Carlyle Secured Lending, Inc. 10-K

Item 8. Financial Statements and Supplementary Data TCG BDC, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm 93 Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting 95 Consolidated Statements of Assets and Liabilities as of December 31, 2020 and 2019 96 Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018 97 Consolidated Statements of Changes in Net Assets for the years ended December 31, 2020, 2019 and 2018 98 Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018 99 Consolidated Schedules of Investments as of December 31, 2020 and 2019 114 Notes to Consolidated Financial Statements 125 92 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of TCG BDC, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated statements of assets and liabilities of TCG BDC, Inc. (the “Company”), including the consolidated schedules of investments, as of December 31, 2020 and 2019, the related consolidated statements of operations, changes in net assets, and cash flows for each of the three years in the period ended December 31, 2020, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations, changes in its net assets, and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 23, 2021 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of investments owned as of December 31, 2020 and 2019, by correspondence with the custodian, directly with counterparties and management of the portfolio companies, debt agents and brokers, as applicable, or by other appropriate auditing procedures where replies were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates. 93 Table of Contents Valuation of investments using significant unobservable inputs Description of the Matter At December 31, 2020, the fair value of the Company's investments categorized in Level III of the fair value hierarchy (Level III investments) totaled $1.748 billion. As discussed in Note 3 to the consolidated financial statements (Note 3), management determined the fair value of the Company’s Level III investments by using valuation techniques such as comparable public market valuations, comparable precedent transaction valuations and/or discounted cash flow analyses and using inputs which were significant to the valuation of these investments, such as observable market inputs, updated credit statistics, and significant unobservable inputs (significant inputs). The significant unobservable inputs used to determine fair value required significant management judgment or estimation and, as disclosed in Note 3, included discount rates, comparable multiples, recovery rates, default rates, and indicative quotes. Auditing the fair value of the Company's Level III investments was complex and judgmental due to the valuation techniques and significant unobservable inputs used by the Company to determine fair value. How We Addressed the Matter in our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company's investment valuation process. This included controls over management’s assessment of the valuation techniques and significant inputs used by management to determine the fair value measurements. To test the valuation of the Company’s Level III investments, our audit procedures included, among others, evaluating the valuation techniques and significant inputs used by the Company. For each Level III investment, we gained an understanding of the valuation technique(s) and significant inputs used to value the investment and reviewed the information considered by the Board of Directors relating to the valuation. Our procedures also included testing, for a sample of Level III investments, significant inputs and the mathematical accuracy of the Company's valuation models. For example, we compared market spreads, market value (EBITDA) multiples of publicly traded comparable companies, available precedent sales transactions of comparable companies, default rates and recovery rates to information available from third-party market research providers. We also compared certain of the significant inputs to underlying sources like public and private credit ratings and the most recently available portfolio company financial statements and compliance certificates provided by management. To evaluate the reasonableness of the unobservable inputs, we assessed whether these inputs were developed in a manner consistent with the Company’s valuation policies and in some instances, with the assistance of our valuation specialists, we independently developed fair value estimates using portfolio company and market information and compared them to the Company's estimates. We searched for and evaluated information that corroborated or contradicted the Company's significant inputs. We also evaluated subsequent events and transactions and considered whether they corroborated or contradicted the Company's year-end valuations. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2012. New York, NY February 23, 2021 94 Table of Contents Report of Independent Registered Public Accounting Firm The Board of Directors and Stockholders of TCG BDC, Inc. Opinion on Internal Control over Financial Reporting We have audited TCG BDC, Inc.’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, TCG BDC, Inc. (the “Company”) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of assets and liabilities of the Company, including the consolidated schedules of investments, as of December 31, 2020 and 2019, and the related consolidated statements of operations, changes in net assets and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and our report dated February 23, 2021 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP New York, NY February 23, 2021 95 Table of Contents TCG BDC, INC. CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (dollar amounts in thousands, except per share data) December 31, 2020 December 31, 2019 ASSETS Investments, at fair value Investments—non-controlled/non-affiliated, at fair value (amortized cost of $1,574,182 and $1,960,755, respectively) $ 1,509,271 $ 1,897,057 Investments—non-controlled/affiliated, at fair value (amortized cost of $37,571 and $0, respectively) 26,180 — Investments—controlled/affiliated, at fair value (amortized cost of $311,213 and $240,696, respectively) 290,298 226,907 Total investments, at fair value (amortized cost of $1,922,966 and $2,201,451, respectively) 1,825,749 2,123,964 Cash and cash equivalents 68,419 36,751 Receivable for investment sold 4,313 6,162 Deferred financing costs 3,633 4,032 Interest receivable from non-controlled/non-affiliated investments 12,634 9,462 Interest receivable from non-controlled/affiliated investments 569 — Interest and dividend receivable from controlled/affiliated investments 6,480 6,845 Prepaid expenses and other assets 816 317 Total assets $ 1,922,613 $ 2,187,533 LIABILITIES Secured borrowings (Note 7) $ 347,949 $ 616,543 2015-1R Notes, net of unamortized debt issuance costs of $2,664 and $2,911, respectively (Note 8) 446,536 446,289 Senior Notes, net of unamortized debt issuance costs of $562 and $0, respectively (Note 8) 189,438 115,000 Payable for investments purchased 809 — Interest and credit facility fees payable (Notes 7 and 8) 2,439 6,764 Dividend payable (Note 10) 19,892 31,760 Base management and incentive fees payable (Note 4) 11,549 13,236 Administrative service fees payable (Note 4) 85 77 Other accrued expenses and liabilities 2,553 1,393 Total liabilities 1,021,250 1,231,062 Commitments and contingencies (Notes 9 and 12) NET ASSETS Cumulative convertible preferred stock, $0.01 par value; 2,000,000 and 0 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively 50,000 — Common stock, $0.01 par value; 198,000,000 and 200,000,000 shares authorized; 55,320,309 and 57,763,811 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively 553 578 Paid-in capital in excess of par value 1,081,436 1,109,238 Offering costs (1,633) (1,633) Total distributable earnings (loss) (228,993) (151,712) Total net assets $ 901,363 $ 956,471 NET ASSETS PER COMMON SHARE $ 15.39 $ 16.56 The accompanying notes are an integral part of these consolidated financial statements. 96 Table of Contents TCG BDC, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (dollar amounts in thousands, except per share data) For the years ended December 31, 2020 2019 2018 Investment income: From non-controlled/non-affiliated investments: Interest income $ 146,291 $ 184,529 $ 168,222 Other income 10,974 7,329 9,134 Total investment income from non-controlled/non-affiliated investments 157,265 191,858 177,356 From non-controlled/affiliated investments: Interest income 14 1,209 1,680 Total investment income from non-controlled/affiliated investments 14 1,209 1,680 From controlled/affiliated investments: Interest income 3,611 12,481 13,240 Dividend income 21,228 15,750 15,250 Total investment income from controlled/affiliated investments 24,839 28,231 28,490 Total investment income 182,118 221,298 207,526 Expenses: Base management fees (Note 4) 28,648 31,316 29,626 Incentive fees (Note 4) 18,555 22,872 23,002 Professional fees 3,082 2,745 3,404 Administrative service fees (Note 4) 679 539 701 Interest expense (Notes 7 and 8) 35,820 50,587 37,801 Credit facility fees (Note 7) 3,761 3,079 2,295 Directors’ fees and expenses 398 353 370 Other general and administrative 1,795 1,738 1,661 Total expenses 92,738 113,229 98,860 Net investment income (loss) before taxes 89,380 108,069 108,666 Excise tax expense 573 404 230 Net investment income (loss) 88,807 107,665 108,436 Net realized gain (loss) and net change in unrealized appreciation (depreciation): Net realized gain (loss) from: Non-controlled/non-affiliated investments (58,473) (29,285) (1,368) Controlled/affiliated investments — (9,091) — Currency gains (losses) on non-investment assets and liabilities 497 33 — Net change in unrealized appreciation (depreciation) on investments: Non-controlled/non-affiliated investments (11,629) 4,734 (65,528) Non-controlled/affiliated investments (900) (4,704) 5,546 Controlled/affiliated investments (7,127) (6,083) (7,971) Net change in unrealized currency gains (losses) on non-investment assets and liabilities (4,346) (1,939) — Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments and non-investment assets and liabilities (81,978) (46,335) (69,321) Net increase (decrease) in net assets resulting from operations 6,829 61,330 39,115 Preferred stock dividend 2,275 — — Net increase (decrease) in net assets resulting from operations attributable to Common Stockholders $ 4,554 $ 61,330 $ 39,115 Basic and diluted earnings per common share (Note 10) Basic $ 0.08 $ 1.02 $ 0.63 Diluted $ 0.08 $ 1.02 $ 0.63 Weighted-average shares of common stock outstanding (Note 10) Basic 56,421,137 60,189,502 62,533,614 Diluted 56,421,137 60,189,502 62,533,614 The accompanying notes are an integral part of these consolidated financial statements. 97 Table of Contents TCG BDC, INC. CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (dollar amounts in thousands) For the years ended December 31, 2020 2019 2018 Increase (decrease) in net assets resulting from operations: Net investment income (loss) $ 88,807 $ 107,665 $ 108,436 Net realized gain (loss) (57,976) (38,343) (1,368) Net change in unrealized appreciation (depreciation) on investments (19,656) (6,053) (67,953) Net change in unrealized currency gains (losses) on non-investment assets and liabilities (4,346) (1,939) — Net increase (decrease) in net assets resulting from operations 6,829 61,330 39,115 Capital transactions: Preferred stock issued 50,000 — — Common stock issued, net of offering and underwriting costs — — (15) Reinvestment of dividends — — 6,629 Repurchase of common stock (27,254) (64,717) (4,867) Dividends declared (Note 10) (84,683) (103,360) (104,948) Net increase (decrease) in net assets resulting from capital share transactions (61,937) (168,077) (103,201) Net increase (decrease) in net assets (55,108) (106,747) (64,086) Net assets at beginning of year 956,471 1,063,218 1,127,304 Net assets at end of year $ 901,363 $ 956,471 $ 1,063,218 The accompanying notes are an integral part of these consolidated financial statements. 98 Table of Contents TCG BDC, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (dollar amounts in thousands) For the years ended December 31, 2020 2019 2018 Cash flows from operating activities: Net increase (decrease) in net assets resulting from operations $ 6,829 $ 61,330 $ 39,115 Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities: Amortization of deferred financing costs 2,133 1,864 1,896 Net accretion of discount on investments (8,186) (12,955) (12,814) Paid-in-kind interest (6,145) (7,958) (4,676) Net realized (gain) loss 57,976 38,343 1,368 Net change in unrealized (appreciation) depreciation on investments 19,656 6,053 67,953 Net change in unrealized currency (gains) losses on non-investment assets and liabilities 4,346 1,939 — Cost of investments purchased and change in payable for investments purchased (620,829) (994,374) (953,163) Proceeds from contribution of investments to Credit Fund II 168,897 — — Proceeds from sales and repayments of investments and change in receivable for investments sold 688,798 819,084 888,069 Changes in operating assets: Interest receivable (3,741) (3,606) (1,312) Dividend receivable 365 560 (860) Prepaid expenses and other assets (96) (188) (53) Changes in operating liabilities: Due to Investment Adviser — (236) 167 Interest and credit facility fees payable (4,325) (736) 2,147 Base management and incentive fees payable (1,687) (598) 736 Administrative service fees payable 8 (17) (1) Other accrued expenses and liabilities 1,160 (397) 223 Net cash provided by (used in) operating activities 305,159 (91,892) 28,795 Cash flows from financing activities: Proceeds from issuance of preferred stock 50,000 — — Proceeds from issuance of common stock, net of offering and underwriting costs — — (15) Repurchase of common stock (27,254) (64,717) (4,867) Borrowings on SPV Credit Facility and Credit Facility 452,833 755,179 812,650 Repayments of SPV Credit Facility and Credit Facility (725,469) (655,209) (860,908) Proceeds from issuance of Senior Notes, net of unamortized debt issuance costs 74,438 115,000 — Proceeds from issuance of 2015-1R Notes — — 449,200 Redemption of 2015-1 Notes — — (273,000) Debt issuance costs paid (1,488) (1,699) (3,405) Dividends paid in cash (96,551) (107,097) (93,303) Net cash provided by (used in) financing activities (273,491) 41,457 26,352 Net increase (decrease) in cash and cash equivalents 31,668 (50,435) 55,147 Cash and cash equivalents, beginning of year 36,751 87,186 32,039 Cash and cash equivalents, end of year $ 68,419 $ 36,751 $ 87,186 Supplemental disclosures: Offering expenses and debt issuance costs due $ — $ — $ 25 Interest paid during the year $ 33,149 $ 49,981 $ 34,676 Taxes, including excise tax, paid during year $ 391 $ 225 $ 105 Dividends declared during the year $ 84,683 $ 103,360 $ 104,948 Reinvestment of dividends $ — $ — $ 6,629 Credit Fund II members’ interest received in consideration of contribution of investments (Note 6) $ 78,096 $ — $ — The accompanying notes are an integral part of these consolidated financial statements. 99 TCG BDC, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS As of December 31, 2020 (dollar amounts in thousands) Investments—non-controlled/non-affiliated (1) Footnotes Industry Reference Rate & Spread (2) Interest Rate (2) Acquisition Date Maturity Date Par/ Principal Amount ** Amortized Cost (4) Fair Value (5) % of Net Assets First Lien Debt (65.23% of fair value) Advanced Web Technologies Holding Company ^ (2)(3)(13) Containers, Packaging & Glass L + 6.00% 7.00% 12/17/2020 12/17/2026 $ 6,042 $ 5,859 $ 5,858 0.65 % Airnov, Inc. ^* (2)(3)(13) Containers, Packaging & Glass L + 5.25% 6.25% 12/20/2019 12/19/2025 11,216 11,057 11,221 1.24 Alpha Packaging Holdings, Inc. * (2)(3) Containers, Packaging & Glass L + 6.00% 7.00% 6/26/2015 11/12/2021 2,784 2,784 2,784 0.31 Alpine SG, LLC * (2)(3) High Tech Industries L + 5.75% 6.75% 2/2/2018 11/16/2022 10,890 10,835 10,808 1.20 Alpine SG, LLC ^ (2)(3) High Tech Industries L + 8.50% 9.50% 7/24/2020 11/16/2022 1,618 1,578 1,612 0.18 Alpine SG, LLC ^* (2)(3) High Tech Industries L + 6.50% 7.50% 11/2/2020 11/16/2022 10,750 10,452 10,698 1.19 American Physician Partners, LLC ^* (2)(3)(13) Healthcare & Pharmaceuticals L + 6.75% 7.75% 1/7/2019 12/21/2021 28,848 28,715 27,295 3.03 AMS Group HoldCo, LLC ^ (2)(3)(13) Transportation: Cargo L + 6.50% 7.50% 9/29/2017 9/29/2023 22,252 22,004 21,945 2.43 Analogic Corporation * (2)(3)(13) Capital Equipment L + 5.25% 6.25% 6/22/2018 6/22/2024 2,361 2,332 2,361 0.26 Anchor Hocking, LLC ^ (2)(3) Durable Consumer Goods L + 11.75% 12.75% 1/25/2019 1/25/2024 9,758 9,547 9,358 1.04 Applied Technical Services, LLC ^ (2)(3)(13) Business Services L + 5.75% 6.75% 12/29/2020 12/29/2026 395 382 382 0.04 Apptio, Inc. ^ (2)(3)(13) Software L + 7.25% 8.25% 1/10/2019 1/10/2025 5,184 5,073 5,297 0.59 At Home Holding III, Inc. ^ (2)(3)(7) Retail L + 9.00% 10.00% 6/12/2020 7/27/2022 875 858 870 0.10 Aurora Lux FinCo S.Á.R.L. (Luxembourg) ^* (2)(3)(7) Software L + 5.75% 6.75% 12/24/2019 12/24/2026 32,819 32,093 29,970 3.32 Avenu Holdings, LLC ^* (2)(3) Sovereign & Public Finance L + 5.25% 6.25% 9/28/2018 9/28/2024 37,276 36,883 37,276 4.14 Barnes & Noble, Inc. ^ (2)(3)(11) Retail L + 5.50% 6.50% 8/7/2019 8/7/2024 16,744 16,426 15,808 1.75 BlueCat Networks, Inc. (Canada) * (2)(3)(7) High Tech Industries L + 6.25% 7.25% 10/30/2020 10/30/2026 11,468 11,243 11,239 1.25 BMS Holdings III Corp. * (2)(3) Construction & Building L + 5.25% 6.25% 9/30/2019 9/30/2026 1,596 1,554 1,578 0.18 Captive Resources Midco, LLC ^* (2)(3)(13) Banking, Finance, Insurance & Real Estate L + 5.75% 6.75% 6/30/2015 5/31/2025 10,525 10,370 10,611 1.18 Central Security Group, Inc. ^* (2)(3) Consumer Services L + 6.00% 7.00% 10/16/2020 10/16/2025 9,278 9,278 7,930 0.88 Chartis Holding, LLC ^* (2)(3)(13) Business Services L + 5.50% 6.50% 5/1/2019 5/1/2025 16,266 15,969 16,275 1.81 Chemical Computing Group ULC (Canada) ^* (2)(3)(7)(13) Software L + 5.00% 6.00% 8/30/2018 8/30/2023 471 469 471 0.05 CircusTrix Holdings, LLC ^* (2)(3) Hotel, Gaming & Leisure L + 6.75% (100% PIK) 7.75% 2/2/2018 12/6/2021 10,023 9,987 8,093 0.90 Cobblestone Intermediate Holdco LLC ^ (2)(3)(13) Consumer Services L + 4.75% 5.75% 1/29/2020 1/29/2026 720 713 723 0.08 Comar Holding Company, LLC ^* (2)(3)(13) Containers, Packaging & Glass L + 5.50% 6.50% 6/18/2018 6/18/2024 22,037 21,636 22,147 2.46 Cority Software Inc. (Canada) ^* (2)(3)(7)(13) Software L + 5.25% 6.25% 7/2/2019 7/2/2026 10,622 10,401 10,718 1.19 Cority Software Inc. (Canada) ^ (2)(3)(7) Software L + 7.25% 8.25% 9/3/2020 7/2/2026 1,898 1,843 1,935 0.21 Derm Growth Partners III, LLC ^ (2)(3)(8) Healthcare & Pharmaceuticals L + 6.25% (100% PIK) 7.25% 5/31/2016 5/31/2022 56,320 56,046 28,212 3.13 DermaRite Industries, LLC ^* (2)(3)(13) Healthcare & Pharmaceuticals L + 7.00% 8.00% 3/3/2017 3/3/2022 18,862 18,776 18,656 2.07 Designer Brands Inc. ^ (2)(3)(7) Retail L + 8.50% 9.75% 8/7/2020 8/7/2025 17,955 17,534 17,811 1.98 100 TCG BDC, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS As of December 31, 2020 (dollar amounts in thousands) Investments—non-controlled/non-affiliated (1) Footnotes Industry Reference Rate & Spread (2) Interest Rate (2) Acquisition Date Maturity Date Par/ Principal Amount ** Amortized Cost (4) Fair Value (5) % of Net Assets Diligent Corporation ^ (2)(3)(13) Telecommunications L + 6.25% 7.25% 8/4/2020 8/4/2025 $ 579 $ 561 $ 588 0.07 % DTI Holdco, Inc. * (2)(3) High Tech Industries L + 4.75% 5.75% 12/18/2018 9/30/2023 1,954 1,876 1,741 0.19 Emergency Communications Network, LLC ^* (2)(3) Telecommunications L + 2.625%, 5.125% PIK 8.75% 6/1/2017 6/1/2023 24,370 24,269 21,349 2.37 Ensono, LP * (2)(3) Telecommunications L + 5.25% 5.40% 4/30/2018 6/27/2025 2,158 2,142 2,142 0.24 Ensono, LP ^* (2)(3) Telecommunications L + 5.75% 5.90% 6/25/2020 6/27/2025 18,131 18,008 17,995 2.00 Ethos Veterinary Health LLC ^ (2)(3)(13) Consumer Services L + 4.75% 4.90% 5/17/2019 5/15/2026 2,612 2,570 2,540 0.28 EvolveIP, LLC ^ (2)(3)(13) Telecommunications L + 5.75% 6.75% 11/26/2019 6/7/2023 25,864 25,806 25,828 2.87 Frontline Technologies Holdings, LLC * (2)(3) Software L + 5.75% 6.75% 9/18/2017 9/18/2023 3,099 3,081 3,037 0.34 FWR Holding Corporation ^* (2)(3)(13) Beverage, Food & Tobacco L + 5.50%, 1.50% PIK 8.00% 8/21/2017 8/21/2023 34,555 34,175 31,216 3.46 Helios Buyer, Inc. ^ (2)(3)(13) Consumer Services L + 6.00% 7.00% 12/15/2020 12/15/2026 8,749 8,456 8,454 0.94 Hercules Borrower LLC ^ (2)(3)(13) Environmental Industries L + 6.50% 7.50% 12/14/2020 12/14/2026 18,592 18,077 18,073 2.01 Higginbotham Insurance Agency, Inc. ^ (2)(3)(13) Banking, Finance, Insurance & Real Estate L + 5.75% 6.50% 11/25/2020 11/25/2026 3,902 3,828 3,827 0.42 iCIMS, Inc. ^ (2)(3) Software L + 6.50% 7.50% 9/12/2018 9/12/2024 1,670 1,646 1,666 0.18 Individual FoodService Holdings, LLC ^ (2)(3)(13) Wholesale L + 6.25% 7.25% 2/21/2020 11/22/2025 3,883 3,797 3,759 0.42 Individual FoodService Holdings, LLC ^ (2)(3)(13) Wholesale L + 6.25% 7.25% 12/31/2020 11/22/2025 2,197 2,134 2,134 0.24 Innovative Business Services, LLC ^* (2)(3) High Tech Industries L + 5.50% 6.50% 4/5/2018 4/5/2023 13,779 13,523 13,484 1.50 Integrity Marketing Acquisition, LLC ^ (2)(3) Banking, Finance, Insurance & Real Estate L + 5.75% 6.75% 1/15/2020 8/27/2025 4,970 4,907 5,011 0.56 K2 Insurance Services, LLC ^* (2)(3)(13) Banking, Finance, Insurance & Real Estate L + 5.00% 6.00% 7/3/2019 7/1/2024 18,651 18,323 18,653 2.07 Kaseya, Inc. ^ (2)(3)(13) High Tech Industries L + 4.00%, 3.00% PIK 8.00% 5/3/2019 5/2/2025 14,871 14,610 14,940 1.66 Legacy.com, Inc. ^ (2)(3)(11) High Tech Industries L + 6.00% 7.00% 3/20/2017 3/20/2023 17,066 16,886 16,055 1.78 Lifelong Learner Holdings, LLC ^* (2)(3)(13) Business Services L + 5.75% 6.75% 10/18/2019 10/18/2026 23,814 23,355 21,580 2.39 Liqui-Box Holdings, Inc. ^ (2)(3)(13) Containers, Packaging & Glass L + 4.50% 5.50% 6/3/2019 6/3/2024 1,368 1,346 1,112 0.12 Mailgun Technologies, Inc. ^ (2)(3)(13) High Tech Industries L + 5.00% 6.00% 3/26/2019 3/26/2025 3,256 3,185 3,175 0.35 National Technical Systems, Inc. ^ (2)(3)(13) Aerospace & Defense L + 5.50% 6.50% 10/28/2020 6/12/2023 1,175 1,150 1,160 0.13 NES Global Talent Finance US, LLC (United Kingdom) * (2)(3)(7) Energy: Oil & Gas L + 5.50% 6.50% 5/9/2018 5/11/2023 9,789 9,697 8,859 0.98 NMI AcquisitionCo, Inc. ^* (2)(3)(13) High Tech Industries L + 5.00% 6.00% 9/6/2017 9/6/2022 40,756 40,442 40,336 4.48 Paramit Corporation * (2)(3) Capital Equipment L + 4.50% 5.50% 5/3/2019 5/3/2025 5,213 5,174 5,109 0.57 Paramit Corporation ^ (2)(3)(13) Capital Equipment L + 5.25% 6.25% 11/24/2020 5/3/2025 3,029 2,912 2,909 0.32 Park Place Technologies, LLC ^ (2)(3) High Tech Industries L + 5.00% 6.00% 11/19/2020 11/19/2027 20,000 19,211 19,150 2.12 101 TCG BDC, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS As of December 31, 2020 (dollar amounts in thousands) Investments—non-controlled/non-affiliated (1) Footnotes Industry Reference Rate & Spread (2) Interest Rate (2) Acquisition Date Maturity Date Par/ Principal Amount ** Amortized Cost (4) Fair Value (5) % of Net Assets PF Growth Partners, LLC ^* (2)(3)(13) Hotel, Gaming & Leisure L + 7.00% 8.00% 7/1/2019 7/11/2025 $ 7,294 $ 7,198 $ 6,778 0.75 % Plano Molding Company, LLC ^ (2)(3) Hotel, Gaming & Leisure L + 7.50%, 1.50% PIK 10.00% 5/1/2015 5/12/2022 14,693 14,664 13,001 1.44 Plano Molding Company, LLC ^ (2)(3) Hotel, Gaming & Leisure L + 7.50%, 1.50% PIK 10.00% 8/7/2020 5/12/2022 1,081 1,073 1,081 0.12 PPC Flexible Packaging, LLC ^* (2)(3)(13) Containers, Packaging & Glass L + 6.00% 7.00% 11/23/2018 11/23/2024 11,338 11,234 11,300 1.25 PPT Management Holdings, LLC ^ (2)(3) Healthcare & Pharmaceuticals L + 6.00%, 2.50% PIK 9.50% 12/15/2016 12/16/2022 27,896 27,817 22,798 2.53 PricewaterhouseCoopers Public Sector LLP ^ (2)(3)(13) Aerospace & Defense L + 3.25% 3.49% 5/1/2018 5/1/2023 — (74) (32) — Product Quest Manufacturing, LLC ^ (2)(3)(8) Containers, Packaging & Glass L + 6.75% 10.00% 9/21/2017 3/31/2021 840 840 423 0.05 Propel Insurance Agency, LLC (2)(3) Banking, Finance, Insurance & Real Estate L + 5.00% 6.00% 6/1/2018 6/1/2024 2,339 2,327 2,316 0.26 QW Holding Corporation ^* (2)(3)(13) Environmental Industries L + 6.25% 7.25% 8/31/2016 8/31/2022 43,119 42,771 40,990 4.55 Redwood Services Group, LLC * (2)(3) High Tech Industries L + 6.00% 7.00% 11/13/2018 6/6/2023 5,043 5,017 5,030 0.56 Redwood Services Group, LLC * (2)(3) High Tech Industries L + 8.50% 9.50% 8/14/2020 6/6/2023 3,474 3,378 3,494 0.39 Redwood Services Group, LLC ^* (2)(3)(13) High Tech Industries L + 7.25% 8.25% 10/19/2020 6/6/2023 12,957 12,628 13,024 1.44 Regency Entertainment, Inc. ^ (2)(3) Media: Diversified & Production L + 6.75% 7.75% 5/22/2020 10/22/2025 20,000 19,636 19,600 2.17 Reladyne, Inc. * (2)(3) Wholesale L + 5.00% 6.00% 8/21/2020 7/22/2022 10,100 10,017 10,146 1.13 Riveron Acquisition Holdings, Inc. * (2)(3) Banking, Finance, Insurance & Real Estate L + 5.75% 6.75% 5/22/2019 5/22/2025 11,517 11,341 11,595 1.29 RSC Acquisition, Inc. ^ (2)(3)(13) Banking, Finance, Insurance & Real Estate L + 5.50% 6.50% 11/1/2019 11/1/2026 10,711 10,534 10,824 1.20 Sapphire Convention, Inc. ^* (2)(3)(13) Telecommunications L + 6.25% 7.25% 11/20/2018 11/20/2025 28,812 28,342 24,000 2.66 Smile Doctors, LLC ^* (2)(3)(13) Healthcare & Pharmaceuticals L + 6.00% 7.00% 10/6/2017 10/6/2022 16,930 16,872 16,577 1.84 Southern Graphics, Inc. ^ (2)(3)(11) Media: Advertising, Printing & Publishing L + 6.50% 7.50% 10/30/2020 10/23/2023 9,959 9,769 9,849 1.09 Sovos Brands Intermediate, Inc. * (2)(3) Beverage, Food & Tobacco L + 4.75% 4.96% 11/16/2018 11/20/2025 17,498 17,360 17,348 1.92 SPay, Inc. ^* (2)(3)(13) Hotel, Gaming & Leisure L + 5.75%, 2.00% PIK 8.75% 6/15/2018 6/17/2024 21,365 21,099 17,318 1.92 Superior Health Linens, LLC ^* (2)(3)(13) Business Services L + 6.50% 7.50% 9/30/2016 9/30/2021 13,155 13,116 13,079 1.45 T2 Systems, Inc. ^* (2)(3)(13) Transportation: Consumer L + 6.75% 7.75% 9/28/2016 9/28/2022 26,605 26,356 26,605 2.95 Tank Holding Corp. ^ (2)(3)(13) Capital Equipment L + 3.50% 3.74% 3/26/2019 3/26/2024 — — (1) — TCFI Aevex LLC ^* (2)(3)(13) Aerospace & Defense