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Item 7. Management’s Discussion and Analysis

2021-03-04 compared with 2020-02-28 · 162 added, 72 removed, 344 unchanged (40% of the section changed)

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The Adviser may waive its right to receive all or a portion of any Reimbursement Payment in any particular calendar quarter, so that such Reimbursement Payment may be reimbursable in a future calendar quarter.

We may, but are not required to, enter into interest rate, foreign exchange or other derivative agreements to hedge interest rate, currency, credit or other risks, but we do not generally intend to enter into any such derivative agreements for speculative purposes.

Any derivative agreements entered into for speculative purposes are not expected to be material to our business or results of operations.

These hedging activities, which will be in compliance with applicable legal and regulatory

requirements, may include the use of futures, options and forward contracts.

We will bear the costs incurred in connection with entering into, administering and settling any such derivative contracts.

There can be no assurance any hedging strategy we employ will be successful.

Portfolio and Investment Activity

For the year ended December 31, 2019, we acquired $3,298.8 million aggregate principal amount of investments (including $173.0 million of remaining unfunded commitments), $3,243.2 million of which was first lien debt, $42.1 million of which was second lien debt and $13.5 million of which was equity.

For the year ended December 31, 2020, we acquired $4,912.8 million aggregate principal amount of investments (including $580.2 million of unfunded commitments), $4,729.6 million of which was first lien debt, $35.4 million of which was second lien debt, $129.9 million of which was unsecured debt and $17.9 million of which was equity.

For the year ended December 31, 2019, we acquired $3,298.8 million aggregate principal amount of investments (including $173.0 million of unfunded commitments), $3,243.2 million of which was first lien debt, $42.1 million of which was second lien debt and $13.5 million of which was equity.

For the year ended December 31, 2018, we acquired $616.9 million aggregate principal amount of investments (including $54.7 million of unfunded commitments), $610.5 million of which was first lien debt and $6.4 million of which was second lien debt.

Our investment activity is presented below (information presented herein is at amortized cost unless otherwise indicated) (dollar amounts in thousands):

For the Year Ended December 31, 2019 For the Year Ended December 31, 2018

For the Year Ended December 31,

2020 2019 2018

Total investments, beginning of period $ 3,067,767 $ 548,753 $ —

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Second lien debt investments 35,352 42,083 6,381

Equity investments 13,487 —

Unsecured debt 129,933 — —

Equity 17,852 13,487 —

Total $ 4,619,525 $ 3,160,377 $ 561,830

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Second lien debt investments (18,473) (14,681) —

Equity investments $ — —

Unsecured debt (131,629) — —

Equity (715) — —

Total $ (2,074,506) $ (572,830) $ (432)

Number of portfolio companies 81 56 61

Weighted average yield on debt and income producing investments, at

amortized cost (1)(2)

Weighted average yield on debt and income producing investments, at amortized cost (1)(2)

7.70 % 8.64 % 8.70 %

Weighted average yield on debt and income producing investments, at

fair value (1)(2)

Weighted average yield on debt and income producing investments, at fair value (1)(2)

7.68 % 8.57 % 8.76 %

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Percentage of debt investments bearing a fixed rate — % — % — %

(1) Computed as (a) the annual stated interest rate or yield plus the annual accretion of discounts or less the annual amortization of premiums, as applicable, on accruing debt included in such securities, divided by (b) total first lien and second lien debt (at fair value or cost, as applicable) included in such securities.

(1) Computed as (a) the annual stated interest rate or yield plus the annual accretion of discounts or less the annual amortization of premiums, as applicable, on accruing debt included in such securities, divided by (b) total debt investments (at fair value or cost, as applicable) included in such securities.

Actual yields earned over the life of each investment could differ materially from the yields presented above.

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The weighted average total portfolio yield at fair value was 7.64%, 8.53% and 8.76%, respectively.

