What changed in this filing

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Item 1. Business

2023-03-13 compared with 2022-03-10 · 290 added, 302 removed, 965 unchanged (38% of the section changed)

Kayne Anderson BDC, LLC was formed in May

2018 as a Delaware limited liability company.

We were formed to make investments in middle-market companies and commenced operations

on February 5, 2021.

On this same date, prior to our election to be regulated as a BDC under the 1940 Act, we completed a conversion

from a Delaware limited liability company into a Delaware corporation and Kayne Anderson BDC, Inc.

succeeded to the business of Kayne

Anderson BDC, LLC.

We are an externally managed, closed-end, non-diversified management investment company that has elected

to be regulated as a BDC under the 1940 Act.

Kayne Anderson BDC, Inc.

was formed as a Delaware corporation to make

investments in middle-market companies and commenced operations on February 5, 2021.

We are an externally managed, closed-end, non-diversified management

investment company that has elected to be regulated as a BDC under the 1940 Act.

In addition, for U.S.

federal income tax purposes, we intend to qualify, annually, as a

RIC under Subchapter M of the Code.

federal income tax purposes, we

intend to qualify, annually, as a RIC under Subchapter M of the Code.

We are managed by KA Credit Advisors, LLC

(the “Advisor”) which is an indirect subsidiary of Kayne Anderson Capital Advisors, L.P.

(“KACALP”

or “Kayne

Anderson”).

The Advisor is registered with the Securities and Exchange Commission (“SEC”) as an investment advisor

under the Investment Advisory Act of 1940.

Subject to the overall supervision of the Company’s board of directors (the “Board”),

(the “Advisor”) which is an indirect subsidiary of Kayne Anderson Capital Advisors, L.P.

(“KACALP” or “Kayne

The Advisor is registered with the Securities and Exchange Commission (“SEC”) as an investment advisor under

the Investment Advisory Act of 1940, as amended.

Subject to the overall supervision of the Company’s board of directors (the “Board”),

the Advisor is responsible for originating prospective investments, conducting research and due diligence investigations on potential

investments, analyzing investment opportunities, negotiating and structuring investments and monitoring its investments and portfolio

companies on an ongoing basis.

The Board consists of five directors, three of whom are independent.

investments, analyzing investment opportunities, negotiating and structuring investments, determining the value of the investments and

monitoring its investments and portfolio companies on an ongoing basis.

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

Investment Objective and Strategy

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income and, to a lesser extent, capital appreciation primarily through debt investments in middle-market companies.

We define “middle-market

companies”

as U.S.-based companies that, in general, generate between $10 million and $150 million of annual earnings

We define “middle-market

companies” as U.S.-based companies that, in general, generate between $10 million and $150 million of annual earnings

before interest, taxes, depreciation and amortization, or EBITDA.

We refer to companies that generate between $10 million and $50 million

of annual EBITDA as “core middle-market companies”

and companies that generate between $50 million and $150 million

of annual EBITDA as “upper middle-market companies.”

of annual EBITDA as “core middle-market companies” and companies that generate between $50 million and $150 million

of annual EBITDA as “upper middle-market companies.”

We intend to achieve our investment objective by investing primarily

in first lien senior secured, unitranche and split-lien loans (collectively, “secured middle market loans”) to privately held

middle-market companies.

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in higher-returning investments, including, but not limited to, equity securities purchased in conjunction with secured middle market

loans and other opportunistic investments (collectively “Opportunistic Investments”), including junior debt, real estate debt

and infrastructure credit investments.

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of no more than six years.

We intend to implement our investment objective by (1) accessing

the established loan sourcing channels developed by Kayne Anderson’s middle market private credit team, which includes an extensive

We intend to execute on our investment objective by (1) accessing

the established loan sourcing channels developed by Kayne Anderson’s middle market private credit team, which includes an extensive

network of private equity firms, other middle-market lenders, financial advisors and intermediaries, and management teams, (2) selecting

investments within our middle-market company focus, (3) implementing Kayne Anderson’s middle market private credit team’s

proven underwriting process, and (4) drawing upon the experience and resources of our Advisor’s investment team and the broader

investments within our middle-market company focus, (3) implementing Kayne Anderson’s middle market private credit team’s

proven underwriting process, and (4) drawing upon the experience and resources of our Advisor’s investment team and the broader

Kayne Anderson network.

We believe our Advisor’s disciplined

approach to origination, credit analysis, portfolio construction and risk management should allow us to achieve attractive risk-adjusted

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investment size, industry focus and geography.

The Advisor’s team of professionals will conduct in-depth due diligence on prospective

investments during the underwriting process and will be heavily involved in structuring the credit terms of each investment.

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growth and finance acquisitions.

Further, there is a large amount of uninvested capital held by private equity funds focused on investing

in middle market businesses.

We expect these private equity firms will continue to pursue acquisitions and to seek to fund a portion

of these transactions with debt.

We believe there is an opportunity for capital providers such as us

to increase their market share of loans made to middle market companies as regulatory and structural changes in the lending market have

reduced the amount of capital that banks and other traditional sources of debt capital are willing to lend to middle market companies.

Additionally, these types of companies are generally limited in their ability to access the institutional leveraged loan and high yield

markets due to challenging size and liquidity requirements imposed by these institutional investors.

Given that banks have not been active

(or consistent) providers of leveraged loans to middle market companies, we believe these financial institutions will continue to have

a difficult time establishing a trusted relationship with private equity sponsors and investment banks in this area of the capital markets.

