UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number:
(Exact name of registrant as specified in its charter)
(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
(Address of Principal Executive Office) |
(Zip Code) |
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
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Trading Symbol(s)
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Name of Each Exchange on Which Registered
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None |
None |
None |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
There were
Commonwealth Credit Partners BDC I, Inc.
Quarterly Report on Form 10-Q
TABLE OF CONTENTS
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 1A. |
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PART I—FINANCIAL INFORMATION
ITEM1. FINANCIAL STATEMENTS
COMMONWEALTH CREDIT PARTNERS BDC I, INC.
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(amounts in thousands except share and per share data)
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June 30, 2024 (Unaudited) |
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December 31, 2023 |
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Assets: |
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Investments, at fair value: |
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Non-controlled, non-affiliated investments (amortized cost of $ |
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$ |
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$ |
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Affiliated investments (amortized cost of $ |
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Total investments, at fair value (amortized cost of $ |
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Cash and cash equivalents |
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Receivables: |
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Interest receivable |
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Prepaid expenses and other assets |
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Total Assets |
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$ |
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$ |
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Liabilities: |
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Credit facility (net of deferred financing costs of $ |
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$ |
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$ |
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Payables: |
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Management fee payable, net (Note 4) |
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Interest payable |
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Incentive fee payable, net (Note 4) |
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Directors fee payable |
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— |
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Accrued other general and administrative expenses |
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Total Liabilities |
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$ |
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$ |
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Net Assets: |
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Common Shares, $ |
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$ |
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$ |
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Additional paid-in capital |
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Total distributable earnings (accumulated deficit) |
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( |
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( |
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Total Net Assets |
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$ |
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$ |
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Total Liabilities and Net Assets |
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$ |
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$ |
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Net Asset Value Per Common Share |
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$ |
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$ |
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The accompanying notes are an integral part of these consolidated financial statements.
1
COMMONWEALTH CREDIT PARTNERS BDC I, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands except share and per share data)
(Unaudited)
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For the Three Months Ended |
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For the Six Months Ended |
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June 30, 2024 |
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June 30, 2023 |
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June 30, 2024 |
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June 30, 2023 |
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Income: |
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Investment income from non-controlled, non-affiliated investments: |
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Interest income |
$ |
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$ |
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$ |
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$ |
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Fee income |
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Total Investment Income |
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Expenses: |
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Incentive fees |
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Management fees, net |
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Interest expense |
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Professional fees |
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Directors fees |
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Other general and administrative expenses |
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Total Expenses |
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Less: Incentive fee waiver (Note 4) |
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- |
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( |
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- |
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( |
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Net expenses |
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Net Investment Income (Loss) |
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Realized and unrealized gains (losses) on investments and foreign currency transactions |
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Net realized gains (losses): |
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Non-controlled, non-affiliated investments |
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- |
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( |
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- |
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Total net realized gains (losses) |
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- |
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( |
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- |
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Net change in unrealized gains (losses): |
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Non-controlled, non-affiliated investments |
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Affiliated investments |
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( |
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- |
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( |
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- |
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Total net change in unrealized gains (losses) |
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( |
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( |
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Total realized and unrealized gains (losses) |
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Net Increase (Decrease) in Net Assets Resulting from Operations |
$ |
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$ |
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$ |
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$ |
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Per Common Share Data: |
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Basic and diluted net investment income/(loss) per common share |
$ |
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$ |
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$ |
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$ |
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Basic and diluted net increase/(decrease) in net assets resulting from operations per common share |
$ |
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$ |
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$ |
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$ |
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Weighted Average Common Shares Outstanding - Basic and Diluted |
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The accompanying notes are an integral part of these consolidated financial statements.
2
COMMONWEALTH CREDIT PARTNERS BDC I, INC.
CONSOLIDATED STATEMENT OF CHANGE IN NET ASSETS
(amounts in thousands except share and per share data)
(Unaudited)
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For the Three Months Ended |
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For the Six Months Ended |
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June 30, 2024 |
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June 30, 2023 |
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June 30, 2024 |
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June 30, 2023 |
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Increase (Decrease) in Net Assets Resulting from Operations: |
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Net investment income (loss) |
$ |
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$ |
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$ |
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$ |
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Net realized gains (losses) on investments |
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— |
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( |
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— |
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Net change in unrealized gains (losses) on investments |
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( |
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( |
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Net Increase (Decrease) in Net Assets Resulting from Operations |
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Decrease in Net Assets Resulting from Stockholder Distributions |
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Distributions from net investment income |
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( |
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( |
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( |
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( |
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Net Decrease in Net Assets Resulting from Stockholder Distributions |
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( |
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( |
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( |
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( |
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Increase in Net Assets Resulting from Capital Share Transactions |
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Issuance of common shares |
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— |
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Reinvestment of distributions |
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Net Increase in Net Assets Resulting from Capital Share Transactions |
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Total Increase (Decrease) in Net Assets |
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Net Assets, Beginning of Period |
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Net Assets, End of Period |
$ |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part of these consolidated financial statements.
3
COMMONWEALTH CREDIT PARTNERS BDC I, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(Unaudited)
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For the Six Months Ended |
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June 30, 2024 |
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June 30, 2023 |
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Cash Flows from Operating Activities: |
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Net increase (decrease) in net assets resulting from operations |
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$ |
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$ |
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Adjustments to reconcile net increase (decrease) in net assets resulting from |
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operations to net cash provided by (used in) operating activities: |
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Net realized (gains)/losses on investments |
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— |
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Net change in unrealized (gains)/losses on investments |
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( |
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Net accretion of discount on investments |
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( |
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( |
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Non-cash investment income |
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( |
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( |
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Purchases of portfolio investments |
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( |
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Amortization of deferred financing costs |
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Sales or repayments of portfolio investments |
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Increase/(decrease) in operating assets and liabilities: |
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(Increase)/decrease in interest receivable |
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( |
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( |
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(Increase)/decrease in prepaid expenses and other assets |
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( |
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Increase/(decrease) in management fees payable, net |
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Increase/(decrease) in interest payable |
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( |
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Increase/(decrease) in incentive fee payable, net |
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Increase/(decrease) in directors fee payable |
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( |
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Increase/(decrease) in accrued other general and administrative expenses |
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( |
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Net cash provided by (used in) Operating Activities |
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( |
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Cash Flows provided by (used in) Financing Activities: |
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Borrowings on credit facility |
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Payments on credit facility |
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( |
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( |
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Proceeds from issuance of common stock |
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— |
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Net cash provided by (used in) Financing Activities |
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( |
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Net increase (decrease) in cash and cash equivalents |
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( |
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( |
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Cash and cash equivalents, beginning of period |
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Cash and cash equivalents, end of period |
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$ |
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$ |
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Supplemental and Non-Cash Information: |
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Interest paid during the period |
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$ |
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$ |
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Distributions declared during the period |
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$ |
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$ |
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Reinvestment of distributions during the period |
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$ |
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$ |
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The accompanying notes are an integral part of these consolidated financial statements.
4
COMMONWEALTH CREDIT PARTNERS BDC I, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
(amounts in thousands, except per share data)
June 30, 2024
(Unaudited)
Portfolio Company(3)(7) |
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Industry |
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Spread Above Index |
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Interest Rate (5)(8) |
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Maturity Date |
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Principal/ Shares (12) |
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Amortized |
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Fair |
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Percentage of |
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Debt Investments |
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First Lien Senior Secured(5) |
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190 Octane Financing - Delayed Draw Loan |
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Consumer Services |
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SOFR + |
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% |
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$ |
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$ |
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$ |
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% |
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190 Octane Financing - Revolving Credit Line (4) |
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Consumer Services |
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SOFR + |
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% |
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% |
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190 Octane Financing - Term Loan |
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Consumer Services |
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SOFR + |
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% |
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% |
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Abea Acquisition, Inc. - Delayed Draw Loan |
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Consumer Services |
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SOFR + |
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% |
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% |
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Abea Acquisition, Inc. - Term Loan |
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Consumer Services |
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SOFR + |
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% |
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% |
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AccessOne Medcard, Inc. - Term Loan |
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Financial Services |
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SOFR + |
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% |
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% |
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ACT Acquisition - Delayed Draw Term Loan |
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Media & Entertainment |
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SOFR + |
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% |
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% |
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ACT Acquisition - Revolving Credit Line (4) |
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Media & Entertainment |
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SOFR + |
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% |
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% |
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ACT Acquisition - Term Loan |
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Media & Entertainment |
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SOFR + |
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% |
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% |
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Allbridge - Delayed Draw Term Loan (4) |
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Telecommunication Services |
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SOFR + |
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% |
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( |
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( |
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% |
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Allbridge - Revolving Credit Line (4) |
