UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
(Mark One) | |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended | |
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 Number:
(Exact name of registrant as specified in its charter)
|
|
|
|
(
(Registrant’s telephone number including area code)
n/a
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class |
| Trading Symbol |
| Name of Each Exchange on Which |
None | N/A | N/A |
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.
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 during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ | 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 for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The number of shares outstanding of the issuer’s common stock as of August 12, 2022 was
TABLE OF CONTENTS
MSC INCOME FUND, INC.
Consolidated Balance Sheets
(in thousands, except shares and per share amounts)
June 30, | December 31, | |||||
| 2022 |
| 2021 | |||
ASSETS |
| (Unaudited) |
|
| ||
Investments at fair value: |
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|
| |||
Control investments (cost: $30,100 and $28,903 as of June 30, 2022 and December 31, 2021, respectively) | $ | 49,166 | $ | 46,583 | ||
Affiliate investments (cost: $221,056 and $209,971 as of June 30, 2022 and December 31, 2021, respectively) |
| 245,731 |
| 234,158 | ||
Non‑Control/Non‑Affiliate investments (cost: $851,577 and $828,301 as of June 30, 2022 and December 31, 2021, respectively) |
| 810,780 |
| 796,395 | ||
Total investments (cost: $1,102,733 and $1,067,175 as of June 30, 2022 and December 31, 2021, respectively) |
| 1,105,677 |
| 1,077,136 | ||
Cash and cash equivalents |
| 9,995 |
| 25,813 | ||
Interest and dividend receivable |
| 10,238 |
| 12,991 | ||
Deferred financing costs (net of accumulated amortization of $1,797 and $1,290 as of June 30, 2022 and December 31, 2021, respectively) | 3,524 | 4,049 | ||||
Receivable for securities sold |
| 432 |
| 21,729 | ||
Prepaids and other assets | 1,575 | 2,059 | ||||
Total assets | $ | 1,131,441 | $ | 1,143,777 | ||
LIABILITIES |
|
| ||||
Credit facilities | $ | 351,688 | $ | 426,688 | ||
Series A Notes due 2026 (par: $150,000 and $77,500 as of June 30, 2022 and December 31, 2021, respectively) |
| 148,707 |
|
| 76,184 | |
Accounts payable and other liabilities |
| 2,121 |
|
| 3,159 | |
Interest payable | 3,978 | 3,093 | ||||
Dividend payable |
| 12,802 |
|
| 11,974 | |
Management and incentive fees payable |
| 5,108 |
| 5,339 | ||
Payable for securities purchased |
| — |
| 4,170 | ||
Deferred tax liability, net |
| 178 |
| — | ||
Total liabilities |
| 524,582 |
| 530,607 | ||
Commitments and contingencies (Note J) |
|
| ||||
NET ASSETS |
|
| ||||
Common stock, $0.001 par value per share (450,000,000 shares authorized; 80,011,721 and 79,826,605 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively) |
| 80 |
| 80 | ||
Additional paid‑in capital |
| 684,059 |
| 682,426 | ||
Total overdistributed earnings |
| (77,280) |
| (69,336) | ||
Total net assets |
| 606,859 |
| 613,170 | ||
Total liabilities and net assets | $ | 1,131,441 | $ | 1,143,777 | ||
NET ASSET VALUE PER SHARE | $ | 7.58 | $ | 7.68 | ||
The accompanying notes are an integral part of these consolidated financial statements
1
MSC INCOME FUND, INC.
Consolidated Statements of Operations
(in thousands, except shares and per share amounts)
(Unaudited)
Three Months Ended | Six Months Ended | ||||||||||||
| June 30, | June 30, |
| ||||||||||
| 2022 |
| 2021 |
| 2022 |
| 2021 | ||||||
INVESTMENT INCOME: |
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| ||||
Interest, fee and dividend income: |
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| |||||||
Control investments | $ | 1,039 | $ | 743 | $ | 2,040 | $ | 1,343 | |||||
Affiliate investments |
| 5,852 | 4,446 |
| 11,058 |
| 8,096 | ||||||
Non‑Control/Non‑Affiliate investments |
| 17,448 | 17,307 |
| 34,642 |
| 33,329 | ||||||
Total investment income |
| 24,339 | 22,496 |
| 47,740 |
| 42,768 | ||||||
EXPENSES: |
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|
|
| |||||||||
Interest |
| (5,299) | (3,300) |
| (9,827) |
| (6,464) | ||||||
Base management fees |
| (4,955) | (4,158) |
| (9,945) |
| (8,061) | ||||||
Internal administrative services expenses | (1,302) | (1,040) | (2,483) | (2,095) | |||||||||
General and administrative | (1,037) | (794) | (2,075) | (2,057) | |||||||||
Total expenses before expense waivers | (12,593) | (9,292) | (24,330) | (18,677) | |||||||||
Waiver of internal administrative services expenses |
| 1,149 | 1,040 |
| 2,179 |
| 2,095 | ||||||
Total expenses, net of expense waivers |
| (11,444) | (8,252) |
| (22,151) |
| (16,582) | ||||||
NET INVESTMENT INCOME |
| 12,895 | 14,244 |
| 25,589 |
| 26,186 | ||||||
NET REALIZED GAIN (LOSS): |
|
|
|
| |||||||||
Control investments |
| — | (2,470) |
| — |
| (2,470) | ||||||
Affiliate investments |
| 333 | — |
| 779 |
| — | ||||||
Non‑Control/Non‑Affiliate investments |
| 39 | 4,288 |
| (154) |
| 2,297 | ||||||
Realized loss on extinguishment of debt | — | — | — | (2,091) | |||||||||
Total net realized gain (loss) |
| 372 | 1,818 |
| 625 |
| (2,264) | ||||||
NET UNREALIZED APPRECIATION (DEPRECIATION): |
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|
|
| |||||||||
Control investments |
| 1,207 | 63 |
| 1,385 |
| (3) | ||||||
Affiliate investments |
| 415 | 5,027 |
| 492 |
| 6,030 | ||||||
Non‑Control/Non‑Affiliate investments |
| (12,371) | 2,737 |
| (8,894) |
| 6,993 | ||||||
Total net unrealized appreciation (depreciation) |
| (10,749) | 7,827 |
| (7,017) |
| 13,020 | ||||||
INCOME TAXES: |
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|
|
| |||||||||
Federal and state income, excise and other taxes |
| (638) | (434) |
| (981) |
| (830) | ||||||
Deferred taxes | (57) | — | (178) | — | |||||||||
Income tax benefit (provision) | (695) | (434) | (1,159) | (830) | |||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 1,823 | $ | 23,455 | $ | 18,038 | $ | 36,112 | |||||
NET INVESTMENT INCOME PER SHARE—BASIC AND DILUTED | $ | 0.16 | $ | 0.18 | $ | 0.32 | $ | 0.33 | |||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS PER | $ | 0.02 | $ | 0.29 | $ | 0.23 | $ | 0.45 | |||||
WEIGHTED-AVERAGE SHARES |
| 79,968,597 | 79,973,441 |
| 79,915,291 |
| 79,791,881 | ||||||
The accompanying notes are an integral part of these consolidated financial statements
2
MSC INCOME FUND, INC.
Consolidated Statements of Changes in Net Assets
(in thousands, except shares)
(Unaudited)
Common Stock | Additional | Total | ||||||||||||
Number of | Par | Paid‑In | Overdistributed | Total Net | ||||||||||
| Shares |
| Value |
| Capital |
| Earnings |
| Asset Value | |||||
Balances at December 31, 2020 |
| 79,608,304 | $ | 80 | $ | 682,028 | $ | (102,484) | $ | 579,624 | ||||
Net increase resulting from operations | — | — | — | 12,657 | 12,657 | |||||||||
Dividends to stockholders | — | — | — | (7,961) | (7,961) | |||||||||
Balances at March 31, 2021 | 79,608,304 | $ | 80 | $ | 682,028 | $ | (97,788) | $ | 584,320 | |||||
Offering of common stock | 67,114 | — | 500 | — | 500 | |||||||||
Dividend reinvestment | 424,455 | — | 3,162 | — | 3,162 | |||||||||
Common stock repurchased | (383,512) | — | (2,861) | — | (2,861) | |||||||||
Net increase resulting from operations | — | — | — | 23,455 | 23,455 | |||||||||
Dividends to stockholders | — | — | — | (9,964) | (9,964) | |||||||||
Balances at June 30, 2021 | 79,716,361 | $ | 80 | $ | 682,829 | $ | (84,297) | $ | 598,612 | |||||
Balances at December 31, 2021 | 79,826,605 | $ | 80 | $ | 682,426 | $ | (69,336) | $ | 613,170 | |||||
Dividend reinvestment | 533,062 | — | 4,212 | — | 4,212 | |||||||||
Common stock repurchased | (489,031) | — | (3,790) | — | (3,790) | |||||||||
Net increase resulting from operations | — | — | — | 16,213 | 16,213 | |||||||||
Dividends to stockholders | — | — | — | (13,178) | (13,178) | |||||||||
Balances at March 31, 2022 | 79,870,636 | $ | 80 | $ | 682,848 | $ | (66,301) | $ | 616,627 | |||||
Offering of common stock | 94,697 | — | 750 | — | 750 | |||||||||
Dividend reinvestment | 582,453 | 1 | 4,612 | — | 4,613 | |||||||||
Common stock repurchased | (536,065) | (1) | (4,151) | — | (4,152) | |||||||||
Net increase resulting from operations | — | — | — | 1,823 | 1,823 | |||||||||
Dividends to stockholders | — | — | — | (12,802) | (12,802) | |||||||||
Balances at June 30, 2022 | 80,011,721 | $ | 80 | $ | 684,059 | $ | (77,280) | $ | 606,859 | |||||
The accompanying notes are an integral part of these consolidated financial statements
3
MSC INCOME FUND, INC.
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Six Months Ended | ||||||
June 30, | ||||||
2022 | 2021 | |||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||
Net increase in net assets resulting from operations | $ | 18,038 | $ | 36,112 | ||
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities: | ||||||
Investments in portfolio companies | (115,879) | (223,398) | ||||
Proceeds from sales and repayments of debt investments in portfolio companies | 83,636 | 88,861 | ||||
Proceeds from sales and return of capital of equity investments in portfolio companies | 1,872 | 6,273 | ||||
Net unrealized (appreciation) depreciation | 7,017 | (13,020) | ||||
Net realized (gain) loss on the sale of portfolio investments | (625) | 173 | ||||
Realized loss on extinguishment of debt | — | 2,091 | ||||
Amortization of deferred financing costs | 697 | 593 | ||||
Amortization of deferred offering costs | — | 55 | ||||
Accretion of unearned income | (2,622) | (2,096) | ||||
Payment-in-kind interest | (1,940) | (3,411) | ||||
Deferred tax provision | 178 | — | ||||
Changes in other assets and liabilities: | ||||||
Interest and dividend receivable | 2,753 | (2,706) | ||||
Receivable for securities sold | 21,297 | (7,988) | ||||
Prepaid and other assets | 484 | 1,233 | ||||
Payable for securities purchased | (4,170) | 20,357 | ||||
Management and incentive fees payable | (231) | (44) | ||||
Interest payable | 885 | 2,485 | ||||
Accounts payable and other liabilities | (1,038) | (366) | ||||
Net cash provided by (used in) operating activities | 10,352 | (94,796) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||
Issuance of common stock | 750 | 500 | ||||
Redemption of common stock | (7,942) | (2,861) | ||||
Dividends paid | (16,329) | (4,798) | ||||
Repayments on Credit Facilities | (141,000) | (311,816) | ||||
Proceeds from Credit Facilities | 66,000 | 336,688 | ||||
Proceeds from Series A Notes due 2026 | 72,500 | 40,000 | ||||
Payment of deferred financing costs | (149) | (3,713) | ||||
Net cash provided by (used in) financing activities | (26,170) | 53,945 | ||||
Net increase (decrease) in cash, cash equivalents and restricted cash | (15,818) | (40,851) | ||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD | 25,813 | 49,066 | ||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | $ | 9,995 | $ | 8,215 | ||
Supplemental cash flow disclosures: | ||||||
Interest paid | $ | 5,788 | $ | 3,387 | ||
Taxes paid | $ | 1,562 | $ | 1,283 | ||
Non-cash financing activities: | ||||||
Value of shares issued pursuant to the DRIP | $ | 8,825 | $ | 3,162 | ||
The accompanying notes are an integral part of these consolidated financial statements
4
MSC INCOME FUND, INC.
Consolidated Schedule of Investments
June 30, 2022
(dollars in thousands)
(Unaudited)
Portfolio Company (1) (20) | Business Description | Type of Investment (2) (3) (15) | Investment Date (22) | Shares/Units | Rate (32) | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||||
Control Investments (5) |
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Copper Trail Fund Investments | (12) (13) | Investment Partnership |
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| LP Interests (CTMH, LP) | (24) | 7/17/2017 | 38.8% |
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| $ | 835 | $ | 710 | ||
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GRT Rubber Technologies LLC |
| Manufacturer of Engineered Rubber Products |
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| Secured Debt |
| 12/19/2014 |
| 9.06% (L+8.00%) | 10/29/2026 | 19,152 | 18,953 | 19,152 | |||
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| Member Units | (8) | 12/19/2014 | 2,896 |
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| 6,435 | 22,750 | ||||
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| 25,388 | 41,902 | |||
Harris Preston Fund Investments | (12) (13) | Investment Partnership |
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| LP Interests (2717 MH, L.P.) | (24) | 10/1/2017 | 49.3% |
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| 3,877 | 6,554 | ||||
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Subtotal Control Investments (8.1% of net assets at fair value) |
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| $ | 30,100 | $ | 49,166 | |
Affiliate Investments (6) |
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AFG Capital Group, LLC |
| Provider of Rent-to-Own Financing Solutions and Services |
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| Preferred Member Units | (8) | 11/7/2014 | 46 |
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| $ | 300 | $ | 2,190 | ||
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Analytical Systems Keco Holdings, LLC |
| Manufacturer of Liquid and Gas Analyzers |
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| Secured Debt | (9) | 8/16/2019 |
| 12.00% (L+10.00%, Floor 2.00%) | 8/16/2024 | 1,201 | 1,156 | 1,156 | |||
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| Preferred Member Units |
| 8/16/2019 | 800 |
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| 800 | - | ||||
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| Preferred Member Units |
| 5/20/2021 | 607 |
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| 607 | 1,080 | ||||
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| Warrants | (27) | 8/16/2019 | 105 |
| 8/16/2029 | 79 | - | ||||
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| 2,642 | 2,236 | |||
ATX Networks Corp. | (11) | Provider of Radio Frequency Management Equipment |
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| Secured Debt | (9) | 9/1/2021 |
| 8.92% (L+7.50%, Floor 1.00%) | 9/1/2026 | 7,003 | 6,458 | 6,128 | |||
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| Unsecured Debt | (19) | 9/1/2021 |
| 10.00% PIK | 9/1/2028 | 3,246 | 2,167 | 2,256 | |||
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| Common Stock |
| 9/1/2021 | 585 |
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| - | - | ||||
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| 8,625 | 8,384 | |||
Barfly Ventures, LLC | (10) | Casual Restaurant Group |
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| Member Units |
| 10/26/2020 | 12 |
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| 528 | 800 | ||||
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Batjer TopCo, LLC |
| HVAC Mechanical Contractor |
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| Secured Debt |
| 3/7/2022 |
| 11.00% | 3/31/2027 | 1,225 | 1,201 | 1,201 | |||
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| Preferred Stock |
| 3/7/2022 | 453 |
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| 453 | 453 | ||||
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| 1,654 | 1,654 | |||
Brewer Crane Holdings, LLC |
| Provider of Crane Rental and Operating Services |
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| Secured Debt | (9) | 1/9/2018 |
| 11.06% (L+10.00%, Floor 1.00%) | 1/9/2023 | 1,953 | 1,948 | 1,948 | |||
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| Preferred Member Units | (8) | 1/9/2018 | 737 |
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| 1,070 | 1,760 | ||||
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| 3,018 | 3,708 | |||
Centre Technologies Holdings, LLC |
| Provider of IT Hardware Services and Software Solutions |
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| Secured Debt | (9) | 1/4/2019 |
| 12.00% (L+10.00%, Floor 2.00%) | 1/4/2026 | 3,758 | 3,726 | 3,726 | |||
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| Preferred Member Units |
| 1/4/2019 | 3,327 |
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| 1,531 | 1,720 | ||||
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| 5,257 | 5,446 | |||
5
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
June 30, 2022
(dollars in thousands)
(Unaudited)
Chamberlin Holding LLC |
| Roofing and Waterproofing Specialty Contractor |
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| Secured Debt | (9) | 2/26/2018 |
| 9.13% (L+8.00%, Floor 1.00%) | 2/26/2023 | 4,366 | 4,339 | 4,366 | |||
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| Member Units | (8) | 2/26/2018 | 1,087 |
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| 2,860 | 5,630 | ||||
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| Member Units | (8) (23) | 11/2/2018 | 261,786 |
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| 330 | 358 | ||||
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| 7,529 | 10,354 | |||
Charps, LLC |
| Pipeline Maintenance and Construction |
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| Preferred Member Units | (8) | 2/3/2017 | 457 |
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| 491 | 3,360 | ||||
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Clad-Rex Steel, LLC |
| Specialty Manufacturer of Vinyl-Clad Metal |
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| Secured Debt | (9) | 12/20/2016 |
| 10.63% (L+9.50%, Floor 1.00%) | 1/15/2024 | 2,620 | 2,620 | 2,620 | |||
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| Secured Debt |
| 12/20/2016 |
| 10.00% | 12/20/2036 | 266 | 264 | 264 | |||
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| Member Units | (8) | 12/20/2016 | 179 |
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| 1,820 | 2,560 | ||||
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| Member Units | (23) | 12/20/2016 | 200 |
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| 53 | 152 | ||||
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| 4,757 | 5,596 | |||
Cody Pools, Inc. |
| Designer of Residential and Commercial Pools |
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| Secured Debt | (9) | 3/6/2020 |
| 12.25% (L+10.50%, Floor 1.75%) | 12/17/2026 | 7,034 | 6,913 | 7,034 | |||
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| Preferred Member Units | (8) (23) | 3/6/2020 | 147 |
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| 2,079 | 12,800 | ||||
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| 8,992 | 19,834 | |||
Colonial Electric Company LLC |
| Provider of Electrical Contracting Services |
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| Secured Debt |
| 3/31/2021 |
| 12.00% | 3/31/2026 | 6,385 | 6,268 | 6,268 | |||
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| Preferred Member Units | (8) | 3/31/2021 | 4,320 |
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| 1,920 | 2,240 | ||||
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| 8,188 | 8,508 | |||
Datacom, LLC |
| Technology and Telecommunications Provider |
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| Secured Debt |
| 3/31/2021 |
| 7.50% | 12/31/2025 | 973 | 898 | 846 | |||
|
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| Preferred Member Units | (8) | 3/31/2021 | 1,000 |
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| 290 | 300 | ||||
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| 1,188 | 1,146 | |||
Digital Products Holdings LLC |
| Designer and Distributor of Consumer Electronics |
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| Secured Debt | (9) | 4/1/2018 |
| 11.13% (L+10.00%, Floor 1.00%) | 4/1/2023 | 4,048 | 4,032 | 4,032 | |||
|
|
| Preferred Member Units | (8) | 4/1/2018 | 964 |
|
| 2,375 | 2,459 | ||||
|
|
|
|
|
|
|
|
|
| 6,407 | 6,491 | |||
Direct Marketing Solutions, Inc. |
| Provider of Omni-Channel Direct Marketing Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 2/13/2018 |
| 12.13% (L+11.00%, Floor 1.00%) | 2/13/2024 | 4,791 | 4,745 | 4,791 | |||
|
|
| Preferred Stock | (8) | 2/13/2018 | 2,100 |
|
| 2,100 | 5,390 | ||||
|
|
|
|
|
|
|
|
|
| 6,845 | 10,181 | |||
Flame King Holdings, LLC |
| Propane Tank and Accessories Distributor |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 10/29/2021 |
| 7.50% (L+6.50%, Floor 1.00%) | 10/31/2026 | 1,900 | 1,883 | 1,900 | |||
|
|
| Secured Debt | (9) | 10/29/2021 |
| 12.00% (L+11.00%, Floor 1.00%) | 10/31/2026 | 5,300 | 5,161 | 5,300 | |||
|
|
| Preferred Equity | (8) | 10/29/2021 | 2,340 |
|
| 2,600 | 3,350 | ||||
|
|
|
|
|
|
|
|
|
| 9,644 | 10,550 | |||
Freeport Financial Funds | (12) (13) | Investment Partnership |
|
|
|
|
|
|
|
| ||||
|
|
| LP Interests (Freeport First Lien Loan Fund III LP) | (8) (24) | 7/31/2015 | 6.0% |
|
| 7,250 | 6,795 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Gamber-Johnson Holdings, LLC |
| Manufacturer of Ruggedized Computer Mounting Systems |
|
|
|
|
|
|
|
|
6
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
June 30, 2022
(dollars in thousands)
(Unaudited)
|
|
| Secured Debt | (9) | 6/24/2016 |
| 10.00% (L+8.00%, Floor 2.00%) | 1/1/2025 | 5,400 | 5,385 | 5,400 | |||
|
|
| Member Units | (8) | 6/24/2016 | 2,261 |
|
| 4,423 | 11,580 | ||||
|
|
|
|
|
|
|
|
|
| 9,808 | 16,980 | |||
GFG Group, LLC. |
| Grower and Distributor of a Variety of Plants and Products to Other Wholesalers, Retailers and Garden Centers |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt |
| 3/31/2021 |
| 9.00% | 3/31/2026 | 3,136 | 3,063 | 3,136 | |||
|
|
| Preferred Member Units | (8) | 3/31/2021 | 56 |
|
| 1,225 | 1,750 | ||||
|
|
|
|
|
|
|
|
|
| 4,288 | 4,886 | |||
Gulf Publishing Holdings, LLC |
| Energy Industry Focused Media and Publishing |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) (17) (19) | 9/29/2017 |
| 10.60% (5.25% Cash, 5.25% PIK) (L+9.50%, Floor 1.00%) | 9/30/2020 | 64 | 64 | 64 | |||
|
|
| Secured Debt | (17) (19) | 4/29/2016 |
| 12.50% (6.25% Cash, 6.25% PIK) | 4/29/2021 | 3,391 | 3,391 | 1,882 | |||
|
|
| Member Units |
| 4/29/2016 | 920 |
|
| 920 | - | ||||
|
|
|
|
|
|
|
|
|
| 4,375 | 1,946 | |||
Harris Preston Fund Investments | (12) (13) | Investment Partnership |
|
|
|
|
|
|
|
| ||||
|
|
| LP Interests (HPEP 3, L.P.) | (8) (24) | 8/9/2017 | 8.2% |
|
