UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2016

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

For the transition period to

Commission File No. 814-00663

ARES CAPITAL CORPORATION

(Exact name of Registrant as specified in its charter)

Maryland		33-1089684
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)

245 Park Avenue, 44th Floor, New York, NY 10167

(Address of principal executive office) (Zip Code)

(212) 750-7300

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes o No o

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

Large accelerated filer x		Accelerated filer o

Non-accelerated filer o		Smaller reporting company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding at July 29, 2016
Common stock, $0.001 par value		313,954,008

Table of Contents

ARES CAPITAL CORPORATION

INDEX

Part I.	Financial Information

Item 1.	Financial Statements

	Consolidated Balance Sheet as of June 30, 2016 (unaudited) and December 31, 2015	3

	Consolidated Statement of Operations for the three and six months ended June 30, 2016 and 2015 (unaudited)	4

	Consolidated Schedule of Investments as of June 30, 2016 (unaudited) and December 31, 2015	5

	Consolidated Statement of Stockholders’ Equity for the six months ended June 30, 2016 (unaudited)	55

	Consolidated Statement of Cash Flows for the six months ended June 30, 2016 and 2015 (unaudited)	56

	Notes to Consolidated Financial Statements (unaudited)	57

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	91

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	121

Item 4.	Controls and Procedures	122

Part II.	Other Information

Item 1.	Legal Proceedings	122

Item 1A.	Risk Factors	122

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	122

Item 3.	Defaults Upon Senior Securities	123

Item 4.	Mine Safety Disclosures	123

Item 5.	Other Information	123

Item 6.	Exhibits	124

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ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(in thousands, except per share data)

	As of
	June 30, 2016			December 31, 2015
	(unaudited)
ASSETS
Investments at fair value
Non-controlled/non-affiliate company investments	$	6,276,337		$	6,481,333
Non-controlled affiliate company investments	192,628			195,074
Controlled affiliate company investments	2,431,412			2,379,089
Total investments at fair value (amortized cost of $8,980,808 and $9,147,646, respectively)	8,900,377			9,055,496
Cash and cash equivalents	125,926			257,056
Interest receivable	124,592			137,968
Receivable for open trades	1,258			—
Other assets	55,490			56,292
Total assets	$	9,207,643		$	9,506,812
LIABILITIES
Debt	$	3,785,354		$	4,113,935
Base management fees payable	34,444			34,125
Income based fees payable	28,923			31,234
Capital gains incentive fees payable	56,454			42,265
Accounts payable and other liabilities	45,988			60,587
Interest and facility fees payable	37,082			51,007
Payable for open trades	1,357			327
Total liabilities	3,989,602			4,333,480
Commitments and contingencies (Note 7)
STOCKHOLDERS’ EQUITY
Common stock, par value $0.001 per share, 500,000 common shares authorized; 313,954 and 314,347 common shares issued and outstanding, respectively	314			314
Capital in excess of par value	5,312,800			5,318,277
Accumulated overdistributed net investment income	(21,655		)	(894		)
Accumulated net realized gains (losses) on investments, foreign currency transactions, extinguishment of debt and other assets	4,961			(53,013		)
Net unrealized losses on investments, foreign currency and other transactions	(78,379		)	(91,352		)
Total stockholders’ equity	5,218,041			5,173,332
Total liabilities and stockholders’ equity	$	9,207,643		$	9,506,812
NET ASSETS PER SHARE	$	16.62		$	16.46

See accompanying notes to consolidated financial statements.

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ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(in thousands, except per share data)

(unaudited)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2016			2015			2016			2015
INVESTMENT INCOME:
From non-controlled/non-affiliate company investments:
Interest income from investments	$	137,329		$	122,616		$	277,758		$	247,443
Capital structuring service fees	11,614			8,762			26,654			21,527
Dividend income	10,474			4,081			16,989			7,912
Other income	3,162			3,606			6,505			6,100
Total investment income from non-controlled/non-affiliate company investments	162,579			139,065			327,906			282,982
From non-controlled affiliate company investments:
Interest income from investments	4,297			4,724			7,944			7,319
Capital structuring service fees	—			2,205			—			2,205
Dividend income	11			744			40			1,369
Other income	41			68			226			130
Total investment income from non-controlled affiliate company investments	4,349			7,741			8,210			11,023
From controlled affiliate company investments:
Interest income from investments	62,397			73,932			125,443			145,166
Capital structuring service fees	556			12,115			1,176			19,531
Dividend income	10,250			10,000			20,250			30,099
Management and other fees	4,605			6,235			9,627			12,273
Other income	526			391			700			1,652
Total investment income from controlled affiliate company investments	78,334			102,673			157,196			208,721
Total investment income	245,262			249,479			493,312			502,726
EXPENSES:
Interest and credit facility fees	45,334			56,421			95,577			114,996
Base management fees	34,444			33,021			69,203			66,937
Income based fees	28,923			28,949			58,045			58,314
Capital gain incentive fees	10,427			7,682			14,189			3,462
Administrative fees	3,342			3,514			6,765			6,970
Professional fees and other costs related to the American Capital Acquisition	6,546			—			8,011			—
Other general and administrative	6,976			8,773			14,326			15,726
Total expenses	135,992			138,360			266,116			266,405
NET INVESTMENT INCOME BEFORE INCOME TAXES	109,270			111,119			227,196			236,321
Income tax expense, including excise tax	4,006			2,616			9,202			6,141
NET INVESTMENT INCOME	105,264			108,503			217,994			230,180
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS, FOREIGN CURRENCY AND OTHER TRANSACTIONS:
Net realized gains (losses):
Non-controlled/non-affiliate company investments	32,742			24,910			51,513			51,804
Non-controlled affiliate company investments	431			—			874			333
Controlled affiliate company investments	—			—			6,330			—
Foreign currency transactions	(2,547		)	(662		)	(743		)	3,865
Net realized gains	30,626			24,248			57,974			56,002
Net unrealized gains (losses):
Non-controlled/non-affiliate company investments	(12,953		)	10,683			(33,756		)	(23,728		)
Non-controlled affiliate company investments	12,068			10,812			21,767			16,396
Controlled affiliate company investments	19,270			(7,752		)	24,984			(26,615		)
Foreign currency and other transactions	3,125			28			(22		)	(1,298		)
Net unrealized gains (losses)	21,510			13,771			12,973			(35,245		)
Net realized and unrealized gains from investments, foreign currency and other transactions	52,136			38,019			70,947			20,757
REALIZED LOSSES ON EXTINGUISHMENT OF DEBT	—			—			—			(3,839		)
NET INCREASE IN STOCKHOLDERS’ EQUITY RESULTING FROM OPERATIONS	$	157,400		$	146,522		$	288,941		$	247,098
BASIC AND DILUTED EARNINGS PER COMMON SHARE (see Note 10)	$	0.50		$	0.47		$	0.92		$	0.79
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING (see Note 10)	313,954			314,469			314,124			314,289

See accompanying notes to consolidated financial statements.

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ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of June 30, 2016

(dollar amounts in thousands)

(unaudited)

Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost		Fair Value			Percentage of Net Assets
Investment Funds and Vehicles
Covestia Capital Partners, LP (10)	Investment partnership	Limited partnership interest (47.00% interest)		6/17/2008	$	488	$	1,863	(2)
HCI Equity, LLC (8)(9)(10)	Investment company	Member interest (100.00% interest)		4/1/2010	—		128
Imperial Capital Private Opportunities, LP (10)(25)	Investment partnership	Limited partnership interest (80.00% interest)		5/10/2007	4,054		15,365		(2)
Partnership Capital Growth Fund I, L.P. (10)	Investment partnership	Limited partnership interest (25.00% interest)		6/16/2006	—		446		(2)
Partnership Capital Growth Investors III, L.P. (10)(25)	Investment partnership	Limited partnership interest (2.50% interest)		10/5/2011	2,466		2,692		(2)
PCG-Ares Sidecar Investment II, L.P. (10)(25)	Investment partnership	Limited partnership interest (100.00% interest)		10/31/2014	6,569		10,290		(2)
PCG-Ares Sidecar Investment, L.P. (10)(25)	Investment partnership	Limited partnership interest (100.00% interest)		5/22/2014	2,186		1,629		(2)
Piper Jaffray Merchant Banking Fund I, L.P. (10)(25)	Investment partnership	Limited partnership interest (2.00% interest)		8/16/2012	1,636		1,786
Senior Secured Loan Fund LLC (8)(11)(26)	Co-investment vehicle	Subordinated certificates ($2,003,959 par due 12/2024)	8.65% (Libor + 8.00%/M) (21)	10/30/2009	1,938,446		1,899,754
		Member interest (87.50% interest)		10/30/2009	—		—
					1,938,446		1,899,754
VSC Investors LLC (10)	Investment company	Membership interest (1.95% interest)		1/24/2008	299		1,124		(2)
					1,956,144		1,935,077			37.08	%

Healthcare Services
Absolute Dental Management LLC and ADM Equity, LLC	Dental services provider	First lien senior secured loan ($18,750 par due 1/2022)	9.26% (Libor + 8.26%/Q)	1/5/2016	18,750		18,750		(3)(20)
		First lien senior secured loan ($5,000 par due 1/2022)	9.26% (Libor + 8.26%/Q)	1/5/2016	5,000		5,000		(4)(20)
		Class A preferred units (4,000,000 units)		1/5/2016	4,000		3,296		(2)
		Class A common units (4,000,000 units)		1/5/2016	—		—		(2)
					27,750		27,046
ADCS Billings Intermediate Holdings, LLC (24)	Dermatology practice	First lien senior secured loan ($8,617 par due 5/2022)	6.75% (Libor + 5.75%/Q)	5/18/2016	8,617		8,617		(2)(20)(27)
		First lien senior secured loan ($22,500 par due 5/2022)	6.75% (Libor + 5.75%/Q)	5/18/2016	22,500		22,500		(2)(20)(27)
					31,117		31,117
Alegeus Technologies Holdings Corp.	Benefits administration and transaction processing provider	Preferred stock (2,997 shares)		12/13/2013	3,086		1,878
		Common stock (3 shares)		12/13/2013	3		—
					3,089		1,878
Argon Medical Devices, Inc.	Manufacturer and marketer of single-use specialty medical devices	Second lien senior secured loan ($9,000 par due 6/2022)	10.50% (Libor + 9.50%/Q)	12/23/2015	8,751		9,000		(2)(20)
AwarePoint Corporation	Healthcare technology platform developer	First lien senior secured loan ($8,772 par due 6/2018)	10.50% (Libor + 9.50%/Q)	9/5/2014	8,527		8,772		(2)(20)
		Warrant to purchase up to 3,213,367 shares of Series 1 preferred stock (expires 9/2024)		11/14/2014	—		609		(2)
					8,527		9,381

Table of Contents

As of June 30, 2016

(dollar amounts in thousands)

(unaudited)

Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost	Fair Value		Percentage of Net Assets
CCS Intermediate Holdings, LLC and CCS Group Holdings, LLC (24)	Correctional facility healthcare operator	First lien senior secured revolving loan ($3,750 par due 7/2019)	5.00% (Libor + 4.00%/Q)	7/23/2014	3,750	3,188	(2)(20)
		First lien senior secured revolving loan ($1,650 par due 7/2019)	6.50%(Base Rate + 3.00%/Q)	7/23/2014	1,650	1,403	(2)(20)
		First lien senior secured loan ($6,618 par due 7/2021)	5.00% (Libor + 4.00%/Q)	7/23/2014	6,594	5,625	(2)(20)
		Second lien senior secured loan ($135,000 par due 7/2022)	9.38% (Libor + 8.38%/Q)	7/23/2014	133,974	108,000	(2)(20)
		Class A units (601,937 units)		8/19/2010	—	362	(2)
					145,968	118,578
Correctional Medical Group Companies, Inc. (24)	Correctional facility healthcare operator	First lien senior secured loan ($3,088 par due 9/2021)	9.58% (Libor + 8.58%/Q)	9/29/2015	3,088	3,088	(2)(20)
		First lien senior secured loan ($4,093 par due 9/2021)	9.58% (Libor + 8.58%/Q)	9/29/2015	4,093	4,093	(2)(20)
		First lien senior secured loan ($44,707 par due 9/2021)	9.58% (Libor + 8.58%/Q)	9/29/2015	44,707	44,707	(3)(20)
					51,888	51,888
DCA Investment Holding, LLC (24)	Multi-branded dental practice management	First lien senior secured revolving loan ($3,436 par due 7/2021)	7.75%(Base Rate + 4.25%/Q)	7/2/2015	3,436	3,367	(2)(20)
		First lien senior secured loan ($18,993 par due 7/2021)	6.25% (Libor + 5.25%/Q)	7/2/2015	18,859	18,613	(4)(20)
					22,295	21,980
DNAnexus, Inc.	Bioinformatics company	First lien senior secured loan ($10,330 par due 10/2018)	9.25% (Libor + 8.25%/M)	3/21/2014	10,093	10,330	(2)(20)
		Warrant to purchase up to 909,092 units of Series C preferred stock (expires 3/2024)		3/21/2014	—	250	(2)
					10,093	10,580
Gentle Communications, LLC (24)	Dental services provider	First lien senior secured loan ($43,500 par due 5/2022)	7.50% (Libor + 6.50%/Q)	5/27/2016	43,500	43,500	(2)(20)(27)
Global Healthcare Exchange, LLC and GHX Ultimate Parent Corp.	On-demand supply chain automation solutions provider	Class A common stock (2,991 shares)		3/11/2014	2,991	2,991	(2)
		Class B common stock (980 shares)		3/11/2014	30	5,435	(2)
					3,021	8,426
Greenphire, Inc. and RMCF III CIV XXIX, L.P (24)	Software provider for clinical trial management	First lien senior secured loan ($4,000 par due 12/2018)	9.00% (Libor + 8.00%/Q)	12/19/2014	4,000	4,000	(2)(20)
		Limited partnership interest (99.90% interest)		12/19/2014	999	999	(2)
					4,999	4,999
INC Research Mezzanine Co-Invest, LLC	Pharmaceutical and biotechnology consulting services	Common units (1,410,000 units)		9/27/2010	—	1,634	(2)
Intermedix Corporation	Revenue cycle management provider to the emergency healthcare industry	Second lien senior secured loan ($112,000 par due 6/2020)	9.25% (Libor + 8.25%/Q)	12/27/2012	112,000	107,520	(2)(20)
LM Acquisition Holdings, LLC (9)	Developer and manufacturer of medical equipment	Class A units (426 units)		9/27/2013	660	1,771	(2)
MC Acquisition Holdings I, LLC	Healthcare professional provider	Class A units (1,338,314 shares)		1/17/2014	1,338	1,328	(2)
MW Dental Holding Corp. (24)	Dental services provider	First lien senior secured revolving loan ($2,000 par due 4/2018)	8.50% (Libor + 7.00%/Q)	4/12/2011	2,000	2,000	(2)(20)
		First lien senior secured loan ($50,089 par due 4/2018)	8.50% (Libor + 7.00%/Q)	4/12/2011	50,088	50,089	(2)(20)
		First lien senior secured loan ($47,497 par due 4/2018)	8.50% (Libor + 7.00%/Q)	4/12/2011	47,497	47,497	(3)(20)
		First lien senior secured loan ($19,642 par due 4/2018)	8.50% (Libor + 7.00%/Q)	4/12/2011	19,642	19,642	(4)(20)
					119,227	119,228
My Health Direct, Inc. (24)	Healthcare scheduling exchange software solution provider	First lien senior secured loan ($1,900 par due 1/2018)	10.75%	9/18/2014	1,872	1,900	(2)
		Warrant to purchase up to 4,548 shares of Series D preferred stock (expires 9/2024)		9/18/2014	39	40	(2)
					1,911	1,940

Table of Contents

As of June 30, 2016

(dollar amounts in thousands)

(unaudited)

Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost	Fair Value		Percentage of Net Assets
New Trident Holdcorp, Inc.	Outsourced mobile diagnostic healthcare service provider	Second lien senior secured loan ($80,000 par due 7/2020)	10.25% (Libor + 9.00%/Q)	8/6/2013	79,025	76,800	(2)(20)
NMSC Holdings, Inc. and ASP NAPA Holdings, LLC	Anesthesia management services provider	Second lien senior secured loan ($74,343 par due 10/2023)	11.00% (Libor + 10.00%/Q)	4/19/2016	74,343	74,343	(2)(20)
		Class A units (25,277 units)		4/19/2016	2,528	2,528	(2)
					76,871	76,871
Nodality, Inc.	Biotechnology company	First lien senior secured loan ($2,602 par due 7/2016)		11/12/2015	2,423	2,602	(2)(19)
		First lien senior secured loan ($10,757 par due 7/2016)		4/25/2014	9,694	744	(2)(19)
		Common stock (3,736,255 shares)		5/1/2016	—	—	(2)
					12,117	3,346
OmniSYS Acquisition Corporation, OmniSYS, LLC, and OSYS Holdings, LLC (24)	Provider of technology-enabled solutions to pharmacies	First lien senior secured loan ($10,497 par due 11/2018)	8.50% (Libor + 7.50%/Q)	11/21/2013	10,497	10,497	(3)(20)
		First lien senior secured loan ($5,899 par due 11/2018)	8.50% (Libor + 7.50%/Q)	11/21/2013	5,899	5,899	(4)(20)
		Limited liability company membership interest (1.57%)		11/21/2013	1,000	707	(2)
					17,396	17,103
Patterson Medical Supply, Inc.	Distributor of rehabilitation supplies and equipment	Second lien senior secured loan ($19,000 par due 8/2023)	8.75% (Libor + 7.75%/Q)	9/2/2015	18,828	19,000	(2)(20)
PerfectServe, Inc. (24)	Communications software platform provider for hospitals and physician practices	First lien senior secured loan ($9,000 par due 3/2020)	9.00% (Libor + 8.00%M)	9/15/2015	8,700	9,000	(2)(20)
		First lien senior secured loan ($2,000 par due 6/2020)	9.00% (Libor + 8.00%M)	9/15/2015	1,964	2,000	(2)(20)
		First lien senior secured loan ($2,000 par due 6/2021)	9.00% (Libor + 8.00%M)	9/15/2015	1,971	2,000	(2)(20)
		Warrant to purchase up to 28,428 shares of Series C preferred stock (expires 9/2025)		9/15/2015	180	246	(2)
		Warrant to purchase up to 34,113 shares of Series C preferred stock (expires 12/2023)		12/26/2013	—	295	(2)
					12,815	13,541
PhyMED Management LLC	Provider of anesthesia services	Second lien senior secured loan ($47,239 par due 5/2021)	9.75% (Libor + 8.75%/Q)	12/18/2015	46,582	44,877	(2)(20)
Precyse Acquisition Corp.	Provider of healthcare information management technology and services	Second lien senior secured loan ($10,000 par due 4/2023)	10.75% (Libor + 9.75%/Q)	4/20/2016	9,610	10,000	(2)(20)
Respicardia, Inc.	Developer of implantable therapies to improve cardiovascular health	Warrant to purchase up to 99,094 shares of Series C preferred stock (expires 6/2022)		6/28/2012	38	28	(2)
Sarnova HC, LLC, Tri-Anim Health Services, Inc., and BEMS Holdings, LLC	Distributor of emergency medical service and respiratory products	Second lien senior secured loan ($54,000 par due 7/2022)	10.50% (Libor + 9.50%/Q)	1/29/2016	54,000	54,000	(2)(20)
Transaction Data Systems, Inc.	Pharmacy management software provider	Second lien senior secured loan ($27,500 par due 6/2022)	10.00% (Libor + 9.00%/Q)	6/15/2015	27,500	27,500	(2)(20)
U.S. Anesthesia Partners, Inc.	Anesthesiology service provider	Second lien senior secured loan ($23,500 par due 9/2020)	10.25% (Libor + 9.25%/Q)	12/14/2015	23,500	23,500	(2)(20)
		Second lien senior secured loan ($50,000 par due 9/2020)	10.25% (Libor + 9.25%/Q)	9/24/2014	50,000	50,000	(2)(20)
					73,500	73,500
Urgent Cares of America Holdings I, LLC and FastMed Holdings I, LLC (24)	Operator of urgent care clinics	First lien senior secured loan ($13,930 par due 12/2022)	7.00% (Libor + 6.00%/Q)	12/1/2015	13,930	13,094	(2)(20)
		First lien senior secured loan ($54,451 par due 12/2022)	7.00% (Libor + 6.00%/Q)	12/1/2015	54,451	51,184	(2)(20)
		Preferred units (7,696,613 units)		6/11/2015	7,697	8,301
		Series A common units (2,000,000 units)		6/11/2015	2,000	945
		Series C common units (1,026,866 units)		6/11/2015	—	396
					78,078	73,920

Table of Contents

As of June 30, 2016

(dollar amounts in thousands)

(unaudited)

Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost	Fair Value		Percentage of Net Assets
VistaPharm, Inc. and Vertice Pharma UK Parent Limited	Manufacturer and distributor of generic pharmaceutical products	First lien senior secured loan ($5,124 par due 12/2021)	6.65% (Libor + 5.50%/Q)	12/21/2015	5,124	5,124	(2)(20)
		Preferred shares (40,662 shares)		12/21/2015	407	435	(9)
					5,531	5,559
Young Innovations, Inc.	Dental supplies and equipment manufacturer	Second lien senior secured loan ($45,000 par due 7/2019)	9.00% (Libor + 8.00%/Q)	5/30/2014	45,000	45,000	(2)(20)
					1,153,025	1,112,839		21.33	%

Other Services
American Residential Services L.L.C.	Heating, ventilation and air conditioning services provider	Second lien senior secured loan ($50,000 par due 12/2021)	8.50% (Libor + 7.50%/Q)	6/30/2014	49,633	50,000	(2)(20)
Community Education Centers, Inc. and CEC Parent Holdings LLC (8)	Offender re-entry and in-prison treatment services provider	First lien senior secured loan ($13,596 par due 12/2017)	6.25% (Libor + 5.25%/Q)	12/10/2010	13,596	13,596	(2)(13)(20)
		First lien senior secured loan ($690 par due 12/2017)	7.75%(Base Rate + 4.25%/Q)	12/10/2010	690	690	(2)(13)(20)
		Second lien senior secured loan ($21,895 par due 6/2018)	15.64% (Libor + 15.00%/Q)	12/10/2010	21,895	21,895	(2)
		Class A senior preferred units (7,846 units)		3/27/2015	9,384	10,531	(2)
		Class A junior preferred units (26,154 units)		3/27/2015	20,168	21,784	(2)
		Class A common units (134 units)		3/27/2015	—	—	(2)
					65,733	68,496
Competitor Group, Inc., Calera XVI, LLC and Champion Parent Corporation (8)(24)	Endurance sports media and event operator	First lien senior secured revolving loan ($4,538 par due 11/2018)	5.00% (Libor + 3.75%/Q)	11/30/2012	4,472	4,212	(2)(20)
		First lien senior secured loan ($38,592 par due 11/2018)	5.00% (Libor + 3.75%/Q)	11/30/2012	38,028	35,813	(2)(20)
		Preferred shares (18,875 shares)		3/25/2016	15,966	—	(2)
		Membership units (2,522,512 units)		11/30/2012	2,523	—	(2)
		Common shares (114,000 shares)		3/25/2016	—	—	(2)
					60,989	40,025
Crown Health Care Laundry Services, Inc. and Crown Laundry Holdings, LLC (7)(24)	Provider of outsourced healthcare linen management solutions	First lien senior secured revolving loan ($2,000 par due 3/2019)	7.25% (Libor + 6.00%/Q)	3/13/2014	2,000	2,000	(2)(20)(23)
		First lien senior secured loan ($18,275 par due 3/2019)	7.25% (Libor + 6.00%/Q)	3/13/2014	18,275	18,275	(3)(20)
		Class A preferred units (2,475,000 units)		3/13/2014	2,475	3,248	(2)
		Class B common units (275,000 units)		3/13/2014	275	361	(2)
					23,025	23,884
Dwyer Acquisition Parent, Inc. and TDG Group Holding Company	Operator of multiple franchise concepts primarily related to home maintenance or repairs	Senior subordinated loan ($31,500 par due 2/2020)	11.00%	6/12/2015	31,500	31,500	(2)
		Senior subordinated loan ($52,670 par due 2/2020)	11.00%	8/15/2014	52,670	52,670	(2)
		Common stock (32,843 shares)		8/15/2014	3,378	4,834	(2)
					87,548	89,004
Massage Envy, LLC (24)	Franchisor in the massage industry	First lien senior secured loan ($7,802 par due 9/2018)	8.50% (Libor + 7.25%/Q)	9/27/2012	7,802	7,802	(2)(20)
		First lien senior secured loan ($45,186 par due 9/2018)	8.50% (Libor + 7.25%/Q)	9/27/2012	45,186	45,186	(3)(20)
		First lien senior secured loan ($18,945 par due 9/2018)	8.50% (Libor + 7.25%/Q)	9/27/2012	18,945	18,945	(4)(20)
		Common stock (3,000,000 shares)		9/27/2012	3,000	5,618	(2)
					74,933	77,551

Table of Contents

As of June 30, 2016

(dollar amounts in thousands)

(unaudited)

Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost	Fair Value		Percentage of Net Assets
McKenzie Sports Products, LLC (24)	Designer, manufacturer and distributor of hunting-related supplies	First lien senior secured loan ($2,000 par due 9/2020)	4.75% (Libor + 3.75%/Q)	9/18/2014	2,000	1,965	(2)(20)
		First lien senior secured loan ($5,500 par due 9/2020)	6.75% (Libor + 5.75%/Q)	9/18/2014	5,500	5,405	(2)(14)(21)
		First lien senior secured loan ($39,500 par due 9/2020)	6.75% (Libor + 5.75%/Q)	9/18/2014	39,500	38,710	(2)(14)(20)
		First lien senior secured loan ($45,000 par due 9/2020)	6.75% (Libor + 5.75%/Q)	9/18/2014	45,000	44,100	(3)(14)(20)
					92,000	90,180
OpenSky Project, Inc. and OSP Holdings, Inc.	Social commerce platform operator	First lien senior secured loan ($1,500 par due 9/2017)	10.00%	6/4/2014	1,492	1,500	(2)
		Warrant to purchase up to 159,496 shares of Series D preferred stock (expires 4/2025)		6/29/2015	48	—	(2)
					1,540	1,500
Osmose Holdings, Inc.	Provider of structural integrity management services to transmission and distribution infrastructure	Second lien senior secured loan ($25,000 par due 8/2023)	8.75% (Libor + 7.75%/Q)	9/3/2015	24,551	24,250	(2)(20)
SocialFlow, Inc.	Social media optimization platform provider	First lien senior secured loan ($4,000 par due 8/2019)	9.50% (Libor + 8.50%/M)	1/29/2016	3,912	4,000	(5)(20)
		Warrant to purchase up to 215,331 shares of Series C preferred stock (expires 1/2026)		1/29/2016	—	25	(5)
					3,912	4,025
Spin HoldCo Inc.	Laundry service and equipment provider	Second lien senior secured loan ($140,000 par due 5/2020)	8.00% (Libor + 7.00%/Q)	5/14/2013	140,000	135,800	(2)(20)
Surface Dive, Inc.	SCUBA diver training and certification provider	Second lien senior secured loan ($37,446 par due 1/2022)	9.00% (Libor + 8.00%/Q)	7/28/2015	37,446	37,446	(2)(20)
		Second lien senior secured loan ($88,240 par due 1/2022)	10.25% (Libor + 9.25%/Q)	1/29/2015	87,882	88,240	(2)(20)
					125,328	125,686
Towne Holdings, Inc. (24)	Provider of contracted hospitality services and parking systems	First lien senior secured loan ($56,250 par due 5/2022)	6.75% (Libor + 5.75%/Q)	5/24/2016	56,250	56,250	(2)(20)(27)
		First lien senior secured loan ($9,020 par due 5/2022)	6.75% (Libor + 5.75%/Q)	5/24/2016	9,020	9,020	(2)(20)
					65,270	65,270
TWH Water Treatment Industries, Inc., TWH Filtration Industries, Inc. and TWH Infrastructure Industries, Inc. (24)	Wastewater infrastructure repair, treatment and filtration holding company	First lien senior secured loan ($5,370 par due 10/2019)	10.25% (Libor + 9.25%/Q)	10/10/2014	5,370	5,370	(2)(20)
		First lien senior secured loan ($36,400 par due 10/2019)	10.25% (Libor + 9.25%/Q)	10/10/2014	36,400	36,400	(3)(20)
					41,770	41,770
U.S. Security Associates Holdings, Inc	Security guard service provider	Second lien senior secured loan ($25,000 par due 7/2018)	11.00%	11/24/2015	25,000	25,000	(2)
WASH Multifamily Acquisition Inc. and Coinamatic Canada Inc.	Laundry service and equipment provider	Second lien senior secured loan ($3,726 par due 5/2023)	8.00% (Libor + 7.00%/Q)	5/14/2015	3,662	3,613	(2)(20)
		Second lien senior secured loan ($21,274 par due 5/2023)	8.00% (Libor + 7.00%/Q)	5/14/2015	20,906	20,636	(2)(20)
					24,568	24,249
					905,800	886,690		16.99	%

Consumer Products
Feradyne Outdoors, LLC and Bowhunter Holdings, LLC	Provider of branded archery and bowhunting accessories	First lien senior secured loan ($4,469 par due 3/2019)	4.00% (Libor + 3.00%/Q)	4/24/2014	4,469	4,246	(2)(20)
		First lien senior secured loan ($6,662 par due 3/2019)	4.00% (Libor + 3.00%/Q)	4/24/2014	6,662	6,328	(2)(20)
		First lien senior secured loan ($9,500 par due 3/2019)	6.55% (Libor + 5.55%/Q)	4/24/2014	9,500	8,740	(2)(17)(20)
		First lien senior secured loan ($50,100 par due 3/2019)	6.55% (Libor + 5.55%/Q)	4/24/2014	50,100	46,092	(3)(17)(20)
		Common units (300 units)		4/24/2014	3,733	1,769	(2)
					74,464	67,175

Table of Contents

As of June 30, 2016

(dollar amounts in thousands)

(unaudited)

Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost	Fair Value		Percentage of Net Assets
Implus Footcare, LLC	Provider of footwear and other accessories	First lien senior secured loan ($17,188 par due 4/2021)	8.75%(Base Rate + 5.25%/Q)	6/30/2016	17,188	17,188	(2)(20)
Indra Holdings Corp.	Designer, marketer, and distributor of rain and cold weather products	Second lien senior secured loan ($80,000 par due 11/2021)	8.50% (Libor + 7.50%/Q)	5/1/2014	79,074	64,000	(2)(20)
Matrixx Initiatives, Inc. and Wonder Holdings Acquisition Corp.	Developer and marketer of OTC healthcare products	Warrant to purchase up to 1,120 shares of preferred stock (expires 6/2021)		7/27/2011	—	1,396	(2)
		Warrant to purchase up to 1,654,678 shares of common stock (expires 6/2021)		7/27/2011	—	757	(2)
					—	2,153
Oak Parent, Inc.	Manufacturer of athletic apparel	First lien senior secured loan ($2,429 par due 4/2018)	7.61% (Libor + 7.00%/Q)	4/2/2012	2,426	2,429	(3)(20)
		First lien senior secured loan ($7,733 par due 4/2018)	7.61% (Libor + 7.00%/Q)	4/2/2012	7,722	7,733	(4)(20)
		First lien senior secured loan ($7 par due 4/2018)	9.50%(Base Rate + 6.00%/Q)	4/2/2012	7	7	(3)(20)
		First lien senior secured loan ($22 par due 4/2018)	9.50%(Base Rate + 6.00%/Q)	4/2/2012	22	22	(4)(20)
					10,177	10,191
Plantation Products, LLC, Seed Holdings, Inc. and Flora Parent, Inc.	Provider of branded lawn and garden products	Second lien senior secured loan ($2,000 par due 6/2021)	9.54% (Libor + 8.54%/Q)	12/23/2014	1,996	2,000	(2)(20)
		Second lien senior secured loan ($54,000 par due 6/2021)	9.54% (Libor + 8.54%/Q)	12/23/2014	53,761	54,000	(3)(20)
		Second lien senior secured loan ($10,000 par due 6/2021)	9.54% (Libor + 8.54%/Q)	12/23/2014	9,959	10,000	(4)(20)
		Common stock (30,000 shares)		12/23/2014	3,000	4,586	(2)
					68,716	70,586
SHO Holding I Corporation	Manufacturer and distributor of slip resistant footwear	Second lien senior secured loan ($100,000 par due 4/2023)	9.50% (Libor + 8.50%/Q)	10/27/2015	97,667	99,000	(2)(20)
Shock Doctor, Inc. and Shock Doctor Holdings, LLC (7)	Developer, marketer and distributor of sports protection equipment and accessories	Second lien senior secured loan ($35,425 par due 10/2021)	11.50% (Libor + 10.50%/Q)	4/22/2015	35,425	35,425	(2)(20)
		Second lien senior secured loan ($54,000 par due 10/2021)	11.50% (Libor + 10.50%/Q)	4/22/2015	54,000	54,000	(3)(20)
		Class A preferred units (50,000 units)		3/14/2014	5,000	4,802	(2)
		Class C preferred units (50,000 units)		4/22/2015	5,000	4,802	(2)
					99,425	99,029
The Hygenic Corporation	Designer, manufacturer and marketer of branded wellness products	Second lien senior secured loan ($70,000 par due 4/2021)	9.75% (Libor + 8.75%/Q)	2/27/2015	70,000	71,400	(2)(20)
The Step2 Company, LLC (8)	Toy manufacturer	Second lien senior secured loan ($27,583 par due 9/2019)	10.00%	4/1/2010	27,495	27,583	(2)
		Second lien senior secured loan ($46,553 par due 9/2019)		4/1/2010	30,307	28,082	(2)(19)
		Common units (1,116,879 units)		4/1/2011	24	—
		Class B common units (126,278,000 units)		10/30/2014	—	—	(2)
		Warrant to purchase up to 3,157,895 units		4/1/2010	—	—
					57,826	55,665
Varsity Brands Holding Co., Inc., Hercules Achievement, Inc., Hercules Achievement Holdings, Inc. and Hercules VB Holdings, Inc.	Leading manufacturer and distributor of textiles, apparel & luxury goods	Second lien senior secured loan ($55,576 par due 12/2022)	9.75% (Libor + 8.75%/Q)	12/11/2014	55,125	55,576	(2)(20)
		Second lien senior secured loan ($91,697 par due 12/2022)	9.75% (Libor + 8.75%/Q)	12/11/2014	90,959	91,697	(2)(20)
		Common stock (3,353,370 shares)		12/11/2014	3,353	4,614	(2)
		Common stock (3,353,371 shares)		12/11/2014