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Telecommunication Services |
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SOFR + |
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% |
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( |
) |
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( |
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% |
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Allbridge - Term Loan |
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Telecommunication Services |
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SOFR + |
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% |
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% |
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Aurora Solutions LLC - Delayed Draw Loan |
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Financial Services |
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SOFR + |
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% |
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% |
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Aurora Solutions LLC - Revolving Credit Line (4) |
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Financial Services |
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SOFR + |
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% |
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% |
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Aurora Solutions LLC - Term Loan |
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Financial Services |
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SOFR + |
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% |
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% |
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Batteries Plus Holding Corporation - Revolving Credit Line (4) |
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Technology Hardware & Equipment |
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SOFR + |
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% |
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( |
) |
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% |
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Batteries Plus Holding Corporation - Term Loan |
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Technology Hardware & Equipment |
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SOFR + |
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% |
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% |
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Billhighway - Delayed Draw Loan (4) |
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Software & Services |
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SOFR + |
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% |
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|
|
|
% |
||||||
Billhighway - Revolving Credit Line (4) |
|
Software & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
Billhighway - Term Loan |
|
Software & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
BKH - Delayed Draw Term Loan (4) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
% |
|||||
BKH - Term Loan |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Bradford Health Services - Delayed Draw Term Loan |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Bradford Health Services - Term Loan |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Cardiovascular Logistics - Delayed Draw Term Loan A |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Cardiovascular Logistics - Delayed Draw Term Loan B (4) |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Cardiovascular Logistics - Term Loan |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
CheckedUp - Delayed Draw Term Loan (4) |
|
Media & Entertainment |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
CheckedUp - Revolving Credit Line (4) |
|
Media & Entertainment |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
CheckedUp - Term Loan |
|
Media & Entertainment |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
CreditAssociates, LLC - Revolving Credit Line (4) |
|
Financial Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
CreditAssociates, LLC - Term Loan |
|
Financial Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Discovery SL Management, LLC - Delayed Draw Term Loan A |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Discovery SL Management, LLC - Delayed Draw Term Loan B (4) |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
Discovery SL Management, LLC - Revolving Credit Line (4) |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
Discovery SL Management, LLC - Term Loan |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
EEP-EPS Fund I-A, LP - Revolving Credit Line (4) |
|
Media & Entertainment |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
% |
|||||
EEP-EPS Fund I-A, LP - Term Loan |
|
Media & Entertainment |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Fiesta Holdings - Revolving Credit Line (4) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
% |
|||||
Fiesta Holdings - Term Loan |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Firebirds Intermediate Holdings I, LLC - Delayed Draw Term Loan (4) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
% |
|||||
Firebirds Intermediate Holdings I, LLC - Revolving Credit Line (4) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
5
COMMONWEALTH CREDIT PARTNERS BDC I, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
(amounts in thousands, except per share data)
June 30, 2024
(Unaudited)
Portfolio Company(3)(7) |
|
Industry |
|
Spread Above Index |
|
Interest Rate (5)(8) |
|
|
Maturity Date |
|
Principal/ Shares (12) |
|
|
Amortized |
|
|
Fair |
|
|
Percentage of |
|
|||||
Firebirds Intermediate Holdings I, LLC - Term Loan |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Giving Home Health Care - Term Loan |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Global School Management - Delayed Draw Term Loan (4) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
Global School Management - Revolving Credit Line (4) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
Global School Management - Term Loan |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Hasa - Delayed Draw Loan (4)(9) |
|
Capital Goods |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
Hasa - Revolving Credit Line (4)(9) |
|
Capital Goods |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Hasa - Term Loan (9) |
|
Capital Goods |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Hasa - Term Loan B (9) |
|
Capital Goods |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Kemper Sports Management - Delayed Draw Loan (4) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Kemper Sports Management - Revolving Credit Line (4)(9) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
% |
|||||
Kemper Sports Management - Term Loan |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Kent Water Sports Holdings, LLC - Delayed Draw Loan Last-Out (10)(11) |
|
Consumer Durables & Apparel |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Kent Water Sports Holdings, LLC - Delayed Draw Loan First-Out (4)(10)(11) |
|
Consumer Durables & Apparel |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
MerchantWise Solutions, LLC - Delayed Draw Loan (4) |
|
Software & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
MerchantWise Solutions, LLC - Revolving Credit Line |
|
Software & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
MerchantWise Solutions, LLC - Term Loan |
|
Software & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Military Retail Solutions LLC - Delayed Draw Term Loan (4) |
|
Consumer Staples Distribution & Retail |
|
SOFR + |
|
|
% |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
|||
Military Retail Solutions LLC - Revolving Credit Line (4) |
|
Consumer Staples Distribution & Retail |
|
SOFR + |
|
|
% |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
|||
Military Retail Solutions LLC - Term Loan |
|
Consumer Staples Distribution & Retail |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Mollie Funding II LLC - Delayed Draw Loan (1)(4) |
|
Financial Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Mollie Funding II LLC - Revolving Credit (1)(4) |
|
Financial Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Mollie Funding II LLC - Term Loan (1) |
|
Financial Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Narcote, LLC - Revolving Credit Line (1)(4) |
|
Materials |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
% |
|||||
Narcote, LLC - Term Loan B (1) |
|
Materials |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Narcote, LLC - Term Loan (1) |
|
Materials |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Narcote, LLC - Term Loan C (1) |
|
Materials |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
National Debt Relief - Revolving Credit Line |
|
Financial Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
National Debt Relief - Delayed Draw Loan |
|
Financial Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
National Debt Relief - Term Loan |
|
Financial Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Oak Dental Partners Holding Company, LLC - Delayed Draw Term Loan (4) |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
Oak Dental Partners Holding Company, LLC - Revolving Credit Line (4) |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Oak Dental Partners Holding Company, LLC - Term Loan |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
OAO Acquisitions - Delayed Draw Term Loan (4) |
|
Capital Goods |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
OAO Acquisitions - Revolving Credit Line (4) |
|
Capital Goods |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
% |
|||||
OAO Acquisitions - Term Loan |
|
Capital Goods |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
OneCare Media, LLC - Revolving Credit Line (4) |
|
Media & Entertainment |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
OneCare Media, LLC - Term Loan A |
|
Media & Entertainment |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
OneCare Media, LLC - Term Loan B |
|
Media & Entertainment |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
OneCare Media, LLC - Term Loan C |
|
Media & Entertainment |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
OneCare Media, LLC - Term Loan D |
|
Media & Entertainment |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Peak Technologies - Term Loan |
|
Software & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
PJW Ultimate Holdings LLC - Delayed Draw Term Loan |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
6
COMMONWEALTH CREDIT PARTNERS BDC I, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
(amounts in thousands, except per share data)
June 30, 2024
(Unaudited)
Portfolio Company(3)(7) |
|
Industry |
|
Spread Above Index |
|
Interest Rate (5)(8) |
|
|
Maturity Date |
|
Principal/ Shares (12) |
|
|
Amortized |
|
|
Fair |
|
|
Percentage of |
|
|||||
PJW Ultimate Holdings LLC - Revolving Credit Line (4) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
PJW Ultimate Holdings LLC - Term Loan |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Planet DDS - Delayed Draw Loan (4)(9) |
|
Software & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Planet DDS - Term Loan (9) |
|
Software & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Priority Holdings - Term Loan |
|
Financial Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Raven Engineered Films, Inc. - Revolving Credit Line (4) |
|
Capital Goods |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Raven Engineered Films, Inc. - Term Loan |
|
Capital Goods |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Rushmore Intermediate - Delayed Draw Loan 2nd Amend |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Rushmore Intermediate - Term Loan B |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Rushmore Intermediate - Delayed Draw Loan 4th Amend (4) |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Rushmore Intermediate - Delayed Draw Loan |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Rushmore Intermediate - Revolving Credit Line (4) |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
Rushmore Intermediate - Term Loan |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
S4T Holdings Corp. - Delayed Draw Loan |
|
Commercial & Professional Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
S4T Holdings Corp. - Term Loan |
|
Commercial & Professional Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Select Rehabilitation - Term Loan |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Senior Support Holdings (Franchise) Acquisitions, Inc. - Delayed Draw Term Loan (4) |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
% |
|||
Senior Support Holdings (Franchise) Acquisitions, Inc. - Term Loan |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Spartan CP, LLC - Delayed Draw Term Loan (4) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
Spartan CP, LLC - Revolving Credit Line (4) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
Spartan CP, LLC - Term Loan |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
VardimanBlack Holdings LLC - Delayed Draw Loan (4)(10) |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
VardimanBlack Holdings LLC - Term Loan (10) |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Vecta Environmental Services - Delayed Draw Term Loan (4) |
|
Commercial & Professional Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
Vecta Environmental Services - Revolving Credit Line (4) |
|
Commercial & Professional Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Vecta Environmental Services - Term Loan |
|
Commercial & Professional Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
VENU+ - Revolving Credit Line |
|
Media & Entertainment |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
VENU+ - Term Loan |
|
Media & Entertainment |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
West Creek Financial SPV- Debt Facility VI - Delayed Draw Term Loan (1)(4) |
|
Financial Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
West Creek Financial SPV- Debt Facility VI - Revolving Credit Line (1)(4) |
|
Financial Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
West Creek Financial SPV- Debt Facility VI - Term Loan (1) |
|
Financial Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Whitestone Home Furnishings, LLC - Term Loan |
|
Consumer Durables & Apparel |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Total First Lien Senior Secured |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
Total Debt Investments |
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Equity Investments(6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Preferred Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Atlas US Holdings, LP - class X preferred |
|
Financial Services |
|
|
|
|
NA |
|
|
|
$ |
|
|
$ |
|
|
|
|
% |
|||||||
Atlas US Holdings, LP - class B-2 units |
|
Financial Services |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
EEP-EPS Fund I-A, LP - Series A-1 Preferred Units |
|
Media & Entertainment |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
Kent Water Sports Holdings, LLC - Preferred Stock (9)(10)(11) |
|
Consumer Durables & Apparel |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
VardimanBlack Holdings LLC - Preferred Equity (10) |
|
Health Care Equipment & Services |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
Total Preferred Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
|
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Common Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
190 Octane Holdings, LLC - series A-1 units (9) |
|
Consumer Services |
|
NA |
|
NA |
|
|
NA |
|
|
|
$ |
|
|
$ |
|
|
|
|
% |
|||||
Cardiovascular Logistics - Class O2 Units |
|
Health Care Equipment & Services |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
CTM Acquisition LLC Equity |
|
Media & Entertainment |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
Firebirds Intermediate Holdings I, LLC - Class A Units |
|
Consumer Services |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
Firebirds Intermediate Holdings I, LLC - Class B Units |
|
Consumer Services |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
- |
|
|
|
|
|
|
% |
||||
Kemper Sports Management Holdings LLC Equity (9) |
|
Consumer Services |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
7
COMMONWEALTH CREDIT PARTNERS BDC I, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
(amounts in thousands, except per share data)
June 30, 2024
(Unaudited)
Portfolio Company(3)(7) |
|
Industry |
|
Spread Above Index |
|
Interest Rate (5)(8) |
|
|
Maturity Date |
|
Principal/ Shares (12) |
|
|
Amortized |
|
|
Fair |
|
|
Percentage of |
|
||||
Kent Water Sports Holdings, LLC - Common Stock (9)(10)(11) |
|
Consumer Durables & Apparel |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
||||
Oak Dental Partners Holding Company, LLC - Class C Units (9) |
|
Health Care Equipment & Services |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
||||
Rushmore Lender Co-Invest Blocker, LLC - Common Stock |
|
Health Care Equipment & Services |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
||||
Senior Support Holdings, LP - Class A-1 (9) |
|
Health Care Equipment & Services |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
||||
Senior Support Holdings, LP - Class B (9) |
|
Health Care Equipment & Services |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
||||
TVG OCM III (FT) Blocker, LLC - Class B Units |
|
Media & Entertainment |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
||||
VardimanBlack Holdings LLC - Class A (9)(10) |
|
Health Care Equipment & Services |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
||||
Vistria ESS Holdings, LLC - Equity |
|
Commercial & Professional Services |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
||||
Total Common Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||
Total Equity Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||
Total Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
|
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and Cash Equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
First American Government Obligations Fund - X Class, 5.23% |
|
Cash Equivalents |
|
NA |
|
NA |
|
|
NA |
|
|
|
$ |
|
|
$ |
|
|
|
|
% |
||||
Other cash and cash equivalents |
|
Cash Equivalents |
|
NA |
|
NA |
|
|
NA |
|
NA |
|
|
|
|
|
|
|
|
|
% |
||||
Total Cash and Cash Equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||
Total Investments and Cash and Cash Equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
|
% |
||||
Liabilities in Excess of Other Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
( |
) |
|
|
- |
% |
||
Net Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
% |
||||
8
COMMONWEALTH CREDIT PARTNERS BDC I, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
(amounts in thousands, except per share data)
June 30, 2024
(Unaudited)
The following table shows the portfolio composition by industry grouping based on fair value at June 30, 2024:
|
|
At June 30, 2024(1) |
|
|||||
Industry |
|
Investments and Cash and Cash Equivalents at |
|
|
Percentage of |
|
||
Consumer Services |
|
|
|
|
|
% |
||
Health Care Equipment & Services |
|
|
|
|
|
|
||
Financial Services |
|
|
|
|
|
|
||
Media & Entertainment |
|
|
|
|
|
|
||
Software & Services |
|
|
|
|
|
|
||
Capital Goods |
|
|
|
|
|
|
||
Commercial & Professional Services |
|
|
|
|
|
|
||
Consumer Durables & Apparel |
|
|
|
|
|
|
||
Technology Hardware & Equipment |
|
|
|
|
|
|
||
Consumer Staples Distribution & Retail |
|
|
|
|
|
|
||
Materials |
|
|
|
|
|
|
||
Cash and Cash Equivalents |
|
|
|
|
|
|
||
Telecommunication Services |
|
|
|
|
|
|
||
|
|
$ |
|
|
|
% |
||
(1)
The accompanying notes are an integral part of these consolidated financial statements.
9
COMMONWEALTH CREDIT PARTNERS BDC I, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
(amounts in thousands, except per share data)
December 31, 2023
Portfolio Company(3)(7) |
|
Industry |
|
Spread Above Index |
|
Interest |
|
|
Maturity |
|
Principal |
|
|
Amortized |
|
|
Fair |
|
|
Percentage |
|
|||||
Debt Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
First Lien Senior Secured(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
190 Octane Financing - Delayed Draw Loan (8) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
% |
||||||
190 Octane Financing - Revolving Credit Line (4)(8) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
190 Octane Financing - Term Loan (8) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Abea Acquisition, Inc. - Delayed Draw Loan |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Abea Acquisition, Inc. - Term Loan |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
AccessOne Medcard, Inc. - Term Loan |
|
Health Care Technology |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
ACT Acquisition - Delayed Draw Term Loan (4) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
ACT Acquisition - Revolving Credit Line (4) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
ACT Acquisition - Term Loan (8) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Aurora Solutions LLC - Delayed Draw Loan (4)(8) |
|
Diversified Financials |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Aurora Solutions LLC - Revolving Credit Line (4)(8) |
|
Diversified Financials |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Aurora Solutions LLC - Term Loan (8) |
|
Diversified Financials |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Batteries Plus Holding Corporation - Revolving Credit Line (4)(8) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
Batteries Plus Holding Corporation - Term Loan (8) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
BKH - Delayed Draw Term Loan (4)(8) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
BKH - Term Loan (8) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Bradford Health Services - Delayed Draw Term Loan (8) |
|
Health Care Providers & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Bradford Health Services - Term Loan (8) |
|
Health Care Providers & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Cardiovascular Logistics - Delayed Draw Term Loan A (8) |
|
Health Care Providers & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Cardiovascular Logistics - Delayed Draw Term Loan B (4)(8) |
|
Health Care Providers & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Cardiovascular Logistics - Term Loan (8) |
|
Health Care Providers & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
CheckedUp - Delayed Draw Term Loan (4)(8) |
|
Technology Hardware & Equipment |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
CheckedUp - Revolving Credit Line (4)(8) |
|