| 2,833 | 4,331 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Kickhaefer Manufacturing Company, LLC |
| Precision Metal Parts Manufacturing |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt |
| 10/31/2018 |
| 11.50% | 10/31/2023 | 5,104 | 5,058 | 5,058 | |||
|
|
| Secured Debt |
| 10/31/2018 |
| 9.00% | 10/31/2048 | 974 | 965 | 965 | |||
|
|
| Member Units |
| 10/31/2018 | 145 |
|
| 3,060 | 3,060 | ||||
|
|
| Member Units | (8) (23) | 10/31/2018 | 200 |
|
| 248 | 615 | ||||
|
|
|
|
|
|
|
|
|
| 9,331 | 9,698 | |||
Market Force Information, LLC |
| Provider of Customer Experience Management Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (14) (19) | 7/28/2017 |
| 12.00% PIK | 7/28/2023 | 6,520 | 6,476 | 1,883 | |||
|
|
| Member Units |
| 7/28/2017 | 185,980 |
|
| 4,160 | - | ||||
|
|
|
|
|
|
|
|
|
| 10,636 | 1,883 | |||
MH Corbin Holding LLC |
| Manufacturer and Distributor of Traffic Safety Products |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (17) | 8/31/2015 |
| 13.00% | 3/31/2022 | 2,023 | 2,023 | 1,072 | |||
|
|
| Preferred Member Units |
| 3/15/2019 | 16,500 |
|
| 1,100 | - | ||||
|
|
| Preferred Member Units |
| 9/1/2015 | 1,000 |
|
| 1,500 | - | ||||
|
|
|
|
|
|
|
|
|
| 4,623 | 1,072 | |||
Mystic Logistics Holdings, LLC |
| Logistics and Distribution Services Provider for Large Volume Mailers |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt |
| 8/18/2014 |
| 10.00% | 1/31/2024 | 1,524 | 1,524 | 1,524 | |||
|
|
| Common Stock | (8) | 8/18/2014 | 1,468 |
|
| 680 | 4,053 | ||||
|
|
|
|
|
|
|
|
|
| 2,204 | 5,577 | |||
NexRev LLC |
| Provider of Energy Efficiency Products & Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt |
| 2/28/2018 |
| 11.00% | 2/28/2025 | 3,066 | 3,015 | 2,066 | |||
|
|
| Preferred Member Units | (8) | 2/28/2018 | 25,786,046 |
|
| 2,053 | 230 | ||||
|
|
|
|
|
|
|
|
|
| 5,068 | 2,296 | |||
NuStep, LLC |
| Designer, Manufacturer and Distributor of Fitness Equipment |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 1/31/2017 |
| 7.63% (L+6.50%, Floor 1.00%) | 1/31/2025 | 800 | 798 | 800 | |||
|
|
| Secured Debt |
| 1/31/2017 |
| 12.00% | 1/31/2025 | 4,610 | 4,601 | 4,610 | |||
|
|
| Preferred Member Units |
| 1/31/2017 | 102 |
|
| 2,550 | 2,890 | ||||
|
|
|
|
|
|
|
|
|
| 7,949 | 8,300 |
7
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
June 30, 2022
(dollars in thousands)
(Unaudited)
Oneliance, LLC |
| Construction Cleaning Company |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 8/6/2021 |
| 12.06% (L+11.00%, Floor 1.00%) | 8/6/2026 | 1,400 | 1,377 | 1,377 | |||
|
|
| Preferred Stock |
| 8/6/2021 | 264 |
|
| 264 | 264 | ||||
|
|
|
|
|
|
|
|
|
| 1,641 | 1,641 | |||
Orttech Holdings, LLC |
| Distributor of Industrial Clutches, Brakes and Other Components |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 7/30/2021 |
| 12.00% (L+11.00%, Floor 1.00%) | 7/31/2026 | 5,994 | 5,892 | 5,892 | |||
|
|
| Preferred Stock | (8) (23) | 7/30/2021 | 2,500 |
|
| 2,500 | 2,500 | ||||
|
|
|
|
|
|
|
|
|
| 8,392 | 8,392 | |||
Robbins Bros. Jewelry, Inc. |
| Bridal Jewelry Retailer |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 12/15/2021 |
| 12.00% (L+11.00%, Floor 1.00%) | 12/15/2026 | 4,015 | 3,934 | 3,934 | |||
|
|
| Preferred Equity |
| 12/15/2021 | 1,230 |
|
| 1,230 | 1,750 | ||||
|
|
|
|
|
|
|
|
|
| 5,164 | 5,684 | |||
SI East, LLC |
| Rigid Industrial Packaging Manufacturing |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt |
| 8/31/2018 |
| 10.25% | 8/31/2023 | 21,454 | 21,325 | 21,454 | |||
|
|
| Preferred Member Units | (8) | 8/31/2018 | 52 |
|
| 406 | 4,280 | ||||
|
|
|
|
|
|
|
|
|
| 21,731 | 25,734 | |||
Sonic Systems International, LLC | (10) | Nuclear Power Staffing Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 8/20/2021 |
| 8.50% (L+7.50%, Floor 1.00%) | 8/20/2026 | 18,425 | 18,104 | 17,833 | |||
|
|
| Common Stock |
| 8/20/2021 | 11,647 |
|
| 1,584 | 1,650 | ||||
|
|
|
|
|
|
|
|
|
| 19,688 | 19,483 | |||
Tedder Industries, LLC |
| Manufacturer of Firearm Holsters and Accessories |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt |
| 8/31/2018 |
| 12.00% | 8/31/2022 | 460 | 459 | 460 | |||
|
|
| Secured Debt |
| 8/31/2018 |
| 12.00% | 8/31/2023 | 3,800 | 3,789 | 3,796 | |||
|
|
| Preferred Member Units |
| 8/31/2018 | 129 |
|
| 2,200 | 1,828 | ||||
|
|
|
|
|
|
|
|
|
| 6,448 | 6,084 | |||
Trantech Radiator Topco, LLC |
| Transformer Cooling Products and Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt |
| 5/31/2019 |
| 12.00% | 5/31/2024 | 2,080 | 2,047 | 2,080 | |||
|
|
| Common Stock | (8) | 5/31/2019 | 154 |
|
| 1,164 | 2,020 | ||||
|
|
|
|
|
|
|
|
|
| 3,211 | 4,100 | |||
VVS Holdco LLC |
| Omnichannel Retailer of Animal Health Products |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (23) | 12/1/2021 |
| 11.50% | 12/1/2026 | 7,600 | 7,391 | 7,391 | |||
|
|
| Preferred Equity | (8) (23) | 12/1/2021 | 2,960 |
|
| 2,960 | 3,020 | ||||
|
|
|
|
|
|
|
|
|
| 10,351 | 10,411 | |||
Subtotal Affiliate Investments (40.5% of net assets at fair value) |
|
|
|
|
|
|
|
|
| 221,056 | 245,731 |
8
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
June 30, 2022
(dollars in thousands)
(Unaudited)
Portfolio Company (1) (20) | Business Description | Type of Investment (2) (3) (15) | Investment Date (22) | Shares/Units | Rate (32) | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||||
Non-Control/Non-Affiliate Investments (7) |
|
|
|
|
|
|
|
|
|
|
| |||
AAC Holdings, Inc. | (11) | Substance Abuse Treatment Service Provider |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (19) | 12/11/2020 |
| 18.00% PIK | 6/25/2025 | 3,785 | $ | 3,533 | $ | 3,596 | |
|
|
| Common Stock |
| 12/11/2020 | 593,927 |
|
| 3,148 | 800 | ||||
|
|
| Warrants | (27) | 12/11/2020 | 197,717 |
| 12/11/2025 | — | 264 | ||||
|
|
|
|
|
|
|
|
|
| 6,681 | 4,660 | |||
Acumera, Inc. | (10) | Managed Security Service Provider |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 6/28/2022 |
| 10.56% (L+9.50%, Floor 1.00%) | 10/26/2027 | 5,609 | 5,459 | 5,459 | |||
|
|
|
|
|
|
|
|
|
| |||||
Adams Publishing Group, LLC | (10) | Local Newspaper Operator |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt |
| 3/11/2022 |
| 10.75% | 3/11/2027 | 94 | 94 | 94 | |||
|
|
| Secured Debt | (9) | 3/11/2022 |
| 8.72% (L+7.00%, Floor 1.00%) | 3/11/2027 | 2,979 | 2,971 | 2,971 | |||
|
|
|
|
|
|
|
|
|
| 3,065 | 3,065 | |||
ADS Tactical, Inc. | (11) | Value-Added Logistics and Supply Chain Provider to the Defense Industry |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 3/29/2021 |
| 7.20% (L+5.75%, Floor 1.00%) | 3/19/2026 | 9,375 | 9,224 | 8,668 | |||
|
|
|
|
|
|
|
|
|
| |||||
American Health Staffing Group, Inc. | (10) | Healthcare Temporary Staffing |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 11/19/2021 |
| 8.01% (L+6.00%, Floor 1.00%) | 11/19/2026 | 8,313 | 8,224 | 7,905 | |||
|
|
|
|
|
|
|
|
|
| |||||
American Nuts, LLC | (10) | Roaster, Mixer and Packager of Bulk Nuts and Seeds |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) (32) | 3/11/2022 |
| 7.75% (SOFR+6.75%, Floor 1.00%) | 4/10/2026 | 5,964 | 5,911 | 5,911 | |||
|
|
| Secured Debt | (9) (32) | 3/11/2022 |
| 9.75% (SOFR+8.75%, Floor 1.00%) | 4/10/2026 | 5,964 | 5,911 | 5,911 | |||
|
|
|
|
|
|
|
|
|
| 11,822 | 11,822 | |||
American Teleconferencing Services, Ltd. | (11) | Provider of Audio Conferencing and Video Collaboration Solutions |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) (14) | 9/17/2021 |
| 7.50% (L+6.50%, Floor 1.00%) | 6/30/2022 | 2,425 | 2,375 | 139 | |||
|
|
| Secured Debt | (9) (14) | 5/19/2016 |
| 7.50% (L+6.50%, Floor 1.00%) | 6/28/2023 | 11,693 | 11,451 | 672 | |||
|
|
|
|
|
|
|
|
|
| 13,826 | 811 | |||
ArborWorks, LLC | (10) | Vegetation Management Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 11/9/2021 |
| 9.00% (L+7.00%, Floor 1.00%) | 11/9/2026 | 1,491 | 1,426 | 1,358 | |||
|
|
| Secured Debt | (9) | 11/9/2021 |
| 8.37% (L+7.00%, Floor 1.00%) | 11/9/2026 | 16,028 | 15,748 | 14,601 | |||
|
|
| Common Equity |
| 11/9/2021 | 124 |
|
| 124 | 7 | ||||
9
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
June 30, 2022
(dollars in thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
| 17,298 | 15,966 | |||
ATS Operating, LLC | (10) | For-Profit Thrift Retailer |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) (32) | 1/18/2022 |
| 6.50%(SOFR+5.50%, Floor 1.00%) | 1/18/2027 | 925 | 905 | 905 | |||
|
|
| Secured Debt | (9) (32) | 1/18/2022 |
| 8.50%(SOFR+7.50%, Floor 1.00%) | 1/18/2027 | 925 | 905 | 905 | |||
|
|
| Common Stock |
| 1/18/2022 | 100,000 |
|
| 100 | 100 | ||||
|
|
|
|
|
|
|
|
|
| 1,910 | 1,910 | |||
AVEX Aviation Holdings, LLC | (10) | Specialty Aircraft Dealer |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 12/15/2021 |
| 8.82% (L+7.00%, Floor 1.00%) | 12/15/2026 | 1,692 | 1,661 | 1,555 | |||
|
|
| Secured Debt | (9) | 12/15/2021 |
| 9.06% (L+7.00%, Floor 1.00%) | 12/15/2026 | 200 | 191 | 184 | |||
|
|
| Common Equity |
| 12/15/2021 | 50 |
|
| 50 | 36 | ||||
|
|
|
|
|
|
|
|
|
| 1,902 | 1,775 | |||
BBB Tank Services, LLC |
| Maintenance, Repair and Construction Services to the Above-Ground Storage Tank Market |
|
|
|
|
|
|
|
| ||||
|
|
| Unsecured Debt | (9) (17) | 4/8/2016 |
| 12.06% (L+11.00%, Floor 1.00%) | 4/8/2021 | 1,200 | 1,200 | 575 | |||
|
|
| Preferred Stock (non-voting) | (19) | 12/17/2018 |
| 15.00% PIK |
| 41 | — | ||||
|
|
| Member Units |
| 4/8/2016 | 200,000 |
|
| 200 | — | ||||
|
|
|
|
|
|
|
|
|
| 1,441 | 575 | |||
Berry Aviation, Inc. | (10) | Charter Airline Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (19) | 7/6/2018 |
| 12.00% (10.50% Cash, 1.50% PIK) | 1/6/2024 | 188 | 187 | 188 | |||
|
|
| Preferred Member Units | (8) (19) (23) | 11/12/2019 | 122,416 | 16.00% PIK |
| 182 | 372 | ||||
|
|
| Preferred Member Units | (8) (19) (23) | 7/6/2018 | 1,548,387 | 8.00% PIK |
| 2,076 | 4,475 | ||||
|
|
|
|
|
|
|
|
|
| 2,445 | 5,035 | |||
Bettercloud, Inc. | (10) | SaaS Provider of Workflow Management and Business Application Solutions |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) (19) (32) | 6/30/2022 |
| 8.53% (1.00% Cash, 7.53% PIK) (SOFR+7.25%, Floor 0.75%) | 6/30/2028 | 7,784 | 7,604 | 7,604 | |||
|
|
|
|
|
|
|
|
|
| |||||
Binswanger Enterprises, LLC | (10) | Glass Repair and Installation Service Provider |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) (32) | 3/10/2017 |
| 10.12% (SOFR+8.50%, Floor 1.00%) | 6/10/2024 | 11,807 | 11,735 | 11,658 | |||
|
|
| Member Units |
| 3/10/2017 | 1,050,000 |
|
| 1,050 | 560 | ||||
|
|
|
|
|
|
|
|
|
| 12,785 | 12,218 | |||
Bluestem Brands, Inc. | (11) | Multi-Channel Retailer of General Merchandise |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 8/28/2020 |
| 10.00% (L+8.50%, Floor 1.50%) | 8/28/2025 | 5,745 | 5,745 | 5,733 | |||
|
|
| Common Stock | (8) | 10/1/2020 | 700,446 |
|
| — | 5,607 | ||||
|
|
|
|
|
|
|
|
|
| 5,745 | 11,340 | |||
Boccella Precast Products LLC |
| Manufacturer of Precast Hollow Core Concrete |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt |
| 9/23/2021 |
| 10.00% | 2/28/2027 | 80 | 80 | 80 | |||
|
|
| Member Units | (8) | 6/30/2017 | 540,000 |
|
| 564 | 1,127 | ||||
|
|
|
|
|
|
|
|
|
| 644 | 1,207 | |||
Brightwood Capital Fund Investments | (12) (13) | Investment Partnership |
|
|
|
|
|
|
|
|
10
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
June 30, 2022
(dollars in thousands)
(Unaudited)
|
|
| LP Interests (Brightwood Capital Fund III, LP) | (8) (24) | 7/21/2014 | 0.5% |
|
| 2,449 | 1,485 | ||||
|
|
| LP Interests (Brightwood Capital Fund IV, LP) | (8) (24) | 10/26/2016 | 1.2% |
|
| 8,737 | 8,788 | ||||
|
|
|
|
|
|
|
|
|
| 11,186 | 10,273 | |||
Buca C, LLC |
| Casual Restaurant Group |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 6/30/2015 |
| 10.37% (L+9.25%, Floor 1.00%) | 6/30/2023 | 12,350 | 12,350 | 8,888 | |||
|
|
| Preferred Member Units | (19) | 6/30/2015 | 4 | 6.00% PIK |
| 3,040 | — | ||||
|
|
|
|
|
|
|
|
|
| 15,390 | 8,888 | |||
Burning Glass Intermediate Holding Company, Inc. | (10) | Provider of Skills-Based Labor Market Analytics |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 6/14/2021 |
| 6.12% (L+5.00%, Floor 1.00%) | 6/10/2026 | 620 | 598 | 608 | |||
|
|
| Secured Debt | (9) | 6/14/2021 |
| 6.06% (L+5.00%, Floor 1.00%) | 6/10/2028 | 13,322 | 13,119 | 13,084 | |||
|
|
|
|
|
|
|
|
|
| 13,717 | 13,692 | |||
Cadence Aerospace LLC | (10) | Aerostructure Manufacturing |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) (19) (30) | 11/14/2017 |
| 9.49% Cash, 0.24% PIK | 11/14/2023 | 20,193 | 20,120 | 19,783 | |||
|
|
|
|
|
|
|
|
|
| |||||
CAI Software LLC |
| Provider of Specialized Enterprise Resource Planning Software |
|
|
|
|
|
|
|
| ||||
|
|
| Preferred Equity | 12/13/2021 | 379,338 |
|
| 379 | 379 | |||||
|
|
| Preferred Equity |
| 12/13/2021 | 126,446 |
|
| — | — | ||||
|
|
|
|
|
|
|
|
|
| 379 | 379 | |||
Camin Cargo Control, Inc. | (11) | Provider of Mission Critical Inspection, Testing and Fuel Treatment Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 6/14/2021 |
| 7.86% (L+6.50%, Floor 1.00%) | 6/4/2026 | 7,669 | 7,605 | 7,630 | |||
|
|
|
|
|
|
|
|
|
| |||||
Career Team Holdings, LLC |
| Provider of Workforce Training and Career Development Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt |
| 12/17/2021 |
| 12.50% | 12/17/2026 | 2,250 | 2,187 | 2,187 | |||
|
|
| Common Stock |
| 12/17/2021 | 50,000 |
|
| 500 | 500 | ||||
|
|
|
|
|
|
|
|
|
| 2,687 | 2,687 | |||
CaseWorthy, Inc. | (10) | SaaS Provider of Case Management Solutions |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) (32) | 5/18/2022 |
| 7.46% (SOFR+6.00%, Floor 1.00%) | 5/18/2027 | 2,000 | 1,976 | 1,976 | |||
|
|
|
|
|
|
|
|
|
| |||||
Cenveo Corporation | (11) | Provider of Digital Marketing Agency Services |
|
|
|
|
|
|
|
| ||||
|
|
| Common Stock |
| 9/7/2018 | 253,194 |
|
| 4,848 | 5,662 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Channel Partners Intermediateco, LLC | (10) | Outsourced Consumer |
|
|
|
|
|
|
|
|
11
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
June 30, 2022
(dollars in thousands)
(Unaudited)
Services Provider | ||||||||||||||
|
|
| Secured Debt | (9) (32) | 2/7/2022 |
| 8.00% (SOFR+6.50%, Floor 1.00%) | 2/7/2027 | 477 | 466 | 466 | |||
|
|
| Secured Debt | (9) | 2/7/2022 |
| 7.74% | 2/7/2027 | 3,609 | 3,542 | 3,542 | |||
|
|
|
|
|
|
|
|
|
| 4,008 | 4,008 | |||
Clarius BIGS, LLC | (10) | Prints & Advertising Film Financing |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (14) (17) (19) | 9/23/2014 |
| 15.00% PIK | 1/5/2015 | 2,750 | 2,406 | 17 | |||
|
|
|
|
|
|
|
|
|
| |||||
Classic H&G Holdings, LLC |
| Provider of Engineered Packaging Solutions |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 3/12/2020 |
| 7.00% (L+6.00%, Floor 1.00%) | 3/12/2025 | 1,390 | 1,374 | 1,390 | |||
|
|
| Secured Debt |
| 3/12/2020 |
| 8.00% | 3/12/2025 | 4,819 | 4,733 | 4,819 | |||
|
|
| Preferred Member Units | (8) | 3/12/2020 | 39 |
|
| 1,440 | 5,950 | ||||
|
|
|
|
|
|
|
|
|
| 7,547 | 12,159 | |||
Computer Data Source, LLC | (10) | Third Party Maintenance Provider to the Data Center Ecosystem |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 8/6/2021 |
| 8.87% (L+7.50%, Floor 1.00%) | 8/6/2026 | 19,886 | 19,555 | 18,624 | |||
|
|
|
|
|
|
|
|
|
| |||||
Construction Supply Investments, LLC | (10) | Distribution Platform of Specialty Construction Materials to Professional Concrete and Masonry Contractors |
|
|
|
|
|
|
|
| ||||
|
|
| Member Units | (8) | 12/29/2016 | 861,618 |
|
| 3,335 | 19,320 | ||||
|
|
|
|
|
|
|
|
|
| |||||
DMA Industries, LLC |
| Distributor of aftermarket ride control products |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt |
| 11/19/2021 |
| 12.00% | 11/19/2026 | 5,300 | 5,206 | 5,300 | |||
|
|
| Preferred Equity |
| 11/19/2021 | 1,486 |
|
| 1,486 | 1,730 | ||||
|
|
|
|
|
|
|
|
|
| 6,692 | 7,030 | |||
DTE Enterprises, LLC | (10) | Industrial Powertrain Repair and Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 4/13/2018 |
| 9.00% (L+7.50%, Floor 1.50%) | 4/13/2023 | 8,619 | 8,587 | 8,149 | |||
|
|
| Class AA Preferred Member Units (non-voting) | (8) (19) | 4/13/2018 |
| 10.00% PIK |
| 1,104 | 1,104 | ||||
|
|
| Class A Preferred Member Units | (19) | 4/13/2018 | 776,316 | 8.00% PIK |
| 776 | 180 | ||||
|
|
|
|
|
|
|
|
|
| 10,467 | 9,433 | |||
Dynamic Communities, LLC | (10) | Developer of Business Events and Online Community Groups |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 7/17/2018 |
| 10.13% (L+8.50%, Floor 1.00%) | 7/17/2023 | 5,611 | 5,584 | 5,049 | |||
|
|
|
|
|
|
|
|
|
| |||||
Emerald Technologies Acquisition Co, Inc. | (11) | Design & Manufacturing |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) (32) | 2/10/2022 |
| 7.25% (SOFR+6.25%, Floor 0.75%) | 2/10/2028 | 2,484 | 2,437 | 2,410 | |||
|
|
|
|
|
|
|
|
|
| |||||
Engineering Research & Consulting, LLC | (10) | Provider of Engineering & |
|
|
|
|
|
|
|
|
12
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
June 30, 2022
(dollars in thousands)
(Unaudited)
Consulting Services to US Department of Defense | ||||||||||||||
|
|
| Secured Debt | (9) | 5/23/2022 |
| 9.50% (Prime+5.50%, Floor 0.75%) | 5/23/2027 | 269 | 253 | 253 | |||
|
|
| Secured Debt | (9) | 5/23/2022 |
| 9.50% (Prime+5.50%, Floor 0.75%) | 5/23/2028 | 5,172 | 5,070 | 5,070 | |||
|
|
|
|
|
|
|
|
|
| 5,323 | 5,323 | |||
EPIC Y-Grade Services, LP | (11) | NGL Transportation & Storage |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 6/22/2018 |
| 8.08% (L+6.00%, Floor 1.00%) | 6/30/2027 | 6,857 | 6,787 | 6,017 | |||
|
|
|
|
|
|
|
|
|
| |||||
Event Holdco, LLC | (10) | Event and Learning Management Software for Healthcare Organizations and Systems |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) (23) | 12/22/2021 |
| 8.00% (L+7.00%, Floor 1.00%) | 12/22/2026 | 308 | 305 | 293 | |||
|
|
| Secured Debt | (9) (23) | 12/22/2021 |
| 7.75% (L+6.75%, Floor 1.00%) | 12/22/2026 | 3,692 | 3,659 | 3,520 | |||
|
|
|
|
|
|
|
|
|
| 3,964 | 3,813 | |||
Flip Electronics LLC | (10) | Distributor of Hard-to-Find and Obsolete Electronic Components |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) (32) | 1/4/2021 |
| 9.60% (SOFR+7.50%, Floor 1.00%) | 1/2/2026 | 6,873 | 6,741 | 6,741 | |||
|
|
| Secured Debt | (9) (32) | 3/24/2022 |
| 8.50% (SOFR+7.50%, Floor 1.00%) | 1/2/2026 | 273 | 273 | 273 | |||
|
|
|
|
|
|
|
|
|
| 7,014 | 7,014 | |||
Hawk Ridge Systems, LLC |
| Value-Added Reseller of Engineering Design and Manufacturing Solutions |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 12/2/2016 |
| 7.13% (L+6.00%, Floor 1.00%) | 1/15/2026 | 646 | 646 | 646 | |||
|
|
| Secured Debt |
| 12/2/2016 |
| 8.00% | 1/15/2026 | 7,450 | 7,396 | 7,450 | |||
|
|
| Preferred Member Units | (8) | 12/2/2016 | 56 |
|
| 713 | 5,010 | ||||
|
|
| Preferred Member Units | (23) | 12/2/2016 | 56 |
|
| 38 | 260 | ||||
|
|
|
|
|
|
|
|
|
| 8,793 | 13,366 | |||
HDC/HW Intermediate Holdings | (10) | Managed Services and Hosting Provider |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 12/21/2018 |
| 8.51% (L+7.50%, Floor 1.00%) | 12/21/2023 | 1,934 | 1,921 | 1,719 | |||
|
|
|
|
|
|
|
|
|
| |||||
Hybrid Promotions, LLC | (10) | Wholesaler of Licensed, Branded and Private Label Apparel |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) (32) | 6/30/2021 |
| 9.25% (SOFR+8.25%, Floor 1.00%) | 6/30/2026 | 7,875 | 7,746 | 7,277 | |||
|
|
|
|
|
|
|
|
|
| |||||
IG Parent Corporation | (11) | Software Engineering |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 7/30/2021 |
| 6.96% (L+5.75%, Floor 1.00%) | 7/30/2026 | 125 | 105 | 121 | |||
|
|
| Secured Debt | (9) | 7/30/2021 |
| 6.99% (L+5.75%, Floor 1.00%) | 7/30/2026 | 6,362 | 6,281 | 6,137 | |||
|
|
|
|
|
|
|
|
|
| 6,386 | 6,258 |
13
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
June 30, 2022
(dollars in thousands)
(Unaudited)
Implus Footcare, LLC | (10) | Provider of Footwear and Related Accessories |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) (19) | 6/1/2017 |
| 9.01% (8.76% Cash, 0.25% PIK) (0.25% PIK + L+7.75%, Floor 1.00%) | 4/30/2024 | 17,007 | 16,997 | 15,691 | |||
|
|
|
|
|
|
|
|
|
| |||||
Independent Pet Partners Intermediate Holdings, LLC | (10) | Omnichannel Retailer of Specialty Pet Products |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (19) | 12/10/2020 |
| 6.00% PIK | 11/20/2023 | 10,902 | 10,443 | 10,129 | |||
|
|
| Preferred Stock (non-voting) | (19) | 12/10/2020 |
| 6.00% PIK |
| 2,470 | 2,200 | ||||
|
|
| Preferred Stock (non-voting) |
| 12/10/2020 |
|
|
| — | — | ||||
|
|
| Member Units |
| 11/20/2018 | 185,757 |
|
| — | — | ||||
|
|
|
|
|
| 1,191,667 |
|
| 1,192 | 1,192 | — | |||
|
|
|
|
|
|
|
|
|
| 14,105 | 12,329 | |||
Industrial Services Acquisition, LLC | (10) | Industrial Cleaning Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 8/13/2021 |
| 8.38% (L+6.75%, Floor 1.00%) | 8/13/2026 | 387 | 355 | 355 | |||
|
|
| Secured Debt | (9) | 8/13/2021 |
| 7.81% (L+6.75%, Floor 1.00%) | 8/13/2026 | 17,929 | 17,628 | 17,604 | |||
|
|
| Preferred Member Units | (8) (19) (23) | 1/31/2018 | 336 | 10.00% PIK |
| 291 | 371 | ||||
|
|
| Preferred Member Units | (8) (19) (23) | 5/17/2019 | 187 | 20.00% PIK |
| 202 | 229 | ||||
|
|
| Member Units | (23) | 6/17/2016 | 2,100 |
|
| 2,100 | 1,620 | ||||
|
|
|
|
|
|
|
|
|
| 20,576 | 20,179 | |||
Infolinks Media Buyco, LLC | (10) | Exclusive Placement Provider to the Advertising Ecosystem |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 11/1/2021 |
| 6.76% (L+5.75%, Floor 1.00%) | 11/1/2026 | 10,796 | 10,553 | 10,384 | |||
|
|
|
|
|
|
|
|
|
| |||||
Interface Security Systems, L.L.C | (10) | Commercial Security & Alarm Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 12/9/2021 |
| 11.75% (L+10.00%, Floor 1.75%) | 8/7/2023 | 938 | 938 | 938 | |||
|
|
| Secured Debt | (9) (14) (19) | 8/7/2019 |
| 9.75% PIK (L+8.00% PIK, Floor 1.75%) | 8/7/2023 | 7,334 | 7,254 | 3,561 | |||
|
|
| Common Stock |
| 12/7/2021 | 2,143 |
|
| — | — | ||||
|
|
|
|
|
|
|
|
|
| 8,192 | 4,499 | |||
Intermedia Holdings, Inc. | (11) | Unified Communications as a Service |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 8/3/2018 |
| 7.36% (L+6.00%, Floor 1.00%) | 7/19/2025 | 5,650 | 5,641 | 5,339 | |||
|
|
|
|
|
|
|
|
|
| |||||
Invincible Boat Company, LLC. | (10) | Manufacturer of Sport Fishing Boats |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 8/28/2019 |
| 8.73% (L+6.50%, Floor 1.50%) | 8/28/2025 | 311 | 306 | 306 | |||
|
|
| Secured Debt | (9) | 8/28/2019 |
