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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                to            
Commission File No. 000-54899
TCG BDC, INC.
(Exact name of Registrant as specified in its charter)
Maryland 80-0789789
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification Number)
One Vanderbilt Avenue, Suite 3400, New York, NY 10017
(Address of principal executive office) (Zip Code)
(212) 813-4900
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareCGBDThe Nasdaq Global Select Market
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☐    No  x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ☐    No  x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:    Yes  x    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☐    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer 
x
  Accelerated filer 
Non-accelerated filer ☐   Smaller reporting company 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its report. x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  x
The aggregate market value of the registrant’s common stock at June 30, 2020, based on the closing price of the common stock on that date of $8.57 on The Nasdaq Global Select Market, held by those persons deemed by the registrant to be non-affiliates was approximately $481,028,221.
The number of shares of the registrant’s common stock, $0.01 par value per share, outstanding at February 22, 2021 was 55,048,840.
Documents Incorporated by Reference: Portions of the registrant’s Proxy Statement for its 2021 Annual Meeting of Stockholders to be filed not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K are incorporated by reference into Part III of this Form 10-K.



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EXPLANATORY NOTE
This Amendment No. 1 on Form 10-K/A (this “Amendment”) amends the Annual Report on Form 10-K for TCG BDC, Inc. for the fiscal year ended December 31, 2020, which was filed with the Securities and Exchange Commission (the “SEC”) on February 23, 2021 (the “Original Form 10-K”). Unless the context otherwise requires, all references to the “Company,” “we,” “our” or “us” and other similar terms means TCG BDC, Inc.
We are filing this Amendment solely to correct calculations included on pages 58 and 60 of the Original Form 10-K relating to the Company’s weighted average yields for our total first and second lien debt based on the amortized cost and fair value as of December 31, 2020. In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended, this Amendment sets forth the complete text of Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, as amended.
Pursuant to Rule 12b-15, this Amendment No. 1 also contains new certifications for our Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and 18 U.S.C. Section 1350, which are attached as exhibits hereto. This Amendment does not include financial statements and accordingly, certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 have been omitted.
Except for the amendment and restatement of Part IV, Item 15 of the Original Form 10-K to include the new certifications referred to above and the above-mentioned changes to Item 7 of the Original Form 10-K, no other changes are made to the Original Form 10-K. The Original Form 10-K continues to speak as of the date of the Original Form 10-K and except as described above this Amendment does not reflect events occurring after the filing of the Original Form 10-K, nor does it modify or update in any way the disclosures contained in the Original Form 10-K. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Form 10-K.



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PART II
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (dollar amounts in thousands, except per share data, unless otherwise indicated)
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes in Part II, Item 8 of this Form 10-K “Financial Statements and Supplementary Data.” This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to those described in Part I, Item 1A of this Form 10-K “Risk Factors.” Our actual results could differ materially from those anticipated by such forward-looking information due to factors discussed under “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” appearing elsewhere in this Form 10-K.
OVERVIEW
We are a Maryland corporation formed on February 8, 2012, and structured as an externally managed, non-diversified closed-end investment company. We have elected to be regulated as a BDC under the Investment Company Act. We have elected to be treated, and intend to continue to comply with the requirements to qualify annually, as a RIC under Subchapter M of the Code.
Our investment objective is to generate current income and, to a lesser extent, capital appreciation primarily through secured debt investments in U.S. middle market companies. Our core investment strategy focuses on lending to U.S. middle market companies supported by financial sponsors, which we define as companies with approximately $25 million to $100 million of EBITDA, which we believe is a useful proxy for cash flow. This core strategy is supplemented with complementary specialty lending and opportunistic investing strategies, which take advantage of the broad capabilities of Carlyle's Global Credit platform while offering risk-diversifying portfolio benefits. We seek to achieve our investment objective primarily through direct originations of Middle Market Senior Loans, with a minority of our assets invested in higher yielding investments (which may include unsecured debt, mezzanine debt and investments in equities). We generally make Middle Market Senior Loans to private U.S. middle market companies that are, in many cases, controlled by private equity firms. Depending on market conditions, we expect that between 70% and 80% of the value of our assets will be invested in Middle Market Senior Loans. We expect that the composition of our portfolio will change over time given our Investment Adviser’s view on, among other things, the economic and credit environment (including with respect to interest rates) in which we are operating.
On June 19, 2017, we closed our IPO, issuing 9,454,200 shares of our common stock (including shares issued pursuant to the exercise of the underwriters’ over-allotment option on July 5, 2017) at a public offering price of $18.50 per share. Net of underwriting costs, we received cash proceeds of $169,488. Shares of common stock of TCG BDC began trading on the Nasdaq Global Select Market under the symbol “CGBD” on June 14, 2017.
On June 9, 2017, we acquired NF Investment Corp. (“NFIC”), a BDC managed by our Investment Advisor (the “NFIC Acquisition”). As a result, we issued 434,233 shares of common stock to the NFIC stockholders and approximately $145,602 in cash, and acquired approximately $153,648 in net assets.
We are externally managed by our Investment Adviser, an investment adviser registered under the Advisers Act. Our Administrator provides the administrative services necessary for us to operate. Both our Investment Adviser and our Administrator are wholly owned subsidiaries of Carlyle Investment Management L.L.C., a subsidiary of Carlyle. Our
Investment Adviser’s five-person investment committee is responsible for reviewing and approving our investment
opportunities. The members of the investment committee have experience investing through different credit cycles. As of
December 31, 2020, our Investment Adviser’s investment team included a team of 170 investment professionals
across the Carlyle Global Credit segment. Our Investment Adviser’s investment committee comprises five of the most senior credit professionals within the Global Credit segment, with backgrounds and expertise across asset classes and over 26 years of average industry experience and 10 years of average tenure. In addition, our Investment Adviser and its investment team are supported by a team of finance, operations and administrative professionals currently employed by Carlyle Employee Co., a wholly owned subsidiary of Carlyle.
In conducting our investment activities, we believe that we benefit from the significant scale and resources of Carlyle, including our Investment Adviser and its affiliates. We have operated our business as a BDC since we began our investment activities in May 2013.



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KEY COMPONENTS OF OUR RESULTS OF OPERATIONS
Investments
Our level of investment activity can and does vary substantially from period to period depending on many factors, including the amount of debt available to middle market companies, the general economic environment and the competitive environment for the type of investments we make.
Revenue
We generate revenue primarily in the form of interest income on debt investments we hold. In addition, we generate income from dividends on direct equity investments, capital gains on the sales of loans and debt and equity securities and various loan origination and other fees. Our debt investments generally have a stated term of five to eight years and generally bear interest at a floating rate usually determined on the basis of a benchmark such as LIBOR. Interest on these debt investments is generally paid quarterly. In some instances, we receive payments on our debt investments based on scheduled amortization of the outstanding balances. In addition, we receive repayments of some of our debt investments prior to their scheduled maturity date. The frequency or volume of these repayments fluctuates significantly from period to period. Our portfolio activity also reflects the proceeds of sales of securities. We may also generate revenue in the form of commitment, origination, amendment, structuring or due diligence fees, fees for providing managerial assistance and consulting fees.
Expenses
Our primary operating expenses include the payment of: (i) investment advisory fees, including base management fees and incentive fees, to our Investment Adviser pursuant to the Investment Advisory Agreement between us and our Investment Adviser; (ii) costs and other expenses and our allocable portion of overhead incurred by our Administrator in performing its administrative obligations under the Administration Agreement between us and our Administrator; and (iii) other operating expenses as detailed below:
administration fees payable under our Administration Agreement and Sub-Administration Agreements, including related expenses;
the costs of any offerings of our common stock and other securities, if any;
calculating individual asset values and our net asset value (including the cost and expenses of any independent valuation firms);
expenses, including travel expenses, incurred by our Investment Adviser, or members of our Investment Adviser team managing our investments, or payable to third parties, performing due diligence on prospective portfolio companies and, if necessary, expenses of enforcing our rights;
certain costs and expenses relating to distributions paid on our shares;
debt service and other costs of borrowings or other financing arrangements;
the allocated costs incurred by our Investment Adviser in providing managerial assistance to those portfolio companies that request it;
amounts payable to third parties relating to, or associated with, making or holding investments;
the costs associated with subscriptions to data service, research-related subscriptions and expenses and quotation equipment and services used in making or holding investments;
transfer agent and custodial fees;
costs of hedging;
commissions and other compensation payable to brokers or dealers;
federal and state registration fees;
any U.S. federal, state and local taxes, including any excise taxes;
independent director fees and expenses;
costs of preparing financial statements and maintaining books and records, costs of preparing tax returns, costs of Sarbanes-Oxley Act compliance and attestation and costs of filing reports or other documents with the SEC (or other regulatory bodies), and other reporting and compliance costs, including registration and listing fees, and the compensation of professionals responsible for the preparation or review of the foregoing;



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the costs of any reports, proxy statements or other notices to our stockholders (including printing and mailing costs), the costs of any stockholders’ meetings and the compensation of investor relations personnel responsible for the preparation of the foregoing and related matters;
the costs of specialty and custom software for monitoring risk, compliance and overall portfolio, including any development costs incurred prior to the filing of our election to be regulated as a BDC;
our fidelity bond;
directors and officers/errors and omissions liability insurance, and any other insurance premiums;
indemnification payments;
direct fees and expenses associated with independent audits, agency, consulting and legal costs; and
all other expenses incurred by us or our Administrator in connection with administering our business, including our allocable share of certain officers and their staff compensation.
We expect our general and administrative expenses to be relatively stable or to decline as a percentage of total assets during periods of asset growth and to increase during periods of asset declines.
PORTFOLIO AND INVESTMENT ACTIVITY
    Below is a summary of certain characteristics of our investment portfolio as of December 31, 2020, 2019 and 2018.
As of December 31,
202020192018
Count of investments160 136 119 
Count of portfolio companies / investment funds117 112 96 
Count of industries27 28 27 
Count of sponsors63 63 57 
Percentage of total investment fair value:
First lien debt (excluding first lien / last out debt)63.6 %74.6 %68.1 %
First lien / last out debt3.4 %3.7 %10.3 %
Second lien debt15.6 %11.0 %9.1 %
Total secured debt82.6 %89.3 %87.5 %
Investment Funds15.5 %9.6 %11.3 %
Equity investments1.9 %1.0 %1.3 %
Percentage of debt investment fair value:
Floating rate (1)
99.1 %99.7 %99.2 %
Fixed interest rate0.9 %0.3 %0.8 %
(1) Primarily subject to interest rate floors.



