On April 4, 2018, the Company’s Board, including a “required majority” (as defined in Section 57(o) of the Investment Company Act of 1940, as amended) of the Board, approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the Investment Company Act of 1940. As a result, effective on April 4, 2019, our asset coverage requirement applicable to senior securities was reduced from 200% to 150% (i.e., the revised regulatory leverage limitation permits BDCs to double the amount of borrowings, such that we would be able to borrow up to two dollars for every dollar we have in assets less all liabilities and indebtedness not represented by senior securities issued by us).

The Company’s outstanding debt obligations as of June 30, 2024 were as follows:


	Date Issued/ Amended	Total Aggregate Principal Amount Committed			Principal Amount Outstanding				Fair Value				Final Maturity Date
Senior Secured Facility	4/19/2023	$	1,705,000	**	$	731,176		*	$	731,176	(1	)	4/19/2028
MFIC Bethesda CLO I LLC Class A-1 Notes	11/2/2023		232,000			232,000				232,909	(2	)	10/23/2035
2025 Notes	3/3/2015		350,000			350,000				346,555	(2	)	3/3/2025
2026 Notes	7/16/2021		125,000			125,000				117,907	(2	)	7/16/2026
2028 Notes	12/13/2023		80,000			80,000				80,512	(3	)	12/15/2028
Total Debt Obligations		$	2,492,000		$	1,518,176			$	1,509,059
Deferred Financing Costs and Debt Discount						(6,624	)
Total Debt Obligations, net of Deferred Financing Cost and Debt Discount					$	1,511,552

* Includes foreign currency debt obligations as outlined in Foreign Currency Transactions and Translations within this note to the consolidated financial statements.

** Prior to November 19, 2022, total lender commitments were $1,810,000. As of June 30, 2024, total lender commitments were $1,705,000. The total lender commitments will remain $1,705,000 until December 22, 2024 and will decrease to $1,550,000 thereafter.

(1)

The fair value of these debt obligations would be categorized as Level 3 under ASC 820 as of June 30, 2024. The valuation is based on a yield analysis and discount rate commensurate with the market yields for similar types of debt.

(2)

The fair value of these debt obligations would be categorized as Level 2 under ASC 820 as of June 30, 2024. The valuation is based on broker quoted prices.

(3)

The fair value of these debt obligations would be categorized as Level 1 under ASC 820 as of June 30, 2024. The valuation is arrived using the closing price on exchange as on the relevant date.

The Company’s outstanding debt obligations as of December 31, 2023 were as follows:


	Date Issued/ Amended	Total Aggregate Principal Amount Committed			Principal Amount Outstanding				Fair Value				Final Maturity Date
Senior Secured Facility	4/19/2023	$	1,705,000	**	$	682,977		*	$	682,977	(1	)	4/19/2028
Bethesda CLO 1 Class A-1	11/2/2023		232,000			232,000				232,000	(2	)	10/23/2035
2025 Notes	3/3/2015		350,000			350,000				336,013	(2	)	3/3/2025
2026 Notes	7/16/2021		125,000			125,000				114,291	(2	)	7/16/2026
2028 Notes	12/13/2023		80,000			80,000				81,600	(3	)	12/15/2028
Total Debt Obligations		$	2,492,000		$	1,469,977			$	1,446,881
Deferred Financing Costs and Debt Discount					$	(7,710	)
Total Debt Obligations, net of Deferred Financing Cost and Debt Discount					$	1,462,267

* Includes foreign currency debt obligations as outlined in Foreign Currency Transactions and Translations within this note to the consolidated financial statements.

** Prior to November 19, 2022, total lender commitments were $1,810,000. As of December 31, 2023, total lender commitments were $1,705,000.

(1)

The fair value of these debt obligations would be categorized as Level 3 under ASC 820 as of December 31, 2023. The valuation is based on a yield analysis and discount rate commensurate with the market yields for similar types of debt.

(2)

The fair value of these debt obligations would be categorized as Level 2 under ASC 820 as of December 31, 2023. The valuation is based on broker quoted prices.

(3)

The fair value of these debt obligations would be categorized as Level 1 under ASC 820 as of December 31, 2023. The valuation is arrived using the closing price on exchange as on the relevant date.

On April 19, 2023, the Company amended and restated its senior secured, multi-currency, revolving credit facility (the “Senior Secured Facility”), previously amended and restated as of December 22, 2020 and November 19, 2018. The amended and restated agreement extended the final maturity date through April 19, 2028. Lender commitments under the Senior Secured Facility were $1,810,000 prior to November 19, 2022 and decreased to $1,705,000 as non-extending commitments were paid down. The total lender commitments will remain $1,705,000 until December 22, 2024 and will decrease to $1,550,000 thereafter. The Senior Secured Facility includes an “accordion” feature that allows the Company to increase the size of the Facility to $2,325,000. The Senior Secured Facility is secured by substantially all of the assets in the Company’s portfolio, including cash and cash equivalents.

