10-Q

ROC

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___ to ___

Commission File Number: 814-01684

Jefferies Credit Partners BDC Inc.

(Exact Name of Registrant as Specified in its Charter)


Maryland	92-1852483
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
520 Madison Avenue, 12th Floor New York, New York	10022
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 284-3474

Not Applicable

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act: None

    Title of each class

    Trading
Symbol(s)

    Name of each exchange on which registered

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 9, 2024, the registrant had 14,718,075 shares of common stock, $0.001 par value per share, outstanding. Common stock outstanding excludes August 1, 2024 subscriptions since the issuance price is not yet finalized at the date of this filing.

Table of Contents


		Page

PART I.	FINANCIAL INFORMATION	1

Item 1.	Consolidated Financial Statements	1
	Consolidated Statements of Assets and Liabilities as of June 30, 2024 and December 31, 2023 (Unaudited)	1
	Consolidated Statement of Operations for the three and six months ended June 30, 2024 (Unaudited)	2
	Consolidated Statement of Changes in Net Assets for the three and six months ended June 30, 2024 (Unaudited)	3
	Consolidated Statement of Cash Flows for the six months ended June 30, 2024 (Unaudited)	4
	Consolidated Schedule of Investments as of June 30, 2024 (Unaudited)	5
	Consolidated Schedule of Investments as of December 31, 2023 (Unaudited)	8
	Notes to Consolidated Financial Statements (Unaudited)	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	33

PART II.	OTHER INFORMATION	34

Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3.	Defaults Upon Senior Securities	34
Item 4.	Mine Safety Disclosures	34
Item 5.	Other Information	34
Item 6.	Exhibits	35
	Signatures	36

PART I—FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

JEFFERIES CREDIT PARTNERS BDC INC.

Consolidated Statements of Assets and Liabilities (Unaudited)

(In thousands, except for share and per share data)


	June 30, 2024		December 31, 2023
Assets
Investments at fair value:
Non-controlled/non-affiliated investments (amortized cost of $352,812 and $240,879, at June 30, 2024 and December 31, 2023, respectively)	$	355,530	$	244,061
Cash and cash equivalents		45,299		71,898
Restricted cash		8,556		1,068
Interest receivable		2,938		1,179
Deferred financing costs		5,608		6,566
Deferred offering costs		1,063		1,703
Due from Investment Adviser		1,856		2,515
Prepaid expenses and other assets		266		415
Total assets	$	421,116	$	329,405
Liabilities
Debt	$	213,066	$	151,502
Subscriptions received in advance		5,660		—
Interest payable		3,916		856
Management fees payable		230		51
Due to Investment Adviser		3,804		3,849
Accrued expenses and other liabilities		1,388		1,039
Total liabilities	$	228,064	$	157,297
Commitments and contingencies (Note 9)
Total net assets	$	193,052	$	172,108
Net Assets
Common shares, par value $0.001 (12,808,607 and 11,670,594, shares issued and outstanding, at June 30, 2024 and December 31, 2023, respectively)	$	13	$	12
Additional paid-in capital		184,424		167,426
Accumulated distributable earnings		8,615		4,670
Total net assets	$	193,052	$	172,108

Net Asset Value Per Share
Net assets	$	193,052	$	172,108
Common shares outstanding ($0.001 par value, 1,000,000,000 shares authorized at June 30, 2024 and December 31, 2023, respectively)		12,808,607		11,670,594
Net asset value per share	$	15.07	$	14.75

See accompanying notes to consolidated financial statements

JEFFERIES CREDIT PARTNERS BDC INC.

Consolidated Statement of Operations (Unaudited)

(In thousands, except for share and per share data)


	Three Months Ended June 30, 2024			Six Months Ended June 30, 2024
Investment Income
Non-controlled/non-affiliated investments
Interest income	$	9,373		$	17,484
Payment-in-kind interest income		235			235
Other income		311			416
Total investment income		9,919			18,135
Operating Expenses
Interest and other financing expenses		4,232			7,485
Management fees		576			1,120
Income-based incentive fees		751			1,290
Capital gains incentive fees		(8	)		(58	)
Other general and administrative expenses		1,591			3,187
Total expenses before fee waiver and expense support		7,142			13,024
Expense support		(2,142	)		(3,306	)
Management fees waived		(346	)		(672	)
Incentive fees waived		(743	)		(1,232	)
Net expenses		3,911			7,814
Net investment income		6,008			10,321
Net Realized Gain (Loss) and Change in Unrealized Appreciation (Depreciation)
Net realized gain (loss):
Non-controlled/non-affiliated investments		—			—
Net realized gain		—			—
Net change in unrealized appreciation (depreciation):
Non-controlled/non-affiliated investments		(65	)		(464	)
Net change in unrealized depreciation		(65	)		(464	)
Net realized gain and change in unrealized depreciation		(65	)		(464	)
Net Increase in Net Assets Resulting from Operations	$	5,943		$	9,857
Net Increase in Net Assets Per Share Resulting from Operations - Basic and Diluted (Note 8)	$	0.48		$	0.82
Weighted Average Common Stock Outstanding - Basic and Diluted (Note 8)		12,370,426			12,054,635

See accompanying notes to consolidated financial statements

JEFFERIES CREDIT PARTNERS BDC INC.

Consolidated Statement of Changes in Net Assets (Unaudited)

(In thousands, except for share and per share data)


	Three Months Ended June 30, 2024			Six Months Ended June 30, 2024
Net Increase (Decrease) in Net Assets Resulting from Operations
Net investment income	$	6,008		$	10,321
Net realized gains in investments		—			—
Net change in unrealized depreciation		(65	)		(464	)
Net increase in net assets resulting from operations		5,943			9,857

Distributions to Shareholders
Distributions declared		(4,376	)		(5,913	)
Net decrease in net assets resulting from distributions to shareholders		(4,376	)		(5,913	)

Capital Share Transactions
Issuance of common shares		14,000			17,000
Net increase in net assets resulting from share transactions		14,000			17,000

Net Assets
Total increase in net assets during the period		15,567			20,944
Net Assets, beginning of period		177,485			172,108
Net Assets at End of Period	$	193,052		$	193,052

See accompanying notes to consolidated financial statements

JEFFERIES CREDIT PARTNERS BDC INC.

Consolidated Statement of Cash Flows (Unaudited)

(In thousands, except for share and per share data)


	Six Months Ended June 30, 2024
Operating Activities
Net increase in net assets resulting from operations	$	9,857
Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:
Net realized gains on investments		—
Net change in unrealized depreciation on investments		464
Net accretion of discount and amortization of premium		(750	)
Amortization of deferred financing costs		631
Amortization of offering costs		921
Payment-in-kind interest capitalized		(204	)
Purchase of investments		(113,782	)
Proceeds from sale of investments and principal repayments		2,803
Changes in assets and liabilities:
Interest receivable		(1,759	)
Due from Investment Adviser		659
Prepaid expenses and other assets		148
Management fees payable		179
Interest payable		3,060
Due to Investment Adviser		(45	)
Accrued expenses and other liabilities		448
Net Cash Used in Operating Activities		(97,370	)
Financing Activities
Borrowings on debt		127,564
Repayments on debt		(66,000	)
Financing costs paid and deferred		(52	)
Subscriptions received in advance		5,660
Proceeds from issuance of common shares		17,000
Distributions paid to shareholders		(5,913	)
Net Cash Provided by Financing Activities		78,259
Cash and Cash Equivalents and Restricted Cash
Net decrease in cash and cash equivalents and restricted cash		(19,111	)
Cash and cash equivalents and restricted cash, beginning of period		72,966
Cash and cash equivalents and restricted cash, end of period	$	53,855

Supplemental Disclosure of Non-Cash Information
Cash paid for interest	$	3,793
Cash paid for taxes	$	56
Accrued but unpaid offering costs	$	282

The following table presents cash and cash equivalents and restricted cash by category within the Consolidated Statements of Assets and Liabilities (in thousands):


	June 30, 2024
Cash and cash equivalents	$	45,299
Restricted cash		8,556
Cash and cash equivalents and restricted cash	$	53,855

See accompanying notes to consolidated financial statements

JEFFERIES CREDIT PARTNERS BDC INC.

Consolidated Schedule of Investments (Unaudited)

June 30, 2024

(In thousands, except for share and per share data)


Portfolio Company	Investment Type	Reference Rate and Spread (1)	Maturity Date	Principal		Cost (2)			Fair Value (3)			% of Net Assets			Footnotes
Non-Controlled/Non-Affiliated Portfolio Company Investments (4)
First Lien Debt Investments
Aerospace & Defense
Qnnect, LLC	First Lien Term Loan	S + 6.75%	11/2/2029	$	2,910	$	2,829		$	2,910					5
Qnnect, LLC	First Lien Delayed Draw Term Loan	S + 6.75%	11/2/2029		361		129			361					5,9
					3,271		2,958			3,271			1.7	%
Banking, Finance, Insurance, and Real Estate
Galway Borrower, LLC	First Lien Delayed Draw Term Loan	S + 5.00%	9/29/2028		—		(68	)		(147	)				9
Galway Borrower, LLC	First Lien Revolver	S + 5.25%	9/29/2028		48		44			44					7,9
Higginbotham Insurance Agency, Inc.	First Lien Delayed Draw Term Loan	S + 5.50%	11/24/2028		10,263		9,959			10,263					6
Higginbotham Insurance Agency, Inc.	First Lien Delayed Draw Term Loan	S + 4.75%	11/24/2028		1,471		1,401			1,339					6,9
SG Acquisition, Inc.	First Lien Term Loan	S + 5.00%	4/3/2030		26,484		26,421			26,418					7
SG Acquisition, Inc.	First Lien Revolver	S + 5.00%	4/3/2030		—		(3	)		(1	)				9
SitusAMC Holdings Corporation	First Lien Term Loan	S + 5.50%	12/22/2027		1,260		1,224			1,260					7
					39,526		38,978			39,176			20.3	%
Capital Equipment
Dwyer Instruments, LLC	First Lien Term Loan	S + 5.75%	7/21/2027		2,040		2,013			2,009					7
Dwyer Instruments, LLC	First Lien Delayed Draw Term Loan	S + 5.75%	7/21/2027		4,832		4,769			4,759					7
Dwyer Instruments, LLC	First Lien Term Loan	S + 5.75%	7/21/2027		6,415		6,303			6,319					7
Dwyer Instruments, LLC	First Lien Delayed Draw Term Loan	S + 5.75%	7/21/2027		—		(64	)		(112	)				9
					13,287		13,021			12,975			6.7	%
Chemicals, Plastic, & Rubber
ASP Meteor Acquisition Co LLC	First Lien Term Loan	S + 7.00%	9/1/2029		5,810		5,567			5,665					6
ASP Meteor Acquisition Co LLC	First Lien Delayed Draw Term Loan	S + 7.00%	9/1/2029		2,935		2,762			2,832					6,9
Aurora Plastics, LLC	First Lien Term Loan	S + 4.75%	8/10/2028		3,335		3,063			3,202					6
Aurora Plastics, LLC	First Lien Delayed Draw Term Loan	S + 4.75%	8/10/2028		2,240		2,057			2,150					6
					14,320		13,449			13,849			7.2	%
Healthcare & Pharmaceuticals
The GI Alliance Management, LLC	First Lien Term Loan	S + 5.50%	9/15/2028		14,004		13,750			13,724					7
The GI Alliance Management, LLC	First Lien Term Loan	S + 5.50%	9/15/2028		2,137		2,117			2,094					7
The GI Alliance Management, LLC	First Lien Delayed Draw Term Loan	S + 5.50%	9/15/2028		—		(84	)		(180	)				9
Perkinelmer U.S. LLC	First Lien Term Loan	S + 5.00%	3/13/2029		15,197		14,707			14,969					6
Perkinelmer U.S. LLC	First Lien Delayed Draw Term Loan	S + 5.00%	3/13/2029		—		(32	)		(66	)				9
Petvet Care Centers, LLC	First Lien Term Loan	S + 6.00%	11/15/2030		22,152		21,733			21,709					6
Petvet Care Centers, LLC	First Lien Delayed Draw Term Loan	S + 6.00%	11/15/2030		—		(27	)		(58	)				9
Petvet Care Centers, LLC	First Lien Revolver	S + 6.00%	11/15/2029		—		(6	)		(7	)				9
					53,490		52,158			52,185			27.0	%
High Tech Industries
Aptean, Inc	First Lien Term Loan	S + 5.25%	1/30/2031		10,307		10,208			10,307					6
Aptean, Inc	First Lien Delayed Draw Term Loan	S + 5.25%	1/30/2031		91		81			91					6,9
Aptean, Inc	First Lien Revolver	S + 5.25%	1/30/2031		—		(3	)		—					9
Brave Parent Holdings, Inc.	First Lien Term Loan	S + 5.00%	11/29/2030		21,490		21,287			21,490					7
Brave Parent Holdings, Inc.	First Lien Delayed Draw Term Loan	S + 5.00%	11/29/2030		1,416		1,389			1,416					7,9
Brave Parent Holdings, Inc.	First Lien Revolver	S + 5.00%	11/29/2030		—		(3	)		—					9
Enverus Holdings, Inc.	First Lien Term Loan	S + 5.50%	12/24/2029		16,994		16,755			16,781					6
Enverus Holdings, Inc.	First Lien Delayed Draw Term Loan	S + 5.50%	12/24/2029		—		(6	)		(11	)				9
Enverus Holdings, Inc.	First Lien Revolver	S + 5.50%	12/24/2029		—		(4	)		(4	)				9
GS AcquisitionCo, Inc.	First Lien Delayed Draw Term Loan	S + 5.25%	5/25/2028		413		394			374					7,9
GS AcquisitionCo, Inc.	First Lien Revolver	S + 5.25%	5/25/2028		47		45			45					7,9
Netwrix Corporation	First Lien Term Loan	S + 5.00%	6/11/2029		15,114		14,544			14,849					7
Rally Buyer, Inc.	First Lien Term Loan	S + 5.75% (includes 1.75% PIK)	7/19/2028		12,351		12,184			12,351					7
Rally Buyer, Inc.	First Lien Delayed Draw Term Loan	S + 5.75% (includes 1.75% PIK)	7/19/2028		2,823		2,778			2,823					7
Redwood Services Group, LLC	First Lien Term Loan	S + 6.25%	6/15/2029		12,824		12,528			12,825					7
Redwood Services Group, LLC	First Lien Delayed Draw Term Loan	S + 6.25%	6/15/2029		3,162		3,089			3,162					7
Redwood Services Group, LLC	First Lien Delayed Draw Term Loan	S + 5.75%	6/15/2029		731		632			538					7,9
					97,763		95,898			97,037			50.3	%

See accompanying notes to consolidated financial statements

JEFFERIES CREDIT PARTNERS BDC INC.

Consolidated Schedule of Investments (Unaudited) - Continued

June 30, 2024

(In thousands, except for share and per share data)

    Portfolio Company

    Investment Type

    Reference Rate 
and Spread (1)

    Maturity Date

    Principal

    Cost (2)

    Fair Value (3)

    % of Net Assets

    Footnotes

    Non-Controlled/Non-Affiliated Portfolio Company Investments (4)

    First Lien Debt Investments

    Services: Business

Chartwell Cumming Holding Corporation

First Lien Term Loan

S + 5.25%

11/16/2027

15,385

14,841

15,385

6

Chartwell Cumming Holding Corporation

First Lien Delayed Draw Term Loan

S + 5.25%

11/16/2027