Finally, as the universe of non-bank lenders has grown, many capital providers have pursued companies in the upper middle market leaving

the core middle market as a less competitive and attractive marketplace.

We believe that these market dynamics create

opportunities for us to make investments with attractive risk-adjusted rates of return.

In addition to commanding higher pricing, principally

due to illiquidity, directly negotiated middle market financings generally provide for more favorable terms to lenders than broadly syndicated

loans, including more conservative leverage ratios, stronger covenants and reporting packages, better call protection, and more restrictive change-of-control provisions.

The credit investments that we expect to hold in our portfolio will

generate what we believe are attractive yields, will make quarterly interest payments to holders and will typically rank ahead of other

debt instruments in the borrower’s capital structure.

The vast majority of our credit investments are expected to be floating rate

loans, providing a natural hedge against inflation if interest rates increase.

As a result of Kayne Anderson’s middle-market private

credit team’s focus on lending at more conservative debt multiples than the broader market and to businesses that exhibit limited

cyclicality, we believe that operating results for the Company’s portfolio investments will have minimal correlation to price changes

in the broader equity markets.

This lack of correlation to the broader equity markets, combined with attractive yields on senior debt

investments and downside protection as a result of our secured middle-market loans’

seniority in such company’s capital structure,

are some of the reasons we find private credit investments to be compelling for our portfolio.

Together, these businesses represent approximately one-third of the U.S.

private sector GDP making them

equivalent to the size of the third largest economy in the world on a standalone basis and employing approximately 48 million people.

middle market includes businesses held

under an array of ownership structures including publicly and privately held companies, those held in trusts, sole proprietorships, etc.

These businesses are also, broadly speaking, geographically diverse and span almost all industries.

Middle market companies outperformed

through the financial crisis (i.e., the 2007–2010 period) by adding 2.2 million jobs across major industry sectors and U.S.

demonstrating their importance to the overall health of the U.S.

More than three-quarters of middle market companies demonstrated

revenue growth in 2021 as compared to the prior year, and while the COVID rebound was not as strong as the rebound exhibited by the S&P

500 Index, the downturn also was not as severe.

Further, there is a large amount of uninvested capital held by private

equity funds focused on investing in middle market businesses.

We expect these private equity firms will continue to pursue acquisitions

and to seek to fund a portion of these transactions with debt.

We expect that a number of factors will continue

to drive strong demand for middle market senior credit, both by private equity owned and non-private equity owned companies, for the foreseeable

future, including:

(i) primary market opportunities driven by a significant amount of unspent middle market private equity capital, (ii)

opportunities driven by a large need for the refinancing or restructuring of existing debt of healthy companies and (iii) supplemental

and growth capital opportunities.

Meanwhile, the supply of capital to middle market borrowers is relatively constrained due to (i) a long-term

regulatory trend that has nearly eliminated bank participation in leveraged finance due to stricter federal leveraged lending guidelines,

(ii) consolidation of commercial banks over the last two decades, which has caused banks to abandon the middle market as they move up-market

to service larger clients, (iii) the continued up-market movement of select competitors that historically participated in middle market

financings and which now participate mostly in upper-middle market financings as target hold-sizes have increased and (iv) direct lending

increasing share relative to broadly syndicated deals and mezzanine financings.

Further, current economic and geopolitical

concerns have created a market dislocation in certain segments of lending markets globally with a lack of available capital to finance

transaction activity.

We believe this has created a substantial enhancement of the relative risk-reward profile for non-liquid private

credit markets as an asset class, particularly for managers with a track record of investing through potentially uncertain economic times.

First, inflationary concerns in the United

States have led the U.S.

Federal Reserve to substantially increase rates, which have driven an increase in reference rates (e.g., LIBOR

or SOFR) underpinning the pricing structure of floating rate securities from under 1.0% at year-end 2021 to over 4.50% (3-month SOFR)

as of December 2022.

This increase in reference rates inures to the benefit of lenders, increasing returns to investors.

Second, global economic considerations (e.g.,

the risk of a near-term recessionary environment) driven in part by (i) the aforementioned inflationary environment and the U.S.

Reserve’s response thereto, (ii) continued supply chain constraints globally and (iii) uncertainty associated with the Russian /

Ukrainian conflict have created an environment in which lending institutions broadly have moderated activity.

Most of this pull back has

occurred in the upper-middle and large syndicated markets.

Regardless, there has been a trickle-down effect of (a) increased opportunities

for middle-market lenders to participate in larger transactions at attractive terms and (b) a general shift toward more lender-friendly

terms inclusive of more conservative structures, increased economics and tightening of documentation.

While uncertainty associated with each of

the above factors exists, we believe that, in the hands of a team with experience managing capital through multiple historical economic

cycles, today’s climate represents an opportune time to generate attractive risk-adjusted returns relative to nearly any asset class.

In addition to commanding higher pricing, principally due to illiquidity, directly negotiated middle market financings generally provide

for more favorable terms to lenders than broadly syndicated loans, including more conservative leverage ratios, stronger covenants and

reporting packages, better call protection, and more restrictive change-of-control provisions.

The credit investments that we hold in our portfolio generate what

we believe are attractive yields, make quarterly interest payments to holders and typically rank ahead of other debt instruments in the

borrower’s capital structure.

The vast majority of our credit investments are expected to be floating rate loans, providing a natural

hedge against inflation in a higher interest rate environment.