| 8.00% (L+6.50%, Floor 1.50%) | 8/28/2025 | 17,148 | 17,032 | 16,494 | |||
|
|
|
|
|
|
|
|
|
| 17,338 | 16,800 | |||
INW Manufacturing, LLC | (11) | Manufacturer of Nutrition and Wellness Products |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 5/19/2021 |
| 7.38% (L+5.75%, Floor 0.75%) | 3/25/2027 | 7,172 | 6,989 | 6,777 | |||
|
|
|
|
|
|
|
|
|
| |||||
Iron-Main Investments, LLC |
| Consumer Reporting Agency |
|
|
|
|
|
|
|
|
14
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
June 30, 2022
(dollars in thousands)
(Unaudited)
Providing Employment Background Checks and Drug Testing | ||||||||||||||
|
|
| Secured Debt |
| 8/2/2021 |
| 12.50% | 11/15/2026 | 1,150 | 1,121 | 1,121 | |||
|
|
| Secured Debt |
| 9/1/2021 |
| 12.50% | 11/15/2026 | 800 | 780 | 780 | |||
|
|
| Secured Debt |
| 11/15/2021 |
| 12.50% | 11/15/2026 | 7,236 | 7,104 | 7,104 | |||
|
|
| Common Stock |
| 8/3/2021 | 44,944 |
|
| 449 | 449 | ||||
|
|
|
|
|
|
|
|
|
| 9,454 | 9,454 | |||
Isagenix International, LLC | (11) | Direct Marketer of Health & Wellness Products |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 6/21/2018 |
| 7.34% (L+5.75%, Floor 1.00%) | 6/14/2025 | 4,951 | 4,927 | 2,966 | |||
|
|
|
|
|
|
|
|
|
| |||||
Jackmont Hospitality, Inc. | (10) | Franchisee of Casual Dining Restaurants |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 5/26/2015 |
| 7.51% (L+6.50%, Floor 1.00%) | 11/4/2024 | 4,189 | 4,189 | 3,995 | |||
|
|
| Preferred Equity | (8) | 11/8/2021 | 5,653,333 |
|
| 216 | 1,220 | ||||
|
|
|
|
|
|
|
|
|
| 4,405 | 5,215 | |||
Joerns Healthcare, LLC | (11) | Manufacturer and Distributor of Health Care Equipment & Supplies |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 8/21/2019 |
| 7.55% (L+6.00%, Floor 1.00%) | 8/21/2024 | 3,351 | 3,325 | 2,181 | |||
|
|
| Secured Debt | (19) | 11/15/2021 |
| 15.00% PIK | 11/8/2022 | 1,489 | 1,489 | 1,489 | |||
|
|
| Common Stock |
| 8/21/2019 | 392,514 |
|
| 3,678 | — | ||||
|
|
|
|
|
|
|
|
|
| 8,492 | 3,670 | |||
Johnson Downie Opco, LLC |
| Executive Search Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 12/10/2021 |
| 13.00% (L+11.50%, Floor 1.50%) | 12/10/2026 | 1,160 | 1,135 | 1,160 | |||
|
|
| Preferred Equity | (8) | 12/10/2021 | 350 |
|
| 350 | 650 | ||||
|
|
|
|
|
|
|
|
|
| 1,485 | 1,810 | |||
JorVet Holdings, LLC |
| Supplier and Distributor of Veterinary Equipment and Supplies |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt |
| 3/28/2022 |
| 12.00% | 3/28/2027 | 2,850 | 2,797 | 2,797 | |||
|
|
| Common Stock |
| 3/28/2022 | 11,934 |
|
| 1,193 | 1,193 | ||||
|
|
|
|
|
|
|
|
|
| 3,990 | 3,990 | |||
JTI Electrical & Mechanical, LLC | (10) | Electrical, Mechanical and Automation Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 12/22/2021 |
| 7.01% (L+6.00%, Floor 1.00%) | 12/22/2026 | 3,118 | 3,050 | 3,030 | |||
|
|
| Common Equity |
| 12/22/2021 | 140,351 |
|
| 140 | 150 | ||||
|
|
|
|
|
|
|
|
|
| 3,190 | 3,180 | |||
KMS, LLC | (10) | Wholesaler of Closeout and Value-priced Products |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 10/4/2021 |
| 8.31% (L+7.25%, Floor 1.00%) | 10/4/2026 | 9,429 | 9,267 | 8,676 | |||
|
|
| Secured Debt | (9) | 10/4/2021 |
| 9.31% (L+7.25%, Floor 1.00%) | 10/4/2026 | 1,357 | 1,267 | 1,267 | |||
|
|
|
|
|
|
|
|
|
| 10,534 | 9,943 | |||
Knight Energy Services LLC | (11) | Oil and Gas Equipment & Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (19) | 1/9/2015 |
| 8.50% PIK | 2/9/2024 | 1,003 | 1,003 | 788 | |||
|
|
| Common Stock |
| 11/14/2018 | 25,692 |
|
| 1,843 | — | ||||
|
|
|
|
|
|
|
|
|
| 2,846 | 788 |
15
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
June 30, 2022
(dollars in thousands)
(Unaudited)
Laredo Energy, LLC | (10) | Oil & Gas Exploration & Production |
|
|
|
|
|
|
|
| ||||
|
|
| Member Units |
| 5/4/2020 | 1,155,952 |
|
| 11,560 | 11,383 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Lightbox Holdings, L.P. | (11) | Provider of Commercial Real Estate Software |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt |
| 5/23/2019 |
| 6.63% (L+5.00%) | 5/9/2026 | 5,856 | 5,807 | 5,709 | |||
|
|
|
|
|
|
|
|
|
| |||||
LL Management, Inc. | (10) | Medical Transportation Service Provider |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) (32) | 5/2/2019 |
| 8.25% (SOFR+7.25%, Floor 1.00%) | 9/25/2023 | 14,260 | 14,206 | 14,140 | |||
|
|
| Secured Debt | (9) (32) | 5/12/2022 |
| 8.25% (SOFR+7.25%, Floor 1.00%) | 9/25/2023 | 8,929 | 8,803 | 8,803 | |||
|
|
|
|
|
|
|
|
|
| 23,009 | 22,943 | |||
LLFlex, LLC | (10) | Provider of Metal-Based Laminates |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 8/16/2021 |
| 10.00% (L+9.00%, Floor 1.00%) | 8/16/2026 | 4,950 | 4,857 | 4,589 | |||
|
|
|
|
|
|
|
|
|
| |||||
Logix Acquisition Company, LLC | (10) | Competitive Local Exchange Carrier |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 1/8/2018 |
| 6.81% (L+5.75%, Floor 1.00%) | 12/22/2024 | 9,506 | 9,468 | 8,858 | |||
|
|
|
|
|
|
|
|
|
| |||||
Mac Lean-Fogg Company | (10) | Manufacturer and Supplier for Auto and Power Markets |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 4/22/2019 |
| 6.06% (L+5.25%, Floor 0.625%) | 12/22/2025 | 7,263 | 7,233 | 6,974 | |||
|
|
| Preferred Stock | (19) | 10/1/2019 |
| 13.75% (4.50% Cash, 9.25% PIK) |
| 817 | 743 | ||||
|
|
|
|
|
|
|
|
| 8,050 | 7,717 | ||||
Mako Steel, LP | (10) | Self-Storage Design & Construction |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) (31) | 3/15/2021 |
| 8.81% (L+7.25%, Floor 0.75%) | 3/13/2026 | 2,840 | 2,779 | 2,654 | |||
|
|
| Secured Debt | (9) | 3/15/2021 |
| 8.38 % (L+7.25%, Floor 0.75%) | 3/13/2026 | 17,269 | 17,006 | 16,139 | |||
|
|
|
|
|
|
|
|
|
| 19,785 | 18,793 | |||
MB2 Dental Solutions, LLC | (11) | Dental Partnership Organization |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 1/28/2021 |
| 7.24% (L+6.00%, Floor 1.00%) | 1/29/2027 | 7,916 | 7,811 | 7,712 | |||
|
|
| Secured Debt | (9) (28) | 1/28/2021 |
| 7.52% | 1/29/2027 | 6,189 | 6,060 | 6,029 | |||
|
|
|
|
|
|
|
|
|
| 13,871 | 13,741 | |||
Microbe Formulas, LLC | (10) | Nutritional Supplements Provider |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) (32) | 4/4/2022 |
| 7.48% (SOFR+6.25%, Floor 1.00%) | 4/3/2028 | 3,653 | 3,576 | 3,576 | |||
|
|
|
|
|
|
|
|
|
| |||||
Mills Fleet Farm Group, LLC | (10) | Omnichannel Retailer of Work, Farm and Lifestyle Merchandise |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 10/24/2018 |
| 7.31% (L+6.25%, Floor 1.00%) | 10/24/2024 | 17,300 | 17,122 | 16,759 | |||
|
|
|
|
|
|
|
|
|
| |||||
MonitorUS Holding, LLC | (10) (13) (33) | SaaS Provider of Media Intelligence Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 5/24/2022 |
| 8.51% (L+7.00%, Floor 1.00%) | 5/24/2027 | 4,906 | 4,759 | 4,759 | |||
|
|
|
|
|
|
|
|
|
|
16
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
June 30, 2022
(dollars in thousands)
(Unaudited)
NinjaTrader, LLC | (10) | Operator of Futures Trading Platform |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 12/18/2019 |
| 7.25% (L+6.25%, Floor 1.00%) | 12/18/2024 | 16,875 | 16,647 | 16,506 | |||
|
|
|
|
|
|
|
|
|
| |||||
NNE Partners, LLC | (10) | Oil & Gas Exploration & Production |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt |
| 3/2/2017 |
| 10.31% (L+9.25%) | 12/31/2023 | 21,607 | 21,601 | 20,478 | |||
|
|
|
|
|
|
|
|
|
| |||||
NTM Acquisition Corp. | (11) | Provider of B2B Travel Information Content |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) (19) | 7/12/2016 |
| 8.26% (7.26% Cash, 1.00% PIK) (1.00%PIK + L+6.25%, Floor 1.00%) | 6/7/2024 | 4,157 | 4,153 | 4,011 | |||
|
|
|
|
|
|
|
|
|
| |||||
NWN Corporation | (10) | Value Added Reseller and Provider of Managed Services to a Diverse Set of Industries |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 5/7/2021 |
| 7.87% (L+6.50%, Floor 1.00%) | 5/7/2026 | 21,239 | 20,817 | 19,421 | |||
|
|
|
|
|
|
|
|
|
| |||||
OVG Business Services, LLC | (10) | Venue Management Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 11/29/2021 |
| 7.25% (L+6.25%, Floor 1.00%) | 11/19/2028 | 17,456 | 17,296 | 16,583 | |||
|
|
|
|
|
|
|
|
|
| |||||
Paragon Healthcare, Inc. | (10) | Infusion Therapy Treatment Provider |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) (32) | 1/19/2022 |
| 6.75% (SOFR+5.75%, Floor 1.00%) | 1/19/2027 | 2,446 | 2,352 | 2,352 | |||
|
|
|
|
|
|
|
|
|
| |||||
RA Outdoors LLC | (10) | Software Solutions Provider for Outdoor Activity Management |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) (32) | 4/8/2021 |
| 8.10% (SOFR+6.75%, Floor 1.00%) | 4/8/2026 | 12,917 | 12,758 | 11,481 | |||
|
|
|
|
|
|
|
|
|
| |||||
Research Now Group, Inc. and Survey Sampling International, LLC | (11) | Provider of Outsourced Online Surveying |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 12/29/2017 |
| 6.50% (L+5.50%, Floor 1.00%) | 12/20/2024 | 9,845 | 9,845 | 9,127 | |||
|
|
|
|
|
|
|
|
|
| |||||
RM Bidder, LLC | (10) | Scripted and Unscripted TV and Digital Programming Provider |
|
|
|
|
|
|
|
| ||||
|
|
| Member Units |
| 11/12/2015 | 1,854 |
|
| 31 | 23 | ||||
|
|
| Warrants | (26) | 11/12/2015 |
|
| 10/20/2025 | 284 | — | ||||
|
|
|
|
|
|
|
|
|
| 315 | 23 | |||
Roof Opco, LLC | (10) | Residential Re-Roofing/Repair |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 8/27/2021 |
| 7.00% (L+6.00%, Floor 1.00%) | 8/27/2026 | 3,500 | 3,425 | 3,199 | |||
|
|
| Secured Debt | (9) | 8/27/2021 |
| 7.01% (L+6.00%, Floor 1.00%) | 8/27/2026 | 2,411 | 2,324 | 2,215 | |||
|
|
|
|
|
|
|
|
|
| 5,749 | 5,414 |
17
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
June 30, 2022
(dollars in thousands)
(Unaudited)
Rug Doctor, LLC. | (10) | Carpet Cleaning Products and Machinery |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 7/16/2021 |
| 7.31% (L+6.25%, Floor 1.00%) | 11/16/2024 | 15,750 | 15,626 | 13,603 | |||
|
|
|
|
|
|
|
|
|
| |||||
Salient Partners L.P. | (11) | Provider of Asset Management Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 8/31/2018 |
| 7.01% (L+6.00%, Floor 1.00%) | 10/30/2022 | 6,251 | 6,278 | 4,920 | |||
|
|
| Secured Debt | (9) | 9/30/2021 |
| 7.00% (L+6.00%, Floor 1.00%) | 10/30/2022 | 1,250 | 1,250 | 2,435 | |||
|
|
|
|
|
|
|
|
|
| 7,528 | 7,355 | |||
Savers, Inc. | (11) | For-Profit Thrift Retailer |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 5/14/2021 |
| 7.13% (L+5.75%, Floor 0.75%) | 4/26/2028 | 4,303 | 4,290 | 4,070 | |||
|
|
|
|
|
|
|
|
|
| |||||
SIB Holdings, LLC | (10) | Provider of Cost Reduction Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 10/29/2021 |
| 7.58% (L+6.00%, Floor 1.00%) | 10/29/2026 | 10,616 | 10,412 | 10,412 | |||
|
|
| Common Equity |
| 10/29/2021 | 119,048 |
|
| 250 | 250 | ||||
|
|
|
|
|
|
|
|
|
| 10,662 | 10,662 | |||
Slick Innovations, LLC |
| Text Message Marketing Platform |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt |
| 9/13/2018 |
| 12.00% | 9/13/2023 | 1,160 | 1,088 | 1,160 | |||
|
|
| Common Stock |
| 9/13/2018 | 17,500 |
|
| 175 | 410 | ||||
|
|
| Warrants | (27) | 9/13/2018 | 4,521 |
| 9/13/2028 | 45 | 110 | ||||
|
|
|
|
|
|
|
|
|
| 1,308 | 1,680 | |||
South Coast Terminals Holdings, LLC | (10) | Specialty Toll Chemical Manufacturer |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 12/10/2021 |
| 7.51% (L+6.25%, Floor 1.00%) | 12/13/2026 | 3,540 | 3,470 | 3,470 | |||
|
|
| Common Equity |
| 12/10/2021 | 60,606 |
|
| 61 | 65 | ||||
|
|
|
|
|
|
|
|
|
| 3,531 | 3,535 | |||
Student Resource Center, LLC | (10) | Higher Education Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 6/25/2021 |
| 9.01% (L+8.00%, Floor 1.00%) | 6/25/2026 | 11,764 | 11,556 | 10,100 | |||
|
|
|
|
|
|
|
|
|
| |||||
Tex Tech Tennis, LLC | (10) | Sporting Goods & Textiles |
|
|
|
|
|
|
|
| ||||
|
|
| Common Stock | (23) | 7/7/2021 | 1,000,000 |
|
| 1,000 | 1,320 | ||||
|
|
|
|
|
|
|
|
|
| |||||
The Affiliati Network, LLC |
| Performance Marketing Solutions |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt |
| 8/9/2021 |
| 11.83% | 8/9/2026 | 2,940 | 2,881 | 2,881 | |||
|
|
| Preferred Stock | (8) | 8/9/2021 | 388,889 |
|
| 1,600 | 1,600 | ||||
|
|
|
|
|
|
|
|
|
| 4,481 | 4,481 | |||
U.S. TelePacific Corp. | (11) | Provider of Communications and Managed Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) (19) (29) (32) | 5/17/2017 |
| 9.25% (2.00% Cash, 7.25% PIK) (SOFR+1.00%, Floor 1.00%, 7.25% PIK) | 5/2/2026 | 12,941 | 12,864 | 5,500 | |||
|
|
|
|
|
|
|
|
|
| |||||
USA DeBusk LLC | (10) | Provider of Industrial Cleaning Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 10/22/2019 |
| 6.81% (L+5.75%, Floor 1.00%) | 9/8/2026 | 19,900 | 19,671 | 19,060 | |||
|
|
|
|
|
|
|
|
|
|
18
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
June 30, 2022
(dollars in thousands)
(Unaudited)
Vida Capital, Inc | (11) | Alternative Asset Manager |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt |
| 10/10/2019 |
| 7.36% (L+6.00%) | 10/1/2026 | 6,544 | 6,481 | 5,300 | |||
|
|
|
|
|
|
|
|
|
| |||||
Vistar Media, Inc. | (10) | Operator of Digital Out-of-Home Advertising Platform |
|
|
|
|
|
|
|
| ||||
|
|
| Preferred Stock |
| 4/3/2019 | 70,207 |
|
| 767 | 2,350 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Volusion, LLC |
| Provider of Online Software-as-a-Service eCommerce Solutions |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (17) | 1/26/2015 |
| 11.50% | 1/26/2020 | 7,322 | 7,322 | 7,322 | |||
|
|
| Unsecured Convertible Debt |
| 5/16/2018 |
| 8.00% | 11/16/2023 | 175 | 175 | 175 | |||
|
|
| Preferred Member Units |
| 1/26/2015 | 2,090,001 |
|
| 6,000 | 1,260 | ||||
|
|
| Warrants | (27) | 1/26/2015 | 784,867 |
| 1/26/2025 | 1,104 | — | ||||
|
|
|
|
|
|
|
|
|
| 14,601 | 8,757 | |||
VORTEQ Coil Finishers, LLC | (10) | Specialty Coating of Aluminum and Light-Gauge Steel |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 11/30/2021 |
| 8.26% (L+7.25%, Floor 1.00%) | 11/30/2026 | 18,990 | 18,652 | 18,510 | |||
|
|
| Common Equity | (8) | 11/30/2021 | 769,231 |
|
| 769 | 1,660 | ||||
|
|
|
|
|
|
|
|
|
| 19,421 | 20,170 | |||
Wall Street Prep, Inc. | (10) | Financial Training Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 7/19/2021 |
| 8.00% (L+7.00%, Floor 1.00%) | 7/19/2026 | 5,363 | 5,266 | 4,950 | |||
|
|
| Common Stock |
| 7/19/2021 | 500,000 |
|
| 500 | 500 | ||||
|
|
|
|
|
|
|
|
|
| 5,766 | 5,450 | |||
Watterson Brands, LLC | (10) | Facility Management Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 12/17/2021 |
| 7.01% (L+6.00%, Floor 1.00%) | 12/17/2026 | 4,152 | 4,079 | 4,079 | |||
|
|
|
|
|
|
|
|
|
| |||||
West Star Aviation Acquisition, LLC | (10) | Aircraft, Aircraft Engine and Engine Parts |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) (32) | 3/1/2022 |
| 6.75% (SOFR+6.0%, Floor 0.75%) | 3/1/2028 | 3,000 | 2,938 | 2,938 | |||
|
|
| Common Stock |
| 3/1/2022 | 200,000 |
|
| 200 | 200 | ||||
|
|
|
|
|
|
|
|
|
| 3,138 | 3,138 | |||
Winter Services LLC | (10) | Provider of Snow Removal and Ice Management Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 11/19/2021 |
| 8.00% (L+7.00%, Floor 1.00%) | 11/19/2026 | 12,500 | 12,182 | 11,778 | |||
|
|
|
|
|
|
|
|
|
| |||||
Xenon Arc, Inc. | (10) | Tech-enabled Distribution Services to Chemicals and Food Ingredients Primary Producers |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 12/17/2021 |
| 6.75% (L+6.00%, Floor 0.75%) | 12/17/2026 | 2,388 | 2,317 | 2,277 | |||
|
|
|
|
|
|
|
|
|
| |||||
YS Garments, LLC | (11) | Designer and Provider of |
|
|
|
|
|
|
|
|
19
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
June 30, 2022
(dollars in thousands)
(Unaudited)
Branded Activewear | ||||||||||||||
|
|
| Secured Debt | (9) (29) | 8/22/2018 |
| 6.54% (L+5.50%, Floor 1.00%) | 8/9/2024 | 6,376 | 6,351 | 6,153 | |||
|
|
|
|
|
|
|
|
|
| |||||
Zips Car Wash, LLC | (10) | Express Car Wash Operator |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 2/11/2022 |
| 8.26%(L+7.25%, Floor 1.00%) | 3/1/2024 | 2,400 | 2,355 | 2,355 | |||
|
|
| Secured Debt | (9) (32) | 2/11/2022 |
| 8.72% | 3/1/2024 | 548 | 543 | 543 | |||
|
|
|
|
|
|
|
|
|
| 2,898 | 2,898 | |||
Subtotal Non-Control/Non-Affiliate Investments (133.6% of net assets at fair value) |
|
|
|
|
|
|
|
|
| $ | 851,577 | $ | 810,780 | |
Total Portfolio Investments, June 30, 2022 (182.2% of net assets at fair value) |
|
|
|
|
|
|
|
|
| $ | 1,102,733 | $ | 1,105,677 | |
Short-Term Investments (16) |
|
|
|
|
|
|
|
|
|
| ||||
US Bank Money Market Account (21) | 2,498 | 2,498 | ||||||||||||
Total Short-Term Investments | $ | 2,498 | $ | 2,498 |
momitor
(1) | All investments are Lower Middle Market portfolio investments, unless otherwise noted. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Lower Middle Market portfolio investments. All of the Company’s investments, unless otherwise noted, are encumbered as security for one of the Company’s Credit Facilities. |
(2) | Debt investments are income producing, unless otherwise noted. Equity and warrants are non-income producing, unless otherwise noted by footnote (8), as described below. |
(3) | See Note C—Fair Value Hierarchy for Investments—Portfolio Composition and Schedule 12-14 for a summary of geographic location of portfolio companies. |
(4) | Principal is net of repayments. Cost is net of repayments and accumulated unearned income. |
(5) | Control investments are defined by the 1940 Act as investments in which more than 25% of the voting securities are owned or where the ability to nominate greater than 50% of the board representation is maintained. |
(6) | Affiliate investments are defined by the 1940 Act as investments in which between 5% and 25% (inclusive) of the voting securities are owned and the investments are not classified as Control investments. |
(7) | Non-Control/Non-Affiliate investments are defined by the 1940 Act as investments that are neither Control investments nor Affiliate investments. |
(8) | Income producing through dividends or distributions. |
(9) | Index based floating interest rate is subject to contractual minimum interest rate. A majority of the variable rate loans in the Company’s investment portfolio bear interest at a rate that may be determined by reference to either LIBOR, SOFR or an alternate Base Rate (commonly based on the Federal Funds Rate or the Prime Rate), which typically resets every one, three, or six months at the borrower’s option. As noted in this schedule, 74% of the loans (based on the par amount) contain LIBOR or Term SOFR ("SOFR") floors which range between 0.63% and 2.00%, with a weighted-average floor of 1.03%. |
(10) | Private Loan portfolio investment. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Private Loan portfolio investments. |
(11) | Middle Market portfolio investment. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Middle Market portfolio investments. |
(12) | Other Portfolio investment. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Other Portfolio investments. |
(13) | Investment is not a qualifying asset as defined under Section 55(a) of the 1940 Act. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets. |
(14) | Non-accrual and non-income producing investment. |
20
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
June 30, 2022
(dollars in thousands)
(Unaudited)
(15) | All of the Company’s portfolio investments are generally subject to restrictions on resale as “restricted securities.” |
(16) | Short-term investments represent an investment in a fund that invests in highly liquid investments with average original maturity dates of three months or less. These short-term investments are included as Cash and cash equivalents on the Consolidated Balance Sheets. |
(17) | Maturity date is under on-going negotiations with the portfolio company and other lenders, if applicable. |
(18) | Investment fair value was determined using significant unobservable inputs, unless otherwise noted. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for further discussion. |
(19) | PIK interest income and cumulative dividend income represent income not paid currently in cash. |
(20) | All portfolio company headquarters are based in the United States, unless otherwise noted. |
(21) | Effective yield as of June 30, 2022 was approximately 0.005% on the US Bank Money Market Account. |
(22) | Investment date represents the date of initial investment in the security position. |
(23) | Shares/Units represent ownership in a related Real Estate or HoldCo entity. |
(24) | Investment is not unitized. Presentation is made in percent of fully diluted ownership unless otherwise indicated. |
(25) | Warrants are presented in equivalent shares with a strike price of $10.92 per share. |
(26) | Warrants are presented in equivalent units with a strike price of $14.28 per unit. |
(27) | Warrants are presented in equivalent shares/units with a strike price of $0.01 per share/unit. |
(28) | As of June 30, 2022, borrowings under the loan facility bear interest at LIBOR+6.00% (Floor 1.00%) or Prime+5.00%. Delayed draw term loan facility permits the borrower to make an interest rate election regarding the base rate on each draw under the facility. The rate presented represents a weighted-average rate for borrowings under the facility. |
(29) | As of June 30, 2022, borrowings under the loan facility bear interest at LIBOR+6.50% (Floor 1.00%). Each new draw on the delayed draw term loan facility has a different floating rate reset date. The rate presented represents a weighted-average rate for borrowings under the facility. |
(30) | As of June 30, 2022, borrowings under the loan facility bear interest at LIBOR+7.25% (Floor 1.00%). Each new draw on the delayed draw term loan facility has a different floating rate reset date. The rate presented represents a weighted-average rate for borrowings under the facility. |
(31) | The security has an effective contractual interest rate of 2.00% PIK + LIBOR+6.50%, Floor 1.00%, but the issuer may, in its discretion, elect to pay the PIK interest in cash. The rate presented represents the effective current yield based on actual payments received during the period. |
(32) | SOFR based contracts may include a credit spread adjustment (the “Adjustment”) that is charged in addition to the stated spread. The Adjustment is applied when the SOFR rate, plus the Adjustment, exceeds the stated floor rate, as applicable. As of June 30, 2022, SOFR based contracts in the portfolio had Adjustments ranging from 0.10% to 0.26%. |
(33) | Portfolio company headquarters are located outside of the United States. |
21
MSC INCOME FUND, INC.
