What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-02-03 compared with 2021-11-04 · 114 added, 91 removed, 352 unchanged (37% 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, 2021, we have raised approximately $2.21 billion in net proceeds from additional offerings of common stock and we have repurchased common stock for $231.0 million.

Since then, and through December 31, 2021, we have raised approximately $2.21 billion in net proceeds from additional offerings of common stock and we have repurchased common stock for $243.4 million.

Apollo Investment Management, L.P.

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COVID-19 Developments

There is an ongoing global outbreak of COVID-19, which has spread to over 200 countries and territories, including the United States, and has spread to every state in the United States.

The global impact of the outbreak has been rapidly evolving, and as cases of COVID-19, including new variants, have continued to be identified in additional countries, many countries have reacted by instituting quarantines and restrictions on travel, closing financial markets and/or restricting trading, and limiting operations of non-essential businesses.

There is an ongoing global outbreak of COVID-19, which has spread to over 200 countries and territories, including every state in the United States.

The global impact of the outbreak has been rapidly evolving, and as cases of COVID-19, including new variants, have continued to be identified in additional countries, many countries have reacted, and continue to react, by instituting quarantines and restrictions on travel, closing financial markets and/or restricting trading, and limiting operations of non-essential businesses.

Such actions have created disruption in global supply chains, and adversely impacted many industries.

Supply chain disruptions could significantly impact the businesses of our portfolio companies and lead to increased costs, inventory shortages, shipping delays and an inability to meet customer demands.

The outbreak has had a continued adverse impact on economic and market conditions and has triggered a period of global economic slowdown.

Although vaccines have been widely distributed in the U.S., certain U.S.

states are planning on reopening and we believe the economy is beginning to rebound in certain respects, the uncertainty surrounding the COVID-19 pandemic, including uncertainty regarding new variants of COVID-19 and acceptance of vaccines and other factors have and may continue to contribute to significant volatility in the global markets.

states are planning on reopening and we believe the economy is beginning to rebound in certain respects, the uncertainty surrounding the COVID-19 pandemic, including uncertainty regarding new variants of COVID-19, the efficacy of existing vaccines against new variants and acceptance of vaccines and other factors have and may continue to contribute to significant volatility in the global markets.

COVID-19 and the current financial, economic and capital markets environment, and future developments in these and other areas present uncertainty and risk with respect to our performance, financial condition, results of operations and ability to pay distributions.

LIBOR Developments

On July 27, 2017, the U.K Financial Conduct Authority (“FCA”) announced that it would phase out LIBOR as a benchmark by the end of 2021 and the FCA has indicated that market participants should not rely on LIBOR being available after 2021.

On March 5, 2021, the administrator of LIBOR announced a delay in the phase out of the majority of the USD LIBOR publications until June 30, 2023, with the remainder of LIBOR publications to still end on December 31, 2021.

This announcement has been confirmed by the Alternative Reference Rates Committee (ARRC) of the Federal Reserve Bank of New York as constituting a “benchmark transition event” and establishing “benchmark replacement dates” in ARRC standard LIBOR transition provisions that exist in many U.S.

On July 27, 2017, the U.K Financial Conduct Authority (“FCA”) announced that it would phase out LIBOR as a benchmark by the end of 2021.

As of December 31, 2021, all non-U.S.

dollar LIBOR publications have been phased out.

The phase out of a majority of the U.S.

dollar publications is delayed until June 30, 2023.

The Alternative Reference Rates Committee (“ARRC”) of the Federal Reserve Bank of New York previously confirm that this constitutes a “benchmark transition event” and established “benchmark replacement dates” in ARRC standard LIBOR transition provisions that exist in many U.S.

law contracts using LIBOR.

The publication of all EUR and CHF LIBOR settings, the Spot Next/Overnight, 1 week, 2 month and 12 month JPY and GBP LIBOR settings, and the 1 week and 2 months USD LIBOR settings will cease after December 31, 2021.

The publication of all EUR and CHF LIBOR settings, the Spot Next/Overnight, 1 week, 2 month and 12 month JPY and GBP LIBOR settings, and the 1 week and 2 months USD LIBOR settings has ceased.

The publication of the overnight, 1 month, 3 month, 6 month, and 12 months USD LIBOR settings will cease after June 30, 2023.

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Our portfolio also includes equity interests such as common stock, preferred stock, warrants or options.

Our level of investment activity can and does vary substantially from period to period depending on many factors, including the amount of debt and equity capital available to middle-market companies, the level of merger and acquisition activity for such companies, the general economic environment, the competitive environment for the types of investments we make and, more recently, market disruptions due to COVID-19.

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, 2021, non-qualifying assets represented approximately 14.1% of the total assets of the Company.

As of December 31, 2021, non-qualifying assets represented approximately 13.0% 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.

Our debt investments, whether in the form of mezzanine or senior secured loans, generally have a stated term of five to ten years and bear interest at a fixed rate or a floating rate usually determined on the basis of a benchmark, such as the LIBOR, EURIBOR, the federal funds rate, or the prime rate.

Interest on debt securities is generally payable quarterly or semiannually and while U.S.

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Portfolio and Investment Activity

Our portfolio and investment activity during the three and six months ended September 30, 2021 and 2020 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, 2021 and 2020 was as follows:

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

(in millions)* 2021 2020 2021 2020

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* Totals may not foot due to rounding.

Our portfolio composition and weighted average yields as of September 30, 2021 and March 31, 2021 were as follows:

September 30, 2021 March 31, 2021

Our portfolio composition and weighted average yields as of December 31, 2021 and March 31, 2021 were as follows:

December 31, 2021 March 31, 2021

Portfolio composition, at fair value:

14 unchanged sentences

Interest rate type, at fair value (4):

Fixed rate amount — —

Fixed rate amount $0.0 billion —

Floating rate amount $2.0 billion $1.9 billion

2 unchanged sentences

Interest rate type, at amortized cost (4):

Fixed rate amount — —

Fixed rate amount $0.0 billion —

Floating rate amount $2.0 billion $1.9 billion

6 unchanged sentences

(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, 2021, invested capital totaled $22.4 billion in 572 portfolio companies.

Since the initial public offering of Apollo Investment in April 2004 and through December 31, 2021, invested capital totaled $22.8 billion in 579 portfolio companies.

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

Recent Developments

On February 3, 2022, the Company’s Board of Directors approved a new stock repurchase plan (the “Repurchase Plan”) to acquire up to $25 million of the Company’s common stock.

The new Repurchase Plan is in addition to the Company's existing share repurchase authorization, of which approximately $5.8 million of repurchase capacity remains.

Accordingly, the Company now has approximately $30.8 million available for stock repurchases under its repurchase program.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with GAAP.

The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, gains and losses.

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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, 2021, $2.61 billion or 99.98% of the Company’s investments were classified as Level 3.

As of December 31, 2021, $2.59 billion or 99.93% 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.

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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, 2021, 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, 2021, 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, 2021 and 2020 were as follows:

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

Operating results for the three and nine months ended December 31, 2021 and 2020 were as follows:

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

(in millions)* 2021 2020 2021 2020

22 unchanged sentences

Total Investment Income

For the three months ended September 30, 2021 as compared to the three months ended September 30, 2020

The decrease in total investment income for the three months ended September 30, 2021 compared to the three months ended September 30, 2020 was primarily driven by the decrease in total interest income (including PIK) of $4.3 million.

The decrease in total interest income (including PIK) was primarily due to a decrease in the yield from second lien secured debt.

The $1.5 million increase in dividend income was due to a increase in dividends received from MSEA Tankers LLC.

Furthermore, there was a increase in other income of $0.8 million due to higher amendment fees and bridge fees.

For the six months ended September 30, 2021 as compared to the six months ended September 30, 2020

The decrease in total investment income for the six months ended September 30, 2021 compared to the six months ended September 30, 2020 was primarily driven by the decrease in total interest income (including PIK) of $10.5 million.

The decrease in total interest income (including PIK) was primarily due to a decrease in the yield from second lien secured debt.

This was partially offset by an increase in prepayment fees and income recognized from the acceleration of discount, premium, or deferred fees on repaid investments, which totaled $2.3 million for the six months ended September 30, 2020 and $4.8 million for the for the six months ended September 30, 2021.

The $0.7 million increase in dividend income was primarily due to a increase in dividends received from MSEA Tankers LLC.

For the three months ended December 31, 2021 as compared to the three months ended December 31, 2020

The increase in total investment income for the three months ended December 31, 2021 compared to the three months ended December 31, 2020 was primarily driven by the increase in total interest income (including PIK) of $0.9 million.

The increase in total interest income (including PIK) was primarily due to a higher income bearing investment portfolio.

Furthermore there was an increase in prepayment fees and income recognized from the acceleration of discount, premium, or deferred fees on repaid investments, which totaled $2.4 million for the three months ended December 31, 2020 and $4.0 million for the three months ended December 31, 2021.

This was partially offset by the $0.6 million decrease in dividend income.

Furthermore, there was also an increase in other income of $0.4 million due to higher bridge fees.

For the nine months ended December 31, 2021 as compared to the nine months ended December 31, 2020

The decrease in total investment income for the nine months ended December 31, 2021 compared to the nine months ended December 31, 2020 was primarily driven by the decrease in total interest income (including PIK) of $9.6 million.

The decrease in total interest income (including PIK) was primarily due to a decrease in the portfolio of second lien secured debt.

This was partially offset by an increase in prepayment fees and income recognized from the acceleration of discount, premium, or deferred fees on repaid investments, which totaled $4.7 million for the nine months ended December 31, 2020 and $8.7 million for the for the nine months ended December 31, 2021.

The $0.2 million increase in dividend income was primarily due to an increase in dividends received from MSEA Tankers LLC.

Furthermore, there was an increase in other income of $2.0 million due to higher amendment fees and bridge fees.

For the three months ended September 30, 2021 as compared to the three months ended September 30, 2020

The increase in net expenses for the three months ended September 30, 2021 compared to the three months ended September 30, 2020 was primarily due to the increase in management and performance-based incentive fees.

For the three months ended December 31, 2021 as compared to the three months ended December 31, 2020

The increase in net expenses for the three months ended December 31, 2021 compared to the three months ended December 31, 2020 was primarily due to the increase in management and performance-based incentive fees.

The increase of $5.6 million in management and performance-based incentive fees was due to an increase in performance based incentive fees and an increase in the investment portfolio.

Furthermore, there was an increase in interest and other debt expenses which was attributed to an increase in total annualized cost of debt from 3.30% for the three months ended September 30, 2020 to 3.60% for the three months ended September 30, 2021.

This was partially offset by a decrease in the average debt outstanding and net leverage from $1.66 billion and 1.56x, respectively during the three months ended September 30, 2020, to $1.54 billion and 1.51x, respectively during the three months ended September 30, 2021.

For the six months ended September 30, 2021 as compared to the six months ended September 30, 2020

The increase in net expenses for the six months ended September 30, 2021 compared to the six months ended September 30, 2020 was primarily due to the increase in management and performance-based incentive fees.

Furthermore, there was an increase in interest and other debt expenses, which was attributed to increase in the average debt outstanding and net leverage from $1.53 billion and 1.43x, respectively during the three months ended December 31, 2020, to $1.58 billion and 1.52x, respectively during the three months ended December 31, 2021.

Additionally there was increase in the total annualized cost of debt, from 3.42% for the three months ended December 31, 2020 to 3.55% for the three months ended December 31, 2021.

For the nine months ended December 31, 2021 as compared to the nine months ended December 31, 2020

The increase in net expenses for the nine months ended December 31, 2021 compared to the nine months ended December 31, 2020 was primarily due to the increase in management and performance-based incentive fees.

The increase of $10.0 million in management and performance-based incentive fees was due to an increase in performance based incentive fees and an increase in the investment portfolio.

Furthermore there was a decrease in interest and other debt expenses, which was attributed to a decrease in the average debt outstanding and net leverage, from $1.73 billion and 1.56x, respectively during the six months ended September 30, 2020, to $1.50 billion and 1.51x, respectively during the six months ended September 30, 2021.

This was partially offset by an increase in the total annualized cost of debt from 3.36% for the six months ended September 30, 2020 to 3.54% for the six months ended September 30, 2021.

Furthermore there was a decrease in interest and other debt expenses, which was attributed to a decrease in the average debt outstanding, from $1.66 billion during the nine months ended December 31, 2020, to $1.53 billion during the nine months ended December 31, 2021.

This was partially offset by an increase in the total annualized cost of debt from 3.38% for the nine months ended December 31, 2020 to 3.54% for the nine months ended December 31, 2021.

Net Realized Gains (Losses)

For the three months ended September 30, 2021 as compared to the three months ended September 30, 2020

During the three months ended September 30, 2021, we recognized gross realized gains of $3.1 million and gross realized losses of $67.9 million, resulting in net realized losses of $64.8 million.

Significant realized gains (losses) for the three months ended September 30, 2021 are summarized below:

For the three months ended December 31, 2021 as compared to the three months ended December 31, 2020

During the three months ended December 31, 2021, we recognized gross realized gains of $0.6 million and gross realized losses of $1.3 million, resulting in net realized losses of $0.6 million.

Significant realized gains (losses) for the three months ended December 31, 2021 are summarized below:

(in millions) Net Realized Gain (Loss)

Niacet Corporation $ 1.1

Spotted Hawk (44.4)

Glacier Oil & Gas Corp.

(f/k/a Miller Energy Resources, Inc.) (20.9)

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:

Sequential Brands Group, Inc.

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)

For the six months ended September 30, 2021 as compared to the six months ended September 30, 2020

During the six months ended September 30, 2021, we recognized gross realized gains of $3.4 million and gross realized losses of $68.1 million, resulting in net realized losses of $64.7 million.

Significant realized gains (losses) for the six months ended September 30, 2021 are summarized below:

Garden Fresh (2.5)

Learfield Communications (1.9)

FiscalNote (1.5)

For the nine months ended December 31, 2021 as compared to the nine months ended December 31, 2020

During the nine months ended December 31, 2021, we recognized gross realized gains of $4.0 million and gross realized losses of $69.4 million, resulting in net realized losses of $65.3 million.

Significant realized gains (losses) for the nine months ended December 31, 2021 are summarized below:

(in millions) Net Realized Gain (Loss)

3 unchanged sentences

(f/k/a Miller Energy Resources, Inc.) (20.9)

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:

Sequential Brands Group, Inc.

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)

ZPower, LLC (6.1)

Garden Fresh (2.5)

Learfield Communications (1.9)

FiscalNote (1.5)

Net Change in Unrealized Gains (Losses)

For the three months ended September 30, 2021 as compared to the three months ended September 30, 2020

During the three months ended September 30, 2021, we recognized gross unrealized gains of $81.8 million and gross unrealized losses of $12.8 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 three months ended September 30, 2021 are summarized below:

For the three months ended December 31, 2021 as compared to the three months ended December 31, 2020

During the three months ended December 31, 2021, we recognized gross unrealized gains of $26.9 million and gross unrealized losses of $28.2 million, including the impact of transferring unrealized to realized gains (losses), resulting in net change in unrealized losses of $1.3 million.

Significant changes in unrealized gains (losses) for the three months ended December 31, 2021 are summarized below:

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

Spotted Hawk $ 40.1

ChyronHego Corporation $ 6.3

Glacier Oil & Gas Corp.

(f/k/a Miller Energy Resources, Inc.) 5.2

Carbonfree Chemicals SPE I LLC (f/k/a Maxus Capital Carbon SPE I LLC) 9.1

Merx Aviation Finance, LLC 3.4

Sequential Brands Group, Inc.

Dynamic Product Tankers (Prime), LLC (10.3)

Spotted Hawk (3.9)

Ambrosia Buyer Corp.

MSEA Tankers LLC (1.6)

Niacet Corporation (1.3)

NFA Group (1.1)

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:

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)

For the six months ended September 30, 2021 as compared to the six months ended September 30, 2020

During the six months ended September 30, 2021, we recognized gross unrealized gains of $97.3 million and gross unrealized losses of $21.6 million, including the impact of transferring unrealized to realized gains (losses), resulting in net change in unrealized gains of $75.7 million.

Significant changes in unrealized gains (losses) for the six months ended September 30, 2021 are summarized below:

Dynamic Product Tankers (Prime), LLC (1.8)

Sonar Entertainment (1.1)

For the nine months ended December 31, 2021 as compared to the nine months ended December 31, 2020

During the nine months ended December 31, 2021, we recognized gross unrealized gains of $115.2 million and gross unrealized losses of $40.8 million, including the impact of transferring unrealized to realized gains (losses), resulting in net change in unrealized gains of $74.4 million.

Significant changes in unrealized gains (losses) for the nine months ended December 31, 2021 are summarized below:

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

Spotted Hawk $ 37.3

Carbonfree Chemicals SPE I LLC (f/k/a Maxus Capital Carbon SPE I LLC) 18.9

Glacier Oil & Gas Corp.

(f/k/a Miller Energy Resources, Inc.) 24.0

Carbonfree Chemicals SPE I LLC (f/k/a Maxus Capital Carbon SPE I LLC) 18.7

ChyronHego Corporation 6.8

Paper Source 3.0

Merx Aviation Finance, LLC 2.7

Sequential Brands Group, Inc.

US Legal Support 1.5

Genesis Healthcare, Inc.

Dynamic Product Tankers (Prime), LLC (19.8)

2 unchanged sentences

Niacet Corporation (1.1)

NFA Group (1.0)

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:

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 losses 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)

Liquidity and Capital Resources

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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, 2021:

The following table shows the contractual maturities of our debt obligations as of December 31, 2021:

Payments Due by Period

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____________________

(1) As of September 30, 2021, aggregate lender commitments under the Senior Secured Facility totaled $1.81 billion and $681.8 million of unused capacity.

As of September 30, 2021, 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, 2021, aggregate lender commitments under the Senior Secured Facility totaled $1.81 billion and $692.3 million of unused capacity.

As of December 31, 2021, 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, 2021 totaled $23.4 million ($0.36 per share) and $46.9 million ($0.72 per share), respectively.

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 nine months ended December 31, 2021 totaled $23.4 million ($0.36 per share) and $70.3 million ($1.08 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.

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, 2021 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, 2021 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, 2022.

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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, 2021, PIK income totaled $0.9 million and $2.5 million on total investment income of $52.9 million and $103.4 million respectively.

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 nine months ended December 31, 2021, PIK income totaled $1.0 million and $3.5 million on total investment income of $55.0 million and $158.4 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.

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