Debt

6 Months Ended

Jun. 30, 2025

As a BDC, we are permitted, under specified conditions, to issue multiple classes of indebtedness and one class of stock

senior to shares of our common stock if our asset coverage, as defined in the 1940 Act, is at least equal to 150%, subject to

receipt of certain approvals and compliance with certain disclosure requirements, immediately after each such issuance.

Section 61(a) of the 1940 Act reduces the asset coverage requirements applicable to BDCs from 200% to 150% so long as

the BDC meets certain disclosure requirements and obtains certain approvals. In April 2021, our Board and initial

stockholder approved the reduced asset coverage ratio. The reduced asset coverage requirements permit us to increase the

maximum amount of leverage that we are permitted to incur by reducing the asset coverage requirements applicable to us

from 200% to 150%. As defined in the 1940 Act, asset coverage of 150% means that for every $100 of net assets we hold,

we may raise $200 from borrowing and issuing senior securities as compared to $100 from borrowing and issuing senior

securities for every $100 of net assets under a 200% asset coverage requirement. In addition, while any senior securities

remain outstanding, we must make provisions to prohibit any distribution to our stockholders or the repurchase of such

securities or shares unless we meet the applicable asset coverage ratios at the time of the distribution or repurchase. As of

June 30, 2025 and December 31, 2024, the Company’s asset coverage ratio based on the aggregate amount outstanding of

senior securities was 242.7% and 269.2%.

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the

Company's total debt for the three and six months ended June 30, 2025 and June 30, 2024:


	For the three months ended June 30, 2025	For the three months ended June 30, 2024	For the six months ended June 30, 2025	For the six months ended June 30, 2024
Interest expense	$6,854	$1,469	$12,453	$2,190
Non-usage fee (1)	(3)	10	44	26
Amortization of deferred financing costs	403	146	772	331
Weighted average stated interest rate	6.06%	7.17%	6.08%	6.93%
Weighted average outstanding balance	$453,411	$82,486	$412,810	$63,612

(1)Non-usage fee includes the portion of the facility agent fee applicable to the undrawn portion of the Subscription

Facility.

Credit Facilities

ING Credit Facility

On June 18, 2024, the Company entered into a Senior Secured Revolving Credit Agreement (as amended, restated,

supplemented, or otherwise modified from time to time, the “ING Credit Facility”) with ING Capital, LLC, as

Administrative Agent, Lead Arranger, Bookrunner and Sustainability Structuring Agent.

On September 20, 2024, the Company entered into Amendment No. 1 to the Senior Secured Revolving Credit Agreement

(the “First Amendment”), which amends the ING Credit Facility. The parties to the First Amendment include the

Company, the lenders party thereto, Subsidiary Guarantors party thereto and ING Capital LLC, as Administrative Agent.

The First Amendment provides for, among other things, an upsize in the total commitments from lenders under the credit

facility from $75 million to $150 million.

On December 12, 2024, the Company entered into that certain Lender Joinder Agreement (the “First Lender Joinder

Agreement”), pursuant to which, through the accordion feature in the ING Credit Facility, the aggregate commitments

under the ING Credit Facility increased from $150 million to $175 million. The parties to the First Lender Joinder

Agreement include the Company, BankUnited, N.A., as additional lender, the Subsidiary Guarantors party thereto and the

Administrative Agent.

On December 20, 2024, the Company entered into that certain Lender Joinder Agreement (the “Second Lender Joinder

Agreement”), pursuant to which, through the accordion feature in the ING Credit Facility, the aggregate commitments

under the ING Credit Facility increased from $175 million to $225 million. The parties to the Second Lender Joinder

Agreement include the Company, Customers Bank, as additional lender, the Subsidiary Guarantors party thereto and the

Administrative Agent.

On March 20, 2025, the Company entered into that certain Lender Joinder Agreement (the “Third Joinder Agreement”),

pursuant to which, through the accordion feature in the ING Credit Facility, the aggregate commitments under the ING

Credit Facility increased from $225 million to $250 million. The parties to the Third Lender Joinder Agreement include the

Company, Customers Bank, as additional lender, the Subsidiary Guarantors party thereto and the Administrative Agent.

On April 24, 2025, the Company entered into Amendment No. 2 to the Senior Secured Revolving Credit Agreement (the

“Second Amendment”), which amends the ING Credit Facility. The parties to the Second Amendment include the

Company, the lenders party thereto, Subsidiary Guarantors party thereto and ING Capital LLC, as Administrative Agent.

The Second Amendment provides for, among other things, an increase of the accordion provision to permit increases to a

total facility amount of up to $275 million and permit the Company to do up to $30 million of financing under repurchase

agreements.

On April 24, 2025 the Company entered into a waiver letter permitting the Company to enter into a repurchase agreement

with Midcap Financial Trust dated as of April 17, 2025.

On May 30, 2025, the Company entered into that certain Lender Joinder Agreement (the “Fourth Joinder Agreement”),

pursuant to which, through the accordion feature in the ING Credit Facility, the aggregate commitments under the ING

Credit Facility increased from $250 million to $275 million. The parties to the Fourth Lender Joinder Agreement include

the Company, City National Bank, as additional lender, the Subsidiary Guarantors party thereto and the Administrative

Agent.

The ING Credit Facility is guaranteed by certain subsidiaries of the Company in existence as of the closing date of the ING

Credit Facility, and will be guaranteed by certain subsidiaries of the Company that are formed or acquired by the Company

in the future (collectively, the “Guarantors”). Proceeds of the ING Credit Facility may be used for general corporate

purposes, including the funding of portfolio investments.

The ING Credit Facility allows the Company to borrow up to $275 million, subject to certain restrictions, including

availability under a borrowing base, which is based upon unused capital commitments made by investors in the Company

and the value of eligible portfolio investments. The amount of permissible borrowings under the ING Credit Facility may

be increased through an uncommitted accordion feature through which existing and new lenders may, at their option, agree

to provide additional financing up to an aggregate of $300 million. The ING Credit Facility is secured by a perfected first-

priority interest in the unused commitments of the Company’s investors and substantially all of the eligible portfolio

investments held by the Company and each Guarantor, subject to certain exceptions.

The availability period with respect to the revolving credit facility under the ING Credit Facility will terminate on June 19,

2028 (“Commitment Termination Date”) and the ING Credit Facility will mature on June 18, 2029 (“Maturity Date”).

During the period from the Commitment Termination Date to the Maturity Date, the Company will be obligated to make

mandatory prepayments under the ING Credit Facility out of the proceeds of certain asset sales and other recovery events.

The Company may borrow amounts in U.S. dollars or certain other permitted currencies. Amounts drawn under the ING

Credit Facility in U.S. dollars will bear interest at either (i) term SOFR plus margin of 2.70% per annum, or (ii) the

alternate base rate plus margin of 1.70% per annum. In each case, the annual interest rate will be adjustable based on a

sustainability linked loan pricing structure that directly references our 2030 Goals, with ING acting as the sole

Sustainability Structuring Agent. The Company may elect either the term SOFR or alternate base rate at the time of

drawdown, and loans denominated in U.S. dollars may be converted from one rate to another at any time at the Company’s

option, subject to certain conditions. Amounts drawn under the ING Credit Facility in other permitted currencies will bear

interest at the relevant rate specified therein plus an applicable margin (including any applicable credit spread adjustment).

The ING Credit Facility includes customary affirmative and negative covenants, including certain limitations on the

incurrence of additional indebtedness and liens, as well as usual and customary events of default for revolving credit

facilities of this nature.

As of June 30, 2025 and December 31, 2024, the Company had $254.5 million and $208.2 million, respectively, in

outstanding borrowings from the ING Facility.

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the

ING Facility for the three and six months ended June 30, 2025 and June 30, 2024:


	For the three months ended June 30, 2025	For the three months ended June 30, 2024	For the six months ended June 30, 2025	For the six months ended June 30, 2024
Interest expense	$4,327	$215	$7,525	$215
Non-usage fee (1)	(3)	—	44	—
Amortization of financing costs	158	9	296	9
Weighted average stated interest rate	6.95%	8.08%	7.08%	8.08%
Weighted average outstanding balance	$249,702	$10,714	$214,452	$5,357

(1)Non-usage fee includes the portion of the facility agent fee applicable to the undrawn portion of the ING Credit

Facility.

Subscription Facility

On February 2, 2022, the Company entered into a subscription-based credit agreement with Sumitomo Mitsui Banking

Corporation, which was amended on June 28, 2022, December 21, 2022, and February 1, 2024 (and as may be further

amended, modified or supplemented, the “Subscription Facility”). The Subscription Facility allowed the Company to

borrow up to $38.4 million, subject to certain restrictions, including availability under a borrowing base that was based

upon unused capital commitments made by investors in the Company. The amount of permissible borrowings under the

Subscription Facility could be increased to up to $1 billion with the consent of the lenders. The Subscription Facility

matured on May 2, 2024 and bore interest at an annual rate of: (i) with respect to reference rate loans, a reference rate for

the period plus a margin equal to 2.50% (the "Applicable Margin") and (ii) with respect to alternative rate loans, the

greatest of (a) the administrative agent's prime rate, (b) Term SOFR with a one-month term plus the Applicable Margin and

(c) the federal funds rate plus 0.50%. Subject to certain exceptions, the Subscription Facility is secured by a first lien

security interest in the Company’s unfunded investor equity capital commitments. The Subscription Facility included

customary covenants, certain limitations on the incurrence of additional indebtedness and liens, and other maintenance

covenants, as well as usual and customary events of default for credit facilities of this nature. On May 2, 2024, the

Subscription Facility and all obligations thereunder were terminated.

As of June 30, 2025 and December 31, 2024, the Company had $0.0 million and $0.0 million, respectively, in outstanding

borrowings from the Subscription Facility.

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the

Subscription Facility for the three and six months ended June 30, 2025 and June 30, 2024:


	For the three months ended June 30, 2025	For the three months ended June 30, 2024	For the six months ended June 30, 2025	For the six months ended June 30, 2024
Interest expense	$—	$253	$—	$492
Non-usage fee (1)	—	10	—	26
Amortization of financing costs	—	75	—	218
Weighted average stated interest rate	—%	8.07%	—%	7.83%
Weighted average outstanding balance	$—	$12,659	$—	$12,642

(1)Non-usage fee includes the portion of the facility agent fee applicable to the undrawn portion of the Subscription

Facility.

SBA-Guaranteed Debentures

LS SBIC LP and LS SSBIC LP are able to borrow funds from the SBA against their regulatory capital (which

approximates equity capital in LS SBIC LP and LS SSBIC LP) that is paid in and is subject to customary regulatory

requirements, including, but not limited to, periodic examination by the SBA. As of June 30, 2025 and December 31, 2024,

the Company funded LS SBIC LP and LS SSBIC LP with an aggregate total of $115.0 million and $110.0 million,

respectively, of regulatory capital, and have $230.0 million and $192.5 million, respectively, in SBA-guaranteed

debentures outstanding. SBA debentures are non-recourse to us, have a 10-year maturity, and may be prepaid at any time

without penalty. The interest rate of SBA debentures is fixed at the time of issuance, often referred to as pooling, at a

market-driven spread over 10-year U.S. Treasury Notes. Current SBA regulations limit the amount that each of LS SBIC

LP and LS SSBIC LP may borrow to a maximum of $175.0 million, which is up to twice its potential regulatory capital.

The SBA-guaranteed debentures incurred an upfront commitment fee of 1.00% on the total commitment amount and a

2.435% issuance discount on drawdowns, which are amortized over the life of the SBA-guaranteed debentures. In addition,

an annual fee is charged on the SBA-guaranteed debentures which are amortized over the period.

The following table summarizes the Company’s SBA-guaranteed debentures as of June 30, 2025:


Issuance Date	Maturity Date	Debenture Amount	Interest Rate	SBA Annual Charge
September 15, 2023	March 1, 2034	$31,000	5.04%	0.047%
March 15, 2024	September 1, 2034	$5,960	4.38%	0.047%
June 14, 2024	September 1, 2034	$45,540	4.38%	0.129%
September 16, 2024	March 1, 2035	$82,505	4.96%	0.129%
December 12, 2024	March 1, 2035	$27,500	4.96%	0.347%
March 28, 2025	September 1, 2035	$9,995	4.76%	0.347%
June 27, 2025	September 1, 2035	$27,500	4.86%	0.347%

The following table summarizes the interest expense and amortization of financing costs incurred on the SBA-guaranteed

debentures for the three and six months ended June 30, 2025 and June 30, 2024:


	For the three months ended June 30, 2025	For the three months ended June 30, 2024	For the six months ended June 30, 2025	For the six months ended June 30, 2024
Interest expense	$2,526	$611	$4,928	$1,093
Non-usage fee	—	—	—	—
Amortization of financing costs	246	62	476	104
Weighted average stated interest rate	4.98%	5.40%	5.01%	5.67%
Weighted average outstanding balance	$203,709	$45,467	$198,359	$38,790

Repurchase Obligations

In order to finance certain investment transactions, the Company may, from time to time, enter into repurchase agreements

with Macquarie US Trading LLC (“Macquarie”), whereby the Company sells to Macquarie an investment that it holds and

concurrently enters into an agreement to repurchase the same investment (any such obligation, a “Repurchase Obligation”)

at an agreed-upon price at a future date, not to exceed 90-days from the date it was sold.

The Company entered into two repurchase agreements on May 1, 2024 which were collateralized by the Company’s term

loans to each of Salt Dental Collective (the "Salt Repurchase Obligation") and Med Learning Group, LLC (the “MLG

Repurchase Obligation” and together with the Salt Repurchase Obligation, the “May 2024 Repurchase Obligations”).

Interest under each of the May 2024 Repurchase Obligations was calculated as (a) the product of the funded amount of the

loan and (b) the product of (i) the number of days the loan is outstanding (subject to number of minimum days per the

agreement) and (ii) daily fee rate. The Company maintained effective control over the security because it is entitled and

obligated to repurchase the security before its maturity. Therefore, the repurchase agreement was treated as a secured

borrowing and not a sale. On July 30, 2024 the Company repurchased its obligation under the MLG Repurchase

Obligation.

As of June 30, 2025 and December 31, 2024, the Company had $0.0 million and $0.0 million, respectively, in outstanding

borrowings from the Repurchase Obligations.

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the

Repurchase Obligations for the three and six months ended June 30, 2025 and June 30, 2024:


	For the three months ended June 30, 2025	For the three months ended June 30, 2024	For the six months ended June 30, 2025	For the six months ended June 30, 2024
Interest expense	$—	$390	$—	$390
Non-usage fee	—	—	—	—
Amortization of financing costs	—	—	—	—
Weighted average stated interest rate	—%	11.50%	—%	11.50%
Weighted average outstanding balance (1)	$—	$13,645	$—	$6,822

The facilities of the Company consist of the following:


	June 30, 2025			December 31, 2024
	Aggregate Principal Amount Available	Principal Amount Outstanding	Unused Portion	Aggregate Principal Amount Available	Principal Amount Outstanding	Unused Portion
Secured borrowings	$275,000	$254,482	$20,518	$225,000	$208,232	$16,768
SBA-Guaranteed Debentures	230,000	230,000	—	192,505	192,505	—
Total	$505,000	$484,482	$20,518	$417,505	$400,737	$16,768

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 8A
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480434/815-10-50-8A

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480738/235-10-S50-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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-Name Accounting Standards Codification
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-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481544/470-10-50-6

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
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-Section 50
-Paragraph 6
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481544/470-10-50-6

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
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-Paragraph 1
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Section 50
-Paragraph 1B
-Subparagraph (h)
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Reference 12: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/470/tableOfContent

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 835
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-Name Accounting Standards Codification
-Section 45
-Paragraph 2
-Publisher FASB
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Paragraph 1B
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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Reference 21: http://www.xbrl.org/2003/role/disclosureRef
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-Topic 470
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+ Details