Corporate Capital Trust, Inc. - FORM 10-Q

Corporate Capital Trust, Inc. - FORM 10-Q - August 13, 2015

Attached files

Attached files

Corporate Capital Trust, Inc. Reports

file	filename
EX-31.2 - CERTIFICATION - Corporate Capital Trust, Inc.	d15349dex312.htm
EX-31.1 - CERTIFICATION - Corporate Capital Trust, Inc.	d15349dex311.htm
EX-32.1 - CERTIFICATION - Corporate Capital Trust, Inc.	d15349dex321.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2015

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

Commission file number: 814-00827

CORPORATE CAPITAL TRUST, INC.

(Exact name of registrant as specified in its charter)

Maryland

27-2857503

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

CNL Center at City Commons

450 South Orange Avenue

Orlando, Florida

32801

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code (866) 745-3797

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

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

The number of shares of common stock of the registrant outstanding as of August 11, 2015 was 263,239,499.

CORPORATE CAPITAL TRUST, INC.

INDEX


		PAGE

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements:

	Condensed Consolidated Statements of Assets and Liabilities as of June 30, 2015 (unaudited) and December 31, 2014		2

	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2015 and 2014 (unaudited)		3

	Condensed Consolidated Statements of Changes in Net Assets for the three and six months ended June 30, 2015 and 2014 (unaudited)		4

	Condensed Consolidated Statements of Cash Flows for the three and six months ended June 30, 2015 and 2014 (unaudited)		5

	Condensed Consolidated Schedules of Investments as of June 30, 2015 (unaudited) and December 31, 2014		6

	Notes to Condensed Consolidated Financial Statements (unaudited)		24

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		54

Item 3.	Quantitative and Qualitative Disclosures about Market Risk		74

Item 4.	Controls and Procedures		77

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings		77

Item 1A.	Risk Factors		77

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		78

Item 3.	Defaults Upon Senior Securities		78

Item 4.	Mine Safety Disclosures		78

Item 5.	Other Information		78

Item 6.	Exhibits		78

Signatures			79

Exhibit Index			80

Corporate Capital Trust, Inc. and Subsidiaries

Condensed Consolidated Statements of Assets and Liabilities

(in thousands, except share and per share amounts)


	June 30, 2015			December 31, 2014
	(unaudited)
Assets
Investment at fair value:
Non-controlled, non-affiliated investments (amortized cost of $3,004,861 and $2,569,096, respectively) - including $309,410 and $258,344, respectively, of investments pledged to creditors (Note 10)	$	2,936,034		$	2,512,428
Non-controlled, affiliated investments (amortized cost of $259,928 and $213,925, respectively)		231,119			203,272
Controlled, affiliated investments (amortized cost of $109,100 and $5,500, respectively)		110,775			5,500

Total investments, at fair value (amortized cost of $3,373,889 and $2,788,521, respectively)		3,277,928			2,721,200
Cash		83,182			46,388
Cash denominated in foreign currency (cost of $45,662 and $618, respectively)		45,650			589
Collateral on deposit with custodian		162,640			115,700
Dividends and interest receivable		43,773			32,523
Receivable for investments sold		6,377			—
Principal receivable		2,403			1,420
Unrealized appreciation on derivative instruments		46,450			40,903
Receivable from advisors		1,124			—
Deferred offering expense		1,673			2,612
Prepaid and other deferred expenses		9,720			10,385

Total assets		3,680,920			2,971,720

Liabilities
Revolving credit facilities		630,000			377,450
Term loan payable, net of discount		393,417			395,228
Payable for investments purchased		163,135			34,888
Shareholders’ distributions payable		19,534			—
Accrued investment advisory fees		5,810			4,964
Unrealized depreciation on derivative instruments		2,859			3,903
Accrued directors’ fees		95			57
Accrued performance-based incentive fees		—			5,108
Other accrued expenses and liabilities		3,716			4,301

Total liabilities		1,218,566			825,899
Commitments and contingencies ($230,577 as of June 30, 2015, Note 11)

Net Assets	$	2,462,354		$	2,145,821

Components of Net Assets
Common stock, $0.001 par value per share, 1,000,000,000 shares authorized, 254,563,581 and 219,131,729 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively	$	255		$	219
Paid-in capital in excess of par value		2,517,418			2,166,554
Undistributed (distributions in excess of) net investment income		(3,270	)		9,099
Accumulated net realized gains		335			335
Accumulated net unrealized depreciation on investments, derivative instruments and foreign currency translation		(52,384	)		(30,386	)

Net assets	$	2,462,354		$	2,145,821

Net asset value per share	$	9.67		$	9.79

See notes to condensed consolidated financial statements.

Corporate Capital Trust, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations (unaudited)

(in thousands, except share and per share amounts)


	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Investment income
Interest income:
Non-controlled, non-affiliated investments (net of tax withholding, $73, $-, $163 and $-, respectively)	$	59,817		$	37,115		$	116,470		$	79,693
Non-controlled, affiliated investments		749			—			1,489			—

Total interest income		60,566			37,115			117,959			79,693

Payment-in-kind interest income:
Non-controlled, non-affiliated investments		5,204			6,568			8,511			13,643
Non-controlled, affiliated investments		3,959			4,006			7,460			4,006

Total payment-in-kind interest income		9,163			10,574			15,971			17,649

Fee income:
Non-controlled, non-affiliated investments		1,883			1,086			11,484			1,362

Total fee income		1,883			1,086			11,484			1,362

Dividend and other income:
Non-controlled, non-affiliated investments		147			6			188			10
Non-controlled, affiliated investments		407			577			518			577

Total dividend and other income		554			583			706			587

Total investment income		72,166			49,358			146,120			99,291

Operating expenses
Investment advisory fees		17,002			11,264			32,137			21,945
Interest expense		8,276			5,730			16,074			10,211
Performance-based incentive fees		—			1,817			7,983			11,603
Offering expenses		1,198			1,799			2,641			3,674
Administrative services		600			708			1,314			1,392
Professional services		829			531			1,367			1,050
Custodian and accounting fees		311			182			581			378
Director fees and expenses		194			124			320			291
Other		977			670			1,712			1,503

Total operating expenses		29,387			22,825			64,129			52,047

Net investment income before taxes		42,779			26,533			81,991			47,244
Income tax expense		19			—			41			—

Net investment income		42,760			26,533			81,950			47,244

Net realized and unrealized gains (losses)
Net realized gains (losses) on:
Non-controlled, non-affiliated investments		(21,367	)		2,133			(27,689	)		14,331
Derivative instruments		3,185			(587	)		29,573			(778	)
Foreign currency transactions		716			(1,324	)		(628	)		(2,346	)

Net realized gains (losses)		(17,466	)		222			1,256			11,207

Net change in unrealized appreciation (depreciation) on:
Non-controlled, non-affiliated investments		22,597			6,264			(12,159	)		15,362
Non-controlled, affiliated investments		(2,202	)		3,301			(18,156	)		8,785
Controlled, affiliated investments		1,575			—			1,675			—
Derivative instruments		(17,994	)		(3,128	)		6,591			(3,301	)
Foreign currency translation		154			3,164			51			1,551

Net change in unrealized appreciation (depreciation)		4,130			9,601			(21,998	)		22,397

Net realized and unrealized gains (losses)		(13,336	)		9,823			(20,742	)		33,604

Net increase in net assets resulting from operations	$	29,424		$	36,356		$	61,208		$	80,848

Net investment income per share	$	0.17		$	0.16		$	0.35		$	0.30

Diluted and basic earnings per share	$	0.12		$	0.22		$	0.26		$	0.51

Weighted average number of shares of common stock outstanding (basic and diluted)		246,999,983			165,959,193			237,366,041			157,531,139

Distributions declared per share	$	0.20		$	0.20		$	0.40		$	0.38

See notes to condensed consolidated financial statements.

Corporate Capital Trust, Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Net Assets (unaudited)

(in thousands, except share amounts)


	Six Months Ended June 30,
	2015			2014
Operations
Net investment income	$	81,950		$	47,244
Net realized gains on investments, derivative instruments and foreign currency transactions		1,256			11,207
Net change in unrealized appreciation (depreciation) on investments, derivative instruments and foreign currency translation		(21,998	)		22,397

Net increase in net assets resulting from operations		61,208			80,848

Distributions to shareholders from
Net investment income		(81,950	)		(47,244	)
Net realized gains		(1,256	)		(11,207	)
Distributions in excess of net investment income (Note 8)		(12,369	)		(1,482	)

Net decrease in net assets resulting from shareholders’ distributions		(95,575	)		(59,933	)

Capital share transactions
Issuance of shares of common stock		322,139			306,156
Reinvestment of shareholders’ distributions		39,102			38,289
Repurchase of shares of common stock		(10,341	)		(6,349	)

Net increase in net assets resulting from capital share transactions		350,900			338,096

Total increase in net assets		316,533			359,011
Net assets at beginning of period		2,145,821			1,430,434

Net assets at end of period	$	2,462,354		$	1,789,445

Capital share activity
Shares issued from subscriptions		32,539,230			30,103,786
Shares issued from reinvestment of distributions		3,949,739			3,764,891
Shares repurchased		(1,057,117	)		(631,233	)

Net increase in shares outstanding		35,431,852			33,237,444

Distributions in excess of net investment income at end of period	$	(3,270	)	$	(7,378	)

See notes to condensed consolidated financial statements.

Corporate Capital Trust, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (unaudited)

(in thousands)


	Six Months Ended June 30,
	2015			2014
Operating Activities:
Net increase in net assets resulting from operations	$	61,208		$	80,848
Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:
Purchases of investments		(990,813	)		(811,400	)
Increase (decrease) in payable for investments purchased		128,247			(17,863	)
Payment-in-kind interest capitalized		(14,601	)		(15,497	)
Proceeds from sales of investments		188,774			394,557
Proceeds from principal payments		239,091			249,471
Net realized losses (gains) on investments		27,689			(14,331	)
Net change in unrealized (appreciation) depreciation on investments		28,640			(24,147	)
Net change in unrealized (appreciation) depreciation on derivative instruments		(6,591	)		3,301
Net change in unrealized appreciation on foreign currency translation		(51	)		(1,551	)
Amortization of premium/discount, net		(4,215	)		(3,051	)
Amortization of deferred financing costs		1,573			1,250
Accretion of discount on term loan payable		189			38
(Increase) decrease in short-term investments, net		(31,293	)		128,475
Increase in collateral on deposit with custodian		(46,940	)		(22,049	)
Increase in dividends and interest receivable		(11,216	)		(3,228	)
(Increase) decrease in receivable for investments sold		(6,377	)		46,453
Increase in principal receivable		(983	)		(13	)
Increase in receivable from advisors		(1,124	)		—
Decrease in other assets		493			19
Increase (decrease) in accrued investment advisory fees		846			(3	)
Decrease in accrued performance-based incentive fees		(5,108	)		(1,167	)
Decrease in other accrued expenses and liabilities		(547	)		(1,411	)

Net cash used in operating activities		(443,109	)		(11,299	)

Proceeds from issuance of shares of common stock		322,139			306,156
Payments on repurchases of shares of common stock		(10,341	)		(6,349	)
Distributions paid		(36,939	)		(36,567	)
Repayments under term loan payable		(2,000	)		(1,000	)
Borrowings under revolving credit facilities		517,000			539,000
Repayments of revolving credit facilities		(264,450	)		(746,330	)
Deferred financing costs paid		(462	)		(6,929	)

Net cash provided by financing activities		524,947			47,981

Effect of exchange rate changes on cash		17			—

Net increase in cash		81,855			36,682
Cash and cash denominated in foreign currency, beginning of period		46,977			86,205

Cash and cash denominated in foreign currency, end of period	$	128,832		$	122,887

Supplemental disclosure of cash flow information and non-cash financing activities:
Cash paid for interest	$	14,140		$	9,640

Excise taxes paid	$	1,302		$	—

Distributions reinvested	$	39,102		$	38,289

Distributions payable	$	19,534		$	—

See notes to condensed consolidated financial statements.

Corporate Capital Trust, Inc. and Subsidiaries

Condensed Consolidated Schedule of Investments (unaudited)

As of June 30, 2015

(in thousands, except share amounts)


Company^(a)(b)	Footnotes	Industry	Interest Rate		Base Rate Floor			Maturity Date		No. Shares/ Principal Amount^(c)		Cost^(d)		Fair Value
Senior Secured Loans—First Lien—55.9%
ABILITY Network, Inc.	^(e)	Health Care Equipment & Services		L + 500		1.00	%		5/14/2021	$	20,063	$	19,870	$	20,147
Algeco/Scotsman (LU)	^{(g)(h)(i)(m)(n)(p)}	Consumer Durables & Apparel		15.75% PIK					5/1/2018		33,302		32,641		19,825
AltEn, LLC	^(h)(j)(k)	Energy		L + 900		1.00	%		9/12/2018		29,610		27,123		25,028
American Freight, Inc.	^(e)(h)	Retailing		L + 625		1.00	%		10/31/2020		32,526		32,379		32,748
Amtek Global Technology Pte. Ltd. (SG)	^{(g)(h)(i)(l)(EUR)}	Automobiles & Components		E + 800		1.00	%		11/10/2019	€	71,577		85,359		77,630
Applied Systems, Inc.	^(e)(m)	Software & Services		L + 325		1.00	%		1/25/2021	$	651		647		651
BeyondTrust Software, Inc.	^(e)(h)	Software & Services		L + 700		1.00	%		9/25/2019		12,948		12,821		12,858
BRG Sports, Inc.	^(j)	Consumer Durables & Apparel		L + 550		1.00	%		4/15/2021		4,006		3,936		4,026
Caesars Entertainment Operating Co., Inc.	^(e)(i)(m)(n)	Consumer Services		L + 725					3/1/2017		10,800		10,163		9,708
California Pizza Kitchen, Inc.	^(e)(m)	Food & Staples Retailing		L + 425		1.00	%		3/29/2018		18,338		17,671		18,150
Charlotte Russe, Inc.	^(e)	Retailing		L + 550		1.25	%		5/22/2019		4,478		4,455		4,287
	^(e)			L + 550		1.25	%		5/22/2019		18,291		18,138		17,514
CityCenter Holdings, LLC	^(e)(m)	Real Estate		L + 325		1.00	%		10/16/2020		5,919		5,870		5,936
Coyote Logistics, LLC	^(j)(o)	Transportation		L + 525		1.00	%		3/26/2022		7,432		7,449		7,497
David’s Bridal, Inc.	^(e)(m)	Retailing		L + 375		1.25	%		10/11/2019		8,368		8,148		8,044
Distribution International, Inc.	^(e)(m)	Retailing		L + 500		1.00	%		12/10/2021		6,392		6,331		6,423
Emerald Performance Materials, LLC	^(j)(m)	Materials		L + 350		1.00	%		7/30/2021		650		647		651
Exemplis Corp.	^(e)(h)	Commercial & Professional Services		L + 650		1.00	%		3/23/2022		67,777		67,122		68,172
Football Association of Ireland (IE)	^{(g)(h)(i)(EUR)}	Consumer Durables & Apparel		6.40%					12/20/2020	€	43,615		58,493		49,332
Greenway Medical Technologies	^(e)	Health Care Equipment & Services		L + 500		1.00	%		11/4/2020	$	1,754		1,747		1,761
Greystone & Co., Inc.	^(e)(h)	Diversified Financials		L + 800		1.00	%		3/26/2021		33,749		33,239		33,312
Grocery Outlet, Inc.	^(e)(m)	Food & Staples Retailing		L + 375		1.00	%		10/21/2021		2,968		2,977		2,974
Gymboree Corp.	^(e)	Retailing		L + 350		1.50	%		2/23/2018		11,892		10,958		8,532
Hanson Building Products North America	^(e)(i)(o)	Materials		L + 550		1.00	%		3/13/2022		21,308		21,090		21,368
Harbor Freight Tools USA, Inc.	^(e)(m)	Capital Goods		L + 375		1.00	%		7/26/2019		2,931		2,937		2,948
Hillman Group, Inc.	^(e)(m)	Consumer Durables & Apparel		L + 350		1.00	%		6/30/2021		833		835		836
iPayment, Inc.	^(e)(m)	Software & Services		L + 525		1.50	%		5/8/2017		36,163		35,951		36,027
Jacuzzi Brands, Inc. (LU)	^(e)(g)(h)	Capital Goods		L + 650		1.25	%		7/3/2019		20,118		19,823		20,118
Jacuzzi Brands, Inc.	^(e)(g)(h)	Capital Goods		L + 650		1.25	%		7/3/2019		19,234		18,952		19,234
KeyPoint Government Solutions, Inc.	^(e)(h)	Capital Goods		L + 650		1.25	%		11/13/2017		34,374		34,007		34,718
Keystone Australia Holdings, Pty. Ltd. (AU)	^{(g)(h)(i)(AUD)}	Consumer Services		15.00%					8/7/2019	A$	31,021		28,207		22,260
Koosharem, LLC	^(e)(m)	Commercial & Professional Services		L + 650		1.00	%		5/15/2020	$	42,861		42,457		42,660
Kurt Geiger Ltd. (UK)	^{(g)(h)(i)(p)(GBP)}	Consumer Durables & Apparel		10.00%, 1.00% PIK					4/8/2019	£	47,099		77,534		74,933

See notes to condensed consolidated financial statements.

Corporate Capital Trust, Inc. and Subsidiaries

Condensed Consolidated Schedule of Investments (unaudited) (continued)

As of June 30, 2015

(in thousands, except share amounts)


Company^(a)(b)	Footnotes	Industry	Interest Rate		Base Rate Floor			Maturity Date		No. Shares/ Principal Amount^(c)			Cost^(d)			Fair Value
Marshall Retail Group, LLC	^(e)(h)	Retailing		L + 600		1.00	%		8/25/2020	$	16,720	$		16,561	$		15,765
MCS AMS Sub-Holdings, LLC	^(e)	Commercial & Professional Services		L + 600		1.00	%		10/15/2019		43,793			42,813			38,976
MSX International, Inc.	^(j)	Software & Services		L + 500		1.00	%		8/18/2020		8,646			8,260			8,711
Neiman Marcus Group, LLC	^(e)(m)	Retailing		L + 325		1.00	%		10/25/2020		4,951			4,882			4,929
New Enterprise Stone & Lime Co., Inc.	^(e)(h)	Capital Goods		L + 700		1.00	%		2/12/2019		56,298			56,297			56,627
Nine West Holdings, Inc.	^(e)(m)	Consumer Durables & Apparel		L + 375		1.00	%		10/8/2019		13,486			13,260			11,867
P & L Development, LLC	^(h)(j)(p)	Pharmaceuticals, Biotechnology & Life Sciences		L + 750, 1.00% PIK					5/1/2020		56,298			55,753			55,960
Pacific Union Financial, LLC	^(h)(j)	Diversified Financials		L + 800		1.00	%		5/31/2019		49,562			48,871			47,324
Paradigm Acquisition Corp.	^(e)	Health Care Equipment & Services		L + 500		1.00	%		6/2/2022		11,091			10,929			11,036
Petroplex Acidizing, Inc.	^(e)(h)	Energy		L + 725		1.00	%		12/4/2019		36,438			35,942			35,882
Proserv Acquisition, LLC	^(e)(i)	Energy		L + 538		1.00	%		12/22/2021		27,393			21,640			23,284
Proserv Acquisition, LLC (UK)	^(e)(g)(i)	Energy		L + 538		1.00	%		12/22/2021		16,078			12,702			13,666
Raley’s	^(e)	Food & Staples Retailing		L + 625		1.00	%		4/10/2022		29,966			28,928			29,909
RedPrairie Corp.	^(e)(m)	Software & Services		L + 500		1.00	%		12/21/2018		26,410			25,396			25,470
Riverbed Technology, Inc.	^(e)(m)	Technology Hardware & Equipment		L + 500		1.00	%		4/24/2022		7,710			7,673			7,800
Surgery Center Holdings, Inc.	^(e)(m)	Health Care Equipment & Services		L + 425		1.00	%		11/3/2020		14,760			14,693			14,788
Sutherland Global Services, Inc.	^(i)(j)(m)	Software & Services		L + 500		1.00	%		4/23/2021		12,668			12,378			12,758
Sutherland Global Services, Inc. (KY)	^(g)(i)(j)	Software & Services		L + 500		1.00	%		4/23/2021		2,949			2,883			2,970
TIBCO Software, Inc.	^(j)(m)(o)	Software & Services		L + 550		1.00	%		12/4/2020		53,877			52,150			53,945
Travelport, LLC (LU)	^(e)(g)(i)(m)	Software & Services		L + 475		1.00	%		9/2/2021		19,652			19,429			19,724
TTM Technologies, Inc.	^(e)(i)	Technology Hardware & Equipment		L + 500		1.00	%		5/31/2021		11,980			11,562			11,830
Tweddle Group, Inc.	^(e)(h)	Automobiles & Components		L + 675		1.00	%		4/7/2020		44,065			43,130			43,851
Waste Pro USA, Inc.	^(e)(h)	Transportation		L + 750		1.00	%		10/15/2020		36,498			36,498			36,876
Willbros Group, Inc.	^(h)(j)	Energy		L + 975		1.25	%		12/15/2019		53,235			53,235			49,081
Z Gallerie, Inc.	^(e)(h)	Retailing		L + 650		1.00	%		10/8/2020		33,170			32,825			33,502
Total Senior Secured Loans—First Lien												$		1,418,667	$		1,376,839

Senior Secured Loans—Second Lien—37.7%
American Casino & Entertainment Properties, LLC	^(e)	Consumer Services		L + 1000		1.25	%		1/3/2020	$	6,090	$		6,273	$		6,299
Angelica Corp.	^(e)(h)	Health Care Equipment & Services		L + 875		1.25	%		8/20/2019		50,869			50,868			45,300
Applied Systems, Inc.	^(e)(m)(o)	Software & Services		L + 650		1.00	%		1/24/2022		41,884			42,247			42,093
AssuredPartners, Inc.	^(e)	Insurance		L + 675		1.00	%		4/2/2022		4,015			4,034			3,970
Brake Bros Ltd. (UK)	^{(g)(i)(p)(v)(GBP)}	Food & Staples Retailing		L + 325, 3.00% PIK					3/12/2017	£	9,046			13,075			13,919
BRG Sports, Inc.	^(j)(o)	Consumer Durables & Apparel		L + 925		1.00	%		4/15/2022	$	29,993			29,654			30,443
CTI Foods Holding Co., LLC	^(e)	Food, Beverage & Tobacco		L + 725		1.00	%		6/28/2021		23,219			22,935			22,697

See notes to condensed consolidated financial statements.

Corporate Capital Trust, Inc. and Subsidiaries

Condensed Consolidated Schedule of Investments (unaudited) (continued)

As of June 30, 2015

(in thousands, except share amounts)


Company^(a)(b)	Footnotes	Industry	Interest Rate		Base Rate Floor			Maturity Date		No. Shares/ Principal Amount^(c)			Cost^(d)			Fair Value
Deltek, Inc.	^(e)(o)	Software & Services		L + 850		1.00	%		6/17/2023	$	62,369	$		61,746	$		62,837
Emerald Performance Materials, LLC	^(j)	Materials		L + 675		1.00	%		8/1/2022		2,041			2,031			2,035
Excelitas Technologies Corp.	^(e)(h)(p)	Technology Hardware & Equipment		L + 975, 1.50% PIK		1.00	%		4/29/2021		109,821			109,821			108,521
Genoa, a QoL Healthcare Co., LLC	^(e)	Health Care Equipment & Services		L + 775		1.00	%		4/28/2023		6,403			6,340			6,435
Greenway Medical Technologies	^(e)	Health Care Equipment & Services		L + 825		1.00	%		11/4/2021		23,057			22,755			22,712
Grocery Outlet, Inc.	^(e)	Food & Staples Retailing		L + 825		1.00	%		10/21/2022		49,688			48,215			49,564
Gruppo Argenta S.p.A. (LU)	^{(g)(h)(i)(p)(EUR)}	Retailing		12.00% PIK					1/31/2019	€	3,287			3,489			3,274
	^{(g)(h)(i)(p)(EUR)}			12.00% PIK					1/31/2019		24,142			27,198			24,048
Gypsum Management & Supply, Inc.	^(e)(o)	Capital Goods		L + 675		1.00	%		4/1/2022	$	22,186			21,708			21,382
iParadigms Holdings, LLC	^(e)	Software & Services		L + 725		1.00	%		7/29/2022		24,366			24,197			24,244
Learfield Communications, Inc.	^(e)(m)(o)	Media		L + 775		1.00	%		10/8/2021		31,404			31,672			31,718
Lightower Fiber, LLC	^(e)(o)	Telecommunication Services		L + 675		1.25	%		4/12/2021		33,539			33,430			33,483
Maxim Crane, LP	^(e)(m)	Capital Goods		L + 925		1.00	%		11/26/2018		970			990			976
Misys Ltd. (UK)	^(g)(i)(m)	Software & Services		12.00%					6/12/2019		3,000			3,290			3,275
NewWave Communications	^(e)	Media		L + 800		1.00	%		10/30/2020		13,712			13,675			13,507
P2 Energy Solutions, Inc.	^(e)(i)	Software & Services		L + 800		1.00	%		4/30/2021		74,312			72,272			69,357
	^(e)(i)			L + 800		1.00	%		4/30/2021		9,283			9,205			8,664
Polyconcept Finance B.V. (NL)	^(g)(h)(i)(j)	Consumer Durables & Apparel		L + 875		1.25	%		6/28/2020		46,727			46,727			46,621
Progressive Solutions	^(j)(m)	Health Care Equipment & Services		L + 850		1.00	%		10/22/2021		21,145			20,999			21,145
RedPrairie Corp.	^(e)(m)	Software & Services		L + 1000		1.25	%		12/21/2019		39,868			37,602			36,841
Safety Technology Holdings, Inc.	^(e)(h)	Technology Hardware & Equipment		L + 825		1.00	%		6/2/2020		30,402			29,785			30,691
SI Organization, Inc.	^(e)	Capital Goods		L + 800		1.00	%		5/23/2020		56,000			55,520			56,093
Talbots, Inc.	^(e)(o)	Retailing		L + 850		1.00	%		3/19/2021		10,190			10,043			10,024
The TelX Group, Inc.	^(e)(m)(o)	Telecommunication Services		L + 650		1.00	%		4/9/2021		30,066			30,264			30,216
Valeo Foods Group Ltd. (IE)	^{(g)(h)(i)(w)(GBP)}	Food, Beverage & Tobacco		L + 800		1.00	%		5/8/2023	£	29,125			43,572			45,359
Total Senior Secured Loans—Second Lien												$		935,632	$		927,743

Senior Secured Bonds—8.5%
Altice International S.A.R.L. (LU)	^(g)(i)(q)(r)	Media		6.63%					2/15/2023	$	5,046	$		5,046	$		5,010
Artesyn Technologies, Inc.	^(q)(r)	Technology Hardware & Equipment		9.75%					10/15/2020		37,723			37,154			37,440
Guitar Center, Inc.	^(q)(r)	Retailing		6.50%					4/15/2019		27,676			27,225			25,324
Hot Topic, Inc.	^(q)(r)	Consumer Durables & Apparel		9.25%					6/15/2021		3,556			3,641			3,734
iPayment, Inc.	^(q)(r)	Software & Services		9.50%					12/15/2019		8,597			8,597			8,167
Louisiana Public Facilities Authority	^(e)(h)(q)	Energy		L + 1000					1/1/2020		10,650			10,650			10,801
	^(h)(q)			11.50%					1/1/2020		50,580			49,379			51,280

See notes to condensed consolidated financial statements.

Corporate Capital Trust, Inc. and Subsidiaries

Condensed Consolidated Schedule of Investments (unaudited) (continued)

As of June 30, 2015

(in thousands, except share amounts)


Company^(a)(b)	Footnotes	Industry	Interest Rate		Base Rate Floor	Maturity Date		No. Shares/ Principal Amount^(c)			Cost^(d)			Fair Value
New Enterprise Stone & Lime Co., Inc.	^(p)(r)	Capital Goods		7.00%, 6.00% PIK			3/15/2018	$	36,980	$		38,652	$		39,846

OAG Holdings, LLC	^(h)(p)	Energy		8.00%, 2.00% PIK			12/20/2020		20,623			18,164			10,126

Ryerson, Inc.	^(m)	Materials		9.00%			10/15/2017		5,814			5,814			5,858

SquareTwo Financial Corp.	^(r)	Banks		11.63%			4/1/2017		16,044			15,868			11,792

Towergate (UK)	^(g)(i)(GBP)	Insurance		8.75%			4/2/2020	£	936			1,402			1,456

Total Senior Secured Bonds										$		221,592	$		210,834

Total Senior Debt										$		2,575,891	$		2,515,416

Subordinated Debt—15.7%

Block Communications, Inc.	^(q)(r)	Media		7.25%			2/1/2020	$	463	$		474	$		472
Cemex Materials, LLC	^(q)(r)	Materials		7.70%			7/21/2025		57,612			59,919			61,213

Cequel Communications Holdings, LLC	^(q)(r)	Media		5.13%			12/15/2021		20,751			20,522			18,845
	^(q)(r)			5.13%			12/15/2021		178			179			162
	^(q)(r)			7.75%			7/15/2025		16,689			16,501			16,021

Ceridian Corp.	^(r)	Commercial & Professional Services		11.00%			3/15/2021		9,605			10,270			10,157

CHS/Community Health Systems, Inc.	^(i)(r)	Health Care Equipment & Services		6.88%			2/1/2022		114			114			120

Datatel, Inc.	^(m)(q)(r)	Software & Services		9.63%			12/1/2018		10,725			10,683			10,859

Essar Steel Algoma, Inc. (CA)	^{(g)(i)(p)(q)(r)}	Materials		14.00% PIK			2/13/2020		4,897			4,219			2,889

Exemplis Corp.	^(e)(h)(p)	Commercial & Professional Services		L + 700, 2.00% PIK			3/23/2020		25,115			25,115			25,448

GCI, Inc.	^(r)	Telecommunication Services		6.75%			6/1/2021		2,430			2,423			2,460
	^(r)			6.88%			4/15/2025		30,141			29,966			30,442

Global Closure Systems (FR)	^{(g)(h)(i)(p)(EUR)}	Materials		13.00% PIK			11/15/2019	€	21,536			28,254			23,941

Gruppo Argenta S.p.A. (LU)	^{(g)(h)(i)(p)(EUR)}	Retailing		15.00% PIK			11/11/2018		719			976			641

Hilding Anders (SE)	^{(g)(h)(i)(k)(p)(EUR)}	Consumer Durables & Apparel		13.00% PIK			6/30/2021		98,621			118,086			98,042
	^{(g)(h)(i)(k)(n)(p)(EUR)}			12.00% PIK			12/31/2023		17,653			939			458
	^{(g)(h)(i)(k)(p)(EUR)}			18.00% PIK			12/31/2024		8,331			8,485			5,206

Hillman Group, Inc.	^(q)(r)	Consumer Durables & Apparel		6.38%			7/15/2022	$	14,662			14,517			13,856

Hot Topic, Inc.	^(q)(r)	Consumer Durables & Apparel		12.00%			5/15/2019		10,532			10,468			10,690

IMS Health, Inc.	^(i)(q)(r)	Health Care Equipment & Services		6.00%			11/1/2020		9,513			9,913			9,798

JC Penney Corp., Inc.	^(i)(r)	Retailing		5.65%			6/1/2020		8,440			6,511			7,617

Pharmaceutical Product Development, Inc.	^(q)(r)	Pharmaceuticals, Biotechnology & Life Sciences		9.38%			10/15/2017		5,151			5,223			5,260

Summit Materials, LLC		Materials		10.50%			1/31/2020		10,670			11,698			11,617

The TelX Group, Inc.	^(h)(p)	Telecommunication Services		13.50% PIK			7/9/2021		3,689			3,902			3,739

TIBCO Software, Inc.	^(q)(r)	Software & Services		11.38%			12/1/2021		16,567			16,131			16,463

See notes to condensed consolidated financial statements.

Corporate Capital Trust, Inc. and Subsidiaries

Condensed Consolidated Schedule of Investments (unaudited) (continued)

As of June 30, 2015

(in thousands, except share amounts)


Company^(a)(b)	Footnotes	Industry	Interest Rate			Base Rate Floor	Maturity Date		No. Shares/ Principal Amount^(c)			Cost^(d)			Fair Value
Transdigm, Inc.	^(i)(q)(r)	Capital Goods		6.50	%			5/15/2025		1,485	$		1,485	$		1,470

Total Subordinated Debt											$		416,973	$		387,886

Structured Products—3.8%

Comet Aircraft S.A.R.L. (LU), Common Shares	^{(g)(h)(i)(s)*}	Capital Goods								549,451	$		50,000	$		51,596

KKR BPT Holdings Aggregator, LLC, Membership Interest	^(h)(i)(s)*	Diversified Financials								N/A			7,500			7,500

Trade Finance Funding I, Ltd. 2013-1A Class B (KY)	^(g)(h)(i)(q)	Diversified Financials		10.75	%			11/13/2018	$	28,221			28,221			28,310

VSK Holdings Ltd. (KY), Class B Preferred Shares	^{(g)(h)(i)(k)(EUR)}	Banks		7.77	%			10/31/2020		6,650,429			—			5,190

Total Structured Products											$		85,721	$		92,596

Equity / Other—10.2%

AltEn, LLC, Membership Units	^(h)(k)*	Energy								611	$		2,955	$		862

Cengage Learning Holdings II, LP, Common Stock	^(m)	Media								227,802			7,529			6,321

Education Management Corp., Common Stock	^(h)	Consumer Services								3,779,591			1,047			197
Education Management Corp., Warrants	^(h)*							1/5/2022		2,320,791			371			60

Excelitas Technologies Corp., Class A Membership Interest	^(h)*	Technology Hardware & Equipment								N/A			5,636			5,287

GA Capital Specialty Lending Fund, Limited Partnership Interest	^(h)(i)	Diversified Financials								N/A			16,875			16,875

Genesys Telecommunications Laboratories, Inc., Common Stock	^(h)*	Software & Services								5,775			449			876
Global Closure Systems (FR), Limited Partnership Interest	^{(g)(h)(i)*(EUR)}	Materials								N/A			823			1,045
Gruppo Argenta S.p.A. (LU), Warrants	^{(g)(h)(i)*(EUR)}	Retailing								225,289			5,342			2,573
Hilding Anders (SE), Class A Common Stock	^{(g)(h)(i)(k)*(SEK)}	Consumer Durables & Apparel								1,394,288			132			6
Hilding Anders (SE), Class B Common Stock	^{(g)(h)(i)(k)*(SEK)}									260,253			25			1
Hilding Anders (SE), Equity Options	^{(g)(h)(i)(k)*(SEK)}							12/31/2020		236,160,807			14,988			7,265
Home Partners of America, Inc., Common Stock	^(h)(k)*	Real Estate								51,450			51,223			52,549
Home Partners of America, Inc., Warrant Delivery Rights	^(h)(k)*									792			13			15
Home Partners of America, Inc., Warrants	^(h)(k)*							8/7/2024		1,962			214			239
Innovating Partners, LLC, Membership Interest	^(h)(i)(s)	Diversified Financials								N/A			51,600			51,679
iPayment, Inc., Common Stock	^(h)	Software & Services								538,144			1,988			1,627
Jones Apparel Group Holdings, Inc., Common Stock	^(h)	Consumer Durables & Apparel								5,451			872			3,030
Keystone Australia Holdings, Pty. Ltd. (AU), Warrants	^{(g)(h)(i)(AUD)}	Consumer Services								1,588,469			1,019			309
Kurt Geiger Ltd. (UK), Common Stock	^(g)(h)(i)	Consumer Durables & Apparel								5,451			65			6,742
Nine West Holdings, Inc., Common Stock	^(h)*	Consumer Durables & Apparel								5,451			6,541			3,778
OAG Holdings, LLC, Overriding Royalty Interest	^(h)	Energy								N/A			2,354			245
Orchard Marine, Ltd. (VG), Class B Common Stock	^{(g)(h)(i)(k)*}	Transportation								1,964			3,069			2,330

See notes to condensed consolidated financial statements.