Consolidated Schedule of Investments
December 31, 2021
(dollars in thousands)
Portfolio Company (1) (20) | Business Description | Type of Investment (2) (3) (15) | Investment Date (22) | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Control Investments (5) |
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
Copper Trail Fund Investments | (12) (13) | Investment Partnership |
|
|
|
|
|
|
|
|
| |||
|
|
| LP Interests (CTMH, LP) | (24) | 7/17/2017 | 38.8% |
|
| $ | 835 | $ | 710 | ||
|
|
|
|
|
|
|
|
|
|
|
| |||
GRT Rubber Technologies LLC |
| Manufacturer of Engineered Rubber Products |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt |
| 12/19/2014 |
| 8.10% (L+8.00%) | 10/29/2026 | $ | 19,152 | 18,930 | 19,152 | ||
|
|
| Member Units | (8) | 12/19/2014 | 2,896 |
|
| 6,435 | 22,750 | ||||
|
|
|
|
|
|
|
|
|
| 25,365 | 41,902 | |||
Harris Preston Fund Investments | (12) (13) | Investment Partnership |
|
|
|
|
|
|
|
|
| |||
|
|
| LP Interests (2717 MH, L.P.) | (24) | 10/1/2017 | 49.3% |
|
| 2,703 | 3,971 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Subtotal Control Investments (7.6% of net assets at fair value) |
|
|
|
|
|
|
|
|
| $ | 28,903 | $ | 46,583 | |
Affiliate Investments (6) |
|
|
|
|
|
|
|
|
|
|
| |||
AFG Capital Group, LLC |
| Provider of Rent-to-Own Financing Solutions and Services |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt |
| 4/25/2019 |
| 10.00% | 5/25/2022 | 36 | 36 | 36 | |||
|
|
| Preferred Member Units | (8) | 11/7/2014 | 46 |
|
| 300 | 1,930 | ||||
|
|
|
|
|
|
|
|
|
| 336 | 1,966 | |||
Analytical Systems Keco Holdings, LLC |
| Manufacturer of Liquid and Gas Analyzers |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 8/16/2019 |
| 12.00% (L+10.00%, Floor 2.00%) | 8/16/2024 | 1,236 | 1,178 | 1,178 | |||
|
|
| Preferred Member Units |
| 8/16/2019 | 800 |
|
| 800 | - | ||||
|
|
| Preferred Member Units |
| 5/20/2021 | 607 |
|
| 607 | 1,220 | ||||
|
|
| Warrants | (27) | 8/16/2019 | 105 |
| 8/16/2029 | 79 | - | ||||
|
|
|
|
|
|
|
|
|
| 2,664 | 2,398 | |||
ATX Networks Corp. | (11) | Provider of Radio Frequency Management Equipment |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 9/1/2021 |
| 8.50% (L+7.50%, Floor 1.00%) | 9/1/2026 | 7,698 | 7,153 | 7,121 | |||
|
|
| Unsecured Debt | (19) | 9/1/2021 |
| 10.00% PIK | 9/1/2028 | 3,090 | 2,010 | 1,977 | |||
|
|
| Common Stock |
| 9/1/2021 | 585 |
|
| - | - | ||||
|
|
|
|
|
|
|
|
|
| 9,163 | 9,098 | |||
Barfly Ventures, LLC | (10) | Casual Restaurant Group |
|
|
|
|
|
|
|
| ||||
|
|
| Member Units |
| 10/26/2020 | 12 |
|
| 528 | 643 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Brewer Crane Holdings, LLC |
| Provider of Crane Rental and Operating Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 1/9/2018 |
| 11.00% (L+10.00%, Floor 1.00%) | 1/9/2023 | 2,015 | 2,005 | 2,005 | |||
|
|
| Preferred Member Units | (8) | 1/9/2018 | 737 |
|
| 1,070 | 1,930 | ||||
|
|
|
|
|
|
|
|
|
| 3,075 | 3,935 | |||
Centre Technologies Holdings, LLC |
| Provider of IT Hardware Services and Software Solutions |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 1/4/2019 |
| 12.00% (L+10.00%, Floor 2.00%) | 1/4/2024 | 2,354 | 2,331 | 2,216 | |||
|
|
| Preferred Member Units |
| 1/4/2019 | 3,174 |
|
| 1,460 | 1,460 | ||||
|
|
|
|
|
|
|
|
|
| 3,791 | 3,676 | |||
Chamberlin Holding LLC |
| Roofing and Waterproofing Specialty Contractor |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 2/26/2018 |
| 9.00% (L+8.00%, Floor 1.00%) | 2/26/2023 | 4,454 | 4,406 | 4,454 | |||
|
|
| Member Units | (8) | 2/26/2018 | 1,087 |
|
| 2,860 | 6,030 | ||||
|
|
| Member Units | (8) (23) | 11/2/2018 | 261,786 |
|
| 330 | 385 | ||||
|
|
|
|
|
|
|
|
| 7,596 | 10,869 | ||||
Charps, LLC |
| Pipeline Maintenance and Construction |
|
|
|
|
|
|
|
|
| |||
22
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
December 31, 2021
(dollars in thousands)
Portfolio Company (1) (20) | Business Description | Type of Investment (2) (3) (15) | Investment Date (22) | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
| Preferred Member Units | (8) | 2/3/2017 | 457 |
|
| 491 | 3,500 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Clad-Rex Steel, LLC |
| Specialty Manufacturer of Vinyl-Clad Metal |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 12/20/2016 |
| 10.50% (L+9.50%, Floor 1.00%) | 1/15/2024 | 2,620 | 2,620 | 2,620 | |||
|
|
| Member Units | (8) | 12/20/2016 | 179 |
|
| 1,820 | 2,560 | ||||
|
|
| Secured Debt |
| 12/20/2016 |
| 10.00% | 12/20/2036 | 270 | 268 | 268 | |||
|
|
| Member Units | (23) | 12/20/2016 | 200 |
|
| 53 | 133 | ||||
|
|
|
|
|
|
|
|
| 4,761 | 5,581 | ||||
Cody Pools, Inc. |
| Designer of Residential and Commercial Pools |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 3/6/2020 |
| 12.25% (L+10.50%, Floor 1.75%) | 12/17/2026 | 7,187 | 7,055 | 7,181 | |||
|
|
| Preferred Member Units | (8) (23) | 3/6/2020 | 147 |
|
| 2,079 | 11,910 | ||||
|
|
|
|
|
|
|
|
|
| 9,134 | 19,091 | |||
Colonial Electric Company LLC |
| Provider of Electrical Contracting Services |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt |
| 3/31/2021 |
| 12.00% | 3/31/2026 | 6,143 | 6,007 | 6,007 | |||
|
|
| Preferred Member Units | (8) | 3/31/2021 | 4,320 |
|
| 1,920 | 2,280 | ||||
|
|
|
|
|
|
|
|
|
| 7,927 | 8,287 | |||
Datacom, LLC |
| Technology and Telecommunications Provider |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt |
| 3/31/2021 |
| 5.00% | 12/31/2025 | 988 | 901 | 852 | |||
|
|
| Preferred Member Units |
| 3/31/2021 | 1,000 |
|
| 290 | 290 | ||||
|
|
|
|
|
|
|
|
|
| 1,191 | 1,142 | |||
Digital Products Holdings LLC |
| Designer and Distributor of Consumer Electronics |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 4/1/2018 |
| 11.00% (L+10.00%, Floor 1.00%) | 4/1/2023 | 4,213 | 4,186 | 4,186 | |||
|
|
| Preferred Member Units | (8) | 4/1/2018 | 964 |
|
| 2,375 | 2,459 | ||||
|
|
|
|
|
|
|
|
|
| 6,561 | 6,645 | |||
Direct Marketing Solutions, Inc. |
| Provider of Omni-Channel Direct Marketing Services |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 2/13/2018 |
| 12.00% (L+11.00%, Floor 1.00%) | 2/13/2024 | 4,705 | 4,644 | 4,698 | |||
|
|
| Preferred Stock | (8) | 2/13/2018 | 2,100 |
|
| 2,100 | 4,590 | ||||
|
|
|
|
|
|
|
|
|
| 6,744 | 9,288 | |||
Flame King Holdings, LLC |
| Propane Tank and Accessories Distributor |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 10/29/2021 |
| 7.50% (L+6.50%, Floor 1.00%) | 10/31/2026 | 1,600 | 1,581 | 1,581 | |||
|
|
| Secured Debt | (9) | 10/29/2021 |
| 12.00% (L+11.00%, Floor 1.00%) | 10/31/2026 | 5,300 | 5,145 | 5,145 | |||
|
|
| Preferred Equity |
| 10/29/2021 | 2,340 |
|
| 2,600 | 2,600 | ||||
|
|
|
|
|
|
|
|
|
| 9,326 | 9,326 | |||
Freeport Financial Funds | (12) (13) | Investment Partnership |
|
|
|
|
|
|
|
|
| |||
|
|
| LP Interests (Freeport First Lien Loan Fund III LP) | (8) (24) | 7/31/2015 | 6.0% |
|
| 7,629 | 7,231 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Gamber-Johnson Holdings, LLC |
| Manufacturer of Ruggedized Computer Mounting Systems |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 6/24/2016 |
| 9.50% (L+7.50%, Floor 2.00%) | 1/1/2025 | 5,400 | 5,382 | 5,400 | |||
|
|
| Member Units | (8) | 6/24/2016 | 2,261 |
|
| 4,423 | 12,430 | ||||
|
|
|
|
|
|
|
|
|
| 9,805 | 17,830 | |||
GFG Group, LLC. |
| Grower and Distributor of a Variety of Plants and Products to Other Wholesalers, Retailers and Garden Centers |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt |
| 3/31/2021 |
| 12.00% | 3/31/2026 | 3,136 | 3,053 | 3,136 | |||
|
|
| Preferred Member Units | (8) | 3/31/2021 | 56 |
|
| 1,225 | 1,750 | ||||
23
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
December 31, 2021
(dollars in thousands)
Portfolio Company (1) (20) | Business Description | Type of Investment (2) (3) (15) | Investment Date (22) | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
|
|
|
|
|
| 4,278 | 4,886 | |||
Gulf Publishing Holdings, LLC |
| Energy Industry Focused Media and Publishing |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) (17) (19) | 9/29/2017 |
| 10.50% (5.25% Cash, 5.25% PIK) (L+9.50%, Floor 1.00%) | 9/30/2020 | 64 | 64 | 64 | |||
|
|
| Secured Debt | (17) (19) | 4/29/2016 |
| 12.50% (6.25% Cash, 6.25% PIK) | 4/29/2021 | 3,391 | 3,391 | 2,429 | |||
|
|
| Member Units |
| 4/29/2016 | 920 |
|
| 920 | - | ||||
|
|
|
|
|
|
|
|
|
| 4,375 | 2,493 | |||
Harris Preston Fund Investments | (12) (13) | Investment Partnership |
|
|
|
|
|
|
|
| ||||
|
|
| LP Interests (HPEP 3, L.P.) | (24) | 8/9/2017 | 8.2% |
|
| 3,193 | 4,712 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Kickhaefer Manufacturing Company, LLC |
| Precision Metal Parts Manufacturing |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt |
| 10/31/2018 |
| 11.50% | 10/31/2023 | 5,104 | 5,040 | 5,040 | |||
|
|
| Member Units |
| 10/31/2018 | 145 |
|
| 3,060 | 3,080 | ||||
|
|
| Secured Debt |
| 10/31/2018 |
| 9.00% | 10/31/2048 | 979 | 970 | 970 | |||
|
|
| Member Units | (8) (23) | 10/31/2018 | 200 |
|
| 248 | 615 | ||||
|
|
|
|
|
|
|
|
|
| 9,318 | 9,705 | |||
Market Force Information, LLC |
| Provider of Customer Experience Management Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (14) (19) | 7/28/2017 |
| 12.00% PIK | 7/28/2023 | 6,520 | 6,463 | 2,234 | |||
|
|
| Member Units |
| 7/28/2017 | 185,980 |
|
| 4,160 | - | ||||
|
|
|
|
|
|
|
|
| 10,623 | 2,234 | ||||
MH Corbin Holding LLC |
| Manufacturer and Distributor of Traffic Safety Products |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt |
| 8/31/2015 |
| 13.00% | 3/31/2022 | 2,063 | 2,061 | 1,484 | |||
|
|
| Preferred Member Units |
| 3/15/2019 | 16,500 |
|
| 1,100 | - | ||||
|
|
| Preferred Member Units |
| 9/1/2015 | 1,000 |
|
| 1,500 | - | ||||
|
|
|
|
|
|
|
|
|
| 4,661 | 1,484 | |||
Mystic Logistics Holdings, LLC |
| Logistics and Distribution Services Provider for Large Volume Mailers |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt |
| 8/18/2014 |
| 12.00% | 1/17/2022 | 1,595 | 1,594 | 1,595 | |||
|
|
| Common Stock | (8) | 8/18/2014 | 1,468 |
|
| 680 | 2,210 | ||||
|
|
|
|
|
|
|
|
| 2,274 | 3,805 | ||||
NexRev LLC |
| Provider of Energy Efficiency Products & Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt |
| 2/28/2018 |
| 11.00% | 2/28/2023 | 4,054 | 4,031 | 3,510 | |||
|
|
| Preferred Member Units | (8) | 2/28/2018 | 21,600,000 |
|
| 1,720 | 670 | ||||
|
|
|
|
|
|
|
|
| 5,751 | 4,180 | ||||
NuStep, LLC |
| Designer, Manufacturer and Distributor of Fitness Equipment |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 1/31/2017 |
| 7.50% (L+6.50%, Floor 1.00%) | 1/31/2025 | 430 | 430 | 430 | |||
|
|
| Secured Debt |
| 1/31/2017 |
| 11.00% | 1/31/2025 | 4,310 | 4,308 | 4,310 | |||
|
|
| Preferred Member Units |
| 1/31/2017 | 102 |
|
| 2,550 | 3,380 | ||||
|
|
|
|
|
|
|
|
| 7,288 | 8,120 | ||||
Oneliance, LLC |
| Construction Cleaning Company |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 8/6/2021 |
| 12.00% (L+11.00%, Floor 1.00%) | 8/6/2026 | 1,400 | 1,374 | 1,374 | |||
|
|
| Preferred Stock |
| 8/6/2021 | 264 |
|
| 264 | 264 | ||||
|
|
|
|
|
|
|
|
|
| 1,638 | 1,638 | |||
Orttech Holdings, LLC |
| Distributor of Industrial Clutches, Brakes and Other Components |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 7/30/2021 |
| 12.00% (L+11.00%, Floor 1.00%) | 7/31/2026 | 6,094 | 5,978 | 5,978 | |||
|
|
| Preferred Stock | (8) (23) | 7/30/2021 | 2,500 |
|
| 2,500 | 2,500 | ||||
|
|
|
|
|
|
|
|
|
| 8,478 | 8,478 | |||
SI East, LLC |
| Rigid Industrial Packaging Manufacturing |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt |
| 8/31/2018 |
| 10.25% | 8/31/2023 | 21,950 | 21,892 | 21,950 | |||
24
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
December 31, 2021
(dollars in thousands)
Portfolio Company (1) (20) | Business Description | Type of Investment (2) (3) (15) | Investment Date (22) | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
| Preferred Member Units | (8) | 8/31/2018 | 52 |
|
| 406 | 3,860 | ||||
|
|
|
|
|
|
|
|
|
| 22,298 | 25,810 | |||
Sonic Systems International, LLC | (10) | Nuclear Power Staffing Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) | 8/20/2021 |
| 8.50% (L+7.50%, Floor 1.00%) | 8/20/2026 | 14,000 | 13,738 | 13,738 | |||
|
|
| Common Stock |
| 8/20/2021 | 9,191 |
|
| 1,250 | 1,250 | ||||
|
|
|
|
|
|
|
|
|
| 14,988 | 14,988 | |||
Tedder Industries, LLC |
| Manufacturer of Firearm Holsters and Accessories |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt |
| 8/31/2018 |
| 12.00% | 8/31/2022 | 4,060 | 4,013 | 4,013 | |||
|
|
| Preferred Member Units |
| 8/31/2018 | 126 |
|
| 2,145 | 2,145 | ||||
|
|
|
|
|
|
|
|
|
| 6,158 | 6,158 | |||
Trantech Radiator Topco, LLC |
| Transformer Cooling Products and Services |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt |
| 5/31/2019 |
| 12.00% | 5/31/2024 | 2,180 | 2,137 | 2,174 | |||
|
|
| Common Stock | (8) | 5/31/2019 | 154 |
|
| 1,164 | 2,160 | ||||
|
|
|
|
|
|
|
|
|
| 3,301 | 4,334 | |||
VVS Holdco LLC |
| Omnichannel Retailer of Animal Health Products |
|
|
|
|
|
|
|
| ||||
|
|
| Secured Debt | (9) (23) | 12/1/2021 |
| 7.00% (L+6.00%, Floor 1.00%) | 12/1/2026 | 300 | 292 | 292 | |||
|
|
| Secured Debt | (23) | 12/1/2021 |
| 11.50% | 12/1/2026 | 7,600 | 7,375 | 7,375 | |||
|
|
| Preferred Equity | (23) | 12/1/2021 | 2,960 |
|
| 2,960 | 2,960 | ||||
|
|
|
|
|
|
|
|
| 10,627 | 10,627 | ||||
Subtotal Affiliate Investments (38.2% of net assets at fair value) |
|
|
|
|
|
|
|
|
| $ | 209,971 | $ | 234,158 | |
25
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
December 31, 2021
(dollars in thousands)
Portfolio Company (1) (20) | Business Description | Type of Investment (2) (3) (15) | Investment Date (22) | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Non-Control/Non-Affiliate Investments (7) |
|
|
|
|
|
|
|
|
|
|
| |||
AAC Holdings, Inc. | (11) | Substance Abuse Treatment Service Provider |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (19) | 12/11/2020 |
| 18.00% (10.00% Cash, 8.00% PIK) | 6/25/2025 | $ | 3,636 | $ | 3,342 | $ | 3,491 |
|
|
| Common Stock |
| 12/11/2020 | 593,927 |
|
|
| 3,148 | 2,079 | |||
|
|
| Warrants | (27) | 12/11/2020 | 197,717 |
| 12/11/2025 |
| — | 692 | |||
|
|
|
|
|
|
|
|
|
| 6,490 | 6,262 | |||
ADS Tactical, Inc. | (11) | Value-Added Logistics and Supply Chain Provider to the Defense Industry |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 3/29/2021 |
| 6.75% (L+5.75%, Floor 1.00%) | 3/19/2026 | 9,625 | 9,450 | 9,571 | |||
|
|
|
|
|
|
|
|
|
| |||||
American Health Staffing Group, Inc. | (10) | Healthcare Temporary Staffing |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 11/19/2021 |
| 7.00% (L+6.00%, Floor 1.00%) | 11/19/2026 | 8,833 | 8,736 | 8,736 | |||
|
|
|
|
|
|
|
|
|
| |||||
American Nuts, LLC | (10) | Roaster, Mixer and Packager of Bulk Nuts and Seeds |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 12/21/2018 |
| 9.00% (L+8.00%, Floor 1.00%) | 4/10/2025 | 12,016 | 11,892 | 12,016 | |||
|
|
|
|
|
|
|
|
|
| |||||
American Teleconferencing Services, Ltd. | (11) | Provider of Audio Conferencing and Video Collaboration Solutions |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) (14) (17) | 9/17/2021 |
| 7.50% (L+6.50%, Floor 1.00%) | 9/9/2021 | 2,425 | 2,375 | 73 | |||
|
|
| Secured Debt | (9) (14) | 5/19/2016 |
| 7.50% (L+6.50%, Floor 1.00%) | 6/28/2023 | 11,693 | 11,451 | 351 | |||
|
|
|
|
|
|
|
|
|
| 13,826 | 424 | |||
ArborWorks, LLC | (10) | Vegetation Management Services |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 11/9/2021 |
| 8.00% (L+7.00%, Floor 1.00%) | 11/9/2026 | 17,317 | 16,929 | 16,929 | |||
|
|
| Common Equity |
| 11/9/2021 | 124 |
|
|
| 124 | 124 | |||
|
|
|
|
|
|
|
|
|
| 17,053 | 17,053 | |||
AVEX Aviation Holdings, LLC | (10) | Specialty Aircraft Dealer |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 12/15/2021 |
| 7.50% (L+6.50%, Floor 1.00%) | 12/15/2026 | 1,850 | 1,806 | 1,806 | |||
|
|
| Common Equity |
| 12/15/2021 | 50 |
|
|
| 50 | 50 | |||
|
|
|
|
|
|
|
|
|
| 1,856 | 1,856 | |||
BBB Tank Services, LLC |
| Maintenance, Repair and Construction Services to the Above-Ground Storage Tank Market |
|
|
|
|
|
|
|
|
| |||
|
|
| Unsecured Debt | (9) (17) | 4/8/2016 |
| 12.00% (L+11.00%, Floor 1.00%) | 4/8/2021 | 1,200 | 1,200 | 625 | |||
|
|
| Preferred Stock (non-voting) | (19) | 12/17/2018 |
| 15.00% PIK |
|
| 41 | — | |||
|
|
| Member Units |
| 4/8/2016 | 200,000 |
|
|
| 200 | — | |||
|
|
|
|
|
|
|
|
|
| 1,441 | 625 | |||
Berry Aviation, Inc. | (10) | Charter Airline Services |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (19) | 7/6/2018 |
| 12.00% (10.50% Cash, 1.50% PIK) | 1/6/2024 | 4,688 | 4,658 | 4,688 | |||
|
|
| Preferred Member Units | (8) (19) (23) | 11/12/2019 | 122,416 | 16.00% PIK |
|
| 168 | 208 | |||
|
|
| Preferred Member Units | (19) (23) | 7/6/2018 | 1,548,387 | 8.00% PIK |
|
| 1,671 | 2,487 | |||
|
|
|
|
|
|
|
|
|
| 6,497 | 7,383 | |||
Binswanger Enterprises, LLC | (10) | Glass Repair and Installation Service Provider |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 3/10/2017 |
| 9.50% (L+8.50%, Floor 1.00%) | 3/10/2023 | 12,001 | 11,977 | 12,001 | |||
|
|
| Member Units |
| 3/10/2017 | 1,050,000 |
|
|
| 1,050 | 730 | |||
|
|
|
|
|
|
|
|
|
| 13,027 | 12,731 | |||
Bluestem Brands, Inc. | (11) | Multi-Channel Retailer of General Merchandise |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 8/28/2020 |
| 10.00% (L+8.50%, Floor 1.50%) | 8/28/2025 | 5,745 | 5,745 | 5,724 | |||
|
|
| Common Stock | (8) | 10/1/2020 | 700,446 |
|
|
| — | 1,471 | |||
26
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
December 31, 2021
(dollars in thousands)
Portfolio Company (1) (20) | Business Description | Type of Investment (2) (3) (15) | Investment Date (22) | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
|
|
|
|
|
| 5,745 | 7,195 | |||
Boccella Precast Products LLC |
| Manufacturer of Precast Hollow Core Concrete |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt |
| 9/23/2021 |
| 10.00% | 2/28/2027 | 80 | 80 | 80 | |||
|
|
| Member Units | (8) | 6/30/2017 | 540,000 |
|
|
| 564 | 1,207 | |||
|
|
|
|
|
|
|
|
|
| 644 | 1,287 | |||
Brightwood Capital Fund Investments | (12) (13) | Investment Partnership |
|
|
|
|
|
|
|
|
| |||
|
|
| LP Interests (Brightwood Capital Fund III, LP) | (8) (24) | 7/21/2014 | 0.5% |
|
|
| 2,495 | 1,423 | |||
|
|
| LP Interests (Brightwood Capital Fund IV, LP) | (8) (24) | 10/26/2016 | 1.2% |
|
|
| 8,737 | 8,788 | |||
|
|
|
|
|
|
|
|
|
| 11,232 | 10,211 | |||
Buca C, LLC |
| Casual Restaurant Group |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) (17) | 6/30/2015 |
| 10.25% (L+9.25%, Floor 1.00%) | 6/30/2020 | 13,164 | 13,164 | 9,705 | |||
|
|
| Preferred Member Units | (19) | 6/30/2015 | 4 | 6.00% PIK |
|
| 3,040 | — | |||
|
|
|
|
|
|
|
|
|
| 16,204 | 9,705 | |||
Burning Glass Intermediate Holding Company, Inc. | (10) | Provider of Skills-Based Labor Market Analytics |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 6/14/2021 |
| 6.00% (L+5.00%, Floor 1.00%) | 6/10/2026 | 310 | 285 | 285 | |||
|
|
| Secured Debt | (9) | 6/14/2021 |
| 6.00% (L+5.00%, Floor 1.00%) | 6/10/2028 | 13,389 | 13,168 | 13,290 | |||
|
|
|
|
|
|
|
|
|
| 13,453 | 13,575 | |||
Cadence Aerospace LLC | (10) | Aerostructure Manufacturing |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) (19) | 11/14/2017 |
| 9.28% Cash, 0.22% PIK | 11/14/2023 | 20,276 | 20,174 | 19,017 | |||
|
|
|
|
|
|
|
|
|
| |||||
CAI Software LLC |
| Provider of Specialized Enterprise Resource Planning Software |
|
|
|
|
|
|
|
|
| |||
|
|
| Preferred Equity |
| 12/13/2021 | 379,338 |
|
|
| 379 | 379 | |||
|
|
| Preferred Equity |
| 12/13/2021 | 126,446 |
|
|
| — | — | |||
|
|
|
|
|
|
|
|
|
| 379 | 379 | |||
Camin Cargo Control, Inc. | (11) | Provider of Mission Critical Inspection, Testing and Fuel Treatment Services |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 6/14/2021 |
| 7.50% (L+6.50%, Floor 1.00%) | 6/4/2026 | 7,960 | 7,888 | 7,920 | |||
|
|
|
|
|
|
|
|
|
| |||||
Career Team Holdings, LLC |
| Provider of Workforce Training and Career Development Services |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt |
| 12/17/2021 |
| 12.50% | 12/17/2026 | 2,250 | 2,180 | 2,180 | |||
|
|
| Class A Common Units |
| 12/17/2021 | 50,000 |
|
|
| 500 | 500 | |||
|
|
|
|
|
|
|
|
|
| 2,680 | 2,680 | |||
Cenveo Corporation | (11) | Provider of Digital Marketing Agency Services |
|
|
|
|
|
|
|
|
| |||
|
|
| Common Stock |
| 9/7/2018 | 253,194 |
|
|
| 4,848 | 2,236 | |||
|
|
|
|
|
|
|
|
|
| |||||
Chisholm Energy Holdings, LLC | (10) | Oil & Gas Exploration & Production |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 5/15/2019 |
| 7.75% (L+6.25%, Floor 1.50%) | 5/15/2026 | 2,857 | 2,817 | 2,663 | |||
|
|
|
|
|
|
|
|
|
| |||||
Clarius BIGS, LLC | (10) | Prints & Advertising Film Financing |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (14) (17) (19) | 9/23/2014 |
| 15.00% PIK | 1/5/2015 | 2,772 | 2,431 | 33 | |||
|
|
|
|
|
|
|
|
|
| |||||
Classic H&G Holdings, LLC |
| Provider of Engineered Packaging Solutions |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 3/12/2020 |
| 7.00% (L+6.00%, Floor 1.00%) | 3/12/2025 | 1,000 | 997 | 1,000 | |||
|
|
| Secured Debt |
| 3/12/2020 |
| 8.00% | 3/12/2025 | 4,819 | 4,717 | 4,819 | |||
27
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
December 31, 2021
(dollars in thousands)
Portfolio Company (1) (20) | Business Description | Type of Investment (2) (3) (15) | Investment Date (22) | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
| Preferred Member Units | (8) | 3/12/2020 | 39 |
|
|
| 1,440 | 3,810 | |||
|
|
|
|
|
|
|
|
|
| 7,154 | 9,629 | |||
Computer Data Source, LLC | (10) | Third Party Maintenance Provider to the Data Center Ecosystem |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 8/6/2021 |
| 8.50% (L+7.50%, Floor 1.00%) | 8/6/2026 | 18,011 | 17,639 | 17,639 | |||
