x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
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Maryland
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27-2614444
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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|
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405 Park Avenue, 14th Floor
New York, New York
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10022
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(Address of Principal Executive Office)
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(Zip Code)
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
x
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Smaller reporting company
o
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Page
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PART I
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Item 4.
Mine Safety Disclosures
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PART II
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PART III
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PART IV
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•
|
our future operating results;
|
•
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our business prospects and the prospects of our portfolio companies;
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•
|
the impact of the investments that we expect to make;
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•
|
the ability of our portfolio companies to achieve their objectives;
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•
|
our expected financings and investments;
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•
|
the adequacy of our cash resources and working capital;
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•
|
the timing of cash flows, if any, from the operations of our portfolio companies;
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•
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our repurchase of shares;
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•
|
actual and potential conflicts of interest with our Adviser and its affiliates;
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•
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the dependence of our future success on the general economy and its effect on the industries in which we invest;
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•
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the ability to qualify and maintain our qualification as a regulated investment company (“RIC”) and a business development company (“BDC”); and
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•
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the impact on our business of Dodd-Frank and the rules and regulations issued thereunder.
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•
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changes in the economy;
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•
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risks associated with possible disruption in our operations or the economy generally due to terrorism or natural disasters; and
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•
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future changes in laws or regulations and conditions in our operating areas.
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•
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Large pool of uninvested private equity capital likely to seek additional capital to support private investments.
We believe there remains a large pool of uninvested private equity capital available to middle market companies. We expect that private equity firms will be active investors in middle market companies and that these private equity firms will seek to supplement their equity investments with senior secured and mezzanine debt and equity co-investments from other sources, such as us.
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•
|
Credit crises and consolidation among commercial banks has reduced their focus on middle market businesses.
The commercial banks in the United States, which have traditionally been the primary source of capital to middle market companies, have experienced consolidation, unprecedented loan losses, capital impairments and stricter regulatory scrutiny, which has led to a significant tightening of credit standards and substantially reduced loan volume to the middle market. Many financial institutions that have historically loaned to middle market companies have failed or been acquired, and we believe that larger financial institutions are now more focused on syndicated lending to larger corporations and are allocating capital to business lines that generate fee income and involve less balance sheet risk.
|
•
|
Refinancing activities will provide continued opportunities to extend capital to middle market companies.
A significant volume of senior secured and mezzanine debt is expected to come due over the next several years. As companies seek to refinance their debt, we believe this will create new financing opportunities for us.
|
•
|
Lower default rates and higher recovery rates in the middle market.
Default rates remain relatively low, with generally higher recovery rates in the middle market. Middle market companies are generally over-equitized as compared to large cap companies.
|
•
|
Favorable Pricing Environment in the Loan Market.
Lower valuation levels in certain situations, combined with reduced liquidity in the secondary loan market, have created opportunities to acquire relatively high yielding senior and subordinated debt, both secured and unsecured, at potentially attractive prices.
|
•
|
Utilize the experience and expertise of the principals of our Adviser.
Our sponsors directly or indirectly sponsors one other public, non-listed BDC and several public, non-listed real estate investment trusts ("REIT"). Certain principals of our Adviser have a broad network of contacts with financial sponsors, commercial and investment banks and leaders within a number of industries that we believe will produce significant proprietary investment opportunities outside the normal banking auction process.
|
•
|
Focus on middle market companies with stable cash flow.
We believe that the middle market is less competitive and this is one factor that allows us to negotiate favorable investment terms. Such favorable terms include higher debt yields, more significant covenant protection and greater equity participation than typical of transactions involving larger companies. We generally invest in established companies with positive cash flow. We believe these companies possess better risk-adjusted return profiles than newer companies that are building management expertise or in the early stages of building a revenue base. These middle market companies represent a significant portion of the U.S. economy and often require substantial capital investment to grow their businesses.
|
•
|
Employ disciplined underwriting policies and rigorous portfolio management.
We employ an extensive underwriting process that includes a review of the investment memo, competitive position, financial performance and industry dynamics of each potential portfolio company. In addition, we perform substantial due diligence on potential investments, and seek to invest with management teams and/or private equity sponsors who have proven capabilities in building value. As part of the monitoring process for portfolio companies, our Adviser analyzes monthly (if available), quarterly, and annual financial statements versus the previous periods and year, review financial projections, and may perform other procedures including meeting with management, attending board meetings and reviewing compliance certificates and covenants.
|
•
|
Focus on long-term credit performance and principal protection.
We structure our customized loan investments on a relatively conservative basis with high cash yields, security interests (preferably first lien) where possible, cash origination fees, and appropriate leverage levels. We seek strong deal protections for our customized debt investments, including default penalties, information rights, board observation rights, and affirmative, negative and financial covenants, such as lien protection and prohibitions against change of control. We believe these protections will reduce our risk of capital loss.
|
•
|
Diversification.
We seek to diversify our portfolio broadly among issuers in a multitude of different industries, thereby reducing the concentration of credit risk in any one company or sector of the economy. We cannot guarantee that we will be successful in this effort.
|
•
|
Company-specific research and analysis; and
|
•
|
An emphasis on capital preservation, low volatility, diversification and minimization of downside risk.
|
•
|
A comprehensive analysis of issuer creditworthiness, including a quantitative and qualitative assessment of the company’s business;
|
•
|
An evaluation of the management team and support from equity investors;
|
•
|
An assessment of the competitive landscape;
|
•
|
An analysis of business strategy and long-term industry trends; and
|
•
|
An in-depth examination of capital structure, financial results and financial projections.
|
•
|
Established companies with a history of positive and stable operating cash flows.
We seek to invest in established companies with sound historical financial performance. We typically focus on companies with a history of profitability.
|
•
|
Ability to exert meaningful influence.
We target investment opportunities in which we will be the lead investor where we can add value through active participation. Our focus is on first lien investments.
|
•
|
Experienced management team.
We generally will require that our portfolio companies have an experienced management team. We also seek to invest in companies that have a strong equity incentive program in place that properly aligns the interests of management with its investors.
|
•
|
Strong franchises and sustainable competitive advantages.
We seek to invest in companies with proven products and/or services and strong regional or national operations.
|
•
|
Diverse customer bases and product offerings.
We seek to invest in companies with diverse customer bases and product offerings.
|
•
|
Meeting with senior management to understand the business more fully and evaluate the ability of the senior management team;
|
•
|
Checking management backgrounds and references;
|
•
|
Performing a detailed review of financial performance and potential for earnings growth;
|
•
|
Commissioning a quality of earnings report;
|
•
|
Visiting the headquarters and conducting other site diligence;
|
•
|
Contacting customers and vendors to assess both business prospects and industry practices;
|
•
|
Conducting a competitive analysis, and comparing the company to its main competitors;
|
•
|
Researching industry and relevant publications to understand industry wide growth trends;
|
•
|
Assessing asset value and the ability of physical infrastructure and information systems to handle anticipated growth; and
|
•
|
Investigating legal risks and financial and accounting systems; and
|
•
|
Engaging third party experts and consultants to assist in the due diligence process.
|
•
|
Assessment of success in adhering to the portfolio company’s business plan and compliance with covenants;
|
•
|
Regular contact with portfolio company management and, if appropriate, the financial or strategic sponsor, to discuss financial position, requirements and accomplishments;
|
•
|
Attendance at and participation in board meetings of the portfolio company (if available); and
|
•
|
Review of monthly (if available), quarterly, and annual financial statements and financial projections for the portfolio company.
|
•
|
Each portfolio company or investment will be valued by the Adviser, potentially with assistance from one or more independent valuation firms engaged by our board of directors;
|
•
|
The independent valuation firm(s), if involved, will conduct independent appraisals and make an independent assessment of the value of each investment; and
|
•
|
Our board of directors determines the fair value of each investment, in good faith, based on the input of our Adviser, independent valuation firm (to the extent applicable) and the audit committee of our board of directors.
|
•
|
the net asset value of our common stock disclosed in the most recent periodic report we filed with the SEC;
|
•
|
our adviser’s assessment of whether any material change in the net asset value of our common stock has occurred (including through the realization of net gains on the sale of our portfolio investments) from the period beginning on the date of the most recently disclosed net asset value to the period ending two days prior to the date of the closing on and sale of our common stock; and
|
•
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the magnitude of the difference between the net asset value disclosed in the most recent periodic report we filed with the SEC and our adviser’s assessment of any material change in the net asset value since the date of the most recently disclosed net asset value, and the offering price of the shares of our common stock at the date of closing.
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•
|
meet the Annual Distribution Requirement;
|
•
|
qualify to be treated as a BDC or be registered as a management investment company under the 1940 Act at all times during each taxable year;
|
•
|
derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to certain securities loans, gains from the sale or other disposition of stock or other securities or currencies or other income derived with respect to our business of investing in such stock, securities or currencies and net income derived from an interest in a “qualified publicly traded partnership” (as defined in the Code), or the 90% Income Test; and
|
•
|
diversify our holdings so that at the end of each quarter of the taxable year: (i) at least 50% of the value of our assets consists of cash, cash equivalents, U.S. Government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer (which for these purposes includes the equity securities of a “qualified publicly traded partnership”); and (ii) no more than 25% of the value of our assets is invested in the securities, other than U.S. Government securities or securities of other RICs, (i) of one issuer (ii) of two or more issuers that are controlled, as determined under applicable tax rules, by us and that are engaged in the same or similar or related trades or businesses or (iii) of one or more “qualified publicly traded partnerships,” or the Diversification Tests.
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|
.
|
Determines the composition and allocation of our portfolio, the nature and timing of the changes therein and the manner of implementing such changes;
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|
.
|
Identifies, evaluates and negotiates the structure of the investments we make;
|
|
.
|
Executes, monitors and services our investments;
|
|
.
|
Determines the securities and other assets that we will purchase, retain, or sell;
|
|
.
|
Performs due diligence on prospective portfolio companies; and
|
|
.
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Provides us with such other investment advisory, research and related services as we may, from time to time, reasonably require for the investment of our funds.
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|
.
|
No subordinated incentive fee on income shall be payable to the Adviser in any calendar quarter in which our pre-incentive fee net investment income does not exceed the preferred return rate of 1.75% or 7.00% annualized, the “preferred return” on adjusted capital;
|
|
.
|
100% of our pre-incentive fee net investment income, if any, that exceeds the preferred return but is less than or equal to 2.1875% in any calendar quarter (8.75% annualized) shall be payable to the Adviser. This portion of the subordinated incentive fee on income is referred to as the “catch up” and is intended to provide the Adviser with an incentive fee of 20% on all of our pre-incentive fee net investment income when the pre-incentive fee net investment income reaches 2.1875% (8.75% annualized) in any calendar quarter; and
|
|
.
|
For any quarter in which our pre-incentive fee net investment income exceeds 2.1875% (8.75% annualized), the subordinated incentive fee on income shall equal 20% of the amount of our pre-incentive fee net investment income, as the preferred return and catch-up will have been achieved.
|
•
|
Our Adviser and its respective affiliates must allocate their time between advising us and managing other investment activities and business activities in which they may be involved, including, with respect to the Adviser, the other programs sponsored by affiliates of AR Capital, as well as any programs that may be sponsored by such affiliates in the future;
|
•
|
The compensation payable by us to our Adviser and its affiliates will be approved by our board of directors consistent with the exercise of the requisite standard of care applicable to directors under Maryland law and the 1940 Act. Such compensation is payable, in most cases, whether or not our stockholders receive distributions and may be based in part on the value of assets acquired with leverage;
|
•
|
Regardless of the quality of the assets acquired, the services provided to us or whether we pay distributions to our stockholders, our Adviser will receive certain fees in connection with the management and sale of our portfolio companies; and
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•
|
Our Adviser and its respective affiliates are not restricted from forming additional investment funds, from entering into other investment advisory relationships or from engaging in other business activities, even though such activities may be in competition with us and/or may involve substantial time and resources of our Adviser and its affiliates.
|
•
|
Our Adviser and its affiliates serve or may serve as investment adviser to funds that operate in the same or a related line of business as we do. Accordingly, they may have obligations to investors in those funds, the fulfillment of which might not be in the best interests of us or our stockholders. For example, our Adviser may face conflicts of interest in the allocation of investment opportunities to us and such other funds. As discussed above, the 1940 Act prohibits us from making certain co-investments with affiliates unless we receive an order from the SEC permitting us to do so. We, our Adviser, and certain of our affiliates have submitted an exemptive application to the SEC for such an order but there can be no assurance that any such exemptive order will be obtained.
|
•
|
may have limited financial resources and may be unable to meet their obligations under their debt securities that we hold, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of us realizing any guarantees we may have obtained in connection with our investment;
|
•
|
have shorter operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render them more vulnerable to competitors’ actions and changing market conditions, as well as general economic downturns;
|
•
|
are more likely to depend on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on our portfolio company and, in turn, on us;
|
•
|
generally have less predictable operating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position. In addition, our executive officers and directors and employees of our Adviser may, in the ordinary course of business, be named as defendants in litigation arising from our investments in the portfolio companies; and
|
•
|
may have difficulty accessing the capital markets to meet future capital needs, which may limit their ability to grow or to repay their outstanding indebtedness upon maturity.
|
Assumed Return on Our Portfolio (net of expenses)
|
|
(10)%
|
|
(5)%
|
|
- %
|
|
5%
|
|
10%
|
Corresponding return to stockholders
(1)
|
|
(16.51)%
|
|
(8.87)%
|
|
(1.23)%
|
|
6.41%
|
|
14.05%
|
•
|
The annual distribution requirement for a RIC will be satisfied if we distribute to our stockholders on an annual basis at least 90% of our net ordinary income and net short-term capital gain in excess of net long-term capital loss, if any. We may be subject to corporate-level U.S. federal income tax on any of our undistributed income or gain. Additionally, we will be subject to a 4% nondeductible federal excise tax to the extent that we do not satisfy certain additional minimum distribution requirements on a calendar-year basis. Because we use debt financing, we are subject to an asset coverage ratio requirement under the 1940 Act and may in the future become subject to certain financial covenants under loan and credit agreements that could, under certain circumstances, restrict us from making distributions necessary to satisfy the distribution requirement. If we are unable to obtain cash from other sources, we could fail to qualify for RIC tax treatment and thus become subject to corporate-level income tax.
|
•
|
The income source requirement will be satisfied if we obtain at least 90% of our gross income for each year from distributions, interest, gains from the sale of stock or securities or similar sources.
|
•
|
The asset diversification requirement will be satisfied if we meet certain asset diversification requirements at the end of each quarter of our taxable year. To satisfy this requirement, at least 50% of the value of our assets must consist of cash, cash equivalents, U.S. Government securities, securities of other RICs, and other acceptable securities; and no more than 25% of the value of our assets can be invested in the securities, other than U.S. government securities or securities of other RICs, of one issuer, of two or more issuers that are controlled, as determined under applicable Code rules, by us and that are engaged in the same or similar or related trades or businesses or of certain “qualified publicly traded partnerships.” Failure to meet these requirements may result in our having to dispose of certain investments quickly in order to prevent the loss of RIC status. Because most of our investments will be in private companies, and therefore will be relatively illiquid, any such dispositions could be made at disadvantageous prices and could result in substantial losses.
|
Title of Class
|
|
Amount Authorized
|
|
Amount Issued
|
Common Stock, par value $0.001 per share
|
|
450,000,000
|
|
157,534,040
|
Record Date
|
|
Payment Date
|
|
Per share
|
|
Distributions Paid in Cash
|
|
Distributions Paid Through the DRIP
|
|
Total Distributions Paid
|
||||||||
2011:
|
|
|
|
|
|
|
|
|
|
|
||||||||
September 30, 2011
|
|
October 3, 2011
|
|
$
|
0.07
|
|
|
$
|
13
|
|
|
$
|
13
|
|
|
$
|
26
|
|
October 31, 2011
|
|
November 1, 2011
|
|
0.07
|
|
|
20
|
|
|
14
|
|
|
34
|
|
||||
November 30, 2011
|
|
December 1, 2011
|
|
0.06
|
|
|
25
|
|
|
17
|
|
|
42
|
|
||||
December 31, 2011
|
|
January 3, 2012
|
|
0.06
|
|
|
35
|
|
|
21
|
|
|
56
|
|
||||
|
|
|
|
|
|
$
|
93
|
|
|
$
|
65
|
|
|
$
|
158
|
|
||
2012:
|
|
|
|
|
|
|
|
|
|
|
||||||||
January 31, 2012
|
|
February 1, 2012
|
|
$
|
0.06
|
|
|
$
|
47
|
|
|
$
|
26
|
|
|
$
|
73
|
|
February 29, 2012
|
|
March 1, 2012
|
|
0.06
|
|
|
80
|
|
|
34
|
|
|
114
|
|
||||
March 31, 2012
|
|
April 2, 2012
|
|
0.06
|
|
|
118
|
|
|
48
|
|
|
166
|
|
||||
April 30, 2012
|
|
May 1, 2012
|
|
0.06
|
|
|
157
|
|
|
65
|
|
|
222
|
|
||||
May 31, 2012
|
|
June 1, 2012
|
|
0.07
|
|
|
289
|
|
|
91
|
|
|
380
|
|
||||
June 30, 2012
|
|
July 2, 2012
|
|
0.06
|
|
|
313
|
|
|
113
|
|
|
426
|
|
||||
July 31, 2012
|
|
August 1, 2012
|
|
0.07
|
|
|
361
|
|
|
146
|
|
|
507
|
|
||||
August 31, 2012
|
|
September 4, 2012
|
|
0.07
|
|
|
394
|
|
|
173
|
|
|
567
|
|
||||
September 30, 2012
|
|
October 1, 2012
|
|
0.06
|
|
|
429
|
|
|
203
|
|
|
632
|
|
||||
October 31, 2012
|
|
November 1, 2012
|
|
0.07
|
|
|
505
|
|
|
247
|
|
|
752
|
|
||||
November 30, 2012
|
|
December 3, 2012
|
|
0.07
|
|
|
612
|
|
|
287
|
|
|
899
|
|
||||
December 17, 2012
|
|
December 27, 2012
|
|
0.09
|
|
|
917
|
|
|
462
|
|
|
1,379
|
|
||||
December 31, 2012
|
|
January 2, 2013
|
|
0.07
|
|
|
682
|
|
|
341
|
|
|
1,023
|
|
||||
|
|
|
|
|
|
$
|
4,904
|
|
|
$
|
2,236
|
|
|
$
|
7,140
|
|
||
2013:
|
|
|
|
|
|
|
|
|
|
|
||||||||
January 31, 2013
|
|
February 1, 2013
|
|
$
|
0.07
|
|
|
$
|
787
|
|
|
$
|
395
|
|
|
$
|
1,182
|
|
February 28, 2013
|
|
March 1, 2013
|
|
0.06
|
|
|
797
|
|
|
408
|
|
|
1,205
|
|
||||
March 31, 2013
|
|
April 1, 2013
|
|
0.07
|
|
|
1,008
|
|
|
525
|
|
|
1,533
|
|
||||
April 30, 2013
|
|
May 1, 2013
|
|
0.07
|
|
|
1,098
|
|
|
590
|
|
|
1,688
|
|
||||
May 31, 2013
|
|
June 3, 2013
|
|
0.07
|
|
|
1,276
|
|
|
755
|
|
|
2,031
|
|
||||
June 30, 2013
|
|
July 1, 2013
|
|
0.07
|
|
|
1,396
|
|
|
893
|
|
|
2,289
|
|
||||
July 31, 2013
|
|
August 1, 2013
|
|
0.07
|
|
|
1,608
|
|
|
1,071
|
|
|
2,679
|
|
Record Date
|
|
Payment Date
|
|
Per share
|
|
Distributions Paid in Cash
|
|
Distributions Paid Through the DRIP
|
|
Total Distributions Paid
|
||||||||
August 31, 2013
|
|
September 2, 2013
|
|
0.07
|
|
|
1,764
|
|
|
1,285
|
|
|
3,049
|
|
||||
September 30, 2013
|
|
October 1, 2013
|
|
0.07
|
|
|
1,868
|
|
|
1,408
|
|
|
3,276
|
|
||||
October 31, 2013
|
|
November 1, 2013
|
|
0.07
|
|
|
2,092
|
|
|
1,673
|
|
|
3,765
|
|
||||
November 30, 2013
|
|
December 2, 2013
|
|
0.07
|
|
|
2,225
|
|
|
1,799
|
|
|
4,024
|
|
||||
December 31, 2013
|
|
January 2, 2014
|
|
0.07
|
|
|
2,504
|
|
|
2,074
|
|
|
4,578
|
|
||||
|
|
|
|
|
|
$
|
18,423
|
|
|
$
|
12,876
|
|
|
$
|
31,299
|
|
||
2014:
|
|
|
|
|
|
|
|
|
|
|
||||||||
January 31, 2014
|
|
February 4, 2014
|
|
$
|
0.07
|
|
|
$
|
2,717
|
|
|
$
|
2,317
|
|
|
$
|
5,034
|
|
February 28, 2014
|
|
March 3, 2014
|
|
0.06
|
|
|
2,751
|
|
|
2,399
|
|
|
5,150
|
|
||||
March 31, 2014
|
|
April 1, 2014
|
|
0.07
|
|
|
3,499
|
|
|
3,197
|
|
|
6,696
|
|
||||
April 30, 2014
|
|
May 1, 2014
|
|
0.07
|
|
|
3,816
|
|
|
3,610
|
|
|
7,426
|
|
||||
May 30, 2014
|
|
June 2, 2014
|
|
0.07
|
|
|
4,383
|
|
|
4,244
|
|
|
8,627
|
|
||||
June 30, 2014
|
|
July 1, 2014
|
|
0.07
|
|
|
4,584
|
|
|
4,533
|
|
|
9,117
|
|
||||
July 31, 2014
|
|
August 1, 2014
|
|
0.07
|
|
|
5,029
|
|
|
4,986
|
|
|
10,015
|
|
||||
August 29, 2014
|
|
September 1, 2014
|
|
0.07
|
|
|
5,160
|
|
|
5,097
|
|
|
10,257
|
|
||||
September 30, 2014
|
|
October 2, 2014
|
|
0.07
|
|
|
5,198
|
|
|
5,120
|
|
|
10,318
|
|
||||
October 31, 2014
|
|
November 3, 2014
|
|
0.07
|
|
|
5,550
|
|
|
5,510
|
|
|
11,060
|
|
||||
November 30, 2014
|
|
December 2, 2014
|
|
0.07
|
|
|
5,529
|
|
|
5,483
|
|
|
11,012
|
|
||||
December 31, 2014
|
|
January 2, 2015
|
|
0.07
|
|
|
5,852
|
|
|
5,735
|
|
|
11,587
|
|
||||
|
|
|
|
|
|
$
|
54,068
|
|
|
$
|
52,231
|
|
|
$
|
106,299
|
|
||
2015:
|
|
|
|
|
|
|
|
|
|
|
||||||||
January 31, 2015
|
|
February 4, 2015
|
|
$
|
0.07
|
|
|
$
|
5,943
|
|
|
$
|
5,797
|
|
|
$
|
11,740
|
|
February 28, 2015
|
|
March 2, 2015
|
|
0.07
|
|
|
5,521
|
|
|
5,235
|
|
|
10,756
|
|
||||
March 31, 2015
|
|
April 1, 2015
|
|
0.07
|
|
|
6,265
|
|
|
5,898
|
|
|
12,163
|
|
||||
|
|
|
|
|
|
$
|
17,729
|
|
|
$
|
16,930
|
|
|
$
|
34,659
|
|
||
|
|
|
|
|
|
$
|
95,217
|
|
|
$
|
84,338
|
|
|
$
|
179,555
|
|
Announcement Date
|
|
New Public Offering Price
|
|
Effective Date
|
|
Daily Distribution Amount per share
|
|
Annualized Distribution Rate
|
|||
November 14, 2011
|
|
$
|
10.26
|
|
|
November 16, 2011
|
|
0.002221920
|
|
7.90
|
%
|
May 1, 2012
|
|
$
|
10.44
|
|
|
June 1, 2012
|
|
0.002215850
|
|
7.75
|
%
|
August 14, 2012
|
|
$
|
10.50
|
|
|
September 4, 2012
|
|
0.002246575
|
|
7.81
|
%
|
September 24, 2012
|
|
$
|
10.60
|
|
|
October 16, 2012
|
|
0.002246575
|
|
7.74
|
%
|
October 15, 2012
|
|
$
|
10.70
|
|
|
November 1, 2012
|
|
0.002273973
|
|
7.76
|
%
|
February 5, 2013
|
|
$
|
10.80
|
|
|
February 18, 2013
|
|
0.002293151
|
|
7.75
|
%
|
February 25, 2013
|
|
$
|
10.90
|
|
|
March 1, 2013
|
|
0.002314384
|
|
7.75
|
%
|
April 3, 2013
|
|
$
|
11.00
|
|
|
April 16, 2013
|
|
0.002335616
|
|
7.75
|
%
|
August 15, 2013
|
|
$
|
11.10
|
|
|
August 16, 2013
|
|
0.002356849
|
|
7.75
|
%
|
October 29, 2013
|
|
$
|
11.20
|
|
|
November 1, 2013
|
|
0.002378082
|
|
7.75
|
%
|
|
For the Year Ended December 31, 2014
|
|
For the Year Ended December 31, 2013
|
|
For the Year Ended December 31, 2012
|
|
For the Year Ended December 31, 2011
|
|
For the Period from May 5, 2010 (Inception) to December 31, 2010
|
||||||||||
Statement of operations data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment income
|
$
|
138,281
|
|
|
$
|
31,393
|
|
|
$
|
6,914
|
|
|
$
|
308
|
|
|
$
|
—
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Total expenses
|
53,329
|
|
|
20,128
|
|
|
4,377
|
|
|
967
|
|
|
8
|
|
|||||
Less: Expense waivers and reimbursements from Adviser
|
1,335
|
|
|
1,827
|
|
|
1,877
|
|
|
818
|
|
|
—
|
|
|||||
Net expenses
|
51,994
|
|
|
18,301
|
|
|
2,500
|
|
|
149
|
|
|
8
|
|
|||||
Net investment loss attributable to noncontrolling interests
|
(68
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net investment income (loss)
|
86,355
|
|
|
13,092
|
|
|
4,414
|
|
|
159
|
|
|
(8
|
)
|
|||||
Net realized and unrealized gain (loss) on investments and total return swap
|
(3,767
|
)
|
|
29,652
|
|
|
5,086
|
|
|
(22
|
)
|
|
—
|
|
|||||
Net change in unrealized depreciation attributable to non-controlling interests
|
(660
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net deferred income tax expense on unrealized appreciation of investments
|
(2,388
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net increase (decrease) in net assets resulting from operations
|
$
|
79,540
|
|
|
$
|
42,744
|
|
|
$
|
9,500
|
|
|
$
|
137
|
|
|
$
|
(8
|
)
|
Per share data:*
|
|
|
|
|
|
|
|
|
|
||||||||||
Net investment income (loss)
|
$
|
0.71
|
|
|
$
|
0.36
|
|
|
$
|
0.63
|
|
|
$
|
0.74
|
|
|
$
|
(0.35
|
)
|
Net increase (decrease) in net assets resulting from operations
|
$
|
0.65
|
|
|
$
|
1.17
|
|
|
$
|
1.36
|
|
|
$
|
0.64
|
|
|
$
|
(0.35
|
)
|
Distributions declared
|
$
|
0.87
|
|
|
$
|
0.85
|
|
|
$
|
1.06
|
|
|
$
|
0.74
|
|
|
$
|
—
|
|
Balance sheet data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
2,187,942
|
|
|
$
|
841,641
|
|
|
$
|
186,877
|
|
|
$
|
16,250
|
|
|
$
|
1,177
|
|
Credit facilities payable
|
$
|
618,712
|
|
|
$
|
132,687
|
|
|
$
|
33,907
|
|
|
$
|
5,900
|
|
|
$
|
—
|
|
Total net assets
|
$
|
1,535,423
|
|
|
$
|
627,903
|
|
|
$
|
140,685
|
|
|
$
|
8,207
|
|
|
$
|
192
|
|
Other data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total return
(1)
|
7.63
|
%
|
|
14.12
|
%
|
|
15.19
|
%
|
|
7.66
|
%
|
|
(3.89
|
)%
|
|||||
Number of portfolio company investments at year end
(2)
|
110
|
|
|
83
|
|
|
39
|
|
|
34
|
|
|
—
|
|
•
|
Each portfolio company or investment will be valued by the Adviser, potentially with assistance from one or more independent valuation firms engaged by our board of directors;
|
•
|
The independent valuation firm(s), if involved, will conduct independent appraisals and make an independent assessment of the value of each investment; and
|
•
|
Our board of directors determines the fair value of each investment, in good faith, based on the input of our Adviser, independent valuation firm (to the extent applicable) and the audit committee of our board of directors.
|
|
December 31, 2014
|
||||
|
Percentage of
Total Portfolio
|
|
Weighted Average Current Yield for Total Portfolio
(1)
|
||
Senior Secured First Lien Debt
|
52.0
|
%
|
|
8.2
|
%
|
Senior Secured Second Lien Debt
|
14.0
|
|
|
9.9
|
|
Subordinated Debt
|
3.2
|
|
|
12.9
|
|
Collateralized Securities
(2)
|
19.1
|
|
|
15.1
|
|
Equity/Other
|
11.7
|
|
|
N/A
|
|
Total
|
100.0
|
%
|
|
10.4
|
%
|
|
At December 31, 2013
|
|
|||||||||||||||
|
Percentage of Total Portfolio
(1)
|
|
Weighted Average Current Yield for Total Portfolio
(2)
|
|
Percentage of TRS Underlying Loans
|
|
Weighted Average Current Yield for TRS Underlying Loans
|
|
Percentage of Total Portfolio Including TRS Underlying Loans
|
|
Weighted Average Current Yield for Total Portfolio Including TRS Underlying Loans
(2)
|
||||||
Senior Secured First Lien Debt
|
47.9
|
%
|
|
8.3
|
%
|
|
95.7
|
%
|
|
7.7
|
%
|
|
62.2
|
%
|
|
8.0
|
%
|
Senior Secured Second Lien Debt
|
13.1
|
|
|
10.7
|
|
|
4.3
|
|
|
11.3
|
|
|
10.4
|
|
|
11.3
|
|
Subordinated Debt
|
8.6
|
|
|
13.9
|
|
|
—
|
|
|
—
|
|
|
6.0
|
|
|
13.3
|
|
Collateralized Securities
(3)
|
15.2
|
|
|
12.0
|
|
|
—
|
|
|
—
|
|
|
10.7
|
|
|
12.0
|
|
Equity/Other
|
15.2
|
|
|
N/A
|
|
|
—
|
|
|
N/A
|
|
|
10.7
|
|
|
N/A
|
|
Total
|
100.0
|
%
|
|
8.4
|
%
|
|
100.0
|
%
|
|
7.8
|
%
|
|
100.0
|
%
|
|
9.3
|
%
|
|
At December 31, 2014
|
|||||
|
Investments at
Fair Value
|
|
Percentage of Total Portfolio
|
|||
Diversified Investment Vehicles
(1)
|
$
|
518,685
|
|
|
27.0
|
%
|
Health Care Providers & Services
|
113,015
|
|
|
5.8
|
|
|
Aerospace & Defense
|
105,770
|
|
|
5.4
|
|
|
Food Products
|
73,185
|
|
|
3.8
|
|
|
Diversified Consumer Services
|
71,287
|
|
|
3.7
|
|
|
Automotive
|
68,280
|
|
|
3.6
|
|
|
Hotels, Restaurants & Leisure
|
65,027
|
|
|
3.4
|
|
|
Publishing
|
63,770
|
|
|
3.3
|
|
|
Software
|
57,248
|
|
|
3.0
|
|
|
Media
|
52,773
|
|
|
2.8
|
|
|
Building Products
|
50,960
|
|
|
2.7
|
|
|
Consumer Finance
|
49,535
|
|
|
2.6
|
|
|
Retailers (except food & drug)
|
49,000
|
|
|
2.6
|
|
|
Commercial Services & Supplies
|
48,928
|
|
|
2.6
|
|
|
Professional Services
|
42,310
|
|
|
2.2
|
|
|
Electronic Equipment, Instruments & Components
|
41,075
|
|
|
2.1
|
|
|
Business Equipment & Services
|
38,549
|
|
|
2.0
|
|
|
Diversified Telecommunication Services
|
37,199
|
|
|
1.9
|
|
|
Marine
|
35,494
|
|
|
1.9
|
|
|
Internet Software & Services
|
33,162
|
|
|
1.7
|
|
|
Real Estate Management & Development
|
31,924
|
|
|
1.7
|
|
|
Banking, Finance, Insurance & Real Estate
|
31,523
|
|
|
1.6
|
|
|
Transportation Infrastructure
|
27,975
|
|
|
1.5
|
|
|
Advertising
|
19,624
|
|
|
1.0
|
|
|
Diversified Financial Services
|
18,863
|
|
|
1.0
|
|
|
Health Care
|
16,660
|
|
|
0.9
|
|
|
Capital Markets
|
16,295
|
|
|
0.9
|
|
|
Freight & Logistics
|
15,563
|
|
|
0.8
|
|
|
Wireless Telecommunication Services
|
13,749
|
|
|
0.7
|
|
|
Auto Components
|
12,870
|
|
|
0.7
|
|
|
Communications Equipment
|
12,617
|
|
|
0.7
|
|
|
Road & Rail
|
12,499
|
|
|
0.7
|
|
|
Technology - Enterprise Solutions
|
12,224
|
|
|
0.6
|
|
|
Textiles, Apparel & Luxury Goods
|
11,823
|
|
|
0.6
|
|
|
IT Services
|
10,927
|
|
|
0.6
|
|
|
Steel
|
9,771
|
|
|
0.5
|
|
|
Healthcare & Pharmaceuticals
|
9,625
|
|
|
0.5
|
|
|
Chemicals
|
9,609
|
|
|
0.5
|
|
|
Oil, Gas & Consumable Fuels
|
7,598
|
|
|
0.4
|
|
|
Total
|
$
|
1,916,991
|
|
|
100.0
|
%
|
|
At December 31, 2013
|
|||||||||||||||||||
|
Investments at
Fair Value
(1)
|
|
Percentage of Total Portfolio
(1)
|
|
Value of TRS Underlying Loans
(2)
|
|
Percentage of TRS Underlying Loans
|
|
Total Investments at Fair Value including the value of TRS Underlying Loans
|
|
Percentage of Total Portfolio Including the value of TRS Underlying Loans
|
|||||||||
Diversified Investment Vehicles
(3)
|
$
|
168,156
|
|
|
24.2
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
168,156
|
|
|
16.9
|
%
|
Media
|
57,061
|
|
|
8.2
|
|
|
21,134
|
|
|
7.1
|
|
|
78,195
|
|
|
7.9
|
|
|||
Hotels, Restaurants & Leisure
|
46,462
|
|
|
6.7
|
|
|
24,990
|
|
|
8.4
|
|
|
71,452
|
|
|
7.2
|
|
|||
Diversified Consumer Services
|
29,190
|
|
|
4.2
|
|
|
30,876
|
|
|
10.4
|
|
|
60,066
|
|
|
6.1
|
|
|||
Health Care Providers & Services
|
48,823
|
|
|
7.0
|
|
|
8,301
|
|
|
2.8
|
|
|
57,124
|
|
|
5.8
|
|
|||
Oil, Gas & Consumable Fuels
|
32,058
|
|
|
4.6
|
|
|
23,875
|
|
|
8.1
|
|
|
55,933
|
|
|
5.6
|
|
|||
Marine
|
28,399
|
|
|
4.1
|
|
|
12,209
|
|
|
4.1
|
|
|
40,608
|
|
|
4.1
|
|
|||
Food Products
|
34,438
|
|
|
5.0
|
|
|
5,444
|
|
|
1.9
|
|
|
39,882
|
|
|
4.0
|
|
|||
Biotechnology
|
5,876
|
|
|
0.8
|
|
|
33,227
|
|
|
11.2
|
|
|
39,103
|
|
|
3.9
|
|
|||
Consumer Finance
|
28,691
|
|
|
4.1
|
|
|
9,925
|
|
|
3.4
|
|
|
38,616
|
|
|
3.9
|
|
|||
Internet Software & Services
|
36,432
|
|
|
5.2
|
|
|
—
|
|
|
—
|
|
|
36,432
|
|
|
3.7
|
|
|||
Commercial Services & Supplies
|
19,376
|
|
|
2.8
|
|
|
15,975
|
|
|
5.4
|
|
|
35,351
|
|
|
3.6
|
|
|||
Professional Services
|
20,110
|
|
|
2.9
|
|
|
11,943
|
|
|
4.0
|
|
|
32,053
|
|
|
3.2
|
|
|||
Software
|
10,182
|
|
|
1.5
|
|
|
20,342
|
|
|
6.9
|
|
|
30,524
|
|
|
3.1
|
|
|||
Electronic Equipment, Instruments & Components
|
12,862
|
|
|
1.9
|
|
|
17,343
|
|
|
5.9
|
|
|
30,205
|
|
|
3.0
|
|
|||
Real Estate Management & Development
|
13,001
|
|
|
1.9
|
|
|
14,475
|
|
|
4.9
|
|
|
27,476
|
|
|
2.8
|
|
|||
Aerospace & Defense
|
21,131
|
|
|
3.0
|
|
|
5,752
|
|
|
1.9
|
|
|
26,883
|
|
|
2.7
|
|
|||
Commercial Banks
|
9,875
|
|
|
1.4
|
|
|
9,900
|
|
|
3.3
|
|
|
19,775
|
|
|
2.0
|
|
|||
Paper & Forest Products
|
8,040
|
|
|
1.2
|
|
|
7,035
|
|
|
2.4
|
|
|
15,075
|
|
|
1.5
|
|
|||
Communications Equipment
|
7,412
|
|
|
1.1
|
|
|
5,355
|
|
|
1.8
|
|
|
12,767
|
|
|
1.3
|
|
|||
Road & Rail
|
12,147
|
|
|
1.7
|
|
|
—
|
|
|
—
|
|
|
12,147
|
|
|
1.2
|
|
|||
Textiles, Apparel & Luxury Goods
|
11,977
|
|
|
1.7
|
|
|
—
|
|
|
—
|
|
|
11,977
|
|
|
1.2
|
|
|||
IT Services
|
10,741
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|
10,741
|
|
|
1.1
|
|
|||
Diversified Telecommunication Services
|
10,000
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
10,000
|
|
|
1.0
|
|
|||
Distributors
|
—
|
|
|
—
|
|
|
10,000
|
|
|
3.4
|
|
|
10,000
|
|
|
1.0
|
|
|||
Chemicals
|
9,728
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
9,728
|
|
|
1.0
|
|
|||
Capital Markets
|
—
|
|
|
—
|
|
|
8,059
|
|
|
2.7
|
|
|
8,059
|
|
|
0.8
|
|
|||
Machinery
|
3,608
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
3,608
|
|
|
0.4
|
|
|||
Total
|
$
|
695,776
|
|
|
100.0
|
%
|
|
$
|
296,160
|
|
|
100.0
|
%
|
|
$
|
991,936
|
|
|
100.0
|
%
|
Portfolio Company
|
|
Type of Asset
|
|
Fair Value
|
|
Fair Value Percentage of Total Portfolio
|
|||
Acrisure, LLC
|
|
Senior Secured Second Lien Debt
|
|
$
|
8,820
|
|
|
0.5
|
%
|
Amports, Inc.