Commencing April 19, 2027, the Company is required to repay, in twelve consecutive monthly installments of equal size, the outstanding amount under the Senior Secured Facility as of April 19, 2027. The stated interest rates on outstanding borrowings under the Senior Secured Facility depend on the type of borrowing and the “gross borrowing base” at the time. USD borrowings accrue at (a) either Term SOFR plus 1.85% per annum or Term SOFR plus 1.975% per annum, or (b) either Alternate Base Rate plus 0.75% per annum or Alternate Base Rate plus 0.875% per annum. The Company is required to pay a commitment fee of 0.375% per annum on any unused portion of the Senior Secured Facility and fronting fees of up to 2.25% per annum on the letters of credit issued.

The Senior Secured Facility contains affirmative and restrictive covenants, events of default and other customary provisions for similar debt facilities, including: (a) periodic financial reporting requirements, (b) maintaining minimum stockholders’ equity of the greater of (i) 30% of the total assets of the Company and its consolidated subsidiaries as of the last day of any fiscal quarter and (ii) the sum of (A) $705,000 plus (B) 25% of the net proceeds from the sale of equity interests in the Company after the closing date of the Senior Secured Facility, (c) maintaining a ratio of total assets, less total liabilities (other than indebtedness) to total indebtedness, in each case of the Company and its consolidated subsidiaries, of not less than 1.5:1.0, (d) limitations on the incurrence of additional indebtedness, including a requirement to meet a certain minimum liquidity threshold before the Company can incur such additional debt, (e) limitations on liens, (f) limitations on investments (other than in the ordinary course of the Company’s business), (g) limitations on mergers and disposition of assets (other than in the normal course of the Company’s business activities), (h) limitations on the creation or existence of agreements that permit liens on properties of the Company’s consolidated subsidiaries and (i) limitations on the repurchase or redemption of certain unsecured debt and debt securities. In addition to the asset coverage ratio described in clause (c) of the preceding sentence, borrowings under the Senior Secured Facility (and the incurrence of certain other permitted debt) are subject to compliance with a borrowing base that applies different advance rates to different types of assets in the Company’s portfolio. The advance rate applicable to any specific type of asset in the Company’s portfolio will also depend on the relevant asset coverage ratio as of the date of determination. Borrowings under the Senior Secured Facility will also continue to be subject to the leverage restrictions contained in the Investment Company Act of 1940, as amended.

The Senior Secured Facility also provides for the issuance of letters of credit up to an aggregate amount of $150,000. As of June 30, 2024 and December 31, 2023, the Company had $15,982 and $17,291, respectively, in standby letters of credit issued through the Senior Secured Facility. The amount available for borrowing under the Senior Secured Facility is reduced by any standby letters of credit issued through the Senior Secured Facility. Under GAAP, these letters of credit are considered commitments because no funding has been made and as such are not considered a liability. These letters of credit are not senior securities because they are not in the form of a typical financial guarantee and the portfolio companies are obligated to refund any drawn amounts. The available remaining capacity under the Senior Secured Facility was $957,842 and $1,004,732 as of June 30, 2024 and December 31, 2023, respectively. Terms used in this disclosure have the meanings set forth in the Senior Secured Facility agreement.

On March 3, 2015, the Company issued $350,000 aggregate principal amount of senior unsecured notes for net proceeds of $343,650 (the “2025 Notes”). The 2025 Notes will mature on March 3, 2025. Interest on the 2025 Notes is due semi-annually on March 3 and September 3, at an annual rate of 5.25%, commencing on September 3, 2015. The 2025 Notes are general, unsecured obligations and rank equal in right of payment with all of our existing and future senior unsecured indebtedness

On July 16, 2021, the Company issued $125,000 aggregate principal amount of general unsecured notes for net proceeds of $122,965 (the “2026 Notes”). The 2026 Notes will mature on July 16, 2026. Interest on the 2026 Notes is due semi-annually on January 16 and July 16, at an annual rate of 4.50%, commencing on January 16, 2022. The 2026 Notes are general, unsecured obligations and rank equal in right of payment with all of our existing and future senior unsecured indebtedness.

