Table of Contents
false--12-310001905824Q3trueCAWeighted average is calculated by weighing the significant unobservable input by the relative fair value of each investment in the category.Purchases and Drawdowns may include securities received in corporate actions and restructurings.All investments are U.S. domiciled. Unless otherwise indicated, the interest rate on the principal balance outstanding for all floating rate loans is indexed to the Term Secured Overnight Financing Rate (“SOFR”), which typically resets semiannually, quarterly, or monthly at the borrower’s option. The applicable base rate may be subject to a floor. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, we have provided the applicable margin over the reference rate based on each respective credit agreement. As of December 31, 2023, the reference rates for the floating rate loans were the 1 Month SOFR of 5.35%, 3 Month SOFR of 5.33% and 6 Month SOFR of 5.16%. Pledged as collateral against the credit facility. See Note 4. Borrowings in the Notes to Unaudited Consolidated Financial Statements for additional information. The investment is treated as a non-qualifying asset under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act’’). Under the 1940 Act, the Company cannot acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company’s total assets. As of December 31, 2023, total non-qualifying assets at fair value represented 16.0% of the Company’s total net assets calculated in accordance with the 1940 Act. The fair value of the investment was valued using significant unobservable inputs. See Note 6. Fair Value Measurements in the Notes to Unaudited Consolidated Financial Statements. All or a portion of the interest on this position is paid-in-kind (PIK).Represents co-investments made with the Company’s affiliates in accordance with the terms of the exemptive relief received from the U.S. Securities and Exchange Commission. See Note 3. Related Party Transactions in the Notes to Unaudited Consolidated Financial Statements.Non-income producing security.Interest rates on short-term investments are annualized.Sales and Paydowns may include securities delivered in corporate actions and restructuring of investments.All investments are U.S. domiciled, unless otherwise indicated.The investment is treated as a non-qualifying asset under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act’’). Under the 1940 Act, the Company cannot acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company’s total assets. As of September 30, 2024, total non-qualifying assets at fair value represented 15.4% of the Company’s total net assets calculated in accordance with the 1940 Act.Unless otherwise indicated, the interest rate on the principal balance outstanding for all floating rate loans is indexed to the Term Secured Overnight Financing Rate (“SOFR”) or Euro Interbank Offered Rate (“EURIBOR”), which typically resets semiannually, quarterly, or monthly at the borrower’s option. The applicable base rate may be subject to a floor. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, we have provided the applicable margin over the reference rate based on each respective credit agreement. As of September 30, 2024, the reference rates for the floating rate loans were the 1 Month SOFR of 4.85%, 3 Month SOFR of 4.59%, 6 Month SOFR of 4.25%, 1 Month EURIBOR of 3.35%, 3 Month EURIBOR of 3.11% and 6 Month EURIBOR of 3.28%.Investment is Germany domiciled. Investment is Spain domiciled. Amount excludes excess cash collateral paid, if any. Net amount represents the net amount due (to) from counterparty in the event of a default based on the contractual setoff rights under the agreement. Net amount excludes any over-collateralized amounts. 0001905824 2023-12-31 0001905824 2024-09-30 0001905824 2023-07-01 2023-09-30 0001905824 2024-07-01 2024-09-30 0001905824 2023-01-01 2023-09-30 0001905824 2024-01-01 2024-09-30 0001905824 2023-01-01 2023-12-31 0001905824 2023-09-30 0001905824 2024-05-22 2024-05-22 0001905824 2024-08-22 2024-08-22 0001905824 2023-06-19 2023-06-19 0001905824 2024-06-10 2024-06-10 0001905824 2024-11-13 0001905824 2022-12-31 0001905824 2024-06-30 0001905824 2023-06-30 0001905824 ck0001905824:OrganizationalCostsMember ck0001905824:AdvisorMember 2024-09-30 0001905824 ck0001905824:AdvisoryAgreementMember 2024-09-30 0001905824 ck0001905824:SeniorUnsecuredNotesMember 2024-09-30 0001905824 ck0001905824:SecondLienSecuredMember 2024-09-30 0001905824 us-gaap:CommonStockMember 2024-09-30 0001905824 us-gaap:WarrantMember 2024-09-30 0001905824 us-gaap:CorporateBondSecuritiesMember 2024-09-30 0001905824 us-gaap:ShortTermInvestmentsMember 2024-09-30 0001905824 ck0001905824:FirstLienSecuredMember 2024-09-30 0001905824 us-gaap:FoodAndBeverageMember 2024-09-30 0001905824 ck0001905824:IndustrialOtherMember 2024-09-30 0001905824 ck0001905824:DiversifiedManufacturingMember 2024-09-30 0001905824 ck0001905824:FinancialOtherMember 2024-09-30 0001905824 ck0001905824:TreasuryBillsMember 2024-09-30 0001905824 ck0001905824:ItSerivesMember 2024-09-30 0001905824 ck0001905824:WirelessMember 2024-09-30 0001905824 ck0001905824:PharmaceuticalsMember 2024-09-30 0001905824 ck0001905824:RetailersMember 2024-09-30 0001905824 us-gaap:TechnologySectorMember 2024-09-30 0001905824 us-gaap:HealthcareSectorMember 2024-09-30 0001905824 ck0001905824:InsuranceLifeMember 2024-09-30 0001905824 ck0001905824:PackagingMember 2024-09-30 0001905824 ck0001905824:AutomotiveIndustryMember 2024-09-30 0001905824 ck0001905824:ConsumerServiceMember 2024-09-30 0001905824 us-gaap:EntertainmentMember 2024-09-30 0001905824 us-gaap:ChemicalsSectorMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel1Member ck0001905824:SecondLienseniorsecuredMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel2Member ck0001905824:SecondLienseniorsecuredMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:SecondLienseniorsecuredMember 2024-09-30 0001905824 ck0001905824:SecondLienseniorsecuredMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel1Member ck0001905824:SeniorUnsecuredNotesMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel2Member ck0001905824:SeniorUnsecuredNotesMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:FirstLienseniorsecuredNotesMember 2024-09-30 0001905824 ck0001905824:FirstLienseniorsecuredNotesMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel1Member us-gaap:WarrantMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel2Member us-gaap:WarrantMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:WarrantMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel1Member ck0001905824:FirstLienseniorsecuredNotesMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel2Member ck0001905824:FirstLienseniorsecuredNotesMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member 2024-09-30 0001905824 us-gaap:FairValueInputsLevel1Member us-gaap:CommonStockMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel2Member us-gaap:CommonStockMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:CommonStockMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel1Member us-gaap:ShortTermInvestmentsMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel2Member us-gaap:ShortTermInvestmentsMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:ShortTermInvestmentsMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel1Member 2024-09-30 0001905824 us-gaap:FairValueInputsLevel2Member 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:SeniorUnsecuredNotesMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel1Member us-gaap:CorporateBondSecuritiesMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel2Member us-gaap:CorporateBondSecuritiesMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:CorporateBondSecuritiesMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansOneMember us-gaap:MeasurementInputDiscountRateMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:CommonStockMember us-gaap:MeasurementInputEbitdaMultipleMember ck0001905824:ValuationComparableMultipleMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:WarrantMember us-gaap:MeasurementInputEbitdaMultipleMember ck0001905824:ValuationComparableMultipleMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansTwoMember ck0001905824:MeasurementInputBrokerQuoteMember ck0001905824:ThirdPartyVendorMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansThreeMember ck0001905824:MeasurementInputPurchasePriceMember ck0001905824:ValuationRecentTransactionMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:SeniorUnsecuredNotesMember us-gaap:MeasurementInputDiscountRateMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:CommonStockMember ck0001905824:MeasurementInputDiscountRateRevenueMultipleMember ck0001905824:DiscountedCashFlowComparableMultipleMember 2024-09-30 0001905824 srt:MinimumMember 2024-09-30 0001905824 ck0001905824:RevolverMember ck0001905824:IntegrityMarketingAcquisitionLlcMember 2024-09-30 0001905824 us-gaap:DelayedDrawTermLoanMember ck0001905824:CoreWeaveComputeAcquisitionCoIVLLCMember 2024-09-30 0001905824 us-gaap:DelayedDrawTermLoanMember ck0001905824:ApexServicePartnersLLCMember 2024-09-30 0001905824 ck0001905824:TermLoanMember ck0001905824:AmberAcquisitionCoLLCDwyerOmegaMember 2024-09-30 0001905824 ck0001905824:AdministrationAgreementMember 2024-09-30 0001905824 ck0001905824:AdvisorMember 2024-09-30 0001905824 ck0001905824:SixMonthEuriborMember 2024-09-30 0001905824 ck0001905824:OneMonthSofrMember 2024-09-30 0001905824 ck0001905824:ThreeMonthSofrMember 2024-09-30 0001905824 ck0001905824:SixMonthSofrMember 2024-09-30 0001905824 ck0001905824:OneMonthEuriborMember 2024-09-30 0001905824 ck0001905824:ThreeMonthEuriborMember 2024-09-30 0001905824 country:US 2024-09-30 0001905824 country:DE 2024-09-30 0001905824 country:ES 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Chemicals | Puris LLC Term Loan | SOFR + 5.750% | 10.418% | 06/30/2031 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Consumer Services | BCPE Empire Holdings, Inc. Term Loan | SOFR + 4.000% | 8.845% | 12/11/2028 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Diversified Manufacturing | TK Elevator Midco GmbH Facility B2 Loan | SOFR + 3.500% | 8.588% | 04/30/2030 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Entertainment | AP Core Holdings II, LLC Term B-2 Loan | SOFR + 5.614% | 10.46% | 09/01/2027 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Entertainment | SubCalidora 2 S.a r.l. Term Loan | EURIBOR + 5.750% | 9.34% | 08/14/2029 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Financial Other | Asurion, LLC B-12 Term Loan | SOFR + 4.250% | 9.095% | 09/19/2030 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Technology | Cotiviti, Inc. Initial Term Loan | SOFR + 3.250% | 8.451% | 05/01/2031 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Technology | Endurance International Group Holdings, Inc. Initial Term Loan | SOFR + 3.614% | 8.81% | 02/10/2028 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Technology | Mavenir Systems, Inc. Initial Term Loan | SOFR + 5.012% | 10.073% | 08/18/2028 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Technology | McAfee Corp. Term Loan | SOFR + 3.250% | 8.451% | 03/01/2029 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Packaging | Clydesdale Acquisition Holdings, Inc. Seven Year Term Loan | SOFR + 3.175% | 8.02% | 04/13/2029 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Packaging | LABL, Inc. Initial Dollar Term Loan | SOFR + 5.100% | 9.945% | 10/29/2028 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Pharmaceuticals | Gainwell Acquisition Corp. Term B Loan | SOFR + 4.100% | 8.704% | 10/01/2027 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Retailers | LBM Acquisition, LLC Incremental Term Loan | SOFR + 3.850% | 8.968% | 06/06/2031 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Technology | Cloud Software Group, Inc. Term Loan | SOFR + 4.000% | 8.604% | 03/30/2029 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Technology | CoreWeave Compute Acquisition Co. IV, LLC Initial Term Loan | SOFR + 6.000% | 10.604% | 05/16/2029 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Financial Other | Nuvei Technologies Corp. Term Loan | SOFR + 3.000% | 8.326% | 07/21/2031 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Food and Beverage | Triton Water Holdings, Inc. Initial Term Loan | SOFR + 3.512% | 8.115% | 03/31/2028 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Healthcare | U.S. Renal Care, Inc. Closing Date Term Loan | SOFR + 5.114% | 9.96% | 06/20/2028 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Industrial Other | Apex Service Partners, LLC Delayed Term Loan | SOFR + 5.000% | 9.857% | 10/24/2030 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Insurance Life | Integrity Marketing Acquisition, LLC Incremental Term Loan | SOFR + 5.000% | 10.081% | 08/25/2028 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | IT Services | Alorica, Inc. Term Loan | SOFR + 6.875% | 11.72% | 12/21/2027 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Technology | Polaris Newco, LLC Dollar Term Loan | SOFR + 4.262% | 9.514% | 06/02/2028 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Technology | Renaissance Holding Corp. Initial Term Loan | SOFR + 4.250% | 9.095% | 04/05/2030 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Wireless | Windstream Services, LLC Incremental Term Loan | SOFR + 4.100% | 8.945% | 02/23/2027 2024-09-30 0001905824 Debt Investments | Second Lien Senior Secured | Technology | Altar BidCo, Inc. Initial Term Loan | SOFR + 5.600% | 10.399% | 02/01/2030 2024-09-30 0001905824 Debt Investments | Corporate Bonds | Automotive | Rivian Holdings/Auto LLC 144A | SOFR + 5.625% | 11.359% | 10/15/2026 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Technology | MH Sub I LLC Term Loan | SOFR + 4.250% | 9.095% | 05/03/2028 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Technology | Planview Parent, Inc. Incremental Term Loan | SOFR + 3.750% | 8.354% | 12/17/2027 2024-09-30 0001905824 Debt Investments | Senior Unsecured | Consumer Service | LEAF Home Solutions Note | 12% | 02/26/2027 2024-09-30 0001905824 Debt Investments | Senior Unsecured | Technology | GCOM | 17% | 02/16/2029 2024-09-30 0001905824 Debt Investments | Second Lien Senior Secured | Chemical | K2 Pure Solutions Nocal Holding Term Loan | 17% | 01/30/2029 2024-09-30 0001905824 Short-Term Investments | U.S. Treasury Bills | U.S. Treasury Bill | 4.586% | 10/29/2024 2024-09-30 0001905824 Short-Term Investments | U.S. Treasury Bills | U.S. Treasury Bill | 4.537% | 10/31/2024 2024-09-30 0001905824 Short-Term Investments | U.S. Treasury Bills | U.S. Treasury Bill | 4.592% | 11/12/2024 2024-09-30 0001905824 Short-Term Investments | U.S. Treasury Bills | U.S. Treasury Bill | 4.491% | 12/19/2024 2024-09-30 0001905824 Short-Term Investments | U.S. Treasury Bills | U.S. Treasury Bill | 4.49 %| 12/24/2024 2024-09-30 0001905824 Short-Term Investments | U.S. Treasury Bills | U.S. Treasury Bill | 4.527% | 10/24/2024 2024-09-30 0001905824 Debt Investments | Warrants | Retailers | West Marine/Rising Tide Holdings, Inc. | 09/08/2028 2024-09-30 0001905824 Debt Investments | Warrants | Technology | GCOM | 08/11/2033 2024-09-30 0001905824 Debt Investments | Common Stocks | Retailers | West Marine/Rising Tide Holdings, Inc. 2024-09-30 0001905824 Debt Investments | Common Stocks | Chemicals | K2 Propco Class S Units 2024-09-30 0001905824 Debt Investments | Common Stocks | Chemicals | K2 Pure Solutions Class S Units 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Packaging | Total Packaging 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Pharmaceuticals | Total Pharmaceuticals 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Retailers | Total Retailers 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Insurance Life | Total Insurance Life 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | IT Services | Total IT Services 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Food and Beverage | Total Food and Beverage 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Healthcare | Total Healthcare 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Industrial Other | Total Industrial Other 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Entertainment | Total Entertainment 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Financial Other | Total Financial Other 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Chemicals | Total Chemicals 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Consumer Services | Total Consumer Services 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Diversified Manufacturing | Total Diversified Manufacturing 2024-09-30 0001905824 Short-Term Investments | Total U.S. Treasury Bills 2024-09-30 0001905824 Total Short-Term Investments 2024-09-30 0001905824 Total Non-Controlled Non-Affiliated Investments 2024-09-30 0001905824 Debt Investment | Second Lien Senior Secured | Total Technology 2024-09-30 0001905824 Debt Investments | Common Stocks | Retailers | Total Retailers 2024-09-30 0001905824 Debt Investments | Common Stocks | Total Common Stocks 2024-09-30 0001905824 Debt Investments | Warrants | Technology | Total Technology 2024-09-30 0001905824 Debt Investments | Warrants | Total Warrants 2024-09-30 0001905824 Debt Investments | Corporate Bonds | Automotive | Total Automotive 2024-09-30 0001905824 Debt Investments | Corporate Bonds | Total Corporate Bonds 2024-09-30 0001905824 Debt Investments | Common Stocks | Chemicals | Total Chemicals 2024-09-30 0001905824 Debt Investments | Senior Unsecured | Consumer Services | Total Consumer Services 2024-09-30 0001905824 Debt Investments | Senior Unsecured | Technology | Total Technology 2024-09-30 0001905824 Debt Investments | Total Senior Unsecured 2024-09-30 0001905824 Debt Investments | Total Debt Investments 2024-09-30 0001905824 Debt Investments | Total Second Lien Senior Secured 2024-09-30 0001905824 Debt Investments | First Lien Senior Secured | Total Wireless 2024-09-30 0001905824 Debt Investments | Total First Lien Senior Secured 2024-09-30 0001905824 Debt Investments | Second Lien Senior Secured | Total Chemical 2024-09-30 0001905824 Debt Investment | First Lien Senior Secured | Total Technology 2024-09-30 0001905824 Debt Investments | Warrants | Retailers | Total Retailers 2024-09-30 0001905824 us-gaap:LineOfCreditMember 2024-09-30 0001905824 ck0001905824:RoyalBankOfCanadaTwoMember us-gaap:ForeignExchangeForwardMember us-gaap:LongMember 2024-09-30 0001905824 ck0001905824:WellsFargoBankNaTwoMember us-gaap:ForeignExchangeForwardMember us-gaap:ShortMember 2024-09-30 0001905824 ck0001905824:StandardCharteredBankTwoMember us-gaap:ForeignExchangeForwardMember us-gaap:LongMember 2024-09-30 0001905824 ck0001905824:RoyalBankOfCanadaTwoMember us-gaap:ForeignExchangeForwardMember us-gaap:ShortMember 2024-09-30 0001905824 ck0001905824:StandardCharteredBankTwoMember us-gaap:ForeignExchangeForwardMember us-gaap:ShortMember 2024-09-30 0001905824 ck0001905824:RoyalBankOfCanadaOneMember us-gaap:ForeignExchangeForwardMember us-gaap:LongMember 2024-09-30 0001905824 ck0001905824:WellsFargoBankN.a.OneMember us-gaap:ForeignExchangeForwardMember us-gaap:ShortMember 2024-09-30 0001905824 ck0001905824:WellsFargoBankNaTwoMember us-gaap:ForeignExchangeForwardMember us-gaap:LongMember 2024-09-30 0001905824 ck0001905824:RoyalBankOfCanadaOneMember us-gaap:ForeignExchangeForwardMember us-gaap:ShortMember 2024-09-30 0001905824 ck0001905824:WellsFargoBankN.a.OneMember us-gaap:ForeignExchangeForwardMember us-gaap:LongMember 2024-09-30 0001905824 ck0001905824:StandardCharteredBankOneMember us-gaap:ForeignExchangeForwardMember us-gaap:ShortMember 2024-09-30 0001905824 ck0001905824:StandardCharteredBankOneMember us-gaap:ForeignExchangeForwardMember us-gaap:LongMember 2024-09-30 0001905824 ck0001905824:StandardCharteredBankMember us-gaap:ForeignExchangeForwardMember 2024-09-30 0001905824 ck0001905824:WellsFargoBankNAMember us-gaap:ForeignExchangeForwardMember 2024-09-30 0001905824 ck0001905824:RoyalBankOfCanadaMember us-gaap:ForeignExchangeForwardMember 2024-09-30 0001905824 ck0001905824:OrganizationalCostsMember ck0001905824:AdvisorMember 2023-12-31 0001905824 ck0001905824:SecondLienSecuredMember 2023-12-31 0001905824 ck0001905824:SeniorUnsecuredNotesMember 2023-12-31 0001905824 ck0001905824:FirstLienSecuredMember 2023-12-31 0001905824 us-gaap:CommonStockMember 2023-12-31 0001905824 us-gaap:WarrantMember 2023-12-31 0001905824 us-gaap:CorporateBondSecuritiesMember 2023-12-31 0001905824 us-gaap:ShortTermInvestmentsMember 2023-12-31 0001905824 us-gaap:FoodAndBeverageMember 2023-12-31 0001905824 ck0001905824:IndustrialOtherMember 2023-12-31 0001905824 ck0001905824:DiversifiedManufacturingMember 2023-12-31 0001905824 ck0001905824:FinancialOtherMember 2023-12-31 0001905824 ck0001905824:TreasuryBillsMember 2023-12-31 0001905824 ck0001905824:ItSerivesMember 2023-12-31 0001905824 ck0001905824:WirelessMember 2023-12-31 0001905824 ck0001905824:PharmaceuticalsMember 2023-12-31 0001905824 ck0001905824:RetailersMember 2023-12-31 0001905824 us-gaap:TechnologySectorMember 2023-12-31 0001905824 us-gaap:HealthcareSectorMember 2023-12-31 0001905824 ck0001905824:InsuranceLifeMember 2023-12-31 0001905824 ck0001905824:PackagingMember 2023-12-31 0001905824 ck0001905824:AutomotiveIndustryMember 2023-12-31 0001905824 ck0001905824:ConsumerServiceMember 2023-12-31 0001905824 us-gaap:EntertainmentMember 2023-12-31 0001905824 us-gaap:ChemicalsSectorMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel1Member ck0001905824:FirstLienseniorsecuredNotesMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel2Member ck0001905824:FirstLienseniorsecuredNotesMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:FirstLienseniorsecuredNotesMember 2023-12-31 0001905824 ck0001905824:FirstLienseniorsecuredNotesMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:CommonStockMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel1Member