What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-02-04 compared with 2020-11-05 · 120 added, 94 removed, 356 unchanged (38% of the section changed)

26 unchanged sentences

We commenced operations on April 8, 2004 upon completion of our initial public offering that raised $870 million in net proceeds from selling 62 million shares of common stock at a price of $15.00 per share (20.7 million shares at a price of $45.00 per share adjusted for the one-for-three reverse stock split).

Since then, and through September 30, 2020, we have raised approximately $2.21 billion in net proceeds from additional offerings of common stock and we have repurchased common stock for $223.1 million.

Since then, and through December 31, 2020, we have raised approximately $2.21 billion in net proceeds from additional offerings of common stock and we have repurchased common stock for $223.1 million.

Apollo Investment Management, L.P.

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The outbreak has had and could continue to have an adverse impact on economic and market conditions and some economists, investment banks and The World Bank have indicated that current indicators point to a global recession that started in February 2020.

While we are unable to accurately predict the full impact that COVID-19 will have on our results from operations, financial condition, liquidity and cash flows due to numerous uncertainties, including the duration and severity of the pandemic and containment measures, our compliance with these measures has impacted our day-to-day operations and could disrupt our business and operations, as well as that of our portfolio companies, for an indefinite period of time.

While we are unable to accurately predict the full impact that COVID-19 will have on our results from operations, financial condition, liquidity and cash flows due to numerous uncertainties, including the duration and severity of the pandemic, containment measures and the availability of effective vaccines, our compliance with these measures has impacted our day-to-day operations and could disrupt our business and operations, as well as that of our portfolio companies, for an indefinite period of time.

Depending on the duration and extent of the disruption to the operations of our portfolio companies, we expect that certain portfolio companies will experience financial distress and possibly default on their financial obligations to us and their other capital providers.

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In connection with the adverse effects of the COVID-19 pandemic, we may need to restructure our investments in some of our portfolio companies, which could result in reduced interest payments, an increase in the amount of PIK interest we receive, or result in permanent impairments on our investments.

As of September 30, 2020, the fair value of our investments has been adversely impacted by the COVID-19 pandemic.

As of December 31, 2020, the fair value of our investments has been adversely impacted by the COVID-19 pandemic.

Our investment valuations are inherently less certain than they would be absent the current and potential impacts of COVID-19 and the values assigned as of this date may materially differ from the values that may ultimately be realized.

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These events may also limit our investment origination pipeline and may increase our future funding costs.

We have had a significant reduction in our net change in unrealized losses as of September 30, 2020 as compared to September 30, 2019, which is primarily the result of the impact of the COVID-19 pandemic.

The decrease primarily resulted from an increase in the aggregate unrealized depreciation of our investment portfolio resulting from decreases in the fair value of some of our portfolio company investments primarily due to the immediate adverse economic effects of the COVID-19 pandemic and the continuing uncertainty surrounding its long-term impact, as well as the re-pricing of credit risk in the broadly syndicated credit market.

A significant reduction in our net change in unrealized gains/losses may result due to decreases in the fair value of some of our portfolio company investments due to the immediate adverse economic effects of the COVID-19 pandemic and the continuing uncertainty surrounding its long-term impact.

We believe that the COVID-19 pandemic represents an extraordinary circumstance that materially impacts the fair value of our investments.

As a result, the fair value of our portfolio investments may be further negatively impacted after September 30, 2020 by by continued duration of the adverse market, as well as circumstances and events that are not yet known.

As a result, the fair value of our portfolio investments may be further negatively impacted after December 31, 2020 by by continued duration of the adverse market, as well as circumstances and events that are not yet known.

We are also subject to financial risks, including changes in market interest rates.

As of September 30, 2020, all of our debt portfolio investments bore interest at variable rates, which generally are LIBOR-based (or based on an equivalent applicable currency rate), and many of which are subject to certain floors.

As of December 31, 2020, all of our debt portfolio investments bore interest at variable rates, which generally are LIBOR-based (or based on an equivalent applicable currency rate), and many of which are subject to certain floors.

In connection with the COVID-19 pandemic, the U.S.