The composition of our investment portfolio at cost and fair value was as follows (dollar amounts in thousands):

Our investments consisted of the following (dollar amounts in thousands):

December 31, 2020 December 31, 2019

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Second lien debt 48,979 50,199 0.90 32,782 32,419 1.05

Equity Investments 13,487 13,920 0.45 — — —

Equity 32,942 32,844 0.59 13,487 13,920 0.45

Total $ 5,575,482 $ 5,585,942 100.00 % $ 3,067,767 $ 3,092,440 100.00 %

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The following table represents our operating results (dollar amounts in thousands):

For the Year Ended December 31, 2019 For the Year Ended December 31, 2018

For The Year Ended December 31,

2020 2019 2018

Total investment income $ 389,641 $ 148,048 $ 3,174

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Net increase (decrease) in net assets resulting from operations $ 218,638 $ 106,206 $ (2,944)

Net increase (decrease) in net assets resulting from operations can vary from period to period as a result of various factors, including acquisitions, the level of new investment commitments, the recognition of realized gains and losses and changes in unrealized appreciation and depreciation on the investment portfolio.

As a result, comparisons may not be meaningful.

Investment Income

Investment income was as follows (dollar amounts in thousands):

For the Year Ended December 31, 2019 For the Year Ended December 31, 2018

For The Year Ended December 31,

2020 2019 2018

Interest income $ 381,797 $ 146,380 $ 3,174

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Total investment income $ 389,641 $ 148,048 $ 3,174

For the year ended December 31, 2019, total investment income (which includes prepayment premiums and accelerated accretion of upfront loan origination fees and unamortized discounts of $1.6 million and $2.1 million, respectively, which are included within interest income in the Consolidated Statements of Operations) increased from the prior year primarily driven by our deployment of capital and increased invested balance of our investments and the fact that we had a full year of operations compared to a partial period in the prior year.

The size of our investment portfolio at fair value increased from $545.3 million at December 31, 2018 to $3,092.4 million at December 31, 2019.

With the exception of three equity investments (which represented 0.45% of the total fair value of the portfolio), all investments were income producing senior secured debt investments.

There were no loans on non-accrual status as of December 31, 2019 and December 31, 2018.

Total investment income increased to $389.6 million for the year ended December 31, 2020 from $148.0 million in the prior year primarily driven by our deployment of capital and the increased balance of our investments, higher level of prepayment related income, partially offset by lower weighted average yield on our investments.

The size of our investment portfolio at fair value increased to $5,585.9 million at December 31, 2020 from $3,092.4 million at December 31, 2019.

Additionally, for the year ended December 31, 2020, we accrued $48.9 million of non-recurring income (e.g.

prepayment premiums, accelerated accretion of upfront loan origination fees and unamortized discounts and ticking fees) as compared to $3.7 million in the prior year.

Total investment income increased to $148.0 million for the year ended December 31, 2019 from $3.2 million in the prior year primarily driven by our deployment of capital, increased balance of our investments and a full year of operations as compared to the partial period in the prior year.

The size of our investment portfolio at fair value increased to $3,092.4 million at December 31, 2019 from $545.3 million at December 31, 2018.

Additionally, for the year ended December 31, 2019, we

accrued $3.7 million of non-recurring income (e.g.

prepayment premiums, accelerated accretion of upfront loan origination fees and unamortized discounts and ticking fees) as compared to $0.0 million in the prior year.

The COVID-19 pandemic could cause operational and/or liquidity issues at our portfolio companies which could restrict their ability to make cash interest payments.

Additionally, we may experience full or partial losses on our investments which may ultimately reduce our investment income in future periods.

Expenses were as follows (dollar amounts in thousands):

For the Year Ended December 31, 2019 For the Year Ended December 31, 2018

For The Year Ended December 31,

2020 2019 2018

Interest expense $ 65,949 $ 35,431 $ 1,351

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Net expenses (including excise tax expense) $ 150,060 $ 74,194 $ 1,887

The increase in interest expense for the year ended December 31, 2019 compared to the prior year, was driven by increased borrowings under our credit facilities related to increased deployment of capital for investments and the fact that we had a full year of operations compared to a partial period in the prior year.

The average principal debt outstanding increased to $776.6 million at December 31, 2019 from $162.0 million at December 31, 2018.

The increase in management fees and income based incentive fees for the year ended December 31, 2019 compared to the prior year were driven by our deployment of capital which resulted in a higher level of investments (increased to $3,092.4 million at December 31, 2019 from $545.3 million at December 31, 2018) and pre-incentive fee net investment income.