us-gaap:WarrantMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel2Member us-gaap:WarrantMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:WarrantMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel1Member 2023-12-31 0001905824 us-gaap:FairValueInputsLevel2Member 2023-12-31 0001905824 us-gaap:FairValueInputsLevel3Member 2023-12-31 0001905824 us-gaap:FairValueInputsLevel1Member us-gaap:CommonStockMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel2Member us-gaap:CommonStockMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:CorporateBondSecuritiesMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel1Member us-gaap:ShortTermInvestmentsMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel2Member us-gaap:ShortTermInvestmentsMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:ShortTermInvestmentsMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel1Member ck0001905824:SeniorUnsecuredNotesMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel2Member ck0001905824:SeniorUnsecuredNotesMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:SeniorUnsecuredNotesMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel1Member us-gaap:CorporateBondSecuritiesMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel2Member us-gaap:CorporateBondSecuritiesMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel1Member ck0001905824:SecondLienseniorsecuredMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel2Member ck0001905824:SecondLienseniorsecuredMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:SecondLienseniorsecuredMember 2023-12-31 0001905824 ck0001905824:SecondLienseniorsecuredMember 2023-12-31 0001905824 Corporate Bonds | Automotive | Rivian Holdings/Auto LLC 144A | SOFR + 5.625% | 11.493 % | 10/15/2026 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Technology | MH Sub I, LLC Term Loan | SOFR + 4.250% | 9.606 % | 05/03/2028 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Technology | Planview Parent, Inc. Closing Date Term Loan | SOFR + 4.262% | 9.610 % | 12/17/2027 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Technology | Polaris Newco, LLC Dollar Term Loan | SOFR + 4.114% | 9.470 % | 06/02/2028 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Technology | TIBCO Software, Inc. Dollar Term Loan B | SOFR + 4.600% | 9.948 % | 03/30/2029 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Wireless | Windstream Services, LLC Incremental Term Loan | SOFR + 4.100% | 9.456 % | 02/23/2027 2023-12-31 0001905824 Debt Investments | Second Lien Senior Secured | Technology | Altar BidCo, Inc. Initial Term Loan | SOFR + 5.600% | 10.813 % | 02/01/2030 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Pharmaceuticals | Gainwell Acquisition Corp. Term B Loan | SOFR + 4.100% | 9.448 % | 10/01/2027 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Retailers | LBM Acquisition, LLC Initial Term Loan | SOFR + 3.850% | 9.206 % | 12/17/2027 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Retailers | Rising Tide Holdings, Inc. FILO Term Loan | SOFR + 9.000% | 14.356 % | 06/01/2026 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Technology | Endurance International Group Holdings, Inc. Initial Term Loan | SOFR + 3.928% | 9.422% | 02/10/2028 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Technology | Mavenir Systems, Inc. Initial Term Loan | SOFR + 5.012% | 10.390 % | 08/18/2028 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Technology | McAfee Corp. Term Loan | SOFR + 3.850% | 9.193 % | 03/01/2029 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Healthcare | U.S. Renal Care, Inc. Closing Date Term Loan | SOFR + 5.356% | 10.470 % | 06/20/2028 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Insurance Life | Integrity Marketing Acquisition, LLC Delayed Draw Term Loan | SOFR + 6.000% | 11.388 % | 08/27/2026 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Insurance Life | Integrity Marketing Acquisition, LLC Incremental Term Loan | SOFR + 6.000% | 11.388 % | 08/27/2026 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | IT Services | Alorica, Inc. Term Loan | SOFR + 6.875% | 12.231 % | 12/21/2027 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Packaging | Clydesdale Acquisition Holdings, Inc. Seven Year Term Loan | SOFR + 4.275% | 9.631 % | 04/13/2029 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Packaging | LABL, Inc. Initial Dollar Term Loan | SOFR + 5.100% | 10.456 % | 10/29/2028 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Consumer Services | BCPE Empire Holdings, Inc. Extended Term Loan | SOFR + 4.750% | 10.106 % | 12/11/2028 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Diversified Manufacturing | TK Elevator Midco GmbH Facility B1 Loan | SOFR + 3.928% | 9.381 % | 07/30/2027 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Entertainment | AP Core Holdings II, LLC Term B-1 Loan | SOFR + 5.614% | 10.970 % | 09/01/2027 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Entertainment | AP Core Holdings II, LLC Term B-2 Loan | SOFR + 5.614% | 10.970 % | 09/01/2027 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Entertainment | PLNTF Holdings, LLC Initial Term Loan | SOFR + 8.262% | 13.633 % | 03/22/2026 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Financial Other | Asurion, LLC B-8 Term Loan | SOFR + 3.364% | 8.720 % | 12/23/2026 2023-12-31 0001905824 Short-Term Investments | U.S. Treasury Bills | U.S. Treasury Bill | 0.000 % | 01/02/2024 2023-12-31 0001905824 Short-Term Investments | U.S. Treasury Bills | U.S. Treasury Bill | 4.820 % | 01/23/2024 2023-12-31 0001905824 Short-Term Investments | U.S. Treasury Bills | U.S. Treasury Bill | 5.094 % | 02/20/2024 2023-12-31 0001905824 Short-Term Investments | U.S. Treasury Bills | U.S. Treasury Bill | 5.096 % | 03/14/2024 2023-12-31 0001905824 Short-Term Investments | U.S. Treasury Bills | U.S. Treasury Bill | 5.137 % | 03/28/2024 2023-12-31 0001905824 Debt Investments | Senior Unsecured | Consumer Services | LEAF Home Solutions Note | 12.000% | 02/26/2027 2023-12-31 0001905824 Debt Investments | Senior Unsecured | Technology | GCOM | 17.000% | 02/16/2029 2023-12-31 0001905824 Warrants | Retailers | West Marine/Rising Tide Holdings, Inc. | 09/08/2028 2023-12-31 0001905824 Warrants | Technology | GCOM | 08/11/2033 2023-12-31 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansOneMember us-gaap:MeasurementInputDiscountRateMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:CommonStockMember ck0001905824:MeasurementInputDiscountRateRevenueMultipleMember ck0001905824:DiscountedCashFlowComparableMultipleMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:WarrantMember us-gaap:MeasurementInputEbitdaMultipleMember ck0001905824:ValuationComparableMultipleMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:SeniorUnsecuredNotesMember us-gaap:MeasurementInputDiscountRateMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2023-12-31 0001905824 Common Stocks | Retailers | West Marine/Rising Tide Holdings, Inc. 2023-12-31 0001905824 Debt Investments | Second Lien Senior Secured | Total Technology 2023-12-31 0001905824 Debt Investments | Second Lien Senior Secured | Total Second Lien Senior Secured 2023-12-31 0001905824 Total Non-Controlled Non-Affiliated Investments 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Total Consumer Services 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Total Technology 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Total Wireless 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Total First Lien Senior Secured 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Total Retailers 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Total IT Services 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Total Packaging 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Total Financial Other 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Total Healthcare 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Total Insurance Life 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Total Diversified Manufacturing 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Total Entertainment 2023-12-31 0001905824 Debt Investments | First Lien Senior Secured | Total Pharmaceuticals 2023-12-31 0001905824 Debt Investments | Senior Unsecured | Total Technology 2023-12-31 0001905824 Corporate Bonds | Automotive | Total Automotive 2023-12-31 0001905824 Debt Investments | Senior Unsecured | Total Senior Unsecured 2023-12-31 0001905824 Debt Investments | Total Debt Investments 2023-12-31 0001905824 Debt Investments | Senior Unsecured | Total Consumer Services 2023-12-31 0001905824 Short-Term Investments | Total U.S. Treasury Bills 2023-12-31 0001905824 Total Short-Term Investments 2023-12-31 0001905824 Total Warrants 2023-12-31 0001905824 Warrants | Technology | Total Technology 2023-12-31 0001905824 Common Stocks | Retailers | Total Retailers 2023-12-31 0001905824 Common Stocks | Total Common Stocks 2023-12-31 0001905824 Corporate Bonds | Automotive | Total Corporate Bonds 2023-12-31 0001905824 srt:MinimumMember 2023-12-31 0001905824 ck0001905824:AdvisorMember 2023-12-31 0001905824 ck0001905824:OneMonthSofrMember 2023-12-31 0001905824 ck0001905824:ThreeMonthSofrMember 2023-12-31 0001905824 ck0001905824:SixMonthSofrMember 2023-12-31 0001905824 Warrants | Retailers | Total Retailers 2023-12-31 0001905824 country:US 2023-12-31 0001905824 ck0001905824:AdministrationAgreementMember us-gaap:RelatedPartyMember 2023-01-01 2023-09-30 0001905824 ck0001905824:AdvisoryAgreementMember us-gaap:RelatedPartyMember 2023-01-01 2023-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansTwoMember 2023-01-01 2023-09-30 0001905824 us-gaap:FairValueInputsLevel3Member 2023-01-01 2023-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansFourMember 2023-01-01 2023-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansThreeMember 2023-01-01 2023-09-30 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:WarrantMember 2023-01-01 2023-09-30 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:CommonStockMember 2023-01-01 2023-09-30 0001905824 us-gaap:LineOfCreditMember 2023-01-01 2023-09-30 0001905824 ck0001905824:AdvisorMember 2023-01-01 2023-09-30 0001905824 us-gaap:ForeignExchangeForwardMember 2023-01-01 2023-09-30 0001905824 ck0001905824:AdvisoryAgreementMember us-gaap:RelatedPartyMember 2023-07-01 2023-09-30 0001905824 ck0001905824:AdministrationAgreementMember us-gaap:RelatedPartyMember 2023-07-01 2023-09-30 0001905824 us-gaap:LineOfCreditMember 2023-07-01 2023-09-30 0001905824 ck0001905824:AdvisorMember 2023-07-01 2023-09-30 0001905824 us-gaap:ForeignExchangeForwardMember 2023-07-01 2023-09-30 0001905824 ck0001905824:PrivatelyNegotiatedLoansAndEquityInvestmentsMember 2024-01-01 2024-09-30 0001905824 ck0001905824:PimcoEntitiesMember 2024-01-01 2024-09-30 0001905824 ck0001905824:AdvisoryAgreementMember us-gaap:RelatedPartyMember 2024-01-01 2024-09-30 0001905824 ck0001905824:AdministrationAgreementMember us-gaap:RelatedPartyMember 2024-01-01 2024-09-30 0001905824 ck0001905824:DirectorsFeeMember us-gaap:RelatedPartyMember 2024-01-01 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansTwoMember 2024-01-01 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:WarrantMember 2024-01-01 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansThreeMember 2024-01-01 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansFourMember 2024-01-01 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:CommonStockMember 2024-01-01 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member 2024-01-01 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansOneMember us-gaap:MeasurementInputDiscountRateMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2024-01-01 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansTwoMember ck0001905824:MeasurementInputBrokerQuoteMember ck0001905824:ThirdPartyVendorMember 2024-01-01 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansThreeMember ck0001905824:MeasurementInputPurchasePriceMember ck0001905824:ValuationRecentTransactionMember 2024-01-01 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:SeniorUnsecuredNotesMember us-gaap:MeasurementInputDiscountRateMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2024-01-01 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:CommonStockMember us-gaap:MeasurementInputEbitdaMultipleMember ck0001905824:ValuationComparableMultipleMember 2024-01-01 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:CommonStockMember ck0001905824:MeasurementInputDiscountRateRevenueMultipleMember ck0001905824:DiscountedCashFlowComparableMultipleMember 2024-01-01 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:WarrantMember us-gaap:MeasurementInputEbitdaMultipleMember ck0001905824:ValuationComparableMultipleMember 2024-01-01 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansOneMember us-gaap:MeasurementInputDiscountRateMember srt:MinimumMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2024-01-01 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:CommonStockMember ck0001905824:MeasurementInputDiscountRateRevenueMultipleMember srt:MinimumMember ck0001905824:DiscountedCashFlowComparableMultipleMember 2024-01-01 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:CommonStockMember ck0001905824:MeasurementInputDiscountRateRevenueMultipleMember srt:MaximumMember ck0001905824:DiscountedCashFlowComparableMultipleMember 2024-01-01 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:WarrantMember us-gaap:MeasurementInputEbitdaMultipleMember srt:MinimumMember ck0001905824:ValuationComparableMultipleMember 2024-01-01 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:WarrantMember us-gaap:MeasurementInputEbitdaMultipleMember srt:MaximumMember ck0001905824:ValuationComparableMultipleMember 2024-01-01 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansOneMember us-gaap:MeasurementInputDiscountRateMember srt:MaximumMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2024-01-01 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansTwoMember ck0001905824:MeasurementInputBrokerQuoteMember srt:MinimumMember ck0001905824:ThirdPartyVendorMember 2024-01-01 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansTwoMember ck0001905824:MeasurementInputBrokerQuoteMember srt:MaximumMember ck0001905824:ThirdPartyVendorMember 2024-01-01 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:SeniorUnsecuredNotesMember us-gaap:MeasurementInputDiscountRateMember srt:MinimumMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2024-01-01 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:SeniorUnsecuredNotesMember us-gaap:MeasurementInputDiscountRateMember srt:MaximumMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2024-01-01 2024-09-30 0001905824 us-gaap:LineOfCreditMember 2024-01-01 2024-09-30 0001905824 ck0001905824:AdvisorMember 2024-01-01 2024-09-30 0001905824 ck0001905824:StandardCharteredBankOneMember us-gaap:ForeignExchangeForwardMember 2024-01-01 2024-09-30 0001905824 ck0001905824:WellsFargoBankN.a.OneMember us-gaap:ForeignExchangeForwardMember 2024-01-01 2024-09-30 0001905824 ck0001905824:WellsFargoBankNaTwoMember us-gaap:ForeignExchangeForwardMember 2024-01-01 2024-09-30 0001905824 ck0001905824:RoyalBankOfCanadaOneMember us-gaap:ForeignExchangeForwardMember 2024-01-01 2024-09-30 0001905824 ck0001905824:StandardCharteredBankTwoMember us-gaap:ForeignExchangeForwardMember 2024-01-01 2024-09-30 0001905824 ck0001905824:RoyalBankOfCanadaTwoMember us-gaap:ForeignExchangeForwardMember 2024-01-01 2024-09-30 0001905824 us-gaap:ForeignExchangeForwardMember 2024-01-01 2024-09-30 0001905824 ck0001905824:RoyalBankOfCanadaMember us-gaap:ForeignExchangeForwardMember 2024-01-01 2024-09-30 0001905824 ck0001905824:StandardCharteredBankMember us-gaap:ForeignExchangeForwardMember 2024-01-01 2024-09-30 0001905824 ck0001905824:WellsFargoBankNAMember us-gaap:ForeignExchangeForwardMember 2024-01-01 2024-09-30 0001905824 ck0001905824:AdvisoryAgreementMember us-gaap:RelatedPartyMember 2024-07-01 2024-09-30 0001905824 ck0001905824:AdministrationAgreementMember us-gaap:RelatedPartyMember 2024-07-01 2024-09-30 0001905824 us-gaap:LineOfCreditMember 2024-07-01 2024-09-30 0001905824 ck0001905824:AdvisorMember 2024-07-01 2024-09-30 0001905824 us-gaap:ForeignExchangeForwardMember 2024-07-01 2024-09-30 0001905824 ck0001905824:PimcoEntitiesMember 2022-06-10 0001905824 ck0001905824:PimcoEntitiesMember 2022-06-10 2022-12-31 0001905824 ck0001905824:PimcoEntitiesMember 2022-06-30 2022-06-30 0001905824 ck0001905824:AdvisoryAgreementMember 2022-06-30 2022-06-30 0001905824 ck0001905824:PimcoEntitiesMember 2022-06-30 0001905824 ck0001905824:PIMCOCapitalSolutionsMember 2024-01-25 2024-01-25 0001905824 ck0001905824:PIMCOCapitalSolutionsUSFeederLPMember us-gaap:CommonStockMember 2024-01-25 2024-01-25 0001905824 ck0001905824:TenderOfferMember 2024-01-25 2024-01-25 0001905824 srt:MaximumMember ck0001905824:PIMCOCapitalSolutionsUSFeederLPMember us-gaap:CommonStockMember 2024-01-25 2024-01-25 0001905824 srt:MinimumMember ck0001905824:PIMCOCapitalSolutionsUSFeederLPMember us-gaap:CommonStockMember 2024-01-25 2024-01-25 0001905824 ck0001905824:TenderOfferMember 2024-01-25 0001905824 ck0001905824:PIMCOCapitalSolutionsMember 2024-01-25 0001905824 ck0001905824:PIMCOCapitalSolutionsUSFeederLPMember us-gaap:CommonStockMember 2024-01-25 0001905824 ck0001905824:DirectorsFeeMember us-gaap:RelatedPartyMember 2023-01-01 2023-12-31 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:CommonStockMember ck0001905824:MeasurementInputDiscountRateRevenueMultipleMember ck0001905824:DiscountedCashFlowComparableMultipleMember 2023-01-01 2023-12-31 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:WarrantMember us-gaap:MeasurementInputEbitdaMultipleMember ck0001905824:ValuationComparableMultipleMember 2023-01-01 2023-12-31 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansOneMember us-gaap:MeasurementInputDiscountRateMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2023-01-01 2023-12-31 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:SeniorUnsecuredNotesMember us-gaap:MeasurementInputDiscountRateMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2023-01-01 2023-12-31 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:CommonStockMember ck0001905824:MeasurementInputDiscountRateRevenueMultipleMember srt:MinimumMember ck0001905824:DiscountedCashFlowComparableMultipleMember 2023-01-01 2023-12-31 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:CommonStockMember ck0001905824:MeasurementInputDiscountRateRevenueMultipleMember srt:MaximumMember ck0001905824:DiscountedCashFlowComparableMultipleMember 2023-01-01 2023-12-31 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansOneMember us-gaap:MeasurementInputDiscountRateMember srt:MaximumMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2023-01-01 2023-12-31 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:SeniorUnsecuredNotesMember us-gaap:MeasurementInputDiscountRateMember srt:MinimumMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2023-01-01 2023-12-31 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:SeniorUnsecuredNotesMember us-gaap:MeasurementInputDiscountRateMember srt:MaximumMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2023-01-01 2023-12-31 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansOneMember us-gaap:MeasurementInputDiscountRateMember srt:MinimumMember us-gaap:ValuationTechniqueDiscountedCashFlowMember 2023-01-01 2023-12-31 0001905824 us-gaap:LineOfCreditMember 2023-06-19 0001905824 us-gaap:LineOfCreditMember us-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember 2023-06-19 2023-06-19 0001905824 us-gaap:LineOfCreditMember us-gaap:BaseRateMember 2023-06-19 2023-06-19 0001905824 us-gaap:LineOfCreditMember 2023-06-19 2023-06-19 0001905824 us-gaap:LineOfCreditMember us-gaap:BaseRateMember 2024-06-10 2024-06-10 0001905824 us-gaap:LineOfCreditMember ck0001905824:PriorToJuneNineteenTwoThousandTwentyFourMember 2024-06-19 2024-06-19 0001905824 us-gaap:LineOfCreditMember ck0001905824:PostJuneNineteenTwoThousandTwentyFourMember 2024-06-19 2024-06-19 0001905824 us-gaap:LineOfCreditMember 2023-06-19 2023-06-30 0001905824 ck0001905824:O2024Q3DividendsMember us-gaap:SubsequentEventMember 2024-11-06 2024-11-06 0001905824 ck0001905824:O2024Q3DividendsMember us-gaap:SubsequentEventMember 2024-11-06 0001905824 ck0001905824:AdvisoryAgreementMember 2023-09-30 0001905824 us-gaap:ForeignExchangeForwardMember 2023-09-30 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:WarrantMember 2022-12-31 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:CommonStockMember 2022-12-31 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansTwoMember 2022-12-31 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansThreeMember 2022-12-31 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansFourMember 2022-12-31 0001905824 us-gaap:FairValueInputsLevel3Member 2022-12-31 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansThreeMember 2023-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansFourMember 2023-09-30 0001905824 us-gaap:FairValueInputsLevel3Member 2023-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansTwoMember 2023-09-30 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:CommonStockMember 2023-09-30 0001905824 us-gaap:FairValueInputsLevel3Member us-gaap:WarrantMember 2023-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansFourMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansTwoMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansThreeMember 2023-12-31 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansFourMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansThreeMember 2024-09-30 0001905824 us-gaap:FairValueInputsLevel3Member ck0001905824:TermLoansTwoMember 2024-09-30 iso4217:USD xbrli:shares xbrli:pure iso4217:USD xbrli:shares
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM
10-Q
 