|
|
|
|
|
|
|
|
|
| |||||
Construction Supply Investments, LLC | (10) | Distribution Platform of Specialty Construction Materials to Professional Concrete and Masonry Contractors |
|
|
|
|
|
|
|
|
| |||
|
|
| Member Units | (8) | 12/29/2016 | 861,618 |
|
|
| 3,335 | 14,640 | |||
|
|
|
|
|
|
|
|
|
| |||||
DMA Industries, LLC |
| Distributor of aftermarket ride control products |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt |
| 11/19/2021 |
| 12.00% | 11/19/2026 | 5,300 | 5,196 | 5,196 | |||
|
|
| Preferred Equity |
| 11/19/2021 | 1,486 |
|
|
| 1,486 | 1,486 | |||
|
|
|
|
|
|
|
|
|
| 6,682 | 6,682 | |||
DTE Enterprises, LLC | (10) | Industrial Powertrain Repair and Services |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 4/13/2018 |
| 9.50% (L+8.00%, Floor 1.50%) | 4/13/2023 | 9,369 | 9,311 | 8,926 | |||
|
|
| Class AA Preferred Member Units (non-voting) | (8) (19) | 4/13/2018 |
| 10.00% PIK |
|
| 1,051 | 1,051 | |||
|
|
| Class A Preferred Member Units | (19) | 4/13/2018 | 776,316 | 8.00% PIK |
|
| 776 | 320 | |||
|
|
|
|
|
|
|
|
|
| 11,138 | 10,297 | |||
Dynamic Communities, LLC | (10) | Developer of Business Events and Online Community Groups |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 7/17/2018 |
| 9.50% (L+8.50%, Floor 1.00%) | 7/17/2023 | 5,681 | 5,641 | 5,570 | |||
|
|
|
|
|
|
|
|
|
| |||||
EPIC Y-Grade Services, LP | (11) | NGL Transportation & Storage |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 6/22/2018 |
| 7.00% (L+6.00%, Floor 1.00%) | 6/30/2027 | 6,892 | 6,814 | 5,861 | |||
|
|
|
|
|
|
|
|
|
| |||||
Event Holdco, LLC | (10) | Event and Learning Management Software for Healthcare Organizations and Systems |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) (23) | 12/22/2021 |
| 8.00% (L+7.00%, Floor 1.00%) | 12/22/2026 | 3,692 | 3,653 | 3,653 | |||
|
|
|
|
|
|
|
|
|
| |||||
Flip Electronics LLC | (10) | Distributor of Hard-to-Find and Obsolete Electronic Components |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 1/4/2021 |
| 9.09% (L+8.09%, Floor 1.00%) | 1/2/2026 | 6,000 | 5,891 | 5,874 | |||
|
|
|
|
|
|
|
|
|
| |||||
GoWireless Holdings, Inc. | (11) | Provider of Wireless Telecommunications Carrier Services |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 1/10/2018 |
| 7.50% (L+6.50%, Floor 1.00%) | 12/22/2024 | 15,018 | 14,953 | 15,052 | |||
|
|
|
|
|
|
|
|
|
| |||||
GS Operating, LLC | (10) | Distributor of Industrial and Specialty Parts |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 2/24/2020 |
| 8.00% (L+6.50%, Floor 1.50%) | 2/24/2025 | 12,193 | 11,960 | 12,193 | |||
|
|
|
|
|
|
|
|
|
| |||||
Hawk Ridge Systems, LLC | (13) | Value-Added Reseller of Engineering Design and Manufacturing Solutions |
|
|
|
|
|
|
|
|
| |||
28
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
December 31, 2021
(dollars in thousands)
Portfolio Company (1) (20) | Business Description | Type of Investment (2) (3) (15) | Investment Date (22) | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
| Secured Debt | (9) | 12/2/2016 |
| 7.00% (L+6.00%, Floor 1.00%) | 1/15/2026 | 646 | 646 | 646 | |||
|
|
| Secured Debt |
| 12/2/2016 |
| 8.00% | 1/15/2026 | 7,450 | 7,388 | 7,450 | |||
|
|
| Preferred Member Units | (8) | 12/2/2016 | 56 |
|
|
| 713 | 3,670 | |||
|
|
| Preferred Member Units | (23) | 12/2/2016 | 56 |
|
|
| 38 | 190 | |||
|
|
|
|
|
|
|
|
|
| 8,785 | 11,956 | |||
HDC/HW Intermediate Holdings | (10) | Managed Services and Hosting Provider |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 12/21/2018 |
| 8.50% (L+7.50%, Floor 1.00%) | 12/21/2023 | 1,934 | 1,916 | 1,715 | |||
|
|
|
|
|
|
|
|
|
| |||||
Hybrid Promotions, LLC | (10) | Wholesaler of Licensed, Branded and Private Label Apparel |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 6/30/2021 |
| 9.25% (L+8.25%, Floor 1.00%) | 6/30/2026 | 7,875 | 7,730 | 7,809 | |||
|
|
|
|
|
|
|
|
|
| |||||
IG Parent Corporation | (11) | Software Engineering |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 7/30/2021 |
| 6.75% (L+5.75%, Floor 1.00%) | 7/30/2026 | 6,394 | 6,278 | 6,280 | |||
|
|
|
|
|
|
|
|
|
| |||||
Implus Footcare, LLC | (10) | Provider of Footwear and Related Accessories |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 6/1/2017 |
| 8.75% (L+7.75%, Floor 1.00%) | 4/30/2024 | 17,093 | 17,080 | 16,216 | |||
|
|
|
|
|
|
|
|
|
| |||||
Independent Pet Partners Intermediate Holdings, LLC | (10) | Omnichannel Retailer of Specialty Pet Products |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (19) | 12/10/2020 |
| 6.00% PIK | 11/20/2023 | 10,415 | 9,795 | 9,815 | |||
|
|
| Preferred Stock (non-voting) | (19) | 12/10/2020 |
| 6.00% PIK |
|
| 2,470 | 3,310 | |||
|
|
| Preferred Stock (non-voting) |
| 12/10/2020 |
|
|
|
| — | — | |||
|
|
| Member Units |
| 11/20/2018 | 1,191,667 |
|
|
| 1,192 | — | |||
|
|
|
|
|
|
|
|
|
| 13,457 | 13,125 | |||
Industrial Services Acquisition, LLC | (10) | Industrial Cleaning Services |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 8/13/2021 |
| 7.75% (L+6.75%, Floor 1.00%) | 8/13/2026 | 18,406 | 18,033 | 18,033 | |||
|
|
| Preferred Member Units | (8) (19) (23) | 1/31/2018 | 336 | 10.00% PIK |
|
| 281 | 383 | |||
|
|
| Preferred Member Units | (8) (19) (23) | 5/17/2019 | 187 | 20.00% PIK |
|
| 190 | 231 | |||
|
|
| Member Units | (23) | 6/17/2016 | 2,100 |
|
|
| 2,100 | 1,710 | |||
|
|
|
|
|
|
|
|
|
| 20,604 | 20,357 | |||
Infolinks Media Buyco, LLC | (10) | Exclusive Placement Provider to the Advertising Ecosystem |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 11/1/2021 |
| 7.00% (L+6.00%, Floor 1.00%) | 11/1/2026 | 10,850 | 10,578 | 10,578 | |||
|
|
|
|
|
|
|
|
|
| |||||
Interface Security Systems, L.L.C | (10) | Commercial Security & Alarm Services |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 12/9/2021 |
| 11.75% (L+10.00%, Floor 1.75%) | 8/7/2023 | 343 | 343 | 343 | |||
|
|
| Secured Debt | (9) (14) (19) | 8/7/2019 |
| 9.75% (8.75% Cash, 1.00% PIK) (1.00% PIK + L+7.00%, Floor 1.75%) | 8/7/2023 | 7,334 | 7,249 | 5,248 | |||
|
|
|
|
|
|
|
|
|
| 7,592 | 5,591 | |||
Intermedia Holdings, Inc. | (11) | Unified Communications as a Service |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 8/3/2018 |
| 7.00% (L+6.00%, Floor 1.00%) | 7/19/2025 | 5,659 | 5,649 | 5,632 | |||
|
|
|
|
|
|
|
|
|
| |||||
Invincible Boat Company, LLC. | (10) | Manufacturer of Sport Fishing Boats |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 8/28/2019 |
| 8.00% (L+6.50%, Floor 1.50%) | 8/28/2025 | 17,770 | 17,624 | 17,770 | |||
|
|
|
|
|
|
|
|
|
| |||||
INW Manufacturing, LLC | (11) | Manufacturer of Nutrition and Wellness Products |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 5/19/2021 |
| 6.50% (L+5.75%, Floor 0.75%) | 3/25/2027 | 7,359 | 7,155 | 7,212 | |||
29
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
December 31, 2021
(dollars in thousands)
Portfolio Company (1) (20) | Business Description | Type of Investment (2) (3) (15) | Investment Date (22) | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
|
|
|
|
|
| |||||
Iron-Main Investments, LLC |
| Consumer Reporting Agency Providing Employment Background Checks and Drug Testing |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt |
| 8/3/2021 |
| 13.00% | 8/1/2026 | 1,150 | 1,118 | 1,118 | |||
|
|
| Secured Debt |
| 9/1/2021 |
| 12.50% | 9/1/2026 | 800 | 777 | 777 | |||
|
|
| Secured Debt |
| 8/3/2021 |
| 12.50% | 11/30/2026 | 5,000 | 4,853 | 4,853 | |||
|
|
| Secured Debt | (19) | 8/3/2021 |
| 12.50% PIK | 3/31/2022 | 2,212 | 2,148 | 2,148 | |||
|
|
| Common Stock |
| 8/3/2021 | 44,944 |
|
|
| 449 | 449 | |||
|
|
|
|
|
|
|
|
|
| 9,345 | 9,345 | |||
Isagenix International, LLC | (11) | Direct Marketer of Health & Wellness Products |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 6/21/2018 |
| 6.75% (L+5.75%, Floor 1.00%) | 6/14/2025 | 5,158 | 5,129 | 3,865 | |||
|
|
|
|
|
|
|
|
|
| |||||
Jackmont Hospitality, Inc. | (10) | Franchisee of Casual Dining Restaurants |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 5/26/2015 |
| 8.00% (L+7.00%, Floor 1.00%) | 11/4/2024 | 4,200 | 4,200 | 4,200 | |||
|
|
| Preferred Equity |
| 11/8/2021 | 5,653,333 |
|
|
| 624 | 628 | |||
|
|
|
|
|
|
|
|
|
| 4,824 | 4,828 | |||
Joerns Healthcare, LLC | (11) | Manufacturer and Distributor of Health Care Equipment & Supplies |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 8/21/2019 |
| 7.00% (L+6.00%, Floor 1.00%) | 8/21/2024 | 3,351 | 3,320 | 3,039 | |||
|
|
| Secured Debt | (19) | 11/15/2021 |
| 15.00% PIK | 11/8/2022 | 862 | 862 | 862 | |||
|
|
| Common Stock |
| 8/21/2019 | 392,514 |
|
|
| 3,678 | — | |||
|
|
|
|
|
|
|
|
|
| 7,860 | 3,901 | |||
Johnson Downie Opco, LLC |
| Executive Search Services |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 12/10/2021 |
| 13.00% (L+11.50%, Floor 1.50%) | 12/10/2026 | 1,275 | 1,246 | 1,246 | |||
|
|
| Preferred Equity |
| 12/10/2021 | 350 |
|
|
| 350 | 350 | |||
|
|
|
|
|
|
|
|
|
| 1,596 | 1,596 | |||
JTI Electrical & Mechanical, LLC | (10) | Electrical, Mechanical and Automation Services |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 12/22/2021 |
| 7.00% (L+6.00%, Floor 1.00%) | 12/22/2026 | 3,158 | 3,081 | 3,081 | |||
|
|
| Common Equity |
| 12/22/2021 | 140,351 |
|
|
| 140 | 140 | |||
|
|
|
|
|
|
|
|
|
| 3,221 | 3,221 | |||
KMS, LLC | (10) | Wholesaler of Closeout and Value-priced Products |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 10/4/2021 |
| 8.25% (L+7.25%, Floor 1.00%) | 10/4/2026 | 9,476 | 9,242 | 9,242 | |||
|
|
|
|
|
|
|
|
|
| |||||
Knight Energy Services LLC | (11) | Oil and Gas Equipment & Services |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (19) | 1/9/2015 |
| 8.50% PIK | 2/9/2024 | 961 | 961 | 677 | |||
|
|
| Common Stock |
| 11/14/2018 | 25,692 |
|
|
| 1,843 | — | |||
|
|
|
|
|
|
|
|
|
| 2,804 | 677 | |||
Laredo Energy, LLC | (10) | Oil & Gas Exploration & Production |
|
|
|
|
|
|
|
|
| |||
|
|
| Member Units |
| 5/4/2020 | 1,155,952 |
|
|
| 11,560 | 9,659 | |||
|
|
|
|
|
|
|
|
|
| |||||
LaserAway Intermediate Holdings II, LLC | (11) | Aesthetic Dermatology Service Provider |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 10/18/2021 |
| 6.50% (L+5.75%, Floor 0.75%) | 10/14/2027 | 4,130 | 4,050 | 4,115 | |||
|
|
|
|
|
|
|
|
|
| |||||
Lightbox Holdings, L.P. | (11) | Provider of Commercial Real Estate Software |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt |
| 5/23/2019 |
| 5.22% (L+5.00%) | 5/9/2026 | 5,886 | 5,831 | 5,812 | |||
|
|
|
|
|
|
|
|
|
| |||||
LL Management, Inc. | (10) | Medical Transportation Service Provider |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 5/2/2019 |
| 8.25% (L+7.25%, Floor 1.00%) | 9/25/2023 | 14,332 | 14,256 | 14,332 | |||
|
|
|
|
|
|
|
|
|
| |||||
LLFlex, LLC | (10) | Provider of Metal-Based Laminates |
|
|
|
|
|
|
|
|
| |||
30
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
December 31, 2021
(dollars in thousands)
Portfolio Company (1) (20) | Business Description | Type of Investment (2) (3) (15) | Investment Date (22) | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
| Secured Debt | (9) | 8/16/2021 |
| 10.00% (L+9.00%, Floor 1.00%) | 8/16/2026 | 4,988 | 4,882 | 4,882 | |||
|
|
|
|
|
|
|
|
|
| |||||
Logix Acquisition Company, LLC | (10) | Competitive Local Exchange Carrier |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 1/8/2018 |
| 6.75% (L+5.75%, Floor 1.00%) | 12/22/2024 | 12,484 | 12,438 | 11,798 | |||
|
|
|
|
|
|
|
|
|
| |||||
Mac Lean-Fogg Company | (10) | Manufacturer and Supplier for Auto and Power Markets |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 4/22/2019 |
| 5.88% (L+5.25%, Floor 0.625%) | 12/22/2025 | 7,301 | 7,266 | 7,301 | |||
|
|
| Preferred Stock | (19) | 10/1/2019 |
| 13.75% (4.50% Cash, 9.25% PIK) |
|
| 760 | 760 | |||
|
|
|
|
|
|
|
|
|
| 8,026 | 8,061 | |||
Mako Steel, LP | (10) | Self-Storage Design & Construction |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 3/15/2021 |
| 8.00% (L+7.25%, Floor 0.75%) | 3/13/2026 | 19,544 | 19,175 | 19,544 | |||
|
|
|
|
|
|
|
|
|
| |||||
MB2 Dental Solutions, LLC | (11) | Dental Partnership Organization |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 1/28/2021 |
| 7.00% (L+6.00%, Floor 1.00%) | 1/29/2027 | 11,697 | 11,462 | 11,697 | |||
|
|
|
|
|
|
|
|
|
| |||||
Mills Fleet Farm Group, LLC | (10) | Omnichannel Retailer of Work, Farm and Lifestyle Merchandise |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 10/24/2018 |
| 7.25% (L+6.25%, Floor 1.00%) | 10/24/2024 | 17,781 | 17,555 | 17,781 | |||
|
|
|
|
|
|
|
|
|
| |||||
NinjaTrader, LLC | (10) | Operator of Futures Trading Platform |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 12/18/2019 |
| 7.25% (L+6.25%, Floor 1.00%) | 12/18/2024 | 16,875 | 16,602 | 16,840 | |||
|
|
|
|
|
|
|
|
|
| |||||
NNE Partners, LLC | (10) | Oil & Gas Exploration & Production |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (19) | 3/2/2017 |
| 9.37% (4.87% Cash, 4.50% PIK) (4.50% PIK + L+4.75%) | 12/31/2023 | 21,607 | 21,599 | 20,188 | |||
|
|
|
|
|
|
|
|
|
| |||||
NTM Acquisition Corp. | (11) | Provider of B2B Travel Information Content |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) (19) | 7/12/2016 |
| 8.25% (7.25% Cash, 1.00% PIK) (1.00%PIK + L+6.25%, Floor 1.00%) | 6/7/2024 | 4,258 | 4,254 | 4,216 | |||
|
|
|
|
|
|
|
|
|
| |||||
NWN Corporation | (10) | Value Added Reseller and Provider of Managed Services to a Diverse Set of Industries |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 5/7/2021 |
| 7.50% (L+6.50%, Floor 1.00%) | 5/7/2026 | 22,162 | 21,687 | 21,786 | |||
|
|
|
|
|
|
|
|
|
| |||||
OVG Business Services, LLC | (10) | Venue Management Services |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 11/29/2021 |
| 7.25% (L+6.25%, Floor 1.00%) | 11/19/2028 | 17,500 | 17,327 | 17,327 | |||
|
|
|
|
|
|
|
|
|
| |||||
RA Outdoors LLC | (10) | Software Solutions Provider for Outdoor Activity Management |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 4/8/2021 |
| 7.75% (L+6.75%, Floor 1.00%) | 4/8/2026 | 18,719 | 18,544 | 17,731 | |||
|
|
|
|
|
|
|
|
|
| |||||
Research Now Group, Inc. and Survey Sampling International, LLC | (11) | Provider of Outsourced Online Surveying |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 12/29/2017 |
| 6.50% (L+5.50%, Floor 1.00%) | 12/20/2024 | 9,897 | 9,897 | 9,787 | |||
|
|
|
|
|
|
|
|
|
| |||||
RM Bidder, LLC | (10) | Scripted and Unscripted TV and |
|
|
|
|
|
|
|
|
| |||
31
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
December 31, 2021
(dollars in thousands)
Portfolio Company (1) (20) | Business Description | Type of Investment (2) (3) (15) | Investment Date (22) | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Digital Programming Provider | ||||||||||||||
|
|
| Member Units |
| 11/12/2015 | 1,854 |
|
|
| 31 | 18 | |||
|
|
| Warrants | (26) | 11/12/2015 |
|
| 10/20/2025 |
| 284 | — | |||
|
|
|
|
|
|
|
|
|
| 315 | 18 | |||
Robbins Bros. Jewelry, Inc. |
| Bridal Jewelry Retailer |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 12/15/2021 |
| 12.00% (L+11.00%, Floor 1.00%) | 12/15/2026 | 4,040 | 3,950 | 3,950 | |||
|
|
| Preferred Equity |
| 12/15/2021 | 1,230 |
|
|
| 1,230 | 1,230 | |||
|
|
|
|
|
|
|
|
|
| 5,180 | 5,180 | |||
Roof Opco, LLC | (10) | Residential Re-Roofing/Repair |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 8/27/2021 |
| 7.00% (L+6.00%, Floor 1.00%) | 8/27/2026 | 3,500 | 3,343 | 3,343 | |||
|
|
|
|
|
|
|
|
|
| |||||
Rug Doctor, LLC. | (10) | Carpet Cleaning Products and Machinery |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 7/16/2021 |
| 7.25% (L+6.25%, Floor 1.00%) | 11/16/2024 | 12,367 | 12,217 | 12,099 | |||
|
|
|
|
|
|
|
|
|
| |||||
Salient Partners L.P. | (11) | Provider of Asset Management Services |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 8/31/2018 |
| 7.00% (L+6.00%, Floor 1.00%) | 10/30/2022 | 6,251 | 6,292 | 4,063 | |||
|
|
| Secured Debt | (9) | 9/30/2021 |
| 6.00% (L+5.00%, Floor 1.00%) | 10/30/2022 | 1,250 | 1,250 | 2,435 | |||
|
|
|
|
|
|
|
|
|
| 7,542 | 6,498 | |||
Savers, Inc. | (11) | For-Profit Thrift Retailer |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 5/14/2021 |
| 6.25% (L+5.50%, Floor 0.75%) | 4/26/2028 | 4,372 | 4,331 | 4,366 | |||
|
|
|
|
|
|
|
|
|
| |||||
SIB Holdings, LLC | (10) | Provider of Cost Reduction Services |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 10/29/2021 |
| 7.00% (L+6.00%, Floor 1.00%) | 10/29/2026 | 7,853 | 7,661 | 7,674 | |||
|
|
| Common Equity |
| 10/29/2021 | 119,048 |
|
|
| 250 | 250 | |||
|
|
|
|
|
|
|
|
|
| 7,911 | 7,924 | |||
Slick Innovations, LLC |
| Text Message Marketing Platform |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt |
| 9/13/2018 |
| 13.00% | 9/13/2023 | 1,330 | 1,211 | 1,330 | |||
|
|
| Common Stock |
| 9/13/2018 | 17,500 |
|
|
| 175 | 380 | |||
|
|
| Warrants | (27) | 9/13/2018 | 4,521 |
| 9/13/2028 | 45 | 100 | ||||
|
|
|
|
|
|
|
|
|
| 1,431 | 1,810 | |||
South Coast Terminals Holdings, LLC | (10) | Specialty Toll Chemical Manufacturer |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 12/10/2021 |
| 7.25% (L+6.25%, Floor 1.00%) | 12/13/2026 | 3,558 | 3,480 | 3,480 | |||
|
|
| Common Equity |
| 12/10/2021 | 60,606 |
|
|
| 61 | 61 | |||
|
|
|
|
|
|
|
|
|
| 3,541 | 3,541 | |||
Student Resource Center, LLC | (10) | Higher Education Services |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 6/25/2021 |
| 9.00% (L+8.00%, Floor 1.00%) | 6/25/2026 | 12,188 | 11,949 | 12,029 | |||
|
|
|
|
|
|
|
|
|
| |||||
Tex Tech Tennis, LLC | (10) | Sporting Goods & Textiles |
|
|
|
|
|
|
|
| ||||
|
|
| Common Stock | (23) | 7/7/2021 | 1,000,000 |
|
|
| 1,000 | 1,000 | |||
|
|
|
|
|
|
|
|
|
| |||||
The Affiliati Network, LLC |
| Performance Marketing Solutions |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt |
| 8/9/2021 |
| 7.00% | 8/9/2026 | 70 | 65 | 65 | |||
|
|
| Secured Debt |
| 8/9/2021 |
| 11.83% | 8/9/2026 | 3,340 | 3,270 | 3,270 | |||
|
|
| Preferred Stock | (8) | 8/9/2021 | 320,000 |
|
|
| 1,600 | 1,600 | |||
|
|
|
|
|
|
|
|
|
| 4,935 | 4,935 | |||
U.S. TelePacific Corp. | (11) | Provider of Communications and Managed Services |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 5/17/2017 |
| 7.00% (L+6.00%, Floor 1.00%) | 5/2/2023 | 12,500 | 12,400 | 9,449 | |||
|
|
|
|
|
|
|
|
|
| |||||
USA DeBusk LLC | (10) | Provider of Industrial Cleaning Services |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 10/22/2019 |
| 6.75% (L+5.75%, Floor 1.00%) | 9/8/2026 | 19,950 | 19,692 | 19,950 | |||
|
|
|
|
|
|
|
|
|
| |||||
Vida Capital, Inc | (11) | Alternative Asset Manager |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt |
| 10/10/2019 |
| 6.10% (L+6.00%) | 10/1/2026 | 6,825 | 6,752 | 6,330 | |||
32
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
December 31, 2021
(dollars in thousands)
Portfolio Company (1) (20) | Business Description | Type of Investment (2) (3) (15) | Investment Date (22) | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
|
|
|
|
|
| |||||
Vistar Media, Inc. | (10) | Operator of Digital Out-of-Home Advertising Platform |
|
|
|
|
|
|
|
| ||||
|
|
| Preferred Stock |
| 4/3/2019 | 70,207 |
|
|
| 767 | 1,720 | |||
|
|
|
|
|
|
|
|
|
| |||||
Volusion, LLC |
| Provider of Online Software-as-a-Service eCommerce Solutions |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (17) | 1/26/2015 |
| 11.50% | 1/26/2020 | 7,472 | 7,472 | 7,472 | |||
|
|
| Unsecured Convertible Debt |
| 5/16/2018 |
| 8.00% | 11/16/2023 | 175 | 175 | 175 | |||
|
|
| Preferred Member Units |
| 1/26/2015 | 2,090,001 |
|
|
| 6,000 | 2,570 | |||
|
|
| Warrants | (27) | 1/26/2015 | 784,867 |
| 1/26/2025 |
| 1,104 | — | |||
|
|
|
|
|
|
|
|
|
| 14,751 | 10,217 | |||
VORTEQ Coil Finishers, LLC | (10) | Specialty Coating of Aluminum and Light-Gauge Steel |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 11/30/2021 |
| 8.50% (L+7.50%, Floor 1.00%) | 11/30/2026 | 19,231 | 18,852 | 18,852 | |||
|
|
| Common Equity |
| 11/30/2021 | 769,231 |
|
|
| 770 | 769 | |||
|
|
|
|
|
|
|
|
|
| 19,622 | 19,621 | |||
Wall Street Prep, Inc. | (10) | Financial Training Services |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 7/19/2021 |
| 8.00% (L+7.00%, Floor 1.00%) | 7/19/2026 | 5,466 | 5,355 | 5,355 | |||
|
|
| Common Stock |
| 7/19/2021 | 500,000 |
|
| 500 | 500 | ||||
|
|
|
|
|
|
|
|
|
| 5,855 | 5,855 | |||
Watterson Brands, LLC | (10) | Facility Management Services |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 12/17/2021 |
| 7.25% (L+6.25%, Floor 1.00%) | 12/17/2026 | 2,337 | 2,278 | 2,278 | |||
|
|
|
|
|
|
|
|
|
| |||||
Winter Services LLC | (10) | Provider of Snow Removal and Ice Management Services |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 11/19/2021 |
| 8.00% (L+7.00%, Floor 1.00%) | 11/19/2026 | 12,847 | 12,494 | 12,548 | |||
|
|
|
|
|
|
|
|
|
| |||||
Xenon Arc, Inc. | (10) | Tech-enabled Distribution Services to Chemicals and Food Ingredients Primary Producers |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 12/17/2021 |
| 6.75% (L+6.00%, Floor 0.75%) | 12/17/2026 | 2,400 | 2,320 | 2,320 | |||
|
|
|
|
|
|
|
|
|
| |||||
YS Garments, LLC | (11) | Designer and Provider of Branded Activewear |
|
|
|
|
|
|
|
|
| |||
|
|
| Secured Debt | (9) | 8/22/2018 |
| 6.50% (L+5.50%, Floor 1.00%) | 8/9/2024 | 6,470 | 6,438 | 6,244 | |||
|
|
|
|
|
|
|
|
| ||||||
Subtotal Non-Control/Non-Affiliate Investments (129.9% of net assets at fair value) |
|
|
|
|
|
|
|
|
| $ | 828,301 | $ | 796,395 | |
Total Portfolio Investments, December 31, 2021 (175.7% of net assets at fair value) |
|
|
|
|
|
|
|
|
|
| $ | 1,067,175 | $ | 1,077,136 |
Short-Term Investments (16) |
|
|
|
|
|
|
|
|
|
| ||||
Fidelity Institutional Money Market Funds (21) |
|
| Prime Money Market Portfolio |
|
|
|
| $ | 4,881 | $ | 4,881 | |||
|
|
|
|
|
|
|
|
|
|
| ||||
US Bank Money Market Account (21) |
|
|
|
|
|
|
|
