0001948368--12-31Q2false0001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Fullsteam Operations LLC Industry Financial Services Reference Rate and Spread S + 8.25% Maturity 11/27/292024-06-300001948368ck0001948368:InvestmentsAtFairValueMemberck0001948368:DistributorsMemberck0001948368:IndustryConcentrationRiskMember2024-01-012024-06-300001948368ck0001948368:FormulationsParentCorporationMemberck0001948368:FirstLienOrSeniorSecuredDebtMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Charger Debt Merger Sub, LLC (dba Classic Collision) Industry Specialty Retail Interest Rate 10.34% Reference Rate and Spread S + 5.00% Maturity 06/02/31 One2024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Arrow Buyer, Inc. 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(dba Bazooka Candy Brands) Industry Consumer Staples Distribution & Retail Reference Rate and Spread S + 6.00% Maturity 10/05/292024-06-300001948368ck0001948368:CommercialServicesAndSuppliesMemberck0001948368:InvestmentsAtFairValueMemberck0001948368:IndustryConcentrationRiskMember2024-01-012024-06-300001948368Investments in Affiliated Money Market Fund - 12.38% Goldman Sachs Financial Square Government Fund - Institutional Shares2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% CI (Quercus) Intermediate Holdings, LLC (dba SavATree) Industry Diversified Consumer Services Interest Rate 10.35% Reference Rate and Spread S + 5.00% Maturity 06/06/312024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Sunshine Cadence HoldCo, LLC (dba Cadence Education) Industry Diversified Consumer Services Reference Rate and Spread S + 5.00% Maturity 05/01/302024-06-300001948368ck0001948368:MayOneTwoThosandTwentyFourMember2024-01-012024-06-300001948368us-gaap:RevolvingCreditFacilityMemberus-gaap:DebtMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% TM Restaurant Group LLC Industry Hotels, Restaurants & Leisure Reference Rate and Spread S + 7.25% Maturity 07/26/28 One2024-06-300001948368us-gaap:RevolvingCreditFacilityMember2023-04-012023-06-300001948368ck0001948368:FullsteamOperationsLlcMemberck0001948368:FirstLienOrSeniorSecuredDebtMember2023-12-310001948368ck0001948368:SpecialtyRetailMemberck0001948368:InvestmentsAtFairValueMemberck0001948368:IndustryConcentrationRiskMember2024-01-012024-06-300001948368Investment Equity Securities - 0.91% United States - 0.91% Common Stock - 0.91% Total United States2024-06-300001948368ck0001948368:NonControlledNonAffiliatedInvestmentsMember2023-04-012023-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Last-Out Unitranche - 14.55% Skyway Towers Intermediate LLC Industry Wireless Telecommunication Services Interest Rate 11.95% Reference Rate and Spread S + 6.61% Maturity 12/22/282024-06-3000019483682024-01-012024-06-300001948368us-gaap:FairValueInputsLevel3Memberck0001948368:FirstLienOrSeniorSecuredDebtMember2024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Onyx CenterSource, Inc. Industry Software Interest Rate 12.25% Reference Rate and Spread S + 6.75% Maturity 12/15/28 One2023-12-310001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Ncontracts, LLC Industry Software Reference Rate and Spread S + 6.50% Maturity 12/11/292023-12-310001948368us-gaap:FairValueInputsLevel1Memberck0001948368:InvestmentsInAffiliatedMoneyMarketFundMember2023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Ncontracts, LLC Industry Software Reference Rate and Spread S + 6.50% Maturity 12/11/292024-06-300001948368ck0001948368:BankLoansCorporateDebtAndOtherDebtObligationsMemberus-gaap:ValuationTechniqueDiscountedCashFlowMemberus-gaap:FairValueInputsLevel3Memberck0001948368:FirstLienOrSeniorSecuredDebtMemberus-gaap:MeasurementInputDiscountRateMembersrt:MinimumMember2023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:GPSPhoenixBuyerIncMember2024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:SuperiorEnvironmentalSolutionsMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Circustrix Holdings, LLC (dba SkyZone) Industry Leisure Products Reference Rate and Spread S + 6.50% Maturity 07/18/282024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Groundworks, LLC Industry Diversified Consumer Services Interest Rate 11.90% Reference Rate and Spread S + 6.50% Maturity 03/14/302023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:CiQuercusIntermediateHoldingsLlcMember2023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Rubrik, Inc. Industry Software Interest Rate 12.48% Reference Rate and Spread S + 7.00% Maturity 08/17/282024-06-300001948368Investments in Affiliated Money Market Fund2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Highfive Dental Holdco, LLC Industry Health Care Providers & Services Reference Rate and Spread S + 6.75% Maturity 06/13/28 One2024-06-3000019483682023-12-310001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Fullsteam Operations LLC Industry Financial Services Interest Rate 13.78% Reference Rate and Spread S + 8.25% Maturity 11/27/292023-12-310001948368ck0001948368:SpecialtyRetailMember2023-12-310001948368ck0001948368:InvestmentsAtFairValueMemberck0001948368:DistributorsMemberck0001948368:IndustryConcentrationRiskMember2023-01-012023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:ArtifactBidcoIncMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Project Accelerate Parent, LLC (dba ABC Fitness) Industry Financial Services Reference Rate and Spread S +5.25% Maturity 02/24/312024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Last-Out Unitranche - 14.55% Tarpon Towers II LLC Industry Wireless Telecommunication Services Interest Rate 12.16% Reference Rate and Spread S + 6.83% Maturity 02/01/292024-06-300001948368us-gaap:InvestmentUnaffiliatedIssuerMember2023-01-012023-06-3000019483682022-12-310001948368us-gaap:InvestmentUnaffiliatedIssuerMember2023-12-310001948368ck0001948368:InvestmentsAtFairValueMemberus-gaap:ConsumerSectorMemberck0001948368:IndustryConcentrationRiskMember2024-01-012024-06-300001948368ck0001948368:FirstLienOrLastOutUnitrancheMember2024-06-3000019483682024-08-130001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% UP Acquisition Corp. (dba Unified Power) Industry Commercial Services & Supplies Interest Rate 11.33% Reference Rate and Spread S + 6.00% Maturity 10/31/292024-06-300001948368us-gaap:CommonStockMember2024-06-202024-06-200001948368us-gaap:HealthcareSectorMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% UP Acquisition Corp. (dba Unified Power) Industry Commercial Services & Supplies Reference Rate and Spread S + 6.00% Maturity 10/31/292024-06-300001948368ck0001948368:InvestmentsAtFairValueMemberck0001948368:HotelsRestaurantsLeisureMemberck0001948368:IndustryConcentrationRiskMember2024-01-012024-06-300001948368us-gaap:FairValueInputsLevel3Memberus-gaap:CommonStockMember2024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Last-Out Unitranche - 16.08% Skyway Towers Intermediate LLC Industry Wireless Telecommunication Services Interest Rate 11.73% Reference Rate and Spread S + 6.37% Maturity 12/22/282023-12-310001948368us-gaap:ValuationTechniqueDiscountedCashFlowMemberck0001948368:BankLoansCorporateDebtAndOtherDebtObligationsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMembersrt:MinimumMemberck0001948368:FirstLienOrLastOutUnitrancheMember2024-06-300001948368Investments in Affiliated Money Market Fund - 5.56%2023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Valet Waste Holdings, Inc. (dba Valet Living) Industry Commercial Services & Supplies Interest Rate 11.19% Reference Rate and Spread S + 5.75% Maturity 05/01/292024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Valet Waste Holdings, Inc. (dba Valet Living) Industry Commercial Services & Supplies Interest Rate 11.19% Reference Rate and Spread S + 5.75% Maturity 05/01/29 One2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Formulations Parent Corporation (dba Chase Corp) Industry Chemicals Interest Rate 11.07% Reference Rate and Spread S + 5.75% Maturity 11/15/302024-06-300001948368us-gaap:FairValueInputsLevel3Member2022-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% CI (Quercus) Intermediate Holdings, LLC (dba SavATree) Industry Diversified Consumer Services Interest Rate 10.34% Reference Rate and Spread P + 5.00% Maturity 06/06/312024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMember2024-06-300001948368ck0001948368:HotelsRestaurantsLeisureMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Admiral Buyer, Inc. (dba Fidelity Payment Services) Industry Financial Services Interest Rate 10.84% Reference Rate and Spread S + 5.50% Maturity 05/08/282024-06-300001948368us-gaap:SoftwareDevelopmentMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% USA DeBusk, LLC Industry Commercial Services & Supplies Reference Rate and Spread S + 5.25% Maturity 04/30/312024-06-300001948368ck0001948368:FirstLienOrLastOutUnitrancheMember2023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% VASA Fitness Buyer, Inc. Industry Diversified Consumer Services Reference Rate and Spread S + 7.50% Maturity 08/14/282024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Superior Environmental Solutions Industry Commercial Services & Supplies Interest Rate 11.94% Reference Rate and Spread S + 6.50% Maturity 08/01/29 One2024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% GPS Phoenix Buyer, Inc. (dba Guidepoint) Industry IT Services Reference Rate and Spread S + 6.00% Maturity 10/02/29 One2023-12-310001948368ck0001948368:InvestmentsAtFairValueMemberck0001948368:IndustryConcentrationRiskMember2023-01-012023-12-310001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Harrington Industrial Plastics, LLC Industry Trading Companies & Distributors Interest Rate 11.11% Reference Rate and Spread S + 5.75% Maturity 10/07/302023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:SunshineCadenceHoldcoLlcMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% NCWS Intermediate, Inc. (dba National Carwash Solutions) Industry Trading Companies & Distributors Interest Rate 10.58% Reference Rate and Spread S + 5.25% Maturity 12/31/292024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Valet Waste Holdings, Inc. (dba Valet Living) Industry Commercial Services & Supplies Reference Rate and Spread S + 5.75% Maturity 05/01/292024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% AI Titan Parent, Inc. 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Industry Commercial Services & Supplies Reference Rate and Spread S + 6.00% Maturity 01/29/282023-12-3100019483681 Month SOFR Member2024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:RecordedBooksIncMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Spotless Brands, LLC Industry Diversified Consumer Services Interest Rate 12.23% Reference Rate and Spread S + 6.75% Maturity 07/25/282024-06-300001948368us-gaap:ValuationTechniqueDiscountedCashFlowMemberus-gaap:FairValueInputsLevel3Memberck0001948368:BankLoansCorporateDebtAndOtherDebtObligationsMemberus-gaap:MeasurementInputDiscountRateMemberck0001948368:FirstLienOrLastOutUnitrancheMember2024-06-300001948368ck0001948368:LeisureProductsMemberck0001948368:InvestmentsAtFairValueMemberck0001948368:IndustryConcentrationRiskMember2023-01-012023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Circustrix Holdings, LLC (dba SkyZone) Industry Leisure Products Interest Rate 11.83% Reference Rate and Spread S + 6.50% Maturity 07/18/282024-06-3000019483681st Lien/Senior Secured Debt2023-12-310001948368ck0001948368:AccruedExpensesAndOtherLiabilitiesMember2023-12-310001948368ck0001948368:CommercialServicesAndSuppliesMemberck0001948368:InvestmentsAtFairValueMemberck0001948368:IndustryConcentrationRiskMember2023-01-012023-12-310001948368Debt Investments2024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:GPSPhoenixBuyerIncMember2023-12-310001948368ck0001948368:InvestmentsAtFairValueMemberus-gaap:ConsumerSectorMemberck0001948368:IndustryConcentrationRiskMember2023-01-012023-12-310001948368us-gaap:CommonStockMember2024-06-3000019483681st Lien/Last-Out Unitranche2024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:CrewlineBuyerIncMember2024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Ncontracts, LLC Industry Software Reference Rate and Spread S + 6.50% Maturity 12/11/29 One2023-12-310001948368ck0001948368:AverageEndOfSuchQuarterAndZeroMember2024-01-012024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:ArrowBuyerIncMember2024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Rubrik, Inc. Industry Software Interest Rate 12.52% Reference Rate and Spread S + 7.00% Maturity 08/17/282023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:AqSunshineIncMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Arrow Buyer, Inc. (dba Archer Technologies) Industry Software Interest Rate 11.08% Reference Rate and Spread S + 5.75% Maturity 07/01/30 One2024-06-300001948368ck0001948368:BankLoansCorporateDebtAndOtherDebtObligationsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:ValuationTechniqueDiscountedCashFlowMemberck0001948368:FirstLienOrSeniorSecuredDebtMemberus-gaap:MeasurementInputDiscountRateMembersrt:MaximumMember2023-12-310001948368us-gaap:RevolvingCreditFacilityMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% ABC Investment Holdco Inc. 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(dba Unified Power) Industry Commercial Services & Supplies Reference Rate and Spread S + 6.00% Maturity 10/31/292023-12-310001948368us-gaap:FairValueInputsLevel3Memberck0001948368:InvestmentAdviserDidNotDevelopUnobservableInputsMember2024-06-300001948368United States - 12.38%2024-06-300001948368us-gaap:InvestmentUnaffiliatedIssuerMember2024-01-012024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Charger Debt Merger Sub, LLC (dba Classic Collision) Industry Specialty Retail Interest Rate 10.34% Reference Rate and Spread S + 5.00% Maturity 06/02/312024-06-300001948368us-gaap:DebtMember2024-01-012024-06-300001948368us-gaap:FairValueInputsLevel3Memberck0001948368:FirstLienOrSeniorSecuredDebtMember2023-01-012023-06-3000019483681st Lien/Senior Secured Debt - 87.33%2023-12-310001948368us-gaap:CommonStockMember2024-06-300001948368us-gaap:DebtMember2023-12-310001948368ck0001948368:BankLoansCorporateDebtAndOtherDebtObligationsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:ValuationTechniqueDiscountedCashFlowMemberus-gaap:MeasurementInputDiscountRateMemberck0001948368:FirstLienOrLastOutUnitrancheMember2023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Crewline Buyer, Inc. (dba New Relic) Industry Software Reference Rate and Spread S + 6.75% Maturity 11/08/302024-06-300001948368United States2023-12-310001948368ck0001948368:WirelessTelecommunicationServicesMember2024-06-300001948368ck0001948368:DistributorsMember2023-12-310001948368ck0001948368:NonControlledAffiliatedInvestmentsMember2024-04-012024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% AQ Sunshine, Inc. (dba Relation Insurance) Industry Insurance Reference Rate and Spread S + 6.25% Maturity 04/15/272024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% AQ Sunshine, Inc. (dba Relation Insurance) Industry Insurance Interest Rate 11.73% Reference Rate and Spread S + 6.25% Maturity 04/15/27 One2024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% DFS Holding Company, Inc. Industry Distributors Interest Rate 12.46% Reference Rate and Spread S + 7.00% Maturity 01/31/29 One2023-12-310001948368Non-Controlled Affiliates2023-12-310001948368ck0001948368:TarponTowersIiLlcMemberck0001948368:FirstLienOrLastOutUnitrancheMember2024-06-300001948368us-gaap:InvestmentUnaffiliatedIssuerMember2024-06-300001948368us-gaap:ConsumerSectorMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% AI Titan Parent, Inc. (dba Prometheus) Industry Software Reference Rate and Spread S + 4.75% Maturity 06/03/312024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% United Flow Technologies Intermediate Holdco II, LLC Industry Trading Companies & Distributors Interest Rate 10.60% Reference Rate and Spread S + 5.25% Maturity 06/21/302024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:CircustrixHoldingsLlcMember2024-06-300001948368ck0001948368:FebruaryTwentySevenTwoThousandTwentyFourMember2024-01-012024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% VisionSafe Holdings, Inc Industry Aerospace & Defense Interest Rate 11.33% Reference Rate and Spread S + 6.00% Maturity 04/19/302024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Rubrik, Inc. Industry Software Interest Rate 12.52% Reference Rate and Spread S + 7.00% Maturity 08/17/28 One2023-12-310001948368Investments and Investments in Affiliated Money Market Fund2023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% DFS Holding Company, Inc. Industry Distributors Interest Rate 12.44% Reference Rate and Spread S + 7.00% Maturity 01/31/292024-06-300001948368us-gaap:CommonStockMember2024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:VisionsafeHoldingsIncMember2023-12-310001948368Investment Equity Securities - 0.91% United States - 0.91% Common Stock - 0.91% RPC ABC Investment Holdings LLC (dba ABC Plumbing) Industry Diversified Consumer Services Initial Acquisition Date 04/26/242024-06-300001948368ck0001948368:InvestmentsAtFairValueMemberck0001948368:AerospaceDefenseMemberck0001948368:IndustryConcentrationRiskMember2023-01-012023-12-310001948368Investments and Investments in Affiliated Money Market Fund - 139.56%2024-06-300001948368ck0001948368:UnitedFlowTechnologiesIntermediateHoldcoIiLlcMemberck0001948368:FirstLienOrSeniorSecuredDebtMember2023-12-310001948368us-gaap:FairValueInputsLevel3Member2024-06-300001948368Non-Controlled Affiliates2023-01-012023-12-310001948368us-gaap:FairValueInputsLevel3Memberck0001948368:FirstLienOrSeniorSecuredDebtMember2023-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Fullsteam Operations LLC Industry Financial Services Interest Rate 13.74% Reference Rate and Spread S + 8.25% Maturity 11/27/292024-06-300001948368ck0001948368:BankLoansCorporateDebtAndOtherDebtObligationsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:ValuationTechniqueDiscountedCashFlowMemberus-gaap:MeasurementInputDiscountRateMemberck0001948368:FirstLienOrLastOutUnitrancheMembersrt:MaximumMember2023-12-310001948368us-gaap:FairValueInputsLevel3Memberus-gaap:IncomeApproachValuationTechniqueMember2023-12-310001948368ck0001948368:BankLoansCorporateDebtAndOtherDebtObligationsMemberus-gaap:ValuationTechniqueDiscountedCashFlowMemberus-gaap:FairValueInputsLevel3Memberck0001948368:FirstLienOrSeniorSecuredDebtMembersrt:WeightedAverageMemberus-gaap:MeasurementInputDiscountRateMember2023-12-310001948368srt:MaximumMemberck0001948368:PhillipStreetMiddleMarketLendingInvestmentsLlcMember2023-02-100001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% AQ Sunshine, Inc. (dba Relation Insurance) Industry Insurance Reference Rate and Spread S + 6.25% Maturity 04/15/272023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:ValetWasteHoldingsIncMember2023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Admiral Buyer, Inc. 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(dba RBMedia) Industry Media Interest Rate 11.60% Reference Rate and Spread S + 6.25% Maturity 09/03/302024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:CrewlineBuyerIncMember2023-12-310001948368us-gaap:FairValueInputsLevel2Memberck0001948368:FirstLienOrLastOutUnitrancheMember2024-06-300001948368us-gaap:RevolvingCreditFacilityMember2023-02-100001948368us-gaap:RevolvingCreditFacilityMember2024-04-012024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% TM Restaurant Group LLC Industry Hotels, Restaurants & Leisure Interest Rate 12.72% Reference Rate and Spread S + 7.25% Maturity 07/26/282023-12-310001948368ck0001948368:NonControlledAffiliatedInvestmentsMember2023-04-012023-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Last-Out Unitranche - 14.55% K2 Towers III, LLC Industry Wireless Telecommunication Services Interest Rate 11.89% Reference Rate and Spread S + 6.55% Maturity 12/06/282024-06-300001948368ck0001948368:TextilesApparelLuxuryGoodsMemberck0001948368:InvestmentsAtFairValueMemberck0001948368:IndustryConcentrationRiskMember2023-01-012023-12-310001948368ck0001948368:AccruedOrganizationCostMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Admiral Buyer, Inc. (dba Fidelity Payment Services) Industry Financial Services Interest Rate 10.83% Reference Rate and Spread S + 5.50% Maturity 05/08/282024-06-300001948368us-gaap:CommonStockMember2023-12-310001948368ck0001948368:InvestmentsAtFairValueMemberck0001948368:AerospaceDefenseMemberck0001948368:IndustryConcentrationRiskMember2024-01-012024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:UPAcquisitionCorpMember2023-12-310001948368Investment Equity Securities - 0.91% United States - 0.91% Common Stock - 0.91% Total Common Stock2024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% AQ Sunshine, Inc. (dba Relation Insurance) Industry Insurance Interest Rate 11.79% Reference Rate and Spread S + 6.25% Maturity 04/15/27 Two2023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% NCWS Intermediate, Inc. (dba National Carwash Solutions) Industry Trading Companies & Distributors Reference Rate and Spread S + 5.25% Maturity 12/31/29 One2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Recorded Books Inc. (dba RBMedia) Industry Media Reference Rate and Spread S + 6.25% Maturity 08/31/282024-06-300001948368Investments in Affiliated Money Market Fund - 12.38%2024-06-300001948368ck0001948368:InvestmentsAtFairValueMemberck0001948368:WirelessTelecommunicationServicesMemberck0001948368:IndustryConcentrationRiskMember2024-01-012024-06-300001948368ck0001948368:WirelessTelecommunicationServicesMember2023-12-3100019483682024-04-012024-06-300001948368us-gaap:InvestmentUnaffiliatedIssuerMember2024-04-012024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Crewline Buyer, Inc. (dba New Relic) Industry Software Interest Rate 12.10% Reference Rate and Spread S + 6.75% Maturity 11/08/302023-12-310001948368ck0001948368:InterestAndOtherDebtExpensePayableMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% ASM Buyer, Inc. Industry Commercial Services & Supplies Reference Rate and Spread S + 6.00% Maturity 01/29/282024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Sunshine Cadence HoldCo, LLC (dba Cadence Education) Industry Diversified Consumer Services Interest Rate 10.33% Reference Rate and Spread S + 5.00% Maturity 05/01/312024-06-300001948368Investment Equity Securities - 0.91% United States - 0.91% Common Stock - 0.91% RPC ABC Investment Holdings LLC (dba ABC Plumbing) Industry Diversified Consumer Services Initial Acquisition Date 04/26/242024-01-012024-06-300001948368us-gaap:FairValueInputsLevel3Memberus-gaap:ValuationTechniqueDiscountedCashFlowMemberck0001948368:BankLoansCorporateDebtAndOtherDebtObligationsMemberck0001948368:FirstLienOrSeniorSecuredDebtMemberus-gaap:MeasurementInputDiscountRateMembersrt:MaximumMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% AQ Sunshine, Inc. (dba Relation Insurance) Industry Insurance Interest Rate 11.73% Reference Rate and Spread S + 6.25% Maturity 04/15/27 Three2024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:ChargerDebtMergerSubLlcMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% VASA Fitness Buyer, Inc. Industry Diversified Consumer Services Interest Rate 12.94% Reference Rate and Spread S + 7.50% Maturity 08/14/282024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% CI (Quercus) Intermediate Holdings, LLC (dba SavATree) Industry Diversified Consumer Services Reference Rate and Spread S + 5.00% Maturity 06/06/312024-06-300001948368us-gaap:CommonStockMember2023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Fullsteam Operations LLC Industry Financial Services Interest Rate 13.74% Reference Rate and Spread S + 8.25% Maturity 11/27/29 Two2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% ASM Buyer, Inc. Industry Commercial Services & Supplies Reference Rate and Spread S + 6.00% Maturity 01/29/28 One2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% ABC Investment Holdco Inc. (dba ABC Plumbing) Industry Diversified Consumer Services Interest Rate 11.33% Reference Rate and Spread S + 6.00% Maturity 04/26/292024-06-300001948368ck0001948368:ITServicesMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% TM Restaurant Group LLC Industry Hotels, Restaurants & Leisure Interest Rate 12.71% Reference Rate and Spread S + 7.25% Maturity 07/26/282024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Recorded Books Inc. (dba RBMedia) Industry Media Interest Rate 11.64% Reference Rate and Spread S + 6.25% Maturity 09/03/302023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:PtIntermediateHoldingsIiiLlcMember2023-12-310001948368ck0001948368:FirstLienOrLastOutUnitrancheMember2023-12-310001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Ncontracts, LLC Industry Software Interest Rate 11.80% Reference Rate and Spread S + 6.50% Maturity 12/11/292023-12-310001948368us-gaap:FairValueInputsLevel3Member2023-01-012023-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Arrow Buyer, Inc. (dba Archer Technologies) Industry Software Reference Rate and Spread S + 5.75% Maturity 07/01/302024-06-300001948368Total Investments and Investments in Affiliated Money Market Fund - 108.97%2023-12-310001948368ck0001948368:NcontractsLlcMemberck0001948368:FirstLienOrSeniorSecuredDebtMember2023-12-310001948368ck0001948368:InvestmentsAtFairValueMemberck0001948368:InsuranceMemberck0001948368:IndustryConcentrationRiskMember2023-01-012023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Last-Out Unitranche - 14.55% Skyway Towers Intermediate LLC Industry Wireless Telecommunication Services Interest Rate 11.95% Reference Rate and Spread S + 6.61% Maturity 12/22/28 One2024-06-300001948368us-gaap:ValuationTechniqueDiscountedCashFlowMemberck0001948368:BankLoansCorporateDebtAndOtherDebtObligationsMemberus-gaap:FairValueInputsLevel3Memberck0001948368:FirstLienOrSeniorSecuredDebtMemberus-gaap:MeasurementInputDiscountRateMember2024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:HarringtonIndustrialPlasticsLlcMember2024-06-300001948368ck0001948368:TarponTowersIiLlcMemberck0001948368:FirstLienOrLastOutUnitrancheMember2023-12-310001948368us-gaap:FairValueInputsLevel3Member2024-01-012024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:GroundworksLlcMember2024-06-300001948368ck0001948368:InsuranceMember2023-12-310001948368ck0001948368:IncentiveFeesAndInterestAndOtherDebtExpensesMember2023-01-012023-06-300001948368us-gaap:FairValueMeasurementsRecurringMember2024-06-300001948368us-gaap:MoneyMarketFundsMember2024-06-300001948368ck0001948368:LeisureProductsMember2023-12-310001948368ck0001948368:ConsumerStaplesDistributionAndRetailMemberck0001948368:InvestmentsAtFairValueMemberck0001948368:IndustryConcentrationRiskMember2023-01-012023-12-310001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% GPS Phoenix Buyer, Inc. (dba Guidepoint) Industry IT Services Interest Rate 11.38% Reference Rate and Spread S + 6.00% Maturity 10/02/292023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberus-gaap:FairValueInputsLevel2Member2024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Superior Environmental Solutions Industry Commercial Services & Supplies Interest Rate 11.96% Reference Rate and Spread S + 6.50% Maturity 08/01/292023-12-310001948368Debt Investments2023-12-310001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Last-Out Unitranche - 16.08% K2 Towers III, LLC Industry Wireless Telecommunication Services Interest Rate 11.91% Reference Rate and Spread S + 6.55% Maturity 12/06/282023-12-310001948368us-gaap:InvestmentUnaffiliatedIssuerMember2023-04-012023-06-300001948368us-gaap:FinancialServicesSectorMemberck0001948368:InvestmentsAtFairValueMemberck0001948368:IndustryConcentrationRiskMember2023-01-012023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:SuperiorEnvironmentalSolutionsMember2023-12-310001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Harrington Industrial Plastics, LLC Industry Trading Companies & Distributors Interest Rate 11.11% Reference Rate and Spread S + 5.75% Maturity 10/07/30 One2023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Last-Out Unitranche - 14.55% Thor FinanceCo LLC (dba Harmoni Towers) Industry Wireless Telecommunication Services Interest Rate 12.39% Reference Rate and Spread S + 7.00% Maturity 08/24/282024-06-300001948368ck0001948368:FirstLienOrLastOutUnitrancheMember2023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:VasaFitnessBuyerIncMember2023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Harrington Industrial Plastics, LLC Industry Trading Companies & Distributors Interest Rate 11.09% Reference Rate and Spread S + 5.75% Maturity 10/07/30 One2024-06-300001948368us-gaap:InvestmentAffiliatedIssuerNoncontrolledMember2023-12-310001948368Non-Controlled Affiliates ABC Investment Holdco Inc. (dba ABC Plumbing)2024-01-012024-06-300001948368ck0001948368:ChemicalsMember2023-12-310001948368ck0001948368:InterestAndOtherDebtExpensesMember2024-01-012024-06-300001948368ck0001948368:NonControlledAffiliatedInvestmentsMember2023-01-012023-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:OnyxCenterSourceIncMember2023-12-310001948368ck0001948368:InvestmentsAtFairValueMemberck0001948368:ChemicalsMemberck0001948368:IndustryConcentrationRiskMember2024-01-012024-06-300001948368ck0001948368:NonControlledAffiliatedInvestmentsMember2024-01-012024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Spotless Brands, LLC Industry Diversified Consumer Services Interest Rate 12.27% Reference Rate and Spread S + 6.75% Maturity 07/25/282023-12-310001948368Non-Controlled Affiliates2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Recorded Books Inc. (dba RBMedia) Industry Media Reference Rate and Spread S + 5.75% Maturity 08/31/302024-06-300001948368Non-Controlled Affiliates2022-12-310001948368us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2024-06-3000019483681st Lien/Last-Out Unitranche - 14.55%2024-06-300001948368us-gaap:FairValueInputsLevel3Member2023-06-300001948368ck0001948368:TextilesApparelLuxuryGoodsMember2024-06-300001948368United States2024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Arrow Buyer, Inc. (dba Archer Technologies) Industry Software Reference Rate and Spread S + 6.50% Maturity 07/01/302023-12-310001948368ck0001948368:SpecialtyRetailMember2024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:ValetWasteHoldingsIncMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Artifact Bidco, Inc. 