Technology Hardware & Equipment |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
CheckedUp - Term Loan (8) |
|
Technology Hardware & Equipment |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
CreditAssociates, LLC - Revolving Credit Line (4) |
|
Diversified Financials |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
CreditAssociates, LLC - Term Loan |
|
Diversified Financials |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Educators Publishing Service - Revolving Credit Line (4) |
|
Media |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
% |
|||||
Educators Publishing Service - Term Loan |
|
Media |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Fiesta Holdings - Revolving Credit Line (4)(8) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
Fiesta Holdings - Term Loan (8) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Firebirds - Delayed Draw Term Loan (4)(8) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
Firebirds - Revolving Credit Line (4)(8) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Firebirds - Term Loan (8) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Hasa - Delayed Draw Loan (4)(8)(9) |
|
Capital Goods |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
Hasa - Revolving Credit Line (4)(8)(9) |
|
Capital Goods |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Hasa - Term Loan (8)(9) |
|
Capital Goods |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Kemper Sports Management - Delayed Draw Loan (4)(8) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Kemper Sports Management - Revolving Credit Line (4)(8)(9) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
Kemper Sports Management - Term Loan (8) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Kent Water Sports Holdings, LLC - Delayed Draw Loan Last-Out (10)(11)(12) |
|
Consumer Durables & Apparel |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Kent Water Sports Holdings, LLC - Delayed Draw Loan First-Out (10)(11)(12) |
|
Consumer Durables & Apparel |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
MerchantWise Solutions, LLC - Delayed Draw Loan (4) |
|
Software & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
MerchantWise Solutions, LLC - Revolving Credit Line (4) |
|
Software & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
MerchantWise Solutions, LLC - Term Loan (4) |
|
Software & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Mollie Funding II LLC - Delayed Draw Loan (1)(4)(8) |
|
Diversified Financials |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Mollie Funding II LLC - Revolving Credit (1)(4)(8) |
|
Diversified Financials |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Mollie Funding II LLC - Term Loan (1)(8) |
|
Diversified Financials |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Narcote, LLC - Revolving Credit Line (1)(4)(8) |
|
Industrials |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Narcote, LLC - Term Loan (1)(8) |
|
Industrials |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Narcote, LLC - Term Loan (1)(8) |
|
Industrials |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
National Debt Relief - Delayed Draw Loan (8) |
|
Diversified Financials |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
National Debt Relief - Revolving Credit Line (4)(8) |
|
Diversified Financials |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
National Debt Relief - Term Loan (8) |
|
Diversified Financials |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Nuspire, LLC - Revolving Credit Line (4)(8) |
|
Software & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
Nuspire, LLC - Term Loan (8) |
|
Software & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Oak Dental - Delayed Draw Term Loan (4)(8) |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
)% |
|||
Oak Dental - Revolving Credit Line (4)(8) |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Oak Dental - Term Loan (8) |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
OAO Acquisitions - Delayed Draw Term Loan (4) |
|
Capital Goods |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
OAO Acquisitions - Revolving Credit Line (4) |
|
Capital Goods |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
OAO Acquisitions - Term Loan |
|
Capital Goods |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
OneCare Media, LLC - Revolving Credit Line (4) |
|
Media |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
OneCare Media, LLC - Term Loan A |
|
Media |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
OneCare Media, LLC - Term Loan B |
|
Media |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
OneCare Media, LLC - Term Loan C |
|
Media |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
OneCare Media, LLC - Term Loan D |
|
Media |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Peak Technologies - Term Loan |
|
Technology Hardware & Equipment |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
PJW Ultimate Holdings LLC - Delayed Draw Term Loan |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
PJW Ultimate Holdings LLC - Revolving Credit Line (4) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
9
COMMONWEALTH CREDIT PARTNERS BDC I, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
(amounts in thousands, except per share data)
December 31, 2023
Portfolio Company(3)(7) |
|
Industry |
|
Spread Above Index |
|
Interest |
|
|
Maturity |
|
Principal |
|
|
Amortized |
|
|
Fair |
|
|
Percentage |
|
|||||
PJW Ultimate Holdings LLC - Term Loan |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Planet DDS - Delayed Draw Loan (4)(8)(9) |
|
Health Care Technology |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Planet DDS - Term Loan (8)(9) |
|
Health Care Technology |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Raven Engineered Films, Inc. - Revolving Credit Line (4)(8) |
|
Industrials |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
Raven Engineered Films, Inc. - Term Loan (8) |
|
Industrials |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Rushmore Intermediate - Delayed Draw Loan |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Rushmore Intermediate - Delayed Draw Loan 2nd Amend (4) |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Rushmore Intermediate - Revolving Credit Line (4) |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
||||
Rushmore Intermediate - Term Loan |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Rushmore Intermediate - Term Loan B |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
S4T Holdings Corp. - Delayed Draw Loan (8) |
|
Commercial & Professional Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
S4T Holdings Corp. - Term Loan (8) |
|
Commercial & Professional Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Select Rehabilitation - Term Loan (8) |
|
Health Care Providers & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
The Smilist Management, Inc. - Delayed Draw Loan A |
|
Health Care Providers & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
The Smilist Management, Inc. - Delayed Draw Loan B |
|
Health Care Providers & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
The Smilist Management, Inc. - Delayed Draw Loan c |
|
Health Care Providers & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
The Smilist Management, Inc. - Revolving Credit Line |
|
Health Care Providers & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
The Smilist Management, Inc. - Term Loan |
|
Health Care Providers & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
VardimanBlack Holdings LLC - Delayed Draw Loan (8)(10) |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
VardimanBlack Holdings LLC - Delayed Draw Loan 1st Amend (8)(10) |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
VardimanBlack Holdings LLC - Term Loan (8)(10) |
|
Health Care Equipment & Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Vecta Environmental Services - Delayed Draw Term Loan (4)(8) |
|
Commercial & Professional Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
)% |
|||
Vecta Environmental Services - Revolving Credit Line (4)(8) |
|
Commercial & Professional Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Vecta Environmental Services - Term Loan (8) |
|
Commercial & Professional Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
VENU+ - Revolving Credit Line (4)(8) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
VENU+ - Term Loan (8) |
|
Consumer Services |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
West Creek Financial SPV- Debt Facility VI - Delayed Draw Term Loan (4)(8) |
|
Diversified Financials |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
West Creek Financial SPV- Debt Facility VI - Revolving Credit Line (1)(8) |
|
Diversified Financials |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
West Creek Financial SPV- Debt Facility VI - Term Loan (1)(8) |
|
Diversified Financials |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Whitestone Home Furnishings, LLC - Term Loan |
|
Consumer Durables & Apparel |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Wilnat, Inc. - Revolving Credit Line (4) |
|
Capital Goods |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
% |
|||||
Wilnat, Inc. - Term Loan |
|
Capital Goods |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Wilnat, Inc. - Term Loan B |
|
Capital Goods |
|
SOFR + |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
% |
||||||
Total First Lien Senior Secured |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
Total Debt Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Preferred Equity(6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Atlas US Holdings, LP - class X preferred |
|
Diversified Financials |
|
|
|
|
NA |
|
|
|
|
$ |
|
|
$ |
|
|
|
% |
|||||||
Atlas US Holdings, LP - class B-2 units |
|
Diversified Financials |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
Educators Publishing Service - Series A-1 Preferred Units |
|
Media |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
Kent Water Sports Holdings, LLC - Preferred Stock (9)(10)(11)(12) |
|
Consumer Durables & Apparel |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
TVG OCM III (FT) Blocker, LLC - Class B Units |
|
Media |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
Total Preferred Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Common Equity(6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
190 Octane Holdings, LLC - series A-1 units (9) |
|
Consumer Services |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
$ |
|
|
$ |
|
|
|
% |
|||||
Cardiovascular Logistics - Class O2 Units |
|
Health Care Providers & Services |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
CTM Group - Class A-1 Units |
|
Consumer Services |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
Firebirds - Class A Units |
|
Consumer Services |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
Firebirds - Class B Units |
|
Consumer Services |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
Kemper Sports Management Holdings LLC Equity (9) |
|
Consumer Services |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
Kent Water Sports Holdings, LLC - Common Stock (9)(10)(11)(12) |
|
Consumer Durables & Apparel |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
Oak Dental - Class C Units (9) |
|
Health Care Equipment & Services |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
Rushmore Lender Co-Invest Blocker, LLC - Common Stock |
|
Health Care Equipment & Services |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
Vistria ESS Holdings, LLC - Equity |
|
Commercial & Professional Services |
|
NA |
|
NA |
|
|
NA |
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
Total Common Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
Total Equity Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
Total Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
% |
|||||
Liabilities in Excess of Other Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
)% |
|||
10
COMMONWEALTH CREDIT PARTNERS BDC I, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
(amounts in thousands, except per share data)
December 31, 2023
Portfolio Company(3)(7) |
|
Industry |
|
Spread Above Index |
|
Interest |
|
|
Maturity |
|
Principal |
|
|
Amortized |
|
|
Fair |
|
|
Percentage |
|
||
Net Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
% |
||
The following table shows the portfolio composition by industry grouping based on fair value at December 31, 2023:
|
|
At December 31, 2023 |
|
|||||
|
|
Investments at |
|
|
Percentage of |
|
||
Industry |
|
Fair Value |
|
|
Total Portfolio |
|
||
Consumer Services |
|
$ |
|
|
|
% |
||
Diversified Financials |
|
|
|
|
|
|
||
Health Care Providers & Services |
|
|
|
|
|
|
||
Health Care Equipment & Services |
|
|
|
|
|
|
||
Commercial & Professional Services |
|
|
|
|
|
|
||
Technology Hardware & Equipment |
|
|
|
|
|
|
||
Capital Goods |
|
|
|
|
|
|
||
Media |
|
|
|
|
|
|
||
Industrials |
|
|
|
|
|
|
||
Health Care Technology |
|
|
|
|
|
|
||
Consumer Durables & Apparel |
|
|
|
|
|
|
||
Software & Services |
|
|
|
|
|
|
||
|
|
$ |
|
|
|
% |
||
The accompanying notes are an integral part of these consolidated financial statements.
11
COMMONWEALTH CREDIT PARTNERS BDC I, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages, and as otherwise indicated)
June 30, 2024
(Unaudited)
Note 1—Organization
Commonwealth Credit Partners BDC I, Inc. (“we”, “us”, “our”, or the “Company”) is an externally managed, non-diversified, closed-end management investment company that has elected to be regulated as a business development company (a “BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”), and has elected to be treated for U.S. federal income tax purposes, and intends to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). The Company was formed on January 15, 2021 (“Inception Date”) as a Delaware corporation. The Company commenced investment operations on August 17, 2021.
The Company is managed by Commonwealth Credit Advisors LLC (the “Investment Adviser”), a Delaware limited liability company and an affiliate of Comvest Capital Advisors LLC, Comvest Credit Advisors LLC and Comvest Credit Managers, LLC (collectively “Comvest Partners”). The Investment Adviser is registered as an investment adviser under the Investment Advisers Act of 1940, as amended. The Investment Adviser oversees the management of the Company’s activities and is responsible for making investment decisions with respect to the Company’s portfolio.
The Company’s investment objective is to generate both current income and capital appreciation by investing in middle-market companies in a wide range of industries primarily structured as senior credit facilities, and to a lesser extent, junior credit facilities. The Company also may purchase interests in loans through secondary market transactions.
The Company conducted private placements of shares of its common stock, par value $
The Company has established CCP BDC Blocker I, LLC, CCP BDC Blocker II, LLC, and CCP Blocker III, LLC, wholly-owned direct subsidiaries. These subsidiaries allow the Company to hold equity securities of portfolio companies organized as a pass-through entity while continuing to satisfy the requirements of a RIC under the Code.
On February 7, 2022, the Company established CCP BDC California LLC, a California limited liability company that is a disregarded entity for tax purposes, which has been established to acquire investments in the State of California, as required by California law. Prior to February 7, 2022 and through this date, financial information presented represents Commonwealth Credit Partners BDC I, Inc. only.
Note 2—Summary of Significant Accounting Policies
Basis of Presentation
The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. (“GAAP”). The Company is an investment company following accounting and reporting guidance in Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 946, Financial Services—Investment Companies (“ASC 946”). The Company consolidates its wholly-owned direct subsidiaries, CCP BDC Blocker I, LLC, CCP BDC Blocker II, LLC, CCP Blocker III, LLC, and CCP BDC California LLC.
The Company’s consolidated financial statements reflect all adjustments and reclassifications which, in the opinion of management, are necessary for the fair presentation of the results of operations and financial condition for the periods presented. All intercompany transactions have been eliminated. Revenues are recognized when earned and expenses when incurred. The financial results of the Company’s portfolio investments are not consolidated in the financial statements.
The Company’s consolidated interim financial statements are prepared in accordance with GAAP and pursuant to the requirements for reporting on Form 10-Q and Article 6 of Regulation S-X. Accordingly, the Company’s consolidated interim financial
12
statements do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, the consolidated financial statements reflect all adjustments and reclassifications consisting solely of normal accruals that are necessary for the fair presentation of financial results as of and for the periods presented. The unaudited interim consolidated financial statements and notes thereto should be read in conjunction with the financial statements and notes thereto in the Company’s Form 10-K for the year ended December 31, 2023, as filed with the U.S. Securities and Exchange Commission (the “SEC”).
The Company reclassified certain industry groupings of its portfolio companies presented in the accompanying consolidated financial statements as of June 30, 2024 to align with the recently updated Global Industry Classification Standards (“GICS”), where applicable. These reclassifications had no impact on the Consolidated Statement of Assets and Liabilities as of June 30, 2024.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in these consolidated financial statements. Actual results could differ from those estimates.
Valuation of Portfolio Investments
The Investment Adviser applies fair value accounting in accordance with GAAP. Fair value is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Investments are reflected on the Company’s Consolidated Statements of Assets and Liabilities at fair value, with changes in unrealized gains and losses resulting from changes in fair value reflected in the Company’s Consolidated Statements of Operations as “Net change in unrealized gains (losses) of investments” and realizations of portfolio investments reflected in the Company’s Consolidated Statements of Operations as “Net realized gains (losses) on investments”.
The Investment Adviser values the Company’s portfolio investments on a quarterly basis, or more frequently if required under the 1940 Act. For purposes of the 1940 Act, the Company’s board of directors (“Board”) has designated the Investment Adviser as the Company’s “valuation designee” under Rule 2a-5 under the 1940 Act. The Board provides oversight of the Investment Adviser’s fair value determinations of the Company’s portfolio investments on a quarterly basis in good faith, including investments that are not publicly traded and those whose market prices are not readily available. Security transactions are accounted for on a trade date basis.
Given that the Company's assets are currently treated as "plan assets" under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and Section 4975 of the Code, one or more independent valuation firms (each a “Valuation Agent”) will be engaged to independently value the Company’s investments, in consultation with the Investment Adviser. The Company’s quarterly valuation procedures, which are the procedures that will be followed by such Valuation Agent to the extent the Company’s assets are treated as "plan assets" under ERISA and/or Section 4975 of the Code, are set forth in more detail below:
a) Bond quotes are obtained through independent pricing services. Internal reviews are performed by the personnel of the Valuation Agent, in consultation with the investment professionals of the Investment Adviser, to ensure that the quote obtained is representative of fair value in accordance with GAAP and if so, the quote is used. If the Valuation Agent is unable to sufficiently validate the quote(s) internally and if the investment’s par value exceeds a certain materiality threshold, the investment is valued similarly to those assets with no readily available quotes (see (3) below); and
b) For investments other than bonds, the personnel of the Valuation Agent, in consultation with the investment professionals of the Investment Adviser, look at the number of quotes readily available and perform the following:
i) Investments for which two or more quotes are received from a pricing service are valued using the mean of the mean of the bid and ask of the quotes obtained. If quotes from pricing services differ by +/- five points or if the spread between the bid and ask for a quote is greater than 10 points, the personnel of the Valuation Agent, in consultation with the investment professionals of the Investment Adviser, will evaluate the reasonableness of the quote, and if the quote is determined to not be representative of fair value, the personnel of the Valuation Agent, in consultation with the investment professionals of the Investment Adviser, will use one or more of the methodologies outlined below to determine fair value;
13
ii) Investments for which one quote is received from a pricing service are validated by the Valuation Agent, in consultation with the investment professionals of the Investment Adviser. The personnel of the Valuation Agent, in consultation with the investment professionals of the Investment Adviser, analyze the market quotes obtained using an array of valuation methods (further described below) to validate the fair value. For assets where a supporting analysis is prepared, the Valuation Agent will document the selection and appropriateness of the indices selected for yield comparison and a conclusion documenting how the yield comparison analysis supports the proposed mark. The quarterly portfolio company monitoring reports which detail the qualitative and quantitative performance of the portfolio company will also be included. If the Valuation Agent, in consultation with the investment professionals of the Investment Adviser, is unable to sufficiently validate the quote internally and if the investment’s par value exceeds a certain materiality threshold, the investment is valued similarly to those assets with no readily available quotes (see (3) below).
a) Each portfolio company or investment is initially valued by the personnel of the Valuation Agent, in consultation with the investment professionals of the Investment Adviser; and
b) Preliminary valuation conclusions will then be documented and discussed with our senior management.
