UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2017

OR

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

For the transition period from _____ 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 ýNo  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, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (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)
Emerging growth company o

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 7(a)(2)(B) of the Securities Act. o

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

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 October 26, 2017
Common stock, $0.001 par value	426,299,165

ARES CAPITAL CORPORATION

INDEX

Part I.	Financial Information
Item 1.	Financial Statements
	Consolidated Balance Sheet as of September 30, 2017 (unaudited) and December 31, 2016	3
	Consolidated Statement of Operations for the three and nine months ended September 30, 2017 and 2016 (unaudited)	4
	Consolidated Schedule of Investments as of September 30, 2017 (unaudited) and December 31, 2016	5
	Consolidated Statement of Stockholders’ Equity for the nine months ended September 30, 2017 (unaudited)	69
	Consolidated Statement of Cash Flows for the nine months ended September 30, 2017 and 2016 (unaudited)	70
	Notes to Consolidated Financial Statements (unaudited)	71
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	109
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	137
Item 4.	Controls and Procedures	138
Part II.	Other Information
Item 1.	Legal Proceedings	138
Item 1A.	Risk Factors	138
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	138
Item 3.	Defaults Upon Senior Securities	140
Item 4.	Mine Safety Disclosures	140
Item 5.	Other Information	140
Item 6.	Exhibits	140

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(in millions, except per share data)

	As of
	September 30, 2017			December 31, 2016
	(unaudited)
ASSETS
Investments at fair value
Non-controlled/non-affiliate company investments	$	9,808		$	5,940
Non-controlled affiliate company investments	208			185
Controlled affiliate company investments	1,440			2,695
Total investments at fair value (amortized cost of $11,740 and $9,034, respectively)	11,456			8,820
Cash and cash equivalents	341			223
Interest receivable	105			112
Receivable for open trades	34			29
Other assets	105			61
Total assets	$	12,041		$	9,245
LIABILITIES
Debt	$	4,640		$	3,874
Base management fees payable	44			34
Income based fees payable	25			32
Capital gains incentive fees payable	61			38
Accounts payable and other liabilities	199			58
Interest and facility fees payable	44			44
Total liabilities	5,013			4,080
Commitments and contingencies (Note 7)
STOCKHOLDERS’ EQUITY
Common stock, par value $0.001 per share, 500 common shares authorized; 426 and 314 common shares issued and outstanding, respectively	—			—
Capital in excess of par value	7,206			5,292
Accumulated undistributed (overdistributed) net investment income	(78		)	37
Accumulated net realized gains on investments, foreign currency transactions, extinguishment of debt and other assets	200			57
Net unrealized losses on investments, foreign currency and other transactions	(300		)	(221		)
Total stockholders’ equity	7,028			5,165
Total liabilities and stockholders’ equity	$	12,041		$	9,245
NET ASSETS PER SHARE	$	16.49		$	16.45

See accompanying notes to consolidated financial statements.

3

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(in millions, except per share data)

(unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
INVESTMENT INCOME:
From non-controlled/non-affiliate company investments:
Interest income from investments	$	200		$	134		$	539		$	412
Capital structuring service fees	28			34			64			60
Dividend income	8			6			20			23
Other income	4			3			13			10
Total investment income from non-controlled/non-affiliate company investments	240			177			636			505
From non-controlled affiliate company investments:
Interest income from investments	4			4			12			13
Total investment income from non-controlled affiliate company investments	4			4			12			13
From controlled affiliate company investments:
Interest income from investments	34			62			149			187
Capital structuring service fees	4			1			9			2
Dividend income	10			10			38			30
Management and other fees	1			4			6			14
Other income	1			—			3			1
Total investment income from controlled affiliate company investments	50			77			205			234
Total investment income	294			258			853			752
EXPENSES:
Interest and credit facility fees	56			43			166			139
Base management fees	44			34			127			103
Income based fees	35			33			97			91
Capital gain incentive fees	(3		)	(6		)	23			8
Administrative fees	3			3			9			10
Professional fees and other costs related to the American Capital Acquisition	4			3			42			11
Other general and administrative	7			6			24			21
Total expenses	146			116			488			383
Waiver of income based fees	(10		)	—			(20		)	—
Total expenses, net of waiver of income based fees	136			116			468			383
NET INVESTMENT INCOME BEFORE INCOME TAXES	158			142			385			369
Income tax expense, including excise tax	5			4			14			13
NET INVESTMENT INCOME	153			138			371			356
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS, FOREIGN CURRENCY AND OTHER TRANSACTIONS:
Net realized gains (losses):
Non-controlled/non-affiliate company investments	(3		)	4			70			55
Non-controlled affiliate company investments	—			12			—			13
Controlled affiliate company investments	45			5			97			11
Foreign currency and other transactions	(7		)	(1		)	(20		)	(1		)
Net realized gains	35			20			147			78
Net unrealized gains (losses):
Non-controlled/non-affiliate company investments	(39		)	(57		)	(138		)	(91		)
Non-controlled affiliate company investments	(9		)	(10		)	(10		)	12
Controlled affiliate company investments	1			23			75			48
Foreign currency and other transactions	(2		)	(4		)	(6		)	(4		)
Net unrealized losses	(49		)	(48		)	(79		)	(35		)
Net realized and unrealized gains (losses) from investments, foreign currency and other transactions	(14		)	(28		)	68			43
REALIZED LOSSES ON EXTINGUISHMENT OF DEBT	—			—			(4		)	—
NET INCREASE IN STOCKHOLDERS’ EQUITY RESULTING FROM OPERATIONS	$	139		$	110		$	435		$	399
BASIC AND DILUTED EARNINGS PER COMMON SHARE (see Note 10)	$	0.33		$	0.35		$	1.02		$	1.27
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING (see Note 10)	426			314			425			314

See accompanying notes to consolidated financial statements.

4

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of September 30, 2017

(dollar amounts in millions)

(unaudited)

Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost		Fair  Value			Percentage of Net Assets
Healthcare Services
Absolute Dental Management LLC and ADM Equity, LLC	Dental services provider	First lien senior secured loan ($18.8 par due 1/2022)	9.63% (Libor + 8.30%/Q)	1/5/2016	$	18.8	$	18.2	(2)(16)
		First lien senior secured loan ($5.0 par due 1/2022)	9.63% (Libor + 8.30%/Q)	1/5/2016	5.0		4.8		(4)(16)
		Class A preferred units (4,000,000 units)		1/5/2016	4.0		1.4		(2)
		Class A common units (4,000,000 units)		1/5/2016	—		—		(2)
					27.8		24.4
Acessa Health Inc. (fka HALT Medical, Inc.)	Medical supply provider	Common stock (569,823 shares)		6/22/2017	0.1		0.1
ADCS Billings Intermediate Holdings, LLC (20)	Dermatology practice	First lien senior secured revolving loan ($4.8 par due 5/2022)	9.00% (Base Rate + 4.75%/Q)	5/18/2016	4.8		4.7		(2)(16)(19)
ADG, LLC and RC IV GEDC Investor LLC (20)	Dental services provider	First lien senior secured revolving loan ($8.0 par due 9/2022)	6.00% (Libor + 4.75%/Q)	9/28/2016	8.0		7.8		(2)(16)
		First lien senior secured revolving loan ($3.0 par due 9/2022)	8.00% (Base Rate + 3.75%/Q)	9/28/2016	3.0		2.9		(2)(16)
		Second lien senior secured loan ($87.5 par due 3/2024)	10.25% (Libor + 9.00%/Q)	9/28/2016	87.5		84.0		(2)(16)
		Membership units (3,000,000 units)		9/28/2016	3.0		2.3		(2)
					101.5		97.0
Alcami Holdings, LLC (8)(20)	Outsourced drug development services provider	First lien senior secured revolving loan ($23.6 par due 10/2019)	6.74% (Libor + 5.50%/Q)	1/3/2017	23.6		23.6		(2)(16)
		First lien senior secured loan ($10.0 par due 10/2020)	6.74% (Libor + 5.50%/Q)	1/3/2017	10.0		10.0		(2)(16)
		First lien senior secured loan ($96.2 par due 10/2020)	6.74% (Libor + 5.50%/Q)	1/3/2017	96.2		96.2		(3)(16)
		Senior subordinated loan ($34.8 par due 10/2020)	14.75%	1/3/2017	34.8		34.8		(2)
		Senior subordinated loan ($35.2 par due 10/2020)	15.25%	1/3/2017	20.7		35.2		(2)
		Senior subordinated loan ($25.0 par due 10/2020)	12.25%	1/3/2017	25.0		25.0		(2)
		Senior subordinated loan ($30.0 par due 10/2020)	11.75%	1/3/2017	30.0		30.0		(2)
		Senior subordinated loan ($30.0 par due 10/2020)	12%	1/3/2017	30.0		30.0		(2)
		Series R preferred membership units (30,000 units)		1/3/2017	—		23.9
		Series R-2 preferred membership units (54,936 units)		1/3/2017	—		43.8
					270.3		352.5
Alegeus Technologies Holdings Corp.	Benefits administration and transaction processing provider	Preferred stock (2,997 shares)		12/13/2013	3.1		2.7
		Common stock (3 shares)		12/13/2013	—		—
					3.1		2.7
Argon Medical Devices, Inc.	Manufacturer and marketer of single-use specialty medical devices	Second lien senior secured loan ($9.0 par due 6/2022)	10.74% (Libor + 9.50%/Q)	12/23/2015	8.8		9.0		(2)(16)
AwarePoint Corporation	Healthcare technology platform developer	First lien senior secured loan ($8.0 par due 12/2019)	13.82% (Libor + 12.50%/M)	9/5/2014	7.9		7.3		(2)(14)(16)
		Warrant to purchase up to 3,213,367 shares of Series 1 preferred stock (expires 9/2024)		11/14/2014	—		0.4		(2)
					7.9		7.7
CCS Intermediate Holdings, LLC and CCS Group Holdings, LLC (20)	Correctional facility healthcare operator	First lien senior secured revolving loan ($4.5 par due 7/2019)	5.33% (Libor + 4.00%/Q)	7/23/2014	4.5		4.0		(2)(16)(19)
		First lien senior secured loan ($6.5 par due 7/2021)	5.33% (Libor + 4.00%/Q)	7/23/2014	6.5		5.7		(2)(16)

5

As of September 30, 2017

(dollar amounts in millions)

(unaudited)

Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost	Fair  Value		Percentage of Net Assets
		Second lien senior secured loan ($135.0 par due 7/2022)	9.70% (Libor + 8.38%/Q)	7/23/2014	134.2	110.7	(2)(16)
		Class A units (1,000,000 units)		8/19/2010	—	0.7	(2)
					145.2	121.1
Correctional Medical Group Companies, Inc.	Correctional facility healthcare operator	First lien senior secured loan ($48.8 par due 9/2021)	8.79% (Libor + 7.65%/Q)	9/29/2015	48.8	48.8	(3)(16)
		First lien senior secured loan ($3.1 par due 9/2021)	8.79% (Libor + 7.65%/Q)	9/29/2015	3.1	3.1	(2)(16)
					51.9	51.9
CSHM LLC (8)	Dental services provider	Class A membership units (1,979 units)		1/3/2017	—	—
D4C Dental Brands HoldCo, Inc. and Bambino Group Holdings, LLC (20)	Dental services provider	First lien senior secured revolving loan ($1.2 par due 12/2022)	7.56% (Libor + 6.25%/Q)	12/21/2016	1.2	1.2	(2)(16)
		First lien senior secured revolving loan ($1.3 par due 12/2022)	9.50% (Base Rate + 5.25%/Q)	12/21/2016	1.3	1.3	(2)(16)
		Class A preferred units (1,000,000 units)		12/21/2016	1.0	1.0	(2)
					3.5	3.5
DCA Investment Holding, LLC (20)	Multi-branded dental practice management	First lien senior secured revolving loan ($2.8 par due 7/2021)	8.50% (Base Rate + 4.25%/Q)	7/2/2015	2.8	2.7	(2)(16)(19)
		First lien senior secured loan ($18.8 par due 7/2021)	6.58% (Libor + 5.25%/Q)	7/2/2015	18.7	18.2	(4)(16)
					21.5	20.9
DNAnexus, Inc.	Bioinformatics company	Warrant to purchase up to 909,092 units of Series C preferred stock (expires 3/2024)		3/21/2014	—	0.1	(2)
Drayer Physical Therapy Institute LLC	Outpatient physical therapy provider	First lien senior secured loan ($12.3 par due 7/2018)	8.99% (Libor + 7.75%/Q)	7/26/2017	12.3	12.3	(2)(16)
		First lien senior secured loan ($114.6 par due 7/2018)	8.99% (Libor + 7.75%/Q)	7/26/2017	114.6	114.6	(2)(16)
					126.9	126.9
Emerus Holdings, Inc. (20)	Freestanding 24-hour emergency care micro-hospitals operator	First lien senior secured revolving loan ($0.3 par due 9/2020)	7.75% (Base Rate + 3.50%/Q)	3/14/2017	0.3	0.3	(2)(16)
		First lien senior secured loan ($2.3 par due 9/2021)	5.74% (Libor + 4.50%/Q)	3/14/2017	2.0	2.0	(2)(16)
					2.3	2.3
GHX Ultimate Parent Corporation, Commerce Parent, Inc. and Commerce Topco, LLC	On-demand supply chain automation solutions provider to the healthcare industry	Second lien senior secured loan ($96.5 par due 6/2025)	9.33% (Libor + 8.00%/Q)	6/30/2017	95.8	95.5	(2)(16)
		Series A perpetual preferred stock (110,338 shares)	12.08% PIK (Libor + 10.75%/Q)	6/30/2017	113.7	113.7	(2)(16)
		Class A units (13,925,993 units)		6/30/2017	13.9	14.7	(2)
					223.4	223.9
Greenphire, Inc. and RMCF III CIV XXIX, L.P (20)	Software provider for clinical trial management	First lien senior secured revolving loan ($1.0 par due 12/2018)	8.00% (Base Rate + 3.75%/Q)	12/19/2014	1.0	1.0	(2)(16)
		First lien senior secured loan ($1.5 par due 9/2020)	9.30% (Libor + 8.00%/M)	12/19/2014	1.5	1.5	(2)(16)
		First lien senior secured loan ($2.7 par due 12/2018)	9.30% (Libor + 8.00%/M)	12/19/2014	2.7	2.7	(2)(16)
		Limited partnership interest (99.90% interest)		12/19/2014	1.0	2.3	(2)
					6.2	7.5
Heartland Dental, LLC	Detanl services provider	Second lien senior secured loan ($27.8 par due 7/2024)	9.82% (Libor + 8.50%/Q)	7/31/2017	27.4	27.8	(2)(16)
Hygiena Borrower LLC (20)	Adenosine triphosphate testing technology provider	Second lien senior secured loan ($10.7 par due 8/2023)	10.33% (Libor + 9.00%/Q)	2/27/2017	10.7	10.7	(2)(16)
		Second lien senior secured loan ($10.0 par due 8/2023)	10.33% (Libor + 9.00%/Q)	8/26/2016	10.0	10.0	(2)(16)
					20.7	20.7

6

As of September 30, 2017

(dollar amounts in millions)

(unaudited)

Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost	Fair  Value		Percentage of Net Assets
Intermedix Corporation	Revenue cycle management provider to the emergency healthcare industry	First lien senior secured loan ($107.5 par due 12/2019)	5.93% (Libor + 4.75%/Q)	7/26/2017	116.8	115.6	(2)(16)
		First lien senior secured loan ($121.7 par due 12/2019)	6.07% (Libor + 4.75%/Q)	7/26/2017	132.2	130.9	(2)(16)
		Second lien senior secured loan ($112.0 par due 6/2020)	9.58% (Libor + 8.25%/Q)	12/27/2012	112.0	108.6	(2)(16)
					361.0	355.1
Island Medical Management Holdings, LLC	Provider of physician management services	First lien senior secured loan ($3.5 par due 9/2022)	7.00% (Libor + 5.50%/Q)	5/15/2017	3.5	3.4	(2)(16)
					3.5	3.4
JDC Healthcare Management, LLC (20)	Dental services provider	First lien senior secured revolving loan ($1.5 par due 4/2022)	7.49% (Libor + 6.25%/Q)	4/10/2017	1.5	1.5	(2)(16)
		First lien senior secured loan ($10.0 par due 4/2023)	7.49% (Libor + 6.25%/Q)	4/10/2017	10.0	9.8	(2)(16)
		First lien senior secured loan ($20.0 par due 4/2023)	7.49% (Libor + 6.25%/Q)	4/10/2017	20.0	19.6	(4)(16)
					31.5	30.9
KBHS Acquisition, LLC (d/b/a Alita Care, LLC) (20)	Provider of behavioral health services	First lien senior secured revolving loan ($0.9 par due 3/2022)	6.23% (Libor + 5.00%/Q)	3/17/2017	0.9	0.9	(2)(16)
		First lien senior secured revolving loan ($0.4 par due 3/2022)	6.24% (Libor + 5.00%/Q)	3/17/2017	0.4	0.4	(2)(16)
					1.3	1.3
Key Surgical LLC (20)	Provider of sterile processing, operating room and instrument care supplies for hospitals	First lien senior secured revolving loan ($0.9 par due 6/2022)	6.07% (Libor + 4.75%/Q)	6/1/2017	0.9	0.9	(2)(16)
		First lien senior secured loan ($17.8 par due 6/2023)	5.75% (EURIBOR + 4.75%/Q)	6/1/2017	16.9	17.5	(2)(16)
		First lien senior secured loan ($4.4 par due 6/2023)	6.07% (Libor + 4.75%/Q)	6/1/2017	4.3	4.3	(4)(16)
					22.1	22.7
MB2 Dental Solutions, LLC (20)	Dental services provider	First lien senior secured loan ($4.8 par due 9/2023)	6.08% (Libor + 3.75%/Q)	9/29/2017	4.8	4.7	(2)(16)
MCH Holdings, Inc. and MC Acquisition Holdings I, LLC	Healthcare professional provider	First lien senior secured loan ($74.3 par due 1/2020)	6.73% (Libor + 5.50%/Q)	7/26/2017	74.3	74.3	(2)(16)
		First lien senior secured loan ($90.0 par due 1/2020)	6.74% (Libor + 5.50%/Q)	7/26/2017	90.0	90.0	(2)(16)
		Class A units (1,438,643 shares)		1/17/2014	1.5	1.1	(2)
					165.8	165.4
MW Dental Holding Corp. (20)	Dental services provider	First lien senior secured revolving loan ($9.7 par due 4/2018)	9.00% (Libor + 7.50%/Q)	4/12/2011	9.7	9.7	(2)(16)
		First lien senior secured loan ($44.5 par due 4/2018)	9.00% (Libor + 7.50%/Q)	4/12/2011	44.5	44.5	(2)(16)
		First lien senior secured loan ($46.9 par due 4/2018)	9.00% (Libor + 7.50%/Q)	4/12/2011	46.9	46.9	(3)(16)
		First lien senior secured loan ($19.4 par due 4/2018)	9.00% (Libor + 7.50%/Q)	4/12/2011	19.4	19.4	(4)(16)
					120.5	120.5
My Health Direct, Inc.	Healthcare scheduling exchange software solution provider	Warrant to purchase up to 4,548 shares of Series D preferred stock (expires 9/2024)		9/18/2014	—	—	(2)
New Trident Holdcorp, Inc.	Outsourced mobile diagnostic healthcare service provider	Second lien senior secured loan ($80.0 par due 7/2020)	10.83% (Libor + 9.50%/Q)	8/6/2013	79.3	62.4	(2)(16)
NMSC Holdings, Inc. and ASP NAPA Holdings, LLC	Anesthesia management services provider	Second lien senior secured loan ($72.8 par due 10/2023)	11.33% (Libor + 10.00%/Q)	4/19/2016	72.8	69.2	(2)(16)
		Class A units (25,277 units)		4/19/2016	2.5	1.7	(2)
					75.3	70.9
Nodality, Inc.	Biotechnology company	First lien senior secured loan ($2.3 par due 8/2016)		11/12/2015	2.1	—	(2)(15)

7

As of September 30, 2017

(dollar amounts in millions)

(unaudited)

Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost	Fair  Value		Percentage of Net Assets
		First lien senior secured loan ($10.9 par due 8/2016)		4/25/2014	9.7	—	(2)(15)
		Warrant to purchase up to 3,736,255 shares of common stock (expires 3/2026)		5/1/2016	—	—	(2)
					11.8	—
NSM Sub Holdings Corp. (20)	Provider of customized mobility, rehab and adaptive seating systems	First lien senior secured revolving loan ($0.9 par due 10/2022)	8.25% (Base Rate + 4.00%/Q)	9/28/2017	0.9	0.9	(2)(16)
nThrive, Inc. (fka Precyse Acquisition Corp.)	Provider of healthcare information management technology and services	Second lien senior secured loan ($10.0 par due 4/2023)	10.99% (Libor + 9.75%/Q)	4/20/2016	9.7	10.0	(2)(16)
OmniSYS Acquisition Corporation, OmniSYS, LLC, and OSYS Holdings, LLC (20)	Provider of technology-enabled solutions to pharmacies	First lien senior secured loan ($5.9 par due 11/2018)	8.83% (Libor + 7.50%/Q)	11/21/2013	5.9	5.9	(4)(16)
		Limited liability company membership interest (1.57%)		11/21/2013	1.0	0.6	(2)
					6.9	6.5
Patterson Medical Supply, Inc.	Distributor of rehabilitation supplies and equipment	Second lien senior secured loan ($78.0 par due 8/2023)	10.00% (Libor + 8.50%/Q)	9/2/2015	76.3	74.9	(2)(16)
PerfectServe, Inc.	Communications software platform provider for hospitals and physician practices	First lien senior secured loan ($16.0 par due 4/2021)	10.30% (Libor + 9.00%/M)	4/5/2017	14.8	16.0	(2)(16)
		First lien senior secured loan ($2.0 par due 4/2021)	10.32% (Libor + 9.00%/M)	4/5/2017	2.0	2.0	(2)(16)
		First lien senior secured loan ($2.0 par due 4/2021)	10.32% (Libor + 9.00%/M)	4/5/2017	2.0	2.0	(2)(16)
		Warrant to purchase up to 128,480 shares of Series C preferred stock (expires 4/2027)		4/5/2017	1.0	0.7	(2)
					19.8	20.7
PhyMED Management LLC	Provider of anesthesia services	Second lien senior secured loan ($47.2 par due 5/2021)	10.07% (Libor + 8.75%/Q)	12/18/2015	46.7	45.3	(2)(16)
Practice Insight, LLC (20)	Revenue cycle management provider to the emergency healthcare industry	First lien senior secured revolving loan ($0.6 par due 8/2022)	8.25% (Base Rate + 4.00%/Q)	8/23/2017	0.6	0.6	(2)(16)
		First lien senior secured loan ($12.7 par due 8/2022)	6.24% (Libor + 5.00%/Q)	8/23/2017	12.7	12.7	(2)(16)
					13.3	13.3
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	—	—	(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 ($54.0 par due 7/2022)	10.74% (Libor + 9.50%/Q)	1/29/2016	54.0	54.0	(2)(16)
SCSG EA Acquisition Company, Inc. (20)	Provider of outsourced clinical services to hospitals and health systems	First lien senior secured loan ($3.3 par due 9/2023)	5.57% (Libor + 4.25%/Q)	9/1/2017	3.3	3.3	(2)(16)
TerSera Therapeutics LLC	Acquirer and developer of specialty therapeutic pharmaceutical products	First lien senior secured loan ($5.3 par due 3/2023)	6.58% (Libor + 5.25%/Q)	5/3/2017	5.2	5.2	(4)(16)
Transaction Data Systems, Inc.	Pharmacy management software provider	Second lien senior secured loan ($35.3 par due 6/2022)	10.30% (Libor + 9.00%/Q)	6/15/2015	35.3	35.3	(2)(16)
U.S. Anesthesia Partners, Inc.	Anesthesiology service provider	Second lien senior secured loan ($64.8 par due 6/2025)	8.49% (Libor + 7.25%/Q)	6/16/2017	63.8	63.8	(2)(16)
Urgent Cares of America Holdings I, LLC and FastMed Holdings I, LLC (20)	Operator of urgent care clinics	Preferred units (7,696,613 units)		6/11/2015	7.7	0.5
		Series A common units (2,000,000 units)		6/11/2015	2.0	—
		Series C common units (5,288,427 units)		6/11/2015	—	—

8

As of September 30, 2017

(dollar amounts in millions)

(unaudited)

Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost	Fair  Value		Percentage of Net Assets
					9.7	0.5
Vertice Pharma UK Parent Limited (9)	Manufacturer and distributor of generic pharmaceutical products	Preferred shares (40,662 shares)		12/21/2015	0.4	0.7
Young Innovations, Inc.	Dental supplies and equipment manufacturer	Second lien senior secured loan ($31.4 par due 7/2019)	10.58% (Libor + 9.25%/Q)	10/18/2016	31.4	31.4	(2)(16)
		Second lien senior secured loan ($55.0 par due 7/2019)	10.58% (Libor + 9.25%/Q)	5/30/2014	55.0	55.0	(2)(16)
					86.4	86.4
ZocDoc, Inc. (20)	Provider of medical care search facility	First lien senior secured loan ($5.0 par due 4/2021)	10.81% (Libor + 9.50%/M)	4/7/2017	5.0	5.1	(2)(14)(16)
		First lien senior secured loan ($15.0 par due 4/2021)	10.81% (Libor + 9.50%/M)	4/7/2017	14.9	15.2	(5)(14)(16)
					19.9	20.3
					2,381.8	2,383.1		33.91	%
Business Services
Accruent, LLC, Accruent Holding, LLC and Athena Parent, Inc. (20)	Real estate and facilities management software provider	Second lien senior secured loan ($61.1 par due 7/2024)	10.06% (Libor + 8.75%/Q)	7/28/2017	61.1	61.1	(2)(16)
		Senior subordinated loan ($6.8 par due 7/2025)	11.5%	7/28/2017	6.8	6.5	(2)
		Senior subordinated loan ($73.6 par due 7/2025)	11.5%	7/28/2017	73.6	70.7	(2)
		Common stock (3,000 shares)		5/16/2016	3.0	2.8	(2)
		Warrant to purchase up to 11,380 shares of common stock (expires 7/2037)		7/28/2017	—	3.2	(2)
					144.5	144.3
Achilles Acquisition LLC (20)	Benefits broker and outsourced workflow automation platform provider for brokers	First lien senior secured loan ($1.0 par due 6/2023)	7.30% (Libor + 6.00%/Q)	6/6/2017	1.0	1.0	(2)(16)
		First lien senior secured loan ($0.8 par due 6/2023)	7.31% (Libor + 6.00%/Q)	6/6/2017	0.8	0.8	(2)(16)
		First lien senior secured loan ($10.2 par due 6/2023)	7.33% (Libor + 6.00%/Q)	6/6/2017	10.2	10.1	(2)(16)
					12.0	11.9
Acrisure, LLC, Acrisure Investors FO, LLC and Acrisure Investors SO, LLC (20)	Retail insurance advisor and brokerage	Second lien senior secured loan ($10.0 par due 11/2024)	10.52% (Libor + 9.25%/Q)	5/10/2017	10.0	10.0	(2)(16)
		Second lien senior secured loan ($3.1 par due 11/2024)	10.58% (Libor + 9.25%/Q)	5/10/2017	3.1	3.1	(2)(16)
		Second lien senior secured loan ($15.0 par due 11/2024)	10.52% (Libor + 9.25%/Q)	5/10/2017	15.0	15.0	(2)(16)
		Second lien senior secured loan ($88.6 par due 11/2024)	10.55% (Libor + 9.25%/Q)	11/22/2016	88.6	88.6	(2)(16)
		Second lien senior secured loan ($9.7 par due 11/2024)	10.52% (Libor + 9.25%/Q)	11/22/2016	9.7	9.7	(2)(16)
		Membership interests (10,793,504 units)		11/18/2016	10.8	10.8	(2)
		Membership interests (2,698,376 units)		11/18/2016	2.7	2.7	(2)
					139.9	139.9
BeyondTrust Software, Inc. (20)	Management software solutions provider	First lien senior secured loan ($29.4 par due 9/2019)	8.33% (Libor + 7.00%/Q)	1/3/2017	29.0	29.4	(3)(16)
BluePay Processing, Inc.	Payment processing solutions provider	Second lien senior secured loan ($32.8 par due 8/2022)	9.81% (Libor + 8.50%/Q)	1/3/2017	32.8	32.8	(2)(16)
Brandtone Holdings Limited (9)	Mobile communications and marketing services provider	First lien senior secured loan ($4.7 par due 11/2018)		5/11/2015	4.5	—	(2)(15)
		First lien senior secured loan ($3.1 par due 2/2019)		5/11/2015	2.9	—	(2)(15)
		Warrant to purchase up to 184,003 units of convertible preferred shares (expires 8/2026)		5/11/2015	—	—	(2)

9

As of September 30, 2017

(dollar amounts in millions)

(unaudited)

Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost	Fair  Value		Percentage of Net Assets
					7.4	—
CallMiner, Inc.	Provider of cloud-based conversational analytics solutions	Second lien senior secured loan ($1.0 par due 5/2018)	10.82% (Libor + 9.50%/M)	7/23/2014	1.0	1.0	(2)(16)
		Second lien senior secured loan ($0.7 par due 8/2018)	10.82% (Libor + 9.50%/M)	7/23/2014	0.7	0.7	(2)(16)
		Warrant to purchase up to 2,350,636 shares of Series 1 preferred stock (expires 7/2024)		7/23/2014	—	—	(2)
					1.7	1.7
Clearwater Analytics, LLC (20)	Provider of integrated cloud-based investment portfolio management, accounting, reporting and analytics software	First lien senior secured revolving loan ($0.5 par due 9/2022)	8.74% (Libor + 7.50%/Q)	9/1/2016	0.5	0.5	(2)(16)
CMW Parent LLC (fka Black Arrow, Inc.)	Multiplatform media firm	Series A units (32 units)		9/11/2015	—	—	(2)
Columbo Midco Limited, Columbo Bidco Limited and Columbo Topco Limited (8)(9)	Compliance, accounting and tax consulting services provider	Preferred stock (34,028,135 shares)		1/3/2017	2.3	3.4
		Preferred stock (17,653,253 shares)		1/3/2017	21.6	25.8
		Preferred stock (3,232,666 shares)		1/3/2017	4.0	4.7
					27.9	33.9
Command Alkon Incorporated (20)	Software solutions provider to the ready-mix concrete industry	First lien senior secured loan ($28.6 par due 9/2023)	6.24% (Libor + 5.00%/Q)	9/1/2017	28.6	28.4	(2)(16)
		Second lien senior secured loan ($33.8 par due 3/2024)	10.24% (Libor + 9.00%/Q)	9/1/2017	33.8	33.4	(2)(16)
					62.4	61.8
Compusearch Software Systems, Inc.	Provider of enterprise software and services for organizations in the public sector	Second lien senior secured loan ($51.0 par due 11/2021)	10.06% (Libor + 8.75%/Q)	1/3/2017	51.0	51.0	(2)(16)
Compuware Parent, LLC	Web and mobile cloud performance testing and monitoring services provider	Class A-1 common stock (4,132 units)		12/15/2014	2.2	2.0	(2)
		Class B-1 common stock (4,132 units)		12/15/2014	0.4	0.4	(2)
		Class C-1 common stock (4,132 units)		12/15/2014	0.3	0.3	(2)
		Class A-2 common stock (4,132 units)		12/15/2014	—	—	(2)
		Class B-2 common stock (4,132 units)		12/15/2014	—	—	(2)
		Class C-2 common stock (4,132 units)		12/15/2014	—	—	(2)
					2.9	2.7
Convergint Technologies LLC (20)	Integrated services provider for security, fire and life safety	Second lien senior secured loan ($3.0 par due 12/2020)	9.95% (Libor + 8.50%/Q)	1/3/2017	3.0	3.0	(2)(16)
		Second lien senior secured loan ($6.0 par due 12/2020)	9.91% (Libor + 8.50%/Q)	1/3/2017	6.0	6.0	(2)(16)
		Second lien senior secured loan ($25.0 par due 12/2020)	9.50% (Libor + 8.00%/Q)	1/3/2017	25.0	25.0	(2)(16)
		Second lien senior secured loan ($8.0 par due 12/2020)	9.45% (Libor + 8.00%/Q)	1/3/2017	8.0	8.0	(2)(16)
		Second lien senior secured loan ($75.0 par due 12/2020)	9.43% (Libor + 8.00%/Q)	1/3/2017	75.0	75.0	(2)(16)
					117.0	117.0
Datapipe, Inc.	Data center provider	Second lien senior secured loan ($29.5 par due 9/2019)	9.31% (Libor + 8.00%/Q)	1/3/2017	28.5	29.5	(2)(16)
Directworks, Inc. and Co-Exprise Holdings, Inc.	Provider of cloud-based software solutions for direct materials sourcing and supplier management for manufacturers	First lien senior secured loan ($1.9 par due 4/2018)		12/19/2014	1.9	1.0	(2)(15)

10

As of September 30, 2017

(dollar amounts in millions)

(unaudited)

Company(1)	Business Description	Investment	Interest(6)(12)	Acquisition Date	Amortized Cost	Fair  Value		Percentage of Net Assets
		Warrant to purchase up to 1,875,000 shares of Series 1 preferred stock (expires 12/2024)		12/19/2014	—	—	(2)
					1.9	1.0
DTI Holdco, Inc. and OPE DTI Holdings, Inc. (20)	Provider of legal process outsourcing and managed services	First lien senior secured loan ($4.1 par due 9/2023)	6.56% (Libor + 5.25%/Q)	9/23/2016	4.1	3.9	(4)(16)
		Class A common stock (7,500 shares)		8/19/2014	7.5	6.3	(2)
		Class B common stock (7,500 shares)