L + 6.00% 7.00% 3/18/2020 3/18/2026 9,693 9,503 9,650 1.07 The Leaders Romans Bidco Limited (United Kingdom) Term Loan B ^ (2)(3)(7) Banking, Finance, Insurance & Real Estate L + 6.50%, 3.00% PIK 10.25% 7/23/2019 6/30/2024 £ 20,740 25,406 28,078 3.12 102 TCG BDC, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS As of December 31, 2020 (dollar amounts in thousands) Investments—non-controlled/non-affiliated (1) Footnotes Industry Reference Rate & Spread (2) Interest Rate (2) Acquisition Date Maturity Date Par/ Principal Amount ** Amortized Cost (4) Fair Value (5) % of Net Assets The Leaders Romans Bidco Limited (United Kingdom) Term Loan C ^ (2)(3)(7)(13) Banking, Finance, Insurance & Real Estate L + 6.50%, 3.00% PIK 10.25% 7/23/2019 6/30/2024 £ 3,816 $ 4,748 $ 5,727 0.64 % Trump Card, LLC ^* (2)(3)(13) Transportation: Cargo L + 5.50% 6.50% 6/26/2018 4/21/2022 7,594 7,572 7,444 0.83 TSB Purchaser, Inc. ^* (2)(3)(13) Media: Advertising, Printing & Publishing L + 6.00% 7.00% 5/14/2018 5/14/2024 18,666 18,354 18,501 2.05 Turbo Buyer, Inc. ^* (2)(3)(13) Automotive L + 5.25% 6.25% 12/2/2019 12/2/2025 24,323 23,766 24,567 2.73 Tweddle Group, Inc. ^ (2)(3) Media: Advertising, Printing & Publishing L + 4.50% 5.50% 9/17/2018 9/17/2023 1,825 1,808 1,678 0.19 U.S. Acute Care Solutions, LLC * (2)(3) Healthcare & Pharmaceuticals L + 6.00% 7.00% 2/21/2019 5/15/2021 4,242 4,235 3,956 0.44 Unifrutti Financing PLC (Cyprus) ^ (7) Beverage, Food & Tobacco 7.50%, 1.00% PIK 8.50% 9/15/2019 9/15/2026 € 4,575 4,832 5,464 0.61 Unifrutti Financing PLC (Cyprus) ^ (7) Beverage, Food & Tobacco 11.00% PIK 11.00% 10/22/2020 9/15/2026 € 647 724 754 0.08 US INFRA SVCS Buyer, LLC ^ (2)(3)(13) Environmental Industries L + 6.00% 7.00% 4/13/2020 4/13/2026 3,248 2,688 3,175 0.35 USLS Acquisition, Inc. ^* (2)(3)(13) Business Services L + 5.75% 6.75% 11/30/2018 11/30/2024 21,447 21,124 19,981 2.22 USLS Acquisition, Inc. ^ (2)(3)(13) Business Services L + 5.75% 6.75% 9/3/2020 11/30/2024 — (22) — — VRC Companies, LLC ^* (2)(3)(13) Business Services L + 6.50% 7.50% 3/31/2017 3/31/2023 33,286 33,048 33,286 3.69 Westfall Technik, Inc. ^* (2)(3)(13) Chemicals, Plastics & Rubber L + 6.25% 7.25% 9/13/2018 9/13/2024 27,720 27,457 25,733 2.85 Wheel Pros, LLC * (2)(3) Automotive L + 5.25% 6.25% 11/18/2020 11/6/2027 18,750 18,286 18,390 2.04 YLG Holdings, Inc. ^ (2)(3)(13) Consumer Services L + 6.25% 7.25% 9/30/2020 11/1/2025 1,401 1,343 1,370 0.15 Zemax Software Holdings, LLC * (2)(3)(13) Software L + 5.75% 6.75% 6/25/2018 6/25/2024 6,285 6,216 6,119 0.68 Zenith Merger Sub, Inc. ^* (2)(3)(13) Business Services L + 5.25% 6.25% 12/13/2017 12/13/2023 14,164 14,034 14,031 1.56 First Lien Debt Total $ 1,246,281 $ 1,190,871 132.16 % Second Lien Debt (15.58% of fair value) AI Convoy S.A.R.L (United Kingdom) ^ (2)(3)(7) Aerospace & Defense L + 8.25% 9.25% 1/17/2020 1/17/2028 $ 24,814 $ 24,305 $ 25,546 2.83 % Aimbridge Acquisition Co., Inc. ^ (2)(3) Hotel, Gaming & Leisure L + 7.50% 7.65% 2/1/2019 2/1/2027 9,241 9,104 7,993 0.89 AQA Acquisition Holding, Inc. ^ (2)(3) High Tech Industries L + 8.00% 9.00% 10/1/2018 5/24/2024 39,000 38,741 39,000 4.33 Brave Parent Holdings, Inc. ^* (2)(3) Software L + 7.50% 7.64% 10/3/2018 4/19/2026 19,062 18,711 19,062 2.11 Drilling Info Holdings, Inc. ^ (2)(3) Energy: Oil & Gas L + 8.25% 8.40% 2/11/2020 7/30/2026 18,600 18,145 18,228 2.02 Jazz Acquisition, Inc. ^ (2)(3) Aerospace & Defense L + 8.00% 8.15% 6/13/2019 6/18/2027 23,450 23,150 18,146 2.01 Outcomes Group Holdings, Inc. ^* (2)(3) Business Services L + 7.50% 7.75% 10/23/2018 10/26/2026 3,462 3,455 3,462 0.38 PAI Holdco, Inc. ^ (2)(3) Automotive L + 6.25%, 2.00% PIK 9.25% 10/28/2020 10/28/2028 13,530 13,132 13,329 1.48 Pharmalogic Holdings Corp. ^ (2)(3) Healthcare & Pharmaceuticals L + 8.00% 9.00% 6/7/2018 12/11/2023 800 798 783 0.09 Quartz Holding Company ^ (2)(3) Software L + 8.00% 8.15% 4/2/2019 4/2/2027 7,048 6,930 6,994 0.78 Reladyne, Inc. ^ (2)(3) Wholesale L + 9.50% 10.50% 4/19/2018 1/21/2023 12,242 12,133 11,956 1.33 Stonegate Pub Company Bidco Limited (United Kingdom) ^ (2)(3)(7) Beverage, Food & Tobacco L + 8.50% 8.54% 3/12/2020 3/12/2028 £ 20,000 24,729 21,902 2.43 103 TCG BDC, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS As of December 31, 2020 (dollar amounts in thousands) Investments—non-controlled/non-affiliated (1) Footnotes Industry Reference Rate & Spread (2) Interest Rate (2) Acquisition Date Maturity Date Par/ Principal Amount ** Amortized Cost (4) Fair Value (5) % of Net Assets Tank Holding Corp. (2)(3) Capital Equipment L + 8.25% 8.40% 3/26/2019 3/26/2027 $ 35,965 $ 35,454 $ 35,189 3.90 % TruGreen Limited Partnership ^ (2)(3) Consumer Services L + 8.50% 9.25% 11/16/2020 11/2/2028 13,000 12,743 13,000 1.44 Ultimate Baked Goods MIDCO, LLC ^ (2)(3) Beverage, Food & Tobacco L + 8.00% 9.00% 8/9/2018 8/9/2026 2,820 2,776 2,689 0.30 Watchfire Enterprises, Inc. ^ (2)(3) Media: Advertising, Printing & Publishing L + 8.00% 9.00% 10/2/2013 10/2/2021 7,000 6,985 6,988 0.78 World 50, Inc. ^ (9) Business Services 11.50% 11.50% 1/10/2020 1/9/2027 7,635 7,499 7,518 0.83 WP CPP Holdings, LLC ^* (2)(3) Aerospace & Defense L + 7.75% 8.75% 7/18/2019 4/30/2026 39,500 39,172 32,738 3.63 Second Lien Debt Total $ 297,962 $ 284,523 31.56 % Investments—non-controlled/non-affiliated (1) Footnotes Industry Acquisition Date Shares/ Units Cost Fair Value (5) % of Net Assets Equity Investments (1.86% of fair value) Central Security Group, Inc. ^* (6) Consumer Services 10/16/2020 443 $ — $ — — % ANLG Holdings, LLC ^ (6) Capital Equipment 6/22/2018 592 592 865 0.10 Avenu Holdings, LLC ^ (6) Sovereign & Public Finance 9/28/2018 172 172 345 0.04 BK Intermediate Company, LLC ^ (6) Healthcare & Pharmaceuticals 5/27/2020 288 288 209 0.02 Chartis Holding, LLC ^ (6) Business Services 5/1/2019 433 433 571 0.06 CIP Revolution Holdings, LLC ^ (6) Media: Advertising, Printing & Publishing 8/19/2016 318 318 245 0.03 Cority Software Inc. (Canada) ^ (6) Software 7/2/2019 250 250 295 0.03 DecoPac, Inc. ^ (6) Non-durable Consumer Goods 9/29/2017 1,500 1,500 1,664 0.18 Derm Growth Partners III, LLC ^ (6) Healthcare & Pharmaceuticals 5/31/2016 1,000 1,000 — — GRO Sub Holdco, LLC ^ (6) Healthcare & Pharmaceuticals 3/29/2018 500 — — — K2 Insurance Services, LLC ^ (6) Banking, Finance, Insurance & Real Estate 7/3/2019 433 433 676 0.07 Legacy.com, Inc. ^ (6) High Tech Industries 3/20/2017 1,500 1,500 613 0.07 Mailgun Technologies, Inc. ^ (6) High Tech Industries 3/26/2019 424 424 784 0.09 North Haven Goldfinch Topco, LLC ^ (6) Containers, Packaging & Glass 6/18/2018 2,315 2,315 3,043 0.34 PPC Flexible Packaging, LLC ^ (6) Containers, Packaging & Glass 2/1/2019 965 965 1,302 0.14 Paramit Corporation ^ (6) Capital Equipment 6/17/2019 150 500 758 0.08 Rough Country, LLC ^ (6) Durable Consumer Goods 5/25/2017 755 755 1,634 0.18 SiteLock Group Holdings, LLC ^ (6) High Tech Industries 4/5/2018 446 446 526 0.06 T2 Systems Parent Corporation ^ (6) Transportation: Consumer 9/28/2016 556 556 838 0.09 Tailwind HMT Holdings Corp. ^ (6) Energy: Oil & Gas 11/17/2017 20 1,334 2,001 0.22 Tank Holding Corp. ^ (6) Capital Equipment 3/26/2019 850 482 944 0.10 Titan DI Preferred Holdings, Inc. ^ (6) Energy: Oil & Gas 2/11/2020 11,246 10,959 11,021 1.22 104 TCG BDC, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS As of December 31, 2020 (dollar amounts in thousands) Investments—non-controlled/non-affiliated (1) Footnotes Industry Acquisition Date Shares/ Units Cost Fair Value (5) % of Net Assets Turbo Buyer, Inc. ^ (6) Automotive 12/2/2019 1,925 $ 1,925 $ 2,444 0.27 % Tweddle Holdings, Inc. ^* (6) Media: Advertising, Printing & Publishing 9/17/2018 17 — — — Unifrutti Financing PLC (Cyprus) ^ (6) Beverage, Food & Tobacco 10/22/2020 — 556 575 0.06 Unifrutti Financing PLC (Cyprus) ^ (6) Beverage, Food & Tobacco 10/22/2020 — — — — USLS Acquisition, Inc. ^ (6) Business Services 11/30/2018 641 641 565 0.06 W50 Parent LLC ^ (6) Business Services 1/10/2020 500 500 575 0.06 Zenith American Holding, Inc. ^ (6) Business Services 12/13/2017 1,565 782 1,221 0.14 Zillow Topco LP ^ (6) Software 6/25/2018 313 313 163 0.02 Equity Investments Total $ 29,939 $ 33,877 3.73 % Total investments—non-controlled/non-affiliated $ 1,574,182 $ 1,509,271 167.45 % Investments—non-controlled/affiliated Footnotes Industry Reference Rate & Spread (2) Interest Rate (2) Acquisition Date Maturity Date Par/ Principal Amount ** Amortized Cost (4) Fair Value (5) % of Net Assets First Lien Debt (1.43% of fair value) Direct Travel, Inc. ^* (2)(3)(8)(12) Hotel, Gaming & Leisure L + 1.00%, 7.50% PIK 9.50% 10/14/2016 10/1/2023 $ 36,711 $ 36,340 $ 24,949 2.77 % Direct Travel, Inc. ^ (2)(3)(12)(13) Hotel, Gaming & Leisure L + 6.00% 7.00% 10/1/2020 10/1/2023 1,231 1,231 1,231 0.14 First Lien Debt Total $ 37,571 $ 26,180 2.91 % Investments—non-controlled/affiliated Footnotes Industry Acquisition Date Shares/ Units Cost Fair Value (5) % of Net Assets Equity Investments (0.00% of fair value) Direct Travel, Inc. ^ (6)(12) Hotel, Gaming & Leisure 10/1/2020 43 $ — $ — — % Equity Investments Total $ — $ — — % Total investments—non-controlled/affiliated $ 37,571 $ 26,180 2.91 % 105 TCG BDC, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS As of December 31, 2020 (dollar amounts in thousands) Investments—controlled/affiliated Footnotes Industry Reference Rate & Spread (2) Interest Rate (2) Acquisition Date Maturity Date Par/ Principal Amount ** Amortized Cost (4) Fair Value (5) % of Net Assets First Lien Debt (0.38% of fair value) SolAero Technologies Corp. (A1 Term Loan) ^ (2)(3)(8)(10) Telecommunications L + 8.00% (100% PIK) 9.00% 4/12/2019 10/12/2022 $ 3,166 $ 3,166 $ 1,214 0.13 % SolAero Technologies Corp. (A2 Term Loan) ^ (2)(3)(8)(10) Telecommunications L + 8.00% (100% PIK) 9.00% 4/12/2019 10/12/2022 8,707 8,707 3,338 0.37 SolAero Technologies Corp. (Priority Facilities) ^ (2)(3)(10)(13) Telecommunications L + 6.00% 7.00% 4/12/2019 10/12/2022 2,460 2,429 2,460 0.27 First Lien Debt Total $ 14,302 $ 7,012 0.77 % Investments—controlled/affiliated Footnotes Industry Acquisition Date Shares/ Units Cost Fair Value (5) % of Net Assets Equity Investments (0.00% of fair value) SolAero Technologies Corp. ^ (6)(10) Telecommunications 4/12/2019 3 $ 2,815 $ — — % Equity Investments Total $ 2,815 $ — — % Investments—controlled/affiliated Footnotes Industry Reference Rate & Spread (2) Interest Rate (2) Acquisition Date Maturity Date Par Amount/ LLC Interest Cost Fair Value (7) % of Net Assets Investment Funds (15.52% of fair value) Middle Market Credit Fund II, LLC, Member's Interest ^ (10)(7) Investment Funds N/A N/A 11/3/2020 12/31/2030 $ 78,122 $ 78,096 $ 77,395 8.59 % Middle Market Credit Fund, LLC, Subordinated Loan and Member's Interest ^ (10)(7) Investment Funds N/A N/A 2/29/2016 3/1/2021 216,000 216,000 205,891 22.84 Middle Market Credit Fund, Mezzanine Loan ^ (2)(10)(7)(9) Investment Funds L + 9.00% 9.24% 6/30/2016 3/22/2021 — — — — Investment Fund Total $ 294,096 $ 283,286 31.43 % Total investments—controlled/affiliated $ 311,213 $ 290,298 32.20 % Total investments $ 1,922,966 $ 1,825,749 202.56 % ^ Denotes that all or a portion of the assets are owned by TCG BDC, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “TCG BDC” or the “Company”). The Company has entered into a senior secured revolving credit facility (as amended, the “Credit Facility”). The lenders of the Credit Facility have a first lien security interest in substantially all of the portfolio investments held by the Company (see Note 7, Borrowings). Accordingly, such assets are not available to creditors of Carlyle Direct Lending CLO 2015-1R LLC (formerly known as Carlyle GMS Finance MM CLO 2015-1 LLC) (the “2015-1 Issuer”). * Denotes that all or a portion of the assets are owned by the Company's wholly owned subsidiary, the 2015-1 Issuer, and secure the notes issued in connection with a term debt securitization completed by the Company on June 26, 2015 (see Note 8, Notes Payable). Accordingly, such assets are not available to the creditors of the Company. ** Par amount is denominated in USD ("$") unless otherwise noted, as denominated in Euro (“€”) or British Pound (“£”) (1) Unless otherwise indicated, issuers of debt and equity investments held by the Company are domiciled in the United States. Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”), the Company would be deemed to “control” a portfolio company if the Company owned more than 25% of its outstanding voting securities and/or held the power to exercise control over the management or policies of the portfolio company. As of December 31, 2020, the Company does not “control” any of these portfolio companies. Under the Investment Company Act, the Company would be deemed an “affiliated person” of a portfolio company if the Company owns 5% or more of the portfolio company’s outstanding voting securities. As of December 31, 2020, the Company is not an “affiliated person” of any of these portfolio companies. Certain portfolio company investments are subject to contractual restrictions on sales. 106 TCG BDC, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS As of December 31, 2020 (dollar amounts in thousands) (2) Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR (“L”) or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, the Company has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2020. As of December 31, 2020, the reference rates for our 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%. (3) Loan includes interest rate floor feature, which is generally 1.00%. (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. (5) Fair value is determined in good faith by or under the direction of the Board of Directors of the Company (see Note 2, Significant Accounting Policies, and Note 3, Fair Value Measurements), pursuant to the Company’s valuation policy. The fair value of all first lien and second lien debt investments, equity investments and the investment fund was determined using significant unobservable inputs. (6) Security acquired in transaction exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act, unless otherwise noted. As of December 31, 2020, the aggregate fair value of these securities is $33,877, or 3.73% of the Company’s net assets. (7) The Company has determined the indicated investments are non-qualifying assets under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company’s total assets. (8) Loan was on non-accrual status as of December 31, 2020. (9) Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company/investment fund. (10) Under the Investment Company Act, the Company is deemed to be an “affiliated person” of and “control” this investment fund because the Company owns more than 25% of the investment fund’s outstanding voting securities and/or has the power to exercise control over management or policies of such investment fund. See Notes 5, Middle Market Credit Fund, LLC and 6. Middle Market Credit Fund II, LLC, for more details. Transactions related to investments in controlled affiliates for the year ended December 31, 2020, were as follows: Investments—controlled/affiliated Fair Value as of December 31, 2019 Additions/Purchases Reductions/Sales/ Paydowns Net Realized Gain (Loss) Net Change in Unrealized Appreciation (Depreciation) Fair Value as of December 31, 2020 Dividend and Interest Income Middle Market Credit Fund, LLC, Mezzanine Loan $ 93,000 $ 63,500 $ (156,500) $ — $ — $ — $ 3,049 Middle Market Credit Fund, LLC, Subordinated Loan and Member’s Interest 111,596 92,500 — — 1,795 205,891 19,750 Middle Market Credit Fund II, LLC, Member’s Interest — 78,096 — — (701) 77,395 1,446 Total investments—controlled/affiliated $ 204,596 $ 234,096 $ (156,500) $ — $ 1,094 $ 283,286 $ 24,245 Investments—controlled/affiliated Fair Value as of December 31, 2019 Additions/Purchases Reductions/Sales/ Paydowns Net Realized Gain (Loss) Net Change in Unrealized Appreciation (Depreciation) Fair Value as of December 31, 2020 Dividend and Interest Income SolAero Technologies Corp. (Priority Term Loan) 9,612 — (7,152) — — 2,460 52 SolAero Technologies Corp. (A1 Term Loan) 3,166 — — — (1,952) 1,214 — SolAero Technologies Corp. (A2 Term Loan) 8,707 — — — (5,369) 3,338 — Solaero Technology Corp. (Equity) 826 — — — (826) — — Total investments—controlled/affiliated $ 22.311 $ — $ (7,152) $ — $ (8,147) $ 7,012 $ 52 (11) In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among lenders as follows: Barnes & Noble, Inc. (1.83%), Southern Graphics, Inc. (1.71%), and Legacy.com, Inc (3.92%). Pursuant to the agreement among lenders in respect of this loan, this investment represents 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 payments. (12) Under the Investment Company Act, the Company is deemed an “affiliated person” of this portfolio because the Company owns 5% or more of the portfolio company’s outstanding voting securities. Transactions related the portfolio company during the year ended December 31, 2020 were as follows: 107 TCG BDC, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS As of December 31, 2020 (dollar amounts in thousands) Investments—non-controlled/affiliated Fair Value as of December 31, 2019 Additions/Purchases Reductions/Sales/ Paydowns Net Realized Gain (Loss) Net Change in Unrealized Appreciation (Depreciation) Fair Value as of December 31, 2020 Dividend and Interest Income Direct Travel, Inc. $ 36,757 $ — $ (176) $ 1 $ (11,633) $ 24,949 $ — Direct Travel, Inc. — 1,231 — — — 1,231 18 Direct Travel, Inc. (Equity) — — — — — — — Total investments—non-controlled/affiliated $ 36.757 $ 1,231 $ (176) $ 1 $ (11,633) $ 26,180 $ 18 (13) As of December 31, 2020, the Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans: Investments—non-controlled/non-affiliated Type Unused Fee Par/ Principal Amount Fair Value First and Second Lien Debt—unfunded delayed draw and revolving term loans commitments Advanced Web Technologies Holding Company Delayed Draw 1.00% $ 2,299 $ (46) Advanced Web Technologies Holding Company Revolver 0.50 854 (17) Airnov, Inc. Revolver 0.50 1,250 1 American Physician Partners, LLC Revolver 0.50 550 (29) AMS Group HoldCo, LLC Revolver 0.50 2,315 (29) Analogic Corporation Revolver 0.50 168 — Applied Technical Services Delayed Draw 1.00 132 (3) Applied Technical Services Revolver 0.50 53 (1) Apptio, Inc. Revolver 0.50 2,367 36 Captive Resources Midco, LLC Revolver 0.50 2,143 15 Chartis Holding, LLC Delayed Draw 1.00 4,406 2 Chartis Holding, LLC Revolver 0.50 2,401 1 Chemical Computing Group ULC (Canada) Revolver 0.50 29 — Cobblestone Intermediate Holdco LLC Delayed Draw 1.00 11 — Comar Holding Company, LLC Revolver 0.50 2,935 11 Comar Holding Company, LLC Delayed Draw 1.00 4,655 17 Cority Software Inc.(Canada) Revolver 0.50 3,000 21 DermaRite Industries, LLC Revolver 0.50 3,103 (29) Diligent Corporation Delayed Draw 1.00 141 2 Diligent Corporation Revolver 0.50 47 1 Direct Travel, Inc. Delayed Draw 0.50 3,029 — Ethos Veterinary Health LLC Delayed Draw 1.00 2,696 (37) EvolveIP, LLC Delayed Draw 1.00 3,333 (4) EvolveIP, LLC Revolver 0.50 2,941 (3) FWR Holding Corporation Revolver 0.50 4,444 (380) Helios Buyer, Inc. Revolver 0.50 1,326 (27) Helios Buyer, Inc. Delayed Draw — 4,672 (93) Hercules Borrower LLC Revolver 0.50 2,160 (54) 108 TCG BDC, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS As of December 31, 2020 (dollar amounts in thousands) Investments—non-controlled/non-affiliated Type Unused Fee Par/ Principal Amount Fair Value Higginbotham Insurance Agency, Inc. Delayed Draw 1.00% $ 1,098 $ (16) Individual FoodService Holdings, LLC Revolver 0.50 436 (11) Individual FoodService Holdings, LLC Delayed Draw 1.00 645 (16) Individual FoodService Holdings, LLC Delayed Draw 1.00 165 (4) Individual FoodService Holdings, LLC Revolver 0.50 139 (3) Innovative Business Services, LLC Revolver 0.50 2,232 (41) K2 Insurance Services, LLC Revolver 0.50 2,290 — K2 Insurance Services, LLC Delayed Draw 1.00 1,571 — Kaseya, Inc. Delayed Draw 1.00 1,852 7 Kaseya, Inc. Revolver 0.50 787 3 Lifelong Learner Holdings, LLC Delayed Draw 1.00 1,690 (140) Lifelong Learner Holdings, LLC Revolver 0.50 1,377 (114) Liqui-Box Holdings, Inc. Revolver 0.50 1,262 (123) Mailgun Technologies, Inc. Revolver 0.50 1,342 (23) National Technical Systems, Inc. Revolver 0.50 835 (6) NMI AcquisitionCo, Inc. Revolver 0.50 1,280 (13) Paramit Corporation Delayed Draw — 2,931 (59) PF Growth Partners, LLC Delayed Draw 1.00 823 (52) PPC Flexible Packaging, LLC Revolver 0.50 881 (3) PricewaterhouseCoopers Public Sector LLP Revolver 0.50 6,250 (32) QW Holding Corporation Delayed Draw 1.00 600 (29) Redwood Services Group, LLC Delayed Draw 3.63 4,639 18 RSC Acquisition, Inc. Revolver 0.50 608 6 Sapphire Convention, Inc. Revolver 0.50 3,655 (542) Smile Doctors, LLC Revolver 0.50 707 (14) SolAero Technologies Corp. (Priority Facilities) Revolver 0.50 2,068 — SPay, Inc. Revolver 0.50 655 (120) Superior Health Linens, LLC Revolver 0.50 1,667 (8) T2 Systems, Inc. Revolver 0.50 2,933 — Tank Holding Corp. Revolver 0.25 47 (1) TCFI Aevex LLC Delayed Draw 1.00 1,787 (7) The Leaders Romans Bidco Limited (United Kingdom) Delayed Draw 1.63 £ 204 26 Trump Card, LLC Revolver 0.50 635 (12) TSB Purchaser, Inc. Revolver 0.50 1,891 (15) Turbo Buyer, Inc. Revolver 0.50 2,151 20 US INFRA SVCS Buyer, LLC Revolver 0.50 2,275 (5) US INFRA SVCS Buyer, LLC Delayed Draw 1.00 26,153 (60) USLS Acquisition, Inc. Revolver 0.50 1,418 (91) USLS Acquisition, Inc. Delayed Draw 0.50 591 — 109 TCG BDC, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS As of December 31, 2020 (dollar amounts in thousands) Investments—non-controlled/non-affiliated Type Unused Fee Par/ Principal Amount Fair Value VRC Companies, LLC Revolver 0.50% $ 1,646 $ — Westfall Technik, Inc. Revolver 0.50 431 (30) YLG Holdings, Inc. Delayed Draw 1.00 596 (9) Zemax Software Holdings, LLC Revolver 0.50 642 (15) Zenith Merger Sub, Inc. Revolver 0.50 1,590 (12) Zenith Merger Sub, Inc. Delayed Draw 1.00 2,573 (19) Total unfunded commitments $ 149,508 $ (2,210) 110 TCG BDC, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS As of December 31, 2020 (dollar amounts in thousands) As of December 31, 2020, investments at fair value consisted of the following: Type Amortized Cost Fair Value % of Fair Value First Lien Debt (excluding First Lien/Last Out Debt) $ 1,234,579 $ 1,161,881 63.63 % First Lien/Last Out Debt 63,575 62,182 3.41 Second Lien Debt 297,962 284,523 15.58 Equity Investments 32,754 33,877 1.86 Investment Funds 294,096 283,286 15.52 Total $ 1,922,966 $ 1,825,749 100.00 % The rate type of debt investments at fair value as of December 31, 2020 was as follows: Rate Type Amortized Cost Fair Value % of Fair Value of First and Second Lien Debt Floating Rate $ 1,583,061 $ 1,494,850 99.09 % Fixed Rate 13,055 13,736 0.91 Total $ 1,596,116 $ 1,508,586 100.00 % 111 TCG BDC, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS As of December 31, 2020 (dollar amounts in thousands) The industry composition of investments at fair value as of December 31, 2020 was as follows: Industry Amortized Cost Fair Value % of Fair Value Aerospace & Defense $ 97,206 $ 87,208 4.78 % Automotive 57,109 58,730 3.22 Banking, Finance, Insurance & Real Estate 92,217 97,318 5.33 Beverage, Food & Tobacco 85,152 79,948 4.38 Business Services 134,316 132,526 7.26 Capital Equipment 47,446 48,134 2.64 Chemicals, Plastics & Rubber 27,457 25,733 1.41 Construction & Building 1,554 1,578 0.09 Consumer Services 35,103 34,017 1.86 Containers, Packaging & Glass 58,036 59,190 3.24 Durable Consumer Goods 10,302 10,992 0.60 Energy: Oil & Gas 40,135 40,109 2.20 Environmental Industries 63,536 62,238 3.41 Healthcare & Pharmaceuticals 154,547 118,486 6.49 High Tech Industries 205,975 205,709 11.27 Hotel, Gaming & Leisure 100,696 80,444 4.40 Investment Funds 294,096 283,286 15.52 Media: Advertising, Printing & Publishing 37,234 37,261 2.04 Media: Diversified & Production 19,636 19,600 1.07 Non-durable Consumer Goods 1,500 1,664 0.09 Retail 34,818 34,489 1.89 Software 87,026 85,727 4.70 Sovereign & Public Finance 37,055 37,621 2.06 Telecommunications 116,245 98,914 5.41 Transportation: Cargo 29,576 29,389 1.61 Transportation: Consumer 26,912 27,443 1.50 Wholesale 28,081 27,995 1.53 Total $ 1,922,966 $ 1,825,749 100.00 % 112 TCG BDC, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS As of December 31, 2020 (dollar amounts in thousands) The geographical composition of investments at fair value as of December 31, 2020 was as follows: Geography Amortized Cost Fair Value % of Fair Value Canada $ 24,206 $ 24,658 1.35 % Cyprus 6,112 6,793 0.37 Luxembourg 32,093 29,970 1.64 United Kingdom 88,885 90,112 4.94 United States 1,771,670 1,674,216 91.70 Total $ 1,922,966 $ 1,825,749 100.00 % The accompanying notes are an integral part of these consolidated financial statements. 113 TCG BDC, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS As of December 31, 2019 (dollar amounts in thousands) Investments—non-controlled/non-affiliated (1) Footnotes Industry Reference Rate & Spread (2) Interest Rate (2) Acquisition Date Maturity Date Par/ Principal Amount ** Amortized Cost (4) Fair Value (5) % of Net Assets First Lien Debt (77.29%) Aero Operating, LLC (Dejana Industries, Inc.) ^+* (2) (3) (13) Business Services L + 7.25% 9.16% 1/5/2018 12/29/2022 $ 3,517 $ 3,491 $ 3,449 0.34 % Airnov, Inc. ^ (2) (3) (13) Containers, Packaging & Glass L + 5.25% 7.16% 12/20/2019 12/19/2025 12,813 12,602 12,601 1.25 Alpha Packaging Holdings, Inc. +* (2) (3) Containers, Packaging & Glass L + 4.25% 6.35% 6/26/2015 5/12/2020 2,836 2,836 2,822 0.28 Alpine SG, LLC ^* (2) (3) High Tech Industries L + 6.50% 8.43% 2/2/2018 11/16/2022 15,301 15,187 15,244 1.51 American Physician Partners, LLC ^+* (2) (3) (13) Healthcare & Pharmaceuticals L + 6.50% 8.58% 1/7/2019 12/21/2021 38,235 37,868 38,110 3.79 AMS Group HoldCo, LLC ^+* (2) (3) (13) Transportation: Cargo L + 6.00% 8.07% 9/29/2017 9/29/2023 30,808 30,361 30,457 3.03 Analogic Corporation ^+* (2) (3) (13) Healthcare & Pharmaceuticals L + 6.00% 7.70% 6/22/2018 6/22/2024 34,784 34,190 34,784 3.46 Anchor Hocking, LLC ^ (2) (3) Durable Consumer Goods L + 8.75% 10.66% 1/25/2019 1/25/2024 10,707 10,410 10,359 1.03 Apptio, Inc. ^ (2) (3) (13) Software L + 7.25% 8.96% 1/10/2019 1/10/2025 35,541 34,874 35,237 3.50 Aurora Lux FinCo S.