balance and paid at the end of the term.

As of March 31, 2022 and December 31, 2021, the weighted average yield on the principal amount of our outstanding debt investments other than non-accrual debt investments was approximately 7.3% and 7.2%, respectively.

The weighted average yield on the principal amount of all of our outstanding debt investments (including non-accrual debt investments) was approximately 6.8% and 6.9% as of March 31, 2022 and December 31, 2021, respectively.

As of June 30, 2022 and December 31, 2021, the weighted average yield on the principal amount of our outstanding debt investments other than non-accrual debt investments was approximately 7.6% and 7.2%, respectively.

The weighted average yield on the principal amount of all of our outstanding debt investments (including non-accrual debt investments) was approximately 7.2% and 6.9% as of June 30, 2022 and December 31, 2021, respectively.

Sierra Income Corporation Acquisition

11 unchanged sentences

The spread of the Coronavirus and the COVID-19 pandemic, and the related effect on the U.S.

and global economies, has had adverse consequences for the business operations of some of our portfolio companies and has adversely affected, and threatens to continue to adversely affect, our operations and the operations of Barings, including with respect to us.

Barings has taken proactive steps around COVID-19 to address the potential impacts on their people, clients, communities and everyone they come in contact with, directly or through their premises.

Protecting their employees and supporting the communities in which they live and work is a priority.

Barings has now adopted a hybrid working model globally while maintaining service levels to our partners and clients.

Barings’ return-to-office taskforce continues to monitor the COVID-19 situation globally and is prepared to adapt office working patterns as required to ensure the safety of its employees and clients who visit Barings office locations.

and global economies, has had adverse consequences for the business operations of some of our portfolio companies but no longer adversely affects our operations and the operations of Barings, including with respect to us.

Barings continues to monitor the COVID-19 situation globally and is prepared to adapt office working patterns as required to ensure the safety of its employees and clients who visit Barings office locations.

Barings’ cybersecurity policies are applied consistently when working remotely or in the office.

1 unchanged sentence

In addition, we have continued to make and originate, and expect to continue to make and originate, new loans.

We cannot predict the full impact of the COVID-19 pandemic, including its duration in the United States and worldwide and the magnitude of the economic impact of the outbreak, including with respect to the travel restrictions, business closures and other quarantine measures imposed on service providers and other individuals by various local, state, and federal governmental authorities, as well as non-U.S.

governmental authorities.

We are unable to predict the extent and duration of any business and supply-chain disruptions, the extent to which COVID-19 will negatively affect our portfolio companies’ operating results or the impact that such disruptions may have on our results of operations and financial condition.

Depending on the duration and extent of the disruption to the operations of our portfolio companies, certain portfolio companies could experience financial distress and possibly default on their financial obligations to us and their other capital providers.

Some of our portfolio companies may significantly curtail business operations, furlough or lay off employees and terminate service providers, and defer capital expenditures if subjected to prolonged and severe financial distress, which would likely impair their business on a permanent basis.

These developments would likely result in a decrease in the value of our investment in any such portfolio company.

We will continue to monitor the situation relating to the COVID-19 pandemic and guidance from U.S.

15 unchanged sentences

Under the terms of the Administration Agreement, Barings performs (or oversees, or arranges for, the performance of) the administrative services necessary for our operation, including, but not limited to, office facilities, equipment, clerical, bookkeeping and record keeping services at such office facilities and such other services as Barings, subject to review by the Board, will from time to time determine to be necessary or useful to perform its obligations under the Administration Agreement.

Barings also, on our behalf and subject to the Board’s oversight, arranges for the services of, and oversees, custodians, depositories, transfer agents, dividend disbursing agents, other stockholder servicing agents, accountants, attorneys, underwriters, brokers and dealers, corporate fiduciaries, insurers, banks and such other persons in any such other capacity deemed to be necessary or desirable.

deemed to be necessary or desirable.

Barings is responsible for the financial and other records that we are required to maintain and will prepare all reports and other materials required to be filed with the SEC or any other regulatory authority.

3 unchanged sentences

As a result, we are permitted under the 1940 Act to incur indebtedness at a level which is more consistent with a portfolio of senior secured debt.

As of March 31, 2022, our asset coverage ratio was 188.9%.

As of June 30, 2022, our asset coverage ratio was 181.4%.

Portfolio Investment Composition

The total value of our investment portfolio was $2,403.4 million as of March 31, 2022, as compared to $1,800.6 million as of December 31, 2021.

As of March 31, 2022, we had investments in 287 portfolio companies with an aggregate cost of $2,391.6 million.

The total value of our investment portfolio was $2,389.1 million as of June 30, 2022, as compared to $1,800.6 million as of December 31, 2021.

As of June 30, 2022, we had investments in 294 portfolio companies with an aggregate cost of $2,439.1 million.

As of December 31, 2021, we had investments in 212 portfolio companies with an aggregate cost of $1,787.8 million.

As of both March 31, 2022 and December 31, 2021, none of our portfolio investments represented greater than 10% of the total fair value of our investment portfolio.

As of March 31, 2022 and December 31, 2021, our investment portfolio consisted of the following investments:

As of both June 30, 2022 and December 31, 2021, none of our portfolio investments represented greater than 10% of the total fair value of our investment portfolio.

As of June 30, 2022 and December 31, 2021, our investment portfolio consisted of the following investments:

($ in thousands) Cost Percentage of

Portfolio Fair Value Percentage of

March 31, 2022:

June 30, 2022:

Senior debt and 1 st lien notes

16 unchanged sentences

Investment Activity

During the three months ended March 31, 2022, we made 22 new investments totaling $229.3 million, purchased $442.2 million of investments as part of the Sierra Acquisition, made investments in existing portfolio companies totaling $89.3 million and made additional investments in joint venture equity portfolio companies totaling $11.7 million.

We had four loans repaid totaling $12.4 million and received $7.5 million of portfolio company principal payments.

In addition, we sold $19.2 million of loans, recognizing a net realized gain on these transactions of $0.8 million, and sold $132.3 million of middle-market portfolio company debt investments to one of our joint ventures and realized a loss on these transactions of $0.2 million.

Lastly, we received proceeds related to the sale of equity investments totaling $1.6 million and recognized a net realized loss on such sales totaling $0.7 million.