Corporate Capital Trust, Inc. and Subsidiaries

Condensed Consolidated Schedule of Investments (unaudited) (continued)

As of June 30, 2015

(in thousands, except share amounts)


Company^(a)(b)	Footnotes	Industry	Interest Rate			Base Rate Floor	Maturity Date		No. Shares/ Principal Amount^(c)			Cost^(d)			Fair Value
Orchard Marine, Ltd. (VG), Series A Preferred Stock	^(g)(h)(i)(k)			9.00	%					33,634	$		32,676	$		33,928
Star Mountain SMB Multi-Manager Credit Platform, LP, Limited Partnership Interest	^(h)(i)	Diversified Financials								N/A			38,578			37,189
Stuart Weitzman, Inc., Other	^(h)	Consumer Durables & Apparel								N/A			—			1,399
SUN NewCo, Preference B Shares	^(h)(i)(GBP)	Insurance								6,113,719			9,065			9,894
SUN NewCo, Common Shares A	^(h)(i)(GBP)									16,450			—			—
Towergate (UK), Ordinary Shares	^{(g)(h)(i)(GBP)}	Insurance								116,814			173			189
Willbros Group, Inc., Common Stock	^*	Energy								2,810,814			7,760			3,598
Total Equity / Other											$		263,382	$		250,108

Total Investments, excluding Short Term Investments—131.8%											$		3,341,967	$		3,246,006

Short Term Investments—1.3%
Goldman Sachs Financial Square Funds—Prime Obligations Fund FST Preferred Shares	^(m)(t)			0.01	%					26,282,279	$		26,282	$		26,282
State Street Institutional Liquid Reserves Fund, Institutional Class	^(t)			0.06	%					5,639,533			5,640			5,640
Total Short Term Investments											$		31,922	$		31,922

TOTAL INVESTMENTS—133.1% ^(u)											$		3,373,889	$		3,277,928

LIABILITIES IN EXCESS OF OTHER ASSETS—(33.1%)																(815,574	)

NET ASSETS—100.0%														$		2,462,354

Collateral on Deposit with Custodian—6.6%
Bank of Nova Scotia—Certificate of Deposit				0.23	%			9/30/2015	$	162,640	$		162,640	$		162,640
Total Collateral on Deposit with Custodian											$		162,640	$		162,640

Derivative Instruments (Note 4)—1.8%
Foreign currency forward contracts	^(h)(i)										$		—			42,402
Total return swaps	^(h)(i)										$		—	$		1,189
Total Derivative Instruments											$		—	$		43,591

*	Non-income producing security.

(a)	Security may be an obligation of one or more entities affiliated with the named company.

(b)	Non-controlled/non-affiliated investments as defined by the Investment Company Act of 1940, as amended (“1940 Act”), unless otherwise indicated. Non-controlled/non-affiliated investments are investments that are neither controlled investments nor affiliated investments.

(c)	Denominated in U.S. dollars unless otherwise noted.

(d)	Represents amortized cost for debt securities and cost for common stocks translated to U.S. dollars.

(e)	The interest rate on these investments is subject to a base rate of 3-Month LIBOR, which at June 30, 2015 was 0.28%. The current base rate for each investment may be different from the reference rate on June 30, 2015.

(f)	The interest rate on these investments is subject to a base rate of 6-Month LIBOR, which at June 30, 2015 was 0.44%. The current base rate for each investment may be different from the reference rate on June 30, 2015.

(g)	A portfolio company domiciled in a foreign country. The jurisdiction of the security issuer may be a different country than the domicile of the portfolio company.

(h)	Investments classified as Level 3 whereby fair value was determined by the Company’s Board of Directors (see Note 2).

See notes to condensed consolidated financial statements.

Corporate Capital Trust, Inc. and Subsidiaries

Condensed Consolidated Schedule of Investments (unaudited) (continued)

As of June 30, 2015

(in thousands, except share amounts)

(i)

The investment is not a qualifying asset as defined in Section 55(a) under the 1940 Act. A business development company may not acquire any asset other than qualifying assets, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the company’s total assets. The Company calculates its compliance with the qualifying assets test on a “look through” basis by disregarding the value of the Company’s total return swaps and treating each loan underlying the total return swaps as either a qualifying asset or non-qualifying asset based on whether the obligor is an eligible portfolio company. On this basis, 73.9% of the Company’s total assets represented qualifying assets as of June 30, 2015.

(j)	The interest rate on these investments is subject to a base rate of 1-Month LIBOR, which at June 30, 2015 was 0.19%. The current base rate for each investment may be different from the reference rate on June 30, 2015.

(k)

Affiliated investment as defined by the 1940 Act, whereby the Company owns between 5% and 25% of the portfolio company’s outstanding voting securities and the investments are not classified as controlled investments. The aggregate fair value of non-controlled, affiliated investments at June 30, 2015 represented 9.4% of the Company’s net assets. Fair value as of December 31, 2014 and June 30, 2015 along with transactions during the six months ended June 30, 2015 in these affiliated investments were as follows (amounts in thousands):


			Six Months Ended June 30, 2015										Six Months Ended June 30, 2015
Non-Controlled, Affiliated Investments	Fair Value at December 31, 2014		Gross Additions (Cost)*		Gross Reductions (Cost)**			Net Unrealized Gain (Loss)			Fair Value at June 30, 2015		Net Realized Gain (Loss)		Interest Income***		Fee Income		Dividend Income
AltEn, LLC
Common Stock	$	2,787	$	-	$	-		$	(1,925	)	$	862	$	-	$	-	$	-	$	-
Term Loan		25,792		298					(1,062	)		25,028		-		1,489		-		-
Hilding Anders
Subordinated Debt		110,973		7,221		-			(14,488	)		103,706		-		7,460		-		-
Class A Common Stock		257		-		-			(251	)		6		-		-		-		-
Class B Common Stock		48		-		-			(47	)		1		-		-		-		-
Equity Options		11,724		-		-			(4,459	)		7,265		-		-		-		-
Home Partners of America, Inc.
Common Stock		22,223		29,282		-			1,044			52,549		-		-		-		-
Warrants		78		137		-			24			239		-		-		-		-
Warrants Delivery Rights		32		-		(19	)		2			15		-		-		-		-
Orchard Marine, Ltd.
Class B Common Stock		3,001		-		-			(671	)		2,330		-		-		-		-
Series A Preferred Stock		23,760		9,084		-			1,084			33,928		-		-		-		518
VSK Holdings, Ltd.
Class B Preferred Shares		2,597		-		-			2,593			5,190		-		-		-		-

Totals	$	203,272	$	46,022	$	(19	)	$	(18,156	)	$	231,119	$	-	$	8,949	$	-	$	518

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

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

***

Includes payment-in-kind interest income.

(l)	The interest rate on these investments is subject to the base rate of 3-Month EURIBOR, which at June 30, 2015 was 0.02%. The current base rate for each investment may be different from the reference rate on June 30, 2015.

(m)	Security or portion thereof was held within CCT Funding, LLC and was pledged as collateral supporting the amounts outstanding under the revolving credit facility with Deutsche Bank as of June 30, 2015.

(n)	Investment was on non-accrual status as of June 30, 2015.

(o)	Position or portion thereof unsettled as of June 30, 2015.

See notes to condensed consolidated financial statements.

Corporate Capital Trust, Inc. and Subsidiaries

Condensed Consolidated Schedule of Investments (unaudited) (continued)

As of June 30, 2015

(in thousands, except share amounts)

(p)

The interest rate on these investments contains a PIK provision, whereby the issuer has either the option or the obligation to make interest payments with the issuance of additional securities. The interest rate in the schedule represents the current interest rate in effect for these investments. The following table provides additional details on these PIK investments, including the maximum PIK interest rate allowed under the existing credit agreements (amounts in thousands).


				Six Months Ended June 30, 2015
PIK Security Name	Local Currency	Local Par as of December 31, 2014		Local Par Additions		Local Par Capitalized PIK		Local Par Reductions			Local Par as of June 30, 2015		Total Current Interest Rate			Current PIK Rate			Maximum Current PIK Rate
Algeco/Scotsman - 15.75% PIK	USD		30,859		—		2,443		—			33,302		15.75	%		15.75	%		15.75	%
Brake Bros Ltd. - L + 325, 3.00% PIK	GBP		8,912		—		134		—			9,046		L + 625			3.00	%		3.00	%
Datatel, Inc. - 9.63%	USD		9,287		1,438		—		—			10,725		9.63	%		0.00	%		10.38	%
Eagle Midco, Inc. - 9.00%	USD		31,796		—		—		(31,796	)		—		N/A			N/A			N/A
Education Management, LLC - 16.00% PIK	USD		1,403		—		—		(1,403	)		—		N/A			N/A			N/A
Essar Steel Algoma, Inc. - 14.00% PIK	USD		4,570		—		327		—			4,897		14.00	%		14.00	%		14.00	%
Excelitas Technologies Corp. - L + 975, 1.5% PIK	USD		108,997		—		824		—			109,821		L + 1125			1.50	%		1.50	%
Exemplis Corp. - L + 700, 2.00% PIK	USD		—		25,000		115		—			25,115		L + 900			2.00	%		2.00	%
Global Closure Systems - 13.00% PIK	EUR		20,221		—		1,315		—			21,536		13.00	%		13.00	%		13.00	%
Gruppo Argenta S.p.A. - 15.00% PIK	EUR		684		—		35		—			719		15.00	%		15.00	%		15.00	%
Gruppo Argenta S.p.A. - 12.00% PIK	EUR		22,754		—		1,388		—			24,142		12.00	%		12.00	%		12.00	%
Gruppo Argenta S.p.A. - 12.00% PIK	EUR		3,205		—		82		—			3,287		12.00	%		12.00	%		12.00	%
Hilding Anders - 18.00% PIK	EUR		8,331		—		—		—			8,331		18.00	%		18.00	%		18.00	%
Hilding Anders - 13.00% PIK	EUR		92,571		—		6,050		—			98,621		13.00	%		13.00	%		13.00	%
Hilding Anders - 12.00% PIK	EUR		17,653		—		—		—			17,653		12.00	%		12.00	%		12.00	%
Hot Topic, Inc. - 12.00%	USD		8,113		2,419		—		—			10,532		12.00	%		0.00	%		12.75	%
Kurt Geiger Ltd. - 10.00%, 1.00% PIK	GBP		46,862		—		237		—			47,099		11.00	%		1.00	%		1.00	%
New Enterprise Stone & Lime Co., Inc. - 7.00%, 6.00% PIK	USD		10,841		25,760		379		—			36,980		13.00	%		6.00	%		12.00	%
OAG Holdings, LLC - 8.00%, 2.00% PIK	USD		20,417		—		206		—			20,623		10.00	%		2.00	%		2.00	%
P & L Development, LLC - L + 750, 1.00% PIK	USD		—		56,205		93		—			56,298		L + 850			1.00	%		1.00	%
Pharmaceutical Product Development, Inc. - 9.38%	USD		5,151		—		—		—			5,151		9.38	%		0.00	%		10.13	%
Stuart Weitzman, Inc. - 11.50%	USD		56,918		—		—		(56,918	)		—		N/A			N/A			N/A
The TelX Group, Inc. - 13.50% PIK	USD		3,457		—		232		—			3,689		13.50	%		13.50	%		13.50	%
Towergate Finance PLC - 13.50% PIK	GBP		—		1,325		10		(1,335	)		—		N/A			N/A			N/A

(q)

This security was acquired in a transaction that was exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Rule 144A thereunder. This security may be resold only in transactions that are exempt from the registration requirements of the Securities Act, normally to qualified institutional buyers.

(r)

Security or portion thereof is held within Paris Funding, LLC and is pledged as collateral supporting the amounts outstanding under the committed facility agreement with BNP Paribas Prime Brokerage, Inc. and eligible to be hypothecated as allowed under Rule 15c2-1(a)(1) of the Securities Exchange Act of 1934 (“Exchange Act”) subject to the limits of the Rehypothecation Agreement. See Note 10, “Borrowings” for additional information.

See notes to condensed consolidated financial statements.

Corporate Capital Trust, Inc. and Subsidiaries

Condensed Consolidated Schedule of Investments (unaudited) (continued)

As of June 30, 2015

(in thousands, except share amounts)

(s)

Controlled investment as defined by the 1940 Act, whereby the Company owns more than 25% of the portfolio company’s outstanding voting securities or maintains the ability to nominate greater than 50% of the board representation. The aggregate fair value of controlled investments at June 30, 2015 represented 4.5% of the Company’s net assets. Fair value as of December 31, 2014 and June 30, 2015 along with transactions during the six months ended June 30, 2015 in these controlled investments were as follows (amounts in thousands):


			Six Months Ended June 30, 2015								Six Months Ended June 30, 2015
Controlled Investments	Fair Value at December 31, 2014		Gross Additions (Cost)*		Gross Reductions (Cost)**		Net Unrealized Gain (Loss)		Fair Value at June 30, 2015		Net Realized Gain (Loss)		Interest Income		Fee Income		Dividend Income
Comet Aircraft S.A.R.L
Common Shares	$	—	$	50,000	$	—	$	1,596	$	51,596	$	—	$	—	$	—	$	—
Innovating Partners, LLC Membership Interest		—		51,600		—		79		51,679		—		—		—		—
KKR BPT Holdings Aggregator, LLC
Membership Interest		5,500		2,000		—		—		7,500		—		—		—		—

Totals	$	5,500	$	103,600	$	—	$	1,675	$	110,775	$	—	$	—	$	—	$	—

(t)	7-day effective yield as of June 30, 2015.

(u)

As of June 30, 2015, the aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost was $51,027; the aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value was $146,988; the net unrealized depreciation was $95,961; the aggregate cost of securities for Federal income tax purposes was $3,373,889.

(v)	The interest rate on these investments is subject to the base rate of 3-Month GBP LIBOR, which at June 30, 2015 was 0.58%. The current base rate for each investment may be different from the reference rate on June 30, 2015.

(w)	The interest rate on these investments is subject to the base rate of 1-Month GBP LIBOR, which at June 30, 2015 was 0.51%. The current base rate for each investment may be different from the reference rate on June 30, 2015.

Abbreviations:

AUD - Australian Dollar; local currency investment amount is denominated in Australian Dollar. A$1 / US $0.766 as of June 30, 2015.

EUR - Euro; local currency investment amount is denominated in Euros. €1 / US $1.109 as of June 30, 2015.

GBP - British Pound Sterling; local currency investment amount is denominated in Pound Sterling. £1 / US $1.572 as of June 30, 2015.

SEK - Swedish Krona; local currency investment amount is denominated in Swedish Kronor. SEK1 / US $0.120 as of June 30, 2015.

AU - Australia

CA - Canada

FR - France

IE - Ireland

KY - Cayman Islands

LU - Luxembourg

NL - The Netherlands

SG - Singapore

SE - Sweden

UK - United Kingdom

VG - British Virgin Islands

E = EURIBOR - Euro Interbank Offered Rate

L = LIBOR - London Interbank Offered Rate, typically 3-Month

PIK - Payment-in-kind; the issuance of additional securities by the borrower to settle interest payment obligations.

See notes to condensed consolidated financial statements.

Corporate Capital Trust, Inc. and Subsidiaries

Consolidated Schedule of Investments

As of December 31, 2014

(in thousands, except share amounts)


Company^(a)(b)	Footnotes	Industry	Interest Rate		Base Rate Floor			Maturity Date		No. Shares/ Principal Amount^(c)		Cost^(d)		Fair Value
Senior Secured Loans—First Lien—52.6%
ABILITY Network, Inc.	^(e)(f)	Health Care Equipment & Services		L + 500		1.00	%		5/14/2021	$	20,165	$	19,958	$	19,812
Algeco/Scotsman (LU)	^{(e)(g)(h)(i)(k)}	Consumer Durables & Apparel		15.75% PIK					5/1/2018		30,859		30,674		27,711
AltEn, LLC	^(j)(k)	Energy		L + 900		1.00	%		9/12/2018		29,610		26,825		25,792
American Freight, Inc.	^(f)(k)	Retailing		L + 625		1.00	%		10/31/2020		32,690		32,531		32,614
Amtek Global Technology Pte. Ltd. (SG)	^{(g)(h)(k)(v)(EUR)}	Automobiles & Components		E + 800		1.00	%		11/10/2019	€	62,849		75,769		73,287
Applied Systems, Inc.	^(e)(f)	Software & Services		L + 325		1.00	%		1/25/2021	$	654		650		646
Aspen Dental Management, Inc.	^(e)(f)	Health Care Equipment & Services		L + 550		1.50	%		10/6/2016		5,992		5,958		6,010
BeyondTrust Software, Inc.	^(f)(k)	Software & Services		L + 700		1.00	%		9/25/2019		11,156		11,046		11,036
BRG Sports, Inc.	^(e)(j)	Consumer Durables & Apparel		L + 550		1.00	%		4/15/2021		4,221		4,143		4,231
Caesars Entertainment Operating Co., Inc.	^(e)(f)(h)	Consumer Services		L + 675					3/1/2017		10,800		10,141		9,492
California Pizza Kitchen, Inc.	^(e)(f)	Food & Staples Retailing		L + 425		1.00	%		3/29/2018		18,602		17,816		17,936
Charlotte Russe, Inc.	^(e)(f)	Retailing		L + 550		1.25	%		5/22/2019		19,261		19,075		18,828
	^(e)(f)			L + 550		1.25	%		5/22/2019		4,715		4,689		4,605
CityCenter Holdings, LLC	^(e)(f)	Real Estate		L + 325		1.00	%		10/16/2020		5,919		5,866		5,880
David’s Bridal, Inc.	^(e)(f)	Retailing		L + 400		1.25	%		10/11/2019		11,216		10,909		10,716
Distribution International, Inc.	^(e)(f)(l)	Retailing		L + 475		1.00	%		12/10/2021		6,424		6,359		6,408
Emerald Performance Materials, LLC	^(e)(j)	Materials		L + 350		1.00	%		7/30/2021	$	654	$	650	$	640
Football Association of Ireland (IE)	^{(g)(h)(k)(EUR)}	Consumer Durables & Apparel		6.40%					12/20/2020	€	43,615		58,419		53,164
Greenway Medical Technologies	^(e)(f)	Health Care Equipment & Services		L + 500		1.00	%		11/4/2020	$	1,763		1,755		1,754
Greystone & Co., Inc.	^(f)(k)	Diversified Financials		L + 800		1.00	%		3/26/2021		33,918		33,373		33,892
Grocery Outlet, Inc.	^(e)(f)(l)	Food & Staples Retailing		L + 475		1.00	%		10/21/2021		1,802		1,803		1,807
Gymboree Corp.	^(e)(f)	Retailing		L + 350		1.50	%		2/23/2018		14,197		12,716		9,347
Harbor Freight Tools USA, Inc.	^(e)(f)	Capital Goods		L + 375		1.00	%		7/26/2019		3,063		3,070		3,059
Hillman Group, Inc.	^(e)(f)	Capital Goods		L + 350		1.00	%		6/30/2021		838		840		829
iPayment, Inc.	^(e)(f)	Software & Services		L + 525		1.50	%		5/8/2017		36,163		35,902		35,560
J. Jill	^(f)(k)	Retailing		L + 850		1.50	%		4/29/2017		5,721		5,721		5,721
Jacuzzi Brands, Inc.	^(f)(k)	Capital Goods		L + 650		1.25	%		7/3/2019		20,268		19,942		20,116
Jacuzzi Brands, Inc. (LU)	^(f)(g)(h)(k)	Capital Goods		L + 650		1.25	%		7/3/2019		20,118		19,795		19,967
KeyPoint Government Solutions, Inc.	^(f)(k)	Capital Goods		L + 650		1.25	%		11/13/2017		37,071		36,602		37,441
Keystone Australia Holdings, Pty. Ltd. (AU)	^{(g)(h)(i)(k)(AUD)}	Consumer Services		7.00%, 8.00% PIK					8/7/2019	A$	38,054		33,263		29,430
Kurt Geiger Ltd. (UK)	^{(g)(h)(i)(k)(GBP)}	Consumer Durables & Apparel		10.00%, 1.00% PIK					4/8/2019	£	46,862		77,069		72,668
Marshall Retail Group, LLC	^(f)(k)	Retailing		L + 600		1.00	%		8/25/2020	$	16,804		16,644		16,822

See notes to condensed consolidated financial statements.

Corporate Capital Trust, Inc. and Subsidiaries

Consolidated Schedule of Investments (continued)

As of December 31, 2014

(in thousands, except share amounts)


Company^(a)(b)	Footnotes	Industry	Interest Rate		Base Rate Floor			Maturity Date		No. Shares/ Principal Amount^(c)			Cost^(d)			Fair Value
MCS AMS Sub-Holdings, LLC	^(f)	Commercial & Professional Services		L + 600		1.00	%		10/15/2019	$	45,605	$		44,490	$		40,817
MSX International, Inc.	^(f)	Software & Services		L + 500		1.00	%		8/18/2020		9,102			8,663			9,056
Neiman Marcus Group, LLC	^(e)(f)	Retailing		L + 325		1.00	%		10/25/2020		4,976			4,901			4,877
New Enterprise Stone & Lime Co., Inc.	^(f)(k)	Capital Goods		L + 700		1.00	%		2/12/2019		56,298			56,298			56,549
Nine West Holdings, Inc.	^(e)(f)	Consumer Durables & Apparel		L + 375		1.00	%		10/8/2019		13,554			13,306			12,715
OpenLink Financial, Inc.	^(f)	Software & Services		L + 500		1.25	%		10/30/2017		46			46			45
Pacific Union Financial, LLC	^(j)(k)	Diversified Financials		L + 800		1.00	%		5/31/2019		46,378			45,734			46,078
Petroplex Acidizing, Inc.	^(f)(k)	Energy		L + 725		1.00	%		12/4/2019		36,438			35,899			35,891
RedPrairie Corp.	^(e)(f)(l)	Software & Services		L + 500		1.00	%		12/21/2018		10,005			9,659			9,348
Surgery Center Holdings, Inc.	^(e)(f)	Health Care Equipment & Services		L + 425		1.00	%		11/3/2020		14,834			14,762			14,482
Sutherland Global Services, Inc.	^(e)(f)(h)	Software & Services		L + 500		1.00	%		4/23/2021		2,964			2,891			2,956
	^(e)(f)(h)			L + 500		1.00	%		4/23/2021		12,732			12,419			12,700
TIBCO Software, Inc.	^(e)(f)(h)(l)	Software & Services		L + 550		1.00	%		12/4/2020		43,971			42,246			42,762
Towergate Finance PLC (UK)	^{(g)(h)(m)(o)(GBP)}	Insurance		L + 450					11/15/2017	£	475			659			665
Travelport, LLC (LU)	^(e)(f)(g)(h)	Software & Services		L + 500		1.00	%		9/2/2021	$	19,751			19,513			19,751
Tweddle Group, Inc.	^(f)(k)	Automobiles & Components		L + 675		1.00	%		4/7/2020		45,242			44,205			45,035
Varsity Brands, Inc.	^(e)(f)(l)	Consumer Durables & Apparel		L + 500		1.00	%		12/10/2021		5,796			5,738			5,800
Waste Pro USA, Inc.	^(f)(k)	Transportation		L + 750		1.00	%		10/15/2020	$	36,681	$		36,681	$		36,749
Willbros Group, Inc.	^(f)(k)	Energy		L + 975		1.25	%		12/15/2019		74,944			74,944			74,944
Wilton Brands, LLC	^(e)(f)	Materials		L + 625		1.25	%		8/30/2018		5,141			5,068			4,807
Z Gallerie, Inc.	^(k)(n)	Retailing		L + 650		1.00	%		10/8/2020		33,254			32,883			33,413
Zayo Group, LLC	^(e)(f)(h)	Telecommunication Services		L + 300		1.00	%		7/2/2019		1,596			1,577			1,583
Total Senior Secured Loans - First Lien												$		1,152,555	$		1,128,244

Senior Secured Loans - Second Lien—39.3%
American Casino & Entertainment Properties, LLC	^(f)	Consumer Services		L + 1000		1.25	%		1/3/2020	$	1,832	$		1,889	$		1,901
Angelica Corp.	^(f)(k)	Health Care Equipment & Services		L + 875		1.25	%		7/15/2019		50,869			50,868			46,131
Applied Systems, Inc.	^(e)(f)	Software & Services		L + 650		1.00	%		1/24/2022		24,905			25,336			24,427
Arysta Lifescience SPC, LLC	^(e)(f)(h)	Food, Beverage & Tobacco		L + 700		1.25	%		11/30/2020		16,305			16,167			16,295
AssuredPartners, Inc.	^(f)	Insurance		L + 675		1.00	%		4/2/2022		7,097			7,092			6,866
Brake Bros Ltd. (UK)	^{(g)(h)(i)(o)(GBP)}	Food & Staples Retailing		L + 325, 3.00% PIK					3/12/2017	£	8,912			12,872			13,242
BRG Sports, Inc.	^(j)	Consumer Durables & Apparel		L + 925		1.00	%		4/15/2022	$	23,855			23,661			24,034
Catalina Marketing Corp.	^(j)	Media		L + 675		1.00	%		4/11/2022		6,020			5,978			5,613
CHG Companies, Inc.	^(e)(f)	Health Care Equipment & Services		L + 775		1.25	%		11/19/2020		9,871			9,764			9,896
CRC Health Group, Inc.	^(f)	Health Care Equipment & Services		L + 800		1.00	%		9/28/2021		42,358			42,134			43,381

See notes to condensed consolidated financial statements.

Corporate Capital Trust, Inc. and Subsidiaries

Consolidated Schedule of Investments (continued)

As of December 31, 2014

(in thousands, except share amounts)


Company^(a)(b)	Footnotes	Industry	Interest Rate		Base Rate Floor			Maturity Date		No. Shares/ Principal Amount^(c)			Cost^(d)			Fair Value
CTI Foods Holding Co., LLC	^(f)	Food, Beverage & Tobacco		L + 725		1.00	%		6/28/2021	$	23,219	$		22,918	$		22,813
Emerald Performance Materials, LLC	^(j)	Materials		L + 675		1.00	%		8/1/2022		2,041			2,031			1,989
Excelitas Technologies Corp.	^(f)(k)	Technology Hardware & Equipment		L + 1125		1.00	%		4/29/2021		108,997			108,997			109,556
Greenway Medical Technologies	^(f)	Health Care Equipment & Services		L + 825		1.00	%		11/4/2021		26,396			26,035			25,736
Grocery Outlet, Inc.	^(f)	Food & Staples Retailing		L + 825		1.00	%		10/21/2022		41,616			40,175			41,304
Gruppo Argenta S.p.A. (LU)	^{(g)(h)(i)(k)(EUR)}	Retailing		12.00% PIK					1/31/2019	€	3,205			3,356			3,374
	^{(g)(h)(i)(k)(EUR)}			12.00% PIK					1/31/2019		22,754			25,262			23,951
Gypsum Management & Supply, Inc.	^(f)	Capital Goods		L + 675		1.00	%		4/1/2022	$	13,207			13,085			13,207
Integra Telecom Holdings, Inc.	^(f)	Telecommunication Services		L + 850		1.25	%		2/21/2020		3,000			3,059			2,989
iParadigms Holdings, LLC	^(f)	Software & Services		L + 725		1.00	%		7/29/2022		23,349			23,180			23,028
Learfield Communications, Inc.	^(f)	Media		L + 775		1.00	%		10/8/2021		12,767			12,875			12,703
Lightower Fiber, LLC	^(e)(f)	Telecommunication Services		L + 675		1.25	%		4/12/2021		5,282			5,317			5,220
Maxim Crane, LP	^(e)(f)	Capital Goods		L + 925		1.00	%		11/26/2018		5,168			5,291			5,220
Misys Ltd. (UK)	^(e)(g)(h)	Software & Services		12.00%					6/12/2019		3,000			3,319			3,266
NewWave Communications	^(f)	Media		L + 800		1.00	%		10/30/2020		13,712			13,673			13,541
P2 Energy Solutions, Inc.	^(f)(h)	Software & Services		L + 800		1.00	%		4/30/2021		74,312			72,104			70,782
	^(f)			L + 800		1.00	%		4/30/2021		9,283			9,200			8,935
Polyconcept Finance B.V. (NL)	^(g)(h)(j)(k)	Consumer Durables & Apparel		L + 875		1.25	%		6/28/2020	$	46,727	$		46,727	$		46,487
Progressive Solutions	^(j)	Health Care Equipment & Services		L + 850		1.00	%		10/22/2021		21,145			20,991			20,511
RedPrairie Corp.	^(e)(f)	Software & Services		L + 1000		1.25	%		12/21/2019		38,114			36,592			32,270
Sabine Oil & Gas, LLC	^(e)(f)	Energy		L + 750		1.25	%		12/31/2018		14,527			14,421			11,258
SafeNet, Inc.	^(j)(k)	Software & Services		L + 750		1.00	%		3/5/2021		20,829			20,544			21,015
Safety Technology Holdings, Inc.	^(f)(k)	Technology Hardware & Equipment		L + 825		1.00	%		6/2/2020		30,402			29,738			30,560
SI Organization, Inc.	^(f)	Capital Goods		L + 800		1.00	%		5/23/2020		56,000			55,483			55,160
Talbots, Inc.	^(f)	Retailing		L + 725		1.00	%		3/19/2021		15,074			14,976			14,547
The TelX Group, Inc.	^(f)	Telecommunication Services		L + 650		1.00	%		4/9/2021		11,696			11,682			11,448
Websense, Inc.	^(f)	Technology Hardware & Equipment		L + 725		1.00	%		12/24/2020		22,131			22,037			21,301
Total Senior Secured Loans—Second Lien												$		858,829	$		843,957

Senior Secured Bonds—6.9%
Artesyn Technologies, Inc.	^(p)(q)	Technology Hardware & Equipment		9.75%					10/15/2020	$	14,012	$		13,912	$		13,276
Guitar Center, Inc.	^(p)(q)	Retailing		6.50%					4/15/2019		26,191			25,826			22,524
Hot Topic, Inc.	^(p)(q)	Consumer Durables & Apparel		9.25%					6/15/2021		2,396			2,375			2,564
Louisiana Public Facilities Authority	^(k)(p)	Energy		11.50%					1/1/2020		50,580			49,283			50,141
	^(k)(p)			L + 1000					1/1/2020		10,650			10,650			10,534

See notes to condensed consolidated financial statements.

Corporate Capital Trust, Inc. and Subsidiaries

Consolidated Schedule of Investments (continued)

As of December 31, 2014

(in thousands, except share amounts)


Company^(a)(b)	Footnotes	Industry	Interest Rate		Base Rate Floor	Maturity Date		No. Shares/ Principal Amount^(c)			Cost^(d)			Fair Value
New Enterprise Stone & Lime Co., Inc.	^(i)(q)	Capital Goods		6.00%, 7.00% PIK			3/15/2018	$	10,841	$		10,913	$		11,437
OAG Holdings, LLC	^(i)(k)	Energy		8.00%, 2.00% PIK			12/20/2020		20,417			17,838			13,675
Ryerson, Inc.	^(e)	Materials		9.00%			10/15/2017		5,814			5,814			5,974
SquareTwo Financial Corp.	^(q)	Banks		11.625%			4/1/2017		16,359			16,153			16,196
Towergate Finance PLC (UK)	^{(g)(h)(m)(o)(p)} ^(GBP)	Insurance		L + 550			2/15/2018	£	1,100			1,361			1,496
Total Senior Secured Bonds										$		154,125	$		147,817

Total Senior Debt										$		2,165,509	$		2,120,018

Subordinated Debt—20.2%
24 Hour Fitness Worldwide, Inc.	^(p)(q)	Consumer Services		8.00%			6/1/2022	$	7,192	$		6,636	$		5,754
Cemex Materials, LLC	^(p)(q)	Materials		7.70%			7/21/2025		27,562			27,804			30,870
Cequel Communications Holdings, LLC	^(p)(q)	Media		5.125%			12/15/2021		7,205			7,018			6,989
Ceridian Corp.	^(q)	Commercial & Professional Services		11.00%			3/15/2021		16,201			17,433			17,723
CHS/Community Health Systems, Inc.	^(h)(q)	Health Care Equipment & Services		6.875%			2/1/2022		114			114			121
Datatel, Inc.	^(e)(p)	Software & Services		9.625%			12/1/2018		9,287			9,215			9,333
Eagle Midco, Inc.	^(p)(q)	Software & Services		9.00%			6/15/2018		31,796			32,607			32,511
Education Management Corp.	^(i)(k)(m)(p)	Consumer Services		16.00% PIK			7/1/2018		1,403			1,410			567
Essar Steel Algoma, Inc. (CA)	^(g)(h)(i)(q)	Materials		14.00% PIK			2/13/2020	$	4,570	$		3,850	$		4,044
GCI, Inc.	^(q)	Telecommunication Services		8.625%			11/15/2019		53,119			55,914			55,709
	^(q)			6.75%			6/1/2021		158			151			155
Global Closure Systems (FR)	^{(g)(h)(i)(k)(EUR)}	Materials		13.00% PIK			11/15/2019	€	20,221			26,720			24,452
Gruppo Argenta S.p.A. (LU)	^{(g)(h)(i)(k)(EUR)}	Retailing		15.00% PIK			11/11/2018		684			937			663
Hilding Anders (SE)	^{(g)(h)(i)(k)(r)(EUR)}	Consumer Durables & Apparel		13.00% PIK			6/30/2021	€	92,571			110,851			101,486
	^{(g)(h)(i)(k)(m)(r)(EUR)}			12.00% PIK			12/31/2023		17,653			939			1,502
	^{(g)(h)(i)(k)(r)(EUR)}			18.00% PIK			12/31/2024		8,331			8,499			7,985
Hillman Group, Inc.	^(p)(q)	Capital Goods		6.375%			7/15/2022	$	3,305			3,174			3,173
Hot Topic, Inc.	^(p)(q)	Consumer Durables & Apparel		12.00%			5/15/2019		8,113			7,973			8,275
iPayment, Inc.	^(q)	Software & Services		10.25%			5/15/2018		8,597			8,597			8,597
JC Penney Corp., Inc.	^(h)(q)	Retailing		5.65%			6/1/2020		8,440			6,371			6,541
Pharmaceutical Product Development, Inc.	^(p)(q)	Pharmaceuticals, Biotechnology & Life Sciences		9.375%			10/15/2017		5,151			5,237			5,264
Stuart Weitzman, Inc.	^(k)	Consumer Durables & Apparel		11.50%			8/29/2019		56,918			55,585			56,724
Summit Materials, LLC	^(q)	Materials		10.50%			1/31/2020		19,800			21,625			21,978
The TelX Group, Inc.	^(i)(k)	Telecommunication Services		13.50% PIK			7/9/2021		3,457			3,680			3,480
TIBCO Software, Inc.	^(h)(p)(q)	Software & Services		11.375%			12/1/2021		13,819			13,435			13,370

See notes to condensed consolidated financial statements.

