What is a BDC?

Congress created Business Development Companies (BDCs) in 1980 to provide public investors another means to invest in the long-term growth of smaller U.S. businesses. BDCs invest their capital primarily in small and middle market private companies in the U.S. Typically, BDCs are structured to originate and hold debt and equity investments and can invest across a portfolio company’s capital structure.

A BDC that is a “regulated investment company”, or a “RIC”, for U.S. federal income tax purposes, such as MSC Income Fund, is required to distribute at least 90% of its taxable income to shareholders in order to maintain its RIC election and avoid corporate income tax.

What is MSC Income Fund's investment objective?

Our investment objective is to generate current income through debt and equity investments. A secondary objective is to generate long-term capital appreciation through such equity and equity-related investments, including warrants, convertible securities and other rights to acquire equity securities. Our portfolio strategy is to invest primarily in illiquid debt and equity securities issued by lower middle market (“LMM”) companies, which generally have annual revenues between $10 million and $150 million, and middle market (“Middle Market”) companies that are generally larger in size than the LMM companies and have annual revenues typically between $10 million and $3 billion. Our LMM and Middle Market portfolio investments generally range in size from $1 million to $15 million. We categorize some of our investments in LMM companies and Middle Market companies as private loan (“Private Loan”) portfolio investments. Private Loan investments, often referred to in the debt markets as “club deals,” are investments, generally in debt instruments, that we originate on a collaborative basis with other investment funds. Private Loan investments are typically similar in size, structure, terms and conditions to investments we hold in our LMM portfolio and Middle Market portfolio. Our portfolio also includes other portfolio (“Other Portfolio”) investments primarily consisting of investments managed by third parties, which differ from the typical profiles for our other types of investments.

Is MSC Income Fund's common stock listed?

Our common stock not listed on an exchange or quoted through a quotation system and may not be listed in the foreseeable future. We intend to explore a potential liquidity event for our stockholders between four and six years following the closing of our continuous public offering of common stock to new investors or any subsequent follow-on offerings. However, there can be no assurance that we will complete a liquidity event within such time or at all.

What is the CUSIP number for MSC Income Fund's common stock?

The current CUSIP number for our common stock is 40427D102; however, the CUSIP number for our common stock will change to 55374X 109 effective as of May 12, 2021.

When does the Company expect to provide significant updates to its shareholders?

At a minimum, the Company expects to provide updates on its website upon the occurrence of any of the following:

  1. At the end of each fiscal quarter when the Company provides its quarterly financial reporting
  2. Upon the approval of significant events by the Board
  3. All activities or events involving dividends to or liquidity opportunities for the Company’s shareholders

Updates may be provided via SEC filings, press releases, presentations and other postings on our website.

How can I make sure I receive the latest updates with respect to the Company?

Shareholders can sign up for e-mail updates through the Company’s website at www.mscincomefund.com/news/email-alerts to receive the most recent news regarding the Company.

How often does MSC Income Fund pay a Dividend?

We currently pay dividends to our shareholders of record on a quarterly basis when declared by the Company’s Board of Directors in their sole discretion.

When a dividend is declared, who will be entitled to receive the dividend?

All shareholders who hold shares in the Company as of the record date (which is established by the Company when a dividend is declared) will be eligible to receive dividends on those shares. For example, if Holder A holds shares of the Company’s common stock on March 29, 2021, but transfers the shares on March 30, 2021, Holder A would not receive a dividend declared to shareholders with a Record Date as of March 31, 2021 and such dividend would instead be paid to the transferee of the Holder A’s shares. Conversely, if Holder A transfers shares through April 1, 2021, Holder A will still receive the dividend with a Record Date as of March 31, 2021 that is paid on April 1, 2021.

Will I receive my dividends in cash or additional shares of common stock?

The Company operates a dividend reinvestment plan (the DRIP) that permits shareholders to automatically reinvest all or a portion of their cash dividends paid on shares of our common stock. Shareholders who have previously “opted in” to the Company’s dividend reinvestment plan (the DRIP) will have their dividends automatically re-invested in shares of the Company’s common stock. For example, if Holder A opted in to the DRIP in June of 2020 and has not changed their DRIP election before a dividend record date of March 31, 2021, they will have their dividends re-invested again as part of a dividend payable on April 1, 2021. If this shareholder would like to receive a cash dividend instead of re-investing, they will need to change their election at least 10 days prior to the record date for such dividend.

If you would like to change your DRIP election, the appropriate form is available on the Company’s website at www.mscincomefund.com under the “Investors” tab. If you do not know how you have elected to receive dividends, please contact the investor relations group at 888-220-6121.

Are dividends taxable to shareholders and, if so, at what rate?

Following the end of each year we provide a Form 1099-DIV and a tax status letter to our shareholders that describe the tax characteristics of the dividends paid in the preceding year, including a breakdown of such dividends between ordinary income, capital gains, qualified dividends and return of capital for tax purposes. DRIP participants are taxed on the dividends received as if they had received cash. For information about taxes in respect of dividends received by you, you should consult your own tax advisor.

Are dividends paid by MSC Income Fund subject to Unrelated Business Income Tax (“UBIT”)?

Unrelated business taxable income (“UBTI”) is income that a tax-exempt entity, such as a charitable organization, religious organization, qualified retirement trust, university, or other similar organization, earns from business activities that are not substantially related to the performance of the organization's exempt purpose and thus does not qualify for exemption from UBTI. In addition, an individual retirement account (“IRA”) can also earn active business income from the investments held by the IRA and UBTI earned in excess of certain statutory limits can cause certain additional tax reporting requirements and tax obligations for the IRA. Since we are a regulated investment company, or a “RIC”, which is a corporation for federal income tax purposes, we are able to act as a “blocker” and “shield” against UBTI and we can therefore pass the income and gains we earn through to our shareholders as dividends that are not subject to UBIT.

How does the Company provide liquidity to shareholders?

The Company’s shares of common stock are illiquid assets for which there is not a secondary market nor is it expected that any will develop in the future. To provide limited liquidity to shareholders, the Company maintains a share repurchase program through which the Company makes periodic offers to repurchase shares of its common stock at a price equal to the NAV per share, as determined within 48 hours of the repurchase date. The share repurchase program includes numerous restrictions that may limit your ability to sell your shares.

Who is eligible to participate in the Share Repurchase Program?

All shareholders holding shares prior to the expiration date of a repurchase tender offer are eligible to tender their shares for repurchase by the Company.

How do I tender my shares for repurchase through the Share Repurchase Program?

If your shares are registered in your name, you will receive instructions on how to access the tender offer materials in the mail. These materials must be completed and returned to the Company in proper form before the applicable expiration date. If your shares are custodian held or broker controlled, your materials must be timely submitted in proper form by your custodian or broker on your behalf.

Are there any conditions to the repurchase offers under the Share Repurchase Program?

Yes. If the amount of repurchase requests exceeds the number of shares we offer to repurchase, we will repurchase shares on a pro-rata basis, subject to “odd lot” priority, in accordance with the number of shares duly tendered by or on behalf of each shareholder.

Whom can I contact for general information about MSC Income Fund?

Dwayne L. Hyzak
Chief Executive Officer
T: 713-350-6013
dhyzak@mainstcapital.com

Brent D. Smith
Chief Financial Officer & Treasurer
T: 713-350-6045
bsmith@mainstcapital.com

Whom can I contact for information about my account?

Hines Securities Investor Relations
    T: 888.220.6121