During the three months ended March 31, 2021, we made 18 new investments totaling $172.2 million, made investments in existing portfolio companies totaling $73.2 million, made one new investment in a joint venture equity portfolio company totaling $4.5 million and made additional investments in existing joint venture equity portfolio companies totaling $25.0 million.

We had six loans repaid at par totaling $26.2 million and received $6.0 million of portfolio company principal payments.

In addition, we sold $57.1 million of loans, recognizing a net realized gain on these transactions of $2.4 million, and sold $94.7 million of middle-market portfolio company debt investments to one of our joint ventures and realized a gain on these transactions of $0.5 million.

Lastly, we received proceeds related to the sale of an equity investment totaling $5.9 million and recognized a net realized loss on such sale totaling $0.1 million.

Total portfolio investment activity for the three months ended March 31, 2022 and 2021 was as follows:

Three Months Ended

March 31, 2022:

During the six months ended June 30, 2022, we made 48 new investments totaling $495.2 million, purchased $442.2 million of investments as part of the Sierra Acquisition, made investments in existing portfolio companies totaling $173.5 million and made additional investments in joint venture equity portfolio companies totaling $13.8 million.

We had 21 loans repaid totaling $178.3 million, received $22.5 million of portfolio company principal payments and received $35.5 million of return of capital from our joint ventures.

In addition, we sold $101.7 million of loans, recognizing a net realized loss on these transactions of $6.1 million, and sold $132.3 million of middle-market portfolio company debt investments to one of our joint ventures and realized a loss on these transactions of $0.2 million.

We received proceeds related to the sale of equity investments totaling $1.7 million and recognized a net realized loss on such sales totaling $0.7 million.

Lastly, we exchanged a debt investment totaling $13.8 million in one portfolio company for equity totaling $13.9 million and realized a loss on such exchange of $0.8 million.

During the six months ended June 30, 2021, we made 40 new investments totaling $390.9 million, made investments in

existing portfolio companies totaling $112.9 million, made a net new joint venture equity investment totaling $5.5 million and

additional investments in joint venture equity portfolio companies totaling $30.0 million.

We had 13 loans repaid at par totaling

$92.6 million and received $25.6 million of portfolio company principal payments.

In addition, we sold $57.0 million of loans,

recognizing a net realized gain on these transactions of $2.4 million, and sold $250.4 million of middle-market portfolio

company debt investments to one of our joint ventures and realized a gain on these transactions of $1.4 million.

received proceeds related to the sale of equity investments totaling $5.9 million and recognized a net realized loss on such sales

totaling $0.5 million.

Total portfolio investment activity for the six months ended June 30, 2022 and 2021 was as follows:

Six Months Ended

June 30, 2022:

($ in thousands)

13 unchanged sentences

Fair value, end of period $ 1,550,204 $ 315,809 $ 70,385 $ 268,622 $ 92 $ 183,964 $ 2,389,076

Three Months Ended

March 31, 2021:

Six Months Ended

June 30, 2021:

($ in thousands)

15 unchanged sentences

Generally, when interest and/or principal payments on a loan become past due, or if we otherwise do not expect the borrower to be able to service its debt and other obligations, we 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.

As of March 31, 2022, we had seven portfolio companies with investments on non-accrual, the fair value of which was $42.9 million, which comprised 1.8% of the total fair value of our portfolio, and the cost of which was $71.3 million, which comprised 3.0% of the total cost of our portfolio.

As of June 30, 2022, we had seven portfolio companies with investments on non-accrual, the fair value of which was $20.0 million, which comprised 0.8% of the total fair value of our portfolio, and the cost of which was $71.1 million, which comprised 2.9% of the total cost of our portfolio.

As of December 31, 2021, we had two portfolio companies with investments on non-accrual, the fair value of which was $36.0 million, which comprised 2.0% of the total fair value of our portfolio, and the cost of which was $50.9 million, which comprised 2.9% of the total cost of our portfolio.

A summary of our non-accrual assets as of March 31, 2022 is provided below:

A summary of our non-accrual assets as of June 30, 2022 is provided below:

1888 Industrial Services, LLC

2 unchanged sentences

GAAP, we will not recognize interest income on our first lien senior secured term loan in 1888 for financial reporting purposes.

As of March 31, 2022, the cost and fair of our first lien senior secured term loan in 1888 was $0.4 million and $0.2 million, respectively.

As of June 30, 2022, the cost and fair value of our first lien senior secured term loan in 1888 was $0.4 million and zero, respectively.

Black Angus Steakhouse, LLC

2 unchanged sentences

GAAP, we will not recognize interest income on our PIK term loan in Black Angus for financial reporting purposes.

As of March 31, 2022, both the cost and fair value of our PIK term loan in Black Angus was $9.6 million.

As of June 30, 2022, both the cost and fair value of our PIK term loan in Black Angus was $9.6 million.

Charming Charlie LLC

2 unchanged sentences

GAAP, we will not recognize interest income on our debt investments in Charming Charlie for financial reporting purposes.

As of March 31, 2022, both the cost and fair value of our debt investments in Charming Charlie was zero.

As of June 30, 2022, both the cost and fair value of our debt investments in Charming Charlie was zero.

Custom Alloy Corporation

3 unchanged sentences

GAAP, we will not recognize interest income on our debt investment in Custom Alloy for financial reporting purposes.

As of March 31, 2022, the cost of our debt investment in Custom Alloy was $46.4 million and the fair value of such investment was $28.6 million.

As of June 30, 2022, the cost of our debt investment in Custom Alloy was $46.4 million and the fair value of such investment was $5.6 million.

Holland Acquisition Corp.

2 unchanged sentences

GAAP, we will not recognize interest income on our debt investments in Holland for financial reporting purposes.

As of March 31, 2022, both the cost and fair value of our debt investments in Holland was zero.

As of June 30, 2022, both the cost and fair value of our debt investments in Holland was zero.

Legal Solutions Holdings

3 unchanged sentences

GAAP, we will not recognize interest income on our debt investment in Legal Solutions for financial reporting purposes.

As of March 31, 2022, the cost of our debt investment in Legal Solutions was $10.1 million and the fair value of such investment was zero.

As of June 30, 2022, the cost of our debt investment in Legal Solutions was $10.1 million and the fair value of such investment was zero.

Path Medical LLC

2 unchanged sentences

GAAP, we will not recognize interest income on our debt investments in Path Medical for financial reporting purposes.

As of March 31, 2022, both the cost and fair value of our debt investments in Path Medical was $4.6 million.