Corporate Capital Trust, Inc. and Subsidiaries

Consolidated Schedule of Investments (continued)

As of December 31, 2014

(in thousands, except share amounts)


Company^(a)(b)	Footnotes	Industry	Interest Rate			Base Rate Floor	Maturity Date		No. Shares/ Principal Amount ^(c)			Cost^(d)			Fair Value
Towergate Finance PLC (UK)	^{(g)(h)(m)(p)(q)(GBP)}	Insurance		10.50	%			2/15/2019	£	14,608	$		23,229	$		6,489
Total Subordinated Debt											$		459,004	$		433,755

Structured Products—1.7%
KKR BPT Holdings Aggregator, LLC	^(h)(k)(s)*	Diversified Financials								N/A	$		5,500	$		5,500
Trade Finance Funding I, Ltd. 2013-1A Class B (KY)	^(g)(h)(k)(p)	Diversified Financials		10.75	%			11/13/2018	$	28,221			28,221			28,324
VSK Holdings, Ltd. (KY)	^{(g)(h)(k)(r)(EUR)}	Diversified Financials								620,377			—			2,597
Total Structured Products											$		33,721	$		36,421

Equity / Other—6.1%
AltEn, LLC, Membership Units	^(k)(r)*	Energy								611	$		2,955	$		2,787
Cengage Learning Holdings II, LP, Common Stock	^(e)	Media								227,802			7,529			5,069
Excelitas Technologies Corp., Class A Membership Interest	^(k)*	Technology Hardware & Equipment								N/A			5,636			6,312
Genesys Telecommunications Laboratories, Inc., Common Stock	^(k)*	Software & Services								5,775			449			760
Global Closure Systems (FR), Limited Partnership Interest	^{(g)(h)(k)*(EUR)}	Materials								N/A			823			1,566
Gruppo Argenta S.p.A. (LU), Warrants	^{(g)(h)(k)*(EUR)}	Retailing								225,289			5,342			3,951
Hilding Anders (SE), Class A Common Stock	^{(g)(h)(k)(r)*(SEK)}	Consumer Durables & Apparel								1,394,288			132			257
Hilding Anders (SE), Class B Common Stock	^{(g)(h)(k)(r)*(SEK)}									260,253			25			48
Hilding Anders (SE), Equity Options	^{(g)(h)(k)(r)*(SEK)}							12/31/2020		236,160,807			14,988			11,724
Home Partners of America, Inc., Common Stock	^(k)(r)*	Real Estate								22,050	$		21,941	$		22,223
Home Partners of America, Inc., Warrant Delivery Rights	^(k)(r)*									1,968			32			32
Home Partners of America, Inc., Warrants	^(k)(r)*									707			77			78
iPayment, Inc. Common Stock	^(k)	Software & Services								538,144			2,223			2,223
Jones Apparel Group Holdings, Inc., Common Stock	^(k)	Consumer Durables & Apparel								5,451			872			2,502
Keystone Australia Holdings, Pty. Ltd. (AU), Warrants	^{(g)(h)(k)*(AUD)}	Consumer Services								1,588,469			1,019			903
Kurt Geiger Ltd. (UK), Common Stock	^(g)(h)(k)*	Consumer Durables & Apparel								5,451			1,090			6,336
Nine West Holdings, Inc., Common Stock	^(k)*	Consumer Durables & Apparel								5,451			6,541			3,672
OAG Holdings, LLC, Overriding Royalty Interest	^(k)	Energy								N/A			2,354			1,542
Orchard Marine, Ltd. (VG), Class B Common Stock	^{(g)(h)(k)(r)*}	Transportation								1,964			3,069			3,001
Orchard Marine, Ltd. (VG), Series A Preferred Stock	^(g)(h)(k)(r)			9.00	%					24,550			23,592			23,760
Star Mountain SMB Multi-Manager Credit Platform, LP, Limited Partnership Interest	^(h)(k)	Diversified Financials								N/A			25,944			23,206
Stuart Weitzman, Inc., Common Stock	^(k)	Consumer Durables & Apparel								5,451			3,025			8,425
Total Equity / Other											$		129,658	$		130,377

Total Investments, excluding Short Term Investments—126.8%											$		2,787,892	$		2,720,571

Short Term Investments—0.0%
Goldman Sachs Financial Square Funds—Prime Obligations Fund, FST Preferred Shares	^(e)(t)			0.01	%					583,543	$		584	$		584

See notes to condensed consolidated financial statements.

Corporate Capital Trust, Inc. and Subsidiaries

Consolidated Schedule of Investments (continued)

As of December 31, 2014

(in thousands, except share amounts)


Company	Footnotes	Industry	Interest Rate			Base Rate Floor	Maturity Date		No. Shares/ Principal Amount			Cost			Fair Value
State Street Institutional Liquid Reserves Fund, Institutional Class	^(t)			0.06	%					45,440	$		45	$		45
Total Short Term Investments											$		629	$		629

TOTAL INVESTMENTS—126.8%^(u)											$		2,788,521	$		2,721,200

LIABILITIES IN EXCESS OF OTHER ASSETS—(26.8%)																(575,379	)

NET ASSETS—100.0%											$					2,145,821

Collateral on Deposit with Custodian—5.4%
Bank of Nova Scotia—Certificate of Deposit				0.13	%			3/31/2015		115,700	$		115,700			115,700
Total Collateral on Deposit with Custodian											$		115,700	$		115,700

Derivative Instruments (Note 4)—1.7%
Foreign currency forward contracts	^(h)(k)										$		—			40,445
Total return swaps	^(h)(k)										$		—			(3,445	)
Total Derivative Instruments											$		—	$		37,000

*	Non-income producing security.

(a)	Security may be an obligation of one or more entities affiliated with the named company.

(b)	Non-Controlled/Non-Affiliate investments as defined by the Investment Company Act of 1940, as amended (“1940 Act”), unless otherwise indicated. Non-controlled/Non-Affiliate Investments are investments that are neither Controlled Investments nor Affiliate Investments.

(c)	Denominated in U.S. Dollars unless otherwise noted.

(d)	Represents amortized cost for debt securities and cost for common stocks translated to U.S. dollars.

(e)	Security or portion thereof was held within CCT Funding, LLC and was pledged as collateral supporting the amounts outstanding under the revolving credit facility with Deutsche Bank as of December 31, 2014.

(f)	The interest rate on these investments is subject to a base rate of 3-Month LIBOR, which at December 31, 2014 was 0.26%. The current base rate for each investment may be different from the reference rate on December 31, 2014.

(g)	A portfolio company domiciled in a foreign country. The jurisdiction of the security issuer may be a different country than the domicile of the portfolio company.

(h)

The investment is not a qualifying asset as defined in Section 55(a) under the 1940 Act. A business development company may not acquire any asset other than qualifying assets, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the company’s total assets. The Company calculates its compliance with the qualifying assets test on a “look through” basis by disregarding the value of the Company’s total return swaps and treating each loan underlying the total return swaps as either a qualifying asset or non-qualifying asset based on whether the obligor is an eligible portfolio company. On this basis, 72.6% of the Company’s total assets represented qualifying assets as of December 31, 2014.

(i)

See notes to condensed consolidated financial statements.

Corporate Capital Trust, Inc. and Subsidiaries

Consolidated Schedule of Investments (continued)

As of December 31, 2014

(in thousands, except share amounts)


				Year Ended December 31, 2014
PIK Security Name	Local Currency	Local Par as of December 31, 2013		Local Par Additions		Local Par Capitalized PIK		Local Par Reductions			Local Par as of December 31, 2014		Total Current Interest Rate			Currant PIK Rate			Maximum Current PIK Rate
Algeco/Scotsman - 15.75% PIK	USD		26,464		—		4,395		—			30,859		15.75	%		15.75	%		15.75	%
Brake Bros Ltd. - L + 325, 3.00% PIK	GBP		8,650		—		262		—			8,912		L + 625	%		3.00	%		3.00	%
Datatel, Inc. - 9.63%	USD		9,287		—		—		—			9,287		9.63	%		0.00	%		10.38	%
Eagle Midco, Inc. - 9.00%	USD		39,815		31,796		—		(39,815	)		31,796		9.00	%		0.00	%		9.75	%
Education Management, LLC - 15.00%, 1.00% PIK	USD		1,299		—		—		(1,299	)		—		N/A			N/A			N/A
Education Management, LLC - 16.00% PIK	USD		—		1,299		104		—			1,403		16.00	%		16.00	%		16.00	%
Essar Steel Algoma, Inc. - 14.00% PIK	USD		—		4,570		—		—			4,570		14.00	%		14.00	%		14.00	%
Excelitas Technologies Corp. - L + 975, 1.50% PIK	USD		107,355		—		1,642		—			108,997		L + 1125			1.50	%		1.50	%
Global Closure Systems - 13.00% PIK	EUR		17,828		—		2,393		—			20,221		13.00	%		13.00	%		13.00	%
Griffins Foods, Ltd. - 13.75% PIK	NZD		47,417		—		5,601		(53,018	)		—		N/A			N/A			N/A
Gruppo Argenta S.p.A. - 15.00% PIK	EUR		—		635		49		—			684		15.00	%		15.00	%		15.00	%
Gruppo Argenta S.p.A. - 12.00% PIK	EUR		—		21,459		1,295		—			22,754		12.00	%		12.00	%		12.00	%
Gruppo Argenta S.p.A. - 12.00% PIK	EUR		—		3,205		—		—			3,205		12.00	%		12.00	%		12.00	%
Hilding Anders - 18.00% PIK	EUR		—		7,046		1,285		—			8,331		18.00	%		18.00	%		18.00	%
Hilding Anders - 13.00% PIK	EUR		81,478		—		11,093		—			92,571		13.00	%		13.00	%		13.00	%
Hilding Anders - 12.00% PIK	EUR		—		15,739		1,914		—			17,653		12.00	%		12.00	%		12.00	%
Hot Topic, Inc. - 12.00%	USD		8,113		—		—		—			8,113		12.00	%		12.00	%		12.75	%
Keystone Australia Holdings, Pty. Ltd. - 7.00%, 8.00% PIK	AUD		—		36,858		1,196		—			38,054		15.00	%		8.00	%		8.00	%
Kurt Geiger Ltd. - 10.00%, 1.00% PIK	GBP		—		46,625		237		—			46,862		11.00	%		1.00	%		1.00	%
New Enterprise Stone & Lime Co., Inc. - 6.00%, 7.00% PIK	USD		10,071		—		770		—			10,841		13.00	%		7.00	%		11.00	%
OAG Holdings, LLC - 8.00%, 2.00% PIK	USD		20,008		—		409		—			20,417		10.00	%		2.00	%		2.00	%
Pharmaceutical Product Development, Inc. - 9.38%	USD		—		5,151		—		—			5,151		9.38	%		0.00	%		10.13	%
Stuart Weitzman, Inc. - 11.50%	USD		—		56,918		—		—			56,918		11.50	%		0.00	%		12.50	%
The TelX Group, Inc. - 13.50% PIK	USD		—		3,142		315		—			3,457		13.50	%		13.50	%		13.50	%

(j)	The interest rate on these investments is subject to a base rate of 1-Month LIBOR, which at December 31, 2014 was 0.17%. The current base rate for each investment may be different from the reference rate on December 31, 2014.

(k)	Investments classified as Level 3 whereby fair value was determined by the Company’s Board of Directors (see Note 2).

(l)	Position or portion thereof unsettled as of December 31, 2014.

(m)	Investment was on non-accrual status as of December 31, 2014.

(n)	The interest rate on these investments is subject to a base rate of 6-Month LIBOR, which at December 31, 2014 was 0.36%. The current base rate for each investment may be different from the reference rate on December 31, 2014.

(o)	The interest rate on these investments is subject to the base rate of 3-Month GBP LIBOR, which at December 31, 2014 was 0.56%. The current base rate for each investment may be different from the reference rate on December 31, 2014.

(p)

(q)

Security or portion thereof was held within Paris Funding, LLC and was pledged as collateral supporting the amounts outstanding under the committed facility agreement with BNP Paribas Prime Brokerage, Inc. as of December 31, 2014 and was eligible to be hypothecated as allowed under Rule 15c2-1(a)(1) of the Securities Exchange Act of 1934 (“Exchange Act”) subject to the limits of the Rehypothecation Agreement.

See notes to consolidated financial statements.

Corporate Capital Trust, Inc. and Subsidiaries

Consolidated Schedule of Investments (continued)

As of December 31, 2014

(in thousands, except share amounts)

(r)

Affiliated investment as defined by the 1940 Act, whereby the Company owns between 5% and 25% of the portfolio company’s outstanding voting securities and the investments are not classified as controlled investments. The aggregate fair value of non-controlled, affiliated investments at December 31, 2014 represented 9.5% of the Company’s net assets. Fair value as of December 31, 2013 and December 31, 2014 along with transactions during the year ended December 31, 2014 in affiliated investments were as follows (amounts in thousands):


			Year Ended December 31, 2014										Year Ended December 31, 2014
Non-controlled, Affiliated Investments	Fair Value at December 31, 2013		Gross Additions (Cost)*		Gross Reductions (Cost)**			Net Unrealized Gain (Loss)			Fair Value at December 31, 2014		Net Realized Gain (Loss)		Interest Income		Fee Income		Dividend Income
AltEn, LLC
Common Stock	$	-	$	2,955	$	-		$	(168	)	$	2,787	$	-	$	-	$	-	$	-
Term Loan				26,825					(1,033	)		25,792		-		913		592		-
Hilding Anders
Subordinated Debt		-		120,289		-			(9,316	)		110,973		-		12,298		-		-
Class A Common Stock		-		132		-			125			257		-		-		-		-
Class B Common Stock		-		25		-			23			48		-		-		-		-
Equity Options		-		14,988		-			(3,264	)		11,724		-		-		-		-
Home Partners of America, Inc.
Common Stock		-		21,941		-			282			22,223		-		-		-		-
Warrants		-		77		-			1			78		-		-		-		-
Warrants Delivery Rights		-		32		-			-			32		-		-		-		-
Orchard Marine, Ltd.
Class B Common Stock		-		3,069		-			(68	)		3,001		-		-		-		-
Series A Preferred Stock		-		23,592		-			168			23,760		-		-		-		511
VSK Holdings, Ltd.
Structured Product		21,481		-		(21,474	)		2,590			2,597		-		-		-		2,643

Totals	$	21,481	$	213,925	$	(21,474	)	$	(10,660	)	$	203,272	$	-	$	13,211	$	592	$	3,154

(s)

Controlled investment as defined by the 1940 Act, whereby the Company owns more than 25% of the portfolio company’s outstanding voting securities or maintains the ability to nominate greater than 50% of the board representation. The aggregate fair value of controlled at December 31, 2014 represented 0.3% of the Company’s net assets. Fair value as of December 31, 2013 and 2014 along with transactions during the year ended December 31, 2014 in controlled investments were as follows (amounts in thousands):


			Year Ended December 31, 2014								Year Ended December 31, 2014
Controlled Investments	Fair Value at December 31, 2013		Gross Additions (Cost)*		Gross Reductions (Cost)**		Net Unrealized Gain (Loss)		Fair Value at December 31, 2014		Net Realized Gain (Loss)		Interest Income		Fee Income		Dividend Income
KKR BPT Holdings Aggregator, LLC Structured Product	$	2,500	$	3,000	$	—	$	—	$	5,500	$	—	$	—	$	—	$	—

Totals	$	2,500	$	3,000	$	—	$	—	$	5,500	$	—	$	—	$	—	$	—

See notes to consolidated financial statements.

Corporate Capital Trust, Inc. and Subsidiaries

Consolidated Schedule of Investments (continued)

As of December 31, 2014

(in thousands, except share amounts)

(t)	7-day effective yield as of December 31, 2014.

(u)

As of December 31, 2014, the aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost was $39,298; the aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value was $106,618; the net unrealized depreciation was $67,320; the aggregate cost of securities for Federal income tax purposes was $2,788,521.

(v)	The interest rate on these investments is subject to a base rate of 3-Month EURIBOR LIBOR, which at December 31, 2014 was 0.08%. The current base rate for each investment may be different from the reference rate on December 31, 2014.

Abbreviations:

AUD - Australian Dollar; local currency investment amount is denominated in Australian Dollar. A$1 / US $0.816 as of December 31, 2014.

EUR - Euro; local currency investment amount is denominated in Euros. €1 / US $1.210 as of December 31, 2014.

GBP - British Pound Sterling; local currency investment amount is denominated in Pound Sterling. £1 / US $1.559 as of December 31, 2014.

SEK - Swedish Krona; local currency investment amount is denominated in Swedish Kronas. SEK1 / US $0.128 as of December 31, 2014.

AU - Australia

CA - Canada

FR - France

IE - Ireland

KY - Cayman Islands

LU - Luxembourg

NL - The Netherlands

SE - Sweden

SG - Singapore

UK - United Kingdom

VG - British Virgin Islands

E = EURIBOR – Euro Interbank Offered Rate

L = LIBOR - London Interbank Offered Rate, typically 3-Month

PIK - Payment-in-kind; the issuance of additional securities by the borrower to settle interest payment obligations.

See notes to consolidated financial statements.

CORPORATE CAPITAL TRUST, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited)

1. Principal Business and Organization

Corporate Capital Trust, Inc. (the “Company”) was incorporated under the general corporation laws of the State of Maryland on June 9, 2010. The Company is a non-diversified closed-end management investment company and regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). The Company’s investment objective is to provide its shareholders with current income and, to a lesser extent, long-term capital appreciation, by investing primarily in the debt of privately owned U.S. companies with a focus on originated transactions sourced through the networks of its advisors. The Company commenced business operations on June 17, 2011 and investment operations on July 1, 2011. The Company has elected to be treated as a regulated investment company (“RIC”) under the Internal Revenue Code of 1986, as amended (the “Code”) and operates in a manner so as to qualify for the tax treatment applicable to RICs.

The Company is externally managed by CNL Fund Advisors Company (“CNL”) and KKR Credit Advisors (US) LLC (“KKR”) (collectively, the “Advisors”), which are responsible for sourcing potential investments, analyzing and conducting due diligence on prospective investment opportunities, structuring investments and ongoing monitoring of the Company’s investment portfolio. Both Advisors are registered as investment advisers with the Securities and Exchange Commission (“SEC”). CNL also provides the administrative services necessary for the Company to operate.

The Company sold approximately 141 million shares of common stock through its initial continuous public offering (the “Initial Offering”). The Company is currently offering and selling shares of its common stock pursuant to a registration statement on Form N-2 (the “Follow-On Registration Statement”) covering its follow-on continuous public offering of up to 209 million shares of common stock (the “Follow-On Offering”). The Initial Offering and Follow-On Offering are collectively referred to as the “Offerings.”

In January 2015, the Company filed a shelf registration statement with the SEC on Form N-2 (the “Shelf Registration Statement”) to provide for the Company the ability to offer, from time to time, in one or more offerings or series up to $750 million of its securities, on terms to be determined at the time of each such offering. The Shelf Registration Statement was declared effective by the SEC in January 2015.

As of June 30, 2015, the Company had various wholly owned subsidiaries including, among others, (i) CCT Funding LLC (“CCT Funding”) and Paris Funding LLC (“Paris Funding”), special purpose financing subsidiaries organized for the purpose of arranging secured debt financing with banks and borrowing money to invest in portfolio companies, (ii) Halifax Funding LLC (“Halifax Funding”), a special purpose financing subsidiary organized to enter into total return swaps (“TRS”) and (iii) FCF LLC and CCT Holdings LLC, taxable subsidiaries (the “Taxable Subsidiaries”), which are taxed as corporations for federal income tax purposes and were organized to hold certain equity securities of portfolio companies organized as pass-through entities for U.S. tax purposes.

2. Significant Accounting Policies

Basis of Presentation - The accompanying financial statements of the Company are prepared in accordance with the instructions to Form 10-Q. The Company is an investment company following accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services - Investment Companies (“ASC Topic 946” ). The unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which are, in the opinion of management, necessary for the fair presentation of the Company’s results for the interim periods presented. The results of operations for interim periods are not indicative of results to be expected for the full year.

Amounts as of December 31, 2014 included in the unaudited condensed consolidated financial statements have been derived from the audited consolidated financial statements as of that date. Certain financial information that is normally included in annual financial statements, including certain financial statement footnotes, prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), is not required for interim reporting purposes and has been condensed or omitted herein. These financial statements should be read in conjunction with the Company’s financial statements and notes related thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the SEC on March 20, 2015. The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.

Principles of Consolidation - Under ASC Topic 946, the Company is precluded from consolidating any entity other than another investment company or an operating company which provides substantially all of its services to benefit the Company. In accordance therewith, the Company has consolidated the results of its wholly owned subsidiaries in its condensed consolidated financial statements. All intercompany account balances and transactions have been eliminated in consolidation.

2. Significant Accounting Policies (continued)

Use of Estimates - The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements, (ii) the reported amounts of income and expenses during the reporting periods presented and (iii) disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements. Actual results could differ from those estimates.

Cash and Cash Equivalents - Cash and cash equivalents consist of demand deposits, foreign currency, and highly liquid investments with original maturities of three months or less.

Valuation of Investments - The Company measures the value of its investments in accordance with ASC Topic 820, Fair Value Measurements and Disclosure (“ASC Topic 820”), issued by FASB. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Market participants are defined as buyers and sellers in the principal or most advantageous market (which may be a hypothetical market) that are independent, knowledgeable, and willing and able to transact. In accordance with ASC Topic 820, the Company considers its principal market to be the market that has the greatest volume and level of activity.

ASC Topic 820 defines hierarchical levels directly related to the amount of subjectivity associated with the inputs used to determine fair values of assets and liabilities. The hierarchical levels and types of inputs used to measure fair value for each level are described as follows:

Level 1 – Quoted prices are available in active markets for identical investments as of the reporting date. Publicly listed equities and debt securities, publicly listed derivatives, money market/short-term investment funds and foreign currency are generally included in Level 1. The Company does not adjust the quoted price for these investments.

Level 2 – Valuation inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. In certain cases, debt and equity securities are valued on the basis of prices from orderly transactions for similar investments in active markets between market participants and provided by reputable dealers or independent pricing services. In determining the value of a particular investment, independent pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices, market transactions in comparable investments, and various relationships between investments. Investments generally included in this category are corporate bonds and loans, convertible debt indexed to publicly listed securities, foreign currency forward contracts and certain over-the-counter derivatives.

Level 3 – Valuation inputs are unobservable for the investment and include situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require significant judgment or estimation. Investments generally included in this category are TRS agreements, illiquid corporate bonds and loans, common and preferred stock investments, and equity options that lack observable market pricing.

In certain cases, the inputs used to measure fair value may fall within different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Depending on the relative liquidity in the markets for certain investments, the Company may transfer assets to Level 3 if it determines that observable quoted prices, obtained directly or indirectly, are not available or reliable. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and the consideration of factors specific to the investment.

Investments for which market quotations are readily available are valued using market quotations, which are generally obtained from independent pricing services, broker-dealers or market makers. With respect to the Company’s portfolio investments for which market quotations are not readily available, the Company’s board of directors is responsible for determining in good faith the fair value of the Company’s portfolio investments in accordance with the valuation policy and procedures approved by the board of directors, based on, among other things, the input of the Company’s Advisors and management, its audit committee, and independent third-party valuation firms.

The Company and the board of directors conduct its fair value determination process on a quarterly basis and any other time when a decision regarding the fair value of the portfolio investments is required. A determination of fair value involves subjective judgments and estimates. Due to the inherent uncertainty of determining the fair value of portfolio investments that do not have a readily available market value, the fair value of the investments may differ significantly from the values that would have been determined had a readily available market value existed for such investments, and the differences could be material. Further, such investments are generally less liquid than publicly traded securities. If the Company was required to liquidate a portfolio investment that does not have a readily available market value in a forced or liquidation sale, the Company could realize significantly less than the value recorded by the Company.

2. Significant Accounting Policies (continued)

The Company and its Advisors undertake a multi-step valuation process each quarter for determining the fair value of the Company’s investments whose market prices are not readily available, as described below:

•

Each portfolio company or investment is initially valued by KKR (internal valuation) and/or the Company’s independent third party valuation firm (external valuation), which provides a valuation range.

•

Valuation recommendations are formulated and documented by KKR and reviewed by KKR’s valuation committee. The KKR valuation committee then provides its valuation recommendation for each portfolio investment, along with supporting documentation, to CNL and the Company.

•

After the Company’s management has substantially completed its review, it forwards the valuation recommendations and supporting documentation for audit committee review.

•

The Company’s board of directors then discusses the investment valuation recommendations with the Advisors and management and, based on those discussions and the related review process conducted by the Company’s audit committee, determines the fair value of the investments in good faith.

The valuation techniques used by the Company for the assets and liabilities that are classified as Level 3 in the fair value hierarchy are described below.

Senior Debt and Subordinated Debt: Senior debt and subordinated debt investments are valued at initial transaction price and are subsequently valued using (i) market data for similar instruments (e.g., recent transactions or indicative broker quotes), (ii) comparisons to benchmark derivative indices or (iii) valuation models. Valuation models are generally based on yield analysis and discounted cash flow techniques, where the key inputs are based on relative value analyses and the assignment of risk-adjusted discounted rates, based on the analysis of similar instruments from similar issuers. In addition, an illiquidity discount is applied where appropriate.

Equity/Other Investments: Equity/other investments are valued at initial transaction price and are subsequently valued using valuation models in the absence of readily observable market prices. Valuation models are generally based on (i) market and income (discounted cash flow) approaches, in which various internal and external factors are considered, and (ii) earnings before interest, taxes, depreciation and amortization (“EBITDA”) valuation multiples analysis. Factors include key financial inputs and recent public and private transactions for comparable investments. Key inputs used for the discounted cash flow approach include the weighted average cost of capital and assumed inputs used to calculate terminal values, such as EBITDA exit multiples. The fair value for a particular investment will generally be within the value range conclusions derived by the two approaches. Upon completion of the valuations conducted, an illiquidity discount is applied where appropriate.

The Company relies primarily on information provided by managers of private investment funds in valuing the Company’s investments in such funds. The Advisors monitor the valuation methodology used by the asset manager and/or issuer of the private investment fund. Following procedures adopted by the Company’s board of directors, in the absence of specific transaction activity in a particular private investment fund, the Company’s board of directors considers whether it is appropriate, in light of all relevant circumstances, to value the Company’s investment at the net asset value reported by the private investment fund at the time of valuation or to adjust the value to reflect a premium or discount.

Total Return Swaps: The Company values its TRS in accordance with the TRS agreements between its wholly owned subsidiary and the TRS counterparty, which collectively established the TRS. Pursuant to the TRS agreements, the value of the TRS is based on (i) the increase or decrease in the value of the TRS assets relative to the notional amounts, (ii) collected and accrued interest income and fee income related to the TRS assets, (iii) TRS financing costs on the TRS settled notional amounts, and (iv) certain other expenses incurred under the TRS. The TRS assets are valued pursuant to the valuation algorithm specified in the TRS agreements, including reliance on indicative bid prices provided by independent third-party pricing services. Bid prices reflect the highest price that market participants may be willing to pay. On a quarterly basis, the Company’s Advisors review, test and compare (i) the indicative bid prices assigned to each TRS asset by the TRS counterparty with (ii) pricing inputs that are independently sourced by the Company’s management and/or its Advisors from third-party pricing services. Additionally, the Company’s Advisors review the calculations of (i) collected and accrued interest, (ii) TRS financing costs, and (iii) realized gains and losses as included components of the TRS fair value. For additional disclosures on the Company’s TRS, including quantitative disclosures of the current period fair value components, see Note 4. “Derivative Instruments.”

2. Significant Accounting Policies (continued)

The Company utilizes several valuation techniques that use unobservable pricing inputs and assumptions in determining the fair value of its Level 3 investments. The valuation techniques, as well as the key unobservable inputs that have a significant impact on the Company’s Level 3 valuations, are described in Note 5. “Fair Value of Financial Instruments.” The unobservable pricing inputs and assumptions may differ by asset and in the application of the Company’s valuation methodologies. The reported fair value estimates could vary materially if the Company had chosen to incorporate different unobservable pricing inputs and other assumptions.

Security Transactions, Realized/Unrealized Gains or Losses, and Income Recognition - Investments purchased on a secondary basis are recorded on the trade date. Loan originations are recorded on the funding date. The Company measures realized gains or losses from the repayment or sale of investments using the specific identification method. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment without regard to unrealized gains or losses previously recognized, and include investments charged off during the period, net of recoveries. Unrealized gains or losses primarily reflect the change in investment values, including the reversal of previously recorded unrealized gains or losses when gains or losses are realized. The amortized cost basis of investments includes (i) the original cost and (ii) adjustments for the accretion/amortization of market discounts and premiums, original issue discount and loan origination fees. The Company reports changes in fair value of investments as a component of net change in unrealized appreciation (depreciation) on investments in the condensed consolidated statements of operations.

Interest Income - Interest income is recorded on an accrual basis and includes amortization of premiums to par value and accretion of discounts to par value. Discounts and premiums to par value on securities purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. Generally, loan origination, closing, commitment and other fees received by the Company directly or indirectly from borrowers in connection with the closing of investments are accreted over the contractual life of the debt investment as interest income based on the effective interest method. Upon prepayment of a debt investment, any prepayment penalties and unamortized loan fees and discounts are recorded as interest income.

Certain of the Company’s investments in debt securities contain a contractual payment-in-kind (“PIK”) interest provision. The PIK provisions generally feature the obligation or the option at each interest payment date of making interest payments in (i) cash, (ii) additional securities or (iii) a combination of cash and additional securities. PIK interest, computed at the contractual rate specified in the investment’s credit agreement, is accrued as interest income and recorded as interest receivable up to the interest payment date. On the interest payment dates, the Company will capitalize the accrued interest receivable attributable to PIK as additional principal due from the borrower. When additional PIK securities are received on the interest payment date, they typically have the same terms, including maturity dates and interest rates as the original securities issued. PIK interest generally becomes due at maturity of the investment or upon the investment being called by the issuer.

If the portfolio company valuation indicates the value of the PIK investment is not sufficient to cover the contractual PIK interest, the Company will not accrue additional PIK interest income and will record an allowance for any accrued PIK interest receivable as a reduction of interest income in the period the Company determines it is not collectible.

Debt securities are placed on nonaccrual status when principal or interest payments are at least 90 days past due or when there is reasonable doubt that principal or interest will be collected. Generally, accrued interest is reversed against interest income when a debt security is placed on nonaccrual status. Interest payments received on debt securities on nonaccrual status may be recognized as interest income or applied to principal based on management’s judgment. Debt securities on nonaccrual status are restored to accrual status when past due principal and interest are paid and, in management’s judgment, such investments are likely to remain current on interest payment obligations. The Company may make exceptions to this treatment if the debt security has sufficient collateral value and is in the process of collection.

Fee Income - In its role as the Company’s investment sub-advisor, KKR or its affiliates may provide financial advisory services to portfolio companies and in return may receive fees for capital structuring services. KKR is obligated to remit to the Company any earned capital structuring fees based on the pro rata portion of the Company’s investment in co-investment transactions and originated investments. These fees are generally nonrecurring and are recognized as fee income by the Company upon the investment closing date.

The Company may also receive fees for commitments, amendments and other services rendered to portfolio companies. Such fees are recognized as fee income when earned or the services are rendered.

Dividend Income - Dividend income on preferred equity securities is recorded as dividend income on an accrual basis to the extent such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies. Each distribution received from limited liability company (“LLC”) and limited partnership (“LP”) investments are evaluated to determine if

2. Significant Accounting Policies (continued)

the distribution should be recorded as dividend income or a return of capital. Generally, the Company will not record distributions from equity investments in LLCs and LPs as dividend income unless there are sufficient accumulated tax-basis earnings and profits in the LLC or LP prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment.

Derivative Instruments - The Company’s derivative instruments include foreign currency forward contracts and the TRS. The Company recognizes all derivative instruments as assets or liabilities at fair value in its condensed consolidated financial statements. Derivative contracts entered into by the Company are not designated as hedging instruments, and as a result, the Company presents changes in fair value through net change in unrealized appreciation (depreciation) on derivative instruments in the condensed consolidated statements of operations. TRS unrealized appreciation (depreciation) is composed of accrued interest income, net of accrued TRS financing charges owed, and the overall change in fair value of the TRS assets. Realized gains and losses that occur upon the cash settlement of the derivative instruments are included in net realized gains (losses) on derivative instruments in the condensed consolidated statements of operations. TRS realized gains and losses are composed of realized gains or losses on the TRS assets and the net interest and fees received or paid on the quarterly TRS settlement date.

Deferred Financing Costs - Financing costs, including upfront fees, commitment fees and legal fees related to the Company’s credit facilities, term loan and the TRS are deferred and amortized over the life of the related financing instrument using either the effective interest method or straight-line method. Unamortized deferred financing costs are included in prepaid and other deferred expenses in the condensed consolidated statements of assets and liabilities. The amortization of deferred financing costs is included in interest expense in the condensed consolidated statements of operations.

Paid-In Capital - The Company records the proceeds from the sale of its common stock on a net basis to (i) capital stock and (ii) paid-in capital in excess of par value, excluding selling commissions and marketing support fees.

Foreign Currency Translation, Transactions and Gains/Losses - Foreign currency amounts are translated into U.S. dollars on the following basis: (i) at the exchange rate on the last business day of the reporting period for the fair value of investment securities, other assets and liabilities; and (ii) at the prevailing exchange rate on the respective recording dates for the purchase and sale of investment securities, income, expenses, gains and losses.

Net assets and fair values are presented based on the applicable foreign exchange rates described above and the Company does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in fair values of investments held; therefore, fluctuations related to foreign exchange rate conversions are included with the net realized gains (losses) and unrealized appreciation (depreciation) on investments.

Net realized gains or losses on foreign currency transactions arise from sales of foreign currency, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded by the Company and the U.S. dollar equivalent of the amounts actually received or paid by the Company.

Unrealized appreciation (depreciation) from foreign currency translation for foreign currency forward contracts is included in net change in unrealized appreciation (depreciation) in derivative instruments in the condensed consolidated statements of operations and is included with unrealized appreciation (depreciation) on derivative instruments in the condensed consolidated statements of assets and liabilities. Unrealized appreciation (depreciation) from foreign currency translation for other receivables or payables is presented as net change in unrealized appreciation (depreciation) in foreign currency translation in the condensed consolidated statements of operations.

Management Fees - The Company incurs a base management fee (recorded as investment advisory fees) and performance-based incentive fees, including (i) a subordinated incentive fee on income and (ii) an incentive fee on capital gains, due to its Advisors pursuant to an investment advisory agreement described in Note 6. “Related Party Transactions.” The two components of performance-based incentive fees are combined and expensed in the condensed consolidated statements of operations and accrued in the condensed consolidated statements of assets and liabilities as accrued performance-based incentive fees. Pursuant to the terms of the investment advisory agreement, the incentive fee on capital gains is determined and payable in arrears as of the end of each calendar year (or upon termination of the investment advisory agreement) based on the Company’s realized capital gains on a cumulative basis from inception, net of all realized capital losses on a cumulative basis and unrealized depreciation at year end, less the aggregate amount of any previously paid capital gains incentive fees. Although the terms of the investment advisory agreement do not provide for the inclusion of unrealized gains in the calculation of the incentive fee on capital gains, pursuant to an interpretation of an American Institute of Certified Public Accountants Technical Practice Aid for investment companies, the Company includes unrealized gains in the calculation of the incentive fee on capital gains expense and related accrued incentive fee on capital gains. This

2.	Significant Accounting Policies (continued)

accrual reflects the incentive fees that would be payable to the Advisors if the Company’s entire portfolio was liquidated at its fair value as of the balance sheet date even though the Advisors are not entitled to an incentive fee with respect to unrealized gains unless and until such gains are actually realized.

Offering Expenses - Offering expenses incurred in connection with the Company’s Offerings, including reimbursement payments to the Advisors, but excluding selling commissions and marketing support fees, are accumulated monthly and capitalized as deferred offering expenses and then subsequently expensed over a 12-month period.

The Company records expenses related to its Shelf Registration Statement as prepaid assets. These expenses will be charged as a reduction of capital upon utilization, in accordance with ASC 946, Financial Services - Investment Companies. Such expenses relating to issuances of debt securities by the Company will be capitalized as deferred financing costs and amortized over the term of the related debt using the effective interest or straight line method, as applicable.