 
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER:
814-01549
 
 
PIMCO Capital Solutions BDC Corp.
(Exact name of registrant as specified in its charter)
 
 
 
Delaware
 
87-4705230
(State of incorporation)
 
(I.R.S. Employer
Identification No.)
650 Newport Center Drive
Newport Beach,
CA
92660
(Address of principal executive offices)
(949)
720-6000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
 
Trading
Symbol(s)
 
Name of each exchange
on which registered
 
 
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.001 per share
(Title of Class)
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T
(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
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 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      Accelerated filer  
Non-accelerated
filer
     Smaller reporting company  
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 
The issuer had 21,602,602 shares of common stock, $0.001 par value per share, outstanding as of November 13, 2024.
 
 
 


Table of Contents

PIMCO CAPITAL SOLUTIONS BDC CORP.

FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2024

Table of Contents

 

    

INDEX

   PAGE
NO.
 

PART I.

   FINANCIAL INFORMATION   

Item 1.

   Consolidated Financial Statements      2  
   Consolidated Statements of Assets and Liabilities as of September 30, 2024 and December 31, 2023 (Unaudited)      2  
   Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited)      3  
   Consolidated Statements of Changes in Net Assets for the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited)      4  
   Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023 (Unaudited)      5  
   Consolidated Schedules of Investments as of September 30, 2024 and December 31, 2023 (Unaudited)      6  
   Notes to Unaudited Consolidated Financial Statements      11  

Item 2.

   Management’s Discussion and Analysis of Financial Condition and Results of Operations      26  

Item 3.

   Quantitative and Qualitative Disclosures About Market Risk      34  

Item 4.

   Controls and Procedures      35  

PART II.

   OTHER INFORMATION   

Item 1.

   Legal Proceedings      36  

Item 1A.

   Risk Factors      36  

Item 2.

   Unregistered Sales of Equity Securities and Use of Proceeds      36  

Item 3.

   Defaults Upon Senior Securities      36  

Item 4.

   Mine Safety Disclosures      36  

Item 5.

   Other Information      36  

Item 6.

   Exhibits      37  

SIGNATURES

        38  

 

 

1


Table of Contents
000
PART I. FINANCIAL INFORMATION
 
Item 1.
Consolidated Financial Statements
PIMCO Capital Solutions BDC Corp.
Consolidated Statements of Assets and Liabilities
(Amounts in thousands, except share and per share)
(Unaudited)
 
    
September 30, 2024
   
December 31, 2023
 
Assets
    
Investments at fair value
    
Non-controlled,
non-affiliated
investments, at fair value (cost of $211,709 and $220,859, respectively)
   $ 208,185     $ 215,975  
Financial derivative instruments
    
Over the counter
     9       —   
Cash
     934       2,306  
Restricted cash
     1,649       1,009  
Foreign currency, at value (cost of $12 and $0, respectively)
     10       —   
Interest receivable
     2,147       2,428  
Receivable for paydowns of investments
     129       59  
Organizational costs paid by Advisor
     —        194  
Deferred financing fee
     —        2,280  
  
 
 
   
 
 
 
Total Assets
  
$
213,063
 
 
$
224,251
 
  
 
 
   
 
 
 
Liabilities
    
Debt (net of deferred financing cost)
     11,559       —   
Financial derivative instruments
    
Over the counter
     32       —   
Payable for investments purchased
     100       —   
Interest payable
     1,123       325  
Accrued administration fee
     74       87  
Organizational costs payable to Advisor
     1,152       1,153  
Offering costs payable to Advisor
     20       20  
Directors fee reimbursement to Advisor
     154       152  
Accrued legal fee
     272       153  
Accrued commitment fee
     173       171  
Other payable
     302       140  
  
 
 
   
 
 
 
Total Liabilities
  
$
14,961
 
 
$
2,201
 
  
 
 
   
 
 
 
Commitments & Contingencies (Note 8)
Net Assets
    
Common stock, $0.001 par value, 250,000,000 shares authorized, 21,602,602 and 25,387,884 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively
   $ 22     $ 25  
Paid-in-capital
in excess of par
     220,619       253,745  
Distributable earnings (loss)
     (22,539     (31,720
  
 
 
   
 
 
 
Total Net Assets
  
$
198,102
 
 
$
222,050
 
  
 
 
   
 
 
 
Total Liabilities and Net Assets
  
$
213,063
 
 
$
224,251
 
  
 
 
   
 
 
 
Net asset value per share
  
$
9.17
 
 
$
8.75
 
  
 
 
   
 
 
 
 
The accompanying notes are part of these unaudited consolidated financial statements.
 
2

Table of Contents
PIMCO Capital Solutions BDC Corp.
Consolidated Statements of Operations
(Amounts in thousands, except share and per share)
(Unaudited)
 
    
Three Months Ended
   
Nine Months Ended
 
    
September 30, 2024
   
September 30, 2023
   
September 30, 2024
   
September 30, 2023
 
Investment Income
        
From
non-controlled,
non-affiliated
investments:
        
Interest income
   $ 3,089     $ 4,003     $ 11,737     $ 14,053  
Payment
in-kind
interest
     2,785       2,952       6,031       6,327  
Other income
     45       45       147       54  
  
 
 
   
 
 
   
 
 
   
 
 
 
Total investment income
  
$
5,919
 
 
$
7,000
 
 
$
17,915
 
 
$
20,434
 
  
 
 
   
 
 
   
 
 
   
 
 
 
Expenses
        
Management fee
   $ 620     $ 753     $ 1,878     $ 2,233  
Directors fee
     42       61       128       184  
Administration fee
     74       90       223       268  
Interest expense
     1,634       63       2,261       70  
Tax expense
     40       21       124       22  
Offering costs
     —              —        10  
Legal expenses
     33       65       133       250  
Other expenses
     31       160       194       241  
Recoupment of prior expenses paid by the Advisor
     21       101       193       300  
  
 
 
   
 
 
   
 
 
   
 
 
 
Total expenses
  
$
2,495
 
 
$
1,314
 
 
$
5,134
 
 
$
3,578
 
Less: Waivers (Note 3)
     (620     (753     (1,878     (2,233
  
 
 
   
 
 
   
 
 
   
 
 
 
Net expenses
  
 
1,875
 
 
 
561
 
 
 
3,256
 
 
 
1,345
 
Net investment income (loss)
  
$
4,044
 
 
$
6,439
 
 
$
14,659
 
 
$
19,089
 
  
 
 
   
 
 
   
 
 
   
 
 
 
Net realized and unrealized gains (losses) on investment transactions:
        
Net realized gain (loss) from:
        
Non-controlled/non-affiliated
investments
     77       (15,073     (339     (32,995
Foreign currency
     (15           (15      
  
 
 
   
 
 
   
 
 
   
 
 
 
Total net realized gain (loss)
     62       (15,073     (354     (32,995
  
 
 
   
 
 
   
 
 
   
 
 
 
Net change in unrealized appreciation (depreciation) from:
        
Non-controlled/non-affiliated
investments
     725       7,109       1,360       23,844  
Over the counter financial derivative instruments
     (23           (23      
Foreign currency
     (2           (2      
  
 
 
   
 
 
   
 
 
   
 
 
 
Total change in unrealized appreciation (depreciation)
     700       7,109       1,335       23,844  
  
 
 
   
 
 
   
 
 
   
 
 
 
Net realized and unrealized gains (losses)
  
 
762
 
 
 
(7,964
 
 
981
 
 
 
(9,151
  
 
 
   
 
 
   
 
 
   
 
 
 
Net Increase (Decrease) in Net Assets Resulting from Operations
  
$
4,806
 
 
$
(1,525
 
$
15,640
 
 
$
9,938
 
  
 
 
   
 
 
   
 
 
   
 
 
 
Weighted average shares outstanding (basic and diluted)
     21,602,602       25,387,884       21,934,160       25,387,884  
Net Investment income (loss) per share (basic and diluted)
   $ 0.19     $ 0.25     $ 0.67     $ 0.75  
Earnings (loss) per share (basic and diluted)
   $ 0.22     $ (0.06   $ 0.71     $ 0.39  
 
The accompanying notes are part of these unaudited consolidated financial statements.
 
3

Table of Contents
PIMCO Capital Solutions BDC Corp.
Consolidated Statements of Changes in Net Assets
(Amounts in
thousands
, except share and per share)
(Unaudited)
 
    
Three Months Ended
   
Nine Months Ended
 
    
September 30, 2024
   
September 30, 2023
   
September 30, 2024
   
September 30, 2023
 
Increase (Decrease) in Net Assets Resulting from
        
Operations:
        
Net investment income
   $ 4,044     $ 6,439     $ 14,659     $ 19,089  
Net realized gain (loss)
     62       (15,073     (354     (32,995
Net change in unrealized appreciation (depreciation)
     700       7,109       1,335       23,844  
  
 
 
   
 
 
   
 
 
   
 
 
 
Net Increase (Decrease) in Net Assets Resulting from Operations
  
$
4,806
 
 
$
(1,525
 
$
15,640
 
 
$
9,938
 
  
 
 
   
 
 
   
 
 
   
 
 
 
Distributions to stockholders from:
        
Distributable earnings
     (3,250     (4,800     (6,350     (7,800
  
 
 
   
 
 
   
 
 
   
 
 
 
Total distributions to stockholders
  
 
(3,250
 
 
(4,800
 
 
(6,350
 
 
(7,800
  
 
 
   
 
 
   
 
 
   
 
 
 
Capital Share Transactions
        
Redemption of common shares
   $ —      $ —      $ (33,238   $ —   
  
 
 
   
 
 
   
 
 
   
 
 
 
Net Increase (Decrease) in Net Assets Resulting from
        
Capital Share Transactions
  
$
— 
 
 
$
— 
 
 
$
(33,238
 
$
— 
 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total Increase (Decrease) in Net Assets
  
$
1,556
 
 
$
(6,325
 
$
(23,948
 
$
2,138
 
  
 
 
   
 
 
   
 
 
   
 
 
 
Net Assets
        
Beginning of period
   $ 196,546     $ 242,258     $ 222,050     $ 233,795  
  
 
 
   
 
 
   
 
 
   
 
 
 
End of period
   $ 198,102     $ 235,933     $ 198,102     $ 235,933  
  
 
 
   
 
 
   
 
 
   
 
 
 
Capital Share Activity
        
Shares redeemed
     —        —        (3,785,282     —   
  
 
 
   
 
 
   
 
 
   
 
 
 
Net Increase (Decrease) in Shares Outstanding
  
 
— 
 
 
 
— 
 
 
 
(3,785,282
 
 
— 
 
  
 
 
   
 
 
   
 
 
   
 
 
 
 
The accompanying notes are part of these unaudited consolidated financial statements.
 
4

Table of Contents
PIMCO Capital Solutions BDC Corp.
Consolidated Statements of Cash Flows
(Amounts in thousands)
(Unaudited)
 
    
Nine Months Ended
 
    
September 30, 2024
   
September 30, 2023
 
Cash Flows From Operating Activities:
    
Net Increase (Decrease) in Net Assets from Operations
   $ 15,640     $ 9,938  
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used for) operating activities:
    
Purchases of long-term securities
     (42,953     (35,907
Proceeds from sales of long-term securities
     37,341       20,821  
Sales (Purchases) of short-term portfolio investments, net
     22,523       14,586  
Net change in unrealized (appreciation) depreciation on investments
     (1,360     (23,844
Net change in unrealized (appreciation) depreciation on over the counter financial derivative instruments
     23       —   
Net realized (gain) loss on investments
     339       32,995  
Payment
in-kind
interest
     (6,031     (6,327
Net (accretion) on investments
     (1,802     (2,105
Paydown (gain)
     (267     (96
Amortization of deferred financing cost
     202       70  
Amortization of deferred offering costs
     —        10  
Increase/(decrease) in operating assets and liabilities:
    
(Increase) decrease in interest receivable
     281       (760
(Increase) decrease in paydown receivable
     (70     —   
(Increase) decrease in organizational costs paid by Advisor
     194       301  
(Increase) decrease in due from affiliate
     —        2  
Increase (decrease) in due to affiliate
     —        (435
Increase (decrease) in interest payable
     798       —   
Increase (decrease) in accrued administration fee
     (13     (4
Increase (decrease) in organizational costs payable to Advisor
     (1     —   
Increase (decrease) in payable for investments purchased
     100       —   
Increase (decrease) in directors fee reimbursement to Advisor
     2       (61
Increase (decrease) in accrued legal fee
     119       250  
Increase (decrease) in accrued commitment fee
     2       —   
Increase (decrease) in other payable
     162       222  
Increase (decrease) in other liabilities
     —        185  
  
 
 
   
 
 
 
Net cash provided by (used for) operating activities
   $ 25,229     $ 9,841  
  
 
 
   
 
 
 
Cash Flows From Financing Activities:
    
Proceeds from debt issuance
   $ 13,640     $ —   
Redemption of common shares
     (33,238     —   
Distributions paid
     (6,350     (7,800
Deferred financing fees paid
     (3     (2,423
  
 
 
   
 
 
 
Net cash provided by (used for) financing activities
  
$
(25,951
 
$
(10,223
  
 
 
   
 
 
 
Net increase (decrease) in cash, restricted cash and foreign currency
     (722     (382
  
 
 
   
 
 
 
Cash, restricted cash and foreign currency, beginning of period
     3,315       800  
  
 
 
   
 
 
 
Cash, restricted cash and foreign currency, end of period
   $ 2,593     $ 418  
  
 
 
   
 
 
 
Supplemental and Cash Flow Information:
    
Interest paid during the period
   $ 1,261     $  
Tax expenses paid during the period
   $ 84     $ 22  
  
 
 
   
 
 
 
Supplemental and
Non-Cash
Information:
    
Exchange of investments
     25,652       12,900  
  
 
 
   
 
 
 
 
The accompanying notes are part of these unaudited consolidated financial statements.
 
5

Table of Contents
PIMCO Capital Solutions BDC Corp.
Consolidated Schedule of Investments as of September 30, 2024
(Amounts in thousands, except share amounts)
(Unaudited)
 
Investments
(1)
Non-Controlled,
Non-Affiliated
Investments
  
Reference Rate

Spread
(4)
 
Interest

Rate
   
Maturity

Date
    
Par Amount/

Shares
    
Cost
    
Fair Value
    
Percentage of

Net Assets
 
Debt Investments
                  
First Lien Senior Secured
                  
Chemicals
                  
Puris LLC Term Loan
(3)(8)
   SOFR + 5.750%     10.418     06/30/2031        4,868      $ 4,796      $ 4,863        2.45
            
 
 
    
 
 
    
 
 
 
Total Chemicals
               4,796        4,863        2.45
Consumer Services
                  
BCPE Empire Holdings, Inc. Term Loan
(8)
   SOFR + 4.000%     8.845     12/11/2028        4,978        4,987        4,986        2.52
            
 
 
    
 
 
    
 
 
 
Total Consumer Services
               4,987        4,986        2.52
Diversified Manufacturing
                  
TK Elevator Midco GmbH Facility B2 Loan
(2)(10)
   SOFR + 3.500%     8.588     04/30/2030        2,475        2,475        2,483        1.25
            
 
 
    
 
 
    
 
 
 
Total Diversified Manufacturing
               2,475        2,483        1.25
Entertainment
                  
AP Core Holdings II, LLC Term
B-2
Loan
   SOFR + 5.614%     10.460     09/01/2027        968        959        888        0.45
SubCalidora 2 S.a r.l. Term Loan
(2)(3)(11)
   EURIBOR + 5.750%     9.340     08/14/2029        2,384        2,522        2,601        1.31
            
 
 
    
 
 
    
 
 
 
Total Entertainment
               3,481        3,489        1.76
Financial Other
                  
Asurion, LLC
B-12
Term Loan
(8)
   SOFR + 4.250%     9.095     09/19/2030        5,011        4,953        4,930        2.49
Nuvei Technologies Corp. Term Loan
   SOFR + 3.000%     8.326     07/21/2031        100        100        99        0.05
            
 
 
    
 
 
    
 
 
 
Total Financial Other
               5,053        5,029        2.54
Food and Beverage
                  
Triton Water Holdings, Inc. Initial Term Loan
(8)
   SOFR + 3.512%     8.115     03/31/2028        4,987        4,987        4,984        2.52
            
 
 
    
 
 
    
 
 
 
Total Food and Beverage
               4,987        4,984        2.52
Healthcare
                  
U.S. Renal Care, Inc. Closing Date Term Loan
   SOFR + 5.114%     9.960     06/20/2028        1,579        1,031        1,445        0.73
            
 
 
    
 
 
    
 
 
 
Total Healthcare
               1,031        1,445        0.73
Industrial Other
                  
Apex Service Partners, LLC Delayed Term Loan
(3)
   SOFR + 5.000%     9.857     10/24/2030        760        80        81        0.04
            
 
 
    
 
 
    
 
 
 
Total Industrial Other
               80        81        0.04
Insurance Life
                  
Integrity Marketing Acquisition, LLC Incremental Term Loan
(3)
   SOFR + 5.000%     10.081     08/25/2028        9,172        9,163        9,146        4.62
            
 
 
    
 
 
    
 
 
 
Total Insurance Life
               9,163        9,146        4.62
IT Services
                  
Alorica, Inc. Term Loan
(3)
   SOFR + 6.875%     11.720     12/21/2027        11,565        11,477        11,397        5.75
            
 
 
    
 
 
    
 
 
 
Total IT Services
               11,477        11,397        5.75
Packaging
                  
Clydesdale Acquisition Holdings, Inc. Seven Year Term Loan
(8)
   SOFR + 3.175%     8.020     04/13/2029        1,819        1,760        1,812        0.92
LABL, Inc. Initial Dollar Term Loan
(8)
   SOFR + 5.100%     9.945     10/29/2028        5,000        4,901        4,897        2.47
            
 
 
    
 
 
    
 
 
 
Total Packaging
               6,661        6,709        3.39
Pharmaceuticals
                  
Gainwell Acquisition Corp. Term B Loan
(8)
   SOFR + 4.100%     8.704     10/01/2027        2,221        2,207        2,119        1.07
            
 
 
    
 
 
    
 
 
 
Total Pharmaceuticals
               2,207        2,119        1.07
Retailers
                  
LBM Acquisition, LLC Incremental Term Loan
(8)
   SOFR + 3.850%     8.968     06/06/2031        2,211        1,856        2,172        1.09
            
 
 
    
 
 
    
 
 
 
Total Retailers
               1,856        2,172        1.09
Technology
                  
Cloud Software Group, Inc. Term Loan
(8)
   SOFR + 4.000%     8.604     03/30/2029        2,481        2,489        2,474        1.25
CoreWeave Compute Acquisition Co. IV, LLC Initial Term Loan
(3)
   SOFR + 6.000%     10.604     05/16/2029        851        851        854        0.43
Cotiviti, Inc. Initial Term Loan
(3)
   SOFR + 3.250%     8.451     05/01/2031        4,987        4,994        4,991        2.52
Endurance International Group Holdings, Inc. Initial Term Loan
(8)
   SOFR + 3.614%     8.810     02/10/2028        6,841        6,590        6,066        3.06
Mavenir Systems, Inc. Initial Term Loan
(2)
   SOFR + 5.012%     10.073     08/18/2028        9,750        9,679        6,579        3.32
McAfee Corp. Term Loan
(8)
   SOFR + 3.250%     8.451     03/01/2029        2,340        2,211        2,334        1.18
 
The accompanying notes are part of these unaudited consolidated financial statements.
 
