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Item 1. Business

2021-02-24 compared with 2020-03-04 · 451 added, 511 removed, 349 unchanged (73% of the section changed)

We were formed on February 5, 2015

(Inception) as a Delaware corporation structured as an externally managed, closed-end, non-diversified management investment company.

We commenced investment

operations on June 26, 2015 (Commencement of Operations).

On January 30, 2020, we changed our state of incorporation from the State of Delaware to the State of Maryland.

We have elected to be treated as a business development

company (BDC) under the Investment Company Act of 1940, as amended (the 1940 Act).

We are a specialty finance company focused on

lending to middle-market companies and were incorporated under the laws of the

State of Delaware on February 5, 2015 (Inception).

January 30, 2020, we changed our state of incorporation from the State of

Delaware to the State of Maryland.

On January 31, 2020, the Company

completed a transaction to acquire Alcentra Capital Corporation in a cash and stock transaction (the Alcentra Acquisition).

The Company was listed and began trading on the NASDAQ stock exchange on February 3, 2020.

We have elected to be treated as a business development company (BDC) under the Investment Company Act of 1940, as amended (1940 Act).

In addition, we have elected to be treated for U.S.

federal income tax purposes as a regulated investment company (a RIC) under

Subchapter M of the Internal Revenue Code of 1986, as amended (the Code).

As a RIC, we will not be taxed on our income to the extent that we distribute such income each year and satisfy other applicable income tax requirements.

We are managed by the Advisor, an investment adviser that is registered with the Securities and Exchange Commission (the SEC) under the Investment

Advisers Act of 1940, as amended (the Advisers Act).

The Administrator provides the administrative services necessary for us to operate.

Our management consists of investment and administrative professionals from the Advisor and

Administrator along with our Board of Directors (the Board).

The Advisor directs and executes our investment operations and capital raising activities subject to oversight from the Board, which sets our broad policies.

The Board has

delegated investment management of our investment assets to the Advisor.

The Board consists of six directors, four of whom are independent.

portion of the outstanding shares of our common stock, par value $0.001 per share, (the Common Stock) are owned by CCG LP.

CCG LP is also the majority member of the Advisor and sole member of the Administrator.

We have entered into a

license agreement with CCG LP under which CCG LP granted us a non-exclusive, royalty-free license to use the name Crescent Capital.

The Advisor has entered into a resource sharing agreement with

Our primary investment objective is to maximize the total return to our stockholders in the form of current income and capital appreciation

through debt and related equity investments.

We will seek to achieve our investment objective by investing primarily in secured debt (including senior secured, unitranche and second lien debt) and unsecured debt (including senior unsecured,

mezzanine and subordinated debt), as well as related equity securities of private U.S.

federal income tax purposes as a regulated investment company (a RIC) under Subchapter M of the Internal Revenue Code of 1986, as amended (the Code).

As such, we are

required to comply with various regulatory requirements, such as the requirement to invest at least 70% of our assets in qualifying assets, source of income limitations, asset diversification requirements, and the requirement to

distribute annually at least 90% of our taxable income and tax-exempt interest.

We are managed by our investment

adviser, Crescent Cap Advisors, LLC (the Adviser, and formerly, CBDC Advisors, LLC), an investment adviser that is registered with the SEC under the 1940 Act.

Our administrator, CCAP Administration LLC (the Administrator, and

formerly, CBDC Administration, LLC) provides the administrative services necessary for us to operate.

Company management consists of investment and administrative professionals from the Adviser and Administrator along with our Board.

directs and executes our investment operations and capital raising activities subject to oversight from the Board, which sets our broad policies.

The Board has delegated investment management of our investment assets to the Adviser.

consists of five directors, four of whom are independent.

Our primary investment objective is to maximize the total return to our stockholders in the

form of current income and capital appreciation through debt and related equity investments.

We seek to achieve our investment objectives by investing primarily in secured debt (including senior secured first lien, unitranche and senior secured

second-lien debt) and unsecured debt (including senior unsecured, mezzanine and subordinated debt), as well as related equity securities of private U.S.

middle-market companies.

By middle-market companies, we mean companies that have annual earnings before interest, income taxes, depreciation and

amortization (EBITDA), which we believe is a useful proxy for cash flow, of $10 million to $250 million.

We may on occasion invest in larger or smaller companies.

Our investments may include

non-cash income features, including payment-in-kind (PIK) interest and original issue discount (OID).

may also invest in securities that are rated below investment grade ( e.g.

, junk bonds) by rating agencies or that would be rated below investment grade if they were rated.

As a BDC, we may also invest up to 30% of our portfolio

opportunistically in non-qualifying portfolio investments.

See Item 1(c).

Description of BusinessRegulation as a Business Development CompanyQualifying Assets .

Our investment objective is accomplished through:

accessing the origination channels that have been developed and established by CCG LP;

We may purchase interests in loans or make debt investments, either

(i) directly from our target companies as primary market or private credit investments ( i.e.

, private credit transactions), or (ii) primary or secondary market bank loan or high yield transactions in the broadly syndicated over-the-counter market ( i.e.

, broadly syndicated loans and bonds).

Although our focus is to invest in less liquid private credit transactions, we may from

time to time invest in more liquid broadly syndicated loans and bonds to complement our private credit transactions.

Our investment objective is

accomplished through:

accessing the origination channels that have been developed and established by Crescent;

originating investments in what we believe to be middle-market companies with strong business fundamentals,

generally controlled by private equity investors that require capital for growth, acquisitions, recapitalizations, refinancings and leveraged buyouts;

applying the underwriting standards of CCG LP;

leveraging the experience and resources of CCG LP to monitor our investments.

applying Crescents underwriting standards;

leveraging Crescents experience and resources to monitor our investments.

Our investment philosophy emphasizes capital preservation through credit selection and risk mitigation.

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protection through conservative cash flow and asset coverage requirements, priority in the capital structure and information requirements.

As a BDC under the Act and a RIC under the Code, our portfolio is subject to diversification and other

requirements.

As a BDC under

the Act and a RIC under the Code, our portfolio is subject to diversification and other requirements.

See Certain U.S.

Federal Income Tax Consequences .

Our operations comprise only a single reportable segment.

July 23, 2015, we formed CBDC Universal Equity, Inc.

(the Taxable Subsidiary), a wholly-owned subsidiary.

This subsidiary allows us to hold equity securities of a portfolio company organized as pass-through entities while

continuing to satisfy the requirements of a RIC under the Code.

On February 25, 2016, we formed Crescent Capital BDC Funding, LLC (CCAP SPV), a Delaware limited liability company and wholly owned subsidiary.

The financial statements

of these two entities are consolidated into our financial statements.

We may borrow money from time to time within the levels permitted by the 1940 Act

(which generally allows us to incur leverage for up to one-half of our assets).

In determining whether to borrow money, we will analyze the maturity, covenant package and rate structure of the proposed

borrowings as well as the risks of such borrowings compared to our investment outlook.

The use of borrowed funds or the proceeds of preferred stock offerings to make investments would have its own specific set of benefits and risks, and all of the

costs of borrowing funds or issuing preferred stock would be borne by holders of our common stock.

See Item 1A.

Risk FactorsRisks Relating to Our Business and StructureWe are subject to risks associated with the current interest

rate environment, and to the extent we use debt to finance our investments, changes in interest rates may affect our cost of capital and net investment income.

Further, changes in LIBOR or its discontinuation may adversely affect the value of

LIBOR-indexed securities, loans, and other financial obligations or extensions of credit in our portfolio.

Alcentra Capital Acquisition

On January 31, 2020, we completed our acquisition of Alcentra Capital Corporation, a Maryland corporation (Alcentra Capital) (the

Alcentra Acquisition) pursuant to the terms and conditions of that certain Agreement and Plan of Merger, dated as of August 12, 2019 (as amended on September 27, 2019, the Merger Agreement) with Alcentra Capital,

Atlantis Acquisition Sub, Inc., a Maryland corporation and one of our wholly owned subsidiaries (the Acquisition Sub) and, solely for limited purposes, the Advisor.

To effect the acquisition, Acquisition Sub merged with and into Alcentra

Capital, with Alcentra Capital surviving the merger as our wholly owned subsidiary (the First Merger).

Immediately thereafter and as a single integrated transaction, Alcentra Capital merged with and into us, with us as the surviving

company (the Second Merger and, together with the First Merger, the Mergers).

Following the consummation of the Mergers, on February 3, 2020 our Common Stock began publicly trading on the NASDAQ Global Market

(NASDAQ) under the symbol CCAP.

Pursuant to the Merger Agreement, Alcentra Capital stockholders received the right to the

following merger consideration in exchange for each share of Alcentra Capital common stock outstanding immediately prior to the effective time of the First Merger, in accordance with the Merger Agreement:

(a) $1.50 per share in cash consideration

from us (less a $0.80 final dividend declared by Alcentra Capital), (b) $1.68 per share in cash consideration from our Advisor and (c) stock consideration at the fixed exchange ratio of 0.4041 shares of our common stock, thereby resulting in

our then-existing stockholders owning approximately 82% of us and Alcentra Capitals then-existing stockholders owning approximately 18% of us.

connection with the Alcentra Acquisition and effective February 1, 2020, the Advisor agreed to:

(a) reduce the base management fee under our investment advisory agreement from 1.50% to 1.25%, (b) waive a portion of the base management fee

from February 1, 2020 through July 31, 2021 so that only 0.75% will be charged for such time period, (c) waive the income-based portion of the incentive fee from February 1, 2020 through July 31, 2021 and (d) increase

the hurdle rate under the income-based portion of the incentive fee from 1.50% to 1.75% per quarter (or from 6.00% to 7.00% annualized).

Investment Advisor

The Advisor, a Delaware limited liability company and an affiliate of CCG LP, acts as our investment adviser.

The Advisor is a

registered investment adviser under the Advisers Act.

Our investment activities are managed by the Advisor, which is responsible for originating prospective investments, conducting research and due diligence investigations on potential investments,

analyzing investment opportunities, negotiating and structuring our investments and monitoring our investments and portfolio companies on an ongoing basis.

The Advisor has entered into a Resource Sharing Agreement (the Resource Sharing

Agreement) with CCG LP, pursuant to which CCG LP provides the Advisor with experienced investment professionals (including the members of the Advisors investment committee) and access to the resources of CCG LP so as to enable the

Advisor to fulfill its obligations under the Investment Advisory Agreement.

Through the Resource Sharing Agreement, the Advisor capitalizes on the deal origination, credit underwriting, due diligence, investment structuring, execution, portfolio

management and monitoring experience of CCG LPs investment professionals.

Crescent Capital Corporation, a predecessor to the business of CCG LP, was formed in 1991 by Mark Attanasio and Jean-Marc Chapus as an asset management firm

specializing in below-investment grade debt securities.

In 1995, Crescent Capital Corporation was acquired by The TCW Group, Inc.

We have formed or acquired wholly owned subsidiaries that are structured as tax blockers, to hold equity or equity-like investments in portfolio companies

organized as limited liability companies or other forms of pass-through entities.

We have also formed a special purpose vehicle that holds certain debt investments in connection with a credit facility.

These corporate subsidiaries are not

consolidated for income tax purposes and may incur income tax expense as a result of their ownership of portfolio companies.

We may borrow money from time to time within the levels permitted by the 1940 Act (up to 150% of asset

coverage requirement).

In determining whether to borrow money, we analyze the maturity, covenant package and rate structure of the proposed borrowings as well as the risks of such borrowings compared to our investment outlook.

The use of borrowed

funds or the proceeds of preferred stock offerings to make investments would have its own specific set of benefits and risks, and all of the costs of borrowing funds or issuing preferred stock would be borne by holders of our common stock.

Risk FactorsRisks Relating to Our Business and StructureWe are subject to risks associated with the current interest rate environment, and to the extent we use debt to finance our investments, changes in interest rates

may affect our cost of capital and net investment income.

Further, changes in LIBOR or its discontinuation may adversely affect the value of LIBOR-indexed securities, loans, and other financial obligations or extensions of credit in our

The Investment Adviser

Adviser, a Delaware limited liability company and an affiliate of Crescent, acts as our investment adviser.

The Adviser is a registered investment adviser under the Advisers Act.

Our investment activities are managed by the Adviser, which is

responsible for originating prospective investments, conducting research and due diligence investigations on potential investments, analyzing investment opportunities, negotiating and structuring our investments and monitoring our investments and

portfolio companies on an ongoing basis.

The Adviser has entered into a Resource Sharing Agreement (the Resource Sharing Agreement) with Crescent, pursuant to which Crescent provides the Adviser with experienced investment professionals

(including the members of the Advisers investment committee) and access to Crescents resources so as to enable the Adviser to fulfill its obligations under the Investment Advisory Agreement.

Through the Resource Sharing Agreement, the

Adviser capitalizes on the deal origination, credit underwriting, due diligence, investment structuring, execution, portfolio management and monitoring experience of Crescents investment professionals.

About Crescent

Crescent Capital Corporation, a

predecessor to the business of Crescent, was formed in 1991 by Mark Attanasio and Jean-Marc Chapus as an asset management firm specializing in below-investment grade debt securities.

In 1995, Crescent Capital Corporation was acquired by The TCW

(TCW) and rebranded as TCWs Leveraged Finance Group.

On January 1, 2011,

Attanasio and Chapus, along with the entire investment team, spun out of TCW and formed CCG LP, an employee-owned, registered investment adviser.

With its headquarters in Los Angeles, CCG LP has over 180 employees based in four offices

Attanasio and Chapus head CCG LPs management committee, which oversees all of CCG LPs operations.

On January 1, 2011, Messrs.

Attanasio and Chapus, along with the entire investment team, spun out of TCW and formed Crescent, an employee-owned,

registered investment adviser.

With its headquarters in Los Angeles, Crescent has over 180 employees based in four offices in the U.S.

Attanasio and Chapus head Crescents management committee, which oversees all of

Crescents operations.

On January 5, 2021, Sun Life Financial Inc.

(together with its subsidiaries and joint ventures, Sun Life) acquired a majority interest in Crescent (the Sun Life Transaction).

There were no

changes to our investment objective, strategies and process or to the Crescent team responsible for the investment operations as a result of the Sun Life Transaction.

The Board of Directors

Our business and affairs are managed under the direction of our Board.

Our Board consists of six members, four of whom are not interested persons

of CCAP, the Advisor, the Administrator or their respective affiliates as defined in Section 2(a)(19) of the 1940 Act.

We refer to these individuals as our Independent Directors. The Independent Directors compose a majority of our

Our business and affairs are

managed under the direction of our Board.

Our Board consists of five members, four of whom are not interested persons of CCAP, the Adviser, the Administrator or their respective affiliates as defined in Section 2(a)(19) of the 1940

We refer to these individuals as our Independent Directors. The Independent Directors compose a majority of our Board.

Our Board elects our officers, who serve at the discretion of our Board.

The responsibilities of our Board include quarterly determinations of the fair value of our assets, corporate governance activities, oversight of our financing

arrangements and oversight of our investment activities.

The responsibilities of our Board

include quarterly determinations of the fair value of our assets, corporate governance activities, oversight of our financing arrangements and oversight of our investment activities.

Investment Strategy

We follow CCG LPs approach to investing, which is based upon fundamental credit research and risk analysis.

This approach reflects CCG LPs view

that the cornerstone of successful investing is fundamental credit analysis.

Specifically, we pursue an investment strategy targeting companies primarily

in the middle-market.

We believe that the middle-market is attractive as a result of the lack of available lending sources to smaller companies.

We believe many financing providers have chosen to focus on large corporate clients and managing capital

markets transactions rather than lending to middle-market businesses.

Further, many financial institutions and traditional lenders are faced with constrained balance sheets and are requiring existing borrowers to reduce leverage.

We also believe

hedge funds and collateralized debt obligation/collateralized loan obligation managers are less likely to pursue investment opportunities in our target market as a result of reduced liquidity for new investments.

Specifically, CCG LPs sourcing

platform should enable it, on our behalf and through our Advisor, to identify and invest in creditworthy borrowers.

In addition, to take advantage of investment opportunities in middle-market companies that are identified for us by CCG LP, we may

invest alongside other pools of capital, including bank debt, high-yield and mezzanine funds managed by CCG LP.

See Item 13.

Certain Relationships and Related Transactions, and Director Independence for a discussion of certain

conflicts of interest of CCG LP and certain limitations on our ability to co-invest with other accounts advised by CCG LP.

We follow Crescents approach

to investing, which is based upon fundamental credit research and risk analysis.

This approach reflects Crescents view that the cornerstone of successful investing is fundamental credit analysis.

Specifically, we pursue an investment strategy targeting companies primarily in the middle-market.

We believe that the middle-market is attractive as a result

of the lack of available lending sources to smaller companies.

We believe many financing providers have chosen to focus on large corporate clients and managing capital markets transactions rather than lending to middle-market businesses.

many financial institutions and traditional lenders are faced with constrained balance sheets.

We also believe hedge funds and collateralized debt obligation/collateralized loan obligation managers are less likely to pursue investment opportunities

in our target market as a result of reduced liquidity for new investments.

Specifically, Crescents sourcing platform should enable it, on our behalf and through our Adviser, to identify and invest in creditworthy borrowers.

In addition, to

take advantage of investment opportunities in middle-market companies that are identified for us by Crescent, we may invest alongside other pools of capital, including bank debt, high-yield and mezzanine funds managed by Crescent.

Certain Relationships and Related Transactions, and Director Independence for a discussion of certain conflicts of interest of Crescent and certain limitations on our ability to co-invest with

other accounts advised by Crescent.

We target investments in companies that exhibit one or more of the following characteristics:

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We may on occasion invest in larger or smaller companies.

A first lien loan is typically senior on a

lien basis to other liabilities in the issuers capital structure and has the benefit of a first-priority security interest in assets of the issuer.

First lien investments are senior loans on a

lien basis to other liabilities in the issuers capital structure that have the benefit of a first-priority security interest in assets of the issuer.

The security interest ranks above the security interest of any second-lien lenders in those

Unitranche loans are first lien loans that may extend deeper in a companys capital structure than traditional first lien debt

and may provide for a waterfall of cash flow priority among different lenders in the unitranche loan.

In certain instances, we may find another lender to provide the first out portion of such loan and retain the last out

portion of such loan, in which case, the first out portion of the loan would generally receive priority with respect to payment of principal, interest and any other amounts due thereunder over the last out portion that we

would continue to hold.

Unitranche first lien investments are loans that may extend deeper in a companys capital structure than traditional first lien

debt and may provide for a waterfall of cash flow priority among different lenders in the unitranche loan.

In certain instances, the Company may find another lender to provide the first out portion of such loan and retain the last

out portion of such loan, in which case, the first out portion of the loan would generally receive priority with respect to payment of principal, interest and any other amounts due thereunder over the last out portion

that the Company would continue to hold.

In exchange for the greater risk of loss, the last out portion earns a higher interest rate.

Second lien investments are loans with a second priority lien on the assets of the portfolio

We obtain security interests in the assets of the portfolio company that serve as collateral in support of the repayment of such loans.

This collateral serves as collateral in support of the repayment of these loans.

The term mezzanine refers to an investment in a company that, among other factors, includes debt that generally ranks senior to a borrowers

equity securities and junior in right of payment to such borrowers other indebtedness.

We may make multiple investments in the same portfolio company.

Second lien investments are loans with a second priority lien on all existing and future assets of the portfolio company.

The security interest

ranks below the security interests of any first lien and unitranche first lien lenders in those assets.

Mezzanine or unsecured

debt investments are loans that generally rank senior to a borrowers equity securities and junior in right of payment to such borrowers other senior indebtedness.

We generally invest in securities that are rated below investment grade ( e.g.

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organic growth, acquisitions, market or product expansion and recapitalizations.

We expect to generate revenues primarily in the form of interest income from the investments we hold in addition to income from dividends on direct equity investments,

capital gains on the sales of loans and debt and equity securities and various loan origination and other fees.

We may purchase interests in loans or

make debt investments, either (i) directly from our target companies as primary market or private credit investments ( i.e.

, private credit transactions), or (ii) primary or secondary market bank loan or high yield transactions in

the broadly syndicated over-the-counter market ( i.e.

We expect to generate revenues primarily in the form of interest income from debt investments, dividend income from direct equity investments, capital gains on the

sales of debt and equity securities and various loan origination and other fees.

We may purchase interests in loans or make debt investments, either

(i) directly from our target companies as primary market or private credit investments ( i.e.

, private credit transactions), or (ii) primary or secondary market bank loan or high yield transactions in the broadly syndicated over-the-counter market ( i.e.

, broadly syndicated loans and bonds).

Although our focus is to invest in less liquid private

credit transactions, broadly syndicated loans and bonds are generally more liquid than and complement our private credit transactions.

In addition, and because we often receive more attractive financing terms on broadly syndicated loans and bonds

than we do on our less liquid assets, we are able to leverage the broadly syndicated portfolio in such a way that can maximize the levered return potential of our portfolio.

Although our focus is to invest in less liquid private credit transactions, we may from

time to time invest in more liquid broadly syndicated loans and bonds to complement our private credit transactions.

In addition, and because we often receive more attractive financing terms on broadly syndicated loans and bonds than we do on our

less liquid assets, we are able to leverage the broadly syndicated portfolio in such a way that can maximize the levered return potential of our portfolio.

Investment Decision Process

Through the resources of CCG

LP, the Advisor has access to origination capabilities and research resources, experienced investment professionals, internal information systems and a credit analysis framework and investment process.

Over the years, CCG LP has designed its

investment process to seek those investments which it believes have the most attractive risk/reward characteristics.

The process involves several levels of review and is coordinated in an effort to identify risks in potential investments.

Advisor applies CCG LPs expertise to screen many of our investment opportunities as described below.

Depending on the type of the investment and the obligor, the Advisor may apply all or some of these levels of review, in its discretion.

upon a favorable outcome of the diligence process described below, our Advisors investment committee will make a final decision on such investment and such investment will only be funded after approval.

Through Crescents

resources, the Adviser has access to origination capabilities and research resources, experienced investment professionals, internal information systems and a credit analysis framework and investment process.

Over the years, Crescent has designed

its investment process to seek investments which it believes have the most attractive risk/reward characteristics.

The process involves multiple levels of review and is coordinated in an effort to identify risks in potential investments.

Crescents expertise to screen our investment opportunities as described below.

Depending on the type of investment and the borrower, the Adviser may apply all or some of these levels of

review, in its discretion.

Based upon a favorable outcome of the diligence process described below, our Advisers investment committee will make a final decision on such investment and such investment will only be funded after approval by the

Advisers investment committee.

Private Credit Originations :

New private credit investment opportunities are initially reviewed by a CCG LP senior investment professional to determine

whether additional consideration is warranted.

Factors influencing this decision include fundamental business considerations, including borrower industry, borrower financial leverage and quality of management as well as private equity sponsor

involvement (if any).

In the event of a positive review, potential investments will be further reviewed with senior and junior investment professionals of CCG LP.

If the team agrees on the fundamental attractiveness of the investment, the review

phase will proceed with preliminary strategic and financial analyses.

At this point, CCG LP will utilize its credit analysis methodology to outline credit and operating statistics and identify key business characteristics through a dialogue with the

proposed portfolio companys management.

Following this analysis, CCG LP will develop an initial structure and pricing proposal for the investment and preliminarily inform the investment committee of such proposal.

After satisfactory preliminary analysis and review, a due diligence phase will begin, including completion of credit analysis,

on-site due diligence (if deemed necessary), visits and meetings with management, reference checks and could include consultation with third-party experts.

The credit analysis is a detailed, bottom-up analysis on the proposed portfolio company that generally includes an assessment of its market, competition, products, management and the equity sponsor or owner.

Detailed financial analysis will also be

performed at this stage with a focus on historical financial results.

Projected financial information developed by the proposed portfolio company is analyzed and sensitized by CCG LP based upon the portfolio companys historical results and CCG

LPs assessment of the portfolio companys future prospects.

The sensitivity analysis will highlight the variability of revenues and earnings, worst case debt service coverage and available sources of liquidity.

As part of the

overall evaluation, comparisons are made to similar companies to help assess a portfolio companys asset coverage of debt, interest servicing capacity and competitive strength within its industry and market.

At the completion of due diligence,

the investment committee will complete a checklist to verify that all identified issues have been covered or mitigated.

Additionally during this stage, CCG LP will typically work with the management of the proposed portfolio company and its other

capital providers to develop the structure of an investment, including negotiating among these parties on how our investment is expected to perform relative to the other forms of capital in its capital structure.

New private credit investment opportunities are initially reviewed by a Crescent

senior investment professional to determine whether additional consideration is warranted.

Factors influencing this decision include fundamental business considerations, including borrower industry, borrower financial leverage and cash flows and

quality of management as well as private equity sponsor involvement (if any).

In the event of an initial positive review, potential investments are further reviewed with senior and junior investment professionals.

If the team agrees on the

fundamental attractiveness of the investment, the review phase proceeds with preliminary due diligence and financial analyses.

At this point, Crescent utilizes its credit analysis methodology to outline credit and operating statistics and identify

key business characteristics and risks through available diligence materials in addition to dialogue with company management and the proposed private equity sponsor (if any).

Following this analysis, Crescent considers an initial structure and

pricing proposal for the investment and preliminarily informs the broader investment team of such proposal.

After satisfactory preliminary analysis and

review, further due diligence continues, including completion of credit analysis, on-site due diligence (if deemed necessary), visits and meetings with management, and could include consultation with

third-party experts.

The credit analysis is a detailed, bottom-up analysis on the proposed portfolio company that generally includes an assessment of its industry, market, competition, products, services,

management and the equity sponsor or owner.

Detailed financial analysis is also performed at this stage with a focus on historical financial results.

Projected financial information developed by the proposed portfolio company is analyzed and

sensitized based upon the portfolio companys historical results and assessment of the portfolio companys future prospects.

The sensitivity analysis highlights the variability of revenues and earnings, worst case debt service

coverage and available sources of liquidity.

As part of the overall evaluation, comparisons are made to similar companies to help assess a portfolio companys asset and enterprise value coverage of debt, interest servicing capacity and

competitive strength within its industry and market.

Additionally during this stage, Crescent typically works with the management of the proposed portfolio company and its other capital providers to develop the structure of an investment, including

negotiating among these parties on how the investment is expected to perform relative to the other forms of capital in its capital structure.

Syndicated Investments:

For syndicated investments, CCG LP seeks to pursue an investment process

based upon evaluation of the credit fundamentals of issuers.

The foundation of this process is the bottom-up credit research process that CCG LP employs across multiple strategies.

investments, CCG LPs investment professionals perform comprehensive analysis of credit worthiness, including an assessment of the business, an evaluation of management, an analysis of business strategy and industry trends, an examination of

financial results and projections and a review of the securitys proposed terms.

For syndicated investments, Crescent seeks to pursue an investment process based upon evaluation of the credit fundamentals of

The foundation of this process is the bottom-up credit research process that Crescent employs across multiple strategies.

In selecting investments, Crescents investment professionals

perform comprehensive analysis of credit worthiness, including an assessment of the business, an evaluation of management, an analysis of business strategy and industry trends, an examination of financial results and projections and a review of the

securitys proposed terms.

Credit research is a critical component of the investment process.

In selecting investments, CCG LPs respective portfolio management teams analyze

opportunities with an emphasis on principal preservation (i.e., an issuers ability to service its debt and maintain cash flow).

Upon completion of the investment decision process described above, the investment team working on an investment delivers a memorandum to the

Advisors investment committee.

Once an investment has been approved by the investment committee, the Advisor moves through a series of steps with the respective investment team towards negotiation of final documentation.

In selecting investments, Crescents respective portfolio management teams analyze opportunities with an emphasis on principal preservation

(i.e., an issuers ability to service its debt and maintain cash flow).

Investment Funding

Upon completion of the investment decision process described above, the investment team working on an investment delivers a memorandum to the Advisers

investment committee.

Once an investment has been approved by the investment committee, the Adviser moves through a series of steps with the respective investment team towards negotiation of final documentation.

Investment Monitoring

The Advisor monitors our portfolio

The Adviser monitors our portfolio

companies on an ongoing basis by monitoring the financial trends of each portfolio company to determine if it is meeting its business plans and to assess the appropriate course of action for each company.

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appropriate, regular dialogue with company management and equity sponsors and detailed internally generated monitoring reports to be critical to our performance.

As part of the monitoring process, the Advisor regularly assesses the risk profile of

As part of the monitoring process, the Adviser regularly assesses the risk profile of

each of our investments and, on a quarterly basis, grades each investment on a risk scale of 1 to 5.

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Most or all of the debt covenants are out of compliance and payments are substantially delinquent.

Loans rated 5 are not anticipated to be repaid in full and the fair market value of the loan should

be reduced to the anticipated recovery amount.

Loans with an investment rating of 5 should be placed on non-accrual status.

Loans rated 5 are not anticipated to be repaid in full and the fair market value of the loan are

generally reduced to the anticipated recovery amount.

Loans with an investment rating of 5 are generally placed on non-accrual status.

Investment Advisory Agreement

Our investment activities

are managed by our Advisor, which is responsible for originating prospective investments, conducting research and due diligence investigations on potential investments, analyzing investment opportunities, negotiating and structuring our investments

and monitoring our investments and portfolio companies on an ongoing basis.

On June 2, 2015, we entered into an investment advisory agreement (the Investment Advisory Agreement) with the Advisor, pursuant to which we have agreed to

pay the Advisor a base management fee and an incentive fee for its services.

The cost of both the base management fee and the incentive fee are ultimately borne by our stockholders.

Base Management Fee

The base management fee is

calculated at an annual rate of 1.5% of our gross assets, including assets purchased with borrowed funds or other forms of leverage but excluding cash and cash equivalents.

For services rendered under the Investment Advisory Agreement, the base

management fee is payable quarterly in arrears.

The base management fee is calculated based on the average value of our gross assets at the end of the two most recently completed calendar quarters, and appropriately adjusted for any share issuances

or repurchases during the current calendar quarter.

Base management fees for any partial month or quarter will be appropriately pro-rated.

For purposes of the Investment Advisory Agreement, cash equivalents

government securities and commercial paper maturing within one year of purchase.

The Advisor agreed to certain fee waivers prior to the completion of a Qualified IPO, including but not limited to, waiving its right to receive management

fees in excess of the sum of (i) 0.25% of the aggregate committed but undrawn capital and (ii) 0.75% of the aggregate gross assets excluding cash (including capital drawn to pay our expenses).

Additionally, on August 12, 2019, we entered into an agreement with the Advisor (the Transaction

Support Agreement) in connection with the Alcentra Acquisition.

Under the terms of the Transaction Support Agreement, among other things, we agreed to enter into an amendment to our Investment Advisory Agreement to (i) permanently reduce

the management fee from 1.50% to 1.25% and (ii) waive a portion of the base management fee from February 1, 2020 through July 31, 2021 such that the base management fee shall be charged at an annual rate of 0.75% of our gross assets

for such time period.

These amendments contemplated by the Transaction Support Agreement went into effect through the completion of the Alcentra Acquisition, which closed on January 31, 2020.

On June 2, 2015, we

entered into an investment advisory agreement with the Adviser (the Investment Advisory Agreement), which was subsequently replaced by the Amended and Restated Investment Advisory Agreement (together with the Investment Advisory

Agreement, the Advisory Agreements), which was approved by our stockholders on January 29, 2020 in connection with the Alcentra Acquisition resulting in the change of certain terms.

Subsequently on December 17, 2020 in

connection with the Sun Life Transaction, the Amended and Restated Investment Advisory Agreement was re-approved by our stockholders resulting in no substantive changes to the terms.

Under the terms of the

Amended and Restated Investment Advisory Agreement, the Adviser provides investment advisory services to us and our portfolio investments.

The Advisers services under the Amended and Restated Investment Advisory Agreement are not exclusive,

and the Adviser is free to furnish similar or other services to others so long as its services to us are not impaired.

Under the terms of the Advisory Agreements, the Adviser is entitled to receive a base management fee and may also receive

incentive fees, as discussed below.

Base Management Fee (prior to February 1, 2020)

Prior to February 1, 2020, pursuant to the Investment Advisory Agreement, the base management fee was calculated and payable quarterly in arrears at an

annual rate of 1.50% of our gross assets, including assets acquired through the incurrence of debt but excluding any cash and cash equivalents.

The base management fee was calculated based on the average value of gross assets at the end of the two

most recently completed calendar quarters, and appropriately adjusted for share issuances or repurchases during the current calendar quarter.

Investment Advisory Agreement, the Adviser agreed to waive its right to receive management fees in excess of the sum of (i) 0.25% of the aggregate committed but undrawn capital and (ii) 0.75% of the aggregate gross assets excluding cash

and cash equivalents (including capital drawn to pay our expenses) during the period prior to February 3, 2020, the date of the our qualified initial public offering, as defined by the Investment Advisory Agreement (Qualified IPO).

The listing of our Common Stock on NASDAQ on February 3, 2020 qualified as a Qualified IPO.

The Adviser is not permitted to recoup any waived amounts at any time.

New Base Management Fee (effective February 1, 2020)

Effective February 1, 2020, pursuant to the Amended and Restated Investment Advisory Agreement, the base management fee is calculated and payable

quarterly in arrears at an annual rate of 1.25% of our gross assets, including assets acquired through the incurrence of debt but excluding any cash and cash equivalents.

The base management fee is calculated based on the average value of gross

assets at the end of the two most recently completed calendar quarters, and appropriately adjusted for any share issuances or repurchases during the current calendar quarter.

In addition, under the terms of the Amended and Restated Advisory Agreement, the Adviser agreed to waive a portion of the management fee from February 1,

2020 through July 31, 2021 after the closing of the Alcentra Acquisition so that only 0.75% shall be charged for such time period.

The Adviser is not permitted to recoup any waived amounts at any time.

The Adviser has voluntarily waived its

right to receive management fees on our investment in GACP II LP for any period in which GACP II LP remains in the investment portfolio.

Incentive Fee

We pay the Advisor on incentive fee.

incentive fee consists of two partsan incentive fee based on income and an incentive fee based on capital gains.

(prior to February 1, 2020)

Under the Investment Advisory Agreement, the Incentive Fee consisted of two parts.

The first part, the income

incentive fee, which is described in more detail in the bullet points below, is calculated and payable quarterly in arrears and (a) equals 100% of the excess of our pre-incentive fee net investment income

for the immediately preceding calendar quarter, over a preferred return of 1.5% per quarter (6% annualized), (the Hurdle), and a catch-up feature, until the Advisor has received, (i) prior to

a Qualified IPO, 15%, or (ii) after a Qualified IPO, 17.5%, of the pre-incentive fee net investment income for the current quarter up to, (i) prior to a Qualified IPO, 1.7647%, or (ii) after a

Qualified IPO, 1.8182% (the Catch-up), and (b) (i) prior to a Qualified IPO, 15% or (ii) after a Qualified IPO, 17.5%, of all remaining

pre-incentive fee net investment income above the Catch-up.

The second part, the capital gains incentive fee, is determined and payable in arrears as of the end of each fiscal year (or upon a Qualified IPO or

termination of the Investment Advisory Agreement), (i) prior to a Qualified IPO, 15%, or (ii) after a Qualified IPO, 17.5%, of our realized capital gains, if any, on a cumulative basis from Inception through the end of the fiscal year,

computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees.

The Advisor agreed to waive the income based portion of the incentive fee from February 1, 2020 through July 31, 2021 following the closing of the

Alcentra Acquisition on January 31, 2020.

Income Incentive Fee

incentive fee, was calculated and payable quarterly in arrears and equaled (a) 100% of the excess of the pre-incentive fee net investment income for the immediately preceding calendar quarter, over a

preferred return of 1.5% per quarter (6.0% annualized) (the Hurdle), and a catch-up feature until the Adviser received 15% of the pre-incentive fee net

investment income for the current quarter up to 1.7647% (the Catch-up), and (b) 15% of all remaining pre-incentive fee net investment income above the Catch-up.

The second part, the capital gains incentive fee, was determined and payable in arrears as of the

end of each fiscal year at a rate of 15.0% of our realized capital gains, if any, on a cumulative basis from Inception through the end of the fiscal year, computed net of all realized capital losses and unrealized capital depreciation on a

cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees.

At the 2018 Annual Meeting of Stockholders, in connection with the extension of the deadline to consummate a

Qualified IPO, the Adviser agreed to waive its rights under the Investment Advisory Agreement to (i) the income incentive fee and (ii) the capital gain incentive fee for the period from April 1, 2018 through February 1, 2020.

Incentive Fee (effective February 1, 2020)

Under the Amended and Restated Investment Advisory Agreement, the Incentive Fee consists of two parts.

The first part, the income incentive fee, is calculated

and payable quarterly in arrears and (a) equals 100% of the excess of the pre-incentive fee net investment income for the immediately preceding calendar quarter, over a preferred return of 1.75% per

quarter (7.0% annualized) (the Hurdle), and a catch-up feature until the Adviser has received 17.5%, of the pre-incentive fee net investment income for the

current quarter up to 2.1212% (the Catch-up), and (b) 17.5% of all remaining pre-incentive fee net investment income above the Catch-up.

In addition, under the terms of the Amended and Restated Investment Advisory Agreement, the

Adviser agreed to waive the income based portion of the incentive fee from February 1, 2020 through July 31, 2021.

Once the Adviser begins to earn income incentive fees, the Adviser will voluntarily waive the income incentive fees

attributable to the investment income accrued by us as a result of our investment in GACP II.

The second part, the capital gains incentive fee, is

determined and payable in arrears as of the end of each fiscal year at a rate of 17.5% of our realized capital gains, if any, on a cumulative basis from Inception through the end of the fiscal year, computed net of all realized capital losses and

unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees.

Since the Qualified

IPO occurred on a date other than the first day of a calendar quarter, the income incentive fee shall be calculated for such calendar quarter at a weighted rate calculated based on the fee rates applicable before and after a Qualified IPO based on

the number of days in such calendar quarter before and after the Qualified IPO.

For the avoidance of doubt, such capital gains incentive fee shall be equal to 15.0% of our realized capital gains on a cumulative basis from Inception through the day

before the Qualified IPO, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gains incentive fees.

Following the Qualified IPO, solely for

the purposes of calculating the capital gains incentive fee, we will be deemed to have previously paid capital gains incentive fees prior to a Qualified IPO equal to the product obtained by multiplying (a) the actual aggregate amount of

previously paid capital gains incentive fees for all periods prior to the Qualified IPO by (b) the percentage obtained by dividing (x) 17.5% by (y) 15.0%.

In the event that the Amended and Restated Investment Advisory Agreement shall

terminate as of a date that is not a fiscal year end, the termination date shall be treated as though it were a fiscal year end for purposes of calculating and paying a capital gains incentive fee.

Pre-incentive fee net investment income means interest income, dividend income and any other income (including any

other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that we receive from portfolio companies but excluding fees for providing managerial assistance) accrued during the calendar quarter, minus

operating expenses for the quarter (including the base management fee, any expenses payable under the Administration Agreement, and any interest expense and dividends paid on any outstanding preferred stock, but excluding the incentive fee).

Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature such as market discount, OID, debt instruments with PIK interest, preferred stock with PIK dividends and zero-coupon securities, accrued income that we have not yet received in cash.

other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that we receive from portfolio companies) accrued during each calendar quarter, minus

operating expenses for such quarter (including the base management fee, expenses payable under the Administration Agreement and any interest expense and distributions paid on any issued and outstanding debt or preferred stock, but excluding the

incentive fee).

Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as market discount, original issue discount, debt instruments with PIK

interest, preferred stock with PIK dividends and zero coupon securities), accrued income that the we have not yet received in cash.

Pre-incentive fee net investment income does not include any realized capital

gains, realized capital losses or unrealized capital appreciation or depreciation.

Pre-incentive fee net investment income will be compared to a Hurdle Amount equal to the product of (i) the

Hurdle rate of 1.50% or 1.75% per quarter, 6.00% or 7.00% annualized, prior to and effective February 1, 2020, respectively, and (ii) our net assets (defined as total assets less indebtedness, before taking into account any incentive

fees payable during the period), at the end of the immediately preceding calendar quarter, subject to a catch-up provision incurred at the end of each calendar quarter.

See Item 1A.

Risk FactorsRisks Relating to Our Business and StructureOur management and incentive fee structure may

create incentives for the Advisor that are not fully aligned with the interests of our stockholders and may induce the Advisor to make speculative investments.

Pre-incentive fee net investment income does not include any realized or unrealized capital gains or losses or

unrealized capital appreciation or depreciation.

Because of the structure of the incentive fee, it is possible that we may pay an incentive fee in a quarter where we incur a loss.

For example, if we receive

pre-incentive fee net investment income in excess of the Hurdle rate for a quarter, we will pay the applicable incentive fee even if we have incurred a loss in that quarter due to realized and unrealized

capital losses.

In calculating the income incentive fee, pre-incentive fee net investment income is compared to a

Hurdle Amount equal to the product of (i) the Hurdle rate of 1.50% per quarter (6.00% annualized) and (ii) our net assets (defined as total assets less indebtedness and before taking into account any incentive fees payable

during the period), at the end of the immediately preceding calendar quarter.

If market interest rates rise, we may be able to invest our funds in debt instruments that provide for a higher return, which would increase our pre-incentive fee net investment income and make it easier for the Advisor to surpass the fixed Hurdle rate and receive an incentive fee based on such net investment income.

PIK interest and OID will also increase

our pre-incentive fee net investment income and make it easier to surpass the fixed Hurdle rate.

Our pre-incentive fee net investment income used to calculate this part

of the incentive fee is also included in the amount of our total assets (other than cash and cash equivalents but including assets purchased with borrowed amounts) used to calculate the 1.5% base management fee.

Under the terms of the Transaction Support Agreement that went into effect on January 31, 2020, among

other things, the Advisor agreed to (i) increase the incentive fee hurdle from 6% to 7% annualized and (ii) waive the income based portion of the incentive fee from February 1, 2020 through July 31, 2021.

Prior to closing of the Alcentra Acquisition on January 31, 2020, we paid the income incentive fee in each calendar quarter as follows:

no income incentive fee in the calendar quarter in which our

pre-incentive fee net investment income did not exceed the Hurdle;

100% of our pre-incentive fee net investment income with respect to that

portion of such pre-incentive fee net investment income, if any, that exceeds the Hurdle but is less than or equal to an amount (the Pre-Qualified IPO Catch-Up Amount) determined on a quarterly basis by multiplying 1.7647% by our net assets (as defined above) at the beginning of each applicable calendar quarter.

Pre-Qualified IPO Catch-Up Amount is intended to provide the Advisor with an incentive fee of 15% on all of our pre-incentive fee

net investment income when our pre-incentive fee net investment income reaches the Pre-Qualified IPO Catch-Up Amount in any

calendar quarter;

for any calendar quarter in which our pre-incentive fee net investment

income exceeds the Pre-Qualified IPO Catch-Up Amount, the income incentive fee shall equal 15% of the amount of our pre-incentive

fee net investment income for the calendar quarter.

On and after the closing of the Alcentra Acquisition on January 31, 2020, we

will pay the income incentive fee in each calendar quarter as follows:

no income incentive fee in any calendar quarter in which the our

pre-incentive fee net investment income does not exceed the Hurdle Amount;

100% of our pre-incentive fee net investment income with respect to that

portion of such pre-incentive fee net investment income, if any, that exceeds the Hurdle Amount but is less than or equal to an amount (the Post-Qualified IPO

Catch-Up Amount) determined on a quarterly basis by multiplying 1.8182% by our net assets (as defined above) at the beginning of each applicable calendar quarter.

The Post-Qualified IPO Catch-Up Amount is intended to provide the Advisor with an incentive fee of 17.5% on all of our pre-incentive fee net investment income when our

pre-incentive fee net investment income reaches the Post-Qualified IPO Catch-Up Amount in any calendar quarter;

for any calendar quarter in which our pre-incentive fee net investment

income exceeds the Post-Qualified IPO Catch-Up Amount, the income incentive fee shall equal 17.5% of the amount of our pre-incentive fee net investment income for the

calendar quarter.

These calculations are appropriately pro-rated for any period of less than

three months and adjusted for any share issuances or repurchases by us during the current quarter.

We do not currently have a share repurchase program and share repurchases will be effected only in extremely limited circumstances in accordance with

applicable law.

The income incentive fee shall be calculated for the first calendar quarter of 2020 at a weighted rate calculated based on the fee rates applicable before and after the closing of the Alcentra Acquisition based on the number of days

in such calendar quarter before and after the closing of the Alcentra Acquisition.

Capital Gains Incentive Fee

The capital gains incentive fee is determined and payable in arrears in cash as of the end of each fiscal year (or upon termination of the Investment Advisory

Agreement, as of the termination date), and equals (i) 15% of our realized capital gains as of the end of the fiscal year prior to the closing of the Alcentra Acquisition, and (ii) 17.5% of our realized capital gains as of the end of the

fiscal year after the closing of the Alcentra Acquisition.

In determining the capital gains incentive fee payable to the Advisor, we calculate the cumulative aggregate realized capital gains and cumulative aggregate realized capital losses since

Inception, and the aggregate unrealized capital depreciation as of the date of the calculation, as applicable, with respect to each of the investments in our portfolio.

For this purpose, cumulative aggregate realized capital gains, if any, equals

the sum of the differences between the net sales price of each investment, when sold, and the original cost of such investment since Inception.

Cumulative aggregate realized capital losses equals the sum of the amounts by which the net sales price

of each investment, when sold, is less than the original cost of such investment since Inception.

Aggregate unrealized capital depreciation equals the sum of the difference, if negative, between the valuation of each investment as of the applicable

calculation date and the original cost of such investment.

At the end of the applicable year, the amount of capital gains that serves as the basis for our calculation of the capital gains incentive fee equals the cumulative aggregate realized

capital gains less cumulative aggregate realized capital losses, less aggregate unrealized capital depreciation, with respect to our portfolio of investments.

If this number is positive at the end of such year, then the capital gains incentive fee

for such year will equal 15% or 17.5%, as applicable, of such amount, less the aggregate amount of any capital gains incentive fees paid in respect of our portfolio in all prior years as calculated in accordance with the below after the closing of

the Alcentra Acquisition.

At the 2018 Annual Meeting of Stockholders, we received shareholder approval to extend the deadline to

consummate a Qualified IPO (the Qualified IPO Deadline).

The Qualified IPO Deadline was extended to June 30, 2022.

In exchange for the Qualified IPO Deadline extension, the Advisor agreed to waive its rights under the Investment

Advisory Agreement to the capital gain incentive fee for the period from April 1, 2018 through February 3, 2020, which is the date of our listing on the NASDAQ stock exchange.

Our Board will monitor the mix and performance of our investments over time and will seek to satisfy itself that the Advisor is acting in our interests and

that our fee structure appropriately incentivizes the Advisor to do so.

Risk FactorsRisks Relating to Our Business and StructureOur management and incentive fee structure may create incentives for

the Adviser that are not fully aligned with the interests of our stockholders and may induce the Adviser to make speculative investments.

GAAP Incentive Fee on Cumulative Unrealized Capital Appreciation

We accrue, but do not pay, a portion of the Incentive Fee based on capital gains with respect to net unrealized appreciation.

Under GAAP, we are required to

accrue an Incentive Fee based on capital gains that includes net realized capital gains and losses and net unrealized capital appreciation and depreciation on investments held at the end of each period.

In calculating the accrual for the Incentive

Fee based on capital gains, we consider the cumulative aggregate unrealized capital appreciation in the calculation, since an Incentive Fee based on capital gains would be payable if such unrealized capital appreciation were realized, even though

such unrealized capital appreciation is not permitted to be considered in calculating the fee payable under the Amended and Restated Investment Advisory Agreement.

This accrual is calculated using the aggregate cumulative realized capital gains and

losses and aggregate cumulative unrealized capital appreciation or depreciation.

If such amount is positive at the end of a period, then we record a capital gains incentive fee equal to 15% (pre February 3, 2020) or 17.5% (effective

February 3, 2020) of such amount, minus the aggregate amount of actual Incentive Fees based on capital gains paid in all prior periods.

If such amount is negative, then there is no accrual for such period.

There can be no assurance that such

unrealized capital appreciation will be realized in the future.

Our Board monitors the mix and performance of our investments over time and will seek to satisfy itself that

the Adviser is acting in our interests and that our fee structure appropriately incentivizes the Adviser to do so.

The Investment Advisory Agreement has been unanimously approved by the Board.

Unless earlier terminated as described below, the Investment Advisory Agreement

will remain in effect until February 1, 2021 and will remain in effect from year to year thereafter if approved annually by (i) the vote of the Board, or by the vote of a majority of our outstanding voting securities, and (ii) the

vote of a majority of our independent directors.

Unless terminated earlier as described below, the Investment Advisory Agreement

will remain in effect until January 5, 2023 and will remain in effect from year to year thereafter if approved annually by (i) the vote of the Board, or by the vote of a majority of our outstanding voting securities, and (ii) the vote

of a majority of our independent directors.

The Investment Advisory Agreement will automatically terminate in the event of its assignment (as defined in the 1940 Act).

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See Item 1A.

Risk FactorsRisks Relating to our Business and StructureWe are dependent upon key personnel of CCG LP and the Advisor .

Risk FactorsRisks Relating to our Business and StructureWe are dependent upon key personnel of Crescent and the Adviser .

Indemnification

Under the Investment Advisory Agreement,

the Advisor has not assumed any responsibility to us other than to render the services called for under that agreement.

The Advisor will not be responsible for any action of the Board in following or declining to follow the Advisors advice or

the Adviser has not assumed any responsibility to us other than to render the services called for under that agreement.

The Adviser will not be responsible for any action of the Board in following or declining to follow the Advisers advice or

recommendations.

Under the Investment Advisory Agreement, the Advisor, its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with the Advisor, including, without limitation, the

Administrator, and any person controlling or controlled by the Advisor will not be liable to us, any of our subsidiaries, our directors, our stockholders or any subsidiarys stockholders or partners for acts or omissions performed in accordance

with and pursuant to the Investment Advisory Agreement, except those resulting from acts constituting gross negligence, willful misfeasance, bad faith or reckless disregard of the duties that the Advisor owes to us under the Investment Advisory

In addition, as part of the Investment Advisory Agreement, we have agreed to indemnify the Advisor and each of its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated

with the Advisor, from and against any claims or liabilities, including reasonable legal fees and other expenses reasonably incurred, arising out of or in connection with our business and operations or any action taken or omitted on our behalf

Under the Investment Advisory Agreement, the Adviser, its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with the Adviser, including, without limitation, the

Administrator, and any person controlling or controlled by the Adviser will not be liable to us, any of our subsidiaries, our directors, our stockholders or any subsidiarys stockholders or partners for acts or omissions performed in accordance

In addition, as part of the Investment Advisory Agreement, we have agreed to indemnify the Adviser and each of its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated

with the Adviser, from and against any claims or liabilities, including reasonable legal fees and other expenses reasonably incurred, arising out of or in connection with our business and operations or any action taken or omitted on our behalf

pursuant to authority granted by the Investment Advisory Agreement, except where attributable to gross negligence, willful misfeasance, bad faith or reckless disregard of such persons duties under the Investment Advisory Agreement.

protections may lead the Advisor to act in a riskier manner when acting on our behalf than it would when acting for its own account.

protections may lead the Adviser to act in a riskier manner when acting on our behalf than it would when acting for its own account.

The Investment Advisory Agreement may be terminated by either party without penalty on 60 days written notice

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Administration Agreement

On June 2, 2015, we also

entered into an administration agreement (the Initial Administration Agreement) with the Administrator, an affiliate of CCG LP, pursuant to which the Administrator agreed to provide certain services and facilities services necessary for

us to operate.

On February 1, 2020, we entered into the Amended and Restated Administration Agreement (as amended and restated, the Administration Agreement) by and between us and the Administrator.

Pursuant to the Administration

Agreement, the Administrator has agreed to provide a variety of services, including providing office space, equipment and office services, maintaining financial records, preparing reports to stockholders and reports filed with the SEC, and managing

the payment of expenses and the performance of administrative and professional services rendered by others.

The Administrator has also hired a sub-administrator to assist in the provision of administrative

We will reimburse the Administrator for its costs and expenses and our allocable portion of overhead incurred by it in performing its obligations under the Administration Agreement, including compensation paid to or compensatory

distributions received by our officers (including our Chief Compliance Officer and Chief Financial Officer) and any of their respective staff who provide services to us, operations staff who provide services to us, and any other staff, to the extent

they perform a role in our Sarbanes-Oxley internal control assessment.

Our allocable portion of overhead is determined by the Administrator, which expects to use various methodologies such as allocation based on the percentage of time certain

individuals devote, on an estimated basis, to our business and affairs, and is subject to oversight by the Board.

The sub-administrator is paid its compensation for performing its sub-administrative services under the sub-administration agreement.

The Administrator will waive its right to be reimbursed in the event that any such reimbursements would

cause any distributions to our stockholders to constitute a return of capital.

In addition, the Administrator is permitted to delegate its duties under the Administration Agreement to affiliates or third parties.

To the extent the Administrator

outsources any of its functions, we will pay the fees associated with such functions on a direct basis, without incremental profit to the Administrator.

On June 2, 2015, we

entered into the Administration Agreement with the Administrator, as amended and restated on February 1, 2020.

Under the terms of the Administration Agreement, the Administrator provides administrative services.

These services include providing

office space, equipment and office services, maintaining financial records, preparing reports to stockholders and reports filed with the SEC, and managing the payment of expenses and the performance of administrative and professional services

rendered by others.

Certain of these services are reimbursable to the Administrator under the terms of the Administration Agreement.

In addition, the Administrator is permitted to delegate its duties under the Administration Agreement to affiliates

or third parties.

To the extent the Administrator outsources any of its functions, we will pay the fees associated with such functions on a direct basis, without incremental profit to the Administrator.

The Administration Agreement may be terminated

by either party without penalty on 60 days written notice to the other party.

No person who is an officer, director or employee of the

Administrator or its affiliates and who serves as a director receives any compensation for his or her services as a director.

However, we reimburse the Administrator (or its affiliates) for an allocable portion of the compensation paid by the

Administrator or its affiliates to our compliance professionals, legal counsel, and other professionals who spend time on such related activities (based on the percentage of time those individuals devote, on an estimated basis, to our business and

The allocable portion of the compensation for these officers and other professionals are included in the administration expenses paid to the Administrator.

Directors who are not affiliated with the Administrator or its affiliates receive

compensation for their services and reimbursement of expenses incurred to attend meetings.

On June 5, 2015, we entered into sub-administration agreement with State Street Bank and Trust Company (SST) to perform certain administrative, custodian and other services.

The sub-administration

agreement with SST had an initial term of three years ending June 5, 2018 and shall automatically renew for 1-year terms unless a written notice of non-renewal is

delivered by us or SST.

We do not reimburse the Administrator for any services for which we pay a separate sub-administrator and custodian fee to SST.

The Administration Agreement has been approved by our Board.

6 unchanged sentences

See Item 1A.

Risk FactorsRisks Relating to Our Business and StructureDependence Upon Key Personnel of CCG LP .

Risk FactorsRisks Relating to Our Business and StructureDependence Upon Key Personnel of Crescent .

License Agreement

We have entered into a license

agreement with CCG LP under which CCG LP granted us a non-exclusive, royalty-free license to use the name Crescent Capital.

agreement with Crescent under which Crescent granted us a non-exclusive, royalty-free license to use the name Crescent Capital.

Our primary competitors in providing

7 unchanged sentences

competitors are not subject to the regulatory restrictions that the 1940 Act imposes on us as a BDC or to the distribution and other requirements we must satisfy to maintain our qualification as a RIC.

We expect to use the expertise of the investment professionals of CCG LP to which we will have access to assess investment risks and determine appropriate

We expect to use the expertise of Crescents investment professionals to which we will have access to assess investment risks and determine appropriate

pricing for our investments in portfolio companies.

In addition, we expect that the relationships of the senior members of CCG LP will enable us to learn about, and compete effectively for, financing opportunities with attractive middle-market

In addition, we expect that the relationships of Crescents senior members will enable us to learn about, and compete effectively for, financing opportunities with attractive middle-market

companies in the industries in which we seek to invest.

3 unchanged sentences

Fees and Expenses

Our primary operating expenses will

include the payment of fees to the Advisor under the Investment Advisory Agreement, our allocable portion of overhead expenses under the Administration Agreement with our Administrator, operating costs associated with our sub-administration, custodian and transfer agent agreements with State Street Bank and Trust Company (the Sub-Administration Agreements) and other operating costs

described below.

We will bear all other out-of-pocket costs and expenses of our operations and transactions, including:

allocated organization costs from the Advisor incurred prior to the Commencement of Operations up to a maximum of

$1.5 million;

Our primary operating expenses include

the payment of management fees and incentive fees to the Adviser under the Investment Advisory Agreement, as amended, our allocable portion of overhead expenses under the Administration Agreement, operating costs associated with our sub-administration agreement with State Street Bank and Trust Company and other operating costs described below.

The management and incentive fees compensate the Adviser for its work in identifying, evaluating,

negotiating, closing and monitoring our investments.

We bear all other out-of-pocket costs and expenses of our operations and transactions, including:

the cost of calculating our net asset value, including the cost of any third-party valuation services;

fidelity bond, directors and officers liability insurance and other insurance premiums;

direct costs, such as printing, mailing, long distance telephone and staff;

fees and expenses associated with independent audits and outside legal costs;

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upon our allocable portion of the Administrators overhead in performing its obligations under the Administration Agreement, rent and the allocable portion of the cost of certain professional services provided to us, including but not limited

to, our chief compliance officer, chief financial officer and their respective staffs);

to, our compliance professionals, our legal counsel and other professionals);

federal, state and local taxes;

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all other expenses reasonably incurred by us in connection with making investments and administering our

We have agreed to repay the Advisor for initial organization costs and equity offering costs incurred prior

to the Commencement of Operations up to a maximum of $1.5 million on a pro rata basis over the first $350 million of invested capital not to exceed 3 years from the initial capital commitment.

The Advisor has agreed to extend the

reimbursement period for the initial organization costs and equity offering costs to June 30, 2019.

The Advisor is responsible for organization and private equity offerings costs in excess of $1.5 million.

Incentive Fees and costs relating to future offerings of securities would be incremental.

We agreed to repay the Adviser for initial organization costs and equity offering costs incurred prior to

the commencement of our operations up to a maximum of $1.5 million on a pro rata basis over the first $350.0 million of invested capital not to exceed 3 years from the initial capital commitment on June 26, 2015.

The initial 3 year

term was later extended to June 30, 2019, with shareholder approval.

To the extent such costs related to equity offerings, these costs were charged as a reduction of capital upon the issuance of common shares.

To the extent such costs related

to organization costs, these costs were expensed in the Consolidated Statements of Operations upon the issuance of common shares.

The Adviser was responsible for organization and private equity offerings costs in excess of $1.5 million.

Capital Resources and Borrowings

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Additionally, we are permitted, under specified conditions, to issue multiple classes of indebtedness and one class of stock senior to our common stock if our asset coverage, as defined in the 1940 Act, is at least equal to 150%

immediately after each such issuance (150% after March 3, 2021 or earlier if we receive stockholder approval of the reduced asset coverage requirement).

Furthermore, while any indebtedness and senior securities remain outstanding, we must make

provisions to prohibit any distribution to our stockholders or the repurchase of such securities or shares unless we meet the applicable asset coverage ratios at the time of the distribution or repurchase.

In connection with borrowings, our lenders

may require us to pledge assets, investor commitments to fund capital calls and/or the proceeds of those capital calls.

immediately after each such issuance.

Furthermore, while any indebtedness and senior securities remain outstanding, we must make provisions to prohibit any distribution to our stockholders or the repurchase of such securities or shares unless we

meet the applicable asset coverage ratios at the time of the distribution or repurchase.

In connection with borrowings, our lenders may require us to pledge assets, investor commitments to fund capital calls and/or the proceeds of those capital

In addition, the lenders may ask us to comply with positive or negative covenants that could have an effect on our operations.

For more information on our debt, see ITEM 7.

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONSFinancial Condition, Liquidity and Capital Resources.

information on our debt, see ITEM 7.

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSFinancial Condition, Liquidity and Capital Resources.

Dividend Reinvestment Plan (DRIP)

We adopted a dividend reinvestment plan that provides for reinvestment of our dividends and other distributions on behalf of our stockholders, unless a

stockholder elects to receive cash.

As a result, if our Board authorizes, and we declare, a cash dividend or other distribution, then stockholders who are participating in the dividend reinvestment plan, will have their cash dividends and

distributions automatically reinvested in additional shares of Common Stock, rather than receiving cash dividends and distributions.

February 3, 2020, which is the date of our listing on NASDAQ, only stockholders who opted in to the dividend reinvestment plan had their cash dividends and distributions automatically reinvested in additional shares of Common Stock.

After February 3, 2020, stockholders who do not opt out of the dividend reinvestment plan will have their cash dividends and distributions automatically reinvested in additional shares of the Companys common stock.

elections of stockholders that made an election prior to February 3, 2020 remain effective.

a dividend reinvestment plan that provides for reinvestment of our dividends and other distributions on behalf of our stockholders, unless a stockholder elects to receive cash.

As a result, if our Board authorizes, and we declare, a cash dividend or

other distribution, then stockholders who are participating in the dividend reinvestment plan will have their cash dividends and distributions automatically reinvested in additional shares of Common Stock, rather than receiving cash dividends and

distributions.

Resource Sharing Agreement

We do not currently have any employees.

We depend on the diligence, skill and network of business contacts of the investment professionals of the Advisor to

achieve our investment objective.

The Advisor is an affiliate of CCG LP and depends upon access to the investment professionals and other resources of CCG LP and its affiliates to fulfill its obligations to us under the Investment Advisory

The Advisor also depends upon CCG LP to obtain access to deal flow generated by the investment professionals of CCG LP and its affiliates.

Each of our officers will also be an employee of the Advisor, CCG LP or its affiliates.

Pursuant to its Resource Sharing Agreement with CCG LP, the Advisor will have access to the individuals who

comprise our Advisors investment committee, and a team of additional experienced investment professionals who, collectively, comprise the Advisors investment team.

The Advisor may hire additional investment professionals to provide

services to us, based upon its needs.

currently have any employees.

We depend on the diligence, skill and network of business contacts of the investment professionals of the Adviser to achieve our investment objective.

The Adviser is an affiliate of Crescent and depends upon access to

the investment professionals and other resources of Crescent and its affiliates to fulfill its obligations to us under the Investment Advisory Agreement.

The Adviser also depends upon Crescent to obtain access to deal flow generated by

Crescents investment professionals and its affiliates.

Each of our officers will also be an employee of the Adviser, Crescent or its affiliates.

Pursuant to its Resource Sharing Agreement with Crescent, the Adviser will have access to the individuals who comprise our Advisers investment

committee, and a team of additional experienced investment professionals who, collectively, comprise the Advisers investment team.

The Adviser may hire additional investment professionals to provide services to us, based upon its needs.

Regulation as a Business Development Company

We are regulated as a BDC under the 1940 Act.

A BDC must be organized in the United States for the purpose of investing in or lending primarily to private

companies and making significant managerial assistance available to them.

A BDC may use capital provided by public stockholders and from other sources to make long-term, private investments in businesses.

A publicly-traded BDC provides stockholders

the ability to retain the liquidity of a publicly-traded stock while sharing in the possible benefits, if any, of investing in primarily privately owned companies.

Prior to February 3, 2020, which is the date of our listing on NASDAQ in

connection with the Alcentra Acquisition, our stock was privately held.

We may not change the nature of our business so as to cease to be, or withdraw

our election as, a BDC unless authorized by vote of a majority of the outstanding voting securities, as required by the 1940 Act.

regulated as a BDC under the 1940 Act.

A BDC must be organized in the United States for the purpose of investing in or lending primarily to private companies and making significant managerial assistance available to them.

A BDC may use capital

provided by public stockholders and from other sources to make long-term, private investments in businesses.

A publicly-traded BDC provides stockholders the ability to retain the liquidity of a publicly-traded stock while sharing in the possible

benefits, if any, of investing in primarily privately owned companies.

Prior to February 3, 2020, which is the date of our listing on NASDAQ in connection with the Alcentra Acquisition, our stock was privately held.

We may not change the nature of our business so as to cease to be, or withdraw our election as, a BDC unless authorized by vote of a majority of the

outstanding voting securities, as required by the 1940 Act.

A majority of the outstanding voting securities of a company is defined under the 1940 Act as the lesser of:

(a) 67% or more of such companys voting securities present at a meeting if more than 50% of the outstanding voting securities of such company are present or represented by proxy, or (b) more than 50% of the outstanding voting

securities of such company.

We do not anticipate any substantial change in the nature of our business.

As with other companies regulated by the 1940 Act,

a BDC must adhere to certain substantive regulatory requirements.

A majority of our directors must be persons who are not interested persons, as that term is defined in the 1940 Act.

Additionally, we are required to provide and maintain a bond

issued by a reputable fidelity insurance company to protect the BDC.

Furthermore, as a BDC, we will be prohibited from protecting any director or officer against any liability to us or our stockholders arising from willful misfeasance, bad faith,

gross negligence or reckless disregard of the duties involved in the conduct of such persons office.

We may also be prohibited under the 1940 Act from knowingly participating in certain transactions with our affiliates without the prior

approval of our directors who are not interested persons and, in some cases, prior approval by the SEC through an exemptive relief order (other than in certain limited situations pursuant to current regulatory guidance).

(a) 67% or more of such companys voting securities present at a

meeting if more than 50% of the outstanding voting securities of such company are present or represented by proxy, or (b) more than 50% of the outstanding voting securities of such company.

We do not anticipate any substantial change in the

nature of our business.

As with other companies regulated by the 1940 Act, a BDC must adhere to certain substantive regulatory requirements.

of our directors must be persons who are not interested persons, as that term is defined in the 1940 Act.

Additionally, we are required to provide and maintain a bond issued by a reputable fidelity insurance company to protect the BDC.

as a BDC, we will be

prohibited from protecting any director or officer against any liability to us or our stockholders arising from willful misfeasance, bad faith, gross negligence or reckless disregard of the

duties involved in the conduct of such persons office.

We may also be prohibited under the 1940 Act from knowingly participating in certain transactions with our affiliates without the prior approval of our directors who are not interested

persons and, in some cases, prior approval by the SEC through an exemptive relief order (other than in certain limited situations pursuant to current regulatory guidance).

Also, while we may borrow funds to make investments, our ability to use debt is limited in certain significant aspects.

In particular, under the provisions of

the 1940 Act, BDCs must have at least 200% asset coverage calculated pursuant to the 1940 Act (i.e., we are permitted to borrow one dollar for every dollar we have in assets less all liabilities and indebtedness not represented by senior securities

issued by us) in order to incur debt or issue preferred stock (which we refer to collectively as senior securities) unless the BDC obtains approval (either stockholder approval or approval of a required majority of its board

of directors) to apply the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act, as amended by the Small Business Credit Availability Act (the SBCAA), reducing the required asset coverage ratio

applicable to the BDC from 200% to 150% (i.e., the revised regulatory leverage limitation permits BDCs to double the amount of borrowings, such that we would be able to borrow up to two dollars for every dollar we have in assets less all

liabilities and indebtedness not represented by senior securities issued by us).

Currently, our asset coverage requirement applicable to senior

securities is 200%.

On March 3, 2020, the Board, including a required majority (as such term is defined in Section 57(o) of the 1940 Act) of the Board, approved the application of the modified asset coverage requirement set

forth in Section 61(a)(2) of the 1940 Act, as amended by the SBCAA.

As a result, effective on March 3, 2021 (unless we receive earlier stockholder approval), our asset coverage requirement applicable to senior securities will be reduced

from 200% to 150%.

As of December 31, 2019, our asset coverage was 225%.

We do not intend to acquire securities issued by any investment

company that exceed the limits imposed by the 1940 Act.

Under these limits, except for registered money market funds, we generally cannot acquire more than 3% of the voting stock of any investment company, invest more than 5% of the value of our

total assets in the securities of one investment company or invest more than 10% of the value of our total assets in the securities of investment companies in the aggregate.

The portion of our portfolio invested in securities issued by investment

companies ordinarily will subject our stockholders to additional expenses.

Our investment portfolio is also subject to diversification requirements by virtue of our intention to be a RIC for U.S.

the 1940 Act, BDCs are generally able to issue senior securities such that their asset coverage, as defined in the 1940 Act, equals at least 200% of gross assets less all liabilities and indebtedness not represented by senior securities, after each

issuance of senior securities.

In March 2018, the Small Business Credit Availability Act added Section 61(a)(2) to the 1940 Act, a successor provision to Section 61(a)(1) referenced therein, which reduces the asset coverage requirement

applicable to BDCs from 200% to 150% so long as the BDC meets certain disclosure requirements and obtains certain approvals.

On March 3, 2020, our Board of Directors approved, and on May 4, 2020, at an annual meeting of our stockholders,

our stockholders approved, the application to us of the reduced asset coverage requirements in Section 61(a) of the 1940 Act.

The application of the reduced asset coverage requirement, which became effective on May 4, 2020, permits us,

provided certain requirements are satisfied, to double the maximum amount of leverage that it is permitted to incur by reducing the asset coverage requirement applicable to us from 200% to 150% (i.e., we are permitted to borrow up to two dollars for

every dollar we have in assets less all liabilities and indebtedness not represented by senior securities issued by us) in order to incur debt or issue preferred stock (which we refer to collectively as senior securities).

We do not intend to acquire securities issued by any investment company that exceed the limits imposed by the 1940 Act.

Under these limits, except for

registered money market funds, we generally cannot acquire more than 3% of the voting stock of any investment company, invest more than 5% of the value of our total assets in the securities of one investment company or invest more than 10% of the

value of our total assets in the securities of investment companies in the aggregate.

The portion of our portfolio invested in securities issued by investment companies ordinarily will subject our stockholders to additional expenses.

Our investment

portfolio is also subject to diversification requirements by virtue of our intention to be a RIC for U.S.

tax purposes.

We are subject to periodic examinations by the SEC for compliance with the 1940 Act.

We are subject to periodic

examinations by the SEC for compliance with the 1940 Act.

As a BDC, we are subject to certain risks and uncertainties.

See Item 1A.

Risk Factors .

Qualifying Assets

We may invest up to 30% of our portfolio opportunistically in non-qualifying assets.

However, under the

1940 Act, a BDC may not acquire any asset other than assets of the type listed in Section 55(a) of the 1940 Act, which are referred to as qualifying assets, unless, at the time the acquisition is made, qualifying assets

represent at least 70% of the BDCs total assets.

The principal categories of qualifying assets relevant to our business are the following:

We may invest

up to 30% of our portfolio opportunistically in non-qualifying assets.

However, under the 1940 Act, a BDC may not acquire any asset other than assets of the type listed in

Section 55(a) of the 1940 Act, which are referred to as qualifying assets, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the BDCs total assets.

The principal categories of

qualifying assets relevant to our business are the following:

Securities purchased in transactions not involving any public offering from the issuer of such securities,

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In most cases, we will not have board influence over portfolio companies.

In some instances, the Advisors investment professionals may obtain board

In some instances, the Advisers investment professionals may obtain board

representation or observation rights in conjunction with our investments.

In conjunction with our Advisors investment committee and our Board, the Advisor will take an active approach in monitoring all investments, which includes reviews of

In conjunction with our Advisers investment committee and our Board, the Adviser will take an active approach in monitoring all investments, which includes reviews of

financial performance on at least a quarterly basis and may include discussions with management and/or the equity sponsor.

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Thus, we do not intend to enter into repurchase agreements with a single counterparty in excess of this

Our Advisor will monitor the creditworthiness of the counterparties with which we enter into repurchase agreement transactions.

Our Adviser will monitor the creditworthiness of the counterparties with which we enter into repurchase agreement transactions.

We are permitted, under specified conditions, to issue multiple classes of indebtedness and one class of stock senior to our common stock

if our asset coverage, as defined in the 1940 Act, is at least equal to 200% immediately after each such issuance.

In addition, while any senior securities remain outstanding, we must make provisions to prohibit any distribution to our stockholders

or the repurchase of such securities or shares unless we meet the applicable asset coverage ratios at the time of the distribution or repurchase.

We may also borrow amounts up to 5% of the value of our total assets for temporary or emergency

purposes without regard to asset coverage.

The SBCAA, which was signed into law on March 23, 2018, among other things, amended Section 61(a) of

the 1940 Act to add a new Section 61(a)(2) that reduces the asset coverage requirement applicable to a BDC from 200% to 150% so long as the BDC meets certain disclosure requirements and obtains certain approvals.

The reduced asset coverage

requirement would permit a BDC to have a ratio of total consolidated assets to outstanding indebtedness of 2:1 as compared to a maximum of 1:1 under the 200% asset coverage requirement.

On March 3, 2020, the Board, including a required

majority (as such term is defined in Section 57(o) of the 1940 Act) of the Board, approved the modified asset coverage requirements under the SBCAA.

As a result, our asset coverage requirements for senior securities will be changed from

200% to 150%, effective as of March 3, 2021, unless approved earlier by a vote of our stockholders, in which case the 150% minimum asset coverage ratio will be effective on the day after such approval.

The 1940 Act imposes limitations on a BDCs issuance of preferred shares, which are considered senior securities and thus are subject to the

200% asset coverage requirement described above (150% after March 3, 2021 or earlier if we receive stockholder approval of the reduced asset coverage requirement).

In addition, (i) preferred shares must have the same voting rights as the

common stockholders (one share, one vote);

and (ii) preferred stockholders must have the right, as a class, to appoint directors to the board of directors.

if our asset coverage, as defined in the 1940 Act, as amended, is at least equal to 150% immediately after each such issuance.

In addition, while any senior securities remain outstanding, we must make provisions to prohibit any distribution to our

stockholders or the repurchase of such securities or shares unless we meet the applicable asset coverage ratios at the time of the distribution or repurchase.

We may also borrow amounts up to 5% of the value of our total assets for temporary or

emergency purposes without regard to asset coverage.

The 1940 Act imposes limitations on a BDCs issuance of preferred shares, which are considered

senior securities and thus are subject to the 150% asset coverage requirement described above.

In addition, (i) preferred shares must have the same voting rights as the common stockholders (one share, one vote);

(ii) preferred stockholders must have the right, as a class, to appoint directors to the board of directors.

Code of Ethics

As required by Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act, respectively, we and the Advisors have adopted codes of ethics which apply to, among

others, our and our Advisors executive officers, including our Chief Executive Officer and Chief Financial Officer, as well as our Advisors officers, directors and employees.

Our codes of ethics generally will not permit investments by

our and the Advisors personnel in securities that may be purchased or sold by us.

We hereby undertake to provide a copy of the codes to any person,

without charge, upon request.

Requests for a copy of the codes may be made in writing addressed to our Secretary, George Hawley, Crescent Capital BDC, Inc., 11100 Santa Monica Boulevard, Suite 2000, Los Angeles, California, 90025,

As required by Rule 17j-1 under the 1940 Act and Rule 204A-1 under

the Advisers Act, respectively, we and the Adviser have adopted codes of ethics which apply to, among others, our and our Advisers executive officers, including our Chief Executive Officer and Chief Financial Officer, as well as our

Advisers officers, directors and employees.

Our codes of ethics generally will not permit investments by our and the Advisers personnel in securities that may be purchased or sold by us.

We hereby undertake to provide a copy of the codes to any person, without charge, upon request.

Requests for a copy of the codes may be made in writing

addressed to our Secretary, George Hawley, Crescent Capital BDC, Inc., 11100 Santa Monica Boulevard, Suite 2000, Los Angeles, California, 90025, Attention:

CCAP Investor Relations, or by emailing us at investor.relations@crescentcap.com.

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Compliance Policies and Procedures

We and our Advisor

have adopted and implemented written policies and procedures reasonably designed to detect and prevent violation of the federal securities laws and we are required to review these compliance policies and procedures annually for their adequacy and

the effectiveness of their implementation and designate a Chief Compliance Officer to be responsible for administering the policies and procedures.

Joseph Hanlon currently serves as our Chief Compliance Officer.

We and our Adviser have adopted and implemented written policies and procedures reasonably designed to detect and prevent violation of the federal securities

laws and we are required to review these compliance policies and procedures annually for their adequacy and the effectiveness of their implementation and designate a Chief Compliance Officer to be responsible for administering the policies and

Sarbanes-Oxley Act of 2002 and NASDAQ Corporate Governance Regulations

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Proxy Voting Policies and

We will delegate our proxy voting responsibility to our Advisor.

The Proxy Voting Policies and Procedures of the Advisor are set forth

The guidelines are reviewed periodically by the Advisor and our non-interested directors, and, accordingly, are subject to change.

We delegate our proxy voting responsibility to our Adviser.

The Proxy Voting Policies and Procedures of the Adviser are set forth below.

The guidelines are reviewed periodically by the Adviser and our non-interested directors, and, accordingly, are subject to change.

An investment adviser registered under the Advisers Act has a fiduciary duty to act solely in the best interests of its clients.

As part of this duty, the

Advisor recognizes that it must vote portfolio securities in a timely manner free of conflicts of interest and in the best interests of its clients.

Adviser recognizes that it must vote portfolio securities in a timely manner free of conflicts of interest and in the best interests of its clients.

These policies and procedures for voting proxies are intended to comply with Section 206 of, and

Rule 206(4)-6 under, the Advisers Act.

The Advisor will vote all proxies based upon the guiding principle of

seeking to maximize the ultimate long-term economic value of our stockholders holdings, and ultimately all votes are cast on a case-by-case basis, taking into

consideration the contractual obligations under the relevant advisory agreements or comparable documents, and all other relevant facts and circumstances at the time of the vote.

The Advisor will review on a case-by-case basis each proposal submitted to a stockholder vote to determine its impact on the portfolio securities held by us.

Although the Advisor will generally vote against proposals that may have a

negative impact on our portfolio securities, the Advisor may vote for such a proposal if there exists compelling long-term reasons to do so.

Advisors proxy voting decisions are made by our Advisors investment committee.

To ensure that the vote is not the product of a conflict of interest, the Advisor will require that:

(1) anyone involved in the decision making process

disclose to our Advisors investment committee, and disinterested directors, any potential conflict that he or she is aware of and any contact that he or she has had with any interested party regarding a proxy vote;

and (2) employees

involved in the decision making process or vote administration are prohibited from revealing how the Advisor intends to vote on a proposal in order to reduce any attempted influence from interested parties.

The Adviser votes all proxies based upon the guiding principle of seeking to maximize the ultimate long-term

economic value of our stockholders holdings, and ultimately all votes are cast on a case-by-case basis, taking into consideration the contractual obligations under

the relevant advisory agreements or comparable documents, and all other relevant facts and circumstances at the time of the vote.

The Adviser reviews on a

case-by-case basis each proposal submitted to a stockholder vote to determine its impact on the portfolio securities held by us.

Although the Adviser generally votes

against proposals that may have a negative impact on our portfolio securities, the Adviser may vote for such a proposal if there exists compelling long-term reasons to do so.

The Advisers proxy voting decisions are made by our Advisers investment committee.

To ensure that the vote is not the product of a conflict of

interest, the Adviser will require that:

(1) anyone involved in the decision making process disclose to our Advisers investment committee, and disinterested directors, any potential conflict that he or she is aware of and any contact that

he or she has had with any interested party regarding a proxy vote;

and (2) employees involved in the decision making process or vote administration are prohibited from revealing how the Adviser intends to vote on a proposal in order to reduce

any attempted influence from interested parties.

Privacy Principles

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Reporting Obligations

We will furnish our stockholders with annual reports containing audited financial statements, quarterly reports, and such other periodic reports as we

determine to be appropriate or as may be required by law.

We furnish our stockholders with annual reports containing audited financial statements, quarterly reports, and such other periodic reports as we determine to

be appropriate or as may be required by law.

We are required to comply with all periodic reporting, proxy solicitation and other applicable requirements under the Exchange Act.

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qualify and intend to continue to qualify annually, as a RIC under Subchapter M of the Code, commencing with our taxable year ending on December 31, 2015.

As a RIC, we generally will not pay corporate-level U.S.

federal income taxes on any

income or gains that we timely distribute to our stockholders as dividends.

Rather, dividends we distribute generally will be taxable to our stockholders, and any net operating losses, foreign tax credits and other of our tax attributes generally

will not pass through to our stockholders, subject to special rules for certain items such as net capital gains and qualified dividend income we recognize.

As a RIC, we generally do not pay corporate-level U.S.

federal income taxes on any income

or gains that we timely distribute to our stockholders as dividends.

Rather, dividends we distribute generally are taxable to our stockholders, and any net operating losses, foreign tax credits and other of our tax attributes generally do not pass

through to our stockholders, subject to special rules for certain items such as net capital gains and qualified dividend income we recognize.

See Taxation of U.S.

Stockholders and Taxation

Stockholders and Taxation of Non-U.S.

Stockholders below.

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regular corporate rates on any income or capital gain not distributed (or deemed distributed) to our stockholders.

We generally are subject to a 4% nondeductible U.S.

federal excise tax on certain undistributed income

unless we distribute in a timely manner an amount at least equal to the sum of (1) 98% of our net ordinary income (taking into account certain deferrals and elections) for each calendar year, (2) 98.2% of our capital gains in excess of

capital losses for the one-year period ending October 31 in that calendar year and (3) any net ordinary income and capital gains in excess of capital losses recognized, but not distributed, in

preceding years (the Excise Tax Avoidance Requirement).

We generally are subject to a 4%

nondeductible U.S.

federal excise tax on certain undistributed income unless we distribute in a timely manner an amount at least equal to the sum of (1) 98% of our net ordinary income (taking into account certain deferrals and elections) for

each calendar year, (2) 98.2% of our capital gains in excess of capital losses for the one-year period ending October 31 in that calendar year and (3) any net ordinary income and capital gains

in excess of capital losses recognized, but not distributed, in preceding years (the Excise Tax Avoidance Requirement).

We will not be subject to the U.S.

federal excise tax on amounts on which we are required to pay U.S.

federal income tax (such as retained net capital gains).

Depending upon the

level of taxable income earned in a year, we may choose to carry forward taxable income for distribution in the following year and pay the applicable U.S.

federal income

tax (such as retained net capital gains).

Depending upon the level of taxable income earned in a year, we may choose to carry forward taxable income for distribution in the following year and pay the applicable U.S.

federal excise tax.

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federal excise tax.

Although we do not

presently expect to do so, we may borrow funds and sell assets in order to make distributions to our stockholders that are sufficient for us to satisfy the Annual Distribution Requirement.

However, our ability to dispose of assets may be limited by

(1) the illiquid nature of our portfolio and/or (2) other requirements relating to our status as a RIC, including the Diversification Tests.

If we dispose of assets in order to meet the Annual Distribution Requirement or the Excise Tax

Avoidance Requirement, we may make such dispositions at times that, from an investment standpoint, are not advantageous.

Alternatively, although we currently do not intend to do so, to satisfy the Annual Distribution Requirement, we may declare a

taxable dividend payable in our stock or cash at the election of each stockholder.

Although we do not presently expect to do so, we may borrow funds and sell assets in order to make

distributions to our stockholders that are sufficient for us to satisfy the Annual Distribution Requirement.

However, our ability to dispose of assets may be limited by (1) the illiquid nature of our portfolio and/or (2) other requirements

relating to our status as a RIC, including the Diversification Tests.

If we dispose of assets in order to meet the Annual Distribution Requirement or the Excise Tax Avoidance Requirement, we may make such dispositions at times that, from an

investment standpoint, are not advantageous.

Alternatively, although we currently do not intend to do so, to satisfy the Annual Distribution Requirement, we may declare a taxable dividend payable in our stock or cash at the election of each

In such case, for U.S.

federal income tax purposes, the amount of the dividend paid in our common stock will generally be equal to the amount of cash that could have

been received instead of our stock.

See Taxation of Stockholders below for a discussion of the tax consequences to stockholders upon receipt of such dividends.

Distributions we make to our stockholders may be made from our cash assets or by liquidation of our

investments, if necessary.

federal income tax purposes, the amount of the dividend paid in our common stock will generally be equal to the amount of cash that could have been received instead of our stock.

See Taxation of

Stockholders below for a discussion of the tax consequences to stockholders upon receipt of such dividends.

Distributions we make to our

stockholders may be made from our cash assets or by liquidation of our investments, if necessary.

We may recognize gains or losses from such liquidations.

In the event we recognize net capital gains from such transactions, investors may receive a larger capital gain distribution than they would have received in the

absence of such transactions.

In the event we recognize net capital gains from such transactions, investors may receive a

larger capital gain distribution than they would have received in the absence of such transactions.

Failure to Qualify as a RIC

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AVAILABLE INFORMATION

We file with or

submit to the SEC annual, quarterly and current periodic reports, proxy statements and other information meeting the informational requirements of the Exchange Act.

We file with or submit to the SEC

annual, quarterly and current periodic reports, proxy statements and other information meeting the informational requirements of the Exchange Act.

This information is available free of charge on our website

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Information contained on our website is not incorporated into this Annual Report and you should not consider such information to be part of this Annual Report.

Such information is also available from

the EDGAR database on the SECs web site at http://www.sec.gov.

Such information is also available

from the EDGAR database on the SECs web site at http://www.sec.gov.

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 1. Business