|
|
Senior Secured First Lien Debt
|
|
14,986
|
|
|
0.8
|
|
|
Applied Merchant Systems West Coast, Inc.
|
|
Senior Secured First Lien Debt
|
|
18,863
|
|
|
1.0
|
|
|
Appriss Holdings, Inc.
|
|
Senior Secured Second Lien Debt
|
|
14,775
|
|
|
0.8
|
|
|
B&M CLO 2014-1, LTD. Subordinated Notes
|
|
Collateralized Securities
|
|
31,280
|
|
|
1.6
|
|
|
Boston Market Corporation
|
|
Senior Secured Second Lien Debt
|
|
15,041
|
|
|
0.8
|
|
|
Carlyle GMS Finance, Inc.
|
|
Equity/Other
|
|
2,970
|
|
|
0.2
|
|
|
Chicken Soup for the Soul Publishing, LLC
|
|
Senior Secured First Lien Debt
|
|
30,048
|
|
|
1.6
|
|
|
CIG Financial, LLC
|
|
Senior Secured Second Lien Debt
|
|
15,000
|
|
|
0.8
|
|
|
CPX Interactive Holdings, LP - Series A Convertible Preferred Shares
|
|
Equity/Other
|
|
6,000
|
|
|
0.3
|
|
|
CPX Interactive Holdings, LP - Warrants
|
|
Equity/Other
|
|
651
|
|
|
—
|
|
|
CPX Interactive Holdings, LP
|
|
Senior Secured Second Lien Debt
|
|
18,277
|
|
|
1.0
|
|
|
CREDITCORP
|
|
Senior Secured Second Lien Debt
|
|
12,852
|
|
|
0.7
|
|
|
Crowley Holdings, Inc. - Series A Preferred Stock
|
|
Equity/Other
|
|
25,444
|
|
|
1.3
|
|
|
CVP Cascade CLO, LTD. Subordinated Notes
|
|
Collateralized Securities
|
|
22,553
|
|
|
1.2
|
|
|
CVP Cascade CLO-2, LTD. Subordinated Notes
|
|
Collateralized Securities
|
|
26,479
|
|
|
1.4
|
|
|
Danish CRJ LTD.
|
|
Equity/Other
|
|
260
|
|
|
—
|
|
|
Danish CRJ LTD.
|
|
Senior Secured First Lien Debt
|
|
181
|
|
|
—
|
|
|
Eagle Rx, LLC
|
|
Senior Secured First Lien Debt
|
|
16,024
|
|
|
0.8
|
|
|
ECI Acquisition Holdings, Inc.
|
|
Senior Secured First Lien Debt
|
|
12,224
|
|
|
0.6
|
|
|
Epic Health Services, Inc.
|
|
Senior Secured First Lien Debt
|
|
15,508
|
|
|
0.8
|
|
|
ERG Holding Company
|
|
Senior Secured First Lien Debt
|
|
14,370
|
|
|
0.7
|
|
|
Evolution Research Group - Preferred Equity
|
|
Equity/Other
|
|
492
|
|
|
—
|
|
|
EZE Trucking, Inc.
|
|
Senior Secured First Lien Debt
|
|
12,499
|
|
|
0.7
|
|
|
Fifth Street Senior Loan Fund I, LLC
|
|
Equity/Other
|
|
35,000
|
|
|
1.7
|
|
|
Figueroa CLO 2014-1, LTD. Subordinated Notes
|
|
Collateralized Securities
|
|
27,128
|
|
|
1.4
|
|
|
Gold, Inc.
|
|
Subordinated Debt
|
|
11,823
|
|
|
0.6
|
|
|
H.D. Vest, Inc.
|
|
Senior Secured Second Lien Debt
|
|
8,791
|
|
|
0.5
|
|
|
Hanna Anderson, LLC
|
|
Senior Secured First Lien Debt
|
|
14,896
|
|
|
0.8
|
|
|
HIG Integrity Nutraceuticals
|
|
Equity/Other
|
|
—
|
|
|
—
|
|
|
High Ridge Brands Co.
|
|
Senior Secured Second Lien Debt
|
|
22,309
|
|
|
1.2
|
|
|
Icynene US Acquisition Corp.
|
|
Senior Secured First Lien Debt
|
|
50,960
|
|
|
2.7
|
|
|
ILC Dover LP
|
|
Senior Secured First Lien Debt
|
|
14,135
|
|
|
0.7
|
|
|
InMotion Entertainment Group, LLC
|
|
Senior Secured First Lien Debt
|
|
11,795
|
|
|
0.6
|
|
|
IntegraMed America, Inc.
|
|
Senior Secured First Lien Debt
|
|
3,648
|
|
|
0.2
|
|
|
Integrity Nutraceuticals, Inc.
|
|
Senior Secured First Lien Debt
|
|
29,150
|
|
|
1.5
|
|
|
Interblock USA L.C.
|
|
Senior Secured Second Lien Debt
|
|
22,732
|
|
|
1.2
|
|
|
J. C. Bromac Corporation (dba EagleRider, Inc.)
|
|
Senior Secured Second Lien Debt
|
|
9,873
|
|
|
0.5
|
|
|
K&N Engineering, Inc.
|
|
Senior Secured Second Lien Debt
|
|
12,764
|
|
|
0.7
|
|
|
K2 Pure Solutions NoCal, L.P.
|
|
Senior Secured First Lien Debt
|
|
9,609
|
|
|
0.5
|
|
|
Kahala Ireland OpCo LLC
|
|
Senior Secured First Lien Debt
|
|
47,843
|
|
|
2.5
|
|
|
Kahala Ireland OpCo LLC. - Common Equity
|
|
Equity/Other
|
|
5,275
|
|
|
0.2
|
|
|
Kahala Ireland OpCo LLC. - Profit Participating Note
|
|
Equity/Other
|
|
1,625
|
|
|
0.1
|
|
|
Kahala US OpCo LLC
|
|
Senior Secured First Lien Debt
|
|
7,131
|
|
|
0.4
|
|
|
Kahala US OpCo LLC
|
|
Equity/Other
|
|
7,500
|
|
|
0.4
|
|
|
Land Holdings I, LLC
|
|
Senior Secured First Lien Debt
|
|
30,677
|
|
|
1.6
|
|
|
Linc Energy Finance USA, Inc.
|
|
Senior Secured Second Lien Debt
|
|
7,598
|
|
|
0.4
|
|
|
MBLOX Inc. - Warrants
|
|
Equity/Other
|
|
—
|
|
|
—
|
|
|
MCS AMS Sub-Holdings LLC
|
|
Senior Secured First Lien Debt
|
|
12,457
|
|
|
0.6
|
|
Portfolio Company
|
|
Type of Asset
|
|
Fair Value
|
|
Fair Value Percentage of Total Portfolio
|
|||
MidOcean Credit CLO II, LLC
|
|
Collateralized Securities
|
|
$
|
33,712
|
|
|
1.8
|
%
|
MidOcean Credit CLO III, LLC
|
|
Collateralized Securities
|
|
36,120
|
|
|
1.9
|
|
|
MidOcean Credit CLO IV, LLC
|
|
Collateralized Securities
|
|
18,500
|
|
|
1.0
|
|
|
Motorsports Aftermarket Group, Inc.
|
|
Senior Secured First Lien Debt
|
|
20,646
|
|
|
1.1
|
|
|
National Technical Systems, Inc.
|
|
Senior Secured First Lien Debt
|
|
18,467
|
|
|
1.0
|
|
|
NewStar Arlington Senior Loan Program LLC Subordinated Notes
|
|
Collateralized Securities
|
|
30,474
|
|
|
1.7
|
|
|
NextCare, Inc.
|
|
Senior Secured First Lien Debt
|
|
19,453
|
|
|
1.0
|
|
|
NMFC Senior Loan Program I, LLC
|
|
Equity/Other
|
|
49,371
|
|
|
2.6
|
|
|
Noosa Acquirer, Inc.
|
|
Senior Secured Second Lien Debt
|
|
24,625
|
|
|
1.3
|
|
|
North Atlantic Trading Company, Inc.
|
|
Senior Secured First Lien Debt
|
|
19,410
|
|
|
1.0
|
|
|
Ocean Trails CLO V, LTD
|
|
Collateralized Securities
|
|
34,607
|
|
|
1.8
|
|
|
OFSI Fund VI, Ltd. - Subordinated Notes
|
|
Collateralized Securities
|
|
32,707
|
|
|
1.7
|
|
|
OH Acquisition, LLC
|
|
Senior Secured First Lien Debt
|
|
7,465
|
|
|
0.4
|
|
|
Orchid Underwriters Agency, LLC
|
|
Senior Secured First Lien Debt
|
|
14,738
|
|
|
0.8
|
|
|
Orchid Underwriters Agency, LLC
|
|
Equity/Other
|
|
500
|
|
|
—
|
|
|
Park Ave Holdings, LLC - Common Shares
|
|
Equity/Other
|
|
5,551
|
|
|
0.3
|
|
|
Park Ave Holdings, LLC - Preferred Shares
|
|
Equity/Other
|
|
7,809
|
|
|
0.4
|
|
|
Park Ave Re Holdings, LLC
|
|
Subordinated Debt
|
|
6,107
|
|
|
0.3
|
|
|
PennantPark Credit Opportunities Fund II, LP
|
|
Equity/Other
|
|
10,764
|
|
|
0.6
|
|
|
PeopLease Holdings, LLC
|
|
Senior Secured First Lien Debt
|
|
11,634
|
|
|
0.6
|
|
|
Premier Dental Services, Inc.
|
|
Senior Secured First Lien Debt
|
|
23,503
|
|
|
1.2
|
|
|
Pride Plating, Inc.
|
|
Senior Secured First Lien Debt
|
|
9,811
|
|
|
0.5
|
|
|
Related Fee Agreements
|
|
Collateralized Securities
|
|
16,369
|
|
|
0.9
|
|
|
Resco Products, Inc.
|
|
Senior Secured First Lien Debt
|
|
9,771
|
|
|
0.5
|
|
|
S.B. Restaurant Co., Inc.
|
|
Subordinated Debt
|
|
—
|
|
|
—
|
|
|
S.B. Restaurant Co., Inc. - Warrants
|
|
Equity/Other
|
|
—
|
|
|
—
|
|
|
S.B. Restaurant Co., Inc. - Senior Subordinate Debt
|
|
Subordinated Debt
|
|
—
|
|
|
—
|
|
|
Schulman Associates Institutional Review Board, Inc.
|
|
Senior Secured Second Lien Debt
|
|
16,660
|
|
|
0.9
|
|
|
Silver Spring CLO, Ltd.
|
|
Collateralized Securities
|
|
27,398
|
|
|
1.4
|
|
|
SkyCross Inc. - Warrants
|
|
Equity/Other
|
|
—
|
|
|
—
|
|
|
South Grand MM CLO I, LLC
|
|
Equity/Other
|
|
27,744
|
|
|
1.4
|
|
|
Squan Holding Corp.
|
|
Senior Secured First Lien Debt
|
|
22,540
|
|
|
1.2
|
|
|
Squan Holdings Corp. - Class A Common Stock
|
|
Equity/Other
|
|
12
|
|
|
—
|
|
|
Squan Holdings Corp. - Series A Preferred Stock
|
|
Equity/Other
|
|
1,138
|
|
|
0.1
|
|
|
Steel City Media
|
|
Subordinated Debt
|
|
19,752
|
|
|
1.0
|
|
|
Surgery Center Holdings, Inc.
|
|
Senior Secured Second Lien Debt
|
|
9,625
|
|
|
0.5
|
|
|
Taqua, LLC
|
|
Senior Secured First Lien Debt
|
|
13,749
|
|
|
0.7
|
|
|
Tax Defense Network, LLC
|
|
Senior Secured First Lien Debt
|
|
30,725
|
|
|
1.6
|
|
|
Tax Defense Network, LLC
|
|
Equity/Other
|
|
700
|
|
|
—
|
|
|
Tennenbaum Waterman Fund, L.P.
|
|
Equity/Other
|
|
9,062
|
|
|
0.5
|
|
|
The SAVO Group, Ltd. - Warrants
|
|
Equity/Other
|
|
—
|
|
|
—
|
|
|
The Tennis Channel Holdings, Inc.
|
|
Senior Secured First Lien Debt
|
|
15,149
|
|
|
0.7
|
|
|
THL Credit Greenway Fund II LLC
|
|
Equity/Other
|
|
18,877
|
|
|
1.0
|
|
|
Total Outdoor Holdings Corp.
|
|
Senior Secured First Lien Debt
|
|
19,624
|
|
|
1.0
|
|
|
Transportation Insight, LLC
|
|
Senior Secured First Lien Debt
|
|
15,563
|
|
|
0.8
|
|
|
Trinity Consultants Holdings, Inc.
|
|
Senior Secured First Lien Debt
|
|
14,980
|
|
|
0.8
|
|
|
United Central Industrial Supply Company, LLC
|
|
Senior Secured First Lien Debt
|
|
7,962
|
|
|
0.4
|
|
|
US Shipping LLC
|
|
Senior Secured First Lien Debt
|
|
10,050
|
|
|
0.5
|
|
|
Visionary Integration Professionals, LLC
|
|
Subordinated Debt
|
|
10,269
|
|
|
0.5
|
|
|
Visionary Integration Professionals, LLC - Warrants
|
|
Equity/Other
|
|
658
|
|
|
—
|
|
|
WhiteHorse VIII, Ltd. CLO Subordinated Notes
|
|
Collateralized Securities
|
|
27,570
|
|
|
1.4
|
|
Portfolio Company
|
|
Type of Asset
|
|
Fair Value
|
|
Fair Value Percentage of Total Portfolio
|
|||
World Business Lenders, LLC
|
|
Equity/Other
|
|
$
|
4,126
|
|
|
0.2
|
%
|
Xplornet Communications Inc. - Warrants
|
|
Equity/Other
|
|
2,306
|
|
|
0.1
|
|
|
Xplornet Communications, Inc.
|
|
Subordinated Debt
|
|
11,203
|
|
|
0.6
|
|
|
Zimbra, Inc.
|
|
Senior Secured Second Lien Debt
|
|
5,953
|
|
|
0.3
|
|
|
Zimbra, Inc.
|
|
Subordinated Debt
|
|
1,776
|
|
|
0.1
|
|
|
Zimbra, Inc. - Warrants (Second Lien Debt)
|
|
Equity/Other
|
|
138
|
|
|
—
|
|
|
Zimbra, Inc. - Warrants (Third Lien Bridge Note)
|
|
Equity/Other
|
|
1,172
|
|
|
0.1
|
|
|
Total Level 3 investments
|
|
|
|
$
|
1,548,911
|
|
|
80.8
|
%
|
Total Level 2 investments
|
|
|
|
$
|
368,080
|
|
|
19.2
|
%
|
Total Investments
|
|
|
|
$
|
1,916,991
|
|
|
100.0
|
%
|
Portfolio Company
|
|
Type of Asset
|
|
Fair Value
|
|
Fair Value Percentage of Total Portfolio
|
|||
Adventure Interactive Corp.
|
|
Senior Secured First Lien Debt
|
|
$
|
19,575
|
|
|
2.9
|
%
|
American Importing Company, Inc.
|
|
Senior Secured First Lien Debt
|
|
10,933
|
|
|
1.6
|
|
|
Apidos XVI CLO, LTD. Subordinated Notes
|
|
Collateralized Securities
|
|
13,650
|
|
|
2.0
|
|
|
Boston Market Corporation
|
|
Senior Secured Second Lien Debt
|
|
24,625
|
|
|
3.5
|
|
|
Carlyle GMS Finance, Inc.
|
|
Equity/Other
|
|
2,173
|
|
|
0.3
|
|
|
Catamaran CLO 2013-1 Ltd. Subordinated Notes
|
|
Collateralized Securities
|
|
20,404
|
|
|
2.9
|
|
|
Crowley Holdings Preferred, LLC - Series A Preferred Shares
|
|
Equity/Other
|
|
25,000
|
|
|
3.6
|
|
|
CVP Cascade CLO-1, LTD. Subordinated Notes
|
|
Collateralized Securities
|
|
28,086
|
|
|
4.0
|
|
|
Epic Health Services
|
|
Senior Secured First Lien Debt
|
|
13,899
|
|
|
2.0
|
|
|
Eureka Hunter Holdings, LLC
|
|
Senior Secured Second Lien Debt
|
|
4,969
|
|
|
0.7
|
|
|
EZE Trucking, Inc.
|
|
Senior Secured First Lien Debt
|
|
12,147
|
|
|
1.7
|
|
|
FairPay Solutions Inc. Term Loan A
|
|
Senior Secured First Lien Debt
|
|
2,350
|
|
|
0.3
|
|
|
FairPay Solutions Inc. Term Loan B
|
|
Senior Secured First Lien Debt
|
|
7,500
|
|
|
1.1
|
|
|
Garrison Funding 2013 - 1 Ltd. Subordinated Notes
|
|
Collateralized Securities
|
|
15,000
|
|
|
2.2
|
|
|
Global Telecom & Technology, Inc.
|
|
Senior Secured First Lien Debt
|
|
7,559
|
|
|
1.1
|
|
|
Gold, Inc.
|
|
Subordinated Debt
|
|
11,977
|
|
|
1.7
|
|
|
HIG Integrity Nutraceuticals
|
|
Equity/Other
|
|
850
|
|
|
0.1
|
|
|
HIG Integrity Nutraceuticals
|
|
Senior Secured First Lien Debt
|
|
22,655
|
|
|
3.3
|
|
|
JMP Credit Advisors CLO II Ltd. Subordinated Notes
|
|
Collateralized Securities
|
|
6,099
|
|
|
0.9
|
|
|
K2 Pure Solutions NoCal, L.P.
|
|
Senior Secured First Lien Debt
|
|
9,728
|
|
|
1.4
|
|
|
Kahala Aviation Holdings, LLC
|
|
Equity/Other
|
|
—
|
|
|
—
|
|
|
Kahala Aviation Holdings, LLC Preferred Shares
|
|
Equity/Other
|
|
5,271
|
|
|
0.8
|
|
|
Kahala US OpCo LLC
|
|
Senior Secured First Lien Debt
|
|
15,860
|
|
|
2.3
|
|
|
MBLOX Inc.
|
|
Senior Secured Second Lien Debt
|
|
7,011
|
|
|
1.0
|
|
|
MBLOX Inc. - Warrants
|
|
Equity/Other
|
|
705
|
|
|
0.1
|
|
|
MC Funding Ltd. Preferred Shares
|
|
Collateralized Securities
|
|
2,163
|
|
|
0.3
|
|
|
MidOcean Credit CLO II, Ltd. Subordinated Notes
|
|
Collateralized Securities
|
|
20,543
|
|
|
3.0
|
|
|
National Technical Systems, Inc.
|
|
Senior Secured First Lien Debt
|
|
12,375
|
|
|
1.8
|
|
|
NewStar Arlington Fund LLC
|
|
Equity/Other
|
|
30,000
|
|
|
4.3
|
|
|
NextCare, Inc.
|
|
Senior Secured First Lien Debt
|
|
17,272
|
|
|
2.5
|
|
|
Park Ave RE Holdings, LLC
|
|
Senior Secured First Lien Debt
|
|
9,750
|
|
|
1.4
|
|
|
Park Ave RE, Inc.
|
|
Equity/Other
|
|
33
|
|
|
—
|
|
|
Park Ave RE, Inc. - Preferred Shares
|
|
Equity/Other
|
|
3,218
|
|
|
0.5
|
|
|
PennantPark Credit Opportunities Fund, LP
|
|
Equity/Other
|
|
10,550
|
|
|
1.5
|
|
|
PeopLease Holdings, LLC
|
|
Senior Secured First Lien Debt
|
|
9,800
|
|
|
1.4
|
|
|
Precision Dermatology, Inc. - Warrants
|
|
Equity/Other
|
|
—
|
|
|
—
|
|
|
S.B. Restaurant Co., Inc. - Warrants
|
|
Equity/Other
|
|
—
|
|
|
—
|
|
Portfolio Company
|
|
Type of Asset
|
|
Fair Value
|
|
Fair Value Percentage of Total Portfolio
|
|||
S.B. Restaurant Co., Inc. - Senior Subordinated Debt
|
|
Subordinated Debt
|
|
$
|
88
|
|
|
—
|
%
|
S.B. Restaurant Co., Inc.
|
|
Subordinated Debt
|
|
2,025
|
|
|
0.3
|
|
|
SkyCross, Inc. - Warrants
|
|
Equity/Other
|
|
450
|
|
|
0.1
|
|
|
SkyCross, Inc.
|
|
Senior Secured Second Lien Debt
|
|
4,979
|
|
|
0.7
|
|
|
Source Refrigeration & HVAC, Inc.
|
|
Senior Secured First Lien Debt
|
|
2,735
|
|
|
0.4
|
|
|
South Grand MM CLO I, LLC
|
|
Equity/Other
|
|
872
|
|
|
0.1
|
|
|
Teleflex Marine, Inc.
|
|
Senior Secured Second Lien Debt
|
|
3,399
|
|
|
0.5
|
|
|
Tennenbaum Waterman Fund, L.P.
|
|
Equity/Other
|
|
9,611
|
|
|
1.4
|
|
|
The SAVO Group, Ltd.
|
|
Subordinated Debt
|
|
5,005
|
|
|
0.7
|
|
|
The SAVO Group, Ltd. - Warrants
|
|
Equity/Other
|
|
1,302
|
|
|
0.2
|
|
|
The Tennis Channel Holdings, Inc.
|
|
Senior Secured First Lien Debt
|
|
14,787
|
|
|
2.1
|
|
|
THL Credit Greenway Fund II LLC
|
|
Equity/Other
|
|
9,005
|
|
|
1.3
|
|
|
Trinity Consultants Holdings, Inc.
|
|
Senior Secured First Lien Debt
|
|
3,079
|
|
|
0.4
|
|
|
Varel International Energy Mezzanine Funding Corp.
|
|
Subordinated Debt
|
|
11,251
|
|
|
1.6
|
|
|
Vestcom Acquisition, Inc.
|
|
Subordinated Debt
|
|
7,525
|
|
|
1.1
|
|
|
Visionary Integration Professionals, LLC
|
|
Subordinated Debt
|
|
9,831
|
|
|
1.4
|
|
|
Visionary Integration Professionals, LLC - Warrants
|
|
Equity/Other
|
|
910
|
|
|
0.1
|
|
|
WBL SPE I., LLC
|
|
Senior Secured First Lien Debt
|
|
3,750
|
|
|
0.5
|
|
|
World Business Lenders, LLC
|
|
Equity/Other
|
|
3,751
|
|
|
0.5
|
|
|
Xplornet Communications, Inc.
|
|
Subordinated Debt
|
|
10,000
|
|
|
1.4
|
|
|
Xplornet Communications, Inc. - Warrants
|
|
Equity/Other
|
|
—
|
|
|
—
|
|
|
Zimbra, Inc.
|
|
Senior Secured Second Lien Debt
|
|
6,137
|
|
|
0.9
|
|
|
Zimbra, Inc.
|
|
Subordinated Debt
|
|
2,000
|
|
|
0.3
|
|
|
Zimbra, Inc. - Warrants (Second Lien Debt)
|
|
Equity/Other
|
|
447
|
|
|
0.1
|
|
|
Zimbra, Inc. - Warrants (Third Lien Bridge Note)
|
|
Equity/Other
|
|
1,598
|
|
|
0.2
|
|
|
Total Level 3 investments
|
|
|
|
$
|
518,267
|
|
|
74.5
|
%
|
Total Level 2 investments
(1)
|
|
|
|
$
|
177,509
|
|
|
25.5
|
%
|
Total Investments
|
|
|
|
$
|
695,776
|
|
|
100.0
|
%
|
|
Amortized Cost as of December 31, 2013
|
|||||||
|
Investments per Total Portfolio
|
|
TRS Underlying Loans
|
|
Total Portfolio including TRS Underlying Loans
|
|||
Middle Market
(1)
|
67.4
|
%
|
|
90.9
|
%
|
|
74.4
|
%
|
Large Corporate
(2)
|
2.8
|
|
|
9.1
|
|
|
4.7
|
|
Other
(3)
|
29.8
|
|
|
—
|
|
|
20.9
|
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Fair Value as of December 31, 2014
|
|
|
Investments per Total Portfolio
|
|
Middle Market
(1)
|
67.2
|
%
|
Large Corporate
(2)
|
2.0
|
|
Other
(3)
|
30.8
|
|
Total
|
100.0
|
%
|
|
Fair Value as of December 31, 2013
|
|||||||
|
Investments per Total Portfolio
|
|
TRS Underlying Loans
|
|
Total Portfolio including TRS Underlying Loans
|
|||
Middle Market
(1)
|
66.7
|
%
|
|
91.2
|
%
|
|
74.0
|
%
|
Large Corporate
(2)
|
2.8
|
|
|
8.8
|
|
|
4.6
|
|
Other
(3)
|
30.5
|
|
|
—
|
|
|
21.4
|
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Loan Rating
|
|
Summary Description
|
1
|
|
Debt investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since the time of investment are favorable.
|
|
|
|
2
|
|
Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable. All investments are initially rated a “2”.
|
|
|
|
3
|
|
Performing debt investment requiring closer monitoring. Trends and risk factors show some deterioration.
|
|
|
|
4
|
|
Underperforming debt investment. Some loss of interest or dividend expected, but still expecting a positive return on investment. Trends and risk factors are negative.
|
|
|
|
5
|
|
Underperforming debt investment with expected loss of interest and some principal.
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Total investment income
|
$
|
138,281
|
|
|
$
|
31,393
|
|
|
$
|
6,914
|
|
Total expenses, net
|
51,994
|
|
|
18,301
|
|
|
2,500
|
|
|||
Net investment income attributable to noncontrolling interests
|
(68
|
)
|
|
—
|
|
|
—
|
|
|||
Net investment income
|
86,355
|
|
|
13,092
|
|
|
4,414
|
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Management fees
|
$
|
24,926
|
|
|
$
|
6,555
|
|
|
$
|
1,320
|
|
Subordinated income incentive fees
|
9,929
|
|
|
6,377
|
|
|
827
|
|
|||
Capital gains incentive fees
|
(2,664
|
)
|
|
2,444
|
|
|
543
|
|
|||
Interest and credit facility financing expenses
|
11,057
|
|
|
2,248
|
|
|
683
|
|
|||
Professional fees
|
5,956
|
|
|
1,723
|
|
|
554
|
|
|||
Other general and administrative
|
3,060
|
|
|
171
|
|
|
110
|
|
|||
Administrative Services
|
770
|
|
|
318
|
|
|
60
|
|
|||
Insurance
|
221
|
|
|
223
|
|
|
205
|
|
|||
Directors fees
|
74
|
|
|
69
|
|
|
75
|
|
|||
Operating expenses before expense waivers and reimbursements from Adviser
|
53,329
|
|
|
20,128
|
|
|
4,377
|
|
|||
Waiver of management and incentive fees
|
(1,335
|
)
|
|
(1,827
|
)
|
|
(1,611
|
)
|
|||
Expense support reimbursements from Adviser
|
—
|
|
|
—
|
|
|
(266
|
)
|
|||
Total operating expenses net of expense waivers and reimbursements from Adviser
|
$
|
51,994
|
|
|
$
|
18,301
|
|
|
$
|
2,500
|
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Net realized gain (loss) from investments
|
|
|
|
|
|
||||||
Control investments
|
$
|
(79
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Affiliate investments
|
7,785
|
|
|
855
|
|
|
—
|
|
|||
Non-control/non-affiliate investments
|
1,688
|
|
|
3,111
|
|
|
1,471
|
|
|||
Total net realized gain from investments
|
9,394
|
|
|
3,966
|
|
|
1,471
|
|
|||
Net realized gain (loss) from total return swap
|
14,552
|
|
|
14,641
|
|
|
1,958
|
|
|||
Net change in unrealized appreciation (depreciation) on investments
|
|
|
|
|
|
||||||
Control investments
|
10,854
|
|
|
—
|
|
|
—
|
|
|||
Affiliate investments
|
(10,858
|
)
|
|
3,344
|
|
|
137
|
|
|||
Non-control/non-affiliate investments
|
(24,529
|
)
|
|
4,909
|
|
|
1,132
|
|
|||
Total net change in unrealized appreciation (depreciation) on investments
|
(24,533
|
)
|
|
8,253
|
|
|
1,269
|
|
|||
Net change in unrealized appreciation (depreciation) on total return swap
|
(3,180
|
)
|
|
2,792
|
|
|
388
|
|
|||
Net realized and unrealized gain (loss) on investments and total return swap before non-controlling interests
|
(3,767
|
)
|
|
29,652
|
|
|
5,086
|
|
|||
Net change in unrealized depreciation attributable to non-controlling interests
|
(660
|
)
|
|
—
|
|
|
—
|
|
|||
Net deferred income tax expense on unrealized appreciation of investments
|
(2,388
|
)
|
|
—
|
|
|
—
|
|
|||
Net realized and unrealized gain (loss) on investments and total return swap
|
$
|
(6,815
|
)
|
|
$
|
29,652
|
|
|
$
|
5,086
|
|
|
Net Receivable
|
|
Net Realized Gains
|
||||
Interest and other income from TRS portfolio
|
$
|
—
|
|
|
$
|
11,361
|
|
TRS interest expense
|
—
|
|
|
(2,187
|
)
|
||
Gains on TRS asset sales
|
—
|
|
|
5,378
|
|
||
Net receivable/realized gain from TRS
|
$
|
—
|
|
|
$
|
14,552
|
|
|
Net Receivable
|
|
Net Realized Gains
|
||||
Interest and other income from TRS portfolio
|
$
|
4,098
|
|
|
$
|
15,403
|
|
TRS interest expense
|
(729
|
)
|
|
(2,637
|
)
|
||
Gains on TRS asset sales
|
684
|
|
|
1,875
|
|
||
Net receivable/realized gain from TRS
|
$
|
4,053
|
|
|
$
|
14,641
|
|
|
Net Receivable
|
|
Net Realized Gains
|
||||
Interest and other income from TRS portfolio
|
$
|
1,066
|
|
|
$
|
1,696
|
|
TRS interest expense
|
(198
|
)
|
|
(293
|
)
|
||
Gains on TRS asset sales
|
418
|
|
|
555
|
|
||
Net receivable/realized gain from TRS
|
$
|
1,286
|
|
|
$
|
1,958
|
|
•
|
the effect of such repurchases on the Company's qualification as a RIC (including the consequences of any necessary asset sales);
|
•
|
the liquidity of the Company's assets (including fees and costs associated with disposing of assets);
|
•
|
the Company's investment plans and working capital requirements;
|
•
|
the relative economies of scale with respect to the Company's size;
|
•
|
the Company's history in repurchasing shares or portions thereof; and
|
•
|
the condition of the securities markets.
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
||||
|
2014
|
|
2013
|
||||
Distributions declared
|
$
|
106,299
|
|
|
$
|
31,299
|
|
Distributions paid
|
$
|
99,290
|
|
|
$
|
27,744
|
|
Portion of distributions paid in cash
|
$
|
50,721
|
|
|
$
|
16,602
|
|
Portion of distributions paid in DRIP shares
|
$
|
48,569
|
|
|
$
|
11,142
|
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Monthly distributions
|
$
|
106,299
|
|
|
$
|
31,299
|
|
|
$
|
5,762
|
|
Special dividends
|
—
|
|
|
—
|
|
|
1,379
|
|
|||
Stock dividends
|
—
|
|
|
—
|
|
|
264
|
|
|||
Total distributions
|
$
|
106,299
|
|
|
$
|
31,299
|
|
|
$
|
7,405
|
|
|
|
|
Payment Due by Period
|
||||||||||||||||
|
Total
|
|
Less than 1 year
|
|
1 - 3 years
|
|
3- 5 years
|
|
More than 5 years
|
||||||||||
Wells Fargo Credit Facility
(1)
|
$
|
288,087
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
288,087
|
|
|
$
|
—
|
|
Deutsche Bank Credit Facility
(2)
|
$
|
60,000
|
|
|
$
|
—
|
|
|
$
|
60,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Citi Credit Facility
(3)
|
$
|
270,625
|
|
|
$
|
—
|
|
|
$
|
270,625
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total contractual obligations
|
$
|
618,712
|
|
|
$
|
—
|
|
|
$
|
330,625
|
|
|
$
|
288,087
|
|
|
$
|
—
|
|
(1)
|
As of
December 31, 2014
, we had $11.9 million of unused borrowing capacity under the Wells Fargo Credit Facility, subject to borrowing base limits.
|
(2)
|
As of
December 31, 2014
, we had $0.0 million of unused borrowing capacity under the Deutsche Bank Credit Facility, subject to borrowing base limits.
|
(3)
|
As of
December 31, 2014
, we had $129.4 million of unused borrowing capacity under the Citi Credit Facility, subject to borrowing base limits.
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Net investment income
|
$
|
86,355
|
|
|
$
|
13,092
|
|
|
$
|
4,414
|
|
TRS net investment income
(1)
|
9,174
|
|
|
12,766
|
|
|
1,403
|
|
|||
Operating gains (short-term)
(2)
|
5,995
|
|
|
3,149
|
|
|
1,471
|
|
|||
Incentive fees on unrealized gains
(3)
|
2,625
|
|
|
2,306
|
|
|
358
|
|
|||
Transfer agent fees
(4)
|
2,150
|
|
|
—
|
|
|
—
|
|
|||
Adjusted net investment income
|
$
|
106,299
|
|
|
$
|
31,313
|
|
|
$
|
7,646
|
|
(1)
|
TRS net investment income includes the interest income and expense related to the TRS portfolio. See Note 6 - Total Return Swap - for more information about the TRS.
|
(2)
|
Operating gains include short-term realized gains that result primarily from active portfolio management activities. As a RIC, short-term capital gains represent operating income available for distribution and are considered ordinary income.
|
(3)
|
Incentive fees on unrealized gains are the GAAP-required theoretical incentive fees accrued based upon unrealized portfolio appreciation. These fees reduce net investment income but are not contractually due to the Adviser. See Note 4 - Related Party Transactions and Agreements - for additional details on the theoretical capital gains incentive fees.
|
(4)
|
Transfer agent fees only include the transfer agent fees which are treated as expense on the Consolidated Statement of Operations. These expenses are not tax deductible.
|
Change in Interest Rates
|
|
Estimated Percentage Change in Interest Income net of Interest Expense
|
|
(-) 25 Basis Points
|
|
0.94
|
%
|
Base Interest Rate
|
|
—
|
%
|
(+) 100 Basis Points
|
|
(2.26
|
)%
|
(+) 200 Basis Points
|
|
0.47
|
%
|
Name
|
|
Age
|
|
Position
|
Peter M. Budko
|
|
55
|
|
Chairman and Chief Executive Officer
|
William M. Kahane
|
|
67
|
|
Director
|
Leslie D. Michelson
|
|
64
|
|
Independent Director
|
Randolph C. Read
|
|
62
|
|
Independent Director
|
Edward G. Rendell
|
|
71
|
|
Independent Director
|
Name
|
|
Age
|
|
Principal Occupation and Positions Held
|
Peter M. Budko
(1)
|
|
55
|
|
Chairman and Chief Executive Officer
|
Robert K. Grunewald
|
|
52
|
|
President, Chief Investment Officer and Chief Operating Officer
|
Nicholas Radesca
|
|
49
|
|
Chief Financial Officer, Treasurer and Secretary
|
Thomas Riley
|
|
44
|
|
Chief Compliance Officer
|
|
|
|
|
|
(1)
|
Please see “Business Experience of Directors” above for biographical information about Mr. Budko.
|
Name
|
Fees Paid in Cash ($)
|
Stock Awards ($)
|
Option Awards ($)
|
Non Equity Incentive Plan Compensation ($)
|
Changes in Pension Value and Nonqualified Deferred Compensation Earnings ($)
|
All Other Compensation ($)
|
Total Compensation ($)
|
|||||
Peter M. Budko
(1)
|
—
|
|
—
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
William M. Kahane
(1)
|
—
|
|
—
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Leslie D. Michelson
|
27,500
|
|
|
|
|
|
|
27,500
|
||||
Randolph C. Read
(2)
|
—
|
|
—
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Edward G. Rendell
|
20,000
|
|
—
|
—
|
|
—
|
|
—
|
|
—
|
|
20,000
|
(1)
|
Messrs. Budko and Kahane receive no additional compensation for serving as a director or executive officer.
|
(2)
|
Mr. Read was elected to the Board effective December 18, 2014.
|
Beneficial Owner
(1)
|
|
Number of Shares Beneficially Owned
|
|
Percentage
(2)
|
Interested Directors:
|
|
|
|
|
Peter M. Budko
|
|
33,749
|
|
*
|
William M. Kahane
|
|
—
|
|
*
|
Independent Directors:
|
|
|
|
|
Leslie D. Michelson
|
|
8,678
|
|
*
|
Randolph C. Read
|
|
—
|
|
*
|
Edward G. Rendell
|
|
—
|
|
*
|
Officers (that are not directors):
|
|
|
|
|
Nicholas Radesca
|
|
—
|
|
*
|
Robert K. Grunewald
|
|
—
|
|
*
|
All directors and executive officers as a group (7 persons)
|
|
206,293
|
|
*
|
|
|
2014
|
|
2013
|
||||
Audit Fees
|
|
$
|
1,640,073
|
|
|
$
|
275,040
|
|
Audit Related Fees
|
|
—
|
|
|
—
|
|
||
Tax Fees
|
|
—
|
|
|
—
|
|
||
All Other Fees
|
|
—
|
|
|
51,025
|
|
||
Total Fees
|
|
$
|
1,640,073
|
|
|
$
|
326,065
|
|
Exhibit No.
|
Description
|
|
|
1.1
|
Dealer Manager Agreement with Realty Capital Securities, LLC, dated July 1, 2014 (previously filed as Exhibit 1.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 and filed on August 14, 2014 and herein incorporated by reference).
|
|
|
1.2
|
Form of Soliciting Dealer Agreement (previously filed as Exhibit 1.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 filed August 14, 2014 and herein incorporated by reference).
|
|
|
3.1
|
Second Articles of Amendment and Restatement of the Registrant (previously filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 filed on August 13, 2013 and herein incorporated by reference).
|
|
|
3.2
|
Bylaws (previously filed as Exhibit (b) to the Company’s Pre-Effective Amendment No. 1 to its Registration Statement on Form N-2/A (File No. 333-166636) (the "Prior Registration Statement") filed on November 24, 2010 and herein incorporated by reference).
|
|
|
10.1
|
Second Amended and Restated Investment Advisory and Management Services Agreement dated June 5, 2013 by and between the Company and the Adviser (previously filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 filed on August 13, 2013 and herein incorporated by reference).