6

Table of Contents
PIMCO Capital Solutions BDC Corp.
Consolidated Schedule of Investments as of September 30, 2024
(Amounts in thousands, except share amounts)
(Unaudited)
 
Investments
(1)
Non-Controlled,
Non-Affiliated
Investments
  
Reference Rate

Spread
(4)
   
Interest

Rate
(5)
   
Maturity

Date
    
Par Amount/

Shares
    
Cost
    
Fair Value
    
Percentage of

Net Assets
 
Debt Investments
                  
First Lien Senior Secured
                  
Technology (continued)
                  
MH Sub I, LLC Term Loan
(8)
     SOFR + 4.250%       9.095     05/03/2028        2,475      $ 2,399      $ 2,462        1.24
Planview Parent, Inc. Incremental Term Loan
(8)
     SOFR + 3.750%       8.354     12/17/2027        6,858        6,871        6,871        3.47
Polaris Newco, LLC Dollar Term Loan
(8)
     SOFR + 4.262%       9.514     06/02/2028        2,382        2,323        2,345        1.19
Renaissance Holding Corp. Initial Term Loan
     SOFR + 4.250%       9.095     04/05/2030        4,987        4,994        4,991        2.52
            
 
 
    
 
 
    
 
 
 
Total Technology
               43,401        39,967        20.18
            
 
 
    
 
 
    
 
 
 
Wireless
                  
Windstream Services, LLC Incremental Term Loan
(3)
     SOFR + 4.100%       8.945     02/23/2027        7,000        6,783        7,000        3.53
            
 
 
    
 
 
    
 
 
 
Total Wireless
               6,783        7,000        3.53
            
 
 
    
 
 
    
 
 
 
Total First Lien Senior Secured
               108,438        105,870        53.44
            
 
 
    
 
 
    
 
 
 
Second Lien Senior Secured
                  
Chemicals
                  
K2 Pure Solutions Nocal Holding Term Loan
(3)(6)(9)
     N/A       17.000     01/30/2029        5,241        4,854        5,145        2.60
            
 
 
    
 
 
    
 
 
 
Total Chemicals
               4,854        5,145        2.60
Technology
                  
Altar BidCo, Inc. Initial Term Loan
     SOFR + 5.600%       10.399     02/01/2030        2,900        2,877        2,831        1.43
            
 
 
    
 
 
    
 
 
 
Total Technology
               2,877        2,831        1.43
            
 
 
    
 
 
    
 
 
 
Total Second Lien Senior Secured
               7,731        7,976        4.03
            
 
 
    
 
 
    
 
 
 
Senior Unsecured
                  
Consumer Services
                  
LEAF Home Solutions Note
(3)(6)(8)
     N/A       12.000     02/26/2027        36,219        36,127        35,192        17.76
            
 
 
    
 
 
    
 
 
 
Total Consumer Services
               36,127        35,192        17.76
Technology
                  
GCOM
(3)(6)(9)
     N/A       17.000     02/16/2029        15,084        12,649        12,971        6.55
            
 
 
    
 
 
    
 
 
 
Total Technology
               12,649        12,971        6.55
            
 
 
    
 
 
    
 
 
 
Total Senior Unsecured
               48,776        48,163        24.31
            
 
 
    
 
 
    
 
 
 
Total Debt Investments
               164,945        162,009        81.78
            
 
 
    
 
 
    
 
 
 
Corporate Bonds
                  
Automotive
                  
Rivian Holdings/Auto LLC 144A
(2)
     SOFR + 5.625%       11.359     10/15/2026        18,601        18,433        18,834        9.51
            
 
 
    
 
 
    
 
 
 
Total Automotive
               18,433        18,834        9.51
            
 
 
    
 
 
    
 
 
 
Total Corporate Bonds
               18,433        18,834        9.51
            
 
 
    
 
 
    
 
 
 
Common Stocks
                  
Chemicals
                  
K2 Propco Class S Units
(3)(7)(9)
     N/A       N/A       N/A        897        285        421        0.21
K2 Pure Solutions Class S Units
(3)(7)(9)
     N/A       N/A       N/A        113        36        53        0.03
            
 
 
    
 
 
    
 
 
 
Total Chemicals
               321        474        0.24
Retailers
                  
West Marine/Rising Tide Holdings, Inc.
(3)(7)
     N/A       N/A       N/A        25,000        359        158        0.08
            
 
 
    
 
 
    
 
 
 
Total Retailers
               359        158        0.08
            
 
 
    
 
 
    
 
 
 
Total Common Stocks
               680        632        0.32
            
 
 
    
 
 
    
 
 
 
Warrants
                  
Retailers
                  
West Marine/Rising Tide Holdings, Inc.
(3)(7)
     N/A       N/A       09/08/2028        47,166        —         —         0.00
            
 
 
    
 
 
    
 
 
 
Total Retailers
               —         —         0.00
Technology
                  
GCOM
(3)(7)(9)
     N/A       N/A       08/11/2033        2,491,250        2,491        1,546        0.78
            
 
 
    
 
 
    
 
 
 
Total Technology
               2,491        1,546        0.78
            
 
 
    
 
 
    
 
 
 
Total Warrants
               2,491        1,546        0.78
            
 
 
    
 
 
    
 
 
 
 
The accompanying notes are part of these unaudited consolidated financial statements.
 
7

Table of Contents
PIMCO Capital Solutions BDC Corp.
Consolidated Schedule of Investments as of September 30, 2024
(Amounts in thousands)
(Unaudited)
 
Investments
(1)
Non-Controlled,
Non-Affiliated
Investments
  
Reference Rate
Spread
(4)
    
Interest
Rate
(5)
   
Maturity
Date
    
Par
Amount/
Shares
    
Cost
    
Fair Value
    
Percentage of
Net Assets
 
Short-Term Investments
                   
U.S. Treasury Bills
                   
U.S. Treasury Bill
     N/A        4.527     10/24/2024        3,200      $ 3,190      $ 3,190        1.61
U.S. Treasury Bill
     N/A        4.586     10/29/2024        5,800        5,776        5,779        2.92
U.S. Treasury Bill
     N/A        4.537     10/31/2024        8,500        8,466        8,467        4.27
U.S. Treasury Bill
     N/A        4.592     11/12/2024        1,800        1,790        1,790        0.90
U.S. Treasury Bill
     N/A        4.491     12/19/2024        2,500        2,475        2,475        1.25
U.S. Treasury Bill
     N/A        4.490     12/24/2024        3,500        3,463        3,463        1.75
             
 
 
    
 
 
    
 
 
 
Total U.S. Treasury Bills
                25,160        25,164        12.70
             
 
 
    
 
 
    
 
 
 
Total Short-Term Investments
                25,160        25,164        12.70
             
 
 
    
 
 
    
 
 
 
Total
Non-Controlled,
Non-Affiliated
Investments
              $ 211,709      $ 208,185        105.09
             
 
 
    
 
 
    
 
 
 
Total Investments
              $ 211,709      $ 208,185        105.09
             
 
 
    
 
 
    
 
 
 
 
(1)
 
All investments are U.S. domiciled, unless otherwise indicated.
(2)
 
The investment is treated as a
non-qualifying
asset under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act’’). Under the 1940 Act, the Company cannot acquire any
non-qualifying
asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company’s total assets. As of September 30, 2024, total
non-qualifying
assets at fair value represented 15.4% of the Company’s total net assets calculated in accordance with the 1940 Act.
(3)
 
The fair value of the investment was valued using significant unobservable inputs. See Note 6. Fair Value Measurements in the Notes to Unaudited Consolidated Financial Statements.
(4)
 
Unless otherwise indicated, the interest rate on the principal balance outstanding for all floating rate loans is indexed to the Term Secured Overnight Financing Rate (“SOFR”) or Euro Interbank Offered Rate (“EURIBOR”), which typically resets semiannually, quarterly, or monthly at the borrower’s option. The applicable base rate may be subject to a floor. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, we have provided the applicable margin over the reference rate based on each respective credit agreement. As of September 30, 2024, the reference rates for the floating rate loans were the 1 Month SOFR of 4.85%, 3 Month SOFR of 4.59%, 6 Month SOFR of 4.25%, 1 Month EURIBOR of 3.35%, 3 Month EURIBOR of 3.11% and 6 Month EURIBOR of 3.28%.
(5)
 
Interest rates on short-term investments are annualized.
(6)
 
All or a portion of the interest on this position is
paid-in-kind
(PIK).
(7)
 
Non-income
producing security.
(8)
 
Pledged as collateral against the credit facility. See Note 4. Borrowings in the Notes to Unaudited Consolidated Financial Statements for additional information.
(9)
 
Represents
co-investments
made with the Company’s affiliates in accordance with the terms of the exemptive relief received from the U.S. Securities and Exchange Commission. See Note 3. Related Party Transactions in the Notes to Unaudited Consolidated Financial Statements.
(10)
 
Investment is Germany domiciled.
(11)
 
Investment is Spain domiciled.
ADDITIONAL INFORMATION
Foreign currency forward contracts (amounts in thousands):
 
Counterparty
  
Currency Purchased
    
Currency Sold
    
Settlement
    
Unrealized

Appreciation

(Depreciation)
 
Standard Chartered Bank
     USD        2,546        EUR        2,310        10/2/2024      $ (25
Wells Fargo Bank, N.A.
     EUR        1,008        USD        1,127        10/2/2024        (5
Royal Bank of Canada
     EUR        1,001        USD        1,116        10/2/2024        (2
Wells Fargo Bank, N.A.
     USD        1,129        EUR        1,008        11/4/2024        5  
Royal Bank of Canada
     USD        1,118        EUR        1,001        11/4/2024        2  
Standard Chartered Bank
     USD        338        EUR        301        11/4/2024        2  
                 
 
 
 
Total foreign forward currency contracts
                 
$
(23
                 
 
 
 
EUR Euro
USD U.S. Dollar
 
The accompanying notes are part of these unaudited consolidated financial statements.
 
8

Table of Contents
PIMCO Capital Solutions BDC Corp.
Consolidated Schedule of Investments as of December 31, 2023
(Amounts in thousands)
 
Investments
(1)
Non-Controlled,
Non-Affiliated
Investments
  
Reference Rate

Spread
(4)
 
Interest

Rate
   
Maturity

Date
    
Par Amount/

Shares
    
Cost
    
Fair Value
    
Percentage of

Net Assets
 
Debt Investments
                  
First Lien Senior Secured
                  
Consumer Services
  
BCPE Empire Holdings, Inc. Extended Term Loan
   SOFR + 4.750%     10.106     12/11/2028        2,494      $ 2,496      $ 2,504        1.13
            
 
 
    
 
 
    
 
 
 
Total Consumer Services
        2,496        2,504        1.13
Diversified Manufacturing
  
TK Elevator Midco GmbH Facility B1 Loan
   SOFR + 3.928%     9.381     07/30/2027        2,494        2,494        2,503        1.13
            
 
 
    
 
 
    
 
 
 
Total Diversified Manufacturing
        2,494        2,503        1.13
Entertainment
  
AP Core Holdings II, LLC Term
B-1
Loan
   SOFR + 5.614%     10.970     09/01/2027        2,165        2,140        2,124        0.96
AP Core Holdings II, LLC Term
B-2
Loan
   SOFR + 5.614%     10.970     09/01/2027        2,231        2,205        2,184        0.98
PLNTF Holdings, LLC Initial Term Loan
(8)
   SOFR + 8.262%     13.633     03/22/2026        11,116        10,989        10,671        4.80
            
 
 
    
 
 
    
 
 
 
Total Entertainment
        15,334        14,979        6.74
Financial Other
  
Asurion, LLC
B-8
Term Loan
   SOFR + 3.364%     8.720     12/23/2026        2,494        2,428        2,492        1.12
            
 
 
    
 
 
    
 
 
 
Total Financial Other
        2,428        2,492        1.12
Healthcare
  
U.S. Renal Care, Inc. Closing Date Term Loan
   SOFR + 5.356%     10.470     06/20/2028        1,591     
 
977
 
     1,213        0.55
            
 
 
    
 
 
    
 
 
 
Total Healthcare
        977        1,213        0.55
Insurance Life
           
Integrity Marketing Acquisition, LLC Delayed Draw Term Loan
(3)
   SOFR + 6.000%     11.388     08/27/2026        3,691        3,691        3,671        1.65
Integrity Marketing Acquisition, LLC Incremental Term Loan
(3)
   SOFR + 6.000%     11.388     08/27/2026        5,528        5,417        5,498        2.48
            
 
 
    
 
 
    
 
 
 
Total Insurance Life
        9,108        9,169        4.13
IT Services
           
Alorica, Inc. Term Loan
(3)
   SOFR + 6.875%     12.231     12/21/2027        12,250        12,137        11,999        5.40
            
 
 
    
 
 
    
 
 
 
Total IT Services
        12,137        11,999        5.40
Packaging
           
Clydesdale Acquisition Holdings, Inc. Seven Year Term Loan
(8)
   SOFR + 4.275%     9.631     04/13/2029        2,203        2,122        2,215        1.00
LABL, Inc. Initial Dollar Term Loan
   SOFR + 5.100%     10.456     10/29/2028        2,494        2,485        2,398        1.08
            
 
 
    
 
 
    
 
 
 
Total Packaging
        4,607        4,613        2.08
Pharmaceuticals
           
Gainwell Acquisition Corp. Term B Loan
(8)
   SOFR + 4.100%     9.448     10/01/2027        2,238        2,221        2,182        0.98
            
 
 
    
 
 
    
 
 
 
Total Pharmaceuticals
        2,221        2,182        0.98
Retailers
           
LBM Acquisition, LLC Initial Term Loan
(8)
   SOFR + 3.850%     9.206     12/17/2027        2,222        2,207        2,201        0.99
Rising Tide Holdings, Inc. FILO Term Loan
(3)
   SOFR + 9.000%     14.356     06/01/2026        4,570        4,426        4,406        1.98
            
 
 
    
 
 
    
 
 
 
Total Retailers
               6,633        6,607        2.97
Technology
                  
Endurance International Group Holdings, Inc. Initial Term Loan
   SOFR + 3.928%     9.422     02/10/2028        6,894        6,594        6,772        3.05
Mavenir Systems, Inc. Initial Term Loan
(2)
   SOFR + 5.012%     10.390     08/18/2028        9,825        9,746        6,951        3.13
McAfee Corp. Term Loan
(8)
   SOFR + 3.850%     9.193     03/01/2029        2,352        2,241        2,348        1.06
MH Sub I, LLC Term Loan
   SOFR + 4.250%     9.606     05/03/2028        2,494        2,405        2,456        1.11
Planview Parent, Inc. Closing Date Term Loan
(8)
   SOFR + 4.262%     9.610     12/17/2027        6,893        6,758        6,850        3.08
Polaris Newco, LLC Dollar Term Loan
   SOFR + 4.114%     9.470     06/02/2028        2,400        2,331        2,371        1.07
TIBCO Software, Inc. Dollar Term Loan B
   SOFR + 4.600%     9.948     03/30/2029        2,494        2,389        2,442        1.10
            
 
 
    
 
 
    
 
 
 
Total Technology
        32,464        30,190        13.60
Wireless
           
Windstream Services, LLC Incremental Term Loan
   SOFR + 4.100%     9.456     02/23/2027        7,000        6,725        6,930        3.12
            
 
 
    
 
 
    
 
 
 
Total Wireless
        6,725        6,930        3.12
            
 
 
    
 
 
    
 
 
 
Total First Lien Senior Secured
               97,624        95,381        42.95
            
 
 
    
 
 
    
 
 
 
Second Lien Senior Secured
                  
Technology
           
Altar BidCo, Inc. Initial Term Loan
   SOFR + 5.600%     10.813     02/01/2030        2,900        2,875        2,878        1.30
            
 
 
    
 
 
    
 
 
 
Total Technology
        2,875        2,878        1.30
            
 
 
    
 
 
    
 
 
 
Total Second Lien Senior Secured
               2,875        2,878        1.30
            
 
 
    
 
 
    
 
 
 
 
The accompanying notes are part of these unaudited consolidated financial statements.
 
9

Table of Contents
PIMCO Capital Solutions BDC Corp.
Consolidated Schedule of Investments as of December 31, 2023
(Amounts in thousands)
 
Investments
(1)
Non-Controlled,
Non-Affiliated
Investments
  
Reference Rate

Spread
(4)
   
Interest

Rate
(5)
   
Maturity

Date
    
Par Amount/

Shares
    
Cost
    
Fair Value
    
Percentage of

Net Assets
 
Senior Unsecured
                  
Consumer Services
                  
LEAF Home Solutions Note
(3)(6)(8)
     N/A      
12.000
    02/26/2027        32,235      $ 32,090      $ 29,526        13.30
            
 
 
    
 
 
    
 
 
 
Total Consumer Services
               32,090        29,526        13.30
Technology
                  
GCOM
(3)(6)(9)
     N/A       17.000     02/16/2029        13,277        10,622        10,535        4.74
            
 
 
    
 
 
    
 
 
 
Total Technology
               10,622        10,535        4.74
            
 
 
    
 
 
    
 
 
 
Total Senior Unsecured
               42,712        40,061        18.04
            
 
 
    
 
 
    
 
 
 
Total Debt Investments
               143,211        138,320        62.29
            
 
 
    
 
 
    
 
 
 
Corporate Bonds
                  
Automotive
                  
Rivian Holdings/Auto LLC 144A
(2)
     SOFR + 5.625%       11.493     10/15/2026        28,601        28,255        28,658        12.91
            
 
 
    
 
 
    
 
 
 
Total Automotive
               28,255        28,658        12.91
            
 
 
    
 
 
    
 
 
 
Total Corporate Bonds
               28,255        28,658        12.91
            
 
 
    
 
 
    
 
 
 
Common Stocks
                  
Retailers
                  
West Marine/Rising Tide Holdings, Inc.
(3)(7)
     N/A       N/A       N/A        25,000        359        263        0.12
Total Retailers
               359        263        0.12
Total Common Stocks
               359        263        0.12
Warrants
                  
Retailers
                  
West Marine/Rising Tide Holdings, Inc.
(3)(7)
     N/A       N/A       09/08/2028        47,166        —         —         0.00
            
 
 
    
 
 
    
 
 
 
Total Retailers
               —         —         0.00
Technology
                  
GCOM
(3)(7)(9)
     N/A       N/A       08/11/2033        2,491,250        2,491        2,181        0.98
            
 
 
    
 
 
    
 
 
 
Total Technology
               2,491        2,181        0.98
            
 
 
    
 
 
    
 
 
 
Total Warrants
               2,491        2,181        0.98
            
 
 
    
 
 
    
 
 
 
Short-Term Investments
                  
U.S. Treasury Bills
                  
U.S. Treasury Bill
     N/A       0.000     01/02/2024        8,000        7,999        8,000        3.61
U.S. Treasury Bill
     N/A       4.820     01/23/2024        6,200        6,180        6,181        2.78
U.S. Treasury Bill
     N/A       5.094     02/20/2024        4,300        4,268        4,269        1.92
U.S. Treasury Bill
     N/A       5.096     03/14/2024        27,200        26,911        26,918        12.12
U.S. Treasury Bill
     N/A       5.137     03/28/2024        1,200        1,185        1,185        0.53
            
 
 
    
 
 
    
 
 
 
Total U.S. Treasury Bills
               46,543        46,553        20.96
            
 
 
    
 
 
    
 
 
 
Total Short-Term Investments
               46,543        46,553        20.96
            
 
 
    
 
 
    
 
 
 
Total
Non-Controlled,
Non-Affiliated
Investments
             $ 220,859      $ 215,975        97.26
            
 
 
    
 
 
    
 
 
 
Total Investments
             $ 220,859      $ 215,975        97.26
            
 
 
    
 
 
    
 
 
 
 
(1)
 
All investments are U.S. domiciled.
(2)
 
The investment is treated as a
non-qualifying
asset under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act’’). Under the 1940 Act, the Company cannot acquire any
non-qualifying
asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company’s total assets. As of December 31, 2023, total
non-qualifying
assets at fair value represented 16.0% of the Company’s total net assets calculated in accordance with the 1940 Act.
(3)
 
The fair value of the investment was valued using significant unobservable inputs. See Note 6. Fair Value Measurements in the Notes to Unaudited Consolidated Financial Statements.
(4)
 
Unless otherwise indicated, the interest rate on the principal balance outstanding for all floating rate loans is indexed to the Term Secured Overnight Financing Rate (“SOFR”), which typically resets semiannually, quarterly, or monthly at the borrower’s option. The applicable base rate may be subject to a floor. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, we have provided the applicable margin over the reference rate based on each respective credit agreement. As of December 31, 2023, the reference rates for the floating rate loans were the 1 Month SOFR of 5.35%, 3 Month SOFR of 5.33% and 6 Month SOFR of 5.16%.
(5)
 
Interest rates on short-term investments are annualized.
(6)
 
All or a portion of the interest on this position is
paid-in-kind
(PIK).
(7)
 
Non-income
producing security.
(8)
 
Pledged as collateral against the credit facility. See Note 4. Borrowings in the Notes to Unaudited Consolidated Financial Statements for additional information.
(9)
 
Represents
co-investments
made with the Company’s affiliates in accordance with the terms of the exemptive relief received from the U.S. Securities and Exchange Commission. See Note 3. Related Party Transactions in the Notes to Unaudited Consolidated Financial Statements.
 
The accompanying notes are part of these unaudited consolidated financial statements.
 