As a result of Kayne Anderson’s middle-market private credit team’s

focus on lending at more conservative debt multiples than the broader market and to businesses that exhibit limited cyclicality, we believe

that operating results for the Company’s portfolio investments will have minimal correlation to price changes in the broader equity

This lack of correlation to the broader equity markets, combined with attractive yields on senior debt investments and downside

protection as a result of our secured middle-market loans’ seniority in such company’s capital structure, are some of the

reasons we find private credit investments to be compelling for our portfolio.

We compete with a number of BDCs and investment funds (both public

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portfolio companies.

For additional information concerning competitive risks, see “

Item 1A –

Risk Factors.

For additional information concerning competitive risks, see “ Item 1A – Risk Factors.

Investment Advisor

Our investment activities are managed by our Advisor, an investment

advisor that is registered with the SEC under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), under

an investment advisory agreement between us and the Advisor (the “Investment Advisory Agreement”).

Our Advisor is responsible

for originating prospective investments, conducting research and due diligence investigations on potential investments, analyzing investment

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

we do not have any employees, the Advisor and its affiliates have a team of approximately 35 investment professionals who are primarily

focused on private credit investments and liquid credit investments.

The investment team is supported by a team of finance, legal, compliance,

operations and administrative professionals.

The Advisor’s investment committee has overall responsibility

for evaluating and approving the Company’s investments, and its portfolio allocations, subject to the oversight of our Board of

Our investment activities are managed by our

Advisor, an investment advisor that is registered with the SEC under the Investment Advisers Act of 1940, as amended (the “Advisers

Act”), under an investment advisory agreement between us and the Advisor (the “Investment Advisory Agreement”).

Advisor is responsible for originating prospective investments, conducting research and due diligence investigations on potential investments,

analyzing investment opportunities, negotiating and structuring investments and monitoring our investments and portfolio companies on

an ongoing basis.

While we do not have any employees, the Advisor and its affiliates have a team of approximately 41 investment professionals

who are primarily focused on private credit investments and liquid credit investments.

The investment team is supported by a team of finance,

legal, compliance, operations and administrative professionals.

The Advisor’s investment committee has overall responsibility

for evaluating and approving the Company’s investments, and its portfolio allocations, subject to the oversight of our Board of

The investment committee review process is intended to bring the diverse experience and perspectives of the investment committee

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Chairman of Kayne Anderson;

Blank, Chief Operating Officer of Kayne Anderson;

Baker, Jr., Co-Head of Liquid

Energy Infrastructure at Kayne Anderson;

Blank, President and Chief Operating Officer of Kayne Anderson;

Baker, Jr., Co-Head of

Liquid Energy Infrastructure at Kayne Anderson;

Goodwillie, Co-Head of Private Credit at Kayne Anderson;

and Kenneth B.

Leonard, Co-Head of Private Credit at Kayne Anderson.

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Leonard, each a Co-Chief Investment Officer

of the Company, are jointly and primarily responsible for the day-to-day management of the Company’s portfolio.

In addition to reviewing investments, the

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Pursuant to an administration

agreement (the “Administration Agreement”), our Administrator is responsible for providing or overseeing the performance of

our required administrative services and professional services rendered by others, which will include (but not limited to), accounting,

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About Kayne Anderson Capital Advisors,

Founded in 1984, Kayne Anderson is a leading alternative investment

management firm which is registered with the SEC under the Advisers Act, focused on real estate, credit, infrastructure/energy, renewables

and growth equity.

Kayne Anderson’s investment philosophy is to pursue niches, with an emphasis on cash flow, where its knowledge

and sourcing advantages enable it to deliver above average, risk-adjusted investment returns.

As responsible stewards of capital, Kayne

Anderson’s investment philosophy extends to promoting responsible investment practices and sustainable business practices to create

long-term value for its investors.

As of December 31, 2021, investment vehicles

managed or advised by Kayne Anderson had over $30 billion in assets under management for institutional investors, family offices,

high net worth and retail clients.

Kayne Anderson has over 325 employees located across five offices across the U.S.

The firm has approximately

140 investment professionals, 35 of which are dedicated to credit investing.

Kayne Anderson’s credit platform operates

Founded in 1984, Kayne Anderson is a leading

alternative investment management firm which is registered with the SEC under the Advisers Act, focused on real estate, credit, infrastructure/energy,

renewables and growth capital.

Kayne Anderson’s investment philosophy is to pursue niches, with an emphasis on cash flow, where

its knowledge and sourcing advantages enable it to deliver above average, risk-adjusted investment returns.

As responsible stewards of

capital, Kayne Anderson’s investment philosophy extends to promoting responsible investment practices and sustainable business practices

to create long-term value for its investors.

As of December 31, 2022, investment vehicles managed or advised

by Kayne Anderson had over $32 billion in assets under management for institutional investors, family offices, high net worth and

retail clients.

Kayne Anderson has 335 professionals located across five offices across the U.S.

The firm has approximately 140 investment

professionals, 41 of which are dedicated to credit investing.

Kayne Anderson’s credit platform operates

various fund vehicles that pursue investment opportunities across several investment strategies.

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We conduct private offerings of our Common

Stock to investors in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities

At the closing of any private offering, each investor will make a capital commitment (a “Capital Commitment”)

to purchase shares of our Common Stock (“Shares”) pursuant to a subscription agreement (the “Subscription Agreement”)

Stock to investors in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities

At the closing of any private offering, each investor will make a capital commitment (a “Capital Commitment”)

to purchase shares of our Common Stock (“Shares”) pursuant to a subscription agreement (the “Subscription Agreement”)

entered into with us.

