As filed with the Securities and Exchange Commission on June 24, 2021

Registration No. 333-255478

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM N-2

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

		PRE-EFFECTIVE AMENDMENT NO. 1		☒
		POST-EFFECTIVE AMENDMENT NO.		☐

 

 

Crescent Capital BDC, Inc.

(Exact Name of Registrant as Specified in Charter)

 

 

11100 Santa Monica Blvd., Suite 2000

Los Angeles, CA 90025

(Address of Principal Executive Offices)

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

George P. Hawley

General Counsel

Crescent Capital BDC, Inc.

11100 Santa Monica Blvd. Suite 2000

Los Angeles, California 90025

(310) 235-5900

(Name and Address of Agent for Service)

Copies of information to:

Monica J. Shilling

Kirkland & Ellis LLP

2049 Century Park East, 37th Floor

Los Angeles, California 90067

(310) 552-4200

Approximate Date of Commencement of Proposed Public Offering: From time to time after the effective date of this Registration Statement.

 

☐	Check box if the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans.

☒	Check box if any securities being registered in this Form will be offered on a delayed or continuous basis in reliance on Rule 415 under the Securities Act of 1933 (“Securities Act”), other than securities offered in connection with a dividend reinvestment plan.

☒	Check box if this Form is a registration statement pursuant to General Instruction A.2 or a post-effective amendment thereto.

☐	Check box if this Form is a registration statement pursuant to General Instruction B or a post-effective amendment thereto that will become effective upon filing with the Commission pursuant to Rule 463(e) under the Securities Act.

☐	Check box if this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction B to register additional securities or additional classes of additional securities pursuant to Rule 413(b) under the Securities Act.

Is it proposed that this filing will become effective (check appropriate box):

 

☒	when declared effective pursuant to Section 8(c) of the Securities Act

If appropriate, check the following box:

 

☐	This post-effective amendment designates a new effective date for a previously filed registration statement.

☐	This form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act and the Securities Act registration statement number of the earlier effective registration statement for the same offering is                .

☐	This Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, and the Securities Act registration statement number of the earlier effective registration statement for the same offering is                .

☐	This Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, and the Securities Act registration statement number of the earlier effective registration statement for the same offering is                .

Check each box that appropriately characterizes the Registrant:

 

☐	Registered Closed-End Fund (closed-end company that is registered under the Investment Company Act of 1940 (“Investment Company Act”)).

☒	Business Development Company (closed-end company that intends or has elected to be regulated as a business development company under the Investment Company Act).

☐	Interval Fund (Registered Closed-End Fund or a Business Development Company that makes periodic repurchase offers under Rule 23c-3 under the Investment Company Act).

☒	A.2 Qualified (qualified to register securities pursuant to General Instruction A.2 of this Form).

☐	Well-Known Seasoned Issuer (as defined by Rule 405 under the Securities Act).

☒	Emerging Growth Company (as defined by Rule 12b-2 under the Securities Exchange Act of 1934 (“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 pursuant to Section 7(a)(2)(B) of Securities Act.

☐	New Registrant (registered or regulated under the Investment Company Act for less than 12 calendar months preceding this filing).

 

 

CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933

 

Title of Securities Being Registered		Amount Being Registered(1)		Proposed Maximum Offering Price Per Unit(1)		Proposed Maximum Aggregate Offering Price(1)(2)		Amount of Registration Fee
Common Stock, $0.001 par value per share(3)(4)
Preferred Stock, $0.001 par value per share(3)
Subscription Rights(3)
Warrants(5)
Debt Securities(6)
Units(7)
Total(8)						$500,000,000		$54,550

(1)	An unspecified amount of securities or aggregate principal amount, as applicable, of each identified class is being registered as may from time to time be sold at unspecified prices.

(2)

Estimated pursuant to Rule 457(o) solely for the purpose of determining the registration fee. The proposed maximum offering price per security will be determined from time to time, by the Registrant in connection with the sale by the Registrant of the securities registered under this registration statement.

(3)	Subject to Note 1 above, such shares of common stock or preferred stock, or subscription rights to purchase shares of common stock, may be sold separately or as units in combination with other securities registered hereunder.

(4)	Subject to Note 1 above, such shares of common stock may be issued upon conversion or exchange of other securities registered hereunder, to the extent any such securities are, by their terms, convertible or exchangeable for common stock.

(5)	Subject to Note 1 above, such warrants may be sold, from time to time separately or as units in combination with other securities registered hereunder, representing rights to purchase common stock, preferred stock or debt securities.

(6)	Subject to Note 1 above, such principal amount of debt may be sold separately or as units in combination with other securities registered hereunder.

(7)	Subject to Note 1 above, such units may consist of a combination of any one or more of the securities being registered hereunder and may also include securities issued by third parties, including the U.S. Treasury.

(8)	In no event will the aggregate offering price of all securities issued from time to time pursuant to this registration statement by the Registrant exceed $500,000,000.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY DETERMINE.

 

 

 

The information in this prospectus is not complete and may be changed. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

Subject to Completion

Prospectus dated June 24, 2021

PROSPECTUS

 

 

Common Stock

Preferred Stock

Debt Securities

Subscription Rights

Warrants

Units

 

 

Crescent Capital BDC, Inc. is a business development company that seeks to provide capital solutions to middle market companies with sound business fundamentals. 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. We may on occasion invest in larger or smaller companies. Our investments may include non-cash income features, including payment-in-kind interest and original issue discount. We may also invest in securities that are rated below investment grade (e.g., junk bonds) by rating agencies or that would be rated below investment grade if they were rated.

We are externally managed by our investment advisor, Crescent Cap Advisors, LLC, an investment advisor that is registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940, as amended. CCAP Administration LLC provides certain administrative services and other services necessary for us to operate.

Our common stock is traded on The NASDAQ Global Market under the symbol “CCAP.” On June 22, 2021, the last reported sales price of our common stock on The NASDAQ Global Market was $19.40, per share. The net asset value per share of our common stock at March 31, 2021 (the last date prior to the date of this prospectus on which we determined net asset value) was $20.24.

Investing in our securities involves risks that are described in the “Risk Factors ” section beginning on page 15 of this prospectus, including the risk of leverage.

We may offer, from time to time, in one or more offerings or series, our common stock, preferred stock, debt securities, subscription rights to purchase shares of our common stock, warrants representing rights to purchase shares of our common stock, preferred stock or debt securities, or units comprised of any combination of the foregoing, which we refer to, collectively, as the “securities.” The preferred stock, debt securities, subscription rights and warrants (including as part of a unit) offered hereby may be convertible or exchangeable into shares of our common stock. The securities may be offered at prices and on terms to be described in one or more supplements to this prospectus. In the event we offer common stock, the offering price per share of our common stock less any underwriting commissions or discounts will generally not be less than the net asset value per share of our common stock at the time we make the offering. However, we may issue shares of our common stock pursuant to this prospectus at a price per share that is less than our net asset value per share (a) in connection with a rights offering to our existing stockholders, (b) with the prior approval of a majority (as defined in the 1940 Act) of (1) the outstanding shares of our common stock and (2) the outstanding shares of the our common stock held by persons that are not affiliated persons of the Company or (c) under such circumstances as the U.S. Securities and Exchange Commission (the “SEC”) may permit.     

This prospectus describes some of the general terms that may apply to an offering of our securities. We will provide the specific terms of these offerings and securities in one or more supplements to this prospectus. We may also authorize one or more free writing prospectuses to be provided to you in connection with these offerings. The accompanying prospectus supplement and any related free writing prospectus may also add, update, or change information contained in this prospectus. You should carefully read this prospectus, the accompanying prospectus supplement, any related free writing prospectus and the documents incorporated by reference herein, before investing in our securities and keep them for future reference. We file annual, quarterly and current reports, proxy statements and other information with the SEC. This information is available free of charge by calling us collect at (310) 235-5900, by sending an e-mail to us at investor.relations@crescentcap.com or on our website at http://www.crescentbdc.com. The SEC also maintains a website at www.sec.gov that contains such information. The information on the websites referred to herein is not incorporated by reference into this prospectus or the accompanying prospectus supplement.

 

 

Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

This prospectus may not be used to consummate sales of securities unless accompanied by a prospectus supplement.

 

 

The date of this prospectus is [●], 2021.

You should rely only on the information contained in this prospectus, the accompanying prospectus supplement, any related free writing prospectus, the documents incorporated by reference in this prospectus and the applicable prospectus supplement, or any other information to which we have referred you. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in, or incorporated by reference in, this prospectus, the accompanying prospectus supplement or any such free writing prospectus is, or will be, accurate only as of the dates on their respective covers. Our business, financial condition, results of operations and prospects may have changed since any such date.

TABLE OF CONTENTS

 

		Page
Prospectus Summary			1
The Company			1
Offerings			7
Fees and Expenses			10
Financial Highlights			13
Risk Factors			15
Forward-Looking Statements			19
Use of Proceeds			21
Price Range of Common Stock and Distributions			22
Senior Securities			24
Portfolio Companies			26
Control Persons and Principal Stockholders			46
Determination of Net Asset Value			48
Certain Material U.S. Federal Income Tax Considerations			50
Description of Securities			59
Description of Our Preferred Stock			67
Description of Our Subscription Rights			68
Description of Our Warrants			70
Description of Our Debt Securities			71
Description of Our Units			83
Sales of Common Stock Below Net Asset Value			84
Regulation			89
Custodian, Transfer and Dividend Paying Agent and Registrar			94
Brokerage Allocation and Other Practices			94
Plan of Distribution			94
Legal Matters			96
Independent Registered Public Accounting Firm			96
Available Information			97
Incorporation of Certain Information By Reference			97

 

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ABOUT THIS PROSPECTUS

This prospectus is part of a “shelf” registration statement that we have filed with the SEC. Under the shelf registration process, we may offer, from time to time, in one or more offerings or series, our common stock, preferred stock, debt securities, subscription rights to purchase shares of our common stock, warrants representing rights to purchase shares of our common stock, preferred stock or debt securities, or units comprised of any combination of the foregoing, on terms to be determined at the time of the offering. The securities may be offered at prices and on terms described in one or more supplements to this prospectus. This prospectus provides you with a general description of the securities that we may offer. Each time we use this prospectus to offer securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. We may also authorize one or more free writing prospectuses to be provided to you that may contain material information relating to these offerings. Such prospectus supplement and/or free writing prospectus (collectively referred to hereinafter as the “prospectus supplement”) may also add, update or change information contained in this prospectus or in the documents we incorporate by reference herein. This prospectus and the prospectus supplement, together with any documents incorporated by reference herein, will include all material information relating to the applicable offering. Please carefully read this prospectus and the prospectus supplement, together with any documents incorporated by reference in this prospectus and the applicable prospectus supplement, any exhibits and the additional information described under the headings “Available Information,” “Incorporation of Certain Information By Reference,” “Prospectus Summary” and “Risk Factors” before you make an investment decision.

 

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FEES AND EXPENSES

The following table is intended to assist you in understanding the costs and expenses that an investor in our common stock will bear, directly or indirectly, based on the assumptions set forth below. We caution you that some of the percentages indicated in the table below are estimates and may vary. The following table should not be considered a representation of our future expenses. Actual expenses may be greater or less than shown. Except where the context suggests otherwise, whenever this table contains a reference to our fees or expenses, we will pay such fees and expenses out of our net assets and, consequently, stockholders will indirectly bear these fees or expenses as our investors

 

Stockholder transaction expenses (as a percentage of offering price):
Sales load			—	(1)
Offering expenses			—	(2)
Dividend reinvestment plan expenses			Variable Transaction Fee	(3)
Total stockholder transaction expenses paid			—	(4)
Annual expenses (as a percentage of consolidated net assets attributable to common stock)(5):
Base management fees			2.28	%(6)
Incentive fees payable under Investment Advisory Agreement			1.62	%(7)
Interest payments on borrowed funds			2.98	%(8)
Other expenses			0.93	%(9)
Acquired fund fees and expenses			0.46	%(10)
Total annual expenses			8.27	% (11)
Base management fee waiver			(0.91	)%(12)
Incentive fee waiver			(1.62	)%(13)
Total annual expenses after waivers			5.74	%

 

(1)

In the event that the securities to which this prospectus relates are sold to or through underwriters, a corresponding prospectus supplement will disclose the applicable sales load (underwriting discount or commission). Purchases of shares of our common stock on the secondary market are not subject to sales charges but may be subject to brokerage commissions or other charges. The table does not include any sales load that stockholders may have paid in connection with their purchase of shares of our common stock.

(2)	The related prospectus supplement will disclose the estimated amount of offering expenses, the offering price and the offering expenses borne by us as a percentage of the offering price.

(3)

The expenses of the dividend reinvestment plan are included in “Other expenses.” The plan administrator’s fees under the plan are paid by us. If a participant elects by notice to the plan administrator in advance of termination to have the plan administrator sell part or all of the shares held by the plan administrator in the participant’s account and remit the proceeds to the participant, the plan administrator is authorized to deduct a transaction fee of up to $15 plus a $0.10 per share fee from the proceeds. See “Dividend Reinvestment Plan” below for more information.

(4)	The related prospectus supplement will disclose the offering price and the total stockholder transaction expenses as a percentage of the offering price.

(5)	The “consolidated net assets attributable to common stock” used to calculate the percentages in this table is our net assets as of March 31, 2021.

(6)	The base management fee referenced in the table above is estimated by annualizing the actual amounts incurred during the three months ended March 31, 2021.

The base management fee under the Amended and Restated Investment Advisory Agreement, dated as of January 5, 2021, by and between us and the Advisor (the “Investment Advisory Agreement”) is calculated

 

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and payable quarterly in arrears at an annual rate of 1.25% of our average gross assets, including assets purchased with borrowed funds or other forms of leverage, but, excluding cash and cash equivalents, investment in Great American Capital Partners II LP (“GACP II”) and adjusted for share issuances or repurchases. For more detailed information about the base management fee and the Investment Advisory Agreement, please see Note 3 to our consolidated financial statements for the quarter ended March 31, 2021.

(7)	The incentive fee referenced in the table above is estimated by annualizing the actual amounts incurred during the three months ended March 31, 2021.

 

The incentive fee consists of two parts, one based on income and the other based on capital gains, that are determined independent of each other, with the result that one component may be payable even if the other is not:

 

-

The first part, the “Income Incentive Fee,” is calculated and payable quarterly in arrears and equals 100% of the pre-incentive fee net investment income for the immediately preceding calendar quarter, if any, that exceeds a preferred return of 1.75% per quarter (7% annualized) (the “Hurdle”), but is less than or equal to 1.8182% in the calendar quarter; and 17.5% of the amount of pre-incentive fee net investment income, if any, that exceeds 1.8182% in the calendar quarter provided, however, that the Advisor has agreed to waive the Income Incentive Fee from February 1, 2020 through July 31, 2021. The Advisor has notified the Company that, upon expiration of the current fee waivers on July 31, 2021, it intends to voluntarily waive income incentive fees to the extent net investment income falls short of the declared dividend on a full dollar basis through December 31, 2022.

 

-

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 the 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.

 

For more detailed information about the incentive fee, please see Note 3 to our consolidated financial statements for the quarter ended March 31, 2021.

(8)	Interest payments on borrowed funds referenced in the table above are estimated by annualizing the actual amounts incurred during the three months ended March 31, 2021.

At March 31, 2021, the weighted average effective interest rate for total debt outstanding was 3.25%. We may borrow funds from time to time to make investments to the extent we determine that the economic situation is conducive to doing so. Our stockholders indirectly bear the costs of borrowings under any debt instruments that we may enter into.

(9)	Other expenses referenced in the table above are estimated by annualizing the actual amounts incurred during the three months ended March 31, 2021.

 

Other expenses include various overhead expenses, professional fees, director fees, and payments under the Amended and Restated Administration Agreement. See “Corporate Governance-Certain Relationships and Related Party Transactions-Administration Agreements” in our most recent Annual Report on Form 10-K.

(10)

Our stockholders indirectly bear the expenses of underlying funds or other investment vehicles in which we invest that (1) are investment companies or (2) would be investment companies under Section 3(a) of the 1940 Act but for the exceptions to that definition provided for in Sections 3(c)(1) and 3(c)(7) of the 1940 Act.

(11)

“Total annual expenses” as a percentage of consolidated net assets attributable to common stock are higher than the total annual expenses percentage would be for a company that is not leveraged. We borrow money to leverage and increase our total assets. The SEC requires that the “Total annual expenses” percentage be calculated as a percentage of net assets (defined as total assets less indebtedness and before taking into account any income based fees or capital gains incentive fees accrued during the period), rather than the total assets, including assets that have been funded with borrowed monies.

(12)	The Advisor agreed to waive a portion of the management fee from February 1, 2020 through July 31, 2021 so that only 0.75% shall be charged for such time period. The Advisor is not permitted to recoup any waived

 

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amounts at any time. The management fee waiver referenced in the table above is estimated by annualizing the actual amounts incurred during the three months ended March 31, 2021.

(13)

The Advisor agreed to waive the income based portion of the incentive fee from February 1, 2020 through July 31, 2021 and has notified the Company that, upon expiration of the current fee waivers on July 31, 2021, it intends to voluntarily waive income incentive fees to the extent net investment income falls short of the declared dividend on a full dollar basis through December 31, 2022. The income based incentive fee waiver referenced in the table above is estimated by annualizing the actual amounts incurred during the three months ended March 31, 2021.

Example

The following example demonstrates the projected dollar amount of total cumulative expenses over various periods with respect to a hypothetical investment in our common stock, assuming asset coverage ratio of 216% (Corporation’s actual asset coverage as of March 31, 2021) and total annual expenses of 5.74% of net assets attributable to common stock as set forth in the fees and expenses table above, and (x) a 5.0% annual return resulting entirely from net realized capital gains (none of which is subject to the incentive fee) and (y) a 5.0% annual return resulting entirely from net realized capital gains (all of which is subject to the incentive fee based on capital gains). Transaction expenses are included in the following example. This example and the expenses in the table above should not be considered a representation of our future expenses, and actual expenses (including cost of debt, if any, and other expenses) may be greater or less than those shown.

 

You would pay the following expenses on a $1,000 common stock investment:		1 year				3 years				5 years				10 years
assuming a 5% annual return resulting entirely from net realized capital gains (none of which is subject to the capital gains incentive fee)(1)		$	60			$	179			$	295			$	575
assuming a 5% annual return resulting entirely from net realized capital gains (all of which is subject to the incentive fee based on capital gains)(2)		$	69			$	203			$	332			$	634

 

(1)	Assumes that we will not realize any capital gains computed net of all realized capital losses and unrealized capital depreciation.

(2)

Assumes no unrealized capital depreciation and a 5% annual return resulting entirely from net realized capital gains and therefore subject to the incentive fee based on capital gains. Because our investment strategy involves investments that generate primarily current income, we believe that a 5% annual return resulting entirely from net realized capital gains is unlikely.

The foregoing table is to assist you in understanding the various costs and expenses that an investor in our common stock will bear directly or indirectly. While the example assumes, as required by the SEC, a 5% annual return, our performance will vary and may result in a return greater or less than 5%. Because the income portion of the incentive fee under the Investment Advisory Agreement is unlikely to be significant assuming a 5% annual return, the second example assumes that the 5% annual return will be generated entirely through net realized capital gains and, as a result, will trigger the payment of the capital gains portion of the incentive fee under the Investment Advisory Agreement. The income portion of the incentive fee under the Investment Advisory Agreement, assuming a 5% annual return, would either not be payable or have an immaterial impact on the expense amounts shown above, is not included in the example. If we achieve sufficient returns on our investments, including through net realized capital gains, to trigger an incentive fee of a material amount, our expenses, and returns to our investors, would be higher. In addition, while the example assumes reinvestment of all dividends and distributions at net asset value, under certain circumstances, reinvestment of dividends and other distributions under our dividend reinvestment plan may occur at a price per share that differs from net asset value.

This example and the expenses in the table above should not be considered a representation of our future expenses as, and actual expenses (including the cost of debt, if any, and other expenses) that we may incur in the future and such actual expenses may be greater or less than those shown.

 

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FINANCIAL HIGHLIGHTS

The following table of financial highlights is intended to help a prospective investor understand the Company’s financial performance for the periods shown. The financial data set forth in the following table as of and for the years ended December 31, 2020, 2019, 2018, 2017, 2016, and 2015 are derived from our consolidated financial statements, which have been audited by Ernst & Young LLP, an independent registered public accounting firm whose reports thereon are incorporated by reference in this prospectus, certain documents incorporated by reference in this prospectus or the accompanying prospectus supplement, or our Annual Reports on Form 10-K filed with the SEC, which may be obtained from www.sec.gov or upon request. The financial data set forth in the following table as of and for the three months ended March 31, 2021 is derived from our unaudited financial statements, but in the opinion of management, reflects all adjustments (consisting only of normal recurring adjustments) that are necessary to present fairly the results of such interim period. Interim results as of and for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. You should read these financial highlights in conjunction with our consolidated financial statements and notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this prospectus, any documents incorporated by reference in this prospectus or the accompanying prospectus supplement, or our Annual Reports on Form 10-K filed with the SEC.

 

		For the three months ended March 31, 2021				For the year ended December 31, 2020				For the year ended December 31, 2019				For the year ended December 31, 2018				For the year ended December 31, 2017				For the year ended December 31, 2016				For the period from February 5, 2015 (Inception) to December 31, 2015*
Per Share Data:(1)
Net asset value, beginning of period		$	19.88			$	19.50			$	19.43			$	20.10			$	20.08			$	19.13			$	20.00
Net investment income after tax			0.41				1.80				1.83				1.65				1.31				1.23				0.55
Net realized and unrealized gains (losses) on investments and forward contracts, net of taxes			0.35				0.18				(0.14	)			(0.89	)			(0.11	)			1.04				(1.87	)
Net increase (decrease) in net assets resulting from operations			0.76				1.98				1.69				0.76				1.20				2.27				(1.32	)
Effect of equity issuances			0.01				0.04				0.03				0.06				0.02				(0.20	)			0.77
Distributions declared from net investment income(2)			(0.41	)			(1.64	)			(1.64	)			(1.47	)			(1.18	)			(1.10	)			(0.27	)
Distributions from net realized gains			—				—				—				—				—				—				—
Total distributions to stockholders			—				(1.64	)			(1.64	)			(1.47	)			(1.18	)			(1.10	)			(0.27	)
Offering costs			—				—				(0.01	)			(0.02	)			(0.02	)			(0.02	)			(0.05	)
Total increase (decrease) in net assets			0.36				0.38				0.07				(0.67	)			0.02				0.95				(0.87	)
Net asset value, end of period		$	20.24			$	19.88			$	19.50			$	19.43			$	20.10			$	20.08			$	19.13
Shares outstanding, end of period			28,167,360				28,167,360				20,862,314				13,358,289				8,597,116				6,376,850				4,056,316
Weighted average shares outstanding			28,167,360				27,681,757				17,344,640				10,719,485				7,562,447				5,191,589				2,855,996
Per share market value at end of period		$	17.18			$	14.57			$	—			$	—			$	—			$	—			$	—
Total return based on market value(3)			20.73	%			1.47	%			—	%			—	%			—	%			—	%			—	%
Total return based on net asset value(4)			3.87	%			10.36	%			8.81	%			4.06	%			5.99	%			10.70	%			(3.00	)

 

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		For the three months ended March 31, 2021				For the year ended December 31, 2020				For the year ended December 31, 2019				For the year ended December 31, 2018				For the year ended December 31, 2017				For the year ended December 31, 2016				For the period from February 5, 2015 (Inception) to December 31, 2015*
Ratio/Supplemental Data:
Net assets, end of period(5)		$	569,987			$	560,000			$	406,917			$	259,579			$	172,800			$	128,056			$	77,586
Ratio of total net expenses to average net assets(6)(7)			6.46	%			5.34	%			6.54	%			7.33	%			8.02	%			7.17	%			7.65	%
Ratio of net expenses (without incentive fees and interest and other debt expenses) to average net assets (7)			2.32	%			2.24	%			2.50	%			3.06	%			3.53	%			4.08	%			5.53	%
Ratio of net investment income before taxes to average net assets(7)			8.30	%			10.10	%			9.61	%			8.48	%			6.45	%			6.14	%			3.17	%
Ratio of interest and credit facility expenses to average net assets(8)			3.01	%			3.10	%			4.03	%			4.01	%			3.44	%			2.59	%			2.12	%
Ratio of incentive fees to average net assets			1.13	%			—	%			—	%			0.26	%			1.05	%			0.50	%			—	%
Ratio of portfolio turnover to average investments at fair value(9)			7.38	%			28.01	%			23.97	%			27.89	%			19.27	%			34.36	%			4.08	%
Weighted average debt outstanding(5)		$	486,784			$	421,066			$	275,905			$	182,328			$	133,486			$	78,294			$	23,591
Asset coverage ratio			216	%			217	%			225	%			209	%			214	%			236	%			242	%

 

*	The Company was formed on February 5, 2015 and commenced operations on June 26, 2015.

(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 market value is calculated as the change in market value per share during the period, taking into account dividends, if any, reinvested in accordance with the Company’s dividend reinvestment plan. The beginning market value per share is based on the market price of $16.40 per share on February 3, 2020, the date of the Company’s listing on NASDAQ, and not annualized.

(4)	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.

(5)	In thousands.

(6)

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 6.48%, 5.37%, 6.58% and 7.36% for the three months ended March 31, 2021 and years ended December 31, 2020, December 31, 2019 and December 31, 2018, respectively. The GACP II investment was made after 2018, and as such, the 2017, 2016 and 2015 ratios were not affected.

(7)	Annualized except for organization expenses.

(8)	Annualized.

(9)	Not annualized for the three months ended March 31, 2021.

 

14

RISK FACTORS

You should carefully consider the risk factors described below, and in the section titled “Risk Factors” in the applicable prospectus supplement and any related free writing prospectus, and the risks discussed in the section titled “Item 1A. Risk Factors” in our Annual Report on Form 10-K, which is incorporated by reference herein, and any subsequent filings we have made with the SEC that are incorporated by reference into this prospectus or any prospectus supplement, together with all of the other information included in this prospectus, the accompanying prospectus supplement and any documents incorporated by reference herein, including our consolidated financial statements and the related notes thereto, before you decide whether to make an investment in our securities. The risks set out below and described in such documents are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial condition and results of operations could be materially adversely affected. In such case, the net asset value of our common stock and the trading price, if any, of our securities could decline, and you may lose all or part of your investment.

Investors in offerings of our common stock will likely incur immediate dilution upon the closing of such offering.

We generally expect the public offering price of any offering of shares of our common stock to be higher than the book value per share of our outstanding common stock (unless we offer shares pursuant to a rights offering or after obtaining prior approval for such issuance from our stockholders and our independent directors). Accordingly, investors purchasing shares of our common stock in offerings pursuant to this prospectus may pay a price per share that exceeds the tangible book value per share after such offering.

Dilution represents the difference between the offering price and the tangible book value per share immediately after completion of an offering. You could experience dilution both as a result of the offering price and as a result of any shares you purchase in an offering of our common stock having a lower book value than shares held by our existing stockholders.

Your interest in us may be diluted if you do not fully exercise your subscription rights in any rights offering. In addition, if the subscription price is less than our net asset value per share, then you will experience an immediate dilution of the aggregate net asset value of your shares.

In the event we issue subscription rights, stockholders who do not fully exercise their subscription rights should expect that they will, at the completion of a rights offering pursuant to this prospectus, own a smaller proportional interest in us than would otherwise be the case if they fully exercised their rights. We cannot state precisely the amount of any such dilution in share ownership because we do not know at this time what proportion of the shares will be purchased as a result of such rights offering.

In addition, if the subscription price is less than the net asset value per share of our common stock, then our stockholders would experience an immediate dilution of the aggregate net asset value of their shares as a result of the offering. The amount of any decrease in net asset value is not predictable because it is not known at this time what the subscription price and net asset value per share will be on the expiration date of a rights offering or what proportion of the shares will be purchased as a result of such rights offering. Such dilution could be substantial. See “Risk Factors—The net asset value per share of our common stock may be diluted if we sell shares of our common stock in one or more offerings at prices below the then current net asset value per share of our common stock or securities to subscribe for or convertible into shares of our common stock” and “Sales of Common Stock Below Net Asset Value” below.

 

15

We may initially invest a portion of the net proceeds of offerings pursuant to this prospectus primarily in high-quality short-term investments, which will generate lower rates of return than those expected from the interest generated on our target portfolio investments.

We may initially invest a portion of the net proceeds of offerings pursuant to this prospectus primarily in cash, cash equivalents, U.S. government securities and other high-quality short-term investments. These securities generally earn yields substantially lower than the income that we anticipate receiving once we are fully invested in accordance with our investment objective. As a result, we may not, for a time, be able to achieve our investment objective and/or we may need to, for a time, decrease the amount of any dividend that we may pay to our stockholders to a level that is substantially lower than the level that we expect to pay when the net proceeds of offerings are fully invested in accordance with our investment objective. If we do not realize yields in excess of our expenses, we may incur operating losses and the market price of our shares may decline.

The net asset value per share of our common stock may be diluted if we sell shares of our common stock in one or more offerings at prices below the then current net asset value per share of our common stock or securities to subscribe for or convertible into shares of our common stock.

We may sell our common stock, or warrants, options or rights to acquire shares of our common stock, at a price below the then-current net asset value per share of our common stock if our Board determines that such sale is in our best interests, and if our stockholders, including a majority (as defined in the 1940 Act), of (1) the outstanding shares of our common stock and (2) the outstanding shares of the our common stock held by persons that are not affiliated persons of the Company, approve such sale. In any such case, the price at which our securities are to be issued and sold may not be less than a price that, in the determination of our Board, closely approximates the market value of such securities (less any distributing commission or discount). We do not currently have authorization from our stockholders to issue our common stock at a price below the then-current net asset value per share.

Any decision to sell shares of our common stock below its then current net asset value per share or securities to subscribe for or convertible into shares of our common stock would be subject to the determination by our Board that such issuance is in our and our stockholders’ best interests.

If we were to sell shares of our common stock below its then current net asset value per share, such sales would result in an immediate dilution to the net asset value per share of our common stock. This dilution would occur as a result of the sale of shares at a price below the then current net asset value per share of our common stock and a proportionately greater decrease in the stockholders’ interest in our earnings and assets and their voting interest in us than the increase in our assets resulting from such issuance. Because the number of shares of common stock that could be so issued and the timing of any issuance is not currently known, the actual dilutive effect cannot be predicted.

In addition, if we issue warrants or securities to subscribe for or convertible into shares of our common stock, subject to certain limitations, the exercise or conversion price per share could be less than the net asset value per share at the time of exercise or conversion (including through the operation of anti-dilution protections). Because we would incur expenses in connection with any issuance of such securities, such issuance could result in a dilution of the net asset value per share at the time of exercise or conversion. This dilution would include reduction in the net asset value per share as a result of the proportionately greater decrease in the stockholders’ interest in our earnings and assets and their voting interest than the increase in our assets resulting from such issuance.

Further, if our current stockholders do not purchase any shares to maintain their percentage interest when we issue new shares, regardless of whether such offering is above or below the then current net asset value per share, their voting power will be diluted.

 

16

We cannot predict how tax reform legislation will affect us, our investments, or our stockholders, and any such legislation could adversely affect our business.

Legislative or other actions relating to taxes could have a negative effect on us. The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the Internal Revenue Service (“IRS”) and the U.S. Treasury Department. We cannot predict with certainty how any changes in the tax laws might affect us, our stockholders, or our portfolio investments. New legislation and any U.S. Treasury regulations, administrative interpretations or court decisions interpreting such legislation could significantly and negatively affect our ability to qualify for tax treatment as a RIC or the U.S. federal income tax consequences to us and our stockholders of such qualification, or could have other adverse consequences. Stockholders are urged to consult with their tax advisor regarding tax legislative, regulatory, or administrative developments and proposals and their potential effect on an investment in our securities.

Our strategy involves a high degree of leverage. We intend to continue to finance our investments with borrowed money, which will magnify the potential for gain or loss on amounts invested and increases the risk of investing in us. The risks of investment in a highly leveraged fund include volatility and possible distribution restrictions.

The use of leverage magnifies the potential for gain or loss on amounts invested. The use of leverage is generally considered a speculative investment technique and increases the risks associated with investing in our securities. However, we have borrowed from, and may in the future issue debt securities to, banks, insurance companies and other lenders. Lenders of these funds have fixed dollar claims on our assets that are superior to the claims of our common stockholders, and we would expect such lenders to seek recovery against our assets in the event of a default. We may pledge up to 100% of our assets and may grant a security interest in all of our assets under the terms of any debt instruments we may enter into with lenders. In addition, under the terms of our credit facilities and any borrowing facility or other debt instrument we may enter into, we are likely to be required to use the net proceeds of any investments that we sell to repay a portion of the amount borrowed under such facility or instrument before applying such net proceeds to any other uses. If the value of our assets decreases, leveraging would cause net asset value to decline more sharply than it otherwise would have had we not leveraged, thereby magnifying losses or eliminating our stake in a leveraged investment. Similarly, any decrease in our revenue or income will cause our net income to decline more sharply than it would have had we not borrowed. Such a decline would also negatively affect our ability to make dividend payments on our common stock or preferred stock. Our ability to service any debt will depend largely on our financial performance and will be subject to prevailing economic conditions and competitive pressures. In addition, our common stockholders will bear the burden of any increase in our expenses as a result of our use of leverage, including interest expenses and any increase in the base management fee payable to the Advisor.

There can be no assurance that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under our credit facilities or otherwise in an amount sufficient to enable us to repay our indebtedness or to fund our other liquidity needs. We may need to refinance all or a portion of our indebtedness on or before it matures. There can be no assurance that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all. If we cannot service our indebtedness, we may have to take actions such as selling assets or seeking additional equity. There can be no assurance that any such actions, if necessary, could be effected on commercially reasonable terms or at all, or on terms that would not be disadvantageous to stockholders or on terms that would not require us to breach the terms and conditions of our existing or future debt agreements.

As a BDC, we are generally required to meet a coverage ratio of total assets to total borrowings and other senior securities, which include all of our borrowings and any preferred stock that we may issue in the future, of at least 150%. If this ratio declines below 150%, we will not be able to incur additional debt and could be required to sell a portion of our investments to repay some debt when we are otherwise disadvantageous for us to do so. This could have a material adverse effect on our operations, and we may not be able to make distributions.

 

17

The amount of leverage that we employ will depend on the Advisor’s assessment of market and other factors at the time of any proposed borrowing. We cannot assure stockholders that we will be able to obtain credit at all or on terms acceptable to it.

The following table illustrates the effect on return to a holder of our common stock of the leverage created by our use of borrowing at the weighted average stated interest rate of 3.25% as of March 31, 2021, together with (a) our total value of net assets as of March 31, 2021; (b) approximately $487.9 million in aggregate principal amount of indebtedness outstanding as of March 31, 2021 and (c) hypothetical annual returns on our portfolio of minus 15% to plus 15%.

 

Assumed Return on Portfolio (Net of Expenses)(1)			-15.00	%			-10.00	%			-5.00	%			—	%			5.00	%			10.00	%			15.00	%
Corresponding Return to Common Stockholders(2)			-31.12	%			-21.67	%			-12.23	%			-2.78	%			6.66	%			16.11	%			25.56	%

 

(1)

The assumed portfolio return is required by SEC regulations and is not a prediction of, and does not represent, our projected or actual performance. Actual returns may be greater or less than those appearing in the table. Pursuant to SEC regulations, this table is calculated as of March 31, 2021. As a result, it has not been updated to take into account any changes in assets or leverage since March 31, 2021.

(2)

In order to compute the “Corresponding Return to Common Stockholders,” the “Assumed Return on Portfolio” is multiplied by the total value of our assets at March 31, 2021 to obtain an assumed return to us. From this amount, the interest expense (calculated by multiplying the weighted average stated interest rate of 3.25% by the approximately $487.9 million of principal debt outstanding) is subtracted to determine the return available to stockholders. The return available to stockholders is then divided by the total value of our net assets as of March 31, 2021 to determine the “Corresponding Return to Common Stockholders.”

 

18

FORWARD-LOOKING STATEMENTS

Some of the statements included or incorporated by reference in this prospectus and the accompanying prospectus supplement, constitute forward-looking statements, which relate to future events or our future performance or financial condition. The forward-looking statements contained in this prospectus and the accompanying prospectus supplement, including the documents we incorporate by reference herein and therein, involve a number of risks and uncertainties, including statements concerning:

 

•

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

 

•

the ability of our investment advisor 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;

 

•

the impact of the elimination of the London Interbank Offered Rate (“LIBOR”) on our operating results;

 

•

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 dividends or other 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.

We use words such as “anticipates,” “believes,” “expects,” “intends,” “will,” “should,” “may” and similar expressions to identify forward-looking statements, although not all forward-looking statements include these words. Our actual results and condition could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Risk Factors” and the other information included in this prospectus and the accompanying prospectus supplement, including the documents we incorporate by reference herein and therein.

 

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You should not place undue reliance on these forward-looking statements, which are based on information available to us as of the date of this prospectus or the prospectus supplement, as applicable, including any documents incorporated by reference. Except as required by the federal securities laws, we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.

 

20

USE OF PROCEEDS

Unless otherwise specified in a prospectus supplement, we intend to use the net proceeds from the sale of our securities for general corporate purposes, which include investing in portfolio companies in accordance with our investment objective. We also expect to use the net proceeds of an offering to repay or repurchase outstanding indebtedness, if any, which may include indebtedness ($535.7 million aggregate principal amount outstanding as of June 22, 2021) under (a) the $350 million loan and security agreement of our wholly owned subsidiary Crescent Capital BDC Funding, LLC (the “SPV Asset Facility”) ($255.3 million outstanding as of June 22, 2021), (b) our $200 million revolving credit facility (the “Corporate Revolving Facility”) ($95.4 million outstanding as of June 22, 2021), (c) our $50 million in aggregate principal amount of unsecured notes (the “2023 Unsecured Notes”) that mature on July 30, 2023 ($50.0 million aggregate principal amount outstanding as of June 22, 2021) and (d) $135.0 million of unsecured notes (the “2026 Unsecured Notes”) that mature on February 17, 2026 ($135.0 million aggregate principal amount outstanding as of June 22, 2021.). See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Annual Report on Form 10-K.

The interest charged on the indebtedness incurred under the SPV Asset Facility is based on LIBOR plus an applicable spread between 1.65% or 2.20%, determined based on the proportion of liquid and illiquid loans pledged to the SPV Asset Facility. The stated maturity date for the SPV Asset Facility is March 10, 2025. The interest rate charged on the indebtedness incurred under the Corporate Facility is based on LIBOR plus 2.35% per annum. The stated maturity date of the Corporate Revolving Facility is August 20, 2024.

The interest charged on the 2023 Unsecured Notes and the 2026 Unsecured Notes is as follows: (a) 5.95% in the case of the 2023 Unsecured Notes and (b) 4.00% in the case of the 2026 Unsecured Notes. The 2023 Unsecured Notes mature on July 30, 2023 and the 2026 Unsecured Notes mature on February 17, 2026. The supplement to this prospectus relating to an offering may more fully identify the use of the proceeds from such offering.

We anticipate that substantially all of the net proceeds of an offering of securities pursuant to this prospectus and its related prospectus supplement will be used for the above purposes within three months of any such offering, depending on the availability of appropriate investment opportunities consistent with our investment objective, but no longer than within six months of any such offerings.

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 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. We may on occasion invest in larger or smaller companies. Our investments may include non-cash income features, including payment-in-kind interest and original issue discount. We may also invest in securities that are rated below investment grade (e.g., junk bonds) by rating agencies or that would be rated below investment grade if they were rated. We also may invest up to 30% of our portfolio in non-qualifying assets, as permitted by the 1940 Act. See “Regulation” below. Specifically, as part of this 30% basket, we may invest in entities that are not considered “eligible portfolio companies” (as defined in the 1940 Act), including companies located outside of the United States, entities that are operating pursuant to certain exceptions under the 1940 Act, and publicly traded entities whose public equity market capitalization exceeds the levels provided for under the 1940 Act. Pending such investments, we will invest a portion of the net proceeds primarily in cash, cash equivalents, U.S. government securities and other high-quality short-term investments. These securities generally earn yields substantially lower than the income that we anticipate receiving once we are fully invested in accordance with our investment objective. As a result, we may not, for a time, be able to achieve our investment objective and/or we may need to, for a time, decrease the amount of any dividend that we may pay to our stockholders to a level that is substantially lower than the level that we expect to pay when the net proceeds of offerings are fully invested in accordance with our investment objective. If we do not realize yields in excess of our expenses, we may incur operating losses and the market price of our common stock and debt securities may decline. See “Regulation—Temporary Investments” below for additional information about temporary investments we may make while waiting to make longer-term investments in pursuit of our investment objective.

 

21

PRICE RANGE OF COMMON STOCK AND DISTRIBUTIONS

Our common stock is traded on The NASDAQ Global Market under the symbol “CCAP.” Our common stock has historically traded at prices below our net asset value per share. It is not possible to predict whether our common stock will trade at, above or below net asset value. See “Risk Factors—Risks Relating to Our Common Stock—Our shares of common stock have traded at a discount from net asset value and may do so again in the future, which could limit our ability to raise additional equity capital” in our most recent Annual Report on Form 10-K.

The following table sets forth, for the first three quarters of the year ending December 31, 2020, the net asset value per share of our common stock, the range of high and low closing sales prices of our common stock, the closing sales price as a premium (discount) to net asset value and the dividends or other distributions declared by us. On June 22, 2021, the last reported closing sales price of our common stock on The NASDAQ Global Market was $19.40 per share, which represented a discount of approximately 4.2% to the net asset value per share reported by us as of March 31, 2021.

 

		Net Asset Value(1)				Price Range								High Sales Price Premium (Discount) to Net Asset Value(2)				Low Sales Price Premium (Discount) to Net Asset Value(2)				Cash Dividend Per Share(3)
						High				Low
Year ended December 31, 2020
First Quarter(4)		$	16.52			$	17.10			$	6.21				3.51	%			(62.4	)%		$	0.41
Second Quarter		$	18.12			$	13.25			$	8.68				(26.9	)%			(52.1	)%		$	0.41
Third Quarter		$	19.07			$	13.81			$	11.65				(27.6	)%			(38.9	)%		$	0.41
Fourth Quarter		$	19.88			$	15.25			$	12.40				(23.3	)%			(37.6	)%		$	0.41
Year ended December 31, 2021
First Quarter		$	20.24			$	18.17			$	14.72				(10.2	)%			(27.3	)%		$	0.41
Second Quarter (through June 22, 2021)			*			$	19.95			$	17.05				(1.4	)%			(15.8	)%		$	0.41

 

(1)	Net asset value per share is determined as of the last day in the relevant quarter and therefore may not reflect the net asset value per share on the date of the high and low closing sales prices. The net asset values shown are based on outstanding shares at the end of the relevant quarter.

(2)	Calculated as the respective high or low closing sales price less net asset value, divided by net asset value (in each case, as of the applicable quarter).

(3)	Represents the dividend or other distribution declared in the relevant quarter.

(4)	Shares of our common stock began trading on The NASDAQ Global Market under the symbol “CCAP” on February 3, 2020, in connection with our acquisition of Alcentra Capital Corporation. The price range for such quarter has been calculated as of such date.

*	Net asset value has not yet been calculated for this period.

To the extent that we have taxable income available, we distribute quarterly dividends to our stockholders. The amount of our dividends, if any, are determined by our Board. Dividends and other distributions are recorded on the record date. The amount to be paid out as a dividend is determined by the Board each quarter and is generally based upon the earnings estimated by management. Distributions will generally be paid from net investment income. Net realized capital gains, if any, are distributed at least annually, although we may decide to retain such capital gains for investment. If we do not generate sufficient net investment income during a year, all or part of a distribution may constitute a return of capital. The specific tax characteristics of our dividends and other distributions will be reported to stockholders after the end of each calendar year. Any dividends to our stockholders will be declared out of assets legally available for distribution.

We have elected to be treated as a BDC under the 1940 Act. We have also 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

 

22

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.

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. At our discretion, we 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 will accrue excise tax on estimated undistributed taxable income as required.

We intend to make distributions in cash unless a stockholder elects to receive dividends and/or long-term capital gains distributions in additional shares of common stock. We can offer no assurance that we will achieve results that will permit the payment of any cash distributions and, if we issue senior securities, we will be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the 1940 Act or if distributions are limited by the terms of any of our borrowings.

The following tables summarize our dividends declared and payable for the three months ended March 31, 2021 and the years ended December 31, 2020, 2019, 2018, 2017, 2016 and the period from February 5, 2015 to December 31, 2015(1):

 

Date Declared		Record Date		Payment Date		Per Share Amount
May 10, 2021		June 30, 2021		July 15, 2021		$	0.41
February 22, 2021		March 31, 2021		April 15, 2021		$	0.41
November 4, 2020		December 31, 2020		January 15, 2021		$	0.41
August 7, 2020		September 30, 2020		October 15, 2020		$	0.41
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
December 31, 2018		December 31, 2018		January 15, 2019		$	0.40
September 27, 2018		September 28, 2018		October 12, 2018		$	0.38
June 19, 2018		June 20, 2018		July 13, 2018		$	0.37
March 29, 2018		March 30, 2018		April 13, 2018		$	0.32

 

(1)	We were formed on February 5, 2015 and commenced operations on June 26, 2015.

We cannot assure you that we will achieve results that will permit the payment of any cash distributions. We maintain an “opt out” dividend reinvestment plan for our common stockholders. As a result, if we declare a cash dividend, stockholders’ cash dividends will be automatically reinvested in additional shares of our common stock, unless they specifically “opt out” of the dividend reinvestment plan so as to receive cash dividends. See “Dividend Reinvestment Plan” below.

 

23

SENIOR SECURITIES

Information about our senior securities (including preferred stock, debt securities and other indebtedness) is shown in the following table as of the dates indicated in the table below. The report of our independent registered public accounting firm, Ernst & Young LLP, on the senior securities table for each of the five years in the period ended December 31, 2020 and the period from February 5, 2015 (inception) through December 31, 2015 is attached as an exhibit to the registration statement of which this prospectus is a part.

 

Class and Year		Total Amount Outstanding Exclusive of Treasury Securities(1)				Asset Coverage Per Unit(2)				Involuntary Liquidating Preference Per Unit(3)				Average Market Value Per Unit(4)
SPV Asset Facility
Fiscal 2021 (As of March 31, 2021, unaudited)		$	272,510			$	2,163				—				N/A
Fiscal 2020		$	260,210			$	2,166				—				N/A
Fiscal 2019		$	220,687			$	2,250				—				N/A
Fiscal 2018		$	159,629			$	2,085				—				N/A
Fiscal 2017		$	86,629			$	2,135				—				N/A
Fiscal 2016		$	47,629			$	2,347				—				N/A
Fiscal 2015		$	—			$	—				—				N/A
Revolving Credit Facility(5)
Fiscal 2021 (As of March 31, 2021, unaudited)		$	—			$	—				—				N/A
Fiscal 2020		$	—			$	—				—				N/A
Fiscal 2019		$	—			$	—				—				N/A
Fiscal 2018		$	—			$	—				—				N/A
Fiscal 2017		$	—			$	—				—				N/A
Fiscal 2016		$	47,810			$	2,347				—				N/A
Fiscal 2015		$	54,810			$	2,415				—				N/A
Revolving Credit Facility II(6)
Fiscal 2021 (As of March 31, 2021, unaudited)		$	—			$	—				—				N/A
Fiscal 2020		$	—			$	—				—				N/A
Fiscal 2019		$	—			$	—				—				N/A
Fiscal 2018		$	78,310			$	2,085				—				N/A
Fiscal 2017		$	65,310			$	2,135				—				N/A
Fiscal 2016		$	—			$	—				—				N/A
Fiscal 2015		$	—			$	—				—				N/A
Corporate Revolving Facility
Fiscal 2021 (As of March 31, 2021, unaudited)		$	115,404			$	2,163				—				N/A
Fiscal 2020		$	149,904			$	2,166				—				N/A
Fiscal 2019		$	104,754			$	2,250				—				N/A
Fiscal 2018		$	—			$	—				—				N/A
Fiscal 2017		$	—			$	—				—				N/A
Fiscal 2016		$	—			$	—				—				N/A
Fiscal 2015		$	—			$	—				—				N/A
2023 Unsecured Notes
Fiscal 2021 (As of March 31, 2021, unaudited)		$	50,000			$	2,163				—				N/A
Fiscal 2020		$	50,000			$	2,166				—				N/A
Fiscal 2019		$	—			$	—				—				N/A
Fiscal 2018		$	—			$	—				—				N/A
Fiscal 2017		$	—			$	—				—				N/A
Fiscal 2016		$	—			$	—				—				N/A
Fiscal 2015		$	—			$	—				—				N/A

 

24

Class and Year		Total Amount Outstanding Exclusive of Treasury Securities(1)				Asset Coverage Per Unit(2)				Involuntary Liquidating Preference Per Unit(3)				Average Market Value Per Unit(4)
2026 Unsecured Notes
Fiscal 2021 (As of March 31, 2021, unaudited)		$	50,000			$	2,163				—				N/A
Fiscal 2020		$	—			$	—				—				N/A
Fiscal 2019		$	—			$	—				—				N/A
Fiscal 2018		$	—			$	—				—				N/A
Fiscal 2017		$	—			$	—				—				N/A
Fiscal 2016		$	—			$	—				—				N/A
Fiscal 2015		$	—			$	—				—				N/A
Internotes(7)
Fiscal 2021 (As of March 31, 2021, unaudited)		$	—			$	—				—				N/A
Fiscal 2020		$	16,418			$	2,166				—				N/A
Fiscal 2019		$	—			$	—				—				N/A
Fiscal 2018		$	—			$	—				—				N/A
Fiscal 2017		$	—			$	—				—				N/A
Fiscal 2016		$	—			$	—				—				N/A
Fiscal 2015		$	—			$	—				—				N/A

 

(1)	Total amount of each class of senior securities outstanding at principal value at the end of the period presented.

(2)

The asset coverage ratio for a class of senior securities representing indebtedness is calculated as (i) the sum of (A) total assets at end of period and (B) other liabilities excluding total debt outstanding and accrued borrowing expenses at end of period, divided by (ii) the sum of total debt outstanding and accrued borrowing expenses at the end of the period. This asset coverage ratio is multiplied by $1,000 to determine the “Asset Coverage Per Unit”.

(3)	The amount to which such class of senior security would be entitled upon our involuntary liquidation in preference to any security junior to it.

(4)	Not applicable.

(5)	Our $50 million revolving credit facility with Natixis, New York Branch, as administrative agent and certain of its affiliates as lenders, dated as of June 29, 2015, which has been paid down in full and was terminated on June 29, 2017.

(6)	Our $75 million revolving credit facility with Capital One, National Association, as Administrative Agent, Lead Arranger, Managing Agent and Committed Lender, dated as of June 29, 2017, which has been paid down in full and was terminated on August 20, 2019.

(7)	We redeemed or paid down the remaining $16.4 million of InterNotes® during the first quarter of 2021.

 

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PORTFOLIO COMPANIES

The following table describes each of the businesses included in our portfolio and reflects data as of March 31, 2021. Percentages shown for class of investment securities held by us represent percentage of the class owned and do not necessarily represent voting ownership. Percentages shown for equity securities, other than warrants or options, represent the actual percentage of the class of security held before dilution. Percentages shown for warrants and options held represent the percentage of class of security we may own assuming we exercise our warrants or options before dilution.

We have indicated by footnote portfolio companies (a) where we directly or indirectly own more than 25% of the outstanding voting securities of such portfolio company and, therefore, are presumed to be “controlled” by us under the 1940 Act and (b) where we directly or indirectly own 5% to 25% of the outstanding voting securities of such portfolio company or where we hold one or more seats on the portfolio company’s board of directors and, therefore, are deemed to be an “affiliated person” under the 1940 Act. We directly or indirectly own less than 5% of the outstanding voting securities of all other portfolio companies (or have no other affiliations with such portfolio companies) listed on the table. We offer to make significant managerial assistance to certain of our portfolio companies. Where we do not hold a seat on the portfolio company’s board of directors, we may receive rights to observe such board meetings.

Where we have indicated by footnote the amount of undrawn commitments to portfolio companies to fund various revolving and delayed draw senior secured and subordinated loans, such undrawn commitments are presented net of (i) standby letters of credit treated as drawn commitments because they are issued and outstanding, (ii) commitments substantially at our discretion and (iii) commitments that are unavailable due to borrowing base or other covenant restrictions.

 

26

PORTFOLIO COMPANIES

As of March 31, 2021

(dollar amounts in thousands)

(Unaudited)

 

Name and Address of Portfolio Company		Industry		Investment Type		Interest Term		Maturity/ Dissolution Date				Principal Amount, Par Value or Shares				Cost				Fair Value				Percentage of Class Held
Abode Healthcare, Inc. 1099 Main Avenue, Suite 2000, Durango, CO 81301		Health Care Equipment & Services		Senior Secured First Lien Revolver		L + 525 (100 Floor)			08/2025			$	—			$	(17	)		$	—
				Senior Secured First Lien Term Loan		L + 525 (100 Floor)			08/2025			$	1,995			$	1,956			$	1,995
				Senior Secured First Lien Term Loan		L + 525 (100 Floor)			08/2025			$	4,728			$	4,655			$	4,728
Aegis Sciences Corporation 515 Great Circle Road, Nashville, TN 37228		Health Care Equipment & Services		Senior Secured First Lien Term Loan		L + 550 (100 Floor)			05/2025			$	7,249			$	6,861			$	6,760
Affinitiv, Inc. 300 S. Wacker, Suite 900, Chicago, IL 60606		Software & Services		Unitranche First Lien Revolver		L + 600 (100 Floor)			08/2024			$	—			$	(7	)		$	—
				Unitranche First Lien Term Loan		L + 600 (100 Floor)			08/2024			$	6,419			$	6,338			$	6,419
Alion Science and Technology Corporation 1750 Tysons Boulevard Ste 1300, McLean, VA 22102		Capital Goods		Common Stock									745,504			$	766			$	1,619				0.15	%
Allied Universal holdings, LLC 161 Washington Street, Suite 600, Conshohocken, PA 19428		Commercial & Professional Services		Common Stock, Class A									2,242,341			$	1,011			$	2,806				0.07	%
Ameda, Inc. 485 Half Day Rd. #320, Buffalo Grove, IL 60089		Health Care Equipment & Services		Senior Secured First Lien Revolver		L + 700 (100 Floor)			09/2022			$	188			$	186			$	167
				Senior Secured First Lien Term Loan		L + 700 (100 Floor)			09/2022			$	2,194			$	2,181			$	2,042
Anne Arundel Dermatology Management, LLC 1306 Concourse Dr, 201, Linthicum Heights, MD 21090		Health Care Equipment & Services		Senior Secured First Lien Delayed Draw Term Loan		L + 600 (100 Floor)			10/2025			$	800			$	770			$	800
				Senior Secured First Lien Revolver		L + 600 (100 Floor)			10/2025			$	—			$	(10	)		$	—
				Senior Secured First Lien Term Loan		L + 600 (100 Floor)			10/2025			$	2,444			$	2,399			$	2,444
Ansira Partners, Inc. 2300 Locust Street, St. Louis, MO 63103		Software & Services		Unitranche First Lien Delayed Draw Term Loan		L + 650 PIK			12/2024			$	983			$	931			$	726
				Unitranche First Lien Term Loan		L + 650 PIK			12/2024			$	7,252			$	6,687			$	5,355
ASP MCS Acquisition Corp.(4) 350 Highland Drive, Lewisville, TX 75067		Commercial & Professional Services		Senior Secured Second Lien Term Loan		L + 600 (100 Floor)			10/2025			$	294			$	272			$	292

 

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Name and Address of Portfolio Company		Industry		Investment Type		Interest Term		Maturity/ Dissolution Date				Principal Amount, Par Value or Shares				Cost				Fair Value				Percentage of Class Held
				Common Stock									11,792			$	1,150			$	1,722				1.18	%
Auction Technology Group(1) The Harlequin Building, 65 Southwark Street, London, SE1 0HR		Consumer Services		Unitranche First Lien Term Loan		L + 650			02/2027			£	1,158.0			$	1,471			$	1,613
				Unitranche First Lien Revolver		L + 650			08/2026			£	—			$	—			$	42
				Unitranche First Lien Term Loan		L + 650			02/2027			$	6,253			$	6,089			$	6,315
Auto-Vehicle Parts, LLC 100 Homan Drive, Cold Spring, KY 41076		Automobiles & Components		Senior Secured First Lien Revolver		L + 450 (100 Floor)			01/2023			$	—			$	(3	)		$	(9	)
				Senior Secured First Lien Term Loan		L + 450 (100 Floor)			01/2023			$	4,554			$	4,527			$	4,489
Avaap USA LLC 510 Thornall Street, Suite 250, Edison, NJ 08837		Software & Services		Senior Secured First Lien Delayed Draw Term Loan		L + 650 (100 Floor)			03/2023			$	343			$	340			$	340
				Senior Secured First Lien Revolver		L + 650 (100 Floor)			03/2023			$	—			$	(6	)		$	(5	)
				Senior Secured First Lien Term Loan		L + 650 (100 Floor)			03/2023			$	3,760			$	3,722			$	3,730
Avalign Technologies, Inc. 2275 Half Day Rd. Suite 126, Bannockburn, IL 60015		Health Care Equipment & Services		Senior Secured First Lien Term Loan		L + 450			12/2025			$	16,794			$	16,672			$	16,587
BAART Programs, Inc. 1720 Lakepointe Dr., Suite 117, Lewisville, TX 75057		Health Care Equipment & Services		Senior Secured Second Lien Delayed Draw Term Loan		L + 800 (100 Floor)			03/2025			$	1,000			$	957			$	1,000
				Senior Secured Second Lien Term Loan		L + 825 (100 Floor)			03/2025			$	7,000			$	6,700			$	7,000
Battery Solutions, Inc.(4) 4930 Holtz Dr, Wixom, MI 48393		Commercial & Professional Services		Unsecured Debt		1200 + 200 PIK			11/2021			$	1,294			$	1,284			$	1,173
				Preferred Stock, Class E									5,381,776			$	3,669			$	779				41.67	%
				Preferred Stock, Class A									50,000			$	—			$	—				12.84	%
				Preferred Stock, Class F									3,333,333			$	—			$	—				8.29	%
Benesys Inc. 700 Tower Drive, Suite 300, Troy, MI 48098		Software & Services		Senior Secured First Lien Term Loan		L + 475 (100 Floor)			10/2024			$	299			$	294			$	296
				Senior Secured First Lien Revolver		L + 475 (100 Floor)			10/2024			$	—			$	(1	)		$	(2	)
				Senior Secured First Lien Term Loan		L + 475 (100 Floor)			10/2024			$	1,411			$	1,397			$	1,393
BJ Services, LLC(2) 11211 FM 2920 Rd. Tomball, TX 77375		Energy		Unitranche First Lien—Last Out Term Loan		L + 1033 (100 Floor)			01/2023			$	8,075			$	8,014			$	5,732

 

28

Name and Address of Portfolio Company		Industry		Investment Type		Interest Term		Maturity/ Dissolution Date				Principal Amount, Par Value or Shares				Cost				Fair Value				Percentage of Class Held
				Unitranche First Lien Term Loan		L + 700 (150 Floor)			01/2023			$	1,880			$	1,870			$	1,880
BJH Holdings III Corp. 124 West Oxmoor Road, Birmingham, AL 35209		Consumer Services		Unitranche First Lien Term Loan		L + 525 (100 Floor)			08/2025			$	13,119			$	12,967			$	13,053
Black Diamond Oilfield Rentals, LLC 9595 Six Pines Dr, #8210, The Woodlands, TX 77380		Energy		Senior Secured First Lien Term Loan		L + 650 (100 Floor)			09/2021			$	10,101			$	10,066			$	9,670
C-4 Analytics, LLC 999 Broadway, Suite 500, Saugus, MA 01906		Software & Services		Senior Secured First Lien Revolver		L + 525 (100 Floor)			08/2023			$	—			$	(4	)		$	—
				Senior Secured First Lien Term Loan		L + 525 (100 Floor)			08/2023			$	9,890			$	9,813			$	9,890
CAT Buyer, LLC 165 N Arlington Heights Rd, Suite 101, Buffalo Grove, IL 60089		Software & Services		Unitranche First Lien Revolver		L + 550 (100 Floor)			04/2024			$	—			$	(8	)		$	(13	)
				Unitranche First Lien Term Loan		L + 550 (100 Floor)			04/2024			$	6,223			$	6,144			$	6,072
CBDC Senior Loan Fund LLC(1)(3) 11100 Santa Monica Blvd, Suite 2000, Los Angeles, CA 90025		Diversified Financials		Partnership Interest									40,000,000			$	40,000			$	39,344				50.00	%
Centria Subsidiary Holdings, LLC 27777 Inkster Rd., Suite 100, Farmington Hills, MI 48334		Health Care Equipment & Services		Unitranche First Lien Revolver		L + 600 (100 Floor)			12/2025			$	—			$	(46	)		$	6
				Unitranche First Lien Term Loan		L + 600 (100 Floor)			12/2025			$	11,724			$	11,436			$	11,762
				Common Stock									11,910			$	1,191			$	1,407				0.43	%
CHA Holdings, Inc. 575 Broadway, Suite 301, Albany, NY 12207		Commercial & Professional Services		Senior Secured First Lien Delayed Draw Term Loan		L + 450 (100 Floor)			04/2025			$	1,011			$	1,008			$	1,002
				Senior Secured First Lien Term Loan		L + 450 (100 Floor)			04/2025			$	4,793			$	4,778			$	4,754
Claritas, LLC 8044 Montgomery Road, Suite 455, Cincinnati, OH 45236		Software & Services		Senior Secured First Lien Revolver		L + 600 (100 Floor)			12/2023			$	37			$	36			$	37
				Senior Secured First Lien Term Loan		L + 600 (100 Floor)			12/2023			$	1,085			$	1,079			$	1,085
Colibri Group LLC 12977 North Outer Forty, St. Louis, MO 63141		Consumer Services		Unitranche First Lien Delayed Draw Term Loan		L + 575 (100 Floor)			05/2025			$	1,333			$	1,310			$	1,346
				Unitranche First Lien Revolver		L + 575 (100 Floor)			05/2025			$	—			$	(17	)		$	10
				Unitranche First Lien Term Loan		L + 575 (100 Floor)			05/2025			$	8,106			$	7,958			$	8,187
Comet Acquisition, Inc. 1277 Treat Boulevard, Suite 800, Walnut Creek, CA 94597		Insurance		Senior Secured Second Lien Term Loan		L + 750			10/2026			$	1,782			$	1,778			$	1,739

 

29

Name and Address of Portfolio Company		Industry		Investment Type		Interest Term		Maturity/ Dissolution Date				Principal Amount, Par Value or Shares				Cost				Fair Value				Percentage of Class Held
Conisus, LLC(4) 1300 Parkwood Circle SE, Suite 450A, Atlanta, GA 30339		Media & Entertainment		Common Stock									4,914,556			$	—			$	5,011				15.79	%
				Preferred Stock, Series B		1500 PIK							19,013,276			$	10,629			$	19,013				50.00	%
Consolidated Label Co., LLC 2001 E Lake Mary Blvd, Sanford, FL 32773		Commercial & Professional Services		Senior Secured First Lien Revolver		L + 575 (100 Floor)			07/2026			$	—			$	(11	)		$	13
				Senior Secured First Lien Term Loan		L + 575 (100 Floor)			07/2026			$	4,328			$	4,250			$	4,415
Continental Battery Company 4919 Woodall St. Dallas, TX 75247		Automobiles & Components		Unitranche First Lien Term Loan		L + 600 (100 Floor)			1/2027			$	—			$	(26	)		$	4
				Unitranche First Lien Term Loan		L + 600 (100 Floor)			1/2027			$	7,321			$	7,178			$	7,331
CRA MSO, LLC 835 Third Avenue, Suite A, Chula Vista, CA 91911		Health Care Equipment & Services		Senior Secured First Lien Revolver		L + 700 (100 Floor)			12/2023			$	60			$	58			$	51
				Senior Secured First Lien Term Loan		L + 700 (100 Floor)			12/2023			$	1,222			$	1,208			$	1,169
Crusoe Bidco Limited(1) Skyguard House, 457 Kingston Road, Epsom, Surrey, KT19 0DB		Commercial & Professional Services		Unitranche First Lien Delayed Draw Term Loan		L + 625			12/2025			£	272			$	399			$	419
				Unitranche First Lien Delayed Draw Term Loan		L + 625			12/2025			£	99			$	—			$	—
				Unitranche First Lien Term Loan		L + 625			12/2025			£	6,067			$	7,439			$	8,371
Curvature 5910 Landerbrook Drive, Cleveland, OH 44124		Software & Services		Residual Interest									1,975,461			$	1,976			$	1,976				0.05	%
Digital Room Holdings, Inc. 8000 Haskell Avenue, Van Nuys, CA 91406		Commercial & Professional Services		Senior Secured First Lien Term Loan		L + 500			05/2026			$	6,877			$	6,597			$	6,771
EiKo Global, LLC 23220 W 84th Street, Shawnee, KS 66227		Consumer Durables & Apparel		Senior Secured First Lien Revolver		L + 600 (100 Floor)			06/2023			$	—			$	(7	)		$	—
				Senior Secured First Lien Term Loan		L + 600 (100 Floor)			06/2023			$	3,215			$	3,183			$	3,215
Empire Auto Parts, LLC 15 Jackson Road, Totowa, NJ 07512		Automobiles & Components		Unitranche First Lien Revolver		L + 550 (100 Floor)			09/2024			$	—			$	(5	)		$	(3	)
				Unitranche First Lien Term Loan		L + 550 (100 Floor)			09/2024			$	2,438			$	2,407			$	2,421
				Unitranche First Lien Term Loan		L + 550 (100 Floor)			09/2024			$	2,364			$	2,330			$	2,348
Envocore Holding, LLC 750 MD Route 3 South, Suite 19, Gambrills, MD 21054		Capital Goods		Senior Secured First Lien Term Loan		L + 900 (200 Floor) (including 350 PIK)			06/2022			$	18,703			$	15,996			$	13,193
				Preferred Stock									1,139,725			$	—			$	—				1.27	%

 

30