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Industry Commercial Services & Supplies Reference Rate and Spread S + 6.00% Maturity 01/29/272023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:UsaDebuskLlcMember2024-06-300001948368us-gaap:ValuationTechniqueDiscountedCashFlowMemberck0001948368:BankLoansCorporateDebtAndOtherDebtObligationsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMemberck0001948368:FirstLienOrLastOutUnitrancheMembersrt:MaximumMember2024-06-300001948368us-gaap:ValuationTechniqueDiscountedCashFlowMemberus-gaap:FairValueInputsLevel3Memberck0001948368:BankLoansCorporateDebtAndOtherDebtObligationsMemberck0001948368:FirstLienOrSeniorSecuredDebtMemberus-gaap:MeasurementInputDiscountRateMembersrt:MinimumMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Last-Out Unitranche - 14.55% Thor FinanceCo LLC (dba Harmoni Towers) Industry Wireless Telecommunication Services Interest Rate 12.25% Reference Rate and Spread S + 7.00% Maturity 08/24/282024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Highfive Dental Holdco, LLC Industry Health Care Providers & Services Interest Rate 12.45% Reference Rate and Spread S + 6.75% Maturity 06/13/282023-12-310001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Ortholite, LLC Industry Textiles, Apparel & Luxury Goods Interest Rate 11.61% Reference Rate and Spread S + 6.25% Maturity 09/29/272023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Highfive Dental Holdco, LLC Industry Health Care Providers & Services Interest Rate 12.19% Reference Rate and Spread S + 6.75% Maturity 06/13/282024-06-300001948368ck0001948368:AccruedDeferredOfferingCostMember2023-12-310001948368ck0001948368:FirstLienOrLastOutUnitrancheMember2024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Fullsteam Operations LLC Industry Financial Services Reference Rate and Spread S + 8.25% Maturity 11/27/29 One2023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:TmRestaurantGroupLlcMember2024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:NcwsIntermediateIncMember2024-06-300001948368us-gaap:ConsumerSectorMember2023-12-310001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Recorded Books Inc. (dba RBMedia) Industry Media Reference Rate and Spread S + 6.25% Maturity 08/31/282023-12-310001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Onyx CenterSource, Inc. Industry Software Interest Rate 12.25% Reference Rate and Spread S + 6.75% Maturity 12/15/282023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% United Flow Technologies Intermediate Holdco II, LLC Industry Trading Companies & Distributors Interest Rate 10.60% Reference Rate and Spread S + 5.25% Maturity 06/23/312024-06-300001948368us-gaap:FairValueInputsLevel3Memberck0001948368:FirstLienOrSeniorSecuredDebtMember2023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:AiTitanParentIncMember2023-12-310001948368ck0001948368:InvestmentsInAffiliatedMoneyMarketFundMember2024-06-3000019483682023-04-012023-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% AQ Sunshine, Inc. (dba Relation Insurance) Industry Insurance Interest Rate 11.74% Reference Rate and Spread S + 6.25% Maturity 04/15/272024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Charger Debt Merger Sub, LLC (dba Classic Collision) Industry Specialty Retail Reference Rate and Spread S + 5.00% Maturity 05/31/302024-06-300001948368ck0001948368:FirstLienOrLastOutUnitrancheMember2024-06-300001948368us-gaap:FairValueInputsLevel2Member2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% PT Intermediate Holdings III, LLC (dba Parts Town) Industry Trading Companies & Distributors Interest Rate 10.35% Reference Rate and Spread S + 5.00% (Incl. 1.75% PIK) Maturity 04/09/302024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Artifact Bidco, Inc. (dba Avetta) Industry Software Reference Rate and Spread S + 4.50% Maturity 05/22/30 One2024-06-300001948368ck0001948368:DistributorsMember2024-06-300001948368ck0001948368:FirstLienOrLastOutUnitrancheMemberck0001948368:TowercoIvHoldingsLlcMember2024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:AqSunshineIncMember2023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:ChargerDebtMergerSubLlcMember2023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:UPAcquisitionCorpMember2024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMember2024-06-300001948368us-gaap:DebtMember2022-10-062022-10-060001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Last-Out Unitranche - 16.08% Thor FinanceCo LLC (dba Harmoni Towers) Industry Wireless Telecommunication Services Interest Rate 12.46% Reference Rate and Spread S + 7.00% Maturity 08/24/282023-12-310001948368ck0001948368:ConsumerStaplesDistributionAndRetailMemberck0001948368:InvestmentsAtFairValueMemberck0001948368:IndustryConcentrationRiskMember2024-01-012024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% AQ Sunshine, Inc. 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Industry Commercial Services & Supplies Reference Rate and Spread S + 6.00% Maturity 01/29/28 One2023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:UsaDebuskLlcMember2023-12-310001948368us-gaap:RevolvingCreditFacilityMembersrt:MinimumMember2022-10-060001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Fullsteam Operations LLC Industry Financial Services Reference Rate and Spread S + 8.25% Maturity 11/27/292023-12-310001948368ck0001948368:ChemicalsMember2024-06-300001948368us-gaap:InvestmentAffiliatedIssuerNoncontrolledMember2024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Last-Out Unitranche - 16.08% EIP Consolidated, LLC (dba Everest Infrastructure) Industry Wireless Telecommunication Services Interest Rate 11.61% Reference Rate and Spread S + 6.25% Maturity 12/07/282023-12-310001948368ck0001948368:FirstIncentiveFeeMember2024-06-300001948368Total Investments - 127.18%2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Project Accelerate Parent, LLC (dba ABC Fitness) Industry Financial Services Interest Rate 10.54% Reference Rate and Spread S +5.25% Maturity 02/24/312024-06-300001948368us-gaap:FairValueInputsLevel3Memberck0001948368:FirstLienOrLastOutUnitrancheMember2023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% PT Intermediate Holdings III, LLC (dba Parts Town) Industry Trading Companies & Distributors Reference Rate and Spread S + 4.75% Maturity 04/09/302024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% AQ Sunshine, Inc. 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(dba Guidepoint) Industry IT Services Reference Rate and Spread S + 6.00% Maturity 10/02/292023-12-310001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Fullsteam Operations LLC Industry Financial Services Interest Rate 13.78% Reference Rate and Spread S + 8.25% Maturity 11/27/29 One2023-12-310001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Groundworks, LLC Industry Diversified Consumer Services Reference Rate and Spread S + 6.50% Maturity 03/14/292023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:ArtifactBidcoIncMember2023-12-310001948368ck0001948368:OnAndAfterThePriorCalendarQuarter1Member2024-01-012024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Blast Bidco Inc. (dba Bazooka Candy Brands) Industry Consumer Staples Distribution & Retail Interest Rate 11.33% Reference Rate and Spread S + 6.00% Maturity 10/04/302024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:ProjectAccelerateParentLlcDbaAbcFitnessMember2023-12-310001948368ck0001948368:FirstLienOrLastOutUnitrancheMemberck0001948368:K2TowersIiiLlcMember2023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:AdmiralBuyerIncMember2024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:TmRestaurantGroupLlcMember2023-12-310001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Blast Bidco Inc. (dba Bazooka Candy Brands) Industry Consumer Staples Distribution & Retail Interest Rate 11.35% Reference Rate and Spread S + 6.00% Maturity 10/04/302023-12-310001948368ck0001948368:FirstLienOrLastOutUnitrancheMemberck0001948368:TowercoIvHoldingsLlcMember2023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:AbcInvestmentHoldcoIncMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% USA DeBusk, LLC Industry Commercial Services & Supplies Interest Rate 10.58% Reference Rate and Spread S + 5.25% Maturity 04/30/302024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% VASA Fitness Buyer, Inc. Industry Diversified Consumer Services Interest Rate 12.94% Reference Rate and Spread S + 7.50% Maturity 08/14/28 One2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% NCWS Intermediate, Inc. 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(dba New Relic) Industry Software Reference Rate and Spread S + 6.75% Maturity 11/08/302023-12-310001948368ck0001948368:IncentiveFeesAndInterestAndOtherDebtExpensesMember2024-01-012024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Formulations Parent Corporation (dba Chase Corp) Industry Chemicals Reference Rate and Spread S + 5.75% Maturity 11/15/292023-12-310001948368us-gaap:ValuationTechniqueDiscountedCashFlowMemberck0001948368:BankLoansCorporateDebtAndOtherDebtObligationsMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberus-gaap:MeasurementInputDiscountRateMemberck0001948368:FirstLienOrLastOutUnitrancheMember2024-06-300001948368us-gaap:FairValueInputsLevel3Memberck0001948368:FirstLienOrLastOutUnitrancheMember2024-01-012024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Singlewire Software, LLC Industry Software Interest Rate 11.35% Reference Rate and Spread S + 6.00% Maturity 05/10/292023-12-310001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% TM Restaurant Group LLC Industry Hotels, Restaurants & Leisure Reference Rate and Spread S + 7.25% Maturity 07/26/28 One2023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:SpotlessBrandsLlcMember2024-06-300001948368us-gaap:FairValueInputsLevel1Memberck0001948368:InvestmentsInAffiliatedMoneyMarketFundMember2024-06-300001948368ck0001948368:InterestAndOtherDebtExpensePayableMember2023-12-310001948368Investment Equity Securities - 0.91% United States - 0.91%2024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Last-Out Unitranche - 16.08% Towerco IV Holdings, LLC Industry Wireless Telecommunication Services Interest Rate 9.71% Reference Rate and Spread S + 4.25% Maturity 08/31/282023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:ProjectAccelerateParentLlcDbaAbcFitnessMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% AQ Sunshine, Inc. 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Industry Distributors Interest Rate 12.44% Reference Rate and Spread S + 7.00% Maturity 01/31/29 One2024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:RubrikIncMember2023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:HarringtonIndustrialPlasticsLlcMember2023-12-310001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% VASA Fitness Buyer, Inc. Industry Diversified Consumer Services Reference Rate and Spread S + 7.88% (Incl. 0.38% PIK) Maturity 08/14/282023-12-310001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% AQ Sunshine, Inc. 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Industry Diversified Consumer Services Reference Rate and Spread S + 7.88% (Incl. 0.38% PIK) Maturity 08/14/28 One2023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Last-Out Unitranche - 14.55% Tarpon Towers II LLC Industry Wireless Telecommunication Services Interest Rate 12.17% Reference Rate and Spread S + 6.83% Maturity 02/01/292024-06-300001948368ck0001948368:InvestmentsAtFairValueMemberus-gaap:MediaContentMemberck0001948368:IndustryConcentrationRiskMember2024-01-012024-06-300001948368ck0001948368:ConsumerStaplesDistributionAndRetailMember2024-06-3000019483682023-03-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:AiTitanParentIncMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Fullsteam Operations LLC Industry Financial Services Reference Rate and Spread S + 8.25% Maturity 11/27/29 One2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Harrington Industrial Plastics, LLC Industry Trading Companies & Distributors Interest Rate 11.09% Reference Rate and Spread S + 5.75% Maturity 10/07/302024-06-300001948368us-gaap:FairValueInputsLevel3Memberus-gaap:CommonStockMember2024-01-012024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:OnyxCenterSourceIncMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% AQ Sunshine, Inc. (dba Relation Insurance) Industry Insurance Interest Rate 11.73% Reference Rate and Spread S + 6.25% Maturity 04/15/27 Four2024-06-300001948368ck0001948368:InvestmentsAtFairValueMemberus-gaap:MediaContentMemberck0001948368:IndustryConcentrationRiskMember2023-01-012023-12-310001948368us-gaap:ValuationTechniqueDiscountedCashFlowMemberus-gaap:FairValueInputsLevel3Memberck0001948368:BankLoansCorporateDebtAndOtherDebtObligationsMemberus-gaap:MeasurementInputDiscountRateMembersrt:MinimumMemberck0001948368:FirstLienOrLastOutUnitrancheMember2023-12-310001948368ck0001948368:HotelsRestaurantsLeisureMember2023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMember2023-12-310001948368ck0001948368:FirstLienOrLastOutUnitrancheMemberck0001948368:SkywayTowersIntermediateLlcMember2023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:SpotlessBrandsLlcMember2023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% USA DeBusk, LLC Industry Commercial Services & Supplies Interest Rate 10.58% Reference Rate and Spread S + 5.25% Maturity 04/30/312024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Superior Environmental Solutions Industry Commercial Services & Supplies Interest Rate 11.96% Reference Rate and Spread S + 6.50% Maturity 08/01/29 One2023-12-310001948368Non-Controlled Affiliates ABC Investment Holdco Inc. (dba ABC Plumbing)2024-06-300001948368us-gaap:FinancialServicesSectorMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Superior Environmental Solutions Industry Commercial Services & Supplies Interest Rate 11.94% Reference Rate and Spread S + 6.50% Maturity 08/01/29 Three2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Arrow Buyer, Inc. (dba Archer Technologies) Industry Software Interest Rate 11.08% Reference Rate and Spread S + 5.75% Maturity 07/01/302024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:AdmiralBuyerIncMember2023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Last-Out Unitranche - 14.55% Towerco IV Holdings, LLC Industry Wireless Telecommunication Services Interest Rate 9.44% Reference Rate and Spread S + 4.00% Maturity 08/31/282024-06-300001948368ck0001948368:BankLoansCorporateDebtAndOtherDebtObligationsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:ValuationTechniqueDiscountedCashFlowMemberck0001948368:FirstLienOrSeniorSecuredDebtMemberus-gaap:MeasurementInputDiscountRateMember2023-12-310001948368ck0001948368:NonControlledNonAffiliatedInvestmentsMember2024-01-012024-06-300001948368us-gaap:MediaContentMember2024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:CiQuercusIntermediateHoldingsLlcMember2024-06-300001948368United States - 103.41%2023-12-310001948368Debt Investments - 103.41%2023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Ncontracts, LLC Industry Software Interest Rate 11.83% Reference Rate and Spread S + 6.50% Maturity 12/11/292024-06-3000019483682022-10-062022-10-060001948368ck0001948368:AccruedDeferredOfferingCostMember2024-06-300001948368ck0001948368:PhillipStreetMiddleMarketLendingInvestmentsLlcMember2023-02-100001948368ck0001948368:InsuranceMember2024-06-300001948368us-gaap:FairValueInputsLevel3Memberck0001948368:FirstLienOrLastOutUnitrancheMember2024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:SinglewireSoftwareLlcMember2023-12-310001948368ck0001948368:AccruedExpensesAndOtherLiabilitiesMember2024-06-300001948368us-gaap:HealthcareSectorMemberck0001948368:InvestmentsAtFairValueMemberck0001948368:IndustryConcentrationRiskMember2024-01-012024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% GPS Phoenix Buyer, Inc. (dba Guidepoint) Industry IT Services Interest Rate 11.33% Reference Rate and Spread S + 6.00% Maturity 10/02/292024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMember2023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Circustrix Holdings, LLC (dba SkyZone) Industry Leisure Products Interest Rate 11.84% Reference Rate and Spread S + 6.50% Maturity 07/18/282024-06-300001948368Non-Controlled Affiliates Goldman Sachs Financial Square Government Fund2022-12-310001948368ck0001948368:AerospaceDefenseMember2023-12-310001948368ck0001948368:NcontractsLlcMemberck0001948368:FirstLienOrSeniorSecuredDebtMember2024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:AbcInvestmentHoldcoIncMember2023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:SunshineCadenceHoldcoLlcMember2023-12-310001948368Non-Controlled Affiliates2024-01-012024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% ASM Buyer, Inc. Industry Commercial Services & Supplies Reference Rate and Spread S + 6.00% Maturity 01/29/272024-06-300001948368ck0001948368:TextilesApparelLuxuryGoodsMember2023-12-310001948368srt:MinimumMemberck0001948368:PhillipStreetMiddleMarketLendingInvestmentsLlcMember2023-02-100001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Ortholite, LLC Industry Textiles, Apparel & Luxury Goods Interest Rate 11.59% Reference Rate and Spread S + 6.25% Maturity 09/29/272024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Singlewire Software, LLC Industry Software Reference Rate and Spread S + 6.00% Maturity 05/10/292024-06-300001948368ck0001948368:UnitedFlowTechnologiesIntermediateHoldcoIiLlcMemberck0001948368:FirstLienOrSeniorSecuredDebtMember2024-06-300001948368Investments in Affiliated Money Market Fund - 12.38% United States - 12.38% Goldman Sachs Financial Square Government Fund - Institutional Shares2024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Singlewire Software, LLC Industry Software Reference Rate and Spread S + 6.00% Maturity 05/10/292023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% AI Titan Parent, Inc. (dba Prometheus) Industry Software Reference Rate and Spread S + 4.75% Maturity 06/03/31 Two2024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:NcwsIntermediateIncMember2023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:VasaFitnessBuyerIncMember2024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Artifact Bidco, Inc. (dba Avetta) Industry Software Reference Rate and Spread S + 4.50% Maturity 05/22/31 One2024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% UP Acquisition Corp. (dba Unified Power) Industry Commercial Services & Supplies Interest Rate 11.38% Reference Rate and Spread S + 6.00% Maturity 10/31/292023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% ABC Investment Holdco Inc. (dba ABC Plumbing) Industry Diversified Consumer Services Reference Rate and Spread S + 6.00% Maturity 04/26/29 One2024-06-300001948368us-gaap:DebtMember2024-06-300001948368Non-Controlled Affiliates Goldman Sachs Financial Square Government Fund2023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:RecordedBooksIncMember2023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:BlastBidcoIncMember2024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Superior Environmental Solutions Industry Commercial Services & Supplies Reference Rate and Spread S + 6.50% Maturity 08/01/292023-12-310001948368ck0001948368:InvestmentsAtFairValueMemberck0001948368:WirelessTelecommunicationServicesMemberck0001948368:IndustryConcentrationRiskMember2023-01-012023-12-310001948368ck0001948368:ITServicesMember2023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Crewline Buyer, Inc. (dba New Relic) Industry Software Interest Rate 12.08% Reference Rate and Spread S + 6.75% Maturity 11/08/302024-06-300001948368ck0001948368:FirstIncentiveFeeMember2024-01-012024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Blast Bidco Inc. (dba Bazooka Candy Brands) Industry Consumer Staples Distribution & Retail Reference Rate and Spread S + 6.00% Maturity 10/05/292023-12-310001948368ck0001948368:InvestmentsAtFairValueMemberck0001948368:TextilesApparelLuxuryGoodsMemberck0001948368:IndustryConcentrationRiskMember2024-01-012024-06-300001948368Investment Equity Securities - 0.91% United States - 0.91% Common Stock - 0.91% VisionSafe Parent, LLC Industry Aerospace & Defense Initial Acquisition Date 04/19/242024-06-300001948368us-gaap:ValuationTechniqueDiscountedCashFlowMemberus-gaap:FairValueInputsLevel3Memberck0001948368:BankLoansCorporateDebtAndOtherDebtObligationsMembersrt:WeightedAverageMemberus-gaap:MeasurementInputDiscountRateMemberck0001948368:FirstLienOrLastOutUnitrancheMember2023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Last-Out Unitranche - 14.55% EIP Consolidated, LLC (dba Everest Infrastructure) Industry Wireless Telecommunication Services Interest Rate 11.59% Reference Rate and Spread S + 6.25% Maturity 12/07/28 One2024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% AQ Sunshine, Inc. (dba Relation Insurance) Industry Insurance Interest Rate 11.79% Reference Rate and Spread S + 6.25% Maturity 04/15/27 One2023-12-310001948368us-gaap:FairValueInputsLevel1Member2023-12-310001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:BlastBidcoIncMember2023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Singlewire Software, LLC Industry Software Interest Rate 11.34% Reference Rate and Spread S + 6.00% Maturity 05/10/292024-06-300001948368us-gaap:SoftwareDevelopmentMemberck0001948368:InvestmentsAtFairValueMemberck0001948368:IndustryConcentrationRiskMember2023-01-012023-12-3100019483681st Lien/Senior Secured Debt2024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Circustrix Holdings, LLC (dba SkyZone) Industry Leisure Products Reference Rate and Spread S + 6.75% Maturity 07/18/28 One2023-12-310001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Groundworks, LLC Industry Diversified Consumer Services Reference Rate and Spread S + 6.50% Maturity 03/14/302023-12-310001948368ck0001948368:TradingCompaniesAndDistributorsMember2024-06-300001948368us-gaap:RevolvingCreditFacilityMember2024-01-012024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Artifact Bidco, Inc. (dba Avetta) Industry Software Reference Rate and Spread S + 4.50% Maturity 05/22/302024-06-300001948368us-gaap:FairValueInputsLevel1Member2024-06-300001948368ck0001948368:FirstLienOrLastOutUnitrancheMemberck0001948368:ThorFinancecoLlcMember2024-06-300001948368Non-Controlled Affiliates ABC Investment Holdco Inc. (dba ABC Plumbing)2023-12-310001948368us-gaap:SoftwareDevelopmentMember2023-12-310001948368ck0001948368:CommercialServicesAndSuppliesMember2023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% United Flow Technologies Intermediate Holdco II, LLC Industry Trading Companies & Distributors Reference Rate and Spread S + 5.25% Maturity 06/23/312024-06-3000019483681 Month SOFR Member2023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Rubrik, Inc. Industry Software Interest Rate 12.48% Reference Rate and Spread S + 7.00% Maturity 08/17/28 One2024-06-300001948368ck0001948368:InvestmentsAtFairValueMemberck0001948368:ITServicesMemberck0001948368:IndustryConcentrationRiskMember2023-01-012023-12-310001948368ck0001948368:FirstLienOrLastOutUnitrancheMemberck0001948368:EIPConsolidatedLlcMember2024-06-300001948368ck0001948368:FirstLienOrSeniorSecuredDebtMemberck0001948368:CircustrixHoldingsLlcMember2023-12-310001948368us-gaap:DebtMember2023-01-012023-12-310001948368Debt Investments - 126.26%2024-06-3000019483682024-03-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Last-Out Unitranche - 14.55% EIP Consolidated, LLC (dba Everest Infrastructure) Industry Wireless Telecommunication Services Interest Rate 11.59% Reference Rate and Spread S + 6.25% Maturity 12/07/282024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% VASA Fitness Buyer, Inc. Industry Diversified Consumer Services Interest Rate 13.33% Reference Rate and Spread S + 7.88% (Incl. 0.38% PIK) Maturity 08/14/282023-12-310001948368Investment Equity Securities - 0.91%2024-06-300001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Last-Out Unitranche - 16.08% EIP Consolidated, LLC (dba Everest Infrastructure) Industry Wireless Telecommunication Services Reference Rate and Spread S + 6.25% Maturity 12/07/282023-12-310001948368us-gaap:FinancialServicesSectorMemberck0001948368:InvestmentsAtFairValueMemberck0001948368:IndustryConcentrationRiskMember2024-01-012024-06-300001948368ck0001948368:DfsHoldingCompanyIncMemberck0001948368:FirstLienOrSeniorSecuredDebtMember2023-12-310001948368ck0001948368:AccruedOrganizationCostMember2023-12-310001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% Spotless Brands, LLC Industry Diversified Consumer Services Interest Rate 12.25% Reference Rate and Spread S + 6.75% Maturity 07/25/282023-12-310001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% AQ Sunshine, Inc. (dba Relation Insurance) Industry Insurance Reference Rate and Spread S + 6.25% Maturity 04/15/27 One2023-12-310001948368us-gaap:HealthcareSectorMemberck0001948368:InvestmentsAtFairValueMemberck0001948368:IndustryConcentrationRiskMember2023-01-012023-12-310001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Highfive Dental Holdco, LLC Industry Health Care Providers & Services Reference Rate and Spread S + 6.75% Maturity 06/13/282024-06-300001948368ck0001948368:InvestmentsAtFairValueMemberck0001948368:TradingCompaniesAndDistributorsMemberck0001948368:IndustryConcentrationRiskMember2024-01-012024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Sunshine Cadence HoldCo, LLC (dba Cadence Education) Industry Diversified Consumer Services Reference Rate and Spread S + 5.00% Maturity 05/01/312024-06-300001948368Investment Debt Investments - 126.26% United States - 126.26% 1st Lien/Senior Secured Debt - 111.71% Onyx CenterSource, Inc. Industry Software Interest Rate 12.20% Reference Rate and Spread S + 6.75% Maturity 12/15/28 One2024-06-300001948368ck0001948368:FirstLienOrLastOutUnitrancheMemberck0001948368:EIPConsolidatedLlcMember2023-12-310001948368Investment Debt Investments - 103.41% United States - 103.41% 1st Lien/Senior Secured Debt - 87.33% AQ Sunshine, Inc. (dba Relation Insurance) Industry Insurance Interest Rate 11.64% Reference Rate and Spread S + 6.25% Maturity 04/15/272023-12-31xbrli:purexbrli:sharesiso4217:USDxbrli:sharesiso4217:USD

