Form 8-K Goldman Sachs BDC, Inc. For: Nov 19

November 19, 2020 6:58 AM

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 19, 2020

 

 

GOLDMAN SACHS BDC, INC.

(Exact name of registrant as specified in charter)

 

 

 

Delaware   814-00998   46-2176593

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

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

Registrant’s telephone number, including area code: (212) 902-0300

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, par value $0.001 per

share

  GSBD   The New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

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.  ☐

 

 

 


Item 8.01 – Other Events.

As previously disclosed, on October 12, 2020, Goldman Sachs BDC, Inc., a Delaware corporation (“GSBD”), completed its previously announced merger with Goldman Sachs Middle Market Lending Corp. (“MMLC”) pursuant to that certain Amended and Restated Agreement and Plan of Merger (the “Merger Agreement”), dated as of June 11, 2020, by and among GSBD, MMLC, Evergreen Merger Sub Inc., a wholly owned subsidiary of GSBD (“Merger Sub”), and Goldman Sachs Asset Management, L.P. (“GSAM”), investment adviser to each of GSBD and MMLC. Pursuant to the Merger Agreement, Merger Sub was first merged with and into MMLC, with MMLC as the surviving corporation (the “First Merger”), and, immediately following the First Merger, MMLC was then merged with and into GSBD, with GSBD as the surviving company (the First Merger and the subsequent merger, collectively, the “Merger”).

Filed with this Current Report on Form 8-K as Exhibit 99.1 are the unaudited consolidated financial statements of MMLC for the periods described in Item 9.01(a) below and the notes related thereto.

Filed with this Current Report on Form 8-K as Exhibit 99.2 are the unaudited pro forma condensed consolidated financial statements for the periods described in Item 9.01(b) below and the notes related thereto.

Item 9.01 – Financial Statements and Exhibits.

(a) Financial statements.

The historical unaudited consolidated financial statements of MMLC as of September 30, 2020 and December 31, 2019 and for the three and nine months ended September 30, 2020 and 2019, are filed herewith as Exhibit 99.1 and incorporated herein by reference.

(b) Pro forma financial information.

The unaudited pro forma condensed consolidated financial statements of GSBD, giving effect to the Merger, as of and for the nine months ended September 30, 2020 and for the year ended December 31, 2019, are filed herewith as Exhibit 99.2 and incorporated herein by reference.

(d) Exhibits.

 

Exhibit

Number

  

Description

99.1    Historical unaudited consolidated financial statements of Goldman Sachs Middle Market Lending Corp. as of September 30, 2020 and December  31, 2019 and for the three and nine months ended September 30, 2020 and 2019.
99.2    Unaudited pro forma condensed consolidated financial statements of Goldman Sachs BDC, Inc., giving effect to the Merger, as of and for the nine months ended September  30, 2020 and for the year ended December 31, 2019.


Forward-Looking Statements

This Current Report on Form 8-K may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this Current Report on Form 8-K may constitute forward-looking statements and are not guarantees of future performance or results of GSBD and involve a number of risks and uncertainties. Such forward-looking statements may include statements preceded by, followed by or that otherwise include the words “may,” “might,” “will,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “predict,” “potential,” “plan” or similar words. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings made by GSBD with the Securities and Exchange Commission (the “SEC”), including those contained in the joint proxy statement and prospectus that forms part of a registration statement on Form N-14 filed with the SEC on August 4, 2020. Certain factors could cause actual results to differ materially from those projected in these forward-looking statements. Factors that could cause actual results to differ materially include: the ability to realize the anticipated benefits of the Merger, effects of disruption on the business of GSBD from the Merger; GSBD’s plans, expectations, objectives and intentions as a result of the Merger, future operating results of GSBD, the business prospects of GSBD and the prospects of its portfolio companies, actual and potential conflicts of interests with GSAM and other affiliates of GSAM, general economic and political trends and other factors, the dependence of GSBD’s future success on the general economy and its effect on the industries in which it invests; and future changes in laws or regulations and interpretations thereof. GSBD does not undertake any duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this Current Report on Form 8-K.


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 hereunto duly authorized.

 

   

GOLDMAN SACHS BDC, INC.

(Registrant)

Date: November 19, 2020     By:  

/s/ Jonathan Lamm

      Name: Jonathan Lamm
      Title: Chief Financial Officer and Treasurer

Exhibit 99.1

GOLDMAN SACHS MIDDLE MARKET LENDING CORP.

 

INDEX

   PAGE  
FINANCIAL INFORMATION   

Financial Statements

  

Consolidated Statements of Assets and Liabilities as of September 30, 2020 (Unaudited) and December 31, 2019

     2  

Consolidated Statements of Operations for the three and nine months ended September 30, 2020 (Unaudited) and 2019 (Unaudited)

     3  

Consolidated Statements of Changes in Net Assets for the three and nine months ended September 30, 2020 (Unaudited) and 2019 (Unaudited)

     4  

Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 (Unaudited) and 2019 (Unaudited)

     5  

Consolidated Schedules of Investments as of September 30, 2020 (Unaudited) and December 31, 2019

     6  

Notes to the Consolidated Financial Statements (Unaudited)

     19  


Goldman Sachs Middle Market Lending Corp.

Consolidated Statements of Assets and Liabilities

(in thousands, except share and per share amounts)

 

     September 30,
2020
(Unaudited)
    December 31,
2019
 

Assets

    

Investments, at fair value

    

Non-controlled/non-affiliated investments (cost of $1,693,771 and $1,656,685)

   $ 1,637,716     $ 1,633,562  

Non-controlled affiliated investments (cost of $45,801 and $45,702)

     50,826       49,598  

Investments in affiliated money market fund (cost of $160,798 and $-)

     160,798       —    

Cash

     16,911       13,393  

Receivable for investments sold

     426       41  

Interest and dividends receivable

     11,496       7,022  

Deferred financing costs

     1,988       2,617  

Unrealized appreciation on foreign currency forward contracts

     —         46  

Other assets

     824       96  
  

 

 

   

 

 

 

Total assets

   $ 1,880,985     $ 1,706,375  
  

 

 

   

 

 

 

Liabilities

    

Debt

   $ 843,219     $ 729,986  

Interest and other debt expenses payable

     378       713  

Management fees payable

     3,714       3,520  

Incentive fees payable

     6,456       3,419  

Distribution payable

     —         21,272  

Unrealized depreciation on foreign currency forward contracts

     134       —    

Directors’ fees payable

     100       —    

Accrued expenses and other liabilities

     3,884       2,676  
  

 

 

   

 

 

 

Total liabilities

   $ 857,885     $ 761,586  
  

 

 

   

 

 

 

Commitments and Contingencies (Note 8)

    

Net Assets

    

Preferred stock, par value $0.001 per share (1,000,000 shares authorized, no shares issued and outstanding)

   $ —       $ —    

Common stock, par value $0.001 per share (200,000,000 shares authorized, 53,844,947 and 50,562,483 shares issued and outstanding as of September 30, 2020 and December 31, 2019)

     54       51  

Paid-in capital in excess of par

     1,034,279       972,476  

Distributable earnings

     (11,233     (27,738
  

 

 

   

 

 

 

TOTAL NET ASSETS

   $ 1,023,100     $ 944,789  
  

 

 

   

 

 

 

TOTAL LIABILITIES AND NET ASSETS

   $ 1,880,985     $ 1,706,375  
  

 

 

   

 

 

 

Net asset value per share

   $ 19.00     $ 18.69  

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

 

2


Goldman Sachs Middle Market Lending Corp.

Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(Unaudited)

 

     For the Three Months Ended     For the Nine Months Ended  
     September 30,
2020
    September 30,
2019
    September 30,
2020
    September 30,
2019
 

Investment Income:

        

From non-controlled/non-affiliated investments:

        

Interest income

   $ 36,520     $ 37,135     $ 111,906     $ 101,019  

Other income

     1,505       535       2,113       1,502  

From non-controlled affiliated investments:

        

Interest income

     751       654       2,319       1,986  

Dividend income

     48       58       106       149  

Other income

     7       7       73       20  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total investment income

   $ 38,831     $ 38,389     $ 116,517     $ 104,676  
  

 

 

   

 

 

   

 

 

   

 

 

 

Expenses:

        

Interest and other debt expenses

   $ 5,562     $ 7,001     $ 19,162     $ 16,469  

Management fees

     3,714       3,489       10,739       10,145  

Incentive fees

     6,456       3,265       6,456       14,605  

Professional fees

     1,341       517       3,358       1,252  

Directors’ fees

     107       114       320       327  

Other General and Administrative Expenses

     928       905       2,753       2,488  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

   $ 18,108     $ 15,291     $ 42,788     $ 45,286  
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INVESTMENT INCOME

   $ 20,723     $ 23,098     $ 73,729     $ 59,390  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net realized and unrealized gains (losses):

        

Net realized gain (loss) from:

        

Non-controlled/non-affiliated investments

   $ —       $ (7   $ 226     $ (10,568

Foreign currency forward contracts

     40       53       150       65  

Foreign currency transactions

     47       (19     20       19  

Net change in unrealized appreciation (depreciation) from:

        

Non-controlled/non-affiliated investments

     27,126       (7,236     (32,932     (11,424

Non-controlled affiliated investments

     401       479       1,129       2,016  

Foreign currency forward contracts

     (179     78       (180     123  

Foreign currency translations

     (2,334     2,225       (2,411     2,642  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net realized and unrealized gains (losses)

   $ 25,101     $ (4,427   $ (33,998   $ (17,127
  

 

 

   

 

 

   

 

 

   

 

 

 

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

   $ —       $ —       $ —       $ 100  

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

     (89     (171     (73     (614
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS

   $ 45,735     $ 18,500     $ 39,658     $ 41,749  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding

     53,844,947       49,470,258       53,198,038       46,754,248  

Net investment income per share (basic and diluted)

   $ 0.38     $ 0.47     $ 1.39     $ 1.27  

Earnings (loss) per share (basic and diluted)

   $ 0.85     $ 0.37     $ 0.75     $ 0.89  

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

 

3


Goldman Sachs Middle Market Lending Corp.

Consolidated Statements of Changes in Net Assets

(in thousands, except share and per share amounts)

(Unaudited)

 

     For the Three Months Ended     For the Nine Months Ended  
     September 30,
2020
    September 30,
2019
    September 30,
2020
    September 30,
2019
 

Net assets at beginning of period

   $ 977,365     $ 928,731     $ 944,789     $ 820,154  

Increase (decrease) in net assets from operations:

        

Net investment income

   $ 20,723     $ 23,098     $ 73,729     $ 59,390  

Net realized gain (loss)

     87       27       396       (10,484

Net change in unrealized appreciation (depreciation)

     25,014       (4,454     (34,394     (6,643

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

     —         —         —         100  

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

     (89     (171     (73     (614
  

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in net assets from operations

   $ 45,735     $ 18,500     $ 39,658     $ 41,749  
  

 

 

   

 

 

   

 

 

   

 

 

 

Distributions to stockholders from:

        

Distributable earnings

   $ —       $ (21,272   $ (23,153   $ (60,099
  

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to stockholders

   $ —       $ (21,272   $ (23,153   $ (60,099
  

 

 

   

 

 

   

 

 

   

 

 

 

Capital transactions:

        

Issuance of common shares

   $ —       $ —       $ 61,806     $ 124,155  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in net assets from capital transactions

   $ —       $ —       $ 61,806     $ 124,155  
  

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL INCREASE (DECREASE) IN NET ASSETS

   $ 45,735     $ (2,772   $ 78,311     $ 105,805  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net assets at end of period

   $ 1,023,100     $ 925,959     $ 1,023,100     $ 925,959  
  

 

 

   

 

 

   

 

 

   

 

 

 

Distributions declared per share

   $ —       $ 0.43     $ 0.43     $ 1.29  

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

 

4


Goldman Sachs Middle Market Lending Corp.

Consolidated Statements of Cash Flows

(in thousands, except share and per share amounts)

(Unaudited)

 

     For the Nine Months Ended  
     September 30,
2020
    September 30,
2019
 

Cash flows from operating activities:

    

Net increase (decrease) in net assets from operations:

   $ 39,658     $ 41,749  

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

    

Purchases of investments

     (171,954     (643,023

Payment-in-kind interest capitalized

     (1,462     (794

Investments in affiliated money market fund, net

     (160,798     —    

Proceeds from sales of investments and principal repayments

     142,064       146,770  

Net realized (gain) loss

     (220     10,575  

Net change in unrealized (appreciation) depreciation on investments

     31,803       9,408  

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

     158       (89

Amortization of premium and accretion of discount, net

     (5,613     (5,063

Amortization of deferred financing costs

     1,059       974  

Change in operating assets and liabilities:

    

(Increase) decrease in receivable for investments sold

     (385     (11

(Increase) decrease in interest and dividends receivable

     (4,474     (2,525

(Increase) decrease in other assets

     (728     125  

Increase (decrease) in interest and other debt expenses payable

     (335     38  

Increase (decrease) in management fees payable

     194       590  

Increase (decrease) in incentive fees payable

     3,037       (247

Increase (decrease) in investments purchased payable

     —         15,868  

Increase (decrease) in directors’ fees payable

     100       99  

Increase (decrease) in accrued expenses and other liabilities

     1,208       131  
  

 

 

   

 

 

 

Net cash provided by (used for) operating activities

   $ (126,688   $ (425,425
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Proceeds from issuance of common stock

   $ 61,806     $ 124,155  

Distributions paid

     (44,425     (55,017

Financing costs paid

     (430     (745

Borrowings on debt

     240,433       586,924  

Repayments of debt

     (127,200     (233,550
  

 

 

   

 

 

 

Net cash provided by (used for) financing activities

   $ 130,184     $ 421,767  
  

 

 

   

 

 

 

Net increase (decrease) in cash

     3,496       (3,658

Effect of foreign exchange rate changes on cash and cash equivalents

     22       (35

Cash, beginning of period

     13,393       15,010  
  

 

 

   

 

 

 

Cash, end of period

   $ 16,911     $ 11,317  
  

 

 

   

 

 

 

Supplemental and non-cash activities

    

Interest expense paid

   $ 18,127     $ 14,745  

Accrued but unpaid excise tax expense

   $ —       $ 8  

Accrued but unpaid distributions

   $ —       $ 21,272  

Exchange of investments

   $ 13,019     $ 1,054  

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

 

5


Goldman Sachs Middle Market Lending Corp.

