DEBT

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

DEBT

5. DEBT

In accordance with the Investment Company Act, the Company is allowed to borrow amounts such that its asset coverage, calculated pursuant to the Investment Company Act, is at least 150% after such borrowing. The Company’s asset coverage requirement applicable to senior securities was reduced from 200% to 150% effective June 21, 2019. As of September 30, 2024, the aggregate principal amount outstanding of the senior securities issued by the Company was $13,487 and the Company’s asset coverage was 195%.

The Company’s outstanding debt as of September 30, 2024 and December 31, 2023 was as follows:

	As of
	September 30, 2024								December 31, 2023
	Total Aggregate Principal Amount Committed/ Outstanding (1)			Principal Amount Outstanding		Carrying Value			Total Aggregate Principal Amount Committed/ Outstanding (1)			Principal Amount Outstanding		Carrying Value
Revolving Credit Facility	$	4,513	(2)	$	1,713	$	1,713		$	4,758	(2)	$	1,413	$	1,413
Revolving Funding Facility	1,775			822		822			1,775			863		863
SMBC Funding Facility	800		(3)	492		492			800		(3)	401		401
BNP Funding Facility	1,265			784		784			865			575		575
2024-1 CLO Notes(4)	476			476		473		(5)	—			—		—
2024 Convertible Notes	—			—		—		(5)	403			403		402		(5)
June 2024 Notes	—			—		—		(5)	900			900		899		(5)
March 2025 Notes	600			600		600		(5)	600			600		599		(5)
July 2025 Notes	1,250			1,250		1,252		(5)	1,250			1,250		1,255		(5)
January 2026 Notes	1,150			1,150		1,148		(5)	1,150			1,150		1,146		(5)
July 2026 Notes	1,000			1,000		995		(5)	1,000			1,000		993		(5)
January 2027 Notes	900			900		909		(5)(6)	900			900		905		(5)(6)
June 2027 Notes	500			500		496		(5)	500			500		495		(5)
June 2028 Notes	1,250			1,250		1,248		(5)	1,250			1,250		1,247		(5)
March 2029 Notes	1,000			1,000		1,005		(5)(6)	—			—		—
July 2029 Notes	850			850		871		(5)(6)	—			—		—
November 2031 Notes	700			700		692		(5)	700			700		691		(5)
Total	$	18,029		$	13,487	$	13,500		$	16,851		$	11,905	$	11,884

________________________________________

(1)Represents the total aggregate amount committed or outstanding, as applicable, under such instrument. Borrowings under the committed Revolving Credit Facility, Revolving Funding Facility, SMBC Funding Facility and BNP Funding Facility (each as defined below) are subject to borrowing base and other restrictions.

(2)Provides for a feature that allows the Company, under certain circumstances, to increase the size of the Revolving Credit Facility to a maximum of $6,732 and $7,137, as of September 30, 2024 and December 31, 2023, respectively.

(3)Provides for a feature that allows ACJB (as defined below), under certain circumstances, to increase the size of the SMBC Funding Facility to a maximum of $1,000.

(4)Excludes the CLO Subordinated Notes (as defined below), which were retained by the Company and, as such, are eliminated in consolidation. See “Debt Securitization” below for more information.

(5)Represents the aggregate principal amount outstanding, less unamortized debt issuance costs and the net unaccreted/amortized discount or premium recorded upon issuance. In March 2024, the Company repaid in full the 2024 Convertible Notes (as defined below) upon their maturity. In June 2024, the Company repaid in full the June 2024 Notes (as defined below) upon their maturity.

(6)The carrying value of the January 2027 Notes, the March 2029 Notes and the July 2029 Notes (each as defined below) as of September 30, 2024 includes adjustments as a result of effective hedge accounting relationships. The carrying value of the January 2027 Notes as of December 31, 2023 includes an adjustment as a result of an effective hedge accounting relationship. See Note 6 for more information on the interest rate swaps.

 The weighted average stated interest rate and weighted average maturity, both on aggregate principal amount outstanding, of all the Company’s outstanding debt as of September 30, 2024 were 5.2% and 3.5 years, respectively, and as of

December 31, 2023 were 4.8% and 3.0 years, respectively. The weighted average stated interest rate of all the Company’s debt outstanding as of September 30, 2024 and December 31, 2023 includes the impact of interest rate swaps. See Note 6 for more information on the interest rate swaps.