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As a BDC, we must not acquire any assets other than “qualifying assets” specified in the 1940 Act unless, at the time the acquisition is made, at least 70% of our total assets are qualifying assets (with certain limited exceptions).

As of September 30, 2020, non-qualifying assets represented approximately 17.4% of the total assets of the Company.

As of December 31, 2020, non-qualifying assets represented approximately 16.8% of the total assets of the Company.

We generate revenue primarily in the form of interest and dividend income from the securities we hold and capital gains, if any, on investment securities that we may acquire in portfolio companies.

27 unchanged sentences

Portfolio and Investment Activity

Our portfolio and investment activity during the three and six months ended September 30, 2020 and 2019 was as follows:

Three Months Ended September 30, Six Months Ended September 30,

Our portfolio and investment activity during the three and nine months ended December 31, 2020 and 2019 was as follows:

Three Months Ended December 31, Nine Months Ended December 31,

(in millions)* 2020 2019 2020 2019

11 unchanged sentences

* Totals may not foot due to rounding.

Our portfolio composition and weighted average yields as of September 30, 2020 and March 31, 2020 were as follows:

September 30, 2020 March 31, 2020

Our portfolio composition and weighted average yields as of December 31, 2020 and March 31, 2020 were as follows:

December 31, 2020 March 31, 2020

Portfolio composition, at fair value:

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(4) The interest rate type information is calculated using the Company’s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping, commodities and investments on non-accrual status.

Since the initial public offering of Apollo Investment in April 2004 and through September 30, 2020, invested capital totaled $21.5 billion in 541 portfolio companies.

Since the initial public offering of Apollo Investment in April 2004 and through December 31, 2020, invested capital totaled $21.6 billion in 548 portfolio companies.

Over the same period, Apollo Investment completed transactions with more than 100 different financial sponsors.

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Because of the inherent uncertainties of valuation, the values reflected in the financial statements may differ materially from the values that would be received upon an actual disposition of such investments.

As of September 30, 2020, $2.59 billion or 99.98% of the Company’s investments were classified as Level 3.

As of December 31, 2020, $2.48 billion or 99.98% of the Company’s investments were classified as Level 3.

The high proportion of Level 3 investments relative to our total investments is directly related to our investment philosophy and target portfolio, which consists primarily of long-term secured debt, as well as unsecured and mezzanine positions of private middle-market companies.

32 unchanged sentences

When readily available, broker quotations and/or quotations provided by pricing services are considered in the valuation process of independent valuation firms.

During the six months ended September 30, 2020, there were no significant changes to the Company’s valuation techniques and related inputs considered in the valuation process.

During the nine months ended December 31, 2020, there were no significant changes to the Company’s valuation techniques and related inputs considered in the valuation process.

Investment Income Recognition

30 unchanged sentences

Results of Operations

Operating results for the three and six months ended September 30, 2020 and 2019 were as follows:

Three Months Ended September 30, Six Months Ended September 30,

Operating results for the three and nine months ended December 31, 2020 and 2019 were as follows:

Three Months Ended December 31, Nine Months Ended December 31,

(in millions)* 2020 2019 2020 2019

22 unchanged sentences

Total Investment Income

For the three months ended September 30, 2020 as compared to the three months ended September 30, 2019

The decrease in total investment income for the three months ended September 30, 2020 compared to the three months ended September 30, 2019 was primarily driven by the decrease in total interest income (including PIK) of $11.9 million.

The decrease in total interest income (including PIK) was due to a decrease in the average yield for the total debt portfolio, from 9.6% for three months ended September 30, 2019 to 8.1% for three months ended September 30, 2020, and a lower income-bearing investment portfolio.

The $1.6 million decrease in dividend income was due to a decrease in dividends received from Merx Aviation Finance, LLC.

Furthermore, there was a decrease in other income of $2.0 million due to lower amendment fees and bridge fees.

For the six months ended September 30, 2020 as compared to the six months ended September 30, 2019

The decrease in total investment income for the six months ended September 30, 2020 compared to the six months ended September 30, 2019 was primarily driven by the decrease in total interest income (including PIK) of $21.9 million.