On December 13, 2023, the Company issued $80,000 aggregate principal amount of 8.00% Notes due 2028 (inclusive of $5,000 aggregate principal amount pursuant to the underwriters’ overallotment option to purchase additional Notes) (the “2028 Notes”). As of December 31, 2023, the principal amount outstanding was $80,000. The 2028 Notes will mature on December 15, 2028. The 2028 Notes bear interest at a rate of 8.00% per year, commencing December 13, 2023. The Company will pay interest on the 2028 Notes on March 15, June 15, September 15 and December 15 of each year, beginning on March 15, 2024. The 2028 Notes may be redeemed in whole or in part at any time or from time to time at our option on or after December 15, 2025, at a redemption price of $25 per Note plus accrued and unpaid interest payments otherwise payable for the then-current quarterly interest period accrued to, but excluding, the date fixed for redemption.

On November 2, 2023, the Company completed a $402,360 term debt securitization (the “Bethesda CLO 1”). Term debt securitizations are also known as collateralized loan obligations and are a form of secured financing incurred by the Company, which is consolidated by the Company for financial reporting purposes and subject to its overall asset coverage requirement. The notes offered in the Bethesda CLO 1 (collectively, the “Bethesda CLO 1 Notes”) were issued by MFIC Bethesda CLO 1 LLC (the “Bethesda CLO 1 Issuer”), an indirectly wholly-owned and consolidated (for tax and accounting purposes) subsidiary of the Company, and are primarily secured by a diversified portfolio of middle market loans and participation interests therein. The following table presents information on the secured and unsecured notes issued in the Bethesda CLO 1:

The Company retained (in a newly formed wholly owned subsidiary of the Company (the “Bethesda CLO 1 Depositor”)) all of the Class A-2 Notes and the Subordinated Notes issued in the Bethesda CLO 1 in part in exchange for the Company’s sale and contribution to the Bethesda CLO 1 Issuer of the initial closing date portfolio. The Class A-1 Notes and the Class A-2 Notes are scheduled to mature in October 2035 and the Subordinated Notes are scheduled to mature in October 2123; however the Bethesda CLO 1 Notes may be redeemed by the Issuer, at the direction of the Bethesda CLO 1 Depositor (at the direction of the Company) as holder of the Subordinated Notes, on any business day after October 23, 2025. In connection with the sale and contribution, the Company has made customary representations, warranties and covenants to the Issuer. The Class A-1 Notes and Class A-2 Notes are secured obligations of the Bethesda CLO 1 Issuer, the Subordinated Notes are the unsecured obligations of the Bethesda CLO 1 Issuer, and the indenture governing the Bethesda CLO 1 Notes includes customary covenants and events of default.

The Bethesda CLO 1 Notes has not been, and will not be, registered under the Securities Act, or any state securities or “blue sky” laws and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from registration.

The Company serves as collateral manager to the Bethesda CLO 1 Issuer under a collateral management agreement and has agreed to irrevocably waive all collateral management fees payable pursuant to the collateral management agreement.

The following table summarizes the average and maximum debt outstanding, and the interest and debt issuance cost for the three and six months ended June 30, 2024 and 2023:


	Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Average debt outstanding	$		1,439,084		$		1,466,636		$		1,404,912		$		1,459,102
Maximum amount of debt outstanding			1,511,548				1,482,511				1,511,548				1,484,362

Weighted average annualized interest cost (1)			7.05	%			6.62	%			7.05	%			6.54	%
Annualized amortized debt issuance cost			0.44	%			0.41	%			0.50	%			0.40	%
Total annualized interest cost			7.49	%			7.04	%			7.55	%			6.94	%

________________

(1)

Includes the stated interest expense and commitment fees on the unused portion of the Senior Secured Facility. Commitment fees for the three and six months ended June 30, 2024 were $958 and $1,997, respectively. Commitment fees for the three and six months ended June 30, 2023 were $625 and $1,295, respectively.

The Company had the following foreign-denominated debt outstanding on the Senior Secured Facility as of June 30, 2024:


	Original Principal Amount (Local)		Original Principal Amount (USD)		Principal Amount Outstanding		Unrealized Gain/(Loss)			Reset Date
British Pound	£	17,300	$	21,560	$	21,876	$	(316	)		7/31/2024
Total			$	21,560	$	21,876	$	(316	)

The Company had the following foreign-denominated debt outstanding on the Senior Secured Facility as of December 31, 2023:


	Original Principal Amount (Local)		Original Principal Amount (USD)		Principal Amount Outstanding		Unrealized Gain/(Loss)			Reset Date
British Pound	£	36,900	$	45,909	$	46,977	$	(1,068	)		1/31/2024
Total			$	45,909	$	46,977	$	(1,068	)

As of June 30, 2024 and December 31, 2023, the Company was in compliance with all debt covenants for all outstanding debt obligations.