Company Quick10K Filing
Quick10K
Goldman Sachs BDC
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
8-K 2019-10-03 Regulation FD, Exhibits
8-K 2019-08-01 Earnings, Regulation FD, Exhibits
8-K 2019-07-15 Regulation FD, Exhibits
8-K 2019-05-17 Shareholder Vote
8-K 2019-05-09 Earnings, Regulation FD, Exhibits
8-K 2019-04-17 Regulation FD, Exhibits
8-K 2019-02-28 Earnings, Regulation FD, Exhibits
8-K 2019-02-05 Regulation FD, Exhibits
8-K 2018-11-01 Earnings, Regulation FD, Exhibits
8-K 2018-10-04 Regulation FD, Exhibits
8-K 2018-09-17 Enter Agreement, Off-BS Arrangement, Other Events, Exhibits
8-K 2018-08-24 Enter Agreement, Exhibits
8-K 2018-08-02 Earnings, Regulation FD, Exhibits
8-K 2018-07-13 Other Events
8-K 2018-07-09 Regulation FD, Exhibits
8-K 2018-07-02 Enter Agreement, Off-BS Arrangement
8-K 2018-06-18 Other Events, Exhibits
8-K 2018-06-15 Enter Agreement, Shareholder Vote, Other Events, Exhibits
8-K 2018-04-05 Regulation FD, Exhibits
8-K 2018-03-02 Enter Agreement, Exhibits
8-K 2018-01-23 Regulation FD, Exhibits
8-K 2018-01-02 Enter Agreement, Exhibits
NAN North American Nickel 11,204
HRI Herc Holdings 1,167
ARCT Arcturus Therapeutics 120
TPVG Triplepoint Venture Growth Bdc 0
GSAH GS Acquisition Holdings 0
DFP Delphi Financial Group 0
CACG Chart Acquisition 0
OFS OFS Capital 0
WHF Whitehorse Finance 0
AFC Allied Capital 0
GSBD 2019-06-30
Part I. Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Item 4. Mine Safety Disclosures.
Item 5. Other Information.
Item 6. Exhibits.
EX-99.(31)(1) d590037dex99311.htm
EX-99.(31)(2) d590037dex99312.htm
EX-99.(32)(1) d590037dex99321.htm

Goldman Sachs BDC Earnings 2019-06-30

GSBD 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 d590037d10q.htm GOLDMAN SACHS BDC, INC. Goldman Sachs BDC, Inc.

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

 

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

For the quarterly period ended June 30, 2019

or

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

Commission file number 814-00998

 

 

Goldman Sachs BDC, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

Delaware   46-2176593

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification No.)

200 West Street, New York, New York   10282
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s Telephone Number, Including Area Code: (212) 902-0300

Not Applicable

Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report.

 

 

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  X    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, a 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:   X    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 Act).    YES  ☐    NO  X

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange

on which registered

Common Stock, par value

$0.001 per share

  GSBD   The New York Stock Exchange

The number of shares of the registrant’s common stock, $0.001 par value per share, outstanding as of August 1, 2019 was 40,337,930.

 

 

 


GOLDMAN SACHS BDC, INC.

 

    

INDEX

   PAGE
PART I    FINANCIAL INFORMATION        4
ITEM 1.    Financial Statements        4
   Consolidated Statements of Assets and Liabilities as of June 30, 2019 (Unaudited) and December 31, 2018        4
   Consolidated Statements of Operations for the three and six months ended June 30, 2019 (Unaudited) and 2018 (Unaudited)        5
   Consolidated Statements of Changes in Net Assets for the three and six months ended June 30, 2019 (Unaudited) and 2018 (Unaudited)        6
   Consolidated Statements of Cash Flows for the six months ended June 30, 2019 (Unaudited) and 2018 (Unaudited)        7
   Consolidated Schedules of Investments as of June 30, 2019 (Unaudited) and December 31, 2018        8
   Notes to the Consolidated Financial Statements (Unaudited)        19
ITEM 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations        46
ITEM 3.    Quantitative and Qualitative Disclosures About Market Risk        67
ITEM 4.    Controls and Procedures        68
PART II    OTHER INFORMATION        69
ITEM 1.    Legal Proceedings        69
ITEM 1A.    Risk Factors        69
ITEM 2.    Unregistered Sales of Equity Securities and Use of Proceeds        69
ITEM 3.    Defaults Upon Senior Securities        69
ITEM 4.    Mine Safety Disclosures        69
ITEM 5.    Other Information        69
ITEM 6.    Exhibits        69
SIGNATURES        70

 

2


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “target,” “estimate,” “intend,” “continue” or “believe” or the negatives of, or other variations on, these terms or comparable terminology. You should read statements that contain these words carefully because they discuss our plans, strategies, prospects and expectations concerning our business, operating results, financial condition and other similar matters. We believe that it is important to communicate our future expectations to our investors. Our forward-looking statements include information in this report regarding general domestic and global economic conditions, our future financing plans, our ability to operate as a business development company (“BDC”) and the expected performance of, and the yield on, our portfolio companies. There may be events in the future, however, that we are not able to predict accurately or control. The factors listed under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018, as well as any cautionary language in this report, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. The occurrence of the events described in these risk factors and elsewhere in this report could have a material adverse effect on our business, results of operations and financial position. Any forward-looking statement made by us in this report speaks only as of the date of this report. Factors or events that could cause our actual results to differ from our forward-looking statements may emerge from time to time, and it is not possible for us to predict all of them. You are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the U.S. Securities and Exchange Commission (the “SEC”), including annual reports on Form 10-K, registration statements on Form N-2, quarterly reports on Form 10-Q and current reports on Form 8-K. Under Section 21E(b)(2)(B) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to statements made in periodic reports we file under the Exchange Act, such as this quarterly report on Form 10-Q.

The following factors are among those that may cause actual results to differ materially from our forward-looking statements:

 

   

our future operating results;

   

changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets;

   

uncertainty surrounding the financial and political stability of the United States, the United Kingdom, the European Union and China;

   

our business prospects and the prospects of our portfolio companies;

   

the impact of investments that we expect to make;

   

the impact of increased competition;

   

our contractual arrangements and relationships with third parties;

   

the dependence of our future success on the general economy and its impact on the industries in which we invest;

   

the ability of our current and prospective portfolio companies to achieve their objectives;

   

the relative and absolute performance of our investment adviser;

   

our expected financings and investments;

   

the use of borrowed money to finance a portion of our investments;

   

our ability to make distributions;

   

the adequacy of our cash resources and working capital;

   

the timing of cash flows, if any, from the operations of our portfolio companies;

   

the impact of future acquisitions and divestitures;

   

the effect of changes in tax laws and regulations and interpretations thereof;

   

our ability to maintain our status as a BDC and a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”);

   

actual and potential conflicts of interest with Goldman Sachs Asset Management, L.P. and its affiliates;

   

general price and volume fluctuations in the stock market;

   

the ability of our investment adviser to attract and retain highly talented professionals;

   

the impact on our business from new or amended legislation or regulations;

   

the availability of credit and/or our ability to access the equity and capital markets; and

   

currency fluctuations, particularly to the extent that we receive payments denominated in foreign currency rather than U.S. dollars.

 

3


PART I. FINANCIAL INFORMATION

 

ITEM 1.

FINANCIAL STATEMENTS

Goldman Sachs BDC, Inc.

Consolidated Statements of Assets and Liabilities

(in thousands, except share and per share amounts)

 

     June 30, 2019
(Unaudited)
  December 31, 2018
Assets     
Investments, at fair value     

Non-controlled/non-affiliated investments (cost of $1,348,177 and $1,155,641, respectively)

   $ 1,327,343     $ 1,129,036  

Non-controlled affiliated investments (cost of $139,938 and $143,700, respectively)

     125,411       126,089  

Controlled affiliated investments (cost of $85,308 and $126,217, respectively)

     80,956       120,319  
Cash      10,122       6,113  
Receivable for investments sold      9,058       47  
Unrealized appreciation on foreign currency forward contracts      122       89  
Interest and dividends receivable from non-controlled/affiliated investments and non-controlled/non-affiliated investments      7,642       6,969  
Dividend receivable from controlled affiliated investments            2,550  
Deferred financing costs      5,153       5,436  
Deferred offering costs      225       165  
Other assets      1,653       163  
  

 

 

 

 

 

 

 

Total assets    $ 1,567,685     $ 1,396,976  
  

 

 

 

 

 

 

 

Liabilities     
Debt (net of debt issuance costs of $4,507 and $5,318, respectively)    $ 842,820     $ 659,101  
Interest and other debt expenses payable      2,597       2,428  
Management fees payable      3,742       3,434  
Incentive fees payable      4,144        
Distribution payable      18,136       18,102  
Payable for investments purchased      9        
Directors’ fees payable      110        
Accrued offering costs      202       2  
Accrued expenses and other liabilities      2,498       4,017  
  

 

 

 

 

 

 

 

Total liabilities    $ 874,258     $ 687,084  
  

 

 

 

 

 

 

 

Commitments and Contingencies (Note 8)     
Net Assets     
Preferred stock, par value $0.001 per share (1,000,000 shares authorized, no shares issued and outstanding)    $     $  
Common stock, par value $0.001 per share (200,000,000 shares authorized, 40,302,522 and 40,227,625 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively)      40       40  
Paid-in capital in excess of par      803,662       802,216  
Distributable earnings      (108,854     (90,943
Allocated income tax expense      (1,421     (1,421
  

 

 

 

 

 

 

 

TOTAL NET ASSETS    $ 693,427     $ 709,892  
  

 

 

 

 

 

 

 

TOTAL LIABILITIES AND NET ASSETS    $ 1,567,685     $ 1,396,976  
  

 

 

 

 

 

 

 

Net asset value per share    $ 17.21     $ 17.65  

 

The accompanying notes are part of these unaudited consolidated financial statements.

 

4


Goldman Sachs BDC, Inc.

Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(Unaudited)

 

     For the Three Months Ended
  For the Six Months Ended
     June 30,
2019
  June 30,
2018
  June 30,
2019
  June 30,
2018
Investment Income:         
From non-controlled/non-affiliated investments:         

Interest income

   $ 34,713     $ 31,228     $ 66,282     $ 61,018  

Payment-in-kind

     174             476        

Other income

     870       737       1,521       973  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total investment income from non-controlled/non-affiliated investments

     35,757       31,965       68,279       61,991  
From non-controlled affiliated investments:         

Payment-in-kind

     376       1,962       745       3,903  

Interest income

     576       659       1,194       1,047  

Dividend income

     53       10       85       17  

Other income

     11       9       22       15  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total investment income from non-controlled affiliated investments

     1,016       2,640       2,046       4,982  
From controlled affiliated investments:         

Payment-in-kind

     565       433       1,100       806  

Interest income

     63             63        

Dividend income

     1,000       2,200       3,450       5,000  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total investment income from controlled affiliated investments

     1,628       2,633       4,613       5,806  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total investment income    $ 38,401     $ 37,238     $ 74,938     $ 72,779  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:         

Interest and other debt expenses

   $ 9,501     $ 6,173     $ 17,954     $ 11,896  

Management fees

     3,742       4,479       7,278       9,282  

Incentive fees

     4,144       4,342       4,637       9,026  

Professional fees

     689       1,058       1,331       1,728  

Administration, custodian and transfer agent fees

     239       232       479       463  

Directors’ fees

     114       117       227       218  

Other expenses

     433       370       769       679  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total expenses    $ 18,862     $ 16,771     $ 32,675     $ 33,292  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INVESTMENT INCOME BEFORE TAXES    $ 19,539     $ 20,467     $ 42,263     $ 39,487  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense, including excise tax    $ 452     $ 304     $ 891     $ 589  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INVESTMENT INCOME AFTER TAXES    $ 19,087     $ 20,163     $ 41,372     $ 38,898  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net realized and unrealized gains (losses) on investment transactions:         
Net realized gain (loss) from:         

Non-controlled/non-affiliated investments

   $ (8,570   $ 100     $ (33,292   $ 1,767  

Non-controlled affiliated investments

                       9  

Controlled affiliated investments

     (673           (673      

Foreign currency forward contracts

     34             52        

Foreign currency transactions

     (10           (16      
Net change in unrealized appreciation (depreciation) from:         

Non controlled/non-affiliated investments

     (1,435     (481     5,771       (784

Non-controlled affiliated investments

     5,840       (1,492     3,084       (2,477

Controlled affiliated investments

     2,440       (824     1,546       (1,049

Foreign currency forward contracts

     (45           33        

Foreign currency translations

     (507           295        
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net realized and unrealized gains (losses)    $ (2,926   $ (2,697   $ (23,200   $ (2,534
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Provision) benefit for taxes on realized gain/loss on investments      121       1       121       (446
(Provision) benefit for taxes on unrealized appreciation/depreciation on investments      (152           52        
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS    $ 16,130     $ 17,467     $ 18,345     $ 35,918  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income per share (basic and diluted)

   $ 0.47     $ 0.50     $ 1.03     $ 0.97  

Earnings per share (basic and diluted)

   $ 0.40     $ 0.43     $ 0.46     $ 0.89  

Weighted average shares outstanding

     40,297,090       40,171,957       40,279,173       40,161,297  

 

The accompanying notes are part of these unaudited consolidated financial statements.

 

5


Goldman Sachs BDC, Inc.

Consolidated Statements of Changes in Net Assets

(in thousands, except share and per share amounts)

(Unaudited)

 

     For the Three Months Ended
  For the Six Months Ended
     June 30,
2019
  June 30,
2018
  June 30,
2019
  June 30,
2018
Net assets at beginning of period    $ 694,746     $ 726,711     $ 709,892     $ 725,830  
Increase (decrease) in net assets resulting from operations:         

Net investment income

   $ 19,087     $ 20,163     $ 41,372     $ 38,898  

Net realized gain (loss)

     (9,219     100       (33,929     1,776  

Net change in unrealized appreciation (depreciation)

     6,293       (2,797     10,729       (4,310

(Provision) benefit for taxes on realized gain/loss on investments

     121       1       121       (446

(Provision) benefit for taxes on unrealized appreciation/depreciation on investments

     (152           52        
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in net assets resulting from operations    $ 16,130     $ 17,467     $ 18,345     $ 35,918  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions to stockholders from:         

Distributable earnings

   $ (18,136   $ (18,078   $ (36,256   $ (36,148
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total distributions to stockholders    $ (18,136   $ (18,078   $ (36,256   $ (36,148
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital transactions:         

Reinvestment of stockholder distributions (35,306, 20,916, 74,897 and 44,740 shares, respectively)

   $ 687     $ 386     $ 1,446     $ 886  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in net assets resulting from capital transactions    $ 687     $ 386     $ 1,446     $ 886  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL INCREASE (DECREASE) IN NET ASSETS    $ (1,319   $ (225   $ (16,465   $ 656  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets at end of period    $ 693,427     $ 726,486     $ 693,427     $ 726,486  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions declared per share

   $ 0.45     $ 0.45     $ 0.90     $ 0.90  

 

The accompanying notes are part of these unaudited consolidated financial statements.

 

6


Goldman Sachs BDC, Inc.

Consolidated Statements of Cash Flows

(in thousands, except share and per share amounts)

(Unaudited)

 

     For the Six Months Ended
     June 30, 2019   June 30, 2018
Cash flows from operating activities:     
Net increase (decrease) in net assets resulting from operations:    $ 18,345     $ 35,918  

Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used for) operating activities:

    

Purchases of investments

     (417,534     (130,713

Payment-in-kind interest capitalized

     (2,226     (4,596

Investments in affiliated money market fund, net

           11,537  

Proceeds from sales of investments and principal repayments

     234,179       157,509  

Dissolution of Senior Credit Fund, LLC

     9,779        

Net realized (gain) loss on investments

     33,965       (1,776

Net change in unrealized (appreciation) depreciation on investments

     (10,401     4,310  

Net change in unrealized (appreciation) depreciation on foreign currency forward contracts and transactions

     (35      

Amortization of premium and accretion of discount, net

     (6,029     (3,770

Amortization of deferred financing and debt issuance costs

     1,300       1,018  

Amortization of original issue discount on convertible notes

     209       64  
Increase (decrease) in operating assets and liabilities:     

(Increase) decrease in receivable for investments sold

     (9,011      

(Increase) decrease in interest and dividends receivable

     1,878       554  

(Increase) decrease in other income receivable

           1,308  

(Increase) decrease in other assets

     (1,490     (127

Increase (decrease) in interest and other debt expenses payable

     248       116  

Increase (decrease) in management fees payable

     308       (168

Increase (decrease) in incentive fees payable

     4,144       1,162  

Increase (decrease) in investments purchased payable

     9        

Increase (decrease) in directors’ fees payable

     110       98  

Increase (decrease) in accrued expenses and other liabilities

     (1,519     649  
  

 

 

 

 

 

 

 

Net cash provided by (used for) operating activities    $ (143,771   $ 73,093  
  

 

 

 

 

 

 

 

Cash flows from financing activities:     

Offering costs paid

   $ 140     $ (201

Distributions paid

     (34,776     (35,242

Deferred financing and debt issuance costs paid

     (494     (1,800

Borrowings on debt

     358,908       121,000  

Repayments of debt

     (176,000     (159,250
  

 

 

 

 

 

 

 

Net cash provided by (used for) financing activities    $ 147,778     $ (75,493
  

 

 

 

 

 

 

 

Net increase (decrease) in cash      4,007       (2,400
Effect of foreign exchange rate changes on cash and cash equivalents      2        
Cash, beginning of period      6,113       11,606  
  

 

 

 

 

 

 

 

Cash, end of period    $ 10,122     $ 9,206  
  

 

 

 

 

 

 

 

Supplemental and non-cash financing activities     
Interest expense paid    $ 15,824     $ 10,465  
Accrued but unpaid excise tax expense    $ 1,070     $ 834  
Accrued but unpaid deferred financing and debt issuance costs    $     $ 38  
Accrued but unpaid offering costs    $ 202     $ 314  
Accrued but unpaid distributions    $ 18,136     $ 18,079  
Reinvestment of stockholder distributions    $ 1,446     $ 886  
Non-cash purchases of investments    $ (251,173   $ (1,442
Non-cash sales of investments    $ 260,952     $ 1,442  

 

The accompanying notes are part of these unaudited consolidated financial statements.

 

7


Goldman Sachs BDC, Inc.