As of June 30, 2022, the cost and fair value of our debt investments in Path Medical was $4.6 million and $4.7 million, respectively.

Results of Operations

Comparison of the three months ended March 31, 2022 and March 31, 2021

Operating results for the three months ended March 31, 2022 and 2021 were as follows:

(in thousands) March 31,

2022 March 31,

Comparison of the three and six months ended June 30, 2022 and June 30, 2021

Operating results for the three and six months ended June 30, 2022 and 2021 were as follows:

Six Months Ended Six Months Ended

(in thousands) June 30,

2022 June 30,

2021 June 30,

2022 June 30,

Total investment income $ 55,592 $ 33,153 $ 99,350 $ 63,747

4 unchanged sentences

Net realized gains (losses) (10,223) 343 (11,665) 2,182

Net unrealized appreciation 3,465 6,275

Net unrealized appreciation (depreciation) (44,654) 14,409 (41,188) 20,683

Net realized and unrealized gains (losses) on investments, credit support agreements and foreign currency borrowings (54,877) 14,752 (52,853) 22,865

Provision for taxes (1,890) (2) (1,890) (1)

Net increase in net assets resulting from operations $ (24,993) $ 29,308 $ (3,962) $ 51,796

3 unchanged sentences

Ended Three Months

($ in thousands) March 31,

2022 March 31,

Ended Six Months Ended Six Months Ended

($ in thousands) June 30,

2022 June 30,

2021 June 30,

2022 June 30,

Investment income:

5 unchanged sentences

Total investment income $ 55,592 $ 33,153 $ 99,350 $ 63,747

The change in total investment income for the three months ended March 31, 2022, as compared to the three months ended March 31, 2021, was primarily due to an increase in the average size of our portfolio and increased dividends from portfolio companies and joint venture investments.

The change in total investment income for the three and six months ended June 30, 2022, as compared to the three and six months ended June 30, 2021, was primarily due to an increase in the average size of our portfolio, increased dividends from portfolio companies and joint venture investments and an increase in acceleration of unamortized OID and unamortized loan origination fee income associated with repayments of loans.

The increase in the average size of our portfolio was largely due to the increased middle-market investment opportunities and the investments acquired as part of the Sierra Acquisition.

however, as the Sierra Acquisition did not close until late in the first quarter of 2022, we did not receive a full quarter of investment income from the acquired Sierra portfolio.

This increase was partial offset by a decrease in payment-in-kind (“PIK”) interest income and a decrease in acceleration of unamortized OID and unamortized loan origination fee income associated with repayments of loans.

For the three months ended March 31, 2022, dividends from portfolio companies and joint venture investments were $7.7 million, as compared to $0.1 million for the three months ended March 31, 2021.

The amount of our outstanding debt investments was $2,134.2 million as of March 31, 2022, as compared to $1,451.9 million as of March 31, 2021.

This increase was partially offset by a decrease in payment-in-kind (“PIK”) interest income.

For the three and six months ended June 30, 2022, dividends from portfolio companies and joint venture investments were $7.2 million and $14.9 million, respectively, as compared to $0.4 million and $0.5 million, respectively, for the three and six months ended June 30, 2021.

The amount of our outstanding debt investments was $2,162.5 million as of June 30, 2022, as compared to $1,463.6 million as of June 30, 2021.

This increase is in part due to the acquisition of investment assets in the Sierra Acquisition.

The weighted average yield on the principal amount of our outstanding debt investments other than non-accrual debt investments was 7.3% as of March 31, 2022, as compared to 7.2% as of March 31, 2021.

For the three months ended March 31, 2022, PIK interest income was $2.8 million, as compared to $3.2 million for the three months ended March 31, 2021.

For the three months ended March 31, 2022, acceleration of unamortized OID income and unamortized loan origination fees totaled $0.2 million, as compared to $0.4 million for the three months ended March 31, 2021.

The weighted average yield on the principal amount of our outstanding debt investments other than non-accrual debt investments was 7.6% as of June 30, 2022, as compared to 7.4% as of June 30, 2021.

For the three and six months ended June 30, 2022, acceleration of unamortized OID income and unamortized loan origination fees totaled $2.9 million and $3.1 million, respectively, as compared to $2.2 million and $2.6 million, respectively, for the three and six months ended June 30, 2021.

For the three and six months ended June 30, 2022, PIK interest income was $2.5 million and $5.3 million, respectively, as compared to $3.4 million and $6.5 million, respectively, for the three and six months ended June 30, 2021.

Operating Expenses

Ended Three Months

($ in thousands) March 31,

2022 March 31,

Ended Six Months Ended Six Months Ended

($ in thousands) June 30,

2022 June 30,

2021 June 30,

2022 June 30,

Operating expenses:

5 unchanged sentences

Interest and Other Financing Fees

Interest and other financing fees during the three months ended March 31, 2022 were attributable to borrowings under the February 2019 Credit Facility, the August 2025 Notes, the November Notes, the February Notes and the November 2026 Notes (each as defined below under “Liquidity and Capital Resources”).

Interest and other financing fees during the three months ended March 31, 2021 were attributable to borrowings under the February 2019 Credit Facility, the August 2025 Notes, the November Notes and the February Notes.

The increase in interest and other financing fees for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021, was primarily attributable to the issuance of the February Notes and the November 2026 Notes and increased borrowings under the February 2019 Credit Facility.

Interest and other financing fees during the three and six months ended June 30, 2022 were attributable to borrowings under the February 2019 Credit Facility, the August 2025 Notes, the November Notes, the February Notes and the November 2026 Notes (each as defined below under “Liquidity and Capital Resources”).

Interest and other financing fees during the three and six months ended June 30, 2021 were attributable to borrowings under the February 2019 Credit Facility, the August 2025 Notes, the November Notes and the February Notes.

The increase in interest and other financing fees for the three and six months ended June 30, 2022 as compared to the three and six months ended June 30, 2021, was primarily attributable to the issuance of the November 2026 Notes and increased borrowings under the February 2019 Credit Facility.

Base Management Fees

3 unchanged sentences

See Note 2 to our Unaudited Consolidated Financial Statements for additional information regarding the terms of the New Barings BDC Advisory Agreement (and, from January 1, 2021 to February 25, 2022, the terms of the Amended and Restated Advisory Agreement) and the fee arrangements thereunder.