For investments in revolving credit facilities and delayed draw commitments, the cost basis of the funded investments purchased is offset by any costs/netbacks received for any unfunded portion on the total balance committed. The fair value is also adjusted for the price appreciation or depreciation on the unfunded portion. As a result, the purchase of commitments not completely funded may result in a negative fair value until it is called and funded.
The values assigned to investments are based upon available information and do not necessarily represent amounts which might ultimately be realized, since such amounts depend on future circumstances and cannot be reasonably determined until the individual positions are liquidated. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period and the fluctuations could be material.
In the event Benefit Plan Investors do not hold
For all valuations, the Valuation Committee of the Board, which consists solely of directors who are not “interested persons” of the Company, as such term is used under the 1940 Act (the “Independent Directors”), will review these preliminary valuations and the Board, a majority of whom are Independent Directors, will discuss the Investment Adviser’s valuations; provided, however, that to the extent the Company’s assets are treated as “plan assets” under ERISA, and/or Section 4975 of the Code, the Valuation Agent will determine valuations using only those valuation methodologies reviewed and approved by the Valuation Committee and the Board, and, absent manifest error, the Board will accept such valuations prepared by the Valuation Agent in accordance therewith.
Investment Classification
The Company classifies its investments in accordance with the requirements of the 1940 Act. Under the 1940 Act, “Control” is defined as the power to exercise a controlling influence over the management or policies of a company, unless such power is solely the result of an official position with such company.
14
Cash and Cash Equivalents
Cash and cash equivalents include cash held in banks and short-term, liquid investments in a money market deposit account. Cash and cash equivalents are carried at cost which approximates fair value. The Company deposits at financial institutions for its cash and cash equivalents may exceed FDIC insured limits under applicable law.
The Company considers all highly liquid investments with a maturity of three months or less, when acquired, to be cash equivalents. As of June 30, 2024 and December 31, 2023, the Company held cash and cash equivalents in the form of money market fund shares held in First American Government Obligations Fund with a fair value of $
Organizational Expenses and Offering Costs
Organizational expenses consist of costs incurred to establish the Company and enable it legally to do business. Organization costs are expensed as incurred. Offering costs consist of costs incurred in connection with the offering of Common Stock of the Company. Offering costs are capitalized as a deferred charge and amortized to expense on a straight-line basis over 12 months from the inception date. There were
The Company bears the organizational expenses and offering costs incurred in connection with the formation of the Company and the offering of shares of its Common Stock, including the out-of-pocket expenses of the Investment Adviser and its agents and affiliates. In addition, the Company reimburses the Investment Adviser for the organizational expenses and offering costs it incurs on the Company’s behalf. For the period from the Inception Date through June 30, 2024, the Company had incurred $
Deferred Financing Costs
Financing costs incurred in connection with the Company’s credit facilities are capitalized and amortized into expense using the straight-line method, which approximates the effective yield method over the life of the respective facility. See Note 6—Borrowings.
Revenue Recognition
Interest Income
Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis. Discount and premium on investments purchased are accreted/amortized over the expected life of the respective investment using the effective yield method. Loan origination fees, original issue discount (“OID”) and market discounts or premiums are capitalized and amortized into interest income using the effective interest method. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized upfront loan origination fees and unamortized discounts are recorded as interest income. The Company may have loans in its portfolio that contain a payment-in-kind (“PIK”) interest provision. PIK interest is accrued and recorded as income at the contractual rates, if deemed collectible. The PIK interest is added to the principal balance on the capitalization date and is generally due at maturity or when deemed by the issuer. For the three months ended June 30, 2024 and 2023, the Company recognized PIK interest from investments of $
Fee Income
Fee income, such as structuring fees, loan monitoring, amendment, syndication, commitment, termination, and other loan fees are recognized as income when earned, either upon receipt or amortized into fee income. Upon the re-payment of a loan or debt security, any prepayment penalties and unamortized loan fees are recorded as fee income.
Non-accrual
Investments may be placed on non-accrual status when principal or interest payments are past due and/or when there is reasonable doubt that principal or interest will be collected. Accrued interest is generally reversed when an investment is placed on non-accrual status. Interest payments received on non-accrual investments may be recognized as income or applied to principal
15
depending upon management’s judgment of the ultimate outcome. Non-accrual investments are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current.
Net Realized Gain or Loss and Net Change in Unrealized Gain or Loss
Investment transactions are accounted for on the trade date. Gain or loss on the sale of investments is calculated using the specific identification method. Net change in unrealized gain or loss will reflect the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized gain or loss, when a gain or loss is realized.
Income Taxes
The Company has elected to be treated for federal income tax purposes as a RIC under Subchapter M of the Code. Generally, a corporation can qualify as a RIC if it distributes dividends for federal income tax purposes to stockholders in an amount generally equal to at least
The Company evaluates tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether it is “more-likely-than-not” (i.e., greater than
Recent Accounting Standards Update
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280), which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023 and interim period within fiscal years beginning after December 15, 2024. The Company does not expect this guidance to impact its consolidated financial statements.
Note 3—Fair Value of Financial Instruments
Fair value is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosure (“ASC 820”) establishes a fair value hierarchy that prioritizes and ranks the inputs to valuation techniques used in measuring investments at fair value. The hierarchy classifies the inputs used in measuring fair value into three levels as follows:
The determination of where an asset or liability falls in the above hierarchy requires significant judgment and factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Investment Adviser evaluates its hierarchy disclosures
16
each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter.
Determinations of fair value involve subjective judgments and estimates. Accordingly, the notes to the consolidated financial statements refer to the uncertainty with respect to the possible effect of such valuations, and any change in such valuations on the consolidated financial statements.
The following table presents fair value measurements of investments, by major class, as of June 30, 2024, according to the fair value hierarchy:
|
|
Fair Value Measurements |
|
|||||||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Totals |
|
||||
First Lien Senior Secured |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The following table presents fair value measurements of investments, by major class, as of December 31, 2023, according to the fair value hierarchy:
|
|
Fair Value Measurements |
|
|||||||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Totals |
|
||||
First Lien Senior Secured |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
17
The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the six months ended June 30, 2024:
|
|
First Lien |
|
|
Equity |
|
|
Total |
|
|||
Balance as of December 31, 2023 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Purchases and other adjustments to cost |
|
|
|
|
|
|
|
|
|
|||
Sales and repayments |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Transfers in (a) |
|
|
|
|
|
|
|
|
|
|||
Transfers out (a) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Net realized gain/(loss) on investments |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Net change in unrealized gain/(loss) on investments |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Net accretion of discount on investments |
|
|
|
|
|
— |
|
|
|
|
||
Balance as of June 30, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Net change in gain/loss for the period relating to those Level 3 assets that were still held by the Company at the end of the period: |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
(a)
The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the six months ended June 30, 2023:
|
|
First Lien |
|
|
Equity |
|
|
Total |
|
|||
Balance as of December 31, 2022 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Purchases and other adjustments to cost |
|
|
|
|
|
|
|
|
|
|||
Sales and repayments |
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
Net change in unrealized gain/(loss) on investments |
|
|
|
|
|
( |
) |
|
|
|
||
Net accretion of discount on investments |
|
|
|
|
|
- |
|
|
|
|
||
Balance as of June 30, 2023 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Net change in gain/loss for the period relating to those Level 3 assets that were still held by the Company at the end of the period: |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Purchases represent the acquisition of new investments at cost. Sales and repayments represent principal payments received during the period. For the three and six months ended June 30, 2024 and 2023, there were
Significant Unobservable Inputs
The following table summarizes the significant unobservable inputs used to value Level 3 investments as of June 30, 2024. The table is not intended to be all-inclusive, but instead identifies the significant unobservable inputs relevant to the determination of fair values.
|
|
|
|
|
|
|
|
|
Selected Input Range |
|
|
|||
Asset Category |
|
Fair Value |
|
|
Primary Valuation |
|
Unobservable |
|
Minimum |
|
Maximum |
|
Weighted |
|
First Lien Senior Secured |
|
$ |
|
|
Discounted Cash Flow |
|
Discount Rate |
|
|
|
||||
First Lien Senior Secured |
|
|
|
|
Market Comparables |
|
EBITDA Multiple |
|
|
|
||||
Equity |
|
|
|
|
Market Comparables |
|
Revenue Multiple |
|
|
|
||||
Equity |
|
|
|
|
Market Comparables |
|
EBITDA Multiple |
|
|
|
||||
Total |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
18
The following table summarizes the significant unobservable inputs used to value Level 3 investments as of December 31, 2023. The table is not intended to be all-inclusive, but instead identifies the significant unobservable inputs relevant to the determination of fair values.
|
|
|
|
|
|
|
|
|
Selected Input Range |
|
|
|||
Asset Category |
|
Fair Value |
|
|
Primary Valuation |
|
Unobservable |
|
Minimum |
|
Maximum |
|
Weighted |
|
First Lien Senior Secured |
|
$ |
|
|
Discounted Cash Flow |
|
Discount Rate |
|
|
|
||||
First Lien Senior Secured |
|
|
|
|
Market Comparables |
|
EBITDA Multiple |
|
|
|
||||
Equity |
|
|
|
|
Market Comparables |
|
Revenue Multiple |
|
|
|
||||
Equity |
|
|
|
|
Market Comparables |
|
EBITDA Multiple |
|
|
|
||||
Total |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
There were no significant changes in valuation approach or technique as of June 30, 2024 and December 31, 2023.
Level 3 inputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are included in this category include investments in privately held entities where the fair value is based on unobservable inputs.
The income and market approaches were used in the determination of fair value of certain Level 3 assets as of June 30, 2024 and December 31, 2023. The significant unobservable inputs used in the income approach are the discount rate or market yield used to discount the estimated future cash flows expected to be received from the underlying investment, which include both future principal and interest payments and any other end of term fees, as applicable. Included in the consideration and selection of discount rates are factors such as risk of default, interest rate risk, and changes in credit quality. The significant unobservable inputs used in the market approach are based on market comparable transactions and market multiples of publicly traded comparable companies. Increases or decreases in the valuation multiples in isolation may result in higher or lower fair value measurement, respectively, and increases or decreases in the discount rate in isolation may result in lower or higher fair value measurement, respectively.
As of June 30, 2024, the Company has two portfolio companies on a non-accrual status with a total cost of $
For discussion of the fair value measurement of the Company’s borrowings, refer to Note 6—Borrowings.
Note 4—Related Party Transactions
Investment Advisory Agreement
On June 29, 2023, the Company entered into an amended and restated investment advisory and management agreement (the “Amended and Restated Investment Advisory Agreement”) with the Investment Adviser, following the approval of the Amended and Restated Investment Advisory Agreement by the Company’s stockholders by unanimous written consent on June 29, 2023. The terms of the Amended and Restated Investment Advisory Agreement became effective on July 1, 2023 and did not impact Management Fees (as defined below) paid in prior periods. The Amended and Restated Investment Advisory Agreement, among other things, clarified the methodology for calculating the Management Fee payable to the Investment Adviser during and after the Investment Period (as defined in the Amended and Restated Investment Advisory Agreement).
Pursuant to the Amended and Restated Investment Advisory Agreement with the Investment Adviser, the Company pays the Investment Adviser a fee for its services under the Amended and Restated Investment Advisory Agreement consisting of an annual base management fee (“Management Fee”) and an incentive management fee (the “Incentive Fee”), each payable quarterly.
Operating Advisory Group, LLC (“OAG”), is a consulting firm that exclusively provides management consulting services, substantially all of which are provided to portfolio companies of Comvest Partners’ affiliated funds investing in a control equity strategy. An affiliate of the Investment Adviser also engages OAG to provide assistance with certain discrete diligence and other matters in connection with the Company’s investing activities. For the three months ended June 30, 2024 and 2023, OAG charged $
19
addition, for the six months ended June 30, 2024 and 2023, OAG charged $
Management Fee
During the Investment Period, the Management Fee is calculated at an annual rate of
After the Investment Period, the Management Fee will be calculated at an annual rate of
Any Management Fees payable pursuant to the Amended and Restated Investment Advisory Agreement will be calculated based on the Company’s Adjusted Average Assets Invested in respect of the most recently completed calendar quarter. Management Fees for any partial quarter will be appropriately prorated. For the avoidance of doubt, the quarterly Management Fees payable to the Investment Adviser shall be calculated based on the lower of the actual Adjusted Average Assets Invested as of the end of any quarter and the target Adjusted Average Assets Invested for that quarter, as specifically set forth in the table below:
The table set forth below shows the following quarterly fee percentages shall be payable with respect to the Company’s Target Adjusted Average Assets through the end of the Investment Period:
Quarter Ending |
|
Quarter |
|
|
Target Adjusted |
|
|
Quarterly |
|
|
Quarterly Dollar |
|
||||
|
|
1 |
|
|
$ |
|
|
|
% |
|
$ |
|
||||
|
|
2 |
|
|
$ |
|
|
|
% |
|
$ |
|
||||
|
|
3 |
|
|
$ |
|
|
|
% |
|
$ |
|
||||
|
|
4 |
|
|
$ |
|
|
|
% |
|
$ |
|
||||
|
|
5 |
|
|
$ |
|
|
|
% |
|
$ |
|
||||
|
|
6 |
|
|
$ |
|
|
|
% |
|
$ |
|
||||
|
|
7 |
|
|
$ |
|
|
|
% |
|
$ |
|
||||
|
|
8 |
|
|
$ |
|
|
|
% |
|
$ |
|
||||
|
|
9 |
|
|
$ |
|
|
|
% |
|
$ |
|
||||
|
|
10 |
|
|
$ |
|
|
|
% |
|
$ |
|
||||
|
|
11 |
|
|
$ |
|
|
|
% |
|
$ |
|
||||
|
12 and beyond 3 |
|
|
$ |
|
|
|
% |
|
$ |
|
|||||
20
For the three and six months ended June 30, 2024, the Company incurred $
There were
Incentive Fee
If, as of the last day of the relevant quarter, the Company’s Total Return (as defined below) in respect of the relevant Measurement Period (as defined below) equals or exceeds the “Hurdle Amount” (as defined below), which represents an annualized total return of
If, as of the last day of the relevant quarter, the Company’s Total Return in respect of the relevant Measurement Period is less than the Hurdle Amount, the Investment Adviser shall not receive the Incentive Fee in respect of the relevant quarter.