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each time we deliver a notice to the investors.

All purchases will generally be made pro rata in accordance with the investors’

Capital Commitments, at a per-Share price as determined by our Board of Directors as of a date that is immediately prior to

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Following our initial closing of the private

offering on February 5, 2021 (the “Initial Closing”) and prior to any Liquidity Event (as defined below), our investment

adviser may, in its sole discretion, permit additional closings of the private offering.

A “Liquidity Event”

is defined as

(a) an initial public offering of our Shares (the “Initial Public Offering”) or the listing of our Shares on an exchange

(together with the Initial Public Offering, an “Exchange Listing”), (b) the sale of the Company or (c) a disposition

of the Company’s investments and distribution of the net proceeds (after repayment of borrowed funds or other forms of leverage)

to the Company’s investors.

A “Liquidity Event” is defined as

(a) an initial public offering of our Shares (the “Initial Public Offering”) or the listing of our Shares on an exchange

(together with the Initial Public Offering, an “Exchange Listing”), (b) the sale of the Company or (c) a disposition

of the Company’s investments and distribution of the net proceeds (after repayment of borrowed funds or other forms of leverage)

to the Company’s investors.

Our initial private offering of Shares was

conducted in reliance on Regulation D under the Securities Act (“Regulation D”).

Investors in our initial private offering

were required to be “accredited investors”

as defined in Regulation D of the Securities Act.

were required to be “accredited investors” as defined in Regulation D of the Securities Act.

The criteria required of Regulation

D may not apply to investors in subsequent offerings.

We are targeting $800 million in commitments at this time (the

“Initial Capital Raise”), and we expect to complete this offering in early 2022.

Following our Initial Closing, each investor

was required to make purchases of Shares (each, a “Catch-up Purchase”) on one or more dates to be determined by

The aggregate purchase price of any Catch-up Purchase will be equal to an amount necessary to ensure that, upon payment

of the aggregate purchase price, such investor will have contributed the same percentage of its Capital Commitment to us as all investors

whose subscriptions were accepted at previous closings.

Catch-up Purchases will be made at a per-Share price as determined

by our Board of Directors prior to the date of the applicable drawdown, or such other date as may be required to comply with the provisions

of the 1940 Act.

In order to more fairly allocate organizational expenses among all of our stockholders, investors subscribing after the

initial drawdown will be required to pay a price per Share above net asset value reflecting a variety of factors, including, without limitation,

the total amount of our organizational and other expenses.

We are targeting approximately $900 million in commitments, which

may be more or less than this amount (the “Initial Capital Raise”), and we intend to complete this offering in 2023.

our Initial Closing, each investor was required to make purchases of Shares (each, a “Catch-up Purchase”) on one

or more dates to be determined by us.

The aggregate purchase amount of any Catch-up Purchase will be equal to an amount necessary

to ensure that, upon payment of the aggregate purchase amount, such investor will have contributed the same percentage of its Capital

Commitment to us as all investors whose subscriptions were accepted at previous closings.

Catch-up Purchases will be made at

a per-Share price as determined by our Board of Directors prior to the date of the applicable drawdown, or such other date as

may be required to comply with the provisions of the 1940 Act.

In order to more fairly allocate organizational expenses among all of our

stockholders, investors subscribing after the initial drawdown will be required to pay a price per Share above net asset value reflecting

a variety of factors, including, without limitation, the total amount of our organizational and other expenses.

As of March 9, 2023, we had entered into subscription

agreements with investors for an aggregate capital commitment of $701.5 million to purchase shares of common stock (including a $33.3

million capital commitment that is contingent on us meeting certain conditions).

agreements with investors for an aggregate capital commitment of $832.3 million to purchase shares of common stock ($264.6 million is

We conducted the following private offerings

of our common stock associated with these subscription agreements during the year ended December 31, 2022.

call notice date

Capital call notice date

Common stock issue date

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January 13, 2022

February 5, 2021

April 12, 2021

April 23, 2021

January 24, 2022

July 12, 2022

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Total common stock issued

On January 24, 2022, we sold 4,191,292 shares

of common stock at a price of $16.36 per share for an aggregate offering amount of $68.6 million.

Commitment Period

Upon the earlier of (a) December 31,

2024 or (b) an Exchange Listing (the “Commitment Period”), investors will be released from any further obligation to

purchase additional Shares with respect to a Capital Commitment.

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direct the Company to cease making new investments and will direct the Advisor to commence the orderly disposition of investments (the

“Wind Down Period”).

The Company shall be allowed to make follow-on investments during the Wind Down Period if such

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Existing investments

will be disposed of in an orderly manner and the proceeds of such dispositions promptly distributed to the Company’s investors or

used to satisfy any amounts owed under any borrowed funds or other forms of leverage (the “Company Liquidation”).

will be disposed of in an orderly manner and the proceeds of such dispositions promptly distributed to the Company’s investors or

used to satisfy any amounts owed under any borrowed funds or other forms of leverage (the “Company Liquidation”).

If any investments

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Shareholder Agreements

We entered into several agreements (collectively,

the “Shareholder Agreements”) with investors who participate in our private offering during our Initial Capital Raise (each

an “Initial Investor”).

We entered into several agreements (collectively, the “Shareholder

Agreements”) with investors who participate in our private offering during our Initial Capital Raise (each an “Initial Investor”).