Consolidated Schedule of Investments as of June 30, 2019

(in thousands, except share and per share amounts)

(Unaudited)

 

Portfolio Company   Industry   Interest Rate (+)   Reference Rate and
Spread (+)
  Maturity   Par Amount (++)     Cost     Fair Value  
Investments at Fair Value – 221.18% #

 

Corporate Debt (1) – 206.51%

 

1st Lien/Senior Secured Debt – 150.03%

 

3SI Security Systems, Inc.(2)   Commercial Services & Supplies   8.15%   L + 5.75%; 1.00% Floor   06/16/2023   $ 14,849     $ 14,707     $ 14,700  
A Place For Mom, Inc.   Diversified Consumer Services   6.15%   L + 3.75%; 1.00% Floor   08/10/2024     8,887       8,880       8,665  
Accuity Delivery Systems,
LLC^ (2) (3)
  Health Care Providers & Services   9.45%   L + 7.00%; 1.00% Floor   06/13/2023     10,170       9,917       9,967  
Animal Supply Holdings,
LLC^^ (2) (4)
  Distributors   12.59%   L + 10.00% (incl. 2.50%
PIK); 1.00% Floor
  02/22/2022     3,829       3,777       3,743  
Ansira Partners, Inc.   Media   8.15%   L + 5.75%; 1.00% Floor   12/20/2022     4,601       4,572       4,578  
Ansira Partners, Inc.(5)   Media   8.16%   L + 5.75%; 1.00% Floor   12/20/2022     282       185       185  
Apptio, Inc.(2) (3)   IT Services   9.67%   L + 7.25%; 1.00% Floor   01/10/2025     32,702       32,082       32,048  
Apptio, Inc.(2) (3) (5) (6)   IT Services     L + 7.25%; 1.00% Floor   01/10/2025     2,225       (41     (45
Artesyn Embedded Technologies, Inc.(7)   Electronic Equipment, Instruments & Components   9.75%     10/15/2020     20,000       20,000       20,300  
Associations, Inc.(2) (3)   Real Estate Management & Development   9.60%   L + 7.00% (incl. 3.00%
PIK); 1.00% Floor
  07/30/2024     11,968       11,839       11,848  
Associations, Inc.(2) (3) (5)   Real Estate Management & Development   9.59%   L + 7.00% (incl. 3.00%
PIK); 1.00% Floor
  07/30/2024     2,956       1,683       1,685  
Associations, Inc.(2) (3) (5) (6)   Real Estate Management & Development     L + 4.00%; 1.00% Floor   07/30/2024     587       (6     (6
ATX Networks Corp.   Communications Equipment   9.35%   L + 7.00% (incl. 1.00%
PIK); 1.00% Floor
  06/11/2021     7,387       7,357       6,907  
ATX Networks Corp.   Communications Equipment   9.33%  

L + 7.00% (incl. 1.00%

PIK); 1.00% Floor

  06/11/2021     473       467       443  
Badger Sportswear, Inc.   Textiles, Apparel & Luxury Goods   6.90%   L + 4.50%; 1.00% Floor   09/11/2023     7,150       7,104       6,936  
Barbri, Inc.   Media   6.69%   L + 4.25%; 1.00% Floor   12/01/2023     6,243       6,219       6,134  
Brillio, LLC(2) (3)   IT Services   7.15%   L + 4.75%; 1.00% Floor   02/06/2025     4,520       4,477       4,475  
Brillio, LLC(2) (3) (5)   IT Services     L + 4.75%; 1.00% Floor   02/06/2025     1,510             (15
Businessolver.com, Inc.(2) (3)   Health Care Technology   10.02%   L + 7.50%; 1.00% Floor   05/15/2023     12,549       12,345       12,298  
Businessolver.com, Inc.(2) (3) (5)   Health Care Technology   10.02%   L + 7.50%; 1.00% Floor   05/15/2023     1,882       1,011       998  
Businessolver.com, Inc.(2) (3) (5)   Health Care Technology   9.90%   L + 7.50%; 1.00% Floor   05/15/2023     1,569       164       157  
Collaborative Imaging,
LLC^^^ (2) (3)
  Health Care Providers & Services   9.09%   L + 6.50%; 1.00% Floor   03/28/2025     8,900       8,785       8,722  
Continuum Managed Services LLC(2) (3)   IT Services   8.41%   L + 6.00%; 1.00% Floor   06/08/2023     21,227       20,808       21,227  
Continuum Managed Services LLC(2) (3)   IT Services   8.41%   L + 6.00%; 1.00% Floor   06/08/2023     6,109       6,000       6,109  
Continuum Managed Services LLC(2) (3)   IT Services   8.41%   L + 6.00%; 1.00% Floor   06/08/2023     1,791       1,758       1,791  
Continuum Managed Services LLC(2) (3) (5) (6)   IT Services     L + 6.00%; 1.00% Floor   06/08/2022     2,220       (36      
CorePower Yoga, LLC(3)   Diversified Consumer Services   7.08%   L + 4.75%   05/14/2025     7,905       7,789       7,787  
CorePower Yoga, LLC(3) (5) (6)   Diversified Consumer Services     L + 4.75%   05/14/2025     678       (10     (10
CorePower Yoga, LLC(3) (5) (6)   Diversified Consumer Services     L + 4.75%   05/14/2025     2,259       (33     (34
CST Buyer Company(2)   Diversified Consumer Services   7.40%   L + 5.00%; 1.00% Floor   03/01/2023     9,188       9,020       9,142  
CST Buyer Company(2) (5) (6)   Diversified Consumer Services     L + 5.00%; 1.00% Floor   03/01/2023     900       (15     (5
DBRS Limited   Capital Markets   7.77%   L + 5.25%; 1.00% Floor   03/04/2022     4,963       4,941       4,957  
DDS USA Holding, Inc.(2) (3)   Health Care Equipment & Supplies   7.56%   L + 5.25%; 1.00% Floor   06/30/2022     3,841       3,824       3,812  
DDS USA Holding, Inc.(2) (3)   Health Care Equipment & Supplies   7.57%   L + 5.25%; 1.00% Floor   06/30/2022     3,824       3,808       3,795  
DDS USA Holding, Inc.(2) (3) (5) (6)   Health Care Equipment & Supplies     L + 5.25%; 1.00% Floor   06/30/2022     1,079       (4     (8
Diligent Corporation(2) (3)   Professional Services   8.31%   L + 5.50%; 1.00% Floor   04/14/2022   16,097       18,436       18,121  
Diligent Corporation(2) (3)   Professional Services   8.35%   L + 5.50%; 1.00% Floor   04/14/2022     1,483       1,467       1,468  
Diligent Corporation(2) (3) (5)   Professional Services   8.14%   L + 5.50%; 1.00% Floor   04/14/2022     1,300       1,119       1,131  
Diligent Corporation(2) (3)   Professional Services   8.19%   L + 5.50%; 1.00% Floor   04/14/2022     509       503       504  
Diligent Corporation(2) (3)   Professional Services   8.35%   L + 5.50%; 1.00% Floor   04/14/2022     246       244       244  
Diligent Corporation(2) (3) (5) (6)   Professional Services     L + 5.50%; 1.00% Floor   04/14/2022     8,104       (85     (81
DiscoverOrg, LLC(3)   Software   6.90%   L + 4.50%   02/02/2026     16,160       16,004       16,079  
DocuTAP, Inc.(3)   Health Care Technology   8.15%   L + 5.75%; 1.00% Floor   05/12/2025     24,154       23,561       23,912  

 

The accompanying notes are part of these unaudited consolidated financial statements.

 

8


Goldman Sachs BDC, Inc.

Consolidated Schedule of Investments as of June 30, 2019 (continued)

(in thousands, except share and per share amounts)

(Unaudited)

 

Portfolio Company   Industry   Interest Rate (+)   Reference Rate and
Spread (+)
  Maturity     Par Amount (++)     Cost     Fair Value  
Drilling Info Holdings, Inc.(5)   Oil & Gas     L + 4.25%     07/30/2025     $ 34     $     $  
Elemica, Inc.(2)   Software   9.40%   L + 7.00%; 1.00% Floor     07/07/2021       41,225       40,743       41,019  
Elemica, Inc.(2) (5)   Software   9.41%   L + 7.00%; 1.00% Floor     07/07/2021       6,000       4,735       4,770  
Empirix, Inc.(2) (3)   Diversified Telecommunication Services   8.58%   L + 6.25%; 1.00% Floor     09/25/2024       22,192       21,843       21,304  
Empirix, Inc.(2) (3) (5) (6)   Diversified Telecommunication Services     L + 6.25%; 1.00% Floor     09/25/2023       1,300       (19     (52
Fenergo Finance 3
Limited(2) (3) (8)
  Diversified Financial Services   8.58%   L + 6.25%; 1.00% Floor     09/05/2024     17,800       20,367       20,038  
Fenergo Finance 3
Limited(2) (3) (5) (6) (8)
  Diversified Financial Services     L + 6.25%; 1.00% Floor     09/05/2024       1,182       (18     (12
Fenergo Finance 3
Limited(2) (3) (5) (6) (8)
  Diversified Financial Services     L + 6.25%; 1.00% Floor     09/05/2024     1,500       (27     (55
FWR Holding Corporation(2)   Hotels, Restaurants & Leisure   7.90%   L + 5.50%; 1.00% Floor     08/21/2023       4,472       4,389       4,427  
FWR Holding Corporation(2)   Hotels, Restaurants & Leisure   7.90%   L + 5.50%; 1.00% Floor     08/21/2023       893       877       884  
FWR Holding Corporation(2)   Hotels, Restaurants & Leisure   7.90%   L + 5.50%; 1.00% Floor     08/21/2023       565       555       559  
FWR Holding Corporation(2) (5)   Hotels, Restaurants & Leisure   7.90%   L + 5.50%; 1.00% Floor     08/21/2023       587       298       302  
Gastro Health Holdco,
LLC(2) (3)
  Health Care Providers & Services   8.09%   L + 5.50%; 1.00% Floor     09/04/2024       10,175       9,993       9,971  
Gastro Health Holdco,
LLC(2) (3) (5)
  Health Care Providers & Services   8.09%   L + 5.50%; 1.00% Floor     09/04/2024       5,100       3,149       3,126  
Gastro Health Holdco,
LLC(2) (3) (5) (6)
  Health Care Providers & Services     L + 5.50%; 1.00% Floor     09/04/2023       2,000       (34     (40
GH Holding Company(2)   Real Estate Management & Development   6.90%   L + 4.50%     02/28/2023       7,406       7,378       7,369  
GI Revelation Acquisition LLC   Internet Software & Services   7.40%   L + 5.00%     04/16/2025       4,706       4,685       4,647  
GK Holdings, Inc.   IT Services   8.33%   L + 6.00%; 1.00% Floor     01/20/2021       8,595       8,576       7,048  
GlobalTranz Enterprises
LLC(3)
  Road & Rail   7.39%   L + 5.00%     05/15/2026       7,720       7,567       7,431  
GlobalTranz Enterprises
LLC(3) (5) (6)
  Road & Rail     L + 5.00%     05/15/2026       1,992       (40     (75
Granicus, Inc.(3)   Software   7.08%   L + 4.75%; 1.00% Floor     09/07/2022       8,357       8,281       8,273  
Halo Branded Solutions, Inc.   Commercial Services & Supplies   6.90%   L + 4.50%; 1.00% Floor     06/30/2025       8,534       8,456       8,427  
HC Group Holdings III, Inc.   Health Care Providers & Services   6.15%   L + 3.75%     04/07/2022       4,331       4,321       4,315  
Heligear Acquisition Co.(2) (7)   Aerospace & Defense   10.25%       10/15/2019       17,500       17,477       17,281  
Hygiena Borrower LLC   Life Sciences Tools & Services   6.33%   L + 4.00%; 1.00% Floor     08/26/2022       12,586       12,481       12,334  
Hygiena Borrower LLC(5) (6)   Life Sciences Tools & Services     L + 4.00%; 1.00% Floor     08/26/2022       715       (4     (14
Hygiena Borrower LLC(5) (6)   Life Sciences Tools & Services     L + 4.00%; 1.00% Floor     08/26/2022       1,313       (13     (26
iCIMS, Inc.(2) (3)   Software   8.90%   L + 6.50%; 1.00% Floor     09/12/2024       29,895       29,361       29,297  
iCIMS, Inc.(2) (3)   Software   8.90%   L + 6.50%; 1.00% Floor     09/12/2024       5,506       5,396       5,396  
iCIMS, Inc.(2) (3) (5) (6)   Software     L + 6.50%; 1.00% Floor     09/12/2024       1,868       (33     (37
Infinity Sales Group(2) (4)   Media   12.90%   L + 10.50%; 1.00% Floor     11/23/2020       29,529       32,089       30,858  
Integral Ad Science,
Inc.(2) (3)
  Media   9.66%   L + 7.25% (incl. 1.25%
PIK); 1.00% Floor
    07/19/2024       23,881       23,469       23,463  
Integral Ad Science, Inc.(2) (3) (5) (6)   Media     L + 6.00%; 1.00% Floor     07/19/2023       1,815       (30     (32
Internet Truckstop Group,
LLC(2) (3)
  Transportation Infrastructure   7.91%   L + 5.50%; 1.00% Floor     04/02/2025       22,320       21,781       21,762  
Internet Truckstop Group,
LLC(2) (3) (5) (6)
  Transportation Infrastructure     L + 5.50%; 1.00% Floor     04/02/2025       1,800       (43     (45
Iracore International Holdings, Inc.^ (2)   Energy Equipment & Services   11.50%   L + 9.00%; 1.00% Floor     04/12/2021       3,389       3,389       3,389  
Jill Acquisition LLC   Textiles, Apparel & Luxury Goods   7.59%   L + 5.00%; 1.00% Floor     05/08/2022       6,880       6,852       6,640  
Kawa Solar Holdings
Limited^ (2) (8) (9)
  Construction & Engineering         05/26/2020       3,917       3,603       3,917  
Kawa Solar Holdings
Limited^ (2) (8) (9)
  Construction & Engineering         05/26/2020       5,201       2,683        

 

The accompanying notes are part of these unaudited consolidated financial statements.

 

9


Goldman Sachs BDC, Inc.

Consolidated Schedule of Investments as of June 30, 2019 (continued)

(in thousands, except share and per share amounts)

(Unaudited)

 

Portfolio Company   Industry   Interest Rate (+)   Reference Rate and
Spread (+)
  Maturity     Par Amount (++)     Cost     Fair Value  
Legacy Buyer Corp.(2)   Health Care Providers & Services   10.33%   L + 8.00%; 1.00% Floor     10/24/2019     $ 20,977     $ 20,943     $ 20,977  
Legacy Buyer Corp.(2) (5) (6)   Health Care Providers & Services     L + 8.00%; 1.00% Floor     10/24/2019       2,500       (4      
Lithium Technologies, Inc.(2) (3)   Internet Software & Services   10.46%   L + 8.00%; 1.00% Floor     10/03/2022       38,966       38,281       38,284  
Lithium Technologies,
Inc.(2) (3) (5) (6)
  Internet Software & Services     L + 8.00%; 1.00% Floor     10/03/2022       2,684       (44     (47
Madison-Kipp Corporation(2)   Machinery   11.41%   L + 9.00%; 1.00% Floor     05/26/2020       29,694       29,562       29,694  
Mailgun Technologies,
Inc.(2) (3)
  Internet Software & Services   8.33%   L + 6.00%; 1.00% Floor     03/26/2025       13,157       12,903       12,894  
Mailgun Technologies,
Inc.(2) (3) (5) (6)
  Internet Software & Services     L + 6.00%; 1.00% Floor     03/26/2025       1,530       (29     (31
Midwest Transport, Inc.(2) (3)   Road & Rail   9.65%   L + 7.00%; 1.00% Floor     10/02/2023       12,224       12,116       12,101  
MMIT Holdings, LLC(2) (3)   Health Care Technology   7.90%   L + 5.50%; 1.00% Floor     11/15/2024       16,418       16,113       16,089  
MMIT Holdings, LLC(2) (3) (5) (6)   Health Care Technology     L + 5.50%; 1.00% Floor     11/15/2024       3,188       (58     (64
Netvoyage Corporation(2) (3)   Software   11.41%   L + 9.00%; 1.00% Floor     03/22/2024       8,558       8,433       8,451  
Netvoyage Corporation(2) (3) (5) (6)   Software     L + 9.00%; 1.00% Floor     03/24/2022       654       (7     (8
Output Services Group, Inc.   Diversified Consumer Services   6.65%   L + 4.25%; 1.00% Floor     03/27/2024       3,471       3,459       3,107  
Output Services Group, Inc.(5)   Diversified Consumer Services     L + 4.25%; 1.00% Floor     03/27/2024       513             (54
Pathway Vet Alliance LLC(2) (3)   Health Care Providers & Services   6.90%   L + 4.50%     12/20/2024       4,795       4,750       4,747  
Pathway Vet Alliance
LLC(2) (3) (5)
  Health Care Providers & Services   6.90%   L + 4.50%     12/21/2024       1,693       782       777  
Pharmalogic Holdings Corp.(2)   Health Care Equipment & Supplies   6.40%   L + 4.00%     06/11/2023       3,255       3,248       3,239  
Pharmalogic Holdings Corp.(2)   Health Care Equipment & Supplies   6.40%   L + 4.00%     06/11/2023       1,768       1,765       1,760  
Pharmalogic Holdings Corp.(2)   Health Care Equipment & Supplies   6.40%   L + 4.00%     06/11/2023       1,738       1,729       1,729  
Pharmalogic Holdings Corp.(2)   Health Care Equipment & Supplies   6.40%   L + 4.00%     06/11/2023       935       933       930  
Picture Head Midco LLC(2) (3)   Media   9.15%   L + 6.75%; 1.00% Floor     08/31/2023       24,890       24,448       24,454  
Picture Head Midco LLC(2) (3)   Media   9.14%   L + 6.75%; 1.00% Floor     08/31/2023       1,840       1,840       1,808  
PlanSource Holdings, Inc.(3)   Health Care Technology   8.81%   L + 6.25%; 1.00% Floor     04/22/2025       22,780       22,336       22,324  
PlanSource Holdings, Inc.(3) (5) (6)   Health Care Technology     L + 6.25%; 1.00% Floor     04/22/2025       3,142       (61     (63
Power Stop, LLC(3)   Auto Components   7.09%   L + 4.75%     10/19/2025       7,581       7,563       7,505  
Professional Physical
Therapy(2) (10)
  Health Care Providers & Services    

L + 7.50% (incl. 4.00%

PIK); 1.00% Floor

    12/16/2022       5,770       5,032       4,789  
Regulatory DataCorp, Inc.   Diversified Financial Services   6.83%   L + 4.50%; 1.00% Floor     09/21/2022       2,468       2,468       2,419  
Riverpoint Medical, LLC(3)   Health Care Equipment & Supplies   7.39%   L + 5.00%; 1.00% Floor     06/23/2025       9,043       8,998       8,953  
Riverpoint Medical, LLC(3) (5) (6)   Health Care Equipment & Supplies     L + 5.00%; 1.00% Floor     06/23/2025       1,644       (8     (16
SciQuest, Inc.   Internet Software & Services   6.40%   L + 4.00%; 1.00% Floor     12/28/2024       9,850       9,810       9,727  
SF Home Décor, LLC(2) (3)   Household Products   11.83%   L + 9.50%; 1.00% Floor     07/13/2022       19,528       19,132       19,039  
Shopatron, LLC(2) (3)   Internet Catalog & Retail   11.83%   L + 9.50%; 1.00% Floor     12/18/2020       4,279       4,208       4,204  
SMS Systems Maintenance Services, Inc.   IT Services   7.40%   L + 5.00%; 1.00% Floor     10/30/2023       7,313       7,287       4,999  
SPay, Inc.(2) (3)   Internet Software & Services   8.15%   L + 5.75%; 1.00% Floor     06/17/2024       10,332       10,155       9,970  
SPay, Inc.(2) (3) (5)   Internet Software & Services   8.23%   L + 5.75%; 1.00% Floor     06/17/2024       1,140       741       720  
SPay, Inc.(2) (3) (5)   Internet Software & Services   8.34%   L + 5.75%; 1.00% Floor     06/17/2024       5,720       334       181  
Tronair Parent Inc.   Air Freight & Logistics   7.57%   L + 4.75%; 1.00% Floor     09/08/2023       6,808       6,764       6,127  
U.S. Acute Care Solutions,
LLC(2)
  Health Care Providers & Services   7.20%   L + 5.00%; 1.00% Floor     05/17/2021       6,338       6,307       6,084  
US Med Acquisition, Inc.(2)   Health Care Equipment & Supplies   11.33%   L + 9.00%; 1.00% Floor     08/13/2021       29,799       29,543       28,458  
Vexos, Inc.(2)   Electronic Equipment, Instruments & Components   12.10%   L + 9.50%; 1.00% Floor     10/09/2019       35,610       35,558       35,431  

 

The accompanying notes are part of these unaudited consolidated financial statements.

