Financing Arrangements

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Financing Arrangements

Financing Arrangements

Prior to June 14, 2019, in accordance with the 1940 Act, the Company was allowed to borrow amounts such that its asset coverage, calculated pursuant to the 1940 Act, was at least 200% after such borrowing. Effective June 15, 2019, the Company’s asset coverage requirement applicable to senior securities was reduced from 200% to 150%. As of September 30, 2022, the aggregate amount outstanding of the senior securities issued by the Company was $9,176. As of September 30, 2022, the Company’s asset coverage was 178%.

The following tables present summary information with respect to the Company’s outstanding financing arrangements as of September 30, 2022 and December 31, 2021. For additional information regarding these financing arrangements, see the notes to the Company’s audited consolidated financial statements contained in its annual report on Form 10-K for the year ended December 31, 2021. Any significant changes to the Company's financing arrangements during the nine months ended September 30, 2022 are discussed below.

	As of September 30, 2022 (Unaudited)
Arrangement	Type of Arrangement	Rate	Amount Outstanding		Amount Available		Maturity Date
Ambler Credit Facility(2)(9)	Revolving Credit Facility	SOFR+2.15%(1)	$	144	$	56	November 22, 2025
Burholme Prime Brokerage Facility(2)(9)	Prime Brokerage Facility	L+1.25%(1)	—		—		March 28, 2023
CCT Tokyo Funding Credit Facility(2)	Revolving Credit Facility	L+1.75% - 2.00%(1)(3)	290		10		June 2, 2025
Darby Creek Credit Facility(2)(9)	Revolving Credit Facility	L+1.85%(1)	243		7		February 26, 2025
Dunlap Credit Facility(2)(9)	Revolving Credit Facility	L+1.85%(1)	478		22		February 26, 2025
Meadowbrook Run Credit Facility(2)(9)	Revolving Credit Facility	SOFR+2.05%(1)	259		41		November 22, 2024
Senior Secured Revolving Credit Facility(2)	Revolving Credit Facility	SOFR+1.75% - 1.88%(1)(4)	2,665(5)		1,978(6)		May 17, 2027
4.625% Notes due 2024(7)	Unsecured Notes	4.63%	400		—		July 15, 2024
1.650% Notes due 2024(7)	Unsecured Notes	1.65%	500		—		October 12, 2024
4.125% Notes due 2025(7)	Unsecured Notes	4.13%	470		—		February 1, 2025
4.250% Notes due 2025(7)(9)	Unsecured Notes	4.25%	475		—		February 14, 2025
8.625% Notes due 2025(7)	Unsecured Notes	8.63%	250		—		May 15, 2025
3.400% Notes due 2026(7)	Unsecured Notes	3.40%	1,000		—		January 15, 2026
2.625% Notes due 2027(7)	Unsecured Notes	2.63%	400		—		January 15, 2027
3.250% Notes due 2027(7)	Unsecured Notes	3.25%	500		—		July 15, 2027
3.125% Notes due 2028(7)	Unsecured Notes	3.13%	750		—		October 12, 2028
CLO-1 Notes(2)(8)	Collateralized Loan Obligation	L+1.85% - 3.01%(1)	352		—		January 15, 2031
Total			$	9,176	$	2,114

___________

(1)The benchmark rate is subject to a 0% floor.

(2)The carrying amount outstanding under the facility approximates its fair value.

(3)The spread over the benchmark rate is determined by reference to the amount outstanding under the facility.

(4)The spread over the benchmark rate is determined by reference to the ratio of the value of the borrowing base to the aggregate amount of certain outstanding indebtedness of the Company. In addition to the spread over the benchmark rate, a credit spread adjustment of 0.10% and 0.0326% is applicable to borrowings in U.S. dollars and pounds sterling, respectively.

(5)Amount includes borrowing in Euros, Canadian dollars, pounds sterling and Australian dollars. Euro balance outstanding of €201 has been converted to U.S. dollars at an exchange rate of €1.00 to $0.98 as of September 30, 2022 to reflect total amount outstanding in U.S. dollars. Canadian dollar balance outstanding of CAD34 has been converted to U.S dollars at an exchange rate of CAD1.00 to $0.73 as of September 30, 2022 to reflect total amount outstanding in U.S. dollars. Pounds sterling balance outstanding of £96 has been converted to U.S dollars at an exchange rate of £1.00 to $1.11 as of September 30, 2022 to reflect total amount outstanding in U.S. dollars. Australian dollar balance outstanding of AUD80 has been converted to U.S dollars at an exchange rate of AUD1.00 to $0.64 as of September 30, 2022 to reflect total amount outstanding in U.S. dollars.

(6)The amount available for borrowing under the Senior Secured Revolving Credit Facility is reduced by any standby letters of credit issued under the Senior Secured Revolving Credit Facility. As of September 30, 2022, $12 of such letters of credit have been issued.

(7)As of September 30, 2022, the fair value of the 4.625% notes, the 1.650% notes, the 4.125% notes, the 4.250% notes, the 8.625% notes, the 3.400% notes, the 2.625% notes, the 3.250% notes and the 3.125% notes was approximately $392, $457, $445, $441, $258, $883, $323, $413 and $583, respectively. These valuations are considered Level 2 valuations within the fair value hierarchy.

(8)As of September 30, 2022, there were $281.4 of Class A-1R notes outstanding at L+1.85%, $20.5 of Class A-2R notes outstanding at L+2.25%, $32.4 of Class B-1R notes outstanding at L+2.60% and $17.4 of Class B-2R notes outstanding at 3.011%.

(9)As of June 16, 2021, the Company assumed all of FSKR's obligations under its notes, credit facilities, and FSKR's wholly-owned special purpose financing subsidiaries became wholly-owned special purpose financing subsidiaries of the Company, in each case, as a result of the consummation of the 2021 Merger.

	As of December 31, 2021
Arrangement	Type of Arrangement	Rate	Amount Outstanding		Amount Available		Maturity Date
Ambler Credit Facility(2)(9)	Revolving Credit Facility	SOFR+2.15%(1)	$	150	$	50	November 22, 2025
Burholme Prime Brokerage Facility(2)(9)	Prime Brokerage Facility	L+1.25%(1)	—		—		June 28, 2022
CCT Tokyo Funding Credit Facility(2)	Revolving Credit Facility	L+1.75% - 2.00%(1)(3)	300		—		January 2, 2025
Darby Creek Credit Facility(2)(9)	Revolving Credit Facility	L+1.85%(1)	250		—		February 26, 2025
Dunlap Credit Facility(2)(9)	Revolving Credit Facility	L+1.85%(1)	485		15		February 26, 2025
Meadowbrook Run Credit Facility(2)(9)	Revolving Credit Facility	SOFR+2.05%(1)	300		—		November 22, 2024
Senior Secured Revolving Credit Facility(2)	Revolving Credit Facility	L+1.75% - 2.00%(1)(4) SONIA+0.0326%(1)(4)	2,647(5)		1,544(6)		December 23, 2025
4.750% Notes due 2022(7)	Unsecured Notes	4.75%	450		—		May 15, 2022
4.625% Notes due 2024(7)	Unsecured Notes	4.63%	400		—		July 15, 2024
1.650% Notes due 2024(7)	Unsecured Notes	1.65%	500		—		October 12, 2024
4.125% Notes due 2025(7)	Unsecured Notes	4.13%	470		—		February 1, 2025
4.250% Notes due 2025(7)(9)	Unsecured Notes	4.25%	475		—		February 14, 2025
8.625% Notes due 2025(7)	Unsecured Notes	8.63%	250		—		May 15, 2025
3.400% Notes due 2026(7)	Unsecured Notes	3.40%	1,000		—		January 15, 2026
2.625% Notes due 2027(7)	Unsecured Notes	2.63%	400		—		January 15, 2027
3.125% Notes due 2028(7)	Unsecured Notes	3.13%	750		—		October 12, 2028
CLO-1 Notes(2)(8)	Collateralized Loan Obligation	L+1.85% - 3.01%(1)	352		—		January 15, 2031
Total			$	9,179	$	1,609

___________

(1)The benchmark rate is subject to a 0% floor.

(2)The carrying amount outstanding under the facility approximates its fair value.

(3)The spread over the benchmark rate is determined by reference to the amount outstanding under the facility.

(4)The spread over the benchmark rate is determined by reference to the ratio of the value of the borrowing base to the aggregate amount of certain outstanding indebtedness of the Company.

(5)Amount includes borrowing in Euros, Canadian dollars, pounds sterling and Australian dollars. Euro balance outstanding of €260 has been converted to U.S. dollars at an exchange rate of €1.00 to $1.14 as of December 31, 2021 to reflect total amount outstanding in U.S. dollars. Canadian dollar balance outstanding of CAD40 has been converted to U.S dollars at an exchange rate of CAD1.00 to $0.79 as of December 31, 2021 to reflect total amount outstanding in U.S. dollars. Pounds sterling balance outstanding of £130 has been converted to U.S dollars at an exchange rate of £1.00 to $1.35 as of December 31, 2021 to reflect total amount outstanding in U.S. dollars. Australian dollar balance outstanding of AUD116 has been converted to U.S dollars at an exchange rate of AUD1.00 to $0.73 as of December 31, 2021 to reflect total amount outstanding in U.S. dollars.

(6)The amount available for borrowing under the Senior Secured Revolving Credit Facility is reduced by any standby letters of credit issued under the Senior Secured Revolving Credit Facility. As of December 31, 2021, $9 of such letters of credit have been issued.

(7)As of December 31, 2021, the fair value of the 4.750% notes, the 4.625% notes, the 1.650% notes, the 4.125% notes, the 4.250% notes, the 8.625% notes, the 3.400% notes, the 2.625% notes and the 3.125% notes was approximately $455, $421, $491, $492, $497, $276, $1,016, $395 and $747, respectively. These valuations are considered Level 2 valuations within the fair value hierarchy.

(8)As of December 31, 2021, there were $281.4 of Class A-1R notes outstanding at L+1.85%, $20.5 of Class A-2R notes outstanding at L+2.25%, $32.4 of Class B-1R notes outstanding at L+2.60% and $17.4 of Class B-2R notes outstanding at 3.011%.

(9)As of June 16, 2021, the Company assumed all of FSKR’s obligations under its notes and credit facilities, and FSKR’s wholly-owned special purpose financing subsidiaries became wholly-owned special purpose financing subsidiaries of the Company, in each case, as a result of the consummation of the 2021 Merger.

For the nine months ended September 30, 2022 and 2021, the components of total interest expense for the Company's financing arrangements were as follows:

	Nine Months Ended September 30,
	2022						2021
Arrangement(1)	Direct Interest Expense		Amortization of Deferred Financing Costs and Discount / Premium		Total Interest Expense		Direct Interest Expense		Amortization of Deferred Financing Costs and Discount / Premium		Total Interest Expense
Ambler Credit Facility(2)	$	4	$	0	$	4	$	1	$	0	$	1
Burholme Prime Brokerage Facility(2)	—		—		—		—		—		—
CCT Tokyo Funding Credit Facility(2)	7		1		8		3		0		3
Darby Creek Credit Facility(2)	6		0		6		2		—		2
Dunlap Credit Facility(2)	12		0		12		3		—		3
Juniata River Credit Facility(2)	—		—		—		6		—		6
Meadowbrook Run Credit Facility(2)	6		0		6		3		—		3
Senior Secured Revolving Credit Facility(2)	69		3		72		23		2		25
4.750% Notes due 2022	6		0		6		16		0		16
5.000% Notes due 2022	—		—		—		9		—		9
4.625% Notes due 2024	14		1		15		14		1		15
1.650% Notes due 2024	6		2		8		—		—		—
4.125% Notes due 2025	15		1		16		15		1		16
4.250% Notes due 2025	15		(5)		10		6		(2)		4
8.625% Notes due 2025	16		1		17		16		1		17
3.400% Notes due 2026	25		4		29		25		4		29
2.625% Notes due 2027	7		1		8		3		0		3
3.250% Notes due 2027	11		1		12		—		—		—
3.125% Notes due 2028	18		1		19		—		—		—
CLO-1 Notes	8		0		8		6		0		6
Total	$	245	$	11	$	256	$	151	$	7	$	158

______________________

(1)Borrowings of each of the Company’s wholly-owned, special-purpose financing subsidiaries are considered borrowings of the Company for purposes of complying with the asset coverage requirements applicable to BDCs under the 1940 Act.

(2)Direct interest expense includes the effect of non-usage fees.

The Company’s average borrowings and weighted average interest rate, including the effect of non-usage fees, for the nine months ended September 30, 2022 were $9,553 and 3.43%, respectively. As of September 30, 2022, the Company’s weighted average effective interest rate on borrowings, including the effect of non-usage fees, was 4.21%.

The Company’s average borrowings and weighted average interest rate, including the effect of non-usage fees, for the nine months ended September 30, 2021 were $5,502 and 3.59%, respectively. As of September 30, 2021, the Company’s weighted average effective interest rate on borrowings, including the effect of non-usage fees, was 3.22%.

Under its financing arrangements, the Company has made certain representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar financing arrangements. The Company was in compliance with all covenants required by its financing arrangements as of September 30, 2022 and December 31, 2021.

Senior Secured Revolving Credit Facility

On May 17, 2022, the Company entered into Amendment No. 2 to the Second Amended and Restated Senior Secured Revolving Credit Agreement originally entered into on December 23, 2020, which was subsequently amended on September 27, 2021, or the

Credit Agreement, among the Company, as borrower, JPMorgan, as administrative agent, ING, as collateral agent, and the lenders party thereto.

The amendment provides for, among other things, (a) an upsize of the aggregate principal amount of the revolving credit commitments under the Credit Agreement from $4,025 to $4,640, (b) an upsize of the Company’s option to request, at one or more times, that existing and(a)/or new lenders, at their election, provide additional commitments from an amount of up to $2,013 of additional commitments to up to $2,320 of additional commitments, (c) an extension of the revolving period from December 23, 2024 to May 17, 2026, (d) an extension of the scheduled maturity date from December 23, 2025 to May 17, 2027, (e) a reduction of the applicable margin from 2.00% to 1.875% for term SOFR loans (or from 1.00% to 0.875% if the Company elects the base rate option), with a step down to 1.75% for term SOFR loans (or to 0.75% if the Company elects the base rate option) if the value of the gross borrowing base is equal to or greater than 1.60 times the aggregate amount of certain outstanding indebtedness of the Company, (f) a reduction of the commitment fee from up to 0.50% per annum (based on the immediately preceding quarter’s average usage) to 0.375% per annum, in each case, on the unused portion of its sublimit under the Credit Agreement during the revolving period, (g) the replacement of the LIBOR benchmark provisions with SOFR benchmark provisions, including applicable credit spread adjustments, (h) the availability of a swingline subfacility of up to $100, (i) the deletion of the requirement that the Company make mandatory prepayment of interest and principal upon certain events at certain times when the Company’s adjusted asset coverage ratio is less than 185%, and (j) a reset of the minimum shareholders’ equity that must be maintained, measured as of each fiscal quarter end.

On June 29, 2022, the Company entered into a commitment increase agreement with a new lender, pursuant to which the aggregate principal amount of the revolving credit commitments under the Credit Agreement increased from $4,640 to $4,655.

4.750% Notes due 2022

On March 15, 2022 the Company issued a notice of redemption providing for the redemption of its 4.750% senior notes due 2022, or the 4.750% Notes, in full on April 15, 2022 for 100% of the aggregate principal amount of the 4.750% Notes, plus the accrued and unpaid interest through, but excluding, April 15, 2022. On April 15, 2022, all of the 4.750% Notes were redeemed.

3.250% Notes due 2027

On January 18, 2022, the Company and U.S. Bank National Association, or the Trustee, entered into an Eleventh Supplemental Indenture, or the Eleventh Supplemental Indenture, to the Indenture, dated July 14, 2014, between the Company and the Trustee, or the Base Indenture, and together with the Eleventh Supplemental Indenture, the Indenture. The Eleventh Supplemental Indenture relates to the Company’s issuance of $500 aggregate principal amount of its 3.250% notes due 2027, or the 3.250% Notes.

The 3.250% Notes will mature on July 15, 2027 and may be redeemed in whole or in part at the Company’s option at any time or from time to time at the redemption prices set forth in the Indenture. The 3.250% Notes bear interest at a rate of 3.250% per year payable semi-annually on January 15th and July 15th of each year, commencing on July 15, 2022. The 3.250% Notes are general unsecured obligations of the Company that rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the 3.250% Notes, rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by the Company, rank effectively junior to any of the Company’s secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company’s subsidiaries, financing vehicles or similar facilities.

The Indenture contains certain covenants, including covenants requiring the Company to comply with the asset coverage requirements of Section 18(a)(1)(A) as modified by Section 61(a)(1) and (2) of the Investment Company Act of 1940, as amended, whether or not it is subject to those requirements, and to provide financial information to the holders of the 3.250% Notes and the Trustee if the Company is no longer subject to the reporting requirements under the Securities Exchange Act of 1934, as amended. These covenants are subject to important limitations and exceptions that are described in the Indenture.

In addition, on the occurrence of a “change of control repurchase event,” as defined in the Indenture, the Company will generally be required to make an offer to purchase the outstanding 3.250% Notes at a price equal to 100% of the principal amount of such 3.250% Notes plus accrued and unpaid interest to the repurchase date.