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EX-32.1 - EXHIBIT 32.1 - GOLUB CAPITAL INVESTMENT Corpfy2017q2gcicexhibit321.htm
EX-31.2 - EXHIBIT 31.2 - GOLUB CAPITAL INVESTMENT Corpfy2017q2gcicexhibit312.htm
EX-31.1 - EXHIBIT 31.1 - GOLUB CAPITAL INVESTMENT Corpfy2017q2gcicexhibit311.htm

______________________________________________________________________________________________________ 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
______________________________________________________________________________________________________ 
FORM 10-Q

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

For the Quarterly Period Ended March 31, 2017

OR

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

For the transition period from _____ to _____

Commission File Number 814-01128

Golub Capital Investment Corporation
(Exact name of registrant as specified in its charter)

Maryland
 
47-1893276
(State or other jurisdiction of incorporation or organization)
 
 (I.R.S. Employer Identification No.)

666 Fifth Avenue, 18th Floor
New York, NY 10103
(Address of principal executive offices)

(212) 750-6060
(Registrant's telephone number, including area code)

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 o   No þ

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes o No   o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  o
Accelerated filer o
Non-accelerated filer  o (Do not check if a smaller reporting company)
Smaller reporting company o
Emerging growth company þ
 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. þ

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

As of May 11, 2017, the Registrant had 46,515,568.552 shares of common stock, $0.001 par value, outstanding.



Part I. Financial Information
  
Item 1.
Financial Statements
 
Consolidated Statements of Financial Condition as of March 31, 2017 (unaudited) and September 30, 2016
 
Consolidated Statements of Operations for the three and six months ended March 31, 2017 (unaudited) and 2016 (unaudited)
 
Consolidated Statements of Changes in Net Assets for the six months ended March 31, 2017 (unaudited) and 2016 (unaudited)
 
Consolidated Statements of Cash Flows for the six months ended March 31, 2017 (unaudited) and 2016 (unaudited)
 
Consolidated Schedules of Investments as of March 31, 2017 (unaudited) and September 30, 2016
 
Notes to Consolidated Financial Statements (unaudited)
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3.
Quantitative And Qualitative Disclosures About Market Risk
Item 4.
Controls and Procedures
Part II. Other Information
 
Item 1.
Legal Proceedings
Item 1A.
Risk Factors
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.
Defaults Upon Senior Securities
Item 4.
Mine Safety Disclosures
Item 5.
Other Information
Item 6.
Exhibits



2


Golub Capital Investment Corporation and Subsidiaries
Consolidated Statements of Financial Condition (unaudited)
(In thousands, except share and per share data)


 
March 31, 2017
 
September 30, 2016
 
(unaudited)
 
 
Assets
  

 
  

Investments, at fair value
  

 
  

Non-controlled/non-affiliate company investments
$
1,114,902

 
$
1,021,754

Controlled affiliate company investments
52,423

 
47,956

Total investments at fair value (amortized cost of $1,153,796 and $1,061,376, respectively)
1,167,325

 
1,069,710

Cash and cash equivalents
15,164

 
4,675

Restricted cash and cash equivalents
37,642

 
71,056

Interest receivable
3,910

 
3,308

Other assets
270

 
249

Total Assets
$
1,224,311

 
$
1,148,998

Liabilities
  

 
  

Debt
$
571,900

 
$
520,600

Less unamortized debt issuance costs
3,330

 
5,073

Debt less unamortized debt issuance costs
568,570

 
515,527

Interest payable
1,821

 
1,414

Distributions payable
8,925

 
9,869

Capital calls received in advance
5,963

 

Management and incentive fees payable
6,267

 
4,960

Payable for open trades
190

 

Accounts payable and accrued expenses
971

 
902

Accrued trustee fees
29

 
19

Total Liabilities
592,736

 
532,691

Commitments and Contingencies (Note 9)
  

 
  

Net Assets
  

 
  

Preferred stock, par value $0.001 per share, 1,000,000 shares authorized, zero shares issued and outstanding as of March 31, 2017 and September 30, 2016

 

Common stock, par value $0.001 per share, 100,000,000 shares authorized, 42,104,997.486 and 41,087,178.250 shares issued and outstanding as of March 31, 2017 and September 30, 2016, respectively
42

 
41

Paid in capital in excess of par
631,285

 
616,018

Capital distributions in excess of net investment income
(12,544
)
 
(7,158
)
Net unrealized appreciation (depreciation) on investments
13,529

 
8,334

Net realized gain (loss) on investments
(737
)
 
(928
)
Total Net Assets
631,575

 
616,307

Total Liabilities and Total Net Assets
$
1,224,311

 
$
1,148,998

Number of common shares outstanding
42,104,997.486

 
41,087,178.250

Net asset value per common share
$
15.00

 
$
15.00


See Notes to Consolidated Financial Statements.




3


Golub Capital Investment Corporation and Subsidiaries
Consolidated Statements of Operations (unaudited)
(In thousands, except share and per share data)


 
Three months ended March 31,
 
Six months ended March 31,
  
2017
 
2016
 
2017
 
2016
Investment income
  

 
  

 
 
 
 
From non-controlled/non-affiliate company investments:
  

 
  

 
 
 
 
Interest income
$
20,813

 
$
11,196

 
$
41,562

 
$
21,206

Dividend income

 
17

 
1

 
17

Fee income
65

 
359

 
211

 
375

Total investment income from non-controlled/non-affiliate company investments
20,878

 
11,572

 
41,774

 
21,598

From controlled affiliate company investments:
  

 
  

 
  

 
  

Interest income

 
730

 
732

 
1,215

Dividend income
1,242

 

 
1,663

 

Total investment income from controlled affiliate company investments
1,242

 
730

 
2,395

 
1,215

Total investment income
22,120

 
12,302

 
44,169

 
22,813

Expenses
  

 
  

 
  

 
  

Interest and other debt financing expenses
5,313

 
2,396

 
10,235

 
4,610

Base management fee
3,881

 
2,143

 
7,677

 
4,133

Incentive fee
2,222

 
1,177

 
4,966

 
1,979

Professional fees
480

 
248

 
922

 
573

Administrative service fee
343

 
232

 
705

 
445

General and administrative expenses
(4
)
 
4

 
26

 
14

Total expenses
12,235

 
6,200

 
24,531

 
11,754

Base management fee waived (Note 4)
(1,059
)
 
(584
)
 
(2,094
)
 
(1,127
)
Incentive fee waived (Note 4)

 

 
(16
)
 

Net expenses
11,176

 
5,616

 
22,421

 
10,627

Net investment income
10,944

 
6,686

 
21,748

 
12,186

 
 
 
 
 
 
 
 
Net gain (loss) on investments
  

 
  

 
  

 
  

Net realized gain (loss) on investments:
  

 
  

 
  

 
  

Non-controlled/non-affiliate company investments
134

 
48

 
331

 
733

Net realized gain (loss) on investments
134

 
48

 
331

 
733

Net change in unrealized appreciation (depreciation) on investments:
  

 
  

 
  

 
  

Non-controlled/non-affiliate company investments
1,515

 
288

 
4,893

 
804

Controlled affiliate company investments
101

 
272

 
302

 
229

Net change in unrealized appreciation (depreciation) on investments
1,616

 
560

 
5,195

 
1,033

Net gain (loss) on investments
1,750

 
608

 
5,526

 
1,766

Net increase in net assets resulting from operations
$
12,694

 
$
7,294

 
$
27,274

 
$
13,952

Per Common Share Data
  

 
  

 
  

 
  

Basic and diluted earnings per common share
$
0.30

 
$
0.28

 
$
0.65

 
$
0.58

Basic and diluted weighted average common shares outstanding
41,892,513

 
25,707,003

 
41,569,032

 
23,916,838

See Notes to Consolidated Financial Statements.




4


Golub Capital Investment Corporation and Subsidiaries
Consolidated Statements of Changes in Net Assets (unaudited)
(In thousands, except share data)



 
 
 
 
 
 
 
Capital Distributions in Excess of Net Investment Income
 
 
 
 
 
 
 
Common Stock
 
Paid in Capital in Excess of Par
 
 
Net Unrealized Appreciation (Depreciation) on Investments
 
Net Realized Gain (loss) on Investments
 
Total Net Assets
 
Shares
 
Par Amount
 
 
 
 
 
Balance at September 30, 2015
20,843,155.219

 
$
21

 
$
312,626

 
$
(2,521
)
 
$
2,479

 
$
42

 
$
312,647

Issuance of common stock (1)
5,896,577.256

 
6

 
88,443

 

 

 

 
88,449

Net increase in net assets resulting from operations

 

 

 
12,186

 
1,033

 
733

 
13,952

Distributions to stockholders:
  

 
  

 
  

 
  

 
  

 
  

 
 
Stock issued in connection with dividend reinvestment plan
522,004.664

 

 
7,830

 

 

 

 
7,830

Distributions from net investment income

 

 

 
(9,013
)
 

 

 
(9,013
)
Distributions declared and payable

 

 

 
(4,939
)
 

 

 
(4,939
)
Total increase (decrease) for the period ended March 31, 2016
6,418,581.920

 
6

 
96,273

 
(1,766
)
 
1,033

 
733

 
96,279

Balance at March 31, 2016
27,261,737.139

 
$
27

 
$
408,899

 
$
(4,287
)
 
$
3,512

 
$
775

 
$
408,926

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at September 30, 2016
41,087,178.250

 
$
41

 
$
616,018

 
$
(7,158
)
 
$
8,334

 
$
(928
)
 
$
616,307

Net increase in net assets resulting from operations

 

 

 
21,748

 
5,195

 
331

 
27,274

Distributions to stockholders:
  

 
  

 
  

 
  

 
  

 
  

 
 
Stock issued in connection with dividend reinvestment plan
1,017,819.236

 
1

 
15,267

 

 

 

 
15,268

Distributions from net investment income

 

 

 
(18,209
)
 

 

 
(18,209
)
Distributions from realized gain

 

 

 

 

 
(140
)
 
(140
)
Distributions declared and payable

 

 

 
(8,925
)
 

 

 
(8,925
)
Total increase (decrease) for the period ended March 31, 2017
1,017,819.236

 
1

 
15,267

 
(5,386
)
 
5,195

 
191

 
15,268

Balance at March 31, 2017
42,104,997.486

 
$
42

 
$
631,285

 
$
(12,544
)
 
$
13,529

 
$
(737
)
 
$
631,575

 
(1) 
Refer to Note 3 for a detailed listing of the common stock share issuances for the six months ended March 31, 2016.

See Notes to Consolidated Financial Statements.






5


Golub Capital Investment Corporation and Subsidiaries
Consolidated Statements of Cash Flows (unaudited)
(In thousands)


 
Six months ended March 31,
  
2017
 
2016
Cash flows from operating activities
  

 
 
Net increase in net assets resulting from operations
$
27,274

 
$
13,952

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

 
 
Amortization of deferred debt issuance costs
1,781

 
964

Accretion of discounts and amortization of premiums
(2,379
)
 
(1,403
)
Net realized (gain) loss on investments
(331
)
 
(733
)
Net change in unrealized (appreciation) depreciation on investments
(5,195
)
 
(1,033
)
Proceeds from (fundings of) revolving loans, net
(829
)
 
(2,165
)
Fundings of investments
(185,130
)
 
(334,181
)
Proceeds from principal payments and sales of portfolio investments
96,814

 
189,076

PIK interest
(565
)
 
(48
)
Changes in operating assets and liabilities:
 
 
 
Interest receivable
(602
)
 
(382
)
Receivable for investments sold

 
(4,265
)
Other assets
(21
)
 
130

Interest payable
407

 
131

Management and incentive fees payable
1,307

 
1,002

Payable for investments purchased
190

 

Accounts payable and accrued expenses
69

 
(394
)
Accrued trustee fees
10

 

Net cash (used in) provided by operating activities
(67,200
)
 
(139,349
)
Cash flows from investing activities
  

 
 
Net change in restricted cash and cash equivalents
33,414

 
3,005

Net cash (used in) provided by investing activities
33,414

 
3,005

Cash flows from financing activities
  

 
 
Borrowings on debt
187,750

 
324,250

Repayments of debt
(136,450
)
 
(270,050
)
Capitalized debt issuance costs
(38
)
 
(210
)
Capital calls received in advance
5,963

 

Proceeds from issuance of common shares

 
88,449

Distributions paid
(12,950
)
 
(6,055
)
Net cash provided by (used in) financing activities
44,275

 
136,384

Net change in cash and cash equivalents
10,489

 
40

Cash and cash equivalents, beginning of period
4,675

 
2,747

Cash and cash equivalents, end of period
$
15,164

 
$
2,787

Supplemental information:
  

 
 
Cash paid during the period for interest
$
8,047

 
$
3,515

Distributions declared during the period
27,274

 
13,952

Supplemental disclosure of noncash operating activity:
 
 
 
Funding of LLC equity interest in GCIC SLF
$
(34,917
)
 
$

Proceeds from subordinated notes in GCIC SLF principal payment
34,917

 

Supplemental disclosure of noncash financing activity:
 
 
 
Distributions payable
$
8,925

 
$
4,939

See Notes to Consolidated Financial Statements.


6


Golub Capital Investment Corporation and Subsidiaries
Consolidated Schedule of Investments (unaudited)
March 31, 2017
(In thousands)



 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares
(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Investments
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Non-controlled/non-affiliate company investments
 
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Debt investments
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Aerospace and Defense
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

ILC Dover, LP
One stop
 
L + 9.00%
 
8.00% cash/ 2.00% PIK
 
03/2020
 
$
2,362

 
$
2,315

 
0.4

%
$
2,173

ILC Dover, LP
One stop
 
L + 9.00%
 
8.00% cash/ 2.00% PIK
 
03/2019
 
106

 
103

 

 
97

NTS Technical Systems*
One stop
 
L + 6.25%
 
7.25%
 
06/2021
 
3,814

 
3,758

 
0.6

 
3,775

NTS Technical Systems(4)
One stop
 
L + 6.25%
 
N/A(5)
 
06/2021
 

 
(12
)
 

 
(5
)
NTS Technical Systems(4)
One stop
 
L + 6.25%
 
N/A(5)
 
06/2021
 

 
(20
)
 

 
(4
)
Tresys Technology Holdings, Inc.(6)
One stop
 
L + 6.75%
 
8.00%
 
12/2017
 
53

 
28

 

 
16

Tresys Technology Holdings, Inc.
One stop
 
L + 6.75%
 
8.00%
 
12/2017
 
9

 
9

 

 
9

Tresys Technology Holdings, Inc.
One stop
 
P + 5.50%
 
9.50%
 
12/2017
 
1

 
1

 

 
1

Tronair Parent, Inc.#
Senior loan
 
L + 4.75%
 
5.86%
 
09/2023
 
192

 
190

 

 
191

Tronair Parent, Inc.
Senior loan
 
P + 3.50%
 
7.50%
 
09/2021
 
16

 
15

 

 
16

Whitcraft LLC*
One stop
 
L + 6.50%
 
7.50%
 
05/2020
 
6,711

 
6,668

 
1.1

 
6,711

Whitcraft LLC(4)
One stop
 
L + 6.50%
 
N/A(5)
 
05/2020
 

 
(1
)
 

 

 
 
 
 
 
 
 
 
 
13,264

 
13,054

 
2.1

 
12,980

Automobile
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Dent Wizard International Corporation*
Senior loan
 
L + 4.75%
 
5.75%
 
04/2020
 
2,193

 
2,179

 
0.3

 
2,172

OEConnection LLC#*
Senior loan
 
L + 5.00%
 
6.15%
 
06/2022
 
11,111

 
10,861

 
1.8

 
11,111

OEConnection LLC(4)
Senior loan
 
L + 5.00%
 
N/A(5)
 
06/2021
 

 
(1
)
 

 

Polk Acquisition Corp.*
Senior loan
 
L + 5.00%
 
6.00%
 
06/2022
 
4,963

 
4,941

 
0.8

 
4,963

T5 Merger Corporation#*
One stop
 
L + 6.25%
 
7.25%
 
03/2022
 
30,210

 
29,688

 
4.7

 
29,908

T5 Merger Corporation
One stop
 
L + 6.25%
 
7.25%
 
03/2022
 
60

 
58

 

 
58

T5 Merger Corporation(4)
One stop
 
L + 6.25%
 
N/A(5)
 
03/2022
 

 
(45
)
 

 
(46
)
  
 
 
 
 
 
 
 
 
48,537

 
47,681

 
7.6

 
48,166

Beverage, Food and Tobacco
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Abita Brewing Co., L.L.C.#
One stop
 
L + 7.25%
 
7.00% cash/ 1.25% PIK
 
04/2021
 
3,846

 
3,811

 
0.5

 
3,461

Abita Brewing Co., L.L.C.(4)
One stop
 
L + 7.25%
 
N/A(5)
 
04/2021
 

 
(1
)
 

 
(2
)
ABP Corporation*
Senior loan
 
L + 4.75%
 
6.00%
 
09/2018
 
601

 
601

 
0.1

 
580

ABP Corporation
Senior loan
 
P + 3.50%
 
7.50%
 
09/2018
 
37

 
38

 

 
35

Benihana, Inc.#*
One stop
 
L + 7.00%
 
8.25%
 
01/2019
 
320

 
319

 
0.1

 
317

Benihana, Inc.
One stop
 
L + 7.00%
 
8.58%
 
07/2018
 
14

 
14

 

 
13

C. J. Foods, Inc.#*
One stop
 
L + 6.25%
 
7.40%
 
05/2019
 
12,734

 
12,656

 
2.0

 
12,607

C. J. Foods, Inc.
One stop
 
L + 6.25%
 
7.40%
 
05/2019
 
1,605

 
1,601

 
0.3

 
1,589

C. J. Foods, Inc.
One stop
 
L + 6.25%
 
7.25%
 
05/2019
 
472

 
468

 
0.1

 
456

Firebirds International, LLC*
One stop
 
L + 5.75%
 
7.00%
 
05/2018
 
3,313

 
3,313

 
0.5

 
3,313

Firebirds International, LLC*
One stop
 
L + 5.75%
 
7.00%
 
05/2018
 
931

 
931

 
0.2

 
931

Firebirds International, LLC
One stop
 
L + 5.75%
 
7.00%
 
05/2018
 
299

 
299

 

 
299

Firebirds International, LLC
One stop
 
L + 5.75%
 
N/A(5)
 
05/2018
 

 

 

 

First Watch Restaurants, Inc.*
One stop
 
L + 6.00%
 
7.31%
 
12/2020
 
3,551

 
3,525

 
0.6

 
3,551

First Watch Restaurants, Inc.*
One stop
 
L + 6.00%
 
7.15%
 
12/2020
 
174

 
173

 

 
174

First Watch Restaurants, Inc.*
One stop
 
L + 6.00%
 
7.15%
 
12/2020
 
175

 
173

 

 
175

First Watch Restaurants, Inc.
One stop
 
L + 6.00%
 
7.03%
 
12/2020
 
150

 
149

 

 
150

First Watch Restaurants, Inc.
One stop
 
P + 5.00%
 
9.00%
 
12/2020
 
68

 
67

 

 
68

Hopdoddy Holdings, LLC
One stop
 
L + 8.00%
 
9.00%
 
08/2020
 
423

 
421

 
0.1

 
423

Hopdoddy Holdings, LLC
One stop
 
L + 8.00%
 
N/A(5)
 
08/2020
 

 

 

 

Hopdoddy Holdings, LLC(4)
One stop
 
L + 8.00%
 
N/A(5)
 
08/2020
 

 
(1
)
 

 

Julio & Sons Company*
One stop
 
L + 5.50%
 
6.54%
 
12/2018
 
941

 
937

 
0.2

 
941



7

Golub Capital Investment Corporation and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2017
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares
(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Beverage, Food and Tobacco - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Julio & Sons Company
One stop
 
L + 5.50%
 
6.55%
 
12/2018
 
$
310

 
$
309

 

%
$
310

Julio & Sons Company
One stop
 
L + 5.50%
 
6.54%
 
12/2018
 
43

 
43

 

 
43

Julio & Sons Company(4)
One stop
 
L + 5.50%
 
N/A(5)
 
12/2018
 

 
(2
)
 

 

Mid-America Pet Food, L.L.C.#
One stop
 
L + 6.25%
 
7.40%
 
12/2021
 
6,428

 
6,336

 
1.0

 
6,428

Mid-America Pet Food, L.L.C.(4)
One stop
 
L + 6.25%
 
N/A(5)
 
12/2021
 

 
(1
)
 

 

P&P Food Safety US Acquisition, Inc.#
One stop
 
L + 6.50%
 
7.64%
 
11/2021
 
4,113

 
4,065

 
0.7

 
4,113

P&P Food Safety US Acquisition, Inc.
One stop
 
L + 6.50%
 
N/A(5)
 
11/2021
 

 

 

 

Purfoods, LLC#*
One stop
 
L + 6.25%
 
7.25%
 
05/2021
 
8,007

 
7,908

 
1.3

 
8,007

Purfoods, LLC
One stop
 
N/A
 
7.00% PIK
 
05/2026
 
94

 
94

 

 
101

Purfoods, LLC
One stop
 
L + 6.25%
 
7.25%
 
05/2021
 
60

 
59

 

 
60

Purfoods, LLC
One stop
 
L + 6.25%
 
7.25%
 
05/2021
 
10

 
10

 

 
10

Purfoods, LLC(4)
One stop
 
L + 6.25%
 
N/A(5)
 
05/2021
 

 
(1
)
 

 

Smashburger Finance LLC*
Senior loan
 
L + 5.50%
 
6.75%
 
05/2018
 
505

 
503

 
0.1

 
494

Smashburger Finance LLC(4)
Senior loan
 
L + 5.50%
 
N/A(5)
 
05/2018
 

 
(8
)
 

 

Surfside Coffee Company LLC*
One stop
 
L + 5.25%
 
6.25%
 
06/2020
 
2,333

 
2,318

 
0.4

 
2,333

Surfside Coffee Company LLC
One stop
 
L + 5.25%
 
6.25%
 
06/2020
 
176

 
173

 

 
176

Surfside Coffee Company LLC
One stop
 
L + 5.25%
 
6.25%
 
06/2020
 
26

 
25

 

 
26

Tate's Bake Shop, Inc.#
Senior loan
 
L + 5.00%
 
6.15%
 
08/2019
 
143

 
142

 

 
143

Uinta Brewing Company#
One stop
 
L + 8.50%
 
9.50%
 
08/2019
 
900

 
900

 
0.1

 
864

Uinta Brewing Company
One stop
 
L + 8.50%
 
9.50%
 
08/2019
 
130

 
129

 

 
123

 
 
 
 
 
 
 
 
 
52,932

 
52,496

 
8.3

 
52,312

Broadcasting and Entertainment
 
 
 
 
 
 
 
 
  

 
  

 
 
 
  

Extreme Reach Inc.*
Senior loan
 
L + 6.25%
 
7.28%
 
02/2020
 
909

 
887

 
0.2

 
921

TouchTunes Interactive Networks, Inc.*
Senior loan
 
L + 4.75%
 
5.90%
 
05/2021
 
694

 
691

 
0.1

 
696

 
 
 
 
 
 
 
 
 
1,603

 
1,578

 
0.3

 
1,617

Building and Real Estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brooks Equipment Company, LLC*
One stop
 
L + 5.00%
 
6.03%
 
08/2020
 
6,068

 
6,068

 
1.0

 
6,022

Brooks Equipment Company, LLC*
One stop
 
L + 5.00%
 
6.05%
 
08/2020
 
1,530

 
1,519

 
0.3

 
1,519

Brooks Equipment Company, LLC
One stop
 
L + 5.00%
 
6.00%
 
08/2020
 
47

 
47

 

 
42

Jensen Hughes, Inc.#
Senior loan
 
L + 5.00%
 
6.00%
 
12/2021
 
115

 
114

 

 
115

Paradigm DKD Group, LLC#
Senior loan
 
L + 4.50%
 
5.75%
 
11/2018
 
2,149

 
2,128

 
0.3

 
2,149

Paradigm DKD Group, LLC
Senior loan
 
L + 4.50%
 
6.03%
 
11/2018
 
167

 
160

 

 
167

 
 
 
 
 
 
 
 
 
10,076

 
10,036

 
1.6

 
10,014

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Checmicals, Plastics and Rubber
 
 
 
 
 
 
 
 
  

 
  

 
 
 
  

Flexan, LLC*
One stop
 
L + 5.75%
 
6.90%
 
02/2020
 
1,046

 
1,037

 
0.2

 
1,046

Flexan, LLC
One stop
 
L + 5.75%
 
N/A(5)
 
02/2020
 

 

 

 

 
 
 
 
 
 
 
 
 
1,046

 
1,037

 
0.2

 
1,046

Diversified/Conglomerate Manufacturing
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Chase Industries, Inc.#*
One stop
 
L + 5.75%
 
6.75%
 
09/2020
 
6,974

 
6,971

 
1.1

 
6,974

Chase Industries, Inc.*
One stop
 
L + 5.75%
 
6.75%
 
09/2020
 
1,549

 
1,549

 
0.3

 
1,549

Chase Industries, Inc.
One stop
 
L + 5.75%
 
6.75%
 
09/2020
 
105

 
105

 

 
105

Inventus Power, Inc.#
One stop
 
L + 6.50%
 
7.50%
 
04/2020
 
10,147

 
10,077

 
1.5

 
9,741

Inventus Power, Inc.(4)
One stop
 
L + 6.50%
 
N/A(5)
 
04/2020
 

 
(4
)
 

 
(26
)
Onicon Incorporated*
One stop
 
L + 6.00%
 
7.02%
 
04/2020
 
181

 
179

 

 
181

Onicon Incorporated
One stop
 
L + 6.00%
 
N/A(5)
 
04/2020
 

 

 

 

Pasternack Enterprises, Inc. and Fairview Microwave, Inc.#
Senior loan
 
L + 5.00%
 
6.00%
 
05/2022
 
191

 
190

 

 
191

PetroChoice Holdings, Inc.*
Senior loan
 
L + 5.00%
 
6.00%
 
08/2022
 
1,637

 
1,594

 
0.3

 
1,637

Reladyne, Inc.#*
Senior loan
 
L + 5.25%
 
6.25%
 
07/2022
 
10,319

 
10,175

 
1.6

 
10,319

Reladyne, Inc.*
Senior loan
 
L + 5.25%
 
6.25%
 
07/2022
 
111

 
110

 

 
111



8

Golub Capital Investment Corporation and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2017
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares
(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Diversified/Conglomerate Manufacturing - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reladyne, Inc.
Senior loan
 
L + 5.25%
 
6.25%
 
07/2022
 
$
70

 
$
68

 

%
$
70

Reladyne, Inc.
Senior loan
 
L + 5.25%
 
6.25%
 
07/2022
 
36

 
36

 

 
36

Reladyne, Inc.
Senior loan
 
L + 5.25%
 
6.25%
 
07/2022
 
13

 
11

 

 
13

Sunless Merger Sub, Inc.#
Senior loan
 
L + 5.00%
 
6.25%
 
07/2019
 
292

 
254

 
0.1

 
292

Sunless Merger Sub, Inc.
Senior loan
 
P + 3.75%
 
7.50%
 
07/2019
 
17

 
15

 

 
17

  
 
 
 
 
 
 
 
 
31,642

 
31,330

 
4.9

 
31,210

Diversified/Conglomerate Service
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Accellos, Inc.#
One stop
 
L + 5.75%
 
6.90%
 
07/2020
 
463

 
459

 
0.1

 
463

Actiance, Inc.
One stop
 
L + 9.00%
 
10.00%
 
10/2019
 
1,918

 
1,857

 
0.3

 
1,918

Actiance, Inc.
One stop
 
L + 9.00%
 
N/A(5)
 
10/2019
 

 

 

 

Agility Recovery Solutions Inc.*
One stop
 
L + 6.50%
 
7.50%
 
03/2020
 
6,248

 
6,194

 
1.0

 
6,248

Agility Recovery Solutions Inc.(4)
One stop
 
L + 6.50%
 
N/A(5)
 
03/2020
 

 
(2
)
 

 

Bomgar Corporation#*
One stop
 
L + 7.50%
 
8.65%
 
06/2022
 
28,497

 
27,999

 
4.5

 
28,497

Bomgar Corporation(4)
One stop
 
L + 7.50%
 
N/A(5)
 
06/2022
 

 
(2
)
 

 

CIBT Holdings, Inc*
Senior loan
 
L + 5.25%
 
6.40%
 
06/2022
 
1,872

 
1,856

 
0.3

 
1,872

CIBT Holdings, Inc.
Senior loan
 
L + 5.25%
 
N/A(5)
 
06/2022
 

 

 

 

Clearwater Analytics, LLC#*
One stop
 
L + 7.50%
 
8.50%
 
09/2022
 
9,052

 
8,908

 
1.4

 
9,052

Clearwater Analytics, LLC
One stop
 
L + 7.50%
 
8.50%
 
09/2022
 
24

 
22

 

 
24

Daxko Acquisition Corporation#
One stop
 
L + 6.50%
 
7.50%
 
09/2022
 
8,445

 
8,329

 
1.3

 
8,445

Daxko Acquisition Corporation
One stop
 
L + 6.50%
 
N/A(5)
 
09/2022
 

 

 

 

DISA Holdings Acquisition Subsidiary Corp.*
Senior loan
 
L + 4.50%
 
5.50%
 
12/2020
 
1,368

 
1,358

 
0.2

 
1,340

DISA Holdings Acquisition Subsidiary Corp.
Senior loan
 
L + 4.50%
 
5.65%
 
12/2020
 
48

 
46

 

 
42

EGD Security Systems, LLC#*
One stop
 
L + 6.25%
 
7.25%
 
06/2022
 
10,372

 
10,259

 
1.6

 
10,372

EGD Security Systems, LLC*
One stop
 
L + 6.25%
 
7.25%
 
06/2022
 
98

 
97

 

 
98

EGD Security Systems, LLC
One stop
 
L + 6.25%
 
7.25%
 
06/2022
 
25

 
23

 

 
25

EGD Security Systems, LLC(4)
One stop
 
L + 6.25%
 
N/A(5)
 
06/2022
 

 
(1
)
 

 

HealthcareSource HR, Inc.#*
One stop
 
L + 6.75%
 
7.90%
 
05/2020
 
9,841

 
9,715

 
1.6

 
9,841

HealthcareSource HR, Inc.(4)
One stop
 
L + 6.75%
 
N/A(5)
 
05/2020
 

 
(1
)
 

 

Host Analytics, Inc.
One stop
 
N/A
 
8.50% cash/ 2.25% PIK
 
02/2020
 
1,365

 
1,352

 
0.2

 
1,365

Host Analytics, Inc.
One stop
 
N/A
 
8.50% cash/ 2.25% PIK
 
08/2021
 
1,144

 
1,080

 
0.2

 
1,144

Host Analytics, Inc.(4)
One stop
 
N/A
 
N/A(5)
 
02/2020
 

 
(3
)
 

 

III US Holdings, LLC(4)
One stop
 
L + 6.00%
 
N/A(5)
 
09/2022
 

 
(1
)
 

 

Integration Appliance, Inc.
One stop
 
L + 8.25%
 
9.50%
 
09/2020
 
1,550

 
1,538

 
0.2

 
1,550

Kinnser Software, Inc.#
One stop
 
L + 6.50%
 
7.65%
 
12/2022
 
9,756

 
9,640

 
1.5

 
9,756

Kinnser Software, Inc.(4)
One stop
 
L + 6.50%
 
N/A(5)
 
12/2021
 

 
(1
)
 

 

Netsmart Technologies, Inc.#
Senior loan
 
L + 4.50%
 
5.65%
 
04/2023
 
1,641

 
1,627

 
0.3

 
1,655

Netsmart Technologies, Inc.(4)
Senior loan
 
L + 4.75%
 
N/A(5)
 
04/2023
 

 
(9
)
 

 

Professional Datasolutions, Inc.#
Senior loan
 
L + 5.50%
 
6.50%
 
05/2022
 
3,788

 
3,731

 
0.6

 
3,731

Professional Datasolutions, Inc.
Senior loan
 
L + 5.50%
 
N/A(5)
 
05/2022
 

 

 

 

Project Alpha Intermediate Holding, Inc.#
One stop
 
L + 8.25%
 
9.25%
 
08/2022
 
16,426

 
15,982

 
2.6

 
16,426

PT Intermediate Holdings III, LLC#*
One stop
 
L + 6.50%
 
7.50%
 
06/2022
 
23,390

 
23,085

 
3.7

 
23,390

PT Intermediate Holdings III, LLC#
One stop
 
L + 6.50%
 
7.50%
 
06/2022
 
2,310

 
2,287

 
0.4

 
2,310

PT Intermediate Holdings III, LLC
One stop
 
L + 6.50%
 
8.22%
 
06/2022
 
91

 
88

 

 
91

Quickbase, Inc.#
One stop
 
L + 7.50%
 
8.65%
 
04/2022
 
11,410

 
11,219

 
1.8

 
11,410

Quickbase, Inc.(4)
One stop
 
L + 7.50%
 
N/A(5)
 
04/2022
 

 
(2
)
 

 

Secure-24, LLC*
One stop
 
L + 5.00%
 
6.00%
 
08/2019
 
1,801

 
1,789

 
0.3

 
1,801

Secure-24, LLC
One stop
 
L + 5.00%
 
N/A(5)
 
08/2019
 

 

 

 

Severin Acquisition, LLC#
Senior loan
 
L + 4.75%
 
5.90%
 
07/2021
 
8,589

 
8,465

 
1.3

 
8,460

Severin Acquisition, LLC*
Senior loan
 
L + 5.38%
 
6.52%
 
07/2021
 
1,434

 
1,416

 
0.2

 
1,446



9

Golub Capital Investment Corporation and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2017
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares
(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Diversified/Conglomerate Service - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Severin Acquisition, LLC*
Senior loan
 
L + 5.00%
 
6.15%
 
07/2021
 
$
1,277

 
$
1,261

 
0.2

%
$
1,269

Severin Acquisition, LLC#
Senior loan
 
L + 5.38%
 
6.52%
 
07/2021
 
976

 
963

 
0.2

 
984

Severin Acquisition, LLC*
Senior loan
 
L + 4.88%
 
6.02%
 
07/2021
 
315

 
311

 
0.1

 
312

Severin Acquisition, LLC(4)
Senior loan
 
L + 4.75%
 
N/A(5)
 
07/2021
 

 
(8
)
 

 
(1
)
TA MHI Buyer, Inc.*
One stop
 
L + 6.00%
 
7.15%
 
09/2021
 
6,589

 
6,529

 
1.0

 
6,589

TA MHI Buyer, Inc.#
One stop
 
L + 6.00%
 
7.15%
 
09/2021
 
4,301

 
4,227

 
0.7

 
4,301

TA MHI Buyer, Inc.#
One stop
 
L + 6.00%
 
7.15%
 
09/2021
 
1,027

 
1,016

 
0.2

 
1,027

TA MHI Buyer, Inc.#
One stop
 
L + 6.00%
 
7.15%
 
09/2021
 
534

 
528

 
0.1

 
534

TA MHI Buyer, Inc.#
One stop
 
L + 6.00%
 
7.15%
 
09/2021
 
190

 
188

 

 
190

TA MHI Buyer, Inc.
One stop
 
L + 6.00%
 
N/A(5)
 
09/2021
 

 

 

 

Trintech, Inc.*
One stop
 
L + 6.00%
 
7.04%
 
10/2021
 
8,787

 
8,701

 
1.4

 
8,787

Trintech, Inc.
One stop
 
L + 6.00%
 
N/A(5)
 
10/2021
 

 

 

 

Vendavo, Inc.
One stop
 
L + 8.50%
 
9.52%
 
10/2019
 
4,331

 
4,301

 
0.7

 
4,257

Vendavo, Inc.(4)
One stop
 
L + 8.50%
 
N/A(5)
 
10/2019
 

 
(2
)
 

 
(6
)
Vendor Credentialing Service LLC#*
One stop
 
L + 6.00%
 
7.00%
 
11/2021
 
11,285

 
11,148

 
1.8

 
11,285

Vendor Credentialing Service LLC(4)
One stop
 
L + 6.00%
 
N/A(5)
 
11/2021
 

 
(1
)
 

 

Verisys Corporation#
One stop
 
L + 6.75%
 
7.77%
 
01/2023
 
4,829

 
4,759

 
0.8

 
4,781

Verisys Corporation(4)
One stop
 
L + 6.75%
 
N/A(5)
 
01/2023
 

 
(1
)
 

 
(1
)
Vitalyst, LLC#
Senior loan
 
L + 5.00%
 
6.37%
 
09/2017
 
87

 
87

 

 
87

Vitalyst, LLC
Senior loan
 
L + 5.00%
 
N/A(5)
 
09/2017
 

 

 

 

Workforce Software, LLC
One stop
 
L + 10.50%
 
4.51% cash/ 7.00% PIK
 
06/2021
 
22,116

 
21,982

 
3.5

 
22,116

Workforce Software, LLC
One stop
 
L + 10.50%
 
N/A(5)
 
06/2021
 

 

 

 

Xmatters, Inc. and Alarmpoint, Inc.
One stop
 
L + 9.25%
 
9.50% cash/ 0.75% PIK
 
08/2021
 
4,644

 
4,568

 
0.7

 
4,644

Xmatters, Inc. and Alarmpoint, Inc.
One stop
 
L + 9.25%
 
N/A(5)
 
08/2021
 

 

 

 

  
 
 
 
 
 
 
 
 
234,254

 
230,956

 
37.0

 
233,927

Ecological
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pace Analytical Services, LLC#*
One stop
 
L + 6.25%
 
7.25%
 
09/2022
 
15,297

 
15,051

 
2.4

 
15,297

Pace Analytical Services, LLC
One stop
 
L + 6.25%
 
7.25%
 
09/2022
 
12

 
6

 

 
12

Pace Analytical Services, LLC(4)
One stop
 
L + 6.25%
 
N/A(5)
 
09/2022
 

 
(2
)
 

 

 
 
 
 
 
 
 
 
 
15,309

 
15,055

 
2.4

 
15,309

Electronics
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Appriss Holdings, Inc.#*
Senior loan
 
L + 5.25%
 
6.40%
 
11/2020
 
10,271

 
10,184

 
1.6

 
10,271

Appriss Holdings, Inc.
Senior loan
 
L + 5.25%
 
6.40%
 
11/2020
 
896

 
887

 
0.1

 
896

Compusearch Software Holdings, Inc.*
Senior loan
 
L + 4.25%
 
5.28%
 
05/2021
 
713

 
712

 
0.1

 
713

Diligent Corporation#*
One stop
 
L + 6.75%
 
7.75%
 
04/2022
 
31,859

 
31,182

 
5.1

 
32,031

Diligent Corporation#*
One stop
 
L + 6.25%
 
7.25%
 
04/2022
 
8,934

 
8,809

 
1.4

 
8,819

Diligent Corporation(4)
One stop
 
L + 6.75%
 
N/A(5)
 
04/2022
 

 
(2
)
 

 

ECI Acquisition Holdings, Inc.*
One stop
 
L + 6.25%
 
7.40%
 
03/2019
 
7,112

 
7,112

 
1.1

 
7,112

ECI Acquisition Holdings, Inc.#
One stop
 
L + 6.25%
 
7.40%
 
03/2019
 
460

 
460

 
0.1

 
460

ECI Acquisition Holdings, Inc.
One stop
 
L + 6.25%
 
N/A(5)
 
03/2019
 

 

 

 

Gamma Technologies, LLC*
One stop
 
L + 5.00%
 
6.00%
 
06/2021
 
4,962

 
4,927

 
0.8

 
4,962

Gamma Technologies, LLC(4)
One stop
 
L + 5.00%
 
N/A(5)
 
06/2021
 

 
(1
)
 

 

LD Intermediate Holdings, Inc.*
Senior loan
 
L + 5.88%
 
6.88%
 
12/2022
 
2,916

 
2,693

 
0.4

 
2,795

Park Place Technologies LLC#*
One stop
 
L + 5.00%
 
6.15%
 
06/2022
 
13,882

 
13,724

 
2.2

 
13,882

Park Place Technologies LLC(4)
One stop
 
L + 5.00%
 
N/A(5)
 
06/2022
 

 
(2
)
 

 

SEI, Inc.#
Senior loan
 
L + 4.75%
 
5.75%
 
07/2021
 
666

 
660

 
0.1

 
666

Sloan Company, Inc., The#
One stop
 
L + 7.25%
 
8.40%
 
04/2020
 
3,608

 
3,566

 
0.6

 
3,427

Sloan Company, Inc., The
One stop
 
L + 7.25%
 
8.33%
 
04/2020
 
21

 
21

 

 
19

Sovos Compliance#*
One stop
 
L + 7.25%
 
8.40%
 
03/2022
 
32,586

 
32,047

 
5.2

 
32,586

Sovos Compliance(4)
One stop
 
L + 7.25%
 
N/A(5)
 
03/2022
 

 
(1
)
 

 



10

Golub Capital Investment Corporation and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2017
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares
(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Electronics - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sparta Holding Corporation*
One stop
 
L + 5.50%
 
6.65%
 
07/2020
 
$
695

 
$
695

 
0.1

%
$
695

Sparta Holding Corporation
One stop
 
L + 5.50%
 
N/A(5)
 
07/2020
 

 

 

 

 
 
 
 
 
 
 
 
 
119,581

 
117,673

 
18.9

 
119,334

Grocery
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Teasdale Quality Foods, Inc.#
Senior loan
 
L + 4.75%
 
5.78%
 
10/2020
 
170

 
168

 

 
173

Teasdale Quality Foods, Inc.*
Senior loan
 
L + 4.75%
 
5.92%
 
10/2020
 
127

 
126

 

 
129

 
 
 
 
 
 
 
 
 
297

 
294

 

 
302

Healthcare, Education and Childcare
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Active Day, Inc.#*
One stop
 
L + 6.00%
 
7.00%
 
12/2021
 
11,584

 
11,424

 
1.8

 
11,584

Active Day, Inc.*
One stop
 
L + 6.00%
 
7.00%
 
12/2021
 
894

 
887

 
0.1

 
894

Active Day, Inc.(4)
One stop
 
L + 6.00%
 
N/A(5)
 
12/2021
 

 
(1
)
 

 

Active Day, Inc.(4)
One stop
 
L + 6.00%
 
N/A(5)
 
12/2021
 

 
(21
)
 

 

Acuity Eyecare Holdings, LLC#
One stop
 
P + 5.75%
 
9.75%
 
03/2022
 
4,853

 
4,781

 
0.8

 
4,805

Acuity Eyecare Holdings, LLC(4)
One stop
 
L + 6.75%
 
N/A(5)
 
03/2022
 

 
(1
)
 

 

Acuity Eyecare Holdings, LLC(4)
One stop
 
L + 6.75%
 
N/A(5)
 
03/2022
 

 
(48
)
 

 
(32
)
ADCS Clinics Intermediate Holdings, LLC#
One stop
 
L + 5.75%
 
6.90%
 
05/2022
 
22,016

 
21,638

 
3.5

 
22,016

ADCS Clinics Intermediate Holdings, LLC#
One stop
 
L + 5.75%
 
6.90%
 
05/2022
 
109

 
108

 

 
109

ADCS Clinics Intermediate Holdings, LLC*
One stop
 
L + 5.75%
 
6.90%
 
05/2022
 
32

 
32

 

 
32

ADCS Clinics Intermediate Holdings, LLC
One stop
 
P + 4.75%
 
8.75%
 
05/2022
 
33

 
31

 

 
33

ADCS Clinics Intermediate Holdings, LLC
One stop
 
P + 4.75%
 
8.75%
 
05/2022
 
5

 
1

 

 
5

Advanced Pain Management Holdings, Inc.#
Senior loan
 
L + 5.00%
 
6.25%
 
02/2018
 
5,800

 
5,798

 
0.8

 
5,336

Advanced Pain Management Holdings, Inc.#
Senior loan
 
L + 5.00%
 
6.25%
 
02/2018
 
397

 
396

 
0.1

 
365

Advanced Pain Management Holdings, Inc.
Senior loan
 
L + 5.00%
 
N/A(5)
 
02/2018
 

 

 

 

Agilitas USA, Inc.*
Senior loan
 
L + 4.00%
 
5.00%
 
10/2020
 
509

 
506

 
0.1

 
509

Apothecary Products, LLC*
Senior loan
 
L + 4.00%
 
5.29%
 
02/2019
 
1,857

 
1,857

 
0.3

 
1,857

Apothecary Products, LLC
Senior loan
 
L + 4.00%
 
5.35%
 
02/2019
 
472

 
472

 
0.1

 
472

Aris Teleradiology Company, LLC#*
Senior loan
 
L + 5.50%
 
6.65%
 
03/2021
 
2,519

 
2,497

 
0.4

 
2,519

Aris Teleradiology Company, LLC
Senior loan
 
L + 5.50%
 
6.50%
 
03/2021
 
15

 
15

 

 
15

Avalign Technologies, Inc.*
Senior loan
 
L + 4.50%
 
5.50%
 
07/2021
 
756

 
754

 
0.1

 
756

BIORECLAMATIONIVT, LLC#*
One stop
 
L + 5.75%
 
6.75%
 
01/2021
 
12,664

 
12,496

 
2.0

 
12,664

BIORECLAMATIONIVT, LLC(4)
One stop
 
L + 5.75%
 
N/A(5)
 
01/2021
 

 
(1
)
 

 

California Cryobank, LLC*
One stop
 
L + 5.50%
 
6.65%
 
08/2019
 
2,647

 
2,647

 
0.4

 
2,647

California Cryobank, LLC*
One stop
 
L + 5.50%
 
6.50%
 
08/2019
 
1,231

 
1,214

 
0.2

 
1,231

California Cryobank, LLC*
One stop
 
L + 5.50%
 
6.65%
 
08/2019
 
359

 
359

 
0.1

 
359

California Cryobank, LLC
One stop
 
L + 5.50%
 
N/A(5)
 
08/2019
 

 

 

 

Certara L.P.#*
One stop
 
L + 5.50%
 
6.65%
 
12/2018
 
2,334

 
2,317

 
0.4

 
2,317

CLP Healthcare Services, Inc.*
Senior loan
 
L + 5.25%
 
6.40%
 
12/2020
 
941

 
933

 
0.1

 
941

Curo Health Services LLC#
Senior loan
 
L + 4.75%
 
5.79%
 
02/2022
 
831

 
831

 
0.1

 
838

DCA Investment Holding, LLC#*
One stop
 
L + 5.25%
 
6.25%
 
07/2021
 
14,676

 
14,537

 
2.3

 
14,676

DCA Investment Holding, LLC#*
One stop
 
L + 5.25%
 
6.25%
 
07/2021
 
13,694

 
13,523

 
2.2

 
13,694

DCA Investment Holding, LLC#*
One stop
 
L + 5.25%
 
6.25%
 
07/2021
 
6,134

 
6,024

 
1.0

 
6,134

DCA Investment Holding, LLC
One stop
 
P + 4.25%
 
8.25%
 
07/2021
 
354

 
339

 
0.1

 
354

DCA Investment Holding, LLC(4)
One stop
 
L + 5.25%
 
N/A(5)
 
07/2021
 

 
(4
)
 

 

Deca Dental Management LLC
One stop
 
L + 6.25%
 
7.40%
 
07/2020
 
7,558

 
7,482

 
1.2

 
7,558

Deca Dental Management LLC
One stop
 
L + 6.25%
 
7.34%
 
07/2020
 
919

 
913

 
0.1

 
919

Deca Dental Management LLC
One stop
 
L + 6.25%
 
7.25%
 
07/2020
 
50

 
50

 

 
50

Deca Dental Management LLC(4)
One stop
 
L + 6.25%
 
N/A(5)
 
07/2020
 

 
(8
)
 

 

Dental Holdings Corporation*
One stop
 
L + 5.50%
 
6.50%
 
02/2020
 
3,369

 
3,336

 
0.5

 
3,369

Dental Holdings Corporation
One stop
 
L + 5.50%
 
6.52%
 
02/2020
 
513

 
507

 
0.1

 
513

Dental Holdings Corporation(4)
One stop
 
L + 5.50%
 
N/A(5)
 
02/2020
 

 
(5
)
 

 



11

Golub Capital Investment Corporation and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2017
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares
(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Healthcare, Education and Childcare - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
eSolutions, Inc.#*
One stop
 
L + 6.50%
 
7.50%
 
03/2022
 
$
11,629

 
$
11,508

 
1.8

%
$
11,629

eSolutions, Inc.(4)
One stop
 
L + 6.50%
 
N/A(5)
 
03/2022
 

 
(1
)
 

 

Katena Holdings, Inc.*
One stop
 
L + 6.25%
 
7.27%
 
06/2021
 
4,544

 
4,510

 
0.7

 
4,544

Katena Holdings, Inc.*
One stop
 
L + 6.25%
 
7.27%
 
06/2021
 
443

 
440

 
0.1

 
443

Katena Holdings, Inc.
One stop
 
P + 5.25%
 
9.25%
 
06/2021
 
38

 
37

 

 
38

Lombart Brothers, Inc.#
One stop
 
L + 6.75%
 
7.90%
 
04/2022
 
3,394

 
3,336

 
0.5

 
3,343

Lombart Brothers, Inc.#(7)
One stop
 
L + 6.75%
 
7.90%
 
04/2022
 
1,558

 
1,531

 
0.2

 
1,534

Lombart Brothers, Inc.(7)
One stop
 
L + 6.75%
 
7.75%
 
04/2022
 
2

 
2

 

 
2

Lombart Brothers, Inc.(4)
One stop
 
L + 6.75%
 
N/A(5)
 
04/2022
 

 
(1
)
 

 
(1
)
Maverick Healthcare Group, LLC#
Senior loan
 
L + 7.50%
 
7.25% cash/ 2.00% PIK
 
04/2017
 
637

 
637

 
0.1

 
611

Maverick Healthcare Group, LLC
Senior loan
 
P + 6.50%
 
5.00% cash/ 5.50% PIK
 
04/2017
 
27

 
27

 

 
27

Oliver Street Dermatology Holdings, LLC#*
One stop
 
L + 6.50%
 
7.65%
 
05/2022
 
8,850

 
8,710

 
1.4

 
8,850

Oliver Street Dermatology Holdings, LLC
One stop
 
P + 5.50%
 
8.64%
 
05/2022
 
54

 
53

 

 
54

Oliver Street Dermatology Holdings, LLC*
One stop
 
L + 6.50%
 
7.54%
 
05/2022
 
42

 
42

 

 
42

Oliver Street Dermatology Holdings, LLC
One stop
 
L + 6.50%
 
7.53%
 
05/2022
 
33

 
32

 

 
33

Oliver Street Dermatology Holdings, LLC
One stop
 
L + 6.50%
 
7.53%
 
05/2022
 
30

 
30

 

 
30

Oliver Street Dermatology Holdings, LLC(4)
One stop
 
L + 6.50%
 
N/A(5)
 
05/2022
 

 
(1
)
 

 

Pinnacle Treatment Centers, Inc.#
One stop
 
L + 6.25%
 
7.25%
 
08/2021
 
9,797

 
9,647

 
1.6

 
9,797

Pinnacle Treatment Centers, Inc.
One stop
 
P + 5.00%
 
9.00%
 
08/2021
 
18

 
16

 

 
18

Pinnacle Treatment Centers, Inc.(4)
One stop
 
L + 6.25%
 
N/A(5)
 
08/2021
 

 
(2
)
 

 

PPT Management Holdings, LLC#*
One stop
 
L + 6.00%
 
7.15%
 
12/2022
 
11,771

 
11,518

 
1.9

 
11,771

PPT Management Holdings, LLC
One stop
 
L + 6.00%
 
7.33%
 
12/2022
 
120

 
116

 

 
120

PPT Management Holdings, LLC
One stop
 
L + 6.00%
 
N/A(5)
 
12/2022
 

 

 

 

Premise Health Holding Corp.*
One stop
 
L + 4.50%
 
5.65%
 
06/2020
 
1,997

 
1,997

 
0.3

 
1,997

Premise Health Holding Corp.
One stop
 
L + 4.50%
 
N/A(5)
 
06/2020
 

 

 

 

Pyramid Healthcare, Inc.
One stop
 
L + 6.50%
 
7.50%
 
08/2019
 
20

 
18

 

 
20

Radiology Partners, Inc.#
One stop
 
L + 5.75%
 
6.90%
 
09/2020
 
4,421

 
4,377

 
0.7

 
4,421

Radiology Partners, Inc.
One stop
 
L + 5.75%
 
6.90%
 
09/2020
 
100

 
99

 

 
100

Reliant Pro ReHab, LLC*
Senior loan
 
L + 5.00%
 
6.15%
 
12/2017
 
1,162

 
1,160

 
0.2

 
1,162

Reliant Pro ReHab, LLC
Senior loan
 
P + 4.00%
 
8.00%
 
12/2017
 
73

 
73

 

 
73

Riverchase MSO, LLC*
Senior loan
 
L + 5.25%
 
6.40%
 
10/2022
 
4,000

 
3,944

 
0.6

 
4,000

Riverchase MSO, LLC
Senior loan
 
L + 5.25%
 
6.40%
 
10/2022
 
15

 
14

 

 
15

RXH Buyer Corporation#
One stop
 
L + 5.75%
 
6.90%
 
09/2021
 
11,191

 
11,025

 
1.7

 
10,631

RXH Buyer Corporation*
One stop
 
L + 5.75%
 
6.90%
 
09/2021
 
1,266

 
1,257

 
0.2

 
1,203

RXH Buyer Corporation
One stop
 
P + 4.75%
 
8.75%
 
09/2021
 
22

 
20

 

 
12

RXH Buyer Corporation(4)
One stop
 
L + 5.75%
 
N/A(5)
 
09/2021
 

 
(17
)
 

 
(27
)
Spear Education, LLC*
One stop
 
L + 5.75%
 
6.75%
 
08/2019
 
3,552

 
3,538

 
0.6

 
3,552

Spear Education, LLC
One stop
 
L + 5.75%
 
6.75%
 
08/2019
 
182

 
181

 

 
182

Spear Education, LLC(4)
One stop
 
L + 5.75%
 
N/A(5)
 
08/2019
 

 
(1
)
 

 

Summit Behavioral Holdings I, LLC*
One stop
 
L + 5.00%
 
6.02%
 
06/2021
 
4,158

 
4,113

 
0.7

 
4,158

Summit Behavioral Holdings I, LLC(4)
One stop
 
L + 5.00%
 
N/A(5)
 
06/2021
 

 
(1
)
 

 

Summit Behavioral Holdings I, LLC(4)
One stop
 
L + 5.00%
 
N/A(5)
 
06/2021
 

 
(1
)
 

 

Surgical Information Systems, LLC*
Senior loan
 
L + 3.00%
 
4.16%
 
09/2018
 
170

 
170

 

 
170

U.S. Anesthesia Partners, Inc.*
One stop
 
L + 5.00%
 
6.01%
 
12/2019
 
3,760

 
3,760

 
0.6

 
3,760

U.S. Anesthesia Partners, Inc.#
Senior loan
 
L + 5.00%
 
6.00%
 
12/2019
 
1,024

 
1,014

 
0.2

 
1,024

WHCG Management, LLC#*
Senior loan
 
L + 4.75%
 
5.90%
 
03/2023
 
6,207

 
6,130

 
1.0

 
6,145

WHCG Management, LLC(4)
Senior loan
 
L + 4.75%
 
N/A(5)
 
03/2023
 

 
(1
)
 

 
(1
)
WHCG Management, LLC(4)
Senior loan
 
L + 4.75%
 
N/A(5)
 
03/2023
 

 
(56
)
 

 
(76
)
WIRB-Copernicus Group, Inc.#
Senior loan
 
L + 5.00%
 
6.15%
 
08/2022
 
9,434

 
9,350

 
1.5

 
9,387

WIRB-Copernicus Group, Inc.#
Senior loan
 
L + 5.00%
 
6.15%
 
08/2022
 
5,449

 
5,401

 
0.9

 
5,421



12

Golub Capital Investment Corporation and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2017
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares
(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Healthcare, Education and Childcare - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
WIRB-Copernicus Group, Inc.
Senior loan
 
L + 5.00%
 
N/A(5)
 
08/2022
 
$

 
$

 

%
$

 
 
 
 
 
 
 
 
 
231,315

 
228,367

 
36.4

 
229,753

Home and Office Furnishings, Housewares, and Durable Consumer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1A Smart Start LLC#
Senior loan
 
P + 3.50%
 
7.50%
 
02/2022
 
602

 
599

 
0.1

 
601

CST Buyer Company*
Senior loan
 
L + 6.25%
 
7.46%
 
03/2023
 
3,368

 
3,276

 
0.5

 
3,275

CST Buyer Company(4)
Senior loan
 
L + 6.25%
 
N/A(5)
 
03/2023
 

 
(1
)
 

 
(1
)
Plano Molding Company, LLC#
One stop
 
L + 7.50%
 
8.50%
 
05/2021
 
7,026

 
6,945

 
1.0

 
6,464

 
 
 
 
 
 
 
 
 
10,996

 
10,819

 
1.6

 
10,339

Hotels, Motels, Inns, and Gaming
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Aimbridge Hospitality, LLC*
Senior loan
 
L + 4.50%
 
5.75%
 
10/2018
 
390

 
385

 
0.1

 
390

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Insurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Captive Resources Midco, LLC#*
One stop
 
L + 5.75%
 
6.75%
 
06/2020
 
8,086

 
8,019

 
1.3

 
8,086

Captive Resources Midco, LLC(4)
One stop
 
L + 5.75%
 
N/A(5)
 
06/2020
 

 
(3
)
 

 

Captive Resources Midco, LLC(4)
One stop
 
L + 5.75%
 
N/A(5)
 
06/2020
 

 
(8
)
 

 

Higginbotham Insurance Agency, Inc.*
Senior loan
 
L + 5.00%
 
6.00%
 
11/2021
 
1,379

 
1,369

 
0.2

 
1,379

Internet Pipeline, Inc.#*
One stop
 
L + 7.25%
 
8.25%
 
08/2022
 
10,409

 
10,271

 
1.6

 
10,409

Internet Pipeline, Inc.(4)
One stop
 
L + 7.25%
 
N/A(5)
 
08/2021
 

 
(1
)
 

 

RSC Acquisition, Inc.#*
Senior loan
 
L + 5.25%
 
6.40%
 
11/2022
 
539

 
535

 
0.1

 
539

  
 
 
 
 
 
 
 
 
20,413

 
20,182

 
3.2

 
20,413

Leisure, Amusement, Motion Pictures, Entertainment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Competitor Group, Inc.#
One stop
 
L + 9.25%
 
5.00% cash/ 5.50% PIK
 
11/2018
 
436

 
406

 
0.1

 
392

Competitor Group, Inc.
One stop
 
L + 9.25%
 
5.00% cash/ 5.50% PIK
 
11/2018
 
51

 
48

 

 
46

Competitor Group, Inc.
One stop
 
L + 9.25%
 
5.00% cash/ 5.50% PIK
 
11/2018
 
14

 
14

 

 
14

NFD Operating, LLC*
One stop
 
L + 7.00%
 
8.25%
 
06/2021
 
2,181

 
2,153

 
0.4

 
2,181

NFD Operating, LLC
One stop
 
P + 5.75%
 
9.75%
 
06/2021
 
12

 
12

 

 
12

NFD Operating, LLC(4)
One stop
 
L + 7.00%
 
N/A(5)
 
06/2021
 

 
(1
)
 

 

Self Esteem Brands, LLC#*
Senior loan
 
L + 4.75%
 
5.75%
 
02/2020
 
10,113

 
10,036

 
1.6

 
10,011

Teaching Company, The#*
One stop
 
L + 6.25%
 
7.25%
 
08/2020
 
12,148

 
12,086

 
1.9

 
11,904

Teaching Company, The
One stop
 
L + 6.25%
 
7.51%
 
08/2020
 
58

 
57

 

 
55

Titan Fitness, LLC*
One stop
 
L + 7.00%
 
8.25%
 
09/2019
 
1,964

 
1,964

 
0.3

 
1,964

Titan Fitness, LLC#
One stop
 
L + 7.00%
 
8.25%
 
09/2019
 
260

 
260

 

 
260

Titan Fitness, LLC
One stop
 
L + 7.00%
 
8.25%
 
09/2019
 
174

 
169

 

 
174

Titan Fitness, LLC
One stop
 
P + 5.75%
 
9.75%
 
09/2019
 
136

 
136

 

 
136

 
 
 
 
 
 
 
 
 
27,547

 
27,340

 
4.3

 
27,149

Mining, Steel, Iron and Non-Precious Metals
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benetech, Inc.#
One stop
 
L + 11.00%
 
10.25% cash/ 2.00% PIK
 
10/2017
 
196

 
196

 

 
177

Benetech, Inc.(4)
One stop
 
P + 9.75%
 
11.64% cash/ 2.00% PIK
 
10/2017
 
3

 
3

 

 
(2
)
 
 
 
 
 
 
 
 
 
199

 
199

 

 
175

Oil and Gas
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Drilling Info, Inc.*
One stop
 
L + 6.25%
 
7.28%
 
06/2020
 
3,900

 
3,856

 
0.6

 
3,900

Drilling Info, Inc.*
One stop
 
L + 6.35%
 
7.38%
 
06/2020
 
949

 
935

 
0.2

 
949

 
 
 
 
 
 
 
 
 
4,849

 
4,791

 
0.8

 
4,849

Personal and Non Durable Consumer Products (Mfg. Only)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Georgica Pine Clothiers, LLC*
One stop
 
L + 5.50%
 
6.65%
 
11/2021
 
4,897

 
4,859

 
0.8

 
4,897

Georgica Pine Clothiers, LLC#
One stop
 
L + 5.50%
 
6.65%
 
11/2021
 
428

 
424

 
0.1

 
428

Georgica Pine Clothiers, LLC*
One stop
 
L + 5.50%
 
6.65%
 
11/2021
 
300

 
297

 

 
300

Georgica Pine Clothiers, LLC
One stop
 
P + 4.50%
 
8.50%
 
11/2021
 
28

 
27

 

 
28



13

Golub Capital Investment Corporation and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2017
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares
(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Personal and Non Durable Consumer Products (Mfg. Only) - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Massage Envy, LLC*
One stop
 
L + 6.75%
 
7.90%
 
09/2020
 
$
3,168

 
$
3,145

 
0.5

%
$
3,168

Massage Envy, LLC
One stop
 
L + 6.75%
 
7.79%
 
09/2020
 
100

 
99

 

 
100

Massage Envy, LLC
One stop
 
L + 6.75%
 
N/A(5)
 
09/2020
 

 

 

 

Orthotics Holdings, Inc.#
One stop
 
L + 5.00%
 
6.00%
 
02/2020
 
3,713

 
3,686

 
0.6

 
3,602

Orthotics Holdings, Inc.#(7)
One stop
 
L + 5.00%
 
6.00%
 
02/2020
 
609

 
604

 
0.1

 
590

Orthotics Holdings, Inc.(7)
One stop
 
L + 5.00%
 
N/A(5)
 
02/2020
 

 

 

 

Orthotics Holdings, Inc.(4)
One stop
 
L + 5.00%
 
N/A(5)
 
02/2020
 

 
(4
)
 

 

Team Technologies Acquisition Company*
Senior loan
 
L + 5.00%
 
6.25%
 
12/2017
 
276

 
276

 

 
275

Team Technologies Acquisition Company#
Senior loan
 
L + 5.50%
 
6.76%
 
12/2017
 
51

 
51

 

 
51

Team Technologies Acquisition Company
Senior loan
 
L + 5.00%
 
N/A(5)
 
12/2017
 

 

 

 

 
 
 
 
 
 
 
 
 
13,570

 
13,464

 
2.1

 
13,439

Personal, Food and Miscellaneous Services
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Clarkson Eyecare LLC#*
One stop
 
L + 6.25%
 
7.40%
 
04/2021
 
17,278

 
17,061

 
2.7

 
17,278

Clarkson Eyecare LLC
One stop
 
L + 6.25%
 
7.40%
 
04/2021
 
8,572

 
8,502

 
1.4

 
8,572

Clarkson Eyecare LLC#
One stop
 
L + 6.25%
 
7.40%
 
04/2021
 
2,971

 
2,947

 
0.5

 
2,971

Clarkson Eyecare LLC#
One stop
 
L + 6.25%
 
7.40%
 
04/2021
 
2,530

 
2,510

 
0.4

 
2,530

Clarkson Eyecare LLC#
One stop
 
L + 6.25%
 
7.40%
 
04/2021
 
666

 
666

 
0.1

 
666

Clarkson Eyecare LLC
One stop
 
L + 6.25%
 
7.34%
 
04/2021
 
720

 
663

 
0.1

 
720

Clarkson Eyecare LLC#
One stop
 
L + 6.25%
 
7.40%
 
04/2021
 
492

 
482

 
0.1

 
492

Clarkson Eyecare LLC
One stop
 
L + 6.25%
 
7.40%
 
04/2021
 
277

 
272

 

 
277

Community Veterinary Partners, LLC(4)
One stop
 
L + 5.50%
 
N/A(5)
 
10/2021
 

 
(1
)
 

 

Ignite Restaurant Group, Inc (Joe's Crab Shack)*
One stop
 
L + 7.00%
 
8.06%
 
02/2019
 
1,036

 
1,036

 
0.1

 
777

PetVet Care Centers LLC#
Senior loan
 
L + 4.75%
 
5.90%
 
12/2020
 
2,406

 
2,385

 
0.4

 
2,406

PetVet Care Centers LLC*
Senior loan
 
L + 4.75%
 
5.90%
 
12/2020
 
1,809

 
1,781

 
0.3

 
1,809

PetVet Care Centers LLC*
Senior loan
 
L + 4.75%
 
5.90%
 
12/2020
 
1,571

 
1,558

 
0.3

 
1,571

PetVet Care Centers LLC
Senior loan
 
L + 4.75%
 
5.87%
 
12/2020
 
100

 
99

 

 
100

PetVet Care Centers LLC(4)
Senior loan
 
L + 4.75%
 
N/A(5)
 
12/2020
 

 
(4
)
 

 

R.G. Barry Corporation#
Senior loan
 
L + 5.00%
 
6.00%
 
09/2019
 
1,359

 
1,359

 
0.2

 
1,346

Vetcor Professional Practices LLC#*
One stop
 
L + 6.00%
 
7.15%
 
04/2021
 
27,415

 
26,970

 
4.3

 
27,415

Vetcor Professional Practices LLC
One stop
 
L + 6.00%
 
7.15%
 
04/2021
 
2,372

 
2,332

 
0.4

 
2,372

Vetcor Professional Practices LLC#
One stop
 
L + 6.00%
 
7.15%
 
04/2021
 
631

 
626

 
0.1

 
631

Vetcor Professional Practices LLC*
One stop
 
L + 6.00%
 
7.15%
 
04/2021
 
626

 
615

 
0.1

 
626

Vetcor Professional Practices LLC
One stop
 
L + 6.00%
 
7.15%
 
04/2021
 
666

 
537

 
0.1

 
666

Vetcor Professional Practices LLC
One stop
 
L + 6.00%
 
7.15%
 
04/2021
 
491

 
480

 
0.1

 
491

Vetcor Professional Practices LLC
One stop
 
L + 6.00%
 
7.15%
 
04/2021
 
479

 
471

 
0.1

 
479

Vetcor Professional Practices LLC*
One stop
 
L + 6.00%
 
7.15%
 
04/2021
 
188

 
187

 

 
188

Vetcor Professional Practices LLC*
One stop
 
L + 6.00%
 
7.15%
 
04/2021
 
154

 
153

 

 
154

Vetcor Professional Practices LLC(4)
One stop
 
L + 6.00%
 
N/A(5)
 
04/2021
 

 
(4
)
 

 

Veterinary Specialists of North America, LLC#*
One stop
 
L + 5.25%
 
6.28%
 
07/2021
 
3,871

 
3,828

 
0.6

 
3,823

Veterinary Specialists of North America, LLC#
One stop
 
L + 5.25%
 
6.28%
 
07/2021
 
33

 
33

 

 
33

Veterinary Specialists of North America, LLC(4)
One stop
 
L + 5.25%
 
N/A(5)
 
07/2021
 

 
(2
)
 

 
(2
)
Veterinary Specialists of North America, LLC(4)
One stop
 
L + 5.25%
 
N/A(5)
 
07/2021
 

 
(9
)
 

 
(9
)
Wetzel's Pretzels, LLC*
One stop
 
L + 6.75%
 
7.75%
 
09/2021
 
6,354

 
6,254

 
1.0

 
6,354

Wetzel's Pretzels, LLC(4)
One stop
 
L + 6.75%
 
N/A(5)
 
09/2021
 

 
(1
)
 

 

  
 
 
 
 
 
 
 
 
85,067

 
83,786

 
13.4

 
84,736

Printing and Publishing
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brandmuscle, Inc.#
Senior loan
 
L + 5.00%
 
6.15%
 
12/2021
 
540

 
536

 
0.1

 
545

Market Track, LLC#*
One stop
 
L + 7.00%
 
8.00%
 
10/2019
 
19,521

 
19,339

 
3.1

 
19,521



14

Golub Capital Investment Corporation and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2017
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares
(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Printing and Publishing - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Market Track, LLC#
One stop
 
L + 7.00%
 
8.15%
 
10/2019
 
$
4,957

 
$
4,942

 
0.8

%
$
4,957

Market Track, LLC#
One stop
 
L + 7.00%
 
8.15%
 
10/2019
 
4,059

 
4,003

 
0.6

 
4,059

Market Track, LLC#
One stop
 
L + 7.00%
 
8.15%
 
10/2019
 
2,251

 
2,226

 
0.4

 
2,251

Market Track, LLC
One stop
 
L + 7.00%
 
8.09%
 
10/2019
 
1,535

 
1,519

 
0.2

 
1,535

Market Track, LLC#
One stop
 
L + 7.00%
 
8.15%
 
10/2019
 
803

 
791

 
0.1

 
803

Market Track, LLC*
One stop
 
L + 7.00%
 
8.09%
 
10/2019
 
377

 
376

 
0.1

 
377

Market Track, LLC#
One stop
 
L + 7.00%
 
8.08%
 
10/2019
 
371

 
369

 
0.1

 
371

Market Track, LLC*
One stop
 
L + 7.00%
 
8.15%
 
10/2019
 
223

 
222

 

 
223

Marketo, Inc.
One stop
 
L + 9.50%
 
10.65%
 
08/2021
 
20,640

 
20,098

 
3.3

 
20,640

Marketo, Inc.(4)
One stop
 
L + 9.50%
 
N/A(5)
 
08/2021
 

 
(2
)
 

 

 
 
 
 
 
 
 
 
 
55,277

 
54,419

 
8.8

 
55,282

Retail Stores
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Batteries Plus Holding Corporation#*
One stop
 
L + 6.75%
 
7.75%
 
07/2022
 
13,152

 
12,968

 
2.1

 
13,152

Batteries Plus Holding Corporation(4)
One stop
 
L + 6.75%
 
N/A(5)
 
07/2022
 

 
(2
)
 

 

CVS Holdings I, LP#*
One stop
 
L + 6.25%
 
7.40%
 
08/2021
 
17,227

 
16,989

 
2.7

 
17,227

CVS Holdings I, LP#
One stop
 
L + 6.25%
 
7.40%
 
08/2021
 
249

 
245

 

 
249

CVS Holdings I, LP(4)
One stop
 
L + 6.25%
 
N/A(5)
 
08/2020
 

 
(3
)
 

 

CVS Holdings I, LP(4)
One stop
 
L + 6.25%
 
N/A(5)
 
08/2021
 

 
(7
)
 

 

Cycle Gear, Inc.*
One stop
 
L + 6.50%
 
7.50%
 
01/2020
 
7,610

 
7,536

 
1.2

 
7,610

Cycle Gear, Inc.
One stop
 
P + 5.25%
 
9.25%
 
01/2020
 
567

 
559

 
0.1

 
567

Cycle Gear, Inc.(4)
One stop
 
L + 6.50%
 
N/A(5)
 
01/2020
 

 
(8
)
 

 

DTLR, Inc.#*
One stop
 
L + 6.50%
 
7.54%
 
10/2020
 
9,729

 
9,660

 
1.5

 
9,729

Elite Sportswear, L.P.#
Senior loan
 
L + 5.25%
 
6.40%
 
03/2020
 
3,109

 
3,082

 
0.5

 
3,116

Elite Sportswear, L.P.#
Senior loan
 
L + 5.00%
 
6.15%
 
03/2020
 
1,250

 
1,239

 
0.2

 
1,245

Elite Sportswear, L.P.#
Senior loan
 
L + 5.25%
 
6.40%
 
03/2020
 
643

 
638

 
0.1

 
645

Elite Sportswear, L.P.
Senior loan
 
P + 3.75%
 
7.75%
 
03/2020
 
205

 
202

 

 
204

Elite Sportswear, L.P.#
Senior loan
 
L + 5.25%
 
6.40%
 
03/2020
 
98

 
97

 

 
98

Express Oil Change, LLC
Senior loan
 
L + 5.00%
 
6.04%
 
12/2017
 
107

 
107

 

 
107

Express Oil Change, LLC
Senior loan
 
L + 5.00%
 
N/A(5)
 
04/2018
 

 

 

 

Feeders Supply Company, LLC#*
One stop
 
L + 5.75%
 
6.75%
 
04/2021
 
4,859

 
4,809

 
0.8

 
4,859

Feeders Supply Company, LLC
Subordinated debt
 
N/A
 
12.50% cash/ 7.00% PIK
 
04/2021
 
53

 
53

 

 
53

Feeders Supply Company, LLC
One stop
 
L + 5.75%
 
6.75%
 
04/2021
 
3

 
2

 

 
3

Marshall Retail Group, LLC, The#
One stop
 
L + 6.00%
 
7.00%
 
08/2020
 
3,182

 
3,182

 
0.5

 
3,118

Marshall Retail Group, LLC, The(4)
One stop
 
L + 6.00%
 
N/A(5)
 
08/2019
 

 

 

 
(11
)
Mills Fleet Farm Group LLC#*
One stop
 
L + 5.50%
 
6.50%
 
02/2022
 
11,650

 
11,133

 
1.9

 
11,650

Pet Holdings ULC#(7)(8)
One stop
 
L + 5.50%
 
6.50%
 
07/2022
 
32,512

 
31,940

 
5.2

 
32,512

Pet Holdings ULC(7)(8)
One stop
 
P + 4.50%
 
8.50%
 
07/2022
 
64

 
61

 

 
64

Pet Holdings ULC(7)(8)
One stop
 
P + 4.50%
 
8.50%
 
07/2022
 
9

 
8

 

 
9

Sneaker Villa, Inc.#
One stop
 
L + 7.75%
 
8.75%
 
12/2020
 
172

 
171

 

 
172

 
 
 
 
 
 
 
 
 
106,450

 
104,661

 
16.8

 
106,378

Telecommunications
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

NetMotion Wireless Holdings, Inc.*
One stop
 
L + 6.25%
 
7.40%
 
10/2021
 
7,315

 
7,216

 
1.2

 
7,315

NetMotion Wireless Holdings, Inc.(4)
One stop
 
L + 6.25%
 
N/A(5)
 
10/2021
 

 
(1
)
 

 

Wilcon Operations LLC*
One stop
 
L + 6.00%
 
7.15%
 
10/2018
 
2,704

 
2,695

 
0.4

 
2,704

Wilcon Operations LLC*
One stop
 
L + 6.00%
 
7.15%
 
10/2018
 
1,103

 
1,103

 
0.2

 
1,103

Wilcon Operations LLC*
One stop
 
L + 6.00%
 
7.15%
 
10/2018
 
412

 
409

 
0.1

 
412

Wilcon Operations LLC
One stop
 
L + 6.00%
 
7.09%
 
10/2018
 
359

 
356

 
0.1

 
359

Wilcon Operations LLC
One stop
 
L + 6.00%
 
7.04%
 
10/2018
 
216

 
200

 

 
216

Wilcon Operations LLC
One stop
 
L + 6.00%
 
7.15%
 
10/2018
 
161

 
159

 

 
161

  
 
 
 
 
 
 
 
 
12,270

 
12,137

 
2.0

 
12,270



15

Golub Capital Investment Corporation and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2017
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares
(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Textile and Leather
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

SHO Holding I Corporation*
Senior loan
 
L + 5.00%
 
6.00%
 
10/2022
 
$
1,927

 
$
1,889

 
0.3

%
$
1,927

SHO Holding I Corporation(4)
Senior loan
 
L + 4.00%
 
N/A(5)
 
10/2021
 

 
(1
)
 

 
(2
)
  
 
 
 
 
 
 
 
 
1,927

 
1,888

 
0.3

 
1,925

Utilities
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Arcos, LLC*
One stop
 
L + 6.50%
 
7.75%
 
02/2021
 
3,703

 
3,674

 
0.6

 
3,703

Arcos, LLC
One stop
 
L + 6.50%
 
N/A(5)
 
02/2021
 

 

 

 

PowerPlan Holdings, Inc.*
Senior loan
 
L + 4.75%
 
5.75%
 
02/2022
 
847

 
833

 
0.1

 
847

  
 
 
 
 
 
 
 
 
4,550

 
4,507

 
0.7

 
4,550

Total non-controlled/non-affiliate company debt investments
 
 
 
 
 
$
1,103,361

 
$
1,088,135

 
173.8

%
$
1,097,865

 
  
 
  
 
  
 
  
 
 
 
  

 
  

 
 
Equity investments (9)(10)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Automobile
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Polk Acquisition Corp.
LP interest
 
N/A
 
N/A
 
N/A
 
4

 
$
401

 
0.1

%
$
443

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beverage, Food and Tobacco
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Hopdoddy Holdings, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
17

 
84

 

 
50

Hopdoddy Holdings, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
8

 
24

 

 
14

P&P Food Safety US Acquisition, Inc.
LLC interest
 
N/A
 
N/A
 
N/A
 
2

 
203

 

 
203

Purfoods, LLC
LLC interest
 
N/A
 
N/A
 
N/A
 
355

 
355

 
0.1

 
417

 
 
 
 
 
 
 
 
 
 
 
666

 
0.1

 
684

Chemicals, Plastics and Rubber
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Flexan, LLC
Preferred stock
 
N/A
 
N/A
 
N/A
 

 
40

 

 
46

Flexan, LLC
Common stock
 
N/A
 
N/A
 
N/A
 

 

 

 
7

 
 
 
 
 
 
 
 
 
 
 
40

 

 
53

Diversified/Conglomerate Manufacturing
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inventus Power, Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 

 
259

 

 
68

Inventus Power, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 

 

 

 

Reladyne, Inc.
LP interest
 
N/A
 
N/A
 
N/A
 

 
242

 
0.1

 
298

 
 
 
 
 
 
 
 
 
 
 
501

 
0.1

 
366

Diversified/Conglomerate Service
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Actiance, Inc.
Warrant
 
N/A
 
N/A
 
N/A
 
248

 
59

 

 
64

Agility Recovery Solutions Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 
30

 
152

 

 
217

Bomgar Corporation
Common stock
 
N/A
 
N/A
 
N/A
 
1

 
620

 
0.1

 
569

Bomgar Corporation
Common stock
 
N/A
 
N/A
 
N/A
 
415

 
6

 

 

HealthcareSource HR, Inc.
LLC interest
 
N/A
 
N/A
 
N/A
 

 
165

 

 
170

Host Analytics, Inc.
Warrant
 
N/A
 
N/A
 
N/A
 
154

 
58

 

 
122

Project Alpha Intermediate Holding, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 

 
399

 
0.1

 
421

Project Alpha Intermediate Holding, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
99

 
4

 

 
109

Quickbase, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
615

 
615

 
0.1

 
770

TA MHI Buyer, Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 

 
81

 
0.1

 
328

Verisys Corporation
LLC interest
 
N/A
 
N/A
 
N/A
 
318

 
318

 
0.1

 
318

Workforce Software, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
1,309

 
1,309

 
0.2

 
1,384

Xmatters, Inc. and Alarmpoint, Inc.
Warrant
 
N/A
 
N/A
 
N/A
 
41

 
33

 

 
30

 
 
 
 
 
 
 
 
 
 
 
3,819

 
0.7

 
4,502

Ecological
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pace Analytical Services, LLC
Common stock
 
N/A
 
N/A
 
N/A
 
3

 
274

 
0.1

 
298

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Electronics
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diligent Corporation
Preferred stock
 
N/A
 
N/A
 
N/A
 
535

 
535

 
0.2

 
978

Gamma Technologies, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
1

 
82

 

 
204



16

Golub Capital Investment Corporation and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2017
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares
(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Electronics - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SEI, Inc.
LLC units
 
N/A
 
N/A
 
N/A
 
207

 
$
161

 

%
$
176

Sloan Company, Inc., The
LLC units
 
N/A
 
N/A
 
N/A
 

 
59

 

 
4

Sloan Company, Inc., The
LLC units
 
N/A
 
N/A
 
N/A
 
1

 
7

 

 

Syncsort Incorporated
Preferred stock
 
N/A
 
N/A
 
N/A
 
78

 
194

 
0.1

 
282

 
 
 
 
 
 
 
 
 
 
 
1,038

 
0.3

 
1,644

Healthcare, Education and Childcare
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Active Day, Inc.
LLC interest
 
N/A
 
N/A
 
N/A
 
1

 
529

 
0.1

 
637

Acuity Eyecare Holdings, LLC
LLC interest
 
N/A
 
N/A
 
N/A
 
419

 
419

 
0.1

 
419

ADCS Clinics Intermediate Holdings, LLC
Preferred stock
 
N/A
 
N/A
 
N/A
 
1

 
596

 
0.1

 
638

ADCS Clinics Intermediate Holdings, LLC
Common stock
 
N/A
 
N/A
 
N/A
 

 
6

 

 
43

BIORECLAMATIONIVT, LLC
LLC units
 
N/A
 
N/A
 
N/A
 

 
323

 
0.1

 
445

DCA Investment Holding, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
5,253

 
525

 
0.1

 
595

DCA Investment Holding, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
53

 
5

 

 
73

Deca Dental Management LLC
LLC units
 
N/A
 
N/A
 
N/A
 
651

 
651

 
0.1

 
763

Dental Holdings Corporation
LLC units
 
N/A
 
N/A
 
N/A
 
359

 
359

 
0.1

 
361

Encore GC Acquisition, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
8

 
81

 

 
68

Encore GC Acquisition, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
8

 

 

 

Katena Holdings, Inc.
LLC units
 
N/A
 
N/A
 
N/A
 

 
205

 

 
205

Lombart Brothers, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 

 
123

 

 
172

Oliver Street Dermatology Holdings, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
218

 
218

 

 
277

Pinnacle Treatment Centers, Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 

 
216

 

 
211

Pinnacle Treatment Centers, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
2

 
2

 

 

RXH Buyer Corporation
LP interest
 
N/A
 
N/A
 
N/A
 
4

 
443

 

 
135

WHCG Management, LLC
LLC interest
 
N/A
 
N/A
 
N/A
 

 
281

 
0.1

 
281

 
 
 
 
 
 
 
 
 
 
 
4,982

 
0.8

 
5,323

Insurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Internet Pipeline, Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 

 
207

 
0.1

 
261

Internet Pipeline, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
90

 
2

 

 
167

 
 
 
 
 
 
 
 
 
 
 
209

 
0.1

 
428

Leisure, Amusement, Motion Pictures, Entertainment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Competitor Group, Inc.#
Preferred stock
 
N/A
 
N/A
 
N/A
 

 
184

 

 

Competitor Group, Inc.#
Common stock
 
N/A
 
N/A
 
N/A
 

 

 

 

 
 
 
 
 
 
 
 
 
 
 
184

 

 

Mining, Steel, Iron and Non-Precious Metals
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benetech, Inc.#
LLC interest
 
N/A
 
N/A
 
N/A
 

 

 

 

Benetech, Inc.#
LLC interest
 
N/A
 
N/A
 
N/A
 

 

 

 

 
 
 
 
 
 
 
 
 
 
 

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Personal and Non Durable Consumer Products (Mfg. Only)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Georgica Pine Clothiers, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
9

 
91

 

 
105

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Personal, Food and Miscellaneous Services
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Clarkson Eyecare LLC
LLC units
 
N/A
 
N/A
 
N/A
 

 
63

 

 
136

Community Veterinary Partners, LLC
Common stock
 
N/A
 
N/A
 
N/A
 
1

 
98

 

 
125

Vetcor Professional Practices LLC
LLC units
 
N/A
 
N/A
 
N/A
 
498

 
298

 
0.1

 
318

Vetcor Professional Practices LLC
LLC units
 
N/A
 
N/A
 
N/A
 
55

 
55

 
0.1

 
565

Veterinary Specialists of North America, LLC
LLC units
 
N/A
 
N/A
 
N/A
 

 
56

 

 
76

Wetzel's Pretzels, LLC
Common stock
 
N/A
 
N/A
 
N/A
 

 
149

 

 
161

 
 
 
 
 
 
 
 
 
 
 
719

 
0.2

 
1,381



17

Golub Capital Investment Corporation and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2017
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares
(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Printing and Publishing
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brandmuscle, Inc.
LLC interest
 
N/A
 
N/A
 
N/A
 

 
$
207

 

%
$
225

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail Stores
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Batteries Plus Holding Corporation
LP interest
 
N/A
 
N/A
 
N/A
 
5

 
505

 
0.1

 
618

Cycle Gear, Inc.
LLC units
 
N/A
 
N/A
 
N/A
 
8

 
111

 

 
172

Elite Sportswear, L.P.
LLC interest
 
N/A
 
N/A
 
N/A
 

 
71

 

 
93

Feeders Supply Company, LLC
Preferred stock
 
N/A
 
N/A
 
N/A
 
2

 
179

 
0.1

 
194

Feeders Supply Company, LLC
Common stock
 
N/A
 
N/A
 
N/A
 

 

 

 
51

Pet Holdings ULC(7)(8)
LP interest
 
N/A
 
N/A
 
N/A
 
222

 
188

 

 
158

 
 
 
 
 
 
 
 
 
 
 
1,054

 
0.2

 
1,286

Utilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PowerPlan Holdings, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 

 
135

 

 
162

PowerPlan Holdings, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
68

 
1

 

 
137

 
 
 
 
 
 
 
 
 
 
 
136

 

 
299

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-controlled/non-affiliate company equity investments
 
 
 
 
 
 
 
$
14,321

 
2.7

%
$
17,037

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-controlled/non-affiliate company investments
 
 
 
 
 
$
1,103,361

 
$
1,102,456

 
176.5

%
$
1,114,902

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Controlled affiliate company investments(11)
 
 
 
 
 
 
 
 
 
 
 
 
Equity investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment Funds and Vehicles
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GCIC Senior Loan Fund LLC(7)
LLC interest
 
N/A
 
N/A
 
N/A
 
 
 
$
51,340

 
8.3

%
$
52,423

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total controlled affiliate company equity investments
 
 
 
 
 
 
 
$
51,340

 
8.3

%
$
52,423

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total investments
 
 
 
 
 
$
1,103,361

 
$
1,153,796

 
184.8

%
$
1,167,325

 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents and restricted cash and cash equivalents
 
 
 
  
 
  

 
  

 
  

 
  

Cash and restricted cash
 
 
 
  
 
  

 
$
46,058

 
7.3

%
$
46,058

BlackRock Liquidity Funds T-Fund Institutional Shares (CUSIP 09248U718)
 
0.37% (12)
 
  
 
  

 
6,748

 
1.1

 
6,748

Total cash and cash equivalents and restricted cash and cash equivalents
 
 
 
 
 
$
52,806

 
8.4

%
$
52,806

 
 
 
 
 
 
 
 
 
 
 
Total investments and cash and cash equivalents and restricted cash and cash equivalents
 
 
 
 
 
$
1,206,602

 
193.2

%
$
1,220,131

 
# 
 
Denotes that all or a portion of the investment collateralized the Credit Facility (as defined in Note 8).
* 
 
Denotes that all or a portion of the investment secures the notes offered in the GCIC 2016 Debt Securitization (as defined in Note 8).

(1)The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate (‘‘LIBOR’’ or ‘‘L’’) or Prime (‘‘P’’) and which reset daily, quarterly or semiannually. For each, the Company has provided the spread over LIBOR or Prime and the weighted average current interest rate in effect at March 31, 2017. Certain investments are subject to a LIBOR or Prime interest rate floor. For fixed rate loans, a spread above a reference rate is not applicable.
(2)For portfolio companies with multiple interest rate contracts, the interest rate shown is a weighted average current interest rate in effect at March 31, 2017.
(3)The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.
(4)The negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par. The negative amortized cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan.
(5)The entire commitment was unfunded at March 31, 2017. As such, no interest is being earned on this investment. The investment may be subject to an unused facility fee.
(6)Loan was on non-accrual status as of March 31, 2017, meaning that the Company has ceased recognizing interest income on the loan.


18

Golub Capital Investment Corporation and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2017
(In thousands)


(7)The investment is treated as a non-qualifying asset under Section 55(a) of the Investment Company Act of 1940, as amended (the ‘‘1940 Act’’). Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company’s total assets. As of March 31, 2017, total non-qualifying assets at fair value represented 7.2% of the Company’s assets calculated in accordance with the 1940 Act.
(8)The headquarters of this portfolio company is located in Canada.
(9)Non-income producing securities.
(10) Ownership of certain equity investments may occur through a holding company or partnership.
(11) As defined in the 1940 Act, the Company is deemed to be both an ‘‘Affiliated Person’’ of and ‘‘Control’’ this portfolio company as the Company owns more than 25% of the portfolio company’s outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement). See Note 6 in the accompanying notes to the consolidated financial statements for transactions during the three months ended March 31, 2017 in which the issuer was both an Affiliated Person and a portfolio company that the Company is deemed to Control.
(12)The rate shown is the annualized seven-day yield as of March 31, 2017.





19


Golub Capital Investment Corporation and Subsidiaries
Consolidated Schedule of Investments
September 30, 2016
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal/Par
Amount(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Investments
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Non-controlled/non-affiliate company investments
 
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Debt investments
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Aerospace and Defense
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

ILC Dover, LP
One stop
 
L + 9.00%
 
8.00% cash/2.00% PIK
 
03/2020
 
$
2,370

 
$
2,314

 
0.3

%
$
2,015

ILC Dover, LP
One stop
 
L + 9.00%
 
8.00% cash/2.00% PIK
 
03/2019
 
105

 
102

 

 
89

NTS Technical Systems*
One stop
 
L + 6.25%
 
7.25%
 
06/2021
 
3,893

 
3,839

 
0.6

 
3,815

NTS Technical Systems(4)
One stop
 
L + 6.25%
 
N/A(5)
 
06/2021
 

 
(12
)
 

 
(11
)
NTS Technical Systems(4)
One stop
 
L + 6.25%
 
N/A(5)
 
06/2021
 

 
(6
)
 

 
(8
)
Tresys Technology Holdings, Inc.(6)
One stop
 
L + 6.75%
 
8.00%
 
12/2017
 
53

 
28

 

 
16

Tresys Technology Holdings, Inc.
One stop
 
L + 6.75%
 
8.00%
 
12/2017
 
7

 
7

 

 
7

Tronair Parent, Inc.
Senior loan
 
L + 4.50%
 
N/A(5)
 
09/2021
 

 

 

 

Whitcraft LLC*
One stop
 
L + 6.50%
 
7.50%
 
05/2020
 
6,745

 
6,695

 
1.1

 
6,745

Whitcraft LLC(4)
One stop
 
L + 6.50%
 
N/A(5)
 
05/2020
 

 
(1
)
 

 

 
 
 
 
 
 
 
 
 
13,173

 
12,966

 
2.0

 
12,668

Automobile
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

American Driveline Systems, Inc.
Senior loan
 
L + 5.75%
 
6.75%
 
03/2020
 
378

 
347

 
0.1

 
378

American Driveline Systems, Inc.
Senior loan
 
L + 5.75%
 
6.75%
 
03/2020
 
49

 
48

 

 
49

American Driveline Systems, Inc.
Senior loan
 
P + 4.75%
 
8.25%
 
03/2020
 
10

 
5

 

 
10

CH Hold Corp.*
Senior loan
 
L + 5.25%
 
6.25%
 
11/2019
 
2,295

 
2,279

 
0.4

 
2,295

Dent Wizard International Corporation*
Senior loan
 
L + 4.75%
 
5.75%
 
04/2020
 
1,192

 
1,187

 
0.2

 
1,192

K&N Engineering, Inc.*
Senior loan
 
P + 3.25%
 
6.75%
 
07/2019
 
1,139

 
1,139

 
0.2

 
1,139

K&N Engineering, Inc.*#
Senior loan
 
L + 4.25%
 
5.25%
 
07/2019
 
55

 
55

 

 
55

K&N Engineering, Inc.
Senior loan
 
L + 4.25%
 
N/A(5)
 
07/2019
 

 

 

 

OEConnection LLC#
Senior loan
 
L + 5.00%
 
6.00%
 
06/2022
 
11,167

 
10,892

 
1.8

 
11,167

OEConnection LLC(4)
Senior loan
 
L + 5.00%
 
N/A(5)
 
06/2021
 

 
(1
)
 

 

Polk Acquisition Corp.*#
Senior loan
 
L + 5.00%
 
6.00%
 
06/2022
 
13,601

 
13,395

 
2.2

 
13,601

Polk Acquisition Corp.
Senior loan
 
L + 5.00%
 
6.00%
 
06/2022
 
54

 
53

 

 
54

Polk Acquisition Corp.
Senior loan
 
L + 5.00%
 
6.64%
 
06/2022
 
18

 
16

 

 
18

Polk Acquisition Corp.(4)
Senior loan
 
L + 5.00%
 
N/A(5)
 
06/2022
 

 
(2
)
 

 

T5 Merger Corporation*#
One stop
 
L + 6.25%
 
7.25%
 
03/2022
 
22,118

 
21,756

 
3.6

 
21,897

T5 Merger Corporation(4)
One stop
 
L + 6.25%
 
N/A(5)
 
03/2022
 

 
(2
)
 

 
(1
)
  
 
 
 
 
 
 
 
 
52,076

 
51,167

 
8.5

 
51,854

Beverage, Food and Tobacco
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Abita Brewing Co., L.L.C.#
One stop
 
L + 5.75%
 
6.75%
 
04/2021
 
3,858

 
3,828

 
0.6

 
3,472

Abita Brewing Co., L.L.C.(4)
One stop
 
L + 5.75%
 
6.75%
 
04/2021
 
4

 
3

 

 
(11
)
ABP Corporation*
Senior loan
 
L + 4.75%
 
6.00%
 
09/2018
 
604

 
604

 
0.1

 
574

ABP Corporation
Senior loan
 
P + 3.50%
 
7.25%
 
09/2018
 
32

 
32

 

 
29

Benihana, Inc.#
One stop
 
L + 6.00%
 
7.25%
 
01/2019
 
303

 
303

 

 
297

Benihana, Inc.
One stop
 
P + 4.75%
 
7.92%
 
07/2018
 
32

 
32

 

 
31

C. J. Foods, Inc.*
One stop
 
L + 5.00%
 
6.00%
 
05/2019
 
7,648

 
7,648

 
1.2

 
7,648

C. J. Foods, Inc.
One stop
 
L + 5.00%
 
6.00%
 
05/2019
 
1,613

 
1,613

 
0.3

 
1,613

C. J. Foods, Inc.
One stop
 
L + 5.00%
 
N/A(5)
 
05/2019
 

 

 

 

Firebirds International, LLC*
One stop
 
L + 5.75%
 
7.00%
 
05/2018
 
3,331

 
3,331

 
0.5

 
3,331

Firebirds International, LLC*
One stop
 
L + 5.75%
 
7.00%
 
05/2018
 
938

 
938

 
0.2

 
938

Firebirds International, LLC
One stop
 
L + 5.75%
 
7.00%
 
05/2018
 
171

 
171

 

 
171

Firebirds International, LLC
One stop
 
L + 5.75%
 
N/A(5)
 
05/2018
 

 

 

 

First Watch Restaurants, Inc.*
One stop
 
L + 6.00%
 
7.15%
 
12/2020
 
3,569

 
3,540

 
0.6

 
3,569

First Watch Restaurants, Inc.
One stop
 
P + 5.00%
 
8.05%
 
12/2020
 
224

 
223

 

 
224

First Watch Restaurants, Inc.
One stop
 
L + 6.00%
 
7.00%
 
12/2020
 
175

 
174

 

 
175

First Watch Restaurants, Inc.
One stop
 
L + 6.00%
 
7.00%
 
12/2020
 
175

 
174

 

 
175



20

Golub Capital Investment Corporation and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2016
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal/Par
Amount(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Beverage, Food and Tobacco - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
First Watch Restaurants, Inc.(4)
One stop
 
L + 6.00%
 
N/A(5)
 
12/2020
 
$

 
$
(1
)
 

%
$

Hopdoddy Holdings, LLC
One stop
 
L + 8.00%
 
9.00%
 
08/2020
 
426

 
422

 
0.1

 
426

Hopdoddy Holdings, LLC
One stop
 
L + 8.00%
 
N/A(5)
 
08/2020
 

 

 

 

Hopdoddy Holdings, LLC(4)
One stop
 
L + 8.00%
 
N/A(5)
 
08/2020
 

 
(2
)
 

 

Julio & Sons Company*
One stop
 
L + 5.50%
 
6.50%
 
12/2018
 
945

 
941

 
0.2

 
945

Julio & Sons Company
One stop
 
L + 5.50%
 
6.50%
 
12/2018
 
147

 
146

 

 
147

Julio & Sons Company
One stop
 
L + 5.50%
 
6.50%
 
12/2018
 
83

 
81

 

 
83

Purfoods, LLC*#
One stop
 
L + 6.25%
 
7.25%
 
05/2021
 
8,047

 
7,936

 
1.3

 
8,047

Purfoods, LLC
One stop
 
N/A
 
7.00% PIK
 
05/2026
 
95

 
95

 

 
95

Purfoods, LLC
One stop
 
L + 6.25%
 
7.25%
 
05/2021
 
25

 
24

 

 
25

Purfoods, LLC(4)
One stop
 
L + 6.25%
 
N/A(5)
 
05/2021
 

 
(1
)
 

 

Smashburger Finance LLC*
Senior loan
 
L + 5.50%
 
6.75%
 
05/2018
 
529

 
527

 
0.1

 
518

Smashburger Finance LLC(4)
Senior loan
 
L + 5.50%
 
N/A(5)
 
05/2018
 

 
(12
)
 

 

Surfside Coffee Company LLC*
One stop
 
L + 5.25%
 
6.25%
 
06/2020
 
2,345

 
2,327

 
0.4

 
2,345

Surfside Coffee Company LLC
One stop
 
L + 5.25%
 
6.25%
 
06/2020
 
177

 
173

 

 
177

Surfside Coffee Company LLC
One stop
 
L + 5.25%
 
6.25%
 
06/2020
 
26

 
25

 

 
26

Tate's Bake Shop, Inc.#
Senior loan
 
L + 5.00%
 
6.00%
 
08/2019
 
144

 
143

 

 
144

Uinta Brewing Company#
One stop
 
L + 8.50%
 
9.50%
 
08/2019
 
900

 
900

 
0.1

 
873

Uinta Brewing Company
One stop
 
L + 8.50%
 
9.50%
 
08/2019
 
74

 
74

 

 
71

 
 
 
 
 
 
 
 
 
36,640

 
36,412

 
5.7

 
36,158

Broadcasting and Entertainment
 
 
 
 
 
 
 
 
  

 
  

 
 
 
  

Extreme Reach Inc.*
Senior loan
 
L + 6.25%
 
7.25%
 
02/2020
 
933

 
907

 
0.2

 
943

TouchTunes Interactive Networks, Inc.*
Senior loan
 
L + 4.75%
 
5.75%
 
05/2021
 
697

 
695

 
0.1

 
700

 
 
 
 
 
 
 
 
 
1,630

 
1,602

 
0.3

 
1,643

Building and Real Estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brooks Equipment Company, LLC*
One stop
 
L + 5.00%
 
6.00%
 
08/2020
 
6,135

 
6,135

 
1.0

 
6,135

Brooks Equipment Company, LLC
One stop
 
L + 5.00%
 
N/A(5)
 
08/2020
 

 

 

 

Paradigm DKD Group, LLC#
Senior loan
 
L + 5.25%
 
6.50%
 
11/2018
 
2,160

 
2,132

 
0.4

 
2,116

Paradigm DKD Group, LLC
Senior loan
 
L + 5.25%
 
6.70%
 
11/2018
 
195

 
185

 

 
179

 
 
 
 
 
 
 
 
 
8,490

 
8,452

 
1.4

 
8,430

Cargo Transport
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Worldwide Express Operations, LLC*
Senior loan
 
L + 5.00%
 
6.00
 
07/2019
 
1,767

 
1,752

 
0.3

 
1,767

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Containers, Packaging and Glass
 
 
 
 
 
 
 
 
  

 
  

 
 
 
  

Fort Dearborn Company*
Senior loan
 
L + 4.75%
 
5.75%
 
10/2018
 
960

 
959

 
0.2

 
960

Fort Dearborn Company*
Senior loan
 
L + 4.25%
 
5.25%
 
10/2017
 
164

 
164

 

 
164

 
 
 
 
 
 
 
 
 
1,124

 
1,123

 
0.2

 
1,124

Diversified Conglomerate Manufacturing
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Chase Industries, Inc.*#
One stop
 
L + 5.75%
 
6.81%
 
09/2020
 
7,009

 
7,006

 
1.1

 
7,009

Chase Industries, Inc.
One stop
 
L + 5.75%
 
7.13%
 
09/2020
 
1,555

 
1,555

 
0.3

 
1,555

Chase Industries, Inc.
One stop
 
L + 5.75%
 
N/A(5)
 
09/2020
 

 

 

 

Inventus Power, Inc#
One stop
 
L + 5.50%
 
6.50%
 
04/2020
 
10,481

 
10,428

 
1.6

 
9,643

Inventus Power, Inc(4)
One stop
 
L + 5.50%
 
N/A(5)
 
04/2020
 

 
(3
)
 

 
(52
)
Onicon Incorporated*#
One stop
 
L + 6.00%
 
7.00%
 
04/2020
 
184

 
182

 

 
182

Onicon Incorporated
One stop
 
L + 6.00%
 
N/A(5)
 
04/2020
 

 

 

 

Pasternack Enterprises, Inc. and Fairview Microwave, Inc.#
Senior loan
 
L + 5.00%
 
6.00%
 
05/2022
 
2,296

 
2,273

 
0.4

 
2,273

PetroChoice Holdings, Inc.*
Senior loan
 
L + 5.00%
 
6.00%
 
08/2022
 
1,645

 
1,598

 
0.3

 
1,645

Reladyne, Inc.#
Senior loan
 
L + 5.25%
 
6.25%
 
07/2022
 
9,850

 
9,697

 
1.6

 
9,751

Reladyne, Inc.
Senior loan
 
L + 5.25%
 
6.25%
 
07/2022
 
111

 
110

 

 
110



21

Golub Capital Investment Corporation and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2016
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal/Par
Amount(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Diversified Conglomerate Manufacturing - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reladyne, Inc.
Senior loan
 
P + 4.25%
 
7.75%
 
07/2022
 
$
26

 
$
24

 

%
$
24

Reladyne, Inc.(4)
Senior loan
 
L + 5.25%
 
N/A(5)
 
07/2022
 

 
(2
)
 

 
(1
)
Sunless Merger Sub, Inc.
Senior loan
 
L + 5.00%
 
6.25%
 
07/2019
 
298

 
252

 

 
298

Sunless Merger Sub, Inc.
Senior loan
 
P + 3.75%
 
7.25%
 
07/2019
 
30

 
27

 

 
30

  
 
 
 
 
 
 
 
 
33,485

 
33,147

 
5.3

 
32,467

Diversified Conglomerate Service
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Accellos, Inc.*
One stop
 
L + 5.75%
 
6.75%
 
07/2020
 
6,268

 
6,260

 
1.0

 
6,268

Accellos, Inc.
One stop
 
L + 5.75%
 
N/A(5)
 
07/2020
 

 

 

 

Actiance, Inc.
One stop
 
L + 9.00%
 
10.00%
 
04/2018
 
1,401

 
1,367

 
0.2

 
1,401

Actiance, Inc.
One stop
 
L + 9.00%
 
N/A(5)
 
04/2018
 

 

 

 

Agility Recovery Solutions Inc.*
One stop
 
L + 6.50%
 
7.50%
 
03/2020
 
6,280

 
6,216

 
1.0

 
6,280

Agility Recovery Solutions Inc.(4)
One stop
 
L + 6.50%
 
N/A(5)
 
03/2020
 

 
(3
)
 

 

Bomgar Corporation*#
One stop
 
L + 7.50%
 
8.50%
 
06/2022
 
28,641

 
28,094

 
4.6

 
28,641

Bomgar Corporation(4)
One stop
 
L + 7.50%
 
N/A(5)
 
06/2022
 

 
(2
)
 

 

CIBT Holdings, Inc*
Senior loan
 
L + 5.25%
 
6.25%
 
06/2022
 
1,882

 
1,863

 
0.3

 
1,882

CIBT Holdings, Inc.
Senior loan
 
L + 5.25%
 
N/A(5)
 
06/2022
 

 

 

 

Clearwater Analytics, LLC*#
One stop
 
L + 7.50%
 
8.50%
 
09/2022
 
9,337

 
9,176

 
1.5

 
9,220

Clearwater Analytics, LLC(4)
One stop
 
L + 7.50%
 
N/A(5)
 
09/2022
 

 
(2
)
 

 
(1
)
Daxko Acquisition Corporation#
One stop
 
L + 6.50%
 
7.50%
 
09/2022
 
8,488

 
8,361

 
1.4

 
8,403

Daxko Acquisition Corporation(4)
One stop
 
L + 6.50%
 
N/A(5)
 
09/2022
 

 
(1
)
 

 

DISA Holdings Acquisition Subsidiary Corp.*
Senior loan
 
L + 4.50%
 
5.50%
 
12/2020
 
1,375

 
1,364

 
0.2

 
1,333

DISA Holdings Acquisition Subsidiary Corp.
Senior loan
 
L + 4.50%
 
5.50%
 
12/2020
 
77

 
75

 

 
67

EGD Security Systems, LLC*#
One stop
 
L + 6.25%
 
7.25%
 
06/2022
 
10,372

 
10,248

 
1.7

 
10,372

EGD Security Systems, LLC
One stop
 
L + 6.25%
 
7.25%
 
06/2022
 
98

 
96

 

 
98

EGD Security Systems, LLC(4)
One stop
 
L + 6.25%
 
N/A(5)
 
06/2022
 

 
(2
)
 

 

HealthcareSource HR, Inc.*
One stop
 
L + 6.75%
 
7.75%
 
05/2020
 
8,367

 
8,259

 
1.4

 
8,367

HealthcareSource HR, Inc.(4)
One stop
 
L + 6.75%
 
N/A(5)
 
05/2020
 

 
(1
)
 

 

Host Analytics, Inc.
One stop
 
N/A
 
8.50% cash/2.25% PIK
 
02/2020
 
1,349

 
1,335

 
0.2

 
1,339

Host Analytics, Inc.
One stop
 
N/A
 
8.50% cash/2.25% PIK
 
08/2021
 
1,137

 
1,127

 
0.2

 
1,129

Host Analytics, Inc.(4)
One stop
 
N/A
 
N/A(5)
 
02/2020
 

 
(4
)
 

 
(2
)
III US Holdings, LLC#
One stop
 
L + 6.00%
 
7.00%
 
09/2022
 
5,465

 
5,356

 
0.9

 
5,356

III US Holdings, LLC(4)
One stop
 
L + 6.00%
 
N/A(5)
 
09/2022
 

 
(1
)
 

 
(1
)
Integration Appliance, Inc.
One stop
 
L + 8.25%
 
9.50%
 
09/2020
 
1,550

 
1,537

 
0.3

 
1,550

Jensen Hughes, Inc.#
Senior loan
 
L + 5.00%
 
6.00%
 
12/2021
 
134

 
133

 

 
134

Netsmart Technologies, Inc.#
Senior loan
 
L + 4.75%
 
5.75%
 
04/2023
 
1,649

 
1,634

 
0.3

 
1,659

Netsmart Technologies, Inc.(4)
Senior loan
 
L + 4.75%
 
N/A(5)
 
04/2023
 

 
(9
)
 

 

Project Alpha Intermediate Holding, Inc.#
One stop
 
L + 8.25%
 
9.25%
 
08/2022
 
16,508

 
16,022

 
2.6

 
16,178

PT Intermediate Holdings III, LLC*#
One stop
 
L + 6.50%
 
7.50%
 
06/2022
 
23,508

 
23,171

 
3.8

 
23,508

PT Intermediate Holdings III, LLC
One stop
 
P + 5.50%
 
9.00%
 
06/2022
 
25

 
21

 

 
25

Quickbase, Inc.#
One stop
 
L + 7.50%
 
8.50%
 
04/2022
 
11,468

 
11,257

 
1.9

 
11,468

Quickbase, Inc.(4)
One stop
 
L + 7.50%
 
N/A(5)
 
04/2022
 

 
(2
)
 

 

Secure-24, LLC*
One stop
 
L + 6.00%
 
7.25%
 
08/2017
 
809

 
809

 
0.1

 
809

Secure-24, LLC*
One stop
 
L + 6.00%
 
7.25%
 
08/2017
 
118

 
118

 

 
118

Secure-24, LLC
One stop
 
L + 6.00%
 
N/A(5)
 
08/2017
 

 

 

 

Severin Acquisition, LLC*
Senior loan
 
L + 5.38%
 
6.38%
 
07/2021
 
1,441

 
1,429

 
0.2

 
1,462

Severin Acquisition, LLC*
Senior loan
 
L + 5.00%
 
6.00%
 
07/2021
 
1,284

 
1,273

 
0.2

 
1,284

Severin Acquisition, LLC#
Senior loan
 
L + 5.38%
 
6.38%
 
07/2021
 
981

 
972

 
0.2

 
995

Severin Acquisition, LLC*
Senior loan
 
L + 4.88%
 
5.88%
 
07/2021
 
317

 
313

 
0.1

 
315

Steelwedge Software, Inc.
One stop
 
L + 10.00%
 
9.00% cash/2.00% PIK
 
09/2020
 
1,767

 
1,696

 
0.3

 
1,767



22

Golub Capital Investment Corporation and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2016
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal/Par
Amount(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Diversified Conglomerate Service - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Steelwedge Software, Inc.
One stop
 
L + 8.00%
 
N/A(5)
 
09/2020
 
$

 
$

 

%
$

TA MHI Buyer, Inc.*
One stop
 
L + 6.50%
 
7.50%
 
09/2021
 
6,622

 
6,573

 
1.1

 
6,622

TA MHI Buyer, Inc.#
One stop
 
L + 6.50%
 
7.50%
 
09/2021
 
1,032

 
1,022

 
0.2

 
1,032

TA MHI Buyer, Inc.#
One stop
 
L + 6.50%
 
7.50%
 
09/2021
 
536

 
531

 
0.1

 
536

TA MHI Buyer, Inc.#
One stop
 
L + 6.50%
 
7.50%
 
09/2021
 
191

 
190

 

 
191

TA MHI Buyer, Inc.
One stop
 
L + 6.50%
 
N/A(5)
 
09/2021
 

 

 

 

Trintech, Inc. *
One stop
 
L + 6.00%
 
7.00%
 
10/2021
 
8,820

 
8,724

 
1.4

 
8,820

Trintech, Inc.(4)
One stop
 
L + 6.00%
 
N/A(5)
 
10/2021
 

 
(1
)
 

 

Vendavo, Inc.
One stop
 
L + 8.50%
 
9.50%
 
10/2019
 
4,331

 
4,295

 
0.7

 
4,257

Vendavo, Inc.(4)
One stop
 
L + 8.50%
 
N/A(5)
 
10/2019
 

 
(2
)
 

 
(6
)
Vendor Credentialing Service LLC*#
One stop
 
L + 6.00%
 
7.00%
 
11/2021
 
11,342

 
11,191

 
1.8

 
11,342

Vendor Credentialing Service LLC(4)
One stop
 
L + 6.00%
 
N/A(5)
 
11/2021
 

 
(1
)
 

 

Vitalyst, LLC#
Senior loan
 
L + 5.25%
 
6.50%
 
09/2017
 
95

 
95

 

 
95

Vitalyst, LLC
Senior loan
 
L + 4.25%
 
N/A(5)
 
09/2017
 

 

 

 

Workforce Software, LLC
One stop
 
L + 10.50%
 
4.50% cash/7.00% PIK
 
06/2021
 
21,601

 
21,452

 
3.5

 
21,439

Workforce Software, LLC
One stop
 
L + 3.50%
 
N/A(5)
 
06/2021
 

 

 

 

Xmatters, Inc. and Alarmpoint, Inc.
One stop
 
L + 8.50%
 
9.50%
 
08/2021
 
4,428

 
4,365

 
0.7

 
4,395

Xmatters, Inc. and Alarmpoint, Inc.
One stop
 
L + 8.50%
 
N/A(5)
 
08/2021
 

 

 

 

  
 
 
 
 
 
 
 
 
211,094

 
207,989

 
34.1

 
210,147

Ecological
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pace Analytical Services, LLC*#
One stop
 
L + 6.25%
 
7.25%
 
09/2022
 
15,374

 
15,105

 
2.5

 
15,220

Pace Analytical Services, LLC(4)
One stop
 
L + 6.25%
 
N/A(5)
 
09/2022
 

 
(2
)
 

 
(1
)
Pace Analytical Services, LLC(4)
One stop
 
L + 6.25%
 
N/A(5)
 
09/2022
 

 
(6
)
 

 
(3
)
 
 
 
 
 
 
 
 
 
15,374

 
15,097

 
2.5

 
15,216

Electronics
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Appriss Holdings, Inc.*#
Senior loan
 
L + 5.25%
 
6.25%
 
11/2020
 
10,322

 
10,225

 
1.7

 
10,322

Appriss Holdings, Inc.
Senior loan
 
L + 5.25%
 
6.25%
 
11/2020
 
379

 
369

 
0.1

 
379

Compusearch Software Holdings, Inc.*
Senior loan
 
L + 4.25%
 
5.25%
 
05/2021
 
631

 
630

 
0.1

 
631

Diligent Corporation*#
One stop
 
L + 6.75%
 
7.75%
 
04/2022
 
32,020

 
31,354

 
5.2

 
32,020

Diligent Corporation(4)
One stop
 
L + 6.75%
 
N/A(5)
 
04/2022
 

 
(2
)
 

 

ECI Acquisition Holdings, Inc.*
One stop
 
L + 6.25%
 
7.25%
 
03/2019
 
7,148

 
7,148

 
1.2

 
7,148

ECI Acquisition Holdings, Inc.#
One stop
 
L + 6.25%
 
7.25%
 
03/2019
 
463

 
463

 
0.1

 
463

ECI Acquisition Holdings, Inc.
One stop
 
L + 6.25%
 
N/A(5)
 
03/2019
 

 

 

 

Gamma Technologies, LLC*#
One stop
 
L + 5.00%
 
6.00%
 
06/2021
 
9,443

 
9,369

 
1.5

 
9,443

Gamma Technologies, LLC(4)
One stop
 
L + 5.00%
 
N/A(5)
 
06/2021
 

 
(1
)
 

 

Park Place Technologies LLC*#
One stop
 
L + 5.25%
 
6.25%
 
06/2022
 
10,720

 
10,580

 
1.7

 
10,720

Park Place Technologies LLC
One stop
 
L + 5.25%
 
6.25%
 
06/2022
 
100

 
98

 

 
100

Sloan Company, Inc., The#
One stop
 
L + 7.25%
 
8.25%
 
04/2020
 
3,626

 
3,577

 
0.6

 
3,445

Sloan Company, Inc., The
One stop
 
L + 7.25%
 
8.25%
 
04/2020
 
6

 
5

 

 
4

Sovos Compliance Formerly Taxware, LLC*#
One stop
 
L + 7.25%
 
8.25%
 
03/2022
 
32,750

 
32,154

 
5.2

 
32,095

Sovos Compliance Formerly Taxware, LLC(4)
One stop
 
L + 7.25%
 
N/A(5)
 
03/2022
 

 
(1
)
 

 
(1
)
Sparta Holding Corporation*
One stop
 
L + 5.50%
 
6.50%
 
07/2020
 
695

 
695

 
0.1

 
695

Sparta Holding Corporation
One stop
 
L + 5.50%
 
N/A(5)
 
07/2020
 

 

 

 

Syncsort Incorporated*#
One stop
 
L + 5.50%
 
6.50%
 
11/2021
 
14,253

 
14,009

 
2.3

 
14,253

Syncsort Incorporated(4)
One stop
 
L + 5.50%
 
N/A(5)
 
11/2021
 

 
(2
)
 

 

 
 
 
 
 
 
 
 
 
122,556

 
120,670

 
19.8

 
121,717

Grocery
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Teasdale Quality Foods, Inc.#
Senior loan
 
L + 4.75%
 
5.77%
 
10/2020
 
175

 
172

 

 
177

Teasdale Quality Foods, Inc.*
Senior loan
 
L + 4.75%
 
5.77%
 
10/2020
 
131

 
130

 

 
133

 
 
 
 
 
 
 
 
 
306

 
302

 

 
310



23

Golub Capital Investment Corporation and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2016
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal/Par
Amount(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Healthcare, Education and Childcare
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Active Day, Inc.*#
One stop
 
L + 6.00%
 
7.00%
 
12/2021
 
$
11,642

 
$
11,466

 
1.9

%
$
11,642

Active Day, Inc.(4)
One stop
 
L + 6.00%
 
N/A(5)
 
12/2021
 

 
(2
)
 

 

Active Day, Inc.(4)
One stop
 
L + 6.00%
 
N/A(5)
 
12/2021
 

 
(32
)
 

 

ADCS Clinics Intermediate Holdings, LLC#
One stop
 
L + 5.75%
 
6.75%
 
05/2022
 
22,127

 
21,711

 
3.6

 
22,127

ADCS Clinics Intermediate Holdings, LLC
One stop
 
L + 5.75%
 
6.75%
 
05/2022
 
109

 
108

 

 
109

ADCS Clinics Intermediate Holdings, LLC
One stop
 
L + 5.75%
 
6.75%
 
05/2022
 
32

 
32

 

 
32

ADCS Clinics Intermediate Holdings, LLC
One stop
 
P + 4.75%
 
8.25%
 
05/2022
 
28

 
26

 

 
28

ADCS Clinics Intermediate Holdings, LLC(4)
One stop
 
L + 5.75%
 
N/A(5)
 
05/2022
 

 
(5
)
 

 

Advanced Pain Management Holdings, Inc.#
Senior loan
 
L + 5.00%
 
6.25%
 
02/2018
 
5,800

 
5,797

 
0.9

 
5,626

Advanced Pain Management Holdings, Inc.#
Senior loan
 
L + 5.00%
 
6.25%
 
02/2018
 
397

 
396

 
0.1

 
385

Advanced Pain Management Holdings, Inc.(4)
Senior loan
 
L + 5.00%
 
N/A(5)
 
02/2018
 

 

 

 
(30
)
Agilitas USA, Inc.*
Senior loan
 
L + 4.00%
 
5.00%
 
10/2020
 
512

 
508

 
0.1

 
491

Apothecary Products, LLC*
Senior loan
 
L + 4.00%
 
5.00%
 
02/2019
 
1,857

 
1,857

 
0.3

 
1,857

Apothecary Products, LLC
Senior loan
 
L + 4.00%
 
5.04%
 
02/2019
 
472

 
472

 
0.1

 
472

Aris Teleradiology Company, LLC*
Senior loan
 
L + 4.75%
 
5.75%
 
03/2021
 
872

 
865

 
0.1

 
872

Aris Teleradiology Company, LLC
Senior loan
 
L + 4.75%
 
N/A(5)
 
03/2021
 

 

 

 

Avalign Technologies, Inc.*
Senior loan
 
L + 4.50%
 
5.50%
 
07/2021
 
756

 
753

 
0.1

 
756

BIORECLAMATIONIVT, LLC*#
One stop
 
L + 6.25%
 
7.25%
 
01/2021
 
12,728

 
12,538

 
2.1

 
12,728

BIORECLAMATIONIVT, LLC (4)
One stop
 
L + 6.25%
 
N/A(5)
 
01/2021
 

 
(1
)
 

 

California Cryobank, LLC*
One stop
 
L + 5.50%
 
6.50%
 
08/2019
 
2,667

 
2,667

 
0.4

 
2,667

California Cryobank, LLC
One stop
 
L + 5.50%
 
6.50%
 
08/2019
 
403

 
403

 
0.1

 
403

California Cryobank, LLC
One stop
 
L + 5.50%
 
N/A(5)
 
08/2019
 

 

 

 

Certara L.P.*
One stop
 
L + 6.25%
 
7.25%
 
12/2018
 
3,718

 
3,714

 
0.6

 
3,718

Certara L.P.
One stop
 
L + 6.25%
 
N/A(5)
 
12/2018
 

 

 

 

CLP Healthcare Services, Inc.*
Senior loan
 
L + 5.25%
 
6.25%
 
12/2020
 
946

 
937

 
0.2

 
946

CPI Buyer, LLC*
Senior loan
 
L + 4.50%
 
5.50%
 
08/2021
 
3,193

 
3,157

 
0.5

 
3,177

DCA Investment Holding, LLC*#
One stop
 
L + 5.25%
 
6.25%
 
07/2021
 
14,750

 
14,594

 
2.4

 
14,750

DCA Investment Holding, LLC*#
One stop
 
L + 5.25%
 
6.25%
 
07/2021
 
13,764

 
13,572

 
2.2

 
13,764

DCA Investment Holding, LLC
One stop
 
P + 4.25%
 
7.75%
 
07/2021
 
1,442

 
1,426

 
0.2

 
1,442

Deca Dental Management LLC
One stop
 
L + 6.25%
 
7.25%
 
07/2020
 
7,596

 
7,509

 
1.2

 
7,596

Deca Dental Management LLC
One stop
 
L + 6.25%
 
7.25%
 
07/2020
 
924

 
908

 
0.1

 
924

Deca Dental Management LLC
One stop
 
L + 6.25%
 
7.25%
 
07/2020
 
50

 
49

 

 
50

Dental Holdings Corporation*
One stop
 
L + 5.50%
 
6.50%
 
02/2020
 
3,386

 
3,357

 
0.5

 
3,386

Dental Holdings Corporation
One stop
 
L + 5.50%
 
6.50%
 
02/2020
 
515

 
509

 
0.1

 
515

Dental Holdings Corporation
One stop
 
P + 4.25%
 
7.75%
 
02/2020
 
95

 
91

 

 
95

eSolutions, Inc.*#
One stop
 
L + 6.50%
 
7.50%
 
03/2022
 
11,928

 
11,792

 
1.9

 
11,928

eSolutions, Inc.(4)
One stop
 
L + 6.50%
 
N/A(5)
 
03/2022
 

 
(1
)
 

 

Katena Holdings, Inc.*
One stop
 
L + 6.25%
 
7.25%
 
06/2021
 
4,567

 
4,529

 
0.7

 
4,567

Katena Holdings, Inc.
One stop
 
P + 5.25%
 
8.75%
 
06/2021
 
446

 
442

 
0.1

 
446

Katena Holdings, Inc.
One stop
 
P + 5.25%
 
8.75%
 
06/2021
 
13

 
12

 

 
13

Lombart Brothers, Inc.#
One stop
 
L + 6.75%
 
7.75%
 
04/2022
 
3,263

 
3,207

 
0.5

 
3,263

Lombart Brothers, Inc.
One stop
 
L + 6.75%
 
7.75%
 
04/2022
 
8

 
7

 

 
8

Maverick Healthcare Group, LLC#
Senior loan
 
L + 7.50%
 
7.25% cash/2.00% PIK
 
04/2017
 
631

 
628

 
0.1

 
631

Oliver Street Dermatology Holdings, LLC*#
One stop
 
L + 6.50%
 
7.50%
 
05/2022
 
8,030

 
7,886

 
1.3

 
8,030

Oliver Street Dermatology Holdings, LLC
One stop
 
L + 6.50%
 
7.50%
 
05/2022
 
58

 
57

 
0.1

 
58

Oliver Street Dermatology Holdings, LLC(4)
One stop
 
L + 6.50%
 
N/A(5)
 
05/2022
 

 
(3
)
 

 

Pinnacle Treatment Centers, Inc.#
One stop
 
L + 6.25%
 
7.25%
 
08/2021
 
9,846

 
9,679

 
1.6

 
9,748

Pinnacle Treatment Centers, Inc.
One stop
 
P + 5.00%
 
8.50%
 
08/2021
 
5

 
3

 

 
4

Pinnacle Treatment Centers, Inc.(4)
One stop
 
L + 6.25%
 
N/A(5)
 
08/2021
 

 
(3
)
 

 
(1
)
PPT Management, LLC*
One stop
 
L + 5.00%
 
6.00%
 
04/2020
 
2,036

 
2,018

 
0.3

 
2,036

PPT Management, LLC
One stop
 
L + 5.00%
 
6.00%
 
04/2020
 
137

 
136

 

 
137



24

Golub Capital Investment Corporation and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2016
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal/Par
Amount(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Healthcare, Education and Childcare - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PPT Management, LLC(4)
One stop
 
L + 5.00%
 
N/A(5)
 
04/2020
 
$

 
$
(1
)
 

%
$

Premise Health Holding Corp.*
One stop
 
L + 4.50%
 
5.50%
 
06/2020
 
2,007

 
2,007

 
0.3

 
2,007

Premise Health Holding Corp.
One stop
 
L + 4.50%
 
N/A(5)
 
06/2020
 

 

 

 

Pyramid Healthcare, Inc.*
One stop
 
L + 5.75%
 
6.75%
 
08/2019
 
358

 
354

 
0.1

 
358

Radiology Partners, Inc.#
One stop
 
L + 5.50%
 
6.50%
 
09/2020
 
4,443

 
4,400

 
0.7

 
4,399

Reliant Pro ReHab, LLC*
Senior loan
 
L + 5.00%
 
6.00%
 
12/2017
 
1,178

 
1,175

 
0.2

 
1,178

Reliant Pro ReHab, LLC
Senior loan
 
P + 4.00%
 
7.50%
 
12/2017
 
14

 
13

 

 
14

RXH Buyer Corporation#
One stop
 
L + 5.75%
 
6.75%
 
09/2021
 
11,248

 
11,063

 
1.8

 
10,798

RXH Buyer Corporation
One stop
 
L + 5.75%
 
6.75%
 
09/2021
 
1,273

 
1,262

 
0.2

 
1,222

RXH Buyer Corporation
One stop
 
P + 4.75%
 
8.25%
 
09/2021
 
35

 
32

 

 
27

RXH Buyer Corporation(4)
One stop
 
L + 5.75%
 
N/A(5)
 
09/2021
 

 
(19
)
 

 
(22
)
Southern Anesthesia and Surgical*
One stop
 
L + 5.50%
 
6.50%
 
11/2017
 
239

 
239

 

 
239

Southern Anesthesia and Surgical#
One stop
 
L + 5.50%
 
6.50%
 
11/2017
 
117

 
117

 

 
117

Southern Anesthesia and Surgical
One stop
 
L + 5.50%
 
N/A(5)
 
11/2017
 

 

 

 

Spear Education, LLC*
One stop
 
L + 6.00%
 
7.00%
 
08/2019
 
3,570

 
3,553

 
0.6

 
3,570

Spear Education, LLC
One stop
 
L + 6.00%
 
7.00%
 
08/2019
 
183

 
182

 

 
183

Spear Education, LLC(4)
One stop
 
L + 6.00%
 
N/A(5)
 
08/2019
 

 
(1
)
 

 

Summit Behavioral Holdings I, LLC*
One stop
 
L + 5.00%
 
6.00%
 
06/2021
 
4,179

 
4,129

 
0.7

 
4,179

Summit Behavioral Holdings I, LLC(4)
One stop
 
L + 5.00%
 
N/A(5)
 
06/2021
 

 
(1
)
 

 

Summit Behavioral Holdings I, LLC(4)
One stop
 
L + 5.00%
 
N/A(5)
 
06/2021
 

 
(2
)
 

 

Surgical Information Systems, LLC*
Senior loan
 
L + 3.00%
 
4.50%
 
09/2018
 
176

 
176

 

 
176

U.S. Anesthesia Partners, Inc.*
One stop
 
L + 5.00%
 
6.12%
 
12/2019
 
3,780

 
3,780

 
0.6

 
3,780

WIRB-Copernicus Group, Inc.#
Senior loan
 
L + 5.00%
 
6.00%
 
08/2022
 
9,482

 
9,389

 
1.5

 
9,387

WIRB-Copernicus Group, Inc.(4)
Senior loan
 
L + 5.00%
 
N/A(5)
 
08/2022
 

 
(1
)
 
 
 
(1
)
Young Innovations, Inc.*
Senior loan
 
L + 4.75%
 
5.75%
 
01/2019
 
19

 
19

 

 
20

 
 
 
 
 
 
 
 
 
194,050

 
191,636

 
31.1

 
193,027

Home and Office Furnishings, Housewares, and Durable Consumer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Plano Molding Company, LLC#
One stop
 
L + 6.50%
 
7.50%
 
05/2021
 
8,655

 
8,589

 
1.3

 
7,963

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Hotels, Motels, Inns, and Gaming
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Aimbridge Hospitality, LLC*
Senior loan
 
L + 4.50%
 
5.75%
 
10/2018
 
394

 
388

 
0.1

 
394

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Insurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Captive Resources Midco, LLC*#
One stop
 
L + 5.75%
 
6.75%
 
06/2020
 
8,128

 
8,051

 
1.3

 
8,128

Captive Resources Midco, LLC(4)
One stop
 
L + 5.75%
 
N/A(5)
 
06/2020
 

 
(3
)
 

 

Captive Resources Midco, LLC(4)
One stop
 
L + 5.75%
 
N/A(5)
 
06/2020
 

 
(9
)
 

 

Higginbotham Insurance Agency, Inc.*
Senior loan
 
L + 5.25%
 
6.25%
 
11/2021
 
1,119

 
1,109

 
0.2

 
1,120

Internet Pipeline, Inc.*#
One stop
 
L + 7.25%
 
8.25%
 
08/2022
 
10,461

 
10,310

 
1.7

 
10,461

Internet Pipeline, Inc.(4)
One stop
 
L + 7.25%
 
N/A(5)
 
08/2021
 

 
(1
)
 

 

RSC Acquisition, Inc.*
Senior loan
 
L + 5.25%
 
6.25%
 
11/2022
 
542

 
537

 
0.1

 
542

  
 
 
 
 
 
 
 
 
20,250

 
19,994

 
3.3

 
20,251

Leisure, Amusement, Motion Pictures and Entertainment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Competitor Group, Inc.#
One stop
 
L + 9.25%
 
5.00% cash/5.50% PIK
 
11/2018
 
430

 
391

 
0.1

 
398

Competitor Group, Inc.
One stop
 
L + 9.25%
 
5.00% cash/5.50% PIK
 
11/2018
 
50

 
47

 

 
46

Competitor Group, Inc.
One stop
 
L + 9.25%
 
5.00% cash/5.50% PIK
 
11/2018
 
6

 
6

 

 
6

NFD Operating, LLC*
One stop
 
L + 7.00%
 
8.25%
 
06/2021
 
2,192

 
2,160

 
0.4

 
2,192

NFD Operating, LLC
One stop
 
L + 7.00%
 
N/A(5)
 
06/2021
 

 

 

 

NFD Operating, LLC(4)
One stop
 
L + 7.00%
 
N/A(5)
 
06/2021
 

 
(1
)
 

 

Teaching Company, The*#
One stop
 
L + 6.25%
 
7.25%
 
08/2020
 
12,209

 
12,138

 
2.0

 
12,209



25

Golub Capital Investment Corporation and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2016
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal/Par
Amount(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Leisure, Amusement, Motion Pictures and Entertainment - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Teaching Company, The
One stop
 
L + 6.25%
 
7.25%
 
08/2020
 
$
40

 
$
39

 

%
$
40

Titan Fitness, LLC*
One stop
 
L + 6.50%
 
7.75%
 
09/2019
 
1,974

 
1,974

 
0.3

 
1,974

Titan Fitness, LLC
One stop
 
L + 6.50%
 
7.75%
 
09/2019
 
261

 
261

 

 
261

Titan Fitness, LLC
One stop
 
L + 6.50%
 
7.75%
 
09/2019
 
87

 
82

 

 
87

Titan Fitness, LLC
One stop
 
P + 5.25%
 
8.75%
 
09/2019
 
63

 
63

 

 
63

 
 
 
 
 
 
 
 
 
17,312

 
17,160

 
2.8

 
17,276

Mining, Steel, Iron and Non-Precious Metals
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benetech, Inc.#
One stop
 
L + 9.00%
 
10.25%
 
10/2017
 
192

 
192

 

 
169

Benetech, Inc.
One stop
 
P + 7.75%
 
11.25%
 
10/2017
 
7

 
7

 

 
1

 
 
 
 
 
 
 
 
 
199

 
199

 

 
170

Oil and Gas
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Drilling Info, Inc.*
One stop
 
L + 6.46%
 
7.46%
 
06/2020
 
3,960

 
3,909

 
0.6

 
3,920

Drilling Info, Inc.
One stop
 
L + 6.55%
 
7.55%
 
06/2020
 
963

 
946

 
0.2

 
953

 
 
 
 
 
 
 
 
 
4,923

 
4,855

 
0.8

 
4,873

Personal and Non-Durable Consumer Products
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Georgica Pine Clothiers, LLC*
One stop
 
L + 5.50%
 
6.50%
 
11/2021
 
4,922

 
4,880

 
0.7

 
4,922

Georgica Pine Clothiers, LLC#
One stop
 
L + 5.50%
 
6.50%
 
11/2021
 
430

 
426

 
0.1

 
430

Georgica Pine Clothiers, LLC(4)
One stop
 
L + 5.50%
 
N/A(5)
 
11/2021
 

 
(1
)
 

 

Massage Envy, LLC*
One stop
 
L + 7.25%
 
8.50%
 
09/2018
 
986

 
986

 
0.2

 
986

Massage Envy, LLC
One stop
 
L + 7.25%
 
N/A(5)
 
09/2018
 

 

 

 

Orthotics Holdings, Inc#
One stop
 
L + 5.00%
 
6.00%
 
02/2020
 
3,732

 
3,700

 
0.6

 
3,545

Orthotics Holdings, Inc#(7)
One stop
 
L + 5.00%
 
6.00%
 
02/2020
 
612

 
607

 
0.1

 
581

Orthotics Holdings, Inc
One stop
 
L + 5.00%
 
6.00%
 
02/2020
 
62

 
57

 

 
34

Orthotics Holdings, Inc(4)(7)
One stop
 
L + 5.00%
 
N/A(5)
 
02/2020
 

 
(1
)
 

 
(3
)
Orthotics Holdings, Inc(4)
One stop
 
L + 5.00%
 
N/A(5)
 
02/2020
 

 
(5
)
 

 
(31
)
Team Technologies Acquisition Company*
Senior loan
 
L + 5.00%
 
6.25%
 
12/2017
 
283

 
283

 

 
280

Team Technologies Acquisition Company#
Senior loan
 
L + 5.50%
 
6.75%
 
12/2017
 
52

 
52

 

 
52

Team Technologies Acquisition Company
Senior loan
 
L + 5.00%
 
N/A(5)
 
12/2017
 
$

 
$

 

 
$

 
 
 
 
 
 
 
 
 
11,079

 
10,984

 
1.7

 
10,796

Personal, Food and Miscellaneous Services
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Clarkson Eyecare LLC*#
One stop
 
L + 6.25%
 
7.25%
 
04/2021
 
17,365

 
17,120

 
2.8

 
17,191

Clarkson Eyecare LLC
One stop
 
L + 6.25%
 
7.25%
 
04/2021
 
8,486

 
8,342

 
1.4

 
8,392

Clarkson Eyecare LLC
One stop
 
L + 6.25%
 
7.25%
 
04/2021
 
2,986

 
2,958

 
0.5

 
2,956

Clarkson Eyecare LLC
One stop
 
L + 6.25%
 
7.25%
 
04/2021
 
2,543

 
2,520

 
0.4

 
2,517

Clarkson Eyecare LLC
One stop
 
L + 6.25%
 
7.25%
 
04/2021
 
670

 
670

 
0.1

 
663

Clarkson Eyecare LLC
One stop
 
L + 6.25%
 
7.25%
 
04/2021
 
494

 
483

 
0.1

 
489

Clarkson Eyecare LLC
One stop
 
P + 5.25%
 
8.08%
 
04/2021
 
467

 
462

 
0.1

 
462

Community Veterinary Partners, LLC
One stop
 
L + 5.50%
 
6.50%
 
10/2021
 
17

 
16

 

 
16

Ignite Restaurant Group, Inc.*
One stop
 
L + 7.00%
 
8.00%
 
02/2019
 
1,041

 
1,041

 
0.2

 
1,020

PetVet Care Centers LLC
Senior loan
 
L + 4.75%
 
5.75%
 
12/2020
 
2,418

 
2,397

 
0.4

 
2,418

PetVet Care Centers LLC
Senior loan
 
L + 4.75%
 
5.75%
 
12/2020
 
1,818

 
1,788

 
0.3

 
1,818

PetVet Care Centers LLC(4)
Senior loan
 
L + 4.75%
 
N/A(5)
 
12/2020
 

 
(14
)
 

 

R.G. Barry Corporation#
Senior loan
 
L + 5.00%
 
6.00%
 
09/2019
 
1,416

 
1,416

 
0.2

 
1,402

Vetcor Professional Practices LLC*#
One stop
 
L + 6.25%
 
7.25%
 
04/2021
 
27,554

 
27,053

 
4.5

 
27,554

Vetcor Professional Practices LLC #
One stop
 
L + 6.25%
 
7.25%
 
04/2021
 
634

 
628

 
0.1

 
634

Vetcor Professional Practices LLC
One stop
 
L + 6.25%
 
7.25%
 
04/2021
 
361

 
329

 
0.1

 
361

Vetcor Professional Practices LLC*
One stop
 
L + 6.25%
 
7.25%
 
04/2021
 
189

 
187

 

 
189

Vetcor Professional Practices LLC
One stop
 
L + 6.25%
 
7.25%
 
04/2021
 
155

 
153

 

 
155

Vetcor Professional Practices LLC(4)
One stop
 
L + 6.25%
 
N/A(5)
 
04/2021
 

 
(5
)
 

 



26

Golub Capital Investment Corporation and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2016
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal/Par
Amount(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Personal, Food and Miscellaneous Services - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vetcor Professional Practices LLC(4)
One stop
 
L + 6.25%
 
N/A(5)
 
04/2021
 
$

 
$
(45
)
 

%
$

Veterinary Specialists of North America, LLC#
One stop
 
L + 5.25%
 
6.25%
 
07/2021
 
3,170

 
3,130

 
0.5

 
3,138

Veterinary Specialists of North America, LLC
One stop
 
L + 5.25%
 
6.25%
 
07/2021
 
33

 
33

 

 
33

Veterinary Specialists of North America, LLC(4)
One stop
 
L + 5.25%
 
N/A(5)
 
07/2021
 

 
(2
)
 

 
(2
)
Veterinary Specialists of North America, LLC(4)
One stop
 
L + 5.25%
 
N/A(5)
 
07/2021
 

 
(9
)
 

 
(7
)
Wetzel's Pretzels, LLC*
One stop
 
L + 6.75%
 
7.75%
 
09/2021
 
6,563

 
6,450

 
1.1

 
6,497

Wetzel's Pretzels, LLC(4)
One stop
 
L + 6.75%
 
N/A(5)
 
09/2021
 

 
(1
)
 

 

  
 
 
 
 
 
 
 
 
78,380

 
77,100

 
12.8

 
77,896

Printing and Publishing
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brandmuscle, Inc.#
Senior loan
 
L + 5.00%
 
6.00%
 
12/2021
 
543

 
538

 
0.1

 
548

Market Track, LLC*#
One stop
 
L + 7.00%
 
8.00%
 
10/2019
 
19,620

 
19,403

 
3.2

 
19,620

Market Track, LLC#
One stop
 
L + 7.00%
 
8.00%
 
10/2019
 
4,983

 
4,965

 
0.8

 
4,983

Market Track, LLC#
One stop
 
L + 7.00%
 
8.00%
 
10/2019
 
2,262

 
2,232

 
0.4

 
2,262

Market Track, LLC
One stop
 
L + 7.00%
 
8.00%
 
10/2019
 
1,180

 
1,162

 
0.2

 
1,180

Market Track, LLC*
One stop
 
L + 7.00%
 
8.00%
 
10/2019
 
379

 
378

 
0.1

 
379

Market Track, LLC#
One stop
 
L + 7.00%
 
8.00%
 
10/2019
 
373

 
370

 
0.1

 
373

Market Track, LLC*
One stop
 
L + 7.00%
 
8.00%
 
10/2019
 
224

 
223

 

 
224

Marketo, Inc.
One stop
 
L + 9.50%
 
10.50%
 
08/2021
 
20,640

 
20,036

 
3.3

 
20,330

Marketo, Inc.(4)
One stop
 
L + 9.50%
 
N/A(5)
 
08/2021
 

 
(2
)
 

 
(1
)
 
 
 
 
 
 
 
 
 
50,204

 
49,305

 
8.2

 
49,898

Retail Stores
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Batteries Plus Holding Corporation*#
One stop
 
L + 6.75%
 
7.75%
 
07/2022
 
13,218

 
13,016

 
2.1

 
13,152

Batteries Plus Holding Corporation(4)
One stop
 
L + 6.75%
 
N/A(5)
 
07/2022
 

 
(2
)
 
(0.1
)
 
(1
)
CVS Holdings I, LP*#
One stop
 
L + 6.25%
 
7.25%
 
08/2021
 
17,313

 
17,048

 
2.8

 
17,055

CVS Holdings I, LP#
One stop
 
L + 6.25%
 
7.25%
 
08/2021
 
250

 
245

 

 
246

CVS Holdings I, LP(4)
One stop
 
L + 6.25%
 
N/A(5)
 
08/2020
 

 
(3
)
 

 
(3
)
CVS Holdings I, LP(4)
One stop
 
L + 6.25%
 
N/A(5)
 
08/2021
 

 
(8
)
 

 
(6
)
Cycle Gear, Inc.*
One stop
 
L + 6.50%
 
7.50%
 
01/2020
 
7,648

 
7,561

 
1.2

 
7,648

Cycle Gear, Inc.(4)
One stop
 
L + 6.50%
 
N/A(5)
 
01/2020
 

 
(10
)
 

 

Cycle Gear, Inc.(4)
One stop
 
L + 6.50%
 
N/A(5)
 
01/2020
 

 
(10
)
 

 

DTLR, Inc.*#
One stop
 
L + 6.50%
 
7.50%
 
10/2020
 
9,778

 
9,700

 
1.6

 
9,778

Elite Sportswear, L.P.#
Senior loan
 
L + 5.00%
 
6.00%
 
03/2020
 
1,257

 
1,248

 
0.2

 
1,254

Elite Sportswear, L.P.#
Senior loan
 
L + 5.25%
 
6.25%
 
03/2020
 
647

 
641

 
0.1

 
650

Elite Sportswear, L.P.#
Senior loan
 
L + 5.25%
 
6.25%
 
03/2020
 
98

 
97

 
0.1

 
99

Elite Sportswear, L.P.
Senior loan
 
P + 3.75%
 
7.25%
 
03/2020
 
52

 
50

 

 
52

Express Oil Change, LLC
Senior loan
 
L + 5.00%
 
6.01%
 
12/2017
 
78

 
77

 

 
78

Feeders Supply Company, LLC#
One stop
 
L + 5.75%
 
6.75%
 
04/2021
 
4,000

 
3,954

 
0.6

 
4,000

Feeders Supply Company, LLC
Subordinated debt
 
N/A
 
12.50% cash/7.00% PIK
 
04/2021
 
40

 
40

 

 
40

Feeders Supply Company, LLC(4)
One stop
 
L + 5.75%
 
N/A(5)
 
04/2021
 

 
(1
)
 

 

Marshall Retail Group, LLC, The#
One stop
 
L + 6.00%
 
7.00%
08/2020
 
3,198

 
3,198

 
0.5

 
3,006

Marshall Retail Group, LLC, The
One stop
 
L + 6.00%
 
7.00%
 
08/2019
 
107

 
107

 

 
73

Mills Fleet Farm Group LLC*#
One stop
 
L + 5.50%
 
6.50%
 
02/2022
 
30,662

 
29,796

 
5.0

 
30,662

Pet Holdings ULC#(7)(8)
One stop
 
L + 5.50%
 
6.50%
 
07/2022
 
32,675

 
32,048

 
5.2

 
32,348

Pet Holdings ULC(7)(8)
One stop
 
P + 4.50%
 
8.00%
 
07/2022
 
38

 
35

 

 
36

Pet Holdings ULC(4)(7)(8)
One stop
 
L + 5.50%
 
N/A(5)
 
07/2022
 

 
(1
)
 

 
(1
)
Sneaker Villa, Inc.#
One stop
 
L + 7.75%
 
8.75%
 
12/2020
 
173

 
171

 

 
173

 
 
 
 
 
 
 
 
 
121,232

 
118,997

 
19.3

 
120,339

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


27

Golub Capital Investment Corporation and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2016
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal/Par
Amount(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Telecommunications
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Hosting.com Inc.*
Senior loan
 
L + 4.50%
 
5.75%
 
12/2017
 
$
595

 
$
595

 
0.1

%
$
595

Hosting.com Inc.
Senior loan
 
L + 4.50%
 
5.75%
 
12/2017
 
67

 
67

 

 
67

Wilcon Operations LLC*
One stop
 
L + 6.00%
 
7.00%
 
10/2018
 
2,718

 
2,705

 
0.4

 
2,718

Wilcon Operations LLC
One stop
 
L + 6.00%
 
7.00%
 
10/2018
 
1,004

 
1,004

 
0.2

 
1,004

Wilcon Operations LLC*
One stop
 
L + 6.00%
 
7.00%
 
10/2018
 
414

 
410

 
0.1

 
414

Wilcon Operations LLC
One stop
 
L + 6.00%
 
7.00%
 
10/2018
 
161

 
158

 

 
161

Wilcon Operations LLC(4)
One stop
 
L + 6.00%
 
N/A(5)
 
10/2018
 

 
(24
)
 

 

  
 
 
 
 
 
 
 
 
4,959

 
4,915

 
0.8

 
4,959

Textile and Leather
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

SHO Holding I Corporation*
Senior loan
 
L + 5.00%
 
6.00%
 
10/2022
 
1,770

 
1,730

 
0.3

 
1,770

SHO Holding I Corporation(4)
Senior loan
 
L + 4.00%
 
N/A(5)
 
10/2021
 

 
(1
)
 

 
(2
)
  
 
 
 
 
 
 
 
 
1,770

 
1,729

 
0.3

 
1,768

Utilities
  
 
  
 
  
 
  
 
  

 
  

 
  

 
  

Arcos, LLC*
One stop
 
L + 6.50%
 
7.50%
 
02/2021
 
3,722

 
3,689

 
0.6

 
3,722

Arcos, LLC
One stop
 
L + 6.50%
 
N/A(5)
 
02/2021
 

 

 

 

PowerPlan Holdings, Inc.*
Senior loan
 
L + 4.75%
 
5.75%
 
02/2022
 
850

 
835

 
0.1

 
850

  
 
 
 
 
 
 
 
 
4,572

 
4,524

 
0.7

 
4,572

Total non-controlled/non-affiliate company debt investments
 
 
 
 
 
$
1,015,694

 
$
1,001,054

 
163.3

%
$
1,007,683

 
  
 
  
 
  
 
  
 
 
 
  

 
  

 
 
Equity Investments (9)(10)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Automobile
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Polk Acquisition Corp.
LP interest
 
N/A
 
N/A
 
N/A
 

 
$
401

 
0.1

%
$
401

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beverage, Food and Tobacco
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Hopdoddy Holdings, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
17

 
84

 

 
32

Hopdoddy Holdings, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
8

 
24

 

 
9

Purfoods, LLC
LLC interest
 
N/A
 
N/A
 
N/A
 
355

 
355

 
0.1

 
355

 
 
 
 
 
 
 
 
 
 
 
463

 
0.1

 
396

Chemicals, Plastics and Rubber
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Flexan, LLC
Preferred stock
 
N/A
 
N/A
 
N/A
 

 
33

 

 
34

Flexan, LLC
Common stock
 
N/A
 
N/A
 
N/A
 

 

 

 

 
 
 
 
 
 
 
 
 
 
 
33

 

 
34

Diversified Conglomerate Manufacturing
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ICCN Acquisition Corp.
Preferred stock
 
N/A
 
N/A
 
N/A
 

 
259

 

 
96

ICCN Acquisition Corp.
Common stock
 
N/A
 
N/A
 
N/A
 

 

 

 

Reladyne, Inc.
LP interest
 
N/A
 
N/A
 
N/A
 

 
242

 

 
242

 
 
 
 
 
 
 
 
 
 
 
501

 

 
338

Diversified Conglomerate Service
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Actiance, Inc.
Warrant
 
N/A
 
N/A
 
N/A
 
194

 
46

 

 
48

Agility Recovery Solutions Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 
30

 
152

 

 
272

Bomgar Corporation
Common stock
 
N/A
 
N/A
 
N/A
 
1

 
620

 
0.1

 
620

Bomgar Corporation
Common stock
 
N/A
 
N/A
 
N/A
 
415

 
6

 

 
6

HealthcareSource HR, Inc.
LLC interest
 
N/A
 
N/A
 
N/A
 

 
165

 

 
153

Host Analytics, Inc.
Warrant
 
N/A
 
N/A
 
N/A
 
80

 

 

 
69

Project Alpha Intermediate Holding, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 

 
399

 
0.1

 
399

Project Alpha Intermediate Holding, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
99

 
4

 

 
4

Quickbase, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
615

 
615

 
0.1

 
642

Steelwedge Software, Inc.
Warrant
 
N/A
 
N/A
 
N/A
 
29,443

 
61

 

 
68

TA MHI Buyer, Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 

 
163

 

 
210

Workforce Software, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
1,309

 
1,309

 
0.2

 
1,309



28

Golub Capital Investment Corporation and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2016
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal/Par
Amount(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Diversified Conglomerate Service - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Xmatters, Inc. and Alarmpoint, Inc.
Warrant
 
N/A
 
N/A
 
N/A
 
39

 
$
31

 

%
$
31

 
 
 
 
 
 
 
 
 
 
 
3,571

 
0.5

 
3,831

Ecological
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pace Analytical Services, LLC
Common stock
 
N/A
 
N/A
 
N/A
 
3

 
274

 

 
274

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Electronics
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diligent Corporation
Preferred stock
 
N/A
 
N/A
 
N/A
 
535

 
535

 
0.1

 
535

Gamma Technologies, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
1

 
82

 

 
114

SEI, Inc.
LLC units
 
N/A
 
N/A
 
N/A
 
207

 
207

 
0.1

 
192

Sloan Company, Inc., The
LLC units
 
N/A
 
N/A
 
N/A
 

 
59

 

 
11

Sloan Company, Inc., The
LLC units
 
N/A
 
N/A
 
N/A
 
1

 
7

 

 

Syncsort Incorporated
Preferred stock
 
N/A
 
N/A
 
N/A
 
78

 
194

 
0.1

 
269

 
 
 
 
 
 
 
 
 
 
 
1,084

 
0.3

 
1,121

Healthcare, Education and Childcare
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Active Day, Inc.
LLC interest
 
N/A
 
N/A
 
N/A
 
1

 
529

 
0.1

 
608

ADCS Clinics Intermediate Holdings, LLC
Preferred stock
 
N/A
 
N/A
 
N/A
 
1

 
596

 
0.1

 
596

ADCS Clinics Intermediate Holdings, LLC
Common stock
 
N/A
 
N/A
 
N/A
 

 
6

 

 
6

BIORECLAMATIONIVT, LLC
LLC units
 
N/A
 
N/A
 
N/A
 

 
323

 
0.1

 
353

DCA Investment Holding, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
5,253

 
525

 
0.1

 
572

DCA Investment Holding, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
53

 
5

 

 
89

Deca Dental Management LLC
LLC units
 
N/A
 
N/A
 
N/A
 
651

 
651

 
0.1

 
716

Dental Holdings Corporation
LLC units
 
N/A
 
N/A
 
N/A
 
345

 
345

 
0.1

 
412

Encore GC Acquisition, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
8

 
81

 

 
89

Encore GC Acquisition, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
8

 

 

 
16

Katena Holdings, Inc.
LLC units
 
N/A
 
N/A
 
N/A
 

 
205

 

 
243

Lombart Brothers, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 

 
99

 

 
99

Oliver Street Dermatology Holdings, LLC
LLC units
 
N/A
 
N/A
 
N/A
 

 
218

 
0.1

 
218

Pinnacle Treatment Centers, Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 

 
216

 
0.1

 
216

Pinnacle Treatment Centers, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
2

 
2

 
0.1

 
2

RXH Buyer Corporation
LP interest
 
N/A
 
N/A
 
N/A
 
4

 
443

 

 
244

 
 
 
 
 
 
 
 
 
 
 
4,244

 
0.9

 
4,479

Insurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Internet Pipeline, Inc.
Preferred stock
 
N/A
 
N/A
 
N/A
 

 
207

 
0.1

 
239

Internet Pipeline, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
90

 
2

 

 
74

 
 
 
 
 
 
 
 
 
 
 
209

 
0.1

 
313

Leisure, Amusement, Motion Pictures and Entertainment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Competitor Group, Inc.#
Preferred stock
 
N/A
 
N/A
 
N/A
 

 
184

 

 
3

Competitor Group, Inc.#
Common stock
 
N/A
 
N/A
 
N/A
 
1

 

 

 

 
 
 
 
 
 
 
 
 
 
 
184

 

 
3

Personal and Non Durable Consumer Products
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Georgica Pine Clothiers, LLC
LLC units
 
N/A
 
N/A
 
N/A
 
9

 
92

 

 
100

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Personal, Food and Miscellaneous Services
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Clarkson Eyecare LLC
LLC units
 
N/A
 
N/A
 
N/A
 

 
63

 

 
139

Community Veterinary Partners, LLC
Common stock
 
N/A
 
N/A
 
N/A
 
1

 
98

 

 
124

Vetcor Professional Practices LLC
LLC units
 
N/A
 
N/A
 
N/A
 
498

 
341

 
0.1

 
348

Vetcor Professional Practices LLC
LLC units
 
N/A
 
N/A
 
N/A
 
55

 
55

 
0.1

 
405

Veterinary Specialists of North America, LLC
LLC units
 
N/A
 
N/A
 
N/A
 

 
56

 

 
56

Wetzel's Pretzels, LLC
Common stock
 
N/A
 
N/A
 
N/A
 

 
149

 

 
149

 
 
 
 
 
 
 
 
 
 
 
762

 
0.2

 
1,221



29

Golub Capital Investment Corporation and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2016
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal/Par
Amount(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
Printing and Publishing
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brandmuscle, Inc.
LLC interest
 
N/A
 
N/A
 
N/A
 

 
$
207

 
0.1

%
$
235

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail Stores
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Batteries Plus Holding Corporation
LP interest
 
N/A
 
N/A
 
N/A
 
5

 
505

 
0.1

 
505

Cycle Gear, Inc.
LLC units
 
N/A
 
N/A
 
N/A
 
8

 
111

 

 
177

Elite Sportswear, L.P.
LLC interest
 
N/A
 
N/A
 
N/A
 

 
37

 

 
49

Feeders Supply Company, LLC
Preferred stock
 
N/A
 
N/A
 
N/A
 
1

 
145

 

 
145

Pet Holdings ULC(7)(8)
LP interest
 
N/A
 
N/A
 
N/A
 
222

 
188

 

 
171

 
 
 
 
 
 
 
 
 
 
 
986

 
0.1

 
1,047

Utilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PowerPlan Holdings, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 

 
135

 

 
156

PowerPlan Holdings, Inc.
Common stock
 
N/A
 
N/A
 
N/A
 
68

 
1

 

 
122

 
 
 
 
 
 
 
 
 
 
 
136

 

 
278

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-controlled/non-affiliate company equity investments
 
 
 
 
 
 
 
$
13,147

 
2.4

%
$
14,071

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-controlled/non-affiliate company investments
 
 
 
 
 
$
1,015,694

 
$
1,014,201

 
165.7

%
$
1,021,754

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Controlled affiliate company investments(11)
 
 
 
 
 
 
 
 
 
 
 
 
Debt Investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment Funds and Vehicles
 
 
 
 
 
 
 
 
  
 
  
 
 
 
  
GCIC Senior Loan Fund LLC(7)
Subordinated debt
 
L + 8.00%
 
8.44%
 
12/2021
 
$
34,917

 
$
34,917

 
5.7

%
$
34,917

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total controlled affiliate company debt investments
 
 
 
 
 
 
 
$
34,917

 
5.7

%
$
34,917

 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
Equity Investments(9)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment Funds and Vehicles
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GCIC Senior Loan Fund LLC(7)
LLC interest
 
N/A
 
N/A
 
N/A
 
 
 
$
12,258

 
2.1

%
$
13,039

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total controlled affiliate company equity investments
 
 
 
 
 
 
 
$
12,258

 
2.1

%
$
13,039

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total controlled affiliate company investments
 
 
 
 
 
$
34,917

 
$
47,175

 
7.8

%
$
47,956

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total investments
 
 
 
 
 
$
1,050,611

 
$
1,061,376

 
173.5

%
$
1,069,710

 
 
 
 
 
 
 
 
 
 
 
Cash, Restricted Cash and Cash Equivalents
 
 
 
 
 
 
  
 
  

 
  

 
  

 
  

Cash and Restricted Cash
 
 
 
  
 
  

 
$
75,731

 
12.3

%
$
75,731

Total Cash, Restricted Cash and Cash Equivalents
 
 
 
 
$
75,731

 
12.3

%
$
75,731

 
 
 
 
 
 
 
 
 
 
 
Total Investments and Cash, Restricted Cash and Cash Equivalents
 
 
 
 
 
 
 
$
1,137,107

 
185.8

%
$
1,145,441


 
# 
 
Denotes that all or a portion of the loan collateralized the Credit Facility (as defined in Note 8).
* 
 
Denotes that all or a portion of the loan secures the notes offered in the GCIC 2016 Debt Securitization (as defined in Note 8).


(1) 
The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate (‘‘LIBOR’’ or ‘‘L’’) or Prime (‘‘P’’) and which reset daily, quarterly or semiannually. For each, the Company has provided the spread over LIBOR or Prime and the weighted average current interest rate in effect at September 30, 2016. Certain investments are subject to a LIBOR or Prime interest rate floor. For fixed rate loans, a spread above a reference rate is not applicable.


30

Golub Capital Investment Corporation and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2016
(In thousands)


(2) 
For portfolio companies with multiple interest rate contracts, the interest rate shown is a weighted average current interest rate in effect at September 30, 2016.
(3) 
The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.
(4) 
The negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par.The negative amortized cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan.
(5) 
The entire commitment was unfunded at September 30, 2016. As such, no interest is being earned on this investment.
(6) 
Loan was on non-accrual status as of September 30, 2016, meaning that the Company has ceased recognizing interest income on the loan.
(7) 
The investment is treated as a non-qualifying asset under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company’s total assets. As of September 30, 2016, total non-qualifying assets at fair value represented 7.1% of the Company’s assets calculated in accordance with the 1940 Act.
(8) 
The headquarters of this portfolio company is located in Canada.
(9) 
Non-income producing securities.
(10) 
Ownership of certain equity investments may occur through a holding company or partnership.
(11) 
As defined in the 1940 Act, the Company is deemed to be both an ‘‘Affiliated Person’’ of and ‘‘Control’’ this portfolio company as the Company owns more than 25% of the portfolio company’s outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement). See Note 6 in the accompanying notes to the consolidated financial statements for transactions during the year ended September 30, 2016 in which the issuer was both an Affiliated Person and a portfolio company that the Company is deemed to Control.



31

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 


Note 1.    Organization

Golub Capital Investment Corporation (“GCIC” and collectively with its subsidiaries, the “Company”) is an externally managed, closed-end, non-diversified management investment company that was formed on September 22, 2014 and commenced operations on December 31, 2014, the effective date of the Company’s election to be treated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, for U.S. federal income tax purposes, the Company has elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).

The Company’s investment strategy is to invest primarily in senior secured and one stop (a loan that combines characteristics of traditional first lien senior secured loans and second lien or subordinated loans) loans of U.S. middle-market companies. The Company may also selectively invest in second lien and subordinated (a loan that ranks senior only to a borrower’s equity securities and ranks junior to all of such borrower’s other indebtedness in priority of payment) loans of, and warrants and minority equity securities in, U.S. middle-market companies. The Company has entered into an investment advisory agreement (the “Investment Advisory Agreement”) with GC Advisors LLC (the “Investment Adviser”), under which the Investment Adviser manages the day-to-day operations of, and provides investment advisory services to, the Company. Under an administration agreement (the “Administration Agreement”) the Company is provided with certain services by an administrator (the “Administrator”), which is currently Golub Capital LLC.

Note 2.    Significant Accounting Policies and Recent Accounting Updates

Basis of presentation: The Company is an investment company as defined in the accounting and reporting guidance under Accounting Standards Codification (“ASC”) Topic 946 - Financial Services - Investment Companies (“ASC Topic 946”).

The accompanying interim consolidated financial statements of the Company and related financial information have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and pursuant to the requirements for reporting under Articles 6 and 10 of Regulation S-X. In the opinion of management, the consolidated financial statements reflect all adjustments and reclassifications consisting solely of normal accruals that are necessary for the fair presentation of financial results as of and for the periods presented. All intercompany balances and transactions have been eliminated. Certain prior period amounts have been reclassified to conform to the current period presentation.

Fair value of financial instruments: The Company applies fair value to all of its financial instruments in accordance with ASC Topic 820 - Fair Value Measurement (“ASC Topic 820”). ASC Topic 820 defines fair value, establishes a framework used to measure fair value and requires disclosures for fair value measurements. In accordance with ASC Topic 820, the Company has categorized its financial instruments carried at fair value, based on the priority of the valuation technique, into a three-level fair value hierarchy. Fair value is a market-based measure considered from the perspective of the market participant who holds the financial instrument rather than an entity-specific measure. Therefore, when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that management believes market participants would use in pricing the financial instrument at the measurement date.



32

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

The availability of observable inputs can vary depending on the financial instrument and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new, whether the product is traded on an active exchange or in the secondary market and the current market conditions. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for financial instruments classified as Level 3.

Any changes to the valuation methodology are reviewed by management and the Company’s board of directors (the “Board”) to confirm that the changes are appropriate. As markets change, new products develop and the pricing for products becomes more or less transparent, the Company will continue to refine its valuation methodologies. See further description of fair value methodology in Note 7.

Use of estimates: The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Consolidation: As provided under Regulation S-X and ASC Topic 946, the Company will generally not consolidate its investment in a company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. Accordingly, the Company consolidated the results of the Company’s wholly-owned subsidiaries, GCIC Holdings LLC (“GCIC Holdings”), GCIC Funding LLC (“GCIC Funding”), GCIC Equity LLC (“GCIC Equity”) and Golub Capital Investment Corporation CLO 2016(M) LLC (“GCIC 2016 Issuer”), in its consolidated financial statements. Effective May 2, 2016, GCIC Equity merged with GCIC Holdings, with GCIC Holdings remaining as the surviving limited liability company (“LLC”). The Company does not consolidate its non-controlling interest in GCIC Senior Loan Fund, LLC (“GCIC SLF”). See further description of the Company’s investment in GCIC SLF in Note 5.

Assets related to transactions that do not meet ASC Topic 860 - Transfers and Servicing (“ASC Topic 860”) requirements for accounting sale treatment are reflected in the Company’s consolidated statements of financial condition as investments. Those assets are owned by special purpose entities, including GCIC Funding and GCIC 2016 Issuer, that are consolidated in the Company’s consolidated financial statements. The creditors of the special purpose entities have received security interests in such assets and such assets are not intended to be available to the creditors of GCIC (or any affiliate of GCIC).

Cash and cash equivalents: Cash and cash equivalents are highly liquid investments with an original maturity of three months or less at the date of acquisition. The Company deposits its cash in financial institutions and, at times, such balances may be in excess of the Federal Deposit Insurance Corporation insurance limits.

Restricted cash and cash equivalents: Restricted cash and cash equivalents include amounts that are collected and are held by trustees who have been appointed as custodians of the assets securing certain of the Company’s financing transactions. Restricted cash and cash equivalents are held by the trustees for payment of interest expense and principal on the outstanding borrowings or reinvestment into new assets.



33

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

Revenue recognition:

Investments and related investment income: Interest income is accrued based upon the outstanding principal amount and contractual interest terms of debt investments.

Loan origination fees, original issue discount and market discount or premium are capitalized, and the Company accretes or amortizes such amounts over the life of the loan as interest income. For the three and six months ended March 31, 2017, interest income included $989 and $2,379, respectively, of accretion of discounts. For the three and six months ended March 31, 2016, interest income included $887 and $1,403, respectively, of accretion of discounts. For the three and six months ended March 31, 2017, the Company received loan origination fees of $1,256 and $2,920, respectively. For the three and six months ended March 31, 2016, the Company received loan origination fees of $3,644 and $5,048, respectively.

For investments with contractual payment-in-kind (“PIK”) interest, which represents contractual interest accrued and added to the principal balance that generally becomes due at maturity, the Company will not accrue PIK interest if the portfolio company valuation indicates that the PIK interest is not collectible. For the three and six months ended March 31, 2017, the Company recorded PIK income of $463 and $908, respectively, and received PIK payments in cash of $65 and $65, respectively. For the three and six months ended March 31, 2016, the Company recorded PIK income of $44 and $21, respectively, and received PIK payments in cash of $0 and $0, respectively.

In addition, the Company may generate revenue in the form of amendment, structuring or due diligence fees, fees for providing managerial assistance, consulting fees and prepayment premiums on loans. The Company records these fees as fee income when received. All other income is recorded into income when earned. For the three and six months ended March 31, 2017, fee income included $62 and $205, respectively, of prepayment premiums. For the three and six months ended March 31, 2016, fee income included $361 and $366, respectively, of prepayment premiums.

For the three and six months ended March 31, 2017, the Company received interest and fee income in cash, which excludes capitalized loan origination fees, of $19,063 and $38,681, respectively. For the three and six months ended March 31, 2016, the Company received interest and fee income in cash, which excludes capitalized loan origination fees, of $10,932 and $20,968, respectively.

Dividend income on preferred equity securities is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity 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 LLC and limited partnership (“LP”) investments is evaluated to determine if 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 amortized cost basis of the investment. For the three and six months ended March 31, 2017, the Company recorded dividend income of $1,242 and $1,664, respectively, and return of capital distributions of $4,763 and $4,809, respectively. For the three and six months ended March 31, 2016, the Company recorded dividend income of $17 and return of capital distributions of $39.

Investment transactions are accounted for on a trade-date basis. Realized gains or losses on investments are measured by the difference between the net proceeds from the disposition and the amortized cost basis


34

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

of investment, without regard to unrealized gains or losses previously recognized. The Company reports current period changes in fair value of investments that are measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investments in the consolidated statements of operations.

Non-accrual loans: A loan may be left on accrual status during the period the Company is pursuing repayment of the loan. Management reviews all loans that become 90 days or more past due on principal and interest, or when there is reasonable doubt that principal or interest will be collected, for possible placement on non-accrual status. When a loan is placed on non-accrual status, unpaid interest credited to income is reversed. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management’s judgment, payments are likely to remain current. The total fair value of non-accrual loans was $16 and $16 as of March 31, 2017 and September 30, 2016, respectively.

Income taxes: The Company has elected to be treated as a RIC under Subchapter M of the Code and operates in a manner so as to qualify for the tax treatment applicable to RICs. In order to qualify and be subject to tax as a RIC, among other things, the Company is required to meet certain source of income and asset diversification requirements and timely distribute dividends for U.S. federal income tax purposes to its stockholders of an amount generally at least equal to 90% of its investment company taxable income, as defined by the Code and determined without regard to any deduction for dividends paid, for each tax year. The Company has made, and intends to continue to make, the requisite distributions to its stockholders, which will generally relieve the Company from U.S. federal income taxes with respect to all income distributed to its stockholders.

Depending on the level of taxable income earned in a tax year, the Company may choose to retain taxable income in excess of current year dividend distributions, and would distribute such taxable income in the next tax year. The Company would then pay a 4% excise tax on such income, as required. To the extent that the Company determines that its estimated current year annual taxable income, determined on a calendar year basis, could exceed estimated current calendar year dividend distributions, the Company accrues excise tax, if any, on estimated excess taxable income as taxable income is earned. For each of the three and six months ended March 31, 2017 and 2016, no amount was incurred for U.S. federal excise tax.

The Company accounts for income taxes in conformity with ASC Topic 740 - Income Taxes (“ASC Topic 740”). ASC Topic 740 provides guidelines for how uncertain tax positions should be recognized, measured, presented and disclosed in financial statements. ASC Topic 740 requires the evaluation of tax positions taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense in the current year. It is the Company’s policy to recognize accrued interest and penalties related to uncertain tax benefits in income tax expense. There were no material uncertain income tax positions through March 31, 2017. The 2014 through 2016 tax years remain subject to examination by U.S. federal and most state tax authorities.

Distributions: Distributions to common stockholders are recorded on the record date. Subject to the discretion of and as determined by the Board, the Company intends to authorize and declare ordinary cash distributions based on a formula approved by the Board on a quarterly basis. The amount to be paid out


35

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

as a dividend or distribution is determined by the Board each quarter and is generally based upon the earnings estimated by management. Net realized capital gains, if any, are distributed at least annually, although the Company may decide to retain such capital gains for investment.

The Company has adopted a dividend reinvestment plan (“DRIP”) that provides for reinvestment of any distributions the Company declares in cash on behalf of its stockholders, unless a stockholder elects to receive cash. As a result, if the Board authorizes and the Company declares a cash distribution, then stockholders who have not “opted out” of the DRIP will have their cash distribution automatically reinvested in additional shares of the Company’s common stock, rather than receiving the cash distribution. Shares issued under the DRIP will be issued at a price per share equal to the most recent net asset value (“NAV”) per share as determined by the Board.