|
|
|
10.2
|
Amended and Restated Subscription Escrow Agreement with Wells Fargo Bank (previously filed as Exhibit (k)(1) to the Company's Post Effective Amendment No. 3 to its Prior Registration Statement filed on November 4, 2011 and herein incorporated by reference).
|
|
|
10.3
|
Amended and Restated Fund Administration Servicing Agreement by and between the Company and U.S. Bancorp Fund Services, LLC (previously filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 17, 2015 and herein incorporated by reference).
|
|
|
10.4
|
Amended and Restated Fund Accounting Servicing Agreement by and between the Company and U.S. Bancorp Fund Services, LLC (previously filed as Exhibit 10.2 to the Company's Current Report on Form 8-K filed on April 17, 2015 and herein incorporated by reference).
|
|
|
10.5
|
Distribution Reinvestment Plan (previously filed as Exhibit E to the Company's Pre-Effective Amendment No. 1 to its Prior Registration Statement filed on November 24, 2010 and herein incorporated by reference).
|
|
|
10.6
|
Custody Agreement dated August 13, 2012 by and between the Company and U.S. Bank National Association (previously filed as Exhibit 10.11 to the Company's Current Report on Form 8-K filed on August 17, 2012 and herein incorporated by reference).
|
|
|
10.7
|
Expense Support Agreement dated November 9, 2011 by and between the Company and Adviser (previously filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 filed on November 14, 2011 and herein incorporated by reference).
|
|
|
10.8
|
ISDA 2002 Master Agreement, together with the Schedule thereto and Credit Support Annex to such Schedule, by and between 405 TRS I, LLC and Citibank, N.A, each dated as of July 13, 2012 (previously filed as Exhibit 10.13 to the Company's Current Report on Form 8-K filed on August 7, 2012 and herein incorporated by reference).
|
|
|
10.9
|
Confirmation Letter Agreement by and between 405 TRS I, LLC and Citibank, N.A., amended and restated as of October 15, 2013 (previously filed as Exhibit 10.21 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 filed on November 13, 2013 and herein incorporated by reference).
|
|
|
Exhibit No.
|
Description
|
10.10
|
Loan and Servicing Agreement, together with Exhibits thereto, among BDCA Funding I, LLC, the Company, Wells Fargo Securities, LLC, Wells Fargo Bank, National Association, Lenders and Lenders Agents from time to time party hereto and U.S. Bank National Association, each dated as of July 24, 2012 (previously filed as Exhibit 10.15 to the Company's Current Report on Form 8-K filed on August 7, 2012 and herein incorporated by reference).
|
|
|
10.11
|
Purchase and Sale Agreement by and between the Company and BDCA Funding I, LLC, dated as of July 24, 2012 (previously filed as Exhibit 10.16 to the Company's Current Report on Form 8-K filed on August 7, 2012 and herein incorporated by reference).
|
|
|
10.12
|
Collection Account Agreement by and among U.S. Bank National Association, Wells Fargo Securities, LLC, BDCA Funding I, LLC and the Company, dated as of July 24, 2012 (previously filed as Exhibit 10.17 to the Company's Current Report on Form 8-K filed on August 7, 2012 and herein incorporated by reference).
|
|
|
10.13
|
Amendment No. 1 to Loan and Servicing Agreement, among BDCA Funding I, LLC, the Company, Wells Fargo Securities, LLC and Wells Fargo Bank, National Association, dated as of January 14, 2013 (previously filed as Exhibit 10.16 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 filed on May 15, 2013 and herein incorporated by reference).
|
|
|
10.14
|
Amendment No. 2 to Loan and Servicing Agreement, among BDCA Funding I, LLC, the Company, Wells Fargo Securities, LLC and Wells Fargo Bank, National Association, dated as of April 26, 2013 (previously filed as Exhibit 10.17 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 filed on May 15, 2013 and herein incorporated by reference).
|
|
|
10.15
|
Amendment No. 1 to Purchase and Sale Agreement, entered into by and between BDCA Funding I, LLC, the Company, Wells Fargo Securities, LLC and Wells Fargo Bank, National Association and U.S. Bank National Association, dated as of April 26, 2013 (previously filed as Exhibit 10.18 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 filed on May 15, 2013 and herein incorporated by reference).
|
|
|
10.16
|
Confirmation Letter Agreement by and between 405 TRS I, LLC and Citibank, N.A., amended and restated as of July 18, 2013 (previously filed as Exhibit 10.19 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 filed on August 13, 2013 and herein incorporated by reference).
|
|
|
10.17
|
Amendment No. 3 to Loan and Servicing Agreement, among BDCA Funding I, LLC, the Company, Wells Fargo Securities, LLC and Wells Fargo Bank, National Association, dated as of September 9, 2013 (previously filed as Exhibit 10.20 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 filed on November 13, 2013 and herein incorporated by reference).
|
|
|
10.18
|
Confirmation Letter Agreement by and between 405 TRS I, LLC and Citibank, N.A., amended and restated as of October 15, 2013 (previously filed as Exhibit 10.21 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 filed on November 13, 2013 and herein incorporated by reference).
|
|
|
10.19
|
Loan financing and Servicing Agreement dated February 21, 2014 between BDCA 2L Funding I, LLC, as Borrower; Business Development Corporation of America, as Equityholder and as Servicer; the Lenders From Time to Time Parties Hereto; Deutsche Bank AG, New York Branch, as Administrative Agent, the Other Agents Party Hereto; and U.S. Bank National Association as Collateral Agent and as Collateral Custodian (previously filed as Exhibit 10.22 to the Company's Annual Report on form 10-K for the year ended December 31, 2013 filed on March 19, 2014 and herein incorporated by reference).
|
|
|
10.20
|
Sale and Contribution Agreement dated February 21, 2014 between Business Development Corporation of America, as Seller and BDCA 2L Funding I, LLC, as Purchaser (previously filed as Exhibit 10.23 to the Company's Annual Report on Form 10-K filed on March 19, 2014 and herein incorporated by reference).
|
|
|
10.21
|
Securities Account Control Agreement dated February 21, 2014 between BDCA 2L Funding I, LLC, as Pledgor, U.S. Bank National Association, as Secured Party; and U.S. Bank National Association, as Securities Intermediary (previously filed as Exhibit 10.24 to the Company's Annual Report on Form 10-K filed on March 19, 2014 and herein incorporated by reference).
|
|
|
10.22
|
Confirmation Letter Agreement by and between 405 TRS I, LLC and Citibank, N.A., amended and restated as of May 6, 2014 (previously filed as Exhibit 10.25 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 filed on May 15, 2014 and herein incorporated by reference).
|
|
|
10.23
|
Credit and Security Agreement, dated as of June 27, 2014, by and between BDCA-CB Funding LLC, the financial institutions and other lenders from time to time party thereto, Citibank, N.A., as administrative agent, U.S. Bank National Association, as collateral agent and custodian, and Business Development Corporation of America, as collateral manager (previously filed as exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 2, 2014 and herein incorporated by reference).
|
|
|
Exhibit No.
|
Description
|
10.24
|
Account Control Agreement, dated as of June 27, 2014, by and between BDCA-CB Funding, LLC, as pledger, U.S. Bank National Association as collateral agent and securities intermediary(previously filed as exhibit 10.2 to the Company’s Current Report on Form 8-K filed on July 2, 2014 and herein incorporated by reference).
|
|
|
10.25
|
Collateral Administration Agreement, dated as of June 27, 2014, between BDCA-CB Funding, LLC, as borrower, Business Development Corporation of America, as collateral manager, Citibank, N.A., as administrative agent, and U.S. Bank National Association, as collateral administrator (previously filed as exhibit 10.3 to the Company’s Current Report on Form 8-K filed on July 2, 2014 and herein incorporated by reference).
|
|
|
10.26
|
Sale and Contribution Agreement, dated as of June 27, 2014, between Business Development Corporation of America, as seller, and BDCA-CB Funding, LLC, as purchaser(previously filed as exhibit 10.4 to the Company’s Current Report on Form 8-K filed on July 2, 2014 and herein incorporated by reference).
|
|
|
10.27
|
Agreement and Plan of Merger, dated as of June 27, 2014, by and among BDCA-CB Funding LLC, 405 Loan Funding LLC and Citibank, N.A. (previously filed as exhibit 10.5 to the Company’s Current Report on Form 8-K filed on July 2, 2014 and herein incorporated by reference).
|
|
|
10.28
|
Termination Acknowledgment (TRS), dated as of June 27, 2014, by and between BDCA-CB Funding LLC and Citibank, N.A., as counterparty, secured party and bank (previously filed as exhibit 10.6 to the Company’s Current Report on Form 8-K filed on July 2, 2014 and herein incorporated by reference).
|
|
|
10.29
|
Amendment No. 4 to Loan and Servicing Agreement, dated as of June 30, 2014 (as amended), by and among BDCA Funding I, LLC, the Company, Wells Fargo Securities, LLC and Wells Fargo Bank, National Association, and U.S. Bank National Association (filed on August 14, 2014 and herein incorporated by reference).
|
|
|
10.30
|
Master Loan Purchase Agreement, dated as of April 7, 2015 between BDCA Helvetica Funding, Ltd. and Business Development Corporation of America (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 7, 2015 and herein incorporated by reference).
|
|
|
10.31
|
Indenture, dated as of April 7, 2015, by and between BDCA Helvetica Funding, Ltd. and U.S. Bank National Association as trustee (previously filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 7, 2015 and herein incorporated by reference).
|
|
|
10.32
|
Subscription Agreement, dated as of April 7, 2015, between BDCA Helvetica Funding, Ltd., Business Development Corporation of America (previously filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on April 7, 2015 and herein incorporated by reference).
|
|
|
10.33
|
Rule 144A Global Class A Notes and Regulation S Global Class A Notes (included in Exhibit A to Exhibit 10.2 to the Company’s Current Report on Form 8-K previously filed on April 7, 2015 and herein incorporated by reference).
|
|
|
10.34
|
TBMA/ISMA 2000 Global Master Repurchase Agreement (2000 version), by and between UBS AG, London Branch and Business Development Corporation of America, together with the related Annex and Confirmation thereto, each dated as of March 31, 2015 (previously filed as Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on April 7, 2015 and herein incorporated by reference).
|
|
|
10.35
|
Collateral Management Agreement, dated as of April 7, 2015, between BDCA Helvetica Funding, Ltd. and Business Development Corporation of America (previously filed as Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on April 7, 2015 and herein incorporated by reference).
|
|
|
10.36
|
Collateral Administration Agreement, dated as of April 7, 2015, between BDCA Helvetica Funding, Ltd., Business Development Corporation of America and U.S. Bank National Association as administrator (previously filed as Exhibit 10.7 to the Company’s Current Report on Form 8-K filed on April 7, 2015 and herein incorporated by reference).
|
|
|
10.37
|
Account Control Agreement dated as of April 7, 2015 between BDCA Helvetica Funding, Ltd. and U.S. Bank National Association as trustee and custodian (previously filed as Exhibit 10.8 to the Company’s Current Report on Form 8-K filed on April 7, 2015 and herein incorporated by reference).
|
|
|
10.38
|
Equity Contribution Agreement, dated as of April 7, 2015, between BDCA Helvetica Funding, Ltd., Business Development Corporation of America and U.S. Bank National Association as trustee (previously filed as Exhibit 10.9 to the Company’s Current Report on Form 8-K filed on April 7, 2015 and herein incorporated by reference).
|
|
|
10.39
|
Liquidation Agent Appointment Letter, dated as of April 7, 2015, between BDCA Helvetica Funding, Ltd., Business Development Corporation of America and UBS AG, London Branch (previously filed as Exhibit 10.10 to the Company’s Current Report on Form 8-K filed on April 7, 2015 and herein incorporated by reference).
|
Exhibit No.
|
Description
|
|
|
10.40
|
Form of Indemnification Agreement (filed herewith).
|
|
|
14
|
Code of Ethics (filed herewith).
|
|
|
21
|
Subsidiaries of the Registrant (previously filed as exhibit 21 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 filed on August 14, 2014 and herein incorporated by reference).
|
|
|
31.1
|
Certification of the Principal Executive Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
|
31.2
|
Certification of the Principal Financial Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
|
32
|
Written statement of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
|
|
|
|
BUSINESS DEVELOPMENT CORPORATION OF AMERICA
|
|
|
By:
/s/ Peter M. Budko
Name: Peter M. Budko
Title: Chief Executive Officer and Chairman of the Board of Directors
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Peter M. Budko
Peter M. Budko
|
|
Chief Executive Officer and Chairman of the Board of Directors
(Principal Executive Officer)
|
|
May 4, 2015
|
/s/ Nicholas Radesca
Nicholas Radesca
|
|
Chief Financial Officer, Treasurer and Secretary
(Principal Financial and Accounting Officer)
|
|
May 4, 2015
|
/s/ William M. Kahane
William M. Kahane
|
|
Director
|
|
May 4, 2015
|
/s/ Edward G. Rendell
Edward G. Rendell
|
|
Independent Director
|
|
May 4, 2015
|
/s/ Leslie D. Michelson
Leslie D. Michelson
|
|
Independent Director
|
|
May 4, 2015
|
/s/ Randolph C. Read
Randolph C. Read
|
|
Independent Director
|
|
May 4, 2015
|
|
|
|
Page
|
Audited Consolidated Financial Statements:
|
|
Consolidated Statements of Assets and Liabilities as of December 31, 2014 and December 31, 2013
|
|
Consolidated Statements of Changes in Net Assets for the Years Ended December 31, 2014, 2013 and 2012
|
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2014, 2013 and 2012
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
ASSETS
|
|
|
|
||||
Investments, at fair value:
|
|
|
|
||||
Control Investments, at fair value (amortized cost of $77,986 and $34,132, respectively)
|
$
|
88,841
|
|
|
$
|
34,132
|
|
Affiliate Investments, at fair value (amortized cost of $513,185 and $150,729, respectively)
|
505,806
|
|
|
154,209
|
|
||
Non-affiliate Investments, at fair value (amortized cost of $1,340,855 and $501,416, respectively)
|
1,322,344
|
|
|
507,435
|
|
||
Investments, at fair value (amortized cost of $1,932,026 and $686,277, respectively)
|
1,916,991
|
|
|
695,776
|
|
||
Cash and cash equivalents
|
206,872
|
|
|
12,995
|
|
||
Cash collateral on deposit with custodian
|
—
|
|
|
76,874
|
|
||
Receivable for unsettled trades
|
33,746
|
|
|
36,158
|
|
||
Interest receivable
|
22,464
|
|
|
7,527
|
|
||
Deferred credit facility financing costs, net
|
4,411
|
|
|
2,278
|
|
||
Prepaid expenses and other assets
|
1,792
|
|
|
1,003
|
|
||
Due from affiliate
|
1,666
|
|
|
1,059
|
|
||
Receivable due on total return swap
|
—
|
|
|
4,053
|
|
||
Unrealized gain on total return swap
|
—
|
|
|
3,180
|
|
||
Dividend receivable
|
—
|
|
|
738
|
|
||
Total assets
|
$
|
2,187,942
|
|
|
$
|
841,641
|
|
|
|
|
|
||||
LIABILITIES
|
|
|
|
|
|
||
Revolving credit facility
|
$
|
618,712
|
|
|
$
|
132,687
|
|
Stockholder distributions payable
|
11,587
|
|
|
4,578
|
|
||
Management fees payable
|
7,981
|
|
|
2,689
|
|
||
Subordinated income incentive fees payable
|
2,736
|
|
|
2,577
|
|
||
Accounts payable and accrued expenses
|
6,760
|
|
|
599
|
|
||
Interest and credit facility fees payable
|
3,386
|
|
|
715
|
|
||
Payable for unsettled trades
|
685
|
|
|
67,003
|
|
||
Payable for common stock repurchases
|
672
|
|
|
88
|
|
||
Accrued capital gains incentive fees
|
—
|
|
|
2,802
|
|
||
Total liabilities
|
$
|
652,519
|
|
|
$
|
213,738
|
|
Commitments and contingencies (Note 7)
|
|
|
|
||||
|
|
|
|
||||
NET ASSETS
|
|
|
|
||||
Preferred stock, $.001 par value, 50,000,000 shares authorized, none issued and outstanding
|
$
|
—
|
|
|
$
|
—
|
|
Common stock, $.001 par value, 450,000,000 shares authorized, 157,534,040 and 63,671,644 shares issued and outstanding, respectively
|
157
|
|
|
64
|
|
||
Additional paid in capital
|
1,544,584
|
|
|
611,703
|
|
||
Accumulated under / (over) distributed net investment income
|
7,710
|
|
|
(509
|
)
|
||
Accumulated under distributed realized gains
|
(539
|
)
|
|
3,966
|
|
||
Net unrealized appreciation (depreciation)
|
(18,082
|
)
|
|
12,679
|
|
||
Total Business Development Corporation of America net assets
|
1,533,830
|
|
|
627,903
|
|
||
Non-controlling interest
|
1,593
|
|
|
—
|
|
||
Total net assets
|
1,535,423
|
|
|
627,903
|
|
||
|
|
|
|
||||
Total liabilities and net assets
|
$
|
2,187,942
|
|
|
$
|
841,641
|
|
|
|
|
|
||||
Net asset value per share
|
$
|
9.74
|
|
|
$
|
9.86
|
|
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
Investment income:
|
|
|
|
|
|
|
||||||
Interest from investments
|
|
|
|
|
|
|
||||||
Control investments
|
|
$
|
5,076
|
|
|
$
|
55
|
|
|
$
|
—
|
|
Affiliate investments
|
|
39,510
|
|
|
5,829
|
|
|
—
|
|
|||
Non-control/Non-affiliate investments
|
|
83,172
|
|
|
23,632
|
|
|
6,777
|
|
|||
Total interest from investments
|
|
127,758
|
|
|
29,516
|
|
|
6,777
|
|
|||
Interest from cash and cash equivalents
|
|
25
|
|
|
7
|
|
|
2
|
|
|||
Total interest income
|
|
127,783
|
|
|
29,523
|
|
|
6,779
|
|
|||
Other income
|
|
10,498
|
|
|
1,870
|
|
|
135
|
|
|||
Total investment income
|
|
138,281
|
|
|
31,393
|
|
|
6,914
|
|
|||
|
|
|
|
|
|
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||
Management fees
|
|
24,926
|
|
|
6,555
|
|
|
1,320
|
|
|||
Subordinated income incentive fees
|
|
9,929
|
|
|
6,377
|
|
|
827
|
|
|||
Capital gains incentive fees
|
|
(2,664
|
)
|
|
2,444
|
|
|
543
|
|
|||
Interest and credit facility financing expenses
|
|
11,057
|
|
|
2,248
|
|
|
683
|
|
|||
Professional fees
|
|
5,956
|
|
|
1,723
|
|
|
554
|
|
|||
Other general and administrative
|
|
3,060
|
|
|
171
|
|
|
110
|
|
|||
Administrative services
|
|
770
|
|
|
318
|
|
|
60
|
|
|||
Insurance
|
|
221
|
|
|
223
|
|
|
205
|
|
|||
Directors fees
|
|
74
|
|
|
69
|
|
|
75
|
|
|||
Expenses before expense waivers and reimbursements from Adviser
|
|
53,329
|
|
|
20,128
|
|
|
4,377
|
|
|||
Waiver of management and incentive fees
|
|
(1,335
|
)
|
|
(1,827
|
)
|
|
(1,611
|
)
|
|||
Expense support reimbursements from Adviser
|
|
—
|
|
|
—
|
|
|
(266
|
)
|
|||
Total expenses net of expense waivers and reimbursements from Adviser
|
|
51,994
|
|
|
18,301
|
|
|
2,500
|
|
|||
|
|
|
|
|
|
|
||||||
Net investment loss attributable to noncontrolling interests
|
|
(68
|
)
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
||||||
Net investment income
|
|
86,355
|
|
|
13,092
|
|
|
4,414
|
|
|||
|
|
|
|
|
|
|
||||||
Realized and unrealized gain (loss) on investments and total return swap:
|
|
|
|
|
|
|
||||||
Net realized gain (loss) from investments
|
|
|
|
|
|
|
||||||
Control investments
|
|
(79
|
)
|
|
—
|
|
|
—
|
|
|||
Affiliate investments
|
|
7,785
|
|
|
855
|
|
|
—
|
|
|||
Non-control/non-affiliate investments
|
|
1,688
|
|
|
3,111
|
|
|
1,471
|
|
|||
Total net realized gain from investments
|
|
9,394
|
|
|
3,966
|
|
|
1,471
|
|
|||
Net realized gain from total return swap
|
|
14,552
|
|
|
14,641
|
|
|
1,958
|
|
|||
Net change in unrealized appreciation (depreciation) on investments
|
|
|
|
|
|
|
||||||
Control investments
|
|
10,854
|
|
|
—
|
|
|
—
|
|
|||
Affiliate investments
|
|
(10,858
|
)
|
|
3,344
|
|
|
137
|
|
|||
Non-control/non-affiliate investments
|
|
(24,529
|
)
|
|
4,909
|
|
|
1,132
|
|
|||
Total net change in unrealized appreciation (depreciation) on investments
|
|
(24,533
|
)
|
|
8,253
|
|
|
1,269
|
|
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
||||||
Net change in unrealized appreciation (depreciation) on total return swap
|
|
(3,180
|
)
|
|
2,792
|
|
|
388
|
|
|||
Net realized and unrealized gain (loss) on investments and total return swap before non-controlling interests and deferred income taxes
|
|
(3,767
|
)
|
|
29,652
|
|
|
5,086
|
|
|||
Net change in unrealized depreciation attributable to non-controlling interests
|
|
(660
|
)
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
||||||
Net deferred income tax expense on unrealized appreciation of investments
|
|
(2,388
|
)
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
||||||
Net realized and unrealized gain (loss) on investments and total return swap
|
|
(6,815
|
)
|
|
29,652
|
|
|
5,086
|
|
|||
|
|
|
|
|
|
|
||||||
Net increase in net assets resulting from operations
|
|
$
|
79,540
|
|
|
$
|
42,744
|
|
|
$
|
9,500
|
|
|
|
|
|
|
|
|
||||||
Per share information - basic and diluted
|
|
|
|
|
|
|
||||||
Net investment income
|
|
$
|
0.71
|
|
|
$
|
0.36
|
|
|
$
|
0.63
|
|
Net increase in net assets resulting from operations
|
|
$
|
0.65
|
|
|
$
|
1.17
|
|
|
$
|
1.36
|
|
Weighted average shares outstanding
|
|
122,154,778
|
|
|
36,390,524
|
|
|
6,987,287
|
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Operations:
|
|
|
|
|
|
||||||
Net investment income
|
$
|
86,355
|
|
|
$
|
13,092
|
|
|
$
|
4,414
|
|
Net realized gain from investments
|
9,394
|
|
|
3,966
|
|
|
1,471
|
|
|||
Net realized gain from total return swap
|
14,552
|
|
|
14,641
|
|
|
1,958
|
|
|||
Net change in unrealized appreciation (depreciation) on investments
|
(24,533
|
)
|
|
8,253
|
|
|
1,269
|
|
|||
Net change in unrealized appreciation (depreciation) on total return swap
|
(3,180
|
)
|
|
2,792
|
|
|
388
|
|
|||
Net change in unrealized depreciation on minority interest
|
(660
|
)
|
|
—
|
|
|
—
|
|
|||
Net unrealized deferred tax
|
(2,388
|
)
|
|
—
|
|
|
—
|
|
|||
Net increase in net assets from operations
|
79,540
|
|
|
42,744
|
|
|
9,500
|
|
|||
Stockholder distributions:
|
|
|
|
|
|
|
|
||||
Distributions from net investment income
(1)
|
(86,355
|
)
|
|
(13,092
|
)
|
|
(4,414
|
)
|
|||
Distributions from net realized gain from investments and total return swap
(1)
|
(19,944
|
)
|
|
(18,207
|
)
|
|
(2,991
|
)
|
|||
Net decrease in net assets from stockholder distributions
|
(106,299
|
)
|
|
(31,299
|
)
|
|
(7,405
|
)
|
|||
Capital share transactions:
|
|
|
|
|
|
|
|
||||
Issuance of common stock, net of issuance costs
|
888,579
|
|
|
466,008
|
|
|
128,463
|
|
|||
Reinvestment of stockholder distributions
|
48,569
|
|
|
11,142
|
|
|
2,181
|
|
|||
Repurchases of common stock
|
(4,462
|
)
|
|
(1,377
|
)
|
|
(261
|
)
|
|||
Net increase in net assets from capital share transactions
|
932,686
|
|
|
475,773
|
|
|
130,383
|
|
|||
Total increase in Business Development Corporation of America net assets
|
905,927
|
|
|
487,218
|
|
|
132,478
|
|
|||
Increase in non-controlling interest
|
1,593
|
|
|
—
|
|
|
—
|
|
|||
Total increase in net assets
|
907,520
|
|
|
487,218
|
|
|
132,478
|
|
|||
Net assets at beginning of period
|
627,903
|
|
|
140,685
|
|
|
8,207
|
|
|||
Net assets at end of period
|
$
|
1,535,423
|
|
|
$
|
627,903
|
|
|
$
|
140,685
|
|
|
|
|
|
|
|
||||||
Net asset value per common share
|
$
|
9.74
|
|
|
$
|
9.86
|
|
|
$
|
9.41
|
|
Common shares outstanding at end of period
|
157,534,040
|
|
|
63,671,644
|
|
|
14,943,215
|
|
|||
|
|
|
|
|
|
||||||
Accumulated under / (over) distributed net investment income
|
$
|
7,710
|
|
|
$
|
(509
|
)
|
|
$
|
696
|
|
Accumulated under distributed realized gains
|
$
|
(539
|
)
|
|
$
|
3,966
|
|
|
$
|
—
|
|
(1)
|
Distributions from net investment income and distributions from net realized gain from investments and total return swap were not previously presented for the year ended December 31, 2012 but has been presented herein for consistency with the year ended December 31, 2013.
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Operating activities:
|
|
|
|
|
|
||||||
Net increase in net assets from operations
|
$
|
79,540
|
|
|
$
|
42,744
|
|
|
$
|
9,500
|
|
Adjustments to reconcile net increase (decrease) in net assets from operations to net cash used in operating activities:
|
|
|
|
|
|
|
|||||
Paid-in-kind interest income
|
(2,896
|
)
|
|
(807
|
)
|
|
(15
|
)
|
|||
Net accretion of discount on investments
|
(2,830
|
)
|
|
(672
|
)
|
|
(230
|
)
|
|||
Amortization of deferred financing costs
|
1,186
|
|
|
344
|
|
|
140
|
|
|||
Sales and repayments of investments
|
1,284,029
|
|
|
270,038
|
|
|
135,746
|
|
|||
Purchase of investments
|
(2,514,658
|
)
|
|
(815,944
|
)
|
|
(254,661
|
)
|
|||
Net realized gain from investments
|
(9,394
|
)
|
|
(3,966
|
)
|
|
(1,471
|
)
|
|||
Net unrealized (appreciation) depreciation on investments
|
24,533
|
|
|
(8,253
|
)
|
|
(1,269
|
)
|
|||
Net unrealized appreciation on total return swap
|
3,180
|
|
|
(2,792
|
)
|
|
(388
|
)
|
|||
(Increase) decrease in operating assets:
|
|
|
|
|
|
|
|||||
Cash collateral on deposit with custodian
|
76,874
|
|
|
(57,716
|
)
|
|
(19,157
|
)
|
|||
Interest receivable
|
(14,937
|
)
|
|
(6,315
|
)
|
|
(1,070
|
)
|
|||
Dividend receivable
|
738
|
|
|
(738
|
)
|
|
—
|
|
|||
Receivable due on total return swap
|
4,053
|
|
|
(2,766
|
)
|
|
(1,286
|
)
|
|||
Prepaid expenses and other assets
|
(789
|
)
|
|
(768
|
)
|
|
(193
|
)
|
|||
Receivable for unsettled trades
|
2,412
|
|
|
(24,245
|
)
|
|
(11,913
|
)
|
|||
Increase (decrease) in operating liabilities:
|
|
|
|
|
|
|
|||||
Payable for unsettled trades
|
(66,318
|
)
|
|
57,203
|
|
|
7,886
|
|
|||
Management and incentive fees payable
|
2,649
|
|
|
7,164
|
|
|
904
|
|
|||
Interest and credit facility fees payable
|
2,671
|
|
|
522
|
|
|
173
|
|
|||
Accounts payable and accrued expenses
|
6,161
|
|
|
407
|
|
|
87
|
|
|||
Payable for common stock repurchases
|
584
|
|
|
(88
|
)
|
|
—
|
|
|||
Net cash used in operating activities
|
(1,123,212
|
)
|
|
(546,648
|
)
|
|
(137,217
|
)
|
|||
|
|
|
|
|
|
||||||
Financing activities:
|
|
|
|
|
|
|
|
||||
Proceeds from issuance of shares of common stock, net
|
888,579
|
|
|
466,007
|
|
|
128,463
|
|
|||
Repurchases of common stock
|
(4,462
|
)
|
|
(1,377
|
)
|
|
(86
|
)
|
|||
Decrease (increase) in deferred offering costs receivable
|
(2,017
|
)
|
|
2,047
|
|
|
(1,754
|
)
|
|||
Proceeds from revolving credit facility
|
543,026
|
|
|
128,500
|
|
|
40,565
|
|
|||
Payments on revolving credit facility
|
(57,000
|
)
|
|
(29,720
|
)
|
|
(12,558
|
)
|
|||
Payments of financing cost
|
(3,319
|
)
|
|
(1,887
|
)
|
|
(875
|
)
|
|||
Payments to (proceeds from) affiliate
|
1,410
|
|
|
(1,505
|
)
|
|
1,071
|
|
|||
Stockholder distributions
|
(50,721
|
)
|
|
(16,602
|
)
|
|
(4,257
|
)
|
|||
Increase in non-controlling interest
|
1,593
|
|
|
—
|
|
|
—
|
|
|||
Net cash provided by financing activities
|
1,317,089
|
|
|
545,463
|
|
|
150,569
|
|
|||
|
|
|
|
|
|
||||||
Net increase (decrease) in cash and cash equivalents
|
193,877
|
|
|
(1,185
|
)
|
|
13,352
|
|
|||
Cash and cash equivalents, beginning of period
|
12,995
|
|
|
14,180
|
|
|
828
|
|
|||
Cash and cash equivalents, end of period
|
$
|
206,872
|
|
|
$
|
12,995
|
|
|
$
|
14,180
|
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Supplemental information:
|
|
|
|
|
|
|
|
||||
Interest paid during the period
|
$
|
7,305
|
|
|
$
|
1,381
|
|
|
$
|
272
|
|
Taxes, including excise tax, paid during the period
|
$
|
174
|
|
|
$
|
5
|
|
|
$
|
2
|
|
Supplemental non-cash information:
|
|
|
|
|
|
||||||
Payable for common stock repurchases
|
$
|
672
|
|
|
$
|
88
|
|
|
$
|
175
|
|
DRIP distribution payable
|
$
|
5,735
|
|
|
$
|
2,074
|
|
|
$
|
341
|
|
Cash distribution payable
|
$
|
5,852
|
|
|
$
|
2,504
|
|
|
$
|
682
|
|
DRIP distribution paid
|
$
|
48,569
|
|
|
$
|
11,142
|
|
|
$
|
1,917
|
|
Stock distribution paid
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
264
|
|
December 31, 2014
|
|||||||||||||||||||
Portfolio Company (q)
|
|
Industry
|
|
Investment Coupon Rate/Maturity
|
|
Principal / Number of Shares
|
|
Amortized Cost
|
|
Fair Value (c)
|
|
% of Net Assets
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured First Lien Debt - 65.0% (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Ability Networks Inc. (aa)
|
|
Health Care Providers & Services
|
|
L+5.00% (6.00%), 5/14/2021
|
|
$
|
7,960
|
|
|
$
|
7,923
|
|
|
$
|
7,781
|
|
|
0.5
|
%
|
AM General LLC (aa)
|
|
Aerospace & Defense
|
|
L+9.00% (10.25%), 3/22/2018
|
|
5,950
|
|
|
5,381
|
|
|
5,229
|
|
|
0.3
|
%
|
|||
Amports, Inc. (ab)
|
|
Automotive
|
|
L+8.00% (9.00%), 5/19/2020
|
|
14,999
|
|
|
14,899
|
|
|
14,986
|
|
|
1.0
|
%
|
|||
Answers Corporation (z) (aa)
|
|
Internet Software & Services
|
|
L+5.25% (6.25%),10/3/2021
|
|
35,000
|
|
|
33,811
|
|
|
33,162
|
|
|
2.2
|
%
|
|||
AP Gaming I, LLC (z)
|
|
Hotels, Restaurants & Leisure
|
|
L+8.25% (9.25%), 12/20/2020
|
|
4,913
|
|
|
4,786
|
|
|
4,888
|
|
|
0.3
|
%
|
|||
Applied Merchant Systems West Coast, Inc.
|
|
Diversified Financial Services
|
|
L+11.50% (12.50%), 9/19/2019
|
|
19,256
|
|
|
18,868
|
|
|
18,863
|
|
|
1.2
|
%
|
|||
Avaya, Inc. Term Loan B-6 (aa)
|
|
Communications Equipment
|
|
L+5.50% (6.50%), 3/31/2018
|
|
12,831
|
|
|
12,848
|
|
|
12,617
|
|
|
0.8
|
%
|
|||
Caesars Growth Properties Holdings, LLC (a) (aa)
|
|
Hotels, Restaurants & Leisure
|
|
L+5.25% (6.25%), 5/8/2021
|
|
4,975
|
|
|
4,971
|
|
|
4,548
|
|
|
0.3
|
%
|
|||
Central Security Group, Inc. (z) (aa)
|
|
Commercial Services & Supplies
|
|
L+5.25% (6.25%), 10/2/2020
|
|
18,500
|
|
|
18,230
|
|
|
18,176
|
|
|
1.2
|
%
|
|||
Chicken Soup for the Soul Publishing, LLC (z) (ab)
|
|
Publishing
|
|
L+6.00% (7.25%), 1/8/2019
|
|
29,850
|
|
|
29,549
|
|
|
30,048
|
|
|
2.0
|
%
|
|||
Clover Technologies Group, LLC (aa)
|
|
Commercial Services & Supplies
|
|
L+4.50% (5.50%), 5/8/2020
|
|
11,471
|
|
|
11,481
|
|
|
11,156
|
|
|
0.7
|
%
|
|||
ConvergeOne Holdings Corp. (aa)
|
|
Diversified Consumer Services
|
|
L+5.00% (6.00%), 6/17/2020
|
|
13,432
|
|
|
13,308
|
|
|
13,365
|
|
|
0.9
|
%
|
|||
Creative Circle, LLC (z) (aa)
|
|
Professional Services
|
|
L+4.50% (5.50%), 6/25/2020
|
|
12,374
|
|
|
12,261
|
|
|
12,220
|
|
|
0.8
|
%
|
|||
Danish CRJ LTD. (a) (p)
|
|
Aerospace & Defense
|
|
13.50%
|
|
181
|
|
|
181
|
|
|
181
|
|
|
—
|
%
|
|||
Eagle Rx, LLC (z)
|
|
Health Care Providers & Services
|
|
L+6.00% (7.00%), 8/15/2019
|
|
15,920
|
|
|
15,845
|
|
|
16,024
|
|
|
1.0
|
%
|
|||
ECI Acquisition Holdings, Inc. (k) (z)
|
|
Technology - Enterprise Solutions
|
|
L+6.25% (7.25%), 3/11/2019
|
|
12,320
|
|
|
12,268
|
|
|
12,224
|
|
|
0.8
|
%
|
|||
Epic Health Services, Inc. (z)
|
|
Health Care Providers & Services
|
|
L+5.25% (6.50%), 10/18/2018
|
|
15,522
|
|
|
15,410
|
|
|
15,508
|
|
|
1.0
|
%
|
|||
ERG Holding Company (z) (ad)
|
|
Health Care Providers & Services
|
|
L+6.75% (8.00%), 4/4/2019
|
|
14,578
|
|
|
14,329
|
|
|
14,370
|
|
|
0.9
|
%
|
|||
Excelitas Technologies Corp. (aa)
|
|
Electronic Equipment, Instruments & Components
|
|
L+5.00% (6.00%), 11/2/2020
|
|
10,126
|
|
|
10,161
|
|
|
10,007
|
|
|
0.7
|
%
|
|||
EZE Trucking, Inc. (aj) (z)
|
|
Road & Rail
|
|
L+10.75% (14.00%), 7/31/2018
|
|
12,499
|
|
|
12,455
|
|
|
12,499
|
|
|
0.8
|
%
|
|||
GTCR Valor Companies, Inc. (z) (aa)
|
|
Software
|
|
L+5.00% (6.00%), 5/30/2021
|
|
36,890
|
|
|
36,049
|
|
|
35,830
|
|
|
2.3
|
%
|
|||
Hanna Anderson, LLC (z)
|
|
Retailers (except food & drug)
|
|
L+7.25% (8.25%), 4/21/2019
|
|
14,625
|
|
|
14,499
|
|
|
14,896
|
|
|
1.0
|
%
|
|||
Henniges Automotive Holdings, Inc. (aa)
|
|
Automotive
|
|
L+5.00% (6.00%), 6/12/2021
|
|
9,943
|
|
|
9,849
|
|
|
9,893
|
|
|
0.5
|
%
|
|||
Icynene US Acquisition Corp. (z) (ai)
|
|
Building Products
|
|
L+6.25% (7.25%), 11/4/2020
|
|
52,000
|
|
|
50,987
|
|
|
50,960
|
|
|
3.3
|
%
|
|||
ILC Dover LP (z)
|
|
Aerospace & Defense
|
|
L+5.50% (6.50%), 3/20/2020
|
|
14,719
|
|
|
14,655
|
|
|
14,135
|
|
|
0.9
|
%
|
|||
InMotion Entertainment Group, LLC (z) (ae)
|
|
Retailers (except food & drug)
|
|
L+7.75% (9.00%), 10/1/2018
|
|
11,647
|
|
|
11,473
|
|
|
11,795
|
|
|
0.8
|
%
|
|||
IntegraMed America, Inc. (z)
|
|
Health Care Providers & Services
|
|
L+7.25% (8.50%), 9/20/2017
|
|
3,744
|
|
|
3,699
|
|
|
3,648
|
|
|
0.2
|
%
|
December 31, 2014
|
|||||||||||||||||||
Portfolio Company (q)
|
|
Industry
|
|
Investment Coupon Rate/Maturity
|
|
Principal / Number of Shares
|
|
Amortized Cost
|
|
Fair Value (c)
|
|
% of Net Assets
|
|||||||
Integrity Nutraceuticals, Inc. (z) (ab)
|
|
Food Products
|
|
L+9.50% (10.50%), 4/28/2019
|
|
$
|
35,000
|
|
|
$
|
34,401
|
|
|
$
|
29,150
|
|
|
1.9
|
%
|
Jackson Hewitt, Inc. (aa)
|
|
Diversified Consumer Services
|
|
L+8.50% (10.00%), 10/16/2017
|
|
8,625
|
|
|
8,570
|
|
|
8,582
|
|
|
0.6
|
%
|
|||
Jefferson Gulf Coast Energy Partners LLC
|
|
Transportation Infrastructure
|
|
L+8.00% (9.00%), 2/27/2018
|
|
17,955
|
|
|
17,798
|
|
|
17,057
|
|
|
1.1
|
%
|
|||
K2 Pure Solutions NoCal, L.P. (z)
|
|
Chemicals
|
|
L+6.00% (7.00%), 8/19/2019
|
|
9,875
|
|
|
9,722
|
|
|
9,609
|
|
|
0.6
|
%
|
|||
Kahala Ireland OpCo LLC (a) (ak) (o)
|
|
Aerospace & Defense
|
|
L+8.00% (13.00%), 12/23/2028
|
|
47,843
|
|
|
47,843
|
|
|
47,843
|
|
|
3.1
|
%
|
|||
Kahala US OpCo LLC (ak) (o)
|
|
Aerospace & Defense
|
|
L+8.00% (13.00%), 12/23/2028
|
|
7,131
|
|
|
7,131
|
|
|
7,131
|
|
|
0.5
|
%
|
|||
Land Holdings I, LLC
|
|
Hotels, Restaurants & Leisure
|
|
12.00%, 6/26/2019
|
|
30,000
|
|
|
29,460
|
|
|
30,677
|
|
|
2.0
|
%
|
|||
Liquidnet Holdings, Inc. (a) (z) (aa)
|
|
Capital Markets
|
|
L+6.75% (7.75%), 5/22/2019
|
|
17,063
|
|
|
16,959
|
|
|
16,295
|
|
|
1.1
|
%
|
|||
MCS AMS Sub-Holdings LLC (aa)
|
|
Real Estate Management & Development
|
|
L+6.00% (7.00%), 10/15/2019
|
|
14,156
|
|
|
13,740
|
|
|
12,457
|
|
|
0.8
|
%
|
|||
Miller Heiman, Inc. (z) (aa)
|
|
Media
|
|
L+5.75% (6.75%), 9/30/2019
|
|
18,389
|
|
|
17,886
|
|
|
17,872
|
|
|
1.2
|
%
|
|||
Motorsports Aftermarket Group, Inc. (z) (aa)
|
|
Automotive
|
|
L+4.00% (5.00%), 5/14/2021
|
|
24,875
|
|
|
23,284
|
|
|
20,646
|
|
|
1.3
|
%
|
|||
National Technical Systems, Inc. (v) (z)
|
|
Professional Services
|
|
L+5.50% (6.75%), 11/22/2018
|
|
18,609
|
|
|
18,487
|
|
|
18,467
|
|
|
1.2
|
%
|
|||
New Media Holdings II, LLC (a) (z)
|
|
Publishing
|
|
L+6.25% (7.25%), 6/3/2020
|
|
8,928
|
|
|
8,766
|
|
|
8,794
|
|
|
0.6
|
%
|
|||
NextCare, Inc. (m) (z) (ab)
|
|
Health Care Providers & Services
|
|
L+5.75% (7.00%), 10/10/2017
|
|
19,753
|
|
|
19,581
|
|
|
19,453
|
|
|
1.3
|
%
|
|||
North Atlantic Trading Company, Inc. (z) (aa)
|
|
Food Products
|
|
L+6.50% (7.75%), 1/13/2020
|
|
19,806
|
|
|
19,754
|
|
|
19,410
|
|
|
1.3
|
%
|
|||
OH Acquisition, LLC (a) (z)
|
|
Banking, Finance, Insurance & Real Estate
|
|
L+6.25% (7.25%), 8/29/2019
|
|
7,481
|
|
|
7,446
|
|
|
7,465
|
|
|
0.5
|
%
|
|||
Orchid Underwriters Agency, LLC (af)
|
|
Banking, Finance, Insurance & Real Estate
|
|
L+10.00% (10.00%), 11/6/2019
|
|
14,963
|
|
|
14,745
|
|
|
14,738
|
|
|
1.0
|
%
|
|||
Otter Box Holdings, Inc. (aa)
|
|
Electronic Equipment, Instruments & Components
|
|
L+4.75% (5.75%), 6/3/2020
|
|
8,445
|
|
|
8,390
|
|
|
8,336
|
|
|
0.5
|
%
|
|||
PeopLease Holdings, LLC (d) (z)
|
|
Commercial Services & Supplies
|
|
L+13.00% (14.00%), 12/26/2018
|
|
10,000
|
|
|
9,840
|
|
|
11,634
|
|
|
0.8
|
%
|
|||
PGX Holdings, Inc. (z)
|
|
Transportation Infrastructure
|
|
L+5.25% (6.25%), 9/29/2020
|
|
10,931
|
|
|
10,826
|
|
|
10,918
|
|
|
0.7
|
%
|
|||
Premier Dental Services, Inc. (z) (aa)
|
|
Health Care Providers & Services
|
|
L+5.00% (6.00%), 11/1/2018
|
|
24,740
|
|
|
24,631
|
|
|
23,503
|
|
|
1.5
|
%
|
|||
Pre-Paid Legal Services, Inc. (aa)
|
|
Diversified Consumer Services
|
|
L+5.00% (6.25%), 7/1/2019
|
|
9,212
|
|
|
9,295
|
|
|
9,124
|
|
|
0.6
|
%
|
|||
Pride Plating, Inc. (z)
|
|
Aerospace & Defense
|
|
L+5.50% (6.50%), 6/13/2019
|
|
9,874
|
|
|
9,806
|
|
|
9,811
|
|
|
0.6
|
%
|
|||
RedPrairie Corp. (aa)
|
|
Software
|
|
L+5.00% (6.00%), 12/21/2018
|
|
13,355
|
|
|
13,338
|
|
|
12,379
|
|
|
0.8
|
%
|
|||
Resco Products, Inc. (z)
|
|
Steel
|
|
L+6.00% (6.25%), 9/7/2016
|
|
10,000
|
|
|
9,907
|
|
|
9,771
|
|
|
0.6
|
%
|
|||
Squan Holding Corp. (n) (z)
|
|
Diversified Telecommunication Services
|
|
L+7.25% (8.25%), 10/9/2019
|
|
23,000
|
|
|
22,561
|
|
|
22,540
|
|
|
1.5
|
%
|
|||
STG-Fairway Acquisitions, Inc. (aa)
|
|
Professional Services
|
|
L+5.00% (6.25%), 2/28/2019
|
|
11,815
|
|
|
11,775
|
|
|
11,623
|
|
|
0.8
|
%
|
December 31, 2014
|
|||||||||||||||||||
Portfolio Company (q)
|
|
Industry
|
|
Investment Coupon Rate/Maturity
|
|
Principal / Number of Shares
|
|
Amortized Cost
|
|
Fair Value (c)
|
|
% of Net Assets
|
|||||||
SunGard Availability Services Capital, Inc. (aa)
|
|
Business Equipment & Services
|
|
L+5.00% (6.00%), 3/29/2019
|
|
$
|
9,925
|
|
|
$
|
9,836
|
|
|
$
|
8,794
|
|
|
0.6
|
%
|
Taqua, LLC
|
|
Wireless Telecommunication Services
|
|
L+9.00% (10.00%), 7/31/2019
|
|
14,000
|
|
|
13,743
|
|
|
13,749
|
|
|
0.9
|
%
|
|||
TASC, Inc. (aa)
|
|
Aerospace & Defense
|
|
L+5.50% (6.50%), 5/22/2020
|
|
6,965
|
|
|
6,830
|
|
|
6,780
|
|
|
0.4
|
%
|
|||
Tax Defense Network, LLC (j) (z)
|
|
Diversified Consumer Services
|
|
L+8.50% (9.50%), 8/28/2019
|
|
31,100
|
|
|
30,520
|
|
|
30,725
|
|
|
2.0
|
%
|
|||
The Tennis Channel Holdings, Inc. (aj) (ab)
|
|
Media
|
|
L+8.50% (8.81%), 5/29/2017
|
|
15,781
|
|
|
15,489
|
|
|
15,149
|
|
|
1.0
|
%
|
|||
Total Outdoor Holdings Corp.
|
|
Advertising
|
|
L+10.00% (11.00%), 8/28/2019
|
|
20,000
|
|
|
19,627
|
|
|
19,624
|
|
|
1.3
|
%
|
|||
Transportation Insight, LLC (z)
|
|
Freight & Logistics
|
|
L+5.25% (6.25%), 9/30/2019
|
|
15,800
|
|
|
15,575
|
|
|
15,563
|
|
|
1.0
|
%
|
|||
Trinity Consultants Holdings, Inc. (z)
|
|
Business Equipment & Services
|
|
L+6.75% (7.75%), 2/15/2020
|
|
15,000
|
|
|
14,896
|
|
|
14,980
|
|
|
1.0
|
%
|
|||
Trojan Battery Company, LLC (z) (aa)
|
|
Automotive
|
|
L+4.75% (5.75%), 6/12/2021
|
|
10,195
|
|
|
10,100
|
|
|
9,991
|
|
|
0.7
|
%
|
|||
United Central Industrial Supply Company, LLC (z) (aa)
|
|
Commercial Services & Supplies
|
|
L+6.25% (7.50%), 10/9/2018
|
|
8,798
|
|
|
8,690
|
|
|
7,962
|
|
|
0.5
|
%
|
|||
US Shipping LLC (aa)
|
|
Marine
|
|
L+4.50% (5.50%), 4/30/2018
|
|
10,255
|
|
|
10,399
|
|
|
10,050
|
|
|
0.7
|
%
|
|||
Sub Total Senior Secured First Lien Debt
|
|
|
|
|
|
|
|
$
|
1,011,823
|
|
|
$
|
997,661
|
|
|
65.0
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Second Lien Debt - 17.5% (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Ability Networks Inc. (ab)
|
|
Health Care Providers & Services
|
|
L+8.25% (9.25%), 5/16/2022
|
|
$
|
12,550
|
|
|
$
|
12,434
|
|
|
$
|
12,236
|
|
|
0.8
|
%
|
Acrisure, LLC
|
|
Banking, Finance, Insurance & Real Estate
|
|
L+10.50% (11.50%), 3/31/2020
|
|
9,000
|
|
|
8,823
|
|
|
8,820
|
|
|
0.6
|
%
|
|||
Appriss Holdings, Inc.
|
|
Business Equipment & Services
|
|
L+8.25% (9.25%), 5/21/2021
|
|
15,000
|
|
|
14,779
|
|
|
14,775
|
|
|
1.0
|
%
|
|||
Boston Market Corporation (ab)
|
|
Hotels, Restaurants & Leisure
|
|
L+7.63% (8.63%), 12/16/2018
|
|
14,800
|
|
|
14,624
|
|
|
15,041
|
|
|
1.0
|
%
|
|||
CIG Financial, LLC (a) (ah)
|
|
Consumer Finance
|
|
10.50%, 6/30/2019
|
|
15,000
|
|
|
14,865
|
|
|
15,000
|
|
|
1.0
|
%
|
|||
CPX Interactive Holdings, LP
|
|
Publishing
|
|
L+10.00% (11.00%), 3/26/2018
|
|
20,205
|
|
|
19,076
|
|
|
18,277
|
|
|
1.3
|
%
|
|||
CREDITCORP (ab)
|
|
Consumer Finance
|
|
12.00%, 7/15/2018
|
|
13,250
|
|
|
13,183
|
|
|
12,852
|
|
|
0.8
|
%
|
|||
H.D. Vest, Inc. (ab)
|
|
Diversified Consumer Services
|
|
L+8.00% (9.25%), 6/18/2019
|
|
8,750
|
|
|
8,669
|
|
|
8,791
|
|
|
0.6
|
%
|
|||
High Ridge Brands Co. (ab)
|
|
Retailers (except food & drug)
|
|
L+8.50% (9.50%), 4/11/2020
|
|
22,500
|
|
|
22,203
|
|
|
22,309
|
|
|
1.5
|
%
|
|||
Interblock USA L.C. (ab)
|
|
Electronic Equipment, Instruments & Components
|
|
L+8.75% (9.75%), 3/28/2018
|
|
23,000
|
|
|
22,627
|
|
|
22,732
|
|
|
1.5
|
%
|
|||
J. C. Bromac Corporation (dba EagleRider, Inc.) (ac)
|
|
Hotels, Restaurants & Leisure
|
|
L+9.00% (10.00%), 8/11/2019
|
|
10,000
|
|
|
9,838
|
|
|
9,873
|
|
|
0.6
|
%
|
|||
K&N Engineering, Inc. (l) (ab)
|
|
Automotive
|
|
L+8.63% (9.63%), 7/11/2020
|
|
13,000
|
|
|
12,730
|
|
|
12,764
|
|
|
0.8
|
%
|
|||
Linc Energy Finance USA, Inc. (ab)
|
|
Oil, Gas & Consumable Fuels
|
|
12.50%, 10/31/2017
|
|
9,000
|
|
|
8,895
|
|
|
7,598
|
|
|
0.5
|
%
|
|||
NCP Finance Limited Partnership (aa) (ab)
|
|
Consumer Finance
|
|
L+9.75% (11.00%), 10/1/2018
|
|
17,779
|
|
|
17,621
|
|
|
17,557
|
|
|
1.1
|
%
|
|||
Noosa Acquirer, Inc.
|
|
Food Products
|
|
L+5.25% (6.25%), 11/21/2020
|
|
25,000
|
|
|
24,632
|
|
|
24,625
|
|
|
1.5
|
%
|
|||
Sage Automotive Holdings, Inc.
|
|
Auto Components
|
|
L+8.00% (9.00%), 10/8/2021
|
|
13,000
|
|
|
12,873
|
|
|
12,870
|
|
|
0.8
|
%
|
December 31, 2014
|
|||||||||||||||||||
Portfolio Company (q)
|
|
Industry
|
|
Investment Coupon Rate/Maturity
|
|
Principal / Number of Shares
|
|
Amortized Cost
|
|
Fair Value (c)
|
|
% of Net Assets
|
|||||||
Schulman Associates Institutional Review Board, Inc.
|
|
Health Care
|
|
L+8.00% (9.00%), 6/3/2021
|
|
$
|
17,000
|
|
|
$
|
16,664
|
|
|
$
|
16,660
|
|
|
1.1
|
%
|
Surgery Center Holdings, Inc. (aa)
|
|
Healthcare & Pharmaceuticals
|
|
L+7.50% (8.50%), 11/3/2021
|
|
10,000
|
|
|
9,902
|
|
|
9,625
|
|
|
0.6
|
%
|
|||
Zimbra, Inc. (ab)
|
|
Software
|
|
10.75%, 7/1/2016
|
|
6,000
|
|
|
5,984
|
|
|
5,953
|
|
|
0.4
|
%
|
|||
Sub Total Senior Secured Second Lien Debt
|
|
|
|
|
|
|
|
$
|
270,422
|
|
|
$
|
268,358
|
|
|
17.5
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Debt - 4.0% (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Gold, Inc. (d) (ab)
|
|
Textiles, Apparel & Luxury Goods
|
|
12.00%, 6/30/2019
|
|
$
|
12,163
|
|
|
$
|
11,969
|
|
|
$
|
11,823
|
|
|
0.8
|
%
|
Park Ave RE Holdings, LLC (d) (o)
|
|
Real Estate Management & Development
|
|
L+8.00% (13.00%), 12/29/2017
|
|
6,107
|
|
|
6,107
|
|
|
6,107
|
|
|
0.4
|
%
|
|||
S.B. Restaurant Co., Inc. (e) (t)
|
|
Hotels, Restaurants & Leisure
|
|
1/10/2018
|
|
4,050
|
|
|
3,974
|
|
|
—
|
|
|
—
|
%
|
|||
S.B. Restaurant Co., Inc. - Senior Subordinated Debt (e) (t)
|
|
Hotels, Restaurants & Leisure
|
|
1/10/2018
|
|
134
|
|
|
88
|
|
|
—
|
|
|
—
|
%
|
|||
Steel City Media (aj)
|
|
Media
|
|
12.00%, 3/29/2020
|
|
20,103
|
|
|
19,716
|
|
|
19,752
|
|
|
1.3
|
%
|
|||
Visionary Integration Professionals, LLC (ab) (aj)
|
|
IT Services
|
|
13.00%, 12/3/2018
|
|
11,239
|
|
|
10,296
|
|
|
10,269
|
|
|
0.7
|
%
|
|||
Xplornet Communications, Inc. (a) (ak)
|
|
Diversified Telecommunication Services
|
|
13.00%, 10/25/2020
|
|
11,350
|
|
|
11,350
|
|
|
11,203
|
|
|
0.7
|
%
|
|||
Zimbra, Inc.
|
|
Software
|
|
12.00%, 7/10/2018
|
|
2,000
|
|
|
2,000
|
|
|
1,776
|
|
|
0.1
|
%
|
|||
Sub Total Subordinated Debt
|
|
|
|
|
|
|
|
$
|
65,500
|
|
|
$
|
60,930
|
|
|
4.0
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Collateralized Securities - 23.8% (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
B&M CLO 2014-1, LTD. Subordinated Notes (a) (p)
|
|
Diversified Investment Vehicles
|
|
4/16/2026
|
|
$
|
40,250
|
|
|
$
|
33,734
|
|
|
$
|
31,280
|
|
|
2.0
|
%
|
CVP Cascade CLO, LTD. Subordinated Notes (a) (p)
|
|
Diversified Investment Vehicles
|
|
1/16/2026
|
|
31,000
|
|
|
23,589
|
|
|
22,553
|
|
|
1.5
|
%
|
|||
CVP Cascade CLO-2, LTD. Subordinated Notes (a) (p)
|
|
Diversified Investment Vehicles
|
|
7/18/2026
|
|
35,250
|
|
|
27,940
|
|
|
26,479
|
|
|
1.7
|
%
|
|||
Figueroa CLO 2014-1, LTD. Subordinated Notes (a) (p)
|
|
Diversified Investment Vehicles
|
|
1/15/2027
|
|
35,057
|
|
|
27,864
|
|
|
27,128
|
|
|
1.8
|
%
|
|||
MidOcean Credit CLO II, LLC (a) (p)
|
|
Diversified Investment Vehicles
|
|
1/29/2025
|
|
37,600
|
|
|
33,024
|
|
|
33,712
|
|
|
2.2
|
%
|
|||
MidOcean Credit CLO III, LLC (a) (p)
|
|
Diversified Investment Vehicles
|
|
7/21/2026
|
|
40,250
|
|
|
35,420
|
|
|
36,120
|
|
|
2.4
|
%
|
|||
MidOcean Credit CLO IV, LLC (a) (p)
|
|
Diversified Investment Vehicles
|
|
|
|
18,500
|
|
|
18,500
|
|
|
18,500
|
|
|
1.2
|
%
|
|||
NewStar Arlington Senior Loan Program LLC Subordinated Notes (a) (p)
|
|
Diversified Investment Vehicles
|
|
7/25/2025
|
|
31,603
|
|
|
29,514
|
|
|
30,474
|
|
|
2.0
|
%
|
|||
Ocean Trails CLO V, LTD. (a) (p)
|
|
Diversified Investment Vehicles
|
|
10/13/2026
|
|
40,518
|
|
|
35,840
|
|
|
34,607
|
|
|
2.3
|
%
|
|||
OFSI Fund VI, Ltd. Subordinated Notes (a) (p)
|
|
Diversified Investment Vehicles
|
|
3/20/2025
|
|
38,000
|
|
|
32,895
|
|
|
32,707
|
|
|
2.1
|
%
|
|||
Related Fee Agreements (a) (p) (s)
|
|
Diversified Investment Vehicles
|
|
|
|
—
|
|
|
16,308
|
|
|
16,369
|
|
|
1.0
|
%
|
|||
Silver Spring CLO, Ltd. (a) (p)
|
|
Diversified Investment Vehicles
|
|
10/15/2026
|
|
31,500
|
|
|
29,701
|
|
|
27,398
|
|
|
1.8
|
%
|
|||
WhiteHorse VIII, Ltd. CLO Subordinated Notes (a) (p)
|
|
Diversified Investment Vehicles
|
|
5/1/2026
|
|
36,000
|
|
|
28,604
|
|
|
27,570
|
|
|
1.8
|
%
|
|||
Sub Total Collateralized Securities
|
|
|
|
|
|
|
|
$
|
372,933
|
|
|
$
|
364,897
|
|
|
23.8
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Equity/Other - 14.7% (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2014
|
|||||||||||||||||||
Portfolio Company (q)
|
|
Industry
|
|
Investment Coupon Rate/Maturity
|
|
Principal / Number of Shares
|
|
Amortized Cost
|
|
Fair Value (c)
|
|
% of Net Assets
|
|||||||
Carlyle GMS Finance, Inc. (a) (i)
|
|
Diversified Investment Vehicles
|
|
|
|
$
|
3,123
|
|
|
$
|
3,123
|
|
|
$
|
2,970
|
|
|
0.2
|
%
|
CPX Interactive Holdings, LP - Series A Convertible Preferred Shares (d) (e) (u)
|
|
Publishing
|
|
8.00%
|
|
$
|
6,000
|
|
|
6,000
|
|
|
6,000
|
|
|
0.4
|
%
|
||
CPX Interactive Holdings, LP - Warrants (e) (u)
|
|
Publishing
|
|
|
|
317
|
|
|
1,087
|
|
|
651
|
|
|
—
|
%
|
|||
Crowley Holdings, Inc. - Series A Preferred Stock (aj)
|
|
Marine
|
|
12.00%
|
|
$
|
25,518
|
|
|
25,518
|
|
|
25,444
|
|
|
1.7
|
%
|
||
Danish CRJ LTD. (a) (e) (p) (r)
|
|
Aerospace & Defense
|
|
|
|
$
|
5
|
|
|
1
|
|
|
260
|
|
|
—
|
%
|
||
Evolution Research Group - Preferred Equity (e)
|
|
Health Care Providers & Services
|
|
8.00%
|
|
$
|
500
|
|
|
500
|
|
|
492
|
|
|
—
|
%
|
||
Fifth Street Senior Loan Fund I, LLC (a) (p)
|
|
Diversified Investment Vehicles
|
|
|
|
$
|
35,000
|
|
|
35,000
|
|
|
35,000
|
|
|
2.4
|
%
|
||
HIG Integrity Nutraceuticals (e) (u)
|
|
Food Products
|
|
|
|
1,567
|
|
|
1,630
|
|
|
—
|
|
|
—
|
%
|
|||
Kahala Ireland OpCo LLC - Common Equity (a) (e) (o) (y)
|
|
Aerospace & Defense
|
|
|
|
$
|
—
|
|
|
—
|
|
|
5,275
|
|
|
0.3
|
%
|
||
Kahala Ireland OpCo LLC - Profit Participating Note (a) (e) (o) (y)
|
|
Aerospace & Defense
|
|
|
|
1,625
|
|
|
1,589
|
|
|
1,625
|
|
|
0.1
|
%
|
|||
Kahala US OpCo LLC (o) (x)
|
|
Aerospace & Defense
|
|
13.00%
|
|
6,038
|
|
|
6,279
|
|
|
7,500
|
|
|
0.5
|
%
|
|||
MBLOX Inc. - Warrants (e)
|
|
Internet Software & Services
|
|
|
|
1,531
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||
NMFC Senior Loan Program I, LLC (a) (p)
|
|
Diversified Investment Vehicles
|
|
|
|
$
|
50,000
|
|
|
50,000
|
|
|
49,371
|
|
|
3.2
|
%
|
||
Orchid Underwriters Agency, LLC (e) (u)
|
|
Banking, Finance, Insurance & Real Estate
|
|
|
|
$
|
500
|
|
|
500
|
|
|
500
|
|
|
—
|
%
|
||
Park Ave Holdings, LLC - Common Shares (e) (o) (w)
|
|
Real Estate Management & Development
|
|
8.00%
|
|
7,900
|
|
|
1,229
|
|
|
5,551
|
|
|
0.4
|
%
|
|||
Park Ave Holdings, LLC - Preferred Shares (o) (w)
|
|
Real Estate Management & Development
|
|
8.00%
|
|
16
|
|
|
7,809
|
|
|
7,809
|
|
|
0.5
|
%
|
|||
PennantPark Credit Opportunities Fund II, LP (a) (g) (p)
|
|
Diversified Investment Vehicles
|
|
|
|
$
|
10,000
|
|
|
10,000
|
|
|
10,764
|
|
|
0.7
|
%
|
||
S.B. Restaurant Co., Inc. - Warrants (e)
|
|
Hotels, Restaurants & Leisure
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||
SkyCross Inc. - Warrants (e)
|
|
Electronic Equipment, Instruments & Components
|
|
|
|
2,254
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||
South Grand MM CLO I, LLC (a) (p) (ag)
|
|
Diversified Investment Vehicles
|
|
|
|
$
|
27,744
|
|
|
27,293
|
|
|
27,744
|
|
|
1.8
|
%
|
||
Squan Holdings Corp. - Class A Common Stock (e) (u)
|
|
Diversified Telecommunication Services
|
|
|
|
1,150
|
|
|
12
|
|
|
12
|
|
|
—
|
%
|
|||
Squan Holdings Corp. - Series A Preferred Stock (e) (u)
|
|
Diversified Telecommunication Services
|
|
|
|
1
|
|
|
1,138
|
|
|
1,138
|
|
|
0.1
|
%
|
|||
Tax Defense Network, LLC (e) (u)
|
|
Diversified Consumer Services
|
|
|
|
$
|
500
|
|
|
500
|
|
|
700
|
|
|
—
|
%
|
||
Tennenbaum Waterman Fund, L.P. (a) (f)
|
|
Diversified Investment Vehicles
|
|
|
|
$
|
8,396
|
|
|
8,396
|
|
|
9,062
|
|
|
0.6
|
%
|
||
The SAVO Group, Ltd. - Warrants (e)
|
|
Internet Software & Services
|
|
|
|
138
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||
THL Credit Greenway Fund II LLC (a) (h) (p)
|
|
Diversified Investment Vehicles
|
|
|
|
$
|
19,084
|
|
|
19,084
|
|
|
18,877
|
|
|
1.2
|
%
|
||
Visionary Integration Professionals, LLC - Warrants (e) (u)
|
|
IT Services
|
|
|
|
657
|
|
|
910
|
|
|
658
|
|
|
—
|
%
|
December 31, 2014
|
|||||||||||||||||||
Portfolio Company (q)
|
|
Industry
|
|
Investment Coupon Rate/Maturity
|
|
Principal / Number of Shares
|
|
Amortized Cost
|
|
Fair Value (c)
|
|
% of Net Assets
|
|||||||
World Business Lenders, LLC (e)
|
|
Consumer Finance
|
|
|
|
923
|
|
|
3,750
|
|
|
4,126
|
|
|
0.3
|
%
|
|||
Xplornet Communications Inc. - Warrants (a) (e)
|
|
Diversified Telecommunication Services
|
|
|
|
10
|
|
|
$
|
—
|
|
|
$
|
2,306
|
|
|
0.2
|
%
|
|
Zimbra, Inc. - Warrants (Second Lien Debt) (e)
|
|
Software
|
|
|
|
671
|
|
|
$
|
—
|
|
|
$
|
138
|
|
|
—
|
%
|
|
Zimbra, Inc. - Warrants (Third Lien Bridge Note) (e)
|
|
Software
|
|
|
|
1,000
|
|
|
—
|
|
|
1,172
|
|
|
0.1
|
%
|
|||
Sub Total Equity/Other
|
|
|
|
|
|
|
|
$
|
211,348
|
|
|
$
|
225,145
|
|
|
14.7
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
TOTAL INVESTMENTS - 125.0% (b)
|
|
|
|
|
|
|
|
$
|
1,932,026
|
|
|
$
|
1,916,991
|
|
|
125.0
|
%
|
(a)
|
All of the Company's investments are in eligible portfolio companies, as defined in the Investment Company Act of 1940, as amended (the "1940 Act"), except B&M CLO 2014-1, LTD. Subordinated Notes, Caesar's Growth Properties Holdings, LLC, Carlyle GMS Finance, Inc., CIG Financial, LLC, CVP Cascade CLO, LTD. Subordinated Notes, CVP Cascade CLO-2, LTD. Subordinated Notes, Danish CRJ LTD., Fifth Street Senior Loan Fund I, LLC, Figueroa CLO 2014-1, LTD. Subordinated Notes, Kahala Ireland OpCo LLC, Liquidnet Holdings, Inc., MidOcean Credit CLO II, LLC, MidOcean Credit CLO III, LLC, MidOcean Credit CLO IV, LLC, New Media Holdings II, LLC, NewStar Arlington Senior Loan Program, LLC Subordinated Notes, NMFC Senior Loan Program I, LLC, Ocean Trails CLO V, LTD., OFSI Fund VI, Ltd. Subordinated Notes, OH Acquisition, LLC, PennantPark Credit Opportunities Fund II, LP, Related Fee Agreements, Silver Spring CLO, Ltd., South Grand MM CLO I, LLC, Tennenbaum Waterman Fund, L.P., THL Credit Greenway Fund II LLC, WhiteHorse VIII, Ltd. CLO Subordinated Notes, and Xplornet Communications, Inc.
|
(b)
|
Percentages are based on net assets of $
1,535,423
as of
December 31, 2014
.
|
(c)
|
The fair value of these investments is determined in good faith by the Company's board of directors as required by the 1940 Act. (See Note 3 to the financial statements).
|
(d)
|
As of
December 31, 2014
the company elected to pay cash interest, noting the company has the option to elect a portion of the interest to be PIK.
|
(e)
|
Non-income producing at
December 31, 2014
.
|
(f)
|
The Company has committed to fund $10.0 million in Tennenbaum Waterman Fund, L.P. over a period ending no later than September 2015. The remaining commitment as of
December 31, 2014
was $1.6 million.
|
(g)
|
The investment is subject to a three year lock-up restriction on withdrawals in year 4.
|
(h)
|
The Company has committed to fund $20.0 million in THL Credit Greenway II LLC over a period ending no later than March 2015. The remaining commitment as of
December 31, 2014
was $0.2 million.
|
(i)
|
The Company has committed to fund $10.0 million in Carlyle GMS Finance, Inc. The remaining commitment as of
December 31, 2014
was $6.9 million.
|
(j)
|
The Company has committed to fund a delayed draw term loan of $4.0 million in Tax Defense Network, LLC. The remaining commitment as of
December 31, 2014
was $3.8 million.
|
(k)
|
The Company has committed to fund a delayed draw term loan of $2.6 million in ECI Acquisition Holdings, Inc. The remaining commitment as of
December 31, 2014
was $2.6 million.
|
(l)
|
The Company has committed to fund a delayed draw term loan of $5.0 million in K & N Engineering, Inc. The remaining commitment as of
December 31, 2014
was $5.0 million.
|
(m)
|
The Company has committed to fund an delayed draw term loan of $9.7 million in NextCare, Inc. The remaining commitment as of
December 31, 2014
was $4.4 million.
|
(n)
|
The Company has committed to fund a delayed draw term loan of $10.0 million in Squan Holding Corp. The remaining commitment as of
December 31, 2014
was $10.0 million.
|
(o)
|
The Company's investments are classified in accordance with the requirements of the 1940 Act. Under the 1940 Act, “Control Investments” are defined as investments in companies in which the Company owns more than 25% of the voting securities, maintains greater than 50% of the board representation or has the power to exercise control over the management or policies of such portfolio company.
|
(p)
|
The Company's investments are classified in accordance with the requirements of the 1940 Act. Under the 1940 Act, “Affiliated Investments” are defined as those non-control investments in companies in which the Company owns between 5% and 25% of the voting securities.
|
(q)
|
The Company's investments are classified in accordance with the requirements of the 1940 Act. Under the 1940 Act, "Non-affiliated Investments" are defined as investments that are neither Control Investments nor Affiliated Investments. The Company classifies all investments within the Consolidated Schedule of Investments which are not classified as Control Investments or Affiliated Investments as Non-affiliated Investments.
|
(r)
|
The Company's investment is held through the Consolidated Holding Company, Kahala Aviation Holdings, LLC, which owns 49% of the operating company, Danish CRJ LTD.
|
(s)
|
Related Fee Agreements consists of one investment with a fair value of $1,288 thousand that is classified as a Non-affiliated Investment and six investments with a total fair value of $15,081 thousand that are classified as Affiliated Investments.
|
(t)
|
The investment is on non-accrual status as of
December 31, 2014
.
|
(u)
|
Investments are held in the taxable wholly-owned, consolidated subsidiary, 54
th
Street Equity Holdings, Inc.
|
(v)
|
The Company has committed to fund a delayed draw term loan of $7.5 million in National Technical Systems, Inc. The remaining commitment as of
December 31, 2014
was $7.5 million.
|
(w)
|
The Company's investment is held through the consolidated subsidiary, Park Ave RE, Inc., which owns 100% of the equity of the operating company, Park Ave RE Holdings, LLC.
|
(x)
|
The Company's investment is held through the consolidated subsidiaries, Kahala Aviation Holdings, LLC and Kahala Aviation US, Inc. which own 100% of the equity of the operating company, Kahala US OpCo LLC.
|
(y)
|
The Company's investment is held through the consolidated subsidiaries, Kahala Aviation Holdings, LLC and Kahala LuxCo, which own 100% of the equity of the operating company, Kahala Ireland OpCo LLC.
|
(z)
|
The Company's investment or a portion thereof is pledged as collateral under the Wells Fargo Credit Facility. Individual investments can be divided into parts which are pledged to separate credit facilities.
|
(aa)
|
The Company's investment or a portion thereof is pledged as collateral under the Citi Credit Facility. Individual investments can be divided into parts which are pledged to separate credit facilities.
|
(ab)
|
The Company's investment or a portion thereof is pledged as collateral under the Deutsche Bank Credit Facility. Individual investments can be divided into parts which are pledged to separate credit facilities.
|
(ac)
|
The Company has committed to fund a delayed draw term loan of $5.0 million in J.C. Bromac Corporation (dba EagleRider, Inc.). The remaining commitment as of
December 31, 2014
was $5.0 million.
|
(ad)
|
The Company has committed to fund a delayed draw term loan of $20.2 million in ERG Holding Company. The remaining commitment as of
December 31, 2014
was $20.2 million.
|
(ae)
|
The Company has committed to fund a delayed draw term loan of $2.2 million in InMotion Entertainment Group, LLC. The remaining commitment as of
December 31, 2014
was $0.4 million.
|
(af)
|
The Company has committed to fund a delayed draw term loan of $4.0 million in Orchid Underwriters Agency, LLC. The remaining commitment as of
December 31, 2014
was $4.0 million.
|
(ag)
|
The Company has committed to fund $35.0 million in South Grand MM CLO I, LLC. The remaining commitment as of
December 31, 2014
was $9.0 million.
|
(ah)
|
The Company has committed to fund a delayed draw term loan of $5.0 million in CIG Financial, LLC. The remaining commitment as of
December 31, 2014
was $5.0 million.
|
(ai)
|
The Company has committed to fund a delayed draw term loan of $10.0 million in Icynene US Acquisition Corp. The remaining commitment as of
December 31, 2014
was $10.0 million.
|
(aj)
|
As of
December 31, 2014
the company elected to pay a portion of its interest in cash and PIK, noting the company has the option to elect a portion of the interest to be PIK.
|
(ak)
|
As of
December 31, 2014
the company elected to pay PIK interest, noting the company has the option to elect a portion of the interest to be cash or PIK.
|
|
At December 31, 2014
|
|||||
|
Investments at
Fair Value
|
|
Percentage of
Total Portfolio
|
|||
Diversified Investment Vehicles
|
$
|
518,685
|
|
|
27.0
|
%
|
Health Care Providers & Services
|
113,015
|
|
|
5.8
|
%
|
|
Aerospace & Defense
|
105,770
|
|
|
5.4
|
%
|
|
Food Products
|
73,185
|
|
|
3.8
|
%
|
|
Diversified Consumer Services
|
71,287
|
|
|
3.7
|
%
|
|
Automotive
|
68,280
|
|
|
3.6
|
%
|
|
Hotels, Restaurants & Leisure
|
65,027
|
|
|
3.4
|
%
|
|
Publishing
|
63,770
|
|
|
3.3
|
%
|
|
Software
|
57,248
|
|
|
3.0
|
%
|
|
Media
|
52,773
|
|
|
2.8
|
%
|
|
Building Products
|
50,960
|
|
|
2.7
|
%
|
|
Consumer Finance
|
49,535
|
|
|
2.6
|
%
|
|
Retailers (except food & drug)
|
49,000
|
|
|
2.6
|
%
|
|
Commercial Services & Supplies
|
48,928
|
|
|
2.6
|
%
|
|
Professional Services
|
42,310
|
|
|
2.2
|
%
|
|
Electronic Equipment, Instruments & Components
|
41,075
|
|
|
2.1
|
%
|
|
Business Equipment & Services
|
38,549
|
|
|
2.0
|
%
|
|
Diversified Telecommunication Services
|
37,199
|
|
|
1.9
|
%
|
|
Marine
|
35,494
|
|
|
1.9
|
%
|
|
Internet Software & Services
|
33,162
|
|
|
1.7
|
%
|
|
Real Estate Management & Development
|
31,924
|
|
|
1.7
|
%
|
|
Banking, Finance, Insurance & Real Estate
|
31,523
|
|
|
1.6
|
%
|
|
Transportation Infrastructure
|
27,975
|
|
|
1.5
|
%
|
|
Advertising
|
19,624
|
|
|
1.0
|
%
|
|
Diversified Financial Services
|
18,863
|
|
|
1.0
|
%
|
|
Health Care
|
16,660
|
|
|
0.9
|
%
|
|
Capital Markets
|
16,295
|
|
|
0.9
|
%
|
|
Freight & Logistics
|
15,563
|
|
|
0.8
|
%
|
|
Wireless Telecommunication Services
|
13,749
|
|
|
0.7
|
%
|
|
Auto Components
|
12,870
|
|
|
0.7
|
%
|
|
Communications Equipment
|
12,617
|
|
|
0.7
|
%
|
|
Road & Rail
|
12,499
|
|
|
0.7
|
%
|
|
Technology - Enterprise Solutions
|
12,224
|
|
|
0.6
|
%
|
|
Textiles, Apparel & Luxury Goods
|
11,823
|
|
|
0.6
|
%
|
|
IT Services
|
10,927
|
|
|
0.6
|
%
|
|
Steel
|
9,771
|
|
|
0.5
|
%
|
|
Healthcare & Pharmaceuticals
|
9,625
|
|
|
0.5
|
%
|
|
Chemicals
|
9,609
|
|
|
0.5
|
%
|
|
Oil, Gas & Consumable Fuels
|
7,598
|
|
|
0.4
|
%
|
|
Total
|
$
|
1,916,991
|
|
|
100.0
|
%
|
December 31, 2013
|
|||||||||||||||||||
Portfolio Company (a) (q)
|
|
Industry
|
|
Investment Coupon Rate/Maturity
|
|
Principal / Number of Shares
|
|
Amortized Cost
|
|
Fair Value ( c )
|
|
% of Net Assets
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured First Lien Debt - 53.2% (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Adventure Interactive Corp.
|
|
Media
|
|
L+6.75% (8.00%), 3/22/2018
|
|
$
|
19,873
|
|
|
$
|
19,590
|
|
|
$
|
19,575
|
|
|
3.1
|
%
|
American Dental Partners, Inc.
|
|
Health Care Providers & Services
|
|
L+5.00% (6.00%), 2/9/2018
|
|
3,895
|
|
|
3,836
|
|
|
3,817
|
|
|
0.6
|
%
|
|||
American Importing Company, Inc.
|
|
Food Products
|
|
L+5.75% (7.00%), 5/23/2018
|
|
10,945
|
|
|
10,849
|
|
|
10,933
|
|
|
1.7
|
%
|
|||
Answers.com
|
|
Internet Software & Services
|
|
L+5.50% (6.50%), 12/20/2018
|
|
15,000
|
|
|
14,850
|
|
|
14,850
|
|
|
2.4
|
%
|
|||
AP Gaming I, LLC
|
|
Hotels, Restaurants & Leisure
|
|
L+8.25% (9.25%), 12/18/2020
|
|
10,000
|
|
|
9,700
|
|
|
9,700
|
|
|
1.5
|
%
|
|||
Avaya, Inc.
|
|
Communications Equipment
|
|
L+4.50% (4.79%), 10/26/2017
|
|
3,933
|
|
|
3,616
|
|
|
3,842
|
|
|
0.6
|
%
|
|||
BBTS Borrower LP
|
|
Oil, Gas & Consumable Fuels
|
|
L+6.50% (7.75%), 6/4/2019
|
|
5,955
|
|
|
5,900
|
|
|
5,985
|
|
|
1.0
|
%
|
|||
Creative Circle, LLC
|
|
Professional Services
|
|
L+5.25% (6.50%), 9/28/2017
|
|
7,697
|
|
|
7,573
|
|
|
7,735
|
|
|
1.2
|
%
|
|||
CST Industries, Inc.
|
|
Machinery
|
|
L+6.25% (7.75%), 5/23/2017
|
|
3,700
|
|
|
3,667
|
|
|
3,608
|
|
|
0.6
|
%
|
|||
Epic Health Services
|
|
Health Care Providers & Services
|
|
L+5.25% (6.50%), 10/16/2018
|
|
14,000
|
|
|
13,865
|
|
|
13,899
|
|
|
2.2
|
%
|
|||
Excelitas Technologies Corp.
|
|
Electronic Equipment, Instruments & Components
|
|
L+5.00% (6.00%), 10/25/2020
|
|
7,402
|
|
|
7,329
|
|
|
7,433
|
|
|
1.2
|
%
|
|||
Expera Specialty Solutions, LLC
|
|
Paper & Forest Products
|
|
L+6.25% (7.50%), 7/28/2018
|
|
7,960
|
|
|
7,812
|
|
|
8,040
|
|
|
1.3
|
%
|
|||
EZE Trucking, Inc. (d) (n)
|
|
Road & Rail
|
|
L+11.75% (12.00%), 7/31/2018
|
|
12,411
|
|
|
12,354
|
|
|
12,147
|
|
|
1.9
|
%
|
|||
FairPay Solutions Inc. Term Loan A
|
|
Health Care Providers & Services
|
|
L+5.75% (7.00%), 1/16/2015
|
|
2,350
|
|
|
2,337
|
|
|
2,350
|
|
|
0.4
|
%
|
|||
FairPay Solutions Inc. Term Loan B
|
|
Health Care Providers & Services
|
|
L+6.50% (8.00%), 1/16/2015
|
|
7,500
|
|
|
7,459
|
|
|
7,500
|
|
|
1.2
|
%
|
|||
Global Telecom & Technology, Inc.
|
|
Internet Software & Services
|
|
L+5.50% (6.50%), 3/31/2016
|
|
7,600
|
|
|
7,524
|
|
|
7,559
|
|
|
1.2
|
%
|
|||
HIG Integrity Neutraceuticals
|
|
Food Products
|
|
L+8.75% (9.75%), 12/17/2018
|
|
23,000
|
|
|
22,658
|
|
|
22,655
|
|
|
3.6
|
%
|
|||
Ikaria Acquisitions, Inc.
|
|
Biotechnology
|
|
L+6.00% (7.25%), 7/31/2018
|
|
5,850
|
|
|
5,769
|
|
|
5,876
|
|
|
0.9
|
%
|
|||
Jackson Hewitt, Inc.
|
|
Diversified Consumer Services
|
|
L+8.50% (10.00%), 10/16/2017
|
|
13,328
|
|
|
13,254
|
|
|
13,195
|
|
|
2.1
|
%
|
|||
K2 Pure Solutions NoCal, L.P.
|
|
Chemicals
|
|
L+6.00% (7.00%), 8/19/2019
|
|
10,000
|
|
|
9,812
|
|
|
9,728
|
|
|
1.5
|
%
|
|||
Kahala US OpCo LLC (o)
|
|
Aerospace & Defense
|
|
L+8.00% (13.00%), 12/23/2028
|
|
15,860
|
|
|
15,860
|
|
|
15,860
|
|
|
2.5
|
%
|
|||
Miller Heiman
|
|
Media
|
|
L+5.75% (6.75%), 9/30/2018
|
|
15,250
|
|
|
14,810
|
|
|
15,174
|
|
|
2.4
|
%
|
|||
Mitel Networks Corp.
|
|
Communications Equipment
|
|
L+5.75% (7.00%), 2/27/2019
|
|
3,570
|
|
|
3,538
|
|
|
3,570
|
|
|
0.6
|
%
|
|||
National Technical Systems, Inc. (k)
|
|
Professional Services
|
|
L+5.50% (6.75%), 11/22/2018
|
|
12,500
|
|
|
12,378
|
|
|
12,375
|
|
|
2.0
|
%
|
|||
NextCare, Inc. (m)
|
|
Health Care Providers & Services
|
|
L+5.50% (6.75%), 10/10/2017
|
|
17,492
|
|
|
17,246
|
|
|
17,272
|
|
|
2.8
|
%
|
|||
NXT Capital LLC
|
|
Commercial Banks
|
|
L+5.25% (6.25%), 9/4/2018
|
|
9,975
|
|
|
9,881
|
|
|
9,875
|
|
|
1.6
|
%
|
|||
Park Ave RE Holdings, LLC (o)
|
|
Real Estate Management & Development
|
|
L+8.00% (13.00%), 12/31/2017
|
|
$
|
9,750
|
|
|
$
|
9,750
|
|
|
$
|
9,750
|
|
|
1.6
|
%
|
December 31, 2013
|
|||||||||||||||||||
Portfolio Company (a) (q)
|
|
Industry
|
|
Investment Coupon Rate/Maturity
|
|
Principal / Number of Shares
|
|
Amortized Cost
|
|
Fair Value ( c )
|
|
% of Net Assets
|
|||||||
PeopLease Holdings, LLC
|
|
Commercial Services & Supplies
|
|
L+10.00% (11.00%), 12/26/2018
|
|
10,000
|
|
|
9,801
|
|
|
9,800
|
|
|
1.6
|
%
|
|||
Premier Dental Services Inc.
|
|
Health Care Providers & Services
|
|
L+7.00% (8.25%), 11/1/2018
|
|
3,960
|
|
|
3,861
|
|
|
3,985
|
|
|
0.6
|
%
|
|||
Pre-Paid Legal Services, Inc.
|
|
Diversified Consumer Services
|
|
L+5.00% (6.25%), 7/1/2019
|
|
7,313
|
|
|
7,247
|
|
|
7,354
|
|
|
1.2
|
%
|
|||
Riverboat Corp. of Mississippi
|
|
Hotels, Restaurants & Leisure
|
|
L+8.75% (10.00%), 11/29/2016
|
|
10,000
|
|
|
9,846
|
|
|
10,025
|
|
|
1.6
|
%
|
|||
Source Refrigeration & HVAC, Inc.
|
|
Commercial Services & Supplies
|
|
L+5.25% (6.75%), 4/30/2017
|
|
2,783
|
|
|
2,752
|
|
|
2,735
|
|
|
0.4
|
%
|
|||
The Tennis Channel Holdings, Inc. (d)
|
|
Media
|
|
L+8.50% (8.81%), 5/23/2017
|
|
15,209
|
|
|
14,814
|
|
|
14,787
|
|
|
2.4
|
%
|
|||
Trinity Consultants Holdings, Inc.
|
|
Commercial Services & Supplies
|
|
L+5.00% (6.25%), 4/15/2018
|
|
3,082
|
|
|
3,062
|
|
|
3,079
|
|
|
0.5
|
%
|
|||
United Central Industrial Supply Company, LLC
|
|
Commercial Services & Supplies
|
|
L+6.25% (7.50%), 10/12/2018
|
|
3,960
|
|
|
3,827
|
|
|
3,762
|
|
|
0.6
|
%
|
|||
WBL SPE I., LLC (l)
|
|
Consumer Finance
|
|
15.00%, 9/30/2016
|
|
3,750
|
|
|
3,713
|
|
|
3,750
|
|
|
0.6
|
%
|
|||
Sub Total Senior Secured First Lien Debt
|
|
|
|
|
|
|
|
$
|
332,140
|
|
|
$
|
333,580
|
|
|
53.2
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Second Lien Debt - 14.5% (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Boston Market
|
|
Hotels, Restaurants & Leisure
|
|
L+7.75% (8.75%), 12/13/2018
|
|
$
|
25,000
|
|
|
$
|
24,628
|
|
|
$
|
24,625
|
|
|
3.9
|
%
|
CREDITCORP
|
|
Consumer Finance
|
|
12.00%, 7/15/2018
|
|
13,250
|
|
|
13,168
|
|
|
13,250
|
|
|
2.1
|
%
|
|||
Eureka Hunter Holdings, LLC
|
|
Oil, Gas & Consumable Fuels
|
|
12.50%, 8/16/2018
|
|
5,000
|
|
|
5,000
|
|
|
4,969
|
|
|
0.8
|
%
|
|||
H.D. Vest, Inc.
|
|
Diversified Consumer Services
|
|
L+8.00% (9.25%), 6/18/2019
|
|
8,750
|
|
|
8,650
|
|
|
8,641
|
|
|
1.4
|
%
|
|||
Linc Energy Finance USA, Inc.
|
|
Oil, Gas & Consumable Fuels
|
|
12.50%, 10/31/2017
|
|
9,000
|
|
|
8,866
|
|
|
9,853
|
|
|
1.6
|
%
|
|||
MBLOX Inc.
|
|
Internet Software & Services
|
|
10.75%, 9/28/2016
|
|
7,000
|
|
|
6,970
|
|
|
7,011
|
|
|
1.1
|
%
|
|||
NCP Finance Limited Partnership
|
|
Consumer Finance
|
|
L+9.75% (11.00%), 9/25/2015
|
|
7,980
|
|
|
7,827
|
|
|
7,940
|
|
|
1.3
|
%
|
|||
SkyCross, Inc.
|
|
Electronic Equipment, Instruments & Components
|
|
11.85%, 4/1/2017
|
|
5,000
|
|
|
4,976
|
|
|
4,979
|
|
|
0.8
|
%
|
|||
Teleflex Marine, Inc. (d)
|
|
Marine
|
|
13.50%, 8/24/2017
|
|
3,332
|
|
|
3,272
|
|
|
3,399
|
|
|
0.5
|
%
|
|||
Zimbra, Inc.
|
|
Software
|
|
10.75%, 7/11/2016
|
|
6,000
|
|
|
5,974
|
|
|
6,137
|
|
|
1.0
|
%
|
|||
Sub Total Senior Secured Second Lien Debt
|
|
|
|
|
|
|
|
$
|
89,331
|
|
|
$
|
90,804
|
|
|
14.5
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Debt - 9.5% (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Gold, Inc. (d)
|
|
Textiles, Apparel & Luxury Goods
|
|
15.00%, 12/31/2017
|
|
$
|
12,163
|
|
|
$
|
11,938
|
|
|
$
|
11,977
|
|
|
1.9
|
%
|
S.B. Restaurant Co., Inc. - Senior Subordinated Debt (d) (e)
|
|
Hotels, Restaurants & Leisure
|
|
1/10/2018
|
|
134
|
|
|
88
|
|
|
88
|
|
|
—
|
%
|
|||
S.B. Restaurant Co., Inc. (d) (e) (r)
|
|
Hotels, Restaurants & Leisure
|
|
14.00%, 1/10/2018
|
|
4,050
|
|
|
3,974
|
|
|
2,024
|
|
|
0.3
|
%
|
|||
The SAVO Group, Ltd.
|
|
Internet Software & Services
|
|
10.95%, 3/28/2017
|
|
5,000
|
|
|
4,978
|
|
|
5,005
|
|
|
0.8
|
%
|
|||
Varel International Energy Mezzanine Funding Corp. (d)
|
|
Oil, Gas & Consumable Fuels
|
|
14.00%, 1/15/2018
|
|
$
|
10,395
|
|
|
$
|
10,311
|
|
|
$
|
11,251
|
|
|
1.8
|
%
|
December 31, 2013
|
|||||||||||||||||||
Portfolio Company (a) (q)
|
|
Industry
|
|
Investment Coupon Rate/Maturity
|
|
Principal / Number of Shares
|
|
Amortized Cost
|
|
Fair Value ( c )
|
|
% of Net Assets
|
|||||||
Vestcom Acquisition, Inc.
|
|
Media
|
|
12.00%, 6/26/2019
|
|
7,500
|
|
|
7,434
|
|
|
7,525
|
|
|
1.2
|
%
|
|||
Visionary Integration Professionals, LLC
|
|
IT Services
|
|
13.00%, 12/3/2018
|
|
11,017
|
|
|
9,844
|
|
|
9,831
|
|
|
1.6
|
%
|
|||
Xplornet Communications, Inc.
|
|
Diversified Telecommunication Services
|
|
13.00%, 12/25/2020
|
|
10,000
|
|
|
10,000
|
|
|
10,000
|
|
|
1.6
|
%
|
|||
Zimbra, Inc.
|
|
Software
|
|
12.00%, 7/10/2018
|
|
2,000
|
|
|
2,000
|
|
|
2,000
|
|
|
0.3
|
%
|
|||
Sub Total Subordinated Debt
|
|
|
|
|
|
|
|
$
|
60,567
|
|
|
$
|
59,701
|
|
|
9.5
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Collateralized Securities - 16.9% (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Apidos XVI CLO, LTD. Subordinated Notes (e) (p)
|
|
Diversified Investment Vehicles
|
|
1/19/2025
|
|
$
|
15,000
|
|
|
$
|
13,650
|
|
|
$
|
13,650
|
|
|
2.2
|
%
|
Catamaran CLO 2013-1 Ltd. Subordinated Notes (p)
|
|
Diversified Investment Vehicles
|
|
1/27/2025
|
|
19,500
|
|
|
17,940
|
|
|
20,404
|
|
|
3.2
|
%
|
|||
CVP Cascade CLO-1, LTD. Subordinated Notes (e) (p)
|
|
Diversified Investment Vehicles
|
|
12/20/2020
|
|
31,000
|
|
|
28,086
|
|
|
28,086
|
|
|
4.5
|
%
|
|||
Garrison Funding 2013 - 1 Ltd. Subordinated Notes (e) (p)
|
|
Diversified Investment Vehicles
|
|
9/30/2023
|
|
15,000
|
|
|
15,000
|
|
|
15,000
|
|
|
2.4
|
%
|
|||
JMP Credit Advisors CLO II Ltd. Subordinated Notes (p)
|
|
Diversified Investment Vehicles
|
|
4/30/2023
|
|
6,000
|
|
|
5,700
|
|
|
6,099
|
|
|
1.0
|
%
|
|||
MC Funding Ltd. Preferred Shares
|
|
Diversified Investment Vehicles
|
|
12/20/2020
|
|
4,000
|
|
|
3,366
|
|
|
2,163
|
|
|
0.3
|
%
|
|||
MidOcean Credit CLO II, Ltd. Subordinated Notes (e) (p)
|
|
Diversified Investment Vehicles
|
|
1/15/2024
|
|
20,543
|
|
|
20,543
|
|
|
20,543
|
|
|
3.3
|
%
|
|||
Sub Total Collateralized Securities
|
|
|
|
|
|
|
|
$
|
104,285
|
|
|
$
|
105,945
|
|
|
16.9
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Equity/Other - 16.7% (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Carlyle GMS Finance, Inc. (e) (i)
|
|
Diversified Investment Vehicles
|
|
|
|
$
|
2,221
|
|
|
$
|
2,221
|
|
|
$
|
2,173
|
|
|
0.3
|
%
|
Crowley Holdings Preferred, LLC - Series A Preferred Shares (d)
|
|
Marine
|
|
12.00%
|
|
25
|
|
|
25,000
|
|
|
25,000
|
|
|
4.0
|
%
|
|||
HIG Integrity Neutraceuticals
|
|
Food Products
|
|
|
|
850
|
|
|
850
|
|
|
850
|
|
|
0.1
|
%
|
|||
Kahala Aviation Holdings, LLC (e) (o) (j)
|
|
Aerospace & Defense
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||
Kahala Aviation Holdings, LLC - Preferred Shares (e) (o)
|
|
Aerospace & Defense
|
|
13.00%
|
|
5,271
|
|
|
5,271
|
|
|
5,271
|
|
|
0.8
|
%
|
|||
MBLOX Inc. - Warrants (e)
|
|
Internet Software & Services
|
|
|
|
1,531
|
|
|
—
|
|
|
705
|
|
|
0.1
|
%
|
|||
NewStar Arlington Fund LLC (p)
|
|
Diversified Investment Vehicles
|
|
|
|
30,000
|
|
|
30,000
|
|
|
30,000
|
|
|
4.8
|
%
|
|||
Park Ave RE, Inc. (e) (o)
|
|
Real Estate Management & Development
|
|
|
|
33
|
|
|
33
|
|
|
33
|
|
|
—
|
%
|
|||
Park Ave RE, Inc. - Preferred Shares (e) (o)
|
|
Real Estate Management & Development
|
|
8.00%
|
|
3,218
|
|
|
3,218
|
|
|
3,218
|
|
|
0.5
|
%
|
|||
PennantPark Credit Opportunities Fund, LP (g) (p)
|
|
Diversified Investment Vehicles
|
|
|
|
$
|
10,000
|
|
|
$
|
10,000
|
|
|
$
|
10,550
|
|
|
1.7
|
%
|
December 31, 2013
|
|||||||||||||||||||
Portfolio Company (a) (q)
|
|
Industry
|
|
Investment Coupon Rate/Maturity
|
|
Principal / Number of Shares
|
|
Amortized Cost
|
|
Fair Value ( c )
|
|
% of Net Assets
|
|||||||
Precision Dermatology, Inc. - Warrants (e)
|
|
Pharmaceuticals
|
|
|
|
218
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||
S.B. Restaurant Co., Inc. - Warrants (e)
|
|
Hotels, Restaurants & Leisure
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||
SkyCross, Inc. - Warrants (e)
|
|
Electronic Equipment, Instruments & Components
|
|
|
|
1,127
|
|
|
—
|
|
|
450
|
|
|
0.1
|
%
|
|||
South Grand MM CLO I, LLC (e) (p)
|
|
Diversified Investment Vehicles
|
|
|
|
872
|
|
|
872
|
|
|
872
|
|
|
0.1
|
%
|
|||
Tennenbaum Waterman Fund, L.P. (e) (f)
|
|
Diversified Investment Vehicles
|
|
|
|
8,891
|
|
|
8,891
|
|
|
9,611
|
|
|
1.5
|
%
|
|||
The SAVO Group, Ltd. - Warrants (e)
|
|
Internet Software & Services
|
|
|
|
138
|
|
|
—
|
|
|
1,302
|
|
|
0.2
|
%
|
|||
THL Credit Greenway Fund II LLC (h) (p)
|
|
Diversified Investment Vehicles
|
|
|
|
8,938
|
|
|
8,938
|
|
|
9,005
|
|
|
1.4
|
%
|
|||
Visionary Integration Professionals, LLC - Warrants (e)
|
|
IT Services
|
|
|
|
657
|
|
|
910
|
|
|
910
|
|
|
0.1
|
%
|
|||
World Business Lenders, LLC (e)
|
|
Consumer Finance
|
|
|
|
3,750
|
|
|
3,750
|
|
|
3,751
|
|
|
0.6
|
%
|
|||
Xplornet Communications Inc. - Warrants (e)
|
|
Diversified Telecommunication Services
|
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||
Zimbra, Inc. - Warrants (Second Lien Debt) (e)
|
|
Software
|
|
|
|
535
|
|
|
—
|
|
|
447
|
|
|
0.1
|
%
|
|||
Zimbra, Inc. - Warrants (Third Lien Bridge Note) (e)
|
|
Software
|
|
|
|
1,000
|
|
|
—
|
|
|
1,598
|
|
|
0.3
|
%
|
|||
Sub Total Equity/Other
|
|
|
|
|
|
|
|
$
|
99,954
|
|
|
$
|
105,746
|
|
|
16.7
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
TOTAL INVESTMENTS - 110.8% (b)
|
|
|
|
|
|
|
|
$
|
686,277
|
|
|
$
|
695,776
|
|
|
110.8
|
%
|
(a)
|
All of the Company's investments are issued by eligible portfolio companies, as defined in the Investment Company Act of 1940, except Apidos XVI CLO, LTD. Subordinated Notes, Carlyle GMS Finance, Inc., Catamaran CLO 2013-1 Ltd. Subordinated Notes, CVP Cascade CLO-1, LTD. Subordinated notes, Garrison Funding 2013-1 Ltd. Subordinated Notes, JMP Credit Advisors CLO II Ltd. Subordinated Notes, MC Funding Ltd. Preferred Shares, MidOcean Credit CLO II, Ltd., Mitel Networks Corp., NewStar Arlington Fund, LLC, NXT Capital LLC, PennantPark Credit Opportunities Fund LP, South Grand MM CLO I, LLC, Tennenbaum Waterman Fund, L.P., THL Credit Greenway Fund II LLC, and Xplornet Communications, Inc.
|
(b)
|
Percentages are based on net assets of $
627,903
thousand as of December 31, 2013.
|
(c)
|
The fair value of these investments is determined in good faith by the Company's board of directors as required by the Investment Company Act of 1940. (See Note 3 to the financial statements).
|
(d)
|
As of December 31, 2013 the company elected to pay PIK interest, noting the company has the option to elect a portion of the interest to be cash or PIK.
|
(e)
|
Non-income producing at December 31, 2013.
|
(f)
|
The Company has committed to fund $10.0 million in Tennenbaum Waterman Fund, L.P. over a period ending no later than September 2015. The remaining commitment as of December 31, 2013 was $1.1 million.
|
(g)
|
The investment is subject to a three year lock-up restriction on withdrawals in year 4.
|
(h)
|
The Company has committed to fund $20.0 million in THL Credit Greenway II LLC over a period ending no later than March 2015. The remaining commitment as of December 31, 2013 was $11.1 million.
|
(i)
|
The Company has committed to fund $10.0 million in Carlyle GMS Finance, Inc. The remaining commitment as of December 31, 2013 was $7.8 million.
|
(j)
|
In accordance with subscription agreement executed with Kahala Aviation Holdings, LLC, dated December 23, 2013, the Company owns 84 common units of shares.
|
(k)
|
The Company has committed to fund a delayed draw term loan of $7.5 million in National Technical Systems, Inc. The remaining commitment as of December 31, 2013 was $7.5 million.
|
(l)
|
The Company has committed to fund a delayed draw term loan of $15.0 million in WBL SPE I, LLC. The remaining commitment as of December 31, 2013 was $11.3 million.
|
(m)
|
The Company has committed to fund a delayed draw term loan of $10.9 million in NextCare, Inc. The remaining commitment as of December 31, 2013 was $4.8 million.
|
(n)
|
The Company has committed to fund a delayed draw term loan of $2.0 million in EZE Trucking, Inc. The remaining commitment as of December 31, 2013 was $2.0 million.
|
(o)
|
The Company's investments are classified in accordance with the requirements of the 1940 Act. Under the 1940 Act, “Control Investments” are defined as investments in companies in which the Company owns more than 25% of the voting securities, maintains greater than 50% of the board representation or has the power to exercise control over the management or policies of such portfolio company.
|
(p)
|
The Company's investments are classified in accordance with the requirements of the 1940 Act. Under the 1940 Act, “Affiliated Investments” are defined as those non-control investments in companies in which the Company owns between 5% and 25% of the voting securities.
|
(q)
|
The Company's investments are classified in accordance with the requirements of the 1940 Act. Under the 1940 Act, "Non-affiliated Investments" are defined as investments that are neither Control Investments nor Affiliated Investments. The Company classifies all investments within the Consolidated Schedule of Investments which are not classified as Control Investments or Affiliated Investments as Non-affiliated Investments.
|
(r)
|
The investment is on non-accrual status as of December 31, 2013.
|
|
At December 31, 2013
|
|||||
|
Investments at
Fair Value
|
|
Percentage of
Total Portfolio
|
|||
Diversified Investment Vehicles
|
$
|
168,156
|
|
|
24.2
|
%
|
Media
|
57,061
|
|
|
8.2
|
|
|
Health Care Providers & Services
|
48,823
|
|
|
7.0
|
|
|
Hotels, Restaurants & Leisure
|
46,462
|
|
|
6.7
|
|
|
Internet Software & Services
|
36,432
|
|
|
5.2
|
|
|
Food Products
|
34,438
|
|
|
5.0
|
|
|
Oil, Gas & Consumable Fuels
|
32,058
|
|
|
4.6
|
|
|
Diversified Consumer Services
|
29,190
|
|
|
4.2
|
|
|
Consumer Finance
|
28,691
|
|
|
4.1
|
|
|
Marine
|
28,399
|
|
|
4.1
|
|
|
Aerospace & Defense
|
21,131
|
|
|
3.0
|
|
|
Professional Services
|
20,110
|
|
|
2.9
|
|
|
Commercial Services & Supplies
|
19,376
|
|
|
2.8
|
|
|
Real Estate Management & Development
|
13,001
|
|
|
1.9
|
|
|
Electronic Equipment, Instruments & Components
|
12,862
|
|
|
1.9
|
|
|
Road & Rail
|
12,147
|
|
|
1.7
|
|
|
Textiles, Apparel & Luxury Goods
|
11,977
|
|
|
1.7
|
|
|
IT Services
|
10,741
|
|
|
1.5
|
|
|
Software
|
10,182
|
|
|
1.5
|
|
|
Diversified Telecommunication Services
|
10,000
|
|
|
1.4
|
|
|
Commercial Banks
|
9,875
|
|
|
1.4
|
|
|
Chemicals
|
9,728
|
|
|
1.4
|
|
|
Paper & Forest Products
|
8,040
|
|
|
1.2
|
|
|
Communications Equipment
|
7,412
|
|
|
1.1
|
|
|
Biotechnology
|
5,876
|
|
|
0.8
|
|
|
Machinery
|
3,608
|
|
|
0.5
|
|
|
Total
|
$
|
695,776
|
|
|
100.0
|
%
|
•
|
Level 1—Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date.
|
•
|
Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability.
|
•
|
Level 3—Unobservable inputs that reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.
|
|
Fair Value Measurements
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Senior Secured First Lien Debt
|
$
|
—
|
|
|
$
|
325,417
|
|
|
$
|
672,244
|
|
|
$
|
997,661
|
|
Senior Secured Second Lien Debt
|
—
|
|
|
42,663
|
|
|
225,695
|
|
|
268,358
|
|
||||
Subordinated Debt
|
—
|
|
|
—
|
|
|
60,930
|
|
|
60,930
|
|
||||
Collateralized Securities
|
—
|
|
|
—
|
|
|
364,897
|
|
|
364,897
|
|
||||
Equity/Other
|
—
|
|
|
—
|
|
|
225,145
|
|
|
225,145
|
|
||||
Total
|
$
|
—
|
|
|
$
|
368,080
|
|
|
$
|
1,548,911
|
|
|
$
|
1,916,991
|
|
|
Fair Value Measurements
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Senior Secured First Lien Debt
|
$
|
—
|
|
|
$
|
137,825
|
|
|
$
|
195,755
|
|
|
$
|
333,580
|
|
Senior Secured Second Lien Debt
|
—
|
|
|
39,684
|
|
|
51,120
|
|
|
90,804
|
|
||||
Subordinated Debt
|
—
|
|
|
—
|
|
|
59,701
|
|
|
59,701
|
|
||||
Collateralized Securities
|
—
|
|
|
—
|
|
|
105,945
|
|
|
105,945
|
|
||||
Equity/Other
|
—
|
|
|
—
|
|
|
105,746
|
|
|
105,746
|
|
||||
Total Return Swap
|
—
|
|
|
3,180
|
|
|
—
|
|
|
3,180
|
|
||||
Total
|
$
|
—
|
|
|
$
|
180,689
|
|
|
$
|
518,267
|
|
|
$
|
698,956
|
|
|
Senior Secured First Lien Debt
|
|
Senior Secured Second Lien Debt
|
|
Subordinated Debt
|
|
Collateralized Securities
|
|
Equity/Other
|
|
Total
|
||||||||||||
Balance as of December 31, 2013
|
$
|
195,755
|
|
|
$
|
51,120
|
|
|
$
|
59,701
|
|
|
$
|
105,945
|
|
|
$
|
105,746
|
|
|
$
|
518,267
|
|
Net unrealized gains (losses)
|
(8,140
|
)
|
|
(3,158
|
)
|
|
(3,704
|
)
|
|
(9,697
|
)
|
|
8,004
|
|
|
(16,695
|
)
|
||||||
Purchases and other adjustments to cost
|
697,498
|
|
|
187,429
|
|
|
49,766
|
|
|
554,132
|
|
|
181,259
|
|
|
1,670,084
|
|
||||||
Sales and redemptions
|
(211,883
|
)
|
|
(41,642
|
)
|
|
(54,789
|
)
|
|
(292,065
|
)
|
|
(70,479
|
)
|
|
(670,858
|
)
|
||||||
Net realized gain
|
1,017
|
|
|
202
|
|
|
206
|
|
|
6,582
|
|
|
615
|
|
|
8,622
|
|
||||||
Net transfers in and/or out
|
(2,003
|
)
|
|
31,744
|
|
|
9,750
|
|
|
—
|
|
|
—
|
|
|
39,491
|
|
||||||
Balance as of December 31, 2014
|
$
|
672,244
|
|
|
$
|
225,695
|
|
|
$
|
60,930
|
|
|
$
|
364,897
|
|
|
$
|
225,145
|
|
|
$
|
1,548,911
|
|
Unrealized gains (losses) for the
period relating to those Level 3
assets that were still held by
the Company at the end of the
period:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net change in unrealized
gain (loss):
|
$
|
(7,948
|
)
|
|
$
|
(3,017
|
)
|
|
$
|
(2,646
|
)
|
|
$
|
(8,037
|
)
|
|
$
|
8,633
|
|
|
$
|
(13,015
|
)
|
|
Senior Secured First Lien Debt
|
|
Senior Secured Second Lien Debt
|
|
Subordinated Debt
|
|
Collateralized Securities
|
|
Equity/Other
|
|
Total
|
||||||||||||
Balance as of December 31, 2012
|
$
|
25,190
|
|
|
$
|
8,258
|
|
|
$
|
3,939
|
|
|
$
|
8,533
|
|
|
$
|
6,112
|
|
|
$
|
52,032
|
|
Net unrealized gains
|
(236
|
)
|
|
300
|
|
|
(880
|
)
|
|
1,637
|
|
|
5,434
|
|
|
6,255
|
|
||||||
Purchases and other adjustments to cost
|
215,368
|
|
|
42,562
|
|
|
56,642
|
|
|
135,289
|
|
|
97,293
|
|
|
547,154
|
|
||||||
Sales and redemptions
|
(35,197
|
)
|
|
—
|
|
|
—
|
|
|
(41,066
|
)
|
|
(3,093
|
)
|
|
(79,356
|
)
|
||||||
Net realized gain
|
418
|
|
|
—
|
|
|
—
|
|
|
1,552
|
|
|
—
|
|
|
1,970
|
|
||||||
Net transfers in and/or out
|
(9,788
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,788
|
)
|
||||||
Balance as of December 31, 2013
|
$
|
195,755
|
|
|
$
|
51,120
|
|
|
$
|
59,701
|
|
|
$
|
105,945
|
|
|
$
|
105,746
|
|
|
$
|
518,267
|
|
Unrealized gains (losses) for the
period relating to those Level 3
assets that were still held by
the Company at the end of the
period:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net change in unrealized
gain:
|
$
|
(110
|
)
|
|
$
|
300
|
|
|
$
|
(880
|
)
|
|
$
|
1,899
|
|
|
$
|
5,434
|
|
|
$
|
6,643
|
|
|
Investments at
Amortized Cost
|
|
Investments at
Fair Value
|
|
Fair Value
Percentage of
Total Portfolio
|
|||||
Senior Secured First Lien Debt
|
$
|
1,011,823
|
|
|
$
|
997,661
|
|
|
52.0
|
%
|
Senior Secured Second Lien Debt
|
270,422
|
|
|
268,358
|
|
|
14.0
|
|
||
Subordinated Debt
|
65,500
|
|
|
60,930
|
|
|
3.2
|
|
||
Collateralized Securities
|
372,933
|
|
|
364,897
|
|
|
19.1
|
|
||
Equity/Other
|
211,348
|
|
|
225,145
|
|
|
11.7
|
|
||
Total
|
$
|
1,932,026
|
|
|
$
|
1,916,991
|
|
|
100.0
|
%
|
|
Investments at
Amortized Cost
|
|
Investments at
Fair Value
|
|
Fair Value
Percentage of
Total Portfolio
|
|||||
Senior Secured First Lien Debt
|
$
|
332,140
|
|
|
$
|
333,580
|
|
|
47.9
|
%
|
Senior Secured Second Lien Debt
|
89,331
|
|
|
90,804
|
|
|
13.1
|
|
||
Subordinated Debt
|
60,567
|
|
|
59,701
|
|
|
8.6
|
|
||
Collateralized Securities
|
104,285
|
|
|
105,945
|
|
|
15.2
|
|
||
Equity/Other
|
99,954
|
|
|
105,746
|
|
|
15.2
|
|
||
Total
|
$
|
686,277
|
|
|
$
|
695,776
|
|
|
100.0
|
%
|
|
|
|
|
Range
|
|
|
|||||||||||
Asset Category
|
|
Fair Value
|
|
Primary Valuation Technique
|
|
Unobservable Inputs
|
|
Minimum
|
|
Maximum
|
|
Weighted Average
(a)
|
|||||
Senior Secured First Lien Debt
(b)
|
|
$
|
474,415
|
|
|
Yield Analysis
|
|
Market Yield
|
|
6.25
|
%
|
|
15.00
|
%
|
|
9.69
|
%
|
Senior Secured Second Lien Debt
(c)
|
|
138,337
|
|
|
Yield Analysis
|
|
Market Yield
|
|
8.00
|
%
|
|
23.00
|
%
|
|
11.16
|
%
|
|
Subordinated Debt
|
|
60,930
|
|
|
Yield Analysis
|
|
Market Yield
|
|
13.00
|
%
|
|
16.00
|
%
|
|
13.78
|
%
|
|
Collateralized Securities
(d)
|
|
348,527
|
|
|
Discounted Cash Flow
|
|
Discount Rate
|
|
9.16
|
%
|
|
28.42
|
%
|
|
13.66
|
%
|
|
Equity/Other
(e)
|
|
41,687
|
|
|
Market Multiple Analysis
|
|
EBITDA Multiple
|
|
0.8x
|
|
|
10.2x
|
|
|
5.0x
|
|
|
Equity/Other
(e)
|
|
112,115
|
|
|
Discounted Cash Flow
|
|
Discount Rate
|
|
12.50
|
%
|
|
15.27
|
%
|
|
13.71
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Weighted averages are calculated based on fair value of investments.
|
(b)
|
The remaining $197.8 million of senior secured first lien debt were valued based on broker quotes or at their respective acquisition prices as the investments closed near year end.
|
(c)
|
The remaining $87.4 million of senior secured second lien debt were valued based on broker quotes or at their respective acquisition prices as the investments closed near year end.
|
(d)
|
The remaining $16.4 million of collateralized securities were valued based on recent transactions close to year end.
|
(e)
|
The remaining $71.3 million of equity/other investments consisted of $28.0 million which were valued with consideration of their respective appraisal value and $43.3 million which were valued based on the net asset values published by the respective fund.
|
|
|
|
|
Range
|
|
|
|||||||||||
Asset Category
|
|
Fair Value
|
|
Primary Valuation Technique
|
|
Unobservable Inputs
|
|
Minimum
|
|
Maximum
|
|
Weighted Average
(a)
|
|||||
Senior Secured First Lien Debt
(b)
|
|
$
|
105,740
|
|
|
Yield Analysis
|
|
Market Yield
|
|
6.25
|
%
|
|
15.00
|
%
|
|
8.46
|
%
|
Senior Secured Second Lien Debt
(c)
|
|
26,495
|
|
|
Yield Analysis
|
|
Market Yield
|
|
10.75
|
%
|
|
13.50
|
%
|
|
12.23
|
%
|
|
Subordinated Debt
(d)
|
|
39,870
|
|
|
Yield Analysis
|
|
Market Yield
|
|
11.50
|
%
|
|
14.00
|
%
|
|
12.47
|
%
|
|
Collateralized Securities
(e)
|
|
6,099
|
|
|
Discounted Cash Flow
|
|
Discount Rate
|
|
11.00
|
%
|
|
11.00
|
%
|
|
11.00
|
%
|
|
Equity/Other
(f)
|
|
7,803
|
|
|
Market Multiple Analysis
|
|
EBITDA Multiple
|
|
1.2x
|
|
|
6.9x
|
|
|
1.8x
|
|
|
Equity/Other
(f)
|
|
30,000
|
|
|
Discounted Cash Flow
|
|
Discount Rate
|
|
12.58
|
%
|
|
12.58
|
%
|
|
12.58
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Weighted averages are calculated based on fair value of investments.
|
(b)
|
The remaining $90.0 million of senior secured first lien debt were valued at their respective acquisition prices as the investments closed near year end.
|
(c)
|
The remaining $24.6 million of senior secured second lien debt were valued at their respective acquisition prices as the investments closed near year end.
|
(d)
|
The remaining $19.8 million of subordinated debt were valued at their respective acquisition prices as the investments closed near year end.
|
(e)
|
The remaining $99.8 million of collateralized securities were valued based on recent transactions close to year end.
|
(f)
|
The remaining $68.0 million of equity/other investments consisted of $36.6 million which were valued at their respective acquisition prices as the investments closed near year end and $31.4 million which were valued based on the net asset values published by the respective fund.
|
Quarter Ended
|
|
Amount of Expense Payment Obligation
|
|
Operating Expense Ratio as of the Date Expense Payment Obligation Incurred
(1)
|
|
Annualized Distribution Rate as of the Date Expense Payment Obligation Incurred
(2)
|
|
Eligible for Reimbursement Through
|
||||
March 31, 2011
|
|
$
|
—
|
|
|
—
|
%
|
|
—
|
%
|
|
N/A
(3)
|
June 30, 2011
|
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
(3)
|
|
September 30, 2011
|
|
571
|
|
|
2.88
|
|
|
8.11
|
|
|
September 30, 2014
(4)
|
|
December 31, 2011
|
|
131
|
|
|
1.97
|
|
|
7.90
|
|
|
December 31, 2014
(4)
|
|
March 31, 2012
|
|
78
|
|
|
0.90
|
|
|
7.88
|
|
|
March 31, 2015
|
|
June 30, 2012
|
|
189
|
|
|
0.30
|
|
|
7.75
|
|
|
June 30, 2015
|
(1)
|
"Operating Expense Ratio" is expressed as a percentage of net assets and includes all expenses borne by the Company, except for organizational and offering expenses, base management and incentive fees owed to our Adviser and interest expense.
|
(2)
|
"Annualized Distribution Rate" equals the annualized rate of distributions paid to stockholders based on the amount of the regular cash distribution paid immediately prior to the date the expense support payment obligation was incurred by our Adviser. "Annualized Distribution Rate" does not include special cash or stock distributions paid to stockholders.
|
(3)
|
"N/A"- Not Applicable
|
(4)
|
Expense Support Payment is no longer eligible for reimbursement as of December 31, 2014.
|
|
|
Incurred for the Year Ended
|
|
Payable for the Year Ended
|
||||
|
|
December 31, 2014
|
|
December 31, 2014
|
||||
Selling commissions and dealer manager fees
(1)
|
|
$
|
87,461
|
|
|
$
|
—
|
|
Offering costs
|
|
10,834
|
|
|
995
|
|
||
Management and incentive fees, net
|
|
30,856
|
|
|
10,717
|
|
||
Investment banking advisory fees
(2)
|
|
372
|
|
|
—
|
|
||
Transfer agent fees
|
|
2,150
|
|
|
614
|
|
||
Professional fees
|
|
658
|
|
|
311
|
|
||
Other general and administrative
|
|
66
|
|
|
24
|
|
||
Total related party fees
|
|
$
|
132,397
|
|
|
$
|
12,661
|
|
|
|
Incurred for the Year Ended
|
|
Payable for the Year Ended
|
||||
|
|
December 31, 2013
|
|
December 31, 2013
|
||||
Selling commissions and dealer manager fees
(1)
|
|
$
|
45,000
|
|
|
$
|
—
|
|
Offering costs
|
|
4,198
|
|
|
198
|
|
||
Management and incentive fees, net
|
|
13,549
|
|
|
8,068
|
|
||
Investment banking advisory fees
(2)
|
|
548
|
|
|
—
|
|
||
Total related party fees
|
|
$
|
63,295
|
|
|
$
|
8,266
|
|
|
|
Incurred for the Year Ended
|
|
Payable for the Year Ended
|
||||
|
|
December 31, 2012
|
|
December 31, 2012
|
||||
Selling commissions and dealer manager fees
(1)
|
|
$
|
11,101
|
|
|
$
|
—
|
|
Offering costs
|
|
2,698
|
|
|
1,703
|
|
||
Management and incentive fees, net
|
|
1,079
|
|
|
904
|
|
||
Investment banking advisory fees
(2)
|
|
—
|
|
|
—
|
|
||
Total related party fees
|
|
$
|
14,878
|
|
|
$
|
2,607
|
|
(1)
|
Selling commissions and dealer manager fees are not reflected in the Company's consolidated financial statements
|
(2)
|
Investment banking advisory fees were paid to the Dealer Manager for strategic advisory services provided to the Company
|
|
Level
|
|
Carrying Amount at December 31, 2014
|
|
Fair Value at December 31, 2014
|
||||
Wells Fargo Credit Facility
|
3
|
|
$
|
288,087
|
|
|
$
|
288,087
|
|
Deutsche Bank Credit Facility
|
3
|
|
$
|
60,000
|
|
|
$
|
60,000
|
|
Citi Credit Facility
|
3
|
|
$
|
270,625
|
|
|
$
|
270,625
|
|
|
|
|
$
|
618,712
|
|
|
$
|
618,712
|
|
|
Level
|
|
Carrying Amount at December 31, 2013
|
|
Fair Value at December 31, 2013
|
||||
Wells Fargo Credit Facility
|
3
|
|
$
|
132,687
|
|
|
$
|
132,687
|
|
|
Net Receivable
|
|
Net Realized Gains
|
||||
Interest and other income from TRS portfolio
|
$
|
—
|
|
|
$
|
11,361
|
|
TRS interest expense
|
—
|
|
|
(2,187
|
)
|
||
Gains on TRS asset sales
|
—
|
|
|
5,378
|
|
||
Net realized gain from TRS
|
$
|
—
|
|
|
$
|
14,552
|
|
|
Net Receivable
|
|
Net Realized Gains
|
||||
Interest and other income from TRS portfolio
|
$
|
4,098
|
|
|
$
|
15,403
|
|
TRS interest expense
|
(729
|
)
|
|
(2,637
|
)
|
||
Gains on TRS asset sales
|
684
|
|
|
1,875
|
|
||
Net realized gain from TRS
|
$
|
4,053
|
|
|
$
|
14,641
|
|
Underlying Loan
(a)
|
|
Industry
|
|
Investment Coupon Rate/Maturity Date
|
|
Principal
|
|
Notional Amount
|
|
Market Value
|
|
Unrealized Appreciation (Depreciation)
|
||||||||
Senior Secured First Lien Debt
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
AM General LLC
|
|
Aerospace & Defense
|
|
L+9.00%, 3/22/2018
|
|
$
|
6,650
|
|
|
$
|
6,451
|
|
|
$
|
5,752
|
|
|
$
|
(699
|
)
|
American Dental Partners, Inc.
|
|
Health Care Providers & Services
|
|
L+5.00%, 2/9/2018
|
|
3,388
|
|
|
3,184
|
|
|
3,320
|
|
|
136
|
|
||||
Amneal Pharmaceuticals LLC
|
|
Biotechnology
|
|
L+4.75%, 11/1/2019
|
|
11,970
|
|
|
11,850
|
|
|
12,030
|
|
|
180
|
|
||||
BBTS Borrower LP
|
|
Oil, Gas & Consumable Fuels
|
|
L+6.50%, 6/4/2019
|
|
18,858
|
|
|
18,733
|
|
|
18,952
|
|
|
219
|
|
||||
Caesar's Entertainment Resort Properties, LLC
|
|
Hotels, Restaurants & Leisure
|
|
L+6.00%, 10/11/2020
|
|
12,000
|
|
|
11,760
|
|
|
11,925
|
|
|
165
|
|
||||
Clover Technologies Group, LLC (aka 4L Holdings)
|
|
Commercial Services & Supplies
|
|
L+5.50%, 5/7/2018
|
|
11,330
|
|
|
11,272
|
|
|
11,273
|
|
|
1
|
|
||||
Corner Investment Propco, LLC
|
|
Hotels, Restaurants & Leisure
|
|
L+9.75%, 11/2/2019
|
|
9,000
|
|
|
8,932
|
|
|
9,135
|
|
|
203
|
|
||||
Excelitas Technologies Corp.
|
|
Electronic Equipment, Instruments & Components
|
|
L+5.00%, 11/2/2020
|
|
17,271
|
|
|
17,098
|
|
|
17,343
|
|
|
245
|
|
||||
Expera Specialty Solutions, LLC
|
|
Paper & Forest Products
|
|
L+6.25%, 12/21/2018
|
|
6,965
|
|
|
6,826
|
|
|
7,035
|
|
|
209
|
|
||||
Hearthside Food Solutions, LLC
|
|
Food Products
|
|
L+5.25%, 6/7/2018
|
|
5,444
|
|
|
5,418
|
|
|
5,444
|
|
|
26
|
|
||||
Ikaria Acquisitions, Inc.
|
|
Biotechnology
|
|
L+6.00%, 7/3/2018
|
|
13,650
|
|
|
13,445
|
|
|
13,710
|
|
|
265
|
|
||||
Jackson Hewitt, Inc.
|
|
Diversified Consumer Services
|
|
L+8.50%, 10/16/2017
|
|
9,266
|
|
|
9,008
|
|
|
9,173
|
|
|
165
|
|
||||
Jacobs Entertainment, Inc.
|
|
Hotels, Restaurants & Leisure
|
|
L+5.00%, 10/29/2018
|
|
3,950
|
|
|
3,891
|
|
|
3,930
|
|
|
39
|
|
||||
Keystone Automotive Operations Inc
|
|
Distributors
|
|
L+5.75%, 8/8/2019
|
|
9,975
|
|
|
9,825
|
|
|
10,000
|
|
|
175
|
|
||||
Liquidnet Holdings, Inc.
|
|
Capital Markets
|
|
L+8.00%, 5/8/2017
|
|
8,181
|
|
|
8,100
|
|
|
8,058
|
|
|
(42
|
)
|
||||
MCS AMS Sub-Holdings LLC
|
|
Real Estate Management & Development
|
|
L+6.00%, 10/15/2019
|
|
15,000
|
|
|
14,550
|
|
|
14,475
|
|
|
(75
|
)
|
||||
Miller Heiman
|
|
Media
|
|
L+5.75%, 9/30/2018
|
|
13,750
|
|
|
13,338
|
|
|
13,681
|
|
|
343
|
|
||||
Mitel Networks Corp.
|
|
Communications Equipment
|
|
L+5.75%, 2/27/2019
|
|
5,355
|
|
|
5,301
|
|
|
5,355
|
|
|
54
|
|
Underlying Loan
(a)
|
|
Industry
|
|
Investment Coupon Rate/Maturity Date
|
|
Principal
|
|
Notional Amount
|
|
Market Value
|
|
Unrealized Appreciation (Depreciation)
|
||||||||
NXT Capital LLC
|
|
Commercial Banks
|
|
L+5.25%, 9/4/2018
|
|
10,000
|
|
|
9,900
|
|
|
9,900
|
|
|
—
|
|
||||
Plato Learning, Inc.
|
|
Diversified Consumer Services
|
|
L+4.75%, 5/17/2018
|
|
2,400
|
|
|
2,392
|
|
|
2,392
|
|
|
—
|
|
||||
Premier Dental Services Inc.
|
|
Health Care Providers & Services
|
|
L+7.00%, 11/1/2018
|
|
4,950
|
|
|
4,802
|
|
|
4,981
|
|
|
179
|
|
||||
Pre-Paid Legal Services, Inc.
|
|
Diversified Consumer Services
|
|
L+5.00%, 7/1/2019
|
|
12,690
|
|
|
12,567
|
|
|
12,762
|
|
|
195
|
|
||||
RedPrairie Corp.
|
|
Software
|
|
L+10.00%, 12/21/2018
|
|
17,500
|
|
|
17,500
|
|
|
17,549
|
|
|
49
|
|
||||
St. George's University Scholastic Services LLC
|
|
Diversified Consumer Services
|
|
L+7.00%, 12/20/2017
|
|
6,517
|
|
|
6,387
|
|
|
6,550
|
|
|
163
|
|
||||
STG-Fairway Acquisitions, Inc.
|
|
Professional Services
|
|
L+5.00%, 2/28/2019
|
|
11,965
|
|
|
11,845
|
|
|
11,943
|
|
|
98
|
|
||||
Therakos, Inc.
|
|
Biotechnology
|
|
L+6.25%, 12/27/2017
|
|
7,481
|
|
|
7,444
|
|
|
7,487
|
|
|
43
|
|
||||
United Central Industrial Supply Company, LLC
|
|
Commercial Services & Supplies
|
|
L+6.25%, 10/9/2018
|
|
4,950
|
|
|
4,752
|
|
|
4,702
|
|
|
(50
|
)
|
||||
US Shipping LLC
|
|
Marine
|
|
L+7.75%, 4/30/2018
|
|
11,940
|
|
|
11,858
|
|
|
12,209
|
|
|
351
|
|
||||
Varel International Ind., LP
|
|
Oil, Gas & Consumable Fuels
|
|
L+7.75%, 7/17/2017
|
|
4,850
|
|
|
4,753
|
|
|
4,923
|
|
|
170
|
|
||||
Vestcom International, Inc.
|
|
Media
|
|
L+5.75%, 12/26/2018
|
|
7,444
|
|
|
7,332
|
|
|
7,453
|
|
|
121
|
|
||||
Sub Total Senior Secured First Lien Debt
|
|
|
|
|
|
|
|
$
|
280,514
|
|
|
$
|
283,442
|
|
|
$
|
2,928
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Senior Secured Second Lien Debt
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
NCP Finance Limited Partnership
|
|
Consumer Finance
|
|
L+9.75%, 10/1/2018
|
|
$
|
9,975
|
|
|
$
|
9,776
|
|
|
$
|
9,925
|
|
|
$
|
149
|
|
RedPrairie Corp.
|
|
Software
|
|
L+10.00%, 12/14/2019
|
|
3,000
|
|
|
2,690
|
|
|
2,793
|
|
|
103
|
|
||||
Sub Total Senior Secured Second Lien Debt
|
|
|
|
|
|
|
|
$
|
12,466
|
|
|
$
|
12,718
|
|
|
$
|
252
|
|
||
Total
|
|
|
|
|
|
|
|
$
|
292,980
|
|
|
$
|
296,160
|
|
|
$
|
3,180
|
|
(a)
|
All of the companies that issued the underlying loans that are subject to the TRS are eligible portfolio companies, as defined in the Investment Company Act of 1940, except Caesar's Entertainment Resort Properties, LLC, Mitel Networks Corp., NXT Capital LLC, and St. George's University Scholastic Services LLC.
|
|
|
Shares
|
|
Value
|
|||
Shares Sold
|
|
89,467,014
|
|
|
$
|
989,496
|
|
Shares Issued through DRIP
|
|
4,818,399
|
|
|
48,569
|
|
|
Share Repurchases
|
|
(423,017
|
)
|
|
(4,462
|
)
|
|
|
|
93,862,396
|
|
|
$
|
1,033,603
|
|
|
|
Shares
|
|
Value
|
|||
Shares Sold
|
|
47,740,734
|
|
|
$
|
519,289
|
|
Shares Issued through DRIP
|
|
1,121,591
|
|
|
11,142
|
|
|
Share Repurchases
|
|
(133,897
|
)
|
|
(1,377
|
)
|
|
|
|
48,728,428
|
|
|
$
|
529,054
|
|
|
•
|
the effect of such repurchases on the Company's qualification as a RIC (including the consequences of any necessary asset sales);
|
|
•
|
the liquidity of the Company's assets (including fees and costs associated with disposing of assets);
|
|
•
|
the Company's investment plans and working capital requirements;
|
|
•
|
the relative economies of scale with respect to the Company's size;
|
|
•
|
the Company's history in repurchasing shares or portions thereof; and
|
|
•
|
the condition of the securities markets.
|
Quarterly Offer Date
|
|
Repurchase Date
|
|
Shares Repurchased
|
|
Repurchase Price Per Share
|
|
Aggregate Consideration for Repurchased Shares (in thousands)
|
|||||
September 12, 2012
|
|
October 8, 2012
|
|
—
|
|
|
$
|
9.71
|
|
|
$
|
—
|
|
December 13, 2012
|
|
January 15, 2013
|
|
10,732
|
|
|
$
|
9.90
|
|
|
$
|
106.22
|
|
March 27, 2013
|
|
April 25, 2013
|
|
29,625
|
|
|
$
|
10.18
|
|
|
$
|
301.58
|
|
July 15, 2013
|
|
August 13, 2013
|
|
30,365
|
|
|
$
|
10.18
|
|
|
$
|
308.97
|
|
October 22, 2013
|
|
November 21, 2013
|
|
55,255
|
|
|
$
|
10.36
|
|
|
$
|
572.44
|
|
February 4, 2014
|
|
March 6, 2014
|
|
68,969
|
|
|
$
|
10.36
|
|
|
$
|
714.52
|
|
June 6, 2014
|
|
July 11, 2014
|
|
117,425
|
|
|
$
|
10.36
|
|
|
$
|
1,216.38
|
|
August 7, 2014
|
|
September 10, 2014
|
|
111,854
|
|
|
$
|
10.36
|
|
|
$
|
1,158.80
|
|
December 19, 2014
|
|
January 23, 2015
|
|
313,101
|
|
|
$
|
10.36
|
|
|
$
|
3,243.73
|
|
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
Basic and diluted
|
|
|
|
|
|
|
||||||
Net increase in net assets from operations
|
|
$
|
79,540
|
|
|
$
|
42,744
|
|
|
$
|
9,500
|
|
Weighted average common shares outstanding
|
|
122,154,778
|
|
|
36,390,524
|
|
|
6,987,287
|
|
|||
Net increase in net assets resulting from operations per share - basic and diluted
|
|
$
|
0.65
|
|
|
$
|
1.17
|
|
|
$
|
1.36
|
|
Announcement Date
|
|
New Public Offering Price
|
|
Effective Date
|
|
Daily Distribution Amount per share
|
|
Annualized Distribution Rate
|
|||
November 14, 2011
|
|
$
|
10.26
|
|
|
November 16, 2011
|
|
0.002221920
|
|
7.90
|
%
|
May 1, 2012
|
|
$
|
10.44
|
|
|
June 1, 2012
|
|
0.002215850
|
|
7.75
|
%
|
August 14, 2012
|
|
$
|
10.50
|
|
|
September 4, 2012
|
|
0.002246575
|
|
7.81
|
%
|
September 24, 2012
|
|
$
|
10.60
|
|
|
October 16, 2012
|
|
0.002246575
|
|
7.74
|
%
|
October 15, 2012
|
|
$
|
10.70
|
|
|
November 1, 2012
|
|
0.002273973
|
|
7.76
|
%
|
February 5, 2013
|
|
$
|
10.80
|
|
|
February 18, 2013
|
|
0.002293151
|
|
7.75
|
%
|
February 25, 2013
|
|
$
|
10.90
|
|
|
March 1, 2013
|
|
0.002314384
|
|
7.75
|
%
|
April 3, 2013
|
|
$
|
11.00
|
|
|
April 16, 2013
|
|
0.002335616
|
|
7.75
|
%
|
August 15, 2013
|
|
$
|
11.10
|
|
|
August 16, 2013
|
|
0.002356849
|
|
7.75
|
%
|
October 29, 2013
|
|
$
|
11.20
|
|
|
November 1, 2013
|
|
0.002378082
|
|
7.75
|
%
|
Record Date
|
|
Payment Date
|
|
Per share
|
|
Distributions Paid in Cash
|
|
Distributions Paid Through the DRIP
|
|
Total Distributions Paid
|
||||||||
2011:
|
|
|
|
|
|
|
|
|
|
|
||||||||
September 30, 2011
|
|
October 3, 2011
|
|
$
|
0.07
|
|
|
$
|
13
|
|
|
$
|
13
|
|
|
$
|
26
|
|
October 31, 2011
|
|
November 1, 2011
|
|
0.07
|
|
|
20
|
|
|
14
|
|
|
34
|
|
||||
November 30, 2011
|
|
December 1, 2011
|
|
0.06
|
|
|
25
|
|
|
17
|
|
|
42
|
|
||||
December 31, 2011
|
|
January 3, 2012
|
|
0.06
|
|
|
35
|
|
|
21
|
|
|
56
|
|
||||
|
|
|
|
|
|
$
|
93
|
|
|
$
|
65
|
|
|
$
|
158
|
|
||
2012:
|
|
|
|
|
|
|
|
|
|
|
||||||||
January 31, 2012
|
|
February 1, 2012
|
|
$
|
0.06
|
|
|
$
|
47
|
|
|
$
|
26
|
|
|
$
|
73
|
|
February 29, 2012
|
|
March 1, 2012
|
|
0.06
|
|
|
80
|
|
|
34
|
|
|
114
|
|
||||
March 31, 2012
|
|
April 2, 2012
|
|
0.06
|
|
|
118
|
|
|
48
|
|
|
166
|
|
||||
April 30, 2012
|
|
May 1, 2012
|
|
0.06
|
|
|
157
|
|
|
65
|
|
|
222
|
|
||||
May 31, 2012
|
|
June 1, 2012
|
|
0.07
|
|
|
289
|
|
|
91
|
|
|
380
|
|
||||
June 30, 2012
|
|
July 2, 2012
|
|
0.06
|
|
|
313
|
|
|
113
|
|
|
426
|
|
||||
July 31, 2012
|
|
August 1, 2012
|
|
0.07
|
|
|
361
|
|
|
146
|
|
|
507
|
|
||||
August 31, 2012
|
|
September 4, 2012
|
|
0.07
|
|
|
394
|
|
|
173
|
|
|
567
|
|
||||
September 30, 2012
|
|
October 1, 2012
|
|
0.06
|
|
|
429
|
|
|
203
|
|
|
632
|
|
||||
October 31, 2012
|
|
November 1, 2012
|
|
0.07
|
|
|
505
|
|
|
247
|
|
|
752
|
|
||||
November 30, 2012
|
|
December 3, 2012
|
|
0.07
|
|
|
612
|
|
|
287
|
|
|
899
|
|
||||
December 17, 2012
|
|
December 27, 2012
|
|
0.09
|
|
|
917
|
|
|
462
|
|
|
1,379
|
|
||||
December 31, 2012
|
|
January 2, 2013
|
|
0.07
|
|
|
682
|
|
|
341
|
|
|
1,023
|
|
||||
|
|
|
|
|
|
$
|
4,904
|
|
|
$
|
2,236
|
|
|
$
|
7,140
|
|
||
2013:
|
|
|
|
|
|
|
|
|
|
|
||||||||
January 31, 2013
|
|
February 1, 2013
|
|
$
|
0.07
|
|
|
$
|
787
|
|
|
$
|
395
|
|
|
$
|
1,182
|
|
February 28, 2013
|
|
March 1, 2013
|
|
0.06
|
|
|
797
|
|
|
408
|
|
|
1,205
|
|
||||
March 31, 2013
|
|
April 1, 2013
|
|
0.07
|
|
|
1,008
|
|
|
525
|
|
|
1,533
|
|
||||
April 30, 2013
|
|
May 1, 2013
|
|
0.07
|
|
|
1,098
|
|
|
590
|
|
|
1,688
|
|
||||
May 31, 2013
|
|
June 1, 2013
|
|
0.07
|
|
|
1,276
|
|
|
755
|
|
|
2,031
|
|
||||
June 30, 2013
|
|
July 1, 2013
|
|
0.07
|
|
|
1,396
|
|
|
893
|
|
|
2,289
|
|
||||
July 31, 2013
|
|
August 1, 2013
|
|
0.07
|
|
|
1,608
|
|
|
1,071
|
|
|
2,679
|
|
||||
August 31, 2013
|
|
September 1, 2013
|
|
0.07
|
|
|
1,764
|
|
|
1,285
|
|
|
3,049
|
|
||||
September 30, 2013
|
|
October 1, 2013
|
|
0.07
|
|
|
1,868
|
|
|
1,408
|
|
|
3,276
|
|
||||
October 31, 2013
|
|
November 1, 2013
|
|
0.07
|
|
|
2,092
|
|
|
1,673
|
|
|
3,765
|
|
||||
November 30, 2013
|
|
December 2, 2013
|
|
0.07
|
|
|
2,225
|
|
|
1,799
|
|
|
4,024
|
|
||||
December 31, 2013
|
|
January 2, 2014
|
|
0.07
|
|
|
2,504
|
|
|
2,074
|
|
|
4,578
|
|
||||
|
|
|
|
|
|
$
|
18,423
|
|
|
$
|
12,876
|
|
|
$
|
31,299
|
|
||
2014:
|
|
|
|
|
|
|
|
|
|
|
||||||||
January 31, 2014
|
|
February 4, 2014
|
|
$
|
0.07
|
|
|
$
|
2,717
|
|
|
$
|
2,317
|
|
|
$
|
5,034
|
|
February 28, 2014
|
|
March 3, 2014
|
|
0.06
|
|
|
2,751
|
|
|
2,399
|
|
|
5,150
|
|
||||
March 31, 2014
|
|
April 1, 2014
|
|
0.07
|
|
|
3,499
|
|
|
3,197
|
|
|
6,696
|
|
||||
April 30, 2014
|
|
May 1, 2014
|
|
0.07
|
|
|
3,816
|
|
|
3,610
|
|
|
7,426
|
|
||||
May 30, 2014
|
|
June 2, 2014
|
|
0.07
|
|
|
4,383
|
|
|
4,244
|
|
|
8,627
|
|
||||
June 30, 2014
|
|
July 1, 2014
|
|
0.07
|
|
|
4,584
|
|
|
4,533
|
|
|
9,117
|
|
Record Date
|
|
Payment Date
|
|
Per share
|
|
Distributions Paid in Cash
|
|
Distributions Paid Through the DRIP
|
|
Total Distributions Paid
|
||||||||
July 31, 2014
|
|
August 1, 2014
|
|
0.07
|
|
|
5,029
|
|
|
4,986
|
|
|
10,015
|
|
||||
August 29, 2014
|
|
September 1, 2014
|
|
0.07
|
|
|
5,160
|
|
|
5,097
|
|
|
10,257
|
|
||||
September 30, 2014
|
|
October 2, 2014
|
|
0.07
|
|
|
5,198
|
|
|
5,120
|
|
|
10,318
|
|
||||
October 31, 2014
|
|
November 3, 2014
|
|
0.07
|
|
|
5,550
|
|
|
5,510
|
|
|
11,060
|
|
||||
November 30, 2014
|
|
December 2, 2014
|
|
0.07
|
|
|
5,529
|
|
|
5,483
|
|
|
11,012
|
|
||||
December 31, 2014
|
|
January 2, 2015
|
|
0.07
|
|
|
5,852
|
|
|
5,735
|
|
|
11,587
|
|
||||
|
|
|
|
|
|
$
|
54,068
|
|
|
$
|
52,231
|
|
|
$
|
106,299
|
|
||
2015:
|
|
|
|
|
|
|
|
|
|
|
||||||||
January 31, 2015
|
|
February 4, 2015
|
|
$
|
0.07
|
|
|
$
|
5,943
|
|
|
$
|
5,797
|
|
|
$
|
11,740
|
|
February 28, 2015
|
|
March 2, 2015
|
|
0.07
|
|
|
5,521
|
|
|
5,235
|
|
|
10,756
|
|
||||
March 31, 2015
|
|
April 1, 2015
|
|
0.07
|
|
|
6,265
|
|
|
5,898
|
|
|
12,163
|
|
||||
|
|
|
|
|
|
$
|
17,729
|
|
|
$
|
16,930
|
|
|
$
|
34,659
|
|
||
|
|
|
|
|
|
$
|
95,217
|
|
|
$
|
84,338
|
|
|
$
|
179,555
|
|
Date Declared
|
|
Record Date
|
|
Payment Date
|
|
Per Share
|
|
Distribution Percentage
|
|
Shares Issued
|
||||
March 29, 2012
|
|
May 1, 2012
|
|
May 2, 2012
|
|
$
|
0.05
|
|
|
0.49
|
%
|
|
25,709
|
|
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
Ordinary income distributions
|
|
$
|
99,603
|
|
94
|
%
|
|
$
|
31,299
|
|
100
|
%
|
|
$
|
7,141
|
|
100
|
%
|
Capital gains distributions
|
|
6,696
|
|
6
|
%
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|||
Total distributions
|
|
$
|
106,299
|
|
100
|
%
|
|
$
|
31,299
|
|
100
|
%
|
|
$
|
7,141
|
|
100
|
%
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Book income from operating activities
|
|
$
|
79,540
|
|
|
$
|
42,744
|
|
|
$
|
9,500
|
|
Net unrealized (gain) / loss on investments
|
|
30,762
|
|
|
(10,204
|
)
|
|
(1,657
|
)
|
|||
Other nondeductible expenses
|
|
5
|
|
|
2,360
|
|
|
—
|
|
|||
Other temporary differences
|
|
(972
|
)
|
|
(393
|
)
|
|
(30
|
)
|
|||
Taxable income before deductions for distributions paid
|
|
$
|
109,335
|
|
|
$
|
34,507
|
|
|
$
|
7,813
|
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Undistributed ordinary income / (loss)
|
|
$
|
9,187
|
|
|
$
|
2,806
|
|
|
$
|
696
|
|
Undistributed long-term net capital gains
|
|
—
|
|
|
1,398
|
|
|
—
|
|
|||
Total undistributed net earnings
|
|
9,187
|
|
|
4,204
|
|
|
696
|
|
|||
Net unrealized gain / (loss) on investments
|
|
(16,658
|
)
|
|
8,591
|
|
|
1,634
|
|
|||
Total distributed (undistributable) taxable income
|
|
$
|
(7,471
|
)
|
|
$
|
12,795
|
|
|
$
|
2,330
|
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
|
For the Year Ended December 31,
|
|
For the Period from May 5, 2010 (Inception) to December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
Per share data*:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net asset value, beginning of period
|
$
|
9.86
|
|
|
$
|
9.41
|
|
|
$
|
9.00
|
|
|
$
|
8.60
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Results of operations
(1)
Net investment income (loss)
|
0.71
|
|
|
0.36
|
|
|
0.63
|
|
|
0.74
|
|
|
(0.35
|
)
|
|||||
Net realized and unrealized appreciation (depreciation) on investments
|
(0.12
|
)
|
|
0.33
|
|
|
0.39
|
|
|
(0.10
|
)
|
|
—
|
|
|||||
Net realized and unrealized appreciation on total return swap
|
0.09
|
|
|
0.48
|
|
|
0.34
|
|
|
—
|
|
|
—
|
|
|||||
Net unrealized appreciation on minority interests
|
(0.01
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net unrealized deferred tax
|
(0.02
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net increase (decrease) in net assets resulting from operations
|
0.65
|
|
|
1.17
|
|
|
1.36
|
|
|
0.64
|
|
|
(0.35
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Stockholder distributions
(2)
Distributions from net investment income
|
(0.71
|
)
|
|
(0.36
|
)
|
|
(0.63
|
)
|
|
(0.73
|
)
|
|
—
|
|
|||||
Distributions from net realized gain on investments and total return swap
|
(0.16
|
)
|
|
(0.49
|
)
|
|
(0.43
|
)
|
|
—
|
|
|
—
|
|
|||||
Net decrease in net assets resulting from stockholder distributions
|
(0.87
|
)
|
|
(0.85
|
)
|
|
(1.06
|
)
|
|
(0.73
|
)
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital share transactions
Issuance of common stock
(3)
|
0.25
|
|
|
0.31
|
|
|
0.39
|
|
|
0.54
|
|
|
8.95
|
|
|||||
Repurchases of common stock
(4)
|
(0.04
|
)
|
|
0.04
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Offering costs
|
(0.11
|
)
|
|
(0.22
|
)
|
|
(0.28
|
)
|
|
(0.05
|
)
|
|
—
|
|
|||||
Net increase in net assets resulting from capital share transactions
|
0.10
|
|
|
0.13
|
|
|
0.11
|
|
|
0.49
|
|
|
8.95
|
|
|||||
Net asset value, end of period
|
$
|
9.74
|
|
|
$
|
9.86
|
|
|
$
|
9.41
|
|
|
$
|
9.00
|
|
|
$
|
8.60
|
|
Shares outstanding at end of period
|
157,534,040
|
|
|
63,671,644
|
|
|
14,943,215
|
|
|
912,297
|
|
|
22,331
|
|
|||||
Total return
(6)
|
7.63
|
%
|
|
14.12
|
%
|
|
15.19
|
%
|
|
7.66
|
%
|
|
(3.89
|
)%
|
|||||
Ratio/Supplemental data:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net assets, end of period (in thousands)
|
$
|
1,535,423
|
|
|
$
|
627,903
|
|
|
$
|
140,685
|
|
|
$
|
8,207
|
|
|
$
|
192
|
|
Ratio of net investment income to average net assets
(5)(8)(9)
|
7.41
|
%
|
|
3.68
|
%
|
|
5.51
|
%
|
|
5.38
|
%
|
|
(8.20
|
)%
|
|||||
Ratio of operating expenses to average net assets
(5)(8)(9)
|
4.46
|
%
|
|
5.14
|
%
|
|
3.12
|
%
|
|
5.05
|
%
|
|
8.20
|
%
|
|||||
Ratio of incentive fees to average net assets
(8)
|
0.51
|
%
|
|
1.98
|
%
|
|
0.50
|
%
|
|
2.26
|
%
|
|
—
|
%
|
|||||
Ratio of credit facility related expenses to average net assets
(8)
|
0.95
|
%
|
|
0.63
|
%
|
|
0.85
|
%
|
|
4.03
|
%
|
|
—
|
%
|
|||||
Portfolio turnover rate
(7)
|
89.03
|
%
|
|
76.79
|
%
|
|
158.35
|
%
|
|
1.49
|
%
|
|
—
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
(1)
|
The per share data was derived by using the weighted average shares outstanding during the period. Net investment income per share excluding the expense waiver and reimbursement equals $
0.72
for the year ended
December 31, 2014
. Net investment income per share excluding the expense waiver and reimbursement equals $0.31 for the year ended December 31, 2013. Net investment income per share excluding the expense waiver and reimbursements equals $1.09 for the year ended December 31, 2012. Net investment income per share excluding the expense waiver and reimbursement equals $(3.17) for the year ended December 31, 2011. There was no expense waiver or reimbursement for the period from May 5, 2010 (Inception) to December 31, 2010.
|
(2)
|
The per share data for distributions reflects the actual amount of distributions declared per share during the period.
|
(3)
|
The issuance of common stock on a per share basis reflects the incremental net asset value changes as a result of the issuance of shares of common stock in the Company’s continuous offering.
|
(4)
|
The per share impact of the Company's repurchases of common stock is a reduction to net asset value of less than$0.01 per share during the twelve months ended December 31, 2012. The Company had no repurchases in 2011 and 2010.
|
(5)
|
For the year ended
December 31, 2014
, excluding the expense waiver and reimbursement, the ratio of net investment income, operating expenses, and incentive fees to average net assets is
7.53%
,
4.58%
, and
0.62%
, respectively. For the year ended December 31, 2013, excluding the expense waiver and reimbursement, the ratio of net investment income, operating expenses, and incentive fees to average net assets is
3.17%
,
5.66%
, and
2.48%
, respectively. For the year ended December 31, 2012, excluding the expense waiver and reimbursement, the ratio of net investment income, operating expenses and incentive fees to average net assets was
3.17%
,
5.47%
, and
1.71%
, respectively. For the year ended December 31, 2011, excluding the expense waiver and reimbursement, the ratio of net investment income, operating expenses and incentive fees to average net assets was (22.26)%, 32.69%, and 2.26%, respectively. For the period from May 5, 2010 (Inception) to December 31, 2010, there was no expense waiver and reimbursement.
|
(6)
|
Total return is calculated assuming a purchase of shares of common stock at the current net asset value on the first day and a sale at the current net asset value on the last day of the periods reported. Distributions, if any, are assumed for purposes of this calculation to be reinvested at prices obtained under the DRIP. The total return based on net asset value for the year ended
December 31, 2014
, includes the effect of the expense waiver and reimbursement which equaled
0.11%
. The total return based on net asset value for the year ended December 31, 2013, includes the effect of the expense waiver and reimbursement which equaled
0.51%
. The total return based on net asset value for the year ended December 31, 2012, includes the effect of the expense waiver and reimbursement which equaled
2.35%
. The total return based on net asset value for the year ended December 31, 2011, includes the effect of the expense waiver and reimbursement which equaled 27.64%. For the period from May 5, 2010 (Inception) to December 31, 2010, there was no expense waiver and reimbursement.
|
(7)
|
Portfolio turnover rate is calculated using the lesser of year-to-date purchases or sales over the average of the invested assets at fair value. Not annualized.
|
(8)
|
Ratios are annualized, except for incentive fees.
|
(9)
|
Offering cost are not included as an expense in the calculation of this ratio.
|
|
|
Quarter Ended
|
||||||||||||||
|
|
December 31, 2014
|
|
September 30, 2014
|
|
June 30, 2014
|
|
March 31, 2014
|
||||||||
Investment income
|
|
$
|
47,661
|
|
|
$
|
42,387
|
|
|
$
|
29,743
|
|
|
$
|
18,490
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
||||||||
Total expenses before expense waivers and reimbursements from Adviser
|
|
17,020
|
|
|
17,571
|
|
|
12,194
|
|
|
6,544
|
|
||||
Less: Waiver of management and incentive fees
|
|
(52
|
)
|
|
(1,283
|
)
|
|
—
|
|
|
—
|
|
||||
Total expenses net of expense waivers and reimbursements from Adviser
|
|
16,968
|
|
|
16,288
|
|
|
12,194
|
|
|
6,544
|
|
||||
Net investment income before noncontrolling interests
|
|
30,693
|
|
|
26,099
|
|
|
17,549
|
|
|
11,946
|
|
||||
Net investment income attributable to noncontrolling interests
|
|
35
|
|
|
33
|
|
|
—
|
|
|
—
|
|
||||
Net investment income
|
|
30,728
|
|
|
26,132
|
|
|
17,549
|
|
|
11,946
|
|
||||
Net realized and unrealized gain (loss) on investments and total return swap
|
|
(16,367
|
)
|
|
90
|
|
|
7,056
|
|
|
5,454
|
|
||||
Net unrealized appreciation on minority interest
|
|
(654
|
)
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
||||
Net unrealized deferred tax
|
|
(2,388
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net increase in net assets resulting from operations
|
|
$
|
11,319
|
|
|
$
|
26,216
|
|
|
$
|
24,605
|
|
|
$
|
17,400
|
|
Per share information - basic and diluted*
|
|
|
|
|
|
|
|
|
||||||||
Net investment income
|
|
$
|
0.20
|
|
|
$
|
0.19
|
|
|
$
|
0.15
|
|
|
$
|
0.15
|
|
Net increase in net assets resulting from operations
|
|
$
|
0.07
|
|
|
$
|
0.19
|
|
|
$
|
0.21
|
|
|
$
|
0.22
|
|
Weighted average common shares outstanding
|
|
153,667,706
|
|
|
139,622,913
|
|
|
115,859,732
|
|
|
78,450,124
|
|
|
|
Quarter Ended
|
||||||||||||||
|
|
December 31, 2013
|
|
September 30, 2013
|
|
June 30, 2013
|
|
March 31, 2013
|
||||||||
Investment income
|
|
$
|
13,467
|
|
|
$
|
8,395
|
|
|
$
|
5,176
|
|
|
$
|
4,355
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
||||||||
Total expenses before expense waivers and reimbursements from Adviser
|
|
7,436
|
|
|
6,131
|
|
|
4,007
|
|
|
2,554
|
|
||||
Less: Waiver of management and incentive fees
|
|
—
|
|
|
(1,420
|
)
|
|
—
|
|
|
(406
|
)
|
||||
Total expenses net of expense waivers and reimbursements from Adviser
|
|
7,436
|
|
|
4,711
|
|
|
4,007
|
|
|
2,148
|
|
||||
Net investment income
|
|
6,031
|
|
|
3,684
|
|
|
1,169
|
|
|
2,207
|
|
||||
Net realized and unrealized gain on investments and total return swap
|
|
8,145
|
|
|
10,031
|
|
|
5,743
|
|
|
5,733
|
|
||||
Net increase in net assets resulting from operations
|
|
$
|
14,176
|
|
|
$
|
13,715
|
|
|
$
|
6,912
|
|
|
$
|
7,940
|
|
Per share information - basic and diluted*
|
|
|
|
|
|
|
|
|
||||||||
Net investment income
|
|
$
|
0.11
|
|
|
$
|
0.09
|
|
|
$
|
0.04
|
|
|
$
|
0.12
|
|
Net increase in net assets resulting from operations
|
|
$
|
0.25
|
|
|
$
|
0.33
|
|
|
$
|
0.25
|
|
|
$
|
0.42
|
|
Weighted average common shares outstanding
|
|
56,495,770
|
|
|
41,498,369
|
|
|
28,159,751
|
|
|
18,939,009
|
|
|
|
Quarter Ended
|
||||||||||||||
|
|
December 31, 2012
|
|
September 30, 2012
|
|
June 30, 2012
|
|
March 31, 2012
|
||||||||
Investment income
|
|
$
|
3,174
|
|
|
$
|
1,974
|
|
|
$
|
1,156
|
|
|
$
|
610
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
||||||||
Total expenses before expense waivers and reimbursements from Adviser
|
|
1,608
|
|
|
1,409
|
|
|
782
|
|
|
578
|
|
||||
Less: Waiver of management and incentive fees
|
|
(88
|
)
|
|
(798
|
)
|
|
(477
|
)
|
|
(248
|
)
|
||||
Less: Expense support reimbursements from Adviser
|
|
—
|
|
|
—
|
|
|
(189
|
)
|
|
(77
|
)
|
||||
Total expenses net of expense waivers and reimbursements from Adviser
|
|
1,520
|
|
|
611
|
|
|
116
|
|
|
253
|
|
||||
Net investment income
|
|
1,654
|
|
|
1,363
|
|
|
1,040
|
|
|
357
|
|
||||
Net realized and unrealized gain (loss) on investments and total return swap
|
|
2,036
|
|
|
2,498
|
|
|
139
|
|
|
413
|
|
||||
Net increase (decrease) in net assets resulting from operations
|
|
$
|
3,690
|
|
|
$
|
3,861
|
|
|
$
|
1,179
|
|
|
$
|
770
|
|
Per share information - basic and diluted*
|
|
|
|
|
|
|
|
|
||||||||
Net investment income (loss)
|
|
$
|
0.13
|
|
|
$
|
0.16
|
|
|
$
|
0.21
|
|
|
$
|
0.21
|
|
Net increase (decrease) in net assets resulting from operations
|
|
$
|
0.29
|
|
|
$
|
0.47
|
|
|
$
|
0.23
|
|
|
$
|
0.44
|
|
Weighted average common shares outstanding
|
|
12,779,778
|
|
|
8,297,178
|
|
|
5,055,135
|
|
|
1,739,161
|
|
|
|
|
||||||||||||
|
|
Total Amount Outstanding Exclusive of Treasury Securities
|
|
Asset Coverage Ratio Per Unit
(1)
|
|
Involuntary Liquidation Preference Per Unit
(2)
|
|
Asset Market Value Per Unit
(3)
|
||||||
Total Return Swap
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
N/A
|
Wells Fargo Credit Facility
|
|
288,087
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|||
Deutsche Bank Credit Facility
|
|
60,000
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|||
Citi Credit Facility
|
|
270,625
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|||
|
|
$
|
618,712
|
|
|
$
|
3,482
|
|
|
$
|
—
|
|
|
N/A
|
|
|
|
||||||||||||
|
|
Total Amount Outstanding Exclusive of Treasury Securities
|
|
Asset Coverage Ratio Per Unit
(1)
|
|
Involuntary Liquidation Preference Per Unit
(2)
|
|
Asset Market Value Per Unit
(3)
|
||||||
Total Return Swap
|
|
$
|
216,106
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
N/A
|
Revolving Credit Facility
|
|
132,687
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|||
|
|
$
|
348,793
|
|
|
$
|
2,800
|
|
|
$
|
—
|
|
|
N/A
|
|
|
|
||||||||||||
|
|
Total Amount Outstanding Exclusive of Treasury Securities
|
|
Asset Coverage Ratio Per Unit
(1)
|
|
Involuntary Liquidation Preference Per Unit
(2)
|
|
Asset Market Value Per Unit
(3)
|
||||||
Total Return Swap
|
|
$
|
52,577
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
N/A
|
Revolving Credit Facility
|
|
33,907
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|||
|
|
$
|
86,484
|
|
|
$
|
2,627
|
|
|
$
|
—
|
|
|
N/A
|
|
|
|
|||||||||||
|
|
Total Amount Outstanding Exclusive of Treasury Securities
|
|
Asset Coverage Ratio Per Unit
(1)
|
|
Involuntary Liquidation Preference Per Unit
(2)
|
|
Asset Market Value Per Unit
(3)
|
|||||
Revolving Credit Facility
|
|
$
|
5,900
|
|
|
$
|
2,391
|
|
|
—
|
|
|
N/A
|
(1)
|
Asset coverage per unit is the ratio of the carrying value of the Company's total consolidated assets, less all liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing indebtedness. Asset coverage per unit is expressed in terms of dollar amounts per $1,000 of indebtedness.
|
(2)
|
The amount to which such class of senior security would be entitled upon the voluntary liquidation of the issuer in preference to any security junior to it. The “—” in this column indicates that the Securities and Exchange Commission expressly does not require this information to be disclosed for certain types of senior securities.
|
(3)
|
Not applicable because senior securities are not registered for public trading.
|
Portfolio Company
(1)
|
|
Type of Asset
|
|
Amount of dividends and interest included in income
|
|
Beginning Fair Value December 31, 2013
|
|
Gross additions
|
|
Gross reductions
|
|
Realized Gain/(Loss)
|
|
Change in Unrealized Gain (Loss)
|
|
Fair Value at December 31, 2014
|
||||||||||||||
Control Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Kahala US OpCo LLC
|
|
Senior Secured First Lien Debt
|
|
$
|
2,273
|
|
|
$
|
15,860
|
|
|
$
|
11,696
|
|
|
$
|
(20,425
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,131
|
|
Kahala Ireland OpCo LLC
|
|
Senior Secured First Lien Debt
|
|
1,500
|
|
|
—
|
|
|
47,843
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47,843
|
|
|||||||
Kahala Ireland OpCo LLC - Common Equity
|
|
Equity/Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,275
|
|
|
5,275
|
|
|||||||
Kahala Ireland OpCo LLC - Profit Participating Note
|
|
Equity/Other
|
|
—
|
|
|
—
|
|
|
3,216
|
|
|
(1,627
|
)
|
|
—
|
|
|
36
|
|
|
1,625
|
|
|||||||
Kahala US OpCo LLC
|
|
Equity/Other
|
|
10
|
|
|
—
|
|
|
13,919
|
|
|
(7,640
|
)
|
|
—
|
|
|
1,221
|
|
|
7,500
|
|
|||||||
Kahala Aviation Holdings, LLC
(2) (3)
|
|
Equity/Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Kahala Aviation Holdings, LLC - Preferred Shares
(3)
|
|
Equity/Other
|
|
—
|
|
|
5,271
|
|
|
2,525
|
|
|
(7,796
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Park Ave RE Holdings, LLC
|
|
Subordinated Debt
|
|
1,293
|
|
|
9,750
|
|
|
18,058
|
|
|
(21,701
|
)
|
|
—
|
|
|
—
|
|
|
6,107
|
|
|||||||
Park Ave Holdings, LLC
|
|
Equity/Other
|
|
—
|
|
|
—
|
|
|
9,049
|
|
|
(9,049
|
)
|
|
|
|
—
|
|
|
—
|
|
||||||||
Park Ave Holdings, LLC - Common Shares
|
|
Equity/Other
|
|
—
|
|
|
—
|
|
|
1,229
|
|
|
—
|
|
|
—
|
|
|
4,322
|
|
|
5,551
|
|
|||||||
Park Ave Holdings, LLC - Preferred Shares
|
|
Equity/Other
|
|
587
|
|
|
—
|
|
|
7,809
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,809
|
|
|||||||
Park Ave RE, Inc.
(3)
|
|
Equity/Other
|
|
—
|
|
|
33
|
|
|
46
|
|
|
—
|
|
|
(79
|
)
|
|
—
|
|
|
—
|
|
|||||||
Park Ave RE, Inc. - Preferred Shares
(3)
|
|
Equity/Other
|
|
—
|
|
|
3,218
|
|
|
4,591
|
|
|
(7,809
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total Control Investments
|
|
|
|
$
|
5,663
|
|
|
$
|
34,132
|
|
|
$
|
119,981
|
|
|
$
|
(76,047
|
)
|
|
$
|
(79
|
)
|
|
$
|
10,854
|
|
|
$
|
88,841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Apidos XVI CLO, LTD. Subordinated Notes
|
|
Collateralized Securities
|
|
$
|
1,487
|
|
|
$
|
13,650
|
|
|
$
|
—
|
|
|
$
|
(12,762
|
)
|
|
$
|
(888
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
B&M CLO 2014-1, LTD. Subordinated Notes
|
|
Collateralized Securities
|
|
2,904
|
|
|
—
|
|
|
35,420
|
|
|
(1,686
|
)
|
|
—
|
|
|
(2,454
|
)
|
|
31,280
|
|
|||||||
Catamaran CLO 2013-1 Ltd. Subordinated Notes
|
|
Collateralized Securities
|
|
247
|
|
|
20,404
|
|
|
—
|
|
|
(21,176
|
)
|
|
3,236
|
|
|
(2,464
|
)
|
|
—
|
|
|||||||
CVP Cascade CLO, LTD. Subordinated Notes
|
|
Collateralized Securities
|
|
3,584
|
|
|
28,086
|
|
|
—
|
|
|
(4,497
|
)
|
|
—
|
|
|
(1,036
|
)
|
|
22,553
|
|
|||||||
CVP Cascade CLO-2, LTD. Subordinated Notes
|
|
Collateralized Securities
|
|
2,558
|
|
|
—
|
|
|
51,487
|
|
|
(23,705
|
)
|
|
157
|
|
|
(1,460
|
)
|
|
26,479
|
|
|||||||
Danish CRJ LTD.
|
|
Senior Secured First Lien Debt
|
|
20
|
|
|
—
|
|
|
181
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
181
|
|
|||||||
Danish CRJ LTD.
|
|
Equity/Other
|
|
—
|
|
|
—
|
|
|
501
|
|
|
(500
|
)
|
|
|
|
259
|
|
|
260
|
|
||||||||
Fifth Street Senior Loan Fund I, LLC
|
|
Equity/Other
|
|
777
|
|
|
—
|
|
|
35,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35,000
|
|
|||||||
Figueroa CLO 2014-1, LTD. Subordinated Notes
|
|
Collateralized Securities
|
|
2,001
|
|
|
—
|
|
|
63,400
|
|
|
(35,536
|
)
|
|
—
|
|
|
(736
|
)
|
|
27,128
|
|
|||||||
Garrison Funding 2013-1 Ltd. Subordinated Notes
|
|
Collateralized Securities
|
|
42
|
|
|
15,000
|
|
|
—
|
|
|
(18,297
|
)
|
|
3,297
|
|
|
—
|
|
|
—
|
|
|||||||
JMP Credit Advisors CLO II Ltd. Subordinated Notes
|
|
Collateralized Securities
|
|
28
|
|
|
6,099
|
|
|
—
|
|
|
(6,303
|
)
|
|
603
|
|
|
(399
|
)
|
|
—
|
|
|||||||
MidOcean Credit CLO II, LLC
|
|
Collateralized Securities
|
|
4,614
|
|
|
—
|
|
|
34,058
|
|
|
(1,034
|
)
|
|
—
|
|
|
688
|
|
|
33,712
|
|
|||||||
MidOcean Credit CLO II, Ltd. Subordinated Notes
|
|
Collateralized Securities
|
|
184
|
|
|
20,543
|
|
|
—
|
|
|
(20,543
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
MidOcean Credit CLO III, LLC
|
|
Collateralized Securities
|
|
2,753
|
|
|
—
|
|
|
37,180
|
|
|
(1,820
|
)
|
|
60
|
|
|
700
|
|
|
36,120
|
|
|||||||
MidOcean Credit CLO IV, LLC
|
|
Collateralized Securities
|
|
627
|
|
|
—
|
|
|
18,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,500
|
|
|||||||
NMFC Senior Loan Program I, LLC
|
|
Equity/Other
|
|
1,984
|
|
|
—
|
|
|
50,000
|
|
|
—
|
|
|
—
|
|
|
(629
|
)
|
|
49,371
|
|
Portfolio Company
(1)
|
|
Type of Asset
|
|
Amount of dividends and interest included in income
|
|
Beginning Fair Value December 31, 2013
|
|
Gross additions
|
|
Gross reductions
|
|
Realized Gain/(Loss)
|
|
Change in Unrealized Gain (Loss)
|
|
Fair Value at December 31, 2014
|
||||||||||||||
NewStar Arlington Fund, LLC
|
|
Equity/Other
|
|
$
|
1,806
|
|
|
$
|
30,000
|
|
|
$
|
214
|
|
|
$
|
(30,214
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
NewStar Arlington Senior Loan Program LLC Subordinated Notes
|
|
Collateralized Securities
|
|
74
|
|
|
—
|
|
|
29,514
|
|
|
—
|
|
|
—
|
|
|
960
|
|
|
30,474
|
|
|||||||
Ocean Trails CLO V, LTD.
|
|
Collateralized Securities
|
|
2,508
|
|
|
—
|
|
|
77,722
|
|
|
(41,882
|
)
|
|
—
|
|
|
(1,233
|
)
|
|
34,607
|
|
|||||||
OFSI Fund VI, Ltd. Subordinated Notes
|
|
Collateralized Securities
|
|
2,896
|
|
|
—
|
|
|
32,895
|
|
|
—
|
|
|
—
|
|
|
(188
|
)
|
|
32,707
|
|
|||||||
OFSI Fund VI, Ltd. Warehouse
|
|
Collateralized Securities
|
|
—
|
|
|
—
|
|
|
17,000
|
|
|
(17,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
PennantPark Credit Opportunities Fund II, LP
|
|
Equity/Other
|
|
724
|
|
|
10,550
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
214
|
|
|
10,764
|
|
|||||||
Related Fee Agreements
|
|
Collateralized Securities
|
|
—
|
|
|
—
|
|
|
15,440
|
|
|
(439
|
)
|
|
—
|
|
|
80
|
|
|
15,081
|
|
|||||||
Shackleton 2014-V CLO, LTD. Subordinated Notes
|
|
Collateralized Securities
|
|
994
|
|
|
—
|
|
|
35,000
|
|
|
(35,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Shackleton 2014-5A CLO, LTD. Subordinated Notes
|
|
Collateralized Securities
|
|
—
|
|
|
—
|
|
|
35,800
|
|
|
(37,120
|
)
|
|
1,320
|
|
|
—
|
|
|
—
|
|
|||||||
Silver Spring CLO, Ltd.
|
|
Collateralized Securities
|
|
1,894
|
|
|
—
|
|
|
59,701
|
|
|
(30,000
|
)
|
|
—
|
|
|
(2,303
|
)
|
|
27,398
|
|
|||||||
South Grand MM CLO I, LLC
|
|
Equity/Other
|
|
1,385
|
|
|
872
|
|
|
26,872
|
|
|
(451
|
)
|
|
—
|
|
|
451
|
|
|
27,744
|
|
|||||||
THL Credit Greenway Fund II LLC
|
|
Equity/Other
|
|
1,325
|
|
|
9,005
|
|
|
10,844
|
|
|
(698
|
)
|
|
—
|
|
|
(274
|
)
|
|
18,877
|
|
|||||||
WhiteHorse VIII, Ltd. CLO Subordinated Notes
|
|
Collateralized Securities
|
|
2,841
|
|
|
—
|
|
|
30,690
|
|
|
(2,086
|
)
|
|
—
|
|
|
(1,034
|
)
|
|
27,570
|
|
|||||||
Total Affiliate Investments
|
|
|
|
$
|
40,257
|
|
|
$
|
154,209
|
|
|
$
|
697,419
|
|
|
$
|
(342,749
|
)
|
|
$
|
7,785
|
|
|
$
|
(10,858
|
)
|
|
$
|
505,806
|
|
Total Control & Affiliate Investments
|
|
|
|
$
|
45,920
|
|
|
$
|
188,341
|
|
|
$
|
817,400
|
|
|
$
|
(418,796
|
)
|
|
$
|
7,706
|
|
|
$
|
(4
|
)
|
|
$
|
594,647
|
|
(1)
|
The principal amount and ownership detail are shown in the Consolidated Schedules of Investments.
|
(2)
|
In accordance with the subscription agreement executed with Kahala Aviation Holdings, LLC dated December 23, 2013, the Company owns 84 common units of shares.
|
(3)
|
The Company consolidated Kahala Aviation Holdings, LLC and Park Ave RE, Inc. within its Consolidated Financial Statements beginning in the period ended June 30, 2014.
|
Portfolio Company
(1)
|
|
Type of Asset
|
|
Amount of dividends and interest included in income
|
|
Beginning Fair Value December 31, 2012
|
|
Gross additions
|
|
Gross reductions
|
|
Realized Gain/(Loss)
|
|
Change in Unrealized Gain (Loss)
|
|
Fair Value at December 31, 2013
|
||||||||||||||
Control Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Kahala US OpCo LLC
|
|
Senior Secured First Lien Debt
|
|
$
|
51
|
|
|
$
|
—
|
|
|
$
|
15,860
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,860
|
|
Kahala Aviation Holdings, LLC
(2)
|
|
Equity/Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Kahala Aviation Holdings, LLC - Preferred Shares
|
|
Equity/Other
|
|
—
|
|
|
—
|
|
|
5,271
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,271
|
|
|||||||
Park Ave RE Holdings, LLC
|
|
Senior Secured First Lien Debt
|
|
4
|
|
|
—
|
|
|
9,750
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,750
|
|
|||||||
Park Ave RE, Inc.
|
|
Equity/Other
|
|
—
|
|
|
—
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33
|
|
|||||||
Park Ave RE, Inc. - Preferred Shares
|
|
Equity/Other
|
|
—
|
|
|
—
|
|
|
3,218
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,218
|
|
|||||||
Total Control Investments
|
|
|
|
$
|
55
|
|
|
$
|
—
|
|
|
$
|
34,132
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
34,132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Apidos XVI CLO, LTD. Subordinated Notes
|
|
Collateralized Securities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,200
|
|
|
$
|
(4,675
|
)
|
|
$
|
125
|
|
|
$
|
—
|
|
|
$
|
13,650
|
|
Catamaran CLO 2013-1 Ltd. Subordinated Notes
|
|
Collateralized Securities
|
|
1,780
|
|
|
—
|
|
|
23,000
|
|
|
(5,790
|
)
|
|
730
|
|
|
2,464
|
|
|
20,404
|
|
|||||||
CVP Cascade CLO, LTD. Subordinated Notes
|
|
Collateralized Securities
|
|
—
|
|
|
—
|
|
|
28,086
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,086
|
|
|||||||
Garrison Funding 2013-1 Ltd. Subordinated Notes
|
|
Collateralized Securities
|
|
385
|
|
|
—
|
|
|
15,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,000
|
|
|||||||
JMP Credit Advisors CLO II Ltd. Subordinated Notes
|
|
Collateralized Securities
|
|
513
|
|
|
—
|
|
|
5,700
|
|
|
—
|
|
|
—
|
|
|
399
|
|
|
6,099
|
|
|||||||
MidOcean Credit CLO II, Ltd. Subordinated Notes
|
|
Collateralized Securities
|
|
—
|
|
|
—
|
|
|
20,543
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,543
|
|
|||||||
NewStar Arlington Fund, LLC
|
|
Equity/Other
|
|
1,093
|
|
|
—
|
|
|
30,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,000
|
|
|||||||
PennantPark Credit Opportunities Fund, LP
|
|
Equity/Other
|
|
438
|
|
|
5,137
|
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|
413
|
|
|
10,550
|
|
|||||||
Shackleton 2013-IV CLO, LTD. Subordinated Notes
|
|
Collateralized Securities
|
|
1,765
|
|
|
—
|
|
|
24,760
|
|
|
(24,760
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
South Grand MM CLO I, LLC
|
|
Equity/Other
|
|
—
|
|
|
—
|
|
|
872
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
872
|
|
|||||||
THL Credit Greenway Fund II LLC
|
|
Equity/Other
|
|
606
|
|
|
—
|
|
|
11,630
|
|
|
(2,693
|
)
|
|
—
|
|
|
68
|
|
|
9,005
|
|
|||||||
Total Affiliate Investments
|
|
|
|
$
|
6,580
|
|
|
$
|
5,137
|
|
|
$
|
182,791
|
|
|
$
|
(37,918
|
)
|
|
$
|
855
|
|
|
$
|
3,344
|
|
|
$
|
154,209
|
|
Total Control & Affiliate Investments
|
|
|
|
$
|
6,635
|
|
|
$
|
5,137
|
|
|
$
|
216,923
|
|
|
$
|
(37,918
|
)
|
|
$
|
855
|
|
|
$
|
3,344
|
|
|
$
|
188,341
|
|
(1)
|
The principal amount and ownership detail are shown in the Consolidated Schedules of Investments.
|
(2)
|
In accordance with the subscription agreement executed with Kahala Aviation Holdings, LLC dated December 23, 2013, the Company owns 84 common units of shares.
|
FORM OF INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (“Agreement”) is made and entered into as of the _____ day of _______________, 2014, by and between Business Development Corporation of America, a Maryland corporation (the “Company”), and _________________________ (“Indemnitee”). 1
WHEREAS, at the request of the Company, Indemnitee currently serves as an Independent Director or officer of the Company and may, therefore, be subjected to claims, suits or proceedings arising as a result of his or her service; and
WHEREAS, as an inducement to Indemnitee to continue to serve as such Independent Director or officer, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings; and
WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses;
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Definitions . For purposes of this Agreement:
(a) “1940 Act” means the Investment Company Act of 1940, as amended, and rules thereunder.
(b) “Applicable Legal Rate” means a fixed rate of interest equal to the applicable federal rate for mid-term debt instruments as of the day that it is determined that Indemnitee must repay any advanced expenses.
(c) “Change in Control” means a change in control of the Company occurring after the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if, after the Effective Date (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of all of the Company’s then-outstanding securities entitled to vote generally in the election of directors without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person’s attaining such percentage interest; (ii) the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) at any time, a majority of the members of the Board of Directors are not individuals (A) who were directors as of the Effective Date or (B) whose election by the Board of Directors or nomination for election by the Company’s stockholders was approved by the affirmative vote of at least two-thirds of the directors then in office who were directors as of the Effective Date or whose election for nomination for election was previously so approved.
1 Insert names of directors or officers.
(d) “Corporate Status” means the status of a person as a present or former director, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company. As a clarification and without limiting the circumstances in which Indemnitee may be serving at the request of the Company, service by Indemnitee shall be deemed to be at the request of the Company if Indemnitee serves or served as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise (i) of which a majority of the voting power or equity interest is owned directly or indirectly by the Company or (ii) the management of which is controlled directly or indirectly by the Company.
(e) “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification and/or advance of Expenses is sought by Indemnitee.
(f) “Effective Date” means the date set forth in the first paragraph of this Agreement.
(g) “Expenses” means any and all reasonable and out-of-pocket attorneys’ fees and costs, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties and any other disbursements or expenses incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in or otherwise participating in a Proceeding. Expenses shall also include Expenses incurred in connection with any appeal resulting from any Proceeding including, without limitation, the premium for, security for and other costs relating to any cost bond supersedeas bond or other appeal bond or its equivalent.
(h) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement or of other indemnitees under similar indemnification agreements), or (ii) any other party to or participant or witness in the Proceeding giving rise to a claim for indemnification or advance of Expenses hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.
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(i) “Independent Director” means a director that is not an “interested person,” as such term is defined in the 1940 Act, of the Company.
(j) “Proceeding” means any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other proceeding, whether brought by or in the right of the Company or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal, administrative or investigative (formal or informal) nature, including any appeal therefrom, except one pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee. If Indemnitee reasonably believes that a given situation may lead to or culminate in the institution of a Proceeding, such situation shall also be considered a Proceeding.
Section 2. Services by Indemnitee . Indemnitee will serve as an Independent Director or officer of the Company. However, this Agreement shall not impose any independent obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company. This Agreement shall not be deemed an employment contract between the Company (or any other entity) and Indemnitee.
Section 3. General . Subject to the limitations in Section 5, the Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) as otherwise permitted by the 1940 Act, including Section 17 (h) therein, Maryland law in effect on the Effective Date and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the Effective Date. Subject to the limitations in Section 5, the rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law (the “MGCL”).
Section 4. Standard for Indemnification . Subject to the limitations in Section 5, if, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be, made a party to any Proceeding, the Company shall indemnify Indemnitee against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with any such Proceeding unless it is established by clear and convincing evidence that (a) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty, (b) Indemnitee actually received an improper personal benefit in money, property or services or (c) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his or her conduct was unlawful.
Section 5. Certain Limits on Indemnification . Notwithstanding any other provision of this Agreement (other than Section 6), Indemnitee shall not be entitled to:
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(a) indemnification for any loss or liability unless all of the following conditions are met: (i) Indemnitee has determined, in good faith, that the course of conduct that caused the loss or liability was in the best interests of the Company; (ii) Indemnitee was acting on behalf of or performing services for the Company; (iii) such loss or liability was not the result of negligence or misconduct; and (iv) such indemnification is recoverable only out of the Company’s net assets and not from the Company’s stockholders;
(b) indemnification for any loss or liability arising from an alleged violation of federal or state securities laws unless one or more of the following conditions are met: (i) there has been a successful adjudication on the merits of each count involving alleged material securities law violations as to Indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to Indemnitee; or (iii) a court of competent jurisdiction approves a settlement of the claims against Indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the Securities and Exchange Commission and of the published position of any state securities regulatory authority in which securities of the Company were offered or sold as to indemnification for violations of securities laws;
(c) indemnification hereunder if the Proceeding was one by or in the right of the Company and Indemnitee is adjudged to be liable to the Company;
(d) indemnification hereunder if Indemnitee is adjudged to be liable on the basis that personal benefit was improperly received in any Proceeding charging improper personal benefit to Indemnitee, whether or not involving action in the Indemnitee’s Corporate Status; or
(e) indemnification or advance of Expenses hereunder if the Proceeding was brought by Indemnitee, unless: (i) the Proceeding was brought to enforce indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Section 12 of this Agreement, or (ii) the Company’s charter or Bylaws, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise.
Section 6. Court-Ordered Indemnification . Subject to the limitations in Sections 3, 5(a) and (b), a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification of Indemnitee by the Company in the following circumstances:
(a) if such determines that Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the Expenses of securing such reimbursement; or
(b) if such court determines that Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses.
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Section 7. Indemnification for Expenses of an Indemnitee Who is Wholly or Partly Successful . Subject to the limitations in Section 5, to the extent that Indemnitee was or is, by reason of his or her Corporate Status, made a party to (or otherwise becomes a participant in) any Proceeding and is successful, on the merits or otherwise, in the defense of such Proceeding, Indemnitee shall be indemnified for all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with each such claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section 7, and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 8. Advance of Expenses for an Indemnitee . Subject to the limitations described in Section 3 herein, if, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be, made a party to any Proceeding, the Company shall, without requiring a preliminary determination of Indemnitee’s ultimate entitlement to indemnification hereunder, advance all reasonable Expenses incurred by or on behalf of Indemnitee in connection with (a) such Proceeding which is initiated by a third party who is not a stockholder of the Company, or (b) such Proceeding which is initiated by a stockholder of the Company acting in his or her capacity as such and for which a court of competent jurisdiction specifically approves such advancement, and which relates to acts or omissions with respect to the performance of duties or services on behalf of the Company, within ten days after the receipt by the Company of a statement or statements requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee, together with the Applicable Legal Rate of interest thereon, relating to claims, issues or matters in the Proceeding as to which it shall ultimately be established, by clear and convincing evidence, that the standard of conduct has not been met by Indemnitee and which have not been successfully resolved as described in Section 7 of this Agreement. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee’s financial ability to repay such advanced Expenses and without any requirement to post security therefor.
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Section 9. Indemnification and Advance of Expenses as a Witness or Other Participant . Subject to the limitations in Section 5, to the extent that Indemnitee is or may be, by reason of Indemnitee’s Corporate Status, made a witness or otherwise asked to participate in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party, Indemnitee shall be advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith within ten days after the receipt by the Company of a statement or statements requesting any such advance or indemnification from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee.
Section 10. Procedure for Determination of Entitlement to Indemnification .
(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. Indemnitee may submit one or more such requests from time to time and at such time(s) as Indemnitee deems appropriate in Indemnitee’s sole discretion. The officer of the Company receiving any such request from Indemnitee shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant to Section 10(a) above, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, which Independent Counsel shall be selected by Indemnitee and approved by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL, which approval shall not be unreasonably withheld; or (ii) if a Change in Control shall not have occurred, (A) by the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors or, if such a quorum cannot be obtained, then by a majority vote of a duly authorized committee of the Board of Directors consisting solely of one or more Disinterested Directors, (B) if Independent Counsel has been selected by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL and approved by Indemnitee, which approval shall not be unreasonably withheld, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee or (C) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 10(b). Any Expenses incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.
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(c) The Company shall pay the reasonable fees and expenses of Independent Counsel, if one is appointed.
Section 11. Presumptions and Effect of Certain Proceedings .
(a) In making any determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 10(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.
(b) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, upon a plea of nolo contendere or its equivalent, or entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.
(c) The knowledge and/or actions, or failure to act, of any other director, officer, employee or agent of the Company or any other director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise shall not be imputed to Indemnitee for purposes of determining any other right to indemnification under this Agreement.
Section 12. Remedies of Indemnitee .
(a) If (i) a determination is made pursuant to Section 10(b) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Sections 8 or 9 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 10(b) of this Agreement within 60 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Sections 7 or 9 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification pursuant to any other section of this Agreement or the charter or Bylaws of the Company is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of Maryland, or in any other court of competent jurisdiction, of Indemnitee’s entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence a proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 12(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce his or her rights under Section 7 of this Agreement. Except as set forth herein, the provisions of Maryland law (without regard to its conflicts of laws rules) shall apply to any such arbitration. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.
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(b) In any judicial proceeding or arbitration commenced pursuant to this Section 12, Indemnitee shall be presumed to be entitled to indemnification or advance of Expenses, as the case may be, under this Agreement and the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be. If Indemnitee commences a judicial proceeding or arbitration pursuant to this Section 12, Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 8 of this Agreement until a final determination is made with respect to Indemnitee’s entitlement to indemnification (as to which all rights of appeal have been exhausted or lapsed). The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all of the provisions of this Agreement.
(c) If a determination shall have been made pursuant to Section 10(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification.
(d) In the event that Indemnitee is successful in seeking, pursuant to this Section 12, a judicial adjudication of or an award in arbitration to enforce Indemnitee’s rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him or her in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.
(e) Interest shall be paid by the Company to Indemnitee at the maximum rate allowed to be charged for judgments under the Courts and Judicial Proceedings Article of the Annotated Code of Maryland for amounts which the Company pays or is obligated to pay for the period (i) commencing with either the tenth day after the date on which the Company was requested to advance Expenses in accordance with Sections 8 or 9 of this Agreement or the 60 th day after the date on which the Company was requested to make the determination of entitlement to indemnification under Section 10(b) of this Agreement, as applicable, and (ii) and ending on the date such payment is made to Indemnitee by the Company.
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Section 13. Defense of the Underlying Proceeding .
(a) Indemnitee shall notify the Company promptly in writing upon being served with any summons, citation, subpoena, complaint, indictment, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder and shall include with such notice a description of the nature of the Proceeding and a summary of the facts underlying the Proceeding. The failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company’s ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.
(b) Subject to the provisions of the last sentence of this Section 13(b) and of Section 13(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 13(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admission of fault of Indemnitee, (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee, or (iii) would impose any Expense, judgment, fine, penalty or limitation on Indemnitee. This Section 13(b) shall not apply to a Proceeding brought by Indemnitee under Section 12 of this Agreement.
(c) Notwithstanding the provisions of Section 13(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s Corporate Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that Indemnitee may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee’s choice, subject to the prior approval of the Company, which approval shall not be unreasonably withheld, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s choice, subject to the prior approval of the Company, which approval shall not be unreasonably withheld, at the expense of the Company (subject to Section 12(d) of this Agreement), to represent Indemnitee in connection with any such matter.
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Section 14. Non-Exclusivity; Survival of Rights; Subrogation .
(a) The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise. Unless consented to in writing by Indemnitee, no amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his or her Corporate Status prior to such amendment, alteration or repeal, regardless of whether a claim with respect to such action or inaction is raised prior or subsequent to such amendment, alteration or repeal. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right or remedy shall be cumulative and in addition to every other right or remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion of any right or remedy hereunder, or otherwise, shall not prohibit the concurrent assertion or employment of any other right or remedy.
(b) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
Section 15. Insurance . The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee by reason of his or her Corporate Status and covering the Company for any indemnification or advance of Expenses made by the Company to Indemnitee for any claims made against Indemnitee by reason of his or her Corporate Status. Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and Expenses incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous sentence. The purchase, establishment and maintenance of any such insurance shall not in any way limit or affect the rights or obligations of the Company or Indemnitee under this Agreement except as expressly provided herein, and the execution and delivery of this Agreement by the Company and Indemnitee shall not in any way limit or affect the rights or obligations of the Company under any such insurance policies. If, at the time the Company receives notice from any source of a Proceeding to which Indemnitee is a party or a participant (as a witness or otherwise), the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies.
Section 16. Coordination of Payments . The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
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Section 17. Reports to Stockholders . To the extent required by the MGCL, the Company shall report in writing to its stockholders the payment of any amounts for indemnification of, or advance of Expenses to, Indemnitee under this Agreement arising out of a Proceeding by or in the right of the Company with the notice of the meeting of stockholders of the Company next following the date of the payment of any such indemnification or advance of Expenses or prior to such meeting.
Section 18. Duration of Agreement; Binding Effect .
(a) This Agreement shall continue until and terminate on the later of (i) the date that Indemnitee shall have ceased to serve as a director, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company and (ii) the date that Indemnitee is no longer subject to any actual or possible Proceeding (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant to Section 12 of this Agreement).
(b) The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company, and shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.
(c) The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.
(d) The Company and Indemnitee agree that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable and difficult of proof, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance, Indemnitee shall not be precluded from seeking or obtaining any other relief to which Indemnitee may be entitled. Indemnitee shall further be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds or other undertakings in connection therewith. The Company acknowledges that, in the absence of a waiver, a bond or undertaking may be required of Indemnitee by a court, and the Company hereby waives any such requirement of such a bond or undertaking.
- 11 - |
Section 19. Severability . If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
Section 20. Identical Counterparts . This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.
Section 21. Headings . The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
Section 22. Modification and Waiver . No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
Section 23. Notices . All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, on the day of such delivery, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:
(a) If to Indemnitee, to the address set forth on the signature page hereto.
- 12 - |
(b) If to the Company, to:
[ ]
[ ]
[ ]
[ ]
[Attn: General Counsel]
or to such other address as may have been furnished in writing to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.
Section 24. Governing Law . This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without regard to its conflicts of laws rules.
- 13 - |
[SIGNATURE PAGE FOLLOWS]
- 14 - |
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
BUSINESS DEVELOPMENT CORPORATION OF AMERICA
By: ________________________________
Name:
Title:
INDEMNITEE
____________________________________
Name:
Address:
- 15 - |
EXHIBIT A
AFFIRMATION AND UNDERTAKING TO REPAY EXPENSES ADVANCED
To: The Board of Directors of _________________________
Re: Affirmation and Undertaking
Ladies and Gentlemen:
This Affirmation and Undertaking is being provided pursuant to that certain Indemnification Agreement, dated the _____ day of _______________, 2010, by and between _________________________, a Maryland corporation (the “Company”), and the undersigned Indemnitee (the “Indemnification Agreement”), pursuant to which I am entitled to advance of Expenses in connection with [Description of Proceeding] (the “Proceeding”).
Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.
I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm my good faith belief that at all times, insofar as I was involved as an Independent Director of the Company, in any of the facts or events giving rise to the Proceeding, I (1) did not act with bad faith or active or deliberate dishonesty, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.
In consideration of the advance of Expenses by the Company for reasonable attorneys’ fees and related Expenses incurred by me in connection with the Proceeding (the “Advanced Expenses”), I hereby agree that if, in connection with the Proceeding, it is established that (1) such Advanced Expenses are subject to the limitations and disqualifications described in the Indemnification Agreement or (2) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (3) I actually received an improper personal benefit in money, property or services or (4) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses, together with the Applicable Legal Rate of interest thereon, relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established.
IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this _____ day of _______________, 20____.
_____________________________
Name:
BUSINESS DEVELOPMENT CORPORATION OF AMERICA
CODE OF BUSINESS CONDUCT AND ETHICS
November 2014
TABLE OF CONTENTS
Page | |
INTRODUCTION | 1 |
CODE OF ETHICS | 3 |
Scope of the Code of Ethics | 3 |
Definitions | 3 |
Standards of Conduct | 6 |
Prohibited Transactions | 6 |
Management of the Restricted List | 7 |
Procedures to Implement the Code of Ethics | 8 |
Reporting Requirements | 8 |
Pre-Clearance Reports | 8 |
Initial Holdings Reports | 9 |
Quarterly Transaction Reports | 9 |
Annual Holdings Reports | 10 |
Annual Certification of Compliance | 10 |
STATEMENT ON THE PROHIBITION OF INSIDER TRADING | 11 |
Summary of BDCA’s Business Activities | 11 |
Background | 11 |
Policy | 12 |
Who is an Insider? | 12 |
What is Material Information? | 12 |
What is Non-public Information? | 13 |
Bases for Liability | 13 |
Penalties for Insider Trading | 14 |
Controlling the Flow of Sensitive Information | 14 |
ADMINISTRATION OF THE CODE | 15 |
SANCTIONS FOR CODE VIOLATIONS | 16 |
APPLICATION/WAIVERS | 16 |
RECORDS | 16 |
REVISIONS AND AMENDMENTS | 17 |
Appendices
Code Acknowledgment Form | A-1 |
Pre-Clearance Form | B-1 |
Initial Holdings Form | C-1 |
Quarterly Pre-Clearance Form | D-1 |
Annual Holdings Form | E-1 |
Certification of Rebuttal of Access Presumption | F-1 |
INTRODUCTION
Ethics are important to Business Development Corporation of America (“ BDCA ”, “ our ”, “ us ”, or “ we ”) and to its management. BDCA is committed to the highest ethical standards and to conducting its business with the highest level of integrity.
All officers, directors and employees of BDCA are responsible for maintaining this level of integrity and for complying with the policies contained in this Code of Business Conduct and Ethics (the “ Code ”). If you have a question or concern about what is proper conduct for you or anyone else, please raise these concerns with BDCA’s Chief Compliance Officer, or follow the procedures outlined in applicable sections of this Code.
This Code has been adopted by the Board of Directors of BDCA (the “ Board ”) in accordance with Rule 17j-l(c) under the Investment Company Act of 1940 (the “ 1940 Act ”) and the May 9, 1994 Report of the Advisory Group on Personal Investing by the Investment Company Institute (the “ Report ”). Rule 17j-l generally describes fraudulent or manipulative practices with respect to purchases or sales of securities held or to be acquired by business development companies if effected by access persons of such companies.
PURPOSE OF THE CODE
This Code is intended to:
· | help you recognize ethical issues and take the appropriate steps to resolve these issues; |
· | deter ethical violations to avoid any abuse of position of trust and responsibility; |
· | maintain confidentiality of our business activities; |
· | assist you in complying with applicable securities laws; |
· | assist you in reporting any unethical or illegal conduct; and |
· | reaffirm and promote our commitment to a corporate culture that values honesty, integrity and accountability. |
Further, it is the policy of BDCA that no affiliated person of our organization shall, in connection with the purchase or sale, directly or indirectly, by such person of any security held or to be acquired by BDCA:
· | employ any device, scheme or artifice to defraud us; |
· | make any untrue statement of a material fact or omit to state to us a material fact in order to make the statement made, in light of the circumstances under which it is made, not misleading; |
· | engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon us; or |
· | engage in any manipulative practices with respect to our business activities. |
All employees, as a condition of employment or continued employment, will acknowledge annually, in writing, that they have received a copy of this Code, read it, and understand that the Code contains our expectations regarding their conduct.
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CODE OF ETHICS
The employees specified in the following discussion will be subject to the provisions of the Code.
Scope of the Code of Ethics
In order to prevent Access Persons, as defined below, from engaging in any of these prohibited acts, practices or courses of business, the Board of Directors of BDCA has adopted this Code.
Definitions
Access Person . “Access Person” means any director, officer, partner, employee or Advisory Person of BDCA. An Access Person shall not include any person who the CCO determines to be a Non-Access Covered Person. The CCO maintains records of the status of all relevant persons under the Code, and will inform each such person about that person’s status as necessary. The defined term “Access Person” shall not include any person who is subject to securities transaction reporting requirements of a code of ethics adopted by an adviser, distributor, sub-administrator or sub-adviser (or affiliate of any of the foregoing), which contains provisions that comport with Rule 17j-1 under the 1940 Act, and which has been submitted to the Board.
Advisory Person . “Advisory Person” of BDCA means: (i) any director, officer or employee of BDCA, BDCA Adviser or of any company in a control relationship to BDCA, who, in connection with his or her regular duties, makes, participates in, or obtains information regarding the purchase or sale of a Covered Security by BDCA, or whose functions relate to the making of any recommendations with respect to such purchases or sales; and (ii) any natural person in a control relationship to BDCA who obtains information concerning recommendations made to BDCA with regard to the purchase or sale of a Covered Security. An “Advisory Person” shall not include a “Disinterested Director” (as defined below) with respect to BDCA unless the Disinterested Director knew or, in the ordinary course of fulfilling his or her official duties as a Disinterested Director, should have known that during the 15-day period immediately before or after the Disinterested Director’s transaction in a Covered Security, the Fund purchased or sold the Covered Security, or the Fund or BDCA Adviser considered purchasing or selling the Covered Security. The defined term “Advisory Person” shall also not include any person who is subject to securities transaction reporting requirements for Covered Securities of a code of ethics adopted by an adviser, distributor, sub-administrator or sub-adviser (or affiliate of any of the foregoing), which contains provisions that comport with Rule 17j-1 under the 1940 Act, and which has been submitted to the Board of Directors of BDCA.
Automatic Investment Plan . “Automatic Investment Plan” refers to any program in which regular periodic purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation, including a dividend reinvestment plan.
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Beneficial Interest . “Beneficial Interest” includes any entity, person, trust, or account with respect to which an Access Person exercises investment discretion or provides investment advice. A beneficial interest shall be presumed to include all accounts in the name of or for the benefit of the Access Person, his or her spouse, dependent children, or any person living with him or her or to whom he or she contributed economic support.
Beneficial Ownership . “Beneficial Ownership” shall be determined in accordance with Rule 16a-1(a)(2) under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), except that the determination of direct or indirect Beneficial Ownership shall apply to all securities, and not just equity securities, that an Access Person has or acquires. Rule 16a-1(a)(2) provides that the term “beneficial owner” means any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, has or shares a direct or indirect pecuniary interest in any equity security. Therefore, an Access Person may be deemed to have Beneficial Ownership of securities held by members of his or her immediate family sharing the same household, or by certain partnerships, trusts, corporations, or other arrangements.
Blackout Period . “Blackout Period” shall mean that timeframe in which BDCA or an Access Person, or Disinterested Director with knowledge of BDCA’s trading activity, may not engage in trading in an issue, or its related securities, appearing on the BDCA Restricted List as described below.
Control . “Control” shall have the same meaning as that set forth in Section 2(a)(9) of the 1940 Act.
Covered Security . “Covered Security” means a security as defined in Section 2(a)(36) of the 1940 Act and that is eligible for purchase by BDCA under its investment objective, policies and restrictions. A security that is otherwise a “Covered Security” under this definition is excluded therefrom, however, if it falls into one of the following categories: (i) direct obligations of the government of the United States; (ii) bankers’ acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements; and (iii) shares issued by unaffiliated registered open-end investment companies (i.e., mutual funds). Otherwise qualifying exchange traded funds structured as unit investment trusts or open-end funds are considered “Covered Securities.”
Disinterested Director . “Disinterested Director” means a director or trustee of BDCA who is not an “interested person” of BDCA within the meaning of Section 2(a)(19) of the 1940 Act.
Initial Public Offering . “Initial Public Offering” means an offering of securities registered under the Securities Act of 1933, as amended (the “ Securities Act ”), the issuer of which, immediately before the registration, was not subject to the reporting requirements of Sections 13 or 15(d) of the Exchange Act.
Limited Offering . “Limited Offering” means an offering that is exempt from registration under the Securities Act pursuant to Section 4(a)(2) or Section 4(a)(6) or pursuant to Rule 504, Rule 505 or Rule 506 under the Securities Act.
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Non-Access Covered Persons. Certain BDCA personnel, including but not limited to those who are also officers or directors of BDCA affiliates, are presumed to be Access Persons for purposes of the Rules because providing investment advice is the primary business of BDCA Adviser and certain BDCA Adviser affiliates. However, such persons often do not have actual access to investment or portfolio information or participate in the recommendation process. Where the CCO has determined that the relevant director, officer, or employee: (1) does not meet the definition of “Advisory Person;” (2) does not otherwise have access to nonpublic information with respect to client holdings or transactions or BDCA Adviser securities recommendations; and (3) is not involved in the recommendation process, the CCO may determine to treat such person as a “Non-Access Covered Person” for purposes of this Code. Non-Access Covered Persons must, prior to being so designated and at least once per calendar year thereafter certify to the CCO, in the form attached as Appendix F as to the relevant facts and circumstances that formed the basis of the CCO’s above-described determination.
Purchase or Sale of a Covered Security . “Purchase or Sale of a Covered Security” is broad and includes, among other things, the writing of an option to purchase or sell a covered security, or the use of a derivative product to take a position in a Covered Security.
Restricted List . The Restricted List identifies those securities which BDCA or its Access Persons may not trade due to some restriction under the securities laws whereby BDCA or its Access Persons may be deemed to possess material non-public information about the issuer of such securities.
Supervised Person . A “Supervised Person” means any partner, officer, director (or other person occupying a similar status or performing similar functions), or employee of BDCA Adviser.
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Standards of Conduct
1. No Access Person, Supervised Person or Disinterested Director shall engage, directly or indirectly, in any business transaction or arrangement for personal profit that is not in the best interests of BDCA or its shareholders; nor shall he or she make use of any confidential information gained by reason of his or her employment by or affiliation with BDCA, BDCA Adviser or any of its affiliates, in order to derive a personal profit for himself or herself or for any Beneficial Interest, in violation of the fiduciary duty owed to BDCA and its shareholders.
2. Any Access Person recommending or authorizing the purchase or sale of a Covered Security by BDCA shall, at the time of such recommendation or authorization, disclose any Beneficial Interest in, or Beneficial Ownership of, such Covered Security or the issuer thereof.
3. No Access Person, Supervised Person or Disinterested Director shall dispense any information concerning securities holdings or securities transactions of BDCA to anyone outside BDCA without obtaining prior written approval from our Chief Compliance Officer, or such person or persons as these individuals may designate to act on their behalf. Notwithstanding the preceding sentence, such Access Person may dispense such information without obtaining prior written approval:
· | when there is a public report containing the same information; |
· | when such information is dispensed in accordance with compliance procedures established to prevent conflicts of interest between BDCA and its affiliates; |
· | when such information is reported to directors of BDCA; or |
· | in the ordinary course of his or her duties on behalf of BDCA. |
4. All personal securities transactions should be conducted consistent with this Code and in such manner as to avoid actual or potential conflicts of interest, the appearance of a conflict of interest, or any abuse of an individual’s position of trust and responsibility within BDCA.
Prohibited Transactions
5. General Prohibition . No Access Person shall purchase or sell, directly or indirectly, any Covered Security (including any security issued by the issuer of such Covered Security) in which he or she has, or by reason of such transaction acquires, any direct or indirect Beneficial Ownership and which such Access Person knows or should have known at the time of such purchase or sale is being considered for purchase or sale by BDCA, or is held in BDCA’s portfolio unless such Access Person shall have obtained prior written approval for such purpose from our Chief Compliance Officer.
· | An Access Person who becomes aware that BDCA is considering the purchase or sale of any Covered Security must immediately notify our Chief Compliance Officer of any interest that such Access Person may have in any outstanding Covered Security (including any security issued by the issuer of such Covered Security). |
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· | An Access Person shall similarly notify our Chief Compliance Officer of any other interest or connection that such Access Person might have in or with such issuer. |
· | Once an Access Person becomes aware that BDCA is considering the purchase or sale of a Covered Security in its portfolio, such Access Person may not engage in any transaction in such Covered Security (including any security issued by the issuer of such Covered Security). |
· | The foregoing notifications or permission may be provided verbally, but should be confirmed in writing as soon and with as much detail as possible. |
6. Securities Appearing on the Portfolio and Pipeline Reports and Restricted List . The holdings of the BDCA’s portfolio are detailed in the Portfolio Report . Access Persons will also receive, as frequently as necessary, the names of those entities that are being considered for investment by BDCA’s portfolio in the Pipeline Report. Access Persons are required to review these reports and the Restricted List prior to engaging in any securities transactions.
7. Initial Public Offerings and Limited Offerings . Advisory Persons of BDCA must obtain approval from the CCO before directly or indirectly acquiring Beneficial Ownership in any securities in an Initial Public Offering or in a Limited Offering.
8. Securities under Review . No Access Person shall execute a securities transaction in any security issued by an entity that BDCA owns in its portfolio or is considering for purchase or sale unless such Access Person shall have obtained prior written approval for such purpose from our Chief Compliance Officer.
9. Blackout Period . No Access Person may trade in the securities of any issuer appearing on the Restricted List until notified that the entity name no longer appears on the Restricted List. Access Persons are also prohibited from trading in the names appearing on the Pipeline and Portfolio Reports (as discussed above).
10. Company Acquisition of Shares in Companies that Access Persons Hold Through Limited Offerings . Advisory Persons who have been authorized to acquire securities in a Limited Offering must disclose that investment to our Chief Compliance Officer when they are involved in BDCA’s subsequent consideration of an investment in the issuer, and BDCA’s decision to purchase such securities must be independently reviewed by Investment Personnel with no personal interest in that issuer.
Management of the Restricted List
BDCA Adviser shall through its Chief Investment Officer (or his or her designee), create and maintain a list of issuers, companies and other entities as to which BDCA Adviser or its service providers have received material, non-public information (the “Restricted List”). Should an Access Person learn of material non-public information concerning the issuer of any security that information must be provided to the Chief Investment Officer (or his or her designee), so that the issuer can be included on the Restricted List. The Chief Investment Officer will note the nature of the information learned, the time the information was learned and the other persons in possession of this information, and will maintain this information in a log. Upon the receipt of such information, the Chief Investment Officer will revise and circulate the Restricted List to all Access Persons.
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BDCA Adviser is directed to advise BDCA when it has obtained information that causes it to be restricted from trading in the securities of any of the names appearing in the BDCA’s portfolio. This information will be provided to our Chief Investment Officer who will add the name(s) to the Restricted List and electronically circulate the revised list to Access Persons.
The contents of the Restricted List are highly confidential and must not be disclosed to any person or entity outside of BDCA Adviser absent approval of the Chief Compliance Officer or the Chief Executive Officer.
Procedures to Implement the Code of Ethics
The following reporting procedures have been established to assist Access Persons in avoiding a violation of this Code, and to assist BDCA and BDCA Adviser in preventing, detecting and imposing sanctions for violations of this Code. Every Access Person must follow these procedures. Questions regarding these procedures should be directed to our Chief Compliance Officer.
All Access Persons are subject to the reporting requirements set forth in the next section except:
· | Transactions effected for, and Covered Security (including any security issued by the issuer of such Covered Security) held in, any account over which the Access Person has no direct or indirect influence or control; or |
· | Transactions effected pursuant to an Automatic Investment Plan. |
Reporting Requirements
Each Supervised Person is required to certify that he or she has received, read and understands all aspects of the Code and recognizes that he or she is subject to the provisions and principles detailed therein. In addition, our Chief Compliance Officer or his designee shall notify each Access Person of his or her obligation to file an initial holdings report, quarterly transaction reports, and annual holdings reports, as described below.
Pre-Clearance Reports
Advisory Persons of BDCA Adviser must obtain approval from BDCA Adviser’s Chief Compliance Officer or his designee prior to entering into a qualifying transaction in a Limited Offering or an Initial Public Offering.
Pre-clearance of trades in securities issued by companies whose names appear on the Pipeline and Portfolio Reports is required of all Access Persons.
The pre-clearance form shall include the name of the reporting Person, the date, the name of the broker who will execute the transaction, the name of the security, quantity, whether the transaction is a purchase or sale, total anticipated dollar value and any pertinent instructions, i.e., GTC, limit, etc. There will also be a line for approval or disapproval along with space for comments and the date.
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If BDCA Adviser’s Chief Compliance Officer or his designee does not approve the transaction the reason for denial will be provided on the pre-clearance form.
Initial Holdings Reports
Each Access Person must, no later than 10 days after the person becomes an Access Person, submit to our Chief Compliance Officer or other designated person a report of the Access Person’s current securities holdings. The information provided must be current as of a date no more than 45 days prior to the date the person becomes an Access Person. The report must include the following:
· | the title and type of the security and, as applicable, the exchange ticker symbol or CUSIP number, the number of shares held for each security, and the principal amount; |
· | the name of any broker, dealer or bank with which the Access Person maintains an account in which any securities are held for the Access Person’s direct or indirect benefit; and |
· | the date the Access Person submits the report. |
Quarterly Transaction Reports
Each Access Person must, no later than 30 days after the end of each calendar quarter, submit to our Chief Compliance Officer or other designated person a report of the Access Person’s transactions involving a Covered Security (including any security issued by the issuer of such Covered Security) in which the Access Person had, or as a result of the transaction acquired, any direct or indirect Beneficial Ownership. The report must cover all transactions occurring during the calendar quarter most recently ending. Disinterested Directors must file such a report unless the Disinterested Director knew or, in the ordinary course of fulfilling his or her official duties as a Disinterested Director, should have known that during the 15-day period immediately before or after the Disinterested Director’s transaction in a Covered Security, BDCA purchased or sold the Covered Security, or BDCA or BDCA Adviser considered purchasing or selling the Covered Security for BDCA. The report must contain the following information:
· | the date of the transaction; |
· | the title and, as applicable, the exchange ticker symbol or CUSIP number, of each reportable security involved, the interest rate and maturity date of each reportable security involved, the number of shares of each reportable security involved, and the principal amount of each reportable security involved; |
· | the nature of the transaction (i.e., purchase, sale or other type of acquisition or disposition); |
· | the price of the security at which the transaction was effected; |
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· | the name of the broker, dealer or bank with or through which the transaction was effected; and |
· | the date the Access Person submits the report. |
Annual Holdings Reports
Each Access Person must submit, to our Chief Compliance Officer or other designated person, an annual holdings report reflecting holdings as of a date no more than 45 days before the report is submitted. The Annual Holdings Report must be submitted at least once every 12 month period, on a date to be designated by BDCA. Our Chief Compliance Officer or his designee will notify every Access Person of the date. Each report must include:
· | the title and, as applicable, the exchange ticker symbol or CUSIP number, of each reportable security involved, the interest rate and maturity date of each reportable security involved, the number of shares of each reportable security involved, and the principal amount of each reportable security involved; |
· | the name of any broker, dealer or bank with which the Access Person maintains an account in which any securities are held for the Access Person’s direct or indirect benefit; and |
· | the date the Access Person submits the report. |
Annual Certification of Compliance
All Access Person must annually certify through a written acknowledgment that (1) they have read, understood and agree to abide by this Code; (2) they have complied with all applicable requirements of this Code; and (3) they have reported all transactions and holdings that they are required to report under this Code.
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STATEMENT ON THE PROHIBITION OF INSIDER TRADING
Failure by you to recognize the importance of safeguarding information and using information appropriately is greatly detrimental both to your future and to BDCA’s. The information provided below should provide a useful guide about what constitutes insider trading and material inside information.
Summary of BDCA’s Business Activities
BDCA is a non-traded business development company (“BDC”) that has elected to be regulated by the U.S. Securities and Exchange Commission under the provisions of Section 54, et seq., of the Investment Company Act of 1940. BDCA offers individual investors access to private debt with a focus on first lien secured loans, second lien secured loans, and, to a lesser extent, subordinated loans or mezzanine debt. Generally, these loans are made to private companies that have not issued any public securities. In rare instances, however, there may be securities available in the marketplace for issuers in which BDCA holds a loan position.
Certain data sources may make information available to BDCA that has not been fully disseminated in the marketplace. Where BDCA or its investment adviser receives such information, our Chief Investment Officer will update the Restricted List.
In the event that any Access Persons comes into possession of information that is not publically available, either through your work with us or outside of the workplace, you will be required to adhere to the Statement on the Prohibition of Insider Trading (the “ Statement ”) as described in the following pages. You will also be subject to certain reporting requirements in connection with complying with BDCA’s Code.
Background
The securities laws and the rules and regulations of the self-regulatory organizations are designed to assure that the securities markets are fair and honest, that material information regarding a company is publicly available, and that a security’s price and volume are determined by the free interplay of economic forces. The anti-fraud rules of the federal securities laws prohibit, in connection with the purchase or sale of a security:
· | making an untrue statement of a material fact; |
· | omitting to state a material fact necessary to make the statements made not misleading; |
· | engaging in acts, practices or courses of business which would be fraudulent or deceptive. |
Violation of these provisions is a crime that may result in imprisonment and can have other very serious repercussions for both BDCA and the employee. Violators may be censured by the government or self-regulatory organizations, suspended, barred from the securities business or fined. In addition, violations may result in liability under the Federal Securities Laws, including the Insider Trading Sanctions Act of 1984 (“ ITSA ”) and the Insider Trading and Securities Fraud Enforcement Act of 1988 (“ ITSFEA ”). BDCA Adviser’s actions with respect to any violations will be swift and forceful, since it is the victim of any such abuse.
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In this connection, a violation of the BDCA’s policies and procedures regarding confidential information, disclosure and the use of confidential information may result in dismissal, suspension without pay, loss of pay or bonus, loss of severance benefits, demotion or other sanctions, whether or not the violation of BDCA policy or procedure also constituted a violation of law. Trading while in possession of or tipping on the basis of non-public information could also result in civil or criminal liability which could lead to imprisonment, fines and/or a requirement of disgorgement of any profits realized, and as a result of the violation, to an injunction prohibiting the violator from being employed in the securities industry. BDCA may initiate or cooperate in proceedings resulting in such penalties.
Policy
No person to whom the Statement applies, including officers, directors or employees of BDCA, may trade, either personally or on behalf of others, while in possession of material non-public information, nor may any officer, director or employee communicate material non-public information to others in violation of the law. This conduct is referred to as “insider information”. Any questions regarding this policy and procedure should be directed to our Chief Compliance Officer.
While the law concerning insider trading is not rigid, it generally is understood to prohibit:
· | trading by an “insider” while in possession of material non-public information; |
· | trading by a non-insider while in possession of material non-public information where the information either was disclosed to the non-insider in violation of an insider’s duty to keep it confidential or was misappropriated; or |
· | communicating material non-public information to others. |
The elements of a claim for insider trading and the penalties for unlawful conduct are described below.
Who is an Insider?
The concept of an “insider” is broad. It includes officers, directors and employees of a company. In addition, a person can be a “temporary insider” if he or she enters into a special confidential relationship in the conduct of a company’s affairs and as a result is given access to information solely for the company’s purposes. A temporary insider can include, by way of example, attorneys, accountants, consultants, bank lending officers and employees of such organizations. According to the Supreme Court, a company must expect the outsider to keep the disclosed non-public information confidential and the relationship must at least imply such a duty before the outsider will be considered an insider.
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What is Material Information?
Trading on information is not a basis for liability unless the information is material. Information generally is considered “material” if there is a substantial likelihood that a reasonable investor would consider the information important in making an investment decision, or if the information is reasonably certain to have a substantial effect on the price of a company’s securities. Information that should be considered material includes, but is not limited to: dividend changes, earnings estimates not previously disseminated, material changes in previously released earnings estimates, significant merger or acquisition proposals or agreements, major litigation, liquidation problems and extraordinary management developments.
Material information does not have to relate to a company’s business. For example, Carpenter v. United States 108 S. Ct. 316 (1987), the Supreme Court considered as material certain information about the contents of a forthcoming newspaper column that was expected to affect the market price of a security. In that case, a Wall Street Journal reporter was found criminally liable for disclosing to others the dates that reports on various companies would appear in the Journal and whether or not those reports would be favorable.
Any questions that you may have as to whether information is material must be addressed with our Chief Compliance Officer before acting in any way on such information.
What is Non-public Information?
Information is non-public until it has been effectively communicated to the market place. One must be able to point to some fact to show that the information is public. For example, information found in a report filed with the SEC, or appearing in Reuters, Bloomberg or a Dow Jones publication or in any other publication of general circulation would, generally, be considered public. In certain instances, information disseminated to certain segments of the investment community may be deemed “public.” For example, research communicated through institutional information dissemination services such as First Call. The amount of time since the information was first disseminated ordinarily is a factor regarding whether information is considered public.
Bases for Liability
Described below are circumstances under which a person or entity may be deemed to have traded on inside information, and prohibitions applicable, in particular to investment advisors.
1. Fiduciary Duty Theory . In 1980 the Supreme Court found that there is no general duty to disclose before trading on material non-public information, but that such a duty arises where there is a fiduciary relationship between the parties to the transaction. In such case, one party as a right to expect that the other party will not disclose any material non-public information and will refrain from trading. Chiarella v. U.S . 445 U.S. 22 (1980).
Insiders such as employees of an issuer are ordinarily considered to have a fiduciary duty to the issuer and its shareholders. In Dirks v. SEC , 463 U.S. 646 (1983), the Supreme Court stated alternative theories by which such fiduciary duties are imposed on non-insiders: they can enter into a confidential relationship with the company such as, among others, attorneys and accountants (“ temporary insiders ”) or they can acquire a fiduciary duty to the company’s shareholders as “tippees” if they are aware or should have been aware that they have been given confidential information by an insider or temporary insider who has violated his fiduciary duty to the company’s shareholders.
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In the “tippee” situation, a breach of duty occurs only if the insider or temporary insider personally benefits, directly or indirectly, from the disclosure. The benefit does not have to be of a financial nature, but can be a gift, a reputational benefit that will translate into future earnings, or even evidence of a relationship that suggests a quid pro quo.
2. Misappropriation Theory . Another basis for insider trading liability is the “misappropriation” theory, where liability is established when trading occurs on material non-public information that was stolen or misappropriated from another person. In Carpenter v. United States , the Court found that a columnist defrauded The Wall Street Journal by communicating information prior to its publication to another person who used the information to trade in the securities markets. It should be noted that the misappropriation theory can be used to reach a variety of individuals not previously thought to be encompassed under the fiduciary duty theory.
Penalties for Insider Trading
Penalties for trading on or communicating material non-public information are severe, both for individuals involved in such conduct and their employers. A person can be subject to some or all of the penalties below even if he or she does not personally benefit from the violation. Penalties include the following:
· | jail sentences; |
· | civil injunction; |
· | treble damages; |
· | disgorgement of profits; |
· | fines for the person who committed the violation of up to three times the profit gained or loss avoided, whether or not the person actually benefited; and |
· | fines for the employer or other controlling person of up to the greater of $1,000,000 or three times the amount of the profit gained or loss avoided. |
Controlling the Flow of Sensitive Information
The following procedures have been established to assist the officers, directors and employees of BDCA in controlling the flow of sensitive information so as to avoid the possibility of trading on material non-public information either on behalf of BDCA or for themselves and to assist BDCA and its supervisory personnel in surveilling for, and otherwise preventing and detecting, insider trading. Every officer, director and employee of BDCA must follow these procedures or risk serious sanctions by one or more regulatory authorities and/or BDCA, including dismissal, substantial personal liability and criminal penalties. If you have any questions about these procedures you should consult our Chief Compliance Officer.
1. Identifying Inside Information . Before trading for yourself or others in the securities of a company about which you have what you believe to be inside information, ask yourself the following questions:
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· | Is the information non-public? To whom has this information been provided? Has the information been effectively communicated to the marketplace? To what extent, for how long, and by what means has the information been disseminated? If information is not public, it normally may not be used in connection with effecting securities transactions; however, if you have any doubts whatsoever as to whether the information is public, you must ask our Chief Compliance Officer prior to trading on, or communicating (except in accordance with the procedures and requirements herein) such information. |
· | Is the information material? Is this information that an investor would consider important in making his or her investment decision? Is this information that would substantially affect the market price of the securities if generally disclosed? |
If, after consideration of the above, you believe that the information may be material and non-public, or if you have questions in that regard, you should take the following steps:
· | Report the matter immediately to our Chief Compliance Officer. |
· | Do not purchase or sell the securities on behalf of yourself or others. |
· | Do not communicate the information inside or outside of BDCA, other than to our Chief Compliance Officer. |
· | After our Chief Compliance Officer has reviewed the issue, you will be instructed to continue the prohibitions against trading and communication, or you will be allowed to communicate the information and then trade. |
2. Restricting Access to Material Non-public Information . Information in your possession that you identify as material and non-public may not be communicated to anyone, except as provided in paragraph 1 above. In addition, care should be taken so that such information is secure. For example, files containing material non-public information should be sealed; access to computer files containing material non-public information should be restricted.
3. Personal Security Trading . All officers, directors and employees must trade in accordance with the provisions of the Code as well as the Statement in order to assist BDCA with monitoring for violations of the law.
4. Restricted List . As defined in the Code, BDCA’s Chief Investment Officer will maintain a Restricted List. Disclosure outside of BDCA as to what issuers and/or securities are on the Restricted List could therefore constitute tipping and is strictly prohibited.
5. Supervision/Investigation . Should our Chief Compliance Officer learn, through regular review of personal trading documents, or from some other source, that a violation of this Code is suspected, our Chief Compliance Officer shall alert the Chief Executive Officer of BDCA. Together these parties will determine who should conduct further investigation, if they determine one is necessary.
ADMINISTRATION OF THE CODE
Our Chief Compliance Officer has overall responsibility for administering the Code and reporting on the administration of and compliance with the Code and related matters to our Board and the Audit Committee of the Board (the “ Audit Committee ”).
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Our Chief Compliance Officer shall review reports to determine whether any transactions recorded therein constitute violations of the Code. Before making any determination that a violation has been committed by person subject to the Code, such person shall be given an opportunity to supply additional explanatory material. Our Chief Compliance Officer shall maintain copies of the reports as required by Rule 17j-1(f) under the 1940 Act.
No less frequently than annually our Chief Compliance Officer must furnish to the Board and Audit Committee, and the Board and/or Audit Committee must consider, a written report that describes any issues arising under the Code or its procedures since the last report to the Board, including but not limited to, information about material violations of the Code or its procedures and any sanctions imposed in response to material violations. This report should also certify that BDCA has adopted procedures reasonably designed to prevent persons subject to the Code from violating the Code.
SANCTIONS FOR CODE VIOLATIONS
All violations of the Code will result in appropriate corrective action, up to and including dismissal. If the violation involves potentially criminal activity, the individual or individuals in question will be reported, as warranted, to the appropriate authorities.
APPLICATION/WAIVERS
All the directors, officers and employees of BDCA and its investment adviser are subject to this Code.
Insofar as other policies or procedures of BDCA or its investment adviser govern or purport to govern the behavior or activities of all persons who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code.
Any amendment or waiver of the Code for an executive officer or member of our Board of Directors must be made by our Board of Directors and disclosed on a Form 8-K filed with the Securities and Exchange Commission within four business days following such amendment or waiver.
RECORDS
BDCA shall maintain records with respect to this Code in the manner and to the extent set forth below, which records may be maintained on microfilm or electronic storage media under the conditions described in Rule 31a-2(f) under the 1940 Act and shall be available for examination by representatives of the Securities and Exchange Commission (the “ SEC ”):
1. A copy of this Code that is, or at any time within the past five years has been, in effect shall be maintained in an easily accessible place;
2. A record of any violation of this Code and of any action taken as a result of such violation shall be maintained in an easily accessible place for a period of not less than five years following the end of the fiscal year in which the violation occurs;
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A copy of each report made by an Access Person or duplicate account statement received pursuant to the Code, shall be maintained for a period of not less than five years from the end of the fiscal year in which it is made or the information is provided, the first two years in an easily accessible place;
3. A record of all persons who are, or within the past five years have been, required to make reports pursuant to this Code, or who are or were responsible for reviewing these reports, shall be maintained in an easily accessible place;
4. A copy of each report made to BDCA’s Board shall be maintained for at least five years after the end of the fiscal year in which it is made, the first two years in an easily accessible place; and
5. A record of any decision, and the reasons supporting the decision, to approve the direct or indirect acquisition by an Access Person of Beneficial Ownership in any securities in an Initial Public Offering or a Limited Offering shall be maintained for at least five years after the end of the fiscal year in which the approval is granted.
REVISIONS AND AMENDMENTS
This Code may be revised, changed or amended at any time by our Board of Directors. Following any material revisions or updates, an updated version of this Code will be distributed to you, and will supersede the prior version of this Code effective upon distribution. We may ask you to sign an acknowledgement confirming that you have read and understood the revised version of the Code, and that you agree to comply with the provisions.
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APPENDIX A
______ Business Development Corporation of America
(the “Company”)
Acknowledgment Regarding
Code of Business Conduct and Ethics
This acknowledgment is to be signed and returned to our Chief Compliance Officer and will be retained as part of your permanent personnel file |
I have received a copy of the Company’s Code of Business Conduct and Ethics (the “Code”), read it, and understand that the Code contains the expectations of the Company regarding employee conduct and ethical behavior. I agree to observe the policies and procedures contained in the Code and have been advised that, if I have any questions or concerns relating to such policies or procedures, I understand that I have an obligation to report to the Chief Compliance Officer, any suspected violations of the Code of which I am aware. I also understand that the Code is issued for informational purposes and that it is not intended to create, nor does it represent, a contract of employment.
Employee’s Name (Printed) | |
Employee’s Signature | |
Date |
The failure to read and/or sign this acknowledgment in no way relieves you of your responsibility to comply with the Company’s Code of Business Conduct, Ethics and Statement on the Prohibition of Insider Trading.
APPENDIX B
____ Business Development Corporation of America
or
____ BDCA Adviser, LLC
(collectively, the “Company”)
PRE-CLEARANCE FORM
Use this form to request pre-clearance of a transaction to purchase a Limited Offering, Initial Public Offering or to purchase or sell a security issued by an issuer appearing on the Portfolio or Pipeline Reports. Please submit this form, together with a copy of the Limited Offering documentation to the Chief Compliance Officer at least five (5) business days before the planned investment.
Employee Name: | Date: |
Issuer/Investment Name: | |
Terms of Purchase (price, purchaser – individual, joint, entity, etc.): | |
Proposed Transaction Date: | |
How did you learn about this opportunity? | |
Related to a Portfolio or Pipeline security? | |
Approved: | Date: |
Not Approved: | Date: |
Comments: |
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APPENDIX C
____ Business Development Corporation of America
or
____ BDCA Adviser, LLC
(collectively, the “Company”)
INITIAL HOLDINGS REPORT
As of
To: | Chief Compliance Officer |
A. Securities Holdings . I have listed below (or attached hereto a listing) all of my Securities Holdings held by me or Beneficial Owners as defined by the Company’s Code of Ethics.
Title of
Security |
CUSIP
Number |
Interest
Rate and Maturity Date (If Applicable) |
Date of
Transaction |
Number
of Shares or Principal Amount |
Dollar
Amount of Transaction |
Nature of
Transaction (Purchase, Sale, Other) |
Price |
Broker/Dealer
or Bank Through Whom Effected |
||||||||
B. Brokerage Accounts . I , or a Beneficial Owner, have established the following accounts in which securities for my direct or indirect benefit:
Name of Broker, Dealer or Bank
1.
2.
3.
Date: ___________ | Signature: | |
Print Name: |
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APPENDIX D
____ Business Development Corporation of America
or
____ BDCA Adviser, LLC
(collectively, the “Company”)
QUARTERLY TRANSACTION REPORT
For the Calendar ______ Quarter Ended:
To: Chief Compliance Officer
A. Securities Transactions . During the quarter referred to above, the following transactions were effected in securities of which I had, or by reason of such transactions acquired, direct or indirect beneficial ownership, and which are required to be reported pursuant to the Code of Ethics of the Company:
Title of Security |
CUSIP
Number |
Interest
Rate and Maturity Date (If Applicable) |
Date of
Transaction |
Number
of Shares or Principal Amount |
Dollar
Amount of Transaction |
Nature of
Transaction (Purchase, Sale, Other) |
Price |
Broker/Dealer
or Bank Through Whom Effected |
||||||||
B. New Brokerage Accounts . During the quarter referred to above, I established the following accounts in which securities were held during the quarter for my direct or indirect benefit:
Name of Broker, Dealer or Bank | Date Account Was Established | |
C. Other Matters . This report (i) excludes transactions with respect to which I had no direct or indirect influence or control, (ii) excludes other transactions not required to be reported, and (iii) is not an admission that I have or had any direct or indirect beneficial ownership in the securities listed above.
Date: ___________ | Signature: | |
Print Name: |
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APPENDIX E
____ Business Development Corporation of America
(the “Company”)
ANNUAL HOLDINGS REPORT
As of December 31, 20__
To: | Chief Compliance Officer |
As of December 31, 20__, I had direct or beneficial ownership interest in the securities listed below which are required to be reported pursuant to Rule 17j-1 under the Investment Company Act of 1940:
A. Securities Holdings. I have listed below (or attached hereto a listing) all of my Securities Holdings held by me or Beneficial Owners as defined by the Company’s Code of Ethics.
Title of Security | CUSIP Number |
Number of Shares or Principal Amount |
||
B. As of December 31, 20___, I maintained accounts with brokers, dealers, and banks listed below in which securities were held for my direct or indirect benefit:
Brokerage Accounts . I , or a Beneficial Owner, have established the following accounts in which securities for my direct or indirect benefit:
Name of Broker, Dealer or Bank | Date Account Was Established * | |
1. | ||
2. | ||
3. |
This report (i) excludes securities and accounts over which I had no direct or indirect influence or control;(ii) excludes securities not required to be reported (for example, direct obligations of the U.S. Government, shares of registered investment companies etc.); and (iii) is not an admission that I have or had any direct or indirect beneficial ownership in the securities accounts listed above.
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Date: ___________ | Signature: | |
Print Name: |
*Note: If account was established before 20___, you can state that it was established before 20___.
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APPENDIX F
CERTIFICATION OF REBUTTAL OF ACCESS PRESUMPTION
I, _______________, do hereby certify and affirm that:
(1) I serve as [ position with Company ] and am also [ position with Company Affiliate ]
(2) During the immediate prior calendar year:
(a) I have not, with respect to the Company, obtained information regarding the Company’s purchase or sale of securities;
(b) I have not, with respect to the Company, made, participated in, or obtained information about, the purchase or sale of a Covered Security or related recommendations;
(c) my regular functions and duties have not related to such recommendations, purchases or sales;
(d) I have not been involved in making securities recommendations to the Company nor have I obtained information about such any such recommendations which are nonpublic;
(e) I do not have, and will not accept, access to nonpublic information regarding the portfolio holdings of the Company;
(f) I am aware of and have complied with all provisions of the Code that are relevant to me and with any policies and procedures of the Company and its affiliates relevant to the control of sensitive information about Client accounts or BDCA Adviser recommendations to which I may be subject. I further agree to continue to comply with all such policies and procedures, as they may be amended from time to time.
(3) If any of the representations set forth in 2(a) through (f) above ceases to be true, I will inform the CCO, promptly and, unless otherwise notified by the CCO, I will comply with relevant Code requirements applicable to Access Persons.
(4) I recognize that I am providing this certification in order to allow the CCO to consider my designation as a Non-Access Covered Person. I have read, understand and agree to abide by the Code and, in particular, those provisions of the Code relevant to Non-Access Covered Persons.
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1.
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I have reviewed this Annual Report on Form 10-K for the annual period ended December 31, 2014 of Business Development Corporation of America;
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2.
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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;
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3.
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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;
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4.
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The registrant’s other certifying officer(s) 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)) for the registrant and have:
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(a)
|
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;
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(b)
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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;
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(c)
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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
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(d)
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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 (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) 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):
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(a)
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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
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(b)
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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.
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Date:
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May 4, 2015
|
/s/ Peter M. Budko
|
|
|
Peter M. Budko
|
|
|
Chief Executive Officer and
Chairman of the Board of Directors
(Principal Executive Officer) |
1.
|
I have reviewed this Annual Report on Form 10-K for the annual period ended December 31, 2014 of Business Development Corporation of America;
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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;
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3.
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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;
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4.
|
The registrant’s other certifying officer(s) 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)) for the registrant and have:
|
(a)
|
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;
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(b)
|
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;
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(c)
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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
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(d)
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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 (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
|
The registrant’s other certifying officer(s) 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):
|
(a)
|
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
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(b)
|
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.
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Date:
|
May 4, 2015
|
/s/ Nicholas Radesca
|
|
|
Nicholas Radesca
Chief Financial Officer, Treasurer and Secretary
(Principal Financial and Accounting Officer)
|
/s/ Peter M. Budko
|
Peter M. Budko
Chief Executive Officer and Chairman of the Board of Directors
(Principal Executive Officer)
|
|
/s/ Nicholas Radesca
|
Nicholas Radesca
Chief Financial Officer, Treasurer and Secretary
(Principal Financial and Accounting Officer)
|