Revolving Credit Facility

The Company is party to a senior secured revolving credit facility (as amended and restated, the “Revolving Credit Facility”), that allows the Company to borrow up to $4,513 at any one time outstanding. The Revolving Credit Facility consists of a $3,400 revolving tranche and a $1,113 term loan tranche. As of September 30, 2024, the end of the revolving periods and the stated maturity dates of the various revolving and term loan tranches of the Revolving Credit Facility were as follows:

	Total Aggregate Principal Amount Committed/ Outstanding		End of Revolving Period	Maturity Date
Revolving tranche	$	3,024	April 12, 2028	April 12, 2029
	269		March 31, 2026	March 31, 2027
	107		March 31, 2025	March 31, 2026
	3,400
Term loan tranche	974			April 12, 2029
	70			April 19, 2028
	41			March 31, 2027
	28			March 31, 2026
	1,113
	$	4,513

The Revolving Credit Facility also provides for a feature that allows the Company, under certain circumstances, to increase the overall size of the Revolving Credit Facility to a maximum of $6,732. The Revolving Credit Facility generally requires payments of interest at the end of each SOFR interest period, but no less frequently than quarterly, on SOFR based loans, and monthly payments of interest on other loans. Subsequent to the end of the respective revolving periods and prior to the respective stated maturity dates, the Company is required to repay the relevant outstanding principal amounts under both the term loan tranche and revolving tranche on a monthly basis in an amount equal to 1/12th of the outstanding principal amount at the end of the respective revolving periods.

Under the Revolving Credit Facility, the Company is required to comply with various covenants, reporting requirements and other customary requirements for similar revolving credit facilities, including, without limitation, covenants related to: (a) limitations on the incurrence of additional indebtedness and liens, (b) limitations on certain investments, (c) limitations on certain restricted payments, (d) maintaining a certain minimum stockholders’ equity, (e) maintaining a ratio of total assets (less total liabilities not representing indebtedness) to total indebtedness of the Company and its consolidated subsidiaries (subject to certain exceptions) of not less than 1.5:1.0, (f) limitations on pledging certain unencumbered assets, and (g) limitations on the creation or existence of agreements that prohibit liens on certain properties of the Company and certain of its subsidiaries. These covenants are subject to important limitations and exceptions that are described in the documents governing the Revolving Credit Facility. Amounts available to borrow under the Revolving Credit Facility (and the incurrence of certain other permitted debt) are also subject to compliance with a borrowing base that applies different advance rates to different types of assets (based on their value as determined pursuant to the Revolving Credit Facility) that are pledged as collateral. As of September 30, 2024, the Company was in compliance in all material respects with the terms of the Revolving Credit Facility.

As of September 30, 2024 and December 31, 2023, there was $1,713 and $1,413 outstanding, respectively, under the Revolving Credit Facility. The Revolving Credit Facility also provides for a sub-limit for the issuance of letters of credit for up to an aggregate amount of $250 with the ability to increase by an incremental $50 on an uncommitted basis. As of September 30, 2024 and December 31, 2023, the Company had $53 and $60, respectively, in letters of credit issued through the Revolving Credit Facility. The amount available for borrowing under the Revolving Credit Facility is reduced by any letters of credit issued. As of September 30, 2024, there was $2,747, available for borrowing (net of letters of credit issued) under the Revolving Credit Facility, subject to borrowing base restrictions.

The interest rate charged on the Revolving Credit Facility is based on SOFR plus a credit spread adjustment of 0.10% (or an alternate rate of interest for certain loans, commitments and/or other extensions of credit denominated in Sterling, Canadian Dollars, Euros and certain other foreign currencies plus a spread adjustment, if applicable) and an applicable spread

of either 1.75% or 1.875% or an “alternate base rate” (as defined in the documents governing the Revolving Credit Facility) plus an applicable spread of 0.75% or 0.875%, in each case, determined monthly based on the total amount of the borrowing base relative to the sum of (i) the greater of (a) the aggregate amount of revolving exposure and term loans outstanding under the Revolving Credit Facility and (b) 85% of the total commitments of the Revolving Credit Facility (or, if higher, the total revolving exposure) plus (ii) other debt, if any, secured by the same collateral as the Revolving Credit Facility. The Revolving Credit Facility allows for borrowings to be made using one, three or six month SOFR. As of September 30, 2024, the one, three and six month SOFR was 4.85%, 4.59% and 4.25%, respectively. As of September 30, 2024, the applicable spread in effect was 1.75%. In addition to the stated interest expense on the Revolving Credit Facility, the Company is required to pay a commitment fee of 0.375% per annum on any unused portion of the Revolving Credit Facility. The Company is also required to pay a letter of credit fee of either 2.00% or 2.125% per annum on letters of credit issued, determined monthly based on the total amount of the borrowing base relative to the total commitments of the Revolving Credit Facility and other debt, if any, secured by the same collateral as the Revolving Credit Facility.

The Revolving Credit Facility is secured by certain assets in the Company’s portfolio and excludes investments held by Ares Capital CP (as defined below) under the Revolving Funding Facility, those held by ACJB under the SMBC Funding Facility, those held by AFB (as defined below) under the BNP Funding Facility and those held by ARCC CLO I (as defined below), each as described below, and certain other investments.

For the three and nine months ended September 30, 2024 and 2023, the components of interest and credit facility fees expense, cash paid for interest expense, average stated interest rates (i.e., rate in effect plus the spread) and average outstanding balances for the Revolving Credit Facility were as follows:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2024			2023			2024			2023
Stated interest expense	$	33		$	26		$	78		$	94
Credit facility fees	3			3			10			9
Amortization of debt issuance costs	2			2			7			6
Total interest and credit facility fees expense	$	38		$	31		$	95		$	109
Cash paid for interest expense	$	31		$	28		$	92		$	103
Average stated interest rate	7.22		%	7.25		%	7.33		%	6.64		%
Average outstanding balance	$	1,818		$	1,479		$	1,420		$	1,885

Letter of Credit Facility

In May 2023, the Company and Deutsche Bank AG New York Branch (the “DB Issuer”) entered into an uncommitted continuing agreement (the “Letter of Credit Facility”), which allows the DB Issuer to issue letters of credit or demand guarantees, at the request of the Company, on behalf of certain portfolio companies. The Company is required to make payments to the DB Issuer if the portfolio companies were to default on their related payment obligations. The Letter of Credit Facility is secured on a pari passu basis with the Revolving Credit Facility and pursuant to substantially the same collateral as the Revolving Credit Facility. As of September 30, 2024 and December 31, 2023, the DB Issuer had $118 and $69, respectively, in letters of credit issued under the Letter of Credit Facility.

Revolving Funding Facility

The Company and the Company’s consolidated subsidiary, Ares Capital CP Funding LLC (“Ares Capital CP”), are party to a revolving funding facility (as amended, the “Revolving Funding Facility”), that allows Ares Capital CP to borrow up to $1,775 at any one time outstanding. The Revolving Funding Facility is secured by all of the assets held by, and the membership interest in, Ares Capital CP. The end of the reinvestment period and the stated maturity date for the Revolving Funding Facility are December 29, 2024 and December 29, 2026, respectively. See Note 14 for a subsequent event relating to the Revolving Funding Facility.

Amounts available to borrow under the Revolving Funding Facility are subject to a borrowing base that applies different advance rates to different types of assets held by Ares Capital CP. Ares Capital CP is also subject to limitations with respect to the loans securing the Revolving Funding Facility, including restrictions on sector concentrations, loan size, payment frequency and status, collateral interests and loans with fixed rates, as well as restrictions on portfolio company leverage, all of which may also affect the borrowing base and therefore amounts available to borrow. The Company and Ares Capital CP are also required to comply with various covenants, reporting requirements and other customary requirements for similar facilities.

These covenants are subject to important limitations and exceptions that are described in the documents governing the Revolving Funding Facility. As of September 30, 2024, the Company and Ares Capital CP were in compliance in all material respects with the terms of the Revolving Funding Facility.

As of September 30, 2024 and December 31, 2023, there was $822 and $863 outstanding, respectively, under the Revolving Funding Facility. The interest rate charged on the Revolving Funding Facility is based on SOFR plus a credit spread adjustment of 0.10% or a “base rate” (as defined in the documents governing the Revolving Funding Facility) plus an applicable spread of 1.90% per annum. Ares Capital CP is also required to pay a commitment fee of between 0.50% and 1.25% per annum depending on the size of the unused portion of the Revolving Funding Facility.

For the three and nine months ended September 30, 2024 and 2023, the components of interest and credit facility fees expense, cash paid for interest expense, average stated interest rates (i.e., rate in effect plus the spread) and average outstanding balances for the Revolving Funding Facility were as follows:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2024			2023			2024			2023
Stated interest expense	$	17		$	16		$	41		$	44
Credit facility fees	1			1			5			4
Amortization of debt issuance costs	1			1			3			3
Total interest and credit facility fees expense	$	19		$	18		$	49		$	51
Cash paid for interest expense	$	16		$	16		$	42		$	43
Average stated interest rate	7.34		%	7.46		%	7.42		%	6.96		%
Average outstanding balance	$	872		$	863		$	721		$	847

SMBC Funding Facility

The Company and the Company’s consolidated subsidiary, Ares Capital JB Funding LLC (“ACJB”), are party to a revolving funding facility (as amended, the “SMBC Funding Facility”), with ACJB, as the borrower, and Sumitomo Mitsui Banking Corporation, as the administrative agent and collateral agent, that allows ACJB to borrow up to $800 at any one time outstanding. The SMBC Funding Facility also provides for a feature that allows ACJB, subject to receiving certain consents, to increase the overall size of the SMBC Funding Facility to $1,000. The SMBC Funding Facility is secured by all of the assets held by ACJB. The end of the reinvestment period and the stated maturity date for the SMBC Funding Facility are March 28, 2027 and March 28, 2029, respectively. The reinvestment period and the stated maturity date are both subject to two one-year extensions by mutual agreement.

Amounts available to borrow under the SMBC Funding Facility are subject to a borrowing base that applies an advance rate to assets held by ACJB. ACJB is also subject to limitations with respect to the loans securing the SMBC Funding Facility, including restrictions on sector concentrations, loan size, payment frequency and status, collateral interests and loans with fixed rates, as well as restrictions on portfolio company leverage, all of which may also affect the borrowing base and therefore amounts available to borrow. The Company and ACJB are also required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. These covenants are subject to important limitations and exceptions that are described in the documents governing the SMBC Funding Facility. As of September 30, 2024, the Company and ACJB were in compliance in all material respects with the terms of the SMBC Funding Facility.

As of September 30, 2024 and December 31, 2023, there was $492 and $401 outstanding, respectively, under the SMBC Funding Facility. Since March 28, 2024, the interest rate charged on the SMBC Funding Facility is based on an applicable spread of either (i) 2.50% over one month SOFR or (ii) 1.50% over a “base rate” (as defined in the documents governing the SMBC Funding Facility). From April 28, 2023 to March 27, 2024, the interest rate charged on the SMBC Funding Facility was based on an applicable spread of either (i) 1.75% or 2.00% over one month SOFR plus a credit spread adjustment of 0.10% or (ii) 0.75% or 1.00% over a “base rate”, in each case, determined monthly based on the amount of the average borrowings outstanding under the SMBC Funding Facility. Prior to April 28, 2023, the interest rate charged on the SMBC Funding Facility was based on an applicable spread of either (i) 1.75% or 2.00% over one month London Interbank Offered Rate (“LIBOR”) or (ii) 0.75% or 1.00% over a “base rate”, in each case, determined monthly based on the amount of the average borrowings outstanding under the SMBC Funding Facility. ACJB is required to pay a commitment fee of between 0.50% and 1.00% per annum depending on the size of the unused portion of the SMBC Funding Facility.

For the three and nine months ended September 30, 2024 and 2023, the components of interest and credit facility fees expense, cash paid for interest expense, average stated interest rates (i.e., rate in effect plus the spread) and average outstanding balances for the SMBC Funding Facility were as follows:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2024			2023			2024			2023
Stated interest expense	$	10		$	7		$	22		$	21
Credit facility fees	—			1			2			2
Amortization of debt issuance costs	1			1			2			2
Total interest and credit facility fees expense	$	11		$	9		$	26		$	25
Cash paid for interest expense	$	9		$	7		$	21		$	21
Average stated interest rate	7.80		%	7.34		%	8.11		%	6.78		%
Average outstanding balance	$	482		$	401		$	356		$	414

BNP Funding Facility

The Company and the Company’s consolidated subsidiary, ARCC FB Funding LLC (“AFB”), are party to a revolving funding facility (as amended, the “BNP Funding Facility”) with AFB, as the borrower, and BNP Paribas, as the administrative agent and lender, that allows AFB to borrow up to $1,265 at any one time outstanding. The BNP Funding Facility is secured by all of the assets held by AFB. The end of the reinvestment period and the stated maturity date for the BNP Funding Facility are July 26, 2027 and July 26, 2029, respectively. The reinvestment period and the stated maturity date are both subject to a one-year extension by mutual agreement.

Amounts available to borrow under the BNP Funding Facility are subject to a borrowing base that applies an advance rate to assets held by AFB. AFB is also subject to limitations with respect to the loans securing the BNP Funding Facility, including restrictions on sector concentrations, loan size, payment frequency and status, collateral interests and loans with fixed rates, as well as restrictions on portfolio company leverage, all of which may also affect the borrowing base and therefore amounts available to borrow. The Company and AFB are also required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. These covenants are subject to important limitations and exceptions that are described in the documents governing the BNP Funding Facility. As of September 30, 2024, the Company and AFB were in compliance in all material respects with the terms of the BNP Funding Facility.

As of September 30, 2024 and December 31, 2023, there was $784 and $575, respectively, outstanding under the BNP Funding Facility. Since July 25, 2024, the interest rate charged on the BNP Funding Facility is based on an applicable SOFR or a “base rate” (as defined in the documents governing the BNP Funding Facility) plus a margin of (i) 2.10% during the reinvestment period and (ii) 2.60% following the reinvestment period. From April 12, 2024 to July 24, 2024, the interest rate charged on the BNP Funding Facility was based on an applicable SOFR or a “base rate” plus a margin of (i) 2.50% during the reinvestment period and (ii) 3.00% following the reinvestment period. From February 2, 2024 to April 11, 2024, the interest rate charged on the BNP Funding Facility was based on an applicable SOFR or a “base rate” plus a margin of (i) 2.65% during the reinvestment period and (ii) 3.15% following the reinvestment period. From April 20, 2023 to February 1, 2024, the interest rate charged on the BNP Funding Facility was based on an applicable SOFR or a “base rate” plus a margin of (i) 2.80% during the reinvestment period and (ii) 3.30% following the reinvestment period. From January 9, 2023 to April 19, 2023, the interest rate charged on the BNP Funding Facility was based on an applicable SOFR or a “base rate” plus a margin of (i) 2.30% during the reinvestment period and (ii) 2.80% following the reinvestment period. Prior to January 9, 2023, the interest rate charged on the BNP Funding Facility was based on an applicable LIBOR or a “base rate” plus a margin of (i) 1.80% during the reinvestment period and (ii) 2.30% following the reinvestment period. As of September 30, 2024, the applicable spread in effect was 2.10%. AFB is required to pay a commitment fee of between 0.00% and 1.25% per annum depending on the size of the unused portion of the BNP Funding Facility.

For the three and nine months ended September 30, 2024 and 2023, the components of interest and credit facility fees expense, cash paid for interest expense, average stated interest rates (i.e., rate in effect plus the spread) and average outstanding balances for the BNP Funding Facility were as follows:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2024			2023			2024			2023
Stated interest expense	$	12		$	10		$	35		$	23
Credit facility fees	1			—			1			1
Amortization of debt issuance costs	1			—			1			1
Total interest and credit facility fees expense	$	14		$	10		$	37		$	25
Cash paid for interest expense	$	11		$	10		$	34		$	22
Average stated interest rate	7.52		%	8.32		%	7.76		%	7.75		%
Average outstanding balance	$	623		$	493		$	587		$	401

Debt Securitization

2024-1 CLO Notes

In May 2024, the Company, through its wholly owned, consolidated subsidiary, Ares Direct Lending CLO 1 LLC (“ARCC CLO I”), completed a $702 term debt securitization (the “2024 Debt Securitization”). The 2024 Debt Securitization is also known as a collateralized loan obligation and is an on-balance sheet 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 2024 Debt Securitization (collectively, the “2024-1 CLO Notes”) were issued by ARCC CLO I pursuant to the indenture governing the 2024-1 CLO Notes (the “CLO Indenture”) and include (i) $406 of Class A Senior Floating Rate Notes (the “Class A CLO Notes”); (ii) $70 of Class B Senior Floating Rate Notes (the “Class B CLO Notes” and, together with the Class A CLO Notes, the “CLO Secured Notes”); and (iii) $226 of Subordinated Notes (the “CLO Subordinated Notes”). The Company retained all of the CLO Subordinated Notes, as such, the CLO Subordinated Notes are eliminated in consolidation. The following table presents information on the 2024-1 CLO Notes as of September 30, 2024:

Class	Type	Principal Outstanding		Maturity Date	Interest Rate	Credit Rating
Class A CLO Notes	Senior Secured Floating Rate	$	406	April 25, 2036	SOFR+1.80%	AAA(sf)
Class B CLO Notes	Senior Secured Floating Rate	70		April 25, 2036	SOFR+2.20%	AA(sf)
Total CLO Secured Notes		476
CLO Subordinated Notes	Subordinated	226		April 25, 2036	None	Not Rated
Total 2024-1 CLO Notes		$	702

The CLO Secured Notes are the secured obligation of ARCC CLO I and are backed by a diversified portfolio of first lien senior secured loans contributed by the Company to ARCC CLO I pursuant to the terms of a contribution agreement. The CLO Indenture contains certain conditions pursuant to which additional loans can be acquired by ARCC CLO I, in accordance with rating agency criteria or as otherwise agreed with certain institutional investors who purchased the CLO Secured Notes. The CLO Subordinated Notes, which were retained by the Company, are the unsecured obligations of ARCC CLO I. Through April 25, 2028, all principal collections received on the underlying collateral may be used by ARCC CLO I to purchase new collateral under the direction of the Company’s investment adviser in its capacity as asset manager to ARCC CLO I under an asset management agreement and in accordance with the Company’s investment strategy, including additional collateral that may be purchased from the Company, pursuant to the terms of a master purchase and sale agreement between the Company as seller and ARCC CLO I as buyer.

The CLO Indenture includes customary covenants and defaults. The 2024-1 CLO Notes have not been, and will not be, registered under the Securities Act of 1933, as amended (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’s investment adviser serves as asset manager to ARCC CLO I under an asset management agreement and is entitled to receive certain management fees for providing these services under the agreement. The Company’s investment adviser has waived its right to receive such fees but may rescind such waiver with respect to the CLO Secured Notes at any time.

The interest rate charged on the CLO Secured Notes is based on SOFR plus a blended weighted average spread of 1.86%. For the three and nine months ended September 30, 2024, the components of interest expense, cash paid for interest

expense, average stated interest rates (i.e., rate in effect plus the spread) and average outstanding balances for the CLO Secured Notes were as follows.

	For the Three Months Ended September 30, 2024			For the Nine Months Ended September 30, 2024
Stated interest expense	$	9		$	13
Amortization of debt issuance costs	—			—
Total interest expense	$	9		$	13
Cash paid for interest expense	$	—		$	—
Average stated interest rate	7.32		%	7.26		%
Average outstanding balance	$	476		$	226

See Note 14 for a subsequent event relating to an additional term debt securitization.

2024 Convertible Unsecured Notes

In March 2024, the Company repaid in full the $403 in aggregate principal amount of unsecured convertible notes, which bore interest at a rate of 4.625% per year, payable semi-annually (the “2024 Convertible Notes”) upon their maturity, resulting in a realized loss on extinguishment of debt of $14. In accordance with the indenture governing the 2024 Convertible Notes, the Company settled the repayment of the 2024 Convertible Notes with a combination of cash and shares of its common stock. Approximately $393 of aggregate principal amount was settled with approximately 20 shares of the Company’s common stock and the remaining $10 was settled with available cash.

For the three and nine months ended September 30, 2024 and 2023, the components of interest expense and cash paid for interest expense for the 2024 Convertible Notes were as follows.

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023
Stated interest expense	$	—	$	5	$	3	$	14
Accretion of original issue discount	—		1		—		2
Total interest expense	$	—	$	6	$	3	$	16
Cash paid for interest expense	$	—	$	—	$	9	$	9

Unsecured Notes

The Company has issued certain unsecured notes (each issuance of which is referred to herein using the “defined term” set forth under the “Unsecured Notes” column of the table below and collectively referred to as the “Unsecured Notes”), that pay interest semi-annually and all principal amounts are due upon maturity. Each of the Unsecured Notes may be redeemed in whole or in part at any time at the Company’s option at a redemption price equal to par plus a “make whole” premium, if applicable, as determined pursuant to the indentures governing each of the Unsecured Notes, plus any accrued and unpaid interest. Certain key terms related to the features for the Unsecured Notes as of September 30, 2024 are listed below.

Unsecured Notes	Aggregate Principal Amount Issued		Effective Stated Interest Rate	Original Issuance Date	Maturity Date
March 2025 Notes	$	600	4.250%	January 11, 2018	March 1, 2025
July 2025 Notes	$	1,250	3.250%	January 15, 2020	July 15, 2025
January 2026 Notes	$	1,150	3.875%	July 15, 2020	January 15, 2026
July 2026 Notes	$	1,000	2.150%	January 13, 2021	July 15, 2026
January 2027 Notes(1)	$	900	7.678%	August 3, 2023	January 15, 2027
June 2027 Notes	$	500	2.875%	January 13, 2022	June 15, 2027
June 2028 Notes	$	1,250	2.875%	June 10, 2021	June 15, 2028
March 2029 Notes(1)	$	1,000	7.223%	January 23, 2024	March 1, 2029
July 2029 Notes(1)	$	850	6.740%	May 13, 2024	July 15, 2029
November 2031 Notes	$	700	3.200%	November 4, 2021	November 15, 2031

________________________________________

(1)The effective stated interest rates for the January 2027 Notes, the March 2029 Notes and the July 2029 Notes include the impact of interest rate swaps.

In June 2024, the Company repaid in full the $900 in aggregate principal amount outstanding of unsecured notes (the “June 2024 Notes”) upon their maturity. The June 2024 Notes bore interest at a rate of 4.200% per annum, payable semi-annually.

In connection with certain of the unsecured notes issued by the Company, the Company has entered into interest rate swap agreements to more closely align the interest rates of such liabilities with the Company’s investment portfolio, which consists primarily of floating rate loans. Under the interest rate swap agreements, the Company receives a fixed interest rate and pays a floating interest rate of one-month SOFR plus an applicable spread, as disclosed below. The Company designated these interest rate swaps and the associated unsecured notes as qualifying fair value hedge accounting relationships. Certain information related to the Company’s interest rate swap instruments as of September 30, 2024 is presented below.

Description	Hedged Item	Company Receives		Company Pays	Maturity Date	Notional Amount
Interest rate swap	January 2027 Notes	7.000	%	SOFR +2.581%	January 15, 2027	$	900
Interest rate swap	March 2029 Notes	5.875	%	SOFR +2.023%	March 1, 2029	$	1,000
Interest rate swap	July 2029 Notes	5.950	%	SOFR +1.643%	July 15, 2029	$	850

See Note 6 for more information on the interest rate swaps.

For the three and nine months ended September 30, 2024 and 2023, the components of interest expense and cash paid for interest expense for the Unsecured Notes, as well as any other unsecured notes outstanding during the periods presented were as follows.

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023
Stated interest expense(1)	$	102	$	69	$	298	$	193
Amortization of debt issuance costs	4		4		12		11
Net amortization of original issue premium/discount	(2)		(2)		(5)		(5)
Total interest expense	$	104	$	71	$	305	$	199
Cash paid for interest expense(1)	$	162	$	80	$	315	$	214

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(1)Includes the impact of the interest rate swaps.

The Unsecured Notes contain certain covenants, including covenants requiring the Company to comply with Section 18(a)(1)(A) as modified by Section 61(a) of the Investment Company Act, or any successor provisions, and to provide financial information to the holders of such notes under certain circumstances. These covenants are subject to important limitations and exceptions set forth in the indentures governing such notes. As of September 30, 2024, the Company was in compliance in all material respects with the terms of the respective indentures governing each of the Unsecured Notes.

The Unsecured Notes are the Company’s senior unsecured obligations and rank senior in right of payment to any future indebtedness that is expressly subordinated in right of payment to the Unsecured Notes; equal in right of payment to the Company’s existing and future unsecured indebtedness that is not expressly subordinated; effectively junior in right of payment to any of its secured indebtedness (including existing unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company’s subsidiaries, financing vehicles or similar facilities.