We accrued capital gains incentive fees of $4.2 million in the current year as compared to $0.0 million in the prior year as a result of net realized and unrealized gains as of December 31, 2019.

However, none of this amount is payable as of December 31, 2019 under the investment advisory agreement.

Interest Expense

Total interest expense (including unused fees and other debt financing expenses), increased to $65.9 million for the year ended December 31, 2020 from $35.4 million in the prior year primarily driven by increased borrowings under our credit facilities and our unsecured bond issuances.

The average principal debt outstanding increased to $1,902.7 million for the year ended December 31, 2020 from $776.6 million in the prior year, partially offset by a decrease in our weighted average interest rate to 3.26% for the year ended December 31, 2020 from 4.36% in the prior year.

Total interest expense (including unused fees and other debt financing expenses), increased to $35.4 million for the year ended December 31, 2019 from $1.4 million in the prior year primarily driven by increased borrowings under our credit facilities related to increased deployment of capital for investments and a full year of operations as compared to a partial period in the prior year.

The average principal debt outstanding increased to $776.6 million for the year ended December 31, 2019 from $162.0 million in the prior year, partially offset by a decrease in our weighted average interest rate to 4.36% for the year ended December 31, 2019 from 5.42% in the prior year.

Management Fees

Management fees increased to $32.9 million for the year ended December 31, 2020 from $12.6 million in the prior year primarily due to an increase in gross assets.

Our total gross assets increased to $5,950.9 million at December 31, 2020 from $3,190.1 million at December 31, 2019.

Management fees increased to $12.6 million for the year ended December 31, 2019 from $0.3 million in the prior year primarily due to an increase in gross assets.

Our total gross assets increased to $3,190.1 million at December 31, 2019 from $574.7 million at December 31, 2018.

Income Based Incentive Fees

Income based incentive fees increased to $42.0 million for the year ended December 31, 2020 from $13.8 million in the prior year primarily due to our deployment of capital.

Pre-incentive fee net investment income increased to $279.9 million for the year ended December 31, 2020 from $92.1 million in the prior year.

Income based incentive fees increased to $13.8 million for the year ended December 31, 2019 from $0.0 million in the prior year primarily due to our deployment of capital and a full year of operations as compared to a partial period in the prior year which resulted in higher pre-incentive fee income returns.

Capital Gains Based Incentive Fees

We accrued capital gains incentive fees of $(3.1) million for the year ended December 31, 2020 compared to $4.2 million for the prior year.

The reversal of previously accrued incentive fees was attributable to net realized and unrealized losses in the current year.

The accrual for any capital gains incentive fee under U.S.

GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less in the prior period.

If such cumulative amount is negative, then there is no accrual.

Other Expenses

Organization costs and offering costs include expenses incurred in our initial formation and our Private Offering.

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Other general and administrative expenses include insurance, filing, research, our sub-administrator, subscriptions and other costs.

The increase in professional fees, administrative service fees and other general and administrative expenses for the year ended December 31, 2019 compared to the prior year was primarily driven by the deployment of capital and the fact that we had a full year of operations in the current year compared to a partial period in the prior year.

Total other expenses increased to $10.9 million for the year ended December 31, 2020 from $7.9 million in the prior year primarily driven by an increase in certain general and administrative expenses and administrative service expense in the prior year.

The increase in costs was attributable to servicing a growing investment portfolio.

Total other expenses increased to $7.9 million for the year ended December 31, 2019 from $1.9 million in the prior year primarily driven by an increase in costs associated with servicing a growing investment portfolio and a full year of operations compared to a partial period in the prior year.

The Adviser may elect to make Expense Payments on our behalf, subject to future Reimbursement Payments pursuant to the Expense Support Agreement described above in “— Key Components of Our Results of Operations—Expenses .”

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To the extent that we determine that our estimated current year annual taxable income will be in excess of estimated current year dividend distributions from such income, we will accrue excise tax on estimated excess taxable income.

For the years ended December 31, 2019 and 2018, we incurred $0.5 million and $0.1 million, respectively, of U.S.