For the three months ended March 31, 2022, the amount of Base Management Fee incurred was approximately $5.9 million.

For the three months ended March 31, 2021, the amount of Base Management Fee incurred was approximately $3.9 million.

The increase in the Base Management Fee for the three months ended March 31, 2022 versus the corresponding 2021 period is primarily related to the average value of gross assets increasing from $1,257.4 million as of the end of the two most recently completed calendar quarters prior to March 31, 2021 to $1,879.0 million as of the end of the two most recently completed calendar quarters prior to March 31, 2022.

For both the three months ended March 31, 2022 and 2021, the Base Management Fee rate was 1.250%.

For the three and six months ended June 30, 2022, the amount of Base Management Fee incurred was approximately $7.4 million and $13.3 million, respectively.

For the three and six months ended June 30, 2021, the amount of Base Management Fee incurred was approximately $4.9 million and $8.8 million, respectively.

The increase in the Base Management Fee for the three and six months ended June 30, 2022 versus the corresponding 2021 periods is primarily related to the average value of gross assets increasing from $1,565.2 million as of the end of the two most recently completed calendar quarters prior to June 30, 2021 to $2,361.8 million as of the end of the two most recently completed calendar quarters prior to June 30, 2022.

For both the three and six months ended June 30, 2022 and 2021, the Base Management Fee rate was 1.250%.

Incentive Fee

3 unchanged sentences

See Note 2 to our Unaudited Consolidated Financial Statements for additional information regarding the terms of the New Barings BDC Advisory Agreement and the fee arrangements thereunder.

For the three months ended March 31, 2022, the amount of income-based fee incurred was $4.8 million, as compared to $2.7 million for the three months ended March 31, 2021.

For the three and six months ended June 30, 2022, the amount of income-based fee incurred was zero and $4.8 million, respectively, as compared to $3.5 million and $6.2 million, respectively, for the three and six months ended June 30, 2021.

The Income-Based Fee is subject to a cap (the “Incentive Fee Cap”).

During the three months ended June 30, 2022, the incentive fee was zero due to the the Incentive Fee Cap.

The Incentive Fee Cap in any quarter is an amount equal to (a) 20% of the Cumulative Pre-Incentive Fee Net Return during the relevant Trailing Twelve Quarters less (b) the aggregate Income-Based Fee that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.

See Note 2 to our Unaudited Consolidated Financial Statements for additional information regarding the terms of the Incentive Fee Cap.

General and Administrative Expenses

4 unchanged sentences

See Note 2 to our Unaudited Consolidated Financial Statements for additional information regarding the Administration Agreement.

For the three months ended March 31, 2022, the amount of administration expense incurred and invoiced by Barings for expenses was approximately $1.0 million.

For the three months ended March 31, 2021, the amount of administration expense incurred and invoiced by Barings for expenses was approximately $0.5 million.

For the three and six months ended June 30, 2022, the amount of administration expense incurred and invoiced by Barings for expenses was approximately $0.9 million and $1.8 million, respectively.

For the three and six months ended June 30, 2021, the amount of administration expense incurred and invoiced by Barings for expenses was approximately $0.5 million and $1.0 million, respectively.

In addition to expenses incurred under the Administration Agreement, general and administrative expenses include Board fees, D&O insurance costs, as well as legal, valuation and accounting expenses.

Net Realized Gains (Losses)

Net realized gains (losses) during the three months ended March 31, 2022 and 2021 were as follows:

Net realized gains (losses) during the three and six months ended June 30, 2022 and 2021 were as follows:

Ended Three Months

($ in thousands) March 31,

2022 March 31,

Ended Six Months Ended Six Months Ended

($ in thousands) June 30,

2022 June 30,

2021 June 30,

2022 June 30,

Net realized gain (losses):

1 unchanged sentence

Affiliate investments — — 101 (77)

Control investments (813) — (813) —

Net realized gains (losses) on investments (7,514) 553 (7,663) 3,367

1 unchanged sentence

Net realized gains (losses) $ (10,223) $ 343 $ (11,665) $ 2,182

During the three months ended March 31, 2022, we recognized net realized losses totaling $1.4 million, which consisted primarily of a net loss on foreign currency transactions of $1.3 million.

During the three months ended March 31, 2021, we recognized net realized gains totaling $1.8 million, which consisted primarily of a net gain on our loan portfolio of $2.8 million partially offset by a net loss on foreign currency transactions of $1.0 million.

During the three months ended June 30, 2022, we recognized net realized losses totaling $10.2 million, which consisted primarily of a net loss on our loan portfolio of $6.7 million, a $0.8 million loss on the exchange of a debt investment in one portfolio company for equity, and a net loss on foreign currency transactions of $2.7 million.

During the six months ended June 30, 2022, we recognized net realized losses totaling $11.7 million, which consisted primarily a net loss on our loan portfolio of $6.9 million, a $0.8 million loss on the exchange of a debt investment in one portfolio company for equity, and a net loss on foreign currency transactions of $4.0 million.

During the three months ended June 30, 2021, we recognized net realized gains totaling $0.3 million, which consisted primarily of a net gain on our loan portfolio of $0.6 million partially offset by a net loss on foreign currency transactions of $0.2 million.

During the six months ended June 30, 2021, we recognized net realized gains totaling $2.2 million, which consisted primarily of a net gain on our loan portfolio of $3.4 million partially offset by a net loss on foreign currency transactions of $1.2 million.

Net Unrealized Appreciation (Depreciation)

Net unrealized appreciation (depreciation) during the three months ended March 31, 2022 and 2021 was as follows:

Net unrealized appreciation (depreciation) during the three and six months ended June 30, 2022 and 2021 was as follows:

Ended Three Months

($ in thousands) March 31,

2022 March 31,

Ended Six Months Ended Six Months Ended

($ in thousands) June 30,

2022 June 30,

2021 June 30,

2022 June 30,

Net unrealized appreciation (depreciation):

5 unchanged sentences

Foreign currency transactions 30,520 (650) 35,332 3,392

Net unrealized appreciation $ 3,465 $ 6,275

During the three months ended March 31, 2022, we recorded net unrealized appreciation totaling $3.5 million, consisting of net unrealized appreciation on our current portfolio of $0.1 million and net unrealized appreciation related to foreign currency transactions of $4.8 million, net of unrealized depreciation of $0.4 million on the MVC credit support agreement with Barings and net unrealized depreciation reclassification adjustments of $1.0 million related to the net realized gains on the sales / repayments of certain investments.