| 10,566 | 10,566 | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
Total Short-Term Investments |
|
|
|
|
|
|
|
| $ | 15,447 | $ | 15,447 | ||
(1) | All investments are Lower Middle Market portfolio investments, unless otherwise noted. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Lower Middle Market portfolio |
33
MSC INCOME FUND, INC.
Consolidated Schedule of Investments (Continued)
December 31, 2021
(dollars in thousands)
investments. All of the Company’s investments, unless otherwise noted, are encumbered as security for one of the Company’s Credit Facilities. | |
(2) | Debt investments are income producing, unless otherwise noted. Equity and warrants are non-income producing, unless otherwise noted by footnote (8), as described below. |
(3) | See Note C—Fair Value Hierarchy for Investments—Portfolio Composition and Schedule 12-14 for a summary of geographic location of portfolio companies. |
(4) | Principal is net of repayments. Cost is net of repayments and accumulated unearned income. |
(5) | Control investments are defined by the 1940 Act as investments in which more than 25% of the voting securities are owned or where the ability to nominate greater than 50% of the board representation is maintained. |
(6) | Affiliate investments are defined by the 1940 Act as investments in which between 5% and 25% (inclusive) of the voting securities are owned and the investments are not classified as Control investments. |
(7) | Non-Control/Non-Affiliate investments are defined by the 1940 Act as investments that are neither Control investments nor Affiliate investments. |
(8) | Income producing through dividends or distributions. |
(9) | Index based floating interest rate is subject to contractual minimum interest rate. A majority of the variable rate loans in the Company’s investment portfolio 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 Prime Rate), which typically resets every one, three, or six months at the borrower's option. As noted in this schedule, 79% of the loans (based on the par amount) contain LIBOR floors which range between 0.63% and 2.00%, with a weighted-average LIBOR floor of 1.04%. |
(10) | Private Loan portfolio investment. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Private Loan portfolio investments. |
(11) | Middle Market portfolio investment. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Middle Market portfolio investments. |
(12) | Other Portfolio investment. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Other Portfolio investments. |
(13) | Investment is not a qualifying asset as defined under Section 55(a) of the 1940 Act. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets. |
(14) | Non-accrual and non-income producing investment. |
(15) | All of the Company’s portfolio investments are generally subject to restrictions on resale as “restricted securities.” |
(16) | Short-term investments represent an investment in a fund that invests in highly liquid investments with average original maturity dates of three months or less. These short-term investments are included as Cash and cash equivalents on the Consolidated Balance Sheets. |
(17) | Maturity date is under on-going negotiations with the portfolio company and other lenders, if applicable. |
(18) | Investment fair value was determined using significant unobservable inputs, unless otherwise noted. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for further discussion. |
(19) | PIK interest income and cumulative dividend income represent income not paid currently in cash. |
(20) | All portfolio company headquarters are based in the United States, unless otherwise noted. |
(21) | Effective yield as of December 31, 2021 was approximately 0.005% on the US Bank Money Market Account and 0.01% on the Fidelity Institutional Money Market Funds. |
(22) | Investment date represents the date of initial investment in the security position. |
(23) | Shares/Units represent ownership in a related Real Estate or HoldCo entity. |
(24) | Investment is not unitized. Presentation is made in percent of fully diluted ownership unless otherwise indicated. |
(25) | Warrants are presented in equivalent shares with a strike price of $10.92 per share. |
(26) | Warrants are presented in equivalent units with a strike price of $14.28 per unit. |
(27) | Warrants are presented in equivalent shares/units with a strike price of $0.01 per share/unit. |
34
MSC INCOME FUND, INC.
Notes to the Consolidated Financial Statements
(Unaudited)
NOTE A—ORGANIZATION AND BASIS OF PRESENTATION
1. Organization
MSC Income Fund, Inc. (“MSC Income Fund”) is a principal investment firm primarily focused on providing debt capital to middle market (“Middle Market”) companies and customized debt and equity financing to lower middle market (“LMM”) companies. The portfolio investments of MSC Income Fund and its consolidated subsidiaries are typically made to support management buyouts, recapitalizations, growth financings, refinancings and acquisitions of companies that operate in a variety of industry sectors. MSC Income Fund and its consolidated subsidiaries invest primarily in secured debt investments of Middle Market companies generally headquartered in the United States and in secured debt investments, equity investments, warrants and other securities of LMM companies based in the United States. MSC Income Fund seeks to partner with entrepreneurs, business owners and management teams and generally provides “one stop” financing alternatives within its LMM portfolio.
MSC Income Fund was formed in November 2011 to operate as an externally managed business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). MSC Income Fund has elected to be treated for U.S. federal income tax purposes as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). As a result, MSC Income Fund generally does not pay corporate-level U.S. federal income taxes on any net ordinary taxable income or capital gains that it distributes to its stockholders.
On October 28, 2020, MSC Income Fund’s stockholders approved the appointment of MSC Adviser I, LLC (the “Adviser”), which is wholly-owned by Main Street Capital Corporation (“Main Street”), a New York Stock Exchange listed BDC, as MSC Income Fund’s investment adviser and administrator under an Investment Advisory and Administrative Services Agreement dated October 30, 2020 (the “Investment Advisory Agreement”). In such role, the Adviser has the responsibility to manage the business of MSC Income Fund, including the responsibility to identify, evaluate, negotiate and structure prospective investments, make investment and portfolio management decisions, monitor MSC Income Fund’s investment portfolio and provide ongoing administrative services.
MSC Income Fund has certain direct and indirect wholly-owned subsidiaries that have elected to be taxable entities (the “Taxable Subsidiaries”). The primary purpose of the Taxable Subsidiaries is to permit MSC Income Fund to hold equity investments in portfolio companies which are “pass-through” entities for tax purposes. MSC Income Fund also has certain direct and indirect wholly-owned subsidiaries formed for financing purposes (“Structured Subsidiaries”).
Unless otherwise noted or the context otherwise indicates, the terms “we,” “us,” “our” and the “Company” refer to MSC Income Fund and its consolidated subsidiaries, which includes the Taxable Subsidiaries and the Structured Subsidiaries.
2. Basis of Presentation
The Company’s consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The Company is an investment company following accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 946, Financial Services—Investment Companies (“ASC 946”). For each of the periods presented herein, the Company’s consolidated financial statements include the accounts of MSC Income Fund and its consolidated subsidiaries. The Investment Portfolio, as used herein, refers to all of the Company’s investments in Private Loan portfolio companies, investments in LMM portfolio companies, investments in Middle Market portfolio companies and Other Portfolio investments (see Note C—Fair Value Hierarchy for Investments—Portfolio Composition for additional discussion of the Company’s Investment Portfolio and definitions for the defined terms Private Loan and Other Portfolio). The Company’s results of operations for the three and six months ended June 30, 2022 and 2021, cash flows
35
for the six months ended June 30, 2022 and 2021, and financial position as of June 30, 2022 and December 31, 2021, are presented on a consolidated basis. The effects of all intercompany transactions between MSC Income Fund and its consolidated subsidiaries have been eliminated in consolidation.
The accompanying unaudited consolidated financial statements of the Company are presented in conformity with U.S. GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6, 10 and 12 of Regulation S-X. Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with U.S. GAAP are omitted. The unaudited financial statements and notes should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2021. In the opinion of management, the unaudited consolidated financial results included herein contain all adjustments, consisting solely of normal recurring accruals, considered necessary for the fair presentation of financial statements for the interim periods included herein. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the operating results to be expected for the full year. Financial statements prepared on a U.S. GAAP basis require management to make estimates and assumptions that affect the amounts and disclosures reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.
Principles of Consolidation
Under ASC 946, the Company is precluded from consolidating other entities in which the Company has equity investments, including those in which it has a controlling interest, unless the other entity is another investment company. An exception to this general principle in ASC 946 occurs if the Company holds a controlling interest in an operating company that provides all or substantially all of its services directly to the Company or to its portfolio companies. Accordingly, as noted above, the Company’s consolidated financial statements include the financial position and operating results for the Taxable Subsidiaries and its Structured Subsidiaries. The Company has determined that none of its portfolio investments qualify for this exception. Therefore, the Company’s Investment Portfolio is carried on the Consolidated Balance Sheets at fair value, as discussed further in Note B.1.—Summary of Significant Accounting Policies—Valuation of the Investment Portfolio, with any adjustments to fair value recognized as “Net Unrealized Appreciation (Depreciation)” until the investment is realized, usually upon exit, resulting in any gain or loss being recognized as a “Net Realized Gain (Loss)”, in both cases, on the Consolidated Statements of Operations.
Portfolio Investment Classification
The Company classifies its Investment Portfolio in accordance with the requirements of the 1940 Act. Under the 1940 Act, (a) “Control Investments” are defined as investments in which the Company owns more than 25% of the voting securities or has rights to maintain greater than 50% of the board representation, (b) “Affiliate Investments” are defined as investments in which the Company owns between 5% and 25% (inclusive) of the voting securities and does not have rights to maintain greater than 50% of the board representation and (c) “Non-Control/Non-Affiliate Investments” are defined as investments that are neither Control Investments nor Affiliate Investments. For purposes of determining the classification of its Investment Portfolio, the Company has excluded consideration of any voting securities or board appointment rights held by Main Street and third-party investment funds advised by the Adviser.
NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. Valuation of the Investment Portfolio
The Company accounts for its Investment Portfolio at fair value. As a result, the Company follows the provisions of ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value and enhances disclosure requirements for fair value measurements. ASC 820 requires the Company to assume that the portfolio investment is to be sold in the principal market to independent market participants, which may be a hypothetical market. Market participants are defined as buyers and sellers in the principal market that are independent, knowledgeable and willing and able to transact.
The Company’s portfolio strategy calls for it to invest primarily in debt securities issued by Middle Market companies and illiquid debt and equity securities issued by privately held, LMM companies. The Middle Market
36
companies in which the Company invests are generally larger in size and can be more liquid than the LMM companies. The Company categorizes some of its investments in Middle Market companies and LMM companies as Private Loan portfolio investments, which are primarily debt securities in privately held companies that have been originated directly by Main Street or through strategic relationships with other investment funds on a collaborative basis, and are often referred to in the debt markets as “club deals.” Private Loan investments are made in companies that are consistent with the size of companies the Company invests in through its Middle Market portfolio and LMM portfolio. The Company’s portfolio also includes Other Portfolio investments which primarily consist of investments that are not consistent with the typical profiles for its Private Loan portfolio investments, LMM portfolio investments or Middle Market portfolio investments, including investments which may be managed by third parties. The Company’s portfolio may also include short-term portfolio investments that are atypical of the Company’s Private Loan, LMM and Middle Market portfolio investments in that they are intended to be a short-term deployment of capital and are more liquid than investments within the other portfolios. The Company’s portfolio investments may be subject to restrictions on resale.
Private Loan investments may include investments which have no established trading market or have established markets that are not active. LMM investments and Other Portfolio investments generally have no established trading market, while Middle Market and short-term portfolio investments generally have established markets that are not active. The Company determines in good faith the fair value of its Investment Portfolio pursuant to a valuation policy in accordance with ASC 820, with such valuation process approved by its Board of Directors and in accordance with the 1940 Act. The Company’s valuation policies and processes are intended to provide a consistent basis for determining the fair value of the Company’s Investment Portfolio.
For Private Loan and Middle Market portfolio investments in debt securities for which it has determined that third-party quotes or other independent pricing are not available or appropriate, the Company generally estimates the fair value based on the assumptions that it believes hypothetical market participants would use to value the investment in a current hypothetical sale using a yield-to-maturity model (“Yield-to-Maturity”) valuation method. For LMM portfolio investments, the Company generally reviews external events, including private mergers, sales and acquisitions involving comparable companies, and includes these events in the valuation process by using an enterprise value waterfall methodology (“Waterfall”) for its LMM equity investments and an income approach using a Yield-to-Maturity valuation method for its LMM debt investments. For Middle Market portfolio investments, the Company primarily uses quoted prices in the valuation process. The Company determines the appropriateness of the use of third-party broker quotes, if any, in determining fair value based on its understanding of the level of actual transactions used by the broker to develop the quote and whether the quote was an indicative price or binding offer, the depth and consistency of broker quotes and the correlation of changes in broker quotes with underlying performance of the portfolio company and other market indices. For its Other Portfolio equity investments, the Company generally calculates the fair value of the investment primarily based on the net asset value (“NAV”) of the fund and adjusts the fair value for other factors deemed relevant that would affect the fair value of the investment. All of the valuation approaches for the Company’s portfolio investments estimate the value of the investment as if the Company was to sell, or exit, the investment as of the measurement date.
These valuation approaches consider the value associated with the Company’s ability to control the capital structure of the portfolio company, as well as the timing of a potential exit. For valuation purposes, “control” portfolio investments are composed of debt and equity securities in companies for which the Company has a controlling interest in the equity ownership of the portfolio company or the ability to nominate a majority of the portfolio company’s board of directors. For valuation purposes, “non-control” portfolio investments are generally composed of debt and equity securities in companies for which the Company does not have a controlling interest in the equity ownership of the portfolio company or the ability to nominate a majority of the portfolio company’s board of directors.
Under the Waterfall valuation method, the Company estimates the enterprise value of a portfolio company using a combination of market and income approaches or other appropriate valuation methods, such as considering recent transactions in the equity securities of the portfolio company or third-party valuations of the portfolio company, and then performs a Waterfall calculation by allocating the enterprise value over the portfolio company’s securities in order of their preference relative to one another. The enterprise value is the fair value at which an enterprise could be sold in a transaction between two willing parties, other than through a forced or liquidation sale. Typically, privately held companies are bought and sold based on multiples of earnings before interest, taxes, depreciation and amortization (“EBITDA”), cash flows, net income, revenues, or in limited cases, book value. There is no single methodology for estimating enterprise value. For any one portfolio company, enterprise value is generally described as a range of values
37
from which a single estimate of enterprise value is derived. In estimating the enterprise value of a portfolio company, the Company analyzes various factors including the portfolio company’s historical and projected financial results. Due to SEC deadlines for the Company’s quarterly and annual financial reporting, the operating results of a portfolio company used in the current period valuation are generally the results from the period ended three months prior to such valuation date and may include unaudited, projected, budgeted or pro forma financial information and may require adjustments for non-recurring items or to normalize the operating results that may require significant judgment in determining. In addition, projecting future financial results requires significant judgment regarding future growth assumptions. In evaluating the operating results, the Company also analyzes the impact of exposure to litigation, loss of customers or other contingencies. After determining the appropriate enterprise value, the Company allocates the enterprise value to investments in order of the legal priority of the various components of the portfolio company’s capital structure. In applying the Waterfall valuation method, the Company assumes the loans are paid off at the principal amount in a change in control transaction and are not assumed by the buyer, which the Company believes is consistent with its past transaction history and standard industry practices.
Under the Yield-to-Maturity valuation method, the Company also uses the income approach to determine the fair value of debt securities based on projections of the discounted future free cash flows that the debt security will likely generate, including analyzing the discounted cash flows of interest and principal amounts for the debt security, as set forth in the associated loan agreements, as well as the financial position and credit risk of the portfolio company. The Company’s estimate of the expected repayment date of its debt securities is generally the maturity date of the instrument, as the Company generally intends to hold its loans and debt securities to maturity. The Yield-to-Maturity analysis also considers changes in leverage levels, credit quality, portfolio company performance, changes in market-based interest rates and other factors. The Company will generally use the value determined by the Yield-to-Maturity analysis as the fair value for that security; however, because of the Company’s general intent to hold its loans to maturity, the fair value will not exceed the principal amount of the debt security valued using the Yield-to-Maturity valuation method. A change in the assumptions that the Company uses to estimate the fair value of its debt securities using the Yield-to-Maturity valuation method could have a material impact on the determination of fair value. If there is deterioration in credit quality or if a debt security is in workout status, the Company may consider other factors in determining the fair value of the debt security, including the value attributable to the debt security from the enterprise value of the portfolio company or the proceeds that would most likely be received in a liquidation analysis.
