What changed in this filing

/stocks — the workspaceLOADING

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2023-03-13 compared with 2022-03-10 · 1232 added, 625 removed, 752 unchanged (71% of the section changed)

8 unchanged sentences

change in market interest rates will not have a material adverse effect on our net investment income.

Assuming that the consolidated statement

of assets and liabilities as of December 31, 2021 were to remain constant and that we took no actions to alter our existing interest

rate sensitivity, the following table shows the annualized impact ($ in millions) of hypothetical base rate changes in interest rate

(considering interest rate floors for floating rate instruments).

Assuming that the consolidated statement of

assets and liabilities as of December 31, 2022 were to remain constant and that we took no actions to alter our existing interest rate

sensitivity, the following table shows the annualized impact ($ in millions) of hypothetical base rate changes in interest rate (considering

interest rate floors for floating rate instruments).

Change in Interest Rates

(Decrease) in

Increase (Decrease) in Interest Income

Increase (Decrease) in Interest Expense

Net Increase (Decrease) in Net Investment Income

Down 200 basis points

Up 75 basis points

Up 100 basis points

Down 100 basis points

Up 100 basis points

Up 200 basis points

The data in the table is based on the Company’s

current statement of assets and liabilities.

5 unchanged sentences

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) F-2

Consolidated Statements of Assets and Liabilities as of December 31, 2022 and 2021 F-3

Consolidated Statements of Operations for the years ended December 31, 2022 and 2021 F-4

Consolidated Statements of Changes in Net Assets for the years ended December 31, 2022 and 2021 F-5

Consolidated Statement of Cash Flows for the years

ended December 31, 2022 and 2021 F-6

Consolidated Schedules of Investments as of December 31, 2022 and 2021 F-7

Notes to Consolidated Financial Statements F-15

Report of Independent Registered Public Accounting

Firm (PCAOB ID 238)

Consolidated Statements of Assets and Liabilities

as of December 31, 2021 and 2020

Consolidated Statements of Operations for the years

ended December 31, 2021 and 2020

Consolidated Statements of Changes in Net Assets for

the years ended December 31, 2021 and 2020

Consolidated Statement of Cash Flows for the years ended December 31, 2021 and 2020

Consolidated Schedule of Investments as of December 31,

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Kayne Anderson BDC, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated statement of assets and

liabilities, including the consolidated schedule of investments, of Kayne Anderson BDC, Inc.

(the “Company”) as of December

31, 2021, the consolidated statement of assets and liabilities as of December 31, 2020, the related consolidated statements of operations,

changes in net assets and cash flows for each of the two years in the period ended December 31, 2021, including the related notes, and

financial highlights for the year ended December 31, 2021 (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company

as of December 31, 2021 and December 31, 2020, and the results of its operations, changes in its net assets and its cash flows for each

of the two years in the period ended December 31, 2021 and the financial highlights for the year ended December 31, 2021 in conformity

with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated statements of assets

and liabilities, including the consolidated schedules of investments, of Kayne Anderson BDC Inc.

(the “Company”) as of December

31, 2022, and December 31, 2021, and the related consolidated statements of operations, changes in net assets and cash flows for each

of the two years in the period ended December 31, 2022, including the related notes (collectively referred to as the “consolidated

financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial

position of the Company as of December 31, 2022, and December 31, 2021, and the results of its operations, changes in its net assets and

its cash flows for each of the two years in the period ended December 31, 2022, in conformity with accounting principles generally accepted

in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the

Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based

Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based

on our audits.

13 unchanged sentences

Our procedures included confirmation of securities owned

as of December 31, 2021 by correspondence with the custodian.

We believe that our audit provides a reasonable basis for our opinion.

as of December 31, 2022, and December 31, 2021, by correspondence with the custodian.

We believe that our audits provide a reasonable

basis for our opinion.

/s/ PricewaterhouseCoopers LLP

1 unchanged sentence

March 10, 2023

We have served as the auditor of one or more investment companies

in the Kayne Anderson Funds Family since 2004.

We have served as the auditor of one or more investment companies in

Kayne Anderson Funds Family since 2004.

Anderson BDC, Inc.

Statements of Assets and Liabilities

in 000’s, except share and per share amounts)

December 31, 2022

December 31, 2021

Investments, at fair value:

Long-term investments (amortized cost of $566,616)

Short-term investments (amortized cost of $3,674)

Long-term investments (amortized cost of $ 1,147,788 and $ 566,616 )

Short-term investments (amortized cost of $ 9,847 and $ 3,674 )

Cash and cash equivalents

Deferred offering costs

Receivable for principal payments on investments

Interest receivable

Prepaid expenses and other assets

Corporate Credit Facility (Note 6)

Unamortized Corporate Credit Facility issuance costs

Loan and Security Agreement (Note 6)

Unamortized Loan and Security Agreement issuance costs

Revolving Funding Facility (Note 6)

Unamortized Revolving Funding Facility issuance costs

Subscription Credit Agreement (Note 6)

1 unchanged sentence

Accrued organizational and offering costs

Payable for investments purchased

Distributions payable

Payables to affiliates (Note 3)

Management fee payable

1 unchanged sentence

Accrued expenses and other liabilities

Total Liabilities

Commitments and contingencies (Note 8)

1 unchanged sentence

100,000,000 shares authorized;

19,227,902 as

of December 31, 2021 issued and outstanding

35,879,291 and 19,227,902 as of December 31, 2022 and December 31, 2021, respectively, issued and outstanding

Additional paid-in capital

Total distributable earnings (deficit)

Total member’s capital (deficit)

Total Net Assets

Total Liabilities

and Net Assets

Net Asset Value Per Common Share

Total Liabilities and Net Assets

Net Asset Value Per

accompanying notes to consolidated financial statements.

1 unchanged sentence

Statements of Operations

in 000’s, except share and per share amounts)

For the years ended

23 unchanged sentences

Weighted Average Common Shares Outstanding - Basic and Diluted

accompanying notes to consolidated financial statements.

See accompanying notes to consolidated

financial statements.

Anderson BDC, Inc.

Statements of Changes in Net Assets

in 000’s)

For the years ended

14 unchanged sentences

Net Assets, End of Period

accompanying notes to consolidated financial statements.

See accompanying notes to consolidated financial statements.

Anderson BDC, Inc.

Statements of Cash Flows

in 000’s)

For the years ended

13 unchanged sentences

(Increase)/decrease in deferred offering costs

(Increase)/decrease in receivable for principal payments on investments

(Increase)/decrease in prepaid expenses and other assets

Increase/(decrease) in payable for investments purchased

Increase/(decrease) in management fees payable

Increase/(decrease) in incentive fee payable

Increase/(decrease) in payable to affiliate

Increase/(decrease) in accrued organizational and offering costs, net

Increase/(decrease) in incentive fee payable

Increase/(decrease) in accrued other general and administrative expenses

1 unchanged sentence

Cash Flows from Financing Activities:

Borrowings on Loan and Security Agreement, net

Borrowings on Subscription Credit Facility, net

Borrowings on Corporate Credit Facility, net

Borrowings on Revolving Funding Facility, net

(Payments)/Borrowings on Loan and Security Agreement, net

(Payments)/Borrowings on Subscription and Credit Agreement, net

Payments of debt issuance costs

8 unchanged sentences

Non-cash financing activities not included herein consisted of reinvestment of dividends

accompanying notes to consolidated financial statements.

See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of December 31, 2022

(amounts in 000’s)

of Net Assets

and Equity Investments

Credit Investments (4)

Acquisition Co., Inc.

lien senior secured revolving loan

11.10 % (S + 6.50 %)

lien senior secured loan

11.10 % (S + 6.50 %)

Distribution Holdings, LLC

lien senior secured delayed draw loan

11.73 % (S + 7.00 %)

lien senior secured loan

11.73 % (S + 7.00 %)

(US) Holdings, Inc.

lien senior secured delayed draw loan

10.42 % (S + 6.00 %)

lien senior secured loan

10.42 % (S + 6.00 %)

management & custody banks

Wealth Solutions, Inc.

lien senior secured delayed draw loan

10.84 % (S + 6.00 %)

lien senior secured loan

10.84 % (S + 6.00 %)

lien senior secured loan

11.73 % (L + 7.00 %)

Accessories, Inc.

lien senior secured revolving loan

12.00 % (P + 4.50 %)

lien senior secured loan

10.34 % (S + 5.50 %)

Biotechnology

Corporation (Alcami)

lien senior secured delayed draw loan

11.42 % (S + 7.00 %)

lien senior secured revolving loan

11.42 % (S + 7.00 %)

lien senior secured loan

11.42 % (S + 7.00 %)

Burke Holding Corp.

lien senior secured delayed draw loan

9.70 % (L + 5.50 %)

lien senior secured loan

10.23 % (L + 5.50 %)

lien senior secured revolving loan

10.23 % (L + 5.50 %)

Wholesale Fence

lien senior secured revolving loan

11.73 % (L + 7.00 %)

lien senior secured loan

11.73 % (L + 7.00 %)

Technologies Holdings, Inc.

lien senior secured loan

9.73 % (L + 5.00 %)

lien senior secured revolving loan

10.23 % (L + 5.50 %)

lien senior secured loan

10.23 % (L + 5.50 %)

Chemical Company, LLC

lien senior secured loan

10.33 % (L + 6.00 %)

lien senior secured revolving loan

10.38 % (L + 6.00 %)

lien senior secured loan

10.73 % (L + 6.00 %)

services & supplies

Environmental Monitoring (6)

lien senior secured loan

11.68 % (S + 7.00 %)

lien senior secured delayed draw loan

10.42 % (S + 6.00 %)

lien senior secured revolving loan

12.50 % (P + 5.00 %)

lien senior secured loan

10.42 % (S + 6.00 %)

Equipment Holdings LLC

lien senior secured delayed draw loan

10.88 % (S + 6.00 %)

lien senior secured revolving loan

10.45 % (S + 6.00 %)

lien senior secured delayed draw loan

9.33 % (S + 6.00 %)

lien senior secured loan

10.51 % (S + 6.00 %)

lien senior secured loan

10.88 % (S + 6.00 %)

Acquisition LLC

lien senior secured revolving loan

11.41 % (L + 7.00 %)

lien senior secured loan

11.56 % (L + 7.00 %)

(Bishop Lifting Products)

lien senior secured revolving loan

10.67 % (S + 6.25 %)

lien senior secured loan

10.21 % (S + 6.50 %)

lien senior secured loan

10.49 % (S + 6.25 %)

Enterprises, Inc.

lien senior secured delayed draw loan

11.44 % (S + 7.00 %)

lien senior secured revolving loan

11.43 % (S + 7.00 %)

lien senior secured loan

11.43 % (S + 7.00 %)

lien senior secured delayed draw loan

10.88 % (L + 6.50 %)

First lien senior secured loan

10.88 % (L + 6.50 %)

lien senior secured revolving loan

11.18 % (L + 6.50 %)

Security Partners LLC

lien senior secured delayed draw loan

12.66 % (S + 8.00 %)

lien senior secured loan

12.66 % (S + 8.00 %)

lien senior secured revolving loan

12.66 % (S + 8.00 %)

Kleinfelder Group, Inc.

lien senior secured loan

9.98 % (L + 5.25 %)

See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of December 31, 2022

(amounts in 000’s)

of Net Assets

Foam Companies, Inc.

First lien senior secured

11.48 % (S + 6.75 %)

First lien senior secured

10.89 % (S + 6.75 %)

LLC (FCA Packaging)

First lien senior secured

revolving loan

9.46 % (S + 6.50 %)

First lien senior secured

9.46 % (S + 6.50 %)

telecommunication services

Connex (f/k/a NTI Connect, LLC)

First lien senior secured

9.48 % (S + 4.75 %)

Corp., f/k/a Corbett Technology Solutions, Inc.

First lien senior secured

revolving loan

9.14 % (S + 5.00 %)

First lien senior secured

delayed draw loan

9.66 % (S + 5.00 %)

First lien senior secured

9.58 % (S + 5.00 %)

First lien senior secured

9.24 % (S + 5.00 %)

equipment, instruments & components

Insights, Inc.

