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Financing Arrangements
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
Financing Arrangements Financing Arrangements
In accordance with the 1940 Act, the Company is allowed to borrow amounts such that its asset coverage, as calculated pursuant to the 1940 Act, equals at least 150% after such borrowing. As of December 31, 2024, the aggregate amount outstanding of the senior securities issued by the Company was $229,355. As of December 31, 2024, the Company’s asset coverage was 462%.
The following tables present summary information with respect to the Company’s outstanding financing arrangements as of December 31, 2024 and 2023:
As of December 31, 2024
ArrangementType of ArrangementRate
Amount Outstanding
Amount Available
Maturity Date
Senior Secured Revolving Credit Facility(1)
Revolving Credit Facility
SOFR+2.125%(2)
$40,855 
(3)
$109,145 July 19, 2028
K-FIT AB-1 Credit Facility(1)
Revolving Credit Facility
SOFR+2.25%(2)
188,500 61,500 October 10, 2028
Total$229,355 $170,645 
___________
(1)The carrying amount outstanding under the facility approximates its fair value.
(2)The benchmark rate is subject to a 0% floor.
(3)Amount includes borrowing in Canadian dollars, Euros and pounds sterling. Canadian dollar balance outstanding of C$500 has been converted to U.S. dollars at an exchange rate of C$1.00 to $0.69 as of December 31, 2024. Euro balance outstanding of €6,500 has been converted to U.S. dollars at an exchange rate of €1.00 to $1.04 as of December 31, 2024. Pounds sterling balance outstanding of £15,000 has been converted to U.S dollars at an exchange rate of £1.00 to $1.25 as of December 31, 2024 to reflect total amount outstanding in U.S. dollars.

As of December 31, 2023
ArrangementType of ArrangementRate
Amount Outstanding
Amount Available
Maturity Date
Senior Secured Revolving Credit Facility(1)
Revolving Credit Facility
SOFR+2.125%(2)
$29,231 
(3)
$20,769 July 19, 2028
K-FIT AB-1 Credit Facility(1)
Revolving Credit Facility
SOFR+2.75%(2)
65,000 185,000 October 10, 2028
Total$94,231 $205,769 
___________
(1)The carrying amount outstanding under the facility approximates its fair value.
(2)The benchmark rate is subject to a 0% floor.
(3)Amount includes borrowing in Euros and pounds sterling. Euro balance outstanding of €2,500 has been converted to U.S. dollars at an exchange rate of €1.00 to $1.11 as of December 31, 2023 to reflect total amount outstanding in U.S. dollars. Pounds sterling balance outstanding of £9,000 has been converted to U.S. dollars at an exchange rate of £1.00 to $1.27 as of December 31, 2023 to reflect total amount outstanding in U.S. dollars.
For the years ended December 31, 2024 and 2023, the components of total interest expense for the Company’s financing arrangements were as follows:
Year Ended December 31,
2024
2023
Arrangement(1)
Direct Interest Expense(2)
Amortization of Deferred Financing CostsTotal Interest Expense
Direct Interest Expense(2)
Amortization of Deferred Financing CostsTotal Interest Expense
Senior Secured Revolving Credit Facility$4,855 $406 $5,261 $530 $131 $661 
K-FIT AB-1 Credit Facility7,923 609 8,532 329 125 454 
Total$12,778 $1,015 $13,793 $859 $256 $1,115 
_____________________
(1)Borrowings of each of the Company’s wholly-owned, special-purpose financing subsidiaries are considered borrowings of the Company for purposes of complying with the asset coverage requirements applicable to BDCs under the 1940 Act.
(2)Direct interest expense includes the effect of non-usage fees.
The Company’s average borrowings and weighted average interest rate, including the effect of non-usage fees, for the year ended December 31, 2024 were $149,317 and 8.56%, respectively. As of December 31, 2024, the Company’s weighted average effective interest rate on borrowings, including the effect of non-usage fees, was 6.88%.
The Company’s average borrowings and weighted average interest rate, including the effect of non-usage fees, for the year ended December 31, 2023 were $16,194 and 5.31%, respectively. As of December 31, 2023, the Company’s weighted average effective interest rate on borrowings, including the effect of non-usage fees, was 8.93%.
Under its financing arrangements, the Company has made certain representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar financing arrangements. The Company was in compliance with all covenants required by its financing arrangements as of December 31, 2024.
Senior Secured Revolving Credit Facility
On July 19, 2023, the Company entered into a senior secured revolving credit facility, or as subsequently amended the Senior Secured Revolving Credit Facility, with Sumitomo Mitsui Banking Corporation, or SMBC, as administrative agent, and the lenders and issuing banks party thereto.
The Senior Secured Revolving Credit Facility provides for borrowings in U.S. dollars and certain agreed upon foreign currencies in an aggregate amount of up to $150,000 (increased from $50,000 to $75,000 on January 26, 2024, increased from $75,000 to $125,000 on March 20, 2024, and increased from $125,000 to $150,000 on November 14, 2024) with an option for the Company to request, at one or more times, that existing and/or new lenders, at their election, provide additional commitments of up to the greater of (i) $500,000 and (ii) 150% of the aggregate amount of commitments as of the most recent anniversary of July 19, 2023. The Senior Secured Revolving Credit Facility provides for the issuance of letters of credit in an aggregate amount of up to $100,000. As of December 31, 2024, $0 of such letters of credit have been issued.
Availability under the Senior Secured Revolving Credit Facility will terminate on July 19, 2027, and the outstanding loans under the Senior Secured Revolving Credit Facility will mature on July 19, 2028.
Borrowings under the Senior Secured Revolving Credit Facility are subject to compliance with a borrowing base test. Interest under the Senior Secured Revolving Credit Facility for (i) loans for which the Company elects the base rate option is payable at an “alternate base rate” (which is the greatest of (a) the prime rate as quoted in The Wall Street Journal, (b) the federal funds rate in effect for such day plus 0.50%, and (c) term SOFR plus 1.00% per annum), plus 1.125%, or (ii) loans for which the Company elects the term benchmark option and for loans denominated in GBP, is payable at the applicable benchmark, plus 2.125%. The Company will pay a commitment fee of up to 0.375% per annum on the daily unused amount of the commitments then available thereunder. The Company also will be required to pay letter of credit participation fees and a fronting fee on the average daily amount of any lender’s exposure with respect to any letters of credit issued at the request of the Company under the Senior Secured Revolving Credit Facility.
In connection with the Senior Secured Revolving Credit Facility, the Company has made certain representations and warranties and must comply with various covenants and reporting requirements customary for facilities of this type. In addition, the Company must comply with the following financial covenants: (a) the Company must maintain a minimum shareholders’ equity, measured as of each fiscal quarter end; and (b) the Company must maintain at all times a 150% asset coverage ratio.
The Senior Secured Revolving Credit Facility contains events of default customary for facilities of this type. Upon the occurrence of an event of default, the administrative agent, at the request of the required lenders, may terminate the commitments and declare the outstanding advances and all other obligations under the Senior Secured Revolving Credit Facility immediately due and payable.
The Company’s obligations under the Senior Secured Revolving Credit Facility are guaranteed by certain of the Company’s subsidiaries. The Company’s obligations under the Senior Secured Revolving Credit Facility are secured by a first priority security interest in substantially all of the assets of the Company and the subsidiary guarantors thereunder.
K-FIT AB-1 Credit Facility
On October 10, 2023, K-FIT Finance AB-1 LLC, or K-FIT AB-1, a wholly-owned special-purpose financing subsidiary of the Company, entered into a revolving credit facility, or, as amended, the K-FIT AB-1 Credit Facility, with Ally Bank, as administrative agent and arranger, Computershare Trust Company, N.A., as collateral administrator and collateral custodian, and the lenders from time to time party thereto. The K-FIT AB-1 Credit Facility provides for, among other things, borrowings in U.S. dollars in an initial aggregate principal amount of up to $250,000 on a committed basis.
K-FIT AB-1 may elect at one or more times, subject to certain conditions, including the consent of Ally Bank, to increase the maximum committed amount up to $500,000. The end of the revolving period and the maturity date for the K-FIT AB-1 Credit Facility are October 10, 2026 and October 10, 2028, respectively. Advances under the K-FIT AB-1 Credit Facility are subject to compliance with a borrowing base test.
Under the K-FIT AB-1 Credit Facility, borrowings bear interest at the rate of Daily 1M SOFR plus 2.25% per annum. Interest is payable quarterly in arrears. For the first three months after October 10, 2023, K-FIT AB-1 was subject to a quarterly non-usage fee of 0.50% on the average daily unborrowed portion of the committed facility amount, and thereafter, K-FIT AB-1 is subject to a quarterly non-usage fee between 0.50% and 1.00% on the average daily unborrowed portion of the committed facility amount.
Under the K-FIT AB-1 Credit Facility, K-FIT AB-1 has made certain representations and warranties and must comply with various covenants, reporting requirements and other requirements customary for facilities of this type. In addition, after an initial specified period, K-FIT AB-1 must maintain a total interest coverage ratio of at least 150%, measured as of the end of each fiscal quarter. The K-FIT AB-1 Credit Facility contains events of default customary for similar financing transactions. Upon the occurrence and during the continuation of an event of default, Ally Bank may declare the outstanding advances and all other obligations under the K-FIT AB-1 Credit Facility immediately due and payable.
K-FIT AB-1’s obligations under the K-FIT AB-1 Credit Facility are secured by a first priority security interest in substantially all of the assets of K-FIT AB-1, including its portfolio of assets; and a pledge by the Company of the equity of K-FIT AB-1. The obligations of K-FIT AB-1 under the K-FIT AB-1 Credit Facility are non-recourse to the Company, and the Company’s exposure under the K-FIT AB-1 Credit Facility is limited to the value of its investment in K-FIT AB-1 and the equity of K-FIT AB-1.