10-Q 1 gbdcfy2017q3.htm 10-Q Document
______________________________________________________________________________________________________

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
______________________________________________________________________________________________________ 
FORM 10-Q

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

For the Quarterly Period Ended June 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 Number 814-00794

Golub Capital BDC, Inc.
(Exact name of registrant as specified in its charter)

Delaware
 
27-2326940
(State or other jurisdiction of incorporation or organization)
 
 (I.R.S. Employer Identification No.)

666 Fifth Avenue, 18th Floor
New York, NY 10103
(Address of principal executive offices)

(212) 750-6060
(Registrant's telephone number, including area code)

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 þ   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 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, a 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.
Large accelerated filer  þ
Accelerated filer o
Non-accelerated filer  o  (Do not check if a smaller reporting company)
Smaller reporting company o
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 13(a) of the Exchange 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 þ

As of August 7, 2017, the Registrant had 59,455,395 shares of common stock, $0.001 par value, outstanding.

1


Part I. Financial Information
  
Item 1.
Financial Statements
 
Consolidated Statements of Financial Condition as of June 30, 2017 (unaudited) and September 30, 2016
 
Consolidated Statements of Operations for the three and nine months ended June 30, 2017 (unaudited) and 2016 (unaudited)
 
Consolidated Statements of Changes in Net Assets for the nine months ended June 30, 2017 (unaudited) and 2016 (unaudited)
 
Consolidated Statements of Cash Flows for the nine months ended June 30, 2017 (unaudited) and 2016 (unaudited)
 
Consolidated Schedules of Investments as of June 30, 2017 (unaudited) and September 30, 2016
 
Notes to Consolidated Financial Statements (unaudited)
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
Item 4.
Controls and Procedures
Part II. Other Information
 
Item 1.
Legal Proceedings
Item 1A.
Risk Factors
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.
Defaults Upon Senior Securities
Item 4.
Mine Safety Disclosures
Item 5.
Other Information
Item 6.
Exhibits


2


Golub Capital BDC, Inc. and Subsidiaries
Consolidated Statements of Financial Condition
(In thousands, except share and per share data)
 
June 30, 2017
 
September 30, 2016
 
(unaudited)
 
 
Assets
  

 
  

Investments, at fair value
  

 
  

Non-controlled/non-affiliate company investments
$
1,692,929

 
$
1,546,766

Non-controlled affiliate company investments

 
9,618

Controlled affiliate company investments
108,879

 
104,228

Total investments at fair value (amortized cost of $1,781,227 and $1,650,173, respectively)
1,801,808

 
1,660,612

Cash and cash equivalents
12,827

 
10,947

Restricted cash and cash equivalents
33,042

 
78,593

Interest receivable
5,871

 
5,935

Receivable from investments sold
1,317

 

Other assets
174

 
422

Total Assets
$
1,855,039

 
$
1,756,509

Liabilities
  

 
  

Debt
$
883,400

 
$
864,700

Less unamortized debt issuance costs
4,284

 
5,627

Debt less unamortized debt issuance costs
879,116

 
859,073

Secured borrowings, at fair value (proceeds of $403 and $471, respectively)
406

 
475

Interest payable
6,274

 
3,229

Management and incentive fees payable
13,404

 
12,763

Accounts payable and accrued expenses
2,264

 
2,072

Payable for investments purchased
5,294

 

Accrued trustee fees
62

 
72

Total Liabilities
906,820

 
877,684

Commitments and Contingencies (Note 8)
  

 
  

Net Assets
  

 
  

Preferred stock, par value $0.001 per share, 1,000,000 shares authorized, zero shares issued and outstanding as of June 30, 2017 and September 30, 2016

 

Common stock, par value $0.001 per share, 100,000,000 shares authorized, 59,235,174 and 55,059,067 shares issued and outstanding as of June 30, 2017 and September 30, 2016, respectively
59

 
55

Paid in capital in excess of par
932,970

 
855,998

Undistributed net investment income
3,862

 
18,832

Net unrealized appreciation (depreciation) on investments and secured borrowings
23,247

 
13,104

Net realized gain (loss) on investments
(11,919
)
 
(9,164
)
Total Net Assets
948,219

 
878,825

Total Liabilities and Total Net Assets
$
1,855,039

 
$
1,756,509

Number of common shares outstanding
59,235,174

 
55,059,067

Net asset value per common share
$
16.01

 
$
15.96


See Notes to Consolidated Financial Statements.


3


Golub Capital BDC, Inc. and Subsidiaries
Consolidated Statements of Operations (unaudited)
(In thousands, except share and per share data)
 
Three months ended June 30,
 
Nine months ended June 30,
  
2017
 
2016
 
2017
 
2016
Investment income
  

 
  

 
 
 
 
From non-controlled/non-affiliate company investments:
  

 
  

 
 
 
 
Interest income
$
32,877

 
$
28,752

 
$
94,238

 
$
83,641

Dividend income
278

 
111

 
438

 
393

Fee income
990

 
60

 
1,422

 
834

Total investment income from non-controlled/non-affiliate company investments
34,145

 
28,923

 
96,098

 
84,868

From non-controlled affiliate company investments:
  

 
  

 
 
 
 
Interest income
372

 
316

 
1,023

 
337

Total investment income from non-controlled affiliate company investments
372

 
316

 
1,023

 
337

From controlled affiliate company investments:
  

 
  

 
 
 
 
Interest income

 
1,799

 
1,639

 
5,192

Dividend income
891

 
1,068

 
4,054

 
2,971

Total investment income from controlled affiliate company investments
891

 
2,867

 
5,693

 
8,163

Total investment income
35,408

 
32,106

 
102,814

 
93,368

Expenses
  

 
  

 
 
 
 
Interest and other debt financing expenses
8,099

 
7,019

 
23,379

 
20,583

Base management fee
6,059

 
5,567

 
17,744

 
16,286

Incentive fee
2,073

 
2,311

 
6,274

 
4,262

Professional fees
638

 
692

 
1,935

 
2,123

Administrative service fee
595

 
531

 
1,720

 
1,643

General and administrative expenses
136

 
101

 
437

 
386

Total expenses
17,600

 
16,221

 
51,489

 
45,283

Net investment income - before excise tax
17,808

 
15,885

 
51,325

 
48,085

Excise tax

 

 
17

 
333

Net investment income - after excise tax
17,808

 
15,885

 
51,308

 
47,752

Net gain (loss) on investments and secured borrowings
  

 
  

 
 
 
 
Net realized gain (loss) on investments:
  

 
  

 
 
 
 
Non-controlled/non-affiliate company investments
3,233

 
(5,416
)
 
4,826

 
(2,982
)
Non-controlled affiliate company investments
(6,442
)
 

 
(6,442
)
 
2,722

Net realized gain (loss) on investments
(3,209
)
 
(5,416
)
 
(1,616
)
 
(260
)
Net change in unrealized appreciation (depreciation) on investments:
  

 
  

 
 
 
 
Non-controlled/non-affiliate company investments
(245
)
 
7,254

 
4,743

 
10,203

Non-controlled affiliate company investments
5,658

 
(253
)
 
5,228

 
(3,052
)
Controlled affiliate company investments
99

 
818

 
171

 
(1,539
)
Net change in unrealized appreciation (depreciation) on investments
5,512

 
7,819

 
10,142

 
5,612

Net change in unrealized appreciation (depreciation) on secured borrowings

 
1

 
1

 
1

Net gain (loss) on investments and secured borrowings
2,303

 
2,404

 
8,527

 
5,353

Net increase in net assets resulting from operations
$
20,111

 
$
18,289

 
$
59,835

 
$
53,105

Per Common Share Data
  

 
  

 
 
 
 
Basic and diluted earnings per common share
$
0.35

 
$
0.35

 
$
1.07

 
$
1.03

Dividends and distributions declared per common share
$
0.32

 
$
0.32

 
$
1.21

 
$
0.96

Basic and diluted weighted average common shares outstanding
57,719,505

 
51,513,685

 
56,058,642

 
51,399,363


See Notes to Consolidated Financial Statements.

4


Golub Capital BDC, Inc. and Subsidiaries
Consolidated Statements of Changes in Net Assets (unaudited)
(In thousands, except share data)
 
 
 
 
 
 
 
Net Unrealized Appreciation (Depreciation) on Investments and Secured Borrowings
 
 
 
 
 
Common Stock
 
Paid in Capital in Excess of Par
 
Undistributed Net Investment Income
 
 
Net Realized Gain (Loss) on Investments
 
 
 
Shares
 
Par Amount
 
 
 
 
 
Total Net Assets
Balance at September 30, 2015
51,300,193

 
$
51

 
$
790,713

 
$
4,230

 
$
15,134

 
$
742

 
$
810,870

Net increase in net assets resulting from operations

 

 

 
47,752

 
5,613

 
(260
)
 
53,105

Distributions to stockholders:
  

 
  

 
  

 
  

 
  

 
  

 
 
Stock issued in connection with dividend reinvestment plan
323,132

 
1

 
5,347

 

 

 

 
5,348

Distributions from net investment income

 

 

 
(36,924
)
 

 

 
(36,924
)
Distributions from realized gain

 

 

 

 

 
(12,418
)
 
(12,418
)
Total increase (decrease) for the period ended June 30, 2016
323,132

 
1

 
5,347

 
10,828

 
5,613

 
(12,678
)
 
9,111

Balance at June 30, 2016
51,623,325

 
$
52

 
$
796,060

 
$
15,058

 
$
20,747

 
$
(11,936
)
 
$
819,981

Balance at September 30, 2016
55,059,067

 
$
55

 
$
855,998

 
$
18,832

 
$
13,104

 
$
(9,164
)
 
$
878,825

Issuance of common stock, net of offering and underwriting costs(1)
3,762,500

 
4

 
69,489

 

 

 

 
69,493

Net increase in net assets resulting from operations

 

 

 
51,308

 
10,143

 
(1,616
)
 
59,835

Distributions to stockholders:
  

 
  

 
  

 
  

 
  

 
  

 
 
Stock issued in connection with dividend reinvestment plan
413,607

 

 
7,483

 

 

 

 
7,483

Distributions from net investment income

 

 

 
(66,278
)
 

 

 
(66,278
)
Distributions from realized gain

 

 

 

 

 
(1,139
)
 
(1,139
)
Total increase (decrease) for the period ended June 30, 2017
4,176,107

 
4

 
76,972

 
(14,970
)
 
10,143

 
(2,755
)
 
69,394

Balance at June 30, 2017
59,235,174

 
$
59

 
$
932,970

 
$
3,862

 
$
23,247

 
$
(11,919
)
 
$
948,219


(1) 
On March 21, 2017, Golub Capital BDC, Inc. priced a public offering of 1,750,000 shares of its common stock at a public offering price of $19.03 per share. On April 6, 2017, Golub Capital BDC, Inc. sold an additional 262,500 shares of its common stock at a public offering price of $19.03 per share pursuant to the underwriter's exercise of the option to purchase additional shares granted in connection with the public offering in March 2017. On June 6, 2017, Golub Capital BDC, Inc. entered into an agreement to sell 1,750,000 shares of its common stock pursuant to an underwritten, public offering at a price to the Company of $18.71 per share.


See Notes to Consolidated Financial Statements.


5


Golub Capital BDC, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (unaudited)
(In thousands)
 
Nine months ended June 30,
  
2017
 
2016
Cash flows from operating activities
  

 
  

Net increase in net assets resulting from operations
$
59,835

 
$
53,105

Adjustments to reconcile net increase in net assets resulting from operations
to net cash (used in) provided by operating activities
  

 
  

Amortization of deferred debt issuance costs
2,488

 
3,227

Accretion of discounts and amortization of premiums
(6,792
)
 
(5,895
)
Net realized (gain) loss on investments
1,616

 
260

Net change in unrealized (appreciation) depreciation on investments
(10,142
)
 
(5,612
)
Net change in unrealized appreciation (depreciation) on secured borrowings
(1
)
 
(1
)
Proceeds from (fundings of) revolving loans, net
959

 
(2,624
)
Fundings of investments
(461,763
)
 
(471,480
)
Proceeds from principal payments and sales of portfolio investments
336,464

 
387,316

PIK interest
(1,537
)
 
(689
)
Changes in operating assets and liabilities:
  

 
  

Interest receivable
64

 
(7
)
Receivable from investments sold
(1,317
)
 

Other assets
248

 
(128
)
Interest payable
3,045

 
2,578

Management and incentive fees payable
641

 
(419
)
Payable for investments purchased
5,294

 
1,949

Accounts payable and accrued expenses
192

 
(292
)
Accrued trustee fees
(10
)
 
(1
)
Net cash (used in) provided by operating activities
(70,716
)
 
(38,713
)
Cash flows from investing activities
  

 
  

Net change in restricted cash and cash equivalents
45,551

 
33,289

Net cash (used in) provided by investing activities
45,551

 
33,289

Cash flows from financing activities
  

 
  

Borrowings on debt
419,350

 
288,050

Repayments of debt
(400,650
)
 
(239,250
)
Capitalized debt issuance costs
(1,145
)
 
(1,654
)
Repayments on secured borrowings
(69
)
 
(29
)
Proceeds from shares sold, net of underwriting costs
69,893

 

Offering costs paid
(400
)
 

Distributions paid
(59,934
)
 
(43,994
)
Net cash provided by (used in) financing activities
27,045

 
3,123

Net change in cash and cash equivalents
1,880

 
(2,301
)
Cash and cash equivalents, beginning of period
10,947

 
5,468

Cash and cash equivalents, end of period
$
12,827

 
$
3,167

Supplemental disclosure of cash flow information:
  

 
  

Cash paid during the period for interest
$
17,836

 
$
14,766

Distributions declared during the period
67,417

 
49,342

Supplemental disclosure of noncash operating activity:
 
 
 
Funding of LLC equity interest in SLF
$
(78,689
)
 
$

Proceeds from subordinated notes in SLF principal payment
78,689

 

Supplemental disclosure of noncash financing activity:
 
 
 
Proceeds from issuance of Class A-Refi 2010 Notes
$
205,000

 
$

Redemptions of Class A and Class B 2010 Notes
(205,000
)
 

See Notes to Consolidated Financial Statements.

6

Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited)
June 30, 2017
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Investments
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Non-controlled/non-affiliate company investments
 
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Debt investments
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Aerospace and Defense
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

ILC Dover, LP*^#
One stop
 
L + 9.00%
 
8.23% cash/2.00% PIK
 
03/2020
 
$
17,645

 
$
17,539

 
1.9

%
$
17,645

ILC Dover, LP
One stop
 
L + 9.00%
 
8.23% cash/2.00% PIK
 
03/2019
 
797

 
791

 
0.1

 
797

NTS Technical Systems*^#
One stop
 
L + 6.00%
 
7.05%
 
06/2021
 
21,773

 
21,466

 
2.3

 
21,773

NTS Technical Systems(4)
One stop
 
L + 6.00%
 
N/A(5)
 
06/2021
 

 
(77
)
 

 

NTS Technical Systems(4)
One stop
 
L + 6.00%
 
N/A(5)
 
06/2021
 

 
(128
)
 

 

Tresys Technology Holdings, Inc.(6)
One stop
 
L + 6.75%
 
8.05%
 
12/2017
 
3,899

 
3,845

 
0.1

 
1,170

Tresys Technology Holdings, Inc.(6)
One stop
 
L + 6.75%
 
8.01%
 
12/2017
 
659

 
658

 
0.1

 
659

Tresys Technology Holdings, Inc.
One stop
 
P + 7.50%
 
11.75%
 
12/2017
 
40

 
40

 

 
40

Tronair Parent, Inc.#
Senior loan
 
L + 4.75%
 
5.84%
 
09/2023
 
192

 
190

 

 
190

Tronair Parent, Inc.
Senior loan
 
L + 4.50%
 
5.59%
 
09/2021
 
20

 
19

 

 
19

Whitcraft LLC*^#
One stop
 
L + 6.25%
 
7.55%
 
04/2023
 
12,596

 
12,415

 
1.3

 
12,470

Whitcraft LLC
One stop
 
P + 5.25%
 
9.50%
 
04/2023
 
5

 
4

 

 
4

Whitcraft LLC(4)
One stop
 
L + 6.25%
 
N/A(5)
 
04/2023
 

 
(5
)
 

 
(3
)
 
 
 
 
 
 
 
 
 
57,626

 
56,757

 
5.8

 
54,764

Automobile
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Dent Wizard International Corporation*
Senior loan
 
L + 4.75%
 
5.97%
 
04/2020
 
4,534

 
4,508

 
0.5

 
4,534

OEConnection LLC*
Senior loan
 
L + 5.00%
 
6.30%
 
06/2022
 
4,846

 
4,742

 
0.5

 
4,798

OEConnection LLC^
Senior loan
 
L + 4.75%
 
6.05%
 
06/2022
 
2,597

 
2,571

 
0.3

 
2,571

OEConnection LLC(4)
Senior loan
 
L + 5.00%
 
N/A(5)
 
06/2021
 

 
(1
)
 

 
(1
)
T5 Merger Corporation^#
One stop
 
L + 6.25%
 
7.30%
 
03/2022
 
4,392

 
4,319

 
0.4

 
4,392

T5 Merger Corporation
One stop
 
L + 6.25%
 
7.41%
 
03/2022
 
108

 
106

 

 
108

T5 Merger Corporation
One stop
 
L + 6.25%
 
7.33%
 
03/2022
 
60

 
59

 

 
60

T5 Merger Corporation(4)
One stop
 
L + 6.25%
 
N/A(5)
 
03/2022
 

 
(2
)
 

 

  
 
 
 
 
 
 
 
 
16,537

 
16,302

 
1.7

 
16,462

Banking
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
HedgeServ Holding L.P.*#
One stop
 
L + 8.00%
 
7.16% cash/2.00% PIK
 
02/2019
 
17,151

 
17,109

 
1.8

 
17,151

HedgeServ Holding L.P.(4)
One stop
 
L + 8.00%
 
N/A(5)
 
02/2019
 

 
(3
)
 

 

 
 
 
 
 
 
 
 
 
17,151

 
17,106

 
1.8

 
17,151

Beverage, Food and Tobacco
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Abita Brewing Co., L.L.C.
One stop
 
L + 6.25%
 
7.23% cash/0.25% PIK
 
04/2021
 
7,837

 
7,720

 
0.8

 
7,601

Abita Brewing Co., L.L.C.(4)
One stop
 
L + 6.25%
 
N/A(5)
 
04/2021
 

 
(1
)
 

 
(1
)
ABP Corporation*
Senior loan
 
L + 4.75%
 
6.00%
 
09/2018
 
4,659

 
4,640

 
0.5

 
4,499

ABP Corporation
Senior loan
 
P + 3.50%
 
7.75%
 
09/2018
 
292

 
290

 

 
275

Atkins Nutritionals, Inc.*^
One stop
 
L + 8.50%
 
9.75%
 
04/2019
 
21,636

 
21,515

 
2.3

 
21,636

Atkins Nutritionals, Inc.*^#
One stop
 
L + 5.00%
 
6.25%
 
01/2019
 
13,262

 
13,185

 
1.4

 
13,262

Benihana, Inc.*^
One stop
 
L + 7.00%
 
8.25%
 
01/2019
 
16,140

 
15,954

 
1.7

 
15,992

Benihana, Inc.
One stop
 
L + 7.00%
 
9.09%
 
07/2018
 
1,020

 
1,000

 
0.1

 
1,000

C. J. Foods, Inc.*^
One stop
 
L + 6.25%
 
7.55%
 
05/2019
 
5,218

 
5,171

 
0.6

 
5,218

C. J. Foods, Inc.
One stop
 
L + 6.25%
 
7.55%
 
05/2019
 
658

 
652

 
0.1

 
658

C. J. Foods, Inc.
One stop
 
L + 6.25%
 
7.41%
 
05/2019
 
172

 
167

 

 
172

Firebirds International, LLC*
One stop
 
L + 5.75%
 
7.00%
 
05/2018
 
1,065

 
1,062

 
0.1

 
1,065

Firebirds International, LLC*
One stop
 
L + 5.75%
 
7.00%
 
05/2018
 
299

 
298

 

 
299

Firebirds International, LLC^
One stop
 
L + 5.75%
 
7.00%
 
05/2018
 
96

 
96

 

 
96

Firebirds International, LLC
One stop
 
L + 5.75%
 
N/A(5)
 
05/2018
 

 

 

 

First Watch Restaurants, Inc.*^
One stop
 
L + 6.00%
 
7.38%
 
12/2020
 
15,137

 
15,029

 
1.6

 
15,137

First Watch Restaurants, Inc.*
One stop
 
L + 6.00%
 
7.30%
 
12/2020
 
1,248

 
1,241

 
0.1

 
1,248

First Watch Restaurants, Inc.*
One stop
 
L + 6.00%
 
7.30%
 
12/2020
 
1,246

 
1,238

 
0.1

 
1,246

First Watch Restaurants, Inc.
One stop
 
L + 6.00%
 
7.30%
 
12/2020
 
1,075

 
1,069

 
0.1

 
1,075

First Watch Restaurants, Inc.
One stop
 
P + 5.00%
 
9.25%
 
12/2020
 
721

 
718

 
0.1

 
721


See Notes to Consolidated Financial Statements.
7




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
June 30, 2017
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Beverage, Food and Tobacco - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
First Watch Restaurants, Inc.
One stop
 
L + 6.00%
 
N/A(5)
 
12/2020
 
$

 
$

 

%
$

Hopdoddy Holdings, LLC
One stop
 
L + 8.00%
 
9.23%
 
08/2020
 
655

 
646

 
0.1

 
655

Hopdoddy Holdings, LLC
One stop
 
L + 8.00%
 
N/A(5)
 
08/2020
 

 

 

 

Hopdoddy Holdings, LLC(4)
One stop
 
L + 8.00%
 
N/A(5)
 
08/2020
 

 
(2
)
 

 

Julio & Sons Company
One stop
 
L + 5.50%
 
N/A(5)
 
12/2018
 

 

 

 

Mid-America Pet Food, L.L.C.^
One stop
 
L + 6.25%
 
7.55%
 
12/2021
 
5,655

 
5,578

 
0.6

 
5,655

Mid-America Pet Food, L.L.C.(4)
One stop
 
L + 6.25%
 
N/A(5)
 
12/2021
 

 
(1
)
 

 

P&P Food Safety US Acquisition, Inc.*
One stop
 
L + 6.50%
 
7.77%
 
11/2021
 
4,136

 
4,091

 
0.4

 
4,136

P&P Food Safety US Acquisition, Inc.
One stop
 
L + 6.50%
 
N/A(5)
 
11/2021
 

 

 

 

Purfoods, LLC
One stop
 
L + 6.25%
 
7.45%
 
05/2021
 
8,582

 
8,418

 
0.9

 
8,582

Purfoods, LLC
One stop
 
N/A
 
7.00% PIK
 
05/2026
 
109

 
109

 

 
110

Purfoods, LLC
One stop
 
L + 6.25%
 
7.42%
 
05/2021
 
65

 
64

 

 
65

Purfoods, LLC
One stop
 
L + 6.25%
 
7.34%
 
05/2021
 
15

 
15

 

 
15

Purfoods, LLC
One stop
 
L + 6.25%
 
7.34%
 
05/2021
 
14

 
14

 

 
14

Purfoods, LLC
One stop
 
L + 6.25%
 
7.55%
 
05/2021
 
10

 
10

 

 
10

Purfoods, LLC(4)
One stop
 
L + 6.25%
 
N/A(5)
 
05/2021
 

 
(1
)
 

 

Restaurant Holding Company, LLC#
Senior loan
 
L + 7.75%
 
8.98%
 
02/2019
 
4,499

 
4,482

 
0.5

 
4,409

Rubio's Restaurants, Inc.*^
Senior loan
 
L + 4.75%
 
6.04%
 
11/2018
 
8,851

 
8,825

 
0.9

 
8,851

Smashburger Finance LLC
Senior loan
 
L + 5.50%
 
6.80%
 
05/2018
 
83

 
82

 

 
78

Smashburger Finance LLC(4)
Senior loan
 
L + 5.50%
 
N/A(5)
 
05/2018
 

 
(1
)
 

 

Surfside Coffee Company LLC#
One stop
 
L + 5.25%
 
6.55%
 
06/2020
 
4,436

 
4,409

 
0.5

 
4,436

Surfside Coffee Company LLC
One stop
 
L + 5.25%
 
6.54%
 
06/2020
 
335

 
333

 

 
335

Surfside Coffee Company LLC
One stop
 
L + 5.25%
 
6.46%
 
06/2020
 
25

 
25

 

 
25

Tate's Bake Shop, Inc.#
Senior loan
 
L + 5.00%
 
6.30%
 
08/2019
 
593

 
589

 
0.1

 
593

Uinta Brewing Company^
One stop
 
L + 8.50%
 
9.73%
 
08/2019
 
3,734

 
3,719

 
0.4

 
3,623

Uinta Brewing Company
One stop
 
L + 8.50%
 
9.72%
 
08/2019
 
539

 
535

 
0.1

 
517

 
 
 
 
 
 
 
 
 
134,117

 
132,983

 
14.1

 
133,308

Broadcasting and Entertainment
 
 
 
 
 
 
 
 
  

 
  

 
 
 
  

TouchTunes Interactive Networks, Inc.^
Senior loan
 
L + 4.75%
 
6.05%
 
05/2021
 
1,466

 
1,461

 
0.2

 
1,475

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Building and Real Estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brooks Equipment Company, LLC*^
One stop
 
L + 5.00%
 
6.21%
 
08/2020
 
22,720

 
22,541

 
2.4

 
22,720

Brooks Equipment Company, LLC*
One stop
 
L + 5.00%
 
6.20%
 
08/2020
 
5,598

 
5,560

 
0.6

 
5,598

Brooks Equipment Company, LLC(4)
One stop
 
L + 5.00%
 
N/A(5)
 
08/2020
 

 
(11
)
 

 

ITEL Laboratories, Inc.*
Senior loan
 
L + 4.50%
 
5.80%
 
06/2018
 
545

 
544

 
0.1

 
545

ITEL Laboratories, Inc.
Senior loan
 
L + 4.50%
 
N/A(5)
 
06/2018
 

 

 

 

Jensen Hughes, Inc.#
Senior loan
 
L + 5.00%
 
6.23%
 
12/2021
 
134

 
133

 

 
134

MRI Software LLC^
One stop
 
L + 6.00%
 
7.30%
 
06/2023
 
23,983

 
23,344

 
2.5

 
23,744

MRI Software LLC(4)
One stop
 
L + 6.00%
 
N/A(5)
 
06/2023
 

 
(3
)
 

 
(2
)
MRI Software LLC(4)
One stop
 
L + 6.00%
 
N/A(5)
 
06/2023
 

 
(8
)
 

 
(3
)
 
 
 
 
 
 
 
 
 
52,980

 
52,100

 
5.6

 
52,736

Chemicals, Plastics and Rubber
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Flexan, LLC*
One stop
 
L + 5.75%
 
7.05%
 
02/2020
 
2,339

 
2,320

 
0.2

 
2,339

Flexan, LLC
One stop
 
L + 5.75%
 
N/A(5)
 
02/2020
 

 

 

 

 
 
 
 
 
 
 
 
 
2,339

 
2,320

 
0.2

 
2,339

Diversified/Conglomerate Manufacturing
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Chase Industries, Inc.*^#
One stop
 
L + 5.75%
 
6.90%
 
09/2020
 
30,192

 
29,980

 
3.2

 
29,889

Chase Industries, Inc.#
One stop
 
L + 5.75%
 
6.90%
 
09/2020
 
4,783

 
4,757

 
0.5

 
4,735

Chase Industries, Inc.
One stop
 
L + 5.75%
 
6.84%
 
09/2020
 
324

 
312

 

 
302

Inventus Power, Inc.*^
One stop
 
L + 6.50%
 
7.73%
 
04/2020
 
8,140

 
8,094

 
0.8

 
7,652

Inventus Power, Inc.(4)
One stop
 
L + 6.50%
 
N/A(5)
 
04/2020
 

 
(3
)
 

 
(31
)
Onicon Incorporated*^#
One stop
 
L + 6.00%
 
7.30%
 
04/2020
 
13,111

 
13,005

 
1.4

 
13,111


See Notes to Consolidated Financial Statements.
8




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
June 30, 2017
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Diversified/Conglomerate Manufacturing - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Onicon Incorporated(4)
One stop
 
L + 6.00%
 
N/A(5)
 
04/2020
 
$

 
$
(5
)
 

%
$

PetroChoice Holdings, Inc.^
Senior loan
 
L + 5.00%
 
6.12%
 
08/2022
 
1,754

 
1,711

 
0.2

 
1,754

Plex Systems, Inc.*^
One stop
 
L + 7.50%
 
8.75%
 
06/2020
 
18,797

 
18,497

 
2.0

 
18,797

Plex Systems, Inc.(4)
One stop
 
L + 7.50%
 
N/A(5)
 
06/2020
 

 
(24
)
 

 

Reladyne, Inc.*^
Senior loan
 
L + 5.25%
 
6.40%
 
07/2022
 
10,605

 
10,464

 
1.1

 
10,499

Reladyne, Inc.#
Senior loan
 
L + 5.25%
 
6.33%
 
07/2022
 
3,131

 
3,101

 
0.3

 
3,100

Reladyne, Inc.*
Senior loan
 
L + 5.25%
 
6.40%
 
07/2022
 
111

 
109

 

 
110

Reladyne, Inc.
Senior loan
 
L + 5.25%
 
6.35%
 
07/2022
 
70

 
69

 

 
69

Reladyne, Inc.^
Senior loan
 
L + 5.25%
 
6.40%
 
07/2022
 
36

 
36

 

 
36

Reladyne, Inc.
Senior loan
 
L + 5.25%
 
6.40%
 
07/2022
 
13

 
11

 

 
12

Reladyne, Inc.
Senior loan
 
L + 5.25%
 
6.36%
 
07/2022
 
6

 
5

 

 
6

Reladyne, Inc.(4)
Senior loan
 
L + 5.25%
 
N/A(5)
 
07/2022
 

 
(1
)
 

 
(1
)
Sunless Merger Sub, Inc.#
Senior loan
 
L + 5.00%
 
6.25%
 
07/2019
 
1,457

 
1,464

 
0.2

 
1,457

Sunless Merger Sub, Inc.
Senior loan
 
P + 3.75%
 
7.75%
 
07/2019
 
326

 
326

 

 
326

  
 
 
 
 
 
 
 
 
92,856

 
91,908

 
9.7

 
91,823

Diversified/Conglomerate Service
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Accellos, Inc.*^
One stop
 
L + 5.75%
 
6.98%
 
07/2020
 
17,038

 
16,929

 
1.8

 
17,038

Accellos, Inc.(4)
One stop
 
L + 5.75%
 
N/A(5)
 
07/2020
 

 
(6
)
 

 

Actiance, Inc.*^
One stop
 
L + 9.00%
 
10.23%
 
10/2019
 
3,962

 
3,849

 
0.4

 
3,962

Actiance, Inc.
One stop
 
L + 9.00%
 
10.23%
 
10/2019
 
20

 
20

 

 
20

Agility Recovery Solutions Inc.*^
One stop
 
L + 6.50%
 
7.67%
 
03/2020
 
13,924

 
13,813

 
1.5

 
13,924

Agility Recovery Solutions Inc.(4)
One stop
 
L + 6.50%
 
N/A(5)
 
03/2020
 

 
(5
)
 

 

Bomgar Corporation^
One stop
 
L + 7.50%
 
8.80%
 
06/2022
 
4,851

 
4,770

 
0.5

 
4,851

Bomgar Corporation(4)
One stop
 
L + 7.50%
 
N/A(5)
 
06/2022
 

 
(2
)
 

 

Clearwater Analytics, LLC*^
One stop
 
L + 7.50%
 
8.55%
 
09/2022
 
9,594

 
9,445

 
1.0

 
9,594

Clearwater Analytics, LLC
One stop
 
L + 7.50%
 
8.72%
 
09/2022
 
11

 
9

 

 
11

Daxko Acquisition Corporation^#
One stop
 
L + 6.50%
 
7.73%
 
09/2022
 
8,493

 
8,382

 
0.9

 
8,493

Daxko Acquisition Corporation
One stop
 
L + 6.50%
 
N/A(5)
 
09/2022
 

 

 

 

DISA Holdings Acquisition Subsidiary Corp.#
Senior loan
 
L + 4.25%
 
5.47%
 
12/2020
 
428

 
426

 

 
428

EGD Security Systems, LLC
One stop
 
L + 6.25%
 
7.37%
 
06/2022
 
11,114

 
10,907

 
1.2

 
11,114

EGD Security Systems, LLC^
One stop
 
L + 6.25%
 
7.55%
 
06/2022
 
98

 
97

 

 
98

EGD Security Systems, LLC
One stop
 
L + 6.25%
 
7.37%
 
06/2022
 
30

 
28

 

 
30

EGD Security Systems, LLC(4)
One stop
 
L + 6.25%
 
N/A(5)
 
06/2022
 

 
(1
)
 

 

HealthcareSource HR, Inc.*
One stop
 
L + 6.75%
 
8.05%
 
05/2020
 
20,771

 
20,465

 
2.2

 
20,771

HealthcareSource HR, Inc.(4)
One stop
 
L + 6.75%
 
N/A(5)
 
05/2020
 

 
(1
)
 

 

Host Analytics, Inc.
One stop
 
N/A
 
8.50% cash/2.25% PIK
 
08/2021
 
3,081

 
3,035

 
0.3

 
3,081

Host Analytics, Inc.
One stop
 
N/A
 
8.50% cash/2.25% PIK
 
08/2021
 
2,582

 
2,447

 
0.3

 
2,582

Host Analytics, Inc.(4)
One stop
 
N/A
 
N/A(5)
 
08/2021
 

 
(7
)
 

 

III US Holdings, LLC(4)
One stop
 
L + 6.00%
 
N/A(5)
 
09/2022
 

 
(1
)
 

 

Integration Appliance, Inc.*^
One stop
 
L + 8.25%
 
9.50%
 
09/2020
 
16,123

 
16,012

 
1.7

 
16,123

Integration Appliance, Inc.
One stop
 
L + 8.25%
 
9.50%
 
09/2020
 
7,914

 
7,797

 
0.8

 
7,914

Integration Appliance, Inc.
One stop
 
L + 8.25%
 
9.50%
 
09/2020
 
5,396

 
5,324

 
0.6

 
5,396

Integration Appliance, Inc.
One stop
 
L + 8.25%
 
9.50%
 
09/2020
 
2,484

 
2,460

 
0.3

 
2,484

Integration Appliance, Inc.*
One stop
 
L + 8.25%
 
9.50%
 
09/2020
 
719

 
711

 
0.1

 
719

Integration Appliance, Inc.
One stop
 
L + 8.25%
 
9.50%
 
09/2020
 
462

 
454

 
0.1

 
462

Maverick Bidco Inc.#
One stop
 
L + 6.25%
 
7.42%
 
04/2023
 
17,689

 
17,340

 
1.8

 
17,424

Maverick Bidco Inc.
One stop
 
L + 6.25%
 
7.48%
 
04/2023
 
27

 
25

 

 
25

Maverick Bidco Inc.(4)
One stop
 
L + 6.25%
 
N/A(5)
 
04/2023
 

 
(2
)
 

 

Netsmart Technologies, Inc.#
Senior loan
 
L + 4.50%
 
5.80%
 
04/2023
 
1,759

 
1,744

 
0.2

 
1,772

Netsmart Technologies, Inc.(4)
Senior loan
 
L + 4.75%
 
N/A(5)
 
04/2023
 

 
(8
)
 

 

Professional Datasolutions, Inc.#
One stop
 
L + 5.50%
 
6.73%
 
05/2022
 
2,919

 
2,877

 
0.3

 
2,919

Professional Datasolutions, Inc.
One stop
 
L + 5.50%
 
N/A(5)
 
05/2022
 

 

 

 


See Notes to Consolidated Financial Statements.
9




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
June 30, 2017
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Diversified/Conglomerate Service - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PT Intermediate Holdings III, LLC
One stop
 
L + 6.50%
 
7.80%
 
06/2022
 
$
22,083

 
$
21,625

 
2.3

%
$
22,083

PT Intermediate Holdings III, LLC*
One stop
 
L + 6.50%
 
7.80%
 
06/2022
 
2,182

 
2,162

 
0.2

 
2,182

PT Intermediate Holdings III, LLC
One stop
 
L + 6.50%
 
8.19%
 
06/2022
 
143

 
140

 

 
143

Saba Software, Inc.#
One stop
 
L + 5.50%
 
6.73%
 
05/2023
 
20,348

 
20,002

 
2.1

 
20,145

Saba Software, Inc.(4)
One stop
 
L + 5.50%
 
N/A(5)
 
05/2023
 

 
(3
)
 

 
(2
)
Secure-24, LLC*^
One stop
 
L + 5.00%
 
6.30%
 
08/2019
 
21,708

 
21,508

 
2.3

 
21,708

Secure-24, LLC(4)
One stop
 
L + 5.00%
 
N/A(5)
 
08/2019
 

 
(5
)
 

 

Severin Acquisition, LLC^
Senior loan
 
L + 5.38%
 
6.68%
 
07/2021
 
885

 
875

 
0.1

 
901

Severin Acquisition, LLC^
Senior loan
 
L + 5.00%
 
6.30%
 
07/2021
 
788

 
779

 
0.1

 
792

Severin Acquisition, LLC^
Senior loan
 
L + 5.38%
 
6.68%
 
07/2021
 
603

 
595

 
0.1

 
613

Severin Acquisition, LLC^
Senior loan
 
L + 4.88%
 
6.18%
 
07/2021
 
194

 
192

 

 
194

Switchfly, Inc.
One stop
 
L + 10.00%
 
9.66% cash/1.50% PIK
 
04/2020
 
2,390

 
2,277

 
0.2

 
2,281

Switchfly, Inc.
One stop
 
L + 10.00%
 
N/A(5)
 
04/2020
 

 

 

 

Trintech, Inc.*^#
One stop
 
L + 6.00%
 
7.17%
 
10/2021
 
12,263

 
12,146

 
1.3

 
12,263

Trintech, Inc.
One stop
 
L + 6.00%
 
N/A(5)
 
10/2021
 

 

 

 

Vendavo, Inc.
One stop
 
L + 8.50%
 
9.66%
 
10/2019
 
17,982

 
17,782

 
1.9

 
17,654

Vendavo, Inc.(4)
One stop
 
L + 8.50%
 
N/A(5)
 
10/2019
 

 
(7
)
 

 
(25
)
Vendor Credentialing Service LLC^
One stop
 
L + 6.00%
 
7.23%
 
11/2021
 
12,271

 
12,034

 
1.3

 
12,271

Vendor Credentialing Service LLC(4)
One stop
 
L + 6.00%
 
N/A(5)
 
11/2021
 

 
(1
)
 

 

Verisys Corporation#
One stop
 
L + 6.75%
 
8.05%
 
01/2023
 
3,936

 
3,881

 
0.4

 
3,936

Verisys Corporation(4)
One stop
 
L + 6.75%
 
N/A(5)
 
01/2023
 

 
(1
)
 

 

Vitalyst, LLC
Senior loan
 
L + 5.00%
 
6.25%
 
09/2017
 
1,250

 
1,249

 
0.1

 
1,250

Vitalyst, LLC
Senior loan
 
P + 4.00%
 
8.00%
 
09/2017
 
22

 
22

 

 
22

Workforce Software, LLC^
One stop
 
L + 10.50%
 
4.66% cash/7.00% PIK
 
06/2021
 
5,250

 
5,221

 
0.6

 
5,250

Workforce Software, LLC
One stop
 
L + 10.50%
 
N/A(5)
 
06/2021
 

 

 

 

Xmatters, Inc. and Alarmpoint, Inc.
One stop
 
L + 9.25%
 
9.72% cash/0.75% PIK
 
08/2021
 
4,864

 
4,789

 
0.5

 
4,864

Xmatters, Inc. and Alarmpoint, Inc.
One stop
 
L + 9.25%
 
N/A(5)
 
08/2021
 

 

 

 

  
 
 
 
 
 
 
 
 
280,651

 
276,595

 
29.5

 
279,760

Ecological
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pace Analytical Services, LLC
One stop
 
L + 6.00%
 
7.23%
 
09/2022
 
15,384

 
15,014

 
1.6

 
15,230

Pace Analytical Services, LLC^
One stop
 
L + 6.00%
 
7.30%
 
09/2022
 
1,430

 
1,409

 
0.1

 
1,416

Pace Analytical Services, LLC
One stop
 
L + 6.00%
 
7.26%
 
09/2022
 
350

 
345

 
0.1

 
346

Pace Analytical Services, LLC
One stop
 
L + 6.00%
 
7.22%
 
09/2022
 
25

 
23

 

 
24

Pace Analytical Services, LLC(4)
One stop
 
L + 6.00%
 
N/A(5)
 
09/2022
 

 
(5
)
 

 
(3
)
WRE Holding Corp.#
Senior loan
 
L + 4.75%
 
6.09%
 
01/2023
 
1,021

 
1,009

 
0.1

 
1,011

WRE Holding Corp.
Senior loan
 
L + 4.75%
 
N/A(5)
 
01/2023
 

 

 

 

WRE Holding Corp.
Senior loan
 
L + 4.75%
 
N/A(5)
 
01/2023
 

 

 

 

WRE Holding Corp.(4)
Senior loan
 
L + 4.75%
 
N/A(5)
 
01/2023
 

 
(1
)
 

 
(1
)
 
 
 
 
 
 
 
 
 
18,210

 
17,794

 
1.9

 
18,023

Electronics
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Appriss Holdings, Inc.*^
Senior loan
 
L + 5.25%
 
6.55%
 
11/2020
 
15,335

 
15,185

 
1.6

 
15,335

Appriss Holdings, Inc.
Senior loan
 
L + 5.25%
 
6.50%
 
11/2020
 
1,892

 
1,867

 
0.2

 
1,892

Compusearch Software Holdings, Inc.^
Senior loan
 
L + 4.25%
 
5.43%
 
05/2021
 
1,469

 
1,467

 
0.1

 
1,469

Diligent Corporation#
One stop
 
L + 6.25%
 
7.55%
 
04/2022
 
4,940

 
4,868

 
0.5

 
4,866

Diligent Corporation*
One stop
 
L + 6.25%
 
7.55%
 
04/2022
 
4,851

 
4,741

 
0.5

 
4,778

Diligent Corporation*^
One stop
 
L + 6.25%
 
7.55%
 
04/2022
 
2,655

 
2,613

 
0.3

 
2,615

Diligent Corporation(4)
One stop
 
L + 6.75%
 
N/A(5)
 
04/2022
 

 
(2
)
 

 
(2
)
ECI Acquisition Holdings, Inc.*^#
One stop
 
L + 6.25%
 
7.55%
 
03/2019
 
21,051

 
20,913

 
2.2

 
21,051

ECI Acquisition Holdings, Inc.*
One stop
 
L + 6.25%
 
7.55%
 
03/2019
 
1,363

 
1,354

 
0.1

 
1,363

ECI Acquisition Holdings, Inc.(4)
One stop
 
L + 6.25%
 
N/A(5)
 
03/2019
 

 
(6
)
 

 

Gamma Technologies, LLC^
One stop
 
L + 5.00%
 
6.23%
 
06/2021
 
7,574

 
7,524

 
0.8

 
7,574

Gamma Technologies, LLC(4)
One stop
 
L + 5.00%
 
N/A(5)
 
06/2021
 

 
(1
)
 

 


See Notes to Consolidated Financial Statements.
10




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
June 30, 2017
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Electronics - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LD Intermediate Holdings, Inc.*^
Senior loan
 
L + 5.88%
 
7.06%
 
12/2022
 
$
2,556

 
$
2,368

 
0.3

%
$
2,430

Park Place Technologies LLC*^
One stop
 
L + 5.00%
 
6.30%
 
06/2022
 
15,762

 
15,589

 
1.7

 
15,762

Park Place Technologies LLC(4)
One stop
 
L + 5.00%
 
N/A(5)
 
06/2022
 

 
(2
)
 

 

Sloan Company, Inc., The#
One stop
 
L + 7.25%
 
8.55%
 
04/2020
 
7,456

 
7,376

 
0.7

 
7,084

Sloan Company, Inc., The
One stop
 
L + 7.25%
 
8.46%
 
04/2020
 
20

 
19

 

 
18

Sovos Compliance*^
One stop
 
L + 7.25%
 
8.48%
 
03/2022
 
9,352

 
9,201

 
1.0

 
9,352

Sovos Compliance(4)
One stop
 
L + 7.25%
 
N/A(5)
 
03/2022
 

 
(1
)
 

 

Sparta Holding Corporation*^#
One stop
 
L + 5.50%
 
6.73%
 
07/2020
 
22,309

 
22,166

 
2.4

 
22,309

Sparta Holding Corporation(4)
One stop
 
L + 5.50%
 
N/A(5)
 
07/2020
 

 
(20
)
 

 

Watchfire Enterprises, Inc.
Second lien
 
L + 8.00%
 
9.30%
 
10/2021
 
9,434

 
9,298

 
1.0

 
9,434

 
 
 
 
 
 
 
 
 
128,019

 
126,517

 
13.4

 
127,330

Grocery
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MyWebGrocer, Inc.*
One stop
 
L + 8.75%
 
10.00%
 
09/2017
 
14,271

 
14,146

 
1.5

 
14,271

Teasdale Quality Foods, Inc.#
Senior loan
 
L + 4.75%
 
5.75%
 
10/2020
 
3,567

 
3,550

 
0.4

 
3,550

Teasdale Quality Foods, Inc.#
Senior loan
 
L + 4.75%
 
5.93%
 
10/2020
 
698

 
686

 
0.1

 
695

Teasdale Quality Foods, Inc.#
Senior loan
 
L + 4.75%
 
6.05%
 
10/2020
 
522

 
517

 

 
520

Teasdale Quality Foods, Inc.#
Senior loan
 
L + 4.75%
 
5.92%
 
10/2020
 
256

 
254

 

 
255

 
 
 
 
 
 
 
 
 
19,314

 
19,153

 
2.0

 
19,291

Healthcare, Education and Childcare
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Active Day, Inc.
One stop
 
L + 6.00%
 
7.23%
 
12/2021
 
13,436

 
13,162

 
1.4

 
13,436

Active Day, Inc.^
One stop
 
L + 6.00%
 
7.23%
 
12/2021
 
1,037

 
1,023

 
0.1

 
1,037

Active Day, Inc.
One stop
 
P + 5.00%
 
9.25%
 
12/2021
 
666

 
648

 
0.1

 
666

Active Day, Inc.(4)
One stop
 
L + 6.00%
 
N/A(5)
 
12/2021
 

 
(1
)
 

 

Acuity Eyecare Holdings, LLC
One stop
 
L + 6.75%
 
7.95%
 
03/2022
 
3,623

 
3,537

 
0.4

 
3,623

Acuity Eyecare Holdings, LLC
One stop
 
L + 6.75%
 
7.98%
 
03/2022
 
38

 
36

 

 
38

Acuity Eyecare Holdings, LLC(4)
One stop
 
L + 6.75%
 
N/A(5)
 
03/2022
 

 
(1
)
 

 

ADCS Clinics Intermediate Holdings, LLC
One stop
 
L + 5.75%
 
7.05%
 
05/2022
 
21,334

 
20,814

 
2.2

 
21,334

ADCS Clinics Intermediate Holdings, LLC*
One stop
 
L + 5.75%
 
7.05%
 
05/2022
 
109

 
107

 

 
109

ADCS Clinics Intermediate Holdings, LLC
One stop
 
P + 4.75%
 
9.00%
 
05/2022
 
47

 
46

 

 
47

ADCS Clinics Intermediate Holdings, LLC*
One stop
 
L + 5.75%
 
7.05%
 
05/2022
 
32

 
31

 

 
32

ADCS Clinics Intermediate Holdings, LLC
One stop
 
P + 4.75%
 
9.00%
 
05/2022
 
5

 
2

 

 
5

Agilitas USA, Inc.#
One stop
 
L + 6.00%
 
7.16%
 
04/2022
 
8,460

 
8,379

 
0.9

 
8,375

Agilitas USA, Inc.(4)
One stop
 
L + 6.00%
 
N/A(5)
 
04/2022
 

 
(1
)
 

 
(1
)
Agilitas USA, Inc.(4)
One stop
 
L + 6.00%
 
N/A(5)
 
04/2022
 

 
(1
)
 

 

Aris Teleradiology Company, LLC*
Senior loan
 
L + 5.50%
 
6.80%
 
03/2021
 
2,706

 
2,685

 
0.3

 
2,490

Aris Teleradiology Company, LLC
Senior loan
 
L + 5.50%
 
6.66%
 
03/2021
 
25

 
25

 

 
23

Avalign Technologies, Inc.^
Senior loan
 
L + 4.50%
 
5.73%
 
07/2021
 
1,119

 
1,115

 
0.1

 
1,119

BIORECLAMATIONIVT, LLC*^#
One stop
 
L + 5.75%
 
6.98%
 
01/2021
 
14,088

 
13,912

 
1.5

 
14,088

BIORECLAMATIONIVT, LLC(4)
One stop
 
L + 5.75%
 
N/A(5)
 
01/2021
 

 
(1
)
 

 

California Cryobank, LLC^
One stop
 
L + 5.50%
 
6.80%
 
08/2019
 
1,535

 
1,528

 
0.2

 
1,535

California Cryobank, LLC^
One stop
 
L + 5.50%
 
6.80%
 
08/2019
 
714

 
705

 
0.1

 
714

California Cryobank, LLC^
One stop
 
L + 5.50%
 
6.80%
 
08/2019
 
206

 
206

 

 
206

California Cryobank, LLC(4)
One stop
 
L + 5.50%
 
N/A(5)
 
08/2019
 

 
(1
)
 

 

Certara L.P.*^#
One stop
 
L + 5.50%
 
6.80%
 
12/2018
 
25,931

 
25,767

 
2.7

 
25,931

Certara L.P.(4)
One stop
 
L + 5.50%
 
N/A(5)
 
12/2018
 

 
(6
)
 

 

CLP Healthcare Services, Inc.^
Senior loan
 
L + 5.00%
 
6.30%
 
12/2020
 
3,934

 
3,905

 
0.4

 
3,855

Curo Health Services LLC#
Senior loan
 
L + 4.75%
 
5.93%
 
02/2022
 
3,282

 
3,269

 
0.4

 
3,325

DCA Investment Holding, LLC*^#
One stop
 
L + 5.25%
 
6.48%
 
07/2021
 
18,823

 
18,544

 
2.0

 
18,823

DCA Investment Holding, LLC*^#
One stop
 
L + 5.25%
 
6.48%
 
07/2021
 
13,501

 
13,380

 
1.4

 
13,501

DCA Investment Holding, LLC#
One stop
 
L + 5.25%
 
6.48%
 
07/2021
 
2,481

 
2,439

 
0.3

 
2,481

DCA Investment Holding, LLC
One stop
 
P + 4.25%
 
8.50%
 
07/2021
 
350

 
338

 

 
350

DCA Investment Holding, LLC(4)
One stop
 
L + 5.25%
 
N/A(5)
 
07/2021
 

 
(3
)
 

 


See Notes to Consolidated Financial Statements.
11




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
June 30, 2017
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Healthcare, Education and Childcare - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deca Dental Management LLC*^
One stop
 
L + 6.25%
 
7.55%
 
07/2020
 
$
4,086

 
$
4,048

 
0.4

%
$
4,086

Deca Dental Management LLC
One stop
 
L + 6.25%
 
7.48%
 
07/2020
 
497

 
493

 
0.1

 
497

Deca Dental Management LLC
One stop
 
L + 6.25%
 
7.48%
 
07/2020
 
50

 
50

 

 
50

Deca Dental Management LLC(4)
One stop
 
L + 6.25%
 
N/A(5)
 
07/2020
 

 
(2
)
 

 

Delta Educational Systems*(6)
Senior loan
 
P + 6.75%
 
4.75% cash/2.00% PIK
 
12/2018
 
1,438

 
1,433

 

 

Delta Educational Systems(4)(6)
Senior loan
 
L + 6.00%
 
N/A(5)
 
12/2018
 

 

 

 
(60
)
Dental Holdings Corporation
One stop
 
L + 5.50%
 
6.67%
 
02/2020
 
7,436

 
7,328

 
0.8

 
7,436

Dental Holdings Corporation
One stop
 
L + 5.50%
 
6.70%
 
02/2020
 
1,133

 
1,120

 
0.1

 
1,133

Dental Holdings Corporation
One stop
 
L + 5.50%
 
6.70%
 
02/2020
 
220

 
211

 

 
220

eSolutions, Inc.#
One stop
 
L + 6.50%
 
7.73%
 
03/2022
 
16,342

 
16,057

 
1.7

 
16,179

eSolutions, Inc.(4)
One stop
 
L + 6.50%
 
N/A(5)
 
03/2022
 

 
(1
)
 

 
(1
)
Excelligence Learning Corporation#
One stop
 
L + 6.00%
 
7.21%
 
04/2023
 
4,866

 
4,819

 
0.5

 
4,817

Eyecare Services Partners Holdings LLC
One stop
 
L + 6.25%
 
7.43%
 
05/2023
 
8,026

 
7,810

 
0.8

 
7,946

Eyecare Services Partners Holdings LLC(4)
One stop
 
L + 6.25%
 
N/A(5)
 
05/2023
 

 
(3
)
 

 
(2
)
Eyecare Services Partners Holdings LLC(4)
One stop
 
L + 6.25%
 
N/A(5)
 
05/2023
 

 
(4
)
 

 

G & H Wire Company, Inc.*^
One stop
 
L + 5.75%
 
7.05%
 
12/2017
 
13,056

 
13,039

 
1.4

 
13,056

G & H Wire Company, Inc.
One stop
 
P + 4.50%
 
8.75%
 
12/2017
 
196

 
195

 

 
196

Immucor, Inc.#
Senior loan
 
L + 5.00%
 
6.00%
 
08/2018
 
1,762

 
1,744

 
0.2

 
1,780

Joerns Healthcare, LLC*^
One stop
 
L + 6.50%
 
7.88%
 
05/2020
 
3,503

 
3,464

 
0.3

 
3,263

Kareo, Inc.
One stop
 
L + 9.00%
 
10.29%
 
06/2022
 
4,518

 
4,291

 
0.5

 
4,473

Kareo, Inc.
One stop
 
L + 9.00%
 
N/A(5)
 
06/2022
 

 

 

 

Katena Holdings, Inc.^
One stop
 
L + 6.25%
 
7.55%
 
06/2021
 
8,633

 
8,573

 
0.9

 
8,633

Katena Holdings, Inc.^
One stop
 
L + 6.25%
 
7.55%
 
06/2021
 
843

 
838

 
0.1

 
843

Katena Holdings, Inc.
One stop
 
P + 5.25%
 
9.50%
 
06/2021
 
54

 
53

 

 
54

Lombart Brothers, Inc.#
One stop
 
L + 6.75%
 
8.05%
 
04/2022
 
3,639

 
3,553

 
0.4

 
3,639

Lombart Brothers, Inc.#(7)
One stop
 
L + 6.75%
 
8.05%
 
04/2022
 
1,669

 
1,642

 
0.2

 
1,669

Lombart Brothers, Inc.(7)
One stop
 
L + 6.75%
 
N/A(5)
 
04/2022
 

 

 

 

Lombart Brothers, Inc.(4)
One stop
 
L + 6.75%
 
N/A(5)
 
04/2022
 

 
(1
)
 

 

Maverick Healthcare Group, LLC*
Senior loan
 
P + 8.50%
 
10.75% cash/2.00% PIK
 
12/2017
 
1,946

 
1,946

 
0.2

 
1,810

Maverick Healthcare Group, LLC
Senior loan
 
P + 6.50%
 
5.25% cash/5.50% PIK
 
12/2017
 
82

 
82

 

 
82

MWD Management, LLC & MWD Services, Inc.#
One stop
 
L + 5.25%
 
6.55%
 
06/2023
 
5,940

 
5,866

 
0.6

 
5,881

MWD Management, LLC & MWD Services, Inc.(4)
One stop
 
L + 5.25%
 
N/A(5)
 
06/2022
 

 
(1
)
 

 
(1
)
MWD Management, LLC & MWD Services, Inc.(4)
One stop
 
L + 5.25%
 
N/A(5)
 
06/2023
 

 
(2
)
 

 

Oliver Street Dermatology Holdings, LLC
One stop
 
L + 6.50%
 
7.80%
 
05/2022
 
9,458

 
9,238

 
1.0

 
9,458

Oliver Street Dermatology Holdings, LLC
One stop
 
L + 6.50%
 
8.10%
 
05/2022
 
74

 
73

 

 
74

Oliver Street Dermatology Holdings, LLC
One stop
 
L + 6.50%
 
7.67%
 
05/2022
 
46

 
45

 

 
46

Oliver Street Dermatology Holdings, LLC*
One stop
 
L + 6.50%
 
7.80%
 
05/2022
 
42

 
41

 

 
42

Oliver Street Dermatology Holdings, LLC
One stop
 
L + 6.50%
 
7.80%
 
05/2022
 
33

 
32

 

 
33

Oliver Street Dermatology Holdings, LLC
One stop
 
L + 6.50%
 
7.66%
 
05/2022
 
30

 
30

 

 
30

Oliver Street Dermatology Holdings, LLC
One stop
 
L + 6.50%
 
7.69%
 
05/2022
 
18

 
16

 

 
18

Pinnacle Treatment Centers, Inc.
One stop
 
L + 6.25%
 
7.37%
 
08/2021
 
10,005

 
9,779

 
1.1

 
10,005

Pinnacle Treatment Centers, Inc.
One stop
 
P + 5.00%
 
9.25%
 
08/2021
 
22

 
21

 

 
22

Pinnacle Treatment Centers, Inc.(4)
One stop
 
L + 6.25%
 
N/A(5)
 
08/2021
 

 
(2
)
 

 

PPT Management Holdings, LLC^#
One stop
 
L + 6.00%
 
7.30%
 
12/2022
 
10,248

 
10,038

 
1.1

 
10,248

PPT Management Holdings, LLC
One stop
 
L + 6.00%
 
7.22%
 
12/2022
 
150

 
146

 

 
150

PPT Management Holdings, LLC
One stop
 
L + 6.00%
 
7.30%
 
12/2022
 
110

 
107

 

 
110

Premise Health Holding Corp.*^#
One stop
 
L + 4.50%
 
5.80%
 
06/2020
 
14,850

 
14,784

 
1.6

 
14,850

Premise Health Holding Corp.(4)
One stop
 
L + 4.50%
 
N/A(5)
 
06/2020
 

 
(13
)
 

 

Pyramid Healthcare, Inc.
One stop
 
L + 6.50%
 
7.72%
 
08/2019
 
84

 
82

 

 
84

Radiology Partners, Inc.^#
One stop
 
L + 5.75%
 
7.05%
 
09/2020
 
22,400

 
22,147

 
2.4

 
22,400

Radiology Partners, Inc.
One stop
 
L + 5.75%
 
7.05%
 
09/2020
 
928

 
911

 
0.1

 
928

Radiology Partners, Inc.
One stop
 
L + 5.75%
 
7.05%
 
09/2020
 
703

 
702

 
0.1

 
703


See Notes to Consolidated Financial Statements.
12




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
June 30, 2017
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Healthcare, Education and Childcare - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Radiology Partners, Inc.(4)
One stop
 
L + 5.75%
 
N/A(5)
 
09/2020
 
$

 
$
(4
)
 

%
$

Reliant Pro ReHab, LLC*
Senior loan
 
L + 5.00%
 
6.30%
 
12/2017
 
2,493

 
2,489

 
0.3

 
2,493

Reliant Pro ReHab, LLC
Senior loan
 
P + 4.00%
 
8.25%
 
12/2017
 
396

 
394

 

 
396

Riverchase MSO, LLC#
Senior loan
 
L + 5.25%
 
6.55%
 
10/2022
 
4,993

 
4,926

 
0.5

 
4,993

Riverchase MSO, LLC
Senior loan
 
L + 5.25%
 
6.55%
 
10/2022
 
21

 
20

 

 
21

RXH Buyer Corporation*^
One stop
 
L + 5.75%
 
7.05%
 
09/2021
 
17,303

 
17,061

 
1.8

 
16,958

RXH Buyer Corporation*
One stop
 
L + 5.75%
 
7.05%
 
09/2021
 
1,958

 
1,931

 
0.2

 
1,918

RXH Buyer Corporation
One stop
 
L + 5.75%
 
7.58%
 
09/2021
 
55

 
52

 

 
51

SLMP, LLC
One stop
 
L + 6.00%
 
7.23%
 
05/2023
 
6,212

 
6,059

 
0.6

 
6,150

SLMP, LLC
One stop
 
N/A
 
7.50% PIK
 
05/2027
 
83

 
83

 

 
83

SLMP, LLC(4)
One stop
 
L + 6.00%
 
N/A(5)
 
05/2023
 

 
(1
)
 

 
(1
)
SLMP, LLC(4)
One stop
 
L + 6.00%
 
N/A(5)
 
05/2023
 

 
(1
)
 

 

Spear Education, LLC^
One stop
 
L + 5.75%
 
6.90%
 
08/2019
 
4,656

 
4,631

 
0.5

 
4,656

Spear Education, LLC
One stop
 
L + 5.75%
 
6.90%
 
08/2019
 
75

 
75

 

 
75

Spear Education, LLC
One stop
 
L + 5.75%
 
N/A(5)
 
08/2019
 

 

 

 

Summit Behavioral Holdings I, LLC*
One stop
 
L + 5.00%
 
6.23%
 
06/2021
 
4,349

 
4,305

 
0.5

 
4,349

Summit Behavioral Holdings I, LLC
One stop
 
L + 5.00%
 
6.23%
 
06/2021
 
113

 
112

 

 
113

Summit Behavioral Holdings I, LLC
One stop
 
L + 5.00%
 
6.23%
 
06/2021
 
15

 
15

 

 
15

WHCG Management, LLC*#
Senior loan
 
L + 4.75%
 
6.05%
 
03/2023
 
10,400

 
10,277

 
1.1

 
10,400

WHCG Management, LLC(4)
Senior loan
 
L + 4.75%
 
N/A(5)
 
03/2023
 

 
(1
)
 

 

WHCG Management, LLC(4)
Senior loan
 
L + 4.75%
 
N/A(5)
 
03/2023
 

 
(3
)
 

 

WIRB-Copernicus Group, Inc.*^
Senior loan
 
L + 5.00%
 
6.30%
 
08/2022
 
9,837

 
9,753

 
1.0

 
9,837

WIRB-Copernicus Group, Inc.#
Senior loan
 
L + 5.00%
 
6.30%
 
08/2022
 
5,680

 
5,633

 
0.6

 
5,680

WIRB-Copernicus Group, Inc.
Senior loan
 
L + 5.00%
 
N/A(5)
 
08/2022
 

 

 

 

Young Innovations, Inc.*#
Senior loan
 
L + 5.00%
 
6.30%
 
01/2019
 
3,597

 
3,570

 
0.4

 
3,597

Young Innovations, Inc.
Senior loan
 
L + 5.00%
 
6.30%
 
01/2019
 
13

 
13

 

 
13

 
 
 
 
 
 
 
 
 
368,867

 
363,795

 
38.6

 
365,819

Home and Office Furnishings, Housewares, and Durable Consumer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1A Smart Start LLC#
Senior loan
 
L + 4.50%
 
5.80%
 
02/2022
 
930

 
926

 
0.1

 
929

CST Buyer Company^
Senior loan
 
L + 6.25%
 
7.61%
 
03/2023
 
2,649

 
2,580

 
0.3

 
2,649

CST Buyer Company(4)
Senior loan
 
L + 6.25%
 
N/A(5)
 
03/2023
 

 
(1
)
 

 

Plano Molding Company, LLC*^#
One stop
 
L + 7.50%
 
8.63%
 
05/2021
 
14,522

 
14,356

 
1.4

 
13,651

 
 
 
 
 
 
 
 
 
18,101

 
17,861

 
1.8

 
17,229

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Hotels, Motels, Inns, and Gaming
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Aimbridge Hospitality, LLC*^
One stop
 
L + 5.50%
 
6.72%
 
06/2022
 
10,066

 
9,890

 
1.0

 
9,889

Aimbridge Hospitality, LLC
One stop
 
L + 5.50%
 
6.72%
 
06/2022
 
16

 
15

 

 
15

Aimbridge Hospitality, LLC(4)
One stop
 
L + 5.50%
 
N/A(5)
 
06/2022
 

 
(1
)
 

 
(1
)
 
 
 
 
 
 
 
 
 
10,082

 
9,904

 
1.0

 
9,903

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Insurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Captive Resources Midco, LLC*^#
One stop
 
L + 5.75%
 
6.95%
 
06/2020
 
25,555

 
25,355

 
2.7

 
25,555

Captive Resources Midco, LLC(4)
One stop
 
L + 5.75%
 
N/A(5)
 
06/2020
 

 
(13
)
 

 

Captive Resources Midco, LLC(4)
One stop
 
L + 5.75%
 
N/A(5)
 
06/2020
 

 
(14
)
 

 

Higginbotham Insurance Agency, Inc.*
Senior loan
 
L + 5.00%
 
6.23%
 
11/2021
 
1,599

 
1,588

 
0.2

 
1,599

Internet Pipeline, Inc.
One stop
 
L + 7.25%
 
8.48%
 
08/2022
 
4,847

 
4,737

 
0.5

 
4,798

Internet Pipeline, Inc.*
One stop
 
L + 6.25%
 
7.42%
 
08/2022
 
2,103

 
2,082

 
0.2

 
2,082

Internet Pipeline, Inc.(4)
One stop
 
L + 7.25%
 
N/A(5)
 
08/2021
 

 
(1
)
 

 

RSC Acquisition, Inc.#
Senior loan
 
L + 5.25%
 
6.55%
 
11/2022
 
787

 
782

 
0.1

 
783

RSC Acquisition, Inc.(4)
Senior loan
 
L + 5.25%
 
N/A(5)
 
11/2022
 

 
(2
)
 

 
(2
)
  
 
 
 
 
 
 
 
 
34,891

 
34,514

 
3.7

 
34,815


See Notes to Consolidated Financial Statements.
13




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
June 30, 2017
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Leisure, Amusement, Motion Pictures, Entertainment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NFD Operating, LLC#
One stop
 
L + 7.00%
 
8.25%
 
06/2021
 
$
2,331

 
$
2,303

 
0.3

%
$
2,331

NFD Operating, LLC
One stop
 
L + 7.00%
 
N/A(5)
 
06/2021
 

 

 

 

NFD Operating, LLC(4)
One stop
 
L + 7.00%
 
N/A(5)
 
06/2021
 

 
(1
)
 

 

PADI Holdco, Inc.#
One stop
 
L + 6.50%
 
7.80%
 
04/2023
 
19,599

 
19,314

 
2.0

 
19,305

PADI Holdco, Inc.
One stop
 
L + 6.50%
 
7.80%
 
04/2022
 
53

 
51

 

 
51

Self Esteem Brands, LLC*^#
Senior loan
 
L + 4.75%
 
5.98%
 
02/2020
 
18,301

 
18,197

 
1.9

 
18,301

Self Esteem Brands, LLC(4)
Senior loan
 
L + 4.75%
 
N/A(5)
 
02/2020
 

 
(4
)
 

 

Teaching Company, The
One stop
 
L + 6.25%
 
7.37%
 
08/2020
 
18,783

 
18,606

 
1.9

 
18,032

Teaching Company, The
One stop
 
L + 6.25%
 
7.73%
 
08/2020
 
113

 
112

 

 
107

Titan Fitness, LLC*
One stop
 
L + 7.00%
 
8.25%
 
09/2019
 
13,122

 
13,007

 
1.4

 
13,122

Titan Fitness, LLC
One stop
 
L + 7.00%
 
8.25%
 
09/2019
 
1,975

 
1,964

 
0.2

 
1,975

Titan Fitness, LLC*
One stop
 
L + 7.00%
 
8.25%
 
09/2019
 
1,738

 
1,728

 
0.2

 
1,738

Titan Fitness, LLC(4)
One stop
 
L + 7.00%
 
N/A(5)
 
09/2019
 

 
(10
)
 

 

Titan Fitness, LLC(4)
One stop
 
L + 7.00%
 
N/A(5)
 
09/2019
 

 
(16
)
 

 

 
 
 
 
 
 
 
 
 
76,015

 
75,251

 
7.9

 
74,962

Mining, Steel, Iron and Non-Precious Metals
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benetech, Inc.*
One stop
 
L + 11.00%
 
10.25% cash/2.00% PIK
08/2018
 
4,483

 
4,477

 
0.4

 
3,587

Benetech, Inc.
One stop
 
P + 9.75%
 
11.97% cash/2.00% PIK
08/2018
 
368

 
367

 

 
144

 
 
 
 
 
 
 
 
 
4,851

 
4,844

 
0.4

 
3,731

Oil and Gas
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Drilling Info, Inc.^#(8)
One stop
 
L + 5.25%
 
6.55%
 
06/2020
 
1,700

 
1,683

 
0.2

 
1,700

Drilling Info, Inc.*(8)
One stop
 
L + 5.25%
 
6.55%
 
06/2020
 
482

 
473

 
0.1

 
482

Drilling Info, Inc.(8)
One stop
 
L + 5.25%
 
N/A(5)
 
06/2020
 

 

 

 

 
 
 
 
 
 
 
 
 
2,182

 
2,156

 
0.3

 
2,182

Personal and Non Durable Consumer Products (Mfg. Only)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Georgica Pine Clothiers, LLC
One stop
 
L + 5.50%
 
6.80%
 
11/2021
 
5,693

 
5,610

 
0.6

 
5,693

Georgica Pine Clothiers, LLC^
One stop
 
L + 5.50%
 
6.80%
 
11/2021
 
496

 
492

 
0.1

 
496

Georgica Pine Clothiers, LLC*
One stop
 
L + 5.50%
 
6.80%
 
11/2021
 
348

 
345

 

 
348

Georgica Pine Clothiers, LLC
One stop
 
L + 5.50%
 
6.80%
 
11/2021
 
38

 
37

 

 
38

IMPLUS Footwear, LLC
One stop
 
L + 6.75%
 
8.04%
 
04/2021
 
10,615

 
10,459

 
1.1

 
10,615

IMPLUS Footwear, LLC
One stop
 
L + 6.75%
 
7.91%
 
04/2021
 
1,869

 
1,841

 
0.2

 
1,869

Massage Envy, LLC*^#
One stop
 
L + 6.75%
 
8.05%
 
09/2020
 
35,279

 
34,927

 
3.7

 
35,279

Massage Envy, LLC
One stop
 
L + 6.75%
 
7.97%
 
09/2020
 
316

 
305

 

 
316

Massage Envy, LLC
One stop
 
L + 6.75%
 
7.93%
 
09/2020
 
100

 
99

 

 
100

Massage Envy, LLC
One stop
 
L + 6.75%
 
7.97%
 
09/2020
 
35

 
35

 

 
35

Massage Envy, LLC
One stop
 
L + 6.75%
 
8.01%
 
09/2020
 
5

 
5

 

 
5

Orthotics Holdings, Inc.*#
One stop
 
L + 6.00%
 
7.23%
 
02/2020
 
8,311

 
8,236

 
0.9

 
8,311

Orthotics Holdings, Inc.*#(7)
One stop
 
L + 6.00%
 
7.23%
 
02/2020
 
1,362

 
1,350

 
0.1

 
1,362

Orthotics Holdings, Inc.(4)(7)
One stop
 
L + 6.00%
 
N/A(5)
 
02/2020
 

 
(1
)
 

 

Orthotics Holdings, Inc.(4)
One stop
 
L + 6.00%
 
N/A(5)
 
02/2020
 

 
(11
)
 

 

Team Technologies Acquisition Company^
Senior loan
 
L + 5.00%
 
6.25%
 
12/2017
 
4,421

 
4,415

 
0.5

 
4,413

Team Technologies Acquisition Company#
Senior loan
 
L + 5.50%
 
6.75%
 
12/2017
 
815

 
813

 
0.1

 
824

Team Technologies Acquisition Company(4)
Senior loan
 
L + 5.00%
 
N/A(5)
 
12/2017
 

 

 

 
(1
)
 
 
 
 
 
 
 
 
 
69,703

 
68,957

 
7.3

 
69,703

Personal, Food and Miscellaneous Services
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Community Veterinary Partners, LLC(4)
One stop
 
L + 5.50%
 
N/A(5)
 
10/2021
 

 
(1
)
 

 

Ignite Restaurant Group, Inc.^(6)
One stop
 
P + 6.00%
 
10.25%
 
02/2019
 
4,312

 
4,285

 
0.2

 
1,638

PetVet Care Centers LLC#
One stop
 
L + 6.00%
 
7.22%
 
06/2023
 
16,822

 
16,655

 
1.8

 
16,654

PetVet Care Centers LLC
One stop
 
L + 6.00%
 
7.22%
 
06/2023
 
14

 
11

 

 
11

PetVet Care Centers LLC(4)
One stop
 
L + 6.00%
 
N/A(5)
 
06/2023
 

 
(10
)
 

 
(10
)
Southern Veterinary Partners, LLC#
One stop
 
L + 5.00%
 
6.13%
 
06/2020
 
3,900

 
3,871

 
0.4

 
3,880

Southern Veterinary Partners, LLC
One stop
 
L + 5.00%
 
N/A(5)
 
06/2020
 

 

 

 


See Notes to Consolidated Financial Statements.
14




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
June 30, 2017
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Personal, Food and Miscellaneous Services - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Southern Veterinary Partners, LLC(4)
One stop
 
L + 5.00%
 
N/A(5)
 
06/2020
 
$

 
$
(1
)
 

%
$

Vetcor Professional Practices LLC*^#
One stop
 
L + 6.25%
 
7.55%
 
04/2021
 
28,822

 
28,392

 
3.0

 
28,822

Vetcor Professional Practices LLC*
One stop
 
L + 6.25%
 
7.55%
 
04/2021
 
959

 
951

 
0.1

 
959

Vetcor Professional Practices LLC#
One stop
 
L + 6.25%
 
7.55%
 
04/2021
 
950

 
936

 
0.1

 
950

Vetcor Professional Practices LLC
One stop
 
L + 6.25%
 
7.55%
 
04/2021
 
864

 
850

 
0.1

 
864

Vetcor Professional Practices LLC#
One stop
 
L + 6.25%
 
7.55%
 
04/2021
 
746

 
746

 
0.1

 
746

Vetcor Professional Practices LLC^
One stop
 
L + 6.25%
 
7.55%
 
04/2021
 
727

 
716

 
0.1

 
727

Vetcor Professional Practices LLC#
One stop
 
L + 6.25%
 
7.55%
 
04/2021
 
286

 
284

 

 
286

Vetcor Professional Practices LLC#
One stop
 
L + 6.25%
 
7.55%
 
04/2021
 
234

 
232

 

 
234

Vetcor Professional Practices LLC
One stop
 
L + 6.25%
 
7.55%
 
04/2021
 
119

 
110

 

 
119

Vetcor Professional Practices LLC(4)
One stop
 
L + 6.25%
 
N/A(5)
 
04/2021
 

 
(4
)
 

 

Veterinary Specialists of North America, LLC#
One stop
 
L + 5.25%
 
6.42%
 
07/2021
 
7,424

 
7,348

 
0.8

 
7,424

Veterinary Specialists of North America, LLC
One stop
 
L + 5.25%
 
6.55%
 
07/2021
 
90

 
74

 

 
90

Veterinary Specialists of North America, LLC#
One stop
 
L + 5.25%
 
6.43%
 
07/2021
 
63

 
63

 

 
63

Veterinary Specialists of North America, LLC(4)
One stop
 
L + 5.25%
 
N/A(5)
 
07/2021
 

 
(3
)
 

 

Wetzel's Pretzels, LLC
One stop
 
L + 6.75%
 
7.83%
 
09/2021
 
6,707

 
6,554

 
0.7

 
6,707

Wetzel's Pretzels, LLC(4)
One stop
 
L + 6.75%
 
N/A(5)
 
09/2021
 

 
(1
)
 

 

  
 
 
 
 
 
 
 
 
73,039

 
72,058

 
7.4

 
70,164

Printing and Publishing
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brandmuscle, Inc.#
Senior loan
 
L + 5.00%
 
6.30%
 
12/2021
 
626

 
621

 
0.1

 
631

Marketo, Inc.
One stop
 
L + 9.50%
 
10.80%
 
08/2021
 
9,940

 
9,694

 
1.0

 
9,940

Marketo, Inc.(4)
One stop
 
L + 9.50%
 
N/A(5)
 
08/2021
 

 
(1
)
 

 

 
 
 
 
 
 
 
 
 
10,566

 
10,314

 
1.1

 
10,571

Retail Stores
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Batteries Plus Holding Corporation
One stop
 
L + 6.75%
 
7.98%
 
07/2022
 
13,757

 
13,459

 
1.5

 
13,757

Batteries Plus Holding Corporation(4)
One stop
 
L + 6.75%
 
N/A(5)
 
07/2022
 

 
(2
)
 

 

CVS Holdings I, LP*^#
One stop
 
L + 6.25%
 
7.48%
 
08/2021
 
22,114

 
21,809

 
2.3

 
22,114

CVS Holdings I, LP*
One stop
 
L + 6.25%
 
7.48%
 
08/2021
 
318

 
313

 

 
318

CVS Holdings I, LP(4)
One stop
 
L + 6.25%
 
N/A(5)
 
08/2020
 

 
(2
)
 

 

CVS Holdings I, LP(4)
One stop
 
L + 6.25%
 
N/A(5)
 
08/2021
 

 
(7
)
 

 

Cycle Gear, Inc.^
One stop
 
L + 6.50%
 
7.65%
 
01/2020
 
10,453

 
10,336

 
1.1

 
10,453

Cycle Gear, Inc.(4)
One stop
 
L + 6.50%
 
N/A(5)
 
01/2020
 

 
(6
)
 

 

Cycle Gear, Inc.(4)
One stop
 
L + 6.50%
 
N/A(5)
 
01/2020
 

 
(13
)
 

 

DTLR, Inc.*^
One stop
 
L + 6.50%
 
7.67%
 
10/2020
 
11,309

 
11,234

 
1.2

 
11,309

Elite Sportswear, L.P.
Senior loan
 
L + 5.25%
 
6.55%
 
03/2020
 
6,959

 
6,863

 
0.7

 
6,975

Elite Sportswear, L.P.
Senior loan
 
L + 5.00%
 
6.30%
 
03/2020
 
2,799

 
2,760

 
0.3

 
2,787

Elite Sportswear, L.P.
Senior loan
 
L + 5.25%
 
6.55%
 
03/2020
 
1,440

 
1,425

 
0.2

 
1,443

Elite Sportswear, L.P.
Senior loan
 
P + 3.75%
 
8.00%
 
03/2020
 
686

 
680

 
0.1

 
683

Elite Sportswear, L.P.
Senior loan
 
L + 5.25%
 
6.55%
 
03/2020
 
219

 
216

 

 
219

Elite Sportswear, L.P.#
Senior loan
 
L + 5.25%
 
6.49%
 
03/2020
 
209

 
207

 

 
209

Elite Sportswear, L.P.
One stop
 
L + 5.00%
 
6.62%
 
06/2018
 
18

 
17

 

 
17

Feeders Supply Company, LLC
One stop
 
L + 5.75%
 
6.98%
 
04/2021
 
5,181

 
5,091

 
0.5

 
5,181

Feeders Supply Company, LLC
Subordinated debt
 
N/A
 
12.50% cash/7.00% PIK
 
04/2021
 
58

 
58

 

 
58

Feeders Supply Company, LLC
One stop
 
L + 5.75%
 
N/A(5)
 
04/2021
 

 

 

 

Marshall Retail Group LLC, The^#
One stop
 
L + 6.00%
 
7.15%
 
08/2020
 
12,023

 
11,944

 
1.3

 
12,023

Marshall Retail Group LLC, The
One stop
 
P + 4.75%
 
9.00%
 
08/2019
 
439

 
424

 

 
439

Mills Fleet Farm Group LLC*^
One stop
 
L + 5.50%
 
6.73%
 
02/2022
 
1,815

 
1,717

 
0.2

 
1,815

Paper Source, Inc.^#
One stop
 
L + 6.25%
 
7.55%
 
09/2018
 
12,658

 
12,610

 
1.3

 
12,658

Paper Source, Inc.*
One stop
 
L + 6.25%
 
7.55%
 
09/2018
 
1,681

 
1,672

 
0.2

 
1,681

Paper Source, Inc.(4)
One stop
 
L + 6.25%
 
N/A(5)
 
09/2018
 

 
(5
)
 

 

Pet Holdings ULC*^(7)(9)
One stop
 
L + 5.50%
 
6.65%
 
07/2022
 
14,664

 
14,418

 
1.6

 
14,664

Pet Holdings ULC(7)(9)
One stop
 
P + 4.50%
 
8.75%
 
07/2022
 
120

 
117

 

 
120

Pet Holdings ULC(7)(9)
One stop
 
L + 5.50%
 
6.62%
 
07/2022
 
28

 
27

 

 
28


See Notes to Consolidated Financial Statements.
15




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
June 30, 2017
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Retail Stores - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sneaker Villa, Inc.*#
One stop
 
L + 7.75%
 
8.98%
 
12/2020
 
$
12,373

 
$
12,286

 
1.3

%
$
12,373

 
 
 
 
 
 
 
 
 
131,321

 
129,648

 
13.8

 
131,324

Telecommunications
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Arise Virtual Solutions, Inc.^
One stop
 
L + 6.50%
 
7.80%
 
12/2018
 
1,270

 
1,264

 
0.1

 
1,270

Arise Virtual Solutions, Inc.
One stop
 
L + 6.50%
 
N/A(5)
 
12/2018
 

 

 

 

NetMotion Wireless Holdings, Inc.*^#
One stop
 
L + 6.25%
 
7.55%
 
10/2021
 
7,357

 
7,262

 
0.8

 
7,357

NetMotion Wireless Holdings, Inc.(4)
One stop
 
L + 6.25%
 
N/A(5)
 
10/2021
 

 
(1
)
 

 

  
 
 
 
 
 
 
 
 
8,627

 
8,525

 
0.9

 
8,627

Textile and Leather
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

SHO Holding I Corporation*
Senior loan
 
L + 5.00%
 
6.23%
 
10/2022
 
2,239

 
2,198

 
0.3

 
2,239

SHO Holding I Corporation
Senior loan
 
L + 4.00%
 
5.15%
 
10/2021
 
16

 
15

 

 
15

  
 
 
 
 
 
 
 
 
2,255

 
2,213

 
0.3

 
2,254

Utilities
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Arcos, LLC
One stop
 
L + 6.00%
 
7.30%
 
02/2021
 
3,679

 
3,626

 
0.4

 
3,679

Arcos, LLC
One stop
 
L + 6.00%
 
N/A(5)
 
02/2021
 

 

 

 

Power Plan Holdings, Inc.*^
Senior loan
 
L + 4.75%
 
5.98%
 
02/2022
 
6,434

 
6,340

 
0.7

 
6,434

PowerPlan Holdings, Inc.*
Senior loan
 
L + 4.75%
 
6.05%
 
02/2022
 
5,673

 
5,617

 
0.6

 
5,673

PowerPlan Holdings, Inc.(4)
Senior loan
 
L + 4.75%
 
N/A(5)
 
02/2021
 

 
(6
)
 

 

  
 
 
 
 
 
 
 
 
15,786

 
15,577

 
1.7

 
15,786

Total non-controlled/non-affiliate company debt investments
 
 
 
 
 
$
1,647,552

 
$
1,626,613

 
172.1

%
$
1,631,532

 
  
 
  
 
  
 
  
 
 
 
  

 
  

 
 
Equity investments (10)(11)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aerospace and Defense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTS Technical Systems
Common stock
 
N/A
 
N/A
 
N/A
 
2

 
$
1,506

 
0.1

%
$
706

NTS Technical Systems
Preferred stock B
N/A
 
N/A
 
N/A
 

 
256

 

 
264

NTS Technical Systems
Preferred stock A
N/A
 
N/A
 
N/A
 

 
128

 

 
143

Tresys Technology Holdings, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
295

 
295

 

 

Whitcraft LLC
Common stock
 
N/A
 
N/A
 
N/A
 

 
375

 
0.1

 
375

 
 
 
 
 
 
 
 
 
 
 
2,560

 
0.2

 
1,488

Automobile
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Polk Acquisition Corp.
LP interest
 
N/A
 
N/A
 
N/A
 
1

 
144

 

 
122

Beverage, Food and Tobacco
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Atkins Nutritionals, Inc
LLC interest
 
N/A
 
N/A
 
N/A
 
57

 
746

 
0.3

 
2,415

Benihana, Inc.
LLC units
 
N/A
 
N/A
 
N/A
 
43

 
699

 

 
396

C. J. Foods, Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 

 
75

 

 
302

First Watch Restaurants, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
9

 
964

 
0.3

 
2,379

Hopdoddy Holdings, LLC
LLC interest
 
N/A
 
N/A
 
N/A
 
27

 
130

 

 
89

Hopdoddy Holdings, LLC
LLC interest
 
N/A
 
N/A
 
N/A
 
12

 
36

 

 
25

Julio & Sons Company
LLC interest
 
N/A
 
N/A
 
N/A
 
521

 
521

 
0.1

 
1,081

P&P Food Safety US Acquisition, Inc.
LLC interest
 
N/A
 
N/A
 
N/A
 
2

 
204

 

 
219

Purfoods, LLC
LLC interest
 
N/A
 
N/A
 
N/A
 
381

 
381

 

 
442

Richelieu Foods, Inc.
LP interest
 
N/A
 
N/A
 
N/A
 
220

 
220

 
0.1

 
614

Rubio's Restaurants, Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 
2

 
945

 
0.2

 
1,951

Tate's Bake Shop, Inc.
LP interest
 
N/A
 
N/A
 
N/A
 
462

 
428

 
0.1

 
586

Uinta Brewing Company
LP interest
 
N/A
 
N/A
 
N/A
 
462

 
462

 

 

 
 
 
 
 
 
 
 
 
 
 
5,811

 
1.1

 
10,499

Buildings and Real Estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brooks Equipment Company, LLC
Common stock
 
N/A
 
N/A
 
N/A
 
10

 
1,020

 
0.2

 
1,346

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Chemicals, Plastics and Rubber
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Flexan, LLC
Preferred stock A
N/A
 
N/A
 
N/A
 

 
90

 

 
106


See Notes to Consolidated Financial Statements.
16




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
June 30, 2017
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Chemicals, Plastics and Rubber - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Flexan, LLC
Common stock
 
N/A
 
N/A
 
N/A
 
1

 
$

 

%
$
22

 
 
 
 
 
 
 
 
 
 
 
90

 

 
128

Diversified/Conglomerate Manufacturing
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Chase Industries, Inc.
LLC units
 
N/A
 
N/A
 
N/A
 
1

 
1,186

 
0.2

 
2,171

Inventus Power, Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 

 
370

 

 
36

Inventus Power, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 

 

 

 

Reladyne, Inc.
LP interest
 
N/A
 
N/A
 
N/A
 

 
249

 
0.1

 
435

Sunless Merger Sub, Inc.
LP interest
 
N/A
 
N/A
 
N/A
 
160

 
160

 

 

 
 
 
 
 
 
 
 
 
 
 
1,965

 
0.3

 
2,642

Diversified/Conglomerate Service
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Actiance, Inc.
Warrant
 
N/A
 
N/A
 
N/A
 
510

 
122

 

 
151

Agility Recovery Solutions Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 
67

 
341

 
0.1

 
461

Bomgar Corporation
Common stock
 
N/A
 
N/A
 
N/A
 

 
108

 

 
103

Bomgar Corporation
Common stock
 
N/A
 
N/A
 
N/A
 
72

 
1

 

 

DISA Holdings Acquisition Subsidiary Corp.
Common stock
 
N/A
 
N/A
 
N/A
 

 
154

 

 
109

HealthcareSource HR, Inc.
LLC interest
 
N/A
 
N/A
 
N/A
 

 
348

 
0.1

 
370

Host Analytics, Inc.
Warrant
 
N/A
 
N/A
 
N/A
 
166

 
130

 

 
271

Marathon Data Operating Co., LLC
LLC units
 
N/A
 
N/A
 
N/A
 
1

 
264

 
0.1

 
469

Marathon Data Operating Co., LLC
LLC units
 
N/A
 
N/A
 
N/A
 
1

 
263

 

 

Maverick Bidco Inc.
LLC units
 
N/A
 
N/A
 
N/A
 
1

 
369

 

 
369

Project Alpha Intermediate Holding, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 

 
417

 
0.1

 
450

Project Alpha Intermediate Holding, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
103

 
4

 

 
107

Secure-24, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
263

 
148

 

 
473

Switchfly, Inc.
Warrant
 
N/A
 
N/A
 
N/A
 
60

 
85

 

 
85

Vendavo, Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 
827

 
827

 
0.1

 
765

Verisys Corporation
LLC interest
 
N/A
 
N/A
 
N/A
 
261

 
261

 

 
261

Vitalyst, LLC
Preferred stock A
N/A
 
N/A
 
N/A
 

 
61

 

 
61

Vitalyst, LLC
Common stock
 
N/A
 
N/A
 
N/A
 
1

 
7

 

 

Workforce Software, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
308

 
308

 

 
333

Xmatters, Inc. and Alarmpoint, Inc.
Warrant
 
N/A
 
N/A
 
N/A
 
43

 
34

 

 
32

 
 
 
 
 
 
 
 
 
 
 
4,252

 
0.5

 
4,870

Ecological
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pace Analytical Services, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
3

 
277

 

 
333

Electronics
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diligent Corporation (12)
Preferred stock
 
N/A
 
N/A
 
N/A
 
83

 
66

 

 
121

ECI Acquisition Holdings, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
9

 
872

 
0.1

 
1,387

Gamma Technologies, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
1

 
134

 

 
397

SEI, Inc.
LLC units
 
N/A
 
N/A
 
N/A
 
340

 
265

 

 
403

Sloan Company, Inc., The
LLC units
 
N/A
 
N/A
 
N/A
 

 
122

 

 
9

Sloan Company, Inc., The
LLC units
 
N/A
 
N/A
 
N/A
 
1

 
14

 

 

Sparta Holding Corporation (12)
Common stock
 
N/A
 
N/A
 
N/A
 
1

 
567

 
0.1

 
721

Sparta Holding Corporation
Common stock
 
N/A
 
N/A
 
N/A
 
235

 
6

 
0.1

 
509

Syncsort Incorporated
Preferred stock
 
N/A
 
N/A
 
N/A
 
90

 
226

 
0.1

 
575

 
 
 
 
 
 
 
 
 
 
 
2,272

 
0.4

 
4,122

Grocery
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MyWebGrocer, Inc.
LLC units
 
N/A
 
N/A
 
N/A
 
1,418

 
1,446

 
0.2

 
1,970

MyWebGrocer, Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 
71

 
165

 
0.1

 
263

 
 
 
 
 
 
 
 
 
 
 
1,611

 
0.3

 
2,233

Healthcare, Education and Childcare
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Active Day, Inc.
LLC interest
 
N/A
 
N/A
 
N/A
 
1

 
614

 
0.1

 
680

Acuity Eyecare Holdings, LLC
LLC interest
 
N/A
 
N/A
 
N/A
 
198

 
198

 

 
198

ADCS Clinics Intermediate Holdings, LLC
Preferred stock
 
N/A
 
N/A
 
N/A
 
1

 
579

 
0.1

 
551


See Notes to Consolidated Financial Statements.
17




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
June 30, 2017
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Healthcare, Education and Childcare - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ADCS Clinics Intermediate Holdings, LLC
Common stock
 
N/A
 
N/A
 
N/A
 

 
$
6

 

%
$

Advanced Pain Management Holdings, Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 
8

 
829

 

 

Advanced Pain Management Holdings, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
67

 
67

 

 

Advanced Pain Management Holdings, Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 
1

 
64

 

 

BIORECLAMATIONIVT, LLC
LLC interest
 
N/A
 
N/A
 
N/A
 

 
365

 
0.1

 
527

California Cryobank, LLC
LLC units
 
N/A
 
N/A
 
N/A
 

 
28

 

 
35

California Cryobank, LLC
LLC units
 
N/A
 
N/A
 
N/A
 

 
11

 

 
12

California Cryobank, LLC
LLC units
 
N/A
 
N/A
 
N/A
 

 

 

 
14

Certara L.P.
LP interest
 
N/A
 
N/A
 
N/A
 

 
635

 
0.2

 
1,601

DCA Investment Holding, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
8,637

 
864

 
0.1

 
998

DCA Investment Holding, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
87

 
9

 

 
78

Deca Dental Management LLC
LLC units
 
N/A
 
N/A
 
N/A
 
357

 
357

 
0.1

 
410

Dental Holdings Corporation
LLC units
 
N/A
 
N/A
 
N/A
 
30

 
805

 
0.1

 
790

Encore GC Acquisition, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
18

 
182

 

 
157

Encore GC Acquisition, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
18

 

 

 

Eyecare Services Partners Holdings LLC
Preferred stock
 
N/A
 
N/A
 
N/A
 

 
133

 

 
133

Eyecare Services Partners Holdings LLC
LLC units
 
N/A
 
N/A
 
N/A
 

 
1

 

 
1

G & H Wire Company, Inc.
LP interest
 
N/A
 
N/A
 
N/A
 
102

 
102

 

 
127

Global Healthcare Exchange, LLC
Common stock
 
N/A
 
N/A
 
N/A
 

 
287

 

 
310

Global Healthcare Exchange, LLC
Common stock
 
N/A
 
N/A
 
N/A
 

 
5

 
0.2

 
1,669

IntegraMed America, Inc.
LLC interest
 
N/A
 
N/A
 
N/A
 

 
458

 

 
275

IntegraMed America, Inc.
LLC interest
 
N/A
 
N/A
 
N/A
 

 
417

 

 
296

Kareo, Inc.
Warrant
 
N/A
 
N/A
 
N/A
 
22

 
160

 

 
160

Katena Holdings, Inc.
LLC units
 
N/A
 
N/A
 
N/A
 

 
387

 
0.1

 
376

Lombart Brothers, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 

 
132

 

 
175

MWD Management, LLC & MWD Services, Inc.
LLC interest
 
N/A
 
N/A
 
N/A
 
121

 
121

 

 
121

Oliver Street Dermatology Holdings, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
234

 
234

 
0.1

 
294

Pentec Acquisition Sub, Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 
1

 
116

 

 
287

Pinnacle Treatment Centers, Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 

 
221

 

 
199

Pinnacle Treatment Centers, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
2

 
2

 

 

Radiology Partners, Inc.
LLC units
 
N/A
 
N/A
 
N/A
 
43

 
85

 

 
112

Reliant Pro ReHab, LLC
Preferred stock A
N/A
 
N/A
 
N/A
 
2

 
183

 
0.1

 
953

RXH Buyer Corporation
LP interest
 
N/A
 
N/A
 
N/A
 
7

 
683

 

 
204

Sage Dental Management, LLC
LLC units
 
N/A
 
N/A
 
N/A
 

 
249

 
0.1

 
362

Sage Dental Management, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
3

 
3

 

 
229

SLMP, LLC
LLC interest
 
N/A
 
N/A
 
N/A
 
256

 
256

 

 
256

Spear Education, LLC
LLC units
 
N/A
 
N/A
 
N/A
 

 
62

 

 
69

Spear Education, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
1

 
1

 

 
50

SSH Corporation
Common stock
 
N/A
 
N/A
 
N/A
 

 
40

 

 
72

Surgical Information Systems, LLC
Common stock
 
N/A
 
N/A
 
N/A
 
4

 
414

 
0.1

 
534

U.S. Renal Care, Inc.
LP interest
 
N/A
 
N/A
 
N/A
 
1

 
2,665

 
0.1

 
1,337

WHCG Management, LLC
LLC interest
 
N/A
 
N/A
 
N/A
 

 
220

 

 
220

Young Innovations, Inc.
LLC units
 
N/A
 
N/A
 
N/A
 

 
236

 

 
180

Young Innovations, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
2

 

 

 
325

 
 
 
 
 
 
 
 
 
 
 
13,486

 
1.6

 
15,377

Insurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Captive Resources Midco, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
1

 

 
0.1

 
306

Internet Pipeline, Inc. (12)
Preferred stock
 
N/A
 
N/A
 
N/A
 

 
72

 

 
83

Internet Pipeline, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
44

 
1

 

 
109

 
 
 
 
 
 
 
 
 
 
 
73

 
0.1

 
498


See Notes to Consolidated Financial Statements.
18




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
June 30, 2017
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Leisure, Amusement, Motion Pictures, Entertainment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LMP TR Holdings, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
712

 
$
712

 

%
$
523

Titan Fitness, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
7

 
712

 
0.1

 
746

 
 
 
 
 
 
 
 
 
 
 
1,424

 
0.1

 
1,269

Mining, Steel, Iron and Non-Precious Metals
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benetech, Inc.*
LLC interest
 
N/A
 
N/A
 
N/A
 
4

 

 

 

Benetech, Inc.*
LLC interest
 
N/A
 
N/A
 
N/A
 
4

 

 

 

 
 
 
 
 
 
 
 
 
 
 

 

 

Personal and Non Durable Consumer Products (Mfg. Only)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Georgica Pine Clothiers, LLC
LLC interest
 
N/A
 
N/A
 
N/A
 
11

 
106

 

 
107

Massage Envy, LLC
LLC interest
 
N/A
 
N/A
 
N/A
 
749

 
210

 
0.1

 
777

Team Technologies Acquisition Company
Common stock
 
N/A
 
N/A
 
N/A
 

 
114

 

 
279

 
 
 
 
 
 
 
 
 
 
 
430

 
0.1

 
1,163

Personal, Food and Miscellaneous Services
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Community Veterinary Partners, LLC
Common stock
 
N/A
 
N/A
 
N/A
 
1

 
114

 

 
138

DentMall MSO, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
2

 
97

 

 

DentMall MSO, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
2

 

 

 

R.G. Barry Corporation
Preferred stock A
N/A
 
N/A
 
N/A
 

 
161

 

 
106

Southern Veterinary Partners, LLC
LLC units
 
N/A
 
N/A
 
N/A
 

 
38

 

 
38

Southern Veterinary Partners, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
40

 
2

 

 
2

Vetcor Professional Practices LLC
LLC units
 
N/A
 
N/A
 
N/A
 
766

 
459

 
0.1

 
500

Vetcor Professional Practices LLC
LLC units
 
N/A
 
N/A
 
N/A
 
85

 
85

 
0.1

 
925

Veterinary Specialists of North America, LLC
LLC units
 
N/A
 
N/A
 
N/A
 

 
106

 

 
150

Wetzel's Pretzels, LLC
Common stock
 
N/A
 
N/A
 
N/A
 

 
160

 

 
179

 
 
 
 
 
 
 
 
 
 
 
1,222

 
0.2

 
2,038

Printing and Publishing
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brandmuscle, Inc.
LLC interest
 
N/A
 
N/A
 
N/A
 

 
240

 

 
236

 
 
 
 
 
 
 
 
 
 
 


 


 


Retail Stores
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Barcelona Restaurants, LLC
LP interest
 
N/A
 
N/A
 
N/A
 
1,996

 

 
0.7

 
7,060

Batteries Plus Holding Corporation
LLC units
 
N/A
 
N/A
 
N/A
 
5

 
529

 
0.1

 
656

Cycle Gear, Inc.
LLC interest
 
N/A
 
N/A
 
N/A
 
19

 
248

 

 
389

Elite Sportswear, L.P.
LLC interest
 
N/A
 
N/A
 
N/A
 

 
158

 

 
124

Feeders Supply Company, LLC
Preferred stock
 
N/A
 
N/A
 
N/A
 
2

 
192

 

 
214

Feeders Supply Company, LLC
Common stock
 
N/A
 
N/A
 
N/A
 

 

 

 
96

Marshall Retail Group LLC, The
LLC units
 
N/A
 
N/A
 
N/A
 
15

 
154

 

 
90

Paper Source, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
8

 
1,387

 
0.1

 
912

Pet Holdings ULC(7)(9)
LP interest
 
N/A
 
N/A
 
N/A
 
455

 
386

 
0.1

 
401

RCP PetPeople LP
LP interest
 
N/A
 
N/A
 
N/A
 
889

 
889

 
0.2

 
2,026

Sneaker Villa, Inc.
LLC interest
 
N/A
 
N/A
 
N/A
 
4

 
411

 
0.1

 
573

 
 
 
 
 
 
 
 
 
 
 
4,354

 
1.3

 
12,541

Utilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PowerPlan Holdings, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 

 
260

 
0.1

 
258

PowerPlan Holdings, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
151

 
3

 

 
234

 
 
 
 
 
 
 
 
 
 
 
263

 
0.1

 
492

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-controlled/non-affiliate company equity investments
 
 
 
 
 
 
 
$
41,494

 
6.5

%
$
61,397

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-controlled/non-affiliate company investments
 
 
 
 
 
$
1,647,552

 
$
1,668,107

 
178.6

%
$
1,692,929

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

See Notes to Consolidated Financial Statements.
19




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
June 30, 2017
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Controlled affiliate company investments(13)
 
 
 
 
 
 
 
 
 
 
 
 
Equity investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment Funds and Vehicles
 
 
 
 
 
 
 
 
  
 
  
 
 
 
  
Senior Loan Fund LLC (7)(14)
LLC interest
 
N/A
 
N/A
 
N/A
 
 
 
$
113,120

 
11.5

%
$
108,879

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total controlled affiliate company equity investments
 
 
 
 
 
 
 
$
113,120

 
11.5

%
$
108,879

 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
Total investments
 
 
 
 
 
$
1,647,552

 
$
1,781,227

 
190.1

%
$
1,801,808

 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents and restricted cash and cash equivalents
 
 
 
 
 
  
 
  

 
  

 
  

 
  

Cash and restricted cash
 
 
 
  
 
  

 
$
34,230

 
3.6

%
$
34,230

BlackRock Liquidity Funds T-Fund Institutional Shares (CUSIP 09248U718)
 
0.61% (15)
 
  
 
  

 
11,639

 
1.2

 
11,639

Total cash and cash equivalents and restricted cash and cash equivalents
 
 
 
 
$
45,869

 
4.8

%
$
45,869

 
 
 
 
 
 
 
 
 
 
 
Total investments and cash and cash equivalents and restricted cash and cash equivalents

 
 
 
 
 
 
 
$
1,827,096

 
194.9

%
$
1,847,677

 
* 
 
Denotes that all or a portion of the investment secures the notes offered in the 2010 Debt Securitization (as defined in Note 7).
^ 
 
Denotes that all or a portion of the investment secures the notes offered in the 2014 Debt Securitization (as defined in Note 7).
# 
 
Denotes that all or a portion of the investment collateralizes the Credit Facility (as defined in Note 7).
(1) 
The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate ("LIBOR" or "L") or Prime ("P") and which reset daily, monthly, quarterly or semiannually. For each, the Company has provided the spread over LIBOR or Prime and the weighted average current interest rate in effect at June 30, 2017. Certain investments are subject to a LIBOR or Prime interest rate floor. For fixed rate loans, a spread above a reference rate is not applicable.
(2) 
For portfolio companies with multiple interest rate contracts, the interest rate shown is a weighted average current interest rate in effect at June 30, 2017.
(3) 
The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.
(4) 
The negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par. The negative amortized cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan.
(5) 
The entire commitment was unfunded as of June 30, 2017. As such, no interest is being earned on this investment. The investment may be subject to an unused facility fee.
(6) 
Loan was on non-accrual status as of June 30, 2017, meaning that the Company has ceased recognizing interest income on the loan.
(7) 
The investment is treated as a non-qualifying asset under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act”). Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. As of June 30, 2017, total non-qualifying assets at fair value represented 6.9% of the Company's assets calculated in accordance with the 1940 Act.
(8) 
The sale of a portion of this loan does not qualify for sale accounting under Accounting Standards Codification Topic 860 - Transfers and Servicing, and therefore, the entire one stop loan asset remains in the Consolidated Schedule of Investments. (See Note 7 in the accompanying notes to the consolidated financial statements.)
(9) 
The headquarters of this portfolio company is located in Canada.
(10) 
Equity investments are non-income producing securities unless otherwise noted.
(11) 
Ownership of certain equity investments may occur through a holding company or partnership.
(12) 
The Company holds an equity investment that entitles it to receive preferential dividends.
(13) 
As defined in the 1940 Act, the Company is deemed to be both an "Affiliated Person" of and "Control" this portfolio company as the Company owns more than 25% of the portfolio company's outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement). See Note 5 in the accompanying notes to the consolidated financial statements for transactions during the nine months ended June 30, 2017 in which the issuer was both an Affiliated Person and a portfolio company that the Company is deemed to Control.
(14) 
The Company receives quarterly profit distributions from its equity investment in Senior Loan Fund LLC. (See Note 4 in the accompanying notes to the consolidated financial statements).
(15) 
The rate shown is the annualized seven-day yield as of June 30, 2017.


See Notes to Consolidated Financial Statements.
20




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments
September 30, 2016
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal/Par
Amount(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Investments
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Non-controlled/non-affiliate company investments
 
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Debt investments
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Aerospace and Defense
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

ILC Dover, LP*^#
One stop
 
L + 9.00%
 
8.00% cash/2.00% PIK
 
03/2020
 
$
17,730

 
$
17,592

 
1.7

%
$
15,070

ILC Dover, LP
One stop
 
L + 9.00%
 
8.00% cash/2.00% PIK
 
03/2019
 
784

 
776

 
0.1

 
667

NTS Technical Systems*^#
One stop
 
L + 6.25%
 
7.25
 
06/2021
 
26,079

 
25,721

 
2.9

 
25,557

NTS Technical Systems(4)
One stop
 
L + 6.25%
 
N/A(5)
 
06/2021
 

 
(83
)
 

 
(71
)
NTS Technical Systems(4)
One stop
 
L + 6.25%
 
N/A(5)
 
06/2021
 

 
(39
)
 

 
(57
)
Tresys Technology Holdings, Inc.(6)
One stop
 
L + 6.75%
 
8.00%
 
12/2017
 
3,899

 
3,845

 
0.1

 
1,170

Tresys Technology Holdings, Inc.
One stop
 
L + 6.75%
 
8.00%
 
12/2017
 
537

 
535

 
0.1

 
537

Tronair Parent, Inc.(4)
Senior loan
 
L + 4.50%
 
N/A(5)
 
09/2021
 

 
(1
)
 

 

Whitcraft LLC*^
One stop
 
L + 6.50%
 
7.50%
 
05/2020
 
13,504

 
13,404

 
1.5

 
13,504

Whitcraft LLC(4)
One stop
 
L + 6.50%
 
N/A(5)
 
05/2020
 

 
(1
)
 

 

 
 
 
 
 
 
 
 
 
62,533

 
61,749

 
6.4

 
56,377

Automobile
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

American Driveline Systems, Inc.*
Senior loan
 
L + 5.75%
 
6.75%
 
03/2020
 
1,798

 
1,758

 
0.2

 
1,798

American Driveline Systems, Inc.^
Senior loan
 
L + 5.75%
 
6.75%
 
03/2020
 
233

 
229

 

 
233

American Driveline Systems, Inc.
Senior loan
 
P + 4.75%
 
8.25%
 
03/2020
 
46

 
40

 

 
46

CH Hold Corp. (Caliber Collision)*#
Senior loan
 
L + 5.25%
 
6.25%
 
11/2019
 
5,144

 
5,108

 
0.6

 
5,144

Dent Wizard International Corporation*
Senior loan
 
L + 4.75%
 
5.75%
 
04/2020
 
2,469

 
2,460

 
0.3

 
2,469

K&N Engineering, Inc.^
Senior loan
 
P + 3.25%
 
6.75%
 
07/2019
 
2,821

 
2,797

 
0.3

 
2,821

K&N Engineering, Inc.^
Senior loan
 
L + 4.25%
 
5.25%
 
07/2019
 
133

 
122

 

 
133

K&N Engineering, Inc.(4)
Senior loan
 
L + 4.25%
 
N/A(5)
 
07/2019
 

 
(2
)
 

 

OEConnection LLC*
Senior loan
 
L + 5.00%
 
6.00%
 
06/2022
 
4,883

 
4,763

 
0.6

 
4,883

OEConnection LLC(4)
Senior loan
 
L + 5.00%
 
N/A(5)
 
06/2021
 

 
(1
)
 

 

Polk Acquisition Corp.*
Senior loan
 
L + 5.00%
 
6.00%
 
06/2022
 
4,734

 
4,662

 
0.5

 
4,734

Polk Acquisition Corp.
Senior loan
 
L + 5.00%
 
6.00%
 
06/2022
 
54

 
53

 

 
54

Polk Acquisition Corp.
Senior loan
 
L + 5.00%
 
6.64%
 
06/2022
 
18

 
16

 

 
18

Polk Acquisition Corp.(4)
Senior loan
 
L + 5.00%
 
N/A(5)
 
06/2022
 

 
(2
)
 

 

T5 Merger Corporation^
One stop
 
L + 6.25%
 
7.25%
 
03/2022
 
3,200

 
3,148

 
0.4

 
3,168

T5 Merger Corporation(4)
One stop
 
L + 6.25%
 
N/A(5)
 
03/2022
 

 
(2
)
 

 
(1
)
  
 
 
 
 
 
 
 
 
25,533

 
25,149

 
2.9

 
25,500

Banking
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
HedgeServ Holding L.P.*^#
One stop
 
L + 8.00%
 
7.00% cash/2.00% PIK
02/2019
 
17,529

 
17,451

 
2.0

 
17,529

HedgeServ Holding L.P.(4)
One stop
 
L + 6.00%
 
N/A(5)
 
02/2019
 

 
(4
)
 

 

 
 
 
 
 
 
 
 
 
17,529

 
17,447

 
2.0

 
17,529

Beverage, Food and Tobacco
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Abita Brewing Co., L.L.C.
One stop
 
L + 5.75%
 
6.75%
 
04/2021
 
7,993

 
7,871

 
0.8

 
7,194

Abita Brewing Co., L.L.C.(4)
One stop
 
L + 5.75%
 
6.75%
 
04/2021
 
4

 
3

 

 
(11
)
ABP Corporation*
Senior loan
 
L + 4.75%
 
6.00%
 
09/2018
 
4,696

 
4,667

 
0.5

 
4,461

ABP Corporation
Senior loan
 
P + 3.50%
 
7.25%
 
09/2018
 
250

 
247

 

 
225

Atkins Nutritionals, Inc*^
One stop
 
L + 8.50%
 
9.75%
 
04/2019
 
21,636

 
21,464

 
2.5

 
21,636

Atkins Nutritionals, Inc*^#
One stop
 
L + 5.00%
 
6.25%
 
01/2019
 
16,872

 
16,752

 
1.9

 
16,872

Benihana, Inc.*^
One stop
 
L + 6.00%
 
7.25%
 
01/2019
 
15,279

 
15,064

 
1.7

 
14,973

Benihana, Inc.
One stop
 
P + 4.75%
 
7.92%
 
07/2018
 
1,628

 
1,599

 
0.2

 
1,585

C. J. Foods, Inc.*
One stop
 
L + 5.00%
 
6.00%
 
05/2019
 
3,141

 
3,116

 
0.4

 
3,141

C. J. Foods, Inc.
One stop
 
L + 5.00%
 
6.00%
 
05/2019
 
663

 
656

 
0.1

 
663

C. J. Foods, Inc.(4)
One stop
 
L + 5.00%
 
N/A(5)
 
05/2019
 

 
(5
)
 

 

Firebirds International, LLC*
One stop
 
L + 5.75%
 
7.00%
 
05/2018
 
1,074

 
1,067

 
0.1

 
1,074

Firebirds International, LLC*
One stop
 
L + 5.75%
 
7.00%
 
05/2018
 
302

 
300

 

 
302

Firebirds International, LLC
One stop
 
L + 5.75%
 
7.00%
 
05/2018
 
55

 
53

 

 
55

Firebirds International, LLC(4)
One stop
 
L + 5.75%
 
N/A(5)
 
05/2018
 

 
(1
)
 

 


21

Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2016
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal/Par
Amount(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Beverage, Food and Tobacco  – (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
First Watch Restaurants, Inc.*^#
One stop
 
L + 6.00%
 
7.15%
 
12/2020
 
$
25,596

 
$
25,384

 
2.9

%
$
25,596

First Watch Restaurants, Inc.
One stop
 
P + 5.00%
 
8.05%
 
12/2020
 
1,603

 
1,596

 
0.2

 
1,603

First Watch Restaurants, Inc.
One stop
 
L + 6.00%
 
7.00%
 
12/2020
 
1,258

 
1,248

 
0.1

 
1,258

First Watch Restaurants, Inc.
One stop
 
L + 6.00%
 
7.00%
 
12/2020
 
1,255

 
1,246

 
0.2

 
1,255

First Watch Restaurants, Inc.(4)
One stop
 
L + 6.00%
 
N/A(5)
 
12/2020
 

 
(8
)
 

 

Hopdoddy Holdings, LLC
One stop
 
L + 8.00%
 
9.00%
 
08/2020
 
660

 
649

 
0.1

 
660

Hopdoddy Holdings, LLC
One stop
 
L + 8.00%
 
N/A(5)
 
08/2020
 

 

 

 

Hopdoddy Holdings, LLC(4)
One stop
 
L + 8.00%
 
N/A(5)
 
08/2020
 

 
(3
)
 

 

IT'SUGAR LLC
Subordinated debt
 
N/A
 
5.00%
 
10/2017
 
1,707

 
1,707

 
0.2

 
1,384

Purfoods, LLC
One stop
 
L + 6.25%
 
7.25%
 
05/2021
 
8,647

 
8,449

 
1.0

 
8,647

Purfoods, LLC
One stop
 
N/A
 
7.00% PIK
 
05/2026
 
101

 
101

 

 
101

Purfoods, LLC
One stop
 
L + 6.25%
 
7.25%
 
05/2021
 
25

 
24

 

 
25

Purfoods, LLC(4)
One stop
 
L + 6.25%
 
N/A(5)
 
05/2021
 

 
(1
)
 

 

Restaurant Holding Company, LLC #
Senior loan
 
L + 7.75%
 
8.75%
 
02/2019
 
4,605

 
4,581

 
0.5

 
4,513

Rubio's Restaurants, Inc*^
Senior loan
 
L + 4.75%
 
6.00%
 
11/2018
 
8,919

 
8,879

 
1.0

 
8,919

Smashburger Finance LLC
Senior loan
 
L + 5.50%
 
6.75%
 
05/2018
 
87

 
86

 

 
85

Smashburger Finance LLC(4)
Senior loan
 
L + 5.50%
 
N/A(5)
 
05/2018
 

 
(2
)
 

 

Surfside Coffee Company LLC^
One stop
 
L + 5.25%
 
6.25%
 
06/2020
 
4,470

 
4,436

 
0.5

 
4,470

Surfside Coffee Company LLC
One stop
 
L + 5.25%
 
6.25%
 
06/2020
 
337

 
329

 

 
337

Surfside Coffee Company LLC
One stop
 
L + 5.25%
 
6.25%
 
06/2020
 
26

 
25

 

 
26

Tate's Bake Shop, Inc.#
Senior loan
 
L + 5.00%
 
6.00%
 
08/2019
 
597

 
593

 
0.1

 
597

Uinta Brewing Company^
One stop
 
L + 8.50%
 
9.50%
 
08/2019
 
3,734

 
3,713

 
0.4

 
3,622

Uinta Brewing Company
One stop
 
L + 8.50%
 
9.50%
 
08/2019
 
308

 
305

 

 
296

 
 
 
 
 
 
 
 
 
137,528

 
136,190

 
15.4

 
135,564

Broadcasting and Entertainment
 
 
 
 
 
 
 
 
  

 
  

 
 
 
  

TouchTunes Interactive Networks, Inc.^
Senior loan
 
L + 4.75%
 
5.75%
 
05/2021
 
1,477

 
1,471

 
0.2

 
1,483

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Building and Real Estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brooks Equipment Company, LLC*^
One stop
 
L + 5.00%
 
6.00%
 
08/2020
 
22,970

 
22,747

 
2.6

 
22,970

Brooks Equipment Company, LLC(4)
One stop
 
L + 5.00%
 
N/A(5)
 
08/2020
 

 
(13
)
 

 

ITEL Laboratories, Inc.*
Senior loan
 
L + 4.50%
 
5.75%
 
06/2018
 
634

 
631

 
0.1

 
634

ITEL Laboratories, Inc.
Senior loan
 
L + 4.50%
 
N/A(5)
 
06/2018
 

 

 

 

 
 
 
 
 
 
 
 
 
23,604

 
23,365

 
2.7

 
23,604

Containers, Packaging and Glass
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Fort Dearborn Company*^
Senior loan
 
L + 4.75%
 
5.75%
 
10/2018
 
2,980

 
2,969

 
0.3

 
2,980

Fort Dearborn Company*^
Senior loan
 
L + 4.25%
 
5.25%
 
10/2017
 
509

 
508

 
0.1

 
509

 
 
 
 
 
 
 
 
 
3,489

 
3,477

 
0.4

 
3,489

Diversified Conglomerate Manufacturing
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Chase Industries, Inc.*^#
One stop
 
L + 5.75%
 
6.81%
 
09/2020
 
21,704

 
21,556

 
2.5

 
21,704

Chase Industries, Inc.#
One stop
 
L + 5.75%
 
7.13%
 
09/2020
 
4,816

 
4,784

 
0.5

 
4,816

Chase Industries, Inc.(4)
One stop
 
L + 5.75%
 
N/A(5)
 
09/2020
 

 
(14
)
 

 

Inventus Power, Inc*^
One stop
 
L + 5.50%
 
6.50%
 
04/2020
 
8,409

 
8,369

 
0.9

 
7,736

Inventus Power, Inc(4)
One stop
 
L + 5.50%
 
N/A(5)
 
04/2020
 

 
(3
)
 

 
(42
)
Onicon Incorporated*^#
One stop
 
L + 6.00%
 
7.00%
 
04/2020
 
13,422

 
13,286

 
1.5

 
13,221

Onicon Incorporated(4)
One stop
 
L + 6.00%
 
N/A(5)
 
04/2020
 

 
(6
)
 

 
(15
)
Pasternack Enterprises, Inc. and Fairview Microwave, Inc.#
Senior loan
 
L + 5.00%
 
6.00%
 
05/2022
 
2,460

 
2,436

 
0.3

 
2,435

PetroChoice Holdings, Inc.^
Senior loan
 
L + 5.00%
 
6.00%
 
08/2022
 
1,768

 
1,718

 
0.2

 
1,768

Plex Systems, Inc.*^
One stop
 
L + 7.50%
 
8.75%
 
06/2020
 
18,797

 
18,410

 
2.1

 
18,797

Plex Systems, Inc.(4)
One stop
 
L + 7.50%
 
N/A(5)
 
06/2020
 

 
(30
)
 

 

Reladyne, Inc.*#
Senior loan
 
L + 5.25%
 
6.25%
 
07/2022
 
10,149

 
9,992

 
1.2

 
10,047

Reladyne, Inc.
Senior loan
 
L + 5.25%
 
6.25%
 
07/2022
 
111

 
110

 

 
110


See Notes to Consolidated Financial Statements.
22




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2016
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal/Par
Amount(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Diversified Conglomerate Manufacturing  – (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reladyne, Inc.
Senior loan
 
P + 4.25%
 
7.75%
 
07/2022
 
$
26

 
$
24

 

%
$
24

Reladyne, Inc.(4)
Senior loan
 
L + 5.25%
 
N/A(5)
 
07/2022
 

 
(2
)
 

 
(1
)
Sunless Merger Sub, Inc.
Senior loan
 
L + 5.00%
 
6.25%
 
07/2019
 
1,503

 
1,509

 
0.2

 
1,503

Sunless Merger Sub, Inc.
Senior loan
 
P + 3.75%
 
7.25%
 
07/2019
 
151

 
151

 

 
151

  
 
 
 
 
 
 
 
 
83,316

 
82,290

 
9.4

 
82,254

Diversified Conglomerate Service
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Accellos, Inc.*^#
One stop
 
L + 5.75%
 
6.75%
 
07/2020
 
31,051

 
30,806

 
3.5

 
31,051

Accellos, Inc.(4)
One stop
 
L + 5.75%
 
N/A(5)
 
07/2020
 

 
(13
)
 

 

Actiance, Inc. *^
One stop
 
L + 9.00%
 
10.00%
 
04/2018
 
2,900

 
2,831

 
0.3

 
2,900

Actiance, Inc.
One stop
 
L + 9.00%
 
N/A(5)
 
04/2018
 

 

 

 

Agility Recovery Solutions Inc.*^
One stop
 
L + 6.50%
 
7.50%
 
03/2020
 
14,092

 
13,950

 
1.6

 
14,092

Agility Recovery Solutions Inc.(4)
One stop
 
L + 6.50%
 
N/A(5)
 
03/2020
 

 
(6
)
 

 

Bomgar Corporation^
One stop
 
L + 7.50%
 
8.50%
 
06/2022
 
4,888

 
4,794

 
0.6

 
4,888

Bomgar Corporation(4)
One stop
 
L + 7.50%
 
N/A(5)
 
06/2022
 

 
(2
)
 

 

CIBT Holdings, Inc.^
Senior loan
 
L + 5.25%
 
6.25%
 
06/2022
 
1,973

 
1,954

 
0.2

 
1,973

CIBT Holdings, Inc.
Senior loan
 
L + 5.25%
 
N/A(5)
 
06/2022
 

 

 

 

Clearwater Analytics, LLC#
One stop
 
L + 7.50%
 
8.50%
 
09/2022
 
10,050

 
9,877

 
1.1

 
9,925

Clearwater Analytics, LLC(4)
One stop
 
L + 7.50%
 
N/A(5)
 
09/2022
 

 
(2
)
 

 
(1
)
Daxko Acquisition Corporation#
One stop
 
L + 6.50%
 
7.50%
 
09/2022
 
8,557

 
8,430

 
1.0

 
8,472

Daxko Acquisition Corporation(4)
One stop
 
L + 6.50%
 
N/A(5)
 
09/2022
 

 
(1
)
 

 

EGD Security Systems, LLC
One stop
 
L + 6.25%
 
7.25%
 
06/2022
 
11,114

 
10,876

 
1.3

 
11,114

EGD Security Systems, LLC
One stop
 
L + 6.25%
 
7.25%
 
06/2022
 
98

 
96

 

 
98

EGD Security Systems, LLC(4)
One stop
 
L + 6.25%
 
N/A(5)
 
06/2022
 

 
(2
)
 

 

HealthcareSource HR, Inc.
One stop
 
L + 6.75%
 
7.75%
 
05/2020
 
17,724

 
17,416

 
2.0

 
17,724

HealthcareSource HR, Inc.(4)
One stop
 
L + 6.75%
 
N/A(5)
 
05/2020
 

 
(1
)
 

 

Host Analytics, Inc.
One stop
 
N/A
 
8.50% cash/2.25% PIK
 
02/2020
 
3,028

 
2,978

 
0.3

 
3,005

Host Analytics, Inc.
One stop
 
N/A
 
8.50% cash/2.25% PIK
 
08/2021
 
2,552

 
2,530

 
0.3

 
2,533

Host Analytics, Inc.(4)
One stop
 
N/A
 
N/A(5)
 
02/2020
 

 
(8
)
 

 
(6
)
III US Holdings, LLC#
One stop
 
L + 6.00%
 
7.00%
 
09/2022
 
5,510

 
5,400

 
0.6

 
5,400

III US Holdings, LLC(4)
One stop
 
L + 6.00%
 
N/A(5)
 
09/2022
 

 
(1
)
 

 
(1
)
Integration Appliance, Inc.*^
One stop
 
L + 8.25%
 
9.50%
 
09/2020
 
16,123

 
15,986

 
1.8

 
16,123

Integration Appliance, Inc.
One stop
 
L + 8.25%
 
9.50%
 
09/2020
 
7,914

 
7,771

 
0.9

 
7,914

Integration Appliance, Inc.
One stop
 
L + 8.25%
 
9.50%
 
09/2020
 
5,396

 
5,307

 
0.6

 
5,396

Integration Appliance, Inc.*
One stop
 
L + 8.25%
 
9.50%
 
09/2020
 
719

 
709

 
0.1

 
719

Integration Appliance, Inc.(4)
One stop
 
L + 8.25%
 
N/A(5)
 
09/2018
 

 
(8
)
 

 

Jensen Hughes, Inc.#
Senior loan
 
L + 5.00%
 
6.00%
 
12/2021
 
156

 
155

 

 
156

Netsmart Technologies, Inc.#
Senior loan
 
L + 4.75%
 
5.75%
 
04/2023
 
1,772

 
1,755

 
0.2

 
1,783

Netsmart Technologies, Inc.(4)
Senior loan
 
L + 4.75%
 
N/A(5)
 
01/1900
 

 
(9
)
 

 

Project Alpha Intermediate Holding, Inc.*#
One stop
 
L + 8.25%
 
9.25%
 
08/2022
 
17,257

 
16,749

 
1.9

 
16,912

PT Intermediate Holdings III, LLC
One stop
 
L + 6.50%
 
7.50%
 
06/2022
 
22,250

 
21,719

 
2.5

 
22,250

PT Intermediate Holdings III, LLC
One stop
 
P + 5.50%
 
9.00%
 
06/2022
 
25

 
21

 

 
25

Secure-24, LLC*
One stop
 
L + 6.00%
 
7.25%
 
08/2017
 
9,777

 
9,723

 
1.1

 
9,777

Secure-24, LLC^
One stop
 
L + 6.00%
 
7.25%
 
08/2017
 
1,430

 
1,424

 
0.2

 
1,430

Secure-24, LLC(4)
One stop
 
L + 6.00%
 
N/A(5)
 
08/2017
 

 
(1
)
 

 

Severin Acquisition, LLC^
Senior loan
 
L + 5.38%
 
6.38%
 
07/2021
 
892

 
884

 
0.1

 
905

Severin Acquisition, LLC^
Senior loan
 
L + 5.00%
 
6.00%
 
07/2021
 
794

 
788

 
0.1

 
794

Severin Acquisition, LLC^
Senior loan
 
L + 5.38%
 
6.38%
 
07/2021
 
607

 
601

 
0.1

 
616

Severin Acquisition, LLC^
Senior loan
 
L + 4.88%
 
5.88%
 
07/2021
 
196

 
194

 

 
195

Source Medical Solutions, Inc.
Second lien
 
L + 11.00%
 
9.00% cash/3.00% PIK
03/2018
 
9,475

 
9,340

 
1.1

 
9,475

Steelwedge Software, Inc.^
One stop
 
L + 10.00%
 
9.00% cash/2.00% PIK
09/2020
 
2,197

 
2,109

 
0.2

 
2,197

Steelwedge Software, Inc.
One stop
 
L + 10.00%
 
N/A(5)
 
09/2020
 

 

 

 


See Notes to Consolidated Financial Statements.
23




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2016
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal/Par
Amount(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Diversified Conglomerate Service  – (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TA MHI Buyer, Inc. ^
One stop
 
L + 6.50%
 
7.50%
 
09/2021
 
$
8,232

 
$
8,172

 
0.9

%
$
8,232

TA MHI Buyer, Inc.*
One stop
 
L + 6.50%
 
7.50%
 
09/2021
 
1,281

 
1,269

 
0.2

 
1,281

TA MHI Buyer, Inc. ^
One stop
 
L + 6.50%
 
7.50%
 
09/2021
 
666

 
659

 
0.1

 
666

TA MHI Buyer, Inc. ^
One stop
 
L + 6.50%
 
7.50%
 
09/2021
 
237

 
235

 

 
237

TA MHI Buyer, Inc.
One stop
 
L + 6.50%
 
N/A(5)
 
09/2021
 

 

 

 

Trintech, Inc. *^#
One stop
 
L + 6.00%
 
7.00%
 
10/2021
 
10,959

 
10,841

 
1.3

 
10,959

Trintech, Inc. (4)
One stop
 
L + 6.00%
 
N/A(5)
 
10/2021
 

 
(1
)
 

 

Vendavo, Inc.
One stop
 
L + 8.50%
 
9.50%
 
10/2019
 
17,982

 
17,717

 
2.0

 
17,672

Vendavo, Inc.(4)
One stop
 
L + 8.50%
 
N/A(5)
 
10/2019
 

 
(9
)
 

 
(25
)
Vendor Credentialing Service LLC
One stop
 
L + 6.00%
 
7.00%
 
11/2021
 
10,194

 
9,970

 
1.2

 
10,194

Vendor Credentialing Service LLC(4)
One stop
 
L + 6.00%
 
N/A(5)
 
11/2021
 

 
(1
)
 

 

Vitalyst, LLC
Senior loan
 
L + 5.25%
 
6.50%
 
09/2017
 
1,385

 
1,381

 
0.2

 
1,385

Vitalyst, LLC(4)
Senior loan
 
L + 4.25%
 
N/A(5)
 
09/2017
 

 

 

 
(2
)
Workforce Software, LLC^
One stop
 
L + 10.50%
 
4.50% cash/7.00% PIK
06/2021
 
5,039

 
5,004

 
0.6

 
5,001

Workforce Software, LLC
One stop
 
L + 3.50%
 
N/A(5)
 
06/2021
 

 

 

 

Xmatters, Inc. and Alarmpoint, Inc.
One stop
 
L + 8.50%
 
9.50%
 
08/2021
 
4,629

 
4,563

 
0.5

 
4,594

Xmatters, Inc. and Alarmpoint, Inc.
One stop
 
L + 8.50%
 
N/A(5)
 
08/2021
 

 

 

 

  
 
 
 
 
 
 
 
 
271,121

 
266,919

 
30.7

 
270,028

Ecological
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pace Analytical Services, LLC
One stop
 
L + 6.25%
 
7.25%
 
09/2022
 
15,500

 
15,074

 
1.7

 
15,345

Pace Analytical Services, LLC(4)
One stop
 
L + 6.25%
 
N/A(5)
 
09/2022
 

 
(2
)
 

 
(1
)
Pace Analytical Services, LLC(4)
One stop
 
L + 6.25%
 
N/A(5)
 
09/2022
 

 
(6
)
 

 
(3
)
 
 
 
 
 
 
 
 
 
15,500

 
15,066

 
1.7

 
15,341

Electronics
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Appriss Holdings, Inc.*#
Senior loan
 
L + 5.25%
 
6.25%
 
11/2020
 
15,451

 
15,268

 
1.7

 
15,451

Appriss Holdings, Inc.
Senior loan
 
L + 5.25%
 
6.25%
 
11/2020
 
800

 
770

 
0.1

 
800

Compusearch Software Holdings, Inc.^
Senior loan
 
L + 4.25%
 
5.25%
 
05/2021
 
1,308

 
1,305

 
0.1

 
1,308

Diligent Corporation*
One stop
 
L + 6.75%
 
7.75%
 
04/2022
 
4,888

 
4,786

 
0.6

 
4,888

Diligent Corporation(4)
One stop
 
L + 6.75%
 
N/A(5)
 
04/2022
 

 
(2
)
 

 

ECI Acquisition Holdings, Inc.*^#
One stop
 
L + 6.25%
 
7.25%
 
03/2019
 
21,668

 
21,467

 
2.5

 
21,668

ECI Acquisition Holdings, Inc.*
One stop
 
L + 6.25%
 
7.25%
 
03/2019
 
1,403

 
1,390

 
0.2

 
1,403

ECI Acquisition Holdings, Inc.(4)
One stop
 
L + 6.25%
 
N/A(5)
 
03/2019
 

 
(9
)
 

 

Gamma Technologies, LLC^#
One stop
 
L + 5.00%
 
6.00%
 
06/2021
 
18,001

 
17,859

 
2.0

 
18,001

Gamma Technologies, LLC(4)
One stop
 
L + 5.00%
 
N/A(5)
 
06/2021
 

 
(1
)
 

 

Park Place Technologies LLC*#
One stop
 
L + 5.25%
 
6.25%
 
06/2022
 
12,466

 
12,301

 
1.4

 
12,466

Park Place Technologies LLC
One stop
 
L + 5.25%
 
6.25%
 
06/2022
 
100

 
98

 

 
100

Sloan Company, Inc., The#
One stop
 
L + 7.25%
 
8.25%
 
04/2020
 
7,513

 
7,411

 
0.8

 
7,138

Sloan Company, Inc., The
One stop
 
L + 7.25%
 
8.25%
 
04/2020
 
6

 
5

 

 
4

Sovos Compliance*^
One stop
 
L + 7.25%
 
8.25%
 
03/2022
 
9,423

 
9,247

 
1.1

 
9,234

Sovos Compliance(4)
One stop
 
L + 7.25%
 
N/A(5)
 
03/2022
 

 
(1
)
 

 
(1
)
Sparta Holding Corporation*^#
One stop
 
L + 5.50%
 
6.50%
 
07/2020
 
22,309

 
22,131

 
2.5

 
22,309

Sparta Holding Corporation(4)
One stop
 
L + 5.50%
 
N/A(5)
 
07/2020
 

 
(24
)
 

 

Syncsort Incorporated*^#
One stop
 
L + 5.50%
 
6.50%
 
11/2021
 
16,609

 
16,325

 
1.9

 
16,609

Syncsort Incorporated(4)
One stop
 
L + 5.50%
 
N/A(5)
 
11/2021
 

 
(2
)
 

 

Systems Maintenance Services Holding, Inc.^
Senior loan
 
L + 4.00%
 
5.00%
 
10/2019
 
2,603

 
2,597

 
0.3

 
2,603

Watchfire Enterprises, Inc.
Second lien
 
L + 8.00%
 
9.00%
 
10/2021
 
9,434

 
9,274

 
1.1

 
9,434

 
 
 
 
 
 
 
 
 
143,982

 
142,195

 
16.3

 
143,415

Grocery
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MyWebGrocer, Inc.*
One stop
 
L + 8.75%
 
10.00%
 
05/2017
 
14,271

 
14,190

 
1.6

 
14,271

Teasdale Quality Foods, Inc.#
Senior loan
 
L + 4.75%
 
5.77%
 
10/2020
 
726

 
712

 
0.1

 
735

Teasdale Quality Foods, Inc.#
Senior loan
 
L + 4.75%
 
5.77%
 
10/2020
 
543

 
538

 
0.1

 
551

 
 
 
 
 
 
 
 
 
15,540

 
15,440

 
1.8

 
15,557


See Notes to Consolidated Financial Statements.
24




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2016
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal/Par
Amount(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Healthcare, Education and Childcare
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Active Day, Inc.
One stop
 
L + 6.00%
 
7.00%
 
12/2021
 
$
13,538

 
$
13,216

 
1.5

%
$
13,538

Active Day, Inc.(4)
One stop
 
L + 6.00%
 
N/A(5)
 
12/2021
 

 
(1
)
 

 

Active Day, Inc.(4)
One stop
 
L + 6.00%
 
N/A(5)
 
12/2021
 

 
(37
)
 

 

ADCS Clinics Intermediate Holdings, LLC
One stop
 
L + 5.75%
 
6.75%
 
05/2022
 
21,496

 
20,891

 
2.4

 
21,496

ADCS Clinics Intermediate Holdings, LLC
One stop
 
L + 5.75%
 
6.75%
 
05/2022
 
109

 
107

 

 
109

ADCS Clinics Intermediate Holdings, LLC
One stop
 
L + 5.75%
 
6.75%
 
05/2022
 
32

 
32

 

 
32

ADCS Clinics Intermediate Holdings, LLC
One stop
 
P + 4.75%
 
8.25%
 
05/2022
 
27

 
26

 

 
27

ADCS Clinics Intermediate Holdings, LLC(4)
One stop
 
L + 5.75%
 
N/A(5)
 
05/2022
 

 
(4
)
 

 

Agilitas USA, Inc.^
Senior loan
 
L + 4.00%
 
5.00%
 
10/2020
 
2,125

 
2,110

 
0.2

 
2,040

Aris Teleradiology Company, LLC*
Senior loan
 
L + 4.75%
 
5.75%
 
03/2021
 
941

 
933

 
0.1

 
941

Aris Teleradiology Company, LLC
Senior loan
 
L + 4.75%
 
N/A(5)
 
03/2021
 

 

 

 

Avalign Technologies, Inc.^
Senior loan
 
L + 4.50%
 
5.50%
 
07/2021
 
1,136

 
1,132

 
0.1

 
1,136

BIORECLAMATIONIVT, LLC *^#
One stop
 
L + 6.25%
 
7.25%
 
01/2021
 
14,392

 
14,177

 
1.6

 
14,392

BIORECLAMATIONIVT, LLC (4)
One stop
 
L + 6.25%
 
N/A(5)
 
01/2021
 

 
(1
)
 

 

California Cryobank, LLC^
One stop
 
L + 5.50%
 
6.50%
 
08/2019
 
1,550

 
1,542

 
0.2

 
1,550

California Cryobank, LLC
One stop
 
L + 5.50%
 
6.50%
 
08/2019
 
234

 
234

 

 
234

California Cryobank, LLC(4)
One stop
 
L + 5.50%
 
N/A(5)
 
08/2019
 

 
(1
)
 

 

Certara L.P.*^#
One stop
 
L + 6.25%
 
7.25%
 
12/2018
 
29,063

 
28,870

 
3.3

 
29,063

Certara L.P.(4)
One stop
 
L + 6.25%
 
N/A(5)
 
12/2018
 

 
(10
)
 

 

CLP Healthcare Services, Inc.^
Senior loan
 
L + 5.25%
 
6.25%
 
12/2020
 
3,964

 
3,928

 
0.5

 
3,964

CPI Buyer, LLC (Cole-Parmer)*^
Senior loan
 
L + 4.50%
 
5.50%
 
08/2021
 
7,740

 
7,522

 
0.9

 
7,702

Curo Health Services LLC#
Senior loan
 
L + 5.50%
 
6.50%
 
02/2022
 
1,970

 
1,955

 
0.2

 
1,976

DCA Investment Holding, LLC*^#
One stop
 
L + 5.25%
 
6.25%
 
07/2021
 
18,968

 
18,634

 
2.2

 
18,968

DCA Investment Holding, LLC*^#
One stop
 
L + 5.25%
 
6.25%
 
07/2021
 
13,604

 
13,460

 
1.5

 
13,604

DCA Investment Holding, LLC
One stop
 
P + 4.25%
 
7.75%
 
07/2021
 
1,340

 
1,325

 
0.2

 
1,340

Deca Dental Management LLC*^
One stop
 
L + 6.25%
 
7.25%
 
07/2020
 
4,146

 
4,100

 
0.5

 
4,146

Deca Dental Management LLC
One stop
 
L + 6.25%
 
7.25%
 
07/2020
 
504

 
496

 
0.1

 
504

Deca Dental Management LLC
One stop
 
L + 6.25%
 
7.25%
 
07/2020
 
50

 
49

 

 
50

Delta Educational Systems*(6)
Senior loan
 
P + 4.75%
 
8.25%
 
12/2016
 
1,438

 
1,433

 

 
216

Delta Educational Systems(4)(6)
Senior loan
 
L + 6.00%
 
N/A(5)
 
12/2016
 

 

 

 
(60
)
Dental Holdings Corporation
One stop
 
L + 5.50%
 
6.50%
 
02/2020
 
7,599

 
7,480

 
0.9

 
7,599

Dental Holdings Corporation
One stop
 
L + 5.50%
 
6.50%
 
02/2020
 
1,155

 
1,143

 
0.1

 
1,155

Dental Holdings Corporation
One stop
 
P + 4.25%
 
7.75%
 
02/2020
 
213

 
204

 

 
213

eSolutions, Inc.
One stop
 
L + 6.50%
 
7.50%
 
03/2022
 
12,866

 
12,605

 
1.5

 
12,866

eSolutions, Inc.(4)
One stop
 
L + 6.50%
 
N/A(5)
 
03/2022
 

 
(1
)
 

 

G & H Wire Company, Inc.*^
One stop
 
L + 5.75%
 
6.75%
 
12/2017
 
13,157

 
13,112

 
1.5

 
13,157

G & H Wire Company, Inc.
One stop
 
P + 4.50%
 
8.00%
 
12/2017
 
357

 
355

 

 
357

Joerns Healthcare, LLC*^
One stop
 
L + 5.00%
 
6.00%
 
05/2020
 
3,838

 
3,802

 
0.4

 
3,647

Katena Holdings, Inc.^
One stop
 
L + 6.25%
 
7.25%
 
06/2021
 
8,699

 
8,627

 
1.0

 
8,699

Katena Holdings, Inc.
One stop
 
P + 5.25%
 
8.75%
 
06/2021
 
850

 
843

 
0.1

 
850

Katena Holdings, Inc.
One stop
 
P + 5.25%
 
8.75%
 
06/2021
 
13

 
12

 

 
13

Lombart Brothers, Inc.
One stop
 
L + 6.75%
 
7.75%
 
04/2022
 
3,508

 
3,411

 
0.4

 
3,508

Lombart Brothers, Inc.
One stop
 
L + 6.75%
 
7.75%
 
04/2022
 
8

 
7

 

 
8

Maverick Healthcare Group, LLC*
Senior loan
 
L + 7.50%
 
7.25% cash/2.00% PIK
 
04/2017
 
1,921

 
1,915

 
0.2

 
1,921

Northwestern Management Services, LLC (Sage Dental)
One stop
 
L + 5.25%
 
6.50%
 
10/2019
 
72

 
71

 

 
71

Northwestern Management Services, LLC (Sage Dental)
One stop
 
P + 4.00%
 
7.50%
 
10/2019
 
17

 
16

 

 
16

Northwestern Management Services, LLC (Sage Dental)(4)
One stop
 
L + 5.25%
 
N/A(5)
 
10/2019
 

 
(2
)
 

 
(3
)
Oliver Street Dermatology Holdings, LLC
One stop
 
L + 6.50%
 
7.50%
 
05/2022
 
8,605

 
8,369

 
1.0

 
8,605

Oliver Street Dermatology Holdings, LLC
One stop
 
L + 6.50%
 
7.50%
 
05/2022
 
58

 
57

 

 
58

Oliver Street Dermatology Holdings, LLC(4)
One stop
 
L + 6.50%
 
N/A(5)
 
05/2022
 

 
(3
)
 

 

Pinnacle Treatment Centers, Inc.
One stop
 
L + 6.25%
 
7.25%
 
08/2021
 
10,081

 
9,812

 
1.1

 
9,980


See Notes to Consolidated Financial Statements.
25




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2016
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal/Par
Amount(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Healthcare, Education and Childcare  – (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pinnacle Treatment Centers, Inc.
One stop
 
P + 5.00%
 
8.50%
 
08/2021
 
$
5

 
$
3

 

%
$
4

Pinnacle Treatment Centers, Inc.(4)
One stop
 
L + 6.25%
 
N/A(5)
 
08/2021
 

 
(3
)
 

 
(1
)
PPT Management, LLC#
One stop
 
L + 5.00%
 
6.00%
 
04/2020
 
4,179

 
4,143

 
0.5

 
4,179

PPT Management, LLC
One stop
 
L + 5.00%
 
6.00%
 
04/2020
 
137

 
136

 

 
137

PPT Management, LLC(4)
One stop
 
L + 5.00%
 
N/A(5)
 
04/2020
 

 
(1
)
 

 

Premise Health Holding Corp.#
One stop
 
L + 4.50%
 
5.50%
 
06/2020
 
14,963

 
14,881

 
1.7

 
14,963

Premise Health Holding Corp.(4)
One stop
 
L + 4.50%
 
N/A(5)
 
06/2020
 

 
(16
)
 

 

Pyramid Healthcare, Inc.#
One stop
 
L + 5.75%
 
6.75%
 
08/2019
 
1,484

 
1,471

 
0.2

 
1,484

Radiology Partners, Inc.#
One stop
 
L + 5.50%
 
6.50%
 
09/2020
 
22,570

 
22,295

 
2.6

 
22,344

Radiology Partners, Inc.
One stop
 
L + 5.50%
 
6.50%
 
09/2020
 
708

 
708

 
0.1

 
701

Radiology Partners, Inc.(4)
One stop
 
L + 5.50%
 
N/A(5)
 
09/2020
 

 
(4
)
 

 
(4
)
Radiology Partners, Inc.(4)
One stop
 
L + 5.50%
 
N/A(5)
 
09/2020
 

 
(18
)
 

 
(8
)
Reliant Pro ReHab, LLC*
Senior loan
 
L + 5.00%
 
6.00%
 
12/2017
 
2,548

 
2,533

 
0.3

 
2,548

Reliant Pro ReHab, LLC
Senior loan
 
P + 4.00%
 
7.50%
 
12/2017
 
59

 
54

 

 
59

RXH Buyer Corporation*^
One stop
 
L + 5.75%
 
6.75%
 
09/2021
 
17,435

 
17,148

 
1.9

 
16,738

RXH Buyer Corporation
One stop
 
L + 5.75%
 
6.75%
 
09/2021
 
1,973

 
1,940

 
0.2

 
1,894

RXH Buyer Corporation
One stop
 
P + 4.75%
 
8.25%
 
09/2021
 
35

 
32

 

 
27

RXH Buyer Corporation(4)
One stop
 
L + 5.75%
 
N/A(5)
 
09/2021
 

 
(14
)
 

 
(34
)
Southern Anesthesia and Surgical
One stop
 
L + 5.50%
 
6.50%
 
11/2017
 
5,537

 
5,502

 
0.6

 
5,537

Southern Anesthesia and Surgical^
One stop
 
L + 5.50%
 
6.50%
 
11/2017
 
2,715

 
2,701

 
0.3

 
2,715

Southern Anesthesia and Surgical(4)
One stop
 
L + 5.50%
 
N/A(5)
 
11/2017
 

 
(3
)
 

 

Spear Education, LLC#
One stop
 
L + 6.00%
 
7.00%
 
08/2019
 
4,732

 
4,697

 
0.5

 
4,732

Spear Education, LLC
One stop
 
L + 6.00%
 
7.00%
 
08/2019
 
76

 
76

 

 
76

Spear Education, LLC
One stop
 
L + 6.00%
 
N/A(5)
 
08/2019
 

 

 

 

Summit Behavioral Holdings I, LLC*
One stop
 
L + 5.00%
 
6.00%
 
06/2021
 
4,382

 
4,330

 
0.5

 
4,382

Summit Behavioral Holdings I, LLC(4)
One stop
 
L + 5.00%
 
N/A(5)
 
06/2021
 

 
(1
)
 

 

Summit Behavioral Holdings I, LLC(4)
One stop
 
L + 5.00%
 
N/A(5)
 
06/2021
 

 
(2
)
 

 

Surgical Information Systems, LLC^
Senior loan
 
L + 3.00%
 
4.50%
 
09/2018
 
1,701

 
1,699

 
0.2

 
1,701

U.S. Anesthesia Partners, Inc.#
One stop
 
L + 5.00%
 
6.12%
 
12/2019
 
5,882

 
5,864

 
0.7

 
5,882

WIRB-Copernicus Group, Inc.*^
Senior loan
 
L + 5.00%
 
6.00%
 
08/2022
 
9,912

 
9,815

 
1.1

 
9,812

WIRB-Copernicus Group, Inc.(4)
Senior loan
 
L + 5.00%
 
N/A(5)
 
08/2022
 

 
(1
)
 

 
(1
)
Young Innovations, Inc.*#
Senior loan
 
L + 4.25%
 
5.25%
 
01/2019
 
1,733

 
1,725

 
0.2

 
1,739

Young Innovations, Inc.*
Senior loan
 
L + 4.75%
 
5.75%
 
01/2019
 
304

 
299

 
0.1

 
308

Young Innovations, Inc.
Senior loan
 
P + 3.25%
 
6.75%
 
01/2018
 
34

 
34

 

 
33

 
 
 
 
 
 
 
 
 
314,488

 
309,976

 
35.4

 
311,635

Home and Office Furnishings, Housewares, and Durable Consumer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Plano Molding Company, LLC*^#
One stop
 
L + 6.50%
 
7.50%
 
05/2021
 
17,934

 
17,796

 
1.9

 
16,498

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Hotels, Motels, Inns, and Gaming
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Aimbridge Hospitality, LLC^
Senior loan
 
L + 4.50%
 
5.75%
 
10/2018
 
815

 
804

 
0.1

 
815

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Insurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Captive Resources Midco, LLC*^#
One stop
 
L + 5.75%
 
6.75%
 
06/2020
 
26,127

 
25,876

 
3.0

 
26,127

Captive Resources Midco, LLC(4)
One stop
 
L + 5.75%
 
N/A(5)
 
06/2020
 

 
(16
)
 

 

Captive Resources Midco, LLC(4)
One stop
 
L + 5.75%
 
N/A(5)
 
06/2020
 

 
(17
)
 

 

Higginbotham Insurance Agency, Inc.*
Senior loan
 
L + 5.25%
 
6.25%
 
11/2021
 
1,301

 
1,290

 
0.1

 
1,303

Internet Pipeline, Inc.
One stop
 
L + 7.25%
 
8.25%
 
08/2022
 
4,910

 
4,797

 
0.6

 
4,910

Internet Pipeline, Inc.(4)
One stop
 
L + 7.25%
 
N/A(5)
 
08/2021
 

 
(1
)
 

 

RSC Acquisition, Inc.#
Senior loan
 
L + 5.25%
 
6.25%
 
11/2022
 
629

 
624

 
0.1

 
629

  
 
 
 
 
 
 
 
 
32,967

 
32,553

 
3.8

 
32,969


See Notes to Consolidated Financial Statements.
26




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2016
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal/Par
Amount(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Leisure, Amusement, Motion Pictures and Entertainment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NFD Operating, LLC*
One stop
 
L + 7.00%
 
8.25%
 
06/2021
 
$
2,349

 
$
2,315

 
0.3

%
$
2,349

NFD Operating, LLC
One stop
 
L + 7.00%
 
N/A(5)
 
06/2021
 

 

 

 

NFD Operating, LLC(4)
One stop
 
L + 7.00%
 
N/A(5)
 
06/2021
 

 
(1
)
 

 

Self Esteem Brands, LLC^
Senior loan
 
L + 4.00%
 
5.00%
 
02/2020
 
2,934

 
2,924

 
0.3

 
2,934

Self Esteem Brands, LLC(4)
Senior loan
 
L + 4.00%
 
N/A(5)
 
02/2020
 

 
(3
)
 

 

Teaching Company, The
One stop
 
L + 6.25%
 
7.25%
 
08/2020
 
18,926

 
18,705

 
2.2

 
18,926

Teaching Company, The
One stop
 
L + 6.25%
 
7.25%
 
08/2020
 
40

 
39

 

 
40

Titan Fitness, LLC*
One stop
 
L + 6.50%
 
7.75%
 
09/2019
 
13,223

 
13,070

 
1.5

 
13,223

Titan Fitness, LLC
One stop
 
L + 6.50%
 
7.75%
 
09/2019
 
1,747

 
1,733

 
0.2

 
1,747

Titan Fitness, LLC
One stop
 
L + 6.50%
 
7.75%
 
09/2019
 
582

 
546

 
0.1

 
582

Titan Fitness, LLC
One stop
 
P + 5.25%
 
8.75%
 
09/2019
 
419

 
406

 

 
419

 
 
 
 
 
 
 
 
 
40,220

 
39,734

 
4.6

 
40,220

Mining, Steel, Iron and Non-Precious Metals
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benetech, Inc.*
One stop
 
L + 9.00%
 
10.25%
 
10/2017
 
4,425

 
4,413

 
0.4

 
3,894

Benetech, Inc.
One stop
 
P + 7.75%
 
11.25%
 
10/2017
 
152

 
149

 

 
20

 
 
 
 
 
 
 
 
 
4,577

 
4,562

 
0.4

 
3,914

Oil and Gas
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Drilling Info, Inc.^#(9)
One stop
 
L + 5.50%
 
6.50%
 
06/2020
 
1,806

 
1,782

 
0.2

 
1,792

Drilling Info, Inc.(9)
One stop
 
L + 5.50%
 
6.50%
 
06/2020
 
516

 
506

 
0.1

 
513

Drilling Info, Inc.(4)(9)
One stop
 
L + 5.50%
 
N/A(5)
 
06/2020
 

 
(1
)
 

 

 
 
 
 
 
 
 
 
 
2,322

 
2,287

 
0.3

 
2,305

Personal and Non-Durable Consumer Products
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Georgica Pine Clothiers, LLC
One Stop
 
L + 5.50%
 
6.50%
 
11/2021
 
5,736

 
5,638

 
0.7

 
5,736

Georgica Pine Clothiers, LLC^
One Stop
 
L + 5.50%
 
6.50%
 
11/2021
 
500

 
495

 
0.1

 
500

Georgica Pine Clothiers, LLC(4)
One Stop
 
L + 5.50%
 
N/A(5)
 
11/2021
 

 
(1
)
 

 

Massage Envy, LLC*
One Stop
 
L + 7.25%
 
8.50%
 
09/2018
 
15,151

 
15,025

 
1.7

 
15,151

Massage Envy, LLC(4)
One Stop
 
L + 7.25%
 
N/A(5)
 
09/2018
 

 
(6
)
 

 

Orthotics Holdings, Inc *#
One Stop
 
L + 5.00%
 
6.00%
 
02/2020
 
8,375

 
8,303

 
0.9

 
7,956

Orthotics Holdings, Inc *#(7)
One Stop
 
L + 5.00%
 
6.00%
 
02/2020
 
1,373

 
1,361

 
0.1

 
1,304

Orthotics Holdings, Inc
One Stop
 
L + 5.00%
 
6.00%
 
02/2020
 
139

 
129

 

 
77

Orthotics Holdings, Inc (4)
One Stop
 
L + 5.00%
 
N/A(5)
 
02/2020
 

 
(12
)
 

 
(70
)
Orthotics Holdings, Inc (4)(7)
One Stop
 
L + 5.00%
 
N/A(5)
 
02/2020
 

 
(1
)
 

 
(7
)
Team Technologies Acquisition Company^
Senior loan
 
L + 5.00%
 
6.25%
 
12/2017
 
4,660

 
4,644

 
0.5

 
4,613

Team Technologies Acquisition Company#
Senior loan
 
L + 5.50%
 
6.75%
 
12/2017
 
859

 
854

 
0.1

 
857

Team Technologies Acquisition Company(4)
Senior loan
 
L + 5.00%
 
N/A(5)
 
12/2017
 

 
(1
)
 

 
(3
)
 
 
 
 
 
 
 
 
 
36,793

 
36,428

 
4.1

 
36,114

Personal and Non-Durable Consumer Products
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Community Veterinary Partners, LLC
One stop
 
L + 5.50%
 
6.50%
 
10/2021
 
16

 
16

 

 
16

Focus Brands Inc.*^
Second lien
 
L + 9.00%
 
10.25%
 
08/2018
 
9,000

 
8,965

 
1.0

 
9,000

Ignite Restaurant Group, Inc. (Joe's Crab Shack)^
One stop
 
L + 7.00%
 
8.00%
 
02/2019
 
4,322

 
4,286

 
0.5

 
4,236

PetVet Care Centers LLC^
Senior loan
 
L + 4.75%
 
5.75%
 
12/2020
 
5,837

 
5,753

 
0.7

 
5,837

PetVet Care Centers LLC^
Senior loan
 
L + 4.75%
 
5.75%
 
12/2020
 
1,219

 
1,203

 
0.1

 
1,219

PetVet Care Centers LLC(4)
Senior loan
 
L + 4.75%
 
N/A(5)
 
12/2019
 

 
(9
)
 

 

Vetcor Professional Practices LLC*^#
One stop
 
L + 6.25%
 
7.25%
 
04/2021
 
29,043

 
28,526

 
3.3

 
29,043

Vetcor Professional Practices LLC*
One stop
 
L + 6.25%
 
7.25%
 
04/2021
 
966

 
956

 
0.1

 
966

Vetcor Professional Practices LLC
One stop
 
L + 6.25%
 
7.25%
 
04/2021
 
550

 
501

 
0.1

 
550

Vetcor Professional Practices LLC#
One stop
 
L + 6.25%
 
7.25%
 
04/2021
 
288

 
285

 

 
288

Vetcor Professional Practices LLC
One stop
 
L + 6.25%
 
7.25%
 
04/2021
 
236

 
234

 

 
236

Vetcor Professional Practices LLC(4)
One stop
 
L + 6.25%
 
N/A(5)
 
04/2021
 

 
(16
)
 

 

Vetcor Professional Practices LLC(4)
One stop
 
L + 6.25%
 
N/A(5)
 
04/2021
 

 
(4
)
 

 

Veterinary Specialists of North America, LLC*^
One stop
 
L + 5.25%
 
6.25%
 
07/2021
 
6,101

 
6,029

 
0.7

 
6,041


See Notes to Consolidated Financial Statements.
27




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2016
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal/Par
Amount(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Personal and Non-Durable Consumer Products  – (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Veterinary Specialists of North America, LLC
One stop
 
L + 5.25%
 
6.25%
 
07/2021
 
$
64

 
$
63

 

%
$
63

Veterinary Specialists of North America, LLC(4)
One stop
 
L + 5.25%
 
N/A(5)
 
07/2021
 

 
(3
)
 

 
(3
)
Veterinary Specialists of North America, LLC(4)
One stop
 
L + 5.25%
 
N/A(5)
 
07/2021
 

 
(18
)
 

 
(13
)
Wetzel's Pretzels, LLC
One stop
 
L + 6.75%
 
7.75%
 
09/2021
 
7,064

 
6,873

 
0.8

 
6,993

Wetzel's Pretzels, LLC(4)
One stop
 
L + 6.75%
 
N/A(5)
 
09/2021
 

 
(1
)
 

 

  
 
 
 
 
 
 
 
 
64,706

 
63,639

 
7.3

 
64,472

Printing and Publishing
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brandmuscle, Inc.#
Senior loan
 
L + 5.00%
 
6.00%
 
12/2021
 
631

 
624

 
0.1

 
636

Market Track, LLC*^#
One stop
 
L + 7.00%
 
8.00%
 
10/2019
 
28,603

 
28,354

 
3.3

 
28,603

Market Track, LLC*
One stop
 
L + 7.00%
 
8.00%
 
10/2019
 
2,175

 
2,156

 
0.2

 
2,175

Market Track, LLC#
One stop
 
L + 7.00%
 
8.00%
 
10/2019
 
2,141

 
2,126

 
0.2

 
2,141

Market Track, LLC
One stop
 
L + 7.00%
 
8.00%
 
10/2019
 
1,353

 
1,334

 
0.2

 
1,353

Market Track, LLC
One stop
 
L + 7.00%
 
8.00%
 
10/2019
 
1,284

 
1,278

 
0.1

 
1,284

Marketo, Inc.
One stop
 
L + 9.50%
 
10.50%
 
08/2021
 
9,940

 
9,649

 
1.1

 
9,791

Marketo, Inc.(4)
One stop
 
L + 9.50%
 
N/A(5)
 
08/2021
 

 
(2
)
 

 
(1
)
 
 
 
 
 
 
 
 
 
46,127

 
45,519

 
5.2

 
45,982

Retail Stores
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Batteries Plus Holding Corporation
One stop
 
L + 6.75%
 
7.75%
 
07/2022
 
13,860

 
13,516

 
1.6

 
13,791

Batteries Plus Holding Corporation(4)
One stop
 
L + 6.75%
 
N/A(5)
 
07/2022
 

 
(2
)
 

 
(1
)
CVS Holdings I, LP*^#
One stop
 
L + 6.25%
 
7.25%
 
08/2021
 
22,283

 
21,920

 
2.5

 
21,948

CVS Holdings I, LP*
One stop
 
L + 6.25%
 
7.25%
 
08/2021
 
321

 
315

 

 
316

CVS Holdings I, LP(4)
One stop
 
L + 6.25%
 
N/A(5)
 
08/2020
 

 
(3
)
 

 
(3
)
CVS Holdings I, LP(4)
One stop
 
L + 6.25%
 
N/A(5)
 
08/2021
 

 
(8
)
 

 
(6
)
Cycle Gear, Inc.^
One stop
 
L + 6.50%
 
7.50%
 
01/2020
 
10,533

 
10,379

 
1.2

 
10,533

Cycle Gear, Inc.(4)
One stop
 
L + 6.50%
 
N/A(5)
 
01/2020
 

 
(17
)
 

 

Cycle Gear, Inc.(4)
One stop
 
L + 6.50%
 
N/A(5)
 
01/2020
 

 
(9
)
 

 

DTLR, Inc.*^
One stop
 
L + 6.50%
 
7.50%
 
10/2020
 
11,394

 
11,303

 
1.3

 
11,394

Elite Sportswear, L.P.
Senior loan
 
L + 5.00%
 
6.00%
 
03/2020
 
2,821

 
2,781

 
0.3

 
2,814

Elite Sportswear, L.P.
Senior loan
 
L + 5.25%
 
6.25%
 
03/2020
 
1,451

 
1,431

 
0.2

 
1,458

Elite Sportswear, L.P.
Senior loan
 
L + 5.25%
 
6.25%
 
03/2020
 
220

 
216

 

 
221

Elite Sportswear, L.P.
Senior loan
 
P + 3.75%
 
7.25%
 
03/2020
 
117

 
112

 

 
116

Express Oil Change, LLC
Senior loan
 
L + 5.00%
 
6.01%
 
12/2017
 
1,210

 
1,197

 
0.1

 
1,210

Express Oil Change, LLC^
Senior loan
 
L + 5.00%
 
6.00%
 
12/2017
 
473

 
470

 
0.1

 
473

Feeders Supply Company, LLC
One stop
 
L + 5.75%
 
6.75%
 
04/2021
 
4,298

 
4,211

 
0.5

 
4,298

Feeders Supply Company, LLC
Subordinated debt
 
N/A
 
12.50% cash/7.00% PIK
04/2021
 
43

 
43

 

 
43

Feeders Supply Company, LLC(4)
One stop
 
L + 5.75%
 
N/A(5)
 
04/2021
 

 
(1
)
 

 

Marshall Retail Group, LLC, The^#
One stop
 
L + 6.00%
 
7.00%
 
08/2020
 
12,207

 
12,107

 
1.3

 
11,474

Marshall Retail Group, LLC, The
One stop
 
L + 6.00%
 
7.00%
 
08/2019
 
410

 
392

 

 
278

Mills Fleet Farm Group LLC*^
One stop
 
L + 5.50%
 
6.50%
 
02/2022
 
4,776

 
4,641

 
0.5

 
4,776

Paper Source, Inc.*^#
One stop
 
L + 6.25%
 
7.25%
 
09/2018
 
12,757

 
12,679

 
1.5

 
12,757

Paper Source, Inc.
One stop
 
L + 6.25%
 
7.25%
 
09/2018
 
1,694

 
1,680

 
0.2

 
1,694

Paper Source, Inc.
One stop
 
P + 5.00%
 
8.50%
 
09/2018
 
339

 
331

 

 
339

Pet Holdings ULC*^(7)(8)
One stop
 
L + 5.50%
 
6.50%
 
07/2022
 
14,775

 
14,491

 
1.7

 
14,627

Pet Holdings ULC(7)(8)
One stop
 
P + 4.50%
 
8.00%
 
07/2022
 
37

 
35

 

 
36

Pet Holdings ULC(4)(7)(8)
One stop
 
L + 5.50%
 
N/A(5)
 
07/2022
 

 
(1
)
 

 
(1
)
Sneaker Villa, Inc.*^
One stop
 
L + 7.75%
 
8.75%
 
12/2020
 
12,467

 
12,361

 
1.4

 
12,467

 
 
 
 
 
 
 
 
 
128,486

 
126,570

 
14.4

 
127,052

Telecommunications
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Arise Virtual Solutions, Inc.^
One stop
 
L + 6.50%
 
7.75%
 
12/2018
 
1,382

 
1,373

 
0.2

 
1,313

Arise Virtual Solutions, Inc.(4)
One stop
 
L + 6.50%
 
N/A(5)
 
12/2018
 

 
(1
)
 

 
(4
)
Hosting.com Inc.*
Senior loan
 
L + 4.50%
 
5.75%
 
12/2017
 
720

 
717

 
0.1

 
720


See Notes to Consolidated Financial Statements.
28




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2016
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal/Par
Amount(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Telecommunications  – (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Hosting.com Inc.
Senior loan
 
L + 4.50%
 
5.75%
 
12/2017
 
$
82

 
$
81

 

%
$
82

  
 
 
 
 
 
 
 
 
2,184

 
2,170

 
0.3

 
2,111

Textile and Leather
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

SHO Holding I Corporation*
Senior loan
 
L + 5.00%
 
6.00%
 
10/2022
 
2,062

 
2,016

 
0.2

 
2,062

SHO Holding I Corporation(4)
Senior loan
 
L + 4.00%
 
N/A(5)
 
10/2021
 

 
(1
)
 

 
(1
)
  
 
 
 
 
 
 
 
 
2,062

 
2,015

 
0.2

 
2,061

Utilities
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Arcos, LLC
One stop
 
L + 6.50%
 
7.50%
 
02/2021
 
4,014

 
3,944

 
0.5

 
4,014

Arcos, LLC
One stop
 
L + 6.50%
 
N/A(5)
 
02/2021
 

 

 

 

PowerPlan Holdings, Inc.*#
Senior loan
 
L + 4.75%
 
5.75%
 
02/2022
 
6,790

 
6,699

 
0.8

 
6,790

PowerPlan Holdings, Inc.(4)
Senior loan
 
L + 4.75%
 
N/A(5)
 
02/2021
 

 
(6
)
 

 

  
 
 
 
 
 
 
 
 
10,804

 
10,637

 
1.3

 
10,804

Total non-controlled/non-affiliate company debt investments
 
 
 
 
 
$
1,505,637

 
$
1,485,448

 
169.2

%
$
1,487,093

 
  
 
  
 
  
 
  
 
 
 
  

 
  

 
 
Equity Investments (10)(11)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aerospace and Defense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTS Technical Systems
Common stock
 
N/A
 
N/A
 
N/A
 
2

 
$
1,506

 
0.2

%
$
1,317

Tresys Technology Holdings, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
295

 
295

 

 

Whitcraft LLC
Warrant
 
N/A
 
N/A
 
N/A
 

 

 

 
232

Whitcraft LLC
Preferred stock B
N/A
 
N/A
 
N/A
 
1

 
670

 
0.1

 
1,194

 
 
 
 
 
 
 
 
 
 
 
2,471

 
0.3

 
2,743

Automobile
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
K&N Engineering, Inc.
Preferred stock A
N/A
 
N/A
 
N/A
 

 

 

 
27

K&N Engineering, Inc.
Preferred stock B
N/A
 
N/A
 
N/A
 

 

 

 
27

K&N Engineering, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 

 

 

 
213

Polk Acquisition Corp.
LP interest
 
N/A
 
N/A
 
N/A
 
1

 
144

 
0.1

 
144

 
 
 
 
 
 
 
 
 
 
 
144

 
0.1

 
411

Beverage, Food and Tobacco
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Atkins Nutritionals, Inc
LLC interest
 
N/A
 
N/A
 
N/A
 
57

 
746

 
0.3

 
2,630

Benihana, Inc.
LLC units
 
N/A
 
N/A
 
N/A
 
43

 
699

 
0.1

 
501

C. J. Foods, Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 

 
157

 

 
309

First Watch Restaurants, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
9

 
964

 
0.2

 
1,712

Hopdoddy Holdings, LLC
LLC interest
 
N/A
 
N/A
 
N/A
 
27

 
130

 

 
50

Hopdoddy Holdings, LLC
LLC interest
 
N/A
 
N/A
 
N/A
 
12

 
36

 

 
14

Julio & Sons Company
LLC interest
 
N/A
 
N/A
 
N/A
 
521

 
521

 
0.1

 
801

Purfoods, LLC
LLC interest
 
N/A
 
N/A
 
N/A
 
381

 
381

 

 
381

Richelieu Foods, Inc.
LP interest
 
N/A
 
N/A
 
N/A
 
220

 
220

 
0.1

 
588

Rubio's Restaurants, Inc.
Preferred stock A
N/A
 
N/A
 
N/A
 
2

 
945

 
0.3

 
2,625

Tate's Bake Shop, Inc.
LP interest
 
N/A
 
N/A
 
N/A
 
462

 
428

 
0.1

 
483

Uinta Brewing Company
LP interest
 
N/A
 
N/A
 
N/A
 
462

 
462

 

 

 
 
 
 
 
 
 
 
 
 
 
5,689

 
1.2

 
10,094

Buildings and Real Estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brooks Equipment Company, LLC
Common stock
 
N/A
 
N/A
 
N/A
 
10

 
1,021

 
0.1

 
1,248

Chemicals, Plastics and Rubber
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Flexan, LLC
Preferred stock
 
N/A
 
N/A
 
N/A
 

 
73

 

 
75

Flexan, LLC
Common stock
 
N/A
 
N/A
 
N/A
 
1

 

 

 

 
 
 
 
 
 
 
 
 
 
 
73

 

 
75

Diversified Conglomerate Manufacturing
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Chase Industries, Inc.
LLC units
 
N/A
 
N/A
 
N/A
 
1

 
1,186

 
0.2

 
1,666

Inventus Power, Inc
Preferred stock
 
N/A
 
N/A
 
N/A
 

 
370

 

 
137

Inventus Power, Inc
Common stock
 
N/A
 
N/A
 
N/A
 

 

 

 


See Notes to Consolidated Financial Statements.
29




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2016
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal/Par
Amount(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Diversified Conglomerate Manufacturing  – (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reladyne, Inc.
LP interest
 
N/A
 
N/A
 
N/A
 

 
$
249

 

%
$
249

Sunless Merger Sub, Inc.
LP interest
 
N/A
 
N/A
 
N/A
 

 
160

 

 

 
 
 
 
 
 
 
 
 
 
 
1,965

 
0.2

 
2,052

Diversified Conglomerate Service
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Actiance, Inc.
Warrant
 
N/A
 
N/A
 
N/A
 
344

 
95

 

 
99

Agility Recovery Solutions Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 
67

 
341

 
0.1

 
610

Bomgar Corporation
Common stock
 
N/A
 
N/A
 
N/A
 
100

 
108

 

 
108

Bomgar Corporation
Common stock
 
N/A
 
N/A
 
N/A
 
72

 
1

 

 
1

DISA Holdings Acquisition Subsidiary Corp.
Common stock
 
N/A
 
N/A
 
N/A
 

 
154

 

 
43

HealthcareSource HR, Inc.
LLC interest
 
N/A
 
N/A
 
N/A
 

 
348

 

 
323

Host Analytics, Inc.
Warrant
 
N/A
 
N/A
 
N/A
 
180

 

 

 
155

Marathon Data Operating Co., LLC
LLC units
 
N/A
 
N/A
 
N/A
 
1

 
264

 
0.1

 
385

Marathon Data Operating Co., LLC
LLC units
 
N/A
 
N/A
 
N/A
 
1

 
264

 

 

Project Alpha Intermediate Holding, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
1

 
417

 

 
417

Project Alpha Intermediate Holding, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
103

 
4

 

 
4

Secure-24, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
263

 
263

 
0.1

 
445

Steelwedge Software, Inc.
Warrant
 
N/A
 
N/A
 
N/A
 
36,575

 
76

 

 
84

TA MHI Buyer, Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 

 
202

 

 
260

Vendavo, Inc.
Preferred stock A
N/A
 
N/A
 
N/A
 
827

 
827

 
0.1

 
852

Vitalyst, LLC
Preferred stock A
N/A
 
N/A
 
N/A
 

 
61

 

 
44

Vitalyst, LLC
Common stock
 
N/A
 
N/A
 
N/A
 
1

 
7

 

 

Workforce Software, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
308

 
308

 
0.1

 
308

Xmatters, Inc. and Alarmpoint, Inc.
Warrant
 
N/A
 
N/A
 
N/A
 
40

 
32

 

 
32

 
 
 
 
 
 
 
 
 
 
 
3,772

 
0.5

 
4,170

Ecological
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pace Analytical Services, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
2

 
277

 

 
277

 
 
 
 
 
 
 
 
 
 
 
277

 

 
277

Electronics
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diligent Corporation
Preferred stock
 
N/A
 
N/A
 
N/A
 
83

 
83

 

 
83

ECI Acquisition Holdings, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
9

 
873

 
0.1

 
1,130

Gamma Technologies, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
1

 
134

 

 
188

SEI, Inc.
LLC units
 
N/A
 
N/A
 
N/A
 
340

 
340

 

 
317

Sloan Company, Inc., The
LLC units
 
N/A
 
N/A
 
N/A
 

 
122

 

 
23

Sloan Company, Inc., The
LLC units
 
N/A
 
N/A
 
N/A
 
1

 
14

 

 

Sparta Holding Corporation
Common stock
 
N/A
 
N/A
 
N/A
 
1

 
567

 
0.1

 
688

Sparta Holding Corporation
Common stock
 
N/A
 
N/A
 
N/A
 
235

 
6

 

 
162

Syncsort Incorporated
Preferred stock
 
N/A
 
N/A
 
N/A
 
90

 
226

 
0.1

 
313

 
 
 
 
 
 
 
 
 
 
 
2,365

 
0.3

 
2,904

Grocery
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MyWebGrocer, Inc.
LLC units
 
N/A
 
N/A
 
N/A
 
1,418

 
1,446

 
0.2

 
2,038

MyWebGrocer, Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 
71

 
165

 

 
267

 
 
 
 
 
 
 
 
 
 
 
1,611

 
0.2

 
2,305

Healthcare, Education and Childcare
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Active Day, Inc.
LLC interest
 
N/A
 
N/A
 
N/A
 
1

 
614

 
0.1

 
706

ADCS Clinics Intermediate Holdings, LLC
Preferred stock
 
N/A
 
N/A
 
N/A
 
1

 
579

 
0.1

 
579

ADCS Clinics Intermediate Holdings, LLC
Common stock
 
N/A
 
N/A
 
N/A
 

 
6

 

 
6

Advanced Pain Management Holdings, Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 
8

 
829

 
0.1

 
382

Advanced Pain Management Holdings, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
67

 
67

 

 

Advanced Pain Management Holdings, Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 
1

 
64

 

 
199

BIORECLAMATIONIVT, LLC
LLC interest
 
N/A
 
N/A
 
N/A
 

 
365

 
0.1

 
399

California Cryobank, LLC
LLC units
 
N/A
 
N/A
 
N/A
 

 
28

 

 
31

California Cryobank, LLC
LLC units
 
N/A
 
N/A
 
N/A
 

 

 

 


See Notes to Consolidated Financial Statements.
30




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2016
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal/Par
Amount(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Healthcare, Education and Childcare  – (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Certara L.P.
LP interest
 
N/A
 
N/A
 
N/A
 

 
$
635

 
0.1

%
$
1,266

DCA Investment Holding, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
6,386

 
864

 
0.1

 
940

DCA Investment Holding, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
65

 
9

 

 
146

Deca Dental Management LLC
LLC units
 
N/A
 
N/A
 
N/A
 
357

 
357

 

 
392

Dental Holdings Corporation
LLC units
 
N/A
 
N/A
 
N/A
 
734

 
775

 
0.1

 
925

Encore GC Acquisition, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
14

 
182

 

 
200

Encore GC Acquisition, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
14

 

 

 
36

G & H Wire Company, Inc
LP interest
 
N/A
 
N/A
 
N/A
 
102

 
102

 

 
107

Global Healthcare Exchange, LLC
Common stock
 
N/A
 
N/A
 
N/A
 

 
287

 

 
289

Global Healthcare Exchange, LLC
Common stock
 
N/A
 
N/A
 
N/A
 

 
5

 
0.1

 
350

IntegraMed America, Inc.
LLC interest
 
N/A
 
N/A
 
N/A
 

 
458

 

 
51

IntegraMed America, Inc.
LLC interest
 
N/A
 
N/A
 
N/A
 

 
417

 
0.1

 
404

Katena Holdings, Inc.
LLC units
 
N/A
 
N/A
 
N/A
 

 
387

 
0.1

 
459

Lombart Brothers, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 

 
106

 

 
106

Northwestern Management Services, LLC
LLC units
 
N/A
 
N/A
 
N/A
 

 
249

 

 
335

Northwestern Management Services, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
3

 
3

 

 
215

Oliver Street Dermatology Holdings, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
234

 
234

 

 
234

Pentec Acquisition Sub, Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 
1

 
116

 

 
238

Pinnacle Treatment Centers, Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 
2

 
221

 

 
221

Pinnacle Treatment Centers, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 

 
2

 

 
2

Radiology Partners, Inc.
LLC units
 
N/A
 
N/A
 
N/A
 
43

 
85

 

 
149

Reliant Pro ReHab, LLC
Preferred stock A
N/A
 
N/A
 
N/A
 
2

 
183

 
0.1

 
998

RXH Buyer Corporation
LP interest
 
N/A
 
N/A
 
N/A
 
7

 
683

 
0.1

 
376

Southern Anesthesia and Surgical
LLC units
 
N/A
 
N/A
 
N/A
 
487

 
487

 
0.1

 
594

Spear Education, LLC
LLC units
 
N/A
 
N/A
 
N/A
 

 
62

 

 
65

Spear Education, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
1

 
1

 

 
41

SSH Corporation
Common stock
 
N/A
 
N/A
 
N/A
 

 
40

 

 
92

Surgical Information Systems, LLC
Common stock
 
N/A
 
N/A
 
N/A
 
4

 
414

 
0.1

 
482

U.S. Renal Care, Inc.
LP interest
 
N/A
 
N/A
 
N/A
 
1

 
2,665

 
0.3

 
2,979

Young Innovations, Inc.
LLC units
 
N/A
 
N/A
 
N/A
 

 
236

 
0.1

 
315

Young Innovations, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
2

 

 

 
343

 
 
 
 
 
 
 
 
 
 
 
12,817

 
1.8

 
15,652

Insurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Captive Resources Midco, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
1

 

 
0.1

 
186

Internet Pipeline, Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 

 
98

 

 
113

Internet Pipeline, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
43

 
1

 

 
35

 
 
 
 
 
 
 
 
 
 
 
99

 
0.1

 
334

Leisure, Amusement, Motion Pictures
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  and Entertainment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LMP TR Holdings, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
712

 
712

 
0.1

 
782

Titan Fitness, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
6

 
712

 
0.1

 
777

 
 
 
 
 
 
 
 
 
 
 
1,424

 
0.2

 
1,559

Personal and Non-Durable Consumer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Products
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
C.B. Fleet Company, Incorporated
LLC units
 
N/A
 
N/A
 
N/A
 
2

 
134

 
0.1

 
270

Georgica Pine Clothiers, LLC
LLC interest
 
N/A
 
N/A
 
N/A
 
11

 
106

 

 
116

Massage Envy, LLC
LLC interest
 
N/A
 
N/A
 
N/A
 
749

 
749

 
0.1

 
1,149

Team Technologies Acquisition Company
Common stock
 
N/A
 
N/A
 
N/A
 

 
114

 

 
246

 
 
 
 
 
 
 
 
 
 
 
1,103

 
0.2

 
1,781

Personal, Food and Miscellaneous Services
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Community Veterinary Partners, LLC
Common stock
 
N/A
 
N/A
 
N/A
 
1

 
114

 

 
144

R.G. Barry Corporation
Preferred stock
 
N/A
 
N/A
 
N/A
 

 
161

 

 
156


See Notes to Consolidated Financial Statements.
31




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2016
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal/Par
Amount(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Personal, Food and Miscellaneous Services  – (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vetcor Professional Practices LLC
LLC units
 
N/A
 
N/A
 
N/A
 
766

 
$
525

 
0.1

%
$
536

Vetcor Professional Practices LLC
LLC units
 
N/A
 
N/A
 
N/A
 
85

 
85

 
0.1

 
624

Veterinary Specialists of North America, LLC
LLC units
 
N/A
 
N/A
 
N/A
 

 
106

 

 
106

Wetzel's Pretzels, LLC
Common stock
 
N/A
 
N/A
 
N/A
 

 
160

 

 
160

 
 
 
 
 
 
 
 
 
 
 
1,151

 
0.2

 
1,726

Printing and Publishing
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brandmuscle, Inc.
LLC interest
 
N/A
 
N/A
 
N/A
 

 
240

 

 
273

Market Track, LLC
Preferred stock
 
N/A
 
N/A
 
N/A
 

 
145

 

 
215

Market Track, LLC
Common stock
 
N/A
 
N/A
 
N/A
 
1

 
145

 
0.1

 
344

 
 
 
 
 
 
 
 
 
 
 
530

 
0.1

 
832

Retail Stores
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Barcelona Restaurants, LLC
LP interest
 
N/A
 
N/A
 
N/A
 
1,996

 

 
0.6

 
5,507

Batteries Plus Holding Corporation
LLC units
 
N/A
 
N/A
 
N/A
 
5

 
529

 
0.1

 
529

Cycle Gear, Inc.
LLC interest
 
N/A
 
N/A
 
N/A
 
19

 
248

 

 
397

DentMall MSO, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
2

 
97

 

 

DentMall MSO, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
2

 

 

 

Elite Sportswear, L.P.
LLC interest
 
N/A
 
N/A
 
N/A
 

 
83

 

 
111

Express Oil Change, LLC
LLC interest
 
N/A
 
N/A
 
N/A
 
81

 
81

 

 
272

Feeders Supply Company, LLC
Preferred stock
 
N/A
 
N/A
 
N/A
 
2

 
155

 

 
155

Feeders Supply Company, LLC
Common stock
 
N/A
 
N/A
 
N/A
 

 

 

 

Marshall Retail Group LLC, The
LLC units
 
N/A
 
N/A
 
N/A
 
15

 
154

 

 
46

Paper Source, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
8

 
1,387

 
0.2

 
1,423

Pet Holdings ULC(7)(8)
LP interest
 
N/A
 
N/A
 
N/A
 
455

 
387

 

 
351

RCP PetPeople LP
LP interest
 
N/A
 
N/A
 
N/A
 
889

 
889

 
0.2

 
1,556

Sneaker Villa, Inc.
LLC interest
 
N/A
 
N/A
 
N/A
 
4

 
411

 
0.1

 
541

 
 
 
 
 
 
 
 
 
 
 
4,421

 
1.2

 
10,888

Utilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PowerPlan Holdings, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 

 
303

 
0.1

 
349

PowerPlan Holdings, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
151

 
3

 

 
273

 
 
 
 
 
 
 
 
 
 
 
306

 
0.1

 
622

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-controlled/non-affiliate company equity investments
 
 
 
 
 
 
 
$
41,239

 
6.8

%
$
59,673

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-controlled/non-affiliate company investments
 
 
 
 
 
$
1,505,637

 
$
1,526,687

 
176.0

%
$
1,546,766

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-controlled affiliate company investments(12)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Leisure, Amusement, Motion Pictures
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 and Entertainment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Competitor Group, Inc.*#(7)
One stop
 
L + 9.25%
 
5.00% cash/5.50% PIK
 
11/2018
 
$
9,233

 
$
8,837

 
1.0

%
$
8,540

Competitor Group, Inc.(7)
One stop
 
L + 9.25%
 
5.00% cash/5.50% PIK
 
11/2018
 
1,095

 
1,063

 
0.1

 
1,013

Competitor Group, Inc.(7)
One stop
 
L + 9.25%
 
5.00% cash/5.50% PIK
 
11/2018
 
6

 
6

 

 
6

 
 
 
 
 
 
 
 
 
10,334

 
9,906

 
1.1

 
9,559

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-controlled affiliate company debt investments
 
 
 
 
 
$
10,334

 
$
9,906

 
1.1

%
$
9,559

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

See Notes to Consolidated Financial Statements.
32




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2016
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal/Par
Amount(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Equity Investments (10)(11)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Leisure, Amusement, Motion Pictures
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 and Entertainment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Competitor Group, Inc.*#(7)
Preferred stock
 
N/A
 
N/A
 
N/A
 
4

 
$
4,226

 

%
$
59

Competitor Group, Inc.(7)
LLC interest
 
N/A
 
N/A
 
N/A
 
1

 
714

 

 

Competitor Group, Inc.*#(7)
Common stock
 
N/A
 
N/A
 
N/A
 
27

 

 

 

 
 
 
 
 
 
 
 
 
 
 
$
4,940

 

%
$
59

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-controlled affiliate company equity investments
 
 
 
 
 
 
 
$
4,940

 

%
$
59

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-controlled affiliate company investments
 
 
 
 
 
$
10,334

 
$
14,846

 
1.1

%
$
9,618

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Controlled affiliate company investments(13)
 
 
 
 
 
 
 
 
 
 
 
 
Debt investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment Funds and Vehicles
 
 
 
 
 
 
 
 
  
 
  
 
 
 
  
Senior Loan Fund LLC(7)
Subordinated debt
 
L + 8.00%
 
8.47%
 
05/2020
 
$
77,301

 
$
77,301

 
8.8

%
$
77,301

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total controlled affiliate company debt investments
 
 
 
 
 
$
77,301

 
$
77,301

 
8.8

%
$
77,301

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity Investments(10)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment Funds and Vehicles
 
 
 
 
 
 
 
 
  
 
  
 
 
 
  
Senior Loan Fund LLC(7)
LLC interest
 
N/A
 
N/A
 
N/A
 
 
 
$
31,339

 
3.1

%
$
26,927

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total controlled affiliate company equity investments
 
 
 
 
 
 
 
$
31,339

 
3.1

%
$
26,927

 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
Total controlled affiliate company investments
 
 
 
 
 
$
77,301

 
$
108,640

 
11.9

%
$
104,228

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total investments
 
 
 
 
 
$
1,593,272

 
$
1,650,173

 
189.0

%
$
1,660,612

 
 
 
 
 
 
 
 
 
 
 
Cash, Restricted Cash and Cash Equivalents
 
 
 
 
 
 
  
 
  

 
  

 
  

 
  

Cash and Restricted Cash
 
 
 
  
 
  

 
$
45,259

 
5.1

%
$
45,259

BlackRock Liquidity Funds T-Fund Institutional Shares (CUSIP 09248U718)
 
0.21% (14)
 
  
 
  

 
44,281

 
5.0

 
44,281

Total Cash, Restricted Cash and Cash Equivalents
 
 
 
 
$
89,540

 
10.1

%
$
89,540

 
 
 
 
 
 
 
 
 
 
 
Total Investments and Cash, Restricted Cash and Cash Equivalents
 
 
 
 
 
 
 
$
1,739,713

 
199.1

%
$
1,750,152

 
* 
 
Denotes that all or a portion of the loan secures the notes offered in the 2010 Debt Securitization (as defined in Note 7).
^ 
 
Denotes that all or a portion of the loan secures the notes offered in the 2014 Debt Securitization (as defined in Note 7).
# 
 
Denotes that all or a portion of the loan collateralizes the Credit Facility (as defined in Note 7).
(1) 
The majority of the investments bear interest at a rate that may be determined by reference to LIBOR or Prime and which reset daily, quarterly or semiannually. For each, the Company has provided the spread over LIBOR or Prime and the weighted average current interest rate in effect at September 30, 2016. Certain investments are subject to a LIBOR or Prime interest rate floor. For fixed rate loans, a spread above a reference rate is not applicable.
(2) 
For portfolio companies with multiple interest rate contracts, the interest rate shown is a weighted average current interest rate in effect at September 30, 2016.
(3) 
The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.
(4) 
The negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par. The negative amortized cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan.
(5) 
The entire commitment was unfunded as of September 30, 2016. As such, no interest is being earned on this investment.
(6) 
Loan was on non-accrual status as of September 30, 2016, meaning that the Company has ceased recognizing interest income on the loan.

See Notes to Consolidated Financial Statements.
33




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2016
(In thousands)


(7) 
The investment is treated as a non-qualifying asset under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets.  As of September 30, 2016, total non-qualifying assets at fair value represented 7.4% of the Company's assets calculated in accordance with the 1940 Act.
(8) 
The headquarters of this portfolio company is located in Canada.
(9) 
The sale of a portion of this loan does not qualify for sale accounting under ASC Topic 860 - Transfers and Servicing, and therefore, the entire one stop loan asset remains in the Consolidated Schedule of Investments. (See Note 7 in the accompanying notes to the consolidated financial statements.)
(10) 
Non-income producing securities.
(11) 
Ownership of certain equity investments may occur through a holding company or partnership.
(12) 
As defined in the 1940 Act, the Company is deemed to be an "Affiliated Person" of the company as the Company along with affiliated entities owns five percent or more of the portfolio company's securities.
(13) 
As defined in the 1940 Act, the Company is deemed to be both an "Affiliated Person" of and "Control" this portfolio company as the Company owns more than 25% of the portfolio company's outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement). See Note 5 in the accompanying notes to the consolidated financial statements for transactions during the year ended September 30, 2016 in which the issuer was both an Affiliated Person and a portfolio company that the Company is deemed to Control.
(14) 
The rate shown is the annualized seven-day yield as of September 30, 2016.


See Notes to Consolidated Financial Statements.
34




    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      


Note 1.    Organization

Golub Capital BDC, Inc. (“GBDC” and, collectively with its subsidiaries, the “Company”) is an externally managed, closed-end, non-diversified management investment company. GBDC has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, for U.S. federal income tax purposes, GBDC has elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).

The Company’s investment strategy is to invest primarily in senior secured and one stop (a loan that combines characteristics of traditional first lien senior secured loans and second lien or subordinated loans) loans of U.S. middle-market companies. The Company may also selectively invest in second lien and subordinated (a loan that ranks senior only to a borrower’s equity securities and ranks junior to all of such borrower’s other indebtedness in priority of payment) loans of, and warrants and minority equity securities in, U.S. middle-market companies. The Company has entered into an investment advisory agreement (the “Investment Advisory Agreement”) with GC Advisors LLC (the “Investment Adviser”), under which the Investment Adviser manages the day-to-day operations of, and provides investment advisory services to, the Company. Under an administration agreement (the “Administration Agreement”) the Company is provided with certain services by an administrator (the “Administrator”), which is currently Golub Capital LLC.

Note 2.    Significant Accounting Policies and Recent Accounting Updates

Basis of presentation:  The Company is an investment company as defined in the accounting and reporting guidance under Accounting Standards Codification (“ASC”) Topic 946 — Financial Services   Investment Companies (“ASC Topic 946”).
The accompanying interim consolidated financial statements of the Company and related financial information have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6 and 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, the consolidated financial statements reflect all adjustments and reclassifications consisting solely of normal accruals that are necessary for the fair presentation of financial results as of and for the periods presented. All intercompany balances and transactions have been eliminated. Certain prior period amounts have been reclassified to conform to the current period presentation.

Fair value of financial instruments:  The Company applies fair value to all of its financial instruments in accordance with ASC Topic 820 — Fair Value Measurement (“ASC Topic 820”). ASC Topic 820 defines fair value, establishes a framework used to measure fair value and requires disclosures for fair value measurements. In accordance with ASC Topic 820, the Company has categorized its financial instruments carried at fair value, based on the priority of the valuation technique, into a three-level fair value hierarchy. Fair value is a market-based measure considered from the perspective of the market participant who holds the financial instrument rather than an entity-specific measure. Therefore, when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that management believes market participants would use in pricing the financial instrument at the measurement date.

The availability of observable inputs can vary depending on the financial instrument and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new, whether the product is traded on an active exchange or in the secondary market and the current market conditions. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for financial instruments classified as Level 3.


35

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

Any changes to the valuation methodology are reviewed by management and the Company’s board of directors (the “Board”) to confirm that the changes are appropriate. As markets change, new products develop and the pricing for products becomes more or less transparent, the Company will continue to refine its valuation methodologies. See further description of fair value methodology in Note 6.

Use of estimates:  The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Consolidation:  As provided under Regulation S-X and ASC Topic 946, the Company will generally not consolidate its investment in a company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. Accordingly, the Company consolidated the results of the Company’s wholly-owned subsidiaries Golub Capital BDC 2010-1 Holdings LLC (“Holdings”), Golub Capital BDC 2010-1 LLC (“2010 Issuer”), Golub Capital BDC CLO 2014 LLC (“2014 Issuer”), Golub Capital BDC Funding LLC (“Funding”), Golub Capital BDC Holdings, LLC (“BDC Holdings”), GC SBIC IV, L.P. (“SBIC IV”), GC SBIC V, L.P. (“SBIC V”), GC SBIC VI, L.P. (“SBIC VI”) and, prior to its dissolution on January 27, 2016, Golub Capital BDC Revolver Funding LLC (“Revolver Funding”) in its consolidated financial statements. The Company does not consolidate its non-controlling interest in Senior Loan Fund LLC ("SLF"). See further description of the Company’s investment in SLF in Note 4.

Assets related to transactions that do not meet ASC Topic 860 - Transfers and Servicing (“ASC Topic 860”) requirements for accounting sale treatment are reflected in the Company’s consolidated statements of financial condition as investments. Those assets are owned by special purpose entities, including 2010 Issuer, 2014 Issuer and Funding, that are consolidated in the Company’s consolidated financial statements. The creditors of the special purpose entities have received security interests in such assets and such assets are not intended to be available to the creditors of GBDC (or any affiliate of GBDC).

Cash and cash equivalents: Cash and cash equivalents are highly liquid investments with an original maturity of three months or less at the date of acquisition. The Company deposits its cash in financial institutions and, at times, such balances may be in excess of the Federal Deposit Insurance Corporation insurance limits.

Restricted cash and cash equivalents:  Restricted cash and cash equivalents include amounts that are collected and are held by trustees who have been appointed as custodians of the assets securing certain of the Company’s financing transactions. Restricted cash is held by the trustees for payment of interest expense and principal on the outstanding borrowings or reinvestment into new assets. In addition, restricted cash and cash equivalents include amounts held within the Company’s small business investment company (“SBIC”) subsidiaries. The amounts held within the SBICs are generally restricted to the originations of new loans by the SBICs and the payment of U.S. Small Business Administration (“SBA”) debentures and related interest expense.

Revenue recognition:

Investments and related investment income:  Interest income is accrued based upon the outstanding principal amount and contractual interest terms of debt investments.

Loan origination fees, original issue discount and market discount or premium are capitalized, and the Company accretes or amortizes such amounts over the life of the loan as interest income. For the three and nine months ended June 30, 2017, interest income included $3,170 and $6,793, respectively, of accretion of discounts. For the three and nine months ended June 30, 2016, interest income included $2,210 and $5,896, respectively, of accretion of discounts. For the three and nine months ended June 30, 2017, the Company received loan origination fees of $3,947 and $6,976, respectively. For the three and nine months ended June 30, 2016, the Company received loan origination fees of $3,257 and $8,048, respectively.


36

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

For investments with contractual payment-in-kind (“PIK”) interest, which represents contractual interest accrued and added to the principal balance that generally becomes due at maturity, the Company will not accrue PIK interest if the portfolio company valuation indicates that the PIK interest is not collectible. For the three and nine months ended June 30, 2017, the Company recorded PIK income of $632 and $2,028, respectively, and received PIK payments in cash of $233 and $419, respectively. For the three and nine months ended June 30, 2016, the Company recorded PIK income of $335 and $650, respectively, and received PIK payments in cash of $4 and $4, respectively.

In addition, the Company may generate revenue in the form of amendment, structuring or due diligence fees, fees for providing managerial assistance, consulting fees and prepayment premiums on loans. The Company records these fees as fee income when received. All other income is recorded into income when earned. For the three and nine months ended June 30, 2017, fee income included $926 and $1,191, respectively, of prepayment premiums. For the three and nine months ended June 30, 2016, fee income included $3 and $570, respectively, of prepayment premiums.

For the three and nine months ended June 30, 2017, the Company received interest and fee income in cash, which excludes capitalized loan origination fees, in the amounts of $30,805 and $89,962 respectively. For the three and nine months ended June 30, 2016, the Company received interest and fees in cash, which excludes capitalized loan origination fees, in the amounts of $28,694 and $83,438 respectively.

Dividend income on preferred equity securities is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies. Each distribution received from limited liability company (“LLC”) and limited partnership (“LP”) investments is evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, the Company will not record distributions from equity investments in LLCs and LPs as dividend income unless there are sufficient accumulated tax-basis earnings and profits in the LLC or LP prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment. For the three and nine months ended June 30, 2017, the Company recorded dividend income of $1,169 and $4,492, respectively, and return of capital distributions of $7,368 and $10,449. For the three and nine months ended June 30, 2016, the Company recorded dividend income of $1,179 and $3,364, respectively, and return of capital distributions of $2,969 and $5,127.

Investment transactions are accounted for on a trade-date basis. Realized gains or losses on investments are measured by the difference between the net proceeds from the disposition and the amortized cost basis of investment, without regard to unrealized gains or losses previously recognized. The Company reports current period changes in fair value of investments that are measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investments in the consolidated statements of operations.

Non-accrual loans: A loan may be left on accrual status during the period the Company is pursuing repayment of the loan. Management reviews all loans that become 90 days or more past due on principal and interest, or when there is reasonable doubt that principal or interest will be collected, for possible placement on non-accrual status. When a loan is placed on non-accrual status, unpaid interest credited to income is reversed. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management’s judgment, payments are likely to remain current. The total fair value of non-accrual loans was $3,407 and $1,326 as of June 30, 2017 and September 30, 2016, respectively.

Partial loan sales:  The Company follows the guidance in ASC Topic 860 when accounting for loan participations and other partial loan sales. Such guidance requires a participation or other partial loan sale to meet the definition of a “participating interest”, as defined in the guidance, in order for sale treatment to be allowed. Participations or other partial loan sales which do not meet the definition of a participating interest remain on the Company’s consolidated statements of financial condition and the proceeds are recorded as a secured borrowing until the definition is met. Secured borrowings

37

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

are carried at fair value to correspond with the related investments, which are carried at fair value. See Note 7 for additional information.

Income taxes:  The Company has elected to be treated as a RIC under Subchapter M of the Code and operates in a manner so as to qualify for the tax treatment applicable to RICs. In order to qualify and be subject to tax as a RIC, among other things, the Company is required to meet certain source of income and asset diversification requirements and timely distribute dividends for U.S. federal income tax purposes to its stockholders of an amount generally at least equal to 90% of investment company taxable income, as defined by the Code and determined without regard to any deduction for dividends paid, for each tax year. The Company has made, and intends to continue to make, the requisite distributions to its stockholders, which will generally relieve the Company from U.S. federal income taxes with respect to all income distributed to its stockholders.

Depending on the level of taxable income earned in a tax year, the Company may choose to retain taxable income in excess of current year dividend distributions, and would distribute such taxable income in the next tax year. The Company may then be required to incur a 4% excise tax on such income. To the extent that the Company determines that its estimated current year annual taxable income, determined on a calendar year basis, could exceed estimated current calendar year dividend distributions, the Company accrues excise tax, if any, on estimated excess taxable income as taxable income is earned. For the three and nine months ended June 30, 2017, $0 and $17, respectively, was incurred for U.S. federal excise tax. For the three and nine months ended June 30, 2016, $0 and $333, respectively, was incurred for U.S. federal excise tax.

The Company accounts for income taxes in conformity with ASC Topic 740  Income Taxes (“ASC Topic 740”). ASC Topic 740 provides guidelines for how uncertain tax positions should be recognized, measured, presented and disclosed in financial statements. ASC Topic 740 requires the evaluation of tax positions taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense or tax benefit in the current year. It is the Company’s policy to recognize accrued interest and penalties related to uncertain tax benefits in income tax expense. There were no material unrecognized tax benefits or unrecognized tax liabilities related to uncertain income tax positions through June 30, 2017. The Company's tax returns for 2014 through 2016 tax years remain subject to examination by U.S. federal and most state tax authorities.

Dividends and distributions:  Dividends and distributions to common stockholders are recorded on the ex-dividend date. The amount to be paid out as a dividend or distribution is determined by the Board each quarter and is generally based upon the earnings estimated by management. Net realized capital gains, if any, are distributed at least annually, although the Company may decide to retain such capital gains for investment.

The Company has adopted a dividend reinvestment plan (“DRIP”) that provides for reinvestment of any distributions the Company declares in cash on behalf of its stockholders, unless a stockholder elects to receive cash. As a result, if the Board authorizes and the Company declares a cash distribution, then stockholders who participate in the DRIP will have their cash distribution reinvested in additional shares of the Company’s common stock, rather than receiving the cash distribution. The Company may use newly issued shares under the guidelines of the DRIP (if the Company’s shares are trading at a premium to net asset value), or the Company may purchase shares in the open market in connection with the obligations under the plan. In particular, if the Company’s shares are trading at a significant discount to net asset value (“NAV”) and the Company is otherwise permitted under applicable law to purchase such shares, the Company intends to purchase shares in the open market in connection with any obligations under the DRIP.

In the event the market price per share of the Company’s common stock on the date of a distribution exceeds the most recently computed NAV per share of the common stock, the Company will issue shares of common stock to participants in the DRIP at the greater of the most recently computed NAV per share of common stock or 95% of the current market price per share of common stock (or such lesser discount to the current market price per share that still exceeds the most recently computed NAV per share of common stock).

38

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      


Share repurchase plan:  The Company has a share repurchase program (the “Program”) which allows the Company to repurchase up to $75,000 of the Company’s outstanding common stock on the open market at prices below the Company’s NAV as reported in its most recently published consolidated financial statements. The Board most recently reapproved the Program in August 2017 and the Program may be implemented at the discretion of management. The shares may be purchased from time to time at prevailing market prices, through open market transactions, including block transactions. The Company did not make any repurchases of its common stock during the three and nine months ended June 30, 2017 and 2016.

Deferred debt issuance costs: Deferred debt issuance costs represent fees and other direct incremental costs incurred in connection with the Company’s borrowings. As of June 30, 2017 and September 30, 2016, the Company had deferred debt issuance costs of $4,284 and $5,627, respectively. These amounts are amortized and included in interest expense in the consolidated statements of operations over the estimated average life of the borrowings. Amortization expense for the three and nine months ended June 30, 2017 was $843 and $2,488, respectively. Amortization expense for the three and nine months ended June 30, 2016 was $977 and $3,227, respectively.

Deferred offering costs: Deferred offering costs consist of fees paid in relation to legal, accounting, regulatory and printing work completed in preparation of equity offerings. Deferred offering costs are charged against the proceeds from equity offerings when received. As of June 30, 2017 and September 30, 2016, deferred offering costs, which are included in other assets on the consolidated statements of financial condition, were $111 and $145, respectively.

Accounting for derivative instruments:  The Company does not utilize hedge accounting and marks its derivatives, if any, to market through a net change in unrealized appreciation (depreciation) on derivative instruments in the consolidated statements of operations.

Recent accounting pronouncements:  In November 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash a consensus of FASB Emerging Issues Task Force, which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This guidance is effective for annual reporting periods, and the interim periods within those periods, beginning after December 15, 2017 and early adoption is permitted. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements.

Note 3.    Related Party Transactions

Investment Advisory Agreement: Under the Investment Advisory Agreement, the Investment Adviser manages the day-to-day operations of, and provides investment advisory services to, GBDC. The Board most recently reapproved the Investment Advisory Agreement in May 2017. The Investment Adviser is a registered investment adviser with the Securities and Exchange Commission (the “SEC”). The Investment Adviser receives fees for providing services, consisting of two components, a base management fee and an Incentive Fee (as defined below).

The base management fee is calculated at an annual rate equal to 1.375% of average adjusted gross assets at the end of the two most recently completed calendar quarters (including assets purchased with borrowed funds and securitization-related assets, leverage, unrealized depreciation or appreciation on derivative instruments and cash collateral on deposit with custodian but adjusted to exclude cash and cash equivalents so that investors do not pay the base management fee on such assets) and is payable quarterly in arrears. Additionally, the Investment Adviser is voluntarily excluding assets funded with secured borrowing proceeds from the base management fee. The base management fee is adjusted, based on the actual number of days elapsed relative to the total number of days in such calendar quarter, for any share issuances or repurchases during such calendar quarter. For purposes of the Investment Advisory Agreement, cash equivalents means U.S. government securities and commercial paper instruments maturing within 270 days of purchase (which is different than the GAAP definition, which defines cash equivalents as U.S. government securities and commercial paper

39

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

instruments maturing within 90 days of purchase). To the extent that the Investment Adviser or any of its affiliates provides investment advisory, collateral management or other similar services to a subsidiary of the Company, the base management fee will be reduced by an amount equal to the product of (1) the total fees paid to the Investment Adviser by such subsidiary for such services and (2) the percentage of such subsidiary’s total equity, including membership interests and any class of notes not exclusively held by one or more third parties, that is owned, directly or indirectly, by the Company.

The Company has structured the calculation of the Incentive Fee to include a fee limitation such that an Incentive Fee for any quarter can only be paid to the Investment Adviser if, after such payment, the cumulative Incentive Fees paid to the Investment Adviser since April 13, 2010, the effective date of the Company’s election to become a BDC, would be less than or equal to 20.0% of the Company’s Cumulative Pre-Incentive Fee Net Income (as defined below).

The Company accomplishes this limitation by subjecting each quarterly Incentive Fee payable under the Income and Capital Gain Incentive Fee Calculation (as defined below) to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in any quarter is equal to the difference between (a) 20.0% of Cumulative Pre-Incentive Fee Net Income and (b) cumulative Incentive Fees of any kind paid to the Investment Adviser by GBDC since April 13, 2010. To the extent the Incentive Fee Cap is zero or a negative value in any quarter, no Incentive Fee would be payable in that quarter. If, for any relevant period, the Incentive Fee Cap calculation results in the Company paying less than the amount of the Incentive Fee calculated above, then the difference between the Incentive Fee and the Incentive Fee Cap will not be paid by GBDC and will not be received by the Investment Adviser as an Incentive Fee either at the end of such relevant period or at the end of any future period. “Cumulative Pre-Incentive Fee Net Income” is equal to the sum of (a) Pre-Incentive Fee Net Investment Income (as defined below) for each period since April 13, 2010 and (b) cumulative aggregate realized capital gains, cumulative aggregate realized capital losses, cumulative aggregate unrealized capital depreciation and cumulative aggregate unrealized capital appreciation since April 13, 2010.

“Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies but excluding fees for providing managerial assistance) accrued during the calendar quarter, minus operating expenses for the calendar quarter (including the base management fee, taxes, any expenses payable under the Investment Advisory Agreement and the Administration Agreement, any expenses of securitizations and any interest expense and dividends paid on any outstanding preferred stock, but excluding the Incentive Fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature such as market discount, debt instruments with PIK interest, preferred stock with PIK dividends and zero coupon securities, accrued income that the Company has not yet received in cash.

Incentive Fees are calculated and payable quarterly in arrears (or, upon termination of the Investment Advisory Agreement, as of the termination date).

The income and capital gains incentive fee calculation (the “Income and Capital Gain Incentive Fee Calculation”) has two parts, the income component (the “Income Incentive Fee”) and the capital gains component (the “Capital Gain Incentive Fee” and, together with the Income Incentive Fee, the “Incentive Fee”). The Income Incentive Fee is calculated quarterly in arrears based on the Company’s Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter.

For the three and nine months ended June 30, 2017, the Income Incentive Fee incurred was $1,485 and $4,300, respectively. For the three and nine months ended June 30, 2016, the Income Incentive Fee incurred was $1,750 and $2,877, respectively.

Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Because of the structure of the Income Incentive Fee, it is possible that an Incentive Fee may be calculated under this formula with respect to a period in which the Company has incurred a loss. For example,

40

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

if the Company receives Pre-Incentive Fee Net Investment Income in excess of the hurdle rate (as defined below) for a calendar quarter, the Income Incentive Fee will result in a positive value and an Incentive Fee will be paid unless the payment of such Incentive Fee would cause the Company to pay Incentive Fees on a cumulative basis that exceed the Incentive Fee Cap. Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the value of the Company’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the end of the immediately preceding calendar quarter, is compared to a fixed “hurdle rate” of 2.0% quarterly. If market interest rates rise, the Company may be able to invest funds in debt instruments that provide for a higher return, which would increase Pre-Incentive Fee Net Investment Income and make it easier for the Investment Adviser to surpass the fixed hurdle rate and receive an Incentive Fee based on such net investment income.

The Company’s Pre-Incentive Fee Net Investment Income used to calculate this part of the Incentive Fee is also included in the amount of its total assets (excluding cash and cash equivalents but including assets purchased with borrowed funds and securitization-related assets, unrealized depreciation or appreciation on derivative instruments and cash collateral on deposit with custodian) used to calculate the 1.375% base management fee annual rate.

The Company calculates the Income Incentive Fee with respect to its Pre-Incentive Fee Net Investment Income quarterly, in arrears, as follows:

Zero in any calendar quarter in which the Pre-Incentive Fee Net Investment Income does not exceed the hurdle rate;
100% of the Company’s Pre-Incentive Fee Net Investment Income with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the hurdle rate but is less than 2.5% in any calendar quarter. This portion of the Company’s Pre-Incentive Fee Net Investment Income (which exceeds the hurdle rate but is less than 2.5%) is referred to as the “catch-up” provision. The catch-up is meant to provide the Investment
Adviser with 20.0% of the Pre-Incentive Fee Net Investment Income as if a hurdle rate did not apply if the Company’s Pre-Incentive Fee Net Investment Income exceeds 2.5% in any calendar quarter; and
20.0% of the amount of the Company’s Pre-Incentive Fee Net Investment Income, if any, that exceeds 2.5% in any calendar quarter.

The Capital Gain Incentive Fee equals (a) 20.0% of the Company’s Capital Gain Incentive Fee Base (as defined below), if any, calculated in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), which commenced with the calendar year ending December 31, 2010, less (b) the aggregate amount of any previously paid Capital Gain Incentive Fees. The Company’s “Capital Gain Incentive Fee Base” equals (1) the sum of (i) realized capital gains, if any, on a cumulative positive basis from the date the Company elected to become a BDC through the end of each calendar year, (ii) all realized capital losses on a cumulative basis and (iii) all unrealized capital depreciation on a cumulative basis less (2) all unamortized deferred financing costs, if and to the extent such costs exceed all unrealized capital appreciation on a cumulative basis.

The cumulative aggregate realized capital losses are calculated as the sum of the amounts by which (a) the net sales price of each investment in the Company’s portfolio when sold is less than (b) the accreted or amortized cost basis of such investment.
The cumulative aggregate realized capital gains are calculated as the sum of the differences, if positive, between (a) the net sales price of each investment in the Company’s portfolio when sold and (b) the accreted or amortized cost basis of such investment.
The aggregate unrealized capital depreciation is calculated as the sum of the differences, if negative, between (a) the valuation of each investment in the Company’s portfolio as of the applicable Capital Gain Incentive Fee calculation date and (b) the accreted or amortized cost basis of such investment.

The Capital Gain Incentive Fee payable as calculated under the Investment Advisory Agreement (as described above) for each of the three and nine months ended June 30, 2017 and 2016 was $0. However, in accordance with GAAP, the

41

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

Company is required to include the aggregate unrealized capital appreciation on investments in the calculation and accrue a capital gain incentive fee on a quarterly basis as if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Advisory Agreement. If the Capital Gain Incentive Fee Base, adjusted as required by GAAP to include unrealized appreciation, is positive at the end of a period, then GAAP requires the Company to accrue a capital gain incentive fee equal to 20% of such amount, less the aggregate amount of the actual Capital Gain Incentive Fees paid and capital gain incentive fees accrued under GAAP in all prior periods. If such amount is negative, then there is no accrual for such period. The resulting accrual under GAAP in a given period may result in additional expense if such cumulative amount is greater than in the prior period or a reversal of previously recorded expense if such cumulative amount is less than in the prior period. There can be no assurance that such unrealized capital appreciation will be realized in the future. From inception through June 30, 2017, the Company has not made any Capital Gain Incentive Fee payments. For the three and nine months ended June 30, 2017, the Company accrued a capital gain incentive fee under GAAP of $588 and $1,974, respectively, which accruals are included in incentive fee in the consolidated statements of operations. For the three and nine months ended June 30, 2016, the Company accrued a capital gain incentive fee under GAAP of $561 and$1,385, respectively.

As of June 30, 2017 and September 30, 2016, included in management and incentive fees payable on the consolidated statements of financial condition were $6,051 and $4,077, respectively, for accruals for capital gain incentive fees under GAAP.

The sum of the Income Incentive Fee and the Capital Gain Incentive Fee is the “Incentive Fee.”

Administration Agreement:  Under the Administration Agreement, the Administrator furnishes the Company with office facilities and equipment, provides the Company with clerical, bookkeeping and record keeping services at such facilities and provides the Company with other administrative services as the Administrator, subject to review by the Board, determines necessary to conduct the Company’s day-to-day operations. GBDC reimburses the Administrator the allocable portion of overhead and other expenses incurred by it in performing its obligations under the Administration Agreement, including rent, fees and expenses associated with performing compliance functions and GBDC’s allocable portion of the cost of its chief financial officer and chief compliance officer and their respective staffs. The Board reviews such expenses to determine that these expenses are reasonable and comparable to administrative services charged by unaffiliated third party asset managers. Under the Administration Agreement, the Administrator also provides, on the Company’s behalf, managerial assistance to those portfolio companies to which the Company is required to provide such assistance and will be paid an additional amount based on the cost of the services provided, which amount shall not exceed the amount the Company receives from such portfolio companies.

Included in accounts payable and accrued expenses is $595 and $566 as of June 30, 2017 and September 30, 2016, respectively, for accrued allocated shared services under the Administration Agreement.

Other related party transactions:  The Administrator pays for certain unaffiliated third-party expenses incurred by the Company. Such expenses include postage, printing, office supplies, rating agency fees and professional fees. These expenses are not marked-up and represent the same amount the Company would have paid had the Company paid the expenses directly. These expenses are subsequently reimbursed in cash.

Total expenses reimbursed to the Administrator during the three and nine months ended June 30, 2017 were $430 and $1,749, respectively. Total expenses reimbursed to the Administrator during the three and nine months ended June 30, 2016 were $715 and $2,094, respectively.

As of June 30, 2017 and September 30, 2016, included in accounts payable and accrued expenses were $506 and $582, respectively, for accrued expenses paid on behalf of the Company by the Administrator.


42

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

On June 22, 2016, the Company entered into an unsecured revolving credit facility with the Investment Adviser (the "Adviser Revolver"), with a maximum credit limit of $20,000 and expiration date of June 22, 2019. Refer to Note 7 for discussion of the Adviser Revolver.

During the three and nine months ended June 30, 2017, the Company sold $8,852 and $93,083, respectively, of investments and unfunded commitments to SLF at fair value and recognized $22 and $598, respectively, of net realized gains. During the three and nine months ended June 30, 2016, the Company sold $29,369 and $144,515, respectively, of investments and unfunded commitments to SLF at fair value and recognized $258 and $1,011, respectively, of net realized gains.

During the three and nine months ended June 30, 2017, SLF incurred an administrative service fee of $123 and $354, respectively, to reimburse the Administrator for expenses pursuant to an administrative and loan services agreement by and between SLF and the Administrator. During the three and nine months ended June 30, 2016, SLF incurred an administrative service fee of $127 and $327, respectively, to reimburse the Administrator for expenses pursuant to an administrative and loan services agreement by and between SLF and the Administrator.

Note 4.    Investments

Investments as of June 30, 2017 and September 30, 2016 consisted of the following:

 
As of June 30, 2017
 
As of September 30, 2016
  
Principal
 
Amortized
Cost
 
Fair
Value
 
Principal
 
Amortized
Cost
 
Fair
Value
Senior secured
$
194,591

 
$
192,650

 
$
192,123

 
$
164,818

 
$
162,969

 
$
162,849

One stop
1,443,469

 
1,424,607

 
1,429,917

 
1,321,494

 
1,303,056

 
1,304,467

Second lien
9,434

 
9,298

 
9,434

 
27,909

 
27,579

 
27,909

Subordinated debt
58

 
58

 
58

 
1,750

 
1,750

 
1,427

Subordinated notes in SLF(1)(2)

 

 

 
77,301

 
77,301

 
77,301

LLC equity interests in SLF(2)
N/A

 
113,120

 
108,879

 
N/A

 
31,339

 
26,927

Equity
N/A

 
41,494

 
61,397

 
N/A

 
46,179

 
59,732

Total
$
1,647,552

 
$
1,781,227

 
$
1,801,808

 
$
1,593,272

 
$
1,650,173

 
$
1,660,612

 
(1) 
On December 30, 2016, SLF issued a capital call in an aggregate amount of $89,930 the proceeds of which were used to redeem in full the outstanding balance on the subordinated notes previously issued by SLF and terminate all remaining subordinated note commitments.
(2) 
SLF’s proceeds from the subordinated notes and LLC equity interests invested in SLF were utilized by SLF to invest in senior secured loans.

43

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

The following tables show the portfolio composition by geographic region at amortized cost and fair value as a percentage of total investments in portfolio companies. The geographic composition is determined by the location of the corporate headquarters of the portfolio company, which may not be indicative of the primary source of the portfolio company’s business.
 
As of June 30, 2017
 
As of September 30, 2016
Amortized Cost:
  

 
  

 
  

 
  

United States
  

 
  

 
  

 
  

Mid-Atlantic
$
393,352

 
22.1
%
 
$
411,509

 
24.9
%
Midwest
417,867

 
23.5

 
353,117

 
21.4

West
306,608

 
17.2

 
289,208

 
17.5

Southeast
364,780

 
20.5

 
364,203

 
22.1

Southwest
168,543

 
9.5

 
117,168

 
7.1

Northeast
115,129

 
6.4

 
100,056

 
6.1

Canada
14,948

 
0.8

 
14,912

 
0.9

Total
$
1,781,227

 
100.0
%
 
$
1,650,173

 
100.0
%
 
 
 
 
 
 
 
 
Fair Value:
  

 
  

 
  

 
  

United States
  

 
  

 
  

 
  

Mid-Atlantic
$
389,722

 
21.6
%
 
$
403,536

 
24.3
%
Midwest
422,507

 
23.5

 
357,059

 
21.5

West
312,261

 
17.3

 
288,047

 
17.3

Southeast
368,733

 
20.5

 
368,450

 
22.2

Southwest
168,284

 
9.3

 
119,641

 
7.2

Northeast
125,088

 
6.9

 
108,866

 
6.6

Canada
15,213

 
0.9

 
15,013

 
0.9

Total
$
1,801,808

 
100.0
%
 
$
1,660,612

 
100.0
%

44

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

The industry compositions of the portfolio at amortized cost and fair value as of June 30, 2017 and September 30, 2016 were as follows:
 
As of June 30, 2017
 
As of September 30, 2016
 
Amortized Cost:
  

 
  

 
  

 
  

 
Aerospace and Defense
$
59,317

 
3.3

%
$
64,220

 
3.9

%
Automobile
16,446

 
0.9

 
25,293

 
1.5

 
Banking
17,106

 
1.0

 
17,447

 
1.1

 
Beverage, Food and Tobacco
138,794

 
7.8

 
141,879

 
8.6

 
Broadcasting and Entertainment
1,461

 
0.1

 
1,471

 
0.1

 
Buildings and Real Estate
53,120

 
3.0

 
24,386

 
1.5

 
Chemicals, Plastics and Rubber
2,410

 
0.1

 
73

 
0.0

*
Containers, Packaging and Glass

 

 
3,477

 
0.2

 
Diversified/Conglomerate Manufacturing
93,873

 
5.3

 
84,255

 
5.1

 
Diversified/Conglomerate Service
280,847

 
15.8

 
270,691

 
16.4

 
Ecological
18,071

 
1.0

 
15,343

 
0.9

 
Electronics
128,789

 
7.2

 
144,560

 
8.8

 
Grocery
20,764

 
1.2

 
17,051

 
1.0

 
Healthcare, Education and Childcare
377,281

 
21.2

 
322,793

 
19.6

 
Home and Office Furnishings, Housewares and Durable Consumer
17,861

 
1.0

 
17,796

 
1.1

 
Hotels, Motels, Inns, and Gaming
9,904

 
0.6

 
804

 
0.0

*
Insurance
34,587

 
1.9

 
32,652

 
2.0

 
Investment Funds and Vehicles
113,120

 
6.3

 
108,640

 
6.6

 
Leisure, Amusement, Motion Pictures, Entertainment
76,675

 
4.3

 
56,004

 
3.4

 
Mining, Steel, Iron and Non-Precious Metals
4,844

 
0.3

 
4,562

 
0.3

 
Oil and Gas
2,156

 
0.1

 
2,287

 
0.1

 
Personal and Non Durable Consumer Products (Mfg. Only)
69,387

 
3.9

 
37,531

 
2.3

 
Personal, Food and Miscellaneous Services
73,280

 
4.1

 
64,790

 
3.9

 
Printing and Publishing
10,554

 
0.6

 
46,049

 
2.8

 
Retail Stores
134,002

 
7.5

 
130,991

 
7.9

 
Telecommunications
8,525

 
0.5

 
2,170

 
0.1

 
Textiles and Leather
2,213

 
0.1

 
2,015

 
0.1

 
Utilities
15,840

 
0.9

 
10,943

 
0.7

 
Total
$
1,781,227

 
100.0

%
$
1,650,173

 
100.0

%

*Represents an amount less than 0.1%

45

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

 
As of June 30, 2017
 
As of September 30, 2016
 
Fair Value:
  

 
  

 
  

 
  

 
Aerospace and Defense
$
56,252

 
3.1

%
$
59,120

 
3.6

%
Automobile
16,584

 
0.9

 
25,911

 
1.6

 
Banking
17,151

 
1.0

 
17,529

 
1.1

 
Beverage, Food and Tobacco
143,807

 
8.0

 
145,658

 
8.8

 
Broadcasting and Entertainment
1,475

 
0.1

 
1,483

 
0.1

 
Buildings and Real Estate
54,082

 
3.0

 
24,852

 
1.5

 
Chemicals, Plastics and Rubber
2,467

 
0.1

 
75

 
0.0

*
Containers, Packaging and Glass

 

 
3,489

 
0.2

 
Diversified/Conglomerate Manufacturing
94,465

 
5.2

 
84,306

 
5.1

 
Diversified/Conglomerate Service
284,630

 
15.8

 
274,198

 
16.5

 
Ecological
18,356

 
1.0

 
15,618

 
0.9

 
Electronics
131,452

 
7.3

 
146,319

 
8.8

 
Grocery
21,524

 
1.2

 
17,862

 
1.1

 
Healthcare, Education and Childcare
381,196

 
21.2

 
327,287

 
19.7

 
Home and Office Furnishings, Housewares, and Durable Consumer
17,229

 
1.0

 
16,498

 
1.0

 
Hotels, Motels, Inns, and Gaming
9,903

 
0.6

 
815

 
0.0

*
Insurance
35,313

 
2.0

 
33,303

 
2.0

 
Investment Funds and Vehicles
108,879

 
6.0

 
104,228

 
6.3

 
Leisure, Amusement, Motion Pictures, Entertainment
76,231

 
4.2

 
51,397

 
3.1

 
Mining, Steel, Iron and Non-Precious Metals
3,731

 
0.2

 
3,914

 
0.2

 
Oil and Gas
2,182

 
0.1

 
2,305

 
0.1

 
Personal and Non Durable Consumer Products (Mfg. Only)
70,866

 
3.9

 
37,895

 
2.3

 
Personal, Food and Miscellaneous Services
72,202

 
4.0

 
66,198

 
4.0

 
Printing and Publishing
10,807

 
0.6

 
46,814

 
2.8

 
Retail Stores
143,865

 
8.0

 
137,940

 
8.3

 
Telecommunications
8,627

 
0.5

 
2,111

 
0.1

 
Textiles and Leather
2,254

 
0.1

 
2,061

 
0.1

 
Utilities
16,278

 
0.9

 
11,426

 
0.7

 
Total
$
1,801,808

 
100.0

%
$
1,660,612

 
100.0

%
*Represents an amount less than 0.1%

Senior Loan Fund LLC:

The Company co-invests with RGA Reinsurance Company (“RGA”) in senior secured loans through SLF, an unconsolidated Delaware LLC. SLF is capitalized as transactions are completed and all portfolio and investment decisions in respect of SLF must be approved by the SLF investment committee consisting of two representatives of each of the Company and RGA (with unanimous approval required from (i) one representative of each of the Company and RGA or (ii) both representatives of each of the Company and RGA). SLF may cease making new investments upon notification of either member but operations will continue until all investments have been sold or paid-off in the normal course of business. Investments held by SLF are measured at fair value using the same valuation methodologies as described in Note 6.

As of June 30, 2017, SLF was capitalized from LLC equity interest subscriptions from its members. On December 14, 2016, the SLF investment committee approved the recapitalization of the commitments of SLF’s members. On December 30, 2016, SLF’s members entered into additional LLC equity interest subscriptions totaling $160,000, SLF issued capital calls totaling $89,930 to the Company and RGA and the subordinated notes previously issued by SLF were redeemed and terminated. As of June 30, 2017 and September 30, 2016, the Company and RGA owned 87.5% and 12.5%, respectively of the LLC equity interests of SLF. SLF’s profits and losses are allocated to the Company and RGA in accordance with their respective ownership interests. As of September 30, 2016, the Company and RGA owned 87.5% and 12.5%, respectively, of the outstanding subordinated notes issued by SLF.


46

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

Additionally, SLF has entered into a senior secured revolving credit facility (as amended, the “SLF Credit Facility”) with Wells Fargo Bank, N.A., through its wholly-owned subsidiary Senior Loan Fund II LLC (“SLF II”), which as of June 30, 2017 allowed SLF II to borrow up to $300,000 at any one time outstanding, subject to leverage and borrowing base restrictions.

As of June 30, 2017 and September 30, 2016, SLF had the following commitments from its members:

 
As of June 30, 2017
 
As of September 30, 2016
  
Committed
 
Funded(1)
 
Committed
 
Funded(1)(2)
Subordinated note commitments (3)
$

 
$

 
$
160,000

 
$
88,344

LLC equity commitments (3)
200,000

 
129,280

 
40,000

 
35,816

Total
$
200,000

 
$
129,280

 
$
200,000

 
$
124,160


 
(1) 
Funded LLC equity commitments are presented net of return of capital distributions subject to recall.
(2) 
Funded subordinated note commitments as of September 30, 2016 are presented net of repayments subject to recall. The subordinated note commitments were terminated as of December 30, 2016.
(3) 
Commitments presented are combined for the Company and RGA.

As of June 30, 2017 and September 30, 2016, SLF had total assets at fair value of $331,212 and $332,786, respectively. As of June 30, 2017, SLF had two portfolio company investments on non-accrual status and the total fair value of non-accrual loans was $4,900. As of September 30, 2016, SLF had one portfolio company investment on non-accrual status and the total fair value of non-accrual loans was $6,686. The portfolio companies in SLF are in industries and geographies similar to those in which the Company may invest directly. Additionally, as of June 30, 2017 and September 30, 2016, SLF had commitments to fund various undrawn revolvers and delayed draw investments to its portfolio companies totaling $17,958 and $24,104, respectively.

Below is a summary of SLF’s portfolio, followed by a listing of the individual investments in SLF’s portfolio as of June 30, 2017 and September 30, 2016:

 
As of
 
As of
 
June 30,
 
September 30,
  
2017
 
2016
Senior secured loans (1)
$
331,346

 
$
331,473

Weighted average current interest rate on senior secured loans (2)
6.5
%
 
6.0
%
Number of borrowers in SLF
52

 
62

Largest portfolio company investments (1)
$
16,160

 
$
13,050

Total of five largest portfolio company investments (1)
$
66,281

 
$
61,118

 
(1) 
At principal amount.
(2) 
Computed as the (a) annual stated interest rate on accruing senior secured loans divided by (b) total senior secured loans at principal amount.

47

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

SLF Investment Portfolio as of June 30, 2017
Portfolio Company
 
Business Description
 
Security Type
 
Maturity
Date
 
Current
Interest
Rate(1)
 
Principal ($) /
Shares(2)
 
Fair
Value(3)
1A Smart Start LLC
 
Home and Office Furnishings, Housewares, and Durable Consumer
 
Senior loan
 
02/2022
 
6.0

 
$
2,100

 
$
2,102

Accellos, Inc.(4)
 
Diversified/Conglomerate Service
 
Senior loan
 
07/2020
 
7.0

 
 
16,160

 
16,160

Advanced Pain Management Holdings, Inc.,
 
Healthcare, Education and Childcare
 
Senior loan
 
02/2018
 
6.3

 
 
6,805

 
6,124

Advanced Pain Management Holdings, Inc.,
 
Healthcare, Education and Childcare
 
Senior loan
 
02/2018
 
6.3

 
 
466

 
419

American Seafoods Group LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
08/2021
 
6.3

 
 
4,605

 
4,605

Argon Medical Devices, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2021
 
6.0

 
 
3,334

 
3,334

Arise Virtual Solutions, Inc. (4)
 
Telecommunications
 
Senior loan
 
12/2018
 
7.8

 
 
9,927

 
9,927

Atkins Nutritionals, Inc.(4)
 
Beverage, Food and Tobacco
 
Senior loan
 
01/2019
 
6.3

 
 
4,452

 
4,452

Boot Barn, Inc.
 
Retail Stores
 
Senior loan
 
06/2021
 
5.8

 
 
10,073

 
10,073

Brandmuscle, Inc.
 
Printing and Publishing
 
Senior loan
 
12/2021
 
6.0

 
 
4,851

 
4,846

Certara L.P.(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2018
 
6.8

 
 
8,243

 
8,243

CLP Healthcare Services, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
6.3

 
 
8,611

 
8,439

CLP Healthcare Services, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
6.3

 
 
4,340

 
4,253

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
6.8

  
 
2,448

 
2,448

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
6.8

  
 
1,231

 
1,231

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
6.8

  
 
59

 
59

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
6.8

  
 
36

 
36

Curo Health Services LLC(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
02/2022
 
5.9

  
 
5,865

 
5,943

DentMall MSO, LLC(5)
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
07/2019
 
6.2

  
 
10,147

 
3,349

DentMall MSO, LLC(5)
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
07/2019
 
6.5

  
 
1,178

 
509

DISA Holdings Acquisition Subsidiary Corp.
 
Diversified/Conglomerate Service
 
Senior loan
 
12/2020
 
5.4

  
 
4,401

 
4,401

DISA Holdings Acquisition Subsidiary Corp.
 
Diversified/Conglomerate Service
 
Senior loan
 
12/2020
 
6.5

  
 
80

 
80

EAG, INC.
 
Diversified/Conglomerate Service
 
Senior loan
 
07/2018
 
5.5

  
 
1,996

 
1,996

Encore GC Acquisition, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2020
 
6.8

  
 
4,737

 
4,737

Encore GC Acquisition, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2020
 
8.5

 
 
161

 
161

First Watch Restaurants, Inc.(4)
 
Beverage, Food and Tobacco
 
Senior loan
 
12/2020
 
7.4

 
 
10,259

 
10,259

First Watch Restaurants, Inc.(4)
 
Beverage, Food and Tobacco
 
Senior loan
 
12/2020
 
9.3

  
 
489

 
489

Flexan, LLC
 
Chemicals, Plastics and Rubber
 
Senior loan
 
02/2020
 
7.0

  
 
6,044

 
6,044

Flexan, LLC
 
Chemicals, Plastics and Rubber
 
Senior loan
 
02/2020
 
7.0

  
 
1,686

 
1,686

Gamma Technologies, LLC(4)
 
Electronics
 
Senior loan
 
06/2021
 
6.2

  
 
10,290

 
10,290

Harvey Tool Company, LLC
 
Diversified/Conglomerate Manufacturing
 
Senior loan
 
03/2020
 
6.1

  
 
3,071

 
3,071

III US Holdings, LLC
 
Diversified/Conglomerate Service
 
Senior loan
 
09/2022
 
7.4

  
 
5,194

 
5,194

Jensen Hughes, Inc.
 
Buildings and Real Estate
 
Senior loan
 
12/2021
 
6.4

  
 
2,336

 
2,336

Jensen Hughes, Inc.
 
Buildings and Real Estate
 
Senior loan
 
12/2021
 
6.2

  
 
103

 
103

Jensen Hughes, Inc.
 
Buildings and Real Estate
 
Senior loan
 
12/2021
 
6.2

 
 
65

 
65

Joerns Healthcare, LLC(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
05/2020
 
7.9

 
 
8,757

 
8,159

Julio & Sons Company
 
Beverage, Food and Tobacco
 
Senior loan
 
12/2018
 
6.7

 
 
6,780

 
6,780

Julio & Sons Company
 
Beverage, Food and Tobacco
 
Senior loan
 
12/2018
 
6.7

 
 
2,232

 
2,232

Loar Group Inc.
 
Aerospace and Defense
 
Senior loan
 
01/2022
 
6.0

 
 
2,164

 
2,164

Paradigm DKD Group, LLC
 
Buildings and Real Estate
 
Senior loan
 
11/2018
 
6.1

 
 
1,982

 
1,982

Paradigm DKD Group, LLC
 
Buildings and Real Estate
 
Senior loan
 
11/2018
 
7.3

 
 
524

 
524

Pasternack Enterprises, Inc. and Fairview Microwave, Inc.
 
Diversified/Conglomerate Manufacturing
 
Senior loan
 
05/2022
 
6.2

 
 
5,385

 
5,385

Payless ShoeSource, Inc.(5)
 
Retail Stores
 
Senior loan
 
03/2021
 
7.2

 
 
1,945

 
1,042


48

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

SLF Investment Portfolio as of June 30, 2017 – (continued)
Portfolio Company
 
Business Description
 
Security Type
 
Maturity
Date
 
Current
Interest
Rate(1)
 
Principal ($) /
Shares
(2)
 
Fair
Value(3)
Polk Acquisition Corp.
 
Automobile
 
Senior loan
 
06/2022
 
6.2

 
$
4,699

 
$
4,699

Polk Acquisition Corp.
 
Automobile
 
Senior loan
 
06/2022
 
6.2

 
 
54

 
54

Polk Acquisition Corp.
 
Automobile
 
Senior loan
 
06/2022
 
6.6

 
 
43

 
43

PowerPlan Holdings, Inc.(4)
 
Utilities
 
Senior loan
 
02/2022
 
6.0

 
 
11,365

 
11,365

Premise Health Holding Corp.(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
06/2020
 
5.8

 
 
11,801

 
11,801

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2019
 
7.7

 
 
9,763

 
9,763

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2019
 
7.7

 
 
328

 
328

R.G. Barry Corporation
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
09/2019
 
6.2

 
 
5,252

 
5,252

Radiology Partners, Inc.(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
7.0

 
 
7,813

 
7,813

Radiology Partners, Inc.(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
7.0

 
 
597

 
597

Radiology Partners, Inc.(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
7.0

 
 
507

 
507

Reliant Pro ReHab, LLC(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2017
 
6.3

  
 
3,265

 
3,265

RSC Acquisition, Inc.(4)
 
Insurance
 
Senior loan
 
11/2022
 
6.5

  
 
3,874

 
3,855

RSC Acquisition, Inc.
 
Insurance
 
Senior loan
 
11/2020
 
6.0

  
 
15

 
15

Rubio's Restaurants, Inc.(4)
 
Beverage, Food and Tobacco
 
Senior loan
 
11/2018
 
6.0

  
 
5,005

 
5,005

Rug Doctor LLC
 
Personal and Non Durable Consumer Products (Mfg. Only)
 
Senior loan
 
06/2018
 
6.5

  
 
5,926

 
5,926

Sage Dental Management, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
10/2019
 
6.9

  
 
4,794

 
4,794

Sage Dental Management, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
10/2019
 
6.9

  
 
50

 
50

Sage Dental Management, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
10/2019
 
7.0

  
 
40

 
40

Sage Dental Management, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
10/2019
 
8.8

  
 
23

 
23

Saldon Holdings, Inc.
 
Diversified/Conglomerate Service
 
Senior loan
 
09/2021
 
5.7

  
 
2,560

 
2,560

Sarnova HC, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2022
 
6.0

 
 
3,694

 
3,694

SEI, Inc.
 
Electronics
 
Senior loan
 
07/2021
 
6.0

  
 
13,855

 
13,717

SEI, Inc.(6)
 
Electronics
 
Senior loan
 
07/2021
 
N/A

(7) 
 

 
(1
)
Self Esteem Brands, LLC(4)
 
Leisure, Amusement, Motion Pictures, Entertainment
 
Senior loan
 
02/2020
 
6.0

  
 
11,514

 
11,514

Severin Acquisition, LLC
 
Diversified/Conglomerate Service
 
Senior loan
 
07/2021
 
6.1

  
 
5,304

 
5,278

Severin Acquisition, LLC(4)
 
Diversified/Conglomerate Service
 
Senior loan
 
07/2021
 
6.2

  
 
4,845

 
4,842

Severin Acquisition, LLC
 
Diversified/Conglomerate Service
 
Senior loan
 
07/2021
 
6.3

  
 
670

 
672

Severin Acquisition, LLC (6)
 
Diversified/Conglomerate Service
 
Senior loan
 
07/2021
 
N/A

(7) 
 

 
(1
)
Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

  
 
905

 
860

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

  
 
71

 
67

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

  
 
71

 
68

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

 
 
71

 
68

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

 
 
71

 
68

Smashburger Finance LLC (6)
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
N/A

(7) 
 

 
(6
)
Tate's Bake Shop, Inc. (4)
 
Beverage, Food and Tobacco
 
Senior loan
 
08/2019
 
6.3

 
 
2,933

 
2,933

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior loan
 
10/2020
 
5.5

 
 
4,581

 
4,558

Transaction Data Systems, Inc.
 
Diversified/Conglomerate Service
 
Senior loan
 
06/2021
 
6.6

 
 
7,412

 
7,412

Transaction Data Systems, Inc.
 
Diversified/Conglomerate Service
 
Senior loan
 
06/2020
 
5.7

 
 
22

 
21

W3 Co.
 
Oil and Gas
 
Senior loan
 
03/2022
 
7.2

 
 
1,269

 
1,269


49

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

SLF Investment Portfolio as of June 30, 2017 – (continued)
Portfolio Company
 
Business Description
 
Security Type
 
Maturity
Date
 
Current
Interest
Rate(1)
 
Principal ($) /
Shares
(2)
 
Fair
Value(3)
Young Innovations, Inc.(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2019
 
6.3

 
$
10,395

 
$
10,395

Young Innovations, Inc.(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2019
 
6.3

 
 
277

 
277

Total senior loan investments
 
 
 
 
 
 
 
 
 
 
$
331,346

 
$
321,192

 
 
 
 
 
 
 
 
 
 
 
 
 
 
W3 Co.(8)(9)
 
Oil and Gas
 
LLC units
 
N/A
 
N/A

 
 
3

 
$
1,069

Total equity investments
 
 
 
 
 
 
 
 
 
 


 
$
1,069

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total investments
 
 
 
 
 
 
 
 
 
 
$
331,346

 
$
322,261


 
(1) 
Represents the weighted average annual current interest rate as of June 30, 2017.
(2) 
The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.
(3) 
Represents the fair value in accordance with ASC Topic 820. The determination of such fair value is not included in the Board's valuation process described elsewhere herein.
(4) 
The Company also holds a portion of the first lien senior secured loan in this portfolio company.
(5) 
Loan was on non-accrual status as of June 30, 2017, meaning that SLF has ceased recognizing interest income on the loan.
(6) 
The negative fair value is the result of the unfunded commitment being valued below par.
(7) 
The entire commitment was unfunded as of June 30, 2017. As such, no interest is being earned on this investment. The investment may be subject to an unused facility fee.
(8) 
Equity investment received as a result of the portfolio company's debt restructuring.
(9) 
Non-income producing.


50

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

SLF Investment Portfolio as of September 30, 2016
Portfolio Company
 
Business Description
 
Security Type
 
Maturity
Date
 
Current
Interest
Rate(1)
 
Principal ($)
 
Fair
Value(2)
1A Smart Start LLC(3)
 
Home and Office Furnishings, Housewares, and Durable Consumer
 
Senior loan
 
02/2022
 
5.8

 
$
2,116

 
$
2,111

ACTIVE Network, Inc.
 
Electronics
 
Senior loan
 
11/2020
 
5.5

 
 
1,945

 
1,938

Advanced Pain Management Holdings, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
02/2018
 
6.3

 
 
6,805

 
6,601

Advanced Pain Management Holdings, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
02/2018
 
6.3

 
 
466

 
452

Advanced Pain Management Holdings, Inc.(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
02/2018
 
N/A

(5) 
 

 
(35
)
Aimbridge Hospitality, LLC (3)
 
Hotels, Motels, Inns, and Gaming
 
Senior loan
 
10/2018
 
5.8

 
 
5,037

 
5,037

American Seafoods Group LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
08/2021
 
6.0

 
 
4,818

 
4,806

Argon Medical Devices, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2021
 
5.8

 
 
3,895

 
3,895

Arise Virtual Solutions, Inc.(3)
 
Telecommunications
 
Senior loan
 
12/2018
 
7.8

  
 
10,804

 
10,264

Arise Virtual Solutions, Inc.(3)(4)
 
Telecommunications
 
Senior loan
 
12/2018
 
N/A

(5) 
 

 
(28
)
Atkins Nutritionals, Inc.(3)
 
Beverage, Food and Tobacco
 
Senior loan
 
01/2019
 
6.3

  
 
5,664

 
5,664

BMC Software, Inc.
 
Electronics
 
Senior loan
 
09/2020
 
5.0

 
 
1,876

 
1,813

Boot Barn, Inc.
 
Retail Stores
 
Senior loan
 
06/2021
 
5.5

  
 
10,667

 
10,667

Brandmuscle, Inc.
 
Printing and Publishing
 
Senior loan
 
12/2021
 
5.8

 
 
4,948

 
4,938

C.B. Fleet Company, Incorporated
 
Personal and Non-Durable Consumer Products
 
Senior loan
 
12/2021
 
5.8

 
 
7,613

 
7,613

Checkers Drive-In Restaurants, Inc.
 
Beverage, Food and Tobacco
 
Senior loan
 
01/2022
 
6.5

 
 
4,460

 
4,427

CLP Healthcare Services, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
6.3

 
 
8,677

 
8,677

CLP Healthcare Services, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
6.3

 
 
4,373

 
4,373

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
6.5

 
 
2,466

 
2,454

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
6.5

 
 
1,240

 
1,234

CPI Buyer, LLC (Cole-Parmer)(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2021
 
5.5

 
 
5,805

 
5,776

Curo Health Services LLC(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
02/2022
 
6.5

 
 
5,910

 
5,928

DentMall MSO, LLC(6)
 
Retail Stores
 
Senior loan
 
07/2019
 
6.0

 
 
10,147

 
6,088

DentMall MSO, LLC(6)
 
Retail Stores
 
Senior loan
 
07/2019
 
6.0

 
 
1,000

 
598

DISA Holdings Acquisition Subsidiary Corp.
 
Diversified Conglomerate Service
 
Senior loan
 
12/2020
 
5.5

 
 
4,568

 
4,431

DISA Holdings Acquisition Subsidiary Corp.
 
Diversified Conglomerate Service
 
Senior loan
 
12/2020
 
5.5

 
 
255

 
224

EAG, INC. (Evans Analytical Group)
 
Diversified Conglomerate Service
 
Senior loan
 
07/2017
 
5.0

 
 
2,113

 
2,113

Encore GC Acquisition, LLC(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2020
 
6.3

 
 
4,773

 
4,773

Encore GC Acquisition, LLC(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2020
 
7.8

 
 
164

 
164

Express Oil Change, LLC(3)
 
Retail Stores
 
Senior loan
 
12/2017
 
6.0

 
 
4,841

 
4,841

Extreme Reach Inc.
 
Broadcasting and Entertainment
 
Senior loan
 
02/2020
 
7.3

 
 
1,976

 
1,998

Federal-Mogul Corporation
 
Automobile
 
Senior loan
 
04/2021
 
4.8

 
 
3,920

 
3,799

Flexan, LLC
 
Chemicals, Plastics and Rubber
 
Senior loan
 
02/2020
 
6.3

 
 
6,090

 
6,090

Harvey Tool Company, LLC(3)
 
Diversified Conglomerate Manufacturing
 
Senior loan
 
03/2020
 
6.0

 
 
3,108

 
3,108

Jensen Hughes, Inc.
 
Diversified Conglomerate Service
 
Senior loan
 
12/2021
 
6.3

 
 
2,342

 
2,342

Jensen Hughes, Inc.
 
Diversified Conglomerate Service
 
Senior loan
 
12/2021
 
6.0

 
 
104

 
104

Jensen Hughes, Inc.
 
Diversified Conglomerate Service
 
Senior loan
 
12/2021
 
6.2

 
 
65

 
65

Joerns Healthcare, LLC(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
05/2020
 
6.0

 
 
9,598

 
9,118

Julio & Sons Company
 
Beverage, Food and Tobacco
 
Senior loan
 
12/2018
 
6.5

 
 
6,834

 
6,834

Julio & Sons Company
 
Beverage, Food and Tobacco
 
Senior loan
 
12/2018
 
6.5

  
 
1,061

 
1,061

Julio & Sons Company
 
Beverage, Food and Tobacco
 
Senior loan
 
12/2018
 
6.5

  
 
596

 
596


51

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

SLF Investment Portfolio as of September 30, 2016 – (continued)
Portfolio Company
 
Business Description
 
Security Type
 
Maturity
Date
 
Current
Interest
Rate(1)
 
Principal ($)
 
Fair
Value(2)
K&N Engineering, Inc.(3)
 
Automobile
 
Senior loan
 
07/2019
 
6.8

 
$
3,781

 
$
3,781

K&N Engineering, Inc.(3)
 
Automobile
 
Senior loan
 
07/2019
 
5.3

  
 
179

 
179

Loar Group Inc.
 
Aerospace and Defense
 
Senior loan
 
01/2022
 
5.8

  
 
2,233

 
2,233

Mediaocean LLC(3)
 
Diversified Conglomerate Service
 
Senior loan
 
08/2022
 
5.8

  
 
3,137

 
3,137

Northwestern Management Services, LLC(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
10/2019
 
6.5

  
 
4,288

 
4,224

Northwestern Management Services, LLC(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
10/2019
 
6.5

  
 
470

 
463

Northwestern Management Services, LLC(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
10/2019
 
7.5

  
 
1

 
1

Paradigm DKD Group, LLC
 
Buildings and Real Estate
 
Senior loan
 
11/2018
 
6.5

  
 
1,998

 
1,958

Paradigm DKD Group, LLC
 
Buildings and Real Estate
 
Senior loan
 
11/2018
 
6.7

  
 
180

 
166

Pasternack Enterprises, Inc. and Fairview Microwave, Inc(3)
 
Diversified Conglomerate Manufacturing
 
Senior loan
 
05/2022
 
6.0

  
 
1,640

 
1,623

Payless ShoeSource, Inc.
 
Retail Stores
 
Senior loan
 
03/2021
 
5.0

  
 
1,955

 
1,163

Pentec Acquisition Sub, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
05/2018
 
6.3

  
 
1,419

 
1,419

PetVet Care Centers LLC(3)
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
12/2020
 
5.8

  
 
5,895

 
5,895

PetVet Care Centers LLC(3)
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
12/2020
 
5.8

  
 
1,219

 
1,219

PowerPlan Holdings, Inc.(3)
 
Utilities
 
Senior loan
 
02/2022
 
5.8

  
 
11,994

 
11,994

PPT Management, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
04/2020
 
6.0

  
 
13,026

 
13,026

PPT Management, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
04/2020
 
6.0

  
 
10

 
10

Premise Health Holding Corp.(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
06/2020
 
5.5

  
 
11,891

 
11,891

Pyramid Healthcare, Inc.(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2019
 
6.8

  
 
8,354

 
8,354

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2019
 
7.8

  
 
373

 
373

R.G. Barry Corporation
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
09/2019
 
6.0

  
 
5,880

 
5,821

Radiology Partners, Inc.(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
6.5

  
 
7,072

 
7,001

Radiology Partners, Inc.(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
6.5

  
 
801

 
792

Radiology Partners, Inc.(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
6.5

  
 
510

 
505

Radiology Partners, Inc.(3)(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
N/A

(5) 
 

 
(6
)
Radiology Partners, Inc.(3)(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
N/A

(5) 
 

 
(3
)
Reliant Pro ReHab, LLC(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2017
 
6.0

  
 
3,337

 
3,337

RSC Acquisition, Inc.(3)
 
Insurance
 
Senior loan
 
11/2022
 
6.3

  
 
3,732

 
3,732

RSC Acquisition, Inc.(3)
 
Insurance
 
Senior loan
 
11/2022
 
6.3

  
 
172

 
172

RSC Acquisition, Inc.
 
Insurance
 
Senior loan
 
11/2020
 
6.8

  
 
33

 
33

Rubio's Restaurants, Inc.(3)
 
Beverage, Food and Tobacco
 
Senior loan
 
11/2018
 
6.0

  
 
5,044

 
5,044

Rug Doctor LLC
 
Personal and Non-Durable Consumer Products
 
Senior loan
 
06/2018
 
6.3

  
 
7,780

 
7,780

Saldon Holdings, Inc.
 
Diversified Conglomerate Service
 
Senior loan
 
09/2021
 
5.5

  
 
2,718

 
2,718

Sarnova HC, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2022
 
5.8

  
 
3,722

 
3,722

SEI, Inc.
 
Electronics
 
Senior loan
 
07/2021
 
5.8

 
 
8,711

 
8,711

Self Esteem Brands, LLC(3)
 
Leisure, Amusement, Motion Pictures and Entertainment
 
Senior loan
 
02/2020
 
5.0

 
 
6,342

 
6,342

Severin Acquisition, LLC(3)
 
Diversified Conglomerate Service
 
Senior loan
 
07/2021
 
5.9

 
 
4,882

 
4,858

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

 
 
951

 
932

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

 
 
75

 
74

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

 
 
75

 
73

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

 
 
75

 
73

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

 
 
75

 
73

Smashburger Finance LLC(4)
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
N/A

(5) 
 

 
(2
)

52

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

SLF Investment Portfolio as of September 30, 2016 – (continued)
Portfolio Company
 
Business Description
 
Security Type
 
Maturity
Date
 
Current
Interest
Rate(1)
 
Principal ($)
 
Fair
Value(2)
Systems Maintenance Services Holding, Inc.(3)
 
Electronics
 
Senior loan
 
10/2019
 
5.0

%
 
$
2,396

 
$
2,396

Tate's Bake Shop, Inc.(3)
 
Beverage, Food and Tobacco
 
Senior loan
 
08/2019
 
6.0

 
 
2,955

 
2,955

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior loan
 
10/2020
 
5.3

 
 
4,582

 
4,566

Transaction Data Systems, Inc.(3)
 
Diversified Conglomerate Service
 
Senior loan
 
06/2021
 
6.3

 
 
5,260

 
5,260

Transaction Data Systems, Inc.
 
Diversified Conglomerate Service
 
Senior loan
 
06/2020
 
5.5

 
 
9

 
8

W3 Co.
 
Oil and Gas
 
Senior loan
 
03/2020
 
5.8

 
 
2,924

 
2,295

Worldwide Express Operations, LLC
 
Cargo Transport
 
Senior loan
 
07/2019
 
6.0

 
 
4,869

 
4,869

Worldwide Express Operations, LLC
 
Cargo Transport
 
Senior loan
 
07/2019
 
6.0

 
 
100

 
100

Young Innovations, Inc.(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2019
 
5.3

 
 
3,804

 
3,818

Young Innovations, Inc.(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2018
 
6.8

 
 
122

 
118

Zest Holdings, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2020
 
5.8

 
 
5,282

 
5,282

  
 
 
 
 
 
 
 
 
 
 
$
331,473

 
$
323,510

 
(1) 
Represents the weighted average annual current interest rate as of September 30, 2016. All interest rates are payable in cash.
(2) 
Represents the fair value in accordance with ASC Topic 820. The determination of such fair value is not included in the Board's valuation process described elsewhere herein.
(3) 
The Company also holds a portion of the first lien senior secured loan in this portfolio company.
(4) 
The negative fair value is the result of the unfunded commitment being valued below par.
(5) 
The entire commitment was unfunded at September 30, 2016. As such, no interest is being earned on this investment.
(6) 
Loan was on non-accrual status as of September 30, 2016, meaning that SLF has ceased recognizing interest income on the loan.

As of June 30, 2017, the Company has committed to fund $175,000 of LLC equity interest subscriptions to SLF. As of June 30, 2017 and September 30, 2016, $113,120 and $31,339, respectively, of the Company’s LLC equity interest subscriptions to SLF had been called and contributed, net of return of capital distributions subject to recall. For the three and nine months ended June 30, 2017, the Company received $891 and $4,054, respectively, in dividend income from the SLF LLC equity interests. For the three and nine months ended June 30, 2016, the Company received $1,068 and $2,971, respectively, in dividend income from the SLF LLC equity interests.

As of September 30, 2016, the amortized cost, net of principal repayments that were subject to recall, and fair value of the subordinated notes held by the Company was $77,301 and $77,301, respectively. As of September 30, 2016, the subordinated notes paid a weighted average interest rate of three-month LIBOR plus 8.0%. For the three and nine months ended June 30, 2017, the Company earned interest income on the subordinated notes of $0 and $1,639, respectively. For the three and nine months ended June 30, 2016, the Company earned interest income on the subordinated notes of $1,799 and $5,192, respectively.


53

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

See below for certain summarized financial information for SLF as of June 30, 2017 and September 30, 2016 and for the three and nine months ended June 30, 2017 and 2016:
 
As of
 
As of
  
June 30, 2017
 
September 30, 2016
Selected Balance Sheet Information:
  

 
  

Investments, at fair value
$
322,261

 
$
323,510

Cash and other assets
7,068

 
7,281

Receivable from investments sold
1,883

 
1,995

Total assets
$
331,212

 
$
332,786

Senior credit facility
$
204,900

 
$
214,050

Unamortized debt issuance costs
(110
)
 
(949
)
Payable for investments purchased
1,317

 

Other liabilities
672

 
567

Total liabilities
206,779

 
213,668

Subordinated notes and members’ equity
124,433

 
119,118

Total liabilities and members' equity
$
331,212

 
$
332,786


 
Three months ended June 30,
 
Nine months ended June 30,
  
2017
 
2016
 
2017
 
2016
Selected Statement of Operations Information:
  

 
  

 
 
 
 
Interest income
$
5,645

 
$
5,695

 
$
16,311

 
$
16,699

Fee income
5

 

 
5

 
22

Total investment income
5,650

 
5,695

 
16,316

 
16,721

Interest expense
2,129

 
4,016

 
8,148

 
11,775

Administrative service fee
123

 
127

 
354

 
327

Other expenses
34

 
35

 
98

 
110

Total expenses
2,286

 
4,178

 
8,600

 
12,212

Net investment income
3,364

 
1,517

 
7,716

 
4,509

Net realized gain (loss) on investments
29

 

 
3

 
(430
)
Net change in unrealized appreciation (depreciation)
      on investments and subordinated notes
(2,262
)
 
591

 
(2,891
)
 
(1,505
)
Net increase (decrease) in net assets
$
1,131

 
$
2,108

 
$
4,828

 
$
2,574



54

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

Note 5.     Transactions with Affiliated Companies

An affiliated company is generally a portfolio company in which the Company owns 5% or more of the portfolio company's voting securities. A controlled affiliate is generally a portfolio company in which the Company owns more than 25% of the portfolio company’s outstanding voting securities. Transactions related to investments with both controlled and non-controlled affiliates for the nine months ended June 30, 2017 and 2016 were as follows:
For the nine months ended June 30, 2017
Portfolio
Company
 
Fair value at September 30, 2016
 
Purchases
(cost)(1)
 
Redemptions
(cost)
 
Transfer in (out) (cost)
 
Discount
accretion
 
Net change in unrealized
gain/(loss)
 
Fair value at June 30, 2017
 
Net realized gain/(loss)
 
Interest and
fee income
 
Dividend
income
Controlled Affiliates
 
  

 
  

 
  

 
 
 
  

 
  

 
  

 
 
 
  

 
  

Senior Loan Fund LLC*
 
$
104,228

 
$
96,687

 
$
(92,207
)
 
$

 
$

 
$
171

 
$
108,879

 
$

 
$
1,639

 
$
4,054

Non-Controlled Affiliates
 
 
 
 
 
 
 
 
 
 
 
 
 
  

 
 
 
 
 
 
Competitor Group, Inc.
 
9,618

 
491

 
(15,615
)
 

 
278

 
5,228

 

 
(6,442
)
 
1,023

 

Total Controlled and
  Non-Controlled Affiliates
 
$
113,846

 
$
97,178

 
$
(107,822
)
 
$

 
$
278

 
$
5,399

 
$
108,879

 
$
(6,442
)
 
$
2,662

 
$
4,054

*
Together with RGA, the Company co-invests through SLF. SLF is capitalized as transactions are completed and all portfolio and investment decisions in respect to SLF must be approved by the SLF investment committee consisting of two representatives of the Company and RGA (with unanimous approval required from (i) one representative of each of the Company and RGA or (ii) both representatives of each of the Company and RGA). Therefore, although the Company owns more than 25% of the voting securities of SLF, the Company does not believe that it has control over SLF for purposes of the 1940 Act or otherwise.

(1) 
Purchases at cost includes amounts related to PIK capitalized and added to the principal balance of the respective loans.
For the nine months ended June 30, 2016
Portfolio
Company
 
Fair value at September 30, 2015
 
Purchases
(cost)(1)
 
Redemptions
(cost)
 
Transfer in (out) (cost)
 
Discount
accretion
 
Net change in unrealized
gain/(loss)
 
Fair value at June 30, 2016
 
Net realized gain/(loss)
 
Interest and
fee income
 
Dividend
income
Controlled Affiliates
 
  

 
  

 
  

 
 
 
  

 
  

 
  

 
 
 
  

 
  

Senior Loan Fund LLC*
 
$
98,936

 
$
20,440

 
$
(6,773
)
 
$

 
$

 
$
(1,539
)
 
$
111,064

 
$

 
$
5,192

 
$
2,971

Non-Controlled Affiliates
 
 
 
 
 
 
 
 
 
 
 
 
 
  

 
 
 
  

 
  

Barcelona Restaurants, LLC(2)
 
5,523

 

 
(1,995
)
 
(4,871
)
 

 
1,343

 

 
2,722

 

 

Competitor Group, Inc.(3)
 

 
149

 

 
13,743

 
50

 
(4,395
)
 
9,547

 

 
337

 

Total Controlled and
  Non-Controlled Affiliates
 
$
104,459

 
$
20,589

 
$
(8,768
)
 
$
8,872

 
$
50

 
$
(4,591
)
 
$
120,611

 
$
2,722

 
$
5,529

 
$
2,971

*
Together with RGA, the Company co-invests through SLF. SLF is capitalized as transactions are completed and all portfolio and investment decisions in respect to SLF must be approved by the SLF investment committee consisting of two representatives of the Company and RGA (with unanimous approval required from (i) one representative of each of the Company and RGA or (ii) both representatives of each of the Company and RGA). Therefore, although the Company owns more than 25% of the voting securities of SLF, the Company does not believe that it has control over SLF for purposes of the 1940 Act or otherwise.

(1) 
Purchases at cost includes amounts related to PIK capitalized and added to the principal balance of the respective loans.
(2) 
During the three months ended December 31, 2015, a portion of the Company's investment was sold diluting the Company's ownership to less than five percent of the portfolio company's voting securities. Effective as of and for periods subsequent to December 31, 2015, the Company no longer classified the portfolio company as a non-controlled affiliate company.
(3) 
During the three months ended March 31, 2016, the Company's ownership increased to over five percent of the portfolio company's voting securities as a result of a partial debt to equity conversion.

Note 6.    Fair Value Measurements

The Company follows ASC Topic 820 for measuring fair value. Fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the assets or liabilities or market and the assets’ or liabilities’ complexity. The Company’s fair value analysis includes an analysis of the value of any unfunded loan commitments. Assets and liabilities are categorized for disclosure purposes based upon the level of judgment associated with the inputs used to measure their value. The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the asset or liability as of the measurement date. The three levels are defined as follows:

55

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      


Level 1:     Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2:     Inputs include quoted prices for similar assets or liabilities in active markets and inputs that are observable for the assets or liabilities, either directly or indirectly, for substantially the full term of the assets or liabilities.

Level 3: Inputs include significant unobservable inputs for the assets or liabilities and include situations where there is little, if any, market activity for the assets or liabilities. The inputs into the determination of fair value are based upon the best information available and may require significant management judgment or estimation.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset’s or a liability’s categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The Company assesses the levels of assets and liabilities at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfers. There were no transfers among Level 1, 2 and 3 of the fair value hierarchy for assets and liabilities during the three and nine months ended June 30, 2017 and 2016. The following section describes the valuation techniques used by the Company to measure different assets and liabilities at fair value and includes the level within the fair value hierarchy in which the assets and liabilities are categorized.

Investments

Level 1 investments are valued using quoted market prices. Level 2 investments are valued using market consensus prices that are corroborated by observable market data and quoted market prices for similar assets and liabilities. Level 3 investments are valued at fair value as determined in good faith by the Board, based on input of management, the audit committee and independent valuation firms that have been engaged at the direction of the Board to assist in the valuation of each portfolio investment without a readily available market quotation at least once during a trailing twelve-month period under a valuation policy and a consistently applied valuation process. This valuation process is conducted at the end of each fiscal quarter, with approximately 25% (based on the number of portfolio companies) of the Company’s valuations of debt and equity investments without readily available market quotations subject to review by an independent valuation firm. All investments as of June 30, 2017 and September 30, 2016, with the exception of money market funds included in cash and cash equivalents and restricted cash and cash equivalents (Level 1 investments) and investments measured at fair value using the NAV, were valued using Level 3 inputs of the fair value hierarchy.

When determining fair value of Level 3 debt and equity investments, the Company may take into account the following factors, where relevant: the enterprise value of a portfolio company, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons to publicly traded securities, and changes in the interest rate environment and the credit markets generally that may affect the price at which similar investments may be made and other relevant factors. The primary method for determining enterprise value uses a multiple analysis whereby appropriate multiples are applied to the portfolio company’s net income before net interest expense, income tax expense, depreciation and amortization (“EBITDA”). A portfolio company’s EBITDA may include pro-forma adjustments for items such as acquisitions, divestitures, or expense reductions. The enterprise value analysis is performed to determine the value of equity investments and to determine if debt investments are credit impaired. If debt investments are credit impaired, the Company will use the enterprise value analysis or a liquidation basis analysis to determine fair value. For debt investments that are not determined to be credit impaired, the Company uses a market interest rate yield analysis to determine fair value.


56

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

In addition, for certain debt investments, the Company may base its valuation on indicative bid and ask prices provided by an independent third party pricing service. Bid prices reflect the highest price that the Company and others may be willing to pay. Ask prices represent the lowest price that the Company and others may be willing to accept. The Company generally uses the midpoint of the bid/ask range as its best estimate of fair value of such investment.

Due to the inherent uncertainty of determining the fair value of Level 3 investments that do not have a readily available market value, the fair value of the investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that may ultimately be received or settled. Further, such investments are generally subject to legal and other restrictions or otherwise are less liquid than publicly traded instruments. If the Company were required to liquidate a portfolio investment in a forced or liquidation sale, the Company may realize significantly less than the value at which such investment had previously been recorded. The Company’s investments are subject to market risk. Market risk is the potential for changes in the value due to market changes. Market risk is directly impacted by the volatility and liquidity in the markets in which the investments are traded.

Secured Borrowings

The Company has elected the fair value option under ASC Topic 825 - Financial Instruments, relating to accounting for debt obligations at their fair value for its secured borrowings which arose due to partial loan sales which did not meet the criteria for sale treatment under ASC Topic 860. The Company reports changes in the fair value of its secured borrowings as a component of the net change in unrealized (appreciation) depreciation on secured borrowings in the consolidated statements of operations. The net gain or loss reflects the difference between the fair value and the principal amount due on maturity.

All secured borrowings as of June 30, 2017 and September 30, 2016 were valued using Level 3 inputs under the fair value hierarchy, and the Company’s approach to determining fair value of Level 3 secured borrowings is consistent with its approach to determining fair value of the Level 3 investments that are associated with these secured borrowings as previously described.

The following tables present fair value measurements of the Company’s investments and secured borrowings and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value as of June 30, 2017 and September 30, 2016:

As of June 30, 2017
 
Fair Value Measurements Using
Description
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets:
 
  

 
  

 
  

 
  

Debt investments(1)
 
$

 
$

 
$
1,631,532

 
$
1,631,532

Equity investments(1)
 

 

 
61,397

 
61,397

Money market funds(1)(2)
 
11,639

 

 

 
11,639

Investment measured at NAV(3)(4)
 

 

 

 
108,879

Total assets:
 
$
11,639

 
$

 
$
1,692,929

 
$
1,813,447

Secured borrowings:
 
$

 
$

 
$
406

 
$
406



57

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

As of September 30, 2016
 
Fair Value Measurements Using
Description
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets:
 
  

 
  

 
  

 
  

Debt investments(1)
 
$

 
$

 
$
1,573,953

 
$
1,573,953

Equity investments(1)
 

 

 
59,732

 
59,732

Money market funds(1)(2)
 
44,281

 

 

 
44,281

Investment measured at NAV(3)(4)
 

 

 

 
26,927

Total assets:
 
$
44,281

 
$

 
$
1,633,685

 
$
1,704,893

Secured borrowings:
 
$

 
$

 
$
475

 
$
475


 
(1) 
Refer to the Consolidated Schedules of Investments for further details.
(2) 
Included in cash and cash equivalents and restricted cash and cash equivalents on the Consolidated Statements of Financial Condition.
(3) 
Certain investments that are measured at fair value using the NAV have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Financial Condition.
(4) 
Represents the Company's investment in LLC equity interests in SLF. The fair value of this investment has been determined using the NAV of the Company’s ownership interest in members’ capital.

The net change in unrealized appreciation (depreciation) for the three and nine months ended June 30, 2017 reported within the net change in unrealized appreciation (depreciation) on investments in the Company’s consolidated statements of operations attributable to the Company’s Level 3 assets held as of June 30, 2017 was $3,882 and $8,874, respectively. The net change in unrealized appreciation (depreciation) for the three and nine months ended June 30, 2016 reported within the net change in unrealized appreciation (depreciation) on investments in the Company’s consolidated statements of operations attributable to the Company’s Level 3 assets held as of June 30, 2016 was $1,820 and $1,353, respectively.


58

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

The following table presents the changes in investments and secured borrowings measured at fair value using Level 3 inputs for the nine months ended June 30, 2017 and 2016:

 
For the nine months ended June 30, 2017
  
Debt
Investments
 
Equity
Investments
 
Total
Investments
 
Secured
Borrowings
Fair value, beginning of period
$
1,573,953

 
$
59,732

 
$
1,633,685

 
$
475

Net change in unrealized appreciation (depreciation)
    on investments
3,621

 
6,350

 
9,971

 

Net change in unrealized appreciation (depreciation)
    on secured borrowings

 

 

 
(1
)
Realized gain (loss) on investments
(640
)
 
(976
)
 
(1,616
)
 

Proceeds from (funding of) revolving loans, net
(959
)
 

 
(959
)
 

Fundings of investments
446,059

 
3,162

 
449,221

 

PIK interest
1,537

 

 
1,537

 

Proceeds from principal payments and sales of portfolio
    investments
(320,143
)
 
(6,871
)
 
(327,014
)
 

Noncash proceeds from subordinated notes in SLF
    principal payments
(78,689
)
 

 
(78,689
)
 

Repayments on secured borrowings

 

 

 
(69
)
Accretion of discounts and amortization of premiums
6,793

 

 
6,793

 
1

Fair value, end of period
$
1,631,532

 
$
61,397

 
$
1,692,929

 
$
406


 
For the nine months ended June 30, 2016
  
Debt
Investments
 
Equity
Investments
 
Total
Investments
 
Secured
Borrowings
Fair value, beginning of period
$
1,449,603

 
$
57,808

 
$
1,507,411

 
$
355

Net change in unrealized appreciation (depreciation)
    on investments
4,081

 
2,249

 
6,330

 

Net change in unrealized appreciation (depreciation)
    on secured borrowings

 

 

 
(1
)
Realized gain (loss) on investments
(5,724
)
 
5,464

 
(260
)
 

Proceeds from (funding of) revolving loans, net
2,624

 

 
2,624

 

Fundings of investments
449,237

 
11,422

 
460,659

 

PIK interest
689

 

 
689

 

Proceeds from principal payments and sales of portfolio
    investments
(375,583
)
 
(9,029
)
 
(384,612
)
 

Repayments on secured borrowings

 

 

 
(29
)
Accretion of discounts and amortization of premiums
5,896

 

 
5,896

 
1

Fair value, end of period
$
1,530,823

 
$
67,914

 
$
1,598,737

 
$
326



59

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

The following tables present quantitative information about the significant unobservable inputs of the Company’s Level 3 investments and secured borrowings as of June 30, 2017 and September 30, 2016.

Quantitative information about Level 3 Fair Value Measurements
 
Fair value as of June 30, 2017
 
Valuation Techniques
 
Unobservable Input
 
Range (Weighted Average)
Assets:
  

 
  
 
  
 
  
Senior secured loans(1)(2)
$
180,472

 
Market rate approach
 
Market interest rate
 
5.4% - 12.3% (6.8%)
  
  

 
Market comparable companies
 
EBITDA multiples
 
6.0x - 17.5x (11.3x)
 
11,711

 
Market comparable
 
Broker/dealer bids or quotes
 
N/A
One stop loans(1)(3)(4)
$
1,423,187

 
Market rate approach
 
Market interest rate
 
4.5% - 22.3% (8.0%)
  
 
 
Market comparable companies
 
EBITDA multiples
 
4.0x - 35.0x (12.2x)
  
  
 
  
 
Revenue multiples
 
2.0x - 7.5x (3.9x)
 
3,263

 
Market comparable
 
Broker/dealer bids or quotes
 
N/A
Subordinated debt and second lien loans(1)
$
9,492

 
Market rate approach
 
Market interest rate
 
9.3% - 19.5% (9.4%)
  
  

 
Market comparable companies
 
EBITDA multiples
 
10.5x
Equity(5)
$
61,397

 
Market comparable companies
 
EBITDA multiples(6)
 
4.0x - 21.5x (11.6x)
  
  
 
  
 
Revenue multiples(6)
 
2.0x - 5.8x (2.9x)
Liabilities:
  
 
  
 
  
 
 
Secured borrowings(7)
$
406

 
Market rate approach
 
Market interest rate
 
6.6%
  
  

 
Market comparable companies
 
EBITDA multiples
 
16.0x
 
(1) 
The fair value of this asset class was determined using the market rate approach as the investments in this asset class were determined not to be credit impaired using the market comparable companies approach. The unobservable inputs for both valuation techniques have been presented, but the fair value as of June 30, 2017 was determined using the market rate approach.
(2) 
Excludes $(60) of non-accrual loans at fair value, which the Company valued on a liquidation basis. The negative fair value is the result of the unfunded commitment being valued below par.
(3) 
Excludes $3,467 of non-accrual loans at fair value, which the Company valued on a liquidation basis.
(4) 
The Company valued $1,285,788 and $137,399 of one stop loans using EBITDA and revenue multiples, respectively. All one stop loans were also valued using the market rate approach.
(5) 
Excludes $108,879 of LLC equity interests in SLF at fair value, which the Company valued using the NAV.
(6) 
The Company valued $57,367 and $4,030 of equity investments using EBITDA and revenue multiples, respectively.
(7) 
The fair value of the secured borrowings was determined using the market rate approach as the corresponding investments were determined not to be credit impaired using the market comparable companies approach. The unobservable inputs for both valuation techniques have been presented, but the fair value as of June 30, 2017 was determined using the market rate approach.

60

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

Quantitative information about Level 3 Fair Value Measurements
 
Fair value as of September 30, 2016
 
Valuation Techniques
 
Unobservable Input
 
Range
(Weighted Average)
Assets:
  

 
  
 
  
 
  
Senior secured loans(1)(2)
$
148,446

 
Market rate approach
 
Market interest rate
 
4.0% - 10.0% (6.4%)
  
  

 
Market comparable companies
 
EBITDA multiples
 
6.0x - 17.5x (11.5x)
 
14,247

 
Market comparable
 
Broker/dealer bids or quotes
 
N/A
Subordinated Notes of SLF
$
77,301

 
Discounted cash flow analysis
 
Discount rate
 
8.2%
One stop loans(1)(3)(4)
$
1,299,650

 
Market rate approach
 
Market interest rate
 
4.5% - 23.5% (7.9%)
  
 
 
Market comparable companies
 
EBITDA multiples
 
4.0x - 35.4x (10.6x)
  
  
 
  
 
Revenue multiples
 
2.0x - 7.5x (3.9x)
 
3,647

 
Market comparable
 
Broker/dealer bids or quotes
 
N/A
Subordinated debt and second lien loans(1)
$
29,336

 
Market rate approach
 
Market interest rate
 
9.0% - 29.5% (11.3%)
  
  

 
Market comparable companies
 
EBITDA multiples
 
6.5x - 20.0x (13.1x)
Equity(5)
$
59,732

 
Market comparable companies
 
EBITDA multiples(6)
 
4.0x - 16.7x (10.9x)
  
  
 
  
 
Revenue multiples(6)
 
2.0x - 5.5x (3.2x)
Liabilities:
  
 
  
 
  
 
 
Secured borrowings(7)
$
475

 
Market rate approach
 
Market interest rate
 
7.0%
  
  

 
Market comparable companies
 
EBITDA multiples
 
16.0x
 
(1) 
The fair value of this asset class was determined using the market rate approach as the investments in this asset class were determined not to be credit impaired using the market comparable companies approach. The unobservable inputs for both valuation techniques have been presented, but the fair value as of September 30, 2016 was determined using the market rate approach.
(2) 
Excludes $156 of non-accrual loans at fair value, which the Company valued on a liquidation basis.
(3) 
Excludes $1,170 of non-accrual loans at fair value, which the Company valued on a liquidation basis.
(4) 
The Company valued $1,171,240 and $128,410 of one stop loans using EBITDA and revenue multiples, respectively. All one stop loans were also valued using the market rate approach.
(5) 
Excludes $26,927 of LLC equity interests in SLF at fair value, which the Company valued using the NAV.
(6) 
The Company valued $55,897 and $3,835 of equity investments using EBITDA and revenue multiples, respectively.
(7) 
The fair value of the secured borrowings was determined using the market rate approach as the corresponding investments were determined not to be credit impaired using the market comparable companies approach. The unobservable inputs for both valuation techniques have been presented, but the fair value as of September 30, 2016 was determined using the market rate approach.

The above tables are not intended to be all-inclusive but rather to provide information on significant unobservable inputs and valuation techniques used by the Company.

The significant unobservable inputs used in the fair value measurement of the Company’s debt and equity investments and secured borrowings are EBITDA multiples, revenue multiples and market interest rates. The Company uses EBITDA multiples and, to a lesser extent, revenue multiples on its debt and equity investments and secured borrowings to determine any credit gains or losses. Increases or decreases in either of these inputs in isolation would result in a significantly lower or higher fair value measurement. The Company uses market interest rates for loans to determine if the effective yield on a loan is commensurate with the market yields for that type of loan. If a loan’s effective yield is significantly less than the market yield for a similar loan with a similar credit profile, then the resulting fair value of the loan may be lower.

61

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      


Other Financial Assets and Liabilities

ASC Topic 820 requires disclosure of the fair value of financial instruments for which it is practical to estimate such value. As a result, with the exception of the line item titled “debt” which is reported at cost, all assets and liabilities approximate fair value on the consolidated statements of financial condition due to their short maturity. Fair value of the Company’s debt is estimated using Level 3 inputs by discounting remaining payments using comparable market rates or market quotes for similar instruments at the measurement date, if available.

The following are the carrying values and fair values of the Company’s debt as of June 30, 2017 and September 30, 2016. Fair value is estimated by discounting remaining payments using applicable market rates or market quotes for similar instruments at the measurement date, if available.

 
As of June 30, 2017
 
As of September 30, 2016
  
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Debt
$
883,400

 
$
882,162

 
$
864,700

 
$
873,980


Note 7.    Borrowings

In accordance with the 1940 Act, with certain limited exceptions, the Company is only allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 200% after such borrowing. On September 13, 2011, the Company received exemptive relief from the SEC allowing it to modify the asset coverage requirement to exclude the SBA debentures from this calculation. As such, the Company’s ratio of total consolidated assets to outstanding indebtedness may be less than 200%. This provides the Company with increased investment flexibility but also increases its risks related to leverage. As of June 30, 2017, the Company’s asset coverage for borrowed amounts was 258.4% (excluding the SBA debentures).

Debt Securitizations: On July 16, 2010, the Company completed a $300,000 term debt securitization, which was subsequently increased to $350,000 (as amended, “2010 Debt Securitization”). The notes (“2010 Notes”) offered in the 2010 Debt Securitization were issued by the 2010 Issuer, a subsidiary of Holdings. Through October 19, 2016, the 2010 Debt Securitization consisted of $203,000 of Aaa/AAA Class A 2010 Notes that bore interest at a rate of three-month LIBOR plus 1.74%, $12,000 of Class B 2010 Notes that bore interest at a rate of three-month LIBOR plus 2.40% and $135,000 of Subordinated 2010 Notes that do not bear interest. On October 20, 2016, the Company and the 2010 Issuer amended the 2010 Debt Securitization to, among other things, (a) refinance the issued Class A 2010 Notes by redeeming in full the Class A 2010 Notes and issuing new Class A-Refi 2010 Notes in an aggregate principal amount of $205,000 that bear interest at a rate of three-month LIBOR plus 1.90%, (b) refinance the Class B Notes by redeeming in full the Class B 2010 Notes and issuing new Class B-Refi 2010 Notes in an aggregate principal amount of $10,000 that bear interest at a rate of three-month LIBOR plus 2.40%, and (c) extend the reinvestment period applicable to the 2010 Issuer to July 20, 2018. Following the refinancing, Holdings retained the Class B-Refi 2010 Notes. The Class A-Refi 2010 Notes and Class B-Refi 2010 Notes are secured by the assets held by the 2010 Issuer.

The Class A-Refi 2010 Notes are included in the June 30, 2017 consolidated statement of financial condition as debt of the Company and the Class B-Refi 2010 Notes were eliminated in consolidation. The Class A and Class B 2010 Notes are included in the September 30, 2016 consolidated statement of financial condition as debt of the Company. As of June 30, 2017 and September 30, 2016, the Subordinated 2010 Notes were eliminated in consolidation.

Through July 20, 2018, all principal collections received on the underlying collateral may be used by the 2010 Issuer to purchase new collateral under the direction of the Investment Adviser in its capacity as collateral manager of the 2010 Issuer and in accordance with the Company’s investment strategy, allowing the Company to maintain the leverage in the 2010 Debt Securitization. The 2010 Notes are scheduled to mature on July 20, 2023.

62

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      


As of June 30, 2017 and September 30, 2016, there were 79 and 77 portfolio companies with a total fair value of $347,064 and $319,288, respectively, securing the 2010 Notes. The pool of loans in the 2010 Debt Securitization must meet certain requirements, including asset mix and concentration, collateral coverage, term, agency rating, minimum coupon, minimum spread and sector diversity requirements.

The interest charged under the 2010 Debt Securitization is based on three-month LIBOR, which as of June 30, 2017 was 1.2%. For the three and nine months ended June 30, 2017 and 2016, the components of interest expense, cash paid for interest, annualized average interest rates and average outstanding balances for the 2010 Debt Securitization were as follows:

 
For the three months ended June 30,
 
For the nine months ended June 30,
  
2017
 
2016
 
2017
 
2016
Stated interest expense
$
1,570

 
$
1,309

 
$
4,492

 
$
3,726

Amortization of debt issuance costs
67

 
30

 
193

 
360

Total interest and other debt financing expenses
$
1,637

 
$
1,339

 
$
4,685

 
$
4,086

Cash paid for interest expense
$
1,502

 
$
1,305

 
$
4,317

 
$
3,590

Annualized average stated interest rate
3.1
%
 
2.4
%
 
2.9
%
 
2.3
%
Average outstanding balance
$
205,000

 
$
215,000

 
$
205,696

 
$
215,000


As of June 30, 2017, the amounts, ratings and interest rates (expressed as a spread to three-month LIBOR) of the Class A-Refi 2010 Notes are as follows:

Description
 
Class A-Refi 2010 Notes
Type
 
Senior Secured Floating Rate
Amount Outstanding
 
$205,000
Moody’s Rating
 
“Aaa”
S&P Rating
 
“AAA”
Interest Rate
 
LIBOR + 1.90%
Stated Maturity
 
July 20, 2023

On June 5, 2014, the Company completed a $402,569 term debt securitization (“2014 Debt Securitization”). The notes (“2014 Notes”) offered in the 2014 Debt Securitization were issued by the 2014 Issuer and are secured by a diversifed portfolio of senior secured and second lien loans held by the 2014 Issuer. The 2014 Debt Securitization consists of $191,000 of Aaa/AAA Class A-1 2014 Notes, $20,000 of Aaa/AAA Class A-2 2014 Notes and $35,000 of Aa2/AA Class B 2014 Notes. In partial consideration for the loans transferred to the 2014 Issuer as part of the 2014 Debt Securitization, the Company received $37,500 of Class C 2014 Notes and $119,069 of LLC equity interests in the 2014 Issuer. The Company retained all of the Class C 2014 Notes and LLC equity interests totaling $37,500 and $119,069, respectively. The Class A-1, Class A-2 and Class B 2014 Notes are included in the June 30, 2017 and September 30, 2016 consolidated statements of financial condition as debt of the Company. As of June 30, 2017 and September 30, 2016, the Class C 2014 Notes and LLC equity interests were eliminated in consolidation.

Through April 28, 2018, all principal collections received on the underlying collateral may be used by the 2014 Issuer to purchase new collateral under the direction of the Investment Adviser in its capacity as collateral manager of the 2014 Issuer and in accordance with the Company’s investment strategy, allowing the Company to maintain the leverage in the 2014 Debt Securitization. The 2014 Notes are scheduled to mature on April 25, 2026.


63

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

As of June 30, 2017 and September 30, 2016, there were 83 and 79 portfolio companies with a total fair value of $398,722 and $391,752, respectively, securing the 2014 Notes. The pool of loans in the 2014 Debt Securitization must meet certain requirements, including asset mix and concentration, collateral coverage, term, agency rating, minimum coupon, minimum spread and sector diversity requirements.

The interest charged under the 2014 Debt Securitization is based on three-month LIBOR, which as of June 30, 2017 was 1.2%. For the three and nine months ended June 30, 2017 and 2016, the components of interest expense, cash paid for interest, annualized average interest rates and average outstanding balances for the 2014 Debt Securitization were as follows:

 
For the three months ended June 30,
 
For the nine months ended June 30,
  
2017
 
2016
 
2017
 
2016
Stated interest expense
$
1,864

 
$
1,558

 
$
5,333

 
$
4,415

Amortization of debt issuance costs
159

 
160

 
478

 
480

Total interest and other debt financing expenses
$
2,023

 
$
1,718

 
$
5,811

 
$
4,895

Cash paid for interest expense
$
1,790

 
$
1,550

 
$
5,149

 
$
4,225

Annualized average stated interest rate
3.0
%
 
2.5
%
 
2.9
%
 
2.4
%
Average outstanding balance
$
246,000

 
$
246,000

 
$
246,000

 
$
246,000


As of June 30, 2017, the classes, amounts, ratings and interest rates (expressed as a spread to three-month LIBOR) of the Class A-1, A-2 and B 2014 Notes are as follows:

Description
 
Class A-1 2014 Notes
 
Class A-2 2014 Notes
 
Class B 2014 Notes
Type
 
Senior Secured Floating Rate
 
Senior Secured Floating Rate
 
Senior Secured Floating Rate
Amount Outstanding
 
$191,000
 
$20,000
 
$35,000
Moody’s Rating
 
“Aaa”
 
“Aaa”
 
“Aa2”
S&P Rating
 
“AAA”
 
“AAA”
 
“AA”
Interest Rate
 
LIBOR + 1.75%
 
LIBOR + 1.95%
 
LIBOR + 2.50%
Stated Maturity
 
April 25, 2026
 
April 25, 2026
 
April 25, 2026

The Investment Adviser serves as collateral manager to the 2010 Issuer and the 2014 Issuer under separate collateral management agreements and receives a fee for providing these services. The total fees payable by the Company under its Investment Advisory Agreement are reduced by an amount equal to the total aggregate fees that are paid to the Investment Adviser by the 2010 Issuer and the 2014 Issuer for rendering such collateral management services.

As part of each of the 2010 Debt Securitization and the 2014 Debt Securitization, GBDC entered into master loan sale agreements under which GBDC agreed to directly or indirectly sell or contribute certain senior secured and second lien loans (or participation interests therein) to the 2010 Issuer and the 2014 Issuer, as applicable, and to purchase or otherwise acquire the Subordinated 2010 Notes and the LLC equity interests in the 2014 Issuer, as applicable. The 2010 Notes (other than the Subordinated 2010 Notes) and the 2014 Notes are the secured obligations of the 2010 Issuer and 2014 Issuer, respectively, and indentures governing each of the 2010 Notes and the 2014 Notes include customary covenants and events of default. The pool of loans in the 2010 Debt Securitization and the 2014 Debt Securitization must meet certain requirements, including asset mix and concentration, collateral coverage, term, agency rating, minimum coupon, minimum spread and sector diversity requirements.

SBA Debentures: On August 24, 2010, SBIC IV received approval for a license from the SBA to operate as an SBIC. On December 5, 2012, SBIC V received a license from the SBA to operate as an SBIC. On January 10, 2017, SBIC VI received a license from the SBA to operate as an SBIC. SBICs are subject to a variety of regulations and oversight by the

64

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

SBA concerning the size and nature of the companies in which they may invest as well as the structures of those investments.

The licenses allow the SBICs to obtain leverage by issuing SBA-guaranteed debentures, subject to issuance of a capital commitment by the SBA and customary procedures. These debentures are non-recourse to GBDC, have interest payable semiannually and a ten-year maturity. The interest rate is fixed at the time of issuance at a market-driven spread over U.S. Treasury Notes with ten-year maturities.

Under present SBIC regulations, the maximum amount of SBA-guaranteed debentures that may be issued by multiple licensees under common management is $350,000 and the maximum amount that a single SBIC licensee may issue is $150,000. As of June 30, 2017, SBIC IV, SBIC V and SBIC VI had $150,000, $133,000 and $5,000, respectively, of outstanding SBA-guaranteed debentures that mature between March 2021 and September 2027, leaving incremental borrowing capacity of $17,000 and $45,000 for SBIC V and SBIC VI, respectively, under present SBIC regulations. As of September 30, 2016, SBIC IV and SBIC V had $150,000 and $127,000, respectively, of outstanding SBA-guaranteed debentures that mature between March 2021 and September 2026.

The interest rate on $283,000 of outstanding debentures as of June 30, 2017 is fixed at an average annualized interest rate of 3.5%. The annualized interim financing rate on the remaining $5,000 of outstanding debentures was 2.0% as of June 30, 2017. For the three and nine months ended June 30, 2017 and 2016, the components of interest expense, cash paid for interest, annualized average interest rates and average outstanding balances for the SBA debentures were as follows:

 
For the three months ended June 30,
 
For the nine months ended June 30,
  
2017
 
2016
 
2017
 
2016
Stated interest expense
$
2,473

 
$
2,140

 
$
7,339

 
$
6,284

Amortization of debt issuance costs
320

 
455

 
1,032

 
1,386

Total interest and other debt financing expenses
$
2,793

 
$
2,595

 
$
8,371

 
$
7,670

Cash paid for interest expense
$

 
$

 
$
4,764

 
$
4,083

Annualized average stated interest rate
3.5
%
 
3.6
%
 
3.5
%
 
3.6
%
Average outstanding balance
$
284,594

 
$
241,967

 
$
282,366

 
$
230,883


Revolving Credit Facility: On July 21, 2011, Funding entered into a senior secured revolving credit facility (as amended, the “Credit Facility”) with Wells Fargo Bank, N.A., as administrative agent and lender, which as of June 30, 2017, allowed Funding to borrow up to $225,000 at any one time outstanding, subject to leverage and borrowing base restrictions.

On March 1, 2016 the Credit Facility was amended to, among other things, make certain amendments to the computation of the borrowing base restrictions in the Credit Facility. The maximum borrowing capacity under the Credit Facility, the expiration of the reinvestment period and the stated maturity date of the Credit Facility did not change in connection with this amendment.

On May 2, 2017, the Company and Funding amended the Credit Facility to, among other things, increase the size of the Credit Facility from $200,000 to $225,000 and allowed for the addition of a third lender under the facility.

Through the reinvestment period, which as of June 30, 2017 ended July 29, 2017, the Credit Facility bears interest at one-month LIBOR plus 2.25% per annum. After the reinvestment period, through the stated maturity date of July 30, 2020, the rate will reset to one-month LIBOR plus 2.75% per annum for the remaining term of the Credit Facility. In addition to the stated interest rate on the Credit Facility, the Company is required to pay a non-usage fee at a rate between 0.50% and 2.00% per annum depending on the size of the unused portion of the Credit Facility.


65

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

The Credit Facility is collateralized by all of the assets held by Funding, and GBDC has pledged its interests in Funding as collateral to Wells Fargo Bank, N.A., as the collateral agent, under an ancillary agreement to secure the obligations of GBDC as the transferor and servicer under the Credit Facility. Both GBDC and Funding have made customary representations and warranties and are required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities. Borrowing under the Credit Facility is subject to the leverage restrictions contained in the 1940 Act.

The Company has transferred certain loans and debt securities it has originated or acquired from time to time to Funding through a purchase and sale agreement and may cause Funding to originate or acquire loans in the future, consistent with the Company’s investment objectives.

As of June 30, 2017 and September 30, 2016, the Company had outstanding debt under the Credit Facility of $144,400 and $126,700, respectively. For the three and nine months ended June 30, 2017, the Company had borrowings on the Credit Facility of $181,600 and $408,350 and repayments on the Credit Facility of $166,850 and $390,650, respectively. For the three and nine months ended June 30, 2016, the Company had borrowings on the Credit Facility of $93,300 and $248,550 and repayments on the Credit Facility of $94,800 and $229,750, respectively.

For the three and nine months ended June 30, 2017 and 2016, the components of interest expense, cash paid for interest and facility fees, annualized average interest rates and average outstanding balances for the Credit Facility were as follows:
 
For the three months ended June 30,
 
For the nine months ended June 30,
  
2017
 
2016
 
2017
 
2016
Stated interest expense
$
1,237

 
$
953

 
$
3,475

 
$
2,629

Facility fees
109

 
78

 
242

 
288

Amortization of debt issuance costs
297

 
332

 
785

 
967

Total interest and other debt financing expenses
$
1,643

 
$
1,363

 
$
4,502

 
$
3,884

Cash paid for interest expense and facility fees
$
1,324

 
$
1,019

 
$
3,606

 
$
2,866

Annualized average stated interest rate
3.3
%
 
2.7
%
 
3.1
%
 
2.7
%
Average outstanding balance
$
148,087

 
$
139,817

 
$
148,956

 
$
131,251


Revolvers:  On November 22, 2013, Revolver Funding entered into a $15,000 revolving line of credit (as amended, the “Revolver”), which could have been increased up to $30,000, with The PrivateBank and Trust Company. On October 21, 2015, the Company and Revolver Funding terminated the Revolver. There were no borrowings outstanding on the Revolver at the time of termination and Revolver Funding was released of all obligations under the Revolver and all liens on the assets held by Revolver Funding collateralizing the Revolver were released.

The Revolver was collateralized by all of the assets held by Revolver Funding. Both GBDC and Revolver Funding made customary representations and warranties and were required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities. Borrowing under the Revolver was subject to the leverage restrictions contained in the 1940 Act. In addition, the Company paid a fee of 0.25% per annum on any unused portion of the Revolver.

The revolver was not in existence for the three months and nine months ended June 30, 2017. For the three months ended June 30, 2016, the revolver was not in existence and the Company did not incur any expense. For the nine months ended June 30, 2016, the weighted average outstanding balance was $0, cash paid for facility fees was $2 and total interest expense of $36 included $2 of facility fees and $34 of amortization of deferred debt issuance costs.

On June 22, 2016, the Company entered into the Adviser Revolver with the Investment Adviser, with a maximum credit limit of $20,000 and expiration date of June 22, 2019. The Adviser Revolver bears an interest rate equal to the short-term

66

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

Applicable Federal Rate, which was 1.2% as of June 30, 2017. As of June 30, 2017 and September 30, 2016, the Company had no outstanding debt under the Adviser Revolver. For the three and nine months ended June 30, 2017, the Company had no borrowings and repayments, did not incur any interest expense and no cash was paid for interest on the Adviser Revolver. For the three and nine months ended June 30, 2016, the annualized average stated interest rate was 0.7% on average outstanding borrowings of $104, interest expense was an amount less than $1 and cash paid for interest was an amount less than $1. For the three and nine months ended June 30, 2016, the Company had borrowings on the Adviser Revolver of $9,500 and repayments on the Adviser Revolver of $9,500.

The average total debt outstanding (including the debt under the 2010 Debt Securitization, the 2014 Debt Securitization, SBA debentures, Credit Facility and Adviser Revolver) for the three and nine months ended June 30, 2017 was $883,681 and $883,018, respectively. The average total debt outstanding (including the debt under the 2010 Debt Securitization, the 2014 Debt Securitization, SBA debentures, Credit Facility, Revolver and Adviser Revolver) for the three and nine months ended June 30, 2016 was $842,888 and $823,169, respectively.

For the three and nine months ended June 30, 2017, the effective annualized average interest rate, which includes amortization of debt financing costs and non-usage facility fees, on the Company’s total debt outstanding (excluding secured borrowings) was 3.7% and 3.5%, respectively. For the three and nine months ended June 30, 2016, the effective annualized average interest rate, which includes amortization of debt financing costs and non-usage facility fees, on the Company’s total debt outstanding (excluding secured borrowings) was 3.3% and 3.3%, respectively.

A summary of the Company’s maturity requirements for borrowings as of June 30, 2017 is as follows:
 
Payments Due by Period
  
Total
 
Less Than
1 Year
 
1 – 3 Years
 
3 – 5 Years
 
More Than
5 Years
2010 Debt Securitization
$
205,000

 
$

 
$

 
$

 
$
205,000

2014 Debt Securitization
246,000

 

 

 

 
246,000

SBA debentures
288,000

 

 

 
100,000

 
188,000

Credit Facility
144,400

 

 

 
144,400

 

Adviser Revolver

 

 

 

 

Total borrowings
$
883,400

 
$

 
$

 
$
244,400

 
$
639,000


Secured Borrowings:  Certain partial loan sales do not qualify for sale accounting under ASC Topic 860 because these sales do not meet the definition of a “participating interest”, as defined in the guidance, in order for sale treatment to be allowed. Participations or other partial loan sales which do not meet the definition of a participating interest remain as an investment on the consolidated statement of financial condition and the portion sold is recorded as a secured borrowing in the liabilities section of the consolidated statement of financial condition. For these partial loan sales, the interest earned on the entire loan balance is recorded within “interest income” and the interest earned by the buyer in the partial loan sale is recorded within “interest and other debt financing expenses” in the consolidated statement of operations.

As of June 30, 2017 and September 30, 2016, the Company recognized secured borrowings at fair value of $406 and $475, respectively, and the fair values of the loans that are associated with these secured borrowings was $2,182 and $2,305, respectively.

These secured borrowings were the result of the Company’s completion of partial loan sales of one stop loans associated with a portfolio company that did not meet the definition of a “participating interest.” As a result, sale treatment was not allowed and the partial loan sales were treated as secured borrowings.

During the three and nine months ended June 30, 2017, there were no partial loan sales, no fundings on revolving and delayed draw secured borrowings and repayments on secured borrowings totaled $42 and $69, respectively. During the

67

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

three and nine months ended June 30, 2016, there were no partial loan sales, no fundings on revolving and delayed draw secured borrowings and repayments on secured borrowings totaled $8 and $29.

For the three and nine months ended June 30, 2017, the effective annualized average interest rate on secured borrowings, which includes amortization of original issuance costs, was 2.9% and 2.7%, respectively and interest expense was $3 and $9 and amortization of original issue discount was an amount less than $1and $1, respectively. For the three and nine months ended June 30, 2016, the effective annualized average interest rate on secured borrowings, which includes amortization of original issuance costs, was 4.6% and 4.6%, interest expense was $3 and $11 and amortization of original issue discount was $1 and $1, respectively.

Note 8.    Commitments and Contingencies

Commitments: The Company had outstanding commitments to fund investments totaling $70,412 and $81,417 under various undrawn revolvers and other credit facilities as of June 30, 2017 and September 30, 2016, respectively. As described in Note 4, the Company had commitments of up to $61,880 and $66,360 to SLF as of June 30, 2017 and September 30, 2016, respectively, that may be contributed primarily for the purpose of funding new investments approved by the SLF investment committee.

Indemnifications:  In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties that provide general indemnifications. The Company’s maximum exposure under these arrangements is unknown, as these involve future claims that may be made against the Company but that have not occurred. The Company expects the risk of any future obligations under these indemnifications to be remote.

Off-balance sheet risk: Off-balance sheet risk refers to an unrecorded potential liability that may result in a future obligation or loss, even though it does not appear on the consolidated statements of financial condition. The Company has entered and, in the future, may again enter into derivative instruments that contain elements of off-balance sheet market and credit risk. There were no commitments outstanding for derivative contracts as of June 30, 2017 and September 30, 2016. Derivative instruments can be affected by market conditions, such as interest rate volatility, which could impact the fair value of the derivative instruments. If market conditions move against the Company, it may not achieve the anticipated benefits of the derivative instruments and may realize a loss. The Company minimizes market risk through monitoring its investments and borrowings.

Concentration of credit and counterparty risk:  Credit risk arises primarily from the potential inability of counterparties to perform in accordance with the terms of the contract. The Company has engaged and, in the future, may engage again in derivative transactions with counterparties. In the event that the counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counterparties or issuers of the instruments. The Company’s maximum loss that it could incur related to counterparty risk on its derivative instruments is the value of the collateral for that respective derivative instrument. It is the Company’s policy to review, as necessary, the credit standing of each counterparty.

Legal proceedings:  In the normal course of business, the Company may be subject to legal and regulatory proceedings that are generally incidental to its ongoing operations. While there can be no assurance of the ultimate disposition of any such proceedings, the Company does not believe any disposition will have a material adverse effect on the Company’s consolidated financial statements.


68

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      

Note 9.    Financial Highlights

The financial highlights for the Company are as follows:
 
 
Nine months ended June 30,
Per share data:(1)
 
2017
 
2016
Net asset value at beginning of period
 
$
15.96

 
$
15.80

Net increase in net assets as a result of issuance of shares(2)
 
0.01

 
0.01

Net increase in net assets as a result of public offering
 
0.18

 

Dividends and distributions declared:
 
 
 
 
From net investment income
 
(1.19
)
 
(0.72
)
From capital gains
 
(0.02
)
 
(0.24
)
Net investment income(3)
 
0.92

 
0.93

Net realized gain (loss) on investments
 
(0.03
)
 
(0.01
)
Net change in unrealized appreciation (depreciation) on investments
 
0.18

 
0.11

Net asset value at end of period
 
$
16.01

 
$
15.88

Per share market value at end of period
 
$
19.12

 
$
18.07

Total return based on market value(4)
 
10.01
%
 
19.79
%
Number of common shares outstanding
 
59,235,174

 
51,623,325


 
 
Nine months ended June 30,
Listed below are supplemental data and ratios to the financial highlights:
 
2017
 
2016
Ratio of net investment income to average net assets*
 
7.70
%
 
7.82
%
Ratio of total expenses to average net assets (5)*
 
7.73
%
 
7.24
%
Ratio of incentive fees to average net assets
 
0.94
%
 
0.52
%
Ratio of expenses (without incentive fees) to average net assets*
 
6.79
%
 
6.72
%
Total return based on average net asset value (6)*
 
8.98
%
 
8.70
%
Net assets at end of period
 
$
948,219

 
$
819,981

Average debt outstanding
 
$
883,018

 
$
823,169

Average debt outstanding per share
 
$
14.91

 
$
15.95

Asset coverage ratio(7)
 
258.36
%
 
234.46
%
Portfolio turnover*
 
26.03
%
 
32.73
%
 
* Annualized for a period less than one year
(1) 
Based on actual number of shares outstanding at the end of the corresponding period or the weighted average shares outstanding for the period, unless otherwise noted, as appropriate.
(2) 
Net increase in net assets as a result of issuance of shares related to shares issued through the DRIP.
(3) 
Net investment income per share for the nine months ended June 30, 2017 and 2016 is shown after a net expense of $17 and $333, respectively, for U.S. federal excise tax.
(4) 
Total return based on market value assumes distributions are reinvested in accordance with the DRIP. Total return does not include sales load.
(5) 
Expenses, other than incentive fees, are annualized for periods of less than one year.
(6) 
Total return based on average net asset value is calculated as (a) the net increase in net assets resulting from operations divided (b) the daily average of total net assets. Total return does not include sales load.
(7) 
In accordance with the 1940 Act, with certain limited exceptions (including the Company's exemptive relief related to SBA debentures), the Company is only allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 200% after such borrowing.

69

    
Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)      


Note 10. Earnings Per Share

The following information sets forth the computation of the net increase in net assets per share resulting from operations for the three and nine months ended June 30, 2017 and 2016:
 
Three months ended June 30,
 
Nine months ended June 30,
  
2017
 
2016
 
2017
 
2016
Earnings available to stockholders
$
20,111

 
$
18,289

 
$
59,835

 
$
53,105

Basic and diluted weighted average shares outstanding
57,719,505

 
51,513,685

 
56,058,642

 
51,399,363

Basic and diluted earnings per share
$
0.35

 
$
0.35

 
$
1.07

 
$
1.03


Note 11. Dividends and Distributions

The Company’s dividends and distributions are recorded on the ex-dividend date. The following table summarizes the Company’s dividend declarations and distributions during the nine months ended June 30, 2017 and 2016:

Date Declared
 
Record Date
 
Payment Date
 
Amount
Per Share
 
Cash
Distribution
 
DRIP Shares
Issued
 
DRIP Shares
Value
Nine months ended June 30, 2016
 
  

 
  

 
  

 
  

 
05/03/2016
 
06/06/2016
 
06/29/2016
 
$
0.32

 
$
14,558

 
112,104

 
$
1,926

 
02/02/2016
 
03/07/2016
 
03/30/2016
 
$
0.32

 
$
14,287

 
131,434

 
$
2,155

 
11/17/2015
 
12/11/2015
 
12/29/2015
 
$
0.32

 
$
15,149

 
79,594

 
$
1,267

Nine months ended June 30, 2017
 
  

 
  

 
  

 
  

 
05/04/2017
 
06/06/2017
 
06/29/2017
 
$
0.32

 
$
16,186

 
119,251

 
$
2,171

 
02/07/2017
 
03/07/2017
 
03/30/2017
 
$
0.32

 
$
15,509

 
116,386

 
$
2,167

 
11/14/2016
 
12/12/2016
 
12/29/2016
 
$
0.57

(1) 
$
28,239

 
177,970

 
$
3,145


(1) 
Includes a special distribution of $0.25 per share.

Note 12. Subsequent Events

On July 5, 2017, the Company sold an additional 220,221 shares of its common stock pursuant to the underwriter's partial exercise of the option the Company granted in connection with its June 6, 2017 sale of 1,750,000 shares of common stock pursuant to an underwritten public offering. Settlement of this partial exercise of the option resulted in net proceeds, after underwriting costs, of $4,120.

On July 28, 2017, Funding entered into an amendment, or the Credit Facility Amendment, to the documents governing the Credit Facility. The Credit Facility Amendment was effective as of July 28, 2017. The Credit Facility Amendment, among other things, (a) extended the expiration of the reinvestment period from July 29, 2017 to September 27, 2017, during which period Funding, subject to certain conditions, may make borrowings under the facility and (b) extended the stated maturity date to September 28, 2020. The size, interest rate and other material terms of the Credit Facility were unchanged.

On August 2, 2017, the Company’s Board declared a quarterly dividend of $0.32 per share payable on September 29, 2017 to holders of record as of September 6, 2017.



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

The information contained in this section should be read in conjunction with our interim and unaudited consolidated financial statements and related notes thereto appearing elsewhere in this quarterly report on Form 10-Q. In this report, “we,” “us,” “our” and “Golub Capital BDC” refer to Golub Capital BDC, Inc. and its consolidated subsidiaries.

Forward-Looking Statements

Some of the statements in this quarterly report on Form 10-Q constitute forward-looking statements, which relate to future events or our future performance or financial condition. The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties, including statements as to:

our future operating results;
our business prospects and the prospects of our portfolio companies;
the effect of investments that we expect to make and the competition for those investments;
our contractual arrangements and relationships with third parties;
actual and potential conflicts of interest with GC Advisors LLC, or GC Advisors, and other affiliates of Golub Capital LLC, collectively, Golub Capital;
the dependence of our future success on the general economy and its effect on the industries in which we invest;
the ability of our portfolio companies to achieve their objectives;
the use of borrowed money to finance a portion of our investments;
the adequacy of our financing sources and working capital;
the timing of cash flows, if any, from the operations of our portfolio companies;
general economic and political trends and other external factors;
the ability of GC Advisors to locate suitable investments for us and to monitor and administer our investments;
the ability of GC Advisors or its affiliates to attract and retain highly talented professionals;
our ability to qualify and maintain our qualification as a regulated investment company, or RIC,
and as a business development company;
general price and volume fluctuations in the stock markets;
the impact on our business of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations issued thereunder and any actions toward repeal thereof; and
the effect of changes to tax legislation and our tax position.

Such forward-looking statements may include statements preceded by, followed by or that otherwise include the words “may,” “might,” “will,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “predict,” “potential,” “plan” or similar words. The forward looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth elsewhere in this quarterly report on Form 10-Q and as “Risk Factors” in our annual report on Form 10-K for the year ended September 30, 2016.

We have based the forward-looking statements included in this report on information available to us on the date of this report. Actual results could differ materially from those anticipated in our forward-looking statements and future results could differ materially from historical performance. You are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the Securities and Exchange Commission, or the SEC, including annual reports on Form 10-K, registration statements on Form N-2, quarterly reports on Form 10-Q and current reports on Form 8-K. This quarterly report on Form 10-Q contains statistics and other data that have been obtained from or compiled from information made available by third-party service providers. We have not independently verified such statistics or data.


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Overview

We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended, or the 1940 Act. In addition, for U.S. federal income tax purposes, we have elected to be treated as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended, or the Code. As a business development company and a RIC, we are also subject to certain constraints, including limitations imposed by the 1940 Act and the Code.

Our shares are currently listed on The NASDAQ Global Select Market under the symbol “GBDC”.

Our investment objective is to generate current income and capital appreciation by investing primarily in senior secured and one stop loans of U.S. middle-market companies. We may also selectively invest in second lien and subordinated loans of, and warrants and minority equity securities in U.S. middle-market companies. We intend to achieve our investment objective by (1) accessing the established loan origination channels developed by Golub Capital, a leading lender to U.S. middle-market companies with over $20.0 billion in capital under management as of June 30, 2017, (2) selecting investments within our core middle-market company focus, (3) partnering with experienced private equity firms, or sponsors, in many cases with whom Golub Capital has invested alongside in the past, (4) implementing the disciplined underwriting standards of Golub Capital and (5) drawing upon the aggregate experience and resources of Golub Capital.

Our investment activities are managed by GC Advisors and supervised by our board of directors of which a majority of the members are independent of us, GC Advisors and its affiliates.

Under an investment advisory agreement, or the Investment Advisory Agreement, which was most recently reapproved by our board of directors in May 2017, we have agreed to pay GC Advisors an annual base management fee based on our average adjusted gross assets as well as an incentive fee based on our investment performance. Under an administration agreement, or the Administration Agreement, we are provided with certain administrative services by an administrator, or the Administrator, which is currently Golub Capital LLC.

Under the Administration Agreement, we have agreed to reimburse the Administrator for our allocable portion (subject to the review and approval of our independent directors) of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement.

We seek to create a portfolio that includes primarily senior secured and one stop loans by primarily investing approximately $5.0 million to $30.0 million of capital, on average, in the securities of U.S. middle-market companies. We may also selectively invest more than $30.0 million in some of our portfolio companies and generally expect that the size of our individual investments will vary proportionately with the size of our capital base.

We generally invest in securities that have been rated below investment grade by independent rating agencies or that would be rated below investment grade if they were rated. These securities, which may be referred to as “junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal. In addition, many of our debt investments have floating interest rates that reset on a periodic basis and typically do not fully pay down principal prior to maturity, which may increase our risk of losing part or all of our investment.


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As of June 30, 2017 and September 30, 2016, our portfolio at fair value was comprised of the following:
 
 
As of June 30, 2017
 
As of September 30, 2016
Investment Type
 
Investments at
 Fair Value
(In thousands)
 
Percentage of
Total
Investments
 
Investments at
 Fair Value
(In thousands)
 
Percentage of
Total
Investments
Senior secured
 
$
192,123

 
10.7
%
 
$
162,849

 
9.8
%
One stop
 
1,429,917

 
79.4

 
1,304,467

 
78.5

Second lien
 
9,434

 
0.5

 
27,909

 
1.7

Subordinated debt
 
58

 
0.0

*
1,427

 
0.1

Subordinated notes in SLF(1)(2)
 

 

 
77,301

 
4.7

LLC equity interests in SLF(2)
 
108,879

 
6.0

 
26,927

 
1.6

Equity
 
61,397

 
3.4

 
59,732

 
3.6

Total
 
$
1,801,808

 
100.0
%
 
$
1,660,612

 
100.0
%
 
*
Represents an amount less than 0.1%.
(1) 
On December 30, 2016, Senior Loan Fund LLC, or SLF, issued a capital call in an aggregate amount of $89.9 million the proceeds of which were used to redeem in full the outstanding balance on the subordinated notes previously issued by SLF and terminate all remaining subordinated note commitments.
(2) 
Proceeds from the subordinated notes and limited liability company, or LLC, equity interests invested in SLF were utilized by SLF to invest in senior secured loans.
One stop loans include loans to technology companies undergoing strong growth due to new services, increased adoption and/or entry into new markets. We refer to loans to these companies as late stage lending loans. Other targeted characteristics of late stage lending businesses include strong customer revenue retention rates, a diversified customer base and backing from growth equity or venture capital firms. In some cases, the borrower’s high revenue growth is supported by a high level of discretionary spending. As part of the underwriting of such loans and consistent with industry practice, we may adjust our characterization of the earnings of such borrowers for a reduction or elimination of such discretionary expenses, if appropriate. As of June 30, 2017 and September 30, 2016, one stop loans included $137.4 million and $128.4 million, respectively, of late stage lending loans at fair value.

As of June 30, 2017 and September 30, 2016, we had debt and equity investments in 188 and 183 portfolio companies, respectively, and an investment in SLF.

The weighted average annualized income yield and weighted average annualized investment income yield of our earning portfolio company investments, which represented nearly 100% of our debt investments, for the three and nine months ended June 30, 2017 and 2016 was as follows:

 
For the three months ended June 30,
 
For the nine months ended June 30,
  
2017
 
2016
 
2017
 
2016
Weighted average annualized income yield (1)(3)
7.9%
 
7.6%
 
7.8%
 
7.6%
Weighted average annualized investment income yield (2)(3)
8.7%
 
8.2%
 
8.4%
 
8.1%
 
(1) 
Represents income from interest, including subordinated notes in SLF, and fees excluding amortization of capitalized fees and discounts divided by the average fair value of earning portfolio company investments, and does not represent a return to any investor in us.
(2) 
Represents income from interest, including subordinated notes in SLF, fees and amortization of capitalized fees and discounts divided by the average fair value of earning portfolio investments, and does not represent a return to any investor in us.

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(3) 
For the three months ended June 30, 2017, weighted average annualized income yield and weighted average annualized investment income yield do not reflect interest income from subordinated notes in SLF, which were redeemed on December 30, 2016.
The total return, based on the change in the quoted market price of our stock and assuming distributions were reinvested in accordance with the dividend reinvestment plan, or DRIP, for the nine months ended June 30, 2017 and 2016, was 10.0% and 19.8%, respectively. The total return does not include sales load.

Revenues: We generate revenue in the form of interest and fee income on debt investments and capital gains and distributions, if any, on portfolio company investments that we originate or acquire. Our debt investments, whether in the form of senior secured, one stop, second lien or subordinated loans, typically have a term of three to seven years and bear interest at a fixed or floating rate. In some instances, we receive payments on our debt investments based on scheduled amortization of the outstanding balances. In addition, we receive repayments of some of our debt investments prior to their scheduled maturity date. The frequency or volume of these repayments fluctuates significantly from period to period. Our portfolio activity also reflects the proceeds of sales of securities. In some cases, our investments provide for deferred interest payments or payment-in-kind, or PIK, interest. The principal amount of loans and any accrued but unpaid interest generally become due at the maturity date. In addition, we may generate revenue in the form of commitment, origination, amendment, structuring or due diligence fees, fees for providing managerial assistance and consulting fees. Loan origination fees, original issue discount and market discount or premium are capitalized, and we accrete or amortize such amounts as interest income. We record prepayment premiums on loans as fee income. For additional details on revenues, see “Critical Accounting Policies-Revenue Recognition.”

We recognize realized gains or losses on investments based on the difference between the net proceeds from the disposition and the cost basis of the investment or derivative instrument, without regard to unrealized gains or losses previously recognized. We record current period changes in fair value of investments and derivative instruments that are measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investments in the consolidated statements of operations.

Expenses:  Our primary operating expenses include the payment of fees to GC Advisors under the Investment Advisory Agreement and interest expense on our outstanding debt. We bear all other out-of-pocket costs and expenses of our operations and transactions, including:

calculating our net asset value, or NAV (including the cost and expenses of any independent valuation firm);
fees and expenses incurred by GC Advisors payable to third parties, including agents, consultants or other advisors, in monitoring financial and legal affairs for us and in monitoring our investments and performing due diligence on our prospective portfolio companies or otherwise relating to, or associated with, evaluating and making investments, which fees and expenses may include, among other items, due diligence reports, appraisal reports, any studies that may be commissioned by GC Advisors and travel and lodging expenses;
expenses related to unsuccessful portfolio acquisition efforts;
offerings of our common stock and other securities;
administration fees and expenses, if any, payable under the Administration Agreement (including payments based upon our allocable portion of the Administrator’s overhead in performing its obligations under the Administration Agreement, including rent and the allocable portion of the cost of our chief compliance officer, chief financial officer and their respective staffs);
fees payable to third parties, including agents, consultants or other advisors, relating to, or associated with, evaluating and making investments in portfolio companies, including costs associated with meeting financial sponsors;
transfer agent, dividend agent and custodial fees and expenses;
U.S. federal and state registration and franchise fees;
all costs of registration and listing our shares on any securities exchange;
U.S. federal, state and local taxes;
independent directors’ fees and expenses;
costs of preparing and filing reports or other documents required by the SEC or other regulators;

74


costs of any reports, proxy statements or other notices to stockholders, including printing costs;
costs associated with individual or group stockholders;
costs associated with compliance under the Sarbanes-Oxley Act;
our allocable portion of any fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums;
direct costs and expenses of administration, including printing, mailing, long distance telephone, copying, secretarial and other staff, independent auditors and outside legal costs;
proxy voting expenses; and
all other expenses incurred by us or the Administrator in connection with administering our business.

We expect our general and administrative expenses to be relatively stable or decline as a percentage of total assets during periods of asset growth and to increase during periods of asset declines.

GC Advisors, as collateral manager for Golub Capital BDC 2010-1 LLC, or the 2010 Issuer, our indirect subsidiary, under a collateral management agreement, or the 2010 Collateral Management Agreement, is entitled to receive an annual fee in an amount equal to 0.35% of the principal balance of the portfolio loans held by the 2010 Issuer at the beginning of the collection period relating to each payment date, which is payable in arrears on each payment date. Under the 2010 Collateral Management Agreement, the term ‘‘collection period’’ refers to a quarterly period running from the day after the end of the prior collection period to the fifth business day of the calendar month in which a payment date occurs.

GC Advisors, as collateral manager for Golub Capital BDC CLO 2014 LLC, or the 2014 Issuer, our wholly-owned subsidiary, under a collateral management agreement, or the 2014 Collateral Management Agreement, is entitled to receive an annual fee in an amount equal to 0.25% of the principal balance of the portfolio loans held by the 2014 Issuer at the beginning of the collection period relating to each payment date, which is payable in arrears on each payment date. Under the 2014 Collateral Management Agreement, the term ‘‘collection period’’ refers to a quarterly period running from the day after the end of the prior collection period to the tenth business day prior to the payment date.

Collateral management fees are paid directly by the 2010 Issuer and the 2014 Issuer to GC Advisors and offset against the management fees payable under the Investment Advisory Agreement. In addition, the 2010 Issuer and 2014 Issuer paid Wells Fargo Securities, LLC structuring and placement fees for its services in connection with the initial structuring and subsequent amendments of a $350.0 million term debt securitization, or the 2010 Debt Securitization, and the initial structuring of a $402.6 million term debt securitization, or the 2014 Debt Securitization and, together with the 2010 Debt Securitization, the Debt Securitizations. The 2010 Issuer and 2014 Issuer also agreed to pay ongoing administrative expenses to the trustee, collateral manager, independent accountants, legal counsel, rating agencies and independent managers in connection with developing and maintaining reports, and providing required services in connection with the administration of the 2010 Debt Securitization and the 2014 Debt Securitization, or, collectively, the Debt Securitizations, as applicable.

We believe that these administrative expenses approximate the amount of ongoing fees and expenses that we would be required to pay in connection with a traditional secured credit facility. Our common stockholders indirectly bear all of these expenses.

Recent Developments

On July 5, 2017, we sold an additional 220,221 shares of our common stock pursuant to the underwriter's partial exercise of the option we granted in connection with our June 6, 2017 sale of 1,750,000 shares of common stock in an underwritten, public offering. Settlement of this partial exercise of the option resulted in net proceeds, after underwriting costs, of $4.1 million.

On July 28, 2017, Golub Capital BDC Funding LLC, or Funding, our wholly-owned subsidiary, entered into an amendment, or the Credit Facility Amendment, to the documents governing the senior secured revolving credit

75


facility, or, amended, the Credit Facility, with Golub Capital BDC Inc., as the transferor and servicer, certain institutional lenders, and Wells Fargo Bank, N.A., as the swingline lender, collateral agent, account bank, collateral custodian, and administrative agent. The Credit Facility Amendment is effective as of July 28, 2017. The Credit Facility Amendment, among other things, (a) extended the expiration of the reinvestment period from July 29, 2017 to September 27, 2017, during which period Funding, subject to certain conditions, may make borrowings under the facility and (b) extended the stated maturity date from July 30, 2020 to September 28, 2020. The size, interest rate and other material terms of the Credit Facility were unchanged.

On August 2, 2017, our board of directors declared a quarterly distribution of $0.32 per share payable on September 29, 2017 to holders of record as of September 6, 2017.

Consolidated Results of Operations

Consolidated operating results for the three and nine months ended June 30, 2017 and 2016 are as follows:
 
For the three months ended June 30,
 
Variances
 
For the nine months ended June 30,
 
Variances
  
2017
 
2016
 
2017 vs. 2016
 
2017
 
2016
 
2017 vs. 2016
  
(In thousands)
 
(In thousands)
Interest income
$
30,079

 
$
26,858

 
$
3,221

 
$
88,468

 
$
78,082

 
$
10,386

Income from accretion of discounts and origination fees
3,170

 
2,210

 
960

 
6,793

 
5,896

 
897

Interest and dividend income from investments in SLF (1)
891

 
2,867

 
(1,976
)
 
5,693

 
8,163

 
(2,470
)
Dividend income
278

 
111

 
167

 
438

 
393

 
45

Fee income
990

 
60

 
930

 
1,422

 
834

 
588

Total investment income
35,408

 
32,106

 
3,302

 
102,814

 
93,368

 
9,446

Total expenses
17,600

 
16,221

 
1,379

 
51,489

 
45,283

 
6,206

Net investment income - before excise tax
17,808

 
15,885

 
1,923

 
51,325

 
48,085

 
3,240

Excise tax

 

 

 
17

 
333

 
(316
)
Net investment income - after excise tax
17,808

 
15,885

 
1,923

 
51,308

 
47,752

 
3,556

Net realized gain (loss) on investments
(3,209
)
 
(5,416
)
 
2,207

 
(1,616
)
 
(260
)
 
(1,356
)
Net change in unrealized appreciation
   (depreciation) on investments, and
    secured borrowings
5,512

 
7,820

 
(2,308
)
 
10,143

 
5,613

 
4,530

Net increase in net assets resulting from operations
$
20,111

 
$
18,289

 
$
1,822

 
$
59,835

 
$
53,105

 
$
6,730

Average earning debt investments, at fair value (2)
$
1,579,961

 
$
1,439,936

 
$
140,025

 
$
1,546,012

 
$
1,395,699

 
$
150,313

Average investment in subordinated notes of SLF,
   at fair value

 
84,918

 
(84,918
)
 
25,760

 
82,919

 
(57,159
)
Average earning portfolio company
   investments, at fair value (2)
$
1,579,961

 
$
1,524,854

 
$
55,107

 
$
1,571,772

 
$
1,478,618

 
$
93,154

 
(1) 
The investments in SLF include our investments in both subordinated notes and LLC equity interests in SLF for the three and nine months ended June 30, 2016 and the nine months ended June 30, 2017.  For the three months ended June 30, 2017, the investments in SLF include our investment in LLC equity interests in SLF.
(2) 
Does not include our investment in LLC equity interests in SLF.

Net income can vary substantially from period to period for various reasons, including the recognition of realized gains and losses and unrealized appreciation and depreciation. As a result, quarterly comparisons of net income may not be meaningful.

Investment Income

Investment income increased from the three months ended June 30, 2016 to the three months ended June 30, 2017 by $3.3 million primarily as a result of an increase in the average earning debt investment balance, which is the

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average balance of accruing loans in our investment portfolio, excluding our investment in the subordinated notes of SLF, of $140.0 million and increases in prepayment fee income and accretion of discounts resulting from increased debt investment payoffs. These increases were partially offset by a decline in income from our investments in SLF that was attributable to a decline in the credit performance of SLF's portfolio.

Investment income increased from the nine months ended June 30, 2016 to the nine months ended June 30, 2017 by $9.4 million primarily as a result of an increase in the average earning debt investment balance in our investment portfolio of $150.3 million and increases in prepayment fee income and accretion of discounts resulting from increased debt investment payoffs. These increases were partially offset by a decline in income from our investments in SLF that was attributable to a decline in the credit performance of SLF's portfolio.

The annualized income yield by debt security type for the three and nine months ended June 30, 2017 and 2016 was as follows:
 
For the three months ended June 30,
 
For the nine months ended June 30,
  
2017
 
2016
 
2017
 
2016
Senior secured
6.4%
 
6.3%
 
6.3%
 
6.3%
One stop
8.0%
 
7.6%
 
7.9%
 
7.7%
Second lien
9.9%
 
10.1%
 
10.5%
 
9.7%
Subordinated debt
8.5%
 
4.8%
 
8.0%
 
5.1%
Subordinated notes in SLF(1)
N/A
 
8.5%
 
8.5%
 
8.4%
 
(1) 
SLF’s proceeds from the subordinated notes were utilized by SLF to invest in senior secured loans.
Annualized income yields on one stop and senior secured loans remained relatively stable for the three and nine months ended June 30, 2017 compared to the three and nine months ended June 30, 2016. Due to the limited number of second lien and subordinated debt investments, quarterly income yields on second lien and subordinated debt investments can be significantly impacted by the addition, subtraction or refinancing of one investment. The increase in the annualized income yield on second lien investments for the nine months ended June 30, 2017 was driven by a contractual rate change on one investment representing 50% of the second lien investments. This investment subsequently paid off during the three months ended June 30, 2017, which resulted in the decrease in the annualized income yield on second lien investments for the three months ended June 30, 2017. The increase in the annualized income yield on subordinated debt investments for the three and nine months ended June 30, 2017 was driven by the payoff on the lower yielding subordinated debt investment. As of June 30, 2017, we have one second lien investment and one subordinated debt investment as shown in the consolidated schedule of investments.

For additional details on investment yields and asset mix, refer to the “Liquidity and Capital Resources - Portfolio Composition, Investment Activity and Yield” section below.


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Expenses

The following table summarizes our expenses:

 
 
For the three months ended June 30,
 
Variances
 
For the nine months ended June 30,
 
Variances
  
 
2017
 
2016
 
2017 vs. 2016
 
2017
 
2016
 
2017 vs. 2016
  
 
(In thousands)
 
(In thousands)
Interest and other debt financing expenses
 
$
7,256

 
$
6,042

 
$
1,214

 
$
20,891

 
$
17,356

 
$
3,535

Amortization of debt issuance costs
 
843

 
977

 
(134
)
 
2,488

 
3,227

 
(739
)
Base management fee
 
6,059

 
5,567

 
492

 
17,744

 
16,286

 
1,458

Income Incentive Fee
 
1,485

 
1,750

 
(265
)
 
4,300

 
2,877

 
1,423

Capital gain incentive fee accrued under GAAP
 
588

 
561

 
27

 
1,974

 
1,385

 
589

Professional fees
 
638

 
692

 
(54
)
 
1,935

 
2,123

 
(188
)
Administrative service fee
 
595

 
531

 
64

 
1,720

 
1,643

 
77

General and administrative expenses
 
136

 
101

 
35

 
437

 
386

 
51

Total expenses
 
$
17,600

 
$
16,221

 
$
1,379

 
$
51,489

 
$
45,283

 
$
6,206

Average debt outstanding(1)
 
$
883,681

 
$
842,888

 
$
40,793

 
$
883,018

 
$
823,169

 
$
59,849


(1) 
For the three and nine months ended June 30, 2017 and 2016, we have excluded $0.4 million and $0.3 million, respectively, of secured borrowings, at fair value, which were the result of participations and partial loan sales that did not meet the definition of a “participating interest”, as defined in the guidance to Accounting Standards Codification, or ASC, Topic 860 — Transfers and Servicing, or ASC Topic 860.
Interest Expense

Interest and other debt financing expenses increased by $1.2 million from the three months ended June 30, 2016 to the three months ended June 30, 2017 primarily due to an increase in the weighted average of outstanding borrowings from $842.9 million for the three months ended June 30, 2016 to $883.7 million for the three months ended June 30, 2017 and an increase in the average London Interbank Offered Rate, or LIBOR, which is the index that determines the interest rate on our floating rate liabilities. The increase in our debt was primarily driven by an increase in our use of debt under our United States Small Business Administration, or SBA, debentures through our small business investment companies, or SBICs, which had outstanding balances of $288.0 million as of June 30, 2017 and $255.0 million as of June 30, 2016. This was partially offset by our Credit Facility which decreased to an outstanding balance of $144.4 million as of June 30, 2017 from an outstanding balance of $146.1 million as of June 30, 2016. The effective annualized average interest rate on our outstanding debt increased to 3.7% for the three months ended June 30, 2017 from 3.3% for the three months ended June 30, 2016 primarily due to the increase in LIBOR.

Interest and other debt financing expenses increased by $3.5 million from the nine months ended June 30, 2016 to the nine months ended June 30, 2017 primarily due to an increase in the weighted average of outstanding borrowings from $823.2 million for the nine months ended June 30, 2016 to $883.0 million for the nine months ended June 30, 2017. The effective annualized average interest rate on our outstanding debt increased to 3.5% for the nine months ended June 30, 2017 from 3.3% for the nine months ended June 30, 2016 primarily due to the increase in LIBOR.

Management Fee

The base management fee increased as a result of a sequential increase in average assets from June 30, 2016 to June 30, 2017.


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Incentive Fees

The incentive fee payable under the Investment Advisory Agreement consists of two parts: (1) the income component, or the Income Incentive Fee, and (2) the capital gains component, or the Capital Gain Incentive Fee. The Income Incentive Fee decreased by $0.3 million from the three months ended June 30, 2016 to the three months ended June 30, 2017 primarily as a result of the increase in the interest and debt financing expenses and the decline in income from our investment in SLF. This resulted in a decline in the rate of return on the value of our net assets and for the three months ended June 30, 2017. For the three months ended June 30, 2017, while still not fully through the catch-up provision of the Income Incentive Fee calculation, the Income Incentive Fee as a percentage of Pre-Incentive Fee Net Investment Income (as defined below) decreased to 7.5% compared to 9.6% for the three months ended June 30, 2016. The Income Incentive Fee increased by $1.4 million from the nine months ended June 30, 2016 to the nine months ended June 30, 2017 primarily as a result of the $150.3 million increases in our average earning debt investment balances that resulted in an increase in our Pre-Incentive Fee Net Investment Income. For the nine months ended June 30, 2017, while still not fully through the catch-up provision of the Income Incentive Fee calculation in any quarter, the Income Incentive Fee as a percentage of Pre-Incentive Fee Net Investment Income increased to 7.5% compared to 5.5% for the nine months ended June 30, 2016. “Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that we receive from portfolio companies, but excluding fees for providing managerial assistance) accrued during the calendar quarter, minus operating expenses for the calendar quarter (including the base management fee, taxes, any expenses payable under the Investment Advisory Agreement and the Administration Agreement, any expenses of securitizations and any interest expense and dividends paid on any outstanding preferred stock, but excluding the incentive fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature such as market discount, debt instruments with PIK interest, preferred stock with PIK dividends and zero coupon securities, accrued income that we have not yet received in cash.

The Capital Gain Incentive Fee payable as calculated under the Investment Advisory Agreement for each of the three and nine months ended June 30, 2017 and 2016 was $0. However, in accordance with generally accepted accounting principles in the United States of America, or GAAP, we are required to include the aggregate unrealized capital appreciation on investments in the calculation and accrue a capital gain incentive fee as if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Advisory Agreement.

The accrual for capital gain incentive fee under GAAP was $0.6 million, or $0.01 per share, and $2.0 million, or $0.04 per share, for the three and nine months ended June 30, 2017, respectively. We recorded an accrual for capital gain incentive fee under GAAP of $0.6 million, or $0.01 per share, and recorded an accrual of $1.4 million, or $0.03 per share, for the three and nine months ended June 30, 2016, respectively. The increase in the accrual for capital gain incentive fee under GAAP for the nine months ended June 30, 2017 from the nine months ended June 30, 2016 was primarily the result of increased unrealized appreciation on portfolio company investments. For additional details on unrealized appreciation and depreciation of investments, refer to the “Net Realized and Unrealized Gains and Losses” section below.

Professional Fees, Administrative Service Fee, and General and Administrative Expenses

In total, professional fees, the administrative service fee, and general and administrative expenses increased from the three months ended June 30, 2016 to the three months ended June 30, 2017 by an amount less than $0.1 million and decreased by $0.1 million from the nine months ended June 30, 2016 to the nine months ended June 30, 2017. In general, we expect certain of our operating expenses, including professional fees, the administrative service fee, and other general and administrative expenses to decline as a percentage of our total assets during periods of growth and increase as a percentage of our total assets during periods of asset declines.

The Administrator pays for certain expenses incurred by us. These expenses are subsequently reimbursed in cash. Total expenses reimbursed by us to the Administrator for the three and nine months ended June 30, 2017 were $0.4

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million and $1.7 million, respectively. Total expenses reimbursed by us to the Administrator for the three and nine months ended June 30, 2016 were $0.7 million and $2.1 million, respectively.

As of June 30, 2017 and September 30, 2016, included in accounts payable and accrued expenses were $0.5 million and $0.6 million, respectively, for accrued expenses paid on behalf of us by the Administrator.

Excise Tax Expense

We have elected to be treated as a RIC under Subchapter M of the Code and operate in a manner so as to qualify for the tax treatment applicable to RICs. In order to be subject to tax as a RIC, we are required to meet certain source of income and asset diversification requirements, as well as timely distribute to our stockholders dividends for U.S. federal income tax purposes of an amount generally at least equal to 90% of investment company taxable income, as defined by the Code, and determined without regard to any deduction for dividends paid for each tax year. We have made and intend to continue to make the requisite distributions to our stockholders that will generally relieve us from U.S. federal income taxes.

Depending on the level of taxable income earned in a tax year, we may choose to retain taxable income in excess of current year distributions into the next tax year in an amount less than what would trigger payments of U.S. federal income tax under Subchapter M of the Code. We may then be required to incur a 4% excise tax on such income. To the extent that we determine that our estimated current year annual taxable income may exceed estimated current year distributions, we accrue excise tax, if any, on estimated excess taxable income as taxable income is earned. For the three and nine months ended June 30, 2017, we incurred a net expense of $0 and $17,000, respectively, for U.S. federal excise tax. For the three and nine months ended June 30, 2016, we incurred a net expense of $0 and $333,000, respectively, for U.S. federal excise tax.

Net Realized and Unrealized Gains and Losses

The following table summarizes our net realized and unrealized gains (losses) for the periods presented:
 
For the three months ended June 30,
 
Variances
 
For the nine months ended June 30,
 
Variances
  
2017
 
2016
 
2017 vs. 2016
 
2017
 
2016
 
2017 vs. 2016
  
(In thousands)
 
(In thousands)
Net realized gain (loss) on investments
$
(3,209
)
 
$
(5,416
)
 
$
2,207

 
$
(1,616
)
 
$
(260
)
 
$
(1,356
)
Net realized gain (loss)
(3,209
)
 
(5,416
)
 
2,207

 
(1,616
)
 
(260
)
 
(1,356
)
Unrealized appreciation on investments
19,206

 
17,257

 
1,949

 
28,465

 
33,855

 
(5,390
)
Unrealized (depreciation) on investments
(13,793
)
 
(10,256
)
 
(3,537
)
 
(18,494
)
 
(26,704
)
 
8,210

Unrealized appreciation on investments in SLF(1)
99

 
818

 
(719
)
 
171

 

 
171

Unrealized (depreciation) on investments in SLF(2)

 

 

 

 
(1,539
)
 
1,539

Unrealized appreciation on secured borrowings

 
1

 
(1
)
 
1

 
1

 

Net change in unrealized appreciation (depreciation) on
   investments, investments in SLF, and secured
   borrowings
$
5,512

 
$
7,820

 
$
(2,308
)
 
$
10,143

 
$
5,613

 
$
4,530

 
(1) 
Unrealized appreciation on investments in SLF includes our investment in LLC equity interests in SLF.
(2) 
Unrealized (depreciation) on investments in SLF includes our investments in subordinated notes and LLC interests in SLF.
For the three months ended June 30, 2017, we had a net realized loss of $3.2 million primarily due to the sale of a debt and equity investment in a single portfolio company, which was partially offset by the gain on the sale of five equity investments. For the nine months ended June 30, 2017, we had a net realized loss of $1.6 million primarily due to the sale of a debt and equity investment in a single portfolio company, which was partially offset by the net realized gains on the sale of portfolio company investments to SLF and the sale of eight equity investments.

For the three months ended June 30, 2017, we had $19.2 million in unrealized appreciation on 118 portfolio company investments, which was partially offset by $13.8 million in unrealized depreciation on 154 portfolio

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company investments. For the nine months ended June 30, 2017, we had $28.5 million in unrealized appreciation on 144 portfolio company investments, which was partially offset by $18.5 million in unrealized depreciation on 147 portfolio company investments. Unrealized appreciation during the three and nine months ended June 30, 2017 resulted from an increase in fair value primarily due to the rise in market prices of portfolio company investments. Unrealized depreciation primarily resulted from the amortization of discounts, negative credit related adjustments that caused a reduction in fair value and the reversal of the net unrealized appreciation associated with the sales of portfolio company investments during the three and nine months ended June 30, 2017.

For the three and nine months ended June 30, 2017, we had $0.1 million and $0.2 million, respectively, in unrealized appreciation on our investment in SLF LLC equity interests, which was primarily driven by stable net investment income that was partially offset by net negative credit related adjustments associated with SLF's investment portfolio.

For the three months ended June 30, 2016, we had a net realized loss of $5.4 million primarily due to the realized loss on the sale of one non-accrual portfolio company investment that was partially offset by the sale of equity and debt investments. For the nine months ended June 30, 2016, we had a net realized loss of $0.3 million primarily due to the realized loss on the sale of one non-accrual portfolio company investment and the write off of one non-accrual portfolio company investment that were partially offset by the sale of, or capital gain distributions received from, five equity investments.

During the three months ended June 30, 2016, we had $17.3 million in unrealized appreciation on 114 portfolio company investments, which was offset by $10.3 million in unrealized depreciation on 143 portfolio company investments. For the nine months ended June 30, 2016, we had $33.9 million in unrealized appreciation on 135 portfolio company investments, which was offset by $26.7 million in unrealized depreciation on 138 portfolio company investments. Unrealized appreciation during the three and nine months ended June 30, 2016 resulted from an increase in fair value primarily due to the rise in market prices of portfolio company investments and the reversal of prior period unrealized depreciation associated with the non-accrual portfolio company investments that were sold and written-off. Unrealized depreciation primarily resulted from the amortization of discounts, negative credit related adjustments that caused a reduction in fair value and the reversal of the net unrealized appreciation associated with the sales of portfolio company investments during the three and nine months ended June 30, 2016.

For the three months ended June 30, 2016, we had $0.8 million in unrealized appreciation on our investment in SLF LLC equity interests and an amount less than $0.1 million in unrealized appreciation on our investment in SLF subordinated notes. The unrealized appreciation on the SLF LLC equity interests was driven by positive credit related adjustments associated with SLF’s investment portfolio.

For the nine months ended June 30, 2016, we had $0.7 million of unrealized depreciation on our investment in SLF LLC equity interests and $0.8 million of unrealized depreciation on our investment in SLF subordinated notes. The unrealized depreciation on the SLF subordinated notes was the result of the lower yielding contractual rate compared to comparable market pricing of subordinated notes. The unrealized depreciation on the SLF LLC equity interests was driven by negative credit related adjustments associated with SLF’s investment portfolio which was partially offset by the offsetting impact of the pricing on the subordinated notes.

Liquidity and Capital Resources

For the nine months ended June 30, 2017, we experienced a net increase in cash and cash equivalents of $1.9 million. During the period, cash used in operating activities was $70.7 million, primarily as a result of fundings of portfolio investments of $461.8 million, partially offset by the proceeds from principal payments and sales of portfolio investments of $336.5 million and net investment income of $51.3 million. During the same period, cash provided by investment activities of $45.6 million was primarily driven by the decrease in restricted cash and cash equivalents. Lastly, cash provided by financing activities was $27.0 million, primarily driven by borrowings on debt of $419.4 million and proceeds from shares sold of $69.9 million that were partially offset by repayments of debt of $400.7 million and distributions paid of $59.9 million.

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For the nine months ended June 30, 2016, we experienced a net decrease in cash and cash equivalents of $2.3 million. During the period, cash used in operating activities was $38.7 million primarily as a result of funding of portfolio investments of $471.5 million. This was partially offset by the proceeds from principal payments and sales of portfolio investments of $387.3 million and net investment income of $47.8 million. During the same period, cash provided by investment activities of $33.3 million was driven by the decrease in restricted cash and cash equivalents. Lastly, cash provided by financing activities was $3.1 million, primarily driven by borrowings on debt of $288.1 million that were partially offset by repayments of debt of $239.1 million and distributions paid of $44.0 million.

As of June 30, 2017 and September 30, 2016, we had cash and cash equivalents of $12.8 million and $10.9 million, respectively. In addition, we had restricted cash and cash equivalents of $33.0 million and $78.6 million as of June 30, 2017 and September 30, 2016, respectively. Cash and cash equivalents are available to fund new investments, pay operating expenses and pay distributions. As of June 30, 2017, $21.4 million of our restricted cash and cash equivalents could be used to fund new investments that meet the investment guidelines established in the Debt Securitizations, which are described in further detail in Note 7 to our consolidated financial statements, and for the payment of interest expense on the notes issued in the Debt Securitizations. As of June 30, 2017 $4.1 million of our restricted cash and cash equivalents could be used to fund investments that meet the guidelines under the Credit Facility as well as for the payment of interest expense and revolving debt of the Credit Facility. As of June 30, 2017, $7.5 million of our restricted cash and cash equivalents could be used to fund new investments that meet the regulatory and investment guidelines established by the SBA for our SBICs, which are described in further detail in Note 7 to our consolidated financial statements, and for interest expense and fees on our outstanding SBA debentures.

As of June 30, 2017, the Credit Facility allowed Funding to borrow up to $225.0 million at any one time outstanding, subject to leverage and borrowing base restrictions. As of June 30, 2017 and September 30, 2016, we had $144.4 million and $126.7 million outstanding under the Credit Facility, respectively. As of June 30, 2017 and September 30, 2016, subject to leverage and borrowing base restrictions, we had approximately $80.6 million and $73.3 million, respectively, of remaining commitments and $35.9 million and $30.8 million, respectively, of availability on the Credit Facility.

On June 22, 2016, we entered into an unsecured revolving credit facility with GC Advisors, or the Adviser Revolver, which permitted us to borrow up to $20.0 million at any one time outstanding. We entered into the Adviser Revolver in order to have the ability to borrow funds on a short-term basis and have in the past repaid, and generally intend in the future to repay, borrowings under the Adviser Revolver within the same quarter in which they are drawn. As of June 30, 2017 and September 30, 2016, we had no amounts outstanding on the Adviser Revolver.

On October 21, 2015, we terminated the $15.0 million revolving line of credit, or the Revolver, entered into by Golub Capital BDC Revolver Funding LLC, or Revolver Funding, our wholly-owned subsidiary, with PrivateBank and Trust Company. There were no borrowings outstanding on the Revolver at the time of termination and Revolver Funding was released of all obligations under the Revolver and all liens on the assets held by Revolver Funding collateralizing the Revolver were released.

On July 16, 2010, we completed the 2010 Debt Securitization, which was subsequently increased to $350.0 million. On October 20, 2016, we further amended the 2010 Debt Securitization to, among other things, (a) refinance the issued Class A notes issued by the 2010 Issuer, or the 2010 Notes, by redeeming in full the $203.0 million Class A 2010 Notes and issuing new Class A-Refi 2010 Notes in an aggregate principal amount of $205.0 million that bear interest at a rate of three-month LIBOR plus 1.90%, (b) refinance the Class B 2010 Notes by redeeming in full the $12.0 million Class B 2010 Notes and issuing new Class B-Refi 2010 Notes in an aggregate principal amount of $10.0 million that bear interest at a rate of three-month LIBOR plus 2.40%, and (c) extend the reinvestment period applicable to the 2010 Issuer to July 20, 2018. Following the refinancing, Golub Capital BDC 2010-1 Holdings LLC, our wholly-owned subsidiary, or Holdings, retained the Class B-Refi 2010 Notes.

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As of June 30, 2017, the 2010 Notes consisted of $205.0 million of Class A-Refi 2010 Notes, which bear interest at a rate of three-month LIBOR plus 1.90%, $10.0 million of Class B-Refi 2010 Notes, which bear interest at a rate of three-month LIBOR plus 2.40%, and $135.0 million face amount of Subordinated 2010 Notes that do not bear interest. The Class A-Refi 2010 Notes are included in the June 30, 2017 consolidated statement of financial condition as our debt of and the Class B-Refi 2010 Notes and Subordinated 2010 Notes were eliminated in consolidation. As of September 30, 2016, the 2010 Notes consisted of $203.0 million of Class A 2010 Notes, which bore interest at a rate of three-month LIBOR plus 1.74%, $12.0 million of Class B 2010 Notes, which bore interest at a rate of three-month LIBOR plus 2.40%, and $135.0 million face amount of Subordinated 2010 Notes that do not bear interest. The Class A and Class B 2010 Notes are included in the September 30, 2016 consolidated statement of financial condition as our debt of and the Subordinated 2010 Notes were eliminated in consolidation. As of June 30, 2017 and September 30, 2016, we had outstanding debt under the 2010 Debt Securitization of $205.0 million and $215.0 million, respectively.

On June 5, 2014, we completed the 2014 Debt Securitization in which the 2014 Issuer issued an aggregate of $402.6 million of notes, or the 2014 Notes, including $191.0 million of Class A-1 2014 Notes, which bear interest at a rate of three-month LIBOR plus 1.75%, $20.0 million of Class A-2 2014 Notes, which bear interest at a rate of three-month LIBOR plus 1.95%, $35.0 million of Class B 2014 Notes, which bear interest at a rate of three-month LIBOR plus 2.50%, $37.5 million of Class C 2014 Notes, which bear interest at a rate of three-month LIBOR plus 3.50%, and $119.1 million of LLC equity interests in the 2014 Issuer that do not bear interest. We retained all of the Class C 2014 Notes and LLC equity interests in the 2014 Issuer totaling $37.5 million and $119.1 million, respectively. The Class A-1, Class A-2 and Class B 2014 Notes are included in the June 30, 2017 and September 30, 2016 consolidated statements of financial condition as our debt and the Class C 2014 Notes and LLC equity interests in the 2014 Issuer were eliminated in consolidation. As of June 30, 2017 and September 30, 2016, we had outstanding debt under the 2014 Debt Securitization of $246.0 million.

On January 10, 2017, we received approval for our third SBIC license, GC SBIC VI, L.P., or GC SBIC VI.  Under present SBIC regulations, the maximum amount of SBA-guaranteed debentures that may be issued by multiple licensees under common management is $350.0 million and the maximum amount that a single SBIC licensee may issue is $150.0 million. As of June 30, 2017, GC SBIC IV, L.P., or SBIC IV, GC SBIC V, L.P., or SBIC V, and GC SBIC VI, L.P., or SBIC VI, had $150.0 million, $133.0 million, and $5.0 million, respectively, of outstanding SBA-guaranteed debentures that mature between March 2021 and September 2027 leaving incremental borrowing capacity of $17.0 million and $45.0 million for SBIC V and SBIC VI, respectively, under present SBIC regulations. As of September 30, 2016, SBIC IV and SBIC V had $150.0 million and $127.0 million, respectively, of outstanding SBA-guaranteed debentures that mature between March 2021 and September 2026.

On March 21, 2017, we priced a public offering of 1,750,000 shares of our common stock at a public offering price of $19.03 per share, raising approximately $33.3 million in gross proceeds. On March 24, 2017, the transaction closed, the shares were issued and proceeds, net of offering costs but before expenses, of $32.3 million were received. On April 6, 2017, we sold an additional 262,500 shares of our common stock at a public offering price of $19.03 per share pursuant to the underwriter's exercise of the option granted in connection with the March 2017 offering.

On June 6, 2017, we entered into an agreement to sell 1,750,000 shares of our common stock pursuant to an underwritten, public offering at a price to us of $18.71 per share. On June 12, 2017, the transaction closed, the shares were issued and proceeds, net of offering costs but before expenses, of $32.7 million were received. On July 5, 2017, we sold an additional 220,221 shares of our common stock pursuant to the underwriter's partial exercise of the option we granted in connection with the sale of shares in June 2017.

In accordance with the 1940 Act, with certain limited exceptions, we are only allowed to borrow amounts such that our asset coverage, as defined in the 1940 Act, is at least 200% after such borrowing. On September 13, 2011, we received exemptive relief from the SEC allowing us to modify the asset coverage requirement to exclude the SBA debentures from this calculation. As such, our ratio of total consolidated assets to outstanding indebtedness may be less than 200%. This provides us with increased investment flexibility but also increases our risks related to

83


leverage. As of June 30, 2017, our asset coverage for borrowed amounts was 258.4% (excluding the SBA debentures).

As of June 30, 2017 and September 30, 2016, we had outstanding commitments to fund investments, excluding our investments in SLF, totaling $70.4 million and $81.4 million, respectively. These amounts may or may not be funded to the borrowing party now or in the future. The unfunded commitments relate to loans with various maturity dates, but the entire amount was eligible for funding to the borrowers, subject to the terms of each loan’s respective credit agreement. As of June 30, 2017, we believe that we had sufficient assets and liquidity to adequately cover future obligations under our unfunded commitments based on historical rates of drawings upon unfunded commitments, cash and restricted cash balances that we maintain, availability under our Credit Facility and Adviser Revolver and ongoing principal repayments on debt investments. In addition, we generally hold some syndicated loans in larger portfolio companies that are saleable over a relatively short period to generate cash.

Although we expect to fund the growth of our investment portfolio through the net proceeds from future securities offerings and through our DRIP as well as future borrowings, to the extent permitted by the 1940 Act, we cannot assure you that our efforts to raise capital will be successful. In addition to capital not being available, it also may not be available on favorable terms. To the extent we are not able to raise capital on what we believe are favorable terms, we will focus on optimizing returns by investing capital generated from repayments into new investments we believe are attractive from a risk/reward perspective. Furthermore, to the extent we are not able to raise capital and are at or near our targeted leverage ratios, we may receive smaller allocations, if any, on new investment opportunities under GC Advisors’ allocation policy and have, in the past, received such smaller allocations under similar circumstances.

Portfolio Composition, Investment Activity and Yield

As of June 30, 2017 and September 30, 2016, we had investments in 188 and 183 portfolio companies, respectively, with a total fair value of $1,692.9 million and $1,556.4 million, respectively, and had investments in SLF with a total fair value of $108.9 million and $104.2 million, respectively.

The following table shows the asset mix of our new investment commitments for the three and nine months ended June 30, 2017 and 2016:

 
For the three months ended June 30,
 
For the nine months ended June 30,
 
  
2017
 
2016
 
2017
 
2016
 
  
(In thousands)
 
Percentage of
Commitments
 
(In thousands)
 
Percentage of
Commitments
 
(In thousands)
 
Percentage of
Commitments
 
(In thousands)
 
Percentage of
Commitments
 
Senior secured
$
27,678

 
11.5
%
 
$
27,257

 
17.5
%
 
$
111,015

 
23.6
%
 
$
99,420

 
20.8
%
 
One stop
212,465

 
87.8

 
126,245

 
80.9

 
338,457

 
71.9

 
352,666

 
73.9

 
Subordinated debt

 

 
42

 
0.0

*
12

 
0.0

*
42

 
0.0

*
Subordinated notes in SLF(1)

 

 

 

 
5,457

 
1.1

 
9,620

 
2.0

 
LLC equity interests in SLF(1)

 

 

 

 
12,542

 
2.7

 
10,820

 
2.3

 
Equity
1,795

 
0.7

 
2,421

 
1.6

 
3,162

 
0.7

 
4,529

 
1.0

 
Total new investment commitments
$
241,938

 
100.0
%
 
$
155,965

 
100.0
%
 
$
470,645

 
100.0
%
 
$
477,097

 
100.0
%
 
 
* Represents an amount less than 0.1%.
(1) 
SLF’s proceeds from the subordinated notes and LLC equity interests were utilized by SLF to invest in senior secured loans. As of June 30, 2017, SLF had investments in senior secured loans to 52 different borrowers.
For the three and nine months ended June 30, 2017, we had approximately $156.0 million and $241.0 million, excluding $78.7 million of proceeds from the repayment in full and termination of our investment in subordinated notes of SLF, respectively, in proceeds from principal payments and return of capital distributions of portfolio companies. For the three and nine months ended June 30, 2017, we had sales of investments in 9 and 28 portfolio companies, respectively, aggregating approximately $13.4 million and $95.5 million, respectively, in net proceeds.

84



For the three and nine months ended June 30, 2016, we had approximately $106.2 million and $239.0 million, respectively, in proceeds from principal payments and return of capital distributions of portfolio companies. For the three and nine months ended June 30, 2016, we had sales of investments in 6 and 28 portfolio companies, respectively, aggregating approximately $33.2 million and $148.1 million, respectively, in net proceeds.

The following table shows the principal, amortized cost and fair value of our portfolio of investments by asset class:
 
As of June 30, 2017 (1)
 
As of September 30, 2016 (1)
  
Principal
 
Amortized
Cost
 
Fair
Value
 
Principal
 
Amortized
Cost
 
Fair
Value
  
(In thousands)
Senior secured:
  

 
  

 
  

 
  

 
  

 
  

Performing
$
193,153

 
$
191,217

 
$
192,183

 
$
163,380

 
$
161,536

 
$
162,693

Non-accrual (2)
1,438

 
1,433

 
(60
)
(3) 
1,438

 
1,433

 
156

One stop:
  

 
  

 
  

 
  

 
  

 
  

Performing
1,434,599

 
1,415,819

 
1,426,450

 
1,317,595

 
1,299,211

 
1,303,297

Non-accrual (2)
8,870

 
8,788

 
3,467

 
3,899

 
3,845

 
1,170

Second lien:
  

 
  

 
  

 
  

 
  

 
  

Performing
9,434

 
9,298

 
9,434

 
27,909

 
27,579

 
27,909

Non-accrual (2)

 

 

 

 

 

Subordinated debt:
  

 
  

 
  

 
  

 
  

 
  

Performing
58

 
58

 
58

 
1,750

 
1,750

 
1,427

Non-accrual (2)

 

 

 

 

 

Subordinated notes in SLF (4)(5)
  

 
  

 
  

 
  

 
  

 
  

Performing

 

 

 
77,301

 
77,301

 
77,301

Non-accrual (2)

 

 

 

 

 

LLC equity interests in SLF (4)(5)
N/A

 
113,120

 
108,879

 
N/A

 
31,339

 
26,927

Equity
N/A

 
41,494

 
61,397

 
N/A

 
46,179

 
59,732

Total
$
1,647,552

 
$
1,781,227

 
$
1,801,808

 
$
1,593,272

 
$
1,650,173

 
$
1,660,612

 
(1) 
17 and 14 of our loans included a feature permitting a portion of the interest due on such loan to be PIK interest as of June 30, 2017 and September 30, 2016, respectively.
(2) 
We refer to a loan as non-accrual when we cease recognizing interest income on the loan because we have stopped pursuing repayment of the loan or, in certain circumstances, it is past due 90 days or more on principal and interest or our management has reasonable doubt that principal or interest will be collected. See “— Critical Accounting Policies — Revenue Recognition.”
(3) 
The negative fair value is the result of the unfunded commitment being valued below par.
(4) 
On December 30, 2016, SLF issued a capital call in an aggregate amount of $89.9 million the proceeds of which were used to redeem in full the outstanding balance on the subordinated notes previously issued by SLF and terminate all remaining subordinated note commitments.
(5) 
SLF's proceeds from the subordinated notes and LLC equity interest in SLF were utilized by SLF to invest in senior secured loans.
As of June 30, 2017 and September 30, 2016, the fair value of our debt investments as a percentage of the outstanding principal value was 99.0% and 98.8%, respectively.


85


The following table shows the weighted average rate, spread over LIBOR of floating rate and fees of investments originated and the weighted average rate of sales and payoffs of portfolio companies during the three and nine months ended June 30, 2017 and 2016:
 
For the three months ended June 30,
 
For the nine months ended June 30,
  
2017
 
2016
 
2017
 
2016
Weighted average rate of new investment fundings(1)
7.3%
 
7.2%
 
7.0%
 
7.0%
Weighted average spread over LIBOR of new floating rate investment fundings(1)
6.0%
 
6.2%
 
5.9%
 
6.0%
Weighted average rate of new fixed rate investment fundings
7.5%
 
10.6%
 
7.5%
 
10.6%
Weighted average fees of new investment fundings
1.6%
 
2.1%
 
1.5%
 
1.8%
Weighted average rate of sales and payoffs of portfolio investments(1)(2)
7.9%
 
6.8%
 
7.3%
 
7.1%
Weighted average annualized income yield (3)(4)
7.9%
 
7.6%
 
7.8%
 
7.6%
 
(1) 
Excludes subordinated note investments in SLF.
(2) 
Excludes exits on investments on non-accrual status.
(3) 
Represents income from interest, including subordinated notes in SLF, and fees excluding amortization of capitalized fees and discounts divided by the average fair value of earning debt investments, and does not represent a return to any investor in us.
(4) 
For the three months ended June 30, 2017, weighted average annualized income yield does not reflect interest income from subordinated notes in SLF, which were redeemed on December 30, 2016.
As of June 30, 2017, 99.6% and 99.6% of our debt portfolio at fair value and at amortized cost, respectively, had interest rate floors that limit the minimum applicable interest rates on such loans. As of September 30, 2016, 93.3% and 93.6% of our debt portfolio, including our investment in SLF subordinated notes which were not subject to an interest rate floor, at fair value and at amortized cost, respectively, had interest rate floors that limit the minimum applicable interest rates on such loans.
As of June 30, 2017, the portfolio median earnings before interest, taxes, depreciation and amortization, or EBITDA, for our portfolio companies (excluding SLF) was $26.4 million. The portfolio median EBITDA is based on the most recently reported trailing twelve-month EBITDA received from the portfolio company.


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As part of the monitoring process, GC Advisors regularly assesses the risk profile of each of our investments and rates each of them based on an internal system developed by Golub Capital and its affiliates. This system is not generally accepted in our industry or used by our competitors. It is based on the following categories, which we refer to as GC Advisors’ internal performance ratings:
 
 
 
Internal Performance Ratings
Rating
 
Definition
5
 
Involves the least amount of risk in our portfolio. The borrower is performing above expectations, and the trends and risk factors are generally favorable.
4
 
Involves an acceptable level of risk that is similar to the risk at the time of origination. The borrower is generally performing as expected, and the risk factors are neutral to favorable.
3
 
Involves a borrower performing below expectations and indicates that the loan’s risk has increased somewhat since origination. The borrower may be out of compliance with debt covenants; however, loan payments are generally not past due.
2
 
Involves a borrower performing materially below expectations and indicates that the loan’s risk has increased materially since origination. In addition to the borrower being generally out of compliance with debt covenants, loan payments may be past due (but generally not more than 180 days past due).
1
 
Involves a borrower performing substantially below expectations and indicates that the loan’s risk has substantially increased since origination. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. Loans rated 1 are not anticipated to be repaid in full and we will reduce the fair market value of the loan to the amount we anticipate will be recovered.

Our internal performance ratings do not constitute any rating of investments by a nationally recognized statistical rating organization or represent or reflect any third-party assessment of any of our investments.

For any investment rated 1, 2 or 3, GC Advisors will increase its monitoring intensity and prepare regular updates for the investment committee, summarizing current operating results and material impending events and suggesting recommended actions.

GC Advisors monitors and, when appropriate, changes the internal performance ratings assigned to each investment in our portfolio. In connection with our valuation process, GC Advisors and our board of directors review these internal performance ratings on a quarterly basis.

The following table shows the distribution of our investments on the 1 to 5 internal performance rating scale at fair value as of June 30, 2017 and September 30, 2016:
 
 
 
June 30, 2017
 
September 30, 2016
Internal
Performance
Rating
 
Investments
at Fair Value
(In thousands)
 
Percentage of
Total
Investments
 
 
Investments
at Fair Value
(In thousands)
 
Percentage of
Total
Investments
 
5
 
$
212,063

 
11.8
 
$
93,768

 
5.7
4
 
1,377,526

 
76.5
 
 
1,380,274

 
83.1
 
3
 
209,231

 
11.6
 
 
176,464

 
10.6
 
2
 
240

 
0.0
 
9,950

 
0.6
 
1
 
2,748

 
0.1
 
 
156

 
0.0
Total
 
$
1,801,808

 
100.0
 
$
1,660,612

 
100.0
*
Represents an amount less than 0.1%.


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Senior Loan Fund LLC

We co-invest with RGA Reinsurance Company, or RGA, in senior secured loans through SLF, an unconsolidated Delaware LLC. SLF is capitalized as transactions are completed and all portfolio and investment decisions in respect to SLF must be approved by the SLF investment committee consisting of two representatives of each of us and RGA (with unanimous approval required from (i) one representative of each of us and RGA or (ii) both representatives of each of us and RGA). SLF may cease making new investments upon notification of either member but operations will continue until all investments have been sold or paid-off in the normal course of business.

As of June 30, 2017, SLF is capitalized from LLC equity interest subscriptions from its members. On December 14, 2016, the SLF investment committee approved the recapitalization of the commitments of SLF’s members. On December 30, 2016, SLF’s members entered into additional LLC equity interest subscriptions totaling $160.0 million, SLF issued capital calls totaling $89.9 million to us and RGA and the subordinated notes previously issued by SLF were redeemed and terminated. As of June 30, 2017 and September 30, 2016, we and RGA owned 87.5% and 12.5%, respectively, of the LLC equity interests. SLF’s profits and losses are allocated to us and RGA in accordance with our respective ownership interests. As of September 30, 2016, we and RGA owned 87.5% and 12.5%, respectively, of the outstanding subordinated notes issued by SLF.

As of June 30, 2017 and September 30, 2016, SLF had the following commitments from its members:
 
As of June 30, 2017
 
As of September 30, 2016
  
Committed
 
Funded(1)
 
Committed
 
Funded(1)(2)
  
(Dollars in thousands)
Subordinated note commitments (3)
$

 
$

 
$
160,000

 
$
88,344

LLC equity commitments (3)
200,000

 
129,280

 
40,000

 
35,816

Total
$
200,000

 
$
129,280

 
$
200,000

 
$
124,160

 
(1) 
Funded LLC equity commitments are presented net of return of capital distributions subject to recall.
(2) 
Funded subordinated note commitments as of September 30, 2016 are presented net of repayments subject to recall. The subordinated note commitments were terminated as of December 30, 2016.
(3) 
Commitments presented are combined for us and RGA.
As of June 30, 2017, the senior secured revolving credit facility, or, as amended, the SLF Credit Facility, which SLF entered into through its wholly-owned subsidiary, Senior Loan Fund II LLC, or SLF II, allows SLF II to borrow up to $300.0 million subject to leverage and borrowing base restrictions. The reinvestment period of the SLF Credit Facility ends August 10, 2017, and the stated maturity date is August 11, 2020. As of June 30, 2017 and September 30, 2016, SLF II had outstanding debt under the SLF Credit Facility of $204.9 million and $214.1 million, respectively.

Through the reinvestment period, the SLF Credit Facility bears interest at one-month LIBOR plus a rate between 1.75% and 2.25%, depending on the composition of the collateral asset portfolio, per annum. After the reinvestment period, the rate will reset to one-month LIBOR plus 2.75% per annum for the remaining term of the SLF Credit Facility.

As of June 30, 2017 and September 30, 2016, SLF had total assets at fair value of $331.2 million and $332.8 million, respectively. As of June 30, 2017, SLF had two portfolio company investments on non-accrual status and the total fair value of non-accrual loans was $4.9 million. As of September 30, 2016, SLF had one portfolio company investment on non-accrual status and the total fair value of non-accrual loans was $6.7 million. The portfolio companies in SLF are in industries and geographies similar to those in which we may invest directly. Additionally, as of June 30, 2017 and September 30, 2016, SLF had commitments to fund various undrawn revolving credit and delayed draw loans to its portfolio companies totaling $18.0 million and $24.1 million, respectively.

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Below is a summary of SLF’s portfolio, followed by a listing of the individual investments in SLF’s portfolio as of June 30, 2017 and September 30, 2016:

 
As of June 30, 2017
 
As of September 30, 2016
  
(Dollars in thousands)
Senior secured loans (1)
$
331,346

 
$
331,473

Weighted average current interest rate on senior secured loans (2)
6.5
%
 
6.0
%
Number of borrowers in SLF
52

 
62

Largest portfolio company investment(1)
$
16,160

 
$
13,050

Total of five largest portfolio company investments(1)
$
66,281

 
$
61,118

 
(1) 
At principal amount.
(2) 
Computed as the (a) annual stated interest rate on accruing senior secured loans divided by (b) total senior secured loans at principal amount.

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SLF Investment Portfolio as of June 30, 2017
Portfolio Company
 
Business Description
 
Investment
Type
 
Maturity
Date
 
Current
Interest
Rate(1)
 
Principal ($) /
Shares(2)
 
Fair
Value(3)
  
 
  
 
  
 
  
 
  
 
(In thousands)
1A Smart Start LLC
 
Home and Office Furnishings, Housewares, and Durable Consumer
 
Senior loan
 
02/2022
 
6.0

 
$
2,100

 
$
2,102

Accellos, Inc.(4)
 
Diversified/Conglomerate Service
 
Senior loan
 
07/2020
 
7.0

 
 
16,160

 
16,160

Advanced Pain Management Holdings, Inc.,
 
Healthcare, Education and Childcare
 
Senior loan
 
02/2018
 
6.3

 
 
6,805

 
6,124

Advanced Pain Management Holdings, Inc.,
 
Healthcare, Education and Childcare
 
Senior loan
 
02/2018
 
6.3

 
 
466

 
419

American Seafoods Group LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
08/2021
 
6.3

 
 
4,605

 
4,605

Argon Medical Devices, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2021
 
6.0

 
 
3,334

 
3,334

Arise Virtual Solutions, Inc. (4)
 
Telecommunications
 
Senior loan
 
12/2018
 
7.8

 
 
9,927

 
9,927

Atkins Nutritionals, Inc.(4)
 
Beverage, Food and Tobacco
 
Senior loan
 
01/2019
 
6.3

 
 
4,452

 
4,452

Boot Barn, Inc.
 
Retail Stores
 
Senior loan
 
06/2021
 
5.8

 
 
10,073

 
10,073

Brandmuscle, Inc.
 
Printing and Publishing
 
Senior loan
 
12/2021
 
6.0

 
 
4,851

 
4,846

Certara L.P.(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2018
 
6.8

 
 
8,243

 
8,243

CLP Healthcare Services, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
6.3

 
 
8,611

 
8,439

CLP Healthcare Services, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
6.3

 
 
4,340

 
4,253

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
6.8

  
 
2,448

 
2,448

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
6.8

  
 
1,231

 
1,231

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
6.8

  
 
59

 
59

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
6.8

  
 
36

 
36

Curo Health Services LLC(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
02/2022
 
5.9

  
 
5,865

 
5,943

DentMall MSO, LLC(5)
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
07/2019
 
6.2

  
 
10,147

 
3,349

DentMall MSO, LLC(5)
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
07/2019
 
6.5

  
 
1,178

 
509

DISA Holdings Acquisition Subsidiary Corp.
 
Diversified/Conglomerate Service
 
Senior loan
 
12/2020
 
5.4

  
 
4,401

 
4,401

DISA Holdings Acquisition Subsidiary Corp.
 
Diversified/Conglomerate Service
 
Senior loan
 
12/2020
 
6.5

  
 
80

 
80

EAG, INC.
 
Diversified/Conglomerate Service
 
Senior loan
 
07/2018
 
5.5

  
 
1,996

 
1,996

Encore GC Acquisition, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2020
 
6.8

  
 
4,737

 
4,737

Encore GC Acquisition, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2020
 
8.5

 
 
161

 
161

First Watch Restaurants, Inc.(4)
 
Beverage, Food and Tobacco
 
Senior loan
 
12/2020
 
7.4

 
 
10,259

 
10,259

First Watch Restaurants, Inc.(4)
 
Beverage, Food and Tobacco
 
Senior loan
 
12/2020
 
9.3

  
 
489

 
489

Flexan, LLC
 
Chemicals, Plastics and Rubber
 
Senior loan
 
02/2020
 
7.0

  
 
6,044

 
6,044

Flexan, LLC
 
Chemicals, Plastics and Rubber
 
Senior loan
 
02/2020
 
7.0

  
 
1,686

 
1,686

Gamma Technologies, LLC(4)
 
Electronics
 
Senior loan
 
06/2021
 
6.2

  
 
10,290

 
10,290

Harvey Tool Company, LLC
 
Diversified/Conglomerate Manufacturing
 
Senior loan
 
03/2020
 
6.1

  
 
3,071

 
3,071

III US Holdings, LLC
 
Diversified/Conglomerate Service
 
Senior loan
 
09/2022
 
7.4

  
 
5,194

 
5,194

Jensen Hughes, Inc.
 
Buildings and Real Estate
 
Senior loan
 
12/2021
 
6.4

  
 
2,336

 
2,336

Jensen Hughes, Inc.
 
Buildings and Real Estate
 
Senior loan
 
12/2021
 
6.2

  
 
103

 
103

Jensen Hughes, Inc.
 
Buildings and Real Estate
 
Senior loan
 
12/2021
 
6.2

 
 
65

 
65

Joerns Healthcare, LLC(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
05/2020
 
7.9

 
 
8,757

 
8,159

Julio & Sons Company
 
Beverage, Food and Tobacco
 
Senior loan
 
12/2018
 
6.7

 
 
6,780

 
6,780

Julio & Sons Company
 
Beverage, Food and Tobacco
 
Senior loan
 
12/2018
 
6.7

 
 
2,232

 
2,232

Loar Group Inc.
 
Aerospace and Defense
 
Senior loan
 
01/2022
 
6.0

 
 
2,164

 
2,164

Paradigm DKD Group, LLC
 
Buildings and Real Estate
 
Senior loan
 
11/2018
 
6.1

 
 
1,982

 
1,982

Paradigm DKD Group, LLC
 
Buildings and Real Estate
 
Senior loan
 
11/2018
 
7.3

 
 
524

 
524

Pasternack Enterprises, Inc. and Fairview Microwave, Inc.
 
Diversified/Conglomerate Manufacturing
 
Senior loan
 
05/2022
 
6.2

 
 
5,385

 
5,385

Payless ShoeSource, Inc.(5)
 
Retail Stores
 
Senior loan
 
03/2021
 
7.2

 
 
1,945

 
1,042

Polk Acquisition Corp.
 
Automobile
 
Senior loan
 
06/2022
 
6.2

 
 
4,699

 
4,699

Polk Acquisition Corp.
 
Automobile
 
Senior loan
 
06/2022
 
6.2

 
 
54

 
54

Polk Acquisition Corp.
 
Automobile
 
Senior loan
 
06/2022
 
6.6

 
 
43

 
43


90


SLF Investment Portfolio as of June 30, 2017 – (continued)
Portfolio Company
 
Business Description
 
Investment
Type
 
Maturity
Date
 
Current
Interest
Rate(1)
 
Principal ($) /
Shares
(2)
 
Fair
Value(3)
  
 
  
 
  
 
  
 
  
 
(In thousands)
PowerPlan Holdings, Inc.(4)
 
Utilities
 
Senior loan
 
02/2022
 
6.0

 
$
11,365

 
$
11,365

Premise Health Holding Corp.(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
06/2020
 
5.8


 
11,801

 
11,801

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2019
 
7.7

 
 
9,763

 
9,763

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2019
 
7.7

 
 
328

 
328

R.G. Barry Corporation
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
09/2019
 
6.2

 
 
5,252

 
5,252

Radiology Partners, Inc.(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
7.0

 
 
7,813

 
7,813

Radiology Partners, Inc.(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
7.0

 
 
597

 
597

Radiology Partners, Inc.(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
7.0

 
 
507

 
507

Reliant Pro ReHab, LLC(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2017
 
6.3

  
 
3,265

 
3,265

RSC Acquisition, Inc.(4)
 
Insurance
 
Senior loan
 
11/2022
 
6.5

  
 
3,874

 
3,855

RSC Acquisition, Inc.
 
Insurance
 
Senior loan
 
11/2020
 
6.0

  
 
15

 
15

Rubio's Restaurants, Inc.(4)
 
Beverage, Food and Tobacco
 
Senior loan
 
11/2018
 
6.0

  
 
5,005

 
5,005

Rug Doctor LLC
 
Personal and Non Durable Consumer Products (Mfg. Only)
 
Senior loan
 
06/2018
 
6.5

  
 
5,926

 
5,926

Sage Dental Management, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
10/2019
 
6.9

  
 
4,794

 
4,794

Sage Dental Management, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
10/2019
 
6.9

  
 
50

 
50

Sage Dental Management, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
10/2019
 
7.0

  
 
40

 
40

Sage Dental Management, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
10/2019
 
8.8

  
 
23

 
23

Saldon Holdings, Inc.
 
Diversified/Conglomerate Service
 
Senior loan
 
09/2021
 
5.7

  
 
2,560

 
2,560

Sarnova HC, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2022
 
6.0

 
 
3,694

 
3,694

SEI, Inc.
 
Electronics
 
Senior loan
 
07/2021
 
6.0

  
 
13,855

 
13,717

SEI, Inc.(6)
 
Electronics
 
Senior loan
 
07/2021
 
N/A

(7) 
 

 
(1
)
Self Esteem Brands, LLC(4)
 
Leisure, Amusement, Motion Pictures, Entertainment
 
Senior loan
 
02/2020
 
6.0

  
 
11,514

 
11,514

Severin Acquisition, LLC
 
Diversified/Conglomerate Service
 
Senior loan
 
07/2021
 
6.1

  
 
5,304

 
5,278

Severin Acquisition, LLC(4)
 
Diversified/Conglomerate Service
 
Senior loan
 
07/2021
 
6.2

  
 
4,845

 
4,842

Severin Acquisition, LLC
 
Diversified/Conglomerate Service
 
Senior loan
 
07/2021
 
6.3

  
 
670

 
672

Severin Acquisition, LLC (6)
 
Diversified/Conglomerate Service
 
Senior loan
 
07/2021
 
N/A

(7) 
 

 
(1
)
Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

  
 
905

 
860

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

  
 
71

 
67

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

  
 
71

 
68

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

 
 
71

 
68

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

 
 
71

 
68

Smashburger Finance LLC (6)
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
N/A

(7) 
 

 
(6
)
Tate's Bake Shop, Inc.(4)
 
Beverage, Food and Tobacco
 
Senior loan
 
08/2019
 
6.3

 
 
2,933

 
2,933

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior loan
 
10/2020
 
5.5

 
 
4,581

 
4,558

Transaction Data Systems, Inc.
 
Diversified/Conglomerate Service
 
Senior loan
 
06/2021
 
6.6

 
 
7,412

 
7,412

Transaction Data Systems, Inc.
 
Diversified/Conglomerate Service
 
Senior loan
 
06/2020
 
5.7

 
 
22

 
21

W3 Co.
 
Oil and Gas
 
Senior loan
 
03/2022
 
7.2

 
 
1,269

 
1,269

Young Innovations, Inc.(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2019
 
6.3

 
 
10,395

 
10,395

Young Innovations, Inc.(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2019
 
6.3

 
 
277

 
277

Total senior loan investments
 
 
 
 
 
 
 
 
 
 
$
331,346

 
$
321,192

 
 
 
 
 
 
 
 
 
 
 
W3 Co.(8)(9)
 
Oil and Gas
 
LLC units
 
N/A
 
N/A

 
 
3

 
$
1,069

Total equity investments
 
 
 
 
 
 
 
 
 
 
 
 
$
1,069

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total investments
 
 
 
 
 
 
 
 
 
 
$
331,346

 
$
322,261

 

91


(1) 
Represents the weighted average annual current interest rate as of June 30, 2017.
(2) 
The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.
(3) 
Represents the fair value in accordance with ASC Topic 820 - Fair Value Measurement, or ASC Topic 820. The determination of such fair value is not included in our board of directors’ valuation process described elsewhere herein.
(4) 
We also hold a portion of the first lien senior secured loan in this portfolio company.
(5) 
Loan was on non-accrual status as of June 30, 2017, meaning that SLF has ceased recognizing interest income on the loan.
(6) 
The negative fair value is the result of the unfunded commitment being valued below par.
(7) 
The entire commitment was unfunded as of June 30, 2017. As such, no interest is being earned on this investment. The investment may be subject to an unused facility fee.
(8) 
Equity investment received as a result of the portfolio company's debt restructuring.
(9) 
Non-income producing.

92



SLF Investment Portfolio as of September 30, 2016
Portfolio Company
 
Business Description
 
Investment
Type
 
Maturity
Date
 
Current
Interest
Rate(1)
 
Principal ($)
 
Fair
Value(2)
  
 
  
 
  
 
  
 
  
 
(In thousands)
1A Smart Start LLC(3)
 
Home and Office Furnishings, Housewares, and Durable Consumer
 
Senior loan
 
02/2022
 
5.8

 
$
2,116

 
$
2,111

ACTIVE Network, Inc.
 
Electronics
 
Senior loan
 
11/2020
 
5.5

 
 
1,945

 
1,938

Advanced Pain Management Holdings, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
02/2018
 
6.3

 
 
6,805

 
6,601

Advanced Pain Management Holdings, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
02/2018
 
6.3

 
 
466

 
452

Advanced Pain Management Holdings, Inc.(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
02/2018
 
N/A

(5) 
 

 
(35
)
Aimbridge Hospitality, LLC (3)
 
Hotels, Motels, Inns, and Gaming
 
Senior loan
 
10/2018
 
5.8

 
 
5,037

 
5,037

American Seafoods Group LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
08/2021
 
6.0

 
 
4,818

 
4,806

Argon Medical Devices, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2021
 
5.8

 
 
3,895

 
3,895

Arise Virtual Solutions, Inc.(3)
 
Telecommunications
 
Senior loan
 
12/2018
 
7.8

  
 
10,804

 
10,264

Arise Virtual Solutions, Inc.(3)(4)
 
Telecommunications
 
Senior loan
 
12/2018
 
N/A

(5) 
 

 
(28
)
Atkins Nutritionals, Inc.(3)
 
Beverage, Food and Tobacco
 
Senior loan
 
01/2019
 
6.3

  
 
5,664

 
5,664

BMC Software, Inc.
 
Electronics
 
Senior loan
 
09/2020
 
5.0

 
 
1,876

 
1,813

Boot Barn, Inc.
 
Retail Stores
 
Senior loan
 
06/2021
 
5.5

  
 
10,667

 
10,667

Brandmuscle, Inc.
 
Printing and Publishing
 
Senior loan
 
12/2021
 
5.8

 
 
4,948

 
4,938

C.B. Fleet Company, Incorporated
 
Personal and Non-Durable Consumer Products
 
Senior loan
 
12/2021
 
5.8

 
 
7,613

 
7,613

Checkers Drive-In Restaurants, Inc.
 
Beverage, Food and Tobacco
 
Senior loan
 
01/2022
 
6.5

 
 
4,460

 
4,427

CLP Healthcare Services, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
6.3

 
 
8,677

 
8,677

CLP Healthcare Services, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
6.3

 
 
4,373

 
4,373

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
6.5

 
 
2,466

 
2,454

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
6.5

 
 
1,240

 
1,234

CPI Buyer, LLC (Cole-Parmer)(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2021
 
5.5

 
 
5,805

 
5,776

Curo Health Services LLC(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
02/2022
 
6.5

 
 
5,910

 
5,928

DentMall MSO, LLC(6)
 
Retail Stores
 
Senior loan
 
07/2019
 
6.0

 
 
10,147

 
6,088

DentMall MSO, LLC(6)
 
Retail Stores
 
Senior loan
 
07/2019
 
6.0

 
 
1,000

 
598

DISA Holdings Acquisition Subsidiary Corp.
 
Diversified Conglomerate Service
 
Senior loan
 
12/2020
 
5.5

 
 
4,568

 
4,431

DISA Holdings Acquisition Subsidiary Corp.
 
Diversified Conglomerate Service
 
Senior loan
 
12/2020
 
5.5

 
 
255

 
224

EAG, INC. (Evans Analytical Group)
 
Diversified Conglomerate Service
 
Senior loan
 
07/2017
 
5.0

 
 
2,113

 
2,113

Encore GC Acquisition, LLC(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2020
 
6.3

 
 
4,773

 
4,773

Encore GC Acquisition, LLC(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2020
 
7.8

 
 
164

 
164

Express Oil Change, LLC(3)
 
Retail Stores
 
Senior loan
 
12/2017
 
6.0

 
 
4,841

 
4,841

Extreme Reach Inc.
 
Broadcasting and Entertainment
 
Senior loan
 
02/2020
 
7.3

 
 
1,976

 
1,998

Federal-Mogul Corporation
 
Automobile
 
Senior loan
 
04/2021
 
4.8

 
 
3,920

 
3,799

Flexan, LLC
 
Chemicals, Plastics and Rubber
 
Senior loan
 
02/2020
 
6.3

 
 
6,090

 
6,090

Harvey Tool Company, LLC(3)
 
Diversified Conglomerate Manufacturing
 
Senior loan
 
03/2020
 
6.0

 
 
3,108

 
3,108

Jensen Hughes, Inc.
 
Diversified Conglomerate Service
 
Senior loan
 
12/2021
 
6.3

 
 
2,342

 
2,342

Jensen Hughes, Inc.
 
Diversified Conglomerate Service
 
Senior loan
 
12/2021
 
6.0

 
 
104

 
104

Jensen Hughes, Inc.
 
Diversified Conglomerate Service
 
Senior loan
 
12/2021
 
6.2

 
 
65

 
65

Joerns Healthcare, LLC(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
05/2020
 
6.0

 
 
9,598

 
9,118

Julio & Sons Company
 
Beverage, Food and Tobacco
 
Senior loan
 
12/2018
 
6.5

  
 
6,834

 
6,834

Julio & Sons Company
 
Beverage, Food and Tobacco
 
Senior loan
 
12/2018
 
6.5

  
 
1,061

 
1,061

Julio & Sons Company
 
Beverage, Food and Tobacco
 
Senior loan
 
12/2018
 
6.5

 
 
596

 
596

K&N Engineering, Inc.(3)
 
Automobile
 
Senior loan
 
07/2019
 
6.8

 
 
3,781

 
3,781

K&N Engineering, Inc.(3)
 
Automobile
 
Senior loan
 
07/2019
 
5.3

  
 
179

 
179

Loar Group Inc.
 
Aerospace and Defense
 
Senior loan
 
01/2022
 
5.8

  
 
2,233

 
2,233

Mediaocean LLC(3)
 
Diversified Conglomerate Service
 
Senior loan
 
08/2022
 
5.8

  
 
3,137

 
3,137

Northwestern Management Services, LLC(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
10/2019
 
6.5

  
 
4,288

 
4,224


93


SLF Investment Portfolio as of September 30, 2016 – (continued)
Portfolio Company
 
Business Description
 
Investment
Type
 
Maturity
Date
 
Current
Interest
Rate(1)
 
Principal ($)
 
Fair
Value(2)
  
 
  
 
  
 
  
 
  
 
(In thousands)
Northwestern Management Services, LLC(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
10/2019
 
6.5

 
$
470

 
$
463

Northwestern Management Services, LLC(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
10/2019
 
7.5

  
 
1

 
1

Paradigm DKD Group, LLC
 
Buildings and Real Estate
 
Senior loan
 
11/2018
 
6.5

 
 
1,998

 
1,958

Paradigm DKD Group, LLC
 
Buildings and Real Estate
 
Senior loan
 
11/2018
 
6.7

  
 
180

 
166

Pasternack Enterprises, Inc. and Fairview Microwave, Inc(3)
 
Diversified Conglomerate Manufacturing
 
Senior loan
 
05/2022
 
6.0

  
 
1,640

 
1,623

Payless ShoeSource, Inc.
 
Retail Stores
 
Senior loan
 
03/2021
 
5.0

  
 
1,955

 
1,163

Pentec Acquisition Sub, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
05/2018
 
6.3

  
 
1,419

 
1,419

PetVet Care Centers LLC(3)
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
12/2020
 
5.8

  
 
5,895

 
5,895

PetVet Care Centers LLC(3)
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
12/2020
 
5.8

  
 
1,219

 
1,219

PowerPlan Holdings, Inc.(3)
 
Utilities
 
Senior loan
 
02/2022
 
5.8

  
 
11,994

 
11,994

PPT Management, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
04/2020
 
6.0

  
 
13,026

 
13,026

PPT Management, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
04/2020
 
6.0

  
 
10

 
10

Premise Health Holding Corp.(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
06/2020
 
5.5

  
 
11,891

 
11,891

Pyramid Healthcare, Inc.(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2019
 
6.8

  
 
8,354

 
8,354

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2019
 
7.8

  
 
373

 
373

R.G. Barry Corporation
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
09/2019
 
6.0

  
 
5,880

 
5,821

Radiology Partners, Inc.(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
6.5

  
 
7,072

 
7,001

Radiology Partners, Inc.(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
6.5

  
 
801

 
792

Radiology Partners, Inc.(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
6.5

  
 
510

 
505

Radiology Partners, Inc.(3)(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
N/A

(5) 
 

 
(6
)
Radiology Partners, Inc.(3)(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
N/A

(5) 
 

 
(3
)
Reliant Pro ReHab, LLC(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2017
 
6.0

  
 
3,337

 
3,337

RSC Acquisition, Inc.(3)
 
Insurance
 
Senior loan
 
11/2022
 
6.3

  
 
3,732

 
3,732

RSC Acquisition, Inc.(3)
 
Insurance
 
Senior loan
 
11/2022
 
6.3

  
 
172

 
172

RSC Acquisition, Inc.
 
Insurance
 
Senior loan
 
11/2020
 
6.8

  
 
33

 
33

Rubio's Restaurants, Inc.(3)
 
Beverage, Food and Tobacco
 
Senior loan
 
11/2018
 
6.0

  
 
5,044

 
5,044

Rug Doctor LLC
 
Personal and Non-Durable Consumer Products
 
Senior loan
 
06/2018
 
6.3

  
 
7,780

 
7,780

Saldon Holdings, Inc.
 
Diversified Conglomerate Service
 
Senior loan
 
09/2021
 
5.5

  
 
2,718

 
2,718

Sarnova HC, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2022
 
5.8

  
 
3,722

 
3,722

SEI, Inc.
 
Electronics
 
Senior loan
 
07/2021
 
5.8

 
 
8,711

 
8,711

Self Esteem Brands, LLC(3)
 
Leisure, Amusement, Motion Pictures and Entertainment
 
Senior loan
 
02/2020
 
5.0

 
 
6,342

 
6,342

Severin Acquisition, LLC(3)
 
Diversified Conglomerate Service
 
Senior loan
 
07/2021
 
5.9

 
 
4,882

 
4,858

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

 
 
951

 
932

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

 
 
75

 
74

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

 
 
75

 
73

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

 
 
75

 
73

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

 
 
75

 
73

Smashburger Finance LLC(4)
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
N/A

(5) 
 

 
(2
)
Systems Maintenance Services Holding, Inc.(3)
 
Electronics
 
Senior loan
 
10/2019
 
5.0

 
 
2,396

 
2,396

Tate's Bake Shop, Inc.(3)
 
Beverage, Food and Tobacco
 
Senior loan
 
08/2019
 
6.0

 
 
2,955

 
2,955

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior loan
 
10/2020
 
5.3

 
 
4,582

 
4,566

Transaction Data Systems, Inc.(3)
 
Diversified Conglomerate Service
 
Senior loan
 
06/2021
 
6.3

 
 
5,260

 
5,260

Transaction Data Systems, Inc.
 
Diversified Conglomerate Service
 
Senior loan
 
06/2020
 
5.5

 
 
9

 
8

W3 Co.
 
Oil and Gas
 
Senior loan
 
03/2020
 
5.8

 
 
2,924

 
2,295

Worldwide Express Operations, LLC
 
Cargo Transport
 
Senior loan
 
07/2019
 
6.0

 
 
4,869

 
4,869

Worldwide Express Operations, LLC
 
Cargo Transport
 
Senior loan
 
07/2019
 
6.0

 
 
100

 
100

Young Innovations, Inc.(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2019
 
5.3

 
 
3,804

 
3,818


94


SLF Investment Portfolio as of September 30, 2016 – (continued)
Portfolio Company
 
Business Description
 
Investment
Type
 
Maturity
Date
 
Current
Interest
Rate(1)
 
Principal ($)
 
Fair
Value(2)
  
 
  
 
  
 
  
 
  
 
(In thousands)
Young Innovations, Inc.(3)
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2018
 
6.8

 
$
122

 
$
118

Zest Holdings, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2020
 
5.8

 
 
5,282

 
5,282

  
 
 
 
 
 
 
 
 
 
 
$
331,473

 
$
323,510


 
(1) 
Represents the weighted average annual current interest rate as of September 30, 2016. All interest rates are payable in cash.
(2) 
Represents the fair value in accordance with ASC Topic 820. The determination of such fair value is not included in our board of directors’ valuation process described elsewhere herein.
(3) 
We also hold a portion of the first lien senior secured loan in this portfolio company.
(4) 
The negative fair value is the result of the unfunded commitment being valued below par.
(5) 
The entire commitment was unfunded as of September 30, 2016. As such, no interest is being earned on this investment.
(6) 
Loan was on non-accrual status as of September 30, 2016, meaning that SLF has ceased recognizing interest income on the loan.
As of June 30, 2017, we have committed to fund $175.0 million of LLC equity interest subscriptions to SLF. As of June 30, 2017 and September 30, 2016, $113.1 million and $31.3 million, respectively, of our LLC equity interest subscriptions to SLF had been called and contributed, net of return of capital distributions subject to recall. For the three and nine months ended June 30, 2017, we received $0.9 million and $4.1 million, respectively, in dividend income from the SLF LLC equity interests. For the three and nine months ended June 30, 2016, we received $1.1 million and $3.0 million, respectively, in dividend income from the SLF LLC equity interests.

As of September 30, 2016, the amortized cost, net of principal repayments that were subject to recall, and fair value of the subordinated notes held by us was $77.3 million and $77.3 million, respectively. As of September 30, 2016, the subordinated notes paid a weighted average interest rate of three-month LIBOR plus 8.0%. For the nine months ended June 30, 2017, we earned interest income on the subordinated notes of $1.6 million. The subordinated notes held by us were redeemed on December 30, 2016, and therefore no interest income was earned for the three months ended June 30, 2017. For the three and nine months ended June 30, 2016, we earned interest income of $1.8 million and $5.2 million, respectively, on the subordinated notes.

For the three and nine months ended June 30, 2017, we earned an annualized total return on our weighted average capital invested in SLF of 3.4% and 7.0%, respectively. For the three and nine months ended June 30, 2016, we earned an annualized total return on our weighted average capital invested in SLF of 12.6% and 7.8%, respectively. The annualized total return on weighted average capital invested is calculated by dividing total income earned on our investments in SLF by the combined daily average of our investments in (1) the principal of the SLF subordinated notes, if any, and (2) the NAV of the SLF LLC equity interests.


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Below is certain summarized financial information for SLF as of June 30, 2017 and September 30, 2016, and for the three and nine months ended June 30, 2017 and 2016:
 
June 30, 2017
 
September 30, 2016
  
(In thousands)
Selected Balance Sheet Information, at fair value
  

 
  

Investments, at fair value
$
322,261

 
$
323,510

Cash and other assets
7,068

 
7,281

Receivable from investments sold
1,883

 
1,995

Total assets
$
331,212

 
$
332,786

Senior credit facility
$
204,900

 
$
214,050

Unamortized debt issuance costs
(110
)
 
(949
)
Payable for investments purchased
1,317

 

Other liabilities
672

 
567

Total liabilities
206,779

 
213,668

Subordinated notes and members’ equity
124,433

 
119,118

Total liabilities and members' equity
$
331,212

 
$
332,786


 
Three months ended June 30,
 
Nine months ended June 30,
  
2017
 
2016
 
2017
 
2016
  
(In thousands)
 
(In thousands)
Selected Statement of Operations Information:
  

 
  

 
 
 
 
Interest income
$
5,645

 
$
5,695

 
$
16,311

 
$
16,699

Fee income
5

 

 
5

 
22

Total investment income
5,650

 
5,695

 
16,316

 
16,721

Interest expense
2,129

 
4,016

 
8,148

 
11,775

Administrative service fee
123

 
127

 
354

 
327

Other expenses
34

 
35

 
98

 
110

Total expenses
2,286

 
4,178

 
8,600

 
12,212

Net investment income
3,364

 
1,517

 
7,716

 
4,509

Net realized gains (losses) on investments
29

 

 
3

 
(430
)
Net change in unrealized appreciation (depreciation)
       on investments and subordinated notes
(2,262
)
 
591

 
(2,891
)
 
(1,505
)
Net increase (decrease) in net assets
$
1,131

 
$
2,108

 
$
4,828

 
$
2,574


Prior to their termination, SLF elected to fair value the subordinated notes issued to us and RGA under ASC Topic 825 — Financial Instruments, or ASC Topic 825. The subordinated notes were valued by calculating the net present value of the future expected cash flow streams using an appropriate risk-adjusted discount rate model. For each of the three and nine months ended June 30, 2017, SLF did not recognize unrealized appreciation or depreciation on the subordinated notes. For each of the three and nine months ended June 30, 2016, SLF recognized an amount less than $0.1 million in unrealized appreciation and $1.0 million in unrealized depreciation on the subordinated notes, respectively.

As of June 30, 2017, SLF had no subordinated notes outstanding. As of September 30, 2016, SLF had $88.3 million of aggregate contractual principal amounts of subordinated notes outstanding for which the fair value option was elected with a fair value and carrying value of $88.3 million.


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Contractual Obligations and Off-Balance Sheet Arrangements

A summary of our significant contractual payment obligations as of June 30, 2017 is as follows:
 
Payments Due by Period (In millions)
  
Total
 
Less Than
1 Year
 
1 – 3 Years
 
3 – 5 Years
 
More Than
5 Years
2010 Debt Securitization
$
205.0

 
$

 
$

 
$

 
$
205.0

2014 Debt Securitization
246.0

 

 

 

 
246.0

SBA debentures
288.0

 

 

 
100.0

 
188.0

Credit Facility
144.4

 

 

 
144.4

 

Adviser Revolver

 

 

 

 

Unfunded commitments (1)
70.4

 
70.4

 

 

 

Total contractual obligations (2)
$
953.8

 
$
70.4

 
$

 
$
244.4

 
$
639.0

 
(1) 
Unfunded commitments represent unfunded commitments to fund investments, excluding our investments in SLF, as of June 30, 2017. These amounts may or may not be funded to the borrowing party now or in the future. The unfunded commitments relate to loans with various maturity dates, but we are showing this amount in the less than one year category as this entire amount was eligible for funding to the borrowers as of June 30, 2017, subject to the terms of each loan’s respective credit agreement.
(2) 
Total contractual obligations exclude $0.4 million of secured borrowings.
We may become a party to financial instruments with off-balance sheet risk in the normal course of our business to meet the financial needs of our portfolio companies. These instruments may include commitments to extend credit and involve, to varying degrees, elements of liquidity and credit risk in excess of the amount recognized in the balance sheet. As of June 30, 2017 and September 30, 2016, we had outstanding commitments to fund investments, excluding our investments in SLF, totaling $70.4 million and $81.4 million, respectively. We have commitments of up to $61.9 million and $66.4 million to SLF as of June 30, 2017 and September 30, 2016, respectively, that may be contributed primarily for the purpose of funding new investments approved by the SLF investment committee.

We have certain contracts under which we have material future commitments. We have entered into the Investment Advisory Agreement with GC Advisors in accordance with the 1940 Act. Under the Investment Advisory Agreement, GC Advisors provides us with investment advisory and management services.

Under the Administration Agreement, the Administrator furnishes us with office facilities and equipment, provides us with clerical, bookkeeping and record keeping services at such facilities and provides us with other administrative services necessary to conduct our day-to-day operations. The Administrator also provides on our behalf managerial assistance to those portfolio companies to which we are required to offer to provide such assistance.

If any of the contractual obligations discussed above are terminated, our costs under any new agreements that we enter into may increase. In addition, we would likely incur significant time and expense in locating alternative parties to provide the services we receive under our Investment Advisory Agreement and our Administration Agreement. Any new investment advisory agreement would also be subject to approval by our stockholders.

Distributions

We intend to make quarterly distributions to our stockholders as determined by our board of directors. For additional details on distributions, see “Income taxes” in Note 2 to our consolidated financial statements.

We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of our distributions from time to time. In addition, we may be limited in our ability to make distributions due to the asset coverage requirements applicable to us as a business development company under the 1940 Act. If we do not distribute a certain percentage of our income annually, we will suffer adverse U.S. federal

97


income tax consequences, including the possible loss of our ability to be subject to tax as a RIC. We cannot assure stockholders that they will receive any distributions.

Because federal income tax regulations differ from GAAP, distributions in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified within capital accounts in the financial statements to reflect their tax character. For example, permanent differences in classification may result from the treatment of distributions paid from short-term gains as ordinary income dividends for tax purposes. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future.

To the extent our taxable earnings fall below the total amount of our distributions for any tax year, a portion of those distributions may be deemed a return of capital to our stockholders for U.S. federal income tax purposes. Thus, the source of a distribution to our stockholders may be the original capital invested by the stockholder rather than our income or gains. Stockholders should read any written disclosure accompanying a distribution payment carefully and should not assume that the source of any distribution is our ordinary income or gains.

We have adopted an “opt out” dividend reinvestment plan for our common stockholders. As a result, if we declare a distribution, our stockholders’ cash distributions will be automatically reinvested in additional shares of our common stock unless a stockholder specifically “opts out” of our dividend reinvestment plan. If a stockholder opts out, that stockholder will receive cash distributions. Although distributions paid in the form of additional shares of our common stock will generally be subject to U.S. federal, state and local taxes in the same manner as cash distributions, stockholders participating in our dividend reinvestment plan will not receive any corresponding cash distributions with which to pay any such applicable taxes.

Related Party Transactions

We have entered into a number of business relationships with affiliated or related parties, including the following:
We entered into the Investment Advisory Agreement with GC Advisors. Mr. Lawrence Golub, our chairman, is a manager of GC Advisors, and Mr. David Golub, our chief executive officer, is a manager of GC Advisors, and each of Messrs. Lawrence Golub and David Golub owns an indirect pecuniary interest in GC Advisors.

Golub Capital LLC provides, and other affiliates of Golub Capital have historically provided, us with the office facilities and administrative services necessary to conduct day-to-day operations pursuant to our Administration Agreement.

We have entered into a license agreement with Golub Capital LLC, pursuant to which Golub Capital LLC has granted us a non-exclusive, royalty-free license to use the name “Golub Capital.”

Under the Staffing Agreement, Golub Capital LLC has agreed to provide GC Advisors with the resources necessary to fulfill its obligations under the Investment Advisory Agreement. The Staffing Agreement provides that Golub Capital LLC will make available to GC Advisors experienced investment professionals and provide access to the senior investment personnel of Golub Capital LLC for purposes of evaluating, negotiating, structuring, closing and monitoring our investments. The Staffing Agreement also includes a commitment that the members of GC Advisors’ investment committee will serve in such capacity. Services under the Staffing Agreement are provided on a direct cost reimbursement basis. We are not a party to the Staffing Agreement.

GC Advisors serves as collateral manager to the 2010 Issuer and the 2014 Issuer under the 2010 Collateral Management Agreement and 2014 Collateral Management Agreement, respectively, and receives a fee for providing these services that is offset against the base management fee payable by us under the Investment Advisory Agreement.

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We have entered into the Adviser Revolver with GC Advisors in order to have the ability to borrow funds on a short-term basis.

During calendar year 2017, the Golub Capital Employee Grant Program Rabbi Trust, or the Trust, purchased approximately $17.7 million of shares, or 955,896 shares, of our common stock from GCOP LLC, an affiliate of GC Advisors, for the purpose of awarding incentive compensation to employees of Golub Capital. During calendar year 2016, the Trust purchased approximately $1.5 million of shares, or 95,035 shares, of our common stock, for the purpose of awarding incentive compensation to employees of Golub Capital. During calendar year 2015, the Trust purchased approximately $16.0 million of shares, or 952,051 shares, of our common stock, for the purpose of awarding incentive compensation to employees of Golub Capital.

GC Advisors also sponsors or manages, and may in the future sponsor or manage, other investment funds, accounts or investment vehicles (together referred to as “accounts”) that have investment mandates that are similar, in whole and in part, with ours. For example, GC Advisors presently serves as the investment adviser to Golub Capital Investment Corporation, an unlisted business development company that primarily focuses on investing in senior secured and one stop loans. In addition, our officers and directors serve in similar capacities for Golub Capital Investment Corporation. GC Advisors and its affiliates may determine that an investment is appropriate for us and for one or more of those other accounts. In such event, depending on the availability of such investment and other appropriate factors, and pursuant to GC Advisors’ allocation policy, GC Advisors or its affiliates may determine that we should invest side-by-side with one or more other accounts. We do not intend to make any investments if they are not permitted by applicable law and interpretive positions of the SEC and its staff, or if they are inconsistent with GC Advisors’ allocation procedures.

In addition, we have adopted a formal code of ethics that governs the conduct of our and GC Advisors’ officers, directors and employees. Our officers and directors also remain subject to the duties imposed by both the 1940 Act and the General Corporation Law of the State of Delaware.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following items as critical accounting policies.

Fair Value Measurements

We value investments for which market quotations are readily available at their market quotations. However, a readily available market value is not expected to exist for many of the investments in our portfolio, and we value these portfolio investments at fair value as determined in good faith by our board of directors under our valuation policy and process.

Valuation methods may include comparisons of the portfolio companies to peer companies that are public, determination of the enterprise value of a portfolio company, discounted cash flow analysis and a market interest rate approach. The factors that are taken into account in fair value pricing investments include: available current market data, including relevant and applicable market trading and transaction comparables; applicable market yields and multiples; security covenants; call protection provisions; information rights; the nature and realizable value of any collateral; the portfolio company’s ability to make payments, its earnings and discounted cash flows and the markets in which it does business; comparisons of financial ratios of peer companies that are public; comparable merger and acquisition transactions; and the principal market and enterprise values. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we will consider the pricing indicated by the external event to corroborate the private equity valuation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the investments may differ

99


significantly from the values that would have been used had a readily available market value existed for such investments and may differ materially from values that may ultimately be received or settled.

Our board of directors is ultimately and solely responsible for determining, in good faith, the fair value of investments that are not publicly traded, whose market prices are not readily available on a quarterly basis or any other situation where portfolio investments require a fair value determination.

With respect to investments for which market quotations are not readily available, our board of directors undertakes a multi-step valuation process each quarter, as described below:

Our quarterly valuation process begins with each portfolio company investment being initially valued by the investment professionals of GC Advisors responsible for credit monitoring.
Preliminary valuation conclusions are then documented and discussed with our senior management and GC Advisors.
The audit committee of our board of directors reviews these preliminary valuations.
At least once annually, the valuation for each portfolio investment is reviewed by an independent valuation firm.
The board of directors discusses valuations and determines the fair value of each investment in our portfolio in good faith.

Determination of fair values involves subjective judgments and estimates. Under current accounting standards, the notes to our consolidated financial statements refer to the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our consolidated financial statements.

We follow ASC Topic 820 for measuring fair value. Fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the assets or liabilities or market and the assets’ or liabilities’ complexity. Our fair value analysis includes an analysis of the value of any unfunded loan commitments. Assets and liabilities are categorized for disclosure purposes based upon the level of judgment associated with the inputs used to measure their value. The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the asset or liability as of the measurement date. The three levels are defined as follows:

Level 1: Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
Level 2: Inputs include quoted prices for similar assets or liabilities in active markets and inputs that are observable for the assets or liabilities, either directly or indirectly, for substantially the full term of the assets or liabilities.
Level 3: Inputs include significant unobservable inputs for the assets or liabilities and include situations where there is little, if any, market activity for the assets or liabilities. The inputs into the determination of fair value are based upon the best information available and may require significant management judgment or estimation.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset’s or a liability’s categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and we consider factors specific to the asset or liability. We assess the levels of assets and liabilities at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfers. There were no transfers among Level 1, 2 and 3 of the fair value hierarchy for assets and liabilities during the three and nine months ended June 30, 2017 and 2016. The following section describes the valuation techniques used by us to measure different assets and liabilities at fair value and includes the level within the fair value hierarchy in which the assets and liabilities are categorized.


100


Valuation of Investments

Level 1 investments are valued using quoted market prices. Level 2 investments are valued using market consensus prices that are corroborated by observable market data and quoted market prices for similar assets and liabilities. Level 3 investments are valued at fair value as determined in good faith by our board of directors, based on input of management, the audit committee and independent valuation firms that have been engaged at the direction of our board of directors to assist in the valuation of each portfolio investment without a readily available market quotation at least once during a trailing twelve-month period under a valuation policy and a consistently applied valuation process. This valuation process is conducted at the end of each fiscal quarter, with approximately 25% (based on the number of portfolio companies) of our valuations of debt and equity investments without readily available market quotations subject to review by an independent valuation firm. As of June 30, 2017 and September 30, 2016, with the exception of money market funds included in cash and cash equivalents and restricted cash and cash equivalents (Level 1 investments) and investments measured at fair value using the NAV, all investments were valued using Level 3 inputs of the fair value hierarchy.

When determining fair value of Level 3 debt and equity investments, we may take into account the following factors, where relevant: the enterprise value of a portfolio company, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons to publicly traded securities, and changes in the interest rate environment and the credit markets generally that may affect the price at which similar investments may be made and other relevant factors. The primary method for determining enterprise value uses a multiple analysis whereby appropriate multiples are applied to the portfolio company’s EBITDA. A portfolio company’s EBITDA may include pro-forma adjustments for items such as acquisitions, divestitures, or expense reductions. The enterprise value analysis is performed to determine the value of equity investments and to determine if debt investments are credit impaired. If debt investments are credit impaired, we will use the enterprise value analysis or a liquidation basis analysis to determine fair value. For debt investments that are not determined to be credit impaired, we use a market interest rate yield analysis to determine fair value.

In addition, for certain debt investments, we may base our valuation on indicative bid and ask prices provided by an independent third party pricing service. Bid prices reflect the highest price that we and others may be willing to pay. Ask prices represent the lowest price that we and others may be willing to accept. We generally use the midpoint of the bid/ask range as our best estimate of fair value of such investment.

Due to the inherent uncertainty of determining the fair value of Level 3 investments that do not have a readily available market value, the fair value of the investments may differ significantly from the values that would have been used had a market existed for such investments and may differ materially from the values that may ultimately be received or settled. Further, such investments are generally subject to legal and other restrictions or otherwise are less liquid than publicly traded instruments. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we may realize significantly less than the value at which such investment had previously been recorded.

Our investments are subject to market risk. Market risk is the potential for changes in the value due to market changes. Market risk is directly impacted by the volatility and liquidity in the markets in which the investments are traded.

Valuation of Secured Borrowings

We have elected the fair value option under ASC Topic 825 relating to accounting for debt obligations at their fair value for our secured borrowings which arise due to partial loan sales that do not meet the criteria for sale treatment under ASC Topic 860. All secured borrowings as of June 30, 2017 and September 30, 2016 were valued using Level 3 inputs under the fair value hierarchy, and our approach to determining fair value of Level 3 secured borrowings is consistent with our approach to determining fair value of the Level 3 investments that are associated with these secured borrowings as previously described.


101


Valuation of Other Financial Assets and Liabilities

Fair value of our debt is estimated using Level 3 inputs by discounting remaining payments using comparable market rates or market quotes for similar instruments at the measurement date, if available.

Revenue Recognition:

Our revenue recognition policies are as follows:

Investments and Related Investment Income: Interest income is accrued based upon the outstanding principal amount and contractual interest terms of debt investments. Premiums, discounts, and origination fees are amortized or accreted into interest income over the life of the respective debt investment. For investments with contractual PIK interest, which represents contractual interest accrued and added to the principal balance that generally becomes due at maturity, we do not accrue PIK interest if the portfolio company valuation indicates that the PIK interest is not likely to be collectible. In addition, we may generate revenue in the form of amendment, structuring or due diligence fees, fees for providing managerial assistance, consulting fees and prepayment premiums on loans and record these fees as fee income when received. Loan origination fees, original issue discount and market discount or premium are capitalized, and we accrete or amortize such amounts as interest income. We record prepayment premiums on loans as fee income. Dividend income on preferred equity securities is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies. Distributions received from LLC and limited partnership, or LP, investments are evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, we will not record distributions from equity investments in LLCs and LPs as dividend income unless there are sufficient accumulated tax-basis earnings and profits in the LLC or LP prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment.

We account for investment transactions on a trade-date basis. Realized gains or losses on investments are measured by the difference between the net proceeds from the disposition and the cost basis of investment, without regard to unrealized gains or losses previously recognized. We report changes in fair value of investments from the prior period that is measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investments in our consolidated statements of operations.

Non-accrual: Loans may be left on accrual status during the period we are pursuing repayment of the loan. Management reviews all loans that become past due 90 days or more on principal and interest or when there is reasonable doubt that principal or interest will be collected for possible placement on non-accrual status. We generally reverse accrued interest when a loan is placed on non-accrual. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. We restore non-accrual loans to accrual status when past due principal and interest is paid and, in our management’s judgment, are likely to remain current. The total fair value of our non-accrual loans was $3.4 million as of June 30, 2017 and $1.3 million as of September 30, 2016.

Partial loan sales: We follow the guidance in ASC Topic 860, when accounting for loan participations and other partial loan sales. Such guidance requires a participation or other partial loan sale to meet the definition of a “participating interest”, as defined in the guidance, in order for sale treatment to be allowed. Participations or other partial loan sales that do not meet the definition of a participating interest remain on our statements of assets and liabilities and the proceeds are recorded as a secured borrowing until the definition is met. Secured borrowings are carried at fair value to correspond with the related investments, which are carried at fair value.

Income taxes: See “Consolidated Results of Operations - Expenses - Excise Tax Expense.”


102


Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are subject to financial market risks, including changes in interest rates. Many of the loans in our portfolio have floating interest rates, and we expect that our loans in the future may also have floating interest rates. These loans are usually based on a floating LIBOR and typically have interest rate reset provisions that adjust applicable interest rates under such loans to current market rates on a quarterly basis. The loans that are subject to the floating LIBOR rates are also subject to a minimum base rate, or floor, that we charge on our loans if the current market rates are below the respective floors. As of June 30, 2017 and September 30, 2016, the weighted average LIBOR floor on the loans subject to floating interest rates was 1.03% and 1.04%, respectively. Prior to their redemption on October 20, 2016, the Class A 2010 Notes issued as part of the 2010 Debt Securitization had floating interest rate provisions based on three-month LIBOR that reset quarterly as do the Class A-Refi 2010 Notes issued in connection with the refinancing of the 2010 Debt Securitization. In addition, the Class A-1, A-2 and B 2014 Notes issued as part of the 2014 Debt Securitization have floating interest rate provisions based on three-month LIBOR that reset quarterly and the Credit Facility has a floating interest rate provision based on one-month LIBOR that resets daily. As of each of June 30, 2017 and September 30, 2016, the weighted average LIBOR floor on the secured borrowings, which reset quarterly, was 1.00%. We expect that other credit facilities into which we enter in the future may have floating interest rate provisions.

Assuming that the interim and unaudited consolidated statement of financial condition as of June 30, 2017 were to remain constant and that we took no actions to alter interest rate sensitivity as of such date, the following table shows the annualized impact of hypothetical base rate changes in interest rates.

Change in interest rates
 
Increase (decrease) in
interest income
 
Increase (decrease) in
interest expense
 
Net increase
(decrease) in
 investment income
  
 
(In thousands)
Down 25 basis points
 
$
(3,729
)
 
$
(1,490
)
 
$
(2,239
)
Up 50 basis points
 
8,145

 
2,979

 
5,166

Up 100 basis points
 
16,292

 
5,958

 
10,334

Up 150 basis points
 
24,437

 
8,937

 
15,500

Up 200 basis points
 
32,584

 
11,916

 
20,668


Although we believe that this analysis is indicative of our sensitivity to interest rate changes as of June 30, 2017, it does not adjust for changes in the credit market, credit quality, the size and composition of the assets in our portfolio and other business developments, including borrowings under the Debt Securitizations and the Credit Facility, or other borrowings, that could affect net increase in net assets resulting from operations, or net income. Accordingly, we can offer no assurances that actual results would not differ materially from the analysis above.

We may in the future hedge against interest rate fluctuations by using standard hedging instruments such as interest rate swaps, futures, options and forward contracts to the limited extent permitted under the 1940 Act and applicable commodities laws. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in the benefits of lower interest rates with respect to the investments in our portfolio with fixed interest rates.



103


Item 4: Controls and Procedures.

As of June 30, 2017 (the end of the period covered by this report), management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, or the Exchange Act). Based on that evaluation, our management, including the chief executive officer and chief financial officer, concluded that, at the end of such period, our disclosure controls and procedures were effective and provided reasonable assurance that information required to be disclosed in our periodic SEC filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in the Company’s periodic reports. There has not been any change in our internal controls over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.


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Part II - Other Information

Item 1: Legal Proceedings.

Golub Capital BDC, GC Advisors and Golub Capital LLC are not currently subject to any material legal proceedings.

Item 1A: Risk Factors.

None.

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

None.

Item 3: Defaults Upon Senior Securities.

None.

Item 4: Mine Safety Disclosures.

None.

Item 5: Other Information.

None.

Item 6: Exhibits.

EXHIBIT INDEX
 
 
 
Number
 
Description
 
 
 
 
10.1
 
Joinder Supplement, dated as of May 2, 2017, by and among Golub Capital BDC Funding LLC, as the borrower; the lender identified therein, and Wells Fargo Securities, LLC, as the administrative agent.*
 
31.1
 
Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*
 
31.2
  
Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*
 
32.1
 
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
 

_________________
* Filed herewith
 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


 
Golub Capital BDC, Inc.
 
 
 
Dated: August 7, 2017
By
/s/ David B. Golub
 
 
David B. Golub
 
 
Chief Executive Officer
 
 
(Principal Executive Officer)
 
 
 
Dated: August 7, 2017
By
/s/ Ross A. Teune
 
 
Ross A. Teune
 
 
Chief Financial Officer
 
 
(Principal Accounting and Financial Officer)


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