First lien senior secured

10.49 % (S + 6.00 %)

(Cuisine Solutions) (5)

First lien senior secured

12.18 % (S + 8.00 %)

PJK Produce, LLC (Keany)

First lien senior secured

10.47 % (S + 6.25 %)

First lien senior secured

delayed draw loan

10.47 % (S + 6.25 %)

Pacific Holdings, LLC

First lien senior secured

delayed draw loan

10.73 % (S + 6.00 %)

First lien senior secured

revolving loan

10.42 % (S + 6.00 %)

First lien senior secured

10.73 % (S + 6.00 %)

Foods, LLC (FreshEdge) (6)

First lien senior secured

delayed draw loan

8.91 % (S + 5.25 %)

First lien senior secured

revolving loan

8.91 % (S + 5.25 %)

First lien senior secured

8.91 % (S + 5.25 %)

First lien senior secured

revolving loan

9.25 % (L + 5.50 %)

First lien senior secured

9.25 % (L + 5.50 %)

care providers & services

First lien senior secured

delayed draw loan

10.14 % (L + 5.75 %)

First lien senior secured

revolving loan

10.13 % (L + 5.75 %)

First lien senior secured

10.13 % (L + 5.75 %)

Dentistry Partners

First lien senior secured

delayed draw loan

10.94 % (S + 6.50 %)

First lien senior secured

10.94 % (S + 6.50 %)

Wave Dental Management LLC

First lien senior secured

delayed draw loan

11.32 % (S + 6.50 %)

First lien senior secured

revolving loan

11.32 % (S + 6.50 %)

First lien senior secured

11.32 % (S + 6.50 %)

OMH-HealthEdge

Holdings, LLC

First lien senior secured

10.03 % (L + 5.25 %)

Dental Partners Holdings, LLC

First lien senior secured

delayed draw loan

9.93 % (S + 6.00 %)

First lien senior secured

9.93 % (S + 6.00 %)

First lien senior secured

revolving loan

9.93 % (S + 6.00 %)

See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of December 31, 2022

(amounts in 000’s)

of Net Assets

equipment & supplies

Industries, LLC (LSL Healthcare)

First lien senior secured

delayed draw loan

10.90 % (S + 6.50 %)

First lien senior secured

revolving loan

10.90 % (S + 6.50 %)

First lien senior secured

10.90 % (S + 6.50 %)

First lien senior secured

delayed draw loan

10.23 % (L + 5.50 %)

First lien senior secured

revolving loan

10.23 % (L + 5.50 %)

First lien senior secured

10.23 % (L + 5.50 %)

Brands Group Holdings, Inc.

First lien senior secured

revolving loan

9.16 % (L + 4.75 %)

First lien senior secured

9.16 % (L + 4.75 %)

Claims Service, LLC

First lien senior secured

delayed draw loan

10.24 % (S + 6.00 %)

First lien senior secured

revolving loan

10.33 % (S + 6.00 %)

First lien senior secured

10.41 % (S + 6.00 %)

Information Services Inc.

First lien senior secured

10.63 % (S + 6.25 %)

Acquisition LLC

First lien senior secured

revolving loan

10.24 % (S + 6.00 %)

First lien senior secured

10.24 % (S + 6.00 %)

First lien senior secured

delayed draw loan

11.09 % (S + 6.25 %)

First lien senior secured

11.09 % (S + 6.25 %)

First lien senior secured

revolving loan

11.09 % (S + 6.25 %)

First lien senior secured

revolving loan

11.88 % (L + 7.50%), 4.50% is PIK

First lien senior secured

revolving loan

11.88 % (L + 7.50%), 4.50% is PIK

First lien senior secured

11.88 % (L + 7.50%), 4.50% is PIK

Machine Works, LLC

First lien senior secured

11.09 % (S + 6.25 %)

Holdings, Inc

First lien senior secured

10.12 % (S + 6.38 %)

Holdings III, Inc.

First lien senior secured

revolving loan

10.48 % (L + 5.75 %)

First lien senior secured

10.48 % (L + 5.75 %)

Beauty Holdings III, Inc.

First lien senior secured

9.73 % (L + 5.00 %)

Pharmaceuticals

Consumer Brands

First lien senior secured

revolving loan

10.15 % (L + 5.50 %)

First lien senior secured

10.15 % (L + 5.50 %)

See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of December 31, 2022

(amounts in 000’s)

of Net Assets

Over International, LLC

lien senior secured loan

10.73 % (L + 6.00 %)

Holdings Corp.

lien senior secured delayed draw loan

9.73 % (S + 5.50 %)

lien senior secured revolving loan

9.82 % (S + 5.50 %)

lien senior secured loan

9.72 % (S + 5.50 %)

Marine Medical Supply International, LLC (Unimed)

lien senior secured revolving loan

12.14 % (S + 7.50 %)

lien senior secured loan

12.10 % (S + 7.50 %)

Intermediate Co 2, LLC (Peak Technologies)

lien senior secured loan

10.44 % (S + 6.25 %)

Holdings Group, LLC (6)

lien senior secured loan

10.73 % (L + 6.00 %)

apparel & luxury goods

Soccer Company, Incorporated (SCORE)

lien senior secured revolving loan

11.91 % (S + 7.25 %)

lien senior secured loan

11.98 % (S + 7.25 %)

lien senior secured loan

10.43 % (S + 6.00 %)

Garments, LLC

lien senior secured loan

9.51 % (L + 5.50 %)

companies & distributors

Meteor Acquisition, LLC (Meteor)

lien senior secured loan

11.66 % (S + 7.00 %)

lien senior secured loan

10.73 % (L + 6.00 %)

Automated Manufacturing, LLC

lien senior secured delayed draw loan

11.34 % (S + 6.50 %)

lien senior secured loan

11.34 % (S + 6.50 %)

lien senior secured revolving loan

11.34 % (S + 6.50 %)

lien senior secured delayed draw loan

9.73 % (L + 5.00 %)

lien senior secured revolving loan

9.73 % (L + 5.00 %)

lien senior secured loan

9.73 % (L + 5.00 %)

Cable Group, LLC

lien senior secured loan

10.17 % (S + 5.75 %)

Images Acquisition, LLC

lien senior secured loan

10.98 % (S + 6.25 %)

lien senior secured loan

10.67 % (S + 6.25 %)

lien senior secured delayed draw loan

10.98 % (S + 6.25 %)

lien senior secured revolving loan

10.67 % (S + 6.25 %)

Refrigeration

lien senior secured loan

11.26 % (L + 6.50 %)

Safety & Survivability Corporation (USSC)

lien senior secured delayed draw loan

11.41 % (S + 6.75 %)

lien senior secured revolving loan

10.88 % (S + 6.25 %)

lien senior secured loan

11.48 % (S + 6.75 %)

telecommunication services

Communications, LLC

lien senior secured loan

9.93 % (S + 5.50 %)

lien senior secured delayed draw loan

10.06 % (S + 5.50 %)

lien senior secured delayed draw loan

9.93 % (S + 5.50 %)

lien senior secured revolving loan

10.06 % (S + 5.50 %)

lien senior secured loan

10.06 % (S + 5.50 %)

Private Credit Debt Investments

See accompanying notes to consolidated financial statements.

Anderson BDC, Inc.

Schedule of Investments

of December 31, 2022

of Net Assets

Equity Investments

Auto components

Vehicle Accessories, Inc.

- preferred (8)

Commercial services & supplies

American Equipment Holdings LLC (9)

BLP Buyer, Inc.

(Bishop Lifting Products) - Class A

Food products

BC CS 2, L.P.

(Cuisine Solutions) (5)

IF&P Foods, LLC (FreshEdge) – Class A common

IF&P Foods, LLC (FreshEdge)

– Class B common (9)

Gulf Pacific Holdings, LLC - Class A common (9)

Gulf Pacific Holdings, LLC - Class C common (9)

Siegel Parent, LLC (11)

Healthcare equipment & supplies

LSL Industries, LLC (LSL Healthcare) (9)

Domain Information Services Inc.

Textiles, apparel & luxury goods

American Soccer Company, Incorporated (SCORE) (11)

Total Private Equity Investments

Total Private Investments

of Net Assets

Short-Term Investments

American Treasury Obligations Fund - Institutional Class Z, 4.16% (12)

Short-Term Investments

in Excess of Other Assets

(1) As of December 31, 2022, all investments are non-controlled, non-affiliated investments.

Non-controlled, non-affiliated investments are defined as investments in which the Company owns less than 5% of the portfolio company’s outstanding voting securities and does not have the power to exercise control over the management or policies of such portfolio company.

(2) The amortized cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method.

(3) As of December 31, 2022, the tax cost of the Company’s investments approximates their amortized cost.

(4) Loan contains a variable rate structure, that may be subject to an interest rate floor.

Variable rate loans bear interest at a rate that may be determined by reference to either the London Interbank Offered Rate (“LIBOR” or “L”) (which can include one-, two-, three- or six-month LIBOR), the Secured Overnight Funding Rate (“SOFR” or “S”) (which can include one-, three- or six-month SOFR), or an alternate base rate (which can include the Federal Funds Effective Rate or the Prime Rate or “P”).

(5) Non-qualifying investment as defined by Section 55(a) of the Investment Company Act of 1940.

The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets.

As of December 31, 2022, 3.8% of the Company’s total assets were in non-qualifying investments.

(6) The Company may be entitled to receive additional interest as a result of an arrangement with other lenders in the syndication.

In exchange for the higher interest rate, the “last-out” portion is at a greater risk of loss.

Certain lenders represent a “first out” portion of the investment and have priority to the “last-out” portion with respect to payments of principal and interest.

(7) On December 5, 2022, the Company funded a $6,254 first lien senior secured loan in Light Wave Dental Management LLC.

The loan has an annual interest rate of 30% with a minimum of 1.3x MOIC (multiple on invested capital) if the loan is repaid prior to June 6, 2023 with further increases above 1.3x thereafter.

The interest and the prepayment premium are payable to the Company upon a triggering event or maturity in September 2023.

(8) The Company owns 0.19% of the common equity and 0.43% of the preferred equity of Vehicle Accessories, Inc.

(9) The Company owns 71% of a pass-through, taxable limited liability company, KSCF IV Equity Aggregator Blocker, LLC (the “Aggregator Blocker”), which holds the Company’s equity investments in American Equipment Holdings LLC, Gulf Pacific Holdings, LLC, IF&P Foods, LLC (FreshEdge) and LSL Industries, LLC (LSL Healthcare).

Through the Company’s ownership of the Aggregator Blocker, the Company owns the respective units of each company listed above in the Schedule of Investments.

(10) The Company owns 0.53% of the common equity BLP Buyer, Inc.

(Bishop Lifting Products).

(11) The Company owns 40% of a pass-through limited liability company, KSCF IV Equity Aggregator, LLC (the “Aggregator”), which holds the Company’s equity investments in Siegel Parent, LLC and American Soccer Company, Incorporated (SCORE).

The Aggregator’s ownership of Siegel Parent, LLC is 1.1442%.

Through the Company’s ownership of the Aggregator, the Company owns the respective units of each company listed above in the Schedule of Investments.

(12) The indicated rate is the yield as of December 31, 2022.

See accompanying notes to

consolidated financial statements.

Kayne Anderson BDC, Inc.

Schedule of Investments

As of December 31, 2021

(amounts in 000’s)

of Net Assets

2 unchanged sentences

First lien senior

8.00 % (L + 7.00 %)

First lien senior secured delayed

8.00 % (L + 7.00 %)

Accessories, Inc.

First lien senior secured loan

6.50 % (L + 5.50 %)

lien senior secured revolving loan

6.50 % (L + 5.50 %)

(US) Holdings, Inc.

First lien senior secured loan

7.00 % (L + 6.00 %)

First lien senior secured delayed

7.00 % (L + 6.00 %)

First lien senior secured loan

8.00 % (L + 7.00 %)

CGI Automated

1 unchanged sentence

First lien senior secured loan

6.50 % (L + 5.50 %)

First lien senior secured delayed

6.50 % (L + 5.50 %)

First lien senior secured revolving

6.50 % (L + 5.50 %)

Wholesale Fence

First lien senior secured revolving

8.00 % (L + 7.00 %)

First lien senior secured loan

8.00 % (L + 7.00 %)

First lien senior secured loan

8.00 % (L + 7.00 %)

First lien senior secured loan

6.50 % (L + 5.50 %)

First lien senior secured delayed

6.50 % (L + 5.50 %)

First lien senior secured revolving

6.50 % (L + 5.50 %)

Distribution Holdings, LLC

First lien senior secured delayed

8.00 % (L + 7.00 %)

First lien senior secured loan

8.00 % (L + 7.00 %)

Acquisition, LLC

First lien senior secured delayed

7.25 % (L + 6.25 %)

First lien senior secured revolving

7.25 % (L + 6.25 %)

First lien senior secured loan

7.25 % (L + 6.25 %)

Refrigeration

First lien senior secured loan

7.50 % (L + 6.50 %)

Safety & Survivability Corporation (USSC)

First lien senior secured loan

7.00 % (L + 6.00 %)

First lien senior secured revolving

7.00 % (L + 6.00 %)

First lien senior secured delayed

7.00 % (L + 6.00 %)

& professional services

1 unchanged sentence

First lien senior secured loan

7.50 % (L + 6.50 %)

Environmental Monitoring (5)

First lien senior secured loan

8.00 % (L + 7.00 %)

Equipment Holdings LLC

First lien senior secured delayed

7.00 % (L + 6.00 %)

First lien senior secured revolving

7.00 % (L + 6.00 %)

First lien senior secured loan

7.00 % (L + 6.00 %)

Acquisition LLC

First lien senior secured revolving

7.00 % (L + 6.00 %)

First lien senior secured loan

8.00 % (L + 7.00 %)

Enterprises, Inc.

