Borrowings

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Borrowings

Note 7 — Borrowings

The following table shows the Company's borrowings as of December 31, 2023 and December 31, 2022 (in thousands):

	December 31, 2023									December 31, 2022
	Total Commitment		Principal		Deferred Debt Cost(1)			Carrying Value		Total Commitment		Principal		Deferred Debt Cost(1)			Carrying Value
Credit Facility	$	550,000	$	272,000	$	(4,434	)	$	267,566	$	425,000	$	337,000	$	(4,640	)	$	332,360
April 2026 Notes		25,000		25,000		(277	)		24,723		—		—		—			—
December 2026 Notes		70,000		70,000		(573	)		69,427		70,000		70,000		(818	)		69,182
July 2027 Notes		80,500		80,500		(1,924	)		78,576		80,500		80,500		(2,380	)		78,120
August 2027 Notes		20,000		20,000		(511	)		19,489		20,000		20,000		(653	)		19,347
December 2027 Notes		51,750		51,750		(1,453	)		50,297		51,750		51,750		(1,802	)		49,948
Total	$	797,250	$	519,250	$	(9,172	)	$	510,078	$	647,250	$	559,250	$	(10,293	)	$	548,957

(1)Net of accumulated amortization.

For the years ended December 31, 2023, December 31, 2022 and December 31, 2021, the components of interest expense, amortization of deferred debt costs, unused fees on the Credit Facility (as defined below), and any other costs associated with the Company's borrowings were as follows (dollars in thousands):

	Interest Expense		Amortization of Deferred Debt Costs		Unused Facility and Other Fees (1)		Total Interest and Other Debt Financing Expenses		Weighted Average Cost of Debt
Year Ended December 31, 2023
Credit Facility	$	22,559	$	1,664	$	1,474	$	25,697		9.24	%
April 2026 Notes		1,530		87		—		1,617		8.98
December 2026 Notes		2,975		210		—		3,185		4.55
July 2027 Notes		6,038		557		—		6,595		8.19
August 2027 Notes		1,400		142		—		1,542		7.71
December 2027 Notes		4,140		367		—		4,507		8.71
Total	$	38,642	$	3,027	$	1,474	$	43,143		8.32	%
Year Ended December 31, 2022
Credit Facility	$	7,713	$	921	$	1,615	$	10,249		7.60	%
December 2026 Notes		2,734		182		—		2,916		4.52
July 2027 Notes		2,566		219		—		2,785		8.04
August 2027 Notes		467		44		—		511		7.64
December 2027 Notes		276		24		—		300		8.44
Total	$	13,756	$	1,390	$	1,615	$	16,761		6.86	%
Year Ended December 31, 2021
Credit Facility	$	2,492	$	467	$	1,126	$	4,085		5.82	%
December 2026 Notes		52		5		—		57		4.69
Total	$	2,544	$	472	$	1,126	$	4,142		5.80	%

(1)Unused facility and other fees for the year ended December 31, 2022 include supplemental fees of $0.2 million, which were predominantly incurred in the first half of 2022 and were nonrecurring in nature.

Credit Facility

On May 31, 2019, the Company entered into a Credit Agreement with KeyBank National Association, acting as administrative agent and syndication agent and the other lenders party thereto, which initially provided the Company with a $100.0 million commitment, subject to borrowing base requirements (as amended and restated from time to time, the “Credit Facility”). As of December 31, 2023, the Company had $550.0 million in total commitments available under the Credit Facility, subject to an accordion feature that allows the Company to increase the total commitments under the Credit Facility up to $600.0 million. The availability period under the Credit Facility expires on April 20, 2025 and is followed by a one-year amortization period. The stated maturity date under the Credit Facility is April 20, 2026, unless extended.

Borrowings under the Credit Facility bear interest on a per annum rate equal to the Adjusted Term Secured Overnight Financing Rate (“SOFR”) plus an applicable margin rate that ranges from 2.95% to 3.35% per annum depending on the Company’s leverage ratio and

number of eligible loans in the collateral pool. The Credit Facility provides for a variable advance rate of up to 65% on eligible term loans. The Company also pays an unused commitment fee that ranges from 0.25% to 1.00% per annum based on the total unused lender commitments under the Credit Facility.

The Credit Facility is collateralized by all eligible investment assets held by the Company. The Credit Facility contains representations, warranties, and affirmative and negative covenants customary for secured financings of this type, including certain financial covenants such as a consolidated tangible net worth requirement and a required asset coverage ratio.

For the years ended December 31, 2023 and December 31, 2022, the weighted average outstanding principal balance was $278.2 million and $134.9 million, respectively, and the weighted average effective interest rate was 8.15% and 5.89%, respectively.

2026 Notes

On December 10, 2021, the Company entered into a master note purchase agreement, completing a private debt offering of $70.0 million in aggregate principal amount of 4.25% interest-bearing unsecured Series 2021A Senior Notes due 2026 (the “December 2026 Notes”) to institutional accredited investors (as defined in Regulation D under the Securities Act of 1933, as amended (the "Securities Act")). The December 2026 Notes were issued in two closings; the initial issuance of $20.0 million closed on December 10, 2021 and the second issuance of $50.0 million closed on February 10, 2022. On April 13, 2023, the Company completed the first supplement to the master note purchase agreement, resulting in an additional private debt offering of $25.0 million in aggregate principal amount of 8.54% interest-bearing unsecured Series 2023A Senior Notes due 2026 (the “April 2026 Notes”) to institutional accredited investors (as defined in the Securities Act). The December 2026 Notes and the April 2026 Notes (collectively the "2026 Notes") are subject to a 1.00% increase in the respective interest rates in the event that, subject to certain exceptions, the 2026 Notes cease to have an investment grade rating or receive an investment grade rating below the Investment Grade (as defined in the master note purchase agreement). The 2026 Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.

December 2026 Notes

The December 2026 Notes bear an interest rate of 4.25% per year and are due on December 10, 2026, unless redeemed, purchased or prepaid prior to such date by the Company or its affiliates in accordance with their terms. Interest on the December 2026 Notes will be due semiannually in arrears on June 10 and December 10 of each year, commencing on June 10, 2022.

Aggregate costs in connection with the December 2026 Notes issuance were $1.0 million, and were capitalized and deferred. As of December 31, 2023 and December 31, 2022, unamortized deferred debt costs related to the December 2026 Notes were $0.6 million and $0.8 million, respectively.

April 2026 Notes

The April 2026 Notes bear an interest rate of 8.54% per year and are due on April 13, 2026, unless redeemed, purchased or prepaid prior to such date by the Company or its affiliates in accordance with their terms. Interest on the April 2026 Notes will be due semiannually in arrears on April 13 and October 13 of each year, commencing on October 13, 2023.

Aggregate costs in connection with the April 2026 Notes issuance were $0.4 million, and were capitalized and deferred. As of December 31, 2023 and December 31, 2022, unamortized deferred debt costs related to the April 2026 Notes were $0.3 million and $0.0 million, respectively.

2027 Notes

July 2027 Notes

On July 28, 2022, the Company issued and sold $80.5 million in aggregate principal amount of 7.50% interest-bearing unsecured Notes due 2027 (the “July 2027 Notes”) under its shelf Registration Statement on Form N-2. The July 2027 Notes were issued pursuant to the Base Indenture dated July 28, 2022 (the “Base Indenture”) and First Supplemental Indenture, dated July 28, 2022 (together with the Base Indenture, the “Indenture”), between the Company and the Trustee, U.S. Bank Trust Company, National Association.

The July 2027 Notes bear an interest rate of 7.50% per year and are due on July 28, 2027. Interest on the 2027 Notes will be due quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, commencing September 1, 2022. The July 2027 Notes may be redeemed in whole or in part at any time or from time to time at the Company’s option on or after July 28, 2024, at a redemption price of $25 per July 2027 Note plus accrued and unpaid interest payments otherwise payable for the then-current quarterly interest period accrued to the date fixed for redemption. The July 2027 Notes are general unsecured obligations of the Company that rank pari passu with the Company's existing and future unsecured, unsubordinated indebtedness.

Aggregate costs in connection with the July 2027 Notes issuance, including the underwriter’s discount and commissions, were $2.7 million, and were capitalized and deferred. As of December 31, 2023 and December 31, 2022, unamortized deferred debt costs related to the July 2027 Notes were $1.9 million and $2.4 million, respectively.

August 2027 Notes

On August 31, 2022, the Company issued and sold a private debt offering of $20.0 million in aggregate principal amount of 7.00% interest-bearing unsecured Series 2022A Senior Notes due 2027 (the “August 2027 Notes”) to HCM Master Fund Limited.

The August 2027 Notes bear an interest rate of 7.00% per year and are due on August 31, 2027, unless redeemed, purchased or prepaid prior to such date by the Company or its affiliates in accordance with their terms. Interest on the August 2027 Notes will be due semiannually in arrears on February 15 and August 15 of each year, commencing on February 15, 2023. The August 2027 Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.

Aggregate costs in connection with the August 2027 Notes issuance were $0.7 million, and were capitalized and deferred. As of December 31, 2023 and December 31, 2022, unamortized deferred debt costs related to the August 2027 Notes were $0.5 million and $0.7 million, respectively.

December 2027 Notes

On December 7, 2022, the Company issued and sold $51.75 million in aggregate principal amount of 8.00% interest-bearing unsecured Notes due December 2027 (the "December 2027 Notes") under its shelf Registration Statement on Form N-2. The December 2027 Notes were issued pursuant to the Base Indenture dated July 28, 2022 (the "Base Indenture") and Second Supplemental Indenture, dated December 7, 2022 (together with the Base Indenture, the "Indenture"), between the Company and the Trustee, U.S. Bank Trust Company, National Association.

The December 2027 Notes bear an interest rate of 8.0% per year and are due on December 28, 2027. Interest on the 2027 Notes will be due quarterly in arrears on March 1, June 1, September 1, and December 1 of each year, commencing March 1, 2023. The December 2027 Notes may be redeemed in whole or in part at any time or from time to time at the Company's option on or after December 31, 2024, at a redemption price of $25 per December 2027 Note plus accrued and unpaid interest payments otherwise payable for the then-current quarterly interest period accrued to the date fixed for redemption. The December 2027 Notes are general unsecured obligations of the Company that rank pari passu with the Company's existing and future unsecured, unsubordinated indebtedness.

Aggregate costs in connection with the December 2027 Notes issuance, including the underwriter's discount and commissions, were $1.8 million, and were capitalized and deferred. As of December 31, 2023 and December 31, 2022, unamortized deferred debt costs related to the December 2027 Notes were $1.5 million and $1.8 million, respectively.

Senior Securities

Information about the Company’s senior securities is shown in the following table for the fiscal years ended December 31, 2023, 2022, 2021, 2020, 2019 and 2018 (in thousands). No senior securities were outstanding for the fiscal years ended December 31, 2017 and prior.

Class and Period	Total Amount Outstanding Exclusive of Treasury Securities(1)		Asset Coverage per Unit(2)		Involuntary Liquidating Preference per Unit(3)		Average Market Value per Unit(4)
2027 Notes
December 31, 2023	$	152,250	$	4,593		—		N/A
December 31, 2022	$	152,250	$	4,784		—		N/A
December 31, 2021	$	—	$	—		—		N/A
December 31, 2020	$	—	$	—		—		N/A
December 31, 2019	$	—	$	—		—		N/A
December 31, 2018	$	—	$	—		—		N/A
2026 Notes
December 31, 2023	$	95,000	$	6,759		—		N/A
December 31, 2022	$	70,000	$	9,229		—		N/A
December 31, 2021	$	20,000	$	31,310		—		N/A
December 31, 2020	$	—	$	—		—		N/A
December 31, 2019	$	—	$	—		—		N/A
December 31, 2018	$	—	$	—		—		N/A
Credit Facility
December 31, 2023	$	272,000	$	3,011		—		N/A
December 31, 2022	$	337,000	$	2,709		—		N/A
December 31, 2021	$	61,000	$	10,938		—		N/A
December 31, 2020	$	99,000	$	5,710		—		N/A
December 31, 2019	$	61,000	$	7,169		—		N/A
December 31, 2018	$	—	$	—		—		N/A
Credit Facility - CIBC (5)
December 31, 2023	$	—	$	—		—		N/A
December 31, 2022	$	—	$	—		—		N/A
December 31, 2021	$	—	$	—		—		N/A
December 31, 2020	$	—	$	—		—		N/A
December 31, 2019	$	—	$	—		—		N/A
December 31, 2018	$	59,500	$	3,813		—		N/A
Total
December 31, 2023	$	519,250	$	2,054		—		N/A
December 31, 2022	$	559,250	$	2,030		—		N/A
December 31, 2021	$	81,000	$	8,484		—		N/A
December 31, 2020	$	99,000	$	5,710		—		N/A
December 31, 2019	$	61,000	$	7,169		—		N/A
December 31, 2018	$	59,500	$	3,813		—		N/A

(1)Total amount of each class of senior securities outstanding at the end of the period presented.

(2)Asset coverage per unit is the ratio of the carrying value of total assets, less all liabilities excluding indebtedness represented by senior securities in this table to the aggregate amount of senior securities representing indebtedness. Asset coverage per unit is express in terms of dollar amounts per $1,000 of indebtedness and is calculated on a consolidated basis.

(3)The amount to which such class of senior security would be entitled upon the Company’s involuntary liquidation in preference to any security junior to it. The "—" in this column indicates information that the SEC expressly does not require to be disclosed for certain types of senior securities.

(4)Not applicable because the senior securities are not registered for public trading.

(5)On June 22, 2018, the Company entered into the Credit Facility with CIBC. On May 31, 2019, in conjunction with securing and entering into the new Credit Facility, the Company terminated the Credit Facility with CIBC.