Earnings per Share - Earnings per share is calculated based upon the weighted average number of shares of common stock outstanding during the reporting period.

Distributions - Weekly distributions are generally declared by the Company’s board of directors and recognized as a liability on the applicable record date. Distributions are paid monthly. The Company has adopted a distribution reinvestment plan that provides for reinvestment of distributions on behalf of shareholders. Shareholders who have elected to participate in the distribution reinvestment plan will have their cash distribution automatically reinvested in additional shares of common stock at a price per share equivalent to the then current public offering price, net of selling commissions and marketing support fees.

Federal Income Taxes - The Company has elected to be treated for federal income tax purposes, and intends to maintain its qualification, as a RIC under Subchapter M of the Code. Generally, a RIC is not subject to federal income taxes on distributed income and gains if it distributes at least 90% of its “Investment Company Taxable Income,” as defined in the Code. The Company intends to distribute sufficient dividends to maintain its RIC status each year and it does not anticipate paying a material level of federal income taxes.

The Company is generally subject to nondeductible federal excise taxes if it does not distribute to its shareholders an amount at least equal to the sum of (i) 98% of its net ordinary income for the calendar year, (ii) 98.2% of its capital gains in excess of capital losses for the one-year period generally ending on October 31 of the calendar year and (iii) any ordinary income and net capital gains for preceding years that were not distributed during such years and on which the Company paid no federal income tax. The Company may, at its discretion, pay a 4% nondeductible federal excise tax on under-distribution of capital gains and taxable income.

The Taxable Subsidiaries hold certain of the Company’s portfolio investments. The Taxable Subsidiaries are consolidated for GAAP reporting purposes, and the portfolio investments held by such entities are included in the condensed consolidated financial statements. The Taxable Subsidiaries may generate income tax expense, or benefit, and related tax assets and liabilities. As a result, any such income tax expense, or benefit and the related tax assets and liabilities are recorded in the Company’s condensed consolidated financial statements. Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, using statutory tax rates in effect for the year in which the temporary differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Similarly, certain foreign investments might incur foreign income taxes and have deferred tax assets and liabilities.

The Company recognizes in its condensed consolidated financial statements the effect of a tax position when it is deemed more likely than not, based on the technical merits, that the position will be sustained upon examination. Tax benefits of positions not deemed to meet the more-likely-than-not threshold are recorded as a tax expense in the current year. The Company did not have any uncertain tax positions that met the recognition or measurement criteria of ASC 740-10-25, Income Taxes – Overall – Recognition, nor did it have any unrecognized tax benefits for the periods presented herein. Although the Company and the Taxable Subsidiaries file federal and state tax returns, their major tax jurisdiction is federal.

Permanent book and tax basis differences are reclassified among the Company’s capital accounts, as appropriate. Additionally, the tax character of distributions is determined in accordance with the Code which differs from GAAP.

Reclassifications - Certain prior year amounts in the condensed consolidated financial statements have been reclassified to conform to the current period presentation.

2. Significant Accounting Policies (continued)

Recent Accounting Pronouncements - In February 2015, the FASB issued Accounting Standard Update (“ASU”) 2015-02, “Amendments to the Consolidation Analysis,” which requires amendments to both the variable interest entity (“VIE”) and voting models. The amendments (i) modify the identification of variable interests (fees paid to a decision maker or service provider), the VIE characteristics for a limited partnership or similar entity and primary beneficiary determination under the VIE model, and (ii) eliminate the presumption within the current voting model that a general partner controls a limited partnership or similar entity. The new guidance is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2015 with early adoption permitted. The amendments may be applied using either a modified retrospective or full retrospective approach. The Company is currently evaluating the effect the guidance will have on its consolidated financial position, results of operations and cash flows.

In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs,” which requires that loan costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts or premiums. The new guidance is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2015 with early adoption permitted. The ASU is to be applied retrospectively for each period presented. Upon adoption, an entity is required to comply with the applicable disclosures for a change in an accounting principle. The Company is currently evaluating the effect the amendments will have on its consolidated financial position, results of operations and cash flows.

3. Investments

The Company is engaged in a strategy to invest primarily in the debt of privately owned and thinly traded U.S. companies. The primary investment concentrations include (i) senior debt securities and (ii) subordinated debt securities. The Company’s investments may, in some cases, be accompanied by warrants, options or other forms of equity participation. The Company may separately purchase common or preferred equity interests or limited partnership interests. The Company may also invest in structured products, such as collateralized loan obligations. The fair value of the Company’s investments will generally fluctuate with, among other things, changes in prevailing interest rates, the general supply of, and demand for, debt capital among private and public companies, general domestic and global economic conditions, the condition of certain financial markets, developments or trends in any particular industry and changes in the financial condition and credit quality of each security’s issuer.

As of June 30, 2015 and December 31, 2014, the Company’s investment portfolio consisted of the following (in thousands):


	As of June 30, 2015
Asset Category	Amortized Cost		Fair Value		Percentage of Investment Portfolio		Percentage of Net Assets
Senior debt
Senior secured loans – first lien	$	1,418,667	$	1,376,839		42.4%		55.9%
Senior secured loans – second lien		935,632		927,743		28.6		37.7
Senior secured bonds		221,592		210,834		6.5		8.5

Total senior debt		2,575,891		2,515,416		77.5		102.1
Subordinated debt		416,973		387,886		11.9		15.7
Structured products		85,721		92,596		2.9		3.8
Equity/Other		263,382		250,108		7.7		10.2

Subtotal		3,341,967		3,246,006		100.0%		131.8%

Short-term investments		31,922		31,922				1.3

Total investments	$	3,373,889	$	3,277,928				133.1%


	As of December 31, 2014
Asset Category	Amortized Cost		Fair Value		Percentage of Investment Portfolio		Percentage of Net Assets
Senior debt
Senior secured loans – first lien	$	1,152,555	$	1,128,244		41.5%		52.6%
Senior secured loans – second lien		858,829		843,957		31.0		39.3
Senior secured bonds		154,125		147,817		5.4		6.9

Total senior debt		2,165,509		2,120,018		77.9		98.8
Subordinated debt		459,004		433,755		16.0		20.2
Structured products		33,721		36,421		1.3		1.7
Equity/Other		129,658		130,377		4.8		6.1

Subtotal		2,787,892		2,720,571		100.0%		126.8%

Short-term investments		629		629				—

Total investments	$	2,788,521	$	2,721,200				126.8%

3. Investments (continued)

As of June 30, 2015, debt investments on nonaccrual status represented 1.3% and 0.9% of total investments on an amortized cost basis and fair value basis, respectively. As of December 31, 2014, debt investments on nonaccrual status represented 1.0% and 0.4% of total investments on an amortized cost basis and fair value basis, respectively.

The industry composition, geographic dispersion, and local currencies of the Company’s investment portfolio as a percentage of total fair value of the Company’s investments, excluding short-term investments and derivative instruments, as of June 30, 2015 and December 31, 2014 were as follows:


Industry Composition	June 30, 2015		December 31, 2014
Software & Services		14.1%		14.5%
Consumer Durables & Apparel		12.1		16.8
Capital Goods		9.4		8.3
Energy		6.9		8.3
Diversified Financials		6.8		5.1
Retailing		6.3		8.0
Technology Hardware & Equipment		6.2		6.7
Commercial & Professional Services		5.7		2.2
Health Care Equipment & Services		4.7		6.9
Materials		4.0		3.5
Automobiles & Components		3.7		4.3
Food & Staples Retailing		3.5		2.7
Telecommunication Services		3.1		3.0
Media		2.8		1.6
Transportation		2.5		2.3
Food, Beverage & Tobacco		2.1		1.4
Pharmaceutical, Biotechnology & Life science		1.9		-
Real Estate		1.8		-
Consumer Services		1.2		1.8
Remaining Industries		1.2		2.6

Total		100.0%		100.0%

Geographic Dispersion ⁽¹⁾
United States		78.0%		77.3%
Luxembourg		4.5		3.7
United Kingdom		3.5		3.8
Sweden		3.4		4.5
Ireland		2.9		2.0
Singapore		2.4		2.7
Netherlands		1.4		1.7
Cayman Islands		1.1		1.1
British Virgin Islands		1.1		1.0
Remaining Countries		1.7		2.2

Total		100.0%		100.0%

Local Currency
U.S. Dollar		85.6%		84.0%
Euro		9.0		11.0
British Pound Sterling		4.5		3.5
Australian Dollar		0.7		1.1
Swedish Krona		0.2		0.4

Total		100.0%		100.0%

⁽¹⁾	The geographic dispersion is determined by the portfolio company’s country of domicile or the jurisdiction of the security’s issuer.

4. Derivative Instruments

The following is a summary of the fair value and location of the Company’s derivative instruments in the condensed consolidated statements of assets and liabilities held as of June 30, 2015 and December 31, 2014 (in thousands):


		Fair Value
Derivative Instrument	Statement Location	June 30, 2015		December 31, 2014
Foreign currency forward contracts	Unrealized appreciation on derivative instruments	$	45,261	$	40,903
Foreign currency forward contracts	Unrealized depreciation on derivative instruments		(2,859)		(458)
TRS	Unrealized appreciation (depreciation) on derivative instruments		1,189		(3,445)

Total		$	43,591	$	37,000

Realized and unrealized gains and losses on derivative instruments recorded by the Company for the three and six months ended June 30, 2015 and 2014 are in the following locations in the condensed consolidated statements of operations (in thousands):


		Realized Gains (Losses)
		Three Months Ended June 30,				Six Months Ended June 30,
Derivative Instrument	Statement Location	2015		2014		2015		2014
Foreign currency forward contracts	Net realized gains (losses) on derivative instruments	$	95	$	(1,119)	$	24,060	$	(3,172)
TRS	Net realized gains on derivative instruments		3,090		532		5,513		2,394

Total		$	3,185	$	(587)	$	29,573	$	(778)


		Unrealized Gains (Losses)
		Three Months Ended June 30,				Six Months Ended June 30,
Derivative Instrument	Statement Location	2015		2014		2015		2014
Foreign currency forward contracts	Net change in unrealized appreciation (depreciation) on derivative instruments	$	(17,019)	$	(2,850)	$	1,957	$	(1,931)
TRS	Net change in unrealized appreciation (depreciation) on derivative instruments		(975)		(278)		4,634		(1,370)

Total		$	(17,994)	$	(3,128)	$	6,591	$	(3,301)

Offsetting of Derivative Instruments

The Company has derivative instruments that are subject to master netting agreements. These agreements include provisions to offset positions with the same counterparty in the event of default by one of the parties. The Company’s unrealized appreciation and depreciation on derivative instruments are reported as gross assets and liabilities, respectively, in the condensed consolidated statements of assets and liabilities. The following tables present the Company’s assets and liabilities related to derivatives by counterparty, net of amounts available for offset under a master netting arrangement and net of any collateral received or pledged by the Company for such assets and liabilities as of June 30, 2015.


Counterparty	Derivative Assets Subject to Master Netting Agreement		Derivatives Available for Offset		Non-cash Collateral Received ⁽¹⁾		Cash Collateral Received ⁽¹⁾		Net Amount of Derivative Assets ⁽²⁾
Bank of Nova Scotia	$	1,189	$	—	$	—	$	—	$	1,189
J.P. Morgan Chase Bank		25,638		—		—		—		25,638
State Street Bank and Trust		19,623		—		—		—		19,623

Total	$	46,450	$	—	$	—	$	—	$	46,450

4. Derivative Instruments (continued)


Counterparty	Derivative Liabilities Subject to Master Netting Agreement		Derivatives Available for Offset		Non-cash Collateral Pledged ⁽¹⁾		Cash Collateral Pledged ⁽¹⁾		Net Amount of Derivative Liabilities ⁽³⁾
Bank of Nova Scotia	$	—	$	—	$	—	$	—	$	—
J.P. Morgan Chase Bank		487		—		—		—		487
State Street Bank and Trust		2,372		—		—		—		2,372

Total	$	2,859	$	—	$	—	$	—	$	2,859

(1)	In some instances, the actual amount of the collateral received and/or pledged may be more than the amount shown due to overcollateralization.

(2)	Net amount of derivative assets represents the net amount due from the counterparty to the Company in the event of default.

(3)	Net amount of derivative liabilities represents the net amount due from the Company to the counterparty in the event of default.

Foreign Currency Forward Contracts:

The Company may enter into foreign currency forward contracts from time to time to facilitate settlement of purchases and sales of investments denominated in foreign currencies and to economically hedge the impact that an adverse change in foreign exchange rates would have on the value of the Company’s investments denominated in foreign currencies. A foreign currency forward contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. These contracts are marked-to-market by recognizing the difference between the contract forward exchange rate and the forward market exchange rate on the last day of the period presented as unrealized appreciation or depreciation. Realized gains or losses are recognized when forward contracts are settled. Risks arise as a result of the potential inability of the counterparties to meet the terms of their contracts; the Company attempts to limit counterparty risk by only dealing with well-known counterparties. The foreign currency forward contracts open at the end of the period are generally indicative of the volume of activity during the period.

As of June 30, 2015, the net contractual notional balance of the Company’s foreign currency forward contracts totaled $555.36 million, all of which related to hedging of the Company’s foreign currency denominated debt investments. The table below displays the Company’s foreign currency denominated debt investments and foreign currency forward contracts, summarized by foreign currency type.


	Debt Investments Denominated in Foreign Currencies As of June 30, 2015						Foreign Currency Forward Contracts As of June 30, 2015
(in thousands)	Par Value in Local Currency		Par Value in US$		Fair Value		Amount in Local Currency		US$ Value at Settlement Date
Euros	€	289,481	$	322,728	$	282,572	€	301,110	$	375,224
British Pound Sterling	£	86,206		135,451		135,667	£	93,625		147,101
Australian Dollars	A$	31,021		23,934		22,260	A$	36,489		33,032

Total			$	482,113	$	440,499			$	555,357

4. Derivative Instruments (continued)

As of June 30, 2015 and December 31, 2014, the Company’s open foreign currency forward contracts were as follows (in thousands):


June 30, 2015
Foreign Currency	Settlement Date	Counterparty	Amount and Transaction		US$ Value at Settlement Date			US$ Value at June 30, 2015			Unrealized Appreciation (Depreciation)
AUD	Oct 9, 2015	State Street Bank and Trust	A$	36,489 Sold	$	33,032		$	28,004		$	5,028
EUR	Jul 9, 2015	State Street Bank and Trust	€	38,125 Sold		45,514			42,508			3,006
EUR	Oct 9, 2015	State Street Bank and Trust	€	61,278 Sold		78,369			68,413			9,956
EUR	Jan 11, 2016	J.P. Morgan Chase Bank	€	5,400 Sold		7,412			6,039			1,373
EUR	Jan 11, 2016	J.P. Morgan Chase Bank	€	61,000 Sold		83,436			68,222			15,214
EUR	Jul 7, 2016	State Street Bank and Trust	€	19,850 Sold		23,909			22,306			1,603
EUR	Oct 13, 2016	J.P. Morgan Chase Bank	€	8,793 Sold		9,917			9,922			(5)
EUR	Oct 13, 2016	J.P. Morgan Chase Bank	€	33,264 Sold		37,747			37,532			215
EUR	Jan 12, 2017	J.P. Morgan Chase Bank	€	29,900 Sold		36,224			33,865			2,359
EUR	Jan 12, 2017	J.P. Morgan Chase Bank	€	43,500 Sold		52,696			49,269			3,427
GBP	Oct 9, 2015	State Street Bank and Trust	£	8,500 Sold		12,879			13,346			(467)
GBP	Jan 12, 2017	State Street Bank and Trust	£	29,860 Sold		45,288			46,836			(1,548)
GBP	Jan 12, 2017	State Street Bank and Trust	£	735 Bought		(1,122	)		(1,152	)		30
GBP	Apr 7, 2017	J.P. Morgan Chase Bank	£	45,700 Sold		74,738			71,688			3,050
GBP	Apr 7, 2017	J.P. Morgan Chase Bank	£	6,100 Sold		9,087			9,569			(482)
GBP	Apr 7, 2017	State Street Bank and Trust	£	4,200 Sold		6,231			6,588			(357)

Total					$	555,357		$	512,955		$	42,402


December 31, 2014
Foreign Currency	Settlement Date	Counterparty	Amount and Transaction		US$ Value at Settlement Date			US$ Value at December 31, 2014			Unrealized Appreciation (Depreciation)
AUD	Oct 9, 2015	State Street Bank and Trust	A$	36,489 Sold	$	33,032		$	29,251		$	3,781
EUR	Jan 8, 2015	State Street Bank and Trust	€	17,000 Sold		22,919			20,572			2,347
EUR	Jan 8, 2015	State Street Bank and Trust	€	43,500 Sold		59,608			52,639			6,969
EUR	Jan 8, 2015	State Street Bank and Trust	€	16,903 Sold		22,845			20,455			2,390
EUR	Jan 8, 2015	State Street Bank and Trust	€	1,153 Sold		1,559			1,396			163
EUR	Jan 8, 2015	State Street Bank and Trust	€	16,000 Sold		22,235			19,361			2,874
EUR	Jan 8, 2015	State Street Bank and Trust	€	11,100 Sold		15,114			13,432			1,682
EUR	Jan 8, 2015	State Street Bank and Trust	€	11,100 Sold		15,112			13,432			1,680
EUR	Jan 8, 2015	State Street Bank and Trust	€	3,650 Bought		(4,875	)		(4,417	)		(458)
EUR	Jan 8, 2015	State Street Bank and Trust	€	4,053 Sold		5,237			4,905			332
EUR	Jan 8, 2015	State Street Bank and Trust	€	3,575 Sold		4,517			4,326			191
EUR	Jan 8, 2015	State Street Bank and Trust	€	3,205 Sold		3,983			3,878			105
EUR	Oct 9, 2015	State Street Bank and Trust	€	61,278 Sold		78,369			74,397			3,972
EUR	Jan 11, 2016	J.P. Morgan Chase Bank	€	5,400 Sold		7,413			6,571			842
EUR	Jan 11, 2016	J.P. Morgan Chase Bank	€	61,000 Sold		83,436			74,228			9,208
GBP	Jan 8, 2015	State Street Bank and Trust	£	22,000 Sold		35,388			34,288			1,100
GBP	Apr 7, 2017	J.P. Morgan Chase Bank	£	45,700 Sold		74,737			71,470			3,267

Total					$	480,629		$	440,184		$	40,445

4. Derivative Instruments (continued)

Equity Options and Warrants:

The Company holds equity options and warrants in certain portfolio companies in an effort to achieve additional investment returns. In purchasing equity options and warrants, the Company bears the risk of an unfavorable change in the value of the underlying equity interests. Equity options and warrants are recorded as investments at fair value in the condensed consolidated statements of assets and liabilities. The aggregate fair value of equity options and warrants included in investments at fair value in the Company’s condensed consolidated statements of assets and liabilities as of June 30, 2015 and December 31, 2014 represented 0.4% and 1.2%, respectively, of the Company’s net assets.

Below is a summary of the Company’s investments in equity options and warrants as of June 30, 2015 (in thousands, except share amounts):


Company	Expiration Date	No. Shares		Cost		Fair Value
Education Management Corp., Warrants	1/5/2022		2,320,791	$	371	$	60
Gruppo Argenta S.p.A., Warrants	(1)		225,289		5,342		2,573
Hilding Anders, Equity Options	12/31/2020		236,160,807		14,988		7,265
Home Partners of America, Inc., Warrant Delivery Rights	(1)		792		13		15
Home Partners of America, Inc., Warrants	8/7/2024		1,962		214		239
Keystone Australia Holdings, Pty. Ltd., Warrants	(1)		1,588,469		1,019		309

Total				$	21,947	$	10,461

(1)	Expiration date contingent on certain events pursuant to underlying agreements.

The Company may enter into other derivative instruments and incur other exposures with other counterparties in the future. The derivative instruments held as of June 30, 2015 and December 31, 2014 generally reflect the volume of derivative activity throughout the periods presented.

Total Return Swaps:

On November 15, 2012, Halifax Funding entered into the TRS with the Bank of Nova Scotia (“BNS” or the “Counterparty”). The TRS arrangement with BNS consists of a set of TRS agreements. Pursuant to the TRS agreements, Halifax Funding may select a portfolio of single-name corporate loans and/or bonds (each, a “TRS asset” and together, the “TRS assets”) with a maximum aggregate notional amount of $500 million. Under the terms of the TRS agreements, each TRS asset included in the TRS portfolio constitutes a separate total return swap transaction, although all calculations, payments and transfers required to be made under the TRS agreements are calculated and treated on an aggregate basis, based upon all such transactions.

Halifax Funding receives quarterly from BNS (i) all collected interest and fees generated by the TRS assets and (ii) realized gains from the sale or principal payments/paydowns of TRS assets, if any. Halifax Funding pays to BNS (i) a financing charge on the TRS settled notional amount at a rate equal to the three-month LIBOR plus 0.80% per annum if the initial investment amount (i.e. posted collateral) equals or exceeds 50% of the TRS trade basis notional amount, or three-month LIBOR plus 1.00% if the initial investment amount is less than 50% of the TRS trade basis notional amount and (ii) realized losses, if any, related to the TRS assets. In addition, upon the termination of the TRS arrangement, Halifax Funding will either receive from BNS any net realized gain, or pay to BNS any net realized loss, on the liquidation of TRS assets.

Halifax Funding posts collateral in the form of certificates of deposit held by a custodian. Generally, the required collateral amount is at least 40% of the notional amount of each TRS asset at the time that such TRS asset is confirmed for acquisition by the Counterparty. Halifax Funding may be required to post additional collateral in the event the value of the TRS assets decreases below a specified amount. Halifax Funding is required to post additional collateral to ensure that the collateral’s market value, as solely determined by BNS, is at least equal to 25% of the value of the TRS portfolio.

4.	Derivative Instruments (continued)

The obligations of Halifax Funding under the TRS agreements are nonrecourse to the Company and the Company’s exposure to the TRS is limited to its equity in Halifax Funding, which is generally equal to the collateral posted by Halifax Funding. The Company has no contractual obligation to post any collateral or to pay any financing charges to BNS. The Company may, but is not obligated to, increase its equity investment in Halifax Funding for the purpose of funding additional collateral or payment obligations for which Halifax Funding may become obligated during the term of the TRS agreements. If the Company does not make any such additional equity investment in Halifax Funding and Halifax Funding fails to meet its obligations under the TRS agreements, then BNS will have the right to terminate the TRS agreements and use the collateral posted by Halifax Funding with the custodian to offset any amount owed to BNS. Halifax Funding may terminate the TRS agreements at any time upon providing at least 30 days’ notice prior to the proposed settlement date of the TRS assets related to such termination. In the absence of an early termination, the TRS will terminate on January 15, 2016. In the event of an early termination of the TRS, Halifax Funding may be required to pay a make-whole fee based on a minimum spread amount to be earned by BNS over the life of the TRS agreements. Halifax Funding would have been required to pay an early termination fee of $3.61 million if the TRS had been terminated as of June 30, 2015.

As of June 30, 2015 and December 31, 2014, Halifax Funding had selected 63 and 49 underlying debt positions, respectively, and had posted $162.64 million and $115.70 million, respectively, in collateral, which are recorded as collateral on deposit with custodian in the condensed consolidated statements of assets and liabilities. The following table reconciles the TRS settled notional amount, upon which the financing charge to BNS is based, to the total, or trade basis, notional amount as of June 30, 2015 and December 31, 2014 (in thousands).


	June 30, 2015			December 31, 2014
Settled notional amount	$	382,161		$	277,375
Unsettled additions		14,815			10,366
Unsettled deletions		(4,816	)		—

Total notional amount	$	392,160		$	287,741


The following table summarizes the fair value components of the TRS portfolio (in thousands):

	June 30, 2015			December 31, 2014
Interest and fee income	$	5,122		$	3,545
Financing charge		(761	)		(513	)
Net realized gains (losses)		105			(26	)
Net unrealized depreciation of TRS assets		(3,277	)		(6,451	)

TRS total fair value	$	1,189		$	(3,445	)

The following table summarizes the components of the net realized gains on derivative instruments relating to the TRS (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Interest and fee income	$	3,905	$	750	$	7,156	$	2,432
Financing charge		(909)		(93)		(1,708)		(245)
Net realized gains (losses)		94		(125)		65		207

Net realized gains on derivative instruments related to the TRS	$	3,090	$	532	$	5,513	$	2,394

4.	Derivative Instruments (continued)

The following is a summary of the TRS assets as of June 30, 2015 (in thousands):


Company (a)	Industry	Interest Rate	LIBOR Floor	Maturity Date	Notional Amount		Fair Value		Unrealized Appreciation (Depreciation)
Senior Secured Loans - First Lien
ABILITY Network, Inc.	Health Care Equipment & Services	L + 500	1.00%	5/14/2021	$	6,833	$	6,851	$	18
Acosta Holdco, Inc.	Commercial & Professional Services	L + 325	1.00%	9/26/2021		4,271		4,253		(18	)
Apex Tool Group, LLC	Consumer Durables & Apparel	L + 325	1.25%	1/31/2020		2,635		2,587		(48	)
Applied Systems, Inc.	Software & Services	L + 325	1.00%	1/25/2021		10,818		10,849		31
Aspen Dental Management, Inc.	Health Care Equipment & Services	L + 450	1.00%	4/29/2022		6,200		6,242		42
AssuredPartners, Inc.	Insurance	L + 400	1.00%	4/2/2021		9,451		9,473		22
BJ’s Wholesale Club, Inc.	Food & Staples Retailing	L + 350	1.00%	9/26/2019		3,959		3,936		(23	)
Caesars Entertainment Operating Co., Inc. (b)(d)	Consumer Services	L + 725	0.00%	3/1/2017		3,745		3,580		(165	)
California Pizza Kitchen, Inc.	Food & Staples Retailing	L + 425	1.00%	3/29/2018		3,773		3,864		91
Catalina Marketing Corp.	Media	L + 350	1.00%	4/9/2021		2,652		2,364		(288	)
Ceridian Corp.	Commercial & Professional Services	L + 350	1.00%	9/15/2020		2,045		2,014		(31	)
CHG Companies, Inc.	Health Care Equipment & Services	L + 325	1.00%	11/19/2019		12,851		12,837		(14	)
CityCenter Holdings, LLC	Real Estate	L + 325	1.00%	10/16/2020		12,762		12,771		9
Coyote Logistics, LLC (c)	Transportation	L + 525	1.00%	3/26/2022		11,939		12,030		91
CPI International, Inc.	Capital Goods	L + 325	1.00%	11/17/2017		4,796		4,715		(81	)
CSM Bakery Products	Food, Beverage & Tobacco	L + 400	1.00%	7/3/2020		4,913		4,962		49
CTI Foods Holding Co., LLC	Food, Beverage & Tobacco	L + 350	1.00%	6/29/2020		3,967		3,869		(98	)
Datatel, Inc.	Software & Services	L + 300	1.00%	7/19/2018		3,508		3,489		(19	)
Distribution International, Inc.	Retailing	L + 500	1.00%	12/10/2021		4,925		4,915		(10	)
DJO Finance, LLC	Health Care Equipment & Services	L + 325	1.00%	6/8/2020		8,846		8,776		(70	)
Emerald Expositions Holding, Inc.	Media	L + 375	1.00%	6/17/2020		9,990		9,922		(68	)
First American Payment Systems, L.P.	Software & Services	L + 450	1.25%	10/12/2018		2,404		2,372		(32	)
Four Seasons Holdings, Inc. (b)	Consumer Services	L + 275	0.75%	6/27/2020		1,390		1,410		20
Grocery Outlet, Inc.	Food & Staples Retailing	L + 375	1.00%	10/21/2021		5,002		4,916		(86	)
Gymboree Corp.	Retailing	L + 350	1.50%	2/23/2018		2,834		2,232		(602	)
Gypsum Management & Supply, Inc.	Capital Goods	L + 375	1.00%	4/1/2021		8,395		8,096		(299	)
Hanson Building Products North America (b)	Materials	L + 550	1.00%	3/13/2022		11,042		11,291		249
Harbor Freight Tools USA, Inc.	Capital Goods	L + 375	1.00%	7/26/2019		7,873		7,849		(24	)
Hillman Group, Inc.	Consumer Durables & Apparel	L + 350	1.00%	6/30/2021		12,876		12,847		(29	)
HUB International, Ltd.	Insurance	L + 300	1.00%	10/2/2020		14,144		14,290		146
Hyland Software, Inc.	Software & Services	L + 375	1.00%	2/19/2021		6,938		6,911		(27	)
Infor (US), Inc.	Software & Services	L + 275	1.00%	6/3/2020		3,008		2,956		(52	)
Informatica Corp. (b)	Software & Services	L + 350	1.00%	6/3/2022		7,307		7,305		(2	)
iPayment, Inc.	Software & Services	L + 525	1.50%	5/8/2017		7,885		7,877		(8	)
Kronos, Inc.	Software & Services	L + 350	1.00%	10/30/2019		9,863		9,888		25
Learfield Communications, Inc.	Media	L + 350	1.00%	10/9/2020		7,380		7,334		(46	)
Milacron, LLC	Capital Goods	L + 350	1.00%	9/28/2020		1,281		1,278		(3	)
MultiPlan, Inc.	Health Care Equipment & Services	L + 275	1.00%	3/31/2021		8,930		8,865		(65	)
Neiman Marcus Group, LLC	Retailing	L + 325	1.00%	10/25/2020		8,842		8,861		19
OneStopPlus Group	Retailing	L + 375	1.00%	3/18/2021		351		346		(5	)
P2 Energy Solutions, Inc. (b)	Software & Services	L + 400	1.00%	10/30/2020		4,960		4,846		(114	)
Pharmaceutical Product Development, Inc.	Pharmaceuticals, Biotechnology & Life Sciences	L + 300	1.00%	12/5/2018		10,328		10,239		(89	)
RedPrairie Corp.	Software & Services	L + 500	1.00%	12/21/2018		4,863		4,761		(102	)
Reynolds Group Holdings, Inc.	Materials	L + 350	1.00%	12/1/2018		11,507		11,398		(109	)
Riverbed Technology, Inc. (c)	Technology Hardware & Equipment	L + 500	1.00%	4/24/2022		4,963		5,028		65
Savers, Inc.	Retailing	L + 375	1.25%	7/9/2019		8,842		8,321		(521	)
Surgery Center Holdings, Inc.	Health Care Equipment & Services	L + 425	1.00%	11/3/2020		4,987		4,969		(18	)
Talbots, Inc.	Retailing	L + 450	1.00%	3/19/2020		10,187		10,007		(180	)
The TelX Group, Inc.	Telecommunication Services	L + 350	1.00%	4/9/2020		3,972		3,949		(23	)
TIBCO Software, Inc.	Software & Services	L + 550	1.00%	12/4/2020		4,738		4,978		240
Travelport, LLC (b)	Software & Services	L + 475	1.00%	9/2/2021		3,930		3,982		52
Triple Point Technology, Inc.	Software & Services	L + 425	1.00%	7/10/2020		7,008		6,822		(186	)

Total Senior Secured Loans - First Lien						342,909		340,523		(2,386	)

Senior Secured Loans - Second Lien
Applied Systems, Inc.	Applied Systems, Inc.	L + 650	1.00%	1/24/2022		3,845		3,819		(26	)
Gypsum Management & Supply, Inc.	Gypsum Management & Supply, Inc.	L + 675	1.00%	4/1/2022		5,633		5,547		(86	)
Maxim Crane, LP	Maxim Crane, LP	L + 925	1.00%	11/26/2018		9,021		8,824		(197	)
Misys Ltd. (b)	Misys Ltd. (b)	12.00%		6/12/2019		2,898		3,063		165
NEP Group, Inc.	NEP Group, Inc.	L + 875	1.25%	7/22/2020		8,790		8,779		(11	)
RedPrairie Corp.	RedPrairie Corp.	L + 1000	1.25%	12/21/2019		5,550		4,942		(608	)
The TelX Group, Inc.	The TelX Group, Inc.	L + 650	1.00%	4/9/2021		4,844		4,884		40

Total Senior Secured Loans - Second Lien						40,581		39,858		(723	)

Senior Secured Bonds
Artesyn Technologies, Inc.	Technology Hardware & Equipment	9.75%		10/15/2020		3,640		3,483		(157	)
Hot Topic, Inc.	Consumer Durables & Apparel	9.25%		6/15/2021		3,675		3,658		(17	)

Total Senior Secured Bonds						7,315		7,141		(174	)

Subordinated Debt
GCI, Inc.	Telecommunication Services	6.75%		6/1/2021		1,002		1,017		15
Summit Materials, LLC	Materials	10.50%		1/31/2020		353		344		(9	)

Total Subordinated Debt						1,355		1,361		6

TOTAL					$	392,160	$	388,883	$	(3,277	)

(a) Security may be an obligation of one or more entities affiliated with the named company.

(b) The investment is not a qualifying asset as defined in Section 55(a) under the 1940 Act.

(d) Investment was on non-accrual status as of June 30, 2015.