First lien senior secured delayed

7.00 % (L + 6.00 %)

First lien senior secured revolving

7.00 % (L + 6.00 %)

First lien senior secured loan

7.00 % (L + 6.00 %)

PMFC Holding,

First lien senior secured delayed

7.50 % (L + 6.50 %)

First lien senior secured loan

7.50 % (L + 6.50 %)

First lien senior secured revolving

7.50 % (L + 6.50 %)

Security Partners LLC

First lien senior secured loan

8.00 % (L + 7.00 %)

First lien senior secured delayed

8.00 % (L + 7.00 %)

First lien senior secured revolving

8.00 % (L + 7.00 %)

Kleinfelder Group, Inc.

lien senior secured loan

6.25 % (L + 5.25 %)

durables & apparel

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First lien senior secured loan

6.75 % (L + 5.75 %)

First lien senior secured revolving

6.75 % (L + 5.75 %)

First lien senior secured delayed

6.75 % (L + 5.75 %)

First lien senior secured loan

9.50 % (L + 8.00 %)

First lien senior secured loan

1 unchanged sentence

First lien senior secured loan

6.50 % (L + 5.50 %)

First lien senior secured delayed

6.50 % (L + 5.50 %)

First lien senior secured revolving

6.50 % (L + 5.50 %)

First lien senior secured revolving

7.50 % (L + 6.50 %)

First lien senior secured delayed

7.50 % (L + 6.50 %)

First lien senior secured loan

7.50 % (L + 6.50 %)

Cap Company, Inc.

First lien senior secured loan

7.50 % (L + 6.50 %)

First lien senior secured loan

7.00 % (L + 6.00 %)

First lien senior secured revolving

7.00 % (L + 6.00 %)

First lien senior secured delayed

7.00 % (L + 6.00 %)

Garments, LLC

lien senior secured loan

7.00 % (L + 6.00 %)

Wealth Solutions, Inc.

lien senior secured loan

7.00 % (L + 6.00 %)

See accompanying notes to

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As of December 31, 2021

(amounts in 000’s)

of Net Assets

2 unchanged sentences

First lien senior secured loan

7.00 % (L + 6.00 %)

lien senior secured revolving loan

7.00 % (L + 6.00 %)

care equipment & services

First lien senior secured loan

6.75 % (L + 5.75 %)

First lien senior secured delayed

6.75 % (L + 5.75 %)

First lien senior secured revolving

6.75 % (L + 5.75 %)

Dermatologists

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First lien senior secured loan

9.50 % (L + 8.50 %)

Dentistry Partners

First lien senior secured loan

6.75 % (L + 5.75 %)

First lien senior secured delayed

6.75 % (L + 5.75 %)

OMH-HealthEdge

1 unchanged sentence

First lien senior secured loan

6.50 % (L + 5.25 %)

Partners Holdings, LLC

First lien senior secured loan

6.50 % (L + 5.50 %)

First lien senior secured delayed

6.50 % (L + 5.50 %)

First lien senior secured revolving

6.50 % (L + 5.50 %)

Dermatology Management Holdings, LLC

lien senior secured loan

7.00 % (L + 6.00 %)

& personal products

Scholl’s)

First lien senior secured loan

6.75 % (L + 5.75 %)

First lien senior secured revolving

6.75 % (L + 5.75 %)

Group Holdings, Inc.

First lien senior secured loan

6.00 % (L + 5.00 %)

First lien senior secured revolving

6.00 % (L + 5.00 %)

Beauty Holdings III, Inc.

lien senior secured loan

5.18 % (L + 5.00 %)

Technologies Holdings, Inc.

First lien senior secured loan

6.50 % (L + 5.50 %)

Companies, Inc.

First lien senior secured loan

7.00 % (L + 6.00 %)

First lien senior secured loan

6.50 % (L + 5.50 %)

First lien senior secured loan

6.50 % (L + 5.50 %)

First lien senior secured revolving

6.50 % (L + 5.50 %)

First lien senior secured revolving

7.00 % (L + 6.00 %)

lien senior secured loan

7.00 % (L + 6.00 %)

Pharmaceuticals,

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First lien senior secured loan

7.38 % (L + 6.38 %)

lien senior secured revolving loan

7.38 % (L + 6.38 %)

Holdings Group, LLC (5)

lien senior secured loan

7.00 % (L + 6.00 %)

Acquisition LLC

First lien senior secured loan

7.50 % (L + 6.50 %)

Peak Technologies

First lien senior secured loan

8.09 % (L + 7.09 %)

lien senior secured loan

7.50 % (L + 6.50 %)

Telecommunication

1 unchanged sentence

First lien senior secured loan

6.50 % (L + 5.50 %)

First lien senior secured delayed

6.50 % (L + 5.50 %)

First lien senior secured revolving

6.50 % (L + 5.50 %)

First lien senior secured loan

6.50 % (L + 5.50 %)

Technology Solutions, Inc.

First lien senior secured revolving

6.00 % (L + 5.00 %)

First lien senior secured delayed

6.00 % (L + 5.00 %)

First lien senior secured loan

6.00 % (L + 5.00 %)

Connex (f/k/a NTI Connect, LLC)

lien senior secured loan

6.00 % (L + 5.00 %)

Private Credit Debt Investments

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As of December 31, 2021

(amounts in 000’s)

of Net Assets

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Liabilities in Excess of Other Assets

(1) As of December 31, 2021, all

investments are non-controlled, non-affiliated investments.

Non-controlled, non-affiliated

investments are defined as investments in which the Company owns less than 5% of the portfolio

company’s outstanding voting securities and does not have the power to exercise control

over the management or policies of such portfolio company.

(2) The amortized cost represents

the original cost adjusted for the amortization of discounts and premiums, as applicable,

on debt investments using the effective interest method.

(3) As of December 31, 2021, the

tax cost of the Company’s investments approximates their amortized cost.

(4) Loan contains a variable rate

structure, that may be subject to an interest rate floor.

Variable rate loans bear interest

at a rate that may be determined by reference to either the London Interbank Offered Rate

(“LIBOR”

or “L”) (which can include one-, two-, three- or six-month

LIBOR) or an alternate base rate (which can include the Federal Funds Effective Rate or the

(5) The Company may be entitled

to receive additional interest as a result of an arrangement with other lenders in the syndication.

In exchange for the higher interest rate, the “last-out”

portion is at a greater

risk of loss.

Certain lenders represent a “first out”

portion of the investment

and have priority to the “last-out”

portion with respect to payments of principal

and interest.

Company owns 50% of a pass-through LLC, KSCF IV Equity Aggregator, LLC (the “Aggregator”),

which holds 500 Class A units of Siegel Parent, LLC.

The Aggregator’s

ownership of Siegel Parent, LLC is 1.1442%.

Through the Company’s ownership of the

Aggregator, the Company owns 250 Class A units of Siegel Parent, LLC.

(7) The indicated rate is the

yield as of December 31, 2021.

(1) As of December 31, 2021, all investments are non-controlled, non-affiliated investments.

(2) The amortized cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method.

(3) As of December 31, 2021, the tax cost of the Company’s investments approximates their amortized cost.

(4) Loan contains a variable rate structure, that may be subject to an interest rate floor.

Variable rate loans bear interest at a rate that may be determined by reference to either the London Interbank Offered Rate (“LIBOR” or “L”) (which can include one-, two-, three- or six-month LIBOR) or an alternate base rate (which can include the Federal Funds Effective Rate or the Prime Rate).

(5) The Company may be entitled to receive additional interest as a result of an arrangement with other lenders in the syndication.

In exchange for the higher interest rate, the “last-out” portion is at a greater risk of loss.

Certain lenders represent a “first out” portion of the investment and have priority to the “last-out” portion with respect to payments of principal and interest.

(6) The Company owns 50% of a pass-through LLC, KSCF IV Equity Aggregator, LLC (the “Aggregator”), which holds 500 Class A units of Siegel Parent, LLC.

The Aggregator’s ownership of Siegel Parent, LLC is 1.1442%.

Through the Company’s ownership of the Aggregator, the Company owns 250 Class A units of Siegel Parent, LLC.

(7) The indicated rate is the yield as of December 31, 2021.

See accompanying notes to

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Notes to Consolidated Financial

000’s, except share and per share amounts)

Kayne Anderson BDC, Inc.

(the “Company”)

is an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as

a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”).

In addition, for U.S.

federal income tax purposes, the Company intends to qualify as a regulated investment company (“RIC”)

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

The Company was formed as a Delaware limited

liability company in May 2018.

Prior to February 5, 2021, the Company was devoting substantially all of its efforts to establishing the

business and conducted organizational and marketing efforts.

The Company began incurring costs related to these activities in the third

quarter of 2020.

The Company was formed to make investments in middle-market companies and commenced operations on February 5, 2021.

On this same date, prior to the Company’s election to be regulated as a BDC under the 1940 Act, the Company 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.

federal income tax purposes, the Company intends to qualify as a regulated investment company (“RIC”)

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

The Company was formed as a Delaware corporation

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

As of December 31, 2022, the Company has entered

into subscription agreements with investors for an aggregate capital commitment of $607,950 to purchase shares of the Company’s

common stock (including a $64,250 capital commitment that is contingent on the Company meeting certain conditions).

See Note 12 –

Subsequent Events.

KA Credit Advisors, LLC (the “Advisor”)

is an indirect subsidiary of Kayne Anderson Capital Advisors, L.P.

(“KACALP”

or “Kayne Anderson”).

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

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

into subscription agreements with investors for an aggregate capital commitment of $ 808,212 to purchase shares of the Company’s

common stock.

See Note 12 – Subsequent Events.

KA Credit Advisors, LLC (the “Advisor”) 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, as

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.

Board consists of five directors, three of whom are independent (including the Board’s chairperson).

The Company’s investment objective

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.

See Note 12 – Subsequent Events.

The Company’s investment objective

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

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

“Securities Act”).

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

Commitment”) to purchase shares of its Common Stock (“Shares”) pursuant to a subscription agreement entered into with

“Securities Act”).

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

Commitment”) to purchase shares of its Common Stock (“Shares”) pursuant to a subscription agreement entered into with

Investors will be required to fund drawdowns to purchase Shares up to the amount of their respective Capital Commitments

each time the Company delivers a notice to the investors.

Following the initial closing of the private offering (the “Initial Closing”)

on February 5, 2021 and prior to any Liquidity Event (as defined below), the Advisor may, in its sole discretion, permit additional closings

of the private offering.

A “Liquidity Event”

is defined as (a) an initial public offering of Shares (the “Initial

Public Offering”) or the listing of 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 Shares (the “Initial

Public Offering”) or the listing of 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.

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial

000’s, except share and per share amounts)

Significant Accounting Policies

Basis of Presentation —the

accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States

of America (“GAAP”).

The Company is an investment company and follows accounting and reporting guidance of the Financial

Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 946 —

“Financial Services —

Companies.”

In the opinion of management, all adjustments, which are of a normal recurring nature, considered necessary for the

Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 946 — “Financial Services — Investment

Companies.” In the opinion of management, all adjustments, which are of a normal recurring nature, considered necessary for the

fair statement of the consolidated financial statements for the periods presented, have been included.

Consolidation —As provided

under Regulation S-X and ASC Topic 946 –

“Financial Services –

Investment Companies”, the Company will generally

Consolidation —As provided

under Regulation S-X and ASC Topic 946 – “Financial Services – Investment Companies”, the Company will generally

not consolidate its investment in a company other than a wholly-owned investment company or controlled operating company whose business

consists of providing services to the Company.

Accordingly, the Company consolidated the accounts of the Company’s wholly-owned

subsidiaries, Kayne Anderson BDC Financing, LLC, (“KABDCF”) and KABDC Corp, LLC, in its consolidated financial statements.

Accordingly, the Company consolidated the accounts of the Company’s wholly-owned

subsidiaries, Kayne Anderson BDC Financing, LLC, (“KABDCF”) and KABDC Corp, LLC, in its consolidated financial statements.

All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates —the

preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported

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Actual results could differ materially from those estimates.