Under the NAV valuation method, for an investment in an investment fund that does not have a readily determinable fair value, the Company measures the fair value of the investment predominately based on the NAV of the investment fund as of the measurement date and adjusts the investment’s fair value for factors known to the Company that would affect that fund’s NAV, including, but not limited to, fair values for individual investments held by the fund if the Company holds the same investment or for a publicly traded investment. In addition, in determining the fair value of the investment, the Company considers whether adjustments to the NAV are necessary in certain circumstances, based on the analysis of any restrictions on redemption of the Company’s investment as of the measurement date, recent actual sales or redemptions of interests in the investment fund, and expected future cash flows available to equity holders, including the rate of return on those cash flows compared to an implied market return on equity required by market participants, or other uncertainties surrounding the Company’s ability to realize the full NAV of its interests in the investment fund.
Pursuant to its internal valuation process and the requirements under the 1940 Act, the Company performs valuation procedures on each of its portfolio investments quarterly. For valuation purposes, all of the Company’s Private Loan portfolio investments are non-control investments. For Private Loan portfolio investments for which it has determined that third-party quotes or other independent pricing are not available or appropriate, the Company generally estimates the fair value based on the assumptions that it believes hypothetical market participants would use to value such Private Loan debt investments in a current hypothetical sale using the Yield-to-Maturity valuation method and such Private Loan equity investments in a current hypothetical sale using the Waterfall valuation method.
In addition to its internal valuation process, in arriving at estimates of fair value for its investments in its Private Loan portfolio companies, the Company, among other things, consults with a nationally recognized independent financial advisory services firm. The nationally recognized independent financial advisory services firm analyzes and provides observations and recommendations and an assurance certification regarding the Company’s determinations of the fair value of its Private Loan portfolio company investments. The nationally recognized independent financial advisory services firm is generally consulted relative to the Company’s investments in each Private Loan portfolio
38
company at least once every calendar year, and for the Company’s investments in new Private Loan portfolio companies, at least once in the twelve-month period subsequent to the initial investment. In certain instances, the Company may determine that it is not cost effective, and as a result is not in its stockholders’ best interest, to consult with the nationally recognized independent financial advisory services firm on its investments in one or more Private Loan portfolio companies. Such instances include, but are not limited to, situations where the fair value of the Company’s investment in a Private Loan portfolio company is determined to be insignificant relative to the total Investment Portfolio. The Company consulted with and received an assurance certification from its independent financial advisory services firm in arriving at its determination of fair value on its investments in a total of 22 Private Loan portfolio companies for the six months ended June 30, 2022, representing 41% of the total Private Loan portfolio at fair value as of June 30, 2022, and on a total of 12 Private Loan portfolio companies for the six months ended June 30, 2021, representing 30% of the total Private Loan portfolio at fair value as of June 30, 2021. Excluding its investments in Private Loan portfolio companies that, as of June 30, 2022 and 2021, as applicable, had not been in the Investment Portfolio for at least twelve months subsequent to the initial investment and its investments in Private Loan portfolio companies that were not reviewed because the investment is valued based upon third-party quotes or other independent pricing, the percentage of the Private Loan portfolio reviewed and certified by the Company’s independent financial advisory services firm for the six months ended June 30, 2022 and 2021 was 48% and 42% of the total Private Loan portfolio at fair value as of June 30, 2022 and 2021, respectively.
In addition to its internal valuation process, in arriving at estimates of fair value for its investments in its LMM portfolio companies, the Company, among other things, consults with a nationally recognized independent financial advisory services firm. The nationally recognized independent financial advisory services firm analyzes and provides observations, recommendations and an assurance certification regarding the Company’s determinations of the fair value of its LMM portfolio company investments. The nationally recognized independent financial advisory services firm is generally consulted relative to the Company’s investments in each LMM portfolio company at least once every calendar year, and for the Company’s investments in new LMM portfolio companies, at least once in the twelve-month period subsequent to the initial investment. In certain instances, the Company may determine that it is not cost-effective, and as a result is not in its stockholders’ best interest, to consult with the nationally recognized independent financial advisory services firm on its investments in one or more LMM portfolio companies. Such instances include, but are not limited to, situations where the fair value of the Company’s investment in a LMM portfolio company is determined to be insignificant relative to the total Investment Portfolio. The Company consulted with and received an assurance certification from its independent financial advisory services firm in arriving at the Company’s determination of fair value on its investments in a total of 24 LMM portfolio companies for six months ended June 30, 2022, representing 60% of the total LMM portfolio at fair value as of June 30, 2022 and on a total of 18 LMM portfolio companies for the six months ended June 30, 2021, representing 55% of the total LMM portfolio at fair value as of June 30, 2021. Excluding its investments in LMM portfolio companies that, as of June 30, 2022 and 2021, as applicable, had not been in the Investment Portfolio for at least twelve months subsequent to the initial investment or whose primary purpose is to own real estate for which a third-party appraisal is obtained on at least an annual basis, the percentage of the LMM portfolio reviewed and certified by the Company’s independent financial advisory services firm was 63% and 59% of the total LMM portfolio at fair value as of June 30, 2022 and 2021, respectively.
For valuation purposes, all of the Company’s Middle Market portfolio investments are non-control investments. To the extent sufficient observable inputs are available to determine fair value, the Company uses observable inputs to determine the fair value of these investments through obtaining third-party quotes or other independent pricing. For Middle Market portfolio investments for which it has determined that third-party quotes or other independent pricing are not available or appropriate, the Company generally estimates the fair value based on the assumptions that it believes hypothetical market participants would use to value such Middle Market debt investments in a current hypothetical sale using the Yield-to-Maturity valuation method and such Middle Market equity investments in a current hypothetical sale using the Waterfall valuation method. The Company generally consults on a limited basis with a financial advisory services firm in connection with determining the fair value of its Middle Market portfolio investments due to the nature of these investments. The vast majority (87% and 93% as of June 30, 2022 and December 31, 2021, respectively) of the Middle Market portfolio investments (i) are valued using third party quotes or other independent pricing services, (ii) have received an assurance certification from independent financial services firm within the last twelve months or (iii) are new investments that have not been in the Investment Portfolio for at least twelve months subsequent to the initial investment.
For valuation purposes, all of the Company’s Other Portfolio investments are non-control investments. The Company’s Other Portfolio investments comprised 2.6% and 2.5% of the Company’s Investment Portfolio at fair value
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as of June 30, 2022 and December 31, 2021, respectively. Similar to the LMM investment portfolio, market quotations for Other Portfolio equity investments are generally not readily available. For its Other Portfolio equity investments, the Company generally determines the fair value of these investments using the NAV valuation method.
Due to the inherent uncertainty in the valuation process, the Company’s determination of fair value for its Investment Portfolio may differ materially from the values that would have been determined had a ready market for the securities existed. In addition, changes in the market environment, portfolio company performance and other events that may occur over the lives of the investments may cause the gains or losses ultimately realized on these investments to be materially different than the valuations currently assigned. The Company determines the fair value of each individual investment and records changes in fair value as unrealized appreciation or depreciation.
The Company uses an internally developed portfolio investment rating system in connection with its investment oversight, portfolio management and analysis and investment valuation procedures for its Private Loan, LMM and Middle Market portfolio companies. This system takes into account both quantitative and qualitative factors of the Private Loan, LMM and Middle Market portfolio companies.
In December 2020, the SEC adopted Rule 2a-5 under the 1940 Act, which permits a BDC’s board of directors to designate its executive officers or investment adviser as a valuation designee to determine the fair value for its investment portfolio, subject to the active oversight of the board. The Company’s Board of Directors has approved policies and procedures pursuant to Rule 2a-5 (the “Valuation Procedures”) and has designated the Adviser, led by a group of Main Street’s and the Adviser’s executive officers, to serve as the Board of Directors’ valuation designee. The Company adopted the Valuation Procedures effective April 1, 2021. The Company believes its Investment Portfolio as of June 30, 2022 and December 31, 2021 approximates fair value as of those dates based on the markets in which the Company operates and other conditions in existence on those reporting dates.
2. Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results may differ from these estimates under different conditions or assumptions. Additionally, as explained in Note B.1.—Summary of Significant Accounting Policies—Valuation of the Investment Portfolio, the consolidated financial statements include investments in the Investment Portfolio whose values have been estimated by the Company pursuant to valuation policies and procedures approved and overseen by the Company’s Board of Directors, in the absence of readily ascertainable market values. Because of the inherent uncertainty of the Investment Portfolio valuations, those estimated values may differ materially from the values that would have been determined had a ready market for the securities existed.
Macroeconomic factors, including the COVID-19 pandemic, risk of recession, inflation, supply chain constraints or disruptions and rising interest rates, and the related effect on the U.S. and global economies, have impacted, and may continue to impact, the businesses and operating results of certain of the Company’s portfolio companies, as well as market interest rate spreads. As a result of these and other current effects of macroeconomic factors, as well as the uncertainty regarding the extent and duration of their impact, the valuation of the Company’s Investment Portfolio has and may continue to experience increased volatility.
3. Cash and Cash Equivalents
Cash and cash equivalents consist of cash and highly liquid investments with an original maturity of three months or less at the date of purchase. These highly liquid, short-term investments are included in the Consolidated Schedule of Investments. Cash and cash equivalents are carried at cost, which approximates fair value. At June 30, 2022, the Company had investments in short-term money market accounts totaling $2.5 million classified as cash equivalents.
At June 30, 2022, cash balances totaling $4.6 million exceeded Federal Deposit Insurance Corporation insurance protection levels, subjecting the Company to risk related to the uninsured balance. All of the Company’s cash deposits are held at large established high credit quality financial institutions and management believes that the risk of loss associated with any uninsured balances is remote.
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4. Interest, Dividend and Fee Income
The Company records interest and dividend income on the accrual basis to the extent amounts are expected to be collected. Dividend income is recorded as dividends are declared by the portfolio company or at the point an obligation exists for the portfolio company to make a distribution. In accordance with the Company’s valuation policies, the Company evaluates accrued interest and dividend income periodically for collectability. When a loan or debt security becomes 90 days or more past due, and if the Company otherwise does not expect the debtor to be able to service its debt obligation, the Company will generally place the loan or debt security on non-accrual status and cease recognizing interest income on that loan or debt security until the borrower has demonstrated the ability and intent to pay contractual amounts due. If a loan or debt security’s status significantly improves regarding the debtor’s ability to service the debt obligation, or if a loan or debt security is sold or written off, the Company removes it from non-accrual status.
As of June 30, 2022, the Company’s total Investment Portfolio had four investments on non-accrual status, which comprised 0.6% of its fair value and 2.7% of its cost. As of December 31, 2021, the Company’s total Investment Portfolio had four investments on non-accrual status, which comprised 0.7% of its fair value and 2.8% of its cost.
Interest income from investments in the “equity” class of security of collateralized loan obligation (“CLO”) funds (typically subordinated notes) is recorded based upon an estimation of an effective yield to expected maturity utilizing estimated projected cash flows in accordance with ASC 325-40, Beneficial Interests in Securitized Financial Assets. The Company monitors the expected cash inflows from its investment in a CLO, including the expected residual payments, and the effective yield is determined and updated periodically.
The Company holds certain debt and preferred equity instruments in its Investment Portfolio that contain payment-in-kind (“PIK”) interest and cumulative dividend provisions. The PIK interest, computed at the contractual rate specified in each debt agreement, is periodically added to the principal balance of the debt and is recorded as interest income. Thus, the actual collection of this interest may be deferred until the time of debt principal repayment. Cumulative dividends are recorded as dividend income, and any dividends in arrears are added to the balance of the preferred equity investment. The actual collection of these dividends in arrears may be deferred until such time as the preferred equity is redeemed or sold. To maintain RIC tax treatment (as discussed in Note B.7.—Summary of Significant Accounting Policies —Income Taxes below), these non-cash sources of income may need to be paid out to stockholders in the form of distributions, even though the Company may not have collected the PIK interest and cumulative dividends in cash. The Company stops accruing PIK interest and cumulative dividends and writes off any accrued and uncollected interest and dividends in arrears when it determines that such PIK interest and dividends in arrears are no longer collectible. For the three months ended June 30, 2022 and 2021, (i) 3.5% and 2.5%, respectively, of the Company’s total investment income was attributable to PIK interest income not paid currently in cash and (ii) 0.3% and 0.6%, respectively, of the Company’s total investment income was attributable to cumulative dividend income not paid currently in cash. For the six months ended June 30, 2022 and 2021, (i) 2.7% and 2.4%, respectively, of the Company’s total investment income was attributable to PIK interest income not paid currently in cash and (ii) 1.1% and 0.7%, respectively, of the Company’s total investment income was attributable to cumulative dividend income not paid currently in cash.
The Company may periodically provide services, including structuring and advisory services, to its portfolio companies or other third parties. For services that are separately identifiable, fee income is recognized as earned. Fees received in connection with debt financing transactions are generally deferred and are accreted into income over the life of the financing.
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A presentation of total investment income the Company received from its Investment Portfolio in each of the periods presented is as follows:
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
2022 |
| 2021 |
| 2022 |
| 2021 |
| |||||
(dollars in thousands) | ||||||||||||
Interest, fee and dividend income: | ||||||||||||
Interest income | $ | 21,162 | $ | 17,320 | $ | 41,231 | $ | 33,400 | ||||
Dividend income |
| 2,471 |
| 5,026 |
| 5,264 |
| 8,978 | ||||
Fee income |
| 706 |
| 150 |
| 1,245 |
| 390 | ||||
Total interest, fee and dividend income | $ | 24,339 | $ | 22,496 | $ | 47,740 | $ | 42,768 | ||||
5. Deferred Financing Costs
Deferred financing costs include commitment fees and other direct costs incurred in connection with arranging the Company’s borrowings. These costs were incurred in connection with the Company’s Credit Facilities (see Note E—Debt) and have been capitalized as an asset and reflected in the Consolidated Balance Sheets as Deferred financing costs. Deferred financing costs incurred in connection with the Series A Notes (as defined below in Note E—Debt) are recorded as a direct deduction from the principal amount outstanding.
6. Unearned Income—Debt Origination Fees and Original Issue Discount and Discounts / Premiums to Par Value
The Company capitalizes debt origination fees received in connection with financings and reflects such fees as unearned income netted against the applicable debt investments. The unearned income from the fees is accreted into income over the life of the financing.
In connection with its portfolio debt investments, the Company sometimes receives nominal cost warrants or warrants with an exercise price below the fair value of the underlying equity (together, “nominal cost equity”) that are valued as part of the negotiation process with the particular portfolio company. When the Company receives nominal cost equity, it allocates its cost basis in its investment between its debt security and its nominal cost equity at the time of origination based on amounts negotiated with the particular portfolio company. The allocated amounts are based upon the fair value of the nominal cost equity, which is then used to determine the allocation of cost to the debt security. Any discount recorded on a debt investment resulting from this allocation is reflected as unearned income, which is netted against the applicable debt investment, and accreted into interest income over the life of the debt investment. The actual collection of this interest is deferred until the time of debt principal repayment.
The Company may also purchase debt securities at a discount or at a premium to the par value of the debt security. In the case of a purchase at a discount, the Company records the investment at the par value of the debt security net of the discount, and the discount is accreted into interest income over the life of the debt investment. In the case of a purchase at a premium, the Company records the investment at the par value of the debt security plus the premium, and the premium is amortized as a reduction to interest income over the life of the debt investment.
To maintain RIC tax treatment (as discussed in Note B.7.—Summary of Significant Accounting Policies —Income Taxes below), these non-cash sources of income may need to be paid out to stockholders in the form of distributions, even though the Company may not have collected the interest income. For the three months ended June 30, 2022 and 2021, 2.6% and 4.8%, respectively, of the Company’s total investment income was attributable to interest income from the accretion of discounts associated with debt investments, net of any premium reduction. For the six months ended June 30, 2022 and 2021, 2.7% and 4.9%, respectively, of the Company’s total investment income was attributable to interest income from the accretion of discounts associated with debt investments, net of any premium reduction.
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7. Income Taxes
MSC Income Fund has elected to be treated for U.S. federal income tax purposes as a RIC. MSC Income Fund’s taxable income includes the taxable income generated by MSC Income Fund and certain of its subsidiaries, including the Structured Subsidiaries, which are treated as disregarded entities for tax purposes. As a RIC, MSC Income Fund generally will not pay corporate-level U.S. federal income taxes on any net ordinary taxable income or capital gains that MSC Income Fund distributes to its stockholders. MSC Income Fund must generally distribute at least 90% of its “investment company taxable income” (which is generally its net ordinary taxable income and realized net short-term capital gains in excess of realized net long-term capital losses) and 90% of its tax-exempt income to maintain its RIC status (pass-through tax treatment for amounts distributed). As part of maintaining RIC status, undistributed taxable income (subject to a 4% non-deductible U.S. federal excise tax) pertaining to a given fiscal year may be distributed up to twelve months subsequent to the end of that fiscal year, provided such dividends are declared on or prior to the later of (i) the filing of the U.S. federal income tax return for the applicable fiscal year or (ii) the fifteenth day of the ninth month following the close of the year in which such taxable income was generated.
The Taxable Subsidiaries primarily hold certain portfolio equity investments for the Company. The Taxable Subsidiaries permit the Company to hold equity investments in portfolio companies which are “pass-through” entities for tax purposes and to continue to comply with the “source-of-income” requirements contained in the RIC tax provisions of the Code. The Taxable Subsidiaries are consolidated with the Company for U.S. GAAP financial reporting purposes, and the portfolio investments held by the Taxable Subsidiaries are included in the Company’s consolidated financial statements as portfolio investments and recorded at fair value. The Taxable Subsidiaries are not consolidated with MSC Income Fund for income tax purposes and may generate income tax expense, or benefit, and tax assets and liabilities, as a result of their ownership of certain portfolio investments. The taxable income, or loss, of the Taxable Subsidiaries may differ from their book income, or loss, due to temporary book and tax timing differences and permanent differences. The Taxable Subsidiaries are each taxed at corporate income tax rates based on their taxable income. The income tax expense, or benefit, if any, and the related tax assets and liabilities, of the Taxable Subsidiaries are reflected in the Company’s consolidated financial statements.
The Taxable Subsidiaries use the liability method in accounting for income taxes. Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements, using statutory tax rates in effect for the year in which the temporary differences are expected to reverse. A valuation allowance is provided, if necessary, against deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company’s net assets as included on the Consolidated Balance Sheets and Consolidated Statements of Changes in Net Assets include an adjustment to classification as a result of permanent book-to-tax differences, which include differences in the book and tax treatment of income and expenses.
Taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses. Taxable income generally excludes net unrealized appreciation or depreciation, as investment gains or losses are not included in taxable income until they are realized.
8. Net Realized Gains or Losses and Net Unrealized Appreciation or Depreciation
Realized gains or losses are measured by the difference between the net proceeds from the sale or redemption of an investment or a financial instrument and the cost basis of the investment or financial instrument, without regard to unrealized appreciation or depreciation previously recognized, and includes investments written-off during the period net of recoveries and realized gains or losses from in-kind redemptions. Net unrealized appreciation or depreciation reflects the net change in the fair value of the Investment Portfolio and financial instruments and the reclassification of any prior period unrealized appreciation or depreciation on exited investments and financial instruments to realized gains or losses.
9. Fair Value of Financial Instruments
Fair value estimates are made at discrete points in time based on relevant information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. The Company believes that the carrying amounts of its financial instruments, consisting of cash and cash
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equivalents, receivables, payables and other liabilities approximate the fair values of such items due to the short-term nature of these instruments.
To estimate the fair value of the Company’s Series A Notes as disclosed in Note E—Debt, the Company uses the Yield-to-Maturity valuation method based on projections of the discounted future free cash flows that the debt security will likely generate, including both the discounted cash flows of the associated interest and principal amounts for the debt security.
10. Earnings per Share
Net increase in net assets resulting from operations per share and net investment income per share are computed utilizing the weighted-average number of shares of common stock outstanding for the period.
11. Recently Issued or Adopted Accounting Standards
In March 2020, the FASB issued ASU 2020-04, “Reference rate reform (Topic 848)—Facilitation of the effects of reference rate reform on financial reporting.” The amendments in this update provide optional expedients and exceptions for applying U.S. GAAP to certain contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform and became effective upon issuance for all entities. The Company has agreements that have LIBOR as a reference rate with certain portfolio companies and also with certain lenders. Many of these agreements include language for choosing an alternative successor rate if LIBOR reference is no longer considered to be appropriate. Contract modifications are required to be evaluated in determining whether the modifications result in the establishment of new contracts or the continuation of existing contracts. The Company adopted this amendment in March 2020 and plans to apply the amendments in this update to account for contract modifications due to changes in reference rates when LIBOR reference is no longer used. The Company utilized the optional expedients and exceptions provided by ASU 2020-04 during the six months ended June 30, 2022, the effect of which was not material to the consolidated financial statements and the notes thereto. The Company continues to evaluate the potential impact that the amendments in this update will have on its consolidated financial statements and disclosures.
From time to time, new accounting pronouncements are issued by the FASB or other standards-setting bodies that are adopted by the Company as of the specified effective date. The Company believes that the impact of recently issued standards and any that are not yet effective will not have a material impact on its consolidated financial statements upon adoption.
NOTE C—FAIR VALUE HIERARCHY FOR INVESTMENTS—PORTFOLIO COMPOSITION
ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and enhances disclosure requirements for fair value measurements. The Company accounts for its investments at fair value.
Fair Value Hierarchy
In accordance with ASC 820, the Company has categorized its investments based on the priority of the inputs to the valuation technique into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical investments (Level 1) and the lowest priority to unobservable inputs (Level 3).
Investments recorded on the Company’s balance sheets are categorized based on the inputs to the valuation techniques as follows:
Level 1—Investments whose values are based on unadjusted quoted prices for identical assets in an active market that the Company has the ability to access (examples include investments in active exchange-traded equity securities and investments in most U.S. government and agency securities).
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Level 2—Investments whose values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the investment. Level 2 inputs include the following:
| ● | Quoted prices for similar assets in active markets (for example, investments in restricted stock); |
| ● | Quoted prices for identical or similar assets in non-active markets (for example, investments in thinly traded public companies); |
| ● | Pricing models whose inputs are observable for substantially the full term of the investment (for example, market interest rate indices); and |
| ● | Pricing models whose inputs are derived principally from, or corroborated by, observable market data through correlation or other means for substantially the full term of the investment. |
Level 3—Investments whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement (for example, investments in illiquid securities issued by privately held companies). These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the investment.
As required by ASC 820, when the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore, unrealized appreciation and depreciation related to such investments categorized within the Level 3 tables below may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3).
As of June 30, 2022 and December 31, 2021, the Company’s Private Loan portfolio investments primarily consisted of investments in interest-bearing secured debt investments. The fair value determination for these investments consisted of a combination of observable inputs in non-active markets for which sufficient observable inputs were not available to determine the fair value of these investments and unobservable inputs. As a result, all of the Company’s Private Loan portfolio investments were categorized as Level 3 as of June 30, 2022 and December 31, 2021.
As of June 30, 2022 and December 31, 2021, all of the Company’s LMM portfolio investments consisted of illiquid securities issued by privately held companies and the fair value determination for these investments primarily consisted of unobservable inputs. As a result, all of the Company’s LMM portfolio investments were categorized as Level 3 as of June 30, 2022 and December 31, 2021.
As of June 30, 2022 and December 31, 2021, the Company’s Middle Market portfolio investments consisted primarily of investments in secured and unsecured debt investments and independently rated debt investments. The fair value determination for these investments consisted of a combination of observable inputs in non-active markets for which sufficient observable inputs were not available to determine the fair value of these investments and unobservable inputs. As a result, all of the Company’s Middle Market portfolio investments were categorized as Level 3 as of June 30, 2022 and December 31, 2021.
As of June 30, 2022 and December 31, 2021, the Company’s Other Portfolio investments consisted of illiquid securities issued by privately held companies and the fair value determination for these investments primarily consisted of unobservable inputs. As a result, all of the Company’s Other Portfolio investments were categorized as Level 3 as of June 30, 2022 and December 31, 2021.