For the years ended December 31, 2020, 2019 and 2018, we incurred $0.5 million, $0.5 million and $0.1 million, respectively, of U.S.

federal excise tax.

Net Unrealized Gain (Loss)

We fair value our portfolio investments quarterly and any changes in fair value are recorded as unrealized gains or losses.

Net unrealized gain (loss) was comprised of the following (dollar amounts in thousands):

For the Year Ended December 31, 2019 For the Year Ended December 31, 2018

For The Year Ended December 31,

2020 2019 2018

Net unrealized gain (loss) on investments $ (16,593) $ 28,173 $ (3,428)

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Net unrealized gain (loss) on investments $ (16,582) $ 28,329 $ (3,650)

For the year ended December 31, 2019, the net unrealized gains on investments were primarily driven by increases in the value of our quoted loan portfolio and non-quoted loan portfolio of $22.8 million and $5.3 million, respectively.

For the year ended December 31, 2018, the net unrealized losses on investments were primarily driven by decreases in the value of our quoted loan portfolio and non-quoted loan portfolio of $2.4 million and $1.0 million, respectively.

For the year ended December 31, 2020, the net unrealized loss was primarily driven by a decrease in fair value of our debt investments as compared to December 31, 2019.

The fair value of our debt investments as a percentage of principal decreased by 0.6% as compared to a 1.2% increase in fair value of our debt investments in the prior year.

The unrealized loss was partially driven by the impacts of COVID-19, with global credit market volatility peaking in March 2020 and substantially recovering through year end.

To the extent that the credit risk of our portfolio companies increases as a result of financial impacts due to COVID-19, we may incur additional unrealized losses in the future.

For the year ended December 31, 2019, the net unrealized gain was primarily driven by an increase in the fair value of our debt investments as compared to December 31, 2018.

The fair value of our debt investments as a percentage of principal increased by 1.2% for the year ended December 31, 2019.

Net Realized Gain (Loss)

The realized gains and losses on fully exited and partially exited investments comprised of the following (dollar amounts in thousands):

For the Year Ended December 31, 2019 For the Year Ended December 31, 2018

For The Year Ended December 31,

2020 2019 2018

Net realized gain (loss) on investments $ (4,378) $ 3,962 $ —

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Net realized gain (loss) on investments $ (4,361) $ 4,023 $ (581)

For the year ended December 31, 2019, we generated net realized gains of $4.0 million resulting primarily from full or partial sales of quoted loans.

For the year ended December 31, 2020, we generated realized gains of $20.9 million, where were more than offset by realized losses of $25.3 million, primarily from full or partial sales of quoted loans, including a $20.5 million loss relating to Travelport Finance S.A.R.L.

For the year ended December 31, 2019, we generated realized gains of $4.8 million, partially offset by realized losses of $0.9 million, primarily from full or partial sales of quoted loans.

For the year ended December 31, 2018, we generated realized losses of $0.6 million relating to our acquisition of the Syndicated Warehouse.

The COVID-19 pandemic may cause us to experience full or partial losses on our investments upon the exit or restructuring of our investments.

Financial Condition, Liquidity and Capital Resources

We generate cash from the net proceeds from the drawdown of Capital Commitments, proceeds from net borrowings on our credit facilities and income earned on our debt investments.

Other potential future sources of capital include proceeds from secured or unsecured financings from banks or other lenders and proceeds from public or private offerings of debt or equity securities.

We generate cash from the net proceeds from the drawdown of Capital Commitments, issuances of unsecured debt, proceeds from net borrowings on our credit facilities and income earned on our debt investments.

The primary uses of our cash and cash equivalents are for (i) originating loans and purchasing senior secured debt investments, (ii) funding the costs of our operations (including fees paid to our Adviser and expense reimbursements paid to our Administrator), (iii) debt service, repayment and other financing costs of our borrowings and (iv) cash distributions to the holders of our shares.

As of December 31, 2019 and December 31, 2018, we had four and three revolving credit facilities outstanding, respectively, as described in “— Borrowings ” below.

We may from time to time enter into additional credit facilities, increase the size of our existing credit facilities or issue debt securities.

As of December 31, 2020 and December 31, 2019, we had four and four revolving credit facilities outstanding, respectively.

During the year ended December 31, 2020, we also issued two unsecured bonds totaling $1.2 billion in aggregate principal amount.

Refer to “— Borrowings ” below.

We may from time to time enter into additional credit facilities, increase the size of our existing credit facilities or issue further debt securities.

Any such incurrence or issuance would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors.

In accordance with the 1940 Act, with certain limited exceptions, we are only allowed to incur borrowings, issue debt securities or issue preferred stock, if immediately after the borrowing or issuance, the ratio of total assets (less total liabilities other than indebtedness) to

total indebtedness plus preferred stock, is at least 150%.

As of December 31, 2020 and December 31, 2019, we had an aggregate amount of $2,514.6 million and $1,454.2 million of senior securities outstanding and our asset coverage ratio was 230.0% and 215.1%, respectively.

The independent members of our Board and our sole initial shareholder approved our asset coverage limit of 150% pursuant to Section 61(a)(2) of the 1940 Act effective September 25, 2018.

As of such date, our initial shareholder was the only holder of our shares and it waived the right to receive repurchase offers pursuant to Section 61(a)(2)(D)(ii) of the 1940 Act.

We seek to carefully consider our unfunded commitments for the purpose of planning our ongoing financial leverage.

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Cash and cash equivalents as of December 31, 2020, taken together with our $1,055.4 million of available capacity under our credit facilities (subject to borrowing base availability) and our $713.3 million of uncalled Capital Commitments is expected to be sufficient for our investing activities and to conduct our operations in the near term.

Although we were able to issue unsecured debt during the year ended December 31, 2020, a continued disruption in the financial markets caused by the COVID-19 outbreak could restricted our access to financing in the future.

We may not be able to find new financing for future investments or liquidity needs and, even if we are able to obtain such financing, such financing will likely not be on as favorable terms as we could have obtained prior to the outbreak of the pandemic.

These factors may limit our ability to make new investments and adversely impact our results of operations.

As of December 31, 2020, we had $218.0 million in cash and cash equivalents.

During the year ended December 31, 2020, cash used in operating activities was $2,320.2 million, primarily as a result of funding portfolio investments of $4,485.2 million, partially offset by proceeds from sale of investments of $2,030.8 million.

Cash provided by financing activities was $2,472.7 million during the period, which was primarily the result of proceeds from the issuance of shares of $ 1,582.5 million and net borrowings on our credit facilities and our unsecured debt issuances of $1,044.6 million, partially offset by dividends paid in cash of $145.1 million.

As of December 31, 2019 , we had $65.5 million in cash and cash equivalents.

During the year ended December 31, 2019 , cash used in operating activities was $2,558.3 million, primarily as a result of funding portfolio investments of $3,077.3 million and a decrease in payables for investments purchased of $139.4 million, partially offset by proceeds from sale of investments of $572.8 million.

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Cash provided by financing activities was $356.0 million during the period, which was the result of proceeds from the issuance of shares of $239.3 million and net borrowings on our credit facilities of $120.0 million, partially offset by deferred financing costs paid of $2.6 million.

The following table summarizes the total shares issued and proceeds received related to our capital drawdowns delivered pursuant to the Subscription Agreements for the year ended December 31, 2019 (dollars in millions):

The following table summarizes the total shares issued and proceeds received related to capital drawdowns delivered pursuant to the Subscription Agreements for the year ended December 31, 2020 (dollar amounts in millions, except share amounts):

Common Share Issuance Date Number of Common Shares Issued Aggregate Offering Price

January 30, 2020 16,864,983 $ 440.9

April 8, 2020 14,864,518 324.0

July 15, 2020 5,304,125 125.6

July 28, 2020 123,229 2.9

November 6, 2020 4,627,528 115.4

December 15, 2020 (1)

22,802,680 571.2

Total 64,587,063 $ 1,580.0

(1) On December 1, 2020, the Company issued a capital call and delivered capital drawdown notices totaling $571.2 million, of which $3.4 million was received subsequent to December 31, 2020 and recorded as a subscription receivable on the Consolidated Statements of Assets and Liabilities.

The following table summarizes the total shares issued and proceeds received related to capital drawdowns delivered pursuant to the Subscription Agreements for the year ended December 31, 2019 (dollar amounts in millions, except share amounts):

Common Share Issuance Date Number of Common Shares Issued Aggregate Offering Price

January 24, 2019 5,666,095 $ 142.1

March 28, 2019 9,818,817 247.5

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(1) On December 2, 2019, the Company issued a capital call and delivered capital drawdown notices totaling $271.1 million, of which $5.9 million was received subsequent to December 31, 2019 and recorded as a subscription receivable on the Consolidated Statements of Assets and Liabilities.

The following table summarizes the total shares issued and proceeds received related to our initial capitalization and capital drawdowns delivered pursuant to the Subscription Agreements for the year ended December 31, 2018 (dollars in millions):

Common Share Issuance Date Number of

Shares Issued Aggregate

Offering Price

Common Share Issuance Date Number of Common Shares Issued Aggregate Offering Price

September 14, 2018 60 $ —

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Total 9,621,319 $ 239.3

We entered into Subscription Agreements with a number of investors, including affiliates of our Adviser, providing for the private placement of our shares.

Under the terms of the Subscription Agreements, investors are required to fund drawdowns to purchase our shares up to the amount of their respective capital commitment on an as-needed basis each time we deliver a drawdown notice to our investors.

As of December 31, 2019, the Company had received Capital Commitments totaling $3,230.6 million ($1,597.6 million remaining undrawn), of which $74.5 million ($36.7 million remaining undrawn) were from affiliates of the Adviser.

As of December 31, 2018, the Company had received Capital Commitments totaling $952.2 million ($712.9 million remaining undrawn), of which $15.0 million ($6.9 million remaining undrawn) were from affiliates of the Adviser.

Distributions and Dividend Reinvestment

The following table summarizes our distributions declared and payable for the year ended December 31, 2020 (dollar amounts in thousands, unless otherwise noted):

Date Declared Record Date Payment Date Per Share Amount Total Amount

January 29, 2020 January 29, 2020 May 15, 2020 $ 0.1593 $ 10,241

February 26, 2020 March 31, 2020 May 15, 2020 0.3407 27,688

April 7, 2020 April 7, 2020 August 14, 2020 0.0385 3,129

June 29, 2020 June 30, 2020 August 14, 2020 0.4615 44,454

July 14, 2020 July 14, 2020 November 13, 2020 0.0761 7,330

July 27, 2020 July 27, 2020 November 13, 2020 0.0707 7,185

August 26, 2020 September 30, 2020 November 13, 2020 0.3532 36,021

November 5, 2020 November 5, 2020 January 29, 2021 0.1957 19,958

December 14, 2020 December 14, 2020 January 29, 2021 0.2120 22,654

December 14, 2020 December 14, 2020 January 29, 2021 0.3000 32,057 (1)

December 14, 2020 December 31, 2020 January 29, 2021 0.0923 11,968

Total distributions $ 2.3000 $ 222,685

(1) Represents a special distribution.

The following table summarizes our distributions declared and payable for the year ended December 31, 2019 (dollars in thousands except per share amounts):

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Total distributions $ 2.0000 $ 67,511

Pursuant to our dividend reinvestment plan, the following table summarize the amounts received and shares issued to shareholders who have not opted out of our dividend reinvestment plan during the year ended December 31, 2019 (dollars in thousands except per share amounts):

For the years ended December 31, 2020 and 2019, the percentage of total dividends paid that constituted interest-related dividends, was 77.9% and 100.0%, respectively.

For the years ended December 31, 2020 and 2019, the percentage of total dividends paid that constituted qualified short-term capital gain dividends, was 17.0% and 0.0%, respectively.

Qualified short-term capital gain dividends are exempt from U.S.

withholding tax applicable to non-U.S.

shareholders.

During the year ended December 31, 2018, we did not declare or pay any distributions.

With respect to distributions, we have adopted an “opt out” dividend reinvestment plan for shareholders.

As a result, in the event of a declared cash distribution or other distribution, each shareholder that has not “opted out” of the dividend reinvestment plan will have their dividends or distributions automatically reinvested in additional shares rather than receiving cash distributions.

Shareholders who receive distributions in the form of shares will be subject to the same U.S.

federal, state and local tax consequences as if they received cash distributions.

The following table summarizes the amounts received and shares issued to shareholders who have not opted out of our dividend reinvestment plan during the year ended December 31, 2020 (dollars in thousands except share amounts):

Payment Date DRIP Shares Value DRIP Shares Issued

January 30, 2020 $ 2,882 112,302

May 15, 2020 4,244 194,694

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Total $ 18,745 784,781

The following table summarize the amounts received and shares issued to shareholders who have not opted out of our dividend reinvestment plan during the year ended December 31, 2019 (dollars in thousands except share amounts):

Payment Date DRIP Shares Value DRIP Shares Issued

May 15, 2019 $ 519 20,605

August 14, 2019 1,748 68,165

November 14, 2019 2,051 79,894

Total $ 4,318 168,664

During the year ended December 31, 2018, we did not declare or pay any distributions.

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Aggregate Principal Committed Outstanding Principal Carrying Value Unused

Portion (1) Amount Available (2)

Subscription Facility $ 400,000 $ 119,752 $ 119,752 $ 280,248 $ 280,248

Amount Available (2)

Jackson Hole Funding Facility (3)

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Big Sky Funding Facility 400,000 200,346 200,346 199,654 117,599

Revolving Credit Facility (4)

745,000 182,901 182,901 562,099 562,099

2023 Notes (5)

400,000 400,000 394,549 — —

2026 Notes (5)

800,000 800,000 791,281 — —

Total $ 3,570,000 $ 2,514,563 $ 2,500,393 $ 1,055,437 $ 973,382

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Breckenridge Funding Facility 875,000 820,311 820,311 54,689 10,769

Big Sky Funding Facility 400,000 — — 400,000 25,481

Total $ 2,275,000 $ 1,454,214 $ 1,454,214 $ 820,786 $ 322,341

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As of December 31, 2020, the Company had borrowings denominated in Euros (EUR) of 23.5 million.

As of December 31, 2018, all borrowings outstanding were in USD.

For the years ended December 31, 2019 and 2018, the weighted average interest rate on all borrowings outstanding was 4.36% and 5.42% (including unused fees), respectively, and the average principal debt outstanding was $776.6 million and $162.0 million, respectively.

As of December 31, 2019, the Company had borrowings denominated in Euros (EUR) of 23.9 million.

(4) Under the Revolving Credit Facility, the Company may borrow in U.S.

dollars or certain other permitted currencies.

As of December 31, 2020, the Company had borrowings denominated in Canadian Dollars (CAD) of 138.1 million.

(5) The carrying value of the Company's 2023 Notes and 2026 Notes is presented net of unamortized debt issuance costs of $5.5 million and $8.7 million, respectively, as of December 31, 2020.

For additional information on our debt obligations see "Item 8.

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Our investment portfolio contains and is expected to continue to contain debt investments which are in the form of lines of credit or delayed draw commitments, which require us to provide funding when requested by portfolio companies in accordance with underlying loan agreements.

As of December 31, 2019 and December 31, 2018, we had delayed draw term loans with an aggregate of $179.4 million and $54.7 million of unfunded commitments, respectively.

As of December 31, 2020 and December 31, 2019, we had unfunded delayed draw term loans and revolvers with an aggregate principal amount of $432.3 million and $179.4 million, respectively.

Warehousing Transactions

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See—“ Item 1A .— Risk Factors — Risks Related to an Investment in the Shares — Risks related to the Warehousing Transactions.

We entered into two warehousing transactions whereby we, subject to certain conditions, to purchase certain assets from parties unaffiliated with the Adviser.

Such warehousing transactions were designed to assist us in deploying capital upon receipt of drawdown proceeds.

The Middle Market Warehouse related primarily to originated or anchor investments in middle

market loans.

The Syndicated Warehouse related primarily to broadly syndicated loans.

Both the Middle Market Warehouse and the Syndicated Warehouse have been terminated.