Consolidated Schedule of Investments as of September 30, 2020

(in thousands, except share and per share amounts)

(Unaudited)

 

Investment *

 

Industry

  Interest
Rate (+)
   

Reference Rate and

Spread (+)

  Maturity     Par
Amount/
Shares
(++)
    Cost     Fair
Value
 

1st Lien/Senior Secured Debt # - 126.17%

           

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Acquia, Inc.(1) (2) (3)

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Apptio, Inc.(1) (2) (3)

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Associations, Inc.(1) (2)

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BJH Holdings III Corp. (dba Jack’s Family Restaurants)(2)

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Brillio, LLC(1) (2) (3)

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Bullhorn, Inc.(2)

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Bullhorn, Inc.(2)

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Bullhorn, Inc.(2) (3)

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Bullhorn, Inc.(2) (3)

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CFS Management, LLC (dba Center for Sight Management)(1) (2)

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Chronicle Bidco Inc. (dba
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  Health Care Providers & Services     7.50   L + 6.50%; 1.00% Floor     03/28/2025       12,700       12,566       12,319  

Collaborative Imaging, LLC (dba Texas Radiology Associates)^^^ (1) (2)

  Health Care Providers & Services     7.50   L + 6.50%; 1.00% Floor     03/28/2025       9,673       9,550       9,383  

ConnectWise, LLC(1) (2)

  IT Services     7.00   L + 6.00%; 1.00% Floor     02/28/2025       19,806       19,464       19,608  

ConnectWise, LLC(1) (2) (3)

  IT Services     L + 6.00%; 1.00% Floor     02/28/2025       1,524       (26     (15

Convene 237 Park Avenue, LLC (dba Convene)(1) (2)

  Real Estate Management & Development     9.00   L + 7.50%; 1.50% Floor     08/30/2024       31,000       30,492       26,350  

Convene 237 Park Avenue, LLC (dba Convene)(1) (2)

  Real Estate Management & Development     9.00   L + 7.50%; 1.50% Floor     08/30/2024       9,120       8,962       7,752  

CorePower Yoga LLC(2)

  Diversified Consumer Services     7.00   L + 6.00% (incl. 1.25% PIK); 1.00% Floor     05/14/2025       14,400       14,214       12,240  

CorePower Yoga LLC(2) (3)

  Diversified Consumer Services     7.00   L + 6.00% (incl. 1.25% PIK); 1.00% Floor     05/14/2025       1,010       189       50  

CST Buyer Company (dba
Intoxalock)(1) (2)

  Diversified Consumer Services     6.25   L + 5.25%; 1.00% Floor     10/03/2025       16,870       16,684       16,870  

CST Buyer Company (dba
Intoxalock)(1) (2) (3)

  Diversified Consumer Services     L + 5.25%; 1.00% Floor     10/03/2025       1,294       (14     —    

DDS USA Holding, Inc.(1) (2)

  Health Care Equipment & Supplies     6.75   L + 5.75%; 1.00% Floor     06/30/2022       5,364       5,350       5,310  

DDS USA Holding, Inc.(1) (2)

  Health Care Equipment & Supplies     6.75   L + 5.75%; 1.00% Floor     06/30/2022       5,069       5,056       5,018  

DDS USA Holding, Inc.(1) (2) (3)

  Health Care Equipment & Supplies     6.75   L + 5.75%; 1.00% Floor     06/30/2022       1,533       763       751  

Diligent Corporation(2)

  Professional Services     7.25   L + 6.25%; 1.00% Floor     08/04/2025     22,650       25,860       25,892  

Diligent Corporation(2)

  Professional Services     7.25   L + 6.25%; 1.00% Floor     08/04/2025       14,645       14,438       14,279  

Diligent Corporation(2) (3)

  Professional Services     L + 6.25%; 1.00% Floor     08/04/2025       1,800       (34     (45

DocuTAP, Inc.(1) (2)

  Health Care Technology     6.50   L + 5.50%; 1.00% Floor     05/12/2025       34,802       34,102       33,845  

E2open, LLC(2)

  Software     6.75   L + 5.75%; 1.00% Floor     11/26/2024       24,057       23,864       23,095  

 

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

 

6


Goldman Sachs Middle Market Lending Corp.

Consolidated Schedule of Investments as of September 30, 2020

(in thousands, except share and per share amounts)

(Unaudited)

 

Investment *

 

Industry

  Interest
Rate (+)
   

Reference Rate and

Spread (+)

  Maturity     Par
Amount/
Shares
(++)
    Cost     Fair
Value
 

Elemica Parent, Inc.(1) (2)

  Chemicals     5.73   L + 5.50%     09/18/2025     $ 4,225     $ 4,135     $ 3,930  

Elemica Parent, Inc.(1) (2) (3)

  Chemicals     5.72   L + 5.50%     09/18/2025       550       406       379  

Elemica Parent, Inc.(1) (2) (3)

  Chemicals     L + 5.50%     09/18/2025       830       (9     (58

Empirix, Inc.(1) (2)

  Diversified Telecommunication Services     7.25   L + 6.25%; 1.00% Floor     09/25/2024       31,261       30,870       30,323  

Empirix, Inc.(1) (2) (3)

  Diversified Telecommunication Services     L + 6.25%; 1.00% Floor     09/25/2023       1,800       (19     (54

Eptam Plastics, Ltd.(1) (2)

  Health Care Equipment & Supplies     6.50   L + 5.50%; 1.00% Floor     12/06/2025       6,331       6,247       6,157  

Eptam Plastics, Ltd.(1) (2)

  Health Care Equipment & Supplies     6.50   L + 5.50%; 1.00% Floor     12/06/2025       1,354       1,336       1,317  

Eptam Plastics, Ltd.(1) (2) (3)

  Health Care Equipment & Supplies     L + 5.50%; 1.00% Floor     12/06/2025       2,708       (18     (74

Fenergo Finance 3
Limited(1) (2) (4)

  Diversified Financial Services     7.00   L + 6.00%; 1.00% Floor     09/05/2024     25,300       29,040       29,292  

Fenergo Finance 3
Limited(1) (2) (3) (4)

  Diversified Financial Services     L + 6.00%; 1.00% Floor     09/05/2024       1,683       (19     (21

Fenergo Finance 3
Limited(1) (2) (3) (4)

  Diversified Financial Services     L + 6.00%; 1.00% Floor     09/05/2024     2,200       (30     (32

Foundation Software(2)

  Construction & Engineering     10.25   P + 7.00%; 2.00% Floor     08/31/2027       428       418       418  

Foundation Software(2) (3)

  Construction & Engineering     P + 7.00%; 2.00% Floor     08/31/2026       61       (2     (2

FWR Holding Corporation (dba First Watch Restaurants)(1) (3)

  Hotels, Restaurants & Leisure     L + 7.00% (incl. 1.50% PIK); 1.00% Floor     08/21/2023       96       —         (3

FWR Holding Corporation (dba First Watch Restaurants)(1)

  Hotels, Restaurants & Leisure     8.00   L + 7.00% (incl. 1.50% PIK); 1.00% Floor     08/21/2023       4,004       3,977       3,864  

FWR Holding Corporation (dba First Watch Restaurants)(1)

  Hotels, Restaurants & Leisure     8.00   L + 7.00% (incl. 1.50% PIK); 1.00% Floor     08/21/2023       3,011       2,991       2,905  

FWR Holding Corporation (dba First Watch Restaurants)(1)

  Hotels, Restaurants & Leisure     8.00   L + 7.00% (incl. 1.50% PIK); 1.00% Floor     08/21/2023       2,995       2,975       2,891  

FWR Holding Corporation (dba First Watch Restaurants)(1)

  Hotels, Restaurants & Leisure     8.00   L + 7.00% (incl. 1.50% PIK); 1.00% Floor     08/21/2023       11,297       11,145       10,901  

FWR Holding Corporation (dba First Watch Restaurants)(1)

  Hotels, Restaurants & Leisure     8.00   L + 7.00% (incl. 1.50% PIK); 1.00% Floor     08/21/2023       2,257       2,228       2,178  

FWR Holding Corporation (dba First Watch Restaurants)(1)

  Hotels, Restaurants & Leisure     8.00   L + 7.00% (incl. 1.50% PIK); 1.00% Floor     08/21/2023       1,427       1,408       1,377  

FWR Holding Corporation (dba First Watch Restaurants)(1) (3)

  Hotels, Restaurants & Leisure     L + 7.00% (incl. 1.50% PIK); 1.00% Floor     08/21/2023       1,506       (19     (53

Gastro Health Holdco, LLC(1) (2)

  Health Care Providers & Services     7.02   L + 6.00%; 1.00% Floor     09/04/2024       13,795       13,600       13,209  

Gastro Health Holdco, LLC(1) (2)

  Health Care Providers & Services     7.00   L + 6.00%; 1.00% Floor     09/04/2024       7,123       7,020       6,820  

Gastro Health Holdco, LLC(1) (2)

  Health Care Providers & Services     7.01   L + 6.00%; 1.00% Floor     09/04/2024       6,886       6,801       6,593  

Gastro Health Holdco, LLC(1) (2) (3)

  Health Care Providers & Services     L + 6.00%; 1.00% Floor     09/04/2023       2,900       (34     (123

GlobalTranz Enterprises, Inc.(2)

  Road & Rail     5.16   L + 5.00%     05/15/2026       11,358       11,167       9,569  

Governmentjobs.com, Inc. (dba NeoGov)(1) (2)

  Software     7.50   L + 6.50%; 1.00% Floor     02/05/2026       29,153       28,621       28,643  

Governmentjobs.com, Inc. (dba NeoGov)(1) (2) (3)

  Software     7.50   L + 6.50%; 1.00% Floor     02/05/2026       3,887       222       224  

Granicus, Inc.(2)

  Software     8.00   L + 7.00%; 1.00% Floor     08/21/2026       13,560       13,226       13,221  

Granicus, Inc.(2) (3)

  Software     L + 7.00%; 1.00% Floor     08/21/2026       929       (23     (23

HS4 AcquisitionCo, Inc. (dba HotSchedules & Fourth)(1) (2)

  Hotels, Restaurants & Leisure     7.75   L + 6.75%; 1.00% Floor     07/09/2025       34,501       34,072       32,000  

HS4 AcquisitionCo, Inc. (dba HotSchedules & Fourth)(1) (2) (3)

  Hotels, Restaurants & Leisure     L + 6.75%; 1.00% Floor     07/09/2025       2,805       (34     (203

Hygiena Borrower LLC

  Life Sciences Tools & Services     5.00   L + 4.00%; 1.00% Floor     08/26/2022       5,122       5,084       5,019  

Hygiena Borrower LLC(3)

  Life Sciences Tools & Services     L + 4.00%; 1.00% Floor     08/26/2022       550       (4     (11

iCIMS, Inc.(1) (2)

  Software     7.50   L + 6.50%; 1.00% Floor     09/12/2024       42,594       41,988       41,849  

iCIMS, Inc.(1) (2)

  Software     7.50   L + 6.50%; 1.00% Floor     09/12/2024       7,844       7,720       7,707  

iCIMS, Inc.(1) (2) (3)

  Software     L + 6.50%; 1.00% Floor     09/12/2024       2,662       (35     (47

Instructure Holdings(1) (2)

  Diversified Consumer Services     8.00   L + 7.00%; 1.00% Floor     03/24/2026       38,591       38,142       38,206  

Instructure Holdings(1) (2) (3)

  Diversified Consumer Services     L + 7.00%; 1.00% Floor     03/24/2026       3,000       (34     (30

 

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

 

7


Goldman Sachs Middle Market Lending Corp.

Consolidated Schedule of Investments as of September 30, 2020

(in thousands, except share and per share amounts)

(Unaudited)

 

Investment *

 

Industry

  Interest
Rate (+)
   

Reference Rate and

Spread (+)

  Maturity     Par
Amount/
Shares
(++)
    Cost     Fair
Value
 

Integral Ad Science, Inc.(1) (2)

  Interactive Media & Services     8.25   L + 7.25% (incl. 1.25% PIK); 1.00% Floor     07/19/2024     $ 36,902     $ 36,403     $ 35,519  

Integral Ad Science, Inc.(1) (2) (3)

  Interactive Media & Services     L + 6.00%; 1.00% Floor     07/19/2023       2,586       (29     (97

Internet Truckstop Group, LLC (dba Truckstop)(1) (2)

  Transportation Infrastructure     6.50   L + 5.50%; 1.00% Floor     04/02/2025       32,133       31,500       31,491  

Internet Truckstop Group, LLC (dba Truckstop)(1) (2) (3)

  Transportation Infrastructure     L + 5.50%; 1.00% Floor     04/02/2025       2,600       (49     (52

Lithium Technologies, Inc.(1) (2)

  Interactive Media & Services     9.00   L + 8.00%; 1.00% Floor     10/03/2022       50,047       49,473       47,920  

Lithium Technologies, Inc.(1) (2) (3)

  Interactive Media & Services     9.21   L + 8.00%; 1.00% Floor     10/03/2022       3,448       539       428  

Mailgun Technologies, Inc.(1) (2)

  Interactive Media & Services     6.00   L + 5.00%; 1.00% Floor     03/26/2025       22,995       22,628       22,995  

Mailgun Technologies, Inc.(1) (2) (3)

  Interactive Media & Services     L + 5.00%; 1.00% Floor     03/26/2025       1,448       —         —    

MedeAnalytics, Inc.(2) (3)

  Health Care Technology     L + 6.50%; 1.00% Floor     10/09/2026       479       —         —    

MMIT Holdings, LLC (dba Managed Markets Insight &
Technology)(1) (2)

  Health Care Technology     6.50   L + 5.50%; 1.00% Floor     11/15/2024       29,507       29,059       29,064  

MMIT Holdings, LLC (dba Managed Markets Insight &
Technology)(1) (2) (3)

  Health Care Technology     6.50   L + 5.50%; 1.00% Floor     11/15/2024       4,525       2,651       2,647  

MRI Software LLC

  Real Estate Management & Development     6.50   L + 5.50%; 1.00% Floor     02/10/2026       14,025       13,901       13,534  

MRI Software LLC(3)

  Real Estate Management & Development     L + 5.50%; 1.00% Floor     02/10/2026       565       (7     (20

MRI Software LLC(3)

  Real Estate Management & Development     L + 5.50%; 1.00% Floor     02/10/2026       990       (9     (35

Netvoyage Corporation (dba NetDocuments)(1) (2)

  Software     8.75   L + 7.75%; 1.00% Floor     03/22/2024       7,876       7,787       7,620  

Netvoyage Corporation (dba NetDocuments)(1) (2)

  Software     8.75   L + 7.75%; 1.00% Floor     03/22/2024       5,940       5,842       5,747  

Netvoyage Corporation (dba NetDocuments)(1) (2)

  Software     8.75   L + 7.75%; 1.00% Floor     03/22/2024       880       867       851  

Netvoyage Corporation (dba NetDocuments)(1) (2) (3)

  Software     L + 7.75%; 1.00% Floor     03/24/2022       610       (4     (20

Picture Head Midco LLC(1) (2)

  Entertainment     8.25   L + 7.25% (incl. 0.50% PIK); 1.00% Floor     08/31/2023       27,467       27,004       24,995  

PlanSource Holdings, Inc.(1) (2)

  Health Care Technology     7.25   L + 6.25%; 1.00% Floor     04/22/2025       33,940       33,396       32,752  

PlanSource Holdings, Inc.(1) (2) (3)

  Health Care Technology     L + 6.25%; 1.00% Floor     04/22/2025       4,681       (72     (164

Power Stop, LLC(2)

  Auto Components     4.65   L + 4.50%     10/19/2025       10,709       10,689       10,174  

Premier Imaging, LLC (dba Lucid Health)(1) (2)

  Health Care Providers & Services     6.75   L + 5.75%; 1.00% Floor     01/02/2025       17,127       16,906       16,356  

Project Eagle Holdings, LLC(2)

  Aerospace & Defense     9.25   L + 8.25%; 1.00% Floor     07/06/2026       452       441       441  

Project Eagle Holdings, LLC(2) (3)

  Aerospace & Defense     L + 8.25%; 1.00% Floor     07/06/2026       38       (1     (1

PT Intermediate Holdings III, LLC (dba Parts Town)(2)

  Trading Companies & Distributors     6.50   L + 5.50%; 1.00% Floor     10/15/2025       17,190       17,115       15,901  

Purfoods, LLC(2)

  Health Care Providers & Services     7.25   L + 6.25%; 1.00% Floor     08/12/2026       300       293       293  

Purfoods, LLC(2) (3)

  Health Care Providers & Services     L + 6.25%; 1.00% Floor     08/12/2026       200       (2     (3

Riverpoint Medical, LLC(1) (2)

  Health Care Equipment & Supplies     5.50   L + 4.50%; 1.00% Floor     06/21/2025       13,305       13,250       12,806  

Riverpoint Medical, LLC(1) (2) (3)

  Health Care Equipment & Supplies     L + 4.50%; 1.00% Floor     06/21/2025       2,450       (10     (92

Selectquote, Inc.(2)

  Insurance     7.00   L + 6.00%; 1.00% Floor     11/05/2024       12,082       11,878       12,082  

SF Home Décor, LLC (dba SureFit Home Décor)(1) (2)

  Household Products     10.75   L + 9.75%; 1.00% Floor     07/13/2022       23,517       23,142       21,224  

Shopatron, LLC (dba Kibo)(1) (2)

  Internet & Direct Marketing Retail     9.00   L + 8.00%; 1.00% Floor     12/18/2020       8,879       8,845       8,813  

Shopatron, LLC (dba Kibo)(1) (2) (5)

  Internet & Direct Marketing Retail     9.00   L + 8.00%; 1.00% Floor     12/18/2020       2,737       2,743       2,729  

SPay, Inc. (dba Stack Sports)(1) (2)

  Interactive Media & Services     8.75   L + 7.75% (incl. 2.00% PIK); 1.00% Floor     06/17/2024       15,146       14,950       13,329  

SPay, Inc. (dba Stack Sports)(1) (2)

  Interactive Media & Services     8.84   L + 7.75% (incl. 2.00% PIK); 1.00% Floor     06/17/2024       1,101       1,087       969  

SPay, Inc. (dba Stack Sports)(1) (2)

  Interactive Media & Services     8.97   L + 7.75% (incl. 2.00% PIK); 1.00% Floor     06/17/2024       550       546       484  

Syntellis Performance Solutions,
LLC(1) (2)

  Health Care Technology     9.00   L + 8.00%; 1.00% Floor     08/02/2027       419       407       407  

 

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

 

8


Goldman Sachs Middle Market Lending Corp.

Consolidated Schedule of Investments as of September 30, 2020

(in thousands, except share and per share amounts)

(Unaudited)

 

Investment *

 

Industry

  Interest
Rate (+)
   

Reference Rate and

Spread (+)

  Maturity     Par
Amount/
Shares
(++)
    Cost     Fair
Value
 

The Center for Orthopedic and Research Excellence, Inc. (dba HOPCo)(1) (2)

  Health Care Providers & Services     6.25   L + 5.25%; 1.00% Floor     08/15/2025     $ 15,814     $ 15,615     $ 15,261  

The Center for Orthopedic and Research Excellence, Inc. (dba HOPCo)(1) (2) (3)

  Health Care Providers & Services     L + 5.25%; 1.00% Floor     08/15/2025       2,707       (33     (95

Viant Medical Holdings, Inc.(2)

  Health Care Equipment & Supplies     7.25   L + 6.25%; 1.00% Floor     07/02/2025       18,973       18,693       18,025  

Villa Bidco Inc (dba Authority
Brands)(1) (2)

  Diversified Consumer Services     6.75   L + 5.75%; 1.00% Floor     03/21/2025       16,092       15,764       15,770  

Villa Bidco Inc (dba Authority
Brands)(1) (2) (3)

  Diversified Consumer Services     8.00   P + 4.75%; 2.00% Floor     03/21/2025       1,297       153       153  

VRC Companies, LLC (dba Vital Records Control)(1)

  Commercial Services & Supplies     7.50   L + 6.50%; 1.00% Floor     03/31/2023       9,926       9,867       9,851  

VRC Companies, LLC (dba Vital Records Control)(1) (3)

  Commercial Services & Supplies     L + 6.50%; 1.00% Floor     03/31/2022       249       (1     (2

WebPT, Inc.(1) (2)

  Health Care Technology     7.75   L + 6.75%; 1.00% Floor     08/28/2024       14,933       14,690       14,336  

WebPT, Inc.(1) (2) (3)

  Health Care Technology     7.75   L + 6.75%; 1.00% Floor     08/28/2024       1,556       753       716  

WebPT, Inc.(1) (2) (3)

  Health Care Technology     L + 6.75%; 1.00% Floor     08/28/2024       1,867       (15     (75

Wine.com, LLC(1) (2)

  Beverages     8.00   L + 7.00%; 1.00% Floor     11/14/2024       9,000       8,866       8,977  

Wolfpack IP Co. (dba Lone Wolf Technologies)(1) (2) (4)

  Real Estate Management & Development     7.00   L + 6.00%; 1.00% Floor     06/13/2025       47,220       46,445       46,748  

Wolfpack IP Co. (dba Lone Wolf Technologies)(1) (2) (3) (4)

  Real Estate Management & Development     L + 6.00%; 1.00% Floor     06/13/2025       4,722       (74     (47

WorkForce Software, LLC(1) (2)

  Software     7.50   L + 6.50%; 1.00% Floor     07/31/2025       12,796       12,582       12,477  

WorkForce Software, LLC(1) (2) (3)

  Software     L + 6.50%; 1.00% Floor     07/31/2025       1,123       (18     (28

Wrike, Inc.(1) (2)

  Professional Services     7.75   L + 6.75%; 1.00% Floor     12/31/2024       32,260       31,744       32,260  

Wrike, Inc.(1) (2) (3)

  Professional Services     L + 6.75%; 1.00% Floor     12/31/2024       2,300       (33     —    

Xactly Corporation(1) (2)

  IT Services     8.25   L + 7.25%; 1.00% Floor     07/29/2022       34,852       34,533       34,242  

Xactly Corporation(1) (2) (3)

  IT Services     L + 7.25%; 1.00% Floor     07/29/2022       2,177       (16     (38

Yasso, Inc.(1) (2)

  Food Products     8.75   L + 7.75%; 1.00% Floor     03/23/2022       7,348       7,297       7,348  
           

 

 

   

 

 

 

Total 1st Lien/Senior Secured Debt

            1,320,702       1,290,854  

 

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

 

9


Goldman Sachs Middle Market Lending Corp.

Consolidated Schedule of Investments as of September 30, 2020

(in thousands, except share and per share amounts)

(Unaudited)

 

Investment *

 

Industry

  Interest
Rate (+)
   

Reference Rate and

Spread (+)

  Maturity     Par
Amount/
Shares
(++)
    Cost     Fair
Value
 

1st Lien/Last-Out Unitranche (6) - 9.78%

           

Doxim, Inc.(1) (2)

  Diversified Financial Services     7.00   L + 6.00%; 1.00% Floor     02/28/2024     $ 27,300     $ 26,741     $ 26,618  

Doxim, Inc.(1) (2)

  Diversified Financial Services     7.00   L + 6.00%; 1.00% Floor     02/28/2024       22,376       21,930       21,816  

RugsUSA, LLC(1) (2)

  Household Products     7.00   L + 6.00%; 1.00% Floor     04/30/2023       8,314       8,267       8,272  

Smarsh, Inc.(1) (2)

  Interactive Media & Services     8.88   L + 7.88%; 1.00% Floor     03/31/2021       43,750       43,607       43,313  
           

 

 

   

 

 

 

Total 1st Lien/Last-Out Unitranche

            100,545       100,019  

2nd Lien/Senior Secured Debt - 26.17%

             

American Dental Partners, Inc.(1) (2)

  Health Care Providers & Services     9.50   L + 8.50%; 1.00% Floor     09/25/2023     $ 5,333     $ 5,261     $ 4,906  

Chase Industries, Inc. (dba Senneca Holdings)(1) (2) (7)

  Building Products     11.00% PIK     05/11/2026       12,150       11,847       —    

Chase Industries, Inc. (dba Senneca Holdings)(1) (2)

  Building Products     10.00 % PIK    10.00% PIK     11/11/2025       12,150       10,750       9,933  

ERC Finance, LLC (dba Eating Recovery Center)(1) (2)

  Health Care Providers & Services     9.22   L + 8.22%; 1.00% Floor     09/22/2025       25,400       24,994       24,511  

Genesis Acquisition Co. (dba ProCare Software)(1) (2)

  Diversified Financial Services     7.80   L + 7.50%     07/31/2025       10,000       9,811       9,050  

Genesis Acquisition Co. (dba ProCare Software)(1) (2)

  Diversified Financial Services     7.80   L + 7.50%     07/31/2025       2,500       2,448       2,263  

Hygiena Borrower LLC(1)

  Life Sciences Tools & Services     8.75   L + 7.75%; 1.00% Floor     08/26/2023       2,650       2,617       2,557  

Hygiena Borrower LLC(1)

  Life Sciences Tools & Services     8.75   L + 7.75%; 1.00% Floor     08/26/2023       139       137       134  

ICP Industrial, Inc.(1) (2)

  Chemicals     9.25   L + 8.25%; 1.00% Floor     05/03/2024       28,900       28,447       27,888  

Intelligent Medical Objects, Inc.(1) (2)

  Health Care Technology     9.50   L + 8.50%; 1.00% Floor     12/22/2024       21,900       21,514       21,298  

Market Track, LLC(1) (2)

  Media     8.75   L + 7.75%; 1.00% Floor     06/05/2025       20,000       19,595       19,100  

National Spine and Pain Centers,
LLC(1) (2)

  Health Care Providers & Services     9.25   L + 8.25%; 1.00% Floor     12/02/2024       17,400       17,063       16,660  

Odyssey Logistics & Technology Corporation(2)

  Road & Rail     9.00   L + 8.00%; 1.00% Floor     10/12/2025       26,626       26,191       22,100  

SMB Shipping Logistics, LLC (dba Worldwide Express)(1) (2)

  Air Freight & Logistics     9.00   L + 8.00%; 1.00% Floor     02/03/2025       25,000       24,704       23,437  

Spectrum Plastics Group, Inc.(2)

  Containers & Packaging     8.00   L + 7.00%; 1.00% Floor     01/31/2026       6,278       6,255       5,160  

USRP Holdings, Inc. (dba U.S. Retirement Partners)(1) (2)

  Insurance     9.75   L + 8.75%; 1.00% Floor     09/29/2025       9,700       9,609       9,166  

USRP Holdings, Inc. (dba U.S. Retirement Partners)(1) (2)

  Insurance     9.75   L + 8.75%; 1.00% Floor     09/29/2025       1,584       1,570       1,497  

Xcellence, Inc. (dba Xact Data
Discovery)(1) (2)

  IT Services     9.75   L + 8.75%; 1.00% Floor     06/22/2024       26,100       25,641       24,860  

YI, LLC (dba Young Innovations)(1) (2)

  Health Care Equipment & Supplies     8.75   L + 7.75%; 1.00% Floor     11/07/2025       21,608       21,140       19,448  

Zep Inc.(2)

  Chemicals     9.25   L + 8.25%; 1.00% Floor     08/11/2025       30,500       29,963       23,828  
           

 

 

   

 

 

 

Total 2nd Lien/Senior Secured Debt

            299,557       267,796  

 

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

 

10


Goldman Sachs Middle Market Lending Corp.

Consolidated Schedule of Investments as of September 30, 2020

(in thousands, except share and per share amounts)

(Unaudited)

 

Investment *

  

Industry

  

Interest Rate

   Par
Amount/
Shares
(++)
     Cost      Fair
Value
 

Preferred Stock - 1.52%

              

Accuity Delivery Systems, LLC^ (1) (2) (8) (9)

   Health Care Providers & Services         136,589      $ 4,500      $ 8,878  

Exostar LLC - Class A(2) (9) (8)

  

Aerospace & Defense

        10        10        10  

Foundation Software(2) (9) (8)

  

Construction & Engineering

        11        11        11  

Wine.com, LLC(1) (2) (8) (9)

  

Beverages

        314,154        2,700        6,657  
           

 

 

    

 

 

 

Total Preferred Stock

              7,221        15,556  

Common Stock - 1.40%

              

Collaborative Imaging Holdco, LLC (dba Texas Radiology Associates) - Class B^^^ (1) (2) (9)

   Health Care Providers & Services         11,719      $ 1,580      $ 1,868  

Collaborative Imaging Holdco, LLC (dba Texas Radiology Associates) - Performance
Units^^^ (1) (2) (4) (8) (9)

   Health Care Providers & Services         11,060        220        374  

Country Fresh Holding Company Inc.(1) (2) (8) (9)

  

Food Products

        843        1,053        52  

Elah Holdings, Inc.^ (1) (2) (8) (9)

  

Capital Markets

        65,436        3,163        3,162  

Exostar LLC - Class B(2) (9) (8)

  

Aerospace & Defense

        15,704        —          —    

Foundation Software - Class B(2) (9) (8)

  

Construction & Engineering

        5,913        —          —    

National Spine and Pain Centers, LLC(1) (2) (8) (9)

   Health Care Providers & Services         500        500        298  

Wrike, Inc.(1) (2) (8) (9)

  

Professional Services

        4,949,520        3,075        8,018  

Yasso, Inc.(1) (2) (8) (9)

  

Food Products

        790        790        545  
           

 

 

    

 

 

 

Total Common Stock

              10,381        14,317  

Warrants - 0.00%

              

KDOR Holdings Inc. (dba Senneca
Holdings)(1) (2) (9)

  

Building Products

        1,000      $ 1,036      $ —    

KDOR Holdings Inc. (dba Senneca
Holdings)(1) (2) (9)

  

Building Products

        —          108        —    

KDOR Holdings Inc. (dba Senneca
Holdings)(1) (2) (9)

  

Building Products

        —          22        —    
           

 

 

    

 

 

 

Total Warrants

              1,166        —    

Investments in Affiliated Money Market Fund - 15.72%

           

Goldman Sachs Financial Square Government Fund - Institutional Shares^^^ (10)

        160,797,948      $ 160,798      $ 160,798  
        

 

 

    

 

 

 

Total Investments in Affiliated Money Market Fund

              160,798        160,798  
           

 

 

    

 

 

 

TOTAL INVESTMENTS - 180.76%

            $ 1,900,370      $ 1,849,340  
           

 

 

    

 

 

 

LIABILITIES IN EXCESS OF OTHER ASSETS - (80.76%)

            $ (826,240
              

 

 

 

NET ASSETS - 100.00%

               $ 1,023,100  
              

 

 

 

 

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

 

11


Goldman Sachs Middle Market Lending Corp.

Consolidated Schedule of Investments as of September 30, 2020

(in thousands, except share and per share amounts)

(Unaudited)

 

*

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

#

Percentages are based on net assets.

(+)

Represents the actual interest rate for partially or fully funded debt in effect as of the reporting date. Variable rate loans bear interest at a rate that may be determined by the larger of the floor or the reference to either LIBOR (“L”) or alternate base rate (commonly based on the Prime Rate (“P”)), at the borrower’s option, which reset periodically based on the terms of the credit agreement. L loans are typically indexed to 12 month, 6 month, 3 month, 2 month, 1 month or 1 week L rates. As of September 30, 2020, rates for the 12 month, 6 month, 3 month, 2 month, 1 month and 1 week L are 0.36%, 0.26%, 0.23%, 0.19%, 0.15% and 0.10%, respectively. As of September 30, 2020, P was 3.25%. For investments with multiple reference rates or alternate base rates, the interest rate shown is the weighted average interest rate in effect at September 30, 2020.

(++)

The total par amount is presented for debt investments, while the number of shares or units owned is presented for equity investments. Par amount is denominated in U.S. Dollars (“$”) unless otherwise noted, Euro (“€”).

^

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

^^^

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

(1)

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

(2)

Represent co-investments made with certain funds managed by the Investment Adviser in accordance with the terms of the exemptive relief that the Company received from the U.S. Securities and Exchange Commission. See Note 3 “Significant Agreements and Related Party Transactions”.

(3)

Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion. The unfunded loan commitment may be subject to a commitment termination date that may expire prior to the maturity date stated. The negative cost, if applicable, is the result of the capitalized discount being greater than the principal amount outstanding on the loan. The negative fair value, if applicable, is the result of the capitalized discount on the loan. See Note 8 “Commitments and Contingencies”.

(4)

The investment is not a qualifying asset under Section 55(a) of the Investment Company Act of 1940. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of September 30, 2020 the aggregate fair value of these securities is $76,314 or 4.06% of the Company’s total assets.

(5)

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

(6)

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

(7)

The investment is on non-accrual status as of September 30, 2020.

(8)

Non-income producing security.

(9)

Securities exempt from registration under the Securities Act of 1933 (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act. As of September 30, 2020, the aggregate fair value of these securities is $29,873 or 2.92% of the Company’s net assets. The acquisition dates of the restricted securities are as follows:

 

Investment

   Acquisition Date  

Accuity Delivery Systems, LLC - Preferred Stock

     06/13/2018  

Collaborative Imaging Holdco, LLC (dba Texas Radiology Associates) - Class B - Common Stock

     03/30/2018  

Collaborative Imaging Holdco, LLC (dba Texas Radiology Associates) - Performance Units - Common Stock

     03/30/2018  

Country Fresh Holding Company Inc. - Common Stock

     04/29/2019  

Elah Holdings, Inc. - Common Stock

     05/09/2018  

Exostar LLC - Class A - Common Stock

     07/06/2020  

Exostar LLC - Class B - Common Stock

     07/06/2020  

Foundation Software - Common Stock

     08/31/2020  

Foundation Software - Class B - Common Stock

     08/31/2020  

KDOR Holdings Inc. (dba Senneca Holdings) - Warrants

     05/29/2020  

KDOR Holdings Inc. (dba Senneca Holdings) - Warrants

     05/29/2020  

KDOR Holdings Inc. (dba Senneca Holdings) - Warrants

     06/22/2020  

National Spine and Pain Centers, LLC - Common Stock

     06/02/2017  

Wine.com, LLC - Preferred Stock

     11/14/2018  

Wrike, Inc. - Common Stock

     12/31/2018  

Yasso, Inc. - Common Stock

     03/23/2017  

 

(10)

The annualized seven-day yield as of September 30, 2020 is 0.00%.

 

PIK

Payment-In-Kind

ADDITIONAL INFORMATION

Foreign currency forward contracts

 

Counterparty

   Currency Purchased      Currency Sold      Settlement      Unrealized Appreciation
(Depreciation)
 

Bank of America, N.A.

     USD 729        EUR 650        10/05/2020      $ (34

Bank of America, N.A.

     USD 716        EUR 635        01/05/2021        (31

Bank of America, N.A.

     USD 702        EUR 620        04/06/2021        (28

Bank of America, N.A.

     USD 701        EUR 617        07/06/2021        (27

Bank of America, N.A.

     USD 400        EUR 350        10/05/2021        (14
           

 

 

 
            $ (134
           

 

 

 

 

Currency Abbreviations:
EUR - Euro
USD - U.S. Dollar

 

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

 

12


Goldman Sachs Middle Market Lending Corp.

Consolidated Schedule of Investments as of December 31, 2019

(in thousands, except share and per share amounts)

 

Investment*

 

Industry

  Interest
Rate (+)
   

Reference Rate and
Spread (+)

  Maturity     Par
Amount/
Shares (++)
    Cost     Fair
Value
 

1st Lien/Senior Secured Debt  - 134.05%#

 

         

3SI Security Systems, Inc.(1)

  Commercial Services & Supplies     7.65   L + 5.75%; 1.00% Floor     06/16/2023     $ 2,249     $ 2,227     $ 2,227  

Accuity Delivery Systems, LLC^ (1) (2)

  Health Care Providers & Services     8.75   L + 7.00%; 1.00% Floor     06/13/2023       14,480       14,159       14,371  

Acquia, Inc.(2)

  Software     8.91   L + 7.00%; 1.00% Floor     10/31/2025       18,197       17,841       17,833  

Acquia, Inc.(2) (3)

  Software     L + 7.00%; 1.00% Floor     10/31/2025       1,946       (38     (39

Apptio, Inc.(1) (2)

  IT Services     8.96   L + 7.25%; 1.00% Floor     01/10/2025       46,452       45,634       45,639  

Apptio, Inc.(1) (2) (3)

  IT Services     L + 7.25%; 1.00% Floor     01/10/2025       3,160       (53     (55

Associations, Inc.(1) (2)

  Real Estate Management & Development     9.09   L + 7.00% (incl. 3.00% PIK); 1.00% Floor     07/30/2024       19,300       19,110       19,107  

Associations, Inc.(1) (2) (3)

  Real Estate Management & 
Development
    9.09   L + 7.00% (incl. 3.00% PIK); 1.00% Floor     07/30/2024       4,247       2,907       2,905  

Associations, Inc.(1) (2) (3)

  Real Estate Management & Development     L + 4.00%; 1.00% Floor     07/30/2024       836       (8     (8

BJH Holdings III Corp. (dba Jack’s Family Restaurants)(1) (2)

  Hotels, Restaurants & Leisure     7.55   L + 5.75%; 1.00% Floor     08/19/2025       9,097       9,010       9,006  

Brillio, LLC(1) (2)

  IT Services     6.55   L + 4.75%; 1.00% Floor     02/06/2025       6,567       6,509       6,501  

Brillio, LLC(1) (2) (3)

  IT Services     L + 4.75%; 1.00% Floor     02/06/2025       2,200       —         (22

Bullhorn, Inc.(1) (2)

  Professional Services     7.44   L + 5.50%; 1.00% Floor     10/01/2025       16,109       15,876       15,868  

Bullhorn, Inc.(1) (2) (3)

  Professional Services     7.46   L + 5.50%; 1.00% Floor     10/01/2025       1,331       247       246  

Bullhorn, Inc.(1) (2) (3)

  Professional Services     L + 5.50%; 1.00% Floor     10/01/2025       799       (11     (12

Businessolver.com, Inc.(1) (2)

  Health Care Technology     9.41   L + 7.50%; 1.00% Floor     05/15/2023       30,076       29,640       29,550  

Businessolver.com, Inc.(1) (2)

  Health Care Technology     9.41   L + 7.50%; 1.00% Floor     05/15/2023       4,511       4,441       4,432  

Businessolver.com, Inc.(1) (2) (3)

  Health Care Technology     9.98   L + 7.50%; 1.00% Floor     05/15/2023       3,760       1,452       1,438  

CFS Management, LLC (dba Center for Sight Management)(1) (2)

  Health Care Providers & Services     7.95   L + 5.75%; 1.00% Floor     07/01/2024       6,992       6,927       6,923  

CFS Management, LLC (dba
Center for Sight
Management)(1) (2) (3)

  Health Care Providers & Services     L + 5.75%; 1.00% Floor     07/01/2024       2,067       (19     (21

Chronicle Bidco Inc. (dba Lexitas)(2)

  Professional Services     7.66   L + 5.75%; 1.00% Floor     11/14/2025       10,300       10,098       10,094  

Chronicle Bidco Inc. (dba
Lexitas)(2) (3)

  Professional Services     L + 5.75%; 1.00% Floor     11/14/2025       1,300       (25     (26

Chronicle Bidco Inc. (dba
Lexitas)(2) (3)

  Professional Services     L + 5.75%; 1.00% Floor     11/14/2025       4,330       (42     (43

Clarkson Eyecare, LLC (dba EyeCare Partners)(2)

  Health Care Providers & Services     8.05   L + 6.25%; 1.00% Floor     04/02/2021       10,953       10,776       10,733  

Clarkson Eyecare, LLC (dba EyeCare Partners)(2)

  Health Care Providers & Services     8.05   L + 6.25%; 1.00% Floor     04/02/2021       7,241       7,123       7,097  

Collaborative Imaging, LLC (dba Texas Radiology Associates)^^^ (1) (2)

  Health Care Providers & Services     8.30   L + 6.50%; 1.00% Floor     03/28/2025       12,700       12,547       12,478  

Collaborative Imaging, LLC (dba Texas Radiology Associates)^^^ (1) (2)

  Health Care Providers & Services     8.30   L + 6.50%     03/28/2025       9,673       9,533       9,504  

ConnectWise, LLC(2)

  IT Services     7.94   L + 6.00%; 1.00% Floor     02/28/2025       19,957       19,564       19,707  

ConnectWise, LLC(2) (3)

  IT Services     L + 6.00%; 1.00% Floor     02/28/2025       1,524       (30     (19

Convene 237 Park Avenue, LLC (dba Convene)(1) (2)

  Real Estate Management & Development     9.54   L + 7.50%; 1.50% Floor     08/30/2024       31,000       30,414       30,380  

Convene 237 Park Avenue, LLC (dba Convene)(1) (2) (3)

  Real Estate Management & Development     L + 7.50%; 1.50% Floor     08/30/2024       9,120       (85     (182

CorePower Yoga LLC(2)

  Diversified Consumer Services     6.44   L + 4.50%     05/14/2025       12,389       12,219       12,203  

CorePower Yoga LLC(2) (3)

  Diversified Consumer Services     L + 4.75%     05/14/2025       1,010       (14     (15

CorePower Yoga LLC(2) (3)

  Diversified Consumer Services     L + 4.50%     05/14/2025       2,692       (36     (40

CST Buyer Company (dba Intoxalock)(2)

  Diversified Consumer Services     7.55   L + 5.75%; 1.00% Floor     10/03/2025       18,215       17,989       18,215  

CST Buyer Company (dba Intoxalock)(2) (3)

  Diversified Consumer Services     L + 5.75%; 1.00% Floor     10/03/2025       1,294       (16     —    

DDS USA Holding, Inc.(1) (2)

  Health Care Equipment & Supplies     7.22   L + 5.25%; 1.00% Floor     06/30/2022       5,405       5,386       5,378  

DDS USA Holding, Inc.(1) (2)

  Health Care Equipment & Supplies     7.22   L + 5.25%; 1.00% Floor     06/30/2022       5,112       5,093       5,086  

DDS USA Holding, Inc.(1) (2) (3)

  Health Care Equipment & Supplies     9.00   P + 4.25%; 1.00% Floor     06/30/2022       1,533       148       146  

Diligent Corporation(1) (2)

  Professional Services     7.42   L + 5.50%; 1.00% Floor     04/14/2022     22,822       26,188       25,344  

Diligent Corporation(1) (2)

  Professional Services     7.58   L + 5.50%; 1.00% Floor     04/14/2022       5,460       5,413       5,406  

Diligent Corporation(1) (2)

  Professional Services     7.42   L + 5.50%; 1.00% Floor     04/14/2022       2,103       2,084       2,082  

Diligent Corporation(1) (2) (3)

  Professional Services     7.48   L + 5.50%; 1.00% Floor     04/14/2022       1,800       1,555       1,566  

 

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

13


Goldman Sachs Middle Market Lending Corp.

Consolidated Schedule of Investments as of December 31, 2019 (continued)

(in thousands, except share and per share amounts)

 

Investment *

 

Industry

  Interest
Rate (+)
   

Reference Rate and
Spread (+)

  Maturity     Par
Amount/
Shares (++)
    Cost     Fair
Value
 

Diligent Corporation(1) (2)

  Professional Services     7.56   L + 5.50%; 1.00% Floor     04/14/2022     $ 727     $ 719     $ 719  

Diligent Corporation(1) (2)

  Professional Services     7.42   L + 5.50%; 1.00% Floor     04/14/2022       352       348       348  

Diligent Corporation(1) (2) (3)

  Professional Services     L + 5.50%; 1.00% Floor     04/14/2022       6,083       (53     (61

DiscoverOrg, LLC(2)

  Software     6.30   L + 4.50%     02/02/2026       23,522       23,311       23,581  

DocuTAP, Inc.(1) (2)

  Health Care Technology     7.30   L + 5.50%; 1.00% Floor     05/12/2025       35,066       34,265       35,066  

E2open, LLC(1) (2)

  Software     7.66   L + 5.75%; 1.00% Floor     11/26/2024       24,239       24,015       23,997  

Elemica Parent, Inc.(1) (2)

  Chemicals     7.40   L + 5.50%     09/18/2025       4,257       4,155       4,151  

Elemica Parent, Inc.(1) (2) (3)

  Chemicals     7.40   L + 5.50%     09/18/2025       550       171       170  

Elemica Parent, Inc.(1) (2) (3)

  Chemicals     L + 5.50%     09/18/2025       830       (10     (21

Empirix, Inc.(1) (2)

  Diversified Telecommunication Services     8.20   L + 6.25%; 1.00% Floor     09/25/2024       31,492       31,036       28,343  

Empirix, Inc.(1) (2) (3)

  Diversified Telecommunication Services     L + 6.25%; 1.00% Floor     09/25/2023       1,800       (24     (180

Eptam Plastics, Ltd.(2)

  Health Care Equipment & Supplies     7.30   L + 5.50%; 1.00% Floor     12/06/2025       6,363       6,268       6,267  

Eptam Plastics, Ltd.(2) (3)

  Health Care Equipment & Supplies     7.30   L + 5.50%; 1.00% Floor     12/06/2025       1,354       318       318  

Eptam Plastics, Ltd.(2) (3)

  Health Care Equipment & Supplies     L + 5.50%; 1.00% Floor     12/06/2025       2,708       (20     (20

Fenergo Finance 3 Limited(1) (2) (4)

  Diversified Financial Services     8.31   L + 6.25%; 1.00% Floor     09/05/2024     25,300       28,983       28,166  

Fenergo Finance 3 Limited(1) (2) (3) (4)

  Diversified Financial Services     L + 6.25%; 1.00% Floor     09/05/2024       1,683       (23     (13

Fenergo Finance 3 Limited(1) (2) (3) (4)

  Diversified Financial Services     L + 6.25%; 1.00% Floor     09/05/2024     2,200       (35     (19

FWR Holding Corporation (dba First Watch Restaurants) (1)

  Hotels, Restaurants & Leisure     7.29   L + 5.50%; 1.00% Floor     08/21/2023       4,043       4,009       4,002  

FWR Holding Corporation (dba First Watch Restaurants) (1)

  Hotels, Restaurants & Leisure     7.29   L + 5.50%; 1.00% Floor     08/21/2023       3,024       2,999       2,994  

FWR Holding Corporation (dba First Watch Restaurants) (1) (3)

  Hotels, Restaurants & Leisure     L + 5.50%; 1.00% Floor     08/21/2023       3,040       (25     (30

FWR Holding Corporation (dba First Watch Restaurants)(1)

  Hotels, Restaurants & Leisure     7.29   L + 5.50%; 1.00% Floor     08/21/2023       11,408       11,219       11,294  

FWR Holding Corporation (dba First Watch Restaurants)(1)

  Hotels, Restaurants & Leisure     7.29   L + 5.50%; 1.00% Floor     08/21/2023       2,279       2,243       2,256  

FWR Holding Corporation (dba First Watch Restaurants)(1)

  Hotels, Restaurants & Leisure     7.29   L + 5.50%; 1.00% Floor     08/21/2023       1,441       1,418       1,427  

FWR Holding Corporation (dba First Watch Restaurants)(1) (3)

  Hotels, Restaurants & Leisure     7.29   L + 5.50%; 1.00% Floor     08/21/2023       1,506       1,256       1,265  

Gastro Health Holdco, LLC(1) (2)

  Health Care Providers & Services     7.45   L + 5.50%; 1.00% Floor     09/04/2024       17,963       17,668       17,693  

Gastro Health Holdco, LLC(1) (2)

  Health Care Providers & Services     7.43   L + 5.50%; 1.00% Floor     09/04/2024       7,171       7,050       7,063  

Gastro Health Holdco, LLC(1) (2) (3)

  Health Care Providers & Services     7.40   L + 5.50%; 1.00% Floor     09/04/2024       6,933       5,769       5,757  

Gastro Health Holdco, LLC(1) (2) (3)

  Health Care Providers & Services     L + 5.50%; 1.00% Floor     09/04/2023       2,900       (43     (44

Gastro Health Holdco, LLC(1) (2) (3)

  Health Care Providers & Services     L + 5.50%; 1.00% Floor     09/04/2024       7,200       (59     (108

GlobalTranz Enterprises, Inc.(2)

  Road & Rail     6.79   L + 5.00%     05/15/2026       11,444       11,230       10,414  

GlobalTranz Enterprises, Inc.(2) (3)

  Road & Rail     L + 5.00%     05/15/2026       2,968       —         (267

Granicus, Inc.(2)

  Software     6.69   L + 4.75%; 1.00% Floor     09/07/2022       14,565       14,446       14,419  

HS4 AcquisitionCo, Inc. (dba HotSchedules & Fourth)(1) (2)

  Hotels, Restaurants & Leisure     8.71   L + 6.75%; 1.00% Floor     07/09/2025       34,501       33,854       33,811  

HS4 AcquisitionCo, Inc. (dba HotSchedules & Fourth)(1) (2) (3)

  Hotels, Restaurants & Leisure     8.54   L + 6.75%; 1.00% Floor     07/09/2025       2,805       369       365  

Hygiena Borrower LLC

  Life Sciences Tools & Services     5.94   L + 4.00%; 1.00% Floor     08/26/2022       5,314       5,261       5,208  

Hygiena Borrower LLC(3)

  Life Sciences Tools & Services     L + 4.00%; 1.00% Floor     08/26/2022       550       (5     (11

Hygiena Borrower LLC(3)

  Life Sciences Tools & Services     L + 4.00%; 1.00% Floor     08/26/2022       814       (4     (16

iCIMS, Inc.(1) (2)

  Software     8.29   L + 6.50%; 1.00% Floor     09/12/2024       42,594       41,893       41,849  

iCIMS, Inc.(1) (2)

  Software     8.29   L + 6.50%; 1.00% Floor     09/12/2024       7,844       7,701       7,707  

 

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

14


Goldman Sachs Middle Market Lending Corp.

Consolidated Schedule of Investments as of December 31, 2019 (continued)

(in thousands, except share and per share amounts)

 

Investment *

 

Industry

  Interest
Rate (+)
   

Reference Rate and
Spread (+)

  Maturity     Par
Amount/
Shares (++)
    Cost     Fair
Value
 

iCIMS, Inc.(1) (2) (3)

  Software     L + 6.50%; 1.00% Floor     09/12/2024     $ 2,662     $ (42   $ (47

Integral Ad Science, Inc.(1) (2)

  Interactive Media & Services     9.05   L + 7.25% (incl. 1.25% PIK); 1.00% Floor     07/19/2024       36,554       35,970       36,005  

Integral Ad Science, Inc.(1) (2) (3)

  Interactive Media & Services     L + 6.00%; 1.00% Floor     07/19/2023       2,586       (37     (39

Internet Truckstop Group, LLC (dba Truckstop)(1) (2)

  Transportation Infrastructure     6.95   L + 5.00%; 1.00% Floor     04/02/2025       32,377       31,651       31,892  

Internet Truckstop Group, LLC (dba
Truckstop)(1) (2) (3)

  Transportation Infrastructure     L + 5.00%; 1.00% Floor     04/02/2025       2,600       (57     (39

Lithium Technologies, Inc.(1) (2)

  Interactive Media & Services     10.04   L + 8.00%; 1.00% Floor     10/03/2022       50,047       49,285       49,296  

Lithium Technologies, Inc.(1) (2) (3)

  Interactive Media & Services     L + 8.00%; 1.00% Floor     10/03/2022       3,448       (48     (52

Mailgun Technologies, Inc.(1) (2)

  Interactive Media & Services     6.95   L + 5.00%; 1.00% Floor     03/26/2025       23,170       22,749       22,765  

Mailgun Technologies, Inc.(1) (2) (3)

  Interactive Media & Services     L + 5.00%; 1.00% Floor     03/26/2025       1,448       —         (25

Midwest Transport, Inc.(1) (2)

  Road & Rail     9.06   L + 7.00%; 1.00% Floor     10/02/2023       16,969       16,835       16,799  

MMIT Holdings, LLC (dba Managed Markets Insight & Technology)(1) (2)

  Health Care Technology     7.43   L + 5.50%; 1.00% Floor     11/15/2024       29,732       29,211       29,212  

MMIT Holdings, LLC (dba Managed Markets Insight & Technology)(1) (2) (3)

  Health Care Technology     7.44   L + 5.50%; 1.00% Floor     11/15/2024       4,525       1,193       1,188  

Netvoyage Corporation (dba
NetDocuments) (1) (2)

  Software     9.55   L + 7.75%; 1.00% Floor     03/22/2024       5,985       5,869       5,910  

Netvoyage Corporation (dba
NetDocuments)(1) (2)

  Software     9.55   L + 7.75%; 1.00% Floor     03/22/2024       7,937       7,831       7,838  

Netvoyage Corporation (dba
NetDocuments)(1) (2) (3)

  Software     L + 7.75%; 1.00% Floor     03/24/2022       610       (5     (8

Pathway Vet Alliance LLC(1) (2)

  Health Care Providers & Services     6.30   L + 4.50%     12/20/2024       6,956       6,896       6,886  

Pathway Vet Alliance LLC(1) (2)

  Health Care Providers & Services     6.30   L + 4.50%     12/20/2024       2,459       2,436       2,434  

Picture Head Midco LLC(1) (2)

  Entertainment     8.55   L + 6.75%; 1.00% Floor     08/31/2023       27,467       27,014       27,055  

PlanSource Holdings, Inc.(1) (2)

  Health Care Technology     8.15   L + 6.25%; 1.00% Floor     04/22/2025       33,940       33,324       33,261  

PlanSource Holdings, Inc.(1) (2) (3)

  Health Care Technology     L + 6.25%; 1.00% Floor     04/22/2025       4,681       (83     (94

Power Stop, LLC(2)

  Auto Components     6.44   L + 4.50%     10/19/2025       10,791       10,768       10,683  

Premier Imaging, LLC (dba Lucid Health)(2)

  Health Care Providers & Services     7.49   L + 5.75%; 1.00% Floor     01/02/2025       17,257       17,001       16,998  

PT Intermediate Holdings III, LLC (dba Parts Town)(2)

  Trading Companies & Distributors     7.44   L + 5.50%; 1.00% Floor     10/15/2025       17,320       17,235       17,233  

Riverpoint Medical, LLC(1) (2)

  Health Care Equipment & Supplies     6.97   L + 5.00%; 1.00% Floor     06/21/2025       13,406       13,343       13,272  

Riverpoint Medical, LLC(1) (2) (3)

  Health Care Equipment & Supplies     L + 5.00%; 1.00% Floor     06/21/2025       2,450       (11     (25

Selectquote, Inc.(2)

  Insurance     7.70   L + 6.00%; 1.00% Floor     11/05/2024       15,800       15,492       15,484  

SF Home Décor, LLC (dba SureFit Home
Décor)(1) (2)

  Household Products     11.70   L + 9.75%; 1.00% Floor     07/13/2022       23,963       23,436       23,064  

Shopatron, LLC (dba Kibo)(1) (2)

  Internet & Direct Marketing Retail     9.95   L + 8.00%; 1.00% Floor     12/18/2020       8,947       8,795       8,812  

Shopatron, LLC (dba Kibo)(1) (2) (8)

  Internet & Direct Marketing Retail     9.95   L + 8.00%; 1.00% Floor     12/18/2020       2,757       2,729       2,716  

SPay, Inc. (dba Stack Sports)(1) (2)

  Interactive Media & Services     7.55   L + 5.75%; 1.00% Floor     06/17/2024       14,745       14,515       14,266  

SPay, Inc. (dba Stack Sports)(1) (2) (3)

  Interactive Media & Services     7.52   L + 5.75%; 1.00% Floor     06/17/2024       1,630       1,062       1,034  

SPay, Inc. (dba Stack Sports)(1) (2)

  Interactive Media & Services     7.76   L + 5.75%; 1.00% Floor     06/17/2024       543       539       526  

The Center for Orthopedic and Research Excellence, Inc. (dba HOPCo)(1) (2)

  Health Care Providers & Services     7.31   L + 5.25%; 1.00% Floor     08/15/2025       19,578       19,300       19,236  

The Center for Orthopedic and Research Excellence, Inc. (dba HOPCo)(1) (2) (3)

  Health Care Providers & Services     7.31   L + 5.25%; 1.00% Floor     08/15/2025       2,707       97       88  

The Center for Orthopedic and Research Excellence, Inc. (dba HOPCo)(1) (2) (3)

  Health Care Providers & Services     L + 5.25%; 1.00% Floor     08/15/2025       6,768       (54     (118

Viant Medical Holdings, Inc.(2)

  Health Care Equipment & Supplies     8.16   L + 6.25%; 1.00% Floor     07/02/2025       19,117       18,798       18,926  

VRC Companies, LLC (dba Vital Records Control)(1)

  Commercial Services & Supplies     8.30   L + 6.50%; 1.00% Floor     03/31/2023       10,000       9,925       9,925  

VRC Companies, LLC (dba Vital Records Control)(1) (3)

  Commercial Services & Supplies     8.60   L + 6.50%; 1.00% Floor     03/31/2022       249       136       136  

WebPT, Inc.(1) (2)

  Health Care Technology     8.66   L + 6.75%; 1.00% Floor     08/28/2024       14,933       14,651       14,635  

WebPT, Inc.(1) (2) (3)

  Health Care Technology     L + 6.75%; 1.00% Floor     08/28/2024       1,556       (29     (31

WebPT, Inc.(1) (2) (3)

  Health Care Technology     L + 6.75%; 1.00% Floor     08/28/2024       1,867       (17     (37

 

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

15


Goldman Sachs Middle Market Lending Corp.

Consolidated Schedule of Investments as of December 31, 2019 (continued)

(in thousands, except share and per share amounts)

 

Investment *

 

Industry

  Interest
Rate (+)
   

Reference Rate and
Spread (+)

  Maturity     Par
Amount/
Shares (++)
    Cost     Fair
Value
 

Wine.com, LLC(1) (2)

  Beverages     8.93   L + 7.00%; 1.00% Floor     11/14/2024     $ 9,000     $ 8,847     $ 8,820  

Wolfpack IP Co. (dba Lone Wolf Technologies)(1) (2) (4)

  Real Estate Management & Development     8.29   L + 6.50%; 1.00% Floor     06/13/2025       47,220       46,344       46,275  

Wolfpack IP Co. (dba Lone Wolf Technologies)(1) (2) (3) (4)

  Real Estate Management & Development     L + 6.50%; 1.00% Floor     06/13/2025       4,722       (86     (94

WorkForce Software, LLC(1) (2)

  Software     8.41   L + 6.50%; 1.00% Floor     07/31/2025       12,732       12,491       12,477  

WorkForce Software, LLC(1) (2) (3)

  Software     L + 6.50%; 1.00% Floor     07/31/2025       1,123       (21     (23

Wrike, Inc.(1) (2)

  Professional Services     8.55   L + 6.75%; 1.00% Floor     12/31/2024       32,260       31,670       31,615  

Wrike, Inc.(1) (2) (3)

  Professional Services     L + 6.75%; 1.00% Floor     12/31/2024       2,300       (38     (46

Xactly Corporation(1) (2)

  IT Services     9.05   L + 7.25%; 1.00% Floor     07/29/2022       34,852       34,415       34,416  

Xactly
Corporation(1) (2) (3)

  IT Services     L + 7.25%; 1.00% Floor     07/29/2022       2,177       (23     (27

Yasso, Inc.(1) (2)

  Food Products     9.55   L + 7.75%; 1.00% Floor     03/23/2022       7,411       7,336       7,170  
           

 

 

   

 

 

 

Total 1st Lien/Senior Secured Debt

 

      1,272,044       1,266,486  

1st Lien/Last-Out Unitranche (5) – 10.67%

 

Doxim, Inc.(1) (2)

  Diversified Financial Services     7.94   L + 6.00%; 1.00% Floor     02/28/2024       27,300       26,636       26,618  

Doxim, Inc.(1) (2)

  Diversified Financial Services     7.90   L + 6.00%; 1.00% Floor     02/28/2024       22,376       21,846       21,816  

RugsUSA, LLC(1) (2)

  Household Products     8.45   L + 6.50%; 1.00% Floor     04/30/2023       8,330       8,271       8,268  

Smarsh, Inc.(1) (2)

  Interactive Media & Services     9.68   L + 7.88%; 1.00% Floor     03/31/2021       44,429       44,076       44,095  
           

 

 

   

 

 

 

Total 1st Lien/Last-Out Unitranche

 

      100,829       100,797  

2nd Lien/Senior Secured Debt - 31.14%

 

American Dental Partners, Inc.(1) (2)

  Health Care Providers & Services     10.44   L + 8.50%; 1.00% Floor     09/25/2023       5,333       5,246       5,239  

Chase Industries, Inc. (dba Senneca Holdings)(1) (2)

  Building Products     11.55   L + 9.50% (incl. 1.50% PIK); 1.00% Floor     05/11/2026       24,300       23,676       22,781  

DiscoverOrg, LLC(2)

  Software     10.19   L + 8.50%     02/01/2027       14,600       14,397       14,600  

ERC Finance, LLC (dba Eating Recovery Center)(1) (2)

  Health Care Providers & Services     10.02   L + 8.22%; 1.00% Floor     09/22/2025       25,400       24,948       24,955  

Genesis Acquisition Co. (dba ProCare Software)(1) (2)

  Diversified Financial Services     9.60   L + 7.50%     07/31/2025       10,000       9,788       9,750  

Genesis Acquisition Co. (dba ProCare Software)(1) (2) (3)

  Diversified Financial Services     L + 7.50%     07/31/2025       2,500       (25     (63

Hygiena Borrower LLC(1)

  Life Sciences Tools & Services     9.69   L + 7.75%; 1.00% Floor     08/26/2023       2,650       2,610       2,604  

Hygiena Borrower
LLC(1) (3)

  Life Sciences Tools & Services     9.69   L + 7.75%; 1.00% Floor     08/26/2023       970       131       122  

ICP Industrial, Inc.(1) (2)

  Chemicals     10.04   L + 8.25%; 1.00% Floor     05/03/2024       28,900       28,369       28,322  

Intelligent Medical Objects, Inc.(1) (2)

  Health Care Technology     10.81   L + 8.50%; 1.00% Floor     12/22/2024       21,900       21,461       21,462  

Market Track, LLC(1) (2)

  Media     9.68   L + 7.75%; 1.00% Floor     06/05/2025       20,000       19,545       19,250  

National Spine and Pain Centers,
LLC(1) (2)

  Health Care Providers & Services     10.05   L + 8.25%; 1.00% Floor     12/02/2024       17,400       17,015       16,748  

Odyssey Logistics & Technology Corporation(2)

  Road & Rail     9.80   L + 8.00%; 1.00% Floor     10/12/2025       26,626       26,141       25,694  

SMB Shipping Logistics, LLC (dba Worldwide Express)(1) (2)

  Air Freight & Logistics     9.90   L + 8.00%; 1.00% Floor     02/03/2025       25,000       24,664       24,563  

Spectrum Plastics Group, Inc.(2)

  Containers & Packaging     8.80   L + 7.00%; 1.00% Floor     01/31/2026       6,278       6,252       4,949  

USRP Holdings, Inc. (dba U.S. Retirement Partners)(1) (2)

  Insurance     10.68   L + 8.75%; 1.00% Floor     09/29/2025       9,700       9,599       9,603  

USRP Holdings, Inc. (dba U.S. Retirement Partners)(1) (2) (3)

  Insurance     10.72   L + 8.75%; 1.00% Floor     09/29/2025       2,400       1,560       1,560  

Xcellence, Inc. (dba Xact Data Discovery)(1) (2)

  IT Services     10.70   L + 8.75%; 1.00% Floor     06/22/2024       26,100       25,568       25,708  

YI, LLC (dba Young
Innovations)(1) (2)

  Health Care Equipment & Supplies     9.69   L + 7.75%; 1.00% Floor     11/07/2025       21,608       21,088       21,068  

Zep Inc.(2)

  Chemicals     10.19   L + 8.25%; 1.00% Floor     08/11/2025       30,500       29,900       15,250  
           

 

 

   

 

 

 

Total 2nd Lien/Senior Secured Debt

 

      311,933       294,165  

 

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

16


Goldman Sachs Middle Market Lending Corp.

Consolidated Schedule of Investments as of December 31, 2019 (continued)

(in thousands, except share and per share amounts)

 

Investment *

 

Industry

  Interest
Rate
                                    Par
Amount/

Shares (++)
    Cost     Fair
Value
 

Preferred Stock* – 1.07%

             

Accuity Delivery Systems, LLC^ (1) (2) (6) (7)

  Health Care Providers & Services         $ 136,589     $ 4,500     $ 7,200  

Wine.com, LLC(1) (2) (6) (7)

  Beverages           314,154       2,700       2,937  
           

 

 

   

 

 

 

Total Preferred Stock

            7,200       10,137  

Common Stock* – 1.22%

             

Collaborative Imaging Holdco, LLC (dba Texas Radiology Associates) – Class B^^^ (1) (2) (7)

  Health Care Providers & Services           11,719       1,580       2,239  

Collaborative Imaging Holdco, LLC (dba Texas
Radiology Associates) – Performance Units^^^ (1) (2) (4) (6) (7)

  Health Care Providers & Services           11,060       220       643  

Country Fresh Holding Company Inc.(1) (2) (6) (7)

  Food Products           843       1,053       731  

Elah Holdings, Inc.^ (1) (2) (6) (7)

  Capital Markets           65,436       3,163       3,163  

National Spine and Pain Centers, LLC(1) (2) (6) (7)

  Health Care Providers & Services           500       500       100  

Wrike, Inc.(1) (2) (6) (7)

  Professional Services           4,949,520       3,075       4,266  

Yasso, Inc.(1) (2) (6) (7)

  Food Products           790       790       433  
           

 

 

   

 

 

 

Total Common Stock

            10,381       11,575  

TOTAL INVESTMENTS – 178.15%

 

  $ 1,702,387     $ 1,683,160  
 

 

 

   

 

 

 

LIABILITIES IN EXCESS OF OTHER ASSETS – (78.15%)

 

  $ (738,371
 

 

 

 

NET ASSETS – 100.00%

 

  $ 944,789  
 

 

 

 

 

* 

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

#

Percentages are based on net assets.

(+)

Represents the actual interest rate for partially or fully funded debt in effect as of the reporting date. Variable rate loans bear interest at a rate that may be determined by reference to either LIBOR (“L”) or alternate base rate (commonly based on the Prime Rate (“P”)), at the borrower’s option, which reset periodically based on the terms of the credit agreement. L loans are typically indexed to 12 month, 6 month, 3 month, 2 month, 1 month or 1 week L rates. As of December 31, 2019, rates for the 12 month, 6 month, 3 month, 2 month, 1 month and 1 week L are 2.00%, 1.91%, 1.91%, 1.83%, 1.76% and 1.63%. As of December 31, 2019, P was 4.75%. For investments with multiple reference rates or alternate base rates, the interest rate shown is the weighted average interest rate in effect at December 31, 2019.

(++)

The total par amount is presented for debt investments, while the number of shares or units owned is presented for equity investments. Par amount is denominated in U.S. Dollars (“$”) unless otherwise noted, Euro (“€”).

^

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

^^^

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

(1)

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

(2)

Represent co-investments made with certain funds managed by the Investment Adviser in accordance with the terms of the exemptive relief that the Company received from the U.S. Securities and Exchange Commission. See Note 3 “Significant Agreements and Related Party Transactions”.

(3)

Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion. The unfunded loan commitment may be subject to a commitment termination date that may expire prior to the maturity date stated. The negative cost, if applicable, is the result of the capitalized discount being greater than the principal amount outstanding on the loan. The negative fair value, if applicable, is the result of the capitalized discount on the loan. See Note 8 “Commitments and Contingencies”.

(4)

The investment is not a qualifying asset under Section 55(a) of the Investment Company Act of 1940. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of December 31, 2019 the aggregate fair value of these securities is $74,958 or 4.39% of the Company’s total assets.

(5)

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

(6)

Non-income producing security.

 

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

17


Goldman Sachs Middle Market Lending Corp.

Consolidated Schedule of Investments as of December 31, 2019 (continued)

(in thousands, except share and per share amounts)

 

(7) 

Securities exempt from registration under the Securities Act of 1933 (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act. As of December 31, 2019, the aggregate fair value of these securities is $21,712 or 2.30% of the Company’s net assets. The acquisition dates of the restricted securities are as follows:

 

Investment

   Acquisition Date  

Accuity Delivery Systems, LLC – Preferred Stock

     06/13/2018  

Collaborative Imaging Holdco, LLC (dba Texas Radiology Associates) – Class B – Common Stock

     03/30/2018  

Collaborative Imaging Holdco, LLC (dba Texas Radiology Associates) – Performance Units – Common Stock

     03/30/2018  

Country Fresh Holding Company Inc. – Common Stock

     04/29/2019  

Elah Holdings, Inc. – Common Stock

     05/09/2018  

National Spine and Pain Centers, LLC – Common Stock

     06/02/2017  

Wine.com, LLC – Preferred Stock

     11/14/2018  

Wrike, Inc. – Common Stock

     12/31/2018  

Yasso, Inc. – Common Stock

     03/23/2017  

 

(8)

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

PIK – Payment-In-Kind

ADDITIONAL INFORMATION

Foreign currency forward contracts

 

Counterparty

   Currency
Purchased
     Currency
Sold
     Settlement      Unrealized Appreciation
(Depreciation)
 

Bank of America, N.A.

     USD 221        EUR 200        01/06/2020      $ (3

Bank of America, N.A.

     USD 540        EUR 446        01/06/2020        39  

Bank of America, N.A.

     USD 337        EUR 303        04/06/2020        (6

Bank of America, N.A.

     USD 547        EUR 448        04/06/2020        41  

Bank of America, N.A.

     USD 321        EUR 288        07/06/2020        (6

Bank of America, N.A.

     USD 549        EUR 446        07/06/2020        43  

Bank of America, N.A.

     USD 729        EUR 650        10/05/2020        (13

Bank of America, N.A.

     USD 716        EUR 635        01/05/2021        (13

Bank of America, N.A.

     USD 702        EUR 620        04/06/2021        (14

Bank of America, N.A.

     USD 701        EUR 617        07/06/2021        (14

Bank of America, N.A.

     USD 400        EUR 350        10/05/2021        (8
           

 

 

 
            $ 46  
           

 

 

 

Currency Abbreviations:

EUR – Euro

USD – U.S. Dollar

 

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

18


1.

ORGANIZATION

Goldman Sachs Middle Market Lending LLC (“MMLC LLC”) was formed on June 13, 2016. Effective January 30, 2017, MMLC LLC converted from a Delaware limited liability company to a Delaware corporation named Goldman Sachs Middle Market Lending Corp. (the “Company”), which, by operation of law, is deemed for purposes of Delaware law the same entity as MMLC LLC. The Company commenced operations on January 11, 2017. On January 30, 2017, the Company’s initial investors (other than the Initial Member (as defined below)) funded the initial portion of their capital commitment to purchase shares of common stock, at which time the Initial Member’s initial capital contribution to MMLC LLC was canceled. The Company has elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “Investment Company Act”). In addition, the Company has elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with its taxable year ended December 31, 2017.

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

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

From December 29, 2016 through September 29, 2017 (the “Final Closing Date”) the Company conducted an offering pursuant to which investors made capital commitments (each, a “Commitment”) to purchase shares of the Company’s common stock pursuant to subscription agreements (“Subscription Agreements”) entered into with the Company pursuant to which each investor agreed to purchase common stock for an aggregate purchase price equal to its Commitment. Each investor is required to purchase shares of the Company’s common stock each time the Company delivers a drawdown notice at least five business days prior to the required funding date (the “Initial Drawdown Date”). The offering and sale of common stock is exempt from registration pursuant to Regulation D and Regulation S promulgated under the U.S. Securities Act of 1933, as amended, for offers and sales of securities that do not involve a public offering and for offers and sale of securities outside of the United States.

GS & Co. and Goldman Sachs International assisted the Company in conducting its private placement offering pursuant to agreements between the Company and each of GS & Co. and Goldman Sachs International.

The investment period commenced on December 29, 2016 (the “Initial Closing Date”). On August 8, 2019, our board of directors (the “Board of Directors”) extended the investment period for one additional six-month period from September 29, 2019 to March 29, 2020 (the “Investment Period”). The Investment Period expired on March 29, 2020. Following the end of the Investment Period, the Company has the right to issue drawdowns only (i) to pay, and/or establish reserves for, actual or anticipated Company expenses, liabilities, including the payment or repayment of indebtedness for borrowed money (including through the issuance of notes and other evidence of indebtedness), other indebtedness, financings or extensions of credit, or other obligations, contingent or otherwise, including the Management Fee (as defined below), whether incurred before or after the end of the investment period, (ii) to fulfill investment commitments made or approved by the investment committee of GSAM’s Private Credit Group (the “Investment Committee”) prior to the expiration of the Investment Period, (iii) to engage in hedging transactions or (iv) to make additional investments in existing portfolio companies (including transactions to hedge interest rate or currency risks related to such additional investment). Subject to the requirements of Subchapter M of the Code and the terms of any indebtedness, proceeds realized by the Company prior to the sixth anniversary of the Final Closing Date from the sale or repayment of any investment (as opposed to investment income) up to the cost of any such investment, may be retained and reinvested by the Company.

The Company will continue to operate as a private BDC reporting company, until the earlier of the following events, each referred to as an “Exit Event”: (i) any listing of the Company’s shares of common stock on a national securities exchange (a “listing”), including in connection with an initial public offering (“IPO”), (ii) merger with another entity, including an affiliated company, subject to any limitations under the Investment Company Act or (iii) the sale of all or substantially all of the assets of the Company. If the Company has not consummated an Exit Event by the sixth anniversary of the Final Closing Date, the Board of Directors (to the extent consistent with its fiduciary duties and subject to any necessary stockholder approvals and applicable requirements of the Investment Company Act and the Code) will meet to consider the Company’s potential wind down and/or liquidation and dissolution.

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

 

19


The Merger with Goldman Sachs BDC, Inc.

On October 12, 2020, the Company completed its previously announced merger with Goldman Sachs BDC, Inc. (“GS BDC”) pursuant to the Amended and Restated Agreement and Plan of Merger (the “Merger Agreement”), dated as of June 11, 2020. In accordance with the terms of the Merger Agreement, at the effective time of the Merger, each outstanding share of the Company’s common stock was converted into the right to receive, for each share of the Company’s common stock, that number of shares of GS BDC’s common stock, par value $0.001 per share (“GS BDC Common Stock”), with a net asset value (“NAV”) equal to the NAV per share of the Company’s common stock, in each case calculated as of October 9, 2020. As a result of the Merger, GS BDC issued an aggregate of 61,037,311 shares of GS BDC Common Stock to the Company’s former stockholders. For further information, see Note 12 “Subsequent Events.”

 

2.

SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

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

Certain financial information that is included in annual consolidated financial statements, including certain financial statement disclosures, prepared in accordance with GAAP, is not required for interim reporting purposes and has been condensed or omitted herein. These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes related thereto for the year ended December 31, 2019, included in the Company’s annual report on Form 10-K, which was filed with the SEC on February 27, 2020. The results for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the full fiscal year, any other interim period or any future year or period.

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

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

Basis of Consolidation

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

Revenue Recognition

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

Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis. Discounts and premiums to par value on investments purchased are accreted and amortized, into interest income over the life of the respective investment using the effective interest method. Loan origination fees, original issue discount (“OID”) and market discounts or premiums are capitalized and amortized into interest income using the effective interest method or straight-line method, as applicable. Exit fees that are receivable upon repayment of a loan or debt security are amortized into interest income over the life of the respective investment. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized upfront loan origination fees and unamortized discounts are recorded as interest income, for which the Company has earned the following:

 

     For the Three Months Ended      For the Nine Months Ended  
     September 30,
2020
     September 30,
2019
     September 30,
2020
     September 30,
2019
 

Prepayment premiums

   $ 661      $ —        $ 807      $ 1,213  

Accelerated amortization of upfront loan origination fees and unamortized discounts

   $ 247      $ 520      $ 1,136      $ 1,747  

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

 

20


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

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

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

Non-Accrual Investments

Investments are placed on non-accrual status when it is probable that principal, interest or dividends will not be collected according to contractual terms. Accrued interest or dividends generally are reversed when an investment is placed on non-accrual status. Interest or dividend payments received on non-accrual investments may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual investments are restored to accrual status when past due principal and interest or dividends are paid and, in management’s judgment, principal and interest or dividend payments are likely to remain current. The Company may make exceptions to this treatment if an investment has sufficient collateral value and is in the process of collection. As of September 30, 2020, the Company had certain investments held in one portfolio company on non-accrual status, which represented 0.7% and 0.0% of the total investments (excluding an investment in a money market fund managed by an affiliate of Group Inc.) at amortized cost and at fair value, respectively. As of December 31, 2019, the Company did not have any investments on non-accrual status.

Investments

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

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

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

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

 

  (1)

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

 

  (2)

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

 

21


  (3)

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

 

  (4)

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

 

  (5)

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

 

  (6)

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

Money Market Funds

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

Cash

Cash consists of deposits held at a custodian bank. As of September 30, 2020 and December 31, 2019, the Company held an aggregate cash balance of $16,911 and $13,393. Foreign currency of $1,388 and $1,299(acquisition cost of $1,353 and $1,286) is included in cash as of September 30, 2020 and December 31, 2019.

Foreign Currency Translation

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

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

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

Derivatives

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

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

Income Taxes

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

 

22


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

The Company has elected to be treated as a RIC commencing with its taxable year ended December 31, 2017. So long as the Company maintains its status as a RIC, it will generally not be required to pay corporate-level U.S. federal income tax on any ordinary income or capital gains that it distributes at least annually to its stockholders as dividends. As a result, any U.S. federal income tax liability related to income earned and distributed by the Company represents obligations of the Company’s stockholders and will not be reflected in the consolidated financial statements of the Company.

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

Certain of the Company’s consolidated subsidiaries are subject to U.S. federal and state corporate level income taxes. Income tax expense, if any, is included under the income category for which it applies in the Consolidated Statements of Operations.

Distributions

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

Deferred Financing Costs

Deferred financing costs consist of fees and expenses paid in connection with the closing of and amendments to the revolving credit facility between the Company and Truist Bank (formerly known as SunTrust Bank) (the “Truist Revolving Credit Facility”). These costs are amortized using the straight-line method over the term of the Truist Revolving Credit Facility. Deferred financing costs related to the Truist Revolving Credit Facility are presented separately as an asset on the Company’s Consolidated Statements of Assets and Liabilities.

New Accounting Pronouncements

In March 2020, the FASB issued Accounting Standard Update (“ASU”) No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This ASU provides optional exceptions for applying GAAP to contract modifications, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The Company adopted this ASU in June 2020 and this adoption did not have a material impact on the Company’s consolidated financial statements.

 

23


3.

SIGNIFICANT AGREEMENTS AND RELATED PARTY TRANSACTIONS

Investment Management Agreement

The Company entered into an investment management agreement effective as of January 13, 2017 (the “Investment Management Agreement”) with the Investment Adviser, pursuant to which the Investment Adviser manages the Company’s investment program and related activities.

Management Fee

The Company pays the Investment Adviser a management fee (the “Management Fee”), payable quarterly in arrears, equal to 0.375% (i.e., an annual rate of 1.50%) of the average NAV of the Company (including un-invested cash and cash equivalents) at the end of the then-current quarter and the prior calendar quarter (and, in the case of the Company’s first quarter, the NAV as of such quarter-end). The Management Fee for any partial quarter will be appropriately prorated. Following the occurrence (if any) of a listing, average gross assets (excluding cash or cash equivalents but including assets purchased with borrowed amounts) at the end of the then-current quarter and the prior calendar quarter (and, in the case of the Company’s first quarter-end following such event, the Company’s gross assets as of such quarter-end) will be used instead of average NAV to calculate the Management Fee.

For the three and nine months ended September 30, 2020, Management Fees amounted to $3,714 and $10,739. As of September 30, 2020, $3,714 remained payable. For the three and nine months ended September 30, 2019, Management Fees amounted to $3,489 and $10,145.

Incentive Fee

Pursuant to the Investment Management Agreement, the Company pays to the Investment Adviser an incentive fee (the “Incentive Fee”) as follows:

The Incentive Fee will consist of two components that are determined independently of each other, with the result that one component may be payable even if the other is not. A portion of the Incentive Fee will be based on the Company’s income and a portion will be based on the Company’s capital gains, each as described below.

i. Quarterly Incentive Fee Based on Income

For the portion of the Incentive Fee based on income, the Company’s Investment Adviser is entitled to receive the Incentive Fee based on income from the Company if the Company’s Ordinary Income (as defined below) exceeds a quarterly “hurdle rate” (as defined below) of 1.75%. For this purpose, the hurdle is computed by reference to the Company’s NAV and does not take into account changes in the market price of the Company’s common stock (if any). The Incentive Fee based on income will be determined and paid quarterly in arrears at the end of each calendar quarter by reference to the Company’s aggregate net investment income, as adjusted as described below, from the calendar quarter then ending and the eleven preceding calendar quarters (or if shorter, the number of quarters that have occurred since the Initial Drawdown Date) (in either case, the “Trailing Twelve Quarters”). However, following the occurrence (if any) of a listing, the Trailing Twelve Quarters will be “reset” so as to include, as of the end of any quarter, the calendar quarter then ending and the eleven preceding calendar quarters (or if shorter, the number of quarters that have occurred since the listing, rather than the number of quarters that have occurred since the Initial Drawdown Date).

The “hurdle amount” for the Incentive Fee based on income is determined on a quarterly basis, and is equal to 1.75% multiplied by the Company’s NAV at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The hurdle amount is calculated after making appropriate adjustments for subscriptions (which shall include all issuances by the Company of shares of its common stock) and distributions that occurred during the relevant Trailing Twelve Quarters. The Incentive Fee for any partial period will be appropriately prorated. For the portion of the Incentive Fee based on income, the Company pays the Investment Adviser a quarterly Incentive Fee based on the amount by which (A) Ordinary Income in respect of the relevant Trailing Twelve Quarters exceeds (B) the hurdle amount for such Trailing Twelve Quarters. The amount of the excess of (A) over (B) described in this paragraph for such Trailing Twelve Quarters is referred to as the “Excess Income Amount.”

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

 

   

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

 

   

100% of the Ordinary Income (as defined below), if any, that exceeds the hurdle amount, but is less than or equal to an amount, which we refer to as the “Catch-up Amount,” determined as the sum of 2.0588% (or 2.1875% in the event of a listing) multiplied by the Company’s NAV at the beginning of each applicable calendar quarter included in the relevant Trailing Twelve Quarters is included in the calculation of the Incentive Fee based on income; and

 

   

15% (which will be increased to 20% in the event of a listing, from the date of such listing) of the Ordinary Income that exceeds the Catch-up Amount is included in the calculation of the Incentive Fee based on income.

The amount of the Incentive Fee based on income that will be paid to the Investment Adviser for a particular quarter will equal the excess of the Incentive Fee so calculated minus the aggregate Incentive Fees based on income that were paid in respect of the first eleven calendar quarters (or the portion thereof) included in the relevant Trailing Twelve Quarters but will not exceed the Incentive Fee Cap (as described below, and will be subject to the limitations set forth in Section 205(b)(3) of the Advisers Act).

 

24


The Incentive Fee based on income that is paid to the Investment Adviser for a particular quarter is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap for any quarter is an amount equal to (a) 15% (which will be increased to 20% in the event of a listing, from the date of such listing) of the Cumulative Net Return (as defined below) during the relevant Trailing Twelve Quarters minus (b) the aggregate Incentive Fees based on income that were paid in respect of the first eleven calendar quarters (or the portion thereof) included in the relevant Trailing Twelve Quarters.

“Ordinary Income” means interest income, dividend income and any other income (including any accrued income that we have not yet received in cash and any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that we receive from portfolio companies) accrued during the calendar quarter minus our operating expenses accrued during the calendar quarter (including the Management Fee, administrative expenses and any interest expense and dividends paid on issued and outstanding preferred stock, but excluding the Incentive Fee).

“Cumulative Net Return” means (x) the Ordinary Income in respect of the relevant Trailing Twelve Quarters minus (y) any Net Capital Loss (as defined below), if any, in respect of the relevant Trailing Twelve Quarters.

If, in any quarter, the Incentive Fee Cap is zero or a negative value, the Company will pay no Incentive Fee based on income to the Investment Adviser for such quarter. If, in any quarter, the Incentive Fee Cap is a positive value but is less than the Incentive Fee based on income that is payable to the Investment Adviser for such quarter (before giving effect to the Incentive Fee Cap) calculated as described above, the Company will pay an Incentive Fee based on income to the Investment Adviser equal to the Incentive Fee Cap for such quarter. If, in any quarter, the Incentive Fee Cap for such quarter is equal to or greater than the Incentive Fee based on income that is payable to the Investment Adviser for such quarter (before giving effect to the Incentive Fee Cap) calculated as described above, the Company will pay an Incentive Fee based on income to the Investment Adviser equal to the Incentive Fee calculated as described above for such quarter without regard to the Incentive Fee Cap. In certain limited circumstances, an Incentive Fee based on income will be payable to the Investment Adviser although the net income for such quarter did not exceed the hurdle rate or the Incentive Fee will be higher than it would have been if calculated based on the Company’s performance for the applicable quarter without taking into account the Trailing Twelve Quarters.

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

ii. Annual Incentive Fee Based on Capital Gains

The portion of Incentive Fee based on capital gains is determined and paid annually in arrears at the end of each calendar year or, in the event of a listing, the date on which such event occurs. At the end of each calendar year (or the occurrence of a listing), the Company will pay the Investment Adviser an Incentive Fee equal to (A) 15% (which will be increased to 20% in the event of a listing, from the date of such listing) of the difference, if positive, of the sum of the Company’s aggregate realized capital gains, if any, computed net of the Company’s aggregate realized capital losses, if any, and the Company’s aggregate unrealized capital depreciation, in each case from the Initial Drawdown Date (or, following the occurrence (if any) of a listing, from the date on which such event occurs) until the end of such calendar year or listing, as applicable, minus (B) the cumulative amount of Incentive Fees based on capital gains previously paid to the Investment Adviser from the Initial Drawdown Date (or, following the occurrence (if any) of a listing, from the date on which such event occurs) through the end of such calendar year or listing, as applicable. For the avoidance of doubt, unrealized capital appreciation is excluded from the calculation in clause (A), above.

The Company accrues, but does not pay, a portion of the Incentive Fee based on capital gains with respect to net unrealized appreciation. Under GAAP, the Company is required to accrue an Incentive Fee based on capital gains that includes net realized capital gains and losses and net unrealized capital appreciation and depreciation on investments held at the end of each period. In calculating the accrual for the Incentive Fee based on capital gains, the Company considers the cumulative aggregate unrealized capital appreciation in the calculation, since an Incentive Fee based on capital gains would be payable if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Management Agreement. This accrual is calculated using the aggregate cumulative realized capital gains and losses and aggregate cumulative unrealized capital appreciation or depreciation. If such amount is positive at the end of a period, then the Company records a capital gains incentive fee equal to 15% (which will be increased to 20% in the event of a listing, from the date of such listing) of such amount, minus the aggregate amount of actual Incentive Fees based on capital gains paid in all prior periods (or, following the occurrence (if any) of a listing, in all prior periods beginning with the date on which such event occurs). If such amount is negative, then there is no accrual for such period. There can be no assurance that such unrealized capital appreciation will be realized in the future.

For the three and nine months ended September 30, 2020, the Company accrued an Incentive Fee based on income of $6,456 and $6,456. As of September 30, 2020, $6,456 remained payable. For the three and nine months ended September 30, 2019, the Company accrued an Incentive Fee based on income of $3,265 and $14,605.

 

25


Administration and Custodian Fees

The Company has entered into an administration agreement with State Street Bank and Trust Company (the “Administrator”) under which the Administrator provides various accounting and administrative services to the Company. The Company pays the Administrator fees for its services as it determines are commercially reasonable in its sole discretion. The Company also reimburses the Administrator for all reasonable expenses. To the extent that the Administrator outsources any of its functions, the Administrator pays any compensation associated with such functions. The Administrator also serves as the Company’s custodian (the “Custodian”).

For the three and nine months ended September 30, 2020, the Company incurred expenses for services provided by the Administrator and the Custodian of $297 and $897. As of September 30, 2020, $199 remained payable. For the three and nine months ended September 30, 2019, the Company incurred expenses for services provided by the Administrator and the Custodian of $287 and $824.

Transfer Agent Fees

The Company has entered into a transfer agency agreement (the “Transfer Agency Agreement”), with GS & Co. pursuant to which GS & Co. serves as the Company’s transfer agent (“Transfer Agent”), registrar and disbursing agent. The Company pays the Transfer Agent fees at an annual rate of 0.12% of the average NAV of the Company at the end of the then-current quarter and the prior calendar quarter (and, in the case of the Company’s first quarter, the Company’s NAV as of such quarter-end).

For the three and nine months ended September 30, 2020, the Company incurred expenses for services provided by the Transfer Agent of $302 and $867. As of September 30, 2020, $302 remained payable. For the three and nine months ended September 30, 2019, the Company incurred expenses for services provided by the Transfer Agent of $279 and $812.

Affiliates

The table below presents the Company’s affiliated investments:

 

     Beginning
Fair Value
Balance
     Gross
Additions(2)
     Gross
Reductions(3)
    Net
Realized
Gain
(Loss)
     Net Change
in
Unrealized
Appreciation
(Depreciation)
    Ending
Fair
Value
Balance
     Dividend,
Interest
and Other
Income
 

For the Nine Months Ended September 30, 2020

                  

Non-Controlled Affiliates

                  

Goldman Sachs Financial Square Government Fund(1)

   $ —        $ 388,506      $ (227,708   $ —        $ —       $ 160,798      $ 87  

Accuity Delivery Systems, LLC

     21,571        63        —         —          2,086       23,720        1,040  

Collaborative Imaging, LLC (dba Texas Radiology Associates)

     24,864        35        —         —          (955     23,944        1,371  

Elah Holdings, Inc.

     3,163        —          —         —          (1     3,162        —    
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total Non-Controlled Affiliates

   $ 49,598      $ 388,604      $ (227,708   $ —        $ 1,130     $ 211,624      $ 2,498  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

For the Year Ended December 31, 2019

                  

Non-Controlled Affiliates

                  

Goldman Sachs Financial Square Government Fund(1)

   $ —        $ 205,169      $ (205,169   $ —        $ —       $ —        $ 45  

Accuity Delivery Systems, LLC

     19,482        75        —         —          2,014       21,571        1,479  

Collaborative Imaging, LLC (dba Texas Radiology Associates)

     14,594        9,555        —         —          715       24,864        1,513  

Elah Holdings, Inc.

     3,163        —          —         —          —         3,163        —    
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total Non-Controlled Affiliates

   $ 37,239      $ 214,799      $ (205,169   $ —        $ 2,729     $ 49,598      $ 3,037  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

 

(1) 

Fund advised by an affiliate of Goldman Sachs.

(2) 

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

(3) 

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

Due to Affiliates

The Investment Adviser pays certain general and administrative expenses on behalf of the Company in the ordinary course of business. As of September 30, 2020 and December 31, 2019, there were $418 and $417, included within Accrued expenses and other liabilities paid by the Investment Adviser and its affiliates on behalf of the Company.

 

26


Co-investment Activity

In certain circumstances, negotiated co-investments by the Company and other funds managed by the Investment Adviser may be made only pursuant to an order from the SEC permitting the Company to do so. On January 4, 2017, the SEC granted exemptive relief (“Exemptive Relief”) that permits the Company (which was merged with GS BDC on October 12, 2020) to co-invest with GS BDC, Goldman Sachs Private Middle Market Credit LLC (“GS PMMC”), Goldman Sachs Private Middle Market Credit II LLC (“GS PMMC II”) and certain other funds that may be managed by GSAM, including the GSAM Credit Alternatives Team, after the date of the exemptive order, subject to certain conditions including that co-investments are made in a manner consistent with the Company’s investment objectives, positions, policies, strategies and restrictions, as well as regulatory requirements and pursuant to the conditions required by the Exemptive Relief, and are allocated fairly among participants. The GSAM Credit Alternatives Team is comprised of investment professionals dedicated to the Company’s investment strategy and other funds that share a similar investment strategy with the Company, who are responsible for identifying investment opportunities, conducting research and due diligence on prospective investments, negotiating and structuring the Company’s investments and monitoring and servicing the Company’s investments, together with investment professionals who are primarily focused on investment strategies in syndicated, liquid credit. Under the terms of the Exemptive Relief, a “required majority” (as defined in Section 57(o) of the Investment Company Act) of the Company’s independent directors must make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the proposed transaction are reasonable and fair to the Company and the Company’s stockholders and do not involve overreaching in respect of the Company or its stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of the Company’s stockholders and is consistent with the then-current investment objectives and strategies of the Company.

 

4.

INVESTMENTS

The Company’s investments (excluding an investment in a money market fund, if any, managed by an affiliate of Group Inc.) consisted of the following:

 

     September 30, 2020      December 31, 2019  

Investment Type

   Cost      Fair Value      Cost      Fair Value  

1st Lien/Senior Secured Debt

   $ 1,320,702      $ 1,290,854      $ 1,272,044      $ 1,266,486  

1st Lien/Last-Out Unitranche

     100,545        100,019        100,829        100,797  

2nd Lien/Senior Secured Debt

     299,557        267,796        311,933        294,165  

Preferred Stock

     7,221        15,556        7,200        10,137  

Common Stock

     10,381        14,317        10,381        11,575  

Warrants

     1,166        —          
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Investments

   $ 1,739,572      $ 1,688,542      $ 1,702,387      $ 1,683,160  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

27


The industry composition of the Company’s investments at fair value and net assets was as follows:

 

     September 30, 2020     December 31, 2019  

Industry

   Fair Value     Net Assets     Fair Value     Net Assets  

Health Care Technology

     10.0     16.5     10.1     18.0

Interactive Media & Services

     9.8       16.1       10.0       17.8  

Health Care Providers & Services

     9.5       15.7       11.5       20.5  

Software

     9.4       15.5       10.1       18.0  

IT Services

     7.8       12.9       7.8       14.0  

Real Estate Management & Development

     7.0       11.5       5.9       10.4  

Professional Services

     6.6       10.8       5.8       10.3  

Diversified Financial Services

     5.3       8.7       5.1       9.1  

Diversified Consumer Services

     4.9       8.1       1.8       3.2  

Health Care Equipment & Supplies

     4.1       6.7       4.2       7.5  

Hotels, Restaurants & Leisure

     3.8       6.3       3.9       7.0  

Chemicals

     3.3       5.5       2.8       5.1  

Road & Rail

     1.9       3.1       3.1       5.6  

Transportation Infrastructure

     1.9       3.1       1.9       3.4  

Diversified Telecommunication Services

     1.8       3.0       1.7       3.0  

Household Products

     1.7       2.9       1.9       3.3  

Entertainment

     1.5       2.4       1.6       2.9  

Air Freight & Logistics

     1.4       2.3       1.5       2.6  

Insurance

     1.3       2.2       1.6       2.8  

Media

     1.1       1.9       1.1       2.1  

Trading Companies & Distributors

     0.9       1.6       1.0       1.8  

Beverages

     0.9       1.5       0.7       1.3  

Commercial Services & Supplies

     0.7       1.2       0.7       1.3  

Internet & Direct Marketing Retail

     0.7       1.1       0.7       1.2  

Auto Components

     0.6       1.0       0.6       1.1  

Building Products

     0.6       1.0       1.4       2.4  

Food Products

     0.5       0.8       0.5       0.9  

Life Sciences Tools & Services

     0.5       0.8       0.5       0.8  

Containers & Packaging

     0.3       0.5       0.3       0.5  

Capital Markets

     0.2       0.3       0.2       0.3  

Aerospace & Defense

     —   (1)      —   (1)      —         —    

Construction & Engineering

     —   (1)      —   (1)      —         —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

     100.0     165.0     100.0     178.2
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Amount rounds to 0.0%.

The geographic composition of the Company’s investments at fair value was as follows:

 

Geographic

   September 30,
2020
    December 31,
2019
 

United States

     95.5     95.6

Canada

     2.8       2.7  

Ireland

     1.7       1.7  
  

 

 

   

 

 

 

Total

     100.0     100.0
  

 

 

   

 

 

 

 

5.

FAIR VALUE MEASUREMENT

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

 

28


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

Basis of Fair Value Measurement

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

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

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

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

The table below presents the valuation techniques and the nature of significant inputs generally used in determining the fair value of Level 2 and Level 3 Instruments.

 

Level 2 Instruments

  

Valuation Techniques and Significant Inputs

Equity and Fixed Income   

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

 

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

Derivative Contracts    OTC derivatives (both centrally cleared and bilateral) are valued using market transactions and other market evidence whenever possible, including market-based inputs to models, calibration to market-clearing transactions, broker or dealer quotations, or other alternative pricing sources with reasonable levels of price transparency. Where models are used, the selection of a particular model to value an OTC derivative depends upon the contractual terms of, and specific risks inherent in, the instrument, as well as the availability of pricing information in the market. The Company generally uses similar models to value similar instruments. Valuation models require a variety of inputs, including contractual terms, market prices, yield curves, credit curves, measures of volatility, voluntary and involuntary prepayment rates, loss severity rates and correlations of such inputs. For OTC derivatives that trade in liquid markets, model inputs can generally be verified and model selection does not involve significant management judgment. OTC derivatives are classified within Level 2 of the fair value hierarchy when significant inputs are corroborated by market evidence.

Level 3 Instruments

  

Valuation Techniques and Significant Inputs

Bank Loans, Corporate Debt, and Other Debt Obligations    Valuations are generally based on discounted cash flow techniques, for which the significant inputs are the amount and timing of expected future cash flows, market yields and recovery assumptions. The significant inputs are generally determined based on relative value analyses, which incorporate comparisons both to credit default swaps that reference the same underlying credit risk and to other debt instruments for the same issuer for which observable prices or broker quotes are available. Other valuation methodologies are used as appropriate including market comparables, transactions in similar instruments and recovery/liquidation analysis.
Equity   

Recent third-party investments or pending transactions are considered to be the best evidence for any change in fair value. When these are not available, the following valuation methodologies are used, as appropriate and available (i) Transactions in similar instruments; (ii) Discounted cash flow techniques; (iii) Third party appraisals; and (iv) Industry multiples and public comparables.

 

Evidence includes recent or pending reorganizations (for example, merger proposals, tender offers and debt restructurings) and significant changes in financial metrics, including (i) Current financial performance as compared to projected performance; (ii) Capitalization rates and multiples; and (iii) Market yields implied by transactions of similar or related assets.

 

29


The tables below present the ranges of significant unobservable inputs used to value the Company’s Level 3 assets and liabilities as of September 30, 2020 and December 31, 2019. These ranges represent the significant unobservable inputs that were used in the valuation of each type of instrument, but they do not represent a range of values for any one instrument. For example, the lowest yield in 1st Lien/Senior Secured Debt is appropriate for valuing that specific debt investment, but may not be appropriate for valuing any other debt investments in this asset class. Accordingly, the ranges of inputs presented below do not represent uncertainty in, or possible ranges of, fair value measurements of the Company’s Level 3 assets and liabilities.

 

Level 3 Instruments

   Fair
Value(1)(2)
     Valuation Techniques(3)      Significant
Unobservable
Inputs
    Range(4)
of Significant
Unobservable
Inputs
     Weighted
Average(5)
 

As of September 30, 2020

             

Bank Loans, Corporate Debt, and Other Debt Obligations

 

1st Lien/Senior Secured

   $ 1,091,781        Discounted cash flows        Discount Rate       6.0% - 17.3%        8.6%  

1st Lien/Last-Out Unitranche

     100,019        Discounted cash flows        Discount Rate       7.3% - 10.7%        9.6%  

2nd Lien/Senior Secured

     206,775        Discounted cash flows        Discount Rate       10.0% - 12.8%        10.7%  
     9,933        Comparable multiples        EV/EBITDA(6)       7.4x - 25.1x        10.4x  
  

 

 

            

Equity

 

Preferred Stock

   $ 8,878        Comparable multiples        EV/EBITDA(6)       7.9x - 26.7x        18.7x  
     6,657        Comparable multiples        EV/Revenue       1.7x - 4.4x        1.3x  

Common Stock

     5,404        Discounted cash flows        Discount Rate       13.1% - 31.5%        24.6%  
     707        Comparable multiples        EV/EBITDA(6)       10.0x - 10.1x        10.0x  
     8,206        Comparable multiples        EV/Revenue       0.3x - 12.5x        12.2x  
  

 

 

            

As of December 31, 2019

             

Bank Loans, Corporate Debt, and Other Debt Obligations

 

1st Lien/Senior Secured

   $ 1,031,569        Discounted cash flows        Discount Rate       6.5% - 13.3%        8.7%  

1st Lien/Last-Out Unitranche

     100,797        Discounted cash flows        Discount Rate       8.5% - 10.1%        9.8%  

2nd Lien/Senior Secured

     233,672        Discounted cash flows        Discount Rate       9.9% - 12.4%        10.7%  
  

 

 

            

Equity

             

Preferred Stock

   $ 7,200        Comparable multiples        EV/EBITDA(6)       4.2x - 30.2x        19.0x  
     2,937        Comparable multiples        EV/Revenue       1.0x - 3.2x        1.3x  

Common Stock

     6,045        Discounted cash flows        Discount Rate       13.9% - 31.0%        23.9%  
     1,156        Comparable multiples        EV/EBITDA(6)       8.5x - 12.7x        9.7x  
     4,374        Comparable multiples        EV/Revenue       2.3x - 9.7x        9.6x  
  

 

 

            

 

(1) 

As of September 30, 2020, included within Level 3 assets of $1,595,565 is an amount of $157,205 for which the Investment Adviser did not develop the unobservable inputs (examples include single source broker quotations, third party pricing, and prior transactions). The income approach was used in the determination of fair value for $1,398,575 or 89.3% of Level 3 bank loans, corporate debt, and other debt obligations.

(2) 

As of December 31, 2019, included within Level 3 assets of $1,579,087 is an amount of $191,337 for which the Investment Adviser did not develop the unobservable inputs (examples include single source broker quotations, third party pricing, and prior transactions). The income approach was used in the determination of fair value for $1,366,038 or 87.7% of Level 3 bank loans, corporate debt, and other debt obligations.

(3) 

The fair value of any one instrument may be determined using multiple valuation techniques. For example, market comparable and discounted cash flows may be used together to determine fair value. Therefore, the Level 3 balance encompasses both of these techniques.

(4) 

The range for an asset category consisting of a single investment represents the relevant market data considered in determining the fair value of the investment.

(5) 

Weighted average for an asset category consisting of multiple investments is calculated by weighting the significant unobservable input by the relative fair value of the investment. Weighted average for an asset category consisting of a single investment represents the significant unobservable input used in the fair value of the investment.

(6) 

Enterprise value of portfolio company as a multiple of earnings before interest, taxes, depreciation and amortization (“EBITDA”).

As noted above, the income and market approaches were used in the determination of fair value of certain Level 3 assets as of September 30, 2020 and December 31, 2019. The significant unobservable inputs used in the income approach are the discount rate or market yield used to discount the estimated future cash flows expected to be received from the underlying investment, which include both future principal and interest payments. An increase in the discount rate or market yield would result in a decrease in the fair value. Included in the consideration and selection of discount rates is risk of default, rating of the investment, call provisions and comparable company investments. The significant unobservable inputs used in the market approach are based on market comparable transactions and market multiples of publicly traded comparable companies. Increases or decreases in market comparable transactions or market multiples would result in an increase or decrease, in the fair value.

 

30


The following is a summary of the Company’s assets categorized within the fair value hierarchy:

 

     September 30, 2020     December 31, 2019  

Assets

   Level 1      Level 2     Level 3      Total     Level 1      Level 2      Level 3      Total  

1st Lien/Senior Secured Debt

   $ —        $ 41,889     $ 1,248,965      $ 1,290,854     $ —        $ 58,830      $ 1,207,656      $ 1,266,486  

1st Lien/Last-Out Unitranche

     —          —         100,019        100,019       —          —          100,797        100,797  

2nd Lien/Senior Secured Debt

     —          51,088       216,708        267,796       —          45,243        248,922        294,165  

Preferred Stock

     —          —         15,556        15,556       —          —          10,137        10,137  

Common Stock

     —          —         14,317        14,317       —          —          11,575        11,575  

Warrants

     —          —         —          —         —          —          —          —    

Affiliated Money Market Fund

     160,798        —         —          160,798       —          —          —          —    
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total assets

   $ 160,798      $ 92,977     $ 1,595,565      $ 1,849,340     $ —        $ 104,073      $ 1,579,087      $ 1,683,160  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Foreign currency forward contracts - asset (liability)(1)

   $ —        $ (134   $ —        $ (134   $ —        $ 46      $ —        $ 46  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

Amounts represent the unrealized appreciation (depreciation) on the foreign currency forward contracts.

The below table presents a summary of changes in fair value of Level 3 assets by investment type:

 

Beginning

Balance

     Purchases(1)      Net
Realized
Gain (Loss)
    Net Change
in
Unrealized
Appreciation
(Depreciation)
    Sales and
Settlements(1)
    Net
Amortization
of Premium/
Discount
     Transfers
In
     Transfers
Out(2)
    Ending
Balance
     Net Change
in
Unrealized
Appreciation
(Depreciation)
for assets
still held
 

For the Nine Months Ended September 30, 2020

 

                   

1st Lien/Senior Secured Debt

   $ 1,207,656      $ 156,242      $ 220     $ (22,416   $ (87,632   $ 3,901      $ —        $ (9,006   $ 1,248,965      $ (22,658

1st Lien/Last-Out Unitranche

     100,797        —          —         (494     (695     411        —          —         100,019        (494

2nd Lien/Senior Secured Debt

     248,922        13,155        —         (18,871     (11,852     604        —          (15,250     216,708        (18,870

Preferred Stock

     10,137        21        —         5,398       —         —          —          —         15,556        5,398  

Common Stock

     11,575        —          —         2,742       —         —          —          —         14,317        2,742  

Warrants

     —          2,333        —         (1,166     (1,167     —          —          —         —          (1,166
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total assets

   $ 1,579,087      $ 171,751      $ 220     $ (34,807   $ (101,346   $ 4,916      $ —        $ (24,256   $ 1,595,565      $ (35,048
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

For the Nine Months Ended September 30, 2019

 

                   

1st Lien/Senior Secured Debt

   $ 644,913      $ 559,371      $ (21   $ (3,437   $ (114,031   $ 3,558      $ —        $ —       $ 1,090,353      $ (2,981

1st Lien/Last-Out Unitranche

     90,582        10,294        —         (124     (339     372        —          —         100,785        (124

2nd Lien/Senior Secured Debt

     300,116        24,522        (10,553     1,181       (32,795     987        —          (17,504     265,954        (816

Preferred Stock

     8,100        —          —         1,393       —         —          —          —         9,493        1,393  

Common Stock

     9,825        1,054        —         2,755       —         —          —          —         13,634        2,755  

Warrants

     —          —          —         —         —         —          —          —         —          —    
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total assets

   $ 1,053,536      $ 595,241      $ (10,574   $ 1,768     $ (147,165   $ 4,917      $ —        $ (17,504   $ 1,480,219      $ 227  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

 

(1) 

Purchases may include PIK and securities received in corporate actions and restructurings. Sales and Settlements may include securities delivered in corporate actions and restructuring of investments.

(2) 

Transfers out were primarily due to increased price transparency.

Debt Not Carried at Fair Value

The fair value of the Company’s debt, which would have been categorized as Level 3 within the fair value hierarchy as of September 30, 2020 and December 31, 2019, approximates its carrying value because the Truist Revolving Credit Facility has variable interest based on selected short term rates.

 

31


6.

DEBT

In accordance with the Investment Company Act, with certain exceptions, the Company is currently allowed to borrow amounts such that its asset coverage ratio, as defined in the Investment Company Act, is at least 200% after such borrowing (or 150% if certain requirements are met). As of September 30, 2020 and December 31, 2019, the Company’s asset coverage ratio based on the aggregate amount outstanding of senior securities was 221% and 228%.

The Company’s outstanding debt was as follows:

 

     September 30, 2020      December 31, 2019  
     Aggregate
Borrowing
Amount
Committed
     Amount
Available
     Carrying
Value
     Aggregate
Borrowing
Amount
Committed
     Amount
Available
     Carrying
Value
 

Truist Revolving Credit Facility(1)(2)

   $ 850,000      $ 7,171      $ 843,219      $ 850,000      $ 120,648      $ 729,986  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Debt

   $ 850,000      $ 7,171      $ 843,219      $ 850,000      $ 120,648      $ 729,986  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) 

The Company may borrow amounts in USD or certain other permitted currencies. Debt outstanding denominated in currencies other than USD has been converted to USD using the applicable foreign currency exchange rate as of the applicable reporting date. As of September 30, 2020, the Company had outstanding borrowings denominated in USD of $787,000 and in Euros (EUR) of 47,950. As of December 31, 2019, the Company had outstanding borrowings denominated in USD of $676,200 and in EUR of 47,950.

(2) 

Provides, under certain circumstances, a total borrowing capacity of $900,000.

The weighted average interest rates of the aggregate borrowings outstanding for the nine months ended September 30, 2020 and for the year ended December 31, 2019 were 2.97% and 4.27%.

Truist Revolving Credit Facility

On September 11, 2017, the Company entered into the Truist Revolving Credit Facility, a multicurrency facility, with various lenders. Truist Bank serves as administrative agent and Bank of America, N.A. serves as syndication agent. The Company amended the Truist Revolving Credit Facility on September 17, 2018, July 10, 2019 and February 25, 2020.

The total commitments under the Truist Revolving Credit Facility is $850,000. The accordion feature of the Truist Revolving Credit Facility allows the Company, subject to the satisfaction of various conditions, to bring total commitments under the Truist Revolving Credit Facility to $900,000.

Borrowings under the Truist Revolving Credit Facility, including amounts drawn in respect of letters of credit, bear interest (at the Company’s election) of either the Adjusted LIBO Rate (as defined in the Truist Revolving Credit Facility) plus the Applicable Margin (as defined in the Truist Revolving Credit Facility) or the Applicable Margin plus the higher of the Prime Rate (as defined in the Truist Revolving Credit Facility), Federal Funds Effective Rate (as defined in the Truist Revolving Credit Facility) plus 0.5% or overnight London Interbank Offered Rate (“LIBOR”) plus 1.0%. Interest is payable quarterly in arrears or as defined in the Truist Revolving Credit Facility. The Company pays a fee of 0.375% per annum on committed but undrawn amounts under the Truist Revolving Credit Facility, payable quarterly in arrears. Any amounts borrowed under the Truist Revolving Credit Facility will mature, and all accrued and unpaid interest will be due and payable, on March 11, 2022.

The Truist Revolving Credit Facility may be guaranteed by certain of the Company’s subsidiaries that are formed or acquired by the Company in the future (collectively, the “Guarantors”). Proceeds from borrowings may be used for general corporate purposes, including the funding of portfolio investments.

The Company’s obligations to the lenders under the Truist Revolving Credit Facility are secured by a first priority security interest in substantially all of the Company’s portfolio of investments and cash, with certain exceptions. The Truist Revolving Credit Facility contains certain customary covenants, including: (i) maintaining a minimum shareholder’s equity, (ii) maintaining an asset coverage ratio of at least 2 to 1, (iii) maintaining a minimum liquidity test of at least 15% of the “covered debt amount” during any period when the “adjusted covered debt balance” is greater than 85% of the “adjusted borrowing base,” as such quoted terms are defined in the Truist Revolving Credit Facility and (iv) restrictions on industry concentrations in the Company’s investment portfolio.

The Truist Revolving Credit Facility also includes customary representations and warranties, conditions precedent to funding of draws and events of default (including a change in control event of default trigger).

Costs of $5,626 were incurred in connection with obtaining and amending the Truist Revolving Credit Facility and exercising its right under the accordion feature, which have been recorded as deferred financing costs on the Consolidated Statements of Assets and Liabilities and are being amortized over the life of the Truist Revolving Credit Facility using the straight-line method. As of September 30, 2020 and December 31, 2019, outstanding deferred financing costs were $1,988 and $2,617.

The below table presents the summary information of the Truist Revolving Credit Facility:

 

     For the Three Months Ended     For the Nine Months Ended  
     September 30,
2020
    September 30,
2019
    September 30,
2020
    September 30,
2019
 

Borrowing interest expense

   $ 5,195     $ 6,399     $ 17,937     $ 14,810  

Facility fees

     20       228       166       685  

Amortization of financing costs

     347       374       1,059       974  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 5,562     $ 7,001     $ 19,162     $ 16,469  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average interest rate

     2.45     4.34     2.97     4.40

Average outstanding balance

   $ 843,045     $ 584,493     $ 805,444     $ 450,012  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

32


7.

DERIVATIVES

The Company enters into foreign currency forward contracts from time to time to help mitigate the impact that an adverse change in foreign exchange rates would have on the value of the Company’s investments denominated in foreign currencies.

In order to better define its contractual rights and to secure rights that will help the Company mitigate its counterparty risk, the Company may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or a similar agreement with its derivative counterparties. An ISDA Master Agreement is a bilateral agreement between the Company and a counterparty that governs OTC derivatives, including foreign currency forward contracts, and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of a default (close-out netting) or similar event, including the bankruptcy or insolvency of the counterparty.

For financial reporting purposes, cash collateral that has been pledged to cover obligations of the Company and cash collateral received from the counterparty, if any, is included in the Consolidated Statements of Assets and Liabilities as due to/due from a broker. The Company minimizes counterparty credit risk by only entering into agreements with counterparties that they believe to be in good standing and by monitoring the financial stability of those counterparties.

For the three and nine months ended September 30, 2020, the Company’s average USD notional exposure to foreign currency forward contracts were $3,465 and $4,286. For the three and nine months ended September 30, 2019, the Company’s average USD notional exposure to foreign currency forward contracts were $2,963 and $3,855.

The Company’s net exposure to foreign currency forward contracts by counterparty that are subject to ISDA Master Agreements or similar agreements presented on the Consolidated Statements of Assets and Liabilities was as follows:

 

     Gross Amount of
Assets
     Gross Amount of
(Liabilities)
    Net Amount of Assets or
(Liabilities)
    Collateral (Received)
Pledged (1)
     Net Amounts (2)  

September 30, 2020

            

Bank of America, N.A.

   $ —        $ (134   $ (134   $ —        $ (134
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

December 31, 2019

            

Bank of America, N.A.

   $ 46      $ —       $ 46     $ —        $ 46  
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

 

(1) 

Amount excludes excess cash collateral paid.

(2) 

Net amount represents the net amount due (to) from counterparty in the event of a default based on the contractual setoff rights under the agreement. Net amount excludes any over-collateralized amounts.

The effect of transactions in derivative instruments to the Consolidated Statements of Operations was as follows:

 

     For the Three Months Ended      For the Nine Months Ended  
     September 30,
2020
     September 30,
2019
     September 30,
2020
     September 30,
2019
 

Net realized gain (loss) on foreign currency forward contracts

   $ 40      $ 53      $ 150      $ 65  

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

     (179      78        (180      123