The fair value determination of each portfolio investment categorized as Level 3 required one or more of the following unobservable inputs:
| ● | Financial information obtained from each portfolio company, including unaudited statements of operations and balance sheets for the most recent period available as compared to budgeted numbers; |
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| ● | Current and projected financial condition of the portfolio company; |
| ● | Current and projected ability of the portfolio company to service its debt obligations; |
| ● | Type and amount of collateral, if any, underlying the investment; |
| ● | Current financial ratios (e.g., fixed charge coverage ratio, interest coverage ratio and net debt/EBITDA ratio) applicable to the investment; |
| ● | Current liquidity of the investment and related financial ratios (e.g., current ratio and quick ratio); |
| ● | Pending debt or capital restructuring of the portfolio company; |
| ● | Projected operating results of the portfolio company; |
| ● | Current information regarding any offers to purchase the investment; |
| ● | Current ability of the portfolio company to raise any additional financing as needed; |
| ● | Changes in the economic environment which may have a material impact on the operating results of the portfolio company; |
| ● | Internal occurrences that may have an impact (both positive and negative) on the operating performance of the portfolio company; |
| ● | Qualitative assessment of key management; |
| ● | Contractual rights, obligations or restrictions associated with the investment; and |
| ● | Other factors deemed relevant. |
The use of significant unobservable inputs creates uncertainty in the measurement of fair value as of the reporting date. The significant unobservable inputs used in the fair value measurement of the Company’s LMM equity securities, which are generally valued through an average of the discounted cash flow technique and the market comparable/enterprise value technique (unless one of these approaches is determined to not be appropriate), are (i) EBITDA multiples and (ii) the weighted-average cost of capital (“WACC”). Significant increases (decreases) in EBITDA multiple inputs in isolation would result in a significantly higher (lower) fair value measurement. On the contrary, significant increases (decreases) in WACC inputs in isolation would result in a significantly lower (higher) fair value measurement. The significant unobservable inputs used in the fair value measurement of the Company’s Private Loan, LMM and Middle Market securities are (i) risk adjusted discount rates used in the Yield-to-Maturity valuation technique (see Note B.1.—Valuation of the Investment Portfolio) and (ii) the percentage of expected principal recovery. Significant increases (decreases) in any of these discount rates in isolation would result in a significantly lower (higher) fair value measurement. Significant increases (decreases) in any of these expected principal recovery percentages in isolation would result in a significantly higher (lower) fair value measurement. However, due to the nature of certain investments, fair value measurements may be based on other criteria, such as third-party appraisals of collateral and fair values as determined by independent third parties, which are not presented in the tables below.
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The following tables provide a summary of the significant unobservable inputs used to fair value the Company’s Level 3 portfolio investments as of June 30, 2022 and December 31, 2021:
| Fair Value as of |
|
|
|
|
| ||||||||
June 30, |
| |||||||||||||
Type of | 2022 | Significant | Weighted |
| ||||||||||
Investment |
| (in thousands) | Valuation Technique | Unobservable Inputs | Range(3) | Average(3) | Median(3) | |||||||
Equity investments | $ | 222,161 |
| Discounted cash flow |
| WACC |
| 10.6% - 21.8% |
| 14.4 | % | 15.8 | % | |
| Market comparable / Enterprise value |
| EBITDA multiple(1) |
| 4.3x - 8.9x(2) |
| 7.2x |
| 6.1x | |||||
Debt investments | 759,854 |
| Discounted cash flow |
| Risk adjusted discount factor |
| 6.5% - 15.0%(2) |
| 10.7 | % | 10.3 | % | ||
| Expected principal recovery percentage |
| 0.6% - 200.0% |
| 99.6 | % | 100.0 | % | ||||||
Debt investments | 123,662 |
| Market approach |
| Third‑party quote |
| 5.8 - 99.8 |
| 89.7 |
| 94.5 | |||
Total Level 3 investments | $ | 1,105,677 | ||||||||||||
| (1) | EBITDA may include proforma adjustments and/or other addbacks based on specific circumstances related to each investment. |
| (2) | Range excludes outliers that are greater than one standard deviation from the mean. Including these outliers, the range for EBITDA multiple is 3.0x - 15.7x and the range for risk adjusted discount factor is 5.0% - 38.5%. |
| (3) | Does not include investments for which the valuation technique does not include the use of the applicable fair value input. |
| Fair Value as of |
|
|
|
|
|
| |||||||
December 31, |
| |||||||||||||
Type of | 2021 | Significant | Weighted |
| ||||||||||
Investment |
| (in thousands) | Valuation Technique | Unobservable Inputs | Range(3) | Average(3) | Median(3) | |||||||
Equity investments | $ | 197,926 |
| Discounted cash flow |
| WACC |
| 10.1% - 19.1% |
| 13.4 | % | 14.8 | % | |
| Market comparable / Enterprise value |
| EBITDA multiple(1) |
| 4.9x - 8.3x(2) |
| 7.3x |
| 6.2x | |||||
Debt investments | 743,211 |
| Discounted cash flow |
| Risk adjusted discount factor |
| 5.2% - 15.0%(2) |
| 8.1 | % | 9.0 | % | ||
| Expected principal recovery percentage |
| 1.2% - 100.0% |
| 100.0 | % | 100.0 | % | ||||||
Debt investments | 135,999 |
| Market approach |
| Third‑party quote |
| 3 - 100.2 |
| 94.3 |
| 97.3 | |||
Total Level 3 investments | $ | 1,077,136 | ||||||||||||
| (1) | EBITDA may include proforma adjustments and/or other addbacks based on specific circumstances related to each investment. |
| (2) | Range excludes outliers that are greater than one standard deviation from the mean. Including these outliers, the range for EBITDA multiple is 3.8x - 10.0x and the range for risk adjusted discount factor is 4.4% - 38.5%. |
| (3) | Does not include investments for which the valuation technique does not include the use of the applicable fair value input. |
The following tables provide a summary of changes in fair value of the Company’s Level 3 portfolio investments for the six-month periods ended June 30, 2022 and 2021 (amounts in thousands):
Net | ||||||||||||||||||||||||
Fair Value | Transfers | Changes | Net | Fair Value | ||||||||||||||||||||
as of | Into | from | Unrealized | as of | ||||||||||||||||||||
Type of |
| December 31, |
| Level 3 |
| Redemptions/ |
| New |
| Unrealized |
| Appreciation |
| June 30, | ||||||||||
Investment |
| 2021 |
| Hierarchy |
| Repayments |
| Investments |
| to Realized |
| (Depreciation) |
| Other(1) |
| 2022 | ||||||||
Debt | $ | 879,970 | $ | — | $ | (82,934) | $ | 115,610 | $ | (699) | $ | (28,098) | $ | (333) | $ | 883,516 | ||||||||
Equity | 196,374 | — | (1,217) | 4,099 | (820) | 23,018 | 333 | 221,787 | ||||||||||||||||
Equity Warrant | 792 | — | — | — | — | (418) | — | 374 | ||||||||||||||||
$ | 1,077,136 | $ | — | $ | (84,151) | $ | 119,709 | $ | (1,519) | $ | (5,498) | $ | — | $ | 1,105,677 | |||||||||
| (1) | Includes the impact of non-cash conversions. These transactions represent non-cash investing activities. See additional cash flow information in the Consolidated Statements of Cash Flows. |
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|
|
|
|
| Net |
|
|
| ||||||||||||||||
Fair Value | Transfers | Changes | Net | Fair Value | ||||||||||||||||||||
as of | Into | from | Unrealized | as of | ||||||||||||||||||||
Type of | December 31, | Level 3 | Redemptions/ | New | Unrealized | Appreciation | June 30, | |||||||||||||||||
Investment | 2020 | Hierarchy | Repayments | Investments |
| to Realized | (Depreciation) | Other(1) | 2021 | |||||||||||||||
Debt | $ | 638,423 | $ | — | $ | (95,438) | $ | 237,146 | $ | 1,070 | $ | 4,183 | $ | (976) | $ | 784,408 | ||||||||
Equity(2) |
| 185,041 |
| — | (12,997) | 4,750 | 993 | 6,750 | 976 | 185,513 | ||||||||||||||
Equity Warrant |
| 2,058 |
| — | — | — | — | 24 | — | 2,082 | ||||||||||||||
$ | 825,522 | $ | — | $ | (108,435) | $ | 241,896 | $ | 2,063 | $ | 10,957 | $ | — | $ | 972,003 | |||||||||
| (1) | Includes the impact of non-cash conversions. These transactions represent non-cash investing activities. See additional cash flow information at the Consolidated Statements of Cash Flows. |
| (2) | Includes the Company’s investment in CLO subordinated notes. (See Note D — Investment in Signal Peak CLO 7, Ltd.). |
At June 30, 2022 and December 31, 2021, the Company's investments at fair value were categorized as follows in the fair value hierarchy for ASC 820 purposes:
Fair Value Measurements | ||||||||||||
(in thousands) | ||||||||||||
|
| Quoted Prices in |
|
| Significant | |||||||
| Active Markets for |
| Significant Other |
| Unobservable | |||||||
| Identical Assets |
| Observable Inputs |
| Inputs | |||||||
At June 30, 2022 | Fair Value |
| (Level 1) | (Level 2) |
| (Level 3) | ||||||
Private Loan portfolio investments | $ | 611,151 | $ | — | $ | — | $ | 611,151 | ||||
LMM portfolio investments | 324,303 | — | — | 324,303 | ||||||||
Middle Market portfolio investments |
| 141,561 |
| — |
| — |
| 141,561 | ||||
Other Portfolio investments |
| 28,662 |
| — |
| — |
| 28,662 | ||||
Total investments | $ | 1,105,677 | $ | — | $ | — | $ | 1,105,677 | ||||
| Fair Value Measurements | |||||||||||
(in thousands) | ||||||||||||
Quoted Prices in | Significant | |||||||||||
| Active Markets for |
| Significant Other | Unobservable | ||||||||
| Identical Assets |
| Observable Inputs |
| Inputs | |||||||
At December 31, 2021 | Fair Value |
| (Level 1) |
| (Level 2) |
| (Level 3) | |||||
Private Loan portfolio investments | $ | 575,865 | $ | — | $ | — | $ | 575,865 | ||||
LMM portfolio investments | 315,415 | — | — | 315,415 | ||||||||
Middle Market portfolio investments |
| 159,021 |
| — |
| — |
| 159,021 | ||||
Other Portfolio investments |
| 26,835 |
| — |
| — |
| 26,835 | ||||
Total investments | $ | 1,077,136 | $ | — | $ | — | $ | 1,077,136 | ||||
Investment Portfolio Composition
The Company’s principal investment objective is to maximize its portfolio’s total return by generating current income from its debt investments and current income and capital appreciation from its equity and equity-related investments, including warrants, convertible securities and other rights to acquire equity securities in a portfolio company. The Company seeks to achieve its investment objective through its Private Loan, LMM and Middle Market investment strategies.
The Company’s private loan (“Private Loan”) investment strategy involves investments in privately held companies that are generally consistent with the size of its Middle Market portfolio companies or LMM portfolio companies, and its Private Loan investments generally range in size from $1 million to $20 million. The Company’s Private Loan investments generally consist of loans that have been originated directly by Main Street or through strategic relationships with other investment funds on a collaborative basis, and are often referred to in the debt markets as “club deals.” The Company’s Private Loan portfolio debt investments are generally secured by a first priority lien on the assets
48
of the portfolio company and typically have a term of between three and seven years from the original investment date. The Company may also invest alongside the sponsor in the equity securities of its Private Loan portfolio companies.
The Company’s LMM investment strategy involves investments in secured debt, equity warrants and direct equity investments in privately held, LMM companies based in the United States. The Company’s LMM portfolio companies generally have annual revenues between $10 million and $150 million, and its LMM investments generally range in size from $1 million to $20 million. The LMM debt investments are typically secured by a first priority lien on the assets of the portfolio company, can include either fixed or floating rate terms and generally have a term of between five and seven years from the original investment date. In most LMM portfolio investments, the Company receives nominally priced equity warrants and/or makes direct equity investments in connection with a debt investment.
The Company’s Middle Market investment strategy involves investments in syndicated loans to or debt securities in Middle Market companies, which the Company defines as companies with annual revenues between $150 million and $1.5 billion, and its Middle Market investments generally range in size from $1 million to $20 million. The Company’s Middle Market portfolio debt investments are generally secured by a first priority lien on the assets of the portfolio company and typically have an expected duration of between three and seven years from the original investment date.
The Company’s other portfolio (“Other Portfolio”) investments primarily consist of investments that are not consistent with the typical profiles for its Private Loan, LMM or Middle Market portfolio investments, including investments which may be managed by third parties. In the Other Portfolio, the Company may incur indirect fees and expenses in connection with investments managed by third parties, such as investments in other investment companies or private funds. For Other Portfolio investments, the Company generally receives distributions related to the assets held by the portfolio company. Those assets are typically expected to be liquidated over a five to ten-year period.
Investment income, consisting of interest, dividends and fees, can fluctuate dramatically due to various factors, including the level of new investment activity, repayments of debt investments or sales of equity interests. Investment income in any given year could also be highly concentrated among several portfolio companies. For the three and six months ended June 30, 2022 and 2021, the Company did not record investment income from any single portfolio company in excess of 10% of total investment income.
The following tables provide a summary of the Company’s investments in the Private Loan, LMM and Middle Market portfolios as of June 30, 2022 and December 31, 2021 (this information excludes the Other Portfolio investments, which are discussed further below):
| As of June 30, 2022 |
| ||||||||
Private Loan | LMM (a) | Middle Market |
| |||||||
(dollars in millions) |
| |||||||||
Number of portfolio companies | 67 |
| 45 |
| 23 | |||||
Fair value | $ | 611.2 |
| $ | 324.3 |
| $ | 141.6 | ||
Cost | $ | 620.9 |
| $ | 286.4 |
| $ | 169.4 | ||
Debt investments as a % of portfolio (at cost) | 94.4 | % | 72.0 | % | 93.1 | % | ||||
Equity investments as a % of portfolio (at cost) | 5.6 | % | 28.0 | % | 6.9 | % | ||||
% of debt investments at cost secured by first priority lien | 99.9 | % | 99.9 | % | 98.6 | % | ||||
Weighted-average annual effective yield (b) | 8.6 | % | 11.2 | % | 8.2 | % | ||||
Average EBITDA(c) | $ | 39.5 |
| $ | 8.6 |
| $ | 74.3 | ||
| (a) | At June 30, 2022, the Company had equity ownership in all of its LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was 9%. |
| (b) | The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of June 30, 2022, including amortization of deferred debt origination fees and accretion of original issue discount but excluding fees payable upon repayment of the debt instruments and any debt investments on non-accrual status. The weighted-average annual effective yield on the Company’s debt portfolio as of June 30, 2022 including debt investments on non-accrual status was 8.4% for its Private Loan portfolio, 10.8% for its LMM portfolio and 7.5% for its Middle Market portfolio. The weighted-average annual effective yield is not reflective of what an investor in shares of the Company’s common stock will realize on its investment because it |
49
| does not reflect the Company’s utilization of debt capital in its capital structure, the Company’s expenses or any sales load paid by an investor. |
| (c) | The average EBITDA is calculated using a weighted-average for the Private Loan and Middle Market portfolios and a simple average for the LMM portfolio. These calculations exclude certain portfolio companies, including two Private Loan portfolio companies, as EBITDA is not a meaningful valuation metric for the Company’s investments in these portfolio companies, and those portfolio companies whose primary purpose is to own real estate. |
| As of December 31, 2021 |
| ||||||||
Private Loan |
| LMM (a) | Middle Market | |||||||
(dollars in millions) | ||||||||||
Number of portfolio companies | 57 | 43 |
| 25 |
| |||||
Fair value | $ | 575.9 | $ | 315.4 |
| $ | 159.0 |
| ||
Cost | $ | 576.3 | $ | 281.0 |
| $ | 184.2 |
| ||
Debt investments as a % of portfolio (at cost) | 94.0 | % | 72.2 | % | 93.7 | % | ||||
Equity investments as a % of portfolio (at cost) | 6.0 | % | 27.8 | % | 6.3 | % | ||||
% of debt investments at cost secured by first priority lien | 98.5 | % | 99.8 | % | 98.8 | % | ||||
Weighted-average annual effective yield (b) | 8.4 | % | 10.8 | % | 7.6 | % | ||||
Average EBITDA (c) | $ | 38.0 | $ | 7.3 |
| $ | 85.9 |
| ||
| (a) | At December 31, 2021, the Company had equity ownership in all of its LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was 9%. |
| (b) | The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of December 31, 2021, including amortization of deferred debt origination fees and accretion of original issue discount but excluding fees payable upon repayment of the debt instruments and any debt investments on non-accrual status. The weighted-average annual effective yield on the Company’s debt portfolio as of December 31, 2021 including debt investments on non-accrual status was 8.3% for its Private Loan portfolio, 10.5% for its LMM portfolio and 7.1% for its Middle Market portfolio. The weighted-average annual effective yield is not reflective of what an investor in shares of the Company’s common stock will realize on its investment because it does not reflect the Company’s utilization of debt capital in its capital structure, the Company’s expenses or any sales load paid by an investor. |
| (c) | The average EBITDA is calculated using a weighted-average for the Private Loan and Middle Market portfolios and a simple average for the LMM portfolio. These calculations exclude certain portfolio companies, including two Private Loan portfolio companies and one Middle Market portfolio company, as EBITDA is not a meaningful valuation metric for the Company’s investments in these portfolio companies, and those portfolio companies whose primary purpose is to own real estate. |
For the three months ended June 30, 2022 and 2021, the Company achieved an annualized total return on investments of 5.2% and 15.0%, respectively. For the six months ended June 30, 2022 and 2021, the Company achieved an annualized total return on investments of 7.7% and 12.5%, respectively. For the year ended December 31, 2021, the Company achieved an annualized total return on investments of 17.9%. Total return on investments is calculated using the interest, dividend and fee income, as well as the realized and unrealized change in fair value of the Investment Portfolio for the specified period. The Company’s total return on investments is not reflective of what an investor in shares of the Company’s common stock will realize on its investment because it does not reflect the Company’s utilization of debt capital in its capital structure, the Company’s expenses or any sales load paid by an investor.
As of June 30, 2022, the Company had Other Portfolio investments in four companies, collectively totaling $28.7 million in fair value and $26.0 million in cost basis and which comprised 2.6% and 2.4% of the Company’s Investment Portfolio at fair value and cost, respectively. As of December 31, 2021, the Company had Other Portfolio investments in four companies, collectively totaling $26.8 million in fair value and $25.6 million in cost basis and which comprised 2.5% and 2.4% of the Company’s Investment Portfolio at fair value and cost, respectively.
The following tables summarize the composition of the Company’s total combined Private Loan portfolio investments, LMM portfolio investments and Middle Market portfolio investments at cost and fair value by type of investment as a percentage of the total combined Private Loan portfolio investments, LMM portfolio investments and
50
Middle Market portfolio investments, as of June 30, 2022 and December 31, 2021 (this information excludes the Other Portfolio investments, which are discussed above).
Cost: |
| June 30, 2022 |
| December 31, 2021 | |
First lien debt |
| 88.0 | % | 87.2 | % |
Equity |
| 11.6 | % | 11.7 | % |
Second lien debt |
| — | % | 0.7 | % |
Equity warrants |
| 0.1 | % | 0.1 | % |
Other |
| 0.3 | % | 0.3 | % |
| 100.0 | % | 100.0 | % |
Fair Value: |
| June 30, 2022 |
| December 31, 2021 | |
First lien debt |
| 81.8 | % | 82.8 | % |
Equity |
| 17.9 | % | 16.1 | % |
Second lien debt |
| — | % | 0.7 | % |
Equity warrants |
| — | % | 0.1 | % |
Other |
| 0.3 | % | 0.3 | % |
| 100.0 | % | 100.0 | % |
The following tables summarize the composition of the Company’s total combined Private Loan portfolio investments, LMM portfolio investments and Middle Market portfolio investments by geographic region of the United States and other countries at cost and fair value as a percentage of the total combined Private Loan portfolio investments, LMM portfolio investments and Middle Market portfolio investments, as of June 30, 2022 and December 31, 2021 (this information excludes the Other Portfolio investments). The geographic composition is determined by the location of the corporate headquarters of the portfolio company.
|
|
| ||||
Cost: |
| June 30, 2022 |
| December 31, 2021 | ||
Northeast |
| 23.1 | % | 21.4 | % |
|
Southwest |
| 22.7 | % | 24.8 | % |
|
West |
| 20.9 | % | 22.3 | % |
|
Southeast |
| 18.0 | % | 16.6 | % |
|
Midwest |
| 14.1 | % | 14.0 | % |
|
Canada |
| 0.8 | % | 0.9 | % |
|
Other Non-United States |
| 0.4 | % | — | % |
|
| 100.0 | % | 100.0 | % |
|
Fair Value: |
| June 30, 2022 |
| December 31, 2021 | |
Southwest |
| 25.2 | % | 27.1 | % |
Northeast |
| 23.4 | % | 21.4 | % |
West |
| 19.7 | % | 21.4 | % |
Southeast |
| 15.7 | % | 14.4 | % |
Midwest |
| 14.8 | % | 14.8 | % |
Canada |
| 0.8 | % | 0.9 | % |
Other Non-United States |
| 0.4 | % | — | % |
| 100.0 | % | 100.0 | % |
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The Company’s Private Loan portfolio investments, LMM portfolio investments and Middle Market portfolio investments are in companies conducting business in a variety of industries. The following tables summarize the composition of the Company’s total combined Private Loan portfolio investments, LMM portfolio investments and Middle Market portfolio investments by industry at cost and fair value as of June 30, 2022 and December 31, 2021 (this information excludes the Other Portfolio investments).
Cost: | June 30, 2022 | December 31, 2021 | ||||
Commercial Services & Supplies |
| 11.6 | % | 11.1 | % | |
Machinery |
| 7.9 | % | 7.9 | % | |
Internet Software & Services |
| 7.1 | % | 6.1 | % | |
Diversified Consumer Services |
| 5.0 | % | 4.4 | % | |
Distributors |
| 4.5 | % | 4.5 | % | |
IT Services |
| 4.5 | % | 4.3 | % | |
Health Care Providers & Services |
| 4.3 | % | 3.5 | % | |
Oil, Gas & Consumable Fuels |
| 3.8 | % | 4.2 | % | |
Specialty Retail |
| 3.7 | % | 3.8 | % | |
Construction & Engineering |
| 3.6 | % | 3.8 | % | |
Professional Services |
| 3.5 | % | 3.7 | % | |
Aerospace & Defense |
| 3.5 | % | 2.8 | % | |
Communications Equipment |
| 3.4 | % | 3.7 | % | |
Leisure Equipment & Products |
| 2.9 | % | 3.0 | % | |
Diversified Telecommunication Services |
| 2.8 | % | 4.5 | % | |
Containers & Packaging |
| 2.5 | % | 2.6 | % | |
Building Products |
| 2.3 | % | 2.3 | % | |
Media |
| 2.2 | % | 2.0 | % | |
Diversified Financial Services |
| 2.2 | % | 2.3 | % | |
Textiles, Apparel & Luxury Goods |
| 1.9 | % | 2.0 | % | |
Hotels, Restaurants & Leisure |
| 1.9 | % | 2.1 | % | |
Internet & Catalog Retail |
| 1.5 | % | 1.6 | % | |
Household Products |
| 1.5 | % | 1.2 | % | |
Energy Equipment & Services |
| 1.4 | % | 1.4 | % | |
Health Care Equipment & Supplies |
| 1.2 | % | 0.8 | % | |
Electrical Equipment |
| 1.2 | % | 0.9 | % | |
Food Products | 1.1 | % | 1.2 | % | ||
Food & Staples Retailing | 1.1 | % | 1.1 | % | ||
Software | 1.0 | % | 1.0 | % | ||
Trading Companies & Distributors | — | % | 1.1 | % | ||
Other (1) | 4.9 | % | 5.1 | % | ||
| 100.0 | % | 100.0 | % |
| (1) | Includes various industries with each industry individually less than 1.0% of the total combined Private Loan portfolio investments, LMM portfolio investments and Middle Market portfolio investments at each date. |
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Fair Value: | June 30, 2022 | December 31, 2021 | ||||
Commercial Services & Supplies |
| 11.1 | % | 10.6 | % | |
Machinery |
| 9.4 | % | 9.3 | % | |
Internet Software & Services |
| 6.3 | % | 5.5 | % | |
Diversified Consumer Services |
| 5.8 | % | 5.3 | % | |
Distributors |
| 4.9 | % | 4.6 | % | |
IT Services |
| 4.3 | % | 4.2 | % | |
Health Care Providers & Services |
| 4.1 | % | 3.5 | % | |
Construction & Engineering |
| 3.9 | % | 4.2 | % | |
Oil, Gas & Consumable Fuels |
| 3.6 | % | 3.7 | % | |
Specialty Retail |
| 3.5 | % | 3.8 | % | |
Aerospace & Defense |
| 3.4 | % | 2.7 | % | |
Leisure Equipment & Products |
| 2.9 | % | 3.1 | % | |
Containers & Packaging |
| 2.8 | % | 2.9 | % | |
Professional Services |
| 2.7 | % | 2.9 | % | |
Diversified Telecommunication Services |
| 2.7 | % | 4.5 | % | |
Media |
| 2.4 | % | 2.1 | % | |
Building Products |
| 2.3 | % | 2.4 | % | |
Diversified Financial Services |
| 2.2 | % | 2.4 | % | |
Internet & Catalog Retail |
| 2.0 | % | 1.7 | % | |
Textiles, Apparel & Luxury Goods |
| 1.9 | % | 1.9 |