4.	Derivative Instruments (continued)

The following is a summary of the TRS assets as of December 31, 2014 (in thousands):


Company (a)	Industry	Interest Rate			LIBOR Floor			Maturity Date	Notional Amount		Fair Value		Unrealized Appreciation (Depreciation)
Senior Secured Loans - First Lien
ABILITY Network, Inc.	Health Care Equipment & Services		L + 500			1.00	%	5/14/2021	$	6,867	$	6,719	$	(148	)
Applied Systems, Inc. (c)	Software & Services		L + 325			1.00	%	1/25/2021		10,873		10,706		(167	)
AssuredPartners, Inc.	Insurance		L + 350			1.00	%	4/2/2021		9,498		9,408		(90	)
BJ’s Wholesale Club, Inc.	Food & Staples Retailing		L + 350			1.00	%	9/26/2019		3,975		3,880		(95	)
Caesars Entertainment Operating Co., Inc. (b)	Consumer Services		L + 675			0.00	%	3/1/2017		3,745		3,488		(257	)
California Pizza Kitchen, Inc.	Food & Staples Retailing		L + 425			1.00	%	3/29/2018		3,826		3,817		(9	)
Catalina Marketing Corp.	Media		L + 350			1.00	%	4/9/2021		4,002		3,768		(234	)
Ceridian Corp.	Commercial & Professional Services		L + 350			1.00	%	9/15/2020		2,055		2,009		(46	)
CHG Companies, Inc.	Health Care Equipment & Services		L + 325			1.00	%	11/19/2019		12,929		12,694		(235	)
CityCenter Holdings, LLC	Real Estate		L + 325			1.00	%	10/16/2020		12,762		12,639		(123	)
CRC Health Group, Inc.	Health Care Equipment & Services		L + 425			1.00	%	3/29/2021		2,995		2,993		(2	)
CSM Bakery Products	Food, Beverage & Tobacco		L + 400			1.00	%	7/3/2020		4,938		4,875		(63	)
CTI Foods Holding Co., LLC	Food, Beverage & Tobacco		L + 350			1.00	%	6/28/2020		3,988		3,883		(105	)
Emerald Expositions Holding, Inc.	Media		L + 375			1.00	%	6/17/2020		10,407		10,096		(311	)
First American Payment Systems, L.P.	Software & Services		L + 450			1.25	%	10/12/2018		2,404		2,360		(44	)
Four Seasons Holdings, Inc. (b)	Consumer Services		L + 275			0.75	%	6/27/2020		4,919		4,875		(44	)
Gymboree Corp.	Retailing		L + 350			1.50	%	2/23/2018		2,834		2,038		(796	)
Gypsum Management & Supply, Inc.	Capital Goods		L + 375			1.00	%	4/1/2021		8,437		8,174		(263	)
Harbor Freight Tools USA, Inc.	Capital Goods		L + 375			1.00	%	7/26/2019		8,227		8,142		(85	)
Hillman Group, Inc.	Capital Goods		L + 350			1.00	%	6/30/2021		12,941		12,718		(223	)
HUB International, Ltd.	Insurance		L + 325			1.00	%	10/2/2020		14,217		14,037		(180	)
Hyland Software, Inc.	Software & Services		L + 375			1.00	%	2/19/2021		6,973		6,860		(113	)
iPayment, Inc.	Software & Services		L + 525			1.50	%	5/8/2017		7,885		7,767		(118	)
Kronos, Inc. (c)	Software & Services		L + 350			1.00	%	10/30/2019		9,965		9,906		(59	)
Learfield Communications, Inc.	Media		L + 350			1.00	%	10/9/2020		7,417		7,251		(166	)
Neiman Marcus Group, LLC	Retailing		L + 325			1.00	%	10/25/2020		8,886		8,760		(126	)
OneStopPlus Group	Consumer Durables & Apparel		L + 350			1.00	%	3/18/2021		353		344		(9	)
OpenLink Financial, Inc.	Software & Services		L + 500			1.25	%	10/30/2017		822		808		(14	)
P2 Energy Solutions, Inc.	Software & Services		L + 400			1.00	%	10/30/2020		4,985		4,789		(196	)
RedPrairie Corp.	Software & Services		L + 500			1.00	%	12/21/2018		4,888		4,607		(281	)
Savers, Inc. (c)	Retailing		L + 375			1.25	%	7/9/2019		8,877		8,647		(230	)
SGS International, Inc.	Media		L + 325			1.00	%	10/17/2019		4,918		4,835		(83	)
Surgery Center Holdings, Inc.	Health Care Equipment & Services		L + 425			1.00	%	11/3/2020		5,013		4,813		(200	)
The TelX Group, Inc.	Telecommunication Services		L + 350			1.00	%	4/9/2020		3,992		3,858		(134	)
TIBCO Software, Inc. (b)	Software & Services		L + 550			1.00	%	12/4/2020		4,750		4,807		57
Travelport, LLC (b)	Software & Services		L + 500			1.00	%	9/2/2021		3,950		3,989		39
Triple Point Technology, Inc.	Software & Services		L + 425			1.00	%	7/10/2020		4,186		4,123		(63	)
Varsity Brands, Inc. (c)	Consumer Durables & Apparel		L + 500			1.00	%	12/10/2021		4,950		4,965		15
Wilton Brands, LLC	Materials		L + 625			1.25	%	8/30/2018		3,095		3,020		(75	)
Zayo Group, LLC	Telecommunication Services		L + 300			1.00	%	7/2/2019		13,222		13,194		(28	)

Total Senior Secured Loans - First Lien										255,966		250,662		(5,304	)

Senior Secured Loans - Second Lien
CRC Health Group, Inc.	Health Care Equipment & Services		L + 800			1.00	%	9/28/2021		4,010		4,077		67
Maxim Crane, LP	Capital Goods		L + 925			1.00	%	11/26/2018		9,021		8,932		(89	)
Misys Ltd. (b)	Software & Services		12.00	%				6/12/2019		2,898		3,047		149
NEP Group, Inc.	Media		L + 825			1.25	%	7/22/2020		1,323		1,301		(22	)
RedPrairie Corp.	Software & Services		L + 1000			1.25	%	12/21/2019		5,550		4,575		(975	)

Total Senior Secured Loans - Second Lien										22,802		21,932		(870	)

Senior Secured Bonds
Hot Topic, Inc.	Consumer Durables & Apparel		9.25	%				6/15/2021		3,675		3,763		88
Artesyn Technologies, Inc.	Technology Hardware & Equipment		9.75	%				10/15/2020		3,640		3,303		(337	)

Total Senior Secured Bonds										7,315		7,066		(249	)

Subordinated Debt
GCI, Inc.	Telecommunication Services		6.75	%				6/1/2021		1,002		981		(21	)
Summit Materials, LLC	Materials		10.50	%				1/31/2020		656		649		(7	)

Total Subordinated Debt										1,658		1,630		(28	)

TOTAL									$	287,741	$	281,290	$	(6,451	)

(a) Security may be an obligation of one or more entities affiliated with the named company.

(b) The investment is not a qualifying asset as defined in Section 55(a) under the 1940 Act.

5.	Fair Value of Financial Instruments

The Company’s investments were categorized in the fair value hierarchy described in Note 2. “Significant Accounting Policies,” as follows as of June 30, 2015 and December 31, 2014 (in thousands):


	June 30, 2015
Description	Level 1		Level 2		Level 3		Total
Senior debt	$	-	$	1,274,359	$	1,241,057	$	2,515,416
Subordinated debt		-		230,411		157,475		387,886
Structured products		-		-		92,596		92,596
Equity/Other		-		9,919		240,189		250,108

Subtotal		-		1,514,689		1,731,317		3,246,006
Short-term investments		31,922		-		-		31,922

Total investments	$	31,922	$	1,514,689	$	1,731,317	$	3,277,928


Derivative Instruments	Level 1		Level 2		Level 3		Total
Assets
Foreign currency forward contracts	$	-	$	45,261	$	-	$	45,261
Total return swaps		-		-		1,189		1,189
Liabilities
Foreign currency forward contracts		-		(2,859)		-		(2,859)

Total	$	-	$	42,402	$	1,189	$	43,591


	December 31, 2014

Description	Level 1		Level 2		Level 3		Total
Senior debt	$	-	$	976,274	$	1,143,744	$	2,120,018
Subordinated debt		-		236,896		196,859		433,755
Structured products		-		-		36,421		36,421
Equity/Other		-		5,069		125,308		130,377

Subtotal		-		1,218,239		1,502,332		2,720,571
Short-term investments		629		-		-		629

Total investments	$	629	$	1,218,239	$	1,502,332	$	2,721,200


Derivative Instruments	Level 1		Level 2		Level 3		Total
Assets
Foreign currency forward contracts	$	-	$	40,903	$	-	$	40,903
Liabilities
Total return swaps		-		-		(3,445)		(3,445)
Foreign currency forward contracts		-		(458)		-		(458)

Total	$	-	$	40,445	$	(3,445)	$	37,000

There were no transfers between Level 1 and Level 2 during the six months ended June 30, 2015 and 2014.

The carrying value of cash and foreign currency is classified as Level 1 with respect to the fair value hierarchy. The carrying values of the Company’s collateral on deposit with custodian, term loan and revolving credit facilities approximate their fair value and are classified as Level 2 with regards to the fair value hierarchy.

5.	Fair Value of Financial Instruments (continued)

At June 30, 2015, the Company held 71 distinct investment positions classified as Level 3, representing an aggregate fair value of $1.73 billion and 52.8% of the total investment portfolio. At December 31, 2014, the Company held 63 distinct investment positions classified as Level 3, representing an aggregate fair value of $1.50 billion and 55.2% of the total investment portfolio. The ranges of unobservable inputs used in the fair value measurement of the Company’s Level 3 investments as of June 30, 2015 and December 31, 2014 were as follows (in thousands):

As of June 30, 2015

Asset Group

Fair Value ⁽¹⁾⁽²⁾

Valuation Techniques ⁽³⁾

Unobservable Inputs

Range (Weighted Average) ⁽⁴⁾

Impact to Valuation
from an Increase in
Input ⁽⁵⁾

Senior Debt

$1,221,232

Discounted Cash Flow

Discount Rate

7.70% - 30.78% (11.46%)

Decrease

Market Yield

6.00% - 30.70% (8.99%)

Decrease

Yield Premium

0.00% - 9.73% (2.27%)

Decrease

Weighted Average Cost of Capital

6.60% - 18.65% (10.59%)

Decrease

EBITDA Multiple

4.60x - 14.00x (8.44x)

Increase

Tangible Book Value Multiple

1.60x (1.60x)

Increase

Interest Rate Volatility

25.00% (25.00%)

Decrease

19,825

Discounted Cash Flow/

Discount Rate

39.95% (39.95%)

Decrease

Liquidation Analysis

Probability of Liquidation

20.00% (20.00%)

Decrease

Recovery

0.00% (0.00%)

Increase

Subordinated Debt

151,811

Discounted Cash Flow

Discount Rate

12.99% - 20.53% (14.97%)

Decrease

Market Yield

8.58% - 18.34% (11.13%)

Decrease

Yield Premium

4.25% (4.25%)

Decrease

Weighted Average Cost of Capital

9.20% - 19.50% (13.81%)

Decrease

EBITDA Multiple

6.40x - 13.00x (9.25x)

Increase

Interest Rate Volatility

25.00% (25.00%)

Decrease

5,664

Option Pricing Model

EBITDA Multiple

9.80x (9.80x)

Increase

Implied Volatility

45.00% (45.00%)

Increase

Risk Free Rate

0.89% (0.89%)

Increase

Yield

0.00% (0.00%)

Decrease

Term

2.50 years (2.50 years)

Increase

Structured Products

92,596

Discounted Cash Flow

Discount Rate

11.22% - 17.36% (15.20%)

Decrease

Equity/Other

37,126

Market Comparables

EBITDA Multiple

5.60x - 11.10x (8.80x)

Increase

Revenue Multiple

0.19x (0.19x)

Increase

Illiquidity Discount

10.00% - 15.00% (11.47%)

Decrease

6,615

Option Pricing Model

EBITDA Multiple

5.80x - 11.10x (10.53x)

Increase

Implied Volatility

30.00% - 45.00% (32.42%)

Increase

Risk Free Rate

0.07% - 1.32% (0.52%)

Increase

Term

0.75 years - 4.00 years (1.75 years)

Increase

Yield

0.00% - 0.00% (0.00%)

Decrease

Illiquidity Discount

0.00% - 15.00% (13.04%)

Decrease

89,061

Waterfall

Asset Appraisals

N/A

Increase

Change in Market Index

1.93% (1.93%)

Increase

Additional Discounts

3.00% (3.00%)

Decrease

54,064

Net Asset Value

N/A

Increase

53,323

Discounted Cash Flow

Discount Rate

12.00% - 12.36% (12.05%)

Decrease

Total

$1,731,317

5.	Fair Value of Financial Instruments (continued)

As of December 31, 2014

Asset Group

Fair Value ⁽¹⁾⁽²⁾

Valuation Techniques ⁽³⁾

Unobservable Inputs

Range (Weighted Average) ⁽⁴⁾

Impact to Valuation
from an Increase in
Input ⁽⁵⁾

Senior Debt

$1,143,744

Discounted Cash Flow

Discount Rate

6.07% - 20.50% (11.49%)

Decrease

Market Yield

5.89% - 19.69% (8.98%)

Decrease

Yield Premium

0.00% - 6.50% (1.88%)

Decrease

Weighted Average Cost of Capital

6.60% - 17.85% (10.78%)

Decrease

EBITDA Multiple

4.25x - 17.00x (8.34x)

Increase

Tangible Book Value Multiple

1.65x (1.65x)

Increase

Interest Rate Volatility

25.00% (25.00%)

Decrease

Subordinated Debt

186,805

Discounted Cash Flow

Discount Rate

11.37% - 20.11% (13.89%)

Decrease

Market Yield

8.08% - 17.51% (10.15%)

Decrease

Yield Premium

3.80% - 4.00% (3.91%)

Decrease

Weighted Average Cost of Capital

9.45% - 19.50% (13.33%)

Decrease

EBITDA Multiple

6.50x - 13.50x (9.53x)

Increase

Interest Rate Volatility

25.00% (25.00%)

Decrease

9,487

Option Pricing Model

EBITDA Multiple

10.30x (10.30x)

Increase

Implied Volatility

45.00% (45.00%)

Increase

Risk Free Rate

1.10% (1.10%)

Increase

Term

3.00 years (3.00 years)

Increase

567

Market Comparables

EBITDA Multiple

4.00x (4.00x)

Increase

Structured Products

36,421

Discounted Cash Flow

Discount Rate

10.95% - 15.50% (11.33%)

Decrease

Equity/Other

47,210

Market Comparables

EBITDA Multiple

5.30x - 10.50x (8.68x)

Increase

Revenue Multiple

0.18x (0.18x)

Increase

Illiquidity Discount

10.00% - 15.00% (12.22%)

Decrease

4,256

Option Pricing Model

EBITDA Multiple

10.30x - 13.50x (13.27x)

Increase

Implied Volatility

30.00% - 45.00% (31.07%)

Increase

Risk Free Rate

1.10% - 1.28% (1.27%)

Increase

Term

3.00 years - 4.00 years (3.93 years)

Increase

Illiquidity Discount

0.00% - 10.00% (9.28%)

Decrease

49,094

Waterfall

Asset Appraisals

N/A

Increase

Change in Market Index

5.47% (5.47%)

Increase

Illiquidity Discount

3.50% (3.50%)

Decrease

23,206

Net Asset Value

N/A

Increase

1,542

Discounted Cash Flow

Discount Rate

12.30% - 13.10% (12.90%)

Decrease

Total

$1,502,332

⁽¹⁾	The TRS was valued in accordance with the TRS agreements as discussed in Note 2. See Note 4 for quantitative disclosures of the fair value of the TRS.

⁽²⁾	Certain investments may be valued at cost for a period of time after an acquisition as the best indicator of fair value.

⁽³⁾

For the assets and investments that have more than one valuation technique, the Company may rely on the stated techniques individually or in the aggregate based on a weight ascribed to each valuation technique, ranging from 0 – 100%. Indicative broker quotes obtained for valuation purposes are reviewed by the Company relative to other valuation techniques.

⁽⁴⁾	Weighted average amounts are based on the estimated fair values.

⁽⁵⁾

This column represents the directional change in the fair value of the Level 3 investments that would result from an increase to the corresponding unobservable input. A decrease to the input would have the opposite effect. Significant changes in these inputs in isolation could result in significantly higher or lower fair value measurements.

The above tables represent the significant unobservable inputs as they relate to the Company’s determination of fair values for the majority of its investments categorized within Level 3 as of June 30, 2015 and December 31, 2014. In addition to the techniques and inputs noted in the tables above, according to the Company’s valuation policy, it may also use other valuation techniques and methodologies when determining the fair value estimates for the Company’s investments. Any significant increases or decreases in the unobservable inputs would result in significant increases or decreases in the fair value of the Company’s investments.

5.	Fair Value of Financial Instruments (continued)

Investments that do not have a readily available market value are valued utilizing a market approach, an income approach (i.e. discounted cash flow approach), or both approaches, as appropriate. The market comparables approach uses prices, including third-party indicative broker quotes, and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) that are discounted based on a required or expected discount rate to derive a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors the Company may take into account to determine the fair value of its investments include, as relevant: available current market data, including an assessment of the credit quality of the security’s issuer, relevant and applicable market trading and transaction comparables, applicable market yields and multiples, illiquidity discounts, security covenants, call protection provisions, information rights, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, its earnings and cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, data derived from merger and acquisition activities for comparable companies, and enterprise values, among other factors.

The following tables provide reconciliations for the three and six months ended June 30, 2015 of investments for which Level 3 inputs were used in determining fair value (in thousands):


	Three Months Ended June 30, 2015
	Senior Debt			Subordinated Debt			Structured Products		Equity/ Other			Total Return Swaps			Total
Fair Value Balance as of April 1, 2015	$	1,135,325		$	205,174		$	88,810	$	141,125		$	2,164		$	1,572,598
Additions ⁽¹⁾		116,749			8,642			2,000		99,104			-			226,495
Net realized gains (losses) ⁽²⁾		(57	)		1,169			-		5,704			3,090			9,906
Net change in unrealized appreciation (depreciation) ⁽³⁾		5,306			1,106			1,786		(6,901	)		(975	)		322
Sales or repayments ⁽⁴⁾		(17,213	)		(58,904	)		-		1,157			(3,090	)		(78,050	)
Net discount accretion		947			288			-		-			-			1,235
Transfers out of Level 3		-			-			-		-			-			-
Transfers into Level 3		-			-			-		-			-			-

Fair Value Balance as of June 30, 2015	$	1,241,057		$	157,475		$	92,596	$	240,189		$	1,189		$	1,732,506

Change in net unrealized appreciation (depreciation) in investments still held as of June 30, 2015 ⁽³⁾	$	5,307		$	2,149		$	1,785	$	(7,701	)	$	(975	)	$	565


	Six Months Ended June 30, 2015
	Senior Debt			Subordinated Debt			Structured Products		Equity/ Other			Total Return Swaps			Total
Fair Value Balance as of January 1, 2015	$	1,143,744		$	196,859		$	36,421	$	125,308		$	(3,445	)	$	1,498,887
Additions ⁽¹⁾		196,283			35,691			52,000		120,261			-			404,235
Net realized gains (losses) ⁽²⁾		273			1,154			-		5,704			5,513			12,644
Net change in unrealized appreciation (depreciation) ⁽³⁾		(31,568	)		(16,523	)		4,175		(11,084	)		4,634			(50,366	)
Sales or repayments ⁽⁴⁾		(69,540	)		(60,368	)		-		-			(5,513	)		(135,421	)
Net discount accretion		1,865			662			-		-			-			2,527
Transfers out of Level 3		-			-			-		-			-			-
Transfers into Level 3		-			-			-		-			-			-

Fair Value Balance as of June 30, 2015	$	1,241,057		$	157,475		$	92,596	$	240,189		$	1,189		$	1,732,506

Change in net unrealized appreciation (depreciation) in investments still held as of June 30, 2015 ⁽³⁾	$	(31,097	)	$	(16,227	)	$	6,772	$	(11,084	)	$	4,634		$	(47,002	)

⁽¹⁾	Includes increases in the cost basis of investments resulting from new and add-on portfolio investments and the capitalization of PIK interest.

⁽²⁾	Included in net realized gains (losses) in the condensed consolidated statements of operations.

⁽³⁾	Included in net change in unrealized appreciation (depreciation) in the condensed consolidated statements of operations.

⁽⁴⁾	Includes principal payments/paydowns on debt investments, collection of PIK interest, TRS settlement payments, proceeds from sales of investments and distributions received on equity investments classified as return of capital.

5.	Fair Value of Financial Instruments (continued)

The following tables provide reconciliations for the three and six months ended June 30, 2014 of investments for which Level 3 inputs were used in determining fair value (in thousands):


	Three Months Ended June 30, 2014
	Senior Debt			Subordinated Debt			Structured Products			Equity/ Other			Total Return Swaps			Total
Fair Value Balance as of April 1, 2014	$	701,314		$	174,172		$	57,319		$	44,099		$	769		$	977,673
Additions ⁽¹⁾		164,248			22,890			-			18,164			-			205,302
Net realized gains (losses) ⁽²⁾		280			(186	)		(186	)		-			532			440
Net change in unrealized appreciation (depreciation) ⁽³⁾		5,021			(1,303	)		208			6,313			(278	)		9,961
Sales or repayments ⁽⁴⁾		(69,865	)		(5,751	)		(21,287	)		-			(532	)		(97,435	)
Net discount accretion		503			399			(1	)		-			-			901
Transfers out of Level 3		-			-			-			(7,529	)		-			(7,529	)
Transfers into Level 3		-			-			-			-			-			-

Fair Value Balance as of June 30, 2014	$	801,501		$	190,221		$	36,053		$	61,047		$	491		$	1,089,313

Change in net unrealized appreciation (depreciation) in investments still held as of June 30, 2014 ⁽³⁾	$	5,010		$	(1,392	)	$	208		$	6,313		$	(278	)	$	9,861


	Six Months Ended June 30, 2014
	Senior Debt			Subordinated Debt			Structured Products			Equity/ Other			Total Return Swaps			Total
Fair Value Balance as of January 1, 2014	$	611,276		$	171,921		$	55,575		$	24,671		$	1,861		$	865,304
Additions ⁽¹⁾		297,941			23,430			-			38,251			-			359,622
Net realized gains (losses) ⁽²⁾		294			466			(199	)		-			2,394			2,955
Net change in unrealized appreciation (depreciation) ⁽³⁾		11,904			2,544			5,276			5,678			(1,370	)		24,032
Sales or repayments ⁽⁴⁾		(120,886	)		(8,705	)		(24,597	)		(24	)		(2,394	)		(156,606	)
Net discount accretion		972			565			(2	)		-			-			1,535
Transfers out of Level 3		-			-			-			(7,529	)		-			(7,529	)
Transfers into Level 3		-			-			-			-			-			-

Fair Value Balance as of June 30, 2014	$	801,501		$	190,221		$	36,053		$	61,047		$	491		$	1,089,313

Change in net unrealized appreciation (depreciation) in investments still held as of June 30, 2014 ⁽³⁾	$	12,340		$	2,729		$	5,310		$	5,678		$	(1,370	)	$	24,687

⁽¹⁾	Includes increases in the cost basis of investments resulting from new and add-on portfolio investments and the capitalization of PIK interest.

⁽²⁾	Included in net realized gains (losses) in the condensed consolidated statements of operations.

⁽³⁾	Included in net change in unrealized appreciation (depreciation) in the condensed consolidated statements of operations.

⁽⁴⁾	Includes principal payments/paydowns on debt investments, collection of PIK interest, TRS settlement payments, proceeds from sales of investments and distributions received on equity investments classified as return of capital.

No securities were transferred into the Level 3 hierarchy during the six months ended June 30, 2015 and 2014 and one was transferred out of Level 3 hierarchy during the six months ended June 30, 2014. These investments were transferred at fair value as of the beginning of the quarter in which they were transferred. The classification transfers between Level 3 and Level 2 were based on the observed changes in liquidity based on information supplied by a third party pricing source, whereby such liquidity information is routinely reviewed no less frequently than monthly. All realized and unrealized gains and losses are included in earnings and are reported as separate line items within the Company’s condensed consolidated statements of operations.

6.	Related Party Transactions

CNL, certain CNL affiliates, and KKR receive compensation for advisory services and other services in connection with (i) the performance and supervision of administrative services (ii) investment advisory activities and (iii) the Company’s Offerings.

CNL Securities Corp., an affiliate of CNL, serves as the managing dealer of the Company’s Offerings and in connection therewith receives selling commissions of up to 7% of gross offering proceeds and a marketing support fee of up to 3% of gross offering proceeds. All or any portion of these fees may be reallowed to participating brokers as determined by CNL Securities Corp. The Company will pay a maximum sales load of 10% of gross offering proceeds related to the Offerings for all combined selling commissions and marketing support fees.

The Company is a party to an investment advisory agreement with CNL, as amended (the “Investment Advisory Agreement”) for the overall management of the Company’s investment activities. The Company and CNL have entered into a sub-advisory agreement with KKR (the “Sub-Advisory Agreement”), under which KKR is responsible for the day-to-day management of the Company’s investment portfolio. CNL compensates KKR for advisory services that it provides to the Company with 50% of the base management fees and performance-based incentive fees that CNL receives under the Investment Advisory Agreement. CNL earns a base management fee (referred to as an investment advisory fee) equal to an annual rate of 2% of the Company’s average gross assets as of the end of the two most recently completed months, computed and paid monthly. The computation of gross assets includes unrealized depreciation, appreciation and collateral posted with the custodian in connection with the TRS, and excludes deferred offering expenses. CNL also earns performance-based incentive fees comprised of the following two parts:

(i) a subordinated incentive fee on pre-incentive fee net investment income (as defined in the Investment Advisory Agreement), paid quarterly if earned, computed as the sum of (A) 100% of quarterly pre-incentive fee net investment income in excess of 1.75% of average adjusted capital up to a limit of 0.4375% of average adjusted capital, and (B) 20% of pre-incentive fee net investment income in excess of 2.1875% of average adjusted capital and

(ii) an incentive fee on capital gains, paid annually if earned, equal to (A) 20% of all realized gains on a cumulative basis from inception, net of (1) all realized losses on a cumulative basis, (2) unrealized depreciation at year end and (3) disregarding any net realized gains associated with the TRS interest spread (which represents the difference between (a) the interest and fees received on the TRS, and (b) the financing fees paid to the TRS Counterparty), less (B) the aggregate amount of any previously paid incentive fee on capital gains.

The terms of the Investment Advisory Agreement entitle CNL (and indirectly KKR) to receive up to 5% of gross proceeds in connection with the Offerings as reimbursement for organization and offering expenses incurred by the Advisors on behalf of the Company. During the six months ended June 30, 2015, the Company recorded $1.70 million in deferred offering expenses related to the Follow-On Offering, or 0.5% of gross offering proceeds of the Follow-On Offering.

In addition, under the terms of the Investment Advisory Agreement, the Advisors are entitled to reimbursement of certain expenses incurred on behalf of the Company including expenses incurred in connection with its investment operations and investment transactions.

The Company is a party to an administrative services agreement with CNL (the “Administrative Services Agreement”) whereby CNL performs, and oversees the performance of, various administrative services on behalf of the Company. Administrative services may include transfer agency oversight and supervisory services, shareholder communication services, general ledger accounting services, calculating the Company’s net asset value, maintaining required corporate and financial records, financial reporting for the Company and its subsidiaries, internal audit services, reporting to the Company’s board of directors and lenders, preparing and filing income tax returns, preparing and filing SEC reports, preparing, printing and disseminating shareholder reports, overseeing the payment of the Company’s expenses and shareholder distributions, administering the Company’s share repurchase program, and management and oversight of service providers in their performance of administrative and professional services rendered for the Company. CNL may also enter into agreements with its affiliates for the performance of select administrative services. The Company reimburses CNL for the professional services and expenses it incurs in performing its administrative obligations on behalf of the Company. Through December 31, 2014, CNL also received reimbursement payments from the Company for professional services provided by certain officers of the Company.

6.	Related Party Transactions (continued)

Related party fees, expenses and expenses incurred on behalf of the Company during the three and six months ended June 30, 2015 and 2014 are summarized below (in thousands):


		Three Months Ended June 30,				Six Months Ended June 30,
Related Party	Source Agreement & Description	2015		2014		2015		2014
CNL Securities Corp.	Managing Dealer Agreement: Selling commissions and marketing support fees	$	15,717	$	20,121	$	32,470	$	31,700

CNL and KKR	Investment Advisory Agreement: Base management fees (investment advisory fees)		17,002		11,264		32,137		21,945

CNL and KKR	Investment Advisory Agreement: Subordinated incentive fee on income ⁽¹⁾		-		-		7,983		5,163

CNL and KKR	Investment Advisory Agreement: Incentive fee on capital gains ⁽²⁾		-		-		-		-

CNL and KKR	Investment Advisory Agreement: Offering expenses⁽³⁾		902		2,151		1,702		3,376

KKR	Investment Sub-Advisory Agreement: Investment expenses reimbursement		447		151		635		457

CNL	Administrative Services Agreement: Administrative and compliance services⁽⁴⁾		313		525		676		1,063

(1)

Subordinated incentive fees on income are included in performance-based incentive fees in the condensed consolidated statements of operations. During the six months ended June 30, 2015 and 2014, $13.09 million and $10.44 million, respectively, of subordinated incentive fees on income were paid to the Advisors.

(2)	Incentive fees on capital gains are included in performance-based incentive fees in the condensed consolidated statements of operations. The following table provides additional details for the incentive fee on capital gains for the six months ended June 30, 2015 and 2014 (in thousands):


Incentive Fee on Capital Gains for the Six Months Ended June 30,	2015		2014
Accrued incentive fee on capital gains as of January 1,	$	-	$	11,128
Incentive fee on capital gains expense during the six months ended June 30,		-		6,440
Less: Incentive fee on capital gains paid to the Advisors during the six months ended June 30,		-		(2,323	)

Accrued incentive fee on gains as of June 30,		-		15,245
Less: Accrued incentive fee on capital gains attributable to unrealized gains as of June 30,		-		(15,245	)

Incentive fee on capital gains earned by and payable to the Advisors as of June 30,	$	-	$	-

(3)	The following table provides additional details for the organization and offering expenses reimbursement (in thousands):


Offering Expenses Reimbursement for the Six Months Ended June 30,	2015			2014
Offering expenses reimbursement payable as of January 1,	$	272		$	240
Additional offering expenses deferred during the six months ended June 30,		1,702			3,376
Offering expenses reimbursement payable as of June 30,		(610	)		(704	)

Offering expenses reimbursement paid to the Advisors during the six months ended June 30,	$	1,364		$	2,912

Outstanding unreimbursed offering expenses (net of amounts payable) as of June 30,	$	-		$	560

(4)	Includes $0.33 million for reimbursement payments to CNL for services provided to the Company for its Chief Compliance Officer and Chief Financial Officer for the six months ended June 30, 2014. Effective January 1, 2015, these services were no longer reimbursable Advisor expenses.

KKR is obligated to remit to the Company any earned capital structuring fees based on the Company’s pro rata portion of the co-investment transactions or originated investments in which the Company participates. As a result, the Company earned capital structuring fees of $1.12 million and $2.66 million during the three and six months ended June 30, 2015, respectively, and $0.77 million and $0.98 million during the three and six months ended June 30, 2014, respectively. As of June 30, 2015, $1.12 million of capital structuring fees were receivable from the Advisors.

6.	Related Party Transactions (continued)

Indemnification - The Investment Advisory Agreement and the Sub-Advisory Agreement provide certain indemnification to the Advisors, their directors, officers, persons associated with the Advisors, and their affiliates. The managing dealer agreement provides certain indemnification to the managing dealer and each participating broker and their respective officers, directors, partners, employees, associated persons, agents and control persons. In addition, the Company’s articles of incorporation provide certain indemnifications to its officers, directors, agents, and certain other persons. As of June 30, 2015, management believed that the risk of incurring any losses for such indemnification was remote.

7.	Fee Income

Fee income, which is nonrecurring, consisted of the following (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
Fee Income	2015		2014		2015		2014
Capital structuring fees	$	1,124	$	767	$	2,662	$	977
Amendment fees		721		55		8,784		108
Other		38		264		38		277

Total	$	1,883	$	1,086	$	11,484	$	1,362

8.	Distributions

The Company’s board of directors declared distributions for 26 and 25 record dates in the six months ended June 30, 2015 and 2014, respectively. Declared distributions are paid monthly. The total and the sources of declared distributions on a GAAP basis for the six months ended June 30, 2015 and 2014 are presented in the tables below (in thousands, except per share amounts).


	2015							2014
	Per Share		Amount		Allocation			Per Share		Amount		Allocation
Total Declared Distributions	$	0.40	$	95,575		100.0	%	$	0.38	$	59,933		100.0	%
From net investment income		0.35		81,950		85.8			0.30		47,244		78.8
From net realized gains		0.00		1,256		1.3			0.07		11,207		18.7
Distributions in excess of net investment income		0.05		12,369		12.9			0.01		1,482		2.5

Sources of distributions, other than net investment income and realized gains on a GAAP basis, include (i) the ordinary income component of prior year tax basis undistributed earnings and (ii) required adjustments to GAAP net investment income in the current period to determine taxable income available for distributions. The following table summarizes the primary sources of differences between GAAP net investment income and taxable income available for distributions that contribute to tax-related distributions in excess of net investment income for the six months ended June 30, 2015 and 2014 (amounts in thousands).


Six Months Ended June 30,	2015		2014
Ordinary income component of tax basis undistributed earnings	$	51,410	$	3,531
Estimated unearned performance-based incentive fee		—		5,779
Offering expenses		2,641		3,674
Net change in unrealized appreciation (depreciation) on total return swaps		4,634		(1,370)
Net change in unrealized appreciation (depreciation) on foreign currency forward contracts		1,957		(1,931)

Total	$	60,642	$	9,683

(1)	The above table does not present all adjustments to calculate taxable income available for distributions.

For the six months ended June 30, 2015, the tax-related sources of distributions of $60.64 million were greater than the distributions in excess of net investment income of $12.37 million. As a result, the Company estimates that none of the distributions declared during the six months ended June 30, 2015 would be classified as a tax basis return of capital. None of the distributions declared during the year ended December 31, 2014 were classified as a tax basis return of capital.

On June 29, 2015, the Company’s board of directors declared distributions of $0.015483 per share for four record dates beginning on July 7, 2015 through and including July 28, 2015.

9.	Share Transactions

The following table summarizes the total shares issued and proceeds received in connection with the Company’s Offerings for the six months ended June 30, 2015 and 2014 (in thousands except share and per share amounts).


	Six Months Ended June 30,
	2015					2014
	Shares		Amount			Shares		Amount
Gross proceeds from Offering		32,539,230		$ 354,609			30,103,786		$ 337,856
Commissions and marketing support fees		-		(32,470	)		-		(31,700	)

Net proceeds to Company		32,539,230		322,139			30,103,786		306,156
Reinvestment of distributions		3,949,739		39,102			3,764,891		38,289

Net proceeds from Offering		36,488,969		$ 361,241			33,868,677		$ 344,445

Average net proceeds per share		$9.90					$10.17

As of June 30, 2015, the Company has sold 257.95 million shares of common stock through the Offerings, including reinvestment of distributions, for total gross proceeds of $2.81 billion.

The Company conducts quarterly tender offers pursuant to its share repurchase program. The Company currently limits the number of shares to be repurchased during any calendar year to the number of shares it can repurchase with the proceeds it receives from the issuance of shares of its common stock under its distribution reinvestment plan. At the discretion of the Company’s board of directors, the Company may also use cash on hand, cash available from borrowings and cash from the sale of investments as of the end of the applicable period to repurchase shares. The Company limits repurchases in each quarter to 2.5% of the weighted average number of shares of common stock outstanding in the prior four calendar quarters. The Company’s board of directors may amend, suspend or terminate the share repurchase program upon 30 days’ notice.

The following table is a summary of the share repurchases completed during the six months ended June 30, 2015 and 2014 (in thousands, except share and per share amounts):


Repurchase Date	Total Number of Shares Offered to Repurchase		Total Number of Shares Repurchased		Total Consideration		No. of Shares Repurchased/Total Offer		Price Paid Per Share
2015:
March 2, 2015		4,435,072		555,174	$	5,452		13%	$	9.82
May 29, 2015		4,919,566		501,943		4,889		10%		9.74

Total		9,354,638		1,057,117	$	10,341		11%


2014:
March 3, 2014		2,612,555		323,324	$	3,233		12%	$	10.00
June 2, 2014		3,091,175		307,909		3,116		10%		10.12

Total		5,703,730		631,233	$	6,349		11%

10. Borrowings

The Company’s outstanding borrowings as of June 30, 2015 and December 31, 2014 were as follows (in thousands):


	As of June 30, 2015						As of December 31, 2014
	Total Aggregate Principal Amount Committed		Principal Amount Outstanding		Carrying Value		Total Aggregate Principal Amount Committed		Principal Amount Outstanding		Carrying Value
Deutsche Bank Credit Facility ⁽¹⁾	$	150,000	$	150,000	$	150,000	$	340,000	$	47,000	$	47,000
BNP Credit Facility ⁽¹⁾		200,000		163,000		163,000		200,000		100,450		100,450
Senior Secured Revolving Credit Facility ⁽¹⁾		675,000⁽²⁾		317,000		317,000		655,000⁽²⁾		230,000		230,000

Total credit facilities		1,025,000		630,000		630,000		1,195,000		377,450		377,450
2014 Senior Secured Term Loan		395,000		395,000		393,417⁽³⁾		397,000		397,000		395,228	⁽³⁾

Total borrowings	$	1,420,000	$	1,025,000	$	1,023,417	$	1,592,000	$	774,450	$	772,678

⁽¹⁾	Subject to borrowing base and leverage restrictions.

⁽²⁾	Provides a feature that allows the Company, under certain circumstances, to increase the size of the Senior Secured Revolving Credit Facility to a maximum of $900 million.

⁽³⁾	Comprised of outstanding principal less the unaccreted original issue discount.

The weighted average stated interest rate and weighted average remaining years to maturity of the Company’s outstanding borrowings as of June 30, 2015 were 2.89% and 2.6 years, respectively, and as of December 31, 2014 were 3.24% and 3.2 years, respectively.