 

10


Goldman Sachs BDC, Inc.

Consolidated Schedule of Investments as of June 30, 2019 (continued)

(in thousands, except share and per share amounts)

(Unaudited)

 

Portfolio Company   Industry   Interest Rate (+)   Reference Rate and
Spread (+)
  Maturity     Par Amount (++)     Cost     Fair Value  
VRC Companies, LLC(2)   Commercial Services & Supplies   8.90%   L + 6.50%; 1.00% Floor     03/31/2023     $ 17,279     $ 17,069     $ 17,106  
VRC Companies, LLC(2) (5)   Commercial Services & Supplies   8.90%   L + 6.50%; 1.00% Floor     03/31/2023       1,502       801       800  
VRC Companies, LLC(2) (5)   Commercial Services & Supplies   9.77%   L + 6.50%; 1.00% Floor     03/31/2022       882       489       491  
Wine.com, LLC(2) (3)   Beverages   9.59%   L + 7.00%; 1.00% Floor     11/14/2024       6,400       6,282       6,272  
Wolfpack IP Co.(3) (8)   Real Estate Management & Development   8.90%   L + 6.50%; 1.00% Floor     06/13/2025       31,694       31,064       31,060  
Wolfpack IP Co.(3) (5) (6) (8)   Real Estate Management & Development     L + 6.50%; 1.00% Floor     06/13/2025       3,169       (63     (63
Wrike, Inc.(2) (3)   Professional Services   9.16%   L + 6.75%; 1.00% Floor     12/31/2024       16,223       15,920       15,899  
Wrike, Inc.(2) (3) (5) (6)   Professional Services     L + 6.75%; 1.00% Floor     12/31/2024       1,600       (29     (32
Xactly Corporation(2) (3)   Internet Software & Services   9.66%   L + 7.25%; 1.00% Floor     07/29/2022       27,173       26,774       26,834  
Xactly Corporation(2) (3) (5) (6)   Internet Software & Services     L + 7.25%; 1.00% Floor     07/29/2022       1,697       (21     (21
Yasso, Inc.(2) (3)   Food Products   10.15%   L + 7.75%; 1.00% Floor     03/23/2022       8,074       7,976       7,791  
           

 

 

   

 

 

 

Total 1st Lien/Senior Secured Debt

 

    1,052,748       1,040,348  
1st Lien/Last-Out Unitranche (11) – 14.59%

 

Intelligent Document Solutions, Inc.(2) (3)   Diversified Financial Services   8.33%   L + 6.00%; 1.00% Floor     02/28/2024       11,900       11,582       11,573  
Mervin Manufacturing,
Inc.(2)
  Leisure Equipment & Products   10.11%   L + 7.50%     10/10/2019       11,165       11,149       10,941  
NTS Communications,
Inc.^ (2) (10)
  Diversified Telecommunication Services     L + 9.00% PIK; 1.25% Floor     09/30/2019       62,202       55,968       48,704  
NTS Communications,
Inc.^ (2)
  Diversified Telecommunication Services   11.48%   L + 9.00% PIK; 1.25% Floor     09/30/2019       6,885       6,725       6,885  
RugsUSA, LLC(2) (3)   Household Products   8.33%   L + 6.00%; 1.00% Floor     04/30/2023       5,840       5,793       5,796  
Smarsh, Inc.(2) (3)   Software   10.29%   L + 7.88%; 1.00% Floor     03/31/2021       17,490       17,334       17,315  
           

 

 

   

 

 

 

Total 1st Lien/Last-Out Unitranche

 

    108,551       101,214  
2nd Lien/Senior Secured Debt – 40.87%

 

American Dental Partners, Inc.(2) (3)   Health Care Providers & Services   10.83%   L + 8.50%; 1.00% Floor     09/25/2023       5,738       5,633       5,637  
Bolttech Mannings,
Inc.^^ (2)
  Commercial Services & Supplies   10.52%   L + 8.00% PIK     11/19/2021       20,709       20,709       20,709  
DiscoverOrg, LLC(3)   Software   10.90%   L + 8.50%     02/01/2027       10,000       9,854       9,863  
DuBois Chemicals, Inc.(3)   Chemicals   10.40%   L + 8.00%; 1.00% Floor     03/15/2025       26,220       25,802       25,499  
ERC Finance, LLC(2) (3)   Health Care Providers & Services   10.62%   L + 8.22%; 1.00% Floor     09/22/2025       19,800       19,425       19,404  
Genesis Acquisition
Co.(2) (3)
  Diversified Financial Services   10.04%   L + 7.50%     07/31/2025       7,000       6,841       6,808  
Genesis Acquisition
Co.(2) (3) (5) (6)
  Diversified Financial Services     L + 7.50%     07/31/2025       1,800       (20     (49
GK Holdings, Inc.   IT Services   12.58%   L + 10.25%; 1.00% Floor     01/20/2022       3,000       2,972       2,250  
Hygiena Borrower LLC(2)   Life Sciences Tools & Services   10.08%   L + 7.75%; 1.00% Floor     08/26/2023       1,860       1,829       1,827  
Hygiena Borrower
LLC(2) (5)
  Life Sciences Tools & Services   10.08%   L + 7.75%; 1.00% Floor     08/26/2023       680       91       85  
ICP Industrial, Inc.(2) (3)   Chemicals   10.64%   L + 8.25%; 1.00% Floor     05/03/2024       20,400       19,992       19,992  
IHS Intermediate Inc.(2)   Health Care Providers & Services   10.83%   L + 8.25%; 1.00% Floor     07/20/2022       10,000       9,894       9,200  
Market Track, LLC(2) (3)   Internet Catalog & Retail   10.15%   L + 7.75%; 1.00% Floor     06/05/2025       22,200       21,660       21,312  
MPI Products LLC(2) (4)   Auto Components   11.52%   L + 9.00%; 1.00% Floor     01/30/2020       20,000       20,036       18,200  
National Spine and Pain Centers, LLC(2) (3)   Health Care Providers & Services   10.65%   L + 8.25%; 1.00% Floor     12/02/2024       19,100       18,645       18,623  
Odyssey Logistics & Technology Corporation(3)   Road & Rail   10.40%   L + 8.00%; 1.00% Floor     10/12/2025       18,722       18,360       18,348  
SMB Shipping Logistics,
LLC(2) (3)
  Air Freight & Logistics   10.52%   L + 8.00%; 1.00% Floor     02/03/2025       41,667       41,065       40,833  
Spectrum Plastics Group, Inc.(3)   Containers & Packaging   9.40%   L + 7.00%; 1.00% Floor     01/31/2026       6,248       6,221       5,841  
Viant Medical Holdings, Inc.(3)   Health Care Equipment & Supplies   10.08%   L + 7.75%     07/02/2026       8,260       8,184       8,115  

 

The accompanying notes are part of these unaudited consolidated financial statements.

 

11


Goldman Sachs BDC, Inc.

Consolidated Schedule of Investments as of June 30, 2019 (continued)

(in thousands, except share and per share amounts)

(Unaudited)

 

Portfolio Company   Industry   Interest Rate (+)   Reference Rate and
Spread (+)
  Maturity     Par Amount (++)     Cost     Fair Value  
YI, LLC(2) (3)   Health Care Equipment & Supplies   10.08%   L + 7.75%; 1.00% Floor     11/07/2025     $ 15,235     $ 14,846     $ 14,816  
Zep Inc.(3)   Chemicals   10.58%   L + 8.25%; 1.00% Floor     08/11/2025       23,800       23,302       16,105  
           

 

 

   

 

 

 

Total 2nd Lien/Senior Secured Debt

 

    295,341       283,418  
Unsecured Debt – 1.02%

 

CB-HDT Holdings, Inc.^ (2)   Aerospace & Defense   12.00% PIK       12/15/2019       4,165       4,165       4,165  
CB-HDT Holdings, Inc.^ (2)   Aerospace & Defense   12.00% PIK       03/05/2021       1,818       1,818       1,818  
Conergy Asia & ME Pte.
LTD.^ (2) (8)
  Construction & Engineering   10.00%       05/26/2020       1,064       1,064       1,064  
           

 

 

   

 

 

 

Total Unsecured Debt

 

    7,047       7,047  
           

 

 

   

 

 

 
Total Corporate Debt

 

    1,463,687       1,432,027  
Portfolio Company   Industry        Coupon          Shares     Cost     Fair Value  
Preferred Stock (1) – 6.89%

 

Accuity Delivery Systems,
LLC^ (2) (3) (7) (9)
  Health Care Providers & Services       97,130     $ 3,200     $ 4,480  
Animal Supply Holdings,
LLC^^ (2) (7) (9)
  Distributors       250,000       25,000       25,918  
CB-HDT Holdings, Inc.^ (2) (7) (9)   Aerospace & Defense       1,108,333       10,186       15,461  
Conergy Asia Holdings,
Ltd.^ (2) (7) (8) (9)
  Construction & Engineering       600,000       600        
Kawa Solar Holdings
Limited^ (2) (7) (8) (10)
  Construction & Engineering   8.00% PIK       60,790       778        
NTS Communications,
Inc.^ (2) (7) (9)
  Diversified Telecommunication Services       263       187        
Wine.com, LLC(2) (3) (7) (9)   Beverages       221,072       1,900       1,899  
           

 

 

   

 

 

 

Total Preferred Stock

            41,851       47,758  
Common Stock (1) – 7.78%

 

Animal Supply Holdings,
LLC^^ (2) (7) (9)
  Distributors       406,226       29,230       28,314  
Bolttech Mannings, Inc.^^ (2) (7) (9)   Commercial Services & Supplies       8,000       6,591       2,272  
CB-HDT Holdings,
Inc.^ (2) (7) (9)
  Aerospace & Defense       453,383       2,393       6,034  
Collaborative Imaging Holdco, LLC –
Class B^^^ (2) (3) (7)
  Health Care Providers & Services       8,464       1,141       1,516  
Collaborative Imaging Holdco, LLC – Performance
Units^^^ (2) (3) (7) (8) (9)
  Health Care Providers & Services       7,988       159       452  
Conergy Asia Holdings,
Ltd.^ (2) (7) (8) (9)
  Construction & Engineering       2,000       4,700        
Continuum Managed Services LLC – Class A(2) (3) (7) (9)   IT Services       733       733       880  
Continuum Managed Services LLC – Class B(2) (3) (7) (9)   IT Services       496,698       7       1,252  
Country Fresh Holding Company Inc.(2) (3) (7) (9)   Food Products       671       839       821  
Elah Holdings, Inc.^ (2) (3) (7) (9)   Capital Markets       46,214       2,234       2,234  
Iracore International Holdings,
Inc.^ (2) (7) (9)
  Energy Equipment & Services       28,898       7,003       6,357  
Kawa Solar Holdings
Limited^ (2) (7) (8) (9)
  Construction & Engineering       1,399,556              
National Spine and Pain Centers,
LLC(2) (3) (7) (9)
  Health Care Providers & Services       600       600       255  
NTS Communications,
Inc.^ (2) (7) (9)
  Diversified Telecommunication Services       595,215       3        
Prairie Provident Resources,
Inc.^^^ (8) (9)
  Oil, Gas & Consumable Fuels       3,579,988       9,237       246  
Wrike, Inc.(2) (3) (7) (9)   Professional Services       348,478       2,165       2,938  
Yasso, Inc.(2) (3) (7) (9)   Food Products       850       850       354  
           

 

 

   

 

 

 

Total Common Stock

 

    67,885       53,925  
           

 

 

   

 

 

 
TOTAL INVESTMENTS – 221.18%       $ 1,573,423     $ 1,533,710  
           

 

 

   

 

 

 
LIABILITIES IN EXCESS OF OTHER ASSETS – (121.18%)         $ (840,283
             

 

 

 
NET ASSETS – 100.00%         $ 693,427  
             

 

 

 

 

(+)   

The Consolidated Schedule of Investments discloses the actual interest rate for partially or fully funded debt in effect as of the reporting date. Variable rate loans bear interest at a rate that may be determined by reference to either LIBOR (“L”) or alternate base rate (commonly based on the Prime Rate (“P”)), at the borrower’s option, which reset periodically based on the terms of the credit agreement. L loans are typically indexed to 12 month, 6 month, 3 month, 2 month, 1 month or 1 week L rates. As of June 30, 2019, rates for the 12 month, 6 month, 3 month, 2 month, 1 month and 1 week L are 2.18%, 2.20%, 2.32%, 2.33%, 2.40% and 2.37%, respectively. As of June 30, 2019, P was 5.50%. For investments with multiple reference rates or alternate base rates, the interest rate shown is the weighted average interest rate in effect at June 30, 2019.

(++)   

Par amount is denominated in U.S. Dollars (“$”) unless otherwise noted, Euro (“€”).

 

The accompanying notes are part of these unaudited consolidated financial statements.

 

12


Goldman Sachs BDC, Inc.

Consolidated Schedule of Investments as of June 30, 2019 (continued)

(in thousands, except share and per share amounts)

(Unaudited)

 

#   

Percentages are based on net assets.

^   

As defined in the Investment Company Act of 1940, the investment is deemed to be an “affiliated person” of the Company because the Company owns, either directly or indirectly, 5% or more of the portfolio company’s outstanding voting securities. See Note 3 “Significant Agreements and Related Party Transactions”.

^^   

As defined in the Investment Company Act of 1940, the investment is deemed to be a “controlled affiliated person” of the Company because the Company owns, either directly or indirectly, 25% or more of the portfolio company’s outstanding voting securities or has the power to exercise control over management or policies of such portfolio company. See Note 3 “Significant Agreements and Related Party Transactions”.

^^^   

The portfolio company is otherwise deemed to be an “affiliated person” of the Company under the Investment Company Act of 1940. See Note 3 “Significant Agreements and Related Party Transactions”.

(1)   

Assets are pledged as collateral for the Revolving Credit Facility. See Note 6 “Debt”.

(2)   

The fair value of the investment was determined using significant unobservable inputs. See Note 5 “Fair Value Measurement”.

(3)   

Represent co-investments made with the Company’s affiliates in accordance with the terms of the exemptive relief that the Company received from the U.S. Securities and Exchange Commission. See Note 3 “Significant Agreements and Related Party Transactions”.

(4)   

The investment includes an exit fee that is receivable upon repayment of the loan. See Note 2 “Significant Accounting Policies”.

(5)   

Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion. The unfunded loan commitment may be subject to a commitment termination date that may expire prior to the maturity date stated. See Note 8 “Commitments and Contingencies”.

(6)   

The negative cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan. The negative fair value is the result of the capitalized discount on the loan.

(7)   

Securities exempt from registration under the Securities Act of 1933 (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act. As of June 30, 2019, the aggregate fair value of these securities is $139,018 or 20.05% of the Company’s net assets. The acquisition dates of the restricted securities are as follows:

 

Investment    Acquisition Date
Accuity Delivery Systems, LLC – Preferred Stock    06/13/2018
Animal Supply Holdings, LLC – Common Stock    02/22/2019
Animal Supply Holdings, LLC – Preferred Stock    02/22/2019
Artesyn Embedded Technologies, Inc. – 1st Lien/Senior Secured Debt    09/26/2013
Bolttech Mannings, Inc. – Common Stock    12/22/2017
CB-HDT Holdings, Inc. – Preferred Stock    07/01/2016
CB-HDT Holdings, Inc. – Common Stock    07/01/2016
Collaborative Imaging Holdco, LLC – Class B – Common Stock    03/30/2018
Collaborative Imaging Holdco, LLC – Performance Units – Common Stock    03/30/2018
Conergy Asia Holdings, Ltd. – Common Stock    07/31/2017
Conergy Asia Holdings, Ltd. – Preferred Stock    08/23/2017
Continuum Managed Services LLC – Class A – Common Stock    06/08/2017
Continuum Managed Services LLC – Class B – Common Stock    06/08/2017
Country Fresh Holding Company Inc. – Common Stock    04/29/2019
Elah Holdings, Inc. – Common Stock    05/09/2018
Heligear Acquisition Co. – 1st Lien/Senior Secured Debt    09/30/2014
Iracore International Holdings, Inc. – Common Stock    04/13/2017
Kawa Solar Holdings Limited – Common Stock    08/17/2016
Kawa Solar Holdings Limited – Preferred Stock    10/25/2016
NTS Communications, Inc. – Preferred Stock    07/22/2016
NTS Communications, Inc. – Common Stock    07/22/2016
National Spine and Pain Centers, LLC – Common Stock    06/02/2017
Wine.com, LLC – Preferred Stock    11/14/2018
Wrike, Inc. – Common Stock    12/31/2018
Yasso, Inc. – Common Stock    03/23/2017

 

(8)   

The investment is not a qualifying asset under Section 55(a) of the Investment Company Act of 1940. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of June 30, 2019 the aggregate fair value of these securities is $56,647 or 3.61% of the Company’s total assets.

(9)   

Non-income producing security.

(10)   

The investment is on non-accrual status as of June 30, 2019.

(11)   

In exchange for the greater risk of loss, the “last-out” portion of the Company’s unitranche loan investment generally earns a higher interest rate than the “first-out” portions. The “first-out” portion of the loan would generally receive priority with respect to payment of principal, interest and any other amounts due thereunder over the “last-out” portion that the Company would continue to hold.

PIK – Payment-In-Kind

ADDITIONAL INFORMATION

Foreign currency forward contracts

 

Counterparty      Currency
Purchased
       Currency
Sold
       Settlement        Unrealized Appreciation
(Depreciation)
 
Bank of America, N.A.        USD 375          EUR 315          07/03/2019        $ 17  
Bank of America, N.A.        USD 311          EUR 260          08/05/2019          14  
Bank of America, N.A.        USD 394          EUR 329          10/04/2019          18  
Bank of America, N.A.        USD 324          EUR 269          11/05/2019          15  
Bank of America, N.A.        USD 393          EUR 325          01/06/2020          18  
Bank of America, N.A.        USD 399          EUR 327          04/06/2020          20  
Bank of America, N.A.        USD 400          EUR 325          07/06/2020          20  
                   

 

 

 
                    $ 122  
                   

 

 

 

Currency Abbreviations:

EUR – Euro

USD – U.S. Dollar

 

The accompanying notes are part of these unaudited consolidated financial statements.

 

13


Goldman Sachs BDC, Inc.

Consolidated Schedule of Investments as of December 31, 2018

(in thousands, except share and per share amounts)

 

Portfolio Company   Industry   Interest Rate (+)   Reference Rate and
Spread (+)
  Maturity     Par Amount (++)     Cost     Fair Value  
Investments at Fair Value – 193.75% #

 

Corporate Debt (1) – 173.98%

 

1st Lien/Senior Secured Debt – 102.78%

 

Accuity Delivery Systems, LLC^ (2) (3)   Health Care Providers & Services   9.78%   L + 7.00%; 1.00% Floor     06/13/2023     $ 10,170     $ 9,892     $ 9,890  
Apptio, Inc.(2) (4)   IT Services     L + 7.25%; 1.00% Floor     1/10/2025       26,696              
Apptio, Inc.(2) (4)   IT Services     L + 7.25%; 1.00% Floor     1/10/2025       2,225              
Artesyn Embedded Technologies,
Inc.(5)
  Electronic Equipment, Instruments & Components   9.75%       10/15/2020       20,000       20,000       18,400  
Associations, Inc.(2) (3)   Real Estate Management & Development   9.40%   L + 7.00% (incl. 3.00%
PIK); 1.00% Floor
    07/30/2024       11,788       11,650       11,671  
Associations, Inc.(2) (3) (4)   Real Estate Management & Development   9.40%   L + 7.00% (incl. 3.00%
PIK); 1.00% Floor
    07/30/2024       2,938       1,012       1,017  
Associations, Inc.(2) (3) (4) (6)   Real Estate Management & Development     L + 4.00%; 1.00% Floor     07/30/2024       587       (7     (6
Avenue Stores, LLC(3)   Specialty Retail   10.62%   L + 8.00%; 1.00% Floor     09/18/2020       30,300       29,874       29,467  
Businessolver.com, Inc.(2) (3)   Health Care Technology   10.12%   L + 7.50%; 1.00% Floor     05/15/2023       12,549       12,323       12,298  
Businessolver.com, Inc.(2) (3) (4)   Health Care Technology   12.00%   P + 6.50%; 2.00% Floor     05/15/2023       1,569       600       596  
Businessolver.com, Inc.(2) (3) (4)   Health Care Technology   10.12%   L + 7.50%; 1.00% Floor     05/15/2023       1,882       450       433  
Collaborative Imaging,
LLC^^^ (2) (3)
  Health Care Providers & Services   9.03%   L + 6.50%; 1.00% Floor     03/28/2025       8,900       8,777       8,722  
Continuum Managed Services
LLC(2) (3)
  IT Services   8.53%   L + 6.00%; 1.00% Floor     06/08/2023       21,335       20,870       20,908  
Continuum Managed Services
LLC(2) (3)
  IT Services   8.53%   L + 6.00%; 1.00% Floor     06/08/2023       6,140       6,017       6,017  
Continuum Managed Services
LLC(2) (3)
  IT Services   8.53%   L + 6.00%; 1.00% Floor     06/08/2023       1,800       1,763       1,764  
Continuum Managed Services
LLC(2) (3) (4) (6)
  IT Services     L + 6.00%; 1.00% Floor     06/08/2022       2,220       (42     (44
Dade Paper & Bag, LLC(2) (3)   Distributors   10.02%   L + 7.50%; 1.00% Floor     06/10/2024       10,934       10,752       10,769  
Dade Paper & Bag, LLC(2) (3)   Distributors   9.52%   L + 7.00%; 1.00% Floor     06/10/2024       1,395       1,382       1,342  
Datto, Inc.(2)   IT Services   10.46%   L + 8.00%; 1.00% Floor     12/07/2022       37,027       36,429       36,749  
Datto, Inc.(2) (4) (6)   IT Services     L + 8.00%; 1.00% Floor     12/07/2022       2,492       (39     (19
DDS USA Holding, Inc.(2)   Health Care Equipment & Supplies   8.57%   L + 5.75%; 1.00% Floor     06/30/2022       3,972       3,953       3,942  
DDS USA Holding, Inc.(2)   Health Care Equipment & Supplies   8.57%   L + 5.75%; 1.00% Floor     06/30/2022       3,843       3,825       3,815  
DDS USA Holding, Inc.(2) (4) (6)   Health Care Equipment & Supplies     L + 5.75%; 1.00% Floor     06/30/2022       1,079       (5     (8
Diligent Corporation(2) (3)   Professional Services   8.03%   L + 5.50%; 1.00% Floor     04/14/2022     16,179       18,496       18,305  
Diligent Corporation(2) (3)   Professional Services   8.03%   L + 5.50%; 1.00% Floor     04/14/2022       512       505       505  
Diligent Corporation(2) (3) (4)   Professional Services   8.28%   L + 5.50%; 1.00% Floor     04/14/2022       1,300       491       504  
Diligent Corporation(2) (3) (4) (6)   Professional Services     L + 5.50%; 1.00% Floor     04/14/2022       247       (3     (3
Diligent Corporation(2) (3) (4) (6)   Professional Services     L + 5.50%; 1.00% Floor     04/14/2022       9,590       (120     (120
Elemica, Inc.(3)   Software   9.52%   L + 7.00%; 1.00% Floor     07/07/2021       41,438       40,844       40,920  
Elemica, Inc.(3) (4) (6)   Software     L + 7.00%; 1.00% Floor     07/07/2021       6,000       (80     (75
Empirix, Inc.(2) (3)   Diversified Telecommunication Services   8.93%   L + 6.25%; 1.00% Floor     09/25/2024       22,300       21,924       21,910  
Empirix, Inc.(2) (3) (4) (6)   Diversified Telecommunication Services     L + 6.25%; 1.00% Floor     09/25/2023       1,300       (22     (23
Fenergo Finance 3
Limited(2) (3) (7)
  Diversified Financial Services   9.13%   L + 6.25%; 1.00% Floor     09/05/2024     17,800       20,344       19,986  
Fenergo Finance 3
Limited(2) (3) (4) (6) (7)
  Diversified Financial Services     L + 6.25%; 1.00% Floor     09/05/2024       1,182       (20     (24
Fenergo Finance 3
Limited(2) (3) (4) (6) (7)
  Diversified Financial Services     L + 6.25%; 1.00% Floor     09/05/2024     1,500       (29     (59
Gastro Health Holdco,
LLC(2) (3)
  Health Care Providers & Services   8.74%   L + 6.00%; 1.00% Floor     09/04/2024       10,200       10,005       9,996  
Gastro Health Holdco,
LLC(2) (3) (4) (6)
  Health Care Providers & Services     L + 6.00%; 1.00% Floor     09/04/2023       2,000       (37     (40
Gastro Health Holdco,
LLC(2) (3) (4) (6)
  Health Care Providers & Services     L + 6.00%; 1.00% Floor     09/04/2024       5,100       (60     (102
Heligear Acquisition Co.(3) (5)   Aerospace & Defense   10.25%       10/15/2019       17,500       17,438       17,106  
Hygiena Borrower LLC   Life Sciences Tools & Services   6.80%   L + 4.00%; 1.00% Floor     08/26/2022       3,769       3,719       3,694  
Hygiena Borrower LLC(4) (6)   Life Sciences Tools & Services     L + 4.00%; 1.00% Floor     08/26/2022       380       (5     (8
Hygiena Borrower LLC(4) (6)   Life Sciences Tools & Services     L + 4.00%; 1.00% Floor     08/26/2022       571       (4     (11

 

The accompanying notes are part of these unaudited consolidated financial statements.

 

14


Goldman Sachs BDC, Inc.

Consolidated Schedule of Investments as of December 31, 2018 (continued)

(in thousands, except share and per share amounts)

 

Portfolio Company   Industry   Interest Rate (+)   Reference Rate and
Spread (+)
  Maturity     Par Amount (++)     Cost     Fair Value  
iCIMS, Inc.(2) (3)   Software   8.94%   L + 6.50%; 1.00% Floor     09/12/2024     $ 29,895     $ 29,321     $ 29,297  
iCIMS, Inc.(2) (3) (4) (6)   Software     L + 6.50%; 1.00% Floor     09/12/2024       1,868       (35     (37
Infinity Sales Group(3) (8)   Media   13.31%   L + 10.50%; 1.00% Floor     11/23/2020       29,529       30,739       29,529  
Integral Ad Science, Inc.(2) (3)   Media   9.78%   L + 7.25% (incl.1.25%
PIK); 1.00% Floor
    07/19/2024       23,733       23,289       23,258  
Integral Ad Science, Inc.(2) (3) (4) (6)   Media     L + 6.00%; 1.00% Floor     07/19/2023       1,815       (33     (36
Iracore International Holdings, Inc.^ (3)   Energy Equipment & Services   11.63%   L + 9.00%; 1.00% Floor     04/12/2021       3,389       3,389       3,389  
Kawa Solar Holdings
Limited^ (3) (7) (9)
  Construction & Engineering     L + 8.00% PIK     05/26/2020       8,460       8,150       8,066  
Kawa Solar Holdings
Limited^ (3) (7) (10)
  Construction & Engineering         05/26/2020       5,201       2,683        
Legacy Buyer Corp.(3)   Health Care Providers & Services   10.81%   L + 8.00%; 1.00% Floor     10/24/2019       22,841       22,746       22,841  
Legacy Buyer Corp.(3) (4) (6)   Health Care Providers & Services     L + 8.00%; 1.00% Floor     10/24/2019       2,500       (10      
Lithium Technologies, Inc.(2) (3)   Internet Software & Services   10.39%   L + 8.00%; 1.00% Floor     10/03/2022       38,966       38,194       38,187  
Lithium Technologies,
Inc.(2) (3) (4) (6)
  Internet Software & Services     L + 8.00%; 1.00% Floor     10/03/2022       2,684       (50     (54
Madison-Kipp Corporation(3)   Machinery   11.53%   L + 9.00%; 1.00% Floor     05/26/2020       29,879       29,677       29,805  
Midwest Transport, Inc.(2)   Road & Rail   9.80%   L + 7.00%; 1.00% Floor     10/02/2023       12,541       12,421       12,416  
MMIT Holdings, LLC(2)   Health Care Technology   8.02%   L + 5.50%; 1.00% Floor     11/15/2024       8,900       8,725       8,722  
MMIT Holdings, LLC(2) (4) (6)   Health Care Technology     L + 5.50%; 1.00% Floor     11/15/2024       2,550       (50     (51
Netvoyage Corporation(2) (3)   Software   11.53%   L + 9.00%; 1.00% Floor     03/24/2022       8,601       8,477       8,494  
Netvoyage Corporation(2) (3) (4) (6)   Software     L + 9.00%; 1.00% Floor     03/24/2022       654       (8     (8
Picture Head Midco LLC(2) (3)   Media   9.27%   L + 6.75%; 1.00% Floor     08/31/2023       23,120       22,683       22,658  
Picture Head Midco LLC(2) (3) (4)   Media   9.27%   L + 6.75%; 1.00% Floor     08/31/2023       2,540       738       711  
Picture Head Midco
LLC(2) (3) (4) (6)
  Media     L + 6.75%; 1.00% Floor     08/31/2023       2,540       (47     (51
Power Stop, LLC(2)   Auto Components   7.55%   L + 4.75%     10/19/2025       7,600       7,581       7,562  
SF Home Décor, LLC(2) (3)   Household Products   12.31%   L + 9.50%; 1.00% Floor     07/13/2022       20,063       19,601       19,511  
SPay, Inc.(2) (3)   Internet Software & Services   8.22%   L + 5.75%; 1.00% Floor     06/17/2024       10,300       10,109       10,042  
SPay, Inc.(2) (3) (4)   Internet Software & Services   8.34%   L + 5.75%; 1.00% Floor     06/17/2024       1,140       815       807  
SPay, Inc.(2) (3) (4) (6)   Internet Software & Services     L + 5.75%; 1.00% Floor     06/17/2024       5,720       (52     (143
The Merit Distribution Group, LLC(3)   Distributors   14.06%   L + 11.25%; 0.50% Floor     04/08/2021       22,375       22,071       22,207  
US Med Acquisition, Inc.(3)   Health Care Equipment & Supplies   11.80%   L + 9.00%; 1.00% Floor     08/13/2021       29,954       29,643       27,782  
Vexos, Inc.(3)   Electronic Equipment, Instruments & Components   11.90%   L + 9.50%; 1.00% Floor     10/09/2019       36,235       36,089       35,872  
VRC Companies, LLC(3) (4)   Commercial Services & Supplies   9.03%   L + 6.50%; 1.00% Floor     03/31/2023       3,683       2,776       2,774  
VRC Companies, LLC(3) (4)   Commercial Services & Supplies   9.45%   L + 6.50%; 1.00% Floor     03/31/2022       175       88       88  
Wine.com, LLC(2)   Beverages   9.86%   L + 7.00%; 1.00% Floor     11/14/2024       6,400       6,274       6,272  
Wrike, Inc.(2)   Professional Services   9.28%   L + 6.75%; 1.00% Floor     12/31/2024       19,712       19,317       19,317  
Wrike, Inc.(2) (4) (6)   Professional Services     L + 6.75%; 1.00% Floor     12/31/2024       1,600       (32     (32
Xactly Corporation(2) (3)   Internet Software & Services   9.78%   L + 7.25%; 1.00% Floor     07/29/2022       22,860       22,504       22,517  
Xactly Corporation(2) (3) (4) (6)   Internet Software & Services     L + 7.25%; 1.00% Floor     07/29/2022       1,697       (25     (25
Yasso, Inc.(2) (3)   Food Products   10.27%   L + 7.75%; 1.00% Floor     03/23/2022       8,119       8,006       7,733  
           

 

 

   

 

 

 

Total 1st Lien/Senior Secured Debt

 

      738,626       729,604  
1st Lien/Last-Out Unitranche (11) – 15.05%

 

ASC Acquisition Holdings,
LLC(3)
  Distributors   10.03%   L + 7.50%; 1.00% Floor     12/15/2021       6,000       5,883       5,850  
Intelligent Document Solutions, Inc.(2) (3)   Diversified Financial Services   8.80%   L + 6.00%; 1.00% Floor     02/28/2024       11,900       11,555       11,543  
Mervin Manufacturing, Inc.(3)   Leisure Equipment & Products   9.94%   L + 7.50%     10/10/2019       11,165       11,120       10,746  
NTS Communications,
Inc.^ (3) (9)
  Diversified Telecommunication Services     L + 9.00% PIK; 1.25% Floor     06/06/2019       58,747       55,968       49,054  

 

The accompanying notes are part of these unaudited consolidated financial statements.

 

15


Goldman Sachs BDC, Inc.

Consolidated Schedule of Investments as of December 31, 2018 (continued)

(in thousands, except share and per share amounts)

 

Portfolio Company   Industry   Interest Rate (+)   Reference Rate and
Spread (+)
  Maturity     Par Amount (++)     Cost     Fair Value  
NTS Communications,
Inc.^ (3)
  Diversified Telecommunication Services   11.81%   L + 9.00% PIK; 1.25% Floor     06/06/2019     $ 6,503     $ 6,309     $ 6,503  
RugsUSA, LLC(2) (3)   Household Products   9.31%   L + 6.50%; 1.00% Floor     04/30/2023       5,840       5,788       5,781  
Smarsh, Inc.(2) (3)   Software   10.41%   L + 7.88%; 1.00% Floor     03/31/2021       17,578       17,381       17,402  
           

 

 

   

 

 

 

Total 1st Lien/Last-Out Unitranche

 

      114,004       106,879  
2nd Lien/Senior Secured Debt – 55.21%

 

American Dental Partners,
Inc.(2) (3)
  Health Care Providers & Services   11.30%   L + 8.50%; 1.00% Floor     09/25/2023       5,738       5,624       5,623  
ASC Acquisition Holdings,
LLC(3) (9)
  Distributors     L + 17.00% (incl. 4.00%
PIK); 1.00% Floor
    12/15/2022       30,307       29,689       21,745  
ASC Acquisition Holdings,
LLC (3) (9)
  Distributors     L + 17.00% (incl. 4.00%
PIK); 1.00% Floor
    12/15/2022       24,851       24,423       17,831  
Bolttech Mannings, Inc.^^ (3)   Commercial Services & Supplies   10.74%   L + 8.00% PIK     11/19/2021       19,626       19,626       19,429  
Country Fresh Holdings,
LLC(2) (3)
  Food Products   11.20%   L + 8.75%; 1.00% Floor     10/02/2023       9,400       9,246       7,802  
DiscoverOrg, LLC(3)   Software   11.03%   L + 8.50%; 1.00% Floor     02/23/2024       59,500       58,540       59,054  
DuBois Chemicals, Inc.(2)   Chemicals   10.52%   L + 8.00%; 1.00% Floor     03/15/2025       26,220       25,775       25,696  
ERC Finance, LLC(2) (3)   Health Care Providers & Services   10.74%   L + 8.22%; 1.00% Floor     09/22/2025       19,800       19,404       19,404  
Genesis Acquisition
Co.(2) (3)
  Diversified Financial Services   10.02%   L + 7.50%     07/31/2025       7,000       6,832       6,808  
Genesis Acquisition Co.(2) (3) (4) (6)   Diversified Financial Services     L + 7.50%     07/31/2025       1,800       (21     (49
Hygiena Borrower LLC(3)   Life Sciences Tools & Services   10.55%   L + 7.75%; 1.00% Floor     08/26/2023       1,860       1,826       1,827  
Hygiena Borrower LLC(3) (4)   Life Sciences Tools & Services   10.55%   L + 7.75%; 1.00% Floor     08/26/2023       680       90       85  
ICP Industrial, Inc.(2) (3)   Chemicals   10.68%   L + 8.25%; 1.00% Floor     05/03/2024       20,400       19,960       19,941  
IHS Intermediate Inc.(3)   Health Care Providers & Services   10.74%   L + 8.25%; 1.00% Floor     07/20/2022       10,000       9,880       9,350  
Institutional Shareholder Services Inc.(2)   Diversified Financial Services   10.55%   L + 7.75%; 1.00% Floor     10/16/2025       5,100       5,077       4,998  
Market Track, LLC(2) (3)   Internet Catalog & Retail   10.18%   L + 7.75%; 1.00% Floor     06/05/2025       22,200       21,628       21,090  
MPI Products LLC(3)   Auto Components   11.71%   L + 9.00%; 1.00% Floor     01/30/2020       20,000       19,924       19,700  
National Spine and Pain Centers, LLC(2) (3)   Health Care Providers & Services   10.77%   L + 8.25%; 1.00% Floor     12/02/2024       19,100       18,615       18,623  
Odyssey Logistics & Technology Corporation(2)   Road & Rail   10.52%   L + 8.00%; 1.00% Floor     10/12/2025       18,722       18,339       18,207  
P2 Upstream Acquisition Co.   Software   10.60%   L + 8.00%; 1.00% Floor     04/30/2021       3,500       3,486       3,325  
SMB Shipping Logistics, LLC(2)   Air Freight & Logistics   10.86%   L + 8.00%; 1.00% Floor     02/03/2025       41,667       41,027       40,833  
Spectrum Plastics Group,
Inc.(2)
  Containers & Packaging   9.52%   L + 7.00%; 1.00% Floor     01/31/2026       6,248       6,219       6,060  
Viant Medical Holdings,
Inc.(2)
  Health Care Equipment & Supplies   10.55%   L + 7.75%     07/02/2026       8,260       8,181       8,012  
YI, LLC(2) (3)   Health Care Equipment & Supplies   10.55%   L + 7.75%; 1.00% Floor     11/07/2025       15,300       14,887       14,879  
Zep Inc.(2)   Chemicals   11.05%   L + 8.25%; 1.00% Floor     08/11/2025       23,800       23,274       21,658  
           

 

 

   

 

 

 

Total 2nd Lien/Senior Secured Debt

 

      411,551       391,931  
Unsecured Debt – 0.94%

 

CB-HDT Holdings, Inc.^ (3)   Aerospace & Defense   12.00% PIK       12/15/2019       3,931       3,931       3,922  
CB-HDT Holdings, Inc.^ (3)   Aerospace & Defense   12.00% PIK       03/05/2021       1,716       1,716       1,711  
Conergy Asia & ME Pte.
LTD.^ (3) (7)
  Construction & Engineering   10.00%       05/26/2020       1,064       1,064       1,064  
           

 

 

   

 

 

 

Total Unsecured Debt

 

    6,711       6,697  
           

 

 

   

 

 

 

Total Corporate Debt

 

    1,270,892       1,235,111  
           

 

 

   

 

 

 

 

The accompanying notes are part of these unaudited consolidated financial statements.

 

16


Goldman Sachs BDC, Inc.

Consolidated Schedule of Investments as of December 31, 2018 (continued)

(in thousands, except share and per share amounts)

 

Portfolio Company   Industry        Coupon          Shares     Cost     Fair Value  
Preferred Stock (1) – 3.03%

 

Accuity Delivery Systems, LLC^ (2) (3) (5) (10)   Health Care Providers & Services       97,130     $ 3,200     $ 3,840  
CB-HDT Holdings, Inc.^ (3) (5) (10)   Aerospace & Defense       1,108,333       10,186       15,794  
Conergy Asia Holdings, Ltd.^ (3) (5) (7) (10)   Construction & Engineering       600,000       600        
Kawa Solar Holdings Limited^ (3) (5) (7) (9)   Construction & Engineering   8.00% PIK       58,430       778        
NTS Communications, Inc.^ (3) (5) (10)   Diversified Telecommunication Services       263       187        
Wine.com, LLC(2) (5) (10)   Beverages       221,072       1,900       1,900  
           

 

 

   

 

 

 

Total Preferred Stock

 

    16,851       21,534  
           

 

 

   

 

 

 
Common Stock (1) – 3.15%

 

Bolttech Mannings, Inc.^^ (3) (5) (10)   Commercial Services & Supplies       8,000       6,591       4,434  
CB-HDT Holdings, Inc.^ (3) (5) (10)   Aerospace & Defense       453,383       2,393       5,427  
Collaborative Imaging Holdco, LLC –
Class B^^^ (2) (3) (5)
  Health Care Providers & Services       8,464       1,141       1,330  
Collaborative Imaging Holdco, LLC –
Class C^^^ (2) (3) (5) (7) (10)
  Health Care Providers & Services       7,988       159       221  
Conergy Asia Holdings, Ltd.^ (3) (5) (7) (10)   Construction & Engineering       2,000       4,700        
Continuum Managed Services LLC –
Class A(2) (3) (5) (10)
  IT Services       733       732       842  
Continuum Managed Services LLC –
Class B(2) (3) (5) (10)
  IT Services       496,698       7       268  
Elah Holdings, Inc.^ (2) (3) (5) (10)   Capital Markets       46,214       2,234       2,234  
Iracore International Holdings, Inc.^ (3) (5) (10)   Energy Equipment & Services       28,898       7,003       4,418  
Kawa Solar Holdings Limited^ (3) (5) (7) (10)   Construction & Engineering       1,399,556              
National Spine and Pain Centers, LLC(2) (3) (5) (10)   Health Care Providers & Services       600       600       318  
NTS Communications, Inc.^ (3) (5) (10)   Diversified Telecommunication Services       595,215       3        
Prairie Provident Resources, Inc.^^^ (7) (10)   Oil, Gas & Consumable Fuels       3,579,988       9,237       504  
Wrike, Inc.(2) (5) (10)   Professional Services       348,478       2,165       2,165  
Yasso, Inc.(2) (3) (5) (10)   Food Products       850       850       182  
           

 

 

   

 

 

 

Total Common Stock

 

    37,815       22,343  
           

 

 

   

 

 

 
Portfolio Company                         LLC Interest     Cost     Fair Value  
Investment Funds & Vehicles (1) – 13.59%          
Senior Credit Fund, LLC^^ (7)       $ 100,000     $ 100,000     $ 96,456  
           

 

 

   

 

 

 

Total Investment Funds & Vehicles

          100,000       96,456  
           

 

 

   

 

 

 
TOTAL INVESTMENTS – 193.75%       $ 1,425,558     $ 1,375,444  
           

 

 

   

 

 

 
LIABILITIES IN EXCESS OF OTHER ASSETS – (93.75%)         $ (665,552
             

 

 

 
NET ASSETS – 100.00%         $ 709,892  
             

 

 

 

 

(+)   

The Consolidated Schedule of Investments discloses the actual interest rate for partially or fully funded debt in effect as of the reporting date. Variable rate loans bear interest at a rate that may be determined by reference to either LIBOR (“L”) or alternate base rate (commonly based on the Prime Rate (“P”)), at the borrower’s option, which reset periodically based on the terms of the credit agreement. L loans are typically indexed to 12 month, 6 month, 3 month, 2 month, 1 month or 1 week L rates. As of December 31, 2018, rates for the 12 month, 6 month, 3 month, 2 month, 1 month and 1 week L are 3.01%, 2.88%, 2.81%, 2.61%, 2.50% and 2.41%, respectively. As of December 31, 2018, P was 5.50%. For investments with multiple reference rates or alternate base rates, the interest rate shown is the weighted average interest rate in effect at December 31, 2018.

(++)   

Par amount is denominated in U.S. Dollars (“$”) unless otherwise noted, Euro (“€”).

#  

Percentages are based on net assets.

^   

As defined in the Investment Company Act of 1940, the investment is deemed to be an “affiliated person” of the Company because the Company owns, either directly or indirectly, 5% or more of the portfolio company’s outstanding voting securities. See Note 3 “Significant Agreements and Related Party Transactions”.

^^   

As defined in the Investment Company Act of 1940, the investment is deemed to be a “controlled affiliated person” of the Company because the Company owns, either directly or indirectly, 25% or more of the portfolio company’s outstanding voting securities or has the power to exercise control over management or policies of such portfolio company. See Note 3 “Significant Agreements and Related Party Transactions”.

^^^   

The portfolio company is otherwise deemed to be an “affiliated person” of the Company under the Investment Company Act of 1940. See Note 3 “Significant Agreements and Related Party Transactions”.

 

The accompanying notes are part of these unaudited consolidated financial statements.

 

17


Goldman Sachs BDC, Inc.

Consolidated Schedule of Investments as of December 31, 2018 (continued)

(in thousands, except share and per share amounts)

 

(1)   

Assets are pledged as collateral for the Revolving Credit Facility. See Note 6 “Debt”.

(2)   

Represent co-investments made with the Company’s affiliates in accordance with the terms of the exemptive relief that the Company received from the U.S. Securities and Exchange Commission. See Note 3 “Significant Agreements and Related Party Transactions”.

(3)   

The fair value of the investment was determined using significant unobservable inputs. See Note 5 “Fair Value Measurement”.

(4)   

Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion. The unfunded loan commitment may be subject to a commitment termination date that may expire prior to the maturity date stated. See Note 8 “Commitments and Contingencies”.

(5)   

Securities exempt from registration under the Securities Act, and may be deemed to be “restricted securities” under the Securities Act. As of December 31, 2018, the aggregate fair value of these securities is $78,879 or 11.11% of the Company’s net assets. The acquisition dates of the restricted securities are as follows:

 

Investment    Acquisition Date
Accuity Delivery Systems, LLC – Preferred Stock    06/13/2018
Artesyn Embedded Technologies, Inc. – 1st Lien/Senior Secured Debt    09/26/2013
Bolttech Mannings, Inc. – Common Stock    12/22/2017
CB-HDT Holdings, Inc. – Preferred Stock    07/01/2016
CB-HDT Holdings, Inc. – Common Stock    07/01/2016
Collaborative Imaging Holdco, LLC – Class B – Common Stock    03/30/2018
Collaborative Imaging Holdco, LLC – Class C – Common Stock    03/30/2018
Conergy Asia Holdings, Ltd. – Common Stock    07/31/2017
Conergy Asia Holdings, Ltd. – Preferred Stock    08/23/2017
Continuum Managed Services LLC – Class A – Common Stock    06/08/2017
Continuum Managed Services LLC – Class B – Common Stock    06/08/2017
Elah Holdings, Inc. – Common Stock    05/09/2018
Heligear Acquisition Co. – 1st Lien/Senior Secured Debt    09/30/2014
Iracore International Holdings, Inc. – Common Stock    04/13/2017
Kawa Solar Holdings Limited – Common Stock    08/17/2016
Kawa Solar Holdings Limited – Preferred Stock    10/25/2016
NTS Communications, Inc. – Preferred Stock    07/22/2016
NTS Communications, Inc. – Common Stock    07/22/2016
National Spine and Pain Centers, LLC – Common Stock    06/02/2017
Wine.com, LLC – Preferred Stock    11/14/2018
Wrike, Inc. – Common Stock    12/31/2018
Yasso, Inc. – Common Stock    03/23/2017

 

(6)   

The negative cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan. The negative fair value is the result of the capitalized discount on the loan.

(7)   

The investment is not a qualifying asset under Section 55(a) of the Investment Company Act of 1940. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of December 31, 2018 the aggregate fair value of these securities is $126,214 or 9.03% of the Company’s total assets.

(8)   

The investment includes an exit fee that is receivable upon repayment of the loan. See Note 2 “Significant Accounting Policies”.

(9)   

The investment is on non-accrual status as of December 31, 2018.

(10)   

Non-income producing security.

(11)   

In exchange for the greater risk of loss, the “last-out” portion of the Company’s unitranche loan investment generally earns a higher interest rate than the “first-out” portions. The “first-out” portion of the loan would generally receive priority with respect to payment of principal, interest and any other amounts due thereunder over the “last-out” portion that the Company would continue to hold.

PIK – Payment-In-Kind

ADDITIONAL INFORMATION

Foreign currency forward contracts

 

Counterparty      Currency
Purchased
       Currency
Sold
       Settlement       

Unrealized Appreciation

(Depreciation)

 
Bank of America, N.A.        USD 352          EUR 300          01/04/2019        $ 8  
Bank of America, N.A.        USD 288          EUR 245          02/05/2019          6  
Bank of America, N.A.        USD 355          EUR 301          04/03/2019          8  
Bank of America, N.A.        USD 309          EUR 260          05/06/2019          7  
Bank of America, N.A.        USD 375          EUR 315          07/03/2019          8  
Bank of America, N.A.        USD 311          EUR 260          08/05/2019          7  
Bank of America, N.A.        USD 394          EUR 329          10/04/2019          9  
Bank of America, N.A.        USD 324          EUR 269          11/05/2019          7  
Bank of America, N.A.        USD 393          EUR 325          01/06/2020          9  
Bank of America, N.A.        USD 399          EUR 327          04/06/2020          10  
Bank of America, N.A.        USD 400          EUR 325          07/06/2020          10  
                   

 

 

 
                    $ 89  
                   

 

 

 

Currency Abbreviations:

EUR – Euro

USD – U.S. Dollar

 

The accompanying notes are part of these unaudited consolidated financial statements.

 

18


Goldman Sachs BDC, Inc.

Notes to the Consolidated Financial Statements

(in thousands, except share and per share amounts)

(Unaudited)

 

1.

ORGANIZATION

Goldman Sachs BDC, Inc. (the “Company,” which term refers to either Goldman Sachs BDC, Inc. or Goldman Sachs BDC, Inc. together with its consolidated subsidiaries, as the context may require) was initially established as Goldman Sachs Liberty Harbor Capital, LLC, a single member Delaware limited liability company (“SMLLC”), on September 26, 2012 and commenced operations on November 15, 2012 with The Goldman Sachs Group, Inc. (“Group Inc.”) as its sole member. On March 29, 2013, the Company elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Effective April 1, 2013, the Company converted from a SMLLC to a Delaware corporation. In addition, the Company has elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with its taxable year ended December 31, 2013.

The Company’s investment objective is to generate current income and, to a lesser extent, capital appreciation primarily through direct originations of secured debt, including first lien, unitranche, including last-out portions of such loans, and second lien debt, and unsecured debt, including mezzanine debt, as well as through select equity investments.

Goldman Sachs Asset Management, L.P. (“GSAM”), a Delaware limited partnership and an affiliate of Goldman Sachs & Co. LLC (including its predecessors, “GS & Co.”), is the investment adviser (the “Investment Adviser”) of the Company. The term “Goldman Sachs” refers to Group Inc., together with GS & Co., GSAM and its other subsidiaries.

On March 23, 2015, the Company completed its initial public offering (“IPO”) and the Company’s common stock began trading on the New York Stock Exchange (“NYSE”) under the symbol “GSBD”.

The Company has formed wholly owned subsidiaries, which are structured as Delaware limited liability companies, to hold certain equity or equity-like investments in portfolio companies.

 

2.

SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Company’s functional currency is U.S. dollars (“USD”) and these consolidated financial statements have been prepared in that currency. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to Regulation S-X. This requires the Company to make certain estimates and assumptions that may affect the amounts reported in the consolidated financial statements and accompanying notes. These consolidated financial statements reflect normal and recurring adjustments that in the opinion of the Company are necessary for the fair statement of the results for the periods presented. Actual results may differ from the estimates and assumptions included in the consolidated financial statements.

Certain financial information that is included in annual consolidated financial statements, including certain financial statement disclosures, prepared in accordance with GAAP, is not required for interim reporting purposes and has been condensed or omitted herein. These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes related thereto for the year ended December 31, 2018, included in the Company’s Annual Report on Form 10-K, which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 28, 2019. The results for the three and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the full fiscal year, any other interim period or any future year or period.

Certain prior period information has been reclassified to conform to the current period presentation. The reclassification has no effect on the Company’s consolidated financial position or the consolidated results of operations as previously reported.

As an investment company, the Company applies the accounting and reporting guidance in Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies (“ASC 946”) issued by the Financial Accounting Standards Board (“FASB”).

Basis of Consolidation

As provided under ASC 946, the Company will not consolidate its investment in a company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. Accordingly, the Company consolidated the financial position and results of operations of its wholly owned subsidiaries, BDC Blocker I, LLC (formerly known as My-On BDC Blocker, LLC), GSBD Blocker II, LLC and GSBD Wine I, LLC. All significant intercompany transactions and balances have been eliminated in consolidation.

 

19


The Company did not consolidate its previous equity interest in Senior Credit Fund, LLC (the “Senior Credit Fund”). For further description of the Company’s previous investment in the Senior Credit Fund, see Note 4 “Investments”.

Revenue Recognition

The Company records its investment transactions on a trade date basis, which is the date when the Company assumes the risks for gains and losses related to that instrument. Realized gains and losses are based on the specific identification method.

Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis. Discounts and premiums to par value on investments purchased are accreted and amortized, respectively, into interest income over the life of the respective investment using the effective interest method. Loan origination fees, original issue discount (“OID”) and market discounts or premiums are capitalized and amortized into interest income using the effective interest method or straight-line method, as applicable. Exit fees that are receivable upon repayment of a loan or debt security are amortized into interest income over the life of the respective investment. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized upfront loan origination fees and unamortized discounts are recorded as interest income. For the three and six months ended June 30, 2019, the Company earned $1,068 and $1,714 in prepayment premiums, respectively, and $1,660 and $2,697 in accelerated accretion of upfront loan origination fees and unamortized discounts, respectively. For the three and six months ended June 30, 2018, the Company earned $1,390 and $1,866 in prepayment premiums, respectively, and $508 and $1,341 in accelerated accretion of upfront loan origination fees and unamortized discounts, respectively.

Fees received from portfolio companies (directors’ fees, consulting fees, administrative fees, tax advisory fees and other similar compensation) are paid to the Company, unless, to the extent required by applicable law or exemptive relief, if any, therefrom, the Company only receives its allocable portion of such fees when invested in the same portfolio company as another account managed by the Investment Adviser.

Dividend income on preferred equity investments is recorded on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity investments is recorded on the record date for private portfolio companies and on the ex-dividend date for publicly traded portfolio companies. Interest and dividend income are presented net of withholding tax, if any.

Certain investments may have contractual payment-in-kind (“PIK”) interest or dividends. PIK represents accrued interest or accumulated dividends that are added to the principal amount or shares (if equity) of the investment on the respective interest or dividend payment dates rather than being paid in cash and generally becomes due at maturity or upon the investment being called by the issuer. PIK is recorded as interest or dividend income, as applicable. If at any point the Company believes PIK is not expected to be realized, the investment generating PIK will be placed on non-accrual status. When a PIK investment is placed on non-accrual status, the accrued, uncapitalized interest or dividends are generally reversed through interest or dividend income, respectively.

Certain structuring fees, amendment fees, syndication fees and commitment fees are recorded as other income when earned. Administrative agent fees received by the Company are recorded as other income when the services are rendered over time.

Non-Accrual Investments

Investments are placed on non-accrual status when it is probable that principal, interest or dividends will not be collected according to the contractual terms. Accrued interest or dividends generally are reversed when an investment is placed on non-accrual status. Interest or dividend payments received on non-accrual investments may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual investments are restored to accrual status when past due principal and interest or dividends are paid and, in management’s judgment, principal and interest or dividend payments are likely to remain current. The Company may make exceptions to this treatment if an investment has sufficient collateral value and is in the process of collection. As of June 30, 2019, the Company had certain investments held in three portfolio companies on non-accrual status, which represented 3.9% and 3.5% of the total investments at amortized cost and at fair value, respectively. As of December 31, 2018, the Company had certain investments held in three portfolio companies on non-accrual status, which represented 8.3% and 7.0% of the total investments at amortized cost and at fair value, respectively.

Investments

The Company carries its investments in accordance with ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), issued by the FASB, which defines fair value, establishes a framework for measuring fair value and requires disclosures about fair value measurements. Fair value is generally based on quoted market prices provided by independent pricing services, broker or dealer quotations or alternative price sources. In the absence of quoted market prices, broker or dealer quotations or alternative price sources, investments are measured at fair value as determined by the board of directors (the “Board of Directors”) within the meaning of the Investment Company Act.

 

20


Due to the inherent uncertainties of valuation, certain estimated fair values may differ significantly from the values that would have been realized had a ready market for these investments existed, and these differences could be material. See Note 5 “Fair Value Measurement”.

The Company generally invests in illiquid securities, including debt and equity investments, of middle-market companies. The Board of Directors has delegated to the Investment Adviser day-to-day responsibility for implementing and maintaining internal controls and procedures related to the valuation of the Company’s portfolio investments. Under valuation procedures adopted by the Board of Directors, market quotations are generally used to assess the value of the investments for which market quotations are readily available. The Investment Adviser obtains these market quotations from independent pricing services or at the bid prices obtained from at least two brokers or dealers, if available; otherwise from a principal market maker or a primary market dealer. To assess the continuing appropriateness of pricing sources and methodologies, the Investment Adviser regularly performs price verification procedures and issues challenges as necessary to independent pricing services or brokers, and any differences are reviewed in accordance with the valuation procedures. If the Board of Directors or Investment Adviser has a bona fide reason to believe any such market quotation does not reflect the fair value of an investment, it may independently value such investment in accordance with valuation procedures for investments for which market quotations are not readily available.

With respect to investments for which market quotations are not readily available, or for which market quotations are deemed not reflective of the fair value, the valuation procedures adopted by the Board of Directors contemplate a multi-step valuation process each quarter, as described below:

 

  (1)

The quarterly valuation process begins with each portfolio company or investment being initially valued by the investment professionals of the Investment Adviser responsible for the portfolio investment;

 

  (2)

The Board of Directors also engages independent valuation firms (the “Independent Valuation Advisors”) to provide independent valuations of the investments for which market quotations are not readily available, or are readily available but deemed not reflective of the fair value of an investment. The Independent Valuation Advisors independently value such investments using quantitative and qualitative information provided by the investment professionals of the Investment Adviser and the portfolio companies as well as any market quotations obtained from independent pricing services, brokers, dealers or market dealers. The Independent Valuation Advisors also provide analyses to support their valuation methodology and calculations. The Independent Valuation Advisors provide an opinion on a final range of values on such investments to the Board of Directors or the Audit Committee. The Independent Valuation Advisors define fair value in accordance with ASC 820 and utilize valuation approaches including the market approach, the income approach or both. A portion of the portfolio is reviewed on a quarterly basis, and all investments in the portfolio for which market quotations are not readily available, or are readily available, but deemed not reflective of the fair value of an investment, are reviewed at least annually by an Independent Valuation Advisor;

 

  (3)

The Independent Valuation Advisors’ preliminary valuations are reviewed by the Investment Adviser and the Valuation Oversight Group (“VOG”), a team that is part of the Controllers Department within the Finance Division of Goldman Sachs. The Independent Valuation Advisors’ valuation ranges are compared to the Investment Adviser’s valuations to ensure the Investment Adviser’s valuations are reasonable. VOG presents the valuations to the Private Investment Valuation and Side Pocket Working Group of the Investment Management Division Valuation Committee, which is comprised of representatives from GSAM who are independent of the investment decision making process;

 

  (4)

The Investment Management Division Valuation Committee ratifies fair valuations and makes recommendations to the Audit Committee of the Board of Directors;

 

  (5)

The Audit Committee of the Board of Directors reviews valuation information provided by the Investment Management Division Valuation Committee, the Investment Adviser and the Independent Valuation Advisors. The Audit Committee then assesses such valuation recommendations; and

 

  (6)

The Board of Directors discusses the valuations and, within the meaning of the Investment Company Act, determines the fair value of the investments in good faith, based on the inputs of the Investment Adviser, the Independent Valuation Advisors and the Audit Committee.

Money Market Funds

Investments in money market funds are valued at net asset value (“NAV”) per share. See Note 3 “Significant Agreements and Related Party Transactions.”

Cash

Cash consists of deposits held at a custodian bank. As of June 30, 2019 and December 31, 2018, the Company held an aggregate cash balance of $10,122 and $6,113, respectively. Foreign currency of $1,228 and $257 (acquisition cost of $1,224 and $255) is included in cash as of June 30, 2019 and December 31, 2018, respectively.

 

21


Foreign Currency Translation

Amounts denominated in foreign currencies are translated into USD on the following basis: (i) investments and other assets and liabilities denominated in foreign currencies are translated into USD based upon currency exchange rates effective on the last business day of the period; and (ii) purchases and sales of investments, borrowings and repayments of such borrowings, income, and expenses denominated in foreign currencies are translated into USD based upon currency exchange rates prevailing on the transaction dates.

The Company does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are included within the net realized and unrealized gains or losses on investments. Fluctuations arising from the translation of non-investment assets and liabilities are included with the net change in unrealized gains (losses) on foreign currency translations on the Consolidated Statements of Operations.

Foreign security and currency translations may involve certain considerations and risks not typically associated with investing in U.S. companies and U.S. government securities. These risks include, but are not limited to, currency fluctuations and revaluations and future adverse political, social and economic developments, which could cause investments in foreign markets to be less liquid and prices more volatile than those of comparable U.S. companies or U.S. government securities.

Derivatives

Foreign currency forward contracts

The Company may enter into foreign currency forward contracts to reduce the Company’s exposure to foreign currency exchange rate fluctuations in the value of foreign currencies. In a foreign currency forward contract, the Company agrees to receive or deliver a fixed quantity of one currency for another, at a pre-determined price at a future date. Forward foreign currency contracts are marked-to-market at the applicable forward rate. Unrealized appreciation (depreciation) on foreign currency forward contracts are recorded on the Consolidated Statements of Assets and Liabilities by counterparty on a net basis, not taking into account collateral posted which is recorded separately, if applicable. Notional amounts of foreign currency forward contract assets and liabilities are presented separately on the Consolidated Schedules of Investments. Purchases and settlements of foreign currency forward contracts having the same settlement date and counterparty are generally settled net and any realized gains or losses are recognized on the settlement date.

The Company does not utilize hedge accounting and as such, the Company recognizes its derivatives at fair value with changes in the net unrealized appreciation (depreciation) on foreign currency forward contracts recorded on the Consolidated Statements of Operations.

Income Taxes

The Company recognizes tax positions in its consolidated financial statements only when it is more likely than not that the position will be sustained upon examination by the relevant taxing authority based on the technical merits of the position. A position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized upon settlement. The Company reports any interest expense related to income tax matters in income tax expense, and any income tax penalties under expenses in the Consolidated Statements of Operations.

The Company’s tax positions have been reviewed based on applicable statutes of limitation for tax assessments, which may vary by jurisdiction, and based on such review, the Company has concluded that no additional provision for income tax is required in the consolidated financial statements. The Company is subject to potential examination by certain taxing authorities in various jurisdictions. The Company’s tax positions are subject to ongoing interpretation of laws and regulations by taxing authorities.

The Company has elected to be treated as a RIC commencing with its taxable year ended December 31, 2013. So long as the Company maintains its status as a RIC, it will generally not be required to pay corporate-level U.S. federal income tax on any ordinary income or capital gains that it distributes at least annually to its stockholders as dividends. As a result, any U.S. federal income tax liability related to income earned and distributed by the Company represents obligations of the Company’s stockholders and will not be reflected in the consolidated financial statements of the Company.

To maintain its tax treatment as a RIC, the Company must meet specified source-of-income and asset diversification requirements and timely distribute to its stockholders for each taxable year at least 90% of its investment company taxable income (generally, its net ordinary income plus the excess of its realized net short-term capital gains over realized net long-term capital losses, determined without regard to the dividends paid deduction). In order for the Company not to be subject to U.S. federal excise taxes, it must distribute annually an amount at least equal to the sum of (i) 98% of its net ordinary income (taking into account certain deferrals and elections) for the calendar year, (ii) 98.2% of its capital gains in excess of capital losses for the one-year period ending on October 31 of the calendar year and (iii) any net ordinary income and capital gains in excess of capital losses for preceding years that were not distributed during such years. The Company, at its discretion, may carry forward taxable income in excess of calendar year dividends and pay a 4% nondeductible U.S. federal excise tax on this income. If the Company chooses to do so, this generally would increase expenses and reduce the amount available to be distributed to stockholders. The Company will accrue excise tax on estimated undistributed taxable income as required. For the three and six months ended June 30, 2019, the Company accrued excise taxes of $446 and $888, respectively. As of June 30, 2019, $1,070 of accrued excise taxes remained payable. For the three and six months ended June 30, 2018, the Company accrued excise taxes of $304 and $589, respectively.

 

22


Certain of the Company’s consolidated subsidiaries are subject to U.S. federal and state corporate-level income taxes. Income tax expense, if any, is included under the income category for which it applies in the Consolidated Statements of Operations. For the three and six months ended June 30, 2019, the Company accrued provision for taxes on realized gains on investments of $121 and $121, respectively. For the three and six months ended June 30, 2019, the Company accrued provision for taxes on unrealized gains on investments of $(152) and $52, respectively. As of June 30, 2019, $550 of income taxes remained payable. For the three and six months ended June 30, 2018, the Company accrued provision for taxes on realized gains on investments of $1 and $(446), respectively. For the three and six months ended June 30, 2018, the Company accrued provision for taxes on unrealized gains on investments of $0 and $0, respectively.

Distributions

Distributions from net investment income and net realized capital gains are determined in accordance with U.S. federal income tax regulations, which may differ from those amounts determined in accordance with GAAP. The Company may pay distributions in excess of its taxable net investment income. This excess would be a tax-free return of capital in the period and reduce the stockholder’s tax basis in its shares. These book/tax differences are either temporary or permanent in nature. To the extent these differences are permanent they are charged or credited to paid-in capital in excess of par, accumulated undistributed net investment income or accumulated net realized gain (loss), as appropriate, in the period that the differences arise. Temporary and permanent differences are primarily attributable to differences in the tax treatment of certain loans and the tax characterization of income and non-deductible expenses. These differences are generally determined in conjunction with the preparation of the Company’s annual RIC tax return. Distributions to common stockholders are recorded on the ex-dividend date. The amount to be paid out as a distribution is determined by the Board of Directors each quarter and is generally based upon the earnings estimated by the Investment Adviser. The Company may pay distributions to its stockholders in a year in excess of its net ordinary income and capital gains for that year and, accordingly, a portion of such distributions may constitute a return of capital for U.S. federal income tax purposes. The Company intends to timely distribute to its stockholders substantially all of its annual taxable income for each year, except that the Company may retain certain net capital gains for reinvestment and carry forward taxable income for distribution in the following year and pay any applicable tax. The specific tax characteristics of the Company’s distributions will be reported to stockholders after the end of the calendar year. All distributions will be subject to available funds, and no assurance can be given that the Company will be able to declare such distributions in future periods.

The Company has adopted a dividend reinvestment plan that provides for reinvestment of all cash distributions declared by the Board of Directors unless a stockholder elects to “opt out” of the plan. As a result, if the Board of Directors declares a cash distribution, then the stockholders who have not “opted out” of the dividend reinvestment plan will have their cash distributions automatically reinvested in additional shares of common stock, rather than receiving the cash distribution. Stockholders who receive distributions in the form of shares of common stock will generally be subject to the same U.S. federal, state and local tax consequences as if they received cash distributions and, for this purpose, stockholders receiving distributions in the form of stock will generally be treated as receiving distributions equal to the fair market value of the stock received through the plan; however, since their cash distributions will be reinvested, those stockholders will not receive cash with which to pay any applicable taxes. Due to regulatory considerations, Group Inc. has opted out of the dividend reinvestment plan, and GS & Co. has opted out of the dividend reinvestment plan in respect of shares of the Company’s common stock acquired through its 10b5-1 plan.

Deferred Financing and Debt Issuance Costs

Deferred financing and debt issuance costs consist of fees and expenses paid in connection with the closing of and amendments to the Company’s senior secured revolving credit agreement (as amended, the “Revolving Credit Facility”) with SunTrust Bank, as administrative agent, and Bank of America, N.A., as syndication agent, and the offering of the Company’s 4.50% Convertible Notes due 2022 (the “Convertible Notes”). These costs are amortized using the straight-line method over the respective term of the Revolving Credit Facility and Convertible Notes. Deferred financing costs related to the Revolving Credit Facility are presented separately as an asset on the Company’s Consolidated Statements of Assets and Liabilities. Deferred debt issuance costs related to the Convertible Notes are presented net against the outstanding debt balance on the Consolidated Statements of Assets and Liabilities.

Deferred Offering Costs

The Company records expenses related to registration statement filings and applicable offering costs as deferred offering costs. To the extent such expenses relate to equity offerings, these expenses are charged as a reduction of paid-in-capital upon each such offering.

New Accounting Pronouncements

In October 2018, the U.S Securities Exchange Commission (“SEC”) adopted the final rule under SEC release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. The Company is no longer required to present components of distributable earnings on the Consolidated Statements of Assets and Liabilities or the sources of distributable earnings and the amount of undistributed net investment income on the Consolidated Statements of Changes in Net Assets. Prior period information has been reclassified to conform to the current period presentation and this had no effect on the Company’s consolidated financial position or the consolidated results of operations as previously reported. The following provides the prior period reclassifications.

 

23


Consolidated Statements of Changes in Net Assets – The table below provides a reconciliation for previously disclosed distributions from net investment income and realized gain for the six months ended June 30, 2018 to distributions from distributable earnings as disclosed in the current filing.

 

Distributions to stockholders from:   

For the six months
ended

June 30, 2018

 
Net investment income    $ (36,148

Total distributions to stockholders

   $ (36,148

 

3.

SIGNIFICANT AGREEMENTS AND RELATED PARTY TRANSACTIONS

Investment Management Agreement

The Company has entered into an investment management agreement (as amended and restated as of June 15, 2018, the “Investment Management Agreement”) with the Investment Adviser, pursuant to which the Investment Adviser manages the Company’s investment program and related activities.

Management Fee

The Company pays the Investment Adviser a management fee (the “Management Fee”), accrued and payable quarterly in arrears. The Management Fee is calculated at (i) an annual rate of 1.50% (0.375% per quarter) (the “Original Rate”) through June 14, 2018 and (ii) an annual rate of 1.00% (0.25% per quarter) (the “New Rate”) thereafter, in each case, of the average value of the Company’s gross assets (excluding cash or cash equivalents but including assets purchased with borrowed amounts) at the end of each of the two most recently completed calendar quarters. The Management Fee for any partial quarter (including any quarter during which both the Original Rate and the New Rate were in effect) will be appropriately prorated based on the actual number of days elapsed relative to the total number of days in such calendar quarter.

For the three and six months ended June 30, 2019, Management Fees amounted to $3,742 and $7,278, respectively. As of June 30, 2019, $3,742 remained payable. For the three and six months ended June 30, 2018, Management Fees amounted to $4,479 and $9,282, respectively.

Incentive Fee

The incentive fee (the “Incentive Fee”) consists of two components that are determined independent of each other, with the result that one component may be payable even if the other is not. Effective as of January 1, 2015, the Incentive Fee is calculated as follows:

A portion of the Incentive Fee is based on income and a portion is based on capital gains, each as described below. The Investment Adviser is entitled to receive the Incentive Fee based on income if Ordinary Income (as defined below) exceeds a quarterly “hurdle rate” of 1.75%. For this purpose, the hurdle is computed by reference to the Company’s NAV and does not take into account changes in the market price of the Company’s common stock.

The Incentive Fee based on income is determined and paid quarterly in arrears at the end of each calendar quarter by reference to the Company’s aggregate net investment income, as adjusted as described below, from the calendar quarter then ending and the eleven preceding calendar quarters (or if shorter, the number of quarters that have occurred since January 1, 2015) (such period the “Trailing Twelve Quarters”). The Incentive Fee based on capital gains is determined and paid annually in arrears at the end of each calendar year by reference to an “Annual Period,” which means the period beginning on January 1 of each calendar year and ending on December 31 of such calendar year or, in the case of the first and last year, the appropriate portion thereof.

The hurdle amount for the Incentive Fee based on income is determined on a quarterly basis and is equal to 1.75% multiplied by the Company’s NAV at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The hurdle amount is calculated after making appropriate adjustments for subscriptions (which includes all of the Company’s issuances of shares of its common stock, including issuances pursuant to its dividend reinvestment plan) and distributions that occurred during the relevant Trailing Twelve Quarters. The Incentive Fee for any partial period will be appropriately prorated.

i. Quarterly Incentive Fee Based on Income

For the portion of the Incentive Fee based on income, the Company pays the Investment Adviser a quarterly Incentive Fee based on the amount by which (A) aggregate net investment income (“Ordinary Income”) in respect of the relevant Trailing Twelve Quarters exceeds (B) the hurdle amount for such Trailing Twelve Quarters. The amount of the excess of (A) over (B) described in this paragraph for such Trailing Twelve Quarters is referred to as the “Excess Income Amount”. Ordinary Income is net of all fees and expenses, including the Management Fee but excluding any Incentive Fee.

 

24


The Incentive Fee based on income for each quarter is determined as follows:

 

   

No Incentive Fee based on income is payable to the Investment Adviser for any calendar quarter for which there is no Excess Income Amount;

 

   

100% of the Ordinary Income, if any, that exceeds the hurdle amount, but is less than or equal to an amount, referred to as the “Catch-up Amount,” determined as the sum of 2.1875% multiplied by the Company’s NAV at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters is included in the calculation of the Incentive Fee based on income; and

 

   

20% of the Ordinary Income that exceeds the Catch-up Amount is included in the calculation of the Incentive Fee based on income.

The amount of the Incentive Fee based on income that is paid to the Investment Adviser for a particular quarter equals the excess of the Incentive Fee so calculated minus the aggregate Incentive Fees based on income that were paid in respect of the first eleven calendar quarters (or the portion thereof) included in the relevant Trailing Twelve Quarters but not in excess of the Incentive Fee Cap (as described below).

The Incentive Fee based on income that is paid to the Investment Adviser for a particular quarter is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap for any quarter is an amount equal to (a) 20% of the Cumulative Net Return (as defined below) during the relevant Trailing Twelve Quarters minus (b) the aggregate Incentive Fees based on income that were paid in respect of the first eleven calendar quarters (or the portion thereof) included in the relevant Trailing Twelve Quarters.

“Cumulative Net Return” means (x) the Ordinary Income in respect of the relevant Trailing Twelve Quarters minus (y) any Net Capital Loss, if any, in respect of the relevant Trailing Twelve Quarters. If, in any quarter, the Incentive Fee Cap is zero or a negative value, the Company pays no Incentive Fee based on income to the Investment Adviser for such quarter. If, in any quarter, the Incentive Fee Cap for such quarter is a positive value but is less than the Incentive Fee based on income that is payable to the Investment Adviser for such quarter (before giving effect to the Incentive Fee Cap) calculated as described above, the Company pays an Incentive Fee based on income to the Investment Adviser equal to the Incentive Fee Cap for such quarter. If, in any quarter, the Incentive Fee Cap for such quarter is equal to or greater than the Incentive Fee based on income that is payable to the Investment Adviser for such quarter (before giving effect to the Incentive Fee Cap) calculated as described above, the Company pays an Incentive Fee based on income to the Investment Adviser equal to the Incentive Fee calculated as described above for such quarter without regard to the Incentive Fee Cap.

“Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in such period and (ii) aggregate capital gains, whether realized or unrealized, in such period.

ii. Annual Incentive Fee Based on Capital Gains.

The portion of the Incentive Fee based on capital gains is calculated on an annual basis. For each Annual Period, the Company pays the Investment Adviser an amount equal to (A) 20% of the difference, if positive, of the sum of the Company’s aggregate realized capital gains, if any, computed net of the Company’s aggregate realized capital losses, if any, and the Company’s aggregate unrealized capital depreciation, in each case from April 1, 2013 until the end of such Annual Period minus (B) the cumulative amount of Incentive Fees based on capital gains previously paid to the Investment Adviser from April 1, 2013. For the avoidance of doubt, unrealized capital appreciation is excluded from the calculation in clause (A) above.

The Company accrues, but does not pay, a portion of the Incentive Fee based on capital gains with respect to net unrealized appreciation. Under GAAP, the Company is required to accrue an Incentive Fee based on capital gains that includes net realized capital gains and losses and net unrealized capital appreciation and depreciation on investments held at the end of each period. In calculating the accrual for the Incentive Fee based on capital gains, the Company considers the cumulative aggregate unrealized capital appreciation in the calculation, since an Incentive Fee based on capital gains would be payable if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee payable under the Investment Management Agreement. This accrual is calculated using the aggregate cumulative realized capital gains and losses and aggregate cumulative unrealized capital appreciation or depreciation. If such amount is positive at the end of a period, then the Company records a capital gains incentive fee equal to 20% of such amount, minus the aggregate amount of actual Incentive Fees based on capital gains paid in all prior periods. If such amount is negative, then there is no accrual for such period. There can be no assurance that such unrealized capital appreciation will be realized in the future.

For the three and six months ended June 30, 2019, the Company incurred Incentive Fees based on income of $4,144 and $4,637, respectively. As of June 30, 2019, $4,144 remained payable. For the three and six months ended June 30, 2018, the Company incurred Incentive Fees based on income of $4,342 and $9,026, respectively. For the three and six months ended June 30, 2019 and 2018, the Company did not accrue or pay any Incentive Fees based on capital gains.

Administration and Custodian Fees

The Company has entered into an administration agreement with State Street Bank and Trust Company (the “Administrator”) under which the Administrator provides various accounting and administrative services to the Company. The Company pays the Administrator fees for its

 

25


services as it determines to be commercially reasonable in its sole discretion. The Company also reimburses the Administrator for all reasonable expenses. To the extent that the Administrator outsources any of its functions, the Administrator pays any compensation associated with such functions. The Administrator also serves as the Company’s custodian (the “Custodian”).

For the three and six months ended June 30, 2019, the Company incurred expenses for services provided by the Administrator and the Custodian of $235 and $472, respectively. As of June 30, 2019, $157 remained payable. For the three and six months ended June 30, 2018, the Company incurred expenses for services provided by the Administrator and the Custodian of $228 and $455, respectively.

Transfer Agent Fees

Effective May 2, 2016, the Company entered into a transfer agency and services agreement pursuant to which Computershare Trust Company, N.A. serves as the Company’s transfer agent (the “Transfer Agent”), dividend agent and registrar. From the IPO to May 1, 2016, State Street Bank and Trust Company served as the Transfer Agent and dividend agent. Prior to the IPO, GS & Co. was the Transfer Agent. For the three and six months ended June 30, 2019, the Company incurred expenses for services provided by the Transfer Agent of $4 and $7, respectively. As of June 30, 2019, $2 remained payable. For the three and six months ended June 30, 2018, the Company incurred expenses for services provided by the Transfer Agent of $4 and $8, respectively.

Common Stock Repurchase Plans

In February 2016, the Board of Directors authorized the Company to repurchase up to $25,000 of the Company’s common stock if the stock trades below the most recently announced NAV per share (including any updates, corrections or adjustments publicly announced by the Company to any previously announced NAV per share), from March 18, 2016 to March 18, 2017, subject to certain limitations. In February 2017, the Company’s Board of Directors renewed its authorization of the stock repurchase plan to extend the expiration to March 18, 2018, in February 2018, again renewed its authorization of the stock repurchase plan to extend the expiration to March 18, 2019 and, in February 2019, again renewed its authorization of the stock repurchase plan to extend the expiration to March 18, 2020.

In connection with this authorization, the Company entered into a 10b5-1 plan (the “Company 10b5-1 Plan”). The Company 10b5-1 Plan initially took effect on March 18, 2016 (with any purchases to commence after the opening of NYSE trading on March 21, 2016), was subsequently renewed and expired on March 18, 2018. The Company entered into an agreement to renew the Company 10b5-1 Plan on May 14, 2018, which was terminated on June 27, 2018 in connection with the Company’s offering of Convertible Notes. See Notes 6 “Debt”. On June 27, 2018, the Company entered into an agreement to renew the Company 10b5-1 Plan with any purchases pursuant to the agreement to commence on September 25, 2018. The Company 10b5-1 Plan expired on March 18, 2019.

In February 2019, our Board of Directors approved a new common stock repurchase plan (the “New Company 10b5-1 Plan”), which provides for us to repurchase up to $25,000 of shares of our common stock if the stock trades below the most recently announced net asset value per share, subject to limitations. Under the New Company 10b5-1 Plan, no purchases will be made if such purchases would (i) cause the aggregate ownership of our outstanding stock by Group Inc. and GS & Co. to equal or exceed 25.0% (due to the reduction in outstanding shares of stock as a result of purchase) or (ii) cause our Debt/Equity Ratio to exceed the lower of (a) 1.40 or (b) the Maximum Debt/Equity Ratio. In the New Company 10b5-1 Plan, “Debt/Equity Ratio” means the sum of debt on the Consolidated Statements of Assets and Liabilities and the total notional value of the Purchaser’s unfunded commitments divided by 85% of total equity, as of the most recent reported financial statement end date, and “Maximum Debt/Equity Ratio” means the sum of debt on the balance sheet and committed uncalled debt divided by net assets, as of the most recent reported financial statement end date. The New Company 10b5-1 Plan took effect on March 18, 2019, expires on March 18, 2020 and purchases thereunder will be conducted on a programmatic basis in accordance with Rules 10b5-1 and 10b-18 under the Exchange Act and other applicable securities laws.

The Company’s repurchase of its common stock under the New Company 10b5-1 Plan or otherwise may result in the price of the Company’s common stock being higher than the price that otherwise might exist in the open market. For the three and six months ended June 30, 2019 and 2018, the Company did not repurchase any of its common stock pursuant to the Company 10b5-1 Plan, the New Company 10b5-1 Plan or otherwise.

Affiliates

As of June 30, 2019 and December 31, 2018, Group Inc. owned 16.09% and 16.12%, respectively, of the outstanding shares of the Company’s common stock.

 

26


The Company’s investments in affiliates for the six months ended June 30, 2019 were as follows:

 

     

Fair Value as of

December 31,

2018

    

Gross

Additions(3)

    

Gross

Reductions(4)

   

Net Realized
Gain(Loss)

   

Net Change in
Unrealized
Appreciation

(Depreciation)

   

Fair Value as
of June 30,

2019

     Dividend,
Interest,
PIK and
Other
Income
 
Controlled Affiliates                  
Animal Supply Holdings LLC    $      $ 58,008      $     $     $ (33   $ 57,975      $ 79  
Bolttech Mannings, Inc.      23,863        1,083                    (1,965     22,981        1,084  
Senior Credit Fund, LLC(1)      96,456        125,555        (224,882     (673     3,544              3,450  
Total Controlled Affiliates    $ 120,319      $ 184,646      $ (224,882   $ (673   $ 1,546     $ 80,956      $ 4,613  
Non-Controlled Affiliates                  
Goldman Sachs Financial Square Government Fund (2)    $      $ 169,744      $ (169,744   $     $     $      $ 40  
Accuity Delivery Systems, LLC      13,730        25                    692       14,447        527  
CB-HDT Holdings, Inc.      26,854        335                    289       27,478        336  
Collaborative Imaging Holdco, LLC      10,273        8                    409       10,690        463  
Conergy Asia Holdings, Ltd      1,064                                 1,064        53  
Elah Holdings, Inc.      2,234                          

 
    2,234         
Iracore International Holdings, Ltd      7,807                           1,939       9,746        196  
Kawa Solar Holdings Limited      8,066               (4,547           398       3,917         
NTS Communications, Inc.      55,557        417                    (385     55,589        431  
Prairie Provident Resources, Inc.      504                           (258     246         
Total Non-Controlled Affiliates    $ 126,089      $ 170,529      $ (174,291   $     $ 3,084     $ 125,411      $ 2,046  
Total Affiliates    $ 246,408      $ 355,175      $ (399,173   $ (673   $ 4,630     $ 206,367      $ 6,659  

 

(1)  

Together with The Regents of the University of California (“Cal Regents”, and collectively with the Company, the “Members”), the Company previously invested through the Senior Credit Fund. Although the Company owned more than 25% of the voting securities of the Senior Credit Fund, the Company does not believe that it had control over the Senior Credit Fund (other than for purposes of the Investment Company Act). See Note 4 “Investments”.

(2)  

Fund advised by an affiliate of Goldman Sachs.

(3)  

Gross additions may include increases in the cost basis of investments resulting from new portfolio investments, PIK interest or dividends, the accretion of discounts, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category.

(4)  

Gross reductions may include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.

The Company’s investments in affiliates for the year ended December 31, 2018 were as follows:

 

     

Fair Value as of

December 31,

2017

    

Gross

Additions(3)

    

Gross

Reductions(4)

   

Net Realized
Gain(Loss)

    

Net Change in

Unrealized
Appreciation

(Depreciation)

   

Fair Value as of

December 31,

2018

    

Dividend,

Interest,
PIK and
Other

Income

 
Controlled Affiliates                   
Bolttech Mannings, Inc.    $ 20,569      $ 5,648      $     $      $ (2,354   $ 23,863      $ 1,791  
Senior Credit Fund, LLC(1)      92,097        5,658                     (1,299     96,456        10,550  
Total Controlled Affiliates    $ 112,666      $ 11,306      $     $      $ (3,653   $ 120,319      $ 12,341  
Non-Controlled Affiliates                   
Goldman Sachs Financial Square Government Fund(2)    $ 11,539      $ 243,137      $ (254,676   $      $     $      $ 53  
Accuity Delivery Systems, LLC             13,092                     638       13,730        568  
CB-HDT Holdings, Inc.      19,345        2,148                     5,361       26,854        589  
Collaborative Imaging Holdco, LLC             10,077                     196       10,273        703  
Conergy Asia Holdings, Ltd      4,832        664                     (4,432     1,064        68  
Elah Holdings, Inc.             2,234                           2,234         
Iracore International Holdings, Ltd      9,602                            (1,795     7,807        380  
Kawa Solar Holdings Limited      8,918        153        (664     9        (350     8,066        151  
NTS Communications, Inc.      51,538        6,459                     (2,440     55,557        6,453  
Prairie Provident Resources, Inc.      1,233                            (729     504         
Total Non-Controlled Affiliates    $ 107,007      $ 277,964      $ (255,340   $ 9      $ (3,551   $ 126,089      $ 8,965  
Total Affiliates    $ 219,673      $ 289,270      $ (255,340   $ 9      $ (7,204   $ 246,408      $ 21,306  

 

(1)  

Together with Cal Regents, the Company previously invested through the Senior Credit Fund. Although the Company owns more than 25% of the voting securities of the Senior Credit Fund, the Company does not believe that it had control over the Senior Credit Fund (other than for purposes of the Investment Company Act). See Note 4 “Investments”.

 

27


(2)  

Fund advised by an affiliate of Goldman Sachs.

(3)   

Gross additions may include increases in the cost basis of investments resulting from new portfolio investments, PIK interest or dividends, the accretion of discounts, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category.

(4)   

Gross reductions may include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.

Due to Affiliates

The Investment Adviser pays certain general and administrative expenses, including legal expenses, on behalf of the Company in the ordinary course of business. As of June 30, 2019 and December 31, 2018, there were $440 and $282, respectively, included within Accrued expenses and other liabilities paid by the Investment Adviser and its affiliates on behalf of the Company.

Co-investment Activity

In certain circumstances, negotiated co-investments by the Company and other funds managed by the Investment Adviser may be made only pursuant to an order from the SEC permitting the Company to do so. On January 4, 2017, the SEC granted exemptive relief (“Exemptive Relief”) that permits the Company to co-invest with Goldman Sachs Private Middle Market Credit LLC (“GS PMMC”), Goldman Sachs Middle Market Lending Corp. (“GS MMLC”), Goldman Sachs Private Middle Market Credit II LLC (“GS PMMC II”) and certain other funds that may be managed by GSAM, including the GSAM Credit Alternatives Team, after the date of the exemptive order, subject to certain conditions including that co-investments are made in a manner consistent with the Company’s investment objectives, positions, policies, strategies and restrictions, as well as regulatory requirements and pursuant to the conditions required by the Exemptive Relief, and are allocated fairly among participants. The GSAM Credit Alternatives Team is comprised of investment professionals dedicated to the Company’s investment strategy and other funds that share a similar investment strategy with the Company, who are responsible for identifying investment opportunities, conducting research and due diligence on prospective investments, negotiating and structuring the Company’s investments and monitoring and servicing the Company’s investments, together with investment professionals who are primarily focused on investment strategies in syndicated, liquid credit. Under the terms of the Exemptive Relief, a “required majority” (as defined in Section 57(o) of the Investment Company Act) of the Company’s independent directors must make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the proposed transaction are reasonable and fair to the Company and the Company’s stockholders and do not involve overreaching in respect of the Company or its stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of the Company’s stockholders and is consistent with the then-current investment objectives and strategies of the Company. As a result of the Exemptive Relief, there could be significant overlap in the Company’s investment portfolio and the investment portfolios of GS PMMC, GS MMLC, GS PMMC II and/or other funds established by the GSAM Credit Alternatives Team that could avail themselves of the Exemptive Relief.

 

4.

INVESTMENTS

As of the dates indicated, the Company’s investments consisted of the following:

 

     June 30, 2019      December 31, 2018  
Investment Type    Cost      Fair Value      Cost      Fair Value  
1st Lien/Senior Secured Debt    $ 1,052,748      $ 1,040,348      $ 738,626      $ 729,604  
1st Lien/Last-Out Unitranche      108,551        101,214        114,004        106,879  
2nd Lien/Senior Secured Debt      295,341        283,418        411,551        391,931  
Unsecured Debt      7,047        7,047        6,711        6,697  
Preferred Stock      41,851        47,758        16,851        21,534  
Common Stock      67,885        53,925        37,815        22,343  
Investment Funds & Vehicles(1)                    100,000        96,456  

Total Investments

   $ 1,573,423      $ 1,533,710      $ 1,425,558      $ 1,375,444  

 

(1)   

Includes equity investment in the Senior Credit Fund as of December 31, 2018.

 

28


As of the dates indicated, the industry composition of the Company’s portfolio at fair value and net assets was as follows:

 

     June 30, 2019     December 31, 2018  
Industry    Fair Value     Net Assets     Fair Value     Net Assets  
Software      9.2     20.2     11.5     22.3
Health Care Providers & Services      8.7       19.2       8.0       15.5  
Internet Software & Services      6.7       14.9       5.2       10.0  
Media      6.0       13.2       5.5       10.7  
IT Services      5.3       11.8       4.8       9.4  
Diversified Telecommunication Services      5.0       11.1       5.6       10.9  
Health Care Technology      4.9       10.9       1.6       3.1  
Health Care Equipment & Supplies      4.9       10.9       4.3       8.2  
Commercial Services & Supplies      4.2       9.3       2.0       3.8  
Chemicals      4.0       8.9       4.9       9.5  
Distributors      3.8       8.4       5.8       11.2  
Electronic Equipment, Instruments & Components      3.6       8.0       4.0       7.6  
Real Estate Management & Development      3.4       7.5       0.9       1.8  
Air Freight & Logistics      3.1       6.8       3.0       5.8  
Aerospace & Defense      2.9       6.4       3.2       6.2  
Diversified Financial Services      2.7       5.9       3.1       6.1  
Professional Services      2.6       5.8       3.0       5.7  
Road & Rail      2.5       5.5       2.2       4.3  
Machinery      1.9       4.3       2.2       4.2  
Diversified Consumer Services      1.9       4.1              
Auto Components      1.7       3.7       2.0       3.8  
Internet Catalog & Retail      1.7       3.7       1.5       3.0  
Household Products      1.6       3.6       1.8       3.6  
Transportation Infrastructure      1.4       3.1              
Life Sciences Tools & Services      0.9       2.0       0.4       0.8  
Textiles, Apparel & Luxury Goods      0.9       2.0              
Leisure Equipment & Products      0.7       1.6       0.8       1.5  
Energy Equipment & Services      0.6       1.4       0.6       1.1  
Food Products      0.6       1.3       1.1       2.2  
Beverages      0.5       1.2       0.6       1.2  
Communications Equipment      0.5       1.1              
Capital Markets      0.5       1.0       0.2       0.3  
Hotels, Restaurants & Leisure      0.4       0.9              
Containers & Packaging      0.4       0.8       0.4       0.9  
Construction & Engineering      0.3       0.7       0.7       1.3  
Oil, Gas & Consumable Fuels                        0.1  
Oil & Gas                         
Investment Funds & Vehicles                  7.0       13.6  
Specialty Retail                  2.1       4.1  

Total

     100.0     221.2     100.0     193.8

As of the dates indicated, the geographic composition of the Company’s portfolio at fair value was as follows:

 

Geographic    June 30, 2019     December 31, 2018  
United States      95.5     97.9
Canada      2.8        
Ireland      1.3       1.4  
Germany      0.3       0.6  
Singapore      0.1       0.1  

Total

     100.0     100.0

 

29


Senior Credit Fund, LLC

The Senior Credit Fund, an unconsolidated Delaware limited liability company, was formed on May 7, 2014 and commenced operations on October 1, 2014. The Company invested together with Cal Regents through the Senior Credit Fund. The Senior Credit Fund’s principal purpose was to make investments, either directly or indirectly through its wholly owned subsidiary, Senior Credit Fund SPV I, LLC (“SPV I”), primarily in senior secured loans to middle-market companies. Each of the Company and Cal Regents were responsible for sourcing the Senior Credit Fund’s investments. Each of the Company and Cal Regents had a 50% economic ownership in the Senior Credit Fund and each had subscribed to and has fully contributed $100,000. On December 19, 2016, SPV I entered into an amended and restated credit facility (as amended, the “Asset Based Facility”), which consisted of a revolving credit facility (the “SPV I Revolving Credit Facility”), a term loan facility (the “SPV I Term Loan Facility”) and a Class B loan facility (the “SPV I Class B Facility”), with various lenders. For the Asset Based Facility, Natixis, New York Branch (“Natixis”) served as the facility agent, and State Street Bank and Trust Company served as the collateral agent. On February 27, 2019, the board of managers of the Senior Credit Fund authorized the liquidation and subsequent dissolution of the Senior Credit Fund and the pro-rata distribution of its assets and liabilities to the members of the Senior Credit Fund. On May 8, 2019, the Company and Cal Regents each contributed $125,555 to the Senior Credit Fund, which was used by the Senior Credit Fund to repay in full all outstanding indebtedness, including all accrued and unpaid interest and fees, under the Asset Based Facility and to fund certain other related expenses that the Senior Credit Fund expects to incur in connection with its dissolution. The Asset Based Facility was then terminated and all liens securing the collateral under the Asset Based Facility were released and terminated.

Following the repayment and termination of the aforementioned Asset Based Facility, the Senior Credit Fund distributed to its pro rata share of the assets of the Senior Credit Fund. The pro rata portion of the assets received by the Company included senior secured loans of $215,103 and $210,088 at amortized cost and at fair value, respectively and cash of $8,250. In addition the Company assumed the obligation to fund outstanding unfunded commitments of the Senior Credit Fund that totaled $5,664, representing its pro rata portion of all unfunded commitments of the Senior Credit Fund at such time. The pro rata portion of the assets received by the Company have been included in the Company’s consolidated financial statements and notes thereto.

As of June 30, 2019, the Senior Credit Fund consisted of cash and cash equivalents, and other liabilities that represents an amount due to its members of approximately $3,058. The Company included $1,529 within Other Assets on the Consolidated Statement of Asset and Liabilities in respect of its pro rata portion of the amount due from the Senior Credit Fund to its members. After the satisfaction of all remaining liabilities and the distribution of any remaining assets, including the Company’s pro rata share of any interest payments from certain portfolio investments of the Senior Credit Fund, the Senior Credit Fund will be terminated.

As of December 31, 2018, the Senior Credit Fund had total investments at fair value of $451,801 and had an investment in a money market fund managed by an affiliate of Group Inc. with a total fair value of $5,292. As of December 31, 2018, the Senior Credit Fund had one portfolio company on non-accrual status. In addition, as of December 31, 2018, the Senior Credit Fund had ten portfolio companies with unfunded commitments totaling $17,114.

 

30


Senior Credit Fund Portfolio as of December 31, 2018

 

 

Portfolio Company   Industry    Interest Rate (+)   

Reference Rate and

Spread (+)

  Maturity     Par Amount     Cost     Fair Value  
1st Lien/Senior Secured Debt

 

3SI Security Systems, Inc.   Commercial Services & Supplies    8.54%    L + 5.75%; 1.00% Floor     06/16/2023     $ 29,849     $ 29,533     $ 29,550  
A Place For Mom, Inc.   Diversified Consumer Services    6.27%    L + 3.75%; 1.00% Floor     08/10/2024       17,865       17,849       17,865  
AMCP Clean Acquisition Company, LLC   Commercial Services & Supplies    7.05%    L + 4.25%     06/16/2025       8,827       8,785       8,705  
AMCP Clean Acquisition Company, LLC(1)   Commercial Services & Supplies    6.93%    L + 4.25%     06/16/2025       2,129       826       804  
Ansira Partners, Inc.   Media    8.27%    L + 5.75%; 1.00% Floor     12/20/2022       9,249       9,182       9,203  
Ansira Partners, Inc.(1)   Media    8.27%    L + 5.75%; 1.00% Floor     12/20/2022       566       136       138  
ATX Networks Corp.   Communications Equipment    9.80%    L + 7.00% (Incl. 1.00% PIK); 1.00% Floor     06/11/2021       14,976       14,903       14,078  
ATX Networks Corp.   Communications Equipment    9.80%    L + 7.00% (Incl. 1.00% PIK); 1.00% Floor     06/11/2021       952       936       895  
Badger Sportswear, Inc.   Textiles, Apparel & Luxury Goods    7.02%    L + 4.50%; 1.00% Floor     09/11/2023       14,660       14,555       14,367  
Barbri, Inc.   Media    6.60%    L + 4.25%; 1.00% Floor     12/01/2023       12,486       12,434       12,174  
CST Buyer Company   Diversified Consumer Services    7.52%    L + 5.00%; 1.00% Floor     03/01/2023       18,671       18,290       18,438  
CST Buyer Company(1) (2)   Diversified Consumer Services       L + 5.00%; 1.00% Floor     03/01/2023       1,800       (35     (22
DBRS Limited   Capital Markets    7.96%    L + 5.25%; 1.00% Floor     03/04/2022       11,550       11,490       11,377  
DiscoverOrg, LLC(3)   Software    7.03%    L + 4.50%; 1.00% Floor     08/25/2023       7,900       7,868       7,861  
Drilling Info Holdings, Inc.   Oil & Gas    6.77%    L + 4.25%     07/30/2025       17,001       16,920       16,895  
Drilling Info Holdings,
Inc.(1) (2)
  Oil & Gas       L + 4.25%     07/30/2025       1,460       (7     (9
FWR Holding Corporation   Hotels, Restaurants & Leisure    8.26%    L + 5.75%; 1.00% Floor     08/21/2023       8,989       8,806       8,809  
FWR Holding Corporation   Hotels, Restaurants & Leisure    8.26%    L + 5.75%; 1.00% Floor     08/21/2023       1,791       1,756       1,755  
FWR Holding Corporation   Hotels, Restaurants & Leisure    8.26%    L + 5.75%; 1.00% Floor     08/21/2023       1,135       1,113       1,113  
FWR Holding Corporation(1)   Hotels, Restaurants & Leisure    10.25%    P + 4.75%; 2.00% Floor     08/21/2023       1,175       417       417  
GH Holding Company   Real Estate Management & Development    7.02%    L + 4.50%     02/28/2023       14,888       14,824       14,813  
GI Revelation Acquisition LLC   Internet Software & Services    7.52%    L + 5.00%     04/16/2025       9,459       9,415       9,281  
GK Holdings, Inc.   IT Services    8.80%    L + 6.00%; 1.00% Floor     01/20/2021       17,280       17,232       15,725  
GlobalTranz Enterprises, Inc.   Road & Rail    6.77%    L + 4.25%     06/29/2025       21,945       21,840       21,835  
GlobalTranz Enterprises, Inc.(1) (2)   Road & Rail       L + 4.25%     06/29/2025       4,000             (20
Halo Branded Solutions, Inc.   Commercial Services & Supplies    7.02%    L + 4.50%; 1.00% Floor     06/30/2025       10,503       10,403       10,188  
Halo Branded Solutions, Inc.   Commercial Services & Supplies    7.02%    L + 4.50%; 1.00% Floor     06/30/2025       4,423       4,380       4,290  
HC Group Holdings III, Inc.   Health Care Providers & Services    6.27%    L + 3.75%     04/07/2022       8,708       8,684       8,599  
Hygiena Borrower LLC(3)   Life Sciences Tools & Services    6.80%    L + 4.00%; 1.00% Floor     08/26/2022       17,762       17,623       17,406  
Hygiena Borrower LLC(1) (2) (3)   Life Sciences Tools & Services       L + 4.00%; 1.00% Floor     08/26/2022       288       (2     (6
Hygiena Borrower LLC(1) (2) (3)   Life Sciences Tools & Services       L + 4.00%; 1.00% Floor     08/26/2022       1,867       (20     (37

 

31


Portfolio Company   Industry    Interest Rate (+)   

Reference Rate and

Spread (+)

  Maturity     Par Amount     Cost     Fair Value  
Jill Acquisition LLC   Textiles, Apparel & Luxury Goods    7.53%    L + 5.00%; 1.00% Floor     05/08/2022     $ 13,839     $ 13,774     $ 13,620  
Lattice Semiconductor Corporation   Semiconductors & Semiconductor Equipment    6.63%    L + 4.25%; 1.00% Floor     03/10/2021       9,212       9,122       9,212  
Output Services Group, Inc.   Diversified Consumer Services    6.77%    L + 4.25%; 1.00% Floor     03/27/2024       6,978       6,951       6,751  
Output Services Group,
Inc.(1) (2)
  Diversified Consumer Services       L + 4.25%; 1.00% Floor     03/27/2024       1,026             (33
Pharmalogic Holdings Corp.   Health Care Equipment & Supplies    6.52%    L + 4.00%     06/11/2023       6,542       6,528       6,526  
Pharmalogic Holdings Corp.   Health Care Equipment & Supplies    6.52%    L + 4.00%     06/11/2023       1,878       1,874       1,874  
Pharmalogic Holdings
Corp.(1) (2)
  Health Care Equipment & Supplies       L + 4.00%     06/11/2023       3,537       (8     (9
Professional Physical
Therapy(4)
  Health Care Providers & Services       L + 7.50% PIK; 1.00% Floor     12/16/2022       11,265       10,283       9,350  
Regulatory DataCorp, Inc.   Diversified Financial Services    7.02%    L + 4.50%; 1.00% Floor     09/21/2022       4,962       4,962       4,863  
SciQuest, Inc.   Internet Software & Services    6.53%    L + 4.00%; 1.00% Floor     12/28/2024       19,850       19,763       19,453  
SMS Systems Maintenance Services, Inc.   IT Services    7.52%    L + 5.00%; 1.00% Floor     10/30/2023       14,700       14,644       10,924  
Stackpath, LLC   Internet Software & Services    7.59%    L + 5.00%; 1.00% Floor     02/03/2023       16,703       16,580       16,034  
Tronair Parent Inc.   Air Freight & Logistics    7.56%    L + 4.75%; 1.00% Floor     09/08/2023       13,685       13,589       13,138  
U.S. Acute Care Solutions, LLC   Health Care Providers & Services    7.52%    L + 5.00%; 1.00% Floor     05/14/2021       12,740       12,665       12,676  
VRC Companies, LLC(3)   Commercial Services & Supplies    9.02%    L + 6.50%; 1.00% Floor     03/31/2023       27,361       26,966       27,087  
VRC Companies, LLC(1) (3)   Commercial Services & Supplies    9.45%    L + 6.50%; 1.00% Floor     03/31/2022       1,412       699       706  
             

 

 

   

 

 

 

Total 1st Lien/Senior Secured Debt

              438,528       428,659  
             

 

 

   

 

 

 
1st Lien/Last-Out Unitranche (5)

 

ASC Acquisition Holdings, LLC(3)   Distributors    10.03%    L + 7.50%; 1.00% Floor     12/15/2021       8,063       8,010       7,861  
             

 

 

   

 

 

 

Total 1st Lien/Last-Out Unitranche

              8,010       7,861  
             

 

 

   

 

 

 
2nd Lien/Senior Secured Debt

 

DiscoverOrg, LLC(3)   Software    11.03%    L + 8.50%; 1.00% Floor     02/23/2024       10,500       10,370       10,421  
GK Holdings, Inc.   IT Services    13.05%    L + 10.25%; 1.00% Floor     01/20/2022       6,000       5,935       4,860  
             

 

 

   

 

 

 

Total 2nd Lien/Senior Secured Debt

              16,305       15,281  
             

 

 

   

 

 

 

Total Corporate Debt

              462,843       451,801  
             

 

 

   

 

 

 
      Yield     Shares     Cost     Fair Value  
Investments in Affiliated Money Market Fund

 

Goldman Sachs Financial Square Government Fund – Institutional Shares^^^    2.34%(6)

 

    5,292,068     $ 5,292     $ 5,292  
             

 

 

   

 

 

 

Total Investments in Affiliated Money Market Fund

              5,292       5,292  
             

 

 

   

 

 

 

TOTAL INVESTMENTS

 

  $ 468,135     $ 457,093  
             

 

 

   

 

 

 

 

^^^   

While representing less than 5% of the portfolio company’s outstanding voting securities, the portfolio company is otherwise deemed to be an “affiliated person” of the Company under the Investment Company Act of 1940.

(+)   

The terms in the Schedule above disclose the actual interest rate for partially or fully funded debt in effect as of the reporting date. Variable rate loans bear interest at a rate that may be determined by reference to either LIBOR (“L”) or alternate base rate (commonly based on the Prime Rate (“P”)), at the borrower’s option, which reset periodically based on the terms of the credit agreement. L loans are typically indexed to 12 month, 6 month, 3 month, 2 month, 1 month or 1 week L rates. As of December 31, 2018, rates for the 12 month, 6 month, 3 month, 2 month, 1 month and 1 week L are 3.01%, 2.88%, 2.81%, 2.61%, 2.50% and 2.41%, respectively. As of December 31, 2018, P was 5.50%. For investments with multiple reference rates or alternate base rates, the interest rate shown is the weighted average interest rate in effect at December 31, 2018.

(1)   

Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion. The unfunded loan commitment may be subject to a commitment termination date that may expire prior to the maturity date stated.

(2)   

The negative cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan. The negative fair value is the result of the capitalized discount on the loan.

(3)   

The Company also holds a portion of senior secured debt in this portfolio company.

(4)   

The investment is on non-accrual status as of December 31, 2018.

(5)   

In exchange for the greater risk of loss, the “last-out” portion of the Company’s unitranche loan investment generally earns a higher interest rate than the “first-out” portions. The “first-out” portion of the loan would generally receive priority with respect to payment of principal, interest and any other amounts due thereunder over the “last-out” portion that the Company would continue to hold.

(6)   

The rate shown is the annualized seven-day yield as of December 31, 2018.

PIK – Payment-In-Kind

 

32


Below is selected balance sheet information for the Senior Credit Fund as of December 31, 2018:

 

     As of  
     December 31, 2018  
Selected Balance Sheet Information   
Total investments, at fair value    $ 457,093  
Cash and other assets      42,847  
Total assets    $ 499,940  
Debt (1)    $ 298,339  
Other liabilities      8,689  
Total liabilities    $ 307,028  
Members’ equity      192,912  
Total liabilities and Members’ equity    $ 499,940  

 

(1)   

Net of deferred financing costs for the SPV I Term Loan Facility, which were in the amount of $2,161 as of December 31, 2018.

Below is selected statements of operations information for the three and six months ended June 30, 2019 and 2018:

 

     For the
Three Months Ended
June 30,
     For the
Six Months Ended
June 30,
 
     2019*     2018      2019*      2018  
Selected Statements of Operations Information:           
Total investment income    $ 3,608     $ 8,839      $ 12,804      $ 19,170  
Expenses:           
Interest and other debt expenses    $ 6,564     $ 3,874      $ 10,566      $ 7,250  
Professional fees      251       298        449        412  
Administration and custodian fees      49       98        147        195  
Other expenses      12       9        19        29  
Total expenses    $ 6,876     $ 4,279      $ 11,181      $ 7,886  
Total Net Income    $ (3,268   $ 4,560      $ 1,623      $ 11,284  

 

*  

Senior Credit Fund dissolved effective May 8, 2019.

 

5.

FAIR VALUE MEASUREMENT

The fair value of a financial instrument is the amount that would be received to sell an asset or would be paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price).

The fair value hierarchy under ASC 820 prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The levels used for classifying investments are not necessarily an indication of the risk associated with investing in these securities. The three levels of the fair value hierarchy are as follows:

Basis of Fair Value Measurement

Level 1 – Inputs to the valuation methodology are quoted prices available in active markets for identical instruments as of the reporting date. The types of financial instruments included in Level 1 include unrestricted securities, including equities and derivatives, listed in active markets.

Level 2 – Inputs to the valuation methodology are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date. The types of financial instruments in this category include less liquid and restricted securities listed in active markets, securities traded in other than active markets, government and agency securities and certain over-the-counter derivatives where the fair value is based on observable inputs.

Level 3 – Inputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are included in this category include investments in privately held entities and certain over-the-counter derivatives where the fair value is based on unobservable inputs.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Note 2 “Significant Accounting Policies” should be read in conjunction with the information outlined below.

 

33


The table below presents the valuation techniques and the nature of significant inputs generally used in determining the fair value of Level 2 Instruments.

 

Level 2 Instruments    Valuation Techniques and Significant Inputs
Equity and Fixed Income   

The types of instruments that trade in markets that are not considered to be active but are valued based on quoted market prices, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency include commercial paper, most government agency obligations, most corporate debt securities, certain mortgage-backed securities, certain bank loans, less liquid publicly listed equities, certain state and municipal obligations, certain money market instruments and certain loan commitments.

 

Valuations of Level 2 Equity and Fixed Income instruments can be verified to quoted prices, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. Consideration is given to the nature of the quotations (e.g. indicative or firm) and the relationship of recent market activity to the prices provided from alternative pricing sources.

Derivative Contracts   

OTC derivatives (both centrally cleared and bilateral) are valued using market transactions and other market evidence whenever possible, including market-based inputs to models, calibration to market-clearing transactions, broker or dealer quotations, or other alternative pricing sources with reasonable levels of price transparency. Where models are used, the selection of a particular model to value an OTC derivative depends upon