The Initial Investors are granted the right to invest in our investment advisor.

Upon completion of

our Initial Capital Raise, we anticipate that the initial investors will own approximately 32% of our investment advisor.

Upon completion of our Initial Capital Raise, we anticipate

that the initial investors will own approximately 34.5% of our investment advisor.

Investment Advisory Agreement

On February 5, 2021, we entered into the

Investment Advisory Agreement with our Advisor.

Pursuant to the Investment Advisory Agreement with our Advisor, we will pay our

Advisor a fee for investment advisory and management services consisting of two components —

a base management fee and an

incentive fee.

Our Advisor may, from time-to-time, grant waivers on our obligations, including waivers of the

base management fee and/or incentive fee, under the Investment Advisory Agreement.

The Investment Advisory Agreement may be

terminated by either party with 60 days’

written notice.

On February 5, 2021, we entered into the Investment Advisory Agreement

with our Advisor.

Pursuant to the Investment Advisory Agreement with our Advisor, we will pay our Advisor a fee for investment advisory

and management services consisting of two components — a base management fee and an incentive fee.

Our Advisor may, from time-to-time,

grant waivers on our obligations, including waivers of the base management fee and/or incentive fee, under the Investment Advisory Agreement.

The Investment Advisory Agreement may be terminated by either party with 60 days’ written notice.

On November 8, 2022, the Board

of Directors extended the term of the Investment Advisory Agreement until March 15, 2023.

Base Management Fee

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Advisor an incentive fee.

The incentive fee will consist of two parts—an incentive fee on income and an incentive fee on capital

Described in more detail below, these components of the incentive fee will be largely independent of each other with the result

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The incentive fee based

on income (the “income incentive fee”) is determined and paid quarterly in arrears in cash.

Our quarterly pre-incentive fee

net investment income must exceed a preferred return of 1.50% of the our NAV at the end of the immediately preceding calendar quarter

(6.0% annualized but not compounded) (the “Hurdle Amount”) in order for us to receive an income incentive fee.

incentive fee is calculated as follows:

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Quarterly Incentive Fee

100% à

Incentive Fee on

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Quarterly Incentive Fee

100% à

Pre-incentive fee net investment income is defined as interest

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The incentive fee on

capital gains (the “capital gains incentive fee”) will be calculated and payable in arrears in cash as follows:

Prior to an Exchange Listing :

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Administration Agreement

On February 5, 2021, we entered into

an Administration Agreement with our Advisor, which will serve as our Administrator and will provide or oversee the performance of our

required administrative services and professional services rendered by others, which will include (but not limited to), accounting, payment

of our expenses, legal, compliance, operations, technology and investor relations, preparation and filing of our tax returns, and preparation

of financial reports provided to our stockholders and filed with the SEC.

On February 5, 2021, we entered into an Administration Agreement

with our Advisor, which will serve as our Administrator and will provide or oversee the performance of our required administrative services

and professional services rendered by others, which will include (but not limited to), accounting, payment of our expenses, legal, compliance,

operations, technology and investor relations, preparation and filing of our tax returns, and preparation of financial reports provided

to our stockholders and filed with the SEC.

On November 8, 2022, the Board of Directors extended the term of the Administration Agreement

until March 15, 2023.

We reimburse the Administrator for its costs and expenses incurred

in performing its obligations under the Administration Agreement, which may include, after completion of our Exchange Listing, our allocable

portion of office facilities, overhead, and compensation paid to or compensatory distributions received by our officers (including our

Chief Compliance Officer and Chief Financial Officer) and their respective staff who provide services to us.

As we reimburse the Administrator

for its expenses, we will indirectly bear such cost.

The Administration Agreement may be terminated by either party with 60 days’

written notice.

portion of office facilities, overhead, and compensation paid to or compensatory distributions received by our officers (while not currently

doing so, including our Chief Compliance Officer and Chief Financial Officer) and their respective staff who provide services to us.

we reimburse the Administrator for its expenses, we will indirectly bear such cost.

The Administration Agreement may be terminated by

either party with 60 days’ written notice.

Our Administrator engaged U.S.

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diversification tests in order to qualify as a RIC for U.S.

federal income tax purposes (the “Diversification Tests”).

Business —

Material U.S.

Federal Income Tax Considerations .”

federal income tax purposes (the “Diversification Tests”).

Business — Material U.S.

Federal Income Tax Considerations .”

against interest rate fluctuations by using standard hedging instruments such as futures, options and forward contracts subject to the

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any asset other than assets of the type listed in Section 55(a) of the 1940 Act, which are referred to as qualifying assets, unless,

at the time the acquisition is made, qualifying assets represent at least 70% of the BDC’s total assets.

The principal categories

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We may invest up to 30% of our portfolio

opportunistically in “non-qualifying assets.”

Managerial Assistance to Portfolio

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its principal place of business in the United States and must be operated for the purpose of making investments in the types of securities

described in (1), (2), or (3) above under “

—Regulation as a Business Development Company—Qualifying Assets .”

described in (1), (2), or (3) above under “ —Regulation as a Business Development Company—Qualifying Assets .”

However, in order to count portfolio securities as qualifying assets for the purpose of the 70% test, the BDC must either control the

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Temporary Investments

Pending investment in other types of “qualifying

assets,”

as described above, our investments may consist of cash, cash equivalents, U.S.