Deutsche Bank Credit Facility

In 2011, CCT Funding became a party to a revolving credit facility with Deutsche Bank AG, New York Branch (“Deutsche Bank”) and the other lenders from time to time thereto (the “Deutsche Bank Credit Facility”). Deutsche Bank serves as administrative agent under the credit facility. On January 9, 2015, CCT Funding entered into an amendment (the “Fifth Amendment”) to the Deutsche Bank Credit Facility. The Fifth Amendment amended the Deutsche Bank Credit Facility by providing for, among other things, (i) the termination of the Tranche B1 Commitment, Tranche B2 Commitment and Tranche D Commitment, and (ii) borrowings in an aggregate amount up to $150 million on a committed basis (the “Tranche E Loans”). From and after February 11, 2015, the Fifth Amendment effective date, all outstanding loans, including Tranche B1 Loans and Tranche B2 Loans, were converted into Tranche E Loans. The Fifth Amendment also modified the interest rate and maturity date applicable to the Tranche E Loans. Pursuant to the Fifth Amendment, the Tranche E Loans are scheduled to mature, and all accrued and unpaid interest thereunder will be due and payable on February 8, 2017. Upfront fees and unfunded commitment fees were also incurred with respect to the Tranche E Loans.

Interest on the Deutsche Bank Credit Facility is charged at the rate of three-month LIBOR plus 1.85%. CCT Funding also pays an annual commitment fee on any unused commitment amounts of 0.50%, plus an additional annual commitment fee of 1.85% on the excess, if any, of (i) 80% of the Tranche E commitment less (ii) the aggregate principal amount of Tranche E Loans outstanding. The components of interest expense, average interest rates (i.e., base interest rate in effect plus the spread) and average outstanding balances for the Deutsche Bank Credit Facility for the three and six months ended June 30, 2015 and 2014 were as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Stated interest expense	$	806	$	799	$	1,256	$	2,211
Unused commitment fees		—		291		186		389
Amortization of deferred financing costs		53		212		159		363

Total interest expense	$	859	$	1,302	$	1,601	$	2,963

Weighted average interest rate		2.2%		2.3%		2.2%		2.3%
Average borrowings	$	150,000	$	140,140	$	151,818	$	191,919

The Deutsche Bank Credit Facility is secured by the portfolio investments held in CCT Funding.

BNP Credit Facility

In 2013, Paris Funding became a party to a revolving credit facility with BNP Paribas Prime Brokerage, Inc. (“BNP”) under which it may borrow up to $200 million (the “BNP Credit Facility”). Paris Funding has the right to prepay loans under the BNP Credit Facility in whole or in part at any time. Paris Funding may terminate the BNP Credit Facility with 180 days’ notice. If certain margin and collateral requirements, minimum net assets or other covenants are not met, the BNP Credit Facility could be deemed in default and result in termination. Absent a default or facility termination event, BNP is required to provide Paris Funding with 364 days’ notice prior to terminating the BNP Credit Facility.

10.

Borrowings (continued)

Interest on the BNP Credit Facility is charged at the rate of one month LIBOR plus 1.10% and is payable monthly. Paris Funding also pays an annual commitment fee on any unused commitment amounts of 0.40% or 0.50%, depending on utilization levels. The components of interest expense, average interest rates (i.e., base interest rate in effect plus the spread) and average outstanding balances for the BNP Credit Facility for the three and six months ended June 30, 2015 and 2014 were as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Stated interest expense	$	340	$	244	$	521	$	540
Unused commitment fees		108		232		275		431
Amortization of deferred financing costs		—		92		—		208

Total interest expense	$	448	$	568	$	796	$	1,179

Weighted average interest rate		1.3%		1.3%		1.3%		1.3%
Average borrowings	$	104,736	$	76,719		$80,994	$	85,431

Paris Funding pledges certain of its assets as collateral to secure borrowings under the BNP Credit Facility. As of June 30, 2015 and December 31, 2014, Paris Funding had investments with a fair value of $309.41 million and $258.34 million, respectively, pledged as collateral under the BNP Credit Facility. Under the terms of the BNP Credit Facility, BNP has the ability to borrow a portion of the pledged collateral (“Rehypothecated Securities”), provided that, among other things, the fair value of the borrowed collateral does not exceed the value of the loan against which the collateral was pledged and any single borrowed security does not represent the entire position of such security held by Paris Funding. Paris Funding may designate any security within the pledged collateral as ineligible to be a Rehypothecated Security, provided there are eligible securities within the segregated custody account in an amount equal to the outstanding borrowings owed by Paris Funding to BNP. Paris Funding may recall any Rehypothecated Security at any time and BNP must, to the extent commercially reasonable, return such security or equivalent security within a commercially reasonable period. In the event BNP does not return the security, Paris Funding will have the right to, among other things, apply and set off an amount equal to 100% of the then-current fair market value of such Rehypothecated Securities against any outstanding borrowings owed to BNP under the BNP Credit Facility. Rehypothecated Securities are marked-to-market daily and if the value of all Rehypothecated Securities exceeds 100% of the outstanding borrowings owed by Paris Funding under the BNP Credit Facility, BNP may either reduce the amount of Rehypothecated Securities to eliminate such excess or deposit into the segregated custody account an amount of cash equal to such excess. Paris Funding will continue to receive interest and the scheduled repayment of principal balances on Rehypothecated Securities. Paris Funding may receive a fee from BNP in connection with Rehypothecated Securities meeting certain criteria. Paris Funding did not recognize any fees on Rehypothecated Securities during the six months ended June 30, 2015 and 2014. As of June 30, 2015, there were no securities rehypothecated by BNP.

Senior Secured Revolving Credit Facility

In September 2013, the Company entered into a revolving credit facility (the “Senior Secured Revolving Credit Facility”) with certain lenders and JPMorgan Chase Bank, N.A., acting as administrative agent. The Senior Secured Revolving Credit Facility consists of loans to be made in U.S. dollars and other foreign currencies in an aggregate amount of $675 million as of June 30, 2015, with an “accordion” feature that allows the Company, under certain circumstances, to increase the size of the facility to a maximum of $900 million. Availability under the Senior Secured Revolving Credit Facility will terminate on September 4, 2016 and the outstanding loans under the Senior Secured Revolving Credit Facility will mature on September 4, 2017. The Senior Secured Revolving Credit Facility is secured by substantially all of the Company’s portfolio investments and its cash and securities accounts, excluding those held by CCT Funding, Paris Funding and Halifax Funding, and provides for a guaranty by certain other subsidiaries of the Company.

10.

Borrowings (continued)

The stated borrowing rate under the Senior Secured Revolving Credit Facility is generally based on LIBOR plus an applicable spread of 2.50% or, with respect to borrowings in foreign currencies, on a base interest rate applicable to such currency borrowing plus an applicable spread of 2.50%. The Company also pays an annual commitment fee on any unused commitment amounts between 0.375% and 1.00%, depending on utilization levels. The components of interest expense, average interest rates (i.e., base interest rate in effect plus the spread) and average outstanding balances for the Senior Secured Revolving Credit Facility for the three and six months ended June 30, 2015 and 2014 were as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Stated interest expense	$	1,578	$	782	$	3,123	$	2,670
Unused commitment fees		579		746		977		815
Amortization of deferred financing costs		435		316		864		560

Total interest expense	$	2,592	$	1,844	$	4,964	$	4,045

Weighted average interest rate		2.7%		3.4%		2.7%		3.2%
Average borrowings	$	231,802	$	93,066		$230,906	$	169,284

2014 Senior Secured Term Loan

On May 20, 2014, the Company entered into a senior secured term loan credit facility (the “2014 Senior Secured Term Loan”) with certain lenders and JPMorgan Chase Bank, N.A., as administrative agent. The 2014 Senior Secured Term Loan initially provided the Company with $398 million in gross proceeds. The 2014 Senior Secured Term Loan matures in May 2019, and generally bears interest at LIBOR plus 3.25% (with a LIBOR floor of 0.75%). The 2014 Senior Secured Term Loan includes an accordion feature permitting the Company to expand the facility if certain conditions are satisfied; provided, however, that the aggregate amount of the 2014 Senior Secured Term Loan is limited to the amount as determined from time to time which would not cause the covered debt amount (i.e., the Company’s aggregate debt under both the 2014 Senior Secured Term Loan and the Senior Secured Revolving Credit Facility, other permitted debt and certain other unsecured debt) to exceed the borrowing/collateral base. The 2014 Senior Secured Term Loan is secured by substantially all of the Company’s portfolio investments and its cash and securities accounts, excluding those held by CCT Funding, Paris Funding and Halifax Funding.

Maturities of the 2014 Senior Secured Term Loan for the remainder of 2015 and each of the next four years, in aggregate, as of June 30, 2015 were as follows (in thousands):


2015	$	2,000
2016		4,000
2017		4,000
2018		4,000
2019		381,000

	$	395,000

The components of interest expense, average interest rates (i.e., base interest rate in effect plus the spread) and average outstanding balances for the 2014 Senior Term Loan for the three and six months ended June 30, 2015 and 2014 were as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Stated interest expense	$	4,004	$	1,867	$	7,974	$	1,867
Accretion of original issue discount		95		38		189		38
Amortization of deferred financing costs		271		105		536		105

Total interest expense	$	4,370	$	2,010	$	8,699	$	2,010

Weighted average interest rate		4.2%		4.2%		4.2%		4.2%
Average borrowings	$	395,989	$	399,976⁽¹⁾		$396,481	$	399,976⁽¹⁾

⁽¹⁾	Average borrowings for the 2014 Term Loan for the three and six months ended June 30, 2014 are calculated since the inception date of the facility, or May 20, 2014.

In connection with each of the credit facilities and 2014 Senior Secured Term Loan, the Company has made customary representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. As of June 30, 2015 and December 31, 2014, the Company believes it was in compliance with the covenant requirements for all of its credit facilities and 2014 Senior Secured Term Loan.

11.

Commitments and Contingencies

Unfunded commitments to provide funds to portfolio companies are not recorded in the Company’s condensed consolidated statements of assets and liabilities. Since these commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. The Company has sufficient liquidity to fund these commitments. As of June 30, 2015, the Company’s unfunded commitments consisted of the following (in thousands):


Category / Company ⁽¹⁾
Unfunded revolvers:
Beyond Trust Software	$	1,090

Unfunded delayed draw loans:
Pacific Union Financial, LLC		11,088
Marshall Retail Group, LLC		1,200

		12,288

Unfunded unsecured bonds:
The Rockport Company, LLC		28,516

Unfunded equity commitments:
Orchard Marine, Ltd.		25,287
Star Mountain SMB Multi-Manager Credit Platform, LP		50,635
Home Partners of America, Inc.		22,050
KKR BPT Holdings Aggregator, LLC		12,500
Great American Group		58,125
Lightower		20,086

		188,683

Total Unfunded Commitments	$	230,577

⁽¹⁾	May be commitments to one or more entities affiliated with the named company.

As of June 30, 2015, the Company’s unfunded debt commitments have a fair value of approximately ($0.29) million. The Company funds its equity investments as it receives funding notices from the portfolio companies. As of June 30, 2015, the Company’s unfunded equity commitments have a fair value of zero.

In the normal course of business, the Company may enter into guarantees on behalf of portfolio companies. Under these arrangements, the Company would be required to make payments to third parties if the portfolio companies were to default on their related payment obligations. The Company has no such guarantees outstanding at June 30, 2015 and December 31, 2014.

12.

Income Taxes

During the six months ended June 30, 2015, the Company recorded foreign income tax expense of $0.20 million, of which $0.16 million represents foreign tax withholding and is recorded net against the related interest income in the condensed consolidated statements of operations. The Company incurred no federal and state income tax expense for the six months ended June 30, 2015; however, the Company recorded additional deferred tax assets of approximately $0.66 million and a corresponding valuation allowance for its Taxable Subsidiaries. The deferred tax assets are primarily comprised of net operating losses and unrealized depreciation on investments. The valuation allowance was recorded as the Company believes it is more likely than not the deferred tax asset would not be realized in a future period.

13.

Financial Highlights

The following is a schedule of financial highlights for one share of common stock during the six months ended June 30, 2015 and 2014:


	Six Months Ended June 30,
	2015		2014
OPERATING PERFORMANCE PER SHARE
Net Asset Value, Beginning of Period	$	9.79	$	10.00

Net investment income ⁽¹⁾		0.35		0.30
Net realized and unrealized gain (loss) ⁽¹⁾⁽²⁾		(0.09)		0.21

Net increase resulting from investment operations		0.26		0.51

Distributions from net investment income ⁽³⁾		(0.35)		(0.30)
Distributions from realized gains ⁽³⁾		(0.00)		(0.07)
Distributions in excess of net investment income ^{(3) (4)}		(0.05)		(0.01)

Net decrease resulting from distributions to common shareholders		(0.40)		(0.38)

Issuance of common stock above net asset value ⁽⁵⁾		0.02		0.02
Repurchases of common stock ⁽⁶⁾		—		—

Net increase resulting from capital share transactions		0.02		0.02

Net Asset Value, End of Period	$	9.67	$	10.15

INVESTMENT RETURNS
Total investment return – net price ⁽⁷⁾		1.7%		3.6%
Total investment return – net asset value ⁽⁸⁾		2.9%		5.3%

RATIOS/SUPPLEMENTAL DATA (all amounts in thousands except ratios)
Net assets, end of period	$	2,462,354	$	1,789,445
Average net assets ⁽⁹⁾	$	2,317,459	$	1,589,132
Average borrowings ⁽⁹⁾	$	826,220	$	538,986
Shares outstanding, end of period		254,564		176,261
Weighted average shares outstanding		237,366		157,531

Ratios to average net assets: ⁽⁹⁾
Total operating expenses		2.77%		3.28%
Net investment income		3.54%		2.97%
Total investment income		6.31%		6.25%
Portfolio turnover rate		6%		20%
Asset coverage ratio ⁽¹⁰⁾		2.96		4.21

⁽¹⁾	The per share data was derived by using the weighted average shares outstanding during the period.

⁽²⁾

The amount shown at this caption is the balancing figure derived from the other figures in the schedule. The amount shown at this caption for a share outstanding throughout the period may not agree with the change in the aggregate gains and losses in portfolio securities for the period because of the timing of sales of the Company’s shares in relation to fluctuating market values for the portfolio.

⁽³⁾	The per share data for distributions is the actual amount of distributions paid or payable per share of common stock outstanding during the entire period; distributions per share are rounded to the nearest $0.01.

⁽⁴⁾	See Note 8 for further information on the source of distributions from other than net investment income and realized gains.

⁽⁵⁾

The continuous issuance of common stock may cause an incremental increase in net asset value per share due to the sale of shares at the then prevailing public offering price and the receipt of net proceeds per share by the Company in excess of net asset value per share on each subscription closing date. The per share data was derived by computing (i) the sum of (A) the number of shares issued in connection with subscriptions and/or distribution reinvestment on each share transaction date times (B) the differences between the net proceeds per share and the net asset value per share on each share transaction date, divided by (ii) the total shares outstanding at the end of the period.

⁽⁶⁾	The per share impact of the Company’s repurchase of common stock is a reduction to net asset value of less than $0.01 per share during the applicable period.

⁽⁷⁾

Total investment return-net price is a measure of total return for shareholders who purchased the Company’s common stock at the beginning of the period, including distributions declared during the period. Total investment return-net price is based on (i) the purchase of one share at the public offering price, net of sales load, on the first day of the period, (ii) the sale at the net asset value per share on the last day of the period, of (A) one share plus (B) any fractional shares issued in connection with the reinvestment of monthly distributions, and (iii) distributions payable relating to one share, if any, on the last day of the period. The total investment return-net price calculation assumes that (i) monthly cash distributions are reinvested in accordance with the Company’s distribution reinvestment plan and (ii) the fractional shares issued pursuant to the distribution reinvestment plan are issued at the then current public offering price, net of sales load, on each monthly distribution payment date. Since there is no public market for the Company’s shares, the terminal sales price per share is assumed to be equal to the net asset value per share on the last day of the period presented. The Company’s performance changes over time and currently may be different than that shown above. Past performance is no guarantee of future results. Investment performance is presented without regard to sales load that may be incurred by shareholders in the purchase of the Company’s shares of common stock.

13.

Financial Highlights (continued)

⁽⁸⁾

Total investment return-net asset value is a measure of the change in total value for shareholders who held the Company’s common stock at the beginning and end of the period, including distributions declared during the period. Total investment return-net asset value is based on (i) net asset value per share on the first day of the period, (ii) the net asset value per share on the last day of the period, of (A) one share plus (B) any fractional shares issued in connection with the reinvestment of monthly distributions, and (iii) distributions payable relating to one share, if any, on the last day of the period. The total investment return-net asset value calculation assumes that (i) monthly cash distributions are reinvested in accordance with the Company’s distribution reinvestment plan and (ii) the fractional shares issued pursuant to the distribution reinvestment plan are issued at the then current public offering price, net of sales load, on each monthly distribution payment date. Since there is no public market for the Company’s shares, terminal market value per share is assumed to be equal to net asset value per share on the last day of the period presented. The Company’s performance changes over time and currently may be different than that shown above. Past performance is no guarantee of future results. Investment performance is presented without regard to sales load that may be incurred by shareholders in the purchase of the Company’s shares of common stock.

⁽⁹⁾	The computation of average net assets and average borrowings during the period is based on the daily value of net assets and borrowing balances, respectively. Ratios are not annualized.

⁽¹⁰⁾

Asset coverage ratio is equal to (i) the sum of (A) net assets at the end of the period and (B) debt outstanding at the end of the period, divided by (ii) total debt outstanding at the end of the period. For purposes of the asset coverage ratio test applicable to the Company as a business development company, the Company regards the TRS total notional amount at the end of the period, less the total amount of cash collateral posted by Halifax Funding under the TRS, as a senior security. These data are presented in Note 4 of the condensed consolidated financial statements.

14. Subsequent Events

On July 14, 2015, the Company filed a tender offer statement with the SEC on Schedule TO. The Company offered to repurchase up to 5,424,683 shares of common stock at a cash price of $9.67 per share. The tender offer will expire on August 26, 2015 at 5:00 pm central time.

On July 28, 2015, the Company’s board of directors declared distributions of $0.015483 per share for nine record dates beginning on August 4, 2015 through and including September 29, 2015.

During the period July 1, 2015 through August 11, 2015, the Company received additional net proceeds of approximately $85.91 million from its Follow-On Offering, including amounts through its distribution reinvestment plan.

On August 10, 2015, the Company’s board of directors approved a decrease in the public offering price per share of common stock under the Follow-On Offering from $11.00 to $10.75. The pricing decrease is effective for share subscriptions accepted after August 4, 2015.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion is based on the unaudited condensed consolidated financial statements as of June 30, 2015 and December 31, 2014, and for the three and six months ended June 30, 2015 and 2014. Amounts as of December 31, 2014 included in the unaudited condensed consolidated financial statements have been derived from the audited consolidated financial statements as of that date. This information should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and the notes thereto, as well as, the audited consolidated financial statements, notes and management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2014. Capitalized terms used in this Item 2 have the same meaning as in the accompanying unaudited condensed consolidated financial statements in Item 1 unless otherwise defined herein.

Cautionary Note Regarding Forward-Looking Statements

Statements contained in this Quarterly Report on Form 10-Q for the six months and the quarter ended June 30, 2015 (this “Quarterly Report”) that are not statements of historical or current fact may constitute forward-looking statements within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that do not relate strictly to historical or current facts, but reflect management’s current understandings, intentions, beliefs, plans, expectations, assumptions and/or predictions regarding the future of the Company’s business and its performance, the economy, and other future conditions and forecasts of future events, and circumstances. Forward-looking statements are typically identified by words such as “believes,” “expects,” “anticipates,” “intends,” “estimates,” “plans,” “continues,” “pro forma,” “may,” “will,” “seeks,” “should” and “could,” and words and terms of similar substance in connection with discussions of future operating or financial performance, business strategy and portfolios, projected growth prospects, cash flows, costs and financing needs, legal proceedings, amount and timing of anticipated future distributions, estimated per share net asset value of the Company’s common stock, and other matters. The Company’s forward-looking statements are not guarantees of future performance and the Company’s actual results could differ materially from those set forth in the forward-looking statements. As with any projection or forecast, forward-looking statements are necessarily dependent on assumptions, data and/or methods that may be incorrect or imprecise, and may not be realized. While the Company believes that the current expectations reflected in its forward-looking statements are based upon reasonable assumptions, such statements are inherently susceptible to a variety of risks, uncertainties, changes in circumstances and other factors, many of which are beyond the Company’s ability to control or accurately predict.

Important factors that could cause the Company’s actual results to vary materially from those expressed or implied in its forward-looking statements include, but are not limited to, economic, strategic, political and social conditions, and the following: persistent economic weakness at the global or national level, increased direct competition, changes in government regulations or accounting rules, changes in local, national and global capital market conditions, the Company’s ability to obtain or maintain credit lines, credit facilities or other borrowings on satisfactory terms, changes in interest rates, availability of proceeds from the offering of the Company’s common stock, the Company’s ability to identify suitable investments, the Company’s ability to close on identified investments, the Company’s ability to maintain the Company’s qualification as a regulated investment company and as a business development company, the ability of the Company’s advisors and their affiliates to attract and retain highly talented professionals, inaccuracies of the Company’s accounting estimates, the ability of the Company’s advisors to locate suitable borrowers for the Company’s loans and the ability of such borrowers to make payments under their respective loans. Given these uncertainties, the Company cautions you not to place undue reliance on forward-looking information.

Forward-looking statements should be read in light of the risks identified in Item 1A in Part II “Risk Factors” of this Quarterly Report, and in Item 1A of Part I “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, copies of which may be obtained from the Company’s website at www.corporatecapitaltrust.com, as well as the information in the Company’s other filings made from time to time with the U.S. Securities and Exchange Commission (the “SEC”), copies of which may be obtained from the SEC’s website at www.sec.gov.

All written and oral forward-looking statements attributable to the Company or persons acting on its behalf are qualified in their entirety by this cautionary note. Forward-looking statements speak only as of the date on which they are made; and the Company undertakes no obligation, and expressly disclaims any obligation, to publicly release the results of any revisions to its forward-looking statements made to reflect future events or circumstances, new information, changed assumptions, the occurrence of unanticipated subsequent events, or changes to future operating results over time, except as otherwise required by law.

The Company’s forward-looking statements and projections are excluded from the safe harbor protection of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

Overview

We are a non-diversified closed-end management investment company that has elected to be treated as a business development company under the 1940 Act. Formed as a Maryland corporation on June 9, 2010, we are externally managed by CNL Fund Advisors Company (“CNL”) and KKR Credit Advisors (US) LLC (“KKR”), collectively, the “Advisors,” which are responsible for sourcing potential investments, conducting due diligence on prospective investments, analyzing investment opportunities, structuring investments, determining the securities and other assets that we will purchase, retain or sell, and monitoring our portfolio on an ongoing basis. Both Advisors are registered as investment advisers with the SEC. CNL also provides the administrative services necessary for us to operate.

Investment Objective, Investment Program and Primary Investment Types

Our investment objective is to provide our shareholders with current income and, to a lesser extent, long-term capital appreciation. We pursue our investment objective by investing primarily in the debt of privately owned and thinly traded U.S. companies (also referred to as “portfolio companies”) with a focus on originated transactions sourced through the networks of our Advisors. We define originated transactions as any negotiated investment where we, through our Advisors’ direct efforts, provide funds directly to a portfolio company. We also have the ability, as granted through our SEC Exemptive Order, to co-invest in privately negotiated transactions alongside other investment funds managed by or affiliated with KKR (the “Co-Investment Transactions”). We anticipate that a substantial portion of our investment portfolio will consist of senior and subordinated debt, which we believe offer potential opportunities for superior risk-adjusted returns and income generation. Our debt investments may take the form of corporate loans or bonds, may be secured or unsecured and may, in some cases, be accompanied by warrants, options or other forms of equity participation. We may separately purchase common or preferred equity interests in transactions. We may also invest in structured products, such as collateralized loan obligations, and loan participations and assignments.

As of June 30, 2015, our investment program consisted of two main components. First, since the inception of our investment activities, we have been engaged in the direct purchase of debt and equity securities, primarily issued by portfolio companies, through both secondary market and direct lending transactions. We refer to this investment program component as our “Investment Portfolio.” Second, beginning in November 2012, we supplemented our economic exposure to portfolio companies by entering into total return swap arrangements (the “TRS”) with a commercial bank counterparty and directing the creation of a portfolio of debt investments that serve as reference assets under the TRS. We refer to this investment program component as our portfolio of TRS assets or our “TRS Portfolio.” In the case of our TRS Portfolio, we receive all (i) realized income and fees and (ii) realized capital gains generated by the TRS assets. In return, we must pay quarterly to the TRS counterparty a payment consisting of (i) realized capital losses generated by the TRS assets and (ii) financing costs that are based on (a) a floating financing rate and (b) the settled notional amount of TRS assets.

References to the term “settled notional amount” in association with the TRS mean the aggregate cost of the TRS assets underlying the TRS that are settled and owned by the counterparty. In addition, this aggregate cost serves as the basis for our payments of financing charges to the counterparty under the TRS. References to the term “total notional amount” mean the settled notional amount plus the effect of the purchase and sale cost of all TRS assets where trade settlement is pending. We will receive additional economic benefit if the value of the underlying TRS asset appreciates relative to the total notional amount through the final settlement date following termination of the agreement. Conversely, we will be required to pay the counterparty the amount, if any, by which the value of the underlying TRS asset declines relative to the total notional amount through such final settlement date. We do not own, or have physical custody of, the TRS assets and the TRS assets are not direct investments by us. Our subsidiary is required to post collateral with a custodian of at least 40% of the notional amount of each TRS asset and may be required to post additional collateral in the event the value of the TRS assets decreases below a specified amount.

Our investment strategy is focused on creating and growing an Investment Portfolio that generates superior risk-adjusted returns by carefully selecting investments through rigorous due diligence and actively managing and monitoring our Investment Portfolio. When evaluating an investment and the related portfolio company, we use the resources of our Advisors to develop an investment thesis and a proprietary view of a potential portfolio company’s intrinsic value. We believe our flexible approach to investing allows us to take advantage of opportunities that offer favorable risk/reward characteristics.

We primarily focus on the following investment types:

•

Senior Debt. We invest in senior debt, in which we generally take a security interest in the available assets of the portfolio company, including equity interests in any of its subsidiaries. These investments generally take the form of senior secured first lien loans, senior secured second lien loans or senior secured bonds. In some circumstances, our lien could be subordinated to claims of other creditors.

•

Subordinated Debt. Our subordinated debt investments are generally subordinated to senior debt and are generally unsecured. These investments are generally structured with interest-only payments throughout the life of the security, with the principal due at maturity.

•

Structured Products. We also invest in structured products, which may include collateralized debt obligations (“CDOs”), collateralized bond obligations (“CBOs”), collateralized loan obligations (“CLOs”), structured notes and credit-linked notes. The issuers of such investment products may be structured as trusts or other types of pooled investment vehicles. Such products may also involve the deposit with or purchase by an entity of the underlying investments and the issuance by that entity of one or more classes of securities backed by, or representing interests in, the underlying investments or referencing an indicator related to such investments.

•

Equity Investments. We also make selected equity investments. In addition, when we invest in senior and subordinated debt, we may acquire warrants or options to purchase equity securities or benefit from other types of equity participation. Our goal is ultimately to dispose of these equity interests and realize gains upon our disposition of such interests.

The level of our investment activity can and does vary substantially from period to period depending on many factors, including: the demand for debt from creditworthy privately owned U.S. companies, the level of merger, acquisition and refinancing activity involving private companies, the availability of credit to finance transactions, the general economic environment, the competitive investment environment for the types of investments we currently seek and intend to seek in the future, the amount of equity capital we raise from offering common stock in our company and the amount of capital we may borrow.

As a business development company, we are required to comply with certain regulatory requirements. For instance, we may not acquire any assets other than “qualifying assets” as specified in the 1940 Act unless, at the time the acquisition is made, at least 70% of our total assets are qualifying assets as determined at the end of the prior quarter (with certain limited exceptions). Qualifying assets include investments in “eligible portfolio companies.” Under the relevant SEC rules, the term “eligible portfolio company” includes private companies, companies whose securities are not listed on a national securities exchange and certain public companies that have listed their securities on a national securities exchange and have a market capitalization of less than $250 million. These rules also permit us to include as qualifying assets certain follow-on investments in companies that were eligible portfolio companies at the time of our initial investment but no longer meet the definition of eligible portfolio company at the time of the follow-on investment.

Revenues

We generate revenues primarily in the form of interest on the debt securities of portfolio companies that we acquire and hold for investment purposes. Our investments in debt securities generally have an expected maturity of three to ten years, although we have no lower or upper constraint on maturity, and typically earn interest at fixed or floating rates. Interest on our debt securities is generally payable to us quarterly or semi-annually. Some of our investments in debt securities contain payment-in-kind (“PIK”) interest provisions. The outstanding principal amount of our debt securities and any accrued but unpaid interest will generally become due at the maturity date. In addition, we may generate revenue in the form of dividends from equity investments, prepayment fees, commitment fees, origination fees and fees for providing significant managerial assistance. While the TRS assets also generate interest income and fees, such amounts, net of the financing expenses, are recognized as (i) realized gains from derivative investments pursuant to generally accepted accounting principles (“GAAP”) when payable to us quarterly and (ii) unrealized gains from derivative investments for any accrued but unpaid amounts.

Operating Expenses

Our primary operating expenses include an investment advisory fee and, depending on our operating results, performance-based incentive fees, interest expense, administrative expenses, custodian and accounting fees, other third-party professional services and expenses and amortization of deferred offering expenses. The investment advisory fee and performance-based incentive fees compensate the Advisors for their services in identifying, evaluating, negotiating, closing and monitoring our investments.

Financial and Operating Highlights

The following table presents our financial and operating highlights as of June 30, 2015 and December 31, 2014, and the six months ended June 30, 2015 and 2014:


	June 30,			December 31,
As of *(in thousands, except ratios, share and per share amounts)*	2015			2014
Total assets	$	3,680,920		$	2,971,720
Adjusted total assets (Total assets, net of payable for investments purchased)	$	3,517,785		$	2,936,832
Investments in portfolio companies	$	3,246,006		$	2,720,571
Borrowings - credit facilities and term loan, net of discount	$	1,023,417		$	772,678
Deemed borrowings (TRS implied leverage classified as senior securities)	$	229,520		$	172,041
Net assets	$	2,462,354		$	2,145,821
Net asset value per share	$	9.67		$	9.79
Leverage ratio (Borrowings + Deemed borrowings)/Adjusted total assets)		36	%		32	%

Activity for the Six Months Ended	June 30,
*(in thousands, except ratios, share and per share amounts)*	2015			2014
Average net assets	$	2,317,459		$	1,589,132
Average borrowings under credit facilities and term loan	$	826,220		$	538,986
Cost of investments purchased	$	990,813		$	811,400
Sales, principal payments and other exits	$	427,865		$	644,028
Net investment income	$	81,950		$	47,244
Net realized gains on investments, derivative instruments and foreign currency transactions	$	1,256		$	11,207
Net change in unrealized appreciation (depreciation) on investments, derivative instruments and foreign currency translation	$	(21,998	)	$	22,397
Net increase in net assets resulting from operations	$	61,208		$	80,848
Total distributions declared	$	95,575		$	59,933
Net investment income before unearned incentive fees per share	$	0.35		$	0.34
Net investment income per share	$	0.35		$	0.30
Earnings per share	$	0.26		$	0.51
Distributions declared per share outstanding for the entire period	$	0.40		$	0.38

Summary of Common Stock Offerings for the Six Months Ended	June 30,
*(in thousands, except ratios, share and per share amounts)*	2015			2014
Gross proceeds, excluding reinvestment of distributions	$	354,609		$	337,856
Net proceeds to Company, excluding reinvestment of distributions	$	322,139		$	306,156
Reinvestment of distributions	$	39,102		$	38,289
Average net proceeds per share	$	9.90		$	10.17
Shares issued in connection with Offerings, excluding reinvestment of distributions		32,539,230			30,103,786
Shares issued in connection with reinvestment of distributions		3,949,739			3,764,891

Business Environment

Although financial conditions have improved significantly since the recession of 2008-2009, our directly originated investments continue to have higher all-in yields than comparable secondary market debt; therefore, we maintain a focus on directly originated investment opportunities. As the capital markets environment has improved, large companies have been able to access capital with relative ease. However, there remain a substantial number of companies that, for a variety of reasons, are unable to access the syndicated debt markets on attractive terms. In the United States, access is often limited by the issuer’s size, complicated industry dynamics, regulatory overhang, and unique or complex capital structures. Given these market conditions, it is our ongoing view that providing senior and subordinated debt capital to such companies represents an attractive risk-adjusted return. Since receiving our SEC Exemptive Order allowing Co-Investment Transactions, directly originated investments have grown to approximately 51% of our Investment Portfolio. Furthermore, we believe future lending opportunities are likely to expand given the current regulatory setting, Federal Reserve tapering and a potential change in the current Central Bank-subsidized low-interest rate environment.

Considering the recent dynamic market environment in credit, we continue to be mindful of a number of key themes. Notably, volatility has returned, driven primarily by geopolitical concerns as well as sector specific dislocations, such as in the energy sector. Despite this volatility, our basic investment premise emphasizing directly originated and other private credit investments remains unchanged. We believe that privately originated transactions to both U.S. and foreign middle market companies will outperform low-yielding government bonds and high grade credit over the long-term. Meanwhile, we continue to scan for attractive opportunities in secondary credit markets resulting from specific situations and volatility in market fundamentals.

We believe that the current economic recovery in the U.S. will continue and that regulations which burden commercial bank-lending practices will persist and expand the investment opportunities for non-bank investors and investment entities. However, in an environment where interest rates are anticipated to rise, we maintain a degree of caution. We believe continued focus on the fundamentals, including rigorous due diligence, robust credit underwriting and direct structuring of investments will continue to best position the portfolio to protect principal and generate attractive risk-adjusted returns over the long-term.

Portfolio and Investment Activity

Portfolio Investment Activity for the Six Months ended June 30, 2015 and 2014

The following table summarizes our investment activity as of and for the six months ended June 30, 2015 and 2014, excluding our short term investments:


	Investment Activity Summary as of and for the Six Months Ended June 30, *($ in thousands)*
	2015						2014
	Investment Portfolio			TRS Portfolio			Investment Portfolio			TRS Portfolio
Total Fair Value	$	3,246,006		$	388,883		$	2,149,267		$	118,400
Incremental Purchases	$	990,813		$	147,812		$	811,400		$	112,878
Investment Sales	$	188,774		$	13,952		$	394,557		$	39,646
Principal Payments	$	239,091		$	29,707		$	249,471		$	9,441
No. Portfolio Companies		117			59			94			36
Portfolio Company Additions		22			18			21			24
Portfolio Company Exits		(17	)		(6	)		(21	)		(8	)
No. Debt Investments		128			63			106			37
Debt Investment Additions		25			22			42			27
Debt Investment Exits		(24	)		(8	)		(39	)		(10	)
No. Structured Product Investments		4			—			3			—
No. Equity/Other Investments		30			—			15			—

While the Investment Portfolio and the TRS Portfolio are accounted for and presented as two distinct portfolios, the two portfolios had 29 and 14 debt investment positions and 35 and 25 portfolio companies in common as of June 30, 2015 and 2014, respectively. The changes in the fair value of our Investment Portfolio and our TRS Portfolio are directly related to (i) the changes in their cost basis and notional amounts, respectively, as a result of incremental purchases, sales and principal payments as described in the table above, and (ii) the changes in fair value for assets held at the beginning and end of the period. The net change in unrealized appreciation (depreciation) for the six months ended June 30, 2015 and 2014 was $(28.64) million and $24.15 million, respectively, for our Investment Portfolio, and $3.17 million and $(0.72) million, respectively, for our TRS Portfolio. See “Results of Operations – Net Change in Unrealized Appreciation or Depreciation” below for further details relating to the changes.