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Our investment activity for the years ended December 31, 2020, 2019 and 2018 is presented below (information presented herein is at amortized cost unless otherwise indicated):
 For the years ended December 31,
 202020192018
Investments:
Total investments, beginning of year$2,201,451 $2,043,591 $1,971,012 
New investments purchased705,743 1,000,467 950,255 
Net accretion of discount on investments8,186 12,955 12,814 
Net realized gain (loss) on investments(58,472)(38,376)(1,368)
Investments sold or repaid(933,942)(817,186)(889,122)
Total investments, end of year$1,922,966 $2,201,451 $2,043,591 
Principal amount of investments funded:
First Lien Debt (excluding First Lien/Last Out)$314,373 $653,217 $648,034 
First Lien/Last Out Debt30,866 73,272 23,507 
Second Lien Debt117,106 144,217 135,587 
Equity Investments12,233 5,436 5,302 
Investment Funds234,122 131,699 151,650 
Total$708,700 $1,007,841 $964,080 
Principal amount of investments sold or repaid:
First Lien Debt (excluding First Lien/Last Out)$(694,027)$(419,151)$(566,490)
First Lien/Last Out Debt(79,831)(204,702)(29,682)
Second Lien Debt(57,207)(88,695)(200,465)
Equity Investments(1,282)(3,070)(1,000)
Investment Funds(156,500)(145,200)(93,900)
Total$(988,847)$(860,818)$(891,537)
Number of new funded investments48 51 47 
Average amount of new funded investments$8,781 $19,617 $20,218 
Percentage of new funded debt investments at floating interest rates99 %99 %100 %
Percentage of new funded debt investments at fixed interest rates%%— %
As of December 31, 2020 and 2019, investments consisted of the following:
 December 31, 2020December 31, 2019
 Amortized CostFair ValueAmortized CostFair Value
First Lien Debt (excluding First Lien/Last Out)$1,234,579 $1,161,881 $1,649,721 $1,585,042 
First Lien/Last Out Debt63,575 62,182 78,951 78,096 
Second Lien Debt297,962 284,523 234,006 234,532 
Equity Investments32,754 33,877 22,272 21,698 
Investment Funds294,096 283,286 216,501 204,596 
Total$1,922,966 $1,825,749 $2,201,451 $2,123,964 



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The weighted average yields(1) for our first and second lien debt, based on the amortized cost and fair value as of December 31, 2020 and 2019, were as follows:
 December 31, 2020December 31, 2019
 Amortized CostFair ValueAmortized CostFair Value
First Lien Debt (excluding First Lien/Last Out)7.08 %7.53 %8.00 %8.17 %
First Lien/Last Out Debt9.65 %9.87 %6.63 %9.53 %
First Lien Debt Total7.21 %7.65 %7.91 %8.23 %
Second Lien Debt9.15 %9.59 %10.44 %10.42 %
First and Second Lien Debt Total7.57 %8.01 %8.22 %8.50 %
(1)Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of December 31, 2020 and 2019. Weighted average yield on debt and income producing securities at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at fair value included in such securities. Weighted average yield on debt and income producing securities at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at amortized cost included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above.
Total weighted average yields (which includes the effect of accretion of discount and amortization of premiums) of our first and second lien debt investments as measured on an amortized cost basis decreased from 8.22% to 7.57% from December 31, 2019 to December 31, 2020. The decrease in weighted average yields was primarily due to a decrease in the effective LIBOR rate applicable to loans in the portfolio, partially offset by a higher percentage of second lien debt in the portfolio.
The following table summarizes the fair value of our performing and non-accrual/non-performing investments as of December 31, 2020 and 2019:
 December 31, 2020December 31, 2019
 Fair ValuePercentageFair ValuePercentage
Performing$1,767,613 96.82 %$2,071,535 97.53 %
Non-accrual (1)
58,136 3.18 52,429 2.47 
Total$1,825,749 100.00 %$2,123,964 100.00 %
 
(1)For information regarding our non-accrual policy, see Note 2 to the consolidated financial statements included in Part II, Item 8 of this Form 10-K.
See the Consolidated Schedules of Investments as of December 31, 2020 and 2019 in our consolidated financial statements in Part II, Item 8 of this Form 10-K “Financial Statements and Supplementary Data” for more information on these investments, including a list of companies and type and amount of investments.
As part of the monitoring process, our Investment Adviser has developed risk assessment policies pursuant to which it regularly assesses the risk profile of each of our debt investments and rates each of them based on categories, which we refer to as “Internal Risk Ratings”. During the second quarter of 2020, our Investment Advisor reevaluated and revised its Internal Risk Ratings and policies across the Carlyle Direct Lending platform to more appropriately assess portfolio risk across all market conditions, including the current COVID-19 environment. The revised methodology incorporates greater focus on expectations for future company performance and industry outlook, and creates greater consistency in risk rating assignment across all investments by removing from the ratings methodology the direct tie of historical financial results to the "base case" projections derived at the time of our initial investment. Under the revised methodology, an Internal Risk Rating of 1 – 5, which are defined below, is assigned to each debt investment in our portfolio, compared to Internal Risk Ratings of 1 – 6 under the legacy methodology. Key drivers of internal risk rating used in the revised methodology are substantially the same as the legacy methodology, including financial metrics, financial covenants, liquidity and enterprise value coverage.



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Internal Risk Ratings Definitions
RatingDefinition
Borrower is operating above expectations, and the trends and risk factors are generally favorable.
Borrower is operating generally as expected or at an acceptable level of performance. The level of risk to our initial cost bases is similar to the risk to our initial cost basis at the time of origination. This is the initial risk rating assigned to all new borrowers.
Borrower is operating below expectations and level of risk to our cost basis has increased since the time of
origination. The borrower may be out of compliance with debt covenants. Payments are generally current although there may be higher risk of payment default.
Borrower is operating materially below expectations and the loan’s risk has increased materially since origination. In addition to the borrower being generally out of compliance with debt covenants, loan payments may be past due, but generally not by more than 120 days. It is anticipated that we may not recoup our initial cost basis and may realize a loss of our initial cost basis upon exit.
Borrower is operating substantially below expectations and the loan’s risk has increased substantially since origination. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. It is anticipated that we will not recoup our initial cost basis and may realize a substantial loss of our initial cost basis upon exit.
Our Investment Adviser monitors and, when appropriate, changes the investment ratings assigned to each debt investment in our portfolio. Our Investment Adviser reviews our investment ratings in connection with our quarterly valuation process. The below table summarizes the Internal Risk Ratings as of December 31, 2020. Given the forward-looking nature of certain elements of the revised methodology, it is impracticable to recast the risk ratings for the portfolio using the revised
methodology as of December 31, 2019.
 December 31, 2020
(dollar amounts in millions)Fair Value% of Fair Value
Internal Risk Rating 1$19.1 1.27 %
Internal Risk Rating 21,047.5 69.44 
Internal Risk Rating 3361.1 23.93 
Internal Risk Rating 448.1 3.19 
Internal Risk Rating 532.8 2.17 
Total$1,508.6 100.00 %
As of December 31, 2020, the weighted average Internal Risk Rating of our debt investment portfolio was 2.4. As of December 31, 2020, 6 of our debt investments, with an aggregate fair value of $80.9 million, were assigned an Internal Risk Rating of 4-5. As of December 31, 2020 and 2019, five and five first lien debt investments in the portfolio with a fair value of $58.1 million and $52.4 million, respectively, were on non-accrual status, which represented approximately 3.18% and 2.47%, respectively, of total investments at fair value. The remaining first and second lien debt investments were performing and current on their interest payments as of December 31, 2020 and 2019. 
CONSOLIDATED RESULTS OF OPERATIONS
For the years ended December 31, 2020, 2019 and 2018
The net increase or decrease in net assets from operations may vary substantially from period to period as a result of various factors, including the recognition of realized gains and losses and net change in unrealized appreciation and depreciation. As a result, quarterly comparisons may not be meaningful.