 

 

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 June 30, 2024

or

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

Commission file number: 814-01579

 

Phillip Street Middle Market Lending Fund LLC

(Exact Name of Registrant as Specified in Its Charter)

 

Delaware

92-0758632

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

 

 

200 West Street, New York, New York

10282

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (312) 655-4419

Not Applicable

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

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

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange

on which registered

None

 

None

 

None

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the 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. YesNo

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). YesNo

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

 

Large accelerated filer:

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 Act). YES ☐ NO

As of August 13, 2024, there were 14,289,535 units of the limited liability company's common units outstanding.

 


Table of Contents

PHILLIP STREET MIDDLE MARKET LENDING FUND LLC

QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2024

 

 

INDEX

PAGE

 

Cautionary Statement Regarding Forward-Looking Statements

3

PART I.

FINANCIAL INFORMATION

4

ITEM 1.

Financial Statements (Unaudited)

4

 

Consolidated Statements of Financial Condition

4

 

Consolidated Statement of Operations

5

 

Consolidated Statement of Changes in Members' Capital

6

 

Consolidated Statement of Cash Flows

7

 

Consolidated Schedules of Investments

8

 

Notes to the Consolidated Financial Statements

14

ITEM 2.

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

29

ITEM 3.

Quantitative and Qualitative Disclosures About Market Risk

40

ITEM 4.

Controls and Procedures

41

 

 

 

PART II

OTHER INFORMATION

42

ITEM 1.

Legal Proceedings

42

ITEM 1A.

Risk Factors

42

ITEM 2.

Unregistered Sales of Equity Securities and Use of Proceeds

42

ITEM 3.

Defaults Upon Senior Securities

42

ITEM 4.

Mine Safety Disclosures

42

ITEM 5

Other Information

42

ITEM 6.

Exhibits

42

 

 

 

SIGNATURES

 

44

 

 

 

 

 

2


Table of Contents

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

This report contains forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “target,” “estimate,” “intend,” “continue” or “believe” or the negatives of, or other variations on, these terms or comparable terminology. You should read statements that contain these words carefully because they discuss our plans, strategies, prospects and expectations concerning our business, operating results, financial condition and other similar matters. We believe that it is important to communicate our future expectations to our investors. Our forward-looking statements include information in this report regarding general domestic and global economic conditions, our future financing plans, our ability to operate as a business development company (“BDC”) and the expected performance of, and the yield on, our portfolio companies. There may be events in the future, however, that we are not able to predict accurately or control. The factors listed under “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2023, as well as any cautionary language in this report, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. The occurrence of the events described in these risk factors and elsewhere in this report could have a material adverse effect on our business, results of operations and financial position. Any forward-looking statement made by us in this report speaks only as of the date of this report. Factors or events that could cause our actual results to differ from our forward-looking statements may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. You are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the U.S. Securities and Exchange Commission (the “SEC”), including annual reports on Form 10-K, registration statements on Form N-2, quarterly reports on Form 10-Q and current reports on Form 8-K. The safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which preclude civil liability for certain forward-looking statements, do not apply to the forward-looking statements in this quarterly report because we are an investment company. The following factors are among those that may cause actual results to differ materially from our forward-looking statements:

our future operating results;
disruptions in the capital markets, market conditions, and general economic uncertainty;
changes in political, economic, social or industry conditions, the interest rate environment or conditions affecting the financial and capital markets, including the effect of any pandemic or epidemic;
uncertainty surrounding the financial and political stability of the United States, the United Kingdom, the European Union and China, the war between Russia and Ukraine and the escalated conflict in the Middle East;
our business prospects and the prospects of our portfolio companies;
the impact of investments that we expect to make;
the impact of increased competition;
our contractual arrangements and relationships with third parties;
the dependence of our future success on the general economy and its impact on the industries in which we invest;
the ability of our current and prospective portfolio companies to achieve their objectives;
the relative and absolute performance of Goldman Sachs Asset Management, L.P. (the “Investment Adviser”);
the use of borrowed money to finance a portion of our investments;
our ability to make distributions;
the adequacy of our cash resources and working capital;
changes in interest rates;
the timing of cash flows, if any, from the operations of our portfolio companies;
the impact of future acquisitions and divestitures;
the effect of changes in tax laws and regulations and interpretations thereof;
our ability to maintain our status as a BDC;
our ability to maintain our status under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”) as a regulated investment company (“RIC”) and our qualification for tax treatment as a RIC;
actual and potential conflicts of interest with the Investment Adviser and its affiliates;
the ability of the Investment Adviser to attract and retain highly talented professionals;
the impact on our business from new or amended legislation or regulations;
the availability of credit and/or our ability to access the equity and capital markets;
currency fluctuations, particularly to the extent that we receive payments denominated in foreign currency rather than U.S. dollars;
the impact of elevated inflation and interest rates and the risk of recession on our portfolio companies;
the impact of uncertainties relating to the 2024 U.S. presidential election;
the effect of global climate change on our portfolio companies;
the impact of interruptions in the supply chain on our portfolio companies;
the impact of information technology system failures, data security breaches, data privacy compliance, network disruptions, and cybersecurity attacks; and
the increased public scrutiny of and regulation related to corporate social responsibility.

 

3


Table of Contents

 

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Phillip Street Middle Market Lending Fund LLC

Consolidated Statements of Financial Condition

(in thousands, except unit and per unit amounts)

 

 

June 30,

 

 

December 31,

 

 

 

2024 (Unaudited)

 

 

2023

 

Assets

 

 

 

 

 

 

Investments, at fair value

 

 

 

 

 

 

Non-controlled/non-affiliated investments (cost of $301,561 and $176,995)

 

$

303,042

 

 

$

177,418

 

Non-controlled affiliated investments (cost of $9,555 and $0)

 

 

9,548

 

 

 

 

Total investments, at fair value (cost of $311,116 and $176,995)

 

$

312,590

 

 

$

177,418

 

Investments in affiliated money market fund (cost of $30,420 and $9,542)

 

 

30,420

 

 

 

9,542

 

Cash

 

 

14,737

 

 

 

5,789

 

Interest and dividends receivable

 

 

2,059

 

 

 

1,092

 

Deferred financing costs

 

 

3,078

 

 

 

2,963

 

Other assets

 

 

178

 

 

 

23

 

Total assets

 

$

363,062

 

 

$

196,827

 

Liabilities

 

 

 

 

 

 

Debt

 

$

113,600

 

 

$

18,000

 

Interest and other debt expenses payable

 

 

2,151

 

 

 

886

 

Management fees payable

 

 

690

 

 

 

491

 

Professional fees payable

 

 

150

 

 

 

233

 

Incentive fees payable

 

 

228

 

 

 

206

 

Distribution payable

 

 

 

 

 

5,162

 

Accrued deferred offering costs

 

 

58

 

 

 

58

 

Accrued expenses and other liabilities

 

 

397

 

 

 

221

 

Total liabilities

 

$

117,274

 

 

$

25,257

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

Members' capital

 

 

 

 

 

 

Preferred units (no units issued and outstanding)

 

$

 

 

$

 

Common units (12,214,181 and 8,749,026 units issued and outstanding as of June 30, 2024 and December 31, 2023)

 

 

240,090

 

 

 

171,117

 

Distributable earnings (loss)

 

 

5,698

 

 

 

453

 

Total members' capital

 

$

245,788

 

 

$

171,570

 

Total liabilities and members' capital

 

$

363,062

 

 

$

196,827

 

Net asset value per unit

 

$

20.12

 

 

$

19.61

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

4


Table of Contents

 

Phillip Street Middle Market Lending Fund LLC

Consolidated Statement of Operations

(in thousands, except unit and per unit amounts)

(Unaudited)

 

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

 

June 30, 2024

 

 

June 30, 2023

 

Investment income:

 

 

 

 

 

 

 

 

 

 

 

 

From non-controlled/non-affiliated investments:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

7,614

 

 

$

989

 

 

$

13,655

 

 

$

1,653

 

Other income

 

 

129

 

 

 

11

 

 

 

252

 

 

 

17

 

From non-controlled affiliated investments:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

162

 

 

 

 

 

 

162

 

 

 

 

Dividend income

 

 

169

 

 

 

684

 

 

 

263

 

 

 

1,471

 

Other income

 

 

4

 

 

 

 

 

 

4

 

 

 

 

Total investment income

 

$

8,078

 

 

$

1,684

 

 

$

14,336

 

 

$

3,141

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other debt expenses

 

$

2,382

 

 

$

676

 

 

$

3,792

 

 

$

948

 

Incentive fees

 

 

228

 

 

 

 

 

 

488

 

 

 

 

Management fees

 

 

690

 

 

 

294

 

 

 

1,262

 

 

 

580

 

Directors’ fees

 

 

34

 

 

 

38

 

 

 

66

 

 

 

66

 

Professional fees

 

 

171

 

 

 

254

 

 

 

284

 

 

 

406

 

Offering costs

 

 

 

 

 

312

 

 

 

 

 

 

663

 

Other general and administrative expenses

 

 

216

 

 

 

174

 

 

 

407

 

 

 

322

 

Total expenses

 

$

3,721

 

 

$

1,748

 

 

$

6,299

 

 

$

2,985

 

Management fee waiver

 

 

 

 

 

 

 

 

 

 

 

(286

)

Net expenses

 

$

3,721

 

 

$

1,748

 

 

$

6,299

 

 

$

2,699

 

Net investment income (loss)

 

$

4,357

 

 

$

(64

)

 

$

8,037

 

 

$

442

 

Net realized and unrealized gains (losses):

 

 

 

 

 

 

 

 

 

 

 

 

Net realized gain (loss) from:

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled/non-affiliated investments

 

$

(1

)

 

$

 

 

$

(1

)

 

$

 

Non-controlled affiliated investments

 

 

 

 

 

 

 

 

 

 

 

 

Net change in unrealized appreciation (depreciation) from:

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled/non-affiliated investments

 

 

104

 

 

 

(88

)

 

 

1,058

 

 

 

(60

)

Non-controlled affiliated investments

 

 

(7

)

 

 

 

 

 

(7

)

 

 

 

Net realized and unrealized gains (losses)

 

$

96

 

 

$

(88

)

 

$

1,050

 

 

$

(60

)

Net increase (decrease) in members' capital from operations

 

$

4,453

 

 

$

(152

)

 

$

9,087

 

 

$

382

 

Weighted average units outstanding

 

 

9,905,503

 

 

 

4,955,147

 

 

 

9,417,884

 

 

 

4,955,147

 

Basic and diluted net investment income (loss) per unit

 

$

0.44

 

 

$

(0.01

)

 

$

0.85

 

 

$

0.09

 

Basic and diluted earnings (loss) per unit

 

$

0.45

 

 

$

(0.03

)

 

$

0.96

 

 

$

0.08

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 

5


Table of Contents

Phillip Street Middle Market Lending Fund LLC

Consolidated Statement of Changes in Members' Capital

(in thousands, except per unit amounts)

(Unaudited)

 

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

 

June 30, 2024

 

 

June 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Members' capital at beginning of period

 

$

181,338

 

 

$

97,194

 

 

$

171,570

 

 

$

96,660

 

Net increase (decrease) in member's capital from operations:

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income (loss)

 

$

4,357

 

 

$

(64

)

 

$

8,037

 

 

$

442

 

Net realized gain (loss)

 

 

(1

)

 

 

 

 

 

(1

)

 

 

 

Net change in unrealized appreciation (depreciation)

 

 

97

 

 

 

(88

)

 

 

1,051

 

 

 

(60

)

Net increase (decrease) in members' capital from operations

 

$

4,453

 

 

$

(152

)

 

$

9,087

 

 

$

382

 

Distributions to members from:

 

 

 

 

 

 

 

 

 

 

 

 

Distributable earnings

 

$

(3,842

)

 

$

 

 

$

(3,842

)

 

$

 

Total distributions to members

 

$

(3,842

)

 

$

 

 

$

(3,842

)

 

$

 

Capital transactions:

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common units

 

$

60,000

 

 

$

 

 

$

60,000

 

 

$

 

Reinvestment of common unit distributions

 

 

3,839

 

 

 

 

 

 

8,973

 

 

 

 

Net increase in members' capital from capital transactions

 

$

63,839

 

 

$

 

 

$

68,973

 

 

$

 

Total increase (decrease) in members' capital

 

$

64,450

 

 

$

(152

)

 

$

74,218

 

 

$

382

 

Members' capital at end of period

 

$

245,788

 

 

$

97,042

 

 

$

245,788

 

 

$

97,042

 

Distributions recorded per unit

 

$

0.43

 

 

$

 

 

$

0.43

 

 

$

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 


 

 

 

6


Table of Contents

Phillip Street Middle Market Lending Fund LLC

Consolidated Statement of Cash Flows

(in thousands, except unit and per unit amounts)

(Unaudited)

 

 

For the Six Months Ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

Net increase (decrease) in members' capital from operations:

 

$

9,087

 

 

$

382

 

Adjustments to reconcile net increase (decrease) in members’ capital from operations to net cash provided by (used for) operating activities:

 

 

 

 

 

 

Purchases of investments

 

 

(138,605

)

 

 

(24,783

)

Payment-in-kind interest capitalized

 

 

(60

)

 

 

 

Investments in affiliated money market fund, net

 

 

(20,878

)

 

 

30,658

 

Proceeds from sales of investments and principal repayments

 

 

5,008

 

 

 

123

 

Net realized (gain) loss on investments

 

 

1

 

 

 

 

Net change in unrealized (appreciation) depreciation on investments

 

 

(1,051

)

 

 

60

 

Amortization of premium and accretion of discount, net

 

 

(465

)

 

 

(71

)

Amortization of deferred financing costs

 

 

521

 

 

 

278

 

Amortization of deferred offering costs

 

 

 

 

 

663

 

Change in operating assets and liabilities:

 

 

 

 

 

 

(Increase) decrease in interest and dividends receivable

 

 

(967

)

 

 

69

 

(Increase) decrease in other assets

 

 

(155

)

 

 

(76

)

Increase (decrease) in interest and other debt expenses payable

 

 

1,265

 

 

 

500

 

Increase (decrease) in professional fees payable

 

 

(83

)

 

 

60

 

Increase (decrease) in management fees payable

 

 

199

 

 

 

197

 

Increase (decrease) in accrued organization costs

 

 

 

 

 

(209

)

Increase (decrease) in incentive fees payable

 

 

22

 

 

 

 

Increase (decrease) in accrued expenses and other liabilities

 

 

176

 

 

 

(2

)

Net cash provided by (used for) operating activities

 

$

(145,985

)

 

$

7,849

 

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from issuance of common units

 

$

60,000

 

 

$

 

Offering costs paid

 

 

 

 

 

(801

)

Distributions paid

 

 

(31

)

 

 

 

Financing costs paid

 

 

(636

)

 

 

(3,570

)

Borrowings on debt

 

 

95,600

 

 

 

 

Net cash provided by (used for) financing activities

 

$

154,933

 

 

$

(4,371

)

Net increase (decrease) in cash

 

$

8,948

 

 

 

3,478

 

Cash, beginning of period

 

 

5,789

 

 

 

104

 

Cash, end of period

 

$

14,737

 

 

$

3,582

 

Supplemental and non-cash activities

 

 

 

 

 

 

Interest expense paid

 

$

885

 

 

$

 

Reinvestment of common unit distributions

 

$

8,973

 

 

$

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 


 

 

 

 

7


Table of Contents

Phillip Street Middle Market Lending Fund LLC

Consolidated Schedule of Investments as of June 30, 2024

(in thousands, except unit and per unit amounts)

(Unaudited)

 

Investment (1)

Industry (2)

Interest
Rate (3)

Reference Rate and
Spread (3)

Maturity

 

Par/Shares
(4)

 

Cost

 

Fair
Value

 

Footnotes

Debt Investments - 126.26%

 

 

 

 

 

 

 

 

 

 

 

 

United States - 126.26%

 

 

 

 

 

 

 

 

 

 

 

 

1st Lien/Senior Secured Debt - 111.71%

 

 

 

 

 

 

 

 

 

 

 

 

VisionSafe Holdings, Inc.

Aerospace & Defense

11.33%

S + 6.00%

04/19/30

$

 

3,818

 

$

3,743

 

$

3,741

 

 (5) (6)

VisionSafe Holdings, Inc.

Aerospace & Defense

S + 6.00%

04/19/30

 

 

509

 

 

(10

)

 

(10

)

 (5) (7)

Formulations Parent Corporation (dba Chase Corp)

Chemicals

11.07%

S + 5.75%

11/15/30

 

 

5,000

 

 

4,906

 

 

4,900

 

 (5) (8)

Formulations Parent Corporation (dba Chase Corp)

Chemicals

S + 5.75%

11/15/29

 

 

835

 

 

(15

)

 

(17

)

 (5) (7) (8)

ASM Buyer, Inc.

Commercial Services & Supplies

S + 6.00%

01/29/28

 

 

4,189

 

 

 

 

 

 (5) (6) (7)

ASM Buyer, Inc.

Commercial Services & Supplies

S + 6.00%

01/29/28

 

 

541

 

 

 

 

 

 (5) (7)

ASM Buyer, Inc.

Commercial Services & Supplies

S + 6.00%

01/29/28

 

 

270

 

 

 

 

 

 (5) (7)

Superior Environmental Solutions

Commercial Services & Supplies

11.94%

S + 6.50%

08/01/29

 

 

5,490

 

 

5,368

 

 

5,435

 

 (5) (6) (8)

Superior Environmental Solutions

Commercial Services & Supplies

S + 6.50%

08/01/29

 

 

1,659

 

 

(20

)

 

(17

)

 (5) (7) (8)

Superior Environmental Solutions

Commercial Services & Supplies

11.94%

S + 6.50%

08/01/29

 

 

830

 

 

258

 

 

268

 

 (5) (7) (8)

Superior Environmental Solutions

Commercial Services & Supplies

11.94%

S + 6.50%

08/01/29

 

 

828

 

 

808

 

 

819

 

 (5) (8)

Superior Environmental Solutions

Commercial Services & Supplies

11.94%

S + 6.50%

08/01/29

 

 

276

 

 

269

 

 

273

 

 (5) (6) (8)

UP Acquisition Corp. (dba Unified Power)

Commercial Services & Supplies

11.33%

S + 6.00%

10/31/29

 

 

5,055

 

 

4,951

 

 

4,980

 

 (5) (6) (8)

UP Acquisition Corp. (dba Unified Power)

Commercial Services & Supplies

S + 6.00%

10/31/29

 

 

794

 

 

(16

)

 

(12

)

 (5) (7) (8)

USA DeBusk, LLC

Commercial Services & Supplies

10.58%

S + 5.25%

04/30/31

 

 

2,972

 

 

2,929

 

 

2,928

 

 (5) (6)

USA DeBusk, LLC

Commercial Services & Supplies

S + 5.25%

04/30/31

 

 

1,093

 

 

(8

)

 

(16

)

 (5) (7)

USA DeBusk, LLC

Commercial Services & Supplies

10.58%

S + 5.25%

04/30/30

 

 

410

 

 

75

 

 

75

 

 (5) (7)

Valet Waste Holdings, Inc. (dba Valet Living)

Commercial Services & Supplies

11.19%

S + 5.75%

05/01/29

 

 

12,579

 

 

12,495

 

 

12,494

 

 (5) (6)

Valet Waste Holdings, Inc. (dba Valet Living)

Commercial Services & Supplies

11.19%

S + 5.75%

05/01/29

 

 

1,321

 

 

563

 

 

563

 

 (5) (7)

Valet Waste Holdings, Inc. (dba Valet Living)

Commercial Services & Supplies

S + 5.75%

05/01/29

 

 

1,100

 

 

(7

)

 

(15

)

 (5) (7)

Blast Bidco Inc. (dba Bazooka Candy Brands)

Consumer Staples Distribution & Retail

11.33%

S + 6.00%

10/04/30

 

 

4,466

 

 

4,363

 

 

4,422

 

 (5) (6) (8)

Blast Bidco Inc. (dba Bazooka Candy Brands)

Consumer Staples Distribution & Retail

S + 6.00%

10/05/29

 

 

522

 

 

(12

)

 

(5

)

 (5) (7) (8)

DFS Holding Company, Inc.

Distributors

12.44%

S + 7.00%

01/31/29

 

 

4,727

 

 

4,611

 

 

4,656

 

 (5) (6) (8)

DFS Holding Company, Inc.

Distributors

12.44%

S + 7.00%

01/31/29

 

 

995

 

 

330

 

 

332

 

 (5) (7) (8)

ABC Investment Holdco Inc. (dba ABC Plumbing)

Diversified Consumer Services

11.33%

S + 6.00%

04/26/29

 

 

7,797

 

 

7,646

 

 

7,641

 

 (5) (6) (9)

ABC Investment Holdco Inc. (dba ABC Plumbing)

Diversified Consumer Services

S + 6.00%

04/26/29

 

 

3,610

 

 

(70

)

 

(72

)

 (5) (7) (9)

ABC Investment Holdco Inc. (dba ABC Plumbing)

Diversified Consumer Services

S + 6.00%

04/26/29

 

 

722

 

 

(14

)

 

(14

)

 (5) (7) (9)

CI (Quercus) Intermediate Holdings, LLC (dba SavATree)

Diversified Consumer Services

10.35%

S + 5.00%

06/06/31

 

 

5,803

 

 

5,774

 

 

5,774

 

 (5) (6)

CI (Quercus) Intermediate Holdings, LLC (dba SavATree)

Diversified Consumer Services

S + 5.00%

06/06/31

 

 

3,329

 

 

(25

)

 

(25

)

 (5) (7)

CI (Quercus) Intermediate Holdings, LLC (dba SavATree)

Diversified Consumer Services

12.50%

P + 5.00%

06/06/31

 

 

832

 

 

196

 

 

196

 

 (5) (7)

Spotless Brands, LLC

Diversified Consumer Services

12.25%

S + 6.75%

07/25/28

 

 

8,537

 

 

8,339

 

 

8,473

 

 (5) (6) (8)

Spotless Brands, LLC

Diversified Consumer Services

12.23%

S + 6.75%

07/25/28

 

 

1,323

 

 

1,291

 

 

1,313

 

 (5) (8)

Sunshine Cadence HoldCo, LLC (dba Cadence Education)

Diversified Consumer Services

10.33%

S + 5.00%

05/01/31

 

 

10,615

 

 

10,511

 

 

10,509

 

 (5) (6)

Sunshine Cadence HoldCo, LLC (dba Cadence Education)

Diversified Consumer Services

S + 5.00%

05/01/31

 

 

2,769

 

 

 

 

 

 (5) (7)

Sunshine Cadence HoldCo, LLC (dba Cadence Education)

Diversified Consumer Services

S + 5.00%

05/01/30

 

 

1,615

 

 

(16

)

 

(16

)

 (5) (7)

VASA Fitness Buyer, Inc.

Diversified Consumer Services

12.94%

S + 7.50%

08/14/28

 

 

8,372

 

 

8,118

 

 

8,330

 

 (5) (6) (8)

VASA Fitness Buyer, Inc.

Diversified Consumer Services

12.94%

S + 7.50%

08/14/28

 

 

1,445

 

 

452

 

 

474

 

 (5) (7) (8)

VASA Fitness Buyer, Inc.

Diversified Consumer Services

S + 7.50%

08/14/28

 

 

241

 

 

(7

)

 

(1

)

 (5) (7) (8)

Admiral Buyer, Inc. (dba Fidelity Payment Services)

Financial Services

10.83%

S + 5.50%

05/08/28

 

 

8,929

 

 

8,864

 

 

8,862

 

 (5) (6) (8)

Admiral Buyer, Inc. (dba Fidelity Payment Services)

Financial Services

S + 5.50%

05/08/28

 

 

1,171

 

 

(8

)

 

(9

)

 (5) (7) (8)

Admiral Buyer, Inc. (dba Fidelity Payment Services)

Financial Services

10.84%

S + 5.50%

05/08/28

 

 

389

 

 

383

 

 

387

 

 (5) (8)

Fullsteam Operations LLC

Financial Services

13.74%

S + 8.25%

11/27/29

 

 

9,202

 

 

8,904

 

 

9,110

 

 (5) (6) (8)

Fullsteam Operations LLC

Financial Services

S + 8.25%

11/27/29

 

 

6,720

 

 

(47

)

 

(67

)

 (5) (7) (8)

Fullsteam Operations LLC

Financial Services

13.74%

S + 8.25%

11/27/29

 

 

2,896

 

 

2,112

 

 

2,154

 

 (5) (7) (8)

Fullsteam Operations LLC

Financial Services

S + 8.25%

11/27/29

 

 

1,680

 

 

(12

)

 

(17

)

 (5) (7) (8)

Fullsteam Operations LLC

Financial Services

13.74%

S + 8.25%

11/27/29

 

 

1,287

 

 

729

 

 

745

 

 (5) (7) (8)

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 

8


Table of Contents

Phillip Street Middle Market Lending Fund LLC

Consolidated Schedule of Investments as of June 30, 2024 (continued)

(in thousands, except unit and per unit amounts)

(Unaudited)

 

Investment (1)

Industry (2)

Interest
Rate (3)

Reference Rate and
Spread (3)

Maturity

 

Par/Shares
(4)

 

Cost

 

Fair
Value

 

Footnotes

Fullsteam Operations LLC

Financial Services

S + 8.25%

11/27/29

$

 

515

 

$

(16

)

$

(5

)

 (5) (7) (8)

Priority Technology Holdings, Inc. (dba Priority Payment)

Financial Services

10.08%

S + 4.75%

05/16/31

 

 

15,000

 

 

14,926

 

 

14,925

 

 (5) (6) (10)

Project Accelerate Parent, LLC (dba ABC Fitness)

Financial Services

10.54%

S + 5.25%

02/24/31

 

 

4,375

 

 

4,333

 

 

4,331

 

 (5) (6) (8)

Project Accelerate Parent, LLC (dba ABC Fitness)

Financial Services

S + 5.25%

02/24/31

 

 

625

 

 

(6

)

 

(6

)

 (5) (7) (8)

Highfive Dental Holdco, LLC

Health Care Providers & Services

12.19%

S + 6.75%

06/13/28

 

 

4,741

 

 

4,622

 

 

4,622

 

 (5) (6) (8)

Highfive Dental Holdco, LLC

Health Care Providers & Services

S + 6.75%

06/13/28

 

 

3,192

 

 

(76

)

 

(80

)

 (5) (7) (8)

Highfive Dental Holdco, LLC

Health Care Providers & Services

S + 6.75%

06/13/28

 

 

532

 

 

(13

)

 

(13

)

 (5) (7) (8)

TM Restaurant Group LLC

Hotels, Restaurants & Leisure

12.71%

S + 7.25%

07/26/28

 

 

10,634

 

 

10,395

 

 

10,315

 

 (5) (6) (8)

TM Restaurant Group LLC

Hotels, Restaurants & Leisure

S + 7.25%

07/26/28

 

 

3,000

 

 

(37

)

 

(90

)

 (5) (7) (8)

TM Restaurant Group LLC

Hotels, Restaurants & Leisure

S + 7.25%

07/26/28

 

 

1,286

 

 

(19

)

 

(39

)

 (5) (7) (8)

AQ Sunshine, Inc. (dba Relation Insurance)

Insurance

11.73%

S + 6.25%

04/15/27

 

 

5,403

 

 

5,356

 

 

5,389

 

 (5) (6) (8)

AQ Sunshine, Inc. (dba Relation Insurance)

Insurance

11.74%

S + 6.25%

04/15/27

 

 

2,955

 

 

719

 

 

736

 

 (5) (7) (8)

AQ Sunshine, Inc. (dba Relation Insurance)

Insurance

11.73%

S + 6.25%

04/15/27

 

 

2,934

 

 

2,909

 

 

2,927

 

 (5) (6) (8)

AQ Sunshine, Inc. (dba Relation Insurance)

Insurance

11.73%

S + 6.25%

04/15/27

 

 

2,110

 

 

2,092

 

 

2,105

 

 (5) (6) (8)

AQ Sunshine, Inc. (dba Relation Insurance)

Insurance

11.73%

S + 6.25%

04/15/27

 

 

552

 

 

548

 

 

551

 

 (5) (6) (8)

AQ Sunshine, Inc. (dba Relation Insurance)

Insurance

11.73%

S + 6.25%

04/15/27

 

 

530

 

 

526

 

 

529

 

 (5) (6) (8)

AQ Sunshine, Inc. (dba Relation Insurance)