As discussed above under “— Overview,” since receiving our SEC Exemptive Order, we have increased our focus on originated investments, including Co-Investment Transactions, as a main element of our investment strategy. Co-Investment Transactions give us the opportunity to participate in those investments alongside KKR’s institutional clients and proprietary funds. Our total origination activity in Co-Investment Transactions, at par, plus future expected fundings related to such investments, totaled approximately $369.53 million for the six months ended June 30, 2015, representing 51.6% of approximately $715.75 million in total originations by KKR in Co-Investment Transactions for the period.

The following summarizes our investment activity associated with our investment focus on originated debt investments during the six months ended June 30, 2015 and 2014 and the status of originated investments held in the Investment Portfolio as of June 30, 2015 and December 31, 2014:


	June 30,
Originated Investment Activity for the Six Months Ended *($ in thousands)*	2015		2014
Number of new originated investments, by issuer		6		11
Total amount of originated investments, at cost ⁽¹⁾	$	397,297	$	307,850
Originated investments as a percentage of total investment activity		40.1%		37.9%
Fee income recognized in connection with originated investments	$	2,662	$	977

Originated Investments Summary as of *($ in thousands)*	June 30, 2015		December 31, 2014
Total originated investments, at fair value	$	1,661,755	$	1,405,625
Total originated investments as a percentage of total Investment Portfolio, at fair value		51.2%		51.7%
Estimated forward-looking annual yield of originated debt investments ⁽²⁾⁽³⁾		10.2%		10.8%

⁽¹⁾	The total amount of originated investments, at cost, includes new issuers during the reporting periods and any follow-on originated investments from existing issuers.

⁽²⁾

The estimated forward-looking annual yield on debt investments is based on amortized cost as of the end of the applicable period. The estimated forward-looking annual yield for our debt investments is represented by a fraction, (i) the numerator of which is the sum of (a) the annual interest rate of each debt investment multiplied by its par amount as of the end of the applicable reporting period, plus (b) the annual amortization of the purchase or original issue discount or premium of each debt investment, if any; and (ii) the denominator of which is the total amortized cost of all debt investments included in the calculated group as of the end of the applicable reporting period.

⁽³⁾

The estimated forward-looking annual yield of originated debt investments is higher than what investors in our Company will realize because it does not reflect expenses of the Company or any sales load. Total investment return – net price and total investment return – net asset value were 1.7% and 2.9 %, respectively, as of June 30, 2015. See Note 13. “Financial Highlights” in the accompanying unaudited condensed consolidated financial statements for information on how such returns were calculated.

The following information presents additional analysis of our Investment Portfolio and TRS Portfolio as of June 30, 2015 and December 31, 2014, excluding our short-term investments. Our investment program is not managed with any specific asset category target goals. The primary investment type concentrations include (i) senior debt, and (ii) subordinated debt securities.


	Investment Portfolio as of *(in thousands)*
	June 30, 2015				December 31, 2014
Asset Category	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Senior debt
Senior secured loans - first lien	$	1,418,667	$	1,376,839	$	1,152,555	$	1,128,244
Senior secured loans - second lien		935,632		927,743		858,829		843,957
Senior secured bonds		221,592		210,834		154,125		147,817

Total senior debt		2,575,891		2,515,416		2,165,509		2,120,018
Subordinated debt		416,973		387,886		459,004		433,755
Structured products		85,721		92,596		33,721		36,421
Equity/Other		263,382		250,108		129,658		130,377

Total	$	3,341,967	$	3,246,006	$	2,787,892	$	2,720,571


	TRS Portfolio as of *(in thousands)*
	June 30, 2015				December 31, 2014
Asset Category	Notional Amount		Fair Value		Notional Amount		Fair Value
Senior debt
Senior secured loans - first lien	$	342,909	$	340,523	$	255,966	$	250,662
Senior secured loans - second lien		40,581		39,858		22,802		21,932
Senior secured bonds		7,315		7,141		7,315		7,066

Total senior debt		390,805		387,522		286,083		279,660
Subordinated debt		1,355		1,361		1,658		1,630

Total	$	392,160	$	388,883	$	287,741	$	281,290

The following table presents a summary of interest rate and maturity statistics for the debt investments, based on par value, in our Investment Portfolio and the TRS Portfolio as of June 30, 2015 and December 31, 2014:


	Investment Portfolio as of						TRS Portfolio as of
Floating interest rate debt investments:	June 30, 2015			December 31, 2014			June 30, 2015			December 31, 2014
Percent of debt portfolio		72.0	%		67.5	%		97.2	%		96.1	%
Percent of floating rate debt investments with interest rate floors		94.7	%		97.9	%		99.0	%		98.6	%
Weighted average interest rate floor		1.1	%		1.1	%		1.0	%		1.0	%
Weighted average coupon spread to base rate		736 bps			748 bps			425 bps			419 bps
Weighted average years to maturity		5.3			5.4			5.0			5.3

Fixed interest rate debt investments:
Percent of debt portfolio		28.0	%		32.5	%		2.8	%		3.9	%
Weighted average coupon rate		10.5	%		10.9	%		9.9	%		9.9	%
Weighted average years to maturity		5.4			5.3			5.2			5.7

All of our floating interest rate debt investments have base rate reset frequencies of less than twelve months with the majority resetting at least quarterly. The three-month LIBOR, the most prevalent index employed among our floating interest rate debt investments, ranged between 0.251% and 0.288% during the six months ended June 30, 2015 and the terminal value was 0.283% on June 30, 2015. Base rate resets for floating interest rate investments will only result in interest income increases when the reset base interest rate exceeds the associated interest rate floor.

Our estimated forward-looking annual yield on debt investments was 9.6% as of June 30, 2015, compared to 10.0% as of December 31, 2014. The change is partly attributable to an increase in our investment concentration in first lien senior secured loans which generally have lower interest rates than second lien loans or subordinated debt. As of June 30, 2015, our first lien senior secured loans were 42.5% of our Investment Portfolio as compared to 41.3% as of December 31, 2014, based on amortized cost. The estimated forward-looking annual yield on debt investments is higher than what investors in our Company will realize because it does not reflect expenses of the Company or any sales load. Total investment return—net price and total investment return – net asset value were 1.7% and 2.9%, respectively, for the six months ended June 30, 2015. See Note 13. “Financial Highlights” in the accompanying unaudited condensed consolidated financial statements.

The following table shows the credit ratings of the investments in our Investment Portfolio and TRS Portfolio, based upon the rating scale of Standard & Poor’s Ratings Services, as of June 30, 2015 and December 31, 2014:


	Investment Portfolio as of *(in thousands)*										TRS Portfolio as of *(in thousands)*
	June 30, 2015					December 31, 2014					June 30, 2015					December 31, 2014
Standard & Poor’s rating	Fair Value		Percentage of Portfolio			Fair Value		Percentage of Portfolio			Fair Value		Percentage of Portfolio			Fair Value		Percentage of Portfolio
BB-	$	29,622		0.9	%	$	21,536		0.8	%	$	1,410		0.4	%	$	27,610		9.8	%
B+		230,171		7.1			161,172		5.9			34,031		8.7			47,837		17.0
B		343,000		10.6			174,797		6.4			75,978		19.5			127,542		45.3
B-		330,815		10.2			331,145		12.2			170,048		43.7			53,309		19.0
CCC+		586,966		18.1			617,925		22.7			79,349		20.4			9,162		3.3
CCC		215,263		6.6			156,206		5.7			14,661		3.8			4,575		1.6
CCC-		47,347		1.4			53,089		2.0			4,884		1.3			11,255		4.0
D		9,708		0.3			567		—			4,942		1.3			—		—
Not rated		1,453,114		44.8			1,204,134		44.3			3,580		0.9			—		—

Total	$	3,246,006		100.0	%	$	2,720,571		100.0	%	$	388,883		100.0	%	$	281,290		100.0	%

The table below presents a summary of our debt investment positions held in our Investment Portfolio that feature PIK interest provisions for some or all of the applicable portfolio company’s interest payment obligations.


PIK Summary as of *($ in thousands)*	June 30, 2015			December 31, 2014
Total number of all investments with PIK feature		20			22
Par value of all investments with PIK feature	$	599,657		$	609,971
Number of originated investments with PIK feature and active PIK election		10			9
Par value of originated investments with PIK feature and active PIK election	$	451,199		$	402,244
Total number of all investments that have active PIK election		17			17
Par value of all investments that have active PIK election	$	573,249		$	498,706
Percent of debt investment portfolio with active PIK election, at par value		18.8	%		18.5	%

	June 30,
PIK Interest Income Activity for the Six Months Ended *(in thousands)*	2015			2014
PIK interest income	$	15,971		$	17,649
PIK interest income as a percentage of interest income		11.9	%		18.1	%
PIK interest income as a percentage of total investment income		10.9	%		17.8	%

As of June 30, 2015, our Investment Portfolio consisted of 117 portfolio companies, diversified across 21 industry classifications, as compared to our Investment Portfolio as of December 31, 2014 that consisted of 112 portfolio companies, diversified across 21 distinct industry classifications. As of June 30, 2015, the TRS Portfolio consisted of 59 portfolio companies, diversified across 17 distinct industry classifications, as compared to our TRS Portfolio as of December 31, 2014 that consisted of 47 portfolio companies, diversified across 15 distinct industry classifications. The following table presents a summary of our Investment Portfolio and TRS Portfolio arranged by industry classifications of the portfolio companies as of June 30, 2015 and December 31, 2014:


	Investment Portfolio as of *(in thousands)*										TRS Portfolio as of *(in thousands)*
	June 30, 2015					December 31, 2014					June 30, 2015					December 31, 2014
Industry Classification	Fair Value		Percentage of Portfolio			Fair Value		Percentage of Portfolio			Fair Value		Percentage of Portfolio			Fair Value		Percentage of Portfolio
Software & Services	$	458,417		14.1	%	$	394,377		14.5	%	$	88,860		22.9	%	$	68,344		24.3	%
Consumer Durables & Apparel		392,090		12.1			458,310		16.8			19,092		4.9			9,072		3.2
Capital Goods		305,008		9.4			226,158		8.3			36,309		9.3			37,966		13.5
Energy		223,853		6.9			226,564		8.3			—		—			—		—
Diversified Financials		222,189		6.8			139,597		5.1			—		—			—		—
Retailing		205,245		6.3			218,902		8.0			34,682		8.9			19,445		6.9
Technology Hardware & Equipment		201,569		6.2			181,005		6.7			8,511		2.2			3,303		1.2
Commercial & Professional Services		185,413		5.7			58,540		2.2			6,267		1.6			2,009		0.7
Health Care Equipment & Services		153,242		4.7			187,834		6.9			48,540		12.5			31,296		11.1
Materials		130,617		4.0			96,320		3.5			23,033		5.9			3,669		1.3
Automobiles & Components		121,481		3.7			118,322		4.3			—		—			—		—
Food & Staples Retailing		114,516		3.5			74,289		2.7			12,716		3.3			7,697		2.7
Telecommunications Services		100,340		3.1			80,584		3.0			9,850		2.5			18,033		6.4
Media		92,056		2.8			43,915		1.6			28,399		7.3			27,251		9.7
Transportation		80,631		2.5			63,510		2.3			12,030		3.1			—		—
Food, Beverage & Tobacco		68,056		2.1			39,108		1.4			8,831		2.3			8,758		3.1
Pharmaceuticals, Biotechnology & Life Science		61,220		1.9			5,264		0.2			10,239		2.6			12,639		4.5
Real Estate		58,739		1.8			28,213		1.0			12,771		3.3			—		—
Consumer Services		38,833		1.2			48,047		1.8			4,990		1.3			8,363		2.9
Remaining Industries		32,491		1.2			31,712		1.4			23,763		6.1			23,445		8.5

Total	$	3,246,006		100.0	%	$	2,720,571		100.0	%	$	388,883		100.0	%	$	281,290		100.0	%

Capital Resources and Liquidity

Sources and Uses of Capital

Our capital resources and liquidity are derived primarily from (i) equity capital proceeds of our Offerings, (ii) borrowings, (iii) cash flows from operations, including investment sales and repayments, and (iv) reinvested distributions. Our primary uses of funds include (i) investments in debt of portfolio companies, (ii) distributions to our shareholders, (iii) advisory fees, (iv) interest expense and other financing fees, (v) periodic reductions in the outstanding principal amounts on our borrowings, and (vi) operating expenses. We have used, and expect to continue to use, proceeds from the turnover of our Investment Portfolio, equity capital proceeds from our Offerings, and borrowings under our credit facilities to finance our investment activities primarily focused on directly originated investments in portfolio companies. In addition, in January 2015, we filed our Shelf Registration Statement with the SEC that was declared effective on January 16, 2015, under which we may offer, from time to time, up to $750 million of our debt and/or equity securities, on terms to be determined at the time of each such offering.

Liquidity

As of June 30, 2015, we had the following sources of immediate liquidity available to us:


*(in thousands)*	Amount
Cash and Foreign Currency	$	128,832
Short Term Investments		31,922
Credit Facilities-Effective Borrowing Capacity ⁽¹⁾		358,447

Total	$	519,201

⁽¹⁾	Effective borrowing capacity represents additional amounts that we could borrow from our credit facilities based on collateral in place as of June 30, 2015.

In addition to the sources of immediate liquidity listed above, we continue to raise capital through our Follow-On Offering, although we anticipate terminating the Follow-On Offering on or around December 31, 2015. As of June 30, 2015, we had approximately 92 million additional shares of common stock available for sale through the Follow-On Offering. In addition, our Shelf Registration Statement provides us the ability of offer, from time to time, up to $750 million of debt and/or equity securities.

Borrowings-Credit Facilities and Term Loan

Our outstanding borrowings as of June 30, 2015 and December 31, 2014 were as follows:


	As of June 30, 2015							As of December 31, 2014
*(in thousands)*	Total Aggregate Principal Amount Committed		Principal Amount Outstanding		Carrying Value			Total Aggregate Principal Amount Committed		Principal Amount Outstanding		Carrying Value
Deutsche Bank Credit Facility ⁽¹⁾	$	150,000	$	150,000	$	150,000		$	340,000	$	47,000	$	47,000
BNP Credit Facility ⁽¹⁾		200,000		163,000		163,000			200,000		100,450		100,450
Senior Secured Revolving Credit Facility ^{(1) (2)}		675,000		317,000		317,000			655,000		230,000		230,000

Total credit facilities		1,025,000		630,000		630,000			1,195,000		377,450		377,450
2014 Senior Secured Term Loan		395,000		395,000		393,417	⁽³⁾		397,000		397,000		395,228	⁽³⁾

Total	$	1,420,000	$	1,025,000	$	1,023,417		$	1,592,000	$	774,450	$	772,678

⁽¹⁾	Subject to borrowing base and leverage restrictions. As of January 9, 2015, CCT Funding LLC (“CCT Funding”) entered into an amendment to the Deutsche Bank Credit Facility whereby the aggregate amount of commitments thereunder was decreased by $190 million, for a total facility size of $150 million.

⁽²⁾	Senior Secured Revolving Credit Facility includes a provision that allows us, under certain circumstances, to increase the size of the Senior Secured Revolving Credit Facility to a maximum of $900 million.

⁽³⁾	Comprised of outstanding principal less unaccreted original issue discount.

For the six months ended June 30, 2015 and 2014, our total all-in cost of financing, including fees and expenses, was 3.96% and 3.85%, respectively. We expect to continue to draw on the revolving credit facilities to finance our acquisition of investment positions in portfolio companies. We may further increase our aggregate borrowing capacity in the future beyond the current combined commitment amount of $1.42 billion that is available to us from our revolving credit facilities and term loan, and we may add additional credit arrangements or other forms of financing arrangements, including joint ventures.

See Note 10. “Borrowings” in our unaudited condensed consolidated financial statements for additional disclosures regarding our borrowings.

Total Return Swaps

In 2012, Halifax Funding LLC (“Halifax Funding”), our wholly owned, special purpose financing subsidiary, entered into a TRS arrangement with The Bank of Nova Scotia (“BNS”).

The obligations of Halifax Funding under the TRS Agreements are nonrecourse to us and our exposure under the TRS Agreements is limited to the amount of collateral that is posted by Halifax Funding pursuant to the terms of the TRS Agreements. As of June 30, 2015, the posted collateral of $162.64 million equaled 41.5% of the total notional amount, as compared to $115.70 million, or 40.2% of the total notional amount as of December 31, 2014. The minimum required collateral amount (40% of the total notional amount, plus additional required collateral due to concentration limits in the TRS Portfolio) was $156.86 million as of June 30, 2015.

Halifax Funding may terminate the TRS Agreements at any time upon providing at least 30 days’ notice prior to the proposed settlement date of the TRS assets related to such termination. In the absence of early termination, the TRS Agreements will terminate on January 15, 2016. In the event of early termination of the TRS Agreements, Halifax Funding may be required to pay an early termination fee. Management anticipates the Company will seek to modify, extend or renew the agreements with BNS prior to the scheduled expiration of the TRS Agreements.

See Note 4. “Derivative Instruments” in our unaudited condensed consolidated financial statements for additional disclosures on the TRS.

Commitments and Contingencies

See Note 11. “Commitments and Contingencies” in our unaudited condensed consolidated financial statements for information on our commitments and contingencies as of June 30, 2015.

Distributions to Shareholders

We pay monthly distributions to our shareholders in the form of cash. Shareholders may elect to reinvest their distributions as additional shares of our common stock under our distribution reinvestment plan. Dividends may be taxable to our shareholders even if they are reinvested in additional shares of our common stock. The following table reflects the cash distributions per share and the total amount of distributions that we have declared on our common stock during each of the quarters during the six months ended June 30, 2015 and 2014:


(in thousands, except per share amounts)	Per Share		Amount
Quarter Ended:
June 30, 2015 (13 record dates)	$	0.201279	$	49,745
March 31, 2015 (13 record dates)		0.201279		45,830

	$	0.402558	$	95,575

Quarter Ended:
June 30, 2014 (13 record dates)	$	0.201279	$	33,170
March 31, 2014 (12 record dates)		0.180048		26,763

	$	0.381327	$	59,933

Approximately 51% of the distributions we declared in each of the six months ended June 30, 2015 and 2014 were reinvested in shares of our common stock by participants in our distribution reinvestment plan and the reinvested distributions represent an additional source of capital to us. Net investment income and realized capital gains represent the primary sources for us to pay distributions. See Note 8. “Distributions” in our unaudited condensed consolidated financial statements for additional disclosures on distributions.

We estimate we had sufficient taxable income to support 100% of our declared distributions for the six months ended June 30, 2015. We do not expect to use equity capital or borrowed funds to pay distributions to shareholders nor do we expect any portion of our distributions paid in 2015 to be treated as a return of capital for tax purposes. We routinely disclose the sources of funds used to pay distributions to our shareholders in periodic reports that accompany (i) quarterly account statements and (ii) monthly

distribution checks that are prepared and sent directly by our transfer agent to our shareholders. See Note 8. “Distributions” to the unaudited condensed consolidated financial statements for a discussion of the sources of funds used to pay distributions on a GAAP basis for the periods presented.

Results of Operations

As of June 30, 2015, the fair value of our investments totaled $3.25 billion for our Investment Portfolio and $388.88 million for our TRS Portfolio. The majority of our investments at June 30, 2015 consisted of debt investments. See the section entitled “Portfolio and Investment Activity” above for a discussion of the general terms and characteristics of our investments, and for information regarding investment activities during the six months ended June 30, 2015 and 2014. The growth of our Investment Portfolio was the primary contributing factor to the significant increases in investment income, operating expenses, investment advisory fees, net investment income and net assets between the comparative periods, as discussed below.

The following is a summary of our operating results for the three and six months ended June 30, 2015 and 2014:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
*(in thousands)*	2015			2014			2015			2014
Total investment income	$	72,166		$	49,358		$	146,120		$	99,291
Total operating expense		(29,387	)		(22,825	)		(64,129	)		(52,047	)
Income tax expense		(19	)		—			(41	)		—

Net investment income		42,760			26,533			81,950			47,244
Net realized gains (losses)		(17,466	)		222			1,256			11,207
Net change in unrealized appreciation (depreciation)		4,130			9,601			(21,998	)		22,397

Net increase in net assets resulting from operations	$	29,424		$	36,356		$	61,208		$	80,848

Investment income

Investment income consisted of the following for the three and six months ended June 30, 2015 and 2014:


	Three Months Ended June 30,				Six Months Ended June 30,
*(in thousands)*	2015		2014		2015		2014
Interest income	$	60,566	$	37,115	$	117,959	$	79,693
Payment-in-kind interest income		9,163		10,574		15,971		17,649

Total interest income		69,729		47,689		133,930		97,342
Fee income		1,883		1,086		11,484		1,362
Dividend and other income		554		583		706		587

Total investment income	$	72,166	$	49,358	$	146,120	$	99,291

The increase in interest income was due primarily to the growth of our portfolio of debt investments. Our average debt investment balance was $2.94 billion and $2.87 billion during the three and six months ended June 30, 2015, respectively, as compared to $1.92 billion and $1.99 billion during the same periods in 2014, for an increase of 52.6% and 43.9%, respectively, based on par value. Interest income as a percentage of our average investment balance decreased during the three and six months ended June 30, 2015, as compared to the same periods in 2014, primarily due to an increase in our investment concentration in first lien senior secured loans which generally have lower interest rates than second lien loans or subordinated debt. As of June 30, 2015, our first lien senior secured loans were 42.5% of our Investment Portfolio, as compared to 35.8% as of June 30, 2014, based on amortized cost. Variations in interest income are also partly due to nonrecurring recognition of prepayment penalties and unamortized loan fees and discounts upon the prepayment of debt investments. We recorded interest income from these sources in the combined amount of $4.0 million and $6.0 million for the three and six months ended June 30, 2015, respectively, and $0.95 million and $8.32 million for the three and six months ended June 30, 2014, respectively. For the three and six months ended June 30, 2015, 13.1% and 11.9%, respectively, of our total interest income was attributable to PIK interest income, as compared to 22.2% and 18.1% for the three and six months ended June 30, 2014, respectively. As of June 30, 2015, our estimated forward-looking debt portfolio yield was 9.6% based on amortized cost, as defined above in “Portfolio and Investment Activity.” As of June 30, 2015, approximately 72.0% of our debt investments had floating rate interest; therefore, changes in interest rates could have a material impact on our interest income in the future. See Item 3. “Quantitative and Qualitative Disclosures About Market Risk” for further information on the impact interest rate changes could have on our results of operations.

Interest income earned on TRS assets is not included in investment income in the unaudited condensed consolidated statements of operations, but rather is recorded as part of (i) realized gains or losses on derivative instruments in connection with quarterly TRS settlement payments and (ii) unrealized appreciation (depreciation) on derivative instruments for amounts not yet received from the counterparty as of period end.

Our fee income is transaction based fees and are nonrecurring. The increase in fee income for the six months ended June 30, 2015 was primarily due to an amendment fee received in the amount of $7.76 million earned during the first quarter of 2015 from one of our portfolio companies seeking financial covenant relief and an increase in capital structuring fees earned related to our Co-Investment Transactions. Going forward, we expect to earn additional structuring service fees on Co-Investment Transactions as a result of our persistent focus on direct lending activities. See Note 7. “Fee Income” in our unaudited condensed unconsolidated financial statements for additional information on fee income.

Operating expenses

Our operating expenses for the three and six months ended June 30, 2015 and 2014 were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
*(in thousands)*	2015		2014		2015		2014
Investment advisory fees	$	17,002	$	11,264	$	32,137	$	21,945
Performance-based incentive fees		—		1,817		7,983		11,603
Interest expense		8,276		5,730		16,074		10,211
Offering expenses		1,198		1,799		2,641		3,674
Administrative services		600		708		1,314		1,392
Professional services		829		531		1,367		1,050
Custodian and accounting fees		311		182		581		378
Director fees and expenses		194		124		320		291
Other		977		670		1,712		1,503

Total operating expenses	$	29,387	$	22,825	$	64,129	$	52,047

Investment advisory fees and performance-based incentive fees – Our investment advisory fees are calculated at an annual rate of 2% of our average gross assets; therefore, the increase in these fees for the three and six months ended June 30, 2015 was primarily attributable to the net increase in our gross assets.

Our Advisors are also eligible to receive incentive fees based on our performance. Our performance-based incentive fees, which are comprised of two parts, consisted of the following for the three and six months ended June 30, 2015 and 2014:


	Three Months Ended June 30,				Six Months Ended June 30,
*(in thousands)*	2015		2014		2015		2014
Subordinated incentive fee on income	$	—	$	—	$	7,983	$	5,163
Incentive fee on capital gains		—		1,817		—		6,440

Total performance-based incentive fees	$	—	$	1,817	$	7,983	$	11,603

The subordinated incentive fee on income is payable to our Advisors each calendar quarter if our pre-incentive fee net investment fee income (as defined in the Investment Advisory Agreement and approved by our board of directors) exceeds a 1.75% quarterly preference return to our shareholders (the ratio of pre-incentive fee net investment income divided by average adjusted capital).

The annual incentive fee on capital gains recorded for GAAP purposes is equal to (i) 20% of our realized and unrealized capital gains on a cumulative basis since inception, net of all realized capital losses and unrealized depreciation on a cumulative basis from inception, less (ii) the aggregate amount of any previously paid incentive fees on capital gains. As discussed in Note 6. “Related Party Transactions” in our unaudited condensed consolidated financial statements, the calculation of performance-based incentive fees disregards any net realized and unrealized gains associated with the TRS interest spread. In addition, for financial reporting purposes, in accordance with GAAP, we include unrealized appreciation on our Investment Portfolio and derivative instruments in the calculation of the incentive fee on capital gains; however, such amounts are not payable by us unless and until the net unrealized appreciation is actually realized. The actual amount of the incentive fee on capital gains that is due and payable to the Advisors is determined at the end of the calendar year.

The components of incentive fees on capital gains consisted of the following for the three and six months ended June 30, 2015 and 2014:


	Three Months Ended June 30,					Six Months Ended June 30,
*(in thousands)*	2015		2014			2015		2014
Incentive fees accrued on net realized gains ⁽¹⁾	$	—	$	(1,043	)	$	—	$	660
Incentive fees accrued for GAAP purposes on unrealized gains ⁽²⁾		—		2,860			—		5,780

	$	—	$	1,817		$	—	$	6,440

⁽¹⁾	Amount is based on cumulative realized gains, net of cumulative realized losses since inception and unrealized losses as of the end of the applicable period, less prior incentive fees paid. The incentive fee earned and payable to the Advisors is determined at the end of each calendar year.

⁽²⁾	This amount is not payable to the Advisors. Represents accrual for GAAP reporting purposes only for incentive fee on unrealized gains as of the end of the applicable period.

The Advisors did not earn any incentive fee on capital gains for the six months ended June 30, 2015 or the year ended December 31, 2014. As of June 30, 2015, we had unrealized losses of $121.16 million in excess of our cumulative realized net capital gains since inception. Due to the cumulative nature of the incentive fee on capital gains, we will not owe the Advisors any incentive fees on capital gains for future years until such time, if any, that our cumulative realized net capital gains since inception exceed our unrealized losses as of a particular measurement date by $11.61 million.

See “—Contractual Obligations —Investment Advisory Agreements,” below for further details about the performance-based incentive fees.

Interest expense - The components of interest expense for the three and six months ended June 30, 2015 and 2014 were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
*(in thousands)*	2015		2014		2015		2014
Stated interest expense	$	6,728	$	3,692	$	12,874	$	7,288
Unused commitment fees		687		1,269		1,438		1,635
Amortization of deferred financing costs		766		731		1,573		1,250
Accretion of discount on term loan		95		38		189		38

Total interest expense	$	8,276	$	5,730	$	16,074	$	10,211

The increase in interest expense during the six months ended June 30, 2015 was primarily attributable to (i) the increase in our weighted average debt outstanding to $826.22 million, as compared to $538.99 million for the same period in 2014, and (ii) an increase in our all-in cost of financing, including fees and expenses, to 3.96%, as compared to 3.85% for the same period in 2014. The increase in our all-in cost of financing is due primarily to a higher stated interest rate on our 2014 Senior Secured Term Loan as compared to our other credit facilities and the amortization of upfront fees incurred on both our Senior Secured Revolving Credit Facility and 2014 Senior Secured Term Loan. For the three months ended June 30, 2015, our weighted average debt outstanding increased to $882.53 million, as compared to $493.56 million for the same period in 2014, and our annualized all-in cost of financing, including fees and expenses, decreased to 3.81%, as compared to 4.73% for the same period in 2014. The all-in cost of financing was higher during the three months ended June 30, 2014 because the proceeds from our 2014 Senior Secured Term Loan, received in May 2014, were initially used to pay down other, lower-cost debt. Our all-in cost of financing will fluctuate between periods depending on the relative use of the 2014 Senior Secured Term Loan as compared to our other credit facilities, which bear lower stated interest rates.

Our performance-based incentive fees and interest expense, among other things, may increase or decrease our overall operating expenses and expense ratios relative to comparative periods depending on portfolio performance, an increase or reduction in borrowed funds and borrowing commitments, and changes in benchmark interest rates, such as LIBOR, among other factors.

All other operating expenses – In general, our other operating expenses increased period over period due to increased administrative and professional services associated with our owning a larger portfolio of investments.

During the three and six months ended June 30, 2015, the ratio of annualized core operating expenses (excluding investment advisory fees, performance-based incentive fees, interest expense, and offering expenses) to average net assets was 0.48% and 0.46%, respectively, as compared to 0.53% and 0.59% for the same periods in 2014. As our asset base and number of shareholders have grown, our general and administrative expenses have increased, but at a slower rate compared to the growth rate in the asset base. We expect certain variable operating expenses to continue to increase due to the anticipated growth in the size of our asset base and the number of shareholders. Effective on January 1, 2015, we no longer reimburse CNL for certain personnel expenses as described in the Administrative Services Agreement. These personnel expenses were approximately $0.21 million and $0.45 million for the three and six months ended June 30, 2014, respectively.

Net realized gain and losses - Net realized gains and losses for the three and six months ended June 30, 2015 and 2014 were as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
*(in thousands)*	2015			2014			2015			2014
Net realized gains (losses) on investments	$	(21,367	)	$	2,133		$	(27,689	)	$	14,331
Net realized gains (losses) on derivative instruments		3,185			(587	)		29,573			(778	)
Net realized losses on foreign currency transactions		716			(1,324	)		(628	)		(2,346	)

Net realized gains (losses)	$	(17,466	)	$	222		$	1,256		$	11,207

As the result of our investment sales and principal payments, as described above in “Portfolio and Investment Activity,” we realized net gains (losses) on investments for each of the periods presented. The change in the amount of net realized gains (losses) on investments for the three and six months ended June 30, 2015 was partially due to a restructure of one of the portfolio companies in whose debt securities we have invested, Towergate Finance PLC, resulting in a realized loss of $23.0 million. The amount of gains or losses realized upon investment sales will not bear a direct relationship to the volume of investment sales because such sales are driven largely by portfolio management and liquidity decisions, rather than by the gains to be realized upon the sale.

Our net realized gains (losses) on derivative instruments for the three and six months ended June 30, 2015 and 2014 consisted of the following:


	Three Months Ended June 30,					Six Months Ended June 30,
*(in thousands)*	2015		2014			2015		2014
Net realized gains (losses) on:
Foreign currency forward contracts	$	95	$	(1,119	)	$	24,060	$	(3,172	)
TRS		3,090		532			5,513		2,394

	$	3,185	$	(587	)	$	29,573	$	(778	)

See Note 4. “Derivative Instruments” in our unaudited condensed consolidated financial statements for more information about the components of the realized gain on TRS recorded during each period.

The change in realized gains and losses on foreign currency forward contracts was due to the combined impact of the increase in the notional amount of foreign currency forward contracts, plus the effect of currency changes over the term of the related contracts. Foreign currency forward contracts with a notional amount of $6.28 million and $205.19 million settled during the three and six months ended June 30, 2015, respectively, as compared to $144.40 million and $197.26 million for the same periods in 2014. The realized gains on foreign currency forward contracts help offset realized and unrealized losses in investments denominated in foreign currencies as a result of foreign currency movements, as described further below.

Net change in unrealized appreciation or depreciation

For the three and six months ended June 30, 2015 and 2014, the net change in unrealized appreciation and depreciation consisted of the following:


	Three Months Ended June 30,						Six Months Ended June 30,
*(in thousands)*	2015			2014			2015			2014
Net change in unrealized appreciation (depreciation) on:
Investments	$	21,970		$	9,565		$	(28,640	)	$	24,147
Derivative instruments		(17,994	)		(3,128	)		6,591			(3,301	)
Foreign currency translation		154			3,164			51			1,551

Net change in unrealized appreciation (depreciation)	$	4,130		$	9,601		$	(21,998	)	$	22,397

The net change in unrealized appreciation (depreciation) on investments consisted of the following:


	Three Months Ended June 30,						Six Months Ended June 30,
*(in thousands)*	2015			2014			2015			2014
Net change in unrealized appreciation (depreciation) on investments:
Unrealized appreciation	$	43,483		$	30,640		$	46,644		$	48,957
Unrealized depreciation		(44,692	)		(14,312	)		(92,902	)		(16,938	)
Net unrealized (appreciation) depreciation reversal related to net realized gains or losses ⁽¹⁾		23,179			(6,763	)		17,618			(7,872	)

Total net change in unrealized appreciation (depreciation)	$	21,970		$	9,565		$	(28,640	)	$	24,147

⁽¹⁾	Represents the unrealized appreciation or depreciation recorded on the related asset at the end of prior period.

Approximately 14.4% of our Investment Portfolio, measured at fair value, is denominated in foreign currencies. We do not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in fair values of investments held; therefore, fluctuations related to foreign exchange rate conversions are included with unrealized appreciation (depreciation) on investments.

We have entered into foreign currency forward contracts to economically hedge the impact that changes in foreign exchange rates have on the value of our investments denominated in foreign currencies. The following table presents the combined realized and unrealized gains and losses on investments, including the impact of our hedges. Changes in foreign currency exchange rates could impact our earnings to the extent that our investments denominated in foreign currencies are not hedged or the hedges are not effective. See Item 3. “Quantitative and Qualitative Disclosures About Market Risk” for further discussion of the impact of foreign currency exchange rates on our earnings.


	Three Months Ended June 30,						Six Months Ended June 30,
*(in thousands)*	2015			2014			2015			2014
Net realized and unrealized gains (losses) on investments	$	603		$	11,698		$	(56,329	)	$	38,478
Net realized and unrealized gains (losses) on foreign currency forward contracts		(16,924	)		(3,969	)		26,017			(5,103	)

	$	(16,321	)	$	7,729		$	(30,312	)	$	33,375

The net realized and unrealized losses on investments during the three and six months ended June 30, 2015, after applying the net impacts of movements in valuation on the underlying foreign currency forward contracts put in place to mitigate currency risk, were partly attributable to declines in the fair values of the Company’s investments in securities of portfolio companies directly or indirectly related to the energy sector. The net gains of $7.7 million and $33.4 million for the three and six months ended June 30, 2014, respectively, were related to a tightening of credit spreads that positively impacted the fair values of a number of investments, some that were sold during the periods. The net realized and unrealized gains and losses on the foreign currency forward contracts largely offset the valuation movements in investments denominated in foreign currencies causes by foreign exchange rate fluctuations.