Cash and Cash Equivalents —cash

and cash equivalents include short-term, liquid investments with an original maturity of three months or less and include money market

fund accounts.

Investment Valuation, Fair Value —the

Company conducts the valuation of its investments consistent with GAAP and the 1940 Act.

The Company’s investments will be valued

no less frequently than quarterly, in accordance with the terms of Topic 820 of the Financial Accounting Standards Board’s Accounting

Standards Codification, Fair Value Measurement and Disclosures (“ASC 820”).

The Company’s investments will be valued

no less frequently than quarterly, in accordance with the terms of Topic 820 of the Financial Accounting Standards Board’s Accounting

Standards Codification, Fair Value Measurement and Disclosures (“ASC 820”).

In December 2020, the SEC adopted Rule 2a-5 under the 1940 Act,

establishing requirements to determine fair value in good faith for purposes of the 1940 Act.

Pursuant to Rule 2a-5 and effective

September 1, 2022, the Board of Directors designated the Advisor as the “valuation designee” to perform fair value determinations

of the Company’s portfolio holdings, subject to oversight by and periodic reporting to the Board.

The valuation designee will perform

fair valuation of the Company’s portfolio holdings in accordance with the Company’s Valuation Program, as approved by the

The Advisor’s internal valuation process did not materially change as a result of Rule 2a-5.

Traded Investments (Level 1 or Level 2)

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When price quotes for investments are not available, or such prices are stale

or do not represent fair value in the judgment of the Company’s Advisor, fair market value will be determined using the Company’s

valuation process for investments that are privately issued or otherwise restricted as to resale.

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exchange other than the NASDAQ Stock Market, Inc.

(“NASDAQ”) are valued, except as indicated below, at the last sale price

on the business day as of which such value is being determined.

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Notes to Consolidated Financial

000’s, except share and per share amounts)

Non-Traded Investments (Level 3)

Investments that are privately issued or

otherwise restricted as to resale, as well as any security for which (a) reliable market quotations are not available in the judgment

of the Company’s Advisor, or (b) the independent pricing service or independent broker does not provide prices or provides

a price that in the judgment of the Company’s Advisor is stale or does not represent fair value, shall each be valued in a manner

that most fairly reflects fair value of the security on the valuation date.

The Company expects that a significant majority of its investments

will be Level 3 investments.

Unless otherwise determined by the Board, the following valuation process is used for the Company’s

Level 3 investments:

Investment Team Valuation .

The applicable investments are valued by senior professionals of Kayne Anderson who are responsible for the portfolio investments.

The value of each portfolio company or investment will be initially reviewed by the investment professionals responsible for such

portfolio company or investment and, for non-traded investments (i.e., illiquid securities/instruments), a standardized

template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable

inputs will be used to determine a preliminary value.

The investments will be valued no less frequently than quarterly, with new

investments valued at the time such investment was made.

Investment Team Valuation Documentation .

valuation conclusions will be determined by the Company’s executive officers.

Such valuation and supporting documentation is

submitted to the Audit Committee (a committee of the Board) and the Board on a quarterly basis.

Audit Committee .

The Audit Committee meets to

consider the valuations submitted by our executive officers at the end of each quarter.

Between meetings of the Audit Committee,

the executive officers of the Company are authorized to make valuation determinations.

All valuation determinations of the Audit

Committee are subject to ratification by the Board at its next regular meeting.

Investments that are privately issued or otherwise restricted as to

resale, as well as any security for which (a) reliable market quotations are not available in the judgment of the Company’s

Advisor, or (b) the independent pricing service or independent broker does not provide prices or provides a price that in the judgment

of the Company’s Advisor is stale or does not represent fair value, shall each be valued in a manner that most fairly reflects fair

value of the security on the valuation date.

The Company expects that a significant majority of its investments will be Level 3 investments.

Unless otherwise determined by the Advisor, the following valuation process is used for the Company’s Level 3 investments:

Valuation Designee .

The applicable investments will be valued no less frequently than quarterly by the Advisor, with new investments valued at the time such investment was made.

The value of each Level 3 investment will be initially reviewed by the persons responsible for such portfolio company or investment.

The Advisor will use a standardized template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs to determine a preliminary value.

The Advisor will specify the titles of the persons responsible for determining the fair value of Company investments, including by specifying the particular functions for which they are responsible, and will reasonably segregate fair value determinations from the portfolio management of the Company such that the portfolio manager(s) may not determine, or effectively determine by exerting substantial influence on, the fair values ascribed to portfolio investments.

● Valuation Firm.

Quarterly, third-party valuation

firms engaged by the Board review the valuation methodologies and calculations employed for each of the Company’s investments

that the Company has placed on the “watch list”

and approximately 25% of its remaining investments.

These third-party

valuation firms will review all of the Level 3 investments at least once per year, on a rolling twelve-month basis.

expects the quarterly report issued by these third-party valuation firms will assist the Board in determining the fair values of

the investments reviewed.

Board Determination.

The Company’s Board

meets quarterly to consider the valuations provided by the Company’s executive officers and the Audit Committee and ratify

valuations for the applicable investments.

The Company’s Board considers the report provided by the third-party valuation firms

in reviewing and determining in good faith the fair value of the applicable portfolio investments.

The Board of Directors will be ultimately

responsible for the determination, in good faith, of the fair value of our portfolio investments.

Determination of fair value involves

subjective judgments and estimates.

Accordingly, the notes to our financial statements will express the uncertainty with respect to the

possible effect of such valuations, and any change in such valuations, on our financial statements.

Interest Income Recognition —

Quarterly, third-party valuation firms engaged by the Advisor review the valuation methodologies and calculations employed for each of the Company’s investments that the Advisor has placed on the “watch list” and approximately 25 % of the Company’s remaining investments.

The third-party valuation firms will review and independently value all of the Level 3 investments at least once per year, on a rolling twelve-month basis.

The quarterly report issued by these third-party valuation firms will provide positive assurance on the fair values of the investments reviewed.

The Board has appointed the Advisor as the valuation designee for the Company for purposes of making determinations of fair value

as permitted by Rule 2a-5 under the 1940 Act.

The Audit Committee shall aid the Board in overseeing the Advisor’s fair valuation

of securities that are not publicly traded or for which current market values are not readily available.

The Audit Committee shall

meet quarterly to review the fair value determinations, processes and written reports of the Advisor and third-party valuation firms

as part of the Board’s oversight responsibilities.

Determination of fair value involves subjective

judgments and estimates.

Accordingly, the notes to the Company’s financial statements will express the uncertainty with respect

to the possible effect of such valuations, and any change in such valuations, on our financial statements.

Interest Income Recognition —

Interest income is recorded on an accrual basis and includes the accretion of discounts, amortization of premiums and payment-in-kind

(“PIK”) interest.

Discounts from and premiums to par value on investments purchased are accreted/amortized into interest

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PIK interest income added to the principal balance is generally collected upon repayment of the outstanding

To maintain the Company’s status as a RIC, this non-cash source of income must be paid out to stockholders in the form

of dividends for the year the income was earned, even though the Company has not yet collected the cash.

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Notes to Consolidated Financial

000’s, except share and per share amounts)

Loans are generally placed on non-accrual

3 unchanged sentences

Interest payments

received on non-accrual loans may be recognized as income or applied to principal depending upon the Company’s judgment regarding

collectability.

Non-accrual loans are restored to accrual status when past due principal and interest are paid or there is no longer

any reasonable doubt that such principal or interest will be collected in full and, in the Company’s judgment, are likely to remain

The Company may make exceptions to this policy if the loan has sufficient collateral value (i.e., typically measured as enterprise

value of the portfolio company) or is in the process of collection.

Debt Issuance Costs —Costs

incurred by the Company related to the issuance of its debt (credit facilities) are capitalized and amortized over the period the debt

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the credit facilities on the Statement of Assets and Liabilities.

For the purpose of calculating the Company’s asset coverage ratios

pursuant to the 1940 Act, deferred issuance costs are not deducted from the carrying value of debt or preferred stock.

Dividends to Common Stockholders —Distributions

to common stockholders are recorded on the record date.

The amount to be paid out as a dividend is determined by the Company’s

board of directors each quarter and is generally based upon the earnings estimated by management and considers the level of undistributed

2 unchanged sentences

distributed, although the Company may decide to retain such capital gains for investment.

Organizational Costs —organizational

expenses include costs and expenses relating to the formation and organization of the Company.

1 unchanged sentence

Advisor for these costs which are expensed as incurred.

Offering Costs —offering

costs include costs and expenses incurred in connection with the offering of the Company’s common stock.

Offering Costs —offering

costs include costs and expenses incurred in connection with the offering of the Company’s common stock.

These initial costs are

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These expenses consist primarily

of legal fees and other costs incurred in connection with the Company’s share offerings, the preparation of the Company’s

registration statement and registration fees.

The Company has agreed to reimburse the Advisor for these costs.

Income Taxes —it is the

Company’s intention to continue to be treated as and to qualify each year for special tax treatment afforded a RIC under the Code.

Income Taxes —it is the

Company’s intention to continue to be treated as and to qualify each year for special tax treatment afforded a RIC under the Code.

As long as the Company meets certain requirements that govern its sources of income, diversification of assets and timely distribution

1 unchanged sentence

federal income tax.

The Company must pay distributions equal

to 90% of its investment company taxable income (ordinary income and short-term capital gains) to qualify as a RIC and it must distribute

all of its taxable income (ordinary income, short-term capital gains and long-term capital gains) to avoid federal income taxes.

Company will be subject to federal income tax on any undistributed portion of income.

For purposes of the distribution test, the Company

may elect to treat as paid on the last day of its taxable year all or part of any distributions that are declared after the end of its

taxable year if such distributions are declared before the due date of its tax return, including any extensions (October 15th).

The Company must pay distributions equal to 90 % of its investment company

taxable income (ordinary income and short-term capital gains) to qualify as a RIC and it must distribute all of its taxable income (ordinary

income, short-term capital gains and long-term capital gains) to avoid federal income taxes.

The Company will be subject to federal income

tax on any undistributed portion of income.

For purposes of the distribution test, the Company may elect to treat as paid on the last

day of its taxable year all or part of any distributions that are declared after the end of its taxable year if such distributions are

declared before the due date of its tax return, including any extensions.

All RICs are subject to a non-deductible 4%

excise tax on income that is not distributed on a timely basis in accordance with the calendar year distribution requirements.

avoid the tax, the Company must distribute during each calendar year an amount at least equal to the sum of (i) 98% of its ordinary income

for the calendar year, (ii) 98.2% of its net capital gains for the one-year period ending on December 31, the last day of our taxable

the tax, the Company must distribute during each calendar year an amount at least equal to the sum of (i) 98% of its ordinary income for

the calendar year, (ii) 98.2% of its net capital gains for the one-year period ending on December 31, the last day of our taxable

year, and (iii) undistributed amounts from previous years on which the Company paid no U.S.

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treated as paid during the calendar year if it is paid during the calendar year or declared by the Company in October, November or December

payable to stockholders of record on a date during such months and paid by the Company during January of the following year.

distributions paid during January of the following year will be deemed to be received by stockholders on December 31 of the year the

distributions are declared, rather than when the distributions are actually received.

of such year, payable to stockholders of record on a date during such months and paid by the Company no later than January of the following

Any such distributions paid during January of the following year will be deemed to be received by stockholders on December 31 of

the year the distributions are declared, rather than when the distributions are actually received.

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial

000’s, except share and per share amounts)

The Company does not currently qualify as

a “publicly offered regulated investment company,”

as defined in the Code.

A “publicly offered regulated investment

company”

is a RIC whose shares are either (i) continuously offered pursuant to a public offering, (ii) regularly traded

on an established securities market, or (iii) held by at least 500 persons at all times during the taxable year.

The Company cannot

determine when it will qualify as a publicly offered RIC.

If the Company does not qualify as a publicly offered RIC during the tax year, a non-corporate shareholder’s allocable

portion of the Company’s affected expenses, including its management fees, may be treated as an additional distribution to shareholders.

A non-corporate shareholder’s allocable portion of these expenses may be treated as miscellaneous itemized deductions

that are not currently deductible by such shareholders.

000’s, except share and per share amounts)

The Company evaluates tax positions taken

or expected to be taken in the course of preparing its financial statements to determine whether the tax positions are “more-likely-than-not”

or expected to be taken in the course of preparing its financial statements to determine whether the tax positions are “more-likely-than-not” to be

sustained by the applicable tax authority.

Tax positions not deemed to meet the “more-likely-than-not”

threshold are

Tax positions not deemed to meet the “more-likely-than-not” threshold are

reserved and recorded as a tax benefit or expense in the current year.