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Investment Income
Investment income for the years ended December 31, 2020, 2019 and 2018, was as follows:
 For the years ended December 31,
 202020192018
Investment income:
First Lien Debt$125,958 $168,750 $151,000 
Second Lien Debt29,851 24,203 27,678 
Equity Investments1,978 63 63 
Investment Funds24,277 27,931 28,490 
Cash54 351 295 
Total investment income$182,118 $221,298 $207,526 
The decrease in investment income for the year ended December 31, 2020 from the comparable period in 2019 was primarily driven by the impact of average LIBOR, lower weighted average loan balance, and the impact of loans on non-accrual status. As of December 31, 2020, the size of our portfolio decreased to $1,922,966 from $2,201,451 as of December 31, 2019 at amortized cost, and total principal amount of investments outstanding decreased to $1,930,782 from $2,207,949 as of December 31, 2019. As of December 31, 2020, the weighted average yield of our first and second lien debt decreased to 7.57% from 8.22% as of December 31, 2019, on amortized cost, primarily due to the decrease in LIBOR.
The increase in investment income for the year ended December 31, 2019 from the comparable period in 2018 was primarily driven by our increasing invested balance. The size of our portfolio increased to $2,201,451 as of December 31, 2019 from $2,043,591 as of December 31, 2018, at amortized cost, and total principal amount of investments outstanding increased to $2,207,949 as of December 31, 2019 from $2,073,835 as of December 31, 2018. As of December 31, 2019, the weighted average yield of our first and second lien debt decreased to 8.22% from 9.54% as of December 31, 2018, on amortized cost, primarily due to the decrease in LIBOR and loans placed on non-accrual status.
Interest income on our first and second lien debt investments is dependent on the composition and credit quality of the portfolio. Generally, we expect the portfolio to generate predictable quarterly interest income based on the terms stated in each loan’s credit agreement. As of December 31, 2020 and 2019, five and five first lien debt investments in the portfolio were on non-accrual with the fair value of $58,136 and $52,429, which represents approximately 3.18% and 2.47% of total investments at fair value, respectively. The remaining first and second lien debt investments were performing and current on their interest payments as of December 31, 2020 and 2019. As of December 31, 2018, two first lien debt investments in the portfolio were non-performing. The fair value of the loans in the portfolio on non-accrual status was $14,327, which represented approximately 0.73% of total investments at fair value. The remaining first and second lien debt investments were performing and current on their interest payments as of December 31, 2018 and for the year then ended.
Net investment income (loss) for the years ended December 31, 2020, 2019 and 2018 was as follows:
 For the years ended December 31,
 202020192018
Total investment income$182,118 $221,298 $207,526 
Net expenses (including Excise tax expense)(93,311)(113,633)(99,090)
Net investment income (loss)$88,807 $107,665 $108,436 



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Expenses
 For the years ended December 31,
 202020192018
Base management fees$28,648 $31,316 $29,626 
Incentive fees18,555 22,872 23,002 
Professional fees3,082 2,745 3,404 
Administrative service fees679 539 701 
Interest expense35,820 50,587 37,801 
Credit facility fees3,761 3,079 2,295 
Directors’ fees and expenses398 353 370 
Other general and administrative1,795 1,738 1,661 
Excise tax expense573 404 230 
Net expenses$93,311 $113,633 $99,090 
Interest expense and credit facility fees for the years ended December 31, 2020, 2019 and 2018 were comprised of the following:
 For the years ended December 31,
 202020192018
Interest expense$35,820 $50,587 $37,801 
Facility unused commitment fee1,766 1,263 1,260 
Amortization of deferred financing costs1,886 1,618 901 
Other fees109 198 134 
Total interest expense and credit facility fees$39,581 $53,666 $40,096 
Cash paid for interest expense$33,149 $49,981 $34,676 
Average principal debt outstanding$1,111,397 $1,125.547 $864.734 
Weighted average interest rate3.15 %4.41 %4.32 %
The decrease in interest expense for the year ended December 31, 2020 compared to the comparable period in 2019 was primarily driven by lower LIBOR.
The increase in interest expense for the year ended December 31, 2019 compared to the comparable period in 2018 was driven by increased drawings under the Facilities related to increased deployment of capital for investments.
Below is a summary of the base management fees and incentive fees incurred during the years ended December 31, 2020, 2019 and 2018:
For the years ended December 31,
202020192018
Base management fees$28,648 $31,316 $29,626 
Incentive fees on pre-incentive fee net investment income18,555 22,872 23,002 
Realized capital gains incentive fees— — — 
Accrued capital gains incentive fees— — — 
Total capital gains incentive fees— — — 
Total incentive fees18,555 22,872 23,002 
Total base management fees and incentive fees$47,203 $54,188 $52,628 
The decrease in base management fees for the year ended December 31, 2020 from the comparable period in 2019 was driven by lower weighted average loan balance. The decrease in incentive fees for the year ended December 31, 2020 from the comparable period in 2019 was driven by lower pre-incentive fee net investment income. The increase in base management fees for the year ended December 31, 2019 from the comparable period in 2018 was driven by our deployment of capital.



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For the years ended December 31, 2020, 2019 and 2018, we recorded no accrued capital gains incentive fees based upon our cumulative net realized and unrealized appreciation (depreciation) as of December 31, 2020, 2019 and 2018, respectively. The accrual for any capital gains incentive fee under accounting principles generally accepted in the United States (“U.S. GAAP”) in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. See Note 4 to the consolidated financial statements included in Part II, Item 8 of this Form 10-K for more information on our incentive and base management fees.
Professional fees include legal, rating agencies, audit, tax, valuation, technology and other professional fees incurred related to the management of us. Administrative service fees represent fees paid to the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the administration agreement, including our allocable portion of the cost of certain of our executive officers and their respective staff. Other general and administrative expenses include insurance, filing, research, subscriptions and other costs.
Net Realized Gain (Loss) and Net Change in Unrealized Appreciation (Depreciation) on Investments
During the years ended December 31, 2020, 2019 and 2018, we had realized gains on 9, 15, and 4 investments, respectively, totaling approximately $1,473, $14,719, and $3,534, respectively, which was offset by realized losses on 20, 13, and 6 investments, respectively, totaling approximately $59,946, $53,062, and $4,902, respectively. During the years ended December 31, 2020, 2019 and 2018, we had a change in unrealized appreciation on 78, 91, and 40 investments, respectively, totaling approximately $65,851, $70,167, and $14,680, respectively, which was offset by a change in unrealized depreciation on 97, 71, and 105 investments, respectively, totaling approximately $85,507, $76,220, and $82,633, respectively.
During October 2020, Direct Travel, Inc. ("Direct Travel") completed a restructuring whereby the lenders received the majority of the equity in Direct Travel, but maintained the principal balance in the existing debt. As part of the transaction, the lenders also provided a delayed draw term loan facility to support ongoing liquidity of the business. As part of the restructuring, we received an approximate 9% ownership stake in Direct Travel.

During October 2020, Central Security Group, Inc. completed a restructuring whereby a portion of the first lien debt held by us was exchanged into common equity. As a result, $8,566 of unrealized depreciation was reversed and we
realized a loss of $8,562 during the year ended December 31, 2020.
During April 2019, SolAero Technologies Corp. ("SolAero") completed a restructuring whereby a portion of the first lien debt held by us was exchanged into common equity. As a result, $9,460 of unrealized depreciation was reversed and we realized a loss of $9,102 during the year ended December 31, 2019. On December 31, 2019, we wrote off our remaining balance in the Product Quest Manufacturing, LLC ("Product Quest") first lien/last out, given our expectation of zero recovery. As a result, $32,270 of unrealized depreciation was reversed and we realized a loss of $32,270 during the year ended December 31, 2019. Additionally, during October 2019, we exited our equity investment in Twenty-Eighty, Inc. ("Twenty-Eighty"). As a result, $4,391 of unrealized appreciation was reversed and we realized a gain of $7,990 during the year ended December 31, 2019.
During September 2018, Tweddle Group, Inc. completed a restructuring whereby a portion of the first lien debt held by us was exchanged into common equity. As a result, $3,832 of unrealized depreciation was reversed and we realized a loss of $4,087 during the year ended December 31, 2018.
Net realized gain (loss) and net change in unrealized appreciation (depreciation) for the years ended December 31, 2020, 2019 and 2018 were as follows:
 For the years ended December 31,
 202020192018
Net realized gain (loss) on investments$(58,473)$(38,376)$(1,368)
Net change in unrealized appreciation (depreciation) on investments(19,656)(6,053)(67,953)
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments$(78,129)$(44,429)$(69,321)



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Net realized gain (loss) and net change in unrealized appreciation (depreciation) by the type of investments for the years ended December 31, 2020, 2019 and 2018 were as follows:
 For the years ended December 31,
 202020192018
TypeNet realized gain (loss)Net change in unrealized appreciation (depreciation)Net realized gain (loss)Net change in unrealized appreciation (depreciation)Net realized gain (loss)Net change in unrealized appreciation (depreciation)
First Lien Debt$(58,766)$(8,557)$(52,633)$4,894 $(4,903)$(59,374)
Second Lien Debt(228)(13,965)— 1,003 (3,822)
Equity Investments522 1,697 14,257 (7,751)3,533 3,214 
Investment Funds— (3,104)— (4,199)— (7,971)
Total$(58,472)$(23,929)$(38,376)$(6,053)$(1,368)$(67,953)
Net change in unrealized depreciation in our investments for the year ended December 31, 2020 compared to the comparable period in 2019 was primarily driven by unrealized depreciation related to investments more heavily impacted by the COVID-19 pandemic, combined with higher market yields. Net change in unrealized depreciation in our investments for the year ended December 31, 2019 compared to the comparable period in 2018 was primarily due to the unrealized depreciation in Dimensional Dental Management, LLC and Dermatology Associates, offset by the reversal of prior period unrealized depreciation on Product Quest Manufacturing, LLC and SolAero Technologies Corp. Net change in unrealized appreciation (depreciation) is also driven by changes in other inputs utilized under our valuation methodology, including, but not limited to, market spreads, enterprise value multiples, borrower leverage multiples and borrower ratings, and the impact of exits.
MIDDLE MARKET CREDIT FUND, LLC
Overview
On February 29, 2016, the Company and Credit Partners entered into an amended and restated limited liability company agreement, which was subsequently amended and restated on June 24, 2016 and February 22, 2021 (as amended, the “Limited Liability Company Agreement”) to co-manage Credit Fund, a Delaware limited liability company that is not consolidated in the Company’s consolidated financial statements. Credit Fund primarily invests in first lien loans of middle market companies. Credit Fund is managed by a six-member board of managers, on which the Company and Credit Partners each have equal representation. Establishing a quorum for Credit Fund’s board of managers requires at least four members to be present at a meeting, including at least two of the Company’s representatives and two of Credit Partners’ representatives. The Company and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $250,000 each. Funding of such commitments generally requires the approval of the board of Credit Fund, including the board members appointed by the Company. By virtue of its membership interest, the Company and Credit Partners each indirectly bear an allocable share of all expenses and other obligations of Credit Fund.
Together with Credit Partners, the Company co-invests through Credit Fund. Investment opportunities for Credit Fund are sourced primarily by the Company and its affiliates. Portfolio and investment decisions with respect to Credit Fund must be unanimously approved by a quorum of Credit Fund’s investment committee consisting of an equal number of representatives of the Company and Credit Partners. Therefore, although the Company owns more than 25% of the voting securities of Credit Fund, the Company does not believe that it has control over Credit Fund (other than for purposes of the Investment Company Act). Middle Market Credit Fund SPV, LLC (the “Credit Fund Sub”), MMCF CLO 2017-1 LLC (the “2017-1 Issuer”), MMCF CLO 2019-2, LLC (the "2019-2 Issuer", formerly known as MMCF Warehouse, LLC (the "Credit Fund Warehouse")) and MMCF Warehouse II, LLC (the "Credit Fund Warehouse II"), each a Delaware limited liability company, were formed on April 5, 2016 and October 6, 2017, November 26, 2018 and August 16, 2019, respectively. Credit Fund Sub, the 2019-2 Issuer, and Credit Fund Warehouse II are wholly owned subsidiaries of Credit Fund and are consolidated in Credit Fund’s consolidated financial statements commencing from the date of their respective formations. In December 2020, the 2017-1 Issuer was redeemed in full and notes outstanding were repaid in full. Credit Fund Sub, the 2019-2 Issuer and Credit Fund Warehouse II primarily invest in first lien loans of middle market companies. Credit Fund and its wholly owned subsidiaries follow the same Internal Risk Rating System as the Company. Refer to "Debt" below for discussions regarding the credit facilities entered into and the notes issued by such wholly-owned subsidiaries.
Credit Fund, the Company and Credit Partners entered into an administration agreement with Carlyle Global Credit Administration L.L.C., the administrative agent of Credit Fund (in such capacity, the “Credit Fund Administrative Agent”), pursuant to which the Credit Fund Administrative Agent is delegated certain administrative and non-discretionary functions, is authorized to enter into sub-administration agreements at the expense of Credit Fund with the approval of the board of



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managers of Credit Fund, and is reimbursed by Credit Fund for its costs and expenses and Credit Fund’s allocable portion of overhead incurred by the Credit Fund Administrative Agent in performing its obligations thereunder.
Selected Financial Data
Since inception of Credit Fund and through December 31, 2020 and 2019, the Company and Credit Partners each made capital contributions of $1 and $1 in members’ equity, respectively, and $216,000 and $123,500 in subordinated loans, respectively, to Credit Fund. Below is certain summarized consolidated information for Credit Fund as of December 31, 2020 and 2019.
As of December 31,
20202019
ASSETS
Investments, at fair value (amortized cost of $1,080,538 and $1,258,157,respectively)$1,056,381 $1,246,839 
Cash and cash equivalents119,796 64,787 
Other assets7,553 9,369 
Total assets$1,183,730 $1,320,995 
LIABILITIES AND MEMBERS’ EQUITY
Secured borrowings$514,261 $441,077 
Notes payable, net of unamortized debt issuance costs of $1,559 and $3,441, respectively)253,933 528,407 
Mezzanine loans (1)
— 93,000 
Other liabilities15,543 32,383 
Subordinated loans and members’ equity (1)
399,993 226,128 
Total liabilities and members’ equity$1,183,730 $1,320,995 
(1) As of December 31, 2020 and 2019, the fair value of the Company's ownership interest in the subordinated loans and members' equity was $205,891 and $111,596, respectively, and $0 and $93,000, respectively in the mezzanine loans.
For the Years Ended December 31,
20202019
Total investment income$83,476 $94,092 
Expenses
Interest and credit facility expenses40,238 59,228 
Other expenses2,034 2,230 
Total expenses42,272 61,458 
Net investment income (loss)41,204 32,634 
Net realized gain (loss) on investments— (8,285)
Net change in unrealized appreciation (depreciation) on investments(12,839)13,711 
Net increase (decrease) resulting from operations$28,365 $38,060 



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Below is a summary of Credit Fund’s portfolio, followed by a listing of the loans in Credit Fund’s portfolio as of December 31, 2020 and 2019:
As of December 31,
 20202019
Senior secured loans (1)
$1,084,491 $1,260,582 
Weighted average yields of senior secured loans based on amortized cost (2)
6.03 %6.51 %
Weighted average yields of senior secured loans based on fair value (2)
6.15 %6.55 %
Number of portfolio companies in Credit Fund54 61 
Average amount per portfolio company (1)
$20,083 $20,665 
Number of loans on non-accrual status— 
Fair value of loans on non-accrual status$— $21,150 
Percentage of loans at floating interest rates (3) (4)
97.7 %98.3 %
Percentage of loans at fixed interest rates (4)
2.3 %1.7 %
Fair value of loans with PIK provisions$24,113 $21,150 
Percentage of portfolio with PIK provisions (4)
2.3 %1.7 %
(1)At par/principal amount.
(2)Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of December 31, 2020 and 2019. Weighted average yield on debt and income producing securities at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at fair value included in such securities. Weighted average yield on debt and income producing securities at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at amortized cost included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above.
(3)Floating rate debt investments are generally subject to interest rate floors.
(4)Percentages based on fair value.




Table of Contents
Consolidated Schedule of Investments as of December 31, 2020
Investments (1)
Footnotes
Industry
Reference Rate & Spread (2)
Interest 
Rate (2)
Maturity
Date
Par/
Principal
Amount
Amortized
Cost (4)
Fair
Value (55)
First Lien Debt (97.47% of fair value)
Acrisure, LLC\#(2)(3)Banking, Finance, Insurance & Real EstateL + 3.50%3.65%2/15/2027$25,634 $25,606 $25,104 
Alku, LLC+#(2)(3)Business ServicesL + 5.50%5.75%7/29/202623,666 23,466 23,512 
Alpha Packaging Holdings, Inc.+\(2)(3)Containers, Packaging & GlassL + 6.00%7.00%11/12/202116,378 16,378 16,378 
AmeriLife Holdings LLC#(2)(3)Banking, Finance, Insurance & Real EstateL + 4.00%4.15%3/18/20279,951 9,929 9,802 
Analogic Corporation^+(2)(3)(6)Capital EquipmentL + 5.25%6.25%6/22/202418,857 18,837 18,857 
Anchor Packaging, Inc.+#(2)(3)Containers, Packaging & GlassL + 4.00%4.15%7/18/202624,723 24,617 24,656 
API Technologies Corp.+\(2)(3)Aerospace & DefenseL + 4.25%4.49%5/9/202614,775 14,713 13,999 
Aptean, Inc.+\(2)(3)SoftwareL + 4.25%4.40%4/23/202612,281 12,227 12,077 
AQA Acquisition Holding, Inc.+\(2)(3)(6)High Tech IndustriesL + 4.25%5.25%5/24/202318,759 18,752 18,757 
Astra Acquisition Corp.+#(2)(3)SoftwareL + 5.50%6.50%3/1/202728,783 28,392 28,783 
Avalign Technologies, Inc.+\(2)(3)Healthcare & PharmaceuticalsL + 4.50%4.73%12/22/202514,592 14,481 14,334 
Big Ass Fans, LLC+\#(2)(3)Capital EquipmentL + 3.75%4.75%5/21/202413,766 13,714 13,766 
BK Medical Holding Company, Inc.^+(2)(3)(6)Healthcare & PharmaceuticalsL + 5.25%6.25%6/22/202424,165 23,951 22,363 
Chemical Computing Group ULC (Canada)^+(2)(3)(6)SoftwareL + 5.00%6.00%8/30/202314,055 13,378 14,055 
Clarity Telecom LLC.+(2)(3)Media: Broadcasting & SubscriptionL + 4.25%4.40%8/30/202614,813 14,773 14,813 
Clearent Newco, LLC^(2)(3)(6)High Tech IndustriesL + 6.50%7.50%3/20/20254,079 4,079 3,907 
Clearent Newco, LLC^+\(2)(3)High Tech IndustriesL + 5.50%7.50%3/20/202529,486 29,236 28,722 
DecoPac, Inc.^+\(2)(3)(6)Non-durable Consumer GoodsL + 4.25%5.25%9/29/202412,336 12,253 12,318 
Diligent Corporation^+(2)(3)(6)TelecommunicationsL + 6.25%7.25%8/4/20258,683 8,411 8,819 
DTI Holdco, Inc.^+\(2)(3)High Tech IndustriesL + 4.75%5.75%9/30/202318,690 18,642 16,655 
Eliassen Group, LLC+\(2)(3)Business ServicesL + 4.25%4.40%11/5/20247,543 7,516 7,483 
EvolveIP, LLC^+(2)(3)(6)TelecommunicationsL + 5.75%6.75%6/7/202319,800 19,759 19,775 
Exactech, Inc.+\#(2)(3)Healthcare & PharmaceuticalsL + 3.75%4.75%2/14/202521,528 21,416 20,422 
Excel Fitness Holdings, Inc.+#(2)(3)Hotel, Gaming & LeisureL + 5.25%6.25%10/7/202524,750 24,546 22,780 
Frontline Technologies Holdings, LLC+(2)(3)SoftwareL + 5.75%6.75%9/18/202314,886 14,198 14,589 
Golden West Packaging Group LLC+\(2)(3)Containers, Packaging & GlassL + 5.25%6.25%6/20/202329,012 28,896 28,974 
HMT Holding Inc.+\(2)(3)(6)Energy: Oil & GasL + 5.00%6.00%11/17/202332,821 32,458 30,984 
Integrity Marketing Acquisition, LLC^+(2)(3)(6)Banking, Finance, Insurance & Real EstateL + 6.25%7.25%8/27/20257,836 7,701 7,956 
Jensen Hughes, Inc.+\(2)(3)(6)Utilities: ElectricL + 4.50%5.50%3/22/202434,584 34,489 33,424 
KAMC Holdings, Inc.+#(2)(3)Energy: ElectricityL + 4.00%4.23%8/14/202613,825 13,768 12,531 
KBP Investments, LLC^+(2)(3)(6)Beverage, Food & TobaccoL + 5.00%6.00%5/15/20239,292 9,059 9,350 
Marco Technologies, LLC^+\(2)(3)(6)Media: Advertising, Printing & PublishingL + 4.00%5.00%10/30/20237,332 7,293 7,332 
Mold-Rite Plastics, LLC+\(2)(3)Chemicals, Plastics & RubberL + 4.25%5.25%12/14/202114,520 14,501 14,520 



Table of Contents
Consolidated Schedule of Investments as of December 31, 2020
Investments (1)
Footnotes
Industry
Reference Rate & Spread (2)
Interest 
Rate (2)
Maturity
Date
Par/
Principal
Amount
Amortized
Cost (4)
Fair
Value (55)
Newport Group Holdings II, Inc.+\#(2)(3)Banking, Finance, Insurance & Real EstateL + 3.50%3.75%9/13/202523,475 23,285 23,405 
Odyssey Logistics & Technology Corp.+\#(2)(3)Transportation: CargoL + 4.00%5.00%10/12/2024$38,897 $38,773 $37,766 
Output Services Group^+\(2)(3)Media: Advertising, Printing & PublishingL + 4.50%5.50%3/27/202419,421 19,382 14,178 
Pasternack Enterprises, Inc.+\(2)(3)Capital EquipmentL + 4.00%5.00%7/2/202522,524 22,513 22,218 
Pharmalogic Holdings Corp.+\(2)(3)Healthcare & PharmaceuticalsL + 4.00%5.00%6/11/202311,205 11,189 11,158 
Premise Health Holding Corp.+\#(2)(3)Healthcare & PharmaceuticalsL + 3.50%3.75%7/10/202513,584 13,538 13,503 
Propel Insurance Agency, LLC^+\(2)(3)(6)Banking, Finance, Insurance & Real EstateL + 5.00%6.00%6/1/202438,134 37,662 37,716 
Q Holding Company+\#(2)(3)AutomotiveL + 5.00%6.00%12/31/202321,735 21,604 20,229 
QW Holding Corporation+(2)(3)(6)Environmental IndustriesL + 6.25%7.25%8/31/202211,566 11,465 10,727 
Radiology Partners, Inc.+\#(2)(3)Healthcare & PharmaceuticalsL + 4.25%4.81%7/9/202527,686 27,581 27,193 
RevSpring Inc.+\#(2)(3)Media: Advertising, Printing & PublishingL + 4.25%4.40%10/11/202529,449 29,265 29,199 
Situs Group Holdings Corporation+\(2)(3)Banking, Finance, Insurance & Real EstateL + 4.75%5.75%6/28/202514,781 14,689 14,636 
T2 Systems, Inc.^+(2)(3)(6)Transportation: ConsumerL + 6.75%7.75%9/28/202229,119 28,743 29,118 
The Original Cakerie, Ltd. (Canada)+\(2)(3)(6)Beverage, Food & TobaccoL + 4.50%5.50%7/20/20226,295 6,281 6,289 
The Original Cakerie, Ltd. (Canada)+(2)(3)Beverage, Food & TobaccoL + 5.00%6.00%7/20/20228,837 8,815 8,829 
Thoughtworks, Inc.\#(2)(3)Business ServicesL + 3.75%4.75%10/11/202411,704 11,683 11,704 
U.S. Acute Care Solutions, LLC+\(2)(3)Healthcare & PharmaceuticalsL + 6.00%7.00%5/15/202131,211 31,184 29,104 
U.S. TelePacific Holdings Corp.+\(2)(3)TelecommunicationsL + 5.50%6.50%5/2/202326,660 26,585 23,984 
VRC Companies, LLC+(2)(3)(6)Business ServicesL + 6.50%7.50%3/31/202330,582 29,464 30,582 
Water Holdings Acquisition LLC^+(2)(3)(6)Utilities: Water L + 5.25%6.25%12/18/202626,316 25,520 25,516 
Welocalize, Inc.+(2)(3)(6)Business ServicesL + 4.50%5.50%12/23/202322,629 22,414 22,584 
WRE Holding Corp.^+(2)(3)(6)Environmental IndustriesL + 5.25%6.25%1/3/20238,367 8,336 8,252 
First Lien Debt Total
$1,051,406 $1,029,687 
Second Lien Debt (2.28% of fair value)
DBI Holding, LLC^(2)Transportation: Cargo9.00% PIK9.00%2/1/2026$24,113 $23,768 $24,113 
Second Lien Debt Total
$23,768 $24,113 
Equity Investments (0.24% of fair value)
DBI Holding, LLC^Transportation: Cargo2,961 $— $— 
DBI Holding, LLC^Transportation: Cargo13,996 5,364 2,581 
Equity Investments Total$5,364 $2,581 
Total Investments
$1,080,538 $1,056,381 
^ Denotes that all or a portion of the assets are owned by Credit Fund. Credit Fund has entered into a revolving credit facility (the "Credit Fund Facility"). Accordingly, such assets are not available to creditors of Credit Fund Sub, the 2019-2 Issuer or Credit Fund Warehouse II.
+ Denotes that all or a portion of the assets are owned by Credit Fund Sub. Credit Fund Sub has entered into a revolving credit facility (the “Credit Fund Sub Facility”). The lenders of the Credit Fund Sub Facility have a first lien security interest in substantially all of the assets of Credit Fund Sub. Accordingly, such assets are not available to creditors of Credit Fund, the 2019-2 Issuer or Credit Fund Warehouse II.
\ Denotes that all or a portion of the assets are owned by the 2019-2 Issuer and secure the notes issued in connection with a $399,900 term debt securitization completed by Credit Fund on May 21, 2019 (the “2019-2 Debt Securitization”). Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub, or Credit Fund Warehouse II.



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# Denotes that all or a portion of the assets are owned by the Credit Fund Warehouse II. Credit Fund Warehouse II has entered into a revolving credit facility (the "Credit Fund Warehouse II"). The lenders of the Credit Fund Warehouse II Facility have a first lien security interest in substantially all of the assets of the Credit Fund Warehouse II. Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub, or 2019-2 Issuer.
(1)Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States. As of December 31, 2020, the geographical composition of investments as a percentage of fair value was 2.76% in Canada and 97.24% in the United States. Certain portfolio company investments are subject to contractual restrictions on sales.
(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, Credit Fund has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2020. As of December 31, 2020, the reference rates for Credit Fund's variable rate loans were the 30-day LIBOR at 0.15%, the 90-day LIBOR at 0.25% and the 180-day LIBOR at 0.26%.
(3)Loan includes interest rate floor feature, which is generally 1.00%.
(4)Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.
(5)Fair value is determined in good faith by or under the direction of the board of managers of Credit Fund, pursuant to Credit Fund’s valuation policy, with the fair value of all investments determined using significant unobservable inputs, which is substantially similar to the valuation policy of the Company provided in Note 3, Fair Value Measurements, to the consolidated financial statements in Part II, Item 8 of this Form 10-K.
(6)As of December 31, 2020, Credit Fund and Credit Fund Sub had the following unfunded commitments to fund delayed draw and revolving senior secured loans:
First Lien Debt – unfunded delayed draw and revolving term loans commitmentsTypeUnused FeePar/ Principal AmountFair Value
Analogic CorporationRevolver0.50 %$1,975 $— 
AQA Acquisition Holding, Inc.Revolver0.50 2,459 — 
BK Medical Holding Company, Inc.Revolver0.50 2,609 (176)
Chemical Computing Group ULC (Canada)Revolver0.50 873 — 
Clearent Newco, LLCDelayed Draw1.00 2,549 (66)
DecoPac, Inc.Revolver0.50 2,143 (3)
Diligent CorporationDelayed Draw1.00 2,109 25 
Diligent CorporationRevolver0.50 703 
EvolveIP, LLCDelayed Draw1.00 1,904 (2)
EvolveIP, LLCRevolver0.50 1,680 (2)
HMT Holding Inc.Revolver0.50 6,173 (291)
Integrity Marketing Acquistion, LLCDelayed Draw1.00 4,144 41 
Jensen Hughes, Inc.Delayed Draw1.00 1,127 (35)
Jensen Hughes, Inc.Revolver0.50 1,364 (43)
KBP Investments, LLCDelayed Draw1.00 503 
KBP Investments, LLCDelayed Draw1.00 10,190 30 
Marco Technologies, LLCDelayed Draw1.00 7,500 — 
Propel Insurance Agency, LLCRevolver0.50 1,905 (19)
Propel Insurance Agency, LLCDelayed Draw1.00 1,733 (17)
QW Holding CorporationRevolver0.50 5,498 (268)
QW Holding CorporationDelayed Draw1.00 161 (8)
T2 Systems, Inc.Revolver0.50 1,955 — 
The Original Cakerie, Ltd. (Canada)Revolver0.50 1,665 (1)
VRC Companies, LLCRevolver0.50 858 — 
Water Holdings Acquisition LLCDelayed Draw1.00 8,421 (168)
Water Holdings Acquisition LLCRevolver0.50 5,263 (105)
Welocalize, Inc.Revolver0.50 2,250 (4)
WRE Holding Corp.Revolver0.50 852 (10)
WRE Holding Corp.Delayed Draw1.00 563 (7)
Total unfunded commitments$81,129 $(1,120)








Table of Contents

Consolidated Schedule of Investments as of December 31, 2019
Investments (1)
Footnotes
Industry
Reference Rate & Spread (2)
Interest 
Rate (2)
Maturity
Date
Par/
Principal
Amount
Amortized
Cost (5)
Fair
Value (6)
First Lien Debt (98.11% of fair value)
Achilles Acquisition, LLC\+#(2) (3) Banking, Finance, Insurance & Real EstateL + 4.00%5.75%10/13/2025$17,865 $17,776 $17,763 
Acrisure, LLC+\(2) (3) Banking, Finance, Insurance & Real EstateL + 3.75%5.85%11/22/202311,820 11,810 11,805 
Acrisure, LLC+\#(2) (3) Banking, Finance, Insurance & Real EstateL + 4.25%6.35%11/22/202320,674 20,639 20,674 
Advanced Instruments, LLC^+\*(2) (3) (7)Healthcare & PharmaceuticalsL + 5.25%6.99%10/31/202235,610 35,536 35,466 
Alku, LLC+#(2) (3) Business ServicesL + 5.50%7.44%7/29/202625,000 24,754 24,624 
Alpha Packaging Holdings, Inc.+*\(2) (3) Containers, Packaging & GlassL + 4.25%6.35%5/12/202016,684 16,676 16,601 
AmeriLife Group, LLC^#(2) (3) (7)Banking, Finance, Insurance & Real EstateL + 4.50%6.20%6/5/202616,627 16,557 16,558 
Anchor Packaging, Inc.^#(2) (3) (7)Containers, Packaging & GlassL + 4.00%5.70%7/18/202620,462 20,363 20,457 
API Technologies Corp.\+(2) (3) Aerospace & DefenseL + 4.25%5.95%5/9/202614,925 14,853 14,807 
Aptean, Inc.+\(2) (3) SoftwareL + 4.25%6.34%4/23/202612,406 12,344 12,385 
AQA Acquisition Holding, Inc.^*\(2) (3) (7)High Tech IndustriesL + 4.25%6.16%5/24/202318,954 18,922 18,860 
Avalign Technologies, Inc.+\(2) (3) Healthcare & PharmaceuticalsL + 4.50%6.70%12/22/202514,741 14,610 14,626 
Big Ass Fans, LLC+*\(2) (3) Capital EquipmentL + 3.75%5.85%5/21/202413,909 13,841 13,903 
Borchers, Inc.+*\(2) (3) (7)Chemicals, Plastics & RubberL + 4.50%6.60%11/1/202415,116 15,072 15,085 
Brooks Equipment Company, LLC*(2) (3) Construction & BuildingL + 5.00%6.91%8/29/20205,144 5,141 5,141 
Clarity Telecom LLC.+(2) (3) Media: Broadcasting & SubscriptionL + 4.50%6.20%8/30/202614,963 14,915 14,902 
Clearent Newco, LLC^+\(2) (3) (7)High Tech IndustriesL + 5.50%7.44%3/20/202529,738 29,436 29,134 
Datto, Inc.+\(2) (3) High Tech IndustriesL + 4.25%5.95%4/2/202612,438 12,375 12,420 
DecoPac, Inc.+*\(2) (3) (7)Non-durable Consumer GoodsL + 4.25%6.01%9/29/202412,336 12,233 12,292 
Dent Wizard International Corporation+\(2) (3) AutomotiveL + 4.00%5.70%4/7/202036,880 36,843 36,717 
DTI Holdco, Inc.+*\(2) (3) High Tech IndustriesL + 4.75%6.68%9/30/202318,885 18,771 17,611 
Eliassen Group, LLC+\(2) (3) Business ServicesL + 4.50%6.20%11/5/20247,581 7,548 7,579 
EIP Merger Sub, LLC (Evolve IP)+^(2) (3) (7)TelecommunicationsL + 5.75%7.45%6/7/202319,661 19,605 19,661 
Exactech, Inc.+\#(2) (3) Healthcare & PharmaceuticalsL + 3.75%5.45%2/14/202521,772 21,634 21,751 
Excel Fitness Holdings, Inc.+#(2) (3) Hotel, Gaming & LeisureL + 5.25%6.95%10/7/202525,000 24,758 24,875 
Golden West Packaging Group LLC+*\(2) (3) Containers, Packaging & GlassL + 5.75%7.45%6/20/202329,464 29,303 29,072 
HMT Holding Inc.^+*\(2) (3) (7)Energy: Oil & GasL + 5.00%6.74%11/17/202333,157 32,678 32,972 
Jensen Hughes, Inc.\+^*(2) (3) (7)Utilities: ElectricL + 4.50%6.24%3/22/202433,909 33,757 33,550 
KAMC Holdings, Inc.+#(2) (3) Energy: ElectricityL + 4.00%5.91%8/14/202613,965 13,899 13,881 
MAG DS Corp.^+\(2) (3) (7)Aerospace & DefenseL + 4.75%6.46%6/6/202528,471 28,242 28,286 
Maravai Intermediate Holdings, LLC+\#(2) (3) Healthcare & PharmaceuticalsL + 4.25%6.00%8/2/202529,625 29,378 29,400 
Marco Technologies, LLC^+\(2) (3) (7) Media: Advertising, Printing & PublishingL + 4.25%6.16%10/30/20237,463 7,410 7,463 



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Consolidated Schedule of Investments as of December 31, 2019
Investments (1)
Footnotes
Industry
Reference Rate & Spread (2)
Interest 
Rate (2)
Maturity
Date
Par/
Principal
Amount
Amortized
Cost (5)
Fair
Value (6)
Mold-Rite Plastics, LLC+\(2) (3) Chemicals, Plastics & RubberL + 4.25%5.95%12/14/2021$14,557 $14,519 $14,524 
MSHC, Inc.^+*\(2) (3) (7)Construction & BuildingL + 4.25%5.95%12/31/202438,251 38,138 38,166 
Newport Group Holdings II, Inc.\+#(2) (3) Banking, Finance, Insurance & Real EstateL + 3.75%5.65%9/13/202523,715 23,487 23,663 
Odyssey Logistics & Technology Corp.+*\#(2) (3) Transportation: CargoL + 4.00%5.70%10/12/202439,013 38,859 38,763 
Output Services Group^+\(2) (3) (7)Media: Advertising, Printing & PublishingL + 4.50%6.20%3/27/202419,621 19,570 19,469 
PAI Holdco, Inc.+*\(2) (3) AutomotiveL + 4.25%6.35%1/5/202519,532 19,458 19,532 
Park Place Technologies, Inc.+\#(2) (3) High Tech IndustriesL + 4.00%5.70%3/28/202522,566 22,489 22,566 
Pasternack Enterprises, Inc.+\(2) (3) Capital EquipmentL + 4.00%5.70%7/2/202522,755 22,742 22,653 
Pathway Vet Alliance LLC+\(2) (3) (7)Consumer ServicesL + 4.50%6.21%12/20/202419,085 18,708 19,217 
Pharmalogic Holdings Corp.+\(2) (3) Healthcare & PharmaceuticalsL + 4.00%5.70%6/11/202311,320 11,296 11,302 
Premise Health Holding Corp.^+\#(2) (3) (7)Healthcare & PharmaceuticalsL + 3.50%5.60%7/10/202513,723 13,665 13,501 
Propel Insurance Agency, LLC^+\(2) (3) (7)Banking, Finance, Insurance & Real EstateL + 4.25%6.35%6/1/202422,532 22,056 22,395 
Q Holding Company+*\#(2) (3) AutomotiveL + 5.00%6.70%12/31/202321,955 21,777 21,922 
QW Holding Corporation (Quala)^+*(2) (3) (7)Environmental IndustriesL + 5.75%7.73%8/31/202211,630 11,449 11,531 
Radiology Partners, Inc.+\#(2) (3) Healthcare & PharmaceuticalsL + 4.75%6.66%7/9/202528,719 28,590 28,768 
RevSpring Inc.+*\#(2) (3) Media: Advertising, Printing & PublishingL + 4.00%5.95%10/11/202524,750 24,631 24,608 
Situs Group Holdings Corporation\+^(2) (3) (7)Banking, Finance, Insurance & Real EstateL + 4.75%6.45%6/28/202513,715 13,621 13,697 
Systems Maintenance Services Holding, Inc.+*(2) (3) High Tech IndustriesL + 5.00%6.70%10/30/202323,765 23,672 18,180 
Surgical Information Systems, LLC+*\(2) (3) (6) High Tech IndustriesL + 4.75%7.47%4/24/202326,168 26,005 25,715 
T2 Systems, Inc.^+*(2) (3) (7)Transportation: ConsumerL + 6.75%8.85%9/28/202218,045 17,789 18,045 
The Original Cakerie, Ltd. (Canada)+*(2) (3) (7) Beverage, Food & TobaccoL + 5.00%6.84%7/20/20228,928 8,897 8,887 
The Original Cakerie, Ltd. (Canada)^*(2) (3) (7)Beverage, Food & TobaccoL + 4.50%6.34%7/20/20226,826 6,801 6,790 
ThoughtWorks, Inc.+*\(2) (3) Business ServicesL + 4.00%5.70%10/11/202411,824 11,794 11,824 
U.S. Acute Care Solutions, LLC+\*(2) (3) Healthcare & PharmaceuticalsL + 5.00%6.91%5/15/202131,431 31,331 29,869 
U.S. TelePacific Holdings Corp.+*\(2) (3) TelecommunicationsL + 5.00%7.10%5/2/202326,660 26,499 25,430 
Valet Waste Holdings, Inc.+\(2) (3) Construction & BuildingL + 3.75%5.70%9/28/202511,850 11,825 11,688 
Welocalize, Inc.+^(2) (3) (7)Business ServicesL + 4.50%6.21%12/2/202423,038 22,788 22,787 
WIRB - Copernicus Group, Inc.+*\(2) (3) (7)Healthcare & PharmaceuticalsL + 4.25%5.95%8/15/202220,888 20,822 20,887 
WRE Holding Corp.^+*(2) (3) (7)Environmental IndustriesL + 5.00%6.91%1/3/20237,431 7,372 7,304 
Zywave, Inc.+*\(2) (3) (7)High Tech IndustriesL + 5.00%6.93%11/17/202219,228 19,107 19,211 
First Lien Debt Total
$1,231,436 $1,223,215 



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Consolidated Schedule of Investments as of December 31, 2019
Investments (1)
Footnotes
Industry
Reference Rate & Spread (2)
Interest 
Rate (2)
Maturity
Date
Par/
Principal
Amount
Amortized
Cost (5)
Fair
Value (6)
Second Lien Debt (1.75% of fair value)
DBI Holding, LLC^*(2) (3) (8)Transportation: Cargo8.00% PIK8.00%2/1/2026$21,150 $20,697 $21,150 
Zywave, Inc.*(2) (3) High Tech IndustriesL + 9.00%10.94%11/17/2023666 660 664 
Second Lien Debt Total
$21,357 $21,814 
Equity Investments (0.15% of fair value)
DBI Holding, LLC^Transportation: Cargo16,957 $5,364 $1,810 
Equity Investments Total$5,364 $1,810 
Total Investments
$1,258,157 $1,246,839 
^ Denotes that all or a portion of the assets are owned by Credit Fund. Credit Fund has entered into a revolving credit facility (the "Credit Fund Facility"). Accordingly, such assets are not available to creditors of Credit Fund Sub, the 2017-1 Issuer, the 2019-2 Issuer or Credit Fund Warehouse II.
+ Denotes that all or a portion of the assets are owned by Credit Fund Sub. Credit Fund Sub has entered into a revolving credit facility (the “Credit Fund Sub Facility”). The lenders of the Credit Fund Sub Facility have a first lien security interest in substantially all of the assets of Credit Fund Sub. Accordingly, such assets are not available to creditors of Credit Fund, the 2017-1 Issuer, the 2019-2 Issuer or Credit Fund Warehouse II.
* Denotes that all or a portion of the assets are owned by the 2017-1 Issuer and secure the notes issued in connection with a $399,900 term debt securitization completed by Credit Fund on December 19, 2017 (the “2017-1 Debt Securitization”). Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub, the 2019-2 Issuer or Credit Fund Warehouse II.
\ Denotes that all or a portion of the assets are owned by the 2019-2 Issuer and secure the notes issued in connection with a $399,900 term debt securitization completed by Credit Fund on May 21, 2019 (the “2019-2 Debt Securitization”). Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub, the 2017-1 Issuer or Credit Fund Warehouse II.
# Denotes that all or a portion of the assets are owned by the Credit Fund Warehouse II. Credit Fund Warehouse II has entered into a revolving credit facility (the "Credit Fund Warehouse II"). The lenders of the Credit Fund Warehouse II Facility have a first lien security interest in substantially all of the assets of the Credit Fund Warehouse II. Accordingly, such assets are not available to creditors of Credit Fund, Credit Fund Sub, 2017-1 Issuer or 2019-2 Issuer.

(1)Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States. As of December 31, 2019, the geographical composition of investments as a percentage of fair value was 1.26% in Canada and 98.60% in the United States. Certain portfolio company investments are subject to contractual restrictions on sales.
(2)Variable rate loans to the portfolio companies bear interest at a rate that may be determined by reference to either LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, Credit Fund has provided the interest rate in effect as of December 31, 2019. As of December 31, 2019, all of Credit Fund’s LIBOR loans were indexed to the 30-day LIBOR at 1.75%, the 90-day LIBOR at 1.91% and the 180-day LIBOR at 1.91%.
(3)Loan includes interest rate floor feature, which is generally 1.00%.
(4)Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.
(5)Fair value is determined in good faith by or under the direction of the board of managers of Credit Fund, pursuant to Credit Fund’s valuation policy, with the fair value of all investments determined using significant unobservable inputs, which is substantially similar to the valuation policy of the Company provided in Note 3, Fair Value Measurements.
(6)In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, Credit Fund is entitled to receive additional interest as a result of an agreement among lenders as follows: EIP Merger Sub, LLC (Evolve IP) (3.75%) and Surgical Information Systems, LLC (0.89%). Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.



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(7) As of December 31, 2019, Credit Fund had the following unfunded commitments to fund delayed draw and revolving senior secured loans:
First Lien Debt – unfunded delayed draw and revolving term loans commitmentsTypeUnused FeePar/ Principal AmountFair Value
Advanced Instruments, LLCRevolver0.50 %$563 $(2)
AmeriLife Group, LLCDelayed Draw1.00 298 (1)
Anchor Packaging, Inc.Delayed Draw1.00 4,487 (1)
AQA Acquisition Holding, Inc.Revolver0.50 2,459 (11)
Borchers, Inc.Revolver0.50 1,935 (3)
Clearent Newco, LLCDelayed Draw1.00 6,636 (110)
DecoPac, Inc.Revolver0.50 2,143 (7)
EIP Merger Sub, LLC (Evolve IP)Revolver0.50 1,680 — 
EIP Merger Sub, LLC (Evolve IP)Delayed Draw1.00 2,240 — 
HMT Holding Inc.Revolver0.50 6,173 (29)
Jensen Hughes, Inc.Revolver0.50 1,136 (11)
Jensen Hughes, Inc.Delayed Draw1.00 2,365 (23)
MAG DS Corp.Revolver0.50 2,188 (13)
Marco Technologies, LLCDelayed Draw1.00 7,500 — 
MSHC, Inc.Delayed Draw1.00 1,913 (4)
Output Services GroupDelayed Draw4.25 116 (1)
Pathway Vet Alliance LLCDelayed Draw1.00 19,867 68 
Premise Health Holding Corp.Delayed Draw1.00 1,103 (17)
Propel Insurance Agency, LLCRevolver0.50 2,381 (10)
Propel Insurance Agency, LLCDelayed Draw0.50 7,143 (31)
QW Holding Corporation (Quala)Revolver0.50 5,498 (31)
QW Holding Corporation (Quala)Delayed Draw1.00 217 (1)
Situs Group Holdings CorporationDelayed Draw1.00 1,216 (1)
T2 Systems, Inc.Revolver0.50 1,369 — 
The Original Cakerie, Ltd. (Canada)Revolver0.50 1,199 (5)
Welocalize, Inc.Revolver0.50 2,057 (21)
WIRB - Copernicus Group, Inc.Revolver0.50 1,000 — 
WIRB - Copernicus Group, Inc.Delayed Draw1.00 2,592 — 
WRE Holding Corp.Revolver0.50 441 (6)
WRE Holding Corp.Delayed Draw1.00 1,981 (25)
Zywave, Inc.Revolver0.50 998 (1)
Total unfunded commitments$92,894 $(297)
 
(8) Loan was on non-accrual status as of December 31, 2019.
Debt
The Credit Fund, Credit Fund Sub and Credit Fund Warehouse II are party to separate credit facilities as described below. In addition, until May 15, 2019, the 2019-2 Issuer (formerly known as the Credit Fund Warehouse) was party to the Credit Fund Warehouse Facility. As of December 31, 2020 and 2019, Credit Fund, Credit Fund Sub, and Credit Fund Warehouse II were in compliance with all covenants and other requirements of their respective credit facility agreements. Below is a summary of the borrowings and repayments under the credit facilities for the respective periods.
Credit Fund
Facility
Credit Fund Sub
Facility
Credit Fund Warehouse FacilityCredit Fund Warehouse II Facility
Outstanding balance as of December 31, 2018$112,000 $471,134 $101,044 $— 
Borrowings126,200 223,870 34,544 97,571 
Repayments(145,200)(351,498)(135,588)— 
Outstanding balance as of December 31, 201993,000 343,506 — 97,571 
Borrowings63,500 269,313 — 54,373 
Repayments(156,500)(191,960)— (58,542)
Outstanding balance as of December 31, 2020$— $420,859 $— $93,402 



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Credit Fund Facility. On June 24, 2016, Credit Fund entered into the Credit Fund Facility with the Company, which was subsequently amended on June 5, 2017, October 2, 2017, November 3, 2017, June 22, 2018, June 29, 2018, February 21, 2019, March 20, 2020 and February 22, 2021, pursuant to which Credit Fund may from time to time request mezzanine loans from the Company. The maximum principal amount of the Credit Fund Facility is $175,000. The maturity date of the Credit Fund Facility is March 22, 2021 (May 21, 2022 following the February 22, 2021 amendment). Amounts borrowed under the Credit Fund Facility bear interest at a rate of LIBOR plus 9.00%.
    Credit Fund Sub Facility. On June 24, 2016, Credit Fund Sub closed on the Credit Fund Sub Facility with lenders, which was subsequently amended on May 31, 2017, October 27, 2017, August 24, 2018, December 12, 2019 and March 11, 2020. The Credit Fund Sub Facility provides for secured borrowings during the applicable revolving period up to an amount equal to $640,000. The facility is secured by a first lien security interest in substantially all of the portfolio investments held by Credit Fund Sub. The maturity date of the Credit Fund Sub Facility is May 22, 2024. Amounts borrowed under the Credit Fund Sub Facility bear interest at a rate of LIBOR plus 2.25%.
    Credit Fund Warehouse Facility. On November 26, 2018, Credit Fund Warehouse closed on the Credit Fund Warehouse Facility with lenders. The Credit Fund Warehouse Facility provided for secured borrowings during the applicable revolving period up to an amount equal to $150,000. The Credit Fund Warehouse Facility was secured by a first lien security interest in substantially all of the portfolio investments held by the Credit Fund Warehouse. The maturity date of the Credit Fund Warehouse Facility was November 26, 2019. Amounts borrowed under the Credit Fund Warehouse Facility bore interest at a rate of LIBOR plus 1.05%. Effective May 15, 2019, the Warehouse Facility changed its name from “MMCF Warehouse, LLC” to “MMCF CLO 2019-2, LLC” and secured borrowings outstanding were repaid in connection with the 2019-2 Debt Securitization.
    Credit Fund Warehouse II Facility. On August 16, 2019, Credit Fund Warehouse II closed on a revolving credit facility (the "Credit Fund Warehouse II Facility") with lenders. The Credit Fund Warehouse II Facility provides for secured borrowings during the applicable revolving period up to an amount equal to $150,000. The Credit Fund Warehouse II Facility is secured by a first lien security interest in substantially all of the portfolio investments held by the Credit Fund Warehouse II Facility. The maturity date of the Credit Fund Warehouse II Facility is August 16, 2022. Amounts borrowed under the Credit Fund Warehouse II Facility bear interest at a rate of LIBOR plus 1.15% until August 2021. Amounts borrowed under the Credit Fund Warehouse II Facility during the first 12 months bore interest at a rate of LIBOR plus 1.05%, and amounts borrowed in the final 12 months will bear interest at LIBOR plus 1.50%.
2017-1 Notes
On December 19, 2017, Credit Fund completed the 2017-1 Debt Securitization. The notes offered in the 2017-1 Debt Securitization (the “2017-1 Notes”) were issued by the 2017-1 Issuer, a wholly owned and consolidated subsidiary of Credit Fund, and are secured by a diversified portfolio of the 2017-1 Issuer consisting primarily of first and second lien senior secured loans. The 2017-1 Debt Securitization was executed through a private placement of the 2017-1 Notes, consisting of:
$231,700 of Aaa/AAA Class A-1 Notes, which bear interest at the three-month LIBOR plus 1.17%;
$48,300 of Aa2/AA Class A-2 Notes, which bear interest at the three-month LIBOR plus 1.50%;
$15,000 of A2/A Class B-1 Notes, which bear interest at the three-month LIBOR plus 2.25%;
$9,000 of A2/A Class B-2 Notes which bear interest at 4.30%;
$22,900 of Baa2/BBB Class C Notes which bear interest at the three-month LIBOR plus 3.20%; and
$25,100 of Ba2/BB Class D Notes which bear interest at the three-month LIBOR plus 6.38%.
The 2017-1 Notes were scheduled to mature on January 15, 2028. Credit Fund received 100% of the preferred interests issued by the 2017-1 Issuer (the “2017-1 Issuer Preferred Interests”) on the closing date of the 2017-1 Debt Securitization in exchange for Credit Fund’s contribution to the 2017-1 Issuer of the initial closing date loan portfolio. The 2017-1 Issuer Preferred Interests do not bear interest and had a nominal value of $47,900 at closing.
The 2017-1 Notes were fully redeemed during the year ended December 31, 2020.



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2019-2 Notes
On May 21, 2019, Credit Fund completed the 2019-2 Debt Securitization. The notes offered in the 2019-2 Debt Securitization (the “2019-2 Notes”) were issued by the 2019-2 Issuer, a wholly owned and consolidated subsidiary of Credit Fund, and are secured by a diversified portfolio of the 2019-2 Issuer consisting primarily of first and second lien senior secured loans. The 2019-2 Debt Securitization was executed through a private placement of the 2019-2 Notes, consisting of:
$233,000 of Aaa/AAA Class A-1 Notes, which bear interest at the three-month LIBOR plus 1.50%;
$48,000 of Aa2/AA Class A-2 Notes, which bear interest at the three-month LIBOR plus 2.40%;
$23,000 of A2/A Class B Notes, which bear interest at the three-month LIBOR plus 3.45%;
$27,000 of Baa2/BBB- Class C Notes which bear interest at the three-month LIBOR plus 4.55%; and
$21,000 of Ba2/BB- Class D Notes which bear interest at the three-month LIBOR plus 8.03%.
    The 2019-2 Notes are scheduled to mature on April 15, 2029. Credit Fund received 100% of the preferred interests issued by the 2019-2 Issuer (the “2019-2 Issuer Preferred Interests”) on the closing date of the 2019-2 Debt Securitization in exchange for Credit Fund’s contribution to the 2019-2 Issuer of the initial closing date loan portfolio. The 2019-2 Issuer Preferred Interests do not bear interest and had a nominal value of $48,300 at closing.
As of December 31, 2020, the 2019-2 Issuer was in compliance with all covenants and other requirements of the indenture.
MIDDLE MARKET CREDIT FUND II, LLC
Overview
On November 3, 2020, the Company and CCLF entered into a limited liability company agreement to co-manage Credit Fund II, a Delaware limited liability company that is not consolidated in the Company's consolidated financial statements. Credit Fund II primarily invests in senior secured loans of middle market companies. Credit Fund II is managed by a four-member board, on which the Company and CCLF have equal representation. Establishing a quorum for Credit Fund II's board requires at least one of the Company's representatives and one of CCLF's representatives. The Company and CCLF have 84.13% and 15.87% economic ownership of Credit Fund II, respectively. By virtue of its membership interest, each of the Company and CCLF indirectly bears an allocable share of all expenses and other obligations of Credit Fund II.
Credit Fund II's initial portfolio consists of 45 senior secured loans of middle market companies with an aggregate principal balance of approximately $250 million. Credit Fund II's initial portfolio was funded on November 3, 2020 with existing senior secured debt investments contributed by the Company and as part of the transaction, the Company determined that the contribution met the requirements under ASC 860, Transfers and Servicing.
Credit Fund II is expected to make only limited new investments in senior secured loans of middle market companies. Portfolio and investment decisions with respect to Credit Fund II must be unanimously approved by a quorum of Credit Fund II’s board members consisting of at least one of the Company's representatives and one of CCLF's representatives. Therefore, although the Company owns more than 25% of the voting securities of Credit Fund II, the Company does not believe that it has control over Credit Fund (other than for purposes of the Investment Company Act).
Middle Market Credit Fund II SPV, LLC (“Credit Fund II Sub”), a Delaware limited liability company, was formed on September 4, 2020. Credit Fund II Sub is a wholly owned subsidiary of Credit Fund II and is consolidated in Credit Fund II’s consolidated financial statements commencing from the date of its formation. Credit Fund II Sub primarily holds investments in first lien loans of middle market companies, which are pledged as security for the Credit Fund II Senior Notes (see below).
Credit Fund II, the Company and CCLF entered into an administration agreement with Carlyle Global Credit Administration L.L.C., the administrative agent of Credit Fund II (in such capacity, the “Credit Fund II Administrative Agent”), pursuant to which the Credit Fund II Administrative Agent is delegated certain administrative and non-discretionary functions, is authorized to enter into sub-administration agreements at the expense of Credit Fund II with the approval of the board of managers of Credit Fund II, and is reimbursed by Credit Fund II for its costs and expenses and Credit Fund II’s allocable portion of overhead incurred by the Credit Fund II Administrative Agent in performing its obligations thereunder.
Credit Fund II Senior Notes
On November 3, 2020, Credit Fund II Sub closed on the Credit Fund II Senior Notes (the “Credit Fund II Senior Notes”) with lenders. The Credit Fund II Senior Notes provides for secured borrowings totaling $157,500 with two tranches,



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A-1 and A-2 outstanding. The facility is secured by a first lien security interest in substantially all of the portfolio investments held by Credit Fund II Sub. The maturity date of the Credit Fund II Senior Notes Sub Facility is November 3, 2030. Amounts issued for the Class A-1 notes totaled $147,500 and bear interest at a rate of LIBOR plus 2.70%, and amounts issued for the Class A-2 notes totaled $10,000 and bear interest at LIBOR plus 3.20%. The A-1 Notes were rated AAA, and the A-2 Notes were rated AA by DBRS Morningstar. The terms of the Credit Fund II Senior Notes provide that as loans pay down, up to $50,000 is available from principal proceeds for reinvestment, and then the investment principal proceeds are used to directly pay down the principal balance on the Credit Fund II Senior Notes. As of December 31, 2020, Credit Fund II Sub was in compliance with all covenants and other requirements of its respective credit agreements.
Selected Financial Data
Since inception of Credit Fund II and through December 31, 2020, the Company and CCLF each made capital contributions of $78,096 and $12,709 in members’ equity, respectively, to Credit Fund II. Below is certain summarized consolidated information for Credit Fund II as of December 31, 2020.

As of December 31,
2020
ASSETS
Investments, at fair value (amortized cost of $245,312)$246,421 
Cash and cash equivalents1,385 
Other assets3,436 
Total assets$251,242 
LIABILITIES AND MEMBERS’ EQUITY
Liabilities
Notes payable, net of unamortized debt issuance costs of $875$156,625 
Other liabilities2,675 
Total liabilities159,300 
Members’ equity
Members’ contributions90,805 
Members’ distributions(1,718)
Accumulated income from operations2,855 
Total members' equity (1)91,942 
Total liabilities and members’ equity$251,242 
(1) As of December 31, 2020, the fair value of the Company's ownership interest in the members' equity was $77,395.