Pending investment in other types of “qualifying

assets,” as described above, our investments may consist of cash, cash equivalents, U.S.

government securities or high-quality

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capital, which may expose us to risks.

Code of Ethics

We and our Advisor have adopted a code of

ethics pursuant to Rule 17j-1 under the 1940 Act that establishes procedures for personal investments and restricts certain

personal securities transactions.

Personnel subject to the joint code may invest in securities for their personal investment accounts,

including securities that may be purchased or held by us, so long as such investments are made in accordance with the code’s requirements.

You may review or download the codes of ethics from the SEC’s Edgar database as part of our filings under www.sec.gov, or by written

request to the following:

Chief Compliance Officer, Kayne Anderson, 811 Main Street, 14 th Floor, Houston, TX 77002.

Codes of Ethics

We and our Advisor have adopted a code of ethics pursuant to Rule 17j-1 under

the 1940 Act that establishes procedures for personal investments and restricts certain personal securities transactions.

Personnel subject

to the joint code may invest in securities for their personal investment accounts, including securities that may be purchased or held

by us, so long as such investments are made in accordance with the code’s requirements.

In addition, we have adopted a code of ethics

applicable to our Principal Executive Officer, Principal Accounting Officer and senior financial officers pursuant to Section 406 of the

Sarbanes-Oxley Act of 2022.

You may review or download the codes of ethics from the SEC’s Edgar database as part of our filings

under www.sec.gov, or by written request to the following:

Chief Compliance Officer, Kayne Anderson, 811 Main Street, 14 th Floor,

Houston, TX 77002.

Compliance Policies and Procedures

We make investments alongside certain entities

and accounts advised by our Advisor and its affiliates.

Under the 1940 Act, we are prohibited from knowingly participating in certain

joint transactions with our affiliates without the prior approval of the independent directors and, in some cases, prior approval by

However, we generally make investments alongside affiliated entities and accounts pursuant to exemptive relief granted by the

SEC to us, our Advisor, and certain of our affiliates on January 7, 2020.

Pursuant to such exemptive relief, and subject to certain

conditions, we are permitted to co-invest in the same security with our affiliates in a manner that is consistent with our

investment objective, investment strategy, regulatory consideration and other relevant factors.

If opportunities arise that would otherwise

be appropriate for us and an affiliate to purchase different securities in the same issuer, our Advisor will need to decide which account

will proceed with such investment.

Our Advisor’s investment allocation policy incorporates the conditions of exemptive relief to

seek to ensure that investment opportunities are allocated in a manner that is fair and equitable.

We make investments alongside certain entities and accounts advised

by our Advisor and its affiliates.

Under the 1940 Act, we are prohibited from knowingly participating in certain joint transactions with

our affiliates without the prior approval of the independent directors and, in some cases, prior approval by the SEC.

However, we generally

make investments alongside affiliated entities and accounts pursuant to exemptive relief granted by the SEC to us, our Advisor, and certain

of our affiliates on January 7, 2020.

Pursuant to such exemptive relief, and subject to certain conditions, we are permitted to co-invest in

the same security with our affiliates in a manner that is consistent with our investment objective, investment strategy, regulatory consideration

and other relevant factors.

If opportunities arise that would otherwise be appropriate for us and an affiliate to purchase different securities

in the same issuer, our Advisor will need to decide which account will proceed with such investment.

Our Advisor’s investment allocation

policy incorporates the conditions of exemptive relief to seek to ensure that investment opportunities are allocated in a manner that

is fair and equitable.

We will be periodically examined by the SEC

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be prohibited from protecting any director or officer against any liability to us or our stockholders arising from willful misfeasance,

bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such person’s office.

We and our Advisor have adopted and implemented

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We currently are and expect to remain an

“emerging growth company,”

as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”), until the

“emerging growth company,” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”), until the

the last day of the fiscal year ending after the fifth anniversary

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Under the JOBS Act and the Dodd-Frank Wall

Street Reform and Consumer Protection Act (“Dodd-Frank”), we are exempt from the provisions of Section 404(b) of the

Sarbanes-Oxley Act, which would require that our independent registered public accounting firm provide an attestation report on the effectiveness

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The Commodity Futures Trading Commission

(“CFTC”) and the SEC have issued final rules establishing that certain swap transactions are subject to CFTC regulation.

Engaging in such swap transactions may cause us to fall within the definition of “commodity pool”

under the Commodity Exchange

(“CFTC”) and the SEC have issued final rules establishing that certain swap transactions are subject to CFTC regulation.

Engaging in such swap transactions may cause us to fall within the definition of “commodity pool” under the Commodity Exchange

Act and related CFTC regulations.

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CPO, with respect to us, the Advisor is not required to deliver a Disclosure Document or an Annual Report (as those terms are used in

the CFTC’s rules) to shareholders.

Proxy Voting Policies and Procedures

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and, accordingly, are subject to change.

For purposes of these Proxy Voting Policies and Procedures described below, “we”

“our”

and “us”

refers to our Advisor.

For purposes of these Proxy Voting Policies and Procedures described below, “we”

“our” and “us” refers to our Advisor.

An investment advisor registered under the

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As part of this duty, we recognize that we must

vote the Company’s securities in a timely manner free of conflicts of interest and in the best interests of the Company and its

stockholders.

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(www.kaynebdc.com) our annual reports on Form 10-K, quarterly reports on Form 10-Q and our current reports on Form 8-K.

and the public may also read and copy any materials we file with the SEC at the SEC’s Public Reference Room, 100 F Street, N.E.,

Washington, D.C.

20549 and on the SEC’s website at www.sec.gov.

Information on the operation of the SEC’s

20549 and on the SEC’s website at www.sec.gov.

Information on the operation of the SEC’s

public reference room may be obtained by calling the SEC at (202) 551-8090 or (800) SEC-0330.

The reference

to our website and the SEC’s website is an inactive textual reference only, and the information should not be considered a part

of this Form 10-K.

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federal income tax laws that could result if we invested in tax-exempt securities or certain other investment

For purposes of this discussion, references to “dividends”

are to dividends within the meaning of the U.S.

For purposes of this discussion, references to “dividends” are to dividends within the meaning of the U.S.

income tax laws and associated regulations and may include amounts subject to treatment as a return of capital under section 19(a) of

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does not represent income or capital gains.

A “U.S.

stockholder”

is a beneficial

stockholder” is a beneficial

owner of our Shares that is for U.S.

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person prior to that date, and has made a valid election to be treated as

A “non-U.S.

stockholder”

stockholder” is

a beneficial owner of our Shares that is neither a U.S.

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for RIC treatment, we must distribute to our stockholders, for each taxable year, dividends of an amount at least equal to the sum of

90% of our “investment company taxable income,”

which is generally our net ordinary income plus the excess of realized net

90% of our “investment company taxable income,” which is generally our net ordinary income plus the excess of realized net

short-term capital gains over realized net long-term capital losses and determined without regard to any deduction for dividends paid,

and 90% of our net tax-exempt interest income, if any (the “Annual Distribution Requirement”).

Although not required

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plus capital gains net income for preceding years that were not distributed during such years and on which we paid no federal income

tax (the “Excise Tax Avoidance Requirement”).

Taxation as a RIC

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with respect to our business of investing in such stock or securities, or currencies, other income derived with respect to its business

of investing in such stock, securities or currencies and net income derived from interests in “qualified publicly traded partnerships”

(partnerships that are traded on an established securities market or tradable on a secondary market, other than partnerships that

derive 90% of their income from interest, dividends and other permitted RIC income) (the “90% Income Test”);

diversify our holdings so that at the end of each quarter of the taxable

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we are not permitted to make distributions to our stockholders while our debt obligations and other senior securities are outstanding

unless certain “asset coverage”

tests are met.

Business —

Regulation as a Business Development

Company —

Senior Securities and Indebtedness .”

Moreover, our ability to dispose of assets to meet our distribution

unless certain “asset coverage” tests are met.

See “ Item 1.

Business — Regulation as a Business Development

Company — Senior Securities and Indebtedness .” Moreover, our ability to dispose of assets to meet our distribution

requirements may be limited by (1) the illiquid nature of our portfolio and/or (2) other requirements relating to our qualification

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received deduction with respect to such dividends and non-corporate stockholders would generally be able to

treat such dividends as “qualified dividend income,”

which is subject to reduced rates of U.S.

treat such dividends as “qualified dividend income,” which is subject to reduced rates of U.S.

federal income tax.

Distributions in excess of our current and accumulated earnings and profits would be treated first as a return of capital to the

extent of the stockholder’s tax basis, and any remaining distributions would be treated as a capital gain.

If we fail to

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stockholders as ordinary income or capital gains.

Distributions of our “investment company taxable income”

Distributions of our “investment company taxable income” (which

is, generally, our net ordinary income plus net short-term capital gains in excess of net long-term capital losses) will be taxable as

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are met, such distributions generally will be treated as qualified dividend income and generally eligible for a maximum U.S.

tax rate of either 15% or 20%, depending on whether the individual stockholder’s income exceeds certain threshold amounts, and

if other applicable requirements are met, such distributions generally will be eligible for the corporate dividends received deduction

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is generally our realized net long-term capital gains in excess of realized net short-term capital losses) properly reported by us as

“capital gain dividends”

will be taxable to a U.S.

“capital gain dividends” will be taxable to a U.S.

stockholder as long-term capital gains (currently generally at a maximum

rate of either 15% or 20%, depending on whether the individual stockholder’s income exceeds certain threshold amounts) in the case

of individuals, trusts or estates, regardless of the U.S.

stockholder’s holding period for his, her or its Shares and regardless

of whether paid in cash or reinvested in additional Shares.

Distributions in excess of our earnings and profits first will reduce a U.S.

stockholder’s adjusted tax basis in such stockholder’s Shares and, after the adjusted basis is reduced to zero, will constitute

capital gains to such U.S.

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any net capital gains at least annually, we may in the future decide to retain some or all of our net capital gains but designate the

retained amount as a “deemed distribution.”

In that case, among other consequences, we will pay tax on the retained amount,

retained amount as a “deemed distribution.” In that case, among other consequences, we will pay tax on the retained amount,

stockholder will be required to include their share of the deemed distribution in income as if it had been distributed to the

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The amount of the deemed distribution net of such tax will be added to the U.S.

stockholder’s

tax basis for their Shares.

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Such excess generally may be claimed as a credit against the U.S.

stockholder’s other U.S.

federal income tax

obligations or may be refunded to the extent it exceeds a stockholder’s liability for U.S.

federal income tax.

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taxable year.

We cannot treat any of our investment company taxable income as a “deemed distribution.”

For purposes of determining (1) whether

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the day on which the shares are credited to the U.S.

Shareholder’s account.