Á.R.L. (Luxembourg) ^ (2) (3) (7) Software L + 6.00% 7.93% 12/24/2019 12/24/2026 37,500 36,563 36,563 3.63 Avenu Holdings, LLC +* (2) (3) Sovereign & Public Finance L + 5.25% 7.35% 9/28/2018 9/28/2024 38,665 38,125 37,227 3.70 Barnes & Noble, Inc. ^ (2) (3) (11) Retail L + 5.50% 9.07% 8/7/2019 8/7/2024 17,637 17,225 17,196 1.71 BMS Holdings III Corp. ^* (2) (3) (13) Construction & Building L + 5.25% 7.35% 9/30/2019 9/30/2026 11,638 11,274 11,591 1.15 Brooks Equipment Company, LLC +* (2) (3) Construction & Building L + 5.00% 6.91% 6/26/2015 8/29/2020 2,443 2,439 2,441 0.24 Capstone Logistics Acquisition, Inc. +* (2) (3) Transportation: Cargo L + 4.50% 6.20% 6/26/2015 10/7/2021 3,976 3,962 3,894 0.39 Captive Resources Midco, LLC ^* (2) (3) (13) Banking, Finance, Insurance & Real Estate L + 6.00% 8.18% 6/30/2015 5/31/2025 30,301 29,814 30,158 3.00 Central Security Group, Inc. +* (2) (3) Consumer Services L + 5.63% 7.33% 6/26/2015 10/6/2021 22,634 22,531 19,466 1.93 Chartis Holding, LLC ^ (2) (3) (13) Business Services L + 5.25% 7.28% 5/1/2019 5/1/2025 15,926 15,538 15,723 1.56 Chemical Computing Group ULC (Canada) ^* (2) (3) (7) (13) Software L + 5.25% 6.95% 8/30/2018 8/30/2023 14,674 14,567 14,539 1.44 CircusTrix Holdings, LLC ^+* (2) (3) (13) Hotel, Gaming & Leisure L + 5.50% 7.20% 2/2/2018 12/6/2021 9,397 9,342 9,242 0.92 Comar Holding Company, LLC ^+* (2) (3) (13) Containers, Packaging & Glass L + 5.25% 6.96% 6/18/2018 6/18/2024 27,783 27,254 27,101 2.69 Cority Software Inc. (Canada) ^ (2) (3) (7) (13) Software L + 5.50% 7.57% 7/2/2019 7/2/2026 27,000 26,435 26,400 2.62 Dent Wizard International Corporation + (2) (3) Automotive L + 4.00% 5.70% 4/28/2015 4/7/2022 877 877 873 0.09 Derm Growth Partners III, LLC (Dermatology Associates) ^ (2) (3) (9) Healthcare & Pharmaceuticals L + 6.25% (100% PIK) 8.16% 5/31/2016 5/31/2022 56,310 56,026 39,716 3.95 DermaRite Industries, LLC ^* (2) (3) (13) Healthcare & Pharmaceuticals L + 7.00% 8.70% 3/3/2017 3/3/2022 22,647 22,481 21,690 2.16 Digicel Limited (Jamaica) ^ (7) Telecommunications 6.00% 6.00% 7/23/2019 4/15/2021 250 202 195 0.02 Dimensional Dental Management, LLC ^ (2) (3) (11) (13) Healthcare & Pharmaceuticals L + 5.75% 10.00% 2/12/2016 2/12/2021 1,224 1,199 1,224 0.12 Dimensional Dental Management, LLC ^ (2) (3) (9) (11) Healthcare & Pharmaceuticals L + 5.75% 8.66% 2/12/2016 7/22/2020 33,674 33,301 — — 114 TCG BDC, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued) As of December 31, 2019 (dollar amounts in thousands) Investments—non-controlled/non-affiliated (1) Footnotes Industry Reference Rate & Spread (2) Interest Rate (2) Acquisition Date Maturity Date Par/ Principal Amount ** Amortized Cost (4) Fair Value (5) % of Net Assets First Lien Debt (77.29%) (continued) Direct Travel, Inc. ^+* (2) (3) Hotel, Gaming & Leisure L + 6.50% 8.41% 10/14/2016 12/1/2021 $ 36,805 $ 36,515 $ 36,757 3.65 % DTI Holdco, Inc. * (2) (3) High Tech Industries L + 4.75% 6.68% 12/18/2018 9/30/2023 1,974 1,871 1,841 0.18 Emergency Communications Network, LLC ^+* (2) (3) Telecommunications L + 6.25% 8.14% 6/1/2017 6/1/2023 24,375 24,233 22,323 2.22 Ensono, LP * (2) (3) Telecommunications L + 5.25% 6.95% 4/30/2018 6/27/2025 8,537 8,452 8,537 0.85 Ethos Veterinary Health LLC ^+ (2) (3) (13) Consumer Services L + 4.75% 6.45% 5/17/2019 5/15/2026 10,869 10,744 10,807 1.07 EvolveIP, LLC ^+* (2) (3) Telecommunications L + 5.75% 7.45% 11/26/2019 6/7/2023 34,420 33,923 34,420 3.42 Frontline Technologies Holdings, LLC ^* (2) (3) Software L + 5.75% 7.85% 9/18/2017 9/18/2023 48,242 47,949 48,705 4.84 FWR Holding Corporation ^+* (2) (3) (13) Beverage, Food & Tobacco L + 5.50% 7.29% 8/21/2017 8/21/2023 48,630 47,950 48,393 4.81 Green Energy Partners/Stonewall, LLC +* (2) (3) Energy: Electricity L + 5.50% 7.60% 6/26/2015 11/10/2021 19,550 19,374 18,034 1.79 GRO Sub Holdco, LLC (Grand Rapids) ^+* (2) (3) (13) Healthcare & Pharmaceuticals L + 6.00% 8.10% 2/28/2018 2/22/2023 6,465 6,380 6,085 0.60 Hummel Station, LLC +* (2) (3) Energy: Electricity L + 6.00% 7.70% 2/3/2016 10/27/2022 14,641 14,169 12,896 1.28 Hydrofarm, LLC ^ (2) (3) Wholesale L+10.00% (30% Cash / 70% PIK) 11.91% 5/15/2017 5/12/2022 21,556 21,254 13,647 1.36 iCIMS, Inc. ^ (2) (3) (13) Software L + 6.50% 8.29% 9/12/2018 9/12/2024 23,930 23,507 23,927 2.38 Innovative Business Services, LLC ^* (2) (3) (13) High Tech Industries L + 5.50% 7.53% 4/5/2018 4/5/2023 16,143 15,782 15,880 1.58 K2 Insurance Services, LLC ^+* (2) (3) (13) Banking, Finance, Insurance & Real Estate L + 5.00% 7.19% 7/3/2019 7/1/2024 22,027 21,487 22,062 2.19 Kaseya Inc. ^ (2) (3) (13) High Tech Industries L + 5.50%, 1.00% PIK 8.41% 5/3/2019 5/2/2025 19,545 19,145 19,590 1.95 Legacy.com, Inc. ^ (2) (3) (11) High Tech Industries L + 9.98% 11.77% 3/20/2017 3/20/2023 17,080 16,832 16,325 1.62 Lifelong Learner Holdings, LLC ^* (2) (3) (13) Business Services L + 5.75% 7.51% 10/18/2019 10/18/2026 23,523 22,971 23,240 2.31 Liqui-Box Holdings, Inc. ^ (2) (3) Containers, Packaging & Glass L + 4.50% 6.41% 6/3/2019 6/3/2024 — (26) (37) — Mailgun Technologies, Inc. ^ (2) (3) (13) High Tech Industries L + 5.00% 7.10% 3/26/2019 3/26/2025 11,853 11,607 11,655 1.16 National Carwash Solutions, Inc. ^+ (2) (3) (13) Automotive L + 6.00% 7.69% 8/7/2018 4/28/2023 9,511 9,342 9,428 0.94 National Technical Systems, Inc. ^+* (2) (3) (13) Aerospace & Defense L + 6.25% 7.94% 6/26/2015 6/12/2021 27,950 27,801 27,920 2.77 NES Global Talent Finance US, LLC (United Kingdom) +* (2) (3) (7) Energy: Oil & Gas L + 5.50% 7.43% 5/9/2018 5/11/2023 9,890 9,762 9,763 0.97 Nexus Technologies, LLC * (2) (3) High Tech Industries L + 5.50%, 1.50% PIK 8.91% 12/11/2018 12/5/2023 6,172 6,119 5,621 0.56 NMI AcquisitionCo, Inc. ^+* (2) (3) (13) High Tech Industries L + 5.75% 7.45% 9/6/2017 9/6/2022 50,067 49,471 49,888 4.96 115 TCG BDC, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued) As of December 31, 2019 (dollar amounts in thousands) Investments—non-controlled/non-affiliated (1) Footnotes Industry Reference Rate & Spread (2) Interest Rate (2) Acquisition Date Maturity Date Par/ Principal Amount ** Amortized Cost (4) Fair Value (5) % of Net Assets First Lien Debt (77.29%) (continued) Northland Telecommunications Corporation ^* (2) (3) (13) Media: Broadcast & Subscription L + 5.75% 7.46% 10/1/2018 10/1/2025 $ 46,603 $ 45,916 $ 46,529 4.62 % Paramit Corporation +* (2) (3) Capital Equipment L + 4.50% 6.22% 5/3/2019 5/3/2025 6,298 6,241 6,268 0.62 PF Growth Partners, LLC ^+* (2) (3) (13) Hotel, Gaming & Leisure L + 5.00% 6.70% 7/1/2019 7/11/2025 7,161 7,045 7,135 0.71 Plano Molding Company, LLC ^ (2) (3) Hotel, Gaming & Leisure L + 7.50% 9.20% 5/1/2015 5/12/2021 14,752 14,645 14,085 1.40 PPC Flexible Packaging, LLC +* (2) (3) (13) Containers, Packaging & Glass L + 5.50% 7.19% 11/23/2018 11/23/2024 13,591 13,404 13,464 1.34 PPT Management Holdings, LLC ^ (2) (3) Healthcare & Pharmaceuticals L + 6.00%, 0.75% PIK 8.66% 12/15/2016 12/16/2022 27,744 27,627 23,155 2.30 Pretium Packaging, LLC ^ (2) (3) Containers, Packaging & Glass L + 5.00% 6.91% 8/15/2019 11/14/2023 7,700 7,631 7,700 0.77 PricewaterhouseCoopers Public Sector LLP ^ (2) (3) (13) Aerospace & Defense L + 3.25% 5.16% 5/1/2018 5/1/2023 — (105) (46) — Product Quest Manufacturing, LLC ^ (2) (3) (9) (13) Containers, Packaging & Glass L + 6.75% 5.75% 9/21/2017 3/31/2020 840 840 840 0.08 Propel Insurance Agency, LLC ^ (2) (3) Banking, Finance, Insurance & Real Estate L + 4.25% 6.35% 6/1/2018 6/1/2024 2,363 2,347 2,353 0.23 QW Holding Corporation (Quala) ^+* (2) (3) (13) Environmental Industries L + 5.75% 7.73% 8/31/2016 8/31/2022 43,358 42,802 43,106 4.28 Redwood Services Group, LLC ^ (2) (3) High Tech Industries L + 6.00% 7.91% 11/13/2018 6/6/2023 8,427 8,363 8,342 0.83 Riveron Acquisition Holdings, Inc. ^+* (2) (3) Banking, Finance, Insurance & Real Estate L + 6.00% 7.91% 5/22/2019 5/22/2025 19,968 19,605 19,587 1.95 RSC Acquisition, Inc. ^ (2) (3) (13) Banking, Finance, Insurance & Real Estate L + 5.50% 7.41% 11/1/2019 11/1/2026 11,594 11,222 11,449 1.14 Sapphire Convention, Inc. (Smart City) *+^ (2) (3) (13) Telecommunications L + 5.25% 7.27% 11/20/2018 11/20/2025 28,577 28,009 28,329 2.81 Smile Doctors, LLC ^*+ (2) (3) (13) Healthcare & Pharmaceuticals L + 6.00% 8.07% 10/6/2017 10/6/2022 22,227 22,136 21,996 2.19 Sovos Brands Intermediate, Inc. +* (2) (3) Beverage, Food & Tobacco L + 5.00% 7.20% 11/16/2018 11/20/2025 19,899 19,714 19,750 1.96 SPay, Inc. ^+* (2) (3) (13) Hotel, Gaming & Leisure L + 5.75% 7.46% 6/15/2018 6/17/2024 20,512 20,179 18,694 1.86 Superior Health Linens, LLC ^+* (2) (3) (13) Business Services L + 7.50%, 0.50% PIK 9.91% 9/30/2016 9/30/2021 21,805 21,666 19,933 1.98 Surgical Information Systems, LLC ^+* (2) (3) (11) High Tech Industries L + 4.50% 7.47% 4/24/2017 4/24/2023 26,168 26,007 25,715 2.55 T2 Systems, Inc. ^+* (2) (3) (13) Transportation: Consumer L + 6.75% 8.85% 9/28/2016 9/28/2022 35,648 35,159 35,648 3.54 Tank Holding Corp. ^ (2) (3) (13) Capital Equipment L + 4.00% 5.76% 3/26/2019 3/26/2024 — — — — The Leaders Romans Bidco Limited (United Kingdom) ^ (2) (3) (7) Banking, Finance, Insurance & Real Estate L + 6.75%, 3.50% PIK 11.01% 7/23/2019 6/30/2024 £ 19,577 24,865 26,531 2.64 Transform SR Holdings, LLC ^ (2) (3) Retail L + 7.25% 9.18% 2/11/2019 2/12/2024 19,050 18,887 18,860 1.87 Trump Card, LLC ^+* (2) (3) (13) Transportation: Cargo L + 5.50% 7.63% 6/26/2018 4/21/2022 7,918 7,881 7,869 0.78 116 TCG BDC, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued) As of December 31, 2019 (dollar amounts in thousands) Investments—non-controlled/non-affiliated (1) Footnotes Industry Reference Rate & Spread (2) Interest Rate (2) Acquisition Date Maturity Date Par/ Principal Amount ** Amortized Cost (4) Fair Value (5) % of Net Assets First Lien Debt (77.29%) (continued) TSB Purchaser, Inc. (Teaching Strategies, LLC) ^+* (2) (3) (13) Media: Advertising, Printing & Publishing L + 6.00% 8.10% 5/14/2018 5/14/2024 $ 28,294 $ 27,726 $ 28,105 2.79 Turbo Buyer, Inc. ^ (2) (3) (13) Automotive L + 6.00% 7.69% 12/2/2019 12/2/2025 27,897 27,033 27,439 2.73 Tweddle Group, Inc. ^ (2) (3) Media: Advertising, Printing & Publishing L + 4.50% 6.20% 9/17/2018 9/17/2023 1,908 1,885 1,859 0.18 U.S. Acute Care Solutions, LLC +* (2) (3) Healthcare & Pharmaceuticals L + 5.00% 6.91% 2/21/2019 5/15/2021 4,265 4,230 4,053 0.40 Unifrutti Financing PLC (Cyprus) ^ (2) (3) (7) Beverage, Food & Tobacco 7.50%, 1.00% PIK 8.50% 9/15/2019 9/15/2026 € 4,530 4,746 4,836 0.48 USLS Acquisition, Inc. ^* (2) (3) (13) Business Services L + 5.75% 7.85% 11/30/2018 11/30/2024 22,139 21,741 21,674 2.15 VRC Companies, LLC ^+* (2) (3) (13) Business Services L + 6.50% 8.21% 3/31/2017 3/31/2023 57,164 56,674 57,106 5.67 Westfall Technik, Inc. ^ (2) (3) (13) Chemicals, Plastics & Rubber L + 5.75% 7.66% 9/13/2018 9/13/2024 27,973 27,432 26,962 2.68 WP CPP Holdings, LLC (CPP) ^ (2) (3) Aerospace & Defense L + 3.75% 5.66% 7/18/2019 4/30/2025 20,000 19,817 19,826 1.97 Zemax Software Holdings, LLC ^* (2) (3) (13) Software L + 5.75% 7.85% 6/25/2018 6/25/2024 10,146 10,013 10,087 1.00 Zenith Merger Sub, Inc. ^ (2) (3) (13) Business Services L + 5.25% 7.35% 12/13/2017 12/13/2023 16,530 16,321 16,405 1.63 First Lien Debt Total $ 1,707,292 $ 1,641,653 163.10 % Second Lien Debt (11.04%) Access CIG, LLC * (2) (3) Business Services L + 7.75% 9.44% 2/14/2018 2/27/2026 $ 2,700 $ 2,687 $ 2,681 0.27 % Aimbridge Acquisition Co., Inc. ^* (2) (3) Hotel, Gaming & Leisure L + 7.50% 9.19% 2/1/2019 2/1/2027 9,241 9,089 9,160 0.91 AQA Acquisition Holding, Inc. ^ (2) (3) High Tech Industries L + 8.00% 10.09% 10/1/2018 5/24/2024 40,000 39,670 39,740 3.95 Brave Parent Holdings, Inc. ^* (2) (3) Software L + 7.50% 9.43% 10/3/2018 4/19/2026 19,062 18,660 18,261 1.81 Higginbotham Insurance Agency, Inc. ^ (2) (3) Banking, Finance, Insurance & Real Estate L + 7.50% 9.20% 12/3/2019 12/19/2025 2,500 2,475 2,493 0.25 Jazz Acquisition, Inc. ^ (2) (3) Aerospace & Defense L + 8.00% 10.10% 6/13/2019 6/18/2027 23,450 23,117 23,225 2.31 Le Tote, Inc. ^ (2) (3) Retail L + 6.75% 8.66% 11/8/2019 11/8/2024 7,143 6,969 6,964 0.69 Outcomes Group Holdings, Inc. ^* (2) (3) Business Services L + 7.50% 9.41% 10/23/2018 10/26/2026 4,500 4,490 4,487 0.45 Pathway Vet Alliance, LLC ^ (2) (3) (13) Consumer Services L + 8.50% 10.22% 11/14/2019 12/23/2025 8,050 7,814 8,074 0.80 Pharmalogic Holdings Corp. ^ (2) (3) Healthcare & Pharmaceuticals L + 8.00% 9.70% 6/7/2018 12/11/2023 800 797 796 0.08 Quartz Holding Company (QuickBase, Inc.) ^ (2) (3) Software L + 8.00% 9.71% 4/2/2019 4/2/2027 11,900 11,677 11,662 1.16 Reladyne, Inc. ^+* (2) (3) (13) Wholesale L + 9.50% 11.60% 4/19/2018 1/21/2023 12,242 12,080 12,234 1.22 Tank Holding Corp. ^* (2) (3) Capital Equipment L + 8.25% 11.04% 3/26/2019 3/26/2027 37,380 36,771 37,223 3.70 Ultimate Baked Goods MIDCO, LLC (Rise Baking) ^ (2) (3) Beverage, Food & Tobacco L + 8.00% 9.70% 8/9/2018 8/9/2026 8,333 8,187 8,243 0.82 Watchfire Enterprises, Inc. ^ (2) (3) Media: Advertising, Printing & Publishing L + 8.00% 9.95% 10/2/2013 10/2/2021 7,000 6,966 6,998 0.70 WP CPP Holdings, LLC (CPP) ^* (2) (3) Aerospace & Defense L + 7.75% 9.68% 7/18/2019 4/30/2026 39,500 39,125 38,833 3.86 117 TCG BDC, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued) As of December 31, 2019 (dollar amounts in thousands) Investments—non-controlled/non-affiliated (1) Footnotes Industry Reference Rate & Spread (2) Interest Rate (2) Acquisition Date Maturity Date Par/ Principal Amount ** Amortized Cost (4) Fair Value (5) % of Net Assets Second Lien Debt (11.04%) (continued) Zywave, Inc. ^ (2) (3) High Tech Industries L + 9.00% 10.94% 11/18/2016 11/17/2023 $ 3,468 $ 3,432 $ 3,458 0.34 Second Lien Debt Total $ 234,006 $ 234,532 23.32 % Investments—non-controlled/non-affiliated (1) Footnotes Industry Acquisition Date Shares/ Units Cost Fair Value (5) Percentage of Net Assets Equity Investments (0.98%) ANLG Holdings, LLC ^ (6) Healthcare & Pharmaceuticals 6/22/2018 880 $ 880 $ 973 0.10 % Avenu Holdings, LLC ^ (6) Sovereign & Public Finance 9/28/2018 172 172 154 0.02 Chartis Holding, LLC ^ (6) Business Services 5/1/2019 433 433 589 0.06 CIP Revolution Holdings, LLC ^ (6) Media: Advertising, Printing & Publishing 8/19/2016 318 318 444 0.04 Cority Software Inc. (Canada) ^ (6) Software 7/2/2019 250 250 306 0.03 DecoPac, Inc. ^ (6) Non-durable Consumer Goods 9/29/2017 1,500 1,500 1,999 0.20 Derm Growth Partners III, LLC (Dermatology Associates) ^ (6) Healthcare & Pharmaceuticals 5/31/2016 1,000 1,000 — — GRO Sub Holdco, LLC (Grand Rapids) ^ (6) Healthcare & Pharmaceuticals 3/29/2018 500 500 137 0.01 K2 Insurance Services, LLC ^ (6) Banking, Finance, Insurance & Real Estate 7/3/2019 433 433 486 0.05 Legacy.com, Inc. ^ (6) High Tech Industries 3/20/2017 1,500 1,500 783 0.08 Mailgun Technologies, Inc. ^ (6) High Tech Industries 3/26/2019 424 424 605 0.06 North Haven Goldfinch Topco, LLC ^ (6) Containers, Packaging & Glass 6/18/2018 2,315 2,315 2,542 0.25 Paramit Corporation ^ (6) Capital Equipment 6/17/2019 150 500 501 0.05 PPC Flexible Packaging, LLC ^ (6) Containers, Packaging & Glass 2/1/2019 965 965 1,174 0.12 Rough Country, LLC ^ (6) Durable Consumer Goods 5/25/2017 755 755 1,225 0.12 SiteLock Group Holdings, LLC ^ (6) High Tech Industries 4/5/2018 446 446 587 0.06 T2 Systems Parent Corporation ^ (6) Transportation: Consumer 9/28/2016 556 556 628 0.06 Tailwind HMT Holdings Corp. ^ (6) Energy: Oil & Gas 11/17/2017 20 2,000 2,211 0.22 Tank Holding Corp. ^ (6) Capital Equipment 3/26/2019 850 850 1,035 0.10 Turbo Buyer, Inc. ^ (6) Automotive 12/2/2019 1,925 1,925 1,925 0.19 Tweddle Holdings, Inc. ^* (6) Media: Advertising, Printing & Publishing 9/17/2018 17 — — — USLS Acquisition, Inc. ^ (6) Business Services 11/30/2018 641 641 720 0.07 Zenith American Holding, Inc. ^ (6) Business Services 12/13/2017 1,564 782 1,490 0.15 Zillow Topco LP ^ (6) Software 6/25/2018 313 312 358 0.04 Equity Investments Total $ 19,457 $ 20,872 2.08 % Total investments—non-controlled/non-affiliated $ 1,960,755 $ 1,897,057 188.50 % 118 TCG BDC, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued) As of December 31, 2019 (dollar amounts in thousands) Investments—controlled/affiliated Footnotes Industry Reference Rate & Spread (2) Interest Rate (2) Acquisition Date Maturity Date Par/ Principal Amount ** Amortized Cost (4) Fair Value (5) % of Net Assets First Lien Debt (1.01%) SolAero Technologies Corp. (A1 Term Loan) ^ (2) (3) (9) (10) Telecommunications L + 8.00% (100% PIK) 9.91% 4/12/2019 10/12/2022 $ 3,166 $ 3,166 $ 3,166 0.31 % SolAero Technologies Corp. (A2 Term Loan) ^ (2) (3) (9) (10) Telecommunications L + 8.00% (100% PIK) 9.91% 4/12/2019 10/12/2022 8,707 8,707 8,707 0.87 SolAero Technologies Corp. (Priority Term Loan) ^ (2) (3) (10) (13) Telecommunications L + 6.00% 7.91% 4/12/2019 10/12/2022 9,612 9,507 9,612 0.96 First Lien Debt Total $ 21,380 $ 21,485 2.14 % Investments—controlled/affiliated Footnotes Industry Acquisition Date Shares/ Units Cost Fair Value (5) % of Net Assets Equity Investments (—) SolAero Technologies Corp. ^ (6) (10) Telecommunications 4/12/2019 3 $ 2,815 $ 826 0.08 % Equity Investments Total $ 2,815 $ 826 0.41 % Investments—controlled/affiliated Industry Reference Rate & Spread (2) Interest Rate (2) Acquisition Date Maturity Date Par Amount/ LLC Interest Cost Fair Value (7) % of Net Assets Investment Fund (9.63%) Middle Market Credit Fund, Mezzanine Loan ^ (2) (7) (8) (10) Investment Fund L + 9.00% 10.97% 6/30/2016 5/18/2021 $ 93,000 $ 93,000 $ 93,000 9.24 % Middle Market Credit Fund, LLC, Subordinated Loan and Member's Interest ^ (7) (10) Investment Fund N/A 0.001% 2/29/2016 3/1/2021 123,500 123,501 111,596 11.09 % Investment Fund Total $ 216,501 $ 204,596 20.33 % Total investments—controlled/affiliated $ 240,696 $ 226,907 22.88 % Total investments $ 2,201,451 $ 2,123,964 211.38 % ^ Denotes that all or a portion of the assets are owned by TCG BDC, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “TCG BDC” or the “Company”). The Company has entered into a senior secured revolving credit facility (as amended, the “Credit Facility”). The lenders of the Credit Facility have a first lien security interest in substantially all of the portfolio investments held by the Company (see Note 6, Borrowings). Accordingly, such assets are not available to creditors of TCG BDC SPV LLC (the “SPV”) or Carlyle Direct Lending CLO 2015-1R LLC (formerly known as Carlyle GMS Finance MM CLO 2015-1 LLC) (the “2015-1 Issuer”). + Denotes that all or a portion of the assets are owned by the Company’s wholly owned subsidiary, the SPV. The SPV has entered into a senior secured revolving credit facility (as amended, the “SPV Credit Facility” and, together with the Credit Facility, the “Facilities”). The lenders of the SPV Credit Facility have a first lien security interest in substantially all of the assets of the SPV (see Note 6, Borrowings). Accordingly, such assets are not available to creditors of the Company or the 2015-1 Issuer. * Denotes that all or a portion of the assets are owned by the Company's wholly owned subsidiary, the 2015-1 Issuer, and secure the notes issued in connection with a term debt securitization completed by the Company on June 26, 2015 (see Note 7, Notes Payable). Accordingly, such assets are not available to the creditors of the Company or the SPV. ** Par amount is denominated in USD ("$") unless otherwise noted, as denominated in Euro (“€”) or British Pound (“£”) (1) Unless otherwise indicated, issuers of debt and equity investments held by the Company are domiciled in the United States. Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”), the Company would be deemed to “control” a portfolio company if the Company owned more than 25% of its outstanding voting 119 TCG BDC, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued) As of December 31, 2019 (dollar amounts in thousands) securities and/or held the power to exercise control over the management or policies of the portfolio company. As of December 31, 2019, the Company does not “control” any of these portfolio companies. Under the Investment Company Act, the Company would be deemed an “affiliated person” of a portfolio company if the Company owns 5% or more of the portfolio company’s outstanding voting securities. As of December 31, 2020, the Company is not an “affiliated person” of any of these portfolio companies. Certain portfolio company investments are subject to contractual restrictions on sales. (2) Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR (“L”) or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, the Company has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2019. As of December 31, 2019, the reference rates for our variable rate loans were the 30-day LIBOR at 1.75%, the 90-day LIBOR at 1.91% and the 180-day LIBOR at 1.91%. (3) Loan includes interest rate floor feature, which is generally 1.00%. (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. (5) Fair value is determined in good faith by or under the direction of the Board of Directors of the Company (see Note 2, Significant Accounting Policies, and Note 3, Fair Value Measurements), pursuant to the Company’s valuation policy. The fair value of all first lien and second lien debt investments, equity investments and the investment fund was determined using significant unobservable inputs. (6) Security acquired in transaction exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act, unless otherwise noted. As of December 31, 2019, the aggregate fair value of these securities is $21,698, or 2.49% of the Company’s net assets. (7) The Company has determined the indicated investments are non-qualifying assets under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company’s total assets. (8) Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company/investment fund. (9) Loan was on non-accrual status as of December 31, 2019. (10) Under the Investment Company Act, the Company is deemed to be an “affiliated person” of and “control” this investment fund because the Company owns more than 25% of the investment fund’s outstanding voting securities and/or has the power to exercise control over management or policies of such investment fund. See Note 5, Middle Market Credit Fund, LLC, for more details. Transactions related to investments in controlled affiliates for the year ended December 31, 2019, were as follows: Investments—controlled/affiliated Fair Value as of December 31, 2018 Additions/Purchases Reductions/Sales/ Paydowns Net Realized Gain (Loss) Net Change in Unrealized Appreciation (Depreciation) Fair Value as of December 31, 2019 Dividend and Interest Income Middle Market Credit Fund, LLC, Mezzanine Loan $ 112,000 $ 126,200 $ (145,200) $ — $ — $ 93,000 $ 12,181 Middle Market Credit Fund, LLC, Subordinated Loan and Member’s Interest 110,295 5,500 — — (4,199) 111,596 15,750 Total investments—controlled/affiliated $ 222,295 $ 131,700 $ (145,200) $ — $ (4,199) $ 204,596 $ 27,931 Investments—controlled/affiliated Fair Value as of December 31, 2018 Additions/Purchases Reductions/Sales/ Paydowns Net Realized Gain (Loss) Net Change in Unrealized Appreciation (Depreciation) Fair Value as of December 31, 2019 Dividend and Interest Income SolAero Technologies Corp. $ 17,968 $ — $ (18,319) $ (9,091) $ 9,442 $ — $ — SolAero Technologies Corp. (Priority Term Loan) — 9,630 — — — 9,630 226 SolAero Technologies Corp. (A1 Term Loan) — 3,166 — — — 3,166 — SolAero Technologies Corp. (A2 Term Loan) — 8,707 — — — 8,707 — Solaero Technology Corp. (Equity) — 2,815 — — (554) 2,261 — Total investments—controlled/affiliated $ 17,968 $ 24,318 $ (18,319) $ (9,091) $ 8,888 $ 23,764 $ 226 (11) In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among lenders as follows: Barnes & Noble, Inc. (1.83%), Dimensional Dental Management, LLC (4.87%), Legacy.com Inc. (3.73%) and Surgical Information Systems, LLC (1.13%) . Pursuant to the agreement among lenders in respect of this loan, this investment represents 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 payments. 