Insurance

S + 6.25%

04/15/27

 

 

427

 

 

(5

)

 

(1

)

 (5) (7) (8)

GPS Phoenix Buyer, Inc. (dba Guidepoint)

IT Services

11.33%

S + 6.00%

10/02/29

 

 

6,274

 

 

6,160

 

 

6,180

 

 (5) (6) (8)

GPS Phoenix Buyer, Inc. (dba Guidepoint)

IT Services

S + 6.00%

10/02/29

 

 

1,631

 

 

(14

)

 

(24

)

 (5) (7) (8)

GPS Phoenix Buyer, Inc. (dba Guidepoint)

IT Services

S + 6.00%

10/02/29

 

 

1,305

 

 

(23

)

 

(20

)

 (5) (7) (8)

Circustrix Holdings, LLC (dba SkyZone)

Leisure Products

11.84%

S + 6.50%

07/18/28

 

 

6,481

 

 

6,334

 

 

6,416

 

 (5) (6) (8)

Circustrix Holdings, LLC (dba SkyZone)

Leisure Products

11.83%

S + 6.50%

07/18/28

 

 

837

 

 

653

 

 

661

 

 (5) (7) (8)

Circustrix Holdings, LLC (dba SkyZone)

Leisure Products

S + 6.50%

07/18/28

 

 

419

 

 

(8

)

 

(4

)

 (5) (7) (8)

Recorded Books Inc. (dba RBMedia)

Media

11.60%

S + 6.25%

09/03/30

 

 

5,786

 

 

5,640

 

 

5,728

 

 (5) (6) (8)

Recorded Books Inc. (dba RBMedia)

Media

S + 5.75%

08/31/30

 

 

679

 

 

 

 

7

 

 (5) (6) (7) (8)

Recorded Books Inc. (dba RBMedia)

Media

S + 6.25%

08/31/28

 

 

471

 

 

(11

)

 

(5

)

 (5) (7) (8)

AI Titan Parent, Inc. (dba Prometheus)

Software

S + 4.75%

06/03/31

 

 

5,872

 

 

 

 

 

 (5) (6) (7)

AI Titan Parent, Inc. (dba Prometheus)

Software

S + 4.75%

06/03/31

 

 

1,174

 

 

 

 

 

 (5) (7)

AI Titan Parent, Inc. (dba Prometheus)

Software

S + 4.75%

06/03/31

 

 

734

 

 

 

 

 

 (5) (7)

Arrow Buyer, Inc. (dba Archer Technologies)

Software

11.08%

S + 5.75%

07/01/30

 

 

2,927

 

 

2,861

 

 

2,912

 

 (5) (6) (8)

Arrow Buyer, Inc. (dba Archer Technologies)

Software

S + 5.75%

07/01/30

 

 

487

 

 

(8

)

 

(2

)

 (5) (7) (8)

Arrow Buyer, Inc. (dba Archer Technologies)

Software

11.08%

S + 5.75%

07/01/30

 

 

192

 

 

190

 

 

191

 

 (5) (8)

Artifact Bidco, Inc. (dba Avetta)

Software

S + 4.50%

07/28/31

 

 

10,567

 

 

 

 

 

 (5) (6) (7)

Artifact Bidco, Inc. (dba Avetta)

Software

S + 4.50%

07/28/31

 

 

2,586

 

 

 

 

 

 (5) (7)

Artifact Bidco, Inc. (dba Avetta)

Software

S + 4.50%

07/26/30

 

 

1,256

 

 

 

 

 

 (5) (7)

Artifact Bidco, Inc. (dba Avetta)

Software

S + 4.50%

07/26/30

 

 

591

 

 

 

 

 

 (5) (7)

Crewline Buyer, Inc. (dba New Relic)

Software

12.08%

S + 6.75%

11/08/30

 

 

6,963

 

 

6,800

 

 

6,789

 

 (5) (6) (8)

Crewline Buyer, Inc. (dba New Relic)

Software

S + 6.75%

11/08/30

 

 

725

 

 

(17

)

 

(18

)

 (5) (7) (8)

Ncontracts, LLC

Software

11.77%

S + 6.50%

12/11/29

 

 

10,689

 

 

10,436

 

 

10,582

 

 (5) (6) (8)

Ncontracts, LLC

Software

11.83%

S + 6.50%

12/11/29

 

 

987

 

 

307

 

 

319

 

 (5) (7) (8)

Ncontracts, LLC

Software

S + 6.50%

12/11/29

 

 

987

 

 

(11

)

 

(10

)

 (5) (7) (8)

Onyx CenterSource, Inc.

Software

12.20%

S + 6.75%

12/15/28

 

 

6,179

 

 

6,051

 

 

6,117

 

 (5) (6) (8)

Onyx CenterSource, Inc.

Software

12.20%

S + 6.75%

12/15/28

 

 

466

 

 

146

 

 

151

 

 (5) (7) (8)

Rubrik, Inc.

Software

12.48%

S + 7.00%

08/17/28

 

 

8,774

 

 

8,698

 

 

8,774

 

 (5) (6) (8)

Rubrik, Inc.

Software

12.48%

S + 7.00%

08/17/28

 

 

1,226

 

 

694

 

 

704

 

 (5) (7) (8)

Singlewire Software, LLC

Software

11.34%

S + 6.00%

05/10/29

 

 

8,533

 

 

8,315

 

 

8,448

 

 (5) (6) (8)

Singlewire Software, LLC

Software

S + 6.00%

05/10/29

 

 

1,438

 

 

(35

)

 

(14

)

 (5) (7) (8)

Charger Debt Merger Sub, LLC (dba Classic Collision)

Specialty Retail

10.34%

S + 5.00%

06/02/31

 

 

8,967

 

 

8,878

 

 

8,878

 

 (5) (6)

Charger Debt Merger Sub, LLC (dba Classic Collision)

Specialty Retail

10.34%

S + 5.00%

06/02/31

 

 

4,891

 

 

104

 

 

104

 

 (5) (7)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

9


Table of Contents

Phillip Street Middle Market Lending Fund LLC

Consolidated Schedule of Investments as of June 30, 2024 (continued)

(in thousands, except unit and per unit amounts)

(Unaudited)

 

Investment (1)

Industry (2)

Interest
Rate (3)

Reference Rate and
Spread (3)

Maturity

Par/Shares
(4)

 

Cost

 

Fair
Value

 

Footnotes

Charger Debt Merger Sub, LLC (dba Classic Collision)

Specialty Retail

S + 5.00%

05/31/30

$

1,141

 

$

(11

)

$

(11

)

 (5) (7)

Ortholite, LLC

Textiles, Apparel & Luxury Goods

11.59%

S + 6.25%

09/29/27

 

2,861

 

 

2,837

 

 

2,832

 

 (5) (6) (8)

Harrington Industrial Plastics, LLC

Trading Companies & Distributors

11.09%

S + 5.75%

10/07/30

 

3,273

 

 

3,197

 

 

3,224

 

 (5) (6) (8)

Harrington Industrial Plastics, LLC

Trading Companies & Distributors

11.09%

S + 5.75%

10/07/30

 

2,583

 

 

834

 

 

835

 

 (5) (7) (8)

NCWS Intermediate, Inc. (dba National Carwash Solutions)

Trading Companies & Distributors

10.58%

S + 5.25%

12/31/29

 

12,610

 

 

12,423

 

 

12,420

 

 (5) (6)

NCWS Intermediate, Inc. (dba National Carwash Solutions)

Trading Companies & Distributors

S + 5.25%

12/31/29

 

1,494

 

 

(22

)

 

(22

)

 (5) (7)

NCWS Intermediate, Inc. (dba National Carwash Solutions)

Trading Companies & Distributors

S + 5.25%

12/31/29

 

896

 

 

(7

)

 

(13

)

 (5) (7)

PT Intermediate Holdings III, LLC (dba Parts Town)

Trading Companies & Distributors

10.35%

S + 5.00% (Incl. 1.75% PIK)

04/09/30

 

13,623

 

 

13,599

 

 

13,555

 

 (5) (6)

PT Intermediate Holdings III, LLC (dba Parts Town)

Trading Companies & Distributors

S + 4.75%

04/09/30

 

1,096

 

 

(1

)

 

(5

)

 (5) (7)

United Flow Technologies Intermediate Holdco II, LLC

Trading Companies & Distributors

10.60%

S + 5.25%

06/23/31

 

13,380

 

 

13,180

 

 

13,179

 

 (5) (6)

United Flow Technologies Intermediate Holdco II, LLC

Trading Companies & Distributors

S + 5.25%

06/23/31

 

7,433

 

 

(56

)

 

(56

)

 (5) (7)

United Flow Technologies Intermediate Holdco II, LLC

Trading Companies & Distributors

10.60%

S + 5.25%

06/21/30

 

1,487

 

 

37

 

 

37

 

 (5) (7)

Total 1st Lien/Senior Secured Debt

 

 

 

 

 

 

273,105

 

 

274,576

 

 

1st Lien/Last-Out Unitranche (9) - 14.55%

 

 

 

 

 

 

 

 

 

 

EIP Consolidated, LLC (dba Everest Infrastructure)

Wireless Telecommunication Services

11.59%

S + 6.25%

12/07/28

 

6,255

 

$

6,198

 

$

6,193

 

 (5) (6) (8)

EIP Consolidated, LLC (dba Everest Infrastructure)

Wireless Telecommunication Services

11.59%

S + 6.25%

12/07/28

 

3,745

 

 

1,395

 

 

1,391

 

 (5) (7) (8)

K2 Towers III, LLC

Wireless Telecommunication Services

11.89%

S + 6.55%

12/06/28

 

10,000

 

 

8,592

 

 

8,583

 

 (5) (7) (8)

Skyway Towers Intermediate LLC

Wireless Telecommunication Services

11.95%

S + 6.61%

12/22/28

 

3,682

 

 

3,647

 

 

3,645

 

 (5) (6) (8)

Skyway Towers Intermediate LLC

Wireless Telecommunication Services

11.95%

S + 6.61%

12/22/28

 

2,305

 

 

248

 

 

246

 

 (5) (7) (8)

Tarpon Towers II LLC

Wireless Telecommunication Services

12.16%

S + 6.83%

02/01/29

 

3,143

 

 

3,113

 

 

3,111

 

 (5) (6) (8)

Tarpon Towers II LLC

Wireless Telecommunication Services

12.17%

S + 6.83%

02/01/29

 

1,858

 

 

147

 

 

145

 

 (5) (7) (8)

Thor FinanceCo LLC (dba Harmoni Towers)

Wireless Telecommunication Services

12.25%

S + 7.00%

08/24/28

 

6,222

 

 

6,151

 

 

6,160

 

 (5) (6) (8)

Thor FinanceCo LLC (dba Harmoni Towers)

Wireless Telecommunication Services

12.39%

S + 7.00%

08/24/28

 

3,778

 

 

403

 

 

407

 

 (5) (7) (8)

Towerco IV Holdings, LLC

Wireless Telecommunication Services

9.44%

S + 4.00%

08/31/28

 

7,666

 

 

5,869

 

 

5,885

 

 (5) (6) (7) (8)

Total 1st Lien/Last-Out Unitranche

 

 

 

 

 

 

 

35,763

 

 

35,766

 

 

Total United States

 

 

 

 

 

 

$

308,868

 

$

310,342

 

 

Total Debt Investment

 

 

 

 

 

 

$

308,868

 

$

310,342

 

 

 

 

10


Table of Contents

Phillip Street Middle Market Lending Fund LLC

Consolidated Schedule of Investments as of June 30, 2024 (continued)

(in thousands, except unit and per unit amounts)

(Unaudited)

 Investment #

Industry

Initial
Acquisition
Date

Shares

 

Cost

 

Fair
Value

 

Footnotes

Equity Securities - 0.91%

 

 

 

 

 

 

 

 

 

United States - 0.91%

 

 

 

 

 

 

 

 

 

Common Stock - 0.91%

 

 

 

 

 

 

 

 

 

VisionSafe Parent, LLC

Aerospace & Defense

04/19/24

 

255

 

$

255

 

$

255

 

 (5) (12)

RPC ABC Investment Holdings LLC (dba ABC Plumbing)

Diversified Consumer Services

04/26/24

 

1,992,620

 

 

1,993

 

 

1,993

 

 (5) (9) (12)

Total Common Stock

 

 

 

 

 

2,248

 

 

2,248

 

 

Total United States

 

 

 

 

$

2,248

 

$

2,248

 

 

Total Equity Securities

 

 

 

 

$

2,248

 

$

2,248

 

 

Total Investments - 127.18%

 

 

 

 

 

311,116

 

 

312,590

 

 

Investments in Affiliated Money Market Fund - 12.38%

 

 

 

 

 

 

 

 

 

United States - 12.38%

 

 

 

 

 

 

 

 

 

Goldman Sachs Financial Square Government Fund - Institutional Shares

 

 

 

30,420,404

 

$

30,420

 

$

30,420

 

 (6) (14) (15)

Total Investments in Affiliated Money Market Fund

 

 

 

 

 

30,420

 

 

30,420

 

 

Total United States

 

 

 

 

$

30,420

 

$

30,420

 

 

Total Investments and Investments in Affiliated Money Market Fund - 139.56%

 

 

 

 

$

341,536

 

$

343,010

 

 

 

(1)

Percentages are based on members' capital.

 

(2)

For Industry subtotal and percentage, see Note 4 "Investments."

 

 

(3)

Represents the actual interest rate for partially or fully funded debt in effect as of the reporting date. Certain investments are subject to an interest rate floor. Variable rate loans bear interest at a rate that may be determined by the larger of the floor or the reference to either SOFR including SOFR adjustment, if any, ("S"), or alternate base rate (commonly based on the U.S. Prime Rate ("P"), unless otherwise noted) at the borrower's option, which reset periodically based on the terms of the credit agreement. S loans are typically indexed to 12 month, 6 month, 3 month or 1 month S rates. As of June 30, 2024, the rate for the 1 month S was 5.34% and 3 month S was 5.32%. For investments with multiple reference rates or alternate base rates, the interest rate shown is the weighted average interest rate in effect at June 30, 2024.

 

(4)

Par amount is presented for debt investments, while the number of shares or units owned is presented for equity investments. Par amount is denominated in U.S. Dollars ("$" or "USD").

 

(5)

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 “Significant Agreements and Related Party Transactions”.

 

(6)

All, or a portion of, the assets are pledged as collateral for the revolving credit facility with Ally Bank (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Facility”). See Note 6 “Debt”.

 

(7)

Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion. The unfunded loan commitment may be subject to a commitment termination date that may expire prior to the maturity date stated. The negative cost, if applicable, is the result of the capitalized discount being greater than the principal amount outstanding on the loan. The negative fair value, if applicable, is the result of the capitalized discount on the loan. See Note 8 "Commitments and Contingencies".

 

(8)

The fair value of the investment was determined using significant unobservable inputs. See Note 5 “Fair Value Measurement".

 

(9)

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

 

(10)

The investment is not a qualifying asset under Section 55(a) of the Investment Company Act. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of June 30, 2024, the aggregate fair value of these securities is $14,925 or 4.11% of the Company’s total assets.

 

(11)

In exchange for the greater risk of loss, the “last-out” portion of the Company's unitranche loan investment generally earns a higher interest rate than the “first-out” portions. The “first-out” portion would generally receive priority with respect to payment of principal, interest and any other amounts due thereunder over the “last-out” portion.

 

(12)

Non-income producing security.

 

(13)

Securities exempt from registration under the Securities Act of 1933 and may be deemed to be “restricted securities”. As of June 30, 2024, the aggregate fair value of these securities is $2,248 or 0.92% of the Company's net assets. The initial acquisition dates have been included for such securities.

 

 

(14)

The investment is otherwise deemed to be an “affiliated person” of the Company. See Note 3 “Significant Agreements and Related Party Transactions”.

 

(15)

The annualized seven-day yield as of June 30, 2024 is 5.21%.

 

PIK - Payment-In-Kind

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

11


Table of Contents

Phillip Street Middle Market Lending Fund LLC

Consolidated Schedule of Investments as of December 31, 2023

(in thousands, except unit and per unit amounts)

 

Investment (1)

Industry (2)

Interest
Rate (3)

Reference Rate and
Spread (3)

Maturity

 

Par/Shares
(4)

 

Cost

 

Fair
Value

 

Footnotes

Debt Investments - 103.41%

 

 

 

 

 

 

 

 

 

 

 

 

United States - 103.41%

 

 

 

 

 

 

 

 

 

 

 

 

1st Lien/Senior Secured Debt - 87.33%

 

 

 

 

 

 

 

 

 

 

 

 

Formulations Parent Corporation (dba Chase Corp)

Chemicals

11.12%

S + 5.75%

11/15/30

$

 

5,013

 

$

4,914

 

$

4,912

 

 (6)

Formulations Parent Corporation (dba Chase Corp)

Chemicals

S + 5.75%

11/15/29

 

 

835

 

 

(16

)

 

(17

)

 (5) (6)

ASM Buyer, Inc.

Commercial Services & Supplies

S + 6.00%

01/29/28

 

 

270

 

 

 

 

 

 (5) (6)

ASM Buyer, Inc.

Commercial Services & Supplies

S + 6.00%

01/29/28

 

 

4,189

 

 

 

 

 

 (5) (6) (7)

ASM Buyer, Inc.

Commercial Services & Supplies

S + 6.00%

01/29/27

 

 

541

 

 

 

 

 

 (5) (6)

Superior Environmental Solutions

Commercial Services & Supplies

11.96%

S + 6.50%

08/01/29

 

 

5,517

 

 

5,386

 

 

5,407

 

 (6) (7) (8)

Superior Environmental Solutions

Commercial Services & Supplies

11.96%

S + 6.50%

08/01/29

 

 

553

 

 

153

 

 

155

 

 (5) (6) (8)

Superior Environmental Solutions

Commercial Services & Supplies

S + 6.50%

08/01/29

 

 

830

 

 

(10

)

 

(17

)

 (5) (6) (8)

UP Acquisition Corp. (dba Unified Power)

Commercial Services & Supplies

11.38%

S + 6.00%

10/31/29

 

 

5,081

 

 

4,969

 

 

4,966

 

 (6) (7)

UP Acquisition Corp. (dba Unified Power)

Commercial Services & Supplies

S + 6.00%

10/31/29

 

 

794

 

 

(17

)

 

(18

)

 (5) (6)

Blast Bidco Inc. (dba Bazooka Candy Brands)

Consumer Staples Distribution & Retail

11.35%

S + 6.00%

10/04/30

 

 

4,478

 

 

4,369

 

 

4,366

 

 (6) (7)

Blast Bidco Inc. (dba Bazooka Candy Brands)

Consumer Staples Distribution & Retail

S + 6.00%

10/05/29

 

 

522

 

 

(13

)

 

(13

)

 (5) (6)

DFS Holding Company, Inc.

Distributors

12.46%

S + 7.00%

01/31/29

 

 

4,751

 

 

4,625

 

 

4,680

 

 (6) (7) (8)

DFS Holding Company, Inc.

Distributors

12.46%

S + 7.00%

01/31/29

 

 

996

 

 

330

 

 

333

 

 (5) (6) (8)

Groundworks, LLC

Diversified Consumer Services

11.90%

S + 6.50%

03/14/30

 

 

2,416

 

 

2,353

 

 

2,367

 

 (6) (7) (8)

Groundworks, LLC

Diversified Consumer Services

S + 6.50%

03/14/30

 

 

110

 

 

(6

)

 

(2

)

 (5) (6) (8)

Groundworks, LLC

Diversified Consumer Services

S + 6.50%

03/14/29

 

 

125

 

 

(3

)

 

(3

)

 (5) (6) (8)

Spotless Brands, LLC

Diversified Consumer Services

12.27%

S + 6.75%

07/25/28

 

 

8,580

 

 

8,362

 

 

8,451

 

 (6) (7) (8)

Spotless Brands, LLC

Diversified Consumer Services

12.25%

S + 6.75%

07/25/28

 

 

1,330

 

 

1,295

 

 

1,310

 

 (6) (8)

VASA Fitness Buyer, Inc.

Diversified Consumer Services

13.33%

S + 7.88% (Incl. 0.38% PIK)

08/14/28

 

 

8,417

 

 

8,139

 

 

8,249

 

 (6) (7) (8)

VASA Fitness Buyer, Inc.

Diversified Consumer Services

S + 7.88% (Incl. 0.38% PIK)

08/14/28

 

 

241

 

 

(8

)

 

(5

)

 (5) (6) (8)

VASA Fitness Buyer, Inc.

Diversified Consumer Services

S + 7.88% (Incl. 0.38% PIK)

08/14/28

 

 

1,445

 

 

(23

)

 

(29

)

 (5) (6) (8)

Fullsteam Operations LLC

Financial Services

13.78%

S + 8.25%

11/27/29

 

 

9,202

 

 

8,886

 

 

8,926

 

 (6) (7)

Fullsteam Operations LLC

Financial Services

13.78%

S + 8.25%

11/27/29

 

 

2,896

 

 

821

 

 

833

 

 (5) (6)

Fullsteam Operations LLC

Financial Services

S + 8.25%

11/27/29

 

 

515

 

 

(17

)

 

(15

)

 (5) (6)

Fullsteam Operations LLC

Financial Services

S + 8.25%

11/27/29

 

 

1,287

 

 

(19

)

 

(19

)

 (5) (6)

Highfive Dental Holdco, LLC

Health Care Providers & Services

12.45%

S + 6.75%

06/13/28

 

 

4,765

 

 

4,634

 

 

4,646

 

 (6) (7) (8)

Highfive Dental Holdco, LLC

Health Care Providers & Services

S + 6.75%

06/13/28

 

 

532

 

 

(14

)

 

(13

)

 (5) (6) (8)

Highfive Dental Holdco, LLC

Health Care Providers & Services

S + 6.75%

06/13/28

 

 

3,192

 

 

(86

)

 

(80

)

 (5) (6) (8)

TM Restaurant Group LLC

Hotels, Restaurants & Leisure

12.72%

S + 7.25%

07/26/28

 

 

10,688

 

 

10,425

 

 

10,367

 

 (6) (7) (8)

TM Restaurant Group LLC

Hotels, Restaurants & Leisure

S + 7.25%

07/26/28

 

 

1,286

 

 

(21

)

 

(39

)

 (5) (6) (8)

TM Restaurant Group LLC

Hotels, Restaurants & Leisure

S + 7.25%

07/26/28

 

 

3,000

 

 

(41

)

 

(90

)

 (5) (6) (8)

AQ Sunshine, Inc. (dba Relation Insurance)

Insurance

11.79%

S + 6.25%

04/15/27

 

 

5,430

 

 

5,376

 

 

5,376

 

 (6) (7)

AQ Sunshine, Inc. (dba Relation Insurance)

Insurance

11.75%

S + 6.25%

04/15/27

 

 

2,956

 

 

2,927

 

 

2,927

 

 (6) (7)

AQ Sunshine, Inc. (dba Relation Insurance)

Insurance

11.79%

S + 6.25%

04/15/27

 

 

2,121

 

 

2,100

 

 

2,100

 

 (6) (7)

AQ Sunshine, Inc. (dba Relation Insurance)

Insurance

11.64%

S + 6.25%

04/15/27

 

 

555

 

 

550

 

 

550

 

 (6) (7)

AQ Sunshine, Inc. (dba Relation Insurance)

Insurance

11.79%

S + 6.25%

04/15/27

 

 

533

 

 

528

 

 

527

 

 (6) (7)

AQ Sunshine, Inc. (dba Relation Insurance)

Insurance

S + 6.25%

04/15/27

 

 

427

 

 

(6

)

 

(6

)

 (5) (6)

AQ Sunshine, Inc. (dba Relation Insurance)

Insurance

S + 6.25%

04/15/27

 

 

2,956

 

 

(29

)

 

(30

)

 (5) (6)

GPS Phoenix Buyer, Inc. (dba Guidepoint)

IT Services

11.38%

S + 6.00%

10/02/29

 

 

6,305

 

 

6,183

 

 

6,179

 

 (6) (7)

GPS Phoenix Buyer, Inc. (dba Guidepoint)

IT Services

S + 6.00%

10/02/29

 

 

1,631

 

 

(16

)

 

(16

)

 (5) (6)

GPS Phoenix Buyer, Inc. (dba Guidepoint)

IT Services

S + 6.00%

10/02/29

 

 

1,305

 

 

(25

)

 

(26

)

 (5) (6)

Circustrix Holdings, LLC (dba SkyZone)

Leisure Products

12.11%

S + 6.75%

07/18/28

 

 

6,514

 

 

6,358

 

 

6,384

 

 (6) (7) (8)

Circustrix Holdings, LLC (dba SkyZone)

Leisure Products

S + 6.75%

07/18/28

 

 

419

 

 

(9

)

 

(8

)

 (5) (6) (8)

Circustrix Holdings, LLC (dba SkyZone)

Leisure Products

S + 6.75%

07/18/28

 

 

837

 

 

(10

)

 

(17

)

 (5) (6) (8)

Recorded Books Inc. (dba RBMedia)

Media

11.64%

S + 6.25%

09/03/30

 

 

5,815

 

 

5,660

 

 

5,699

 

 (6) (7) (8)

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 

 

12


Table of Contents

Phillip Street Middle Market Lending Fund LLC

Consolidated Schedule of Investments as of December 31, 2023 (continued)

(in thousands, except unit and per unit amounts)

 

Investment (1)

Industry (2)

Interest
Rate (3)

Reference Rate and
Spread (3)

Maturity

 

Par/Shares
(4)

 

Cost

 

Fair
Value

 

Footnotes

Recorded Books Inc. (dba RBMedia)

Media

S + 6.25%

08/31/28

$

 

471

 

$

(12

)

$

(9

)

 (5) (6) (8)

Arrow Buyer, Inc. (dba Archer Technologies)

Software

11.85%

S + 6.50%

07/01/30

 

 

2,942

 

 

2,872

 

 

2,898

 

 (6) (7) (8)

Arrow Buyer, Inc. (dba Archer Technologies)

Software

S + 6.50%

07/01/30

 

 

679

 

 

(8

)

 

(10

)

 (5) (6) (8)

Crewline Buyer, Inc. (dba New Relic)

Software

12.10%

S + 6.75%

11/08/30

 

 

6,963

 

 

6,792

 

 

6,789

 

 (6) (7)

Crewline Buyer, Inc. (dba New Relic)

Software

S + 6.75%

11/08/30

 

 

725

 

 

(18

)

 

(18

)

 (5) (6)

Ncontracts, LLC

Software

11.80%

S + 6.50%

12/11/29

 

 

10,689

 

 

10,423

 

 

10,422

 

 (6) (7)

Ncontracts, LLC

Software

S + 6.50%

12/11/29

 

 

987

 

 

(12

)

 

(12

)

 (5) (6)

Ncontracts, LLC

Software

S + 6.50%

12/11/29

 

 

987

 

 

(24

)

 

(25

)

 (5) (6)

Onyx CenterSource, Inc.

Software

12.25%

S + 6.75%

12/15/28

 

 

6,210

 

 

6,071

 

 

6,070

 

 (6) (7)

Onyx CenterSource, Inc.

Software

12.25%

S + 6.75%

12/15/28

 

 

466

 

 

145

 

 

145

 

 (5) (6)

Rubrik, Inc.

Software

12.52%

S + 7.00%

08/17/28

 

 

8,774

 

 

8,691

 

 

8,686

 

 (6) (7) (8)

Rubrik, Inc.

