Borrowings

6 Months Ended

Jun. 30, 2023

Borrowings [Abstract]

Borrowings

Note 5.
Borrowings

On April 20, 2023, KLCC SPV GS1 LLC, a Delaware limited liability company and newly formed subsidiary of the Company, entered into a credit agreement with Goldman Sachs Bank USA (the “Secured Credit Facility”). The maximum principal amount of the Secured Credit Facility as of June 30, 2023 is $300 million, which can be drawn in U.S. dollars subject to certain conditions. The maturity date of the Secured Credit Facility is May 1, 2028.

Amounts drawn under the Secured Credit Facility will bear interest at Term SOFR plus a margin. Advances used to finance the purchase or origination of loans under the Secured Credit Facility initially bear interest at Term SOFR plus a spread of (i) if the percentage of loans that are broadly syndicated loans (“BSL”) is 60% or higher on each day during such interest period, 3.25%, (ii) if the percentage of loans that are BSL is less than 60% during any day during such interest period but higher than 30% on each day during such interest period, 3.35% and (iii) in relation to either (A) any period in the 18 months following the closing of the Secured Credit Facility during which the percentage of loans that are BSL is less than 30% on any day during such interest period or (B) any interest period that occurs more than 18 months following the closing of the Secured Credit Facility, 3.50%.

The Secured Credit Facility contains customary covenants, including certain limitations on the activities of KLCC SPV GS1, including limitations on incurrence of incremental indebtedness, and customary events of default. The Secured Credit Facility is secured by a perfected first priority security interest in the assets of KLCC SPV GS1 and on any payments received by KLCC SPV GS1 in respect of those assets. Assets pledged to the lenders under the Secured Credit Facility will not be available to pay the debts of the Company. As of June 30, 2023, the Company was in compliance with all covenants and other requirements.

The estimated fair value of the Secured Credit Facility approximated the principal value of $13,500,000 on the consolidated statement of assets and liabilities as of June 30, 2023 and is categorized as Level III under the ASC 820 fair value hierarchy.

Borrowings of KLCC SPV GS1 are considered borrowings of the Company for purposes of complying with the asset coverage requirements under the 1940 Act.

Debt obligations consisted of the following as of June 30, 2023:

Total Debt Outstanding	$	13,500,000
Average Debt Outstanding	$	1,616,667
Effective Interest Rate		8.49	%
Weighted Average Interest Rate		8.49	%
Asset Coverage Ratio		1,679	%

For the three and six months ended June 30, 2023, the components of interest expense related to the Secured Credit Facility were as follows:

	Three Months Ended June 30, 2023		For the Six Months Ended June 30, 2023
Borrowing interest expense	$	22,875	$	22,875
Unused facility fee		505,639		505,639
Amortization of deferred financing costs		133,881		133,881
Total interest and debt financing expense	$	662,395	$	662,395