120 TCG BDC, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued) As of December 31, 2019 (dollar amounts in thousands) (12) Under the Investment Company Act, the Company is deemed an “affiliated person” of this portfolio company because the Company owns 5% or more of the portfolio company’s outstanding voting securities. Transactions related to investments in non-controlled affiliates for the year ended December 31, 2019, were as follows: Investments—non-controlled/affiliated Fair Value as of December 31, 2018 Purchases/ Paid-in-kind interest Sales/ Paydowns Net Accretion of Discount Net Realized Gain (Loss) Net Change in Unrealized Appreciation (Depreciation) Fair Value as of December 31, 2019 Interest Income TwentyEighty, Inc. - Revolver $ — $ — $ — $ 1 $ — $ (1) $ — $ — TwentyEighty, Inc. - (Term A Loans) 316 — (415) 1 101 (1) — 19 TwentyEighty, Inc. - (Term B Loans) 6,855 230 (7,102) 76 — (59) — 498 TwentyEighty, Inc. - (Term C Loans) 6,981 489 (7,397) 179 — (252) — 692 TwentyEighty Investors LLC (Equity) 4,391 — — — 7,990 (4,391) — — Total investments—non-controlled/affiliated $ 18,543 $ 719 $ (14,914) $ 257 $ 8,091 $ (4,704) $ — $ 1,209 (13) As of December 31, 2019, the Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans: Investments—non-controlled/non-affiliated Type Unused Fee Par/ Principal Amount Fair Value First and Second Lien Debt—unfunded delayed draw and revolving term loans commitments Aero Operating, LLC (Dejana Industries, Inc.) Revolver 1.00% $ 159 $ (3) Airnov, Inc. Revolver 0.50 1,250 (19) American Physician Partners, LLC Revolver 0.50 1,500 (5) AMS Group HoldCo, LLC Revolver 0.50 2,315 (25) Analogic Corporation Revolver 0.50 3,029 — Apptio, Inc. Revolver 0.50 2,367 (19) BMS Holdings III Corp. Delayed Draw 1.00 3,333 (10) Captive Resources Midco, LLC Revolver 0.50 2,143 (9) Chartis Group, LLC Revolver 0.50 2,401 (20) Chartis Group, LLC Delayed Draw 0.50 6,402 (52) Chemical Computing Group ULC (Canada) Revolver 0.50 903 (8) Comar Holding Company, LLC Delayed Draw 1.00 5,136 (103) Comar Holding Company, LLC Revolver 0.50 1,168 (23) Cority Software, Inc. (Canada) Revolver 0.50 3,000 (60) DermaRite Industries, LLC Revolver 0.50 807 (33) Dimensional Dental Management, LLC Revolver 0.50 48 — Ethos Veterinary Health, LLC Delayed Draw 1.00 2,696 (12) Evolve IP Revolver 0.50 2,941 — Evolve IP Delayed Draw 1.00 3,922 — FWR Holding Corporation Delayed Draw 1.00 87 — FWR Holding Corporation Revolver 0.50 667 (3) GRO Sub Holdco, LLC (Grand Rapids) Revolver 0.50 1,071 (54) iCIMS, Inc. Revolver 0.50% 1,252 — Innovative Business Services, LLC Revolver 0.50 2,232 (32) 121 TCG BDC, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued) As of December 31, 2019 (dollar amounts in thousands) Investments—non-controlled/non-affiliated Type Unused Fee Par/ Principal Amount Fair Value K2 Insurance Services, LLC Revolver 0.50% $ 2,290 $ 3 K2 Insurance Services, LLC Delayed Draw 1.00 5,344 6 Kaseya Inc. Revolver 0.75 661 1 Kaseya Inc. Delayed Draw 0.75 1,918 4 Lifelong Learner Holdings, LLC Revolver 0.50 1,901 (19) Lifelong Learner Holdings, LLC Delayed Draw — 2,878 (29) Liqui-Box Holdings, Inc. Revolver 0.50 2,630 (37) Mailgun Technologies, Inc. Revolver 0.50 1,342 (20) National Car Wash Solutions, LP Revolver 0.50 310 (2) National Car Wash Solutions, LP Delayed Draw 1.00 1,111 (8) National Technical Systems, Inc. Revolver 0.50 2,500 (2) NMI AcquisitionCo, Inc. Revolver 0.50 1,280 (4) Northland Telecommunications Corporation Revolver 0.50 2,960 (4) Pathway Vet Alliance, LLC Delayed Draw 1.00 7,950 12 PF Growth Partners, LLC Delayed Draw 1.00 1,028 (3) PPC Flexible Packaging, LLC Revolver 0.50 1,957 (16) PricewaterhouseCoopers Public Sector LLP Revolver 0.50 6,250 (46) QW Holding Corporation (Quala) Delayed Draw 1.00 809 (5) RSC Acquisition, Inc. Revolver 0.50 608 (4) RSC Acquisition, Inc. Delayed Draw 1.00 7,757 (57) Sapphire Convention, Inc. (Smart City Revolver 0.50 4,528 (34) Smile Doctors, LLC Revolver 0.50 707 (7) Smile Doctors, LLC Delayed Draw 1.00 1,477 (14) SolAero Technologies Corp. (Priority Term Loan) Revolver 1.00 542 — SPay, Inc. Revolver 0.50 682 (58) Superior Health Linens, LLC Revolver 0.50 693 (58) T2 Systems, Inc. Revolver 0.50 2,053 — Tank Holding Corp. Revolver 0.50 47 — TSB Purchaser, Inc. (Teaching Strategies, LLC) Revolver 0.50 1,342 (9) The Leaders Romans Bidco Limited (United Kingdom) Delayed Draw 1.69 £ 3,533 (94) Trump Card, LLC Revolver 0.50 369 (2) Turbo Buyer, Inc. Revolver 0.50 2,151 (28) Turbo Buyer, Inc. Delayed Draw 1.00 4,904 (64) USLS Acquisition, Inc. Revolver 0.50 946 (19) VRC Companies, LLC Delayed Draw 0.75 210 — VRC Companies, LLC Revolver 0.50 1,119 (1) Westfall Technik, Inc. Revolver 0.50% 431 (11) Westfall Technik, Inc. Delayed Draw 1.00 12,190 (304) Zemax Software Holdings, LLC Revolver 0.50 1,284 (7) 122 TCG BDC, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued) As of December 31, 2019 (dollar amounts in thousands) Investments—non-controlled/non-affiliated Type Unused Fee Par/ Principal Amount Fair Value Zenith American Holding, Inc. Delayed Draw 1.00% $ 3,189 $ (18) Zenith American Holding, Inc. Revolver 0.50 3,180 (17) Total unfunded commitments $ 149,890 $ (1,465) As of December 31, 2019, investments at fair value consisted of the following: Type Amortized Cost Fair Value % of Fair Value First Lien Debt (excluding First Lien/Last Out) $ 1,649,721 $ 1,585,042 74.63 % First Lien/Last Out Unitranche 78,951 78,096 3.68 Second Lien Debt 234,006 234,532 11.04 Equity Investments 22,272 21,698 1.02 Investment Fund 216,501 204,596 9.63 Total $ 2,201,451 $ 2,123,964 100.00 % The rate type of debt investments at fair value as of December 31, 2019 was as follows: Rate Type Amortized Cost Fair Value % of Fair Value of First and Second Lien Debt Floating Rate $ 1,957,730 $ 1,892,639 99.73 % Fixed Rate 4,948 5,031 0.27 Total $ 1,962,678 $ 1,897,670 100.00 % The industry composition of investments at fair value as of December 31, 2019 was as follows: Industry Amortized Cost Fair Value % of Fair Value Aerospace & Defense $ 109,755 $ 109,758 5.17 % Automotive 39,177 39,665 1.87 Banking, Finance, Insurance & Real Estate 112,248 115,119 5.42 Beverage, Food & Tobacco 80,597 81,222 3.82 Business Services 167,435 167,497 7.89 Capital Equipment 44,362 45,027 2.12 Chemicals, Plastics & Rubber 27,432 26,962 1.27 Construction & Building 13,713 14,032 0.66 Consumer Services 41,089 38,347 1.81 Containers, Packaging & Glass 67,821 68,207 3.21 Durable Consumer Goods 11,165 11,584 0.55 Energy: Electricity 33,543 30,930 1.46 Energy: Oil & Gas 11,762 11,974 0.56 123 TCG BDC, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued) As of December 31, 2019 (dollar amounts in thousands) Industry Amortized Cost Fair Value % of Fair Value Environmental Industries $ 42,802 $ 43,106 2.03 % Healthcare & Pharmaceuticals 248,615 192,719 9.07 High Tech Industries 215,856 215,274 10.13 Hotel, Gaming & Leisure 96,815 95,073 4.48 Investment Fund 216,501 204,596 9.63 Media: Broadcast & Subscription 45,916 46,529 2.19 Media: Advertising, Printing & Publishing 36,895 37,406 1.76 Non-durable Consumer Goods 1,500 1,999 0.09 Retail 43,081 43,020 2.03 Software 224,807 226,045 10.63 Sovereign & Public Finance 38,297 37,381 1.76 Telecommunications 119,014 116,115 5.47 Transportation: Cargo 42,204 42,220 1.99 Transportation: Consumer 35,715 36,276 1.71 Wholesale 33,334 25,881 1.22 Total $ 2,201,451 $ 2,123,964 100.00 % The geographical composition of investments at fair value as of December 31, 2019 was as follows: Geography Amortized Cost Fair Value % of Fair Value Canada $ 41,002 $ 40,939 1.93 % Cyprus 4,746 4,836 0.23 Jamaica 202 195 0.01 Luxembourg 36,563 36,563 1.72 United Kingdom 24,865 26,531 1.25 United States 2,094,073 2,014,900 94.86 Total $ 2,201,451 $ 2,123,964 100.00 % The accompanying notes are an integral part of these consolidated financial statements. 124 Table of Contents TCG BDC, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2020 (dollar amounts in thousands, except per share data) 1. ORGANIZATION TCG BDC, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “TCG BDC” or the “Company”) is a Maryland corporation formed on February 8, 2012, and structured as an externally managed, non-diversified closed-end investment company. The Company is managed by its investment adviser, Carlyle Global Credit Investment Management L.L.C. (“CGCIM” or “Investment Adviser”), a wholly owned subsidiary of The Carlyle Group Inc. The Company has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”). In addition, the Company has elected to be treated, and intends to continue to comply with the requirements to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (together with the rules and regulations promulgated thereunder, the “Code”). The Company’s 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. The Company's core investment strategy focuses on lending to U.S. middle market companies supported by financial sponsors, which the Company defines as companies with approximately $25 million to $100 million of earnings before interest, taxes, depreciation and amortization (“EBITDA”), which the Company believes is a useful proxy for cash flow. 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. The Company seeks to achieve its investment objective primarily through direct origination of secured debt instruments, including first lien senior secured loans (which may include stand-alone first lien loans, first lien/last out loans and “unitranche” loans) and second lien senior secured loans (collectively, “Middle Market Senior Loans”), with a minority of its assets invested in higher yielding investments (which may include unsecured debt, mezzanine debt and investments in equities). The Middle Market Senior Loans are generally made to private U.S. middle market companies that are, in many cases, controlled by private equity firms. Depending on market conditions, the Company expects that between 70% and 80% of the value of its assets will be invested in Middle Market Senior Loans. The Company expects that the composition of its portfolio will change over time given the Investment Adviser’s view on, among other things, the economic and credit environment (including with respect to interest rates) in which the Company is operating. The Company invests primarily in loans to middle market companies whose debt, if rated, is rated below investment grade, and, if not rated, would likely be rated below investment grade if it were rated (that is, below BBB- or Baa3, which is often referred to as “junk”). Exposure to below investment grade instruments involves certain risks, including speculation with respect to the borrower’s capacity to pay interest and repay principal. On May 2, 2013, the Company completed its initial closing of capital commitments (the “Initial Closing”) and subsequently commenced substantial investment operations. Effective March 15, 2017, the Company changed its name from “Carlyle GMS Finance, Inc.” to “TCG BDC, Inc.” On June 19, 2017, the Company closed its initial public offering (“IPO”), issuing 9,454,200 shares of its 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 share. Net of underwriting costs, the Company received cash proceeds of $169,488. Shares of common stock of TCG BDC began trading on the Nasdaq Global Select Market under the symbol “CGBD” on June 14, 2017. Until December 31, 2017, the Company was an “emerging growth company,” as that term is used in the Jumpstart Our Business Startups Act of 2012. As of June 30, 2017, the market value of the common stock held by non-affiliates exceeded $700,000. Accordingly, the Company ceased to be an emerging growth company as of December 31, 2017. The Company is externally managed by the Investment Adviser, an investment adviser registered under the Investment Advisers Act of 1940, as amended. Carlyle Global Credit Administration L.L.C. (“CGCA” or the “Administrator”) provides the administrative services necessary for the Company to operate. Both the Investment Adviser and the Administrator are wholly owned subsidiaries of Carlyle Investment Management L.L.C., a subsidiary of The Carlyle Group Inc. “Carlyle” refers to The Carlyle Group Inc. and its affiliates and its consolidated subsidiaries (other than portfolio companies of its affiliated funds), a global alternative asset manager publicly traded on the Nasdaq Global Select Market under the symbol “CG”. Refer to the sec.gov website for further information on Carlyle. 125 Table of Contents TCG BDC SPV LLC (the “SPV”) is a Delaware limited liability company that was formed on January 3, 2013. The SPV invests in first and second lien senior secured loans. The SPV is a wholly owned subsidiary of the Company and is consolidated in these consolidated financial statements commencing from the date of its formation, January 3, 2013. Effective March 15, 2017, the SPV changed its name from “Carlyle GMS Finance SPV LLC” to “TCG BDC SPV LLC”. On June 26, 2015, the Company completed a $400,000 term debt securitization (the “2015-1 Debt Securitization”). The notes offered in the 2015-1 Debt Securitization (the “2015-1 Notes”) were issued by Carlyle Direct Lending CLO 2015-1R LLC (formerly known as Carlyle GMS Finance MM CLO 2015-1 LLC) (the “2015-1 Issuer”), a wholly owned and consolidated subsidiary of the Company. On August 30, 2018, the 2015-1 Issuer refinanced the 2015-1 Debt Securitization (the “2015-1 Debt Securitization Refinancing”) by redeeming in full the 2015-1 Notes and issuing new notes (the “2015-1R Notes”). The 2015-1R Notes are secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans. Refer to Note 8 to these consolidated financial statements for details. The 2015-1 Issuer is consolidated in these consolidated financial statements commencing from the date of its formation, May 8, 2015. On February 29, 2016, the Company and Credit Partners USA LLC (“Credit Partners”) entered into an amended and restated limited liability company agreement, which was subsequently amended on June 24, 2016 and February 22, 2021 (as amended, the “Limited Liability Company Agreement”) to co-manage Middle Market Credit Fund, LLC (“Credit Fund”). Credit Fund primarily invests in first lien loans of middle market companies. Credit Fund is managed by a six-member board of managers, on which the Company and Credit Partners each have equal representation. The Company and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $250,000 each. Refer to Note 5, Middle Market Credit Fund, LLC, to these consolidated financial statements for details. On May 5, 2020, the Company issued and sold 2,000,000 shares of cumulative convertible preferred stock, par value $0.01 per share (the "Preferred Stock"), to an affiliate of Carlyle in a private placement at a price of $25 per share. See Note 10, Net Assets, for further information about the Preferred Stock. On November 3, 2020, the Company and an investment vehicle managed by Cliffwater Corporate Lending Fund ("CCLF"), an investment vehicle managed by Cliffwater LLC, entered into a limited liability company agreement to co-manage Middle Market Credit Fund II, LLC ("Credit Fund II"). Credit Fund II invests in senior secured loans of middle market companies. Credit Fund II is managed by a four-member board of managers, on which the Company and CCLF each have equal representation. The Company and CCLF have approximately 84.13% and 15.87% economic ownership of Credit Fund II, respectively. The Company contributed certain senior secured debt investments with an aggregate principal balance of approximately $250 million to Credit Fund II in exchange for its 84.13% economic interest and gross cash proceeds of approximately $170 million. See Note 6, Middle Market Credit Fund II, LLC, to these consolidated financial statements for details. As a BDC, the Company is required to comply with certain regulatory requirements. As part of these requirements, the Company must not acquire any assets other than “qualifying assets” specified in the Investment Company Act unless, at the time the acquisition is made, at least 70% of its total assets are qualifying assets (with certain limited exceptions). To qualify as a RIC, the Company must, among other things, meet certain source-of-income and asset diversification requirements and timely distribute to its stockholders generally at least 90% of its investment company taxable income, as defined by the Code, for each year. Pursuant to this election, the Company generally does not have to pay corporate level taxes on any income that it distributes to stockholders, provided that the Company satisfies those requirements. 2. SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The Company is an investment company for the purposes of accounting and financial reporting in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification (“ASC”) Topic 946, Financial Services—Investment Companies (“ASC 946”) . The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, the SPVs and the 2015-1 Issuer. All significant intercompany balances and transactions have been eliminated. U.S. GAAP for an investment company requires investments to be recorded at fair value. The carrying value for all other assets and liabilities approximates their fair value. 126 Table of Contents The annual financial statements have been prepared in accordance with U.S. GAAP for annual financial information and pursuant to the requirements for reporting on Form 10-K and Article 6 of Regulation S-X. In the opinion of management, all adjustments considered necessary for the fair presentation of consolidated financial statements for the years presented have been included. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management’s estimates are based on historical experiences and other factors, including expectations of future events that management believes to be reasonable under the circumstances. It also requires management to exercise judgment in the process of applying the Company’s accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on base management and incentive fees involve a higher degree of judgment and complexity and these assumptions and estimates may be significant to the consolidated financial statements. Actual results could differ from these estimates and such differences could be material. Investments Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment using the specific identification method without regard to unrealized appreciation or depreciation previously recognized, and includes investments charged off during the period, net of recoveries. Net change in unrealized appreciation or depreciation on investments as presented in the accompanying Consolidated Statements of Operations reflects the net change in the fair value of investments, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized. See Note 3 to these consolidated financial statements for further information about fair value measurements. Cash and Cash Equivalents Cash and cash equivalents consist of demand deposits and highly liquid investments (e.g., money market funds, U.S. treasury notes) with original maturities of three months or less. Cash equivalents are carried at amortized cost, which approximates fair value. The Company’s cash and cash equivalents are held with two large financial institutions and cash held in such financial institutions may, at times, exceed the Federal Deposit Insurance Corporation insured limit. Revenue Recognition Interest from Investments and Realized Gain/Loss on Investments Interest income is recorded on an accrual basis and includes the accretion of discounts and amortization of premiums. Discounts from and premiums to par value on debt investments purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of debt investments represents the original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion of discounts and amortization of premiums, if any. 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. 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. Such income is included in interest income in the Consolidated Statements of Operations. As of December 31, 2020 and 2019, the fair value of the loans in the portfolio with PIK provisions was $240,861 and $164,902, respectively. For the years ended December 31, 2020, 2019 and 2018, the Company earned $5,476, $6,596, and $3,239 in PIK income included in interest income in the accompanying Consolidated Statements of Operations. Dividend Income 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. 127 Table of Contents Other Income Other income may include income such as consent, waiver, amendment, unused, underwriting 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. Such fees are recognized as income when earned or the services are rendered. The Company may receive fees for guaranteeing the outstanding debt of a portfolio company. Such fees are amortized into other income over the life of the guarantee. The unamortized amount, if any, is included in other assets in the accompanying Consolidated Statements of Assets and Liabilities. For the years ended December 31, 2020, 2019 and 2018, the Company earned $10,974, $7,329 and $9,134, respectively, in other income, primarily from underwriting, prepayment and amendment fees. Non-Accrual Income Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. 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. Management may not place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection. As of December 31, 2020 and 2019, the fair value of the loans in the portfolio on non-accrual status was $58,136 and $52,429, respectively. The remaining first and second lien debt investments were performing and current on their interest payments as of December 31, 2020 and 2019. The Facilities, Senior Notes, 2015-1R Notes – Related Costs, Expenses and Deferred Financing Costs The Company has entered into a senior secured revolving credit facility (as amended, the "Credit Facility"), and the SPV had entered into a senior secured credit facility (as amended, the "SPV Credit Facility", and together with the Credit Facility, the "Facilities"), which was terminated on December 11, 2020. Interest expense and unused commitment fees on the Facilities are recorded on an accrual basis. Unused commitment fees are included in credit facility fees in the accompanying Consolidated Statements of Operations. 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"). On December 11, 2020, the Company issued $75.0 million in aggregate principal amount of 4.500% Senior Unsecured Notes due December 31, 2024 (the "2020 Notes, and together with the 2019 Notes, the "Senior Notes"). The Facilities, the 2015-1R Notes and the Senior Notes are recorded at carrying value, which approximates fair value. Deferred financing costs include capitalized expenses related to the closing or amendments of the Facilities. Amortization of deferred financing costs for each credit facility is computed on the straight-line basis over the respective term of each credit facility. The unamortized balance of such costs is included in deferred financing costs in the accompanying Consolidated Statements of Assets and Liabilities. The amortization of such costs is included in credit facility fees in the accompanying Consolidated Statements of Operations. Debt issuance costs include capitalized expenses including structuring and arrangement fees related to the offering of the 2015-1R Notes and Senior Notes. Amortization of debt issuance costs for the notes is computed on the effective yield method over the term of the notes, except for a portion that was accelerated in connection with the 2015-1 Debt Securitization Refinancing as described in Note 8 to these consolidated financial statements. The unamortized balance of such costs is presented as a direct deduction to the carrying amount of the notes in the accompanying Consolidated Statements of Assets and Liabilities. The amortization of such costs is included in interest expense in the accompanying Consolidated Statements of Operations. Offering Costs Offering costs consist primarily of fees and expenses incurred in connection with the offering of shares, including legal, underwriting, printing and other costs, as well as costs associated with the preparation and filing of applicable registration statements. Offering costs are charged against equity when incurred. 128 Table of Contents Income Taxes For federal income tax purposes, the Company has elected to be treated as a RIC under the Code, and intends to make the required distributions to its stockholders as specified therein. In order to qualify as a RIC, the Company must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then the Company is generally required to pay income taxes only on the portion of its taxable income and gains it does not distribute. 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, although depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of the current year 90% distribution requirement 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. In addition, based on the excise distribution requirements, the Company is subject to a 4% nondeductible federal excise tax on undistributed income unless the Company distributes in a timely manner an amount at least equal to the sum of (1) 98% of its ordinary income for each calendar year, (2) 98.2% of capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any income realized, but not distributed, in the preceding year. 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. 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. The SPV and the 2015-1 Issuer are disregarded entities for tax purposes and are consolidated with the tax return of the Company. All penalties and interest associated with income taxes, if any, are included in income tax expense. For the years ended December 31, 2020, 2019 and 2018, the Company incurred $573, $404 and $230, respectively, in excise tax expense. Dividends and Distributions to Common Stockholders To the extent that the Company has taxable income available, the Company intends to make quarterly distributions to its common stockholders. Dividends and distributions to common stockholders are recorded on the record date. The amount to be distributed is determined by the Board of Directors each quarter and is generally based upon the taxable earnings estimated by management and available cash. Net realized capital gains, if any, are generally distributed at least annually, although the Company may decide to retain such capital gains for investment. Prior to July 5, 2017, the Company had an “opt in” dividend reinvestment plan. Effective on July 5, 2017, the Company converted the “opt in” dividend reinvestment plan to an “opt out” dividend reinvestment plan that provides for reinvestment of dividends and other distributions on behalf of the common stockholders, other than those common stockholders who have “opted out” of the plan. As a result of adopting the plan, if the Board of Directors authorizes, and the Company declares, a cash dividend or distribution, the common stockholders who have not elected to “opt out” of the dividend reinvestment plan will have their cash dividends or distributions automatically reinvested in additional shares of the Company’s common stock, rather than receiving cash. Each registered common stockholder may elect to have such stockholder’s dividends and distributions distributed in cash rather than participate in the plan. For any registered common stockholder that does not so elect, distributions on such stockholder’s shares will be reinvested by State Street Bank and Trust Company, the Company’s plan administrator, in additional shares. The number of 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. The Company intends 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. 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 the Company instructs the plan administrator otherwise. Functional Translations The functional currency of the Company is the U.S. Dollar. Investments are generally made in the local currency of the country in which the investment is domiciled and are translated into U.S. Dollars with foreign currency translation gains or losses recorded within net change in unrealized appreciation (depreciation) on investments in the accompanying consolidated statements of operations. Foreign currency translation gains and losses on non-investment assets and liabilities are separately reflected in the accompanying consolidated statements of operations. 129 Table of Contents Earnings Per Common Share The Company computes earnings per common share in accordance with ASC 260, Earnings Per Share ("ASC 260"). Basic earnings per common share is calculated by dividing the net increase (decrease) in net assets resulting from operations attributable to common stock by the weighted average number of shares of common stock outstanding. Diluted earnings per common share reflects the assumed conversion of all dilutive securities. Recent Accounting Standards Updates On June 16, 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This ASU is intended to introduce new guidance for the accounting for credit losses on instruments within scope based on an estimate of current expected credit losses. The guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company adopted the new requirement starting with the quarter that began January 1, 2020. The adoption of this requirement did not have a material impact on the Company's consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848),” which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2022, except for hedging transactions as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The Company is currently evaluating the impact of adopting ASU 2020-04 on its consolidated financial statements. 3. FAIR VALUE MEASUREMENTS The Company applies fair value accounting in accordance with the terms of ASC Topic 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the amount that would be exchanged to sell an asset or transfer a liability in an orderly transfer between market participants at the measurement date. The Company values securities/instruments traded in active markets on the measurement date by multiplying the closing price of such traded securities/instruments by the quantity of shares or amount of the instrument held. The Company may also obtain quotes with respect to certain of its investments, such as its securities/instruments traded in active markets and its liquid securities/instruments that are not traded in active markets, from pricing services, brokers, or counterparties (i.e., “consensus pricing”). When doing so, the Company determines whether the quote obtained is sufficient according to U.S. GAAP to determine the fair value of the security. The Company may use the quote obtained or alternative pricing sources may be utilized including valuation techniques typically utilized for illiquid securities/instruments. Securities/instruments that are illiquid or for which the pricing source does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Investment Adviser or the Company’s Board of Directors, does not represent fair value shall each be valued as of the measurement date using all techniques appropriate under the circumstances and for which sufficient data is available. These valuation techniques may vary by investment and include comparable public market valuations, comparable precedent transaction valuations and/or discounted cash flow analyses. The process generally used to determine the applicable value is as follows: (i) the value of each portfolio company or investment is initially reviewed by the investment professionals responsible for such portfolio company or investment and, for non-traded investments, a standardized template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs is used to determine a preliminary value, which is also reviewed alongside consensus pricing, where available; (ii) preliminary valuation conclusions are documented and reviewed by a valuation committee comprised of members of senior management; (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 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) if applicable, 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; and (v) if applicable, the Board of Directors discusses the valuation recommendations of the Audit Committee and determines the fair value of each investment in the portfolio in good faith based on the input of the Investment Adviser and, where applicable, the third-party valuation firm. 130 Table of Contents All factors that might materially impact the value of an investment are considered, including, but not limited to the assessment of the following factors, as relevant: • the nature and realizable value of any collateral; • call features, put features and other relevant terms of debt; • the portfolio company’s leverage and ability to make payments; • the portfolio company’s public or private credit rating; • the portfolio company’s actual and expected earnings and discounted cash flow; • prevailing interest rates and spreads for similar securities and expected volatility in future interest rates; • the markets in which the portfolio company does business and recent economic and/or market events; and • comparisons to comparable transactions and publicly traded securities. Investment performance data utilized are the most recently available financial statements and compliance certificates received from the portfolio companies as of the measurement date which in many cases may reflect a lag in information. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is reasonably possible that the difference could be material. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the realized gains or losses on investments to be different from the net change in unrealized appreciation or depreciation currently reflected in the consolidated financial statements as of December 31, 2020, 2019 and 2018. U.S. GAAP establishes a hierarchical disclosure framework which ranks the level of observability of market price inputs used in measuring investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and state of the marketplace, including the existence and transparency of transactions between market participants. Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets generally have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value. Investments measured and reported at fair value are classified and disclosed based on the observability of inputs used in determination of fair values, as follows: • Level 1—inputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date. The types of financial instruments in Level 1 generally include unrestricted securities, including equities and derivatives, listed in active markets. The Company does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price. • Level 2—inputs to the valuation methodology are either directly or indirectly observable as of the reporting date and are those other than quoted prices in active markets. The type of financial instruments in this category generally includes less liquid and restricted securities listed in active markets, securities traded in other than active markets, government and agency securities, and certain over-the-counter derivatives where the fair value is based on observable inputs. • Level 3—inputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are in this category generally include investments in privately-held entities and certain over-the-counter derivatives where the fair value is based on unobservable inputs. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Investment Adviser’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. Investments in Credit Fund and Credit Fund II are valued based on the legal form of investment. For those structured through LLC membership interests, the practical expedient, or net asset value method is used. For those structured through subordinated notes, a discounted cash flow method is used. 131 Table of Contents Transfers between levels, if any, are recognized at the beginning of the year in which the transfers occur. For the years ended December 31, 2020 and 2019, t here were no transfers between levels. The following tables summarize the Company’s investments measured at fair value on a recurring basis by the above fair value hierarchy levels as of December 31, 2020 and 2019: December 31, 2020 Level 1 Level 2 Level 3 Total Assets First Lien Debt $ — $ — $ 1,224,063 $ 1,224,063 Second Lien Debt — — 284,523 284,523 Equity Investments — — 33,877 33,877 Investment Fund Mezzanine Loan — — — — Subordinated Loan and Member's Interest — — 205,891 205,891 Subtotal $ — $ — $ 1,748,354 $ 1,748,354 Investments measured at net asset value (1) $ 77,395 Total $ 1,825,749 December 31, 2019 Level 1 Level 2 Level 3 Total Assets First Lien Debt $ — $ — $ 1,663,138 $ 1,663,138 Second Lien Debt — — 234,532 234,532 Equity Investments — — 21,698 21,698 Investment Fund Mezzanine Loan — — 93,000 93,000 Subordinated Loan and Member's Interest — — 111,596 111,596 Total $ — $ — $ 2,123,964 $ 2,123,964 (1) Amount represents the Company’s investment in Credit Fund II. The Company, as a practical expedient, estimates the fair value of this investment using the net asset value of the Company’s member’s interest in Credit Fund II. As such, the fair value of the Company’s investment in Credit Fund II has not been categorized within the fair value hierarchy. 132 Table of Contents The changes in the Company’s investments at fair value for which the Company has used Level 3 inputs to determine fair value and net change in unrealized appreciation (depreciation) included in earnings for Level 3 investments still held are as follows: Financial Assets For the year ended December 31, 2020 First Lien Debt Second Lien Debt Equity Investments Investment Fund - Mezzanine Loan Investment Fund - Subordinated Loan and Member's Interest Total Balance, beginning of year $ 1,663,138 $ 234,532 $ 21,698 $ 93,000 $ 111,596 $ 2,123,964 Purchases 340,007 119,638 12,003 63,500 92,500 627,648 Sales (465,111) (29,776) (54) (156,500) — (651,441) Paydowns (253,748) (26,750) (2,003) — — (282,501) Accretion of discount 7,100 1,072 14 — — 8,186 Net realized gains (losses) (58,766) (228) 522 — — (58,472) Net change in unrealized appreciation (depreciation) (8,557) (13,965) 1,697 — 1,795 (19,030) Balance, end of year $ 1,224,063 $ 284,523 $ 33,877 $ — $ 205,891 $ 1,748,354 Net change in unrealized appreciation (depreciation) included in earnings related to investments still held at the reporting date included in net change in unrealized appreciation (depreciation) on investments on the Consolidated Statements of Operations $ (52,388) $ (13,666) $ 1,697 — $ 1,795 $ (62,562) Financial Assets For the year ended December 31, 2019 First Lien Debt Second Lien Debt Equity Investments Investment Fund - Mezzanine Loan Investment Fund - Subordinated Loan Total Balance, beginning of year $ 1,546,271 $ 178,958 $ 24,633 112,000 110,295 $ 1,972,157 Purchases 718,358 141,814 8,595 126,200 5,500 1,000,467 Sales (79,741) — (18,036) — — (97,777) Paydowns (485,514) (88,695) — (145,200) — (719,409) Accretion of discount 11,503 1,452 — — — 12,955 Net realized gains (losses) (52,633) — 14,257 — — (38,376) Net change in unrealized appreciation (depreciation) 4,894 1,003 (7,751) — (4,199) (6,053) Balance, end of year $ 1,663,138 $ 234,532 $ 21,698 93,000 111,596 $ 2,123,964 Net change in unrealized appreciation (depreciation) included in earnings related to investments still held at the reporting date included in net change in unrealized appreciation (depreciation) on investments on the Consolidated Statements of Operations $ (45,731) $ 1,096 $ (1,587) — (4,199) $ (50,421) The Company generally uses the following framework when determining the fair value of investments that are categorized as Level 3: Investments in debt securities are initially evaluated to determine whether the enterprise value of the portfolio company is greater than the applicable debt. The enterprise value of the portfolio company is estimated using a market approach and an income approach. The market approach utilizes market value (EBITDA) multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The Company carefully considers numerous factors when selecting the appropriate companies whose multiples are used to value its portfolio companies. These factors include, but are not limited to, the type of organization, similarity to the business being valued, relevant risk factors, as well as size, profitability and growth expectations. The income approach typically uses a discounted cash flow analysis of the portfolio company. 133 Table of Contents Investments in debt securities that do not have sufficient coverage through the enterprise value analysis are valued based on an expected probability of default and discount recovery analysis. Investments in debt securities with sufficient coverage through the enterprise value analysis are generally valued using a discounted cash flow analysis of the underlying security. Projected cash flows in the discounted cash flow typically represent the relevant security’s contractual interest, fees and principal payments plus the assumption of full principal recovery at the security’s expected maturity date. The discount rate to be used is determined using an average of two methodologies that incorporate market spreads. Investments in debt securities may also be valued using consensus pricing. Investments in equities are generally valued using a market approach and/or an income approach. The market approach utilizes EBITDA multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The income approach typically uses a discounted cash flow analysis of the portfolio company. Investments in the mezzanine loan are valued using collateral analysis with expected recovery rate of principal and interest. Investments in the subordinated loan and member’s interest of Credit Fund are valued using discounted cash flow analysis with expected discount rate, default rate and recovery rate of principal and interest. The following tables summarize the quantitative information related to the significant unobservable inputs for Level 3 instruments which are carried at fair value as of December 31, 2020 and 2019: Fair Value as of Valuation Techniques Significant Unobservable Inputs Range Weighted Average of December 31, 2020 Low High Investments in First Lien Debt $ 879,159 Discounted Cash Flow Discount Rate 3.96 % 16.60 % 8.80 % 287,191 Consensus Pricing Indicative Quotes 89.11 100.00 97.70 57,713 Income Approach Discount Rate 12.80 % 14.70 % 13.50 % Market Approach Comparable Multiple 3.17x 6.99x 6.43x Total First Lien Debt 1,224,063 Investments in Second Lien Debt 238,785 Discounted Cash Flow Discount Rate 7.14 % 15.27 % 9.67 % 45,738 Consensus Pricing Indicative Quotes 82.88 100.00 87.75 Total Second Lien Debt 284,523 Investments in Equity 33,877 Income Approach Discount Rate 7.22 % 12.80 % 8.84 % Market Approach Comparable Multiple 6.99x 16.43x 10.50x Total Equity Investments 33,877 Investments in Credit Fund Mezzanine Loan — Collateral Analysis Recovery Rate 100.00 % 100.00 % 100.00 % Subordinated Loan and Member's Interest 205,891 Discounted Cash Flow Discount Rate 8.50 % 8.50 % 8.50 % Discounted Cash Flow Default Rate 3.00 % 3.00 % 3.00 % Discounted Cash Flow Recovery Rate 65.00 % 65.00 % 65.00 % Total Investments in Credit Fund 205,891 Total Level 3 Investments $ 1,748,354 134 Table of Contents Fair Value as of Valuation Techniques Significant Unobservable Inputs Range Weighted Average of December 31, 2019 Low High Investments in First Lien Debt $ 1,332,584 Discounted Cash Flow Discount Rate 3.64 % 24.45 % 8.13 % 318,681 Consensus Pricing Indicative Quotes 77.94 100.00 96.96 11,873 Income Approach Discount Rate 12.22 % 19.32 % 13.16 % Market Approach Comparable Multiple 7.89x 8.38x 8.49x Total First Lien Debt 1,663,138 Investments in Second Lien Debt 188,736 Discounted Cash Flow Discount Rate 7.40 % 10.66 % 8.85 % 45,796 Consensus Pricing Indicative Quotes 97.50 98.31 98.19 Total Second Lien Debt 234,532 Investments in Equities 21,698 Income Approach Discount Rate 7.76 % 15.31 % 8.84 % Market Approach Comparable Multiple 6.37x 16.65x 9.24x Total Equity Investments 21,698 Investments in Investment Fund Mezzanine Loan 93,000 Collateral Analysis Recovery Rate 100.00 % 100.00 % 100.00 % Subordinated Loan 111,596 Discounted Cash Flow Discount Rate 10.00 % 10.00 % 10.00 % Discounted Cash Flow Default Rate 2.00 % 2.00 % 2.00 % Discounted Cash Flow Recovery Rate 75.00 % 75.00 % 75.00 % Total Investment Fund $ 204,596 Total Level 3 Investments $ 2,123,964 The significant unobservable inputs used in the fair value measurement of the Company’s investments in first and second lien debt securities are discount rates, indicative quotes and comparable EBITDA multiples. Significant increases in discount rates would result in a significantly lower fair value measurement. Significant decreases in indicative quotes or comparable EBITDA multiples in isolation may result in a significantly lower fair value measurement. The significant unobservable inputs used in the fair value measurement of the Company’s investments in equities are discount rates and comparable EBITDA multiples. Significant increases in discount rates would result in a significantly lower fair value measurement. Significant decreases in comparable EBITDA multiples would result in a significantly lower fair value measurement. The significant unobservable inputs used in the fair value measurement of the Company’s investments in the mezzanine loan of Credit Fund are recovery rates of principal and interest. Significant decreases in recovery rates would result in a significantly lower fair value measurement. The significant unobservable inputs used in the fair value measurement of the Company’s investments in the subordinated loan and member’s interest of Credit Fund are discount rates, default rates and recovery rates. Significant increases in discount rates or default rates would result in a significantly lower fair value measurement. Significant decreases in recovery rates would result in a significantly lower fair value measurement. Financial instruments disclosed but not carried at fair value The following table presents the carrying value and fair value of the Company’s secured borrowings and senior unsecured notes disclosed but not carried at fair value as of December 31, 2020 and 2019: December 31, 2020 December 31, 2019 Carrying Value Fair Value Carrying Value Fair Value Secured borrowings $ 347,949 $ 347,949 $ 616,543 $ 616,543 2019 Notes 115,000 116,250 115,000 115,000 2020 Notes 75,000 75,000 — — Total $ 537,949 $ 539,199 $ 731,543 $ 731,543 The carrying values of the secured borrowings and senior unsecured notes approximate their respective fair values and are categorized as Level 3 within the hierarchy. Secured borrowings and senior unsecured notes are valued generally using discounted cash flow analysis. The significant unobservable inputs used in the fair value measurement of the Company’s 135 Table of Contents secured borrowings and senior unsecured notes are discount rates. Significant increases in discount rates would result in a significantly lower fair value measurement. The following table represents 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: December 31, 2020 December 31, 2019 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 Aaa/AAA Class A-1-2-R Notes 50,000 49,645 50,000 49,908 Aaa/AAA Class A-1-3-R Notes 25,000 25,017 25,000 25,163 AA Class A-2-R Notes 66,000 64,895 66,000 66,000 A Class B Notes 46,400 45,291 46,400 46,400 BBB- Class C Notes 27,000 24,592 27,000 27,000 Total $ 449,200 $ 440,436 $ 449,200 $ 447,524 The fair value determination of the Company’s notes payable was based on the market quotation(s) received from broker/dealer(s). These fair value measurements were based on significant inputs not observable and thus represent Level 3 measurements as defined in the accounting guidance for fair value measurement. The carrying value of other financial assets and liabilities approximates their fair value based on the short term nature of these items. 4. RELATED PARTY TRANSACTIONS Investment Advisory Agreement 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. 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”). 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. 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. Subject to the overall supervision of the Board of Directors, the Investment Adviser provides investment advisory services to the Company. For providing these services, the Investment Adviser receives fees from the Company consisting of two components—a base management fee and an incentive fee. 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. The Company’s gross assets exclude any cash and cash equivalents and include assets acquired through the incurrence of debt from use of the Facilities and the 2015-1R Notes (see Note 7, Borrowings, and Note 8, Notes Payable, to these consolidated financial statements). 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. 136 Table of Contents The incentive fee has two parts. The first part is calculated and payable quarterly in arrears based on the pre-incentive fee net investment income for the immediately preceding calendar quarter. The second part is determined and payable in arrears based on capital gains as of the end of each calendar year. Pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the operating expenses accrued for the quarter (including the base management fee, expenses payable under the administration agreement, and any interest expense or fees on any credit facilities or outstanding debt and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature, accrued income that the Company has not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Pre-incentive fee net investment income, expressed as a rate of return on the value of the Company’s 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: • no incentive fee based on pre-incentive fee net investment income in any calendar quarter in which its pre-incentive fee net investment income does not exceed the hurdle rate of 1.50%; • 100% of pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 1.82% in any calendar quarter (7.28% annualized). The Company refers to this portion of the pre-incentive fee net investment income (which exceeds the hurdle rate but is less than 1.82%) as the “catch-up.” The “catch-up” is meant to provide the Investment Adviser with approximately 17.5% of the Company’s pre-incentive fee net investment income as if a hurdle rate did not apply if this net investment income exceeds 1.82% in any calendar quarter; and • 17.5% of the amount of pre-incentive fee net investment income, if any, that exceeds 1.82% in any calendar quarter (7.28% annualized) will be payable to the Investment Adviser. This reflects that once the hurdle rate is reached and the catch-up is achieved, 17.5% of all pre-incentive fee investment income thereafter is allocated to the Investment Adviser. 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. 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, 2020 2019 2018 Base management fees $ 28,648 $ 31,316 $ 29,626 Incentive fees on pre-incentive fee net investment income 18,555 22,872 23,002 Realized capital gains incentive fees — — — Accrued capital gains incentive fees — — — Total capital gains incentive fees — — — Total incentive fees 18,555 22,872 23,002 Total base management fees and incentive fees $ 47,203 $ 54,188 $ 52,628 137 Table of Contents Accrued capital gains incentive fees are based upon the cumulative net realized and unrealized appreciation (depreciation) from inception. Accordingly, the accrual for any capital gains incentive fee under U.S. GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. As of December 31, 2020 and 2019, $11,549 and $13,236, respectively, was included in base management and incentive fees payable in the accompanying Consolidated Statements of Assets and Liabilities. Administration Agreement On April 3, 2013, the Company’s Board of Directors approved an administration agreement (the “Administration Agreement”) between the Company and the Administrator. Pursuant to the Administration Agreement, the Administrator provides services and receives reimbursements equal to an amount that reimburses the Administrator for its costs and expenses and the Company’s allocable portion of overhead incurred by the Administrator in performing its obligations under the Administration Agreement, including the Company’s allocable portion of the compensation paid to or compensatory distributions received by the Company’s officers (including the Chief Compliance Officer, Chief Financial Officer and Treasurer) and respective staff who provide services to the Company, operations staff who provide services to the Company, and any internal audit staff, to the extent internal audit performs a role in the Company’s Sarbanes-Oxley Act internal control assessment. Reimbursement under the Administration Agreement occurs quarterly in arrears. 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. The Administration Agreement may not be assigned by a party without the consent of the other party and may be terminated by either party without penalty upon at least 60 days’ written notice to the other party. For the years ended December 31, 2020, 2019 and 2018, the Company incurred $679, $539 and $701, respectively, in fees under the Administrative Agreement, which were included in administrative service fees in the accompanying Consolidated Statements of Operations. As of December 31, 2020 and 2019, $85 and $77, respectively, was unpaid and included in administrative service fees payable in the accompanying Consolidated Statements of Assets and Liabilities. Sub-Administration Agreements On April 3, 2013, the Administrator entered into a sub-administration agreement with Carlyle Employee Co. (the “Carlyle Sub-Administration Agreement”). Pursuant to the Carlyle Sub-Administration Agreement, Carlyle Employee Co. provides the Administrator with access to personnel. 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”). 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. For the years ended December 31, 2020, 2019 and 2018, fees incurred in connection with the State Street Sub-Administration Agreement, which amounted to $659, $755 and $764, respectively, were included in other general and administrative in the accompanying Consolidated Statements of Operations. As of December 31, 2020 and 2019, $334 and $380, respectively, was unpaid and included in other accrued expenses and liabilities in the accompanying Consolidated Statements of Assets and Liabilities. 138 Table of Contents License Agreement The Company has entered into a royalty free license agreement with 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 The Company’s Board of Directors currently consists of six members, four of whom are Independent Directors. The Board of Directors has established an Audit Committee, a Nominating and Governance Committee and a Compensation Committee, and may establish additional committees in the future. For the years ended December 31, 2020, 2019 and 2018, the Company incurred $398, $353 and $370, respectively, in fees and expenses associated with its Independent Directors' services on the Company's Board of Directors and the Audit Committee. As of December 31, 2020 and 2019, $96 and $0, respectively, was unpaid and included in other accrued expenses and liabilities in the accompanying Consolidated Statements of Assets and Liabilities. Transactions with Investment Funds 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 of $(2,289), $208 and $0, respectively. See Note 5, Middle Market Credit Fund, LLC, to these consolidated financial statements. 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 Credit Fund II in exchange for approximately 84.13% of Credit Fund II's membership interests and gross cash proceeds of approximately $170 million. There were no subsequent transfers through December 31, 2020. See Note 6, Middle Market Credit Fund II, LLC, to these consolidated financial statements. Transactions with Carlyle 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. See Note 10, Net Assets, for further information about the Preferred Stock. In December 2020, the Company paid an affiliate of Carlyle a fee 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. 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. 5. MIDDLE MARKET CREDIT FUND, LLC Overview 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. Credit Fund is managed by a six-member board of managers, on which the Company and Credit Partners each have equal representation. Establishing a quorum for Credit Fund’s board of managers requires at least four members to be present at a meeting, including at least two of the Company’s representatives and two of Credit Partners’ representatives. The Company and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $250,000 each. Funding of such commitments generally requires the approval of the board of Credit Fund, including the board members appointed by the Company. By virtue of its membership interest, the Company and Credit Partners each indirectly bear an allocable share of all expenses and other obligations of Credit Fund. Together with Credit Partners, the Company co-invests through Credit Fund. Investment opportunities for Credit Fund are sourced primarily by the Company and its affiliates. Portfolio and investment decisions with respect to Credit Fund must be unanimously approved by a quorum of Credit Fund’s investment committee consisting of an equal number of representatives of the Company and Credit Partners. Therefore, although the Company owns more than 25% of the voting securities of Credit Fund, the Company does not believe that it has control over Credit Fund (other than for purposes of the Investment Company 139 Table of Contents Act). 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, October 6, 2017, November 26, 2018 and August 16, 2019, respectively. Credit Fund Sub, the 2019-2 Issuer and the 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. In December 2020, the 2017-1 CLO was redeemed in full and notes outstanding were repaid in full. 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 discussion regarding the credit facilities entered into and the notes issued by such wholly-owned subsidiaries. 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 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 Since inception of Credit Fund and through December 31, 2020 and 2019, the Company and Credit Partners each made capital contributions of $1 and $1 in members’ equity, respectively, and $216,000 and $123,500 in subordinated loans, respectively, to Credit Fund. Below is certain summarized consolidated information for Credit Fund as of December 31, 2020 and 2019. As of December 31, 2020 2019 ASSETS Investments, at fair value (amortized cost of $1,080,538 and $1,258,157,respectively) $ 1,056,381 $ 1,246,839 Cash and cash equivalents 119,796 64,787 Other assets 7,553 9,369 Total assets $ 1,183,730 $ 1,320,995 LIABILITIES AND MEMBERS’ EQUITY Secured borrowings $ 514,261 $ 441,077 Notes payable, net of unamortized debt issuance costs of $1,559 and $3,441, respectively) 253,933 528,407 Mezzanine loans (1) — 93,000 Other liabilities 15,543 32,383 Subordinated loans and members’ equity (1) 399,993 226,128 Total liabilities and members’ equity $ 1,183,730 $ 1,320,995 (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. 140 Table of Contents For the Years Ended December 31, 2020 2019 Total investment income $ 83,476 $ 94,092 Expenses Interest and credit facility expenses 40,238 59,228 Other expenses 2,034 2,230 Total expenses 42,272 61,458 Net investment income (loss) 41,204 32,634 Net realized gain (loss) on investments — (8,285) Net change in unrealized appreciation (depreciation) on investments (12,839) 13,711 Net increase (decrease) resulting from operations $ 28,365 $ 38,060 Below is a summary of Credit Fund’s portfolio, followed by a listing of the loans in Credit Fund’s portfolio as of December 31, 2020 and 2019: As of December 31, 2020 2019 Senior secured loans (1) $ 1,084,491 $ 1,260,582 Weighted average yields of senior secured loans based on amortized cost (2) 6.03 % 6.51 % Weighted average yields of senior secured loans based on fair value (2) 6.15 % 6.55 % Number of portfolio companies in Credit Fund 54 61 Average amount per portfolio company (1) $ 20,083 $ 20,665 Number of loans on non-accrual status — 1 Fair value of loans on non-accrual status $ — $ 21,150 Percentage of portfolio at floating interest rates (3) (4) 97.7 % 98.3 % Percentage of portfolio at fixed interest rates (4) 2.3 % 1.7 % Fair value of loans with PIK provisions $ 24,113 $ 21,150 Percentage of portfolio with PIK provisions (4) 2.3 % 1.7 % (1) At par/principal amount. (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 and 2019. 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. 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. Actual yields earned over the life of each investment could differ materially from the yields presented above. (3) Floating rate debt investments are generally subject to interest rate floors. (4) Percentages based on fair value. 141 Table of Contents Consolidated Schedule of Investments as of December 31, 2020 Investments (1) Footnotes Industry Reference Rate & Spread (2) Interest Rate (2) Maturity Date Par/ Principal Amount Amortized Cost (4) Fair Value (5) First Lien Debt (97.47% of fair value) Acrisure, LLC \# (2)(3) Banking, Finance, Insurance & Real Estate L + 3.50% 3.65% 2/15/2027 $ 25,634 $ 25,606 $ 25,104 Alku, LLC +# (2)(3) Business Services L + 5.50% 5.75% 7/29/2026 23,666 23,466 23,512 Alpha Packaging Holdings, Inc. +\ (2)(3) Containers, Packaging & Glass L + 6.00% 7.00% 11/12/2021 16,378 16,378 16,378 AmeriLife Holdings LLC # (2)(3) Banking, Finance, Insurance & Real Estate L + 4.00% 4.15% 3/18/2027 9,951 9,929 9,802 Analogic Corporation ^+ (2)(3)(6) Capital Equipment L + 5.25% 6.25% 6/22/2024 18,857 18,837 18,857 Anchor Packaging, Inc. +# (2)(3) Containers, Packaging & Glass L + 4.00% 4.15% 7/18/2026 24,723 24,617 24,656 API Technologies Corp. +\ (2)(3) Aerospace & Defense L + 4.25% 4.49% 5/9/2026 14,775 14,713 13,999 Aptean, Inc. +\ (2)(3) Software L + 4.25% 4.40% 4/23/2026 12,281 12,227 12,077 AQA Acquisition Holding, Inc. +\ (2)(3)(6) High Tech Industries L + 4.25% 5.25% 5/24/2023 18,759 18,752 18,757 Astra Acquisition Corp. +# (2)(3) Software L + 5.50% 6.50% 3/1/2027 28,783 28,392 28,783 Avalign Technologies, Inc. +\ (2)(3) Healthcare & Pharmaceuticals L + 4.50% 4.73% 12/22/2025 14,592 14,481 14,334 Big Ass Fans, LLC +\# (2)(3) Capital Equipment L + 3.75% 4.75% 5/21/2024 13,766 13,714 13,766 BK Medical Holding Company, Inc. ^+ (2)(3)(6) Healthcare & Pharmaceuticals L + 5.25% 6.25% 6/22/2024 24,165 23,951 22,363 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. + (2)(3) Media: Broadcasting & Subscription L + 4.25% 4.40% 8/30/2026 14,813 14,773 14,813 Clearent Newco, LLC ^ (2)(3)(6) High Tech Industries L + 6.50% 7.50% 3/20/2025 4,079 4,079 3,907 Clearent Newco, LLC ^+\ (2)(3) High Tech Industries L + 5.50% 6.50% 3/20/2025 29,486 29,236 28,722 DecoPac, Inc. ^+\ (2)(3)(6) Non-durable Consumer Goods L + 4.25% 5.25% 9/29/2024 12,336 12,253 12,318 Diligent Corporation ^+ (2)(3)(6) Telecommunications L + 6.25% 7.25% 8/4/2025 8,683 8,411 8,819 DTI Holdco, Inc. ^+\ (2)(3) High Tech Industries L + 4.75% 5.75% 9/30/2023 18,690 18,642 16,655 Eliassen Group, LLC +\ (2)(3) Business Services L + 4.25% 4.40% 11/5/2024 7,543 7,516 7,483 EvolveIP, LLC ^+ (2)(3)(6) Telecommunications L + 5.75% 6.75% 6/7/2023 19,800 19,759 19,775 Exactech, Inc. +\# (2)(3) Healthcare & Pharmaceuticals L + 3.75% 4.75% 2/14/2025 21,528 21,416 20,422 Excel Fitness Holdings, Inc. +# (2)(3) Hotel, Gaming & Leisure L + 5.25% 6.25% 10/7/2025 24,750 24,546 22,780 Frontline Technologies Holdings, LLC + (2)(3) Software L + 5.75% 6.75% 9/18/2023 14,886 14,198 14,589 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. +\ (2)(3)(6) Energy: Oil & Gas L + 5.00% 6.00% 11/17/2023 32,821 32,458 30,984 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. +\ (2)(3)(6) Utilities: Electric L + 4.50% 5.50% 3/22/2024 34,584 34,489 33,424 KAMC Holdings, Inc. +# (2)(3) Energy: Electricity L + 4.00% 4.23% 8/14/2026 13,825 13,768 12,531 KBP Investments, LLC ^+ (2)(3)(6) Beverage, Food & Tobacco L + 5.00% 6.00% 5/15/2023 9,292 9,059 9,350 Marco Technologies, LLC ^+\ (2)(3)(6) Media: Advertising, Printing & Publishing L + 4.00% 5.00% 10/30/2023 7,332 7,293 7,332 Mold-Rite Plastics, LLC +\ (2)(3) Chemicals, Plastics & Rubber L + 4.25% 5.25% 12/14/2021 14,520 14,501 14,520 142 Table of Contents Consolidated Schedule of Investments as of December 31, 2020 Investments (1) Footnotes Industry Reference Rate & Spread (2) Interest Rate (2) Maturity Date Par/ Principal Amount Amortized Cost (4) Fair Value (5) Newport Group Holdings II, Inc. +\# (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: Cargo L + 4.00% 5.00% 10/12/2024 38,897 38,773 37,766 Output Services Group ^+\ (2)(3) Media: Advertising, Printing & Publishing L + 4.50% 5.50% 3/27/2024 19,421 19,382 14,178 Pasternack Enterprises, Inc. +\ (2)(3) Capital Equipment L + 4.00% 5.00% 7/2/2025 22,524 22,513 22,218 Pharmalogic Holdings Corp. +\ (2)(3) Healthcare & Pharmaceuticals L + 4.00% 5.00% 6/11/2023 11,205 11,189 11,158 Premise Health Holding Corp. +\# (2)(3) Healthcare & Pharmaceuticals L + 3.50% 3.75% 7/10/2025 13,584 13,538 13,503 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 Q Holding Company +\# (2)(3) Automotive L + 5.00% 6.00% 12/31/2023 21,735 21,604 20,229 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. +\# (2)(3) Healthcare & Pharmaceuticals L + 4.25% 4.81% 7/9/2025 27,686 27,581 27,193 RevSpring Inc. +\# (2)(3) Media: Advertising, Printing & Publishing L + 4.25% 4.40% 10/11/2025 29,449 29,265 29,199 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: Consumer L + 6.75% 7.75% 9/28/2022 29,119 28,743 29,118 The Original Cakerie, Ltd. (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. (Canada) + (2)(3) Beverage, Food & Tobacco L + 5.00% 6.00% 7/20/2022 8,837 8,815 8,829 Thoughtworks, Inc. \# (2)(3) Business Services L + 3.75% 4.75% 10/11/2024 11,704 11,683 11,704 U.S. Acute Care Solutions, LLC +\ (2)(3) Healthcare & Pharmaceuticals L + 6.00% 7.00% 5/15/2021 31,211 31,184 29,104 U.S. TelePacific Holdings Corp. +\ (2)(3) Telecommunications L + 5.50% 6.50% 5/2/2023 26,660 26,585 23,984 VRC Companies, LLC + (2)(3)(6) Business Services L + 6.50% 7.50% 3/31/2023 30,582 29,464 30,582 Water Holdings Acquisition LLC ^+ (2)(3)(6) Utilities: Water L + 5.25% 6.25% 12/18/2026 26,316 25,520 25,516 Welocalize, Inc. + (2)(3)(6) Business Services L + 4.50% 5.50% 12/23/2023 22,629 22,414 22,584 WRE Holding Corp. ^+ (2)(3)(6) Environmental Industries L + 5.25% 6.25% 1/3/2023 8,367 8,336 8,252 First Lien Debt Total $ 1,051,406 $ 1,029,687 Second Lien Debt (2.28% of fair value) DBI Holding, LLC ^ (2) Transportation: Cargo 9.00% PIK 9.00% 2/1/2026 $ 24,113 $ 23,768 $ 24,113 Second Lien Debt Total $ 23,768 $ 24,113 Equity Investments (0.24% of fair value) DBI Holding, LLC ^ Transportation: Cargo 2,961 $ — $ — DBI Holding, LLC ^ Transportation: Cargo 13,996 5,364 2,581 Equity Investments Total $ 5,364 $ 2,581 Total Investments $ 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"). 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. Credit Fund Sub has entered into a revolving credit facility (the “Credit Fund Sub Facility”). The lenders of the Credit Fund Sub Facility have a first lien security interest in substantially all of the assets of Credit Fund Sub. 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”). Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub, or Credit Fund Warehouse II. 143 Table of Contents # Denotes that all or a portion of the assets are owned by the Credit Fund Warehouse II. Credit Fund Warehouse II has entered into a revolving credit facility (the "Credit Fund Warehouse II"). 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. 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. As of December 31, 2020, the geographical composition of investments as a percentage of fair value was 2.76% in Canada and 97.24% in the United States. Certain portfolio company investments are subject to contractual restrictions on sales. (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. Prime Rate), which generally resets quarterly. For each such loan, Credit Fund has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2020. As of December 31, 2020, the reference rates for Credit Fund'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%. (3) Loan includes interest rate floor feature, which is generally 1.00%. (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. (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 these consolidated financial statements. (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: First Lien Debt – unfunded delayed draw and revolving term loans commitments Type Unused Fee Par/ Principal Amount Fair Value Analogic Corporation Revolver 0.50 % $ 1,975 $ — AQA Acquisition Holding, Inc. Revolver 0.50 2,459 — BK Medical Holding Company, Inc. Revolver 0.50 2,609 (176) Chemical Computing Group ULC (Canada) Revolver 0.50 873 — Clearent Newco, LLC Delayed Draw 1.00 2,549 (66) DecoPac, Inc. Revolver 0.50 2,143 (3) Diligent Corporation Delayed Draw 1.00 2,109 25 Diligent Corporation Revolver 0.50 703 8 EvolveIP, LLC Delayed Draw 1.00 1,904 (2) EvolveIP, LLC Revolver 0.50 1,680 (2) HMT Holding Inc. Revolver 0.50 6,173 (291) Integrity Marketing Acquistion, LLC Delayed Draw 1.00 4,144 41 Jensen Hughes, Inc. Delayed Draw 1.00 1,127 (35) Jensen Hughes, Inc. Revolver 0.50 1,364 (43) KBP Investments, LLC Delayed Draw 1.00 503 1 KBP Investments, LLC Delayed Draw 1.00 10,190 30 Marco Technologies, LLC Delayed Draw 1.00 7,500 — Propel Insurance Agency, LLC Revolver 0.50 1,905 (19) Propel Insurance Agency, LLC Delayed Draw 1.00 1,733 (17) QW Holding Corporation Revolver 0.50 5,498 (268) QW Holding Corporation Delayed Draw 1.00 161 (8) T2 Systems, Inc. Revolver 0.50 1,955 — The Original Cakerie, Ltd. (Canada) Revolver 0.50 1,665 (1) VRC Companies, LLC Revolver 0.50 858 — Water Holdings Acquisition LLC Delayed Draw 1.00 8,421 (168) Water Holdings Acquisition LLC Revolver 0.50 5,263 (105) Welocalize, Inc. Revolver 0.50 2,250 (4) WRE Holding Corp. Revolver 0.50 852 (10) WRE Holding Corp. Delayed Draw 1.00 563 (7) Total unfunded commitments $ 81,129 $ (1,120) 144 Table of Contents Consolidated Schedule of Investments as of December 31, 2019 Investments (1) Footnotes Industry Reference Rate & Spread (2) Interest Rate (2) Maturity Date Par/ Principal Amount Amortized Cost (4) Fair Value (5) First Lien Debt (98.11% of fair value) Achilles Acquisition, LLC \+# (2) (3) Banking, Finance, Insurance & Real Estate L + 4.00% 5.75% 10/13/2025 $ 17,865 $ 17,776 $ 17,763 Acrisure, LLC +\ (2) (3) Banking, Finance, Insurance & Real Estate L + 3.75% 5.85% 11/22/2023 11,820 11,810 11,805 Acrisure, LLC +\# (2) (3) Banking, Finance, Insurance & Real Estate L + 4.25% 6.35% 11/22/2023 20,674 20,639 20,674 Advanced Instruments, LLC ^+\* (2) (3) (7) Healthcare & Pharmaceuticals L + 5.25% 6.99% 10/31/2022 35,610 35,536 35,466 Alku, LLC +# (2) (3) Business Services L + 5.50% 7.44% 7/29/2026 25,000 24,754 24,624 Alpha Packaging Holdings, Inc. +*\ (2) (3) Containers, Packaging & Glass L + 4.25% 6.35% 5/12/2020 16,684 16,676 16,601 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 Anchor Packaging, Inc. ^# (2) (3) (7) Containers, Packaging & Glass L + 4.00% 5.70% 7/18/2026 20,462 20,363 20,457 API Technologies Corp. \+ (2) (3) Aerospace & Defense L + 4.25% 5.95% 5/9/2026 14,925 14,853 14,807 Aptean, Inc. +\ (2) (3) Software L + 4.25% 6.34% 4/23/2026 12,406 12,344 12,385 AQA Acquisition Holding, Inc. ^*\ (2) (3) (7) High Tech Industries L + 4.25% 6.16% 5/24/2023 18,954 18,922 18,860 Avalign Technologies, Inc. +\ (2) (3) Healthcare & Pharmaceuticals L + 4.50% 6.70% 12/22/2025 14,741 14,610 14,626 Big Ass Fans, LLC +*\ (2) (3) Capital Equipment L + 3.75% 5.85% 5/21/2024 13,909 13,841 13,903 Borchers, Inc. +*\ (2) (3) (7) Chemicals, Plastics & Rubber L + 4.50% 6.60% 11/1/2024 15,116 15,072 15,085 Brooks Equipment Company, LLC * (2) (3) Construction & Building L + 5.00% 6.91% 8/29/2020 5,144 5,141 5,141 Clarity Telecom LLC. + (2) (3) Media: Broadcasting & Subscription L + 4.50% 6.20% 8/30/2026 14,963 14,915 14,902 Clearent Newco, LLC ^+\ (2) (3) (7) High Tech Industries L + 5.50% 7.44% 3/20/2025 29,738 29,436 29,134 Datto, Inc. +\ (2) (3) High Tech Industries L + 4.25% 5.95% 4/2/2026 12,438 12,375 12,420 DecoPac, Inc. +*\ (2) (3) (7) Non-durable Consumer Goods L + 4.25% 6.01% 9/29/2024 12,336 12,233 12,292 Dent Wizard International Corporation +\ (2) (3) Automotive L + 4.00% 5.70% 4/7/2020 36,880 36,843 36,717 DTI Holdco, Inc. +*\ (2) (3) High Tech Industries L + 4.75% 6.68% 9/30/2023 18,885 18,771 17,611 Eliassen Group, LLC +\ (2) (3) Business Services L + 4.50% 6.20% 11/5/2024 7,581 7,548 7,579 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. +\# (2) (3) Healthcare & Pharmaceuticals L + 3.75% 5.45% 2/14/2025 21,772 21,634 21,751 Excel Fitness Holdings, Inc. +# (2) (3) Hotel, Gaming & Leisure L + 5.25% 6.95% 10/7/2025 25,000 24,758 24,875 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. ^+*\ (2) (3) (7) Energy: Oil & Gas L + 5.00% 6.74% 11/17/2023 33,157 32,678 32,972 Jensen Hughes, Inc. \+^* (2) (3) (7) Utilities: Electric L + 4.50% 6.24% 3/22/2024 33,909 33,757 33,550 KAMC Holdings, Inc. +# (2) (3) Energy: Electricity L + 4.00% 5.91% 8/14/2026 13,965 13,899 13,881 MAG DS Corp. ^+\ (2) (3) (7) Aerospace & Defense L + 4.75% 6.46% 6/6/2025 28,471 28,242 28,286 Maravai Intermediate Holdings, LLC +\# (2) (3) Healthcare & Pharmaceuticals L + 4.25% 6.00% 8/2/2025 29,625 29,378 29,400 Marco Technologies, LLC ^+\ (2) (3) (7) Media: Advertising, Printing & Publishing L + 4.25% 6.16% 10/30/2023 7,463 7,410 7,463 145 Table of Contents Consolidated Schedule of Investments as of December 31, 2019 Investments (1) Footnotes Industry Reference Rate & Spread (2) Interest Rate (2) Maturity Date Par/ Principal Amount Amortized Cost (4) Fair Value (5) Mold-Rite Plastics, LLC +\ (2) (3) Chemicals, Plastics & Rubber L + 4.25% 5.95% 12/14/2021 $ 14,557 $ 14,519 $ 14,524 MSHC, Inc. ^+*\ (2) (3) (7) Construction & Building L + 4.25% 5.95% 12/31/2024 38,251 38,138 38,166 Newport Group Holdings II, Inc. \+# (2) (3) Banking, Finance, Insurance & Real Estate L + 3.75% 5.65% 9/13/2025 23,715 23,487 23,663 Odyssey Logistics & Technology Corp. +*\# (2) (3) Transportation: Cargo L + 4.00% 5.70% 10/12/2024 39,013 38,859 38,763 Output Services Group ^+\ (2) (3) (7) Media: Advertising, Printing & Publishing L + 4.50% 6.20% 3/27/2024 19,621 19,570 19,469 PAI Holdco, Inc. +*\ (2) (3) Automotive L + 4.25% 6.35% 1/5/2025 19,532 19,458 19,532 Park Place Technologies, Inc. +\# (2) (3) High Tech Industries L + 4.00% 5.70% 3/28/2025 22,566 22,489 22,566 Pasternack Enterprises, Inc. +\ (2) (3) Capital Equipment L + 4.00% 5.70% 7/2/2025 22,755 22,742 22,653 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. +\ (2) (3) Healthcare & Pharmaceuticals L + 4.00% 5.70% 6/11/2023 11,320 11,296 11,302 Premise Health Holding Corp. ^+\# (2) (3) (7) Healthcare & Pharmaceuticals L + 3.50% 5.60% 7/10/2025 13,723 13,665 13,501 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 Q Holding Company +*\# (2) (3) Automotive L + 5.00% 6.70% 12/31/2023 21,955 21,777 21,922 QW Holding Corporation (Quala) ^+* (2) (3) (7) Environmental Industries L + 5.75% 7.73% 8/31/2022 11,630 11,449 11,531 Radiology Partners, Inc. +\# (2) (3) Healthcare & Pharmaceuticals L + 4.75% 6.66% 7/9/2025 28,719 28,590 28,768 RevSpring Inc. +*\# (2) (3) Media: Advertising, Printing & Publishing L + 4.00% 5.95% 10/11/2025 24,750 24,631 24,608 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. +* (2) (3) High Tech Industries L + 5.00% 6.70% 10/30/2023 23,765 23,672 18,180 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: Consumer L + 6.75% 8.85% 9/28/2022 18,045 17,789 18,045 The Original Cakerie, Ltd. (Canada) +* (2) (3) (7) Beverage, Food & Tobacco L + 5.00% 6.84% 7/20/2022 8,928 8,897 8,887 The Original Cakerie, Ltd. (Canada) ^* (2) (3) (7) Beverage, Food & Tobacco L + 4.50% 6.34% 7/20/2022 6,826 6,801 6,790 ThoughtWorks, Inc. +*\ (2) (3) Business Services L + 4.00% 5.70% 10/11/2024 11,824 11,794 11,824 U.S. Acute Care Solutions, LLC +\* (2) (3) Healthcare & Pharmaceuticals L + 5.00% 6.91% 5/15/2021 31,431 31,331 29,869 U.S. TelePacific Holdings Corp. +*\ (2) (3) Telecommunications L + 5.00% 7.10% 5/2/2023 26,660 26,499 25,430 Valet Waste Holdings, Inc. +\ (2) (3) Construction & Building L + 3.75% 5.70% 9/28/2025 11,850 11,825 11,688 Welocalize, Inc. +^ (2) (3) (7) Business Services L + 4.50% 6.21% 12/23/2023 23,038 22,788 22,787 WIRB - Copernicus Group, Inc. +*\ (2) (3) (7) Healthcare & Pharmaceuticals L + 4.25% 5.95% 8/15/2022 20,888 20,822 20,887 WRE Holding Corp. ^+* (2) (3) (7) Environmental Industries L + 5.00% 6.91% 1/3/2023 7,431 7,372 7,304 Zywave, Inc. +*\ (2) (3) (7) High Tech Industries L + 5.00% 6.93% 11/17/2022 19,228 19,107 19,211 First Lien Debt Total $ 1,231,436 $ 1,223,215 146 Table of Contents Consolidated Schedule of Investments as of December 31, 2019 Investments (1) Footnotes Industry Reference Rate & Spread (2) Interest Rate (2) Maturity Date Par/ Principal Amount Amortized Cost (4) Fair Value (5) Second Lien Debt (1.75% of fair value) DBI Holding, LLC ^* (2) (3) (8) Transportation: Cargo 8.00% PIK 8.00% 2/1/2026 $ 21,150 $ 20,697 $ 21,150 Zywave, Inc. * (2) (3) High Tech Industries L + 9.00% 10.94% 11/17/2023 666 660 664 Second Lien Debt Total $ 21,357 $ 21,814 Equity Investments (0.15% of fair value) DBI Holding, LLC ^ Transportation: Cargo $ 16,957 $ 5,364 $ 1,810 Equity Investments Total $ 5,364 $ 1,810 Total Investments $ 1,258,157 $ 1,246,839 ^ 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"). 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. Credit Fund Sub has entered into a revolving credit facility (the “Credit Fund Sub Facility”). The lenders of the Credit Fund Sub Facility have a first lien security interest in substantially all of the assets of Credit Fund Sub. 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”). Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub, 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”). Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub, the 2017-1 Issuer or Credit Fund Warehouse II. # Denotes that all or a portion of the assets are owned by the Credit Fund Warehouse II. Credit Fund Warehouse II has entered into a revolving credit facility (the "Credit Fund Warehouse II"). 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. 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. As of December 31, 2019, the geographical composition of investments as a percentage of fair value was 1.26% in Canada and 98.74% in the United States. Certain portfolio company investments are subject to contractual restrictions on sales. (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. Prime Rate), which generally resets quarterly. For each such loan, Credit Fund has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2019. As of December 31, 20191, the reference rates for Credit Fund's variable rate loans were the 30-day LIBOR at 1.75%, the 90-day LIBOR at 1.91% and the 180-day LIBOR at 1.91%. (3) Loan includes interest rate floor feature, which is generally 1.00%. (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. (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 these consolidated financial statements. (6) 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: Surgical Information Systems, LLC (0.89%). 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 payments. 147 Table of Contents (7) As of December 31, 2019, Credit Fund and Credit Fund Sub had the following unfunded commitments to fund delayed draw and revolving senior secured loans: First Lien Debt – unfunded delayed draw and revolving term loans commitments Type Unused Fee Par/ Principal Amount Fair Value Advanced Instruments, LLC Revolver 0.50 % $ 563 $ (2) AmeriLife Group, LLC Delayed Draw 1.00 298 (1) Anchor Packaging, Inc. Delayed Draw 1.00 4,487 (1) AQA Acquisition Holding, Inc. Revolver 0.50 2,459 (11) Borchers, Inc. Revolver 0.50 1,935 (3) Clearent Newco, LLC Delayed Draw 1.00 6,636 (110) DecoPac, Inc. Revolver 0.50 2,143 (7) EIP Merger Sub, LLC (Evolve IP) Revolver 0.50 1,680 — EIP Merger Sub, LLC (Evolve IP) Delayed Draw 1.00 2,240 — HMT Holding Inc. Revolver 0.50 6,173 (29) Jensen Hughes, Inc. Revolver 0.50 1,136 (11) Jensen Hughes, Inc. Delayed Draw 1.00 2,365 (23) MAG DS Corp. Revolver 0.50 2,188 (13) Marco Technologies, LLC Delayed Draw 1.00 7,500 — MSHC, Inc. Delayed Draw 1.00 1,913 (4) Output Services Group Delayed Draw 4.25 116 (1) Pathway Vet Alliance LLC Delayed Draw 1.00 19,867 68 Premise Health Holding Corp. Delayed Draw 1.00 1,103 (17) Propel Insurance Agency, LLC Revolver 0.50 2,381 (10) Propel Insurance Agency, LLC Delayed Draw 0.50 7,143 (31) QW Holding Corporation (Quala) Revolver 0.50 5,498 (31) QW Holding Corporation (Quala) Delayed Draw 1.00 217 (1) Situs Group Holdings Corporation Delayed Draw 1.00 1,216 (1) T2 Systems, Inc. Revolver 0.50 1,369 — The Original Cakerie, Ltd. (Canada) Revolver 0.50 1,199 (5) Welocalize, Inc. Revolver 0.50 2,057 (21) WIRB - Copernicus Group, Inc. Revolver 0.50 1,000 — WIRB - Copernicus Group, Inc. Delayed Draw 1.00 2,592 — WRE Holding Corp. Revolver 0.50 441 (6) WRE Holding Corp. Delayed Draw 1.00 1,981 (25) Zywave, Inc. Revolver 0.50 998 (1) Total unfunded commitments $ 92,894 $ (297) (8) Loan was on non-accrual status as of December 31, 2019. Debt Credit Fund Facilities The Credit Fund, Credit Fund Sub and Credit Fund Warehouse II are party to separate credit facilities as described below. 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. 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. Credit Fund Facility Credit Fund Sub Facility Credit Fund Warehouse Facility Credit Fund Warehouse II Facility Outstanding balance as of December 31, 2018 $ 112,000 $ 471,134 $ 101,044 $ — Borrowings 126,200 223,870 34,544 97,571 Repayments (145,200) (351,498) (135,588) — Outstanding balance as of December 31, 2019 93,000 343,506 — 97,571 Borrowings 63,500 269,313 — 54,373 Repayments (156,500) (191,960) — (58,542) Outstanding balance as of December 31, 2020 $ — $ 420,859 $ — $ 93,402 148 Table of Contents Credit Fund Facility. 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. The maturity date of the Credit Fund Facility is March 21, 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. 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. The facility is secured by a first lien security interest in substantially all of the portfolio investments held by Credit Fund Sub. The maturity date of the Credit Fund Sub Facility is May 22, 2024. Amounts borrowed under the Credit Fund Sub Facility bear interest at a rate of LIBOR plus 2.25%. Credit Fund Warehouse Facility . On November 26, 2018, Credit Fund Warehouse closed on the Credit Fund Warehouse Facility with lenders. The Credit Fund Warehouse Facility provided for secured borrowings during the applicable revolving period up to an amount equal to $150,000. The Credit Fund Warehouse Facility was secured by a first lien security interest in substantially all of the portfolio investments held by the Credit Fund Warehouse. The maturity date of the Credit Fund Warehouse Facility was November 26, 2019. Amounts borrowed under the Credit Fund Warehouse Facility bore interest at a rate of LIBOR plus 1.05%. Effective May 15, 2019, the Warehouse Facility changed its name from “MMCF Warehouse, LLC” to “MMCF CLO 2019-2, LLC” and secured borrowings outstanding were repaid in connection with the 2019-2 Debt Securitization. Credit Fund Warehouse II Facility . On August 16, 2019, Credit Fund Warehouse II closed on a revolving credit facility (the "Credit Fund Warehouse II Facility") with lenders. The Credit Fund Warehouse II Facility provides for secured borrowings during the applicable revolving period up to an amount equal to $150,000. The Credit Fund Warehouse II Facility is secured by a first lien security interest in substantially all of the portfolio investments held by the Credit Fund Warehouse II Facility. The maturity date of the Credit Fund Warehouse II Facility is August 16, 2022. Amounts borrowed under the Credit Fund Warehouse II Facility during the first 12 months bore interest at a rate of LIBOR + 1.05%, and amounts borrowed in the final 12 months will bear interest at LIBOR plus 1.50%. 2017-1 Notes On December 19, 2017, Credit Fund completed the 2017-1 Debt Securitization. The notes offered in the 2017-1 Debt Securitization (the “2017-1 Notes”) were issued by the 2017-1 Issuer, a wholly owned and consolidated subsidiary of Credit Fund, and are secured by a diversified portfolio of the 2017-1 Issuer consisting primarily of first and second lien senior secured loans. The 2017-1 Debt Securitization was executed through a private placement of the 2017-1 Notes, consisting of: • $231,700 of Aaa/AAA Class A-1 Notes, which bear interest at the three-month LIBOR plus 1.17%; • $48,300 of Aa2/AA Class A-2 Notes, which bear interest at the three-month LIBOR plus 1.50%; • $15,000 of A2/A Class B-1 Notes, which bear interest at the three-month LIBOR plus 2.25%; • $9,000 of A2/A Class B-2 Notes which bear interest at 4.30%; • $22,900 of Baa2/BBB Class C Notes which bear interest at the three-month LIBOR plus 3.20%; and • $25,100 of Ba2/BB Class D Notes which bear interest at the three-month LIBOR plus 6.38%. The 2017-1 Notes are 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. The 2017-1 Notes were fully redeemed during the year ended December 31, 2020. As of December 31, 2019, the 2017-1 Issuer was in compliance with all covenants and other requirements of the indenture. 149 Table of Contents 2019-2 Notes On May 21, 2019, Credit Fund completed the 2019-2 Debt Securitization. The notes offered in the 2019-2 Debt Securitization (the “2019-2 Notes”) were issued by the 2019-2 Issuer, a wholly owned and consolidated subsidiary of Credit Fund, and are secured by a diversified portfolio of the 2019-2 Issuer consisting primarily of first and second lien senior secured loans. The 2019-2 Debt Securitization was executed through a private placement of the 2019-2 Notes, consisting of: • $233,000 of Aaa/AAA Class A-1 Notes, which bear interest at the three-month LIBOR plus 1.50%; • $48,000 of Aa2/AA Class A-2 Notes, which bear interest at the three-month LIBOR plus 2.40%; • $23,000 of A2/A Class B Notes, which bear interest at the three-month LIBOR plus 3.45%; • $27,000 of Baa2/BBB- Class C Notes which bear interest at the three-month LIBOR plus 4.55%; and • $21,000 of Ba2/BB- Class D Notes which bear interest at the three-month LIBOR plus 8.03%. The 2019-2 Notes are scheduled to mature on April 15, 2029. Credit Fund received 100% of the preferred interests issued by the 2019-2 Issuer (the “2019-2 Issuer Preferred Interests”) on the closing date of the 2019-2 Debt Securitization in exchange for Credit Fund’s contribution to the 2019-2 Issuer of the initial closing date loan portfolio. The 2019-2 Issuer Preferred Interests do not bear interest and had a nominal value of $48,300 at closing. As of December 31, 2020 and 2019, the 2019-2 Issuer was in compliance with all covenants and other requirements of the indenture. 6. MIDDLE MARKET CREDIT FUND II, LLC Overview 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. Credit Fund II primarily invests in senior secured loans of middle market companies. Credit Fund II is managed by a four-member board, on which the Company and CCLF have equal representation. Establishing a quorum for Credit Fund II's board requires at least one of the Company's representatives and one of CCLF's representatives. The Company and CCLF have 84.13% and 15.87% economic ownership of Credit Fund II, respectively. 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. 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. 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 . Credit Fund II is expected to make only limited new investments in senior secured loans of middle market companies. 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. 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). Middle Market Credit Fund II SPV, LLC (“Credit Fund II Sub”), a Delaware limited liability company, was formed on September 4, 2020. 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. 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). 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. 150 Table of Contents Credit Fund II Senior Notes On November 3, 2020, Credit Fund II Sub closed on the Credit Fund II Senior Notes (the “Credit Fund II Senior Notes”) with lenders. The Credit Fund II Senior Notes provides for secured borrowings totaling $157,500 with two tranches, A-1 and A-2 outstanding. The facility is secured by a first lien security interest in substantially all of the portfolio investments held by Credit Fund II Sub. The maturity date of the Credit Fund II Senior Notes Sub Facility is November 3, 2030. 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%. The A-1 Notes were rated AAA, and the A-2 Notes were rated AA by DBRS Morningstar. 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. As of December 31, 2020, Credit Fund II Sub was in compliance with all covenants and other requirements of its respective credit agreements. Selected Financial Data 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. Below is certain summarized consolidated information for Credit Fund II as of December 31, 2020. As of December 31, 2020 ASSETS Investments, at fair value (amortized cost of $245,312) $ 246,421 Cash and cash equivalents 1,385 Other assets 3,436 Total assets $ 251,242 LIABILITIES AND MEMBERS’ EQUITY Liabilities Notes payable, net of unamortized debt issuance costs of $875 $ 156,625 Other liabilities 2,675 Total liabilities 159,300 Members’ equity Members’ contributions 90,805 Members’ distributions (1,718) Accumulated income from operations 2,855 Total members' equity (1) 91,942 Total liabilities and members’ equity $ 251,242 (1) As of December 31, 2020, the fair value of Company's ownership interest in the members' equity was $77,395. For the Year Ended December 31, 2020 Total investment income $ 3,005 Expenses Interest and credit facility expenses 766 Other expenses 498 Total expenses 1,264 Net investment income (loss) 1,741 Net change in unrealized appreciation (depreciation) on investments 1,114 Net increase (decrease) resulting from operations $ 2,855 151 Table of Contents 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: As of December 31, 2020 Senior secured loans (1) $ 248,172 Weighted average yields of senior secured loans based on amortized cost (2) 7.32 % Weighted average yields of senior secured loans based on fair value (2) 7.29 % Number of portfolio companies in Credit Fund II 44 Average amount per portfolio company (1) $ 5,640 Percentage of portfolio at floating interest rates (3) (4) 99.1 % Percentage of portfolio at fixed interest rates (4) 0.9 % Fair value of loans with PIK provisions $ 8,856 Percentage of portfolio with PIK provisions (4) 3.6 % (1) At par/principal amount. (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. 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. 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. Actual yields earned over the life of each investment could differ materially from the yields presented above. (3) Floating rate debt investments are generally subject to interest rate floors. (4) Percentages based on fair value. 152 Table of Contents Consolidated Schedule of Investments as of December 31, 2020 Investments (1) Footnotes Industry Reference Rate & Spread (2) Interest Rate (2) Maturity Date Par/ Principal Amount Amortized Cost (4) Fair Value (5) First Lien Debt (90.10%) of fair value) Airnov, Inc. ^ (2)(3) Containers, Packaging & Glass L + 5.25% 6.25% 12/19/2025 $ 1,500 $ 1,481 $ 1,501 Alpine SG, LLC ^ (2)(3) High Tech Industries L + 5.75% 6.75% 11/16/2022 4,411 4,390 4,378 American Physician Partners, LLC ^ (2)(3) Healthcare & Pharmaceuticals L + 6.75% 7.75% 12/21/2021 8,725 8,679 8,265 AMS Group HoldCo, LLC ^ (2)(3) Transportation: Cargo L + 6.50% 7.50% 9/29/2023 8,182 8,096 8,079 Apptio, Inc. ^ (2)(3) Software L + 7.25% 8.25% 1/10/2025 5,357 5,278 5,437 Aurora Lux FinCo S.Á.R.L. (Luxembourg) ^ (2)(3) Software L + 5.75% 6.75% 12/24/2026 4,400 4,303 4,018 Avenu Holdings, LLC ^ (2)(3) Sovereign & Public Finance L + 5.25% 6.25% 9/28/2024 997 987 997 BMS Holdings III Corp. ^ (2)(3) Construction & Building L + 5.25% 6.25% 9/30/2026 3,308 3,239 3,270 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 Chartis Holding, LLC ^ (2)(3) Business Services L + 5.50% 6.50% 5/1/2025 1,496 1,474 1,497 Comar Holding Company, LLC ^ (2)(3) Containers, Packaging & Glass L + 5.50% 6.50% 6/18/2024 8,799 8,692 8,832 Cority Software Inc. (Canada) ^ (2)(3) Software L + 5.25% 6.25% 7/2/2026 8,800 8,655 8,862 Ensono, LP ^ (2)(3) Telecommunications L + 5.25% 5.40% 6/27/2025 6,292 6,246 6,245 Ethos Veterinary Health LLC ^ (2)(3) Consumer Services L + 4.75% 4.90% 5/15/2026 8,182 8,117 8,070 EvolveIP, LLC ^ (2)(3) Telecommunications L + 5.75% 6.75% 6/7/2023 8,799 8,784 8,790 Innovative Business Services, LLC ^ (2)(3) High Tech Industries L + 5.50% 6.50% 4/5/2023 2,200 2,162 2,159 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 Kaseya, Inc. ^ (2)(3) High Tech Industries L + 4.00%, 3.00% PIK 8.00% 5/2/2025 8,822 8,688 8,856 Mailgun Technologies, Inc. ^ (2)(3) High Tech Industries L + 5.00% 6.00% 3/26/2025 8,478 8,347 8,330 National Technical Systems, Inc. ^ (2)(3) Aerospace & Defense L + 5.50% 6.50% 6/12/2023 8,800 8,778 8,733 NMI AcquisitionCo, Inc. ^ (2)(3) High Tech Industries L + 5.00% 6.00% 9/6/2022 8,799 8,732 8,711 Paramit Corporation ^ (2)(3) Capital Equipment L + 4.50% 5.50% 5/3/2025 1,000 992 980 PPC Flexible Packaging, LLC ^ (2)(3) Containers, Packaging & Glass L + 6.00% 7.00% 11/23/2024 4,400 4,358 4,386 Redwood Services Group, LLC ^ (2)(3) High Tech Industries L + 6.00% 7.00% 6/6/2023 3,300 3,279 3,291 Reladyne, Inc. ^ (2)(3) Wholesale L + 5.00% 6.00% 7/22/2022 6,484 6,431 6,514 Riveron Acquisition Holdings, Inc. ^ (2)(3) Banking, Finance, Insurance & Real Estate L + 5.75% 6.75% 5/22/2025 8,257 8,131 8,312 RSC Acquisition, Inc. ^ (2)(3) Banking, Finance, Insurance & Real Estate L + 5.50% 6.50% 11/1/2026 8,487 8,341 8,572 Smile Doctors, LLC ^ (2)(3) Healthcare & Pharmaceuticals L + 6.00% 7.00% 10/6/2022 6,509 6,507 6,379 Sovos Brands Intermediate, Inc. ^ (2)(3) Beverage, Food & Tobacco L + 4.75% 4.96% 11/20/2025 2,200 2,182 2,181 Superior Health Linens, LLC ^ (2)(3) Business Services L + 6.50% 7.50% 9/30/2021 7,199 7,178 7,162 T2 Systems, Inc. ^ (2)(3) Transportation: Consumer L + 6.75% 7.75% 9/28/2022 8,799 8,713 8,799 TCFI Aevex LLC ^ (2)(3) Aerospace & Defense L + 6.00% 7.00% 3/18/2026 1,718 1,688 1,712 TSB Purchaser, Inc. ^ (2)(3) Media: Advertising, Printing & Publishing L + 6.00% 7.00% 5/14/2024 8,799 8,663 8,729 Turbo Buyer, Inc. ^ (2)(3) Automotive L + 5.25% 6.25% 12/2/2025 8,174 8,001 8,249 153 Table of Contents Consolidated Schedule of Investments as of December 31, 2020 Investments (1) Footnotes Industry Reference Rate & Spread (2) Interest Rate (2) Maturity Date Par/ Principal Amount Amortized Cost (4) Fair Value (5) US INFRA SVCS Buyer, LLC ^ (2)(3) Environmental Industries L + 6.00% 7.00% 4/13/2026 $ 3,300 $ 3,240 $ 3,292 VRC Companies, LLC ^ (2)(3) Business Services L + 6.50% 7.50% 3/31/2023 4,311 4,271 4,311 Zemax Software Holdings, LLC ^ (2)(3) Software L + 5.75% 6.75% 6/25/2024 4,400 4,363 4,294 Zenith Merger Sub, Inc. ^ (2)(3) Business Services L + 5.25% 6.25% 12/13/2023 4,399 4,370 4,367 First Lien Debt Total $ 220,960 $ 221,951 Second Lien Debt (9.90%) of fair value 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 AQA Acquisition Holding, Inc. ^ (2)(3) High Tech Industries L + 8.00% 9.00% 5/24/2024 1,000 993 1,000 Quartz Holding Company ^ (2)(3) Software L + 8.00% 8.15% 4/2/2027 4,852 4,771 4,815 Tank Holding Corp. ^ (2)(3) Capital Equipment L + 8.25% 8.40% 3/26/2027 5,514 5,436 5,394 Ultimate Baked Goods MIDCO, LLC ^ (2)(3) Beverage, Food & Tobacco L + 8.00% 9.00% 8/9/2026 5,514 5,428 5,257 World 50, Inc. (6) Business Services 11.50% 11.50% 1/9/2027 2,365 2,323 2,328 Second Lien Debt Total $ 24,352 $ 24,470 Total Investments $ 245,312 $ 246,421 ^ Denotes that all or a portion of the assets are owned by Credit Fund II Sub. Credit Fund II Sub has entered into the Credit Fund II Sub Notes. 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. Accordingly, such assets are not available to creditors of Credit Fund II. (1) Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States. 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. Certain portfolio company investments are subject to contractual restrictions on sales. (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. Prime Rate), which generally resets quarterly. 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. 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%. (3) Loan includes interest rate floor feature, which is generally 1.00%. (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. (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. (6) The Company has determined the indicated investments are non-qualifying assets under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company's total assets. (7) Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company . 7. BORROWINGS As of December 31, 2020, the Company is party to the Credit Facility as described below. Through December 11, 2020, the SPV was party to the SPV Credit Facility as described below. In accordance with the Investment Company Act, the Company is currently only allowed to borrow amounts such that its asset coverage, as defined in the Investment Company Act, is at least 150% after such borrowing. As of December 31, 2020, asset coverage was 182.09% and the Company was in compliance with all covenants and other requirements of the Credit Facility. As of December 31, 2019, asset coverage was 181.01%, and the Company and the SPV 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 years ended December 31, 2020, 2019 and 2018, and the outstanding balances under the credit facilities for the respective periods. 154 Table of Contents For the Year Ended and as of December 31, 2020 2019 2018 Outstanding borrowing, beginning of period $ 616,543 $ 514,635 $ 562,893 Borrowings 452,833 755,179 812,650 Repayments (725,469) (655,209) (860,908) Foreign currency translation 4,042 1,938 — Outstanding borrowing, end of period $ 347,949 $ 616,543 $ 514,635 SPV Credit Facility On May 24, 2013, the SPV closed 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. On December 11, 2020, the SPV repaid all outstanding amounts under the SPV Credit Facility and the facility was terminated. When the facility terminated, there was one-time acceleration of amortization of deferred financing costs in the amount of $971. 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. On December 31, 2019, the Company irrevocably reduced its commitments under the SPV Credit Facility to $275,000. The SPV Credit Facility had a revolving period through May 21, 2021 and a maturity date of May 23, 2023. Borrowings under the SPV Credit Facility bore interest initially at the applicable commercial paper rate (if the lender is a conduit lender) or LIBOR (or, if applicable, a rate based on the prime rate or federal funds rate) plus 2.00% per year. The SPV was also required to pay an undrawn commitment fee of between 0.50% and 0.75% per year depending on the drawings under the SPV Credit Facility. Payments under the SPV Credit Facility were made quarterly. The lenders had a first lien security interest on substantially all of the assets of the SPV. Credit Facility On March 21, 2014, the Company closed on the Credit Facility, 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. Proceeds of the Credit Facility may be used for general corporate purposes, including the funding of portfolio investments. Maximum capacity under the Credit Facility may be increased to $900,000 through the exercise by the Company of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing. The Credit Facility includes a $50,000 limit for swingline loans and a $20,000 limit for letters of credit. The Company may borrow amounts in U.S. dollars or certain other permitted currencies. Amounts drawn under the Credit Facility, including amounts drawn in respect of letters of credit, bear interest at either LIBOR plus an applicable spread of 2.25%, or an “alternative base rate” (which is the highest of a prime rate, the federal funds effective rate plus 0.50%, or one month LIBOR plus 1.00%) plus an applicable spread of 1.25%. The Company may elect either the LIBOR or the “alternative base rate” at the time of drawdown, and loans may be converted from one rate to another at any time, subject to certain conditions. The Company also pays a fee of 0.375% on undrawn amounts under the Credit Facility and, in respect of each undrawn letter of credit, a fee and interest rate equal to the then-applicable margin under the Credit Facility while the letter of credit is outstanding. The availability period under the Credit Facility will terminate on October 28, 2024 and the Credit Facility will mature on October 28, 2025. During the period from October 29, 2024 to October 28, 2025, the Company will be obligated to make mandatory prepayments under the Credit Facility out of the proceeds of certain asset sales, other recovery events and equity and debt issuances. 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. 155 Table of Contents Summary of Facilities The Facilities consisted of the following as of December 31, 2020 and 2019: December 31, 2020 Total Facility Borrowings Outstanding Unused Portion (1) Amount Available (2) Credit Facility $ 688,000 $ 347,949 $ 340,051 $ 207,365 Total $ 688,000 $ 347,949 $ 340,051 $ 207,365 December 31, 2019 Total Facility Borrowings Outstanding Unused Portion (1) Amount Available (2) SPV Credit Facility $ 275,000 $ 232,469 $ 42,531 $ 4,225 Credit Facility 688,000 384,074 303,926 264,198 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. For the years ended December 31, 2020, 2019 and 2018, the components of interest expense and credit facility fees were as follows: For the years ended December 31, 2020 2019 2018 Interest expense $ 16,127 $ 30,221 $ 37,801 Facility unused commitment fee 1,766 1,263 1,260 Amortization of deferred financing costs 1,886 1,618 901 Other fees 109 198 134 Total interest expense and credit facility fees $ 19,888 $ 33,300 $ 40,096 Cash paid for interest expense $ 17,759 $ 30,312 $ 34,676 Average principal debt outstanding $ 543,099 $ 676,347 $ 864,734 Weighted average interest rate 2.92 % 4.41 % 4.32 % As of December 31, 2020 and 2019, the components of interest and credit facility fees payable were as follows: As of December 31, 2020 2019 Interest expense payable $ 119 $ 2,201 Unused commitment fees payable 4 187 Other credit facility fees payable 14 30 Interest and credit facility fees payable $ 137 $ 2,418 Weighted average interest rate (based on floating LIBOR rates) 2.59 % 3.88 % 8. NOTES PAYABLE Senior Notes 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. 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", and together with the 2019 Notes, the "Senior Notes"). The 2020 Notes bear interest an interest rate of 4.500% and interest is payable quarterly, beginning December 31, 2020. 156 Table of Contents The interest rate on the Senior Notes is 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 Company is obligated to offer to repay the Senior Notes at par if certain change in control events occur. 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. Interest expense on the Senior Notes during the year ended December 31, 2020 was $5,644, and was not significant for the year ended December 31, 2019. The note purchase agreement, as supplemented by the first supplement, 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, as well as 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. As of December 31, 2020, the Company was in compliance with these terms and conditions. 2015-1R Notes On June 26, 2015, the Company completed the 2015-1 Debt Securitization. The 2015-1 Notes were issued by the 2015-1 Issuer, a wholly-owned and consolidated subsidiary of the Company. The 2015-1 Debt Securitization was executed through a private placement of the 2015-1 Notes, consisting of: • $160,000 of Aaa/AAA Class A-1A Notes; • $40,000 of Aaa/AAA Class A-1B Notes; • $27,000 of Aaa/AAA Class A-1C Notes; and • $46,000 of Aa2 Class A-2 Notes. The 2015-1 Notes were issued at par and were scheduled to mature on July 15, 2027. The Company received 100% of the preferred interests issued by the 2015-1 Issuer (the “2015-1 Issuer Preferred Interests”) on the closing date of the 2015-1 Debt Securitization in exchange for the Company’s contribution to the 2015-1 Issuer of the initial closing date loan portfolio. The 2015-1 Issuer Preferred Interests do not bear interest and had a nominal value of $125,900 at closing. In connection with the contribution, the Company made customary representations, warranties and covenants to the 2015-1 Issuer in the purchase agreement. The Class A-1A, Class A-1B and Class A-1C and Class A-2 Notes are included in these consolidated financial statements. The 2015-1 Issuer Preferred Interests were eliminated in consolidation. On the closing date of the 2015-1 Debt Securitization, the 2015-1 Issuer effected a one-time distribution to the Company of a substantial portion of the proceeds of the private placement of the 2015-1 Notes, net of expenses, which distribution was used to repay a portion of certain amounts outstanding under the SPV Credit Facility and the Credit Facility. As part of the 2015-1 Debt Securitization, certain first and second lien senior secured loans were distributed by the SPV to the Company pursuant to a distribution and contribution agreement. On August 30, 2018, the Company and the 2015-1 Issuer closed the 2015-1 Debt Securitization Refinancing. On the closing date of the 2015-1 Debt Securitization Refinancing, the 2015-1 Issuer, among other things: (a) refinanced the issued Class A-1A Notes by redeeming in full the Class A-1A Notes and issuing new AAA Class A-1-1-R Notes in an aggregate principal amount of $234,800 which bear interest at the three-month LIBOR plus 1.55%; (b) refinanced the issued Class A-1B Notes by redeeming in full the Class A-1B Notes and issuing new AAA Class A-1-2-R Notes in an aggregate principal amount of $50,000 which bear interest at the three-month LIBOR plus 1.48% for the first 24 months and the three-month LIBOR plus 1.78% thereafter; (c) refinanced the issued Class A-1C Notes by redeeming in full the Class A-1C Notes and issuing new AAA Class A-1-3-R Notes in an aggregate principal amount of $25,000 which bear interest at 4.56%; (d) refinanced the issued Class A-2 Notes by redeeming in full the Class A-2 Notes and issuing new Class A-2-R Notes in an aggregate principal amount of $66,000 which bear interest at the three-month LIBOR plus 2.20%; (e) issued new single-A Class B Notes and BBB- Class C Notes in aggregate principal amounts of $46,400 and $27,000, respectively, which bear interest at the three-month LIBOR plus 3.15% and the three-month LIBOR plus 4.00%, respectively; 157 Table of Contents (f) reduced the 2015-1 Issuer Preferred Interests by approximately $21,375 from a nominal value of $125,900 to approximately $104,525 at close; and (g) extended the reinvestment period end date and maturity date applicable to the 2015-1 Issuer to October 15, 2023 and October 15, 2031, respectively. Following the 2015-1 Debt Securitization Refinancing, the Company retained the 2015-1 Issuer Preferred Interests. The 2015-1R Notes in the 2015-1 Debt Securitization Refinancing were issued by the 2015-1 Issuer and are secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans. On the closing date of the 2015-1 Debt Securitization Refinancing, the 2015-1 Issuer effected a one-time distribution to the Company of a substantial portion of the proceeds of the private placement of the 2015-1R Notes, net of expenses, which distribution was used to repay a portion of certain amounts outstanding under the SPV Credit Facility and the Credit Facility. As part of the 2015-1 Debt Securitization Refinancing, certain first and second lien senior secured loans were distributed by the SPV to the Company pursuant to a distribution and contribution agreement. The Company contributed the loans that comprised the initial closing date loan portfolio (including the loans distributed to the Company from the SPV) to the 2015-1 Issuer pursuant to a contribution agreement. Future loan transfers from the Company to the 2015-1 Issuer will be made pursuant to a sale agreement and are subject to the approval of the Company’s Board of Directors. Assets of the 2015-1 Issuer are not available to the creditors of the SPV or the Company. In connection with the issuance and sale of the 2015-1R Notes, the Company made customary representations, warranties and covenants in the purchase agreement. During the reinvestment period, pursuant to the indenture governing the 2015-1R Notes, all principal collections received on the underlying collateral may be used by the 2015-1 Issuer to purchase new collateral under the direction of Investment Adviser in its capacity as collateral manager of the 2015-1 Issuer and in accordance with the Company’s investment strategy. The Investment Adviser serves as collateral manager to the 2015-1 Issuer under a collateral management agreement (the “Collateral Management Agreement”). Pursuant to the Collateral Management Agreement, the 2015-1 Issuer pays management fees (comprised of base management fees, subordinated management fees and incentive management fees) to the Investment Adviser for rendering collateral management services. As per the Collateral Management Agreement, for the period the Company retains all of the 2015-1 Issuer Preferred Interests, the Investment Adviser does not earn management fees for providing such collateral management services. The Company currently retains all of the 2015-1 Issuer Preferred Interests, thus the Investment Adviser did not earn any management fees from the 2015-1 Issuer for the year ended December 31, 2020 and 2019. Any such waived fees may not be recaptured by the Investment Adviser. Pursuant to an undertaking by the Company in connection with the 2015-1 Debt Securitization Refinancing, the Company has agreed to hold on an ongoing basis the 2015-1 Issuer Preferred Interests with an aggregate dollar purchase price at least equal to 5% of the aggregate outstanding amount of all collateral obligations by the 2015-1 Issuer for so long as any securities of the 2015-1 Issuer remain outstanding. As of December 31, 2020, the Company was in compliance with its undertaking. The 2015-1 Issuer pays ongoing administrative expenses to the trustee, independent accountants, legal counsel, rating agencies and independent managers in connection with developing and maintaining reports, and providing required services in connection with the administration of the 2015-1 Issuer. As of December 31, 2020, there were 61 first lien and second lien senior secured loans with a total fair value of approximately $512,321 and cash of $1,343 securing the 2015-1R Notes. The pool of loans in the securitization must meet certain requirements, including asset mix and concentration, term, agency rating, collateral coverage, minimum coupon, minimum spread and sector diversity requirements in the indenture governing the 2015-1R Notes. For the years ended December 31, 2020 and 2019, the effective annualized weighted average interest rates, which include amortization of debt issuance costs on the 2015-1R Notes and 2015-1 Notes, were 2.42% and 4.47%, respectively based on floating LIBOR rates, excluding the one-time impact of the 2015-1 Debt Securitization Refinancing. As of December 31, 2020 and 2019, the weighted average interest rates were 2.37% and 4.01%, respectively, based on floating LIBOR rates. 158 Table of Contents As of December 31, 2020 and 2019, $2,302 and $3,891, respectively, of interest expense was included in interest and credit facility fees payable. For the years ended December 31, 2020, 2019 and 2018, the components of interest expense on the 2015-1R and 2015-1 Notes were as follows: For the years ended December 31, 2020 2019 2018 Interest expense $ 13,802 $ 20,104 $ 14,079 Amortization of deferred financing costs 247 247 995 Total interest expense $ 14,049 $ 20,351 $ 15,074 Cash paid for interest expense $ 15,390 $ 19,669 $ 11,787 Related to the 2015-1 Debt Securitization Refinancing, $652 of debt issuance costs were immediately expensed on August 30, 2018 in lieu of continuing to amortize over the term of the notes. 9. COMMMITMENTS AND CONTINGENCIES A summary of significant contractual payment obligations was as follows as of December 31, 2020 and 2019: As of December 31, Payment Due by Period 2020 2019 Less than 1 Year $ — $ — 1-3 Years — — 3-5 Years 537,949 731,543 More than 5 Years 449,200 449,200 Total $ 987,149 $ 1,180,743 In the ordinary course of its business, the Company enters into contracts or agreements that contain indemnification or warranties. Future events could occur that lead to the execution of these provisions against the Company. The Company believes that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made in the consolidated financial statements as of December 31, 2020 and 2019 for any such exposure. The Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans as of the indicated dates: Par Value as of December 31, 2020 2019 Unfunded delayed draw commitments $ 73,292 $ 75,874 Unfunded revolving term loan commitments 76,216 74,016 Total unfunded commitments $ 149,508 $ 149,890 10. NET ASSETS The Company has the authority to issue 198,000,000 shares of common stock, $0.01 per share par value. Cumulative Convertible Preferred Stock On May 5, 2020, the Company 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. The Preferred Stock has a liquidation preference equal to $25 per share (the “Liquidation Preference”) plus any accumulated but unpaid dividends up to but excluding the date of distribution. 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. After May 5, 2027, the dividend rate will increase annually, in each case by 1.00% per annum. The Preferred Stock is convertible, in whole or in part, at the option of the holder of the Preferred Stock into the number of shares of common stock equal to the Liquidation Preference plus any accumulated but unpaid dividends, divided by an initial conversion price of $9.50, subject to certain adjustments to prevent dilution as set forth in the Company's Articles Supplementary. The conversion price as of December 31, 2020 was $9.50. At any time after May 5, 2023, the Company, with the approval of the Board of Directors, including a majority of the Independent Directors, will have the option to redeem all of 159 Table of Contents the Preferred Stock for cash consideration equal to the Liquidation Preference plus any accumulated but unpaid dividends. The holders of the Preferred Stock will have the right to convert all or a portion of their shares of Preferred Stock prior to the date fixed for such redemption. At any time after May 5, 2027, the holders of the Preferred Stock will have the option to require the Company to redeem any or all of the then-outstanding Preferred Stock upon 90 days’ notice. The form of consideration used in any such redemption is at the option of the Board of Directors, including a majority of the Independent Directors, and may be cash consideration equal to the Liquidation Preference plus any accumulated but unpaid dividends, or shares of common stock. Holders also have the right to redeem the Preferred Stock upon a Change in Control (as defined in the Article Supplementary). The following table summarizes the Company’s dividends declared on its preferred stock during the current fiscal year to-date. Unless otherwise noted, dividends were declared and paid, or are payable, in cash. Date Declared Record Date Payment Date Per Share Amount June 30, 2020 June 30, 2020 September 30, 2020 $ 0.277 September 30, 2020 September 30, 2020 September 30, 2020 0.423 December 31, 2020 December 31, 2020 December 31, 2020 0.438 Total $ 1.138 Company Stock Repurchase Plan On November 2, 2020, the Company's Board of Directors approved the continuation of the Company's Stock Repurchase Program until November 5, 2021, or until the approved dollar amount has been used to repurchase shares of common stock, as well as the expansion of the repurchase authorization to $150 million in the aggregate of the Company's outstanding common stock. This program may be suspended, extended, modified or discontinued by the Company at any time, subject to applicable law. The Company's Stock Repurchase Program was originally approved by the Company's Board of Directors on November 5, 2018 and announced on November 6, 2018. Since the inception of the Company Stock Repurchase Program through December 31, 2020, the Company has repurchased 7,248,350 shares of the Company's common stock at an average cost of $13.29 per share, or $96,348 in the aggregate, resulting in accretion to net assets per share of $0.41. 160 Table of Contents During the year ended December 31, 2020, the Company repurchased and extinguished 2,443,502 shares of common stock for an aggregate price of $27,254. The following table summarizes capital activity during the year ended December 31, 2020: Preferred Stock Common Stock Capital in Excess of Par Value Offering Costs Accumulated Net Investment Income (Loss) Accumulated Net Realized Gain (Loss) Accumulated Net Unrealized Appreciation (Depreciation) Total Net Assets Shares Amount Shares Amount Balance, beginning of year — $ — 57,763,811 $ 578 $ 1,109,238 $ (1,633) $ 10,368 $ (82,654) $ (79,426) $ 956,471 Issuance of Preferred Stock 2,000,000 50,000 — — — — — — — 50,000 Net investment income (loss) — — — — — — 88,807 — — 88,807 Net realized gain (loss) — — — — — — — (57,976) — (57,976) Net change in unrealized appreciation (depreciation) — — — — — — — — (24,002) (24,002) Dividends declared on common stock and preferred stock — — — — — — (84,683) — — (84,683) Repurchase of common stock — — (2,443,502) (25) (27,229) — — — — (27,254) Tax reclassification of stockholders’ equity in accordance with U.S. GAAP — — — — (573) — 76 497 — — Balance, end of year 2,000,000 $ 50,000 55,320,309 $ 553 $ 1,081,436 $ (1,633) $ 14,568 $ (140,133) $ (103,428) $ 901,363 During the year ended December 31, 2019, repurchased and extinguished 4,466,440 shares of common stock for an aggregate price of $64,717. The following table summarizes capital activity during the year ended December 31, 2019: Common Stock Capital in Excess of Par Value Offering Costs Accumulated Net Investment Income (Loss) Accumulated Net Realized Gain (Loss) Accumulated Net Unrealized Appreciation (Depreciation) Total Net Assets Shares Amount Balance, beginning of year 62,230,251 $ 622 $ 1,174,334 $ (1,633) $ 5,901 $ (44,572) $ (71,434) $ 1,063,218 Offering costs — — — — — — — — Net investment income (loss) — — — — 107,665 — — 107,665 Net realized gain (loss) — — — — — (38,343) — (38,343) Net change in unrealized appreciation (depreciation) — — — — — — (7,992) (7,992) Dividends declared — — — — (103,360) — — (103,360) Repurchase of common stock (4,466,440) (44) (64,673) — — — — (64,717) Tax reclassification of stockholders’ equity in accordance with U.S. GAAP — — (423) — 162 261 — — Balance, end of year 57,763,811 $ 578 $ 1,109,238 $ (1,633) $ 10,368 $ (82,654) $ (79,426) $ 956,471 During the year ended December 31, 2018, the Company issued 361,056 shares shares of common stock for an aggregate price of $6,629 in connection with the reinvestment of dividends, and repurchased and extinguished 338,408 shares 161 Table of Contents of common stock for an aggregate price of $4,867. The following table summarizes capital activity during the year ended December 31, 2018: Common Stock Capital in Excess of Par Value Offering Costs Accumulated Net Investment Income (Loss) Accumulated Net Realized Gain (Loss) Accumulated Net Unrealized Appreciation (Depreciation) Total Net Assets Shares Amount Balance, beginning of year 62,207,603 $ 622 $ 1,172,807 $ (1,618) $ 2,522 $ (43,548) $ (3,481) $ 1,127,304 Reinvestment of dividends 361,056 4 6,625 — — — — 6,629 Offering costs — — — (15) — — — (15) Net investment income (loss) — — — — 108,436 — — 108,436 Net realized gain (loss) — — — — — (1,368) — (1,368) Net change in unrealized appreciation (depreciation) — — — — — — (67,953) (67,953) Dividends declared — — — — (104,948) — — (104,948) Repurchase of common stock (338,408) (4) (4,863) — — — — (4,867) Tax reclassification of stockholders’ equity in accordance with U.S. GAAP — — (235) — (109) 344 — — Balance, end of year 62,230,251 $ 622 $ 1,174,334 $ (1,633) $ 5,901 $ (44,572) $ (71,434) $ 1,063,218 There were no shares of common stock issued related to capital activity during the years ended December 31, 2020 and 2019. The following table summarizes total shares issued and proceeds received related to capital activity during the year ended December 31, 2018: Year Ended December 31, 2018 Shares Issued Proceeds Received January 17, 2018* 361,056 $ 6,629 Total 361,056 $ 6,629 * Represents shares issued upon the reinvestment of dividends. The Company computes earnings per common share in accordance with ASC 260, Earnings Per Share. Basic earnings per common share were calculated by dividing net increase (decrease) in net assets resulting from operations, less preferred dividends, by the weighted-average number of common shares outstanding for the year. Diluted earnings per share gives effect to all dilutive potential common shares outstanding using the if-converted method for the convertible Preferred Stock. Diluted earnings per share excludes all dilutive potential common shares if their effect is anti-dilutive. The convertible Preferred Stock was not included in the calculation of diluted earnings per share for the year ended December 31, 2020 because it would have had an anti-dilutive effect. 162 Table of Contents Basic and diluted earnings per common share were as follows: For the years ended December 31, 2020 2019 2018 Basic Diluted Basic Diluted Basic Diluted Net increase (decrease) in net assets resulting from operations attributable to Common Stockholders $ 4,554 $ 4,554 $ 61,330 $ 61,330 $ 39,115 $ 39,115 Weighted-average common shares outstanding 56,421,137 56,421,137 60,189,502 60,189,502 62,533,614 62,533,614 Basic and diluted earnings per share $ 0.08 $ 0.08 $ 1.02 $ 1.02 $ 0.63 $ 0.63 The following table summarizes the Company’s dividends declared during the three most recent fiscal years: Date Declared Record Date Payment Date Per Share Amount February 26, 2018 March 29, 2018 April 17, 2018 $ 0.37 May 2, 2018 June 29, 2018 July 17, 2018 $ 0.37 August 6, 2018 September 28, 2018 October 17, 2018 $ 0.37 November 5, 2018 December 28, 2018 January 17, 2019 $ 0.37 December 12, 2018 December 28, 2018 January 17, 2019 $ 0.20 (1) February 22, 2019 March 29, 2019 April 17, 2019 $ 0.37 May 6, 2019 June 28, 2019 July 17, 2019 $ 0.37 June 17, 2019 June 28, 2019 July 17, 2019 $ 0.08 (1) August 5, 2019 September 30, 2019 October 17, 2019 $ 0.37 November 4, 2019 December 31, 2019 January 17, 2020 $ 0.37 December 12, 2019 December 31, 2019 January 17, 2020 $ 0.18 (1) February 24, 2020 March 31, 2020 April 17, 2020 $ 0.37 May 4, 2020 June 30, 2020 July 17, 2020 $ 0.37 August 3, 2020 September 30, 2020 October 16, 2020 $ 0.32 (2) August 3, 2020 September 30, 2020 October 16, 2020 $ 0.05 (1) November 2, 2020 December 31, 2020 January 15, 2021 $ 0.32 November 2, 2020 December 31, 2020 January 15, 2021 $ 0.04 (1) (1) Represents a special/supplemental dividend. (2) The Company updated its dividend policy such that the regular divided is $0.32 per share of common stock, effective with the third quarter 2020 dividend. The Company's dividend policy is subject to change by the Board of Directors in its sole discretion at any time. 163 Table of Contents 11. CONSOLIDATED FINANCIAL HIGHLIGHTS The following is a schedule of consolidated financial highlights for the years ended December 31, 2020, 2019, 2018, 2017 and 2016: For the years ended December 31, 2020 2019 2018 2017 2016 Per Common Share Data: Net asset value per common share, beginning of year $ 16.56 $ 17.09 $ 18.12 $ 18.32 $ 18.14 Net investment income (loss) (1) 1.54 1.79 1.73 1.74 1.65 Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments and non-investment assets and liabilities (1.46) (0.75) (1.10) (0.19) 0.20 Net increase (decrease) in net assets resulting from operations 0.08 1.04 0.63 1.55 1.85 Dividends declared (2) (1.47) (1.74) (1.68) (1.64) (1.68) Accretion due to share repurchases 0.22 0.17 0.02 — — Effect of offering price of subscriptions and the offering price of common stock in the IPO, net of underwriting and offering costs (3) — — — (0.11) 0.01 Net asset value per common share, end of year $ 15.39 $ 16.56 $ 17.09 $ 18.12 $ 18.32 Market price per common share, end of year $ 10.26 $ 13.38 $ 12.40 $ 20.04 n/a Number of common shares outstanding, end of year 55,320,309 57,763,811 62,230,251 62,207,603 41,702,318 Total return based on net asset value (4) 1.81 % 7.08 % 3.59 % 7.86 % 10.25 % Total return based on market price (5) (12.33) % 21.94 % (29.74) % 14.97 % n/a Net assets attributable to Common Stockholders, end of year $ 851,363 $ 956,471 $ 1,063,218 $ 1,127,304 $ 764,137 Ratio to average net assets attributable to Common Stockholders: Expenses net of waiver, before incentive fees 8.48 % 8.79 % 6.77 % 5.25 % 5.46 % Expenses net of waiver, after incentive fees 10.59 % 11.05 % 8.81 % 7.39 % 7.69 % Expenses gross of waiver, after incentive fees 10.59 % 11.05 % 8.81 % 7.97 % 8.62 % Net investment income (loss) (6) 10.08 % 10.47 % 9.64 % 9.35 % 8.93 % Interest expense and credit facility fees 4.49 % 5.22 % 3.57 % 2.69 % 2.85 % Ratios/Supplemental Data: Asset coverage, end of period 182.09 % 181.01 % 210.31 % 234.86 % 209.97 % Portfolio turnover 33.06 % 38.97 % 45.88 % 49.18 % 32.39 % Weighted-average common shares outstanding 56,421,137 60,189,502 62,533,614 52,997,450 36,152,390 (1) Net investment income (loss) per share was calculated as net investment income (loss) less the preferred dividend for the year divided by the weighted-average number of common shares outstanding for the year. (2) Dividends declared per common share was calculated as the sum of dividends on common stock declared during the year divided by the number of common shares outstanding at each respective quarter-end date (refer to Note 10 to these consolidated financial statements). (3) Increase (decrease) is due to the offering price of subscriptions and the issuance of common stock in the IPO, net of underwriting and offering costs during the period. (4) Total return is based on the change in net asset value per common share during the year plus the declared dividends on common stock, assuming reinvestment of dividends in accordance with the dividend reinvestment plan, divided by the beginning net asset value for the year. Total return for the years ended December 31, 2017 and 2016 was inclusive of $(0.11) and $0.01, respectively, per common share increase (decrease) in net asset value for the years related to the offering price of subscriptions and the offering price of common stock in the IPO, net of underwriting and offering costs during the year. Excluding the effects of these common stock issuances, total return would have been 8.46% and 10.20%, respectively. (5) Total return based on market value (not annualized) is calculated as the change in market value per common share during the period plus the declared dividends on common stock, assuming reinvestment of dividends in accordance with the dividend reinvestment plan, divided by the beginning market price for the period. (6) The net investment income ratio is net of the waiver of base management fees. 164 Table of Contents 12. LITIGATION The Company may become party to certain lawsuits in the ordinary course of business. The Company does not believe that the outcome of current matters, if any, will materially impact the Company or its consolidated financial statements. As of December 31, 2020 and 2019, the Company was not subject to any material legal proceedings, nor, to the Company’s knowledge, is any material legal proceeding threatened against the Company. In addition, portfolio investments of the Company could be the subject of litigation or regulatory investigations in the ordinary course of business. The Company does not believe that the outcome of any current contingent liabilities of its portfolio investments, if any, will materially affect the Company or these consolidated financial statements. 13. TAX The Company has not recorded a liability for any uncertain tax positions pursuant to the provisions of ASC 740, Income Taxes , as of December 31, 2020 and 2019. In the normal course of business, the Company is subject to examination by federal and certain state, local and foreign tax regulators. As of December 31, 2020 and 2019, the Company had filed tax returns and therefore is subject to examination. Book and tax basis differences relating to stockholder dividends and distributions and other permanent book and tax differences are reclassified among the Company’s capital accounts. In addition, the character of income and gains to be distributed is determined in accordance with income tax regulations that may differ from U.S. GAAP. As of December 31, 2020 and 2019, permanent differences primarily due to non-deductible excise tax resulted in a net increase in distributable earnings (loss) by $573 and $423, respectively, and net decrease in additional paid-in capital in excess of par by $573 and $423, respectively, on the Consolidated Statements of Assets and Liabilities. Total earnings and NAV were not affected. The tax character of the distributions paid for the fiscal years ended December 31, 2020, 2019 and 2018 was as follows: For the years ended December 31, 2020 2019 2018 Ordinary income $ 84,683 $ 103,360 $ 104,948 Tax return of capital $ — $ — $ — Income Tax Information and Distributions to Stockholders As of December 31, 2020 and 2019, the components of accumulated earnings (deficit) on a tax basis were as follows: 2020 2019 Undistributed ordinary income $ 16,475 $ 11,639 Other book/tax temporary differences (1) (539) (1,271) Capital loss carryforwards (141,850) (83,433) Net unrealized appreciation (depreciation) on investments (2) (103,078) (78,646) Total accumulated earnings (deficit) $ (228,992) $ (151,711) (1) Consists of the unamortized portion of organization costs as of December 31, 2020 and 2019, respectively. (2) The difference between the book-basis and tax-basis unrealized appreciation (depreciation) on investments is attributable primarily to the tax treatment of partnership investments and material modifications of investments. As of December 31, 2020 and 2019, the cost of investments for federal income tax purposes and gross unrealized appreciation and depreciation on investments were as follows: 2020 2019 Cost of investments $ 1,922,617 $ 2,200,671 Gross unrealized appreciation on investments 21,522 17,094 Gross unrealized depreciation on investments (124,600) (95,740) Net unrealized appreciation (depreciation) on investments $ (103,078) $ (78,646) 165 Table of Contents For tax purposes, net realized capital losses may be carried over to offset future capital gains, if any. Funds are permitted to carry forward capital losses for an indefinite period, and such losses will retain their character as either short-term or long-term capital losses. As of December 31, 2020 and 2019, the Company had $141,850 and $83,433, of capital loss carryforwards, respectively, of which $21,448 and $11,142 were short-term capital loss carryforwards, respectively, and $120,402 and $72,291 were long-term capital loss carryforwards, respectively. 14. SUBSEQUENT EVENTS Subsequent events have been evaluated through the date the consolidated financial statements were issued. There have been no subsequent events that require recognition or disclosure through the date the consolidated financial statements were issued, except as disclosed below and elsewhere in these consolidated financial statements. On February 22, 2021, the Board of Directors declared a regular quarterly dividend of $0.32 plus a supplemental dividend of $0.05, which is payable on April 16, 2021 to stockholders of record on March 31, 2021. On February 22, 2021, the Company and Credit Partners amended and restated the Limited Liability Company Agreement of Credit Fund to, among other amendments: (i) extend the Company’s investment period from March 1, 2021 to May 21, 2022; and (ii) reduce the capital commitment of each of the Company and Credit Partners from $400 million to $250 million. In connection with the foregoing, on February 22, 2021, the Company and Credit Fund entered into an amendment to the Credit Fund Facility to extend the maturity date of the Credit Fund Facility from March 22, 2021 to May 21, 2022. 166 Table of Contents Item 9. Changes and Disagreements with Accountants on Accounting and Financial Disclosure None.