3 unchanged sentences

including, but not limited to, on-going analyses of tax laws, regulations and interpretations thereof.

LIBOR Transition —

Financial Conduct Authority (“FCA”) has announced that certain London Interbank Offered Rate (“LIBOR”) tenors

in certain currencies will cease to be provided at the end of 2021 with all remaining tenors ceasing in June 2023.

Alternatives to LIBOR

have been established, or are in development, in most major currencies including the Secured Overnight Financing Rate (“SOFR”)

LIBOR Transition — The

Financial Conduct Authority (“FCA”) announced that certain London Interbank Offered Rate (“LIBOR”) tenors

in certain currencies ceased to be provided at the end of 2021 with all remaining tenors ceasing in June 2023.

Alternatives to LIBOR have

been established, or are in development in most major currencies, including the Secured Overnight Financing Rate (“SOFR”)

that is intended to replace U.S.

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Markets are developing in response to these new reference rates.

Uncertainty exists related

to the liquidity impact of the change in rates, and how to appropriately adjust these rates at the time of transition.

Although SOFR appears

to be the preferred replacement rate for LIBOR, at this time, it is not possible to predict the full effect of any such changes or any

establishment of alternative reference rates.

Commitments and Contingencies —in

The LIBOR transition has

become increasingly well-defined in advance of its anticipated discontinuation, but uncertainty remains related to the liquidity impact

of the change in rates, and how to appropriately adjust these rates at the time of transition.

At this time, it is not possible to predict

fully the ultimate outcome of these changes.

Commitments and Contingencies —in

the normal course of business, the Company may enter into contracts that provide a variety of general indemnifications.

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Agreements and Related Party Transactions

Administration Agreement —on

February 5, 2021, the Company entered into an Administration Agreement with its Advisor, which serves as its Administrator and will provide

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The Administration

Agreement may be terminated by either party with 60 days’

written notice.

Investment Advisory Agreement —on

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

Investment Advisory Agreement —on

February 5, 2021, the Company entered into an Investment Advisory Agreement with its Advisor.

Pursuant to the Investment Advisory Agreement

with its Advisor, the Company will pay its Advisor a fee for investment advisory and management services consisting of two components—a

base management fee and an incentive fee.

The Advisor may, from time-to-time, grant waivers on the Company’s 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.

be terminated by either party with 60 days’ written notice.

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial

000’s, except share and per share amounts)

The Company has agreed to reimburse the Advisor

and its affiliates for the third-party costs incurred on its behalf in connection with the formation and the offering of shares of the

Company’s common stock.

Amounts shown as payables to affiliates on the Statement of Assets and Liabilities represent organizational

expenses and offering costs of the Company that were paid by the Advisor and its affiliates on behalf of the Company.

000’s, except share and per share amounts)

Base Management Fee

Prior to an Exchange Listing, the base management

fee will be calculated at an annual rate of 0.90% of the fair market value of the Company’s investments including, in each case,

fee will be calculated at an annual rate of 0.90 % of the fair market value of the Company’s investments including, in each case,

assets purchased with borrowed funds or other forms of leverage, but excluding cash, U.S.

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After an Exchange Listing, the base management fee will be calculated at an annual

rate of 1.50% of the fair market value of the Company’s investments.

rate of 1.50 % of the fair market value of the Company’s investments.

However, following an Exchange Listing, if borrowed funds

or other forms of leverage utilized to finance the Company’s investments is greater than a debt-to-equity ratio of 1.0x, the base

management fee will be 1.00% of the fair market value of the portion of the Company’s investments financed with borrowed funds

or other forms of leverage utilized to finance the Company’s investments is greater than a debt-to-equity ratio of 1.0x, the base

management fee will be 1.00 % of the fair market value of the portion of the Company’s investments financed with borrowed funds

or other forms of leverage above a 1.0x debt-to-equity ratio.

The base management fee will be payable quarterly

in arrears and calculated based on the average of the Company’s fair market value of investments, at the end of the two most recently

completed calendar quarters, including, in each case, assets purchased with borrowed funds or other forms of leverage, but excluding

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partial quarter will be appropriately pro-rated.

For the year ended December 31, 2021, the

Company incurred base management fees of $2,095.

For the years ended December 31, 2022 and

2021, the Company incurred base management fees of $ 7,147 and $2,095, respectively

Incentive Fee

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incentive fee.

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

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

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Incentive Fee on Income

The incentive fee based on income (the “income

incentive fee”) is determined and paid quarterly in arrears in cash.

The Company’s quarterly pre-incentive fee net investment

income must exceed a preferred return of 1.50% of the Company’s NAV at the end of the immediately preceding calendar quarter (6.0%

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

incentive fee is calculated as follows:

The incentive fee based on income (the “income

incentive fee”) is determined and paid quarterly in arrears in cash (subject to the limitations described in “Payment of Incentive

Fees” below).

The Company’s quarterly pre-incentive fee net investment income must exceed a preferred return of 1.50 % of the

Company’s NAV at the end of the immediately preceding calendar quarter ( 6.0 % annualized but not compounded) (the “Hurdle Amount”)

in order for the Company to receive an income incentive fee.

The income incentive fee is calculated as follows:

● Prior to an Exchange Listing :

100% of our pre-incentive fee net investment income for the immediately preceding calendar quarter in excess of 1.50% of

the Company’s NAV at the end of the immediately preceding calendar quarter until the Advisor has received 10% of the total

pre-incentive fee net income for that calendar quarter and, for pre-incentive fee net investment income in excess of 1.6667%,

10% of all remaining pre-incentive fee net investment income for that quarter.

100% of our pre-incentive fee net investment income for the immediately preceding calendar quarter in excess of 1.50% of the Company’s NAV at the end of the immediately preceding calendar quarter until the Advisor has received 10% of the total pre-incentive fee net income for that calendar quarter and, for pre-incentive fee net investment income in excess of 1.6667%, 10% of all remaining pre-incentive fee net investment income for that quarter.

After an Exchange Listing :

100% of the Company’s pre-incentive fee net investment income for the immediately preceding calendar quarter in excess

of 1.50% of the Company’s NAV at the end of the immediately preceding calendar quarter until the Advisor has received 15% of

100% of the Company’s pre-incentive fee net investment income for the immediately preceding calendar quarter in excess

of 1.50% of the Company’s NAV at the end of the immediately preceding calendar quarter until the Advisor has received 15% of

the total pre-incentive fee net income for that calendar quarter and, for pre-incentive fee net investment income

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Notes to Consolidated Financial Statements

000’s, except share and per share amounts)

Incentive Fee on Capital Gains

The incentive fee on capital gains (the “capital gains incentive

fee”) will be calculated and payable in arrears in cash as follows:

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 :

10% of the Company’s realized capital gains, if any, on a cumulative basis from formation through (a) the day before

an Exchange Listing, (b) upon consummation of a Liquidity Event or (c) upon the termination of the Investment Advisory

Agreement, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis.

For the purpose of computing the capital gain incentive fee, the calculation

methodology will look through derivative financial instruments or swaps as if the Company owned the reference assets directly.

10 % of the Company’s realized capital gains, if any, on a cumulative basis from formation through (a) the day before an Exchange Listing, (b) upon consummation of a Liquidity Event or (c) upon the termination of the Investment Advisory Agreement, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis.

For the purpose of computing the capital gain incentive fee, the calculation methodology will look through derivative financial instruments or swaps as if the Company owned the reference assets directly.

● After an Exchange Listing :

15% of the Company’s realized capital gains, if any, on a cumulative basis from formation through the end of a given calendar

year or upon termination of the Investment Advisory Agreement, computed net of all realized capital losses and unrealized capital

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

15 % of the Company’s realized capital gains, if any, on a cumulative basis from formation through the end of a given calendar year or upon termination of the Investment Advisory Agreement, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees.

Payment of Incentive Fees

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does not complete an Exchange Listing, the incentive fees will be payable to the Advisor (a) upon consummation of a sale of the

Company or (b) once substantially all the proceeds from a Company Liquidation payable to the Company’s stockholders have been

distributed to such stockholders.

For the year ended December 31, 2022, the Company incurred incentive

fees on income of $ 4,698 and no incentive fees on capital gains.

For the year ended December 31, 2021, the Company incurred incentive

fees on income of $ 31 and on realized gains $ 34 (total of $ 65 ).

KACALP, an affiliate of the Advisor, made

Other— KACALP, an affiliate of the Advisor, made

an equity contribution of $ 10 to the Company on December 18, 2018.

On February 5, 2021, the Company purchased its initial portfolio

of investments for $103,031 from an affiliate of the Company’s Advisor (the “Warehousing Entity”).

This purchase of

its initial portfolio of investments was funded with a portion of the proceeds from the sale of the Company’s common stock on this

same date (5,666,667 shares of our common stock to investors at a price of $15.00 per share for an aggregate offering amount of $85,000)

to investors and with borrowings under the Company’s credit facility.

The initial portfolio purchased from the Warehouse Entity consisted

of 18 loans, with an average outstanding balance of $5,876, an average purchase price of 97.4% of principal value and an average yield

on that date of 8.8%.

None of these loans in the initial portfolio were in default or non-accrual status.

All of the loans

are senior secured and the borrowers are middle and upper middle market companies.

The purchase of the initial portfolio was completed

before the Company elected to be treated as a business development company under the 1940 Act.

This initial acquisition and all related

transactions are referred to as the “Formation Transactions.”

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial

000’s, except share and per share amounts)

The following table presents the composition of the Company’s

investment portfolio at amortized cost and fair value as of December 31, 2021:

The following table presents the composition of the Company’s

investment portfolio at amortized cost and fair value as of December 31, 2022 and 2021:

December 31, 2022

December 31, 2021

First-lien senior secured debt investments

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Total Investments

As of December 31, 2021, all of the Company’s investments were

qualifying assets as defined by Section 55(a) of the 1940 Act.

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial

000’s, except share and per share amounts)

As of December 31, 2022, $ 45,901 of the Company’s total assets

were non-qualifying assets as defined by Section 55(a) of the 1940 Act.

As of December 31, 2021, all of the Company’s investments

were qualifying assets as defined by Section 55(a) of the 1940 Act.

Beginning with the three months ended March 31, 2022, the Company uses

Global Industry Classification Standards (GICS), Level 3 – Industry, for classifying the industry groupings of its portfolio companies.

As of December 31, 2021, the Company used GICS, Level 2 – Industry Group.

The industry composition of long-term investments based on fair value

as of December 31, 2021 was as follows:

as of December 31, 2022 and 2021 was as follows:

Trading companies & distributors

Commercial services & supplies

Food products

Health care providers & services

Professional services

Containers & packaging

Aerospace & defense

Textiles, apparel & luxury goods

Building products

Diversified telecommunication services

Wireless telecommunication services

Leisure products

Auto components

Household durables

equipment & supplies

Personal products

Household products

Biotechnology

Specialty retail

Pharmaceuticals

Asset management & custody banks

Electronic equipment, instruments & components

Commercial & professional services

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Notes to Consolidated Financial

000’s, except share and per share amounts)

The Fair Value Measurement Topic of the FASB Accounting Standards

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used to measure fair value into the following three broad categories.

Level 1 —

Valuations based

Level 1 — Valuations based

on quoted unadjusted prices for identical instruments in active markets traded on a national exchange to which the Company has access

at the date of measurement.

Level 2 —

Valuations based

Level 2 — Valuations based

on quoted prices for similar instruments in active markets;

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exists or instances where prices vary substantially over time or among brokered market makers.

Level 3 —

Model derived

Level 3 — Model derived

valuations in which one or more significant inputs or significant value drivers are unobservable.

Unobservable inputs are those inputs

that reflect the Company’s own assumptions that market participants would use to price the asset or liability based on the best

available information.

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The following table presents the fair value hierarchy of investments

as of December 31, 2021.

Note that the valuation levels below are not necessarily an indication of the risk or liquidity associated with

the underlying investment.

as of December 31, 2022 and 2021.

Note that the valuation levels below are not necessarily an indication of the risk or liquidity associated

with the underlying investment.

Fair Value Hierarchy as of December 31, 2022

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Total Investments

For the year ended December 31, 2021, the Company did not recognize

any transfers to or from Level 3.

The following table presents changes in the fair value of investments

for which Level 3 inputs were used to determine the fair value as of and for year ended December 31, 2021:

Fair Value Hierarchy as of December 31, 2021

First-lien senior secured debt investments

Equity investments

Short-term investments

Total Investments

For the years ended December 31, 2022 and 2021, the Company did not

recognize any transfers to or from Level 3.

The following tables present changes in the fair value of investments

for which Level 3 inputs were used to determine the fair value as of and for years ended December 31, 2022 and 2021:

senior secured

For the year ended December 31, 2022

debt investments

Fair value, beginning of period

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Net change in unrealized gain (loss)

Realized gains

Net realized gain (loss)

Net accretion of discount on investments

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Notes to Consolidated Financial

000’s, except share and per share amounts)

senior secured

For the year ended December 31, 2021

debt investments

Fair value, beginning of period

Purchases of investments

Proceeds from sales of investments and principal repayments

Net change in unrealized gain (loss)

Net realized gain (loss)

Net accretion of discount on investments

Transfers into (out of) Level 3

Fair value, end of period

The increase in unrealized gain (loss) relates to investments that

were held during the period.

The Company includes these unrealized gains and losses on the Statement of Operations –

The Company includes these unrealized gains and losses on the Statement of Operations – Net Change

in Unrealized Gains (Losses).

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a market yield analysis or an enterprise value analysis.

For debt investments that are not determined to be credit impaired, the Company

For debt investments that are not considered to be credit impaired, the Company

uses a market yield analysis to determine fair value.

If the debt investment is credit impaired (which is determined by performing an

enterprise value analysis), the Company will use the enterprise value analysis or a liquidation basis analysis to determine fair value.

As of December 31, 2021, none of the Company’s non-traded debt investments were determined to be credit impaired, and the Company

used a market yield analysis to determine fair value on these investments.

To determine the estimated market yield for our debt investments,

the Company analyzes changes in the risk/reward (measured by yields and leverage) of middle market indices as compared to changes in

risk/reward for the underlying investment (the “Market Approach”) and estimates the appropriate credit spread for such debt

In this context, the fair market value of the investment is impacted by the structure and pricing of the security relative

to current market yields and credit spreads for similar investments in similar businesses as well as the financial performance of such

If the debt investment is considered to be credit impaired (which is determined

by performing an enterprise value analysis), the Company will use the enterprise value analysis or a liquidation basis analysis to determine

To determine fair value using a market yield analysis, the Company

discounts the contractual cash flows of each investment at an appropriate discount rate (the market yield).

To determine the estimated

market yield for its debt investments, the Company analyzes changes in the risk/reward (measured by yields and leverage) of middle market

indices as compared to changes in risk/reward for the underlying investment and estimates the appropriate discount rate for such debt

In this context, the discount rate and fair market value of the investment is impacted by the structure and pricing of the

security relative to current market yields for similar investments in similar businesses as well as the financial performance of such

In performing this analysis, the Company considers data sources including, but not limited to:

(i) industry publications,

such as S&P Global’s High-End Middle Market Lending Review;

Thomson Reuter’s Refinitiv Middle Market Monthly

such as S&P Global’s High-End Middle Market Lending Review;

Thomson Reuter’s Refinitiv Middle Market Monthly

Pitchbook News;

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(ii) comparable investments reviewed or completed by affiliates

of the Advisor, and (iii) information obtained and provided by the Advisor’s independent valuation managers.

To determine if a debt investment is credit impaired, the Company

estimates the enterprise value of the business and compares such estimate to the outstanding indebtedness of such business.

utilizes the following valuation methodologies to determine the estimated enterprise value of the company:

(i) analysis of valuations

of publicly traded companies in a similar line of business (“public company analysis”), (ii) analysis of valuations of M&A

transaction valuations for companies in a similar line of business (“precedent transaction analysis”), (iii) discounted

cash flows (“DCF analysis”) and (iv) other valuation methodologies.

of the Advisor, and (iii) information obtained and provided by the Advisor’s independent valuation managers.

To determine if a debt investment is credit impaired, the Company estimates

the enterprise value of the business and compares such estimate to the outstanding indebtedness of such business.

The Company utilizes

the following valuation methodologies to determine the estimated enterprise value of the company:

(i) analysis of valuations of publicly

traded companies in a similar line of business (“public company comparable analysis”), (ii) analysis of valuations of M&A

transaction valuations for companies in a similar line of business (“precedent transaction analysis”), (iii) discounted

cash flows (“DCF analysis”) and (iv) other valuation methodologies.

In determining the non-traded debt investment valuations,

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the nature and realizable value of any collateral;

the company’s ability

to make interest payments, amortization payments (if any) and other fixed charges;

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of the debt security;

the company’s historical and projected financial results;

the markets in which the company does business;

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and other relevant factors.

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial

000’s, except share and per share amounts)

Equity investments in private

companies are typically valued using one of or a combination of the following valuation techniques:

(i) public company analysis,

(ii) precedent transaction analysis and (iii) DCF analysis.

Under all of these valuation techniques, the Company estimates operating

results of the companies in which we invest, including earnings before interest expense, income tax expense, depreciation and amortization

(“EBITDA”) and free cash flow.

(i) public company comparable

analysis, (ii) precedent transaction analysis and (iii) DCF analysis.

Under all of these valuation techniques, the Advisor estimates operating

results of the companies in which it invests, including earnings before interest expense, income tax expense, depreciation and amortization

(“EBITDA”) and free cash flow.

These estimates utilize unobservable inputs such as historical operating results, which may

be unaudited, and projected operating results, which will be based on operating assumptions for such company.

Investment performance

data utilized will be the most recently available as of the measurement date which in many cases may reflect up to a one quarter lag

in information.

These estimates will be sensitive to changes in assumptions specific to such company as well as general assumptions for

the industry.

Investment performance data

utilized will be the most recently available as of the measurement date which in many cases may reflect up to a one quarter lag in information.

These estimates will be sensitive to changes in assumptions specific to such company as well as general assumptions for the industry.

Other unobservable inputs utilized in the valuation techniques outlined above include:

discounts for lack of marketability,

selection of publicly traded companies, selection of similar precedent transactions, selected ranges for valuation multiples and expected

required rates of return (discount rates).

discounts for lack of marketability, selection

of publicly traded companies, selection of similar precedent transactions, selected ranges for valuation multiples and expected required

rates of return (discount rates).

Quantitative Table for Valuation Techniques

The following tables present quantitative information about the significant

unobservable inputs of the Company’s Level 3 investments as of December 31, 2022 and 2021.

The tables are not intended to be all-inclusive

but instead capture the significant unobservable inputs relevant to the Advisor’s determination of fair value.

As of December 31, 2022

First-lien senior secured debt investments

Yield Analysis

Discounted cash flow analysis

Discount rate

8.4 % - 15.0 %

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Precedent Transaction Analysis

Original Cost

Comparable Multiples

As of December 31, 2021

First-lien senior secured debt investments

Market Approach - Yield Analysis

Credit Spreads

5.00 % - 8.50 %

Equity investments

Precedent Transaction Analysis

Transaction Price

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Notes to Consolidated Financial

000’s, except share and per share amounts)

Loan and Security Agreement

On February 5, 2021, Kayne Anderson BDC Financing, LLC (“KABDCF”),

a newly-formed, wholly-owned, special purposes financing subsidiary, entered into a Loan and Security Agreement (the “LSA”)

with certain lenders party thereto, administrative agent, and the Advisor as collateral manager.

The maximum commitment of the LSA is

up to $200,000.

The Company did not pay an upfront fee for entering into the LSA.

Advances under the facility bear an interest rate of

LIBOR plus 4.25% (subject to a 1.00% LIBOR floor).

The facility has a term of three years maturing on February 5, 2023.

See Note 12 –

Subsequent Events.

For the year ended December 31, 2021, the average amount of borrowings

outstanding under the LSA was $66,755 with a weighted average interest rate of 5.25%.

As of December 31, 2021, the Company had $162,000

outstanding under the LSA at a weighted average interest rate of 5.25%.

000’s, except share and per share amounts)

Subscription Credit Agreement

As of December 31, 2022, the Company had a $ 125,000 credit agreement

(the “Subscription Credit Agreement”) with certain lenders party thereto.

The Subscription Credit Agreement permits the Company

to borrow up to $150,000, subject to availability under the borrowing base which is calculated based on the unused capital commitments

of the investors meeting various eligibility requirements.

The interest rate under the Subscription Credit Agreement is equal to SOFR

plus 1.975% (subject to a 0.275% SOFR floor).

The Subscription Credit Agreement will expire on December 31, 2022.

See Note 12 –

Subsequent Events.

For the year ended through December 31, 2021, the average amount of

borrowings outstanding under the Subscription Credit Agreement was $24,600 with a weighted average interest rate of 2.26%.

to elect the commitment amount each quarter to borrow up to $ 125,000 , subject to availability under the borrowing base which is calculated

based on the unused capital commitments of the investors meeting various eligibility requirements.

The interest rate under the Subscription

Credit Agreement is equal to the Secured Overnight Funding Rate (“SOFR”) plus 1.975 % (subject to a 0.275 % SOFR floor).

Company is also required to pay a commitment fee of 0.25 % per annum on any unused portion of the Subscription Credit Agreement.

also pays an extension fee of 0.05 % per quarter on the elected commitment amount on the first day of each calendar quarter.

The Subscription

Credit Agreement will expire on December 31, 2023.

For the years ended December 31, 2022 and 2021, the average amount

of borrowings outstanding under the Subscription Credit Agreement were $ 65,751 and $ 24,600 , respectively, with a weighted average interest

rate of 3.70 % and 2.26 %, respectively.

As of December 31, 2022 and 2021, the Company had $ 108,000 and $ 105,000 , respectively, outstanding

under the Subscription Credit Agreement at a weighted average interest rate of 6.32 % and 2.25 %, respectively.

Corporate Credit Facility

As of December 31, 2022, the Company had a senior secured revolving

credit facility (the “Corporate Credit Facility”), that has a total commitment of $ 400,000 .

The Company entered into

the Corporate Credit Facility on February 18, 2022.

The Corporate Credit Facility’s commitment termination date and the final maturity

date are February 18, 2026 and February 18, 2027, respectively.

The Corporate Credit Facility also provides for a feature that allows

the Company, under certain circumstances, to increase the overall size of the Corporate Credit Facility to a maximum of $ 550,000 .

interest rate on the Corporate Credit Facility is equal to Term SOFR (a forward-looking rate based on SOFR futures) plus an applicable

spread of 2.35% per annum or an “alternate base rate” (as defined in the agreements governing the Corporate Credit Facility)

plus an applicable spread of 1.25%.

The Company is also required to pay a commitment fee of 0.375 % per annum on any unused portion of

the Corporate Credit Facility.

Under the Corporate Credit Facility, the Company is required to comply

with various covenants, reporting requirements and other customary requirements for similar revolving credit facilities, including, without

limitation, covenants related to:

(a) limitations on the incurrence of additional indebtedness and liens, (b) limitations on

certain investments, (c) limitations on certain restricted payments, (d) maintaining a certain minimum stockholders’ equity,

and (e) maintaining a ratio of total assets (less total liabilities not representing indebtedness) to total indebtedness of the Company

and its consolidated subsidiaries of not less than 1.5:1.0.

These covenants are subject to important limitations and exceptions that are

described in the agreements governing the Corporate Credit Facility.

Amounts available to borrow under the Corporate Credit Facility are

subject to compliance with a borrowing base that applies different advance rates to different types of assets (based on their value as

determined pursuant to the Corporate Credit Facility) that are pledged as collateral.

The Corporate Credit Facility is secured by certain

assets in the Company’s portfolio and excludes investments held by Kayne Anderson BDC Financing LLC (“KABDCF”) under

the Revolving Funding Facility (as defined below).

For the year ended December 31, 2022, the average amount of borrowings

outstanding under the Corporate Credit Facility was $ 134,239 with a weighted average interest rate of 4.26 %.

As of December 31, 2022,

31, 2021, the Company had $105,000 outstanding under the Subscription Credit Agreement at a weighted average interest rate of 2.25%.

the Company had $ 269,000 outstanding under the Corporate Credit Facility at a weighted average interest rate of 6.63 %.

Revolving Funding Facility

As of December 31, 2022, the Company had a senior secured revolving

funding facility (the “Revolving Funding Facility”), that has a total commitment of $ 350,000 .

The Company and KABDCF

entered into the Revolving Funding Facility on February 18, 2022.

The Revolving Funding Facility is secured by all of the assets held

by KABDCF and the Company has agreed that it will not grant or allow a lien on the membership interest of KABDCF.

The end of the reinvestment

period and the stated maturity date for the Revolving Funding Facility are February 18, 2025 and February 18, 2027, respectively.

interest rate on the Revolving Funding Facility is equal to daily SOFR plus 2.75 % per annum.

KABDCF is also required to pay a commitment

fee of between 0.50 % and 1.50 % per annum depending on the size of the unused portion of the Revolving Funding Facility.

Amounts available

to borrow under the Revolving Funding Facility are subject to a borrowing base that applies different advance rates to different types

of assets held by KABDCF and is subject to limitations with respect to the loans securing the Revolving Funding Facility, including restrictions

on, loan size, payment frequency and status, as well as restrictions on portfolio company leverage, all of which may also affect the borrowing

base and therefore amounts available to borrow.

The Company and KABDCF are also required to comply with various covenants, reporting requirements

and other customary requirements for similar facilities.

These covenants are subject to important limitations and exceptions that are

described in the agreements governing the Revolving Funding Facility.

For the year ended December 31, 2022, the average amount of borrowings

outstanding under the Revolving Funding Facility was $ 147,808 with a weighted average interest rate of 4.20 %.

As of December 31,

2022, the Company had $ 200,000 outstanding under the Revolving Funding Facility at a weighted average interest rate of 7.05 %.

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial

000’s, except share and per share amounts)

and Security Agreement

On February 18, 2022, the Company and KABDCF established two new credit

facilities (described above) and fully repaid the $ 150,000 outstanding balance on the Loan and Security Agreement (the “LSA”),

which was entered into by KABDCF on February 5, 2021.

Advances under the LSA had an interest rate of LIBOR plus 4.25% (subject to a 1.00%

LIBOR floor).

For the years ended December 31, 2022 and 2021, the average amount

of borrowings outstanding under the LSA were $ 20,384 and $ 66,755 , respectively, with a weighted average interest rate of 5.25 % and 5.25 %,

respectively.

As of December 31, 2021, the Company had $ 162,000 outstanding under the LSA at a weighted average interest rate of 5.25 %.

Debt obligations consisted of the following as of December 31, 2022

December 31, 2022

Aggregate Principal Committed

Outstanding Principal

Amount Available (1)

Corporate Credit Facility

Revolving Funding Facility

Subscription Credit Agreement

(1) The amount available reflects any limitations related to the

Credit Facility’s borrowing base as of December 31, 2022.

(2) The carrying value of the Corporate Credit Facility, Revolving

Funding Facility, and Subscription Credit Agreement are presented net of deferred financing costs totaling $ 5,409 .

December 31, 2021

Outstanding Principal

Amount Available (1)

Loan and Security Agreement (LSA)

Subscription Credit Agreement

(1) The amount available reflects any limitations related to the credit

facility’s borrowing base as of December 31, 2021.

(2) The carrying value of the LSA and Subscription Credit Agreement are

presented net of deferred financing costs totaling $672.

For the year ended December 31, 2021, the components of interest expense

were as follows:

For the year ended

(1) The amount available reflects any limitations related to the

Credit Facility’s borrowing base as of December 31, 2021.

(2) The carrying value of the LSA and Subscription Credit Agreement are presented net of deferred financing costs totaling $ 672 .

For the years ended December 31, 2022 and 2021, the components of interest

expense were as follows:

For the years ended

Interest expense

5 unchanged sentences

Notes to Consolidated Financial

000’s, except share and per share amounts)

Share Transactions

1 unchanged sentence

The following table summarizes the number of common stock shares issued

and aggregate proceeds received from such issuances related to the Company’s capital drawdown notices pursuant to subscription agreements

with investors for the year ended December 31, 2021.

and aggregate proceeds received from such issuances related to the Company’s capital call notices pursuant to subscription agreements

with investors for the years ended December 31, 2022 and 2021.

For the year ended December 31, 2022

Common stock issue date

Offering price per share

shares issued

January 24, 2022

July 22, 2022

October 31, 2022

December 9, 2022

Total common stock issued

For the year ended December 31, 2021

Common stock issue date

shares issued

February 5, 2021

5 unchanged sentences

As of December 31, 2022, the Company had subscription agreements with

investors for an aggregate capital commitment of $607,950 to purchase shares of common stock (including a $64,250 capital commitment that

is contingent on the Company meeting certain conditions).

Of this amount, and including the $64,250 contingent capital commitment noted

above, the Company had $308,449 of undrawn commitments at December 31, 2021.

See Note 12 –

Subsequent Events.

investors for an aggregate capital commitment of $ 808,212 to purchase shares of common stock.

Of this amount, the Company had $ 240,492

of undrawn commitments at December 31, 2022.

See Note 12 – Subsequent Events.

Dividends and Dividend Reinvestment

The following table summarizes the dividends

declared and payable by the Company for the year ended December 31, 2021.

See Note 12 –

Subsequent Events.

The following table summarizes the dividends declared and payable by

the Company for the year ended December 31, 2022.

See Note 12 - Subsequent Events.

Dividend declaration date

Dividend record date

Dividend payment date

April 19, 2022

April 20, 2022

April 26, 2022

July 19, 2022

3 unchanged sentences

October 13, 2022

October 25, 2022

December 16, 2022

December 29, 2022

January 13, 2023

Total dividends declared

The following table summarizes the dividends declared and payable by

the Company for the year ended December 31, 2021.

Dividend declaration date

Dividend record date

Dividend payment date

April 23, 2021

April 20, 2021

July 19, 2021

July 20, 2021

July 27, 2021

October 18, 2021

October 22, 2021

November 2, 2021

3 unchanged sentences

Total dividends declared

The following table summarizes the amounts

received and shares of common stock issued to shareholders pursuant to the Company’s dividend reinvestment plan during the year

ended December 31, 2021.

See Note 12 –

Subsequent Events.

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial

000’s, except share and per share amounts)

The following table summarizes the amounts received and shares of common

stock issued to shareholders pursuant to the Company’s dividend reinvestment plan (“DRIP”) for the year ended December

See Note 12 - Subsequent Events.

Dividend record date

Dividend payment date

December 29, 2021

January 18, 2022

April 20, 2022

April 26, 2022

July 20, 2022

July 27, 2022

October 13, 2022

October 25, 2022

For the dividend declared on December 16, 2022 and paid on January

13, 2023, there were 57,860 shares issued with a DRIP value of $ 955 .

These shares are excluded from the table above, as the DRIP shares

were issued after December 31, 2022.

The following table summarizes the amounts received and shares of common

stock issued to shareholders pursuant to the Company’s dividend reinvestment plan for the year ended December 31, 2021.

Dividend record date

Dividend payment date

DRIP shares issued

9 unchanged sentences

Commitments and Contingencies

The Company had an aggregate of $97,810 of

unfunded commitments to provide debt financing to its portfolio companies as of December 31, 2021.

Such commitments are generally subject

to the satisfaction of certain financial and nonfinancial covenants and certain operational metrics;

involve, to varying degrees, elements

of credit risk in excess of the amount recognized in the Company’s consolidated statements of assets and liabilities, and are not

reflected in the Company’s consolidated statements of assets and liabilities.

These amounts may remain outstanding until the commitment

period of an applicable loan expires, which may be shorter than its maturity.

The Company had an aggregate of $ 149,338 and $ 97,810 , respectively,

of unfunded commitments to provide debt financing to its portfolio companies as of December 31, 2022 and 2021.

Such commitments are generally

subject to the satisfaction of certain financial and nonfinancial covenants and certain operational metrics.

The commitment period for

these amounts may be shorter than the maturity date if drawn or funded.

These commitments are not reflected in the Company’s consolidated

statement of assets and liabilities.

Consequently, such commitments result in an element of credit risk in excess of the amount recognized

in the Company’s consolidated statement of assets and liabilities.

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial

000’s, except share and per share amounts)

A summary of the composition of the unfunded

commitments as of December 31, 2021 is shown in the table below:

commitments as of December 31, 2022 and 2021 is shown in the table below:

Alcami Corporation (Alcami)

Allcat Claims Service, LLC

Allentown, LLC

American Equipment Holdings LLC

American Soccer Company, Incorporated (SCORE)

Arborworks Acquisition LLC

Atria Wealth Solutions, Inc.

Acquisition Co., Inc.

BCI Burke Holding Corp.

Blade (US) Holdings, Inc.

BLP Buyer, Inc.

(Bishop Lifting Products)

BR PJK Produce, LLC (Keany)

Brightview, LLC

1 unchanged sentence

CGI Automated Manufacturing, LLC

Corbett Technology Solutions, Inc.

Pavion Corp., f/k/a Corbett Technology Solutions, Inc.

Curio Brands, LLC

DISA Holdings Corp.

DRS Holdings III, Inc.

Scholl’s)

Eastern Wholesale Fence

EIS Legacy, LLC

Fastener Distribution Holdings, LLC

FCA, LLC (FCA Packaging)

Foundation Consumer Brands

1 unchanged sentence

Guardian Dentistry Partners

Gulf Pacific Holdings, LLC

Gusmer Enterprises, Inc.

1 unchanged sentence

Images Acquisition, LLC

IF&P Foods, LLC (FreshEdge)

Improving Acquisition LLC

Light Wave Dental Management LLC

LSL Industries, LLC (LSL Healthcare)

MacNeill Pride Group

6 unchanged sentences

United Safety & Survivability Corporation (USSC)

Universal Marine Medical Supply International, LLC (Unimed)

Vehicle Accessories, Inc.

Total unfunded commitments

From time to time, the Company may become

a party to certain legal proceedings incidental to the normal course of its business.

As of December 31, 2021, management was not aware

of any material pending or threatened litigation that would require accounting recognition or financial statement disclosure.

From time to time, the Company may become a party to certain legal

proceedings incidental to the normal course of its business.

As of December 31, 2022 and 2021, management was not aware of any material

pending or threatened litigation that would require accounting recognition or financial statement disclosure.

Earnings Per Share

In accordance with the provisions of

ASC Topic 260, Earnings per Share (“ASC 260”), basic earnings per share is computed by dividing earnings available

to common stockholders by the weighted average number of shares outstanding during the period.

Other potentially dilutive common shares,

and the related impact to earnings, are considered when calculating earnings per share on a diluted basis.

As of December 31, 2021, there

were no dilutive shares.

The following table sets forth the computation

of basic and diluted earnings per share of common stock for the year ended December 31, 2021.

The Company commenced investment operations

on February 5, 2021, and basic and diluted earnings per share was not applicable for the year ended December 31, 2020 as the Company had

not issued shares.

For the year ended December 31,

In accordance with the provisions of ASC Topic 260, Earnings per

Share (“ASC 260”), basic earnings per share is computed by dividing earnings available to common stockholders by the weighted

average number of shares outstanding during the period.

Other potentially dilutive common shares, and the related impact to earnings,

are considered when calculating earnings per share on a diluted basis.

As of December 31, 2022 and 2021, there were no dilutive shares.

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial

000’s, except share and per share amounts)

The following table sets forth the computation of basic and diluted

earnings per share of common stock for the years ended December 31, 2022 and 2021:

For the years ended

December 31, 2022

December 31, 2021

Net increase (decrease) in net assets resulting from operations

1 unchanged sentence

Earnings (loss) per share of common stock - basic and diluted

The Company has elected to be treated as

a RIC under the Code beginning with the taxable year end December 31, 2021.

As a RIC, the Company is not subject to federal income

tax on the portion of its taxable income and gains distributed currently to its stockholders as dividends.

As a RIC, the Company is also

subject to a federal excise tax based on distributive requirements of its taxable income on a calendar year basis.

Depending on the level

of taxable income earned in a tax year, the Company may choose to carry forward taxable income in excess of current year distributions

into the next tax year and pay a 4% excise tax on such income, to the extent required.

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial

000’s, except share and per share amounts)

The Company has elected to be treated as a RIC under the Code beginning

with the taxable year end December 31, 2021.

As a RIC, the Company is not subject to a federal excise tax based on distributive requirements

of its taxable income on a calendar year basis.

Depending on the level of taxable income earned in a tax year, the Company may choose

to carry forward taxable income in excess of current year distributions into the next tax year and pay a 4 % excise tax on such income,

to the extent required.

The Company makes certain adjustments to the classification of net

3 unchanged sentences

or credited to additional paid in capital, or total distributable earnings (losses), as appropriate.

The permanent differences for tax purposes

from distributable earnings to additional paid in capital were reclassified for tax purposes for the tax year ended December 31,

The permanent differences for tax purposes from distributable earnings

to additional paid in capital were reclassified for tax purposes for the tax years ended December 31, 2022 and 2021.

These reclassifications have no impact on net assets.

For year ended

For the years ended

Increase (decrease) in distributable earnings

7 unchanged sentences

and (4) other non-deductible expense.

The following reconciles net increase in net

assets resulting from operations to taxable income for the year ended December 31, 2021:

For the year ended

The following reconciles net increase in net assets resulting from

operations to taxable income for the years ended December 31, 2022 and 2021:

For the years

Net increase (decrease) in net assets resulting from operations

5 unchanged sentences

as ordinary income, capital gains, non-taxable return of capital, or a combination thereof.

