Investments

9 Months Ended

Sep. 30, 2024

Investments

Investments

3. Investments

Investments may be categorized based on the types of inputs used in valuing such investments. The level in the U.S. GAAP valuation hierarchy in which an investment falls is based on the lowest level input that is significant to the valuation of the investment in its entirety. Per ASC 820, leveling for each investment is conducted at each quarter end. Transfers between levels are made in accordance with the Company’s accounting policy. Transfers between levels are recognized as of the beginning of the reporting period.

At September 30, 2024, the Company’s investments were categorized as follows:

	Fair Value Measurements
September 30, 2024	Level 1		Level 2 (1)		Level 3		Total
Investments:
First lien secured debt (2)	$	—	$	164,194	$	158,773	$	322,967
Second lien secured debt		—		2,156		2,304		4,460
Corporate bond		—		54,355		28,184		82,539
Revolver		—		—		386		386
Equity - Preferred equity		—		—		3,151		3,151
Equity - Common stock		—		—		2,377		2,377
Total investments	$	—	$	220,705	$	195,175	$	415,880
Derivatives	$	—	$	90	$	—	$	90
Cash equivalents	$	77	$	—	$	—	$	77

3. Investments (Continued)

At December 31, 2023, the Company’s investments were categorized as follows;

	Fair Value Measurements
December 31, 2023	Level 1		Level 2 (1)		Level 3		Total
Investments:
First lien secured debt (2)	$	—	$	136,706	$	118,248	$	254,954
Second lien secured debt		—		—		2,012		2,012
Corporate bond		—		64,589		28,147		92,736
Revolver		—		5,418		584		6,002
Equity - Preferred equity		—		—		3,151		3,151
Equity - Common stock		—		—		267		267
Total investments	$	—	$	206,713	$	152,409	$	359,122
Derivatives	$	—	$	271	$	—	$	271
Cash equivalents	$	220	$	—	$	—	$	220

(1) Fair value based upon quoted prices in inactive markets or quotes for comparable investments.

(2) Includes senior secured loans.

Unobservable inputs used in the fair value measurement of Level 3 investments as of September 30, 2024 included the following:

	September 30, 2024
					Range		Weighted
	Fair Value		Valuation Technique	Unobservable Input	Low	High	Average
Corporate bond	$	14,836	Yield analysis	Market yield	12.52%	14.39%	13.46%
			EV market multiple analysis	EBITDA multiple	11.50x	12.50x	12.00x
Corporate bond		13,348	Yield analysis	Market yield	10.16%	10.16%	10.16%
			Black scholes option pricing model	Volatility	10.00%	41.50%	25.75%
			Black scholes option pricing model	Term	1.84 years	1.84 years	1.84 years
			Black scholes option pricing model	Risk free rate	3.44%	3.44%	3.44%
First lien secured debt		40,260	Yield analysis	Market yield	9.45%	11.05%	10.28%
First lien secured debt		18,581	Yield analysis	Market yield	10.52%	10.94%	10.73%
			EV market multiple analysis	EBITDA multiple	7.00x	8.00x	7.50x
First lien secured debt		62,036	Recent transactions	Transaction price	N/A	N/A	N/A
First lien secured debt		37,896	Market quotation	Market quotation	N/A	N/A	N/A
Second lien secured debt		2,304	Discounted cash flow analysis	Discount rate	33.25%	35.25%	34.25%
			Discounted cash flow analysis	Revenue growth rate	3.25%	4.25%	3.75%
			EV market multiple analysis	EBITDA multiple	9.79x	15.39x	12.59x
Revolver		386	Recent transactions	Transaction price	N/A	N/A	N/A
Equity - Preferred equity		3,151	Discounted cash flow analysis	Discount rate	33.25%	35.25%	34.25%
			Discounted cash flow analysis	Revenue growth rate	3.25%	4.25%	3.75%
			EV market multiple analysis	EBITDA multiple	9.79x	15.39x	12.59x
Equity - Common stock		2,377	Discounted cash flow analysis	Discount rate	33.25%	35.25%	34.25%
			Discounted cash flow analysis	Revenue growth rate	3.25%	4.25%	3.75%
			EV market multiple analysis	EBITDA multiple	9.79x	15.39x	12.59x
Total	$	195,175

3. Investments (Continued)

Unobservable inputs used in the fair value measurement of Level 3 investments as of December 31, 2023 included the following:

	December 31, 2023
					Range		Weighted
	Fair Value		Valuation Technique	Unobservable Input	Low	High	Average
Corporate bond	$	14,700	Yield analysis	Market yield	11.60%	12.60%	12.10%
Corporate bond		13,447	Yield analysis	Market yield	13.08%	13.08%	13.08%
			Black Scholes Option Pricing Model	Volatility	10.00%	47.50%	28.75%
			Black Scholes Option Pricing Model	Term	2.60 years	2.60 years	2.60 years
			Black Scholes Option Pricing Model	Risk free rate	4.10%	4.10%	4.10%
First lien secured debt		38,162	Yield analysis	Market yield	9.86%	11.91%	10.81%
			EV market multiple analysis	EBITDA multiple	11.50x	13.25x	12.47x
First lien secured debt		29,931	Yield analysis	Market yield	9.44%	12.24%	10.57%
First lien secured debt		14,523	Recent transactions	Transaction price	N/A	N/A	N/A
First lien secured debt		35,632	Market quotation	N/A	N/A	N/A	N/A
Second lien secured debt		2,012	Discounted cash flow analysis	Discount rate	33.25%	35.25%	34.25%
				Revenue growth rate	3.25%	4.25%	3.75%
				Revenue multiple	0.38x	0.45x	0.41x
Revolver		(4)	Yield analysis	Market yield	9.86%	11.91%	11.38%
			EV market multiple analysis	EBITDA multiple	12.00x	13.25x	12.75x
Revolver		588	Yield analysis	Market yield	11.24%	12.24%	11.74%
Equity - Preferred equity		3,151	Discounted cash flow analysis	Discount rate	33.25%	35.25%	34.25%
				Revenue growth rate	3.25%	4.25%	3.75%
				Revenue multiple	0.38x	0.45x	0.41x
Equity - Common stock		267	Discounted cash flow analysis	Discount rate	33.25%	35.25%	34.25%
				Revenue growth rate	3.25%	4.25%	3.75%
				Revenue multiple	0.38x	0.45x	0.41x
Total	$	152,409

Certain fair value measurements may employ more than one valuation technique, with each valuation technique receiving a relative weight between 0% and 100%. Generally, a change in an unobservable input may result in a change to the value of an investment as follows:

Input	Impact to Value if Input Increases	Impact to Value if Input Decreases
Discount rate	Decrease	Increase
Revenue multiples	Increase	Decrease
EBITDA multiples	Increase	Decrease
Book value multiples	Increase	Decrease
Implied volatility	Increase	Decrease
Term	Decrease	Increase
Yield	Decrease	Increase

3. Investments (Continued)

Changes in investments categorized as Level 3 for the three and nine months ended September 30, 2024 were as follows:

	For the Three Months Ended September 30, 2024
	First Lien Secured Debt		Second Lien Secured Debt		Corporate Bond		Revolver		Equity - Preferred Equity		Equity - Common Stock		Total Investments
Beginning balance	$	122,072	$	2,215	$	28,214	$	346	$	3,151	$	2,038	$	158,036
Net realized and unrealized gains (losses)		376		12		(182)		(38)		—		339		507
Acquisitions (1)		50,336		77		242		126		—		—		50,781
Dispositions (2)		(13,984)		—		(90)		(75)		—		—		(14,149)
Transfers in (out) of Level 3 (3)		—		—		—		—		—		—		—
Reclassifications		(27)		—		—		27		—		—		—
Ending balance	$	158,773	$	2,304	$	28,184	$	386	$	3,151	$	2,377	$	195,175
Net change in unrealized appreciation/(depreciation) during the period on investments still held at period end (included in net realized and unrealized gains/(losses) above)	$	426	$	12	$	(183)	$	(1)	$	—	$	340	$	594
	For the Nine Months Ended September 30, 2024
	First Lien Secured Debt		Second Lien Secured Debt		Corporate Bond		Revolver		Equity - Preferred Equity		Equity - Common Stock		Total Investments
Beginning balance	$	118,248	$	2,012	$	28,147	$	584	$	3,151	$	267	$	152,409
Net realized and unrealized gains (losses)		513		38		(416)		(28)		—		2,110		2,217
Acquisitions (1)		130,739		254		543		278		—		—		131,814
Dispositions (2)		(78,140)		—		(90)		(475)		—		—		(78,705)
Transfers in (out) of Level 3 (3)		(12,560)		—		—		—		—		—		(12,560)
Reclassifications		(27)		—		—		27		—		—		—
Ending balance	$	158,773	$	2,304	$	28,184	$	386	$	3,151	$	2,377	$	195,175
Net change in unrealized appreciation/(depreciation) during the period on investments still held at period end (included in net realized and unrealized gains/(losses) above)	$	889	$	38	$	(418)	$	10	$	—	$	2,111	$	2,630

⁽¹⁾ Includes payments received in kind, accretion of original issue, market discounts, securities received in corporate actions and restructuring.

⁽²⁾ Includes principal paydowns, and may include securities delivered in corporate actions and restructuring of investments.

⁽³⁾ Represents non-cash transfers between fair value categories. Transfers in (out) of Level 3 are the result of changes in the observability of significant inputs and / or available market data for certain investments. There were no transfers between Level 1 and Level 2 fair value measurements during the period shown.

3. Investments (Continued)

Changes in investments categorized as Level 3 for the three and nine months ended September 30, 2023 were as follows:

	For the Three Months Ended September 30, 2023
	First Lien Term Loan			Second Lien Secured Debt	Corporate Bond		Revolver		Equity - Preferred Equity		Equity - Common Stock		Total Investments
Beginning balance	$	88,970	$	—	$	27,603	$	542	$	—	$	—	$	117,115
Net realized and unrealized gains (losses)		685		—		(5,311)		33		—		—		(4,593)
Acquisitions (1)		22,994		—		237		489		11		—		23,731
Dispositions		(219)		—		(9)		(461)		—		—		(689)
Transfers in (out) of Level 3 (3)		—		—		5,842		—		—		—		5,842
Ending balance	$	112,430	$	—	$	28,362	$	603	$	11	$	—	$	141,406
Net change in unrealized appreciation/(depreciation) during the period on investments still held at period end (included in net realized and unrealized gains/(losses) above)	$	681	$	—	$	(5,147)	$	33	$	—	$	—	$	(4,433)
	For the Nine Months Ended September 30, 2023
	First Lien Secured Debt		Second Lien Secured Debt		Corporate Bond		Revolver		Equity - Preferred Equity		Equity - Common Stock		Total Investments
Beginning balance	$	8,420	$	—	$	27,605	$	(34)	$	—	$	—	$	35,991
Net realized and unrealized gains (losses)		575		—		(5,603)		37		—		—		(4,991)
Acquisitions (1)		103,859		—		527		1,561		11		—		105,958
Dispositions (2)		(424)		—		(9)		(961)		—		—		(1,394)
Transfers in (out) of Level 3 (3)		—		—		5,842		—		—		—		5,842
Ending balance	$	112,430	$	—	$	28,362	$	603	$	11	$	—	$	141,406
Net change in unrealized appreciation/(depreciation) during the period on investments still held at period end (included in net realized and unrealized gains/(losses) above)	$	566	$	—	$	(5,440)	$	37	$	—	$	—	$	(4,837)

⁽¹⁾ Includes payments received in kind and accretion of original issue and market discounts.

⁽²⁾ Includes principal paydowns.

⁽³⁾ Represents non-cash transfers between fair value categories. Transfers in (out) of Level 3 are the result of changes in the observability of significant inputs and / or available market data for certain investments. There were no transfers between Level 1 and Level 2 fair value measurements during the period shown.