Management’s Discussion and Analysis of Financial Condition and Results of Operations (dollar amounts in thousands, except per share data, unless otherwise indicated)
−Removed: The following discussion and analysis of our financial condition and results of operations should be read in conjunction with Part I, Item 6 of this Form 10-K “Selected Financial Data” and our consolidated financial statements and related notes in Part II, Item 8 of this Form 10-K “Financial Statements and Supplementary Data.” This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to those described in Part I, Item 1A of this Form 10-K “Risk Factors.” Our actual results could differ materially from those anticipated by such forward-looking information due to factors discussed under “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” appearing elsewhere in this Form 10-K.
+Added: The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes in Part II, Item 8 of this Form 10-K “Financial Statements and Supplementary Data.” This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to those described in Part I, Item 1A of this Form 10-K “Risk Factors.” Our actual results could differ materially from those anticipated by such forward-looking information due to factors discussed under “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” appearing elsewhere in this Form 10-K.
We are a Maryland corporation formed on February 8, 2012, and structured as an externally managed, non-diversified closed-end investment company.
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We have elected to be treated, and intend to continue to comply with the requirements to qualify annually, as a RIC under Subchapter M of the Code.
−Removed: Our investment objective is to generate current income and capital appreciation primarily through debt investments in U.S.
+Added: Our investment objective is to generate current income and, to a lesser extent, capital appreciation primarily through secured debt investments in U.S.
middle market companies.
Our core investment strategy focuses on lending to U.S.
−Removed: middle market companies, which we define as companies with approximately $25 million to $100 million of EBITDA, which we believe is a useful proxy for cash flow.
−Removed: We complement this core strategy with additive, diversifying assets including, but not limited to, specialty lending investments.
−Removed: We seek to achieve our investment objective primarily through direct originations of Middle Market Senior Loans, with the balance of our assets invested in higher yielding investments (which may include unsecured debt, mezzanine debt and investments in equities).
+Added: middle market companies supported by financial sponsors, which we define as companies with approximately $25 million to $100 million of EBITDA, which we believe is a useful proxy for cash flow.
+Added: This core strategy is supplemented with complementary specialty lending and opportunistic investing strategies, which take advantage of the broad capabilities of Carlyle's Global Credit platform while offering risk-diversifying portfolio benefits.
+Added: We seek to achieve our investment objective primarily through direct originations of Middle Market Senior Loans, with a minority of our assets invested in higher yielding investments (which may include unsecured debt, mezzanine debt and investments in equities).
We generally make Middle Market Senior Loans to private U.S.
middle market companies that are, in many cases, controlled by private equity firms.
−Removed: Depending on market conditions, we expect that between 70% and 80% of the
−Removed: value of our assets will be invested in Middle Market Senior Loans.
+Added: Depending on market conditions, we expect that between 70% and 80% of the value of our assets will be invested in Middle Market Senior Loans.
We expect that the composition of our portfolio will change over time given our Investment Adviser’s view on, among other things, the economic and credit environment (including with respect to interest rates) in which we are operating.
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Both our Investment Adviser and our Administrator are wholly owned subsidiaries of Carlyle Investment Management L.L.C., a subsidiary of Carlyle.
+Added: Investment Adviser’s five-person investment committee is responsible for reviewing and approving our investment
+Added: opportunities.
+Added: The members of the investment committee have experience investing through different credit cycles.
+Added: December 31, 2020, our Investment Adviser’s investment team included a team of 170 investment professionals
+Added: across the Carlyle Global Credit segment.
+Added: Our Investment Adviser’s investment committee comprises five of the most senior credit professionals within the Global Credit segment, with backgrounds and expertise across asset classes and over 26 years of average industry experience and 10 years of average tenure.
+Added: In addition, our Investment Adviser and its investment team are supported by a team of finance, operations and administrative professionals currently employed by Carlyle Employee Co., a wholly owned subsidiary of Carlyle.
In conducting our investment activities, we believe that we benefit from the significant scale and resources of Carlyle, including our Investment Adviser and its affiliates.
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• expenses, including travel expenses, incurred by our Investment Adviser, or members of our Investment Adviser team managing our investments, or payable to third parties, performing due diligence on prospective portfolio companies and, if necessary, expenses of enforcing our rights;
−Removed: the base management fee and any incentive fee payable under our Investment Advisory Agreement;
• certain costs and expenses relating to distributions paid on our shares;
21 unchanged sentences
As of December 31,
+Added: 2020 2019 2018
Count of investments 160 136 119
−Removed: Count of portfolio companies / investment fund
+Added: Count of portfolio companies / investment funds 117 112 96
Count of industries 27 28 27
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Percentage of total investment fair value:
−Removed: First lien debt
−Removed: First lien / last out loans
+Added: First lien debt (excluding first lien / last out debt) 63.6 % 74.6 % 68.1 %
+Added: First lien / last out debt 3.4 % 3.7 % 10.3 %
Second lien debt 15.6 % 11.0 % 9.1 %
Total secured debt 82.6 % 89.3 % 87.5 %
+Added: Investment Funds 15.5 % 9.6 % 11.3 %
Equity investments 1.9 % 1.0 % 1.3 %
1 unchanged sentence
Floating rate (1)
+Added: 99.1 % 99.7 % 99.2 %
Fixed interest rate 0.9 % 0.3 % 0.8 %
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For the years ended December 31,
+Added: 2020 2019 2018
Total investments, beginning of year $ 2,201,451 $ 2,043,591 $ 1,971,012
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First Lien Debt (excluding First Lien/Last Out) $ 314,373 $ 653,217 $ 648,034
−Removed: First Lien/Last Out Unitranche
+Added: First Lien/Last Out Debt 30,866 73,272 23,507
Second Lien Debt 117,106 144,217 135,587
Equity Investments 12,233 5,436 5,302
−Removed: Investment Fund
+Added: Investment Funds 234,122 131,699 151,650
+Added: Total $ 708,700 $ 1,007,841 $ 964,080
Principal amount of investments sold or repaid:
First Lien Debt (excluding First Lien/Last Out) $ (694,027) $ (419,151) $ (566,490)
−Removed: First Lien/Last Out Unitranche
+Added: First Lien/Last Out Debt (79,831) (204,702) (29,682)
Second Lien Debt (57,207) (88,695) (200,465)
−Removed: Structured Finance Obligations
−Removed: Investment Fund
+Added: Equity Investments (1,282) (3,070) (1,000)
+Added: Investment Funds (156,500) (145,200) (93,900)
+Added: Total $ (988,847) $ (860,818) $ (891,537)
Number of new funded investments 48 51 47
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As of December 31, 2020 and 2019, investments consisted of the following:
−Removed: December 31, 2019
−Removed: December 31, 2018
−Removed: Amortized Cost
−Removed: Amortized Cost
+Added: December 31, 2020 December 31, 2019
+Added: Amortized Cost Fair Value Amortized Cost Fair Value
First Lien Debt (excluding First Lien/Last Out) $ 1,234,579 $ 1,161,881 $ 1,649,721 $ 1,585,042
−Removed: First Lien/Last Out Unitranche
+Added: First Lien/Last Out Debt 63,575 62,182 78,951 78,096
Second Lien Debt 297,962 284,523 234,006 234,532
Equity Investments 32,754 33,877 22,272 21,698
−Removed: Investment Fund
+Added: Investment Funds 294,096 283,286 216,501 204,596
+Added: Total $ 1,922,966 $ 1,825,749 $ 2,201,451 $ 2,123,964
The weighted average yields (1) for our first and second lien debt, based on the amortized cost and fair value as of December 31, 2020 and 2019, were as follows:
−Removed: December 31, 2019
−Removed: December 31, 2018
−Removed: Amortized Cost
−Removed: Amortized Cost
+Added: December 31, 2020 December 31, 2019
+Added: Amortized Cost Fair Value Amortized Cost Fair Value
First Lien Debt (excluding First Lien/Last Out) 7.08 % 7.53 % 8.00 % 8.17 %
−Removed: First Lien/Last Out Unitranche
+Added: First Lien/Last Out Debt 9.65 % 9.87 % 6.63 % 9.53 %
First Lien Debt Total 7.21 % 7.65 % 7.91 % 8.23 %
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Total weighted average yields (which includes the effect of accretion of discount and amortization of premiums) of our first and second lien debt investments as measured on an amortized cost basis decreased from 8.22% to 8.12% from December 31, 2019 to December 31, 2020.
−Removed: The decrease in weighted average yields was primarily due to a decrease in the effective LIBOR rate applicable to loans in the portfolio and the impact of loans on non-accrual status.
+Added: The decrease in weighted average yields was primarily due to a decrease in the effective LIBOR rate applicable to loans in the portfolio, partially offset by a higher percentage of second lien debt in the portfolio.
The following table summarizes the fair value of our performing and non-accrual/non-performing investments as of December 31, 2020 and 2019:
−Removed: December 31, 2019
−Removed: December 31, 2018
+Added: December 31, 2020 December 31, 2019
+Added: Fair Value Percentage Fair Value Percentage
+Added: Performing $ 1,767,613 96.82 % $ 2,071,535 97.53 %
Non-accrual (1)
+Added: 58,136 3.18 52,429 2.47
+Added: Total $ 1,825,749 100.00 % $ 2,123,964 100.00 %
(1) For information regarding our non-accrual policy, see Note 2 to the consolidated financial statements included in Part II, Item 8 of this Form 10-K.
See the Consolidated Schedules of Investments as of December 31, 2020 and 2019 in our consolidated financial statements in Part II, Item 8 of this Form 10-K “Financial Statements and Supplementary Data” for more information on these investments, including a list of companies and type and amount of investments.
−Removed: As part of the monitoring process, our Investment Adviser has developed risk assessment policies pursuant to which it regularly assesses the risk profile of each of our debt investments and rates each of them based on the following categories, which we refer to as “Internal Risk Ratings”:
+Added: As part of the monitoring process, our Investment Adviser has developed risk assessment policies pursuant to which it regularly assesses the risk profile of each of our debt investments and rates each of them based on categories, which we refer to as “Internal Risk Ratings”.
+Added: During the second quarter of 2020, our Investment Advisor reevaluated and revised its Internal Risk Ratings and policies across the Carlyle Direct Lending platform to more appropriately assess portfolio risk across all market conditions, including the current COVID-19 environment.
+Added: The revised methodology incorporates greater focus on expectations for future company performance and industry outlook, and creates greater consistency in risk rating assignment across all investments by removing from the ratings methodology the direct tie of historical financial results to the "base case" projections derived at the time of our initial investment.
+Added: Under the revised methodology, an Internal Risk Rating of 1 – 5, which are defined below, is assigned to each debt investment in our portfolio, compared to Internal Risk Ratings of 1 – 6 under the legacy methodology.
+Added: Key drivers of internal risk rating used in the revised methodology are substantially the same as the legacy methodology, including financial metrics, financial covenants, liquidity and enterprise value coverage.
Internal Risk Ratings Definitions
−Removed: Performing—Low Risk:
−Removed: Borrower is operating more than 10% ahead of the base case.
−Removed: Performing—Stable Risk:
−Removed: Borrower is operating within 10% of the base case (above or below).
−Removed: This is the initial rating assigned to all new borrowers.
−Removed: Performing—Management Notice:
−Removed: Borrower is operating more than 10% below the base case.
−Removed: A financial covenant default may have occurred, but there is a low risk of payment default.
−Removed: Borrower is operating more than 20% below the base case and there is a high risk of covenant default, or it may have already occurred.
−Removed: Payments are current although subject to greater uncertainty, and there is moderate to high risk of payment default.
−Removed: Watch List—Possible Loss:
−Removed: Borrower is operating more than 30% below the base case.
−Removed: At the current level of operations and financial condition, the borrower does not have the ability to service and ultimately repay or refinance all outstanding debt on current terms.
−Removed: Payment default is very likely or may have occurred.
−Removed: Loss of principal is possible.
−Removed: Watch List—Probable Loss:
−Removed: Borrower is operating more than 40% below the base case, and at the current level of operations and financial condition, the borrower does not have the ability to service and ultimately repay or refinance all outstanding debt on current terms.
−Removed: Payment default is very likely or may have already occurred.
−Removed: Additionally, the prospects for improvement in the borrower’s situation are sufficiently negative that impairment of some or all principal is probable.
−Removed: Our Investment Adviser’s risk rating model is based on evaluating portfolio company performance in comparison to the base case when considering certain credit metrics including, but not limited to, adjusted EBITDA and net senior leverage as well as specific events including, but not limited to, default and impairment.
+Added: Rating Definition
+Added: 1 Borrower is operating above expectations, and the trends and risk factors are generally favorable.
+Added: 2 Borrower is operating generally as expected or at an acceptable level of performance.
+Added: The level of risk to our initial cost bases is similar to the risk to our initial cost basis at the time of origination.
+Added: This is the initial risk rating assigned to all new borrowers.
+Added: 3 Borrower is operating below expectations and level of risk to our cost basis has increased since the time of
+Added: The borrower may be out of compliance with debt covenants.
+Added: Payments are generally current although there may be higher risk of payment default.
+Added: 4 Borrower is operating materially below expectations and the loan’s risk has increased materially since origination.
+Added: In addition to the borrower being generally out of compliance with debt covenants, loan payments may be past due, but generally not by more than 120 days.
+Added: It is anticipated that we may not recoup our initial cost basis and may realize a loss of our initial cost basis upon exit.
+Added: 5 Borrower is operating substantially below expectations and the loan’s risk has increased substantially since origination.
+Added: Most or all of the debt covenants are out of compliance and payments are substantially delinquent.
+Added: It is anticipated that we will not recoup our initial cost basis and may realize a substantial loss of our initial cost basis upon exit.
Our Investment Adviser monitors and, when appropriate, changes the investment ratings assigned to each debt investment in our portfolio.
−Removed: In connection with our quarterly valuation process, our Investment Adviser reviews our investment ratings on a regular basis.
−Removed: The following table summarizes the Internal Risk Ratings as of December 31, 2019 and 2018 :
−Removed: December 31, 2019
+Added: Our Investment Adviser reviews our investment ratings in connection with our quarterly valuation process.
+Added: The below table summarizes the Internal Risk Ratings as of December 31, 2020.
+Added: Given the forward-looking nature of certain elements of the revised methodology, it is impracticable to recast the risk ratings for the portfolio using the revised
+Added: methodology as of December 31, 2019.
December 31, 2020
−Removed: (dollar amounts in millions)
−Removed: % of Fair Value
−Removed: % of Fair Value
−Removed: Internal Risk Rating 1
+Added: (dollar amounts in millions) Fair Value % of Fair Value
Internal Risk Rating 1 $ 19.1 1.27 %
3 unchanged sentences
Internal Risk Rating 5 32.8 2.17
−Removed: As of December 31, 2019 and 2018 , the weighted average Internal Risk Rating of our debt investment portfolio was 2.3 and 2.3 respectively.
−Removed: As of December 31, 2019 and 2018 , 18 and 12 of our debt investments, with an aggregate fair value of $224.3 million and $142.9 million , respectively, were assigned an Internal Risk Rating of 4-6.
−Removed: As of December 31, 2019 and 2018 , five and two first lien debt investments in the portfolio with a fair value of $52.4 million and $14.3 million , respectively, were on non-accrual status, which represented approximately 2.47% and 0.73% , respectively, of total investments at fair value.
+Added: Total $ 1,508.6 100.00 %
+Added: As of December 31, 2020, the weighted average Internal Risk Rating of our debt investment portfolio was 2.4.
+Added: As of December 31, 2020, 6 of our debt investments, with an aggregate fair value of $80.9 million, were assigned an Internal Risk Rating of 4-5.
+Added: As of December 31, 2020 and 2019, five and five first lien debt investments in the portfolio with a fair value of $58.1 million and $52.4 million, respectively, were on non-accrual status, which represented approximately 3.18% and 2.47%, respectively, of total investments at fair value.
The remaining first and second lien debt investments were performing and current on their interest payments as of December 31, 2020 and 2019.
−Removed: During the year ended December 31, 2019 , 11 investments with fair value of $210.4 million were downgraded to an Internal Risk Rating of 4 due to changes in financial condition and performance of the respective portfolio companies and 4 investments with fair value of $74.6 million were upgraded and removed from the Watch List due to improved performance of the respective portfolio companies and one investment on Watch List with fair value of $9.5 million was sold.
CONSOLIDATED RESULTS OF OPERATIONS
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For the years ended December 31,
+Added: 2020 2019 2018
Investment income:
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Equity Investments 1,978 63 63
−Removed: Investment Fund
+Added: Investment Funds 24,277 27,931 28,490
+Added: Cash 54 351 295
Total investment income $ 182,118 $ 221,298 $ 207,526
+Added: The decrease in investment income for the year ended December 31, 2020 from the comparable period in 2019 was primarily driven by the impact of average LIBOR, lower weighted average loan balance, and the impact of loans on non-accrual status.
+Added: As of December 31, 2020, the size of our portfolio decreased to $1,922,966 from $2,201,451 as of December 31, 2019 at amortized cost, and total principal amount of investments outstanding decreased to $1,930,782 from $2,207,949 as of December 31, 2019.
+Added: As of December 31, 2020, the weighted average yield of our first and second lien debt decreased to 8.12% from 8.22% as of December 31, 2019, on amortized cost, primarily due to the decrease in LIBOR.
The increase in investment income for the year ended December 31, 2019 from the comparable period in 2018 was primarily driven by our increasing invested balance.
−Removed: As of December 31, 2019 , the size of our portfolio increased to $2,201,451 from $2,043,591 as of December 31, 2018 at amortized cost, and total principal amount of investments outstanding increased to $2,207,949 from $2,073,835 as of December 31, 2018 .
−Removed: As of December 31, 2019 , the weighted average yield of our first and second lien debt decreased to 8.22% from 9.54% as of December 31, 2018 , on amortized cost, primarily due to the decrease in LIBOR and loans placed on non-accrual status.
−Removed: The increase in investment income for the year ended December 31, 2018 from the comparable period in 2017 was primarily driven by our deployment of capital, increasing invested balance, an increase in LIBOR, and increased interest and dividend income from Credit Fund.
The size of our portfolio increased to $2,201,451 as of December 31, 2019 from $2,043,591 as of December 31, 2018, at amortized cost, and total principal amount of investments outstanding increased to $2,207,949 as of December 31, 2019 from $2,073,835 as of December 31, 2018.
−Removed: As of December 31, 2018 , the weighted average yield of our first and second lien debt increased to 9.54% from 8.86% as of December 31, 2017 , on amortized cost, primarily due to the increase in LIBOR, partially offset by generally lower yields on new investments compared to the yields on exited investments and loans placed on non-accrual status.
+Added: As of December 31, 2019, the weighted average yield of our first and second lien debt decreased to 8.22% from 9.54% as of December 31, 2018, on amortized cost, primarily due to the decrease in LIBOR and loans placed on non-accrual status.
Interest income on our first and second lien debt investments is dependent on the composition and credit quality of the portfolio.
Generally, we expect the portfolio to generate predictable quarterly interest income based on the terms stated in each loan’s credit agreement.
−Removed: As of December 31, 2019 and 2018 , five and two first lien debt investments in the portfolio were on non-accrual with the fair value of $52,429 and $14,327 , which represents approximately 2.47% and 0.73% of total investments at fair value, respectively.
+Added: As of December 31, 2020 and 2019, five and five first lien debt investments in the portfolio were on non-accrual with the fair value of $58,136 and $52,429, which represents approximately 3.18% and 2.47% of total investments at fair value, respectively.
The remaining first and second lien debt investments were performing and current on their interest payments as of December 31, 2020 and 2019.
−Removed: As of December 31, 2017 , one first lien debt investment in the portfolio was non-performing.
−Removed: The fair value of the loans in the portfolio on non-accrual status was $19,487, which represents approximately 0.99% of total investments at fair value.
+Added: As of December 31, 2018, two first lien debt investments in the portfolio were non-performing.
+Added: The fair value of the loans in the portfolio on non-accrual status was $14,327, which represented approximately 0.73% of total investments at fair value.
The remaining first and second lien debt investments were performing and current on their interest payments as of December 31, 2018 and for the year then ended.
1 unchanged sentence
For the years ended December 31,
+Added: 2020 2019 2018
Total investment income $ 182,118 $ 221,298 $ 207,526
2 unchanged sentences
For the years ended December 31,
+Added: 2020 2019 2018
Base management fees $ 28,648 $ 31,316 $ 29,626
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Excise tax expense 573 404 230
−Removed: Waiver of base management fees
+Added: Net expenses $ 93,311 $ 113,633 $ 99,090
Interest expense and credit facility fees for the years ended December 31, 2020, 2019 and 2018 were comprised of the following:
For the years ended December 31,
+Added: 2020 2019 2018
Interest expense $ 35,820 $ 50,587 $ 37,801
1 unchanged sentence
Amortization of deferred financing costs 1,886 1,618 901
+Added: Other fees 109 198 134
Total interest expense and credit facility fees $ 39,581 $ 53,666 $ 40,096
2 unchanged sentences
Weighted average interest rate 3.15 % 4.41 % 4.32 %
−Removed: The increase in interest expense for the year ended December 31, 2019 compared to the comparable period in 2018 was primarily driven by increased drawings under the Facilities related to increased deployment of capital for investments.
−Removed: The increase in interest expense for the year ended December 31, 2018 compared to the comparable period in 2017 was driven by increased drawings under the Facilities related to increased deployment of capital for investments, an increase in LIBOR, and a one-time acceleration of $652 of amortization of debt issuance costs related to the 2015-1 Debt Securitization Refinancing.
−Removed: The increase in credit facility fees for the year ended December 31, 2019 compared to the comparable period in 2018 was driven by a one-time acceleration of $628 of amortization of debt issuance costs related to the commitment reduction of the SPV Credit Facility.
+Added: The decrease in interest expense for the year ended December 31, 2020 compared to the comparable period in 2019 was primarily driven by lower LIBOR.
+Added: The increase in interest expense for the year ended December 31, 2019 compared to the comparable period in 2018 was driven by increased drawings under the Facilities related to increased deployment of capital for investments.
Below is a summary of the base management fees and incentive fees incurred during the years ended December 31, 2020, 2019 and 2018:
For the years ended December 31,
+Added: 2020 2019 2018
Base management fees $ 28,648 $ 31,316 $ 29,626
−Removed: Waiver of base management fees
−Removed: Base management fees, net of waiver
Incentive fees on pre-incentive fee net investment income 18,555 22,872 23,002
4 unchanged sentences
Total base management fees and incentive fees $ 47,203 $ 54,188 $ 52,628
−Removed: The increase in base management fees for the year ended December 31, 2019 from the comparable period in 2018 and for the year ended December 31, 2018 from the comparable period in 2017 were driven by our deployment of capital and our increasing invested balance.
+Added: The decrease in base management fees for the year ended December 31, 2020 from the comparable period in 2019 was driven by lower weighted average loan balance.
+Added: The decrease in incentive fees for the year ended December 31, 2020 from the comparable period in 2019 was driven by lower pre-incentive fee net investment income.
+Added: The increase in base management fees for the year ended December 31, 2019 from the comparable period in 2018 was driven by our deployment of capital.
For the years ended December 31, 2020, 2019 and 2018, we recorded no accrued capital gains incentive fees based upon our cumulative net realized and unrealized appreciation (depreciation) as of December 31, 2020, 2019 and 2018, respectively.
6 unchanged sentences
Other general and administrative expenses include insurance, filing, research, subscriptions and other costs.
−Removed: The decrease in professional fees for the year ended December 31, 2019 from the comparable period in 2018 was driven by a decrease in non-recurring professional fees.
Net Realized Gain (Loss) and Net Change in Unrealized Appreciation (Depreciation) on Investments
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During the years ended December 31, 2020, 2019 and 2018, we had a change in unrealized appreciation on 78, 91, and 40 investments, respectively, totaling approximately $65,851, $70,167, and $14,680, respectively, which was offset by a change in unrealized depreciation on 97, 71, and 105 investments, respectively, totaling approximately $85,507, $76,220, and $82,633, respectively.
+Added: During October 2020, Direct Travel, Inc.
+Added: ("Direct Travel") completed a restructuring whereby the lenders received the majority of the equity in Direct Travel, but maintained the principal balance in the existing debt.
+Added: As part of the transaction, the lenders also provided a delayed draw term loan facility to support ongoing liquidity of the business.
+Added: As part of the restructuring, we received an approximate 9% ownership stake in Direct Travel.
+Added: During October 2020, Central Security Group, Inc.
+Added: completed a restructuring whereby a portion of the first lien debt held by us was exchanged into common equity.
+Added: As a result, $8,566 of unrealized depreciation was reversed and we
+Added: realized a loss of $8,562 during the year ended December 31, 2020.
During April 2019, SolAero Technologies Corp.
9 unchanged sentences
As a result, $3,832 of unrealized depreciation was reversed and we realized a loss of $4,087 during the year ended December 31, 2018.
−Removed: Net realized gain (loss) and net change in unrealized appreciation (depreciation) by the type of investments for the years ended December 31, 2019 , 2018 and 2017 were as follows:
+Added: Net realized gain (loss) and net change in unrealized appreciation (depreciation) for the years ended December 31, 2020, 2019 and 2018 were as follows:
For the years ended December 31,
+Added: 2020 2019 2018
Net realized gain (loss) on investments $ (58,473) $ (38,376) $ (1,368)
3 unchanged sentences
For the years ended December 31,
−Removed: Net realized gain (loss)
−Removed: Net change in unrealized appreciation (depreciation)
−Removed: Net realized gain (loss)
−Removed: Net change in unrealized appreciation (depreciation)
−Removed: Net realized gain (loss)
−Removed: Net change in unrealized appreciation (depreciation)
+Added: 2020 2019 2018
+Added: Type Net realized gain (loss) Net change in unrealized appreciation (depreciation) Net realized gain (loss) Net change in unrealized appreciation (depreciation) Net realized gain (loss) Net change in unrealized appreciation (depreciation)
First Lien Debt $ (58,766) $ (8,557) $ (52,633) $ 4,894 $ (4,903) $ (59,374)
Second Lien Debt (228) (13,965) — 1,003 2 (3,822)
−Removed: Structured Finance Obligations
Equity Investments 522 1,697 14,257 (7,751) 3,533 3,214
−Removed: Investment Fund
−Removed: Net change in unrealized depreciation in our investments for the year ended December 31, 2019 compared to the comparable period in 2018 was primarily driven by the unrealized depreciation in Dimensional Dental Management,
−Removed: LLC and Dermatology Associates, offset by the reversal of prior period unrealized depreciation on Product Quest Manufacturing, LLC and SolAero Technologies Corp., as well as due to changes in various inputs utilized under our valuation methodology, including, but not limited to, market spreads, enterprise value multiples, borrower leverage multiples and borrower ratings, and the impact of exits.
−Removed: Net change in unrealized depreciation in our investments for the year ended December 31, 2018 compared to the comparable period in 2017 was primarily due to the unrealized depreciation in Product Quest Manufacturing, LLC which filed for bankruptcy protection in 2018, as well as changes in various inputs utilized under our valuation methodology, including, but not limited to, market spreads, borrower leverage multiples and borrower ratings, and the impact of exits.
+Added: Investment Funds — (3,104) — (4,199) — (7,971)
+Added: Total $ (58,472) $ (23,929) $ (38,376) $ (6,053) $ (1,368) $ (67,953)
+Added: Net change in unrealized depreciation in our investments for the year ended December 31, 2020 compared to the comparable period in 2019 was primarily driven by unrealized depreciation related to investments more heavily impacted by the COVID-19 pandemic, combined with higher market yields.
+Added: Net change in unrealized depreciation in our investments for the year ended December 31, 2019 compared to the comparable period in 2018 was primarily due to the unrealized depreciation in Dimensional Dental Management, LLC and Dermatology Associates, offset by the reversal of prior period unrealized depreciation on Product Quest Manufacturing, LLC and SolAero Technologies Corp.
+Added: Net change in unrealized appreciation (depreciation) is also driven by changes in other inputs utilized under our valuation methodology, including, but not limited to, market spreads, enterprise value multiples, borrower leverage multiples and borrower ratings, and the impact of exits.
MIDDLE MARKET CREDIT FUND, LLC
−Removed: On February 29, 2016, the Company and Credit Partners entered into an amended and restated limited liability company agreement, which was subsequently amended on June 24, 2016 (as amended, the “Limited Liability Company Agreement”) to co-manage Credit Fund, a Delaware limited liability company that is not consolidated in the Company’s consolidated financial statements.
+Added: On February 29, 2016, the Company and Credit Partners entered into an amended and restated limited liability company agreement, which was subsequently amended and restated on June 24, 2016 and February 22, 2021 (as amended, the “Limited Liability Company Agreement”) to co-manage Credit Fund, a Delaware limited liability company that is not consolidated in the Company’s consolidated financial statements.
Credit Fund primarily invests in first lien loans of middle market companies.
9 unchanged sentences
Middle Market Credit Fund SPV, LLC (the “Credit Fund Sub”), MMCF CLO 2017-1 LLC (the “2017-1 Issuer”), MMCF CLO 2019-2, LLC (the "2019-2 Issuer", formerly known as MMCF Warehouse, LLC (the "Credit Fund Warehouse")) and MMCF Warehouse II, LLC (the "Credit Fund Warehouse II"), each a Delaware limited liability company, were formed on April 5, 2016 and October 6, 2017, November 26, 2018 and August 16, 2019, respectively.
−Removed: Credit Fund Sub, the 2017-1 Issuer, the 2019-2 Issuer, and Credit Fund Warehouse II are wholly owned subsidiaries of Credit Fund and are consolidated in Credit Fund’s consolidated financial statements commencing from the date of their respective formations.
−Removed: Credit Fund Sub, the 2017-1 Issuer, the 2019-2 Issuer and Credit Fund Warehouse II primarily invest in first lien loans of middle market companies.
+Added: Credit Fund Sub, the 2019-2 Issuer, and Credit Fund Warehouse II are wholly owned subsidiaries of Credit Fund and are consolidated in Credit Fund’s consolidated financial statements commencing from the date of their respective formations.
+Added: In December 2020, the 2017-1 Issuer was redeemed in full and notes outstanding were repaid in full.
+Added: Credit Fund Sub, the 2019-2 Issuer and Credit Fund Warehouse II primarily invest in first lien loans of middle market companies.
Credit Fund and its wholly owned subsidiaries follow the same Internal Risk Rating System as the Company.
Refer to "Debt" below for discussions regarding the credit facilities entered into and the notes issued by such wholly-owned subsidiaries.
−Removed: Credit Fund, the Company and Credit Partners entered into an administration agreement with Carlyle Global Credit Administration L.L.C., the administrative agent of Credit Fund (in such capacity, the “Administrative Agent”), pursuant to which the Administrative Agent is delegated certain administrative and non-discretionary functions, is authorized to enter into sub-administration agreements at the expense of Credit Fund with the approval of the board of managers of Credit Fund, and is reimbursed by Credit Fund for its costs and expenses and Credit Fund’s allocable portion of overhead incurred by the Administrative Agent in performing its obligations thereunder.
+Added: Credit Fund, the Company and Credit Partners entered into an administration agreement with Carlyle Global Credit Administration L.L.C., the administrative agent of Credit Fund (in such capacity, the “Credit Fund Administrative Agent”), pursuant to which the Credit Fund Administrative Agent is delegated certain administrative and non-discretionary functions, is authorized to enter into sub-administration agreements at the expense of Credit Fund with the approval of the board of
+Added: managers of Credit Fund, and is reimbursed by Credit Fund for its costs and expenses and Credit Fund’s allocable portion of overhead incurred by the Credit Fund Administrative Agent in performing its obligations thereunder.
Selected Financial Data
4 unchanged sentences
Cash and cash equivalents 119,796 64,787
+Added: Other assets 7,553 9,369
+Added: Total assets $ 1,183,730 $ 1,320,995
LIABILITIES AND MEMBERS’ EQUITY
4 unchanged sentences
Subordinated loans and members’ equity (1)
+Added: 399,993 226,128
Total liabilities and members’ equity $ 1,183,730 $ 1,320,995
−Removed: (1) As of December 31, 2019 and 2018 , the Company's ownership interest in the subordinated loans and members' equity was $111,596 and $110,295 , respectively, and $93,000 and $112,000 , respectively in the mezzanine loans.
+Added: (1) As of December 31, 2020 and 2019, the fair value of the Company's ownership interest in the subordinated loans and members' equity was $205,891 and $111,596, respectively, and $0 and $93,000, respectively in the mezzanine loans.
For the Years Ended December 31,
10 unchanged sentences
Senior secured loans (1)
+Added: $ 1,084,491 $ 1,260,582
Weighted average yields of senior secured loans based on amortized cost (2)
+Added: 6.03 % 6.51 %
Weighted average yields of senior secured loans based on fair value (2)
+Added: 6.15 % 6.55 %
Number of portfolio companies in Credit Fund 54 61
Average amount per portfolio company (1)
+Added: $ 20,083 $ 20,665
Number of loans on non-accrual status — 1
Fair value of loans on non-accrual status $ — $ 21,150
−Removed: Percentage of portfolio at floating interest rates (3) (4)
−Removed: Percentage of portfolio at fixed interest rates (4)
+Added: Percentage of loans at floating interest rates (3) (4)
+Added: 97.7 % 98.3 %
+Added: Percentage of loans at fixed interest rates (4)
Fair value of loans with PIK provisions $ 24,113 $ 21,150
11 unchanged sentences
First Lien Debt (97.47% of fair value)
−Removed: Achilles Acquisition, LLC
−Removed: Banking, Finance, Insurance & Real Estate
−Removed: Acrisure, LLC
−Removed: Banking, Finance, Insurance & Real Estate
−Removed: Acrisure, LLC
−Removed: Banking, Finance, Insurance & Real Estate
−Removed: Advanced Instruments, LLC
−Removed: Healthcare & Pharmaceuticals
−Removed: Business Services
+Added: Acrisure, LLC \# (2)(3) Banking, Finance, Insurance & Real Estate L + 3.50% 3.65% 2/15/2027 $ 25,634 $ 25,606 $ 25,104
+Added: Alku, LLC +# (2)(3) Business Services L + 5.50% 5.75% 7/29/2026 23,666 23,466 23,512
Alpha Packaging Holdings, Inc.
−Removed: Containers, Packaging & Glass
−Removed: AmeriLife Group, LLC
−Removed: Banking, Finance, Insurance & Real Estate
+Added: +\ (2)(3) Containers, Packaging & Glass L + 6.00% 7.00% 11/12/2021 16,378 16,378 16,378
+Added: AmeriLife Holdings LLC # (2)(3) Banking, Finance, Insurance & Real Estate L + 4.00% 4.15% 3/18/2027 9,951 9,929 9,802
+Added: Analogic Corporation ^+ (2)(3)(6) Capital Equipment L + 5.25% 6.25% 6/22/2024 18,857 18,837 18,857
Anchor Packaging, Inc.
−Removed: Containers, Packaging & Glass
+Added: +# (2)(3) Containers, Packaging & Glass L + 4.00% 4.15% 7/18/2026 24,723 24,617 24,656
API Technologies Corp.
−Removed: Aerospace & Defense
+Added: +\ (2)(3) Aerospace & Defense L + 4.25% 4.49% 5/9/2026 14,775 14,713 13,999
+Added: +\ (2)(3) Software L + 4.25% 4.40% 4/23/2026 12,281 12,227 12,077
AQA Acquisition Holding, Inc.
−Removed: High Tech Industries
+Added: +\ (2)(3)(6) High Tech Industries L + 4.25% 5.25% 5/24/2023 18,759 18,752 18,757
+Added: Astra Acquisition Corp.
+Added: +# (2)(3) Software L + 5.50% 6.50% 3/1/2027 28,783 28,392 28,783
Avalign Technologies, Inc.
−Removed: Healthcare & Pharmaceuticals
−Removed: Big Ass Fans, LLC
−Removed: Capital Equipment
−Removed: Borchers, Inc.
−Removed: Chemicals, Plastics & Rubber
−Removed: Brooks Equipment Company, LLC
−Removed: Construction & Building
+Added: +\ (2)(3) Healthcare & Pharmaceuticals L + 4.50% 4.73% 12/22/2025 14,592 14,481 14,334
+Added: Big Ass Fans, LLC +\# (2)(3) Capital Equipment L + 3.75% 4.75% 5/21/2024 13,766 13,714 13,766
+Added: BK Medical Holding Company, Inc.
+Added: ^+ (2)(3)(6) Healthcare & Pharmaceuticals L + 5.25% 6.25% 6/22/2024 24,165 23,951 22,363
+Added: Chemical Computing Group ULC (Canada) ^+ (2)(3)(6) Software L + 5.00% 6.00% 8/30/2023 14,055 13,378 14,055
Clarity Telecom LLC.
−Removed: Broadcasting & Subscription
−Removed: Clearent Newco, LLC
−Removed: High Tech Industries
−Removed: High Tech Industries
+Added: + (2)(3) Media:
+Added: Broadcasting & Subscription L + 4.25% 4.40% 8/30/2026 14,813 14,773 14,813
+Added: Clearent Newco, LLC ^ (2)(3)(6) High Tech Industries L + 6.50% 7.50% 3/20/2025 4,079 4,079 3,907
+Added: Clearent Newco, LLC ^+\ (2)(3) High Tech Industries L + 5.50% 7.50% 3/20/2025 29,486 29,236 28,722
DecoPac, Inc.
−Removed: Non-durable Consumer Goods
−Removed: Dent Wizard International Corporation
+Added: ^+\ (2)(3)(6) Non-durable Consumer Goods L + 4.25% 5.25% 9/29/2024 12,336 12,253 12,318
+Added: Diligent Corporation ^+ (2)(3)(6) Telecommunications L + 6.25% 7.25% 8/4/2025 8,683 8,411 8,819
DTI Holdco, Inc.
−Removed: High Tech Industries
−Removed: Eliassen Group, LLC
−Removed: Business Services
−Removed: EIP Merger Sub, LLC (Evolve IP)
−Removed: Telecommunications
+Added: ^+\ (2)(3) High Tech Industries L + 4.75% 5.75% 9/30/2023 18,690 18,642 16,655
+Added: Eliassen Group, LLC +\ (2)(3) Business Services L + 4.25% 4.40% 11/5/2024 7,543 7,516 7,483
+Added: EvolveIP, LLC ^+ (2)(3)(6) Telecommunications L + 5.75% 6.75% 6/7/2023 19,800 19,759 19,775
Exactech, Inc.
−Removed: Healthcare & Pharmaceuticals
+Added: +\# (2)(3) Healthcare & Pharmaceuticals L + 3.75% 4.75% 2/14/2025 21,528 21,416 20,422
Excel Fitness Holdings, Inc.
−Removed: Hotel, Gaming & Leisure
−Removed: Golden West Packaging Group LLC
−Removed: Containers, Packaging & Glass
+Added: +# (2)(3) Hotel, Gaming & Leisure L + 5.25% 6.25% 10/7/2025 24,750 24,546 22,780
+Added: Frontline Technologies Holdings, LLC + (2)(3) Software L + 5.75% 6.75% 9/18/2023 14,886 14,198 14,589
+Added: Golden West Packaging Group LLC +\ (2)(3) Containers, Packaging & Glass L + 5.25% 6.25% 6/20/2023 29,012 28,896 28,974
HMT Holding Inc.
+Added: +\ (2)(3)(6) Energy:
+Added: Oil & Gas L + 5.00% 6.00% 11/17/2023 32,821 32,458 30,984
+Added: Integrity Marketing Acquisition, LLC ^+ (2)(3)(6) Banking, Finance, Insurance & Real Estate L + 6.25% 7.25% 8/27/2025 7,836 7,701 7,956
Jensen Hughes, Inc.
+Added: +\ (2)(3)(6) Utilities:
+Added: Electric L + 4.50% 5.50% 3/22/2024 34,584 34,489 33,424
KAMC Holdings, Inc.
−Removed: Aerospace & Defense
−Removed: Maravai Intermediate Holdings, LLC
−Removed: Healthcare & Pharmaceuticals
−Removed: Marco Technologies, LLC
−Removed: Advertising, Printing & Publishing
+Added: +# (2)(3) Energy:
+Added: Electricity L + 4.00% 4.23% 8/14/2026 13,825 13,768 12,531
+Added: KBP Investments, LLC ^+ (2)(3)(6) Beverage, Food & Tobacco L + 5.00% 6.00% 5/15/2023 9,292 9,059 9,350
+Added: Marco Technologies, LLC ^+\ (2)(3)(6) Media:
+Added: Advertising, Printing & Publishing L + 4.00% 5.00% 10/30/2023 7,332 7,293 7,332
+Added: Mold-Rite Plastics, LLC +\ (2)(3) Chemicals, Plastics & Rubber L + 4.25% 5.25% 12/14/2021 14,520 14,501 14,520
Consolidated Schedule of Investments as of December 31, 2020
1 unchanged sentence
Reference Rate & Spread (2)
−Removed: First Lien Debt (98.11% of fair value) (continued)
−Removed: Mold-Rite Plastics, LLC
−Removed: Chemicals, Plastics & Rubber
−Removed: Construction & Building
Newport Group Holdings II, Inc.
−Removed: Banking, Finance, Insurance & Real Estate
+Added: +\# (2)(3) Banking, Finance, Insurance & Real Estate L + 3.50% 3.75% 9/13/2025 23,475 23,285 23,405
Odyssey Logistics & Technology Corp.
+\# (2)(3) Transportation:
−Removed: Output Services Group
−Removed: Advertising, Printing & Publishing
−Removed: PAI Holdco, Inc.
−Removed: Park Place Technologies, Inc.
−Removed: High Tech Industries
+Added: Cargo L + 4.00% 5.00% 10/12/2024 $ 38,897 $ 38,773 $ 37,766
+Added: Output Services Group ^+\ (2)(3) Media:
+Added: Advertising, Printing & Publishing L + 4.50% 5.50% 3/27/2024 19,421 19,382 14,178
Pasternack Enterprises, Inc.
−Removed: Capital Equipment
−Removed: Pathway Vet Alliance LLC
−Removed: Consumer Services
+Added: +\ (2)(3) Capital Equipment L + 4.00% 5.00% 7/2/2025 22,524 22,513 22,218
Pharmalogic Holdings Corp.
−Removed: Healthcare & Pharmaceuticals
+Added: +\ (2)(3) Healthcare & Pharmaceuticals L + 4.00% 5.00% 6/11/2023 11,205 11,189 11,158
Premise Health Holding Corp.
−Removed: Healthcare & Pharmaceuticals
−Removed: Propel Insurance Agency, LLC
−Removed: Banking, Finance, Insurance & Real Estate
−Removed: Q Holding Company
−Removed: QW Holding Corporation (Quala)
−Removed: Environmental Industries
+Added: +\# (2)(3) Healthcare & Pharmaceuticals L + 3.50% 3.75% 7/10/2025 13,584 13,538 13,503
+Added: Propel Insurance Agency, LLC ^+\ (2)(3)(6) Banking, Finance, Insurance & Real Estate L + 5.00% 6.00% 6/1/2024 38,134 37,662 37,716
+Added: Q Holding Company +\# (2)(3) Automotive L + 5.00% 6.00% 12/31/2023 21,735 21,604 20,229
+Added: QW Holding Corporation + (2)(3)(6) Environmental Industries L + 6.25% 7.25% 8/31/2022 11,566 11,465 10,727
Radiology Partners, Inc.
−Removed: Healthcare & Pharmaceuticals
+Added: +\# (2)(3) Healthcare & Pharmaceuticals L + 4.25% 4.81% 7/9/2025 27,686 27,581 27,193
RevSpring Inc.
−Removed: Advertising, Printing & Publishing
−Removed: Situs Group Holdings Corporation
−Removed: Banking, Finance, Insurance & Real Estate
−Removed: Systems Maintenance Services Holding, Inc.
−Removed: High Tech Industries
−Removed: Surgical Information Systems, LLC
−Removed: High Tech Industries
+Added: +\# (2)(3) Media:
+Added: Advertising, Printing & Publishing L + 4.25% 4.40% 10/11/2025 29,449 29,265 29,199
+Added: Situs Group Holdings Corporation +\ (2)(3) Banking, Finance, Insurance & Real Estate L + 4.75% 5.75% 6/28/2025 14,781 14,689 14,636
T2 Systems, Inc.
^+ (2)(3)(6) Transportation:
+Added: Consumer L + 6.75% 7.75% 9/28/2022 29,119 28,743 29,118
The Original Cakerie, Ltd.
−Removed: Beverage, Food & Tobacco
+Added: (Canada) +\ (2)(3)(6) Beverage, Food & Tobacco L + 4.50% 5.50% 7/20/2022 6,295 6,281 6,289
The Original Cakerie, Ltd.
−Removed: Beverage, Food & Tobacco
+Added: (Canada) + (2)(3) Beverage, Food & Tobacco L + 5.00% 6.00% 7/20/2022 8,837 8,815 8,829
Thoughtworks, Inc.
−Removed: Business Services
−Removed: Acute Care Solutions, LLC
−Removed: Healthcare & Pharmaceuticals
+Added: \# (2)(3) Business Services L + 3.75% 4.75% 10/11/2024 11,704 11,683 11,704
+Added: Acute Care Solutions, LLC +\ (2)(3) Healthcare & Pharmaceuticals L + 6.00% 7.00% 5/15/2021 31,211 31,184 29,104
TelePacific Holdings Corp.
−Removed: Telecommunications
−Removed: Valet Waste Holdings, Inc.
−Removed: Construction & Building
+Added: +\ (2)(3) Telecommunications L + 5.50% 6.50% 5/2/2023 26,660 26,585 23,984
+Added: VRC Companies, LLC + (2)(3)(6) Business Services L + 6.50% 7.50% 3/31/2023 30,582 29,464 30,582
+Added: Water Holdings Acquisition LLC ^+ (2)(3)(6) Utilities:
+Added: Water L + 5.25% 6.25% 12/18/2026 26,316 25,520 25,516
Welocalize, Inc.
−Removed: Business Services
−Removed: WIRB - Copernicus Group, Inc.
−Removed: Healthcare & Pharmaceuticals
−Removed: Consolidated Schedule of Investments as of December 31, 2019
−Removed: Investments (1)
−Removed: Reference Rate & Spread (2)
−Removed: First Lien Debt (98.11% of fair value) (continued)
+Added: + (2)(3)(6) Business Services L + 4.50% 5.50% 12/23/2023 22,629 22,414 22,584
WRE Holding Corp.
−Removed: Environmental Industries
−Removed: High Tech Industries
+Added: ^+ (2)(3)(6) Environmental Industries L + 5.25% 6.25% 1/3/2023 8,367 8,336 8,252
First Lien Debt Total
+Added: $ 1,051,406 $ 1,029,687
Second Lien Debt (2.28% of fair value)
−Removed: DBI Holding, LLC
−Removed: Transportation:
−Removed: High Tech Industries
+Added: DBI Holding, LLC ^ (2) Transportation:
+Added: Cargo 9.00% PIK 9.00% 2/1/2026 $ 24,113 $ 23,768 $ 24,113
Second Lien Debt Total
+Added: $ 23,768 $ 24,113
Equity Investments (0.24% of fair value)
−Removed: DBI Holding, LLC
−Removed: Transportation:
+Added: DBI Holding, LLC ^ Transportation:
+Added: Cargo 2,961 $ — $ —
+Added: DBI Holding, LLC ^ Transportation:
+Added: Cargo 13,996 5,364 2,581
Equity Investments Total $ 5,364 $ 2,581
Total Investments
+Added: $ 1,080,538 $ 1,056,381
^ Denotes that all or a portion of the assets are owned by Credit Fund.
Credit Fund has entered into a revolving credit facility (the "Credit Fund Facility").
−Removed: Accordingly, such assets are not available to creditors of Credit Fund Sub, the 2017-1 Issuer, the 2019-2 Issuer or Credit Fund Warehouse II.
+Added: Accordingly, such assets are not available to creditors of Credit Fund Sub, the 2019-2 Issuer or Credit Fund Warehouse II.
+ Denotes that all or a portion of the assets are owned by Credit Fund Sub.
1 unchanged sentence
The lenders of the Credit Fund Sub Facility have a first lien security interest in substantially all of the assets of Credit Fund Sub.
−Removed: Accordingly, such assets are not available to creditors of Credit Fund, the 2017-1 Issuer, the 2019-2 Issuer or Credit Fund Warehouse II.
−Removed: * Denotes that all or a portion of the assets are owned by the 2017-1 Issuer and secure the notes issued in connection with a $399,900 term debt securitization completed by Credit Fund on December 19, 2017 (the “2017-1 Debt Securitization”).
−Removed: Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub, the 2019-2 Issuer or Credit Fund Warehouse II.
+Added: Accordingly, such assets are not available to creditors of Credit Fund, the 2019-2 Issuer or Credit Fund Warehouse II.
\ Denotes that all or a portion of the assets are owned by the 2019-2 Issuer and secure the notes issued in connection with a $399,900 term debt securitization completed by Credit Fund on May 21, 2019 (the “2019-2 Debt Securitization”).
−Removed: Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub, the 2017-1 Issuer or Credit Fund Warehouse II.
+Added: Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub, or Credit Fund Warehouse II.
# Denotes that all or a portion of the assets are owned by the Credit Fund Warehouse II.
1 unchanged sentence
The lenders of the Credit Fund Warehouse II Facility have a first lien security interest in substantially all of the assets of the Credit Fund Warehouse II.
−Removed: Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub, 2017-1 Issuer or 2019-2 Issuer.
+Added: Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub, or 2019-2 Issuer.
(1) Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States.
8 unchanged sentences
(5) Fair value is determined in good faith by or under the direction of the board of managers of Credit Fund, pursuant to Credit Fund’s valuation policy, with the fair value of all investments determined using significant unobservable inputs, which is substantially similar to the valuation policy of the Company provided in Note 3, Fair Value Measurements, to the consolidated financial statements in Part II, Item 8 of this Form 10-K.
−Removed: In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, Credit Fund is entitled to receive additional interest as a result of an agreement among lenders as follows:
−Removed: Surgical Information Systems, LLC ( 0.89% ).
−Removed: Pursuant to the agreement among lenders in respect of these loans, these investments represent a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payment.
(6) As of December 31, 2020, Credit Fund and Credit Fund Sub had the following unfunded commitments to fund delayed draw and revolving senior secured loans:
−Removed: First Lien Debt – unfunded delayed draw and revolving term loans commitments
−Removed: Par/ Principal Amount
−Removed: Advanced Instruments, LLC
−Removed: AmeriLife Group, LLC
−Removed: Anchor Packaging, Inc.
+Added: First Lien Debt – unfunded delayed draw and revolving term loans commitments Type Unused Fee Par/ Principal Amount Fair Value
+Added: Analogic Corporation Revolver 0.50 % $ 1,975 $ —
AQA Acquisition Holding, Inc.
−Removed: Borchers, Inc.
−Removed: Clearent Newco, LLC
+Added: Revolver 0.50 2,459 —
+Added: BK Medical Holding Company, Inc.
+Added: Revolver 0.50 2,609 (176)
+Added: Chemical Computing Group ULC (Canada) Revolver 0.50 873 —
+Added: Clearent Newco, LLC Delayed Draw 1.00 2,549 (66)
DecoPac, Inc.
−Removed: EIP Merger Sub, LLC (Evolve IP)
−Removed: EIP Merger Sub, LLC (Evolve IP)
+Added: Revolver 0.50 2,143 (3)
+Added: Diligent Corporation Delayed Draw 1.00 2,109 25
+Added: Diligent Corporation Revolver 0.50 703 8
+Added: EvolveIP, LLC Delayed Draw 1.00 1,904 (2)
+Added: EvolveIP, LLC Revolver 0.50 1,680 (2)
HMT Holding Inc.
+Added: Revolver 0.50 6,173 (291)
+Added: Integrity Marketing Acquistion, LLC Delayed Draw 1.00 4,144 41
Jensen Hughes, Inc.
+Added: Delayed Draw 1.00 1,127 (35)
Jensen Hughes, Inc.
−Removed: Marco Technologies, LLC
−Removed: Output Services Group
−Removed: Pathway Vet Alliance LLC
−Removed: Premise Health Holding Corp.
−Removed: Propel Insurance Agency, LLC
−Removed: Propel Insurance Agency, LLC
−Removed: QW Holding Corporation (Quala)
−Removed: QW Holding Corporation (Quala)
−Removed: Situs Group Holdings Corporation
+Added: Revolver 0.50 1,364 (43)
+Added: KBP Investments, LLC Delayed Draw 1.00 503 1
+Added: KBP Investments, LLC Delayed Draw 1.00 10,190 30
+Added: Marco Technologies, LLC Delayed Draw 1.00 7,500 —
+Added: Propel Insurance Agency, LLC Revolver 0.50 1,905 (19)
+Added: Propel Insurance Agency, LLC Delayed Draw 1.00 1,733 (17)
+Added: QW Holding Corporation Revolver 0.50 5,498 (268)
+Added: QW Holding Corporation Delayed Draw 1.00 161 (8)
T2 Systems, Inc.
+Added: Revolver 0.50 1,955 —
The Original Cakerie, Ltd.
+Added: (Canada) Revolver 0.50 1,665 (1)
+Added: VRC Companies, LLC Revolver 0.50 858 —
+Added: Water Holdings Acquisition LLC Delayed Draw 1.00 8,421 (168)
+Added: Water Holdings Acquisition LLC Revolver 0.50 5,263 (105)
Welocalize, Inc.
−Removed: WIRB - Copernicus Group, Inc.
−Removed: WIRB - Copernicus Group, Inc.
+Added: Revolver 0.50 2,250 (4)
WRE Holding Corp.
+Added: Revolver 0.50 852 (10)
WRE Holding Corp.
+Added: Delayed Draw 1.00 563 (7)
Total unfunded commitments $ 81,129 $ (1,120)
−Removed: (8) Loan was on non-accrual status as of December 31, 2019 .
Consolidated Schedule of Investments as of December 31, 2019
1 unchanged sentence
Reference Rate & Spread (2)
−Removed: Interest Rate (2)
−Removed: Maturity Date
−Removed: Par/ Principal Amount
−Removed: Amortized Cost (5)
−Removed: Fair Value (6)
First Lien Debt (98.11% of fair value)
−Removed: Achilles Acquisition, LLC
−Removed: Banking, Finance, Insurance & Real Estate
−Removed: Acrisure, LLC
−Removed: Banking, Finance, Insurance & Real Estate
−Removed: Acrisure, LLC
−Removed: Banking, Finance, Insurance & Real Estate
−Removed: Advanced Instruments, LLC
−Removed: Healthcare & Pharmaceuticals
−Removed: High Tech Industries
+Added: Achilles Acquisition, LLC \+# (2) (3) Banking, Finance, Insurance & Real Estate L + 4.00% 5.75% 10/13/2025 $ 17,865 $ 17,776 $ 17,763
+Added: Acrisure, LLC +\ (2) (3) Banking, Finance, Insurance & Real Estate L + 3.75% 5.85% 11/22/2023 11,820 11,810 11,805
+Added: Acrisure, LLC +\# (2) (3) Banking, Finance, Insurance & Real Estate L + 4.25% 6.35% 11/22/2023 20,674 20,639 20,674
+Added: Advanced Instruments, LLC ^+\* (2) (3) (7) Healthcare & Pharmaceuticals L + 5.25% 6.99% 10/31/2022 35,610 35,536 35,466
+Added: Alku, LLC +# (2) (3) Business Services L + 5.50% 7.44% 7/29/2026 25,000 24,754 24,624
Alpha Packaging Holdings, Inc.
−Removed: Containers, Packaging & Glass
−Removed: AM Conservation Holding Corporation
+Added: +*\ (2) (3) Containers, Packaging & Glass L + 4.25% 6.35% 5/12/2020 16,684 16,676 16,601
+Added: AmeriLife Group, LLC ^# (2) (3) (7) Banking, Finance, Insurance & Real Estate L + 4.50% 6.20% 6/5/2026 16,627 16,557 16,558
+Added: Anchor Packaging, Inc.
+Added: ^# (2) (3) (7) Containers, Packaging & Glass L + 4.00% 5.70% 7/18/2026 20,462 20,363 20,457
+Added: API Technologies Corp.
+Added: \+ (2) (3) Aerospace & Defense L + 4.25% 5.95% 5/9/2026 14,925 14,853 14,807
+Added: +\ (2) (3) Software L + 4.25% 6.34% 4/23/2026 12,406 12,344 12,385
AQA Acquisition Holding, Inc.
−Removed: High Tech Industries
+Added: ^*\ (2) (3) (7) High Tech Industries L + 4.25% 6.16% 5/24/2023 18,954 18,922 18,860
Avalign Technologies, Inc.
−Removed: Healthcare & Pharmaceuticals
−Removed: Big Ass Fans, LLC
−Removed: Capital Equipment
+Added: +\ (2) (3) Healthcare & Pharmaceuticals L + 4.50% 6.70% 12/22/2025 14,741 14,610 14,626
+Added: Big Ass Fans, LLC +*\ (2) (3) Capital Equipment L + 3.75% 5.85% 5/21/2024 13,909 13,841 13,903
Borchers, Inc.
−Removed: Chemicals, Plastics & Rubber
−Removed: Brooks Equipment Company, LLC
−Removed: Construction & Building
−Removed: Clearent Newco, LLC
−Removed: High Tech Industries
−Removed: DBI Holding, LLC
−Removed: Transportation:
−Removed: DBI Holding, LLC
−Removed: Transportation:
−Removed: 15% (100% PIK)
+Added: +*\ (2) (3) (7) Chemicals, Plastics & Rubber L + 4.50% 6.60% 11/1/2024 15,116 15,072 15,085
+Added: Brooks Equipment Company, LLC * (2) (3) Construction & Building L + 5.00% 6.91% 8/29/2020 5,144 5,141 5,141
+Added: Clarity Telecom LLC.
+Added: + (2) (3) Media:
+Added: Broadcasting & Subscription L + 4.50% 6.20% 8/30/2026 14,963 14,915 14,902
+Added: Clearent Newco, LLC ^+\ (2) (3) (7) High Tech Industries L + 5.50% 7.44% 3/20/2025 29,738 29,436 29,134
+Added: +\ (2) (3) High Tech Industries L + 4.25% 5.95% 4/2/2026 12,438 12,375 12,420
DecoPac, Inc.
−Removed: Non-durable Consumer Goods
−Removed: Dent Wizard International Corporation
+Added: +*\ (2) (3) (7) Non-durable Consumer Goods L + 4.25% 6.01% 9/29/2024 12,336 12,233 12,292
+Added: Dent Wizard International Corporation +\ (2) (3) Automotive L + 4.00% 5.70% 4/7/2020 36,880 36,843 36,717
DTI Holdco, Inc.
−Removed: High Tech Industries
−Removed: EIP Merger Sub, LLC (Evolve IP)
−Removed: Telecommunications
−Removed: EIP Merger Sub, LLC (Evolve IP)
−Removed: Telecommunications
−Removed: Eliassen Group, LLC
−Removed: Business Services
+Added: +*\ (2) (3) High Tech Industries L + 4.75% 6.68% 9/30/2023 18,885 18,771 17,611
+Added: Eliassen Group, LLC +\ (2) (3) Business Services L + 4.50% 6.20% 11/5/2024 7,581 7,548 7,579
+Added: EIP Merger Sub, LLC (Evolve IP) +^ (2) (3) (7) Telecommunications L + 5.75% 7.45% 6/7/2023 19,661 19,605 19,661
Exactech, Inc.
−Removed: Healthcare & Pharmaceuticals
−Removed: Executive Consulting Group, LLC, Inc.
−Removed: Business Services
−Removed: Golden West Packaging Group LLC
−Removed: Containers, Packaging & Glass
+Added: +\# (2) (3) Healthcare & Pharmaceuticals L + 3.75% 5.45% 2/14/2025 21,772 21,634 21,751
+Added: Excel Fitness Holdings, Inc.
+Added: +# (2) (3) Hotel, Gaming & Leisure L + 5.25% 6.95% 10/7/2025 25,000 24,758 24,875
+Added: Golden West Packaging Group LLC +*\ (2) (3) Containers, Packaging & Glass L + 5.75% 7.45% 6/20/2023 29,464 29,303 29,072
HMT Holding Inc.
−Removed: Banking, Finance, Insurance & Real Estate
+Added: ^+*\ (2) (3) (7) Energy:
+Added: Oil & Gas L + 5.00% 6.74% 11/17/2023 33,157 32,678 32,972
Jensen Hughes, Inc.
−Removed: Kestra Financial, Inc.
−Removed: Banking, Finance, Insurance & Real Estate
−Removed: Aerospace & Defense
−Removed: Maravai Intermediate Holdings, LLC
−Removed: Healthcare & Pharmaceuticals
+Added: \+^* (2) (3) (7) Utilities:
+Added: Electric L + 4.50% 6.24% 3/22/2024 33,909 33,757 33,550
+Added: KAMC Holdings, Inc.
+Added: +# (2) (3) Energy:
+Added: Electricity L + 4.00% 5.91% 8/14/2026 13,965 13,899 13,881
+Added: ^+\ (2) (3) (7) Aerospace & Defense L + 4.75% 6.46% 6/6/2025 28,471 28,242 28,286
+Added: Maravai Intermediate Holdings, LLC +\# (2) (3) Healthcare & Pharmaceuticals L + 4.25% 6.00% 8/2/2025 29,625 29,378 29,400
+Added: Marco Technologies, LLC ^+\ (2) (3) (7) Media:
+Added: Advertising, Printing & Publishing L + 4.25% 6.16% 10/30/2023 7,463 7,410 7,463
Consolidated Schedule of Investments as of December 31, 2019
1 unchanged sentence
Reference Rate & Spread (2)
−Removed: Maturity Date
−Removed: Par/ Principal Amount
−Removed: Amortized Cost (5)
−Removed: Fair Value (6)
−Removed: First Lien Debt (99.91% of fair value)
−Removed: Mold-Rite Plastics, LLC
−Removed: Chemicals, Plastics & Rubber
−Removed: Construction & Building
+Added: Mold-Rite Plastics, LLC +\ (2) (3) Chemicals, Plastics & Rubber L + 4.25% 5.95% 12/14/2021 $ 14,557 $ 14,519 $ 14,524
+Added: ^+*\ (2) (3) (7) Construction & Building L + 4.25% 5.95% 12/31/2024 38,251 38,138 38,166
Newport Group Holdings II, Inc.
−Removed: Banking, Finance, Insurance & Real Estate
−Removed: North American Dental Management, LLC
−Removed: Healthcare & Pharmaceuticals
−Removed: North Haven CA Holdings, Inc.
−Removed: Business Services
−Removed: Odyssey Logistics & Technology Corporation
+Added: \+# (2) (3) Banking, Finance, Insurance & Real Estate L + 3.75% 5.65% 9/13/2025 23,715 23,487 23,663
+Added: Odyssey Logistics & Technology Corp.
+*\# (2) (3) Transportation:
−Removed: Output Services Group
−Removed: Advertising, Printing & Publishing
+Added: Cargo L + 4.00% 5.70% 10/12/2024 39,013 38,859 38,763
+Added: Output Services Group ^+\ (2) (3) (7) Media:
+Added: Advertising, Printing & Publishing L + 4.50% 6.20% 3/27/2024 19,621 19,570 19,469
PAI Holdco, Inc.
+Added: +*\ (2) (3) Automotive L + 4.25% 6.35% 1/5/2025 19,532 19,458 19,532
Park Place Technologies, Inc.
−Removed: High Tech Industries
+Added: +\# (2) (3) High Tech Industries L + 4.00% 5.70% 3/28/2025 22,566 22,489 22,566
Pasternack Enterprises, Inc.
−Removed: Capital Equipment
+Added: +\ (2) (3) Capital Equipment L + 4.00% 5.70% 7/2/2025 22,755 22,742 22,653
+Added: Pathway Vet Alliance LLC +\ (2) (3) (7) Consumer Services L + 4.50% 6.21% 12/20/2024 19,085 18,708 19,217
Pharmalogic Holdings Corp.
−Removed: Healthcare & Pharmaceuticals
−Removed: Ping Identity Corporation
−Removed: High Tech Industries
−Removed: Premier Senior Marketing, LLC
−Removed: Banking, Finance, Insurance & Real Estate
+Added: +\ (2) (3) Healthcare & Pharmaceuticals L + 4.00% 5.70% 6/11/2023 11,320 11,296 11,302
Premise Health Holding Corp.
−Removed: Healthcare & Pharmaceuticals
−Removed: Propel Insurance Agency, LLC
−Removed: Banking, Finance, Insurance & Real Estate
−Removed: PSI Services, LLC
−Removed: Business Services
−Removed: Q Holding Company
−Removed: QW Holding Corporation (Quala)
−Removed: Environmental Industries
+Added: ^+\# (2) (3) (7) Healthcare & Pharmaceuticals L + 3.50% 5.60% 7/10/2025 13,723 13,665 13,501
+Added: Propel Insurance Agency, LLC ^+\ (2) (3) (7) Banking, Finance, Insurance & Real Estate L + 4.25% 6.35% 6/1/2024 22,532 22,056 22,395
+Added: Q Holding Company +*\# (2) (3) Automotive L + 5.00% 6.70% 12/31/2023 21,955 21,777 21,922
+Added: QW Holding Corporation (Quala) ^+* (2) (3) (7) Environmental Industries L + 5.75% 7.73% 8/31/2022 11,630 11,449 11,531
+Added: Radiology Partners, Inc.
+Added: +\# (2) (3) Healthcare & Pharmaceuticals L + 4.75% 6.66% 7/9/2025 28,719 28,590 28,768
RevSpring Inc.
−Removed: Advertising, Printing & Publishing
−Removed: Situs Group Holdings Corporation
−Removed: Banking, Finance, Insurance & Real Estate
−Removed: Surgical Information Systems, LLC
−Removed: High Tech Industries
+Added: +*\# (2) (3) Media:
+Added: Advertising, Printing & Publishing L + 4.00% 5.95% 10/11/2025 24,750 24,631 24,608
+Added: Situs Group Holdings Corporation \+^ (2) (3) (7) Banking, Finance, Insurance & Real Estate L + 4.75% 6.45% 6/28/2025 13,715 13,621 13,697
Systems Maintenance Services Holding, Inc.
−Removed: High Tech Industries
−Removed: T2 Systems Canada, Inc.
−Removed: Transportation:
+Added: +* (2) (3) High Tech Industries L + 5.00% 6.70% 10/30/2023 23,765 23,672 18,180
+Added: Surgical Information Systems, LLC +*\ (2) (3) (6) High Tech Industries L + 4.75% 7.47% 4/24/2023 26,168 26,005 25,715
T2 Systems, Inc.
^+* (2) (3) (7) Transportation:
−Removed: The Original Cakerie, Co.
−Removed: Beverage, Food & Tobacco
+Added: Consumer L + 6.75% 8.85% 9/28/2022 18,045 17,789 18,045
The Original Cakerie, Ltd.
−Removed: Beverage, Food & Tobacco
+Added: (Canada) +* (2) (3) (7) Beverage, Food & Tobacco L + 5.00% 6.84% 7/20/2022 8,928 8,897 8,887
+Added: The Original Cakerie, Ltd.
+Added: (Canada) ^* (2) (3) (7) Beverage, Food & Tobacco L + 4.50% 6.34% 7/20/2022 6,826 6,801 6,790
ThoughtWorks, Inc.
−Removed: Business Services
−Removed: Acute Care Solutions, LLC
−Removed: Healthcare & Pharmaceuticals
+Added: +*\ (2) (3) Business Services L + 4.00% 5.70% 10/11/2024 11,824 11,794 11,824
+Added: Acute Care Solutions, LLC +\* (2) (3) Healthcare & Pharmaceuticals L + 5.00% 6.91% 5/15/2021 31,431 31,331 29,869
TelePacific Holdings Corp.
−Removed: Telecommunications
−Removed: Upstream Intermediate, LLC
−Removed: Healthcare & Pharmaceuticals
−Removed: Consolidated Schedule of Investments as of December 31, 2018
−Removed: Investments (1)
−Removed: Reference Rate & Spread (2)
−Removed: Maturity Date
−Removed: Par/ Principal Amount
−Removed: Amortized Cost (5)
−Removed: Fair Value (6)
−Removed: First Lien Debt (99.91% of fair value)
+Added: +*\ (2) (3) Telecommunications L + 5.00% 7.10% 5/2/2023 26,660 26,499 25,430
Valet Waste Holdings, Inc.
−Removed: Construction & Building
−Removed: Valicor Environmental Services, LLC
−Removed: Environmental Industries
+Added: +\ (2) (3) Construction & Building L + 3.75% 5.70% 9/28/2025 11,850 11,825 11,688
+Added: Welocalize, Inc.
+Added: +^ (2) (3) (7) Business Services L + 4.50% 6.21% 12/2/2024 23,038 22,788 22,787
WIRB - Copernicus Group, Inc.
−Removed: Healthcare & Pharmaceuticals
+Added: +*\ (2) (3) (7) Healthcare & Pharmaceuticals L + 4.25% 5.95% 8/15/2022 20,888 20,822 20,887
WRE Holding Corp.
−Removed: Environmental Industries
−Removed: High Tech Industries
+Added: ^+* (2) (3) (7) Environmental Industries L + 5.00% 6.91% 1/3/2023 7,431 7,372 7,304
+Added: +*\ (2) (3) (7) High Tech Industries L + 5.00% 6.93% 11/17/2022 19,228 19,107 19,211
First Lien Debt Total
+Added: $ 1,231,436 $ 1,223,215
+Added: Consolidated Schedule of Investments as of December 31, 2019
+Added: Investments (1)
+Added: Reference Rate & Spread (2)
Second Lien Debt (1.75% of fair value)
−Removed: High Tech Industries
+Added: DBI Holding, LLC ^* (2) (3) (8) Transportation:
+Added: Cargo 8.00% PIK 8.00% 2/1/2026 $ 21,150 $ 20,697 $ 21,150
+Added: * (2) (3) High Tech Industries L + 9.00% 10.94% 11/17/2023 666 660 664
Second Lien Debt Total
+Added: $ 21,357 $ 21,814
+Added: Equity Investments (0.15% of fair value)
+Added: DBI Holding, LLC ^ Transportation:
+Added: Cargo 16,957 $ 5,364 $ 1,810
+Added: Equity Investments Total $ 5,364 $ 1,810
Total Investments
+Added: $ 1,258,157 $ 1,246,839
^ Denotes that all or a portion of the assets are owned by Credit Fund.
−Removed: Credit Fund has entered into the Credit Fund Facility.
−Removed: The lenders of the Credit Fund Facility have a first lien security interest in substantially all of the assets of Credit Fund.
−Removed: Accordingly, such assets are not available to creditors of Credit Fund Sub, the 2017-1 Issuer or the Credit Fund Warehouse.
+Added: Credit Fund has entered into a revolving credit facility (the "Credit Fund Facility").
+Added: Accordingly, such assets are not available to creditors of Credit Fund Sub, the 2017-1 Issuer, the 2019-2 Issuer or Credit Fund Warehouse II.
+ Denotes that all or a portion of the assets are owned by Credit Fund Sub.
1 unchanged sentence
The lenders of the Credit Fund Sub Facility have a first lien security interest in substantially all of the assets of Credit Fund Sub.
−Removed: Accordingly, such assets are not available to creditors of Credit Fund, the 2017-1 Issuer or the Credit Fund Warehouse.
+Added: Accordingly, such assets are not available to creditors of Credit Fund, the 2017-1 Issuer, the 2019-2 Issuer or Credit Fund Warehouse II.
* Denotes that all or a portion of the assets are owned by the 2017-1 Issuer and secure the notes issued in connection with a $399,900 term debt securitization completed by Credit Fund on December 19, 2017 (the “2017-1 Debt Securitization”).
−Removed: Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub or the Credit Fund Warehouse.
−Removed: \ Denotes that all or a portion of the assets are owned by the Credit Fund Warehouse.
−Removed: Credit Fund Warehouse has entered into a revolving credit facility (the “Credit Fund Warehouse Facility”).
−Removed: The lenders of the Credit Fund Warehouse Facility have a first lien security interest in substantially all of the assets of the Credit Fund Warehouse.
−Removed: Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub or the 2017-1 Issuer.
+Added: Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub, the 2019-2 Issuer or Credit Fund Warehouse II.
+Added: \ Denotes that all or a portion of the assets are owned by the 2019-2 Issuer and secure the notes issued in connection with a $399,900 term debt securitization completed by Credit Fund on May 21, 2019 (the “2019-2 Debt Securitization”).
+Added: Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub, the 2017-1 Issuer or Credit Fund Warehouse II.
+Added: # Denotes that all or a portion of the assets are owned by the Credit Fund Warehouse II.
+Added: Credit Fund Warehouse II has entered into a revolving credit facility (the "Credit Fund Warehouse II").
+Added: The lenders of the Credit Fund Warehouse II Facility have a first lien security interest in substantially all of the assets of the Credit Fund Warehouse II.
+Added: Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub, 2017-1 Issuer or 2019-2 Issuer.
(1) Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States.
6 unchanged sentences
(3) Loan includes interest rate floor feature, which is generally 1.00%.
−Removed: Credit Fund receives less than the stated interest rate of this loan as a result of an agreement among lenders.
−Removed: The interest rate reduction is 1.20% on EIP Merger Sub, LLC (Evolve IP).
−Removed: Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/first out loan, which has first priority ahead of the first lien/last out loan with respect to principal, interest and other payments.
(4) Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.
4 unchanged sentences
(7) As of December 31, 2019, Credit Fund had the following unfunded commitments to fund delayed draw and revolving senior secured loans:
−Removed: First Lien Debt – unfunded delayed draw and revolving term loans commitments
−Removed: Par/ Principal Amount
−Removed: Advanced Instruments, LLC
+Added: First Lien Debt – unfunded delayed draw and revolving term loans commitments Type Unused Fee Par/ Principal Amount Fair Value
+Added: Advanced Instruments, LLC Revolver 0.50 % $ 563 $ (2)
+Added: AmeriLife Group, LLC Delayed Draw 1.00 298 (1)
+Added: Anchor Packaging, Inc.
+Added: Delayed Draw 1.00 4,487 (1)
AQA Acquisition Holding, Inc.
+Added: Revolver 0.50 2,459 (11)
Borchers, Inc.
−Removed: Clearent Newco, LLC
−Removed: Clearent Newco, LLC
+Added: Revolver 0.50 1,935 (3)
+Added: Clearent Newco, LLC Delayed Draw 1.00 6,636 (110)
DecoPac, Inc.
−Removed: Executive Consulting Group, LLC, Inc.
+Added: Revolver 0.50 2,143 (7)
+Added: EIP Merger Sub, LLC (Evolve IP) Revolver 0.50 1,680 —
+Added: EIP Merger Sub, LLC (Evolve IP) Delayed Draw 1.00 2,240 —
HMT Holding Inc.
+Added: Revolver 0.50 6,173 (29)
Jensen Hughes, Inc.
+Added: Revolver 0.50 1,136 (11)
Jensen Hughes, Inc.
−Removed: North American Dental Management, LLC
−Removed: North Haven CA Holdings, Inc.
−Removed: (CoAdvantage)
−Removed: Output Services Group
−Removed: Pharmalogic Holdings Corp.
+Added: Delayed Draw 1.00 2,365 (23)
+Added: Revolver 0.50 2,188 (13)
+Added: Marco Technologies, LLC Delayed Draw 1.00 7,500 —
+Added: Delayed Draw 1.00 1,913 (4)
+Added: Output Services Group Delayed Draw 4.25 116 (1)
+Added: Pathway Vet Alliance LLC Delayed Draw 1.00 19,867 68
Premise Health Holding Corp.
−Removed: Propel Insurance Agency, LLC
−Removed: Propel Insurance Agency, LLC
−Removed: PSI Services LLC
−Removed: QW Holding Corporation (Quala)
+Added: Delayed Draw 1.00 1,103 (17)
+Added: Propel Insurance Agency, LLC Revolver 0.50 2,381 (10)
+Added: Propel Insurance Agency, LLC Delayed Draw 0.50 7,143 (31)
+Added: QW Holding Corporation (Quala) Revolver 0.50 5,498 (31)
+Added: QW Holding Corporation (Quala) Delayed Draw 1.00 217 (1)
+Added: Situs Group Holdings Corporation Delayed Draw 1.00 1,216 (1)
T2 Systems, Inc.
+Added: Revolver 0.50 1,369 —
The Original Cakerie, Ltd.
−Removed: Upstream Intermediate, LLC
−Removed: Valicor Environmental Services, LLC
+Added: (Canada) Revolver 0.50 1,199 (5)
+Added: Welocalize, Inc.
+Added: Revolver 0.50 2,057 (21)
WIRB - Copernicus Group, Inc.
+Added: Revolver 0.50 1,000 —
WIRB - Copernicus Group, Inc.
+Added: Delayed Draw 1.00 2,592 —
WRE Holding Corp.
+Added: Revolver 0.50 441 (6)
WRE Holding Corp.
+Added: Delayed Draw 1.00 1,981 (25)
+Added: Revolver 0.50 998 (1)
Total unfunded commitments $ 92,894 $ (297)
2 unchanged sentences
In addition, until May 15, 2019, the 2019-2 Issuer (formerly known as the Credit Fund Warehouse) was party to the Credit Fund Warehouse Facility.
−Removed: As of December 31, 2019 , Credit Fund, Credit Fund Sub, and Credit Fund Warehouse II were in compliance with all covenants and other requirements of their respective credit facility agreements.
−Removed: As of December 31, 2018, Credit Fund, Credit Fund Sub and the 2019-2 Issuer were in compliance with all covenants and other requirements of their respective credit facility agreements.
+Added: As of December 31, 2020 and 2019, Credit Fund, Credit Fund Sub, and Credit Fund Warehouse II were in compliance with all covenants and other requirements of their respective credit facility agreements.
Below is a summary of the borrowings and repayments under the credit facilities for the respective periods.
−Removed: Credit Fund Sub
−Removed: Credit Fund Warehouse Facility
−Removed: Credit Fund Warehouse II Facility
+Added: Facility Credit Fund Sub
+Added: Facility Credit Fund Warehouse Facility Credit Fund Warehouse II Facility
Outstanding balance as of December 31, 2018 $ 112,000 $ 471,134 $ 101,044 $ —
+Added: Borrowings 126,200 223,870 34,544 97,571
+Added: Repayments (145,200) (351,498) (135,588) —
Outstanding balance as of December 31, 2019 93,000 343,506 — 97,571
+Added: Borrowings 63,500 269,313 — 54,373
+Added: Repayments (156,500) (191,960) — (58,542)
Outstanding balance as of December 31, 2020 $ — $ 420,859 $ — $ 93,402
Credit Fund Facility.
−Removed: On June 24, 2016, Credit Fund entered into the Credit Fund Facility with the Company, which was subsequently amended on June 5, 2017, October 2, 2017, November 3, 2017, June 22, 2018, June 29, 2018 and February 21, 2019, pursuant to which Credit Fund may from time to time request mezzanine loans from the Company.
+Added: On June 24, 2016, Credit Fund entered into the Credit Fund Facility with the Company, which was subsequently amended on June 5, 2017, October 2, 2017, November 3, 2017, June 22, 2018, June 29, 2018, February 21, 2019, March 20, 2020 and February 22, 2021, pursuant to which Credit Fund may from time to time request mezzanine loans from the Company.
The maximum principal amount of the Credit Fund Facility is $175,000.
−Removed: The maturity date of the Credit Fund Facility is March 22, 2020.
+Added: The maturity date of the Credit Fund Facility is March 22, 2021 (May 21, 2022 following the February 22, 2021 amendment).
Amounts borrowed under the Credit Fund Facility bear interest at a rate of LIBOR plus 9.00%.
Credit Fund Sub Facility.
−Removed: On June 24, 2016, Credit Fund Sub closed on the Credit Fund Sub Facility with lenders, which was subsequently amended on May 31, 2017, October 27, 2017, August 24, 2018 and December 12, 2019.
+Added: On June 24, 2016, Credit Fund Sub closed on the Credit Fund Sub Facility with lenders, which was subsequently amended on May 31, 2017, October 27, 2017, August 24, 2018, December 12, 2019 and March 11, 2020.
The Credit Fund Sub Facility provides for secured borrowings during the applicable revolving period up to an amount equal to $640,000.
14 unchanged sentences
The maturity date of the Credit Fund Warehouse II Facility is August 16, 2022.
−Removed: Amounts borrowed under the Credit Fund Warehouse II Facility bear interest at a rate of LIBOR plus 1.05% for the first 12 months, LIBOR plus 1.15% for the next 12 months and LIBOR plus 1.50% in the final 12 months.
+Added: Amounts borrowed under the Credit Fund Warehouse II Facility bear interest at a rate of LIBOR plus 1.15% until August 2021.
+Added: Amounts borrowed under the Credit Fund Warehouse II Facility during the first 12 months bore interest at a rate of LIBOR plus 1.05%, and amounts borrowed in the final 12 months will bear interest at LIBOR plus 1.50%.
On December 19, 2017, Credit Fund completed the 2017-1 Debt Securitization.
7 unchanged sentences
• $25,100 of Ba2/BB Class D Notes which bear interest at the three-month LIBOR plus 6.38%.
−Removed: The 2017-1 Notes are scheduled to mature on January 15, 2028.
+Added: The 2017-1 Notes were scheduled to mature on January 15, 2028.
Credit Fund received 100% of the preferred interests issued by the 2017-1 Issuer (the “2017-1 Issuer Preferred Interests”) on the closing date of the 2017-1 Debt Securitization in exchange for Credit Fund’s contribution to the 2017-1 Issuer of the initial closing date loan portfolio.
The 2017-1 Issuer Preferred Interests do not bear interest and had a nominal value of $47,900 at closing.
−Removed: As of December 31, 2019 and 2018 , the 2017-1 Issuer was in compliance with all covenants and other requirements of the indenture.
+Added: The 2017-1 Notes were fully redeemed during the year ended December 31, 2020.
On May 21, 2019, Credit Fund completed the 2019-2 Debt Securitization.
10 unchanged sentences
As of December 31, 2020, the 2019-2 Issuer was in compliance with all covenants and other requirements of the indenture.
+Added: MIDDLE MARKET CREDIT FUND II, LLC
+Added: On November 3, 2020, the Company and CCLF entered into a limited liability company agreement to co-manage Credit Fund II, a Delaware limited liability company that is not consolidated in the Company's consolidated financial statements.
+Added: Credit Fund II primarily invests in senior secured loans of middle market companies.
+Added: Credit Fund II is managed by a four-member board, on which the Company and CCLF have equal representation.
+Added: Establishing a quorum for Credit Fund II's board requires at least one of the Company's representatives and one of CCLF's representatives.
+Added: The Company and CCLF have 84.13% and 15.87% economic ownership of Credit Fund II, respectively.
+Added: By virtue of its membership interest, each of the Company and CCLF indirectly bears an allocable share of all expenses and other obligations of Credit Fund II.
+Added: Credit Fund II's initial portfolio consists of 45 senior secured loans of middle market companies with an aggregate principal balance of approximately $250 million.
+Added: Credit Fund II's initial portfolio was funded on November 3, 2020 with existing senior secured debt investments contributed by the Company and as part of the transaction, the Company determined that the contribution met the requirements under ASC 860, Transfers and Servicing .
+Added: Credit Fund II is expected to make only limited new investments in senior secured loans of middle market companies.
+Added: Portfolio and investment decisions with respect to Credit Fund II must be unanimously approved by a quorum of Credit Fund II’s board members consisting of at least one of the Company's representatives and one of CCLF's representatives.
+Added: Therefore, although the Company owns more than 25% of the voting securities of Credit Fund II, the Company does not believe that it has control over Credit Fund (other than for purposes of the Investment Company Act).
+Added: Middle Market Credit Fund II SPV, LLC (“Credit Fund II Sub”), a Delaware limited liability company, was formed on September 4, 2020.
+Added: Credit Fund II Sub is a wholly owned subsidiary of Credit Fund II and is consolidated in Credit Fund II’s consolidated financial statements commencing from the date of its formation.
+Added: Credit Fund II Sub primarily holds investments in first lien loans of middle market companies, which are pledged as security for the Credit Fund II Senior Notes (see below).
+Added: Credit Fund II, the Company and CCLF entered into an administration agreement with Carlyle Global Credit Administration L.L.C., the administrative agent of Credit Fund II (in such capacity, the “Credit Fund II Administrative Agent”), pursuant to which the Credit Fund II Administrative Agent is delegated certain administrative and non-discretionary functions, is authorized to enter into sub-administration agreements at the expense of Credit Fund II with the approval of the board of managers of Credit Fund II, and is reimbursed by Credit Fund II for its costs and expenses and Credit Fund II’s allocable portion of overhead incurred by the Credit Fund II Administrative Agent in performing its obligations thereunder.
+Added: Credit Fund II Senior Notes
+Added: On November 3, 2020, Credit Fund II Sub closed on the Credit Fund II Senior Notes (the “Credit Fund II Senior Notes”) with lenders.
+Added: The Credit Fund II Senior Notes provides for secured borrowings totaling $157,500 with two tranches,
+Added: A-1 and A-2 outstanding.
+Added: The facility is secured by a first lien security interest in substantially all of the portfolio investments held by Credit Fund II Sub.
+Added: The maturity date of the Credit Fund II Senior Notes Sub Facility is November 3, 2030.
+Added: Amounts issued for the Class A-1 notes totaled $147,500 and bear interest at a rate of LIBOR plus 2.70%, and amounts issued for the Class A-2 notes totaled $10,000 and bear interest at LIBOR plus 3.20%.
+Added: The A-1 Notes were rated AAA, and the A-2 Notes were rated AA by DBRS Morningstar.
+Added: The terms of the Credit Fund II Senior Notes provide that as loans pay down, up to $50,000 is available from principal proceeds for reinvestment, and then the investment principal proceeds are used to directly pay down the principal balance on the Credit Fund II Senior Notes.
+Added: As of December 31, 2020, Credit Fund II Sub was in compliance with all covenants and other requirements of its respective credit agreements.
+Added: Selected Financial Data
+Added: Since inception of Credit Fund II and through December 31, 2020, the Company and CCLF each made capital contributions of $78,096 and $12,709 in members’ equity, respectively, to Credit Fund II.
+Added: Below is certain summarized consolidated information for Credit Fund II as of December 31, 2020.
+Added: As of December 31,
+Added: Investments, at fair value (amortized cost of $245,312) $ 246,421
+Added: Cash and cash equivalents 1,385
+Added: Other assets 3,436
+Added: Total assets $ 251,242
+Added: LIABILITIES AND MEMBERS’ EQUITY
+Added: Notes payable, net of unamortized debt issuance costs of $875 $ 156,625
+Added: Other liabilities 2,675
+Added: Total liabilities 159,300
+Added: Members’ equity
+Added: Members’ contributions 90,805
+Added: Members’ distributions (1,718)
+Added: Accumulated income from operations 2,855
+Added: Total members' equity (1) 91,942
+Added: Total liabilities and members’ equity $ 251,242
+Added: (1) As of December 31, 2020, the fair value of the Company's ownership interest in the members' equity was $77,395.
+Added: For the Year Ended December 31,
+Added: Total investment income $ 3,005
+Added: Interest and credit facility expenses 766
+Added: Other expenses 498
+Added: Total expenses 1,264
+Added: Net investment income (loss) 1,741
+Added: Net change in unrealized appreciation (depreciation) on investments 1,114
+Added: Net increase (decrease) resulting from operations $ 2,855
+Added: Below is a summary of Credit Fund II’s portfolio, followed by a listing of the loans in Credit Fund II’s portfolio as of December 31, 2020:
+Added: As of December 31,
+Added: Senior secured loans (1)
+Added: Weighted average yields of senior secured loans based on amortized cost (2)
+Added: Weighted average yields of senior secured loans based on fair value (2)
+Added: Number of portfolio companies in Credit Fund II 44
+Added: Average amount per portfolio company (1)
+Added: Percentage of portfolio at floating interest rates (3) (4)
+Added: Percentage of portfolio at fixed interest rates (4)
+Added: Fair value of loans with PIK provisions $ 8,856
+Added: Percentage of portfolio with PIK provisions (4)
+Added: (1) At par/principal amount.
+Added: (2) Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of December 31, 2020.
+Added: Weighted average yield on debt and income producing securities at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at fair value included in such securities.
+Added: Weighted average yield on debt and income producing securities at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at amortized cost included in such securities.
+Added: Actual yields earned over the life of each investment could differ materially from the yields presented above.
+Added: (3) Floating rate debt investments are generally subject to interest rate floors.
+Added: (4) Percentages based on fair value.
+Added: Consolidated Schedule of Investments as of December 31, 2020
+Added: Investments (1)
+Added: Reference Rate & Spread (2)
+Added: Interest Rate (2)
+Added: Maturity Date
+Added: Par/ Principal Amount
+Added: Amortized Cost (4)
+Added: Fair Value (5)
+Added: First Lien Debt (90.10%) of fair value)
+Added: ^ (2)(3) Containers, Packaging & Glass L + 5.25% 6.25% 12/19/2025 $ 1,500 $ 1,481 $ 1,501
+Added: Alpine SG, LLC ^ (2)(3) High Tech Industries L + 5.75% 6.75% 11/16/2022 4,411 4,390 4,378
+Added: American Physician Partners, LLC ^ (2)(3) Healthcare & Pharmaceuticals L + 6.75% 7.75% 12/21/2021 8,725 8,679 8,265
+Added: AMS Group HoldCo, LLC ^ (2)(3) Transportation:
+Added: Cargo L + 6.50% 7.50% 9/29/2023 8,182 8,096 8,079
+Added: ^ (2)(3) Software L + 7.25% 8.25% 1/10/2025 5,357 5,278 5,437
+Added: Aurora Lux FinCo S.Á.R.L.
+Added: (Luxembourg) ^ (2)(3) Software L + 5.75% 6.75% 12/24/2026 4,400 4,303 4,018
+Added: Avenu Holdings, LLC ^ (2)(3) Sovereign & Public Finance L + 5.25% 6.25% 9/28/2024 997 987 997
+Added: BMS Holdings III Corp.
+Added: ^ (2)(3) Construction & Building L + 5.25% 6.25% 9/30/2026 3,308 3,239 3,270
+Added: Captive Resources Midco, LLC ^ (2)(3) Banking, Finance, Insurance & Real Estate L + 5.75% 6.75% 5/31/2025 8,406 8,297 8,463
+Added: Chartis Holding, LLC ^ (2)(3) Business Services L + 5.50% 6.50% 5/1/2025 1,496 1,474 1,497
+Added: Comar Holding Company, LLC ^ (2)(3) Containers, Packaging & Glass L + 5.50% 6.50% 6/18/2024 8,799 8,692 8,832
+Added: Cority Software Inc.
+Added: (Canada) ^ (2)(3) Software L + 5.25% 6.25% 7/2/2026 8,800 8,655 8,862
+Added: Ensono, LP ^ (2)(3) Telecommunications L + 5.25% 5.40% 6/27/2025 6,292 6,246 6,245
+Added: Ethos Veterinary Health LLC ^ (2)(3) Consumer Services L + 4.75% 4.90% 5/15/2026 8,182 8,117 8,070
+Added: EvolveIP, LLC ^ (2)(3) Telecommunications L + 5.75% 6.75% 6/7/2023 8,799 8,784 8,790
+Added: Innovative Business Services, LLC ^ (2)(3) High Tech Industries L + 5.50% 6.50% 4/5/2023 2,200 2,162 2,159
+Added: K2 Insurance Services, LLC ^ (2)(3) Banking, Finance, Insurance & Real Estate L + 5.00% 6.00% 7/1/2024 6,927 6,827 6,928
+Added: ^ (2)(3) High Tech Industries L + 4.00%, 3.00% PIK 8.00% 5/2/2025 8,822 8,688 8,856
+Added: Mailgun Technologies, Inc.
+Added: ^ (2)(3) High Tech Industries L + 5.00% 6.00% 3/26/2025 8,478 8,347 8,330
+Added: National Technical Systems, Inc.
+Added: ^ (2)(3) Aerospace & Defense L + 5.50% 6.50% 6/12/2023 8,800 8,778 8,733
+Added: NMI AcquisitionCo, Inc.
+Added: ^ (2)(3) High Tech Industries L + 5.00% 6.00% 9/6/2022 8,799 8,732 8,711
+Added: Paramit Corporation ^ (2)(3) Capital Equipment L + 4.50% 5.50% 5/3/2025 1,000 992 980
+Added: PPC Flexible Packaging, LLC ^ (2)(3) Containers, Packaging & Glass L + 6.00% 7.00% 11/23/2024 4,400 4,358 4,386
+Added: Redwood Services Group, LLC ^ (2)(3) High Tech Industries L + 6.00% 7.00% 6/6/2023 3,300 3,279 3,291
+Added: Reladyne, Inc.
+Added: ^ (2)(3) Wholesale L + 5.00% 6.00% 7/22/2022 6,484 6,431 6,514
+Added: Riveron Acquisition Holdings, Inc.
+Added: ^ (2)(3) Banking, Finance, Insurance & Real Estate L + 5.75% 6.75% 5/22/2025 8,257 8,131 8,312
+Added: RSC Acquisition, Inc.
+Added: ^ (2)(3) Banking, Finance, Insurance & Real Estate L + 5.50% 6.50% 11/1/2026 8,487 8,341 8,572
+Added: Smile Doctors, LLC ^ (2)(3) Healthcare & Pharmaceuticals L + 6.00% 7.00% 10/6/2022 6,509 6,507 6,379
+Added: Sovos Brands Intermediate, Inc.
+Added: ^ (2)(3) Beverage, Food & Tobacco L + 4.75% 4.96% 11/20/2025 2,200 2,182 2,181
+Added: Superior Health Linens, LLC ^ (2)(3) Business Services L + 6.50% 7.50% 9/30/2021 7,199 7,178 7,162
+Added: T2 Systems, Inc.
+Added: ^ (2)(3) Transportation:
+Added: Consumer L + 6.75% 7.75% 9/28/2022 8,799 8,713 8,799
+Added: TCFI Aevex LLC ^ (2)(3) Aerospace & Defense L + 6.00% 7.00% 3/18/2026 1,718 1,688 1,712
+Added: TSB Purchaser, Inc.
+Added: ^ (2)(3) Media:
+Added: Advertising, Printing & Publishing L + 6.00% 7.00% 5/14/2024 8,799 8,663 8,729
+Added: Turbo Buyer, Inc.
+Added: ^ (2)(3) Automotive L + 5.25% 6.25% 12/2/2025 8,174 8,001 8,249
+Added: Consolidated Schedule of Investments as of December 31, 2020
+Added: Investments (1)
+Added: Reference Rate & Spread (2)
+Added: Interest Rate (2)
+Added: Maturity Date
+Added: Par/ Principal Amount
+Added: Amortized Cost (4)
+Added: Fair Value (5)
+Added: US INFRA SVCS Buyer, LLC ^ (2)(3) Environmental Industries L + 6.00% 7.00% 4/13/2026 $ 3,300 $ 3,240 $ 3,292
+Added: VRC Companies, LLC ^ (2)(3) Business Services L + 6.50% 7.50% 3/31/2023 4,311 4,271 4,311
+Added: Zemax Software Holdings, LLC ^ (2)(3) Software L + 5.75% 6.75% 6/25/2024 4,400 4,363 4,294
+Added: Zenith Merger Sub, Inc.
+Added: ^ (2)(3) Business Services L + 5.25% 6.25% 12/13/2023 4,399 4,370 4,367
+Added: First Lien Debt Total
+Added: $ 220,960 $ 221,951
+Added: Second Lien Debt (9.90%) of fair value
+Added: AI Convoy S.A.R.L (United Kingdom) ^ (2)(3) Aerospace & Defense L + 8.25% 9.25% 1/17/2028 $ 5,514 $ 5,401 $ 5,676
+Added: AQA Acquisition Holding, Inc.
+Added: ^ (2)(3) High Tech Industries L + 8.00% 9.00% 5/24/2024 1,000 993 1,000
+Added: Quartz Holding Company ^ (2)(3) Software L + 8.00% 8.15% 4/2/2027 4,852 4,771 4,815
+Added: Tank Holding Corp.
+Added: ^ (2)(3) Capital Equipment L + 8.25% 8.40% 3/26/2027 5,514 5,436 5,394
+Added: Ultimate Baked Goods MIDCO, LLC ^ (2)(3) Beverage, Food & Tobacco L + 8.00% 9.00% 8/9/2026 5,514 5,428 5,257
+Added: World 50, Inc.
+Added: (6) Business Services 11.50% 11.50% 1/9/2027 2,365 2,323 2,328
+Added: Second Lien Debt Total
+Added: $ 24,352 $ 24,470
+Added: Total Investments
+Added: $ 245,312 $ 246,421
+Added: ^ Denotes that all or a portion of the assets are owned by Credit Fund II Sub.
+Added: Credit Fund II Sub has entered into the Credit Fund II Sub Notes.
+Added: The lenders of the Credit Fund II Sub Notes have a first lien security interest in substantially all of the assets of Credit Fund II Sub.
+Added: Accordingly, such assets are not available to creditors of Credit Fund II.
+Added: (1) Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States.
+Added: As of December 31, 2020, the geographical composition of investments as a percentage of fair value was 3.6% in Canada, 1.6% in Luxembourg, 2.3% in the United Kingdom and 92.5% in the United States.
+Added: Certain portfolio company investments are subject to contractual restrictions on sales.
+Added: (2) Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S.
+Added: Prime Rate), which generally resets quarterly.
+Added: For each such loan, Credit Fund II has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2020.
+Added: As of December 31, 2020, the reference rates for Credit Fund II's variable rate loans were the 30-day LIBOR at 0.15%, the 90-day LIBOR at 0.25% and the 180-day LIBOR at 0.26%.
+Added: (3) Loan includes interest rate floor feature, which is generally 1.00%.
+Added: (4) Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.
+Added: (5) Fair value is determined in good faith by or under the direction of the board of managers of Credit Fund II, pursuant to Credit Fund II’s valuation policy, with the fair value of all investments determined using significant unobservable inputs, which is substantially similar to the valuation policy of the Company provided in Note 3, Fair Value Measurements, to these consolidated financial statements.
+Added: (6) Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company .
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
We generate cash from the net proceeds of offerings of our common stock and through cash flows from operations, including investment sales and repayments as well as income earned on investments and cash equivalents.
−Removed: We may also fund a portion of our investments through borrowings under the Facilities, the issuance of debt, and through securitization of a portion of our existing investments.
+Added: We may also fund a portion of our investments through borrowings under the Credit Facility, as defined below, the issuance of debt, and through securitization of a portion of our existing investments.
The primary use of existing funds and any funds raised in the future is expected to be for investments in portfolio companies, repayment of indebtedness, cash distributions to our stockholders and for other general corporate purposes.
−Removed: The SPV closed on May 24, 2013 on the SPV Credit Facility, which was subsequently amended on June 30, 2014, June 19, 2015, June 9, 2016, May 26, 2017 and August 9, 2018.
−Removed: The SPV Credit Facility provides for secured borrowings during the applicable revolving period up to an amount equal to the lesser of $275,000 (the borrowing base as calculated pursuant to the terms of the SPV Credit Facility) and the amount of net cash proceeds and unpledged capital commitments the Company has received, with an accordion feature that can, subject to certain conditions, increase the aggregate maximum credit commitment up to an amount not to exceed $750,000, subject to restrictions imposed on borrowings under the Investment Company Act and certain restrictions and conditions set forth in the SPV Credit Facility, including adequate collateral to support such borrowings.
−Removed: The SPV Credit Facility imposes financial and operating covenants on us and the SPV that restrict our and its business activities.
−Removed: Continued compliance with these covenants will depend on many factors, some of which are beyond our control.
−Removed: We closed on March 21, 2014 on the Credit Facility, which was subsequently amended on January 8, 2015, May 25, 2016, March 22, 2017, September 25, 2018 and June 14, 2019.
+Added: While aggregate economic activity continued to improve through the fourth quarter of 2020, the dispersion in performance across industries and geographies has been substantial.
+Added: The slower than anticipated global vaccination rollout, combined with uncertainties regarding new variants of the virus, will prolong the risk of continued disruption deeper into the year, and we expect that the pace and magnitude of economic recovery will be uneven.
+Added: This continued market and business disruption may impact certain aspects of our liquidity.
+Added: Depreciation in the valuations of our investments may adversely impact collateral eligibility, which would reduce the availability under the Credit Facility.
+Added: We are therefore continuously and critically monitoring our operating results, liquidity and anticipated capital requirements, and taking action to fortify our balance sheet and provide capital flexibility.
+Added: For example, in December 2020, we issued an additional $75.0 million aggregate principal amount of senior unsecured notes, and used the proceeds for the repayment of our secured debt, which provides enhanced balance sheet flexibility.
+Added: We believe our current cash position, available capacity under the Credit Facility – which is well in excess of our unfunded commitments – and net cash provided by operating activities will provide us with sufficient resources to
+Added: meet our obligations and continue to support our investment objectives, including reserving for the capital needs that may arise at our portfolio companies.
+Added: On May 24, 2013, the SPV closed on a senior secured credit facility (the "SPV Credit Facility"), which was subsequently amended on June 30, 2014, June 19, 2015, June 9, 2016, May 26, 2017 and August 9, 2018.
+Added: On December 11, 2020, the SPV repaid all outstanding amounts under the SPV Credit Facility and the facility was terminated.
+Added: The SPV Credit Facility provided for secured borrowings during the applicable revolving period up to $275,000, subject to restrictions imposed on borrowings under the Investment Company Act and certain restrictions and conditions set forth in the SPV Credit Facility, including adequate collateral to support such borrowings.
+Added: On March 21, 2014, we closed on a senior secured revolving credit facility (the "Credit Facility", and together with the SPV Credit Facility, the "Facilities"), which was subsequently amended on January 8, 2015, May 25, 2016, March 22, 2017, September 25, 2018, June 14, 2019 and October 28, 2020.
The maximum principal amount of the Credit Facility is $688,000, subject to availability under the Credit Facility, which is based on certain advance rates multiplied by the value of the Company’s portfolio investments (subject to certain concentration limitations) net of certain other indebtedness that the Company may incur in accordance with the terms of the Credit Facility.
2 unchanged sentences
The Credit Facility includes a $50,000 limit for swingline loans and a $20,000 limit for letters of credit.
−Removed: Subject to certain exceptions, the Credit Facility is
−Removed: secured by a first lien security interest in substantially all of the portfolio investments held by the Company.
+Added: Subject to certain exceptions, the Credit Facility is secured by a first lien security interest in substantially all of the portfolio investments held by the Company.
The Credit Facility includes customary covenants, including certain financial covenants related to asset coverage, shareholders’ equity and liquidity, certain limitations on the incurrence of additional indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for senior secured revolving credit facilities of this nature.
−Removed: Although we believe that we and the SPV will remain in compliance, there are no assurances that we or the SPV will continue to comply with the covenants in the Credit Facility and SPV Credit Facility, as applicable.
−Removed: Failure to comply with these covenants could result in a default under the Credit Facility and/or the SPV Credit Facility that, if we or the SPV were unable to obtain a waiver from the applicable lenders, could result in the immediate acceleration of the amounts due under the Credit Facility and/or the SPV Credit Facility, and thereby have a material adverse impact on our business, financial condition and results of operations.
+Added: Although we believe that we will remain in compliance, there are no assurances that we will continue to comply with the covenants in the Credit Facility.
+Added: Failure to comply with these covenants could result in a default under the Credit Facility that, if we were unable to obtain a waiver from the applicable lenders, could result in the immediate acceleration of the amounts due under the Credit Facility, and thereby have a material adverse impact on our business, financial condition and results of operations.
For more information on the SPV Credit Facility and the Credit Facility, see Note 7 to the consolidated financial statements in Part II, Item 8 of this Form 10-K.
−Removed: On December 30, 2019, the Company closed a private offering of $115.0 million in aggregate principal amount of 4.750% Senior Unsecured Notes due December 31, 2024 (the "Senior Notes").
+Added: On December 30, 2019, the Company closed a private offering of $115.0 million in aggregate principal amount of 4.750% Senior Unsecured Notes due December 31, 2024 (the "2019 Notes").
Interest is payable quarterly, beginning March 31, 2020.
−Removed: This interest rate is subject to increase (up to 5.75%) in the event that, subject to certain exceptions, the Senior Notes cease to have an investment grade rating.
−Removed: The note purchase agreement for the Senior Notes contains customary terms and conditions for senior unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of the Company’s status as a business development company within the meaning of the Investment Company Act and a regulated investment company under the Code, minimum asset coverage ratio and interest coverage ratio, and prohibitions on certain fundamental changes at the Company or any subsidiary guarantor.
−Removed: Continued compliance with these covenants will depend on many factors, some of which are beyond our control.
−Removed: In particular, the Company is obligated to offer to repay the notes at par if certain change in control events occur.
−Removed: The note purchase agreement also contains customary events of default with customary cure and notice, including, without limitation, nonpayment, breach of covenant, material breach of representation or warranty under the note purchase agreement, cross-acceleration under other indebtedness of the Company or certain significant subsidiaries, certain judgments and orders, and certain events of bankruptcy.
+Added: On December 11, 2020, the Company issued an additional $75.0 million aggregate principal amount of senior unsecured notes due December 31, 2024 (the "2020 Notes", together with the 2019 Notes, the "Senior Notes").
+Added: The 2020 Notes bear interest at an interest rate of 4.500%.
+Added: The interest rates of the Senior Notes are subject to increase (up to an additional 1.00% over the stated rate of such notes) in the event that, subject to certain exceptions, the Senior Notes cease to have an investment grade rating.
The Senior Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.
18 unchanged sentences
December 31, 2020
+Added: Facility Borrowings
+Added: Outstanding Unused
Amounts Available (2)
−Removed: SPV Credit Facility
Credit Facility $ 688,000 $ 347,949 $ 340,051 $ 207,365
+Added: Total $ 688,000 $ 347,949 $ 340,051 $ 207,365
December 31, 2019
+Added: Facility Borrowings
+Added: Outstanding Unused
Amounts Available (2)
1 unchanged sentence
Credit Facility 688,000 384,074 303,926 264,198
+Added: Total $ 963,000 $ 616,543 $ 346,457 $ 268,423
(1) The unused portion is the amount upon which commitment fees are based.
(2) Available for borrowing based on the computation of collateral to support the borrowings and subject to compliance with applicable covenants and financial ratios.
−Removed: As the Senior Notes were issued on December 30, 2019, their fair value approximates carrying value as of December 31, 2019 .
+Added: The following were the carrying values (before debt issuance costs) and fair values for the Senior Notes disclosed but not carried at fair value as of December 31, 2020 and 2019:
+Added: December 31, 2020 December 31, 2019
+Added: Carrying Value Fair Value Carrying Value Fair Value
+Added: 2019 Notes $ 115,000 $ 116,250 $ 115,000 $ 115,000
+Added: 2020 Notes 75,000 75,000 — —
+Added: Total $ 190,000 $ 191,250 $ 115,000 $ 115,000
The following were the carrying values (before debt issuance costs) and fair values of the Company's 2015-1R Notes disclosed but not carried at fair value as of December 31, 2020 and 2019:
−Removed: December 31, 2019
−Removed: December 31, 2018
−Removed: 2015-1R Notes
−Removed: Carrying Value
−Removed: Carrying Value
+Added: December 31, 2020 December 31, 2019
+Added: 2015-1R Notes Carrying Value Fair Value Carrying Value Fair Value
Aaa/AAA Class A-1-1-R Notes $ 234,800 $ 230,996 $ 234,800 $ 233,053
4 unchanged sentences
BBB- Class C Notes 27,000 24,592 27,000 27,000
+Added: Total $ 449,200 $ 440,436 $ 449,200 $ 447,524
As of December 31, 2020 and 2019, we had a combined $987,149 and $1,180,743, respectively, of outstanding consolidated indebtedness under our Facilities, the 2015-1R Notes and the Senior Notes.
2 unchanged sentences
Equity Activity
−Removed: On June 9, 2017, in connection with the NFIC Acquisition, the Company issued 434,233 shares of common stock valued at approximately $8,046.
−Removed: See Note 14 to the consolidated financial statements in Part II, Item 8 of this Form 10-K for additional information regarding the NFIC Acquisition.
−Removed: On June 19, 2017, we closed our IPO, issuing 9,454,200 shares of our common stock (including shares issued pursuant to the exercise of the underwriters’ over-allotment option on July 5, 2017) at a public offering price of $18.50 per
−Removed: Net of underwriting costs, we received cash proceeds of $169,488.
−Removed: Shares of common stock of TCG BDC began trading on the Nasdaq Global Select Market under the symbol “CGBD” on June 14, 2017.
−Removed: Upon the completion of the IPO, uncalled capital commitments payable to the Company by the Company’s pre-IPO investors were automatically reduced to zero.
−Removed: Shares issued and outstanding as of December 31, 2019 and 2018 were 57,763,811 and 62,230,251 , respectively.
+Added: Common stock issued and outstanding as of December 31, 2020 and 2019 was 55,320,309 and 57,763,811, respectively.
The following table summarizes activity in the number of shares of our common stock outstanding during the years ended December 31, 2020, 2019 and 2018:
For the years ended December 31,
−Removed: Shares outstanding, beginning of year
−Removed: Common stock issued
−Removed: Reinvestment of dividends
+Added: 2020 2019 2018
+Added: Common stock outstanding, beginning of year 57,763,811 62,230,251 62,207,603
+Added: Reinvestment of dividends on common stock — — 361,056
Repurchase of common stock (2,443,502) (4,466,440) (338,408)
−Removed: Shares outstanding, end of year
+Added: Common stock outstanding, end of year 55,320,309 57,763,811 62,230,251
+Added: On May 5, 2020, we issued and sold 2,000,000 shares of Preferred Stock to an affiliate of Carlyle in a private placement at a price of $25 per share.
+Added: Shares of Preferred Stock issued and outstanding as of December 31, 2020 and 2019 were 2,000,000 and 0, respectively.
Contractual Obligations
4 unchanged sentences
1-3 Years — —
+Added: 3-5 Years (1)
+Added: 537,949 731,543
More than 5 Years (2)
+Added: 449,200 449,200
+Added: Total $ 987,149 $ 1,180,743
(1) Includes amounts outstanding under the Facilities and the Senior Notes.
14 unchanged sentences
As of December 31, 2020 and 2019, we were in compliance with this undertaking.
−Removed: DIVIDENDS AND DISTRIBUTIONS TO COMMON STOCKHOLDERS
−Removed: Prior to July 5, 2017, we had an “opt in” dividend reinvestment plan.
−Removed: Effective on July 5, 2017, we converted our “opt in” dividend reinvestment plan to an “opt out” dividend reinvestment plan that provides for reinvestment of our dividends and other distributions on behalf of our stockholders, other than those stockholders who have “opted out” of the plan.
−Removed: As a result of adopting the plan, if our Board of Directors authorizes, and we declare, a cash dividend or distribution, our stockholders who have not elected to “opt out” of our dividend reinvestment plan will have their cash dividends or distributions automatically reinvested in additional shares of our common stock, rather than receiving cash.
−Removed: Each registered stockholder may elect to have such stockholder’s dividends and distributions distributed in cash rather than participate in the plan.
−Removed: For any registered stockholder that does not so elect, distributions on such stockholder’s shares will be reinvested by State Street Bank and Trust Company, our plan administrator, in additional shares.
−Removed: The number of shares to be issued to the stockholder will be determined based on the total dollar amount of the cash distribution payable, net of applicable withholding taxes.
−Removed: We intend to use primarily newly issued shares to implement the plan so long as the market value per share is equal to or greater than the net asset value per share on the relevant valuation date.
−Removed: If the market value per share is less than the net asset value per share on the relevant valuation date, the plan administrator would implement the plan through the purchase of common stock on behalf of participants in the open market, unless we instruct the plan administrator otherwise.
−Removed: The following table summarizes the Company’s dividends declared during the three most recent fiscal years:
−Removed: Date Declared
−Removed: Per Share Amount
−Removed: March 20, 2017
−Removed: March 20, 2017
−Removed: April 24, 2017
−Removed: June 20, 2017
−Removed: June 30, 2017
−Removed: July 18, 2017
−Removed: August 7, 2017
−Removed: September 29, 2017
−Removed: October 18, 2017
−Removed: November 7, 2017
−Removed: December 29, 2017
−Removed: January 17, 2018
−Removed: December 13, 2017
−Removed: December 29, 2017
−Removed: January 17, 2018
−Removed: February 26, 2018
−Removed: March 29, 2018
−Removed: April 17, 2018
−Removed: June 29, 2018
−Removed: July 17, 2018
−Removed: August 6, 2018
−Removed: September 28, 2018
−Removed: October 17, 2018
−Removed: November 5, 2018
−Removed: December 28, 2018
−Removed: January 17, 2019
−Removed: December 12, 2018
−Removed: December 28, 2018
−Removed: January 17, 2019
−Removed: February 22, 2019
−Removed: March 29, 2019
−Removed: April 17, 2019
−Removed: June 28, 2019
−Removed: July 17, 2019
−Removed: June 17, 2019
−Removed: June 28, 2019
−Removed: July 17, 2019
−Removed: August 5, 2019
−Removed: September 30, 2019
−Removed: October 17, 2019
−Removed: November 4, 2019
−Removed: December 31, 2019
−Removed: January 17, 2020
−Removed: December 12, 2019
−Removed: December 31, 2019
−Removed: January 17, 2020
−Removed: Represents a special dividend.
+Added: DIVIDENDS AND DISTRIBUTIONS
+Added: Prior to July 5, 2017, we had an “opt in” dividend reinvestment plan in respect of our common stock.
+Added: Effective on July 5, 2017, we converted our “opt in” dividend reinvestment plan to an “opt out” dividend reinvestment plan that provides for reinvestment of our dividends and other distributions on behalf of our common stockholders, other than those common stockholders who have “opted out” of the plan.
+Added: As a result of adopting the plan, if our Board of Directors authorizes, and we declare, a cash dividend or distribution, our common stockholders who have not elected to “opt out” of our dividend reinvestment plan will have their cash dividends or distributions automatically reinvested in additional shares of our common stock, rather than receiving cash.
+Added: Each registered common stockholder may elect to have such common stockholder’s dividends and distributions distributed in cash rather than participate in the plan.
+Added: For any registered common stockholder that does not so elect, distributions on such common stockholder’s shares will be reinvested by State Street Bank and Trust Company, our plan administrator, in additional shares of common stock.
+Added: The number of common shares to be issued to the common stockholder will be determined based on the total dollar amount of the cash distribution payable, net of applicable withholding taxes.
+Added: intend to use primarily newly issued common shares to implement the plan so long as the market value per common share is equal to or greater than the net asset value per share of common stock on the relevant valuation date.
+Added: If the market value per share is less than the net asset value per share of common stock on the relevant valuation date, the plan administrator would implement the plan through the purchase of common stock on behalf of participants in the open market, unless we instruct the plan administrator otherwise.
+Added: The following table summarizes the Company’s dividends declared per share of common stock during the three most recent fiscal years:
+Added: Date Declared Record Date Payment Date Per Share Amount
+Added: February 26, 2018 March 29, 2018 April 17, 2018 $ 0.37
+Added: May 2, 2018 June 29, 2018 July 17, 2018 0.37
+Added: August 6, 2018 September 28, 2018 October 17, 2018 0.37
+Added: November 5, 2018 December 28, 2018 January 17, 2019 0.37
+Added: December 12, 2018 December 28, 2018 January 17, 2019 0.20 (1)
+Added: February 22, 2019 March 29, 2019 April 17, 2019 $ 0.37
+Added: May 6, 2019 June 28, 2019 July 17, 2019 0.37
+Added: June 17, 2019 June 28, 2019 July 17, 2019 0.08 (1)
+Added: August 5, 2019 September 30, 2019 October 17, 2019 0.37
+Added: November 4, 2019 December 31, 2019 January 17, 2020 0.37
+Added: December 12, 2019 December 31, 2019 January 17, 2020 0.18 (1)
+Added: February 24, 2020 March 31, 2020 April 17, 2020 $ 0.37
+Added: May 4, 2020 June 30, 2020 July 17, 2020 0.37
+Added: August 3, 2020 September 30, 2020 October 16, 2020 0.32 (2)
+Added: August 3, 2020 September 30, 2020 October 16, 2020 0.05 (1)
+Added: November 2, 2020 December 31, 2020 January 15, 2021 0.32
+Added: November 2, 2020 December 31, 2020 January 15, 2021 0.04 (1)
+Added: (1) Represents a special/supplemental dividend.
+Added: (2) The Company updated its dividend policy such that the regular dividend is $0.32 per share of common stock, effective with the third quarter 2020 dividend.
+Added: The Preferred Stock has a Liquidation Preference plus any accumulated but unpaid dividends up to but excluding the date of distribution.
+Added: Dividends are payable on a quarterly basis in an initial amount equal to 7.00% per annum of the Liquidation Preference per share, payable in cash, or at the Company’s option, 9.00% per annum of the Liquidation Preference payable in additional shares of Preferred Stock.
+Added: The following table summarizes the Company’s dividends declared on its Preferred Stock during 2020.
+Added: Unless otherwise noted, dividends were declared and paid, or are payable, in cash.
+Added: Date Declared Record Date Payment Date Per Share Amount
+Added: June 30, 2020 June 30, 2020 September 30, 2020 $ 0.277
+Added: September 30, 2020 September 30, 2020 September 30, 2020 0.423
+Added: December 31, 2020 December 31, 2020 December 31, 2020 0.438
+Added: Total $ 1.138
ASSET COVERAGE
8 unchanged sentences
As a result, the minimum asset coverage ratio applicable to the Company was reduced from 200% to 150%, effective as of June 7, 2018.
−Removed: As of December 31, 2019 and 2018 , the Company had total senior securities of $1,180,743 and $963,835 , respectively, consisting of secured borrowings under the Facilities, the Senior Notes and the 2015-1R Notes, and had asset coverage ratios of 181.01% and 210.31% , respectively.
+Added: On April 8, 2020, the SEC issued an order (Release No.
+Added: 33837) providing temporary, conditional exemptive relief from certain Investment Company Act provisions for BDCs, including relief permitting BDCs to issue additional senior securities to meet liquidity needs subject to compliance with a reduced asset coverage ratio.
+Added: The relief is subject to investor protection conditions, including specific requirements for obtaining an independent evaluation of the terms of the senior securities, limits on new investments and approval by a majority of a BDC’s independent board members as well as public disclosure in the case of the issuance of senior securities pursuant to the reduced asset coverage ratio.
+Added: These exemptions are in effect through the earlier of December 31, 2020 or the date by which a BDC ceases to rely on the order.
+Added: The Company did not utilize this relief.
+Added: As of December 31, 2020 and 2019, the Company had total senior securities of $1,037,149 and $1,180,743, respectively, consisting of secured borrowings under the Facilities, the Senior Notes, the 2015-1R Notes and the Preferred Stock, and had asset coverage ratios of 182.09% and 181.01%, respectively.
For a discussion of the principal risk factors associated with these senior securities, see Part I, Item 1A of this Form 10‑K.
+Added: For purposes of the asset coverage ratio, the Preferred Stock is classified as a senior security.
CRITICAL ACCOUNTING POLICIES
17 unchanged sentences
(ii) preliminary valuation conclusions are documented and reviewed by a valuation committee comprised of members of senior management;
−Removed: (iii) the Board of Directors engages a third-party valuation firm to provide positive assurance
−Removed: on portions of the Middle Market Senior Loans and equity investments portfolio each quarter (such that each non-traded investment other than Credit Fund is reviewed by a third-party valuation firm at least once on a rolling twelve month basis) including a review of management’s preliminary valuation and conclusion on fair value;
+Added: (iii) the Board of Directors engages a third-party valuation firm to provide positive assurance on portions of the Middle Market Senior Loans and equity investments portfolio each quarter (such that each non-traded investment other than Credit Fund and Credit Fund II is reviewed by a third-party valuation firm at least once on a rolling twelve month basis) including a review of management’s preliminary valuation and conclusion on fair value;
(iv) the Audit Committee of the Board of Directors (the “Audit Committee”) reviews the assessments of the Investment Adviser and the third-party valuation firm and provides the Board of Directors with any recommendations with respect to changes to the fair value of each investment in the portfolio;
32 unchanged sentences
At time of exit, the realized gain or loss on an investment is the difference between the amortized cost at time of exit and the cash received at exit using the specific identification method.
−Removed: The Company may have loans in its portfolio that contain payment-in-kind (“PIK”) provisions.
+Added: The Company may have loans in its portfolio that contain PIK provisions.
PIK represents interest that is accrued and recorded as interest income at the contractual rates, increases the loan principal on the respective capitalization dates, and is generally due at maturity.
1 unchanged sentence
Dividend Income
−Removed: Dividend income from the investment fund is recorded on the record date for the investment fund to the extent that such amounts are payable by the investment fund and are expected to be collected.
+Added: Dividend income from each investment fund is recorded on the record date for the investment fund to the extent that such amounts are payable by the investment fund and are expected to be collected.
Other income may include income such as consent, waiver, amendment, unused, syndication and prepayment fees associated with the Company’s investment activities as well as any fees for managerial assistance services rendered by the Company to the portfolio companies.
7 unchanged sentences
Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability.
−Removed: Non-accrual loans are restored to accrual status when past due principal and interest are paid current and, in management’s judgment, are likely to remain current.
+Added: Non-accrual loans are restored to accrual status when past due principal and interest are paid current and, in management’s judgment, are likely to remain
Management may not place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection.
3 unchanged sentences
The minimum distribution requirements applicable to RICs require the Company to distribute to its stockholders at least 90% of its investment company taxable income (“ICTI”), as defined by the Code, each year.
−Removed: Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of current year distributions into the next
+Added: Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of current year distributions into the next tax year.
Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.
1 unchanged sentence
For this purpose, however, any ordinary income or capital gain net income retained by the Company that is subject to corporate income tax is considered to have been distributed.
−Removed: The Company intends to make sufficient distributions each taxable year to satisfy the excise distribution requirements.
The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more-likely than not” to be sustained by the applicable tax authority.
9 unchanged sentences
On April 3, 2013, the Company’s Board of Directors, including a majority of the directors who are not “interested persons” as defined in Section 2(a)(19) of the Investment Company Act (the “Independent Directors”), approved an investment advisory agreement (the “Original Investment Advisory Agreement”) between the Company and the Investment Adviser in accordance with, and on the basis of an evaluation satisfactory to such directors as required by, Section 15(c) of the Investment Company Act.
−Removed: The Original Investment Advisory Agreement was amended on September 15, 2017 (as amended, the “First Amended and Restated Investment Advisory Agreement”) after the approval of the Company’s Board of Directors, including a majority of the Independent Directors, at an in-person meeting of the Board of Directors held on May 30, 2017 and the approval of the Company’s stockholders at a special meeting of stockholders held on September 15, 2017.
−Removed: The First Amended and Restated Investment Advisory Agreement amended the Original Investment Advisory Agreement to, among other things, (i) reduce the incentive fee payable by the Company to the Investment Adviser from an annual rate of 20% to an annual rate of 17.5%, (ii) delete the incentive fee payment deferral test described below, and (iii) include in the pre-incentive fee net investment income, in the case of investments with a deferred interest feature, accrued income that the Company has not yet received in cash.
−Removed: On August 6, 2018, the First Amended and Restated Investment Advisory Agreement was further amended (as amended, the “Investment Advisory Agreement”) after the approval of the Company’s Board of Directors, including a majority of the Independent Directors, at an in-person meeting of the Board of Directors held on August 6, 2018.
−Removed: The Investment Advisory Agreement amended the First Amended and Restated Investment Advisory Agreement to incorporate a one-third (0.50%) reduction in the 1.50% annual base management fee rate charged by the Investment Adviser on assets financed using leverage in excess of 1.0x debt to equity, effective July 1, 2018.
−Removed: The initial term of the Investment Advisory Agreement is two years from September 15, 2017 and, unless terminated earlier, the Investment Advisory Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by the vote of the Board of Directors and by the vote of a majority of the Independent Directors.
+Added: The Original Investment Advisory Agreement was amended on September 15, 2017 (as amended, the “First Amended and Restated Investment Advisory Agreement”) after the approval of the Company’s Board of Directors, including a majority of the Independent Directors, at an in-person meeting of the Board of Directors held on May 30, 2017 and the approval of the Company’s stockholders at a special meeting of stockholders held on September 15, 2017 and August 6, 2018 (as amended, the “Investment Advisory Agreement”).
+Added: Unless terminated earlier, the Investment Advisory Agreement renews automatically for successive annual periods, provided that such continuance is specifically approved at least annually by the vote of the Board of Directors and by the vote of a majority of the Independent Directors.
+Added: On May 29, 2020, the Company's Board of Directors, including a majority of the Independent Directors, approved the continuance of the Company's Investment Advisory Agreement with the Adviser for an additional one-year term.
The Investment Advisory Agreement will automatically terminate in the event of an assignment and may be terminated by either party without penalty upon at least 60 days’ written notice to the other party.
−Removed: Subject to the overall supervision of the Board of Directors, the Investment Adviser provides investment advisory services to the Company.
−Removed: providing these services, the Investment Adviser receives fees from the Company consisting of two components—a base management fee and an incentive fee.
−Removed: Effective September 15, 2017, the base management fee has been calculated and payable quarterly in arrears at an annual rate of 1.50% of the average value of the gross assets at the end of the two most recently completed fiscal quarters;
+Added: Subject to the overall supervision of the Board of Directors, the Investment Adviser provides investment advisory services to
+Added: For providing these services, the Investment Adviser receives fees from the Company consisting of two components—a base management fee and an incentive fee.
+Added: The base management fee has been calculated and payable quarterly in arrears at an annual rate of 1.50% of the average value of the gross assets at the end of the two most recently completed fiscal quarters;
provided, however, effective July 1, 2018, the base management fee has been calculated at an annual rate of 1.00% of the average value of the gross assets as of the end of the two most recently completed calendar quarters that exceeds the product of (A) 200% and (B) the average value of the Company’s net asset value at the end of the two most recently completed calendar quarters.
The base management fee will be appropriately adjusted for any share issuances or repurchases during such fiscal quarter and the base management fees for any partial month or quarter will be pro-rated.
−Removed: The Company’s gross assets exclude any cash and cash equivalents and include assets acquired through the incurrence of debt from use of the SPV Credit Facility, Credit Facility, 2015-1R Notes and 2015-1 Notes (see Note 6, Borrowings, and Note 7, Notes Payable, to the consolidated financial statements in Part II, Item 8 of this Form 10-K).
+Added: The Company’s gross assets exclude any cash and cash equivalents and include assets acquired through the incurrence of debt (see Note 7, Borrowings, and Note 8, Notes Payable, to the consolidated financial statements in Part II, Item 8 of this Form 10-K).
For purposes of this calculation, cash and cash equivalents include any temporary investments in cash-equivalents, U.S.
government securities and other high quality investment grade debt investments that mature in 12 months or less from the date of investment.
−Removed: Prior to September 15, 2017, under the Original Investment Advisory Agreement, the base management fee was calculated and payable quarterly in arrears at an annual rate of 1.50% of the average daily gross assets of the Company for the period adjusted for share issuances or repurchases.
−Removed: Prior to the IPO, the Investment Adviser waived its right to receive one-third (0.50%) of the 1.50% base management fee.
−Removed: Any waived base management fees are not subject to recoupment by the Investment Adviser.
−Removed: The fee waiver terminated when the IPO had been consummated.
−Removed: As previously disclosed, in connection with the IPO, the Investment Adviser agreed to continue the fee waiver until the completion of the first full quarter after the consummation of the IPO.
−Removed: As a result, beginning October 1, 2017, the base management fee has been calculated at an annual rate of 1.50% of the Company’s gross assets;
−Removed: provided, however, effective July 1, 2018, the base management fee has been calculated at an annual rate of 1.00% of the average value of the gross assets as of the end of the two most recently completed calendar quarters that exceeds the product of (A) 200% and (B) the average value of the Company’s net asset value at the end of the two most recently completed calendar quarters.
The incentive fee has two parts.
4 unchanged sentences
Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.
−Removed: Effective September 15, 2017, pre-incentive fee net investment income, expressed as a rate of return on the value of our net assets at the end of the immediately preceding calendar quarter, has been compared to a “hurdle rate” of 1.50% per quarter (6% annualized) or a “catch-up rate” of 1.82% per quarter (7.28% annualized), as applicable.
+Added: Pre-incentive fee net investment income, expressed as a rate of return on the value of our net assets at the end of the immediately preceding calendar quarter, is compared to a “hurdle rate” of 1.50% per quarter (6% annualized) or a “catch-up rate” of 1.82% per quarter (7.28% annualized), as applicable.
Pursuant to the Investment Advisory Agreement, the Company pays its Investment Adviser an incentive fee with respect to its pre-incentive fee net investment income in each calendar quarter as follows:
5 unchanged sentences
The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), and equals 17.5% of realized capital gains, if any, on a cumulative basis from inception through the date of determination, computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation, less the aggregate amount of any previously paid capital gain incentive fees, provided that, the incentive fee determined at the end of the first calendar year of operations may be calculated for a period of shorter than twelve calendar months to take into account any realized capital gains computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation.
−Removed: Prior to the September 15, 2017, under the Original Investment Advisory Agreement, pre-incentive fee net investment income, which did not include, in the case of investments with a deferred interest feature, accrued income that the Company has not yet received in cash, and was expressed as a rate of return on the average daily Hurdle Calculation Value (as defined below) throughout the immediately preceding calendar quarter, was compared to a “hurdle rate” of 1.50% per quarter (6% annualized) or a “catch-up” of 1.875% per quarter (7.50% annualized), as applicable.
−Removed: “Hurdle Calculation Value” meant, on any given day, the sum of (x) the value of net assets as of the end of the calendar quarter immediately preceding such day plus (y) the aggregate amount of capital drawn from investors (or reinvested in the Company pursuant to a dividend reinvestment plan) from the beginning of the current quarter to such day minus (z) the aggregate amount of distributions (including share repurchases) made by the Company from the beginning of the current quarter to such day, but only to the extent such distributions were not declared and accounted for on the books and records in a previous quarter.
−Removed: In addition, under the Original Investment Advisory Agreement, the Company deferred payment of any incentive fee otherwise earned by the Investment Adviser if, during the most recent four full calendar quarter periods ending on or prior to the date such payment is to be made, the sum of (a) the aggregate distributions to stockholders and (b) the change in net assets (defined as gross assets less indebtedness and before taking into account any incentive fees payable during the period) is less than 6.0% of net assets (defined as gross assets less indebtedness) at the beginning of such period.
−Removed: These calculations were adjusted for any share issuances or repurchases.
−Removed: Any deferred incentive fees were carried over for payment in subsequent calculation periods.
−Removed: As previously disclosed, in connection with the IPO, the Investment Adviser agreed to charge 17.5% instead of 20% with respect to, or effectively waive 2.5% from, the entire calculation of the incentive fee beginning on the first full quarter following the consummation of the IPO until the earlier of (i) October 1, 2017 and (ii) the date that the Company’s stockholders vote on the approval of the amendment to the Original Investment Advisory Agreement.
−Removed: The Company’s stockholders voted to approve the Investment Advisory Agreement on September 15, 2017.
−Removed: On April 3, 2013, the Investment Adviser entered into a personnel agreement with Carlyle Employee Co., pursuant to which Carlyle Employee Co.
−Removed: provides the Investment Adviser with access to investment professionals.
Administration Agreement
2 unchanged sentences
Reimbursement under the Administration Agreement occurs quarterly in arrears.
−Removed: The initial term of the Administration Agreement was two years from April 3, 2013 and, unless terminated earlier, the Administration Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by a majority vote of the outstanding voting securities of the Company and (ii) the vote of a majority of the Company’s Independent Directors.
+Added: Unless terminated earlier, the Administration Agreement renews automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by a majority vote of the outstanding voting securities of the Company and (ii) the vote of a majority of the Company’s Independent Directors.
On May 29, 2020, the Company’s Board of Directors, including a majority of the Independent Directors, approved the continuance of the Administration Agreement for a one year period.
5 unchanged sentences
provides the Administrator with access to personnel.
−Removed: On April 3, 2013, the Administrator entered into a sub-administration agreement with State Street Bank and Trust Company (“State Street” and, such agreement, the “State Street Sub-Administration Agreement” and, together with the Carlyle Sub-Administration Agreement, the “Sub-Administration Agreements”).
−Removed: On March 11, 2015, the Company’s Board of Directors, including a majority of the Independent Directors, approved an amendment to the State Street Sub-Administration Agreement.
−Removed: The initial term of the State Street Sub-Administration Agreement ends on April 1, 2017 and, unless terminated earlier, the State Street Sub-Administration Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by the vote of a majority of the outstanding voting securities of the Company and (ii) the vote of a majority of the Company’s Independent Directors.
+Added: On April 3, 2013, the Administrator entered into a sub-administration agreement with State Street Bank and Trust Company (“State Street”), which was amended on March 11, 2015 (as amended, the “State Street Sub-Administration Agreement” and, together with the Carlyle Sub-Administration Agreement, the “Sub-Administration Agreements”).
+Added: Unless terminated earlier, the State Street Sub-Administration Agreement renews automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by the vote of a majority of the outstanding voting securities of the Company and (ii) the vote of a majority of the Company’s Independent Directors.
On May 29, 2020, the Company’s Board of Directors, including a majority of the Independent Directors, approved the continuance of the State Street Sub-Administration Agreement for a one year period.
The State Street Sub-Administration Agreement may be terminated upon at least 60 days’ written notice and without penalty by the vote of a majority of the outstanding securities of the Company, or by the vote of the Board of Directors or by either party to the State Street Sub-Administration Agreement.
+Added: License Agreement
+Added: The Company has entered into a royalty free license agreement with Carlyle Investment Management L.L.C.
+Added: ("CIM"), which wholly owns our Adviser and is a wholly owned subsidiary of Carlyle, pursuant to which CIM has granted the Company a non-exclusive, revocable and non-transferable license to use the name and mark “Carlyle.”
Board of Directors
−Removed: The Company’s Board of Directors currently consists of five members, three of whom are Independent Directors.
−Removed: On April 3, 2013, the Board of Directors established an Audit Committee consisting of its Independent Directors.
−Removed: The Board of Directors also established a Pricing Committee of the Board of Directors, a Nominating and Governance Committee of the Board of Directors and a Compensation Committee of the Board of Directors, and may establish additional committees in the future.
+Added: The Company’s Board of Directors currently consists of six members, four of whom are Independent Directors.
+Added: The Board of Directors has established an Audit Committee, a Nominating and Governance Committee of the Board of Directors and a Compensation Committee, and may establish additional committees in the future.
+Added: Transactions with Investment Funds
+Added: During the years ended December 31, 2020, 2019 and 2018, the Company sold 4, 2 and 4 investments, respectively, to Credit Fund for proceeds of $62,754, $34,728 and $85,002, respectively, and realized gains (losses) of $(2,289), $208 and $0, respectively.
+Added: See Note 5, Middle Market Credit Fund, LLC, to the consolidated financial statements in Part II, Item 8 of this Form 10-K.
+Added: On November 3, 2020, pursuant to a contribution agreement by and between the Company and Credit Fund II, the Company contributed 45 senior secured debt investments with an aggregate principal balance of approximately $250 million to
+Added: Credit Fund II in exchange for approximately 84.13% of Credit Fund II's membership interests and gross cash proceeds of approximately $170 million.
+Added: There were no subsequent transfers through December 31, 2020.
+Added: See Note 6, Middle Market Credit Fund II, LLC, to the consolidated financial statements in Part II, Item 8 of this Form 10-K for further information about Credit Fund II.
+Added: Transactions with Carlyle
+Added: On May 5, 2020, the Company issued and sold 2,000,000 shares of the Preferred Stock to an affiliate of Carlyle in a private placement at a price of $25 per share.
+Added: See Note 10, Net Assets, to the consolidated financial statements in Part II, Item 8 of this Form 10-K for further information about the Preferred Stock.
+Added: In December 2020, the Company paid an affiliate of Carlyle a fee of $562 for underwriting services rendered in connection with the issuance of the 2020 Notes in the amount of 0.75% of the aggregate principal amount of the 2020 Notes.
+Added: See Note 8, Notes Payable, to the consolidated financial statements in Part II, Item 8 of this Form 10-K for further information about the 2020 Notes.
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.