The final determination of tax character will

not be made until the Company files its tax return for each tax year and the tax characteristics of all distributions will be reported

to stockholders on Form 1099 after the end of each calendar year.

The tax character of distributions paid to stockholders during the tax

year ended December 31, 2021 was as follows:

For the year ended

Ordinary income

Return of capital

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial

000’s, except share and per share amounts)

For the year ended December 31, 2021, the

components of accumulated earnings on a tax basis were as follows:

For the year ended

000’s, except share and per share amounts)

The final determination of tax character will not be made until the

Company files its tax return for each tax year and the tax characteristics of all distributions will be reported to stockholders on Form

1099 after the end of each calendar year.

The tax character of distributions paid to stockholders during the tax years ended December

31, 2022 and 2021 were as follows:

For the years ended

Ordinary income

Capital gains

Return of capital

For the years ended December 31, 2022 and 2021, the components of accumulated

earnings on a tax basis were as follows:

For the years ended

Undistributed net investment income (loss)

4 unchanged sentences

Net unrealized appreciation (depreciation)

Capital losses can be carried forward indefinitely

to offset future capital gains.

As of December 31, 2021, the Company had no capital loss carryforwards.

As of December 31, 2021, the Company’s

aggregate unrealized appreciation and depreciation on investments based on cost for U.S.

Capital losses can be carried forward indefinitely to offset future

capital gains.

As of December 31, 2022 and 2021, the Company had no capital loss carryforwards.

As of December 31, 2022 and 2021, the Company’s aggregate unrealized

appreciation and depreciation on investments based on cost for U.S.

federal income tax purposes was as follows:

For the years ended

Gross unrealized appreciation

4 unchanged sentences

tax purposes.

As such, KABDC Corp, LLC is subject to

Federal, state and local taxes.

For the Company’s tax year ended December 31, 2021, KABDC Corp, LLC did not have activity that

resulted in any provision for income taxes.

FASB ASC Topic 740, Accounting for Uncertainty

in Income Taxes (“ASC 740”) provides guidance for how uncertain tax positions should be recognized, measured, presented,

and disclosed in the consolidated financial statements.

ASC 740 requires the evaluation of tax positions taken or expected to be taken

in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not”

of being sustained by the applicable tax authority.

The Company recognizes the tax benefits of uncertain tax positions only where the

position is “more likely than not”

to be sustained assuming examination by tax authorities.

As of December 31, 2021,

management has analyzed the Company’s tax positions, and has concluded that no liability for unrecognized tax benefits should be

recorded related to uncertain tax positions taken in the Company’s current year tax return.

The Company is not aware of any tax

positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12

Management’s determinations regarding ASC 740 may be subject to review and adjustment at a later date based upon factors

including, but not limited to, an ongoing analysis of tax laws, regulations and interpretations thereof.

As such, KABDC Corp, LLC is subject to U.S.

Federal, state and local

For the Company’s tax years ended December 31, 2022 and 2021, KABDC Corp, LLC did not have activity resulting in any provision

for income taxes.

FASB ASC Topic 740, Accounting for Uncertainty in Income Taxes (“ASC

740”) provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the consolidated

financial statements.

ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company’s

tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority.

The Company recognizes the tax benefits of uncertain tax positions only where the position is “more likely than not” to be

sustained assuming examination by tax authorities.

As of December 31, 2022 and 2021, management has analyzed the Company’s tax positions,

and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken in the Company’s

current year tax return.

The Company is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized

tax benefits will change materially in the next 12 months.

Management’s determinations regarding ASC 740 may be subject to review

and adjustment at a later date based upon factors including, but not limited to, an ongoing analysis of tax laws, regulations and interpretations

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial

000’s, except share and per share amounts)

Financial Highlights

The following per share of common stock data has been derived from

information provided in the audited financial statements.

The following is a schedule of financial highlights for the year ended December

For the year ended

thousands, except

share and per share amounts)

Per Common Share

Operating Performance (1)

Net Asset Value, Beginning of

The following per share of common stock data

has been derived from information provided in the audited financial statements.

The following is a schedule of financial highlights for

the years ended December 31, 2022 and 2021:

For the years ended

Per Common Share Operating Performance (1)

(amounts in thousands,

Net Asset Value, Beginning of Period (2)

Results of Operations:

Net Investment Income

Net Realized and Unrealized Gain

(Loss) on Investments (3)

Net Increase (Decrease) in Net

Assets Resulting from Operations

Net Realized and Unrealized Gain (Loss) on Investments (3)

Net Increase (Decrease) in Net Assets Resulting from Operations

Distributions to Common Stockholders

Distributions

Net Decrease in Net Assets Resulting

from Distributions

Net Decrease in Net Assets Resulting from Distributions

Net Asset Value, End of Period

Shares Outstanding, End of Period

Ratio/Supplemental

Ratio/Supplemental Data

Net assets, end of period

2 unchanged sentences

Portfolio turnover

Ratio of operating expenses

to average net assets (5)

Ratio of net investment

income (loss) to average net assets (5)

per common share data was derived by using weighted average shares outstanding.

initial offering price of $15.00 per share less $0.14 per share of organizational costs.

and unrealized gains and losses per share in this caption are balancing amounts necessary

to reconcile the change in net asset value per share for the period, and may not reconcile

with the aggregate gains and losses in the Consolidated Statement of Operations due to share

transactions during the period.

return is calculated as the change in net asset value (“NAV”) per share during

the period, plus distributions per share (if any), divided by the beginning NAV per share.

The calculation also assumes reinvestment of dividends at actual prices pursuant to the Company’s

dividend reinvestment plan.

Ratio of operating expenses to average net assets (5)

Ratio of net investment income (loss) to average net assets (5)

(1) The per common share data was derived by using weighted average shares outstanding.

(2) On February 5, 2021, the initial offering price of $ 15.00 per share less

$ 0.14 per share of organizational costs.

(3) Realized and unrealized gains and losses per share in this caption are balancing amounts necessary to reconcile the change in net asset value per share for the period, and may not reconcile with the aggregate gains and losses in the Consolidated Statement of Operations due to share transactions during the period.

For the years ended December 31, 2022 and 2021, such share transactions

include the effect of share issuances of $ 0.04 and $ 0.19 per share, respectively.

During the period, shares were issued at prices that

reflect the aggregate amount of the Company's initial organizational and offering expenses.

As a result, investors subscribing after

the initial capital call are allocated organizational expenses consistently with all stockholders.

(4) Total return is calculated as the change in net asset value ("NAV") per share during the period, plus distributions per share (if any), divided by the beginning NAV per share.

The calculation also assumes reinvestment of dividends at actual prices pursuant to the Company’s dividend reinvestment plan.

Total return is not annualized.

ratios reflect an annualized amount, except in the case of non-recurring expenses (e.g.

organizational expense of $175 for the period February 5, 2021 (commencement of operations)

through December 31, 2021).

(5) The ratios reflect an annualized amount, except in the case of non-recurring expenses (e.g.

initial organizational expense of $ 175 for the period February 5, 2021 (commencement of operations) through December 31, 2021).

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial

000’s, except share and per share amounts)

Subsequent Events

The Company’s management

has evaluated subsequent events through the date of issuance of the financial statements included herein.

1 unchanged sentence

events that require recognition or disclosure in these financial statements except for the following described below.

On January 18, 2022, the Company

paid a distribution of $0.24 per share to each common stockholder of record as of December 29, 2021.

The total distribution was $4,615

and $902 was reinvested into the Company through the purchase of 55,590 shares of common stock.

On January 24, 2022, the Company sold 4,191,292 shares of its common

stock at a price of $16.36 per share for an aggregate offering amount of $68,582.

Following this capital close, the Company has subscription

agreements with investors for an aggregate capital commitment of $701,450 (including a $33,250 capital commitment that is contingent on

the Company meeting certain conditions) to purchase shares of common stock ($333,367 of the commitments are undrawn).

On January 31, 2022, the Company increased

its Subscription Credit Agreement commitment amount from $150,000 to $175,000.

All other terms of the Subscription Credit Agreement remain

substantially the same.

On February 18, 2022, the Company and KABDCF,

a wholly-owned, special purpose financing subsidiary, established two new credit facilities (described below) and fully repaid the $150,000

outstanding balance on the Loan and Security Agreement.

As of the same date, the Company had $78,000 and $8,000 borrowed on its Corporate

Credit Facility and Subscription Credit Agreement, and KABDCF had $150,000 borrowed on the Revolving Funding Facility.

Corporate Credit Facility

The Company entered into a senior secured

revolving credit facility (the “Corporate Credit Facility”), that has a total commitment of $275,000.

The Corporate Credit

Facility’s commitment termination date and the final maturity date are February 18, 2026 and February 18, 2027, respectively.

Corporate Credit Facility also provides for a feature that allows the Company, under certain circumstances, to increase the overall size

of the Corporate Credit Facility to a maximum of $550,000.

The interest rate on the Corporate Credit Facility is equal to Term SOFR plus

an applicable spread of 2.35% per annum (which includes a SOFR adjustment spread of 0.10%) or an “alternate base rate”

defined in the agreements governing the Corporate Credit Facility) plus an applicable spread of 1.25%.

The Company is also required to

pay a commitment fee of 0.375% per annum on any unused portion of the Corporate Credit Facility.

Under the Corporate Credit Facility, the Company is required to comply

with various covenants, reporting requirements and other customary requirements for similar revolving credit facilities, including, without

limitation, covenants related to:

(a) limitations on the incurrence of additional indebtedness and liens, (b) limitations on

certain investments, (c) limitations on certain restricted payments, (d) maintaining a certain minimum stockholders’

and (e) maintaining a ratio of total assets (less total liabilities not representing indebtedness) to total indebtedness of the Company

and its consolidated subsidiaries of not less than 1.5:1.0.

These covenants are subject to important limitations and exceptions that are

described in the agreements governing the Corporate Credit Facility.

Amounts available to borrow under the Corporate Credit Facility are

subject to compliance with a borrowing base that applies different advance rates to different types of assets (based on their value as

determined pursuant to the Corporate Credit Facility) that are pledged as collateral.

The Corporate Credit Facility is secured by certain

assets in the Company’s portfolio and excludes investments held by KABDCF under the Revolving Funding Facility (as defined below).

Revolving Funding Facility

The Company and KABDCF, entered into a senior

secured revolving funding facility (the “Revolving Funding Facility”), that has a total commitment of $250,000.

The Revolving

Funding Facility is secured by all of the assets held by KABDCF and the Company has agreed that it will not grant or allow a lien on the

membership interest of KABDCF.

The end of the reinvestment period and the stated maturity date for the Revolving Funding Facility are

February 18, 2025 and February 18, 2027, respectively.

The interest rate on the Revolving Funding Facility is equal to daily SOFR plus

2.35% per annum.

KABDCF is also required to pay a commitment fee of between 0.50% and 1.50% per annum depending on the size of the unused

portion of the Revolving Funding Facility.

Amounts available to borrow under the Revolving Funding Facility are subject to a borrowing

base that applies different advance rates to different types of assets held by KABDCF and is subject to limitations with respect to the

loans securing the Revolving Funding Facility, including restrictions on, loan size, payment frequency and status, as well as restrictions

on portfolio company leverage, all of which may also affect the borrowing base and therefore amounts available to borrow.

and KABDCF are also required to comply with various covenants, reporting requirements and other customary requirements for similar facilities.

These covenants are subject to important limitations and exceptions that are described in the agreements governing the Revolving Funding

On January 13, 2023, the Company paid a distribution of $ 0.43 per share

to each common stockholder of record as of December 29, 2022.

The total distribution was $ 15,428 and $ 955 was reinvested into the Company

through the purchase of 57,860 shares of common stock.

On January 24, 2023, the Board of Directors (the “Board”)

of the Company elected James (“Jim”) Robo as the Chairman of the Board.

Robo will serve as an interested director of the

Company until he stands for re-election at the 2025 Annual Meeting of Stockholders of the Company.

With the addition of Mr.

Company’s Board is comprised of seven individuals, four of which are independent.

The independent board members include Mariel Joliet

(Lead Independent Director), George Marucci, Jr., Susan Schnabel and Rhonda Smith.

On March 7, 2023, the Board declared a distribution of $ 0.47 per share

to each common stockholder of record as of March 31, 2023.

The distribution will be paid on April 14, 2023.

As of March 9, 2023, the Company has subscription agreements with investors

for an aggregate capital commitment of $ 832,342 to purchase shares of common stock ($ 264,612 of the commitments are undrawn).

CHANGES IN AND DISAGREEMENTS

3 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-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk