Carlyle Secured Lending - 10-Q quarterly report FY

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended June 30, 2021


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

For the transition period to

Commission File No. 814-00995

TCG BDC, INC.

(Exact name of Registrant as specified in its charter)


Maryland						80-0789789
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

One Vanderbilt Avenue, Suite 3400, New York, NY 10017						(212) 813-4900
(Address of principal executive office) (Zip Code)						(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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, $0.01 par value	CGBD	The Nasdaq Global Select Market

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

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

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

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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

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

The number of shares of the registrant’s common stock, $0.01 par value per share, outstanding at August 2, 2021 was 54,010,195.

TCG BDC, INC.

INDEX



Part I.	Financial Information
Item 1.	Financial Statements
	Consolidated Statements of Assets and Liabilities as of June 3 0 , 2021 (unaudited) and December 31, 2020	3
	Consolidated Statements of Operations for the three and six month periods ended June 30, 202 1 and 20 20 (unaudited)	4
	Consolidated Statements of Changes in Net Assets for the six month periods ended June 30, 202 1 and 20 20 (unaudited)	5
	Consolidated Statements of Cash Flows for the six month periods ended June 30, 202 1 and 20 20 (unaudited)	6
	Consolidated Schedules of Investments as of June 3 0 , 2021 (unaudited) and December 31, 2020	7
	Notes to Consolidated Financial Statements (unaudited)	33
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	77
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	111
Item 4.	Controls and Procedures	112
Part II.	Other Information
Item 1.	Legal Proceedings	113
Item 1A.	Risk Factors	113
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	113
Item 3.	Defaults Upon Senior Securities	113
Item 4.	Mine Safety Disclosures	114
Item 5.	Other Information	114
Item 6.	Exhibits	114
	Signatures	115

TCG BDC, INC.

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(dollar amounts in thousands, except per share data)


	June 30, 2021		December 31, 2020
ASSETS	(unaudited)
Investments, at fair value
Investments—non-controlled/non-affiliated, at fair value (amortized cost of $1,609,860 and $1,574,182, respectively)	$	1,579,256	$	1,509,271
Investments—non-controlled/affiliated, at fair value (amortized cost of $38,417 and $37,571, respectively)	28,562		26,180
Investments—controlled/affiliated, at fair value (amortized cost of $288,051 and $311,213, respectively)	264,493		290,298
Total investments, at fair value (amortized cost of $1,936,328 and $1,922,966, respectively)	1,872,311		1,825,749
Cash, cash equivalents and restricted cash	59,404		68,419

Receivable for investment sold/repaid	5,769		4,313
Deferred financing costs	3,386		3,633
Interest receivable from non-controlled/non-affiliated investments	11,388		12,634
Interest receivable from non-controlled/affiliated investments	578		569
Interest and dividend receivable from controlled/affiliated investments	7,961		6,480
Prepaid expenses and other assets	1,369		816
Total assets	$	1,962,166	$	1,922,613
LIABILITIES
Secured borrowings (Note 7)	$	365,060	$	347,949
2015-1R Notes payable, net of unamortized debt issuance costs of $2,541 and $2,664, respectively (Note 8)	446,659		446,536
Senior Notes, net of unamortized debt issuance costs of $485 and $562, respectively (Note 8)	189,515		189,438
Payable for investments purchased	875		809

Interest and credit facility fees payable (Notes 7 and 8)	2,463		2,439
Dividend payable (Note 10)	19,502		19,892
Base management and incentive fees payable (Note 4)	11,391		11,549
Administrative service fees payable (Note 4)	373		85
Other accrued expenses and liabilities	1,497		2,553
Total liabilities	1,037,335		1,021,250
Commitments and contingencies (Notes 9 and 12)
EQUITY
NET ASSETS
Cumulative convertible preferred stock, $0.01 par value; 2,000,000 and 2,000,000 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively	50,000		50,000
Common stock, $0.01 par value; 198,000,000 shares authorized; 54,210,315 and 55,320,309 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively	542		553
Paid-in capital in excess of par value	1,067,720		1,081,436
Offering costs	(1,633)		(1,633)
Total distributable earnings (loss)	(191,798)		(228,993)
Total net assets	$	924,831	$	901,363
NET ASSETS PER COMMON SHARE	$	16.14	$	15.39

The accompanying notes are an integral part of these consolidated financial statements.

TCG BDC, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollar amounts in thousands, except per share data)

(unaudited)


	For the three month periods ended				For the six month periods ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
Investment income:
From non-controlled/non-affiliated investments:
Interest income	$	32,661	$	36,036	$	64,417	$	77,501
Other income	2,401		3,547		3,868		5,891
Total investment income from non-controlled/non-affiliated investments	35,062		39,583		68,285		83,392
From non-controlled/affiliated investments:
Interest income	45		—		83		—
Other income	3		—		6		—
Total investment income from non-controlled/affiliated investments	48		—		89		—
From controlled/affiliated investments:
Interest income	55		192		111		3,428
Dividend income	7,488		5,500		15,016		9,000
Other income	3		—		3		—
Total investment income from controlled/affiliated investments	7,546		5,692		15,130		12,428
Total investment income	42,656		45,275		83,504		95,820
Expenses:
Base management fees (Note 4)	6,991		7,065		13,791		14,451
Incentive fees (Note 4)	4,420		4,667		8,677		9,753
Professional fees	917		678		1,608		1,345
Administrative service fees (Note 4)	375		266		657		372
Interest expense (Notes 7 and 8)	7,055		9,443		14,030		21,622
Credit facility fees (Note 7)	505		788		1,024		1,378
Directors’ fees and expenses	150		121		266		217
Other general and administrative	467		455		872		866
Total expenses	20,880		23,483		40,925		50,004
Net investment income (loss) before taxes	21,776		21,792		42,579		45,816
Excise tax expense	139		100		263		152
Net investment income (loss)	21,637		21,692		42,316		45,664
Net realized gain (loss) and net change in unrealized appreciation (depreciation):
Net realized gain (loss) on investments:
Non-controlled/non-affiliated investments	1,944		(47,784)		3,616		(49,481)
Non-controlled/affiliated investments	1		—		2		—
Currency gains (losses) on non-investment assets and liabilities	(56)		635		(138)		485
Net change in unrealized appreciation (depreciation) on investments:
Non-controlled/non-affiliated investments	16,338		64,082		34,254		(52,960)
Non-controlled/affiliated investments	890		—		1,536		—
Controlled/affiliated investments	2,060		18,174		(2,643)		(10,347)
Net change in unrealized currency gains (losses) on non-investment assets and liabilities	54		(641)		(171)		1,697
Net realized and unrealized gain (loss) on investments and non-investment assets and liabilities	21,231		34,466		36,456		(110,606)
Net increase (decrease) in net assets resulting from operations	42,868		56,158		78,772		(64,942)
Preferred stock dividend	875		554		1,750		554
Net increase (decrease) in net assets resulting from operations attributable to Common Stockholders	$	41,993	$	55,604	$	77,022	$	(65,496)
Basic and diluted earnings per common share (Note 10)
Basic	$	0.77	$	0.99	$	1.41	$	(1.15)
Diluted	$	0.72	$	0.94	$	1.31	$	(1.15)
Weighted-average shares of common stock outstanding (Note 10)
Basic	54,537,840		56,308,616		54,787,041		56,710,405
Diluted	59,805,142		59,547,482		60,054,343		56,710,405

The accompanying notes are an integral part of these consolidated financial statements.

TCG BDC, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

(dollar amounts in thousands)

(unaudited)


	For the six month periods ended
	June 30, 2021		June 30, 2020
Net increase (decrease) in net assets resulting from operations:
Net investment income (loss)	$	42,316	$	45,664
Net realized gain (loss)	3,480		(48,996)
Net change in unrealized appreciation (depreciation) on investments	33,147		(63,307)
Net change in unrealized currency gains (losses) on non-investment assets and liabilities	(171)		1,697
Net increase (decrease) in net assets resulting from operations	78,772		(64,942)
Capital transactions:

Preferred stock issued	—		50,000

Repurchase of common stock	(13,727)		(16,003)
Dividends declared on preferred and common stock (Note 10)	(41,577)		(42,222)
Net increase (decrease) in net assets resulting from capital share transactions	(55,304)		(8,225)
Net increase (decrease) in net assets	23,468		(73,167)
Net Assets at beginning of period	901,363		956,471
Net Assets at end of period	$	924,831	$	883,304

The accompanying notes are an integral part of these consolidated financial statements.

TCG BDC, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollar amounts in thousands)

(unaudited)


	For the six month periods ended
	June 30, 2021		June 30, 2020
Cash flows from operating activities:
Net increase (decrease) in net assets resulting from operations	$	78,772	$	(64,942)
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Amortization of deferred financing costs	583		718
Net accretion of discount on investments	(4,029)		(4,059)
Paid-in-kind interest	(4,292)		(1,988)
Net realized (gain) loss on investments	(3,618)		49,481
Net realized currency (gain) loss on non-investment assets and liabilities	138		(485)
Net change in unrealized (appreciation) depreciation on investments	(33,147)		63,307
Net change in unrealized currency (gains) losses on non-investment assets and liabilities	171		(1,697)
Cost of investments purchased and change in payable for investments purchased	(357,577)		(391,624)
Proceeds from sales and repayments of investments and change in receivable for investments sold/repaid	354,734		507,316
Changes in operating assets:
Interest receivable	1,237		(1,411)
Dividend receivable	(1,481)		1,256
Prepaid expenses and other assets	(553)		(218)
Changes in operating liabilities:

Interest and credit facility fees payable	24		(2,232)
Base management and incentive fees payable	(158)		(1,664)
Administrative service fees payable	288		52
Other accrued expenses and liabilities	(1,056)		465
Net cash provided by (used in) operating activities	30,036		152,275
Cash flows from financing activities:
Proceeds from issuance of preferred stock	—		50,000
Repurchase of common stock	(13,727)		(16,003)
Borrowings on SPV Credit Facility and Credit Facility	179,479		257,292
Repayments of SPV Credit Facility and Credit Facility	(162,500)		(397,484)




Debt issuance costs paid	(336)		(312)
Dividends paid in cash	(41,967)		(52,603)
Net cash provided by (used in) financing activities	(39,051)		(159,110)
Net increase (decrease) in cash, cash equivalents and restricted cash	(9,015)		(6,835)
Cash, cash equivalents, and restricted cash, beginning of period	68,419		36,751
Cash, cash equivalents, and restricted cash, end of period	$	59,404	$	29,916
Supplemental disclosures:
Interest paid during the period	$	14,174	$	23,347
Taxes, including excise tax, paid during the period	$	626	$	391
Dividends declared on preferred stock and common stock during the period	$	41,577	$	42,222

The accompanying notes are an integral part of these consolidated financial statements.

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of June 30, 2021

(dollar amounts in thousands)

(unaudited)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value (5)		% of Net Assets

First Lien Debt (64.7% of fair value)
Advanced Web Technologies Holding Company	^*	(2)(3)(13)	Containers, Packaging & Glass	L + 5.75%	6.75%	12/17/2020	12/17/2026	$	6,045	$	5,874	$	6,139	0.66	%
Airnov, Inc.	^*	(2)(3)(13)	Containers, Packaging & Glass	L + 5.25%	6.25%	12/20/2019	12/19/2025	6,790		6,701		6,790		0.73
Allied Universal Holdco LLC	^	(2)(3)	Business Services	L + 4.25%	4.40%	2/17/2021	7/10/2026	500		503		501		0.05
Alpha Packaging Holdings, Inc.	^*	(2)(3)	Containers, Packaging & Glass	L + 6.00%	7.00%	6/26/2015	5/12/2022	2,697		2,697		2,697		0.29
Alpine SG, LLC	*	(2)(3)	High Tech Industries	L + 5.75%	6.75%	2/2/2018	11/16/2022	10,890		10,849		10,779		1.17
Alpine SG, LLC	^	(2)(3)	High Tech Industries	L + 8.50%	9.50%	7/24/2020	11/16/2022	1,618		1,588		1,618		0.17
Alpine SG, LLC	^*	(2)(3)	High Tech Industries	L + 6.50%	7.50%	11/2/2020	11/16/2022	13,796		13,502		13,763		1.49
American Physician Partners, LLC	^*	(2)(3)(13)	Healthcare & Pharmaceuticals	L + 6.75%, 1.50% PIK	9.25%	1/7/2019	12/21/2021	28,253		28,189		28,018		3.03
AMS Group HoldCo, LLC	^*	(2)(3)(13)	Transportation: Cargo	L + 6.00%	7.00%	9/29/2017	9/29/2023	20,810		20,615		20,810		2.25
Analogic Corporation	^*	(2)(3)(13)	Capital Equipment	L + 5.25%	6.25%	6/22/2018	6/22/2024	2,350		2,324		2,327		0.25
Applied Technical Services, LLC	^	(2)(3)(13)	Business Services	L + 5.75%	6.75%	12/29/2020	12/29/2026	393		381		383		0.05
Appriss Health, LLC	^	(2)(3)(13)	Healthcare & Pharmaceuticals	L + 7.25%	8.25%	5/6/2021	5/6/2027	44,444		43,517		43,496		4.70
Apptio, Inc.	^	(2)(3)(13)	Software	L + 7.25%	8.25%	1/10/2019	1/10/2025	6,131		6,032		6,187		0.67
Aurora Lux FinCo S.Á.R.L. (Luxembourg)	^*	(2)(3)(7)	Software	L + 6.00%	7.00%	12/24/2019	12/24/2026	32,654		31,981		29,454		3.18
Avenu Holdings, LLC	*	(2)(3)	Sovereign & Public Finance	L + 5.25%	6.25%	9/28/2018	9/28/2024	13,615		13,495		13,615		1.47
Barnes & Noble, Inc.	^	(2)(3)(11)	Retail	L + 5.50%	6.50%	8/7/2019	8/7/2024	16,521		16,245		15,708		1.70
BlueCat Networks, Inc. (Canada)	*	(2)(3)(7)	High Tech Industries	L + 6.25%	7.25%	10/30/2020	10/30/2026	11,468		11,256		11,608		1.26
BMS Holdings III Corp.	*	(2)(3)	Construction & Building	L + 5.25%	6.25%	9/30/2019	9/30/2026	1,588		1,557		1,588		0.17
Captive Resources Midco, LLC	^*	(2)(3)(13)	Banking, Finance, Insurance & Real Estate	L + 5.75%	6.75%	6/30/2015	5/31/2025	10,328		10,191		10,328		1.12
Central Security Group, Inc.	^*	(2)(3)	Consumer Services	L + 6.00%	7.00%	10/16/2020	10/16/2025	9,230		9,231		8,539		0.92
Chartis Holding, LLC	^*	(2)(3)(13)	Business Services	L + 5.50%	6.50%	5/1/2019	5/1/2025	14,197		13,946		14,197		1.54
Chemical Computing Group ULC (Canada)	^*	(2)(3)(7)(13)	Software	L + 4.50%	5.50%	8/30/2018	8/30/2024	469		467		464		0.05
Chudy Group, LLC	^	(2)(3)(13)	Healthcare & Pharmaceuticals	L + 5.75%	6.75%	6/30/2021	6/30/2027	828		813		813		0.09
CircusTrix Holdings, LLC	^*	(2)(3)	Hotel, Gaming & Leisure	L + 5.50%, 2.50% PIK	9.00%	2/2/2018	1/16/2024	10,458		10,430		8,792		0.95
CircusTrix Holdings, LLC	^	(2)(3)(13)	Hotel, Gaming & Leisure	L + 5.50%, 2.50% PIK	9.00%	1/8/2021	7/16/2023	627		570		627		0.07
Cobblestone Intermediate Holdco LLC	^	(2)(3)	Consumer Services	L + 5.50%	6.50%	1/29/2020	1/29/2026	727		721		733		0.08
Comar Holding Company, LLC	^*	(2)(3)(13)	Containers, Packaging & Glass	L + 5.50%	6.50%	6/18/2018	6/18/2024	26,579		26,233		26,579		2.88
Cority Software Inc. (Canada)	^*	(2)(3)(7)(13)	Software	L + 5.00%	6.00%	7/2/2019	7/2/2026	10,568		10,367		10,568		1.14
Cority Software Inc. (Canada)	^	(2)(3)(7)	Software	L + 7.00%	8.00%	9/3/2020	7/2/2026	1,888		1,838		1,931		0.21

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of June 30, 2021

(dollar amounts in thousands)

(unaudited)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value (5)		% of Net Assets

DCA Investment Holding LLC	^*	(2)(3)(13)	Healthcare & Pharmaceuticals	L + 6.25%	7.00%	3/11/2021	3/12/2027	$	9,936	$	9,758	$	9,932	1.07	%
Derm Growth Partners III, LLC	^	(2)(3)(8)	Healthcare & Pharmaceuticals	L + 6.25%	7.25%	5/31/2016	5/31/2022	56,064		53,509		32,731		3.54
DermaRite Industries, LLC	^*	(2)(3)(13)	Healthcare & Pharmaceuticals	L + 7.00%	8.00%	3/3/2017	3/3/2022	20,310		20,261		19,140		2.07
Designer Brands Inc.	^	(2)(3)(7)	Retail	L + 8.50%	9.75%	8/7/2020	8/7/2025	17,500		17,126		17,203		1.86
Diligent Corporation	^	(2)(3)(13)	Telecommunications	L + 6.25%	7.25%	8/4/2020	8/4/2025	576		559		589		0.06
DTI Holdco, Inc.	^	(2)(3)	High Tech Industries	L + 4.75%	5.75%	12/18/2018	9/30/2023	1,944		1,879		1,868		0.20
Emergency Communications Network, LLC	^*	(2)(3)	Telecommunications	L + 2.625%, 5.125% PIK	8.75%	6/1/2017	6/1/2023	24,880		24,799		22,256		2.41
EPS Nass Parent, Inc.	^	(2)(3)(13)	Utilities: Electric	L + 5.75%	6.75%	4/19/2021	4/19/2028	847		828		832		0.09
Ethos Veterinary Health LLC	^	(2)(3)	Consumer Services	L + 4.75%	4.85%	5/17/2019	5/15/2026	2,599		2,561		2,585		0.28
EvolveIP, LLC	^*	(2)(3)(13)	Telecommunications	L + 5.75%	6.75%	11/26/2019	6/7/2023	25,733		25,686		25,733		2.78
Frontline Technologies Holdings, LLC	^*	(2)(3)	Software	L + 5.75%	6.75%	9/18/2017	9/18/2023	3,083		3,069		3,111		0.34
FWR Holding Corporation	^*	(2)(3)(13)	Beverage, Food & Tobacco	L + 5.50%, 1.50% PIK	8.00%	8/21/2017	8/21/2023	34,663		34,353		31,762		3.43
Greenhouse Software, Inc.	^	(2)(3)(13)	Software	L + 6.50%	7.50%	3/1/2021	3/1/2027	15,196		14,836		14,981		1.62
Hawkeye AcquisitionCo, LLC	^*	(2)(3)(13)	Aerospace & Defense	L + 6.75%	7.75%	3/1/2021	11/19/2026	7,189		6,978		7,043		0.76
Helios Buyer, Inc.	^*	(2)(3)(13)	Consumer Services	L + 5.50%	6.50%	12/15/2020	12/15/2026	14,015		13,743		14,160		1.53
Hercules Borrower LLC	^*	(2)(3)(13)	Environmental Industries	L + 6.50%	7.50%	12/14/2020	12/14/2026	18,546		18,066		18,784		2.03
Higginbotham Insurance Agency, Inc.	^	(2)(3)(13)	Banking, Finance, Insurance & Real Estate	L + 5.75%	6.50%	11/25/2020	11/25/2026	3,892		3,824		3,952		0.43
iCIMS, Inc.	^	(2)(3)	Software	L + 6.50%	7.50%	9/12/2018	9/12/2024	1,670		1,649		1,683		0.18
Individual FoodService Holdings, LLC	^	(2)(3)(13)	Wholesale	L + 6.25%	7.25%	2/21/2020	11/22/2025	3,826		3,746		3,814		0.41
Individual FoodService Holdings, LLC	^	(2)(3)(13)	Wholesale	L + 6.25%	7.25%	12/31/2020	11/22/2025	2,201		2,147		2,195		0.24
Infront Luxembourg Finance S.À R.L. (Luxembourg)	^	(2)(3)(7)	Hotel, Gaming & Leisure	L + 9.00%	9.00%	5/28/2021	5/28/2027	€	8,250	9,762		9,489		1.03
Integrity Marketing Acquisition, LLC	^	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 5.75%	6.75%	1/15/2020	8/27/2025	4,945		4,888		4,988		0.55
K2 Insurance Services, LLC	^*	(2)(3)(13)	Banking, Finance, Insurance & Real Estate	L + 5.00%	6.00%	7/3/2019	7/1/2024	5,562		5,439		5,543		0.60
Kaseya, Inc.	^	(2)(3)(13)	High Tech Industries	L + 4.00%, 3.00% PIK	8.00%	5/3/2019	5/2/2025	15,820		15,586		15,889		1.72
Legacy.com, Inc.	^	(2)(3)(11)	High Tech Industries	L + 6.00%	7.00%	3/20/2017	3/20/2023	17,066		16,923		16,445		1.78
Lifelong Learner Holdings, LLC	^	(2)(3)(13)	Business Services	L + 5.75%	6.75%	10/18/2019	10/18/2026	24,732		24,309		22,765		2.46
Liqui-Box Holdings, Inc.	^	(2)(3)(13)	Containers, Packaging & Glass	L + 4.50%	5.50%	6/3/2019	6/3/2024	2,297		2,278		2,067		0.22
LVF Holdings, Inc.	^*	(2)(3)(13)	Beverage, Food & Tobacco	L + 6.25%	7.25%	6/10/2021	6/10/2027	20,489		19,547		19,539		2.11

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of June 30, 2021

(dollar amounts in thousands)

(unaudited)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value (5)		% of Net Assets

Mailgun Technologies, Inc.	^	(2)(3)(13)	High Tech Industries	L + 5.00%	6.00%	3/26/2019	3/26/2025	$	3,239	$	3,176	$	3,228	0.35	%
Maverick Acquisition, Inc.	^*	(2)(3)(13)	Aerospace & Defense	L + 6.00%	7.00%	6/1/2021	6/1/2027	35,892		34,930		34,918		3.78
National Technical Systems, Inc.	^	(2)(3)(13)	Aerospace & Defense	L + 5.50%	6.50%	10/28/2020	6/12/2023	1,172		1,152		1,179		0.13
NES Global Talent Finance US, LLC (United Kingdom)	^	(2)(3)(7)	Energy: Oil & Gas	L + 5.50%	6.50%	5/9/2018	5/11/2023	9,738		9,666		9,393		1.02
NMI AcquisitionCo, Inc.	^*	(2)(3)(13)	High Tech Industries	L + 5.50%	6.50%	9/6/2017	9/6/2023	40,545		40,322		40,776		4.41
Paramit Corporation	^*	(2)(3)	Capital Equipment	L + 4.50%	5.50%	5/3/2019	5/3/2025	5,213		5,178		5,213		0.57
Paramit Corporation	^	(2)(3)(13)	Capital Equipment	L + 5.25%	6.25%	11/24/2020	5/3/2025	3,029		2,924		3,029		0.33
PF Growth Partners, LLC	^*	(2)(3)(13)	Hotel, Gaming & Leisure	L + 7.00%	8.00%	7/1/2019	7/11/2025	7,257		7,171		6,861		0.74
PPC Flexible Packaging, LLC	^*	(2)(3)(13)	Containers, Packaging & Glass	L + 5.75%	6.75%	11/23/2018	11/23/2024	11,480		11,387		11,481		1.24
PPT Management Holdings, LLC	^	(2)(3)	Healthcare & Pharmaceuticals	L + 6.00%, 2.00% PIK	9.00%	12/15/2016	12/16/2022	28,188		28,128		24,255		2.62
PricewaterhouseCoopers Public Sector LLP	^	(2)(3)(13)	Aerospace & Defense	L + 3.25%	3.40%	5/1/2018	5/1/2023	—		(58)		(14)		—
Product Quest Manufacturing, LLC	^	(2)(3)(8)	Containers, Packaging & Glass	L + 6.75%	10.00%	9/21/2017	3/31/2021	840		840		423		0.06
Propel Insurance Agency, LLC	*	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 5.00%	6.00%	6/1/2018	6/1/2024	2,327		2,317		2,304		0.25
Prophix Software Inc. (Canada)	^	(2)(3)(7)(13)	Software	L + 6.50%	7.50%	2/1/2021	2/1/2026	10,963		10,718		11,164		1.21
QW Holding Corporation	^*	(2)(3)	Environmental Industries	L + 6.25%	7.25%	8/31/2016	8/31/2024	42,895		42,650		41,886		4.53
Redwood Services Group, LLC	^*	(2)(3)(13)	High Tech Industries	L + 6.00%	7.00%	11/13/2018	6/6/2023	5,018		4,901		4,942		0.53
Redwood Services Group, LLC	*	(2)(3)	High Tech Industries	L + 8.50%	9.50%	8/14/2020	6/6/2023	3,457		3,383		3,491		0.39
Redwood Services Group, LLC	^*	(2)(3)(13)	High Tech Industries	L + 7.25%	8.25%	10/19/2020	6/6/2023	17,255		16,980		17,360		1.88
Regency Entertainment, Inc.	^	(2)(3)	Media: Diversified & Production	L + 6.75%	7.75%	5/22/2020	10/22/2025	20,000		19,667		19,666		2.13
Reladyne, Inc.	*	(2)(3)	Wholesale	L + 5.00%	6.00%	8/21/2020	7/22/2022	10,075		10,018		9,975		1.08
Riveron Acquisition Holdings, Inc.	*	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 5.75%	6.75%	5/22/2019	5/22/2025	11,459		11,301		11,459		1.24
RSC Acquisition, Inc.	^	(2)(3)(13)	Banking, Finance, Insurance & Real Estate	L + 5.50%	6.50%	11/1/2019	11/1/2026	6,214		6,112		6,279		0.68
Sapphire Convention, Inc.	^*	(2)(3)(13)	Telecommunications	L + 6.25%	7.25%	11/20/2018	11/20/2025	30,057		29,633		25,700		2.78
Smile Doctors, LLC	^*	(2)(3)(13)	Healthcare & Pharmaceuticals	L + 6.00%	7.00%	10/6/2017	10/6/2022	16,845		16,803		16,845		1.82
Southern Graphics, Inc.	^	(2)(3)(11)	Media: Advertising, Printing & Publishing	L + 6.50%	7.50%	10/30/2020	10/23/2023	9,959		9,793		9,768		1.05
SPay, Inc.	^*	(2)(3)(13)	Hotel, Gaming & Leisure	L + 2.30%, 6.95% PIK	10.25%	6/15/2018	6/17/2024	22,143		21,911		18,846		2.04
Speedstar Holding LLC	^*	(2)(3)(13)	Automotive	L + 7.00%	8.00%	1/22/2021	1/22/2027	27,363		26,778		27,421		2.96
Superior Health Linens, LLC	^*	(2)(3)(13)	Business Services	L + 6.50%	7.50%	9/30/2016	9/30/2021	14,486		14,459		14,486		1.57
T2 Systems, Inc.	^*	(2)(3)(13)	Transportation: Consumer	L + 6.75%	7.75%	9/28/2016	9/28/2022	26,466		26,286		26,466		2.86

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of June 30, 2021

(dollar amounts in thousands)

(unaudited)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value (5)		% of Net Assets

TCFI Aevex LLC	^*	(2)(3)(13)	Aerospace & Defense	L + 6.00%	7.00%	3/18/2020	3/18/2026	$	11,217	$	11,006	$	10,978	1.19	%
The Leaders Romans Bidco Limited (United Kingdom) Term Loan B	^	(2)(3)(7)	Banking, Finance, Insurance & Real Estate	L + 6.25%, 2.50% PIK	9.50%	7/23/2019	6/30/2024	£	21,034	25,891		29,024		3.13
The Leaders Romans Bidco Limited (United Kingdom) Term Loan C	^	(2)(3)(7)(13)	Banking, Finance, Insurance & Real Estate	L + 6.25%, 2.50% PIK	9.50%	7/23/2019	6/30/2024	£	5,064	7,478		9,457		1.02
Trump Card, LLC	^*	(2)(3)(13)	Transportation: Cargo	L + 5.50%	6.50%	6/26/2018	4/21/2022	7,715		7,701		7,652		0.83
TSB Purchaser, Inc.	^*	(2)(3)(13)	Media: Advertising, Printing & Publishing	L + 6.00%	7.00%	5/14/2018	5/14/2024	18,570		18,301		18,533		2.00
Turbo Buyer, Inc.	^*	(2)(3)(13)	Automotive	L + 6.00%	7.00%	12/2/2019	12/2/2025	20,480		20,061		20,046		2.17
Tweddle Group, Inc.	^	(2)(3)	Media: Advertising, Printing & Publishing	L + 4.50%	5.50%	9/17/2018	9/17/2023	1,629		1,615		1,554		0.17
Unifrutti Financing PLC (Cyprus)	^	(7)	Beverage, Food & Tobacco	7.50%, 1.00% PIK	8.50%	9/15/2019	9/15/2026	€	4,598	4,874		5,384		0.58
Unifrutti Financing PLC (Cyprus)	^	(7)	Beverage, Food & Tobacco	11.00% PIK	11.00%	10/22/2020	9/15/2026	€	717	809		839		0.09
US INFRA SVCS Buyer, LLC	^*	(2)(3)(13)	Environmental Industries	L + 6.00%	7.00%	4/13/2020	4/13/2026	5,632		5,121		4,780		0.51
USLS Acquisition, Inc.	^	(2)(3)(13)	Business Services	L + 6.50%	7.50%	11/30/2018	11/30/2024	21,338		21,053		20,241		2.19
Westfall Technik, Inc.	^*	(2)(3)(13)	Chemicals, Plastics & Rubber	L + 5.75%	6.75%	9/13/2018	9/13/2024	27,807		27,577		26,975		2.92
YLG Holdings, Inc.	^	(2)(3)(13)	Consumer Services	L + 6.00%	7.00%	9/30/2020	11/1/2025	1,622		1,567		1,637		0.18
Zemax Software Holdings, LLC	^	(2)(3)(13)	Software	L + 5.75%	6.75%	6/25/2018	6/25/2024	6,241		6,179		6,172		0.67
Zenith Merger Sub, Inc.	^*	(2)(3)(13)	Business Services	L + 5.25%	6.25%	12/13/2017	12/13/2023	10,544		10,466		10,544		1.14





First Lien Debt Total										$	1,248,447	$	1,212,747	131.13	%

Second Lien Debt (16.7% of fair value)
AI Convoy S.A.R.L (United Kingdom)	^	(2)(3)(7)	Aerospace & Defense	L + 8.25%	9.25%	1/17/2020	1/17/2028	$	24,813	$	24,330	$	25,744	2.78	%
Aimbridge Acquisition Co., Inc.	^	(2)(3)	Hotel, Gaming & Leisure	L + 7.50%	7.59%	2/1/2019	2/1/2027	9,240		9,113		8,500		0.92
AQA Acquisition Holdings, Inc.	^*	(2)(3)	High Tech Industries	L + 7.50%	8.00%	3/3/2021	3/3/2029	35,000		34,146		34,126		3.70
Brave Parent Holdings, Inc.	^*	(2)(3)	Software	L + 7.50%	7.60%	10/3/2018	4/19/2026	18,197		17,888		18,197		1.97
Drilling Info Holdings, Inc.	^	(2)(3)	Energy: Oil & Gas	L + 8.25%	8.35%	2/11/2020	7/30/2026	18,600		18,178		18,786		2.03
Jazz Acquisition, Inc.	^*	(2)(3)	Aerospace & Defense	L + 8.00%	8.10%	6/13/2019	6/18/2027	23,450		23,168		20,413		2.21
Outcomes Group Holdings, Inc.	^*	(2)(3)	Business Services	L + 7.50%	7.65%	10/23/2018	10/26/2026	1,731		1,728		1,731		0.19
PAI Holdco, Inc.	^	(2)(3)	Automotive	L + 6.25%, 2.00% PIK	9.25%	10/28/2020	10/28/2028	13,667		13,288		13,585		1.47
Peraton Corp.	^*	(2)(3)	Aerospace & Defense	L + 7.75%	8.50%	2/24/2021	2/1/2029	12,300		12,117		12,189		1.32
Quartz Holding Company	^	(2)(3)	Software	L + 8.00%	8.09%	4/2/2019	4/2/2027	7,048		6,937		7,048		0.76
Reladyne, Inc.	^	(2)(3)	Wholesale	L + 9.50%	10.50%	4/19/2018	1/21/2023	12,242		12,157		12,068		1.30

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of June 30, 2021

(dollar amounts in thousands)

(unaudited)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value (5)		% of Net Assets

Sovos Brands Intermediate Inc	^*	(2)(3)	Beverage, Food & Tobacco	L + 8.00%	8.75%	6/8/2021	6/8/2029	$	12,310	$	12,065	$	12,064	1.30	%
Stonegate Pub Company Bidco Limited (United Kingdom)	^	(2)(3)(7)	Beverage, Food & Tobacco	L + 8.50%	8.61%	3/12/2020	3/12/2028	£	20,000	24,758		23,322		2.52
Tank Holding Corp.	^*	(2)(3)	Capital Equipment	L + 8.25%	8.45%	3/26/2019	3/26/2027	35,965		35,525		36,315		3.93
TruGreen Limited Partnership	^	(2)(3)	Consumer Services	L + 8.50%	9.25%	11/16/2020	11/2/2028	13,000		12,757		13,109		1.42
Ultimate Baked Goods MIDCO, LLC	^	(2)(3)	Beverage, Food & Tobacco	L + 8.00%	9.00%	8/9/2018	8/9/2026	2,820		2,779		2,820		0.30
Watchfire Enterprises, Inc.	^	(2)(3)	Media: Advertising, Printing & Publishing	L + 8.25%	9.25%	10/2/2013	10/2/2024	7,000		6,995		6,987		0.76
World 50, Inc.	^	(9)	Business Services	11.50%	11.50%	1/10/2020	1/9/2027	7,635		7,507		7,594		0.83
WP CPP Holdings, LLC	^	(2)(3)	Aerospace & Defense	L + 7.75%	8.75%	7/18/2019	4/30/2026	39,500		39,196		38,532		4.17


Second Lien Debt Total										$	314,632	$	313,130	33.86	%


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Acquisition Date	Shares/ Units	Cost		Fair Value (5)		% of Net Assets
Equity Investments (2.9% of fair value)
ANLG Holdings, LLC	^	(6)	Capital Equipment	6/22/2018	592	$	592	$	748	0.08	%
Appriss Health, LLC	^	(6)	Healthcare & Pharmaceuticals	5/6/2021	4	4,146		4,146		0.45
Atlas Ontario LP (Canada)	^	(6)(7)	Business Services	4/7/2021	5,114	5,114		5,114		0.55
Avenu Holdings, LLC	^	(6)	Sovereign & Public Finance	9/28/2018	172	172		576		0.06
BK Intermediate Company, LLC	^	(6)	Healthcare & Pharmaceuticals	5/27/2020	288	288		324		0.04
Central Security Group, Inc.	^*	(6)	Consumer Services	10/16/2020	443	—		—		—
Chartis Holding, LLC	^	(6)	Business Services	5/1/2019	433	433		696		0.08
CIP Revolution Holdings, LLC	^	(6)	Media: Advertising, Printing & Publishing	8/19/2016	318	318		206		0.02
Cority Software Inc. (Canada)	^	(6)	Software	7/2/2019	250	250		369		0.04
Derm Growth Partners III, LLC	^	(6)	Healthcare & Pharmaceuticals	5/31/2016	1,000	1,000		—		—
Diligent Corporation	^	(6)	Telecommunications	4/5/2021	10	9,750		9,750		1.05
ECP Parent, LLC	^	(6)	Healthcare & Pharmaceuticals	3/29/2018	268	—		290		0.03
K2 Insurance Services, LLC	^	(6)	Banking, Finance, Insurance & Real Estate	7/3/2019	433	433		654		0.07
Legacy.com, Inc.	^	(6)	High Tech Industries	3/20/2017	1,500	1,500		844		0.09
Mailgun Technologies, Inc.	^	(6)	High Tech Industries	3/26/2019	424	424		783		0.08
North Haven Goldfinch Topco, LLC	^	(6)	Containers, Packaging & Glass	6/18/2018	2,315	2,315		3,074		0.33
Paramit Corporation	^	(6)	Capital Equipment	6/17/2019	150	500		748		0.08
PPC Flexible Packaging, LLC	^	(6)	Containers, Packaging & Glass	2/1/2019	965	965		1,567		0.17

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of June 30, 2021

(dollar amounts in thousands)

(unaudited)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Acquisition Date	Shares/ Units	Cost		Fair Value (5)		% of Net Assets
Rough Country, LLC	^	(6)	Durable Consumer Goods	5/25/2017	755	490		1,511		0.16
T2 Systems Parent Corporation	^	(6)	Transportation: Consumer	9/28/2016	556	$	556	$	708	0.08	%
Tailwind HMT Holdings Corp.	^	(6)	Energy: Oil & Gas	11/17/2017	22	1,558		2,023		0.22
Tank Holding Corp.	^	(6)	Capital Equipment	3/26/2019	850	482		1,027		0.11
Titan DI Preferred Holdings, Inc.	^	(6)	Energy: Oil & Gas	2/11/2020	12,011	11,736		12,131		1.31
Turbo Buyer, Inc.	^	(6)	Automotive	12/2/2019	1,925	933		2,342		0.25
Tweddle Holdings, Inc.	^*	(6)	Media: Advertising, Printing & Publishing	9/17/2018	17	—		—		—
Unifrutti Financing PLC (Cyprus)	^	(6)	Beverage, Food & Tobacco	10/22/2020	—	457		465		0.05
Unifrutti Financing PLC (Cyprus)	^	(6)	Beverage, Food & Tobacco	10/22/2020	1	133		110		0.01
USLS Acquisition, Inc.	^	(6)	Business Services	11/30/2018	641	641		631		0.07
W50 Parent LLC	^	(6)	Business Services	1/10/2020	500	500		825		0.09
Zenith American Holding, Inc.	^	(6)	Business Services	12/13/2017	1,564	782		1,546		0.17
Zillow Topco LP	^	(6)	Software	6/25/2018	313	313		171		0.02
Equity Investments Total						$	46,781	$	53,379	5.77	%
Total investments—non-controlled/non-affiliated						$	1,609,860	$	1,579,256	170.76	%


Investments—non-controlled/affiliated		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value (5)		% of Net Assets
First Lien Debt (1.5% of fair value)
Direct Travel, Inc.	^*	(2)(3)(8)(12)	Hotel, Gaming & Leisure	L + 1.00%, 7.50% PIK	9.50%	10/14/2016	10/1/2023	$	36,711	$	36,098	$	26,115	2.82	%
Direct Travel Inc.	^	(2)(3)(12)(13)	Hotel, Gaming & Leisure	L + 6.00%	7.00%	10/1/2020	10/1/2023	2,447		2,319		2,447		0.26
First Lien Debt Total										$	38,417	$	28,562	3.09	%


Investments—non-controlled/affiliated		Footnotes	Industry	Acquisition Date	Shares/ Units	Cost		Fair Value (5)		% of Net Assets
Equity Investments (0.0% of fair value)
Direct Travel, Inc.	^	(6)(12)	Hotel, Gaming & Leisure	10/1/2020	43	$	—	$	—	—	%
Equity Investments Total						$	—	$	—	—	%
Total investments—non-controlled/affiliated						$	38,417	$	28,562	3.09	%

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of June 30, 2021

(dollar amounts in thousands)

(unaudited)


Investments—controlled/affiliated		Footnotes	Industry	Reference Rate & Spread(2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value (5)		% of Net Assets
First Lien Debt (0.3% of fair value)
SolAero Technologies Corp. (A1 Term Loan)	^	(2)(3)(8)(10)	Telecommunications	L + 8.00% (100% PIK)	9.00%	4/12/2019	10/12/2022	$	3,167	$	3,166	$	646	0.07	%
SolAero Technologies Corp. (A2 Term Loan)	^	(2)(3)(8)(10)	Telecommunications	L + 8.00% (100% PIK)	9.00%	4/12/2019	10/12/2022	8,707		8,707		1,776		0.19
SolAero Technologies Corp. (Priority Facilities)	^	(2)(3)(10)(13)	Telecommunications	L + 6.00%	7.00%	4/12/2019	10/12/2022	2,287		2,267		2,287		0.25

First Lien Debt Total										$	14,140	$	4,709	0.51	%


Investments—controlled/affiliated		Footnotes	Industry	Acquisition Date	Shares/ Units	Cost		Fair Value (5)		% of Net Assets
Equity Investments (0.0% of fair value)
SolAero Technologies Corp.	^	(6)(10)	Telecommunications	4/12/2019	3	$	2,815	$	—	—	%

Equity Investments Total						$	2,815	$	—	—	%


Investments—controlled/affiliated		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par Amount/ LLC Interest **		Cost		Fair Value (5)		% of Net Assets
Investment Funds (13.9% of fair value)
Middle Market Credit Fund II, LLC, Member's Interest	^	(7)(10)	Investment Funds	N/A	—%	11/3/2020	12/31/2030	$	78,122	$	78,096	$	78,441	8.48	%
Middle Market Credit Fund, LLC, Subordinated Loan and Member's Interest	^	(7)(10)	Investment Funds	N/A	—%	2/29/2016	12/31/2024	193,000		193,000		181,343		19.61
Middle Market Credit Fund, Mezzanine Loan	^	(2)(7)(9)(10)	Investment Funds	L + 9.00%	9.19%	6/30/2016	5/21/2022	—		—		—		—
Investment Fund Total										$	271,096	$	259,784	28.09	%

Total investments—controlled/affiliated										$	288,051	$	264,493	28.61	%
Total Investments										$	1,936,328	$	1,872,311	202.45	%

^ Denotes that all or a portion of the assets are owned by TCG BDC, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “TCG BDC” or the “Company”). The Company has entered into a senior secured revolving credit facility (as amended, the “Credit Facility”). The lenders of the Credit Facility have a first lien security interest in substantially all of the portfolio investments held by the Company (see Note 7, Borrowings). Accordingly, such assets are not available to creditors of Carlyle Direct Lending CLO 2015-1R LLC (formerly known as Carlyle GMS Finance MM CLO 2015-1 LLC) (the “2015-1 Issuer”).

* Denotes that all or a portion of the assets are owned by the Company's wholly owned subsidiary, the 2015-1 Issuer, and secure the notes issued in connection with a term debt securitization completed by the Company on June 26, 2015 (see Note 8, Notes Payable). Accordingly, such assets are not available to the creditors of the Company.

** Par amount is denominated in USD ("$") unless otherwise noted, as denominated in Euro (“€”) or British Pound (“£”).

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of June 30, 2021

(dollar amounts in thousands)

(unaudited)

securities and/or held the power to exercise control over the management or policies of the portfolio company. As of June 30, 2021, the Company does not “control” any of these portfolio companies. Under the Investment Company Act, the Company would be deemed an “affiliated person” of a portfolio company if the Company owns 5% or more of the portfolio company’s outstanding voting securities. As of June 30, 2021, the Company is not an “affiliated person” of any of these portfolio companies. Certain portfolio company investments are subject to contractual restrictions on sales.

(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR (“L”) or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, the Company has indicated the reference rate used and provided the spread and the interest rate in effect as of June 30, 2021. As of June 30, 2021, the reference rates for our variable rate loans were the 30-day LIBOR at 0.10%, the 90-day LIBOR at 0.15% and the 180-day LIBOR at 0.16%.

(3)Loan includes interest rate floor feature, which is generally 1.00%.

(4)Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.

(5)Fair value is determined in good faith by or under the direction of the Board of Directors of the Company (see Note 2, Significant Accounting Policies, and Note 3, Fair Value Measurements), pursuant to the Company’s valuation policy. The fair value of all first lien and second lien debt investments, equity investments and the investment funds was determined using significant unobservable inputs.

(6)Security acquired in transaction exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act. As of June 30, 2021, the aggregate fair value of these securities is $53,379, or 5.77% of the Company’s net assets.

(7)The Company has determined the indicated investments are non-qualifying assets under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company’s total assets.

(8)Loan was on non-accrual status as of June 30, 2021.

(9)Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company/investment fund.

(10)Under the Investment Company Act, the Company is deemed to be an “affiliated person” of and “control” this investment fund because the Company owns more than 25% of the investment fund’s outstanding voting securities and/or has the power to exercise control over management or policies of such investment fund. See Note 5, Middle Market Credit Fund, LLC, and Note 6, Middle Market Credit Fund II, LLC, for more details. Transactions related to investments in controlled affiliates for the six month period ended June 30, 2021, were as follows:


Investments—controlled/affiliated	Fair Value as of December 31, 2020		Additions/Purchases		Reductions/Sales/ Paydowns		Net Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Fair Value as of June 30, 2021		Dividend and Interest Income
Middle Market Credit Fund, LLC, Mezzanine Loan	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Middle Market Credit Fund, LLC, Subordinated Loan and Member’s Interest	205,891		—		(23,000)		—		(1,548)		181,343		10,000
Middle Market Credit Fund II LLC, Member's Interest	77,395		—		—		—		1,046		78,441		5,016
Total investments—controlled/affiliated	$	283,286	$	—	$	(23,000)	$	—	$	(502)	$	259,784	$	15,016


Investments—controlled/affiliated	Fair Value as of December 31, 2020		Additions/Purchases		Reductions/Sales/ Paydowns		Net Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Fair Value as of June 30, 2021		Dividend and Interest Income
SolAero Technologies Corp. (Priority Term Loan)	$	2,460	$	—	$	(173)	$	—	$	—	$	2,287	$	106
SolAero Technologies Corp. (A1 Term Loan)	1,214		—		—		—		(568)		646		—
SolAero Technologies Corp. (A2 Term Loan)	3,338		—		—		—		(1,562)		1,776		—
Solaero Technology Corp. (Equity)	—		—		—		—		—		—		—
Total investments—controlled/affiliated	$	7,012	$	—	$	(173)	$	—	$	(2,130)	$	4,709	$	106

(11) In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among lenders as follows: Barnes & Noble, Inc. (1.83%), Southern Graphics, Inc. (1.71%), and Legacy.com Inc. (3.89%). Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of June 30, 2021

(dollar amounts in thousands)

(unaudited)

(12) Under the Investment Company Act, the Company is deemed an "affiliated person" of this portfolio company because the Company owns 5% or more of the portfolio company's outstanding voting securities. Transactions related to the portfolio company during the six month period ended June 30, 2021 were as follows:


Investments—non-controlled/affiliated	Fair Value as of December 31, 2020		Additions/Purchases		Reductions/Sales/ Paydowns		Net Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Fair Value as of June 30, 2021		Dividend and Interest Income
Direct Travel, Inc.	$	24,949	$	—	$	(245)	$	2	$	1,409	$	26,115	$	—
Direct Travel, Inc.	1,231		1,088		—		—		128		2,447		83
Direct Travel, Inc. (Equity)	—		—		—		—		—		—		—
Total investments—non-controlled/affiliated	$	26,180	$	1,088	$	(245)	$	2	$	1,537	$	28,562	$	83

(13)As of June 30, 2021, the Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans:


Investments—non-controlled/non-affiliated	Type	Unused Fee	Par/ Principal Amount		Fair Value
First and Second Lien Debt—unfunded delayed draw and revolving term loans commitments
Advanced Web Technologies Holding Company	Delayed Draw	1.00%	$	2,299	$	23
Advanced Web Technologies Holding Company	Revolver	0.50	821		8
Airnov, Inc.	Revolver	0.50	875		—
American Physician Partners, LLC	Revolver	0.50	550		(4)
AMS Group HoldCo, LLC	Revolver	0.50	2,315		—
Analogic Corporation	Revolver	0.50	168		(2)
Applied Technical Services	Delayed Draw	1.00	132		(2)
Applied Technical Services	Revolver	0.50	53		(1)
Appriss Health, LLC	Revolver	0.50	2,963		(59)
Apptio, Inc.	Revolver	0.50	1,420		11
Captive Resources Midco, LLC	Revolver	0.50	2,143		—
Chartis Holding, LLC	Revolver	0.50	2,401		—
Chemical Computing Group ULC (Canada)	Revolver	0.50	29		—
Chudy Group, LLC	Revolver	0.50	34		(1)
Chudy Group, LLC	Delayed Draw	1.00	138		(2)
CircusTrix Holdings, LLC	Delayed Draw	1.00	6		—
Comar Holding Company, LLC	Revolver	0.50	2,935		—
Cority Software Inc.(Canada)	Revolver	0.50	3,000		—
DCA Investment Holding, LLC	Delayed Draw	1.00	2,449		(1)
DermaRite Industries, LLC	Revolver	0.50	579		(32)
Diligent Corporation	Delayed Draw	1.00	141		2
Diligent Corporation	Revolver	0.50	47		1

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of June 30, 2021

(dollar amounts in thousands)

(unaudited)


Investments—non-controlled/non-affiliated	Type	Unused Fee	Par/ Principal Amount		Fair Value
Direct Travel, Inc.	Delayed Draw	0.50	$	1,941	$	—
EPS Nass Parent, Inc.	Revolver	0.50	68		(1)
EPS Nass Parent, Inc.	Delayed Draw	1.00	85		(1)
EvolveIP, LLC	Delayed Draw	1.00	3,333		—
EvolveIP, LLC	Revolver	0.50	2,941		—
FWR Holding Corporation	Revolver	0.50	4,444		(330)
Greenhouse Software, Inc.	Revolver	0.50	1,471		(19)
Hawkeye AcquisitionCo, LLC	Delayed Draw	1.00	3,360		(44)
Hawkeye AcquisitionCo, LLC	Revolver	0.50	557		(7)
Helios Buyer, Inc.	Revolver	0.38	689		7
Hercules Borrower LLC	Revolver	0.50	2,160		25
Higginbotham Insurance Agency, Inc.	Delayed Draw	1.00	1,098		13
Individual FoodService Holdings, LLC	Revolver	0.50	673		(2)
Individual FoodService Holdings, LLC	Delayed Draw	1.00	584		(1)
Individual FoodService Holdings, LLC	Delayed Draw	1.00	149		—
K2 Insurance Services, LLC	Revolver	0.50	1,120		(3)
K2 Insurance Services, LLC	Delayed Draw	1.00	769		(2)
Kaseya, Inc.	Delayed Draw	1.00	1,111		4
Kaseya, Inc.	Revolver	0.50	787		3
Lifelong Learner Holdings, LLC	Delayed Draw	1.00	1,690		(124)
Lifelong Learner Holdings, LLC	Revolver	0.50	342		(25)
Liqui-Box Holdings, Inc.	Revolver	0.50	333		(29)
LVF Holdings, Inc.	Delayed Draw	1.00	19,496		(390)
LVF Holdings, Inc.	Revolver	0.50	2,802		(56)
LVF Holdings, Inc.	Delayed Draw	1.00	4,670		(93)
Mailgun Technologies, Inc.	Revolver	0.50	1,342		(3)
Maverick Acquisition, Inc.	Delayed Draw	1.00	12,818		(256)
National Technical Systems, Inc.	Revolver	0.50	835		3
NMI AcquisitionCo, Inc.	Revolver	0.50	1,280		7
Paramit Corporation	Delayed Draw	1.00	2,931		—
PF Growth Partners, LLC	Delayed Draw	1.00	823		(40)
PPC Flexible Packaging, LLC	Revolver	0.50	685		—
PricewaterhouseCoopers Public Sector LLP	Revolver	0.50	6,250		(14)
Prophix Software Inc. (Canada)	Revolver	0.50	1,993		31
Redwood Services Group, LLC	Delayed Draw	3.63	268		2
Redwood Services Group, LLC	Delayed Draw	1.00	10,501		(51)
RSC Acquisition, Inc.	Revolver	0.50	301		3
Sapphire Convention, Inc.	Revolver	0.50	2,410		(323)

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of June 30, 2021

(dollar amounts in thousands)

(unaudited)


Investments—non-controlled/non-affiliated	Type	Unused Fee	Par/ Principal Amount		Fair Value
Smile Doctors, LLC	Revolver	0.50	$	707	$	—
SolAero Technologies Corp. (Priority Facilities)	Revolver	0.50	984		—
SolAero Technologies Corp. (Priority Facilities)	Revolver	0.50	1,084		—
SPay, Inc.	Revolver	0.50	648		(94)
Speedstar Holding, LLC	Delayed Draw	1.00	3,775		7
Superior Health Linens, LLC	Revolver	0.50	2,333		—
T2 Systems, Inc.	Revolver	0.50	2,933		—
TCFI Aevex LLC	Delayed Draw	1.00	214		(4)
TCFI Aevex LLC	Delayed Draw	1.00	1,835		(33)
The Leaders Romans Bidco Limited (United Kingdom)	Delayed Draw	1.00	£	2,111	348
Trump Card, LLC	Revolver	0.50	477		(4)
TSB Purchaser, Inc.	Revolver	0.50	1,891		(3)
Turbo Buyer, Inc.	Revolver	0.50	1,217		(24)
US INFRA SVCS Buyer, LLC	Revolver	0.50	700		(19)
US INFRA SVCS Buyer, LLC	Delayed Draw	1.00	25,324		(687)
USLS Acquisition, Inc.	Revolver	0.50	1,418		(68)
Westfall Technik, Inc.	Revolver	0.50	216		(6)
YLG Holdings, Inc.	Delayed Draw	1.00	368		3
Zemax Software Holdings, LLC	Revolver	0.50	642		(6)
Zenith Merger Sub, Inc.	Revolver	0.50	2,120		—
Total unfunded commitments			$	176,407	$	(2,365)

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of June 30, 2021

(dollar amounts in thousands)

(unaudited)

As of June 30, 2021, investments at fair value consisted of the following:


Type	Amortized Cost		Fair Value		% of Fair Value


First Lien Debt	$	1,301,004	$	1,246,018	66.5	%
Second Lien Debt	314,632		313,130		16.7
Equity Investments	49,596		53,379		2.9
Investment Funds	271,096		259,784		13.9
Total	$	1,936,328	$	1,872,311	100.0	%

The rate type of debt investments at fair value as of June 30, 2021 was as follows:


Rate Type	Amortized Cost		Fair Value		% of Fair Value of First and Second Lien Debt
Floating Rate	$	1,602,446	$	1,545,331	99.1	%
Fixed Rate	13,190		13,817		0.9
Total	$	1,615,636	$	1,559,148	100.0	%

The industry composition of investments at fair value as of June 30, 2021 was as follows:


Industry	Amortized Cost		Fair Value		% of Fair Value
Aerospace & Defense	$	152,819	$	150,982	8.1	%
Automotive	61,060		63,394		3.4
Banking, Finance, Insurance & Real Estate	77,874		83,988		4.5
Beverage, Food & Tobacco	99,775		96,305		5.1
Business Services	101,822		101,254		5.4
Capital Equipment	47,525		49,407		2.6
Chemicals, Plastics & Rubber	27,577		26,975		1.4
Construction & Building	1,557		1,588		0.1
Consumer Services	40,580		40,763		2.2
Containers, Packaging & Glass	59,290		60,817		3.2
Durable Consumer Goods	490		1,511		0.1
Energy: Oil & Gas	41,138		42,333		2.2
Environmental Industries	65,837		65,450		3.5
Healthcare & Pharmaceuticals	206,412		179,990		9.6
High Tech Industries	176,415		177,520		9.5
Hotel, Gaming & Leisure	97,374		81,677		4.4
Investment Funds	271,096		259,784		13.9
Media: Advertising, Printing & Publishing	37,022		37,048		2.0

Media: Diversified & Production	19,667		19,666		1.1

Retail	33,371		32,911		1.8
Software	112,524		111,500		6.0

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of June 30, 2021

(dollar amounts in thousands)

(unaudited)


Industry	Amortized Cost		Fair Value		% of Fair Value
Sovereign & Public Finance	$	13,667	$	14,191	0.8	%
Telecommunications	107,382		88,737		4.7
Transportation: Cargo	28,316		28,462		1.5
Transportation: Consumer	26,842		27,174		1.4
Utilities: Electric	828		832		—
Wholesale	28,068		28,052		1.50
	$	1,936,328	$	1,872,311	100.0	%

The geographical composition of investments at fair value as of June 30, 2021 was as follows:


Geography	Amortized Cost		Fair Value		% of Fair Value
Canada	$	40,010	$	41,218	2.2	%

Cyprus	6,273		6,798		0.4

Luxembourg	41,743		38,943		2.1
United Kingdom	92,123		96,940		5.2
United States	1,756,179		1,688,412		90.1
Total	$	1,936,328	$	1,872,311	100.0	%

The accompanying notes are an integral part of these consolidated financial statements.

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of December 31, 2020

(dollar amounts in thousands)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value(5)		% of Net Assets
First Lien Debt (65.2% of fair value)
Advanced Web Technologies Holding Company	^	(2)(3)(13)	Containers, Packaging & Glass	L + 6.00%	7.00%	12/17/2020	12/17/2026	$	6,042	$	5,859	$	5,858	0.65	%
Airnov, Inc.	^*	(2)(3)(13)	Containers, Packaging & Glass	L + 5.25%	6.25%	12/20/2019	12/19/2025	11,216		11,057		11,221		1.24
Alpha Packaging Holdings, Inc.	*	(2)(3)	Containers, Packaging & Glass	L + 6.00%	7.00%	6/26/2015	11/12/2021	2,784		2,784		2,784		0.31
Alpine SG, LLC	*	(2)(3)	High Tech Industries	L + 5.75%	6.75%	2/2/2018	11/16/2022	10,890		10,835		10,808		1.20
Alpine SG, LLC	^	(2)(3)	High Tech Industries	L + 8.50%	9.50%	7/24/2020	11/16/2022	1,618		1,578		1,612		0.18
Alpine SG, LLC	^*	(2)(3)	High Tech Industries	L + 6.50%	7.50%	11/2/2020	11/16/2022	10,750		10,452		10,698		1.19
American Physician Partners, LLC	^*	(2)(3)(13)	Healthcare & Pharmaceuticals	L + 6.75%	7.75%	1/7/2019	12/21/2021	28,848		28,715		27,295		3.03
AMS Group HoldCo, LLC	^	(2)(3)(13)	Transportation: Cargo	L + 6.50%	7.50%	9/29/2017	9/29/2023	22,252		22,004		21,945		2.43
Analogic Corporation	*	(2)(3)(13)	Capital Equipment	L + 5.25%	6.25%	6/22/2018	6/22/2024	2,361		2,332		2,361		0.26
Anchor Hocking, LLC	^	(2)(3)	Durable Consumer Goods	L + 11.75%	12.75%	1/25/2019	1/25/2024	9,758		9,547		9,358		1.04
Applied Technical Services, LLC	^	(2)(3)(13)	Business Services	L + 5.75%	6.75%	12/29/2020	12/29/2026	395		382		382		0.04
Apptio, Inc.	^	(2)(3)(13)	Software	L + 7.25%	8.25%	1/10/2019	1/10/2025	5,184		5,073		5,297		0.59
At Home Holding III, Inc.	^	(2)(3)(7)	Retail	L + 9.00%	10.00%	6/12/2020	7/27/2022	875		858		870		0.10
Aurora Lux FinCo S.Á.R.L. (Luxembourg)	^*	(2)(3)(7)	Software	L + 5.75%	6.75%	12/24/2019	12/24/2026	32,819		32,093		29,970		3.32
Avenu Holdings, LLC	^*	(2)(3)	Sovereign & Public Finance	L + 5.25%	6.25%	9/28/2018	9/28/2024	37,276		36,883		37,276		4.14
Barnes & Noble, Inc.	^	(2)(3)(11)	Retail	L + 5.50%	6.50%	8/7/2019	8/7/2024	16,744		16,426		15,808		1.75
BlueCat Networks, Inc. (Canada)	*	(2)(3)(7)	High Tech Industries	L + 6.25%	7.25%	10/30/2020	10/30/2026	11,468		11,243		11,239		1.25
BMS Holdings III Corp.	*	(2)(3)	Construction & Building	L + 5.25%	6.25%	9/30/2019	9/30/2026	1,596		1,554		1,578		0.18
Captive Resources Midco, LLC	^*	(2)(3)(13)	Banking, Finance, Insurance & Real Estate	L + 5.75%	6.75%	6/30/2015	5/31/2025	10,525		10,370		10,611		1.18
Central Security Group, Inc.	^*	(2)(3)	Consumer Services	L + 6.00%	7.00%	10/16/2020	10/16/2025	9,278		9,278		7,930		0.88
Chartis Holding, LLC	^*	(2)(3)(13)	Business Services	L + 5.50%	6.50%	5/1/2019	5/1/2025	16,266		15,969		16,275		1.81
Chemical Computing Group ULC (Canada)	^*	(2)(3)(7)(13)	Software	L + 5.00%	6.00%	8/30/2018	8/30/2023	471		469		471		0.05
CircusTrix Holdings, LLC	^*	(2)(3)	Hotel, Gaming & Leisure	L + 6.75% (100% PIK)	7.75%	2/2/2018	12/6/2021	10,023		9,987		8,093		0.90
Cobblestone Intermediate Holdco LLC	^	(2)(3)(13)	Consumer Services	L + 4.75%	5.75%	1/29/2020	1/29/2026	720		713		723		0.08
Comar Holding Company, LLC	^*	(2)(3)(13)	Containers, Packaging & Glass	L + 5.50%	6.50%	6/18/2018	6/18/2024	22,037		21,636		22,147		2.46
Cority Software Inc. (Canada)	^*	(2)(3)(7)(13)	Software	L + 5.25%	6.25%	7/2/2019	7/2/2026	10,622		10,401		10,718		1.19
Cority Software Inc. (Canada)	^	(2)(3)(7)	Software	L + 7.25%	8.25%	9/3/2020	7/2/2026	1,898		1,843		1,935		0.21
Derm Growth Partners III, LLC	^	(2)(3)(8)	Healthcare & Pharmaceuticals	L + 6.25% (100% PIK)	7.25%	5/31/2016	5/31/2022	56,320		56,046		28,212		3.13
DermaRite Industries, LLC	^*	(2)(3)(13)	Healthcare & Pharmaceuticals	L + 7.00%	8.00%	3/3/2017	3/3/2022	18,862		18,776		18,656		2.07
Designer Brands Inc.	^	(2)(3)(7)	Retail	L + 8.50%	9.75%	8/7/2020	8/7/2025	17,955		17,534		17,811		1.98

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2020

(dollar amounts in thousands)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value(5)		% of Net Assets
Diligent Corporation	^	(2)(3)(13)	Telecommunications	L + 6.25%	7.25%	8/4/2020	8/4/2025	$	579	$	561	$	588	0.07	%
DTI Holdco, Inc.	*	(2)(3)	High Tech Industries	L + 4.75%	5.75%	12/18/2018	9/30/2023	1,954		1,876		1,741		0.19
Emergency Communications Network, LLC	^*	(2)(3)	Telecommunications	L + 2.625%, 5.125% PIK	8.75%	6/1/2017	6/1/2023	24,370		24,269		21,349		2.37
Ensono, LP	*	(2)(3)	Telecommunications	L + 5.25%	5.40%	4/30/2018	6/27/2025	2,158		2,142		2,142		0.24
Ensono, LP	^*	(2)(3)	Telecommunications	L + 5.75%	5.90%	6/25/2020	6/27/2025	18,131		18,008		17,995		2.00
Ethos Veterinary Health LLC	^	(2)(3)(13)	Consumer Services	L + 4.75%	4.90%	5/17/2019	5/15/2026	2,612		2,570		2,540		0.28
EvolveIP, LLC	^	(2)(3)(13)	Telecommunications	L + 5.75%	6.75%	11/26/2019	6/7/2023	25,864		25,806		25,828		2.87
Frontline Technologies Holdings, LLC	*	(2)(3)	Software	L + 5.75%	6.75%	9/18/2017	9/18/2023	3,099		3,081		3,037		0.34
FWR Holding Corporation	^*	(2)(3)(13)	Beverage, Food & Tobacco	L + 5.50%, 1.50% PIK	8.00%	8/21/2017	8/21/2023	34,555		34,175		31,216		3.46
Helios Buyer, Inc.	^	(2)(3)(13)	Consumer Services	L + 6.00%	7.00%	12/15/2020	12/15/2026	8,749		8,456		8,454		0.94
Hercules Borrower LLC	^	(2)(3)(13)	Environmental Industries	L + 6.50%	7.50%	12/14/2020	12/14/2026	18,592		18,077		18,073		2.01
Higginbotham Insurance Agency, Inc.	^	(2)(3)(13)	Banking, Finance, Insurance & Real Estate	L + 5.75%	6.50%	11/25/2020	11/25/2026	3,902		3,828		3,827		0.42
iCIMS, Inc.	^	(2)(3)	Software	L + 6.50%	7.50%	9/12/2018	9/12/2024	1,670		1,646		1,666		0.18
Individual FoodService Holdings, LLC	^	(2)(3)(13)	Wholesale	L + 6.25%	7.25%	2/21/2020	11/22/2025	3,883		3,797		3,759		0.42
Individual FoodService Holdings, LLC	^	(2)(3)(13)	Wholesale	L + 6.25%	7.25%	12/31/2020	11/22/2025	2,197		2,134		2,134		0.24
Innovative Business Services, LLC	^*	(2)(3)	High Tech Industries	L + 5.50%	6.50%	4/5/2018	4/5/2023	13,779		13,523		13,484		1.50
Integrity Marketing Acquisition, LLC	^	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 5.75%	6.75%	1/15/2020	8/27/2025	4,970		4,907		5,011		0.56
K2 Insurance Services, LLC	^*	(2)(3)(13)	Banking, Finance, Insurance & Real Estate	L + 5.00%	6.00%	7/3/2019	7/1/2024	18,651		18,323		18,653		2.07
Kaseya, Inc.	^	(2)(3)(13)	High Tech Industries	L + 4.00%, 3.00% PIK	8.00%	5/3/2019	5/2/2025	14,871		14,610		14,940		1.66
Legacy.com, Inc.	^	(2)(3)(11)	High Tech Industries	L + 6.00%	7.00%	3/20/2017	3/20/2023	17,066		16,886		16,055		1.78
Lifelong Learner Holdings, LLC	^*	(2)(3)(13)	Business Services	L + 5.75%	6.75%	10/18/2019	10/18/2026	23,814		23,355		21,580		2.39
Liqui-Box Holdings, Inc.	^	(2)(3)(13)	Containers, Packaging & Glass	L + 4.50%	5.50%	6/3/2019	6/3/2024	1,368		1,346		1,112		0.12
Mailgun Technologies, Inc.	^	(2)(3)(13)	High Tech Industries	L + 5.00%	6.00%	3/26/2019	3/26/2025	3,256		3,185		3,175		0.35
National Technical Systems, Inc.	^	(2)(3)(13)	Aerospace & Defense	L + 5.50%	6.50%	10/28/2020	6/12/2023	1,175		1,150		1,160		0.13
NES Global Talent Finance US, LLC (United Kingdom)	*	(2)(3)(7)	Energy: Oil & Gas	L + 5.50%	6.50%	5/9/2018	5/11/2023	9,789		9,697		8,859		0.98
NMI AcquisitionCo, Inc.	^*	(2)(3)(13)	High Tech Industries	L + 5.00%	6.00%	9/6/2017	9/6/2022	40,756		40,442		40,336		4.48
Paramit Corporation	*	(2)(3)	Capital Equipment	L + 4.50%	5.50%	5/3/2019	5/3/2025	5,213		5,174		5,109		0.57
Paramit Corporation	^	(2)(3)(13)	Capital Equipment	L + 5.25%	6.25%	11/24/2020	5/3/2025	3,029		2,912		2,909		0.32
Park Place Technologies, LLC	^	(2)(3)	High Tech Industries	L + 5.00%	6.00%	11/19/2020	11/19/2027	20,000		19,211		19,150		2.12

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2020

(dollar amounts in thousands)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value(5)		% of Net Assets
PF Growth Partners, LLC	^*	(2)(3)(13)	Hotel, Gaming & Leisure	L + 7.00%	8.00%	7/1/2019	7/11/2025	$	7,294	$	7,198	$	6,778	0.75	%
Plano Molding Company, LLC	^	(2)(3)	Hotel, Gaming & Leisure	L + 7.50%, 1.50% PIK	10.00%	5/1/2015	5/12/2022	14,693		14,664		13,001		1.44
Plano Molding Company, LLC	^	(2)(3)	Hotel, Gaming & Leisure	L + 7.50%, 1.50% PIK	10.00%	8/7/2020	5/12/2022	1,081		1,073		1,081		0.12
PPC Flexible Packaging, LLC	^*	(2)(3)(13)	Containers, Packaging & Glass	L + 6.00%	7.00%	11/23/2018	11/23/2024	11,338		11,234		11,300		1.25
PPT Management Holdings, LLC	^	(2)(3)	Healthcare & Pharmaceuticals	L + 6.00%, 2.50% PIK	9.50%	12/15/2016	12/16/2022	27,896		27,817		22,798		2.53
PricewaterhouseCoopers Public Sector LLP	^	(2)(3)(13)	Aerospace & Defense	L + 3.25%	3.49%	5/1/2018	5/1/2023	—		(74)		(32)		—
Product Quest Manufacturing, LLC	^	(2)(3)(8)	Containers, Packaging & Glass	L + 6.75%	10.00%	9/21/2017	3/31/2021	840		840		423		0.05
Propel Insurance Agency, LLC		(2)(3)	Banking, Finance, Insurance & Real Estate	L + 5.00%	6.00%	6/1/2018	6/1/2024	2,339		2,327		2,316		0.26
QW Holding Corporation	^*	(2)(3)(13)	Environmental Industries	L + 6.25%	7.25%	8/31/2016	8/31/2022	43,119		42,771		40,990		4.55
Redwood Services Group, LLC	*	(2)(3)	High Tech Industries	L + 6.00%	7.00%	11/13/2018	6/6/2023	5,043		5,017		5,030		0.56
Redwood Services Group, LLC	*	(2)(3)	High Tech Industries	L + 8.50%	9.50%	8/14/2020	6/6/2023	3,474		3,378		3,494		0.39
Redwood Services Group, LLC	^*	(2)(3)(13)	High Tech Industries	L + 7.25%	8.25%	10/19/2020	6/6/2023	12,957		12,628		13,024		1.44
Regency Entertainment, Inc.	^	(2)(3)	Media: Diversified & Production	L + 6.75%	7.75%	5/22/2020	10/22/2025	20,000		19,636		19,600		2.17
Reladyne, Inc.	*	(2)(3)	Wholesale	L + 5.00%	6.00%	8/21/2020	7/22/2022	10,100		10,017		10,146		1.13
Riveron Acquisition Holdings, Inc.	*	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 5.75%	6.75%	5/22/2019	5/22/2025	11,517		11,341		11,595		1.29
RSC Acquisition, Inc.	^	(2)(3)(13)	Banking, Finance, Insurance & Real Estate	L + 5.50%	6.50%	11/1/2019	11/1/2026	10,711		10,534		10,824		1.20
Sapphire Convention, Inc.	^*	(2)(3)(13)	Telecommunications	L + 6.25%	7.25%	11/20/2018	11/20/2025	28,812		28,342		24,000		2.66
Smile Doctors, LLC	^*	(2)(3)(13)	Healthcare & Pharmaceuticals	L + 6.00%	7.00%	10/6/2017	10/6/2022	16,930		16,872		16,577		1.84
Southern Graphics, Inc.	^	(2)(3)(11)	Media: Advertising, Printing & Publishing	L + 6.50%	7.50%	10/30/2020	10/23/2023	9,959		9,769		9,849		1.09
Sovos Brands Intermediate, Inc.	*	(2)(3)	Beverage, Food & Tobacco	L + 4.75%	4.96%	11/16/2018	11/20/2025	17,498		17,360		17,348		1.92
SPay, Inc.	^*	(2)(3)(13)	Hotel, Gaming & Leisure	L + 5.75%, 2.00% PIK	8.75%	6/15/2018	6/17/2024	21,365		21,099		17,318		1.92
Superior Health Linens, LLC	^*	(2)(3)(13)	Business Services	L + 6.50%	7.50%	9/30/2016	9/30/2021	13,155		13,116		13,079		1.45
T2 Systems, Inc.	^*	(2)(3)(13)	Transportation: Consumer	L + 6.75%	7.75%	9/28/2016	9/28/2022	26,605		26,356		26,605		2.95
Tank Holding Corp.	^	(2)(3)(13)	Capital Equipment	L + 3.50%	3.74%	3/26/2019	3/26/2024	—		—		(1)		—
TCFI Aevex LLC	^*	(2)(3)(13)	Aerospace & Defense	L + 6.00%	7.00%	3/18/2020	3/18/2026	9,693		9,503		9,650		1.07
The Leaders Romans Bidco Limited (United Kingdom) Term Loan B	^	(2)(3)(7)	Banking, Finance, Insurance & Real Estate	L + 6.50%, 3.00% PIK	10.25%	7/23/2019	6/30/2024	£	20,740	25,406		28,078		3.12

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2020

(dollar amounts in thousands)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value(5)		% of Net Assets
The Leaders Romans Bidco Limited (United Kingdom) Term Loan C	^	(2)(3)(7)(13)	Banking, Finance, Insurance & Real Estate	L + 6.50%, 3.00% PIK	10.25%	7/23/2019	6/30/2024	£	3,816	$	4,748	$	5,727	0.64	%
Trump Card, LLC	^*	(2)(3)(13)	Transportation: Cargo	L + 5.50%	6.50%	6/26/2018	4/21/2022	7,594		7,572		7,444		0.83
TSB Purchaser, Inc.	^*	(2)(3)(13)	Media: Advertising, Printing & Publishing	L + 6.00%	7.00%	5/14/2018	5/14/2024	18,666		18,354		18,501		2.05
Turbo Buyer, Inc.	^*	(2)(3)(13)	Automotive	L + 5.25%	6.25%	12/2/2019	12/2/2025	24,323		23,766		24,567		2.73
Tweddle Group, Inc.	^	(2)(3)	Media: Advertising, Printing & Publishing	L + 4.50%	5.50%	9/17/2018	9/17/2023	1,825		1,808		1,678		0.19
U.S. Acute Care Solutions, LLC	*	(2)(3)	Healthcare & Pharmaceuticals	L + 6.00%	7.00%	2/21/2019	5/15/2021	4,242		4,235		3,956		0.44
Unifrutti Financing PLC (Cyprus)	^	(7)	Beverage, Food & Tobacco	7.50%, 1.00% PIK	8.50%	9/15/2019	9/15/2026	€	4,575	4,832		5,464		0.61
Unifrutti Financing PLC (Cyprus)	^	(7)	Beverage, Food & Tobacco	11.00% PIK	11.00%	10/22/2020	9/15/2026	€	647	724		754		0.08
US INFRA SVCS Buyer, LLC	^	(2)(3)(13)	Environmental Industries	L + 6.00%	7.00%	4/13/2020	4/13/2026	3,248		2,688		3,175		0.35
USLS Acquisition, Inc.	^*	(2)(3)(13)	Business Services	L + 5.75%	6.75%	11/30/2018	11/30/2024	21,447		21,124		19,981		2.22
USLS Acquisition, Inc.	^	(2)(3)(13)	Business Services	L + 5.75%	6.75%	9/3/2020	11/30/2024	—		(22)		—		—
VRC Companies, LLC	^*	(2)(3)(13)	Business Services	L + 6.50%	7.50%	3/31/2017	3/31/2023	33,286		33,048		33,286		3.69
Westfall Technik, Inc.	^*	(2)(3)(13)	Chemicals, Plastics & Rubber	L + 6.25%	7.25%	9/13/2018	9/13/2024	27,720		27,457		25,733		2.85
Wheel Pros, LLC	*	(2)(3)	Automotive	L + 5.25%	6.25%	11/18/2020	11/6/2027	18,750		18,286		18,390		2.04
YLG Holdings, Inc.	^	(2)(3)(13)	Consumer Services	L + 6.25%	7.25%	9/30/2020	11/1/2025	1,401		1,343		1,370		0.15
Zemax Software Holdings, LLC	*	(2)(3)(13)	Software	L + 5.75%	6.75%	6/25/2018	6/25/2024	6,285		6,216		6,119		0.68
Zenith Merger Sub, Inc.	^*	(2)(3)(13)	Business Services	L + 5.25%	6.25%	12/13/2017	12/13/2023	14,164		14,034		14,031		1.56
First Lien Debt Total										$	1,246,281	$	1,190,871	132.16	%
Second Lien Debt (15.6% of fair value)
AI Convoy S.A.R.L (United Kingdom)	^	(2)(3)(7)	Aerospace & Defense	L + 8.25%	9.25%	1/17/2020	1/17/2028	$	24,814	$	24,305	$	25,546	2.83	%
Aimbridge Acquisition Co., Inc.	^	(2)(3)	Hotel, Gaming & Leisure	L + 7.50%	7.65%	2/1/2019	2/1/2027	9,241		9,104		7,993		0.89
AQA Acquisition Holding, Inc.	^	(2)(3)	High Tech Industries	L + 8.00%	9.00%	10/1/2018	5/24/2024	39,000		38,741		39,000		4.33
Brave Parent Holdings, Inc.	^*	(2)(3)	Software	L + 7.50%	7.64%	10/3/2018	4/19/2026	19,062		18,711		19,062		2.11
Drilling Info Holdings, Inc.	^	(2)(3)	Energy: Oil & Gas	L + 8.25%	8.40%	2/11/2020	7/30/2026	18,600		18,145		18,228		2.02
Jazz Acquisition, Inc.	^	(2)(3)	Aerospace & Defense	L + 8.00%	8.15%	6/13/2019	6/18/2027	23,450		23,150		18,146		2.01
Outcomes Group Holdings, Inc.	^*	(2)(3)	Business Services	L + 7.50%	7.75%	10/23/2018	10/26/2026	3,462		3,455		3,462		0.38
PAI Holdco, Inc.	^	(2)(3)	Automotive	L + 6.25%, 2.00% PIK	9.25%	10/28/2020	10/28/2028	13,530		13,132		13,329		1.48
Pharmalogic Holdings Corp.	^	(2)(3)	Healthcare & Pharmaceuticals	L + 8.00%	9.00%	6/7/2018	12/11/2023	800		798		783		0.09
Quartz Holding Company	^	(2)(3)	Software	L + 8.00%	8.15%	4/2/2019	4/2/2027	7,048		6,930		6,994		0.78
Reladyne, Inc.	^	(2)(3)	Wholesale	L + 9.50%	10.50%	4/19/2018	1/21/2023	12,242		12,133		11,956		1.33

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2020

(dollar amounts in thousands)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value(5)		% of Net Assets
Stonegate Pub Company Bidco Limited (United Kingdom)	^	(2)(3)(7)	Beverage, Food & Tobacco	L + 8.50%	8.54%	3/12/2020	3/12/2028	£	20,000	24,729		21,902		2.43
Tank Holding Corp.		(2)(3)	Capital Equipment	L + 8.25%	8.40%	3/26/2019	3/26/2027	$	35,965	$	35,454	$	35,189	3.90	%
TruGreen Limited Partnership	^	(2)(3)	Consumer Services	L + 8.50%	9.25%	11/16/2020	11/2/2028	13,000		12,743		13,000		1.44
Ultimate Baked Goods MIDCO, LLC	^	(2)(3)	Beverage, Food & Tobacco	L + 8.00%	9.00%	8/9/2018	8/9/2026	2,820		2,776		2,689		0.30
Watchfire Enterprises, Inc.	^	(2)(3)	Media: Advertising, Printing & Publishing	L + 8.00%	9.00%	10/2/2013	10/2/2021	7,000		6,985		6,988		0.78
World 50, Inc.	^	(9)	Business Services	11.50%	11.50%	1/10/2020	1/9/2027	7,635		7,499		7,518		0.83
WP CPP Holdings, LLC	^*	(2)(3)	Aerospace & Defense	L + 7.75%	8.75%	7/18/2019	4/30/2026	39,500		39,172		32,738		3.63
Second Lien Debt Total										$	297,962	$	284,523	31.56	%


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Acquisition Date	Shares/ Units	Cost		Fair Value (5)		% of Net Assets
Equity Investments (1.9% of fair value)
Central Security Group, Inc.	^*	(6)	Consumer Services	10/16/2020	443	$	—	$	—	—	%
ANLG Holdings, LLC	^	(6)	Capital Equipment	6/22/2018	592	592		865		0.10
Avenu Holdings, LLC	^	(6)	Sovereign & Public Finance	9/28/2018	172	172		345		0.04
BK Intermediate Company, LLC	^	(6)	Healthcare & Pharmaceuticals	5/27/2020	288	288		209		0.02
Chartis Holding, LLC	^	(6)	Business Services	5/1/2019	433	433		571		0.06
CIP Revolution Holdings, LLC	^	(6)	Media: Advertising, Printing & Publishing	8/19/2016	318	318		245		0.03
Cority Software Inc. (Canada)	^	(6)	Software	7/2/2019	250	250		295		0.03
DecoPac, Inc.	^	(6)	Non-durable Consumer Goods	9/29/2017	1,500	1,500		1,664		0.18
Derm Growth Partners III, LLC	^	(6)	Healthcare & Pharmaceuticals	5/31/2016	1,000	1,000		—		—
GRO Sub Holdco, LLC	^	(6)	Healthcare & Pharmaceuticals	3/29/2018	500	—		—		—
K2 Insurance Services, LLC	^	(6)	Banking, Finance, Insurance & Real Estate	7/3/2019	433	433		676		0.07
Legacy.com, Inc.	^	(6)	High Tech Industries	3/20/2017	1,500	1,500		613		0.07
Mailgun Technologies, Inc.	^	(6)	High Tech Industries	3/26/2019	424	424		784		0.09
North Haven Goldfinch Topco, LLC	^	(6)	Containers, Packaging & Glass	6/18/2018	2,315	2,315		3,043		0.34
PPC Flexible Packaging, LLC	^	(6)	Containers, Packaging & Glass	2/1/2019	965	965		1,302		0.14
Paramit Corporation	^	(6)	Capital Equipment	6/17/2019	150	500		758		0.08
Rough Country, LLC	^	(6)	Durable Consumer Goods	5/25/2017	755	755		1,634		0.18
SiteLock Group Holdings, LLC	^	(6)	High Tech Industries	4/5/2018	446	446		526		0.06
T2 Systems Parent Corporation	^	(6)	Transportation: Consumer	9/28/2016	556	556		838		0.09
Tailwind HMT Holdings Corp.	^	(6)	Energy: Oil & Gas	11/17/2017	20	1,334		2,001		0.22

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2020

(dollar amounts in thousands)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Acquisition Date	Shares/ Units	Cost		Fair Value (5)		% of Net Assets
Tank Holding Corp.	^	(6)	Capital Equipment	3/26/2019	850	482		944		0.10
Titan DI Preferred Holdings, Inc.	^	(6)	Energy: Oil & Gas	2/11/2020	11,246	10,959		11,021		1.22
Turbo Buyer, Inc.	^	(6)	Automotive	12/2/2019	1,925	$	1,925	$	2,444	0.27	%
Tweddle Holdings, Inc.	^*	(6)	Media: Advertising, Printing & Publishing	9/17/2018	17	—		—		—
Unifrutti Financing PLC (Cyprus)	^	(6)	Beverage, Food & Tobacco	10/22/2020	—	556		575		0.06
Unifrutti Financing PLC (Cyprus)	^	(6)	Beverage, Food & Tobacco	10/22/2020	—	—		—		—
USLS Acquisition, Inc.	^	(6)	Business Services	11/30/2018	641	641		565		0.06
W50 Parent LLC	^	(6)	Business Services	1/10/2020	500	500		575		0.06
Zenith American Holding, Inc.	^	(6)	Business Services	12/13/2017	1,565	782		1,221		0.14
Zillow Topco LP	^	(6)	Software	6/25/2018	313	313		163		0.02
Equity Investments Total						$	29,939	$	33,877	3.73	%
Total investments—non-controlled/non-affiliated						$	1,574,182	$	1,509,271	167.45	%


Investments—non-controlled/affiliated		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value (5)		% of Net Assets
First Lien Debt (1.4% of fair value)
Direct Travel, Inc.	^*	(2)(3)(8)(12)	Hotel, Gaming & Leisure	L + 1.00%, 7.50% PIK	9.50%	10/14/2016	10/1/2023	$	36,711	$	36,340	$	24,949	2.77	%
Direct Travel, Inc.	^	(2)(3)(12)(13)	Hotel, Gaming & Leisure	L + 6.00%	7.00%	10/1/2020	10/1/2023	1,231		1,231		1,231		0.14
First Lien Debt Total										$	37,571	$	26,180	2.91	%


Investments—non-controlled/affiliated		Footnotes	Industry	Acquisition Date	Shares/ Units	Cost		Fair Value (5)		% of Net Assets
Equity Investments (0.00% of fair value)
Direct Travel, Inc.	^	(6)(12)	Hotel, Gaming & Leisure	10/1/2020	43	$	—	$	—	—	%
Equity Investments Total						$	—	$	—	—	%
Total investments—non-controlled/affiliated						$	37,571	$	26,180	2.91	%

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2020

(dollar amounts in thousands)


Investments—controlled/affiliated		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value (5)		% of Net Assets
First Lien Debt (0.4% of fair value)
SolAero Technologies Corp. (A1 Term Loan)	^	(2)(3)(8)(10)	Telecommunications	L + 8.00% (100% PIK)	9.00%	4/12/2019	10/12/2022	$	3,166	$	3,166	$	1,214	0.13	%
SolAero Technologies Corp. (A2 Term Loan)	^	(2)(3)(8)(10)	Telecommunications	L + 8.00% (100% PIK)	9.00%	4/12/2019	10/12/2022	8,707		8,707		3,338		0.37
SolAero Technologies Corp. (Priority Facilities)	^	(2)(3)(10)(13)	Telecommunications	L + 6.00%	7.00%	4/12/2019	10/12/2022	2,460		2,429		2,460		0.27
First Lien Debt Total										$	14,302	$	7,012	0.77	%


Investments—controlled/affiliated		Footnotes	Industry	Acquisition Date	Shares/ Units	Cost		Fair Value (5)		% of Net Assets
Equity Investments (0.00% of fair value)
SolAero Technologies Corp.	^	(6)(10)	Telecommunications	4/12/2019	3	$	2,815	$	—	—	%
Equity Investments Total						$	2,815	$	—	—	%


Investments—controlled/affiliated		Footnotes	Industry	Reference Rate & Spread(2)	Interest Rate(2)	Acquisition Date	Maturity Date	Par Amount/ LLC Interest		Cost		Fair Value(7)		% of Net Assets

Investment Funds (15.5% of fair value)
Middle Market Credit Fund II, LLC, Member's Interest	^	(10)(7)	Investment Funds	N/A	N/A	11/3/2020	12/31/2030	$	78,122	$	78,096	$	77,395	8.59	%
Middle Market Credit Fund, LLC, Subordinated Loan and Member's Interest	^	(10)(7)	Investment Funds	N/A	N/A	2/29/2016	3/1/2021	216,000		216,000		205,891		22.84
Middle Market Credit Fund, Mezzanine Loan	^	(2)(10)(7)(9)	Investment Funds	L + 9.00%	9.24%	6/30/2016	3/22/2021	—		—		—		—
Investment Fund Total										$	294,096	$	283,286	31.43	%
Total investments—controlled/affiliated										$	311,213	$	290,298	32.20	%
Total investments										$	1,922,966	$	1,825,749	202.56	%

** Par amount is denominated in USD ("$") unless otherwise noted, as denominated in Euro (“€”) or British Pound (“£”)

(1)Unless otherwise indicated, issuers of debt and equity investments held by the Company are domiciled in the United States. Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”), the Company would be deemed to “control” a portfolio company if the Company owned more than 25% of its outstanding voting securities and/or held the power to exercise control over the management or policies of the portfolio company. As of December 31, 2020, the Company does not “control” any of these portfolio companies.