The net change in unrealized appreciation (depreciation) on derivative instruments consisted of the following:


	Three Months Ended June 30,						Six Months Ended June 30,
*(in thousands)*	2015			2014			2015			2014
Net change in unrealized appreciation (depreciation) on TRS Portfolio:
Unsettled amounts at end of period:
Spread interest income	$	4,361		$	922		$	4,361		$	922
Realized gain (loss) on TRS assets		105			108			105			108
Receipt of prior period unsettled amounts		(3,753	)		(750	)		(3,006	)		(1,676	)
Unrealized appreciation (depreciation) on TRS assets		(1,688	)		(558	)		3,174			(724	)

		(975	)		(278	)		4,634			(1,370	)

Net change in unrealized appreciation on foreign currency forward contracts:
Unrealized appreciation		244			1,219			24,410			1,160
Unrealized depreciation		(17,122	)		(4,884	)		(3,077	)		(5,521	)
Net unrealized (appreciation) depreciation reversal related to net realized gains or losses ⁽¹⁾		(141	)		815			(19,376	)		2,430

		(17,019	)		(2,850	)		1,957			(1,931	)

Total net change in unrealized appreciation (depreciation) on derivative instruments	$	(17,994	)	$	(3,128	)	$	6,591		$	(3,301	)

⁽¹⁾	Represents the unrealized appreciation or depreciation recorded at the end of prior period.

We are not aware of any material trends or uncertainties, favorable or unfavorable, that may be reasonably anticipated to have a material impact on either capital resources or the revenues or income to be derived from our investments, other than those described above, risk factors, if any, identified in Part II, Item 1A of this report, and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of our Annual Report on Form 10-K for the year ended December 31, 2014.

Adjusted net investment income

Our net investment income totaled $42.76 million ($0.17 per share) and $81.95 million ($0.35 per share) for the three and six months ended June 30, 2015, respectively, as compared to $26.53 million ($0.16 per share) and $47.24 million ($0.30 per share) for the three and six months ended June 30, 2014, respectively. As described above in “- Investment advisory fees and performance-based incentive fees,” we accrue estimated incentive fees on capital gains with respect to any net realized and unrealized appreciation in our Investment Portfolio and derivative instruments. The capital gains incentive fees are treated as an operating expense and therefore are a deduction in calculating our net investment income on a GAAP basis. However, the incentive fees on capital gains related to net unrealized appreciation on our Investment Portfolio and derivative instruments are not payable by us unless and until the net unrealized appreciation is actually realized. Therefore, in order to evaluate our net investment income without regard to unrealized appreciation in our Investment Portfolio, we have developed a supplemental, non-GAAP measure, which we refer to as “adjusted net investment income,” which presents net investment income before the effects of unearned performance-based incentive fees.

We believe that adjusted net investment income is useful to assess the sustainability of our distributions and operating performance. Adjusted net investment income is not necessarily indicative of cash flows available to fund cash needs and should not be considered as an alternative to net investment income as an indication of our performance, as an alternative to cash flows from operations as an indication of our liquidity, or indicative of funds available to fund our cash needs including our ability to make future distributions to our shareholders. Adjusted net investment income should not be construed as an historic performance measure or as more relevant or accurate than the current GAAP methodology in calculating net investment income and its applicability in evaluating our operating performance.

The following table presents a reconciliation of our net investment income to adjusted net investment income for the three and six months ended June 30, 2015 and 2014; the increase in adjusted net investment income was primarily the result in the growth of our Investment Portfolio and earnings thereon.


	Three Months Ended June 30,				Six Months Ended June 30,
*(in thousands, except per share amounts)*	2015		2014		2015		2014
Net investment income (GAAP)	$	42,760	$	26,533	$	81,950	$	47,244
Add: Estimated unearned performance-based incentive fees		—		2,860		—		5,780

Adjusted net investment income (non-GAAP)	$	42,760	$	29,393	$	81,950	$	53,024

Net investment income per share (GAAP)	$	0.17	$	0.16	$	0.35	$	0.30

Adjusted net investment income per share (non-GAAP)	$	0.17	$	0.18	$	0.35	$	0.34

In addition, the relative utilization of the TRS can also cause variability in net investment income, because, in accordance with GAAP, earnings on assets within the TRS Portfolio are not included in the calculation of net investment income. The TRS Portfolio accrued interest income and financing charges are included in the fair value of the TRS and are not recorded as realized gain or loss on derivative instruments until quarterly TRS settlement payments are finalized. If the TRS assets had instead been included in our Investment Portfolio as owned assets, the interest income and financing charges would have been included in net investment income.

The following table shows the TRS interest income and financing charges for the three and six months ended June 30, 2015 and 2014.


	Three Months Ended June 30,						Six Months Ended June 30,
*(in thousands, except per share amounts)*	2015			2014			2015			2014
Interest and fee income included in TRS fair value	$	5,122		$	988		$	5,122		$	988
Financing charges included in TRS fair value		(761	)		(66	)		(761	)		(66	)

Subtotal		4,361			922			4,361			922
Interest and fee income included in TRS net realized gains		3,905			750			7,156			2,432
Financing charges included in TRS net realized gains		(909	)		(93	)		(1,708	)		(245	)
Less: amounts included in prior period fair value		(3,673	)		(842	)		(3,032	)		(1,703	)

TRS net interest spread	$	3,684		$	737		$	6,777		$	1,406

TRS net interest spread per share	$	0.01		$	0.00		$	0.03		$	0.01

Net Assets, Net Asset Value per Share, Annual Investment Return and Total Return Since Inception

Net assets increased $316.53 million and $359.01 million during the six months ended June 30, 2015 and 2014, respectively. The most significant increase in net assets during the six months ended June 30, 2015 and 2014 was attributable to capital transactions including (i) the issuance of shares of common stock and (ii) reinvestment of distributions in the combined amount of $361.24 million and $344.44 million, respectively. Our operations resulted in net assets increasing $61.21 million and $80.85 million during the six months ended June 30, 2015 and 2014, respectively. Our overall increase in net assets was partially offset by distributions to shareholders in the amount of $95.58 million and $59.93 million and the repurchase of shares of common stock in the amount of $10.34 million and $6.35 million during the six months ended June 30, 2015 and 2014, respectively.

Our net asset value per share was $9.67 and $10.15 on June 30, 2015 and 2014, respectively. After considering (i) the overall changes in net asset value per share, (ii) distributions paid of approximately $0.40 and $0.38 per share during the six months ended June 30, 2015 and 2014, respectively, and (iii) the assumed reinvestment of those distributions at 90% of the prevailing offering price per share, the total investment return was 2.89% and 5.35% (not annualized) for shareholders who held our shares over the entire six-month period ending June 30, 2015 and 2014, respectively.

Initial shareholders who subscribed to the Initial Offering in June 2011 with an initial investment of $10,000 and an initial purchase price equal to $9.00 per share (public offering price net of sales load) have seen the value of their investment grow by 47.7% (see first chart below), or an annualized return of 10.2% (see second chart below). Initial shareholders who subscribed to the Initial Offering in June 2011 with an initial investment of $10,000 and an initial purchase price equal to $10.00 per share (the initial public offering price) have registered a total investment return of 33.0% (see first chart below), or an annualized return of 7.3% (see second chart below). The S&P/LSTA Leveraged Loan Index, a primary measure of senior debt covering the U.S. leveraged loan market, which currently consists of approximately 1,100 credit facilities throughout numerous industries, and the Merrill Lynch US High Yield Master II Index, a primary measure of subordinated debt consisting of approximately 2,000 high yield corporate bonds, registered cumulative total returns of approximately 19.5% and 30.3%, respectively, in the period from June 17, 2011 to June 30, 2015.

LOGO

The calculations for the Growth of $10,000 Initial Investment in the shares of our common stock are based upon (i) an initial investment of $10,000 in our common stock at the beginning of the period at a share price of $10.00 per share (including sales load) and $9.00 per share (excluding sales load), (ii) assumed reinvestment of monthly distributions in accordance with our distribution reinvestment plan, (iii) the sale of the entire investment position at the net asset value per share on the last day of the period; and (iv) distributions payable, if any, on the last day of the period.

LOGO


Public Offering Price/Share	$	10.00	$	11.10	$	11.30
Net Offering Price/Share	$	9.00	$	9.99	$	10.17
Distributions/Share	$	3.15	$	1.64	$	0.82
Terminal Value/Share (NAV)	$	9.67	$	9.67	$	9.67

In the chart above, we also present the average annual returns for the trailing 24 months and trailing 12 months, in each case assuming (i) the purchase of shares of common stock at the public offering price and net offering price (90% of public offering price) at the beginning of the period, (ii) reinvestment of distributions in the common stock, (iii) a terminal value at June 30, 2015 equal to net asset value of $9.67 per share and (iv) distributions payable to shareholders as of June 30, 2015.

Our shares are illiquid investments for which there is currently not a secondary market. You should not expect to be able to resell your shares regardless of how we perform. If you are able to sell your shares, you will likely receive less than your purchase price. Our net asset value and annualized returns — which are based in part upon determinations of fair value of Level 3 investments by our board of directors, not active market quotations — are inherently uncertain. Past performance is not a guarantee of future results.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements which have been prepared in accordance with GAAP. The preparation of our unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Note 2. “Significant Accounting Policies” to our unaudited condensed consolidated financial statements describes the significant accounting policies and methods used in the preparation of our consolidated financial statements. We consider the accounting policies listed below to be critical because they involve management judgments and assumptions, require estimates about matters that are inherently uncertain and are important for understanding and evaluating our reported financial results. These judgments affect (i) the reported amounts of assets and liabilities, (ii) our disclosure of contingent assets and liabilities as of the dates of the financial statements and (iii) the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our financial statements. Changes in the economic environment, financial markets and any other parameters used in determining such estimates could cause actual results to differ materially from the amounts reported based on these policies.

Valuation of Investments and Unrealized Gain (Loss) – Our investments consist primarily of investments in senior and subordinated debt of private U.S. companies and are presented in our consolidated financial statements at fair value. See Note 3. “Investments,” in the accompanying unaudited condensed consolidated financial statements for more information on our investments. As described more fully in Note 2. “Significant Accounting Policies” and Note 5. “Fair Value of Financial Instruments” in our unaudited condensed consolidated financial statements, a valuation hierarchy based on the level of independent, objective evidence available regarding value is used to measure the fair value of our investments. Investments for which market quotations are readily available are valued using market quotations, which are generally obtained from independent pricing services, broker-dealers or market makers. With respect to our portfolio investments for which market quotations are not readily available, our board of directors is responsible for determining in good faith the fair value of our portfolio investments in accordance with, and the consistent application of, the valuation policy and procedures approved by the board of directors, based on, among other things, the input of our Advisors, audit committee and independent third-party valuation firms.

We utilize several valuation techniques that use unobservable inputs and assumptions in determining the fair value of our Level 3 investments. For senior debt, subordinated debt and structured products categorized as Level 3 investments, we initially value the investment at its initial transaction price and subsequently value using (i) market data for similar instruments (e.g., recent transactions or indicative broker quotes), (ii) comparisons to benchmark derivative indices and/or (iii) valuation models. Valuation models are based on yield analysis and discounted cash flow techniques, where the key inputs are based on relative value analyses and the assignment of risk-adjusted discounted rates derived from the analysis of similar credit investments from similar issuers. In addition, an illiquidity discount is applied where appropriate. The valuation techniques used by us for other types of assets and liabilities that are classified as Level 3 investments are described in Note 2 to our unaudited condensed consolidated financial statements. The unobservable inputs and assumptions may differ by asset and in the application of our valuation methodologies. The reported fair value estimates could vary materially if we had chosen to incorporate different unobservable inputs and other assumptions.

We and our board of directors conduct our fair value determination process on a quarterly basis and any other time when a decision regarding the fair value of our portfolio investments is required. A determination of fair value involves subjective judgments and estimates. Due to the inherent uncertainty of determining the fair value of portfolio investments that do not have a readily available market value, the fair value of the our portfolio investments may differ significantly from the values that would have been determined had a readily available market value existed for such investments, and the differences could be material. Further, such investments are generally less liquid than publicly traded securities. If we were required to liquidate a portfolio investment that does not have a readily available market value in a forced or liquidation sale, we could realize significantly less than the fair value recorded by us.

The table below presents information on the significant presence of investments classified as Level 3 as of June 30, 2015 and December 31, 2014:


(in thousands)	June 30, 2015			December 31, 2014
Fair value of investments classified as Level 3	$	1,731,317		$	1,502,332
Total fair value of investments	$	3,277,928		$	2,721,200
% of fair value classified as Level 3		52.8	%		55.2	%
Number of positions classified as Level 3		71			63
Total number of positions		164			154
% of positions classified as Level 3		43.3	%		40.9	%
Fair value of individual positions classified as Level 3:
Highest fair value	$	108,521		$	109,556
Lowest fair value	$	1		$	32
Average fair value	$	24,385		$	23,847

The ranges of unobservable inputs used in the fair value measurement of the Company’s Level 3 investments as of June 30, 2015 and December 31, 2014 are described in Note 5. “Fair Value of Financial Instruments” in our unaudited condensed consolidated financial statements, as well as, the directional impact to the valuation from an increase in various unobservable inputs.

In addition to impacting the estimated fair value recorded for our investments in our statement of assets and liabilities, had we used different key unobservable inputs to determine the estimated fair value of our investments, amounts recorded in our statement of operations, including the net change in unrealized appreciation and depreciation on investments, investment advisory fees and performance-based incentive fees would also be impacted since such amounts are directly impacted by the estimated fair value of our assets. For instance, a 5% overstatement of the fair value of our Level 3 investments as of June 30, 2015, assuming all other estimates remain unchanged, would otherwise result in a $82.44 million overstatement of net change in unrealized appreciation on investments, a $0.14 million overstatement of our investment advisory fees payable to our Advisors, a $82.31 million overstatement of our net increase in net assets resulting from operations, and a $0.35 overstatement in our earnings per share for the six months ended June 30, 2015, and a $0.32 overstatement of our net asset value per share as of June 30, 2015.

Off-Balance Sheet Arrangements

We had no off-balance sheet arrangements as of June 30, 2015.

Contractual Obligations

Investment Advisory Agreements – We have entered into the Investment Advisory Agreement with CNL for the overall management of our investment activities. We and CNL have also entered into the Sub-Advisory Agreement with KKR, under which KKR is responsible for the day-to-day management of our Investment Portfolio. CNL compensates KKR for advisory services that it provides to us with 50% of the investment advisory fee and performance-based incentive fees that CNL receives under the Investment Advisory Agreement. Pursuant to the Investment Advisory Agreement, CNL earns the investment advisory fee equal to an annual rate of 2% of our average gross assets (including unrealized appreciation or depreciation on the TRS and collateral posted with the custodian in connection with the TRS, but excluding deferred offering expenses), and an incentive fee based on our performance. The incentive fee is comprised of the following two parts:

(i)

a subordinated incentive fee on pre-incentive fee net investment income, paid quarterly, if earned, computed as the sum of (a) 100% of quarterly pre-incentive fee net investment income in excess of 1.75% of average adjusted capital up to a limit of 0.4375% of average adjusted capital, and (b) 20% of pre-incentive fee net investment income in excess of 2.1875% of average adjusted capital, and

(ii)

an incentive fee on capital gains paid annually, if earned, equal to (A) 20% of all realized gains on a cumulative basis from inception, net of (1) all realized losses on a cumulative basis, (2) unrealized depreciation at year-end and (3) disregarding any net realized gains associated with the TRS interest spread, (which represents the difference between (a) the interest and fees received on total return swaps, and (b) the financing fees paid to the total return swaps counterparty), less (B) the aggregate amount of any previously paid incentive fee on capital gains.

The reimbursement rate was 0.5% of gross offering proceeds during the six months ended June 30, 2015. As of June 30, 2015, the Advisors had incurred $8.01 million for offering expenses from the Follow-On Offering. As of the date of this filing, the Advisors were fully reimbursed for all offering expenses in connection with the Follow-On Offering that they incurred on our behalf as of June 30, 2015. The Advisors are expected to continue to incur offering expenses on our behalf throughout the remainder of the Follow-On Offering period and we expect to continue reimbursement of the Advisors for offering expenses they incur on our behalf through the termination date of the Follow-On Offering. We expect the reimbursement rate to remain at or below 1.0% of gross offering proceeds for the remainder of the Follow-On Offering.

See Note 6. “Related Party Transactions” in our unaudited condensed consolidated financial statements for expanded discussion of the Investment Advisory Agreement.

Unfunded Commitments - Unfunded commitments to provide funds to portfolio companies are not recorded on our consolidated statements of assets and liabilities. Because these commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. We intend to use cash flow from scheduled and early principal repayments and proceeds from borrowings and securities offerings to fund these commitments. As of June 30, 2015, our unfunded investment commitments totaled $230.58 million, representing 44.4% of our immediate liquidity available to us as of June 30, 2015. We believe we maintain sufficient liquidity to fund such unfunded loan commitments should the need arise.

Borrowings –As discussed above under “Capital Resources and Liquidity – Borrowings,” we, either directly or through our wholly owned subsidiaries, have borrowing agreements with several lenders in connection with our revolving credit facilities and the 2014 Senior Secured Term Loan. As of June 30, 2015, the credit facilities provided for $358.45 million of additional borrowing capacity. (See Note 10. “Borrowings” in our unaudited condensed consolidated financial statements for expanded discussion of the revolving credit facilities and 2014 Senior Secured Term Loan.)

A summary of our significant contractual payment obligations for the repayment of outstanding borrowings and interest expense and other fees related to the credit facilities and 2014 Senior Secured Term Loan at June 30, 2015 is as follows:


*(in thousands)*	Total		< 1 year		1-3 years		3-5 years		After 5 years
BNP Credit Facility	$	163,000	$	163,000	$	—	$	—	$	—
Deutsche Bank Credit Facility		150,000		—		150,000		—		—
Senior Secured Revolving Credit Facility		317,000		—		317,000		—		—
2014 Senior Secured Term Loan		395,000		4,000		8,000		383,000		—
Interest and Credit Facilities Fees Payable⁽¹⁾		91,219		32,163		45,315		13,741		—

Total	$	1,116,219	$	199,163	$	520,315	$	396,741	$	—

⁽¹⁾	Estimated interest payments have been calculated based on interest rates of our credit facilities and term loan payables as of June 30, 2015.

Related Party Transactions

We have entered into agreements with our Advisors and certain of their affiliates, whereby, we agree to pay certain fees to, or reimburse certain expenses of, our Advisors and their affiliates for investment and advisory services, selling commissions and marketing support fees in connection with our Offerings, and reimbursement of offering expenses, and administrative and operating fees and costs. See Note 6. “Related Party Transactions” in the accompanying unaudited condensed consolidated financial statements and Part III — Item 13. “Certain Relationships and Related Transactions, and Director Independence” in our Form 10-K for the year ended December 31, 2014 for a discussion of the various related party transactions, agreements and fees.

Impact of Recent Accounting Pronouncements

See Item 1. “Financial Statements” for a summary of the impact of any recent accounting pronouncements, if any.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

We are subject to financial market risks, in particular changes in interest rates. Future changes in interest rates will likely have effects on the interest income we earn on our portfolio investments, the fair value of our fixed income investments, the interest rates and interest expense associated with the money we borrow and the fair value of loan balances.

Subject to the requirements of the 1940 Act, we may hedge against interest rate fluctuations by using standard hedging instruments such as futures, options and forward contracts. Although hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in the benefits of lower interest rates. During the six months ended June 30, 2015 and 2014, we did not engage in interest rate hedging activities.

As of June 30, 2015, approximately 72.0% of our portfolio of debt investments (excluding TRS assets), or approximately $2.19 billion measured at par value, featured floating or variable interest rates. The variable interest rate debt investments usually provide for interest payments based on three-month LIBOR (the base rate) and typically have durations of three months after which the base rates are reset to then prevailing three-month LIBOR. At June 30, 2015, approximately 94.7% of our portfolio of variable interest rate debt investments, or approximately $2.08 billion measured at par value, featured minimum base rates, or base rate floors, and the weighted average base rate floor for such investments was 1.1%. Variable interest rate investments that feature a base rate floor generally reset to the then prevailing three-month LIBOR only if the reset base rate exceeds the base rate floor on the applicable interest rate reset date, in which cases, we may benefit through an increase in interest income from such interest rate adjustments. At June 30, 2015, we held an aggregate investment position of $117.08 million at par value in variable interest rate debt investments that featured variable interest rates without any minimum base rates, or approximately 5.3% of our portfolio of variable interest rate debt investments. In the case of these “no base rate floor” variable interest debt investments held in our portfolio, we may benefit from increases in the base rates that may subsequently result in an increase in interest income from such interest rate adjustments.

Because we borrow money to make investments, our net investment income is partially dependent upon the difference between the interest rate at which we invest borrowed funds and the interest rate at which we borrow funds. In periods of rising interest rates, if we have borrowed capital with floating interest rates, our interest expense will increase, which will increase our financing costs and may reduce our net investment income, especially to the extent we continue to acquire and hold fixed-rate debt investments. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.

Pursuant to the terms of our credit facilities and 2014 Senior Secured Term Loan, as discussed above (see “— Capital Resources and Liquidity — Borrowings — Credit Facilities and Term Loan”), all of our borrowing as of June 30, 2015 provide for floating base rates based on short-term LIBOR. Therefore, if we were to completely draw down (i) the unused commitment amounts in our Deutsche Bank Credit Facility, (ii) the maximum commitment amount in our BNP Credit Facility and (iii) the maximum commitment in our Senior Secured Revolving Credit Facility under an interest election of LIBOR plus 2.50%, we expect that our

weighted average stated interest rate would decrease by approximately 9 basis points (“bps”), as compared to our current weighted average direct interest cost for borrowed funds. We expect that any further expansion of our current revolving credit facilities, or any future credit facilities that we or any subsidiary may enter into, will also be based on a floating base rate. As a result, we are subject to continuous risks relating to changes in market interest rates.

Under the terms of the TRS Agreements between Halifax Funding and BNS, Halifax Funding pays interest to BNS at a floating rate based on three-month LIBOR in exchange for the right to receive the economic benefits of a portfolio of TRS assets having a maximum aggregate notional amount of $500 million.

Assuming the consolidated schedule of investments as of June 30, 2015 was to remain constant with regards to the Investment Portfolio and no actions were taken to alter the existing interest rate sensitivity or Investment Portfolio allocations, the upper section of the table below presents an estimated and hypothetical increase in interest income for a 12-month period due to an immediate and persistent increase in the base rates associated with our debt investments featuring variable interest rates.

The middle section of the table below also presents sensitivity analysis for a 12-month period due to a persistent increase in the base interest rates that apply to our floating rate credit facilities and term loan and the associated increase in interest expense, as well as, the net effect of change in interest rates on the TRS unrealized appreciation (depreciation). For persistent LIBOR increases of less than approximately 200 basis points, the increase in interest expense exceeds the hypothetical increase in interest income associated with our floating rate debt investments due to the base rate floors on those investments; for a persistent LIBOR increase of approximately 200 basis points or more, the hypothetical increase in interest income associated with our floating rate debt investments begins to provide a positive contribution to net interest income, in both cases assuming that the consolidated schedule of investments as of June 30, 2015 was to remain constant with regards to the Investment Portfolio and no actions were taken to alter the existing interest rate sensitivity or Investment Portfolio allocations.


	Par					*(in millions, except per share amounts)*
	Amount		Weighted			Increases in LIBOR
	*(in millions)*		Avg. Floor			+50 bps			+100 bps			+150 bps			+200 bps
No base rate floor	$	117.08				$	0.509		$	1.017		$	1.526		$	2.035
Base rate floor	$	2,076.21		1.1	%		0.000			4.313			13.317			22.413

Increase in Floating Rate Interest Income						$	0.509		$	5.330		$	14.843		$	24.448


			Base Rate Spread
BNP Credit Facility	$	163.00		110 bps		$	(0.815	)	$	(1.630	)	$	(2.445	)	$	(3.260	)
Deutsche Bank Credit Facility	$	150.00		185 bps			(0.750	)		(1.500	)		(2.250	)		(3.000	)
Senior Secured Revolving Credit Facility	$	317.00		250 bps			(1.585	)		(3.170	)		(4.755	)		(6.340	)
2014 Senior Secured Term Loan	$	395.00		325 bps			(0.131	)		(2.106	)		(4.081	)		(6.056	)

Increase to Floating Rate Interest Expense							(3.281	)		(8.406	)		(13.531	)		(18.656	)

Change in Floating Rate Net Interest Income, before TRS							(2.772	)		(3.076	)		1.312			5.792
Net change in TRS unrealized appreciation (depreciation) ⁽¹⁾							(1.944	)		(3.037	)		(3.342	)		(3.625	)

Overall Change in Floating Rate Net Interest Income, including TRS						$	(4.716	)	$	(6.113	)	$	(2.030	)	$	2.167

Change in Floating Rate Net Interest Income Per Share Outstanding as of June 30, 2015						$	(0.02	)	$	(0.02	)	$	(0.01	)	$	0.01

⁽¹⁾

Pursuant to the TRS Agreements, Halifax Funding receives from BNS all collected interest and fees derived from the TRS assets and pays to BNS interest at a rate equal to three-month LIBOR plus 80 bps per annum on the settled notional amount of TRS assets. As of June 30, 2015, 97.2% of the TRS assets, or approximately $382.97 million measured at par value, featured floating or variable interest rates. At June 30, 2015, 99.0% of the TRS assets with variable interest rates featured minimum base rate floors, or approximately $378.97 million measured at par value, and the weighted average base rate floor for such TRS assets was 1.0%. As of June 30, 2015, the total notional amount of the portfolio of TRS assets was $392.16 million, and the settled notional amount was $382.16 million. For the purpose of presenting the net interest sensitivity analysis above, we have assumed that all TRS assets are settled as of June 30, 2015 and that the TRS notional amount would equal $392.16 million upon which the financing payments to BNS are based.

The interest rate sensitivity analysis presented above does not consider the potential impact of the changes in fair value of our debt investments and the net asset value of our common stock in the event of sudden increases in interest rates associated with high yield corporate bonds. Approximately 28.0% of our debt Investment Portfolio was invested in fixed interest rate, high yield corporate debt investments as of June 30, 2015. Rising market interest rates will most likely lead to fair value declines for high yield corporate bonds and a decline in the net asset value of our common stock, while declining market interest rates will most likely lead to an increase in bond values.

As of June 30, 2015, approximately 47.0% of our fixed interest rate debt investments, or approximately $372.31 million measured at fair value, had prices that are generally available from third party pricing services. We consider these debt investments to be one of the more liquid subsets of our Investment Portfolio since these types of assets are generally broadly syndicated and owned by a wide group of institutional investors, business development companies, mutual funds and other investment funds. Additionally, this group of assets is susceptible to revaluation, or changes in bid-ask values, in response to sudden changes in expected rates of return associated with these investments. We have other fixed interest rate investments in the less liquid subset of our Investment Portfolio that are not included in this analysis.

We have computed duration of approximately 4.7 for this liquid/fixed subset of our total portfolio. This implies that a sudden increase in the market’s expected rate of return of 100 basis points for this subset of our Investment Portfolio may result in a reduction in fair value of approximately 4.7%, all other financial and market factors assuming to remain unchanged. A 4.7% decrease in the valuation of this Investment Portfolio subset equates to a decrease of $17.64 million, or a 0.7% decline in net assets relative to $9.67 net asset value per share as of June 30, 2015.

Foreign Currency Risk

From time to time, we may make investments that are denominated in a foreign currency that are subject to the effects of exchange rate movements between the foreign currency of each such investment and the U.S. dollar, which may affect future fair values and cash flows, as well as, amounts translated into U.S. dollars for inclusion in our consolidated financial statements.

The table below presents the effect that a 10% immediate, unfavorable change in the foreign currency exchange rates (i.e. strengthening U.S. dollar) would have on the fair value of investments in our Investment Portfolio denominated in foreign currencies as of June 30, 2015, by foreign currency, all other valuation assumptions remaining constant. Our TRS Portfolio did not contain any investments denominated in foreign currencies as of June 30, 2015. In addition, the table below presents the par value of our investments denominated in foreign currencies and the notional amount of foreign currency forward contracts in local currency in place as of June 30, 2015, to hedge against foreign currency risks.


		Investments Denominated in Foreign Currencies								Hedges
								Reduction in Fair
		As of June 30, 2015						Value as of		As of June 30, 2015
								June 30,		Foreign Currency		Foreign Currency
		Par Value/						2015 if 10%		Forward Contracts		Forward Contracts
		Cost in Local		Par Value/				Adverse Change		Amount in		Amount in
*(in thousands)*		Currency⁽¹⁾		Cost in US$⁽¹⁾		Fair Value		in Exchange Rate⁽²⁾		Local Currency		U.S. Dollars
Euros	€		294,040	$	335,543	$	291,378	$	29,138	€	301,110	$	375,224
British Pound Sterling	£		92,438		135,451		145,752		14,575	£	93,625		147,101
Australian Dollars	A$		32,119		24,954		22,569		2,257	A$	36,489		33,032
Swedish Kronor	SEK		97,249		15,145		7,272		727	SEK	—		—

Total				$	511,093	$	466,971	$	46,697			$	555,357

⁽¹⁾	Amount represents the par value of debt investments and cost of equity investments denominated in foreign currencies.

⁽²⁾	Excludes effect, if any, of any foreign currency hedges.

As illustrated in the table above, we use derivative instruments from time to time, including foreign currency forward contracts, to manage the impact of fluctuations in foreign currency exchange rates. In addition, we have the ability to borrow in foreign currencies under our Senior Secured Revolving Credit Facility, which provides a natural hedge with regard to changes in exchange rates between the foreign currencies and the U.S. dollar and reduces our exposure to foreign exchange rate differences. We are typically a net receiver of these foreign currencies as related for our international investment positions, and, as a result, our investments denominated in foreign currencies, to the extent not hedged, benefit from a weaker U.S. dollar and are adversely affected by a stronger U.S. dollar.

As of June 30, 2015, the net contractual amount of our foreign currency forward contracts totaled $555.36 million, all of which related to hedging of our foreign currency denominated debt investments. As of June 30, 2015, we did not have any amounts outstanding denominated in foreign currencies on our Senior Secured Revolving Credit Facility.

During the three and six months ended June 30, 2015, our foreign currency transactions and foreign currency translation adjustment recorded in our condensed consolidated statements of operations resulted in a net realized and unrealized gains (losses) of $0.87 million and $(0.58) million, respectively. Our foreign currency forward contracts, employed for hedging purposes, generated net realized and unrealized gains (losses) of $(16.92) million and $26.02 million during the three and six months ended June 30, 2015, respectively. We do not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in fair values of investments held; therefore, the fluctuations related to foreign exchange rate conversion are included with the net realized gain (loss) and unrealized appreciation (depreciation) on investments. See “Results of Operations — Net Change in Unrealized Appreciation or Depreciation” for additional information on the foreign currency exchange changes.

Item 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) under the Exchange Act, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, our management, including our principal executive officer and principal financial officer, concluded that our disclosure controls and procedures are effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

During the most recent fiscal quarter, there was no change in our internal controls over financial reporting (as defined under Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings – None

Item 1A.

Risk Factors

There have been no material changes to the risk factors previously disclosed in response to Item 1A. to Part I. of our Annual Report on Form 10-K for the fiscal year ended December 31, 2014, except for the following:

We are exposed to risks resulting from the current low interest rate environment.

Since we will borrow money to make investments, our net investment income depends, in part, upon the difference between the rate at which we borrow funds and the rate at which we invest those funds. The current, historically low interest rate environment can, depending on our cost of capital, depress our net investment income, even though the terms of our investments generally will include a minimum interest rate. In addition, any reduction in the level of interest rates on new investments relative to interest rates on our current investments could adversely impact our net investment income, reducing our ability to service the interest obligations on, and to repay the principal of, our indebtedness, as well as our capacity to pay distributions. Any such developments would result in a decline in our net asset value and in net asset value per share. Floating interest rate investments tied to certain indices that tend to lag behind the market may perform better in a falling interest rate environment, while floating interest rate investments tied to other indices, such as LIBOR, may do better in a rising rate environment. Not all investments perform alike under different interest rate scenarios. Generally, our variable interest rate debt investments provide for interest payments based on three-month LIBOR (the base rate) and typically, every three months, the base rates are reset to then prevailing three-month LIBOR.

To the extent that we borrow money, the potential for gain or loss on amounts invested in us will be magnified and may increase the risk of investing in us. Borrowed money may also adversely affect the return on our assets, reduce cash available to service our debt or for distribution to our shareholders, and result in losses.

The use of borrowings, also known as leverage, increases the volatility of investments by magnifying the potential for gain or loss on invested equity capital. Since we use leverage to partially finance our investments, through borrowing from banks and other lenders, you will experience increased risks of investing in our securities. If the value of our assets decreases, leveraging will cause our net asset value to decline more sharply than it otherwise would if we had not borrowed and employed leverage. Similarly, any decrease in our income would cause our net income to decline more sharply than it would have if we had not borrowed and employed leverage. Such a decline could negatively affect our ability to service our debt or make distributions to our shareholders. In addition, our shareholders will bear the burden of any increase in our expenses as a result of our use of leverage, including interest expenses and any increase in the management or incentive fees payable to the Advisors.

The amount of leverage that we employ depends on our Advisors’ and our board of directors’ assessment of market and other factors at the time of any proposed borrowing. There can be no assurance that additional leveraged financing will be available to us on favorable terms or at all. However, to the extent that we use leverage to finance our assets, our financing costs will reduce cash available for servicing our debt or distributions to shareholders. Moreover, we may not be able to meet our financing obligations and, to the extent that we cannot, we risk the loss of some or all of our assets to liquidation or sale to satisfy the obligations. In such an event, we may be forced to sell assets at significantly depressed prices due to market conditions or otherwise, which may result in losses.

As a business development company, we are required to meet a coverage ratio of total assets to total borrowings and other senior securities, which include all of our borrowings and any preferred stock that we may issue in the future, of at least 200%. If this ratio declines below 200%, we cannot incur additional debt and could be required to sell a portion of our investments to repay some debt when it is disadvantageous to do so. This could have a material adverse effect on our operations, and we may not be able to service our debt or make distributions.

The sale or likelihood of the sale of a large number of outstanding shares prior to completion of the listing of our securities on a national securities exchange could negatively affect our stock price.

The ability of our shareholders to liquidate their investment in our shares of common stock is limited. If we were to list our common stock on a securities exchange in the future, a large volume of sales of our shares could decrease the prevailing market prices of our common stock and could impair our ability to raise additional capital through the sale of equity securities in the future. Even if a substantial number of sales are not affected, the mere perception of the possibility of these sales could depress the market price of our common stock and have a negative effect on our ability to raise capital in the future. In addition, anticipated downward pressure on our common stock price due to actual or anticipated sales of common stock from this market overhang could cause some institutions or individuals to engage in short sales of our common stock, which may itself cause the price of our stock to decline.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds – None

Item 3.

Defaults Upon Senior Securities – None

Item 4.

Mine Safety Disclosures – Not applicable

Item 5.

Other Information – None

Item 6.

Exhibits

The exhibits required by this item are set forth in the Exhibit Index attached hereto and are filed or incorporated as part of this report.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 13th day of August 2015.


CORPORATE CAPITAL TRUST, INC.

By:		/s/ Thomas K. Sittema
		THOMAS K. SITTEMA
		Chief Executive Officer
		(Principal Executive Officer)

By:		/s/ Steven D. Shackelford
		STEVEN D. SHACKELFORD
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

EXHIBIT INDEX

Exhibits

The following exhibits are included or incorporated by reference in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (and numbered in accordance with Item 601 of Regulation S-K).


Exhibit No.		Description

31.1		Certification of Chief Executive Officer of Corporate Capital Trust, Inc., Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)

31.2		Certification of Chief Financial Officer of Corporate Capital Trust, Inc., Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)

32.1		Certification of Chief Executive Officer and Chief Financial Officer of Corporate Capital Trust, Inc., Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)

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