The net unrealized appreciation on our current portfolio of $0.1 million was driven primarily by credit or fundamental performance of investments of $27.8 million, partially offset by the impact of foreign currency exchange rates on investments of $4.7 million and broad market moves for investments of $23.1 million.

During the three months ended March 31, 2021, we recorded net unrealized appreciation totaling $6.3 million, consisting of net unrealized appreciation on our current portfolio of $6.4 million and net unrealized appreciation related to foreign currency transactions of $4.0 million, net of unrealized depreciation of $1.6 million on the MVC credit support agreement with Barings and net of unrealized depreciation reclassification adjustments of $2.6 million related to the net realized gains on the sales / repayments of certain investments.

The net unrealized appreciation on our current portfolio of $6.4 million was driven primarily by broad market moves for investments of $13.8 million, partially offset by depreciation from the credit or fundamental performance of investments of $3.0 million and the impact of foreign currency exchange rates on investments of $4.4 million.

Net unrealized appreciation (depreciation) $ (44,654) $ 14,409 $ (41,188) $ 20,683

During the three months ended June 30, 2022, we recorded net unrealized depreciation totaling $44.7 million, consisting of net unrealized depreciation on our current portfolio of $62.7 million, unrealized depreciation of $5.7 million on the MVC credit support agreement with Barings, unrealized depreciation of $7.7 million on the Sierra credit support agreement with Barings, net of unrealized appreciation reclassification adjustments of $0.9 million related to the net realized gains on the sales / repayments of certain investments and net unrealized appreciation related to foreign currency transactions of $30.5 million.

The net unrealized depreciation on our current portfolio of $62.7 million was driven primarily by credit or fundamental performance of investments of $5.8 million, the impact of foreign currency exchange rates on investments of $24.5 million and broad market moves for investments of $32.4 million.

During the six months ended June 30, 2022, we recorded net unrealized depreciation totaling $41.2 million, consisting of net unrealized depreciation on our current portfolio of $62.6 million, net unrealized depreciation of $6.1 million on the MVC credit support agreement with Barings, net unrealized depreciation of $7.7 million on the Sierra credit support agreement with Barings and unrealized depreciation reclassification adjustments of $0.1 million related to the net realized gains on the sales / repayments of certain investments, net of unrealized appreciation related to foreign currency transactions of $35.3 million.

The net unrealized depreciation on our current portfolio of $62.6 million was driven primarily by the impact of foreign currency exchange rates on investments of $29.2 million and broad market moves for investments of $55.4 million, partially offset by credit or fundamental performance of investments of $22.0 million.

During the three months ended June 30, 2021, we recorded net unrealized appreciation totaling $14.4 million, consisting of net unrealized appreciation on our current portfolio of $12.1 million, unrealized appreciation of $2.3 million on the credit support agreement with Barings and unrealized appreciation reclassification adjustments of $0.7 million related to the net realized gains on the sales / repayments of certain investments, net of unrealized depreciation related to foreign currency transactions of $0.6 million.

The net unrealized appreciation on the current portfolio of $12.1 million was driven primarily by broad market moves for investments of $7.8 million and the credit or fundamental performance of investments of $5.1 million, partially offset by the impact of foreign currency exchange rates on investments of $0.8 million.

During the six months ended June 30, 2021, we recorded net unrealized appreciation totaling $20.7 million, consisting of net unrealized appreciation on our current portfolio of $18.5 million, unrealized appreciation related to foreign currency transactions of $3.4 million and unrealized appreciation of $0.7 million on the credit support agreement with Barings, net of unrealized depreciation reclassification adjustments of $1.9 million related to the net realized gains on the sales / repayments of certain investments.

The net unrealized appreciation on the current portfolio of $18.5 million was driven primarily by broad market moves for investments of $21.7 million and the credit or fundamental performance of investments of $2.0 million, partially offset by the impact of foreign currency exchange rates on investments of $5.2 million.

Liquidity and Capital Resources

1 unchanged sentence

This “Liquidity and Capital Resources” section should be read in conjunction with “COVID-19 Developments” above, as well as with the notes to our Unaudited Consolidated Financial Statements.

For the three months ended March 31, 2022, we experienced a net increase in cash in the amount of $70.2 million.

For the six months ended June 30, 2022, we experienced a net increase in cash in the amount of $113.5 million.

During that period, our operating activities used $12.7 million in cash, consisting primarily of purchases of portfolio investments of $708.7 million, partially offset by net cash acquired from the acquisition of Sierra of $101.9 million and proceeds from sales or repayments of portfolio investments totaling $603.2 million.

In addition, our financing activities provided net cash of $126.2 million, consisting of net borrowings under the February 2019 Credit Facility (as defined below under “Financing Transactions”) of $184.7 million, partially offset by dividends paid in the amount of $41.5 million and share repurchases of $15.1 million.

As of March 31, 2022, we had $154.4 million of cash and foreign currencies on hand.

For the three months ended March 31, 2021, we experienced a net decrease in cash in the amount of $52.0 million.

As of June 30, 2022, we had $197.8 million of cash and foreign currencies on hand.

For the six months ended June 30, 2021, we experienced a net decrease in cash in the amount of $61.8 million.

During that period, our operating activities used $139.0 million in cash, consisting primarily of purchases of portfolio investments of $538.0 million and purchases of short-term investments of $217.6 million, partially offset by proceeds from sales of portfolio investments totaling $322.4 million and sales of short-term investments of $272.5 million.

In addition, our financing activities provided $33.1 million of cash, consisting of net proceeds of $149.8 million from the issuance of the February Notes, partially offset by net repayments under the February 2019 Credit Facility of $104.3 million and dividends paid in the amount of $12.4 million.

As of March 31, 2021, we had $40.5 million of cash and foreign currencies on hand.

In addition, our financing activities provided $77.2 million of cash, consisting of net proceeds of $149.8 million from the issuance of the February Notes (as defined below under “Financing Transactions”), partially offset by net repayments under the February 2019 Credit Facility of $47.1 million and dividends paid in the amount of $25.5 million.

As of June 30, 2021, we had $30.7 million of cash and foreign currencies on hand.

Financing Transactions

4 unchanged sentences

Effective on February 25, 2022, we increased aggregate commitments under the February 2019 Credit Facility to $965.0 million from $875.0 million pursuant to the accordion feature under the February 2019 Credit Facility, and the allowance for an increase in the total commitments increased to $1.5 billion from $1.2 billion subject to certain conditions and the satisfaction of specified financial covenants.