Software

12.52%

S + 7.00%

08/17/28

 

 

1,226

 

 

112

 

 

112

 

 (5) (6) (8)

Singlewire Software, LLC

Software

11.35%

S + 6.00%

05/10/29

 

 

8,942

 

 

8,695

 

 

8,763

 

 (6) (7) (8)

Singlewire Software, LLC

Software

S + 6.00%

05/10/29

 

 

1,438

 

 

(39

)

 

(29

)

 (5) (6) (8)

Ortholite, LLC

Textiles, Apparel & Luxury Goods

11.61%

S + 6.25%

09/29/27

 

 

2,876

 

 

2,848

 

 

2,847

 

 (6) (7) (8)

Harrington Industrial Plastics, LLC

Trading Companies & Distributors

11.11%

S + 5.75%

10/07/30

 

 

3,281

 

 

3,201

 

 

3,199

 

 (6) (7)

Harrington Industrial Plastics, LLC

Trading Companies & Distributors

11.11%

S + 5.75%

10/07/30

 

 

1,119

 

 

760

 

 

755

 

 (5) (6)

Total 1st Lien/Senior Secured Debt

 

 

 

 

 

 

 

 

149,451

 

 

149,830

 

 

1st Lien/Last-Out Unitranche (9) - 16.08%

 

 

 

 

 

 

 

 

 

 

 

 

EIP Consolidated, LLC (dba Everest Infrastructure)

Wireless Telecommunication Services

11.61%

S + 6.25%

12/07/28

$

 

6,255

 

$

6,193

 

$

6,193

 

 (6) (7)

EIP Consolidated, LLC (dba Everest Infrastructure)

Wireless Telecommunication Services

S + 6.25%

12/07/28

 

 

3,745

 

 

(37

)

 

(38

)

 (5) (6)

K2 Towers III, LLC

Wireless Telecommunication Services

11.91%

S + 6.55%

12/06/28

 

 

10,000

 

 

7,294

 

 

7,293

 

 (5) (6)

Skyway Towers Intermediate LLC

Wireless Telecommunication Services

11.73%

S + 6.37%

12/22/28

 

 

3,682

 

 

3,645

 

 

3,645

 

 (6) (7)

Skyway Towers Intermediate LLC

Wireless Telecommunication Services

S + 6.37%

12/22/28

 

 

2,305

 

 

(23

)

 

(23

)

 (5) (6)

Thor FinanceCo LLC (dba Harmoni Towers)

Wireless Telecommunication Services

12.46%

S + 7.00%

08/24/28

 

 

6,222

 

 

6,147

 

 

6,160

 

 (6) (7) (8)

Thor FinanceCo LLC (dba Harmoni Towers)

Wireless Telecommunication Services

S + 7.00%

08/24/28

 

 

3,778

 

 

(45

)

 

(38

)

 (5) (6) (8)

Towerco IV Holdings, LLC

Wireless Telecommunication Services

9.71%

S + 4.25%

08/31/28

 

 

7,666

 

 

4,370

 

 

4,396

 

 (5) (6) (7) (8)

Total 1st Lien/Last-Out Unitranche

 

 

 

 

 

 

 

 

27,544

 

 

27,588

 

 

Total United States

 

 

 

 

 

 

 

$

176,995

 

$

177,418

 

 

Total Debt Investments

 

 

 

 

 

 

 

 

176,995

 

 

177,418

 

 

Total Investments - 103.41%

 

 

 

 

 

 

 

$

176,995

 

$

177,418

 

 

Investments in Affiliated Money Market Fund - 5.56%

 

 

 

 

 

 

 

 

 

 

 

 

Goldman Sachs Financial Square Government Fund - Institutional Shares

 

 

 

 

 

 

9,542,172

 

$

9,542

 

$

9,542

 

 (7) (10) (11)

Total Investments in Affiliated Money Market Fund

 

 

 

 

 

 

 

 

9,542

 

 

9,542

 

 

Total Investments and Investments in Affiliated Money Market Fund - 108.97%

 

 

 

 

 

 

 

$

186,537

 

$

186,960

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Percentages are based on members' capital.

 

(2)

For Industry subtotal and percentage, see Note 4 "Investments."

 

 

(3)

Represents the actual interest rate for partially or fully funded debt in effect as of the reporting date. Certain investments are subject to an interest rate floor. Variable rate loans bear interest at a rate that may be determined by the larger of the floor or the reference to either L, S, SN, or alternate base rate (commonly based on the P, unless otherwise noted) at the borrower's option, which reset periodically based on the terms of the credit agreement. L and S loans are typically indexed to 12 month, 6 month, 3 month or 1 month L or S rates. As of December 31, 2023, the rate for the 1 month S was 5.35% and 3 month S was 5.33%. For investments with multiple reference rates or alternate base rates, the interest rate shown is the weighted average interest rate in effect at December 31, 2023.

 

(4)

Par amount is presented for debt investments, while the number of shares or units owned is presented for equity investments. Par amount is denominated in USD.

 

(5)

Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion. The unfunded loan commitment may be subject to a commitment termination date that may expire prior to the maturity date stated. The negative cost, if applicable, is the result of the capitalized discount being greater than the principal amount outstanding on the loan. The negative fair value, if applicable, is the result of the capitalized discount on the loan. See Note 7 "Commitments and Contingencies".

 

(6)

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 “Significant Agreements and Related Party Transactions”.

 

(7)

All, or a portion of, the assets are pledged as collateral for the revolving credit facility with Ally Bank (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Facility”). See Note 6 “Debt”.

 

(8)

The fair value of the investment was determined using significant unobservable inputs. See Note 5 “Fair Value Measurement”.

 

(9)

In exchange for the greater risk of loss, the “last-out” portion of the Company's unitranche loan investment generally earns a higher interest rate than the “first-out” portions. The “first-out” portion would generally receive priority with respect to payment of principal, interest and any other amounts due thereunder over the “last-out” portion.

 

(10)

The investment is otherwise deemed to be an “affiliated person” of the Company. See Note 3 “Significant Agreements and Related Party Transactions”.

 

(11)

The annualized seven-day yield as of December 31, 2023 is 5.25%.

PIK - Payment-In-Kind

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 

13


Table of Contents

Phillip Street Middle Market Lending Fund LLC

Notes to the Consolidated Financial Statements

(in thousands, except unit and per unit amounts)

(Unaudited)

1. ORGANIZATION

 

Phillip Street Middle Market Lending Fund LLC (the “Company”) is a Delaware limited liability company formed on July 13, 2022. The Company has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “Investment Company Act”). In addition, the Company has elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with its taxable year ended December 31, 2022. The Company commenced operations on October 6, 2022. On November 2, 2022, the Company's initial investors (other than the Initial Member (as defined below)) funded the initial portion of their capital commitment to purchase units of the Company’s limited liability interest (“Units”).

The Company’s investment objective is to generate current income and, to a lesser extent, capital appreciation primarily through direct originations of secured debt, including first lien, unitranche debt, including last out portions of such loans, and second lien debt, and unsecured debt, including mezzanine debt, as well as through select equity investments.

Goldman Sachs Asset Management, L.P. (“GSAM”), a Delaware limited partnership and an affiliate of Goldman Sachs & Co. LLC (including its predecessors, “GS & Co.”), is the investment adviser (the “Investment Adviser”) of the Company. The term “Goldman Sachs” refers to The Goldman Sachs Group, Inc. (“GS Group Inc.”), together with GS & Co., GSAM and its other subsidiaries.

The Company is conducting an offering pursuant to which investors will make a capital commitment (a “Commitment”) to purchase Units pursuant to a subscription agreement entered into with the Company pursuant to which the investor will agree to purchase Units for an aggregate purchase price equal to its Commitment. Each investor will be required to purchase the Company’s Units each time the Company delivers a drawdown notice at least 10 business days prior to the required funding date (the “Drawdown Date”). The offering and sale of Units will be exempt from registration pursuant to Regulation D and Regulation S promulgated under the U.S. Securities Act of 1933, as amended, for offers and sales of securities that do not involve a public offering and for offers and sale of securities outside of the United States.

On October 6, 2022, the Company received a capital commitment of $10 from an affiliate of the Investment Adviser (the “Initial Member”). The Initial Member was the sole owner of the Company’s interests until the period beginning on the first date on which investors in the Company are required to make the initial capital contribution to purchase Units, and Units are issued in respect thereof (the “Initial Drawdown Date”).

On October 19, 2022, the Company began accepting subscription agreements ("Subscription Agreements") from investors acquiring Units of the Company in the Company's private offering. Under the terms of the Subscription Agreements, investors are required to make capital contributions up to the undrawn amount of their capital commitment to purchase Units each time the Company delivers a drawdown notice. On March 1, 2023, the Company’s board of directors (the “Board of Directors” or the “Board”) approved an amended and restated limited liability company agreement.

The Company has formed wholly owned subsidiaries, which are structured as Delaware limited liability companies, to hold certain equity or equity-like investments in portfolio companies and corporate debt of portfolio companies.

2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Company’s functional currency is U.S. dollars (“USD”) and these consolidated financial statements have been prepared in that currency. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to Regulation S-X. This requires the Company to make certain estimates and assumptions that may affect the amounts reported in the consolidated financial statements and accompanying notes. These consolidated financial statements reflect normal and recurring adjustments that in the opinion of the Company are necessary for the fair statement of the results for the periods presented. Actual results may differ from the estimates and assumptions included in the consolidated financial statements.

14


Certain financial information that is included in annual consolidated financial statements, including certain financial statement disclosures, prepared in accordance with GAAP, is not required for interim reporting purposes and has been condensed or omitted herein. These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes related thereto for the year ended December 31, 2023, included in the Company’s annual report on Form 10-K, which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 5, 2024. The results for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the full fiscal year, any other interim period or any future year or period.

As an investment company, the Company applies the accounting and reporting guidance in Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies (“ASC 946”) issued by the Financial Accounting Standards Board (“FASB”).

Basis of Consolidation

As provided under ASC 946, the Company will 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 financial position and results of operations of its wholly owned subsidiaries, Phillip Street Middle Market Lending Investments LLC ("SPV"), Phillip Street Middle Market Lending Investments Holdings LLC, and PSLF Blocker I, LLC. All significant intercompany transactions and balances have been eliminated in consolidation.

Revenue Recognition

The Company records its investment transactions on a trade date basis, which is the date when the Company assumes the risks for gains and losses related to that instrument. Realized gains and losses are based on the specific identification method.

Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis. Discounts and premiums to par value on investments purchased are accreted and amortized, respectively, into interest income over the life of the respective investment using the effective interest method. Loan origination fees, original issue discount ("OID") and market discounts or premiums are capitalized and amortized into interest income using the effective interest method or straight-line method, as applicable. Exit fees that are receivable upon repayment of a loan or debt security are amortized into interest income over the life of the respective investment. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized upfront loan origination fees and unamortized discounts are recorded as interest income, for which the Company has earned the following:

 

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

 

June 30, 2024

 

 

June 30, 2023

 

Prepayment premiums

 

$

 

 

$

 

 

$

2

 

 

$

 

Accelerated amortization of upfront loan origination fees and unamortized discounts

 

$

17

 

 

$

1

 

 

$

93

 

 

$

3

 

Fees received from portfolio companies (directors’ fees, consulting fees, administrative fees, tax advisory fees and other similar compensation) are paid to the Company, unless, to the extent required by applicable law or exemptive relief, if any, therefrom, the Company only receives its allocable portion of such fees when invested in the same portfolio company as another Account (as defined below) managed by the Investment Adviser.

Dividend income on preferred equity investments is recorded on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity investments is recorded on the record date for private portfolio companies and on the ex-dividend date for publicly traded portfolio companies. Interest and dividend income are presented net of withholding tax, if any.

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

Certain structuring fees, amendment fees, syndication fees and commitment fees are recorded as other income when earned. Administrative agent fees received by the Company are recorded as other income when the services are rendered over time.

15


Table of Contents

Non-Accrual Investments

Investments are placed on non-accrual status when it is probable that principal, interest or dividends will not be collected according to the contractual terms. Accrued interest or dividends generally are reversed when an investment is placed on non-accrual status. Interest or dividend payments received on non-accrual investments may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual investments are restored to accrual status when past due principal and interest or dividends are paid and, in management’s judgment, principal and interest or dividend payments are likely to remain current. The Company may make exceptions to this treatment if an investment has sufficient collateral value and is in the process of collection. As of June 30, 2024 and December 31, 2023, the Company did not have any investments on non-accrual status.

Investments

The Company carries its investments in accordance with ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), issued by the FASB, which defines fair value, establishes a framework for measuring fair value and requires disclosures about fair value measurements. Fair value is generally based on quoted market prices provided by independent price sources. In the absence of quoted market prices, investments are measured at fair value as determined by the Investment Adviser, as the valuation designee ("Valuation Designee") designated by the Board of Directors, pursuant to Rule 2a-5 under the Investment Company Act.

Due to the inherent uncertainties of valuation, certain estimated fair values may differ significantly from the values that would have been realized had a ready market for these investments existed, and these differences could be material. See Note 5 “Fair Value Measurement”.

The Company generally invests in illiquid securities, including debt and equity investments, of middle-market companies. The Board of Directors has designated to the Investment Adviser day-to-day responsibilities for implementing and maintaining internal controls and procedures related to the valuation of the Company’s portfolio investments. Under valuation procedures approved by the Board of Directors and adopted by the Valuation Designee, market quotations are generally used to assess the value of the investments for which market quotations are readily available (as defined in Rule 2a-5). The Investment Adviser obtains these market quotations from independent pricing sources. If market quotations are not readily available, the Investment Adviser prices securities at the bid prices obtained from at least two brokers or dealers, if available; otherwise, the Investment Adviser obtains prices from a principal market maker or a primary market dealer. To assess the continuing appropriateness of pricing sources and methodologies, the Investment Adviser regularly performs price verification procedures and issues challenges as necessary to independent pricing sources or brokers, and any differences are reviewed in accordance with the valuation procedures. If the Valuation Designee believes any such market quotation does not reflect the fair value of an investment, it may independently value such investment in accordance with valuation procedures for investments for which market quotations are not readily available.

With respect to investments for which market quotations are not readily available, or for which market quotations are deemed not reflective of the fair value, the valuation procedures approved by the Board of Directors and adopted by the Valuation Designee, contemplate a multi-step valuation process conducted by the Investment Adviser each quarter and more frequently as needed. As the Valuation Designee, the Investment Adviser is primarily responsible for the valuation of the Company’s assets, subject to the oversight of the Board of Directors, as described below:

1.
The quarterly valuation process begins with each portfolio company or investment being initially valued by the investment professionals of the Investment Adviser responsible for the valuation of the portfolio investment;
2.
The Valuation Designee also engages independent valuation firms (the “Independent Valuation Advisors”) to provide independent valuations of the investments for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of an investment. The Independent Valuation Advisors independently value such investments using quantitative and qualitative information. The Independent Valuation Advisors also provide analyses to support their valuation methodology and calculations. The Independent Valuation Advisors provide an opinion on a final range of values on such investments to the Valuation Designee. The Independent Valuation Advisors define fair value in accordance with ASC 820 and utilize valuation approaches including the market approach, the income approach or both. A portion of the portfolio is reviewed on a quarterly basis, and all investments in the portfolio for which market quotations are not readily available, or are readily available, but deemed not reflective of the fair value of an investment, are reviewed at least annually by an Independent Valuation Advisor;
3.
The Independent Valuation Advisors’ preliminary valuations are reviewed by the Investment Adviser and the Valuation Oversight Group (“VOG”), a team that is part of the controllers group of Goldman Sachs. The Independent Valuation Advisors’ valuation ranges are compared to the Investment Adviser’s valuations to ensure the Investment Adviser’s valuations are reasonable. VOG presents the valuations to the Asset Management Private Investment Valuation and Side Pocket Working Group of the Asset Management Valuation Committee (the “Asset Management Private Investment Valuation and Side Pocket Working Group”), which is comprised of a number of representatives from different functions and areas of expertise related to GSAM’s business and controls who are independent of the investment decision making process;

16


4.
The Asset Management Private Investment Valuation and Side Pocket Working Group reviews and preliminarily approves the fair valuations and makes fair valuation recommendations to the Asset Management Valuation Committee;
5.
The Asset Management Valuation Committee reviews the valuation information provided by the Asset Management Private Investment Valuation and Side Pocket Working Group, the VOG, the investment professionals of the Investment Adviser responsible for valuations, and the Independent Valuation Advisors. The Asset Management Valuation Committee then assesses such valuation recommendations; and
6.
Through the Asset Management Valuation Committee, the Valuation Designee, discusses the valuations, provides written reports to the Board of Directors on at least a quarterly basis, and, within the meaning of the Investment Company Act, determines the fair value of the investments in good faith, based on the inputs of the Asset Management Valuation Committee, the Asset Management Private Investment Valuation and Side Pocket Working Group, the VOG, the investment professionals of the Investment Adviser responsible for valuations, and the Independent Valuation Advisors.

Money Market Funds

Investments in money market funds are valued at net asset value (“NAV”) per share. See Note 3 “Significant Agreements and Related Party Transactions.”

Cash

Cash consists of deposits held at a custodian bank. As of June 30, 2024 and December 31, 2023, the Company held an aggregate cash balance of $14,737 and $5,789.

Income Taxes

The Company recognizes tax positions in its consolidated financial statements only when it is more likely than not that the position will be sustained upon examination by the relevant taxing authority based on the technical merits of the position. A position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized upon settlement. The Company reports any interest expense related to income tax matters in income tax expense, and any income tax penalties under expenses in the Consolidated Statement of Operations.

The Company’s tax positions have been reviewed based on applicable statutes of limitation for tax assessments, which may vary by jurisdiction, and based on such review, the Company has concluded that no additional provision for income tax is required in the consolidated financial statements. The Company is subject to potential examination by certain taxing authorities in various jurisdictions. The Company’s tax positions are subject to ongoing interpretation of laws and regulations by taxing authorities.

The Company elected to be treated as a RIC commencing with its taxable year ended December 31, 2022. So long as the Company maintains its status as a RIC, it will generally not be required to pay corporate-level U.S. federal income tax on any ordinary income or capital gains that it distributes at least annually to its unitholders (the "Unitholders") as dividends. As a result, any U.S. federal income tax liability related to income earned and distributed by the Company represents obligations of the Company’s Unitholders and will not be reflected in the consolidated financial statements of the Company.

To maintain its tax treatment as a RIC, the Company must meet specified source-of-income and asset diversification requirements and timely distribute to its Unitholders for each taxable year at least 90% of its investment company taxable income (generally, its net ordinary income plus the excess of its realized net short-term capital gains over realized net long-term capital losses, determined without regard to the dividends paid deduction). In order for the Company not to be subject to U.S. federal excise taxes, it must distribute annually an amount at least equal to the sum of (i) 98% of its net ordinary income (taking into account certain deferrals and elections) for the calendar year, (ii) 98.2% of its capital gains in excess of capital losses for the one-year period ending on October 31 of the calendar year and (iii) any net ordinary income and capital gains in excess of capital losses for preceding years that were not distributed during such years. The Company, at its discretion, may carry forward taxable income in excess of calendar year dividends and pay a 4% nondeductible U.S. federal excise tax on this income. If the Company chooses to do so, this generally would increase expenses and reduce the amount available to be distributed to Unitholders. The Company will accrue excise tax on estimated undistributed taxable income as required.

 

Certain of the Company’s consolidated subsidiaries are subject to U.S. federal and state corporate level income taxes. Income tax expense, if any, is included under the income category for which it applies in the Consolidated Statement of Operations.

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Distributions

Distributions from net investment income and net realized capital gains are determined in accordance with U.S. federal income tax regulations, which may differ from those amounts determined in accordance with GAAP. The Company may pay distributions in excess of its taxable net investment income. This excess would be a tax-free return of capital in the period and reduce a Unitholder’s tax basis in its Units. These book/tax differences are either temporary or permanent in nature. To the extent these differences are permanent, they are charged or credited to Units or distributable earnings, as appropriate, in the period that the differences arise. Temporary and permanent differences are primarily attributable to differences in the tax treatment of certain loans and the tax characterization of income and non-deductible expenses. These differences are generally determined in conjunction with the preparation of the Company’s annual RIC tax return. Distributions to Unitholders are recorded on the record date. The amount to be paid out as a distribution is determined by the Board of Directors each quarter and is generally based upon the earnings estimated by the Investment Adviser. The Company may pay distributions to its Unitholders in a year in excess of its net ordinary income and capital gains for that year and, accordingly, a portion of such distributions may constitute a return of capital for U.S. federal income tax purposes. The Company intends to timely distribute to its Unitholders substantially all of its annual taxable income for each year, except that the Company may retain certain net capital gains for reinvestment and, depending upon the level of the Company’s taxable income earned in a year, the Company may choose to carry forward taxable income for distribution in the following year and pay any applicable tax. The specific tax characteristics of the Company’s distributions will be reported to Unitholders after the end of the calendar year. All distributions will be subject to available funds, and no assurance can be given that the Company will be able to declare such distributions in future periods.

The Company has a distribution reinvestment plan that provides for reinvestment of all cash distributions declared by the Board of Directors unless a Unitholder elects to “opt out” of the plan. As a result, if the Board of Directors declares a cash distribution, then the Unitholders who have not “opted out” of the dividend reinvestment plan will have their cash distributions automatically reinvested in additional Units, rather than receiving the cash distribution. Unitholders who receive distributions in the form of additional Units will generally be subject to the same U.S. federal, state and local tax consequences as if they received cash distributions and, for this purpose, Unitholders receiving distributions in the form of Units will generally be treated as receiving distributions equal to the amount of cash that would have been received if the Unitholder had received the distribution in cash; however, since their cash distributions will be reinvested, those Unitholders will not receive cash with which to pay any applicable taxes.

Deferred Financing Costs

Deferred financing costs consist of fees and expenses paid in connection with the closing of and amendments to the revolving credit facility with Ally Bank (the “Credit Facility”). These costs are amortized using the straight-line method over the term of the Credit Facility. Deferred financing costs related to the Credit Facility are presented separately as an asset on the Company’s Consolidated Statements of Financial Condition.

 

Organization Costs

Organization costs include costs relating to the formation and organization of the Company. These costs were expensed as incurred. Upon the Initial Drawdown Date, Unitholders bore such costs. Unitholders making capital commitments after the Initial Drawdown Date will bear a pro rata portion of such costs at the time of their first investment in the Company.

Offering Costs

Offering costs consist primarily of fees and expenses incurred in connection with the continuous offering of Units, including legal, printing and other costs, as well as costs associated with the preparation and filing of the Company’s registration statement on Form 10. Offering costs are recognized as a deferred charge and are amortized on a straight-line basis over 12 months beginning on the date of commencement of operations.

New Accounting Pronouncements

In November 2023, the FASB issued Accounting Standard Update (“ASU”) No. 2023-07, “Improvements to Reportable Segment Disclosures.” This ASU requires enhanced disclosures about significant segment expenses. In addition, the ASU requires specific disclosures related to the title and position of the individual (or the name of the group or committee) identified as the Chief Operating Decision Maker (“CODM”); and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, under a retrospective approach. The Company is assessing the impact of the new ASU on its consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, “Improvements to Income Tax Disclosures.” This ASU requires additional disaggregation of income taxes paid, specific rate reconciliation categories, and disaggregation within those categories if a defined quantitative threshold is met. The ASU is effective for annual periods beginning after December 15, 2024. Early adoption is permitted and adoption of this ASU will not have a material impact on the Company’s consolidated financial statements.

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3. SIGNIFICANT AGREEMENTS AND RELATED PARTY TRANSACTIONS

Investment Management and Advisory Agreement

The Company entered into an investment management and advisory agreement effective as of October 19, 2022 (the “Investment Management Agreement”) with the Investment Adviser, pursuant to which the Investment Adviser manages the Company’s investment program and related activities.

Management Fee

The Company pays the Investment Adviser a management fee (the “Management Fee”), accrued and payable quarterly in arrears. The Management Fee is calculated at, (i) prior to the calendar quarter-end that the aggregate amount of capital contributions to the Company made by Unitholders equals or exceeds $450 million, 0.325% (i.e., an annual rate of 1.30%), and (ii) on and after such date 0.2375% (i.e., an annual rate of 0.95%), in each case, of the average NAV of the Company at the end of the then-current calendar quarter and the prior calendar quarter. For the avoidance of doubt, the Management Fee for the Company's first quarter (i.e., the period beginning on the Initial Drawdown Date and ending on the last day of the quarter in which the Initial Drawdown Date occurred) shall be equal to 0.325% (i.e., an annual rate of 1.30%) of the average of the Company's NAV at the end of such quarter and zero. The Management Fee for any partial quarter will be appropriately prorated. The Management Fee will be reduced by an amount equal to any fees the Investment Adviser earns for any affiliated money market funds in which the Company invests.

For the three and six months ended June 30, 2024, Management Fees amounted to $690 and $1,262. As of June 30, 2024, $690 remained payable. For the three and six months ended June 30, 2023, Management Fees amounted to $294 and $580, respectively and the Investment Adviser voluntarily waived $0 and $286 of its Management Fees, respectively.

Incentive Fee

The Company pays to the Investment Adviser a quarterly incentive fee (the “Incentive Fee”) with respect to pre-incentive fee net investment income (as defined below) as follows:

(a)

First, no Incentive Fee will be payable to the Investment Adviser based on pre-incentive fee net investment income in any calendar quarter in which our pre-incentive fee net investment income does not exceed a hurdle rate of 1.25% of the Company's NAV (5.0% annualized) (the “Hurdle Rate”); and

 

(b)

Thereafter, the Investment Adviser will be entitled to receive 15% of the pre-incentive fee net investment income, if any, that exceeds 1.25% of the Company's NAV in any calendar quarter (5.0% annualized), which reflects that once the Hurdle Rate is reached, 15% of all pre-incentive fee net investment income in excess of the Hurdle Rate is paid to the Investment Adviser.

The Hurdle Rate will be determined on a quarterly basis, and will be calculated by multiplying 1.25% by the Company's NAV at the beginning of each applicable calendar quarter, adjusted for the Company’s subscriptions and distributions during the applicable calendar quarter. The Incentive Fee will be calculated and paid quarterly in arrears. The Incentive Fee is a fee owed by the Company to the Investment Adviser and is not paid out of distributions made to Unitholders.

Pre-incentive fee net investment income means interest income, distribution income and any other income accrued during the calendar quarter, minus operating expenses for the quarter, including the base Management Fee, expenses payable to State Street Bank and Trust Company ("the Administrator") under the Administration Agreement (as defined below), any interest expense and distributions paid on any issued and outstanding private equity securities (the “Preferred Units”), but excluding the Incentive Fee. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as debt instruments with PIK interest and zero coupon securities), accrued income that the Company has not yet received in cash. The Investment Adviser is not obligated to return to Unitholders the Incentive Fee it receives on PIK interest that is later determined to be uncollectible in cash.

For the three and six months ended June 30, 2024, the Company accrued Incentive Fees of $228 and $488, respectively. As of June 30, 2024, $228 remained payable. For the three and six months ended June 30, 2023, the Company did not accrue Incentive Fees.

Administration and Custodian Fees

The Company has entered into an administration agreement with the Administrator (the "Administration Agreement") under which the Administrator provides various accounting and administrative services to the Company. The Company pays the Administrator fees for its services as it determines to be commercially reasonable in its sole discretion. The Company also reimburses the Administrator for all reasonable expenses. To the extent that the Administrator outsources any of its functions, the Administrator pays any compensation associated with such functions. The Administrator also serves as the Company’s custodian (the “Custodian”).