The decrease in total interest income (including PIK) was primarily due to a decrease in the average yield for the total debt portfolio, from 9.8% for six months ended September 30, 2019 to 8.4% for six months ended September 30, 2020, and a lower income-bearing investment portfolio.

Additionally, there was a decrease in prepayment fees and income recognized from the acceleration of discount, premium, or deferred fees on repaid investments which totaled $4.9 million and $2.3 million for the six months ended September 30, 2019 and six months ended September 30, 2020, respectively.

The $0.7 million decrease in dividend income was primarily due to a decrease in dividends received from Merx Aviation Finance, LLC.

Furthermore, there was a decrease in other income of $2.6 million due to lower amendment fees and bridge fees.

For the three months ended September 30, 2020 as compared to the three months ended September 30, 2019

The decrease in net expenses for the three months ended September 30, 2020 compared to the three months ended September 30, 2019 was due to the decrease in interest and other debt expenses of $4.9 million and a decrease in management and performance-based incentive fees (net of amounts waived) of $2.8 million.

The decrease in interest and other debt expenses was attributed to a decrease in total annualized cost of debt from 4.97% for the three months ended September 30, 2019 to 3.30% for the three months ended September 30, 2020.

This was partially offset by an increase in the average debt outstanding and net leverage from $1.49 billion and 1.24x, respectively during the three months ended September 30, 2019, to $1.66 billion and 1.56x, respectively during the three months ended September 30, 2020.

The decrease of $2.8 million in management and performance-based incentive fees (net of amounts waived) was due to a decrease in the investment portfolio and an incentive fee cap for fees paid in prior periods.

Furthermore, the increase in other general and administrative services expenses was due to a increase in legal fees from $0.8 million for the three months ended September 30, 2019 to $1.0 million for the three months ended September 30, 2020.

For the six months ended September 30, 2020 as compared to the six months ended September 30, 2019

The decrease in net expenses for the six months ended September 30, 2020 compared to the six months ended September 30, 2019 was primarily due to the decrease in interest and other debt expenses of $7.0 million and the decrease of management and performance-based incentive fees (net of amounts waived) of $2.8 million.

The decrease in interest and other debt expenses was was primarily attributed to a decrease in total annualized cost of debt from 5.26% for the six months ended September 30, 2019 to 3.36% for the six months ended September 30, 2020.

This was partially offset by an increase in the average debt outstanding and net leverage from $1.37 billion and 1.24x, respectively during the six months ended September 30, 2019, to $1.73 billion and 1.56x, respectively during the six months ended September 30, 2020.

The decrease of $2.8 million in management and performance-based incentive fees (net of amounts waived) was due to to a decrease in the investment portfolio and an incentive fee cap for fees paid in prior periods.

For the three months ended December 31, 2020 as compared to the three months ended December 31, 2019

The decrease in total investment income for the three months ended December 31, 2020 compared to the three months ended December 31, 2019 was primarily driven by the decrease in total interest income (including PIK) of $12.0 million and the decrease in dividend income of $2.1 million.

The decrease in total interest income (including PIK) was due to a decrease in the average yield for the total debt portfolio, from 9.2% for three months ended December 31, 2019 to 8.1% for three months ended December 31, 2020, and a lower income-bearing investment portfolio.

Furthermore, there was a decrease in prepayment fees and income recognized from the acceleration of discount, premium, or deferred fees on repaid investments which totaled $2.8 million and $2.4 million for the three months ended December 31, 2019 and three months ended December 31, 2020, respectively.

The decrease in dividend income was due to a decrease in dividends received from Merx Aviation Finance, LLC and MSEA Tankers LLC.

For the nine months ended December 31, 2020 as compared to the nine months ended December 31, 2019

The decrease in total investment income for the nine months ended December 31, 2020 compared to the nine months ended December 31, 2019 was primarily driven by the decrease in total interest income (including PIK) of $33.9 million and the decrease in dividend income of $3.0 million.

The decrease in total interest income (including PIK) was primarily due to a decrease in the average yield for the total debt portfolio, from 9.6% for nine months ended December 31, 2019 to 8.4% for nine months ended December 31, 2020, and a lower income-bearing investment portfolio.

Additionally, there was a decrease in prepayment fees and income recognized from the acceleration of discount, premium, or deferred fees on repaid investments which totaled $7.7 million and $4.7 million for the nine months ended December 31, 2019 and nine months ended December 31, 2020, respectively.

The decrease in dividend income was primarily due to a decrease in dividends received from Merx Aviation Finance, LLC.

Furthermore, there was a decrease in other income of $2.5 million due to lower bridge fees and structuring fees.

For the three months ended December 31, 2020 as compared to the three months ended December 31, 2019

The decrease in net expenses for the three months ended December 31, 2020 compared to the three months ended December 31, 2019 was due to the decrease in interest and other debt expenses of $5.0 million and a decrease in management and performance-based incentive fees (net of amounts waived) of $1.5 million.

The decrease in interest and other debt expenses was attributed to a decrease in total annualized cost of debt from 4.55% for the three months ended December 31, 2019 to 3.42% for the three months ended December 31, 2020.

The decrease in management and performance-based incentive fees (net of amounts waived) was due to a decrease in the investment portfolio and an incentive fee cap for fees paid in prior periods.

Furthermore, the increase in other general and administrative services expenses, from $2.2 million for the three months ended December 31, 2019 to $2.8 million for the three months ended December 31, 2020, was due to a increase in legal fees and valuation fees.

For the nine months ended December 31, 2020 as compared to the nine months ended December 31, 2019

The decrease in net expenses for the nine months ended December 31, 2020 compared to the nine months ended December 31, 2019 was primarily due to the decrease in interest and other debt expenses of $11.9 million and the decrease of management and performance-based incentive fees (net of amounts waived) of $4.3 million.

The decrease in interest and other debt expenses was was primarily attributed to a decrease in total annualized cost of debt from 5.00% for the nine months ended December 31, 2019 to 3.38% for the nine months ended December 31, 2020.

This was partially offset by an increase in the average debt outstanding.

The decrease in management and performance-based incentive fees (net of amounts waived) was due to to a decrease in the investment portfolio and an incentive fee cap for fees paid in prior periods.

Net Realized Gains (Losses)

For the three months ended September 30, 2020 as compared to the three months ended September 30, 2019

During the three months ended September 30, 2020, we recognized gross realized gains of $0.7 million and gross realized losses of $3.7 million, resulting in net realized losses of $3.0 million.

Significant realized gains (losses) for the three months ended September 30, 2020 are summarized below:

For the three months ended December 31, 2020 as compared to the three months ended December 31, 2019

During the three months ended December 31, 2020, we recognized gross realized gains of $4.6 million and gross realized losses of $11.3 million, resulting in net realized losses of $6.7 million.

Significant realized gains (losses) for the three months ended December 31, 2020 are summarized below:

(in millions) Net Realized Gain (Loss)

AMP Solar Group, Inc.

KLO Holdings, LLC (4.8)

During the three months ended September 30, 2019, we recognized gross realized gains of $0.7 million and gross realized losses of $12.2 million, resulting in net realized loss of $11.5 million.

Significant realized gains (losses) for the three months ended September 30, 2019 are summarized below:

Garden Fresh (2.5)

Learfield Communications (1.9)

FiscalNote (1.5)

During the three months ended December 31, 2019, we recognized gross realized gains of $17.6 million and gross realized losses of $13.7 million, resulting in net realized gains of $3.8 million.

Significant realized gains (losses) for the three months ended December 31, 2019 are summarized below:

(in millions) Net Realized Gain (Loss)

Crowne Automotive $ (6.4)

For the six months ended September 30, 2020 as compared to the six months ended September 30, 2019

During the six months ended September 30, 2020, we recognized gross realized gains of $0.9 million and gross realized losses of $12.3 million, resulting in net realized losses of $11.4 million.

Significant realized gains (losses) for the six months ended September 30, 2020 are summarized below:

Asset Repackaging Trust Six B.V.

(Israel Electric) $ 7.0

Renew Financial LLC (f/k/a Renewable Funding, LLC) 2.8

NFA Group 1.0

Carbonfree Chemicals SPE I LLC (f/k/a Maxus Capital Carbon SPE I LLC) (9.0)

Solarplicity Group Limited (f/k/a AMP Solar UK) (4.7)

For the nine months ended December 31, 2020 as compared to the nine months ended December 31, 2019

During the nine months ended December 31, 2020, we recognized gross realized gains of $5.3 million and gross realized losses of $23.5 million, resulting in net realized losses of $18.1 million.

Significant realized gains (losses) for the nine months ended December 31, 2020 are summarized below:

(in millions) Net Realized Gain (Loss)

ZPower, LLC $ (6.1)

AMP Solar Group, Inc.

KLO Holdings, LLC (8.5)

During the six months ended September 30, 2019, we recognized gross realized gains of $1.8 million and gross realized losses of $12.0 million, resulting in net realized loss of $10.2 million.

Significant realized gains (losses) for the six months ended September 30, 2019 are summarized below:

ZPower, LLC (6.1)

Garden Fresh (2.5)

Learfield Communications (1.9)

FiscalNote (1.5)

During the nine months ended December 31, 2019, we recognized gross realized gains of $18.2 million and gross realized losses of $24.5 million, resulting in net realized loss of $6.3 million.

Significant realized gains (losses) for the nine months ended December 31, 2019 are summarized below:

(in millions) Net Realized Gain (Loss)

Asset Repackaging Trust Six B.V.

(Israel Electric) $ 7.0

Renew Financial LLC (f/k/a Renewable Funding, LLC) 2.8

SquareTwo (CA Holdings, Collect America, Ltd.) 1.2

NFA Group 1.0

Carbonfree Chemicals SPE I LLC (f/k/a Maxus Capital Carbon SPE I LLC (9.0)

Crowne Automotive (6.4)

Solarplicity Group Limited (f/k/a AMP Solar UK) (4.7)

Net Change in Unrealized Gains (Losses)

For the three months ended September 30, 2020 as compared to the three months ended September 30, 2019

During the three months ended September 30, 2020, we recognized gross unrealized gains of $34.3 million and gross unrealized losses of $26.0 million, including the impact of transferring unrealized to realized gains (losses), resulting in net change in unrealized gains of $8.4 million.

Significant changes in unrealized gains (losses) for the three months ended September 30, 2020 are summarized below:

For the three months ended December 31, 2020 as compared to the three months ended December 31, 2019

During the three months ended December 31, 2020, we recognized gross unrealized gains of $49.6 million and gross unrealized losses of $38.0 million, including the impact of transferring unrealized to realized gains (losses), resulting in net change in unrealized gains of $11.6 million.

Significant changes in unrealized gains (losses) for the three months ended December 31, 2020 are summarized below:

(in millions) Net Change in Unrealized Gain (Loss)

ChyronHego Corporation $ 5.7

KLO Holdings, LLC 5.2

Garden Fresh 2.5

NFA Group 2.5

MSEA Tankers LLC 2.0

Learfield Communications 1.9

CARE Fertility 1.8

PIB Group 1.5

ProPharma 1.0

Merx Aviation Finance, LLC (5.9)

AMP Solar Group, Inc.

Spotted Hawk (9.5)

Paper Source (1.7)

Ambrosia Buyer Corp.

Renew Financial LLC (f/k/a Renewable Funding, LLC) (2.4)

Glacier Oil & Gas Corp.

(f/k/a Miller Energy Resources, Inc.) (2.2)

During the three months ended September 30, 2019, we recognized gross unrealized gains of $19.1 million and gross unrealized losses of $36.3 million, including the impact of transferring unrealized to realized gains (losses), resulting in net change in unrealized gains of $17.2 million.

Significant changes in unrealized gains (losses) for the three months ended September 30, 2019 are summarized below:

Dynamic Product Tankers (Prime), LLC (1.8)

Sonar Entertainment (1.1)

During the three months ended December 31, 2019, we recognized gross unrealized gains of $13.8 million and gross unrealized losses of $53.6 million, including the impact of transferring unrealized to realized gains (losses), resulting in net change in unrealized loss of $39.8 million.

Significant changes in unrealized gains (losses) for the three months ended December 31, 2019 are summarized below:

(in millions) Net Change in Unrealized Gain (Loss)

Crowne Automotive $ 6.7

AMP Solar Group, Inc.

Asset Repackaging Trust Six B.V.

(Israel Electric) 1.5

Spotted Hawk (11.5)

KLO Holdings, LLC (7.1)

Merx Aviation Finance, LLC $ 2.1

NFA Group 2.0

CARE Fertility 1.4

PIB Group 1.0

Glacier Oil & Gas Corp.

(f/k/a Miller Energy Resources, Inc.) (8.0)

Asset Repackaging Trust Six B.V.

(Israel Electric) (7.4)

Renew Financial LLC (f/k/a Renewable Funding, LLC) (5.6)

For the six months ended September 30, 2020 as compared to the six months ended September 30, 2019

During the six months ended September 30, 2020, we recognized gross unrealized gains of $55.3 million and gross unrealized losses of $63.7 million, including the impact of transferring unrealized to realized gains (losses), resulting in net change in unrealized losses of $8.4 million.

Significant changes in unrealized gains (losses) for the six months ended September 30, 2020 are summarized below:

Spotted Hawk (4.5)

Carbonfree Chemicals SPE I LLC (f/k/a Maxus Capital Carbon SPE I LLC) (2.9)

For the nine months ended December 31, 2020 as compared to the nine months ended December 31, 2019

During the nine months ended December 31, 2020, we recognized gross unrealized gains of $91.3 million and gross unrealized losses of $88.1 million, including the impact of transferring unrealized to realized gains (losses), resulting in net change in unrealized gains of $3.2 million.

Significant changes in unrealized gains (losses) for the nine months ended December 31, 2020 are summarized below:

(in millions) Net Change in Unrealized Gain (Loss)

2 unchanged sentences

NFA Group 4.8

ChyronHego Corporation 3.2

CARE Fertility 3.1

CT Technologies Intermediate Holdings, Inc 3.0

PIB Group 3.0

Arlington 1.4

CARE Fertility 1.3

ProPharma 1.2

Merx Aviation Finance, LLC (10.2)

MSEA Tankers LLC 2.3

Spotted Hawk (14.6)

Dynamic Product Tankers (Prime), LLC (11.3)

Merx Aviation Finance, LLC (9.1)

Carbonfree Chemicals SPE I LLC (f/k/a Maxus Capital Carbon SPE I LLC) (8.9)

Spotted Hawk (5.2)

Ambrosia Buyer Corp.

Glacier Oil & Gas Corp.

(f/k/a Miller Energy Resources, Inc.) (6.5)

ChyronHego Corporation (2.5)

Paper Source (2.3)

Garden Fresh (2.4)

Renew Financial LLC (f/k/a Renewable Funding, LLC) (1.8)

Sonar Entertainment (1.2)

Solarplicity Group Limited (f/k/a AMP Solar UK) (1.1)

Learfield Communications (1.2)

During the six months ended September 30, 2019, we recognized gross unrealized gains of $25.7 million and gross unrealized losses of $54.9 million, including the impact of transferring unrealized to realized gains (losses), resulting in net change in unrealized gains of $29.2 million.

Significant changes in unrealized gains (losses) for the six months ended September 30, 2019 are summarized below:

During the nine months ended December 31, 2019, we recognized gross unrealized gains of $25.5 million and gross unrealized losses of $94.5 million, including the impact of transferring unrealized to realized gains (losses), resulting in net change in unrealized gains of $69.0 million.

Significant changes in unrealized gains (losses) for the nine months ended December 31, 2019 are summarized below:

(in millions) Net Change in Unrealized Gain (Loss)

Crowne Automotive $ 6.8

Merx Aviation Finance, LLC 3.5

NFA Group 2.7

Sprint Industrial Holdings, LLC.

AMP Solar Group, Inc.

Merx Aviation Finance, LLC 1.4

Asset Repackaging Trust Six B.V.

(Israel Electric) 1.3

Spotted Hawk (23.8)

KLO Holdings (8.5)

Glacier Oil & Gas Corp.

(f/k/a Miller Energy Resources, Inc.) (13.3)

KLO Holdings, LLC (9.2)

Carbonfree Chemicals SPE I LLC (f/k/a Maxus Capital Carbon SPE I LLC) (7.6)

Securus Technologies Holdings, Inc.

CT Technologies Intermediate Holdings, Inc (1.3)

CARE Fertility (1.2)

Renew Financial LLC (f/k/a Renewable Funding, LLC) (6.8)

Bumble Bee Foods (1.0)

Asset Repackaging Trust Six B.V.

(Israel Electric) (6.2)

CT Technologies Intermediate Holdings, Inc (1.4)

Golden Bear (1.2)

Securus Technologies Holdings, Inc.

Solarplicity Group Limited (f/k/a AMP Solar UK) (1.0)

Liquidity and Capital Resources

12 unchanged sentences

See Note 6 to the financial statements for information on the Company’s debt.

The following table shows the contractual maturities of our debt obligations as of September 30, 2020:

The following table shows the contractual maturities of our debt obligations as of December 31, 2020:

Payments Due by Period

4 unchanged sentences

____________________

(1) As of September 30, 2020, aggregate lender commitments under the Senior Secured Facility totaled $1.81 billion and $555.2 million of unused capacity.

As of September 30, 2020, there were $0.2 million of letters of credit issued under the Senior Secured Facility as shown as part of total commitments in Note 8 to the financial statements.

(1) As of December 31, 2020, aggregate lender commitments under the Senior Secured Facility totaled $1.81 billion and $643.5 million of unused capacity.

As of December 31, 2020, there were $0.2 million of letters of credit issued under the Senior Secured Facility as shown as part of total commitments in Note 8 to the financial statements.

Stockholders’ Equity

1 unchanged sentence

Distributions

Distributions paid to stockholders during the three and six months ended September 30, 2020 totaled $29.3 million ($0.45 per share) and $58.7 million ($0.90 per share), respectively.

Distributions paid to stockholders during the three and six months ended September 30, 2019 totaled $30.6 million ($0.45 per share) and $61.7 million ($0.90 per share), respectively.

Distributions paid to stockholders during the three and nine months ended December 31, 2020 totaled $23.5 million ($0.36 per share) and $82.2 million ($1.26 per share), respectively.

Distributions paid to stockholders during the three and nine months ended December 31, 2019 totaled $30.2 million ($0.45 per share) and $91.8 million ($1.35 per share), respectively.

For income tax purposes, distributions made to stockholders are reported as ordinary income, capital gains, non-taxable return of capital, or a combination thereof.

Although the tax character of distributions paid to stockholders through September 30, 2020 may include return of capital, the exact amount cannot be determined at this point.

Although the tax character of distributions paid to stockholders through December 31, 2020 may include return of capital, the exact amount cannot be determined at this point.

The final determination of the tax character of distributions will not be made until we file our tax return for the tax year ended March 31, 2021.

13 unchanged sentences

With respect to the distributions to stockholders, income from origination, structuring, closing, commitment and other upfront fees associated with investments in portfolio companies is treated as taxable income and accordingly, distributed to stockholders.

For the three and six months ended September 30, 2020, PIK income totaled $0.9 million and $2.8 million on total investment income of $54.9 million and $111.6 million respectively.

For the three and six months ended September 30, 2019, PIK income totaled $1.6 million and $7.2 million on total investment income of $70.3 million and $136.8 million respectively.

For the three and nine months ended December 31, 2020, PIK income totaled $1.6 million and $4.8 million on total investment income of $54.4 million and $165.9 million respectively.

For the three and nine months ended December 31, 2019, PIK income totaled $2.6 million and $9.8 million on total investment income of $68.5 million and $205.3 million respectively.

In order to maintain the Company’s status as a RIC, this non-cash source of income must be paid out to stockholders annually in the form of distributions, even though the Company has not yet collected the cash.

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-Q

Item 2. Management’s Discussion and Analysis