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2020

(dollar amounts in thousands)

Under the Investment Company Act, the Company would be deemed an “affiliated person” of a portfolio company if the Company owns 5% or more of the portfolio company’s outstanding voting securities. As of December 31, 2020, the Company is not an “affiliated person” of any of these portfolio companies. Certain portfolio company investments are subject to contractual restrictions on sales.

(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR (“L”) or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, the Company has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2020. As of December 31, 2020, the reference rates for our variable rate loans were the 30-day LIBOR at 0.15%, the 90-day LIBOR at 0.25% and the 180-day LIBOR at 0.26%.

(3)Loan includes interest rate floor feature, which is generally 1.00%.

(5)Fair value is determined in good faith by or under the direction of the Board of Directors of the Company (see Note 2, Significant Accounting Policies, and Note 3, Fair Value Measurements), pursuant to the Company’s valuation policy. The fair value of all first lien and second lien debt investments, equity investments and the investment fund was determined using significant unobservable inputs.

(6)Security acquired in transaction exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act, unless otherwise noted. As of December 31, 2020, the aggregate fair value of these securities is $33,877, or 3.73% of the Company’s net assets.

(8)Loan was on non-accrual status as of December 31, 2020.

(9)Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company/investment fund.

(10)Under the Investment Company Act, the Company is deemed to be an “affiliated person” of and “control” this investment fund because the Company owns more than 25% of the investment fund’s outstanding voting securities and/or has the power to exercise control over management or policies of such investment fund. See Notes 5, Middle Market Credit Fund, LLC and 6. Middle Market Credit Fund II, LLC, for more details. Transactions related to investments in controlled affiliates for the year ended December 31, 2020, were as follows:


Investments—controlled/affiliated	Fair Value as of December 31, 2019		Additions/Purchases		Reductions/Sales/ Paydowns		Net Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Fair Value as of December 31, 2020		Dividend and Interest Income
Middle Market Credit Fund, LLC, Mezzanine Loan	$	93,000	$	63,500	$	(156,500)	$	—	$	—	$	—	$	3,049
Middle Market Credit Fund, LLC, Subordinated Loan and Member’s Interest	111,596		92,500		—		—		1,795		205,891		19,750
Middle Market Credit Fund II, LLC, Member’s Interest	—		78,096		—		—		(701)		77,395		1,446
Total investments—controlled/affiliated	$	204,596	$	234,096	$	(156,500)	$	—	$	1,094	$	283,286	$	24,245


Investments—controlled/affiliated	Fair Value as of December 31, 2019		Additions/Purchases		Reductions/Sales/ Paydowns		Net Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Fair Value as of December 31, 2020		Dividend and Interest Income
SolAero Technologies Corp. (Priority Term Loan)	9,612		—		(7,152)		—		—		2,460		52
SolAero Technologies Corp. (A1 Term Loan)	3,166		—		—		—		(1,952)		1,214		—
SolAero Technologies Corp. (A2 Term Loan)	8,707		—		—		—		(5,369)		3,338		—
Solaero Technology Corp. (Equity)	826		—		—		—		(826)		—		—
Total investments—controlled/affiliated	$	22,311	$	—	$	(7,152)	$	—	$	(8,147)	$	7,012	$	52

(11)In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among lenders as follows: Barnes & Noble, Inc. (1.83%), Southern Graphics, Inc. (1.71%), and Legacy.com, Inc (3.92%). Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.

(12)Under the Investment Company Act, the Company is deemed an “affiliated person” of this portfolio company because the Company owns 5% or more of the portfolio company’s outstanding voting securities. Transactions related to the portfolio company during the year ended December 31, 2020 were as follows:

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2020

(dollar amounts in thousands)


Investments—non-controlled/affiliated	Fair Value as of December 31, 2019		Additions/Purchases		Reductions/Sales/ Paydowns		Net Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Fair Value as of December 31, 2020		Dividend and Interest Income
Direct Travel, Inc.	$	36,757	$	—	$	(176)	$	1	$	(11,633)	$	24,949	$	—
Direct Travel, Inc.	—		1,231		—		—		—		1,231		18
Direct Travel, Inc. (Equity)	—		—		—		—		—		—		—
Total investments—non-controlled/affiliated	$	36,757	$	1,231	$	(176)	$	1	$	(11,633)	$	26,180	$	18

(13)As of December 31, 2020, the Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans:


Investments—non-controlled/non-affiliated	Type	Unused Fee	Par/ Principal Amount		Fair Value
First and Second Lien Debt—unfunded delayed draw and revolving term loans commitments
Advanced Web Technologies Holding Company	Delayed Draw	1.00%	$	2,299	$	(46)
Advanced Web Technologies Holding Company	Revolver	0.50	854		(17)
Airnov, Inc.	Revolver	0.50	1,250		1
American Physician Partners, LLC	Revolver	0.50	550		(29)
AMS Group HoldCo, LLC	Revolver	0.50	2,315		(29)
Analogic Corporation	Revolver	0.50	168		—
Applied Technical Services	Delayed Draw	1.00	132		(3)
Applied Technical Services	Revolver	0.50	53		(1)
Apptio, Inc.	Revolver	0.50	2,367		36
Captive Resources Midco, LLC	Revolver	0.50	2,143		15
Chartis Holding, LLC	Delayed Draw	1.00	4,406		2
Chartis Holding, LLC	Revolver	0.50	2,401		1
Chemical Computing Group ULC (Canada)	Revolver	0.50	29		—
Cobblestone Intermediate Holdco LLC	Delayed Draw	1.00	11		—
Comar Holding Company, LLC	Revolver	0.50	2,935		11
Comar Holding Company, LLC	Delayed Draw	1.00	4,655		17
Cority Software Inc.(Canada)	Revolver	0.50	3,000		21
DermaRite Industries, LLC	Revolver	0.50	3,103		(29)
Diligent Corporation	Delayed Draw	1.00	141		2
Diligent Corporation	Revolver	0.50	47		1
Direct Travel, Inc.	Delayed Draw	0.50	3,029		—
Ethos Veterinary Health LLC	Delayed Draw	1.00	2,696		(37)
EvolveIP, LLC	Delayed Draw	1.00	3,333		(4)
EvolveIP, LLC	Revolver	0.50	2,941		(3)
FWR Holding Corporation	Revolver	0.50	4,444		(380)
Helios Buyer, Inc.	Revolver	0.50	1,326		(27)
Helios Buyer, Inc.	Delayed Draw	—	4,672		(93)
Hercules Borrower LLC	Revolver	0.50	2,160		(54)

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2020

(dollar amounts in thousands)


Investments—non-controlled/non-affiliated	Type	Unused Fee	Par/ Principal Amount		Fair Value
Higginbotham Insurance Agency, Inc.	Delayed Draw	1.00	1,098		(16)
Individual FoodService Holdings, LLC	Revolver	0.50	436		(11)
Individual FoodService Holdings, LLC	Delayed Draw	1.00	645		(16)
Individual FoodService Holdings, LLC	Delayed Draw	1.00	165		(4)
Individual FoodService Holdings, LLC	Revolver	0.50	139		(3)
Innovative Business Services, LLC	Revolver	0.50	2,232		(41)
K2 Insurance Services, LLC	Revolver	0.50	2,290		—
K2 Insurance Services, LLC	Delayed Draw	1.00	1,571		—
Kaseya, Inc.	Delayed Draw	1.00	1,852		7
Kaseya, Inc.	Revolver	0.50	787		3
Lifelong Learner Holdings, LLC	Delayed Draw	1.00	1,690		(140)
Lifelong Learner Holdings, LLC	Revolver	0.50	1,377		(114)
Liqui-Box Holdings, Inc.	Revolver	0.50	1,262		(123)
Mailgun Technologies, Inc.	Revolver	0.50	1,342		(23)
National Technical Systems, Inc.	Revolver	0.50	835		(6)
NMI AcquisitionCo, Inc.	Revolver	0.50	1,280		(13)
Paramit Corporation	Delayed Draw	—	2,931		(59)
PF Growth Partners, LLC	Delayed Draw	1.00	823		(52)
PPC Flexible Packaging, LLC	Revolver	0.50	881		(3)
PricewaterhouseCoopers Public Sector LLP	Revolver	0.50	6,250		(32)
QW Holding Corporation	Delayed Draw	1.00	600		(29)
Redwood Services Group, LLC	Delayed Draw	3.63	4,639		18
RSC Acquisition, Inc.	Revolver	0.50	608		6
Sapphire Convention, Inc.	Revolver	0.50	3,655		(542)
Smile Doctors, LLC	Revolver	0.50	707		(14)
SolAero Technologies Corp. (Priority Facilities)	Revolver	0.50	2,068		—
SPay, Inc.	Revolver	0.50	655		(120)
Superior Health Linens, LLC	Revolver	0.50	1,667		(8)
T2 Systems, Inc.	Revolver	0.50	2,933		—
Tank Holding Corp.	Revolver	0.25	47		(1)
TCFI Aevex LLC	Delayed Draw	1.00	1,787		(7)
The Leaders Romans Bidco Limited (United Kingdom)	Delayed Draw	1.63	£	204	26
Trump Card, LLC	Revolver	0.50	635		(12)
TSB Purchaser, Inc.	Revolver	0.50	1,891		(15)
Turbo Buyer, Inc.	Revolver	0.50	2,151		20
US INFRA SVCS Buyer, LLC	Revolver	0.50	2,275		(5)
US INFRA SVCS Buyer, LLC	Delayed Draw	1.00	26,153		(60)
USLS Acquisition, Inc.	Revolver	0.50	1,418		(91)
USLS Acquisition, Inc.	Delayed Draw	0.50	591		—

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2020

(dollar amounts in thousands)


Investments—non-controlled/non-affiliated	Type	Unused Fee	Par/ Principal Amount		Fair Value
VRC Companies, LLC	Revolver	0.50	1,646		—
Westfall Technik, Inc.	Revolver	0.50	431		(30)
YLG Holdings, Inc.	Delayed Draw	1.00	596		(9)
Zemax Software Holdings, LLC	Revolver	0.50	642		(15)
Zenith Merger Sub, Inc.	Revolver	0.50	1,590		(12)
Zenith Merger Sub, Inc.	Delayed Draw	1.00	2,573		(19)
Total unfunded commitments			$	149,508	$	(2,210)

As of December 31, 2020, investments at fair value consisted of the following:


Type	Amortized Cost		Fair Value		% of Fair Value


First Lien Debt	$	1,298,154	$	1,224,063	67.0	%
Second Lien Debt	297,962		284,523		15.6
Equity Investments	32,754		33,877		1.9
Investment Funds	294,096		283,286		15.5
Total	$	1,922,966	$	1,825,749	100.0	%

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2020

(dollar amounts in thousands)

The rate type of debt investments at fair value as of December 31, 2020 was as follows:


Rate Type	Amortized Cost		Fair Value		% of Fair Value of First and Second Lien Debt
Floating Rate	$	1,583,061	$	1,494,850	99.1	%
Fixed Rate	13,055		13,736		0.9
Total	$	1,596,116	$	1,508,586	100.0	%

The industry composition of investments at fair value as of December 31, 2019 was as follows:


Industry	Amortized Cost		Fair Value		% of Fair Value
Aerospace & Defense	$	97,206	$	87,208	4.8	%
Automotive	57,109		58,730		3.2
Banking, Finance, Insurance & Real Estate	92,217		97,318		5.3
Beverage, Food & Tobacco	85,152		79,948		4.4
Business Services	134,316		132,526		7.3
Capital Equipment	47,446		48,134		2.6
Chemicals, Plastics & Rubber	27,457		25,733		1.4
Construction & Building	1,554		1,578		0.1
Consumer Services	35,103		34,017		1.9
Containers, Packaging & Glass	58,036		59,190		3.2
Durable Consumer Goods	10,302		10,992		0.6

Energy: Oil & Gas	40,135		40,109		2.2
Environmental Industries	63,536		62,238		3.4
Healthcare & Pharmaceuticals	154,547		118,486		6.5
High Tech Industries	205,975		205,709		11.3
Hotel, Gaming & Leisure	100,696		80,444		4.4
Investment Funds	294,096		283,286		15.5
Media: Advertising, Printing & Publishing	37,234		37,261		2.0

Media: Diversified & Production	19,636		19,600		1.1
Non-durable Consumer Goods	1,500		1,664		0.1
Retail	34,818		34,489		1.9
Software	87,026		85,727		4.7
Sovereign & Public Finance	37,055		37,621		2.1
Telecommunications	116,245		98,914		5.4
Transportation: Cargo	29,576		29,389		1.6
Transportation: Consumer	26,912		27,443		1.5
Wholesale	28,081		27,995		1.5
Total	$	1,922,966	$	1,825,749	100.0	%

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2020

(dollar amounts in thousands)

The geographical composition of investments at fair value as of December 31, 2020 was as follows:


Geography	Amortized Cost		Fair Value		% of Fair Value
Canada	$	24,206	$	24,658	1.4	%
Cyprus	6,112		6,793		0.4

Luxembourg	32,093		29,970		1.6
United Kingdom	88,885		90,112		4.9
United States	1,771,670		1,674,216		91.7
Total	$	1,922,966	$	1,825,749	100.0	%

The accompanying notes are an integral part of these consolidated financial statements.

TCG BDC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

As of June 30, 2021

(dollar amounts in thousands, except per share data)

1. ORGANIZATION

TCG BDC, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “TCG BDC” or the “Company”) is a Maryland corporation formed on February 8, 2012, and structured as an externally managed, non-diversified closed-end investment company. The Company is managed by its investment adviser, Carlyle Global Credit Investment Management L.L.C. (“CGCIM” or “Investment Adviser”), a wholly owned subsidiary of The Carlyle Group Inc. (formerly, The Carlyle Group L.P.). The Company has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”). In addition, the Company has elected to be treated, and intends to continue to comply with the requirements to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (together with the rules and regulations promulgated thereunder, the “Code”).

The Company’s investment objective is to generate current income and capital appreciation primarily through debt investments. The Company's core investment strategy focuses on lending to U.S. middle market companies, which the Company defines as companies with approximately $25 million to $100 million of earnings before interest, taxes, depreciation and amortization (“EBITDA”), which the Company believes is a useful proxy for cash flow. This core strategy is supplemented with complementary specialty lending and opportunistic investing strategies, which take advantage of the broad capabilities of Carlyle's Global Credit platform while offering risk diversifying portfolio benefits. The Company seeks to achieve its investment objective primarily through direct origination of secured debt instruments, including first lien senior secured loans (which may include stand-alone first lien loans, first lien/last out loans and “unitranche” loans) and second lien senior secured loans (collectively, “Middle Market Senior Loans”), with the balance of its assets invested in higher yielding investments (which may include unsecured debt, mezzanine debt and investments in equities). The Middle Market Senior Loans are generally made to private U.S. middle market companies that are, in many cases, controlled by private equity firms. Depending on market conditions, the Company expects that between 70% and 80% of the value of its assets will be invested in Middle Market Senior Loans. The Company expects that the composition of its portfolio will change over time given the Investment Adviser’s view on, among other things, the economic and credit environment (including with respect to interest rates) in which the Company is operating.

The Company invests primarily in loans to middle market companies whose debt, if rated, is rated below investment grade, and, if not rated, would likely be rated below investment grade if it were rated (that is, below BBB- or Baa3, which is often referred to as “junk”). Exposure to below investment grade instruments involves certain risks, including speculation with respect to the borrower’s capacity to pay interest and repay principal.

On May 2, 2013, the Company completed its initial closing of capital commitments (the “Initial Closing”) and subsequently commenced substantial investment operations. Effective March 15, 2017, the Company changed its name from “Carlyle GMS Finance, Inc.” to “TCG BDC, Inc.” On June 19, 2017, the Company closed its initial public offering (“IPO”), issuing 9,454,200 shares of its common stock (including shares issued pursuant to the exercise of the underwriters’ over-allotment option on July 5, 2017) at a public offering price of $18.50 per share. Net of underwriting costs, the Company received cash proceeds of $169,488. Shares of common stock of TCG BDC began trading on the Nasdaq Global Select Market under the symbol “CGBD” on June 14, 2017.

Until December 31, 2017, the Company was an “emerging growth company,” as that term is used in the Jumpstart Our Business Startups Act of 2012. As of June 30, 2017, the market value of the common stock held by non-affiliates exceeded $700,000. Accordingly, the Company ceased to be an emerging growth company as of December 31, 2017.

The Company is externally managed by the Investment Adviser, an investment adviser registered under the Investment Advisers Act of 1940, as amended. Carlyle Global Credit Administration L.L.C. (the “Administrator”) provides the administrative services necessary for the Company to operate. Both the Investment Adviser and the Administrator are wholly owned subsidiaries of Carlyle Investment Management L.L.C. (“CIM”), a subsidiary of The Carlyle Group Inc. “Carlyle” refers to The Carlyle Group Inc. and its affiliates and its consolidated subsidiaries (other than portfolio companies of its affiliated funds), a global investment firm publicly traded on the Nasdaq Global Select Market under the symbol “CG”. Refer to the sec.gov website for further information on Carlyle.

TCG BDC SPV LLC (the “SPV”) is a Delaware limited liability company that was formed on January 3, 2013. Prior to the termination of its senior secured credit facility, the SPV invested in first and second lien senior secured loans. The SPV is a wholly owned subsidiary of the Company and is consolidated in these consolidated financial statements commencing from the date of its formation, January 3, 2013. Effective March 15, 2017, the SPV changed its name from “Carlyle GMS Finance SPV LLC” to “TCG BDC SPV LLC”.

On June 26, 2015, the Company completed a $400,000 term debt securitization (the “2015-1 Debt Securitization”). The notes offered in the 2015-1 Debt Securitization (the “2015-1 Notes”) were issued by Carlyle Direct Lending CLO 2015-1R LLC (formerly known as Carlyle GMS Finance MM CLO 2015-1 LLC) (the “2015-1 Issuer”), a wholly owned and consolidated subsidiary of the Company. On August 30, 2018, the 2015-1 Issuer refinanced the 2015-1 Debt Securitization (the “2015-1 Debt Securitization Refinancing”) by redeeming in full the 2015-1 Notes and issuing new notes (the “2015-1R Notes”). The 2015-1R Notes are secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans. Refer to Note 8, Notes Payable, for details. The 2015-1 Issuer is consolidated in these consolidated financial statements commencing from the date of its formation, May 8, 2015.

On February 29, 2016, the Company and Credit Partners USA LLC (“Credit Partners”) entered into an amended and restated limited liability company agreement, which was subsequently amended on June 24, 2016 and February 22, 2021 (as amended, the “Limited Liability Company Agreement”) to co-manage Middle Market Credit Fund, LLC (“Credit Fund”). Credit Fund primarily invests in first lien loans of middle market companies. Credit Fund is managed by a six-member board of managers, on which the Company and Credit Partners each have equal representation. The Company and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $250,000 each. Refer to Note 5, Middle Market Credit Fund, LLC, for details.

On May 5, 2020, the Company issued and sold 2,000,000 shares of cumulative convertible preferred stock, par value $0.01 per share (the "Preferred Stock"), to an affiliate of Carlyle in a private placement at a price of $25 per share. See Note 10, Net Assets, for further information about the Preferred Stock.

On November 3, 2020, the Company and Cliffwater Corporate Lending Fund ("CCLF"), an investment vehicle managed by Cliffwater LLC, entered into a limited liability company agreement to co-manage Middle Market Credit Fund II, LLC ("Credit Fund II"). Credit Fund II invests in senior secured loans of middle market companies. Credit Fund II is managed by a four-member board of managers, on which the Company and CCLF each have equal representation. The Company and CCLF have approximately 84.13% and 15.87% economic ownership of Credit Fund II, respectively. The Company contributed certain senior secured debt investments with an aggregate principal balance of approximately $250 million to Credit Fund II in exchange for its 84.13% economic interest and gross cash proceeds of approximately $170 million. See Note 6, Middle Market Credit Fund II, LLC, to these consolidated financial statements for details.

As a BDC, the Company is required to comply with certain regulatory requirements. As part of these requirements, the Company must not acquire any assets other than “qualifying assets” specified in the Investment Company Act unless, at the time the acquisition is made, at least 70% of its total assets are qualifying assets (with certain limited exceptions).

To qualify as a RIC, the Company must, among other things, meet certain source-of-income and asset diversification requirements and timely distribute to its stockholders generally at least 90% of its investment company taxable income, as defined by the Code, for each year. Pursuant to this election, the Company generally does not have to pay corporate level taxes on any income that it distributes to stockholders, provided that the Company satisfies those requirements.

2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The Company is an investment company for the purposes of accounting and financial reporting in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification (“ASC”) Topic 946, Financial Services—Investment Companies (“ASC 946”). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, the SPV and the 2015-1 Issuer. All significant intercompany balances and transactions have been eliminated. U.S. GAAP for an investment company requires investments to be recorded at fair value. The carrying value for all other assets and liabilities approximates their fair value.

The interim financial statements have been prepared in accordance with U.S. GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6 and 10 of Regulation S-X. Accordingly, certain disclosures accompanying the annual consolidated financial statements prepared in accordance with U.S. GAAP are omitted. In the opinion of management, all adjustments considered necessary for the fair presentation of consolidated financial statements for the interim periods presented have been included. These adjustments are of a normal, recurring nature. This Form 10-Q should be read in conjunction with the Company’s annual report on Form 10-K for the year ended December 31, 2020. The results of operations for the three and six month periods ended June 30, 2021 are not necessarily indicative of the operating results to be expected for the full year.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management’s estimates are based on historical experiences and other factors, including expectations of future events that management believes to be reasonable under the circumstances. It also requires management to exercise judgment in the process of applying the Company’s accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on base management and incentive fees involve a higher degree of judgment and complexity and these assumptions and estimates may be significant to the consolidated financial statements. Actual results could differ from these estimates and such differences could be material.

Investments

Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment using the specific identification method without regard to unrealized appreciation or depreciation previously recognized, and includes investments charged off during the period, net of recoveries. Net change in unrealized appreciation or depreciation on investments as presented in the accompanying Consolidated Statements of Operations reflects the net change in the fair value of investments, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized. See Note 3 for further information about fair value measurements.

Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash consist of demand deposits and highly liquid investments (e.g., money market funds, U.S. treasury notes) with original maturities of three months or less. Cash equivalents are carried at amortized cost, which approximates fair value. The Company’s cash, cash equivalents and restricted cash are held with two large financial institutions and cash held in such financial institutions may, at times, exceed the Federal Deposit Insurance Corporation insured limit. As of June 30, 2021 and December 31, 2020, the Company had restricted cash balances of $25,434 and $16,184, respectively, which represent amounts that are collected by trustees who have been appointed as custodians of the assets securing certain of the Company's financing transactions, and held for payment of interest expense and principal on the outstanding borrowings, or reinvestment into new assets.

Revenue Recognition

Interest from Investments and Realized Gain/Loss on Investments

Interest income is recorded on an accrual basis and includes the accretion of discounts and amortization of premiums. Discounts from and premiums to par value on debt investments purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of debt investments represents the original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion of discounts and amortization of premiums, if any. At time of exit, the realized gain or loss on an investment is the difference between the amortized cost at time of exit and the cash received at exit using the specific identification method.

The Company has loans in its portfolio that contain payment-in-kind (“PIK”) provisions. PIK represents interest that is accrued and recorded as interest income at the contractual rates, increases the loan principal on the respective capitalization dates, and is generally due at maturity. Such income is included in interest income in the Consolidated Statements of Operations. As of June 30, 2021 and December 31, 2020, the fair value of the loans in the portfolio with PIK provisions was $237,271 and $240,861, respectively, which represents approximately 12.7% and 13.2% of total investments at fair value, respectively. For the three month and six month periods ended June 30, 2021, the Company earned $2,318 and $4,443 in PIK income, respectively. For the three month and six month periods ended June 30, 2020, the Company earned $1,202 and $1,845

in PIK income, respectively. PIK income is included in interest income in the accompanying Consolidated Statements of Operations.

Dividend Income

Dividend income from the investment funds, Credit Fund and Credit Fund II, is recorded on the record date for the investment fund to the extent that such amounts are payable by the investment funds and are expected to be collected.

Other Income

Other income may include income such as consent, waiver, amendment, unused, underwriting, arranger and prepayment fees associated with the Company’s investment activities as well as any fees for managerial assistance services rendered by the Company to the portfolio companies. Such fees are recognized as income when earned or the services are rendered. The Company may receive fees for guaranteeing the outstanding debt of a portfolio company. Such fees are amortized into other income over the life of the guarantee. The unamortized amount, if any, is included in other assets in the accompanying Consolidated Statements of Assets and Liabilities. For the three month and six month periods ended June 30, 2021, the Company earned $2,407 and $3,877 in other income, respectively. For the three month and six month periods ended June 30, 2020, the Company earned $3,547 and $5,891 in other income, respectively.

Non-Accrual Income

Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest are paid current and, in management’s judgment, are likely to remain current. Management may determine not to place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection. As of June 30, 2021 and December 31, 2020, the fair value of the loans in the portfolio on non-accrual status was $61,691 and $58,136, respectively. The remaining first and second lien debt investments were performing and current on their interest payments as of June 30, 2021 and December 31, 2020.

The Facilities, Senior Notes, and 2015-1R Notes – Related Costs, Expenses and Deferred Financing Costs

The Company entered into a senior secured revolving credit facility (as amended, the "Credit Facility") and the SPV entered into a senior secured credit facility (as amended, the "SPV Credit Facility", and together with the Credit Facility, the "Facilities"), which was terminated on December 11, 2020. Interest expense and unused commitment fees on the Facilities are recorded on an accrual basis. Unused commitment fees are included in credit facility fees in the accompanying Consolidated Statements of Operations.

On December 30, 2019, the Company closed a private offering of $115.0 million in aggregate principal amount of 4.750% Senior Unsecured Notes due December 31, 2024 (the "2019 Notes"). On December 11, 2020, the Company issued $75.0 million in aggregate principal amount of 4.500% Senior Unsecured Notes due December 31, 2024 (the "2020 Notes", and together with the 2019 Notes, the "Senior Notes"). The Facilities, the 2015-1R Notes and the Senior Notes are recorded at carrying value, which approximates fair value.

Deferred financing costs include capitalized expenses related to the closing or amendments of the Facilities. Amortization of deferred financing costs for each credit facility is computed on the straight-line basis over the respective term of each credit facility. The unamortized balance of such costs is included in deferred financing costs in the accompanying Consolidated Statements of Assets and Liabilities. The amortization of such costs is included in credit facility fees in the accompanying Consolidated Statements of Operations.

Debt issuance costs include capitalized expenses including structuring and arrangement fees related to the offering of the 2015-1R Notes and Senior Notes. Amortization of debt issuance costs for the notes is computed on the effective yield method over the term of the notes. The unamortized balance of such costs is presented as a direct deduction to the carrying amount of the notes in the accompanying Consolidated Statements of Assets and Liabilities. The amortization of such costs is included in interest expense in the accompanying Consolidated Statements of Operations.

Income Taxes

For federal income tax purposes, the Company has elected to be treated as a RIC under the Code, and intends to make the required distributions to its stockholders as specified therein. In order to qualify as a RIC, the Company must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then the Company is generally required to pay income taxes only on the portion of its taxable income and gains it does not distribute.

The minimum distribution requirements applicable to RICs require the Company to distribute to its stockholders at least 90% of its investment company taxable income (“ICTI”), as defined by the Code, each year, although depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of current year distributions into the next tax year. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.

In addition, based on the excise distribution requirements, the Company is subject to a 4% nondeductible federal excise tax on undistributed income unless the Company distributes in a timely manner an amount at least equal to the sum of (1) 98% of its ordinary income for each calendar year, (2) 98.2% of capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any income realized, but not distributed, in the preceding year. For this purpose, however, any ordinary income or capital gain net income retained by the Company that is subject to corporate income tax is considered to have been distributed.

The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more likely than not” to be sustained by the applicable tax authority. The SPVs and the 2015-1 Issuer are disregarded entities for tax purposes and are consolidated with the tax return of the Company. All penalties and interest associated with income taxes, if any, are included in income tax expense. For the three month and six month periods ended June 30, 2021, the Company incurred $139 and $263 in excise tax expense, respectively. For the three month and six month periods ended June 30, 2020, the Company incurred $100 and $152 in excise tax expense, respectively.

Dividends and Distributions to Common Stockholders

To the extent that the Company has taxable income available, the Company intends to make quarterly distributions to its common stockholders. Dividends and distributions to common stockholders are recorded on the record date. The amount to be distributed is determined by the Board of Directors each quarter and is generally based upon the taxable earnings estimated by management and available cash. Net realized capital gains, if any, are generally distributed at least annually, although the Company may decide to retain such capital gains for investment.

Prior to July 5, 2017, the Company had an “opt in” dividend reinvestment plan. Effective on July 5, 2017, the Company converted the “opt in” dividend reinvestment plan to an “opt out” dividend reinvestment plan that provides for reinvestment of dividends and other distributions on behalf of the stockholders, other than those stockholders who have “opted out” of the plan. As a result of adopting the plan, if the Board of Directors authorizes, and the Company declares, a cash dividend or distribution, the stockholders who have not elected to “opt out” of the dividend reinvestment plan will have their cash dividends or distributions automatically reinvested in additional shares of the Company’s common stock, rather than receiving cash. Each registered stockholder may elect to have such stockholder’s dividends and distributions distributed in cash rather than participate in the plan. For any registered stockholder that does not so elect, distributions on such stockholder’s shares will be reinvested by State Street Bank and Trust Company, the Company’s plan administrator, in additional shares. The number of shares to be issued to the stockholder will be determined based on the total dollar amount of the cash distribution payable, net of applicable withholding taxes. The Company intends to use primarily newly issued shares to implement the plan so long as the market value per share is equal to or greater than the net asset value per share on the relevant valuation date. If the market value per share is less than the net asset value per share on the relevant valuation date, the plan administrator would implement the plan through the purchase of common stock on behalf of participants in the open market, unless the Company instructs the plan administrator otherwise.

Functional Translations

The functional currency of the Company is the U.S. Dollar. Investments are generally made in the local currency of the country in which the investments are domiciled and are translated into U.S. Dollars with foreign currency translation gains or losses recorded within net change in unrealized appreciation (depreciation) on investments in the accompanying Consolidated Statements of Operations. Foreign currency translation gains and losses on non-investment assets and liabilities are separately reflected in the accompanying Consolidated Statements of Operations.

Earnings Per Common Share

The Company computes earnings per common share in accordance with ASC 260, Earnings Per Share ("ASC 260"). Basic earnings per common share is calculated by dividing the net increase (decrease) in net assets resulting from operations attributable to common stock by the weighted average number of shares of common stock outstanding. Diluted earnings per common share reflects the assumed conversion of all dilutive securities.

Recent Accounting Standards Updates

In May 2020, the SEC adopted rule amendments that will impact the requirement of investment companies, including BDCs, to disclose the financial statements of certain of their portfolio companies. Under Rules 3-09 and 4-08(g) of Regulation S-X, investment companies are required to include separate financial statements or summary financial information, respectively, in their periodic reports for any portfolio company that meets the definition of "significant subsidiary." The rule amendments adopted in May 2020 create a new definition of "significant subsidiary", as set forth in Rule 1-02(w)(2) of Regulation S-X under the Securities Act, which are applicable only to investment companies. This new definition modifies the investment test and income test, and eliminates the asset test, and is intended to more accurately capture those portfolio companies that are more likely to materially impact the financial condition of an investment company. The rule amendments are effective on January 1, 2021, but voluntary compliance is permitted in advance of the effective date. The Company adopted the rule amendments for the quarter ended September 30, 2020, which did not have a material impact on the Company's consolidated financial statements.

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848),” which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), which expanded the scope of Topic 848 to include derivative instruments impacted by discounting transition. ASU 2020-04 and ASU 2021-01 are effective for all entities through December 31, 2022. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2022, except for hedging transactions as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The Company is currently evaluating the impact of the adoption of ASU 2020-04 and 2021-01 on its consolidated financial statements.

3. FAIR VALUE MEASUREMENTS

The Company applies fair value accounting in accordance with the terms of FASB ASC Topic 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the amount that would be exchanged to sell an asset or transfer a liability in an orderly transfer between market participants at the measurement date. The Company values securities/instruments traded in active markets on the measurement date by multiplying the closing price of such traded securities/instruments by the quantity of shares or amount of the instrument held. The Company may also obtain quotes with respect to certain of its investments, such as its securities/instruments traded in active markets and its liquid securities/instruments that are not traded in active markets, from pricing services, brokers, or counterparties (i.e., “consensus pricing”). When doing so, the Company determines whether the quote obtained is sufficient according to U.S. GAAP to determine the fair value of the security. The Company may use the quote obtained or alternative pricing sources may be utilized including valuation techniques typically utilized for illiquid securities/instruments.

non-traded investment other than Credit Fund is reviewed by a third-party valuation firm at least once on a rolling twelve month basis) including a review of management’s preliminary valuation and conclusion on fair value; (iv) the Audit Committee of the Board of Directors (the “Audit Committee”) reviews the assessments of the Investment Adviser and the third-party valuation firm and provides the Board of Directors with any recommendations with respect to changes to the fair value of each investment in the portfolio; and (v) the Board of Directors discusses the valuation recommendations of the Audit Committee and determines the fair value of each investment in the portfolio in good faith based on the input of the Investment Adviser and, where applicable, the third-party valuation firm.

All factors that might materially impact the value of an investment are considered, including, but not limited to the assessment of the following factors, as relevant:

•the nature and realizable value of any collateral;

•call features, put features and other relevant terms of debt;

•the portfolio company’s leverage and ability to make payments;

•the portfolio company’s public or private credit rating;

•the portfolio company’s actual and expected earnings and discounted cash flow;

•prevailing interest rates and spreads for similar securities and expected volatility in future interest rates;

•the markets in which the portfolio company does business and recent economic and/or market events; and

•comparisons to comparable transactions and publicly traded securities.

Investment performance data utilized are the most recently available financial statements and compliance certificate received from the portfolio companies as of the measurement date which in many cases may reflect a lag in information.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is reasonably possible that the difference could be material.

In addition, changes in the market environment and other events that may occur over the life of the investments may cause the realized gains or losses on investments to be different from the net change in unrealized appreciation or depreciation currently reflected in the consolidated financial statements as of June 30, 2021 and December 31, 2020.

U.S. GAAP establishes a hierarchical disclosure framework which ranks the level of observability of market price inputs used in measuring investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and state of the marketplace, including the existence and transparency of transactions between market participants. Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets generally have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value.

Investments measured and reported at fair value are classified and disclosed based on the observability of inputs used in determination of fair values, as follows:

•Level 1—inputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date. Financial instruments in in this category generally include unrestricted securities, including equities and derivatives, listed in active markets. The Company does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price.

•Level 2—inputs to the valuation methodology are either directly or indirectly observable as of the reporting date and are those other than quoted prices in active markets. Financial instruments in this category generally 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 in this category generally include investments in privately-held entities, collateralized loan obligations, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Investment Adviser’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. Investments in Credit Fund and Credit Fund II are valued based on the legal form of investment. For those structured through LLC membership interest, the practical expedient, or net asset value method, is used. For those structured through subordinated notes, a discounted cash flow method is used.

Transfers between levels, if any, are recognized at the beginning of the quarter in which the transfers occur. For the three month and six month periods ended June 30, 2021 and 2020, there were no transfers between levels.

The following tables summarize the Company’s investments measured at fair value on a recurring basis by the above fair value hierarchy levels as of June 30, 2021 and December 31, 2020:


	June 30, 2021
	Level 1		Level 2		Level 3		Total
Assets
First Lien Debt	$	—	$	—	$	1,246,018	$	1,246,018
Second Lien Debt	—		—		313,130		313,130
Equity Investments	—		—		53,379		53,379
Investment Funds
Mezzanine Loan	—		—		—		—
Subordinated Loan and Member's Interest	—		—		181,343		181,343
Total	$	—	$	—	$	1,793,870	$	1,793,870
Investments measured at net asset value (1)							78,441
Total							$	1,872,311


	December 31, 2020
	Level 1		Level 2		Level 3		Total
Assets
First Lien Debt	$	—	$	—	$	1,224,063	$	1,224,063
Second Lien Debt	—		—		284,523		284,523
Equity Investments	—		—		33,877		33,877
Investment Funds
Mezzanine Loan	—		—		—		—
Subordinated Loan and Member's Interest	—		—		205,891		205,891
Total	$	—	$	—	$	1,748,354	$	1,748,354
Investments measured at net asset value (1)							77,395
Total							$	1,825,749

(1) Amount represents the Company's investment in Credit Fund II. The Company, as a practical expedient, estimates the fair value of this investment using the net asset value of the Company's member's interest in Credit Fund II. As such, the fair value of the Company's investment in Credit Fund II has not been categorized within the fair value hierarchy.

The changes in the Company’s investments at fair value for which the Company has used Level 3 inputs to determine fair value and net change in unrealized appreciation (depreciation) included in earnings for Level 3 investments still held are as follows:


	Financial Assets
	For the three month period ended June 30, 2021
	First Lien Debt		Second Lien Debt		Equity Investments		Investment Fund - Subordinated Loan and Member's Interest		Total
Balance, beginning of period	$	1,226,653	$	299,322	$	35,030	$	202,695	$	1,763,700
Purchases	181,413		12,129		19,435		—		212,977
Sales	(78,641)		(4,875)		(3,817)		—		(87,333)
Paydowns	(94,391)		(865)		—		(23,000)		(118,256)
Accretion of discount	1,792		211		—		—		2,003
Net realized gains (losses)	636		(16)		1,325		—		1,945
Net change in unrealized appreciation (depreciation)	8,556		7,224		1,406		1,648		18,834
Balance, end of period	$	1,246,018	$	313,130	$	53,379	$	181,343	$	1,793,870
Net change in unrealized appreciation (depreciation) included in earnings related to investments still held at the reporting date included in net change in unrealized appreciation (depreciation) on investments on the Consolidated Statements of Operations	$	7,204	$	7,224	$	1,463	$	1,648	$	17,539



	Financial Assets
	For the six month period ended June 30, 2021
	First Lien Debt		Second Lien Debt		Equity Investments		Investment Fund - Subordinated Loan and Member's Interest		Total
Balance, beginning of period	$	1,224,063	$	284,523	$	33,877	$	205,891	$	1,748,354
Purchases	278,558		63,313		20,033		—		361,904
Sales	(154,395)		(4,875)		(5,209)		—		(164,479)
Paydowns	(126,315)		(42,396)		—		(23,000)		(191,711)
Accretion of discount	3,373		644		12		—		4,029
Net realized gains (losses)	1,628		(16)		2,006		—		3,618
Net change in unrealized appreciation (depreciation)	19,106		11,937		2,660		(1,548)		32,155
Balance, end of period	$	1,246,018	$	313,130	$	53,379	$	181,343	$	1,793,870
Net change in unrealized appreciation (depreciation) included in earnings related to investments still held at the reporting date included in net change in unrealized appreciation (depreciation) on investments on the Consolidated Statements of Operations	$	17,233	$	12,181	$	2,904	$	(1,548)	$	30,770


	Financial Assets
	For the three month period ended June 30, 2020
	First Lien Debt		Second Lien Debt		Equity Investments		Investment Fund - Mezzanine Loan		Investment Fund - Subordinated Loan and Member's Interest		Total
Balance, beginning of period	$	1,534,765	$	275,055	$	29,323	$	—	$	185,134	$	2,024,277
Purchases	60,710		367		518		—		—		61,595
Sales	(192,219)		(2,760)		—		—		—		(194,979)
Paydowns	(19,283)		—		—		—		—		(19,283)
Accretion of discount	1,299		166		8		—		—		1,473
Net realized gains (losses)	(47,571)		(213)		—		—		—		(47,784)
Net change in unrealized appreciation (depreciation)	57,212		6,008		1,907		—		17,129		82,256
Balance, end of period	$	1,394,913	$	278,623	$	31,756	$	—	$	202,263	$	1,907,555
Net change in unrealized appreciation (depreciation) included in earnings related to investments still held at the reporting date included in net change in unrealized appreciation (depreciation) on investments on the Consolidated Statements of Operations	$	14,967	$	6,008	$	1,907	$	—	$	17,129	$	40,011



	Financial Assets
	For the six month period ended June 30, 2020
	First Lien Debt		Second Lien Debt		Equity Investments		Investment Fund - Mezzanine Loan		Investment Fund - Subordinated Loan and Member's Interest		Total
Balance, beginning of period	$	1,663,138	$	234,532	$	21,698	$	93,000	$	111,596	$	2,123,964
Purchases	137,033		89,776		10,718		63,500		92,500		393,527
Sales	(236,279)		(2,760)		—		(156,500)		—		(395,539)
Paydowns	(89,412)		(15,232)		(1,024)		—		—		(105,668)
Accretion of discount	3,505		546		8		—		—		4,059
Net realized gains (losses)	(49,625)		(213)		357		—		—		(49,481)
Net change in unrealized appreciation (depreciation)	(33,447)		(28,026)		(1)		—		(1,833)		(63,307)
Balance, end of period	$	1,394,913	$	278,623	$	31,756	$	—	$	202,263	$	1,907,555
Net change in unrealized appreciation (depreciation) included in earnings related to investments still held as of the reporting date included in net change in unrealized appreciation (depreciation) on investments on the Consolidated Statements of Operations	$	(69,701)	$	(27,766)	$	(1)	$	—	$	(1,834)	$	(99,302)

The Company generally uses the following framework when determining the fair value of investments that are categorized as Level 3:

Investments in debt securities are initially evaluated to determine whether the enterprise value of the portfolio company is greater than the applicable debt. The enterprise value of the portfolio company is estimated using a market approach and an income approach. The market approach utilizes market value (EBITDA) multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The Company carefully considers numerous factors when selecting the appropriate companies whose multiples are used to value its portfolio companies. These factors include, but are not limited to, the type of organization, similarity to the business being valued, relevant risk factors, as well as size, profitability and growth expectations. The income approach typically uses a discounted cash flow analysis of the portfolio company.

Investments in debt securities that do not have sufficient coverage through the enterprise value analysis are valued based on an expected probability of default and discount recovery analysis.

Investments in debt securities with sufficient coverage through the enterprise value analysis are generally valued using a discounted cash flow analysis of the underlying security. Projected cash flows in the discounted cash flow typically represent the relevant security’s contractual interest, fees and principal payments plus the assumption of full principal recovery at the security’s expected maturity date. The discount rate to be used is determined using an average of two market-based methodologies. Investments in debt securities may also be valued using consensus pricing.

Investments in equities are generally valued using a market approach and/or an income approach. The market approach utilizes market value (EBITDA) multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The income approach typically uses a discounted cash flow analysis of the portfolio company.

Investments in Credit Fund’s mezzanine loan are valued using collateral analysis with the expected recovery rate of principal and interest. Investments in Credit Fund’s subordinated loan and member’s interest are valued using discounted cash flow analysis with the expected discount rate, default rate and recovery rate of principal and interest.

The following tables summarize the quantitative information related to the significant unobservable inputs for Level 3 instruments which are carried at fair value as of June 30, 2021 and December 31, 2020:


	Fair Value as of June 30, 2021		Valuation Techniques	Significant Unobservable Inputs	Range
					Low		High		Weighted Average
Investments in First Lien Debt	$	1,020,998	Discounted Cash Flow	Discount Rate	3.79	%	15.27	%	7.87	%
	163,752		Consensus Pricing	Indicative Quotes	92.50		100.00		97.73
	61,268		Income Approach	Discount Rate	11.44	%	12.79	%	12.06	%
			Market Approach	Comparable Multiple	3.87x		7.78x		7.14x
Total First Lien Debt	1,246,018
Investments in Second Lien Debt	228,409		Discounted Cash Flow	Discount Rate	6.31	%	14.41	%	9.50	%
	84,721		Consensus Pricing	Indicative Quotes	97.50		98.00		97.59

Total Second Lien Debt	313,130
Investments in Equity	53,379		Income Approach	Discount Rate	7.22	%	11.44	%	8.66	%
			Market Approach	Comparable Multiple	7.46x		16.43x		10.72x
Total Equity Investments	53,379
Investments in Investment Fund

Subordinated Loan and Member's Interest	181,343		Discounted Cash Flow	Discount Rate	8.50	%	8.50	%	8.50	%
			Discounted Cash Flow	Default Rate	3.00	%	3.00	%	3.00	%
			Discounted Cash Flow	Recovery Rate	65.00	%	65.00	%	65.00	%
Total Investments in Investment Fund	181,343
Total Level 3 Investments	$	1,793,870


	Fair Value as of December 31, 2020		Valuation Techniques	Significant Unobservable Inputs	Range
					Low		High		Weighted Average
Investments in First Lien Debt	$	879,159	Discounted Cash Flow	Discount Rate	3.96	%	16.60	%	8.80	%
	287,191		Consensus Pricing	Indicative Quotes	89.11		100.00		97.70
	57,713		Income Approach	Discount Rate	12.80	%	14.70	%	13.50	%
			Market Approach	Comparable Multiple	3.17x		6.99x		6.43x
Total First Lien Debt	1,224,063
Investments in Second Lien Debt	238,785		Discounted Cash Flow	Discount Rate	7.14	%	15.27	%	9.67	%
	45,738		Consensus Pricing	Indicative Quotes	82.88		100.00		87.75
Total Second Lien Debt	284,523
Investments in Equity	33,877		Income Approach	Discount Rate	7.22	%	12.80	%	8.84	%
			Market Approach	Comparable Multiple	6.99x		16.43x		10.50x
Total Equity Investments	33,877
Investment in Investment Fund
Mezzanine Loan	—		Collateral Analysis	Recovery Rate	100.00	%	100.00	%	100.00	%
Subordinated Loan and Member's Interest	205,891		Discounted Cash Flow	Discount Rate	8.50	%	8.50	%	8.50	%
			Discounted Cash Flow	Default Rate	3.00	%	3.00	%	3.00	%
			Discounted Cash Flow	Recovery Rate	65.00	%	65.00	%	65.00	%
Total Investments in Investment Fund	205,891
Total Level 3 Investments	$	1,748,354

The significant unobservable inputs used in the fair value measurement of the Company’s investments in first and second lien debt securities are discount rates, indicative quotes and comparable EBITDA multiples. Significant increases in discount rates in isolation would result in a significantly lower fair value measurement. Significant decreases in indicative quotes or comparable EBITDA multiples in isolation may result in a significantly lower fair value measurement.

The significant unobservable inputs used in the fair value measurement of the Company’s investments in equities are discount rates and comparable EBITDA multiples. Significant increases in discount rates in isolation would result in a significantly lower fair value measurement. Significant decreases in comparable EBITDA multiples in isolation would result in a significantly lower fair value measurement.

The significant unobservable input used in the fair value measurement of the Company’s investment in the mezzanine loan of Credit Fund is the recovery rate of principal and interest. A significant decrease in the recovery rate would result in a significantly lower fair value measurement.

The significant unobservable inputs used in the fair value measurement of the Company’s investments in the subordinated loan and member’s interest of Credit Fund are the discount rate, default rate and recovery rate. Significant increases in the discount rate or default rate in isolation would result in a significantly lower fair value measurement. A significant decrease in the recovery rate in isolation would result in a significantly lower fair value measurement.

Financial instruments disclosed but not carried at fair value

The following table presents the carrying value and fair value of the Company’s secured borrowings and senior unsecured notes disclosed but not carried at fair value as of June 30, 2021 and December 31, 2020:


	June 30, 2021				December 31, 2020
	Carrying Value		Fair Value		Carrying Value		Fair Value
Secured borrowings	$	365,060	$	365,060	$	347,949	$	347,949
2019 Notes	115,000		116,250		115,000		116,250
2020 Notes	75,000		75,000		75,000		75,000
Total	$	555,060	$	556,310	$	537,949	$	539,199

The carrying values of the secured borrowings and Senior Notes approximate their respective fair values and are categorized as Level 3 within the hierarchy. Secured borrowings are valued generally using discounted cash flow analysis. The

significant unobservable inputs used in the fair value measurement of the Company’s secured borrowings and senior unsecured notes are discount rates. Significant increases in discount rates would result in a significantly lower fair value measurement.

The following table represents the carrying values (before debt issuance costs) and fair values of the Company’s 2015-1R Notes disclosed but not carried at fair value as of June 30, 2021 and December 31, 2020:


	June 30, 2021				December 31, 2020
	Carrying Value		Fair Value		Carrying Value		Fair Value
Aaa/AAA Class A-1-1-R Notes	$	234,800	$	234,823	$	234,800	$	230,996
Aaa/AAA Class A-1-2-R Notes	50,000		50,005		50,000		49,645
Aaa/AAA Class A-1-3-R Notes	25,000		25,015		25,000		25,017
AA Class A-2-R Notes	66,000		66,000		66,000		64,895
A Class B Notes	46,400		46,400		46,400		45,291
BBB- Class C Notes	27,000		26,843		27,000		24,592
Total	$	449,200	$	449,086	$	449,200	$	440,436

The fair value determination of the Company’s notes payable was based on the market quotation(s) received from broker/dealer(s). These fair value measurements were based on significant inputs not observable and thus represent Level 3 measurements as defined in the accounting guidance for fair value measurement.

The carrying value of other financial assets and liabilities approximates their fair value based on the short term nature of these items.

4. RELATED PARTY TRANSACTIONS

Investment Advisory Agreement

On April 3, 2013, the Company’s Board of Directors, including a majority of the directors who are not “interested persons” as defined in Section 2(a)(19) of the Investment Company Act (the “Independent Directors”), approved an investment advisory agreement (the “Original Investment Advisory Agreement”) between the Company and the Investment Adviser in accordance with, and on the basis of an evaluation satisfactory to such directors as required by, Section 15(c) of the Investment Company Act. The Original Investment Advisory Agreement was amended on September 15, 2017 and August 6, 2018 after receipt of requisite Board and stockholders' approvals, as applicable (as amended, the “Investment Advisory Agreement”). Unless terminated earlier, the Investment Advisory Agreement renews automatically for successive annual periods, provided that such continuance is specifically approved at least annually by the vote of the Company's Board of Directors and by the vote of a majority of the Independent Directors. On May 26, 2021, the Company’s Board of Directors, including a majority of the Independent Directors, approved the continuance of the Company’s Investment Advisory Agreement with the Adviser for an additional one year term. Pursuant to relief granted by the SEC in light of the COVID-19 pandemic (the "Order") and a determination by the Board of Directors that reliance on the order was appropriate due to circumstances related to the current or potential side-effects of COVID-19, the May 26 meeting was held by video- and telephone-conference. The Investment Advisory Agreement will automatically terminate in the event of an assignment and may be terminated by either party without penalty upon at least 60 days’ written notice to the other party. Subject to the overall supervision of the Board of Directors, the Adviser provides investment advisory services to the Company. For providing these services, the Adviser receives fees from the Company consisting of two components—a base management fee and an incentive fee.

The base management fee has been calculated and payable quarterly in arrears at an annual rate of 1.50% of the average value of the gross assets at the end of the two most recently completed fiscal quarters; provided, however, effective July 1, 2018, the base management fee is calculated at an annual rate of 1.00% of the average value of the gross assets as of the end of the two most recently completed calendar quarters that exceeds the product of (A) 200% and (B) the average value of the Company’s net asset value at the end of the two most recently completed calendar quarters. The base management fee will be appropriately adjusted for any share issuances or repurchases during such fiscal quarter and the base management fees for any partial month or quarter will be pro-rated. The Company’s gross assets exclude any cash and cash equivalents and include assets acquired through the incurrence of debt from the use of leverage. For purposes of this calculation, cash and cash equivalents include any temporary investments in cash-equivalents, U.S. government securities and other high quality investment grade debt investments that mature in 12 months or less from the date of investment.

The incentive fee has two parts. The first part is calculated and payable quarterly in arrears based on the pre-incentive fee net investment income for the immediately preceding calendar quarter. The second part is determined and payable in arrears based on capital gains as of the end of each calendar year.

Pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the operating expenses accrued for the quarter (including the base management fee, expenses payable under the administration agreement, and any interest expense or fees on any credit facilities or outstanding debt and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature, accrued income that the Company has not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.

Pre-incentive fee net investment income, expressed as a rate of return on the value of the Company’s net assets at the end of the immediately preceding calendar quarter, has been compared to a “hurdle rate” of 1.50% per quarter (6% annualized) or a “catch-up rate” of 1.82% per quarter (7.28% annualized), as applicable.

Pursuant to the Investment Advisory Agreement, the Company pays its Investment Adviser an incentive fee with respect to its pre-incentive fee net investment income in each calendar quarter as follows:

•no incentive fee based on pre-incentive fee net investment income in any calendar quarter in which its pre-incentive fee net investment income does not exceed the hurdle rate of 1.50%;

•100% of pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 1.82% in any calendar quarter (7.28% annualized). The Company refers to this portion of the pre-incentive fee net investment income (which exceeds the hurdle rate but is less than 1.82%) as the “catch-up.” The “catch-up” is meant to provide the Investment Adviser with approximately 17.5% of the Company’s pre-incentive fee net investment income as if a hurdle rate did not apply if this net investment income exceeds 1.82% in any calendar quarter; and

•17.5% of the amount of pre-incentive fee net investment income, if any, that exceeds 1.82% in any calendar quarter (7.28% annualized) will be payable to the Investment Adviser. This reflects that once the hurdle rate is reached and the catch-up is achieved, 17.5% of all pre-incentive fee net investment income thereafter is allocated to the Investment Adviser.

The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), and equals 17.5% of realized capital gains, if any, on a cumulative basis from inception through the date of determination, computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation, less the aggregate amount of any previously paid capital gain incentive fees, provided that, the incentive fee determined at the end of the first calendar year of operations may be calculated for a period of shorter than twelve calendar months to take into account any realized capital gains computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation.

Below is a summary of the base management fees and incentive fees incurred during the three month and six month periods ended June 30, 2021 and 2020.


	For the three month periods ended				For the six month periods ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
Base management fees	$	6,991	$	7,065	$	13,791	$	14,451
Incentive fees on pre-incentive fee net investment income	4,420		4,667		8,677		9,753
Realized capital gains incentive fees	—		—		—		—
Accrued capital gains incentive fees	—		—		—		—
Total capital gains incentive fees	—		—		—		—
Total incentive fees	4,420		4,667		8,677		9,753
Total base management fees and incentive fees	$	11,411	$	11,732	$	22,468	$	24,204

Accrued capital gains incentive fees are based upon the cumulative net realized and unrealized appreciation (depreciation) from inception. Accordingly, the accrual for any capital gains incentive fee under U.S. GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual.

As of June 30, 2021 and December 31, 2020, $11,391 and $11,549, respectively, was included in base management and incentive fees payable in the accompanying Consolidated Statements of Assets and Liabilities.

On April 3, 2013, the Investment Adviser entered into a personnel agreement with The Carlyle Group Employee Co., L.L.C. (“Carlyle Employee Co.”), an affiliate of the Investment Adviser, pursuant to which Carlyle Employee Co. provides the Investment Adviser with access to investment professionals.

Administration Agreement

On April 3, 2013, the Company's Board of Directors approved the Administration Agreement. Pursuant to the Administration Agreement, the Administrator provides services and receives reimbursements equal to an amount that reimburses the Administrator for its costs and expenses and the Company’s allocable portion of overhead incurred by the Administrator in performing its obligations under the Administration Agreement, including the Company’s allocable portion of the compensation paid to or compensatory distributions received by the Company’s officers (including the Chief Compliance Officer and Treasurer) and respective staff who provide services to the Company, operations staff who provide services to the Company, and any internal audit staff, to the extent internal audit performs a role in the Company’s Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), internal control assessment. Reimbursement under the Administration Agreement occurs quarterly in arrears.

Unless terminated earlier, the Administration Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by a majority vote of the outstanding voting securities of the Company and (ii) the vote of a majority of the Company’s Independent Directors. On May 26, 2021, the Company's Board of Directors, including a majority of the Independent Directors, approved the continuance of the Administration Agreement for a one-year period. The Administration Agreement may not be assigned by a party without the consent of the other party and may be terminated by either party without penalty upon at least 60 days’ written notice to the other party.

For the three month periods ended June 30, 2021 and 2020, the Company incurred $375 and $266, respectively, in fees under the Administration Agreement. For the six month periods ended June 30, 2021 and 2020, the Company incurred $657 and $372, respectively, in fees under the Administration Agreement. These fees are included in administrative service fees in the accompanying Consolidated Statements of Operations. As of June 30, 2021 and December 31, 2020, $373 and $85, respectively, was unpaid and included in administrative service fees payable in the accompanying Consolidated Statements of Assets and Liabilities.

Sub-Administration Agreements

On April 3, 2013, the Administrator entered into a sub-administration agreement with Carlyle Employee Co. (the “Carlyle Sub-Administration Agreement”). Pursuant to the Carlyle Sub-Administration Agreement, Carlyle Employee Co. provides the Administrator with access to personnel.

On April 3, 2013, the Administrator entered into a sub-administration agreement with State Street Bank and Trust Company (“State Street” and, such agreement, the “State Street Sub-Administration Agreement” and, together with the Carlyle Sub-Administration Agreement, the “Sub-Administration Agreements”). Unless terminated earlier, the State Street Sub-Administration Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by the vote of a majority of the outstanding voting securities of the Company and (ii) the vote of a majority of the Company’s Independent Directors. On May 26, 2021, the Company's Board of Directors, including a majority of the Independent Directors, approved the continuance of the State Street Sub-Administration Agreement for a one-year period. The State Street Sub-Administration Agreement may be terminated upon at least 60 days’ written notice and without penalty by the vote of a majority of the outstanding securities of the Company, or by the vote of the Board of Directors or by either party to the State Street Sub-Administration Agreement.

For the three month periods ended June 30, 2021 and 2020, the Company incurred $165 and $266, respectively, in fees under the State Street Sub-Administration Agreement. For the six month periods ended June 30, 2021 and 2020, the Company incurred $335 and $372, respectively, in fees under the Administration Agreement. These fees are included in other general and administrative expenses in the accompanying Consolidated Statements of Operations. As of June 30, 2021 and December 31, 2020, $669 and $334, respectively, was unpaid and included in other accrued expenses and liabilities in the accompanying Consolidated Statements of Assets and Liabilities.

License Agreement

The Company has entered into a royalty free license agreement with CIM, which wholly owns our Adviser and is a wholly owned subsidiary of Carlyle, pursuant to which CIM has granted the Company a non-exclusive, revocable and non-transferable license to use the name and mark “Carlyle.”

Board of Directors

The Company’s Board of Directors currently consists of seven members, five of whom are Independent Directors. The Board of Directors has established an Audit Committee, a Pricing Committee, a Nominating and Governance Committee and a Compensation Committee, the members of each of which consist entirely of the Company’s Independent Directors. The Board of Directors may establish additional committees in the future. For the three month periods ended June 30, 2021 and 2020, the Company incurred $150 and $121, respectively, in fees and expenses associated with its Independent Directors' services on the Company's Board of Directors and its committees. For the six month periods ended June 30, 2021 and 2020, the Company incurred $266 and $217, respectively, in fees and expenses associated with its Independent Directors' services on the Company's Board of Directors and its committees. As of June 30, 2021 and December 31, 2020, $143 and $96, respectively, in fees or expenses associated with its Independent Directors were payable, and included in other accrued expenses and liabilities in the accompanying Consolidated Statements of Assets and Liabilities.

Transactions with Investment Funds

For the three and six month periods ended June 30, 2021, the Company sold 2 and 3 investments, respectively, to Credit Fund for proceeds of $27,094 and $50,685, respectively, and realized gain (loss) of $459 and $687, respectively. For the three and six month periods ended June 30, 2020, the Company sold 3 and 4 investments, respectively, to Credit Fund for proceeds of $43,635 and $62,754, respectively, and realized gain (loss) of $(2,553) and $(2,289), respectively. See Note 5, Middle Market Credit Fund, LLC, for further information about Credit Fund. For the three and six month periods ended June 30, 2021, the Company sold 4 and 5 investments, respectively, to Credit Fund II for proceeds of $14,645 and $19,764, respectively, and realized gain (loss) of $69 and $81, respectively.

Cumulative Convertible Preferred Stock

On May 5, 2020, the Company issued and sold 2,000,000 shares of the Preferred Stock to an affiliate of Carlyle in a private placement at a price of $25 per share. For the three and six month periods ended June 30, 2021, the Company declared and paid a dividend on the Preferred Stock of $875 and $1,750, respectively. For the period from May 5, 2020 through June 30,

2020, the Company declared and paid a dividend on the Preferred Stock of $554. See Note 10, Net Assets, for further information about the Preferred Stock.

5. MIDDLE MARKET CREDIT FUND, LLC

Overview

On February 29, 2016, the Company and Credit Partners entered into an amended and restated limited liability company agreement, which was subsequently amended and restated on June 24, 2016 and February 22, 2021 (as amended, the "Limited Liability Company Agreement") to co-manage Credit Fund, a Delaware limited liability company that is not consolidated in the Company’s consolidated financial statements. Credit Fund primarily invests in first lien loans of middle market companies. Credit Fund is managed by a six-member board of managers, on which the Company and Credit Partners each have equal representation. Establishing a quorum for Credit Fund’s board of managers requires at least four members to be present at a meeting, including at least two of the Company’s representatives and two of Credit Partners’ representatives. The Company and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $250,000 each. Funding of such commitments generally requires the approval of the board of Credit Fund, including the board members appointed by the Company. By virtue of its membership interest, the Company and Credit Partners each indirectly bear an allocable share of all expenses and other obligations of Credit Fund.

Together with Credit Partners, the Company co-invests through Credit Fund. Investment opportunities for Credit Fund are sourced primarily by the Company and its affiliates. Portfolio and investment decisions with respect to Credit Fund must be unanimously approved by a quorum of Credit Fund’s investment committee consisting of an equal number of representatives of the Company and Credit Partners. Therefore, although the Company owns more than 25% of the voting securities of Credit Fund, the Company does not believe that it has control over Credit Fund (other than for purposes of the Investment Company Act). Middle Market Credit Fund SPV, LLC (the “Credit Fund Sub”), MMCF CLO 2017-1 LLC (the “2017-1 Issuer”), MMCF CLO 2019-2, LLC (the "2019-2 Issuer", formerly known as MMCF Warehouse, LLC (the "Credit Fund Warehouse")) and MMCF Warehouse II, LLC (the "Credit Fund Warehouse II"), each a Delaware limited liability company, were formed on April 5, 2016, October 6, 2017, November 26, 2018 and August 16, 2019, respectively. Credit Fund Sub, the 2017-1 Issuer, the 2019-2 Issuer and Credit Fund Warehouse II are wholly owned subsidiaries of Credit Fund and are consolidated in Credit Fund’s consolidated financial statements commencing from the date of their respective formations. In December 2020, the 2017-1 Notes, as defined below, were redeemed in full and notes outstanding were repaid in full. Credit Fund Sub, the 2019-2 Issuer and Credit Fund Warehouse II primarily invest in first lien loans of middle market companies. Credit Fund and its wholly owned subsidiaries follow the same Internal Risk Rating System as the Company. Refer to "Debt" below for discussions regarding the credit facilities entered into and then notes issued by such wholly-owned subsidiaries.

Credit Fund, the Company and Credit Partners entered into an administration agreement with Carlyle Global Credit Administration L.L.C., the administrative agent of Credit Fund (in such capacity, the “Administrative Agent”), pursuant to which the Administrative Agent is delegated certain administrative and non-discretionary functions, is authorized to enter into sub-administration agreements at the expense of Credit Fund with the approval of the board of managers of Credit Fund, and is reimbursed by Credit Fund for its costs and expenses and Credit Fund’s allocable portion of overhead incurred by the Administrative Agent in performing its obligations thereunder.

Selected Financial Data

Since inception of Credit Fund and through June 30, 2021 and December 31, 2020, the Company and Credit Partners each made capital contributions of $1 and $1 in members’ equity, respectively, and $216,000 and $216,000 in subordinated loans, respectively, to Credit Fund. On May 25, 2021, the Company and Credit Partners received a return of capital of $46,000, of which the Company received $23,000. Below is certain summarized consolidated financial information for Credit Fund as of June 30, 2021 and December 31, 2020.


	As of
	June 30, 2021		December 31, 2020
	(unaudited)
Selected Consolidated Balance Sheet Information
ASSETS
Investments, at fair value (amortized cost of $1,107,222 and $1,080,538, respectively)	$	1,097,258	$	1,056,381
Cash, cash equivalents and restricted cash (1)	61,112		119,796
Other assets	10,722		7,553
Total assets	$	1,169,092	$	1,183,730
LIABILITIES AND MEMBERS’ EQUITY
Secured borrowings	$	597,284	$	514,261
Notes payable, net of unamortized debt issuance costs of $1,463 and $1,559, respectively	154,358		253,933


Other liabilities	48,888		15,543
Subordinated loans and members’ equity (2)	368,562		399,993
Liabilities and members’ equity	$	1,169,092	$	1,183,730

(1) As of June 30, 2021 and December 31, 2020, $19,099 and $83,574, respectively, of Credit Fund's cash and cash equivalents was restricted.

(2) As of June 30, 2021 and December 31, 2020, the fair value of Company's ownership interest in the subordinated loans and members’ equity was $181,343 and $205,891, respectively.


	For the three month periods ended				For the six month periods ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
	(unaudited)				(unaudited)
Selected Consolidated Statement of Operations Information:
Total investment income	$	17,722	$	19,821	$	33,827	$	41,413
Expenses
Interest and credit facility expenses	5,321		9,552		10,736		23,479
Other expenses	554		590		1,022		1,093
Total expenses	5,875		10,142		11,758		24,572
Net investment income (loss)	11,847		9,679		22,069		16,841
Net realized gain (loss) on investments	(115)		—		(1,693)		—
Net change in unrealized appreciation (depreciation) on investments	695		44,828		14,193		(41,465)
Net increase (decrease) resulting from operations	$	12,427	$	54,507	$	34,569	$	(24,624)

Below is a summary of Credit Fund’s portfolio, followed by a listing of the loans in Credit Fund’s portfolio as of June 30, 2021 and December 31, 2020:


	As of
	June 30, 2021			December 31, 2020
Senior secured loans (1)	$	1,111,965		$	1,084,491
Weighted average yields of senior secured loans based on amortized cost (2)	6.09		%	6.03		%
Weighted average yields of senior secured loans based on fair value (2)	6.12		%	6.15		%
Number of portfolio companies in Credit Fund	53			54
Average amount per portfolio company (1)	$	20,980		$	20,083
Number of loans on non-accrual status	—			—
Fair value of loans on non-accrual status	$	—		$	—
Percentage of portfolio at floating interest rates (3)(4)	97.6		%	97.7		%
Percentage of portfolio at fixed interest rates (4)	2.4		%	2.3		%
Fair value of loans with PIK provisions	$	26,602		$	24,113
Percentage of portfolio with PIK provisions (4)	2.4		%	2.3		%

(1)At par/principal amount.

(2)Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of June 30, 2021 and December 31, 2020. Weighted average yield on debt and income producing securities at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of original issue discount ("OID") and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at fair value included in such securities. Weighted average yield on debt and income producing securities at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at amortized cost included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above.

(3)Floating rate debt investments are generally subject to interest rate floors.

(4)Percentages based on fair value.


Consolidated Schedule of Investments as of June 30, 2021
Investments (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Maturity Date	Par/ Principal Amount		Amortized Cost (4)		Fair Value (5)
First Lien Debt (97.8% of fair value)
ACR Group Borrower, LLC	^+	(2)(3)(6)	Aerospace & Defense	L + 4.50%	5.50%	3/31/2028	$	34,650	$	34,041	$	34,020
Acrisure, LLC	\#	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 3.50%	3.60%	2/15/2027	25,505		25,479		25,207
Alpha Packaging Holdings, Inc.	+\	(2)(3)	Containers, Packaging & Glass	L + 6.00%	7.00%	5/12/2022	15,867		15,866		15,866
AmeriLife Holdings LLC	#	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 4.00%	4.10%	3/18/2027	9,902		9,881		9,902
Analogic Corporation	^+	(2)(3)(6)	Capital Equipment	L + 5.25%	6.25%	6/22/2024	18,762		18,745		18,575
Anchor Packaging, Inc.	+#	(2)(3)	Containers, Packaging & Glass	L + 4.00%	4.10%	7/18/2026	24,597		24,501		24,597
API Technologies Corp.	+\	(2)(3)	Aerospace & Defense	L + 4.25%	4.35%	5/9/2026	14,700		14,644		14,556
Aptean, Inc.	^+#	(2)(3)	Software	L + 4.25%	4.35%	4/23/2026	12,219		12,170		12,132
Astra Acquisition Corp.	+#	(2)(3)	Software	L + 4.75%	5.50%	2/28/2027	28,711		28,347		28,343
Avalign Technologies, Inc.	+\	(2)(3)	Healthcare & Pharmaceuticals	L + 4.50%	4.65%	12/22/2025	14,517		14,417		14,419
Avenu Holdings, LLC	+	(2)(3)	Sovereign & Public Finance	L + 5.25%	6.25%	9/28/2024	23,470		23,470		23,470
Big Ass Fans, LLC	+\#	(2)(3)	Capital Equipment	L + 3.75%	4.75%	5/21/2024	13,694		13,648		13,698
BK Medical Holding Company, Inc.	^+	(2)(3)(6)	Healthcare & Pharmaceuticals	L + 5.25%	6.25%	6/22/2024	24,043		23,859		23,950
Chemical Computing Group ULC (Canada)	^+	(2)(3)(7)(6)	Software	L + 4.50%	5.50%	8/30/2024	13,983		13,426		13,849
Chudy Group, LLC	^+	(2)(3)(6)	Healthcare & Pharmaceuticals	L + 5.75%	6.75%	6/30/2027	33,103		32,503		32,503
Clearent Newco, LLC	^+	(2)(3)(6)	High Tech Industries	L + 6.50%	7.50%	3/20/2025	4,059		4,059		4,059
Clearent Newco, LLC	+\	(2)(3)	High Tech Industries	L + 5.50%	6.50%	3/20/2025	29,360		29,138		29,360
DBI Holding LLC	^		Transportation: Cargo	14.00% PIK	14.00%	3/26/2023	2,538		2,538		2,538
Diligent Corporation	^+	(2)(3)(6)	Telecommunications	L + 6.25%	7.25%	8/4/2025	8,639		8,386		8,836
Divisions Holding Corporation	+	(2)(3)	Business Services	L + 4.75%	5.50%	5/27/2028	25,000		24,752		24,750
DTI Holdco, Inc.	+\	(2)(3)	High Tech Industries	L + 4.75%	5.75%	9/30/2023	18,592		18,525		17,863
Eliassen Group, LLC	+\	(2)(3)	Business Services	L + 4.25%	4.35%	11/5/2024	9,939		9,905		9,890
EPS Nass Parent, Inc.	^+	(2)(3)(6)	Utilities: Electric	L + 5.75%	6.75%	4/19/2028	31,356		30,634		30,761
EvolveIP, LLC	^+	(2)(3)(6)	Telecommunications	L + 5.75%	6.75%	6/7/2023	19,700		19,667		19,700
Exactech, Inc.	+\#	(2)(3)	Healthcare & Pharmaceuticals	L + 3.75%	4.75%	2/14/2025	21,418		21,318		21,107
Excel Fitness Holdings, Inc.	+#	(2)(3)	Hotel, Gaming & Leisure	L + 5.25%	6.25%	10/7/2025	24,625		24,441		23,867
Frontline Technologies Holdings, LLC	+	(2)(3)	Software	L + 5.75%	6.75%	9/18/2023	14,812		14,231		14,945
Golden West Packaging Group LLC	+\	(2)(3)	Containers, Packaging & Glass	L + 5.25%	6.25%	6/20/2023	27,305		27,218		27,273
HMT Holding Inc.	^+\	(2)(3)(6)	Energy: Oil & Gas	L + 5.00%	6.00%	11/17/2023	32,653		32,351		32,047
Integrity Marketing Acquisition, LLC	+	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 6.25%	7.25%	8/27/2025	11,929		11,822		11,750
Jensen Hughes, Inc.	+\	(2)(3)(6)	Utilities: Electric	L + 4.50%	5.50%	3/22/2024	35,950		35,873		35,314
K2 Insurance Services, LLC	+	(2)(3)(6)	Banking, Finance, Insurance & Real Estate	L + 5.00%	6.00%	7/1/2024	12,994		12,994		12,955
KAMC Holdings, Inc.	+#	(2)(3)	Energy: Electricity	L + 4.00%	4.14%	8/14/2026	13,755		13,703		13,205
KBP Investments, LLC	^+	(2)(3)(6)	Beverage, Food & Tobacco	L + 5.00%	5.75%	5/25/2027	19,277		18,830		18,778
Marco Technologies, LLC	+\	(2)(3)	Media: Advertising, Printing & Publishing	L + 4.00%	5.00%	10/30/2023	7,333		7,315		7,333


Consolidated Schedule of Investments as of June 30, 2021
Investments (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Maturity Date	Par/ Principal Amount		Amortized Cost (4)		Fair Value (5)
Mold-Rite Plastics, LLC	+\	(2)(3)	Chemicals, Plastics & Rubber	L + 4.25%	5.25%	6/14/2022	$	14,445	$	14,436	$	14,445
Newport Group Holdings II, Inc.	+\#	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 3.50%	3.65%	9/13/2025	23,355		23,184		23,341
Odyssey Logistics & Technology Corp.	+\#	(2)(3)	Transportation: Cargo	L + 4.00%	5.00%	10/12/2024	25,016		24,946		24,779
Output Services Group	^+\	(2)(3)	Media: Advertising, Printing & Publishing	L + 4.50%	5.50%	3/27/2024	19,322		19,288		16,423
Premise Health Holding Corp.	+\#	(2)(3)	Healthcare & Pharmaceuticals	L + 3.50%	3.70%	7/10/2025	13,515		13,473		13,476
Propel Insurance Agency, LLC	^+\	(2)(3)(6)	Banking, Finance, Insurance & Real Estate	L + 5.00%	6.00%	6/1/2024	43,409		42,944		42,934
Q Holding Company	+\#	(2)(3)	Automotive	L + 5.00%	6.00%	12/31/2023	21,625		21,509		21,221
QW Holding Corporation	^+	(2)(3)(6)	Environmental Industries	L + 6.25%	7.25%	8/31/2024	13,631		13,377		12,989
Radiology Partners, Inc.	+\#	(2)(3)	Healthcare & Pharmaceuticals	L + 4.25%	4.33%	7/9/2025	27,686		27,592		27,664
RevSpring Inc.	+\#	(2)(3)	Media: Advertising, Printing & Publishing	L + 4.00%	4.15%	10/11/2025	29,299		29,133		29,197
Situs Group Holdings Corporation	+\	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 4.75%	4.85%	6/28/2025	14,706		14,624		14,597
Striper Buyer, LLC	+	(2)(3)	Containers, Packaging & Glass	L + 5.50%	6.25%	12/30/2026	14,925		14,783		14,925
T2 Systems, Inc.	^+	(2)(3)(6)	Transportation: Consumer	L + 6.75%	7.75%	9/28/2022	28,969		28,700		28,969
Turbo Buyer, Inc.	+	(2)(3)(6)	Automotive	L + 6.00%	7.00%	12/2/2025	14,031		14,031		13,732
U.S. TelePacific Holdings Corp.	+\	(2)(3)	Telecommunications	L + 6.00%	7.00%	5/2/2023	6,660		6,637		6,157
VRC Companies, LLC	^+	(2)(3)	Business Services	L + 5.50%	6.25%	6/29/2027	25,000		24,550		24,550
Water Holdings Acquisition LLC	^+	(2)(3)(6)	Utilities: Water	L + 5.25%	6.25%	12/18/2026	29,280		28,547		28,845
Welocalize, Inc.	+	(2)(3)(6)	Business Services	L + 4.75%	5.75%	12/23/2024	35,500		35,121		35,052
WRE Holding Corp.	^+	(2)(3)(6)	Environmental Industries	L + 5.50%	6.50%	1/3/2023	8,570		8,547		8,480














First Lien Debt Total									$	1,078,119	$	1,073,194
Second Lien Debt (2.2% of fair value)
DBI Holding, LLC	^		Transportation: Cargo	10.00% PIK	10.00%	2/1/2026	$	24,064	$	23,739	$	24,064

Second Lien Debt Total									$	23,739	$	24,064
Equity Investments (0.0% of fair value)
DBI Holding, LLC	^		Transportation: Cargo				2,961		$	—	$	—
DBI Holding, LLC	^		Transportation: Cargo				13,996		5,364		—
Equity Investments Total									$	5,364	$	—
Total Investments									$	1,107,222	$	1,097,258

^ Denotes that all or a portion of the assets are owned by Credit Fund. Credit Fund has entered into a revolving credit facility with the Company (the "Credit Fund Facility"). Accordingly, such assets are not available to creditors of Credit Fund Sub, the 2019-2 Issuer or Credit Fund Warehouse II.

+ Denotes that all or a portion of the assets are owned by Credit Fund Sub. Credit Fund Sub has entered into a revolving credit facility (the “Credit Fund Sub Facility”). The lenders of the Credit Fund Sub Facility have a first lien security interest in substantially all of the assets of Credit Fund Sub. Accordingly, such assets are not available to creditors of Credit Fund, the 2019-2 Issuer or Credit Fund Warehouse II.

\ Denotes that all or a portion of the assets are owned by the 2019-2 Issuer and secure the notes issued in connection with a $399,900 term debt securitization completed by Credit Fund on May 21, 2019 (the “2019-2 Debt Securitization”). Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub, or Credit Fund Warehouse II.

# Denotes that all or a portion of the assets are owned by the Credit Fund Warehouse II. Credit Fund Warehouse II has entered into a revolving credit facility (the "Credit Fund Warehouse II Facility"). The lenders of the Credit Fund Warehouse II Facility have a first lien security interest in substantially all of the assets of the Credit Fund Warehouse II. Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub, or the 2019-2 Issuer.

(1)Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States. As of June 30, 2021, the geographical composition of investments as a percentage of fair value was 1.3% in Canada and 98.7% in the United States. Certain portfolio company investments are subject to contractual restrictions on sales.

Fund has indicated the reference rate used and provided the spread and the interest rate in effect as of June 30, 2021. As of June 30, 2021, the reference rates for Credit Fund’s variable rate loans were the 30-day LIBOR at 0.10%, the 90-day LIBOR at 0.15% and the 180-day LIBOR at 0.16%.

(3)Loan includes interest rate floor feature, which is generally 1.00%.

(5)Fair value is determined in good faith by or under the direction of the board of managers of Credit Fund, pursuant to Credit Fund’s valuation policy, with the fair value of all investments determined using significant unobservable inputs, which is substantially similar to the valuation policy of the Company provided in Note 3, Fair Value Measurements.

(6)As of June 30, 2021, Credit Fund and Credit Fund Sub had the following unfunded commitments to fund delayed draw and revolving senior secured loans:


First Lien Debt – unfunded delayed draw and revolving term loans commitments	Type	Unused Fee	Par/ Principal Amount		Fair Value
ACR Group Borrower, LLC	Revolver	0.38%	$	7,350	$	(110)
Analogic Corporation	Revolver	0.50	1,975		(18)
BK Medical Holding Company, Inc.	Revolver	0.50	2,609		(9)
Chemical Computing Group ULC (Canada)	Revolver	0.50	873		(8)
Chudy Group, LLC	Delayed Draw	1.00	5,517		(83)
Chudy Group, LLC	Revolver	0.50	1,379		(21)
Clearent Newco, LLC	Delayed Draw	1.00	2,543		—
Diligent Corporation	Revolver	0.50	703		12
Diligent Corporation	Delayed Draw	1.00	2,109		36
EPS Nass Parent, Inc.	Revolver	0.50	2,508		(40)
EPS Nass Parent, Inc.	Delayed Draw	1.00	3,136		(50)
EvolveIP, LLC	Delayed Draw	1.00	1,904		—
EvolveIP, LLC	Revolver	0.50	1,680		—
HMT Holding Inc.	Revolver	0.50	6,173		(96)
Jensen Hughes, Inc.	Revolver	0.50	409		(7)
Jensen Hughes, Inc.	Delayed Draw	1.00	544		(9)
K2 Insurance Services, LLC	Revolver	0.50	1,170		(3)
K2 Insurance Services, LLC	Delayed Draw	1.00	803		(2)
KBP Investments, LLC	Delayed Draw	1.00	20,190		(252)
KBP Investments, LLC	Delayed Draw	1.00	503		(6)
Propel Insurance Agency, LLC	Revolver	0.50	2,381		(24)
Propel Insurance Agency, LLC	Delayed Draw	1.00	1,733		(17)
QW Holding Corporation	Delayed Draw	1.00	9,338		(219)
QW Holding Corporation	Revolver	0.50	4,344		(102)
T2 Systems, Inc.	Revolver	0.50	1,955		—
Turbo Buyer, Inc.	Revolver	0.50	933		(19)
Water Holdings Acquisition LLC	Revolver	0.50	5,263		(57)
Water Holdings Acquisition LLC	Delayed Draw	1.00	5,326		(58)





Welocalize, Inc.	Revolver	0.50	2,250		(25)
Welocalize, Inc.	Revolver	0.50	2,250		(25)
WRE Holding Corp.	Delayed Draw	1.00	563		(5)
WRE Holding Corp.	Revolver	0.50	609		(6)
Total unfunded commitments			$	101,023	$	(1,223)


Consolidated Schedule of Investments as of December 31, 2020
Investments (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Maturity Date	Par/ Principal Amount		Amortized Cost (4)		Fair Value (5)
First Lien Debt (97.5% of fair value)
Acrisure, LLC	\#	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 3.50%	3.65%	2/15/2027	$	25,634	$	25,606	$	25,104
Alku, LLC	+#	(2)(3)	Business Services	L + 5.50%	5.75%	7/29/2026	23,666		23,466		23,512
Alpha Packaging Holdings, Inc.	+\	(2)(3)	Containers, Packaging & Glass	L + 6.00%	7.00%	11/12/2021	16,378		16,378		16,378
AmeriLife Holdings LLC	#	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 4.00%	4.15%	3/18/2027	9,951		9,929		9,802
Analogic Corporation	^+	(2)(3)(6)	Capital Equipment	L + 5.25%	6.25%	6/22/2024	18,857		18,837		18,857
Anchor Packaging, Inc.	+#	(2)(3)	Containers, Packaging & Glass	L + 4.00%	4.15%	7/18/2026	24,723		24,617		24,656
API Technologies Corp.	+\	(2)(3)	Aerospace & Defense	L + 4.25%	4.49%	5/9/2026	14,775		14,713		13,999
Aptean, Inc.	+\	(2)(3)	Software	L + 4.25%	4.40%	4/23/2026	12,281		12,227		12,077
AQA Acquisition Holding, Inc.	+\	(2)(3)(6)	High Tech Industries	L + 4.25%	5.25%	5/24/2023	18,759		18,752		18,757
Astra Acquisition Corp.	+#	(2)(3)	Software	L + 5.50%	6.50%	3/1/2027	28,783		28,392		28,783
Avalign Technologies, Inc.	+\	(2)(3)	Healthcare & Pharmaceuticals	L + 4.50%	4.73%	12/22/2025	14,592		14,481		14,334
Big Ass Fans, LLC	+\#	(2)(3)	Capital Equipment	L + 3.75%	4.75%	5/21/2024	13,766		13,714		13,766
BK Medical Holding Company, Inc.	^+	(2)(3)(6)	Healthcare & Pharmaceuticals	L + 5.25%	6.25%	6/22/2024	24,165		23,951		22,363
Chemical Computing Group ULC (Canada)	^+	(2)(3)(6)	Software	L + 5.00%	6.00%	8/30/2023	14,055		13,378		14,055
Clarity Telecom LLC.	+		Media: Broadcasting & Subscription	L + 4.25%	4.40%	8/30/2026	14,813		14,773		14,813
Clearent Newco, LLC	^	(2)(3)(6)	High Tech Industries	L + 6.50%	7.50%	3/20/2025	4,079		4,079		3,907
Clearent Newco, LLC	^+\	(2)(3)	High Tech Industries	L + 5.50%	6.50%	3/20/2025	29,486		29,236		28,722
DecoPac, Inc.	^+\	(2)(3)(6)	Non-durable Consumer Goods	L + 4.25%	5.25%	9/29/2024	12,336		12,253		12,318
Diligent Corporation	^+	(2)(3)(6)	Telecommunications	L + 6.25%	7.25%	8/4/2025	8,683		8,411		8,819
DTI Holdco, Inc.	^+\	(2)(3)	High Tech Industries	L + 4.75%	5.75%	9/30/2023	18,690		18,642		16,655
Eliassen Group, LLC	+\	(2)(3)	Business Services	L + 4.25%	4.40%	11/5/2024	7,543		7,516		7,483
EvolveIP, LLC	^+	(2)(3)(6)	Telecommunications	L + 5.75%	6.75%	6/7/2023	19,800		19,759		19,775
Exactech, Inc.	+\#	(2)(3)	Healthcare & Pharmaceuticals	L + 3.75%	4.75%	2/14/2025	21,528		21,416		20,422
Excel Fitness Holdings, Inc.	+#	(2)(3)	Hotel, Gaming & Leisure	L + 5.25%	6.25%	10/7/2025	24,750		24,546		22,780
Frontline Technologies Holdings, LLC	+	(2)(3)	Software	L + 5.75%	6.75%	9/18/2023	14,886		14,198		14,589
Golden West Packaging Group LLC	+\	(2)(3)	Containers, Packaging & Glass	L + 5.25%	6.25%	6/20/2023	29,012		28,896		28,974
HMT Holding Inc.	+\	(2)(3)(6)	Energy: Oil & Gas	L + 5.00%	6.00%	11/17/2023	32,821		32,458		30,984
Integrity Marketing Acquisition, LLC	^+	(2)(3)(6)	Banking, Finance, Insurance & Real Estate	L + 6.25%	7.25%	8/27/2025	7,836		7,701		7,956
Jensen Hughes, Inc.	+\	(2)(3)(6)	Utilities: Electric	L + 4.50%	5.50%	3/22/2024	34,584		34,489		33,424
KAMC Holdings, Inc.	+#	(2)(3)	Energy: Electricity	L + 4.00%	4.23%	8/14/2026	13,825		13,768		12,531
KBP Investments, LLC	^+	(2)(3)(6)	Beverage, Food & Tobacco	L + 5.00%	6.00%	5/15/2023	9,292		9,059		9,350
Marco Technologies, LLC	^+\	(2)(3)(6)	Media: Advertising, Printing & Publishing	L + 4.00%	5.00%	10/30/2023	7,332		7,293		7,332
Mold-Rite Plastics, LLC	+\	(2)(3)	Chemicals, Plastics & Rubber	L + 4.25%	5.25%	12/14/2021	$	14,520	$	14,501	$	14,520
Newport Group Holdings II, Inc.	+\#	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 3.50%	3.75%	9/13/2025	23,475		23,285		23,405
Odyssey Logistics & Technology Corp.	+\#	(2)(3)	Transportation: Cargo	L + 4.00%	5.00%	10/12/2024	38,897		38,773		37,766


Consolidated Schedule of Investments as of December 31, 2020
Investments (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Maturity Date	Par/ Principal Amount		Amortized Cost (4)		Fair Value (5)
Output Services Group	^+\	(2)(3)	Media: Advertising, Printing & Publishing	L + 4.50%	5.50%	3/27/2024	19,421		19,382		14,178
Pasternack Enterprises, Inc.	+\	(2)(3)	Capital Equipment	L + 4.00%	5.00%	7/2/2025	$	22,524	$	22,513	$	22,218
Pharmalogic Holdings Corp.	+\	(2)(3)	Healthcare & Pharmaceuticals	L + 4.00%	5.00%	6/11/2023	11,205		11,189		11,158
Premise Health Holding Corp.	+\#	(2)(3)	Healthcare & Pharmaceuticals	L + 3.50%	3.75%	7/10/2025	13,584		13,538		13,503
Propel Insurance Agency, LLC	^+\	(2)(3)(6)	Banking, Finance, Insurance & Real Estate	L + 5.00%	6.00%	6/1/2024	38,134		37,662		37,716
Q Holding Company	+\#	(2)(3)	Automotive	L + 5.00%	6.00%	12/31/2023	21,735		21,604		20,229
QW Holding Corporation	+	(2)(3)(6)	Environmental Industries	L + 6.25%	7.25%	8/31/2022	11,566		11,465		10,727
Radiology Partners, Inc.	+\#	(2)(3)	Healthcare & Pharmaceuticals	L + 4.25%	4.81%	7/9/2025	27,686		27,581		27,193
RevSpring Inc.	+\#	(2)(3)	Media: Advertising, Printing & Publishing	L + 4.25%	4.40%	10/11/2025	29,449		29,265		29,199
Situs Group Holdings Corporation	+\	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 4.75%	5.75%	6/28/2025	14,781		14,689		14,636
T2 Systems, Inc.	^+	(2)(3)(6)	Transportation: Consumer	L + 6.75%	7.75%	9/28/2022	29,119		28,743		29,118
The Original Cakerie, Ltd. (Canada)	+\	(2)(3)(6)	Beverage, Food & Tobacco	L + 4.50%	5.50%	7/20/2022	6,295		6,281		6,289
The Original Cakerie, Ltd. (Canada)	+	(2)(3)	Beverage, Food & Tobacco	L + 5.00%	6.00%	7/20/2022	8,837		8,815		8,829
Thoughtworks, Inc.	\#	(2)(3)	Business Services	L + 3.75%	4.75%	10/11/2024	11,704		11,683		11,704
U.S. Acute Care Solutions, LLC	+\	(2)(3)	Healthcare & Pharmaceuticals	L + 6.00%	7.00%	5/15/2021	31,211		31,184		29,104
U.S. TelePacific Holdings Corp.	+\	(2)(3)	Telecommunications	L + 5.50%	6.50%	5/2/2023	26,660		26,585		23,984
VRC Companies, LLC	+	(2)(3)(6)	Business Services	L + 6.50%	7.50%	3/31/2023	30,582		29,464		30,582
Water Holdings Acquisition LLC	^+	(2)(3)(6)	Utilities: Water	L + 5.25%	6.25%	12/18/2026	26,316		25,520		25,516
Welocalize, Inc.	+	(2)(3)(6)	Business Services	L + 4.50%	5.50%	12/23/2023	22,629		22,414		22,584
WRE Holding Corp.	^+	(2)(3)(6)	Environmental Industries	L + 5.25%	6.25%	1/3/2023	8,367		8,336		8,252










First Lien Debt Total									$	1,051,406	$	1,029,687
Second Lien Debt (2.3% of fair value)
DBI Holding, LLC	^	(2)	Transportation: Cargo	9.00% PIK	9.00%	2/1/2026	$	24,113	$	23,768	$	24,113
Second Lien Debt Total									$	23,768	$	24,113
Equity Investments (0.2%of fair value)
DBI Holding, LLC	^		Transportation: Cargo				2,961		$	—	$	—
DBI Holding, LLC	^		Transportation: Cargo				13,996		5,364		2,581
Equity Investments Total									$	5,364	$	2,581
Total Investments									$	1,080,538	$	1,056,381

^ Denotes that all or a portion of the assets are owned by Credit Fund. Credit Fund has entered into a revolving credit facility (the "Credit Fund Facility"). Accordingly, such assets are not available to creditors of Credit Fund Sub, the 2019-2 Issuer or Credit Fund Warehouse II.

# Denotes that all or a portion of the assets are owned by the Credit Fund Warehouse II. Credit Fund Warehouse II has entered into a revolving credit facility (the "Credit Fund Warehouse II"). The lenders of the Credit Fund Warehouse II Facility have a first lien security interest in substantially all of the assets of the Credit Fund Warehouse II. Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub, or 2019-2 Issuer.

(1)Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States. As of December 31, 2020, the geographical composition of investments as a percentage of fair value was 2.8% in Canada and 97.2% in the United States. Certain portfolio company investments are subject to contractual restrictions on sales.

(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, Credit Fund has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2020. As of December 31, 2020, the reference rates for Credit Fund's variable rate loans were the 30-day LIBOR at 0.15%, the 90-day LIBOR at 0.25% and the 180-day LIBOR at 0.26%.

(3)Loan includes interest rate floor feature, which is generally 1.00%.

(6)As of December 31, 2020, Credit Fund and Credit Fund Sub had the following unfunded commitments to fund delayed draw and revolving senior secured loans:


First Lien Debt—unfunded delayed draw and revolving term loans commitments	Type	Unused Fee		Par/ Principal Amount		Fair Value
Analogic Corporation	Revolver	0.50	%	$	1,975	$	—
AQA Acquisition Holding, Inc.	Revolver	0.50		2,459		—
BK Medical Holding Company, Inc.	Revolver	0.50		2,609		(176)
Chemical Computing Group ULC (Canada)	Revolver	0.50		873		—
Clearent Newco, LLC	Delayed Draw	1.00		2,549		(66)
DecoPac, Inc.	Revolver	0.50		2,143		(3)
Diligent Corporation	Delayed Draw	1.00		2,109		25
Diligent Corporation	Revolver	0.50		703		8
EvolveIP, LLC	Delayed Draw	1.00		1,904		(2)
EvolveIP, LLC	Revolver	0.50		1,680		(2)
HMT Holding Inc.	Revolver	0.50		6,173		(291)
Integrity Marketing Acquistion, LLC	Delayed Draw	1.00		4,144		41
Jensen Hughes, Inc.	Delayed Draw	1.00		1,127		(35)
Jensen Hughes, Inc.	Revolver	0.50		1,364		(43)
KBP Investments, LLC	Delayed Draw	1.00		503		1
KBP Investments, LLC	Delayed Draw	1.00		10,190		30
Marco Technologies, LLC	Delayed Draw	1.00		7,500		—
Propel Insurance Agency, LLC	Revolver	0.50		1,905		(19)
Propel Insurance Agency, LLC	Delayed Draw	1.00		1,733		(17)
QW Holding Corporation	Revolver	0.50		5,498		(268)
QW Holding Corporation	Delayed Draw	1.00		161		(8)
T2 Systems, Inc.	Revolver	0.50		1,955		—
The Original Cakerie, Ltd. (Canada)	Revolver	0.50		1,665		(1)
VRC Companies, LLC	Revolver	0.50		858		—
Water Holdings Acquisition LLC	Delayed Draw	1.00		8,421		(168)
Water Holdings Acquisition LLC	Revolver	0.50		5,263		(105)
Welocalize, Inc.	Revolver	0.50		2,250		(4)
WRE Holding Corp.	Revolver	0.50		852		(10)
WRE Holding Corp.	Delayed Draw	1.00		563		(7)


Total unfunded commitments				$	81,129	$	(1,120)

Debt

Credit Fund Facilities

The Credit Fund, Credit Fund Sub and Credit Fund Warehouse II are party to separate credit facilities as described below. As of June 30, 2021 and December 31, 2020, Credit Fund, Credit Fund Sub and Credit Fund Warehouse II were in compliance with all covenants and other requirements of their respective credit facility agreements.

Below is a summary of the borrowings and repayments under the credit facilities for the three month and six month periods ended 2021 and 2020, and the outstanding balances under the credit facilities for the respective periods.


	Credit Fund Facility				Credit Fund Sub Facility				Credit Fund Warehouse II Facility
	2021		2020		2021		2020			2021		2020
Three Month Periods Ended June 30,
Outstanding balance, beginning of period	$	—	$	—	$	363,121	$	367,006		$	83,180	$	95,415
Borrowings	—		—		162,500		43,000			8,000		13,579
Repayments	—		—		(10,500)		(57,000)			(9,017)		—
Outstanding balance, end of period	$	—	$	—	$	515,121	$	353,006		$	82,163	$	108,994

Six Month Periods Ended June 30,
Outstanding Borrowing, beginning of period	$	—	$	93,000	$	420,859	$	343,506		$	93,402	$	97,571
Borrowings	—		63,500		225,500		100,000			8,000		33,373
Repayments	—		(156,500)		(131,238)		(90,500)			(19,239)		(21,950)
Outstanding balance, end of period	$	—	$	—	$	515,121	$	353,006		$	82,163	$	108,994

Credit Fund Facility. On June 24, 2016, Credit Fund entered into the Credit Fund Facility with the Company, which was subsequently amended on June 5, 2017, October 2, 2017, November 3, 2017, June 22, 2018, June 29, 2018, February 21, 2019, March 20, 2020 and February 22, 2021, pursuant to which Credit Fund may from time to time request mezzanine loans from the Company. The maximum principal amount of the Credit Fund Facility is $175,000. The maturity date of the Credit Fund Facility is May 21, 2022. Amounts borrowed under the Credit Fund Facility bear interest at a rate of LIBOR plus 9.00%.

Credit Fund Sub Facility. On June 24, 2016, Credit Fund Sub closed on the Credit Fund Sub Facility with lenders, which was subsequently amended on May 31, 2017, October 27, 2017, August 24, 2018, December 12, 2019, March 11, 2020 and May 3, 2021. The Credit Fund Sub Facility provides for secured borrowings during the applicable revolving period up to an amount equal to $640,000. The facility is secured by a first lien security interest in substantially all of the portfolio investments held by Credit Fund Sub. The maturity date of the Credit Fund Sub Facility is May 22, 2024. Amounts borrowed under the Credit Fund Sub Facility bear interest at a rate of LIBOR plus 2.25%.

Credit Fund Warehouse II Facility. On August 16, 2019, Credit Fund Warehouse II closed on a revolving credit facility (the "Credit Fund Warehouse II Facility") with lenders. The Credit Fund Warehouse II Facility provides for secured borrowings during the applicable revolving period up to an amount equal to $150,000. The Credit Fund Warehouse II Facility is secured by a first lien security interest in substantially all of the portfolio investments held by the Credit Fund Warehouse II Facility. The maturity date of the Credit Fund Warehouse II Facility is August 16, 2022. Amounts borrowed under the Credit Fund Warehouse II Facility bear interest at a rate of LIBOR plus 1.05% for the first 12 months, LIBOR plus 1.15% for the next 12 months, and LIBOR plus 1.50% in the final 12 months.

2017-1 Notes

On December 19, 2017, Credit Fund completed the 2017-1 Debt Securitization. The notes offered in the 2017-1 Debt Securitization (the “2017-1 Notes”) were issued by the 2017-1 Issuer, a wholly owned and consolidated subsidiary of Credit Fund, and are secured by a diversified portfolio of the 2017-1 Issuer consisting primarily of first and second lien senior secured loans. The 2017-1 Debt Securitization was executed through a private placement of the 2017-1 Notes, consisting of:

•$231,700 of Aaa/AAA Class A-1 Notes, which bore interest at the three-month LIBOR plus 1.17%;

•$48,300 of Aa2/AA Class A-2 Notes, which bore interest at the three-month LIBOR plus 1.50%;

•$15,000 of A2/A Class B-1 Notes, which bore interest at the three-month LIBOR plus 2.25%;

•$9,000 of A2/A Class B-2 Notes which bore interest at 4.30%;

•$22,900 of Baa2/BBB Class C Notes which bore interest at the three-month LIBOR plus 3.20%; and

•$25,100 of Ba2/BB Class D Notes which bore interest at the three-month LIBOR plus 6.38%.

exchange for Credit Fund’s contribution to the 2017-1 Issuer of the initial closing date loan portfolio. The 2017-1 Issuer Preferred Interests did not bear interest and had a nominal value of $47,900 at closing.

The 2017-1 Notes were fully redeemed during the year ended December 31, 2020. As of the redemption date, the 2017-1 Issuer was in compliance with all covenants and other requirements of the indenture.

2019-2 Notes

On May 21, 2019, Credit Fund completed the 2019-2 Debt Securitization. The notes offered in the 2019-2 Debt Securitization (the “2019-2 Notes”) were issued by the 2019-2 Issuer, a wholly owned and consolidated subsidiary of Credit Fund, and are secured by a diversified portfolio of the 2019-2 Issuer consisting primarily of first and second lien senior secured loans. The 2019-2 Debt Securitization was executed through a private placement of the 2019-2 Notes, consisting of:

•$233,000 of Aaa/AAA Class A-1 Notes, which bear interest at the three-month LIBOR plus 1.50%;

•$48,000 of Aa2/AA Class A-2 Notes, which bear interest at the three-month LIBOR plus 2.40%;

•$23,000 of A2/A Class B Notes, which bear interest at the three-month LIBOR plus 3.45%;

•$27,000 of Baa2/BBB- Class C Notes which bear interest at the three-month LIBOR plus 4.55%; and

•$21,000 of Ba2/BB- Class D Notes which bear interest at the three-month LIBOR plus 8.03%.

The 2019-2 Notes are scheduled to mature on April 15, 2029. Credit Fund received 100% of the preferred interests issued by the 2019-2 Issuer (the “2019-2 Issuer Preferred Interests”) on the closing date of the 2019-2 Debt Securitization in exchange for Credit Fund’s contribution to the 2019-2 Issuer of the initial closing date loan portfolio. The 2019-2 Issuer Preferred Interests do not bear interest and had a nominal value of $48,300 at closing.

As of June 30, 2021 and December 31, 2020, the outstanding balance of the 2019-2 Notes was 156,140,862 and 255,832,457, respectively. As of June 30, 2021 and December 31, 2020, the 2019-2 Issuer was in compliance with all covenants and other requirements of the indenture.

6. MIDDLE MARKET CREDIT FUND II, LLC

Overview

On November 3, 2020, the Company and CCLF entered into a limited liability company agreement to co-manage Credit Fund II, a Delaware limited liability company that is not consolidated in the Company's consolidated financial statements. Credit Fund II primarily invests in senior secured loans of middle market companies. Credit Fund II is managed by a four-member board, on which the Company and CCLF have equal representation. Establishing a quorum for Credit Fund II's board requires at least one of the Company's representatives and one of CCLF's representatives. The Company and CCLF have 84.13% and 15.87% economic ownership of Credit Fund II, respectively. By virtue of its membership interest, each of the Company and CCLF indirectly bears an allocable share of all expenses and other obligations of Credit Fund II.

Credit Fund II's initial portfolio consisted of 45 senior secured loans of middle market companies with an aggregate principal balance of approximately $250 million. Credit Fund II's initial portfolio was funded on November 3, 2020 with existing senior secured debt investments contributed by the Company and as part of the transaction, the Company determined that the contribution met the requirements under ASC 860, Transfers and Servicing.

Credit Fund II is expected to make only limited new investments in senior secured loans of middle market companies. Portfolio and investment decisions with respect to Credit Fund II must be unanimously approved by a quorum of Credit Fund II’s board members consisting of at least one of the Company's representatives and one of CCLF's representatives. Therefore, although the Company owns more than 25% of the voting securities of Credit Fund II, the Company does not believe that it has control over Credit Fund II (other than for purposes of the Investment Company Act).

Middle Market Credit Fund II SPV, LLC (“Credit Fund II Sub”), a Delaware limited liability company, was formed on September 4, 2020. Credit Fund II Sub is a wholly owned subsidiary of Credit Fund II and is consolidated in Credit Fund II’s consolidated financial statements commencing from the date of its formation. Credit Fund II Sub primarily holds investments in first lien loans of middle market companies, which are pledged as security for the Credit Fund II Senior Notes (see below).

Credit Fund II, the Company and CCLF entered into an administration agreement with Carlyle Global Credit Administration L.L.C., the administrative agent of Credit Fund II (in such capacity, the “Credit Fund II Administrative Agent”), pursuant to which the Credit Fund II Administrative Agent is delegated certain administrative and non-discretionary functions,

is authorized to enter into sub-administration agreements at the expense of Credit Fund II with the approval of the board of managers of Credit Fund II, and is reimbursed by Credit Fund II for its costs and expenses and Credit Fund II’s allocable portion of overhead incurred by the Credit Fund II Administrative Agent in performing its obligations thereunder.

Credit Fund II Senior Notes

On November 3, 2020, Credit Fund II Sub closed on the Credit Fund II Senior Notes (the “Credit Fund II Senior Notes”) with lenders. The Credit Fund II Senior Notes provides for secured borrowings totaling $157,500 with two tranches, A-1 and A-2 outstanding. The facility is secured by a first lien security interest in substantially all of the portfolio investments held by Credit Fund II Sub. The maturity date of the Credit Fund II Senior Notes is November 3, 2030. Amounts issued for the Class A-1 notes (the "A-1 Notes") totaled $147,500 and bear interest at a rate of LIBOR plus 2.70%, and amounts issued for the Class A-2 notes (the "A-2 Notes") totaled $10,000 and bear interest at LIBOR plus 3.20%. The A-1 Notes were rated AAA, and the A-2 Notes were rated AA by DBRS Morningstar. The terms of the Credit Fund II Senior Notes provide that as loans pay down, up to $50,000 is available from principal proceeds for reinvestment, and then the investment principal proceeds are used to directly pay down the principal balance on the Credit Fund II Senior Notes. As of June 30, 2021 and December 31, 2020, Credit Fund II Sub was in compliance with all covenants and other requirements of its respective credit agreements.

Selected Financial Data

Since inception of Credit Fund II and through June 30, 2021, the Company and CCLF made capital contributions of $78,096 and $12,709 in members’ equity, respectively, to Credit Fund II. Below is certain summarized consolidated information for Credit Fund II as of June 30, 2021 and December 31, 2020.


	As of
	June 30, 2021		December 31, 2020

ASSETS
Investments, at fair value (amortized cost of $242,728 and $245,312, respectively)	$	244,554	$	246,421
Cash, cash equivalents and restricted cash (1)	12,755		1,385
Other assets	2,532		3,436
Total assets	$	259,841	$	251,242
LIABILITIES AND MEMBERS’ EQUITY

Notes payable, net of unamortized debt issuance costs of $839 and $875, respectively	$	156,661	$	156,625
Other liabilities	9,938		2,675





Total members' equity (2)	93,242		91,942
Total liabilities and members’ equity	$	259,841	$	251,242

(1) As of June 30, 2021 and December 31, 2020, all of Credit Fund II's cash and cash equivalents was restricted.

(2) As of June 30, 2021 and December 31, 2020, the fair value of Company's ownership interest in the members' equity was $78,441 and $77,395, respectively.


	For the three month period ended		For the six month period ended
	June 30, 2021			June 30, 2021
	(unaudited)		(unaudited)
Selected Consolidated Statement of Operations Information:
Total investment income	$	4,804		9,367
Expenses
Interest and credit facility expenses	1,197			2,398
Other expenses	190			381
Total expenses	1,387			2,779
Net investment income (loss)	3,417			6,588
Net realized gain (loss) on investments	—			—
Net change in unrealized appreciation (depreciation) on investments	218			712
Net increase (decrease) resulting from operations	$	3,635		7,300

Below is a summary of Credit Fund II’s portfolio, followed by a listing of the loans in Credit Fund II’s portfolio as of June 30, 2021 and December 31, 2020:


	As of
	June 30, 2021			December 31, 2020
Senior secured loans (1)	$	245,218		$	248,172
Weighted average yields of senior secured loans based on amortized cost (2)	7.41		%	7.32		%
Weighted average yields of senior secured loans based on fair value (2)	7.35		%	7.29		%
Number of portfolio companies in Credit Fund II	40			44
Average amount per portfolio company (1)	$	6,130		$	5,640
Percentage of portfolio at floating interest rates (3) (4)	99.0		%	99.1		%
Percentage of portfolio at fixed interest rates (4)	1.0		%	0.9		%
Fair value of loans with PIK provisions	$	17,453		$	8,856
Percentage of portfolio with PIK provisions (4)	7.1		%	3.6		%

(1)At par/principal amount.

(2)Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of June 30, 2021 and December 31, 2020. Weighted average yield on debt and income producing securities at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at fair value included in such securities. Weighted average yield on debt and income producing securities at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at amortized cost included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above.

(3)Floating rate debt investments are generally subject to interest rate floors.

(4)Percentages based on fair value.


Consolidated Schedule of Investments as of June 30, 2021
Investments (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Maturity Date	Par/ Principal Amount		Amortized Cost (4)		Fair Value (5)
First Lien Debt (88.2% of fair value)
Airnov, Inc.	^	(2)(3)	Containers, Packaging & Glass	L + 5.25%	6.25%	12/19/2025	$	6,237	$	6,219	$	6,237
Alpine SG, LLC	^	(2)(3)	High Tech Industries	L + 5.75%	6.75%	11/16/2022	4,411		4,395		4,366
American Physician Partners, LLC	^	(2)(3)	Healthcare & Pharmaceuticals	L + 6.75%, 1.50% PIK	9.25%	12/21/2021	8,532		8,510		8,463
AMS Group HoldCo, LLC	^	(2)(3)	Transportation: Cargo	L + 6.00%	7.00%	9/29/2023	7,650		7,583		7,650
Apptio, Inc.	^	(2)(3)	Software	L + 7.25%	8.25%	1/10/2025	5,357		5,286		5,397
Aurora Lux FinCo S.Á.R.L. (Luxembourg)	^	(2)(3)	Software	L + 6.00%	7.00%	12/24/2026	4,378		4,288		3,949
Avenu Holdings, LLC	^	(2)(3)	Sovereign & Public Finance	L + 5.25%	6.25%	9/28/2024	992		984		992
BMS Holdings III Corp.	^	(2)(3)	Construction & Building	L + 5.25%	6.25%	9/30/2026	3,291		3,227		3,291
Captive Resources Midco, LLC	^	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 5.75%	6.75%	5/31/2025	8,267		8,170		8,268
Chartis Holding, LLC	^	(2)(3)	Business Services	L + 5.50%	6.50%	5/1/2025	3,475		3,454		3,475
Comar Holding Company, LLC	^	(2)(3)	Containers, Packaging & Glass	L + 5.50%	6.50%	6/18/2024	8,755		8,662		8,755
Cority Software Inc. (Canada)	^	(2)(3)	Software	L + 5.00%	6.00%	7/2/2026	8,756		8,623		8,756
Ethos Veterinary Health LLC	^	(2)(3)	Consumer Services	L + 4.75%	4.85%	5/15/2026	8,158		8,098		8,137
EvolveIP, LLC	^	(2)(3)	Telecommunications	L + 5.75%	6.75%	6/7/2023	8,755		8,742		8,755
K2 Insurance Services, LLC	^	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 5.00%	6.00%	7/1/2024	6,876		6,790		6,858
Kaseya, Inc.	^	(2)(3)	High Tech Industries	L + 4.00%, 3.00% PIK	8.00%	5/2/2025	8,955		8,835		8,990


Consolidated Schedule of Investments as of June 30, 2021
Investments (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Maturity Date	Par/ Principal Amount		Amortized Cost (4)		Fair Value (5)
Mailgun Technologies, Inc.	^	(2)(3)	High Tech Industries	L + 5.00%	6.00%	3/26/2025	$	8,435	$	8,318	$	8,415
National Technical Systems, Inc.	^	(2)(3)	Aerospace & Defense	L + 5.50%	6.50%	6/12/2023	8,778		8,760		8,807
NMI AcquisitionCo, Inc.	^	(2)(3)	High Tech Industries	L + 5.50%	6.50%	9/6/2023	8,754		8,706		8,802
Paramit Corporation	^	(2)(3)	Capital Equipment	L + 4.50%	5.50%	5/3/2025	1,000		993		1,000
PPC Flexible Packaging, LLC	^	(2)(3)	Containers, Packaging & Glass	L + 5.75%	6.75%	11/23/2024	4,377		4,340		4,377
Redwood Services Group, LLC	^	(2)(3)	High Tech Industries	L + 6.00%	7.00%	6/6/2023	3,283		3,267		3,267
Reladyne, Inc.	^	(2)(3)	Wholesale	L + 5.00%	6.00%	7/22/2022	6,467		6,431		6,403
Riveron Acquisition Holdings, Inc.	^	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 5.75%	6.75%	5/22/2025	8,215		8,102		8,215
RSC Acquisition, Inc.	^	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 5.50%	6.50%	11/1/2026	8,444		8,309		8,528
Smile Doctors, LLC	^	(2)(3)	Healthcare & Pharmaceuticals	L + 6.00%	7.00%	10/6/2022	6,476		6,475		6,476
Superior Health Linens, LLC	^	(2)(3)	Business Services	L + 6.50%	7.50%	9/30/2021	6,974		6,967		6,974
T2 Systems, Inc.	^	(2)(3)	Transportation: Consumer	L + 6.75%	7.75%	9/28/2022	8,753		8,691		8,753
TCFI Aevex LLC	^	(2)(3)	Aerospace & Defense	L + 6.00%	7.00%	3/18/2026	1,710		1,682		1,679
TSB Purchaser, Inc.	^	(2)(3)	Media: Advertising, Printing & Publishing	L + 6.00%	7.00%	5/14/2024	8,754		8,636		8,738
Turbo Buyer, Inc.	^	(2)(3)	Automotive	L + 6.00%	7.00%	12/2/2025	8,132		7,975		7,970
US INFRA SVCS Buyer, LLC	^	(2)(3)	Environmental Industries	L + 6.00%	7.00%	4/13/2026	3,283		3,229		3,195
Zemax Software Holdings, LLC	^	(2)(3)	Software	L + 5.75%	6.75%	6/25/2024	4,376		4,344		4,333
Zenith Merger Sub, Inc.	^	(2)(3)	Business Services	L + 5.25%	6.25%	12/13/2023	7,403		7,379		7,403














First Lien Debt Total									$	214,470	$	215,674
Second Lien Debt (11.8% of fair value)
AI Convoy S.A.R.L (United Kingdom)	^	(2)(3)	Aerospace & Defense	L + 8.25%	9.25%	1/17/2028	$	5,514	$	5,407	$	5,720
AQA Acquisition Holdings, Inc.	^	(2)(3)	High Tech Industries	L + 7.50%	8.00%	3/3/2029	$	5,000	$	4,875	$	4,875
Quartz Holding Company	^	(2)(3)	Software	L + 8.00%	8.09%	4/2/2027	4,852		4,776		4,852
Tank Holding Corp.	^	(2)(3)	Capital Equipment	L + 8.25%	8.45%	3/26/2027	5,514		5,441		5,567
Ultimate Baked Goods MIDCO, LLC	^	(2)(3)	Beverage, Food & Tobacco	L + 8.00%	9.00%	8/9/2026	5,514		5,434		5,514
World 50, Inc.	^	(6)	Business Services	11.50%	11.50%	1/9/2027	2,365		2,325		2,352




Second Lien Debt Total									$	28,258	$	28,880
Total Investments									$	242,728	$	244,554

^ Denotes that all or a portion of the assets are owned by Credit Fund II Sub. Credit Fund II Sub has entered into the Credit Fund II Sub Notes. The lenders of the Credit Fund II Sub Notes have a first lien security interest in substantially all of the assets of Credit Fund II Sub. Accordingly, such assets are not available to creditors of Credit Fund II.

(1) Unless otherwise indicated, issuers of investments held by Credit Fund II are domiciled in the United States. As of June 30, 2021, the geographical composition of investments as a percentage of fair value was 3.6% in Canada, 1.6% in Luxembourg, 2.3% in the United Kingdom and 92.5% in the United States. Certain portfolio company investments are subject to contractual restrictions on sales.

(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, Credit Fund II has indicated the reference rate used and provided the spread and the interest rate in effect as of June 30, 2021. As of June 30, 2021, the reference rates for Credit Fund II's variable rate loans were the 30-day LIBOR at 0.10%, the 90-day LIBOR at 0.15% and the 180-day LIBOR at 0.16%.

(3)Loan includes interest rate floor feature, which is generally 1.00%.

(5)Fair value is determined in good faith by or under the direction of the board of managers of Credit Fund II, pursuant to Credit Fund II’s valuation policy, with the fair value of all investments determined using significant unobservable inputs, which is substantially similar to the valuation policy of the Company provided in Note 3, Fair Value Measurements, to these consolidated financial statements.

(6)Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company.


Consolidated Schedule of Investments as of December 31, 2020
Investments (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Maturity Date	Par/ Principal Amount		Amortized Cost (4)		Fair Value (5)
First Lien Debt (90.10% of fair value)
Airnov, Inc.	^	(2)(3)	Containers, Packaging & Glass	L + 5.25%	6.25%	12/19/2025	$	1,500	$	1,481	$	1,501
Alpine SG, LLC	^	(2)(3)	High Tech Industries	L + 5.75%	6.75%	11/16/2022	4,411		4,390		4,378
American Physician Partners, LLC	^	(2)(3)	Healthcare & Pharmaceuticals	L + 6.75%	7.75%	12/21/2021	8,725		8,679		8,265
AMS Group HoldCo, LLC	^	(2)(3)	Transportation: Cargo	L + 6.50%	7.50%	9/29/2023	8,182		8,096		8,079
Apptio, Inc.	^	(2)(3)	Software	L + 7.25%	8.25%	1/10/2025	5,357		5,278		5,437
Aurora Lux FinCo S.Á.R.L. (Luxembourg)	^	(2)(3)	Software	L + 5.75%	6.75%	12/24/2026	4,400		4,303		4,018
Avenu Holdings, LLC	^	(2)(3)	Sovereign & Public Finance	L + 5.25%	6.25%	9/28/2024	997		987		997
BMS Holdings III Corp.	^	(2)(3)	Construction & Building	L + 5.25%	6.25%	9/30/2026	3,308		3,239		3,270
Captive Resources Midco, LLC	^	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 5.75%	6.75%	5/31/2025	8,406		8,297		8,463
Chartis Holding, LLC	^	(2)(3)	Business Services	L + 5.50%	6.50%	5/1/2025	1,496		1,474		1,497
Comar Holding Company, LLC	^	(2)(3)	Containers, Packaging & Glass	L + 5.50%	6.50%	6/18/2024	8,799		8,692		8,832
Cority Software Inc. (Canada)	^	(2)(3)	Software	L + 5.25%	6.25%	7/2/2026	8,800		8,655		8,862
Ensono, LP	^	(2)(3)	Telecommunications	L + 5.25%	5.40%	6/27/2025	6,292		6,246		6,245
Ethos Veterinary Health LLC	^	(2)(3)	Consumer Services	L + 4.75%	4.90%	5/15/2026	8,182		8,117		8,070
EvolveIP, LLC	^	(2)(3)	Telecommunications	L + 5.75%	6.75%	6/7/2023	8,799		8,784		8,790
Innovative Business Services, LLC	^	(2)(3)	High Tech Industries	L + 5.50%	6.50%	4/5/2023	2,200		2,162		2,159
K2 Insurance Services, LLC	^	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 5.00%	6.00%	7/1/2024	6,927		6,827		6,928
Kaseya, Inc.	^	(2)(3)	High Tech Industries	L + 4.00%, 3.00% PIK	8.00%	5/2/2025	8,822		8,688		8,856
Mailgun Technologies, Inc.	^	(2)(3)	High Tech Industries	L + 5.00%	6.00%	3/26/2025	8,478		8,347		8,330
National Technical Systems, Inc.	^	(2)(3)	Aerospace & Defense	L + 5.50%	6.50%	6/12/2023	8,800		8,778		8,733
NMI AcquisitionCo, Inc.	^	(2)(3)	High Tech Industries	L + 5.00%	6.00%	9/6/2022	8,799		8,732		8,711
Paramit Corporation	^	(2)(3)	Capital Equipment	L + 4.50%	5.50%	5/3/2025	1,000		992		980
PPC Flexible Packaging, LLC	^	(2)(3)	Containers, Packaging & Glass	L + 6.00%	7.00%	11/23/2024	4,400		4,358		4,386
Redwood Services Group, LLC	^	(2)(3)	High Tech Industries	L + 6.00%	7.00%	6/6/2023	3,300		3,279		3,291
Reladyne, Inc.	^	(2)(3)	Wholesale	L + 5.00%	6.00%	7/22/2022	6,484		6,431		6,514
Riveron Acquisition Holdings, Inc.	^	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 5.75%	6.75%	5/22/2025	8,257		8,131		8,312
RSC Acquisition, Inc.	^	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 5.50%	6.50%	11/1/2026	8,487		8,341		8,572
Smile Doctors, LLC	^	(2)(3)	Healthcare & Pharmaceuticals	L + 6.00%	7.00%	10/6/2022	6,509		6,507		6,379
Sovos Brands Intermediate, Inc.	^	(2)(3)	Beverage, Food & Tobacco	L + 4.75%	4.96%	11/20/2025	2,200		2,182		2,181
Superior Health Linens, LLC	^	(2)(3)	Business Services	L + 6.50%	7.50%	9/30/2021	7,199		7,178		7,162
T2 Systems, Inc.	^	(2)(3)	Transportation: Consumer	L + 6.75%	7.75%	9/28/2022	8,799		8,713		8,799
TCFI Aevex LLC	^	(2)(3)	Aerospace & Defense	L + 6.00%	7.00%	3/18/2026	1,718		1,688		1,712
TSB Purchaser, Inc.	^	(2)(3)	Media: Advertising, Printing & Publishing	L + 6.00%	7.00%	5/14/2024	8,799		8,663		8,729
Turbo Buyer, Inc.	^	(2)(3)	Automotive	L + 5.25%	6.25%	12/2/2025	8,174		8,001		8,249


Consolidated Schedule of Investments as of December 31, 2020
Investments (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Maturity Date	Par/ Principal Amount		Amortized Cost (4)		Fair Value (5)
US INFRA SVCS Buyer, LLC	^	(2)(3)	Environmental Industries	L + 6.00%	7.00%	4/13/2026	$	3,300	$	3,240	$	3,292
VRC Companies, LLC	^	(2)(3)	Business Services	L + 6.50%	7.50%	3/31/2023	4,311		4,271		4,311
Zemax Software Holdings, LLC	^	(2)(3)	Software	L + 5.75%	6.75%	6/25/2024	4,400		4,363		4,294
Zenith Merger Sub, Inc.	^	(2)(3)	Business Services	L + 5.25%	6.25%	12/13/2023	4,399		4,370		4,367










First Lien Debt Total									$	220,960	$	221,951
Second Lien Debt (9.90% of fair value)
AI Convoy S.A.R.L (United Kingdom)	^	(2)(3)	Aerospace & Defense	L + 8.25%	9.25%	1/17/2028	$	5,514	$	5,401	$	5,676
AQA Acquisition Holding, Inc.	^	(2)(3)	High Tech Industries	L + 8.00%	9.00%	5/24/2024	1,000		993		1,000
Quartz Holding Company	^	(2)(3)	Software	L + 8.00%	8.15%	4/2/2027	4,852		4,771		4,815
Tank Holding Corp.	^	(2)(3)	Capital Equipment	L + 8.25%	8.40%	3/26/2027	5,514		5,436		5,394
Ultimate Baked Goods MIDCO, LLC	^	(2)(3)	Beverage, Food & Tobacco	L + 8.00%	9.00%	8/9/2026	5,514		5,428		5,257
World 50, Inc.		(6)	Business Services	11.50%	11.50%	1/9/2027	2,365		2,323		2,328




Second Lien Debt Total									$	24,352	$	24,470
Total Investments									$	245,312	$	246,421

(1) Unless otherwise indicated, issuers of investments held by Credit Fund II are domiciled in the United States. As of December 31, 2020, the geographical composition of investments as a percentage of fair value was 3.6% in Canada, 1.6% in Luxembourg, 2.3% in the United Kingdom and 92.5% in the United States. Certain portfolio company investments are subject to contractual restrictions on sales.

(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, Credit Fund II has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2020. As of December 31, 2020, the reference rates for Credit Fund II's variable rate loans were the 30-day LIBOR at 0.15%, the 90-day LIBOR at 0.25% and the 180-day LIBOR at 0.26%.

(3)Loan includes interest rate floor feature, which is generally 1.00%.

(6)Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company.

7. BORROWINGS

The Company is party to the Credit Facility and, until its termination on December 11, 2020, the SPV was party to the SPV Credit Facility as described below. In accordance with the Investment Company Act, the Company is currently only allowed to borrow amounts such that its asset coverage, as defined in the Investment Company Act, is at least 150% after such borrowing. For the purposes of the asset coverage ratio under the Investment Company Act, the Preferred Stock, as defined in Note 1, is considered a senior security and is included in the denominator of the calculation. As of June 30, 2021 and December 31, 2020, asset coverage was 182.98% and 182.09%, respectively.

Below is a summary of the borrowings and repayments under the Facilities for the three month and six month periods ended June 30, 2021 and 2020, and the outstanding balances under the Facilities for the respective periods.


	For the three month periods ended				For the six month periods ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
Outstanding Borrowing, beginning of period	$	309,397	$	701,609	$	347,949	$	616,543
Borrowings	139,193		30,792		179,479		257,292
Repayments	(83,500)		(258,041)		(162,500)		(397,484)
Foreign currency translation	(30)		26		132		(1,965)
Outstanding balance, end of period	$	365,060	$	474,386	$	365,060	$	474,386

SPV Credit Facility

The SPV closed on the SPV Credit Facility on May 24, 2013, which was subsequently amended on June 30, 2014, June 19, 2015, June 9, 2016, May 26, 2017 and August 9, 2018. On December 11, 2020, the SPV repaid all outstanding amounts under the SPV Credit Facility and the facility was terminated. The SPV Credit Facility provided for secured borrowings during the applicable revolving period up to an amount equal to the lesser of $275,000, subject to restrictions imposed on borrowings under the Investment Company Act and certain restrictions and conditions set forth in the SPV Credit Facility, including adequate collateral to support such borrowings. The SPV Credit Facility had a revolving period through May 21, 2021 and a maturity date of May 23, 2023. Borrowings under the SPV Credit Facility bore interest initially at the applicable commercial paper rate (if the lender is a conduit lender) or LIBOR (or, if applicable, a rate based on the prime rate or federal funds rate) plus 2.00% per year. The SPV was also required to pay an undrawn commitment fee of between 0.50% and 0.75% per year depending on the drawings under the SPV Credit Facility. Payments under the SPV Credit Facility were made quarterly. The lenders had a first lien security interest on substantially all of the assets of the SPV.

Credit Facility

The Company closed on the Credit Facility on March 21, 2014, which was subsequently amended on January 8, 2015, May 25, 2016, March 22, 2017, September 25, 2018, June 14, 2019, and October 28, 2020. The maximum principal amount of the Credit Facility is $688,000, subject to availability under the Credit Facility, which is based on certain advance rates multiplied by the value of the Company’s portfolio investments (subject to certain concentration limitations) net of certain other indebtedness that the Company may incur in accordance with the terms of the Credit Facility. Proceeds of the Credit Facility may be used for general corporate purposes, including the funding of portfolio investments. Maximum capacity under the Credit Facility may be increased to $900,000 through the exercise by the Company of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing. The Credit Facility includes a $50,000 limit for swingline loans and a $20,000 limit for letters of credit. The Company may borrow amounts in U.S. dollars or certain other permitted currencies. Amounts drawn under the Credit Facility, including amounts drawn in respect of letters of credit, bear interest at either LIBOR plus an applicable spread of 2.25%, or an “alternative base rate” (which is the highest of a prime rate, the federal funds effective rate plus 0.50%, or one month LIBOR plus 1.00%) plus an applicable spread of 1.25%. The Company may elect either the LIBOR or the “alternative base rate” at the time of drawdown, and loans may be converted from one rate to another at any time, subject to certain conditions. The Company also pays a fee of 0.375% on undrawn amounts under the Credit Facility and, in respect of each undrawn letter of credit, a fee and interest rate equal to the then-applicable margin under the Credit Facility while the letter of credit is outstanding. The availability period under the Credit Facility will terminate on October 28, 2024 and the Credit Facility will mature on October 28, 2025. During the period from October 29, 2024 to October 28, 2025, the Company will be obligated to make mandatory prepayments under the Credit Facility out of the proceeds of certain asset sales, other recovery events and equity and debt issuances.

Subject to certain exceptions, the Credit Facility is secured by a first lien security interest in substantially all of the portfolio investments held by the Company. The Credit Facility includes customary covenants, including certain financial covenants related to asset coverage, shareholders’ equity and liquidity, certain limitations on the incurrence of additional indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for senior secured revolving credit facilities of this nature. As of June 30, 2021 and December 31, 2020, the Company was in compliance with all covenants and other requirements of its credit facility agreements.

Summary of Borrowings

The Credit Facility consisted of the following as of June 30, 2021 and December 31, 2020:


	June 30, 2021
	Total Facility		Borrowings Outstanding		Unused Portion (1)		Amount Available (2)

Credit Facility	$	688,000	$	365,060	$	322,940	$	322,878
Total	$	688,000	$	365,060	$	322,940	$	322,878

	December 31, 2020
	Total Facility		Borrowings Outstanding		Unused Portion (1)		Amount Available (2)

Credit Facility	$	688,000	$	347,949	$	340,051	$	207,365
Total	$	688,000	$	347,949	$	340,051	$	207,365

(1)The unused portion is the amount upon which commitment fees are based.

(2)Available for borrowing based on the computation of collateral to support the borrowings and subject to compliance with applicable covenants and financial ratios.

For the three month and six month periods ended June 30, 2021 and 2020, the components of interest expense and credit facility fees were as follows:


	For the three month periods ended						For the six month periods ended
	June 30, 2021			June 30, 2020			June 30, 2021			June 30, 2020
Interest expense	$	2,138		$	4,206		$	4,171		$	10,579
Facility unused commitment fee	314			409			642			727
Amortization of deferred financing costs	191			351			382			595
Other fees	—			27			—			56
Total interest expense and credit facility fees	$	2,643		$	4,993		$	5,195		$	11,957
Cash paid for interest expense	$	2,379		$	4,984		$	4,364		$	11,672

Average principal debt outstanding	$	355,860		$	585,336		$	348,151		$	628,800
Weighted average interest rate	2.38		%	2.84		%	2.38		%	3.33		%

As of June 30, 2021 and December 31, 2020, the components of interest and credit facilities payable were as follows:


	As of
	June 30, 2021			December 31, 2020
Interest expense payable	$	232		$	119
Unused commitment fees payable	4			4
Other credit facility fees payable	—			14
Interest and credit facilities payable	$	236		$	137

Weighted average interest rate (based on floating LIBOR rates)	2.37		%	2.59		%

8. NOTES PAYABLE

Senior Notes

On December 30, 2019, the Company closed a private offering of $115.0 million in aggregate principal amount of 4.750% Senior Unsecured Notes due December 31, 2024. Interest is payable quarterly, beginning March 31, 2020. On December 11, 2020, the Company issued an additional $75.0 million aggregate principal amount of senior unsecured notes due December 31, 2024. The 2020 Notes bear interest at an interest rate of 4.500% and the interest is payable quarterly, beginning December 31, 2020.

The interest rate on the Senior Notes is subject to increase (up to an additional 1.00% over the stated rate of such notes) in the event that, subject to certain exceptions, the Senior Notes cease to have an investment grade rating. The Company is obligated to offer to repay the notes at par if certain change in control events occur. The Senior Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company. Interest expense on the Senior Notes for the three month periods ended June 30, 2021 and 2020 was $2,210 and $1,366, respectively. Interest expense on the Senior Notes for the six month periods ended June 30, 2021 and 2020 was $4,419 and $2,716, respectively.

The note purchase agreement for the Senior Notes contains customary terms and conditions for senior unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of the Company’s status as a business development company within the meaning of the Investment Company Act and a regulated investment company under the Code, minimum asset coverage ratio and interest coverage ratio, and prohibitions on certain fundamental changes at the Company or any subsidiary guarantor, as well as customary events of default with customary cure and notice, including, without limitation, nonpayment, breach of covenant, material breach of representation or warranty under the note purchase agreement, cross-acceleration under other indebtedness of the Company or certain significant subsidiaries, certain judgments and orders, and certain events of bankruptcy. As of June 30, 2021, the Company was in compliance with these terms and conditions.

2015-1R Notes

On June 26, 2015, the Company completed the 2015-1 Debt Securitization. The 2015-1 Notes were issued by the 2015-1 Issuer, a wholly-owned and consolidated subsidiary of the Company. The 2015-1 Debt Securitization was executed through a private placement of the 2015-1 Notes, consisting of:

•$160,000 of Aaa/AAA Class A-1A Notes;

•$40,000 of Aaa/AAA Class A-1B Notes;

•$27,000 of Aaa/AAA Class A-1C Notes; and

•$46,000 of Aa2 Class A-2 Notes.

The 2015-1 Notes were issued at par and were scheduled to mature on July 15, 2027. The Company received 100% of the preferred interests issued by the 2015-1 Issuer (the “2015-1 Issuer Preferred Interests”) on the closing date of the 2015-1 Debt Securitization in exchange for the Company’s contribution to the 2015-1 Issuer of the initial closing date loan portfolio. The 2015-1 Issuer Preferred Interests do not bear interest and had a nominal value of $125,900 at closing. In connection with the contribution, the Company made customary representations, warranties and covenants to the 2015-1 Issuer in the purchase agreement. The Class A-1A, Class A-1B and Class A-1C and Class A-2 Notes are included in these consolidated financial statements. The 2015-1 Issuer Preferred Interests were eliminated in consolidation.

On the closing date of the 2015-1 Debt Securitization, the 2015-1 Issuer effected a one-time distribution to the Company of a substantial portion of the proceeds of the private placement of the 2015-1 Notes, net of expenses, which distribution was used to repay a portion of certain amounts outstanding under the SPV Credit Facility and the Credit Facility. As part of the 2015-1 Debt Securitization, certain first and second lien senior secured loans were distributed by the SPV to the Company pursuant to a distribution and contribution agreement.

On August 30, 2018, the Company and the 2015-1 Issuer closed the 2015-1 Debt Securitization Refinancing. On the closing date of the 2015-1 Debt Securitization Refinancing, the 2015-1 Issuer, among other things:

(a) refinanced the issued Class A-1A Notes by redeeming in full the Class A-1A Notes and issuing new AAA Class A-1-1-R Notes in an aggregate principal amount of $234,800 which bear interest at the three-month LIBOR plus 1.55%;

(b) refinanced the issued Class A-1B Notes by redeeming in full the Class A-1B Notes and issuing new AAA Class A-1-2-R Notes in an aggregate principal amount of $50,000 which bear interest at the three-month LIBOR plus 1.48% for the first 24 months and the three-month LIBOR plus 1.78% thereafter;

(c) refinanced the issued Class A-1C Notes by redeeming in full the Class A-1C Notes and issuing new AAA Class A-1-3-R Notes in an aggregate principal amount of $25,000 which bear interest at 4.56%;

(d) refinanced the issued Class A-2 Notes by redeeming in full the Class A-2 Notes and issuing new Class A-2-R Notes in an aggregate principal amount of $66,000 which bear interest at the three-month LIBOR plus 2.20%;

(e) issued new single-A Class B Notes and BBB- Class C Notes in aggregate principal amounts of $46,400 and $27,000, respectively, which bear interest at the three-month LIBOR plus 3.15% and the three-month LIBOR plus 4.00%, respectively;

(f) reduced the 2015-1 Issuer Preferred Interests by approximately $21,375 from a nominal value of $125,900 to approximately $104,525 at close; and

(g) extended the reinvestment period end date and maturity date applicable to the 2015-1 Issuer to October 15, 2023 and October 15, 2031, respectively.

Following the 2015-1 Debt Securitization Refinancing, the Company retained the 2015-1 Issuer Preferred Interests. The 2015-1R Notes in the 2015-1 Debt Securitization Refinancing were issued by the 2015-1 Issuer and are secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans.

On the closing date of the 2015-1 Debt Securitization Refinancing, the 2015-1 Issuer effected a one-time distribution to the Company of a substantial portion of the proceeds of the private placement of the 2015-1R Notes, net of expenses, which distribution was used to repay a portion of certain amounts outstanding under the SPV Credit Facility and the Credit Facility. As part of the 2015-1 Debt Securitization Refinancing, certain first and second lien senior secured loans were distributed by the SPV to the Company pursuant to a distribution and contribution agreement. The Company contributed the loans that comprised the initial closing date loan portfolio (including the loans distributed to the Company from the SPV) to the 2015-1 Issuer pursuant to a contribution agreement. Future loan transfers from the Company to the 2015-1 Issuer will be made pursuant to a sale agreement and are subject to the approval of the Company’s Board of Directors. Assets of the 2015-1 Issuer are not available to the creditors of the SPV or the Company. In connection with the issuance and sale of the 2015-1R Notes, the Company made customary representations, warranties and covenants in the purchase agreement.

During the reinvestment period, pursuant to the indenture governing the 2015-1R Notes, all principal collections received on the underlying collateral may be used by the 2015-1 Issuer to purchase new collateral under the direction of Investment Adviser in its capacity as collateral manager of the 2015-1 Issuer and in accordance with the Company’s investment strategy.

The Investment Adviser serves as collateral manager to the 2015-1 Issuer under a collateral management agreement (the “Collateral Management Agreement”). Pursuant to the Collateral Management Agreement, the 2015-1 Issuer pays management fees (comprised of base management fees, subordinated management fees and incentive management fees) to the Investment Adviser for rendering collateral management services. As per the Collateral Management Agreement, for the period the Company retains all of the 2015-1 Issuer Preferred Interests, the Investment Adviser does not earn management fees for providing such collateral management services. The Company currently retains all of the 2015-1 Issuer Preferred Interests, thus the Investment Adviser did not earn any management fees from the 2015-1 Issuer for the three and six month periods ended June 30, 2021 and 2020. Any such waived fees may not be recaptured by the Investment Adviser.

Pursuant to an undertaking by the Company in connection with the 2015-1 Debt Securitization Refinancing, the Company has agreed to hold on an ongoing basis the 2015-1 Issuer Preferred Interests with an aggregate dollar purchase price at least equal to 5% of the aggregate outstanding amount of all collateral obligations by the 2015-1 Issuer for so long as any securities of the 2015-1 Issuer remain outstanding. As of June 30, 2021, the Company was in compliance with its undertaking.

The 2015-1 Issuer pays ongoing administrative expenses to the trustee, independent accountants, legal counsel, rating agencies and independent managers in connection with developing and maintaining reports, and providing required services in connection with the administration of the 2015-1 Issuer.

As of June 30, 2021, the 2015-1R Notes were secured by 63 first lien and second lien senior secured loans with a total fair value of approximately $532,559 and cash of $25,434. The pool of loans in the securitization must meet certain requirements, including asset mix and concentration, term, agency rating, collateral coverage, minimum coupon, minimum spread and sector diversity requirements in the indenture governing the 2015-1R Notes.

For the six month periods ended June 30, 2021 and 2020, the effective annualized weighted average interest rates, which include amortization of debt issuance costs on the 2015-1R Notes, were 2.38% and 3.41%, respectively, based on floating LIBOR rates. As of June 30, 2021 and December 31, 2020 the weighted average interest rates were 2.32% and 2.42% respectively, based on floating LIBOR rates.

For the for the three and six month periods ended June 30, 2021 and 2020, the components of interest expense on the 2015-1R Notes were as follows:


	For the three month periods ended				For the six month periods ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
Interest expense	$	2,646	$	3,810	$	5,317	$	8,203
Amortization of deferred financing costs	61		61		123		123
Total interest expense and credit facility fees	$	2,707	$	3,871	$	5,440	$	8,326
Cash paid for interest expense	$	2,671	$	4,365	$	5,391	$	8,959

As of June 30, 2021 and December 31, 2020, $2,227 and $2,302, respectively, of interest expense was included in interest and credit facility fees payable.

9. COMMMITMENTS AND CONTINGENCIES

A summary of significant contractual payment obligations was as follows as of June 30, 2021 and December 31, 2020:


Payment Due by Period	June 30, 2021		December 31, 2020
Less than one year	$	—	$	—
1-3 years	—		—
3-5 years	555,060		537,949
More than 5 years	449,200		449,200
Total	$	1,004,260	$	987,149

In the ordinary course of its business, the Company enters into contracts or agreements that contain indemnification or warranties. Future events could occur that lead to the execution of these provisions against the Company. The Company believes that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made in the consolidated financial statements as of June 30, 2021 and December 31, 2020 for any such exposure.

We have in the past, currently are and may in the future become obligated to fund commitments such as revolving credit facilities, bridge financing commitments, or delayed draw commitments.

The Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans as of the indicated dates:


	Par Value as of
	June 30, 2021		December 31, 2020
Unfunded delayed draw commitments	$	105,221	$	73,292
Unfunded revolving loan commitments	71,186		76,216
Total unfunded commitments	$	176,407	$	149,508

10. NET ASSETS

The Company has the authority to issue 198,000,000 shares of common stock, par value $0.01 per share, and 2,000,000 shares of preferred stock, par value $0.01 per share.

Cumulative Convertible Preferred Stock

On May 5, 2020, the Company issued and sold 2,000,000 shares of Preferred Stock to an affiliate of Carlyle in a private placement at a price of $25 per share. The Preferred Stock has a liquidation preference equal to $25 per share (the “Liquidation Preference”) plus any accumulated but unpaid dividends up to but excluding the date of distribution. Dividends are payable on a quarterly basis in an initial amount equal to 7.00% per annum of the Liquidation Preference per share, payable in cash, or at the Company’s option, 9.00% per annum of the Liquidation Preference payable in additional shares of Preferred Stock. After May 5, 2027, the dividend rate will increase annually, in each case by 1.00% per annum.

The Preferred Stock is convertible, in whole or in part, at the option of the holder of the Preferred Stock into the number of shares of common stock equal to the Liquidation Preference plus any accumulated but unpaid dividends, divided by

an initial conversion price of $9.50, subject to certain adjustments to prevent dilution as set forth in the Company's Articles Supplementary. The conversion price as of June 30, 2021 was $9.49. At any time after May 5, 2023, the Company, with the approval of the Board of Directors, including a majority of the Independent Directors, will have the option to redeem all of the Preferred Stock for cash consideration equal to the Liquidation Preference plus any accumulated but unpaid dividends. The holders of the Preferred Stock will have the right to convert all or a portion of their shares of Preferred Stock prior to the date fixed for such redemption. At any time after May 5, 2027, the holders of the Preferred Stock will have the option to require the Company to redeem any or all of the then-outstanding Preferred Stock upon 90 days’ notice. The form of consideration used in any such redemption is at the option of the Board of Directors, including a majority of the Independent Directors, and may be cash consideration equal to the Liquidation Preference plus any accumulated but unpaid dividends, or shares of common stock. Holders also have the right to redeem the Preferred Stock upon a Change in Control (as defined in the Article Supplementary).

The following table summarizes the Company’s dividends declared on its preferred stock during the prior year and the current fiscal year to-date. Unless otherwise noted, dividends were declared and paid, or are payable, in cash.

Date Declared

Record Date

Payment Date

Per Share Amount

June 30, 2020

September 30, 2020

0.277

September 30, 2020

0.423

December 31, 2020

0.438

Total

1.138

March 31, 2021

0.438

June 30, 2021

0.438

Total

0.876

Company Stock Repurchase Program

On November 2, 2020, the Company's Board of Directors approved the continuation of the Company's common stock repurchase program (the "Company Stock Repurchase Program") until November 5, 2021, or until the approved dollar amount has been used to repurchase shares of common stock, as well as the expansion of the repurchase authorization to $150 million in the aggregate of the Company's outstanding common stock. This program may be suspended, extended, modified or discontinued by the Company at any time, subject to applicable law. The Company's Stock Repurchase Program was originally approved by the Company's Board of Directors on November 5, 2018 and announced on November 6, 2018. Since the inception of the Company Stock Repurchase Program through June 30, 2021, the Company has repurchased 8,358,344 shares of the Company's common stock at an average cost of $13.23 per share, or $110,575 in the aggregate, resulting in accretion to net assets per share of $0.46.

Changes in Net Assets

For the three and six month periods ended June 30, 2021, the Company repurchased and extinguished 598,947 and 1,109,994 shares, respectively, for $8,157 and $13,727, respectively. The following tables summarize capital activity for the three and six month periods ended June 30, 2021:


	Preferred Stock			Common Stock			Capital in Excess of Par Value		Offering Costs		Accumulated Net Investment Income (Loss)		Accumulated Net Realized Gain (Loss)		Accumulated Net Unrealized Appreciation (Depreciation)		Total Net Assets
	Shares	Amount		Shares	Amount
Balance, April 1, 2021	2,000,000	$	50,000	54,809,262	$	548	$	1,075,871	$	(1,633)	$	14,070	$	(138,542)	$	(89,794)	$	910,520
Repurchase of common stock	—	—		(598,947)	(6)		(8,151)		—		—		—		—		(8,157)

Net investment income (loss)	—	—		—	—		—		—		21,637		—		—		21,637
Net realized gain (loss)	—	—		—	—		—		—		—		1,889		—		1,889
Net change in unrealized appreciation (depreciation)	—	—		—	—		—		—		—		—		19,342		19,342
Dividends declared on common stock and preferred stock	—	—		—	—		—		—		(20,400)		—		—		(20,400)
Balance, June 30, 2021	2,000,000	$	50,000	54,210,315	$	542	$	1,067,720	$	(1,633)	$	15,307	$	(136,653)	$	(70,452)	$	924,831



	Preferred Stock			Common Stock			Capital in Excess of Par Value		Offering Costs		Accumulated Net Investment Income (Loss)		Accumulated Net Realized Gain (Loss) on Investments		Accumulated Net Unrealized Appreciation (Depreciation)		Total Net Assets
	Shares	Amount		Shares	Amount
Balance, January 1, 2021	2,000,000	$	50,000	55,320,309	$	553	$	1,081,436	$	(1,633)	$	14,568	$	(140,133)	$	(103,428)	$	901,363
Repurchase of common stock	—	—		(1,109,994)	(11)		(13,716)		—		—		—		—		(13,727)
Issuance of Preferred Stock	—	—		—	—		—		—		—		—		—		—
Net investment income (loss)	—	—		—	—		—		—		42,316		—		—		42,316
Net realized gain (loss)	—	—		—	—		—		—		—		3,480		—		3,480
Net change in unrealized appreciation (depreciation)	—	—		—	—		—		—		—		—		32,976		32,976
Dividends declared on common stock and preferred stock	—	—		—	—		—		—		(41,577)		—		—		(41,577)
Balance, June 30, 2021	2,000,000	$	50,000	54,210,315	$	542	$	1,067,720	$	(1,633)	$	15,307	$	(136,653)	$	(70,452)	$	924,831

For the three and six month periods ended June 30, 2020, the Company repurchased and extinguished 0 and 1,455,195 shares, respectively, for $0 and $16,003, respectively. The following tables summarize capital activity for the three and six month periods ended June 30, 2020:


	Preferred Stock			Common Stock			Capital in Excess of Par Value		Offering Costs		Accumulated Net Investment Income (Loss)		Accumulated Net Realized Gain (Loss)		Accumulated Net Unrealized Appreciation (Depreciation)		Total Net Assets
	Shares	Amount		Shares	Amount
Balance, April 1, 2020	—	$	—	56,308,616	$	563	$	1,093,250	$	(1,633)	$	13,506	$	(84,501)	$	(222,651)	$	798,534

Issuance of Preferred Stock	2,000,000	50,000		—	—		—		—		—		—		—		50,000

Net investment income (loss)	—	—		—	—		—		—		21,692		—		—		21,692
Net realized gain (loss)	—	—		—	—		—		—		—		(47,149)		—		(47,149)
Net change in unrealized appreciation (depreciation)	—	—		—	—		—		—		—		—		81,615		81,615
Dividends declared	—	—		—	—		—		—		(21,388)		—		—		(21,388)
Balance, June 30, 2020	2,000,000	$	50,000	56,308,616	$	563	$	1,093,250	$	(1,633)	$	13,810	$	(131,650)	$	(141,036)	$	883,304



	Preferred Stock			Common Stock			Capital in Excess of Par Value		Offering Costs		Accumulated Net Investment Income (Loss)		Accumulated Net Realized Gain (Loss)		Accumulated Net Unrealized Appreciation (Depreciation)		Total Net Assets
	Shares	Amount		Shares	Amount
Balance, January 1, 2020	—	$	—	57,763,811	$	578	$	1,109,238	$	(1,633)	$	10,368	$	(82,654)	$	(79,426)	$	956,471
Repurchase of common stock	—	—		(1,455,195)	(15)		(15,988)		—		—		—		—		(16,003)
Issuance of Preferred Stock	2,000,000	50,000		—	—		—		—		—		—		—		50,000

Net investment income (loss)	—	—		—	—		—		—		45,664		—		—		45,664
Net realized gain (loss) on investments	—	—		—	—		—		—		—		(48,996)		—		(48,996)
Net change in unrealized appreciation (depreciation) on investments	—	—		—	—		—		—		—		—		(61,610)		(61,610)
Dividends declared	—	—		—	—		—		—		(42,222)		—		—		(42,222)
Balance, June 30, 2020	2,000,000	$	50,000	56,308,616	$	563	$	1,093,250	$	(1,633)	$	13,810	$	(131,650)	$	(141,036)	$	883,304

Earnings Per Share

The Company calculates earnings per share in accordance with ASC 260. Basic earnings per share is calculated by dividing the net increase (decrease) in net assets resulting from operations, less preferred dividends, by the weighted average number of common shares outstanding. Diluted earnings per share gives effect to all dilutive potential common shares

outstanding using the if-converted method for the convertible Preferred Stock. Diluted earnings per share excludes all dilutive potential common shares if their effect is anti-dilutive. Basic and diluted earnings per common share were as follows:


	For the three month period ended June 30, 2021				For the six month period ended June 30, 2021
	Basic		Diluted		Basic		Diluted
Net increase (decrease) in net assets resulting from operations attributable to Common Stockholders	$	41,993	$	42,868	$	77,022	$	78,772
Weighted-average common shares outstanding	54,537,840		59,805,142		54,787,041		60,054,343
Basic and diluted earnings per share	$	0.77	$	0.72	$	1.41	$	1.31


	For the three month period ended June 30, 2020				For the six month period ended June 30, 2020
	Basic		Diluted		Basic		Diluted
Net increase (decrease) in net assets resulting from operations attributable to Common Stockholders	$	55,604	$	56,158	$	(65,496)	$	(65,496)
Weighted-average common shares outstanding	56,308,616		59,547,482		56,710,405		56,710,405
Basic and diluted earnings per share	$	0.99	$	0.94	$	(1.15)	$	(1.15)

Common Stock Dividends

The following table summarizes the Company’s dividends declared on its common stock during the two most recent fiscal years and the current fiscal year to-date:


Date Declared	Record Date	Payment Date	Per Common Share Amount










February 22, 2019	March 29, 2019	April 17, 2019	$	0.37
May 6, 2019	June 28, 2019	July 17, 2019	$	0.37
June 17, 2019	June 28, 2019	July 17, 2019	$	0.08	(1)
August 5, 2019	September 30, 2019	October 17, 2019	$	0.37
November 4, 2019	December 31, 2019	January 17, 2020	$	0.37
December 12, 2019	December 31, 2019	January 17, 2020	$	0.18	(1)
February 24, 2020	March 31, 2020	April 17, 2020	$	0.37
May 4, 2020	June 30, 2020	July 17, 2020	$	0.37
August 3, 2020	September 30, 2020	October 16, 2020	$	0.32	(2)
August 3, 2020	September 30, 2020	October 16, 2020	$	0.05	(1)
November 2, 2020	December 31, 2020	January 15, 2021	$	0.32
November 2, 2020	December 31, 2020	January 15, 2021	$	0.04	(1)
February 22, 2021	March 31, 2021	April 16, 2021	$	0.32
February 22, 2021	March 31, 2021	April 16, 2021	$	0.05	(1)
May 3, 2021	June 30, 2021	July 15, 2021	$	0.32
May 3, 2021	June 30, 2021	July 15, 2021	$	0.04	(1)

(1)Represents a special/supplemental dividend.

(2)The Company updated its dividend policy such that the base dividend is $0.32 per share of common stock, effective with the third quarter 2020 dividend.

11. CONSOLIDATED FINANCIAL HIGHLIGHTS

The following is a schedule of consolidated financial highlights for the six month periods ended June 30, 2021 and 2020:


	For the six month periods ended
	June 30, 2021			June 30, 2020
Per Common Share Data:
Net asset value per common share, beginning of period	$	15.39		$	16.56
Net investment income (loss) (1)	0.74			0.80
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments and non-investment assets and liabilities	0.67			(1.96)
Net increase (decrease) in net assets resulting from operations	1.41			(1.16)
Dividends declared (2)	(0.73)			(0.74)
Other	0.02			—
Accretion due to share repurchases	0.05			0.14
Net asset value per common share, end of period	$	16.14		$	14.80
Market price per common share, end of period	$	13.21		$	8.57

Number of common shares outstanding, end of period	54,210,315			56,308,616
Total return based on net asset value (3)	9.62		%	(6.16)		%
Total return based on market price (4)	35.87		%	(30.42)		%
Net assets attributable to Common Stockholders, end of period	$	874,831		$	833,304
Ratio to average net assets attributable to Common Stockholders(5):
Expenses before incentive fees	3.77		%	4.72		%
Expenses after incentive fees	4.78		%	5.86		%
Net investment income (loss)	4.91		%	5.33		%
Interest expense and credit facility fees	1.75		%	2.69		%
Ratios/Supplemental Data:
Asset coverage, end of period	182.98		%	176.55		%
Portfolio turnover	19.29		%	19.08		%
Weighted-average shares outstanding	54,787,041			56,710,405

(1)Net investment income (loss) per common share was calculated as net investment income (loss) less the preferred dividend for the period divided by the weighted average number of common shares outstanding for the period.

(2)Dividends declared per common share was calculated as the sum of dividends on common stock declared during the period divided by the number of common shares outstanding at each respective quarter-end date (refer to Note 10, Net Assets).

(3)Total return based on net asset value (not annualized) is based on the change in net asset value per common share during the period plus the declared dividends on common stock, assuming reinvestment of dividends in accordance with the dividend reinvestment plan, divided by the beginning net asset value for the period.

(4)Total return based on market value (not annualized) is calculated as the change in market value per common share during the period plus the declared dividends on common stock, assuming reinvestment of dividends in accordance with the dividend reinvestment plan, divided by the beginning market price for the period.

(5)These ratios to average net assets attributable to Common Stockholders have not been annualized.

12. LITIGATION

The Company may become party to certain lawsuits in the ordinary course of business. The Company does not believe that the outcome of current matters, if any, will materially impact the Company or its consolidated financial statements. As of June 30, 2021 and December 31, 2020, the Company was not subject to any material legal proceedings, nor, to the Company’s knowledge, is any material legal proceeding threatened against the Company.

In addition, portfolio investments of the Company could be the subject of litigation or regulatory investigations in the ordinary course of business. The Company does not believe that the outcome of any current contingent liabilities of its portfolio investments, if any, will materially affect the Company or these consolidated financial statements.

13. TAX

The Company has not recorded a liability for any uncertain tax positions pursuant to the provisions of ASC 740, Income Taxes, as of June 30, 2021 and December 31, 2020.

In the normal course of business, the Company is subject to examination by federal and certain state, local and foreign tax regulators. As of June 30, 2021 and December 31, 2020, the Company had filed tax returns and therefore is subject to examination.

The Company’s taxable income for each period is an estimate and will not be finally determined until the Company files its tax return for each year. Therefore, the final taxable income, and the taxable income earned in each period and carried forward for distribution in the following period, may be different than this estimate. The estimated tax character of dividends declared on preferred stock and common stock for six month periods ended June 30, 2021 and 2020 was as follows:


	For the six month periods ended
	June 30, 2021		June 30, 2020
Ordinary income	$	41,577	$	42,222
Tax return of capital	$	—	$	—

14. SUBSEQUENT EVENTS

Subsequent events have been evaluated through the date the consolidated financial statements were issued. There have been no subsequent events that require recognition or disclosure through the date the consolidated financial statements were issued, except as disclosed below and elsewhere in the consolidated financial statements.

On August 2, 2021, the Board of Directors declared a base quarterly common dividend of $0.32 plus a supplemental common dividend of $0.06, which are payable on October 15, 2021 to common stockholders of record on September 30, 2021.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

(dollar amounts in thousands, except per share data, unless otherwise indicated)

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

We have included or incorporated by reference in this Form 10-Q, and from time to time our management may make, “forward-looking statements”. These forward-looking statements are not historical facts, but instead relate to future events or the future performance or financial condition of TCG BDC, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “TCG BDC” or the “Company”). These statements are based on current expectations, estimates and projections about us, our current or prospective portfolio investments, our industry, our beliefs, and our assumptions. The forward-looking statements contained in this Form 10-Q involve a number of risks and uncertainties, including statements concerning:

•our, or our portfolio companies’, future business, operations, operating results or prospects, including our and their ability to achieve our respective objectives as a result of the current COVID-19 pandemic;

•the return or impact of current and future investments;

•the general economy and its impact on the industries in which we invest and the impact of the COVID-19 pandemic thereon;

•the impact of any protracted decline in the liquidity of credit markets on our business and the impact of the COVID-19 pandemic thereon;

•the impact of fluctuations in interest rates on our business, including from changes in or the discontinuation of LIBOR, on our business;

•the valuation of investments in portfolio companies, particularly those having no liquid trading market, and the impact of the COVID-19 pandemic thereon;

•the impact of changes in laws, policies or regulations (including the interpretation thereof) affecting our operations or the operations of our portfolio companies;

•the valuation of our investments in portfolio companies, particularly those having no liquid trading market, and the impact of the COVID-19 pandemic thereon;

•our ability to recover unrealized losses;

•market conditions and our ability to access alternative debt markets and additional debt and equity capital, and the impact of the COVID-19 pandemic thereon;

•our contractual arrangements and relationships with third parties;

•uncertainty surrounding the financial stability of the United States, Europe and China;

•the social, geopolitical, financial, trade and legal implications of the exit of the United Kingdom from the European Union, or Brexit;

•competition with other entities and our affiliates for investment opportunities;

•the speculative and illiquid nature of our investments;

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

•our expected financings and investments;

•the adequacy of our cash resources and working capital;

•the timing, form and amount of any dividend distributions;

•the timing of cash flows, if any, from the operations of our portfolio companies and the impact of the COVID-19 pandemic thereon;

•the ability to consummate acquisitions;

•the ability of our investment adviser to locate suitable investments for us and to monitor and administer our investments;

•currency fluctuations could adversely affect the results of our investments in foreign companies, particularly to the extent that we receive payments denominated in foreign currency rather than U.S. dollars;

•the ability of The Carlyle Group Employee Co., L.L.C. to attract and retain highly talented professionals that can provide services to our investment adviser and administrator;

•our ability to maintain our status as a business development company; and

•our intent to satisfy the requirements of a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended.

We use words such as “anticipates,” “believes,” “expects,” “intends,” “will,” “should,” “may,” “plans,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “targets,” “projects,” “outlook,” “potential,” “predicts” and variations of these words and similar expressions to identify forward-looking statements, although not all forward-looking statements include these words. Our actual results and condition could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Risk Factors” in Part II, Item 1A of our annual report on Form 10-K for the year ended December 31, 2020 (our "2020 Form 10-K").

We have based the forward-looking statements included in this Form 10-Q on information available to us on the date of this Form 10-Q, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the Securities and Exchange Commission (the “SEC”), including our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

OVERVIEW

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with Part I, Item 1 of this Form 10-Q “Financial Statements.” This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to those described in “Risk Factors” in Part I, Item 1A of our 2020 Form 10-K. Our actual results could differ materially from those anticipated by such forward-looking statements due to factors discussed under “Risk Factors” in our 2020 Form 10-K and “Cautionary Statements Regarding Forward-Looking Statements” appearing elsewhere in this Form 10-Q.

We are a Maryland corporation formed on February 8, 2012, and structured as an externally managed, non-diversified closed-end investment company. We have elected to be regulated as a BDC under the Investment Company Act. We have elected to be treated, and intend to continue to comply with the requirements to qualify annually, as a RIC under Subchapter M of the Code.

Our investment objective is to generate current income and capital appreciation primarily through debt investments in U.S. middle market companies. Our core investment strategy focuses on lending to U.S. middle market companies, which we define as companies with approximately $25 million to $100 million of EBITDA, which we believe is a useful proxy for cash flow. We complement this core strategy with additive, diversifying assets including, but not limited to, specialty lending investments. We seek to achieve our investment objective primarily through direct origination of Middle Market Senior Loans, with the balance of our assets invested in higher yielding investments (which may include unsecured debt, mezzanine debt and investments in equities). We generally make Middle Market Senior Loans to private U.S. middle market companies that are, in many cases, controlled by private equity firms. Depending on market conditions, we expect that between 70% and 80% of the value of our assets will be invested in Middle Market Senior Loans. We expect that the composition of our portfolio will change over time given our Investment Adviser’s view on, among other things, the economic and credit environment (including with respect to interest rates) in which we are operating.

On June 19, 2017, we closed our IPO, issuing 9,454,200 shares of our common stock (including shares issued pursuant to the exercise of the underwriters’ over-allotment option on July 5, 2017) at a public offering price of $18.50 per share. Net of underwriting costs, we received cash proceeds of $169,488. Shares of common stock of TCG BDC began trading on the Nasdaq Global Select Market under the symbol “CGBD” on June 14, 2017.

On June 9, 2017, we acquired NF Investment Corp. (“NFIC”), a BDC managed by our Investment Advisor (the “NFIC Acquisition”). As a result, we issued 434,233 shares of common stock to the NFIC stockholders and approximately $145,602 in cash, and acquired approximately $153,648 in net assets.

We are externally managed by our Investment Adviser, an investment adviser registered under the Advisers Act. Our Administrator provides the administrative services necessary for us to operate. Both our Investment Adviser and our Administrator are wholly owned subsidiaries of Carlyle Investment Management L.L.C., a subsidiary of Carlyle. Our Investment Adviser’s five-person investment committee is responsible for reviewing and approving our investment opportunities. The members of the investment committee have experience investing through different credit cycles. Our Investment Adviser’s investment committee comprises five of the most senior credit professional within the Carlyle Global

Credit segment, with backgrounds and expertise across asset classes and over 26 years of average industry experience and 10 years of average tenure. In addition, our Investment Adviser and its investment team are supported by a team of finance, operations and administrative professionals currently employed by Carlyle Employee Co., a wholly owned subsidiary of Carlyle.

In conducting our investment activities, we believe that we benefit from the significant scale, relationships and resources of Carlyle, including our Investment Adviser and its affiliates. We have operated our business as a BDC since we began our investment activities in May 2013.

KEY COMPONENTS OF OUR RESULTS OF OPERATIONS

Investments

Our level of investment activity can and does vary substantially from period to period depending on many factors, including the amount of debt available to middle market companies, the general economic environment and the competitive environment for the type of investments we make.

Revenue

We generate revenue primarily in the form of interest income on debt investments we hold. In addition, we generate income from dividends on direct equity investments, capital gains on the sales of loans and debt and equity securities and various loan origination and other fees. Our debt investments generally have a stated term of five to eight years and generally bear interest at a floating rate usually determined on the basis of a benchmark such as LIBOR. Interest on these debt investments is generally paid quarterly. In some instances, we receive payments on our debt investments based on scheduled amortization of the outstanding balances. In addition, we receive repayments of some of our debt investments prior to their scheduled maturity date. The frequency or volume of these repayments fluctuates significantly from period to period. Our portfolio activity also reflects the proceeds of sales of securities. We may also generate revenue in the form of commitment, origination, amendment, structuring or due diligence fees, fees for providing managerial assistance and consulting fees.

Expenses

Our primary operating expenses include the payment of: (i) investment advisory fees, including base management fees and incentive fees, to our Investment Adviser pursuant to the Investment Advisory Agreement between us and our Investment Adviser; (ii) costs and other expenses and our allocable portion of overhead incurred by our Administrator in performing its administrative obligations under the Administration Agreement between us and our Administrator; and (iii) other operating expenses as detailed below:

•administration fees payable under our Administration Agreement and Sub-Administration Agreements, including related expenses;

•the costs of any offerings of our common stock and other securities, if any;

•calculating individual asset values and our net asset value (including the cost and expenses of any independent valuation firms);

•expenses, including travel expenses, incurred by our Investment Adviser, or members of our Investment Adviser team managing our investments, or payable to third parties, performing due diligence on prospective portfolio companies and, if necessary, expenses of enforcing our rights;

•certain costs and expenses relating to distributions paid on our shares;

•debt service and other costs of borrowings or other financing arrangements;

•the allocated costs incurred by our Investment Adviser in providing managerial assistance to those portfolio companies that request it;

•amounts payable to third parties relating to, or associated with, making or holding investments;

•the costs associated with subscriptions to data service, research-related subscriptions and expenses and quotation equipment and services used in making or holding investments;

•transfer agent and custodial fees;

•costs of hedging;

•commissions and other compensation payable to brokers or dealers;

•federal and state registration fees;

•any U.S. federal, state and local taxes, including any excise taxes;

•independent director fees and expenses;

•costs of preparing financial statements and maintaining books and records, costs of preparing tax returns, costs of Sarbanes-Oxley Act compliance and attestation and costs of filing reports or other documents with the SEC (or other regulatory bodies), and other reporting and compliance costs, including registration and listing fees, and the compensation of professionals responsible for the preparation or review of the foregoing;

•the costs of any reports, proxy statements or other notices to our stockholders (including printing and mailing costs), the costs of any stockholders’ meetings and the compensation of investor relations personnel responsible for the preparation of the foregoing and related matters;

•the costs of specialty and custom software for monitoring risk, compliance and overall portfolio, including any development costs incurred prior to the filing of our election to be regulated as a BDC;

•our fidelity bond;

•directors and officers/errors and omissions liability insurance, and any other insurance premiums;

•indemnification payments;

•direct fees and expenses associated with independent audits, agency, consulting and legal costs; and

•all other expenses incurred by us or our Administrator in connection with administering our business, including our allocable share of certain officers and their staff compensation.

We expect our general and administrative expenses to be relatively stable or to decline as a percentage of total assets during periods of asset growth and to increase during periods of asset declines.

PORTFOLIO AND INVESTMENT ACTIVITY

Below is a summary of certain characteristics of our investment portfolio as of June 30, 2021 and December 31, 2020.


	As of
	June 30, 2021			December 31, 2020
Fair value of investments	$	1,872,311		$	1,825,749
Count of investments	161			160
Count of portfolio companies / investment funds	118			117
Count of industries	27			27

Percentage of total investment fair value:


First lien debt	66.5		%	67.0		%
Second lien debt	16.7		%	15.6		%
Total secured debt	83.2		%	82.6		%
Investment Funds	13.9		%	15.5		%
Equity investments	2.9		%	1.9		%

Percentage of debt investment fair value:
Floating rate (1)	99.1		%	99.1		%
Fixed interest rate	0.9		%	0.9		%

(1) Primarily subject to interest rate floors.

Our investment activity for the three month periods ended June 30, 2021 and 2020 is presented below (information presented herein is at amortized cost unless otherwise indicated):


	For the three month periods ended
	June 30, 2021			June 30, 2020
Investments:
Total investments, beginning of period	$	1,924,992		$	2,247,327
New investments purchased	212,977			61,595
Net accretion of discount on investments	2,003			1,473
Net realized gain (loss) on investments	1,945			(47,784)
Investments sold or repaid	(205,589)			(214,262)
Total Investments, end of period	$	1,936,328		$	2,048,349
Principal amount of investments funded:


First Lien Debt	$	183,647		$	62,194
Second Lien Debt	12,378			368

Equity Investments	19,401			518
Investment Funds	—			—
Total	$	215,426		$	63,080
Principal amount of investments sold or repaid:


First Lien Debt	$	(172,259)		$	(261,200)
Second Lien Debt	(5,865)			(3,000)

Equity Investments	(1,500)			—
Investment Funds	(23,000)			—
Total	$	(202,624)		$	(264,200)
Number of new funded investments	10			5
Average amount of new funded investments	$	12,819		$	8,656
Percentage of new funded debt investments at floating interest rates	100		%	100		%
Percentage of new funded debt investments at fixed interest rates	—		%	—		%

As of June 30, 2021 and December 31, 2020, investments consisted of the following:


	June 30, 2021				December 31, 2020
	Amortized Cost		Fair Value		Amortized Cost		Fair Value


First Lien Debt	$	1,301,004	$	1,246,018	$	1,298,154	$	1,224,063
Second Lien Debt	314,632		313,130		297,962		284,523
Equity Investments	49,596		53,379		32,754		33,877
Investment Funds	271,096		259,784		294,096		283,286
Total	$	1,936,328	$	1,872,311	$	1,922,966	$	1,825,749

The weighted average yields (1) for our first and second lien debt, based on the amortized cost and fair value as of June 30, 2021 and December 31, 2020, were as follows:


	June 30, 2021				December 31, 2020
	Amortized Cost		Fair Value		Amortized Cost		Fair Value


First Lien Debt	7.41	%	7.73	%	7.21	%	7.65	%
Second Lien Debt	9.07	%	9.11	%	9.15	%	9.59	%
First and Second Lien Debt Total	7.73	%	8.01	%	7.57	%	8.01	%

(1)Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of June 30, 2021 and December 31, 2020. Weighted average yield on debt and income producing securities at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of original issue discount "OID") and market discount

earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at fair value included in such securities. Weighted average yield on debt and income producing securities at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at amortized cost included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above.

Total weighted average yields (which includes the effect of accretion of discount and amortization of premiums) of our first and second lien debt investments as measured on an amortized cost basis increased from 7.57% to 7.73% from December 31, 2020 to June 30, 2021.

The following table summarizes the fair value of our performing and non-accrual/non-performing investments as of June 30, 2021 and December 31, 2020:


	June 30, 2021				December 31, 2020
	Fair Value		Percentage		Fair Value		Percentage
Performing	$	1,810,620	96.7	%	$	1,767,613	96.8	%
Non-accrual (1)	61,691		3.3		58,136		3.2
Total	$	1,872,311	100.0	%	$	1,825,749	100.0	%

(1)For information regarding our non-accrual policy, see Note 2 to the consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

See the Consolidated Schedules of Investments as of June 30, 2021 and December 31, 2020 in our consolidated financial statements in Part I, Item 1 of this Form 10-Q for more information on these investments, including a list of companies and type and amount of investments.

As part of the monitoring process, our Investment Adviser has developed risk policies pursuant to which it regularly assesses the risk profile of each of our debt investments and rates each of them based on categories, which we refer to as “Internal Risk Ratings”. Pursuant to these risk policies, an Internal Risk Rating of 1 – 5, which are defined below, is assigned to each debt investment in our portfolio. Key drivers of internal risk ratings include financial metrics, financial covenants, liquidity and enterprise value coverage.

Internal Risk Ratings Definitions


Rating						Definition
1						Borrower is operating above expectations, and the trends and risk factors are generally favorable.

2						Borrower is operating generally as expected or at an acceptable level of performance. The level of risk to our initial cost bases is similar to the risk to our initial cost basis at the time of origination. This is the initial risk rating assigned to all new borrowers.

3						Borrower is operating below expectations and level of risk to our cost basis has increased since the time of origination. The borrower may be out of compliance with debt covenants. Payments are generally current although there may be higher risk of payment default.

4						Borrower is operating materially below expectations and the loan’s risk has increased materially since origination. In addition to the borrower being generally out of compliance with debt covenants, loan payments may be past due, but generally not by more than 120 days. It is anticipated that we may not recoup our initial cost basis and may realize a loss of our initial cost basis upon exit.

5						Borrower is operating substantially below expectations and the loan’s risk has increased substantially since origination. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. It is anticipated that we will not recoup our initial cost basis and may realize a substantial loss of our initial cost basis upon exit.

Our Investment Adviser monitors and, when appropriate, changes the investment ratings assigned to each debt investment in our portfolio. Our Investment Adviser reviews our investment ratings in connection with our quarterly valuation process. The below table summarizes the Internal Risk Ratings as of June 30, 2021 and December 31, 2020.


	June 30, 2021				December 31, 2020
	Fair Value		% of Fair Value		Fair Value		% of Fair Value
(dollar amounts in millions)
Internal Risk Rating 1	$	6.0	0.4	%	$	19.1	1.3	%
Internal Risk Rating 2	1,157.7		74.2		1,047.5		69.4
Internal Risk Rating 3	333.7		21.4		361.1		23.9
Internal Risk Rating 4	26.5		1.7		48.2		3.2
Internal Risk Rating 5	35.2		2.3		32.8		2.2
Total	$	1,559.1	100.0	%	$	1,508.6	100.0	%

As of June 30, 2021 and December 31, 2020, the weighted average Internal Risk Rating of our debt investment portfolio was 2.3 and 2.4, respectively. As of June 30, 2021, five of our debt investments, with an aggregate fair value of $61.7 million were assigned an Internal Risk Rating of 4-5. As of December 31, 2020, six of our debt investments, with an aggregate fair value of $80.9 million were assigned an Internal Risk Rating of 4-5. As of June 30, 2021 and December 31, 2020, five and five of our debt investments were on non-accrual status, respectively. Our debt investments non-accrual status had a fair value of $61.7 million and $58.1 million, respectively, which represented approximately 3.3% and 3.2%, respectively, of our total investments at fair value as of June 30, 2021 and December 31, 2020. The remaining first and second lien debt investments were performing and current on their interest payments as of June 30, 2021 and December 31, 2020.

CONSOLIDATED RESULTS OF OPERATIONS

For the three month and six month periods ended June 30, 2021 and 2020

The net increase or decrease in net assets from operations may vary substantially from period to period as a result of various factors, including the recognition of realized gains and losses and net change in unrealized appreciation and depreciation. As a result, quarterly comparisons may not be meaningful.

Investment Income

Investment income for the three month and six month periods ended June 30, 2021 and 2020 was as follows:


	For the three month periods ended				For the six month periods ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
Investment income
First Lien Debt	$	27,598	$	31,821	$	53,182	$	67,471
Second Lien Debt	6,829		7,604		13,529		15,730
Equity Investments	741		333		1,777		518
Investment Funds	7,488		5,500		15,016		12,049
Cash	—		17		—		52
Total investment income	$	42,656	$	45,275	$	83,504	$	95,820

The decrease in investment income for the three and six month periods ended June 30, 2021 from the comparable periods in 2020 was primarily driven by a lower average loan balance. As of June 30, 2021, the size of our portfolio decreased to $1,936,328 from $2,048,349 as of June 30, 2020, at amortized cost. As of June 30, 2021, the weighted average yield of our first and second lien debt investments increased to 7.73% from 7.34% as of June 30, 2020 on amortized cost, primarily due to new fundings being originated at a higher weighted average yield than the yield of positions being repaid.

Interest income on our first and second lien debt investments is dependent on the composition and credit quality of the portfolio. Generally, we expect the portfolio to generate predictable quarterly interest income based on the terms stated in each loan’s credit agreement. As of June 30, 2021 and 2020, five and six first lien debt investments, respectively, were on non-accrual status. Non-accrual investments had a fair value of $61,691 and $71,308 respectively, which represented approximately 3.3% and 3.7% of total investments at fair value, respectively, as of June 30, 2021 and 2020. The remaining first and second lien debt investments were performing and current on their interest payments as of June 30, 2021 and 2020.

For the three month periods ended June 30, 2021 and 2020, the Company earned $2,407 and $3,547, respectively, in other income. For the six month periods ended June 30, 2021 and 2020, the Company earned $3,877 and $5,891, respectively, in other income. The decrease in other income for the three and six month periods ended June 30, 2021 from the comparable period in 2020 was primarily driven by lower prepayment and underwriting fees.

For the three month periods ended June 30, 2021 and 2020, the Company earned $7,488 and $5,500, respectively, in dividend and interest income from the Investment Funds. For the six month periods ended June 30, 2021 and 2020, the Company earned $15,016 and $12,049, respectively, in dividend and interest income from the Investment Funds. The increase for the three and six month periods ended June 30, 2021 from the comparable periods in 2020 was driven by the formation of Credit Fund II during the fourth quarter of 2020 and by a higher dividend from Credit Fund, partially offset by a decrease in interest income on the Mezzanine Loan to Credit Fund.

Net investment income (loss) for the three month and six month periods ended June 30, 2021 and 2020 was as follows:


	For the three month periods ended				For the six month periods ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
Total investment income	$	42,656	$	45,275	$	83,504	$	95,820
Net expenses (including excise tax expense)	(21,019)		(23,583)		(41,188)		(50,156)
Net investment income (loss)	$	21,637	$	21,692	$	42,316	$	45,664

Expenses


	For the three month periods ended				For the six month periods ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
Base management fees	$	6,991	$	7,065	$	13,791	$	14,451
Incentive fees	4,420		4,667		8,677		9,753
Professional fees	917		678		1,608		1,345
Administrative service fees	375		266		657		372
Interest expense	7,055		9,443		14,030		21,622
Credit facility fees	505		788		1,024		1,378
Directors’ fees and expenses	150		121		266		217
Other general and administrative	467		455		872		866
Excise tax expense	139		100		263		152
Expenses	$	21,019	$	23,583	$	41,188	$	50,156

Interest expense and credit facility fees for the three month and six month periods ended June 30, 2021 and 2020 comprised the following:


	For the three month periods ended						For the six month periods ended
	June 30, 2021			June 30, 2020			June 30, 2021			June 30, 2020
Interest expense	$	7,055		$	9,443		$	14,030		$	21,622
Facility unused commitment fee	314			409			642			727
Amortization of deferred financing costs	191			352			382			595
Other fees	—			27			—			56
Total interest expense and credit facility fees	$	7,560		$	10,231		$	15,054		$	23,000
Cash paid for interest expense	$	7,259		$	10,700		$	14,174		$	23,347

Average principal debt outstanding	$	995,060		$	1,149,536		$	987,351		$	1,193,000
Weighted average interest rate	2.80		%	3.25		%	2.80		%	3.57		%

The decrease in interest expense for the three and six month periods ended June 30, 2021 compared to the comparable periods in 2020 was primarily driven by lower average principal balances outstanding and lower LIBOR.

Below is a summary of the base management fees and incentive fees incurred during the three month and six month periods ended June 30, 2021 and 2020.


	For the three month periods ended				For the six month periods ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
Base management fees	$	6,991	$	7,065	$	13,791	$	14,451
Incentive fees on pre-incentive fee net investment income	4,420		4,667		8,677		9,753
Realized capital gains incentive fees	—		—		—		—
Accrued capital gains incentive fees	—		—		—		—
Total capital gains incentive fees	—		—		—		—
Total incentive fees	4,420		4,667		8,677		9,753
Total base management fees and incentive fees	$	11,411	$	11,732	$	22,468	$	24,204

The decrease in base management fees and incentive fees related to pre-incentive fee net investment income for the three month and six month periods ended June 30, 2021 from the comparable periods in 2020 was driven by lower investment fair value and lower pre-incentive fee net investment income, respectively.

For the three month and six month periods ended June 30, 2021 and 2020, there were no accrued capital gains incentive fees based upon the cumulative net realized and unrealized appreciation (depreciation) as of June 30, 2021 and 2020. The accrual for any capital gains incentive fee under accounting principles generally accepted in the United States (“U.S. GAAP”) in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. See Note 4 to the consolidated financial statements included in Part I, Item 1 of this Form 10-Q for more information on the incentive and base management fees.

Professional fees include legal, rating agencies, audit, tax, valuation, technology and other professional fees incurred related to the management of the Company. Administrative service fees represent fees paid to the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the administration agreement, including our allocable portion of the cost of certain of our executive officers and their respective staff. Other general and administrative expenses include insurance, filing, research, subscriptions and other costs.

Net Realized Gain (Loss) and Net Change in Unrealized Appreciation (Depreciation) on Investments

During the three month and six month periods ended June 30, 2021, we had realized gains on 8 and 16 investments, respectively, totaling approximately $1,965 and $3,638, respectively, which was offset by realized losses on 2 and 2 investments, respectively, totaling approximately $20 and $20, respectively. During the three month and six month periods ended June 30, 2020, we had realized gains on 2 and 6 investments, respectively, totaling approximately $130 and $757, respectively, which was offset by realized losses on 14 and 17 investments, respectively, totaling approximately $47,914 and $50,238, respectively. During the three month and six month periods ended June 30, 2021, we had unrealized appreciation on 90 and 105 investments, respectively, totaling approximately $24,334 and $44,000, respectively, which was offset by unrealized depreciation on 66 and 60 investments, respectively, totaling approximately $5,046 and $10,853, respectively. During the three month and six month periods ended June 30, 2020, we had unrealized appreciation on 105 and 35 investments, respectively, totaling approximately $102,766 and $44,593, respectively, which was offset by unrealized depreciation on 33 and 116 investments, respectively, totaling approximately $20,510 and $107,900, respectively.

Net realized gain (loss) and net change in unrealized appreciation (depreciation) by the type of investments for the three month and six month periods ended June 30, 2021 and 2020 were as follows:


	For the three month periods ended				For the six month periods ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
Net realized gain (loss) on investments	$	1,945	$	(47,784)	$	3,618	$	(49,481)
Net change in unrealized appreciation (depreciation) on investments	19,288		82,256		33,147		(63,307)
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments	$	21,233	$	34,472	$	36,765	$	(112,788)

Net realized gain (loss) and net change in unrealized appreciation (depreciation) by the type of investments for the three month and six month periods ended June 30, 2021 and 2020 were as follows:


	For the three month periods ended								For the six month periods ended
	June 30, 2021				June 30, 2020				June 30, 2021				June 30, 2020
Type	Net realized gain (loss)		Net change in unrealized appreciation (depreciation)		Net realized gain (loss)		Net change in unrealized appreciation (depreciation)		Net realized gain (loss)		Net change in unrealized appreciation (depreciation)		Net realized gain (loss)		Net change in unrealized appreciation (depreciation)
First Lien Debt	$	636	$	8,556	$	(47,571)	$	57,212	$	1,628	$	19,106	$	(49,625)	$	(33,447)
Second Lien Debt	(16)		7,224		(213)		6,008		(16)		11,937		(213)		(28,026)
Equity Investments	1,325		1,406		—		1,907		2,006		2,660		357		(1)
Investment Funds	—		1,648		—		17,129		—		(1,548)		—		(1,833)
Total	$	1,945	$	18,834	$	(47,784)	$	82,256	$	3,618	$	32,155	$	(49,481)	$	(63,307)

Net change in unrealized appreciation in our investments for the three and six month periods ended June 30, 2021 improved compared to the comparable periods in 2020 primarily due to tightening market yields and improving credit fundamentals in 2021, compared to higher market yields in 2020 related to the COVID-19 pandemic. Net change in unrealized appreciation (depreciation) is also driven by changes in other inputs utilized under our valuation methodology, including, but not limited to, enterprise value multiples, borrower leverage multiples and borrower ratings, and the impact of exits.

MIDDLE MARKET CREDIT FUND, LLC

Overview

On February 29, 2016, the Company and Credit Partners entered into an amended and restated limited liability agreement, which was subsequently amended and restated on June 24, 2016 and February 22, 2021 (as amended, the "Limited Liability Company Agreement") to co-manage Credit Fund, a Delaware limited liability company that is not consolidated in the Company’s consolidated financial statements. Credit Fund primarily invests in first lien loans of middle market companies. Credit Fund is managed by a six-member board of managers, on which the Company and Credit Partners each have equal representation. Establishing a quorum for Credit Fund’s board of managers requires at least four members to be present at a meeting, including at least two of the Company’s representatives and two of Credit Partners’ representatives. The Company and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $250,000 each. Funding of such commitments generally requires the approval of the board of Credit Fund, including the board members appointed by the Company. By virtue of its membership interest, the Company and Credit Partners each indirectly bear an allocable share of all expenses and other obligations of Credit Fund.

Together with Credit Partners, the Company co-invests through Credit Fund. Investment opportunities for Credit Fund are sourced primarily by the Company and its affiliates. Portfolio and investment decisions with respect to Credit Fund must be unanimously approved by a quorum of Credit Fund’s investment committee consisting of an equal number of representatives of the Company and Credit Partners. Therefore, although the Company owns more than 25% of the voting securities of Credit Fund, the Company does not believe that it has control over Credit Fund (other than for purposes of the Investment Company Act). Middle Market Credit Fund SPV, LLC (the “Credit Fund Sub”), MMCF CLO 2017-1 LLC (the “2017-1 Issuer”), MMCF CLO 2019-2, LLC (the "2019-2 Issuer", formerly known as MMCF Credit Warehouse, LLC (the "Credit Fund Warehouse")) and MMCF Warehouse II, LLC (the "Credit Fund Warehouse II"), each a Delaware limited liability company, were formed on April 5, 2016, October 6, 2017 November 26, 2018 and August 16, 2019, respectively. Credit Fund Sub, the 2017-1 Issuer, the 2019-2 Issuer, and Credit Fund Warehouse II are wholly owned subsidiaries of Credit Fund and are consolidated in Credit Fund’s consolidated financial statements commencing from the date of their respective formations. Credit Fund Sub, the 2017-1 Issuer, the 2019-2 Issuer and Credit Fund Warehouse II primarily invest in first lien loans of middle market companies. Credit Fund and its wholly owned subsidiaries follow the same Internal Risk Rating System as the Company. Refer to "Debt" below for discussions regarding the credit facilities entered into and the notes issued by such wholly-owned subsidiaries.

Selected Financial Data

Since inception of Credit Fund and through June 30, 2021 and December 31, 2020, the Company and Credit Partners each made capital contributions of $1 and $1 in members’ equity, respectively, and $216,000 and $216,000 in subordinated loans, respectively, to Credit Fund. On May 25, 2021, the Company and Credit Partners received a return of capital on the subordinated loans of $46,000, of which the Company received $23,000. Below is certain summarized consolidated financial information for Credit Fund as of June 30, 2021 and December 31, 2020.


	June 30, 2021		December 31, 2020
	(unaudited)
Selected Consolidated Balance Sheet Information
ASSETS
Investments, at fair value (amortized cost of $1,107,222 and $1,080,538, respectively)	$	1,097,258	$	1,056,381
Cash, cash equivalents and restricted cash (1)	61,112		119,796
Other assets	10,722		7,553
Total assets	$	1,169,092	$	1,183,730
LIABILITIES AND MEMBERS’ EQUITY
Secured borrowings	$	597,284	$	514,261
Notes payable, net of unamortized debt issuance costs of $1,463 and $1,559, respectively	154,358		253,933


Other liabilities	48,888		15,543
Subordinated loans and members’ equity (2)	368,562		399,993
Liabilities and members’ equity	$	1,169,092	$	1,183,730

(1) As of June 30, 2021 and December 31, 2020, $19,099 and $83,574, respectively, of Credit Fund's cash and cash equivalents was restricted.

(2) As of June 30, 2021 and December 31, 2020, the fair value of the Company’s ownership interest in the subordinated loans and members’ equity was $181,343 and $205,891, respectively.


	For the three month periods ended				For the six month periods ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
	(unaudited)				(unaudited)
Selected Consolidated Statement of Operations Information:
Total investment income	$	17,722	$	19,821	$	33,827	$	41,413
Expenses
Interest and credit facility expenses	5,321		9,552		10,736		23,479
Other expenses	554		590		1,022		1,093
Total expenses	5,875		10,142		11,758		24,572
Net investment income (loss)	11,847		9,679		22,069		16,841
Net realized gain (loss) on investments	(115)		—		(1,693)		—
Net change in unrealized appreciation (depreciation) on investments	695		44,828		14,193		(41,465)
Net increase (decrease) resulting from operations	$	12,427	$	54,507	$	34,569	$	(24,624)

Below is a summary of Credit Fund’s portfolio, followed by a listing of the loans in Credit Fund's portfolio, as of June 30, 2021 and December 31, 2020:


	As of
	June 30, 2021			December 31, 2020
Senior secured loans (1)	$	1,111,965		$	1,084,491
Weighted average yields of senior secured loans based on amortized cost (2)	6.09		%	6.03		%
Weighted average yields of senior secured loans based on fair value (2)	6.12		%	6.15		%
Number of portfolio companies in Credit Fund	53			54
Average amount per portfolio company (1)	$	20,980		$	20,083
Number of loans on non-accrual status	—			—
Fair value of loans on non-accrual status	$	—		$	—
Percentage of portfolio at floating interest rates (3)(4)	97.6		%	97.7		%
Percentage of portfolio at fixed interest rates (4)	2.4		%	2.3		%
Fair value of loans with PIK provisions	$	26,602		$	24,113
Percentage of portfolio with PIK provisions (4)	2.4		%	2.3		%

(1)At par/principal amount.

(2)Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of June 30, 2021 and December 31, 2020. Weighted average yield on debt and income producing securities at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at fair value included in such securities. Weighted average yield on debt and income producing securities at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at amortized cost included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above.

(3)Floating rate debt investments are primarily subject to interest rate floors.

(4)Percentages based on fair value.


Consolidated Schedule of Investments as of June 30, 2021
Investments (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Maturity Date	Par/ Principal Amount		Amortized Cost (4)		Fair Value (5)
First Lien Debt (97.8% of fair value)
ACR Group Borrower, LLC	^+	(2)(3)(6)	Aerospace & Defense	L + 4.50%	5.50%	3/31/2028	$	34,650	$	34,041	$	34,020
Acrisure, LLC	\#	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 3.50%	3.60%	2/15/2027	25,505		25,479		25,207
Alpha Packaging Holdings, Inc.	+\	(2)(3)	Containers, Packaging & Glass	L + 6.00%	7.00%	5/12/2022	15,867		15,866		15,866
AmeriLife Holdings LLC	#	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 4.00%	4.10%	3/18/2027	9,902		9,881		9,902
Analogic Corporation	^+	(2)(3)(6)	Capital Equipment	L + 5.25%	6.25%	6/22/2024	18,762		18,745		18,575
Anchor Packaging, Inc.	+#	(2)(3)	Containers, Packaging & Glass	L + 4.00%	4.10%	7/18/2026	24,597		24,501		24,597
API Technologies Corp.	+\	(2)(3)	Aerospace & Defense	L + 4.25%	4.35%	5/9/2026	14,700		14,644		14,556
Aptean, Inc.		(2)(3)	Software	L + 4.25%	4.35%	4/23/2026	12,219		12,170		12,132
Astra Acquisition Corp.	+#	(2)(3)	Software	L + 4.75%	5.50%	2/28/2027	28,711		28,347		28,343
Avalign Technologies, Inc.	+\	(2)(3)	Healthcare & Pharmaceuticals	L + 4.50%	4.65%	12/22/2025	14,517		14,417		14,419
Avenu Holdings, LLC	+	(2)(3)	Sovereign & Public Finance	L + 5.25%	6.25%	9/28/2024	23,470		23,470		23,470
Big Ass Fans, LLC	+\#	(2)(3)	Capital Equipment	L + 3.75%	4.75%	5/21/2024	13,694		13,648		13,698
BK Medical Holding Company, Inc.	^+	(2)(3)(6)	Healthcare & Pharmaceuticals	L + 5.25%	6.25%	6/22/2024	24,043		23,859		23,950
Chemical Computing Group ULC (Canada)	^+	(2)(3)(7)(6)	Software	L + 4.50%	5.50%	8/30/2024	13,983		13,426		13,849
Chudy Group, LLC	^+	(2)(3)(6)	Healthcare & Pharmaceuticals	L + 5.75%	6.75%	6/30/2027	33,103		32,503		32,503
Clearent Newco, LLC	^+	(2)(3)(6)	High Tech Industries	L + 6.50%	7.50%	3/20/2025	4,059		4,059		4,059
Clearent Newco, LLC	+\	(2)(3)	High Tech Industries	L + 5.50%	6.50%	3/20/2025	29,360		29,138		29,360
DBI Holding LLC	^		Transportation: Cargo	14.00% PIK	14.00%	3/26/2023	2,538		2,538		2,538
Diligent Corporation	^+	(2)(3)(6)	Telecommunications	L + 6.25%	7.25%	8/4/2025	8,639		8,386		8,836
Divisions Holding Corporation	+	(2)(3)	Business Services	L + 4.75%	5.50%	5/27/2028	25,000		24,752		24,750
DTI Holdco, Inc.	+\	(2)(3)	High Tech Industries	L + 4.75%	5.75%	9/30/2023	18,592		18,525		17,863
Eliassen Group, LLC	+\	(2)(3)	Business Services	L + 4.25%	4.35%	11/5/2024	9,939		9,905		9,890
EPS Nass Parent, Inc.	^+	(2)(3)(6)	Utilities: Electric	L + 5.75%	6.75%	4/19/2028	31,356		30,634		30,761
EvolveIP, LLC	^+	(2)(3)(6)	Telecommunications	L + 5.75%	6.75%	6/7/2023	19,700		19,667		19,700
Exactech, Inc.	+\#	(2)(3)	Healthcare & Pharmaceuticals	L + 3.75%	4.75%	2/14/2025	21,418		21,318		21,107
Excel Fitness Holdings, Inc.	+#	(2)(3)	Hotel, Gaming & Leisure	L + 5.25%	6.25%	10/7/2025	24,625		24,441		23,867
Frontline Technologies Holdings, LLC	+	(2)(3)	Software	L + 5.75%	6.75%	9/18/2023	14,812		14,231		14,945
Golden West Packaging Group LLC	+\	(2)(3)	Containers, Packaging & Glass	L + 5.25%	6.25%	6/20/2023	27,305		27,218		27,273
HMT Holding Inc.	^+\	(2)(3)(6)	Energy: Oil & Gas	L + 5.00%	6.00%	11/17/2023	32,653		32,351		32,047
Integrity Marketing Acquisition, LLC		(2)(3)	Banking, Finance, Insurance & Real Estate	L + 6.25%	7.25%	8/27/2025	11,929		11,822		11,750
Jensen Hughes, Inc.	+\	(2)(3)(6)	Utilities: Electric	L + 4.50%	5.50%	3/22/2024	35,950		35,873		35,314
K2 Insurance Services, LLC	+	(2)(3)(6)	Banking, Finance, Insurance & Real Estate	L + 5.00%	6.00%	7/1/2024	12,994		12,994		12,955
KAMC Holdings, Inc.	+#	(2)(3)	Energy: Electricity	L + 4.00%	4.14%	8/14/2026	13,755		13,703		13,205
KBP Investments, LLC	^+	(2)(3)(6)	Beverage, Food & Tobacco	L + 5.00%	5.75%	5/25/2027	19,277		18,830		18,778
Marco Technologies, LLC	+\	(2)(3)	Media: Advertising, Printing & Publishing	L + 4.00%	5.00%	10/30/2023	7,333		7,315		7,333


Consolidated Schedule of Investments as of June 30, 2021
Investments (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Maturity Date	Par/ Principal Amount		Amortized Cost (4)		Fair Value (5)
Mold-Rite Plastics, LLC	+\	(2)(3)	Chemicals, Plastics & Rubber	L + 4.25%	5.25%	6/14/2022	$	14,445	$	14,436	$	14,445
Newport Group Holdings II, Inc.	+\#	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 3.50%	3.65%	9/13/2025	23,355		23,184		23,341
Odyssey Logistics & Technology Corp.	+\#	(2)(3)	Transportation: Cargo	L + 4.00%	5.00%	10/12/2024	25,016		24,946		24,779
Output Services Group	^+\	(2)(3)	Media: Advertising, Printing & Publishing	L + 4.50%	5.50%	3/27/2024	19,322		19,288		16,423
Premise Health Holding Corp.	+\#	(2)(3)	Healthcare & Pharmaceuticals	L + 3.50%	3.70%	7/10/2025	13,515		13,473		13,476
Propel Insurance Agency, LLC	^+\	(2)(3)(6)	Banking, Finance, Insurance & Real Estate	L + 5.00%	6.00%	6/1/2024	43,409		42,944		42,934
Q Holding Company	+\#	(2)(3)	Automotive	L + 5.00%	6.00%	12/31/2023	21,625		21,509		21,221
QW Holding Corporation	^+	(2)(3)(6)	Environmental Industries	L + 6.25%	7.25%	8/31/2024	13,631		13,377		12,989
Radiology Partners, Inc.	+\#	(2)(3)	Healthcare & Pharmaceuticals	L + 4.25%	4.33%	7/9/2025	27,686		27,592		27,664
RevSpring Inc.	+\#	(2)(3)	Media: Advertising, Printing & Publishing	L + 4.00%	4.15%	10/11/2025	29,299		29,133		29,197
Situs Group Holdings Corporation	+\	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 4.75%	4.85%	6/28/2025	14,706		14,624		14,597
Striper Buyer, LLC	+	(2)(3)	Containers, Packaging & Glass	L + 5.50%	6.25%	12/30/2026	14,925		14,783		14,925
T2 Systems, Inc.	^+	(2)(3)(6)	Transportation: Consumer	L + 6.75%	7.75%	9/28/2022	28,969		28,700		28,969
Turbo Buyer, Inc.	+	(2)(3)(6)	Automotive	L + 6.00%	7.00%	12/2/2025	14,031		14,031		13,732
U.S. TelePacific Holdings Corp.	+\	(2)(3)	Telecommunications	L + 6.00%	7.00%	5/2/2023	6,660		6,637		6,157
VRC Companies, LLC	^+	(2)(3)	Business Services	L + 5.50%	6.25%	6/29/2027	25,000		24,550		24,550
Water Holdings Acquisition LLC	^+	(2)(3)(6)	Utilities: Water	L + 5.25%	6.25%	12/18/2026	29,280		28,547		28,845
Welocalize, Inc.	+	(2)(3)(6)	Business Services	L + 4.75%	5.75%	12/23/2024	35,500		35,121		35,052
WRE Holding Corp.	^+	(2)(3)(6)	Environmental Industries	L + 5.50%	6.50%	1/3/2023	8,570		8,547		8,480













First Lien Debt Total									$	1,078,119	$	1,073,194
Second Lien Debt (2.2% of fair value)
DBI Holding, LLC	^		Transportation: Cargo	10.00% PIK	10.00%	2/1/2026	$	24,064	$	23,739	$	24,064

Second Lien Debt Total									$	23,739	$	24,064
Equity Investments (0.0% of fair value)
DBI Holding, LLC	^		Transportation: Cargo				2,961		$	—	$	—
DBI Holding, LLC	^		Transportation: Cargo				13,996		5,364		—
Equity Investments Total									$	5,364	$	—
Total Investments									$	1,107,222	$	1,097,258

(3)Loan includes interest rate floor feature, which is generally 1.00%.

(6)As of June 30, 2021, Credit Fund and Credit Fund Sub had the following unfunded commitments to fund delayed draw and revolving senior secured loans:


First Lien Debt – unfunded delayed draw and revolving term loans commitments	Type	Unused Fee	Par/ Principal Amount		Fair Value
ACR Group Borrower, LLC	Revolver	0.38%	$	7,350	$	(110)
Analogic Corporation	Revolver	0.50	1,975		(18)
BK Medical Holding Company, Inc.	Revolver	0.50	2,609		(9)
Chemical Computing Group ULC (Canada)	Revolver	0.50	873		(8)
Chudy Group, LLC	Delayed Draw	1.00	5,517		(83)
Chudy Group, LLC	Revolver	0.50	1,379		(21)
Clearent Newco, LLC	Delayed Draw	1.00	2,543		—
Diligent Corporation	Revolver	0.50	703		12
Diligent Corporation	Delayed Draw	1.00	2,109		36
EPS Nass Parent, Inc.	Revolver	0.50	2,508		(40)
EPS Nass Parent, Inc.	Delayed Draw	1.00	3,136		(50)
EvolveIP, LLC	Delayed Draw	1.00	1,904		—
EvolveIP, LLC	Revolver	0.50	1,680		—
HMT Holding Inc.	Revolver	0.50	6,173		(96)
Jensen Hughes, Inc.	Revolver	0.50	409		(7)
Jensen Hughes, Inc.	Delayed Draw	1.00	544		(9)
K2 Insurance Services, LLC	Revolver	0.50	1,170		(3)
K2 Insurance Services, LLC	Delayed Draw	1.00	803		(2)
KBP Investments, LLC	Delayed Draw	1.00	20,190		(252)
KBP Investments, LLC	Delayed Draw	1.00	503		(6)
Propel Insurance Agency, LLC	Revolver	0.50	2,381		(24)
Propel Insurance Agency, LLC	Delayed Draw	1.00	1,733		(17)
QW Holding Corporation	Delayed Draw	1.00	9,338		(219)
QW Holding Corporation	Revolver	0.50	4,344		(102)
T2 Systems, Inc.	Revolver	0.50	1,955		—
Turbo Buyer, Inc.	Revolver	0.50	933		(19)
Water Holdings Acquisition LLC	Revolver	0.50	5,263		(57)
Water Holdings Acquisition LLC	Delayed Draw	1.00	5,326		(58)
Welocalize, Inc.	Revolver	0.50	2,250		(25)
Welocalize, Inc.	Revolver	0.50	2,250		(25)
WRE Holding Corp.	Delayed Draw	1.00	563		(5)
WRE Holding Corp.	Revolver	0.50	609		(6)

Total unfunded commitments			$	101,023	$	(1,223)


Consolidated Schedule of Investments as of December 31, 2020
Investments (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Maturity Date	Par/ Principal Amount		Amortized Cost (4)		Fair Value (5)
First Lien Debt (97.5% of fair value)
Acrisure, LLC	\#	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 3.50%	3.65%	2/15/2027	$	25,634	$	25,606	$	25,104
Alku, LLC	+#	(2)(3)	Business Services	L + 5.50%	5.75%	7/29/2026	23,666		23,466		23,512
Alpha Packaging Holdings, Inc.	+\	(2)(3)	Containers, Packaging & Glass	L + 6.00%	7.00%	11/12/2021	16,378		16,378		16,378
AmeriLife Holdings LLC	#	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 4.00%	4.15%	3/18/2027	9,951		9,929		9,802
Analogic Corporation	^+	(2)(3)(6)	Capital Equipment	L + 5.25%	6.25%	6/22/2024	18,857		18,837		18,857
Anchor Packaging, Inc.	+#	(2)(3)	Containers, Packaging & Glass	L + 4.00%	4.15%	7/18/2026	24,723		24,617		24,656
API Technologies Corp.	+\	(2)(3)	Aerospace & Defense	L + 4.25%	4.49%	5/9/2026	14,775		14,713		13,999
Aptean, Inc.	+\	(2)(3)	Software	L + 4.25%	4.40%	4/23/2026	12,281		12,227		12,077
AQA Acquisition Holding, Inc.	+\	(2)(3)(6)	High Tech Industries	L + 4.25%	5.25%	5/24/2023	18,759		18,752		18,757
Astra Acquisition Corp.	+#	(2)(3)	Software	L + 5.50%	6.50%	3/1/2027	28,783		28,392		28,783
Avalign Technologies, Inc.	+\	(2)(3)	Healthcare & Pharmaceuticals	L + 4.50%	4.73%	12/22/2025	14,592		14,481		14,334
Big Ass Fans, LLC	+\#	(2)(3)	Capital Equipment	L + 3.75%	4.75%	5/21/2024	13,766		13,714		13,766
BK Medical Holding Company, Inc.	^+	(2)(3)(6)	Healthcare & Pharmaceuticals	L + 5.25%	6.25%	6/22/2024	24,165		23,951		22,363
Chemical Computing Group ULC (Canada)	^+	(2)(3)(6)	Software	L + 5.00%	6.00%	8/30/2023	14,055		13,378		14,055
Clarity Telecom LLC.	+		Media: Broadcasting & Subscription	L + 4.25%	4.40%	8/30/2026	14,813		14,773		14,813
Clearent Newco, LLC	^	(2)(3)(6)	High Tech Industries	L + 6.50%	7.50%	3/20/2025	4,079		4,079		3,907
Clearent Newco, LLC	^+\	(2)(3)	High Tech Industries	L + 5.50%	6.50%	3/20/2025	29,486		29,236		28,722
DecoPac, Inc.	^+\	(2)(3)(6)	Non-durable Consumer Goods	L + 4.25%	5.25%	9/29/2024	12,336		12,253		12,318
Diligent Corporation	^+	(2)(3)(6)	Telecommunications	L + 6.25%	7.25%	8/4/2025	8,683		8,411		8,819
DTI Holdco, Inc.	^+\	(2)(3)	High Tech Industries	L + 4.75%	5.75%	9/30/2023	18,690		18,642		16,655
Eliassen Group, LLC	+\	(2)(3)	Business Services	L + 4.25%	4.40%	11/5/2024	7,543		7,516		7,483
EvolveIP, LLC	^+	(2)(3)(6)	Telecommunications	L + 5.75%	6.75%	6/7/2023	19,800		19,759		19,775
Exactech, Inc.	+\#	(2)(3)	Healthcare & Pharmaceuticals	L + 3.75%	4.75%	2/14/2025	21,528		21,416		20,422
Excel Fitness Holdings, Inc.	+#	(2)(3)	Hotel, Gaming & Leisure	L + 5.25%	6.25%	10/7/2025	24,750		24,546		22,780
Frontline Technologies Holdings, LLC	+	(2)(3)	Software	L + 5.75%	6.75%	9/18/2023	14,886		14,198		14,589
Golden West Packaging Group LLC	+\	(2)(3)	Containers, Packaging & Glass	L + 5.25%	6.25%	6/20/2023	29,012		28,896		28,974
HMT Holding Inc.	+\	(2)(3)(6)	Energy: Oil & Gas	L + 5.00%	6.00%	11/17/2023	32,821		32,458		30,984
Integrity Marketing Acquisition, LLC	^+	(2)(3)(6)	Banking, Finance, Insurance & Real Estate	L + 6.25%	7.25%	8/27/2025	7,836		7,701		7,956
Jensen Hughes, Inc.	+\	(2)(3)(6)	Utilities: Electric	L + 4.50%	5.50%	3/22/2024	34,584		34,489		33,424
KAMC Holdings, Inc.	+#	(2)(3)	Energy: Electricity	L + 4.00%	4.23%	8/14/2026	13,825		13,768		12,531
KBP Investments, LLC	^+	(2)(3)(6)	Beverage, Food & Tobacco	L + 5.00%	6.00%	5/15/2023	9,292		9,059		9,350
Marco Technologies, LLC	^+\	(2)(3)(6)	Media: Advertising, Printing & Publishing	L + 4.00%	5.00%	10/30/2023	7,332		7,293		7,332
Mold-Rite Plastics, LLC	+\	(2)(3)	Chemicals, Plastics & Rubber	L + 4.25%	5.25%	12/14/2021	14,520		14,501		14,520
Newport Group Holdings II, Inc.	+\#	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 3.50%	3.75%	9/13/2025	23,475		23,285		23,405
Odyssey Logistics & Technology Corp.	+\#	(2)(3)	Transportation: Cargo	L + 4.00%	5.00%	10/12/2024	38,897		38,773		37,766
Output Services Group	^+\	(2)(3)	Media: Advertising, Printing & Publishing	L + 4.50%	5.50%	3/27/2024	19,421		19,382		14,178


Consolidated Schedule of Investments as of December 31, 2020
Investments (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Maturity Date	Par/ Principal Amount		Amortized Cost (4)		Fair Value (5)
Pasternack Enterprises, Inc.	+\	(2)(3)	Capital Equipment	L + 4.00%	5.00%	7/2/2025	$	22,524	$	22,513	$	22,218
Pharmalogic Holdings Corp.	+\	(2)(3)	Healthcare & Pharmaceuticals	L + 4.00%	5.00%	6/11/2023	11,205		11,189		11,158
Premise Health Holding Corp.	+\#	(2)(3)	Healthcare & Pharmaceuticals	L + 3.50%	3.75%	7/10/2025	13,584		13,538		13,503
Propel Insurance Agency, LLC	^+\	(2)(3)(6)	Banking, Finance, Insurance & Real Estate	L + 5.00%	6.00%	6/1/2024	38,134		37,662		37,716
Q Holding Company	+\#	(2)(3)	Automotive	L + 5.00%	6.00%	12/31/2023	21,735		21,604		20,229
QW Holding Corporation	+	(2)(3)(6)	Environmental Industries	L + 6.25%	7.25%	8/31/2022	11,566		11,465		10,727
Radiology Partners, Inc.	+\#	(2)(3)	Healthcare & Pharmaceuticals	L + 4.25%	4.81%	7/9/2025	27,686		27,581		27,193
RevSpring Inc.	+\#	(2)(3)	Media: Advertising, Printing & Publishing	L + 4.25%	4.40%	10/11/2025	29,449		29,265		29,199
Situs Group Holdings Corporation	+\	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 4.75%	5.75%	6/28/2025	14,781		14,689		14,636
T2 Systems, Inc.	^+	(2)(3)(6)	Transportation: Consumer	L + 6.75%	7.75%	9/28/2022	29,119		28,743		29,118
The Original Cakerie, Ltd. (Canada)	+\	(2)(3)(6)	Beverage, Food & Tobacco	L + 4.50%	5.50%	7/20/2022	6,295		6,281		6,289
The Original Cakerie, Ltd. (Canada)	+	(2)(3)	Beverage, Food & Tobacco	L + 5.00%	6.00%	7/20/2022	8,837		8,815		8,829
Thoughtworks, Inc.	\#	(2)(3)	Business Services	L + 3.75%	4.75%	10/11/2024	11,704		11,683		11,704
U.S. Acute Care Solutions, LLC	+\	(2)(3)	Healthcare & Pharmaceuticals	L + 6.00%	7.00%	5/15/2021	31,211		31,184		29,104
U.S. TelePacific Holdings Corp.	+\	(2)(3)	Telecommunications	L + 5.50%	6.50%	5/2/2023	26,660		26,585		23,984
VRC Companies, LLC	+	(2)(3)(6)	Business Services	L + 6.50%	7.50%	3/31/2023	30,582		29,464		30,582
Water Holdings Acquisition LLC	^+	(2)(3)(6)	Utilities: Water	L + 5.25%	6.25%	12/18/2026	26,316		25,520		25,516
Welocalize, Inc.	+	(2)(3)(6)	Business Services	L + 4.50%	5.50%	12/23/2023	22,629		22,414		22,584
WRE Holding Corp.	^+	(2)(3)(6)	Environmental Industries	L + 5.25%	6.25%	1/3/2023	8,367		8,336		8,252










First Lien Debt Total									$	1,051,406	$	1,029,687
Second Lien Debt (2.3% of fair value)
DBI Holding, LLC	^	(2)	Transportation: Cargo	9.00% PIK	9.00%	2/1/2026	$	24,113	$	23,768	$	24,113
Second Lien Debt Total									$	23,768	$	24,113
Equity Investments (0.2%of fair value)
DBI Holding, LLC	^		Transportation: Cargo				$	2,961	$	—	$	—
DBI Holding, LLC	^		Transportation: Cargo				$	13,996	$	5,364	$	2,581
Equity Investments Total									$	5,364	$	2,581
Total Investments									$	1,080,538	$	1,056,381

^ Denotes that all or a portion of the assets are owned by Credit Fund. Credit Fund has entered into the Credit Fund Facility. Accordingly, such assets are not available to creditors of Credit Fund Sub, the 2019-2 Issuer or Credit Fund Warehouse II.

+ Denotes that all or a portion of the assets are owned by Credit Fund Sub. Credit Fund Sub has entered into a revolving credit facility the Credit Fund Sub Facility. The lenders of the Credit Fund Sub Facility have a first lien security interest in substantially all of the assets of Credit Fund Sub. Accordingly, such assets are not available to creditors of Credit Fund, the 2019-2 Issuer or Credit Fund Warehouse II.

\ Denotes that all or a portion of the assets are owned by the 2019-2 Issuer and secure the notes issued in connection with the 2019-2 Debt Securitization. Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub, or Credit Fund Warehouse II.

# Denotes that all or a portion of the assets are owned by the Credit Fund Warehouse II. Credit Fund Warehouse II has entered into the Credit Fund Warehouse II Facility. The lenders of the Credit Fund Warehouse II Facility have a first lien security interest in substantially all of the assets of the Credit Fund Warehouse II. Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub, or the 2019-2 Issuer.

December 31, 2020, the reference rates for Credit Fund's variable rate loans were the 30-day LIBOR at 0.15%, the 90-day LIBOR at 0.25% and the 180-day LIBOR at 0.26%.

(3)Loan includes interest rate floor feature, which is generally 1.00%.

(6)As of December 31, 2020, Credit Fund and Credit Fund Sub had the following unfunded commitments to fund delayed draw and revolving senior secured loans:


First Lien Debt—unfunded delayed draw and revolving term loans commitments	Type	Unused Fee		Par/ Principal Amount		Fair Value
Analogic Corporation	Revolver	0.50	%	$	1,975	$	—
AQA Acquisition Holding, Inc.	Revolver	0.50		2,459		—
BK Medical Holding Company, Inc.	Revolver	0.50		2,609		(176)
Chemical Computing Group ULC (Canada)	Revolver	0.50		873		—
Clearent Newco, LLC	Delayed Draw	1.00		2,549		(66)
DecoPac, Inc.	Revolver	0.50		2,143		(3)
Diligent Corporation	Delayed Draw	1.00		2,109		25
Diligent Corporation	Revolver	0.50		703		8
EvolveIP, LLC	Delayed Draw	1.00		1,904		(2)
EvolveIP, LLC	Revolver	0.50		1,680		(2)
HMT Holding Inc.	Revolver	0.50		6,173		(291)
Integrity Marketing Acquistion, LLC	Delayed Draw	1.00		4,144		41
Jensen Hughes, Inc.	Delayed Draw	1.00		1,127		(35)
Jensen Hughes, Inc.	Revolver	0.50		1,364		(43)
KBP Investments, LLC	Delayed Draw	1.00		503		1
KBP Investments, LLC	Delayed Draw	1.00		10,190		30
Marco Technologies, LLC	Delayed Draw	1.00		7,500		—
Propel Insurance Agency, LLC	Revolver	0.50		1,905		(19)
Propel Insurance Agency, LLC	Delayed Draw	1.00		1,733		(17)
QW Holding Corporation	Revolver	0.50		5,498		(268)
QW Holding Corporation	Delayed Draw	1.00		161		(8)
T2 Systems, Inc.	Revolver	0.50		1,955		—
The Original Cakerie, Ltd. (Canada)	Revolver	0.50		1,665		(1)
VRC Companies, LLC	Revolver	0.50		858		—
Water Holdings Acquisition LLC	Delayed Draw	1.00		8,421		(168)
Water Holdings Acquisition LLC	Revolver	0.50		5,263		(105)
Welocalize, Inc.	Revolver	0.50		2,250		(4)
WRE Holding Corp.	Revolver	0.50		852		(10)
WRE Holding Corp.	Delayed Draw	1.00		563		(7)


Total unfunded commitments				$	81,129	$	(1,120)

(7)Loan was on non-accrual status as of December 31, 2020.

Debt

Credit Fund, Credit Fund Sub and Credit Fund Warehouse II are party to separate credit facilities as described below. In addition, until May 15, 2019, the 2019-2 Issuer (formerly known as Credit Fund Warehouse) was a party to the Credit Warehouse Facility. As of June 30, 2021 and December 31, 2020, Credit Fund, Credit Fund Sub and Credit Fund Warehouse II were in compliance with all covenants and other requirements of their respective credit facility agreements. Below is a summary of the borrowings and repayments under the credit facilities for the three month and six month periods ended 2021 and 2020, and the outstanding balances under the credit facilities for the respective periods.


	Credit Fund Facility				Credit Fund Sub Facility				Credit Fund Warehouse II Facility
	2021		2020		2021		2020			2021		2020
Three Month Periods Ended June 30,
Outstanding balance, beginning of period	$	—	$	—	$	363,121	$	367,006		$	83,180	$	95,415
Borrowings	—		—		162,500		43,000			8,000		13,579
Repayments	—		—		(10,500)		(57,000)			(9,017)		—
Outstanding balance, end of period	$	—	$	—	$	515,121	$	353,006		$	82,163	$	108,994

Six Month Periods Ended June 30,
Outstanding Borrowing, beginning of period	$	—	$	93,000	$	420,859	$	343,506		$	93,402	$	97,571
Borrowings	—		63,500		225,500		100,000			8,000		33,373
Repayments	—		(156,500)		(131,238)		(90,500)			(19,239)		(21,950)
Outstanding balance, end of period	$	—	$	—	$	515,121	$	353,006		$	82,163	$	108,994

2017-1 Notes

•$231,700 of Aaa/AAA Class A-1 Notes, which bore interest at the three-month LIBOR plus 1.17%;

•$48,300 of Aa2/AA Class A-2 Notes, which bore interest at the three-month LIBOR plus 1.50%;

•$15,000 of A2/A Class B-1 Notes, which bore interest at the three-month LIBOR plus 2.25%;

•$9,000 of A2/A Class B-2 Notes which bore interest at 4.30%;

•$22,900 of Baa2/BBB Class C Notes which bore interest at the three-month LIBOR plus 3.20%; and

•$25,100 of Ba2/BB Class D Notes which bore interest at the three-month LIBOR plus 6.38%.

The 2017-1 Notes were scheduled to mature on January 15, 2028. Credit Fund received 100% of the preferred interests issued by the 2017-1 Issuer (the “2017-1 Issuer Preferred Interests”) on the closing date of the 2017-1 Debt Securitization in exchange for Credit Fund’s contribution to the 2017-1 Issuer of the initial closing date loan portfolio. The 2017-1 Issuer Preferred Interests did not bear interest and had a nominal value of $47,900 at closing.

2019-2 Notes

•$233,000 of Aaa/AAA Class A-1 Notes, which bear interest at the three-month LIBOR plus 1.50%;

•$48,000 of Aa2/AA Class A-2 Notes, which bear interest at the three-month LIBOR plus 2.40%;

•$23,000 of A2/A Class B Notes, which bear interest at the three-month LIBOR plus 3.45%;

•$27,000 of Baa2/BBB- Class C Notes which bear interest at the three-month LIBOR plus 4.55%; and

•$21,000 of Ba2/BB- Class D Notes which bear interest at the three-month LIBOR plus 8.03%.

MIDDLE MARKET CREDIT FUND II, LLC

Overview

Credit Fund II is expected to make only limited new investments in senior secured loans of middle market companies. Portfolio and investment decisions with respect to Credit Fund II must be unanimously approved by a quorum of Credit Fund II’s board members consisting of at least one of the Company's representatives and one of CCLF's representatives. Therefore, although the Company owns more than 25% of the voting securities of Credit Fund II, the Company does not believe that it has control over Credit Fund (other than for purposes of the Investment Company Act).

managers of Credit Fund II, and is reimbursed by Credit Fund II for its costs and expenses and Credit Fund II’s allocable portion of overhead incurred by the Credit Fund II Administrative Agent in performing its obligations thereunder.

Credit Fund II Senior Notes

Selected Financial Data


	As of
	June 30, 2021		December 31, 2020
	(unaudited)
ASSETS
Investments, at fair value (amortized cost of $242,728 and $245,312, respectively)	$	244,554	$	246,421
Cash, cash equivalents and restricted cash (1)	12,755		1,385
Other assets	2,532		3,436
Total assets	$	259,841	$	251,242
LIABILITIES AND MEMBERS’ EQUITY

Notes payable, net of unamortized debt issuance costs of $839 and $875, respectively	$	156,661	$	156,625
Other liabilities	9,938		2,675





Total members' equity (2)	93,242		91,942
Total liabilities and members’ equity	$	259,841	$	251,242

(1) As of June 30, 2021 and December 31, 2020, all of Credit Fund II's cash and cash equivalents was restricted.

(2) As of June 30, 2021 and December 31, 2020, the fair value of Company's ownership interest in the members' equity was $78,441 and $77,395, respectively.


	For the three month period ended		For the six month period ended
	June 30, 2021			June 30, 2021
	(unaudited)			(unaudited)
Selected Consolidated Statement of Operations Information:
Total investment income	$	4,804		9,367
Expenses
Interest and credit facility expenses	1,197			2,398
Other expenses	190			381
Total expenses	1,387			2,779
Net investment income (loss)	3,417			6,588
Net realized gain (loss) on investments	—			—
Net change in unrealized appreciation (depreciation) on investments	218			712
Net increase (decrease) resulting from operations	$	3,635		7,300

Below is a summary of Credit Fund II’s portfolio, followed by a listing of the loans in Credit Fund II’s portfolio as of June 30, 2021 and December 31, 2020:


	As of
	June 30, 2021			December 31, 2020
Senior secured loans (1)	$	245,218		$	248,172
Weighted average yields of senior secured loans based on amortized cost (2)	7.41		%	7.32		%
Weighted average yields of senior secured loans based on fair value (2)	7.35		%	7.29		%
Number of portfolio companies in Credit Fund II	40			44
Average amount per portfolio company (1)	$	6,130		$	5,640
Percentage of portfolio at floating interest rates (3) (4)	99.0		%	99.1		%
Percentage of portfolio at fixed interest rates (4)	1.0		%	0.9		%
Fair value of loans with PIK provisions	$	17,453		$	9
Percentage of portfolio with PIK provisions (4)	7.1		%	3.6		%

(1)At par/principal amount.

(2)Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of June 30, 2021 and December 31, 2020. Weighted average yield on debt and income producing securities at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at fair value included in such securities. Weighted average yield on debt and income producing securities at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at amortized cost included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above.

(3)Floating rate debt investments are generally subject to interest rate floors.

(4)Percentages based on fair value.


Consolidated Schedule of Investments as of June 30, 2021
Investments (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Maturity Date	Par/ Principal Amount		Amortized Cost (4)		Fair Value (5)
First Lien Debt (88.2% of fair value)
Airnov, Inc.	^	(2)(3)	Containers, Packaging & Glass	L + 5.25%	6.25%	12/19/2025	$	6,237	$	6,219	$	6,237
Alpine SG, LLC	^	(2)(3)	High Tech Industries	L + 5.75%	6.75%	11/16/2022	4,411		4,395		4,366
American Physician Partners, LLC	^	(2)(3)	Healthcare & Pharmaceuticals	L + 6.75%, 1.50% PIK	9.25%	12/21/2021	8,532		8,510		8,463
AMS Group HoldCo, LLC	^	(2)(3)	Transportation: Cargo	L + 6.00%	7.00%	9/29/2023	7,650		7,583		7,650
Apptio, Inc.	^	(2)(3)	Software	L + 7.25%	8.25%	1/10/2025	5,357		5,286		5,397
Aurora Lux FinCo S.Á.R.L. (Luxembourg)	^	(2)(3)	Software	L + 6.00%	7.00%	12/24/2026	$	4,378	$	4,288	$	3,949
Avenu Holdings, LLC	^	(2)(3)	Sovereign & Public Finance	L + 5.25%	6.25%	9/28/2024	992		984		992
BMS Holdings III Corp.	^	(2)(3)	Construction & Building	L + 5.25%	6.25%	9/30/2026	3,291		3,227		3,291
Captive Resources Midco, LLC	^	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 5.75%	6.75%	5/31/2025	8,267		8,170		8,268
Chartis Holding, LLC	^	(2)(3)	Business Services	L + 5.50%	6.50%	5/1/2025	3,475		3,454		3,475
Comar Holding Company, LLC	^	(2)(3)	Containers, Packaging & Glass	L + 5.50%	6.50%	6/18/2024	8,755		8,662		8,755
Cority Software Inc. (Canada)	^	(2)(3)	Software	L + 5.00%	6.00%	7/2/2026	8,756		8,623		8,756
Ethos Veterinary Health LLC	^	(2)(3)	Consumer Services	L + 4.75%	4.85%	5/15/2026	8,158		8,098		8,137
EvolveIP, LLC	^	(2)(3)	Telecommunications	L + 5.75%	6.75%	6/7/2023	8,755		8,742		8,755
K2 Insurance Services, LLC	^	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 5.00%	6.00%	7/1/2024	6,876		6,790		6,858
Kaseya, Inc.	^	(2)(3)	High Tech Industries	L + 4.00%, 3.00% PIK	8.00%	5/2/2025	8,955		8,835		8,990


Consolidated Schedule of Investments as of June 30, 2021
Investments (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Maturity Date	Par/ Principal Amount		Amortized Cost (4)		Fair Value (5)
Mailgun Technologies, Inc.	^	(2)(3)	High Tech Industries	L + 5.00%	6.00%	3/26/2025	$	8,435	$	8,318	$	8,415
National Technical Systems, Inc.	^	(2)(3)	Aerospace & Defense	L + 5.50%	6.50%	6/12/2023	8,778		8,760		8,807
NMI AcquisitionCo, Inc.	^	(2)(3)	High Tech Industries	L + 5.50%	6.50%	9/6/2023	8,754		8,706		8,802
Paramit Corporation	^	(2)(3)	Capital Equipment	L + 4.50%	5.50%	5/3/2025	1,000		993		1,000
PPC Flexible Packaging, LLC	^	(2)(3)	Containers, Packaging & Glass	L + 5.75%	6.75%	11/23/2024	4,377		4,340		4,377
Redwood Services Group, LLC	^	(2)(3)	High Tech Industries	L + 6.00%	7.00%	6/6/2023	3,283		3,267		3,267
Reladyne, Inc.	^	(2)(3)	Wholesale	L + 5.00%	6.00%	7/22/2022	6,467		6,431		6,403
Riveron Acquisition Holdings, Inc.	^	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 5.75%	6.75%	5/22/2025	8,215		8,102		8,215
RSC Acquisition, Inc.	^	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 5.50%	6.50%	11/1/2026	8,444		8,309		8,528
Smile Doctors, LLC	^	(2)(3)	Healthcare & Pharmaceuticals	L + 6.00%	7.00%	10/6/2022	6,476		6,475		6,476
Superior Health Linens, LLC	^	(2)(3)	Business Services	L + 6.50%	7.50%	9/30/2021	6,974		6,967		6,974
T2 Systems, Inc.	^	(2)(3)	Transportation: Consumer	L + 6.75%	7.75%	9/28/2022	8,753		8,691		8,753
TCFI Aevex LLC	^	(2)(3)	Aerospace & Defense	L + 6.00%	7.00%	3/18/2026	1,710		1,682		1,679
TSB Purchaser, Inc.	^	(2)(3)	Media: Advertising, Printing & Publishing	L + 6.00%	7.00%	5/14/2024	8,754		8,636		8,738
Turbo Buyer, Inc.	^	(2)(3)	Automotive	L + 6.00%	7.00%	12/2/2025	8,132		7,975		7,970
US INFRA SVCS Buyer, LLC	^	(2)(3)	Environmental Industries	L + 6.00%	7.00%	4/13/2026	3,283		3,229		3,195
Zemax Software Holdings, LLC	^	(2)(3)	Software	L + 5.75%	6.75%	6/25/2024	4,376		4,344		4,333
Zenith Merger Sub, Inc.	^	(2)(3)	Business Services	L + 5.25%	6.25%	12/13/2023	7,403		7,379		7,403














First Lien Debt Total									$	214,470	$	215,674
Second Lien Debt (11.8% of fair value)
AI Convoy S.A.R.L (United Kingdom)	^	(2)(3)	Aerospace & Defense	L + 8.25%	9.25%	1/17/2028	$	5,514	$	5,407	$	5,720
AQA Acquisition Holdings, Inc.	^	(2)(3)	High Tech Industries	L + 7.50%	8.00%	3/3/2029	5,000		4,875		4,875
Quartz Holding Company	^	(2)(3)	Software	L + 8.00%	8.09%	4/2/2027	$	4,852	$	4,776	$	4,852
Tank Holding Corp.	^	(2)(3)	Capital Equipment	L + 8.25%	8.45%	3/26/2027	5,514		5,441		5,567
Ultimate Baked Goods MIDCO, LLC	^	(2)(3)	Beverage, Food & Tobacco	L + 8.00%	9.00%	8/9/2026	5,514		5,434		5,514
World 50, Inc.	^	(6)	Business Services	11.50%	11.50%	1/9/2027	2,365		2,325		2,352




Second Lien Debt Total									$	28,258	$	28,880
Total Investments									$	242,728	$	244,554

(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, Credit Fund II has indicated the reference rate used and provided the spread and the interest rate in effect as of June 30, 2021. As of June 30, 2021, the reference rates for Credit Fund II's variable rate loans were the 30-day LIBOR at 0.10%, the 90-day LIBOR at 0.15% and the 180-day LIBOR at 0.16%.

(3)Loan includes interest rate floor feature, which is generally 1.00%.

(6)Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company.

100


Consolidated Schedule of Investments as of December 31, 2020
Investments (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Maturity Date	Par/ Principal Amount		Amortized Cost (4)		Fair Value (5)
First Lien Debt (90.1% of fair value)
Airnov, Inc.	^	(2)(3)	Containers, Packaging & Glass	L + 5.25%	6.25%	12/19/2025	$	1,500	$	1,481	$	1,501
Alpine SG, LLC	^	(2)(3)	High Tech Industries	L + 5.75%	6.75%	11/16/2022	4,411		4,390		4,378
American Physician Partners, LLC	^	(2)(3)	Healthcare & Pharmaceuticals	L + 6.75%	7.75%	12/21/2021	8,725		8,679		8,265
AMS Group HoldCo, LLC	^	(2)(3)	Transportation: Cargo	L + 6.50%	7.50%	9/29/2023	8,182		8,096		8,079
Apptio, Inc.	^	(2)(3)	Software	L + 7.25%	8.25%	1/10/2025	5,357		5,278		5,437
Aurora Lux FinCo S.Á.R.L. (Luxembourg)	^	(2)(3)	Software	L + 5.75%	6.75%	12/24/2026	4,400		4,303		4,018
Avenu Holdings, LLC	^	(2)(3)	Sovereign & Public Finance	L + 5.25%	6.25%	9/28/2024	997		987		997
BMS Holdings III Corp.	^	(2)(3)	Construction & Building	L + 5.25%	6.25%	9/30/2026	3,308		3,239		3,270
Captive Resources Midco, LLC	^	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 5.75%	6.75%	5/31/2025	8,406		8,297		8,463
Chartis Holding, LLC	^	(2)(3)	Business Services	L + 5.50%	6.50%	5/1/2025	1,496		1,474		1,497
Comar Holding Company, LLC	^	(2)(3)	Containers, Packaging & Glass	L + 5.50%	6.50%	6/18/2024	8,799		8,692		8,832
Cority Software Inc. (Canada)	^	(2)(3)	Software	L + 5.25%	6.25%	7/2/2026	8,800		8,655		8,862
Ensono, LP	^	(2)(3)	Telecommunications	L + 5.25%	5.40%	6/27/2025	6,292		6,246		6,245
Ethos Veterinary Health LLC	^	(2)(3)	Consumer Services	L + 4.75%	4.90%	5/15/2026	8,182		8,117		8,070
EvolveIP, LLC	^	(2)(3)	Telecommunications	L + 5.75%	6.75%	6/7/2023	8,799		8,784		8,790
Innovative Business Services, LLC	^	(2)(3)	High Tech Industries	L + 5.50%	6.50%	4/5/2023	2,200		2,162		2,159
K2 Insurance Services, LLC	^	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 5.00%	6.00%	7/1/2024	6,927		6,827		6,928
Kaseya, Inc.	^	(2)(3)	High Tech Industries	L + 4.00%, 3.00% PIK	8.00%	5/2/2025	8,822		8,688		8,856
Mailgun Technologies, Inc.	^	(2)(3)	High Tech Industries	L + 5.00%	6.00%	3/26/2025	8,478		8,347		8,330
National Technical Systems, Inc.	^	(2)(3)	Aerospace & Defense	L + 5.50%	6.50%	6/12/2023	8,800		8,778		8,733
NMI AcquisitionCo, Inc.	^	(2)(3)	High Tech Industries	L + 5.00%	6.00%	9/6/2022	8,799		8,732		8,711
Paramit Corporation	^	(2)(3)	Capital Equipment	L + 4.50%	5.50%	5/3/2025	1,000		992		980
PPC Flexible Packaging, LLC	^	(2)(3)	Containers, Packaging & Glass	L + 6.00%	7.00%	11/23/2024	4,400		4,358		4,386
Redwood Services Group, LLC	^	(2)(3)	High Tech Industries	L + 6.00%	7.00%	6/6/2023	3,300		3,279		3,291
Reladyne, Inc.	^	(2)(3)	Wholesale	L + 5.00%	6.00%	7/22/2022	6,484		6,431		6,514
Riveron Acquisition Holdings, Inc.	^	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 5.75%	6.75%	5/22/2025	8,257		8,131		8,312
RSC Acquisition, Inc.	^	(2)(3)	Banking, Finance, Insurance & Real Estate	L + 5.50%	6.50%	11/1/2026	8,487		8,341		8,572
Smile Doctors, LLC	^	(2)(3)	Healthcare & Pharmaceuticals	L + 6.00%	7.00%	10/6/2022	6,509		6,507		6,379
Sovos Brands Intermediate, Inc.	^	(2)(3)	Beverage, Food & Tobacco	L + 4.75%	4.96%	11/20/2025	2,200		2,182		2,181
Superior Health Linens, LLC	^	(2)(3)	Business Services	L + 6.50%	7.50%	9/30/2021	7,199		7,178		7,162
T2 Systems, Inc.	^	(2)(3)	Transportation: Consumer	L + 6.75%	7.75%	9/28/2022	8,799		8,713		8,799
TCFI Aevex LLC	^	(2)(3)	Aerospace & Defense	L + 6.00%	7.00%	3/18/2026	1,718		1,688		1,712
TSB Purchaser, Inc.	^	(2)(3)	Media: Advertising, Printing & Publishing	L + 6.00%	7.00%	5/14/2024	8,799		8,663		8,729
Turbo Buyer, Inc.	^	(2)(3)	Automotive	L + 5.25%	6.25%	12/2/2025	8,174		8,001		8,249

101


Consolidated Schedule of Investments as of December 31, 2020
Investments (1)		Footnotes	Industry	Reference Rate & Spread (2)	Interest Rate (2)	Maturity Date	Par/ Principal Amount		Amortized Cost (4)		Fair Value (5)
US INFRA SVCS Buyer, LLC	^	(2)(3)	Environmental Industries	L + 6.00%	7.00%	4/13/2026	$	3,300	$	3,240	$	3,292
VRC Companies, LLC	^	(2)(3)	Business Services	L + 6.50%	7.50%	3/31/2023	4,311		4,271		4,311
Zemax Software Holdings, LLC	^	(2)(3)	Software	L + 5.75%	6.75%	6/25/2024	4,400		4,363		4,294
Zenith Merger Sub, Inc.	^	(2)(3)	Business Services	L + 5.25%	6.25%	12/13/2023	4,399		4,370		4,367










First Lien Debt Total									$	220,960	$	221,951
Second Lien Debt (9.9% of fair value)
AI Convoy S.A.R.L (United Kingdom)	^	(2)(3)	Aerospace & Defense	L + 8.25%	9.25%	1/17/2028	$	5,514	$	5,401	$	5,676
AQA Acquisition Holding, Inc.	^	(2)(3)	High Tech Industries	L + 8.00%	9.00%	5/24/2024	1,000		993		1,000
Quartz Holding Company	^	(2)(3)	Software	L + 8.00%	8.15%	4/2/2027	4,852		4,771		4,815
Tank Holding Corp.	^	(2)(3)	Capital Equipment	L + 8.25%	8.40%	3/26/2027	5,514		5,436		5,394
Ultimate Baked Goods MIDCO, LLC	^	(2)(3)	Beverage, Food & Tobacco	L + 8.00%	9.00%	8/9/2026	5,514		5,428		5,257
World 50, Inc.		(6)	Business Services	11.50%	11.50%	1/9/2027	2,365		2,323		2,328




Second Lien Debt Total									$	24,352	$	24,470
Total Investments									$	245,312	$	246,421

(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, Credit Fund II has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2020. As of December 31, 2020, the reference rates for Credit Fund II's variable rate loans were the 30-day LIBOR at 0.15%, the 90-day LIBOR at 0.25% and the 180-day LIBOR at 0.26%.

(3)Loan includes interest rate floor feature, which is generally 1.00%.

(6)Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

We generate cash from the net proceeds of offerings of our common stock and through cash flows from operations, including investment sales and repayments as well as income earned on investments and cash equivalents. We may also fund a portion of our investments through borrowings under the Credit Facility, as defined below, the issuance of debt, and through securitization of a portion of our existing investments. The primary use of existing funds and any funds raised in the future is expected to be for investments in portfolio companies, repayment of indebtedness, cash distributions to our stockholders and for other general corporate purposes. We believe our current cash position, available capacity on our revolving credit facilities – which is well in excess of our unfunded commitments – and net cash provided by operating activities will provide us with sufficient resources to meet our obligations and continue to support our investment objectives, including reserving for the capital needs which may arise at our portfolio companies.

On March 21, 2014, the Company closed on the Credit Facility, which was subsequently amended on January 8, 2015, May 25, 2016, March 22, 2017, September 25, 2018, June 14, 2019 and October 28, 2020. The maximum principal amount of the Credit Facility is $688,000, subject to availability under the Credit Facility, which is based on certain advance rates multiplied by the value of the Company’s portfolio investments (subject to certain concentration limitations) net of certain other indebtedness that the Company may incur in accordance with the terms of the Credit Facility. Proceeds of the Credit Facility may be used for general corporate purposes, including the funding of portfolio investments. Maximum capacity under the Credit Facility may be increased, subject to certain conditions, to $900,000 through the exercise by the Company of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional

102

financing. The Credit Facility includes a $50,000 limit for swingline loans and a $20,000 limit for letters of credit. Subject to certain exceptions, the Credit Facility is secured by a first lien security interest in substantially all of the portfolio investments held by the Company. The Credit Facility includes customary covenants, including certain financial covenants related to asset coverage, shareholders’ equity and liquidity, certain limitations on the incurrence of additional indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for senior secured revolving credit facilities of this nature.

Although we believe that we will remain in compliance, there are no assurances that we will continue to comply with the covenants in the Credit Facility. Failure to comply with these covenants could result in a default under the Credit Facility that, if we were unable to obtain a waiver from the applicable lenders, could result in the immediate acceleration of the amounts due under the Credit Facility, and thereby have a material adverse impact on our business, financial condition and results of operations. For more information on the Credit Facility, see Note 7 to the consolidated financial statements in Part I, Item 1 of this Form 10-Q.

On December 30, 2019, the Company closed a private offering of $115.0 million in aggregate principal amount of 4.750% Senior Unsecured Notes due December 31, 2024 (the "2019 Notes"). Interest is payable quarterly, beginning March 31, 2020. On December 11, 2020, the Company issued an additional $75.0 million aggregate principal amount of senior unsecured notes due December 31, 2024 (the "2020 Notes", together with the 2019 Notes, the "Senior Notes"). The 2020 Notes bear interest at an interest rate of 4.500%. The interest rates of the Senior Notes are subject to increase (up to an additional 1.00% over the stated rate of such notes) in the event that, subject to certain exceptions, the Senior Notes cease to have an investment grade rating. The Senior Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.

On June 26, 2015, we completed the 2015-1 Debt Securitization. The 2015-1 Notes were issued by Carlyle Direct Lending CLO 2015-1R LLC (formerly known as Carlyle GMS Finance MM CLO 2015-1 LLC) (the “2015-1 Issuer”), a wholly owned and consolidated subsidiary of us. On August 30, 2018, the 2015-1 Issuer refinanced the 2015-1 Debt Securitization (the “2015-1 Debt Securitization Refinancing”) by redeeming in full the 2015-1 Notes and issuing new notes (the “2015-1R Notes”). The 2015-1R Notes are secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans. On the closing date of the 2015-1 Debt Securitization Refinancing, the 2015-1 Issuer, among other things:

(c) refinanced the issued Class A-1C Notes by redeeming in full the Class A-1C Notes and issuing new AAA Class A-1-3-R Notes in an aggregate principal amount of $25,000 which bear interest at 4.56%;

(f) reduced the 2015-1 Issuer Preferred Interests by approximately $21,375 from a nominal value of $125,900 to approximately $104,525 at close; and

(g) extended the reinvestment period end date and maturity date applicable to the 2015-1 Issuer to October 15, 2023 and October 15, 2031, respectively. In connection with the contribution, we have made customary representations, warranties and covenants to the 2015-1 Issuer.

In connection with the contribution, we have made customary representations, warranties and covenants to the 2015-1 Issuer. The Class A-1-1-R, Class A-1-2-R, Class A-1-3-R, Class A-2-R, Class B and Class C Notes are included in the consolidated financial statements included in Part I, Item 1 of this Form 10-Q. The 2015-1 Issuer Preferred Interests were eliminated in consolidation. For more information on the 2015-1R Notes, see Note 8 to the consolidated financial statements in Part I, Item 1 of this Form 10-Q.

103

As of June 30, 2021 and December 31, 2020, we had $59,404 and $68,419, respectively, in cash, cash equivalents and restricted cash. The Credit Facility consisted of the following as of June 30, 2021 and December 31, 2020:


	June 30, 2021
	Total Facility		Borrowings Outstanding		Unused Portion (1)		Amount Available (2)

Credit Facility	$	688,000	$	365,060	$	322,940	$	322,878
Total	$	688,000	$	365,060	$	322,940	$	322,878


	December 31, 2020
	Total Facility		Borrowings Outstanding		Unused Portion (1)		Amount Available (2)

Credit Facility	688,000		347,949		340,051		207,365
Total	$	688,000	$	347,949	$	340,051	$	207,365

(1)The unused portion is the amount upon which commitment fees are based.

(2)Available for borrowing based on the computation of collateral to support the borrowings and subject to compliance with applicable covenants and financial ratios.

The following were the carrying values (before debt issuance costs) and fair values of the Company’s 2015-1R Notes as of June 30, 2021 and December 31, 2020:


	June 30, 2021				December 31, 2020
	Carrying Value		Fair Value		Carrying Value		Fair Value
Aaa/AAA Class A-1-1-R Notes	$	234,800	$	234,823	$	234,800	$	230,996
Aaa/AAA Class A-1-2-R Notes	50,000		50,005		50,000		49,645
Aaa/AAA Class A-1-3-R Notes	25,000		25,015		25,000		25,017
AA Class A-2-R Notes	66,000		66,000		66,000		64,895
A Class B Notes	46,400		46,400		46,400		45,291
BBB- Class C Notes	27,000		26,843		27,000		24,592
Total	$	449,200	$	449,086	$	449,200	$	440,436

As of June 30, 2021 and December 31, 2020, we had a combined $1,004,260 and $987,149, respectively, of outstanding consolidated indebtedness under the Credit Facility, the 2015-1R Notes and the Senior Notes. Our annualized interest cost as of June 30, 2021 and December 31, 2020, was 2.78% and 2.89%, excluding fees (such as fees on undrawn amounts and amortization of upfront fees). For the three months ended June 30, 2021 and 2020, we incurred $7,055 and $9,443, respectively, of interest expense and $505 and $788, respectively, of unused commitment fees. For the six month periods ended June 30, 2021 and 2020, we incurred $14,030 and $21,622, respectively, of interest expense and $1,024 and $1,378, respectively, of unused commitment fees.

Equity Activity

Common shares issued and outstanding as of June 30, 2021 and December 31, 2020 were 54,210,315 and 55,320,309, respectively.

The following table summarizes activity in the number of shares of our common stock outstanding during the six month periods ended June 30, 2021 and 2020:


	For the six month periods ended
	June 30, 2021	June 30, 2020
Common shares outstanding, beginning of period	55,320,309	57,763,811

Repurchase of common stock (1)	(1,109,994)	(1,455,195)
Common shares outstanding, end of period	54,210,315	56,308,616

(1) See Note 10 to the consolidated financial statements in Part I, Item 1 of this Form 10-Q for additional information regarding the Company Stock Repurchase Program.

104

On May 5, 2020, we issued and sold 2,000,000 shares of Preferred Stock, par value $0.01, to an affiliate of Carlyle in a private placement at a price of $25 per share. Shares of Preferred Stock issued and outstanding were 2,000,000 as of June 30, 2021 and December 31, 2020.

Contractual Obligations

A summary of our significant contractual payment obligations was as follows as of June 30, 2021 and December 31, 2020:


	As of
Payment Due by Period	June 30, 2021		December 31, 2020
Less than 1 Year	$	—	$	—
1-3 Years (1)	—		—
3-5 Years (1)	555,060		537,949
More than 5 Years (2)	449,200		449,200
Total	$	1,004,260	$	987,149

(1) Includes amounts outstanding under the Credit Facility and Senior Notes.

(2) Includes amounts outstanding under the 2015-1R Notes.

OFF BALANCE SHEET ARRANGEMENTS

In the ordinary course of our business, we enter into contracts or agreements that contain indemnifications or warranties. Future events could occur which may give rise to liabilities arising from these provisions against us. We believe that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made in these consolidated financial statements as of June 30, 2021 and December 31, 2020 in Part I, Item 1 of this Form 10-Q for any such exposure.

We have in the past, currently are and may in the future become obligated to fund commitments such as revolving credit facilities, bridge financing commitments, or delayed draw commitments.

We had the following unfunded commitments to fund delayed draw and revolving senior secured loans as of the indicated dates:


	Principal Amount as of
	June 30, 2021		December 31, 2020
Unfunded delayed draw commitments	$	105,221	$	73,292
Unfunded revolving commitments	71,186		76,216
Total unfunded commitments	$	176,407	$	149,508

Pursuant to an undertaking by us in connection with the 2015-1 Debt Securitization, we agreed to hold on an ongoing basis the 2015-1 Issuer Preferred Interests with an aggregate dollar purchase price at least equal to 5% of the aggregate outstanding amount of all collateral obligations by the 2015-1 Issuer for so long as any securities of the 2015-1 Issuer remains outstanding. As of June 30, 2021 and December 31, 2020, we were in compliance with this undertaking.

DIVIDENDS AND DISTRIBUTIONS

Prior to July 5, 2017, we had an “opt in” dividend reinvestment plan in respect of our common stock. Effective on July 5, 2017, we converted our “opt in” dividend reinvestment plan to an “opt out” dividend reinvestment plan that provides for reinvestment of our dividends and other distributions on behalf of our common stockholders, other than those common stockholders who have “opted out” of the plan. As a result of adopting the plan, if our Board of Directors authorizes, and we declare, a cash dividend or distribution on our common stock, our common stockholders who have not elected to “opt out” of our dividend reinvestment plan will have their cash dividends or distributions automatically reinvested in additional shares of our common stock, rather than receiving cash. Each registered common stockholder may elect to have such common stockholder’s dividends and distributions distributed in cash rather than participate in the plan. For any registered common stockholder that does not so elect, distributions on such common stockholder’s shares will be reinvested by State Street Bank and Trust Company, our plan administrator, in additional common shares. The number of common shares to be issued to the common stockholder will be determined based on the total dollar amount of the cash distribution payable, net of applicable

105

withholding taxes. We intend to use primarily newly issued common shares to implement the plan so long as the market value per share is equal to or greater than the net asset value per share on the relevant valuation date. If the market value per share is less than the net asset value per share on the relevant valuation date, the plan administrator would implement the plan through the purchase of common stock on behalf of participants in the open market, unless we instruct the plan administrator otherwise.

The following table summarizes the Company's dividends declared per share of common stock during the two most recent fiscal years and the current fiscal year to date:


Date Declared	Record Date	Payment Date	Per Share Amount














2019
February 22, 2019	March 29, 2019	April 17, 2019	$	0.37
May 6, 2019	June 28, 2019	July 17, 2019	0.37
June 17, 2019	June 28, 2019	July 17, 2019	0.08		(1)
August 5, 2019	September 30, 2019	October 17, 2019	0.37
November 4, 2019	December 31, 2019	January 17, 2020	0.37
December 12, 2019	December 31, 2019	January 17, 2020	0.18		(1)
Total			$	1.74
2020
February 24, 2020	March 31, 2020	April 17, 2020	$	0.37
May 4, 2020	June 30, 2020	July 17, 2020	0.37
August 3, 2020	September 30, 2020	October 16, 2020	0.32		(2)
August 3, 2020	September 30, 2020	October 16, 2020	0.05		(1)
November 2, 2020	December 31, 2020	January 15, 2021	0.32
November 2, 2020	December 31, 2020	January 15, 2021	0.04		(1)
Total			$	1.47
2021
February 22, 2021	March 31, 2021	April 16, 2021	$	0.32
February 22, 2021	March 31, 2021	April 16, 2021	0.05		(1)
May 3, 2021	June 30, 2021	July 15, 2021	$	0.32
May 3, 2021	June 30, 2021	July 15, 2021	$	0.04	(1)

Total			$	0.73

(1)Represents a special/supplemental dividend.

(2)The Company updated its dividend policy such that the base dividend is $0.32 per share of common stock, effective with the third quarter 2020 dividend.

106

Our Preferred Stock has a liquidation preference equal to $25 per share (the "Liquidation Preference") plus any accumulated but unpaid dividends up to but excluding the date of distribution. Dividends on our Preferred Stock are payable on a quarterly basis in an initial amount equal to 7.00% per annum of the Liquidation Preference per share, payable in cash, or at our option, 9.00% per annum of the Liquidation Preference payable in additional shares of Preferred Stock.

The following table summarizes the Company's dividends declared per share of preferred stock during the prior year and current fiscal year to date. Unless otherwise noted, dividends declared were paid in cash.

Date Declared

Record Date

Payment Date

Per Share Amount

2020

June 30, 2020

September 30, 2020

0.277

September 30, 2020

0.423

December 31, 2020

0.438

Total

1.138

2021

March 31, 2021

0.438

June 30, 2021

0.438

Total

0.876

ASSET COVERAGE

In accordance with the Investment Company Act, a BDC is only allowed to borrow amounts such that its “asset coverage,” as defined in the Investment Company Act, satisfies the minimum asset coverage ratio specified in the Investment Company Act after such borrowing. “Asset coverage” generally refers to a company’s total assets, less all liabilities and indebtedness not represented by “senior securities,” as defined in the Investment Company Act, divided by total senior securities representing indebtedness and, if applicable, preferred stock. “Senior securities” for this purpose includes borrowings from banks or other lenders, debt securities and preferred stock.

Prior to March 23, 2018, BDCs were required to maintain a minimum asset coverage ratio of 200%. On March 23, 2018, an amendment to Section 61(a) of the Investment Company Act was signed into law to permit BDCs to reduce the minimum asset coverage ratio from 200% to 150%, so long as certain approval and disclosure requirements are satisfied. Under the 200% minimum asset coverage ratio, BDCs are permitted to borrow up to one dollar for investment purposes for every one dollar of investor equity, and under the 150% minimum asset coverage ratio, BDCs are permitted to borrow up to two dollars for investment purposes for every one dollar of investor equity. In other words, Section 61(a) of the Investment Company Act, as amended, permits BDCs to potentially increase their debt-to-equity ratio from a maximum of 1 to 1 to a maximum of 2 to 1.

On April 9, 2018 and June 6, 2018, the Board of Directors, including a “required majority” (as such term is defined in Section 57(o) of the Investment Company Act), and the stockholders of the Company, respectively, approved the application to the Company of the 150% minimum asset coverage ratio set forth in Section 61(a)(2) of the Investment Company Act. As a result, the minimum asset coverage ratio applicable to the Company was reduced from 200% to 150%, effective as of June 7, 2018.

As of June 30, 2021 and December 31, 2020, the Company had total senior securities of $1,054,260 and $1,037,149, respectively, consisting of secured borrowings under the Credit Facility, the Senior Notes, the 2015-1R Notes, and the Preferred Stock, and had asset coverage ratios of 182.98% and 182.09%, respectively.

CRITICAL ACCOUNTING POLICIES

The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. Our critical accounting policies, including those relating to the valuation of our investment portfolio, are described below. The critical accounting policies should be read in connection with our consolidated financial statements in Part I, Item 1 of this Form 10-Q and in Part II, Item 8 of the Company’s annual report on Form 10-K for the year ended December 31, 2020.

107

Fair Value Measurements

The Company applies fair value accounting in accordance with the terms of Financial Accounting Standards Board ASC Topic 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the amount that would be exchanged to sell an asset or transfer a liability in an orderly transfer between market participants at the measurement date. The Company values securities/instruments traded in active markets on the measurement date by multiplying the closing price of such traded securities/instruments by the quantity of shares or amount of the instrument held. The Company may also obtain quotes with respect to certain of its investments, such as its securities/instruments traded in active markets and its liquid securities/instruments that are not traded in active markets, from pricing services, brokers, or counterparties (i.e., “consensus pricing”). When doing so, the Company determines whether the quote obtained is sufficient according to U.S. GAAP to determine the fair value of the security. The Company may use the quote obtained or alternative pricing sources may be utilized including valuation techniques typically utilized for illiquid securities/instruments.

Securities/instruments that are illiquid or for which the pricing source does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Investment Adviser or the Board of Directors, does not represent fair value shall each be valued as of the measurement date using all techniques appropriate under the circumstances and for which sufficient data is available. These valuation techniques may vary by investment and include comparable public market valuations, comparable precedent transaction valuations and/or discounted cash flow analyses. The process generally used to determine the applicable value is as follows: (i) the value of each portfolio company or investment is initially reviewed by the investment professionals responsible for such portfolio company or investment and, for non-traded investments, a standardized template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs is used to determine a preliminary value, which is also reviewed alongside consensus pricing, where available; (ii) preliminary valuation conclusions are documented and reviewed by a valuation committee comprised of members of senior management; (iii) the Board of Directors engages a third-party valuation firm to provide positive assurance on portions of the Middle Market Senior Loans and equity investments portfolio each quarter (such that each non-traded investment other than Credit Fund is reviewed by a third-party valuation firm at least once on a rolling twelve month basis) including a review of management’s preliminary valuation and conclusion on fair value; (iv) the Audit Committee of the Board of Directors (the “Audit Committee”) reviews the assessments of the Investment Adviser and the third-party valuation firm and provides the Board of Directors with any recommendations with respect to changes to the fair value of each investment in the portfolio; and (v) the Board of Directors discusses the valuation recommendations of the Audit Committee and determines the fair value of each investment in the portfolio in good faith based on the input of the Investment Adviser and, where applicable, the third-party valuation firm.

All factors that might materially impact the value of an investment are considered, including, but not limited to the assessment of the following factors, as relevant:

•the nature and realizable value of any collateral;

•call features, put features and other relevant terms of debt;

•the portfolio company’s leverage and ability to make payments;

•the portfolio company’s public or private credit rating;

•the portfolio company’s actual and expected earnings and discounted cash flow;

•prevailing interest rates and spreads for similar securities and expected volatility in future interest rates;

•the markets in which the portfolio company does business and recent economic and/or market events; and

•comparisons to comparable transactions and publicly traded securities.

108

For further information on the fair value hierarchies, our framework for determining fair value and the composition of our portfolio, see Note 3 to the consolidated financial statements in Part I, Item 1 of this Form 10-Q.

Use of Estimates

The preparation of consolidated financial statements in Part I, Item 1 of this Form 10-Q in conformity with U.S. GAAP requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management’s estimates are based on historical experiences and other factors, including expectations of future events that management believes to be reasonable under the circumstances. It also requires management to exercise judgment in the process of applying the Company’s accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on base management and incentive fees involve a higher degree of judgment and complexity and these assumptions and estimates may be significant to the consolidated financial statements in Part I, Item 1 of this Form 10-Q. Actual results could differ from these estimates and such differences could be material.

Investments

Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment using the specific identification method without regard to unrealized appreciation or depreciation previously recognized, and includes investments charged off during the period, net of recoveries. Net change in unrealized appreciation or depreciation on investments as presented in the Consolidated Statements of Operations in Part I, Item 1 of this Form 10-Q reflects the net change in the fair value of investments, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized.

Revenue Recognition

Interest from Investments and Realized Gain/Loss on Investments

Dividend Income

Dividend income from the investment fund, Credit Fund and Credit Fund II, is recorded on the record date for the investment fund to the extent that such amounts are payable by the investment fund and are expected to be collected.

Other Income

109

amortized into other income over the life of the guarantee. The unamortized amount, if any, is included in other assets in the Consolidated Statements of Assets and Liabilities included in Part I, Item 1 of this Form 10-Q.

Non-Accrual Income

Income Taxes

The minimum distribution requirements applicable to RICs require the Company to distribute to its stockholders at least 90% of its investment company taxable income (“ICTI”), as defined by the Code, each year. Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of current year distributions into the next tax year. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.

The SPV and the 2015-1 Issuer are disregarded entities for tax purposes and are consolidated with the tax return of the Company.

Dividends and Distributions to Common Stockholders

110

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are subject to financial market risks, including changes in the valuations of our investment portfolio and interest rates.

Valuation Risk

Our investments generally do not have a readily available market price, and we value these investments at fair value as determined in good faith by our Board of Directors in accordance with our valuation policy. There is no single standard for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. In addition, because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and it is possible that the difference could be material.

Interest Rate Risk

As of June 30, 2021, on a fair value basis, approximately 0.9% of our debt investments bear interest at a fixed rate and approximately 99.1% of our debt investments bear interest at a floating rate, which primarily are subject to interest rate floors. Additionally, our Credit Facility is also subject to floating interest rates and is currently paid based on floating LIBOR rates.

Interest rate sensitivity refers to the change in earnings that may result from changes in the level of interest rates. There can be no assurance that a significant change in market interest rates will not have a material adverse effect on our income in the future.

The following table estimates the potential changes in net cash flow generated from interest income, should interest rates increase or decrease by 100, 200 or 300 basis points. These hypothetical interest income calculations are based on a model of the settled debt investments in our portfolio, excluding our investments in Credit Fund and Credit Fund II, held as of June 30, 2021 and December 31, 2020, and are only adjusted for assumed changes in the underlying base interest rates and the impact of that change on interest income. Interest expense is calculated based on outstanding secured borrowings and notes payable as of June 30, 2021 and December 31, 2020 and based on the terms of our Credit Facility and notes payable. Interest expense on our Credit Facility and notes payable is calculated using the stated interest rate as of June 30, 2021 and December 31, 2020, adjusted for the hypothetical changes in rates, as shown below. We intend to continue to finance a portion of our investments with borrowings and the interest rates paid on our borrowings may impact significantly our net interest income.

We regularly measure exposure to interest rate risk. We assess interest rate risk and manage interest rate exposure on an ongoing basis by comparing our interest rate sensitive assets to our interest rate sensitive liabilities. Based on that review, we determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates.

Based on our Consolidated Statements of Assets and Liabilities as of June 30, 2021 and December 31, 2020, the following table shows the annual impact on net investment income of base rate changes in interest rates for our settled debt investments (considering interest rate floors for variable rate instruments), excluding our investments in Credit Fund and Credit Fund II, and outstanding secured borrowings and notes payable assuming no changes in our investment and borrowing structure:


	June 30, 2021						December 31, 2020
Basis Point Change	Interest Income		Interest Expense		Net Investment Income		Interest Income		Interest Expense		Net Investment Income
Up 300 basis points	$	34,319	$	(23,678)	$	10,641	$	35,024	$	(23,164)	$	11,860
Up 200 basis points	$	19,093	$	(15,785)	$	3,308	$	20,031	$	(15,443)	$	4,588
Up 100 basis points	$	3,886	$	(7,893)	$	(4,007)	$	5,040	$	(7,721)	$	(2,681)
Down 100 basis points	$	(181)	$	1,214	$	1,033	$	(260)	$	1,570	$	1,310
Down 200 basis points	$	(181)	$	1,214	$	1,033	$	(260)	$	1,570	$	1,310
Down 300 basis points	$	(181)	$	1,214	$	1,033	$	(260)	$	1,570	$	1,310

111

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (Principal Executive Officer) and our Chief Financial Officer (Principal Financial Officer), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our current disclosure controls and procedures are effective in timely alerting them of material information relating to the Company that is required to be disclosed by us in the reports we file or submit under the Exchange Act.

Changes in Internal Controls over Financial Reporting

There have been no changes in our internal control over financial reporting during the three month period ended June 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

112

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

The Company may become party to certain lawsuits in the ordinary course of business. The Company is not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against the Company. See also Note 12 to the consolidated financial statements in Part I, Item 1 of this Form 10-Q.

Item 1A. Risk Factors.

In addition to the other information set forth within this Form 10-Q, consideration should be given to the information disclosed in “Risk Factors” in Part I, Item 1A of our annual report on Form 10-K for the year ended December 31, 2020.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

We did not sell any equity securities during the period covered in this report that were not registered under the Securities Act of 1933, as amended.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table provides information regarding purchases of our common stock made by or on behalf of the Company or any "affiliated purchaser" (as defined in Rule 10b-18(a)(3) under the Exchange Act) during the three months ended June 30, 2021 for the periods indicated.



Period	Total Number of Shares Purchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)(2)	Maximum (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
April 1, 2021 through April 30, 2021	153,053	$	13.74	153,053	$	45,479
May 1, 2021 through May 31, 2021	230,432	13.46		230,432	42,377
June 1, 2021 through June 30, 2021	215,462	13.71		215,462	39,425
Total	598,947			598,947

(1)On trade date basis.

(2)On November 2, 2020, the Company's Board of Directors approved the continuation of the Company's Stock Repurchase Program until November 5, 2021, or until the date the approved dollar amount has been used to repurchase shares, as well as the expansion of the repurchase authorization from $100 million to $150 million in the aggregate of the Company's outstanding stock. Pursuant to the program, the Company is authorized to repurchase up to $150 million in the aggregate of its outstanding common stock in the open market and/or through privately negotiated transactions at prices not to exceed the Company’s net asset value per share as reported in its most recent financial statements, in accordance with the guidelines specified in Rule 10b-18 of the Exchange Act. The timing, manner, price and amount of any repurchases will be determined by the Company, in its discretion, based upon the evaluation of economic and market conditions, stock price, available cash, applicable legal and regulatory requirements and other factors, and may include purchases pursuant to Rule 10b5-1 of the Exchange Act. The program does not require the Company to repurchase any specific number of shares and there can be no assurance as to the amount of shares repurchased under the program. The program may be suspended, extended, modified or discontinued by the Company at any time, subject to applicable law. Pursuant to the authorization described above, the Company adopted a 10b5-1 plan (the "Company 10b5-1 Plan"). The Company 10b5-1 Plan provides that purchases will be conducted on the open market in accordance with Rules 10b5-1 and 10b-18 under the Exchange Act and will otherwise be subject to applicable law, which may prohibit purchases under certain circumstances. The amount of purchases made under the Company 10b5-1 Plan or otherwise and how much will be purchased at any time is uncertain, dependent on prevailing market prices and trading volumes, all of which we cannot predict. The Company's Stock Repurchase Program was originally approved by the Company's Board of Directors on November 5, 2018 and announced on November 6, 2018.

Item 3. Defaults Upon Senior Securities.

Not applicable.

113

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.



31.1						Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.*

31.2						Certification of Chief Financial Officer (Principal Financial Officer) Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*

32.1						Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

32.2						Certification of Chief Financial Officer (Principal Financial Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

* Filed herewith

114

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	TCG BDC, INC.

Dated: August 3, 2021	By	/s/ Thomas M. Hennigan
		Thomas M. Hennigan Chief Financial Officer (principal financial officer)

115

Carlyle Secured Lending - 10-Q quarterly report FY

What is the market capitalization of a company?

DISCLAIMER

Contact

Links