þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended September 30, 2018 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
DELAWARE (State or jurisdiction of incorporation or organization) | 61-1713295 (I.R.S. Employer Identification No.) | |
333 South Grand Avenue, 28th Floor Los Angeles, CA (Address of principal executive office) | 90071 (Zip Code) |
Title of Each Class | Name of Each Exchange on Which Registered | |
Common Stock, par value $0.01 per share | The Nasdaq Global Select Market |
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o | 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 |
Consolidated Statements of Assets and Liabilities as of September 30, 2018 and September 30, 2017 |
Consolidated Statements of Operations for the years ended September 30, 2018, 2017 and 2016 |
Consolidated Statements of Changes in Net Assets for the years ended September 30, 2018, 2017 and 2016 |
Consolidated Statements of Cash Flows for the years ended September 30, 2018, 2017 and 2016 |
Consolidated Schedule of Investments as of September 30, 2018 |
Consolidated Schedule of Investments as of September 30, 2017 |
Notes to Consolidated Financial Statements |
Schedule 12-14 — Investments in and advances to affiliates |
Amended and Restated Certificate of Incorporation of the Registrant (Incorporated by reference to Exhibit a filed with the Registrant’s Registration Statement on Form N-2 (File No. 333-188904) filed on July 8, 2013). | ||
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Registrant, dated as of October 17, 2017 (Incorporated by reference to Exhibit 3.1 filed with the Registrant’s Current Report on Form 8-K (File No. 814-01013) filed on October 17, 2017). | ||
Amended and Restated Bylaws of the Registrant (Incorporated by reference to Exhibit 3.1 filed with the Registrant’s Current Report on Form 8-K (File No. 814-01013) filed on January 29, 2018). | ||
Form of Common Stock Certificate (Incorporated by reference to Exhibit d filed with the Registrant’s Registration Statement on Form N-2 (File No. 333-188904) filed on July 8, 2013). | ||
Dividend Reinvestment Plan (Incorporated by reference to Exhibit e filed with the Registrant’s Registration Statement on Form N-2 (File No. 333-188904) filed on July 8, 2013). | ||
Investment Advisory Agreement, dated as of October 17, 2017, between the Registrant and Oaktree Capital Management, L.P. (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Current Report on Form 8-K (File No. 814-01013) filed on October 17, 2017). | ||
Form of Custody Agreement (Incorporated by reference to Exhibit j filed with the Registrant’s Registration Statement on Form N-2 (File No. 333-188904) filed on July 8, 2013). | ||
Administration Agreement, dated as of October 17, 2017, between the Registrant and Oaktree Fund Administration, LLC (Incorporated by reference to Exhibit 10.2 filed with the Registrant’s Current Report on Form 8-K (File No. 814-01013) filed on October 17, 2017). | ||
Loan Financing and Servicing Agreement, dated as of September 24, 2018, by and among OCSI Senior Funding Ltd., as borrower, Registrant, as equityholder and as servicer, the lenders from time to time party thereto, Deutsche Bank AG, New York Branch, as facility agent, the other agents parties thereto and Wells Fargo Bank, National Association, as collateral agent and as collateral custodian (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Current Report on Form 8-K (File No. 814-01013) filed on September 25, 2018). | ||
Sale and Contribution Agreement, dated as of September 24, 2018, by and between Registrant, as seller, and OCSI Senior Funding Ltd., as purchaser (Incorporated by reference to Exhibit 10.2 filed with the Registrant’s Current Report on Form 8-K (File No. 814-01013) filed on September 25, 2018). | ||
Loan Sale Agreement by and between Registrant and FS Senior Funding II LLC, dated as of January 15, 2015 (Incorporated by reference to Exhibit 10.2 filed with the Registrant’s Current Report on Form 8-K (File No. 814-01013) filed on January 21, 2015). | ||
Loan and Security Agreement by and between the Registrant and East West Bank, dated as of January 6, 2016 (Incorporated by reference to Exhibit 10.1 filed with Registrant’s Current Report on Form 8-K (File No. 814-01013) filed on January 12, 2016). | ||
First Amendment to Loan and Security Agreement, dated as of March 17, 2018, by and between the Registrant and East West Bank (Incorporated by reference to Exhibit 10.2 filed with the Registrant’s Quarterly Report on Form 10-Q (File No. 814-01013) filed on May 8, 2018). | ||
Pledge Agreement, dated as of October 17, 2017, between the Registrant and FSH (Incorporated by reference to Exhibit 10.3 filed with the Registrant’s Current Report on Form 8-K (File No. 814-01013) filed on October 17, 2017). | ||
Amended and Restated Loan and Security Agreement, dated as of January 31, 2018, by and among Registrant, OCSI Senior Funding II LLC, the lenders referred to therein, Citibank, N.A., and Wells Fargo Bank, National Association (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Current Report on Form 8-K (File No. 814-01013) filed on February 1, 2018). | ||
First Amendment to the Amended and Restated Loan and Security Agreement by and among the Registrant, as collateral manager, OCSI Senior Funding II LLC, as borrower, and Citibank, N.A., as administrative agent and sole lender, dated as of May 14, 2018 (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Current Report on Form 8-K (File No. 814-01013) filed on May 16, 2018). | ||
Second Amendment to Loan and Security Agreement by and between the Registrant and East West Bank, dated as of May 21, 2018 (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Current Report on Form 8-K (File No. 814-01013) filed on May 23, 2018). | ||
Second Amendment to the Amended and Restated Loan and Security Agreement by and among Registrant, as collateral manager, OCSI Senior Funding II LLC, as borrower, and Citibank, N.A., as administrative agent and sole lender, dated as of July 18, 2018 (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Current Report on Form 8-K (File No. 814-01013) filed on July 19, 2018). |
Third Amendment to the Amended and Restated Loan and Security Agreement by and among Registrant, as collateral manager, OCSI Senior Funding II LLC, as borrower, and Citibank, N.A., as administrative agent and sole lender, dated as of September 17, 2018 (Incorporated by reference to Exhibit 10.15 filed with the Registrant’s Annual Report on Form 10-K (File No. 814-01013) filed on November 28, 2018). | ||
Joint Code of Ethics of the Registrant and Oaktree Specialty Lending Corporation (Incorporated by reference to Exhibit 14.1 filed with the Registrant's Annual Report on Form 10-K (File No. 814-01013) filed on December 8, 2017). | ||
Code of Ethics of Oaktree Capital Management, L.P. (Incorporated by reference to Exhibit 14.2 filed with the Registrant's Annual Report on Form 10-K (File No. 814-01013) filed on December 8, 2017). | ||
21 | Subsidiaries of Registrant and jurisdiction of incorporation/organizations: OCSI Senior Funding II LLC - Delaware OCSI Senior Funding Ltd. - Cayman Islands | |
24 | Power of Attorney (Incorporated by reference to the signature page to the Registrant’s Annual Report on Form 10-K (File No. 814-01013) filed on November 28, 2018). | |
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. | ||
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. | ||
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350). | ||
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350). | ||
Audited Financial Statements of OCSI Glick JV LLC as of September 30, 2018 and 2017 and for the years ended September 30, 2018, 2017 and 2016. |
OAKTREE STRATEGIC INCOME CORPORATION | ||
By: | /s/ Edgar Lee | |
Edgar Lee | ||
Chief Executive Officer | ||
By: | /s/ Mel Carlisle | |
Mel Carlisle | ||
Chief Financial Officer and Treasurer |
Signature | Title | Date | ||||
/s/ EDGAR LEE | Chief Executive Officer | December 19, 2018 | ||||
Edgar Lee | (principal executive officer) | |||||
/s/ MEL CARLISLE | Chief Financial Officer and Treasurer | December 19, 2018 | ||||
Mel Carlisle | (principal financial officer and principal accounting officer) | |||||
* | Director | December 19, 2018 | ||||
Richard W. Cohen | ||||||
* | Director | December 19, 2018 | ||||
John B. Frank | ||||||
* | Director | December 19, 2018 | ||||
Craig Jacobson | ||||||
* | Director | December 19, 2018 | ||||
Richard G. Ruben | ||||||
* | Director | December 19, 2018 | ||||
Bruce Zimmerman | ||||||
* By: | /s/ Mel Carlisle | |||||
Name: Mel Carlisle Title: Attorney-in-fact |
By: | /s/ Edgar Lee | |
Edgar Lee Chief Executive Officer |
By: | /s/ Mel Carlisle | |
Mel Carlisle Chief Financial Officer |
/s/ Edgar Lee |
Name: Edgar Lee |
Date: December 19, 2018 |
/s/ Mel Carlisle |
Name: Mel Carlisle |
Date: December 19, 2018 |
Page | ||
Financial Statements: | ||
September 30, 2018 | September 30, 2017* | |||||||
ASSETS | ||||||||
Investments at fair value (cost September 30, 2018: $159,310,299; cost September 30, 2017: $116,978,489) | $ | 160,260,951 | $ | 108,737,459 | ||||
Cash and cash equivalents | 2,055,935 | 13,891,899 | ||||||
Restricted cash | 2,036,487 | 2,249,575 | ||||||
Due from portfolio companies | 53,006 | 7,653 | ||||||
Interest receivable | 654,108 | 234,006 | ||||||
Deferred financing costs | 1,127,394 | 1,557,071 | ||||||
Total assets | $ | 166,187,881 | $ | 126,677,663 | ||||
LIABILITIES AND MEMBERS' CAPITAL | ||||||||
Liabilities: | ||||||||
Accounts payable, accrued expenses and other liabilities | $ | 65,273 | $ | 160,601 | ||||
Due to affiliate | 36,655 | — | ||||||
Interest payable | 2,578,380 | 2,440,588 | ||||||
Payables from unsettled transactions | 996,244 | — | ||||||
Distribution payable | 1,358,336 | 1,358,336 | ||||||
Senior credit facility payable | 94,281,939 | 56,881,939 | ||||||
Subordinated notes payable at fair value (proceeds September 30, 2018: $75,874,536; proceeds September 30, 2017: $73,404,435) | 66,871,054 | 65,836,199 | ||||||
Total liabilities | 166,187,881 | 126,677,663 | ||||||
Members’ capital | — | — | ||||||
Total liabilities and members’ capital | $ | 166,187,881 | $ | 126,677,663 |
Year ended September 30, 2018 | Year ended September 30, 2017* | Year ended September 30, 2016 | ||||||||||
Investment income: | ||||||||||||
Interest income | $ | 9,823,972 | $ | 11,148,203 | $ | 14,109,946 | ||||||
PIK interest income | — | 53,620 | 33,170 | |||||||||
Fee income | 77,999 | 160,984 | 95,756 | |||||||||
Total investment income | 9,901,971 | 11,362,807 | 14,238,872 | |||||||||
Expenses: | ||||||||||||
Interest expense | 11,433,877 | 11,055,880 | 10,780,919 | |||||||||
Professional fees | 171,759 | 175,353 | 152,534 | |||||||||
General and administrative expenses | 40,115 | 49,207 | 54,833 | |||||||||
Total expenses | 11,645,751 | 11,280,440 | 10,988,286 | |||||||||
Net investment income (loss) | (1,743,780 | ) | 82,367 | 3,250,586 | ||||||||
Net realized and unrealized gain (loss): | ||||||||||||
Net unrealized appreciation (depreciation) on investments and receivable from secured financing arrangement | 9,191,682 | (2,324,377 | ) | (3,742,420 | ) | |||||||
Net realized loss on investments | (8,883,148 | ) | (3,873,454 | ) | (3,119,735 | ) | ||||||
Net unrealized (appreciation) depreciation on subordinated notes payable | 1,435,246 | (569,031 | ) | 7,574,694 | ||||||||
Total net realized and unrealized gain (loss) | 1,743,780 | (6,766,862 | ) | 712,539 | ||||||||
Net increase (decrease) in members’ capital resulting from operations | $ | — | $ | (6,684,495 | ) | $ | 3,963,125 |
Oaktree Strategic Income Corporation | GF Equity Funding 2014 LLC | Total Members’ Capital | ||||||||||
Members’ capital, September 30, 2015 | $ | 4,476,824 | $ | 639,546 | $ | 5,116,370 | ||||||
Capital contributions | 1,229,375 | 175,625 | 1,405,000 | |||||||||
Distributions | (2,712,500 | ) | (387,500 | ) | (3,100,000 | ) | ||||||
Net increase in members' capital resulting from operations | 3,467,734 | 495,391 | 3,963,125 | |||||||||
Members’ capital, September 30, 2016 | $ | 6,461,433 | $ | 923,062 | $ | 7,384,495 | ||||||
Distributions* | (612,500 | ) | (87,500 | ) | (700,000 | ) | ||||||
Net decrease in members' capital resulting from operations* | (5,848,933 | ) | (835,562 | ) | (6,684,495 | ) | ||||||
Members’ capital, September 30, 2017* | $ | — | $ | — | $ | — | ||||||
Net increase (decrease) in members' capital resulting from operations | — | — | — | |||||||||
Members’ capital, September 30, 2018 | $ | — | $ | — | $ | — | ||||||
Remaining capital commitment, September 30, 2018 | $ | 1,638,249 | $ | 234,036 | $ | 1,872,285 |
Year ended September 30, 2018 | Year ended September 30, 2017* | Year ended September 30, 2016 | ||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net increase (decrease) in members' capital resulting from operations | $ | — | $ | (6,684,495 | ) | $ | 3,963,125 | |||||||
Adjustments to reconcile net increase (decrease) in members’ capital resulting from operations to net cash provided by (used in) operating activities: | ||||||||||||||
Net unrealized (appreciation) depreciation on investments and receivable from secured financing arrangement | (9,191,682 | ) | 2,324,377 | 3,742,420 | ||||||||||
Net realized loss on investments | 8,883,148 | 3,873,454 | 3,119,735 | |||||||||||
Net unrealized appreciation (depreciation) on subordinated notes payable | (1,435,246 | ) | 569,031 | (7,574,694 | ) | |||||||||
PIK interest income | — | (53,620 | ) | (33,170 | ) | |||||||||
Accretion of original issue discount/premium on investments | (609,152 | ) | (841,047 | ) | (808,381 | ) | ||||||||
Recognition of fee income | — | (2,306 | ) | 2,306 | ||||||||||
PIK interest expense | 2,470,101 | 255,001 | — | |||||||||||
Amortization of deferred financing costs | 435,927 | 283,103 | 283,104 | |||||||||||
Purchases of investments | (122,034,536 | ) | (9,056,696 | ) | (66,774,005 | ) | ||||||||
Principal payments received on investments | 59,674,325 | 68,343,987 | 52,870,383 | |||||||||||
Proceeds from sale of investments | 11,754,405 | 20,368,037 | 3,123,705 | |||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Increase in receivable from secured financing arrangement | — | — | (4,985,500 | ) | ||||||||||
(Increase) decrease in restricted cash | 213,088 | 1,093,728 | (1,155,170 | ) | ||||||||||
(Increase) decrease in receivable from unsettled transactions | — | 952,591 | (952,591 | ) | ||||||||||
Increase in due from portfolio companies | (45,353 | ) | (7,653 | ) | — | |||||||||
(Increase) decrease in interest receivable | (420,102 | ) | 88,762 | (187,358 | ) | |||||||||
Decrease in other assets | — | — | 4,375 | |||||||||||
Increase (decrease) in interest payable | 137,792 | (85,602 | ) | 701,147 | ||||||||||
Increase (decrease) in accounts payable, accrued expenses and other liabilities | (95,328 | ) | 30,582 | 100,019 | ||||||||||
Increase in due to affiliate | 36,655 | — | — | |||||||||||
Increase in payables from unsettled transactions | 996,244 | — | — | |||||||||||
Net cash provided by (used in) operating activities | (49,229,714 | ) | 81,451,234 | (14,560,550 | ) | |||||||||
Cash flows from financing activities: | ||||||||||||||
Capital contributions received | — | — | 1,282,500 | |||||||||||
Distributions paid | — | (806,243 | ) | (2,470,421 | ) | |||||||||
Issuance of subordinated notes | — | — | 11,366,252 | |||||||||||
Borrowings under senior credit facility | 51,900,000 | — | — | |||||||||||
Repayments under senior credit facility | (14,500,000 | ) | (67,733,697 | ) | 2,235,000 | |||||||||
Deferred financing costs paid | (6,250 | ) | — | — | ||||||||||
Net cash provided by (used in) financing activities | 37,393,750 | (68,539,940 | ) | 12,413,331 | ||||||||||
Net increase (decrease) in cash and cash equivalents | (11,835,964 | ) | 12,911,294 | (2,147,219 | ) | |||||||||
Cash and cash equivalents, beginning of period | 13,891,899 | 980,605 | 3,127,824 | |||||||||||
Cash and cash equivalents, end of period | $ | 2,055,935 | $ | 13,891,899 | $ | 980,605 | ||||||||
Supplemental information: | ||||||||||||||
Cash paid for interest | $ | 8,390,056 | $ | 10,603,378 | $ | 9,796,668 | ||||||||
Non-cash operating activities: | ||||||||||||||
Non-cash exchange of investments | $ | — | $ | — | $ | 1,225,000 | ||||||||
Non-cash investment restructuring | $ | — | $ | — | $ | 2,293,945 | ||||||||
Non-cash purchases of investment | $ | — | $ | (4,985,500 | ) | $ | — | |||||||
Non-cash decrease in receivable from secured financing arrangement | $ | — | $ | 4,985,500 | $ | — | ||||||||
Non-cash financing activities: | ||||||||||||||
Non-cash capital contributions | $ | — | $ | — | $ | 122,500 | ||||||||
Non-cash issuance of subordinated notes | $ | 2,470,101 | $ | 255,001 | $ | 1,102,500 |
Portfolio Company /Type of Investment (1)(2) | Region (3) | Industry | Cash Interest Rate (2) | Principal (4) | Cost | Fair Value | |||||||||||
AI Ladder (Luxembourg) Subco S.a.r.l | International | Electrical components & equipment | |||||||||||||||
First Lien Term Loan B, LIBOR+4.5% cash due 7/9/2025 | 7.02 | % | $ | 5,000,000 | $ | 4,853,898 | $ | 5,029,700 | |||||||||
4,853,898 | 5,029,700 | ||||||||||||||||
Air Newco LLC | International | IT consulting & other services | |||||||||||||||
First Lien Term Loan B, LIBOR+4.75% cash due 5/31/2024 (5) | 7.03 | % | 7,500,000 | 7,481,250 | 7,575,000 | ||||||||||||
7,481,250 | 7,575,000 | ||||||||||||||||
AL Midcoast Holdings LLC | Southwest | Oil & gas storage & transportation | |||||||||||||||
First Lien Term Loan B, LIBOR+5.5% cash due 8/1/2025 | 7.84 | % | 7,000,000 | 6,930,000 | 7,028,455 | ||||||||||||
6,930,000 | 7,028,455 | ||||||||||||||||
Altice France S.A. | International | Integrated telecommunication services | |||||||||||||||
First Lien Term Loan B13, LIBOR+4% cash due 8/14/2026 | 6.16 | % | 3,000,000 | 2,925,338 | 2,982,855 | ||||||||||||
2,925,338 | 2,982,855 | ||||||||||||||||
Alvogen Pharma US Inc. | Northeast | Pharmaceuticals | |||||||||||||||
First Lien Term Loan B, LIBOR+4.75% (1% floor) cash due 4/1/2022 | 6.99 | % | 6,875,051 | 6,875,051 | 6,942,358 | ||||||||||||
6,875,051 | 6,942,358 | ||||||||||||||||
Ancile Solutions, Inc. | Northeast | Application software | |||||||||||||||
First Lien Term Loan, LIBOR+7% (1% floor) cash due 6/30/2021(5) | 9.39 | % | 3,750,800 | 3,719,206 | 3,728,294 | ||||||||||||
3,719,206 | 3,728,294 | ||||||||||||||||
Aptos, Inc. | Southeast | Computer & electronics retail | |||||||||||||||
First Lien Term Loan, LIBOR+5.5% cash due 7/23/2025 | 7.74 | % | 3,000,000 | 2,970,000 | 2,996,250 | ||||||||||||
2,970,000 | 2,996,250 | ||||||||||||||||
Asset International, Inc. | Northeast | Research & consulting services | |||||||||||||||
First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 12/30/2024 (5) | 6.89 | % | 3,970,000 | 3,899,167 | 3,952,818 | ||||||||||||
3,899,167 | 3,952,818 | ||||||||||||||||
Bison Midstream Holdings LLC | West | Oil & gas equipment & services | |||||||||||||||
First Lien Term Loan B, LIBOR+4% cash due 5/21/2025 | 6.17 | % | 4,987,500 | 4,963,823 | 4,971,914 | ||||||||||||
4,963,823 | 4,971,914 | ||||||||||||||||
California Pizza Kitchen, Inc. | Northeast | Restaurants | |||||||||||||||
First Lien Term Loan, LIBOR+6% (1% floor) cash due 8/23/2022 | 8.39 | % | 4,900,000 | 4,888,197 | 4,777,500 | ||||||||||||
4,888,197 | 4,777,500 | ||||||||||||||||
Chloe Ox Parent LLC | Southwest | Healthcare services | |||||||||||||||
First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 12/23/2024 | 6.89 | % | 5,970,000 | 5,915,738 | 5,992,388 | ||||||||||||
5,915,738 | 5,992,388 | ||||||||||||||||
CM Delaware LLC | International | Interactive media & services | |||||||||||||||
First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 3/18/2021 (5) | 7.64 | % | 2,053,658 | 2,052,561 | 2,002,316 | ||||||||||||
2,052,561 | 2,002,316 |
Portfolio Company /Type of Investment (1)(2) | Region (3) | Industry | Cash Interest Rate (2) | Principal (4) | Cost | Fair Value | |||||||||||
Eton | Southeast | Research & consulting services | |||||||||||||||
Second Lien Term Loan, LIBOR+7.5% cash due 5/1/2026 | 9.74 | % | $ | 5,000,000 | $ | 4,976,145 | $ | 5,025,000 | |||||||||
4,976,145 | 5,025,000 | ||||||||||||||||
Falmouth Group Holdings Corp. | West | Specialty chemicals | |||||||||||||||
First Lien Term Loan B, LIBOR+6.75% (1% floor) cash due 12/13/2021 (5) | 8.99 | % | 4,330,233 | 4,295,307 | 4,330,288 | ||||||||||||
4,295,307 | 4,330,288 | ||||||||||||||||
Gigamon, Inc. | West | Systems software | |||||||||||||||
First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 12/27/2024 | 6.89 | % | 5,955,000 | 5,901,647 | 5,999,664 | ||||||||||||
5,901,647 | 5,999,664 | ||||||||||||||||
IBC Capital Ltd. | International | Metal & glass containers | |||||||||||||||
First Lien Term Loan B, LIBOR+3.75% cash due 9/11/2023 | 6.09 | % | 4,975,000 | 4,962,562 | 5,015,421 | ||||||||||||
4,962,562 | 5,015,421 | ||||||||||||||||
Indivior Finance S.a.r.l | International | Pharmaceuticals | |||||||||||||||
First Lien Term Loan B, LIBOR+4.5% (1% floor) cash due 12/19/2022 | 6.85 | % | 4,732,907 | 4,712,773 | 4,718,117 | ||||||||||||
4,712,773 | 4,718,117 | ||||||||||||||||
Integro Parent, Inc. | Northeast | Insurance brokers | |||||||||||||||
First Lien Term Loan, LIBOR+5.75% (1% floor) cash due 10/31/2022 (5) | 8.07 | % | 4,863,924 | 4,767,629 | 4,876,084 | ||||||||||||
4,767,629 | 4,876,084 | ||||||||||||||||
McDermott Technology (Americas) Inc. | Southwest | Oil & gas equipment & services | |||||||||||||||
First Lien Term Loan B, LIBOR+5% (1% floor) cash due 5/12/2025 | 7.24 | % | 7,960,000 | 7,808,276 | 8,077,728 | ||||||||||||
7,808,276 | 8,077,728 | ||||||||||||||||
MHE Intermediate Holdings, LLC | Midwest | Diversified support services | |||||||||||||||
First Lien Term Loan B, LIBOR+5% (1% floor) cash due 3/8/2024 (5) | 7.39 | % | 4,186,250 | 4,119,789 | 4,147,707 | ||||||||||||
Delayed Draw Term Loan, LIBOR+5% (1% floor) cash due 3/8/2024 (5) | 7.39 | % | 845,676 | 835,249 | 837,883 | ||||||||||||
4,955,038 | 4,985,590 | ||||||||||||||||
Morphe LLC | Southwest | Personal products | |||||||||||||||
First Lien Term Loan, LIBOR+6% (1% floor) cash due 2/10/2023 (5) | 8.40 | % | 3,412,500 | 3,382,166 | 3,412,500 | ||||||||||||
3,382,166 | 3,412,500 | ||||||||||||||||
Northern Star Industries Inc. | Midwest | Electrical components & equipment | |||||||||||||||
First Lien Term Loan B, LIBOR+4.75% (1% floor) cash due 3/31/2025 (5) | 7.08 | % | 5,472,500 | 5,447,047 | 5,479,341 | ||||||||||||
5,447,047 | 5,479,341 | ||||||||||||||||
Novetta Solutions, LLC | Southeast | Application software | |||||||||||||||
First Lien Term Loan, LIBOR+5% (1% floor) cash due 10/17/2022 (5) | 7.25 | % | 5,929,606 | 5,878,236 | 5,759,129 | ||||||||||||
5,878,236 | 5,759,129 | ||||||||||||||||
OCI Beaumont LLC | Southwest | Commodity chemicals | |||||||||||||||
First Lien Term Loan B, LIBOR+4.25% (1% floor) cash due 3/13/2025 | 6.39 | % | 6,965,000 | 6,956,910 | 7,078,288 | ||||||||||||
6,956,910 | 7,078,288 | ||||||||||||||||
R1 RCM Inc. | Midwest | Healthcare services | |||||||||||||||
First Lien Term Loan B, LIBOR+5.25% cash due 5/8/2025 (5) | 7.65 | % | 7,000,000 | 6,800,665 | 7,017,500 | ||||||||||||
6,800,665 | 7,017,500 |
Portfolio Company /Type of Investment (1)(2) | Region (3) | Industry | Cash Interest Rate (2) | Principal (4) | Cost | Fair Value | |||||||||||
RSC Acquisition, Inc. | Northeast | Trading companies & distributors | |||||||||||||||
First Lien Term Loan, LIBOR+4.25% (1% floor) cash due 11/30/2022 (5) | 6.71 | % | $ | 3,889,854 | $ | 3,871,269 | $ | 3,880,130 | |||||||||
3,871,269 | 3,880,130 | ||||||||||||||||
SHO Holding I Corporation | Southeast | Footwear | |||||||||||||||
First Lien Term Loan, LIBOR+5% (1% floor) cash due 11/18/2022 | 7.34 | % | 6,321,250 | 6,283,276 | 6,005,189 | ||||||||||||
6,283,276 | 6,005,189 | ||||||||||||||||
Tribe Buyer LLC | Midwest | Human resource & employment services | |||||||||||||||
First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 2/16/2024 | 6.74 | % | 5,939,699 | 5,926,444 | 5,984,248 | ||||||||||||
5,926,444 | 5,984,248 | ||||||||||||||||
Unimin Corp. | Southwest | Oil & gas equipment & services | |||||||||||||||
First Lien Term Loan, LIBOR+3.75% (1.00% floor) cash due 5/17/2025 | 6.14 | % | 6,982,500 | 6,982,500 | 6,621,714 | ||||||||||||
6,982,500 | 6,621,714 | ||||||||||||||||
Verra Mobility, Corp. | Southwest | Data processing & outsourced services | |||||||||||||||
First Lien Term Loan B, LIBOR+3.75% (1% floor) cash due 2/28/2025 | 5.99 | % | 4,977,494 | 4,957,752 | 5,008,602 | ||||||||||||
4,957,752 | 5,008,602 | ||||||||||||||||
WP CPP Holdings, LLC | Midwest | Aerospace & defense | |||||||||||||||
Second Lien Term Loan, LIBOR+7.75% cash due 4/30/2026 | 10.15 | % | 3,000,000 | 2,970,428 | 3,006,570 | ||||||||||||
2,970,428 | 3,006,570 | ||||||||||||||||
Total Portfolio Investments | $ | 159,310,299 | $ | 160,260,951 | |||||||||||||
Cash and Cash Equivalents | $ | 2,055,935 | $ | 2,055,935 | |||||||||||||
Total Portfolio Investments, Cash and Cash Equivalents | $ | 161,366,234 | $ | 162,316,886 |
(3) | The region 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. |
(4) | Principal includes accumulated payment in kind ("PIK") interest and is net of repayments. |
Portfolio Company /Type of Investment (1)(2) | Region (3) | Industry | Cash Interest Rate (2) | Principal (4) | Cost | Fair Value | |||||||||||
Air Newco LLC | International | IT consulting & other services | |||||||||||||||
First Lien Term Loan B, LIBOR+5.5% (1% floor) cash due 3/20/2022 | 6.82 | % | $ | 8,160,622 | $ | 8,141,224 | $ | 8,099,417 | |||||||||
8,141,224 | 8,099,417 | ||||||||||||||||
Ameritox Ltd. (5) | Northeast | Healthcare services | |||||||||||||||
First Lien Term Loan, LIBOR+5% (1% floor) cash 3% PIK due 4/11/2021 | 6.33 | % | 2,287,177 | 2,243,202 | 265,211 | ||||||||||||
119,910.76 Class B Preferred Units in Ameritox Holdings II, LLC | 119,911 | — | |||||||||||||||
368.96 Class A Common Units in Ameritox Holdings II, LLC | 2,174,034 | — | |||||||||||||||
4,537,147 | 265,211 | ||||||||||||||||
Ancile Solutions, Inc. | Northeast | Internet software & services | |||||||||||||||
First Lien Term Loan, LIBOR+7% (1% floor) cash due 6/30/2021 | 8.33 | % | 4,042,355 | 3,995,621 | 4,010,198 | ||||||||||||
3,995,621 | 4,010,198 | ||||||||||||||||
Aptos, Inc. | West | Data processing & outsourced services | |||||||||||||||
First Lien Term Loan B, LIBOR+6.75% (1% floor) cash due 9/1/2022 | 8.08 | % | 7,920,000 | 7,790,262 | 7,840,800 | ||||||||||||
7,790,262 | 7,840,800 | ||||||||||||||||
Beyond Trust Software, Inc. | Southwest | Application software | |||||||||||||||
First Lien Term Loan, LIBOR+7% (1% floor) cash due 9/25/2019 | 8.33 | % | 11,267,524 | 11,220,478 | 11,267,116 | ||||||||||||
11,220,478 | 11,267,116 | ||||||||||||||||
California Pizza Kitchen, Inc. | Northeast | Restaurants | |||||||||||||||
First Lien Term Loan, LIBOR+6% (1% floor) cash due 8/23/2022 | 7.24 | % | 4,950,000 | 4,938,077 | 4,917,008 | ||||||||||||
4,938,077 | 4,917,008 | ||||||||||||||||
Central Security Group, Inc. | Southwest | Specialized consumer services | |||||||||||||||
First Lien Term Loan, LIBOR+5.625% (1% floor) cash due 10/6/2021 | 6.86 | % | 3,876,067 | 3,880,408 | 3,892,211 | ||||||||||||
3,880,408 | 3,892,211 | ||||||||||||||||
CM Delaware LLC | International | Advertising | |||||||||||||||
First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 3/18/2021 | 6.58 | % | 2,075,162 | 2,073,617 | 2,064,786 | ||||||||||||
2,073,617 | 2,064,786 | ||||||||||||||||
Compuware Corporation | Midwest | Internet software & services | |||||||||||||||
First Lien Term Loan B3, LIBOR+4.25% (1% floor) cash due 12/15/2021 | 5.49 | % | 6,279,920 | 6,225,992 | 6,358,419 | ||||||||||||
6,225,992 | 6,358,419 | ||||||||||||||||
Falmouth Group Holdings Corp. | West | Specialty chemicals | |||||||||||||||
First Lien Term Loan, LIBOR+6.75% (1% floor) cash due 12/13/2021 | 8.08 | % | 4,610,174 | 4,572,990 | 4,610,400 | ||||||||||||
4,572,990 | 4,610,400 | ||||||||||||||||
Integro Parent Inc. | Northeast | Insurance brokers | |||||||||||||||
First Lien Term Loan, LIBOR+5.75% (1% floor) cash due 10/31/2022 | 7.06 | % | 4,913,924 | 4,790,511 | 4,901,639 | ||||||||||||
4,790,511 | 4,901,639 | ||||||||||||||||
Metamorph US 3, LLC (5) | Northeast | Internet software & services | |||||||||||||||
First Lien Term Loan, LIBOR+5.5% (1% floor) 2% PIK cash due 12/1/2020 | 6.74 | % | 6,825,900 | 6,477,372 | 2,592,115 | ||||||||||||
6,477,372 | 2,592,115 |
Portfolio Company /Type of Investment (1)(2) | Region (3) | Industry | Cash Interest Rate (2) | Principal (4) | Cost | Fair Value | |||||||||||
MHE Intermediate Holdings, LLC | Midwest | Diversified support services | |||||||||||||||
First Lien Term Loan B LIBOR+5% (1% floor) cash due 3/11/2024 | 6.33 | % | $ | 4,228,750 | $ | 4,150,304 | $ | 4,228,752 | |||||||||
Delayed Draw Term Loan LIBOR+5% (1% floor) cash due 3/11/2024 | 6.33 | % | 667,510 | 635,208 | 667,510 | ||||||||||||
4,785,512 | 4,896,262 | ||||||||||||||||
Motion Recruitment Partners LLC | Northeast | Human resources & employment services | |||||||||||||||
First Lien Term Loan, LIBOR+6% (1% floor) cash due 2/13/2020 | 7.24 | % | 8,659,650 | 8,659,646 | 8,659,223 | ||||||||||||
8,659,646 | 8,659,223 | ||||||||||||||||
NAVEX Global, Inc. | West | Internet software & services | |||||||||||||||
First Lien Term Loan, LIBOR+4.25% (1% floor) cash due 11/19/2021 | 5.49 | % | 2,977,041 | 2,967,620 | 2,988,205 | ||||||||||||
2,967,620 | 2,988,205 | ||||||||||||||||
New Trident Holdcorp, Inc. | Northeast | Healthcare services | |||||||||||||||
First Lien Term Loan B, LIBOR+5.75% (1.25% floor) cash due 7/31/2019 | 7.08 | % | 2,018,206 | 2,000,877 | 1,453,109 | ||||||||||||
2,000,877 | 1,453,109 | ||||||||||||||||
Novetta Solutions, LLC | Southeast | Diversified support services | |||||||||||||||
First Lien Term Loan, LIBOR+5% (1% floor) cash due 10/16/2022 | 6.34 | % | 5,990,978 | 5,932,073 | 5,826,226 | ||||||||||||
5,932,073 | 5,826,226 | ||||||||||||||||
Poseidon Merger Sub, Inc. | Northeast | Advertising | |||||||||||||||
Second Lien Term Loan, LIBOR+8.5% (1% floor) cash due 8/15/2023 | 9.81 | % | 3,000,000 | 2,933,633 | 3,030,000 | ||||||||||||
2,933,633 | 3,030,000 | ||||||||||||||||
RSC Acquisition, Inc. | Northeast | Insurance brokers | |||||||||||||||
First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 11/30/2022 | 6.58 | % | 3,930,134 | 3,912,198 | 3,890,832 | ||||||||||||
3,912,198 | 3,890,832 | ||||||||||||||||
SHO Holding I Corporation | Southeast | Footwear | |||||||||||||||
First Lien Term Loan, LIBOR+5% (1% floor) cash due 10/27/2022 | 6.24 | % | 6,386,250 | 6,338,479 | 6,306,422 | ||||||||||||
6,338,479 | 6,306,422 | ||||||||||||||||
TruckPro, LLC | Southeast | Auto parts & equipment | |||||||||||||||
First Lien Term Loan, LIBOR+5% (1% floor) cash due 8/6/2018 | 6.24 | % | 1,823,268 | 1,821,822 | 1,825,054 | ||||||||||||
1,821,822 | 1,825,054 | ||||||||||||||||
Valet Merger Sub, Inc. | Southeast | Environmental & facilities services | |||||||||||||||
First Lien Term Loan, LIBOR+7% (1% floor) cash due 9/24/2021 | 8.24 | % | 3,920,000 | 3,877,655 | 3,919,865 | ||||||||||||
Incremental Term Loan, LIBOR+7% (1% floor) cash due 9/24/2021 | 8.24 | % | 1,027,425 | 1,006,080 | 1,027,390 | ||||||||||||
4,883,735 | 4,947,255 | ||||||||||||||||
Vubiquity, Inc. | West | Application software | |||||||||||||||
First Lien Term Loan, LIBOR+5.5% (1% floor) cash due 8/12/2021 | 6.83 | % | 4,126,500 | 4,099,195 | 4,095,551 | ||||||||||||
4,099,195 | 4,095,551 | ||||||||||||||||
Total Portfolio Investments | $ | 116,978,489 | $ | 108,737,459 | |||||||||||||
Cash and Cash Equivalents | |||||||||||||||||
Wells Fargo Bank Institutional Money Market Fund | $ | 9,351,820 | $ | 9,351,820 | |||||||||||||
Other cash accounts | $ | 4,540,079 | $ | 4,540,079 | |||||||||||||
Total Cash and Cash Equivalents | $ | 13,891,899 | $ | 13,891,899 | |||||||||||||
Total Portfolio Investments, Cash and Cash Equivalents | $ | 130,870,388 | $ | 122,629,358 |
(3) | The region 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. |
(4) | Principal includes accumulated PIK interest and is net of repayments. |
(5) | This investment was on cash non-accrual status as of September 30, 2017. Cash non-accrual status is inclusive of other non-cash income. |
• | Level 1 — Unadjusted, quoted prices in active markets for identical assets or liabilities as of the measurement date. |
• | Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data at the measurement date for substantially the full term of the assets or liabilities. |
• | Level 3 — Unobservable inputs that reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. |