“Total Return” means the sum of the Company’s net investment income with legal and other expenses incurred in connection with the Company’s formation and organization and the offering of its shares (“Organizational Expenses”) amortized ratably over a three-year period for the purposes of this calculation) in respect of the relevant Measurement Period and the Company’s realized and unrealized capital gains less realized and unrealized capital losses in respect of the relevant Measurement Period.
For the avoidance of doubt, the Total Return calculation will not take into account the deduction of the
“Hurdle Amount” means
“Drawn Capital Commitments” means the simple average of the drawn Capital Commitments as of the last business day of each month included in the relevant quarterly period.
“Measurement Period” means the period from the Company’s inception date through the end of the most recently completed calendar quarter.
“Incentive Fee Average Assets Invested” during the Investment Period means (a) the average of the sum of the Company’s (i) Drawn Capital Commitments and (ii) the aggregate dollar amount of distributions issued to stockholders in-kind pursuant to the Company’s DRIP as of the latest declaration date of any such distribution, excluding any amounts of such distribution received in cash by stockholders that have opted out of the DRIP, and (iii) outstanding principal on borrowings, in the case of clause (i) and (iii), as of the last business day of each month included in the Measurement Period less (b) the Company’s net realized and unrealized losses, if any. After the Investment Period, Incentive Fee Average Assets Invested means (a) the fair value of the Company’s investments, as of the last business day of each month included in the relevant quarterly period less (b) the sum of the Company’s cumulative net realized and unrealized losses, if any, as of the last business day of the relevant quarter.
For the three and six months ended June 30, 2024, the Company incurred $
There were
21
Administration Agreement
We have entered into an administration agreement (the “Administration Agreement”) with Commonwealth Credit Advisors LLC, a Delaware limited liability company (in such capacity, the “Administrator”), under which the Administrator provides administrative services for us, including arranging office facilities for us and providing office equipment and clerical, bookkeeping and recordkeeping services at such facilities. Under the Administration Agreement, the Administrator also performs, or oversees the performance of, our required administrative services, which includes being responsible for the financial records which we are required to maintain and preparing reports to our stockholders and reports filed with the SEC and providing the services of our chief financial officer and their respective staffs. In addition, the Administrator will assist us in determining and in publishing our net asset value, overseeing the preparation and filing of tax returns and the preparation and dissemination of reports to our Stockholders, and generally overseeing the payment of our expenses and the performance of administrative and professional services rendered to us by others. The Administrator may also provide on our behalf managerial assistance to our portfolio companies.
The Administrator has hired a third-party sub-administrator (the "Sub-Administrator") to assist with the provision of administration services. For the three months ended June 30, 2024 and 2023, the Company incurred $
Co-Investment Relief
The 1940 Act generally prohibits BDCs from entering into negotiated co-investments with affiliates absent an order from the SEC. On August 2, 2021, the SEC granted the Company exemptive relief (the “Order”) that allows it to enter into certain negotiated co-investment transactions alongside other funds managed by the Adviser or its affiliates (“Affiliated Funds”) in a manner consistent with its investment objective, positions, policies, strategies, and restrictions as well as regulatory requirements and other pertinent factors, subject to compliance with the conditions of the Order. Pursuant to the Order, the Company is permitted to co-invest with its affiliates if, among other things, a “required majority” (as defined in Section 57(o) of the 1940 Act) of the Company’s Independent Directors make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transactions, including the consideration to be paid, are reasonable and fair to the Company and the Company’s stockholders and do not involve overreaching in respect of the Company or the Company’s stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of the Company’s stockholders and is consistent with the Company’s investment objective and strategies. On August 16, 2023, the Company filed an application for an order to amend the Order pursuant to Sections 17(d) and 57(i) of the 1940 Act and Rule 17d-1 thereunder, permitting certain joint transactions otherwise prohibited by Sections 17(d) and 57(a)(4) of the 1940 Act.
Note 5—Transactions with Affiliated Investments
An affiliated investment is an investment in which the Company has an ownership interest of
Portfolio Company |
|
Type of Asset |
|
Amount of interest included in income |
|
|
Beginning Fair Value at December 31, 2023 |
|
|
Gross additions* |
|
|
Gross reductions** |
|
|
Realized Gain/(Loss) |
|
|
Change in Unrealized Gain (Loss) |
|
|
Fair Value at June 30, 2024 |
|
|
|||||||
Affiliated investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Kent Water Sports Holdings, LLC - Delayed Draw Loan Last-Out |
|
First Lien Senior Secured |
|
$ |
- |
|
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
( |
) |
|
$ |
|
|
|||
Kent Water Sports Holdings, LLC - Delayed Draw Loan First-Out |
|
First Lien Senior Secured |
|
|
- |
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
||||
Kent Water Sports Holdings, LLC |
|
Preferred Equity |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Kent Water Sports Holdings, LLC |
|
Common Equity |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Total Affiliated Investments |
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
( |
) |
|
$ |
|
|
|||
22
*
** Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, the exchange of one or more existing securities for one or more new securities, and the movement of an existing portfolio company out of this category into a different category.
Goldman Credit Facility
On August 11, 2021, the Company entered into a Credit Agreement (the "Goldman Credit Facility") as the borrower and Goldman Sachs Bank USA (“Goldman Sachs”) as the lender. The Goldman Credit Facility is structured as a revolving credit facility secured by the capital commitments of the Company’s subscribed investors and certain related assets. On September 27, 2021, the Credit Agreement was amended, pursuant to which the maximum loan amount was increased to the lesser of $
The Goldman Credit Facility is uncommitted and matures on the earlier of (i) the date on which either the Company or lender provide written notice of termination to the other party and (ii) the date that is 30 days prior to the last date on which the Company may issue capital drawdowns to its investors. Under the Goldman Credit Facility, the Company is permitted to borrow up to the lesser of $
The weighted average annualized interest cost (excluding amortization of deferred financing costs and other fees) for all borrowings for the three months ended June 30, 2024 and 2023 was
The following table represents borrowings as of June 30, 2024:
|
|
Total Aggregate |
|
|
Total Principal |
|
|
Less Deferred |
|
|
Amount per Statements of |
|
||||
Goldman Credit Facility |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The following table represents borrowings as of December 31, 2023:
|
|
Total Aggregate |
|
|
Total Principal |
|
|
Less Deferred |
|
|
Amount per Statements of |
|
||||
Goldman Credit Facility |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The following table represents interest and debt fees for the three months ended June 30, 2024:
|
|
For the three months ended June 30, 2024 |
|
|||||||||||
|
|
Interest Rate(2) |
|
Interest |
|
|
Deferred |
|
|
Other Fees(1) |
|
|||
Goldman Credit Facility |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
23
(1)
The following table represents interest and debt fees for the six months ended June 30, 2024:
|
|
For the six months ended June 30, 2024 |
|
|||||||||||
|
|
Interest Rate(2) |
|
Interest |
|
|
Deferred |
|
|
Other Fees(1) |
|
|||
Goldman Credit Facility |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
The following table represents interest and debt fees for the three months ended June 30, 2023:
|
|
For the three months ended June 30, 2023 |
|
|||||||||||
|
|
Interest Rate(2) |
|
Interest |
|
|
Deferred |
|
|
Other Fees(1) |
|
|||
Goldman Credit Facility |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
The following table represents interest and debt fees for the six months ended June 30, 2023:
|
|
For the six months ended June 30, 2023 |
|
|||||||||||
|
|
Interest Rate(2) |
|
Interest |
|
|
Deferred |
|
|
Other Fees(1) |
|
|||
Goldman Credit Facility |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
At June 30, 2024 and December 31, 2023, the carrying amount of the Company’s secured borrowings approximated their fair value in accordance with ASC 820. As of June 30, 2024 and December 31, 2023, the Company’s borrowings would be deemed to be Level 3, as defined in Note 3—Fair Value of Financial Instruments.
Note 7—Commitments and Contingencies
Commitments
In the ordinary course of business, the Company may enter into future funding commitments. As of June 30, 2024 and December 31, 2023, the Company had unfunded commitments on delayed draw term loans and revolving credit lines of $
24
As of June 30, 2024, the Company’s unfunded commitments consisted of the following:
Portfolio Company Name |
|
Investment Type |
|
Commitment Type |
|
Unfunded |
|
|
190 Octane Financing |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
$ |
|
|
ACT Acquisition |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Allbridge |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
Allbridge |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Aurora Solutions LLC |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Batteries Plus Holding Corporation |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Billhighway |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
Billhighway |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
BKH |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
C&TDG Holding Company |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
C&TDG Holding Company |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Cardiovascular Logistics |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
CreditAssociates, LLC |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
CheckedUp |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
CheckedUp |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Discovery SL Management, LLC |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
Discovery SL Management, LLC |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Engineered Films |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Educators Publishing Service |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Fiesta Holdings |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Firebirds Intermediate Holdings I, LLC |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
Firebirds Intermediate Holdings I, LLC |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Hasa |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
Hasa |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Kemper Sports Management |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
Kemper Sports Management |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Kent Water Sports |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
MerchantWise Solutions, LLC |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
Military Retail Solutions LLC |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
Military Retail Solutions LLC |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Mollie Funding II LLC |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
Mollie Funding II LLC |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Narcote, LLC |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
OAO Acquisitions |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
OAO Acquisitions |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
OneCare Media, LLC |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Pansophic Learning |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
Pansophic Learning |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Planet DDS |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
PJW Ultimate Holdings LLC |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Rushmore Intermediate |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
Rushmore Intermediate |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Senior Support Holdings (Franchise) Acquisitions, Inc. |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
Spartan CP, LLC |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
Spartan CP, LLC |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Vardiman Black Holdings |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
Vecta Environmental Services |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Vecta Environmental Services |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
West Creek Financial SPV |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
West Creek Financial SPV |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Total |
|
|
|
|
|
$ |
|
|
25
As of December 31, 2023, the Company’s unfunded commitments consisted of the following:
Portfolio Company Name |
|
Investment Type |
|
Commitment Type |
|
Unfunded |
|
|
190 Octane Financing |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
$ |
|
|
ACT Acquisition |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
ACT Acquisition |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Aurora Solutions LLC |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Batteries Plus Holding Corporation |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
BKH |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
Cardiovascular Logistics |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
CreditAssociates, LLC |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
CheckedUp |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
CheckedUp |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Educators Publishing Service |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Fiesta Holdings |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Firebirds |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
Firebirds |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Hasa |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
Hasa |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Kemper Sports Management |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
Kemper Sports Management |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
MerchantWise Solutions, LLC |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
MerchantWise Solutions, LLC |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Mollie Funding II LLC |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
Mollie Funding II LLC |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Narcote, LLC |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
National Debt Relief |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Nuspire, LLC |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Oak Dental |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
Oak Dental |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
OAO Acquisitions |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
OAO Acquisitions |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
OneCare Media, LLC |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
PJW Ultimate Holdings LLC |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Planet DDS |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
Raven Engineered Films, Inc. |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Rushmore Intermediate |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
Rushmore Intermediate |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Vecta Environmental Services |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
Vecta Environmental Services |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Venu+ |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
West Creek Financial SPV |
|
First Lien Senior Secured |
|
Delayed Draw Loan |
|
|
|
|
Wilnat, Inc. |
|
First Lien Senior Secured |
|
Revolving Credit Line |
|
|
|
|
Total |
|
|
|
|
|
$ |
|
|
The unrealized appreciation or depreciation associated with unfunded portfolio company commitments is recorded in the financial statements and reflected as an adjustment to the valuation of the related security in the Consolidated Schedule of Investments as of June 30, 2024 and December 31, 2023. The par amount of the unfunded portfolio company commitments is not recognized by the Company until the commitment is funded.
The credit agreements of the unfunded portfolio company commitments contain customary lending provisions which are subject to the portfolio company’s achievement of certain milestones. In instances where the underlying company experiences material adverse effects that would impact the financial condition or business outlook of the company, there is relief to the Company from funding obligations for previously made commitments. Unfunded portfolio company commitments may expire without being drawn upon, and therefore, do not necessarily represent future cash requirements or future earning assets for the Company. We believe that we maintain sufficient liquidity in the form of cash, financing capacity and undrawn capital commitments from our investors to cover any outstanding unfunded portfolio company commitments we may be required to fund.
26
Litigation and Regulatory Matters
In the ordinary course of its business, the Company, our wholly-owned direct subsidiaries, the Investment Adviser and the Administrator may become subject to litigation, claims, and regulatory matters. The Company has no knowledge of material legal or regulatory proceedings pending or known to be contemplated against the Company, Investment Adviser and Administrator at this time.
Indemnifications
In the ordinary course of its business, the Company may enter into contracts or agreements that contain indemnifications or warranties. Future events could occur that lead to the execution of these provisions against the Company. Based on its history and experience, management feels that the likelihood of such an event is remote.
Note 8—Capital
Investor Commitments
As of June 30, 2024, the Company has $
Capital Drawdowns
There were
The following table summarizes the total shares issued and net proceeds (in thousands) through the DRIP for the three and six months ended June 30, 2024:
Share Issue Date |
|
Shares Issued |
|
|
Net Proceeds |
|
||
|
|
|
|
$ |
|
|||
|
|
|
|
|
|
|||
Total Shares Issued |
|
|
|
|
$ |
|
||
The following table summarizes the total shares issued and net proceeds (in thousands) related to capital drawdowns for the three and six months ended June 30, 2023:
Share Issue Date |
|
Shares Issued |
|
|
Net Proceeds |
|
||
|
|
|
|
$ |
|
|||
|
|
|
|
|
|
|||
Total Shares Issued |
|
|
|
|
$ |
|
||
The following table summarizes the total shares and net proceeds (in thousands) issued through the DRIP for the three and six months ended June 30, 2023:
Share Issue Date |
|
Shares Issued |
|
|
Net Proceeds |
|
||
|
|
|
|
$ |
|
|||
|
|
|
|
|
|
|||
Total Shares Issued |
|
|
|
|
$ |
|
||
As of June 30, 2024 and December 31, 2023,
Distributions and Dividends
Distributions declared for the three and six months ended June 30, 2024 totaled approximately $
27
The following table reflects distributions declared, per share that have been declared by our Board for the three and six months ended June 30, 2024:
Date Declared |
|
Record Date |
|
Payment Date |
|
Per Share Amount |
|
|
|
|
|
$ |
|
||||
|
|
|
$ |
|
||||
The following table reflects distributions declared, per share that have been declared by our Board for the three and six months ended June 30, 2023:
Date Declared |
|
Record Date |
|
Payment Date |
|
Per Share Amount |
|
|
|
|
|
$ |
|
||||
|
|
|
$ |
|
||||
Distributions to the Company’s stockholders are recorded on the record date as set by the Company’s Board. The Company intends to make distributions to its stockholders that will be sufficient to enable the Company to qualify and maintain its status as a RIC. The Company intends to distribute approximately all of its net investment income on a quarterly basis and substantially all of its taxable income on an annual basis, except that the Company may retain certain net capital gains for reinvestment.
The Company has adopted a DRIP that provides for reinvestment of any distributions declared on behalf of its stockholders, unless a stockholder elects to receive cash.
The Company applies the following in implementing the DRIP. The Company uses only newly-issued shares of its common stock to implement the DRIP. The number of shares issued to a stockholder that has not elected to have its distributions in cash shall be determined by dividing the total dollar amount of the distribution payable to such participant by the net asset value per share as of the last day of the Company’s fiscal quarter immediately preceding the date such distribution was declared (the “Reference NAV”); provided that in the event a distribution is declared on the last day of a fiscal quarter, the Reference NAV shall be deemed to be the net asset value per share as of such day.
Note 9—Net Assets
The following table reflects the net assets activity for the three months ended June 30, 2024:
|
|
Common |
|
|
Common |
|
|
Additional |
|
|
Total |
|
|
Total net |
|
|||||
Balance as of March 31, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Issuance of common stock, net of issuance costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Reinvestment of distributions (1) |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Distributions to stockholders |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Net investment income (loss) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Net realized gain (loss) from investment transactions |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Net change in unrealized gain (loss) on investments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance as of June 30, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
The following table reflects the net assets activity for the six months ended June 30, 2024:
|
|
Common |
|
|
Common |
|
|
Additional |
|
|
Total |
|
|
Total net |
|
|||||
Balance as of December 31, 2023 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Issuance of common stock, net of issuance costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Reinvestment of distributions (1) |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Distributions to stockholders |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Net investment income (loss) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Net realized gain (loss) from investment transactions |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Net change in unrealized gain (loss) on investments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance as of June 30, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
28
The following table reflects the net assets activity for the three months ended June 30, 2023:
|
|
Common |
|
|
Common |
|
|
Additional |
|
|
Total |
|
|
Total net |
|
|||||
Balance as of March 31, 2023 |
|
|
|
|
$ |
— |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Issuance of common stock, net of issuance costs |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Reinvestment of distributions (1) |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Distributions to stockholders |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Net investment income (loss) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Net realized gain (loss) from investment transactions |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net change in unrealized gain (loss) on investments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Balance as of June 30, 2023 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
The following table reflects the net assets activity for the six months ended June 30, 2023:
|
|
Common |
|
|
Common |
|
|
Additional |
|
|
Total |
|
|
Total net |
|
|||||
Balance as of December 31, 2022 |
|
|
|
|
$ |
— |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Issuance of common stock, net of issuance costs |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Reinvestment of distributions (1) |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Distributions to stockholders |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Net investment income (loss) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Net realized gain (loss) from investment transactions |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net change in unrealized gain (loss) on investments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Balance as of June 30, 2023 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Note 10—Earnings Per Share
Basic earnings per share is computed by dividing earnings available to common stockholders by the weighted average number of shares outstanding during the period. Other potentially dilutive shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis.
|
|
For the Three Months Ended |
|
|
For the Six Months Ended |
|
||||||||||
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
||||
Net increase (decrease) in net assets resulting from operations |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Weighted average shares of common stock outstanding—basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings (loss) per share of common stock—basic and diluted |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
29
Note 11—Financial Highlights
The following is a schedule of financial highlights for the six months ended June 30, 2024 and 2023:
|
|
For the Six Months Ended |
|
|||||
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
||
Per Common Share Operating Performance |
|
|
|
|
|
|
||
Net Asset Value, Beginning of Period |
|
$ |
|
|
$ |
|
||
Results of Operations: (1) |
|
|
|
|
|
|
||
Net Investment Income (Loss) |
|
|
|
|
|
|
||
Net Realized and Unrealized Gain (Loss) on Investments |
|
|
( |
) |
|
|
( |
) |
Net Increase (Decrease) in Net Assets Resulting from Operations |
|
|
|
|
|
|
||
Distributions to Common Stockholders |
|
|
|
|
|
|
||
Distributions from Net Investment Income |
|
|
( |
) |
|
|
( |
) |
Net Decrease in Net Assets Resulting from Distributions |
|
|
( |
) |
|
|
( |
) |
Net Asset Value, End of Period |
|
$ |
|
|
$ |
|
||
Shares Outstanding, End of Period |
|
|
|
|
|
|
||
Total Return (3) |
|
|
% |
|
|
% |
||
Net assets, end of period |
|
$ |
|
|
$ |
|
||
Ratio/Supplemental Data |
|
|
|
|
|
|
||
Weighted-average shares outstanding |
|
|
|
|
|
|
||
Ratio of net investment income (loss) to average net assets without waiver (2) |
|
|
% |
|
|
% |
||
Ratio of net investment income (loss) to average net assets with waiver (2) |
|
|
% |
|
|
% |
||
Ratio of total expenses to average net assets without waiver (2)(5) |
|
|
% |
|
|
% |
||
Ratio of total expenses to average net assets with waiver (2)(5) |
|
|
% |
|
|
% |
||
Asset Coverage Ratio (6) |
|
|
% |
|
|
% |
||
Portfolio turnover rate (4) |
|
|
% |
|
|
% |
||
Note 12 - Subsequent Events
The Company has evaluated subsequent events through the filing of this Form 10-Q and has determined that there have been no subsequent events that require recognition or disclosure in these consolidated financial statements.
30
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements of Commonwealth Credit Partners BDC I, Inc. (the “Company”) and the notes thereto and other financial information included elsewhere in this Quarterly Report on Form 10-Q. We are externally managed by our adviser, Commonwealth Credit Advisors LLC (the “Investment Adviser”).
Forward Looking Statements
Statements we may make may contain forward-looking statements, that are not historical facts and are based on current expectations, estimates, projections, opinions and/or beliefs of the Company, the Investment Adviser and/or its affiliates (collectively, “Commonwealth”). These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about us, our current and prospective portfolio investments, our industry, our beliefs, and our assumptions. Words such as “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “potential”, “project”, “seek”, “should”, “target”, “will”, “would” or variations of these words and similar expressions are intended to identify forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements for any reason, including the factors set forth in Item 1A.—Risk Factors contained in our annual report on Form 10-K for the year ended December 31, 2023 and in this quarterly report on Form 10-Q.
Forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and we assume no duty to and do not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance. The occurrence of the events described in these risk factors and elsewhere in this Form 10-Q could have a material adverse effect on our business, results of operation and financial position.
In addition to factors previously disclosed in our U.S. Securities and Exchange Commission (“SEC”) reports and those identified elsewhere in this report, including the “Risk Factors” section, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance:
31
You should not place undue reliance on these forward-looking statements. The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligations to update any forward-looking statement to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.
Overview
The Company is an externally managed, non-diversified, closed-end management investment company that has elected to be regulated as a BDC under the Investment Company Act of 1940, as amended (the “1940 Act”) and intends to elect to be treated for U.S. federal income tax purposes, and to qualify annually thereafter, as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). The Company was formed on January 15, 2021 (“Inception Date”) as a Delaware corporation. The Company commenced investment operations on August 17, 2021.
The Company is managed by the Investment Adviser, a Delaware limited liability company and an affiliate of Comvest Partners. The Investment Adviser is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940, as amended (“Advisers Act”). The Investment Adviser oversees the management of the Company’s activities and is responsible for making investment decisions with respect to the Company’s portfolio.
The Company’s investment objective is to generate both current income and capital appreciation by investing in middle-market companies in a wide range of industries primarily structured as senior credit facilities, and to a lesser extent, junior credit facilities. The Company also may purchase interests in loans through secondary market transactions.
Portfolio and Investment Activity
During the six months ended June 30, 2024, we made $84.7 million of investments in new or existing portfolio companies and had $69.8 million in aggregate amount of sales and repayments, resulting in net investments of $14.9 million for the period. The total portfolio of debt investments at fair value consisted of 100% bearing variable interest rates and 0% bearing fixed interest rates.
Our portfolio composition, based on fair value at June 30, 2024 was as follows:
|
|
June 30, 2024 |
|
|||||
|
|
Percentage |
|
|
Weighted Average |
|
||
First Lien Senior Secured |
|
|
98.0 |
% |
|
|
12.0 |
% |
Equity |
|
|
1.3 |
% |
|
|
— |
|
Cash and cash equivalents |
|
|
0.7 |
% |
|
|
— |
|
Total |
|
|
100 |
% |
|
|
12.0 |
% |
32
Our portfolio composition, based on fair value at December 31, 2023 was as follows:
|
|
December 31, 2023 |
|
|||||
|
|
Percentage |
|
|
Weighted Average |
|
||
First Lien Senior Secured |
|
|
99.0 |
% |
|
|
12.0 |
% |
Equity |
|
|
1.0 |
|
|
|
— |
|
Total |
|
|
100.0 |
% |
|
|
12.0 |
% |
The following table shows the asset mix of our new investment fundings for the six months ended June 30, 2024:
|
|
Asset Mix |
|
|
Percentage |
|
||
First Lien Senior Secured |
|
$ |
84,197 |
|
|
|
99.3 |
% |
Equity |
|
|
593 |
|
|
|
0.7 |
% |
Total |
|
$ |
84,790 |
|
|
|
100.0 |
% |
Portfolio Asset Quality
Our Investment Adviser employs an investment rating system to categorize our investments. In addition to various risk management and monitoring tools, our Investment Adviser grades the credit risk of all debt investments on a scale of 1 to 6 no less frequently than quarterly. This system is intended primarily to reflect the underlying risk of a portfolio debt investment relative to the inherent risk at the time the original debt investment was made (i.e., at the time of acquisition), which takes into account factors such as the performance of the portfolio company’s business, the collateral coverage of the investment and other relevant factors.
Loan Rating |
|
Summary Description |
|
|
|
1 |
|
Investments that are performing at or above expectations. No issues or foreseen issues on performance, covenants, liquidity, etc. The credit is expected to be repaid at maturity through available cash flow or to be refinanced. |
|
|
|
2 |
|
Investments that are performing substantially within our expectations, with the risks remaining neutral or favorable. All new loans are initially rated 2. The credit is expected to be repaid at maturity through available cash flow or to be refinanced by a third party. |
|
|
|
3 |
|
Investments that are performing below our expectations and that require closer monitoring, but where we expect no loss of investment return or principal. |
|
|
|
4 |
|
Investments that are performing below our expectations and for which risk has increased materially since the original investment. There is a probability of some loss of investment return, but no loss of principal is expected. |
|
|
|
5 |
|
Investments that are performing substantially below our expectations and whose risks have increased substantially since the original investment. Typically, the borrower will be in default, or the loan will have been modified to address a default. |
|
|
|
6 |
|
Investments that are performing poorly; it is unlikely that the enterprise or asset values currently exceed the debt and/or material reduction in enterprise value is reasonably foreseen. |
As of June 30, 2024, the weighted average risk rating of our investments based on fair value was 2.5. As of June 30, 2024, the Company had two portfolio companies on non-accrual status. Refer to Note 2—Summary of Significant Accounting Policies—for additional details regarding the Company’s non-accrual policy.
|
|
As of June 30, 2024 |
|
|||||
Internal |
|
Investments at |
|
|
Percentage |
|
||
6 |
|
$ |
10,861 |
|
|
|
1.7 |
% |
5 |
|
|
24,168 |
|
|
|
3.8 |
|
4 |
|
|
44,170 |
|
|
|
7.0 |
|
3 |
|
|
132,764 |
|
|
|
21.1 |
|
2 |
|
|
381,934 |
|
|
|
60.9 |
|
1 |
|
|
34,030 |
|
|
|
5.5 |
|
Total |
|
$ |
627,927 |
|
|
|
100.0 |
% |
33
As of December 31, 2023, the weighted average risk rating of our investments based on fair value was 2.4. As of December 31, 2023, the Company had two portfolio companies on non-accrual status. Refer to Note 2—Summary of Significant Accounting Policies—for additional details regarding the Company’s non-accrual policy.
|
|
As of December 31, 2023 |
|
|||||
Internal |
|
Investments at |
|
|
Percentage |
|
||
6 |
|
$ |
11,838 |
|
|
|
1.9 |
% |
5 |
|
|
22,663 |
|
|
|
3.7 |
|
4 |
|
|
— |
|
|
|
— |
|
3 |
|
|
118,997 |
|
|
|
19.2 |
|
2 |
|
|
465,078 |
|
|
|
75.2 |
|
1 |
|
|
— |
|
|
|
— |
|
Total |
|
$ |
618,576 |
|
|
|
100.0 |
% |
The following tables show the weighted average rate, spread over the reference rate of floating rate and fees of investments originated and the weighted average rate of sales and payoffs of portfolio companies during the three months ended June 30, 2024.