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Table of Contents

For the three and six months ended June 30, 2024, the Company incurred expenses for services provided by the Administrator and the Custodian of $91 and $176. As of June 30, 2024, $85 remained payable. For the three and six months ended June 30, 2023, the Company incurred expenses for services provided by the Administrator and the Custodian of $70 and $140, respectively.

Transfer Agent Fees

State Street Bank and Trust Company serves as the Company’s transfer agent (the “Transfer Agent”), registrar and disbursing agent. For the three and six months ended June 30, 2024, the Company incurred expenses for services provided by the Transfer Agent of $13 and $26. As of June 30, 2024, $18 remained payable. For the three and six months ended June 30, 2023, the Company incurred expenses for services provided by the Transfer Agent of $13 and $26, respectively.

Affiliates

GSAM Holdings, LLC owned 500 of the Company's Units as of June 30, 2024 and December 31, 2023. The table below presents the Company’s affiliated investments:

 

 

Beginning Fair Value Balance

 

 

Gross
Additions
(1)

 

 

Gross
Reductions
(2)

 

 

Net Realized
Gain (Loss)

 

 

Net Change in
Unrealized
Appreciation
(Depreciation)

 

 

Ending
Fair Value
Balance

 

 

Dividend,
Interest
and Other
Income

 

For the Six Months Ended June 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Controlled Affiliates

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goldman Sachs Financial Square Government Fund

$

9,542

 

 

$

126,110

 

 

$

(105,232

)

 

$

 

 

$

 

 

$

30,420

 

 

$

263

 

ABC Investment Holdco Inc. (dba ABC Plumbing)

 

 

 

 

9,728

 

 

 

(173

)

 

 

 

 

 

(7

)

 

 

9,548

 

 

 

166

 

Total Non-Controlled Affiliates

$

9,542

 

 

$

135,838

 

 

$

(105,405

)

 

$

 

 

$

(7

)

 

$

39,968

 

 

$

429

 

For the Year Ended December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Controlled Affiliates

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goldman Sachs Financial Square Government Fund

$

79,725

 

 

$

297,188

 

 

$

(367,371

)

 

$

 

 

$

 

 

$

9,542

 

 

$

2,044

 

Total Non-Controlled Affiliates

$

79,725

 

 

$

297,188

 

 

$

(367,371

)

 

$

 

 

$

 

 

$

9,542

 

 

$

2,044

 

 

(1)
Gross additions may include increases in the cost basis of investments resulting from new portfolio investments, PIK, the accretion of discounts, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category.
(2)
Gross reductions may include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.

 

Due to Affiliates

The Investment Adviser pays certain general and administrative expenses on behalf of the Company in the ordinary course of business. As of June 30, 2024 and December 31, 2023, there were $50 and $123, respectively, included within Professional fees payable, $58 and $58, respectively, included within Accrued deferred offering costs, $0 and $0, respectively, included within Accrued organization costs and $1 and $1, respectively, included within Interest and other debt expenses payable that were paid by the Investment Adviser and its affiliates on behalf of the Company.

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Table of Contents

Co-Investment Activity

In certain circumstances, the Company can make negotiated co-investments pursuant to an exemptive order from the SEC permitting it to do so. On November 16, 2022, the SEC granted to the Investment Adviser, the BDCs advised by the Investment Adviser and certain other affiliated applicants exemptive relief on which the Company expects to rely to co-invest alongside certain other client accounts managed by the Investment Adviser (collectively with the Company, the “Accounts”), which may include proprietary accounts of Goldman Sachs, in a manner consistent with the Company's investment objectives and strategies, certain Board-established criteria, the conditions of such exemptive relief and other pertinent factors (as amended, the “Relief”). On June 25, 2024, the SEC granted an amendment to the Relief, which permits the Company to participate in follow-on investments in the Company’s existing portfolio companies with certain affiliates covered by the Relief if such affiliates, that are not BDCs or registered investment companies, have an investment in such existing portfolio company. Additionally, if the Investment Adviser forms other funds in the future, the Company may co-invest alongside such other affiliates, subject to compliance with the Relief, applicable regulations and regulatory guidance, as well as applicable allocation procedures. As a result of the Relief, there could be significant overlap in the Company’s investment portfolio and the investment portfolios of other Accounts, including, in some cases, proprietary accounts of Goldman Sachs. The Goldman Sachs Asset Management Private Credit Team is composed of investment professionals dedicated to the Company’s investment strategy and to other funds that share a similar investment strategy with the Company. The Goldman Sachs Asset Management Private Credit Team is responsible for identifying investment opportunities, conducting research and due diligence on prospective investments, negotiating and structuring the Company’s investments and monitoring and servicing the Company’s investments. The team works together with investment professionals who are primarily focused on investment strategies in syndicated, liquid credit. Under the terms of the Relief, a “required majority” (as defined in Section 57(o) of the Investment Company Act) of the Company’s independent directors must make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the proposed transaction are reasonable and fair to the Company and the Company’s Unitholders and do not involve overreaching in respect of the Company or its Unitholders on the part of any person concerned, and (2) the transaction is consistent with the interests of the Company’s Unitholders and is consistent with the then-current investment objectives and strategies of the Company.

4. INVESTMENTS

The Company’s investments (excluding investments in money market funds, if any) consisted of the following:

 

 

 

June 30, 2024

 

 

December 31, 2023

 

Investment Type

 

Cost

 

 

Fair Value

 

 

Cost

 

 

Fair Value

 

1st Lien/Senior Secured Debt

 

$

273,105

 

 

$

274,576

 

 

$

149,451

 

 

$

149,830

 

1st Lien/Last-Out Unitranche

 

 

35,763

 

 

 

35,766

 

 

 

27,544

 

 

 

27,588

 

Common Stock

 

 

2,248

 

 

 

2,248

 

 

 

 

 

 

 

Total investments

 

$

311,116

 

 

$

312,590

 

 

$

176,995

 

 

$

177,418

 

 

The industry composition of the Company’s investments as a percentage of fair value and net assets was as follows:

 

 

 

June 30, 2024

 

 

December 31, 2023

 

 

Industry

 

Fair Value

 

 

Net Assets

 

 

Fair Value

 

 

Net Assets

 

 

Software

 

 

14.3

%

 

 

18.3

%

 

 

24.6

%

 

 

25.3

%

 

Diversified Consumer Services

 

 

14.3

 

 

 

18.1

 

 

 

11.5

 

 

 

11.9

 

 

Trading Companies & Distributors

 

 

13.8

 

 

 

17.6

 

 

 

2.2

 

 

 

2.3

 

 

Financial Services

 

 

12.9

 

 

 

16.4

 

 

 

5.5

 

 

 

5.7

 

 

Wireless Telecommunication Services

 

 

11.4

 

 

 

14.6

 

 

 

15.5

 

 

 

16.1

 

 

Commercial Services & Supplies

 

 

8.9

 

 

 

11.3

 

 

 

5.9

 

 

 

6.1

 

 

Insurance

 

 

3.9

 

 

 

5.0

 

 

 

6.5

 

 

 

6.7

 

 

Hotels, Restaurants & Leisure

 

 

3.3

 

 

 

4.1

 

 

 

5.8

 

 

 

6.0

 

 

Specialty Retail

 

 

2.9

 

 

 

3.7

 

 

 

 

 

 

 

 

Leisure Products

 

 

2.3

 

 

 

2.9

 

 

 

3.6

 

 

 

3.7

 

 

IT Services

 

 

2.0

 

 

 

2.5

 

 

 

3.5

 

 

 

3.6

 

 

Media

 

 

1.8

 

 

 

2.3

 

 

 

3.2

 

 

 

3.3

 

 

Distributors

 

 

1.6

 

 

 

2.0

 

 

 

2.8

 

 

 

2.9

 

 

Chemicals

 

 

1.6

 

 

 

2.0

 

 

 

2.8

 

 

 

2.9

 

 

Health Care Providers & Services

 

 

1.4

 

 

 

1.8

 

 

 

2.5

 

 

 

2.7

 

 

Consumer Staples Distribution & Retail

 

 

1.4

 

 

 

1.8

 

 

 

2.5

 

 

 

2.5

 

 

Aerospace & Defense

 

 

1.3

 

 

 

1.6

 

 

 

 

 

 

 

 

Textiles, Apparel & Luxury Goods

 

 

0.9

 

 

 

1.2

 

 

 

1.6

 

 

 

1.7

 

 

Total

 

 

100.0

%

 

 

127.2

%

 

 

100.0

%

 

 

103.4

%

 

The geographic composition of the Company’s investments at fair value was as follows:

Geographic

 

June 30, 2024

 

 

December 31, 2023

 

United States

 

 

100.0

%

 

 

100.0

%

Total

 

 

100.0

%

 

 

100.0

%

 

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5. FAIR VALUE MEASUREMENT

The fair value of a financial instrument is the amount that would be received to sell an asset or would be paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price).

The fair value hierarchy under ASC 820 prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The levels used for classifying investments are not necessarily an indication of the risk associated with investing in these securities. The three levels of the fair value hierarchy are as follows:

Basis of Fair Value Measurement

Level 1 – Inputs to the valuation methodology are quoted prices available in active markets for identical instruments as of the reporting date. The types of financial instruments included in Level 1 include unrestricted securities, including equities and derivatives, listed in active markets.

Level 2 – Inputs to the valuation methodology are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date. The types of financial instruments in this category include less liquid and restricted securities listed in active markets, securities traded in other than active markets, government and agency securities and certain over-the-counter derivatives where the fair value is based on observable inputs.

Level 3 – Inputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are included in this category include investments in privately held entities and certain over-the-counter derivatives where the fair value is based on unobservable inputs.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Note 2 “Significant Accounting Policies” should be read in conjunction with the information outlined below.

The table below presents the valuation techniques and the nature of significant inputs generally used in determining the fair value of Level 2 and Level 3 Instruments.

Level 2 Instruments

Valuation Techniques and Significant Inputs

Equity and Fixed Income

The types of instruments that trade in markets that are not considered to be active but are valued based on quoted market prices, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency include commercial paper, most government agency obligations, most corporate debt securities, certain mortgage-backed securities, certain bank loans, less liquid publicly listed equities, certain state and municipal obligations, certain money market instruments and certain loan commitments.

Valuations of Level 2 Equity and Fixed Income instruments can be verified to quoted prices, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. Consideration is given to the nature of the quotations (e.g. indicative or firm) and the relationship of recent market activity to the prices provided from alternative pricing sources.

Derivative Contracts

Over-the-counter ("OTC") derivatives (both centrally cleared and bilateral) are valued using market transactions and other market evidence whenever possible, including market-based inputs to models, calibration to market-clearing transactions, broker or dealer quotations, or other alternative pricing sources with reasonable levels of price transparency. Where models are used, the selection of a particular model to value an OTC derivative depends upon the contractual terms of, and specific risks inherent in, the instrument, as well as the availability of pricing information in the market. The Company generally uses similar models to value similar instruments. Valuation models require a variety of inputs, including contractual terms, market prices, yield curves, credit curves, measures of volatility, voluntary and involuntary prepayment rates, loss severity rates and correlations of such inputs. For OTC derivatives that trade in liquid markets, model inputs can generally be verified and model selection does not involve significant management judgment. OTC derivatives are classified within Level 2 of the fair value hierarchy when significant inputs are corroborated by market evidence.

 

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Table of Contents

Level 3 Instruments

Valuation Techniques and Significant Inputs

Bank Loans, Corporate Debt, and Other Debt Obligations

Valuations are generally based on discounted cash flow techniques, for which the significant inputs are the amount and timing of expected future cash flows, market yields and recovery assumptions. The significant inputs are generally determined based on relative value analyses, which incorporate comparisons both to credit default swaps that reference the same underlying credit risk and to other debt instruments for the same issuer for which observable prices or broker quotes are available. Other valuation methodologies are used as appropriate including market comparables, transactions in similar instruments and recovery/liquidation analysis.

Equity

Recent third-party investments or pending transactions are considered to be the best evidence for any change in fair value. When these are not available, the following valuation methodologies are used, as appropriate and available: (i) Transactions in similar instruments; (ii) Discounted cash flow techniques; (iii) Third party appraisals; and (iv) Industry multiples and public comparables.

 

Evidence includes recent or pending reorganizations (for example, merger proposals, tender offers and debt restructurings) and significant changes in financial metrics, including: (i) Current financial performance as compared to projected performance; (ii) Capitalization rates and multiples; and (iii) Market yields implied by transactions of similar or related assets.

 

The table below presents the ranges of significant unobservable inputs used to value the Company’s Level 3 assets as of June 30, 2024 and December 31, 2023. These ranges represent the significant unobservable inputs that were used in the valuation of each type of instrument, but they do not represent a range of values for any one instrument. For example, the lowest discount rate in 1st Lien/Senior Secured Debt is appropriate for valuing that specific debt investment, but may not be appropriate for valuing any other debt investments in this asset class. Accordingly, the ranges of inputs presented below do not represent uncertainty in, or possible ranges of, fair value measurements of the Company’s Level 3 assets.

 

Level 3 Instruments

 

Fair Value(1)(2)

 

Valuation Techniques(3)

Significant Unobservable Inputs

Range of Significant Unobservable Inputs(4)

Weighted Average(5)

As of June 30, 2024

 

 

 

 

 

 

 

Bank Loans, Corporate Debt, and Other Debt Obligations

 

 

 

 

 

 

 

1st Lien/Senior Secured Debt

$

 

167,832

 

Discounted cash flows

Discount Rate

9.2% - 12.6%

10.8%

1st Lien/Last-Out Unitranche

 

 

35,766

 

Discounted cash flows

Discount Rate

8.9% - 11.2%

10.4%

As of December 31, 2023

 

 

 

 

 

 

 

Bank Loans, Corporate Debt, and Other Debt Obligations

 

 

 

 

 

 

 

1st Lien/Senior Secured Debt

 

$

81,003

 

Discounted cash flows

Discount Rate

9.7% - 11.7%

10.7%

1st Lien/Last-Out Unitranche

 

 

10,518

 

Discounted cash flows

Discount Rate

8.9% - 10.7%

9.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)
As of June 30, 2024, included within Level 3 Assets of $299,040, is an amount of $95,442 for which the Investment Adviser did not develop the unobservable inputs (examples include single source broker quotations, third party pricing, and prior transactions). The income approach was used in the determination of fair value for $203,598, or 68.6%, of Level 3 bank loans, corporate debt, and other debt obligations.
(2)
As of December 31, 2023, included within Level 3 Assets of $177,418, is an amount of $85,897 for which the Investment Adviser did not develop the unobservable inputs (examples include single source broker quotations, third party pricing, and prior transactions). The income approach was used in the determination of fair value for $91,521, or 51.6%, of Level 3 bank loans, corporate debt, and other debt obligations.
(3)
The fair value of any one instrument may be determined using multiple valuation techniques. For example, market comparable and discounted cash flows may be used together to determine fair value. Therefore, the Level 3 balance encompasses both of these techniques.
(4)
The range for an asset category consisting of a single investment, if any, is not meaningful and therefore has been excluded.
(5)
Weighted average for an asset category consisting of multiple investments is calculated by weighting the significant unobservable input by the relative fair value of the investment. Weighted average for an asset category consisting of a single investment represents the significant unobservable input used in the fair value of the investment.

The following is a summary of the Company’s assets categorized within the fair value hierarchy:

 

 

 

June 30, 2024

 

 

December 31, 2023

 

Assets

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

1st Lien/Senior Secured Debt

 

$

 

 

$

13,550

 

 

$

261,026

 

 

$

274,576

 

 

$

 

 

$

 

 

$

149,830

 

 

$

149,830

 

1st Lien/Last-Out Unitranche

 

 

 

 

 

 

 

 

35,766

 

 

 

35,766

 

 

 

 

 

 

 

 

 

27,588

 

 

 

27,588

 

Common Stock

 

 

 

 

 

 

 

 

2,248

 

 

 

2,248

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in Affiliated Money Market Fund

 

 

30,420

 

 

 

 

 

 

 

 

 

30,420

 

 

 

9,542

 

 

 

 

 

 

 

 

 

9,542

 

Total

 

$

30,420

 

 

$

13,550

 

 

$

299,040

 

 

$

343,010

 

 

$

9,542

 

 

$

 

 

$

177,418

 

 

$

186,960

 

 

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Table of Contents

The below table presents a summary of changes in fair value of Level 3 assets by investment type:

 

Assets

Beginning
Balance

 

 

Purchases(1)

 

 

Net
Realized
Gain (Loss)

 

 

Net Change in
Unrealized
Appreciation
(Depreciation)

 

 

Sales and
Settlements
(1)

 

 

Net
Amortization
of Premium/
Discount

 

 

Transfers
In
(2)

 

 

Transfers
Out
(2)

 

 

Ending Balance

 

 

Net Change in
Unrealized
Appreciation
(Depreciation)
for assets still
held

 

For the Six Months Ended June 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1st Lien/Senior Secured Debt

$

149,830

 

 

$

114,462

 

 

$

(1

)

 

$

1,139

 

 

$

(4,828

)

 

$

424

 

 

$

 

 

$

 

 

$

261,026

 

 

$

1,158

 

1st Lien/Last-Out Unitranche

 

27,588

 

 

 

8,178

 

 

 

 

 

 

(40

)

 

 

 

 

 

40

 

 

 

 

 

 

 

 

 

35,766

 

 

 

(40

)

Common Stock

 

 

 

 

2,248

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,248

 

 

 

 

Total assets

$

177,418

 

 

$

124,888

 

 

$

(1

)

 

$

1,099

 

 

$

(4,828

)

 

$

464

 

 

$

 

 

$

 

 

$

299,040

 

 

$

1,118

 

For the Six Months Ended June 30, 2023

 

1st Lien/Senior
   Secured Debt

$

17,352

 

 

$

24,783

 

 

$

 

 

$

(60

)

 

$

(123

)

 

$

71

 

 

$

 

 

$

 

 

$

42,023

 

 

$

(60

)

Total assets

$

17,352

 

 

$

24,783

 

 

$

 

 

$

(60

)

 

$

(123

)

 

$

71

 

 

$

 

 

$

 

 

$

42,023

 

 

$

(60

)

 

(1)
Purchases may include PIK, securities received in corporate actions and restructurings. Sales and Settlements may include securities delivered in corporate actions and restructuring of investments.
(2)
Transfers in (out) of Level 3, if any, are due to a decrease (increase) in the quantity and reliability of broker quotes obtained by the Investment Adviser.

Debt Not Carried at Fair Value

The fair value of the Company’s debt, which would have been categorized as Level 3 within the fair value hierarchy as of June 30, 2024 and December 31, 2023, approximates its carrying value because the Credit Facility has variable interest based on selected short term rates.

6. DEBT

 

On October 6, 2022, the Initial Member approved the application of the reduced asset coverage requirements in Section 61(a)(2) of the Investment Company Act to the Company and such election became effective the following day. As a result of this approval, the Company is currently allowed to borrow amounts such that its asset coverage ratio, as defined in the Investment Company Act, is at least 150% after such borrowing (if certain requirements are met). As of June 30, 2024 and December 31, 2023, the Company’s asset coverage ratio based on the aggregate amount outstanding of senior securities was 316% and 1,053%.

 

The Company's outstanding debt was as follows:

 

 

 

June 30, 2024

 

 

December 31, 2023

 

 

 

Aggregate
Borrowing
Amount
Committed

 

 

Amount
Available

 

 

Carrying
Value

 

 

Aggregate
Borrowing
Amount
Committed

 

 

Amount
Available

 

 

Carrying
Value

 

Credit Facility(1)

 

$

250,000

 

 

$

136,400

 

 

$

113,600

 

 

$

250,000

 

 

$

232,000

 

 

$

18,000

 

Total debt

 

$

250,000

 

 

$

136,400

 

 

$

113,600

 

 

$

250,000

 

 

$

232,000

 

 

$

18,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)
Provides, under certain circumstances, a total borrowing capacity of $750,000.


The weighted average interest rate of the aggregate borrowings outstanding for the six months ended June 30, 2024 and for the year ended December 31, 2023 was 8.28% and 8.28%, respectively. The weighted average debt of the aggregate borrowings outstanding for the six months ended June 30, 2024 and for the year ended December 31, 2023 was $55,763 and $5,062, respectively.

Credit Facility

SPV entered into the Credit Facility on February 10, 2023 with Ally Bank (“Ally”) as administrative agent and collateral agent. State Street Bank and Trust Company serves as collateral custodian and securities intermediary. The Company serves as collateral manager under the Credit Facility.

Advances under the Credit Facility bear interest (at SPV’s election) at a per annum rate equal to either (x) Daily Simple SOFR (as defined in the Credit Facility) or (y) Term SOFR (as defined in the Credit Facility) with an Available Tenor (as defined in the Credit Facility) of either one month or three months. The applicable spread is 2.75% per annum. SPV paid a non-usage fee of 0.50% per annum for the first three months on the average daily unused amount of the financing commitments. Thereafter, SPV pays between 0.50% and 1.00% per annum, depending on the unused amount of the financing commitments, on the average daily unused amount of the financing commitments.

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Table of Contents

The Credit Facility is drawable in USD. As of June 30, 2024, the total commitments under the Credit Facility were $250,000. The Credit Facility also has an accordion feature, subject to the satisfaction of various conditions, which could bring total commitments under the Credit Facility to $750,000. Proceeds from borrowings under the Credit Facility may be used to acquire portfolio loans by SPV, fund unfunded commitments of SPV with respect to loans, make distributions to the Company or pay related expenses. All amounts outstanding under the Credit Facility must be repaid by February 9, 2028.

SPV’s obligations to the lenders under the Credit Facility are secured by a first priority security interest in all of SPV’s portfolio of investments. The obligations of SPV under the Credit Facility are non-recourse to the Company, and the Company’s exposure under the Credit Facility is limited to the value of the Company’s investment in SPV.

In connection with the Credit Facility, SPV and the Company have made certain customary representations and warranties and are required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. The Credit Facility contains customary events of default for similar financing transactions, including if a change of control of SPV occurs or if the Company is no longer the collateral manager of SPV. Upon the occurrence and during the continuation of an event of default, Ally may declare the outstanding advances and all other obligations under the Credit Facility immediately due and payable. As of June 30, 2024, SPV and the Company were in compliance with these covenants.

Costs of $4,241 were incurred in connection with obtaining the Credit Facility, which have been recorded as deferred financing costs on the Consolidated Statements of Financial Condition and are being amortized over the life of the Credit Facility using the straight-line method. As of June 30, 2024 and December 31, 2023, outstanding deferred financing costs were $3,078 and $2,963.

The below table presents the summary information of the Credit Facility:

 

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

 

June 30, 2024

 

 

June 30, 2023

 

 

June 30, 2024

 

 

June 30, 2023

 

 

Borrowing interest expense

 

$

1,777

 

 

$

 

 

$

2,297

 

 

$

 

 

Facility fees

 

 

392

 

 

 

497

 

 

 

974

 

 

 

670

 

 

Amortization of financing costs

 

 

213

 

 

 

179

 

 

 

521

 

 

 

278

 

 

Total

 

$

2,382

 

 

$

676

 

 

$

3,792

 

 

$

948

 

 

Weighted average interest rate

 

 

8.23

%

 

 

0.00

%

 

 

8.28

%

 

 

0.00

%

 

 Average outstanding balance

 

$

86,762

 

 

$

 

*

$

55,763

 

 

$

 

*

* Average outstanding debt balance was calculated beginning on February 10, 2023, the date on which SPV entered into the Credit Facility.

7. COMMITMENTS AND CONTINGENCIES

Capital Commitments

The Company had aggregate capital commitments and undrawn capital commitments from investors as follows:

 

 

 

June 30, 2024

 

 

December 31, 2023

 

 

 

Capital
Commitments

 

 

Unfunded
Capital
Commitments

 

 

% of Capital
Commitments
Funded

 

 

Capital
Commitments

 

 

Unfunded
Capital
Commitments

 

 

% of Capital
Commitments
Funded

 

Common Units

 

$

750,010

 

 

$

517,500

 

 

 

31

%

 

$

750,010

 

 

$

577,500

 

 

 

23

%

 

Portfolio Company Commitments

The Company may enter into investment commitments through executed credit agreements or commitment letters. In many circumstances for executed commitment letters, borrower acceptance and final terms are subject to transaction-related contingencies. As of June 30, 2024, the Company believed that it had adequate financial resources to satisfy its unfunded commitments. The Company had the following unfunded commitments by investment types:

 

25


 

 

Unfunded Commitment Balances

 

 

 

June 30, 2024

 

 

December 31, 2023

 

1st Lien/Senior Secured Debt

 

 

 

 

 

 

ABC Investment Holdco Inc. (dba ABC Plumbing)

 

$

4,332

 

 

$

 

Admiral Buyer, Inc. (dba Fidelity Payment Services)

 

 

1,171

 

 

 

 

AI Titan Parent, Inc.

 

 

7,709

 

 

 

 

AQ Sunshine, Inc. (dba Relation Insurance)

 

 

2,638

 

 

 

3,383

 

Arrow Buyer, Inc. (dba Archer Technologies)

 

 

487

 

 

 

679

 

Artifact Bidco, Inc. (dba Avetta)

 

 

14,850

 

 

 

 

ASM Buyer, Inc.

 

 

4,878

 

 

 

4,878

 

Blast Bidco Inc. (dba Bazooka Candy Brands)

 

 

522

 

 

522

 

Charger Debt Merger Sub, LLC (dba Classic Collision)

 

 

5,904

 

 

 

CI (Quercus) Intermediate Holdings, LLC (dba SavATree)

 

 

3,958

 

 

 

Circustrix Holdings, LLC (dba SkyZone)

 

 

586

 

 

1,256

 

Crewline Buyer, Inc. (dba New Relic)

 

 

725

 

 

725

 

DFS Holding Company, Inc.

 

 

648

 

 

648

 

Formulations Parent Corporation (dba Chase Corp)

 

 

835

 

 

835

 

Fullsteam Operations LLC

 

 

10,156

 

 

3,821

 

GPS Phoenix Buyer, Inc. (dba Guidepoint)

 

 

2,935

 

 

2,935

 

Harrington Industrial Plastics, LLC

 

 

1,709

 

 

336

 

Highfive Dental Holdco, LLC

 

 

3,725

 

 

3,725

 

Ncontracts, LLC

 

 

1,644

 

 

1,973

 

NCWS Intermediate, Inc. (dba National Carwash Solutions)

 

 

2,390

 

 

 

Onyx CenterSource, Inc.

 

 

310

 

 

310

 

Project Accelerate Parent, LLC (dba ABC Fitness)

 

 

625

 

 

 

PT Intermediate Holdings III, LLC (dba Parts Town)

 

 

1,096

 

 

 

Recorded Books Inc. (dba RBMedia)

 

 

1,136

 

 

471

 

Rubrik, Inc.

 

 

522

 

 

1,102

 

Singlewire Software, LLC

 

 

1,438

 

 

1,438

 

Sunshine Cadence HoldCo, LLC (dba Cadence Education)

 

 

4,385

 

 

 

Superior Environmental Solutions

 

 

2,212

 

 

1,217

 

TM Restaurant Group LLC

 

 

4,286

 

 

4,286

 

United Flow Technologies Intermediate Holdco II, LLC

 

 

8,861

 

 

 

UP Acquisition Corp. (dba Unified Power)

 

 

794

 

 

794

 

USA DeBusk, LLC

 

 

1,423

 

 

 

Valet Waste Holdings, Inc. (dba Valet Living)

 

 

1,849

 

 

 

VASA Fitness Buyer, Inc.

 

 

1,204

 

 

1,685

 

VisionSafe Holdings, Inc

 

 

509

 

 

 

Spotless Brands, LLC

 

 

 

Groundworks, LLC

 

 

 

236

 

Total 1st Lien/Senior Secured Debt

 

$

102,452

 

 

$

37,255

 

1st Lien/Last-Out Unitranche

 

 

 

 

 

 

EIP Consolidated, LLC (dba Everest Infrastructure)

 

$

2,316

 

 

$

3,745

 

K2 Towers III, LLC

 

 

1,317

 

 

 

2,607

 

Skyway Towers Intermediate LLC

 

 

2,036

 

 

 

2,305

 

Tarpon Towers II LLC

 

 

1,694

 

 

 

 

Thor FinanceCo LLC (dba Harmoni Towers)

 

 

3,333

 

 

 

3,778

 

Towerco IV Holdings, LLC

 

 

1,705

 

 

 

3,194

 

Total 1st Lien/Last-Out Unitranche

 

$

12,401

 

 

$

15,629

 

Total

 

$

114,853

 

 

$

52,884

 

 

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.

8. MEMBERS’ CAPITAL

Capital Drawdowns

The following table summarizes the total Units issued and proceeds related to capital drawdowns:

 

Unit Issue Date

 

Units Issued

 

 

Proceeds Received

 

For the Six Months Ended June 30, 2024

 

 

 

 

 

 

May 24, 2024

 

 

1,134,153

 

 

$

22,500

 

June 17, 2024

 

 

1,878,400

 

 

$

37,500

 

Total capital drawdowns

 

 

3,012,553

 

 

$

60,000

 

There were no capital drawdowns for the six months ended June 30, 2023.

26


Table of Contents

Distributions

The Company has a voluntary distribution reinvestment plan (the "DRIP") that provides for the automatic reinvestment of all cash distributions declared by the Board of Directors unless a Unitholder elects to “opt out” of the plan. As a result, if the Board of Directors declares a cash distribution, then the Unitholders who have not “opted out” of the DRIP will have their cash distributions automatically reinvested by the plan administrator, as agent for the Unitholders in administering the DRIP, in additional Units of the same class of Units, rather than receiving the cash distribution. Participation in the DRIP is completely voluntary. The company will use newly issued Units to implement the DRIP. The number of Units to be issued to a Unitholder is determined by dividing the total dollar amount of the distribution payable to such Unitholder, net of any applicable withholding tax, by the then-current NAV per Unit. For purposes of this calculation, the NAV per Unit may be based on the NAV per Unit calculated at the end of the most recent calendar month prior to the date of the applicable distribution, subject to adjustments for material changes and to the limitations of the Investment Company Act. The Company may terminate the DRIP upon notice in writing to each participant at least 60 days prior to any record date for the payment of any distribution by the Company. The Initial Member has opted out of the DRIP.

The following table summarizes the distributions declared on the Units and Units distributed pursuant to the DRIP to unitholders who had not opted out of the DRIP:

 

Date Declared

 

Record Date

 

Payment Date

 

Amount Per Unit

 

 

Units

 

For the Six Months Ended June 30, 2024

 

 

 

 

 

 

 

 

February 27, 2024

 

April 2, 2024

 

April 29, 2024

 

$

0.43

 

(1)

 

190,814

 

May 1, 2024

 

July 2, 2024

 

July 30, 2024

 

$

0.35

 

 

 

211,833

 

(1)
$0.05 is considered capital gain distribution.

 

There were no distributions declared on the Company’s common units for the six months ended June 30, 2023.

 

9. EARNINGS (LOSS) PER UNIT

The following information sets forth the computation of basic and diluted earnings (loss) per Unit:

 

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

 

June 30, 2024

 

 

June 30, 2023

 

Net increase (decrease) in Members' Capital from operations

 

$

4,453

 

 

$

(152

)

 

$

9,087

 

 

$

382

 

Weighted average units outstanding

 

 

9,905,503

 

 

 

4,955,147

 

 

 

9,417,884

 

 

 

4,955,147

 

Basic and diluted earnings (loss) per units

 

$

0.45

 

 

$

(0.03

)

 

$

0.96

 

 

$

0.08

 

 

Diluted earnings (loss) per Unit equal basic earnings per Unit because there were no Unit equivalents outstanding during the periods presented.

10. FINANCIAL HIGHLIGHTS

The below table presents the schedule of financial highlights of the Company:

 

 

For the Six Months Ended

 

 

For the Six Months Ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

Per Unit Data:(1)

 

 

 

 

 

 

Members' Capital, beginning of period

 

$

19.61

 

 

$

19.51

 

Net investment income (loss)

 

 

0.85

 

 

 

0.09

 

Net realized and unrealized gains (losses)(2)

 

 

0.09

 

 

 

(0.02

)

Net increase (decrease) in Members' Capital from operations(2)

 

$

0.94

 

 

$

0.07

 

Distributions from net investment income

 

 

(0.43

)

 

 

 

Total increase (decrease) in Members' Capital

 

$

0.51

 

 

$

0.07

 

Members' Capital, end of period

 

$

20.12

 

 

$

19.58

 

Units outstanding, end of period

 

 

12,214,181

 

 

 

4,955,147

 

Weighted average units outstanding

 

 

9,417,884

 

 

 

4,955,147

 

Total return based on Members' Capital (3)

 

 

4.79

%

 

 

0.36

%

Supplemental Data/Ratio(4):

 

 

 

 

 

 

Members' Capital, end of period.

 

$

245,788

 

 

$

97,042

 

Ratio of net expenses to average Members' Capital

 

 

6.72

%

 

 

5.61

%

Ratio of net expenses before Management fee waiver to average Members' Capital

 

 

6.72

%

 

 

6.20

%

Ratio of net expenses (without incentive fees and interest and other debt expenses)
   to average Members' Capital

 

 

2.15

%

 

 

3.64

%

Ratio of interest and other debt expenses to average Members' Capital

 

 

4.05

%

 

 

1.97

%

Ratio of incentive fees to average Members' Capital

 

 

0.52

%

 

 

%

Ratio of total expenses to average Members' Capital

 

 

6.72

%

 

 

6.20

%

Ratio of net investment income to average Members' Capital

 

 

8.58

%

 

 

0.92

%

Portfolio turnover

 

 

2

%

 

 

%

 

27


 

(1)
The per Unit data was derived by using the weighted average Units outstanding during the applicable period, except for distributions recorded, which reflects the actual amount of distribution recorded per Unit for the applicable period.
(2)
The amount shown may not correspond for the period as it includes the effect of the timing of capital drawdowns.
(3)
Calculated as the change in members' capital per Unit during the period plus distributions recorded per Unit, divided by the beginning members' capital per Unit.
(4)
Ratios are annualized, except for, as applicable, organization costs.

11. SUBSEQUENT EVENTS

Subsequent events after the date of the Consolidated Statements of Financial Condition have been evaluated through the date the consolidated financial statements were issued. Other than the item discussed below, the Company has concluded that there is no impact requiring adjustment or disclosure in the consolidated financial statements.

On June 20, 2024, the Company delivered a capital drawdown notice to its investors relating to the issuance and sale of approximately 1.9 million shares of common units for an aggregate offering price of approximately $37,500. The units were issued on July 5, 2024.

On August 1, 2024, the Company delivered a capital drawdown notice to its investors relating to the issuance and sale of approximately 3.7 million shares of common units for an aggregate offering price of approximately $75,000. The units will be issued on or about August 9, 2024.

The Company will pay a distribution equal to an amount up to the Company’s taxable earnings per unit, including net investment income (if positive) for the period July1, 2024 through September 30, 2024, payable on or about November 1, 2024 to Unitholders of record as of October 2, 2024.

 

 

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Table of Contents

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

 

The following discussion and other parts of this report contain forward-looking information that involves risks and uncertainties. References to “we,” “us,” “our,” and the “Company,” mean Phillip Street Middle Market Lending Fund LLC or Phillip Street Middle Market Lending Fund LLC, together with its consolidated subsidiaries, as the context may require. The terms “GSAM,” “Goldman Sachs Asset Management,”, our “Adviser” or our “Investment Adviser” refer to Goldman Sachs Asset Management, L.P., a Delaware limited partnership. The term “GS Group Inc.” refers to The Goldman Sachs Group, Inc. “GS & Co.” refers to Goldman Sachs & Co. LLC and its predecessors. The term “Goldman Sachs” refers to GS Group Inc., together with GS & Co., GSAM and its other subsidiaries and affiliates. The discussion and analysis contained in this section refer to our financial condition, results of operations and cash flows. The information contained in this section should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this report. Please see “Cautionary Statement Regarding Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with this discussion and analysis. Our actual results could differ materially from those anticipated by such forward-looking information due to factors discussed under “Cautionary Statement Regarding Forward-Looking Statements” appearing elsewhere in this report.

OVERVIEW

We are a specialty finance company focused on lending to middle-market companies. We are a closed-end management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the "Investment Company Act"). In addition, we have elected to be treated as a regulated investment company ("RIC"), and we expect to qualify annually for tax treatment, as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with our taxable year ended December 31, 2022. From our formation in 2022 through June 30, 2024, we have originated approximately $447.7 million in aggregate principal amount of debt investments prior to any subsequent exits and repayments. We seek to generate current income and, to a lesser extent, capital appreciation primarily through direct originations of secured debt, including first lien, unitranche debt, including last-out portions of such loans, and second lien debt, and unsecured debt, including mezzanine debt, as well as through select equity investments.

“Unitranche” loans are first lien loans that extend deeper in a borrower’s capital structure than traditional first lien debt and may provide for a waterfall of cash flow priority between different lenders in such loan. In a number of instances, we may find another lender to provide the “first-out” portion of a unitranche loan while we retain the “last-out” portion of such loan, in which case, the “first-out” portion of the loan would generally receive priority with respect to the payment of principal, interest and any other amounts due thereunder as compared to the “last-out” portion that we would continue to hold. In exchange for taking greater risk of loss, the “last-out” portion generally earns a higher interest rate than the “first-out” portion of the loan. We use the term “mezzanine” to refer to debt that ranks senior in right of payment only to a borrower’s equity securities and ranks junior in right of payment to all of such borrower’s other indebtedness. We may make multiple investments in the same portfolio company.

We may also originate or invest in “covenant-lite” loans, which are loans with fewer financial maintenance covenants than other obligations, or no financial maintenance covenants. Such covenant-lite loans may not include terms that allow the lender to monitor the performance of the borrower or to declare a default if certain criteria are breached. These flexible covenants (or the absence of covenants) could permit borrowers to experience a significant downturn in their results of operations without triggering any default that would permit holders of their debt (such as us) to accelerate indebtedness or negotiate terms and pricing. Accordingly, to the extent we invest in “covenant-lite” loans, we may have fewer rights against a borrower and may have a greater risk of loss on such investments as compared to investments in or exposure to loans with financial maintenance covenants. Therefore, our investments may result in an above-average amount of risk and volatility or loss of principal. We also may invest in other assets, including cash equivalents, U.S. government securities and other short-term investments, as described above. These investments entail additional risks that could adversely affect our investment returns.

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Table of Contents

We expect to invest, under normal circumstances, at least 90% of our net assets (plus any borrowings for investment purposes) in private middle-market credit obligations and related instruments. We define “credit obligations and related instruments” for this purpose as any fixed-income instrument, including loans to, and bonds, preferred stock of and other instruments, portfolio companies that provide exposure to fixed-income instruments. These other instruments may not by definition be fixed-income instruments, but structurally have the underlying investment risk and return profile and income-payment profile of fixed-income instruments. “Middle market” is used to refer to companies with between $5 million and $200 million of annual EBITDA, adjusted for certain one-time and non-recurring expenses that are outside the ordinary operations of these companies, along with companies that we determine, based on other metrics, including recurring revenue or tower cash flow, are middle market companies. Following such time that the aggregate amount of capital contributions to us made by Unitholders equals or exceeds $450 million, but subject to market conditions and the availability of suitable investment opportunities, we generally expect to target allocations among private middle-market credit obligations and related instruments in the following ratios: (i) 45% to companies with between $5 million and $25 million of EBITDA, and (ii) 55% to companies with between $25 million and $75 million of EBITDA, in each case adjusted for certain one-time and non-recurring expenses that are outside the ordinary operations of these companies. Notwithstanding the foregoing, we may invest on an opportunistic basis in credit obligations of private middle-market companies with EBITDA outside of the foregoing ranges, including credit obligations of companies that we believe are middle market companies based on metrics such as recurring revenue and tower cash flow, as opposed to EBITDA. In addition, as a result of fluctuations in the asset value of one asset relative to another asset, private middle-market credit obligations and related instruments may not reflect the foregoing targets or may represent less than 90% of our net assets (plus any borrowings for investment purposes) at any time. However, we may not invest, under normal circumstances, more than 20% of our net assets (plus any borrowings for investment purposes) in securities and other instruments that are not private middle-market credit obligations. In addition, we are subject to the investment guidelines, which are further described in “Item 1. Business—Investment Criteria.”

We expect to invest in middle-market companies domiciled in the United States. We may from time to time invest opportunistically in large U.S. companies, stressed or distressed debt, structured products, private equity or other opportunities, subject to the investment guidelines and the limits imposed by the Investment Company Act.

While we expect our investment program to focus primarily on debt investments, our investments may include equity or equity features, such as a direct investment in the equity or convertible securities of a portfolio company or warrants or options to buy a minority interest in a portfolio company. Any warrants we may receive with debt securities will generally require only a nominal cost to exercise, so as a portfolio company appreciates in value, we may achieve additional investment return from these equity investments. We may structure the warrants to provide provisions protecting our rights as a minority-interest holder, as well as puts, or rights to sell such securities back to the portfolio company, upon the occurrence of specified events. In many cases, we may also obtain registration rights in connection with these equity investments, which may include demand and “piggyback” registration rights (which would allow us to have equity securities from an investment in a portfolio company registered for public offering in connection with a planned registration of such equity securities by the portfolio company).

For a discussion of the competitive landscape we face, please see “Item 1A. Risk Factors—Competition—We operate in a highly competitive market for investment opportunities” and “Item 1. Business—Competitive Advantages” in our annual report on Form 10-K for the year ended December 31, 2023.

KEY COMPONENTS OF OPERATIONS

Investments

Our level of investment activity can and does vary substantially from period to period depending on many factors, including the amount of debt and equity capital available to middle-market companies, the level of merger and acquisition activity for such companies, the general economic environment, the amount of capital we have available to us and the competitive environment for the type of investments we make.

As a BDC, we generally will be prohibited from acquiring assets other than qualifying assets unless, after giving effect to any acquisition, at least 70% of our total assets are qualifying assets. Qualifying assets generally include securities of eligible portfolio companies, cash, cash equivalents, U.S. government securities and high-quality debt instruments maturing in one year or less from the time of investment. Under the Investment Company Act and the rules thereunder, “eligible portfolio companies” include (i) private U.S. operating companies, (ii) public U.S. operating companies whose securities are not listed on a national securities exchange (e.g., the New York Stock Exchange) or registered under the Exchange Act, and (iii) public U.S. operating companies having a market capitalization of less than $250 million. Public U.S. operating companies whose securities are quoted on the over-the-counter bulletin board and through OTC Markets are not listed on a national securities exchange and therefore are eligible portfolio companies.

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Table of Contents

Revenues

We generate revenues in the form of interest income on debt investments and, to a lesser extent, capital gains and distributions, if any, on equity securities that we may acquire in portfolio companies. Some of our investments may provide for deferred interest payments or payment-in-kind (“PIK”) income. The principal amount of the debt investments and any accrued but unpaid interest generally becomes due at the maturity date.

We generate revenues primarily through receipt of interest income from the investments we hold. In addition, we may generate revenue in the form of commitment, origination, structuring, syndication, exit fees or diligence fees, fees for providing managerial assistance and consulting fees. Portfolio company fees (directors’ fees, consulting fees, administrative fees, tax advisory fees and other similar compensation) will be paid to us, unless, to the extent required by applicable law or exemptive relief, if any, therefrom, we receive our allocable portion of such fees when invested in the same portfolio company as other client accounts managed by our Investment Adviser (collectively with the Company, the “Accounts”), which other Accounts could receive their allocable portion of such fee. We do not expect to receive material fee income as it is not our principal investment strategy. We record contractual prepayment premiums on loans and debt securities as interest income.

Dividend income on preferred equity investments is recorded on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity investments is recorded on the record date for private portfolio companies and on the ex-dividend date for publicly traded portfolio companies. Interest and dividend income are presented net of withholding tax, if any.

Expenses

Our primary operating expenses include the payment of the management fee (the “Management Fee”) and the incentive fee (the “Incentive Fee”) to our Investment Adviser, legal and professional fees, interest and other debt expenses and other operating and overhead related expenses. The Management Fee and Incentive Fee compensate our Investment Adviser for its work in identifying, evaluating, negotiating, closing and monitoring our investments. We bear all other expenses of our operations and transactions in accordance with the investment management and advisory agreement (the “Investment Management Agreement”) and administration agreement (the “Administration Agreement”), including:

our operational, offering and organizational expenses;
fees and expenses, including travel expenses, incurred by our Investment Adviser or payable to third parties related to our investments, including, among others, professional fees (including the fees and expenses of consultants and experts) and fees and expenses from evaluating, monitoring, researching and performing due diligence on investments and prospective investments;
interest, fees and other expenses payable on indebtedness for borrowed money (including through the issuance of notes and other evidence of indebtedness), other indebtedness, financings or extensions of credit, if any, incurred by us;
fees and expenses incurred by us in connection with membership in investment company organizations;
brokers’ commissions;
fees and expenses associated with calculating our NAV (including expenses of any independent valuation firm);
legal, auditing or accounting expenses;
taxes or governmental fees;
the fees and expenses of our administrator, transfer agent or sub-transfer agent;
the cost of preparing unit certificates or any other expenses, including clerical expenses of issue or repurchase of our common units of our limited liability company interests (the "Units");
the expenses of and fees for registering or qualifying our Units for sale and of maintaining our registration or qualifying and registering us as a broker or a dealer;
the fees and expenses of our directors who are not affiliated with our Investment Adviser;
the cost of preparing and distributing reports, proxy statements and notices to our Unitholders, the SEC and other regulatory authorities;
costs of holding Unitholder meetings;
the fees or disbursements of custodians of our assets, including expenses incurred in the performance of any obligations enumerated by limited liability company agreement or other organizational documents insofar as they govern agreements with any such custodian;
insurance premiums; and
costs incurred in connection with any claim, litigation, arbitration, mediation, government investigation or dispute in connection with our business and the amount of any judgment or settlement paid in connection therewith, or the enforcement of our rights against any person and indemnification or contribution expenses payable by us to any person and other extraordinary expenses not incurred in the ordinary course of our business.

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Table of Contents

 

Our Investment Adviser will not be required to pay expenses of activities which are primarily intended to result in sales of Units.

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

Leverage

We expect from time to time to borrow funds for a variety of purposes, subject to the limitations of the Investment Company Act, including to bridge fundings for investments in advance of drawdowns, as part of our investment strategy and to meet other short-term liquidity needs, including to pay the Management Fee. Sources of leverage include the issuance of senior securities (including preferred stock) and other credit facilities (secured by investments and/or pledges of undrawn commitments). Our secured credit facility (the “Credit Facility”) with Ally Bank ("Ally"), as administrative agent, allows us to borrow money and lever our investment portfolio, subject to the limitations of the Investment Company Act, with the objective of increasing our yield. This is known as “leverage” and could increase or decrease returns to our Unitholders. The use of leverage involves significant risks. We are permitted to borrow amounts such that our asset coverage ratio, as defined in the Investment Company Act, is at least 150% after such borrowing (if certain requirements are met).

 

Certain trading practices and investments, such as reverse repurchase agreements, may be considered borrowings or involve leverage and thus may be subject to Investment Company Act restrictions. Short-term credits necessary for the settlement of securities transactions and arrangements with respect to securities lending will not be considered borrowings for these purposes. Practices and investments that may involve leverage but are not considered borrowings are not subject to the Investment Company Act’s asset coverage requirement. The amount of leverage that we employ will depend on the assessment by our Investment Adviser and our board of directors (the “Board of Directors” or the “Board”) of market conditions and other factors at the time of any proposed borrowing.

PORTFOLIO AND INVESTMENT ACTIVITY

Our portfolio (excluding investments in money market funds, if any) consisted of the following:

 

 

 

As of

 

 

 

 

June 30, 2024

 

 

December 31, 2023

 

 

 

 

Amortized Cost

 

 

Fair Value

 

 

Amortized Cost

 

 

Fair Value

 

 

 

 

($ in millions)

 

 

($ in millions)

 

 

First Lien/Senior Secured Debt

 

$

273.11

 

 

$

274.57

 

 

$

149.45

 

 

$

149.83

 

 

First Lien/Last-Out Unitranche

 

 

35.76

 

 

 

35.77

 

 

 

27.54

 

 

 

27.59

 

 

Common Stock

 

 

2.25

 

 

 

2.25

 

 

 

 

 

 

 

 

Total investments

 

$

311.12

 

 

$

312.59

 

 

$

176.99

 

 

$

177.42

 

 

 

The weighted average yield by asset type of our portfolio (excluding investments in money market funds, if any), at amortized cost and fair value, was as follows:

 

 

 

As of

 

 

 

June 30, 2024

 

 

December 31, 2023

 

 

 

Amortized Cost

 

 

Fair Value

 

 

Amortized Cost

 

 

Fair Value

 

Weighted Average Yield(1)

 

 

 

 

 

 

 

 

 

 

 

 

First Lien/Senior Secured Debt(2)

 

 

11.9

%

 

 

11.7

%

 

 

12.7

%

 

 

12.7

%

First Lien/Last-Out Unitranche(2)(3)

 

 

12.0

%

 

 

12.0

%

 

 

12.1

%

 

 

12.1

%

Common Stock(4)

 

 

0.0

%

 

 

0.0

%

 

 

0.0

%

 

 

0.0

%

Total Portfolio

 

 

11.8

%

 

 

11.7

%

 

 

12.6

%

 

 

12.6

%

 

(1)
The weighted average yield of our portfolio does not represent the total return to our Unitholders.
(2)
Computed based on (a) the annual actual interest rate or yield earned plus amortization of fees and discounts on the performing debt and other income producing investments as of the reporting date, divided by (b) the total investments (including investments on non-accrual and non-income producing investments) at amortized cost or fair value.
(3)
The calculation includes incremental yield earned on the "last-out" portion of the unitranche loan investments.
(4)
Computed based on (a) the stated coupon rate, if any, for each income-producing investment, divided by (b) the total investments (including investments on non-accrual and non-income producing investments) at amortized cost or fair value.

 

 

 

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Table of Contents

The following table presents certain selected information regarding our investment portfolio (excluding investments in money market funds, if any):

 

 

 

 

As of

 

 

 

 

June 30, 2024

 

 

December 31, 2023

 

Number of portfolio companies

 

 

 

46

 

 

 

29

 

Percentage of performing debt bearing a floating rate(1)

 

 

 

100.0

%

 

 

100.0

%

Percentage of performing debt bearing a fixed rate(1)(2)

 

 

 

%

 

 

%

Weighted average leverage (net debt/EBITDA)(3)

 

 

 

5.1

x

 

 

4.9

x

Weighted average interest coverage(3)

 

 

 

1.7

x

 

 

1.7

x

Median EBITDA(3)

 

$

85.22 million

 

$

56.78 million

 

 

(1)

Measured on a fair value basis. Excludes investments, if any, placed on non-accrual.

(2)

Includes income producing preferred stock investments, if applicable.

(3)

For a particular portfolio company, we calculate the level of contractual indebtedness net of cash (“net debt”) owed by the portfolio company and compare that amount to measures of cash flow available to service the net debt. To calculate net debt, we include debt that is both senior and pari passu to the tranche of debt owned by us but exclude debt that is legally and contractually subordinated in ranking to the debt owned by us. We believe this calculation method assists in describing the risk of our portfolio investments, as it takes into consideration contractual rights of repayment of the tranche of debt owned by us relative to other senior and junior creditors of a portfolio company. We typically calculate cash flow available for debt service at a portfolio company by taking EBITDA for the trailing twelve-month period. Weighted average net debt to EBITDA is weighted based on the fair value of our debt investments, excluding investments where net debt to EBITDA may not be the appropriate measure of credit risk, such as cash collateralized loans and investments that are underwritten and covenanted based on recurring revenue.

 

For a particular portfolio company, we also calculate the level of contractual interest expense owed by the portfolio company and compare that amount to EBITDA (“interest coverage ratio”). We believe this calculation method assists in describing the risk of our portfolio investments, as it takes into consideration contractual interest obligations of the portfolio company. Weighted average interest coverage is weighted based on the fair value of our performing debt investments, excluding investments where interest coverage may not be the appropriate measure of credit risk, such as cash collateralized loans and investments that are underwritten and covenanted based on recurring revenue.

 

Median EBITDA is based on our debt investments, excluding investments where net debt to EBITDA may not be the appropriate measure of credit risk, such as cash collateralized loans and investments that are underwritten and covenanted based on recurring revenue.

 

Portfolio company statistics are derived from the most recently available financial statements of each portfolio company as of the reported end date. Statistics of the portfolio companies have not been independently verified by us and may reflect a normalized or adjusted amount.

 

As of June 30, 2024 and December 31, 2023, investments where net debt to EBITDA may not be the appropriate measure of credit risk represented 24.09% and 35.7% of total debt investments at fair value.

Our Investment Adviser monitors, on an ongoing basis, the financial trends of each portfolio company to determine if it is meeting its respective business plan and to assess the appropriate course of action for each portfolio company. Our Investment Adviser has several methods of evaluating and monitoring the performance and fair value of our investments, which may include the following: (i) assessment of success in adhering to the portfolio company’s business plan and compliance with covenants; (ii) periodic or regular contact with portfolio company management and, if appropriate, the financial or strategic sponsor to discuss financial position, requirements and accomplishments; (iii) comparisons to our other portfolio companies in the industry, if any; (iv) attendance at and participation in Board meetings or presentations by portfolio companies; and (v) review of monthly and quarterly financial statements and financial projections of portfolio companies.

As part of the monitoring process, our Investment Adviser also employs an investment rating system to categorize our investments. In addition to various risk management and monitoring tools, our Investment Adviser grades the credit risk of all investments on a scale of 1 to 4 no less frequently than quarterly. This system is intended primarily to reflect the underlying risk of a portfolio investment relative to our initial cost basis in respect of such portfolio investment (i.e., at the time of origination or acquisition), although it may also take into account in certain circumstances the performance of the portfolio company’s business, the collateral coverage of the investment and other relevant factors. The grading system for our investments is as follows:

Grade 1 investments involve the least amount of risk to our initial cost basis. The trends and risk factors for this investment since origination or acquisition are generally favorable, which may include the performance of the portfolio company or a potential exit;

Grade 2 investments involve a level of risk to our initial cost basis that is similar to the risk to our initial cost basis at the time of origination or acquisition. This portfolio company is generally performing as expected and the risk factors to our ability to ultimately recoup the cost of our investment are neutral to favorable. All investments or acquired investments in new portfolio companies are initially assessed a grade of 2;

Grade 3 investments indicate that the risk to our ability to recoup the initial cost basis of such investment has increased materially since origination or acquisition, including as a result of factors such as declining performance and non-compliance with debt covenants; however, payments are generally not more than 120 days past due; and

Grade 4 investments indicate that the risk to our ability to recoup the initial cost basis of such investment has substantially increased since origination or acquisition, and the portfolio company likely has materially declining performance. For debt investments with an investment grade of 4, in most cases, most or all of the debt covenants are out of compliance and payments are substantially delinquent. For investments graded 4, it is anticipated that we will not recoup our initial cost basis and may realize a substantial loss of our initial cost basis upon exit.

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Table of Contents

Our Investment Adviser grades the investments in our portfolio at least each quarter and it is possible that the grade of a portfolio investment may be reduced or increased over time. For investments with a grade of 3 or 4, our Investment Adviser enhances its level of scrutiny over the monitoring of such portfolio company. The following table shows the composition of our portfolio (excluding investments in money market funds, if any) on the 1 to 4 grading scale:

 

 

As of

 

 

 

June 30, 2024

 

 

December 31, 2023

 

Investment Performance Rating

 

Fair Value

 

 

Percentage of
Total

 

 

Fair Value

 

 

Percentage of
Total

 

 

 

(in millions)

 

 

 

 

 

(in millions)

 

 

 

 

Grade 1

 

$

 

 

 

%

 

$

 

 

 

%

Grade 2

 

 

312.59

 

 

 

100.0

 

 

 

177.42

 

 

 

100.0

 

Grade 3

 

 

 

 

 

 

 

 

 

 

 

 

Grade 4

 

 

 

 

 

 

 

 

 

 

 

 

Total Investments

 

$

312.59

 

 

 

100.0

%

 

$

177.42

 

 

 

100.0

%

The following table shows the amortized cost of our performing and non-accrual investments (excluding investments in money market funds, if any):

 

 

As of

 

 

 

June 30, 2024

 

 

December 31, 2023

 

 

 

Amortized Cost

 

 

Percentage of
Total

 

 

Amortized Cost

 

 

Percentage of
Total

 

 

 

(in millions)

 

 

 

 

 

(in millions)

 

 

 

 

Performing

 

$

311.12

 

 

 

100.0

%

 

$

176.99

 

 

 

100.0

%

Non-accrual

 

 

 

 

 

 

 

 

 

 

 

 

Total Investments

 

$

311.12

 

 

 

100.0

%

 

$

176.99

 

 

 

100.0

%

 

Investments are placed on non-accrual status when it is probable that principal, interest or dividends will not be collected according to the contractual terms. Accrued interest or dividends generally are reversed when an investment is placed on non-accrual status. Interest or dividend payments received on non-accrual investments may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual investments are restored to accrual status when past due principal and interest or dividends are paid and, in management’s judgment, 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.

 

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Table of Contents

The following table shows our investment activity by investment type(1):

 

 

For the Three Months Ended

 

 

For the Three Months Ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

 

 

($ in millions)

 

Amount of investments committed at cost:

 

 

 

 

 

 

First Lien/Senior Secured Debt

 

$

147.57

 

 

$

43.98

 

First Lien/Last-Out Unitranche

 

 

 

 

 

 

Common Stock

 

 

2.25

 

 

 

 

Total

 

$

149.82

 

 

$

43.98

 

Proceeds from investments sold or repaid:

 

 

 

 

 

 

First Lien/Senior Secured Debt

 

$

0.69

 

 

$

0.06

 

Total

 

$

0.69

 

 

$

0.06

 

Net increase in portfolio

 

$

149.13

 

 

$

43.92

 

Number of new portfolio companies with new investment commitments

 

 

16

 

 

 

5

 

Total new investment commitment amount in new portfolio companies

 

$

146.98

 

 

$

43.98

 

Average new investment commitment amount in new portfolio companies

 

 

9.2

 

 

 

8.8

 

Number of existing portfolio companies with new investment commitments

 

 

7

 

 

 

 

Total new investment commitment amount in existing portfolio companies

 

$

2.84

 

 

$

 

Weighted average remaining term for new investment commitments (in years)(2)

 

 

6.2

 

 

 

6.2

 

Percentage of new debt investment commitments at floating interest rates

 

 

100.0

%

 

 

100.0

%

Percentage of new debt investment commitments at fixed interest rates(3)

 

 

%

 

 

%

Weighted average yield on new debt and income producing investment commitments(4)

 

 

10.8

%

 

 

12.9

%

Weighted average yield on new investment commitments(5)

 

 

10.6

%

 

 

12.9

%

Weighted average yield on debt and income producing investments sold or repaid(6)

 

 

11.6

%

 

 

12.3

%

Weighted average yield on investments sold or repaid(7)

 

 

11.6

%

 

 

12.3

%

 

(1)
New investment commitments are shown net of capitalized fees, expenses and original issue discount (“OID”) that occurred at the initial close. Figures for new investment commitments may also include positions originated during the period but not held at the reporting date. Figures for investments sold or repaid, excludes unfunded commitments that may have expired or otherwise been terminated without receipt of cash proceeds or other consideration.
(2)
Calculated as of the end of the relevant period and the maturity date of the individual investments.
(3)
May include preferred stock investments.
(4)
Computed based on (a) the annual actual interest rate on new debt and income producing investment commitments, divided by (b) the total new debt and income producing investment commitments. The calculation includes incremental yield earned on the “last-out” portion of the unitranche loan investments and excludes investments that are non-accrual. The annual actual interest rate used is as of the respective quarter end date when the investment activity occurred.
(5)
Computed based on (a) the annual actual interest rate on new investment commitments, divided by (b) the total new investment commitments (including investments on non-accrual and non-income producing investments). The calculation includes incremental yield earned on the “last-out” portion of the unitranche loan investments. The annual actual interest rate used is as of the respective quarter end date when the investment activity occurred.
(6)
Computed based on (a) the annual actual interest rate on debt and income producing investments sold or paid down, divided by (b) the total debt and income producing investments sold or paid down. The calculation includes incremental yield earned on the “last-out” portion of the unitranche loan investments and excludes prepayment premiums earned on exited investments and investments that are non-accrual.
(7)
Computed based on (a) the annual actual interest rate on investments sold or paid down, divided by (b) the total investments sold or paid down (including investments on non-accrual and non-income producing investments). The calculation includes incremental yield earned on the “last-out” portion of the unitranche loan investments and excludes prepayment premiums earned on exited investments.

 

RESULTS OF OPERATIONS

 

Our operating results were as follows:

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

 

June 30, 2024

 

 

June 30, 2023

 

 

 

($ in millions)

 

Total investment income

 

$

8.08

 

 

$

1.68

 

 

$

14.34

 

 

$

3.14

 

Net expenses

 

 

(3.72

)

 

 

(1.74

)

 

 

(6.30

)

 

 

(2.70

)

Net investment income (loss)

 

 

4.36

 

 

 

(0.06

)

 

 

8.04

 

 

 

0.44

 

Net realized gain (loss) on investments

 

 

 

(1)

 

 

 

 

 

(1)

 

 

Net unrealized appreciation (depreciation) on investments

 

 

0.10

 

 

 

(0.09

)

 

 

1.05

 

 

 

(0.06

)

Net realized and unrealized gains (losses)

 

 

0.10

 

 

 

(0.09

)

 

 

1.05

 

 

 

(0.06

)

Net increase (decrease) in net assets from operations

 

$

4.46

 

 

$

(0.15

)

 

$

9.09

 

 

$

0.38

 

 

(1) Amount rounds to less than $0.01.

 

Net increase in members’ capital from operations can vary from period to period as a result of various factors, including acquisitions, the level of new investment commitments, the recognition of realized gains and losses and changes in unrealized appreciation and depreciation in the investment portfolio.

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Table of Contents

Investment Income

Our investment income was as follows:

 

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

 

June 30, 2024

 

 

June 30, 2023

 

 

 

($ in millions)

 

Interest

 

$

7.78

 

 

$

0.99

 

 

$

13.82

 

 

$

1.65

 

Dividend income

 

 

0.17

 

 

 

0.68

 

 

 

0.26

 

 

 

1.47

 

Other income

 

 

0.13

 

 

 

0.01

 

 

 

0.26

 

 

 

0.02

 

Total investment income

 

$

8.08

 

 

$

1.68

 

 

$

14.34

 

 

$

3.14

 

 

 

Investment income for the three and six months ended June 30, 2024 was driven by our deployment of capital into income producing investments.

Expenses

Our expenses were as follows:

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

 

June 30, 2024

 

 

June 30, 2023

 

 

 

($ in millions)

 

Interest and other debt expenses

 

$

2.38

 

 

$

0.68

 

 

$

3.79

 

 

$

0.95

 

Incentive fees

 

 

0.23

 

 

 

 

 

 

0.49

 

 

 

 

Management fees

 

 

0.69

 

 

 

0.29

 

 

 

1.26

 

 

 

0.58

 

Directors’ fees

 

 

0.03

 

 

 

0.04

 

 

 

0.07

 

 

 

0.07

 

Professional fees

 

 

0.17

 

 

 

0.25

 

 

 

0.28

 

 

 

0.41

 

Offering costs

 

 

 

 

 

0.31

 

 

 

 

 

 

0.66

 

Other general and administrative expenses

 

 

0.22

 

 

 

0.17

 

 

 

0.41

 

 

 

0.32

 

Total expenses

 

$

3.72

 

 

 

1.74

 

 

 

6.30

 

 

$

2.99

 

Management fee waiver

 

 

 

 

 

 

 

 

 

 

 

(0.29

)

Net Expenses

 

$

3.72

 

 

$

1.74

 

 

$

6.30

 

 

$

2.70

 

In the table above:

Interest and other debt expenses increased from $0.68 million and $0.95 million for the three and six months ended June 30, 2023 to $2.38 million and $3.79 million for the three and six months ended June 30, 2024. This was primarily due to an increase in our aggregate borrowings outstanding during the period.
Management Fees increased from $0.29 million and $0.58 million for the three and six months ended June 30, 2023 to $0.69 million and $1.26 million for the three and six months ended June 30, 2024, primarily driven by an increase in Members' capital. For the three and six months ended June 30, 2023, the Investment Adviser voluntarily waived $0 million and $0.29 million of its Management Fees.
Incentive Fees increased from $0 and $0 for the three and six months ended June 30, 2023 to $0.23 million and $0.49 million for the three and six months ended June 30, 2024. The increase was primarily driven by the performance of the investment portfolio for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023. For additional information, see Note 3 “Significant Agreements and Related Party Transactions” in our consolidated financial statements included in this report.
Offering costs decreased from $0.31 million and $0.66 for the three and six months ended June 30, 2023 to $0 million and $0 million for the three and six months ended June 30, 2024. This decrease is because Offering costs are amortized on a straight-line basis over 12 months beginning on the date of commencement of operations.

Net Change in Unrealized Appreciation (Depreciation) on Investments

Any changes in fair value are recorded as a change in unrealized appreciation (depreciation) on investments. For further details on the valuation process, refer to Note 2 “Significant Accounting Policies—Investments” in our consolidated financial statements. Net change in unrealized appreciation (depreciation) on investments were as follows:

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

June 30, 2024

 

 

June 30, 2023

 

 

 

($ in millions)

 

Unrealized appreciation

 

$

1.49

 

 

$

0.01

 

$

1.73

 

 

$

-

 

Unrealized depreciation

 

 

(1.39

)

 

$

(0.10

)

 

(0.68

)

 

 

(0.06

)

Net change in unrealized appreciation (depreciation) on investments

 

$

0.10

 

 

$

(0.09

)

$

1.05

 

 

$

(0.06

)

 

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Table of Contents

The net change in unrealized appreciation (depreciation) on investments consisted of the following:

 

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

 

June 30, 2024

 

 

June 30, 2024

 

 

 

 

($ in millions)

 

 

Portfolio company:

 

 

 

 

 

 

 

Crewline Buyer, Inc. (dba New Relic)

 

$

(0.27

)

 

$

(0.01

)

 

Priority Technology Holdings, Inc. (dba Priority Payment)

 

 

(0.17

)

 

 

(0.02

)

 

TM Restaurant Group LLC

 

 

(0.15

)

 

 

(0.15

)

 

Admiral Buyer, Inc. (dba Fidelity Payment Services)

 

 

(0.10

)

 

 

(0.02

)

 

NCWS Intermediate, Inc. (dba National Carwash Solutions)

 

 

(0.10

)

 

 

(0.01

)

 

Onyx CenterSource, Inc.

 

 

(0.10

)

 

 

(0.03

)

 

Circustrix Holdings, LLC (dba SkyZone)

 

 

0.10

 

 

 

0.09

 

 

Other, net (1)

 

 

0.12

 

 

 

0.67

 

 

RPC ABC Investment Holdings LLC (dba ABC Plumbing)

 

 

0.14

 

 

 

(0.11

)

 

Singlewire Software, LLC

 

 

0.15

 

 

 

0.15

 

 

Fullsteam Operations LLC

 

 

0.24

 

 

 

0.25

 

 

VASA Fitness Buyer, Inc.

 

 

0.24

 

 

 

0.24

 

 

Total

 

$

0.10

 

 

$

1.05

 

 

(1) For the three and six months ended June 30, 2024, Other, net includes gross unrealized appreciation of $0.62 million and $0.99 million, and gross unrealized depreciation of $(0.50) million and $(0.32) million.

 

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

June 30, 2023

 

 

June 30, 2023

 

Portfolio Company:

 

($ in millions)

 

DFS Holding Company, Inc.

 

$

(0.08

)

 

$

 

Onyx CenterSource, Inc.

 

 

(0.02

)

 

 

(0.03

)

Spotless Brands, LLC

 

 

0.01

 

 

 

(0.03

)

Other, net (1)

 

 

 

 

 

 

Total

 

$

(0.09

)

 

$

(0.06

)

 

(1) Amount rounds to less than $0.01.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

The primary use of existing funds and any funds raised in the future is expected to be for our investments in portfolio companies, cash distributions to our Unitholders or for other general corporate purposes, including paying for operating expenses or debt service to the extent we borrow or issue senior securities.

We expect to generate cash primarily from the net proceeds of any future offerings of our Units, drawdowns of capital commitments, future borrowings and cash flows from operations. Subject to the terms of our Amended and Restated Limited Liability Company Agreement (as it may be amended or amended and restated from time to time, the “LLC Agreement”), to the extent we determine that additional capital would allow us to take advantage of additional investment opportunities, if the market for debt financing presents attractively priced debt financing opportunities, or if our Board of Directors otherwise determines that leveraging our portfolio would be in our best interest and the best interests of our Unitholders, we may enter into credit facilities in addition to our Credit Facility, or issue other senior securities. Subject to the terms of the LLC Agreement, we would expect any such credit facilities may be secured by certain of our assets and may contain advance rates based upon pledged collateral. The pricing and other terms of any such facilities would depend upon market conditions when we enter into any such facilities as well as the performance of our business, among other factors. As a BDC, with certain limited exceptions, we are only permitted to borrow amounts such that our asset coverage ratio, as defined in the Investment Company Act, is at least 150% after such borrowing (if certain requirements are met). We may also refinance or repay any of our indebtedness at any time based on our financial condition and market conditions. As of June 30, 2024 and December 31, 2023, our asset coverage ratio based on the aggregate amount outstanding of our senior securities was 316% and 1,053%. We may also refinance or repay any of our indebtedness at any time based on our financial condition and market conditions.

We may enter into investment commitments through signed commitment letters, that may ultimately become investment transactions in the future. We regularly evaluate and carefully consider our unfunded commitments using GSAM’s proprietary risk management framework for the purpose of planning our capital resources and ongoing liquidity, including our financial leverage.

An affiliate of the Investment Adviser made a capital commitment to us of $10,000 on October 6, 2022 (commencement of operations) and served as our initial member (the “Initial Member”). We began accepting subscription agreements (the “Subscription Agreements”) from investors acquiring Units in our private offering. Under the terms of the Subscription Agreements, investors are required to make capital contributions up to the amount of their undrawn capital commitment to purchase Units each time we deliver a drawdown notice.

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Table of Contents

As of the dates indicated, we had aggregate capital commitments and undrawn capital commitments from investors as follows:

 

 

 

June 30, 2024

 

 

December 31, 2023

 

 

 

Capital
Commitments
($ in millions)

 

 

Unfunded
Capital
Commitments
($ in millions)

 

 

% of Capital
Commitments
Funded

 

 

Capital
Commitments
($ in millions)

 

 

Unfunded
Capital
Commitments
($ in millions)

 

 

% of Capital
Commitments
Funded

 

Common Units

 

$

750.01

 

 

$

517.50

 

 

 

31

%

 

$

750.01

 

 

$

577.50

 

 

 

23

%

 

The following table summarizes the total units issued and proceeds related to capital drawdowns:

 

Unit Issue Date

 

Units Issued

 

 

Proceeds Received
($ in millions)

 

For the Six Months Ended June 30, 2024

 

 

 

 

 

 

May 24, 2024

 

 

1,134,153

 

 

$

22.50

 

June 17, 2024

 

 

1,878,400

 

 

$

37.50

 

Total capital drawdowns

 

 

3,012,553

 

 

$

60.00

 

There were no capital drawdowns for the six months ended June 30, 2023.

 

Contractual Obligations

We have entered into certain contracts under which we have future commitments. Payments under the Investment Management Agreement, pursuant to which GSAM has agreed to serve as our Investment Adviser, are equal to (1) Management Fee equal to a percentage of value of our average NAV at the end of the then-current calendar quarter and the prior calendar quarter and (2) an Incentive Fee based on pre-incentive fee net investment income. Under the Administration Agreement, pursuant to which the Administrator will be responsible for providing us with various accounting and administrative services necessary to conduct our day-to-day operations, we pay our Administrator such fees as may be agreed between us and our Administrator that we determine are commercially reasonable in our sole discretion. Either party or the Unitholders, by a vote of a majority of our outstanding voting securities, may terminate the Investment Management Agreement without penalty on at least 60 days’ written notice to the other party. Either party may terminate the Administration Agreement without penalty upon at least 30 days’ written notice to the other party. The following table shows our contractual obligations as of June 30, 2024:

 

 

 

Payments Due by Period ($ in millions)

 

 

 

Total

 

 

Less Than
1 Year

 

 

1 – 3
Years

 

 

3 – 5
Years

 

 

More Than
5 Years

 

Credit Facility(1)

 

$

113.60

 

 

$

 

 

$

 

 

$

113.60

 

 

$

 

 

(1)
Provides, under certain circumstances, a total borrowing capacity of $750 million.

Credit Facility

 

Phillip Street Middle Market Lending Investments LLC (“SPV”), an indirectly wholly owned subsidiary of the Company, entered into a secured credit facility (the “Credit Facility”) on February 10, 2023 with Ally Bank (“Ally”) as administrative agent and collateral agent. State Street Bank and Trust Company serves as collateral custodian and securities intermediary. We serve as collateral manager under the Credit Facility.

 

The Credit Facility is drawable in U.S. Dollars. As of June 30, 2024, the total commitments under the Credit Facility were $250 million. The Credit Facility also has an accordion feature, subject to the satisfaction of various conditions, which could bring total commitments under the Credit Facility to $750 million. Proceeds from borrowings under the Credit Facility may be used to acquire portfolio loans, fund unfunded commitments with respect to loans, make distributions or pay related expenses. All amounts outstanding under the Credit Facility must be repaid by February 9, 2028.

Advances under the Credit Facility bear interest (at our election) at a per annum rate equal to either (x) Daily Simple SOFR (as defined in the Credit Facility) or (y) Term SOFR (as defined in the Credit Facility) with an Available Tenor (as defined in the Credit Facility) of either one month or three months. The applicable spread is 2.75% per annum. We paid a non-usage fee of 0.50% per annum for the first three months on the average daily unused amount of the financing commitments. Thereafter, we pay between 0.50% and 1.00% per annum, depending on the unused amount of the financing commitments, on the average daily unused amount of the financing commitments.

 

For further details, see Note 6 “Debt―Credit Facility” to our consolidated financial statements included in this report.

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Table of Contents

Off-Balance Sheet Arrangements

We may become a party to investment commitments and to financial instruments with off-balance sheet risk in the normal course of our business to fund investments and to meet the financial needs of our 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 balance sheet. As of June 30, 2024, we believed that we had adequate financial resources to satisfy our unfunded commitments. Our unfunded commitments to provide funds to portfolio companies were as follows:

 

 

 

As of

 

 

 

June 30, 2024

 

 

December 31, 2023

 

 

 

($ in millions)

 

Unfunded Commitments

 

 

 

 

 

 

First Lien/Senior Secured Debt

 

$

102.45

 

 

$

37.26

 

First Lien/Last-Out Unitranche

 

 

12.40

 

 

 

15.62

 

Total

 

$

114.85

 

 

$

52.88

 

CRITICAL ACCOUNTING POLICIES

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in the economic environment, financial markets and any other parameters used in determining such estimates could cause actual results to differ materially.

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 Valuation of Portfolio Investments, Revenue Recognition, Non-Accrual Investments, Distribution Policy and Income Taxes.

RECENT DEVELOPMENTS

On June 20, 2024, we delivered a capital drawdown notice to our investors relating to the issuance and sale of approximately 1.9 million shares of common units for an aggregate offering price of approximately $37.5 million. The units were issued on July 5, 2024.

On August 1, 2024, we delivered a capital drawdown notice to our investors relating to the issuance and sale of approximately 3.7 million shares of common units for an aggregate offering price of approximately $75.0 million. The units will be issued on or about August 9, 2024.

We will pay a distribution equal to an amount up to the Company’s taxable earnings per unit, including net investment income (if positive) for the period July 1, 2024 through September 30, 2024, payable on or about October 1, 2024 to Unitholders of record as of September 2, 2024.

 

 

 

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Table of Contents

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are subject to financial market risks, most significantly changes in interest rates. Interest rate sensitivity refers to the change in our earnings that may result from changes in the level of interest rates. Because we expect to fund a portion of our investments with borrowings, our net investment income is expected to be affected by the difference between the rate at which we invest and the rate at which we borrow. As a result, we can offer no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.

As of June 30, 2024 and December 31, 2023, on a fair value basis, 100.0% of our performing debt investments bore interest at a floating rate. Our borrowings under the Credit Facility bear interest at a floating rate.

We regularly measure our exposure to interest rate risk. We assess interest rate risk and manage our interest rate exposure on an ongoing basis by comparing our interest rate sensitive assets to our interest rate sensitive liabilities.

Based on our June 30, 2024 Consolidated Statements of Financial Condition, the following table shows the annual impact on net income of base rate changes in interest rates (considering interest rate floors for variable rate instruments) assuming no changes in our investment and borrowing structure:

As of June 30, 2024
Basis Point Change

 

Interest
Income

 

 

Interest
Expense

 

 

Net
Income

 

($ in millions)

 

 

 

 

 

 

 

 

 

Up 300 basis points

 

$

7.47

 

$

 

(3.16

)

 

$

4.31

 

Up 200 basis points

 

 

4.98

 

 

 

(2.11

)

 

 

2.87

 

Up 100 basis points

 

 

2.49

 

 

 

(1.05

)

 

 

1.44

 

Up 75 basis points

 

 

1.87

 

 

 

(0.79

)

 

 

1.08

 

Up 50 basis points

 

 

1.25

 

 

 

(0.53

)

 

 

0.72

 

Up 25 basis points

 

 

0.62

 

 

 

(0.26

)

 

 

0.36

 

Down 25 basis points

 

 

(0.62

)

 

 

0.26

 

 

 

(0.36

)

Down 50 basis points

 

 

(1.25

)

 

 

0.53

 

 

 

(0.72

)

Down 75 basis points

 

 

(1.87

)

 

 

0.79

 

 

 

(1.08

)

Down 100 basis points

 

 

(2.49

)

 

 

1.05

 

 

 

(1.44

)

Down 200 basis points

 

 

(4.98

)

 

 

2.11

 

 

 

(2.87

)

Down 300 basis points

 

 

(7.47

)

 

 

3.16

 

 

 

(4.31

)

 

 

40


Table of Contents

 

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures. As of the end of the period covered by this report, our management carried out an evaluation, under the supervision and with the participation of our Co-Chief Executive Officers and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our Co-Chief Executive Officers and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of June 30, 2024. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Changes in Internal Control over Financial Reporting. There have been no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

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Table of Contents

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time, we may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under loans to or other contracts with our portfolio companies. We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us.
 

ITEM 1A. RISK FACTORS

An investment in our securities involves a high degree of risk. There have been no material changes to the risk factors previously reported under Item 1A. “Risk Factors” of our annual report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on March 5, 2024. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may materially affect our business, financial condition and/or operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

The following table summarizes the total Units issued and proceeds related to capital drawdowns:

 

Unit Issue Date

 

Units Issued

 

 

Proceeds Received
($ in millions)

 

For the Six Months Ended June 30, 2024

 

 

 

 

 

 

May 24, 2024

 

 

1,134,153

 

 

$

22.50

 

June 17, 2024

 

 

1,878,400

 

 

$

37.50

 

Total capital drawdowns

 

 

3,012,553

 

 

$

60.00

 

Each of the above issuances and sales of the Common Units was exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) thereof, and Regulation D or Regulation S thereunder, as applicable. Each purchaser of Common Units was required to represent that it is (i) either an “accredited investor” as defined in Rule 501 of Regulation D under the Securities Act or, in the case of the Common Units sold outside the United States, not a “U.S. person” in accordance with Regulation S under the Securities Act and (ii) acquiring the Common Units for investment and not with a view to resell or distribute. We did not engage in general solicitation or advertising and did not offer securities to the public in connection with such issuance and sale.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

The exhibits filed as part of this Quarterly Report on Form 10-Q are set forth on the Index to Exhibits, which is incorporated herein by reference.

 

 

 

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Table of Contents

INDEX TO EXHIBITS

EXHIBIT NO.

EXHIBIT

3.1

Certificate of Formation (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form 10 (File No. 000-56488), filed on October 21, 2022).

3.2

Amended and Restated Limited Liability Company Agreement, dated as of October 19, 2022, between the Company and Goldman Sachs Asset Management, L.P. (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form 10 (File No. 000-56488), filed on October 21, 2022).

 

 

 

3.3

 

Amendment No. 1 to the Amended and Restated Limited Liability Company Agreement of Phillip Street Middle Market Lending Fund LLC, dated as of March 1, 2023, between the Company and Goldman Sachs Asset Management, L.P. (incorporated by reference to Exhibit 3.3 to the Company’s Annual Report on Form 10-K (File No. 000-56488), filed on March 2, 2023).

 

 

 

31.1*

 

Certification of Co-Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*

Certification of Co-Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.3*

 

Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

 

32.1*

Certification of Co-Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

 

32.2*

 

Certification of Co-Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

 

32.3*

 

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

 

101.INS*

 

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document

 

 

 

101.SCH*

 

Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents

 

 

 

104*

 

Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith.

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Table of Contents

SIGNATURES

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

 

 

 

 

 

 

 

 

 

 

PHILLIP STREET MIDDLE MARKET LENDING FUND LLC

 

 

 

 

Date: August 13, 2024

 

 

/s/ Alex Chi

 

 

 

Name: Alex Chi

 

 

 

Title: Co-Chief Executive Officer and Co-President

 

 

 

 

 

 

(Co-Principal Executive Officer)

 

 

 

 

 

 

 

Date: August 13, 2024

 

 

 

 

 

/s/ David Miller

 

 

 

 

 

 

Name: David Miller

 

 

 

 

 

 

Title: Co-Chief Executive Officer and Co-President

 

 

 

 

 

 

(Co-Principal Executive Officer)

 

 

 

 

 

 

 

 

Date: August 13, 2024

 

 

 

 

 

/s/ Stanley Matuszewski

 

 

 

 

 

 

Name: Stanley Matuszewski

 

 

 

 

 

 

Title: Chief Financial Officer and Treasurer

 

 

 

 

 

 

(Principal Financial Officer)

 

44