Deferred debt issuance costs: Deferred debt issuance costs represent fees and other direct incremental costs incurred in connection with the Company’s borrowings. As of March 31, 2017 and September 30, 2016, the Company had deferred debt issuance costs of $3,330 and $5,073, respectively. These amounts are amortized and included in interest expense in the consolidated statements of operations over the estimated average life of the borrowings. Amortization expense for the three and six months ended March 31, 2017 was $882 and $1,781, respectively. Amortization expense for the three and six months ended March 31, 2016 was $486 and $964, respectively.

Recent accounting pronouncements:  In November 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash a consensus of FASB Emerging Issues Task Force, which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This guidance is effective for annual reporting periods, and the interim periods within those periods, beginning after December 15, 2017 and early adoption is permitted. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements.

Note 3.    Stockholders’ Equity

GCIC is authorized to issue 1,000,000 shares of preferred stock at a par value of $0.001 per share and 100,000,000 shares of common stock at a par value of $0.001 per share. Since the commencement of operations on December 31, 2014, GCIC entered into subscription agreements (collectively, the “Subscription Agreements”) with several investors, including with affiliates of the Adviser, providing for the private placement of GCIC’s common stock. Under the terms of the Subscription Agreements, investors are required to fund drawdowns to purchase GCIC’s common stock, at a price per share equal to the most recent NAV per share as determined by the Board (subject to adjustment to the extent required by Section 23 of the 1940 Act), up to the amount of their respective capital subscriptions on an as-needed basis as determined by GCIC with a minimum of 10 calendar days prior notice.

As of March 31, 2017 and September 30, 2016, GCIC had the following subscriptions, pursuant to the Subscription Agreements, and contributions from its stockholders:
 
As of March 31, 2017
 
As of September 30, 2016
 
 Subscriptions
 
 Contributions
 
 Subscriptions
 
 Contributions
GCIC Stockholders
$
1,301,643

 
$
594,263

 
$
942,904

 
$
594,263

Total
$
1,301,643

 
$
594,263

 
$
942,904

 
$
594,263




36

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

As of March 31, 2017 and September 30, 2016, the ratio of total contributed capital to total capital subscriptions was 45.7% and 63.0%, respectively, and GCIC had uncalled capital commitments of $707,380 and $348,641, respectively.

The following table summarizes the shares of GCIC common stock issued and outstanding for the six months ended March 31, 2017 and 2016:
 
Date
 
Shares Issued
 
NAV ($) per share
 
Proceeds
 
 
 
 
 
 
 
 
Shares outstanding, September 30, 2015
 
 
20,843,155.219

 
$
15.00

 
$
312,647

 
 
 
 
 
 
 
 
Issuance of shares
11/06/2015
 
1,329,458.533

 
15.00

 
19,942

Issuance of shares
12/14/2015
 
2,078,187.800

 
15.00

 
31,173

Issuance of shares
02/23/2016
 
2,488,930.923

 
15.00

 
37,334

Shares issued for capital drawdowns
 
 
5,896,577.256

 
$
15.00

 
$
88,449

 
 
 
 
 
 
 
 
Issuance of shares (1)
11/20/2015
 
182,861.440

 
15.00

 
2,743

Issuance of shares (1)
12/30/2015
 
168,295.009

 
15.00

 
2,524

Issuance of shares (1)
02/26/2016
 
170,848.215

 
15.00

 
2,563

Shares issued through DRIP
 
 
522,004.664

 
$
15.00

 
$
7,830

 
 
 
 
 
 
 
 
Shares outstanding, March 31, 2016
 
 
27,261,737.139

 
$
15.00

 
$
408,926

 
 
 
 
 
 
 
 
Shares outstanding, September 30, 2016
 
 
41,087,178.250

 
$
15.00

 
$
616,307

 
 
 
 
 
 
 
 
Issuance of shares (1)
11/21/2016
 
355,195.794

 
15.00

 
5,329

Issuance of shares (1)
12/30/2016
 
327,120.972

 
15.00

 
4,907

Issuance of shares (1)
02/27/2017
 
335,502.470

 
15.00

 
5,032

Shares issued through DRIP
 
 
1,017,819.236

 
$
15.00

 
$
15,268

 
 
 
 
 
 
 
 
Shares outstanding, March 31, 2017
 
 
42,104,997.486

 
$
15.00

 
$
631,575

 
(1) 
Shares issued through the DRIP.

Note 4.    Related Party Transactions

Investment Advisory Agreement: Under the Investment Advisory Agreement, the Investment Adviser manages the day-to-day operations of, and provides investment advisory services to, GCIC. The Board most recently reapproved the Investment Advisory Agreement in May 2017. The Investment Adviser is a registered investment adviser with the Securities and Exchange Commission (the “SEC”). The Investment Adviser receives fees for providing services, consisting of two components, a base management fee and an Incentive Fee (as defined below).



37

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

The base management fee is calculated at an annual rate equal to the lesser of (a) 1.50% or (b) the base management fee of Golub Capital BDC, Inc. (currently 1.375%) in either case on the fair value of the average adjusted gross assets of the Company at the end of the two most recently completed calendar quarters (including assets purchased with borrowed funds and securitization-related assets, leverage and cash collateral on deposit with custodian but adjusted to exclude cash and cash equivalents and restricted cash and cash equivalents so that investors do not pay the base management fee on such assets) and is payable quarterly in arrears. The base management fee is adjusted, based on the actual number of days elapsed relative to the total number of days in such calendar quarter, for any share issuances or repurchases during such calendar quarter. Base management fees for any partial quarter are appropriately pro-rated. For purposes of the Investment Advisory Agreement, cash equivalents means U.S. government securities and commercial paper instruments maturing within 270 days of purchase (which is different than the GAAP definition, which defines cash equivalents as U.S. government securities and commercial paper instruments maturing within 90 days of purchase). To the extent that the Investment Adviser or any of its affiliates provides investment advisory, collateral management or other similar services to a subsidiary of GCIC, the base management fee shall be reduced by an amount equal to the product of (1) the total fees paid to the Investment Adviser by such subsidiary for such services and (2) the percentage of such subsidiary’s total equity, including membership interests and any class of notes not exclusively held by one or more third parties, that is owned, directly or indirectly, by the Company. For periods prior to the earlier of (1) the date of the pricing of an initial public offering or listing on a national securities exchange of the securities of GCIC or (2) a sale of all or substantially all of the Company’s assets to, or other liquidity event with, an entity for consideration of publicly listed securities of the acquirer (each, a “Liquidity Event”), the Investment Adviser has irrevocably agreed to waive any base management fee in excess of 1.00% of the fair value of the Company’s average adjusted gross assets as calculated in accordance with the Investment Advisory Agreement and as described above. For the three and six months ended March 31, 2017, the base management fee irrevocably waived by the Investment Adviser was $1,059 and $2,094, respectively. For the three and six months ended March 31, 2016, the base management fee irrevocably waived by the Investment Adviser was $584 and $1,127, respectively.

The Incentive Fee consists of three parts: the income component (the “Income Incentive Fee”), the capital gains component (the “Capital Gain Incentive Fee”) and the subordinated liquidation incentive component (the “Subordinated Liquidation Incentive Fee” and, together with the Income Incentive Fee and the Capital Gain Incentive Fee, the “Incentive Fee”).

The Income Incentive Fee is calculated quarterly in arrears based on Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter. “Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies but excluding fees for providing managerial assistance) accrued during the calendar quarter, minus operating expenses for the calendar quarter (including the base management fee, taxes, any expenses payable under the Investment Advisory Agreement and the Administration Agreement, any expenses of securitizations and any interest expense and dividends paid on any outstanding preferred stock, but excluding the Incentive Fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature such as market discount, debt instruments with PIK interest, preferred stock with PIK dividends and zero coupon securities, accrued income that the Company has not yet received in cash.

Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Because of the structure of the Income Incentive Fee, it is possible that an Incentive Fee may be calculated under this formula with respect to a period in


38

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

which the Company has incurred a loss. For example, if the Company receives Pre-Incentive Fee Net Investment Income in excess of the hurdle rate (as defined below) for a calendar quarter, the Income Incentive Fee will result in a positive value and an Income Incentive Fee will be paid unless the payment of such Income Incentive Fee would be subject to the Incentive Fee Cap defined below.

Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the value of the Company’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the end of the immediately preceding calendar quarter, is compared to a fixed “hurdle rate” of 1.5% quarterly. If market interest rates rise, the Company may be able to invest funds in debt instruments that provide for a higher return, which would increase Pre-Incentive Fee Net Investment Income and make it easier for the Investment Adviser to surpass the fixed hurdle rate and receive an Incentive Fee based on such net investment income. The Company’s Pre-Incentive Fee Net Investment Income used to calculate this part of the Incentive Fee is also included in the amount of its total assets (excluding cash and cash equivalents but including assets purchased with borrowed funds and leverage) used to calculate the base management fee annual rate.

The Company calculates the Income Incentive Fee with respect to its Pre-Incentive Fee Net Investment Income quarterly, in arrears, as follows:

Zero in any calendar quarter in which the Pre-Incentive Fee Net Investment Income does not exceed the hurdle rate;
50.0% of the Company’s Pre-Incentive Fee Net Investment Income with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the hurdle rate but is less than the percentage at which the amount payable to the Investment Adviser equals 20.0% of the Pre-Incentive Fee Net Investment Income as if a hurdle rate did not apply. This portion of the Company’s Pre-Incentive Fee Net Investment Income that exceeds the hurdle rate is referred to as the “catch-up” provision; and
20.0% of the amount of the Company’s Pre-Incentive Fee Net Investment Income, if any, that exceeds the catch-up provision in any calendar quarter.

The sum of these calculations yields the Income Incentive Fee. This amount is appropriately adjusted for any share issuances or repurchases during the quarter. For the three and six months ended March 31, 2017, the Income Incentive Fee incurred was $1,830 and $3,876, respectively. For the three and six months ended March 31, 2016, the Income Incentive Fee incurred was $1,042 and $1,705, respectively.

For periods prior to a Liquidity Event, the Investment Adviser has irrevocably agreed to waive the Income Incentive fee calculated under the Investment Advisory Agreement in amounts in excess of the following amounts (computed on a quarterly basis, in arrears):

zero in any calendar quarter in which the Pre-Incentive Fee Net Investment Income does not exceed the hurdle rate;
50.0% of the Company’s Pre-Incentive Fee Net Investment Income with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the hurdle rate but is less than the percentage at which the amount payable to the Investment Adviser equals to 15.0% of the Pre-Incentive Fee Net Investment Income as if a hurdle rate did not apply. This portion of the Company’s Pre-Incentive Fee Net Investment Income that exceeds the hurdle rate is referred to as the “catch-up” provision; and
15.0% of the amount of the Company’s Pre-Incentive Fee Net Investment Income, if any, that exceeds the catch-up provision in any calendar quarter.


39

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 


For the three and six months ended March 31, 2017, the Income Incentive Fee irrevocably waived by the Investment Adviser was $0 and $16, respectively. For the three and six months ended March 31, 2016, the Income Incentive Fee irrevocably waived by the Investment Adviser was $0 and $0, respectively.

The second part of the Incentive Fee, the Capital Gain Incentive Fee, equals (a) 20.0% of the Company’s Capital Gain Incentive Fee Base (as defined below), if any, calculated in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), commencing with the calendar year ending December 31, 2015, less (b) the aggregate amount of any previously paid Capital Gain Incentive Fees. The Company’s “Capital Gain Incentive Fee Base” equals (1) the sum of (i) realized capital gains, if any, on a cumulative positive basis from December 31, 2014, the date the Company elected to become a BDC, through the end of each calendar year, (ii) all realized capital losses on a cumulative basis and (iii) all unrealized capital depreciation on a cumulative basis less (2) all unamortized deferred debt issuance costs, if and to the extent such costs exceed all unrealized capital appreciation on a cumulative basis.

The cumulative aggregate realized capital losses are calculated as the sum of the amounts by which (a) the net sales price of each investment in the Company’s portfolio when sold is less than (b) the accreted or amortized cost basis of such investment.
The cumulative aggregate realized capital gains are calculated as the sum of the differences, if positive, between (a) the net sales price of each investment in the Company’s portfolio when sold and (b) the accreted or amortized cost basis of such investment.
The aggregate unrealized capital depreciation is calculated as the sum of the differences, if negative, between (a) the valuation of each investment in the Company’s portfolio as of the applicable Capital Gain Incentive Fee calculation date and (b) the accreted or amortized cost basis of such investment.

The Capital Gain Incentive Fee is calculated on a cumulative basis from December 31, 2014 through the end of each calendar year. Prior to the closing of a Liquidity Event, the Investment Adviser has agreed to waive that portion of the Capital Gain Incentive Fee, calculated as described above, in excess of 15.0% of the Capital Gain Incentive Fee Base, provided that any amounts so waived shall be deemed to have been paid to the Investment Adviser for purposes of determining the Capital Gain Incentive Fee payable after the closing of a public offering.

There was no Capital Gain Incentive Fee as calculated under the Investment Advisory Agreement (as described above) payable for the three and six months ended March 31, 2017 and 2016. However, in accordance with GAAP, the Company is required to include the aggregate unrealized capital appreciation on investments in the calculation and accrue a capital gain incentive fee on a quarterly basis, as if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Advisory Agreement. If the Capital Gain Incentive Fee Base, adjusted as required by GAAP to include unrealized appreciation, is positive at the end of a period, then GAAP requires the Company to accrue a capital gain incentive fee equal to 15.0% prior to a Liquidity Event (20.0% following a Liquidity Event) of such amount, less the aggregate amount of the actual Capital Gain Incentive Fees paid and capital gain incentive fees accrued under GAAP in all prior periods. If such amount is negative, then there is no accrual for such period. The resulting accrual under GAAP in a given period may result in additional expense if such cumulative amount is greater than in the prior period or a reversal of previously recorded expense if such cumulative amount is less than in the prior period. There can be no assurance that such unrealized capital appreciation will be realized in the future. For the three and six months ended March


40

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

31, 2017, the Company accrued a capital gain incentive fee under GAAP of $392 and $1,090, respectively, which are included in incentive fee in the consolidated statements of operations. For the three and six months ended March 31, 2016, the Company accrued a capital gain incentive fee under GAAP of $135 and $274, respectively, which are included in incentive fee in the consolidated statements of operations. As of March 31, 2017 and September 30, 2016, included in management and incentive fees payable on the consolidated statements of financial condition were $1,714 and $624, respectively, for accruals for capital gain incentive fees under GAAP.

The third part of the Incentive Fee, the Subordinated Liquidation Incentive Fee, equals 20.0% of the net proceeds from a liquidation of the Company in excess of adjusted capital, as calculated immediately prior to liquidation; subject, however, to the limit of cumulative Incentive Fees of all types not exceeding the Incentive Fee Cap (as defined below). For purposes of this calculation, “liquidation” will include any merger of the Company with another entity or the acquisition of all or substantially all of the shares of common stock of GCIC in a single or series of related transactions. The Investment Advisory Agreement provides that no Subordinated Liquidation Incentive Fee shall be payable for any liquidation that occurs more than six months after the date of a public offering of securities of GCIC. For periods prior to the closing of a Liquidity Event, the Investment Adviser has agreed to waive that portion of the Subordinated Liquidation Incentive Fee in excess of 10.0% of the net proceeds from liquidation in excess of adjusted capital, as calculated immediately prior to liquidation.

The Company has structured the calculation of the Incentive Fee to include a fee limitation such that an Incentive Fee for any quarter can only be paid to the Investment Adviser if, after such payment, the cumulative Incentive Fees paid to the Investment Adviser since December 31, 2014, would be less than or equal to 20.0% of the Company’s Cumulative Pre-Incentive Fee Net Income (the “Incentive Fee Cap”). Cumulative Pre-Incentive Fee Net Income is equal to the sum of (a) Pre-Incentive Fee Net Investment Income for each period from December 31, 2014 and (b) cumulative aggregate realized capital gains, cumulative aggregate realized capital losses, cumulative aggregate unrealized capital depreciation and cumulative aggregate unrealized capital appreciation from December 31, 2014. For periods prior to a Liquidity Event, the Investment Adviser has agreed to irrevocably waive any Incentive Fee payable in excess of 15.0% of the Company’s Cumulative Pre-Incentive Fee Net Income; provided that any amounts so waived shall be deemed to have been paid to the Investment Adviser for purposes of the Incentive Fee Cap after the closing of such Liquidity Event.

The sum of the Income Incentive Fee, the Capital Gain Incentive Fee and the Subordinated Liquidation Incentive Fee is the Incentive Fee. The Company will deposit one-third of each Incentive Fee payment into an escrow account (the “Escrow Account”) administered by The Bank of New York Mellon (the “Escrow Agent”). Assets in the Escrow Account will be held by the Escrow Agent until the closing of a Liquidity Event at which time the Escrow Agent will release the assets to the Investment Adviser. If no Liquidity Event occurs prior to December 31, 2020, the Escrow Agent will return all assets in the Escrow Account to the Company for the benefit of its stockholders. For the three and six months ended March 31, 2017, the Company deposited $676 and $1,300, respectively, into the Escrow Account. For the three and six months ended March 31, 2016, the Company deposited $221 and $430, respectively, into the Escrow Account. As of March 31, 2017, the Company has made deposits totaling $2,726 into the Escrow Account.

Administration Agreement: Under the Administration Agreement, the Administrator furnishes the Company with office facilities and equipment, provides the Company with clerical, bookkeeping and record keeping services at such facilities and provides the Company with other administrative services as the Administrator, subject to review by the Board, determines necessary to conduct the Company’s day-


41

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

to-day operations. GCIC reimburses the Administrator the allocable portion (subject to the review and approval of the Board) of overhead and other expenses incurred by it in performing its obligations under the Administration Agreement, including rent, fees and expenses associated with performing compliance functions and GCIC’s allocable portion of the cost of its chief financial officer and chief compliance officer and their respective staffs. The Board reviews such expenses to determine that these expenses are reasonable and comparable to administrative services charged by unaffiliated third party asset managers. Under the Administration Agreement, the Administrator also provides, on the Company’s behalf, managerial assistance to those portfolio companies to which the Company is required to provide such assistance and will be paid an additional amount based on the cost of the services provided, which amount shall not exceed the amount the Company receives from such portfolio companies.

Included in accounts payable and accrued expenses is $343 and $280 as of March 31, 2017 and September 30, 2016, respectively, for accrued allocated shared services under the Administration Agreement.

Other related party transactions: The Company has agreed to reimburse the Investment Adviser for the organization and offering costs incurred on its behalf up to an aggregate amount of $700. Organization and offering costs include, among other things, the cost of incorporating the Company, including legal, accounting, regulatory filing and other fees pertaining to the Company’s organization, as well as expenses for the registration and offering of shares of GCIC common stock that were paid by the Investment Adviser on behalf of the Company. As of March 31, 2017 and September 30, 2016, the organization and offering costs incurred by the Company totaled $700 and $534, respectively.

The Administrator pays for certain unaffiliated third-party expenses incurred by the Company. Such expenses include postage, printing, office supplies, rating agency fees and professional fees. These expenses are not marked-up and represent the same amount the Company would have paid had the Company paid the expenses directly. These expenses are subsequently reimbursed in cash.

Total expenses reimbursed to the Administrator during the three and six months ended March 31, 2017 were $520 and $782, respectively. Total expenses reimbursed to the Administrator during the three and six months ended March 31, 2016 were $423 and $476, respectively.

As of March 31, 2017 and September 30, 2016, included in accounts payable and accrued expenses were $194 and $262, respectively, for accrued expenses paid on behalf of the Company by the Administrator.

During the three and six months ended March 31, 2017, the Company sold $13,140 and $36,873, respectively, of investments and unfunded commitments to GCIC SLF at fair value and recognized $134 and $331, respectively, of net realized gains. During the three and six months ended March 31, 2016, the Company sold $49,480 and $140,122, respectively, of investments and unfunded commitments to GCIC SLF at fair value and recognized $54 and $739, respectively, of net realized gains.

On December 30, 2014, the Investment Adviser transferred 666.670 shares of the Company’s common stock acquired in connection with the Company’s formation to GCOP LLC, an affiliate of the Investment Adviser, for $10. In addition, on December 31, 2014, GCOP LLC entered into a $15,000 subscription agreement to purchase shares of the Company’s common stock in a private placement. As of March 31, 2017, the Company has issued 1,004,905.973, shares of its common stock, including through the DRIP, to GCOP LLC in exchange for aggregate capital contributions totaling $15,074.

On December 31, 2014, GEMS Fund, L.P. ("GEMS") entered into a $40,000 subscription agreement to purchase shares of the Company’s common stock in a private placement. In connection with the


42

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

Company’s acquisition of GCIC Holdings and GCIC Funding from GEMS on December 31, 2014, the Company issued 2,666,666.667 shares of its common stock and entered into an $11,820 short-term unsecured promissory note with GEMS (“GEMS Note”) that matured and was paid-off on March 2, 2015. As of March 31, 2017, the Company has issued 3,162,457.973 shares of its common stock, including through the DRIP, to GEMS in exchange for aggregate capital contributions totaling $47,437.

On February 3, 2015, the Company entered into an unsecured revolving credit facility with the Investment Adviser (the “Revolver”), with a maximum credit limit of $40,000 and expiration date of February 3, 2018. Refer to Note 8 for discussion of the Revolver.

On June 1, 2015, GEMS Fund 4, L.P, a Delaware limited partnership whose general partner is controlled by the Investment Adviser, entered into a subscription agreement, which was subsequently increased to $33,677, to purchase shares of the Company’s common stock in a private placement. As of March 31, 2017, the Company has issued 1,080,638.533 shares of its common stock to GEMS Fund 4, L.P in exchange for aggregate capital contributions totaling $16,210.

During the three and six months ended March 31, 2017, GCIC SLF incurred an administrative service fee of $51 and $106, respectively, to reimburse the Administrator for expenses pursuant to an administrative and loan services agreement by and between GCIC SLF and the Administrator. During the three and six months ended March 31, 2016, GCIC SLF incurred an administrative service fee of $57 and $74, respectively, to reimburse the Administrator for expenses pursuant to an administrative and loan services agreement by and between GCIC SLF and the Administrator.

Note 5.    Investments

Investments as of March 31, 2017 and September 30, 2016 consisted of the following:
 
As of March 31, 2017
 
As of September 30, 2016
  
Principal
 
Amortized
Cost
 
Fair
Value
 
Principal
 
Amortized
Cost
 
Fair
Value
Senior secured
$
148,619

 
$
146,676

 
$
147,329

 
$
113,576

 
$
112,122

 
$
112,994

One stop
954,689

 
941,406

 
950,483

 
902,078

 
888,892

 
894,649

Subordinated debt
53

 
53

 
53

 
40

 
40

 
40

Subordinated notes in GCIC SLF(1)(2)

 

 

 
34,917

 
34,917

 
34,917

LLC equity interests in GCIC SLF(2)
N/A

 
51,340

 
52,423

 
 N/A

 
12,258

 
13,039

Equity
N/A

 
14,321

 
17,037

 
 N/A

 
13,147

 
14,071

Total
$
1,103,361

 
$
1,153,796

 
$
1,167,325

 
$
1,050,611

 
$
1,061,376

 
$
1,069,710

 
(1) 
On December 30, 2016, GCIC SLF issued a capital call in an aggregate amount of $39,905 the proceeds of which were used to redeem in full the outstanding balance on the subordinated notes previously issued by GCIC SLF and terminate all remaining subordinated note commitments.
(2) 
GCIC SLF’s proceeds from the subordinated notes and LLC equity interests invested in GCIC SLF were utilized by GCIC SLF to invest in senior secured loans.


43

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

The following tables show the portfolio composition by geographic region at amortized cost and fair value as a percentage of total investments in portfolio companies. The geographic composition is determined by the location of the corporate headquarters of the portfolio company, which may not be indicative of the primary source of the portfolio company’s business.
 
As of March 31, 2017
 
As of September 30, 2016
Amortized Cost:
  

 
  

 
  

 
  

United States
  

 
  

 
  

 
  

Mid-Atlantic
$
277,442

 
24.1
%
 
$
248,384

 
23.4
%
Midwest
284,344

 
24.6

 
275,157

 
25.9

West
105,656

 
9.2

 
104,238

 
9.8

Southeast
256,370

 
22.2

 
234,214

 
22.1

Southwest
97,298

 
8.4

 
73,563

 
6.9

Northeast
100,489

 
8.7

 
93,550

 
8.8

Canada
32,197

 
2.8

 
32,270

 
3.1

Total
$
1,153,796

 
100.0
%
 
$
1,061,376

 
100.0
%
 
 
 
 
 
 
 
 
Fair Value:
  

 
  

 
  

 
  

United States
  

 
  

 
  

 
  

Mid-Atlantic
$
281,544

 
24.1
%
 
$
250,798

 
23.4
%
Midwest
286,198

 
24.5

 
276,075

 
25.8

West
106,687

 
9.2

 
104,527

 
9.8

Southeast
259,522

 
22.2

 
237,168

 
22.2

Southwest
97,816

 
8.4

 
73,691

 
6.9

Northeast
102,815

 
8.8

 
94,897

 
8.9

Canada
32,743

 
2.8

 
32,554

 
3.0

Total
$
1,167,325

 
100.0
%
 
$
1,069,710

 
100.0
%



44

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

The industry compositions of the portfolio at amortized cost and fair value as of March 31, 2017 and September 30, 2016 were as follows:
 
As of March 31, 2017
 
As of September 30, 2016
 
Amortized Cost:
  

 
  
 
  

 
  
 
Aerospace and Defense
$
13,054

 
1.1
%
$
12,966

 
1.2
%
Automobile
48,082

 
4.2
 
51,568

 
4.9
 
Beverage, Food and Tobacco
53,162

 
4.7
 
36,875

 
3.5
 
Broadcasting and Entertainment
1,578

 
0.1
 
1,602

 
0.2
 
Buildings and Real Estate
10,036

 
0.9
 
8,452

 
0.8
 
Cargo Transport

 
 
1,752

 
0.2
 
Chemicals, Plastics and Rubber
1,077

 
0.1
 
33

 
0.0
*
Containers, Packaging and Glass

 
 
1,123

 
0.1
 
Diversified/Conglomerate Manufacturing
31,831

 
2.8
 
33,648

 
3.2
 
Diversified/Conglomerate Service
234,775

 
20.3
 
211,560

 
19.9
 
Ecological
15,329

 
1.3
 
15,371

 
1.4
 
Electronics
118,711

 
10.3
 
121,754

 
11.5
 
Grocery
294

 
0.0
*
302

 
0.0
*
Healthcare, Education and Childcare
233,349

 
20.2
 
195,880

 
18.5
 
Home and Office Furnishings, Housewares, and Durable Consumer
10,819

 
0.9
 
8,589

 
0.8
 
Hotels, Motels, Inns, and Gaming
385

 
0.0
*
388

 
0.0
*
Insurance
20,391

 
1.8
 
20,203

 
1.9
 
Investment Funds and Vehicles
51,340

 
4.4
 
47,175

 
4.4
 
Leisure, Amusement, Motion Pictures, Entertainment
27,524

 
2.4
 
17,344

 
1.6
 
Mining, Steel, Iron and Non-Precious Metals
199

 
0.0
*
199

 
0.0
*
Oil and Gas
4,791

 
0.4
 
4,855

 
0.5
 
Personal and Non Durable Consumer Products (Mfg. Only)
13,555

 
1.2
 
11,076

 
1.0
 
Personal, Food and Miscellaneous Services
84,505

 
7.3
 
77,862

 
7.3
 
Printing and Publishing
54,626

 
4.7
 
49,512

 
4.7
 
Retail Stores
105,715

 
9.2
 
119,983

 
11.3
 
Telecommunications
12,137

 
1.1
 
4,915

 
0.5
 
Textiles and Leather
1,888

 
0.2
 
1,729

 
0.2
 
Utilities
4,643

 
0.4
 
4,660

 
0.4
 
Total
$
1,153,796

 
100.0
%
$
1,061,376

 
100.0
%

* Represents an amount less than 0.1%


45

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

 
As of March 31, 2017
 
As of September 30, 2016
 
Fair Value:
  

 
  

 
  

 
  

 
Aerospace and Defense
$
12,980

 
1.1

%
$
12,668

 
1.2

%
Automobile
48,609

 
4.2

 
52,255

 
4.9

 
Beverage, Food and Tobacco
52,996

 
4.5

 
36,554

 
3.4

 
Broadcasting and Entertainment
1,617

 
0.1

 
1,643

 
0.2

 
Buildings and Real Estate
10,014

 
0.9

 
8,430

 
0.8

 
Cargo Transport

 

 
1,767

 
0.2

 
Chemicals, Plastics and Rubber
1,099

 
0.1

 
34

 
0.0

*
Containers, Packaging and Glass

 

 
1,124

 
0.1

 
Diversified/Conglomerate Manufacturing
31,576

 
2.7

 
32,805

 
3.1

 
Diversified/Conglomerate Service
238,429

 
20.4

 
213,978

 
20.0

 
Ecological
15,607

 
1.3

 
15,490

 
1.4

 
Electronics
120,978

 
10.4

 
122,838

 
11.5

 
Grocery
302

 
0.0

*
310

 
0.0

*
Healthcare, Education and Childcare
235,076

 
20.1

 
197,506

 
18.5

 
Home and Office Furnishings, Housewares, and Durable Consumer
10,339

 
0.9

 
7,963

 
0.7

 
Hotels, Motels, Inns, and Gaming
390

 
0.0

*
394

 
0.0

*
Insurance
20,841

 
1.8

 
20,564

 
1.9

 
Investment Funds and Vehicles
52,423

 
4.5

 
47,956

 
4.5

 
Leisure, Amusement, Motion Pictures and Entertainment
27,149

 
2.3

 
17,279

 
1.6

 
Mining, Steel, Iron and Non-Precious Metals
175

 
0.0

*
170

 
0.0

*
Oil and Gas
4,849

 
0.4

 
4,873

 
0.5

 
Personal and Non-Durable Consumer Products (Mfg. Only)
13,544

 
1.2

 
10,896

 
1.0

 
Personal, Food and Miscellaneous Services
86,117

 
7.4

 
79,117

 
7.4

 
Printing and Publishing
55,507

 
4.8

 
50,133

 
4.7

 
Retail Stores
107,664

 
9.2

 
121,386

 
11.3

 
Telecommunications
12,270

 
1.1

 
4,959

 
0.5

 
Textiles and Leather
1,925

 
0.2

 
1,768

 
0.2

 
Utilities
4,849

 
0.4

 
4,850

 
0.4

 
Total
$
1,167,325

 
100.0
%
%
$
1,069,710

 
100.0

%
* Represents an amount less than 0.1%.
GCIC Senior Loan Fund LLC:

The Company co-invests with Aurora National Life Assurance Company, a wholly-owned subsidiary of RGA Reinsurance Company (“Aurora”), in senior secured loans through GCIC SLF, an unconsolidated Delaware LLC. GCIC SLF is capitalized as transactions are completed and all portfolio and investment decisions in respect of GCIC SLF must be approved by the GCIC SLF investment committee consisting of two representatives of each of the Company and Aurora (with unanimous approval required from (i) one representative of each of the Company and Aurora or (ii) both representatives of each of the Company and Aurora). GCIC SLF may cease making new investments upon notification of either member but operations will continue until all investments have been sold or paid-off in the normal course of business. Investments held by GCIC SLF are measured at fair value by GCIC SLF using the same valuation methodologies as described in Note 7.

As of March 31, 2017, GCIC SLF is capitalized from LLC equity interest subscriptions from its members. On December 14, 2016, the GCIC SLF investment committee approved the recapitalization of the commitments of GCIC SLF's members. On December 30, 2016, GCIC SLF’s members entered into additional LLC equity interest subscriptions totaling $100,000, GCIC SLF issued capital calls to the Company and Aurora totaling $39,905 and the subordinated notes previously issued by GCIC SLF were redeemed and terminated. As of March 31, 2017 and September 30, 2016, the Company and Aurora owned 87.5% and 12.5%, respectively, of the LLC equity interests of GCIC SLF. GCIC SLF’s profits and losses are allocated to the Company and Aurora in accordance with their respective ownership interests. As of September 30, 2016, the Company and Aurora owned 87.5% and 12.5%, respectively, of the outstanding subordinated notes issued by GCIC SLF.


46

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

Additionally, GCIC SLF has entered into a senior secured revolving credit facility (as amended, the “GCIC SLF Credit Facility”) with Wells Fargo Bank, N.A. through its wholly-owned subsidiary GCIC Senior Loan Fund II LLC (“GCIC SLF II”), which as of March 31, 2017 allowed GCIC SLF II to borrow up to $150,000 at any one time outstanding, subject to leverage and borrowing base restrictions.

As of March 31, 2017 and September 30, 2016, GCIC SLF had the following commitments from its members:
 
As of March 31, 2017
 
As of September 30, 2016
  
Committed
 
Funded(1)
 
Committed
 
Funded
Subordinated note commitments (2)(3)
$

 
$

 
$
100,000

 
$
39,905

LLC equity commitments (3)
125,000

 
58,674

 
25,000

 
14,009

Total
$
125,000

 
$
58,674

 
$
125,000

 
$
53,914

 
(1) 
Funded LLC equity commitments are presented net of return of capital distributions subject to recall.
(2) 
The subordinated note commitments were terminated as of December 30, 2016.
(3) 
Commitments presented are combined for the Company and Aurora.
As of March 31, 2017 and September 30, 2016, GCIC SLF had total assets at fair value of $161,240 and $149,467, respectively. As of March 31, 2017 and September 30, 2016, GCIC SLF did not have any investments on non-accrual status. The portfolio companies in GCIC SLF are in industries similar to those in which the Company may invest directly. Additionally, as of March 31, 2017 and September 30, 2016, GCIC SLF had commitments to fund various undrawn revolvers and delayed draw investments to its portfolio companies totaling $7,208 and $10,725, respectively.

Below is a summary of GCIC SLF’s portfolio, followed by a listing of the individual investments in GCIC SLF’s portfolio as of March 31, 2017 and September 30, 2016:
 
As of
 
As of
  
March 31, 2017
 
September 30, 2016
Senior secured loans (1)
$
158,273

 
$
146,481

Weighted average current interest rate on senior secured loans (2)
6.2
%
 
6.0
%
Number of borrowers in GCIC SLF
43

 
41

Largest portfolio company investments (1)
$
8,973

 
$
8,346

Total of five largest portfolio company investments (1)
$
40,543

 
$
39,053

 
(1) 
At principal amount.
(2) 
Computed as the (a) annual stated interest rate on accruing senior secured loans divided by (b) total senior secured loans at principal amount.


47

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

GCIC SLF Investment Portfolio as of March 31, 2017
Portfolio Company
 
Business Description
 
Security Type
 
Maturity
Date
 
Current
Interest
Rate(1)
 
Principal ($)
 
Fair
Value(2)
1A Smart Start LLC
 
Home and Office Furnishings, Housewares, and Durable Consumer
 
Senior loan
 
02/2022
 
5.9
 
$
1,358

 
$
1,357

Accellos, Inc. (3)
 
Diversified/Conglomerate Service
 
Senior loan
 
07/2020
 
6.9
 
 
6,252

 
6,252

Aimbridge Hospitality, LLC (3)
 
Hotels, Motels, Inns, and Gaming
 
Senior loan
 
10/2018
 
5.8
 
 
2,406

 
2,406

American Seafoods Group LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
08/2021
 
6.0
 
 
2,971

 
2,971

Argon Medical Devices, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2021
 
5.9
 
 
3,133

 
3,133

Boot Barn, Inc.
 
Retail Stores
 
Senior loan
 
06/2021
 
5.6
 
 
5,568

 
5,568

Brandmuscle, Inc.
 
Printing and Publishing
 
Senior loan
 
12/2021
 
5.9
 
 
4,233

 
4,227

Certara L.P. (3)
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2018
 
6.6
 
 
3,698

 
3,671

Certara L.P. (4)
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2018
 
N/A
(5) 
 

 
(2
)
Checkers Drive-In Restaurants, Inc.
 
Beverage, Food and Tobacco
 
Senior loan
 
01/2022
 
6.6
 
 
3,725

 
3,697

CLP Healthcare Services, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
6.1
 
 
2,060

 
2,060

CLP Healthcare Services, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
6.1
 
 
1,038

 
1,038

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
6.5
 
 
2,106

 
2,106

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
6.5
 
 
1,059

 
1,059

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
6.5
 
 
59

 
59

Curo Health Services LLC (3)
 
Healthcare, Education and Childcare
 
Senior loan
 
02/2022
 
5.8
 
 
4,900

 
4,939

Encore GC Acquisition, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2020
 
6.6
 
 
2,119

 
2,119

Encore GC Acquisition, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2020
 
8.3
 
 
92

 
92

Express Oil Change, LLC
 
Retail Stores
 
Senior loan
 
12/2017
 
6.1
 
 
331

 
331

Express Oil Change, LLC
 
Retail Stores
 
Senior loan
 
12/2017
 
7.8
 
 
16

 
16

Flexan, LLC
 
Chemicals, Plastics and Rubber
 
Senior loan
 
02/2020
 
6.9
 
 
2,704

 
2,704

Flexan, LLC
 
Chemicals, Plastics and Rubber
 
Senior loan
 
02/2020
 
6.9
 
 
753

 
753

Gamma Technologies, LLC (3)
 
Electronics
 
Senior loan
 
06/2021
 
6.0
 
 
4,434

 
4,434

Harvey Tool Company, LLC
 
Diversified/Conglomerate Manufacturing
 
Senior loan
 
03/2020
 
6.1
 
 
1,995

 
1,995

III US Holdings, LLC
 
Diversified/Conglomerate Service
 
Senior loan
 
09/2022
 
7.2
 
 
5,166

 
5,166

Jensen Hughes, Inc.
 
Buildings and Real Estate
 
Senior loan
 
12/2021
 
6.4
 
 
2,009

 
2,009

Jensen Hughes, Inc.
 
Buildings and Real Estate
 
Senior loan
 
12/2021
 
6.0
 
 
89

 
89

Jensen Hughes, Inc.
 
Buildings and Real Estate
 
Senior loan
 
12/2021
 
6.0
 
 
56

 
56

Loar Group Inc.
 
Aerospace and Defense
 
Senior loan
 
01/2022
 
5.8
 
 
1,990

 
1,990

Pasternack Enterprises, Inc. and Fairview Microwave, Inc.
 
Diversified/Conglomerate Manufacturing
 
Senior loan
 
05/2022
 
6.0
 
 
3,807

 
3,807

PetVet Care Centers LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
12/2020
 
5.9
 
 
2,896

 
2,896

PetVet Care Centers LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
12/2020
 
5.9
 
 
602

 
602

PetVet Care Centers LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
12/2019
 
7.4
 
 
91

 
91

Polk Acquisition Corp. (3)
 
Automobile
 
Senior loan
 
06/2022
 
6.0
 
 
8,570

 
8,570

Polk Acquisition Corp.
 
Automobile
 
Senior loan
 
06/2022
 
6.0
 
 
54

 
54

Polk Acquisition Corp.
 
Automobile
 
Senior loan
 
06/2022
 
6.6
 
 
35

 
35

PowerPlan Holdings, Inc. (3)
 
Utilities
 
Senior loan
 
02/2022
 
5.8
 
 
7,494

 
7,494

Premise Health Holding Corp. (3)
 
Healthcare, Education and Childcare
 
Senior loan
 
06/2020
 
5.6
 
 
5,955

 
5,955

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2019
 
7.5
 
 
2,358

 
2,358

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2019
 
7.5
 
 
79

 
79

Radiology Partners, Inc. (3)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
6.9
 
 
7,131

 
7,131

Radiology Partners, Inc. (3)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
6.9
 
 
545

 
545

Radiology Partners, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
6.9
 
 
462

 
462

RSC Acquisition, Inc. (3)
 
Insurance
 
Senior loan
 
11/2022
 
6.4
 
 
3,340

 
3,340

RSC Acquisition, Inc.
 
Insurance
 
Senior loan
 
11/2020
 
5.8
 
 
15

 
15



48

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

GCIC SLF Investment Portfolio as of March 31, 2017 - (continued)
Portfolio Company
 
Business Description
 
Security Type
 
Maturity
Date
 
Current
Interest
Rate(1)
 
Principal ($)
 
Fair
Value(2)
Rubio's Restaurants, Inc
 
Beverage, Food and Tobacco
 
Senior loan
 
11/2018
 
5.9

 
$
1,685

 
$
1,685

Rug Doctor LLC
 
Personal and Non Durable Consumer Products (Mfg. Only)
 
Senior loan
 
06/2018
 
6.3

  
 
1,698

 
1,698

Saldon Holdings, Inc.
 
Diversified/Conglomerate Service
 
Senior loan
 
09/2021
 
5.5

 
 
2,103

 
2,103

Sarnova HC, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2022
 
5.8

 
 
3,317

 
3,317

SEI, Inc. (3)
 
Electronics
 
Senior loan
 
07/2021
 
5.8

  
 
5,244

 
5,243

Self Esteem Brands, LLC (3)
 
Leisure, Amusement, Motion Pictures, Entertainment
 
Senior loan
 
02/2020
 
5.8

  
 
6,729

 
6,662

Self Esteem Brands, LLC (4)
 
Leisure, Amusement, Motion Pictures, Entertainment
 
Senior loan
 
02/2020
 
 N/A

(5) 
 

 
(8
)
Severin Acquisition, LLC (3)
 
Diversified/Conglomerate Service
 
Senior loan
 
07/2021
 
6.0

  
 
7,888

 
7,809

Severin Acquisition, LLC
 
Diversified/Conglomerate Service
 
Senior loan
 
07/2021
 
6.1

  
 
1,085

 
1,078

Severin Acquisition, LLC (3)(4)
 
Diversified/Conglomerate Service
 
Senior loan
 
07/2021
 
 N/A

(5) 
 

 
(1
)
Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

  
 
5,537

 
5,426

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

  
 
437

 
429

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

 
 
436

 
427

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.6

 
 
435

 
426

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

  
 
434

 
425

Smashburger Finance LLC (4)
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
 N/A

(5) 
 

 
(14
)
Southern Anesthesia and Surgical
 
Healthcare, Education and Childcare
 
Senior loan
 
11/2017
 
6.6

  
 
187

 
187

Southern Anesthesia and Surgical
 
Healthcare, Education and Childcare
 
Senior loan
 
11/2017
 
6.6

  
 
117

 
117

Tate's Bake Shop, Inc.
 
Beverage, Food and Tobacco
 
Senior loan
 
08/2019
 
6.1

 
 
708

 
708

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior loan
 
10/2020
 
5.4

  
 
1,104

 
1,100

Transaction Data Systems, Inc.
 
Diversified/Conglomerate Service
 
Senior loan
 
06/2021
 
6.4

  
 
3,912

 
3,912

Young Innovations, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2019
 
6.1

  
 
755

 
755

Zest Holdings, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2020
 
5.9

  
 
4,708

 
4,708

  
 
 
 
 
 
 
 
 
 
 
$
158,273

 
$
157,921

 
(1) 
Represents the weighted average annual current interest rate as of March 31, 2017. All interest rates are payable in cash.
(2) 
Represents the fair value in accordance with ASC Topic 820. The determination of such fair value is not included in the Board's valuation process described elsewhere herein.
(3) 
The Company also holds a portion of the first lien senior secured loan in this portfolio company.
(4) 
The negative fair value is the result of the unfunded commitment being valued below par.
(5) 
The entire commitment was unfunded at March 31, 2017. As such, no interest is being earned on this investment. The investment may be subject to an unused facility fee.


49

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

GCIC SLF Investment Portfolio as of September 30, 2016
Portfolio Company
 
Business Description
 
Security Type
 
Maturity
Date
 
Current
Interest
Rate(1)
 
Principal ($)
 
Fair
Value(2)
1A Smart Start LLC
 
Home and Office Furnishings, Housewares, and Durable Consumer
 
Senior loan
 
02/2022
 
5.8

 
$
1,365

 
$
1,361

Aimbridge Hospitality, LLC
 
Hotels, Motels, Inns, and Gaming
 
Senior loan
 
10/2018
 
5.8

  
 
2,431

 
2,431

American Seafoods Group LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
08/2021
 
6.0

  
 
3,108

 
3,100

Argon Medical Devices, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2021
 
5.8

  
 
3,444

 
3,444

Boot Barn, Inc.
 
Retail Stores
 
Senior loan
 
06/2021
 
5.5

 
 
5,596

 
5,596

Brandmuscle, Inc.
 
Printing and Publishing
 
Senior loan
 
12/2021
 
5.8

  
 
4,255

 
4,246

C.B. Fleet Company, Incorporated
 
Personal and Non Durable Consumer Products
 
Senior loan
 
12/2021
 
5.8

  
 
8,346

 
8,346

Checkers Drive-In Restaurants, Inc.
 
Beverage, Food and Tobacco
 
Senior loan
 
01/2022
 
6.5

 
 
3,945

 
3,915

CLP Healthcare Services, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
6.3

  
 
1,043

 
1,043

CLP Healthcare Services, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
6.3

 
 
2,070

 
2,070

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
6.5

  
 
1,064

 
1,059

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
6.5

 
 
2,117

 
2,106

Curo Health Services LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
02/2022
 
6.5

  
 
4,925

 
4,940

Encore GC Acquisition, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2020
 
7.8

  
 
73

 
73

Encore GC Acquisition, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2020
 
6.3

  
 
2,130

 
2,130

Express Oil Change, LLC
 
Retail Stores
 
Senior loan
 
12/2017
 
6.0

  
 
340

 
340

Flexan, LLC
 
Chemicals, Plastics and Rubber
 
Senior loan
 
02/2020
 
6.3

  
 
2,718

 
2,718

Harvey Tool Company, LLC
 
Diversified/Conglomerate Manufacturing
 
Senior loan
 
03/2020
 
6.0

  
 
2,005

 
2,005

Jensen Hughes, Inc.
 
Diversified/Conglomerate Service
 
Senior loan
 
12/2021
 
6.2

  
 
56

 
56

Jensen Hughes, Inc.
 
Diversified/Conglomerate Service
 
Senior loan
 
12/2021
 
6.0

  
 
89

 
89

Jensen Hughes, Inc.
 
Diversified/Conglomerate Service
 
Senior loan
 
12/2021
 
6.3

 
 
2,014

 
2,014

Loar Group Inc.
 
Aerospace and Defense
 
Senior loan
 
01/2022
 
5.8

  
 
2,000

 
2,000

Mediaocean LLC
 
Diversified/Conglomerate Service
 
Senior loan
 
08/2022
 
5.8

  
 
2,025

 
2,025

Pasternack Enterprises, Inc. and Fairview Microwave, Inc (3)
 
Diversified/Conglomerate Manufacturing
 
Senior loan
 
05/2022
 
6.0

  
 
1,530

 
1,515

Pentec Acquisition Sub, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
05/2018
 
6.3

  
 
438

 
438

PetVet Care Centers LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
12/2020
 
5.8

  
 
605

 
605

PetVet Care Centers LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
12/2020
 
5.8

  
 
2,911

 
2,911

PowerPlan Holdings, Inc. (3)
 
Utilities
 
Senior loan
 
02/2022
 
5.8

 
 
7,521

 
7,521

PPT Management, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
04/2020
 
6.0

  
 
10

 
10

PPT Management, LLC (3)
 
Healthcare, Education and Childcare
 
Senior loan
 
04/2020
 
6.0

  
 
6,293

 
6,293

Premise Health Holding Corp. (3)
 
Healthcare, Education and Childcare
 
Senior loan
 
06/2020
 
5.5

 
 
5,985

 
5,985

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2019
 
7.8

  
 
90

 
90

Pyramid Healthcare, Inc. (3)
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2019
 
6.8

 
 
2,012

 
2,012

Radiology Partners, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
6.5

  
 
465

 
460

Radiology Partners, Inc. (3)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
6.5

  
 
728

 
722

Radiology Partners, Inc. (3)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
6.5

  
 
6,438

 
6,373

Radiology Partners, Inc. (4)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
N/A

(5) 
 

 
(5
)
Radiology Partners, Inc. (4)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
N/A

(5) 
 

 
(3
)
RSC Acquisition, Inc.
 
Insurance
 
Senior loan
 
11/2020
 
6.8

 
 
33

 
33

RSC Acquisition, Inc. (3)
 
Insurance
 
Senior loan
 
11/2022
 
6.3

  
 
148

 
148

RSC Acquisition, Inc. (3)
 
Insurance
 
Senior loan
 
11/2022
 
6.3

  
 
3,209

 
3,209

Rubio's Restaurants, Inc
 
Beverage, Food and Tobacco
 
Senior loan
 
11/2018
 
6.0

  
 
1,693

 
1,693

Rug Doctor LLC
 
Personal and Non Durable Consumer Products
 
Senior loan
 
06/2018
 
6.3

  
 
2,016

 
2,016

Saldon Holdings, Inc.
 
Diversified/Conglomerate Service
 
Senior loan
 
09/2021
 
5.5

  
 
2,186

 
2,186

Sarnova HC, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2022
 
5.8

  
 
3,334

 
3,334

SEI, Inc.
 
Electronics
 
Senior loan
 
07/2021
 
5.8

  
 
5,270

 
5,270



50

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

GCIC SLF Investment Portfolio as of September 30, 2016 – (continued)
Portfolio Company
 
Business Description
 
Security Type
 
Maturity
Date
 
Current
Interest
Rate(1)
 
Principal ($)
 
Fair
Value(2)
Self Esteem Brands, LLC
 
Leisure, Amusement, Motion Pictures and Entertainment
 
Senior loan
 
02/2020
 
5.0

 
$
5,106

 
$
5,106

Severin Acquisition, LLC (3)
 
Diversified/Conglomerate Service
 
Senior loan
 
07/2021
 
5.9

 
 
7,928

 
7,890

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

 
 
455

 
445

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

  
 
456

 
447

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

  
 
457

 
448

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

  
 
458

 
449

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

  
 
5,800

 
5,685

Smashburger Finance LLC (4)
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
N/A

(5) 
 

 
(14
)
Tate's Bake Shop, Inc. (3)
 
Beverage, Food and Tobacco
 
Senior loan
 
08/2019
 
6.0

 
 
712

 
712

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior loan
 
10/2020
 
5.3

  
 
1,104

 
1,100

Transaction Data Systems, Inc.
 
Diversified/Conglomerate Service
 
Senior loan
 
06/2020
 
5.5

  
 
9

 
8

Transaction Data Systems, Inc.
 
Diversified/Conglomerate Service
 
Senior loan
 
06/2021
 
6.3

 
 
2,763

 
2,763

Worldwide Express Operations, LLC
 
Cargo Transport
 
Senior loan
 
07/2019
 
6.0

 
 
100

 
100

Worldwide Express Operations, LLC (3)
 
Cargo Transport
 
Senior loan
 
07/2019
 
6.0

  
 
5,963

 
5,963

Young Innovations, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2018
 
6.8

  
 
10

 
10

Young Innovations, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2019
 
5.3

  
 
354

 
356

Zest Holdings, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2020
 
5.8

  
 
4,732

 
4,732

  
 
 
 
 
 
 
 
 
 
 
$
146,481

 
$
146,123

 
(1) 
Represents the weighted average annual current interest rate as of September 30, 2016. All interest rates are payable in cash.
(2) 
Represents the fair value in accordance with ASC Topic 820. The determination of such fair value is not included in the Board's valuation process described elsewhere herein.
(3) 
The Company also holds a portion of the first lien senior secured loan in this portfolio company.
(4) 
The negative fair value is the result of the unfunded commitment being valued below par.
(5) 
The entire commitment was unfunded at September 30, 2016. As such, no interest is being earned on this investment.
As of March 31, 2017, the Company has committed to fund $109,375 of LLC equity interest subscriptions to GCIC SLF. As of March 31, 2017 and September 30, 2016, $51,340 and $12,258, respectively, of the Company's LLC equity interest subscriptions to GCIC SLF had been called and contributed, net of return of capital distributions subject to recall. For the three and six months ended March 31, 2017, the Company received $1,242 and $1,663, respectively, in dividend income from the GCIC SLF LLC equity interests. For each of the three and six months ended March 31, 2016, the Company received $0 in dividend income from the GCIC SLF LLC equity interests.

As of September 30, 2016, the amortized cost and fair value of the GCIC SLF subordinated notes held by the Company was $34,917 and $34,917, respectively. As of September 30, 2016, the subordinated notes paid a weighted average interest rate of three-month LIBOR plus 8.0%. For the three and six months ended March 31, 2017, the Company earned interest income on the subordinated notes of $0 and $732, respectively. For the three and six months ended March 31, 2016, the Company earned interest income on the subordinated notes of $730 and $1,215, respectively.



51

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

See below for certain summarized financial information for GCIC SLF as of March 31, 2017 and September 30, 2016 and for the three and six months ended March 31, 2017 and 2016:
 
As of
 
As of
  
March 31, 2017
 
September 30, 2016
Selected Balance Sheet Information:
  

 
  

Investments, at fair value
$
157,921

 
$
146,123

Cash and other assets
3,319

 
3,344

Total assets
$
161,240

 
$
149,467

Senior credit facility
$
102,000

 
$
95,500

Unamortized debt issuance costs
(984
)
 
(1,122
)
Other liabilities
312

 
282

Total liabilities
101,328

 
94,660

Subordinated notes and members’ equity
59,912

 
54,807

Total liabilities and members' equity
$
161,240

 
$
149,467

 
Three months ended March 31,
 
Six months ended March 31,
  
2017
 
2016
 
2017
 
2016
Selected Statement of Operations Information:
  

 
  

 
 
 
 
Interest income
$
2,612

 
$
1,642

 
$
5,053

 
$
2,353

Total investment income
2,612

 
1,642

 
5,053

 
2,353

Interest expense
903

 
1,415

 
2,616

 
2,249

Administrative service fee
51

 
57

 
106

 
74

Other expenses
24

 
20

 
48

 
39

Total expenses
978

 
1,492

 
2,770

 
2,362

Net investment income (loss)
1,634

 
150

 
2,283

 
(9
)
Net change in unrealized appreciation (depreciation) on investments and subordinated notes
(99
)
 
558

 
(37
)
 
669

Net increase (decrease) in net assets
$
1,535

 
$
708

 
$
2,246

 
$
660


Note 6.    Transactions with Affiliated Companies

An affiliated company is generally a portfolio company in which the Company owns 5% or more of the portfolio company’s voting securities. A controlled affiliate is generally a portfolio company in which the Company owns more than 25% of the portfolio company’s outstanding voting securities. Transactions related to investments with controlled affiliates for the six months ended March 31, 2017 and 2016 were as follows:
For the six months ended March 31, 2017
Portfolio
Company
 
Fair value at September 30, 2016
 
Purchases
(cost)
 
Redemptions
(cost)
 
Discount
accretion
 
Net change in unrealized
gain/(loss)
 
Fair value at March 31, 2017
 
Net realized gain/(loss)
 
Interest and
fee income
 
Dividend
income
Controlled Affiliates
 
  

 
  

 
  

 
  

 
  

 
  

 
 
 
  

 
  

GCIC Senior Loan Fund LLC*
 
$
47,956

 
$
43,720

 
$
(39,555
)
 
$

 
$
302

 
$
52,423

 
$

 
$
732

 
$
1,663

Total Controlled Affiliates
 
$
47,956

 
$
43,720

 
$
(39,555
)
 
$

 
$
302

 
$
52,423

 
$

 
$
732

 
$
1,663

 
*
Together with Aurora, the Company co-invests through GCIC SLF. GCIC SLF is capitalized as transactions are completed and all portfolio and investment decisions in respect to GCIC SLF must be approved by the GCIC SLF investment committee consisting of two representatives of the Company and Aurora (with unanimous approval required from (i) one representative of each of the Company and Aurora or (ii) both representatives of each of the Company and Aurora). Therefore, although the Company owns more than 25% of the voting securities of GCIC SLF, the Company does not believe that it has control over GCIC SLF for purposes of the 1940 Act or otherwise.


52

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

For the six months ended March 31, 2016
Portfolio
Company
 
Fair value at September 30, 2015
 
Purchases
(cost)
 
Redemptions
(cost)
 
Discount
accretion
 
Net change in unrealized
gain/(loss)
 
Fair value at March 31, 2016
 
Net realized gain/(loss)
 
Interest and
fee income
 
Dividend
income
Controlled Affiliates
 
  

 
  

 
  

 
  

 
  

 
  

 
 
 
  

 
  

GCIC Senior Loan Fund LLC*
 
$

 
$
44,261

 
$

 
$

 
$
229

 
$
44,490

 
$

 
$
1,215

 
$

Total Controlled Affiliates
 
$

 
$
44,261

 
$

 
$

 
$
229

 
$
44,490

 
$

 
$
1,215

 
$

 
*
Together with Aurora, the Company co-invests through GCIC SLF. GCIC SLF is capitalized as transactions are completed and all portfolio and investment decisions in respect to GCIC SLF must be approved by the GCIC SLF investment committee consisting of two representatives of the Company and Aurora (with unanimous approval required from (i) one representative of each of the Company and Aurora or (ii) both representatives of each of the Company and Aurora). Therefore, although the Company owns more than 25% of the voting securities of GCIC SLF, the Company does not believe that it has control over GCIC SLF for purposes of the 1940 Act or otherwise.

Note 7.    Fair Value Measurements

The Company follows ASC Topic 820 for measuring fair value. Fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the assets or liabilities or market and the assets’ or liabilities’ complexity. The Company’s fair value analysis includes an analysis of the value of any unfunded loan commitments. Assets and liabilities are categorized for disclosure purposes based upon the level of judgment associated with the inputs used to measure their value. The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the asset or liability as of the measurement date. The three levels are defined as follows: 

Level 1:     Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2:     Inputs include quoted prices for similar assets or liabilities in active markets and inputs that are observable for the assets or liabilities, either directly or indirectly, for substantially the full term of the assets or liabilities.

Level 3:     Inputs include significant unobservable inputs for the assets or liabilities and include situations where there is little, if any, market activity for the assets or liabilities. The inputs into the determination of fair value are based upon the best information available and may require significant management judgment or estimation.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset’s or a liability’s categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The Company assesses the levels of assets and liabilities at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfers. There were no transfers among Level 1, 2 and 3 of the fair value hierarchy for assets and liabilities during the three and six months ended March 31, 2017 and 2016. The following section describes the valuation techniques used by the Company to measure different assets and liabilities at fair value and includes the level within the fair value hierarchy in which the assets and liabilities are categorized.



53

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

Investments

Level 1 investments are valued using quoted market prices. Level 2 investments are valued using market consensus prices that are corroborated by observable market data and quoted market prices for similar assets and liabilities. Level 3 investments are valued at fair value as determined in good faith by the Board, based on input of management, the audit committee and independent valuation firms that have been engaged at the direction of the Board to assist in the valuation of each portfolio investment without a readily available market quotation at least once during a trailing twelve-month period under a valuation policy and a consistently applied valuation process. This valuation process is conducted at the end of each fiscal quarter, with approximately 25% (based on the number of portfolio companies) of the Company’s valuations of debt and equity investments without readily available market quotations subject to review by an independent valuation firm. All investments as of March 31, 2017 and September 30, 2016, with the exception of money market funds included in cash and cash equivalents and restricted cash and cash equivalents (Level 1 investments) and investments measured at fair value using the NAV, were valued using Level 3 inputs of the fair value hierarchy.

When determining fair value of Level 3 debt and equity investments, the Company may take into account the following factors, where relevant: the enterprise value of a portfolio company, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons to publicly traded securities, and changes in the interest rate environment and the credit markets generally that may affect the price at which similar investments may be made and other relevant factors. The primary method for determining enterprise value uses a multiple analysis whereby appropriate multiples are applied to the portfolio company’s net income before net interest expense, income tax expense, depreciation and amortization (“EBITDA”). A portfolio company’s EBITDA may include pro-forma adjustments for items such as acquisitions, divestures, or expense reductions. The enterprise value analysis is performed to determine the value of equity investments and to determine if debt investments are credit impaired. If debt investments are credit impaired, the Company will use the enterprise value analysis or a liquidation basis analysis to determine fair value. For debt investments that are not determined to be credit impaired, the Company uses a market interest rate yield analysis to determine fair value.

In addition, for certain debt investments, the Company may base its valuation on indicative bid and ask prices provided by an independent third party pricing service. Bid prices reflect the highest price that the Company and others may be willing to pay. Ask prices represent the lowest price that the Company and others may be willing to accept. The Company generally uses the midpoint of the bid/ask range as its best estimate of fair value of such investment.

Due to the inherent uncertainty of determining the fair value of Level 3 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 used had a ready market existed for such investments and may differ materially from the values that may ultimately be received or settled. Further, such investments are generally subject to legal and other restrictions or otherwise are less liquid than publicly traded instruments. If the Company were required to liquidate a portfolio investment in a forced or liquidation sale, the Company may realize significantly less than the value at which such investment had previously been recorded.

The Company’s investments are subject to market risk. Market risk is the potential for changes in the value due to market changes. Market risk is directly impacted by the volatility and liquidity in the markets in which the investments are traded.


54

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 


The following tables present fair value measurements of the Company’s investments and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value as of March 31, 2017 and September 30, 2016:
As of March 31, 2017
 
Fair Value Measurements Using
Description
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets:
 
  

 
  

 
  

 
  

Debt investments(1)
 
$

 
$

 
$
1,097,865

 
$
1,097,865

Equity investments(1)
 

 

 
17,037

 
17,037

Money market funds(1)(2)
 
6,748

 

 

 
6,748

Investment measured at NAV(3)(4)
 

 

 

 
52,423

Total assets:
 
$
6,748

 
$

 
$
1,114,902

 
$
1,174,073

As of September 30, 2016
 
Fair Value Measurements Using
Description
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets:
 
  

 
  

 
  

 
  

Debt investments(1)
 
$

 
$

 
$
1,042,600

 
$
1,042,600

Equity investments(1)
 

 

 
14,071

 
14,071

Investment measured at NAV(3)(4)
 

 

 

 
13,039

Total assets:
 
$

 
$

 
$
1,056,671

 
$
1,069,710

 
(1) 
Refer to the Consolidated Schedules of Investments for further details.
(2) 
Included in cash and cash equivalents and restricted cash and cash equivalents on the Consolidated Statements of Financial Condition.
(3) 
Certain investments that are measured at fair value using the NAV have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated statements of financial condition.
(4) 
Represents the Company's investment in LLC equity interest in GCIC SLF. The fair value of this investment has been determined using the NAV of the Company’s ownership interest in members’ capital.
The net change in unrealized appreciation (depreciation) for the three and six months ended March 31, 2017 reported within the net change in unrealized appreciation (depreciation) on investments in the Company’s consolidated statements of operations attributable to the Company’s Level 3 assets held as of March 31, 2017 was $1,806 and $5,637, respectively.The net change in unrealized appreciation (depreciation) for the three and six months ended March 31, 2016 reported within the net change in unrealized appreciation (depreciation) on investments in the Company’s consolidated statements of operations attributable to the Company’s Level 3 assets held as of March 31, 2016 was $31 and $1,339, respectively.



55

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

The following tables present the changes in investments measured at fair value using Level 3 inputs for the six months ended March 31, 2017 and 2016:
 
For the six months ended March 31, 2017
  
Debt
Investments
 
Equity
Investments
 
Total
Investments
Fair value, beginning of period
$
1,042,600

 
$
14,071

 
$
1,056,671

Net change in unrealized appreciation (depreciation)
    on investments
3,101

 
1,792

 
4,893

Realized gain (loss) on investments
331

 

 
331

Proceeds from (funding of) revolving loans, net
829

 

 
829

Fundings of investments
174,921

 
1,406

 
176,327

PIK interest
565

 

 
565

Proceeds from principal payments and sales of portfolio
    investments
(91,944
)
 
(232
)
 
(92,176
)
Noncash proceeds from subordinated notes in GCIC SLF
    principal payments
(34,917
)
 

 
(34,917
)
Accretion of discounts and amortization of premiums
2,379

 

 
2,379

Fair value, end of period
$
1,097,865

 
$
17,037

 
$
1,114,902


 
For the six months ended March 31, 2016
  
Debt
Investments
 
Equity
Investments
 
Total
Investments
Fair value, beginning of period
$
546,757

 
$
5,121

 
$
551,878

Net change in unrealized appreciation (depreciation)
    on investments
478

 
(23
)
 
455

Realized gain (loss) on investments
733

 

 
733

Proceeds from (funding of) revolving loans, net
2,165

 

 
2,165

Fundings of investments
322,969

 
1,868

 
324,837

PIK interest
48

 

 
48

Proceeds from principal payments and sales of portfolio
    investments
(189,036
)
 
(40
)
 
(189,076
)
Accretion of discounts and amortization of premiums
1,403

 

 
1,403

Fair value, end of period
$
685,517

 
$
6,926

 
$
692,443



56

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

The following tables present quantitative information about the significant unobservable inputs of the Company’s Level 3 investments as of March 31, 2017 and September 30, 2016:
Quantitative information about Level 3 Fair Value Measurements
 
Fair value as of March 31, 2017
 
Valuation Techniques
 
Unobservable Input
 
Range (Weighted Average)
Assets:
  

 
  
 
  
 
  
Senior secured loans(1)
$
139,632

 
Market rate approach
 
Market interest rate
 
4.2% - 11.0% (6.8%)
  
  

 
Market comparable companies
 
EBITDA multiples
 
6.0x - 17.5x (11.7x)
 
7,697

 
Market comparable
 
Broker/dealer bids or quotes
 
N/A
One stop loans(1)(2)
$
950,467

 
Market rate approach
 
Market interest rate
 
5.5% - 33.3% (7.9%)
  
 
 
Market comparable companies
 
EBITDA multiples (3)
 
2.6x - 35.4x (12.9x)
  
  
 
  
 
Revenue multiples (3)
 
2.0x - 7.5x (5.1x)
Subordinated debt(1)
$
53

 
Market rate approach
 
Market interest rate
 
19.5%
  
  

 
Market comparable companies
 
EBITDA multiples
 
9.5x
Equity (4)
$
17,037

 
Market comparable companies
 
EBITDA multiples(5)
 
4.0x - 21.5x (13.3x)
  
  
 
  
 
Revenue multiples(5)
 
3.0x - 5.0x (4.0x)
 
(1) 
The fair value of this asset class was determined using the market rate approach as the investments in this asset class were determined not to be credit impaired using the market comparable companies approach. The unobservable inputs for both valuation techniques have been presented, but the fair value as of March 31, 2017 was determined using the market rate approach.
(2) 
Excludes $16 of non-accrual loans at fair value, which the Company valued on a liquidation basis.
(3) 
The Company valued $892,839 and $57,628 of one stop loans using EBITDA and revenue multiples, respectively. All one stop loans were also valued using the market rate approach.
(4) 
Excludes $52,423 of LLC equity interests in GCIC SLF at fair value, which the Company valued using the NAV.
(5) 
The Company valued $15,437 and $1,600 of equity investments using EBITDA and revenue multiples, respectively.



57

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

Quantitative information about Level 3 Fair Value Measurements
 
Fair value as of September 30, 2016
 
Valuation Techniques
 
Unobservable Input
 
Range
(Weighted Average)
Assets:
  

 
  
 
  
 
  
Senior secured loans (1)
$
105,395

 
Market rate approach
 
Market interest rate
 
4.5% - 9.3% (6.4%)
  
  

 
Market comparable companies
 
EBITDA multiples
 
6.0x - 17.5x (11.8x)
 
7,599

 
Market comparable
 
Broker/dealer bids or quotes
 
N/A
Subordinated Notes of GCIC SLF
$
34,917

 
Discounted cash flow analysis
 
Discount rate
 
8.2%
One stop loans (1)(2)
$
894,633

 
Market rate approach
 
Market interest rate
 
5.5% - 23.5% (7.8%)
  
 
 
Market comparable companies
 
EBITDA multiples (3)
 
4.0x - 35.4x (12.8x)
  
  
 
  
 
Revenue multiples (3)
 
2.0x - 7.5x (5.0x)
Subordinated debt (1)
$
40

 
Market rate approach
 
Market interest rate
 
19.5%
  
  

 
Market comparable companies
 
EBITDA multiples
 
9.3x
Equity (4)
$
14,071

 
Market comparable companies
 
EBITDA multiples (5)
 
7.5x - 19.4x (12.9x)
  
  
 
  
 
Revenue multiples (5)
 
2.0x - 5.5x (3.9x)
 
(1) 
The fair value of this asset class was determined using the market rate approach as the investments in this asset class were determined not to be credit impaired using the market comparable companies approach. The unobservable inputs for both valuation techniques have been presented, but the fair value as of September 30, 2016 was determined using the market rate approach.
(2) 
Excludes $16 of non-accrual loans at fair value, which the Company valued on a liquidation basis.
(3) 
The Company valued $837,035 and $57,598 of one stop loans using EBITDA and revenue multiples, respectively. All one stop loans were also valued using the market rate approach.
(4) 
Excludes $13,039 of LLC equity interests in GCIC SLF at fair value, which the Company valued using the NAV.
(5) 
The Company valued $12,546 and $1,525 of equity investments using EBITDA and revenue multiples, respectively.
The above tables are not intended to be all-inclusive but rather to provide information on significant unobservable inputs and valuation techniques used by the Company.