|
|
For the Three Months |
|
|
Weighted average rate of new investment fundings |
|
|
10.84 |
% |
Weighted average spread over Reference Rate of new floating rate investment fundings |
|
|
5.50 |
% |
Weighted average OID fees of new investment funding |
|
|
1.89 |
% |
Weighted average rate of sales and payoffs of portfolio investments |
|
|
11.48 |
% |
The following tables show the weighted average rate and the spread over the reference rate of floating rate and fees of investments originated during the three months ended June 30, 2023.
|
|
For the Three Months |
|
|
Weighted average rate of new investment fundings |
|
|
12.32 |
% |
Weighted average spread over Reference Rate of new floating rate investment fundings |
|
|
7.08 |
% |
Weighted average fees of new investment funding |
|
|
2.25 |
% |
RESULTS OF OPERATIONS
Our operating results for the three and six months ended June 30, 2024 (dollars in thousands):
|
|
For the Three Months |
|
|
For the Six Months |
|
||
Total investment income |
|
$ |
19,771 |
|
|
$ |
39,403 |
|
Less: Net expenses |
|
|
4,142 |
|
|
|
8,776 |
|
Net investment income (loss) |
|
|
15,629 |
|
|
|
30,627 |
|
Net realized gains (losses) |
|
|
52 |
|
|
|
(6,268 |
) |
Net change in unrealized gains (losses) |
|
|
(3,780 |
) |
|
|
(975 |
) |
Net increase (decrease) in net assets resulting from |
|
$ |
11,901 |
|
|
$ |
23,384 |
|
34
Our operating results for the three and six months ended June 30, 2023 were as follows (dollars in thousands):
|
|
For the Three Months |
|
|
For the Six Months |
|
||
Total investment income |
|
$ |
17,359 |
|
|
$ |
31,474 |
|
Less: Net expenses |
|
|
4,528 |
|
|
|
6,935 |
|
Net investment income (loss) |
|
|
12,831 |
|
|
|
24,539 |
|
Net realized gains (losses) |
|
|
— |
|
|
|
— |
|
Net change in unrealized gains (losses) |
|
|
2,317 |
|
|
|
519 |
|
Net increase (decrease) in net assets resulting from |
|
$ |
15,148 |
|
|
$ |
25,058 |
|
Investment Income
Investment income for the three and six months ended June 30, 2024 was driven by our deployment of capital and interest income from our investments. The composition of our investment income for the three and six months ended June 30, 2024 was as follows (dollars in thousands):
|
|
For the Three Months |
|
|
For the Six Months |
|
||
Interest income from investments |
|
$ |
19,358 |
|
|
$ |
38,594 |
|
Fee income |
|
|
413 |
|
|
|
809 |
|
Total investment income |
|
$ |
19,771 |
|
|
$ |
39,403 |
|
The composition of our investment income for the three and six months ended June 30, 2023 was as follows (dollars in thousands):
|
|
For the Three Months |
|
|
For the Six Months |
|
||
Interest income from investments |
|
$ |
17,130 |
|
|
$ |
30,787 |
|
Fee income |
|
|
229 |
|
|
|
687 |
|
Total investment income |
|
$ |
17,359 |
|
|
$ |
31,474 |
|
Operating Expenses
The composition of our operating expenses for the three and six months ended June 30, 2024 was as follows (dollars in thousands):
|
|
For the Three Months |
|
|
For the Six Months |
|
||
Incentive fees |
|
$ |
388 |
|
|
$ |
781 |
|
Management fees, net |
|
|
1,551 |
|
|
|
3,123 |
|
Interest expense |
|
|
1,659 |
|
|
|
3,779 |
|
Professional fees |
|
|
186 |
|
|
|
391 |
|
Directors’ fees |
|
|
19 |
|
|
|
41 |
|
Other general and administrative expenses |
|
|
339 |
|
|
|
661 |
|
Net expenses |
|
$ |
4,142 |
|
|
$ |
8,776 |
|
35
The composition of our operating expenses for the three and six months ended June 30, 2023 was as follows (dollars in thousands):
|
|
For the Three Months |
|
|
For the Six Months |
|
||
Incentive fees |
|
$ |
1,399 |
|
|
$ |
1,399 |
|
Management fees, net |
|
|
1,295 |
|
|
|
2,421 |
|
Interest expense |
|
|
1,543 |
|
|
|
2,369 |
|
Professional fees |
|
|
175 |
|
|
|
323 |
|
Directors’ fees |
|
|
25 |
|
|
|
50 |
|
Other general and administrative expenses |
|
|
154 |
|
|
|
436 |
|
Incentive fee waiver |
|
|
(63 |
) |
|
|
(63 |
) |
Net expenses |
|
$ |
4,528 |
|
|
$ |
6,935 |
|
36
Net Realized Gains (Losses) and Net Change in Unrealized Gains (Losses) on Investments
Net realized gains (losses) and net change in unrealized gains (losses) on investments for the three and six months ended June 30, 2024 were as follows (dollars in thousands):
|
|
For the Three Months |
|
|
For the Six Months |
|
||
Net realized gains (losses) |
|
|
|
|
|
|
||
Non-controlled, non-affiliated investments |
|
$ |
52 |
|
|
$ |
(6,268 |
) |
Total net realized gains (losses) |
|
|
52 |
|
|
|
(6,268 |
) |
Net change in unrealized gains (losses) on investments |
|
|
|
|
|
|
||
Non-controlled, non-affiliated investments |
|
|
(2,856 |
) |
|
|
1,556 |
|
Affiliated investments |
|
|
(924 |
) |
|
|
(2,531 |
) |
Total net change in unrealized gains (losses) on investments |
|
|
(3,780 |
) |
|
|
(975 |
) |
Net realized and unrealized gains (losses) |
|
$ |
(3,728 |
) |
|
$ |
(7,243 |
) |
Net realized gains (losses) and net change in unrealized gains (losses) on investments for the three and six months ended June 30, 2023 were as follows (dollars in thousands):
|
|
For the Three Months |
|
|
For the Six Months |
|
||
Net realized gains (losses) |
|
|
|
|
|
|
||
Non-affiliate investments |
|
$ |
— |
|
|
$ |
— |
|
Total net realized gains (losses) |
|
|
— |
|
|
|
— |
|
Net change in unrealized gains (losses) on investments |
|
|
|
|
|
|
||
Non-affiliate investments |
|
|
2,317 |
|
|
|
519 |
|
Total net change in unrealized gains (losses) on investments |
|
|
2,317 |
|
|
|
519 |
|
Net realized and unrealized gains (losses) |
|
$ |
2,317 |
|
|
$ |
519 |
|
Recent Developments
None.
Liquidity and Capital Resources
We generate cash from (1) drawing down capital in respect of Shares, (2) cash flows from investments and operations and (3) borrowings from banks or other lenders.
As of June 30, 2024, we are party to the Goldman Credit Facility, as described in more detail in Note 6—Borrowings.
Our primary use of cash is to originate (1) investments in portfolio companies and other investments to comply with certain portfolio diversification requirements, (2) the cost of operations (including expenses, the Management Fee and, to the extent permitted under ERISA, if applicable, and the 1940 Act, any indemnification obligations), (3) debt service of any borrowings and (4) cash distributions to the Stockholders.
Operating liquidity is our ability to meet our short-term liquidity needs. The following table presents our operating liquidity position as of June 30, 2024 and December 31, 2023:
|
|
As of |
|
|||||
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||
Cash and cash equivalents |
|
$ |
4,157 |
|
|
$ |
8,887 |
|
Unfunded portfolio company commitments |
|
|
(60,960 |
) |
|
|
(58,395 |
) |
Undrawn capital commitments |
|
|
186,571 |
|
|
|
186,571 |
|
Total operational liquidity |
|
$ |
129,768 |
|
|
$ |
137,063 |
|
37
Taxation as a RIC
We have elected to be treated as a RIC under Subchapter M of the Code. As a RIC, we generally will not be subject to corporate-level U.S. federal income taxes on any income that we distribute as dividends for U.S. federal income tax purposes to our stockholders. To maintain our qualification as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements. In addition, in order to maintain RIC tax treatment, we must distribute to our stockholders, for each tax year, an amount equal to at least 90% of our “investment company taxable income,” which is generally our net ordinary income plus the excess, if any, of realized net short-term capital gain over realized net long-term capital loss and determined without regard to any deduction for dividends paid.
Additionally, in order to avoid the imposition of a U.S. federal excise tax, we are required to distribute, in respect of each calendar year, dividends to our stockholders of an amount at least equal to the sum of 98% of our calendar year net ordinary income (taking into account certain deferrals and elections); 98.2% of our capital gain net income (adjusted for certain ordinary losses) for the one year period ending on October 31 of such calendar year; and any net ordinary income and capital gain net income for preceding calendar years that were not distributed during such calendar years and on which we previously did not incur any U.S. federal income tax. If we fail to qualify as a RIC for any reason and become subject to corporate tax, the resulting corporate taxes could substantially reduce our net assets, the amount of income available for distribution and the amount of our distributions.
Related Party Transactions and Agreements
Investment Advisory Agreement
On June 29, 2023, the Company entered into an amended and restated investment advisory and management agreement (the “Amended and Restated Investment Advisory Agreement”) with the Investment Adviser, following the approval of the Amended and Restated Investment Advisory Agreement by the Company’s stockholders by unanimous written consent on June 29, 2023. The terms of the Amended and Restated Investment Advisory Agreement became effective on July 1, 2023 and did not impact Management Fees paid in prior periods.
The Board, including a majority of the directors that are not “interested persons” as defined in Section 2(a)(19) of the 1940 Act, most recently approved the renewal of the Amended and Restated Investment Advisory Agreement on May 10, 2024. Such approvals were made in accordance with, and on the basis of an evaluation satisfactory to the Board as required by, Section 15(c) of the 1940 Act and applicable rules and regulations thereunder, including a consideration of, among other factors, (i) the nature, quality and extent of the advisory and other services to be provided under the agreement, (ii) the investment performance of the personnel who manage investment portfolios with objectives similar to the Company’s, (iii) comparative data with respect to advisory fees or similar expenses paid by other BDCs with similar investment objectives and (iv) information about the services to be performed and the personnel performing such services under the agreement.
Administration Agreement
On June 29, 2021, we entered into an administration agreement (the “Administration Agreement”) with Commonwealth Credit Advisors LLC, a Delaware limited liability company (in such capacity, the “Administrator”), under which the Administrator will provide administrative services for us, including arranging office facilities for us and providing office equipment and clerical, bookkeeping and recordkeeping services at such facilities. The Board, including a majority of the directors that are not “interested persons” as defined in Section 2(a)(19) of the 1940 Act, most recently approved the renewal of the Administration Agreement on May 10, 2024. Such approvals were made in accordance with, and on the basis of an evaluation satisfactory to the Board as required by, Section 15(c) of the 1940 Act and applicable rules and regulations thereunder.
Co-Investment Relief
The 1940 Act generally prohibits BDCs from entering into negotiated co-investments with affiliates absent an order from the SEC. On August 2, 2021, the SEC granted the Company exemptive relief (the “Order”) that allows it to enter into certain negotiated co-investment transactions alongside other funds managed by the Adviser or its affiliates (“Affiliated Funds”) in a manner consistent with its investment objective, positions, policies, strategies, and restrictions as well as regulatory requirements and other pertinent factors, subject to compliance with the conditions of the Order. On August 16, 2023, the Company filed an application for an order to amend the Order pursuant to Sections 17(d) and 57(i) of the 1940 Act and Rule 17d-1 thereunder, permitting certain joint transactions otherwise prohibited by Sections 17(d) and 57(a)(4) of the 1940 Act.
Pursuant to the Order, the Company is permitted to co-invest with its affiliates if “among other things, a required majority” (as defined in Section 57(o) of the 1940 Act) of the Company’s Independent Directors make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transactions, including the consideration to be paid, are reasonable and fair to the Company and the Company’s stockholders and do not involve overreaching in respect of the Company or the Company’s
38
stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of the Company’s stockholders and is consistent with the Company’s investment objective and strategies. In addition, to the extent that our assets are treated as “plan assets” under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), we will only co-invest in the same issuer with certain funds or entities managed by the Investment Adviser or its affiliates, so long as their and our respective investments are at the same level of such issuer’s capital structure; provided, that in no event will we co-invest with any other fund or entity in contravention of the 1940 Act.
Distributions and Dividends
Distributions declared for the three and six months ended June 30, 2024 totaled approximately $15.15 million and $28.29 million, respectively.
The following table reflects cash distributions, including dividends and returns of capital, if any, per share that have been declared by our Board for the fiscal quarters ended June 30, 2024 and June 30, 2023, respectively:
Fiscal Year Quarter |
|
Date Declared |
|
Record Date |
|
Payment Date |
|
Per Share Amount |
|
|
First Quarter |
|
March 28, 2024 |
|
March 28, 2024 |
|
March 28, 2024 |
|
$ |
24.00 |
|
Second Quarter |
|
June 27, 2024 |
|
June 27, 2024 |
|
June 28, 2024 |
|
$ |
27.00 |
|
|
|
Date Declared |
|
Record Date |
|
Payment Date |
|
Per Share Amount |
|
|
First Quarter |
|
March 27, 2023 |
|
March 27, 2023 |
|
March 28, 2023 |
|
$ |
22.80 |
|
Second Quarter |
|
June 27, 2023 |
|
June 27, 2023 |
|
June 28, 2023 |
|
$ |
24.20 |
|
We intend to pay quarterly distributions to our stockholders in amounts sufficient to qualify as and maintain our status as a RIC. We intend to distribute approximately all of our net investment income on a quarterly basis and substantially all of our taxable income on an annual basis, except that we may retain certain net capital gains for reinvestment.
Borrowings
We are only allowed to borrow money such that our asset coverage, which, as defined in the 1940 Act, measures the ratio of total assets less total liabilities not represented by senior securities to total borrowings, equals at least 150% after such borrowing, with certain limited exceptions. As a result, in addition to the foregoing 1940 Act restriction on leverage, we do not currently expect to borrow in excess of the lesser of 20% of our Aggregate Committed Capital and $130 million. We may in the future, though, determine to utilize a greater amount of leverage, including for investment purposes.
Goldman Credit Facility
On August 11, 2021, Commonwealth Credit Partners BDC, Inc. (the “Company”), entered into a Credit Agreement (the "Goldman Credit Facility") as the borrower and Goldman Sachs Bank USA (“Goldman Sachs”) as the lender. The Goldman Credit Facility is structured as a revolving credit facility secured by the Capital Commitments of the Company’s subscribed investors and certain related assets. On September 27, 2021, the Credit Agreement was amended, pursuant to which the maximum loan amount was increased to the lesser of $130 million and the Borrowing Base as defined below.
The Goldman Credit Facility is uncommitted and matures on the earlier of (i) the date on which either the Company or lender provide written notice of termination to the other party and (ii) the date that is 30 days prior to the last date on which the Company may issue capital drawdowns to its investors. Under the Goldman Credit Facility, the Company is permitted to borrow up to the lesser of $130 million and the Borrowing Base. The “Borrowing Base” is based upon the unfunded capital commitments of certain subscribed investors in the Company that have been approved by Goldman Sachs and meet certain criteria. The advance rate for such investors is currently 90% but may be subject to modification. The Goldman Credit Facility contains certain customary affirmative and negative covenants and events of default.
The Goldman Credit Facility bears interest at a rate of Term SOFR plus 2.82% per annum.
39
Contractual Obligations
The following table shows our payment obligations for repayment of debt and other contractual obligations as of June 30, 2024 (dollars in thousands):
|
|
Total Aggregate |
|
|
Total Principal |
|
||
Goldman Sachs Credit Facility |
|
$ |
130,000 |
|
|
$ |
90,800 |
|
Total |
|
$ |
130,000 |
|
|
$ |
90,800 |
|
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.
Commitments
In the ordinary course of business, we may enter into future funding commitments. As of June 30, 2024, we had unfunded commitments on revolving credit lines and delayed draw loans of $60.9 million. We maintain sufficient financial resources to satisfy unfunded commitments, including cash on hand, undrawn capital commitments from our investors, and available borrowings to fund such unfunded commitments. Please refer to Note 7—Commitments and Contingencies in the notes to our consolidated financial statements for further detail of these unfunded commitments.
Significant Accounting Estimates and Critical Accounting Policies
Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, we will evaluate our estimates, including those related to the matters described below. Actual results could differ from those estimates.
While our significant accounting policies are also described in Note 2 of notes to our consolidated financial statements appearing elsewhere in this report, we believe the following accounting policies require the most significant judgment in the preparation of our consolidated financial statements.
Valuation of Portfolio Investments
The Investment Adviser values our portfolio investments on a quarterly basis, or more frequently if required under the 1940 Act. For purposes of the 1940 Act, the Board has designated the Investment Adviser as the Company’s “valuation designee” under Rule 2a-5 under the 1940 Act. The Board provides oversight of the Investment Adviser’s fair value determinations of our portfolio investments on a quarterly basis in good faith, including investments that are not publicly traded, those whose market prices are not readily available. Security transactions are accounted for on a trade date basis.
Given that the Company's assets are currently treated as "plan assets" under the ERISA and Section 4975 of the Code, one or more independent valuation firms (each a "Valuation Agent") will be engaged to independently value the Company's investments, in consultation with the Investment Adviser. The Company's quarterly valuation procedures, which are the procedures that will be followed by such Valuation Agent to the extent the Company's assets are treated as "plan assets" under ERISA and/or Section 4975 of the code, are set forth in more detail below:
40
a) Bond quotes are obtained through independent pricing services. Internal reviews are performed by the personnel of the Valuation Agent, in consultation with the investment professionals of the Investment Adviser, to ensure that the quote obtained is representative of fair value in accordance with GAAP and if so, the quote is used. If the Valuation Agent is unable to sufficiently validate the quote(s) internally and if the investment’s par value exceeds a certain materiality threshold, the investment is valued similarly to those assets with no readily available quotes (see (3) below); and
b) For investments other than bonds, the personnel of the Valuation Agent, in consultation with the investment professionals of the Investment Adviser, look at the number of quotes readily available and perform the following:
i) Investments for which two or more quotes are received from a pricing service are valued using the mean of the mean of the bid and ask of the quotes obtained. If quotes from pricing services differ by +/- five points or if the spread between the bid and ask for a quote is greater than 10 points, the personnel of the Valuation Agent, in consultation with the investment professionals of the Investment Adviser, will evaluate the reasonableness of the quote, and if the quote is determined to not be representative of fair value, the personnel of the Valuation Agent, in consultation with the investment professionals of the Investment Adviser, will use one or more of the methodologies outlined below to determine fair value;
ii) Investments for which one quote is received from a pricing service are validated by the Valuation Agent, in consultation with the investment professionals of the Investment Adviser. The personnel of the Valuation Agent, in consultation with the investment professionals of the Investment Adviser, analyze the market quotes obtained using an array of valuation methods (further described below) to validate the fair value. For assets where a supporting analysis is prepared, the Valuation Agent will document the selection and appropriateness of the indices selected for yield comparison and a conclusion documenting how the yield comparison analysis supports the proposed mark. The quarterly portfolio company monitoring reports which detail the qualitative and quantitative performance of the portfolio company will also be included. If the Valuation Agent, in consultation with the investment professionals of the Investment Adviser, is unable to sufficiently validate the quote internally and if the investment’s par value exceeds a certain materiality threshold, the investment is valued similarly to those assets with no readily available quotes (see (3) below).
a) Each portfolio company or investment is initially valued by the personnel of the Valuation Agent, in consultation with the investment professionals of the Investment Adviser; and
b) Preliminary valuation conclusions will then be documented and discussed with our senior management.
The income and market approaches were used in the determination of fair value of certain Level 3 assets as of June 30, 2024. The significant unobservable inputs used in the income approach are the discount rate or market yield used to discount the estimated future cash flows expected to be received from the underlying investment, which include both future principal and interest payments and any other end of term fees, as applicable. Included in the consideration and selection of discount rates are factors such as risk of default, interest rate risk, and changes in credit quality. The significant unobservable inputs used in the market approach are based on market comparable transactions and market multiples of publicly traded comparable companies.
For investments in revolving credit facilities and delayed draw commitments, the cost basis of the funded investments purchased is offset by any costs/netbacks received for any unfunded portion on the total balance committed. The fair value is also adjusted for the price appreciation or depreciation on the unfunded portion. As a result, the purchase of commitments not completely funded may result in a negative fair value until it is called and funded.
The values assigned to investments are based upon available information and do not necessarily represent amounts which might ultimately be realized, since such amounts depend on future circumstances and cannot be reasonably determined until the individual positions are liquidated. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period and the fluctuations could be material.
In the event Benefit Plan Investors do not hold 25% or more of our outstanding Shares, or our Shares are listed on a national securities exchange, then (i) personnel of the Investment Adviser will undertake the roles to be performed by the personnel of the Valuation Agent, as described above and (ii) if an investment falls into category (3) above for four consecutive quarters and if the investment’s par value or its fair value exceeds a certain materiality threshold, then at least once each fiscal year, the valuation for
41
each portfolio investment for which we do not have a readily available market quotation will be reviewed by an independent valuation firm engaged by our Board.
For all valuations, the Valuation Committee of our Board, which consists solely of directors who are not “interested persons” of the Company, as such term is used under the 1940 Act (the “Independent Directors”), will review these preliminary valuations and our Board, a majority of whom are Independent Directors, will discuss the Investment Adviser’s valuations; provided, however, that to the extent our assets are treated as “plan assets” under ERISA and/or Section 4975 of the Code, the Valuation Agent will determine valuations using only those valuation methodologies reviewed and approved by the Valuation Committee and our Board, and our Board, absent manifest error, will accept such valuations prepared by the Valuation Agent in accordance therewith.
Revenue Recognition
Interest Income
Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis. Discount and premium on investments purchased are accreted/amortized over the expected life of the respective investment using the effective interest method. Loan origination fees, original issue discount (“OID”) and market discounts or premiums are capitalized and amortized into interest income using the effective interest method. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized upfront loan origination fees and unamortized discounts are recorded as interest income. The Company may have loans in its portfolio that contain a payment-in-kind ("PIK") interest provision. PIK interest is accrued and recorded as income at the contractual rates, if deemed collectible. The PIK interest is added to the principal balance on the capitalization date and is generally due at maturity or when deemed by the issuer.
Fee Income
Fee income, such as structuring fees, loan monitoring, amendment, syndication, commitment, termination, and other loan fees are recognized as income when earned, either upon receipt or amortized into fee income. Upon the re-payment of a loan or debt security, any prepayment penalties and unamortized loan fees are recorded as fee income.
Non-accrual
Investments may be placed on non-accrual status when principal or interest payments are past due and/or when there is reasonable doubt that principal or interest will be collected. Accrued interest is generally reversed when an investment is placed on non-accrual status. Interest payments received on non-accrual investments may be recognized as income or applied to principal depending upon management’s judgment of the ultimate outcome. Non-accrual investments are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current.
Net Realized Gain or Loss and Net Change in Unrealized Gain or Loss
Investment transactions are accounted for on the trade date. Gain or loss on the sale of investments is calculated using the specific identification method. Net change in unrealized gain or loss will reflect the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized gain or loss, when a gain or loss is realized.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are subject to certain financial market risks, such as interest rate fluctuations. Because we fund a portion of our investments with borrowings, our net investment income is affected by the difference between the rate at which we invest and the rate at which we borrow. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income. A prolonged reduction in interest rates will reduce our gross investment income and could result in a decrease in our net investment income if such decreases in SOFR are not offset by a corresponding increase in the spread over SOFR that we earn on any portfolio investments, a decrease in our operating expenses, including with respect to our income incentive fee, or a decrease in the interest rate of our floating interest rate liabilities tied to SOFR. As of March 31, 2024, 100% of investments at fair value represent floating-rate investments with a reference rate floor and none of our debt investments at fair value represent fixed-rate investments. Additionally, our Goldman Credit Facility is also subject to floating interest rates and are currently paid based on floating SOFR rates.
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The following table estimates the potential changes in net cash flow generated from interest income and expenses, should interest rates increase by 100, 200 or 300 basis points, or decrease by 100 or 200 basis points. Interest income is calculated as revenue from interest generated from our portfolio of investments held as of June 30, 2024. Interest expense is calculated based on the terms of our outstanding revolving credit facility and subscription line. For our Goldman Credit Facility, we use the outstanding balance as of June 30, 2024. Interest expense on this balance is calculated using the interest rate as of June 30, 2024, adjusted for the hypothetical changes in rates, as shown below.
Assuming that the interim and unaudited Consolidated Statements of Assets and Liabilities as of June 30, 2024 was to remain constant and that we took no actions to alter our interest rate sensitivity as of such date, the following table shows the annualized impact of hypothetical base rate changes in interest rates. Actual results could differ significantly from those estimated in the table.
Change in Interest Rates |
|
Net Increase |
|
Net Increase |
|
Net Increase |
|
|||
Down 100 basis points |
|
$ |
(6,430 |
) |
$ |
(908 |
) |
$ |
(5,522 |
) |
Down 200 basis points |
|
|
(12,860 |
) |
|
(1,816 |
) |
|
(11,044 |
) |
Up 100 basis points |
|
|
6,430 |
|
|
908 |
|
|
5,522 |
|
Up 200 basis points |
|
|
12,860 |
|
|
1,816 |
|
|
11,044 |
|
Up 300 basis points |
|
|
19,290 |
|
|
2,724 |
|
|
16,566 |
|
Because we may borrow money to make investments, our net investment income may be dependent on the difference between the rate at which we borrow funds and the rate at which we invest these funds. In periods of increasing interest rates, our cost of funds would increase, which may reduce our net investment income. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures
As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “1934 Act”) we evaluated, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the 1934 Act) as of June 30, 2024. Based on the foregoing evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of June 30, 2024, our disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level that we would meet our disclosure obligations.
Changes in internal control over financial reporting
There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the 1934 Act) that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II—OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We, and our wholly-owned direct subsidiaries, the Investment Adviser and the Administrator are not currently subject to any material legal proceedings as of June 30, 2024. From time to time, we our wholly-owned direct subsidiaries, the Investment Adviser and the Administrator may be a party to certain legal proceedings incidental to the normal course of our business including the enforcement of our rights under contracts with our portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our business, financial condition or results of operations.
ITEM 1A. RISK FACTORS
In addition to the other information set forth in this report, you should carefully consider the factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K— for the fiscal year ended December 31, 2023, which could materially affect our business, financial condition and/or operating results. The risks described in our Annual Report on Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may materially affect our business, our structure, our financial condition, our investments and/or operating results. There have been no material changes during the three and six months ended June 30, 2024 to the risk factors discussed in Item 1A.—Risk Factors in our Annual Report on Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Previously disclosed by the Company on its current reports on Form 8-K.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Rule 10b5-1 Trading Plans
During the fiscal quarter ended June 30, 2024, none of our directors or executive officers
44
ITEM 6. EXHIBITS
The following exhibits are filed as part of this report, or hereby incorporated by reference to exhibits previously filed with the United States Securities and Exchange Commission:
|
|
Exhibit Number |
Description of Document |
|
|
3.1 |
|
|
|
3.2 |
|
|
|
31.1* |
|
|
|
31.2* |
|
|
|
32.1** |
|
|
|
32.2** |
|
|
|
101.INS |
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |
|
|
101.SCH |
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents. |
|
|
104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
* Filed herewith.
* * Furnished herewith.
(1) Incorporated by reference to the Exhibits accompanying the Company’s Form 10 Registration Statement filed on July 6, 2021.
45
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
Commonwealth Credit Partners BDC I, Inc. |
|
|
|
|
Date: August 13, 2024 |
By: |
/s/ Robert O’Sullivan |
|
Name: Title: |
Robert O’Sullivan Chief Executive Officer |
|
|
|
Date: August 13, 2024 |
By: |
/s/ Cecilio M. Rodriguez |
|
Name: Title: |
Cecilio M. Rodriguez Chief Financial Officer |
w
46