If an investor purchases Shares shortly before

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federal income tax rate of either 15% or 20% (depending on whether the individual U.S.

stockholder’s

income exceeds certain threshold amounts) on their net capital gain, i.e., the excess of realized net long-term capital gain over realized

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includible in such U.S.

stockholder’s taxable income for such year as ordinary income and as long-term capital gain.

federal tax status of each calendar year’s distributions generally will be reported to the IRS.

stockholder’s taxable income for such year as ordinary income and as long-term capital gain.

federal tax status of each calendar year’s distributions generally will be reported to the IRS.

Distributions may also

be subject to additional state, local and foreign taxes depending on a U.S.

stockholder’s particular situation.

Dividends distributed

by us generally will not be eligible for the dividends-received deduction or the lower tax rates applicable to certain qualified dividends.

Until and unless we are treated as a “publicly offered regulated

investment company”

(within the meaning of Section 67 of the Code) as a result of either (1) Shares and our preferred

Until and unless we are treated as a “publicly offered regulated

investment company” (within the meaning of Section 67 of the Code) as a result of either (1) Shares and our preferred

stock collectively being held by at least 500 persons at all times during a taxable year, (2) our Shares being continuously offered

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are individuals, trusts or estates, (1) our earnings will be computed without taking into account such U.S.

stockholders’

stockholders’ allocable

shares of the management and incentive fees paid to our investment advisor and certain of our other expenses, (2) each such U.S.

stockholder will be treated as having received or accrued a dividend from us in the amount of such U.S.

stockholder’s allocable

share of these fees and expenses for such taxable year, (3) each such U.S.

stockholder will be treated as having paid or incurred

stockholder’s allocable share of these fees and expenses for the calendar year and (4) each such U.S.

stockholder’s

stockholder’s allocable share of these fees and expenses for the calendar year and (4) each such U.S.

stockholder’s

allocable share of these fees and expenses may be treated as miscellaneous itemized deductions by such U.S.

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in 2026 and deductible only to the extent that the aggregate of such U.S.

stockholder’s miscellaneous itemized deductions exceeds

2% of such U.S.

stockholder’s adjusted gross income for U.S.

federal income tax purposes.

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income to the IRS and to respond to notices to that effect.

An individual’s taxpayer identification number is his or her

social security number.

Any amount withheld under backup withholding is allowed as a credit against the U.S.

stockholder’s

federal income tax liability and may entitle such stockholder to a refund, provided that proper information is timely provided

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The fact that a loss is

reportable under these regulations does not affect the legal determination of whether the taxpayer’s treatment of the loss is proper.

stockholders should consult their tax advisors to determine the applicability of these regulations in light of their specific circumstances.

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federal income taxation may nevertheless be subject to taxation

to the extent that it is considered to derive unrelated business taxable income (“UBTI”).

The direct conduct by a tax-exempt

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taxation solely as a result

of the shareholder’s ownership of our Shares and receipt of dividends with respect to such common stock.

Moreover, under current

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Therefore, a tax-exempt U.S.

Shareholder should not be treated as earning income from “debt-financed property”

and dividends we pay should not be treated

as “unrelated debt-financed income”

solely as a result of indebtedness that we incur.

Shareholder should not be treated as earning income from “debt-financed property” and dividends we pay should not be treated

as “unrelated debt-financed income” solely as a result of indebtedness that we incur.

Legislation has been introduced in Congress

in the past, and may be introduced again in the future, which would change the treatment of “blocker”

investment vehicles

in the past, and may be introduced again in the future, which would change the treatment of “blocker” investment vehicles

interposed between tax-exempt investors and non-qualifying investments if enacted.

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or other taxable dispositions of our shares) of U.S.

individuals, estates and trusts to the extent that such person’s “modified

adjusted gross income”

(in the case of an individual) or “adjusted gross income”

(in the case of an estate or trust)

individuals, estates and trusts to the extent that such person’s “modified

adjusted gross income” (in the case of an individual) or “adjusted gross income” (in the case of an estate or trust)

exceed certain threshold amounts.

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Whether an investment in the Shares is appropriate for a non-U.S.

stockholder will depend upon that person’s

particular circumstances.

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Subject to the discussion below, distributions

of our “investment company taxable income”

of our “investment company taxable income” to non-U.S.

stockholders (including interest income, net short-term capital gain

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stockholder generally are exempt from U.S.

federal withholding tax when they (1) are paid in respect of our “qualified

net interest income”

(generally, our U.S.

federal withholding tax when they (1) are paid in respect of our “qualified

net interest income” (generally, our U.S.

source interest income, other than certain contingent interest and interest from obligations

of a corporation or partnership in which we are at least a 10% stockholder, reduced by expenses that are allocable to such income), or

(2) are paid in connection with our “qualified short-term capital gains”

(generally, the excess of our net short-term capital

(2) are paid in connection with our “qualified short-term capital gains” (generally, the excess of our net short-term capital

gain over our long-term capital loss for a tax year) as well as if certain other requirements are satisfied.

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stockholder will be entitled to a U.S.

federal income tax credit or tax refund equal to the stockholder’s allocable share of the tax we pay on the capital gains deemed

to have been distributed.

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trade or business may, under certain circumstances, be

subject to an additional “branch profits tax”

at a 30% rate (or at a lower rate if provided for by an applicable treaty).

subject to an additional “branch profits tax” at a 30% rate (or at a lower rate if provided for by an applicable treaty).

stockholder who is a non-resident

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

What changed 10-K

Item 1. Business