10

Table of Contents
PIMCO Capital Solutions BDC Corp.
Notes to Unaudited Consolidated Financial Statements
September 30, 2024
1. Organization
PIMCO Capital Solutions BDC Corp. (collectively with its consolidated subsidiaries, the “Company,” “we,” “our,” and “us”), is an externally managed,
non-diversified,
closed-end
management investment company that elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”), on July 11, 2022. The Company was incorporated under the laws of the state of Delaware on December 23, 2021. In addition, for U.S. federal income tax purposes, the Company has elected as of August 1, 2022 to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).
The Company invests primarily in privately negotiated loans and equity investments to middle market companies generally with annual revenues greater than $20 million and earnings before interest, taxes, depreciation and amortization (“EBITDA”) of less than $50 million. Pacific Investment Management Company LLC (“PIMCO” or the “Advisor”) serves as the Company’s external investment advisor pursuant to an investment management agreement (the “Advisory Agreement”). PIMCO is an investment advisor registered with the U.S. Securities and Exchange Commission (the “SEC”) under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). PIMCO also serves as the Company’s administrator (in such capacity, the “Administrator”) pursuant to an administration agreement (the “Administration Agreement”). The Administrator may retain a
sub-administrator
to perform any or all of its obligations under the Administration Agreement.
The Company is conducting private offerings (each a “Private Offering”) of its common stock to investors in reliance on an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). At the closing of any Private Offering, each investor makes a capital commitment (a “Capital Commitment”) to purchase Shares (as defined below) pursuant to a subscription agreement (“Subscription Agreement”) entered into with the Company or PIMCO Capital Solutions US Feeder LP, a feeder fund established by the Advisor to invest in Shares of the Company (“Feeder Fund”). The Company is a perpetual-life investment vehicle, without a fixed termination date or commitment period. Investors will be required to fund drawdowns to purchase Shares up to the amount of their respective Capital Commitment on an
as-needed
basis each time the Company delivers a capital draw-down notice to its investors. The Company entered into an initial subscription agreement on June 9, 2022, received capital contributions on June 10, 2022 (date of inception), and commenced investment operations on June 30, 2022.
The initial meeting of the Board of Directors (the “Board”) of the Company was held on June 22, 2022. There were no operations prior to June 10, 2022 (date of inception). Effective June 10, 2022, affiliated entities of the Advisor (the “PIMCO Entities”) indirectly contributed $15 (amount in thousands) of capital to the Company by investing in interests of the Feeder Fund. In exchange for this contribution, the PIMCO Entities, through their interest in the Feeder Fund, each indirectly received common stock of the Company, par value $0.001 (“Shares”). On June 29, 2022, the PIMCO Entities made an additional capital contribution and, pursuant to Transfer Agreements entered into on June 30, 2022, the PIMCO Entities contributed additional assets to the Company with a fair market value of $143,864 and unrealized loss of $6,588 (amounts in thousands). As a result of these foregoing transactions, the Company issued and sold a total of 25,387,884 Shares at an aggregate purchase price of $253,879 (amount in thousands).
On January 25, 2024, the Company repurchased 3,785,281.95 shares of common stock, par value $0.001 per share from PIMCO Capital Solutions US Feeder LP for $33,238 (amount in thousands) at $8.78 per share in accordance with its offer to repurchase (the “Tender Offer”) its own shares up to the amount of shares that could be repurchased with approximately $40,000 (amount in thousands).
As of September 30, 2024, the Company had total Capital Commitments of $216,026 (amount in thousands), of which 0% is unfunded. Capital Commitments may be drawn down by the Company on a pro rata basis, as needed (including
follow-on
investments), for paying the Company’s expenses, including fees under the Advisory Agreement and Administration Agreement (as defined below), and/or maintaining a reserve account for the payment of future expenses or liabilities.
The Company’s fiscal year ends December 31.
2. Significant Accounting Policies
Basis of Accounting
The Company’s consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The Company is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies. The functional and reporting currency for the Company is the U.S. dollar.
 
11

The interim consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and pursuant to the requirements for reporting on Form
10-Q
and Articles 6, 10 and 12 of Regulation
S-X.
Accordingly, certain disclosures accompanying the annual consolidated financial statements prepared in accordance with U.S. GAAP are omitted. In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of September 30, 2024, and its results of operations for the three months and nine months ended September 30, 2024 and 2023, and its cash flows for the nine months ended September 30, 2024 and 2023. The cons
olida
ted balance sheet at December 31, 2023, was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements.
Use of Estimates
The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that may affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates.
Basis of Consolidation
As provided under ASC Topic 946 and Regulation
S-X,
the Company will generally not consolidate its investment in a company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. Accordingly, the Company consolidated the results of the Company’s wholly-owned subsidiaries, Emerald CS LLC, Ruby CS LLC, Amber CS LLC, Citrine CS LLC, Diamond CS LLC, Opal CS LLC, Quartz CS LLC, Jade CS LLC, Pearl CS LLC, Sapphire CS LLC, Topaz CS LLC, Garnet CS LLC, Turquoise CS LLC, Aquamarine CS LLC, Tanzanite CS LLC, Peridot CS LLC, Cobalt CS LLC, Sunstone CS LLC and Silver CS LLC. All material intercompany transactions are eliminated in consolidation.
Fair Value of Investments
The Company applies fair value to all of its financial instruments in accordance with ASC Topic 820—Fair Value Measurement (“ASC Topic 820”). ASC Topic 820 defines fair value, establishes a framework used to measure fair value and requires disclosures for fair value measurements. In accordance with ASC Topic 820, the Company has categorized its financial instruments carried at fair value, based on the priority of the valuation technique, into a three-level fair value hierarchy. Fair value is a market-based measure considered from the perspective of the market participant who holds the financial instrument rather than an entity-specific measure. Therefore, when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that management believes market participants would use in pricing the financial instrument at the measurement date.
Revenue Recognition
Securities transactions are recorded as of the trade date for financial reporting purposes. Securities purchased or sold on a when-issued or delayed-delivery basis may be settled 15 days or more after the trade date. Realized gains and losses from securities sold are recorded on the identified cost basis. Dividend income is recorded on the
ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend
date may have passed, which are recorded as soon as the Company is informed of the dividend. Tax liabilities realized as a result of such security sales are reflected as a component of net realized gain (loss) on investments on the Consolidated Statements of Operations. Paydown gains and losses on asset-backed securities are recorded as components of interest income on the Consolidated Statements of Operations.
Investments are placed on
non-accrual
status when it is probable that principal, interest or dividends will not be collected according to contractual terms. Interest or dividend payments received on
non-accrual
investments may be recognized as income or applied to principal depending upon management’s judgement.
Non-accrual
investments are restored to accrual status when past due principal and interest or dividends are paid and, in management’s judgement, principal and interest or dividend payments are likely to remain current. We may make exceptions to this treatment if the loan has sufficient collateral value and is in the process of collection.
Interest income and interest expense are recognized on an accrual basis. Interest income on debt instruments is accrued and recognized for those issuers who are currently paying in full or expected to pay in full. For those issuers who are in default or expected to default, interest is not accrued and is only recognized when received or applied to principal depending upon management’s judgement. Interest income and expense include discounts accreted and premiums amortized on certain debt instruments as determined in good faith by the Company and calculated using the effective interest method. Loan origination fees, original issue discounts and market discounts or premiums are capitalized as part of the underlying cost of the investments and accreted or amortized over the life of the investment as interest income.
 
12

Paydown gains and losses on investments in debt instruments are reported in Interest income on the Consolidated Statements of Operations. The Company records dividend income from private securities pursuant to the terms of the respective investments.
The Company may earn various fees during the life of the loans. Such fees include, but are not limited to, syndication, commitment, administration, prepayment and amendment fees, some of which are paid to the Company on an ongoing basis. These fees and any other income are recognized as earned as a component of Other income, if applicable, on the Consolidated Statements of Operations. Certain commitment fees are deferred and included in Other Liabilities on the Consolidated Statements of Assets and Liabilities. The commitment fees are amortized over the life of the investment as other income.
Deferred Financing Fees
Deferred financing fees represent fees and other direct incremental costs incurred in connection with the Company’s borrowings. As of September 30, 2024 and December 31, 2023, the Company had deferred financing costs of $
2,081
and $2,280, respectively (amounts in thousands). These amounts are amortized and included in interest expense in the Consolidated Statements of Operations over the life of the borrowings.
Payment
In-Kind
Interest
The Company may have investments that contain
Payment-In-Kind
(“PIK”) provisions. PIK income, computed at the contractual rate specified in the Company investment agreement, is added to the principal balance of the investment and recorded as Payment
in-kind
interest on the Consolidated Statements of Operations. The Company prospectively ceases recognition of PIK income and the associated principal balance if such amounts and balances are deemed to be doubtful of collection. For investments with PIK income, the Company calculates income accruals based on the principal balance including any PIK.
Organizational Costs
Organizational costs to establish the Company are charged to expense as incurred. These expenses consist primarily of legal fees and other costs of organizing the Company. The Advisor may elect to pay certain organizational costs of the Company on the Company’s behalf and for which the Company reimburses the Advisor. If the Company is dissolved prior to the full reimbursement of the organizational costs, the Advisor shall not seek reimbursement of any remaining amounts upon dissolution. The Company has entered into an Expense Support and Conditional Reimbursement Agreement (the “Expense Reimbursement Agreement”) with the Advisor pursuant to which the Advisor may elect to pay certain expenses on the Company’s behalf and the Company may be required to repay the Advisor from its excess operating funds until such time as all expenses made by the Advisor on behalf of the Company within three years have been reimbursed. These expenses consist primarily of legal fees and other costs of organizing the Company. As of September 30, 2024 and December 31, 2023, $0 and $194, respectively (amounts in thousands), were recoverable by the Advisor for organizational expenses paid on the Company’s behalf and are recorded as “Organizational costs paid by Advisor” on the Consolidated Statements of Assets and Liabilities. As of September 30, 2024 and December 31, 2023, $1,152 and $1,153, respectively (amounts in thousands), owed to the Advisor for organizational expenses paid on the Company’s behalf and are recorded as “Organizational costs payable to Advisor” on the Consolidated Statements of Assets and Liabilities.
Offering Costs
Offering costs in connection with the offering of common stock of the Company are capitalized as a deferred charge and amortized to expense on a straight-line basis over 12 months from the commencement of operations. The Advisor may elect to pay certain offering costs of the Company on the Company’s behalf and for which the Company may reimburse the Advisor pursuant to the Expense Reimbursement Agreement between the Company and Advisor. If the Company is dissolved prior to the full reimbursement of the offering costs, the Advisor shall not seek reimbursement of any remaining amounts upon dissolution. As of both September 30, 2024 and December 31, 2023, there were $0 recoverable by the Advisor for offering costs paid on the Company’s behalf. As of both September 30, 2024 and December 31, 2023, there were $20 (amount in thousands) owed to the Advisor for offering costs paid on the Company’s behalf, which were recorded as “Offering costs payable to Advisor” on the Consolidated Statements of Assets and Liabilities.
Other Expenses
All costs associated with consummated investments are included in the cost of such investments. Broken deal expenses incurred in connection with investment transactions which are not successfully consummated are expensed as a component of Other expenses on the Consolidated Statements of Operations. In addition, valuation, insurance, filing, research, consulting, subscriptions, directors’
out-of-pocket
expenses and other costs, are included as components of Other expenses on the Consolidated Statements of Operations and Other payables on the Statements of Assets and Liabilities.
 
13

Legal Expense
Legal expenses are primarily for legal guidance related to investments, financing,
co-investment
matters and Board Member advice. These expenses are included as Legal expenses on the Consolidated Statement of Operations and Legal expenses payable on the Consolidated Statements of Assets and Liabilities.
Cash and Foreign Currency Translations
Cash is comprised of cash at the custodian bank. The consolidated financial statements of the Company are presented using the currency of the primary economic environment in which it operates. The functional and reporting currency for the Company is the U.S. dollar. Restricted cash is subject to a contractual restriction by a third party, including restriction of withdrawal and use until transferred to the operating account of the Company. The restricted cash is held at an account controlled by the Credit Facility servicer as disclosed in
Note 4. Borrowings
.
Amounts denominated in foreign currencies are translated into USD on the following basis: (i) investments and other assets and liabilities denominated in foreign currencies are translated into USD based upon currency exchange rates effective on the last business day of the period; and (ii) purchases and sales of investments, borrowings and repayments of such borrowings, income, and expenses denominated in foreign currencies are translated into USD based upon currency exchange rates prevailing on the transaction dates.
The Company does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are included within the net realized and unrealized gains or losses on investments. Fluctuations arising from the translation of
non-investment
assets and liabilities, if any, are included with the net change in unrealized gains (losses) on foreign currency on the Consolidated Statements of Operations.
Foreign securities and currency translations may involve certain considerations and risks not typically associated with investing in U.S. companies and U.S. government securities. These risks include, but are not limited to, currency fluctuations and revaluations and future adverse political, social and economic developments, which could cause investments in foreign markets to be less liquid and prices to be more volatile than those of comparable U.S. companies or U.S. government securities.
Cash, restricted cash and foreign currency consisted of the following as of September 30, 2024 and December 31, 2023. Foreign currency cost is disclosed on the Consolidated Statements of Assets and Liabilities.
 
    
September 30, 2024
    
December 31, 2023
 
Cash
   $ 934      $ 2,306  
Restricted Cash
     1,649        1,009  
Foreign Currency
     10         
  
 
 
    
 
 
 
Total cash, restricted cash and foreign currency in the Consolidated Statement of Cash Flows
   $ 2,593      $ 3,315  
  
 
 
    
 
 
 
Derivatives
The Company may enter into foreign currency forward contracts to reduce the Company’s exposure to foreign currency exchange rate fluctuations in the value of foreign currencies. In a foreign currency forward contract, the Company agrees to receive or deliver a fixed quantity of one currency for another, at a
pre-determined
price at a future date. Foreign currency forward contracts are
marked-to-market
at the applicable forward rate. Unrealized appreciation (depreciation) on foreign currency forward contracts is recorded on the Consolidated Statements of Assets and Liabilities by the counterparty on a net basis, not taking into account collateral posted which is recorded separately, if applicable. Notional amounts of foreign currency forward contract assets and liabilities are presented separately on the Consolidated Schedules of Investments. Purchases and settlements of foreign currency forward contracts having the same settlement date and counterparty are generally settled net and any realized gains or losses are recognized on the settlement date. The Company does not utilize hedge accounting and as such, the Company recognizes its derivatives at fair value, and records changes in the net unrealized appreciation (depreciation) on foreign currency forward contracts in the Consolidated Statements of Operations.
Income Taxes
The Company has elected, as of August 1, 2022, to be treated as a RIC under the Code and intends each year to qualify and be eligible to be treated as such, so that it generally will not be subject to U.S. federal income tax on its net investment income or net short-term or long-term capital gains, that are distributed (or deemed distributed, as described below) to stockholders. In order to qualify and be eligible for such treatment, the Company must meet certain asset diversification tests, derive at least 90% of its gross income for such year from certain types of qualifying income, and distribute to its stockholders at least 90% of its “investment company taxable income” as that term is defined in the Code (which includes, among other things, dividends, taxable interest and the excess of any net short-term capital gains over net long-term capital losses, as reduced by certain deductible expenses).
 
14

The Company’s investment strategy will potentially be limited by its intention to continue qualifying for treatment as a RIC and can limit the Company’s ability to continue qualifying as such. The tax treatment of certain of the Company’s investments under one or more of the qualification or distribution tests applicable to RICs is uncertain. An adverse determination or future guidance by the Internal Revenue Service or a change in law might affect the Company’s ability to qualify or be eligible for such treatment.
If, in any year, the Company were to fail to qualify for treatment as a RIC under the Code and were ineligible to or did not otherwise cure such failure, the Company would be subject to tax on its taxable income at corporate rates and, when such income is distributed, stockholders would be subject to further tax on such distributions to the extent of the Company’s current or accumulated earnings and profits.
The Company accounts for income taxes in conformity with ASC Topic 740—Income Taxes (“ASC Topic 740”). ASC Topic 740 provides guidelines for how uncertain tax positions should be recognized, measured, presented and disclosed in financial statements. ASC Topic 740 requires the evaluation of tax positions taken in the course of preparing the Company’s tax returns to determine whether the tax positions are
“more-likely-than-not”
to be sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the
more-likely-than-not
threshold would be recorded as a tax expense or tax benefit in the current year. It is the Company’s policy to recognize accrued interest and penalties related to uncertain tax benefits in income tax expense. There were no material unrecognized tax benefits or unrecognized tax liabilities related to uncertain income tax positions through September 30, 2024. As of September 30, 2024, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations are the years 2022-2023 (with limited exceptions), assuming tax filings have been made for the previous two years.
Distributions
Income distributions and capital gain distributions are determined in accordance with income tax regulations which may differ from U.S. GAAP. Differences between tax regulations and U.S. GAAP may cause timing differences between income and capital gain recognition. Further, the character of investment income and capital gains may be different for certain transactions under the two methods of accounting. As a result, income distributions and capital gain distributions declared during a fiscal period may differ significantly from the net investment income (loss) and realized gains (losses) reported on the Company’s financial statements presented under U.S. GAAP.
The Company has adopted an “opt out” distribution reinvestment plan (“DRIP”). As a result, unless stockholders elect to “opt out” of the DRIP, stockholders will have their cash dividends or distributions automatically reinvested in additional Shares, rather than receiving cash. Shareholders who receive distributions in the form of Shares will generally be subject to the same U.S. federal, state and local tax consequences as if they received cash distributions; however, those stockholders will not receive cash with which to pay any applicable taxes.
New Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)
2023-07,
“Improvements to Reportable Segment Disclosures,” which enhances the disclosures required for reportable segments on an annual and interim basis. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and allows for early adoption with updates applied retrospectively. At this time, management is evaluating the implications of these changes on the consolidated financial statements. The Company does not expect the adoption of ASU
2023-07
to have a material impact on its consolidated financial statements.
In December 2023, the FASB issued ASU
2023-09,
“Improvements to Income Tax Disclosures,” which requires additional disaggregated disclosures on the entity’s effective tax rate reconciliation and additional details on income taxes paid. The ASU is effective for annual periods beginning after December 15, 2024, and early adoption is permitted. At this time, management is evaluating the implications of these changes on the consolidated financial statements. The Company does not expect the adoption of ASU
2023-09
to have a material impact on its consolidated financial statements.
3. Related Party Transactions
Advisory Agreement
On June 30, 2022, the Company entered into an Advisory Agreement, pursuant to which the Company will pay the Advisor, quarterly in arrears, a base management fee calculated at an annual rate of 1.25%. The base management fee is calculated based on the average of the Company’s total net assets (including cash or cash equivalents but excluding assets purchased with borrowed amounts) as of the end of the two most recently completed calendar quarters. The base management fee for any partial month or quarter is appropriately prorated. The Advisor has agreed to waive all management fees payable pursuant to the Advisory Agreement for so long as the only stockholders of the Company are PIMCO Entities. The Advisory Agreement does not provide for the payment of incentive fees.
 
15

For the three months ended September 30, 2024 and 2023, the Company incurred a management fee of $620 and $753, respectively (amounts in thousands), of which 100% was waived by the Advisor. For the nine months ended September 30, 2024 and 2023, the Company incurred a management fee of $1,878 and $2,233, respectively (amounts in thousands), of which 100% was waived by the Advisor.
Administration Agreement
On June 30, 2022, the Company entered into an Administration Agreement with PIMCO in its capacity as Administrator. Under the Administration Agreement, the Administrator provides or causes to be furnished certain supervisory and administrative and other services reasonably necessary for the operation of the Company. Pursuant to the Administration Agreement, the Company pays the Administrator an annual fee calculated and payable quarterly in arrears on the last business day of calendar quarter in an amount equal to 0.15% of the Company’s total net assets.
For the three months ended September 30, 2024 and 2023, the Company incurred an administration fee of $74 and $90, respectively (amounts in thousands). For the nine months ended September 30, 2024 and 2023, the Company incurred an administration fee of $223 and $268, respectively (amounts in thousands).
Expense Reimbursement Agreement
The Company has entered into an Expense Reimbursement Agreement with the Advisor. The Advisor may elect to make certain Expense Payments on the Company’s behalf, provided that no portion of the payment will be used to pay any of the Company’s interest expense. The Advisor has agreed to make Expense Payments on the Company’s behalf through June 30, 2025. During the three month period ended September 30, 2024 and the year ended December 31, 2023, the Advisor paid directors fees on behalf of the Company. As of September 30, 2024 and the year ended December 31, 2023, $154 and $152, respectively (amounts in thousands), are reimbursable to the Advisor for directors fees and are recorded as “Directors fee reimbursement to Advisor” on the Consolidated Statements of Assets and Liabilities.
Following any calendar year in which Available Operating Funds (defined below) exceed the cumulative distributions accrued to the Company’s stockholders based on distributions declared with respect to record dates occurring in such calendar year (the amount of such excess, “Excess Operating Funds”), the Company shall pay Excess Operating Funds, or a portion thereof, to the Advisor until such time as all Expense Payments made by the Advisor to or on behalf of the Company within three years prior to the last business day of such calendar year have been reimbursed. Any payments required to be made by the Company shall be referred to herein as a “Reimbursement Payment.” “Available Operating Funds” means the sum of (i) the Company’s net “investment company taxable income”, as defined by the Code, which generally includes net ordinary income and net short-term taxable gains reduced by net long-term capital losses, (ii) the Company’s net capital gains (including the excess of net long-term capital gains over net short-term capital losses) and (iii) distributions and other distributions paid to the Company on account of investments in portfolio companies (to the extent such amounts listed in clause (iii) are not included under clauses (i) and (ii) above). No Reimbursement Payment for any calendar year will be made if the Company’s Operating Expense Ratio (defined below) at the time of such Reimbursement Payment is greater than the Operating Expense Ratio at the time the expense payment was made to which such Reimbursement Payment relates. The “Operating Expense Ratio” is calculated by dividing all of the Company’s operating costs and expenses incurred, as determined in accordance with U.S. GAAP for investment companies, less organizational and offering expenses, base management fees owed to the Advisor, and interest expense, by the Company’s average net assets.
The Expense Reimbursement Agreement may require the Company to repay the Advisor for previously waived reimbursement of Expense Payments under certain circumstances. The previously waived expenses are potentially subject to repayment by the Company, if at all, within a period not to exceed three years from the date of the relevant waiver.
For the three months ended September 30, 2024 and 2023, the Company waived organization costs of $0 and $0, respectively. For the nine months ended September 30, 2024 and 2023, the Company waived organization costs of $0 and $0, respectively.
For the three months ended September 30, 2024 and 2023, the Advisor recouped $21 and $101, respectively (amounts in thousands), from the Company for prior expenses paid and were recorded as “Recoupment of prior expenses paid by the Advisor” on the Consolidated Statement of Operations. For the nine months ended September 30, 2024 and 2023, the Advisor recouped $193 and $300, respectively (amounts in thousands), from the Company for prior expenses paid and were recorded as “Recoupment of prior expenses paid by the Advisor” on the Consolidated Statement of Operations.
 