Effective on April 1, 2022, we increased aggregate commitments under the February 2019 Credit Facility to $1.1 billion from $965.0 million pursuant to the accordion feature under the February 2019 Credit Facility, which allows for an increase in the total commitments to an aggregate of $1.5 billion subject to certain conditions and the satisfaction of specified financial covenants.

We can borrow foreign currencies directly under the February 2019 Credit Facility.

9 unchanged sentences

In connection with entering into the February 2019 Credit Facility, we incurred financing fees of approximately $6.4 million, which will be amortized over the life of the February 2019 Credit Facility.

As of March 31, 2022, we were in compliance with all covenants under the February 2019 Credit Facility and had U.S.

As of June 30, 2022, we were in compliance with all covenants under the February 2019 Credit Facility and had U.S.

dollar borrowings of $537.5 million outstanding under the February 2019 Credit Facility with an interest rate of 3.198% (one month SOFR of 1.098%), borrowings denominated in Swedish kronas of 12.8kr million ($1.2 million U.S.

dollars) with an interest rate of 2.000% (one month STIBOR of 0.000%), borrowings denominated in British pounds sterling of £77.6 million

($102.1 million U.S.

dollars) with an interest rate of 2.250% (one month STIBOR of 0.250%), borrowings denominated in British pounds sterling of £77.6 million ($94.2 million U.S.

dollars) with an interest rate of 2.972% (one month SONIA of 0.972%), borrowings denominated in Australian dollars of A$53.1 million ($36.5 million U.S.

5 unchanged sentences

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.

As of March 31, 2022, the total fair value of the borrowings outstanding under the February 2019 Credit Facility was $757.2 million.

As of June 30, 2022, the total fair value of the borrowings outstanding under the February 2019 Credit Facility was $814.4 million.

See Note 5 to our Unaudited Consolidated Financial Statements for additional information regarding the February 2019 Credit Facility.

10 unchanged sentences

Upon the occurrence of an event of default, the holders of at least 66-2/3% in principal amount of the August 2025 Notes at the time outstanding may declare all August 2025 Notes then outstanding to be immediately due and payable.

As of March 31, 2022, we were in compliance with all covenants under the August 2020 NPA.

As of June 30, 2022, we were in compliance with all covenants under the August 2020 NPA.

The August 2025 Notes were offered in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended (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 March 31, 2022, the fair value of the outstanding August 2025 Notes was $49.7 million.

As of June 30, 2022, the fair value of the outstanding August 2025 Notes was $47.5 million.

The fair value determination of the August 2025 Notes was based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.

November Notes

unsecured notes due November 2027 (the “Series C Notes,” and, collectively with the Series B Notes, the “November Notes”) with a fixed interest rate of 4.75% per year, in each case, to qualified institutional investors in a private placement.

On November 4, 2020, we entered into a Note Purchase Agreement (the “November 2020 NPA”) governing the issuance of (1) $62.5 million in aggregate principal amount of Series B senior unsecured notes due November 2025 (the “Series B Notes”) 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 due November 2027 (the “Series C Notes,” and, collectively with the Series B Notes, the “November Notes”) 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 our secured debt to total assets exceeds specified thresholds, measured as of each fiscal quarter end.

3 unchanged sentences

In addition, we are obligated to offer to repay the November Notes at par (plus accrued and unpaid interest to, but not including, the date of prepayment) if certain change in control events occur.

Subject to the terms of the November 2020 NPA, we may redeem the Series B Notes and the Series C Notes in whole or in part at any time or from time to time at our option at par plus accrued interest to the prepayment date and, if redeemed on or before May 4, 2025, with respect to the Series B Notes, or on or before May 4, 2027, with respect to the Series C Notes, a make-whole premium .

before May 4, 2025, with respect to the Series B Notes, or on or before May 4, 2027, with respect to the Series C Notes, a make-whole premium .

The November Notes are guaranteed by certain of our subsidiaries, and are our general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by us.

2 unchanged sentences

Upon the occurrence of an event of default, the holders of at least 66-2/3% in principal amount of the November Notes at the time outstanding may declare all November Notes then outstanding to be immediately due and payable.

As of March 31, 2022, we were in compliance with all covenants under the November 2020 NPA.

As of June 30, 2022, we were in compliance with all covenants under the November 2020 NPA.

The November Notes were offered in reliance on Section 4(a)(2) of the Securities Act.

The November 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 March 31, 2022, the fair value of the outstanding Series B Notes and the Series C Notes was $61.1 million and $109.0 million, respectively.

As of June 30, 2022, the fair value of the outstanding Series B Notes and the Series C Notes was $58.4 million and $101.7 million, respectively.

The fair value determinations of the Series B Notes and Series C Notes were based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.

13 unchanged sentences

and (c) not permitting our net debt to equity ratio to exceed 2.0x, measured as of each fiscal quarter end.

The February 2021 NPA 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 other indebtedness or that of our subsidiary guarantors, certain judgements and orders, and certain events of bankruptcy.

indebtedness or that of our subsidiary guarantors, certain judgements and orders, and certain events of bankruptcy.

Upon the occurrence of certain events of default, the holders of at least 66-2/3% in principal amount of the February Notes at the time outstanding may declare all February Notes then outstanding to be immediately due and payable.

As of March 31, 2022, we were in compliance with all covenants under the February 2021 NPA.

As of June 30, 2022, we were in compliance with all covenants under the February 2021 NPA.

The February Notes were offered in reliance on Section 4(a)(2) of the Securities Act.

The February 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 March 31, 2022, the fair value of the outstanding Series D Notes and the Series E Notes was $75.5 million and $65.2 million, respectively.

As of June 30, 2022, the fair value of the outstanding Series D Notes and the Series E Notes was $71.6 million and $60.2 million, respectively.

The fair value determinations of the Series D Notes and Series E Notes were based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.

12 unchanged sentences

The November 2026 Notes have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.

As of March 31, 2022, the fair value of the outstanding November 2026 Notes was $320.9 million.

As of June 30, 2022, the fair value of the outstanding November 2026 Notes was $298.9 million.

The fair value determinations of the November 2026 Notes were based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.

2 unchanged sentences

Any repurchases pursuant to the authorized program will occur during the 12-month period that commenced upon the filing of our quarterly report on Form 10-Q for the quarter ended March 31, 2021, which occurred on May 6, 2021, and will be made in accordance with applicable legal, contractual and regulatory requirements.

During the three months ended March 31, 2022, we repurchased a total of 207,677 shares of our common stock in the open market under the authorized program at an average price of $10.14 per share, including broker commissions.

The MVC repurchase program terminated on May 6, 2022.

During the six months ended June 30, 2022, we repurchased a total of 207,677 shares of common stock in the open market under the authorized program at an average price of $10.14 per share, including broker commissions.

In connection with the completion of the acquisition of Sierra, we committed to make open-market purchases of shares of our common stock in an aggregate amount of up to $30.0 million at then-current market prices at any time shares trade below 90% of our then most recently disclosed NAV per share.

Any repurchases pursuant to the authorized program will occur during the 12-month period commencing on April 1, 2022 and are expected to be made in accordance with a Rule 10b5-1 purchase plan that qualifies for the safe harbors provided by Rules 10b5-1 and 10b-18 under the Exchange Act, as well as subject to compliance with our covenant and regulatory requirements.

During the six months ended June 30, 2022, we repurchased a total of 1,309,442 shares of common stock in the open market under the authorized program at an average price of $9.93 per share, including broker commissions.

Distributions to Stockholders

20 unchanged sentences

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 our ICTI for the year of

accrual, we may be required to make a distribution to our stockholders in order to satisfy the minimum distribution requirements, even though we 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.

Because any original issue discount or other amounts accrued will be included in our ICTI for the year of accrual, we may be required to make a distribution to our stockholders in order to satisfy the minimum distribution requirements, even though we will not have received and may not ever receive any corresponding cash amount.

excludes net unrealized appreciation or depreciation, as investment gains or losses are not included in taxable income until they are realized.

Recent Developments

Subsequent to March 31, 2022, we made approximately made approximately $174.4 million of new commitments, of which $141.0 million closed and funded.

Subsequent to June 30, 2022, we made approximatel y $215.4 million of new commitments, of which $171.5 million closed and funded.

The $171.5 million of investments consists of $159.9 million of first lien senior secured debt investments, $10.

1 unchanged sentence

The weighted average yield of the debt investments was 8.2%.

In addition, the Company funded $15.0 million of previously committed delayed draw term loans .

On May 5, 2022, the Board declared a quarterly distribution of $0.24 per share payable on June 15, 2022 to holders of record as of June 8, 2022.

In addition, we funded $11.6 million of previously committed delayed draw term loans.

On August 9, 2022, the Board declared a quarterly distribution of $0.24 per share payable on September 14, 2022 to holders of record as of September 7, 2022.

Critical Accounting Policies and Use of Estimates

10 unchanged sentences

Our current valuation policy and processes were established by Barings and have been approved by the Board.

As of March 31, 2022, our investment portfolio, valued at fair value in accordance with the Board-approved valuation policies, represented approximately 182% of our total net assets, as compared to approximately 243% of our total net assets as of December 31, 2021.

As of June 30, 2022, our investment portfolio, valued at fair value in accordance with the Board-approved valuation policies, represented approximately 191% of our total net assets, as compared to approximately 243% of our total net assets as of December 31, 2021.

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.

33 unchanged sentences

A range of values will be provided by the valuation provider and Barings will determine the point within that range that it will use in making valuation recommendations to the Board, and will report to the Board on its rationale for each such determination.

Barings uses its internal valuation model as a comparison point to validate the price range

provided by the valuation provider and, where applicable, in determining the point within that range that it will use in making valuation recommendations to the Board.

Barings uses its internal valuation model as a comparison point to validate the price range provided by the valuation provider and, where applicable, in determining the point within that range that it will use in making valuation recommendations to the Board.

If Barings’ pricing committee disagrees with the price range provided, it may make a fair value recommendation to the Board that is outside of the range provided by the independent valuation provider, and will notify the Board of any such override and the reasons therefore.

1 unchanged sentence

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.

Pursuant to these procedures, the Board determines in good faith whether our investments were valued at fair value in accordance with our valuation policies and procedures and the 1940 Act based on, among other things, the input of Barings, our Audit Committee and the independent valuation firm.

these procedures, the Board determines in good faith whether our investments were valued at fair value in accordance with our valuation policies and procedures and the 1940 Act based on, among other things, the input of Barings, our Audit Committee and the independent valuation firm.

The SEC has adopted new Rule 2a-5 under the 1940 Act.

27 unchanged sentences

Such fees include loan prepayment penalties, advisory, loan amendment and other fees, and are recorded as investment income when earned.

Fee income for the three months ended March 31, 2022 and 2021 was as follows:

($ in thousands) March 31, 2022 March 31, 2021

Fee income for the three and six months ended June 30, 2022 and 2021 was as follows:

Six Months Ended

($ in thousands) June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

Recurring Fee Income:

22 unchanged sentences

Since commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements.

As of March 31, 2022 and December 31, 2021, we believed that we had adequate financial resources to satisfy our unfunded commitments.

The balances of unused commitments to extend financing as of March 31, 2022 and December 31, 2021 were as follows:

As of June 30, 2022 and December 31, 2021, we believed that we had adequate financial resources to satisfy our unfunded commitments.

The balances of unused commitments to extend financing as of June 30, 2022 and December 31, 2021 were as follows:

Portfolio Company

($ in thousands) Investment Type March 31, 2022 December 31, 2021

($ in thousands) Investment Type June 30, 2022 December 31, 2021

1888 Industrial Services, LLC(1)(2) Revolver $ 189 $ —

1 unchanged sentence

Acclime Holdings HK Limited(1) Delayed Draw Term Loan — 110

Accurus Aerospace Corporation(1)(2) Revolver 2,305 —

Air Comm Corporation, LLC(1) Delayed Draw Term Loan 11 11

1 unchanged sentence

Amtech Software(1) Delayed Draw Term Loan 1,527 2,727

Amtech Software(1) Revolver 682 682

Portfolio Company

($ in thousands) Investment Type March 31, 2022 December 31, 2021

AnalytiChem Holding GmbH(1)(2)(3) Delayed Draw Term Loan 6,073 6,207

($ in thousands) Investment Type June 30, 2022 December 31, 2021

Amtech Software(1) Revolver 682 682

AnalytiChem Holding GmbH(1)(2)(3) Incremental Term Loan 917 6,207

AnalytiChem Holding GmbH(1)(2)(3) Bridge Revolver 359 —

Aquavista Watersides 2 LTD(1)(2)(4) Bridge Revolver 451 503

7 unchanged sentences

BigHand UK Bidco Limited(1)(2)(4) Acquisition Facility — 378

Black Angus Steakhouses, LLC(1) Acquisition Facility 417 —

Black Angus Steakhouses, LLC(1) Delayed Draw Term Loan 417 —

Bounteous, Inc.(1) Delayed Draw Term Loan 2,840 2,840

3 unchanged sentences

British Engineering Services Holdco Limited(1)(2)(4) Bridge Revolver — 613

Brook & Whittle Holding Corp.(1) Delayed Draw Term Loan 852 —

CAi Software, LLC(1)(2) Revolver 943 943

Canadian Orthodontic Partners Corp.(1)(2)(6) Acquisition Facility 120 167

Canadian Orthodontic Partners Corp.(1)(2)(6) Delayed Draw Term Loan 116 167

Centralis Finco S.a.r.l.(1)(2)(3) Acquisition Facility 424 461

5 unchanged sentences

Command Alkon (Project Potter Buyer, LLC)(1) Delayed Draw Term Loan — 6,018

Comply365, LLC(1)(2) Revolver 1,100 —

Coyo Uprising GmbH(1)(2)(3) Delayed Draw Term Loan 821 894

16 unchanged sentences

Finexvet(1)(2)(3) Acquisition Facility 230 —

Portfolio Company

($ in thousands) Investment Type June 30, 2022 December 31, 2021

Footco 40 Limited(1)(2)(4) Delayed Draw Term Loan 773 —

FragilePak LLC(1) Delayed Draw Term Loan 2,354 2,354

GPZN II GmbH(1)(2)(3) CAF Term Loan 549 —

Heartland Veterinary Partners, LLC(1) Delayed Draw Term Loan 267 657

Portfolio Company

($ in thousands) Investment Type March 31, 2022 December 31, 2021

Heavy Construction Systems Specialists, LLC(1) Revolver 2,632 2,632

16 unchanged sentences

Lambir Bidco Limited(1)(2)(3) Delayed Draw Term Loan 1,730 1,881

Lattice Group Holdings Bidco Limited(1)(2) Delayed Draw Term Loan 354 —

LeadsOnline, LLC(1) Revolver 2,256 —

21 unchanged sentences

PDQ.Com Corporation(1) Delayed Draw Term Loan 7,753 10,948

Perimeter Master Note Business Trust(1)(2) Series 2022-One Class A 73 —

Portfolio Company

($ in thousands) Investment Type June 30, 2022 December 31, 2021

Perimeter Master Note Business Trust(1)(2) Series 2022-One Class B 73 —

Perimeter Master Note Business Trust(1)(2) Series 2022-One Class C 73 —

Perimeter Master Note Business Trust(1)(2) Series 2022-One Class D 73 —

Perimeter Master Note Business Trust(1)(2) Series 2022-One Class E 3,709 —

Polara Enterprises, L.L.C.(1) Revolver 474 545

3 unchanged sentences

Protego Bidco B.V.(1)(2)(3) Delayed Draw Term Loan 776 844

PSP Intermediate 4, LLC(1)(2)(3) Delayed Draw Term Loan 712

QPE7 SPV1 BidCo Pty Ltd(1)(2)(5) Acquisition Term Loan — 373

Portfolio Company

($ in thousands) Investment Type March 31, 2022 December 31, 2021

RA Outdoors, LLC(1)(2) Revolver 1,235 —

3 unchanged sentences

Riedel Beheer B.V.(1)(2)(3) Delayed Draw Term Loan 141 153

Sanoptis S.A.R.L.(1)(3) Acquisition Capex Facility 7,482 —

Scaled Agile, Inc.(1) Delayed Draw Term Loan 416 416

Scaled Agile, Inc.(1) Revolver 336 336

Scout Bidco B.V.(1)(3) Revolver 1,009 —

Scout Bidco B.V.(1)(2)(3) Delayed Draw Term Loan 2,223 —

Security Holdings B.V.(1)(3) Delayed Draw Term Loan 2,091 2,274

Security Holdings B.V.(1)(3) Revolver 1,045 1,137

Sereni Capital NV(1)(2)(3) Revolver 53 —

Sereni Capital NV(1)(2)(3) Term Loan 376 —

Smartling, Inc.(1) Delayed Draw Term Loan 1,978 2,353

16 unchanged sentences

The Hilb Group, LLC(1)(2) Delayed Draw Term Loan 2,345 2,773

Thermacell Repellents, Inc.(1) Revolver 605 —

TPC Group, Inc.(1)(2) Revolver 34,322 —

Transit Technologies LLC(1)(2) Delayed Draw Term Loan — 1,857

2 unchanged sentences

Turbo Buyer, Inc.(1) Delayed Draw Term Loan 2,130 —

Union Bidco Limited(1)(4) Acquisition Facility 151 —

Portfolio Company

($ in thousands) Investment Type June 30, 2022 December 31, 2021

United Therapy Holding III GmbH(1)(2)(3) Acquisition Facility 1,588 —

USLS Acquisition, Inc.(f/k/a US Legal Support, Inc.)(1)(2) Delayed Draw Term Loan 3,820 —

2 unchanged sentences

W2O Holdings, Inc.(1) Delayed Draw Term Loan 2,622 3,832

West Dermatology, LLC(1) Revolver 552 —

West Dermatology, LLC(1) Delayed Draw Term Loan 3,352 —

West Dermatology, LLC(1) PIK Delayed Draw Term Loan 144 —

Woodland Foods, Inc.(1) Revolver 1,465 2,070

Xeinadin Bidco Limited(1)(2)(4) CAF Term Loan 5,986 —

ZB Holdco LLC(1) Revolver 845 —

22 unchanged sentences

Under these guarantee arrangements, payments may be required to be made to third parties if such guarantees are called upon or if the portfolio companies were to default on their related obligations, as applicable.

As of March 31, 2022 and December 31, 2021, we had guaranteed €9.9 million ($11.0 million U.S.

As of June 30, 2022 and December 31, 2021, we had guaranteed €9.9 million ($10.3 million U.S.

dollars and $11.3 million U.S.

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis