What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-11-09 compared with 2023-08-09 · 126 added, 96 removed, 371 unchanged (37% of the section changed)

82 unchanged sentences

Recent Developments

Q3 2023 Regular and Supplemental Distributions

On August 7, 2023, our co-chief executive officers declared (i) a regular quarterly distribution of $0.34 per share for the third quarter of 2023 payable on September 15, 2023 to shareholders of record as of September 1, 2023 and (ii) a supplemental distribution of $0.05 per share for both the third and fourth quarters of 2023, payable on October 16, 2023 and January 15, 2024, respectively, to shareholders of record as of September 29, 2023 and December 29, 2023, respectively.

Portfolio Investment Activity for the Three and Six Months Ended June 30, 2023 and 2022 and the Year Ended December 31, 2022

The following table summarizes our investment activity, excluding short term investments and PIK securities, for the three and six months ended June 30, 2023 and 2022 and the year ended December 31, 2022:

Regular and Supplemental Distributions

On August 7, 2023, our co-chief executive officers declared a supplemental distribution of $0.05 per share for both the third and fourth quarters of 2023, paid on October 16, 2023 and payable on January 15, 2024, respectively, to shareholders of record as of September 29, 2023 and December 29, 2023, respectively.

On November 6, 2023, our co-chief executive officers declared a regular quarterly distribution of $0.34 per share for the fourth quarter of 2023, payable on December 15, 2023 to shareholders of record as of December 1, 2023.

Additional Series A Notes

On October 10, 2023, we issued $ 33,146 in aggregate principal amount of Additional Series A Notes to institutional investors in Israel.

The Additional Series A Notes were issued pursuant to the Deed of Trust and were issued by way of expanding, and have the same terms and conditions as, the existing Series A Notes that we issued on February 28, 2023 (as described in further detail in Note 8 to our consolidated financial statements included in this report).

After the deduction of fees and other offering expenses, we received net proceeds of $ 32,317 , which we intend to use to make investments in portfolio companies in accordance with our investment objectives and for working capital and general corporate purposes.

The Additional Series A Notes are rated A1.il by Midroog Ltd., an affiliate of Moody’s, and commenced trading on the TASE on October 10, 2023.

The Additional Series A Notes will mature on August 31, 2026 and may be redeemed in whole or in part at our option at par plus a “make-whole” premium, if applicable, as set forth in the Deed of Trust.

The Additional Series A Notes bear interest at a floating rate equal to SOFR plus a credit spread of 3.82% per year, which will be paid quarterly on February 28, May 31, August 31, and November 30 of each year, commencing on November 30, 2023.

The Additional Series A Notes are our general unsecured obligations that rank senior in right of payment to all of our existing and future indebtedness that is expressly subordinated in right of payment to the Additional Series A Notes, rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by us, rank effectively junior to any of our secured indebtedness (including unsecured indebtedness that we later secure) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables) incurred by our subsidiaries, financing vehicles or similar facilities.

On November 8, 2023, we entered into the 2027 Note Purchase Agreement with certain institutional investors, in connection with our issuance of $100,000 aggregate principal amount of 2027 Notes, at a purchase price equal to 99.25% of the principal amount of the 2027 Notes.

The net proceeds to us were approximately $99,000, after the deduction of placement agent fees and other financing expenses, which we intend to use to primarily repay debt under our senior secured financing arrangements, make investments in portfolio companies in accordance with our investment objectives, and for working capital and general corporate purposes.

The 2027 Notes are rated BBB (low) by DBRS, Inc.

The 2027 Notes mature on November 8, 2027.

The 2027 Notes bear interest at a floating rate equal to the three-month SOFR plus a credit spread of 4.75% per year and subject to a 2.00% SOFR floor, which will be paid quarterly on February 15, May 15, August 15, and November 15 of each year, commencing on February 15, 2024.

We have the right to, at our option, redeem all or a part that is not less than 10% of the 2027 Notes (i) on or before August 8, 2027, at a redemption price equal to 100% of the principal amount of 2027 Notes to be redeemed plus an applicable “make-whole” amount equal to (x) the discounted value of the remaining scheduled payments with respect to the principal of such 2027 Note that is to be prepaid or becomes due and payable pursuant to the 2027 Note Purchase Agreement over (y) the amount of such called principal, plus accrued and unpaid interest, if any, and (ii) after August 8, 2027, at a redemption price equal to 100% of the principal amount of the 2027 Notes to be redeemed, plus accrued and unpaid interest, if any.

For any redemptions occurring on or before August 8, 2027, the discounted value portion of the “make whole amount” is calculated by applying a discount rate on the same periodic basis as that on which interest on the 2027 Notes is payable equal to the sum of 0.50% plus the yield to maturity of the most recently issued U.S.

Treasury securities having a maturity equal to the remaining average life of the 2027 Notes, or if there are no such U.S.

Treasury securities, using such implied yield to maturity determined in accordance with the terms of the 2027 Note Purchase Agreement.

The 2027 Notes are general unsecured obligations of ours that rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by us, rank effectively junior to any of our secured indebtedness (including unsecured indebtedness that we later secure) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables) incurred by certain of our subsidiaries, financing vehicles or similar facilities.

The 2027 Note Purchase Agreement contains other terms and conditions, including, without limitation, affirmative and negative covenants such as (i) information reporting, (ii) maintenance of our status as a business development company within the meaning of the 1940 Act, (iii) minimum shareholders’ equity of $543.6 million, (iv) a minimum asset coverage ratio of not less than 150%, (v) a minimum interest coverage ratio of 1.25 to 1.00 and (vi) an unencumbered asset coverage ratio of 1.25 to 1.00, provided that (a) first lien senior secured loans and cash represent more than 65% of the total value of unencumbered assets used by us for purposes of the ratio and (b) equity interests or structured products in the aggregate represent less than 15% of the total value of unencumbered assets used by us for purposes of the ratio.

The 2027 Note Purchase Agreement also contains a “most favored lender” provision in favor of the purchasers in respect of any new credit facilities, loans, notes or unsecured indebtedness in excess of $25 million incurred by us, which indebtedness contains a financial covenant not contained in, or more restrictive against us than those contained, in the 2027 Note Purchase Agreement.

In addition, the 2027 Note Purchase Agreement contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under other indebtedness or derivative securities of ours in an outstanding aggregate principal amount of at least $25 million, certain judgments and orders, and certain events of bankruptcy.

Portfolio Investment Activity for the Three and Nine Months Ended September 30, 2023 and 2022 and the Year Ended December 31, 2022

The following table summarizes our investment activity, excluding short term investments and PIK securities, for the three and nine months ended September 30, 2023 and 2022 and the year ended December 31, 2022:

Three Months Ended

June 30, Six Months Ended

June 30, Year Ended

September 30, Nine Months Ended

September 30, Year Ended

Net Investment Activity 2023 2022 2023 2022 2022

6 unchanged sentences

Net portfolio activity $ 6,670 $ (13,596) $ (21,270) $ 126,867 $ 80,778

The following tables summarize the composition of our investment portfolio at amortized cost and fair value as of June 30, 2023 and December 31, 2022:

June 30, 2023

The following tables summarize the composition of our investment portfolio at amortized cost and fair value as of September 30, 2023 and December 31, 2022:

September 30, 2023

Investments Cost(1) Investments Fair

37 unchanged sentences

(3) The gross annual portfolio yield does not represent and may be higher than an actual investment return to shareholders because it excludes our expenses and all sales commissions and dealer manager fees and does not consider the cost of leverage.

The following table summarizes the composition of our investment portfolio by the type of interest rate as of June 30, 2023 and December 31, 2022, excluding short term investments of $100,771 and $10,869, respectively:

June 30, 2023 December 31, 2022

The following table summarizes the composition of our investment portfolio by the type of interest rate as of September 30, 2023 and December 31, 2022, excluding short term investments of $116,934 and $10,869, respectively:

September 30, 2023 December 31, 2022

Interest Rate Allocation Investments Cost Investments Fair Value Percentage of

5 unchanged sentences

Total investments $ 1,778,888 $ 1,727,943 100.0 % $ 1,792,740 $ 1,749,161 100.0 %

The following table shows the composition of our investment portfolio by industry classification and the percentage, by fair value, of the total assets in such industries as of June 30, 2023 and December 31, 2022:

June 30, 2023 December 31, 2022

The following table shows the composition of our investment portfolio by industry classification and the percentage, by fair value, of the total assets in such industries as of September 30, 2023 and December 31, 2022:

September 30, 2023 December 31, 2022

Industry Classification Investments Fair Value Percentage of

5 unchanged sentences

Advertising, Printing & Publishing 113,476 6.6 % 105,375 6.0 %

Consumer 105,328 6.3 % 115,849 6.6 %

Diversified Financials 81,052 4.8 % 99,819 5.7 %

Construction & Building 109,283 6.3 % 46,007 2.6 %

Consumer 105,805 6.1 % 115,849 6.6 %

Retail 101,301 5.9 % 74,718 4.3 %

Chemicals, Plastics & Rubber 82,501 4.8 % 66,753 3.8 %

Diversified Financials 81,093 4.7 % 99,819 5.7 %

Oil & Gas 73,837 4.3 % 68,756 3.9 %

Retail 63,042 3.8 % 74,718 4.3 %

Consumer Goods:

Durable 59,890 3.5 % 60,735 3.5 %

Hotel, Gaming & Leisure 60,211 3.6 % 46,739 2.7 %

High Tech Industries 52,664 3.1 % 56,501 3.2 %

Beverage, Food & Tobacco 52,414 3.0 % 45,396 2.6 %

3 unchanged sentences

Banking, Finance, Insurance & Real Estate 38,125 2.2 % 43,836 2.5 %

High Tech Industries 33,762 2.0 % 56,501 3.2 %

Hotel, Gaming & Leisure 27,158 1.6 % 46,739 2.7 %

Containers, Packaging & Glass 19,404 1.1 % 19,551 1.1 %

Telecommunications 18,311 1.1 % 18,302 1.1 %

Automotive 16,231 1.0 % 16,255 0.9 %

Metals & Mining 15,733 0.9 % 15,780 0.9 %

Environmental Industries 15,375 0.9 % — —

Automotive 14,471 0.8 % 16,255 0.9 %

Aerospace & Defense 12,681 0.7 % 38,842 2.2 %

5 unchanged sentences

Our investment portfolio may contain senior secured investments that are in the form of lines of credit, delayed draw term loans, revolving credit facilities, or unfunded commitments, which may require us to provide funding when requested in accordance with the terms of the underlying agreements.

As of June 30, 2023 and December 31, 2022, our unfunded commitments amounted to $56,378 and $71,420 , respectively.

As of August 2, 2023, our unfunded commitments amount ed to $54,475.

As of September 30, 2023 and December 31, 2022, our unfunded commitments amounted to $59,170 and $71,420 , respectively.

As of November 3, 2023, our unfunded commitments amount ed to $57,644.

Since these commitments may expire without being drawn upon, unfunded commitments do not necessarily represent future cash requirements or future earning assets for us.

17 unchanged sentences

For investments rated 3, 4, or 5, CIM enhances its level of scrutiny over the monitoring of such portfolio company.

The following table summarizes the composition of our investment portfolio based on the 1 to 5 investment rating scale at fair value as of June 30, 2023 and December 31, 2022, excluding short term investments of $100,771 and $10,869, respectively:

June 30, 2023 December 31, 2022

The following table summarizes the composition of our investment portfolio based on the 1 to 5 investment rating scale at fair value as of September 30, 2023 and December 31, 2022, excluding short term investments of $116,934 and $10,869, respectively:

September 30, 2023 December 31, 2022

Investment Rating Investments

12 unchanged sentences

Current Investment Portfolio

The following table summarizes the composition of our investment portfolio at fair value as of August 2, 2023:

The following table summarizes the composition of our investment portfolio at fair value as of November 3, 2023:

Investments Fair

15 unchanged sentences

(2) The gross annual portfolio yield does not represent and may be higher than an actual investment return to shareholders because it excludes our expenses and all sales commissions and dealer manager fees and does not consider the cost of leverage.

Results of Operations for the Three Months Ended June 30, 2023 and 2022

Our results of operations for the three months ended June 30, 2023 and 2022 were as follows:

Results of Operations for the Three Months Ended September 30, 2023 and 2022

Our results of operations for the three months ended September 30, 2023 and 2022 were as follows:

Three Months Ended

September 30,

Investment income $ 67,540 $ 54,163

1 unchanged sentence

Net investment income after taxes 29,990 25,557

Net realized (loss) gain on investments and foreign currency (18,928) 180

Net change in unrealized appreciation (depreciation) on investments 23,406 (20,734)

Net increase (decrease) in net assets resulting from operations $ 27,894 $ (1,266)

Net realized loss on investments and foreign currency (8,123) (17,169)

Net change in unrealized appreciation on investments 25,606 25,595

Net increase in net assets resulting from operations $ 47,473 $ 33,983

Investment Income

For the three months ended June 30, 2023 and 2022, we generated investment income of $58,496 and $43,552, respectively, consisting primarily of interest income on investments in senior secured debt, collateralized securities and structured products, and unsecured debt of 100 and 112 portfolio companies held during each respective period.

The increase in investment income was primarily due to higher LIBOR and SOFR rates during the three months ended June 30, 2023 compared to the three months ended June 30, 2022.

For the three months ended September 30, 2023 and 2022, we generated investment income of $67,540 and $54,163, respectively, consisting primarily of interest income on investments in senior secured debt, collateralized securities and structured products, and unsecured debt of 101 and 116 portfolio companies held during each respective period.

The increase in investment income was primarily due to higher SOFR and LIBOR rates during the three months ended September 30, 2023 compared to the three months ended September 30, 2022.

Operating Expenses and Income Taxes

The composition of our operating expenses and income taxes for the three months ended June 30, 2023 and 2022 was as follows:

The composition of our operating expenses and income taxes for the three months ended September 30, 2023 and 2022 was as follows:

Three Months Ended

September 30,

Management fees $ 6,741 $ 6,942

3 unchanged sentences

Interest expense 21,757 13,469

Income tax expense, including excise tax 118 —

Income tax (benefit) expense, including excise tax (237) 14

Total operating expenses and income taxes $ 37,550 $ 28,606

The increase in interest expense was primarily the result of (a) higher LIBOR and SOFR rates during the three months ended June 30, 2023 compared to the three months ended June 30, 2022 and (b) higher average borrowings under our financing arrangements during the three months ended June 30, 2023 compared to the three months ended June 30, 2022.

The increase in subordinated incentive fee on income was primarily the result of the increase in investment income during the three months ended June 30, 2023 compared to the three months ended June 30, 2022, which was partially offset by the increase in interest expense during the three months ended June 30, 2023 compared to the three months ended June 30, 2022.

The composition of our general and administrative expenses for the three months ended June 30, 2023 and 2022 was as follows:

The increase in interest expense was primarily the result of (a) higher SOFR and LIBOR rates during the three months ended September 30, 2023 compared to the three months ended September 30, 2022 and (b) higher average borrowings under our financing arrangements during the three months ended September 30, 2023 compared to the three months ended September 30, 2022.

The increase in subordinated incentive fee on income was primarily the result of the increase in investment income during the three months ended September 30, 2023 compared to the three months ended September 30, 2022, which was partially offset by the increase in interest expense during the three months ended September 30, 2023 compared to the three months ended September 30, 2022.

The composition of our general and administrative expenses for the three months ended September 30, 2023 and 2022 was as follows:

Three Months Ended

September 30,

Professional fees $ 405 $ 223

Transfer agent expense 279 303

Printing and marketing expense 284 672

Accounting and administrative costs 282 180

Valuation expense 212 199

Transfer agent expense 189 296

Director fees and expenses 177 162

Insurance expense 168 157

Accounting and administrative costs 158 145

Dues and subscriptions 162 112

2 unchanged sentences

Net Investment Income After Taxes

Our net investment income after taxes totaled $23,416 and $19,288 for the three months ended June 30, 2023 and 2022, respectively.

The increase in net investment income was a result of an increase in our investment income during the three months ended June 30, 2023 as compared to the three months ended June 30, 2022, which was partially offset by an increase in our operating expenses during the same period, which was driven primarily by increases in interest expense and the subordinated incentive fee on income.

Net Realized (Loss) Gain on Investments and Foreign Currency

Our net realized (loss) gain on investments and foreign currency totaled $(18,928) and $180 for the three months ended June 30, 2023 and 2022, respectively.

This change was driven primarily by realized losses on the restructure of certain investments during the three months ended June 30, 2023 as compared to the three months ended June 30, 2022.

Net Change in Unrealized Appreciation (Depreciation) on Investments

The net change in unrealized appreciation (depreciation) on our investments totaled $23,406 and $(20,734) for the three months ended June 30, 2023 and 2022, respectively.

This change was driven primarily by the restructure of certain investments with unrealized losses during the three months ended June 30, 2023 compared to widening credit spreads and decreased multiples in equity markets as well as the underperformance of certain investments during the three months ended June 30, 2022.

Net Increase (Decrease) in Net Assets Resulting from Operations

For the three months ended June 30, 2023 and 2022, we recorded a net increase (decrease) in net assets resulting from operations of $27,894 and $(1,266), respectively, as a result of our operating activity for the respective periods.

Results of Operations for the Six Months Ended June 30, 2023 and 2022

Our results of operations for the six months ended June 30, 2023 and 2022 were as follows:

Six Months Ended

Our net investment income after taxes totaled $29,990 and $25,557 for the three months ended September 30, 2023 and 2022, respectively.

The increase in net investment income was a result of an increase in our investment income during the three months ended September 30, 2023 as compared to the three months ended September 30, 2022, which was partially offset by an increase in our operating expenses during the same period, which was driven primarily by increases in interest expense and the subordinated incentive fee on income.

Net Realized Loss on Investments and Foreign Currency

Our net realized loss on investments and foreign currency totaled $(8,123) and $(17,169) for the three months ended September 30, 2023 and 2022, respectively.

The decrease in net realized loss on investments and foreign currency was driven primarily by realized gains on a certain investment during the three months ended September 30, 2023 that offset realized losses due to the write-off of certain investments during the same period.

During the three months ended September 30, 2022, there were no significant realized gains to offset realized losses due to the write-off of certain investments.

Net Change in Unrealized Appreciation on Investments

The net change in unrealized appreciation on our investments totaled $25,606 and $25,595 for the three months ended September 30, 2023 and 2022, respectively.

In both periods, the net change in unrealized appreciation was primarily driven by the restructure or write-off of certain investments that were previously recorded as unrealized losses.

Net Increase in Net Assets Resulting from Operations

For the three months ended September 30, 2023 and 2022, we recorded a net increase in net assets resulting from operations of $47,473 and $33,983, respectively, as a result of our operating activity for the respective periods.

Results of Operations for the Nine Months Ended September 30, 2023 and 2022

Our results of operations for the nine months ended September 30, 2023 and 2022 were as follows:

Nine Months Ended

September 30,

Investment income $ 191,011 $ 139,398

1 unchanged sentence

Net investment income after taxes 83,264 64,328

Net realized (loss) gain on investments and foreign currency (23,453) 111

Net realized loss on investments and foreign currency (31,576) (17,058)

Net change in unrealized depreciation on investments (7,366) (6,664)

Net (decrease) increase in net assets resulting from operations $ (3,151) $ 6,623

Net increase in net assets resulting from operations $ 44,322 $ 40,606

Investment Income

For the six months ended June 30, 2023 and 2022, we generated investment income of $123,471 and $85,235, respectively, consisting primarily of interest income on investments in senior secured debt, collateralized securities and structured products, and unsecured debt of 104 and 119 portfolio companies held during each respective period.

The increase in LIBOR and SOFR rates during the six months ended June 30, 2023 as compared to the six months ended June 30, 2022 contributed to the increase in interest income generated on our investments.

However, our average investment portfolio size, excluding our short term investments, decreased $10,189, from $1,728,615 for the six months ended June 30, 2022 to $1,718,426 for the six months ended June 30, 2023.

For the nine months ended September 30, 2023 and 2022, we generated investment income of $191,011 and $139,398, respectively, consisting primarily of interest income on investments in senior secured debt, collateralized securities and structured products, and unsecured debt of 107 and 128 portfolio companies held during each respective period.

The increase in SOFR and LIBOR rates during the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022 contributed to the increase in interest income generated on our investments.

Operating Expenses and Income Taxes

The composition of our operating expenses and income taxes for the six months ended June 30, 2023 and 2022 was as follows:

Six Months Ended

The composition of our operating expenses and income taxes for the nine months ended September 30, 2023 and 2022 was as follows:

Nine Months Ended

September 30,

Management fees $ 19,963 $ 20,436

3 unchanged sentences

Interest expense 61,533 32,769

Income tax expense, including excise tax 123 11

Income tax (benefit) expense, including excise tax (114) 25

Total operating expenses and income taxes $ 107,747 $ 75,070

The increase in interest expense was primarily the result of (a) higher LIBOR and SOFR rates during the six months ended June 30, 2023 compared to the six months ended June 30, 2022 and (b) higher average borrowings under our financing arrangements during the six months ended June 30, 2023 compared to the six months ended June 30, 2022.

The increase in subordinated incentive fee on income was primarily the result of the increase in investment income during the six months ended June 30, 2023 compared to the six months ended June 30, 2022, which was partially offset by the increase in interest expense during the six months ended June 30, 2023 compared to the six months ended June 30, 2022.

The composition of our general and administrative expenses for the six months ended June 30, 2023 and 2022 was as follows:

Six Months Ended

The increase in interest expense was primarily the result of (a) higher SOFR and LIBOR rates during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 and (b) higher average borrowings under our financing arrangements during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022.

The increase in subordinated incentive fee on income was primarily the result of the increase in investment income during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022, which was partially offset by the increase in interest expense during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022.

The composition of our general and administrative expenses for the nine months ended September 30, 2023 and 2022 was as follows:

Nine Months Ended

September 30,

Professional fees $ 1,576 $ 1,375

Transfer agent expense 736 890

Dues and subscriptions 473 615

Valuation expense 637 590

Director fees and expenses 348 315

Insurance expense 336 505

Dues and subscriptions 635 727

Accounting and administrative costs 606 482

Printing and marketing expense 558 705

Director fees and expenses 525 477

Insurance expense 504 662

Other expenses 183 53

1 unchanged sentence

Net Investment Income After Taxes

Our net investment income after taxes totaled $53,274 and $38,771 for the six months ended June 30, 2023 and 2022, respectively.

The increase in our net investment income was a result of an increase in our investment income during the six months ended June 30, 2023 as compared to the six months ended June 30, 2022, which was partially offset by an increase in our operating expenses during the same period, which was driven primarily by increases in interest expense and the subordinated incentive fee on income.

Net Realized (Loss) Gain on Investments and Foreign Currency

Our net realized (loss) gain on investments and foreign currency totaled $(23,453) and $111 for the six months ended June 30, 2023 and 2022, respectively.

This change was driven primarily by realized losses on the restructure of certain investments during the six months ended June 30, 2023.

Our net investment income after taxes totaled $83,264 and $64,328 for the nine months ended September 30, 2023 and 2022, respectively.

The increase in our net investment income was a result of an increase in our investment income during the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022, which was partially offset by an increase in our operating expenses during the same period, which was driven primarily by increases in interest expense and the subordinated incentive fee on income.

Net Realized Loss on Investments and Foreign Currency

Our net realized loss on investments and foreign currency totaled $(31,576) and $(17,058) for the nine months ended September 30, 2023 and 2022, respectively.

This increase was driven primarily by realized losses on the restructure and write-off of certain investments during the nine months ended September 30, 2023.

Net Change in Unrealized Depreciation on Investments

The net change in unrealized depreciation on our investments totaled $(32,972) and $(32,259) for the six months ended June 30, 2023 and 2022, respectively.

This increase was primarily driven by the underperformance of certain investments during the six months ended June 30, 2023, which was partially offset by the realization of previously unrealized losses on certain investment restructurings.

This compares to widening credit spreads and decreased multiples in equity markets during the six months ended June 30, 2022 that negatively impacted the fair value of certain of our investments.

Net (Decrease) Increase in Net Assets Resulting from Operations

For the six months ended June 30, 2023 and 2022, we recorded a net (decrease) increase in net assets resulting from operations of $(3,151) and $6,623, respectively, as a result of our operating activity for the respective periods.

The net change in unrealized depreciation on our investments totaled $(7,366) and $(6,664) for the nine months ended September 30, 2023 and 2022, respectively.

The net change in unrealized depreciation during the nine months ended September 30, 2023 was primarily due to the decline in fair value of certain investments from mark-to-market adjustments, which was partially offset by realized losses recorded on the restructure of certain investments that were previously recorded as unrealized losses.

During the nine months ended September 30, 2022, the net change in unrealized depreciation was primarily the result of widening credit spreads and decreased multiples in equity markets that negatively impacted the fair value of certain of our investments.

Net Increase in Net Assets Resulting from Operations

For the nine months ended September 30, 2023 and 2022, we recorded a net increase in net assets resulting from operations of $44,322 and $40,606, respectively, as a result of our operating activity for the respective periods.

Financial Condition, Liquidity and Capital Resources

7 unchanged sentences

Any increase to our leverage would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors.

As of June 30, 2023 and December 31, 2022, our asset coverage ratio was 1.85 and 1.92, respectively.

As of September 30, 2023 and December 31, 2022, our asset coverage ratio was 1.85 and 1.92, respectively.

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

1 unchanged sentence

As of the date of this report, we are not engaged in discussions to issue any such shares.

As of June 30, 2023, we had cash of $11,515 and short term investments of $100,771 invested in a fund that primarily invests in U.S.

As of September 30, 2023, we had cash of $6,805 and short term investments of $116,934 invested in a fund that primarily invests in U.S.

government securities.

Cash and short term investments as of June 30, 2023, taken together with our available debt, is expected to be sufficient for our investing and financing activities and to conduct our operations in the near term.

As of June 30, 2023, we had $125 million available under our financing arrangements.

Cash and short term investments as of September 30, 2023, taken together with our available debt, is expected to be sufficient for our investing and financing activities and to conduct our operations in the near term.

As of September 30, 2023, we had $102 million available under our financing arrangements.

Our short-term cash needs include the funding of additional portfolio investments, the payment of operating expenses including interest expense, management fees, incentive fees, administrative services expense and general and administrative expenses, as well as paying distributions to our shareholders.

12 unchanged sentences

The 10b5-1 trading plan permits common stock to be repurchased at a time that we might otherwise be precluded from doing so under insider trading laws or self-imposed trading restrictions.

The 10b5-1 trading plan is subject to price, market volume and timing restrictions.

During the six months ended June 30, 2023, we repurchased an aggregate of 666,657 shares under the 10b5-1 trading plan for an aggregate purchase price of $6,818, or an average purchase price of $10.23 per share.

From July 1, 2023 to August 2, 2023, we repurchased an aggregate of 57,691 shares of common stock under the 10b5-1 trading plan for an aggregate purchase price of $621, or an average purchase price of $10.76 per share.

From the inception of the 10b5-1 trading plan in August 2022 through August 2, 2023, we repurchased an aggregate of 2,383,304 shares of common stock under the 10b5-1 trading plan for an aggregate purchase price of $22,882, or an average purchase price of $9.60 per share.

The 10b5-1 trading plan expires on August 29, 2024, and is subject to price, market volume and timing restrictions.

During the nine months ended September 30, 2023, we repurchased an aggregate of 834,680 shares under the 10b5-1 trading plan for an aggregate purchase price of $8,619, or an average purchase price of $10.33 per share.

From October 1, 2023 to November 3, 2023, we repurchased an aggregate of 165,317 shares of common stock under the 10b5-1 trading plan for an aggregate purchase price of $1,669, or an average purchase price of $10.10 per share.

From the inception of the 10b5-1 trading plan in August 2022 through November 3, 2023, we repurchased an aggregate of 2,658,968 shares of common stock under the 10b5-1 trading plan for an aggregate purchase price of $25,586, or an average purchase price of $9.62 per share.

Distributions

4 unchanged sentences

Regular and special distributions in respect of future periods will be evaluated by management and our board of directors based on circumstances and expectations existing at the time of consideration.

The following table presents distributions per share that were declared during the year ended December 31, 2022 and the six months ended June 30, 2023:

The following table presents distributions per share that were declared during the year ended December 31, 2022 and the nine months ended September 30, 2023:

Distributions

7 unchanged sentences

June 30, 2023 (one record date) 0.34 18,614

Total distributions for the six months ended June 30, 2023 $ 0.6800 $ 37,301

September 30, 2023 (two record dates) 0.39 21,276

Total distributions for the nine months ended September 30, 2023 $ 1.07 $ 58,577

For an additional discussion of our RIC status and distributions, refer to Note 2 and Note 5, respectively, of our consolidated financial statements included in this report.

JPM Credit Facility

As of June 30, 2023 and August 2, 2023, our aggregate outstanding borrowings under the JPM Credit Facility were $600,000 and the aggregate unfunded principal amount in connection with the JPM Credit Facility was $75,000.

As of September 30, 2023 and November 3, 2023, our aggregate outstanding borrowings under the JPM Credit Facility were $600,000 and $575,000, respectively, and the aggregate unfunded principal amount in connection with the JPM Credit Facility was $75,000 and $100,000, respectively.

For a detailed discussion of our JPM Credit Facility, refer to Note 8 to our consolidated financial statements included in this report.

As of June 30, 2023 and August 2, 2023, our outstanding borrowings under the Amended UBS Facility were $100,000 and the aggregate unfunded principal amount in connection with the Amended UBS Facility was $50,000.

As of September 30, 2023 and November 3, 2023, our outstanding borrowings under the Amended UBS Facility were $122,500 and the aggregate unfunded principal amount in connection with the Amended UBS Facility was $27,500.

For a detailed discussion of our Amended UBS Facility, refer to Note 8 to our consolidated financial statements included in this report.

As of June 30, 2023 and August 2, 2023, we had $125,000 in aggregate principal amount of 2026 Notes outstanding and there was no unfunded principal amount in connection with the 2026 Notes.

As of September 30, 2023 and November 3, 2023, we had $125,000 in aggregate principal amount of 2026 Notes outstanding and there was no unfunded principal amount in connection with the 2026 Notes.

For a detailed discussion of our 2026 Notes, refer to Note 8 to our consolidated financial statements included in this report.

2021 More Term Loan

As of June 30, 2023 and August 2, 2023, our outstanding borrowings under the 2021 More Term Loan were $30,000 and there was no unfunded principal amount in connection with the 2021 More Term Loan.

As of September 30, 2023 and November 3, 2023, our outstanding borrowings under the 2021 More Term Loan were $30,000 and there was no unfunded principal amount in connection with the 2021 More Term Loan.

For a detailed discussion of our 2021 More Term Loan, refer to Note 8 to our consolidated financial statements included in this report.

2022 More Term Loan

As of June 30, 2023 and August 2, 2023, our outstanding borrowings under the 2022 More Term Loan were $50,000 and there was no unfunded principal amount in connection with the 2022 More Term Loan.

As of September 30, 2023 and November 3, 2023, our outstanding borrowings under the 2022 More Term Loan were $50,000 and there was no unfunded principal amount in connection with the 2022 More Term Loan.

For a detailed discussion of our 2022 More Term Loan, refer to Note 8 to our consolidated financial statements included in this report.

Series A Notes

As of June 30, 2023 and August 2, 2023, we had $80,712 in aggregate principal amount of Series A Notes outstanding and there was no unfunded principal amount in connection with the Series A Notes.

For a detailed discussion of our Series A Notes, refer to Note 8 to our consolidated financial statements included in this report.

As of September 30, 2023 and November 3, 2023, we had $80,712 and $113,858, respectively, in aggregate principal amount of Series A Notes and Additional Series A Notes outstanding and there was no unfunded principal amount in connection with either the Series A Notes or the Additional Series A Notes.

For a detailed discussion of our Series A Notes and Additional Series A Notes, refer to Note 8 and Note 14, respectively, to our consolidated financial statements included in this report.

Unfunded Commitments

As of June 30, 2023 and August 2, 2023, our unfunded commitments amounted to $56,378 and $54,475, respectively.

As of September 30, 2023 and November 3, 2023, our unfunded commitments amounted to $59,170 and $57,644, respectively.

For a detailed discussion of our unfunded commitments, refer to Note 11 to our consolidated financial statements included in this report.

49 unchanged sentences

See Note 8 to our consolidated financial statements for a more detailed description of the 2022 More Term Loan.

On February 28, 2023, we entered into a Deed of Trust with Mishmeret Trust Company Ltd., as trustee, pursuant to which we issued our Series A Notes.

See Note 8 to our consolidated financial statements for a more detailed description of the Deed of Trust and the Series A Notes.

On February 28, 2023, we entered into a Deed of Trust with Mishmeret Trust Company Ltd., as trustee, pursuant to which we issued our Series A Notes and Additional Series A Notes.

See Notes 8 and 14 to our consolidated financial statements for a more detailed description of the Deed of Trust, the Series A Notes and the Additional Series A Notes.

Commitments and Contingencies

6 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis