Crescent Capital BDC, Inc. (Form: 10-Q, Received: 08/10/2020 17:10:28)

Large accelerated filer

Accelerated filer

Non-Accelerated filer

Smaller reporting company

Emerging growth company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended June 30, 2020

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from to

Commission file number 814-01132

Crescent Capital BDC, Inc.

(Exact Name of Registrant as Specified in Its Charter)


Maryland		47-3162282
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

11100 Santa Monica Blvd., Suite 2000, Los Angeles, CA		90025
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (310) 235-5900

Not applicable

Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report.

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol

Name of each exchange on which registered

Common Stock, $0.001 par value per share

CCAP

The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $0.001 per share

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit files). Yes ☐ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes ☐ No ☒

The number of shares of the Registrant’s common stock, $.001 par value per share, outstanding at August 10, 2020 was 28,167,360.

CRESCENT CAPITAL BDC, INC.

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2020

Table of Contents


	INDEX	PAGE NO.
PART I.	FINANCIAL INFORMATION		2
Item 1.	Financial Statements		2
	Consolidated Statements of Assets and Liabilities as of June 30, 2020 (Unaudited) and December 31, 2019		2
	Consolidated Statements of Operations for the three and six months ended June 30, 2020 and 2019 (Unaudited)		3
	Consolidated Statements of Changes in Net Assets for the three and six months ended June 30, 2020 and 2019 (Unaudited)		4
	Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and 2019 (Unaudited)		6
	Consolidated Schedule of Investments as of June 30, 2020 (Unaudited)		7
	Consolidated Schedule of Investments as of December 31, 2019		20
	Notes to Consolidated Financial Statements (Unaudited)		32
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		57
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		75
Item 4.	Controls and Procedures		76
PART II.	OTHER INFORMATION		76
Item 1.	Legal Proceedings		76
Item 1A	Risk Factors		77
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		79
Item 3.	Defaults Upon Senior Securities		79
Item 4.	Other Information		79
Item 5.	Exhibits		80

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about us, our current or prospective portfolio investments, our industry, our beliefs, and our assumptions. We believe that it is important to communicate our future expectations to our investors. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “would,” “will,” “should,” “targets,” “projects,” and variations of these words and similar expressions identify forward-looking statements, although not all forward-looking statements include these words. These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and are difficult to predict, that could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements.

The following factors and factors listed under “Risk Factors” in this report and other documents Crescent Capital BDC, Inc. has filed with the Securities and Exchange Commission, or SEC, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. The occurrence of the events described in these risk factors and elsewhere in this report could have a material adverse effect on our business, results of operation and financial position. The following factors are among those that may cause actual results to differ materially from our forward-looking statements:

•

uncertainty surrounding the financial stability of the United States, Europe and China;

•

the ability of our investment adviser to locate suitable investments for us and to monitor and administer our investments;

•

potential fluctuation in quarterly operating results;

•

potential impact of economic recessions or downturns;

•

adverse developments in the credit markets;

•

regulations governing our operation as a business development company;

•

operation in a highly competitive market for investment opportunities;

•

changes in interest rates may affect our cost of capital and net investment income;

•

financing investments with borrowed money;

•

potential adverse effects of price declines and illiquidity in the corporate debt markets;

•

the impact of COVID-19 on our portfolio companies and the markets in which they operate, interest rates and the economy in general;

•

lack of liquidity in investments;

•

the outcome and impact of any litigation;

•

the timing, form and amount of any dividend distributions;

•

risks regarding distributions;

•

potential adverse effects of new or modified laws and regulations;

•

the social, geopolitical, financial, trade and legal implications of Brexit;

•

potential resignation of the Advisor and or the Administrator;

•

uncertainty as to the value of certain portfolio investments;

•

defaults by portfolio companies;

•

our ability to successfully complete and integrate any acquisitions;

•

risks associated with original issue discount (“OID”) and payment-in-kind (“PIK”) interest income; and

•

the market price of our common stock may fluctuate significantly.

Although we believe that the assumptions on which these forward-looking statements are based upon are reasonable, some of those assumptions are based on the work of third parties and any of those assumptions could prove to be inaccurate; as a result, forward-looking statements based on those assumptions also could prove to be inaccurate. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this report should not be regarded as a representation by us that our plans and objectives will be achieved. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this report. We do not undertake any obligation to update or revise any forward-looking statements or any other information contained herein, except as required by applicable law. You are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. The safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which preclude civil liability for certain forward-looking statements, do not apply to the forward-looking statements in this report because we are an investment company.

Crescent Capital BDC, Inc.

Consolidated Statements of Assets and Liabilities

(in thousands except share and per share data)


	As of June 30, 2020 (Unaudited)			As of December 31, 2019
Assets
Investments, at fair value
Non-controlled non-affiliated (cost of $864,843 and $675,329, respectively)	$	821,831		$	671,582
Non-controlled affiliated (cost of $33,782 and $19,766, respectively)		42,890			20,507
Controlled (cost of $39,000 and $34,000, respectively)		30,513			34,442
Cash and cash equivalents		3,514			4,576
Restricted cash and cash equivalents		8,043			8,851
Receivable for investments sold		11,393			160
Interest receivable		3,980			2,832
Unrealized appreciation on foreign currency forward contracts		2,672			758
Deferred tax assets		762			421
Other assets		712			3,046

Total assets	$	926,310		$	747,175


Liabilities
Debt (net of deferred financing costs of $4,504 and $3,431, respectively)	$	395,829		$	322,010
Distributions payable		11,548			8,554
Interest and other debt financing costs payable		3,345			3,545
Accrued expenses and other liabilities		2,553			3,788
Management fees payable		1,660			1,343
Deferred tax liabilities		959			879
Directors’ fees payable		110			74
Unrealized depreciation on foreign currency forward contracts		8			65

Total liabilities	$	416,012		$	340,258


Commitments and Contingencies (Note 8)

Net Assets
Preferred stock, par value $0.001 per share (10,000 shares authorized, zero outstanding, respectively)	$	—		$	—
Common stock, par value $0.001 per share (200,000,000 shares authorized, 28,167,360 and 20,862,314 shares issued and outstanding, respectively)		28			21
Paid-in capital in excess of par value		558,913			414,293
Accumulated loss		(48,643	)		(7,397	)

Total Net Assets	$	510,298		$	406,917

Total Liabilities and Net Assets	$	926,310		$	747,175

Net asset value per share	$	18.12		$	19.50

See accompanying notes

Crescent Capital BDC, Inc.

Consolidated Statements of Operations

(in thousands except share and per share data)

(Unaudited)


	For the three months ended June 30,						For the six months ended June 30,
	2020			2019			2020			2019
Investment Income:
From non-controlled non-affiliated investments:
Interest income	$	15,689		$	10,523		$	32,292		$	20,875
Paid-in-kind interest		697			172			1,246			337
Dividend income		712			508			1,604			931
Other income		620			500			1,060			744
From non-controlled affiliated investments:
Interest income		328			265			671			537
Paid-in-kind interest		481			—			485			—
From controlled investments:
Dividend income		800			550			800			550

Total investment income		19,327			12,518			38,158			23,974


Expenses:
Interest and other debt financing costs		3,631			3,173			7,980			5,982
Management fees		2,767			2,160			5,418			4,050
Incentive fees		2,267			1,107			4,199			2,131
Professional fees		364			192			706			384
Directors’ fees		110			72			239			145
Organization expenses		—			49			—			91
Other general and administrative expenses		495			537			1,221			1,058

Total expenses		9,634			7,290			19,763			13,841
Management fee waiver		(1,107	)		(1,044	)		(2,264	)		(1,947	)
Incentive fee waiver		(2,267	)		(1,107	)		(4,199	)		(2,131	)

Net expenses		6,260			5,139			13,300			9,763

Net investment income before taxes		13,067			7,379			24,858			14,211
Income and excise taxes		111			3			349			6

Net investment income		12,956			7,376			24,509			14,205


Net realized and unrealized gains (losses) on investments:
Net realized gain (loss) on:
Non-controlled non-affiliated investments		(1,136	)		(660	)		(1,023	)		(921	)
Foreign currency transactions		76			476			(161	)		489
Net change in unrealized appreciation (depreciation) on:
Non-controlled non-affiliated investments and foreign currency translation		25,140			1,434			(39,300	)		3,894
Non-controlled affiliated investments		11,878			80			8,367			616
Controlled investments		7,914			(472	)		(8,929	)		(713	)
Foreign currency forward contracts		(218	)		309			1,972			282

Net realized and unrealized gains (losses) on investments		43,654			1,167			(39,074	)		3,647

Realized loss on asset acquisition		—			—			(3,825	)		—

Net realized and unrealized gains (losses) on investments and asset acquisition		43,654			1,167			(42,899	)		3,647
Benefit (provision) for taxes on unrealized appreciation (depreciation) on investments		(193	)		(31	)		262			(480	)

Net increase (decrease) in net assets resulting from operations	$	56,417		$	8,512		$	(18,128	)	$	17,372


Per Common Share Data:
Net increase (decrease) in net assets resulting from operations per share (basic and diluted):	$	2.00		$	0.54		$	(0.67	)	$	1.15
Net investment income per share (basic and diluted):	$	0.46		$	0.47		$	0.90		$	0.94
Weighted average shares outstanding (basic and diluted):		28,168,643			15,703,473			27,190,817			15,087,362

See accompanying notes

Crescent Capital BDC, Inc.

Consolidated Statements of Changes in Net Assets

(in thousands except share and per share data)

(Unaudited)


	Common Stock
	Shares			Par Amount		Paid in Capital in Excess of Par Value			Accumulated Loss			Total Net Assets
Balance at March 31, 2020		28,200,547		$	28	$	559,239		$	(93,512	)	$	465,755
Net increase (decrease) in net assets resulting from operations:
Net investment income		—			—		—			12,956			12,956
Net realized gain (loss) on investments and foreign currency transactions		—			—		—			(1,060	)		(1,060	)
Net change in unrealized appreciation (depreciation) on investments, foreign currency forward contracts and foreign currency translation		—			—		—			44,714			44,714
Benefit/(Provision) for taxes on unrealized appreciation/(depreciation) on investments		—			—		—			(193	)		(193	)
Stockholder distributions:
Repurchase of common stock		(33,187	)		—		(326	)		—			(326	)
Distributions to stockholders		—			—		—			(11,548	)		(11,548	)

Total increase (decrease) for the three months ended June 30, 2020		(33,187	)		—		(326	)		44,869			44,543

Balance at June 30, 2020		28,167,360		$	28	$	558,913		$	(48,643	)	$	510,298

Distributions declared												$	0.41

Balance at December 31, 2019		20,862,314		$	21	$	414,293		$	(7,397	)	$	406,917
Net increase (decrease) in net assets resulting from operations:
Net investment income		—			—		—			24,509			24,509
Net realized gain (loss) on investments and foreign currency transactions		—			—		—			(1,184	)		(1,184	)
Net change in unrealized appreciation (depreciation) on investments, foreign currency forward contracts and foreign currency translation		—			—		—			(37,890	)		(37,890	)
Realized loss on asset acquisition		—			—		—			(3,825	)		(3,825	)
Benefit/(Provision) for taxes on unrealized appreciation/(depreciation) on investments		—			—		—			262			262
Stockholder distributions:
Issuance of common stock		2,265,021			2		44,295			—			44,297
Issuance in connection with asset acquisition (Note 13)		5,202,312			5		101,944			—			101,949
Issuance of common shares pursuant to dividend reinvestment plan		30,128			—		589			—			589
Repurchase of common stock		(192,415	)		—		(2,208	)		—			(2,208	)
Distributions to stockholders		—			—		—			(23,118	)		(23,118	)

Total increase (decrease) for the six months ended June 30, 2020		7,305,046			7		144,620			(41,246	)		103,381

Balance at June 30, 2020		28,167,360		$	28	$	558,913		$	(48,643	)	$	510,298

Distributions declared												$	0.82

See accompanying notes

Crescent Capital BDC, Inc.

Consolidated Statements of Changes in Net Assets

(in thousands except share and per share data)

(Unaudited)


	Common Stock
	Shares		Par Amount		Paid in Capital in Excess of Par Value			Accumulated Loss			Total Net Assets
Balance at March 31, 2019		14,703,566	$	15	$	292,260		$	(3,627	)	$	288,648
Net increase (decrease) in net assets resulting from operations:
Net investment income		—		—		—			7,376			7,376
Net realized gain (loss) on investments and foreign currency transactions		—		—		—			(184	)		(184	)
Net change in unrealized appreciation (depreciation) on investments, foreign currency forward contracts and foreign currency translation		—		—		—			1,351			1,351
Benefit/(Provision) for taxes on unrealized appreciation/(depreciation) on investments		—		—		—			(31	)		(31	)
Stockholder distributions:
Issuance of common stock		1,524,312		1		29,998			—			29,999
Issuance of common shares pursuant to dividend reinvestment plan		17,918		—		353			—			353
Equity offering costs		—		—		(68	)		—			(68	)
Distributions to stockholders		—		—		—			(6,660	)		(6,660	)

Total increase (decrease) for the three months ended June 30, 2019		1,542,230		1		30,283			1,852			32,136

Balance at June 30, 2019		16,245,796	$	16	$	322,543		$	(1,775	)	$	320,784

Distributions declared											$	0.41

Balance at December 31, 2018		13,358,289	$	13	$	266,024		$	(6,458	)	$	259,579
Net increase (decrease) in net assets resulting from operations:
Net investment income		—		—		—			14,205			14,205
Net realized gain (loss) on investments and foreign currency transactions		—		—		—			(432	)		(432	)
Net change in unrealized appreciation (depreciation) on investments, foreign currency forward contracts and foreign currency translation		—		—		—			4,079			4,079
Benefit/(Provision) for taxes on unrealized appreciation/(depreciation) on investments		—		—		—			(480	)		(480	)
Stockholder distributions:
Issuance of common stock		2,854,440		3		55,997			—			56,000
Issuance of common shares pursuant to dividend reinvestment plan		33,067		—		649			—			649
Equity offering costs		—		—		(127	)		—			(127	)
Distributions to stockholders		—		—		—			(12,689	)		(12,689	)

Total increase (decrease) for the six months ended June 30, 2019		2,887,507		3		56,519			4,683			61,205

Balance at June 30, 2019		16,245,796	$	16	$	322,543		$	(1,775	)	$	320,784

Distributions declared											$	0.82

See accompanying notes

Crescent Capital BDC, Inc.

Consolidated Statements of Cash Flows

(in thousands except share and per share data)

(Unaudited)


	For the six months ended June 30, 2020			For the six months ended June 30, 2019
Cash flows from operating activities:
Net increase (decrease) in net assets resulting from operations	$	(18,128	)	$	17,373

Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used for) operating activities:
Purchases of investments		(143,856	)		(185,173	)
Paid-in-kind interest income		(1,731	)		(337	)
Proceeds from sales of investments and principal repayments		134,110			58,636
Net realized (gain) loss on investments and foreign currency transactions		1,376			921
Realized loss on asset acquisition⁽²⁾		3,825			—
Acquisition of Alcentra Capital Corporation, net of cash acquired⁽²⁾		(12,884	)		—
Net change in unrealized (appreciation) depreciation on investments and foreign currency translation		39,862			(3,798	)
Net change in unrealized (appreciation) depreciation on foreign currency forward contracts		(1,972	)		(282	)
Amortization of premium and accretion of discount, net		(2,761	)		(1,291	)
Amortization of deferred financing costs		615			414
Change in operating assets and liabilities:
(Increase) decrease in receivable for investments sold		(10,838	)		37
(Increase) decrease in interest receivable		(146	)		(1,518	)
(Increase) decrease in deferred tax asset		(341	)		—
(Increase) decrease in other assets		2,339			(85	)
Increase (decrease) in payable for investments purchased		—			37,525
Increase (decrease) in management fees payable		317			153
Increase (decrease) in directors’ fees payable		36			79
Increase (decrease) in interest and credit facility fees and expenses payable		(1,034	)		498
Increase (decrease) in deferred tax liability		80			480
Increase (decrease) in accrued expenses and other liabilities		(1,630	)		(64	)

Net cash provided by (used for) operating activities		(12,761	)		(76,432	)


Cash flows from financing activities:
Issuance of common stock		44,297			56,000
Repurchase of common stock		(2,208	)		—
Financing costs paid related to revolving credit facilities		(1,688	)		(642	)
Distributions paid		(19,535	)		(10,723	)
Equity offering costs		—			(127	)
Borrowings on debt		169,843			108,496
Repayments on debt		(145,927	)		(77,925	)
Repayments on InterNotes ^®		(33,853	)		—

Net cash provided by (used for) financing activities		10,929			75,079

Effect of exchange rate changes on cash denominated in foreign currency		(38	)		25
Net increase (decrease) in cash, cash equivalents, restricted cash and foreign currency		(1,870	)		(1,328	)
Cash, cash equivalents, restricted cash and foreign currency, beginning of period		13,427			10,369

Cash, cash equivalents, restricted cash and foreign currency, end of period⁽¹⁾	$	11,557		$	9,041


Supplemental and non-cash financing activities:
Cash paid during the period for interest	$	7,990		$	5,071
Issuance of common stock pursuant to dividend reinvestment plan	$	589		$	649
Accrued but unpaid equity offering costs	$	—		$	68
Accrued but unpaid distributions	$	11,548		$	6,661
Issuance of shares in connection with asset acquisition (Note 13)⁽²⁾	$	101,949		$	—

(1)

As of June 30, 2020, the balance included cash and cash equivalents of $3,514 (including cash denominated in foreign currency of $391) and restricted cash and cash equivalents of $8,043, respectively. As of June 30, 2019, the balance included cash and cash equivalents of $9,041 (including cash denominated in foreign currency of $319) and restricted cash and cash equivalents of $0, respectively.

(2)

After the close of business on January 31, 2020, in connection with the Alcentra Acquisition (as defined in Note 1 and further discussed in Note 13), the Company acquired net assets of $114,431 which included $195,682 investment portfolio, $3,409 cash and cash equivalents and $1,398 other assets, net of $86,058 of assumed liabilities for the total cash and stock consideration of $118,256, inclusive of $7,250 of asset acquisition costs.

See accompanying notes

CRESCENT CAPITAL BDC, INC.

Consolidated Schedule of Investments (Unaudited)

June 30, 2020

(in thousands, except share and per share data)


Company/Security/Country	Investment Type	Interest Term *			Interest Rate			Maturity / Dissolution Date		Principal Amount, Par Value or Shares		Cost			Percentage of Net Assets **			Fair Value
Investments^{(1) (2)}
United States
Debt Investments
Automobiles & Components
Auto-Vehicle Parts, LLC^{(3) (4) (5) (6)}	Senior Secured First Lien Revolver								01/2023	$	—	$	(4	)		—	%	$	(28	)
Auto-Vehicle Parts, LLC⁽³⁾	Senior Secured First Lien Term Loan		L + 450 (100 Floor)	⁽⁷⁾		5.50	%		01/2023		4,590		4,552			0.9			4,377
Continental Battery Company⁽³⁾	Senior Secured First Lien Delayed Draw Term Loan		L + 550 (100 Floor)	⁽⁷⁾		6.50	%		12/2022		6,612		6,540			1.3			6,544
Continental Battery Company^(3) (5)	Senior Secured First Lien Delayed Draw Term Loan		L + 550 (100 Floor)	⁽⁷⁾		6.50	%		12/2022		3,483		3,456			0.7			3,447
Continental Battery Company^{(3) (4) (5) (6)}	Senior Secured First Lien Revolver								12/2022		—		(7	)		—			(9	)
Continental Battery Company⁽³⁾	Senior Secured First Lien Term Loan		L + 550 (100 Floor)	⁽⁷⁾		6.50	%		12/2022		3,953		3,915			0.8			3,912
Empire Auto Parts, LLC^{(3) (4) (5) (6)}	Unitranche First Lien Revolver								09/2024		—		(6	)		—			(20	)
Empire Auto Parts, LLC⁽³⁾	Unitranche First Lien Term Loan		L + 550 (100 Floor)	⁽⁸⁾		6.50	%		09/2024		2,456		2,420			0.4			2,332
Empire Auto Parts, LLC⁽³⁾	Unitranche First Lien Term Loan		L + 550 (100 Floor)	⁽⁸⁾		6.50	%		09/2024		2,382		2,341			0.4			2,261
POC Investors, LLC^{(3) (4) (5) (6)}	Senior Secured First Lien Revolver								11/2021		—		(5	)		—			(11	)
POC Investors, LLC⁽³⁾	Senior Secured First Lien Term Loan		L + 550 (100 Floor)	⁽⁸⁾		6.50	%		11/2021		13,593		13,503			2.6			13,445

											37,069		36,705			7.1			36,250

Capital Goods
Alion Science and Technology Corporation^(3) (9)	Unsecured Debt					11.00	%		08/2022		6,543		6,457			1.3			6,543
Envocore Holding, LLC⁽³⁾	Senior Secured First Lien Term Loan		L + 900 (200 Floor) (including 500 PIK)	⁽⁸⁾		11.00	%		06/2022		18,144		15,437			2.6			13,531
Potter Electric Signal Company^{(3) (4) (6) (10)}	Senior Secured First Lien Delayed Draw Term Loan								12/2025		—		(18	)		—			(39	)
Potter Electric Signal Company^(3) (6)	Senior Secured First Lien Revolver		P + 325	⁽¹¹⁾		6.50	%		12/2024		546		541			0.1			526
Potter Electric Signal Company⁽³⁾	Senior Secured First Lien Term Loan		L + 450 (100 Floor)	⁽¹²⁾		5.50	%		12/2025		2,493		2,472			0.5			2,406
Potter Electric Signal Company⁽³⁾	Senior Secured First Lien Term Loan		L + 450 (100 Floor)	⁽⁸⁾		5.50	%		12/2025		472		469			0.1			456

											28,198		25,358			4.6			23,423

Commercial & Professional Services
ASP MCS Acquisition Corp.⁽¹³⁾	Senior Secured First Lien Term Loan								05/2024		5,227		5,210			0.5			2,650
Battery Solutions, Inc.^{(3) (14)}	Unsecured Debt		1200 + 200 PIK	⁽⁹⁾		14.00	%		11/2021		1,250		1,228			0.2			1,192
BFC Solmetex LLC & Bonded Filter Co. LLC^{(3) (5)}	Unitranche First Lien Revolver		L + 850 (100 Floor)	⁽⁸⁾		9.50	%		09/2023		750		740			0.1			695
BFC Solmetex LLC & Bonded Filter Co. LLC^{(3) (5)}	Unitranche First Lien Revolver		L + 850 (100 Floor)	⁽⁸⁾		9.50	%		09/2023		300		295			0.1			278
BFC Solmetex LLC & Bonded Filter Co. LLC⁽³⁾	Unitranche First Lien Term Loan		L + 850 (100 Floor)	⁽⁸⁾		9.50	%		09/2023		5,950		5,866			1.1			5,511
BFC Solmetex LLC & Bonded Filter Co. LLC⁽³⁾	Unitranche First Lien Term Loan		L + 850 (100 Floor)	⁽⁸⁾		9.50	%		09/2023		621		612			0.1			575
CHA Holdings, Inc.⁽³⁾	Senior Secured First Lien Delayed Draw Term Loan		L + 450 (100 Floor)	⁽⁸⁾		5.57	%		04/2025		1,018		1,015			0.2			942
CHA Holdings, Inc.⁽³⁾	Senior Secured First Lien Term Loan		L + 450 (100 Floor)	⁽⁸⁾		5.57	%		04/2025		4,830		4,812			0.9			4,468

See accompanying notes

CRESCENT CAPITAL BDC, INC.

Consolidated Schedule of Investments (Unaudited)

June 30, 2020

(in thousands, except share and per share data)


Company/Security/Country	Investment Type	Interest Term *			Interest Rate			Maturity / Dissolution Date		Principal Amount, Par Value or Shares		Cost			Percentage of Net Assets **			Fair Value
DFS Intermediate Holdings, LLC^{(3) (5) (6)}	Senior Secured First Lien Delayed Draw Term Loan		L + 525 (100 Floor)	⁽⁷⁾		6.25	%		03/2022	$	3,455	$	3,423			0.7	%	$	3,389
DFS Intermediate Holdings, LLC^{(3) (5) (6)}	Senior Secured First Lien Revolver		L + 525 (100 Floor)	⁽⁷⁾		6.25	%		03/2022		218		199			—			183
DFS Intermediate Holdings, LLC⁽³⁾	Senior Secured First Lien Term Loan		L + 525 (100 Floor)	⁽⁷⁾		6.25	%		03/2022		8,748		8,681			1.7			8,595
Digital Room Holdings, Inc.	Senior Secured First Lien Term Loan		L + 500	⁽¹⁵⁾		6.07	%		05/2026		6,930		6,613			1.1			5,544
GH Holding Company⁽³⁾	Senior Secured First Lien Term Loan		L + 450	⁽⁷⁾		4.68	%		02/2023		1,466		1,462			0.3			1,425
GI Revelation Acquisition, LLC	Senior Secured First Lien Term Loan		L + 500	⁽⁷⁾		5.18	%		04/2025		7,359		7,331			1.3			6,739
Hepaco, LLC^{(3) (6) (10)}	Senior Secured First Lien Delayed Draw Term Loan		L + 500 (100 Floor)	⁽⁷⁾		6.00	%		08/2024		4,177		4,148			0.8			3,988
Hepaco, LLC^{(3) (5) (6)}	Senior Secured First Lien Revolver		L + 500 (100 Floor)	⁽⁷⁾		6.00	%		08/2024		138		136			—			97
Hepaco, LLC⁽³⁾	Senior Secured First Lien Term Loan		L + 500 (100 Floor)	⁽⁷⁾		6.00	%		08/2024		5,125		5,089			1.0			4,899
Hsid Acquisition, LLC^{(3) (4) (6) (10)}	Senior Secured First Lien Delayed Draw Term Loan								01/2026		—		(54	)		—			(119	)
Hsid Acquisition, LLC^{(3) (5) (6)}	Senior Secured First Lien Revolver		L + 450 (100 Floor)	⁽⁸⁾		5.50	%		01/2026		525		511			0.1			494
Hsid Acquisition, LLC⁽³⁾	Senior Secured First Lien Term Loan		L + 450 (100 Floor)	⁽⁸⁾		5.50	%		01/2026		4,339		4,257			0.8			4,161
Impact Group, LLC⁽³⁾	Senior Secured First Lien Term Loan		L + 737 (100 Floor)	⁽⁷⁾		8.37	%		06/2023		7,078		5,484			1.1			5,559
Impact Sales, LLC⁽³⁾	Senior Secured First Lien Delayed Draw Term Loan		L + 738 (100 Floor)	⁽⁷⁾		8.38	%		06/2023		6,680		5,177			1.0			5,247
Institutional Shareholder Services, Inc.⁽³⁾	Senior Secured First Lien Term Loan		L + 450	⁽¹⁵⁾		5.57	%		03/2026		2,963		2,921			0.5			2,767
Institutional Shareholder Services, Inc.⁽³⁾	Senior Secured Second Lien Term Loan		L + 850	⁽¹⁵⁾		8.81	%		03/2027		2,000		1,923			0.3			1,750
ISS Compressors Industries, Inc.^{(3) (5) (6)}	Senior Secured First Lien Revolver		L + 550 (100 Floor)	⁽¹⁵⁾		6.70	%		02/2026		812		805			0.2			785
ISS Compressors Industries, Inc.⁽³⁾	Senior Secured First Lien Term Loan		L + 550 (100 Floor)	⁽⁸⁾		6.76	%		02/2026		9,144		9,058			1.7			8,836
Jordan Healthcare, Inc.⁽³⁾	Senior Secured First Lien Delayed Draw Term Loan		L + 600 (100 Floor)	⁽⁸⁾		7.00	%		07/2022		695		691			0.1			682
Jordan Healthcare, Inc.^{(3) (5)}	Senior Secured First Lien Revolver		L + 600 (100 Floor)	⁽⁸⁾		7.00	%		07/2022		450		448			0.1			442
Jordan Healthcare, Inc.⁽³⁾	Senior Secured First Lien Term Loan		L + 600 (100 Floor)	⁽⁸⁾		7.00	%		07/2022		4,001		3,982			0.8			3,931
MHS Acquisition Holdings, LLC⁽³⁾	Senior Secured Second Lien Delayed Draw Term Loan		L + 875 (100 Floor)	⁽¹⁵⁾		9.82	%		03/2025		467		461			0.1			442
MHS Acquisition Holdings, LLC⁽³⁾	Senior Secured Second Lien Term Loan		L + 875 (100 Floor)	⁽¹⁵⁾		9.82	%		03/2025		8,102		7,942			1.5			7,677
MHS Acquisition Holdings, LLC⁽³⁾	Unsecured Debt		1350 PIK	⁽⁹⁾		13.50	%		03/2026		254		252			—			240
MHS Acquisition Holdings, LLC⁽³⁾	Unsecured Debt		1350 PIK	⁽⁹⁾		13.50	%		03/2026		764		756			0.1			719
Pinstripe Holdings, LLC⁽³⁾	Unitranche First Lien Term Loan		L + 600 (100 Floor)	⁽⁷⁾		7.08	%		01/2025		9,875		9,646			1.9			9,508
Pye-Barker Fire & Safety, LLC^{(3) (6) (16)}	Unitranche First Lien Delayed Draw Term Loan		L + 575 (100 Floor)	^(8) (11)		6.75	%		11/2025		1,496		1,430			0.3			1,394
Pye-Barker Fire & Safety, LLC⁽³⁾	Unitranche First Lien Term Loan		L + 575 (100 Floor)	⁽⁸⁾		6.75	%		11/2025		10,074		9,820			1.9			9,800
Receivable Solutions, Inc.^{(3) (5) (6)}	Senior Secured First Lien Revolver		L + 500 (100 Floor)	⁽¹⁵⁾		6.00	%		10/2024		120		116			—			111

See accompanying notes

CRESCENT CAPITAL BDC, INC.

Consolidated Schedule of Investments (Unaudited)

June 30, 2020

(in thousands, except share and per share data)


Company/Security/Country	Investment Type	Interest Term *			Interest Rate			Maturity / Dissolution Date		Principal Amount, Par Value or Shares		Cost			Percentage of Net Assets **			Fair Value
Receivable Solutions, Inc.⁽³⁾	Senior Secured First Lien Term Loan		L + 500 (100 Floor)	⁽¹⁵⁾		6.07	%		10/2024	$	2,184	$	2,150			0.4	%	$	2,120
SavATree, LLC^{(3) (6) (10)}	Senior Secured First Lien Delayed Draw Term Loan		L + 525 (100 Floor)	⁽⁸⁾		6.25	%		06/2022		711		703			0.1			692
SavATree, LLC^{(3) (5) (6)}	Senior Secured First Lien Revolver		L + 525 (100 Floor)	⁽⁸⁾		6.25	%		06/2022		361		357			0.1			350
SavATree, LLC⁽³⁾	Senior Secured First Lien Term Loan		L + 525 (100 Floor)	⁽⁸⁾		6.25	%		06/2022		3,928		3,896			0.8			3,845
Spear Education^{(3) (4) (6) (10)}	Senior Secured First Lien Delayed Draw Term Loan								02/2025		—		(29	)		—			(48	)
Spear Education⁽³⁾	Senior Secured First Lien Term Loan		L + 500 (100 Floor)	⁽⁸⁾		6.00	%		02/2025		6,858		6,793			1.3			6,753
TecoStar Holdings, Inc.⁽³⁾	Senior Secured Second Lien Term Loan		L + 850 (100 Floor)	⁽⁸⁾		9.68	%		11/2024		5,000		4,917			1.0			4,849
UP Acquisition Corp.⁽³⁾	Unitranche First Lien Delayed Draw Term Loan		L + 625 (100 Floor)	⁽⁷⁾		7.25	%		05/2024		1,194		1,173			0.2			1,129
UP Acquisition Corp.^{(3) (5) (6)}	Unitranche First Lien Revolver		L + 625 (100 Floor)	⁽⁷⁾		7.25	%		05/2024		391		371			0.1			322
UP Acquisition Corp.⁽³⁾	Unitranche First Lien Term Loan		L + 625 (100 Floor)	⁽⁷⁾		7.25	%		05/2024		4,356		4,285			0.8			4,116
Valet Waste Holdings, Inc.	Senior Secured First Lien Term Loan		L + 375	⁽⁷⁾		3.93	%		09/2025		14,737		14,709			2.7			13,927
Xcentric Mold and Engineering Acquisition Company, LLC⁽³⁾	Senior Secured First Lien Revolver		L + 700 (100 Floor) (including 100 PIK)	⁽⁷⁾		8.00	%		01/2022		707		702			0.1			641
Xcentric Mold and Engineering Acquisition Company, LLC⁽³⁾	Senior Secured First Lien Term Loan		L + 700 (100 Floor) (including 100 PIK)	⁽⁷⁾		8.00	%		01/2022		4,418		4,389			0.8			4,007

											172,246		166,902			31.0			158,299

Consumer Durables & Apparel
EiKo Global, LLC^{(3) (5) (6)}	Senior Secured First Lien Revolver		L + 600 (100 Floor)	⁽⁸⁾		7.00	%		06/2023		300		291			0.1			284
EiKo Global, LLC⁽³⁾	Senior Secured First Lien Term Loan		L + 600 (100 Floor)	⁽⁸⁾		7.00	%		06/2023		3,240		3,197			0.6			3,170

											3,540		3,488			0.7			3,454

Consumer Services
BJH Holdings III Corp.⁽³⁾	Unitranche First Lien Term Loan		L + 575 (100 Floor)	⁽⁸⁾		6.75	%		08/2025		13,647		13,466			2.5			12,692
Cambium Learning Group, Inc.⁽³⁾	Senior Secured Second Lien Term Loan		L + 850	⁽⁸⁾		8.81	%		12/2026		5,000		4,857			0.9			4,475
Colibri Group LLC^{(3) (10)}	Unitranche First Lien Delayed Draw Term Loan		L + 575 (100 Floor)	⁽⁸⁾		6.75	%		05/2025		1,343		1,316			0.3			1,299
Colibri Group LLC^{(3) (5)}	Unitranche First Lien Revolver		L + 575 (100 Floor)	⁽⁷⁾		6.75	%		05/2025		1,000		980			0.2			967
Colibri Group LLC⁽³⁾	Unitranche First Lien Term Loan		L + 575 (100 Floor)	⁽⁸⁾		6.75	%		05/2025		8,168		7,996			1.5			7,899
COP Home Services Holdings, Inc.^(3) (10)	Senior Secured First Lien Delayed Draw Term Loan		L + 450 (100 Floor)	⁽⁸⁾		5.50	%		05/2025		695		683			0.1			670
COP Home Services Holdings, Inc.^{(3) (4) (5) (6)}	Senior Secured First Lien Revolver								05/2025		—		(8	)		—			(17	)
COP Home Services Holdings, Inc.⁽³⁾	Senior Secured First Lien Term Loan		L + 450 (100 Floor)	⁽⁸⁾		5.93	%		05/2025		3,457		3,399			0.7			3,332
HGH Purchaser, Inc.^{(3) (4) (6) (10)}	Unitranche First Lien Delayed Draw Term Loan								11/2025		—		(38	)		—			(102	)
HGH Purchaser, Inc.^{(3) (5) (6)}	Unitranche First Lien Revolver		L + 600 (100 Floor)	⁽⁸⁾		7.00	%		11/2025		355		332			0.1			324
HGH Purchaser, Inc.⁽³⁾	Unitranche First Lien Term Loan		L + 600 (100 Floor)	⁽⁸⁾		7.44	%		11/2025		8,068		7,884			1.5			7,823

See accompanying notes

CRESCENT CAPITAL BDC, INC.

Consolidated Schedule of Investments (Unaudited)

June 30, 2020

(in thousands, except share and per share data)


Company/Security/Country	Investment Type	Interest Term *			Interest Rate			Maturity / Dissolution Date		Principal Amount, Par Value or Shares		Cost			Percentage of Net Assets **			Fair Value
JLL XDD, Inc.⁽³⁾	Senior Secured First Lien Term Loan		L + 475 (100 Floor)	⁽¹⁵⁾		5.82	%		12/2023	$	2,123	$	2,081			0.4	%	$	2,074
Learn-It Systems, LLC^{(3) (6)}	Senior Secured First Lien Delayed Draw Term Loan		L + 450 (50 Floor)	⁽⁸⁾		5.95	%		03/2025		647		586			0.1			497
Learn-It Systems, LLC^{(3) (4) (5) (6)}	Senior Secured First Lien Revolver								03/2025		—		(14	)		—			(35	)
Learn-It Systems, LLC⁽³⁾	Senior Secured First Lien Term Loan		L + 450 (50 Floor)	⁽⁸⁾		5.00	%		03/2025		4,345		4,243			0.8			4,095
New Mountain Learning⁽³⁾	Senior Secured First Lien Delayed Draw Term Loan		L + 800 (100 Floor) (including 200 PIK)	⁽⁸⁾		7.00	%		03/2024		365		361			0.1			360
New Mountain Learning^{(3) (5)}	Senior Secured First Lien Delayed Draw Term Loan		L + 800 (100 Floor) (including 200 PIK)	⁽⁸⁾		9.00	%		03/2024		302		302			0.1			297
New Mountain Learning^{(3) (5) (6)}	Senior Secured First Lien Revolver		L + 800 (100 Floor) (including 200 PIK)	⁽⁸⁾		9.00	%		03/2024		76		75			—			74
New Mountain Learning⁽³⁾	Senior Secured First Lien Term Loan		L + 800 (100 Floor) (including 200 PIK)	⁽⁸⁾		9.00	%		03/2024		1,802		1,778			0.3			1,774
Pre-Paid Legal Services, Inc.	Senior Secured Second Lien Term Loan		L + 750	⁽⁷⁾		7.68	%		05/2026		9,333		9,254			1.7			8,843
Southern Technical Institute, Inc.^{(3) (13) (14)}	Senior Secured Second Lien Term Loan								12/2021		3,985		—			—			—
Teaching Strategies LLC^{(3) (5) (6)}	Unitranche First Lien Revolver		L + 600 (100 Floor)	⁽⁸⁾		7.00	%		05/2024		182		172			—			166
Teaching Strategies LLC⁽³⁾	Unitranche First Lien Term Loan		L + 600 (100 Floor)	⁽⁸⁾		7.00	%		05/2024		9,187		9,027			1.7			8,941
United Language Group, Inc.^{(3) (5)}	Senior Secured First Lien Revolver		L + 675 (100 Floor)	⁽⁷⁾		7.75	%		12/2021		400		396			0.1			369
United Language Group, Inc.⁽³⁾	Senior Secured First Lien Term Loan		L + 675 (100 Floor)	⁽⁷⁾		7.75	%		12/2021		4,665		4,627			0.8			4,306
Vistage Worldwide, Inc.	Senior Secured First Lien Term Loan		L + 400 (100 Floor)	⁽⁸⁾		5.00	%		02/2025		6,440		6,450			1.2			5,909
WeddingWire, Inc.⁽³⁾	Senior Secured Second Lien Term Loan		L + 825	⁽⁸⁾		8.56	%		12/2026		5,000		4,952			0.9			4,775
Wrench Group LLC⁽³⁾	Senior Secured Second Lien Term Loan		L + 788	⁽⁸⁾		8.18	%		04/2027		2,500		2,433			0.5			2,374

											93,085		87,590			16.5			84,181

Diversified Financials
CC SAG Acquisition Corp.^{(3) (6) (10)}	Unitranche First Lien Delayed Draw Term Loan		L + 550 (100 Floor)	⁽¹⁷⁾		6.50	%		09/2025		401		370			0.1			376
CC SAG Acquisition Corp.^{(3) (4) (5) (6)}	Unitranche First Lien Revolver								09/2025		—		(21	)		—			(12	)
CC SAG Acquisition Corp.⁽³⁾	Unitranche First Lien Term Loan		L + 550 (100 Floor)	⁽⁸⁾		6.50	%		09/2025		7,146		6,998			1.4			7,067
GGC Aperio Holdings, L.P.⁽³⁾	Unitranche First Lien Term Loan		L + 500	⁽⁸⁾		5.31	%		10/2024		8,405		8,392			1.5			7,878
Goldentree Loan Management US CLO 2, Ltd.^(3) (18)	CLO, Series 2017-2A, Class E		L + 470			5.84	%		11/2030		2,000		1,897			0.3			1,656

											17,952		17,636			3.3			16,965

Energy
BJ Services, LLC^{(3) (13) (19)}	Unitranche First Lien - Last Out Term Loan								01/2023		8,075		8,014			1.3			6,666
BJ Services, LLC⁽³⁾	Unitranche First Lien Term Loan		L + 700 (150 Floor)	⁽⁸⁾		8.50	%		01/2023		4,750		4,718			0.9			4,475

See accompanying notes

CRESCENT CAPITAL BDC, INC.

Consolidated Schedule of Investments (Unaudited)

June 30, 2020

(in thousands, except share and per share data)


Company/Security/Country	Investment Type	Interest Term *			Interest Rate			Maturity / Dissolution Date		Principal Amount, Par Value or Shares		Cost			Percentage of Net Assets **			Fair Value
Black Diamond Oilfield Rentals, LLC^(3) (8)	Senior Secured First Lien Term Loan		L + 650 (100 Floor)			7.50	%		12/2020	$	10,386	$	10,226			1.8	%	$	9,184

											23,211		22,958			4.0			20,325

Food & Staples Retailing
Isagenix International, LLC	Senior Secured First Lien Term Loan		L + 575 (100 Floor)	⁽⁸⁾		6.75	%		06/2025		6,291		6,266			0.5			2,507
PetIQ, LLC^{(3) (18)}	Senior Secured First Lien Term Loan		L + 500 (100 Floor)	⁽⁷⁾		6.00	%		07/2025		14,887		14,767			2.9			14,587

											21,178		21,033			3.4			17,094

Food, Beverage & Tobacco
Mann Lake Ltd.^{(3) (5) (6)}	Senior Secured First Lien Revolver		L + 750 (100 Floor)	⁽⁸⁾		8.50	%		10/2024		300		287			—			246
Mann Lake Ltd.⁽³⁾	Senior Secured First Lien Term Loan		L + 750 (100 Floor)	⁽⁸⁾		8.50	%		10/2024		3,846		3,787			0.7			3,615
Manna Pro Products, LLC^{(3) (6) (10)}	Unitranche First Lien Delayed Draw Term Loan		L + 600 (100 Floor)	⁽⁷⁾		7.00	%		12/2023		1,018		1,013			0.2			941
Manna Pro Products, LLC⁽³⁾	Unitranche First Lien Term Loan		L + 600 (100 floor)	⁽⁷⁾		7.00	%		12/2023		2,442		2,417			0.5			2,381
Manna Pro Products, LLC⁽³⁾	Unitranche First Lien Term Loan		L + 600 (100 Floor)	⁽⁷⁾		7.00	%		12/2023		4,392		4,346			0.8			4,281

											11,998		11,850			2.2			11,464

Health Care Equipment & Services
Abode Healthcare, Inc.^{(3) (5) (6)}	Senior Secured First Lien Revolver		L + 525 (100 Floor)	⁽⁸⁾		6.25	%		08/2025		232		212			—			222
Abode Healthcare, Inc.⁽³⁾	Senior Secured First Lien Term Loan		L + 525 (100 Floor)	⁽⁸⁾		6.25	%		08/2025		4,764		4,680			0.9			4,722
Aegis Sciences Corporation	Senior Secured First Lien Term Loan		L + 550 (100 Floor)	⁽⁸⁾		6.50	%		05/2025		7,366		6,972			1.2			6,029
Ameda, Inc.^{(3) (5) (6)}	Senior Secured First Lien Revolver		L + 700 (100 Floor)	⁽⁷⁾		8.00	%		09/2022		188		185			—			162
Ameda, Inc.⁽³⁾	Senior Secured First Lien Term Loan		L + 700 (100 Floor)	⁽⁷⁾		8.00	%		09/2022		2,266		2,245			0.4			2,072
Avalign Technologies, Inc.⁽³⁾	Senior Secured First Lien Term Loan		L + 450	⁽¹⁵⁾		5.57	%		12/2025		16,923		16,783			3.0			15,484
BAART Programs, Inc.^{(3) (20)}	Senior Secured Second Lien Delayed Draw Term Loan		L + 800 (100 Floor)	⁽¹²⁾		9.96	%		03/2025		1,000		957			0.2			937
BAART Programs, Inc.⁽³⁾	Senior Secured Second Lien Term Loan		L + 825 (100 Floor)	⁽¹²⁾		10.21	%		03/2025		7,000		6,700			1.3			6,559
Centria Subsidiary Holdings, LLC^{(3) (5) (6)}	Unitranche First Lien Revolver		P + 500	⁽¹¹⁾		8.25	%		12/2025		947		894			0.2			909
Centria Subsidiary Holdings, LLC⁽³⁾	Unitranche First Lien Term Loan		L + 600 (100 Floor)	⁽⁸⁾		7.00	%		12/2025		11,812		11,485			2.3			11,581
CRA MSO, LLC^{(3) (5) (6)}	Senior Secured First Lien Revolver		L + 550 (100 Floor)	⁽⁷⁾		6.50	%		12/2023		140		137			—			135
CRA MSO, LLC⁽³⁾	Senior Secured First Lien Term Loan		L + 550(100 Floor)	⁽⁷⁾		6.50	%		12/2023		1,231		1,214			0.2			1,198
ExamWorks Group, Inc.⁽³⁾	Senior Secured Second Lien Term Loan		L + 725 (100 Floor)	⁽¹⁵⁾		7.61	%		07/2024		5,735		5,631			1.1			5,533
GrapeTree Medical Staffing, LLC^{(3) (4) (5) (6)}	Senior Secured First Lien Revolver								10/2022		—		(4	)		—			(6	)
GrapeTree Medical Staffing, LLC⁽³⁾	Senior Secured First Lien Term Loan		L + 525 (100 Floor)	⁽⁷⁾		6.25	%		10/2022		1,653		1,639			0.3			1,631
GrapeTree Medical Staffing, LLC⁽³⁾	Senior Secured First Lien Term Loan		L + 525 (100 Floor)	⁽⁷⁾		6.25	%		10/2022		1,390		1,370			0.3			1,370
HCAT Acquisition, Inc.⁽³⁾	Unitranche First Lien Delayed Draw Term Loan		L + 825 (100 Floor) (including 325 PIK)	⁽⁸⁾		9.25	%		11/2022		2,357		2,242			0.4			2,197
HCAT Acquisition, Inc.^{(3) (21)}	Unitranche First Lien Revolver		L + 825 (100 Floor) (including 325 PIK)	⁽⁸⁾		9.25	%		11/2022		3,856		3,668			0.7			3,593

See accompanying notes

CRESCENT CAPITAL BDC, INC.

Consolidated Schedule of Investments (Unaudited)

June 30, 2020

(in thousands, except share and per share data)


Company/Security/Country	Investment Type	Interest Term *			Interest Rate			Maturity / Dissolution Date		Principal Amount, Par Value or Shares		Cost			Percentage of Net Assets **			Fair Value

HCAT Acquisition, Inc.⁽³⁾	Unitranche First Lien Term Loan		L + 825 (100 Floor) (including 325 PIK)	⁽⁸⁾		9.25	%		11/2022	$	14,983	$	14,253			2.7	%	$	13,963
Lightspeed Buyer, Inc.^{(3) (4) (6) (10)}	Unitranche First Lien Delayed Draw Term Loan								02/2026		—		(17	)		—			(44	)
Lightspeed Buyer, Inc.^{(3) (5)}	Unitranche First Lien Revolver		L + 575 (100 Floor)	⁽⁷⁾		6.75	%		02/2026		1,050		1,030			0.2			1,024
Lightspeed Buyer, Inc.⁽³⁾	Unitranche First Lien Term Loan		L + 575 (100 Floor)	⁽⁷⁾		6.75	%		02/2026		9,975		9,787			1.9			9,731
MDVIP, Inc.⁽³⁾	Senior Secured First Lien Term Loan		L + 425 (100 Floor)	⁽⁷⁾		5.25	%		11/2024		9,610		9,610			1.8			9,033
Medsurant Holdings, LLC^{(3) (9)}	Senior Secured Second Lien Term Loan		1225 + 75 PIK			13.00	%		03/2022		7,945		7,892			1.5			7,611
NMN Holdings III Corp.^{(3) (22)}	Senior Secured Second Lien Delayed Draw Term Loan		L + 775	⁽⁷⁾		7.93	%		11/2026		1,667		1,622			0.3			1,587
NMN Holdings III Corp.⁽³⁾	Senior Secured Second Lien Term Loan		L + 775	⁽⁷⁾		7.93	%		11/2026		7,222		7,038			1.3			6,879
NMSC Holdings, Inc.⁽³⁾	Senior Secured Second Lien Term Loan		1200 PIK	⁽¹⁷⁾		12.00	%		10/2023		4,307		4,213			0.8			3,880
Omni Ophthalmic Management Consultants, LLC^{(3) (4) (6) (10)}	Senior Secured First Lien Delayed Draw Term Loan								05/2023		—		(4	)		—			(41	)
Omni Ophthalmic Management Consultants, LLC^(3) (5)	Senior Secured First Lien Revolver		L + 750 (100 Floor)	⁽⁷⁾		8.50	%		05/2023		850		842			0.2			794
Omni Ophthalmic Management Consultants, LLC⁽³⁾	Senior Secured First Lien Term Loan		L + 750 (100 Floor)	⁽⁷⁾		8.50	%		05/2023		6,912		6,844			1.3			6,460
Pinnacle Treatment Centers, Inc.^{(3) (5) (6)}	Unitranche First Lien Revolver		P + 500	⁽¹¹⁾		8.25	%		12/2022		200		195			—			191
Pinnacle Treatment Centers, Inc.^{(3) (4) (6) (10)}	Unitranche First Lien Term Loan								12/2022		—		(7	)		—			(18	)
Pinnacle Treatment Centers, Inc.⁽³⁾	Unitranche First Lien Term Loan		L + 625 (100 Floor)	⁽⁸⁾		7.25	%		12/2022		8,265		8,194			1.6			8,133
Professional Physical Therapy⁽³⁾	Senior Secured First Lien Term Loan		L + 675 (100 Floor) (including 75 PIK)	⁽⁸⁾		7.84	%		12/2022		8,957		8,681			1.2			6,113
PT Network, LLC^{(3) (4) (5) (6)}	Senior Secured First Lien Revolver								11/2023		—		(1	)		—			(30	)
PT Network, LLC⁽³⁾	Senior Secured First Lien Term Loan		L + 750 (100 Floor) (including 200 PIK)	⁽¹⁵⁾		8.73	%		11/2023		4,764		4,755			0.9			4,403
Safco Dental Supply, LLC^{(3) (5) (6)}	Unitranche First Lien Revolver		L + 500 (100 Floor)	⁽⁸⁾		6.00	%		06/2025		300		291			0.1			272
Safco Dental Supply, LLC⁽³⁾	Unitranche First Lien Term Loan		L + 500 (100 Floor)	⁽⁸⁾		6.00	%		06/2025		4,484		4,417			0.8			4,272
Smile Brands, Inc.^{(3) (6) (10)}	Senior Secured First Lien Delayed Draw Term Loan		L + 450	⁽¹⁵⁾		6.28	%		10/2024		604		598			0.1			563
Smile Brands, Inc.^{(3) (4) (5) (6)}	Senior Secured First Lien Revolver								10/2023		—		(2	)		—			(16	)
Smile Brands, Inc.⁽³⁾	Senior Secured First Lien Term Loan		L + 450	⁽¹⁵⁾		6.28	%		10/2024		2,069		2,053			0.4			1,961
Smile Doctors LLC^{(3) (6) (10)}	Senior Secured First Lien Delayed Draw Term Loan		L + 600 (100 Floor)	⁽⁸⁾		7.00	%		10/2022		3,773		3,773			0.7			3,459
Smile Doctors LLC^{(3) (5)}	Senior Secured First Lien Revolver		L + 600 (100 Floor)	⁽⁸⁾		7.00	%		10/2022		1,070		1,070			0.2			1,040

See accompanying notes

CRESCENT CAPITAL BDC, INC.

Consolidated Schedule of Investments (Unaudited)

June 30, 2020

(in thousands, except share and per share data)


Company/Security/Country	Investment Type	Interest Term *			Interest Rate			Maturity / Dissolution Date		Principal Amount, Par Value or Shares		Cost			Percentage of Net Assets **			Fair Value
Smile Doctors LLC⁽³⁾	Senior Secured First Lien Term Loan		L + 600 (100 Floor)	⁽⁸⁾		7.00	%		10/2022	$	5,481	$	5,456			1.0	%	$	5,330
Unifeye Vision Partners^{(3) (4) (6) (23)}	Senior Secured First Lien Delayed Draw Term Loan								09/2025		—		(26	)		—			(102	)
Unifeye Vision Partners^{(3) (5)}	Senior Secured First Lien Revolver		P + 375	⁽¹¹⁾		7.00	%		09/2025		1,700		1,670			0.3			1,643
Unifeye Vision Partners⁽³⁾	Senior Secured First Lien Term Loan		L + 475 (100 Floor)	⁽⁸⁾		5.75	%		09/2025		5,373		5,278			1.0			5,194
Zest Acquisition Corp.⁽³⁾	Senior Secured First Lien Term Loan		L + 350	⁽¹⁵⁾		4.73	%		03/2025		8,603		8,604			1.5			7,528

											189,024		185,119			34.3			175,141

Household & Personal Products
Tranzonic^{(3) (4) (5) (6)}	Senior Secured First Lien Revolver								03/2023		—		(3	)		—			(10	)
Tranzonic⁽³⁾	Senior Secured First Lien Term Loan		L + 475 (100 Floor)	⁽⁷⁾		5.75	%		03/2023		3,833		3,810			0.7			3,762

											3,833		3,807			0.7			3,752

Insurance
Comet Acquisition, Inc.⁽³⁾	Senior Secured Second Lien Term Loan		L + 750	⁽⁸⁾		7.81	%		10/2026		4,632		4,622			0.8			3,937
Integrity Marketing Acquisition, LLC⁽³⁾	Unitranche First Lien Delayed Draw Term Loan		L + 575 (100 Floor)	⁽⁸⁾		6.97	%		08/2025		5,094		4,973			1.0			4,938
Integrity Marketing Acquisition, LLC^(3) (10)	Unitranche First Lien Delayed Draw Term Loan		L + 575 (100 Floor)	⁽⁸⁾		6.75	%		08/2025		3,080		3,005			0.6			2,986
Integrity Marketing Acquisition, LLC^{(3) (4) (5) (6)}	Unitranche First Lien Revolver								08/2025		—		(43	)		—			(43	)
Integrity Marketing Acquisition, LLC⁽³⁾	Unitranche First Lien Term Loan		L + 575 (100 Floor)	⁽⁸⁾		6.75	%		08/2025		12,944		12,657			2.5			12,548
Integro Parent, Inc.^{(3) (18)}	Senior Secured First Lien Term Loan		L + 575 (100 Floor)	⁽⁷⁾		6.75	%		10/2022		476		473			0.1			458
Integro Parent, Inc.^{(3) (18)}	Senior Secured Second Lien Delayed Draw Term Loan		L + 925 (100 Floor)	⁽⁷⁾		10.25	%		10/2023		380		377			0.1			370
Integro Parent, Inc.^{(3) (18)}	Senior Secured Second Lien Term Loan		L + 925 (100 Floor)	⁽⁷⁾		10.25	%		10/2023		2,916		2,885			0.5			2,834
The Hilb Group, LLC^{(3) (6) (10)}	Unitranche First Lien Delayed Draw Term Loan		L + 575 (100 Floor)	⁽⁸⁾		6.75	%		12/2026		188		174			—			188
The Hilb Group, LLC^{(3) (5) (6)}	Unitranche First Lien Revolver		L + 575 (100 Floor)	⁽⁸⁾		6.75	%		12/2025		231		224			—			231
The Hilb Group, LLC⁽³⁾	Unitranche First Lien Term Loan		L + 575 (100 Floor)	⁽⁸⁾		6.75	%		12/2026		3,621		3,537			0.7			3,621

											33,562		32,884			6.3			32,068

Materials
Kestrel Parent, LLC^{(3) (4) (6) (21)}	Unitranche First Lien Revolver								11/2023		—		(15	)		—			(11	)
Kestrel Parent, LLC⁽³⁾	Unitranche First Lien Term Loan		L + 575 (100 Floor)	⁽⁸⁾		6.75	%		11/2025		6,706		6,570			1.3			6,622
Maroon Group, LLC ^{(3) (10)}	Unitranche First Lien Delayed Draw Term Loan		L + 675 (100 Floor)	⁽⁸⁾		7.75	%		08/2022		1,250		1,244			0.2			1,229
Maroon Group, LLC ^{(3) (5) (6)}	Unitranche First Lien Revolver		L + 675 (100 Floor)	⁽⁷⁾		7.75	%		08/2022		349		347			0.1			343
Maroon Group, LLC ⁽³⁾	Unitranche First Lien Term Loan		L + 675 (100 Floor)	⁽⁸⁾		7.75	%		08/2022		2,698		2,683			0.5			2,654

											11,003		10,829			2.1			10,837

See accompanying notes

CRESCENT CAPITAL BDC, INC.

Consolidated Schedule of Investments (Unaudited)

June 30, 2020

(in thousands, except share and per share data)


Company/Security/Country	Investment Type	Interest Term *			Interest Rate			Maturity / Dissolution Date		Principal Amount, Par Value or Shares		Cost			Percentage of Net Assets **			Fair Value
Pharmaceuticals, Biotechnology & Life Sciences
Pharmalogic Holdings Corp.⁽³⁾	Senior Secured Second Lien Delayed Draw Term Loan		L + 800	⁽⁷⁾		8.18	%		12/2023	$	4,760	$	4,728			0.9	%	$	4,583
Pharmalogic Holdings Corp.⁽³⁾	Senior Secured Second Lien Term Loan		L + 800	⁽⁷⁾		8.18	%		12/2023		5,880		5,840			1.1			5,661
Pharmalogic Holdings Corp.⁽³⁾	Senior Secured Second Lien Term Loan		L + 800	⁽⁷⁾		8.18	%		12/2023		5,460		5,423			1.0			5,256
Trinity Partners, LLC^{(3) (5) (6)}	Senior Secured First Lien Revolver		P + 400	⁽¹¹⁾		7.25	%		02/2023		225		220			0.1			215
Trinity Partners, LLC⁽³⁾	Senior Secured First Lien Term Loan		L + 500 (100 Floor)	⁽⁷⁾		6.00	%		02/2023		3,724		3,692			0.7			3,639

											20,049		19,903			3.8			19,354

Retailing
Palmetto Moon LLC,⁽³⁾	Senior Secured First Lien Term Loan		1150 + 250 PIK	⁽⁹⁾		14.00	%		10/2021		4,240		3,457			0.7			3,674
Slickdeals Holdings, LLC^{(3) (4) (6) (14) (21)}	Unitranche First Lien Revolver								06/2023		—		(12	)		—			(7	)
Slickdeals Holdings, LLC^{(3) (14)}	Unitranche First Lien Term Loan		L + 625 (100 Floor)	⁽⁸⁾		7.25	%		06/2024		14,603		14,257			2.9			14,468

											18,843		17,702			3.6			18,135

Software & Services
Affinitiv, Inc.^{(3) (5) (6)}	Unitranche First Lien Revolver		L + 525 (100 Floor)	⁽⁸⁾		6.25	%		08/2024		283		271			0.1			238
Affinitiv, Inc.⁽³⁾	Unitranche First Lien Term Loan		L + 525 (100 Floor)	⁽⁸⁾		6.25	%		08/2024		6,468		6,371			1.2			6,120
Ansira Partners, Inc.^{(3) (13)}	Unitranche First Lien Delayed Draw Term Loan								12/2024		947		931			0.1			634
Ansira Partners, Inc.^{(3) (13)}	Unitranche First Lien Term Loan								12/2024		6,855		6,687			0.9			4,585
Avaap USA LLC⁽³⁾	Senior Secured First Lien Delayed Draw Term Loan		L + 525 (100 Floor)	⁽⁷⁾		6.25	%		03/2023		346		341			0.1			339
Avaap USA LLC^{(3) (5) (6)}	Senior Secured First Lien Revolver		L + 525 (100 Floor)	⁽⁷⁾		6.25	%		03/2023		130		121			—			118
Avaap USA LLC⁽³⁾	Senior Secured First Lien Term Loan		L + 525 (100 Floor)	⁽⁷⁾		6.25	%		03/2023		3,788		3,737			0.7			3,718
Benesys, Inc.^{(3) (5) (6)}	Senior Secured First Lien Revolver		L + 425 (100 Floor)	⁽⁷⁾		5.25	%		10/2024		90		88			—			82
Benesys, Inc.⁽³⁾	Senior Secured First Lien Term Loan		L + 425 (100 Floor)	⁽⁷⁾		5.25	%		10/2024		1,421		1,405			0.3			1,342
C-4 Analytics, LLC^{(3) (4) (5) (6)}	Senior Secured First Lien Revolver								08/2023		—		(5	)		—			(11	)
C-4 Analytics, LLC⁽³⁾	Senior Secured First Lien Term Loan		L + 475 (100 Floor)	⁽⁷⁾		5.75	%		08/2023		9,969		9,869			1.9			9,790
CAT Buyer, LLC^{(3) (4) (5) (6)}	Unitranche First Lien Revolver								04/2024		—		(10	)		—			(14	)
CAT Buyer, LLC⁽³⁾	Unitranche First Lien Term Loan		L + 550 (100 Floor)	⁽⁷⁾		6.50	%		04/2024		6,271		6,174			1.2			6,111
Claritas, LLC^{(3) (5) (6)}	Senior Secured First Lien Revolver		L + 600 (100 Floor)	⁽⁷⁾		7.00	%		12/2023		218		215			—			215
Claritas, LLC⁽³⁾	Senior Secured First Lien Term Loan		L + 600 (100 Floor)	⁽⁸⁾		7.00	%		12/2023		1,107		1,098			0.2			1,099
List Partners, Inc.^{(3) (4) (5) (6)}	Senior Secured First Lien Revolver								01/2023		—		(4	)		—			(8	)
List Partners, Inc.⁽³⁾	Senior Secured First Lien Term Loan		L + 500 (100 Floor)	⁽⁷⁾		6.00	%		01/2023		4,519		4,469			0.9			4,438
MRI Software LLC^{(4) (5) (6)}	Unitranche First Lien Delayed Draw Term Loan								02/2026		—		(12	)		—			(49	)
MRI Software LLC^{(3) (4) (5) (6)}	Unitranche First Lien Revolver								02/2026		—		(18	)		—			(48	)
MRI Software LLC	Unitranche First Lien Term Loan		L + 550 (100 Floor)	⁽¹⁵⁾		6.57	%		02/2026		17,390		17,143			3.3			16,738

See accompanying notes

CRESCENT CAPITAL BDC, INC.

Consolidated Schedule of Investments (Unaudited)

June 30, 2020

(in thousands, except share and per share data)


Company/Security/Country	Investment Type	Interest Term *			Interest Rate			Maturity / Dissolution Date		Principal Amount, Par Value or Shares		Cost			Percentage of Net Assets **			Fair Value
Ontario Systems, LLC^{(3) (4) (6) (10)}	Unitranche First Lien Delayed Draw Term Loan								08/2025	$	—	$	(5	)		—	%	$	(25	)
Ontario Systems, LLC^{(3) (5) (6)}	Unitranche First Lien Revolver		P + 450	⁽¹¹⁾		7.75	%		08/2025		100		96			—			89
Ontario Systems, LLC⁽³⁾	Unitranche First Lien Term Loan		L + 550 (100 Floor)	⁽⁷⁾		6.50	%		08/2025		3,226		3,197			0.6			3,154
Perforce Software, Inc.⁽³⁾	Senior Secured Second Lien Term Loan		L + 800	⁽⁷⁾		8.18	%		07/2027		5,000		4,976			1.0			5,000
Prism Bidco, Inc.^{(3) (4) (5) (6)}	Unitranche First Lien Revolver								06/2026		—		(25	)		—			—
Prism Bidco, Inc.⁽³⁾	Unitranche First Lien Term Loan		L + 700 (100 Floor)	⁽⁸⁾		8.00	%		06/2026		7,500		7,276			1.5			7,500
Right Networks, LLC^{(3) (4) (5) (6)}	Unitranche First Lien Revolver								11/2024		—		(5	)		—			(2	)
Right Networks, LLC⁽³⁾	Unitranche First Lien Term Loan		L + 600 (100 Floor)	⁽⁷⁾		7.00	%		11/2024		9,694		9,501			1.9			9,595
Ruffalo Noel Levitz, LLC^{(3) (5) (6)}	Unitranche First Lien Revolver		L + 600 (100 Floor)	⁽⁸⁾		7.00	%		05/2022		240		238			—			231
Ruffalo Noel Levitz, LLC⁽³⁾	Unitranche First Lien Term Loan		L + 600 (100 Floor)	⁽⁸⁾		7.00	%		05/2022		2,518		2,496			0.5			2,445
SMS Systems Maintenance Services, Inc.^(3) (13)	Senior Secured Second Lien Term Loan								10/2024		6,172		4,287			0.2			1,088
SMS Systems Maintenance Services, Inc.^(3) (13)	Senior Secured Second Lien Term Loan								10/2024		2,859		2,634			0.4			2,127
SMS Systems Maintenance Services, Inc.^(3) (13)	Senior Secured Second Lien Term Loan								10/2024		8,078		5,619			0.3			1,424
Transportation Insight, LLC^{(3) (10)}	Senior Secured First Lien Delayed Draw Term Loan		L + 450	⁽⁸⁾		4.81	%		12/2024		1,285		1,276			0.2			1,206
Transportation Insight, LLC^{(3) (5) (6)}	Senior Secured First Lien Revolver		L + 450	⁽⁷⁾		4.68	%		12/2024		638		632			0.1			591
Transportation Insight, LLC⁽³⁾	Senior Secured First Lien Term Loan		L + 450	⁽⁸⁾		4.81	%		12/2024		5,168		5,129			1.0			4,848
Trident Technologies, LLC⁽³⁾	Senior Secured First Lien Term Loan		L + 600 (150 Floor)	⁽⁸⁾		7.50	%		12/2025		14,925		14,717			2.9			14,626
Winxnet Holdings LLC⁽³⁾	Unitranche First Lien Delayed Draw Term Loan		L + 550 (100 Floor)	⁽⁷⁾		6.50	%		06/2023		644		634			0.1			628
Winxnet Holdings LLC^{(3) (5) (6)}	Unitranche First Lien Revolver		L + 550 (100 Floor)	⁽⁷⁾		6.50	%		06/2023		240		235			—			230
Winxnet Holdings LLC⁽³⁾	Unitranche First Lien Term Loan		L + 550 (100 Floor)⁽⁷⁾			6.50	%		06/2023		1,960		1,935			0.4			1,912

											130,049		123,714			22.0			112,104

Technology Hardware & Equipment
Onvoy, LLC⁽³⁾	Senior Secured Second Lien Term Loan		L + 1050 (100 Floor)	⁽⁷⁾		11.50	%		02/2025		2,635		2,547			0.5			2,497

Transportation
Pilot Air Freight, LLC⁽³⁾	Senior Secured First Lien Delayed Draw Term Loan		L + 500 (100 Floor)	⁽⁸⁾		6.00	%		07/2024		1,202		1,202			0.2			1,166
Pilot Air Freight, LLC^{(3) (6) (24)}	Senior Secured First Lien Delayed Draw Term Loan		L + 500 (100 Floor)	⁽⁸⁾		6.00	%		07/2024		775		771			0.2			739
Pilot Air Freight, LLC^{(3) (6) (10)}	Senior Secured First Lien Revolver		L + 500 (100 Floor)	⁽⁷⁾		6.00	%		07/2024		98		98			—			95
Pilot Air Freight, LLC⁽³⁾	Senior Secured First Lien Term Loan		L + 500 (100 Floor)	⁽⁸⁾		6.00	%		07/2024		5,390		5,368			1.0			5,229

											7,465		7,439			1.4			7,229

Total Debt Investments United States										$	824,940	$	797,464			147.5	%	$	752,572

See accompanying notes

CRESCENT CAPITAL BDC, INC.

Consolidated Schedule of Investments (Unaudited)

June 30, 2020

(in thousands, except share and per share data)


Company/Security/Country	Investment Type	Interest Term *	Interest Rate	Maturity / Dissolution Date	Principal Amount, Par Value or Shares		Cost		Percentage of Net Assets **			Fair Value
Equity Investments
Automobiles & Components
APC Auto Tech Holdings, LLC^{(3) (14) (25)}	Preferred Stock					2,403	$	1,079		—	%	$	—
APC Auto Tech Holdings, LLC^{(3) (14) (25)}	Common Stock					24		11		—			—
APC Auto Technology Intermediate, LLC^{(3) (14) (25)}	Preferred Stock					757		757		—			—

						3,184		1,847		—			—

Capital Goods
Alion Science and Technology Corporation^(3) (25)	Common Stock					745,504		766		0.3			1,362
Envocore Holding, LLC^(3) (25)	Preferred Stock					1,139,725		—		—			—

						1,885,229		766		0.3			1,362

Commercial & Professional Services
Allied Universal holdings, LLC^(3) (25)	Common Stock, Class A					2,240,375		1,011		0.4			2,145
Battery Solutions, Inc.^{(3) (14) (25)}	Preferred Stock, Class A					50,000		—		—			—
Battery Solutions, Inc.^{(3) (14) (25)}	Preferred Stock, Class F					3,333,333		—		—			—
Battery Solutions, Inc.^{(3) (14) (25)}	Preferred Stock, Class E					5,064,902		3,669		0.6			2,843
IGT Holding LLC^{(3) (25)}	Common Stock					1,000,000		—		—			—
IGT Holding LLC^{(3) (25)}	Preferred Stock, Class F					730,266		—		—			—
MHS Acquisition Holdings, LLC^(3) (25)	Common Stock					10		10		—			—
MHS Acquisition Holdings, LLC^(3) (25)	Preferred Stock					1,018		923		0.1			641
MY Alarm Ce ,LLC^{(3) (25)}	Preferred Stock					2,420		—		—			—
MY Alarm Ce ALARM, LLC^{(3) (25)}	Common Stock					129,582		—		—			—
MY Alarm Ce SENIOR, LLC^{(3) (25)}	Preferred Stock					2,998		—		—			—
PB Parent, LP^{(3) (25)}	Common Stock					1,125,000		1,125		0.2			893
RSI Acquisition, LLC^{(3) (25)}	Preferred Stock, Class A					137,000		137		—			196
TecoStar Holdings, Inc.^{(3) (25)}	Common Stock					500,000		500		0.2			970

						14,316,904		7,375		1.5			7,688

Consumer Services
Green Wrench Acquisition, LLC^(3) (25)	Common Stock					4,082		410		0.1			483
HGH Investment, LP^{(3) (25)}	Common Stock, Class A					4,171		417		0.1			320
Legalshield^{(3) (25)}	Common Stock					372		372		0.1			556
Southern Technical Institute, Inc.^{(3) (14) (25)}	Preferred Stock, Class A					3,164,063		—		—			—
Southern Technical Institute, Inc.^{(3) (14) (25)}	Preferred Stock, Class A1					6,000,000		—		—			—
Wrench Group Holdings, LLC^{(3) (25)}	Common Stock, Class A					1,143		115		—			135

						9,173,831		1,314		0.3			1,494

Diversified Financials
CBDC Senior Loan Fund LLC^{(6) (18) (26) (27)}	Partnership Interest					39,000,000		39,000		6.0			30,513
GACP II LP^{(18) (27) (28)}	Partnership Interest					20,532,236		20,532		4.1			20,954

						59,532,236		59,532		10.1			51,467

Health Care Equipment & Services
ExamWorks Group, Inc.^{(3) (25)}	Common Stock					7,500		750		0.3			1,461
MDVIP, Inc.^{(3) (25)}	Common Stock					46,807		667		0.2			931
NMN Holdings LP^{(3) (25)}	Common Stock					11,111		1,111		0.2			1,349
PT Network, LLC^{(3) (25)}	Common Stock, Class C					1		—		—			—

See accompanying notes

CRESCENT CAPITAL BDC, INC.

Consolidated Schedule of Investments (Unaudited)

June 30, 2020

(in thousands, except share and per share data)


Company/Security/Country	Investment Type	Interest Term *			Interest Rate			Maturity / Dissolution Date		Principal Amount, Par Value or Shares		Cost		Percentage of Net Assets **			Fair Value
Spartan Healthcare Holdings, LLC^(3) (25)	Common Stock										11,911	$	1,191		0.2	%	$	1,069

											77,330		3,719		0.9			4,810

Insurance
Integrity Marketing Acquisition, LLC^(3) (25)	Common Stock										619,562		648		0.1			808
Integrity Marketing Acquisition, LLC^(3) (25)	Preferred Stock										1,247		1,216		0.3			1,395
Integro Parent, Inc.^{(3) (18) (25)}	Common Stock										4,468		454		0.2			860

											625,277		2,318		0.6			3,063

Materials
Kestrel Upperco, LLC^{(3) (25)}	Common Stock, Class A										41,791		209		—			210

Media & Entertainment
Conisus, LLC.^{(3) (14) (25)}	Common Stock										4,914,556		—		0.3			1,611
Conisus, LLC.^{(3) (14) (29)}	Preferred Stock, Series B		1500 PIK			15.00	%				17,585,717		9,202		3.5			17,586

											22,500,273		9,202		3.8			19,197

Retailing
Palmetto Moon, LLC^{(3) (25)}	Common Stock										61		—		—			—
Slickdeals Holdings, LLC^{(3) (14) (25)}	Common Stock										109		1,091		0.3			1,631
Vivid Seats Ltd.^{(3) (14) (25)}	Common Stock										608,108		608		0.2			828
Vivid Seats Ltd.^{(3) (14) (25)}	Preferred Stock										1,891,892		1,892		0.5			2,738

											2,500,170		3,591		1.0			5,197

Software & Services
SMS Systems Maintenance Services, Inc.^(3) (25)	Common Stock										1,142,789		1,144		—			—

Technology Hardware & Equipment
Onvoy, LLC^{(3) (25)}	Common Stock, Class A										3,649		365		0.1			279
Onvoy, LLC^{(3) (25)}	Common Stock, Class B										2,536		—		—			—

											6,185		365		0.1			279

Transportation
Xpress Global Systems, LLC^{(3) (25)}	Common Stock										12,544		—		—			—

Total Equity Investments United States											111,817,743	$	91,382		18.6	%	$	94,767

Total United States												$	888,846		166.1	%	$	847,339

Canada
Debt Investments
Telecommunication Services
Sandvine Corporation^{(3) (18)}	Senior Secured Second Lien Term Loan		L + 800	⁽⁷⁾		8.18	%		11/2026	$	4,500		4,350		0.7			3,775

Total Debt Investments Canada										$	4,500	$	4,350		0.7	%	$	3,775

Total Canada												$	4,350		0.7	%	$	3,775

United Kingdom
Debt Investments
Commercial & Professional Services
Crusoe Bidco Limited^{(3) (18)}	Unitranche First Lien Term Loan		L + 625	⁽³⁰⁾		6.98	%		12/2025	£	6,067		7,416		1.5			7,497
Crusoe Bidco Limited^{(3) (6) (18) (31)}	Unitranche First Lien Delayed Draw Term Loan								12/2025		—		—		—			—
Crusoe Bidco Limited^{(3) (6) (18) (31)}	Unitranche First Lien Delayed Draw Term Loan								12/2025		—		—		—			—

											6,067		7,416		1.5			7,497

See accompanying notes

CRESCENT CAPITAL BDC, INC.

Consolidated Schedule of Investments (Unaudited)

June 30, 2020

(in thousands, except share and per share data)


Company/Security/Country	Investment Type	Interest Term *			Interest Rate			Maturity / Dissolution Date		Principal Amount, Par Value or Shares		Cost		Percentage of Net Assets **			Fair Value
Consumer Services
Auction Technology Group^{(3) (18)}	Unitranche First Lien Term Loan		L + 650	⁽³²⁾		7.31	%		02/2027	£	$3,339	$	4,233		0.8	%	$	4,002
Auction Technology Group^{(3) (6) (18) (33)}	Unitranche First Lien Revolver								08/2026		—		—		—			(13	)
Auction Technology Group^{(3) (18)}	Unitranche First Lien Term Loan		L + 650	⁽³²⁾		8.22	%		02/2027		10,687		10,380		2.0			10,366

											14,026		14,613		2.8			14,355

Total Debt Investments United Kingdom										£	20,093	$	22,029		4.3	%	$	21,852

Total United Kingdom												$	22,029		4.3	%	$	21,852

Netherlands
Debt Investments
Pharmaceuticals, Biotechnology & Life Sciences
PharComp Parent B.V.^{(3) (18) (19)}	Unitranche First Lien - Last Out Term Loan		E + 625 (000 Floor)	⁽³⁴⁾		6.25	%		02/2026	€	6,910		7,638		1.5			7,760
PharComp Parent B.V.^{(3) (6) (18) (31)}	Unitranche First Lien Term Loan		E + 625 (000 Floor)	⁽³⁴⁾		6.25	%		02/2026		187		146		—			210

											7,097		7,784		1.5			7,970

Total Debt Investments Netherlands										€	7,097	$	7,784		1.5	%	$	7,970

Total Netherlands												$	7,784		1.5	%	$	7,970

Belgium
Debt Investments
Commercial & Professional Services
MIR Bidco SA^{(3) (18)}	Unitranche First Lien Term Loan		E + 625 (000 Floor)	⁽³⁵⁾		6.25	%		04/2026	€	9,507		10,469		2.0			10,214
Miraclon Corporation^{(3) (18)}	Unitranche First Lien Term Loan		L + 625	⁽¹⁵⁾		7.25	%		04/2026	$	4,162		4,054		0.8			3,981

											13,669		14,523		2.8			14,195

Total Debt Investments Belgium											13,669	$	14,523		2.8	%	$	14,195

Equity Investments
Commercial & Professional Services
MIR Bidco SA^{(3) (18) (25)}	Common Stock										1		1		—			—
MIR Bidco SA^{(3) (18) (25)}	Preferred Stock										81		92		—			103

											82		93		—			103

Total Equity Investments Belgium											82	$	93		—	%	$	103

Total Belgium												$	14,616		2.8	%	$	14,298

Total Investments												$	937,625		175.4	%	$	895,234

The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate (“LIBOR” or “L”), Prime (“P”) or EURIBOR (“E”) and which reset monthly, bi-monthly, quarterly, semiannually or annually. For each, the Company has provided the spread over LIBOR or Prime and the current interest rate in effect at June 30, 2020. Certain investments are subject to a LIBOR or Prime interest rate floor. For fixed rate loans, a spread above a reference rate is not applicable.

**	Percentage is based on net assets of $510,298 as of June 30, 2020.

(1)	All positions held are non-controlled/non-affiliated investments, unless otherwise noted, as defined by the Investment Company Act of 1940, as amended (“1940 Act”). Non-controlled/non-affiliated investments are investments that are neither controlled investments nor affiliated investments.

(2)

All debt investments are income-producing, unless otherwise noted. Equity and member interests are non-income-producing unless otherwise noted. The Company generally acquires its investments in private transactions exempt from registration under the Securities Act of 1933, as amended, or the Securities Act. Its investments are therefore generally subject to certain limitations on resale, and may be deemed to be “restricted securities” under the Securities Act.

(3)	The fair value of the investment was determined using significant unobservable inputs. See Note 2 “Summary of Significant Accounting Policies”.

See accompanying notes

CRESCENT CAPITAL BDC, INC.

Consolidated Schedule of Investments (Unaudited)

June 30, 2020

(in thousands, except share and per share data)

(4)	The negative cost, if applicable, is the result of the capitalized discount or unfunded commitment being greater than the principal amount outstanding on the loan. The negative fair value, if applicable, is the result of the capitalized discount or unfunded commitment on the loan.

(5)	Investment pays 0.50% unfunded commitment fee on delayed draw term loan and/or revolving credit facilities.

(6)	Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion. See Note 7 “Commitments and Contingencies”.

(7)	The interest rate on these loans is subject to the greater of a LIBOR floor or 1 month LIBOR plus a base rate. The 1 month LIBOR as of June 30, 2020 was 0.16%. For some of these loans, the interest rate is based on the last reset date.

(8)	The interest rate on these loans is subject to the greater of a LIBOR floor or 3 month LIBOR plus a base rate. The 3 month LIBOR as of June 30, 2020 was 0.30%. For some of these loans, the interest rate is based on the last reset date.

(9)	Fixed rate investment.

(10)	Investment pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving credit facilities.

(11)	The interest rate on these loans is subject to the U.S. Prime rate, which as of June 30, 2020 was 3.25%.

(12)	The interest rate on these loans is subject to the greater of a LIBOR floor or 12 month LIBOR plus a base rate. The 12 month LIBOR as of June 30, 2020 was 0.55%. For some of these loans, the interest rate is based on the last reset date.

(13)	The investment is on non-accrual status as of June 30, 2020.

(14)	As defined in the 1940 Act, the portfolio company is deemed to be a “non-controlled affiliated person” of the Company because the Company owns, either directly or indirectly, 5% or more of the portfolio company’s outstanding voting securities. See Note 3 “Agreements and Related Party Transactions”.

(15)	The interest rate on these loans is subject to the greater of a LIBOR floor or 6 month LIBOR plus a base rate. The 6 month LIBOR as of June 30, 2020 was 0.37%. For some of these loans, the interest rate is based on the last reset date.

(16)	Investment pays 2.88% unfunded commitment fee on delayed draw term loan and/or revolving credit facilities.

(17)	The interest rate on these loans is subject to the greater of a LIBOR floor or 2 month LIBOR plus a base rate. The 2 month LIBOR as of June 30, 2020 was 0.23%. For some of these loans, the interest rate is based on the last reset date.

(18)

Investment is not a qualifying investment as defined under section 55 (a) of the Investment Company Act of 1940. Qualifying assets must represent at least 70% of total assets at the time of acquisition. The Company’s percentage of non-qualifying assets based on fair value was 13.42% as of June 30, 2020.

(19)

These loans are unitranche first lien/last-out term loans. In addition to the interest earned based on the effective interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among lenders whereby the loan has been allocated to “first-out” and “last-out” tranches, whereby the “first-out” tranche will have priority as to the “last-out” tranche with respect to payments of principal, interest and any amounts due thereunder. The Company holds the “last-out” tranche.

(20)	Investment pays 6.88% unfunded commitment fee on delayed draw term loan and/or revolving credit facilities.

(21)	Investment pays 0.38% unfunded commitment fee on delayed draw term loan and/or revolving credit facilities.

(22)	Investment pays 3.88% unfunded commitment fee on delayed draw term loan and/or revolving credit facilities.

(23)	Investment pays 0.75% unfunded commitment fee on delayed draw term loan and/or revolving credit facilities.

(24)	Investment pays 1.25% unfunded commitment fee on delayed draw term loan and/or revolving credit facilities.

(25)	Non-income producing security.

(26)

As defined in the 1940 Act, the portfolio company is deemed to be a “controlled affiliated person” of the Company because the Company owns, either directly or indirectly, 25% or more of the portfolio company’s outstanding voting securities or has the power to exercise control over management or policies of such portfolio company. See Note 3 “Agreements and Related Party Transactions”.

(27)	This investment was valued using net asset value as a practical expedient for fair value. Consistent with FASB guidance under ASC 820, these investments are excluded from the hierarchical levels.

(28)	Investment is not redeemable.

(29)	Income producing equity security.

(30)	The interest rate on these loans is subject to the greater of a GBP LIBOR floor or 3 month GBP LIBOR plus a base rate. The 3 month GBP LIBOR as of June 30, 2020 was 0.14%. For some of these loans, the interest rate is based on the last reset date.

(31)	Investment pays 2.19% unfunded commitment fee on delayed draw term loan and/or revolving credit facilities.

(32)	The interest rate on these loans is subject to the greater of a GBP LIBOR floor or 6 month GBP LIBOR plus a base rate. The 6 month GBP LIBOR as of June 30, 2020 was 0.29%. For some of these loans, the interest rate is based on the last reset date.

(33)	Investment pays 1.23% unfunded commitment fee on delayed draw term loan and/or revolving credit facilities.

(34)	The interest rate on these loans is subject to the greater of a EURIBOR floor or 3 month EURIBOR plus a base rate. The 3 month EURIBOR as of June 30, 2020 was (0.42)%. For some of these loans, the interest rate is based on the last reset date.

(35)	The interest rate on these loans is subject to the greater of a EURIBOR floor or 6 month EURIBOR plus a base rate. The 6 month EURIBOR as of June 30, 2020 was (0.31)%. For some of these loans, the interest rate is based on the last reset date.

EUR

Euro

GBP	Great British Pound

PIK	Payment In-Kind

USD	United States Dollar

See accompanying notes

CRESCENT CAPITAL BDC, INC.

Consolidated Schedule of Investments

December 31, 2019

(in thousands except share and per share data)


Company/Security/Country †‡	Investment Type	Interest Term *			Interest Rate			Maturity / Dissolution Date		Principal Amount, Par Value or Shares		Cost			Percentage of Net Assets **			Fair Value
United States
Debt Investments
Automobiles & Components
Auto-Vehicle Parts, LLC⁽¹⁾	Senior Secured First Lien Term Loan		L + 450 (100 Floor	)⁽²⁾		6.30	%		01/2023	$	4,720	$	4,674			1.2	%	$	4,702
Auto-Vehicle Parts, LLC^{(1) (3) (4) (20)}	Senior Secured First Lien Revolver								01/2023		—		(5	)		—			(2	)
Continental Battery Company^{(1) (3) (20)}	Senior Secured First Lien Delayed Draw Term Loan		L + 525 (100 Floor	)⁽²⁾		7.05	%		01/2020		1,689		1,683			0.4			1,689
Continental Battery Company⁽¹⁾	Senior Secured First Lien Term Loan		L + 525 (100 Floor)	⁽²⁾		7.05	%		12/2022		3,973		3,928			1.0			3,973
Continental Battery Company^{(1) (3) (20)}	Senior Secured First Lien Revolver		L + 525 (100 Floor)	⁽²⁾		7.05	%		12/2022		680		671			0.2			680
Continental Battery Company⁽¹⁾	Senior Secured First Lien Delayed Draw Term Loan		L + 525 (100 Floor)	⁽²⁾		7.05	%		12/2022		6,645		6,559			1.6			6,645
Empire Auto Parts, LLC⁽¹⁾	Unitranche First Lien Term Loan		L + 550 (100 Floor)	⁽⁵⁾		7.39	%		09/2024		2,469		2,429			0.6			2,493
Empire Auto Parts, LLC^{(1) (3) (4) (20)}	Unitranche First Lien Revolver								09/2024		—		(6	)		—			4
Empire Auto Parts, LLC⁽¹⁾	Unitranche First Lien Term Loan		L + 550 (100 Floor)	⁽⁵⁾		7.39	%		09/2024		2,394		2,349			0.6			2,418
POC Investors, LLC⁽¹⁾	Senior Secured First Lien Term Loan		L + 550 (100 Floor)	⁽⁵⁾		7.44	%		11/2021		9,448		9,371			2.3			9,448
POC Investors, LLC^{(1) (3) (4) (20)}	Senior Secured First Lien Revolver								11/2021		—		(7	)		—			—

											32,018		31,646			7.9			32,050

Capital Goods
Alion Science and Technology Corporation	Senior Secured First Lien Term Loan		L + 450 (100 Floor)	⁽²⁾		6.30	%		08/2021		2,968		2,968			0.7			2,977
Alion Science and Technology Corporation^(1) (6)	Unsecured Debt					11.00	%		08/2022		6,543		6,440			1.6			6,543
Midwest Industrial Rubber⁽¹⁾	Senior Secured First Lien Term Loan		L + 550 (100 Floor)	⁽²⁾		7.05	%		12/2021		7,180		7,123			1.8			7,180
Midwest Industrial Rubber^{(1) (3) (4) (20)}	Senior Secured First Lien Revolver								12/2021		—		(4	)		—			—
Potter Electric Signal Company^{(1) (3) (21)}	Senior Secured First Lien Delayed Draw Term Loan		L + 425 (100 Floor)	⁽⁵⁾		6.13	%		12/2021		476		453			0.1			468
Potter Electric Signal Company^{(1) (3) (20)}	Senior Secured First Lien Revolver		P + 325	⁽⁷⁾		8.00	%		12/2024		31		26			—			28
Potter Electric Signal Company⁽¹⁾	Senior Secured First Lien Term Loan		L + 425 (100 Floor)	⁽⁸⁾		6.54	%		12/2025		2,506		2,483			0.6			2,493

											19,704		19,489			4.8			19,689

Commercial & Professional Services
ASP MCS Acquisition Corp.	Senior Secured First Lien Term Loan		L + 475 (100 Floor)	⁽⁵⁾		6.64	%		05/2024		5,241		5,223			0.6			2,495
BFC Solmetex LLC & Bonded Filter Co. LLC^{(1) (3) (2)}	Unitranche First Lien Revolver		L + 650 (100 Floor)	⁽⁵⁾		8.45	%		09/2023		60		54			—			60
BFC Solmetex LLC & Bonded Filter Co. LLC^{(1) (20)}	Unitranche First Lien Revolver		L + 650 (100 Floor)	⁽⁵⁾		8.45	%		09/2023		750		739			0.2			750
BFC Solmetex LLC & Bonded Filter Co. LLC⁽¹⁾	Unitranche First Lien Term Loan		L + 650 (100 Floor)	⁽⁵⁾		8.45	%		09/2023		5,981		5,885			1.5			5,981
BFC Solmetex LLC & Bonded Filter Co. LLC⁽¹⁾	Unitranche First Lien Term Loan		L + 650 (100 Floor)	⁽⁵⁾		8.45	%		09/2023		624		614			0.1			624
BFC Solmetex LLC & Bonded Filter Co. LLC^{(1) (3) (4)}	Unitranche First Lien Term Loan								09/2023		—		(6	)		—			—
CHA Holdings, Inc.⁽¹⁾	Senior Secured First Lien Term Loan		L + 450 (100 Floor)	⁽⁵⁾		6.44	%		04/2025		4,855		4,835			1.2			4,849
CHA Holdings, Inc.⁽¹⁾	Senior Secured First Lien Delayed Draw Term Loan		L + 450 (100 Floor)	⁽⁵⁾		6.44	%		04/2025		1,023		1,020			0.2			1,022

See accompanying notes

CRESCENT CAPITAL BDC, INC.

Consolidated Schedule of Investments

December 31, 2019

(in thousands except share and per share data)


Company/Security/Country †‡	Investment Type	Interest Term *			Interest Rate			Maturity / Dissolution Date		Principal Amount, Par Value or Shares		Cost			Percentage of Net Assets **			Fair Value
DFS Intermediate Holdings, LLC⁽¹⁾	Senior Secured First Lien Term Loan		L + 525 (100 Floor)	⁽²⁾		7.02	%		03/2022	$	8,793	$	8,707			2.2	%	$	8,793
DFS Intermediate Holdings, LLC^{(1) (3) (20)}	Senior Secured First Lien Revolver		L + 525 (100 Floor)	⁽²⁾		7.02	%		03/2022		1,644		1,620			0.4			1,644
DFS Intermediate Holdings, LLC^{(1) (3) (20)}	Senior Secured First Lien Delayed Draw Term Loan		L + 525 (100 Floor)	⁽²⁾		6.95	%		03/2022		3,473		3,431			0.8			3,473
GH Holding Company⁽¹⁾	Senior Secured First Lien Term Loan		L + 450	⁽²⁾		6.30	%		02/2023		1,474		1,469			0.3			1,463
GI Revelation Acquisition LLC	Senior Secured First Lien Term Loan		L + 500	⁽²⁾		6.80	%		04/2025		7,396		7,366			1.7			6,999
Hepaco, LLC^{(1) (3) (20)}	Senior Secured First Lien Revolver		L + 475 (100 Floor)	⁽²⁾		6.54	%		08/2023		660		658			0.2			660
Hepaco, LLC⁽¹⁾	Senior Secured First Lien Term Loan		L + 475 (100 Floor)	⁽²⁾		6.55	%		08/2024		5,151		5,112			1.3			5,151
Hepaco, LLC^{(1) (3) (21)}	Senior Secured First Lien Delayed Draw Term Loan		L + 475 (100 Floor)	⁽²⁾		6.55	%		08/2024		3,978		3,945			1.0			3,978
Jordan Healthcare, Inc.⁽¹⁾	Senior Secured First Lien Term Loan		L + 600 (100 Floor)	⁽⁵⁾		7.94	%		07/2022		4,021		3,998			1.0			4,036
Jordan Healthcare, Inc.⁽¹⁾	Senior Secured First Lien Delayed Draw Term Loan		L + 600 (100 Floor)	⁽⁵⁾		7.94	%		07/2022		698		694			0.2			701
Jordan Healthcare, Inc.^{(1) (3) (20)}	Senior Secured First Lien Revolver		L + 600 (100 Floor)	⁽⁵⁾		7.94	%		07/2022		294		292			0.1			296
MHS Acquisition Holdings, LLC⁽¹⁾	Senior Secured Second Lien Term Loan		L + 875 (100 Floor)	⁽⁵⁾		10.69	%		03/2025		8,102		7,929			1.9			7,818
MHS Acquisition Holdings, LLC⁽¹⁾	Senior Secured Second Lien Delayed Draw Term Loan		L + 875 (100 Floor)	⁽⁵⁾		10.69	%		03/2025		467		460			0.1			450
MHS Acquisition Holdings, LLC⁽¹⁾	Unsecured Debt		1350 PIK			13.50	%		03/2026		714		706			0.2			653
MHS Acquisition Holdings, LLC⁽¹⁾	Unsecured Debt		1350 PIK			13.50	%		03/2026		238		236			0.1			218
Pye-Barker Fire & Safety, LLC⁽¹⁾	Unitranche First Lien Term Loan		L + 575 (100 Floor)	⁽⁵⁾		7.67	%		11/2025		10,125		9,850			2.5			10,125
Pye-Barker Fire & Safety, LLC^{(1) (3) (4)}	Unitranche First Lien Delayed Draw Term Loan								11/2025		—		(51	)		—			—
Receivable Solutions, Inc.⁽¹⁾	Senior Secured First Lien Term Loan		L + 500 (100 Floor)	⁽⁵⁾		6.94	%		10/2024		2,194		2,158			0.5			2,194
Receivable Solutions, Inc.^{(1) (3) (20)}	Senior Secured First Lien Revolver		L + 500 (100 Floor)	⁽²⁾		6.80	%		10/2024		30		25			—			30
SavATree, LLC⁽¹⁾	Senior Secured First Lien Term Loan		L + 500 (100 Floor)	⁽⁵⁾		6.94	%		06/2022		3,956		3,916			1.0			3,956
SavATree, LLC^{(1) (3) (4) (20)}	Senior Secured First Lien Revolver								06/2022		—		(5	)		—			—
SavATree, LLC^{(1) (3) (21)}	Senior Secured First Lien Delayed Draw Term Loan		L + 500 (100 Floor)	⁽⁵⁾		6.89	%		06/2022		154		147			—			154
TecoStar Holdings, Inc.⁽¹⁾	Senior Secured Second Lien Term Loan		L + 850 (100 Floor)	⁽⁵⁾		10.24	%		11/2024		5,000		4,909			1.2			5,000
UP Acquisition Corp⁽¹⁾	Unitranche First Lien Term Loan		L + 575 (100 Floor)	⁽²⁾		7.55	%		05/2024		4,378		4,299			1.1			4,378
UP Acquisition Corp^{(1) (3) (20)}	Unitranche First Lien Revolver		L + 575 (100 Floor)	⁽⁵⁾		7.55	%		05/2024		73		51			—			73
UP Acquisition Corp^{(1) (3) (20)}	Unitranche First Lien Delayed Draw Term Loan		L + 575 (100 Floor)	⁽²⁾		7.55	%		05/2024		276		271			0.1			276
Valet Waste Holdings, Inc.	Senior Secured First Lien Term Loan		L + 375	⁽²⁾		5.54	%		09/2025		14,812		14,781			3.6			14,683

See accompanying notes

CRESCENT CAPITAL BDC, INC.

Consolidated Schedule of Investments

December 31, 2019

(in thousands except share and per share data)


Company/Security/Country †‡	Investment Type	Interest Term *			Interest Rate			Maturity / Dissolution Date		Principal Amount, Par Value or Shares		Cost			Percentage of Net Assets **			Fair Value
Xcentric Mold and Engineering Acquisition Company, LLC⁽¹⁾	Senior Secured First Lien Term Loan		L + 700 (100 Floor)(including 100 PIK)	⁽²⁾		8.69	%		01/2022	$	4,933	$	4,889			1.1	%	$	4,587
Xcentric Mold and Engineering Acquisition Company, LLC⁽¹⁾	Senior Secured First Lien Revolver		L + 700 (100 Floor)(including 100 PIK)	⁽²⁾		8.69	%		01/2022		703		697			0.2			654

											112,271		110,924			26.6			108,224

Consumer Durables & Apparel
EiKo Global, LLC⁽¹⁾	Senior Secured First Lien Term Loan		L + 600 (100 Floor)	⁽⁵⁾		7.94	%		06/2023		3,256		3,207			0.8			3,256
EiKo Global, LLC^{(1) (3) (4) (20)}	Senior Secured First Lien Revolver								06/2023		—		(11	)		—			—

											3,256		3,196			0.8			3,256

Consumer Services
Colibri Group LLC⁽¹⁾	Unitranche First Lien Term Loan		L + 575 (100 Floor)	⁽⁵⁾		7.70	%		05/2025		8,209		8,021			2.0			8,200
Colibri Group LLC^{(1) (21)}	Unitranche First Lien Delayed Draw Term Loan		L + 575 (100 Floor)	⁽⁵⁾		7.68	%		05/2025		1,350		1,320			0.3			1,348
Colibri Group LLC^{(1) (3) (20)}	Unitranche First Lien Revolver		L + 575 (100 Floor)	⁽²⁾		7.55	%		05/2025		267		244			0.1			266
COP Home Services Holdings, Inc.^{(1) (3) (4) (20)}	Senior Secured First Lien Term Loan								05/2025		—		(8	)		—			(2	)
COP Home Services Holdings, Inc.^(1) (21)	Senior Secured First Lien Term Loan		L + 450 (100 Floor)	⁽⁵⁾		6.40	%		05/2025		3,474		3,411			0.8			3,457
COP Home Services Holdings, Inc.^{(1) (3) (4)}	Senior Secured First Lien Delayed Draw Term Loan								05/2025		—		(9	)		—			(4	)
HGH Purchaser, Inc.⁽¹⁾	Unitranche First Lien Term Loan		L + 600 (100 Floor)	⁽²⁾		7.69	%		11/2025		8,108		7,910			2.0			8,108
HGH Purchaser, Inc.^{(1) (3) (4) (21)}	Unitranche First Lien Delayed Draw Term Loan								11/2025		—		(41	)		—			—
HGH Purchaser, Inc.^{(1) (3) (20)}	Unitranche First Lien Revolver		P + 500	⁽⁷⁾		9.75	%		11/2025		186		161			—			186
JLL XDD, Inc.⁽¹⁾	Senior Secured First Lien Term Loan		L + 475 (100 Floor)	⁽⁵⁾		6.69	%		12/2023		2,134		2,086			0.5			2,134
Learn-It Systems, LLC⁽¹⁾	Senior Secured First Lien Term Loan		L + 450 (50 Floor)	⁽⁵⁾		6.40	%		03/2025		4,367		4,265			1.1			4,367
Learn-It Systems, LLC^{(1) (3) (20)}	Senior Secured First Lien Revolver		P + 350	⁽⁷⁾		8.25	%		03/2025		492		478			0.1			492
Learn-It Systems, LLC^{(1) (3) (22)}	Senior Secured First Lien Delayed Draw Term Loan		L + 450 (50 Floor)	⁽⁵⁾		6.50	%		03/2025		311		251			0.1			311
New Mountain Learning⁽¹⁾	Senior Secured First Lien Term Loan		L + 600 (100 Floor)	⁽⁵⁾		7.94	%		03/2024		1,825		1,798			0.4			1,579
New Mountain Learning^{(1) (3) (20)}	Senior Secured First Lien Revolver		L + 600 (100 Floor)	⁽⁵⁾		7.94	%		03/2024		475		467			0.1			394
New Mountain Learning⁽¹⁾	Senior Secured First Lien Delayed Draw Term Loan		L + 600 (100 Floor)	⁽⁵⁾		7.94	%		03/2024		370		365			0.1			320
Pre-Paid Legal Services, Inc.	Senior Secured Second Lien Term Loan		L + 750	⁽²⁾		9.30	%		05/2026		9,333		9,249			2.3			9,318
Teaching Strategies LLC⁽¹⁾	Unitranche First Lien Term Loan		L + 600 (100 Floor)	⁽⁵⁾		7.94	%		05/2024		9,234		9,055			2.3			9,327
Teaching Strategies LLC^{(1) (3) (20)}	Unitranche First Lien Revolver		L + 600 (100 Floor)	⁽⁵⁾		7.94	%		05/2024		183		171			—			189
United Language Group, Inc.⁽¹⁾	Senior Secured First Lien Term Loan		L + 600 (100 Floor)	⁽²⁾		7.88	%		12/2021		4,689		4,638			1.1			4,344
United Language Group, Inc.^{(1) (20)}	Senior Secured First Lien Revolver		L + 600 (100 Floor)	⁽²⁾		7.88	%		12/2021		400		395			0.1			370
Vistage Worldwide, Inc.	Senior Secured First Lien Term Loan		L + 400 (100 Floor)	⁽²⁾		5.80	%		02/2025		6,473		6,483			1.6			6,441

See accompanying notes

CRESCENT CAPITAL BDC, INC.

Consolidated Schedule of Investments

December 31, 2019

(in thousands except share and per share data)


Company/Security/Country †‡	Investment Type	Interest Term *			Interest Rate			Maturity / Dissolution Date		Principal Amount, Par Value or Shares		Cost			Percentage of Net Assets **			Fair Value
Wrench Group LLC⁽¹⁾	Senior Secured First Lien Term Loan		L + 425	⁽⁵⁾		6.19	%		04/2026	$	3,089	$	3,060			0.8	%	$	3,097
Wrench Group LLC^{(1) (3) (23)}	Senior Secured First Lien Delayed Draw Term Loan								04/2026		—		—			—			2
Wrench Group LLC⁽¹⁾	Senior Secured Second Lien Term Loan		L + 788	⁽¹⁰⁾		9.82	%		04/2027		2,500		2,429			0.6			2,500

											67,469		66,199			16.4			66,744

Diversified Financials
CC SAG Acquisition Corp.⁽¹⁾	Unitranche First Lien Term Loan		L + 500 (100 Floor)	⁽⁵⁾		6.89	%		09/2025		7,182		7,021			1.8			7,132
CC SAG Acquisition Corp.^{(1) (3) (21)}	Unitranche First Lien Delayed Draw Term Loan		L + 500 (100 Floor)	⁽²⁾		6.76	%		09/2025		172		142			—			157
CC SAG Acquisition Corp.^{(1) (3) (4) (20)}	Unitranche First Lien Revolver								09/2025		—		(23	)		—			(7	)

											7,354		7,140			1.8			7,282

Energy
BJ Services, LLC^{(1) (11)}	Unitranche First Lien - Last Out Term Loan		L + 1033 (150 Floor)	⁽⁵⁾		12.43	%		01/2023		8,287		8,220			2.0			8,287
BJ Services, LLC⁽¹⁾	Unitranche First Lien Term Loan		L + 700 (150 Floor)	⁽⁵⁾		9.10	%		01/2023		4,875		4,836			1.2			4,875

											13,162		13,056			3.2			13,162

Food & Staples Retailing
BJH Holdings III Corp.⁽¹⁾	Unitranche First Lien Term Loan		L + 575 (100 Floor)	⁽²⁾		7.55	%		08/2025		13,715		13,520			3.4			13,647
Isagenix International, LLC	Senior Secured First Lien Term Loan		L + 575 (100 Floor)	⁽⁵⁾		7.70	%		06/2025		6,471		6,442			1.1			4,652
PetIQ, LLC^{(1) (9)}	Senior Secured First Lien Term Loan		L + 450 (100 Floor)	⁽²⁾		6.30	%		07/2025		15,000		14,868			3.7			15,000

											35,186		34,830			8.2			33,299

Food, Beverage & Tobacco
Mann Lake Ltd.⁽¹⁾	Senior Secured First Lien Term Loan		L + 500 (100 Floor)	⁽⁵⁾		6.91	%		10/2024		3,865		3,800			1.0			3,826
Mann Lake Ltd.^{(1) (3) (20)}	Senior Secured First Lien Revolver		L + 500 (100 Floor)	⁽⁵⁾		6.91	%		10/2024		444		430			0.1			435

											4,309		4,230			1.1			4,261

Health Care Equipment & Services
Abode Healthcare, Inc.⁽¹⁾	Senior Secured First Lien Term Loan		L + 425 (100 Floor)	⁽⁵⁾		6.16	%		08/2025		4,788		4,697			1.2			4,716
Abode Healthcare, Inc.^{(1) (3) (20)}	Senior Secured First Lien Revolver		L + 425 (100 Floor)	⁽⁵⁾		6.16	%		08/2025		288		266			0.1			270
Ameda, Inc.⁽¹⁾	Senior Secured First Lien Term Loan		L + 700 (100 Floor)	⁽²⁾		8.77	%		09/2022		2,279		2,254			0.6			2,244
Ameda, Inc.^{(1) (3) (20)}	Senior Secured First Lien Revolver		L + 700 (100 Floor)	⁽²⁾		8.77	%		09/2022		188		184			—			183
Avalign Technologies, Inc.⁽¹⁾	Senior Secured First Lien Term Loan		L + 450	⁽²⁾		6.30	%		12/2025		17,009		16,858			4.2			16,881
Centauri Health Solutions, Inc.⁽¹⁾	Senior Secured First Lien Delayed Draw Term Loan		L + 475 (100 Floor)	⁽²⁾		6.55	%		01/2023		891		881			0.2			900
Centauri Health Solutions, Inc.⁽¹⁾	Senior Secured First Lien Term Loan		L + 475 (100 Floor)	⁽²⁾		6.55	%		01/2023		14,546		14,387			3.6			14,692
Centauri Health Solutions, Inc.^{(1) (3) (4) (20)}	Senior Secured First Lien Revolver								01/2023		—		(9	)		—			16
Centria Subsidiary Holdings, LLC^{(1) (3) (4) (20)}	Unitranche First Lien Revolver								12/2025		—		(59	)		—			—
Centria Subsidiary Holdings, LLC⁽¹⁾	Unitranche First Lien Term Loan		L + 600 (100 Floor)	⁽⁵⁾		7.89	%		12/2025		11,842		11,490			2.9			11,842
Clarkson Eyecare, LLC⁽¹⁾	Unitranche First Lien Term Loan		L + 625 (100 Floor)	⁽²⁾		8.05	%		04/2021		9,013		8,869			2.2			8,877
Clarkson Eyecare, LLC⁽¹⁾	Unitranche First Lien Term Loan		L + 625 (100 Floor)	⁽²⁾		8.05	%		04/2021		5,950		5,853			1.4			5,861

See accompanying notes

CRESCENT CAPITAL BDC, INC.

Consolidated Schedule of Investments

December 31, 2019

(in thousands except share and per share data)


Company/Security/Country †‡	Investment Type	Interest Term *			Interest Rate			Maturity / Dissolution Date		Principal Amount, Par Value or Shares		Cost			Percentage of Net Assets **			Fair Value
CRA MSO, LLC⁽¹⁾	Senior Secured First Lien Term Loan		L + 475 (100 Floor)	⁽²⁾		6.55	%		12/2023	$	1,237	$	1,218			0.3	%	$	1,237
CRA MSO, LLC^{(1) (3) (4) (20)}	Senior Secured First Lien Delayed Draw Term Loan								12/2023		—		(6	)		—			—
CRA MSO, LLC^{(1) (3) (4) (20)}	Senior Secured First Lien Revolver								12/2023		—		(3	)		—			—
ExamWorks Group, Inc.⁽¹⁾	Senior Secured Second Lien Term Loan		L + 725 (100 Floor)	⁽²⁾		9.05	%		07/2024		5,735		5,621			1.4			5,745
GrapeTree Medical Staffing, LLC⁽¹⁾	Senior Secured First Lien Term Loan		L + 525 (100 Floor)	⁽²⁾		7.05	%		10/2022		1,662		1,644			0.4			1,662
GrapeTree Medical Staffing, LLC^{(1) (3) (4) (20)}	Senior Secured First Lien Revolver								10/2022		—		(4	)		—			—
GrapeTree Medical Staffing, LLC⁽¹⁾	Senior Secured First Lien Term Loan		L + 525 (100 Floor)	⁽²⁾		7.05	%		10/2022		1,396		1,373			0.3			1,396
MDVIP, Inc.	Senior Secured First Lien Term Loan		L + 425 (100 Floor)	⁽²⁾		6.05	%		11/2024		9,659		9,659			2.4			9,611
NMN Holdings III Corp.⁽¹⁾	Senior Secured Second Lien Term Loan Term Loan		L + 775	⁽²⁾		9.49	%		11/2026		7,222		7,027			1.8			7,182
NMN Holdings III Corp.^{(1) (3) (4) (24)}	Senior Secured Second Lien Delayed Draw Term Loan								11/2026		—		(21	)		—			(9	)
NMSC Holdings, Inc.⁽¹⁾	Senior Secured Second Lien Term Loan		L + 1000	⁽²⁾		11.80	%		10/2023		4,307		4,202			1.1			4,286
Omni Ophthalmic Management Consultants, LLC^{(1) (3) (4) (20)}	Senior Secured First Lien Revolver								05/2023		—		(10	)		—			(3	)
Omni Ophthalmic Management Consultants, LLC^{(1) (3) (4) (21)}	Senior Secured First Lien Delayed Draw Term Loan								05/2023		—		(9	)		—			(4	)
Omni Ophthalmic Management Consultants, LLC⁽¹⁾	Senior Secured First Lien Term Loan		L + 525 (100 Floor)	⁽²⁾		7.05	%		05/2023		6,947		6,868			1.7			6,924
Professional Physical Therapy⁽¹⁾	Senior Secured First Lien Term Loan		L + 675 (100 Floor)(including 75 PIK)	⁽⁵⁾		8.44	%		12/2022		8,906		8,574			1.8			7,488
PT Network, LLC^{(1) (3) (4) (20)}	Senior Secured First Lien Revolver								11/2023		—		(1	)		—			(8	)
PT Network, LLC⁽¹⁾	Senior Secured First Lien Term Loan		L + 750 (100 Floor)(including 200 PIK)	⁽¹⁰⁾		9.44	%		11/2023		4,727		4,718			1.1			4,627
Safco Dental Supply, LLC⁽¹⁾	Unitranche First Lien Term Loan		L + 550 (100 Floor)	⁽⁵⁾		7.25	%		06/2025		4,549		4,475			1.1			4,549
Safco Dental Supply, LLC^{(1) (3) (4) (20)}	Unitranche First Lien Revolver								06/2025		—		(10	)		—			—
Smile Brands, Inc.^{(1) (3) (20)}	Senior Secured First Lien Revolver		P + 350	⁽⁷⁾		8.25	%		10/2023		40		38			—			38
Smile Brands, Inc.^{(1) (3) (21)}	Senior Secured First Lien Delayed Draw Term Loan		L + 450	⁽⁵⁾		6.43	%		10/2024		378		372			0.1			374
Smile Brands, Inc.⁽¹⁾	Senior Secured First Lien Term Loan		L + 450	⁽¹⁰⁾		6.70	%		10/2024		2,079		2,062			0.5			2,069
Smile Doctors LLC^{(1) (3) (20)}	Senior Secured First Lien Revolver		L + 600 (100 Floor)	⁽⁵⁾		7.94	%		10/2022		139		138			—			139
Smile Doctors LLC⁽¹⁾	Senior Secured First Lien Term Loan		L + 600 (100 Floor)	⁽⁵⁾		7.94	%		10/2022		3,173		3,146			0.8			3,173
Smile Doctors LLC^{(1) (3) (21)}	Senior Secured First Lien Delayed Draw Term Loan		L + 600 (100 Floor)	⁽⁵⁾		7.94	%		10/2022		1,685		1,683			0.4			1,685
Unifeye Vision Partners⁽¹⁾	Senior Secured First Lien Term Loan		L + 500 (100 Floor)	⁽⁵⁾		6.89	%		09/2025		5,400		5,296			1.3			5,400

See accompanying notes

CRESCENT CAPITAL BDC, INC.

Consolidated Schedule of Investments

December 31, 2019

(in thousands except share and per share data)


Company/Security/Country †‡	Investment Type	Interest Term *			Interest Rate			Maturity / Dissolution Date		Principal Amount, Par Value or Shares		Cost			Percentage of Net Assets **			Fair Value
Unifeye Vision Partners^{(1) (3) (20)}	Senior Secured First Lien Revolver		L + 500 (100 Floor	)⁽⁵⁾		6.89	%		09/2025	$	227	$	194			0.1	%	$	227
Unifeye Vision Partners^{(1) (3) (4)}	Senior Secured First Lien Delayed Draw Term Loan								09/2025		—		(29	)		—			—
Zest Acquisition Corp.	Senior Secured First Lien Term Loan		L + 350	⁽²⁾		5.25	%		03/2025		8,830		8,831			2.1			8,432

											145,092		142,717			35.1			142,702

Household & Personal Products
Tranzonic⁽¹⁾	Senior Secured First Lien Term Loan		L + 475 (100 Floor	)⁽²⁾		6.55	%		03/2023		3,854		3,826			0.9			3,854
Tranzonic^{(1) (3) (4) (20)}	Senior Secured First Lien Revolver								03/2023		—		(3	)		—			—

											3,854		3,823			0.9			3,854

Insurance
Comet Acquisition, Inc.⁽¹⁾	Senior Secured Second Lien Term Loan		L + 750	⁽⁵⁾		9.41	%		10/2026		4,632		4,622			1.1			4,411
Integrity Marketing Acquisition, LLC^{(1) (3) (21)}	Unitranche First Lien Delayed Draw Term Loan		L + 575 (100 Floor	)⁽⁵⁾		7.81	%		02/2020		3,543		3,433			0.8			3,517
Integrity Marketing Acquisition, LLC^{(1) (3) (4) (21)}	Unitranche First Lien Delayed Draw Term Loan								07/2021		—		(37	)		—			(15	)
Integrity Marketing Acquisition, LLC⁽¹⁾	Unitranche First Lien Term Loan		L + 575 (100 Floor	)⁽⁵⁾		7.67	%		08/2025		13,009		12,699			3.2			12,944
Integrity Marketing Acquisition, LLC^{(1) (3) (4) (20)}	Unitranche First Lien Revolver								08/2025		—		(48	)		—			(7	)
Integro Parent, Inc.^{(1) (9)}	Senior Secured First Lien Term Loan		L + 575 (100 Floor	)⁽²⁾		7.55	%		10/2022		477		473			0.1			470
Integro Parent, Inc.^{(1) (9)}	Senior Secured Second Lien Term Loan		L + 925 (100 Floor	)⁽²⁾		11.05	%		10/2023		2,916		2,882			0.7			2,916
Integro Parent, Inc.^{(1) (9)}	Senior Secured Second Lien Delayed Draw Term Loan		L + 925 (100 Floor	)⁽²⁾		10.99	%		10/2023		380		377			0.1			380
The Hilb Group, LLC^{(1) (3) (4)}	Unitranche First Lien Revolver								12/2025		—		(8	)		—			(2	)
The Hilb Group, LLC^{(1) (20)}	Unitranche First Lien Term Loan		L + 575 (100 Floor	)⁽²⁾		7.69	%		12/2026		3,640		3,549			0.9			3,612
The Hilb Group, LLC^{(1) (3) (4) (21)}	Unitranche First Lien Term Loan								12/2026		—		(13	)		—			(8	)

											28,597		27,929			6.9			28,218

Materials
Kestrel Parent, LLC^{(1) (3) (4) (20)}	Unitranche First Lien Revolver								11/2023		—		(17	)		—			13
Kestrel Parent, LLC⁽¹⁾	Unitranche First Lien Term Loan		L + 600 (100 Floor	)⁽²⁾		7.78	%		11/2025		6,740		6,593			1.7			6,841
Maroon Group, LLC ⁽¹⁾	Unitranche First Lien Term Loan		L + 675 (100 Floor	)⁽⁵⁾		8.72	%		08/2022		2,712		2,693			0.7			2,712
Maroon Group, LLC ^{(1) (3) (20)}	Unitranche First Lien Revolver		L + 675 (100 Floor	)⁽²⁾		8.56	%		08/2022		98		96			—			98
Maroon Group, LLC ^{(1) (21)}	Unitranche First Lien Delayed Draw Term Loan		L + 675 (100 Floor	)⁽⁵⁾		8.72	%		08/2022		1,250		1,242			0.3			1,250

											10,800		10,607			2.7			10,914

Pharmaceuticals, Biotechnology & Life Sciences
Trinity Partners, LLC⁽¹⁾	Senior Secured First Lien Term Loan		L + 500 (100 Floor	)⁽²⁾		6.80	%		02/2023		3,744		3,706			0.9			3,744
Trinity Partners, LLC^{(1) (3) (4) (20)}	Senior Secured First Lien Revolver								02/2023		—		(6	)		—			—

											3,744		3,700			0.9			3,744

Retailing
Slickdeals Holdings, LLC^{(1) (3) (4) (19) (25)}	Unitranche First Lien Revolver								06/2023		—		(14	)		—			—

See accompanying notes

CRESCENT CAPITAL BDC, INC.

Consolidated Schedule of Investments

December 31, 2019

(in thousands except share and per share data)


Company/Security/Country †‡	Investment Type	Interest Term *			Interest Rate			Maturity / Dissolution Date		Principal Amount, Par Value or Shares		Cost			Percentage of Net Assets **			Fair Value
Slickdeals Holdings, LLC^{(1) (19)}	Unitranche First Lien Term Loan		L + 625 (100 Floor	)⁽²⁾		7.99	%		06/2024	$	14,726	$	14,342			3.6	%	$	14,726
Strategic Partners, Inc.⁽¹⁾	Senior Secured First Lien Term Loan		L + 375 (100 Floor	)⁽²⁾		5.55	%		06/2023		6,322		6,313			1.6			6,338

											21,048		20,641			5.2			21,064

Software & Services
Affinitiv, Inc.⁽¹⁾	Unitranche First Lien Term Loan		L + 525 (100 Floor	)⁽⁵⁾		7.17	%		08/2024		6,500		6,393			1.6			6,500
Affinitiv, Inc.^{(1) (3) (4) (20)}	Unitranche First Lien Revolver								08/2024		—		(14	)		—			—
Ansira Partners, Inc.⁽¹⁾	Unitranche First Lien Term Loan		L + 575 (100 Floor	)⁽²⁾		7.55	%		12/2022		6,867		6,829			1.6			6,477
Ansira Partners, Inc.^{(1) (3) (21)}	Unitranche First Lien Delayed Draw Term Loan		L + 575 (100 Floor	)⁽²⁾		7.49	%		12/2022		626		622			0.1			572
Avaap USA LLC⁽¹⁾	Senior Secured First Lien Term Loan		L + 525 (100 Floor	)⁽²⁾		7.05	%		03/2023		3,808		3,748			1.0			3,846
Avaap USA LLC^{(1) (20)}	Senior Secured First Lien Delayed Draw Term Loan		L + 525 (100 Floor	)⁽²⁾		7.02	%		03/2023		347		342			0.1			351
Avaap USA LLC^{(1) (3) (4) (20)}	Senior Secured First Lien Revolver								03/2023		—		(10	)		—			7
Benesys, Inc.⁽¹⁾	Senior Secured First Lien Term Loan		L + 425 (100 Floor	)⁽²⁾		6.05	%		10/2024		1,432		1,414			0.4			1,411
Benesys, Inc.^{(1) (3) (20)}	Senior Secured First Lien Revolver		L + 425 (100 Floor	)⁽²⁾		6.05	%		10/2024		48		46			—			46
C-4 Analytics, LLC⁽¹⁾	Senior Secured First Lien Term Loan		L + 475 (100 Floor	)⁽²⁾		6.55	%		08/2023		10,313		10,195			2.5			10,313
C-4 Analytics, LLC^{(1) (3) (4) (20)}	Senior Secured First Lien Revolver								08/2023		—		(6	)		—			—
CAT Buyer, LLC⁽¹⁾	Unitranche First Lien Term Loan		L + 550 (100 Floor	)⁽²⁾		7.30	%		04/2024		6,302		6,194			1.5			6,272
CAT Buyer, LLC^{(1) (3) (20)}	Unitranche First Lien Revolver		L + 550	⁽²⁾		7.30	%		04/2024		151		140			—			149
Claritas, LLC⁽¹⁾	Senior Secured First Lien Term Loan		L + 600 (100 Floor	)⁽⁵⁾		7.94	%		12/2023		1,121		1,112			0.3			1,121
Claritas, LLC^{(1) (3) (2)}	Senior Secured First Lien Revolver		L + 600 (100 Floor	)⁽²⁾		7.80	%		12/2023		120		118			—			120
List Partners, Inc.⁽¹⁾	Senior Secured First Lien Term Loan		L + 500 (100 Floor	)⁽²⁾		6.77	%		01/2023		4,623		4,563			1.1			4,649
List Partners, Inc.^{(1) (3) (4) (20)}	Senior Secured First Lien Revolver								01/2023		—		(5	)		—			3
Ontario Systems, LLC⁽¹⁾	Unitranche First Lien Term Loan		L + 550 (100 Floor	)⁽²⁾		7.30	%		08/2025		3,242		3,211			0.8			3,242
Ontario Systems, LLC^{(1) (3) (4) (20)}	Unitranche First Lien Revolver								08/2025		—		(5	)		—			—
Ontario Systems, LLC^{(1) (3) (4) (21)}	Unitranche First Lien Delayed Draw Term Loan								08/2025		—		(5	)		—			—
Perforce Software, Inc.	Senior Secured First Lien Term Loan		L + 450	⁽²⁾		6.30	%		07/2026		12,469		12,410			3.1			12,492
Right Networks, LLC⁽¹⁾	Unitranche First Lien Term Loan		L + 600 (100 Floor	)⁽²⁾		7.70	%		11/2024		9,743		9,530			2.4			9,743
Right Networks, LLC^{(1) (3) (4) (2)}	Unitranche First Lien Revolver								11/2024		—		(5	)		—			—
Ruffalo Noel Levitz, LLC⁽¹⁾	Unitranche First Lien Term Loan		L + 600 (100 Floor	)⁽⁵⁾		7.94	%		05/2022		2,531		2,503			0.6			2,518
Ruffalo Noel Levitz, LLC^{(1) (3) (4) (20)}	Unitranche First Lien Revolver								05/2022		—		(3	)		—			(2	)
SMS Systems Maintenance Services, Inc.^(1) (12)	Senior Secured Second Lien Term Loan								10/2024		6,156		5,619			0.6			2,471
SMS Systems Maintenance Services, Inc.^(1) (12)	Senior Secured Second Lien Term Loan								10/2024		4,704		4,287			0.5			1,888
SMS Systems Maintenance Services, Inc.^(1) (12)	Senior Secured Second Lien Term Loan								10/2024		2,859		2,670			0.5			2,193

See accompanying notes

CRESCENT CAPITAL BDC, INC.

Consolidated Schedule of Investments

December 31, 2019

(in thousands except share and per share data)


Company/Security/Country †‡	Investment Type	Interest Term *			Interest Rate			Maturity / Dissolution Date		Principal Amount, Par Value or Shares		Cost			Percentage of Net Assets **			Fair Value
Transportation Insight, LLC^{(1) (3) (4) (20)}	Senior Secured First Lien Revolver								12/2024	$	—	$	(6	)		—	%	$	(4	)
Transportation Insight, LLC⁽¹⁾	Senior Secured First Lien Term Loan		L + 450	⁽²⁾		6.30	%		12/2024		5,194		5,151			1.3			5,168
Transportation Insight, LLC^{(1) (3) (21)}	Senior Secured First Lien Delayed Draw Term Loan		L + 450	⁽⁵⁾		6.20	%		12/2024		713		702			0.2			706
Trident Technologies, LLC⁽¹⁾	Senior Secured First Lien Term Loan		L + 600 (150 Floor	)⁽²⁾		7.62	%		12/2025		15,000		14,775			3.6			14,775
Winxnet Holdings LLC^{(1) (3)}	Unitranche First Lien Delayed Draw Term Loan		L + 600 (100 Floor	)⁽²⁾		7.76	%		06/2023		647		632			0.2			634
Winxnet Holdings LLC⁽¹⁾	Unitranche First Lien Term Loan		L + 600 (100 Floor	)⁽²⁾		7.76	%		06/2023		1,970		1,941			0.5			1,945
Winxnet Holdings LLC^{(1) (3) (20)}	Unitranche First Lien Revolver		L + 600 (100 Floor	)⁽²⁾		7.76	%		06/2023		80		74			—			75

											107,566		105,162			24.5			99,681

Technology Hardware & Equipment
Onvoy, LLC⁽¹⁾	Senior Secured Second Lien Term Loan		L + 1050 (100 Floor	)⁽²⁾		12.30	%		02/2025		2,635		2,541			0.6			2,339

Transportation
Pilot Air Freight, LLC⁽¹⁾	Senior Secured First Lien Term Loan		L + 525 (100 Floor	)⁽²⁾		7.05	%		07/2024		5,417		5,393			1.3			5,417
Pilot Air Freight, LLC⁽¹⁾	Senior Secured First Lien Delayed Draw Term Loan		L + 525 (100 Floor	)⁽²⁾		7.05	%		07/2024		1,209		1,209			0.3			1,209
Pilot Air Freight, LLC^{(1) (3) (4) (26)}	Senior Secured First Lien Delayed Draw Term Loan								07/2024		—		(5	)		—			—
Pilot Air Freight, LLC^{(1) (3) (4) (21)}	Senior Secured First Lien Revolver								07/2024		—		(1	)		—			—

											6,626		6,596			1.6			6,626

Total Debt Investments United States										$	624,691	$	614,426			149.2	%	$	607,109

Equity Investments
Automobiles & Components
APC Auto Tech Holdings, LLC^{(1) (13) (19)}	Common Stock										2,427		1,090			—			162
APC Auto Technology Intermediate, LLC^{(1) (13) (19)}	Preferred Stock										757		757			0.2			767

											3,184		1,847			0.2			929

Capital Goods
Alion Science and Technology Corporation^(1) (13)	Common Stock										745,504		766			0.3			1,207

Commercial & Professional Services
Allied Universal holdings, LLC^(1) (13)	Common Stock, Class A										2,240,375		1,011			0.5			2,199
MHS Acquisition Holdings, LLC^(1) (13)	Common Stock										912		913			0.2			586
MHS Acquisition Holdings, LLC^(1) (13)	Preferred Stock										20		20			—			—
PB Parent, LP^{(1) (13)}	Common Stock										1,125,000		1,125			0.3			1,125
RSI Acquisition, LLC^{(1) (13)}	Preferred Stock, Class A										137,000		137			—			137
TecoStar Holdings, Inc.^{(1) (13)}	Common Stock										500,000	$	500			0.2	%	$	973

											4,003,307		3,706			1.2			5,020

Consumer Services
Green Wrench Acquisition, LLC^(1) (13)	Common Stock										3,906		391			0.1			391
HGH Investment, LP^{(1) (13)}	Common Stock, Class A										4,171		417			0.1			416
Legalshield^{(1) (13)}	Common Stock										372		372			0.2			719

See accompanying notes

CRESCENT CAPITAL BDC, INC.

Consolidated Schedule of Investments

December 31, 2019

(in thousands except share and per share data)


Company/Security/Country †‡	Investment Type	Interest Term *			Interest Rate			Maturity / Dissolution Date		Principal Amount, Par Value or Shares		Cost		Percentage of Net Assets **			Fair Value
Wrench Group Holdings, LLC^{(1) (13)}	Common Stock, Class A										1,094	$	109		—	%	$	109

											9,543		1,289		0.4			1,635

Diversified Financials
CBDC Senior Loan Fund LLC^{(9) (14) (15)}	Partnership Interest										34,000,000		34,000		8.5			34,442
GACP II LP^{(9) (15)}	Partnership Interest										18,067,282		18,067		4.5			18,564

											52,067,282		52,067		13.0			53,006

Health Care Equipment & Services
ExamWorks Group, Inc.^{(1) (13)}	Common Stock										7,500		750		0.3			1,344
MDVIP, Inc.^{(1) (13)}	Common Stock										46,807		667		0.2			922
NMN Holdings LP^{(1) (13)}	Common Stock										11,111		1,111		0.3			1,009
PT Network, LLC^{(1) (13)}	Common Stock, Class C										1		—		—			—
Spartan Healthcare Holdings, LLC^(1) (13)	Common Stock										11,843		1,184		0.3			1,185

											77,262		3,712		1.1			4,460

Insurance
Integrity Marketing Acquisition, LLC^(1) (13)	Common Stock										619,562		648		0.2			648
Integrity Marketing Acquisition, LLC^(1) (13)	Preferred Stock										1,247		1,213		0.3			1,247
Integro Parent, Inc.^{(1) (9) (13)}	Common Stock										4,468		454		0.2			878

											625,277		2,315		0.7			2,773

Materials
Kestrel Upperco, LLC^{(1) (13)}	Common Stock, Class A										41,791		209		0.1			223

Media & Entertainment
Vivid Seats Ltd.^{(1) (13) (19)}	Common Stock										608,108		608		0.3			1,083
Vivid Seats Ltd.^{(1) (13) (19)}	Preferred Stock										1,891,892		1,892		0.6			2,563

											2,500,000		2,500		0.9			3,646

Retailing
Slickdeals Holdings, LLC^{(1) (13) (19)}	Common Stock										109		1,091		0.3			1,207

Software & Services
SMS Systems Maintenance Services, Inc.^(1) (13)	Common Stock										1,142,789		1,144		—			—

Technology Hardware & Equipment
Onvoy, LLC^{(1) (13)}	Common Stock, Class A										3,649		365		0.1			228
Onvoy, LLC^{(1) (13)}	Common Stock, Class B										2,536		—		—			—

											6,185		365		0.1			228

Total Equity Investments United States											61,222,233	$	71,011		18.3	%	$	74,334

Total United States												$	685,437		167.5	%	$	681,443

Canada
Debt Investments
Software & Services
Corel Corporation⁽⁹⁾	Senior Secured First Lien Term Loan		L + 500	⁽¹²⁾		6.91	%		07/2026	$	12,500		11,905		3.0			12,109

Total Debt Investments Canada										$	12,500	$	11,905		3.0	%	$	12,109

Total Canada												$	11,905		3.0	%	$	12,109

See accompanying notes

CRESCENT CAPITAL BDC, INC.

Consolidated Schedule of Investments

December 31, 2019

(in thousands except share and per share data)


Company/Security/Country †‡	Investment Type	Interest Term *			Interest Rate			Maturity / Dissolution Date		Principal Amount, Par Value or Shares		Cost		Percentage of Net Assets **			Fair Value
France
Debt Investments
Technology Hardware & Equipment
Parkeon, Inc.⁽⁹⁾	Senior Secured First Lien Term Loan		E + 525	⁽¹⁷⁾		5.25	%		04/2023	€	1,995	$	2,136		0.5	%	$	2,248

											1,995		2,136		0.5			2,248

Total Debt Investments France										€	1,995	$	2,136		0.5	%	$	2,248

Total France												$	2,136		0.5	%	$	2,248

United Kingdom
Debt Investments
Commercial & Professional Services
Crusoe Bidco Limited^{(1) (3) (9)}	Unitranche First Lien Delayed Draw Term Loan								12/2025	£	—		—		—			—
Crusoe Bidco Limited^{(1) (3) (9)}	Unitranche First Lien Delayed Draw Term Loan								12/2025		—		—		—			—
Crusoe Bidco Limited^{(1) (9)}	Unitranche First Lien Term Loan		L + 625	⁽¹⁸⁾		7.04	%		12/2025		6,067		7,402		2.0			8,038

											6,067		7,402		2.0			8,038

Total Debt Investments United Kingdom										£	6,067	$	7,402		2.0	%	$	8,038

Total United Kingdom												$	7,402		2.0	%	$	8,038

Netherlands
Debt Investments
Pharmaceuticals, Biotechnology & Life Sciences
PharComp Parent B.V.^{(1) (9) (11)}	Unitranche First Lien - Last Out Term Loan		E + 650	⁽¹⁷⁾		6.50	%		02/2026	€	6,910		7,625		1.9			7,756
PharComp Parent B.V.^{(1) (3) (9)}	Unitranche First Lien Term Loan								02/2026		—		—		—			—

											6,910		7,625		1.9			7,756

Total Debt Investments Netherlands										€	6,910	$	7,625		1.9	%	$	7,756

Total Netherlands												$	7,625		1.9	%	$	7,756

Belgium
Debt Investments
Commercial & Professional Services
MIR Bidco SA^{(1) (9)}	Unitranche First Lien Term Loan		E + 600	⁽¹⁷⁾		6.00	%		04/2026	€	$9,507	$	10,451		2.6	%	$	10,672
Miraclon Corporation^{(1) (9)}	Unitranche First Lien Term Loan		L + 600	⁽¹⁰⁾		7.96	%		04/2026	$	4,161		4,046		1.0			4,161

Total Debt Investments Belgium											13,668	$	14,497		3.6	%	$	14,833

Equity Investments
Commercial & Professional Services
MIR Bidco SA^{(1) (9) (13)}	Common Stock										921		1		—			1
MIR Bidco SA^{(1) (9) (13)}	Preferred Stock										81,384		92		—			103

											82,305		93		—			104

Total Equity Investments Belgium											82,305	$	93		—	%	$	104

Total Belgium												$	14,590		3.6	%	$	14,937

Total Investments												$	729,095		178.5	%	$	726,531

The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate (“LIBOR” or “L”), Prime (“P”) or EURIBOR (“E”) and which reset monthly, bi-monthly, quarterly, semiannually or annually. For each, the Company has provided the spread over LIBOR or Prime and the current interest rate in effect at December 31, 2019. Certain investments are subject to a LIBOR or Prime interest rate floor. For fixed rate loans, a spread above a reference rate is not applicable.

See accompanying notes

CRESCENT CAPITAL BDC, INC.

Consolidated Schedule of Investments

December 31, 2019

(in thousands except share and per share data)

**	Percentage is based on net assets of $406,917 as of December 31, 2019.

†	All positions held are non-controlled/non-affiliated investments, unless otherwise noted, as defined by the Investment Company Act of 1940, as amended (“1940 Act”). Non-controlled/non-affiliated investments are investments that are neither controlled investments nor affiliated investments.

‡

(1)	The fair value of the investment was determined using significant unobservable inputs. See Note 2 “Summary of Significant Accounting Policies”.

(2)	The interest rate on these loans is subject to the greater of a LIBOR floor or 1 month LIBOR plus a base rate. The 1 month LIBOR as of December 31, 2019 was 1.76%.

(3)	Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion. See Note 8 “Commitments and Contingencies”.

(4)	The negative cost, if applicable, is the result of the capitalized discount or unfunded commitment being greater than the principal amount outstanding on the loan. The negative fair value, if applicable, is the result of the capitalized discount or unfunded commitment on the loan.

(5)	The interest rate on these loans is subject to the greater of a LIBOR floor or 3 month LIBOR plus a base rate. The 3 month LIBOR as of December 31, 2019 was 1.91%.

(6)	Fixed rate investment.

(7)	The interest rate on these loans is subject to the U.S. Prime rate, which as of December 31, 2019 was 4.75%.

(8)	The interest rate on these loans is subject to the greater of a LIBOR floor or 12 month LIBOR plus a base rate. The 12 month LIBOR as of December 31, 2019 was 2.00%.

(9)

(10)	The interest rate on these loans is subject to the greater of a LIBOR floor or 6 month LIBOR plus a base rate. The 6 month LIBOR as of December 31, 2019 was 1.91%.

(11)

(12)	The investment is on non-accrual status as of December 31, 2019.

(13)	Non-income producing security.

(14)

As defined in the Investment Company Act of 1940, the portfolio company is deemed to be a “controlled affiliated person” of the Company because the Company owns, either directly or indirectly, 25% or more of the portfolio company’s outstanding voting securities or has the power to exercise control over management or policies of such portfolio company. See Note 3 “Agreements and Related Party Transactions”.

(15)	This investment was valued using net asset value as a practical expedient for fair value. Consistent with FASB guidance under ASC 820, these investments are excluded from the hierarchical levels.

(16)	The interest rate on these loans is subject to the greater of a LIBOR floor or 2 month LIBOR plus a base rate. The 2 month LIBOR as of December 31, 2019 was 1.83%.

(17)	The interest rate on these loans is subject to the greater of a EURIBOR floor or 3 month EURIBOR plus a base rate. The 3 month EURIBOR as of December 31, 2019 was (0.38)%.

(18)	The interest rate on these loans is subject to the greater of a GBP LIBOR floor or 3 month GBP LIBOR plus a base rate. The 3 month GBP LIBOR as of December 31, 2019 was 0.79%.

(19)	As defined in the 1940 Act, the portfolio company is deemed to be a “non-controlled affiliated person” of the Company because the Company owns, either directly or indirectly, 5% or more of the portfolio company’s outstanding voting securities. See Note 3 “Agreements and Related Party Transactions”.

(20)	Investment pays 0.50% unfunded commitment fee on delayed draw term loan and/or revolving credit facilities.

(21)	Investment pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving credit facilities.

(22)	Investment pays 0.75% unfunded commitment fee on delayed draw term loan and/or revolving credit facilities.

(23)	Investment pays 4.25% unfunded commitment fee on delayed draw term loan and/or revolving credit facilities.

(24)	Investment pays 3.88 % unfunded commitment fee on delayed draw term loan and/or revolving credit facilities.

(25)	Investment pays 0.38% unfunded commitment fee on delayed draw term loan and/or revolving credit facilities.

(26)	Investment pays 1.25% unfunded commitment fee on delayed draw term loan and/or revolving credit facilities.

See accompanying notes

CRESCENT CAPITAL BDC, INC.

Consolidated Schedule of Investments

December 31, 2019

(in thousands except share and per share data)

Foreign Currency Exchange

Contracts

Counterparty

Currency
Purchased

Currency Sold

Settlement

Unrealized
Appreciation
(Depreciation)

Wells Fargo Bank, N.A.

USD 7,974,709

GBP 5,885,394

12/01/2023

(65

)

Wells Fargo Bank, N.A.

USD 11,682,415

EUR 9,221,988

04/10/2024

366

Wells Fargo Bank, N.A.

USD 8,602,672

EUR 6,702,510

02/20/2024

392

693

EUR

Euro

GBP	Great British Pound

PIK	Payment In-Kind

USD	United States Dollar

See accompanying notes

CRESCENT CAPITAL BDC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

June 30, 2020 (Unaudited)

Note 1. Organization and Basis of Presentation

Crescent Capital BDC, Inc. (the “Company”) was formed on February 5, 2015 (“Inception”) as a Delaware corporation structured as an externally managed, closed-end, non-diversified management investment company. The Company commenced investment operations on June 26, 2015. On January 30, 2020, the Company changed its state of incorporation from the State of Delaware to the State of Maryland. The Company has elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, the Company has elected to be treated for U.S. federal income tax purposes as a regulated investment company (a “RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). As a RIC, the Company will not be taxed on its income to the extent that it distributes such income each year and satisfies other applicable income tax requirements.

The Company’s primary investment objective is to maximize the total return to the Company’s stockholders in the form of current income and capital appreciation through debt and related equity investments. The Company will seek to achieve its investment objectives by investing primarily in secured debt (including senior secured, unitranche and second lien debt) and unsecured debt (including senior unsecured, mezzanine and subordinated debt), as well as related equity securities of private U.S. middle-market companies. The Company may make multiple investments in the same portfolio company. Although the Company’s focus is to invest in private credit transactions, in certain circumstances it will also invest in broadly syndicated loans and bonds.

The Company is managed by Crescent Cap Advisors, LLC (the “Advisor” and formerly, CBDC Advisors, LLC), an investment adviser that is registered with the Securities and Exchange Commission (the “SEC”) under the Investment Advisers Act of 1940, as amended. CCAP Administration LLC (the “Administrator” and formerly, CBDC Administration, LLC) provides the administrative services necessary for the Company to operate. Company management consists of investment and administrative professionals from the Advisor and Administrator along with the Company’s Board of Directors (the “Board”). The Advisor directs and executes the investment operations and capital raising activities of the Company subject to oversight from the Board, which sets the broad policies of the Company. The Board has delegated investment management of the Company’s investment assets to the Advisor. The Board consists of six directors, four of whom are independent.

The Company has formed or acquired wholly owned subsidiaries that are structured as tax blockers, to hold equity or equity-like investments in portfolio companies organized as limited liability companies or other forms of pass-through entities. These corporate subsidiaries are not consolidated for income tax purposes and may incur income tax expense as a result of their ownership of portfolio companies.

On January 31, 2020, the Company completed a transaction to acquire Alcentra Capital Corporation in a cash and stock transaction (the “Alcentra Acquisition”). The Company was listed and began trading on the NASDAQ stock exchange on February 3, 2020. See “Note 13. Alcentra Acquisition” for more information.

Basis of Presentation

The Company’s functional currency is the United States dollar and these consolidated financial statements have been prepared in that currency. The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to Regulation S-X.

Additionally, the accompanying consolidated financial statements of the Company and related financial information have been prepared pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain disclosures accompanying annual consolidated financial statements prepared in accordance with GAAP are omitted. In the opinion of management, the unaudited interim financial results included herein contain all adjustments and reclassifications that are necessary for the fair presentation of consolidated financial statements for the periods included herein. The current period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the year ending December 31, 2020.

The Company is an investment company and, therefore, applies the specialized accounting and reporting guidance in Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies.

Note 2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that may affect the amounts reported in the consolidated financial statements and accompanying notes. These consolidated financial statements reflect adjustments that in the opinion of management are necessary for the fair statement of the results for the periods presented. Although management believes that the estimates and assumptions are reasonable, changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ materially.

Cash and Cash Equivalents

Cash and cash equivalents consist of demand deposits and highly liquid investments (e.g., money market funds, U.S. Treasury notes, and similar type instruments) with original maturities of three months or less. Cash and cash equivalents other than money market mutual funds, are carried at cost plus accrued interest, which approximates fair value. Money market mutual funds are carried at their net asset value, which approximates fair value. Restricted cash and cash equivalents consists of deposits held at Wells Fargo Bank N.A. related to the Company’s credit facility. The Company holds cash and cash equivalents denominated in foreign currencies. The Company deposits its cash, cash equivalents and restricted cash with highly-rated banking corporations and, at times, cash deposits may exceed the insured limits under applicable law.

Investment Transactions

Loan originations are recorded on the date of the binding commitment. Investments purchased on a secondary market are recorded on the trade date. Realized gains or losses are recorded using the specific identification method as the difference between the net proceeds received (excluding prepayment fees, if any) and the amortized cost basis of the investment without regard to unrealized gains or losses previously recognized, and include investments written off during the period, net of recoveries. The net change in unrealized gains or losses primarily reflects the change in investment fair values as of the last business day of the reporting period and also includes the reversal of previously recorded unrealized gains or losses with respect to investments realized during the period.

Investment Valuation

Investments for which market quotations are readily available are typically valued at those market quotations. To validate market quotations, the Company utilizes a number of factors to determine if the quotations are representative of fair value, including the source and number of the quotations. Debt and equity securities that are not publicly traded or whose market prices are not readily available are valued at fair value as determined in good faith by the Board, based on, among other things, the input of the Advisor, the Company’s Audit Committee and, with certain de minimis exceptions, independent third-party valuation firms engaged at the direction of the Board.

The Board oversees and supervises a multi-step valuation process, which includes, among other procedures, the following:

•

The valuation process begins with each investment being initially valued by the investment professionals responsible for the portfolio investment in conjunction with the portfolio management team.

•

The Advisor’s management reviews the preliminary valuations with the investment professionals. Agreed upon valuation recommendations are presented to the Audit Committee.

•

The Audit Committee reviews the valuations presented and recommends values for each investment to the Board.

•

The Board reviews the recommended valuations and determines the fair value of each investment.

The Company applies Financial Accounting Standards Board ASC 820, Fair Value Measurement (ASC 820), as amended, which establishes a framework for measuring fair value in accordance with GAAP and required disclosures of fair value measurements. ASC 820 determines fair value to be the price that would be received for an investment in a current sale, which assumes an orderly transaction between market participants on the measurement date. Market participants are defined as buyers and sellers in the principal or most advantageous market (which may be a hypothetical market) that are independent, knowledgeable, and willing and able to transact. In accordance with ASC 820, the Company considers its principal market to be the market that has the greatest volume and level of activity. ASC 820 specifies a fair value hierarchy that prioritizes and ranks the level of observability of inputs used in the determination of fair value. In accordance with ASC 820, these levels are summarized below:

Level 1—Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2—Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

Investments in investment companies are valued at fair value. Fair values are generally determined utilizing the net asset value (“NAV”) supplied by, or on behalf of, management of each investment company, which is net of management and incentive fees or allocations charged by the investment company and is in accordance with the “practical expedient”, as defined by ASC 820. NAVs received by, or on behalf of, management of each investment company are based on the fair value of the investment company’s underlying investments in accordance with policies established by management of each investment company, as described in each of their financial statements and offering memorandum. Investments which are valued using NAV as a practical expedient are excluded from the above hierarchy.

The Company applies the valuation policy approved by its Board that is consistent with ASC 820. Consistent with the valuation policy, the Company evaluates the source of inputs, including any markets in which its investments are trading (or any markets in which securities with similar attributes are trading), in determining fair value. When a security is valued based on prices provided by reputable dealers or pricing services (that is, broker quotes), the Company subjects those prices to various criteria in making the determination as to whether a particular investment would qualify for classification as a Level 2 or Level 3 investment. For example, the Company reviews pricing methodologies provided by dealers or pricing services in order to determine if observable market information is being used, versus unobservable inputs. Some additional factors considered include the number of prices obtained as well as an assessment as to their quality. Transfers between levels, if any, are recognized at the beginning of the period in which the transfers occur.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Additionally, the fair value of such investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that may ultimately be realized. Further, such investments are generally less liquid than publicly traded securities and may be subject to contractual and other restrictions on resale. If the Company were required to liquidate a portfolio investment in a forced or liquidation sale, it could realize amounts that are different from the amounts presented and such differences could be material. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected herein.

Foreign Currency

Foreign currency amounts are translated into U.S. dollars on the following basis:

•

cash and cash equivalents, fair value of investments, outstanding debt on revolving credit facilities, other assets and liabilities: at the spot exchange rate on the last business day of the period; and

•

purchases and sales of investments, borrowings and repayments of such borrowings, income and expenses: at the rates of exchange prevailing on the respective dates of such transactions.

Although net assets and fair values are presented based on the applicable foreign exchange rates described above, the Company does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in fair values of investments held. Gains or losses on foreign currency transactions are included with net realized gain (loss) on foreign currency transactions on the Consolidated Statements of Operations. Fluctuations arising from the translation of foreign currency on cash, investments and borrowings are included with net change in unrealized appreciation (depreciation) on investments and foreign currency translation on the Consolidated Statements of Operations.

The Company’s approach to hedging the foreign currency exposure in its non-U.S. dollar denominated investments is to borrow local currency under the Company’s credit facilities or by entering into foreign currency forward contracts.

Foreign currency forward contracts

The Company may enter into foreign currency forward contracts to reduce the Company’s exposure to foreign currency exchange rate fluctuations in the value of foreign currencies. In a foreign currency forward contract, the Company agrees to receive or deliver a fixed quantity of one currency for another, at a pre-determined price at a future date. Forward foreign currency contracts are marked-to-market at the applicable forward rate. Unrealized appreciation (depreciation) on foreign currency forward contracts are recorded on the Consolidated Statements of Assets and Liabilities by counterparty on a net basis, not taking into account collateral posted which is recorded separately, if applicable. Notional amounts and the gross fair value of foreign currency forward contract assets and liabilities are presented separately on the Consolidated Schedules of Investments. Purchases and sales of foreign currency forward contracts having the same notional value, settlement date and counterparty are generally settled net (which results in a net foreign currency position of zero with the counterparty) and any realized gains or losses are recognized on the settlement date.

The Company does not utilize hedge accounting and as such, the Company recognizes its derivatives at fair value with changes in the net unrealized appreciation (depreciation) on foreign currency forward contracts recorded on the Consolidated Statements of Operations.

Equity Offering and Organization Expenses

The Company agreed to repay the Advisor for initial organization costs and equity offering costs incurred prior to the commencement of its operations up to a maximum of $1,500 on a pro rata basis over the first $350,000 of invested capital not to exceed 3 years from the initial capital commitment on June 26, 2015. The initial 3 year term was later extended to June 30, 2019 with shareholder approval. To the extent such costs relate to equity offerings, these costs are charged as a reduction of capital upon the issuance of common shares. To the extent such costs relate to organization costs, these costs are expensed in the Consolidated Statements of Operations upon the issuance of common shares. The Advisor is responsible for organization and private equity offerings costs in excess of $1,500. During the reimbursement period which began on June 26, 2015 and expired on June 30, 2019, the Advisor had allocated to the Company $794 of equity offering costs and $568 of organization costs.

Debt Issuance Costs

The Company records costs related to issuance of debt obligations as deferred financing costs. These costs are deferred and amortized using the effective yield method for revolving credit facilities, over the stated maturity life of the obligation. As of June 30, 2020 and December 31, 2019, there were $4,504 and $3,431, respectively, of deferred financing costs netted against debt balances on the Company’s Consolidated Statements of Assets and Liabilities.

Interest and Dividend Income Recognition

Interest income is recorded on an accrual basis and includes the amortization of purchase discounts and premiums. Discounts and premiums to par value on securities purchased are accreted or amortized into interest income over the contractual life of the respective security using the effective yield method. The amortized cost of investments represents the original cost adjusted for the accretion and amortization of discounts and premiums, if any. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized upfront loan origination fees and unamortized discounts are recorded as interest income.

Dividend income from preferred equity securities is recorded on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income from common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly-traded portfolio companies. Each distribution received from an equity investment is evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, the Company will not record distributions from equity investments as dividend income unless there is sufficient current or accumulated earnings prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment.

Certain investments have contractual payment-in-kind (“PIK”) interest or dividends. PIK represents accrued interest or accumulated dividends that are added to the loan principal or cost basis of the investment on the respective interest or dividend payment dates rather than being paid in cash and generally becomes due at maturity or upon being called by the issuer. PIK is recorded as interest or dividend income, as applicable. If at any point the Company believes PIK is not expected to be realized, the investment generating PIK will be placed on non-accrual status. Accrued PIK interest or dividends are generally reversed through interest or dividend income, respectively, when an investment is placed on non-accrual status.

Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest is paid current and, in management’s judgment, are likely to remain current. Management may determine to not place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection. As of June 30, 2020, the Company had five portfolio companies with eight investment positions on non-accrual status, which represented 3.9% and 2.4% of the total debt investments at cost and fair value, respectively. As of December 31, 2019, the Company had one portfolio company with three investment positions on non-accrual status, which represented 1.9% and 1.0% of the total debt investments at cost and fair value, respectively.

Other Income

Other income may include income such as consent, waiver, amendment, unused, underwriting, arranger and prepayment fees associated with the Company’s investment activities as well as any fees for managerial assistance services rendered by the Company to the portfolio companies. Such fees are recognized as income when earned or the services are rendered.

Income Taxes

The Company has elected to be treated as a BDC under the 1940 Act. The Company also has elected to be treated as a RIC under the Internal Revenue Code. So long as the Company maintains its status as a RIC, it will generally not pay corporate-level U.S. federal income or excise taxes on any ordinary income or capital gains that it distributes at least annually to its stockholders as dividends. As a result, any tax liability related to income earned and distributed by the Company represents obligations of the Company’s stockholders and will not be reflected in the consolidated financial statements of the Company.

The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated 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 reversed and recorded as a tax benefit or expense in the current year. All penalties and interest associated with income taxes are included in income tax expense. Conclusions regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, on-going analyses of tax laws, regulations and interpretations thereof. The Company accounts for income taxes in conformity with ASC Topic 740 — Income Taxes (“ASC Topic 740”). ASC Topic 740 provides guidelines for how uncertain tax positions should be recognized, measured, presented and disclosed in financial statements.

The Company intends to comply with the applicable provisions of the Code, pertaining to regulated investment companies and to make distributions of taxable income sufficient to relieve it from substantially all federal income taxes. As of June 30, 2020, the Company is subject to examination by U.S. federal tax authorities for returns filed for the three most recent calendar years and by state tax authorities for returns filed for the four most recent calendar years.

In order for the Company not to be subject to federal excise taxes, it must distribute annually an amount at least equal to the sum of (i) 98% of its ordinary income (taking into account certain deferrals and elections), (ii) 98.2% of its net capital gains from the current year and (iii) any undistributed ordinary income and net capital gains from preceding years. The Company, at its discretion, may carry forward taxable income in excess of calendar year dividends and pay a 4% excise tax on this income. If the Company chooses to do so, this generally would increase expenses and reduce the amount available to be distributed to stockholders. The Company accrues excise tax on estimated undistributed taxable income as required on a quarterly basis. For the three and six months ended June 30, 2020, the Company expensed an excise tax of $105 and $342, respectively, of which $198 remained payable. For the three and six months ended June 30, 2019, the Company expensed an excise tax of $0 and $0, respectively, of which $23 remained payable.

CBDC Universal Equity, Inc. and Alcentra BDC Equity Holdings, LLC are taxable entities (“Taxable Subsidiaries”). The Taxable Subsidiaries permit the Company to hold equity investments in portfolio companies which are “pass through” entities for tax purposes and continue to comply with the “source income” requirements contained in RIC tax provisions of the Code. The Taxable Subsidiaries are not consolidated with the Company for income tax purposes and may generate income tax expense, benefit, and the related tax assets and liabilities, as a result of its ownership of certain portfolio investments. The income tax expense, or benefit, if any, and related tax assets and liabilities are reflected in the Company’s consolidated financial statements.

For the three and six months ended June 30, 2020, the Company recognized a benefit/(provision) for taxes of $(193) and $262, respectively, on unrealized appreciation/(depreciation) on investments and net operating losses and federal tax credits related to the Taxable Subsidiaries. For the three and six months ended June 30, 2019, the Company recognized a benefit/(provision) for taxes of $(31) and $(480), respectively, on unrealized appreciation/(depreciation) on investments and net operating losses and federal tax credits related to the Taxable Subsidiaries. As of June 30, 2020 and December 31, 2019, $959 and $879, respectively, was included in deferred tax liabilities on the Consolidated Statements of Assets and Liabilities primarily relating to deferred taxes on unrealized gains on investments held in the Company’s corporate subsidiaries and other temporary book to tax differences of the corporate subsidiaries. As of June 30, 2020 and December 31, 2019, $762 and $421, respectively, was included in deferred tax assets on the Consolidated Statements of Assets and Liabilities relating to net operating loss carryforwards and unrealized losses on investments and other temporary book to tax differences that are expected to be used in future periods. A portion of the taxable subsidiaries’ net operating loss and capital loss carryovers are subject to an annual limitation use under the Code and related regulations.

For the three and six months ended June 30, 2020 and 2019, there were no realized gains on investments requiring a recognition of a tax provision.

Dividends and Distributions

Dividends and distributions to common stockholders are recorded on the record date. The amount to be paid out as a dividend is determined by the Board each quarter. Net realized capital gains, if any, are distributed at least annually, although the Company may decide to retain such capital gains for investment.

The Company adopted a dividend reinvestment plan that provides for reinvestment of the Company’s dividends and other distributions on behalf of the stockholders unless a stockholder elects to receive cash. As a result, if the Company’s Board authorizes, and the Company declares, a cash dividend, or other distribution then stockholders who are participating in the dividend reinvestment plan will have their cash dividends and distributions automatically reinvested in additional shares of common stock, rather than receiving cash dividends and distributions.

Prior to February 3, 2020, which is the date of the Company’s listing on NASDAQ, only stockholders who “opted in” to the dividend reinvestment plan had their cash dividends and distributions automatically reinvested in additional shares of common stock. After February 3, 2020, stockholders who do not “opt out” of the dividend reinvestment plan will have their cash dividends and distributions automatically reinvested in additional shares of the Company’s common stock. The elections of stockholders that made an election prior to February 3, 2020 remain effective.

New Accounting Standards

In March 2020, the FASB issued Accounting Standard Update (“ASU”) No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This ASU provides optional exceptions for applying GAAP to contract modifications, hedging relationships and other transactions affected reference rate reform if certain criteria are met. ASU 2020-04 is elective and can be adopted between March 12, 2020 and December 31, 2022. The Company expects that the adoption of this guidance will not have a material impact on its consolidated financial statements.

Note 3. Agreements and Related Party Transactions

Administration Agreement

On June 2, 2015, the Company entered into the Administration Agreement with the Administrator, as amended and restated on February 1, 2020. Under the terms of the Administration Agreement, the Administrator provides administrative services to the Company. These services include providing office space, equipment and office services, maintaining financial records, preparing reports to stockholders and reports filed with the SEC, and managing the payment of expenses and the performance of administrative and professional services rendered by others. Certain of these services are reimbursable to the Administrator under the terms of the Administration Agreement. In addition, the Administrator is permitted to delegate its duties under the Administration Agreement to affiliates or third parties. To the extent the Administrator outsources any of its functions, the Company will pay the fees associated with such functions on a direct basis, without incremental profit to the Administrator. The Administration Agreement may be terminated by either party without penalty on 60 days’ written notice to the other party.

For the three and six months ended June 30, 2020, the Company incurred administrative services expenses of $207 and $411, respectively, which are included in other general and administrative expenses on the Consolidated Statements of Operations, of which $282 was payable at June 30, 2020. For the three and six months ended June 30, 2019, the Company incurred administrative services expenses of $179 and $358, respectively, which are included in other general and administrative expenses on the Consolidated Statements of Operations, of which $255 was payable at June 30, 2019.

No person who is an officer, director or employee of the Administrator or its affiliates and who serves as a director of the Company receives any compensation from the Company for his or her services as a director. However, the Company reimburses the Administrator (or its affiliates) for an allocable portion of the compensation paid by the Administrator or its affiliates to the Company’s Chief Compliance Officer, legal counsel, and other professionals who spend time on such related activities (based on the percentage of time those individuals devote, on an estimated basis, to the business and affairs of the Company). The allocable portion of the compensation for these officers and other professionals are included in the administration expenses paid to Administrator. Directors who are not affiliated with the Administrator or its affiliates receive compensation for their services and reimbursement of expenses incurred to attend meetings, which are included as directors’ fees on the Consolidated Statements of Operations.

On June 5, 2015, the Company entered into sub-administration agreement with State Street Bank and Trust Company (“SSB”) to perform certain administrative, custodian and other services on behalf of the Company. The sub-administration agreement with SSB had an initial term of three years ending June 5, 2018 and shall automatically renew for 1-year terms unless a written notice of non-renewal is delivered by the Company or SSB. The Company does not reimburse the Administrator for any services for which it pays a separate sub-administrator and custodian fee to SSB. For the three and six months ended June 30, 2020, the Company incurred expenses of $293 and $606, respectively, which are included in other general and administrative expenses on the Consolidated Statements of Operations, under the terms of the sub-administration agreements, of which $293 was payable at June 30, 2020. For the three and six months ended June 30, 2019, the Company incurred expenses of $233 and $453, respectively, which are included in other general and administrative expenses on the Consolidated Statements of Operations, under the terms of the sub-administration agreements, of which $233 was payable at June 30, 2019.

Investment Advisory Agreement

On June 2, 2015, the Company entered into an investment advisory agreement with the Advisor (the “Investment Advisory Agreement”), which was subsequently replaced by the Amended and Restated Investment Advisory Agreement (together with the Investment Advisory Agreement, the “Advisory Agreements”), which was approved by the Company’s stockholders on January 29, 2020 in connection with the Alcentra Acquisition. Under the terms of the Amended and Restated Investment Advisory Agreement, the Advisor will provide investment advisory services to the Company and its portfolio investments. The Advisor’s services under the Amended and Restated Investment Advisory Agreement are not exclusive, and the Advisor is free to furnish similar or other services to others so long as its services to the Company are not impaired. Under the terms of the Advisory Agreements, the Advisor is entitled to receive a base management fee and may also receive incentive fees, as discussed below.

Base Management Fee (prior to February 1, 2020)

Prior to February 1, 2020, pursuant to the Investment Advisory Agreement, the base management fee was calculated and payable quarterly in arrears at an annual rate of 1.50% of the Company’s gross assets, including assets acquired through the incurrence of debt but excluding any cash and cash equivalents. The base management fee was calculated based on the average value of gross assets at the end of the two most recently completed calendar quarters, and appropriately adjusted for share issuances or repurchases during the current calendar quarter.

Under the Investment Advisory Agreement, the Advisor agreed to waive its right to receive management fees in excess of the sum of (i) 0.25% of the aggregate committed but undrawn capital and (ii) 0.75% of the aggregate gross assets excluding cash and cash equivalents (including capital drawn to pay the Company’s expenses) during the period prior to February 3, 2020, the date of the Company’s qualified initial public offering, as defined by the Investment Advisory Agreement (“Qualified IPO”). The listing of the Company’s Common Stock on NASDAQ on February 3, 2020 qualified as a Qualified IPO. The Advisor is not permitted to recoup any waived amounts at any time.

New Base Management Fee (effective February 1, 2020)

Effective February 1, 2020, pursuant to the Amended and Restated Investment Advisory Agreement, the base management fee is calculated and payable quarterly in arrears at an annual rate of 1.25% of the Company’s gross assets, including assets acquired through the incurrence of debt but excluding any cash and cash equivalents. The base management fee is calculated based on the average value of gross assets at the end of the two most recently completed calendar quarters, and appropriately adjusted for any share issuances or repurchases during the current calendar quarter.

In addition, under the terms of the Amended and Restated Advisory Agreement, the Advisor agreed to waive a portion of the management fee from February 1, 2020 through July 31, 2021 after the closing of the Alcentra Acquisition so that only 0.75% shall be charged for such time period. The Advisor is not permitted to recoup any waived amounts at any time.

For the three and six months ended June 30, 2020, the Company incurred management fees of $1,660 and $3,154, respectively, which are net of waived amounts, of $1,107 and $2,264, respectively, of which $1,660 was payable at June 30, 2020. For the three and six months ended June 30, 2019, the Company incurred management fees of $1,116 and $2,103, respectively, which are net of waived amounts, of $1,044 and $1,947 respectively, of which $1,116 was payable at June 30, 2019.

The Advisor has voluntarily waived its right to receive management fees on the Company’s investment in GACP II LP for any period in which GACP II LP remains in the investment portfolio. For the three and six months ended June 30, 2020, $40 and $77, respectively, of management fees waived were attributable to the Company’s investment in GACP II LP. For the three and six months ended June 30, 2019, $34 and $66, respectively, of management fees waived were attributable to the Company’s investment in GACP II LP. These amounts are excluded from the management fee waived amounts above.

Incentive Fee (prior to February 1, 2020)

Under the Investment Advisory Agreement, the Incentive Fee consisted of two parts. The first part, the income incentive fee, was calculated and payable quarterly in arrears and equaled (a) 100% of the excess of the pre-incentive fee net investment income for the immediately preceding calendar quarter, over a preferred return of 1.5% per quarter (6.0% annualized) (the “Hurdle”), and a catch-up feature until the Advisor received 15% of the pre-incentive fee net investment income for the current quarter up to 1.7647% (the “Catch-up”), and (b) 15% of all remaining pre-incentive fee net investment income above the “Catch-up.”

The second part, the capital gains incentive fee, is determined and payable in arrears as of the end of each fiscal year at a rate of 15.0% of the Company’s realized capital gains, if any, on a cumulative basis from Inception through the end of the fiscal year, 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.

At the 2018 Annual Meeting of Stockholders, in connection with the extension of the deadline to consummate a Qualified IPO, the Advisor agreed to waive its rights under the Investment Advisory Agreement to (i) the income incentive fee and (ii) the capital gain incentive fee for the period from April 1, 2018 through February 1, 2020.

Incentive Fee (effective February 1, 2020)

Under the Amended and Restated Investment Advisory Agreement, the Incentive Fee consists of two parts. The first part, the income incentive fee, is calculated and payable quarterly in arrears and (a) equals 100% of the excess of the pre-incentive fee net investment income for the immediately preceding calendar quarter, over a preferred return of 1.75% per quarter (7.0% annualized) (the “Hurdle”), and a catch-up feature until the Advisor has received 17.5%, of the pre-incentive fee net investment income for the current quarter up to 2.1212% (the “Catch-up”), and (b) 17.5% of all remaining pre-incentive fee net investment income above the “Catch-up.”

In addition, under the terms of the Amended and Restated Investment Advisory Agreement, the Advisor agreed to waive the income based portion of the incentive fee from February 1, 2020 through July 31, 2021. Once the Advisor begins to earn income incentive fees, the Advisor will voluntarily waive the income incentive fees attributable to the investment income accrued by the Company as a result of its investment in GACP II. The second part, the capital gains incentive fee, is determined and payable in arrears as of the end of each fiscal year at a rate of 17.5% of the Company’s realized capital gains, if any, on a cumulative basis from Inception through the end of the fiscal year, 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. Since the Qualified IPO occurred on a date other than the first day of a calendar quarter, the income incentive fee shall be calculated for such calendar quarter at a weighted rate calculated based on the fee rates applicable before and after a Qualified IPO based on the number of days in such calendar quarter before and after the Qualified IPO. For the avoidance of doubt, such capital gains incentive fee shall be equal to 15.0% of the Company’s realized capital gains on a cumulative basis from Inception through the day before the Qualified IPO, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gains incentive fees. Following the Qualified IPO, solely for the purposes of calculating the capital gains incentive fee, the Company will be deemed to have previously paid capital gains incentive fees prior to a Qualified IPO equal to the product obtained by multiplying (a) the actual aggregate amount of previously paid capital gains incentive fees for all periods prior to the Qualified IPO by (b) the percentage obtained by dividing (x) 17.5% by (y) 15.0%. In the event that the Amended and Restated Investment Advisory Agreement shall terminate as of a date that is not a fiscal year end, the termination date shall be treated as though it were a fiscal year end for purposes of calculating and paying a capital gains incentive fee.

Pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during each calendar quarter, minus operating expenses for such quarter (including the base management fee, expenses payable under the Administration Agreement and any interest expense and distributions paid on any issued and outstanding debt or preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as market discount, original issue discount, debt instruments with PIK interest, preferred stock with PIK dividends and zero coupon securities), accrued income that the Company has not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Pre-incentive fee net investment income will be compared to a “Hurdle Amount” equal to the product of (i) the Hurdle rate of 1.50% or 1.75% per quarter, 6.00% or 7.00% annualized, prior to and effective February 1, 2020, respectively, and (ii) the Company’s net assets (defined as total assets less indebtedness, before taking into account any incentive fees payable during the period), at the end of the immediately preceding calendar quarter, subject to a “catch-up” provision incurred at the end of each calendar quarter.

For the three and six months ended June 30, 2020, the Company incurred income incentive fees of $0 and $0, respectively, which are net of waived amounts, of $2,267 and $4,199, respectively, of which $0 was payable at June 30, 2020. For the three and six months ended June 30, 2019, the Company incurred income incentive fees of $0 and $0, respectively, which are net of waived amounts, of $1,107 and $2,131, respectively, of which $0 was payable at June 30, 2019.

GAAP Incentive Fee on Cumulative Unrealized Capital Appreciation

The Company accrues, but does not pay, a portion of the Incentive Fee based on capital gains with respect to net unrealized appreciation. Under GAAP, the Company is required to accrue an Incentive Fee based on capital gains that includes net realized capital gains and losses and net unrealized capital appreciation and depreciation on investments held at the end of each period. In calculating the accrual for the Incentive Fee based on capital gains, the Company considers the cumulative aggregate unrealized capital appreciation in the calculation, since an Incentive Fee based on capital gains would be payable if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee payable under the Amended and Restated Investment Advisory Agreement. This accrual is calculated using the aggregate cumulative realized capital gains and losses and aggregate cumulative unrealized capital appreciation or depreciation. If such amount is positive at the end of a period, then the Company records a capital gains incentive fee equal to 15% (prior to February 3, 2020) or 17.5% (effective February 3, 2020) of such amount, minus the aggregate amount of actual Incentive Fees based on capital gains paid in all prior periods. If such amount is negative, then there is no accrual for such period. There can be no assurance that such unrealized capital appreciation will be realized in the future.

For the three and six months ended June 30, 2020 and 2019, the Company recorded no incentive fee on cumulative unrealized capital appreciation.

Other Related Party Transactions

From time to time, the Administrator may pay amounts owed by the Company to third-party providers of goods or services, including the Board, and the Company will subsequently reimburse the Administrator for such amounts paid on its behalf. Amounts payable to the Administrator are settled in the normal course of business without formal payment terms.

In conjunction with the closing of Alcentra Capital merger, the Company and the Advisor executed a Transaction Support Agreement, as described in Note 13.

A portion of the outstanding shares of the Company’s common stock are owned by Crescent Capital Group LP (“CCG LP”). CCG LP is also the majority member of the Advisor and sole member of the Administrator.

The Company has entered into a license agreement with CCG LP under which CCG LP granted the Company a non-exclusive, royalty-free license to use the name “Crescent Capital”. The Advisor has entered into a resource sharing agreement with CCG LP. CCG LP will provide the Advisor with the resources necessary for the Advisor to fulfill its obligations under the Investment Advisory Agreement.

Investments in and Advances to Affiliates

The Company’s investments in non-controlled affiliates for the six months ended June 30, 2020 were as follows (in thousands):


	Fair Value as of December 31, 2019		Gross Additions⁽²⁾		Gross Reductions⁽³⁾			Net Realized Gains/ (Losses)		Change in Unrealized Gains/ (Losses)			Fair Value as of June 30, 2020		Dividend, Interest, PIK and Other Income
Non-Controlled Affiliates
APC Auto Technology Intermediate, LLC	$	928	$	—	$	—		$	—	$	(928	)	$	—	$	—
Battery Solutions, Inc.		—		4,897		—			—		(862	)		4,035		80
Conisus, LLC		—		9,202		—			—		9,995			19,197		473
Slickdeals Holdings, LLC		15,933		40		(123	)		—		242			16,092		603
Vivid Seats Ltd.		3,646		—		—			—		(80	)		3,566		—
Total Non-Controlled Affiliates	$	20,507	$	14,139	$	(123	)	$	—	$	8,367		$	42,890	$	1,156

The Company’s investments in non-controlled affiliates for the six months ended June 30, 2019 were as follows (in thousands):


	Fair Value as of December 31, 2018		Gross Additions⁽²⁾		Gross Reductions⁽³⁾			Net Realized Gains/ (Losses)		Change in Unrealized Gains/ (Losses)		Fair Value as of June 30, 2019		Dividend, Interest, PIK and Other Income
Non-Controlled Affiliates
Slickdeals Holdings, LLC	$	12,096	$	23	$	(55	)	$	—	$	212	$	12,276	$	542
Vivid Seats Ltd.		3,389		1		—			—		404		3,794		35
Total Non-Controlled Affiliates	$	15,485	$	24	$	(55	)	$	—	$	616	$	16,070	$	577

The Company’s investments in controlled affiliates for the six months ended June 30, 2020 were as follows (in thousands):


	Fair Value as of December 31, 2019		Gross Additions⁽²⁾		Gross Reductions⁽³⁾			Net Realized Gains/ (Losses)		Change in Unrealized Gains/ (Losses)			Fair Value as of June 30, 2020		Dividend, Interest, PIK and Other Income
Controlled Affiliates
CBDC Senior Loan Fund LLC⁽¹⁾	$	34,442	$	6,000	$	(1,000	)	$	—	$	(8,929	)	$	30,513	$	800
Total Controlled Affiliates	$	34,442	$	6,000	$	(1,000	)	$	—	$	(8,929	)	$	30,513	$	800

The Company’s investments in controlled affiliates for the six months ended June 30, 2019 were as follows (in thousands):


	Fair Value as of December 31, 2018		Gross Additions⁽²⁾		Gross Reductions⁽³⁾		Net Realized Gains/ (Losses)		Change in Unrealized Gains/ (Losses)			Fair Value as of June 30, 2019		Dividend, Interest, PIK and Other Income
Controlled Affiliates
CBDC Senior Loan Fund LLC⁽¹⁾	$	—	$	27,500	$	—	$	—	$	(713	)	$	26,787	$	550
Total Controlled Affiliates	$	—	$	27,500	$	—	$	—	$	(713	)	$	26,787	$	550

(1) Together with Masterland Enterprise Holdings, Ltd. (“Masterland”, and collectively with the Company, the “Members”), the Company invests through the Senior Loan Fund. Although the Company owns more than 25% of the voting securities of the Senior Loan Fund, the Company does not have control over the Senior Loan Fund (other than for purposes of the Investment Company Act). See Note 4 “Investments”.

(2) Gross additions may include increases in the cost basis of investments resulting from new portfolio investments, PIK interest or dividends, the accretion of discounts, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category.

(3) Gross reductions may include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.

Note 4. Investments

The Company’s investments at any time may include securities and other financial instruments or other assets of any sort, including, without limitation, corporate and government bonds, convertible securities, collateralized loan obligations, term loans, trade claims, equity securities, privately negotiated securities, direct placements, working interests, warrants and investment derivatives (including, but not limited to credit default swaps, recovery swaps, total return swaps, options, forward contracts, and futures) (all of the foregoing collectively referred to in these consolidated financial statements as “investments”).

A “first lien” loan is typically senior on a lien basis to other liabilities in the issuer’s capital structure and has the benefit of a first-priority security interest in assets of the issuer. The security interest ranks above the security interest of any second-lien lenders in those assets.

“Unitranche” loans are first lien loans that may extend deeper in a company’s capital structure than traditional first lien debt and may provide for a waterfall of cash flow priority among different lenders in the unitranche loan. In certain instances, the Company may find another lender to provide the “first out” portion of such loan and retain the “last out” portion of such loan, in which case, the “first out” portion of the loan would generally receive priority with respect to payment of principal, interest and any other amounts due thereunder over the “last out” portion that the Company would continue to hold. In exchange for the greater risk of loss, the “last out” portion earns a higher interest rate.

“Second lien” investments are loans with a second priority lien on the assets of the portfolio company. The Company obtains security interests in the assets of the portfolio company that serve as collateral in support of the repayment of such loans. This collateral serves as collateral in support of the repayment of these loans.

The terms “mezzanine” or “unsecured debt” refers to an investment in a company that, among other factors, includes debt that generally ranks senior to a borrower’s equity securities and junior in right of payment to such borrower’s other indebtedness.

Under the 1940 Act, the Company is required to separately identify non-controlled investments where it owns 5% or more of a portfolio company’s outstanding voting securities and/or has the power to exercise control over the management or policies of such portfolio company as investments in “affiliated” companies. In addition, under the 1940 Act, the Company is required to separately identify investments where it owns more than 25% of a portfolio company’s outstanding voting securities and/or has the power to exercise control over the management or policies of such portfolio company as investments in “controlled” companies. Detailed information with respect to the Company’s non-controlled, non-affiliated; non-controlled, affiliated; and controlled affiliated investments is contained in the accompanying consolidated financial statements, including the Consolidated Schedule of Investments. The information in the following tables is presented on an aggregate portfolio basis, without regard to whether they are non-controlled non-affiliated, non-controlled affiliated or controlled affiliated investments.

Certain Risk Factors

In the ordinary course of business, the Company manages a variety of risks including market risk and liquidity risk. The Company identifies, measures and monitors risk through various control mechanisms, including trading limits and diversifying exposures and activities across a variety of instruments, markets and counterparties.

Market risk is the risk of potential adverse changes to the value of financial instruments because of changes in market conditions, including as a result of changes in the credit quality of a particular issuer, credit spreads, interest rates, and other movements and volatility in security prices or commodities. In particular, the Company may invest in issuers that are experiencing or have experienced financial or business difficulties (including difficulties resulting from the initiation or prospect of significant litigation or bankruptcy proceedings), which involves significant risks. The Company manages its exposure to market risk through the use of risk management strategies and various analytical monitoring techniques.

The Company’s investments may, at any time, include securities and other financial instruments or obligations that are illiquid or thinly traded, making purchase or sale of such securities and financial instruments at desired prices or in desired quantities difficult. Furthermore, the sale of any such investments may be possible only at substantial discounts, and it may be extremely difficult to value any such investments accurately.

Investments denominated in foreign currencies and foreign currency transactions may involve certain considerations and risks not typically associated with those of domestic origin, including unanticipated movements in the value of the foreign currency relative to the U.S. dollar.

Investments at fair value consisted of the following at June 30, 2020 and December 31, 2019 (in thousands):


	June 30, 2020							December 31, 2019
Investment Type	Cost		Fair Value		Unrealized Appreciation/ (Depreciation)			Cost		Fair Value		Unrealized Appreciation/ (Depreciation)
Senior Secured First Lien	$	386,626	$	361,668	$	(24,958	)	$	356,080	$	351,332	$	(4,748	)
Unitranche First Lien		314,202		307,197		(7,005	)		213,884		218,416		4,532
Unitranche First Lien - Last Out		15,652		14,426		(1,226	)		15,845		16,044		199
Senior Secured Second Lien		119,080		106,723		(12,357	)		64,801		58,887		(5,914	)
Unsecured Debt		8,693		8,694		1			7,381		7,414		33
Equity & Other		33,840		45,059		11,219			19,037		21,432		2,395
LLC/LP Equity Interests		59,532		51,467		(8,065	)		52,067		53,006		939

Total Investments	$	937,625	$	895,234	$	(42,391)		$	729,095	$	726,531	$	(2,564)

The industry composition of investments at fair value at June 30, 2020 and December 31, 2019 is as follows (in thousands):


Industry	Fair Value June 30, 2020		Percentage of Fair Value			Fair Value December 31, 2019		Percentage of Fair Value
Commercial & Professional Services	$	187,782		20.98	%	$	136,218		18.75	%
Health Care Equipment & Services		179,951		20.10			147,162		20.26
Software & Services		112,104		12.52			111,790		15.39
Consumer Services		100,030		11.17			68,380		9.41
Diversified Financials		68,432		7.64			60,288		8.30
Automobiles & Components		36,250		4.05			32,978		4.54
Insurance		35,131		3.93			30,991		4.27
Pharmaceuticals, Biotechnology & Life Sciences		27,324		3.05			11,500		1.58
Capital Goods		24,785		2.77			20,896		2.88
Retailing		23,332		2.61			22,271		3.06
Energy		20,325		2.27			13,162		1.81
Media & Entertainment		19,197		2.14			3,646		0.50
Food & Staples Retailing		17,094		1.91			33,300		4.58
Food, Beverage & Tobacco		11,464		1.28			4,261		0.59
Materials		11,047		1.23			11,137		1.53
Transportation		7,229		0.81			6,626		0.91
Telecommunication Services		3,775		0.42			—		—
Household & Personal Products		3,752		0.42			3,854		0.53
Consumer Durables & Apparel		3,454		0.39			3,256		0.45
Technology Hardware & Equipment		2,776		0.31			4,815		0.66

Total Investments	$	895,234		100.00	%	$	726,531		100.00	%

The geographic composition of investments at fair value at June 30, 2020 and December 31, 2019 is as follows (in thousands):


Geographic Region	Fair Value June 30, 2020		Percentage of Fair Value			Fair Value December 31, 2019		Percentage of Fair Value
United States	$	847,339		94.65	%	$	681,443		93.79	%
United Kingdom		21,852		2.44			8,038		1.11
Belgium		14,298		1.60			14,937		2.05
Netherlands		7,970		0.89			7,756		1.07
Canada		3,775		0.42			12,109		1.67
France		—		—			2,248		0.31

Total Investments	$	895,234		100.00	%	$	726,531		100.00	%

Senior Loan Fund

The Senior Loan Fund, an unconsolidated limited liability company, was formed on September 26, 2018 and commenced operations in February 2019. The Company invests together with Masterland through the Senior Loan Fund. Masterland is a wholly owned subsidiary of China Orient Asset Management (International) Holding Limited (HK). The Senior Loan Fund’s principal purpose is to make investments in broadly syndicated bank loans, either directly or indirectly through its wholly owned subsidiary, CBDC Senior Loan Sub LLC. The Company and Masterland have each subscribed to fund $40,000. Except under certain circumstances, contributions to the Senior Loan Fund cannot be redeemed. The Senior Loan Fund is managed by a four member board of managers, on which the Company and Masterland have equal representation. Investment decisions generally must be unanimously approved by a quorum of the board of managers. Since the Company does not have a controlling financial interest in the Senior Loan Fund, it is not consolidated. The Senior Loan Fund is an investment company and measured using the net asset value per share as a practical expedient for fair value.

The Company and Masterland had subscribed to fund and contributed the following to the Senior Loan Fund (in thousands):


	June 30, 2020						December 31, 2019
Member	Subscribed to fund		Contributed		Unfunded Commitment		Subscribed to fund		Contributed		Unfunded Commitment
Company	$	40,000	$	39,000	$	1,000	$	40,000	$	34,000	$	6,000
Masterland		40,000		39,000		1,000		40,000		34,000		6,000

Total	$	80,000	$	78,000	$	2,000	$	80,000	$	68,000	$	12,000

The Senior Loan Fund is capitalized pro rata with LLC equity interest as transactions are completed. The Senior Loan Fund has a revolving credit facility with Royal Bank of Canada (the “RBC Facility”), as amended, which permitted up to $300,000 of borrowings as of June 30, 2020. Borrowings under the RBC Facility are secured by all assets of CBDC Senior Loan Sub LLC. The interest rate on the credit facility is London Interbank Offered Rate (“LIBOR”), with no LIBOR floor, plus margin, which ranges between 1.25% and 1.45% based on pricing of the pledged collateral.

Below is a summary of the Senior Loan Fund’s portfolio as of June 30, 2020 and December 31, 2019 (in thousands):


	As of June 30, 2020			As of December 31, 2019
Total senior secured debt, at par	$	288,652		$	275,624
Total senior secured debt, at fair value	$	268,776		$	275,069
Weighted average current interest rate on senior secured debt⁽¹⁾		3.5	%		4.9	%
Number of borrowers in the Senior Loan Fund’s portfolio		180			169
Largest loan to a single borrower	$	3,465		$	3,500
Senior Secured First Lien investments as a % of total investments, at fair value		100.0	%		100.0	%
United States based investments as a % of total investments, at fair value		90.4	%		89.7	%
Non-accrual investments as % of total investment, at cost		0.0	%		0.0	%

⁽¹⁾	Computed as (a) the annual stated interest rate on accruing senior secured debt, divided by (b) total senior secured debt at par amount, excluding fully unfunded commitments.

Below is selected balance sheet information for the Senior Loan Fund as of June 30, 2020 and December 31, 2019 (in thousands):


	As of June 30, 2020		As of December 31, 2019
Selected Balance Sheet Information:
Total investments, at fair value	$	268,776	$	275,069
Cash and cash equivalents		9,257		7,958
Other assets		2,065		6,688

Total assets	$	280,098	$	289,715

Debt (net of deferred financing costs of $260 and $211, respectively)	$	211,240	$	205,789
Other liabilities		7,831		15,043

Total liabilities	$	219,071	$	220,832

Members’ Capital		61,027		68,883

Total liabilities and members’ capital	$	280,098	$	289,715

Below is selected statements of operations information for the Senior Loan Fund for the three and six months ended June 30, 2020 and June 30, 2019 (in thousands):


	For the three months ended June 30,						For the six months ended June 30,
	2020			2019			2020			2019
Selected Statements of Operations Information:
Total investment income	$	2,783		$	2,071		$	6,226		$	2,167

Expenses
Interest and other debt financing costs		1,144			831			2,751			838
Professional fees		14			15			22			105
Other general and administrative expenses		106			75			181			97

Total expenses		1,264			921			2,954			1,040

Net investment income (loss)		1,519			1,150			3,272			1,127

Net realized gain (loss) on investments		(184	)		42			(318	)		44
Net change in unrealized appreciation (depreciation) on investments		16,094			(1,036	)		(19,210	)		(1,496	)

Net increase (decrease) in members’ capital	$	17,429		$	156		$	(16,256	)	$	(325	)

Note 5. Fair Value of Financial Instruments

Investments

The following table presents fair value measurements of investments as of June 30, 2020 (in thousands):


Fair Value Hierarchy
	Level 1		Level 2		Level 3		Total
Senior Secured First Lien	$	—	$	43,305	$	318,363	$	361,668
Unitranche First Lien		—		16,689		290,508		307,197
Unitranche First Lien - Last Out		—		—		14,426		14,426
Senior Secured Second Lien		—		8,843		97,880		106,723
Unsecured Debt		—		—		8,694		8,694
Equity & Other		—		—		45,059		45,059
Subtotal	$	—	$	68,837	$	774,930	$	843,767
Investments Measured at NAV⁽¹⁾								51,467
Total Investments							$	895,234
Foreign Currency Forward Contracts	$	—	$	2,664	$	—	$	2,664

(1) In accordance with ASC 820-10, certain investments that are measured using the net asset value per shares (or its equivalent) as a practical expedient for fair value have not been classified in the fair value hierarchy. These investments are generally not redeemable. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Assets and Liabilities.

The following table presents fair value measurements of investments as of December 31, 2019 (in thousands):


Fair Value Hierarchy
	Level 1		Level 2		Level 3		Total
Senior Secured First Lien	$	—	$	83,139	$	268,193	$	351,332
Unitranche First Lien		—		—		218,416		218,416
Unitranche First Lien – Last Out		—		—		16,044		16,044
Senior Secured Second Lien		—		9,318		49,569		58,887
Unsecured Debt		—		—		7,414		7,414
Equity & Other		—		—		21,432		21,432
Subtotal	$	—	$	92,457	$	581,068	$	673,525
Investments Measured at NAV ⁽¹⁾								53,006
Total Investments							$	726,531
Foreign Currency Forward Contracts	$	—	$	693	$	—	$	693

The following table provides a reconciliation of the beginning and ending balances for total investments that use Level 3 inputs for the six months ended June 30, 2020, based off of the fair value hierarchy at June 30, 2020 (in thousands):


	Senior						Unitranche			Senior						Equity
	Secured			Unitranche			First -			Secured			Unsecured			&
	First Lien			First Lien			Last Out			Second Lien			Debt			Other			Total
Balance as of January 1, 2020	$	268,193		$	218,416		$	16,044		$	49,569		$	7,414		$	21,432		$	581,068
Amortized discounts/premiums		883			742			20			73			24			6			1,748
Paid in-kind interest		717			461			-			2			77			474			1,731
Net realized gain (loss)		(358	)		-			-			-			-			-			(358	)
Net change in unrealized appreciation (depreciation)		(14,690	)		(11,098	)		(1,425	)		(5,962	)		(32	)		8,824			(24,383	)
Purchases		90,552			105,298			-			54,198			1,211			14,323			265,582
Sales/return of capital/principal repayments/paydowns		(47,225	)		(23,311	)		(213	)		-			-			-			(70,749	)
Transfers in		20,291			-			-			-			-			-			20,291
Transfers out		-			-			-			-			-			-			-

Balance as of June 30, 2020	$	318,363		$	290,508		$	14,426		$	97,880		$	8,694		$	45,059		$	774,930


Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2020	$	(10,029	)	$	(9,086	)	$	(1,425	)	$	(3,748	)	$	3		$	(267	)	$	(24,552	)

During the six months ended June 30, 2020, the Company recorded $0 in transfers from Level 3 to Level 2 and $20,291 in transfers from Level 2 to Level 3 due to a decrease in observable inputs in market data.

The following table provides a reconciliation of the beginning and ending balances for total investments that use Level 3 inputs for the six months ended June 30, 2019, based off of the fair value hierarchy at June 30, 2019 (in thousands):


	Senior						Unitranche		Senior					Equity
	Secured			Unitranche			First -		Secured			Unsecured		&
	First Lien			First Lien			Last Out		Second Lien			Debt		Other		Total
Balance as of January 1, 2019	$	232,214		$	84,891		$	-	$	53,857		$	7,263	$	13,806	$	392,031
Amortized discounts/premiums		598			501			18		100			16		-		1,233
Paid in-kind interest		137			-			-		-			28		-		165
Net realized gain (loss)		(602	)		-			-		-			-		-		(602	)
Net change in unrealized appreciation (depreciation)		567			813			103		54			55		2,680		4,272
Purchases		74,596			47,180			16,012		2,425			29		612		140,854
Sales/return of capital/principal repayments/paydowns		(35,631	)		(17,445	)		-		(78	)		-		-		(53,154	)
Transfers in		6,637			-			-		-			-		-		6,637
Transfers out		(8,426	)		-			-		-			-		-		(8,426	)

Balance as of June 30, 2019	$	270,090		$	115,940		$	16,133	$	56,358		$	7,391	$	17,098	$	483,010


Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2019	$	1,098		$	1,404		$	103	$	(1,170	)	$	55	$	2,680	$	4,170

During the six months ended June 30, 2019, the Company recorded $8,426 in transfers from Level 3 to Level 2 and $6,637 in transfers from Level 2 to Level 3 due to an increase and a decrease in observable inputs in market data.

The following tables present the fair value of Level 3 investments and the ranges of significant unobservable inputs used to value the Company’s Level 3 investments as of June 30, 2020 and December 31, 2019. These ranges represent the significant unobservable inputs that were used in the valuation of each type of investment. These inputs are not representative of the inputs that could have been used in the valuation of any one investment. For example, the highest market yield presented in the table for senior secured first lien investments is appropriate for valuing a specific investment but may not be appropriate for valuing any other investment. Accordingly, the ranges of inputs presented below do not represent uncertainty in, or possible ranges of, fair value measurements of the Company’s Level 3 investments.


Quantitative information about Level 3 Fair Value Measurements

		Fair value as of June 30, 2020 (in thousands)	Valuation Techniques	Unobservable Input	Range (Weighted Average)

Senior Secured First Lien	$	246,641	Discounted Cash Flows	Discount Rate	6.1%-22.4% (8.5%	)

		19,642	Enterprise Value	Comparable EBITDA Multiple	5.7x-11.0x (7.4x	)

		52,080	Broker Quoted	Broker Quote	N/A

Subtotal:	$	318,363


Unitranche First Lien	$	272,597	Discounted Cash Flows	Discount Rate	6.4%-13.1% (8.0%	)

		5,219	Enterprise Value	Comparable EBITDA Multiple	8.3x

		12,692	Broker Quoted	Broker Quote	N/A

Subtotal	$	290,508


Unitranche First Lien - Last Out	$	7,761	Discounted Cash Flows	Discount Rate	6.7%-8.8% (7.8%	)

		6,665	Recovery Analysis	Recovery Analysis	90.7	%

Subtotal	$	14,426


Senior Secured Second Lien	$	78,305	Discounted Cash Flows	Discount Rate	9.3%-17.4% (11.3%	)

		4,638	Enterprise Value	Comparable EBITDA Multiple	11.7x

		14,937	Broker Quoted	Broker Quote	N/A

Subtotal:	$	97,880


Unsecured Debt	$	8,694	Discounted Cash Flows	Discount Rate	8.7%-19.6% (10.9%	)


Equity & Other	$	43,403	Enterprise Value	Comparable EBITDA Multiple	4.3x-17.3x (10.6x	)

		1,656	Broker Quoted	Broker Quote	N/A

Subtotal:	$	45,059


Quantitative information about Level 3 Fair Value Measurements

		Fair value as of December 31, 2019 (in thousands)	Valuation Techniques	Unobservable Input	Range (Weighted Average)

Senior Secured First Lien	$	213,314	Discounted Cash Flows	Discount Rate	6.3%-12.9% (7.4%	)

		7,488	Enterprise Value	Comparable EBITDA Multiple	11.7x

		47,391	Broker Quoted	Broker Quote	N/A

Subtotal:	$	268,193


Unitranche First Lien	$	199,952	Discounted Cash Flows	Discount Rate	6.5%-12.2% (8.1%	)

		34,508	Broker Quoted	Broker Quote	N/A

Subtotal	$	234,460


Senior Secured Second Lien	$	43,018	Discounted Cash Flows	Discount Rate	9.1%-15.6% (10.8%	)

		6,551	Enterprise Value	Comparable EBITDA Multiple	11.4x

Subtotal:	$	49,569


Unsecured Debt	$	7,414	Discounted Cash Flows	Discount Rate	11.0%-15.7% (11.5%	)


Preferred Stock	$	4,817	Enterprise Value	Comparable EBITDA Multiple	10.2x-17.9x (16.0x	)


Common Stock	$	16,615	Enterprise Value	Comparable EBITDA Multiple	7.3x-17.9x (14.0x	)

As noted above, the discounted cash flows and market multiple approaches were used in the determination of fair value of certain Level 3 assets as of June 30, 2020 and December 31, 2019. The significant unobservable inputs used in the discounted cash flow approach is the discount rate used to discount the estimated future cash flows expected to be received from the underlying investment, which include both future principal and interest payments. An increase in the discount rate would result in a decrease in the fair value. Included in the consideration and selection of discount rates is risk of default, rating of the investment, call provisions and comparable company investments. The significant unobservable inputs used in the market multiple approach are the multiples of similar companies’ earnings before income taxes, depreciation and amortization (“EBITDA”) and comparable market transactions. Increases or decreases in market EBITDA multiples would result in an increase or decrease in the fair value.

Note 6. Debt

Debt consisted of the following as of June 30, 2020 and December 31, 2019 (in thousands):


	June 30, 2020
	Aggregate Principal		Drawn		Amount		Carrying		Weighted Average Debt		Weighted Average Interest
	Amount Committed		Amount		Available⁽¹⁾		Value⁽²⁾		Outstanding		Rate
SPV Asset Facility	$	350,000	$	235,960	$	114,040	$	235,960	$	226,440		2.42	%
Corporate Revolving Facility		200,000		147,955		52,045		147,955		152,533		2.65	%
InterNotes^®		16,418		16,418		—		16,418		24,421		6.40	%

Total Debt	$	566,418	$	400,333	$	166,085	$	400,333	$	403,394		2.67	%


	December 31, 2019
	Aggregate Principal		Drawn		Amount		Carrying		Weighted Average Debt		Weighted Average Interest
	Amount Committed		Amount		Available⁽¹⁾		Value⁽²⁾		Outstanding		Rate
SPV Asset Facility	$	250,000	$	220,687	$	29,313	$	220,687	$	200,975		4.03	%
Corporate Revolving Facility		200,000		104,754		95,246		104,754		74,930		4.26	%

Total Debt	$	450,000	$	325,441	$	124,559	$	325,441	$	275,905		4.10	%

(1)	The amount available is subject to any limitations related to the respective debt facilities’ borrowing bases and foreign currency translation adjustments.

(2)	The amount presented excludes netting of deferred financing costs.

As of June 30, 2020 and December 31, 2019, the carrying amount of the Company’s outstanding debt approximated fair value. The fair values of the Company’s debt are determined in accordance with ASC 820, which defines fair value in terms of the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value of the Company’s debt is estimated based upon market interest rates and entities with similar credit risk. As of June 30, 2020 and December 31, 2019, the debt would be deemed to be Level 3 of the fair value hierarchy.

As of June 30, 2020 and December 31, 2019, the Company was in compliance with the terms and covenants of its debt arrangements.

SPV Asset Facility

On March 28, 2016, Crescent Capital BDC Funding, LLC (“CCAP SPV”), a wholly owned subsidiary of CCAP, entered into a loan and security agreement, as amended (the “SPV Asset Facility”), with the Company as the collateral manager, seller and equityholder, CCAP SPV as the borrower, the banks and other financial institutions from time to time party thereto as lenders, and Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent, collateral agent, and lender. Between February 8, 2017 and March 10, 2020, the Company has entered into multiple amendments to the SPV Asset Facility to, among other things, increase the facility limit from $75,000 to $350,000.

The maximum commitment amount under the SPV Asset Facility is $350,000, and may be increased with the consent of Wells Fargo or reduced upon request of the Company. Proceeds of the advances under the SPV Asset Facility may be used to acquire portfolio investments, to make distributions to the Company in accordance with the SPV Asset Facility, and to pay related expenses. The maturity date is the earlier of: (a) the date the Borrower voluntarily reduces the commitments to zero, (b) March 10, 2025 (the Facility Maturity Date) and (c) the date upon which Wells Fargo declares the obligations due and payable after the occurrence of an Event of Default. Borrowings under the SPV Asset Facility bear interest at LIBOR plus a margin with no LIBOR floor. The margin is between 1.65% and 2.20% as determined by the proportion of liquid and illiquid loans pledged to the SPV Asset Facility. The Company pays unused facility fees of 0.50% per annum on committed but undrawn amounts under the SPV Asset Facility. The SPV Asset Facility includes customary covenants, including certain limitations on the incurrence of additional indebtedness and liens, as well as usual and customary events of default for revolving credit facilities of this nature.

Also on March 28, 2016, the Company, as Seller, and CCAP SPV, as Purchaser, entered into a loan sale agreement whereby the Company will sell certain assets to CCAP SPV. CCAP SPV will be consolidated into the Company’s financial statements and no gain or loss is expected to result from the sale of assets to CCAP SPV. The Company retains a residual interest in assets contributed to or acquired by CCAP SPV through its 100% ownership of CCAP SPV. The facility size is subject to availability under the borrowing base, which is based on the amount of CCAP SPV’s assets from time to time, and satisfaction of certain conditions, including certain concentration limits.

Costs incurred in connection with obtaining the SPV Asset Facility and subsequent amendments have been recorded as deferred financing costs and are being amortized over the life of the SPV Asset Facility on an effective yield basis. As of June 30, 2020 and December 31, 2019, deferred financing costs related to the SPV Asset Facility were $2,844 and $1,508, respectively, and were included in debt on the Consolidated Statements of Assets and Liabilities.

Corporate Revolving Facility

On August 20, 2019, the Company entered into the “Corporate Revolving Facility” with Ally Bank (“Ally”), as Administrative Agent and Arranger. Proceeds of the advances under the Revolving Credit Agreement may be used to acquire portfolio investments, to make distributions to the Company in accordance with the Revolving Credit Agreement and to pay related expenses. The maximum principal amount of the Corporate Revolving Facility is $200,000, subject to availability under the borrowing base.

Borrowings under the Corporate Revolving Facility bear interest at LIBOR plus a 2.30% margin with no LIBOR floor. The Company pays unused facility fees of 0.50% per annum on committed but undrawn amounts under the Corporate Revolving Facility. Interest is payable monthly in arrears. Any amounts borrowed under the Corporate Revolving Facility, and all accrued and unpaid interest, will be due and payable, on August 20, 2024.

Costs incurred in connection with obtaining the Corporate Revolving Facility have been recorded as deferred financing costs and are being amortized over the life of the Corporate Revolving Facility on an effective yield basis. As of June 30, 2020 and December 31, 2019, deferred financing costs related to the Corporate Revolving Facility were $1,660 and $1,923, respectively, and were included in debt on the Consolidated Statements of Assets and Liabilities.

The Corporate Revolving Facility replaced the prior corporate revolving facility with Capital One, National Association, as Administrative Agent, Lead Arranger, Managing Agent and Committed Lender. The maximum principal amount of the prior corporate revolving facility was $85,000, subject to availability under the borrowing base.

Borrowings under the prior corporate revolving facility bore interest at LIBOR plus a 1.55% margin with no LIBOR floor. The Company paid unused facility fees of 0.20% per annum on committed but undrawn amounts under the prior corporate revolving facility. Interest was payable monthly in arrears. The Company paid down in full and terminated the prior corporate revolving facility on August 20, 2019.

InterNotes^®

On January 31, 2020, in connection with the Alcentra Acquisition, the Company assumed direct unsecured fixed interest rate obligations or “InterNotes^®”. The majority of InterNotes^® were issued by Alcentra Corporation between January 2015 and January 2016. Each series of notes has been issued by a separate trust administered by U.S. Bank.

As of June 30, 2020, the outstanding InterNotes^® bear interest at fixed interest rates ranging between 6.25% and 6.75% and offer a variety of maturities ranging between February 15, 2021 and April 15, 2022.

Summary of Interest and Credit Facility Expenses

The summary information regarding the SPV Asset Facility, Corporate Revolving Facility, Internotes ^®, and prior corporate revolving facility for the three and six months ended June 30, 2020 and 2019 were as follows (in thousands):


	For the three months ended June 30,						For the six months ended June 30,
	2020			2019			2020			2019
Borrowing interest expense	$	3,157		$	2,860		$	7,029		$	5,466
Unused facility fees		191			76			336			102
Amortization of financing costs		283			237			615			414

Total interest and credit facility expenses	$	3,631		$	3,173		$	7,980		$	5,982

Weighted average interest rate		2.98	%		4.50	%		3.44	%		4.53	%
Weighted average outstanding balance	$	417,847		$	254,831		$	403,394		$	243,352

Note 7. Derivatives

The Company enters into foreign currency forward contracts from time to time to help mitigate the impact that an adverse change in foreign exchange rates would have on the value of the Company’s investments denominated in foreign currencies.

In order to better define its contractual rights and to secure rights that will help the Company mitigate its counterparty risk, the Company may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or a similar agreement with its derivative counterparties. An ISDA Master Agreement is a bilateral agreement between the Company and a counterparty that governs OTC derivatives, including foreign currency forward contracts, and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of a default (close-out netting) or similar event, including the bankruptcy or insolvency of the counterparty.

For financial reporting purposes, cash collateral that has been pledged to cover obligations of the Company and cash collateral received from the counterparty, if any, is included in the Consolidated Statement of Assets and Liabilities as due to/due from broker. There has been no cash collateral received or paid from the counterparty. The Company minimizes counterparty credit risk by only entering into agreements with counterparties that they believe to be of good standing and by monitoring the financial stability of those counterparties. All of the forward contracts qualify as Level 2 financial instruments.

For the six months ended June 30, 2020, and 2019, the Company’s average USD notional exposure to foreign currency forward contracts was $31,433 and $19,126, respectively.

The following table sets forth the Company’s net exposure to foreign currency forward contracts that are subject to ISDA Master Agreements or similar agreements as of June 30, 2020 and December 31, 2019.

As of June 30, 2020 (in thousands):


	Gross Amount		Gross Amount			Net Amount of Assets
	of Assets on		of (Liabilities) on			or (Liabilities)
	the Consolidated		the Consolidated			Presented on the
	Statements of		Statements of			Consolidated		Collateral
	Assets and		Assets and			Statements of		(Received)		Net
Counterparty	Liabilities		Liabilities			Assets and Liabilities		Pledged⁽¹⁾		Amounts⁽²⁾
Wells Fargo Bank, N.A.	$	2,672	$	(8	)	$	2,664	$	—	$	2,664

Total	$	2,672	$	(8	)	$	2,664	$	—	$	2,664


As of December 31, 2019 (in thousands):

	Gross Amount		Gross Amount			Net Amount of Assets
	of Assets on		of (Liabilities) on			or (Liabilities)
	the Consolidated		the Consolidated			Presented on the
	Statements of		Statements of			Consolidated		Collateral
	Assets and		Assets and			Statements of		(Received)		Net
Counterparty	Liabilities		Liabilities			Assets and Liabilities		Pledged⁽¹⁾		Amounts⁽²⁾
Wells Fargo Bank, N.A.	$	758	$	(65	)	$	693	$	—	$	693

Total	$	758	$	(65	)	$	693	$	—	$	693

(1)	Amount excludes excess cash collateral paid.

(2)	Net amount represents the net amount due (to) from counterparty in the event of a default based on the contractual setoff rights under the agreement. Net amount excludes any over-collateralized amounts.

The effect of transactions in derivative instruments to the Consolidated Statements of Operations for the three and six months ended June 30, 2020 and June 30, 2019 was as follows (in thousands):


	For the three months ended June 30,					For the six months ended June 30,
	2020			2019		2020		2019
Net realized gain (loss) on foreign currency forward contracts	$	—		$	—	$	—	$	—
Net change in unrealized appreciation (depreciation) on foreign currency forward contracts		(218	)		309		1,972		282

Total net realized and unrealized gains (losses) on foreign currency forward contracts	$	(218	)	$	309	$	1,972	$	282

Note 8. Commitments, Contingencies and Indemnifications

The Company’s investment portfolio may contain debt investments that are in the form of lines of credit and unfunded delayed draw commitments, which require the Company to provide funding when requested by portfolio companies in accordance with the terms of the underlying loan agreements. Unfunded commitments to provide funds to portfolio companies are not reflected on the Company’s Consolidated Statements of Assets and Liabilities. The Company’s unfunded commitments may be significant from time to time. These commitments will be subject to the same underwriting and ongoing portfolio maintenance as are the on-balance sheet financial instruments that the Company holds. Since these commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. As of June 30, 2020 and December 31, 2019, the Company had aggregated unfunded commitments totaling $66,591 and $82,745 including foreign denominated commitments converted to USD at the balance sheet date, respectively, under loan and financing agreements.

As of June 30, 2020 and December 31, 2019, the Company has the following unfunded commitments to portfolio companies (in thousands):


	June 30, 2020							December 31, 2019
	Commitment Expiration Date⁽¹⁾		Unfunded Commitment ⁽²⁾		Fair Value⁽³⁾			Commitment Expiration Date⁽¹⁾		Unfunded Commitment ⁽²⁾		Fair Value⁽³⁾
1st Lien/Senior Secured Debt/Unitranche First Lien
Abode Healthcare, Inc.		8/25/2025	$	918	$	(8	)		8/25/2025	$	862	$	(13	)
Affinitiv, Inc.		8/26/2024		567		(30	)		8/26/2024		850		—
Ameda, Inc.		9/29/2022		113		(10	)		9/29/2022		113		(2	)
Ansira Partners, Inc.		—		—		—			4/16/2020		322		(18	)
Auto-Vehicle Parts, LLC		1/3/2023		600		(28	)		1/3/2023		600		(2	)
Avaap USA LLC		3/22/2023		520		(10	)		3/22/2023		650		7
Benesys, Inc.		10/5/2024		60		(3	)		10/5/2024		102		(2	)
BFC Solmetex LLC & Bonded Filter Co. LLC		—		—		—			11/16/2020		850		—
BFC Solmetex LLC & Bonded Filter Co. LLC		—		—		—			9/26/2023		240		—
C-4 Analytics, LLC		8/22/2023		600		(11	)		8/22/2023		600		—
CAT Buyer, LLC		4/11/2024		550		(14	)		4/11/2024		399		(2	)
CC SAG Acquisition Corp.		9/9/2021		1,898		(21	)		9/9/2021		2,128		(15	)
CC SAG Acquisition Corp.		9/9/2025		1,050		(12	)		9/9/2025		1,050		(7	)
Centauri Health Solutions, Inc.		—		—		—			1/31/2022		1,575		16
Centria Subsidiary Holdings, LLC		12/09/2025		1,026		(20	)		12/9/2025		1,974		—
Claritas, LLC		12/21/2023		83		(1	)		12/21/2023		180		—
Colibri Group LLC		—		—		—			5/1/2025		733		(1	)
Continental Battery Company		—		—		—			1/15/2020		1,811		—
Continental Battery Company		12/14/2022		850		(9	)		12/14/2022		170		—
COP Home Services Holdings, Inc.		5/13/2025		464		(17	)		5/13/2025		464		(2	)
CRA MSO, LLC		—		—		—			8/31/2020		1,000		—


	June 30, 2020							December 31, 2019
	Commitment Expiration Date⁽¹⁾		Unfunded Commitment ⁽²⁾		Fair Value⁽³⁾			Commitment Expiration Date⁽¹⁾		Unfunded Commitment ⁽²⁾		Fair Value⁽³⁾
CRA MSO, LLC		12/17/2023		60		(2	)		12/17/2023		200		—
CRA MSO, LLC		—		—		—			5/13/2021		697		(3	)
Crusoe Bidco Limited		—		—		—			12/2/2025		340		(3	)
DFS Intermediate Holdings, LLC		9/18/2020		328		(6	)		9/18/2020		328		—
DFS Intermediate Holdings, LLC		3/31/2022		1,762		(31	)		3/31/2022		336		—
EiKo Global, LLC		6/1/2023		450		(10	)		6/1/2023		750		—
Empire Auto Parts, LLC		9/5/2023		400		(20	)		9/5/2023		400		4
GrapeTree Medical Staffing, LLC		10/19/2020		450		(6	)		10/19/2022		450		—
Hepaco, LLC		8/31/2023		779		(34	)		8/31/2023		257		—
Hepaco, LLC		10/15/2020		112		(5	)		—		—		—
HGH Purchaser, Inc.		11/1/2021		3,378		(102	)		11/1/2021		3,378		—
HGH Purchaser, Inc.		11/1/2025		659		(20	)		11/1/2025		828		—
Hsid Acquisition, LLC		1/31/2022		2,900		(119	)		—		—		—
Hsid Acquisition, LLC		1/31/2026		225		(9	)
ISS Compressors Industries, Inc.		2/5/2026		21		(1	)		—		—		—
Integrity Marketing Acquisition, LLC		—		—		—			10/15/2020		333		—
Integrity Marketing Acquisition, LLC		—		—		—			2/29/2020		1,576		(8	)
Integrity Marketing Acquisition, LLC		—		—		—			2/27/2021		3,095		(15	)
Integrity Marketing Acquisition, LLC		8/27/2025		1,409		(43	)		8/27/2025		1,409		(7	)
Kestrel Parent, LLC		11/13/2023		871		(11	)		11/13/2023		871		13
Learn-It Systems, LLC		3/18/2022		1,950		(112	)		3/18/2022		2,288		—
Learn-It Systems, LLC		3/18/2025		600		(35	)		3/18/2025		108		—
List Partners, Inc.		—		—		—			7/6/2022		156		1
List Partners, Inc.		1/5/2023		450		(8	)		1/5/2023		450		3
Lightspeed Buyer, Inc.		8/3/2021		1,800		(44	)		—		—		—
Mann Lake Ltd.		10/4/2024		600		(36	)		10/4/2024		456		(5	)
Maroon Group, LLC		8/31/2022		1		—			8/31/2022		252		—
Midwest Industrial Rubber		—		—		—			12/2/2021		525		—
Manna Pro Products, LLC		12/8/2023		2,067		(52	)		—		—		—
MRI Software LLC		2/10/2022		1,304		(49	)		—		—		—
MRI Software LLC		2/10/2026		1,266		(47	)		—		—		—
New Mountain Learning		3/16/2024		24		—			3/16/2024		125		(17	)
Omni Ophthalmic Management Consultants, LLC		—		—		—			7/10/2019		1,150		(4	)
Omni Ophthalmic Management Consultants, LLC		—		—		—			9/22/2021		850		(3	)
Omni Ophthalmic Management Consultants, LLC		5/31/2021		623		(41	)		—		—		—
Ontario Systems, LLC		9/5/2021		1,100		(25	)		9/5/2021		1,100		—
Ontario Systems, LLC		8/30/2025		400		(9	)		8/30/2025		500		—
Pilot Air Freight, LLC		7/25/2020		425		(13	)		7/25/2020		1,200		—
Pilot Air Freight, LLC		7/25/2024		2		—			7/25/2024		100		—
Pinnacle Treatment Centers, Inc.		1/17/2022		1,143		(18	)		—		—		—
Pinnacle Treatment Centers, Inc.		12/31/2022		371		(6	)		—		—		—
POC Investors, LLC		11/10/2021		1,000		(11	)		11/10/2021		1,000		—
Potter Electric Signal Company		12/19/2021		1,113		(39	)		12/19/2021		1,113		(6	)
Potter Electric Signal Company		—		—		—			12/19/2022		519		(3	)
Potter Electric Signal Company		12/19/2024		4		—			—		—		—
Prism Bidco, Inc.		6/25/2026		833		—			—		—		—
PT Network, LLC		11/30/2021		400		(30	)		11/30/2021		400		(8	)
Pye-Barker Fire & Safety, LLC		11/26/2021		2,250		(61	)		11/26/2021		3,750		—
Receivable Solutions, Inc.		10/1/2024		180		(5	)		10/1/2024		270		—
Right Networks, LLC		11/4/2024		233		(2	)		11/4/2024		233		—
Ruffalo Noel Levitz, LLC		5/29/2022		60		(2	)		5/29/2022		300		(2	)
Safco Dental Supply, LLC		6/14/2025		300		(14	)		6/14/2025		600		—
SavATree, LLC		3/31/2021		187		(4	)		3/31/2021		745		—
SavATree, LLC		6/2/2022		189		(4	)		6/2/2022		550		—
Slickdeals Holdings, LLC		6/12/2023		727		(7	)		6/12/2023		727		—
Smile Brands, Inc.		10/12/2020		191		(10	)		10/12/2020		419		(2	)
Smile Brands, Inc.		10/12/2023		300		(16	)		10/12/2023		260		(1	)
Smile Doctors LLC		7/30/2021		7,576		(210	)		7/30/2021		198		—
Smile Doctors LLC		—		—		—			10/6/2022		170		—
Spear Education		2/3/2026		3,125		(48	)		—		—		—


	June 30, 2020							December 31, 2019
	Commitment Expiration Date⁽¹⁾		Unfunded Commitment ⁽²⁾		Fair Value⁽³⁾			Commitment Expiration Date⁽¹⁾		Unfunded Commitment ⁽²⁾		Fair Value⁽³⁾
The Hilb Group, LLC		12/2/2021		832		—			12/2/2021		1,020		(8	)
The Hilb Group, LLC		12/2/2025		109		—			—		—		—
Teaching Strategies LLC		5/14/2024		447		(12	)		5/14/2024		447		4
Transportation Insight, LLC		—		—		—			12/18/2020		576		(3	)
Transportation Insight, LLC		12/3/2024		113		(7	)		12/3/2024		750		(4	)
Tranzonic		3/27/2023		550		(10	)		3/27/2023		550		—
Trinity Partners, LLC		2/21/2023		225		(5	)		2/21/2023		450		—
Unifeye Vision Partners		9/13/2021		3,050		(102	)		9/13/2021		3,050		—
Unifeye Vision Partners		—		—		—			9/13/2025		1,473		—
UP Acquisition Corp		5/23/2024		—		—			1/31/2020		1,624		—
UP Acquisition Corp		5/23/2024		859		(47	)		5/23/2024		1,177		—
Winxnet Holdings LLC		6/29/2020		—		—			6/29/2020		400		(5	)
Winxnet Holdings LLC		6/29/2023		160		(4	)		6/29/2023		320		(4	)
Wrench Group LLC		—		—		—			4/30/2021		1,035		3
Auction Technology Group		8/12/2026		447		72			—		—		—
Crusoe Bidco Limited		12/5/2020		486		93			12/5/2020		2,977		730
Crusoe Bidco Limited		12/5/2022		528		101			12/5/2022		2,233		547
PharComp Parent B.V.		2/18/2023		1,888		207			2/18/2023		2,096		229

Total 1st Lien/Senior Secured Debt/Unitranche First Lien				65,591		(1,285	)				72,613		1,382

2nd Lien/Senior Secured Debt
NMN Holdings III Corp.		—		—		—			11/13/2020		1,667		(9	)

Total 2nd Lien/Senior Secured Debt				—		—					1,667		(9	)

LLC/LP Equity Interests
CBDC Senior Loan Fund LLC		—	$	1,000	$	(212	)		—	$	6,000	$	66
GACP II LP		—		—		—			—		2,465		49

Total LLC/LP Equity Interests		—		1,000		(212	)		—		8,465		115

Total			$	66,591	$	(1,497	)			$	82,745	$	1,488

⁽¹⁾	Commitments are generally subject to borrowers meeting certain criteria such as compliance with covenants and certain operational metrics. These amounts may remain outstanding until the commitment period of an applicable loan expires, which may be shorter than its maturity.

⁽²⁾	Unfunded commitments denominated in currencies other than USD have been converted to USD using the applicable foreign currency exchange rate as of June 30, 2020 and December 31, 2019.

⁽³⁾	The fair value is reflected as investments, at fair value in the Consolidated Statements of Assets and Liabilities.

As of June 30, 2020, the Company believes that there is sufficient assets and liquidity to adequately cover future obligations under unfunded commitments. The cash and restricted cash balances, availability under the credit facilities and ongoing investment realizations are expected to provide sufficient liquidity. In addition, broadly syndicated loans in the portfolio could be sold over a relatively short period to generate cash.

Other Commitments and Contingencies

In the normal course of business, the Company enters into contracts which provide a variety of representations and warranties, and that provide general indemnifications. Such contracts include those with certain service providers, brokers and trading counterparties. Any exposure to the Company under these arrangements is unknown as it would involve future claims that may be made against the Company; however, based on the Company’s experience, the risk of loss is remote and no such claims are expected to occur. As such, the Company has not accrued any liability in connection with such indemnifications.

Note 9. Stockholders’ Equity

The Company has authorized 200,000,000 shares of its common stock with a par value of $0.001 per share. The Company has authorized 10,000 shares of its preferred stock with a par value of $0.001 per share. To date, no shares of preferred stock have been issued.

Between June 26, 2015, commencement of operations, and January 31, 2020, the date of Alcentra Acquisition, the Company entered into subscription agreements (collectively, the “Subscription Agreements”) with several investors, including CCG LP, providing for the private placement of its common shares. Pursuant to the Subscription Agreements, between June 26, 2015 and January 31, 2020, the Company issued 23,127,335 common shares for aggregate proceeds of $456,297, of which $10,000 was from CCG LP. Proceeds from the issuances were used to fund investing activities and for other general corporate purposes. Upon closing of the Alcentra Acquisition, all unfunded commitments of stockholders subscribing in private offering were terminated.

The following table summarizes the total shares issued and amount received related to capital drawdowns delivered pursuant to the Subscription Agreements for the applicable quarters through January 31, 2020, the date of the termination of private placement commitments (in thousands, except share data):


Quarter Ended	Shares		Amount
March 31, 2020		2,265,021	$	44,297
December 31, 2019		1,288,461		25,000
September 30, 2019		3,284,155		65,000
June 30, 2019		1,524,312		30,000
March 31, 2019		1,330,128		26,000

For the six months ended June 30, 2020 and 2019, the Company issued 30,128 and 33,067 new common shares, respectively, in connection with its dividend reinvestment plan.

The following table summarizes the Company’s recent distributions declared:


Date Declared	Record Date	Payment Date	Amount Per Share
May 11, 2020	June 30, 2020	July 15, 2020	$	0.41
March 3, 2020	March 31, 2020	April 15, 2020	$	0.41
November 8, 2019	December 30, 2019	January 17, 2020	$	0.41
September 27, 2019	September 27, 2019	October 18, 2019	$	0.41
June 28, 2019	June 28, 2019	July 18, 2019	$	0.41
March 29, 2019	March 29, 2019	April 12, 2019	$	0.41

At June 30, 2020 and December 31, 2019, CCG LP and its affiliates owned 1.80% and 2.23%, respectively, of the outstanding common shares of the Company.

Note 10. 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 June 30, 2020 and December 31, 2019, there are no dilutive shares.

The following table sets forth the computation of the weighted average basic and diluted net increase in net assets per share from operations for the following periods (in thousands):


	For the three months ended June 30,				For the six months ended June 30,
	2020		2019		2020			2019
Net increase (decrease) in net assets resulting from operations	$	56,417	$	8,512	$	(18,128	)	$	17,372
Weighted average common shares outstanding		28,168,643		15,703,473		27,190,817			15,087,362
Net increase (decrease) in net assets resulting from operations per common share-basic and diluted	$	2.00	$	0.54	$	(0.67	)	$	1.15

Note 11. Income Taxes

As of June 30, 2020, the Company’s aggregate investment unrealized appreciation and depreciation for federal income tax purposes was (in thousands):


Tax cost	$	966,639

Gross unrealized appreciation	$	18,244
Gross unrealized depreciation		(89,649	)

Net unrealized investment depreciation	$	(71,405	)

As of December 31, 2019, the Company’s aggregate investment unrealized appreciation and depreciation for federal income tax purposes was (in thousands):


Tax cost	$	730,999

Gross unrealized appreciation	$	14,809
Gross unrealized depreciation		(19,277	)

Net unrealized investment depreciation	$	(4,468	)

Note 12. Financial Highlights

Below is the schedule of financial highlights of the Company for the six months ended June 30, 2020 and 2019 (in thousands, except share and per share data):


	For the six months ended June 30, 2020			For the six months ended June 30, 2019
Per Share Data:⁽¹⁾
Net asset value, beginning of period	$	19.50		$	19.43

Net investment income after tax		0.90			0.94
Net realized and unrealized gains (losses) on investments, asset acquisition and forward contracts, net of taxes		(1.57	)		0.21

Net increase (decrease) in net assets resulting from operations		(0.67	)		1.15

Effect of equity issuances, net of share repurchases		0.11			—

Distributions declared from net investment income⁽²⁾		(0.82	)		(0.82	)
Offering costs		—			(0.01	)

Total increase (decrease) in net assets		(1.38	)		0.32


Net asset value, end of period	$	18.12		$	19.75

Shares outstanding, end of period		28,167,360			16,245,796
Weighted average shares outstanding		27,190,817			15,087,362
Total return⁽³⁾⁽⁴⁾		(1.45	)%		11.76	%

Ratio/Supplemental Data:
Net assets, end of period	$	510,298		$	320,784
Ratio of total net expenses to average net assets⁽⁵⁾⁽⁶⁾		5.79	%		6.77	%
Ratio of net expenses (without incentive fees and interest and other debt expenses) to average net assets⁽⁶⁾		2.31	%		2.60	%
Ratio of net investment income before taxes to average net assets⁽⁶⁾		10.82	%		9.93	%
Ratio of interest and credit facility expenses to average net assets⁽⁴⁾		3.47	%		4.17	%
Ratio of net incentive fees to average net assets⁽⁴⁾		—	%		—	%
Ratio of portfolio turnover to average investments at fair value⁽⁷⁾		15.22	%		10.91	%
Asset coverage ratio		2.26			2.18

⁽¹⁾	Based on actual number of shares outstanding at the end of the corresponding period or the weighted average shares outstanding for the period, unless otherwise noted, as appropriate.

⁽²⁾	The per share data for distributions per share reflects the actual amount of distributions declared per share for the applicable periods.

⁽³⁾	Total return based on net asset value is calculated as the change in net asset value per share during the period plus declared dividends per share during the period, divided by the beginning net asset value per share.

⁽⁴⁾	Annualized.

⁽⁵⁾

The ratio of total expenses to average net assets in the table above reflects the Advisor’s voluntary waivers of its right to receive a portion of the management fees and income incentive fees with respect to the Company’s ownership in GACP II. Excluding the effects of waivers, the ratio of total expenses to average net assets would have been 5.82% and 6.82% for the three and six months ended June 30, 2020 and 2019, respectively.

⁽⁶⁾	Annualized except for organization expenses.

⁽⁷⁾	Not annualized.

Note 13. Alcentra Acquisition

On August 12, 2019, the Company entered into an Agreement and Plan of Merger (as amended on September 27, 2019, the “Merger Agreement”) to acquire Alcentra Capital Corporation (“Alcentra Capital”) in a cash and stock transaction (the “Alcentra Acquisition”).

In connection with the Alcentra Acquisition, which was completed on January 31, 2020, each share of Alcentra Capital common stock issued and outstanding immediately prior to the effective time of the Alcentra Acquisition was converted into the right to receive from the Company, in accordance with the Merger Agreement, (a) approximately $1.50 per share in cash consideration less $0.80 per share spillover dividend declared by Alcentra Capital, and (b) stock consideration at the fixed exchange ratio of 0.4041 shares, par value $0.001 per share, of the Company’s common stock (the “Exchange Ratio”) (and, if applicable, cash in lieu of fractional shares of the Company’s common stock). The Exchange Ratio was fixed on the date of the Merger Agreement, and was not subject to adjustment based on changes in the trading price of Alcentra Capital’s common stock before the closing of the Alcentra Acquisition. Based on the number of shares of Alcentra Capital common stock outstanding on the date of the merger, approximately 5,203,016 of the Company’s shares of common stock were exchanged for approximately 12,875,566 outstanding shares of Alcentra Capital common stock, subject to adjustment in certain limited circumstances. Upon closing of the Alcentra Acquisition, all unfunded commitments of stockholders subscribing in private offering were terminated.

Additionally, on August 12, 2019, the Company entered into an agreement with the Advisor in connection with the Alcentra Acquisition. Under the terms of the Transaction Support Agreement, in connection with the consummation of the Alcentra Acquisition the Advisor (a) provided cash consideration of approximately $1.68 per share of Alcentra Capital common stock, payable to Alcentra Capital stockholders in accordance with the terms and conditions set forth in the Merger Agreement at closing, (b) entered into an amendment to the Investment Advisory Agreement to (i) permanently reduce the management fee from 1.5% to 1.25%, (ii) increase the incentive fee hurdle from 6% to 7% annualized, (iii) waive a portion of the management fee from February 1, 2020 through July 31, 2021 after the transaction so that only 0.75% shall be charged for such time period, and (iv) waive the income based portion of the incentive fee from February 1, 2020 through July 31, 2021 after the transaction and (c) fund up to $1,419 of expenses that the Company incurs in connection with completing the Alcentra Acquisition.

The merger of Alcentra Capital with and into Crescent Capital BDC was accounted for as an asset acquisition in accordance with ASC 805-50, Business Combinations-Related Issues. Accordingly, transaction expenses of $7,250, net of Advisor transaction support of $1,419, were included in total consideration paid, and no goodwill was recognized.

In evaluating whether the merger was an asset acquisition or business combination, the Company considered (i) whether substantially all of the fair value of the gross assets acquired was concentrated in a single identifiable asset or group of similar identifiable assets; and (ii) whether the set of acquired assets included at least one substantive process. Since the acquired assets consisted of similar classes of financial assets, and since the Company did not acquire an organized workforce or other substantive processes in the transaction, it was deemed to be an asset acquisition.

Total consideration paid by the Company, including transaction costs related to the merger, of $118,256 was allocated to the acquired assets and assumed liabilities based upon their relative fair values as of the closing date, subject to the limitation that certain “non-qualifying” assets, including financial instruments, could not be assigned an amount greater than their fair values. As a result of this limitation, total consideration paid by the Company exceeded the fair value of the net assets acquired by $3,825, which has been presented as a realized loss in the Company’s Consolidated Statement of Operations for the six months ended June 30, 2020. The Company estimated the fair value of the assets acquired and liabilities assumed in accordance with ASC 820; the methodologies utilized to make these estimates were consistent with those used by the Company in estimating the fair value of its own assets and liabilities.

The following table summarizes the allocation of the purchase price to the assets acquired and liabilities assumed as a result of the Alcentra Acquisition (in thousands):


Consideration Paid by the Company
Common stock issued by the Company⁽¹⁾	$	101,963
Cash Consideration paid by the Company		9,043
Transaction costs		7,250

Total Purchase Price	$	118,256


Assets (Liabilities) Acquired
Investment portfolio ⁽²⁾	$	195,682
Cash		3,409
Portfolio receivables		1,003
Other receivable		395
InterNotes^®		(50,271	)
Secured credit facility		(34,558	)
Borrowing expense payable		(834	)
Other payables		(395	)

Net Assets Acquired	$	114,431

Realized loss on asset acquisition	$	3,825

(1)	Common stock consideration was issued at the Company’s Net Asset Value of $19.60 at the date of the Alcentra Acquisition.

(2)	Investments acquired were recorded at fair value at the date of the acquisition, which is also the Company’s initial cost basis.

Note 14. Stock Repurchase Program

On January 31, 2020, the Company entered into a $20,000 repurchase plan which allowed it to purchase shares in the open market any time the Company’s common stock trades below ninety percent (90%) of its most recently disclosed net asset value per share. The plan was subject to compliance with the Company’s liquidity, covenant, leverage and regulatory requirements. Pursuant to the terms of the repurchase plan, repurchases began on March 2, 2020. On April 9, 2020, the Company’s Board of Directors unanimously approved the termination of the Company’s stock repurchase program.

The following table summarizes share repurchases under the Company’s stock repurchase program for the six months ended June 30, 2020. There were no share repurchases for the six months ended June 30, 2019 (in thousands, except share and per share data).


	Three Months Ended June 30, 2020			Three Months Ended June 30, 2019		Six Months Ended June 30, 2020			Six Months Ended June 30, 2019
Dollar amount repurchased	$	326		$	—	$	2,208		$	—
Shares repurchased		33,187			—		192,415			—
Average price per share including commission	$	9.83		$	—	$	11.48		$	—
Weighted average discount to net asset value		40.46	%		—		40.89	%⁽¹⁾		—

(1)	Weighted average discount is calculated using the December 31, 2019 proforma combined NAV of $19.42 per share assuming the effect of the Alcentra Acquisition.

Note 15. Subsequent Events

The Company’s management evaluated subsequent events through the date of issuance of the consolidated financial statements included herein. Other than the items below, there have been no subsequent events that occurred during such period that would require disclosure in this Form 10-Q or would be required to be recognized in the consolidated financial statements as of June 30, 2020 and for the six months ended June 30, 2020.

On July 30, 2020, the Company completed a private offering of $50,000 aggregate principal amount of 5.95% senior unsecured notes due July 30, 2023 (the “Notes”). The Notes will be issued in two closings. The initial issuance of $25,000 of Notes closed July 30, 2020. The issuance of the remaining $25,000 of Notes is expected to occur on or before October 28, 2020.

On August 7, 2020, the Company’s Board of Directors declared a regular cash dividend of $0.41 per share, which will be paid on or about October 15, 2020 to stockholders of record as of September 30, 2020.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information contained in this section should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this report. This discussion also should be read in conjunction with the “Cautionary Statement Regarding Forward Looking Statements” set forth on page 1 of this Quarterly Report on Form 10-Q. In this report, “we,” “us,” “our” and “Company” refer to Crescent Capital BDC, Inc. and its consolidated subsidiaries.

OVERVIEW

We are a specialty finance company focused on lending to middle-market companies and were incorporated under the laws of the State of Delaware on February 5, 2015 (“Inception”). On January 30, 2020, we changed our state of incorporation from the State of Delaware to the State of Maryland. We have elected to be treated as a BDC under the 1940 Act. In addition, we have elected to be treated for U.S. federal income tax purposes as a RIC under Subchapter M of the Code. As such, we are required to comply with various regulatory requirements, such as the requirement to invest at least 70% of our assets in “qualifying assets,” source of income limitations, asset diversification requirements, and the requirement to distribute annually at least 90% of our taxable income and tax-exempt interest.

We are managed by our Advisor, Crescent Cap Advisors, LLC (and formerly, CBDC Advisors, LLC), an investment adviser that is registered with the SEC under the 1940 Act. Our Administrator, CCAP Administration LLC (and formerly, CBDC Administration, LLC) provides the administrative services necessary for us to operate. Company management consists of investment and administrative professionals from the Advisor and Administrator along with our Board. The Advisor directs and executes our investment operations and capital raising activities subject to oversight from the Board, which sets our broad policies. The Board has delegated investment management of our investment assets to the Advisor. The Board consists of six directors, four of whom are independent.

Our primary investment objective is to maximize the total return to our stockholders in the form of current income and capital appreciation through debt and related equity investments. We seek to achieve our investment objectives by investing primarily in secured debt (including senior secured first lien, unitranche and senior secured second-lien debt) and unsecured debt (including senior unsecured, mezzanine and subordinated debt), as well as related equity securities of private U.S. middle-market companies. We may purchase interests in loans or make debt investments, either (i) directly from our target companies as primary market or private credit investments (i.e., private credit transactions), or (ii) primary or secondary market bank loan or high yield transactions in the broadly syndicated “over-the-counter” market (i.e., broadly syndicated loans and bonds). Although our focus is to invest in less liquid private credit transactions, broadly syndicated loans and bonds are generally more liquid than and complement our private credit transactions.

“Unitranche” loans are first lien loans that may extend deeper in a company’s capital structure than traditional first lien debt and may provide for a waterfall of cash flow priority among different lenders in the unitranche loan. In certain instances, we may find another lender to provide the “first out” portion of such loan and retain the “last out” portion of such loan, in which case, the “first out” portion of the loan would generally receive priority with respect to payment of principal, interest and any other amounts due thereunder over the “last out” portion that we would continue to hold. In exchange for the greater risk of loss, the “last out” portion earns a higher interest rate.

“Second lien” investments are loans with a second priority lien on the assets of the portfolio company. We obtain security interests in the assets of the portfolio company that serve as collateral in support of the repayment of such loans. This collateral serves as collateral in support of the repayment of these loans.

The term “mezzanine” or “unsecured debt” refers to an investment in a company that, among other factors, includes debt that generally ranks senior to a borrower’s equity securities and junior in right of payment to such borrower’s other indebtedness. We may make multiple investments in the same portfolio company.

Alcentra Acquisition

On August 12, 2019, we entered into the Merger Agreement to acquire Alcentra Capital, in a cash and stock transaction. The board of directors of both companies each unanimously approved the Alcentra Acquisition and on January 29, 2020, Alcentra Capital’s stockholders approved the merger and our stockholders approved the issuance of shares of our common stock to Alcentra Capital’s stockholders.

On January 31, 2020, we completed the Alcentra Acquisition, pursuant to the terms and conditions of the Merger Agreement. To effect the acquisition, Acquisition Sub merged with and into Alcentra Capital, with Alcentra Capital surviving the merger as our wholly owned subsidiary. Immediately thereafter and as a single integrated transaction, Alcentra Capital consummated the Second Merger, whereby it merged with and into us, with Crescent Capital BDC surviving the merger. Pursuant to the Merger Agreement, Alcentra Capital stockholders received the right to the following merger consideration in exchange for each share of Alcentra Capital common stock outstanding immediately prior to January 31, 2020, (a) $3.1784 per share in cash consideration (less the $0.8000 final dividend declared by Alcentra Capital) and (b) stock consideration at the fixed exchange ratio of 0.4041 shares of Common Stock. This resulted in our then-existing stockholders owning approximately 82% of us and Alcentra Capital’s then-existing stockholders owning approximately 18% of us.

The aggregate cash consideration was comprised of (i) $19.3 million in cash, or $1.5023 per share, from us (less $10.3 million or $0.8000 per share in final dividends paid by Alcentra Capital on January 31, 2020) and (ii) $21.6 million in cash, or $1.6761 per share, in transaction support provided by the Advisor.

KEY COMPONENTS OF OPERATIONS

Investments

We expect our investment activity to vary substantially from period to period depending on many factors, the general economic environment, the amount of capital we have available to us, the level of merger and acquisition activity for middle-market companies, including the amount of debt and equity capital available to such companies and the competitive environment for the type of investments we make. In addition, as part of our risk strategy on investments, we may reduce certain levels of investments through partial sales or syndication to additional investors.

We must not invest in any assets other than “qualifying assets” specified in the 1940 Act, unless, at the time the investments are made, at least 70% of our total assets are qualifying assets (with certain limited exceptions). Qualifying assets include investments in “eligible portfolio companies.” Pursuant to rules adopted by the SEC, “eligible portfolio companies” include certain companies that do not have any securities listed on a national securities exchange and public companies whose securities are listed on a national securities exchange but whose market capitalization is less than $250 million.

The Investment Advisor

Our investment activities are managed by the Advisor, which is responsible for originating prospective investments, conducting research and due diligence investigations on potential investments, analyzing investment opportunities, negotiating and structuring our investments and monitoring our investments and portfolio companies on an ongoing basis. The Advisor has entered into a resource sharing agreement with Crescent Capital Group LP (“CCG LP”), pursuant to which CCG LP provides the Advisor with experienced investment professionals (including the members of the Advisor’s investment committee) and access to the resources of CCG LP so as to enable the Advisor to fulfill its obligations under the Investment Advisory Agreement. Through the resource sharing agreement, the Advisor intends to capitalize on the deal origination, credit underwriting, due diligence, investment structuring, execution, portfolio management and monitoring experience of CCG LP’s investment professionals.

Revenues

We generate revenue primarily in the form of interest income on debt investments, capital gains and distributions, if any, on equity securities that we may acquire in portfolio companies. Certain investments may have contractual PIK interest or dividends. PIK represents accrued interest or accumulated dividends that are added to the loan principal of the investment on the respective interest or dividend payment dates rather than being paid in cash and generally becomes due at maturity or upon being called by the issuer. PIK is recorded as interest or dividend income, as applicable.

We may receive other income, which may include income such as consent, waiver, amendment, unused, underwriting, arranger and prepayment fees associated with our investment activities as well as any fees for managerial assistance services rendered to the portfolio companies. Such fees are recognized as income when earned or the services are rendered.

We also generate revenue in the form of commitment or origination fees. Loan origination fees, original issue discount and market discount or premium are capitalized, and we accrete or amortize such amounts into income over the life of the loan using the effective yield method.

Expenses

Our primary operating expenses include the payment of management fees and incentive fees to the Advisor under the Investment Advisory Agreement, as amended, our allocable portion of overhead expenses under the administration agreement with our Administrator (the “Administration Agreement”), operating costs associated with our sub-administration agreement with State Street Bank and Trust Company and other operating costs described below. The management and incentive fees compensate the Advisor for its work in identifying, evaluating, negotiating, closing and monitoring our investments. We bear all other out-of-pocket costs and expenses of our operations and transactions, including:

•

the cost of calculating our net asset value, including the cost of any third-party valuation services;

•

fidelity bond, directors’ and officers’ liability insurance and other insurance premiums;

•

fees and expenses associated with independent audits and outside legal costs;

•

independent directors’ fees and expenses;

•

administration fees and expenses, if any, payable under the Administration Agreement (including payments based upon our allocable portion of the Administrator’s overhead in performing its obligations under the Administration Agreement, rent and the allocable portion of the cost of certain professional services provided to us, including but not limited to, our Chief Compliance Officer, our legal counsel and other professionals);

•

U.S. federal, state and local taxes;

•

the cost of effecting sales and repurchases of shares of our common stock and other securities;

•

fees payable to third parties relating to making investments, including out-of-pocket fees and expenses associated with performing due diligence and reviews of prospective investments;

•

out-of-pocket fees and expenses associated with marketing efforts;

•

federal and state registration fees and any stock exchange listing fees;

•

brokerage commissions;

•

costs associated with our reporting and compliance obligations under the 1940 Act and other applicable U.S. federal and state securities laws;

•

debt service and other costs of borrowings or other financing arrangements; and

•

all other expenses reasonably incurred by us in connection with making investments and administering our business.

We expect our general and administrative expenses to be relatively stable or decline as a percentage of total assets during periods of asset growth and to increase during periods of asset declines.

Leverage

Our financing facilities allow us to borrow money and lever our investment portfolio, subject to the limitations of the 1940 Act, with the objective of increasing our yield. This is known as “leverage” and could increase or decrease returns to our stockholders. The use of leverage involves significant risks.

In accordance with applicable SEC staff guidance and interpretations, effective May 5, 2020 with shareholder approval, we, as a BDC, are permitted to borrow amounts such that our asset coverage ratio is at least 150% after such borrowing (if certain requirements are met), rather than 200%, as previously required. Short-term credits necessary for the settlement of securities transactions and arrangements with respect to securities lending will not be considered borrowings for these purposes. The amount of leverage that we employ depends on our Advisor’s and our Board’s assessment of market conditions and other factors at the time of any proposed borrowing.

PORTFOLIO INVESTMENT ACTIVITY

We seek to create a broad and diversified portfolio that generally includes senior secured first lien, unitranche, senior secured second lien and subordinated loans and minority equity securities of U.S. middle market companies. The size of our individual investments will vary proportionately with the size of our capital base. We generally invest in securities that have been rated below investment grade by independent rating agencies or that would be rated below investment grade if they were rated. These securities have speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal. In addition, many of our debt investments have floating interest rates that reset on a periodic basis and typically do not fully pay down principal prior to maturity.

As of June 30, 2020 and December 31, 2019, our portfolio at fair value was comprised of the following:

($ in millions)


	June 30, 2020				December 31, 2019
Investment Type	Fair Value		Percentage		Fair Value		Percentage
Senior Secured First Lien	$	361.7		40.4%	$	351.3		48.3%
Unitranche First Lien		307.2		34.3		218.3		30.1
Unitranche First Lien – Last Out		14.4		1.6		16.2		2.2
Senior Secured Second Lien		106.7		11.9		58.9		8.1
Unsecured Debt		8.7		1.0		7.4		1.0
Equity & Other		45.0		5.0		21.4		3.0
LLC/LP Equity Interests		51.5		5.8		53.0		7.3

Total investments	$	895.2		100.0%	$	726.5		100.0%

The following table shows the asset mix of investments made at cost, inclusive of revolver and delayed draw fundings, during the three and six months ended June 30, 2020 and June 30, 2019:

($ in millions)


	Three Months Ended June 30, 2020				Six Months Ended June 30, 2020⁽¹⁾				Three Months Ended June 30, 2019				Six Months Ended June 30, 2019
Investment Type	Cost		Percentage		Cost		Percentage		Cost		Percentage		Cost		Percentage
Senior Secured First Lien	$	6.1		23.0%	$	48.3		33.6%	$	68.5		56.2%	$	85.6		46.2%
Unitranche First Lien		10.8		40.9		77.5		53.9		39.3		32.3		47.9		25.9
Unitranche First Lien – Last Out		—		—		—		—		1.0		0.8		16.0		8.7
Senior Secured Second Lien		9.5		36.0		9.6		6.6		2.4		2.0		4.5		2.4
Unsecured Debt		—		—		—		—		—		—		—		—
Equity & Other		0.0		0.1		0.0		0.0		0.6		0.5		0.6		0.3
LLC/LP Equity Interests		—		—		8.5		5.9		10.0		8.2		30.6		16.5

Total investments	$	26.4		100.0%	$	143.9		100.0%	$	121.8		100.0%	$	185.2		100.0%

(1)

Excludes $195.7 million of assets at cost acquired in connection with the Alcentra Acquisition. The asset acquired, at cost, were comprised of $82.2 million of senior secured first lien, $45.0 million of unitranche first lien, $53.0 million of senior secured second lien, $1.2 million of unsecured debt and $14.3 million of equity investments.

For the three months ended June 30, 2020, we had principal repayments and sales of $60.4 million. For the three months ended June 30, 2020, we had a portfolio decrease of $33.9 million based on amortized cost.

For the three months ended June 30, 2019, we had principal repayments and sales of $18.7 million. For the three months ended June 30, 2019, we had a portfolio increase of $103.1 million based on amortized cost.

For the six months ended June 30, 2020, we had principal repayments and sales of $134.1 million. For the six months ended June 30, 2020, we had a portfolio increase, excluding assets acquired in the Alcentra Acquisition, of $9.8 million based on amortized cost.

For the six months ended June 30, 2019, we had principal repayments and sales of $58.6 million. For the six months ended June 30, 2019, we had a portfolio increase of $127.2 million based on amortized cost.

The following table presents certain selected information regarding our investment portfolio as of June 30, 2020 and December 31, 2019:


	June 30, 2020		December 31, 2019
Weighted average yield on income producing securities (at cost) ⁽¹⁾		7.9%		8.1%⁽²⁾
Percentage of debt bearing a floating rate (at fair value)		96.9%		97.9%
Percentage of debt bearing a fixed rate (at fair value)		3.1%		2.1%
Number of portfolio companies		124		98

(1)	Yield excludes investments on non-accrual status.

(2)	Prior period updated to conform to current period methodology.

The following table shows the amortized cost of our performing and non-accrual debt and income producing debt securities as of June 30, 2020 and December 31, 2019.

($ in millions)


	June 30, 2020				December 31, 2019
	Amortized Cost		Percentage		Amortized Cost		Percentage
Performing	$	812.8		96.1%	$	645.4		98.1%
Non-accrual		33.4		3.9		12.6		1.9

Total income producing debt securities	$	846.2		100.0%	$	658.0		100.0%

Loans are generally placed on non-accrual status when there is reasonable doubt that principal or interest will be collected in full. Non-accrual loans are restored to accrual status when past due principal and interest is paid current and, in management’s judgment, are likely to remain current. Management may determine to not place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection.

As of June 30, 2020, we had investments in five portfolio companies with eight investment positions on non-accrual status, which represented 3.9% and 2.4% of the total debt investments at cost and fair value, respectively. As of December 31, 2019, we had investments in one portfolio company with three investment positions on non-accrual status, which represented 1.9% and 1.0% of total debt investments at cost and fair value, respectively. The remaining debt investments were performing and current on their interest payments as of June 30, 2020 and December 31, 2019.

The Advisor monitors our portfolio companies on an ongoing basis. The Advisor monitors the financial trends of each portfolio company to determine if it is meeting its business plans and to assess the appropriate course of action for each company. The Advisor has a number of methods of evaluating and monitoring the performance and fair value of our investments, which may include the following:

•

assessment of success of the portfolio company in adhering to its business plan and compliance with covenants;

•

review of monthly and quarterly financial statements and financial projections for portfolio companies.

•

contact with portfolio company management and, if appropriate, the financial or strategic sponsor, to discuss financial position, requirements and accomplishments;

•

comparisons to other companies in the industry; and

•

possible attendance at, and participation in, board meetings.

As part of the monitoring process, the Advisor regularly assesses the risk profile of each of our investments and, on a quarterly basis, grades each investment on a risk scale of 1 to 5. Risk assessment is not standardized in our industry and our risk assessment may not be comparable to ones used by our competitors. Our assessment is based on the following categories:

1	Involves the least amount of risk in our portfolio. The investment/borrower is performing above expectations since investment, and the trends and risk factors are generally favorable, which may include the financial performance of the borrower or a potential exit.

2	Involves an acceptable level of risk that is similar to the risk at the time of investment. The investment/borrower is generally performing as expected, and the risk factors are neutral to favorable.

Involves an investment/borrower performing below expectations and indicates that the investment’s risk has increased somewhat since investment. The borrower’s loan payments are generally not past due and more likely than not the borrower will remain in compliance with debt covenants. An investment rating of 3 requires closer monitoring.

Involves an investment/borrower performing materially below expectations and indicates that the loan’s risk has increased materially since investment. In addition to the borrower being generally out of compliance with debt covenants, loan payments may be past due (but generally not more than 180 days past due). Placing loans on non-accrual status should be considered for investments rated 4.

Involves an investment/borrower performing substantially below expectations and indicates that the loan’s risk has substantially increased since investment. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. Loans rated 5 are not anticipated to be repaid in full and the fair market value of the loan should be reduced to the anticipated recovery amount. Loans with an investment rating of 5 should be placed on non-accrual status.

The following table shows the distribution of our investments on the 1 to 5 investment performance rating scale at fair value as of June 30, 2020 and December 31, 2019. Investment performance ratings are accurate only as of those dates and may change due to subsequent developments relating to a portfolio company’s business or financial condition, market conditions or developments, and other factors.

($ in millions)


	June 30, 2020				December 31, 2019
Investment Performance Rating	Investments at Fair Value		Percentage of Total Portfolio		Investments at Fair Value		Percentage of Total Portfolio
1	$	14.9		1.7%	$	19.1		2.6%
2		677.5		75.7		653.1		89.9
3		183.6		20.5		47.8		6.6
4		19.2		2.1		6.5		0.9
5		—		—		—		—

Total	$	895.2		100.0%	$	726.5		100.0%

RESULTS OF OPERATIONS

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

($ in millions)


	For the three months ended						For the six months ended
	June 30, 2020			June 30, 2019			June 30, 2020			June 30, 2019
Total investment income	$	19.3		$	12.5		$	38.2		$	24.0
Total net expenses		6.3			5.1			13.7			9.8

Net investment income	$	13.0		$	7.4		$	24.5		$	14.2
Net realized gain (loss) on investments (1)		(1.0	)		(0.1	)		(1.2	)		(0.4	)
Net unrealized appreciation (depreciation) on investments (1)(2)		44.7			1.3			(37.9	)		4.0

Net realized and unrealized gains (losses) on investments	$	43.7		$	1.2		$	(39.1	)	$	3.6

Realized loss on asset acquisition		—			—			(3.8	)		—
Benefit/(Provision) for taxes on unrealized appreciation (depreciation) on investments		(0.3	)		(0.1	)		0.3			(0.4	)

Net increase (decrease) in net assets resulting from operations	$	56.4		$	8.5		$	(18.1	)	$	17.4

(1)	Includes foreign currency transactions and translation.

(2)	Includes foreign currency forward contracts

Investment Income

($ in millions)


	For the three months ended				For the six months ended
	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019
Interest from investments	$	17.2	$	11.1	$	34.7	$	21.9
Dividend Income		1.5		1.1		2.4		1.5
Other income		0.6		0.3		1.1		0.6

Total	$	19.3	$	12.5	$	38.2	$	24.0

Interest income, which includes amortization of upfront fees, increased from $11.1 million for the three months ended June 30, 2019 to $17.2 million for the three months ended June 30, 2020, due to an increase in the size of our portfolio related to the Alcentra Acquisition and organic net deployment. Included in interest from investments for the three months ended June 30, 2020 and June 30, 2019 are $0.3 million and $0.2 million in accelerated accretion of OID, respectively.

Dividend income increased from $1.1 million for the three months ended June 30, 2019 to $1.5 million for the three months ended June 30, 2020 due to higher dividend payments from the Senior Loan Fund and GACP II LP. Other income which includes unused fees, amortization of loan administration fees earned as the administration agent, and other miscellaneous fee income, increased from $0.3 million for the three months ended June 30, 2019 to $0.6 million for the three months ended June 30, 2020, due to an increase in the size of our portfolio.

Interest income, which includes amortization of upfront fees, increased from $21.9 million for the six months ended June 30, 2019 to $34.7 million for the six months ended June 30, 2020, due to an increase in the size of our portfolio related to the Alcentra Acquisition and organic net deployment. Included in interest from investments for the six months ended June 30, 2020 and June 30, 2019 are $1.3 million and $0.6 million in accelerated accretion of OID, respectively.

Dividend income increased from $1.5 million for the six months ended June 30, 2019 to $2.4 million for the six months ended June 30, 2020 due to higher dividend payments from the Senior Loan Fund and GACP II LP. Other income which includes unused fees, amortization of loan administration fees earned as the administration agent, and other miscellaneous fee income, increased from $0.6 million for the six months ended June 30, 2019 to $1.1 million for the three months ended June 30, 2020, due to an increase in the size of our portfolio.

Expenses

($ in millions)


	For the three months ended						For the six months ended
	June 30, 2020			June 30, 2019			June 30, 2020			June 30, 2019
Interest and debt financing costs	$	3.6		$	3.1		$	8.0		$	6.0
Management fees		2.8			2.2			5.4			4.1
Incentive fees		2.3			1.1			4.2			2.1
Professional fees		0.3			0.2			0.7			0.4
Directors’ fees		0.1			0.1			0.3			0.1
Other general and administrative expenses		0.5			0.5			1.2			1.1

Total expenses	$	9.6		$	7.2		$	19.8		$	13.8
Management fee waiver		(1.1	)		(1.0	)		(2.3	)		(1.9	)
Incentive fee waiver		(2.3	)		(1.1	)		(4.2	)		(2.1	)

Net expenses	$	6.2		$	5.1		$	13.3		$	9.8
Income and excise taxes		0.1			0.0			0.4			0.0

Total	$	6.3		$	5.1		$	13.7		$	9.8

Interest and Credit Facility Expenses

Interest and debt financing costs include interest, amortization of deferred financing costs, upfront commitment fees and unused fees on our credit facilities. Interest and debt financing costs increased from $3.1 million for the three months ended June 30, 2019 to $3.6 million for the three months ended June 30, 2020. This increase was primarily due to an increase in the weighted average debt outstanding largely due to the Alcentra Acquisition from $254.8 million for the three months ended June 30, 2019 to $417.8 million for the three months ended June 30, 2020. The increase in the weighted average debt outstanding was partially offset by the average interest rate (excluding deferred upfront financing costs and unused fees) decreasing from 4.5% for the three months ended June 30, 2019 to 3.0% for the three months ended June 30, 2020, primarily driven by declining benchmark rates.

Interest and debt financing costs increased from $6.0 million for the six months ended June 30, 2019 to $8.0 million for the six months ended June 30, 2020. This increase was primarily due to an increase in the weighted average debt outstanding largely due to the Alcentra Acquisition from $243.4 million for the six months ended June 30, 2019 to $403.4 million for the six months ended June 30, 2020. The increase in the weighted average debt outstanding was partially offset by the average interest rate (excluding deferred upfront financing costs and unused fees) on the weighted average debt outstanding decreasing from 4.5% for the six months ended June 30, 2019 to 3.4% for the six months ended June 30, 2020, primarily driven by declining benchmark rates.

Investment Advisory Agreements

On June 2, 2015, we entered into an investment advisory agreement with the Advisor (the “Investment Advisory Agreement”), which was subsequently replaced by the Amended and Restated Investment Advisory Agreement (together with the Investment Advisory Agreement, the “Advisory Agreements”), which was approved by our stockholders on January 29, 2020 in connection with the Alcentra Acquisition. Under the terms of the Amended and Restated Investment Advisory Agreement, the Advisor provides investment advisory services to us and our portfolio investments. The Advisor’s services under the Amended and Restated Investment Advisory Agreement are not exclusive, and the Advisor is free to furnish similar or other services to others so long as its services to us are not impaired. Under the terms of the Advisory Agreements, the Advisor is entitled to receive a base management fee and may also receive incentive fees, as discussed below.

Base Management Fee (prior to February 1, 2020)

Prior to February 1, 2020, pursuant to the Investment Advisory Agreement, the base management fee was calculated and payable quarterly in arrears at an annual rate of 1.50% of our gross assets, including assets acquired through the incurrence of debt but excluding any cash and cash equivalents. The base management fee was calculated based on the average value of gross assets at the end of the two most recently completed calendar quarters, and appropriately adjusted for share issuances or repurchases during the current calendar quarter.

Under the Investment Advisory Agreement, the Advisor agreed to waive its right to receive management fees in excess of the sum of (i) 0.25% of the aggregate committed but undrawn capital and (ii) 0.75% of the aggregate gross assets excluding cash and cash equivalents (including capital drawn to pay our expenses) during the period prior to February 3, 2020, the date of the our qualified initial public offering, as defined by the Investment Advisory Agreement (“Qualified IPO”). The listing of our Common Stock on NASDAQ on February 3, 2020 qualified as a Qualified IPO. The Advisor is not permitted to recoup any waived amounts at any time.

New Base Management Fee (effective February 1, 2020)

Effective February 1, 2020, pursuant to the Amended and Restated Investment Advisory Agreement, the base management fee is calculated and payable quarterly in arrears at an annual rate of 1.25% of our gross assets, including assets acquired through the incurrence of debt but excluding any cash and cash equivalents. The base management fee is calculated based on the average value of gross assets at the end of the two most recently completed calendar quarters, and appropriately adjusted for any share issuances or repurchases during the current calendar quarter.

For the three and six months ended June 30, 2020, we incurred management fees of $1.7 and $3.2 million, respectively, which are net of waived amounts, of $1.1 and $2.3 million, respectively, of which $1.7 million was payable at June 30, 2020. For the three and six months ended June 30, 2019, we incurred management fees of $1.1 and $2.1 million, respectively, which are net of waived amounts, of $1.0 and $1.9 million respectively, of which $1.1 million was payable at June 30, 2019.

The Advisor has voluntarily waived its right to receive management fees on our investment in GACP II LP for any period in which GACP II LP remains in the investment portfolio. For the three and six months ended June 30, 2020, $0.0 and $0.1 million, respectively, of management fees waived were attributable to our investment in GACP II LP. For the three and six months ended June 30, 2019, $0.0 and $0.1 million, respectively, of management fees waived were attributable to our investment in GACP II LP. These amounts are excluded from the management fee waived amounts above.

Incentive Fee (prior to February 1, 2020)

The second part, the capital gains incentive fee, is determined and payable in arrears as of the end of each fiscal year at a rate of 15.0% of our realized capital gains, if any, on a cumulative basis from Inception through the end of the fiscal year, 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.

Incentive Fee (effective February 1, 2020)

The second part, the capital gains incentive fee, is determined and payable in arrears as of the end of each fiscal year at a rate of 17.5% of our realized capital gains, if any, on a cumulative basis from Inception through the end of the fiscal year, 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. Since the Qualified IPO occurred on a date other than the first day of a calendar quarter, the income incentive fee shall be calculated for such calendar quarter at a weighted rate calculated based on the fee rates applicable before and after a Qualified IPO based on the number of days in such calendar quarter before and after the Qualified IPO. For the avoidance of doubt, such capital gains incentive fee shall be equal to 15.0% of our realized capital gains on a cumulative basis from Inception through the day before the Qualified IPO, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gains incentive fees. Following the Qualified IPO, solely for the purposes of calculating the capital gains incentive fee, we will be deemed to have previously paid capital gains incentive fees prior to a Qualified IPO equal to the product obtained by multiplying (a) the actual aggregate amount of previously paid capital gains incentive fees for all periods prior to the Qualified IPO by (b) the percentage obtained by dividing (x) 17.5% by (y) 15.0%. In the event that the Amended and Restated Investment Advisory Agreement shall terminate as of a date that is not a fiscal year end, the termination date shall be treated as though it were a fiscal year end for purposes of calculating and paying a capital gains incentive fee.

Pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that we receive from portfolio companies) accrued during each calendar quarter, minus operating expenses for such quarter (including the base management fee, expenses payable under the Administration Agreement and any interest expense and distributions paid on any issued and outstanding debt or preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as market discount, original issue discount, debt instruments with PIK interest, preferred stock with PIK dividends and zero coupon securities), accrued income that the we have not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Pre-incentive fee net investment income will be compared to a “Hurdle Amount” equal to the product of (i) the Hurdle rate of 1.50% or 1.75% per quarter, 6.00% or 7.00% annualized, prior to and effective February 1, 2020, respectively, and (ii) our net assets (defined as total assets less indebtedness, before taking into account any incentive fees payable during the period), at the end of the immediately preceding calendar quarter, subject to a “catch-up” provision incurred at the end of each calendar quarter.

For the three months ended June 30, 2020 and 2019, we incurred income incentive fees of $2.3 million and $1.1 million, of which $2.3 million and $1.1 million were waived. For the six months ended June 30, 2020 and 2019, we incurred income incentive fees of $4.2 million and $2.1 million, of which $4.2 million and $2.1 million were waived. $0 was payable at June 30, 2020 and 2019, respectively.

GAAP Incentive Fee on Cumulative Unrealized Capital Appreciation

We accrue, but do not pay, a portion of the Incentive Fee based on capital gains with respect to net unrealized appreciation. Under GAAP, we are required to accrue an Incentive Fee based on capital gains that includes net realized capital gains and losses and net unrealized capital appreciation and depreciation on investments held at the end of each period. In calculating the accrual for the Incentive Fee based on capital gains, we consider the cumulative aggregate unrealized capital appreciation in the calculation, since an Incentive Fee based on capital gains would be payable if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee payable under the Amended and Restated Investment Advisory Agreement. This accrual is calculated using the aggregate cumulative realized capital gains and losses and aggregate cumulative unrealized capital appreciation or depreciation. If such amount is positive at the end of a period, then we record a capital gains incentive fee equal to 15% (pre February 3, 2020) or 17.5% (effective February 3, 2020) of such amount, minus the aggregate amount of actual Incentive Fees based on capital gains paid in all prior periods. If such amount is negative, then there is no accrual for such period. There can be no assurance that such unrealized capital appreciation will be realized in the future.

For the three and six months ended June 30, 2020 and 2019, we accrued no incentive fee on cumulative unrealized capital appreciation.

Professional Fees and Other General and Administrative Expenses

Professional fees generally include expenses from independent auditors, tax advisors, legal counsel and third party valuation agents. Other general and administrative expenses generally include expenses from the sub-administration agreement, insurance premiums, overhead and staffing costs allocated from the Administrator and other miscellaneous general and administrative costs associated with our operations and investment activity. Professional fees increased from $0.2 million for the three months ended June 30, 2019 to $0.4 million for the three months ended June 30, 2020, while other general and administrative expenses remained relatively flat at $0.5 million for the three months ended June 30, 2020 and 2019, respectively. The net increase in expenses was due to an increase in costs associated with servicing a growing investment portfolio. Professional fees increased from $0.4 million for the six months ended June 30, 2019 to $0.7 million for the three months ended June 30, 2020, while other general and administrative expenses increased from $1.1 million for the six months ended June 30, 2019 to $1.2 million for the six months ended June 30, 2020. The net increase in expenses was due to an increase in costs associated with servicing a growing investment portfolio.

Organization expenses

We agreed to repay the Advisor for initial organization costs and equity offering costs incurred prior to the commencement of our operations up to a maximum of $1.5 million on a pro rata basis over the first $350.0 million of invested capital not to exceed 3 years from the initial capital commitment on June 26, 2015. The initial 3 year term was later extended to June 30, 2019, with shareholder approval. To the extent such costs relate to equity offerings, these costs are charged as a reduction of capital upon the issuance of common shares. To the extent such costs relate to organization costs, these costs are expensed in the Consolidated Statements of Operations upon the issuance of common shares. The Advisor is responsible for organization and private equity offerings costs in excess of $1.5 million. During the reimbursement period which began on June 26, 2015 and expired on June 30, 2019, the Advisor had allocated to us $0.8 million of equity offering costs and $0.6 million of organization costs.

Income Tax Expense, Including Excise Tax

We have elected to be treated as a RIC under the Code and operate in a manner so as to qualify for the tax treatment applicable to RICs. To qualify as a RIC, we must generally (among other requirements) timely distribute to our stockholders at least 90% of our investment company taxable income, as defined by the Code, for each year. In order to maintain our RIC status, we intend to make the requisite distributions to our stockholders which will generally relieve us from corporate-level income taxes.

In order to not to be subject to federal excise taxes, we must distribute annually an amount at least equal to the sum of (i) 98% of our ordinary income (taking into account certain deferrals and elections), (ii) 98.2% of our net capital gains from the current year and (iii) any undistributed ordinary income and net capital gains from preceding years. Depending on the level of taxable income earned in a tax year, we may choose to carry forward such taxable income in excess of current year dividend distributions into the next tax year and pay a 4% excise tax on such income, as required. If we determine that our estimated current year taxable income will be in excess of estimated dividend distributions for the current year from such income, we accrue excise tax on estimated excess taxable income as such taxable income is earned. For the three months ended June 30, 2020 and 2019, we expensed an excise tax of $0.1 million and $0.0 million, respectively, of which $0.1 million and $0.0 million remained payable, respectively. For the six months ended June 30, 2020 and 2019, we expensed an excise tax of $0.3 million and $0.0 million, respectively, of which $0.2 million and $0.0 million remained payable, respectively.

Net Realized and Unrealized Gains and Losses

We value our portfolio investments quarterly and any changes in fair value are recorded as unrealized appreciation (depreciation) on investments. For the three and six months ended June 30, 2020 and 2019, net realized gains (losses) and net unrealized appreciation (depreciation) on our investment portfolio were comprised of the following:

($ in millions)


	For the three months ended						For the six months ended
	June 30, 2020			June 30, 2019			June 30, 2020			June 30, 2019
Realized losses on investments	$	(1.4	)	$	(0.1	)	$	(1.5	)	$	(0.3	)
Realized gains on investments		0.3			0.0			0.4			—
Realized gains on foreign currency transactions		0.1			(0.0	)		0.2			(0.1	)
Realized losses on foreign currency transactions		(0.0	)		(0.0	)		(0.3	)		(0.0	)

Net realized gains (losses) on investments	$	(1.0	)	$	(0.1	)	$	(1.2	)	$	(0.4	)

Change in unrealized depreciation on non-controlled and non-affiliated investments	$	22.5		$	(1.4	)	$	(33.2	)	$	(1.1	)
Change in unrealized appreciation on non-controlled and non-affiliated investments		1.5			2.7			(5.8	)		4.5
Change in unrealized depreciation on non-controlled and affiliated investments		1.2			—			(1.8	)		0.0
Change in unrealized appreciation on non-controlled and affiliated investments		10.6			0.1			10.1			0.6
Change in unrealized depreciation on foreign currency translation		(0.1	)		(0.5	)		(0.6	)		(0.5	)
Change in unrealized appreciation on foreign currency translation		1.3			0.6			0.3			0.9
Change in unrealized depreciation on controlled and affiliated investments		7.9			(0.5	)		(8.5	)		(0.7	)
Change in unrealized appreciation on controlled and affiliated investments		—			—			(0.4	)		—
Change in unrealized appreciation on foreign currency forwards		0.0			0.0			2.0			0.1
Change in unrealized depreciation on foreign currency forwards		(0.2	)		0.3			—			0.2

Net unrealized appreciation (depreciation)on investments	$	44.7		$	1.3		$	(37.9	)	$	4.0
Realized loss on asset acquisition		—			—			(3.8	)		—

Net realized and unrealized gains (losses) on investments and asset acquisition	$	43.7		$	1.2		$	(42.9	)	$	3.6

For the three and six months ended June 30, 2020 as compared to the three and six months ended June 30, 2019, the change in unrealized depreciation on debt and equity investments was largely due to increased market volatility and wider credit spreads resulting from the COVID-19 pandemic.

Hedging

We may, but are not required to, enter into interest rate, foreign exchange or other derivative agreements to hedge interest rate, currency, credit or other risks. Generally, we do not intend to enter into any such derivative agreements for speculative purposes. Any derivative agreements entered into for speculative purposes are not expected to be material to our business or results of operations. These hedging activities, which are in compliance with applicable legal and regulatory requirements, may include the use of various instruments, including futures, options and forward contracts. We bear the costs incurred in connection with entering into, administering and settling any such derivative contracts. There can be no assurance any hedging strategy we employ will be successful.

During the six months ended June 30, 2020 and June 30, 2019, our average U.S. Dollar notional exposure to foreign currency forward contracts were $31.4 million and $19.1 million, respectively.

Senior Loan Fund

The Senior Loan Fund, an unconsolidated limited liability company, was formed on September 26, 2018 and commenced operations in February 2019. We invest together with Masterland through the Senior Loan Fund. Masterland is a wholly owned subsidiary of China Orient Asset Management (International) Holding Limited (HK). The Senior Loan Fund’s principal purpose is to make investments in broadly syndicated bank loans, either directly or indirectly through its wholly owned subsidiary, CBDC Senior Loan Sub LLC. We along with Masterland, have each subscribed to fund $40.0 million. Except under certain circumstances, contributions to the Senior Loan Fund cannot be redeemed. The Senior Loan Fund is managed by a four member board of managers, on which we and Masterland have equal representation. Investment decisions generally must be unanimously approved by a quorum of the board of managers. Since we do not have a controlling financial interest in the Senior Loan Fund, it is not consolidated. The Senior Loan Fund is an investment company and measured using the net asset value per share as a practical expedient for fair value.

We along with Masterland had subscribed to fund and contributed the following to the Senior Loan Fund:

($ in millions)


	June 30, 2020
Member	Subscribed to fund		Contributed		Unfunded Commitment
Company	$	40.0	$	39.0	$	1.0
Masterland		40.0		39.0		1.0

Total	$	80.0	$	78.0	$	2.0

	December 31, 2019
Member	Subscribed to fund		Contributed		Unfunded Commitment
Company	$	40.0	$	34.0	$	6.0
Masterland		40.0		34.0		6.0

Total	$	80.0	$	68.0	$	12.0

The Senior Loan Fund is capitalized pro rata with LLC equity interest as transactions are completed. The Senior Loan Fund has a revolving credit facility with Royal Bank of Canada (the “RBC Facility”), as amended, which permitted up to $300.0 million of borrowings as of June 30, 2020. Borrowings under the RBC Facility are secured by all assets of CBDC Senior Loan Sub LLC. The interest rate on the credit facility is London Interbank Offered Rate (“LIBOR”), with no LIBOR floor, plus margin, which ranges between 1.25% and 1.45% based on pricing of the pledged collateral.

Below is a summary of the Senior Loan Fund’s portfolio as of June 30, 2020 and December 31, 2019:

($ in millions)


	As of June 30, 2020			As of December 31, 2019
Total senior secured debt, at par	$	288.7		$	275.6
Total senior secured debt, at fair value	$	268.8		$	275.1
Weighted average current interest rate on senior secured debt⁽¹⁾		3.5	%		4.9	%
Number of borrowers in the Senior Loan Fund’s portfolio		180			169
Largest loan to a single borrower	$	3.5		$	3.5
Senior Secured First Lien investments as a % of total investments, at fair value		100.0	%		100.0	%
United States based investments as a % of total investments, at fair value		90.4	%		89.7	%
Non-accrual investments as % of total investment, at cost		0.0	%		0.0	%

⁽¹⁾	Computed as (a) the annual stated interest rate on accruing senior secured debt, divided by (b) total senior secured debt at par amount, excluding fully unfunded commitments.

Below is selected balance sheet information for the Senior Loan Fund as of June 30, 2020 and December 31, 2019:

($ in millions)


	As of June 30, 2020 (Unaudited)		As of December 31, 2019
Selected Balance Sheet Information:
Total investments, at fair value	$	268.8	$	275.1
Cash and cash equivalents		9.2		7.9
Other assets		2.1		6.7

Total assets	$	280.1	$	289.7


Debt (net of deferred financing costs of $0.3 and $0.2 million, respectively)	$	211.3	$	205.8
Other liabilities		7.8		15.0

Total liabilities	$	219.1	$	220.8

Members’ Capital		61.0		68.9

Total liabilities and members’ capital	$	280.1	$	289.7

Below is selected statements of operations information for the Senior Loan Fund for the three and six months ended June 30, 2020 and June 30, 2019:

($ in millions)


	For the three months ended June 30,				For the six months ended June 30,
	2020		2019		2020		2019
Selected Statements of Operations Information:
Total investment income	$	2.8	$	2.1	$	6.2	$	2.2
Expenses
Interest and other debt financing costs		1.2		0.8		2.7		0.9
Professional fees		0.0		0.0		0.0		0.1
Other general and administrative expenses		0.1		0.1		0.2		0.1

Total expenses		1.3		0.9		2.9		1.1

Net investment income (loss)		1.5		1.2		3.3		1.1

Net realized gain (loss) on investments		(0.2)		0.0		(0.4)		0.1
Net change in unrealized appreciation (depreciation) on investments		16.1		(1.0)		(19.2)		(1.5)

Net increase (decrease) in members’ capital	$	17.4	$	0.2	$	(16.3)	$	(0.3)

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

The primary uses of our cash and cash equivalents are for (1) investments in portfolio companies and other investments; (2) the cost of operations (including paying the Advisor); (3) debt service, repayment, and other financing costs; and (4) cash distributions to the holders of our common stock. We expect to generate additional liquidity from (1) borrowings from our SPV Asset Facility and Corporate Revolving Facility and from other banks, lenders, or future issuances of debt securities; and, (2) cash flows from operations.

As of June 30, 2020, we had $11.6 million in cash and cash equivalents and restricted cash and cash equivalents and $166.1 million of undrawn capacity on our revolving credit and special purpose vehicle asset facilities, subject to borrowing base and other limitations.

We expect that the market and business disruption created by the COVID-19 pandemic will impact certain aspects of our liquidity, and we are therefore continuously and critically monitoring our operating results, liquidity and anticipated capital requirements. We saw an unprecedented level of calls for revolver fundings in March and April and subsequent repayments in the latter half of the second quarter. High market spreads and other economic volatility resulted in significant depreciation in the valuations of our investments, particularly in the first quarter, which may adversely impact collateral eligibility and reduce the availability under our credit facilities. However, the undrawn capacity under our facilities as of June 30, 2020 is in excess of our unfunded commitments.

As of June 30, 2020, we were in compliance with our asset coverage requirements under the 1940 Act. In addition, we were in compliance with all the financial covenant requirements of our credit facilities as of June 30, 2020. However, any continued increase in realized losses or unrealized depreciation of our investment portfolio or further significant reductions in our net asset value as a result of the effects of the COVID-19 pandemic, or otherwise, increase the risk of breaching the relevant covenants requirements. Any breach of these requirements may adversely affect the access to sufficient debt and equity capital.

It is impossible at this time to determine the full scope of this outbreak, or any future outbreaks, how long any such outbreak, market disruption or uncertainties may last, the effect any governmental actions will have or the full potential impact on our liquidity and overall performance.

Capital Share Activity

Between June 26, 2015, commencement of operations, and January 31, 2020, the date of Alcentra Acquisition, we entered into subscription agreements (collectively, the “Subscription Agreements”) with several investors, including CCG LP, providing for the private placement of our common shares. Pursuant to the Subscription Agreements, between June 26, 2015 and January 31, 2020, we issued 23,127,335 common shares for aggregate proceeds of $456.3 million, of which $10.0 million was from CCG LP. Proceeds from the issuances were used to fund our investing activities and for other general corporate purposes. Upon closing of the Alcentra Acquisition, all unfunded commitments of stockholders subscribing in private offering were terminated.

In connection with the Alcentra Acquisition, we issued 5,203,016 shares as part of the consideration paid for net assets acquired.

During the six months ended June 30, 2020, we issued 30,128 shares of our common stock to investors who have opted into our dividend reinvestment plan for proceeds of $0.6 million. During the six months ended June 30, 2019, we issued 33,067 shares of our common stock to investors who have opted into our dividend reinvestment plan for proceeds of $0.6 million.

Debt

Debt consisted of the following as of June 30, 2020 and December 31, 2019:

($ in millions)


	June 30, 2020
	Aggregate Principal Amount Committed		Drawn Amount		Amount Available (1)		Carrying Value (2)		Weighted Average Debt Outstanding		Weighted Average Interest Rate
SPV Asset Facility	$	350.0	$	236.0	$	114.0	$	236.0	$	226.5		2.42	%
Corporate Revolving Facility		200.0		147.9		52.1		147.9		152.5		2.65	%
Internotes ^®		16.4		16.4		—		16.4		24.4		6.40	%

Total Debt	$	566.4	$	400.3	$	166.1	$	400.3	$	403.4		2.67	%


	December 31, 2019
	Aggregate Principal Amount Committed		Drawn Amount		Amount Available⁽¹⁾		Carrying Value⁽²⁾		Weighted Average Debt Outstanding		Weighted Average Interest Rate
SPV Asset Facility	$	250.0	$	220.7	$	29.3	$	220.7	$	201.0		4.03	%
Corporate Revolving Facility		200.0		104.7		95.3		104.7		74.9		4.26	%

Total Debt	$	450.0	$	325.4	$	124.6	$	325.4	$	275.9		4.10	%

(1)	The amount available is subject to any limitations related to the respective debt facilities’ borrowing bases and foreign currency translation adjustments.

(2)	Amount presented excludes netting of deferred financing costs.

The carrying value of our debt as of June 30, 2020 and December 31, 2019 approximates our fair value as the debt, issued at market terms, includes variable interest rates.

SPV Asset Facility

On March 28, 2016, Crescent Capital BDC Funding, LLC (“CCAP SPV”), a wholly owned subsidiary of CCAP, entered into a loan and security agreement, as amended (the “SPV Asset Facility”) with us as the collateral manager, seller and equity holder, CCAP SPV as the borrower, the banks and other financial institutions from time to time party thereto as lenders, and Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent, collateral agent, and lender. Between February 8, 2017 and March 10, 2020, we have entered into multiple amendments to the SPV Asset Facility to, among other things, increase the facility limit from $75 million to $350 million.

The maximum commitment amount under the SPV Asset Facility is $350 million, and may be increased with the consent of Wells Fargo or reduced upon our request. Proceeds of the Advances under the SPV Asset Facility may be used to acquire portfolio investments, to make distributions to us in accordance with the SPV Asset Facility, and to pay related expenses. The maturity date is the earlier of: (a) the date the borrower voluntarily reduces the commitments to zero, (b) March 10, 2025 (the Facility Maturity Date) and (c) the date upon which Wells Fargo declares the obligations due and payable after the occurrence of an Event of Default. Borrowings under the SPV Asset Facility bear interest at LIBOR plus a margin with no LIBOR floor. The margin is between 1.65% and 2.20% as determined by the proportion of liquid and illiquid loans pledged to the SPV Asset Facility. We pay unused facility fees of 0.50% per annum on committed but undrawn amounts under the SPV Asset Facility. The SPV Asset Facility includes customary covenants, including certain limitations on the incurrence of additional indebtedness and liens, as well as usual and customary events of default for revolving credit facilities of this nature.

Also on March 28, 2016, we, as seller, and CCAP SPV, as purchaser, entered into a loan sale agreement whereby we will sell certain assets to CCAP SPV. We consolidate CCAP SPV in our consolidated financial statements and no gain or loss is expected to result from the sale of assets to CCAP SPV. We retain a residual interest in assets contributed to or acquired by CCAP SPV through our 100% ownership of CCAP SPV. The facility size is subject to availability under the borrowing base, which is based on the amount of CCAP SPV’s assets from time to time, and satisfaction of certain conditions, including an asset coverage test and certain concentration limits.

Corporate Revolving Facility

On August 20, 2019, we entered into the “Corporate Revolving Facility” with Ally Bank (“Ally”), as Administrative Agent and Arranger. Proceeds of the advances under the Revolving Credit Agreement may be used to acquire portfolio investments, to make distributions to us in accordance with the Revolving Credit Agreement and to pay related expenses. The maximum principal amount of the Corporate Revolving Facility is $200 million, subject to availability under the borrowing base.

Borrowings under the Corporate Revolving Facility bear interest at LIBOR plus a 2.30% margin with no LIBOR floor. We pay unused facility fees of 0.50% per annum on committed but undrawn amounts under the Corporate Revolving Facility. Interest is payable monthly in arrears. Any amounts borrowed under the Corporate Revolving Facility, and all accrued and unpaid interest, will be due and payable, on August 20, 2024.

The Corporate Revolving Facility replaced the prior corporate revolving facility with Capital One, National Association. The maximum principal amount of the prior corporate revolving facility was $85 million, subject to availability under the borrowing base. Borrowings under the prior corporate revolving facility bore interest at LIBOR plus a 1.55% margin with no LIBOR floor. We paid unused facility fees of 0.20% per annum on committed but undrawn amounts. Interest was payable monthly in arrears. We paid down in full and terminated the prior corporate revolving facility on August 20, 2019.

InterNotes^®

On January 31, 2020, in connection with the Alcentra Acquisition, we assumed direct unsecured fixed interest rate obligations or “InterNotes^®”. The majority of InterNotes^® were issued by Alcentra Corporation between January 2015 and January 2016. Each series of notes has been issued by a separate trust administered by U.S. Bank. As of June 30, 2020, the outstanding Internotes^® bear interest at fixed interest rates ranging between 6.25% and 6.75% and offer a variety of maturities ranging between February 15, 2021 and April 15, 2022.

The summary information regarding the SPV Asset Facility, Corporate Revolving Facility, InterNotes^® and prior corporate revolving facility for the three and six months ended June 30, 2020 and 2019, were as follows:

($ in millions)


	For the three months ended						For the six months ended
	June 30, 2020			June 30, 2019			June 30, 2020			June 30, 2019
Borrowing interest expense	$	3.1		$	2.9		$	7.0		$	5.5
Unused facility fees		0.2			0.1			0.4			0.1
Amortization of financing costs		0.3			0.2			0.6			0.4

Total interest and credit facility expenses	$	3.6		$	3.2		$	8.0		$	6.0

Weighted average interest rate		2.98	%		4.50	%		3.44	%		4.53	%
Weighted average outstanding balance	$	417.8		$	254.8		$	403.4		$	243.4

To the extent we determine that additional capital would allow us to take advantage of additional investment opportunities, if the market for debt financing presents attractively priced debt financing opportunities, or if our Board otherwise determines that leveraging our portfolio would be in our best interest and the best interests of our stockholders, we may enter into credit facilities in addition to our SPV Asset Facility and Corporate Revolving Facility. We would expect any such credit facilities may be secured by certain of our assets and may contain advance rates based upon pledged collateral. The pricing and other terms of any such facilities would depend upon market conditions when we enter into any such facilities as well as the performance of our business, among other factors

As of June 30, 2020 and December 31, 2019, our asset coverage ratio was 2.26 to 1 and 2.25 to 1, respectively. We may also refinance or repay any of our indebtedness at any time based on our financial condition and market conditions. See Note 6. Debt to our consolidated financial statements for more detail on the debt facilities.

STOCK REPURCHASE PROGRAM

For the six months ended June 30, 2020, we repurchased 192,415 shares at an average price per share, including commissions, of $11.48.

OFF BALANCE SHEET ARRANGEMENTS

Our investment portfolio may contain debt investments that are in the form of lines of credit and unfunded delayed draw commitments, which require us to provide funding when requested by portfolio companies in accordance with the terms of the underlying loan agreements. Unfunded commitments to provide funds to portfolio companies are not reflected on our Consolidated Statements of Assets and Liabilities. Our unfunded commitments may be significant from time to time. These commitments will be subject to the same underwriting and ongoing portfolio maintenance as are the on-balance sheet financial instruments that we hold. Since these commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. As of June 30, 2020 and December 31, 2019, we had aggregate unfunded commitments totaling $66.6 million and $82.7 million including foreign denominated commitments converted to USD at the balance sheet date, respectively, under loan and financing agreements.

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”). The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in the economic environment, financial markets and any other parameters used in determining such estimates could cause actual results to differ materially. The critical accounting policies should be read in connection with our risk factors as disclosed herein.

In addition to the discussion below, our critical accounting policies are further described in Note 2. Summary of Significant Accounting Policies to our consolidated financial statements.

Investment Valuation

Investments for which market quotations are readily available are typically valued at those market quotations. To validate market quotations, we utilize a number of factors to determine if the quotations are representative of fair value, including the source and number of the quotations. Debt and equity securities that are not publicly traded or whose market prices are not readily available are valued at fair value as determined in good faith by the Board, based on, among other things, the input of the Advisor, our Audit Committee and independent third-party valuation firms engaged at the direction of the Board.

The Board oversees and supervises a multi-step valuation process, which includes, among other procedures, the following:

•

The valuation process begins with each investment being initially valued by the investment professionals responsible for the portfolio investment in conjunction with the portfolio management team.

•

The Advisor’s management reviews the preliminary valuations with the investment professionals. Agreed upon valuation recommendations are presented to the Audit Committee.

•

The Audit Committee reviews the valuations presented and recommends values for each investment to the Board.

•

The Board reviews the recommended valuations and determines the fair value of each investment.

We currently conduct this valuation process on a quarterly basis.

In connection with debt and equity securities that are valued at fair value in good faith by the Board, the Board will periodically engage independent third-party valuation firms to estimate a range of fair values for a sample of investments, which are used to corroborate management’s fair value estimates.

We apply Financial Accounting Standards Board ASC 820, Fair Value Measurement (ASC 820), as amended, which establishes a framework for measuring fair value in accordance with GAAP and required disclosures of fair value measurements. ASC 820 determines fair value to be the price that would be received for an investment in a current sale, which assumes an orderly transaction between market participants on the measurement date. Market participants are defined as buyers and sellers in the principal or most advantageous market (which may be a hypothetical market) that are independent, knowledgeable, and willing and able to transact. In accordance with ASC 820, we consider our principal market to be the market that has the greatest volume and level of activity. ASC 820 specifies a fair value hierarchy that prioritizes and ranks the level of observability of inputs used in the determination of fair value. In accordance with ASC 820, these levels are summarized below:

Level 1—Valuations based on quoted prices in active markets for identical assets or liabilities that we have the ability to access.

Level 2—Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

In addition to using the above inputs in investment valuations, we apply the valuation policy approved by our Board that is consistent with ASC 820. Consistent with the valuation policy, we evaluate the source of inputs, including any markets in which our investments are trading (or any markets in which securities with similar attributes are trading), in determining fair value. When a security is valued based on prices provided by reputable dealers or pricing services (that is, broker quotes), we subject those prices to various criteria in making the determination as to whether a particular investment would qualify for classification as a Level 2 or Level 3 investment. For example, we review pricing methodologies provided by dealers or pricing services in order to determine if observable market information is being used, versus unobservable inputs. Some additional factors considered include the number of prices obtained as well as an assessment as to their quality. Transfers between levels, if any, are recognized at the beginning of the period in which the transfers occur.

During the six months ended June 30, 2020, we recorded $0.0 million in transfers from Level 3 to Level 2 and $20.3 million in transfers from Level 2 to Level 3 due to a decrease in observable inputs in market data. During the six months ended June 30, 2019, we recorded $8.4 million in transfers from Level 3 to Level 2 and $6.6 million in transfers from Level 2 to Level 3 due to an increase and a decrease in observable inputs in market data.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Additionally, the fair value of such investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that may ultimately be realized. Further, such investments are generally less liquid than publicly traded securities and may be subject to contractual and other restrictions on resale. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we could realize amounts that are different from the amounts presented and such differences could be material. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected herein. See Note 4. Investments and Note 5. Fair Value of Financial Instruments for additional information on our investment portfolio.

Interest and Dividend Income Recognition

Dividend income from common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly-traded portfolio companies. Dividend income from preferred equity securities is recorded on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Each distribution received from an equity investment is evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, we will not record distributions from equity investments as dividend income unless there is sufficient current or accumulated earnings prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction of capital are recorded as a reduction in the cost basis of the investment.

Certain investments have contractual payment-in-kind (“PIK”) interest or dividends. PIK represents accrued interest or accumulated dividends that are added to the loan principal or cost basis of the investment on the respective interest or dividend payment dates rather than being paid in cash and generally becomes due at maturity or upon being called by the issuer. PIK is recorded as interest or dividend income, as applicable. If at any point we believe PIK is not expected to be realized, the investment generating PIK will be placed on non-accrual status. Accrued PIK interest or dividends are generally reversed through interest or dividend income, respectively, when an investment is placed on non-accrual status.

As of June 30, 2020, we had five portfolio companies with eight investment positions on non-accrual status, which represented 3.9% and 2.4% of the total debt investments at cost and fair value, respectively. As of December 31, 2019, we had one portfolio company with three investment positions on non-accrual status, which represented 1.9% and 1.0% of the total debt investments at cost and fair value, respectively.

Income Taxes

We have elected to be treated as a BDC under the 1940 Act. We also have elected to be treated as a RIC under the Internal Revenue Code. So long as we maintain our status as a RIC, we will generally not pay corporate-level U.S. federal income or excise taxes on any ordinary income or capital gains that we distribute at least annually to our stockholders as dividends. As a result, any tax liability related to income earned and distributed by us represents obligations of our stockholders and will not be reflected in our consolidated financial statements.

We evaluate tax positions taken or expected to be taken in the course of preparing our consolidated 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 reversed and recorded as a tax benefit or expense in the current year. All penalties and interest associated with income taxes are included in income tax expense. Conclusions regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, on-going analyses of tax laws, regulations and interpretations thereof. We account for income taxes in conformity with ASC Topic 740 — Income Taxes (“ASC Topic 740”). ASC Topic 740 provides guidelines for how uncertain tax positions should be recognized, measured, presented and disclosed in financial statements.

In order for us not to be subject to federal excise taxes, we must distribute annually an amount at least equal to the sum of (i) 98% of our ordinary income (taking into account certain deferrals and elections), (ii) 98.2% of our net capital gains from the current year and (iii) any undistributed ordinary income and net capital gains from preceding years. We, at our discretion, may carry forward taxable income in excess of calendar year dividends and pay a 4% excise tax on this income. If we choose to do so, this generally would increase expenses and reduce the amount available to be distributed to stockholders. We accrue excise tax on estimated undistributed taxable income as required on a quarterly basis. For the three and six months ended June 30, 2020, we expensed an excise tax of $0.1 and $0.3 million, respectively, of which $0.2 million remained payable. For the three and six months ended June 30, 2019, we expensed an excise tax of $0 and $0, respectively, of which $0.0 million remained payable.

CBDC Universal Equity, Inc. and Alcentra BDC Equity Holdings, LLC are taxable entities (“Taxable Subsidiaries”). The Taxable Subsidiaries permit us to hold equity investments in portfolio companies which are “pass through” entities for tax purposes and continue to comply with the “source income” requirements contained in RIC tax provisions of the Code. The Taxable Subsidiaries are not consolidated with us for income tax purposes and may generate income tax expense, benefit, and the related tax assets and liabilities, as a result of their ownership of certain portfolio investments. The income tax expense, or benefit, if any, and related tax assets and liabilities are reflected in our consolidated financial statements.

For the three and six months ended June 30, 2020, we recognized a benefit/(provision) for taxes of $(0.2) million and $0.3 million, respectively, on unrealized appreciation/(depreciation) on investments and net operating losses and federal tax credits related to the Taxable Subsidiaries. For the three and six months ended June 30, 2019, we recognized a benefit/(provision) for taxes of $(0.0) million and $(0.5) million, respectively, on unrealized appreciation/(depreciation) on investments and net operating losses and federal tax credits related to the Taxable Subsidiaries. As of June 30, 2020 and December 31, 2019, $1.0 million and $0.9 million, respectively, was included in deferred tax liability on the Consolidated Statements of Assets and Liabilities primarily relating to deferred taxes on unrealized gains on investments held in our corporate subsidiaries and other temporary book to tax differences of the corporate subsidiaries. As of June 30, 2020 and December 31, 2019, $0.8 million and $0.4 million, respectively, was included in deferred tax assets on the Consolidated Statements of Assets and Liabilities relating to net operating loss carryforwards and unrealized losses on investments and other temporary book to tax differences that are expected to be used in future periods. A portion of the taxable subsidiaries’ net operating loss and capital loss carryovers are subject to an annual use limitation under the Code and related regulations.

For the three and six months ended June 30, 2020 and 2019, there were no realized gains on investments requiring a recognition of a tax provision.

We intend to comply with the applicable provisions of the Code, pertaining to regulated investment companies and to make distributions of taxable income sufficient to relieve it from substantially all federal income taxes. As of June 30, 2020, we are subject to examination by U.S. federal tax authorities for returns filed for the three most recent calendar years and by state tax authorities for returns filed for the four most recent calendar years.

We may generate qualified net interest income or qualified net short-term capital gains that may be exempt from U.S. withholding tax when distributed to foreign stockholders. A RIC is permitted to designate distributions of qualified net interest income and qualified short-term capital gains as exempt from U.S. withholding tax when paid to non-U.S. shareholders with proper documentation. As of June 30, 2020, the percentage of 2020 income estimated as qualified interest income for tax purposes was 94.1%.

New Accounting Pronouncements

In March 2020, the FASB issued Accounting Standard Update (“ASU”) No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This ASU provides optional exceptions for applying GAAP to contract modifications, hedging relationships and other transactions affected reference rate reform if certain criteria are met. ASU 2020-04 is elective and can be adopted between March 12, 2020 and December 31, 2022. We expect that the adoption of this guidance will not have a material impact on our consolidated financial statements.

Recent Developments

On July 30, 2020, we completed a private offering of $50.0 million aggregate principal amount of 5.95% senior unsecured notes due July 30, 2023 (the “Notes”). The Notes will be issued in two closings. The initial issuance of $25.0 million of Notes closed on July 30, 2020. The issuance of the remaining $25.0 million of Notes is expected to occur on or before October 28, 2020.

On August 7, 2020, our Board of Directors declared a regular cash dividend of $0.41 per share, which will be paid on or about October 15, 2020 to stockholders of record as of September 30, 2020.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are subject to financial market risks, including valuation risk, interest rate risk and currency risk.

Valuation Risk

We have invested, and plan to continue to invest, in illiquid debt and equity securities of private companies. These investments will generally not have a readily available market price, and we will value these investments at fair value as determined in good faith by our Board in accordance with our valuation policy. There is no single standard for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we may realize amounts that are different from the amounts presented and such differences could be material. See Note 2. Summary of Significant Account Policies to our consolidated financial statements for more details on estimates and judgments made by us in connection with the valuation of our investments.

Interest Rate Risk

Interest rate sensitivity refers to the change in earnings that may result from changes in the level of interest rates. We also fund a portion of our investments with borrowings and our net investment income will be affected by the difference between the rate at which we invest and the rate at which we borrow. Accordingly, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.

We regularly measure our exposure to interest rate risk. We assess interest rate risk and manage our interest rate exposure on an ongoing basis by comparing our interest rate-sensitive assets to our interest rate-sensitive liabilities. Based on that review, we determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates.

As of June 30, 2020, 96.9% of the investments at fair value in our portfolio were at variable rates, subject to interest rate floors. The SPV Asset Facility and Corporate Revolving Facility also bear interest at variable rates.

Assuming that our Consolidated Statements of Assets and Liabilities as of June 30, 2020 were to remain constant and that we took no actions to alter our existing interest rate sensitivity, the following table shows the annualized impact of hypothetical base rate changes in interest rates (considering interest rate floors for floating rate instruments):

($ in millions)


Basis Point Change	Interest Income		Interest Expense		Increase (decrease) in net assets resulting from operations
Up 300 basis points	$	24.3	$	11.5	$	12.8
Up 200 basis points	$	16.2	$	7.7	$	8.5
Up 100 basis points	$	8.1	$	3.8	$	4.3
Down 25 basis points	$	(0.5)	$	(1.0)	$	0.5
Down 100 basis points	$	(0.6)	$	(1.2)	$	0.6

Although we believe that this analysis is indicative of our existing sensitivity to interest rate changes, it does not adjust for changes in the credit market, credit quality, the size and composition of the assets in our portfolio and other business developments that could affect our net income. Accordingly, we cannot assure you that actual results would not differ materially from the analysis above.

We may in the future hedge against interest rate fluctuations by using hedging instruments such as interest rate swaps, futures, options and forward contracts. While hedging activities may mitigate our exposure to adverse fluctuations in interest rates, certain hedging transactions that we may enter into in the future, such as interest rate swap agreements, may also limit our ability to participate in the benefits of lower interest rates with respect to our portfolio investments.

Currency Risk

From time to time, we may make investments that are denominated in a foreign currency. These investments are converted into U.S. dollars at the balance sheet date, exposing us to movements in foreign exchange rates. We may employ hedging techniques to minimize these risks, but we cannot assure you that such strategies will be effective or without risk to us. We may seek to utilize instruments such as, but not limited to, forward contracts to seek to hedge against fluctuations in the relative values of our portfolio positions from changes in currency exchange rates. To the extent the loan or investment is based on a floating rate, we may seek to utilize interest rate derivatives to hedge our exposure to changes in the associated rate. As of June 30, 2020, we had £9.1 million and €16.1 million notional exposure to foreign currency forward contracts related to investments totaling £9.4 million and €16.6.

ITEM 4.

CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2020. Based upon that evaluation and subject to the foregoing, our principal executive officer and principal financial officer concluded that, as of June 30, 2020, the design and operation of our disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.

(b) Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our consolidated financial statements; providing reasonable assurance that receipts and expenditures of company assets are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisition, use or disposition of company assets that could have a material effect on our consolidated financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a material misstatement of our consolidated financial statements would be prevented or detected.

Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of June 30, 2020.

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2020, that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

We are party to certain lawsuits in the normal course of business, including proceedings relating to the enforcement of our rights under loans to or other contracts with our portfolio companies. In addition, Alcentra Capital was involved in various legal proceedings that we assumed in connection with the Alcentra Acquisition. Furthermore, third parties may try to seek to impose liability on us in connection with our activities or the activities of our portfolio companies. While the outcome of any such legal proceedings cannot at this time be predicted with certainty, we do not expect that these legal proceedings will materially affect our business, financial condition or results of operations.

On or about December 23, 2019, stockholders of Alcentra Capital filed two virtually identical stockholder class action complaints purportedly on behalf of holders of the common stock of Alcentra Capital against the members of Alcentra Capital’s board of directors and certain former Alcentra Capital officers, in the Circuit Court for Baltimore City, Maryland alleging that the defendants breached their fiduciary duties to the public stockholders of Alcentra Capital by commencing a sales process allegedly in response to certain actions by Stilwell Value Partners VII, Stilwell Activist Fund, Stilwell Activist Investments, and Stilwell Associates, and by omitting allegedly material information concerning the transaction, the resignation of certain directors of Alcentra, and the financial analysis and fairness opinion of Houlihan Lokey from the joint proxy statement filed with the SEC on December 11, 2019 as part of the registration statement relating to the Alcentra Acquisition. The complaints sought to recover compensatory damages for alleged losses resulting from the alleged breaches of fiduciary duty. We assumed indemnification responsibilities owed by Alcentra to its former directors and officers with respect to this proceeding in connection with the Alcentra Acquisition and, in April 2020, the Circuit Court for Baltimore City dismissed both stockholder class action complaints. The plaintiffs in both cases did not timely file an appeal to the decision of the Circuit Court of Baltimore City and as a consequence the dismissal of each class action complaint is final.

ITEM 1A.

RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, which could materially affect our business, financial condition and/or operating results. These risks are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.

Events outside of our control, including public health crises such as the novel coronavirus (“COVID-19”), may negatively affect the results of our operations.

As of the filing date of this Quarterly Report, there is an outbreak of a highly contagious form of a novel coronavirus known as “COVID-19,” which the World Health Organization has declared a global pandemic. The United States has declared a national emergency, and for the first time in its history, every state in the United States is under a federal disaster declaration. Many states, including those in which we and our portfolio companies operate, have issued orders requiring the closure of non-essential businesses and/or requiring residents to stay at home. The COVID-19 pandemic and preventative measures taken to contain or mitigate its spread have caused, and are continuing to cause, business shutdowns, cancellations of events and travel, significant reductions in demand for certain goods and services, reductions in business activity and financial transactions, supply chain interruptions and overall economic and financial market instability both globally and in the United States. Such effects will likely continue for the duration of the pandemic, which is uncertain, and for some period thereafter. Potential consequences of the current unprecedented measures taken in response to the spread of COVID-19, and current market disruptions and volatility that may impact our business include, but are not limited to:

•

sudden, unexpected and/or severe declines in the market price of our securities or net asset value;

•

inability of us to accurately or reliably value our portfolio;

•

inability of us to comply with certain asset coverage ratios that would prevent us from paying dividends to our common stockholders and that could result breaches of covenants or events of default under our credit agreement or debt indentures;

•

inability of us to pay any dividends and distributions or service our debt;

•

inability of us to maintain our status as a regulated investment company under the Code;

•

potentially severe, sudden and unexpected declines in the value of our investments;

•

increased risk of default or bankruptcy by the companies in which we invest;

•

increased risk of companies in which we invest being unable to weather an extended cessation of normal economic activity and thereby impairing their ability to continue functioning as a going concern;

•

reduced economic demand resulting from mass employee layoffs or furloughs in response to governmental action taken to slow the spread of COVID-19, which could impact the continued viability of the companies in which we invest;

•

companies in which we invest being disproportionally impacted by governmental action aimed at slowing the spread of COVID-19 or mitigating its economic effects;

•

limited availability of new investment opportunities;

•

inability of us to replace our existing leverage when it becomes due or to replace it on terms as favorable as our existing leverage;

•

a reduction in interest rates, including interest rates based on LIBOR and similar benchmarks, which may adversely impact our ability to lend money at attractive rates; and

•

general threats to our ability to continue investment operations and to operate successfully as a business development company.

The COVID-19 pandemic (including the preventative measures taken in response thereto) has to date (i) created significant business disruption issues for certain of our portfolio companies, and (ii) materially and adversely impacted the value and performance of certain of our portfolio companies. The COVID-19 pandemic is continuing as of the filing date of this Quarterly Report, and its extended duration may have further adverse impacts on our portfolio companies after June 30, 2020, including for the reasons described below. Although on March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which contains provisions intended to mitigate the adverse economic effects of the COVID-19 pandemic, it is uncertain whether, or how much, our portfolio companies will be able to benefit from the CARES Act or any other subsequent legislation intended to provide financial relief or assistance. As a result of this disruption and the pressures on their liquidity, certain of our portfolio companies have been, or may continue to be, incentivized to draw on most, if not all, of the unfunded portion of any revolving or delayed draw term loans made by us, subject to availability under the terms of such loans.

The effects described above on our portfolio companies could impact their ability to make payments on their loans on a timely basis and may impact their ability to continue making their loan payments on a timely basis or meeting their loan covenants. The inability of portfolio companies to make timely payments or meet loan covenants may in the future require us to undertake amendment actions with respect to our investments or to restructure our investments, which may include the need for us to make additional investments in our portfolio companies (including debt or equity investments) beyond any existing commitments, exchange debt for equity, or change the payment terms of our investments to permit a portfolio company to pay a portion of its interest through payment-in-kind, which would defer the cash collection of such interest and add it to the principal balance, which would generally be due upon repayment of the outstanding principal.

The COVID-19 pandemic has adversely impacted the fair value of our investments as of June 30, 2020, and the values presently assigned may differ materially from the values that we may ultimately realize with respect to our investments. The impact of the COVID-19 pandemic may not yet be fully reflected in the valuation of our investments as our valuations, and particularly valuations of private investments and private companies, are inherently uncertain, may fluctuate over short periods of time and are often based on estimates, comparisons and qualitative evaluations of private information that is often historical. As a result, our valuations at June 30, 2020 may not show the complete or continuing impact of the COVID-19 pandemic and the resulting measures taken in response thereto. In addition, write downs in the value of our investments have reduced, and any additional write downs may further reduce, our net asset value (and, as a result, our asset coverage calculation). Accordingly, we may continue to incur additional net unrealized losses or may incur realized losses after June 30, 2020, which could have a material adverse effect on our business, financial condition and results of operations.

The volatility and disruption to the global economy from the COVID-19 pandemic is impacting the pace of our investment activity, which could adversely impact our results of operations. This volatility and disruption has also increased spreads in the private debt capital markets.

In response to the COVID-19 pandemic, our Advisor instituted a work from home policy until it is deemed safe to return to the office. Such a policy of an extended period of remote working by our Advisor and/or its affiliate’s employees could strain our technology resources and introduce operational risks, including heightened cybersecurity risk. Remote working environments may be less secure and more susceptible to hacking attacks, including phishing and social engineering attempts that seek to exploit the COVID-19 pandemic.

Despite actions of the U.S. federal government and foreign governments, the uncertainty surrounding the COVID-19 pandemic and other factors has contributed to significant volatility and declines in the global public equity markets and global debt capital markets, including the market price of shares of our common stock and the trading prices of our issued debt securities. See “Risk Factors-Risks Relating to Our Business and Structure-Global capital markets could enter a period of severe disruption and instability. These conditions have historically affected and could again materially and adversely affect debt and equity capital markets in the United States and around the world and our business.” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

It is virtually impossible to determine the ultimate impact of COVID-19 at this time. Accordingly, an investment in us is subject to an elevated degree of risk as compared to other market environments.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Stock Repurchase Program

On January 31, 2020, we entered into a $20.0 million repurchase plan which allowed us to purchase shares in the open market any time our common stock traded below ninety percent (90%) of the most recently disclosed net asset value per share. The plan was subject to compliance with our liquidity, covenant, leverage and regulatory requirements. Pursuant to the terms of the repurchase plan, repurchases began on March 2, 2020. We have provided our stockholders with notice of our ability to repurchase shares of our common stock in accordance with 1940 Act requirements. We have retired all such shares of common stock that we purchased in connection with the stock repurchase program. On April 9, 2020, our Board of Directors unanimously approved the termination of our stock repurchase program.

The following table presents information with respect to our stock repurchase program during the three and six months ended June 30, 2020.

($ in millions except per share price)


	Three Months Ended June 30, 2020			Three Months Ended June 30, 2019		Six Months Ended June 30, 2020			Six Months Ended June 30, 2019
Dollar amount repurchased	$	0.3		$	—	$	2.2		$	—
Shares repurchased		33,187			—		192,415			—
Average price per share including commission	$	9.83		$	—	$	11.48		$	—
Weighted average discount to net asset value		40.46	%		—		40.89	%⁽¹⁾		—

(1)	Weighted average discount is calculated using the December 31, 2019 proforma combined NAV of $19.42 per share assuming the effect of the Alcentra Acquisition.

Issuer purchases of equity securities

The following table provides information regarding purchases of our common shares in connection with the stock repurchase plan for each month in the six month period ended June 30, 2020:

($ in millions except per share price)


Period	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs ⁽¹⁾
January 2020	$	—		—	$	—
February 2020		—		—		—
March 2020		11.82		159,228		14.6
April 2020		9.83		33,187		14.3
May 2020		—		—		—
June 2020		—		—		—

Total	$	11.48		192,415	$	14.3

(1)	The $20.0 million maximum repurchase amount has been subsequently reduced by $3.5 million provided for under Rule 10b5-1 plans entered into by our affiliates with respect to the common stock for a similar time period at the same price.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

OTHER INFORMATION

None.

ITEM 5.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following documents are filed as part of this Quarterly Report:


1.		Financial Statements—Financial statements are included in Item 1. See the Index to the Consolidated Financial Statements on page F-1 of this quarterly report on Form 10-Q.

2		Financial Statement Schedules—None. We have omitted financial statements schedules because they are not required or are not applicable, or the required information is shown in the consolidated financial statements or notes to the consolidated financial statements included in this quarterly report on Form 10-Q.

3.		Exhibits—The following is a list of all exhibits filed as a part of this quarterly report on Form 10-Q, including those incorporated by reference.

2.1		Agreement and Plan of Merger, dated August 12, 2019, by and among the Company, Atlantis Acquisition Sub, Inc., Alcentra Capital Corporation and Crescent Cap Advisors, LLC (formerly CBDC Advisors, LLC) (incorporated by reference to Exhibit 2.1 to the Company’s current report on Form 8-K filed on August 13, 2019).

2.2		Amendment No. 1, dated September 27, 2019, to Agreement and Plan of Merger by and among the Company, Atlantis Acquisition Sub, Inc., Alcentra Capital Corporation and Crescent Cap Advisors, LLC (incorporated by reference to Annex B to the Company’s Preliminary Proxy Statement filed on October 3, 2019.

2.3		Agreement and Plan of Merger, dated September 27, 2019, by and between the Company and Crescent Reincorporation Sub, Inc. (incorporated by reference to Exhibit 2.3 to the Company’s quarterly report on Form 10-Q filed on November 7, 2019)

3.1		Articles of Amendment and Restatement (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed on January 30, 2020).

3.2		Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K filed on January 30, 2020).

4.1		Amended and Restated Dividend Reinvestment Plan (incorporated by reference to Exhibit 4.1 to the Company’s current report on Form 10-K filed on March 4, 2020).

4.2		Form of Base Indenture (incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K filed on February 3, 2020).

4.3		Form of Supplemental Indenture (incorporated by reference to Exhibit 4.2 to the Company’s Form 8-K filed on February 3, 2020).

4.4		Form of First Supplemental Indenture relating to the Alcentra Capital InterNotes^® 6.500% Notes due 2022 (incorporated by reference to Exhibit 4.3 to the Company’s Form 8-K filed on February 3, 2020).

4.5		Form of Global Note relating to the Alcentra Capital InterNotes^® 6.500% Notes due 2022 (included as Exhibit A to the Form of First Supplemental Indenture) (incorporated by reference to Exhibit 4.4 to the Company’s Form 8-K filed on February 3, 2020).

4.6		Form of Seventh Supplemental Indenture relating to the Alcentra Capital InterNotes^® 6.750% Notes due 2022 (incorporated by reference to Exhibit 4.5 to the Company’s Form 8-K filed on February 3, 2020).

4.7		Form of Global Note relating to the Alcentra Capital InterNotes^® 6.750% Notes due 2022 (included as Exhibit A to the Form of Seventh Supplemental Indenture (incorporated by reference to Exhibit 4.6 to the Company’s Form 8-K filed on February 3, 2020).

4.8		Form of Eighth Supplemental Indenture relating to the Alcentra Capital InterNotes^® 6.25% Notes due 2020 (incorporated by reference to Exhibit 4.77 to the Company’s Form 8-K filed on February 3, 2020).

4.9		Form of Global Note relating to the Alcentra Capital InterNotes^® 6.25% Notes due 2020 (included as Exhibit A to the Form of Eighth Supplemental Indenture) (incorporated by reference to Exhibit 4.8 to the Company’s Form 8-K filed on February 3, 2020).

4.10		Form of Ninth Supplemental Indenture relating to the Alcentra Capital InterNotes^® 6.50% Notes due 2020 (incorporated by reference to Exhibit 4.9 to the Company’s Form 8-K filed on February 3, 2020).


4.11		Form of Global Note relating to the Alcentra Capital InterNotes^® 6.50% Notes due 2020 (included as Exhibit A to the Form of Ninth Supplemental Indenture) (incorporated by reference to Exhibit 4.10 to the Company’s Form 8-K filed on February 3, 2020).

4.12		Form of Tenth Supplemental Indenture relating to the Alcentra Capital InterNotes^® 6.50% Notes due 2021 (incorporated by reference to Exhibit 4.11 to the Company’s Form 8-K filed on February 3, 2020).

4.13		Form of Global Note relating to the Alcentra Capital InterNotes^® 6.50% Notes due 2021 (included as Exhibit A to the Form of Tenth Supplemental Indenture) (incorporated by reference to Exhibit 4.12 to the Company’s Form 8-K filed on February 3, 2020).

4.14		Form of Eleventh Supplemental Indenture relating to the Alcentra Capital InterNotes^® 6.50% Notes due 2021 (incorporated by reference to Exhibit 4.13 to the Company’s Form 8-K filed on February 3, 2020).

4.15		Form of Global Note relating to the Alcentra Capital InterNotes^® 6.50% Notes due 2021 (included as Exhibit A to the Form of Eleventh Supplemental Indenture) (incorporated by reference to Exhibit 4.14 to the Company’s Form 8-K filed on February 3, 2020).

4.16		Form of Twelfth Supplemental Indenture relating to the Alcentra Capital InterNotes^® 6.50% Notes due 2021 (incorporated by reference to Exhibit 4.15 to the Company’s Form 8-K filed on February 3, 2020).

4.17		Form of Global Note relating to the Alcentra Capital InterNotes^® 6.50% Notes due 2021 (included as Exhibit A to the Form of Twelfth Supplemental Indenture) (incorporated by reference to Exhibit 4.16 to the Company’s Form 8-K filed on February 3, 202)).

4.18		Form of Thirteenth Supplemental Indenture relating to the Alcentra Capital InterNotes^® 6.375% Notes due 2021 (incorporated by reference to Exhibit 4.17 to the Company’s Form 8-K filed on February 3, 2020).

4.19		Form of Global Note relating to the Alcentra Capital InterNotes^® 6.375% Notes due 2021 (included as Exhibit A to the Form of Thirteenth Supplemental Indenture) (incorporated by reference to Exhibit 4.18 to the Company’s Form 8-K filed on February 3, 2020)).

4.20		Form of Fourteenth Supplemental Indenture relating to the Alcentra Capital InterNotes^® 6.375% Notes due 2021 (incorporated by reference to Exhibit 4.19 to the Company’s Form 8-K filed on February 3, 2020).

4.21		Form of Global Note relating to the Alcentra Capital InterNotes^® 6.375% Notes due 2021 (included as Exhibit A to the Form of Fourteenth Supplemental Indenture) (incorporated by reference to Exhibit 4.20 to the Company’s Form 8-K filed on February 3, 2020).

4.22		Form of Fifteenth Supplemental Indenture relating to the Alcentra Capital InterNotes^® 6.375% Notes due 2021 (incorporated by reference to Exhibit 4.21 to the Company’s Form 8-K filed on February 3, 2020).

4.23		Form of Global Note relating to the Alcentra Capital InterNotes^® 6.375% Notes due 2021 (included as Exhibit A to the Form of Fifteenth Supplemental Indenture) (incorporated by reference to Exhibit 4.22 to the Company’s Form 8-K filed on February 3, 2020).

4.24		Form of Sixteenth Supplemental Indenture relating to the Alcentra Capital^® Internotes 6.375% Notes due 2021 (incorporated by reference to Exhibit 4.23 to the Company’s Form 8-K filed on February 3, 2020).

4.25		Form of Global Note relating to the Alcentra Capital InterNotes^® 6.375% Notes due 2021 (included as Exhibit A to the Form of Sixteenth Supplemental Indenture) (incorporated by reference to Exhibit 4.24 to the Company’s Form 8-K filed on February 3, 2020).

4.26		Form of Seventeenth Supplemental Indenture relating to the Alcentra Capital^® Internotes 6.25% Notes due 2021 (incorporated by reference to Exhibit 4.25 to the Company’s Form 8-K filed on February 3, 2020).

4.27		Form of Global Note relating to the Alcentra Capital InterNotes^® 6.25% Notes due 2021 (included as Exhibit A to the Form of Seventeenth Supplemental Indenture) (incorporated by reference to Exhibit 4.26 to the Company’s Form 8-K filed on February 3, 2020).

4.28		Form of Eighteenth Supplemental Indenture relating to the Alcentra Capital^® Internotes 6.25% Notes due 2021 (incorporated by reference to Exhibit 4.27 to the Company’s Form 8-K filed on February 3, 2020).


4.29		Form of Global Note relating to the Alcentra Capital InterNotes^® 6.25% Notes due 2021 (included as Exhibit A to the Form of Eighteenth Supplemental Indenture) (incorporated by reference to Exhibit 4.28 to the Company’s Form 8-K filed on February 3, 2020).

4.30		Form of Nineteenth Supplemental Indenture by and among Alcentra Capital Corporation, the Company and U.S. Bank National Association relating to the assumption of the Alcentra Capital InterNotes^® (incorporated by reference to Exhibit 4.29 to the Company’s Form 8-K filed on February 3, 2020).

4.31		Description of Securities (incorporated by reference to Exhibit 4.31 to the Company’s current report on Form 10-K filed on March 4, 2020).

4.32		Dividend Reinvestment Plan, effective as of June 26, 2020 (incorporated by reference to Exhibit 99.1 to the Company’s current report on Form 8-K filed on June 4, 2020).

10.1		Amended and Restated Investment Advisory Agreement by and between the Company and Crescent Cap Advisors, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on February 3, 2020).

10.2		Loan and Security Agreement, dated August 20, 2019, by and among the Company, as the Borrower, and certain banks and other financial intuitions party thereto from time to time as lenders and Ally Bank, as administrative agent, arranger and lender (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on August 20, 2019).

10.3		Amended and Restated Administration Agreement by and between the Company and CCAP Administration LLC (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed on February 3, 2020).

10.4		Trademark License Agreement, dated April 30, 2015, by and between the Company and CCG LP (incorporated by reference to Exhibit 10.3 to the Company’s Registration Statement on Form 10-Q (File No. 000-55380) filed on June 5, 2015).

10.5		Form of Indemnification Agreement (incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K filed on January 31, 2020).

10.6		Form of Advisory Fee Waiver Agreement by and between the Company and the Advisor (incorporated by reference to Exhibit 10.4 to the Company’s Registration Statement on Form 10-K (File No. 000-55380) filed on June 5, 2015).

10.7		Amended and Restated Advisory Fee Waiver Agreement, dated August 7, 2018, by and between the Company and the Advisor (incorporated by reference to Exhibit 10.11 to the Company’s current report on Form 10-Q filed on August 10, 2018).

10.8		Form of Subscription Agreement (incorporated by reference to Exhibit 10.5 to the Company’s Registration Statement on Form 10-K (File No. 000-55380) filed on June 5, 2015).

10.9		Custodian Agreement by and between the Company and State Street Bank and Trust Company (incorporated by reference to Exhibit 10.7 to the Company’s Registration Statement on Form 10-K (File No. 000-55380) filed on June 5, 2015).

10.10		Revolving Credit Agreement, dated June 29, 2015, among the Company, as Borrower, Natixis, New York Branch, as Administrative Agent and Lender (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form 8-K filed on July 2, 2015).

10.11		Loan and Security Agreement, dated March 28, 2016, among the Company as the Collateral Manager, Seller and Equityholder, Crescent Capital BDC Funding, LLC as the Borrower, the banks and other financial institutions from time to time party thereto as Lenders, and Wells Fargo Bank, National Association, as Administrative Agent, Collateral Agent, and Lender (incorporated by reference to Exhibit 10.1 to the Company’s copy of the Loan and Security Agreement on Form 8-K filed on March 28, 2016).

10.12		Second Amendment to Loan and Security Agreement, dated September 28, 2018, among the Company as the Collateral Manager, Seller and Equityholder, Crescent Capital BDC Funding, LLC as the Borrower, the banks and other financial institutions from time to time party thereto as Lenders, and Wells Fargo Bank, National Association, as Administrative Agent, Collateral Agent, and Lender (incorporated by reference to Exhibit 10.12 to the Company’s current report on Form 10-Q filed on November 9, 2018).

10.13		Third Amendment to Loan and Security Agreement, dated April 9, 2019, among Crescent Capital BDC, Inc., as the collateral manager, seller and equityholder, Crescent Capital BDC Funding, LLC, as the borrower, the banks and other financial institutions from time to time party thereto as lenders, and Wells Fargo Bank, National Association, as administrative agent, collateral agent, and lender (incorporated by reference to Exhibit 10.13 to the Company’s Current Report on Form 10-Q, filed on May 10, 2019)

10.14		Revolving Credit Agreement, dated June 29, 2017, among the Company, as Borrower, Capital One, National Association, as Administrative Agent, Lead Arranger, Managing Agent and Committed Lender (incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement on Form 8-K filed on June 30, 2017).


10.15		First Amendment to Revolving Credit Agreement, dated June 29, 2018, among the Company, as Borrower, Capital One, National Association, as Administrative Agent, Lead Arranger, Managing Agent and Committed Lender (incorporated by reference to Exhibit 10.10 to the Company’s current report on Form 10-Q filed on August 10, 2018).

10.16		Second Amendment to Revolving Credit Agreement, dated June 13, 2019, among the Company, as Borrower, Capital One, National Association, as Administrative Agent, Lead Arranger, Managing Agent and Committed Lender (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 10-Q, filed on August 13, 2019).

10.17		Transaction Support Agreement, dated August 12, 2019, between Crescent Capital BDC, Inc. and Crescent Cap Advisors, LLC (f/k/a CBDC Advisors, LLC) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 814-01132), filed on August 13, 2019).

10.18		Conformed Loan and Security Agreement (conformed through Amendment No. 4) (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on March 17, 2020)

10.19		Second Amendment to the Loan and Security Agreement, dated July 14, 2020, by and among the Company, as the Borrower, and certain banks and other financial institutions party thereto from time to time as lenders and Ally Bank, as administrative agent, arranger and lender (filed herewith).

10.20		Master Note Purchase Agreement, dated July 30, 2020, by and among Crescent Capital BDC, Inc. and the Purchasers signatory thereto (filed herewith).

14.1		Code of Ethics (incorporated by reference to Exhibit 14.1 to the Company’s current report on Form 10-K filed on March 4, 2020).

21.1		Subsidiaries of Crescent Capital BDC Inc. (incorporated by reference to Exhibit 21.1 to the Company’s current report on Form 10-K filed on March 4, 2020).

31.1		Certification of Chief Executive Officer, Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

31.2		Certification of Chief Financial Officer, Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

32		Certification of Chief Executive Officer and Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	Crescent Capital BDC, Inc.

Date: August 10, 2020	By:	/s/ Jason A. Breaux
		Jason A. Breaux
		Chief Executive Officer

Date: August 10, 2020	By:	/s/ Gerhard Lombard
		Gerhard Lombard
		Chief Financial Officer

Exhibit 10.19

SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT

THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is entered into as of July 14, 2020 by and among CRESCENT CAPITAL BDC, INC., a Delaware corporation (the “Borrower”); the Lenders party hereto; and ALLY BANK (“Administrative Agent”).

W I T N E S S E T H:

WHEREAS, Borrower, Administrative Agent and Lenders are parties to that certain Loan and Security Agreement dated as of August 20, 2019 (as amended, modified, waived, supplemented, restated or replaced from time to time prior to the date hereof, the “Loan Agreement”; unless otherwise defined herein, capitalized terms used herein that are not otherwise defined herein shall have the respective meanings assigned to such terms in the Loan Agreement, as amended hereby); and

WHEREAS, the parties hereto desire to amend certain provisions of the Loan Agreement, on the terms and subject to the satisfaction of the conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties agree as follows:

1. Amendments to Loan Agreement. Upon satisfaction of the conditions set forth in Section 2 hereof, the Loan Agreement is hereby amended as follows:

(a) Section 1.1 of the Loan Agreement is hereby amended by amending and restating the definitions of “Scheduled Revolving Period End Date” and “Termination Date” to read as follows:

“Scheduled Revolving Period End Date”: The earlier of (a) August 20, 2023 and (b) to the extent that any amount of the 2020 Unsecured Indebtedness remains outstanding, the date that is thirty (30) days prior to the maturity date of the 2020 Unsecured Indebtedness.

“Termination Date”: The earlier of (a) the date that is one (1) year after the Revolving Period End Date, (b) to the extent that any amount of the 2020 Unsecured Indebtedness remains outstanding, the date that is thirty (30) days prior to the maturity date of any such 2020 Unsecured Indebtedness, and (c) the date of the declaration of the Termination Date or the date of the automatic occurrence of the Termination Date pursuant to Section 9.2(a).

(b) Section 1.1 of the Loan Agreement is hereby amended by adding the following defined terms, in appropriate alphabetical order, to read as follows:

“2020 Unsecured Indebtedness”: Unsecured Indebtedness owing and/or issued by the Borrower on or prior to December 31, 2020 in an aggregate original principal amount not greater than Sixty-Five Million Dollars ($65,000,000), and designated by the Borrower as 2020 Unsecured Indebtedness.

(ii) (A) Unsecured Shorter-Term Indebtedness (including any refinancing or replacement thereof) assumed by Borrower in connection with the Atlantis Acquisition in an aggregate principal amount not to exceed $55,000,000, (B) the 2020 Unsecured Indebtedness and (C) other Unsecured Shorter-Term Indebtedness (including any refinancing or replacement thereof) in an aggregate principal amount not to exceed $5,000,000, so long as (w) no Default or Event of Default exists at the time of the incurrence, refinancing or replacement thereof or would result therefrom, (x) on the date of incurrence, refinancing or replacement thereof, the Borrower is in pro forma compliance with each of the covenants set forth in Sections 5.2(n)(i) and (ii) immediately after giving effect to the incurrence, refinancing or replacement thereof and on the date of such incurrence, refinancing or replacement the Borrower delivers to the Administrative Agent a certificate of a Responsible Officer to such effect, (y) prior to and immediately after giving effect to the incurrence, refinancing or replacement thereof, no Borrowing Base Deficiency exists, and (z) on the date of incurrence, refinancing or replacement thereof, the Borrower delivers to the Administrative Agent a Borrowing Base Certificate as at such date demonstrating compliance with (or a certification that the Borrower is in compliance with) subclause (y) immediately after giving effect to such incurrence, refinancing or replacement (for clarity, with respect to Revolving Loans and Delayed Draw Loans, “incurrence” shall be deemed to take place only at the time such Loan is entered into or the aggregate commitments thereunder are increased or extended).

(d) Section 5.2(x) of the Loan Agreement is hereby amended and restated to read as follows:

(x) Payments of Unsecured Shorter-Term Indebtedness Assumed in Connection with the Atlantis Acquisition or the 2020 Unsecured Indebtedness.

(i) The Borrower will not purchase, redeem, retire or otherwise acquire for value, or set apart any money for a sinking, defeasance or other analogous fund for the purchase, redemption, retirement or other acquisition of or make any voluntary payment or prepayment of the principal of or interest on, or any other amount owing in respect of any Unsecured Shorter-Term Indebtedness assumed in connection with the Atlantis Acquisition unless no Default or Event of Default exists at the time of such payment or would result therefrom.

(ii) Except for regularly scheduled payments of interest required pursuant to the 2020 Unsecured Indebtedness and the payment when due of the fees and expenses that are required to be paid in connection with the 2020 Unsecured Indebtedness, the Borrower will not purchase, redeem, retire or otherwise acquire for value, or set apart any money for a sinking, defeasance or other analogous fund for the purchase, redemption, retirement or other acquisition of or make any voluntary payment or prepayment of the principal of or interest

on, or any other amount owing in respect of the 2020 Unsecured Indebtedness unless (x) such purchase, redemption, retirement, acquisition, payment or prepayment is made with the proceeds of Unsecured Longer-Term Indebtedness permitted under Section 5.2(q)(iii), (y) on the date of such purchase, redemption, retirement, acquisition, payment or prepayment and immediately after giving effect thereto, (1) the Advances Outstanding do not exceed 90% of the Availability and (2) no Default or Event of Default shall have occurred and be continuing or would result therefrom or (z) the Borrower has received the prior written consent of the Administrative Agent.

(e) Section 9.2(a) of the Loan Agreement is hereby amended and restated to read as follows:

(a) Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent may, or, at the direction of the Required Lenders shall, by notice to the Borrower (it being agreed that the failure to give such notice shall not impair the rights of the Administrative Agent or the Lenders hereunder), declare (i) the Termination Date to have occurred and the Notes and all other Obligations to be immediately due and payable in full (without presentment, demand, protest or notice of any kind all of which are hereby waived by the Borrower) or (ii) the Revolving Period End Date to have occurred; provided that in the case of any event involving the Borrower described in Section 9.1(f), the Notes and all other Obligations shall be immediately due and payable in full (without presentment, demand, notice of any kind, all of which are hereby expressly, waived by the Borrower) and the Termination Date shall be deemed to have occurred automatically upon the occurrence of any such event. The Administrative Agent shall forward a copy of any notice delivered to the Borrower pursuant to this Section 9.2(a) to the Lenders.

2. Conditions. The effectiveness of this Amendment is subject to the satisfaction of the following conditions precedent:

(a) the execution and delivery of this Amendment by Borrower, Administrative Agent and Lenders;

(b) the representations and warranties of Borrower contained in Section 3 hereof shall be true and correct in all material respects on and as of the date hereof as though made on and as of the date hereof (other than any representation and warranty that is expressly made as of another specific date, which shall be true and correct in all material respects as of such date); and

(c) Administrative Agent shall have received payment in immediately available funds for the reasonable fees and expenses (as evidenced by an invoice received by Borrower prior to the date hereof) of its external legal counsel, Chapman and Cutler LLP, in connection with the preparation, negotiation, execution and delivery of this Amendment and other post-closing services rendered in connection with the Transaction Documents prior to the date hereof, in each case, to the extent required to be paid pursuant to Section 12.9 of the Loan Agreement, as amended hereby.

3. Representations and Warranties. Borrower hereby represents and warrants to Administrative Agent and each Lender as follows:

(a) the execution, delivery and performance by Borrower of this Amendment have been duly authorized by all necessary corporate action, and does not and will not:

(i) contravene the terms of any of Borrower’s Governing Documents;

(ii) conflict with, result in any material breach or contravention of, or result in the creation of any Lien under, any document evidencing any material Contractual Obligation of Borrower; or

(iii) violate any Applicable Law;

(b) Borrower has the necessary corporate power and authority to execute, deliver and perform its obligations under this Amendment and the Loan Agreement, as amended hereby;

(c) this Amendment constitutes the legal, valid and binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by Insolvency Laws and by general principles of equity (whether considered in a suit at law or in equity);

(d) immediately after giving effect to this Amendment and the transactions contemplated hereby, the representations and warranties of Borrower contained in Section 4.1 and Section 4.2 of the Loan Agreement, as amended hereby, shall be true and correct in all material respects on and as of the date hereof as though made on and as of the date hereof (other than any representation and warranty that is expressly made as of another specific date, which shall be true and correct in all material respects as of such date); and

(e) at the time of and immediately after giving effect to the transactions contemplated by this Amendment, no Event of Default or Default shall have occurred or be continuing.

4. No Modification. Except as expressly set forth herein, nothing contained herein shall be deemed to constitute a waiver of compliance with any term or condition contained in the Loan Agreement or any of the other Transaction Documents or constitute a course of conduct or dealing among the parties. Except as expressly stated herein, Administrative Agent and Lenders reserve all rights, privileges and remedies under the Transaction Documents. Except as amended or consented to hereby, the Loan Agreement and other Transaction Documents remain unmodified and in full force and effect. Upon effectiveness of this Amendment, all references in the Transaction Documents to the Loan Agreement shall be deemed to be references to the Loan Agreement as modified hereby. This Amendment shall constitute a Transaction Document.

5. Counterparts. This Amendment may be executed in any number of counterparts and by different parties in separate counterparts (including by facsimile), each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

6. Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

7. Governing Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

8. Severability. In case any provision in or obligation under this Amendment shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

9. Captions. The headings herein are for purposes of references only and shall not otherwise affect the meaning or interpretation of any provision hereof.

10. Reaffirmation. Borrower hereby (i) ratifies and reaffirms all of its payment and performance obligations, contingent or otherwise, under each of the Transaction Documents to which it is a party (after giving effect hereto) and (ii) to the extent Borrower granted liens on or security interests in any of its property pursuant to any such Transaction Document as security for the Obligations under or with respect to the Transaction Documents, ratifies and reaffirms such grant of security interests and liens and confirms and agrees that such security interests and liens hereafter secure all of the Obligations as amended hereby. Borrower hereby consents to this Amendment and acknowledges that each of the Transaction Documents remains in full force and effect and is hereby ratified and reaffirmed. The execution of this Amendment shall not operate as a waiver of any right, power or remedy of Administrative Agent or Lenders, constitute a waiver of any provision of any of the Transaction Documents or serve to effect a novation of the Obligations.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, each of the undersigned has executed this Amendment as of the date set forth above.


CRESCENT CAPITAL BDC, INC., as Borrower

By:		/s/ Jason Breaux
Name:		Jason Breaux
Title:		Chief Executive Officer

SIGNATURE PAGE

SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT


ALLY BANK, as Administrative Agent and as Lender

By:		/s/ Keith W. Harris
Name:		Keith W. Harris
Title:		Authorized Signatory

SIGNATURE PAGE

SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT

Exhibit 10.20

CRESCENT CAPITAL BDC, INC.

$50,000,000

5.95% Series 2020A Senior Notes due July 30, 2023

MASTER NOTE PURCHASE AGREEMENT

Dated July 30, 2020

TABLE OF CONTENTS


Section	Heading	Page

Section 1.	Authorization of Notes; Interest Rate		1

Section 1.1.	Authorization of Notes		1
Section 1.2.	[Reserved]		1
Section 1.3.	Changes in Interest Rate		1
Section 1.4.	Issue Discount		3

Section 2.	Sale and Purchase of Notes		3

Section 2.1.	Purchase and Sale of Series 2020A Notes		3
Section 2.2.	Additional Series of Notes		3

Section 3.	Closing		4

Section 4.	Conditions to Closing		5

Section 4.1.	Representations and Warranties		5
Section 4.2.	Performance; No Default		5
Section 4.3.	Compliance Certificates		5
Section 4.4.	Opinions of Counsel		5
Section 4.5.	Purchase Permitted by Applicable Law, Etc		5
Section 4.6.	Sale of Other Notes		6
Section 4.7.	Payment of Special Counsel Fees		6
Section 4.8.	Private Placement Number		6
Section 4.9.	Changes in Corporate Structure		6
Section 4.10.	Funding Instructions		6
Section 4.11.	Rating		6
Section 4.12.	Second Closing		6
Section 4.13.	[Reserved]		6
Section 4.14.	Asset Coverage Test		6
Section 4.15.	Compliance with All Outstanding Debt Obligations		6
Section 4.16.	Proceedings and Documents		7
Section 4.17.	Conditions to Issuance of Additional Notes		7

Section 5.	Representations and Warranties of the Company		7

Section 5.1.	Organization; Power and Authority		7
Section 5.2.	Authorization, Etc		8
Section 5.3.	Disclosure		8
Section 5.4.	Organization and Ownership of Shares of Subsidiaries; Affiliates		8
Section 5.5.	Financial Statements; Material Liabilities		9
Section 5.6.	Compliance with Laws, Other Instruments, Etc		9
Section 5.7.	Governmental Authorizations, Etc		10
Section 5.8.	Litigation; Observance of Agreements, Statutes and Orders		10


Section 5.9.	Taxes	10
Section 5.10.	Title to Property; Leases	10
Section 5.11.	Licenses, Permits, Etc	11
Section 5.12.	Compliance with Employee Benefit Plans	11
Section 5.13.	Private Offering by the Company	12
Section 5.14.	Use of Proceeds; Margin Regulations	12
Section 5.15.	Existing Indebtedness; Future Liens	12
Section 5.16.	Foreign Assets Control Regulations, Etc	13
Section 5.17.	Status under Certain Statutes	14
Section 5.18.	Environmental Matters	14
Section 5.19.	Investment Company Act	14

Section 6.	Representations of the Purchasers	15

Section 6.1.	Purchase for Investment	15
Section 6.2.	Source of Funds	15
Section 6.3.	Investment Experience; Access to Information	17
Section 6.4.	Authorization	18

Section 7.	Information as to Company	18

Section 7.1.	Financial and Business Information	18
Section 7.2.	Officer’s Certificate	21
Section 7.3.	Visitation	21
Section 7.4.	Electronic Delivery	22
Section 7.5.	Limitation on Competitors	23

Section 8.	Payment and Prepayment of the Notes	23

Section 8.1.	Maturity	23
Section 8.2.	Optional Prepayments	23
Section 8.3.	Allocation of Partial Prepayments	23
Section 8.4.	Maturity; Surrender, Etc	24
Section 8.5.	Purchase of Notes	24
Section 8.6.	Make-Whole Amount	24
Section 8.7.	Payments Due on Non-Business Days	26
Section 8.8.	Change in Control	26

Section 9.	Affirmative Covenants	27

Section 9.1.	Compliance with Laws	27
Section 9.2.	Insurance	27
Section 9.3.	Maintenance of Properties	27
Section 9.4.	Payment of Taxes and Claims	28
Section 9.5.	Corporate Existence, Etc	28
Section 9.6.	Books and Records	28


Section 9.7.	Subsidiary Guarantors	28
Section 9.8.	Status of RIC and BDC	30
Section 9.9.	Investment Policies	30
Section 9.10.	Rating Confirmation	30

Section 10.	Negative Covenants	30

Section 10.1.	Transactions with Affiliates	30
Section 10.2.	Merger, Consolidation, Etc	32
Section 10.3.	Line of Business	33
Section 10.4.	Economic Sanctions, Etc	33
Section 10.5.	Liens	33
Section 10.6.	[Reserved]	35
Section 10.7.	[Reserved]	35
Section 10.8.	Financial Covenants	35
Section 10.9.	Most Favored Lender	35

Section 11.	Events of Default	36

Section 12.	Remedies on Default, Etc	40

Section 12.1.	Acceleration	40
Section 12.2.	Other Remedies	40
Section 12.3.	Rescission	40
Section 12.4.	No Waivers or Election of Remedies, Expenses, Etc	41

Section 13.	Registration; Exchange; Substitution of Notes	41

Section 13.1.	Registration of Notes	41
Section 13.2.	Transfer and Exchange of Notes	41
Section 13.3.	Replacement of Notes	42

Section 14.	Payments on Notes	43

Section 14.1.	Place of Payment	43
Section 14.2.	Payment by Wire Transfer	43
Section 14.3.	Tax Information	44

Section 15.	Expenses, Etc	44

Section 15.1.	Transaction Expenses	44
Section 15.2.	Certain Taxes	45
Section 15.3.	Survival	45

Section 16.	Survival of Representations and Warranties; Entire Agreement	45

Section 17.	Amendment and Waiver	46

iii


Section 17.1.	Requirements	46
Section 17.2.	Solicitation of Holders of Notes	46
Section 17.3.	Binding Effect, Etc	47
Section 17.4.	Notes Held by Company, Etc	47

Section 18.	Notices	48

Section 19.	Reproduction of Documents	48

Section 20.	Confidential Information	49

Section 21.	Substitution of Purchaser	50

Section 22.	Miscellaneous	50

Section 22.1.	Successors and Assigns	50
Section 22.2.	Accounting Terms	51
Section 22.3.	Severability	51
Section 22.4.	Construction, Etc	51
Section 22.5.	Counterparts; Electronic Contracting	52
Section 22.6.	Governing Law	52
Section 22.7.	Jurisdiction and Process; Waiver of Jury Trial	52

Signature		54



Schedule A	—	Defined Terms

Schedule 1	—	Form of 5.95% Series 2020A Senior Notes due July 30, 2023

Schedule 4.4(a)	—	Form of Opinion of Special Counsel for the Company

Schedule 4.4(b)	—	Form of Opinion of Special Counsel for the Purchasers

Schedule 5.3	—	Disclosure Materials

Schedule 5.4	—	Subsidiaries of the Company and Ownership of Subsidiary Stock

Schedule 5.5	—	Financial Statements

Schedule 5.15	—	Existing Indebtedness

Schedule 7.5	—	Non Competitors

Schedule 14.3	—	Form of Tax Compliance Certificate

Exhibit S	—	Form of Supplement to Note Purchase Agreement

PURCHASER SCHEDULE	—	Information Relating to Purchasers

CRESCENT CAPITAL BDC, INC.

11100 Santa Monica Blvd., Suite 2000,

Los Angeles, CA 90025

5.95% Series 2020A Senior Notes due July 30, 2023

July 30, 2020

TO EACH OF THE PURCHASERS LISTED IN THE PURCHASER SCHEDULE HERETO:

Ladies and Gentlemen:

CRESCENT CAPITAL BDC, INC., a Maryland corporation (the “Company”), agrees with each of the Purchasers as follows:

SECTION 1.

AUTHORIZATION OF NOTES; INTEREST RATE.

Section 1.1. Authorization of Notes. The Company will authorize the issue and sale of $50,000,000 aggregate principal amount of its 5.95% Series 2020A Senior Notes due July 30, 2023 (the “Series 2020A Notes”; such term shall also include any such notes as amended, restated or otherwise modified from time to time pursuant to Section 17 and including any such notes issued in substitution therefor pursuant to Section 13). The Series 2020A Notes shall be substantially in the form set out in Schedule 1. Certain capitalized and other terms used in this Agreement are defined in Schedule A and, for purposes of this Agreement, the rules of construction set forth in Section 22.4 shall govern.

The Series 2020A Notes, together with each Series of Additional Notes which may from time to time be issued pursuant to the provisions of Section 2.2, are collectively referred to as the “Notes” (such term shall also include any such notes as amended, restated or otherwise modified from time to time pursuant to Section 17 and including any such notes issued in substitution therefor pursuant to Section 13).

Section 1.2. [Reserved] .

Section 1.3. Changes in Interest Rate. (a) If at any time a Below Investment Grade Event occurs, then:

(i) as of the date of the occurrence of the Below Investment Grade Event to and until the date on which such Below Investment Grade Event is no longer continuing (as evidenced by the receipt and delivery to the holders of the Notes of any Rating necessary to cure such Below Investment Grade Event), the Notes shall bear interest at the Adjusted Interest Rate; and

(ii) the Company shall promptly, and in any event within twenty (20) Business Days after a Below Investment Grade Event has occurred, notify the holders of the Notes in writing, sent in the manner provided in Section 18, that a Below Investment Grade Event has occurred, which written notice shall be accompanied by evidence satisfactory to the Required Holders to such effect and confirming the effective date of the Below Investment Grade Event and that the Adjusted Interest Rate will be payable in respect of the Notes in consequence thereof.

(b) Each holder of a Note shall, at the Company’s expense, use reasonable efforts to cooperate with any reasonable request made by the Company in connection with any rating appeal or application.

(c) The fees and expenses of any NRSRO and all other costs incurred in connection with obtaining, affirming or appealing a Rating pursuant to this Section 1.3 shall be borne solely by the Company.

(d) As used herein, “Adjusted Interest Rate” means the interest rate on the Notes shall be the rate per annum which is 1.00% above the stated rate of the Notes.

(e) As used herein, a “Below Investment Grade Event” shall occur if

(i) at any time the Company has obtained a Rating of the Notes from only one NRSRO, the then most recent Rating from such NRSRO that is in full force and effect (not having been withdrawn) is less than Investment Grade; or

(ii) at any time the Company has obtained a Rating of the Notes from two NRSROs, the then lower of the most recent Ratings from the NRSROs that are in full force and effect (not having been withdrawn) is less than Investment Grade; or

(iii) at any time the Company has obtained a Rating of the Notes from three or more NRSROs, the then second lowest of the most recent Ratings from the NRSROs that is in full force and effect (not having been withdrawn) is less than Investment Grade (provided, for the avoidance of doubt, if two or more of the most recent Ratings are equal or equivalent as the lowest such Rating, then one of such equal or equivalent Ratings will be deemed to be the second lowest Rating for purposes of such determination); or

(iv) at any time the Company shall have failed to receive and deliver to the holders of the Notes a Rating of the Notes from at least one NRSRO as required pursuant to Section 9.8(b).

(f) Following the occurrence of an Event of Default, the Notes shall bear interest at the Default Rate.

-2-

Section 1.4. Issue Discount. The Company and the Purchasers agree that for purposes of Section 1273(b) of the Code and Treasury Reg. Section 1.1275-3(b) the aggregate issue price of the Series 2020A Notes is $49,595,000 or approximately $991.90 per $1,000 principal amount of the Series 2020A Notes for purposes of Section 1273 of the Code, the Series 2020A Notes have aggregate original issue discount of $405,000 or approximately $8.10 per $1,000 principal amount, the issue date of the Series 2020A Notes is July 30, 2020; and the yield to maturity of the Series 2020A Notes for purposes of Treasury Reg. Section 1.1272-1(b) is approximately 6.25%. The issue prices and values set forth above shall be the issue prices and values ascribed to the Notes by the Company and the Purchasers and any subsequent holder of the Notes for all purposes, including the preparation of tax returns and the preparation of the Company’s financial statements.

SECTION 2.

SALE AND PURCHASE OF NOTES.

Section 2.1. Purchase and Sale of Series 2020A Notes. Subject to the terms and conditions of this Agreement, the Company will issue and sell to each Purchaser and each Purchaser will purchase from the Company, at such Closing provided for in Section 3, Series 2020A Notes in the principal amount and tranche specified opposite such Purchaser’s name in the Purchaser Schedule at the purchase price of 99.19% of the principal amount thereof. The Purchasers’ obligations hereunder are several and not joint obligations and no Purchaser shall have any liability to any Person for the performance or non-performance of any obligation by any other Purchaser hereunder.

Section 2.2. Additional Series of Notes. The Company may, from time to time, in its sole discretion but subject to the terms hereof, issue and sell one or more additional Series of its promissory notes under the provisions of this Agreement pursuant to a supplement (a “Supplement”) substantially in the form of Exhibit S. Each additional Series of Notes (the “Additional Notes”) issued pursuant to a Supplement shall be subject to the following terms and conditions:

(i) each Series of Additional Notes, when so issued, shall be differentiated from all previous Series by sequential designation inscribed thereon (provided however, Additional Notes may have the same Private Placement Number as the Series 2020A Notes so long as such Additional Notes have the same interest rate and tenor as and for U.S. federal income tax purposes are fungible with the Series 2020A Notes);

(ii) Additional Notes of the same Series may consist of more than one different and separate tranches and may differ with respect to outstanding principal amounts, maturity dates, interest rates and premiums, if any, and price and terms of redemption or payment prior to maturity, but all such different and separate tranches of the same Series shall vote as a single class and constitute one Series;

(iii) each Series of Additional Notes shall be dated the date of issue, bear interest at such rate or rates, mature on such date or dates, be subject to such mandatory and optional prepayment on the dates and at the premiums, if any, have such additional or different conditions precedent to closing, such representations and warranties and such additional covenants as shall be specified in the Supplement under which such Additional Notes are issued and upon execution of any such Supplement, this Agreement shall be amended (a) to reflect such additional covenants without further action on the part of the holders of the Notes outstanding under this Agreement, provided, that any such additional covenants shall inure to the benefit of all holders of Notes so long as any Additional Notes issued pursuant to such Supplement remain outstanding, and (b) to reflect such representations and warranties as are contained in such Supplement for the benefit of the holders of such Additional Notes in accordance with the provisions of Section 16;

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(iv) each Series of Additional Notes issued under this Agreement shall be in substantially the form of Exhibit 1 to Exhibit S hereto with such variations, omissions and insertions as are necessary or permitted hereunder;

(v) the minimum principal amount of any Note issued under a Supplement shall be $100,000, except as may be necessary to evidence the outstanding amount of any Note originally issued in a denomination of $100,000 or more;

(vi) all Additional Notes shall rank pari passu with all other outstanding Notes; and

(vii) no Additional Notes shall be issued hereunder if at the time of issuance thereof and after giving effect to the application of the proceeds thereof, any Default or Event of Default shall have occurred and be continuing.

SECTION 3.

CLOSING.

The sale and purchase of the Series 2020A Notes to be purchased by each Purchaser shall occur at the offices of Chapman and Cutler LLP, 111 West Monroe Street, Chicago, Illinois 60603, at 9:00 A.M. Chicago time, at not more than two closings (each individually a “Closing” and, collectively, the “Closings”). The first Closing shall be held on July 30, 2020 (the “First Closing Date”); provided, however, that the First Closing Date may be moved to such other Business Day thereafter as may be agreed upon by the Company and the Purchasers. The second Closing shall be held on such Business Day as the Company shall designate (the “Second Closing Date”) by notice to each Purchaser at least ten days prior to the Second Closing Date; provided, however, that the Second Closing Date may not be later than October 28, 2020 unless agreed upon by the Company and the Purchasers (each of the First Closing Date and the Second Closing Date being a “Closing Date”). At each Closing the Company will deliver to each Purchaser the Series 2020A Notes to be purchased by such Purchaser in the form of a single Series 2020A Note for all such Series 2020A Notes to be purchased by such Purchaser (or, in each case, such greater number of Notes in denominations of at least $100,000 as such Purchaser may request) dated the date of such Closing and registered in such Purchaser’s name (or in the name of its nominee), against delivery by such Purchaser to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Company pursuant to the applicable funding instructions in Section 4.10. If at such Closing the Company shall fail to tender such Series 2020A Notes to any Purchaser as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to such Purchaser’s satisfaction, such Purchaser shall, at its election, be relieved of all further obligations under this Agreement, without thereby waiving any rights such Purchaser may have by reason of such failure by the Company to tender such Series 2020A Notes or any of the conditions specified in Section 4 not having been fulfilled to such Purchaser’s satisfaction.

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SECTION 4. CONDITIONS TO CLOSING.

Each Purchaser’s obligation to purchase and pay for the Notes to be sold to such Purchaser at the applicable Closing is subject to the fulfillment to such Purchaser’s satisfaction, prior to or at such Closing, of the following conditions:

Section 4.1. Representations and Warranties. The representations and warranties of the Company in this Agreement shall be correct when made and at such Closing.

Section 4.2. Performance; No Default. The Company shall have performed and complied with all agreements and conditions contained in this Agreement required to be performed or complied with by it prior to or at such Closing. Before and after giving effect to the issue and sale of the Notes (and the application of the proceeds thereof as contemplated by Section 5.14) at such Closing, no Default or Event of Default shall have occurred and be continuing. Neither the Company nor any Subsidiary shall have entered into any transaction since June 17, 2020 that would have been prohibited by Section 10 had such Section applied since such date.

Section 4.3. Compliance Certificates.

(a) Officer’s Certificate. The Company shall have delivered to such Purchaser an Officer’s Certificate, dated the date of such Closing, certifying that the conditions specified in Sections 4.1, 4.2, 4.9 and 4.14 have been fulfilled.

(b) Secretary’s Certificate. The Company shall have delivered to such Purchaser a certificate of its Secretary or Assistant Secretary, dated the date of such Closing, certifying as to (i) the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of the Notes and this Agreement and (ii) the Company’s organizational documents as then in effect.

Section 4.4. Opinions of Counsel. Such Purchaser shall have received opinions in form and substance satisfactory to such Purchaser, dated the date of such Closing (a) Kirkland & Ellis LLP, counsel for the Company and Venable LLP, special Maryland counsel for the Company, substantially in the forms set forth in Schedule 4.4(a)(i) and Schedule 4.4(a)(ii) hereto and (b) from Chapman and Cutler LLP, the Purchasers’ special counsel in connection with such transactions, substantially in the form set forth in Schedule 4.4(b) and covering such other matters incident to such transactions as such Purchaser may reasonably request.

Section 4.5. Purchase Permitted by Applicable Law, Etc. On the date of such Closing such Purchaser’s purchase of Notes shall (a) be permitted by the laws and regulations of each jurisdiction to which such Purchaser is subject, without recourse to provisions (such as section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (b) not violate any applicable law or regulation (including Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) not subject such Purchaser to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date hereof. If requested by such Purchaser, such Purchaser shall have received an Officer’s Certificate certifying as to such matters of fact as such Purchaser may reasonably specify to enable such Purchaser to determine whether such purchase is so permitted.

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Section 4.6. Sale of Other Notes. Contemporaneously with such Closing the Company shall sell to each other Purchaser and each other Purchaser shall purchase the Notes to be purchased by it at such Closing as specified in the Purchaser Schedule.

Section 4.7. Payment of Special Counsel Fees. Without limiting Section 15.1, the Company shall have paid on or before such Closing the reasonable and documented out-of-pocket fees, charges and disbursements of the Purchasers’ special counsel referred to in Section 4.4 to the extent reflected in a statement of such counsel rendered to the Company at least two Business Days prior to such Closing.

Section 4.8. Private Placement Number. A Private Placement Number issued by Standard & Poor’s CUSIP Service Bureau (in cooperation with the SVO) shall have been obtained for each tranche of the Notes.

Section 4.9. Changes in Corporate Structure. The Company shall not have changed its jurisdiction of incorporation or organization, as applicable, or been a party to any merger or consolidation or succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the most recent financial statements referred to in Schedule 5.5.

Section 4.10. Funding Instructions. At least three Business Days prior to the date of such Closing, each Purchaser shall have received written instructions signed by a Responsible Officer on letterhead of the Company specifying (i) the name and address of the transferee bank, (ii) such transferee bank’s ABA number and (iii) the account name and number into which the purchase price for the Notes is to be deposited.

Section 4.11. Rating. The Notes shall have received a Rating of “BBB-” or better by KBRA.

Section 4.12. Second Closing. In the case of the second Closing, the transactions contemplated herein with respect to the first Closing shall have been consummated in accordance with the terms and provisions hereof, except to the extent of any failure of such transactions so to have been consummated that was caused by any failure of any Purchaser to perform its obligations hereunder.

Section 4.13. [Reserved].

Section 4.14. Asset Coverage Test. After giving effect to each issuance of the Notes, the Asset Coverage Ratio shall not be less than 1.50.

Section 4.15. Compliance with All Outstanding Debt Obligations. The Company shall have performed and complied with the terms and conditions of its outstanding debt obligations, including the Ally Loan Agreement, and no event of default has occurred and is currently occurring as of such Closing Date with respect to the Ally Loan Agreement.

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Section 4.16. Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be reasonably satisfactory to such Purchaser, and such Purchaser shall have received all such counterpart originals or certified or other copies of such documents as such Purchaser may reasonably request.

Section 4.17. Conditions to Issuance of Additional Notes. The obligations of the Additional Purchasers to purchase any Additional Notes shall be subject to the following conditions precedent, in addition to any conditions specified in the Supplement pursuant to which such Additional Notes may be issued:

(a) Compliance Certificate. A duly authorized Financial Officer shall execute and deliver to each Additional Purchaser and each holder of Notes an Officer’s Certificate dated the date of issue of such Series of Additional Notes stating that such officer has reviewed the provisions of this Agreement (including any Supplements hereto) and setting forth the information and computations (in sufficient detail) required in order to establish whether the Company is in compliance with the requirements of Section 10.8 on such date (based upon the financial statements for the most recent fiscal quarter ended prior to the date of such certificate but after giving effect to the issuance of the Additional Series of Notes and the application of the proceeds thereof).

(b) Execution and Delivery of Supplement. The Company and each such Additional Purchaser shall execute and deliver a Supplement substantially in the form of Exhibit S hereto.

(c) Representations of Additional Purchasers. Each Additional Purchaser shall have confirmed in the Supplement that the representations set forth in Section 6 are true with respect to such Additional Purchaser on and as of the date of issue of the Additional Notes.

(d) Execution and Delivery of Guaranty Ratification. Each Subsidiary Guarantor, if any, shall execute and deliver a ratification of its Subsidiary Guarantee.

SECTION 5.

REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to each Purchaser as of the date of each Closing (or, if any such representations and warranties expressly relate to an earlier date, than as of such earlier date), that:

Section 5.1. Organization; Power and Authority. The Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has the corporate power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement and the Notes and to perform the provisions hereof and thereof.

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Section 5.2. Authorization, Etc. This Agreement and the Notes have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement constitutes, and upon execution and delivery thereof each Note will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

Section 5.3. Disclosure.

(a) This Agreement, the financial statements listed in Schedule 5.5 and the documents, certificates or other writings delivered to the Purchasers by or on behalf of the Company prior to June 17, 2020 in connection with the transactions contemplated hereby and identified in Schedule 5.3 (this Agreement and such documents, certificates or other writings and such financial statements delivered to each Purchaser being referred to, collectively, as the “Disclosure Documents”), taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made. Except as disclosed in the Disclosure Documents, since December 31, 2019, there has been no change in the financial condition, operations, business or properties of the Company or any Subsidiary except changes that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. There is no fact known to the Company that would reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in the Disclosure Documents.

(b) All financial projections, pro forma financial information and other forward-looking information which has been delivered to each Purchaser by or on behalf of the Company in connection with the transactions contemplated by this Agreement are based upon good faith assumptions and, in the case of financial projections and pro forma financial information, good faith estimates, in each case, believed to be reasonable at the time made, it being recognized that (i) such financial information as it relates to future events is subject to significant uncertainty and contingencies (many of which are beyond the control of the Company) and are therefore not to be viewed as fact, and (ii) actual results during the period or periods covered by such financial information may materially differ from the results set forth therein.

Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates. (a) Schedule 5.4 contains (except as noted therein) complete and correct lists, as of the First Closing Date, of (i) the Company’s Subsidiaries, showing, as to each Subsidiary, the name thereof, the jurisdiction of its organization, the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each other Subsidiary and whether such Subsidiary is a Subsidiary Guarantor and (ii) the Company’s directors and executive officers.

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(b) All of the outstanding shares of capital stock or similar equity interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company and its Subsidiaries have been validly issued, and, to the extent applicable, are fully paid and non-assessable and are owned by the Company or another Subsidiary free and clear of any Lien that is prohibited by this Agreement.

(c) Each Subsidiary is a corporation or other legal entity duly organized, validly existing and, where applicable, in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and, where applicable, is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each such Subsidiary has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact, except where the failure to do so would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(d) No Subsidiary is subject to any legal, regulatory, contractual or other restriction (other than the agreements listed on Schedule 5.4 and customary limitations imposed by corporate law or similar statutes) restricting the ability of such Subsidiary to pay dividends out of profits or make any other similar distributions of profits to the Company or any of its Subsidiaries that owns outstanding shares of capital stock or similar equity interests of such Subsidiary.

Section 5.5. Financial Statements; Material Liabilities. The Company has delivered to each Purchaser copies of the financial statements of the Company and its Subsidiaries listed on Schedule 5.5. All of such financial statements (including in each case the related schedules and notes, but excluding all financial projections, pro forma financial information and other forward-looking information) fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as of the respective dates specified in such Schedule and the consolidated results of their operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year-end adjustments and lack of footnotes). The Company and its Subsidiaries do not have any Material liabilities that are not disclosed in the Disclosure Documents.

Section 5.6. Compliance with Laws, Other Instruments, Etc. The execution, delivery and performance by the Company of this Agreement and the Notes will not (i) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of the Company or any Subsidiary under, any (A) indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, or any other agreement or instrument to which the Company or any Subsidiary is bound or by which the Company or any Subsidiary or any of their respective properties may be bound or affected or (B) the corporate charter or by-laws of the Company, (ii) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority applicable to the Company or any Subsidiary or (iii) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company or any Subsidiary, in each case, except where any of the foregoing (other than clause (i)(B) above), individually or in the aggregate, would not reasonably be expected to result in an Material Adverse Effect.

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Section 5.7. Governmental Authorizations, Etc. Assuming the accuracy of the representations and warranties of each of the Purchasers of the Notes, no consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by the Company of this Agreement or the Notes, other than any filing required under the Exchange Act or the rules and regulations promulgated thereunder on Form 8-K, Form 10-Q and Form 10-K.

Section 5.8. Litigation; Observance of Agreements, Statutes and Orders. (a) There are no actions, suits, investigations or proceedings pending or, to the knowledge of the Company, threatened against or affecting the Company or any Subsidiary or any property of the Company or any Subsidiary in any court or before any arbitrator of any kind or before or by any Governmental Authority that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b) Neither the Company nor any Subsidiary is (i) in default under any agreement or instrument to which it is a party or by which it is bound, (ii) in violation of any order, judgment, decree or ruling of any court, any arbitrator of any kind or any Governmental Authority or (iii) in violation of any applicable law, ordinance, rule or regulation of any Governmental Authority (including Environmental Laws, the USA PATRIOT Act or any of the other laws and regulations that are referred to in Section 5.16), which default or violation would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 5.9. Taxes. The Company and its Subsidiaries have filed all material tax returns that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments levied upon them or their properties, assets, income or franchises, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (i) the amount of which, individually or in the aggregate, is not Material or (ii) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which the Company or a Subsidiary, as the case may be, has established adequate reserves in accordance with GAAP. The Company knows of no basis for any other tax or assessment that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The charges, accruals and reserves on the books of the Company and its Subsidiaries in respect of U.S. federal, state or other taxes for all fiscal periods are adequate in all material respects.

Section 5.10. Title to Property; Leases. The Company and its Subsidiaries have good and sufficient title to their respective properties that individually or in the aggregate are Material, including all such properties reflected in the most recent audited balance sheet referred to in Section 5.5 or purported to have been acquired by the Company or any Subsidiary after such date (except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens prohibited by this Agreement. All leases that individually or in the aggregate are Material are valid and subsisting and are in full force and effect in all material respects.

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Section 5.11. Licenses, Permits, Etc. (a) The Company and its Subsidiaries own or possess all licenses, permits, franchises, authorizations, patents, copyrights, proprietary software, service marks, trademarks and trade names, or rights thereto, that individually or in the aggregate are Material, without known conflict with the rights of others, except for any such conflicts that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

(b) To the knowledge of the Company, no product or service of the Company or any of its Subsidiaries infringes in any material respect any license, permit, franchise, authorization, patent, copyright, proprietary software, service mark, trademark, trade name or other right owned by any other Person, except for any such infringements that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

(c) To the knowledge of the Company, there is no Material violation by any Person of any right of the Company or any of its Subsidiaries with respect to any license, permit, franchise, authorization, patent, copyright, proprietary software, service mark, trademark, trade name or other right owned or used by the Company or any of its Subsidiaries.

Section 5.12. Compliance with Employee Benefit Plans. (a) The Company and each ERISA Affiliate have operated and administered each Plan (other than a Multiemployer Plan) in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. Except as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect: (i) neither the Company nor any ERISA Affiliate has incurred any liability pursuant to Title IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA); and (ii) no event, transaction or condition has occurred or exists that would, individually or in the aggregate, reasonably be expected to result in the incurrence of any such liability by the Company or any ERISA Affiliate or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to section 430(k) of the Code or to any such penalty or excise tax provisions under the Code or federal law or section 4068 of ERISA or by the granting of a security interest in connection with the amendment of a Plan.

(b) The present value of the aggregate benefit liabilities under each of the Plans (other than Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent actuarial valuation report, did not exceed the aggregate current value of the assets of such Plan allocable to such benefit liabilities by more than an amount which would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. The term “benefit liabilities” has the meaning specified in section 4001 of ERISA and the terms “current value” and “present value” have the meaning specified in section 3 of ERISA.

(c) The Company and its ERISA Affiliates have not incurred withdrawal liabilities (and are not subject to contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer Plans that would, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

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(d) The expected postretirement benefit obligation (determined as of the last day of the Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 715-60, without regard to liabilities attributable to continuation coverage mandated by section 4980B of the Code) of the Company and its Subsidiaries is not Material.

(e) The execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions of section 406 of ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation by the Company to each Purchaser in the first sentence of this Section 5.12(e) is made in reliance upon and subject to the accuracy of such Purchaser’s representation in Section 6.2 as to the sources of the funds to be used to pay the purchase price of the Notes to be purchased by such Purchaser.

(f) The Company and its Subsidiaries do not have, and have not had, any Non-U.S. Plans.

Section 5.13. Private Offering by the Company. Neither the Company nor anyone acting on its behalf has offered, within six months prior to the date of this Agreement, the Notes or any substantially similar debt Securities for sale to, or solicited any offer to buy the Notes or any substantially similar debt Securities from, or otherwise approached or negotiated in respect thereof with, any Person other than the Purchasers and not more than five other Institutional Investors, each of which has been offered the Notes at a private sale for investment. Neither the Company nor anyone acting on its behalf has taken, or will take, any action that would subject the issuance or sale of the Notes to the registration requirements of section 5 of the Securities Act or to the registration requirements of any Securities or blue sky laws of any applicable jurisdiction.

Section 5.14. Use of Proceeds; Margin Regulations. The Company will apply the proceeds of the sale of the Notes hereunder to repay outstanding indebtedness and for other general corporate purposes. No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any Securities under such circumstances as to involve the Company in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220). Margin stock does not constitute more than 5% of the value of the consolidated assets of the Company and its Subsidiaries and the Company does not have any present intention that margin stock will constitute more than 5% of the value of such assets. As used in this Section, the terms “margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them in said Regulation U.

Section 5.15. Existing Indebtedness; Future Liens. (a) Except as described therein, Schedule 5.15 sets forth a complete and correct list of all outstanding Indebtedness of the Company and its Subsidiaries as of June 30, 2020, since which date there has been no Material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Indebtedness of the Company or its Subsidiaries. As of June 30, 2020, neither the Company nor any Subsidiary is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of the Company or such Subsidiary and, to the knowledge of the Company, no event or condition exists with respect to any Indebtedness of the Company or any Subsidiary that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment.

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(b) Except as disclosed in Schedule 5.15 (as may be updated by the Company prior to the Second Closing Date), neither the Company nor any Subsidiary has agreed or consented to cause or permit any of its property, whether now owned or hereafter acquired, to be subject to a Lien that secures Indebtedness or to cause or permit in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien that secures Indebtedness.

(c) Neither the Company nor any Subsidiary is a party to, or otherwise subject to any provision contained in, any instrument evidencing Indebtedness of the Company or such Subsidiary, any agreement relating thereto or any other agreement (including its charter or any other organizational document) which limits the amount of, or otherwise imposes restrictions on the incurring of, Indebtedness of the Company, except as disclosed in Schedule 5.15 (as may be updated by the Company prior to the Second Closing Date).

Section 5.16. Foreign Assets Control Regulations, Etc. (a) Neither the Company nor any Controlled Entity (i) is a Blocked Person or Canada Blocked Person, (ii) has been notified that its name appears or may in the future appear on a State Sanctions List or (iii) is a target of sanctions that have been imposed by the United Nations or the European Union.

(b) Neither the Company nor any Controlled Entity (i) has violated, been found in violation of, or been charged or convicted under, any applicable U.S. Economic Sanctions Laws, any Canadian Economic Sanctions Laws, Anti-Money Laundering Laws or Anti-Corruption Laws or (ii) to the Company’s knowledge, is under investigation by any Governmental Authority for possible violation of any U.S. Economic Sanctions Laws, any Canadian Economic Sanctions Laws, Anti-Money Laundering Laws or Anti-Corruption Laws.

(i) constitutes or will constitute funds obtained on behalf of any Blocked Person or Canada Blocked Person or will otherwise be used by the Company or any Controlled Entity, directly or indirectly, (A) in connection with any investment in, or any transactions or dealings with, any Blocked Person or Canada Blocked Person, (B) for any purpose that would cause any Purchaser to be in violation of any U.S. Economic Sanctions Laws or any Canadian Economic Sanctions Laws or (C) otherwise in violation of any U.S. Economic Sanctions Laws or any Canadian Economic Sanctions Laws;

(ii) will be used, directly or indirectly, in violation of, or cause any Purchaser to be in violation of, any applicable Anti-Money Laundering Laws; or

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(iii) will be used, directly or indirectly, for the purpose of making any improper payments, including bribes, to any Governmental Official or commercial counterparty in order to obtain, retain or direct business or obtain any improper advantage, in each case which would be in violation of, or cause any Purchaser to be in violation of, any applicable Anti-Corruption Laws.

(d) The Company has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that the Company and each Controlled Entity is and will continue to be in compliance with all applicable U.S. Economic Sanctions Laws, Canadian Economic Sanctions Laws, Anti-Money Laundering Laws and Anti-Corruption Laws.

Section 5.17. Status under Certain Statutes. Neither the Company nor any Subsidiary is subject to regulation under the Public Utility Holding Company Act of 2005, the ICC Termination Act of 1995, or the Federal Power Act.

Section 5.18. Environmental Matters. (a) Neither the Company nor any Subsidiary has received any written notice of any claim and no proceeding has been instituted asserting any claim against the Company or any of its Subsidiaries or any of their respective real properties now or formerly owned, leased or operated by any of them, alleging any damage to the environment or violation of any Environmental Laws, except, in each case, such as would not reasonably be expected to result in a Material Adverse Effect.

(b) Neither the Company nor any Subsidiary has knowledge of any facts which would reasonably be expected to give rise to any claim, public or private, of violation of Environmental Laws by the Company or any Subsidiary, except, in each case, such as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

(c) Neither the Company nor any Subsidiary has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any of them in a manner which is contrary to any Environmental Law that could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

(d) Neither the Company nor any Subsidiary has disposed of any Hazardous Materials in a manner which would reasonably be expected to give rise to liability under any Environmental Law that would, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

Section 5.19. Investment Company Act.

(a) Status as Business Development Company. The Company has elected to be regulated as a “business development company” within the meaning of the Investment Company Act and has elected to be treated, and qualifies as, a RIC under Subchapter M of the Code.

(b) Compliance with Investment Company Act. The business and other activities of the Company and its Subsidiaries, including the issuance of the Notes hereunder, the application of the proceeds and repayment thereof by the Company and the consummation of the transactions contemplated by this Agreement do not result in a violation or breach in any material respect of the provisions of the Investment Company Act or any rules, regulations or orders issued by the SEC thereunder, in each case that are applicable to the Company and its Subsidiaries.

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(c) Investment Policies. The Company is in compliance in all respects with the Investment Policies, except to the extent that the failure to so comply could not reasonably be expected to have a Material Adverse Effect.

SECTION 6.

REPRESENTATIONS OF THE PURCHASERS.

Section 6.1. Purchase for Investment.

(a) Each Purchaser severally represents that it is purchasing the Notes for its own account or for one or more separate accounts maintained by such Purchaser or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of such Purchaser’s or their property shall at all times be within such Purchaser’s or their control. Each Purchaser understands that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes.

(b) Each Purchaser severally understands and agrees that it will not transfer the Notes or any part or portion thereof held by it (i) to any Person who is not an Institutional Investor or who is a Competitor or (ii) in violation of applicable law.

Section 6.2. Source of Funds. Each Purchaser severally represents that at least one of the following statements is an accurate representation as to each source of funds (a “Source”) to be used by such Purchaser to pay the purchase price of the Notes to be purchased by such Purchaser hereunder:

(a) the Source is an “insurance company general account” (as the term is defined in the United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the NAIC (the “NAIC Annual Statement”)) for the general account contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with such Purchaser’s state of domicile; or

(b) the Source is a separate account that is maintained solely in connection with such Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or

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(c) the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90-1 or (ii) a bank collective investment fund, within the meaning of the PTE 91-38 and, except as disclosed by such Purchaser to the Company in writing pursuant to this clause (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or

(d) the Source constitutes assets of an “investment fund” (within the meaning of Part VI of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM Exemption), no employee benefit plan’s assets that are managed by the QPAM in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, represent more than 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM maintains an ownership interest in the Company that would cause the QPAM and the Company to be “related” within the meaning of Part VI(h) of the QPAM Exemption and (i) the identity of such QPAM and (ii) the names of any employee benefit plans whose assets in the investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization, represent 10% or more of the assets of such investment fund, have been disclosed to the Company in writing pursuant to this clause (d);or

(e) the Source constitutes assets of a “plan(s)” (within the meaning of Part IV(h) of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM” (within the meaning of Part IV(a) of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or controlled by the INHAM (applying the definition of “control” in Part IV(d)(3) of the INHAM Exemption) owns a 10% or more interest in the Company and (i) the identity of such INHAM and (ii) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Company in writing pursuant to this clause (e); or

(f) the Source is a governmental plan; or

(g) the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this clause (g); or

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(h) the Source does not include “plan assets” within the meaning of the Department of Labor regulations located at 29 C.F.R. Section 2510.3-101 as modified by Section 3(42) of ERISA.

As used in this Section 6.2, the terms “employee benefit plan,” “governmental plan,” and “separate account” shall have the respective meanings assigned to such terms in section 3 of ERISA. No Purchaser or transferee of a Note shall be entitled to identify an employee benefit plan pursuant to clauses 6.2(c), (d), (e), (g) unless it has provided the identification of the employee benefit plan to the Company at least three (3) Business Days prior to the date hereof or the date of the transfer of a Note, as applicable.

Section 6.3. Investment Experience; Access to Information. Each Purchaser (for itself and for each account for which such Purchaser is acquiring the Notes) severally represents that such Person

(a) is an “accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D promulgated under the Securities Act and an “Institutional Account” as defined in FINRA Rule 4512(c),

(b) either alone or together with its representatives has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of this investment and make an informed decision to so invest and has so evaluated and analyzed the risks and merits of such investment,

(d) understands the terms of and risks associated with the purchase of the Notes, including, without limitation, a lack of liquidity, pricing availability and risks associated with the industry in which the Company operates,

(e) has had the opportunity to review (i) the Disclosure Documents, (ii) the Annual Report on Form 10-K for the Company for the fiscal year ended December 31, 2019, (iii) the Quarterly Report on Form 10-Q for the Company for the quarter ended March 31, 2020, (iv) such other disclosure regarding the Company, its business and its financial condition as such Purchaser has determined to be necessary in connection with the purchase of the Notes and (v) has not received any other information, whether orally or in writing, contrary to the information in this sub-clause (e),

(f) has had an opportunity to ask such questions and make such inquiries concerning the Company, its business and its financial condition as such Purchaser has deemed appropriate in connection with its purchase of the Notes and to receive satisfactory answers to such questions and inquiries, and

(g) is purchasing the Notes without a view to distribution thereof within the meaning of the Securities Act and agrees not to reoffer or resell the Notes except pursuant to an exemption from registration under the Securities Act or pursuant to an effective registration statement thereunder (it being understood, however, that the disposition of such Person’s property shall at all times be within such Person’s control).

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Section 6.4. Authorization. Each Purchaser severally represents that (a) it has full power and authority to enter into this Agreement and (b) this Agreement, when executed and delivered by such Purchaser, will constitute valid and legally binding obligations of such Purchaser, enforceable in accordance with their terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and any other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

SECTION 7.

INFORMATION AS TO COMPANY.

Section 7.1. Financial and Business Information. The Company shall deliver to each holder of a Note that is an Institutional Investor:

(a) Quarterly Statements — within 60 days (or such shorter period as is 15 days greater than the period applicable to the filing of the Company’s Quarterly Report on Form 10-Q (the “Form 10-Q”) with the SEC regardless of whether the Company is subject to the filing requirements thereof) after the end of each quarterly fiscal period in each fiscal year of the Company (other than the last quarterly fiscal period of each such fiscal year), duplicate copies of,

(i) a consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarter, and

(ii) consolidated statements of income, changes in shareholders’ equity and cash flows of the Company and its Subsidiaries, for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter,

setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally, and certified by a Senior Financial Officer as fairly presenting, in all material respects, the financial position of the Company and its Subsidiaries being reported on and their results of operations and cash flows, subject to changes resulting from year-end adjustments;

(b) Annual Statements — within 105 days (or such shorter period as is 15 days greater than the period applicable to the filing of the Company’s Annual Report on Form 10-K (the “Form 10-K”) with the SEC regardless of whether the Company is subject to the filing requirements thereof) after the end of each fiscal year of the Company, duplicate copies of

(i) a consolidated balance sheet of the Company and its Subsidiaries as at the end of such year, and

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(ii) consolidated statements of income, changes in shareholders’ equity and cash flows of the Company and its Subsidiaries for such year,

setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP, and accompanied by an opinion thereon (without a “going concern” or similar qualification or exception as to the Company (other than as a result of the impending maturity or any prospective default under any agreement providing for Indebtedness of the Company, including this Agreement and the Notes) and without any qualification or exception as to the scope of the audit on which such opinion is based) of independent public accountants of recognized national standing, which opinion shall state that such financial statements present fairly, in all material respects, the financial position of the Company and its Subsidiaries being reported upon and their results of operations and cash flows and have been prepared in conformity with GAAP, and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and that such audit provides a reasonable basis for such opinion in the circumstances;

(c) SEC and Other Reports — promptly upon their becoming available, one copy of (i) each financial statement, report, notice, proxy statement or similar document sent by the Company or any Subsidiary (x) to its creditors under any Material Credit Facility (excluding information sent to such creditors in the ordinary course of administration of a credit facility, such as information relating to pricing and borrowing availability) or (y) to its public Securities holders generally, and (ii) each regular or periodic report, each registration statement (without exhibits except as expressly requested by such holder), and each prospectus and all amendments thereto filed by the Company or any Subsidiary with the SEC and of all press releases and other statements made available generally by the Company or any Subsidiary to the public concerning developments that are Material;

(d) Notice of Default or Event of Default — promptly, and in any event within 5 Business Days after a Responsible Officer becoming aware of the existence of any Default or Event of Default or that any Person has given any notice or taken any action with respect to a claimed default hereunder or that any Person has given any notice or taken any action with respect to a claimed default of the type referred to in Section 11(f), a written notice specifying the nature and period of existence thereof and what action the Company is taking or proposes to take with respect thereto;

(e) Employee Benefits Matters — promptly, and in any event within 5 days after a Responsible Officer becoming aware of any of the following, a written notice setting forth the nature thereof and the action, if any, that the Company or an ERISA Affiliate proposes to take with respect thereto:

(i) with respect to any Plan, any reportable event, as defined in section 4043(c) of ERISA and the regulations thereunder, for which notice thereof has not been waived pursuant to such regulations as in effect on the date hereof, if such reportable event, or action necessitating such reportable event, would reasonably be expected to result in a Material Adverse Effect;

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(ii) the taking by the PBGC of steps to institute, or the threatening by the PBGC of the institution of, proceedings under section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan, if such actions, taken together with any other such actions then existing, would reasonably be expected to have a Material Adverse Effect;

(iii) any event, transaction or condition that would result in the incurrence of any liability by the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or excise tax provisions, if such liability or Lien, taken together with any other such liabilities or Liens then existing, would reasonably be expected to have a Material Adverse Effect; or

(iv) receipt of notice of the imposition of a Material financial penalty (which for this purpose shall mean any tax, penalty or other liability, whether by way of indemnity or otherwise) with respect to one or more Non-U.S. Plans;

(f) Notices from Governmental Authority — promptly, and in any event within 30 days of receipt thereof, copies of any notice to the Company or any Subsidiary from any Governmental Authority relating to any order, ruling, statute or other law or regulation that would reasonably be expected to have a Material Adverse Effect;

(g) Resignation or Replacement of Auditors — within 10 days following the date on which the Company’s auditors resign or the Company elects to change auditors, as the case may be, notification thereof, together with such further information as the Required Holders may request;

(h) Requested Information — with reasonable promptness, such other data and information relating to the business, operations, affairs, financial condition, assets or properties of the Company or any of its Subsidiaries (including actual copies of the Company’s Form 10-Q and Form 10-K) or relating to the ability of the Company to perform its obligations hereunder and under the Notes as from time to time may be reasonably requested by any such holder of a Note; and

(i) Supplements — promptly, and in any event within 10 Business Days after the execution and delivery of any Supplement, a copy thereof.

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Section 7.2. Officer’s Certificate. Each set of financial statements delivered to a holder of a Note pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a certificate of a Senior Financial Officer:

(a) Covenant Compliance — setting forth the information from such financial statements that is required in order to establish whether the Company was in compliance with the requirements of Section 10.8 during the quarterly or annual period covered by the financial statements then being furnished (including with respect to each such provision that involves mathematical calculations, the information from such financial statements that is required to perform such calculations) and detailed calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Section, and the calculation of the amount, ratio or percentage then in existence. In the event that the Company or any Subsidiary has made an election to measure any financial liability using fair value (which election is being disregarded for purposes of determining compliance with this Agreement pursuant to Section 22.2) as to the period covered by any such financial statement, such Senior Financial Officer’s certificate as to such period shall include a reconciliation from GAAP with respect to such election;

(b) Event of Default — certifying that such Senior Financial Officer has reviewed the relevant terms hereof and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Company and its Subsidiaries from the beginning of the quarterly or annual period covered by the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default or, if any such condition or event existed or exists (including any such event or condition resulting from the failure of the Company or any Subsidiary to comply with any Environmental Law), specifying the nature and period of existence thereof and what action the Company shall have taken or proposes to take with respect thereto; and

(c) Subsidiary Guarantors – setting forth a list of all Subsidiaries that are Subsidiary Guarantors and certifying that each Subsidiary that is required to be a Subsidiary Guarantor pursuant to Section 9.7 is a Subsidiary Guarantor, in each case, as of the date of such certificate of Senior Financial Officer.

Section 7.3. Visitation. The Company shall permit the representatives of each holder of a Note that is an Institutional Investor:

(a) No Default — if no Default or Event of Default then exists and is continuing, at the expense of such holder and upon at least ten (10) Business Days’ prior written notice to the Company, to visit the principal executive office of the Company, to discuss the affairs, finances and accounts of the Company and its Subsidiaries with the Company’s officers, and (with the consent of the Company, which consent will not be unreasonably withheld) its independent public accountants, and (with the consent of the Company, which consent will not be unreasonably withheld) to visit the other offices and properties of the Company and each Subsidiary, all at such reasonable times and as often as may be reasonably requested in writing; provided, that such visitation rights set forth in this clause (a) may be exercised only once per calendar year for each holder of a Note; and

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(b) Default — if a Default or Event of Default then exists and is continuing, at the expense of the Company and upon at least ten (10) Business Days’ prior written notice to the Company, to visit and inspect any of the offices or properties of the Company or any Subsidiary, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers and independent public accountants (and by this provision the Company authorizes said accountants to discuss the affairs, finances and accounts of the Company and its Subsidiaries), all at such reasonable times and as often as may be reasonably requested in writing.

Section 7.4. Electronic Delivery. Financial statements, opinions of independent certified public accountants, other information and Officer’s Certificates that are required to be delivered by the Company pursuant to Sections 7.1(a), (b), (c) or (h) and Section 7.2 shall be deemed to have been delivered if the Company satisfies any of the following requirements with respect thereto:

(a) such financial statements satisfying the requirements of Section 7.1(a) or (b) and related Officer’s Certificate satisfying the requirements of Section 7.2 and any other information required under Section 7.1(c) are delivered to each holder of a Note by e-mail at the e-mail address set forth in such holder’s Purchaser Schedule or as communicated from time to time in a separate writing delivered to the Company;

(b) the Company shall have timely filed such Form 10–Q or Form 10–K, satisfying the requirements of Section 7.1(a), Section 7.1(b) or Section 7.1(h), as the case may be, with the SEC on EDGAR and shall have (A) made such form available on its home page on the internet, which is located at http:// www.crescentbdc.com as of the date of this Agreement and (B) delivered any related Officer’s Certificate to each holder of a Note by electronic mail;

(c) such financial statements satisfying the requirements of Section 7.1(a) or Section 7.1(b) and related Officer’s Certificate(s) satisfying the requirements of Section 7.2 and any other information required under Section 7.1(c) are timely posted by or on behalf of the Company on IntraLinks or on any other similar website to which each holder of Notes has free access; or

(d) the Company shall have timely filed any of the items referred to in Section 7.1(c) with the SEC on EDGAR and shall have made such items available on its home page on the internet or on IntraLinks or on any other similar website to which each holder of Notes has free access;

provided however, that in no case shall access to such financial statements, other information and Officer’s Certificates be conditioned upon any waiver or other agreement or consent (other than confidentiality provisions consistent with Section 20 of this Agreement); provided further, that in the case of any of clauses (b), (c) or (d), the Company shall have given each holder of a Note prior written notice, which may be by e-mail, included in the Officer’s Certificate delivered pursuant to Section 7.2, or in accordance with Section 18, of such posting or filing in connection with each delivery, provided further, that upon request of any holder to receive paper copies of such forms, financial statements, other information and Officer’s Certificates or to receive them by e-mail, the Company will promptly e-mail them or deliver such paper copies, as the case may be, to such holder.

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Section 7.5. Limitation on Competitors. Under no circumstances shall the Company or any Subsidiary be required to disclose any information pursuant to Section 7.1(h) or 7.3 to any Person that is a Competitor.

SECTION 8.

PAYMENT AND PREPAYMENT OF THE NOTES.

Section 8.1. Maturity. As provided therein, the entire unpaid principal balance of each Note shall be due and payable on the Maturity Date thereof.

Section 8.2. Optional Prepayments. The Company may, at its option, upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes, in an amount not less than $1,000,000, in the case of a partial prepayment, at 100% of the principal amount so prepaid, together with interest accrued thereon to the date of such prepayment, plus the Make-Whole Amount determined for the prepayment date with respect to such principal amount; provided, that, so long as no Default or Event of Default shall then exist, at any time on or after January 30, 2023 the Company may, at its option, upon notice as provided below, prepay all or any part of the Notes at 100% of the principal amount so prepaid, together with, in each case, accrued interest to the prepayment date. The Company will give each holder of Notes written notice of each optional prepayment under this Section 8.2(a) not less than 10 days and not more than 60 days prior to the date fixed for such prepayment unless the Company and the Required Holders agree to another time period pursuant to Section 17. Each such notice shall specify such date (which shall be a Business Day), the aggregate principal amount of Notes to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.3), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation. Two Business Days prior to such prepayment, the Company shall deliver to each holder of Notes a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount as of the specified prepayment date.

Section 8.3. Allocation of Partial Prepayments. In the case of each partial prepayment of the Notes pursuant to Section 8.2(a), the principal amount of the Notes to be prepaid shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment.

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Section 8.4. Maturity; Surrender, Etc. In the case of each prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment, together with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if any. From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue. Any Note paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.

Section 8.5. Purchase of Notes. The Company will not and will not permit any Controlled Entity to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except (a) upon the payment or prepayment of the Notes in accordance with this Agreement and the Notes or (b) pursuant to an offer to purchase made by the Company or a Controlled Entity pro rata to the holders of the applicable series of Notes at the time outstanding upon the same terms and conditions. Any such offer shall provide each holder with sufficient information to enable it to make an informed decision with respect to such offer, and shall remain open for at least 10 Business Days. If the holders of more than 20% of the principal amount of the applicable series of Notes then outstanding accept such offer, the Company shall promptly notify the remaining holders of such series of Notes of such fact and the expiration date for the acceptance by holders of such series of Notes of such offer shall be extended by the number of days necessary to give each such remaining holder at least five Business Days from its receipt of such notice to accept such offer. The Company will promptly cancel all Notes acquired by it or any Controlled Entity pursuant to any payment, prepayment or purchase of Notes pursuant to this Agreement and no Notes may be issued in substitution or exchange for any such Notes.

Section 8.6. Make-Whole Amount .

The term “Make-Whole Amount” means, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal, provided that the Make-Whole Amount may in no event be less than zero. For the purposes of determining the Make-Whole Amount, the following terms have the following meanings:

“Called Principal” means, with respect to any Note, the principal of such Note that is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

“Discounted Value” means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal.

“Reinvestment Yield” means, with respect to the Called Principal of any Note, the sum of (a) 0.50% plus (b) the yield to maturity implied by the “Ask Yield(s)” reported as of 10:00 a.m. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PX1” (or such other display as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on-the-run U.S. Treasury securities (“Reported”) having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date. If there are no such U.S. Treasury securities Reported having a maturity equal to such Remaining Average Life, then such implied yield to maturity will be determined by (i) converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice and (ii) interpolating linearly between the “Ask Yields” Reported for the applicable most recently issued actively traded on-the-run U.S. Treasury securities with the maturities (1) closest to and greater than such Remaining Average Life and (2) closest to and less than such Remaining Average Life. The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.

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If such yields are not Reported or the yields Reported as of such time are not ascertainable (including by way of interpolation), then “Reinvestment Yield” means, with respect to the Called Principal of any Note, the sum of (x) 0.50% plus (y) the yield to maturity implied by the U.S. Treasury constant maturity yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for the U.S. Treasury constant maturity having a term equal to the Remaining Average Life of such Called Principal as of such Settlement Date. If there is no such U.S. Treasury constant maturity having a term equal to such Remaining Average Life, such implied yield to maturity will be determined by interpolating linearly between (1) the U.S. Treasury constant maturity so reported with the term closest to and greater than such Remaining Average Life and (2) the U.S. Treasury constant maturity so reported with the term closest to and less than such Remaining Average Life. The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.

“Remaining Average Life” means, with respect to any Called Principal, the number of years obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years, computed on the basis of a 360-day year comprised of twelve 30-day months and calculated to two decimal places, that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.

“Remaining Scheduled Payments” means, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.2 or Section 12.1.

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“Settlement Date” means, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

Section 8.7. Payments Due on Non-Business Days. Anything in this Agreement or the Notes to the contrary notwithstanding, (x) except as set forth in clause (y), any payment of interest on any Note that is due on a date that is not a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day; and (y) any payment of principal of or Make-Whole Amount on any Note (including principal due on the Maturity Date of such Note) that is due on a date that is not a Business Day shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.

Section 8.8. Change in Control.

(a) Notice of Change in Control. The Company will, within five Business Days after any Responsible Officer has knowledge of the occurrence of any Change in Control, give written notice of such Change in Control to each holder of Notes. Such notice shall contain and constitute an offer to prepay Notes as described in subparagraph (b) of this Section 8.8 and shall be accompanied by the certificate described in subparagraph (e) of this Section 8.8.

(b) Offer to Prepay Notes. The offer to prepay Notes contemplated by subparagraph (a) of this Section 8.8 shall be an offer to prepay, in accordance with and subject to this Section 8.8, all, but not less than all, the Notes held by each holder (in this case only, “holder” in respect of any Note registered in the name of a nominee for a disclosed beneficial owner shall mean such beneficial owner) on a date specified in such offer (the “Proposed Prepayment Date”). Such date shall be not less than 30 days and not more than 60 days after the date of such offer (if the Proposed Prepayment Date shall not be specified in such offer, the Proposed Prepayment Date shall be the first Business Day after the 45th day after the date of such offer).

(c) Acceptance/Rejection. A holder of Notes may accept the offer to prepay made pursuant to this Section 8.8 by causing a notice of such acceptance to be delivered to the Company not later than 10 days after receipt by such holder of the most recent offer of prepayment. A failure by a holder of Notes to respond to an offer to prepay made pursuant to this Section 8.8 shall be deemed to constitute rejection of such offer by such holder.

(d) Prepayment. Prepayment of the Notes to be prepaid pursuant to this Section 8.8 shall be at 100% of the principal amount of such Notes, together with interest on such Notes accrued to, but excluding, the date of prepayment, but without Make-Whole Amount or other premium.

(e) Officer’s Certificate. Each offer to prepay the Notes pursuant to this Section 8.8 shall be accompanied by a certificate, executed by a Financial Officer of the Company and dated the date of such offer, specifying: (i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this Section 8.8; (iii) the principal amount of each Note offered to be prepaid; (iv) the interest that would be due on each Note offered to be prepaid, accrued to, but excluding, the Proposed Prepayment Date; (v) that the conditions of this Section 8.8 have been fulfilled; and (vi) in reasonable detail, the nature and date or proposed date of the Change in Control.

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(f) Definitions.

“Change of Control” means the occurrence of any of the following events: (a) the acquisition after the date of the first Closing of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Exchange Act and the rules of the Securities and Exchange Commission thereunder as in effect on the date of the first Closing) of shares representing more than 50.0% of the aggregate ordinary voting power represented by the issued and outstanding capital stock (or similar ownership interests) of the Investment Advisor or the Company, or (b) the occupation of a majority of the seats (other than vacant seats) on the board of directors of the Company by Persons who were neither (i) nominated by the requisite members of the board of directors of the Company nor (ii) appointed by a majority of the directors so nominated.

SECTION 9.

AFFIRMATIVE COVENANTS.

The Company covenants that so long as any of the Notes are outstanding:

Section 9.1. Compliance with Laws. Without limiting Section 10.4, the Company will, and will cause each of its Subsidiaries to, comply with all laws, ordinances or governmental rules or regulations to which each of them is subject (including ERISA, Environmental Laws, the USA PATRIOT Act and the other laws and regulations that are referred to in Section 5.16) and will obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that non-compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 9.2. Insurance. The Company will, and will cause each of its Subsidiaries to, maintain, with financially sound and reputable insurers, insurance with respect to their respective properties and businesses against such casualties and contingencies, of such types, on such terms and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with respect thereto) as is customary in the case of entities of established reputations engaged in the same or a similar business and similarly situated.

Section 9.3. Maintenance of Properties. The Company will, and will cause each of its Subsidiaries to, maintain and keep, or cause to be maintained and kept, their respective properties in good repair, working order and condition (other than ordinary wear and tear), so that the business carried on in connection therewith may be properly conducted at all times, provided that this Section 9.3 shall not prevent the Company or any Subsidiary from discontinuing the operation and the maintenance of any of its properties if such discontinuance is desirable in the conduct of its business and the Company has concluded that such discontinuance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

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Section 9.4. Payment of Taxes and Claims. The Company will, and will cause each of its Subsidiaries to, file all material tax returns required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges, or levies imposed on them or any of their properties, assets, income or franchises, to the extent the same have become due and payable and before they have become delinquent and all claims for which sums have become due and payable that have or might become a Lien on properties or assets of the Company or any Subsidiary, provided that neither the Company nor any Subsidiary need pay any such tax, assessment, charge, levy or claim if (i) the amount, applicability or validity thereof is contested by the Company or such Subsidiary on a timely basis in good faith and in appropriate proceedings, and the Company or a Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of the Company or such Subsidiary or (ii) the nonpayment of all such taxes, assessments, charges, levies and claims would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 9.5. Corporate Existence, Etc. Subject to Section 10.2, the Company will at all times preserve and keep its corporate existence in full force and effect. Subject to Section 10.2, the Company will at all times preserve and keep in full force and effect the corporate existence of each of its Subsidiaries (unless merged into the Company or a Wholly-Owned Subsidiary) and all rights and franchises of the Company and its Subsidiaries unless, in the good faith judgment of the Company, the termination of or failure to preserve and keep in full force and effect such corporate existence, right or franchise would not, individually or in the aggregate, have a Material Adverse Effect.

Section 9.6. Books and Records. The Company will, and will cause each of its Subsidiaries to, maintain proper books of record and account in conformity with GAAP and all applicable requirements of any Governmental Authority having legal or regulatory jurisdiction over the Company or such Subsidiary, as the case may be. The Company will, and will cause each of its Subsidiaries to, keep books, records and accounts which, in reasonable detail, accurately reflect all transactions and dispositions of assets. The Company and its Subsidiaries have devised a system of internal accounting controls sufficient to provide reasonable assurances that their respective books, records, and accounts accurately reflect all transactions and dispositions of assets and the Company will, and will cause each of its Subsidiaries to, continue to maintain such system.

Section 9.7. Subsidiary Guarantors. (a) The Company will cause each of its Subsidiaries that guarantees or otherwise becomes liable at any time, whether as a borrower or an additional or co-borrower or otherwise, for or in respect of any Indebtedness under any Material Credit Facility for which the Company is a borrower or guarantor to concurrently therewith:

(i) enter into (A) an agreement in form and substance satisfactory to the Required Holders providing for the guaranty by such Subsidiary, on a joint and several basis with all other such Subsidiaries, of (x) the prompt payment in full when due of all amounts payable by the Company pursuant to the Notes (whether for principal, interest, Make-Whole Amount or otherwise) and this Agreement, including all indemnities, fees and expenses payable by the Company thereunder and (y) the prompt, full and faithful performance, observance and discharge by the Company of each and every covenant, agreement, undertaking and provision required pursuant to the Notes or this Agreement to be performed, observed or discharged by it (a “Subsidiary Guaranty”) or (B) a joinder to the Subsidiary Guaranty; and

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(ii) deliver the following to each holder of a Note:

(A) an executed counterpart of such Subsidiary Guaranty or a joinder thereto;

(B) a certificate signed by an authorized responsible officer of such Subsidiary containing representations and warranties on behalf of such Subsidiary to the same effect, mutatis mutandis, as those contained in Sections 5.1, 5.2, 5.6 and 5.7 of this Agreement (but with respect to such Subsidiary and such Subsidiary Guaranty rather than the Company);

(C) all documents as may be reasonably requested by the Required Holders to evidence the due organization, continuing existence and, where applicable, good standing of such Subsidiary and the due authorization by all requisite action on the part of such Subsidiary of the execution and delivery of such Subsidiary Guaranty and the performance by such Subsidiary of its obligations thereunder; and

(D) an opinion of counsel reasonably satisfactory to the Required Holders covering such matters relating to such Subsidiary and such Subsidiary Guaranty as the Required Holders may reasonably request.

(b) At the election of the Company and by written notice to each holder of Notes, any Subsidiary Guarantor that has provided a Subsidiary Guaranty or joinder thereto under subparagraph (a) of this Section 9.7 may be discharged from all of its obligations and liabilities under its Subsidiary Guaranty and shall be automatically released from its obligations thereunder without the need for the execution or delivery of any other document by the holders, provided that (i) if such Subsidiary Guarantor is a guarantor or is otherwise liable for or in respect of any Material Credit Facility, then such Subsidiary Guarantor has been released and discharged (or will be released and discharged concurrently with the release of such Subsidiary Guarantor under its Subsidiary Guaranty) under such Material Credit Facility, (ii) at the time of, and after giving effect to, such release and discharge, no Default or Event of Default shall be existing, (iii) no amount is then due and payable under such Subsidiary Guaranty, (iv) if in connection with such Subsidiary Guarantor being released and discharged under any Material Credit Facility (other than in connection with a sale of such Subsidiary or its Equity Interests), any fee or other form of consideration is given to any holder of Indebtedness under such Material Credit Facility for such release, the holders of the Notes shall receive equivalent consideration substantially concurrently therewith and (v) each holder shall have received a certificate of a Responsible Officer certifying as to the matters set forth in clauses (i) through (iv).

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Section 9.8. Status of RIC and BDC. The Company shall at all times, subject to any applicable grace periods set forth in the Code, maintain its status as a RIC under the Code and as a “business development company” under the Investment Company Act.

Section 9.9. Investment Policies. The Company shall at all times be in compliance with its Investment Policies, except to the extent that the failure to so comply would not reasonably be expected to result in a Material Adverse Effect.

Section 9.10. Rating Confirmation. The Company covenants and agrees that, at its sole cost and expense, it shall cause to be maintained at all times a Rating from at least one NRSRO that indicates that it will monitor the rating on an ongoing basis. No later than July 30 of each year, commencing in 2021, and promptly upon any change in such Rating, the Company shall provide a notice to each of the holders of the Notes sent in the manner provided in Section 18 with respect to any then current Ratings, which shall include a Rating from at least one NRSRO, and which notice shall include a copy of such Rating.

SECTION 10.

NEGATIVE COVENANTS.

The Company covenants that so long as any of the Notes are outstanding:

Section 10.1. Transactions with Affiliates. The Company will not, and will not permit any Subsidiary to, enter into directly or indirectly any transaction or group of related transactions (including the purchase, lease, sale or exchange of properties of any kind or the rendering of any service) with any Affiliate (other than the Company or any of its Subsidiaries) involving payment in excess of $500,000, except:

(a) in the ordinary course and pursuant to the reasonable requirements of the Company’s or such Subsidiary’s business and upon fair and reasonable terms not less favorable in any material respect to the Company or such Subsidiary than would be obtainable in a comparable arm’s-length transaction with a Person not an Affiliate;

(b) transactions with Affiliates in connection with the agreements set forth in Schedule 10.1;

(c) transactions with one or more Affiliates of the Company or the Investment Adviser consisting of co-investments as permitted by any SEC exemptive order (as may be amended from time to time), any no-action letter or as otherwise permitted by applicable law, rule or regulation or SEC staff interpretations thereof or based on advice of counsel;

(d) transactions between or among, on the one hand, the Company and/or any of its Subsidiaries, and, on the other hand, any SBIC Subsidiary or any “downstream affiliate” (as such term is used under the rules promulgated under the Investment Company Act) of the Company and/or any of its Subsidiaries at prices and on terms and conditions, taken as a whole, not less favorable in any material respect to the Company and/or such Subsidiaries than in good faith is believed could be obtained on an arm’s-length basis from unrelated third parties,

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(e) a transaction that has been approved by a majority of the independent directors of the board of directors of the Company;

(f) any Investment that results in the creation of an Affiliate;

(g) customary compensation to Affiliates in connection with investment advisory, administration, financial advisory, financing, underwriting or placement services or in respect of other investment banking activities and other transaction fees, which payments are approved by the majority of the members of the board of directors (or similar governing body) or a majority of the disinterested members of the board of directors of the Company in good faith;

(h) transactions and payments required under the definitive agreement for any acquisition or Investment permitted under this Agreement (to the extent any seller, employee, officer or director of an acquired entity becomes an Affiliate in connection with such transaction);

(i) the payment of customary fees and reasonable out-of-pocket costs to, and indemnities provided on behalf of, members of the board of directors (or similar governing body), officers, employees, members of management, managers, consultants, investment advisers, administrative service providers and independent contractors of the Company and/or any of its direct or indirect subsidiaries in the ordinary course of business;

(j) transactions with customers, clients, suppliers, joint ventures, purchasers or sellers of goods or services or providers of employees or other labor entered into in the ordinary course of business, which are (i) fair to the Company and/or the applicable Subsidiary in the good faith determination of the board of directors (or similar governing body) of the Company or the senior management thereof or (ii) on terms at least as favorable as might reasonably be obtained from a Person other than an Affiliate;

(k) the Company may issue and sell Equity Interests to its Affiliates; and

(l) transactions permitted under the Company Credit Facilities or any Replacement Facilities.

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Section 10.2. Merger, Consolidation, Etc. The Company will not, and will not permit any Subsidiary Guarantor to, consolidate with or merge with any other Person or convey, transfer or lease all or substantially all of its assets in a single transaction or series of transactions to any Person except:

(a) in the case of any such transaction involving the Company, the successor formed by such consolidation or the survivor of such merger or the Person that acquires by conveyance, transfer or lease all or substantially all of the assets of the Company as an entirety, as the case may be, shall be a solvent corporation or limited liability company organized and existing under the laws of the United States or any state thereof (including the District of Columbia), and, if the Company is not such corporation or limited liability company, (i) such corporation or limited liability company shall have executed and delivered to each holder of any Notes its assumption of the due and punctual performance and observance of each covenant and condition of this Agreement and the Notes and (ii) such corporation or limited liability company shall have caused to be delivered to each holder of any Notes an opinion of nationally recognized outside legal counsel, or other outside legal counsel reasonably satisfactory to the Required Holders, to the effect that all agreements or instruments effecting such assumption are enforceable in accordance with their terms and comply with the terms hereof;

(b) in the case of any such transaction involving a Subsidiary Guarantor, the successor formed by such consolidation or the survivor of such merger or the Person that acquires by conveyance, transfer or lease all or substantially all of the assets of such Subsidiary Guarantor as an entirety, as the case may be, shall be (1) the Company, such Subsidiary Guarantor or another Subsidiary Guarantor; or (2) a solvent corporation or limited liability company (other than the Company or another Subsidiary Guarantor) that is organized and existing under the laws of the United States or any state thereof (including the District of Columbia) and, if such Subsidiary Guarantor is not such corporation or limited liability company, (A) such corporation or limited liability company shall have executed and delivered to each holder of Notes its assumption of the due and punctual performance and observance of each covenant and condition of the Subsidiary Guaranty of such Subsidiary Guarantor and (B) the Company shall have caused to be delivered to each holder of Notes an opinion of nationally recognized outside legal counsel, or other outside legal counsel reasonably satisfactory to the Required Holders, to the effect that all agreements or instruments effecting such assumption are enforceable in accordance with their terms and comply with the terms hereof;

(d) any Subsidiary Guarantor may be liquidated or dissolved; provided that (i) in connection with such liquidation or dissolution, any and all of the assets of such Subsidiary Guarantor shall be distributed or otherwise transferred to an Obligor and (ii) the Company determines in good faith that such liquidation is in the best interests of the Company and is not materially disadvantageous to the holders of the Notes;

(e) in the cases of clauses (a) and (b)(2) above, each Subsidiary Guarantor under any Subsidiary Guaranty that is outstanding at the time such transaction or each transaction in such a series of transactions occurs reaffirms its obligations under such Subsidiary Guaranty in writing at such time pursuant to documentation that is reasonably acceptable to the Required Holders; and

(f) in the case of clause (a) above, immediately before and immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing and the Company shall deliver to the holders of the Notes a certificate of a Senior Financial Officer to such effect.

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No such conveyance, transfer or lease of substantially all of the assets of the Company or any Subsidiary Guarantor shall have the effect of releasing the Company or such Subsidiary Guarantor, as the case may be, or any successor corporation or limited liability company that shall theretofore have become such in the manner prescribed in this Section 10.2, from its liability under (x) this Agreement or the Notes (in the case of the Company) or (y) the Subsidiary Guaranty (in the case of any Subsidiary Guarantor), unless, in the case of the conveyance, transfer or lease of substantially all of the assets of a Subsidiary Guarantor, such Subsidiary Guarantor is released from its Subsidiary Guaranty in accordance with Section 9.7(b) in connection with or immediately following such conveyance, transfer or lease.

Section 10.3. Line of Business. The Company will not and will not permit any Subsidiary to engage in any business if, as a result, the general nature of the business in which the Company and its Subsidiaries, taken as a whole, would then be engaged would be substantially changed from the general nature of the business in which the Company and its Subsidiaries, taken as a whole, are engaged on the date of this Agreement as described in the Company’s most recent Form 10-K, other than (i) ancillary or support businesses; (ii) any business in or related to private credit or that other business development companies enter into or are engaged in; or (iii) otherwise in accordance with its Investment Policies.

Section 10.4. Economic Sanctions, Etc. The Company will not, and will not permit any Controlled Entity to (a) become (including by virtue of being owned or controlled by a Blocked Person or Canada Blocked Person), own or control a Blocked Person or Canada Blocked Person or (b) directly or indirectly have any investment in or engage in any dealing or transaction (including any investment, dealing or transaction involving the proceeds of the Notes) with any Person if such investment, dealing or transaction (i) would cause any holder or any affiliate of such holder to be in violation of, or subject to sanctions under, any law or regulation applicable to such holder, or (ii) is prohibited by or subject to sanctions under any U.S. Economic Sanctions Laws or any Canadian Economic Sanctions Laws.

Section 10.5. Liens. The Company will not directly or indirectly create, incur, assume or permit to exist (upon the happening of a contingency or otherwise) any Lien on or with respect to any property or asset (including, without limitation, any document or instrument in respect of goods or accounts receivable) of the Company (which, for the avoidance of doubt, shall not, for purposes of this Section 10.5, include assets owned by a Excluded Subsidiary), whether now owned or held or hereafter acquired, or any income or profits therefrom, or assign or otherwise convey any right to receive income or profits, except

(a) Liens for Taxes, assessments or charges if such Taxes, assessments or charges shall not at the time be due and payable or if a Person shall currently be contesting the validity thereof in good faith by appropriate proceedings and with respect to which reserves in accordance with GAAP have been provided on the books of such Person,

(b) Liens imposed by law, such as materialmen’s, warehousemen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and other similar Liens, arising by operation of law in the ordinary course of business for sums that are not overdue or are being contested in good faith,

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(d) Liens permitted under the Company Credit Facilities or any Replacement Facilities,

(e) Liens of clearing agencies, broker-dealers and similar Liens incurred in the ordinary course of business, provided that such Liens (i) attach only to the securities (or proceeds) being purchased or sold and (ii) secure only obligations incurred in connection with such purchase or sale, and not any obligation in connection with margin financing,

(f) Liens incurred or pledges or deposits made to secure obligations incurred in the ordinary course of business under workers’ compensation laws, unemployment insurance or other similar social security legislation (other than in respect of employee benefit plans subject to ERISA) or to secure public or statutory obligations,

(g) Liens securing the performance of, or payment in respect of, bids, insurance premiums, deductibles or co-insured amounts, tenders, government or utility contracts (other than for the repayment of borrowed money), surety, stay, customs and appeal bonds and other obligations of a similar nature incurred in the ordinary course of business,

(h) Liens arising out of judgments or awards so long as such judgments or awards do not constitute an Event of Default under Section 11(j),

(i) customary rights of setoff and liens upon (i) deposits of cash in favor of banks or other depository institutions in which such cash is maintained in the ordinary course of business, (ii) cash and financial assets held in securities accounts in favor of banks and other financial institutions with which such accounts are maintained in the ordinary course of business and (iii) assets held by a custodian in favor of such custodian in the ordinary course of business securing payment of fees, indemnities and other similar obligations,

(j) Liens arising solely from precautionary filings of financing statements under the UCC of the applicable jurisdictions in respect of operating leases entered into by the Company in the ordinary course of business or in respect of assets sold or otherwise disposed of to any Person in a transaction permitted by this Agreement,

(k) deposits of money securing leases to which the Company is a party as lessee made in the ordinary course of business,

(l) Liens in favor of any escrow agent solely on and in respect of any cash earnest money deposits made by the Company in connection with any letter of intent or purchase agreement (to the extent that the acquisition or disposition with respect thereto is otherwise permitted hereunder),

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(m) Liens described on Schedule 5.15; provided that (i) no such Lien shall extend to any other property or asset of the Company and (ii) any such Lien shall secure only those obligations which it secures on the date of the first Closing and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof,

(n) Liens granted by a Passive SPE Subsidiary on Equity Interests in any SPE Subsidiary owned by such Passive SPE Subsidiary in favor of and required by any lender providing third-party financing to such SPE Subsidiary,

(o) Liens securing repurchase obligations arising in the ordinary course of business with respect to U.S. Government Securities, and

(p) other Liens in an aggregate principal amount outstanding not to exceed $1,000,000 at any time.

Section 10.6. [Reserved].

Section 10.7. [Reserved].

Section 10.8. Financial Covenants.

(a) Minimum Shareholders’ Equity. The Company will not permit Shareholders’ Equity at the last day of any fiscal quarter of the Company to be less than $302,700,000 plus 65% of the net proceeds of the sale of Equity Interests by the Company after the first Closing (excluding (i) proceeds of sales of Equity Interests by and among the Company and its Subsidiaries and (ii) issuances on account of any convertible debt).

(b) Asset Coverage Ratio. The Company will not permit the Asset Coverage Ratio as of the last Business Day of any fiscal quarter to be less than 1.50.

(c) Interest Coverage Ratio. The Company will not permit the Interest Coverage Ratio as of the last Business Day of any fiscal quarter to be less than 1.25 to 1.00.

Section 10.9. Most Favored Lender.

(a) If at any time a credit facility, loan agreement or other like financial instrument under which the Company or any Subsidiary may incur Unsecured Debt in excess of $10,000,000 (an “Unsecured Credit Facility”), contains an MFL Financial Covenant that is more favorable to the lenders under such Unsecured Credit Facility than the covenants, definitions and/or defaults contained in this Agreement (any such provision (including any necessary definition), a “More Favorable Covenant”), then the Company shall provide a Most Favored Lender notice in respect of such More Favorable Covenant. Such More Favorable Covenant shall be deemed automatically incorporated by reference into Section 10 of this Agreement, mutatis mutandis, as if set forth in full herein, effective as of the date when such More Favorable Covenant shall have become effective under such Unsecured Credit Facility, unless waived in writing by the Required Holders within 15 days after each holder’s receipt of such notice of such More Favorable Covenant; provided that, for the avoidance of doubt, any conversion feature in any Unsecured Credit Facility pursuant to which the principal amount of, or any premium and/or accrued but unpaid interest on, any debt security convertible by its terms into capital stock of the Company shall not be deemed to be a More Favorable Covenant for purposes of this section 10.9.

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(b) Any More Favorable Covenant incorporated into this Agreement (herein referred to as an “Incorporated Covenant”) pursuant to this Section 10.9 (i) shall be deemed automatically amended herein to reflect any subsequent amendments made to such More Favorable Covenant under the applicable Unsecured Credit Facility; provided that, if a Default or an Event of Default with respect to such Incorporated Covenant then exists and the amendment of such More Favorable Covenant would make such covenant less restrictive on the Company, such Incorporated Covenant shall only be deemed automatically amended at such time, if it should occur, when such Default or Event of Default no longer exists and (ii) shall be deemed automatically deleted from this Agreement at such time as such More Favorable Covenant is deleted or otherwise removed from the applicable Unsecured Credit Facility or such applicable Unsecured Credit Facility ceases to be a Unsecured Credit Facility or shall be terminated; provided that, if a Default or an Event of Default then exists, such Incorporated Covenant shall only be deemed automatically deleted from this Agreement at such time, if it should occur, when such Default or Event of Default no longer exists; provided further, however, that if any fee or other consideration shall be given to the lenders under such Unsecured Credit Facility for such amendment or deletion, the equivalent of such fee or other consideration shall be given, pro rata, to the holders of the Notes.

(c) “Most Favored Lender Notice” means, in respect of any More Favorable Covenant, a written notice to each of the holders of the Notes delivered promptly, and in any event within twenty Business Days after the inclusion of such More Favorable Covenant in any Unsecured Credit Facility (including by way of amendment or other modification of any existing provision thereof) from a Responsible Officer referring to the provisions of this Section 10.9 and setting forth a reasonably detailed description of such More Favorable Covenant (including any defined terms used therein) and related explanatory calculations, as applicable.

(d) Additionally, notwithstanding the foregoing, no covenant, definition or default expressly set forth in this Agreement as of the date of this Agreement (or incorporated into this Agreement by an amendment or modification to this Agreement other than pursuant to this Section 10.9) shall be deemed to be amended or deleted in any respect by virtue of the provisions of this Section 10.9.

SECTION 11.

EVENTS OF DEFAULT.

An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:

(a) the Company defaults in the payment of any principal, or Make-Whole Amount, if any, on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or

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(b) the Company defaults in the payment of any interest on any Note for more than five Business Days after the same becomes due and payable; or

(c) the Company defaults in the performance of or compliance with any term contained in Section 7.1(d) or Section 10.8, any Incorporated Covenant or any covenant in a Supplement which specifically provides that it shall have the benefit of this paragraph (c); or

(d) the Company or any Subsidiary Guarantor defaults in the performance of or compliance with any term contained herein or in any Supplement (other than those referred to in Sections 11(a), (b) and (c)) or in any Subsidiary Guaranty and such default is not remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) the Company receiving written notice of such default from any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this Section 11(d)); or

(e) (i) any representation or warranty made in writing by or on behalf of the Company or by any officer of the Company in this Agreement or in any Supplement or any writing furnished in connection with the transactions contemplated hereby proves to have been false or incorrect in any material respect on the date as of which made, or (ii) any representation or warranty made in writing by or on behalf of any Subsidiary Guarantor or by any officer of such Subsidiary Guarantor in any Subsidiary Guaranty or any writing furnished in connection with such Subsidiary Guaranty proves to have been false or incorrect in any material respect on the date as of which made; or

(f) (i) the Company or any Significant Subsidiary is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make-whole amount or interest on any Indebtedness for borrowed money that is outstanding in an aggregate principal amount of at least $25,000,000 (or its equivalent in the relevant currency of payment) beyond any period of grace provided with respect thereto, or (ii) the Company or any Significant Subsidiary is in default in the performance of or compliance with any financial or negative covenant (other than (1) any default set forth in clause (i) above, or (2) any default that is immaterial to the operations or performance of the Company or such Significant Subsidiary and that is not reasonably likely to have a material impact on the operations or performance of the Company or such Significant Subsidiary) of any evidence of any Indebtedness for borrowed money in an aggregate outstanding principal amount of at least $25,000,000 (or its equivalent in the relevant currency of payment) or of any mortgage, indenture or other agreement relating thereto, and, in each case, as a consequence of such default such Indebtedness has become, or has been declared (or one or more Persons are entitled to declare such Indebtedness to be), due and payable before its stated maturity or before its regularly scheduled dates of payment, or (iii) the Company or any Significant Subsidiary is in default in the performance of or compliance with any other term of any evidence of any Indebtedness for borrowed money (including any indenture or mortgage) in an aggregate outstanding principal amount of at least $25,000,000 (or its equivalent in the relevant currency of payment) or any other condition exists, and as a consequence of such default or condition such Indebtedness has become, or has been declared, due and payable before its stated maturity or before its regularly scheduled dates of payment, or (iv) as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of such Indebtedness to convert such Indebtedness into equity interests), the Company or any Significant Subsidiary has become obligated to purchase or repay Indebtedness for borrowed money before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount of at least $25,000,000 (or its equivalent in the relevant currency of payment); provided that this clause (f) shall not apply to (1) secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness, the net cash proceeds of which are used to repay such Indebtedness within thirty (30) days after such sale or transfer; (2) convertible debt that becomes due as a result of a conversion or redemption event, other than as a result of an “event of default” (as defined in the documents governing such convertible debt) of (3) a default, event, or condition that relates to a Change in Control and with respect to which Section 8.8 applies; or

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(g) the Company or any Significant Subsidiary (i) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (ii) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for the purpose of any of the foregoing; or

(h) a court or other Governmental Authority of competent jurisdiction enters an order appointing, without consent by the Company or any of its Significant Subsidiaries, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Company or any of its Significant Subsidiaries, or any such petition shall be filed against the Company or any of its Significant Subsidiaries and such petition shall not be dismissed within 60 days; or

(i) any event occurs with respect to the Company or any Significant Subsidiary which under the laws of any jurisdiction is analogous to any of the events described in Section 11(g) or Section 11(h), provided that the applicable grace period, if any, which shall apply shall be the one applicable to the relevant proceeding which most closely corresponds to the proceeding described in Section 11(g) or Section 11(h); or

(j) one or more final judgments or orders for the payment of money aggregating in excess of $2,000,000 (or its equivalent in the relevant currency of payment), including any such final order enforcing a binding arbitration decision (to the extent not covered by independent third-party insurance or by an enforceable indemnity), are rendered against one or more of the Company and its Significant Subsidiaries and which judgments are not, within 60 days after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within 60 days after the expiration of such stay; or

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(k) if (i) any Plan shall fail to satisfy the minimum funding standards of ERISA or the Code for any plan year or part thereof or a waiver of such standards or extension of any amortization period is sought or granted under section 412 of the Code, (ii) a notice of intent to terminate any Plan shall have been or is reasonably expected to be filed with the PBGC or the PBGC shall have instituted proceedings under ERISA section 4042 to terminate or appoint a trustee to administer any Plan or the PBGC shall have notified the Company or any ERISA Affiliate that a Plan may become a subject of any such proceedings, (iii) there is any “amount of unfunded benefit liabilities” (within the meaning of section 4001(a)(18) of ERISA) under one or more Plans, determined in accordance with Title IV of ERISA, (iv) the aggregate present value of accrued benefit liabilities under all funded Non-U.S. Plans exceeds the aggregate current value of the assets of such Non-U.S. Plans allocable to such liabilities, (v) the Company or any ERISA Affiliate shall have incurred or is reasonably expected to incur any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, (vi) the Company or any ERISA Affiliate withdraws from any Multiemployer Plan, (vii) the Company or any Subsidiary establishes or amends any employee welfare benefit plan that provides post-employment welfare benefits in a manner that would increase the liability of the Company or any Subsidiary thereunder, (viii) the Company or any Subsidiary fails to administer or maintain a Non-U.S. Plan in compliance with the requirements of any and all applicable laws, statutes, rules, regulations or court orders or any Non-U.S. Plan is involuntarily terminated or wound up, or (ix) the Company or any Subsidiary becomes subject to the imposition of a financial penalty (which for this purpose shall mean any tax, penalty or other liability, whether by way of indemnity or otherwise) with respect to one or more Non-U.S. Plans, and any such event or events described in clauses (i) through (ix) above, either individually or together with any other such event or events, would reasonably be expected to have a Material Adverse Effect. As used in this Section 11(k), the terms “employee benefit plan” and “employee welfare benefit plan” shall have the respective meanings assigned to such terms in section 3 of ERISA; or

(l) any Subsidiary Guaranty shall cease to be in full force and effect in any material respect, any Subsidiary Guarantor or any Person acting on behalf of any Subsidiary Guarantor shall contest in any manner the validity, binding nature or enforceability of any Subsidiary Guaranty, or the obligations of any Subsidiary Guarantor under any Subsidiary Guaranty are not or cease to be legal, valid, binding and enforceable in accordance with the terms of such Subsidiary Guaranty; or

(m) the Company shall cease to be managed by the Investment Advisor.

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SECTION 12.

REMEDIES ON DEFAULT, ETC.

Section 12.1. Acceleration. (a) If an Event of Default with respect to the Company described in Section 11(g), (h) or (i) (other than an Event of Default described in clause (i) of Section 11(g) or described in clause (vi) of Section 11(g) by virtue of the fact that such clause encompasses clause (i) of Section 11(g)) has occurred, all the Notes then outstanding shall automatically become immediately due and payable.

(b) If any other Event of Default has occurred and is continuing, the Required Holders may at any time at its or their option, by notice or notices to the Company, declare all the Notes then outstanding to be immediately due and payable.

(c) If any Event of Default described in Section 11(a) or (b) has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Company, declare all the Notes held by it or them to be immediately due and payable.

Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest thereon (including interest accrued thereon at the Default Rate) and (y) the Make-Whole Amount determined in respect of such principal amount of a Note shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived. The Company acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided for) and that the provision for payment of a Make-Whole Amount by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.

Section 12.2. Other Remedies. If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note or Subsidiary Guaranty, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.

Section 12.3. Rescission. At any time after any Notes have been declared due and payable pursuant to Section 12.1(b) or (c), the Required Holders, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate (b) neither the Company nor any other Person shall have paid any amounts which have become due solely by reason of such declaration, (c) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 17, and (d) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes. No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.

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Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies. No right, power or remedy conferred by this Agreement, any Subsidiary Guaranty or any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise. Without limiting the obligations of the Company under Section 15, the Company will pay on demand such further amount as shall be sufficient to cover all reasonable and documented out-of-pocket costs and expenses of up to one firm of outside counsel for all of the holders of the Notes collectively incurred in any enforcement or collection under this Section 12.

SECTION 13.

REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

Section 13.1. Registration of Notes. The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes. The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register. If any holder of one or more Notes is a nominee, then (a) the name and address of the beneficial owner of such Note or Notes shall also be registered in such register as an owner and holder thereof and (b) at any such beneficial owner’s option, either such beneficial owner or its nominee may execute any amendment, waiver or consent pursuant to this Agreement. Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary. The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes.

Section 13.2. Transfer and Exchange of Notes.

(a) Subject to clause (b) below, any registered holder of a Note or a Purchaser (an “Assigning Party”) may assign to one or more assignees (other than a Competitor) (an “Assignee”) all or a portion of its rights and obligations under its Note and/or under this Agreement.

(b) Any such assignment or transfer shall be subject to the following conditions: (i) the Assigning Party shall deliver to the Company a written instrument of transfer duly executed by the Assigning Party or such Assigning Party’s attorney duly authorized in writing and accompanied by the relevant name, address and other information for notices of each transferee of such Note or part thereof; (ii) the Assignee shall have made the representations set forth in Section 6.2 to the Company; and (iii) an exemption from registration of the Notes under the Securities Act is available.

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(c) Upon satisfaction of the conditions set forth in clause (b) above and surrender of any Note to the Company at the address and to the attention of the designated officer (all as specified in Section 18(iii)), for registration of transfer or exchange (and in the case of a surrender for registration of transfer accompanied by a written instrument of transfer duly executed by the registered holder of such Note or such holder’s attorney duly authorized in writing and accompanied by the relevant name, address and other information for notices of each transferee of such Note or part thereof), within 10 Business Days thereafter, the Company shall execute and deliver, at the Company’s expense (except as provided below), one or more new Notes of the same Series (and of the same tranche if such Series has separate tranches) (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note. Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of Schedule 1 or attached to the applicable Supplement with respect to any Additional Notes. Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon. The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes. Notes shall not be transferred in denominations of less than $100,000, provided if necessary to enable the registration of transfer by a holder of its entire holding of Notes of a tranche, one Note of such tranche may be in a denomination of less than $100,000. Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representations set forth in Section 6.2.

Section 13.3. Replacement of Notes. Upon receipt by the Company at the address and to the attention of the designated officer (all as specified in Section 18(iii)) of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation in the form of a lost note affidavit), and

(a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser or Additional Purchaser or another holder of a Note with a minimum net worth of at least $50,000,000 or a Qualified Institutional Buyer, such Person’s own unsecured agreement of indemnity shall be deemed to be satisfactory), or

(b) in the case of mutilation, upon surrender and cancellation thereof,

within 10 Business Days thereafter, the Company at its own expense shall execute and deliver, in lieu thereof, a new Note of the same Series (and of the same tranche if such Series has separate tranches), dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

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SECTION 14.

PAYMENTS ON NOTES.

Section 14.1. Place of Payment. Subject to Section 14.2, payments of principal, Make-Whole Amount, if any, and interest becoming due and payable on the Notes shall be made in New York, New York at the principal office of the Investment Adviser in such jurisdiction located on the date hereof at 10 Hudson Yards, 41st Floor, New York, NY 10001. The Company (or its agent or sub-agent) may at any time, by notice to each holder of a Note, change the place of payment of the Notes so long as such place of payment shall be either the principal office of the Company in such jurisdiction or the principal office of a bank or trust company in such jurisdiction.

Section 14.2. Payment by Wire Transfer. So long as any Purchaser or Additional Purchaser or its nominee shall be the holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the contrary, the Company (or its agent or sub-agent) will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, interest and all other amounts becoming due hereunder by the method and at the address specified for such purpose below such Purchaser’s name in or, in the case of any Additional Purchaser Schedule attached to any Supplement to which such Additional Purchaser is a party, or by such other method or at such other address as such Purchaser or Additional Purchaser shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, such Purchaser or Additional Purchaser shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Company pursuant to Section 14.1. Prior to any sale or other disposition of any Note held by a Purchaser or Additional Purchaser or such Person’s nominee, such Person will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 13.2. The Company will afford the benefits of this Section 14.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by a Purchaser or Additional Purchaser under this Agreement or any Supplement and that has made the same agreement relating to such Note as the Purchasers have made in this Section 14.2.

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Section 14.3. Tax Information. By acceptance of any Note, the holder of such Note agrees that such holder will with reasonable promptness duly complete and deliver to the Company, or to such other Person as may be reasonably requested by the Company, on or before the date on which such holder obtains a Note and from time to time (a) any forms, documents or certifications as may be reasonably required for the Company to satisfy any information reporting or withholding tax obligations with respect to any payments under this Agreement, or to determine the amount (if any) to deduct and withhold from any such payment made to such holder, and (b) (x) in the case of any such holder that is a United States Person, such holder’s United States tax identification number or other Forms reasonably requested by the Company necessary to establish such holder’s status as a United States Person under FATCA and as may otherwise be necessary for the Company to comply with its obligations under FATCA and (y) in the case of any such holder that is not a United States Person, such documentation prescribed by applicable law (including as prescribed by section 1471(b)(3)(C)(i) of the Code) and such additional documentation as may be necessary for the Company to comply with its obligations under FATCA and to determine that such holder has complied with such holder’s obligations under FATCA or to determine the amount (if any) to deduct and withhold from any such payment made to such holder. Without limiting the generality of the forgoing, except as otherwise required by applicable law, in the case of a holder (i) claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (ii) claiming exemption from withholding under an applicable treaty or (iii) claiming treatment as income effectively connected with a United States business under Section 882 of the Code, the Company agrees that it will not withhold from any applicable payment to be made to a holder of a Note that is not a United States Person any U.S. federal withholding Tax so long as such holder shall have delivered to the Company (in such number of copies as shall be reasonably requested) on or before the date on which such holder becomes a holder under this Agreement (and from time to time thereafter upon the reasonable request of the Company), (i) duly completed and duly executed copies of the applicable IRS Form W-8 (and any documentation prescribed by applicable law) claiming a complete exemption from U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Company to determine that no withholding is required, and (ii) in the case of a holder claiming benefits under Section 881(c) of the Code, the applicable “U.S. Tax Compliance Certificate” substantially in the form attached as Schedule 14.3, in each case correctly completed and duly executed. Each holder of a Note agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification promptly. To the extent that amounts are deducted or withheld in accordance with this Section 14.3 and timely paid over to the proper taxing authority, such deducted or withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made.

SECTION 15.

EXPENSES, ETC.

Section 15.1. Transaction Expenses. Whether or not the transactions contemplated hereby are consummated, the Company will pay all reasonable and documented out-of-pocket costs and expenses (but limited, in the case of attorneys’ fees and expenses, to the reasonable and documented out-of-pocket attorneys’ fees of one special counsel for, collectively, the Purchasers (and Additional Purchasers under any Supplement) and each other holder of a Note, taken as a whole, and, if reasonably required by the Required Holders, one local counsel in each relevant jurisdiction) incurred by the Purchasers, the Additional Purchasers, if any, and each other holder of a Note in connection with such transactions and in connection with any amendments, waivers or consents under or in respect of this Agreement (including any Supplement), any Subsidiary Guaranty or the Notes (whether or not such amendment, waiver or consent becomes effective), including: (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement, any Subsidiary Guaranty or the Notes or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement (including any Supplement), any Subsidiary Guaranty or the Notes, or by reason of being a holder of any Note, (b) the costs and expenses, including financial advisors’ fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby and by the Notes and any Subsidiary Guaranty and (c) the costs and expenses incurred in connection with the initial filing of this Agreement and all related documents and financial information with the SVO provided, that such costs and expenses under this clause (c) shall not exceed $3,500. If required by the NAIC, the Company shall obtain and maintain at its own cost and expense a Legal Entity Identifier (LEI).

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The Company will pay, and will save each Purchaser and each other holder of a Note harmless from, (i) all claims in respect of any fees, costs or expenses, if any, of brokers and finders (other than those, if any, retained by a Purchaser or other holder in connection with its purchase of the Notes), (ii) any and all wire transfer fees that any bank or other financial institution deducts from any payment under such Note to such holder or otherwise charges to a holder of a Note with respect to a payment under such Note and (iii) any judgment, liability, claim, order, decree, fine, penalty, cost, fee, expense (but limited, in the case of attorneys’ fees and expenses, to the reasonable and documented out-of-pocket attorneys’ fees of one special counsel for, collectively, the Purchasers, the Additional Purchasers, if any, and each other holder of a Note, taken as a whole) or obligation resulting from the consummation of the transactions contemplated hereby, including the use of the proceeds of the Notes by the Company, in each case, other than any such judgment, liability, claim, order, decree, fine, penalty, cost, fee, expense (including reasonable attorneys’ fees and expenses) or obligation that resulted from (x) the bad faith, gross negligence or willful misconduct or breach of this Agreement or any Note by such Purchaser or such holder of a Note or (y) a claim between a Purchaser and an Additional Purchaser, or holder of a Note, on the one hand, and any other Purchaser or holder of a Note, on the other hand (other than claims arising out of any act or omission by the Company and/or its Affiliates).

Section 15.2. Certain Taxes. The Company agrees to pay all stamp, documentary or similar taxes or fees which may be payable in respect of the execution and delivery or the enforcement of this Agreement or any Subsidiary Guaranty or the execution and delivery (but not the transfer) or the enforcement of any of the Notes in the United States or any other jurisdiction where the Company or any Subsidiary Guarantor has assets or of any amendment of, or waiver or consent under or with respect to, this Agreement or any Subsidiary Guaranty or of any of the Notes, and to pay any value added tax due and payable in respect of reimbursement of costs and expenses by the Company pursuant to this Section 15, and will save each holder of a Note to the extent permitted by applicable law harmless against any loss or liability resulting from nonpayment or delay in payment of any such tax or fee required to be paid by the Company hereunder.

Section 15.3. Survival. The obligations of the Company under this Section 15 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement, any Supplement, any Subsidiary Guaranty or the Notes, and the termination of this Agreement.

SECTION 16.

SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

All representations and warranties contained herein or in any Supplement shall survive the execution and delivery of this Agreement, such Supplement and the Notes, the purchase or transfer by any Purchaser or any Additional Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of such Purchaser or any Additional Purchaser or any other holder of a Note. All statements contained in any certificate or other instrument delivered by or on behalf of the Company pursuant to this Agreement or any Supplement shall be deemed representations and warranties of the Company under this Agreement. Subject to the preceding sentence, this Agreement, the Notes and any Subsidiary Guaranties embody the entire agreement and understanding between each Purchaser and Additional Purchaser and the Company and supersede all prior agreements and understandings relating to the subject matter hereof.

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SECTION 17.

AMENDMENT AND WAIVER.

Section 17.1. Requirements.

(a) Amendments. This Agreement (including any Supplement) and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), only with the written consent of the Company and the Required Holders, except that:

(i) no amendment or waiver of any of Sections 1, 2, 3, 4, 5, 6 or 20 hereof, or any defined term (as it is used therein), or the corresponding provision of any Supplement, or any defined term (as it is used in any such Section or such corresponding provision of any Supplement) will be effective as to any Purchaser or Additional Purchaser unless consented to by such Purchaser or Additional Purchaser in writing; and

(ii) no amendment or waiver may, without the written consent of each Purchaser, Additional Purchaser and the holder of each Note at the time outstanding, (i) subject to Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of (x) interest on the Notes or (y) the Make-Whole Amount, (ii) change the percentage of the principal amount of the Notes the holders of which are required to consent to any amendment or waiver, or (iii) amend any of Sections 8 (except as set forth in the second sentence of Section 8.2 (or such corresponding provision of any Supplement)), 11(a), 11(b), 12, 17 or 20.

(b) Supplements. Notwithstanding anything to the contrary contained herein, the Company may enter into any Supplement providing for the issuance of one or more Series of Additional Notes consistent with, and in compliance with, Sections 2.2 and 4.17 hereof without obtaining the consent of any holder of any other Series of Notes.

Section 17.2. Solicitation of Holders of Notes.

(a) Solicitation. The Company will provide each holder of a Note with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof, any Supplement or of the Notes or any Subsidiary Guaranty. The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to this Section 17 or any Subsidiary Guaranty to each holder of a Note promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes.

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(b) Payment. The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security or provide other credit support, to any holder of a Note as consideration for or as an inducement to the entering into by such holder of any waiver or amendment of any of the terms and provisions hereof, any Supplement or of any Subsidiary Guaranty or any Note unless such remuneration is concurrently paid, or security is concurrently granted or other credit support concurrently provided, on the same terms, ratably to each holder of a Note even if such holder did not consent to such waiver or amendment.

(c) Consent in Contemplation of Transfer. Any consent given pursuant to this Section 17 or any Subsidiary Guaranty by a holder of a Note that has transferred or has agreed to transfer its Note to (i) the Company, (ii) any Subsidiary or any other Affiliate or (iii) any other Person in connection with, or in anticipation of, such other Person acquiring, making a tender offer for or merging with the Company and/or any of its Affiliates, in each case in connection with such consent, shall be void and of no force or effect except solely as to such holder, and any amendments effected or waivers granted or to be effected or granted that would not have been or would not be so effected or granted but for such consent (and the consents of all other holders of Notes that were acquired under the same or similar conditions) shall be void and of no force or effect except solely as to such holder.

Section 17.3. Binding Effect, Etc. Any amendment or waiver consented to as provided in this Section 17 or any Subsidiary Guaranty applies equally to all holders of Notes and is binding upon them and upon each future holder of any Note and upon the Company without regard to whether such Note has been marked to indicate such amendment or waiver. No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon. No course of dealing between the Company and any holder of a Note and no delay in exercising any rights hereunder or under any Note or Subsidiary Guaranty shall operate as a waiver of any rights of any holder of such Note.

Section 17.4. Notes Held by Company, Etc. Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement, any Subsidiary Guaranty or the Notes, or have directed the taking of any action provided herein or in any Subsidiary Guaranty or the Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall be deemed not to be outstanding.

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SECTION 18.

NOTICES.

Except to the extent otherwise provided in Section 7.4, all notices and communications provided for hereunder shall be in writing and sent (a) by telecopy if the sender on the same day sends a confirming copy of such notice by an internationally recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by an internationally recognized overnight delivery service (charges prepaid). Notwithstanding the foregoing, any such notice may be sent by email, provided that, upon written request of any holder to receive paper copies of such notices or communications, the Company will promptly deliver such paper copies to such holder:

(i) if to any Purchaser or its nominee, to such Purchaser or nominee at the address specified for such communications in the Purchaser Schedule, or at such other address as such Purchaser or nominee shall have specified to the Company in writing,

(ii) if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Company in writing, or

(iii) if to the Company, to the Company at its address set forth at the beginning hereof to the attention of George Hawley, Secretary, or at such other address as the Company shall have specified to the holder of each Note in writing, or

(iv) if to an Additional Purchaser or such Additional Purchaser’s nominee, to such Additional Purchaser or such Additional Purchaser’s nominee at the address specified for such communications in Schedule A to any Supplement, or at such other address as such Additional Purchaser or such Additional Purchaser’s nominee shall have specified to the Company in writing.

Notices under this Section 18 will be deemed given only when actually received. Notwithstanding anything to the contrary contained herein, any notice to be given by the Company (other than an officer’s certificate) may be delivered by an agent or sub-agent of the Company.

SECTION 19.

REPRODUCTION OF DOCUMENTS.

This Agreement and all documents relating thereto, including (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by any Purchaser at such Closing (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to any Purchaser, may be reproduced by such Purchaser by any photographic, photostatic, electronic, digital, or other similar process and such Purchaser may destroy any original document so reproduced. The Company agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by such Purchaser in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. This Section 19 shall not prohibit the Company or any other holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.

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SECTION 20.

CONFIDENTIAL INFORMATION.

For the purposes of this Section 20, “Confidential Information” means information delivered to any Purchaser or Additional Purchaser by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement or any Supplement that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified when received by such Purchaser or Additional Purchaser as being confidential information of the Company or such Subsidiary, provided that such term does not include information that (a) was publicly known or otherwise known to such Purchaser or Additional Purchaser prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by such Purchaser or Additional Purchaser or any Person acting on such Purchaser’s or Additional Purchaser’s behalf, (c) otherwise becomes known to such Purchaser or Additional Purchaser other than through disclosure by the Company or any Subsidiary or (d) constitutes financial statements delivered to such Purchaser Additional Purchaser under Section 7.1 that are otherwise publicly available. Each Purchaser and Additional Purchaser will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by such Purchaser or Additional Purchaser in good faith to protect confidential information of third parties delivered to such Purchaser and Additional Purchaser, provided that such Purchaser or Additional Purchaser may deliver or disclose Confidential Information to (i) its Affiliates and its and their respective directors, officers, employees (legal and contractual), agents, attorneys, trustees and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by its Notes), (ii) its auditors, financial advisors, other professional advisors, consultants and investors or partners in Related Funds that are Purchasers, Additional Purchasers or holders of the Notes, who agree, in each case, to hold confidential the Confidential Information substantially in accordance with this Section 20, (iii) any other holder of any Note, (iv) any Institutional Investor to which it sells or offers to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by this Section 20), (v) any Person from which it offers to purchase any Security of the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by this Section 20), (vi) any federal or state regulatory authority having jurisdiction over such Purchaser, (vii) the NAIC or the SVO or, in each case, any similar organization, or any nationally recognized rating agency that requires access to information about such Purchaser’s or Additional Purchaser’s investment portfolio, or (viii) any other Person to which such delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to such Purchaser or Additional Purchaser, (x) in response to any subpoena or other legal process, (y) in connection with any litigation to which such Purchaser or Additional Purchaser is a party or (z) if an Event of Default has occurred and is continuing, to the extent such Purchaser or Additional Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under such Purchaser’s or Additional Purchaser’s Notes or this Agreement or any Subsidiary Guaranty. Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement or any Subsidiary Guaranty. On reasonable request by the Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Company embodying this Section 20.

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In the event that as a condition to receiving access to information relating to the Company or its Subsidiaries in connection with the transactions contemplated by or otherwise pursuant to this Agreement, any Purchaser or holder of a Note is required to agree to a confidentiality undertaking (whether through IntraLinks, another secure website, a secure virtual workspace or otherwise) which is different from this Section 20, this Section 20 shall not be amended thereby and, as between such Purchaser or such holder and the Company, this Section 20 shall supersede any such other confidentiality undertaking.

SECTION 21.

SUBSTITUTION OF PURCHASER.

Each Purchaser or Additional Purchaser shall have the right to substitute any one of its Affiliates or another Purchaser or Additional Purchaser or any one of such other Purchaser’s or Additional Purchaser’s Affiliates (other than any Competitor) (a “Substitute Purchaser”) as the purchaser of the Notes that it has agreed to purchase hereunder, by written notice to the Company, which notice shall be signed by both such Purchaser or Additional Purchaser and such Substitute Purchaser, shall contain such Substitute Purchaser’s agreement to be bound by this Agreement and shall contain a confirmation by such Substitute Purchaser of the accuracy with respect to it of the representations set forth in Section 6. Upon receipt of such notice, any reference to such Purchaser in this Agreement (other than in this Section 21) or any Additional Purchaser in any Supplement, shall be deemed to refer to such Substitute Purchaser in lieu of such original Purchaser or Additional Purchaser, as the case may be. In the event that such Substitute Purchaser is so substituted as a Purchaser hereunder or any Additional Purchaser in any Supplement and such Substitute Purchaser thereafter transfers to such original Purchaser or Additional Purchaser all of the Notes then held by such Substitute Purchaser, upon receipt by the Company of notice of such transfer, any reference to such Substitute Purchaser as a “Purchaser” in this Agreement (other than in this Section 21), shall no longer be deemed to refer to such Substitute Purchaser, but shall refer to such original Purchaser or Additional Purchaser, as the case may be, and such original Purchaser or Additional Purchaser shall again have all the rights of an original holder of the Notes under this Agreement.

SECTION 22.

MISCELLANEOUS.

Section 22.1. Successors and Assigns. All covenants and other agreements contained in this Agreement (including all covenants and other agreements contained in any Supplement) by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including any subsequent holder of a Note) whether so expressed or not, except that, subject to Section 10.2, the Company may not assign or otherwise transfer any of its rights or obligations hereunder or under the Notes without the prior written consent of each holder. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto and their respective successors and assigns permitted hereby) any legal or equitable right, remedy or claim under or by reason of this Agreement.

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Section 22.2. Accounting Terms. (a) All accounting terms used herein which are not expressly defined in this Agreement have the meanings respectively given to them in accordance with GAAP. Except as otherwise specifically provided herein, (i) all computations made pursuant to this Agreement shall be made in accordance with GAAP, and (ii) all financial statements shall be prepared in accordance with GAAP. For purposes of determining compliance with this Agreement (including Section 9, Section 10 and the definition of “Indebtedness”), any election by the Company to measure any financial liability using fair value (as permitted by Financial Accounting Standards Board Accounting Standards Codification Topic No. 825-10-25 – Fair Value Option, International Accounting Standard 39 – Financial Instruments: Recognition and Measurement or any similar accounting standard) shall be disregarded and such determination shall be made as if such election had not been made.

(b) Notwithstanding any other provision contained herein, solely with respect to any change in GAAP after December 15, 2018 with respect to the accounting for leases as either operating leases or capital leases, any lease that is not (or would not be) a capital lease under GAAP as in effect on December 15, 2018 shall not be treated as a capital lease, and any lease that would be treated as a capital lease under GAAP as in effect on December 15, 2018 shall continue to be treated as a capital lease, hereunder, notwithstanding such change in GAAP after December 15, 2018, and all determinations of Capital Leases shall be made consistently therewith (i.e., ignoring any such changes in GAAP after December 15, 2018).

Section 22.3. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.

Section 22.4. Construction, Etc. Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant. Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.

Defined terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument, law, statute, rule, regulation, form or other document herein shall be construed as referring to such agreement, instrument, law, statute, rule, regulation, form or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein) and, for purposes of the Notes, shall also include any such notes issued in substitution therefor pursuant to Section 13, (b) subject to Section 22.1, any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Sections and Schedules shall be construed to refer to Sections of, and Schedules to, this Agreement, and (e) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time.

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Section 22.5. Counterparts; Electronic Contracting. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto. The parties agree to electronic contracting and signatures with respect to this Agreement and the other documents (other than the Notes). Delivery of an electronic signature to, or a signed copy of, this Agreement and such other documents (other than the Notes) by facsimile, email or other electronic transmission shall be fully binding on the parties to the same extent as the delivery of the signed originals and shall be admissible into evidence for all purposes. The words “execution,” “execute”, “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Agreement and the other documents (other than the Notes) shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Company, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act. Notwithstanding the foregoing, if any Purchaser or Additional Purchaser shall request manually signed counterpart signatures to any document, the Company hereby agrees to use its reasonable endeavors to provide such manually signed signature pages as soon as reasonably practicable (but in any event within 30 days of such request or such longer period as the requesting Purchaser or Additional Purchaser and the Company may mutually agree).

Section 22.6. Governing Law. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

Section 22.7. Jurisdiction and Process; Waiver of Jury Trial. (a) The Company and each Purchaser and Additional Purchaser irrevocably submits to the non-exclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or relating to this Agreement or the Notes. To the fullest extent permitted by applicable law, the Company and each Purchaser and Additional Purchaser irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

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(b) The Company and each Purchaser and Additional Purchaser agrees, to the fullest extent permitted by applicable law, that a final judgment in any suit, action or proceeding of the nature referred to in Section 22.7(a) brought in any such court shall be conclusive and binding upon it subject to rights of appeal, as the case may be, and may be enforced in the courts of the United States of America or the State of New York (or any other courts to the jurisdiction of which it or any of its assets is or may be subject) by a suit upon such judgment.

(c) The Company and each Purchaser and Additional Purchaser consents to process being served by or on behalf of any holder of Notes in any suit, action or proceeding of the nature referred to in Section 22.7(a) by mailing a copy thereof by registered, certified, priority or express mail (or any substantially similar form of mail), postage prepaid, return receipt or delivery confirmation requested, to it at its address specified in Section 18 or at such other address of which such holder shall then have been notified pursuant to said Section. The Company and each Purchaser and Additional Purchaser agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it. Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.

(d) Nothing in this Section 22.7 shall affect the right of any holder of a Note to serve process in any manner permitted by law, or limit any right that the holders of any of the Notes may have to bring proceedings against the Company in the courts of any appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

(e) THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT, THE NOTES OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THEREWITH.

* * * * *

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If you are in agreement with the foregoing, please sign the form of agreement on a counterpart of this Agreement and return it to the Company, whereupon this Agreement shall become a binding agreement between you and the Company.


Very truly yours,

CRESCENT CAPITAL BDC, INC.

By:		/s/ Gerhard Lombard
		Chief Financial Officer

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This Agreement is hereby

accepted and agreed to as

of the date hereof.


SUN LIFE ASSURANCE COMPANY OF CANADA

By:		/s/ Alec Svoboda
Name:		Alec Svoboda
Title:		Managing Director, Private Fixed Income

By:		/s/ David Fletcher
Name:		David Fletcher
Title:		Managing Director, Private Fixed Income

SUN LIFE FINANCIAL TRUST INC.

By:		Sun Life Capital Management (Canada) Inc., its Investment Adviser

By:		/s/ Alec Svoboda
Name:		Alec Svoboda
Title:		Managing Director, Private Fixed Income

By:		/s/ David Fletcher
Name:		David Fletcher
Title:		Managing Director, Private Fixed Income

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DEFINED TERMS

As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:

“Additional Financial Covenant” is defined in Section 10.7.

“Additional Notes” is defined in Section 2.2.

“Additional Purchasers” means purchasers of Additional Notes.

“Adjusted Interest Rate” is defined in Section 1.3(d).

“Affiliate” means, at any time, and with respect to any Person, any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person. Anything herein to the contrary notwithstanding, none of the following shall be considered an “Affiliate” of the Company: any Person that constitutes an Investment held by the Company, any Excluded Subsidiary or any Tax Blocker Subsidiary in the ordinary course of business. Unless the context otherwise clearly requires, any reference to an “Affiliate” is a reference to an Affiliate of the Company.

“Ally Loan Agreement” means that certain Loan and Security Agreement, dated August 20, 2019, by and among the Company, as the borrower, and certain banks and other financial intuitions party thereto from time to time as lenders and Ally Bank, as administrative agent, arranger and lender, as the same may be amended, restated, amended and restated, supplemented, refinanced, substituted or otherwise modified from time to time.

“Agreement” means this Master Note Purchase Agreement, including all Supplements, Schedules and Exhibits attached to this Agreement (including all Schedules and Exhibits attached to any Supplement) as it may be amended, restated, supplemented or otherwise modified from time to time.

“Anti-Corruption Laws” means any law or regulation in a U.S. or any non-U.S. jurisdiction regarding bribery or any other corrupt activity, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010 and any similar provisions of the Criminal Code (Canada).

“Anti-Money Laundering Laws” means any law or regulation in a U.S. or any non-U.S. jurisdiction regarding money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes, including the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as the Bank Secrecy Act) and the USA PATRIOT Act or any similar provisions of the Criminal Code (Canada).

SCHEDULE A

(to Master Note Purchase Agreement)

“Asset Coverage Ratio” means ratio, determined on a consolidated basis for Company and its Subsidiaries, without duplication, of (a) the value of total assets of the Company and its Subsidiaries less all liabilities and Indebtedness not represented by senior securities to (b) the aggregate amount of senior securities representing Indebtedness of Company and its Subsidiaries (including any Indebtedness outstanding under this Agreement), in each case as determined pursuant to the 1940 Act and any orders of the Securities and Exchange Commission issued to or with respect to Company thereunder, including any exemptive relief granted by the Securities and Exchange Commission with respect to the Indebtedness of any Person.

“Below Investment Grade Event” is defined in Section 1.3(e).

“Blocked Person” means (a) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by OFAC, (b) a Person, entity, organization, country or regime that is blocked or a target of sanctions that have been imposed under U.S. Economic Sanctions Laws or (c) a Person that is an agent, department or instrumentality of, or is otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, any Person, entity, organization, country or regime described in clause (a) or (b).

“Business Day” means (a) for the purposes of Section 8.6 only, any day other than a Saturday, a Sunday or a day on which commercial banks in New York, New York are required or authorized to be closed, and (b) for the purposes of any other provision of this Agreement, any day other than a Saturday, a Sunday or a day on which commercial banks in New York, New York are required or authorized to be closed.

“Canada Blocked Person” means (i) a “terrorist group” as defined for the purposes of Part II.1 of the Criminal Code (Canada), or (ii) a Person identified in or pursuant to (w) Part II.1 of the Criminal Code (Canada), or (x) the Proceeds of Crime (Money Laundering) and Terrorist Finance Act, or (y) the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law), or (z) regulations or orders promulgated pursuant to the Special Economic Measures Act (Canada), the United Nations Act (Canada), or the Freezing Assets of Corrupt Foreign Officials Act (Canada), in any case pursuant to this clause (ii) as a Person in respect of whose property or benefit a holder of Notes would be prohibited from entering into or facilitating a related financial transaction.

“Canadian Economic Sanctions Laws” means those laws, including enabling legislation, orders-in-council or other regulations administered and enforced by Canada or a political subdivision of Canada pursuant to which economic sanctions have been imposed on any Person, entity, organization, country or regime, including Part II.1 of the Criminal Code (Canada), the Special Economic Measures Act (Canada), the Proceeds of Crime (Money Laundering) and Terrorist Finance Act, the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law), the United Nations Act (Canada), the Export and Import Permits Act (Canada), and the Freezing Assets of Corrupt Foreign Officials Act (Canada), and including all regulations promulgated under any of the foregoing, or any other similar sanctions program or action.

“Capital Lease” means, at any time, a lease with respect to which the lessee is required concurrently to recognize the acquisition of an asset and the incurrence of a liability in accordance with, subject to Section 22.2(b), GAAP.

A-2

“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with, subject to Section 22.2(b), GAAP.

“Closing” is defined in Section 3.

“Code” means the Internal Revenue Code of 1986 and the rules and regulations promulgated thereunder from time to time.

“Company” is defined in the first paragraph of this Agreement.

“Company Credit Facilities” means (i) the Ally Loan Agreement, (ii) the SPV Credit Facility and (iii) the Internotes.

“Competitor” means (a) any entity that has elected to be regulated as a “business development company” under the Investment Company Act; (b) any Person who is not an Affiliate of the Company or any of its Subsidiaries and who engages (or whose Affiliate engages), as its primary business, in (i) the same or similar business as a material business of the Company or any of its subsidiaries or (ii) the business of originating loans to middle market companies and such Person is not a bank or an insurance company; or (c) any Affiliate of any of the foregoing; provided that:

(i) the provision of investment advisory services by a Person to a Plan which is sponsored, maintained, contributed to or required to be contributed to by a Person which would otherwise be a Competitor shall not in any event cause the Person providing such services to be deemed to be a Competitor, provided that such Person providing such services has established and maintains procedures which will prevent Confidential Information supplied to such Person from being transmitted or otherwise made available to such Plan or to such Person which would otherwise be a Competitor; and

(ii) in no event shall an Institutional Investor be deemed a Competitor if such Institutional Investor is a “pension plan” (as defined in Section 3(2) of ERISA) sponsored, maintained, contributed to or required to be contributed to by a Person which would otherwise be a Competitor but which is a regular investor in privately placed Securities and such pension plan has established and maintains procedures that will prevent Confidential Information supplied to such pension plan by the Company from being transmitted or otherwise made available to such plan sponsor or participating or contributing employer which would otherwise be a Competitor; and

(iii) in no event shall an Institutional Investor listed on Schedule 7.5, its Affiliates or Related Funds, whose investors are comprised of the same, be deemed a Competitor so long as such Institutional Investor, Affiliate or Related Fund is not a “business development company”.

A-3

“Confidential Information” is defined in Section 20.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise; and the terms “Controlled” and “Controlling” shall have meanings correlative to the foregoing.

“Controlled Entity” means any of the Subsidiaries of the Company and any of their or the Company’s respective Controlled Affiliates.

“Default” means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.

“Default Rate” means with respect to any Note of any Series or tranche, that rate of interest per annum that is the greater of (a) 2.00% per annum above the rate of interest on the Notes then in effect for such Series or tranche or (b) 2.00% over the rate of interest publicly announced by Ally Bank in New York, New York as its “base” or “prime” rate.

“Disclosure Documents” is defined in Section 5.3.

“Dollars” or “$” refers to lawful money of the United States of America.

“EDGAR” means the SEC’s Electronic Data Gathering, Analysis and Retrieval System or any successor SEC electronic filing system for such purposes.

“Environmental Laws” means any applicable federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to Hazardous Materials.

“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest. As used in this Agreement, “Equity Interests” shall not include convertible debt unless and until such debt has been converted to capital stock.

“ERISA” means the Employee Retirement Income Security Act of 1974 and the rules and regulations promulgated thereunder from time to time in effect.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that is treated as a single employer together with the Company under section 414(b) or (c) of the Code, or solely with respect to section 412 of the Code, section 414(m) or (o) of the Code.

“Event of Default” is defined in Section 11.

A-4

“Exchange Act” means the Securities Exchange Act of 1934, and the rules and regulations promulgated thereunder from time to time in effect.

“Excluded Subsidiaries” means, collectively, (a) any SPE Subsidiary, (b) any bankruptcy remote special purpose vehicle, (c) any Subsidiary of any of the foregoing or (d) any Person that is not, under GAAP, consolidated on the financial statements of the Company and its Subsidiaries.

“FATCA” means (a) sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), together with any current or future regulations or official interpretations thereof, (b) any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the United States of America and any other jurisdiction, which (in either case) facilitates the implementation of the foregoing clause (a), and (c) any agreements entered into pursuant to section 1471(b)(1) of the Code.

“Notes” means the Series 2020A Notes and any other Series or tranche of Additional Notes with a fixed rate of interest.

“Form 10-K” is defined in Section 7.1(b).

“Form 10-Q” is defined in Section 7.1(a).

“GAAP” means (a) generally accepted accounting principles as in effect from time to time in the United States of America and (b) for purposes of Section 9.6, with respect to any Subsidiary, generally accepted accounting principles (including International Financial Reporting Standards, as applicable) as in effect from time to time in the jurisdiction of organization of such Subsidiary.

“Governmental Authority” means:

(a) the government of:

(i) the United States of America, Canada or any state, province or other political subdivision thereof, or

(ii) any other jurisdiction in which the Company or any Subsidiary conducts all or any part of its business, or which asserts jurisdiction over any properties of the Company or any Subsidiary, or

(b) any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.

“Governmental Official” means any governmental official or employee, employee of any government-owned or government-controlled entity, political party, any official of a political party, candidate for political office, official of any public international organization or anyone else acting in an official capacity.

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“Guaranty” means, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including obligations incurred through an agreement, contingent or otherwise, by such Person:

(a) to purchase such indebtedness or obligation or any property constituting security therefor;

(b) to advance or supply funds (i) for the purchase or payment of such indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such indebtedness or obligation;

(c) to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such indebtedness or obligation of the ability of any other Person to make payment of the indebtedness or obligation; or

(d) otherwise to assure the owner of such indebtedness or obligation against loss in respect thereof;

provided that the term “Guaranty” shall not include (i) endorsements for collection or deposit in the ordinary course of business or (ii) customary indemnification agreements entered into in the ordinary course of business, provided that such indemnification obligations are unsecured, such Person has determined that any liability thereunder is remote and such indemnification obligations are not the functional equivalent of the guaranty of a payment obligations of a primary obligor. In any computation of the indebtedness or other liabilities of the obligor under any Guaranty, the indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor.

“Hazardous Materials” means any and all pollutants, toxic or hazardous wastes or other substances that might pose a hazard to health and safety, the removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage or filtration of which is or shall be restricted, prohibited or penalized by any applicable law, including asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar restricted, prohibited or penalized substances.

“Hedging Agreement” means any interest rate protection agreement, foreign currency exchange protection agreement, commodity price protection agreement, or other interest, currency exchange rate or commodity hedging arrangement.

“holder” means, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Company pursuant to Section 13.1, provided, however, that if such Person is a nominee, then for the purposes of Sections 7, 12, 17.2 and 18 and any related definitions in this Schedule A, “holder” shall mean the beneficial owner of such Note whose name and address appears in such register.

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“Incorporated Covenant” is defined in Section 10.9.

“Indebtedness” with respect to any Person means, at any time, without duplication,

(a) its liabilities for borrowed money and its redemption obligations in respect of mandatorily redeemable Preferred Stock;

(b) its liabilities for the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business but including all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property);

(c) (i) all liabilities appearing on its balance sheet in accordance with GAAP in respect of Capital Leases and (ii) all liabilities which would appear on its balance sheet in accordance with GAAP in respect of Synthetic Leases assuming such Synthetic Leases were accounted for as Capital Leases;

(d) all liabilities for borrowed money secured by any Lien with respect to any property owned by such Person (whether or not it has assumed or otherwise become liable for such liabilities);

(e) all its liabilities in respect of letters of credit or instruments serving a similar function issued or accepted for its account by banks and other financial institutions (whether or not representing obligations for borrowed money);

(f) the aggregate Swap Termination Value of all Swap Contracts of such Person; and

(g) any Guaranty of such Person with respect to liabilities of a type described in any of clauses (a) through (f) hereof.

Indebtedness of any Person shall include all obligations of such Person of the character described in clauses (a) through (g) to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is deemed to be extinguished under GAAP. Notwithstanding the foregoing, “Indebtedness” shall not include (x) purchase price holdbacks arising in the ordinary course of business in respect of a portion of the purchase price of an asset or Investment to satisfy unperformed obligations of the seller of such asset or Investment, (y) a commitment arising in the ordinary course of business to make a future Portfolio Investment or fund the delayed draw or unfunded portion of any existing Portfolio Investment or (z) indebtedness of an Obligor on account of the sale by an Obligor of the first out tranche of any debt Portfolio Investment that is entitled to the benefit of a first lien that arises solely as an accounting matter under ASC 860, provided that such indebtedness (i) is non-recourse to the Company and its Subsidiaries and (ii) would not represent a claim against the Company or any of its Subsidiaries in a bankruptcy, insolvency or liquidation proceeding of the Company or its Subsidiaries, in each case in excess of the amount sold or purportedly sold.

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“INHAM Exemption” is defined in Section 6.2(e).

“Institutional Investor” means (a) any Purchaser of a Note, (b) any holder of a Note holding (together with one or more of its affiliates) more than 5% of the aggregate principal amount of the Notes then outstanding, (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form, and (d) any Related Fund of any holder of any Note.

“Interest Coverage Ratio” means, as of any date of determination, the ratio, determined on a consolidated basis for Company and its Subsidiaries, without duplication, of (a) Net Investment Income of the Company and its Subsidiaries for the four consecutive fiscal quarters then ended, plus interest expense to (b) interest expense for such period.

“Internotes” means all of the outstanding series of the Alcentra Capital InterNotes assumed by the Company pursuant to the Nineteenth Supplemental Indenture by and among the Company and U.S. Bank National Association, as the same may be amended, restated, amended and restated, supplemented, refinanced, substituted or otherwise modified from time to time.

“Investment” means, for any Person: (a) Equity Interests, bonds, notes, debentures or other securities of any other Person or any agreement to acquire any Equity Interests, bonds, notes, debentures or other securities of any other Person (including any “short sale” or any sale of any securities at a time when such securities are not owned by the Person entering into such sale); (b) deposits, advances, loans or other extensions of credit made to any other Person (including purchases of property from another Person subject to an understanding or agreement, contingent or otherwise, to resell such property to such Person); and (c) Hedging Agreements.

“Investment Advisor” means (x) CCAP Advisors, LLC or (y) an Affiliate thereof acceding to the role of Investment Advisor hereunder that (i) has demonstrated an ability to professionally and competently perform duties similar to those imposed upon the Investment Advisor, (ii) is legally qualified and has the capacity to act as Investment Advisor hereunder, (iii) immediately after such accession, employs principal personnel performing the duties required hereunder who are the same individuals who would have performed such duties had the accession not occurred and (iv) shall not, by such accession, cause a Change of Control to occur or the imposition of any entity level or withholding tax on the Company or on the payments to the holders of the Notes, or cause any other material adverse tax consequences to the Company.

“Investment Company Act” means the Investment Company Act of 1940.

“Investment Grade” means a rating of at least “BBB-” (or its equivalent) or higher by KBRA or its equivalent by any other NRSRO without giving effect to any credit watch.

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“Investment Policies” means, with respect to the Company, the investment objectives, policies, restrictions and limitations as the same may be changed, altered, expanded, amended, modified, terminated or restated from time to time.

“KBRA” means Kroll Bond Rating Agency, Inc. and its successors.

“Lien” means, with respect to any Person, any mortgage, lien, pledge, charge, security interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale or other title retention agreement or Capital Lease, upon or with respect to any property or asset of such Person (including in the case of stock, stockholder agreements, voting trust agreements and all similar arrangements but, in the case of Portfolio Investments that are equity securities, excluding customary drag-along, tag-along, right of first refusal and other similar rights in favor of other equity holders of the same issuer). For the avoidance of doubt, in the case of Investments that are loans or other debt obligations, customary restrictions on assignments or transfers thereof on customary and market based terms pursuant to the underlying documentation relating to such Investment shall not be deemed to be a “Lien.”

“Make-Whole Amount” is defined in Section 8.6.

“Material” means material in relation to the business, operations, affairs, financial condition, assets, or properties of the Company and its Subsidiaries taken as a whole.

“Material Adverse Effect” means a material adverse effect on (a) the business, operations, affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a whole (excluding in any case a decline in the net asset value of the Company or a change in general market conditions or values of the Portfolio Investments), (b) the ability of the Company to perform its obligations under this Agreement and the Notes, (c) the ability of any Subsidiary Guarantor to perform its obligations under its Subsidiary Guaranty, or (d) the validity or enforceability of this Agreement, the Notes or any Subsidiary Guaranty.

“Material Credit Facility” means, as to the Company and its Subsidiaries,

(a) the Ally Loan Agreement, including any renewals, extensions, amendments, supplements, restatements, replacements or refinancing thereof; and

(b) any other agreement(s) creating or evidencing indebtedness for borrowed money entered into on or after the date of the first Closing by the Company or any Subsidiary, or in respect of which the Company or any Subsidiary is an obligor or otherwise provides a guarantee or other credit support (“Credit Facility”), in a principal amount outstanding or available for borrowing equal to or greater than $25,000,000 (or the equivalent of such amount in the relevant currency of payment, determined as of the date of such Closing of such facility based on the exchange rate of such other currency); and if no Credit Facility or Credit Facilities equal or exceed such amounts, then the largest Credit Facility shall be deemed to be a Material Credit Facility.

“Maturity Date” is defined in the first paragraph of each Note.

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“MFL Financial Covenant” means any covenant (regardless of whether such provision is labeled or otherwise characterized as a covenant, a definition or a default) that requires the Company or any Subsidiary to (i) maintain any level of financial performance (including any specified level of net worth, total assets, cash flows or net income, however expressed), (ii) maintain any relationship of any component of its capital structure to any other component thereof (including the relationship of indebtedness, senior indebtedness or subordinated indebtedness to total capitalization or to net worth, however expressed), (iii) to maintain any measure of its ability to service its indebtedness (including exceeding any specified ratio of revenues, cash flow or income to interest expense, rental expense, capital expenditures and/or scheduled payments of indebtedness, however expressed) or (iv) not to exceed any maximum level of indebtedness, however expressed; provided, however, that, for the avoidance of doubt, no borrowing base requirement or covenants, however expressed, shall constitute an MFL Financial Covenant.

“More Favorable Covenant” is defined in Section 10.9.

“Most Favored Lender Notice” is defined in Section 10.9.

“Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is defined in section 4001(a)(3) of ERISA).

“NAIC” means the National Association of Insurance Commissioners.

“Nationally Recognized Statistical Rating Organization” or “NRSRO” means a rating organization designated from time to time by the SEC as being nationally recognized whose status has been confirmed by the SVO other than Egan Jones Rating Company and its successors.

“Net Investment Income” means, with respect to any period, net investment income determined in accordance with GAAP.

“Non-U.S. Plan” means any plan, fund or other similar program that (a) is established or maintained outside the United States of America by the Company or any Subsidiary primarily for the benefit of employees of the Company or one or more Subsidiaries residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and (b) is not subject to ERISA or the Code.

“Notes” is defined in Section 1.

“Obligor” means the Company and any Subsidiary Guarantor.

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

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“OFAC Sanctions Program” means any economic or trade sanction that OFAC is responsible for administering and enforcing. A list of OFAC Sanctions Programs may be found at http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx.

“Officer’s Certificate” means a certificate of a Senior Financial Officer or of any other officer of the Company whose responsibilities extend to the subject matter of such certificate.

“Passive SPE Subsidiary” means any passive holding company that has been designated as a SPE Subsidiary pursuant to, and in accordance with, clause (b) of the definition thereof.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA.

“Person” means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization, business entity or governmental authority.

“Permitted Equity Interests” means common stock of the Company that after its issuance is not subject to any agreement between the holder of such common stock and the Company where the Company is required to purchase, redeem, retire, acquire, cancel or terminate any such common stock.

“Permitted SBIC Guaranty” means a guarantee by the Company of Indebtedness of an SBIC Subsidiary on the SBA’s then applicable form; provided that the recourse to the Company thereunder is expressly limited only to periods after the occurrence of an event or condition that is an impermissible change in the control of such SBIC Subsidiary.

“Plan” means an “employee benefit plan” (as defined in section 3(3) of ERISA) subject to Title I of ERISA that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate may have any liability.

“Portfolio Investment” means any Investment held by the Company or one of its subsidiaries in their asset portfolio (and, for the avoidance of doubt, shall not include any Subsidiary of the Company).

“Preferred Stock” means any class of capital stock of a Person that is preferred over any other class of capital stock (or similar equity interests) of such Person as to the payment of dividends or the payment of any amount upon liquidation or dissolution of such Person.

“property” or “properties” means, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, choate or inchoate.

“PTE” is defined in Section 6.2(a).

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“Purchaser” or “Purchasers” means each of the purchasers that has executed and delivered this Agreement to the Company and such Purchaser’s successors and assigns (so long as any such assignment complies with Section 13.2) and any Substitute Purchaser (so long as any such substitution complies with Section 21), provided, however, that any Purchaser of a Note that ceases to be the registered holder or a beneficial owner (through a nominee) of such Note as the result of a transfer thereof pursuant to Section 13.2 or as the result of a substitution pursuant to Section 21 shall cease to be included within the meaning of “Purchaser” of such Note for the purposes of this Agreement upon such transfer.

“Purchaser Schedule” means the Purchaser Schedule to this Agreement listing the Purchasers of the Notes and including their notice and payment information.

“Qualified Institutional Buyer” means any Person who is a “qualified institutional buyer” within the meaning of such term as set forth in Rule 144A(a)(1) under the Securities Act.

“QPAM Exemption” is defined in Section 6.2(d).

“Rating” means a rating of the Notes issued by an NRSRO, which rating shall (a) specifically describe the Notes, including their interest rate, maturity and Private Placement Number and (b) in the event that such Rating is a “private letter rating,” (i) state that the Rating addresses the likelihood of payment of both the principal and interest of such Notes (which requirement shall be deemed satisfied if the evidence of such Rating is silent as to the likelihood of payment of both principal and interest and does not otherwise include any indication to the contrary), (ii) not include any prohibition against sharing such evidence with the SVO or any other regulatory authority having jurisdiction over the holders of the Notes, and (iii) include such other information relating to the Rating for the Notes as may be required from time to time by the SVO or any other regulatory authority having jurisdiction over the holders of the Notes.

“Related Fund” means, with respect to any holder of any Note, any fund or entity that (a) invests in Securities or bank loans, and (b) is advised or managed by such holder, the same investment advisor as such holder or by an affiliate of such holder or such investment advisor.

“Replacement Facilities” means at any time on or after all or any portion of any of the Company Credit Facilities is expired or terminated, one or more senior secured credit facilities or similar secured loan agreements to which the Company or the borrower under the Company Credit Facilities (or any other special purpose vehicle formed by the Company) is a party as borrower and pursuant to which substantially all of the Company’s assets are pledged, including any guarantees granted thereunder by the Company or such borrower.

“Required Holders” means at any time (a) (i) on or after the First Closing Date but prior to the Second Closing Date, the Purchasers of the Series 2020A Notes to be purchased at the second Closing and the holders of more than 50% in principal amount of the Series 2020A Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates) and (b) on or after the Second Closing Date, the holders of more than 50% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates); provided that in the event a Supplement has been entered into by the Company with Additional Purchasers thereunder, but the Additional Notes to be issued have not yet been so issued, “Required Holders” shall also include the Additional Purchasers scheduled to purchase such Additional Notes until such time as such Additional Notes are so purchased.

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“Responsible Officer” means any Senior Financial Officer and any other officer of the Company with responsibility for the administration of the relevant portion of this Agreement.

“RIC” means a person qualifying for treatment as a “regulated investment company” under the Code.

“SBA” means the United States Small Business Administration or any Governmental Authority succeeding to any or all of the functions thereof.

“SBIC Equity Commitment” means a commitment by the Company to make one or more capital contributions to an SBIC Subsidiary.

“SBIC Subsidiary” means any direct or indirect Subsidiary (including such Subsidiary’s general partner or managing entity to the extent that the only material asset of such general partner or managing entity is its equity interest in the SBIC Subsidiary) of the Company licensed as a small business investment company under the Small Business Investment Act of 1958, as amended (or that has applied for such a license and is actively pursuing the granting thereof by appropriate proceedings promptly instituted and diligently conducted) and which is designated by the Company (as provided below) as an SBIC Subsidiary, so long as

(a) no portion of the Indebtedness or any other obligations (contingent or otherwise) of such Subsidiary: (i) is Guaranteed by any Obligor (other than a Permitted SBIC Guaranty), (ii) is recourse to or obligates any Obligor in any way (other than in respect of any SBIC Equity Commitment or Permitted SBIC Guaranty), or (iii) subjects any property of any Obligor, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than Equity Interests in any SBIC Subsidiary pledged to secure such Indebtedness, and

(b) none of the Obligors has any obligation to maintain or preserve such Subsidiary’s financial condition or cause such entity to achieve certain levels of operating results. Any such designation by the Company shall be effected pursuant to a certificate of a Senior Financial Officer delivered to the holders of the Notes, which certificate shall include a statement to the effect that, to the best of such officer’s knowledge, such designation complied with the foregoing conditions.

“SEC” means the Securities and Exchange Commission of the United States of America.

“Securities” or “Security” shall have the meaning specified in section 2(1) of the Securities Act.

“Securities Act” means the Securities Act of 1933 and the rules and regulations promulgated thereunder from time to time in effect.

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“Senior Financial Officer” means the chief financial officer, principal accounting officer, treasurer or comptroller of the Company.

“Series” means any series of Notes issued pursuant to this Agreement or any Supplement hereto.

“Series 2020A Notes” is defined in Section 1.1 of this Agreement.

“Shareholders’ Equity” means, at any date, the amount determined on a consolidated basis, without duplication, in accordance with GAAP, of shareholders’ equity or net assets, as applicable, for the Company and its Subsidiaries at such date.

“Significant Subsidiary” means any Subsidiary which is a “significant subsidiary” (within the meaning specified in Rule 1-02(w) of Regulation S-X, promulgated under the Securities Act) of the Company, excluding any Subsidiary of the Company (a) which is a nonrecourse or limited recourse subsidiary, (b) which is a bankruptcy remote special purpose vehicle, or (c) any Excluded Subsidiary; provided that each Subsidiary Guarantor shall be deemed to be a “Significant Subsidiary.”

“Source” is defined in Section 6.2.

“SPE Subsidiary” means

(a) a direct or indirect Subsidiary of the Company to which the Company sells, conveys or otherwise transfer (whether directly or indirectly) Investments, which engages in no material activities other than in connection with the purchase, holding disposition or financing of such assets and which is designated by the Company (as provided below) as an SPE Subsidiary, so long as:

(i) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is Guaranteed by the Company (other than Guarantees in respect of Standard Securitization Undertakings), (ii) is recourse to or obligates the Company in any way other than pursuant to Standard Securitization Undertakings or (iii) subjects any property the Company, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings or any Guarantee thereof,

(ii) the Company does not have any material contract, agreement, arrangement or understanding with such Subsidiary other than on terms, taken as a whole, not materially less favorable to the Company than those that might be obtained at the time from Persons that are not Affiliates of the Company, other than fees payable in the ordinary course of business in connection with servicing receivables, and

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(iii) the Company does not have any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results; and

(b) any passive holding company that is designated by the Company (as provided below) as a SPE Subsidiary so long as:

(i) such passive holding company is the direct parent of a SPE Subsidiary referred to in clause (a);

(ii) such passive holding company engages in no activities and has no assets (other than in connection with the transfer of assets to and from a SPE Subsidiary referred to in clause (a), and its ownership of all of the Capital Stock of a SPE Subsidiary referred to in clause (a)) or liabilities;

(iii) the Company does not have any contract, agreement, arrangement or understanding with such passive holding company; and

(iv) the Company does not have any obligation to maintain or preserve such passive holding company’s financial condition or cause such entity to achieve certain levels of operating results.

Any designation of a SPE Subsidiary by the Company shall be effected pursuant to a certificate of a Responsible Officer delivered to the Administrative Agent, which certificate shall include a statement to the effect that, to the best of such Responsible Officer’ knowledge, such designation complied with each of the conditions set forth in clause (a) or (b) above, as applicable. Each Subsidiary of an SPE Subsidiary shall be deemed to be an SPE Subsidiary and shall comply with the foregoing requirements of this definition.

Notwithstanding anything to the contrary contained herein, Crescent Capital BDC Funding, LLC shall be deemed to be an SPE Subsidiary so long as (x) it complies with the foregoing requirements of this definition other than the requirement that it be a Subsidiary of the Company and (y) the Company has possession, directly or indirectly, of the power to vote 50.0% or more of the voting securities of Crescent Capital BDC Funding, LLC.

“SPV Credit Facility” means the Loan and Security Agreement, dated March 28, 2016, among the Company as the Collateral Manager, Seller and Equityholder, Crescent Capital BDC Funding, LLC as the Borrower, the banks and other financial institutions from time to time party thereto as Lenders, and Wells Fargo Bank, National Association, as Administrative Agent, Collateral Agent, and Lender, as the same may be amended, restated, amended and restated, supplemented, refinanced, substituted or otherwise modified from time to time.

“Standard Securitization Undertakings” means, collectively, (a) customary arm’s-length servicing obligations (together with any related performance guarantees), (b) obligations (together with any related performance guarantees) to refund the purchase price or grant purchase price credits for dilutive events or misrepresentations (in each case unrelated to the collectability of the assets sold or the creditworthiness of the associated account debtors or loan company) and (c) representations, warranties, covenants and indemnities (together with any related performance guarantees) of a type that are reasonably customary in commercial loans and other asset-backed securitizations.

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“State Sanctions List” means a list that is adopted by any state Governmental Authority within the United States of America pertaining to Persons that engage in investment or other commercial activities in Iran or any other country that is a target of economic sanctions imposed under U.S. Economic Sanctions Laws.

“Subsidiary” means, as to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries). Anything herein to the contrary notwithstanding, the term “Subsidiary” shall not include any Excluded Subsidiary (other than for purpose of subsection (a) and last paragraph of the definition of SPE Subsidiary). Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Company.

“Subsidiary Guarantor” means each Subsidiary that has executed and delivered a Subsidiary Guaranty or a joinder thereto.

“Subsidiary Guaranty” is defined in Section 9.7(a).

“Substitute Purchaser” is defined in Section 21.

“Supplement” is defined in Section 2.2.

“SVO” means the Securities Valuation Office of the NAIC.

“Swap Contract” means (a) any and all interest rate swap transactions, basis swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward foreign exchange transactions, cap transactions, floor transactions, currency options, spot contracts or any other similar transactions or any of the foregoing (including any options to enter into any of the foregoing), and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc. or any International Foreign Exchange Master Agreement.

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“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amounts(s) determined as the mark-to-market values(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts.

“Synthetic Lease” means, at any time, any lease (including leases that may be terminated by the lessee at any time) of any property (a) that is accounted for as an operating lease under GAAP and (b) in respect of which the lessee retains or obtains ownership of the property so leased for U.S. federal income tax purposes, other than any such lease under which such Person is the lessor.

“Tax Blocker Subsidiaries” means (a) Any wholly-owned Subsidiary of the Company from time to time designated in writing by the Company to the holders of the Notes as a “Tax Blocker Subsidiary,” (b) Alcentra BDC Equity Holdings, LLC and (c) CBDC Universal Equity, Inc.; provided that at no time shall any Tax Blocker Subsidiary hold any assets other than Capital Stock.

“Taxes” means taxes, levies, imposts, deductions, charges or withholdings, and all liabilities (including penalties, interest and additions to tax) with respect thereto, whether now or hereafter imposed, levied, collected, withheld or assessed by any taxation authority or other Governmental Authority.

“tranche” means all Notes of a Series having the same maturity, interest rate, currency and schedule for mandatory prepayments.

“United States Person” has the meaning set forth in Section 7701(a)(30) of the Code.

“Unsecured Credit Facility” is defined in Section 10.9.

“Unsecured Debt” means Indebtedness of the Company with a final maturity greater than one year from the date of determination outstanding at any time that is not secured in any manner by any Lien on assets of the Company or any of its Subsidiaries.

“USA PATRIOT Act” means United States Public Law 107-56, Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001 and the rules and regulations promulgated thereunder from time to time in effect.

“U.S. Economic Sanctions Laws” means those laws, executive orders, enabling legislation or regulations administered and enforced by the United States pursuant to which economic sanctions have been imposed on any Person, entity, organization, country or regime, including the Trading with the Enemy Act, the International Emergency Economic Powers Act, the Iran Sanctions Act, the Sudan Accountability and Divestment Act and any other OFAC Sanctions Program.

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“U.S. Government Securities” means securities that are direct obligations of, and obligations the timely payment of principal and interest on which is fully guaranteed by, the United States or any agency or instrumentality of the United States the obligations of which are backed by the full faith and credit of the United States and in the form of conventional bills, bonds, and notes.

“Wholly-Owned Subsidiary” means, at any time, any Subsidiary all of the equity interests (except directors’ qualifying shares) and voting interests of which are owned by any one or more of the Company and the Company’s other Wholly-Owned Subsidiaries at such time.

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[FORM OF SERIES 2020A NOTE]

The Company and the Purchasers agree that for purposes of Section 1273(b) of the Code and Treasury Reg. Section 1.1275-3(b) the aggregate issue price of the Series 2020A Notes is $49,595,000 or approximately $991.90 per $1,000 principal amount of the Series 2020A Notes for purposes of Section 1273 of the Code, the Series 2020A Notes have aggregate original issue discount of $405,000 or approximately $8.10 per $1,000 principal amount, the issue date of the Series 2020A Notes is July 30, 2020; and the yield to maturity of the Series 2020A Notes for purposes of Treasury Reg. Section 1.1272-1(b) is approximately 6.25%. The issue prices and values set forth above shall be the issue prices and values ascribed to the Notes by the Company and the Purchasers and any subsequent holder of the Notes for all purposes, including the preparation of tax returns and the preparation of the Company’s financial statements.

THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR UNITED STATES FEDERAL INCOME TAX PURPOSES (“OID”). THE ISSUE PRICE, THE AMOUNT OF OID, THE ISSUE DATE AND THE YIELD TO MATURITY OF THIS NOTE MAY BE OBTAINED BY CONTACTING THE COMPANY’S SECRETARY AT 310-235-5971.

CRESCENT CAPITAL BDC, INC.

5.95% SERIES 2020A SENIOR NOTE DUE JULY 30, 2023


No. [ ]		[Date]
$[ ]		PPN 225655 A*0

FOR VALUE RECEIVED, the undersigned, CRESCENT CAPITAL BDC, INC. (herein called the “Company”), a corporation organized and existing under the laws of the State of Maryland, hereby promises to pay to [ ], or registered assigns, the principal sum of [ ] DOLLARS (or so much thereof as shall not have been prepaid) on July 30, 2023 (the “Maturity Date”), with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance hereof at the rate of 5.95% per annum, as may be adjusted in accordance with Section 1.3 of the Note Purchase Agreement (as hereinafter defined), from the date hereof, payable semiannually, on the 30th day of January and July in each year, commencing with the January or July next succeeding the date hereof, and on the Maturity Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, (x) on any overdue payment of interest and (y) during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount, at a rate per annum from time to time equal to the Default Rate (as defined in the hereinafter defined Master Note Purchase Agreement), payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand).

SCHEDULE 1

(to Master Note Purchase Agreement)

Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at the principal office of the Investment Adviser in New York, New York located on the date hereof at 10 Hudson Yards, 41st Floor, New York, NY 10001 or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Master Note Purchase Agreement referred to below.

This Note is one of a series of Series 2020A Senior Notes (herein called the “Notes”) issued pursuant to the Master Note Purchase Agreement, dated July 30, 2020 (as from time to time amended, the “Master Note Purchase Agreement”), between the Company and the respective Purchasers named therein and is entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20 of the Master Note Purchase Agreement and (ii) made the representation set forth in Section 6.2 of the Master Note Purchase Agreement. Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Master Note Purchase Agreement.

This Note is a registered Note and, as provided in (and subject to the terms and conditions of) the Master Note Purchase Agreement, upon surrender of this Note for registration of transfer accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Company may treat the Person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

This Note is subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Master Note Purchase Agreement, but not otherwise.

If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Master Note Purchase Agreement.

This Note shall be construed and enforced in accordance with, and the rights of the Company and the holder of this Note shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.


CRESCENT CAPITAL BDC, INC.

By
		[Title]

1-2

CRESCENT CAPITAL BDC, INC.

[NUMBER] SUPPLEMENT TO NOTE PURCHASE AGREEMENT

Dated as of

Re: $ % Series Senior Notes

Due

EXHIBIT S

(to Note Purchase Agreement)

Crescent Capital BDC, Inc.

Dated as of

, 20

To the Series [ ] Additional

Purchaser(s) named in

Schedule A hereto

Ladies and Gentlemen:

This [Number] Supplement to Note Purchase Agreement (the “Supplement”) is among CRESCENT CAPITAL BDC, INC., a Maryland corporation (the “Company”), and the institutional investors named on Schedule A attached hereto (the “Series [__] Additional Purchasers”).

Reference is hereby made to that certain Master Note Purchase Agreement dated as of July 30, 2020 (the “Note Purchase Agreement”) among the Company and the Purchasers listed on the Purchaser Schedule thereto. All capitalized terms not otherwise defined herein shall have the same meanings as specified in the Note Purchase Agreement. Reference is further made to Section 4.17 of the Note Purchase Agreement which requires that, prior to the delivery of any Additional Notes, the Company and each Additional Purchaser shall execute and deliver a Supplement.

The Company hereby agrees with the Series [ ] Additional Purchaser(s) as follows:

1. The Company has authorized the issue and sale of $ aggregate principal amount of its % Series Senior Notes due , (the “Series Notes”). The Series Notes, together with the Series 2020A Notes issued pursuant to the Note Purchase Agreement and each series of Additional Notes which may from time to time hereafter be issued pursuant to the provisions of Section 2.2 of the Note Purchase Agreement, are collectively referred to as the “Notes” (such term shall also include any such notes issued in substitution therefor pursuant to Section 13 of the Note Purchase Agreement). The Series Notes shall be substantially in the form set out in Exhibit 1 hereto with such changes therefrom, if any, as may be approved by the Series [ ] Additional Purchaser(s) and the Company.

2. Subject to the terms and conditions hereof and as set forth in the Note Purchase Agreement and on the basis of the representations and warranties hereinafter set forth, the Company agrees to issue and sell to each Series [ ] Additional Purchaser, and each Series [ ] Additional Purchaser agrees to purchase from the Company, Series Notes in the principal amount set forth opposite such Series [__] Additional Purchaser’s name on Schedule A hereto at a price of 100% of the principal amount thereof on such Closing date hereinafter mentioned.

3. The sale and purchase of the Series Notes to be purchased by each Series [ ] Additional Purchaser shall occur at the offices of [Chapman and Cutler LLP, 111 West Monroe Street, Chicago, Illinois 60603,] at 9:00 A.M. [Chicago time], at a closing (the “Series [ ] Closing”) on , or on such other Business Day thereafter on or prior to , as may be agreed upon by the Company and the Series [ ] Additional Purchasers. At the Series [ ] Closing, the Company will deliver to each Series [ ] Additional Purchaser the Series Notes to be purchased by such Purchaser in the form of a single Series Note (or such greater number of Series Notes in denominations of at least $100,000 as such Series [ ] Additional Purchaser may request) dated the date of the Series [ ] Closing and registered in such Series [ ] Additional Purchaser’s name (or in the name of such Series [ ] Additional Purchaser’s nominee), against delivery by such Series [ ] Additional Purchaser to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Company to account number [ ] at Bank, [Insert Bank address, ABA number for wire transfers, and any other relevant wire transfer information]. If, at the Series [ ] Closing, the Company shall fail to tender such Series Notes to any Series [ ] Additional Purchaser as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to any Series [ ] Additional Purchaser’s satisfaction, such Series [ ] Additional Purchaser shall, at such Series [ ] Additional Purchaser’s election, be relieved of all further obligations under this Agreement, without thereby waiving any rights such Series [ ] Additional Purchaser may have by reason of such failure or such nonfulfillment.

4. The obligation of each Series [ ] Additional Purchaser to purchase and pay for the Series Notes to be sold to such Series [ ] Additional Purchaser at the Series [ ] Closing is subject to the fulfillment to such Series [ ] Additional Purchaser’s satisfaction, prior to the Series [ ] Closing, of the conditions set forth in Section 4 of the Note Purchase Agreement with respect to the Series Notes to be purchased at the Series [ ] Closing as if each reference to “2020A Notes” or “Notes,” “Closing” and “Purchaser” set forth therein was modified to refer to “Series Notes,” “Series [ ] Closing” and “Series [ ] Additional Purchaser” (each as defined in this Supplement) and to the following additional conditions:

(a) Except as supplemented, amended or superceded by the representations and warranties set forth in Exhibit A hereto, each of the representations and warranties of the Company set forth in Section 5 of the Note Purchase Agreement shall be correct as of the date of the Series [ ] Closing (except for representations and warranties which apply to a specific earlier date which shall be true as of such earlier date or as of the date specified in Exhibit A to the extent such provision is superseded in Exhibit A) and the Company shall have delivered to each Series [ ] Additional Purchaser an Officer’s Certificate, dated the date of the Series [ ] Closing certifying that such condition has been fulfilled.

(b) Contemporaneously with the Series [ ] Closing, the Company shall sell to each Series [ ] Additional Purchaser, and each Series [ ] Additional Purchaser shall purchase, the Series Notes to be purchased by such Series [ ] Additional Purchaser at the Series [ ] Closing as specified in Schedule A.

S-2

5. [Here insert special provisions for Series Notes including mandatory prepayment provisions applicable to Series Notes; any series-specific closing conditions or delayed funding matters applicable to Series Notes; or any additional covenants].

6. Each Series [ ] Additional Purchaser represents and warrants that the representations and warranties set forth in Section 6 of the Note Purchase Agreement are true and correct on the date hereof with respect to the purchase of the Series Notes by such Series [ ] Additional Purchaser as if each reference to “2020A Notes” or “Notes,” “Series [ ] Closing” and “Purchaser” set forth therein was modified to refer to “Series Notes,” “Series [ ] Closing” and “Series [ ] Additional Purchaser” and each reference to “this Agreement” therein was modified to refer to the Note Purchase Agreement as supplemented by this Supplement.

7. The Company and each Series [ ] Additional Purchaser agree to be bound by and comply with the terms and provisions of the Note Purchase Agreement as fully and completely as if such Series [ ] Additional Purchaser were an original signatory to the Note Purchase Agreement.

8. This Supplement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York, excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

S-3

The execution hereof shall constitute a contract between the Company and the Series [__] Additional Purchaser(s) for the uses and purposes hereinabove set forth, and this agreement may be executed in any number of counterparts, each executed counterpart constituting an original but all together only one agreement.


CRESCENT CAPITAL BDC, INC.

By
		Name:
		Title:

Accepted as of ,


[SERIES [ ] ADDITIONAL PURCHASER]

By
		Name:
		Title:

S-4

INFORMATION RELATING TO SERIES [ ] ADDITIONAL PURCHASERS


NAME AND ADDRESS OF SERIES [ ] ADDITIONAL PURCHASER	PRINCIPAL AMOUNT OF SERIES NOTES TO BE PURCHASED	NOTE NUMBER
[NAME OF SERIES [ ] ADDITIONAL PURCHASER]	$

(1)	All payments by wire transfer of immediately available funds to:

with sufficient information to identify the source and application of such funds.

(2)	All notices of payments and written confirmations of such wire transfers:

(3)	All other communications:

SCHEDULE A

(to Supplement)

SUPPLEMENTAL REPRESENTATIONS

[UPDATED REPRESENTATIONS AS APPROPRIATE TO BE INCLUDED]

The Company represents and warrants to each Additional Purchaser that except as hereinafter set forth in this Exhibit A, each of the representations and warranties set forth in Section 5 of the Note Purchase Agreement (other than representations and warranties that apply solely to a specific earlier date which shall be true as of such earlier date and other than the Section references hereinafter set forth) is true and correct in all material respects as of the date hereof with respect to the Series Notes with the same force and effect as if each reference to “the Notes” set forth therein was modified to refer to the “Series Notes” and each reference to “this Agreement” therein was modified to refer to the Note Purchase Agreement as supplemented by the Supplement. The Section references hereinafter set forth correspond to the similar sections of the Note Purchase Agreement which are supplemented hereby:

Section 5.3. Disclosure. This Agreement, the financial statements listed in Schedule 5.5 and the documents, certificates or other writings delivered to the Purchasers by or on behalf of the Company prior to [TO BE UPDATED] in connection with the transactions contemplated hereby and identified in Schedule 5.3 (this Agreement and such documents, certificates or other writings and such financial statements delivered to each Purchaser being referred to, collectively, as the “Disclosure Documents”), taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made. Except as disclosed in the Disclosure Documents, since [TO BE UPDATED], there has been no change in the financial condition, operations, business or properties of the Company or any Subsidiary except changes that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. There is no fact known to the Company that would reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in the Disclosure Documents.

Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates. (a) Schedule 5.4 contains (except as noted therein) complete and correct lists as of the date of the Series Closing of (i) the Company’s Subsidiaries, showing, as to each Subsidiary, the name thereof, the jurisdiction of its organization, the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each other Subsidiary and whether such Subsidiary is a Subsidiary Guarantor, and (ii) the Company’s directors and senior officers.

Section 5.5. Financial Statements; Material Liabilities. The Company has delivered to each Additional Purchaser copies of the financial statements of the Company and its Subsidiaries listed on Schedule 5.5. All of such financial statements (including in each case the related schedules and notes, but excluding all financial projections, pro forma financial information and other forward-looking information) fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as of the respective dates specified in such Schedule and the consolidated results of their operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year-end adjustments and lack of footnotes).

Section 5.13. Private Offering by the Company. Neither the Company nor anyone acting on its behalf has offered the Notes or any substantially similar debt Securities for sale to, or solicited any offer to buy the Notes or any substantially similar debt Securities from, or otherwise approached or negotiated in respect thereof with, any Person other than the Additional Purchasers and not more than other Institutional Investors, each of which has been offered the Notes at a private sale for investment. Neither the Company nor anyone acting on its behalf has taken, or will take, any action that would subject the issuance or sale of the Notes to the registration requirements of section 5 of the Securities Act or to the registration requirements of any Securities or blue sky laws of any applicable jurisdiction.

Section 5.14. Use of Proceeds; Margin Regulations The Company will apply the proceeds of the sale of the Notes hereunder for the general corporate purposes of the Company and its Subsidiaries and as otherwise set forth in the section of the entitled “ ”. No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any Securities under such circumstances as to involve the Company in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220). Margin stock does not constitute more than % of the value of the consolidated assets of the Company and its subsidiaries and the Company does not have any present intention that margin stock will constitute more than % of the value of such assets. As used in this Section, the terms “margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them in said Regulation U.

Section 5.15. Existing Indebtedness; Future Liens. (a) Except as described therein, Schedule 5.15 sets forth a complete and correct list of all outstanding Indebtedness of the Company and its Subsidiaries as of , since which date there has been no Material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Indebtedness of the Company or its Subsidiaries. As of , neither the Company nor any Subsidiary is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of the Company or such Subsidiary and, to the knowledge of the Company, no event or condition exists with respect to any Indebtedness of the Company or any Subsidiary that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment.

[ADD ANY ADDITIONAL REPRESENTATIONS AS APPROPRIATE AT THE TIME THE SERIES NOTES ARE ISSUED]

-2-

[FORM OF SERIES NOTE]

[The Company and the Purchasers agree that for purposes of Section 1273(b) of the Code and Treasury Reg. Section 1.1275-3(b) the aggregate issue price of the Notes is $ or approximately $ per $1,000 principal amount of the Notes for purposes of Section 1273 of the Code, the Notes have aggregate original issue discount of $ or approximately $ per $1,000 principal amount, the issue date of the Notes is ; and the yield to maturity of the Notes for purposes of Treasury Reg. Section 1.1272-1(b) is approximately %. These shall be the issue prices and values ascribed to the Notes by the Company and the Purchasers and any subsequent holder of the Notes for all purposes, including the preparation of tax returns and the preparation of the Company’s financial statements.] [TO BE INCLUDED ONLY IF NOTES ARE PURCHASED AT A DISCOUNT TO PAR]

CRESCENT CAPITAL BDC, INC.

[ ]% SERIES SENIOR NOTE DUE [ , ]


No. [ ]		[Date]
$[ ]		PPN[ ]

FOR VALUE RECEIVED, the undersigned, CRESCENT CAPITAL BDC, INC. (herein called the “Company”), a corporation organized and existing under the laws of the State of Maryland, hereby promises to pay to [ ], or registered assigns, the principal sum of [ ] DOLLARS (or so much thereof as shall not have been prepaid) on [ , ] (the “Maturity Date”), with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance hereof at the rate of [ ]% per annum, as may be adjusted in accordance with Section 1.3 of the Note Purchase Agreement (as hereinafter defined), from the date hereof, payable semiannually, on the [ ] day of [ ] and [ ] in each year, commencing with the [ ] or [ ] next succeeding the date hereof, and on the Maturity Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, (x) on any overdue payment of interest and (y) during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount, at a rate per annum from time to time equal to the Default Rate (as defined in the hereinafter defined Master Note Purchase Agreement), payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand).

Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at [ ] or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Master Note Purchase Agreement referred to below.

PURCHASER SCHEDULE

(to Note Purchase Agreement)

This Note is one of a series of Senior Notes (the “Notes”) issued pursuant to a Supplement to the Master Note Purchase Agreement, dated July 30, 2020 (as from time to time amended, the “Master Note Purchase Agreement”), among the Company, the Purchasers named therein and Additional Purchasers of Notes from time to time issued pursuant to any Supplement to the Note Purchase Agreement. This Note and the holder hereof are entitled equally and ratably with the holders of all other Notes of all series from time to time outstanding under the Note Purchase Agreement to all the benefits provided for thereby or referred to therein. Each holder of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20 of the Master Note Purchase Agreement and (ii) made the representation set forth in Section 6.2 of the Master Note Purchase Agreement. Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Master Note Purchase Agreement.

This Note is a registered Note and, as provided in the Master Note Purchase Agreement, upon surrender of this Note for registration of transfer accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Company may treat the Person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

This Note and the holder hereof are entitled equally and ratably with the holders of all of the Notes to the rights and benefits provided pursuant to the terms and provisions of each Subsidiary Guarantee (as such term is defined in the Note Purchase Agreement), if any. Reference is hereby made to the foregoing for a statement of the nature and extent of the benefits for the Notes afforded thereby and the rights of the holders of the Notes.

This Note is subject to [mandatory] [optional] prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise.

This Note shall be construed and enforced in accordance with, and the rights of the Company and the holder of this Note shall be governed by, the law of the State of New York, excluding choice-of-law principles of the law of such State that would permit application of the laws of a jurisdiction other than such State.


CRESCENT CAPITAL BDC, INC.

By
		[Title]

-2-

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Jason A. Breaux, certify that:

(1)

I have reviewed this Quarterly Report on Form 10-Q of Crescent Capital BDC, Inc.;

(2)

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3)

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4)

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5)

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Gerhard Lombard, certify that:

(1)

I have reviewed this Quarterly Report on Form 10-Q of Crescent Capital BDC, Inc.;

(2)

(3)

(4)

(5)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Exhibit 32

Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Crescent Capital BDC, Inc. (the “Company”) for the quarter ended June 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company, does hereby certify, to the best of such officer’s knowledge and belief, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


/s/ Jason A. Breaux
Name:		Jason A. Breaux
Title:		Chief Executive Officer
Date:		August 10, 2020

/s/ Gerhard Lombard
Name:		Gerhard Lombard
Title:		Chief Financial Officer
Date:		August 10, 2020