16

Directors Fee
The Company compensates each of its Independent Directors for their services. Their compensation is included in Directors fee on the Consolidated Statements of Operations. The Independent Directors also receive reimbursement of
reasonable out-of-pocket expenses
incurred in connection with attending each meeting, which are included as components of Other expenses on the Consolidated Statements of Operations and Other payables on the Statements of Assets and Liabilities.
Co-Investment
Relief
The Company has received exemptive relief from the SEC that, to the extent the Company relies on such relief, permits it to (among other things)
co-invest
with certain other persons, including certain affiliates of the Advisor and certain public or private funds managed by the Advisor and its affiliates, subject to certain terms and conditions. The exemptive relief from the SEC with respect to
co-investments
imposes extensive conditions on any
co-investments
made in reliance on such relief.
See
Note 1. Organization
for other related party transactions.
4. Borrowings
The Company is permitted to borrow amounts such that its asset coverage ratio, as defined in the 1940 Act, is at least 150% after such borrowing (if certain requirements are met). As of September 30, 2024 and December 31, 2023, the Company’s average asset coverage ratio was 1,813.83% and 0%, respectively.
The Company’s outstanding debt as of September 30, 2024 was as follows (amounts in thousands):
 
    
September 30, 2024
 
    
Aggregated

Principal

Committed
    
Outstanding

Principal
   
Deferred

Issuance Cost
    
Carrying Value
   
Amount Available
 
Credit Facility
   $ 100,000      $ (13,640   $
2,081
     $ (11,559   $ 86,360  
  
 
 
    
 
 
   
 
 
    
 
 
   
 
 
 
Total
   $ 100,000      $ (13,640   $
2,081
     $ (11,559   $ 86,360  
  
 
 
    
 
 
   
 
 
    
 
 
   
 
 
 
Credit Facility
On June 19, 2023, Amber CS LLC (the “Subsidiary”), as borrower and portfolio asset servicer, a wholly-owned financing subsidiary of the Company, Topaz CS LLC, as equity holder of Subsidiary, and Opal CS LLC and Quartz CS LLC, as Subsidiary guarantors, entered into a loan servicing agreement (the “Credit Facility”) with Massachusetts Mutual Life Insurance Company, as initial lender, administrative agent, facility servicer, and collateral custodian, and MassMutual Ascend Life Insurance Company, as initial lender. Under the Credit Facility, the maximum aggregate committed borrowing amount is $150,000 (amount in thousands) (the “Maximum Facility Amount”) with a scheduled maturity date of June 19, 2032. On June 10, 2024, the maximum aggregate committed borrowing amount was reduced to $100,000 (amount in thousands).
The facility bears interest at a rate of the applicable Benchmark plus (a) 2.85% for SOFR advances, and (b) 1.85% for an advance bearing interest at the alternate base rate which is a rate of interest per annum equal to the higher of (a) the Prime Rate in effect on such day; and (b) the Federal Funds Rate in effect on such day plus
0.5
% per annum (as such terms are defined in the Credit Facility).
The facility bears an Unused Commitment Fee on the average daily unused amount in excess of the Minimum Usage Amount, if any, at a rate of .40% per annum (as such terms are defined in the Credit Facility). The Minimum Usage Amount is (a) zero prior to June 19, 2024, and (b) an amount equal to 70% of the Maximum Facility Amount (as such term is defined in the Credit Facility) any date on or after June 19, 2024. The Subsidiary pays a Utilization Fee (as such term is defined in the Credit Facility) for the difference between (a) the amount of interest that would have accrued under this Credit Facility on the principal amount of the advances if the advances outstanding was equal to the Minimum Usage Amount and (b) the amount of interest that actually accrued under this Credit Facility on the principal amounts of the advances. The Subsidiary also pays a Facility Servicer Fee in an aggregate amount equal to 0.03% per annum of the Maximum Facility Amount, an annual Collateral Custodian Fee (as such term is defined in the Credit Facility) of $5, an Agent Fee in an annual amount of $25, and a Rating fee of $175 for the initial rating and an annual fee of $45 thereafter (amounts in thousands).
The Credit Facility contains certain covenants including: (i) the Subsidiary acquiring a Debt Rating of
BBB-,
BBB (low) or Baa3 or higher and (ii) maintaining a loan to value less than minimums dictated by the number of assets in the portfolio. As of September 30, 2024, the Company is in compliance with these covenants.
 
17

Certain investments, as disclosed on the Consolidated Schedule of Investments and their related cash flows, are pledged as collateral for the Credit Facility.
In connection with the establishment of the loan facility, the Company paid upfront fees and incurred legal expenses of $2,427 (amount in thousands), which are being amortized into interest expense through the scheduled maturity date of June 19, 2032. The Company had $13,640 (amount in thousands) of outstanding borrowings as of September 30, 2024. Interest expense, inclusive of Utilization Fees and other debt administration fees, related to the borrowings and amortization of deferred financing costs are disclosed as a component of interest expense on the Consolidated Statements of Operations. For the three months ended September 30, 2024 and 2023, the Company had interest expense of $1,634 and $63, respectively, inclusive of amortization expense for deferred financing fees of $68 and $63, respectively, utilization fee of $1,196 and $0, respectively, unused commitment fee of $38 and $0, respectively, debt administration fee of $56 and $0, respectively, and stated interest expense of $276 and $0, respectively (amounts in thousands). For the nine months ended September 30, 2024 and 2023, the Company had interest expense of $2,261 and $70, respectively, inclusive of amortization expense for deferred financing fees of $199 and $70, respectively, utilization fee of $1,374 and $0, respectively, unused commitment fee of $314 and $0, respectively, debt administration fee of $98 and $0, respectively, and stated interest expense of $276 and $0, respectively (amounts in thousands).
The combined weighted average interest rate of the aggregate borrowings outstanding for the nine months ended September 30, 2024 and the year ended December 31, 2023 was 67.72% and 0.00% and 8.28% and 0.00% attributable to stated interest, respectively. The combined weighted average debt of the aggregate borrowings outstanding for the nine months ended September 30, 2024 and the year ended December 31, 2023 was $4,460 and $0 (amounts in thousands).
5. Investments
Under the 1940 Act, the Company is required to separately identify
non-controlled
investments where it owns 5% or more of a portfolio company’s outstanding voting securities and/or had the power to exercise control over the management or policies of such portfolio company as investments in “affiliated” companies. In addition, under the 1940 Act, the Company is required to separately identify investments where it owns more than 25% of a portfolio company’s outstanding voting securities and/or had the power to exercise control over the management or policies of such portfolio company as investments in “controlled” companies. Under the 1940 Act,
“non-affiliated
investments” are defined as investments that are neither controlled investments nor affiliated investments. Detailed information with respect to the Company’s
non-controlled,
non-affiliated;
non-controlled,
affiliated; and controlled affiliated investments is contained in the consolidated financial statements, including the Consolidated Schedules of Investments. The information in the tables below is presented on an aggregate portfolio basis, without regard to whether they are
non-controlled,
non-affiliated;
non-controlled,
affiliated; or controlled affiliated investments.
Investments at fair value and cost consisted of the following as of September 30, 2024 and December 31, 2023:
 
    
September 30, 2024
    
December 31, 2023
 
(Amounts in thousands)
  
Cost
    
Fair Value
    
Cost
    
Fair Value
 
First Lien Secured
   $ 108,438      $ 105,870      $ 97,624      $ 95,381  
Second Lien Secured
     7,731        7,976        2,875        2,878  
Senior Unsecured
     48,776        48,163        42,712        40,061  
Corporate Bonds
     18,433        18,834        28,255        28,658  
Common Stocks
     680        632        359        263  
Warrants
     2,491        1,546        2,491        2,181  
Short-Term Investments
     25,160        25,164        46,543        46,553  
  
 
 
    
 
 
    
 
 
    
 
 
 
Total investments
   $ 211,709      $ 208,185      $ 220,859      $ 215,975  
  
 
 
    
 
 
    
 
 
    
 
 
 
 
18

The industry composition of investments as a percentage of total investments based on fair value as of September 30, 2024 and December 31, 2023 was as follows:
 
    
September 30, 2024
   
December 31, 2023
 
Automotive
     9.0     13.3
Chemicals
     5.0    
Consumer Services
     19.3     14.8
Diversified Manufacturing
     1.2     1.1
Entertainment
     1.7     6.9
Financial Other
     2.4     1.2
Food and Beverage
     2.4    
Healthcare
     0.7     0.6
Industrial Other
     0.1    
Insurance Life
     4.4     4.3
Packaging
     3.2     2.1
Pharmaceuticals
     1.0     1.0
Retailers
     1.1     3.2
Technology
     27.5     21.2
Treasury Bills
     12.1     21.5
IT Services
     5.5     5.6
Wireless
     3.4     3.2
  
 
 
   
 
 
 
Total
     100.0     100.0
  
 
 
   
 
 
 
As of September 30, 2024, 97.6% of investments held were based in the United States, 1.2% of investments held were based in Germany and 1.2% of investments were held in Spain.
As of December 31, 2023, 100.0% of investments held were based in the United States.
6. Fair Value Measurement
In accordance with ASC Topic 820, fair value is defined as the price that the Company would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 also establishes a framework for measuring fair value and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability as of the reporting date.
Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. Each investment is assigned a level based upon the observability of the inputs which are significant to the overall valuation.
The three-tier hierarchy of inputs is summarized below:
 
   
Level 1 – Quoted prices in active markets for identical investments.
 
   
Level 2 – Other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
 
   
Level 3 – Significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments at the reporting date).
The level in the fair value hierarchy within which the fair value measurement is categorized in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement. If a fair value measurement uses price data vendors or observable market price quotations, that measurement may be a Level 2 or Level 3 measurement depending on the source of the base price. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability. The determination of what constitutes “observable” requires significant judgment by the Company. The Company considers observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.
 
19

Valuation of Investments
Investments are valued at fair value as determined in good faith by the Advisor, subject to the oversight of the Board, based on input from management and independent valuation firms that have been engaged to assist in the valuation of portfolio investments without readily available market quotations. This valuation process is conducted at the end of each fiscal quarter.
Common stocks, warrants and financial derivative instruments, such as futures contracts or options on futures that are traded on a national securities exchange, are stated at the last reported sale or settlement price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized as Level 1 of the fair value hierarchy.
Investments for which market quotations are not readily available are valued at fair value as determined in good faith pursuant to Rule
2a-5
under the 1940 Act and ASC Topic 820. As a general principle, the fair value of a security or other asset is the price 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. Pursuant to Rule
2a-5,
the Board has designated PIMCO as the valuation designee (“Valuation Designee”) for the Company to perform the fair value determination relating to all Company investments. PIMCO may carry out its designated responsibilities as Valuation Designee through various teams and committees. The Valuation Designee’s policies and procedures govern the Valuation Designee’s selection and application of methodologies for determining and calculating the fair value of Company investments. The Valuation Designee may value Company portfolio securities for which market quotations are not readily available and other Company assets utilizing inputs from pricing sources, quotation reporting systems, valuation agents and other third-party sources (together, “Pricing Sources”).
The fair values of loan investments based upon pricing data vendors or observable market price quotations are generally categorized as Level 2 or Level 3. Loan investments priced using internal models with significant unobservable inputs are categorized as Level 3.
Short-term debt instruments (such as commercial paper) held by the Company having a remaining maturity of 60 days or less may be valued at amortized cost, so long as the amortized cost value of such short-term debt instruments is approximately the same as the fair value of the instrument as determined without the use of amortized cost valuation. These securities are categorized as Level 2 or Level 3 of the fair value hierarchy depending on the source of the base price. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter (absent unusual circumstances) assuming a constant amortization to maturity of any discount or premium, regardless of the impact of fluctuations in general market rates of interest on the value of the instrument.
If third-party evaluated vendor pricing is not available or not deemed to be indicative of fair value, the Company may elect to obtain broker quotes directly from the broker-dealer or passed through from a third-party vendor. In the event that fair value is based upon a single sourced broker quote, these securities are categorized as Level 3 of the fair value hierarchy. Broker quotes are typically received from established market participants. Although independently received, the Company does not have the transparency to view the underlying inputs which support the market quotation. Significant changes in the broker quote would have direct and proportional changes in the fair value of the security.
Discounted cash flow valuation uses an internal analysis based on the Advisor’s expectation of future income and expenses, capital structure, exit multiples of a security, and other unobservable inputs which may include contractual and factual loan factors, estimated future payments and credit rating. Significant changes in the unobservable inputs of the models would result in direct and proportional changes in the fair value of the security. These securities are categorized as Level 3 of the fair value hierarchy.
Proxy pricing procedures set the base price of a fixed income security and subsequently adjust the price proportionally to market value changes of a
pre-determined
security deemed to be comparable in duration, generally a U.S. Treasury or sovereign note based on country of issuance. The base price may be a broker-dealer quote, transaction price, or an internal value as derived by analysis of market data. The base price of the security may be reset on a periodic basis based on the availability of market data and procedures approved by the Valuation Oversight Committee. Significant changes in the unobservable inputs of the proxy pricing process (the base price) would result in direct and proportional changes in the fair value of the security. These securities are categorized as Level 3 of the fair value hierarchy.
The market approach generally involves multiplying a key performance metric of the company, such as earnings before interest, taxes, depreciation and amortization (“EBITDA”), by a valuation multiple observed in a range of comparable companies or transactions. The selection of a population of comparable companies requires judgment, including qualitative and quantitative analysis of the comparability of the companies. The Advisor may also adjust the valuation multiple for differences between the investment and the referenced comparable.
 
20

A cost approach is generally used when a recent transaction price for a specific asset is indicative of fair value.
Due to the inherent uncertainty of valuations, however, estimated fair values may differ from the values that would have been used had a readily available market for the securities existed and the differences could be material.
The following tables summarize the fair value of the Company’s investments as of September 30, 2024 and December 31, 2023 (amounts in thousands):
 
    
September 30, 2024
 
Assets
  
Level 1
    
Level 2
    
Level 3
    
Total
 
First Lien Senior Secured
   $      $ 64,938      $ 40,932      $ 105,870  
Second Lien Senior Secured
          2,831      5,145        7,976  
Senior Unsecured
               48,163        48,163  
Corporate Bonds
          18,834             18,834  
Common Stocks
               632        632  
Warrants
               1,546        1,546  
Short-Term Investments
          25,164           25,164  
  
 
 
    
 
 
    
 
 
    
 
 
 
Total assets
   $      $ 111,767      $ 96,418      $ 208,185  
  
 
 
    
 
 
    
 
 
    
 
 
 
 
    
December 31, 2023
 
Assets
  
Level 1
    
Level 2
    
Level 3
    
Total
 
First Lien Senior Secured
   $      $ 69,807      $ 25,574      $ 95,381  
Second Lien Senior Secured
          2,878             2,878  
Senior Unsecured
               40,061        40,061  
Corporate Bonds
          28,658             28,658
Common Stocks
               263        263  
Warrants
               2,181        2,181  
Short-Term Investments
          46,553           46,553  
  
 
 
    
 
 
    
 
 
    
 
 
 
Total assets
   $      $ 147,896      $ 68,079      $ 215,975  
  
 
 
    
 
 
    
 
 
    
 
 
 
Assets or liabilities categorized as Level 2 or Level 3 as of period end have been transferred between Level 2 and 3 since the prior period due to changes in the method utilized in valuing the investments. Transfers from Level 2 to Level 3 are a result of a change, in the normal course of business, from the use of methods used by Pricing Services (Level 2) to the use of a broker quote or valuation technique which utilizes significant unobservable inputs due to an absence of current or reliable market-based data (Level 3). Transfers from Level 3 to Level 2 are a result of the availability of current and reliable market-based data provided by Pricing Services or other valuation techniques which utilize significant observable inputs. In accordance with the requirements of U.S. GAAP, the amounts of transfers into and out of Level 3, if material, are disclosed in the tables below.
The below tables present a summary of changes in fair value of Level 3 assets by investment type (amounts in thousands) for the nine months ended September 30, 2024 and 2023:
 
    
Beginning

Balance at

12/31/2023
    
Net

Purchases

and

Drawdowns
    
In-Kind

Contributions
    
Net Sales

and

Paydowns
   
Accrued

Discounts/

(Premiums)
    
Realized

Gain/

(Loss)
    
Net Change in

Unrealized

Appreciation/

(Depreciation)
   
Transfers

into Level 3
    
Transfers

out of

Level 3
    
Ending

Balance at

9/30/24
 
Term Loans First Lien Secured
   $ 25,574      $ 13,266      $ 0      ($ 5,327   $ 93      $ 238      $ 158     $ 6,930      $ 0      $ 40,932  
Term Loans Second Lien Secured
     0        4,820        0        0       34        0        291       0        0        5,145  
Term Loans Senior Unsecured
     40,061        7,725        0        (1,935     266        7        2,039       0        0        48,163  
Common Stocks
     263        642        0        (320     0        0        47       0        0        632  
Unlisted Warrants
     2,181        0        0        0       0        0        (635     0        0        1,546  
  
 
 
    
 
 
    
 
 
    
 
 
   
 
 
    
 
 
    
 
 
   
 
 
    
 
 
    
 
 
 
Totals
  
$
68,079
 
  
$
26,453
 
  
$
0
 
  
($
7,582
 
$
393
 
  
$
245
 
  
$
1,900
 
 
$
6,930
 
  
$
0
 
  
$
96,418
 
  
 
 
    
 
 
    
 
 
    
 
 
   
 
 
    
 
 
    
 
 
   
 
 
    
 
 
    
 
 
 
 
21

    
Beginning

Balance at

12/31/2022
    
Net

Purchases

and

Drawdowns
(1)
    
In-Kind

Contributions
    
Net Sales

and

Paydowns
(2)
   
Accrued

Discounts/

(Premiums)
    
Realized

Gain/

(Loss)
   
Net Change in

Unrealized

Appreciation/

(Depreciation)
   
Transfers

into Level 3
    
Transfers

out of

Level 3
   
Ending

Balance at

9/30/23
 
Term Loans First Lien Secured
   $ 22,082      $ 18,195      $ 0      ($ 849   $ 115      ($ 3,758   $ 5,354     $ 0      ($ 6,930   $ 34,209  
Term Loans Second Lien Secured
     8,062        0        0        (5,945     36        (13,930     11,777       0        0       0  
Term Loans Senior Unsecured
     25,562        13,535        0        0       47        0       644       0        0       39,788  
Common Stocks
     0        359        0        0       0        0       (97     0        0       262  
Unlisted Warrants
     0        2,491        0        0       0        0       0       0        0       2,491  
  
 
 
    
 
 
    
 
 
    
 
 
   
 
 
    
 
 
   
 
 
   
 
 
    
 
 
   
 
 
 
Totals
  
$
55,706
 
  
$
34,580
 
  
$
0
 
  
($
6,794
 
$
198
 
  
($
17,688
 
$
17,678
 
 
$
0
 
  
($
6,930
 
$
76,750
 
  
 
 
    
 
 
    
 
 
    
 
 
   
 
 
    
 
 
   
 
 
   
 
 
    
 
 
   
 
 
 
 
(1)
Purchases and Drawdowns may include securities received in corporate actions and restructurings.
(2)
Sales and Paydowns may include securities delivered in corporate actions and restructuring of investments.
The following tables present quantitative information about the significant unobservable inputs of the Company’s Level 3 financial instruments. The tables are not intended to be
all-inclusive
but instead captures the significant unobservable inputs relevant to the Company’s determination of fair value (amounts in thousands).
 
    
Fair Value

as of

September 30, 2024
    
Valuation

Techniques
    
Unobservable

Input
    
Range
  
Weighted Average 
(1)
 
Term Loans
   $ 31,404        Discounted Cash Flow        Discount Rate      8.71% – 19.00%      11.47%  
     14,592        Third Party Vendor        Broker Quote      98.00% – 100.06%      99.66%  
     81        Recent Transaction        Purchase Price      n/a      n/a  
Senior Unsecured
     48,163        Discounted Cash Flow        Discount Rate      13.71% – 22.12%      15.97%  
Common Stocks
     474        Comparable Multiple        EBITDA Multiple      n/a     
5.75x
 
     158       
 
Discounted Cash
Flow/Comparable
Multiple
 
 
 
    
 
Discount
Rate/Revenue
Multiple
 
 
 
   n/a     
20.75
%/
0.50x
 
Warrants
     1,546        Comparable Multiple        EBITDA Multiple      n/a     
10.00
x
9.50
x
 
  
 
 
             
Total Assets
   $ 96,418              
  
 
 
             
 
    
Fair Value

as of

December 31, 2023
    
Valuation

Techniques
    
Unobservable

Input
    
Range
    
Weighted Average 
(1)
 
Term Loans
   $ 25,574        Discounted Cash Flow        Discount Rate        10.67% – 16.39%        12.23%  
Senior Unsecured
     40,061        Discounted Cash Flow        Discount Rate        15.41% – 23.37%        17.50%  
Common Stocks
     263       
 
Discounted Cash
Flow/Comparable
Multiple
 
 
 
    
 
Discount
Rate/Revenue
Multiple
 
 
 
     n/a       
17.25
%/
0.55x
 
Warrants
     2,181        Comparable Multiple        EBITDA Multiple        n/a       
10.00
x
 
  
 
 
             
Total Assets
   $ 68,079              
  
 
 
             
 
(1)
Weighted average is calculated by weighing the significant unobservable input by the relative fair value of each investment in the category.
7. Derivatives
The Company enters into foreign currency forward contracts from time to time to help mitigate the impact that an adverse change in foreign exchange rates would have on the value of the Company’s investments denominated in foreign currencies.
In order to better define its contractual rights and to secure rights that will help the Company mitigate its counterparty risk, the Company may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or a similar agreement with its derivative counterparties. An ISDA Master Agreement is a bilateral agreement between the Company and a counterparty that governs
over-the-counter
derivatives, including foreign currency forward contracts, and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of a default
(close-out
netting) or similar event, including the bankruptcy or insolvency of the counterparty.
 
22

For financial reporting purposes, cash collateral that has been pledged to cover obligations of the Company and cash collateral received from the counterparty, if any, is included on the Consolidated Statements of Assets and Liabilities as other assets. There has been no cash collateral received or paid from the counterparty. The Company minimizes counterparty credit risk by only entering into agreements with counterparties that it believes to be in good standing and by monitoring the financial stability of those counterparties.
For the three and nine months ended September 30, 2024, the Company’s average USD notional exposure to foreign currency forward contracts was $8 and $3, respectively (amounts in thousands). For the three and nine months ended September 30, 2023, the Company’s average USD notional exposure to foreign currency forward contracts was $0 and $0, respectively.
The Company’s net exposure to foreign currency forward contracts that are subject to ISDA Master Agreements or similar agreements presented on the Consolidated Statements of Assets and Liabilities were as follows (amounts in thousands):
 
Reporting Date
  
Counterparty
  
Gross
Amount

of Assets
    
Gross
Amount

of Liabilities
   
Net Amount
of Assets

or (Liabilities)
   
Collateral(Received)
Pledged
(1)
    
Net
Amounts 
(2)
 
September 30, 2024
   Royal Bank of Canada    $ 2      $ (2   $     $      $  
September 30, 2024
   Standard Chartered Bank    $ 2      $ (25   $ (23   $      $ (23
September 30, 2024
   Wells Fargo Bank, N.A.    $ 5      $ (5   $     $      $  
 
(1)
Amount excludes excess cash collateral paid, if any.
(2)
Net amount represents the net amount due (to) from counterparty in the event of a default based on the contractual setoff rights under the agreement. Net amount excludes any over-collateralized amounts.
There were no derivatives held at December 31, 2023.
The effect of transactions in derivative instruments on the Consolidated Statements of Operations was as follows (amounts in thousands):
 
    
For the Three Months Ended
    
For the Nine Months Ended
 
    
September 30, 2024
   
September 30, 2023
    
September 30, 2024
   
September 30, 2023
 
Net realized gain (loss) on foreign currency forward contracts
   $     $      $     $  
Net change in unrealized appreciation (depreciation) on foreign currency forward contracts
     (23            (23      
  
 
 
   
 
 
    
 
 
   
 
 
 
Total net realized and unrealized gains (losses) on foreign currency forward contracts
     (23            (23      
  
 
 
   
 
 
    
 
 
   
 
 
 
8. Commitments & Contingencies
Commitments
The Company may enter into commitments to fund investments. As of September 30, 2024, the Advisor believed that the Company had adequate financial resources to satisfy its unfunded commitments, if any. The amounts associated with unfunded commitments to provide funds to portfolio companies are not recorded in the Company’s Consolidated Statements of Assets and Liabilities. Since these commitments and the associated amounts may expire without being drawn upon, the total commitment amount does not necessarily represent a future cash requirement.
As of September 30, 2024, the Company had the following outstanding commitments to fund investments in current portfolio companies (amounts in thousands):
 
Portfolio Company
  
Investment Type
  
September 30, 2024
 
Integrity Marketing Acquisition, LLC
   Revolver    $ 741  
CoreWeave Compute Acquisition Co. IV, LLC
   Delayed Draw Term Loan    $ 4,149  
Apex Service Partners, LLC
   Delayed Draw Term Loan    $ 675  
Amber Acquisition Co, LLC—DwyerOmega
   Term Loan    $ 5,000  
 
23

Contingencies
In the normal course of business, the Company enters into contracts that provide a variety of general indemnifications. Any exposure to the Company under these arrangements could involve future claims that may be made against the Company. Currently, no such claims exist or are expected to arise and, accordingly, the Company has not accrued any liability in connection with such indemnifications.
Litigation
As of the issuance date of this report, the Company is not named as a defendant in any material litigation or arbitration proceedings and is not aware of any material litigation or claim pending or threatened against it.
9. Net Assets
Equity Issuance
For the three months and nine months ended September 30, 2024, the Company’s authorized stock consisted of 250,000,000 Shares of common stock, par value $0.001 per share, and 1,000,000 shares of preferred stock, par value $0.001 per share.
The Company did not hold a closing of the continuous Private Offering for the three months or nine months ended September 30, 2024.
Distributions
For the nine months ended September 30, 2024, the Board declared the following distributions:
On May 22, 2024, the Company paid a dividend of $0.14 per share to stockholders of record as of May 20, 2024.
On August 22, 2024, the Company paid a dividend of $0.29 per share to stockholders of record as of August 20, 2024.
Share Repurchase Program
At the discretion of the Board, the Company may repurchase Shares (either by number of Shares or aggregate net asset value) as of such quarter end pursuant to a quarterly share repurchase program. Repurchases of Shares will be made at the current net offering price per Share on the date of such repurchase.
In the event the amount of Shares tendered exceeds the repurchase offer amount, Shares will be repurchased on a pro rata basis. All unsatisfied repurchase requests must be resubmitted in the next quarterly tender offer, or upon the recommencement of the Share repurchase program, as applicable.
On January 25, 2024, the Company repurchased 3,785,281.95 shares of common stock, par value $0.001 per share, from PIMCO Capital Solutions US Feeder LP for $33,238 (amount in thousands) at $8.78 per share in accordance with its offer to repurchase (the “Tender Offer”) its own shares up to the amount of shares that could be repurchased with approximately $40,000 (amount in thousands).
The Tender Offer expired on January 25, 2024 and $33,238 (amount in thousands) was paid to PIMCO Capital Solutions US Feeder LP on January 31, 2024. The Company did not repurchase any other Shares during the three or nine months ended September 30, 2024. For the three and nine months ended September 30, 2023, no Share repurchase was offered or requested and no Shares were repurchased.
10. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings (loss) per common share for the three month periods and nine month periods ended September 30, 2024 and 2023:
 
    
Three Months Ended
    
Nine Months Ended
 
    
September 30, 2024
    
September 30, 2023
    
September 30, 2024
    
September 30, 2023
 
Net increase (decrease) in net assets resulting
   $ 4,806      $ (1,525    $ 15,640      $ 9,938  
from operations
           
Weighted average shares of common stock outstanding - basic and diluted
     21,602,602        25,387,884        21,934,160        25,387,884  
Earnings (loss) per common share (basic and diluted)
   $ 0.22      $ (0.06    $ 0.71      $ 0.39  
 
 
24

Table of Contents
11. Financial Highlights
 
    
Nine Months Ended
 
    
September 30, 2024
   
September 30, 2023
 
Per share data:
    
Net asset value, beginning of period
   $ 8.75     $ 9.21  
Net investment income (loss)
(1)
     0.67       0.75  
Net realized and unrealized gain (loss) on investment transactions
(2)
     0.04       (0.36
  
 
 
   
 
 
 
Net increase (decrease) in net assets from operations
(1)
     0.71       0.39  
Distributions declared
(1)
     (0.29     (0.31
  
 
 
   
 
 
 
Total increase (decrease) in net assets
     0.42       0.08  
  
 
 
   
 
 
 
Net asset value, end of period
   $ 9.17     $ 9.29  
  
 
 
   
 
 
 
Shares Outstanding, end of period
     21,602,602       25,387,884  
Total Return
(3)
     8.40     4.26
Ratios / supplemental data
Ratio of expenses to average net assets, gross of waivers
(4)(5)
     3.46     1.97
Ratio of expenses to average net assets, net of waivers 
(4)(5)
     2.18     0.72
Ratio of net investment income (loss) to average net assets 
(4)(5)
     9.99     10.74
Net Assets, end of period
   $ 198,102     $ 235,933  
Weighted average shares outstanding
     21,934,160       25,387,884  
Total capital commitments, end of period
   $ 216,026     $ 253,879  
Weighted Average debt outstanding
     4,459,926        
Asset coverage ratio
     1,813.83      
Portfolio turnover rate
(6)
     22.23     10.30
 
(1)
Per share amounts are calculated based on the weighted average shares outstanding during the period.
(2)
Realized and unrealized gains and losses per share in this caption are balancing amounts necessary to reconcile the change in net asset value (“NAV”) per share for the period, and may not reconcile with the aggregate gains and losses in the Consolidated Statements of Operations due to share transactions during the period.
(3)
Total return is calculated as the change in NAV per share during the period, plus distributions per share, if any, divided by the NAV per share at the beginning of the period. Total return is for the period indicated and has not been annualized.
(4)
All expenses are annualized with the exception of organizational expenses.
(5)
Average net assets are computed using the average balance of net assets at the end of each month of the reporting period.
(6)
Not annualized.
12. Subsequent Events
Subsequent events after the Consolidated Statements of Assets and Liabilities date have been evaluated through the date the consolidated financial statements were issued. The Company has concluded that there are no events requiring adjustment or disclosure in the consolidated financial statements, except as discussed below.
On November 6, 2024, the Board declared a dividend of $0.08 per share, which is payable on November 22, 2024 to stockholders of record as of November 20, 2024.
 
 
25


Table of Contents
Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Statements contained in this Form 10-Q (“Report”) (including those relating to current and future market conditions and trends in respect thereof) that are not historical facts are based on current expectations, estimates, projections, opinions and/or beliefs of the Company and PIMCO. Such statements involve known and unknown risks, uncertainties and other factors and undue reliance should not be placed thereon. Certain information contained in this Report constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “seek,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue,” “target,” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or the actual performance of the Company may differ materially from those reflected or contemplated in such forward-looking statements.

The information contained in this section should be read in conjunction with “Item 1. Unaudited Consolidated Financial Statements.” Although the Company believes that the assumptions on which these forward-looking statements are based are reasonable, some of those assumptions are based on the work of third parties and any of those assumptions could prove to be inaccurate; as a result, the forward-looking statements based on those assumptions also could prove to be inaccurate. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this Report should not be regarded as a representation by us that the Company’s plans and objectives will be achieved. This discussion contains forward-looking statements, which relate to future events or the Company’s future performance or financial condition and involves numerous risks and uncertainties, including, but not limited to, those set forth in “Risk Factors” in Item 1A of this Report and elsewhere in this Report. Investors should not place undue reliance on these forward-looking statements, which apply only as of the date of this Report. The Company does not undertake any obligation to update or revise any forward-looking statements or any other information contained herein, except as required by applicable law.

The following factors are among those that may cause actual results to differ materially from the Company’s forward-looking statements:

 

   

the Company’s future operating results;

 

   

changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets;

 

   

interest rate volatility;

 

   

the Company’s business prospects and the prospects of the Company’s prospective portfolio companies;

 

   

the impact of increased competition;

 

   

the Company’s contractual arrangements and relationships with third parties;

 

   

the dependence of the Company’s future success on the general economy and its impact on the industries in which the Company invests;

 

   

the ability of the Company’s prospective portfolio companies to achieve their objectives;

 

   

the relative and absolute performance of the Advisor;

 

   

the ability of the Advisor and its affiliates to retain talented professionals;

 

   

the Company’s expected financings and investments;

 

26


Table of Contents
   

the Company’s ability to pay dividends or make distributions;

 

   

the adequacy of the Company’s cash resources;

 

   

the risks associated with possible disruptions due to terrorism in the Company’s operations or the economy generally;

 

   

the impact of future acquisitions and divestitures;

 

   

the Company’s regulatory structure and tax status as a business development company (“BDC”) and a regulated investment company (a “RIC”); and

 

   

future changes in laws or regulations and conditions in the Company’s operating areas.

Investors are advised to consult any additional disclosures that the Company makes directly to investors or through reports that the Company has filed or will file with the SEC, including our registration statement on Form 10 and our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Investors should understand that under Section 27A(b)(2)(B) of the Securities Act and Section 21E(b)(2)(B) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports that the Company files under the Exchange Act.

Overview

The Company is an externally managed, non-diversified, closed-end management investment company that elected to be regulated as a BDC under the Investment Company Act of 1940, as amended (the “1940 Act”), on July 11, 2022. The Company was incorporated under the laws of the state of Delaware on December 23, 2021. In addition, for U.S. federal income tax purposes, the Company has elected, as of August 1, 2022, to be treated as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).

The Company’s investment objectives are to generate current income and to a lesser extent longer-term capital appreciation. The Company seeks to achieve its investment objectives by investing primarily in privately negotiated loans and equity investments to middle-market companies generally with annual revenues greater than $20 million and earnings before interest, taxes, depreciation and amortization (“EBITDA”) of less than $50 million. To accomplish this, the Company plans to make direct investments in middle-market companies. The Company may make select investments in non-U.S. portfolio companies. The Company seeks to provide investors with access to:

 

   

a diversified portfolio of credit investments expected to provide stable income and high assurances of debt repayment;

 

   

current income distributions;

 

   

capital protection through defensive structures with affirmative, negative and financial maintenance covenants and active portfolio management;

 

   

assets of varying vintage, industry and geography through direct originations and acquisitions of loan portfolios; and

 

   

generally low volatility and low correlation to public market indices.

Without limiting the generality of the foregoing, the Company primarily invests in directly originated senior secured term loans including first lien senior secured term loans (including unitranche loans), second lien senior secured term loans, mezzanine debt, unsecured loans, other subordinated loans, and covenant-lite loans. The Company invests to a lesser degree in equity investments and other opportunistic asset purchases. The Company may engage in hedging transactions. The Company may also make investments in traded bank loans and other liquid debt securities of U.S. corporate issuers, including broadly syndicated loans, which may provide more liquidity than the Company’s private credit investments. Depending on various factors, including, without limitation, the Company’s cash flows, the state of the loan market, and the need to quickly ramp-up the Company’s portfolio, the Company expects that at times its liquid loan portfolio could represent a material portion of the Company’s portfolio.

 

27


Table of Contents

The Company generates revenues primarily in the form of interest income from investments it holds. In addition, the Company generates income from dividends or distributions of income on any direct equity investments, capital gains on the sale of loans and equity securities and various other loan origination and other fees, including commitment, origination, amendment, structuring, syndication or due diligence fees, fees for providing managerial assistance and consulting fees.

Key Components Of Our Results Of Operations

Investments

The Company’s level of investment activity can, does, and will vary substantially from period to period depending on many factors, including the amount of debt available to middle-market companies, the general economic environment and the competitive environment for the type of investments the Company makes.

Revenues

The Company generates revenue primarily in the form of interest income on debt investments it holds. In addition, the Company generates income from dividends or distributions on income on direct equity investments, capital gains on the sales of loans and equity securities and various loan origination and other fees. The Company’s debt investments generally have a stated term of five to eight years and typically bear interest at a floating rate usually determined on the basis of a benchmark such as SOFR. Interest on these debt investments is paid quarterly. In some instances, the Company receives payments on its debt investments based on scheduled amortization of the outstanding balances. In addition, the Company may receive repayments of some of its debt investments prior to their scheduled maturity date. The frequency or volume of these repayments is expected to fluctuate significantly from period to period. The Company’s portfolio activity also reflects the proceeds of sales of securities. The Company may also generate revenue in the form of commitment, origination, amendment, structuring, syndication or due diligence fees, fees for providing managerial assistance and consulting fees.

Investments are placed on non-accrual status when it is probable that principal, interest or dividends will not be collected according to contractual terms. Interest or dividend payments received on non-accrual investments may be recognized as income or applied to principal depending upon management’s judgement. Non-accrual investments are restored to accrual status when past due principal and interest or dividends are paid and, in management’s judgement, principal and interest or dividend payments are likely to remain current. We may make exceptions to this treatment if the loan has sufficient collateral value and is in the process of collection.

Expenses

The Company’s primary operating expenses include the payment of: (i) investment advisory fees to the Advisor pursuant to the Advisory Agreement between the Company and the Advisor (unless waived); (ii) administrative fees payable to the Administrator in performing its administrative obligations under the Administration Agreement between the Company and the Administrator; and (iii) other operating expenses as detailed below:

 

   

salaries and other compensation or expenses, including travel expenses, of any of the Company’s executive officers, directors and employees, if any, who are not officers, directors, stockholders, members, partners or employees of PIMCO or its subsidiaries or affiliates;

 

   

taxes and governmental fees, if any, levied against the Company;

 

   

brokerage fees and commissions, and other portfolio transaction expenses incurred by or for the Company (including, fees and expenses of outside legal counsel or third-party consultants retained in connection with reviewing, negotiating and structuring loans and other investments made by the Company, and any costs associated with originating loans (such as third-party sourcing fees, due diligence expenses and travel, lodging and meal expenses related thereto), asset securitizations, alternative lending-related strategies and so-called “broken-deal costs” (e.g., fees, costs, expenses and liabilities, including, for example, due diligence-related fees, costs, expenses and liabilities, with respect to unconsummated investments));

 

   

expenses related to SPVs (including, without limitation, overhead expenses related thereto);

 

   

expenses of the Company’s securities lending (if any), including any securities lending agent fees, as governed by a separate securities lending agreement;

 

   

costs, including interest expenses, of borrowing money or engaging in other types of leverage financing including, without limitation, through the use by the Company of reverse repurchase agreements, dollar rolls/buy backs, bank borrowings, credit facilities and tender option bonds;

 

28


Table of Contents
   

costs, including dividend and/or interest expenses and other costs (including, without limitation, offering and related legal costs, fees to brokers, fees to auction agents, fees to transfer agents, fees to ratings agencies and fees to auditors associated with satisfying ratings agency requirements for preferred shares or other securities issued by the Company and other related requirements in the Company’s organizational documents) associated with the Company’s issuance, offering, redemption and maintenance of preferred shares, commercial paper or other instruments (such as the use of reverse repurchase agreements, dollar rolls/buy backs, bank borrowings, credit facilities and tender option bonds) for the purpose of incurring leverage;

 

   

fees and expenses of any underlying funds or other pooled vehicles in which the Company invests;

 

   

expenses of any third party valuation agent engaged to assist in valuing the Company’s assets;

 

   

dividend and interest expenses on short positions taken by the Company;

 

   

extraordinary expenses, including extraordinary legal expenses, as may arise, including, without limitation, expenses incurred in connection with litigation, proceedings, other claims, and the legal obligations of the Company to indemnify its directors, officers, employees, stockholders, distributors, and agents with respect thereto;

 

   

fees and expenses, including legal, printing and mailing, solicitation and other fees and expenses associated with and incident to stockholder meetings and proxy solicitations;

 

   

organizational and offering expenses of the Company, including registration (including Share registration fees), legal, marketing, printing, accounting and other expenses associated with organizing the Company in its state of jurisdiction and in connection with the initial election of the Company to be regulated under the 1940 Act and, as applicable, the initial registration of its Shares under the Securities Act and fees and expenses associated with seeking, applying for and obtaining formal exemptive, no-action and/or other relief from the SEC;

 

   

expenses incurred in connection with a stockholder that defaults in respect of a Capital Commitment;

 

   

allocated costs incurred by PIMCO in providing managerial assistance to those companies in which the Company has invested who request it;

 

   

all other expenses incurred by the Company in connection with maintaining its status as a BDC;

 

   

expenses payable under any underwriting agreement, including associated fees, expenses and any indemnification obligations;

 

   

any expenses allocated or allocable to a specific class of Shares, including, as applicable, sub-transfer agency expenses and distribution and/or service fees paid pursuant to a Rule 12b-1 or similar plan adopted by the Board of the Company for a particular share class (if any);

 

   

the Company’s pro rata portion of the fidelity bond required by Section 17(g) of the 1940 Act, or other insurance premiums (including costs relating to directors’ and officers’ liability insurance and errors and omissions insurance);

 

   

all fees, costs, expenses, and liabilities relating to currency hedging and portfolio hedging transactions;

 

   

all fees, costs, expenses and liabilities of liquidating the Company;

 

   

all fees, costs, expenses and liabilities that are specific to the operations of the Company; and

 

   

all expenses of the Company that are capitalized in accordance with U.S. GAAP.

The Company reimburses the Administrator and Advisor or its affiliates for amounts paid or costs borne that properly constitute Company expenses as set forth in the Administration Agreement and Advisory Agreement or otherwise. The Company expects our general and administrative expenses to be relatively stable or to decline as a percentage of total assets during periods of asset growth and to increase during periods of asset declines.

Portfolio, Investment Activity And Results Of Operations

As of September 30, 2024, the Company had investments, excluding cash equivalents, in 34 portfolio companies across 16 industries. Based on fair value as of September 30, 2024, approximately 71% of the Company’s debt portfolio was invested in debt bearing a floating interest rate, which are primarily subject to interest rate floors. Approximately 71% of the Company’s debt portfolio at fair value had an interest rate floor denoted in SOFR or EURIBOR. The weighted average interest rate floor across the Company’s floating-rate portfolio was approximately 0.7% as of September 30, 2024. These floors allow the Company to mitigate (to a degree) any impact of spread widening on the valuation of the Company’s investments. As of September 30, 2024, the Company’s estimated weighted average total yield of investments in debt securities was 11.2%. Weighted average yields are based on interest rates as of September 30, 2024.

As of December 31, 2023, the Company had investments, excluding cash equivalents, in 25 portfolio companies across 13 industries. Based on fair value as of December 31, 2023, 76% of the Company’s debt portfolio was invested in debt bearing a floating interest rate, which are primarily subject to interest rate floors. Approximately 76% of the Company’s debt portfolio at fair value had an interest rate floor denoted in SOFR. The weighted average interest rate floor across the Company’s floating-rate portfolio was approximately 0.7% as of December 31, 2023. These floors allow the Company to mitigate (to a degree) any impact of spread widening on the valuation of the Company’s investments. As of December 31, 2023, the Company’s estimated weighted average total yield of investments in debt securities was 11.9%. Weighted average yields are based on interest rates as of December 31, 2023.

 

29


Table of Contents

As part of the monitoring process, the Advisor has developed risk policies pursuant to which it regularly assesses the risk profile of each of our debt investments. The Advisor has developed a classification system to group investments into four categories. The investments are evaluated regularly and assigned a category based on certain credit metrics. The Advisor’s ratings do not constitute any rating of investments by a nationally recognized statistical rating organization or represent or reflect any third-party assessment of any of our investments. Please see below for a description of the four categories of the Advisor’s Internal Risk Rating system:

Category 1 – In the opinion of the Advisor, investments in Category 1 involve the least amount of risk relative to the Company’s initial cost basis at the time of origination or acquisition. Category 1 investments performance is above the Company’s initial underwriting expectations and the business trends and risk factors are generally favorable, which may include the performance of the portfolio company, or the likelihood of a potential exit.

Category 2 – In the opinion of the Advisor, investments in Category 2 involve a level of risk relative to the Company’s initial cost basis at the time of origination or acquisition. Category 2 investments are generally performing in line with the Company’s initial underwriting expectations and risk factors to ultimately recoup the cost of our principal investment are neutral to favorable. All new originated or acquired investments are initially included in Category 2.

Category 3 – In the opinion of the Advisor, investments in Category 3 indicate that the risk to the Company’s ability to recoup the initial cost basis at the time of origination or acquisition has increased materially since the origination or acquisition of the investment, such as declining financial performance and non-compliance with debt covenants; however, principal and interest payments are not more than 120 days past due.

Category 4 – In the opinion of the Advisor, investments in Category 4 involve a borrower performing substantially below expectations and indicate that the loan’s risk has increased substantially since origination or acquisition. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. For Category 4 investments, it is anticipated that the Company will not recoup the Company’s initial cost basis and may realize a substantial loss of the Company’s initial cost basis at the time of origination or acquisition upon exit.

The distribution of the Company’s portfolio, including cash equivalents, on the Advisor’s Internal Risk Rating System is as follows:

 

     September 30, 2024  
     Fair Value (amounts in thousands)      % of Portfolio     Number of Portfolio Companies  

Risk rating 1

   $ —         —       —   

Risk rating 2

     201,606        96.8       34  

Risk rating 3

     6,579        3.2       1  

Risk rating 4

     —         —        —   
  

 

 

    

 

 

   

 

 

 
   $ 208,185        100     35  
  

 

 

    

 

 

   

 

 

 

 

     December 31, 2023  
     Fair Value (amounts in thousands)      % of Portfolio     Number of Portfolio Companies  

Risk rating 1

   $ —         —       —   

Risk rating 2

     214,762        99.4       25  

Risk rating 3

     1,213        0.6       1  

Risk rating 4

     —         —        —   
  

 

 

    

 

 

   

 

 

 
   $ 215,975        100     26  
  

 

 

    

 

 

   

 

 

 

 

30


Table of Contents

Consolidated Results Of Operations

The following table represents our operating results (amounts in thousands):

 

     For the Three Months Ended      For the Nine Months Ended  
     September 30, 2024      September 30, 2023      September 30, 2024      September 30, 2023  

Total investment income

   $ 5,919      $ 7,000      $ 17,915      $ 20,434  

Less: Net expenses

     1,875        561        3,256        1,345  
  

 

 

    

 

 

    

 

 

    

 

 

 

Net investment income (loss)

     4,044        6,439        14,659        19,089  
  

 

 

    

 

 

    

 

 

    

 

 

 

Net realized gain (loss)

     62        (15,073      (354      (32,995

Net change in unrealized appreciation (depreciation)

     700        7,109        1,335        23,844  
  

 

 

    

 

 

    

 

 

    

 

 

 

Net increase (decrease) in Net Assets resulting from operations

   $ 4,806      $ (1,525    $ 15,640      $ 9,938  
  

 

 

    

 

 

    

 

 

    

 

 

 

Investment income was as follows (amounts in thousands):

 

     For the Three Months Ended      For the Nine Months Ended  
     September 30, 2024      September 30, 2023      September 30, 2024      September 30, 2023  

Investment income:

           

Interest income

   $ 3,089      $ 4,003      $ 11,737      $ 14,053  

Payment in-kind interest

     2,785        2,952        6,031        6,327  

Other income

     45        45        147        54  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Investment Income

   $ 5,919      $ 7,000      $ 17,915      $ 20,434  
  

 

 

    

 

 

    

 

 

    

 

 

 

For the three month periods and nine month periods ended September 30, 2024 and 2023, total investment income was driven by the Company’s deployment of capital and invested balance of investments. The size of the Company’s investment portfolio at fair value was approximately $200 million as of September 30, 2024 and, as of such date, all of the Company’s debt investments were income producing.

Interest income on the Company’s debt investments is dependent on the composition and credit quality of the portfolio. Generally, the Company expects the portfolio to generate predictable quarterly interest income based on the terms stated in each loan’s credit agreement.

 

31


Table of Contents

Expenses

Expenses were as follows (amounts in thousands):

 

     For the Three Months Ended      For the Nine Months Ended  
     September 30, 2024      September 30, 2023      September 30, 2024      September 30, 2023  

Expenses:

           

Management fee

   $ 620      $ 753      $ 1,878      $ 2,233  

Directors fees

     42        61        128        184  

Administration fee

     74        90        223        268  

Interest expense

     1,634        63        2,261        70  

Tax expense

     40        21        124        22  

Offering costs

     —         —         —         10  

Legal expenses

     33        65        133        250  

Other expenses

     31        160        194        241  

Recoupment of prior expenses paid by the Advisor

     21        101        193        300  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total expenses

   $ 2,495      $ 1,314      $ 5,134      $ 3,578  
  

 

 

    

 

 

    

 

 

    

 

 

 

Waivers

     (620      (753      (1,878      (2,233
  

 

 

    

 

 

    

 

 

    

 

 

 

Net expenses

   $ 1,875      $ 561      $ 3,256      $ 1,345  
  

 

 

    

 

 

    

 

 

    

 

 

 

Other expenses include valuation, insurance, filing, research, subscriptions and other costs. Organization and offering costs include expenses incurred in the Company’s initial formation and the Company’s offering of Shares.

Waivers include organizational costs and management fee waivers.

Income Taxes, Including Excise Taxes

The Company has elected, as of August 1, 2022, to be treated as a RIC under Subchapter M of the Code, and the Company intends to operate in a manner so as to continue to qualify for the tax treatment applicable to RICs. To qualify for tax treatment as a RIC, the Company must, among other things, distribute to the Company’s stockholders in each taxable year generally at least 90% of the sum of our Investment Company Taxable Income, as defined by the Code (without regard to the deduction for dividends paid), and net tax-exempt income for that taxable year. To maintain the Company’s tax treatment as a RIC, the Company, among other things, intends to make the requisite distributions to its stockholders, which generally relieve the Company from corporate-level U.S. federal income taxes.

For the three month periods and nine month periods ended September 30, 2024 and 2023, we did not incur any excise tax.

Financial Condition, Liquidity And Capital Resources

The Company generates cash from the net proceeds of offerings of its Shares, and from cash flows from interest and fees earned from its investments and principal repayments and proceeds from sales of its investments. The Company may also fund a portion of its investments through borrowings from banks and issuances of senior securities, including before the Company has fully invested the proceeds of any closing of the Company’s continuous private offering of its Shares. The Company’s primary use of cash will be investments in portfolio companies, payments of Company expenses and payment of cash distributions to stockholders.

Financing Transactions

The Company intends to utilize leverage (including through the establishment of wholly-owned financing subsidiaries) to finance its investments and operations. The amount of leverage that the Company employs will be subject to the restrictions of the 1940 Act and the supervision of the Board. At the time of any proposed borrowing, the amount of leverage the Company employs will also depend on the Advisor’s assessment of market and other factors. The Company may use leverage for investments, working capital, expenses and general corporate purposes (including to pay dividends or distributions).

 

32


Table of Contents

The Company is subject to limitations on leverage applicable to BDCs under the 1940 Act. As a BDC, with certain limited exceptions, the Company is only permitted to borrow amounts such that the Company’s asset coverage ratio, as defined in the 1940 Act, equals at least 150% after (and including) such borrowing. As of September 30, 2024, our average asset coverage ratio was 1,813.83%.

In determining whether to borrow money or issue debt on behalf of the Company, the Advisor will analyze, as applicable, the maturity, covenant package and rate structure of the proposed borrowings as well as the risks of such borrowings compared to the Company’s investment outlook, among other factors. Any such leverage, if incurred, would increase the total capital available for investment by the Company.

On June 19, 2023, the Company, entered into the Credit Facility with Massachusetts Mutual Life Insurance Company under which the Company is permitted to borrow up to $150,000 (amount in thousands). On June 10, 2024, the maximum aggregate committed borrowing amount was reduced to $100,000 (amount in thousands).

As of September 30, 2024, the Company had $13,640 (amount in thousands) of outstanding borrowings. See “Note 4. Borrowings” in “Item 1. Unaudited Consolidated Financial Statements” in this Report for more information.

The Company may also from time to time enter into new credit facilities, increase the size of existing credit facilities or issue debt securities. Any such incurrence or issuance would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors.

Contractual Obligations

The Company has entered into an Advisory Agreement with the Advisor pursuant to the 1940 Act to provide the Company with investment advisory services and the Administration Agreement with the Administrator to provide the Company with administrative services. Payments for investment advisory services under the Advisory Agreement are described under Item 1. Consolidated Financial Statements – Notes to Unaudited Consolidated Financial Statements – Note 3. Related Party Transactions. Payments for administration services under the Administration Agreement are described under Item 1. Consolidated Financial Statements – Notes to Unaudited Consolidated Financial Statements – Note 3. Related Party Transactions.

Off-Balance Sheet Arrangements

The Company may become a party to investment commitments and to financial instruments with off-balance sheet risk in the normal course of its business to fund investments and to meet the financial needs of its portfolio companies. These instruments may include commitments to extend credit and involve, to varying degrees, elements of liquidity and credit risk in excess of the amount recognized in the Consolidated Statements of Assets and Liabilities. As of September 30, 2024, the Company believed it had adequate resources to satisfy its unfunded commitments. The unfunded commitments to provide funds to portfolio companies were as follows (amount in thousands):

 

Unfunded Commitments

   As of September 30, 2024  

First Lien Senior Secured

   $ 4,824  

Unregistered Sales of Equity Securities

For the three month periods and nine month periods ended September 30, 2024 and 2023, the Company did not hold closings of our continuous private offering of Shares.

Distributions and Distribution Reinvestment

For the nine month period ended September 30, 2024, the Board declared the following distributions:

On May 22, 2024, the Company paid a dividend of $0.14 per share to stockholders of record as of May 20, 2024.

On August 22, 2024, the Company paid a dividend of $0.29 per share to stockholders of record as of August 20, 2024.

 

33


Table of Contents

The Company has adopted an “opt out” DRIP. As a result, unless stockholders elect to “opt out” of the DRIP, stockholders will have their cash dividends or distributions automatically reinvested in additional shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), rather than receiving cash. Shareholders who receive distributions in the form of shares of Common Stock will generally be subject to the same U.S. federal, state and local tax consequences as if they received cash distributions; however, those stockholders will not receive cash with which to pay any applicable taxes.

Critical Accounting Estimates

The preparation of the Company’s financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. For a description of our critical accounting policies, see Note 2 “Significant Accounting Policies” to our consolidated financial statements included in this Report. We consider the most significant accounting policies to be those related to our Fair Value of Investments, Revenue Recognition, Deferred Financing Fees, Distribution Policy, and Income Taxes. There have been no material changes in our critical accounting policies and practices.

The Company’s critical accounting policies, including those relating to the valuation of its investment portfolio, should be read in connection with the Company’s financial statements in Part I, Item 1 of this Report, “Risk Factors” in Part II, Item 1A of this Report, and “Risk Factors” in Item 1A of the Company’s initial registration statement on Form 10 (“Form 10”) and most recent Form 10-K.

Related Party Transactions

The Company has entered into a number of business relationships with affiliated or related parties, including the following (which are defined in the notes to the accompanying unaudited consolidated financial statements if not defined herein):

 

   

the Advisory Agreement;

 

   

the Administration Agreement; and

 

   

the Expense Reimbursement Agreement.

See “Item 1. Consolidated Financial Statements-Notes to the Unaudited Consolidated Financial Statements-Note 3. Related Party Transactions.

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

The Company is subject to financial market risks, including changes in interest rates. To the extent that the Company borrows money to make investments, the Company’s net investment income is dependent upon the difference between the rate at which the Company borrows funds and the rate at which the Company invests these funds. In periods of rising interest rates, the Company’s cost of funds would increase, which may reduce the Company’s net investment income. Because the Company expects that most of its investments will bear interest at floating rates, the Company anticipates that an increase in interest rates would have a corresponding increase in the Company’s interest income that would likely offset any increase in the Company’s cost of funds and, thus, net investment income would not be reduced. However, there can be no assurance that a significant change in market interest rates will not have an adverse effect on the Company’s net investment income.

The Company will generally invest in illiquid loans and securities including debt and equity securities of middle-market companies. Because the Company expects that there will not be a readily available market for many of the investments in the Company’s portfolio, the Company expects to value many of its portfolio investments at fair value as determined in good faith by the Advisor using a documented valuation policy and a consistently applied valuation process, subject to Board oversight. 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 differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.

 

34


Table of Contents

Assuming that the Consolidated Statements of Assets and Liabilities as of September 30, 2024, were to remain constant and that the Company took no actions to alter its existing interest rate sensitivity, the following table shows the annualized impact of hypothetical base rate changes in interest rates (amounts in thousands).

 

Change in Interest Rates

   Increase (Decrease) in
Interest Income
     Increase (Decrease) in
Interest Expense
     Net Increase (Decrease) in
Net Investment Income
 

Down 25 basis points

   $ (330    $ —       $ (330

Up 100 basis points

   $ 1,319      $ —       $ 1,319  

Up 200 basis points

   $ 2,638      $ —       $ 2,638  

Up 300 basis points

   $ 3,956      $ —       $ 3,956  

In addition, although the Company does not currently intend to make investments that are denominated in a foreign currency, to the extent it does, the Company will be subject to risks associated with changes in currency exchange rates. These risks include the possibility of significant fluctuations in the foreign currency markets, the imposition or modification of foreign exchange controls and potential illiquidity in the secondary market. These risks will vary depending upon the currency or currencies involved.

The Company may hedge against interest rate and currency exchange rate fluctuations by using standard hedging instruments such as futures, options and forward contracts subject to the requirements of the 1940 Act. While hedging activities may insulate the Company against adverse changes in interest rates, they may also limit the Company’s ability to participate in benefits of lower interest rates with respect to the Company’s portfolio of investments with fixed interest rates.

 

Item 4.

Controls and Procedures

Evaluation of disclosure controls and procedures

As of the end of the period covered by this Report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s President and Treasurer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, the Company’s President and Treasurer have concluded that the Company’s current disclosure controls and procedures are effective in timely alerting them to material information relating to the Company that is required to be disclosed by the Company in the reports it files or submits under the Exchange Act.

Changes in internal control over financial reporting

There have been no changes in the Company’s internal control over financial reporting that occurred during the Company’s most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

35


Table of Contents

PART II. OTHER INFORMATION

 

Item 1.

Legal Proceedings

The Company is not currently subject to any material legal proceedings, nor, to the Company’s knowledge, is any material legal proceeding threatened against the Company. From time to time, the Company may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of the Company’s rights under loans to or other contracts with the Company’s portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, the Company does not expect that these proceedings will have a material effect upon the Company’s 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 the Company’s Form 10-K, which could materially affect the Company’s business, financial condition and/or operating results. The risks described in the Company’s Form 10-K are not the only risks the Company faces. Additional risks and uncertainties that are not currently known to the Company or that the Company currently deems to be immaterial also may materially adversely affect the Company’s business, financial condition and/or operating results. During the three months ended September 30, 2024, there have been no material changes from the risk factors set forth in the Company’s most recent Form 10-K.

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

The Company did not sell any securities during the period covered by this Report that were not registered under the Securities Act.

 

Item 3.

Defaults Upon Senior Securities

None.

 

Item 4.

Mine Safety Disclosure

Not applicable.

 

Item 5.

Other Information

None.

 

36


Table of Contents
Item 6.

Exhibits

The following exhibits are filed as part of this Report or are hereby incorporated by reference to exhibits previously filed with the SEC:

 

24.1*    Power of Attorney for John W. Lane.
24.2*    Power of Attorney for Crystal Porter.
31.1**    Certification of Principal Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.
31.2**    Certification of Principal Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.
32.1**    Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended.
101.INS**    Inline XBRL Instance Document
101.SCH**    Inline XBRL Taxonomy Extension Schema
101.CAL**    Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**    Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**    Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE**    Inline XBRL Taxonomy Extension Presentation Linkbase Document
104    Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

 

*

Previously filed as an exhibit to the Company’s Form 10-K filed on March 24, 2023 and incorporated herein by reference.

**

Filed herewith.

 

37


Table of Contents

SIGNATURES

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

 

      PIMCO CAPITAL SOLUTIONS BDC CORP.
Date: November 13, 2024     By:  

/s/ John W. Lane*

      John W. Lane
      President
      (Principal Executive Officer)

 

Date: November 13, 2024     By:  

/s/ Crystal Porter*

      Crystal Porter
      Treasurer
      (Principal Financial and Accounting Officer)

 

Date: November 13, 2024     *By:  

/s/ William J. Bielefeld

      William J. Bielefeld
      As attorney-in-fact

 

* 

Pursuant to power of attorney filed as an exhibit to the registrant’s Form 10-K filed on March 24, 2023 and incorporated herein by reference.

 

 

38