For additional information on our Warehousing Transactions see Item 8.

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1 year 1-3 years 3-5 years After 5 years

Subscription Facility $ 119,752 $ 119,752 $ — $ — $ —

Jackson Hole Funding Facility $ 362,316 $ — $ 362,316 $ — $ —

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Big Sky Funding Facility 200,346 — 200,346 — —

Revolving Credit Facility 182,901 — — 182,901 —

2023 Notes 400,000 — 400,000 — —

2026 Notes 800,000 — — — 800,000

Total Contractual Obligations $ 2,514,563 $ — $ 1,531,662 $ 182,901 $ 800,000

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Agreements and Related Party Transactions.

COVID-19 Update

There is an ongoing global outbreak of COVID-19, which has spread to over 200 countries and territories, including the United States, and has spread to every state in the United States.

The World Health Organization has designated COVID-19 as a pandemic, and numerous countries, including the United States, have declared national emergencies with respect to COVID-19.

The global impact of the outbreak has been rapidly evolving, and as cases of COVID-19 have continued to be identified in additional countries, many countries have reacted by instituting quarantines and restrictions on travel, closing financial markets and/or restricting trading, and limiting operations of non-essential businesses.

Such actions are creating disruption in global supply chains, and adversely impacting many industries.

The outbreak has had a continued adverse impact on economic and market conditions and has triggered a period of global economic slowdown.

The outbreak of COVID-19 has had and may continue to have a material adverse impact on our financial condition, liquidity, results of operations and NAV, among other factors.

We expect that these impacts are likely to continue to some extent as the outbreak persists and potentially even longer.

The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of the novel coronavirus on economic and market conditions, and, as a result, present material uncertainty and risk with respect to us and the performance of our investments.

The full extent of the impact and effects of COVID-19 will depend on future developments, including, among other factors, the duration and spread of the outbreak, along with related travel advisories, quarantines and restrictions, the recovery time of the disrupted supply chains and industries, the impact of labor market interruptions, the impact of government interventions, the availability of effective vaccines and uncertainty with respect to the duration of the global economic slowdown.

COVID-19 and the current financial, economic and capital markets environment, and future developments in these and other areas present uncertainty and risk with respect to our performance, financial condition, results of operations and ability to pay distributions.

Critical Accounting Policies

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• The Audit Committee reviews the valuation recommendations made by the Adviser's Valuation Committee, including the independent valuation firms' valuations, and once approved, recommends them for approval by the Board;

• The Board reviews the valuation recommendations of the Audit Committee and determines the fair value of each investment in the portfolio in good faith based on the input of the Audit Committee, the Adviser's Valuation Committee and, where applicable, the independent valuation firms.

Valuation of each of our investments will generally be made as described above as of the end of each fiscal quarter.

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GAAP and required disclosures of fair value measurements.

ASC 820 determines fair value to be the price that would

be received for an investment in a current sale, which assumes an orderly transaction between market participants on the measurement date.

ASC 820 determines fair value to be the price that would be received for an investment in a current sale, which assumes an orderly transaction between market participants on the measurement date.

Market participants are defined as buyers and sellers in the principal or most advantageous market (which may be a hypothetical market) that are independent, knowledgeable, and willing and able to transact.

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In addition to using the above inputs in investment valuations, we apply the valuation policy approved by our Board that is consistent with ASC 820.

Consistent with the valuation policy, we evaluate the source of the inputs, including any markets in which our investments are trading (or any markets in which securities with similar attributes are trading), in determining fair value.

When an investment is valued based on prices provided by reputable dealers or pricing services (that is, broker quotes), we subject those prices to various criteria in making the determination as to whether a particular investment would qualify for treatment as a Level 2 or Level 3 investment.

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Distributions on fractional shares will be credited to each participating shareholder’s account to three decimal places.

A participating shareholder will receive an amount of shares equal to the amount of the distribution on that participant’s shares divided by the most recent quarter-end NAV per share that is available on the date such distribution was paid (unless the Board determines to use the NAV per share as of another time).

Shareholders who receive distributions in the form of shares will generally be subject to the same U.S.

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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-K

Item 7. Management’s Discussion and Analysis