The significant unobservable inputs used in the fair value measurement of the Company’s debt and equity investments are EBITDA multiples, revenue multiples and market interest rates. The Company uses EBITDA multiples and, to a lesser extent, revenue multiples on its debt and equity investments to determine any credit gains or losses. Increases or decreases in either of these inputs in isolation may result in a significantly lower or higher fair value measurement. The Company uses market interest rates for loans to determine if the effective yield on a loan is commensurate with the market yields for that type of loan. If a loan’s effective yield is significantly less than the market yield for a similar loan with a similar credit profile, then the resulting fair value of the loan may be lower.

Other Financial Assets and Liabilities

ASC Topic 820 requires disclosure of the fair value of financial instruments for which it is practical to estimate such value. As a result, with the exception of the line item titled “debt” which is reported at cost, all assets and liabilities approximate fair value on the consolidated statements of financial condition due to their short maturity. Fair value of the Company’s debt is estimated using Level 3 inputs by discounting remaining payments using comparable market rates or market quotes for similar instruments at the measurement date, if available.



58

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

The following are the carrying values and fair values of the Company’s debt as of March 31, 2017 and September 30, 2016. Fair value is estimated by discounting remaining payments using applicable market rates or market quotes for similar instruments at the measurement date, if available.
 
As of March 31, 2017
 
As of September 30, 2016
  
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Debt
$
571,900

 
$
571,900

 
$
520,600

 
$
520,371


Note 8.    Borrowings

In accordance with the 1940 Act, with certain limited exceptions, the Company is only allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 200% after such borrowing. As of March 31, 2017 the Company’s asset coverage for borrowed amounts was 210.1%.

Debt Securitization: On August 16, 2016, the Company completed a $410,086 term debt securitization (the “GCIC 2016 Debt Securitization”). The notes (“GCIC 2016 Notes”) offered in the GCIC 2016 Debt Securitization were issued by the GCIC 2016 Issuer and are secured by a diversified portfolio of senior secured and second lien loans held by the GCIC 2016 Issuer. The GCIC 2016 Debt Securitization consists of $220,000 of Aaa/AAA Class A GCIC 2016 Notes and $32,500 of Aa1 Class B GCIC 2016 Notes. In partial consideration for the loans transferred to the GCIC 2016 Issuer as part of the GCIC 2016 Debt Securitization, the Company received $42,300 of Class C GCIC 2016 Notes, $28,600 of Class D GCIC 2016 Notes and $86,686 of LLC equity interests in the GCIC 2016 Issuer. The Company retained all of the Class C GCIC 2016 Notes, Class D GCIC 2016 Notes and LLC equity interests totaling $42,300, $28,600 and $86,686, respectively. The Class A and Class B GCIC 2016 Notes are included in the March 31, 2017 and September 30, 2016 consolidated statements of financial condition as debt of the Company. As of March 31, 2017 and September 30, 2016, the Class C GCIC 2016 Notes, Class D GCIC 2016 Notes and LLC equity interests were eliminated in consolidation.

Through August 8, 2020, all principal collections received on the underlying collateral may be used by the GCIC 2016 Issuer to purchase new collateral under the direction of the Investment Adviser in its capacity as collateral manager of the GCIC 2016 Issuer and in accordance with the Company’s investment strategy, allowing the Company to maintain the initial leverage in the GCIC 2016 Debt Securitization. The GCIC 2016 Notes are scheduled to mature on August 8, 2028.

As of March 31, 2017 and September 30, 2016, there were 104 and 100 portfolio companies with a total fair value of $396,620 and $346,494, respectively, securing the GCIC 2016 Notes. The pool of loans in the GCIC 2016 Debt Securitization must meet certain requirements, including asset mix and concentration, collateral coverage, term, agency rating, minimum coupon, minimum spread and sector diversity requirements.



59

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

The interest charged under the GCIC 2016 Debt Securitization is based on three-month LIBOR, which as of March 31, 2017 was 1.04%. For the three and six months ended March 31, 2017 and 2016, the components of interest expense, cash paid for interest, annualized average interest rates and average outstanding balances for the GCIC 2016 Debt Securitization were as follows:
 
For the three months ended March 31,
 
For the six months ended March 31,
  
2017
 
2016
 
2017
 
2016
Stated interest expense
$
2,083

 
N/A
 
$
4,037

 
N/A
Amortization of debt issuance costs
188

 
N/A
 
379

 
N/A
Total interest and other debt financing expenses
$
2,271

 
N/A
 
$
4,416

 
N/A
Cash paid for interest expense
$
3,811

 
N/A
 
$
3,811

 
N/A
Annualized average stated interest rate
3.3
%
 
N/A
 
3.2
%
 
N/A
Average outstanding balance
$
252,500

 
N/A
 
$
252,500

 
N/A

As of March 31, 2017, the classes, amounts, ratings and interest rates (expressed as a spread to three-month LIBOR) of the Class A and B GCIC 2016 Notes were as follows:
Description
 
Class A GCIC 2016 Notes
 
Class B GCIC 2016 Notes
Type
 
Senior Secured Floating Rate
 
Senior Secured Floating Rate
Amount Outstanding
 
$220,000
 
$32,500
Moody’s Rating
 
“Aaa”
 
“Aa1”
S&P Rating
 
“AAA”
 
N/A
Interest Rate
 
LIBOR + 2.15%
 
LIBOR + 3.00%
Stated Maturity
 
August 8, 2028
 
August 8, 2028

The Investment Adviser serves as collateral manager to the GCIC 2016 Issuer under a separate collateral management agreement and receives a fee for providing these services. The total fees payable by the Company under its Investment Advisory Agreement is reduced by an amount equal to the total aggregate fees that are paid to the Investment Adviser by the GCIC 2016 Issuer for rendering such collateral management services.

As part of the GCIC 2016 Debt Securitization, the Company entered into a master loan sale agreement under which the Company agreed to directly or indirectly sell or contribute certain senior secured and second lien loans (or participation interests therein) to the GCIC 2016 Issuer and to purchase or otherwise acquire the Class C GCIC 2016 Notes, Class D GCIC 2016 Notes and LLC equity interests in the GCIC 2016 Issuer. The GCIC 2016 Notes are the secured obligations of the GCIC 2016 Issuer and indentures governing the GCIC 2016 Notes include customary covenants and events of default. The pool of loans in the GCIC 2016 Debt Securitization must meet certain requirements, including asset mix and concentration, collateral coverage, term, agency rating, minimum coupon, minimum spread and sector diversity requirements.

Revolving Credit Facility: On December 31, 2014, as part of the Company’s acquisition of GCIC Funding as part of its formation transactions, the Company and GCIC Funding entered into an amendment to the senior secured revolving credit facility (as amended, the “Credit Facility”) with Wells Fargo Securities, LLC, as administrative agent, and Wells Fargo Bank, N.A., as lender, which as of March 31, 2017 allowed GCIC Funding to borrow up to $420,000 at any one time outstanding, subject to leverage and borrowing base restrictions.



60

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

Through the reinvestment period, which ends May 12, 2017, the Credit Facility bears interest at one-month LIBOR plus 2.25% per annum. After the reinvestment period, the rate will reset to one-month LIBOR plus 2.75% per annum for the remaining term of the Credit Facility. In addition to the stated interest expense on the Credit Facility, the Company is required to pay a non-usage fee rate between 0.50% and 2.00% per annum depending on the size of the unused portion of the Credit Facility. The stated maturity date of the Credit Facility is May 13, 2020.

On March 9, 2016 the Credit Facility was amended to, among other things, make certain amendments to the computation of the borrowing base restrictions in the Credit Facility. The maximum borrowing capacity under the Credit Facility, the expiration of the reinvestment period and the stated maturity date of the Credit Facility did not change in connection with this amendment.

On July 12, 2016, the Company and GCIC Funding amended the Credit Facility to, among other things, increase the size of the Credit Facility from $370,000 to $420,000.

The Credit Facility is collateralized by all of the assets held by GCIC Funding, and GCIC has pledged its interests in GCIC Funding as collateral to Wells Fargo Bank, N.A., as the collateral agent, under an ancillary agreement to secure the obligations of GCIC as the transferor and servicer under the Credit Facility. Both GCIC and GCIC Funding have made customary representations and warranties and are required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities. Borrowing under the Credit Facility is subject to the leverage restrictions contained in the 1940 Act.

The Company has transferred certain loans and debt securities it has originated or acquired from time to time to GCIC Funding through a purchase and sale agreement and may cause GCIC Funding to originate or acquire loans in the future, consistent with the Company’s investment objectives.

As of March 31, 2017 and September 30, 2016, the Company had outstanding debt under the Credit Facility of $270,200 and $193,100, respectively. For the three and six months ended March 31, 2017, the Company had borrowings on the Credit Facility of $95,900 and $168,550, respectively, and repayments on the Credit Facility of $16,250 and $91,450, respectively. For the three and six months ended March 31, 2016, the Company had borrowings on the Credit Facility of $185,650 and $258,450, respectively, and repayments on the Credit Facility of $104,550 and $204,250, respectively.

For the three and six months ended March 31, 2017 and 2016, the components of interest expense, cash paid for interest and facility fees, annualized average interest rates and average outstanding balances for the Credit Facility were as follows:
 
For the three months ended March 31,
 
For the six months ended March 31,
  
2017
 
2016
 
2017
 
2016
Stated interest expense
$
1,755

 
$
1,771

 
$
3,110

 
$
3,343

Facility fees
240

 
138

 
540

 
296

Amortization of debt issuance costs
623

 
486

 
1,260

 
964

Total interest and other debt financing expenses
$
2,618

 
$
2,395

 
$
4,910

 
$
4,603

Cash paid for interest expense and facility fees
$
1,853

 
$
1,835

 
$
3,449

 
$
3,508

Annualized average stated interest rate
3.1
%
 
2.7
%
 
3.0
%
 
2.6
%
Average outstanding balance
$
227,686

 
$
261,421

 
$
206,479

 
$
253,547




61

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

Revolver: On February 3, 2015, the Company entered into the Revolver with the Investment Adviser, with a maximum credit limit of $40,000 and expiration date of February 3, 2018. The Revolver bears an interest rate equal to the short-term Applicable Federal Rate (“AFR”), which was 1.0% as of March 31, 2017. As of March 31, 2017 and September 30, 2016, the Company had no outstanding debt under the Revolver. For the three and six months ended March 31, 2017, the Company had borrowings on the Revolver of $0 and $0 and repayments on the Revolver of $0 and $0, respectively. For the three and six months ended March 31, 2016, the Company had borrowings on the Revolver of $4,000 and $65,800 and repayments on the Revolver of $4,000 and $65,800, respectively.

For the three and six months ended March 31, 2017 and 2016, the components of interest expense, cash paid for interest, annualized average interest rates and average outstanding balances for the Revolver were as follows:
 
For the three months ended March 31,
 
For the six months ended March 31,
  
2017
 
2016
 
2017
 
2016
Stated interest expense
$

 
$
1

 
$

 
$
7

Cash paid for interest expense
$

 
$
7

 
$

 
$
7

Annualized average stated interest rate
N/A
 
0.8
%
 
N/A
 
0.6
%
Average outstanding balance
$

 
$
712

 
$

 
$
2,491


SMBC Revolver: On May 17, 2016, the Company entered into a revolving credit agreement with Sumitomo Mitsui Banking Corporation (the “SMBC Revolver”), which as of March 31, 2017 allowed GCIC to borrow up to $75,000 at any one time outstanding, subject to leverage and borrowing base restrictions, with a stated maturity date of May 17, 2018.

The SMBC Revolver bears an interest rate at the Company's election of either one-month LIBOR plus 1.60% per annum or Prime. In addition to the stated interest rate on the SMBC Revolver, the Company is required to pay a non-usage fee at a rate of 0.25% per annum on the unused portion of the SMBC Revolver.

The SMBC Revolver is secured by the unfunded capital commitments of certain GCIC stockholders. GCIC has made customary representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities. Borrowing under the SMBC Revolver is subject to the leverage restrictions contained in the 1940 Act.

As of March 31, 2017 and September 30, 2016, the Company had outstanding debt under the SMBC Revolver of $49,200 and $75,000, respectively. For the three and six months ended March 31, 2017, the Company had borrowings on the SMBC Revolver of $19,200 and $19,200, respectively, and repayments on the SMBC Revolver of $45,000 and $45,000, respectively. The SMBC Revolver was not in existence for the three and six months ended March 31, 2016.



62

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

For the three and six months ended March 31, 2017 and 2016, the components of interest expense, cash paid for interest, annualized average interest rates and average outstanding balances for the SMBC Revolver were as follows:
 
For the three months ended March 31,
 
For the six months ended March 31,
  
2017
 
2016
 
2017
 
2016
Stated interest expense
$
353

 
N/A
 
$
767

 
N/A
Amortization of debt issuance costs
71

 
N/A
 
142

 
N/A
Total interest and other debt financing expenses
$
424

 
N/A
 
$
909

 
N/A
Cash paid for interest expense
$
353

 
N/A
 
$
787

 
N/A
Annualized average stated interest rate
2.5
%
 
N/A

2.3
%
 
N/A
Average outstanding balance
$
58,336

 
N/A
 
$
66,759

 
N/A

The Company’s average total debt outstanding (including the debt under the Credit Facility, Revolver, SMBC Revolver, and GCIC 2016 Debt Securitization) for the three and six months ended March 31, 2017 was $538,522 and $525,738, respectively. The Company’s average total debt outstanding (including the debt under the Credit Facility and Revolver) for the three and six months ended March 31, 2016 was $262,133 and $256,038, respectively.

For the three and six months ended March 31, 2017, the effective annualized average interest rate, which includes amortization of debt issuance costs and non-usage facility fees, on the Company’s total debt outstanding was 4.0% and 3.9%, respectively. For the three and six months ended March 31, 2016, the effective annualized average interest rate, which includes amortization of debt issuance costs and non-usage facility fees, on the Company’s total debt outstanding was 3.7% and 3.6%, respectively.

A summary of the Company’s maturity requirements for borrowings as of March 31, 2017 is as follows:
 
Payments Due by Period
  
Total
 
Less Than
1 Year
 
1 – 3 Years
 
3 – 5 Years
 
More Than
5 Years
GCIC 2016 Debt Securitization
$
252,500

 
$

 
$

 
$

 
$
252,500

Credit Facility
270,200

 

 

 
270,200

 

SMBC Revolver
49,200

 

 
49,200

 

 

Revolver

 

 

 

 

Total borrowings
$
571,900

 
$

 
$
49,200

 
$
270,200

 
$
252,500


Note 9.    Commitments and Contingencies

Commitments: The Company had outstanding commitments to fund investments totaling $54,205 and $42,747 under various undrawn revolvers and other credit facilities as of March 31, 2017 and September 30, 2016, respectively. In addition, as described in Note 5, the Company had commitments of up to $58,035 and $62,200 to GCIC SLF as of March 31, 2017 and September 30, 2016, respectively, that may be contributed primarily for the purpose of funding new investments approved by the GCIC SLF investment committee.

Indemnifications: In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties that provide general indemnifications. The Company’s maximum exposure under these arrangements is unknown, as these involve future claims that


63

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

may be made against the Company but that have not occurred. The Company expects the risk of any future obligations under these indemnifications to be remote.

Off-balance sheet risk: Off-balance sheet risk refers to an unrecorded potential liability that may result in a future obligation or loss, even though it does not appear on the consolidated statements of financial condition. The Company may enter into derivative instruments that contain elements of off-balance sheet market and credit risk. There were no commitments outstanding for derivative contracts as of March 31, 2017 and September 30, 2016. Derivative instruments can be affected by market conditions, such as interest rate volatility, which could impact the fair value of the derivative instruments. If market conditions move against the Company, it may not achieve the anticipated benefits of any derivative instruments and may realize a loss. The Company minimizes market risk through monitoring its investments and borrowings.

Concentration of credit and counterparty risk: Credit risk arises primarily from the potential inability of counterparties to perform in accordance with the terms of the contract. The Company may engage in derivative transactions with counterparties. In the event that the counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counterparties or issuers of the instruments. The Company’s maximum loss that it could incur related to counterparty risk on derivative instruments is the value of the collateral for that respective derivative instrument. It is the Company’s policy to review, as necessary, the credit standing of each counterparty.

Legal proceedings: In the normal course of business, the Company may be subject to legal and regulatory proceedings that are generally incidental to its ongoing operations. While there can be no assurance of the ultimate disposition of any such proceedings, the Company does not believe any disposition will have a material adverse effect on the Company’s consolidated financial statements.



64

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

Note 10. Financial Highlights

The financial highlights for the Company are as follows:
 
 
Six months ended March 31,
Per share data:(1)
 
2017
 
2016
Net asset value at beginning of period
 
$
15.00

 
$
15.00

Distributions declared:(2)
 
 
 
 
From net investment income
 
(0.65
)
 
(0.58
)
From capital gains
 
0.00

(3) 

Net investment income
 
0.52

 
0.51

Net realized gain (loss) on investments
 

 
0.03

Net change in unrealized appreciation (depreciation) on investments
 
0.13

 
0.04

Net asset value at end of period
 
$
15.00

 
$
15.00

Per share net asset value at end of period
 
$
15.00

 
$
15.00

Total return based on net asset value per share(4)
 
4.41
%
 
3.90
%
Number of common shares outstanding
 
42,104,997.486

 
27,261,737.139

 
 
Six months ended March 31,
Listed below are supplemental data and ratios to the financial highlights:
 
2017
 
2016
Ratio of net investment income to average net assets*
 
7.01
 %
 
6.81
 %
Ratio of total expenses to average net assets (5)*
 
7.11
 %
 
6.01
 %
Ratio of management fee waiver to average net assets *
 
(0.67
)%
 
(0.63
)%
Ratio of incentive fee waiver to average net assets
 
 %
 
N/A

Ratio of net expenses to average net assets (5)*
 
6.44
 %
 
5.38
 %
Ratio of incentive fees to average net assets
 
0.80
 %
 
0.55
 %
Ratio of total expenses (without incentive fees, incentive fee waiver and management fee waiver) to average net assets*
 
6.31
 %
 
5.46
 %
Net assets at end of period
 
$
631,575

 
$
408,926

Average debt outstanding
 
$
525,738

 
$
256,038

Average debt outstanding per share
 
$
12.49

 
$
9.39

Asset coverage ratio(6)
 
210.08
 %
 
234.33
 %
Portfolio turnover *
 
17.47
 %
 
61.96
 %
 
* Annualized for a period less than one year.
(1) 
Based on actual number of shares outstanding at the end of the corresponding period or the weighted average shares outstanding for the period, unless otherwise noted, as appropriate.
(2) 
The per share data for distributions reflect the amount of distributions paid or payable with a record date during the applicable period.
(3) 
Represents an amount less than $0.01 per share.
(4) 
Total return based on net asset value assumes distributions are reinvested in accordance with the DRIP. Total return does not include sales load.
(5) 
Expenses, other than incentive fees, are annualized for a period less than one year.
(6) 
In accordance with the 1940 Act, with certain limited exceptions, the Company is only allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 200% after such borrowing.



65

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

Note 11. Earnings Per Share

The following information sets forth the computation of the net increase in net assets per share resulting from operations for the three and six months ended March 31, 2017 and 2016:
 
Three months ended March 31,
 
Six months ended March 31,
  
2017
 
2016
 
2017
 
2016
Earnings available to stockholders
$
12,694

 
$
7,294

 
$
27,274

 
$
13,952

Basic and diluted weighted average shares outstanding
41,892,513

 
25,707,003

 
41,569,032

 
23,916,838

Basic and diluted earnings per share
$
0.30

 
$
0.28

 
$
0.65

 
$
0.58



Note 12. Dividends and Distributions

The Company’s dividends and distributions are recorded on the record date. The following table summarizes the Company’s dividend declarations and distributions during the six months ended March 31, 2017 and 2016:
Date Declared
 
Record Date
 
Payment Date
 
Shares Outstanding
 
Amount Per Share
 
Cash Distribution
 
DRIP Shares Value
 
DRIP Shares Issued
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the six months ended March 31, 2017
 
 
 
 
 
 
 
 
08/03/2016
 
10/24/2016
 
12/30/2016
 
41,087,178.250

 
$
0.0729

 
$
1,366

 
$
1,627

 
108,467.710

11/14/2016
 
11/18/2016
 
12/30/2016
 
41,087,178.250

 
$
0.1469

 
$
2,754

 
$
3,280

 
218,653.262

11/14/2016
 
12/26/2016
 
02/27/2017
 
41,442,374.044

 
$
0.1340

 
$
2,563

 
$
2,990

 
199,352.082

11/14/2016
 
01/23/2017
 
02/27/2017
 
41,769,495.016

 
$
0.0902

 
$
1,727

 
$
2,042

 
136,150.388

02/07/2017
 
02/20/2017
 
05/19/2017
 
41,769,495.016

 
$
0.1050

 
$
2,080

 
$
2,305

 
N/A (1)

02/07/2017
 
03/24/2017
 
05/19/2017
 
42,104,997.486

 
$
0.1078

 
$
2,138

 
$
2,402

 
N/A (1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the six months ended March 31, 2016
 
 
 
 
 
 
 
 
08/04/2015
 
10/27/2015
 
12/30/2015
 
20,843,155.219

 
$
0.0818

 
$
744

 
$
961

 
64,075.512

11/17/2015
 
11/19/2015
 
12/30/2015
 
22,172,613.752

 
$
0.1252

 
$
1,213

 
$
1,563

 
104,219.497

11/17/2015
 
12/17/2015
 
02/26/2016
 
24,433,662.992

 
$
0.0891

 
$
950

 
$
1,228

 
81,866.709

11/17/2015
 
01/22/2016
 
02/26/2016
 
24,601,958.001

 
$
0.0957

 
$
1,019

 
$
1,335

 
88,981.506

02/08/2016
 
02/22/2016
 
05/20/2016
 
24,601,958.001

 
$
0.0705

 
$
876

 
$
858

 
N/A (2)

02/08/2016
 
03/24/2016
 
05/20/2016
 
27,261,737.139

 
$
0.1176

 
$
1,596

 
$
1,609

 
N/A (2)

 
(1) 
The DRIP shares were not issued as of March 31, 2017.
(2) 
The DRIP shares were not issued as of March 31, 2016. On May 20, 2016, the Company issued 164,469.664 of shares through the DRIP.



66

Golub Capital Investment Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(In thousands, except shares and per share data)
 
 
 

Note 13. Subsequent Events

In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through May 11, 2017, the date the financial statements were available to be issued. There are no subsequent events to disclose except for the following:

On February 7, 2017 and May 4, 2017, the board of directors declared distributions to holders of record as set forth in the table below:

Record Date
 
Payment Date
 
Amount Per Share
April 30, 2017
 
July 28, 2017
 
Net increase in net assets resulting from operations earned by the Company (if positive) as determined in accordance with GAAP for the period April 1, 2017 through April 30, 2017 per share
May 18, 2017
 
July 28, 2017
 
Net increase in net assets resulting from operations earned by the Company (if positive) as determined in accordance with GAAP for the period May 1, 2017 through May 31, 2017 per share
June 16, 2017
 
July 28, 2017
 
Net increase in net assets resulting from operations earned by the Company (if positive) as determined in accordance with GAAP for the period June 1, 2017 through June 30, 2017 per share
July 21, 2017
 
September 25, 2017
 
Net increase in net assets resulting from operations earned by the Company (if positive) as determined in accordance with GAAP for the period July 1, 2017 through July 31, 2017 per share

The Company issued capital calls to stockholders that were due on April 3, 2017 and May 1, 2017, which are summarized in the following table:
 
 
Date
 
Shares Issued
 
NAV ($) per share
 
Proceeds
Issuance of shares
 
04/03/2017
 
2,187,285.533
 
$
15.00

 
$
32,809

Issuance of shares
 
05/01/2017
 
2,223,285.533
 
15.00

 
33,349


On May 11, 2017, GCIC Funding entered into an amendment, or the Credit Facility Amendment, to the documents governing the Credit Facility. The Credit Facility Amendment is effective as of May 11, 2017. The Credit Facility Amendment, among other things, (a) extended the expiration of the reinvestment period from May 12, 2017 to August 10, 2017, during which period GCIC Funding, subject to certain conditions, may make borrowings under the facility and (b) extend the stated maturity date to August 11, 2020. The size, interest rate and other material terms of the Credit Facility were unchanged.


67



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

The information contained in this section should be read in conjunction with our interim and unaudited consolidated financial statements and related notes thereto appearing elsewhere in this quarterly report on Form 10-Q. In this report, "we," "us," "our" and "GCIC" refer to Golub Capital Investment Corporation and its consolidated subsidiaries.

Forward-Looking Statements

Some of the statements in this quarterly report on Form 10-Q constitute forward-looking statements, which relate to future events or our future performance or financial condition. The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties, including statements as to:

our future operating results;
our business prospects and the prospects of our portfolio companies;
the effect of investments that we expect to make and the competition for those investments;
our contractual arrangements and relationships with third parties;
completion of a public offering of our securities or other liquidity event;
actual and potential conflicts of interest with GC Advisors LLC, or GC Advisors, and other affiliates of Golub Capital LLC, or collectively, Golub Capital;
the dependence of our future success on the general economy and its effect on the industries in which we invest;
the ability of our portfolio companies to achieve their objectives;
the use of borrowed money to finance a portion of our investments;
the adequacy of our financing sources and working capital;
the timing of cash flows, if any, from the operations of our portfolio companies;
general economic and political trends and other external factors;
the ability of GC Advisors to locate suitable investments for us and to monitor and administer our investments;
the ability of GC Advisors or its affiliates to attract and retain highly talented professionals;
our ability to qualify and maintain our qualification as a regulated investment company, or RIC, and as a business development company;
general price and volume fluctuations in the stock markets;
the impact on our business of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations issued thereunder and any actions toward repeal thereof; and
the effect of changes to tax legislation and our tax position.

Such forward-looking statements may include statements preceded by, followed by or that otherwise include the words “may,” “might,” “will,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “estimate,” “anticipate,” ”predict,” “potential,” “plan” or similar words. The forward looking statements contained in this Form 10-Q involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth elsewhere in this quarterly report on Form 10-Q and as “Risk Factors” in our amended registration statement on Form 10, filed with the Securities and Exchange Commission, or the SEC, on November 30, 2016.



68


We have based the forward-looking statements included in this report on information available to us on the date of this report. Actual results could differ materially from those anticipated in our forward-looking statements and future results could differ materially from historical performance. You are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. This quarterly report on Form 10-Q contains statistics and other data that have been obtained from or compiled from information made available by third-party service providers. We have not independently verified such statistics or data.

Overview

We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended, or the 1940 Act. In addition, for U.S. federal income tax purposes, we have elected to be treated as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended, or the Code. As a business development company and a RIC, we are also subject to certain constraints, including limitations imposed by the 1940 Act and the Code. We were formed in September 2014 and commenced operations on December 31, 2014.

Our investment objective is to generate current income and capital appreciation by investing primarily in senior secured and one stop loans of U.S. middle-market companies. We may also selectively invest in second lien and subordinated loans of, and warrants and minority equity securities in, U.S. middle-market companies. We intend to achieve our investment objective by (1) accessing the established loan origination channels developed by Golub Capital, a leading lender to U.S. middle-market companies with over $20.0 billion in capital under management as of March 31, 2017, (2) selecting investments within our core middle-market company focus, (3) partnering with experienced private equity firms, or sponsors, in many cases with whom Golub Capital has invested alongside in the past, (4) implementing the disciplined underwriting standards of Golub Capital and (5) drawing upon the aggregate experience and resources of Golub Capital.

Our investment activities are managed by GC Advisors and supervised by our board of directors of which a majority of the members are independent of us, GC Advisors and its affiliates.

Under an investment advisory agreement, or the Investment Advisory Agreement, which was most recently reapproved by our board of directors in May 2017, we have agreed to pay GC Advisors an annual base management fee based on our average adjusted gross assets as well as an incentive fee based on our investment performance. Under an administration agreement, or the Administration Agreement, we are provided with certain administrative services by an administrator, or the Administrator, which is currently Golub Capital LLC.

Under the Administration Agreement, we have agreed to reimburse the Administrator for our allocable portion (subject to the review and approval of our independent directors) of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement.

We seek to create a portfolio that includes primarily senior secured and one stop loans by primarily investing approximately $5.0 million to $30.0 million of capital, on average, in the securities of U.S. middle-market companies. We may also selectively invest more than $30.0 million in some of our portfolio companies and generally expect that the size of our individual investments will vary proportionately with the size of our capital base.


69


We generally invest in securities that have been rated below investment grade by independent rating agencies or that would be rated below investment grade if they were rated. These securities, which may be referred to as “junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal. In addition, many of our debt investments have floating interest rates that reset on a periodic basis and typically do not fully pay down principal prior to maturity, which may increase our risk of losing part or all of our investment.

As of March 31, 2017 and September 30, 2016, our portfolio at fair value was comprised of the following:
 
 
As of March 31, 2017
 
As of September 30, 2016
 
Investment Type
 
Investments at
 Fair Value
(In thousands)
 
Percentage of
Total
Investments
 
Investments at
 Fair Value
(In thousands)
 
Percentage of
Total
Investments
 
Senior secured
 
$
147,329

 
12.6

%
$
112,994

 
10.6

%
One stop
 
950,483

 
81.4

 
894,649

 
83.6

 
Subordinated debt
 
53

 
0.0

*
40

 
0.0

*
Subordinated notes in GCIC SLF(1)(2)
 

 

 
34,917

 
3.3

 
LLC equity interests in GCIC SLF(2)
 
52,423

 
4.5

 
13,039

 
1.2

 
Equity
 
17,037

 
1.5

 
14,071

 
1.3

 
Total
 
$
1,167,325

 
100.0

%
$
1,069,710

 
100.0

%
 
* Represents an amount less than 0.1%
(1) 
On December 30, 2016, GCIC Senior Loan Fund LLC, or GCIC SLF, issued a capital call in an aggregate amount of $39.9 million the proceeds of which were used to redeem in full the outstanding balance on the subordinated notes previously issued by GCIC SLF and terminate all remaining subordinated note commitments.
(2) 
Proceeds from the subordinated notes and limited liability company, or LLC, equity interests invested in GCIC SLF were utilized by GCIC SLF to invest in senior secured loans.
One stop loans include loans to technology companies undergoing strong growth due to new services, increased adoption and/or entry into new markets. We refer to loans to these companies as late stage lending loans. Other targeted characteristics of late stage lending businesses include strong customer revenue retention rates, a diversified customer base and backing from growth equity or venture capital firms. In some cases, the borrower’s high revenue growth is supported by a high level of discretionary spending. As part of the underwriting of such loans and consistent with industry practice, we may adjust our characterization of the earnings of such borrowers for a reduction or elimination of such discretionary expenses, if appropriate. As of March 31, 2017 and September 30, 2016, one stop loans included $57.6 million and $57.6 million, respectively, of late stage lending loans at fair value.

As of March 31, 2017 and September 30, 2016, we had debt and equity investments in 162 and 158 portfolio companies, respectively, and an investment in GCIC SLF.



70


The weighted average annualized income yield and weighted average annualized investment income yield of our earning portfolio company investments, which represented nearly 100% of our debt investments, for the three and six months ended March 31, 2017 and 2016 was as follows:
 
For the three months ended March 31,
 
For the six months ended March 31,
  
2017
 
2016
 
2017
 
2016
Weighted average annualized income yield(1)(3)
7.6%
 
7.4%
 
7.6%
 
7.3%
Weighted average annualized investment income yield(2)(3)
7.9%
 
8.0%
 
8.0%
 
7.7%
 
(1) 
Represents income from interest, including subordinated notes in GCIC SLF, and fees excluding amortization of capitalized fees and discounts divided by the average fair value of earning portfolio company investments, and does not represent a return to any investor in us.
(2) 
Represents income from interest, including subordinated notes in GCIC SLF, fees and amortization of capitalized fees and discounts divided by the average fair value of earning portfolio company investments, and does not represent a return to any investor in us.
(3) 
For the three months ending March 31, 2017, weighted average annualized income yield and weighted average annualized investment income yield does not reflect interest income from subordinated notes in GCIC SLF, which were redeemed on December 30, 2016.
The total return, based on the change in the net asset value, or NAV, per share and assuming distributions were reinvested in accordance with the dividend reinvestment plan, or DRIP, for the six months ended March 31, 2017 and 2016, was 4.41% and 3.90%, respectively. The total return does not include sales load.

As of March 31, 2017, GCIC has earned an inception-to-date internal rate of return, or IRR, of 8.9% for stockholders taken as a whole. For the six months ended March 31, 2017 and 2016, GCIC has earned an annual IRR of 9.1% and 8.0%, respectively, for stockholders taken as a whole. An individual stockholder’s IRR may vary based on the timing of their capital transactions. The IRR is the annualized effective compound rate of return that brings a series of cash flows to the current value of the cash invested. The IRR was computed based on the actual dates of cash inflows (share issuances, including share issuances through the DRIP), outflows (capital distributions), the stockholders’ NAV at the end of the period and distributions declared and payable at the end of the period (residual value of the stockholders’ NAV and distributions payable as of each measurement date).

Revenues: We generate revenue in the form of interest and fee income on debt investments and capital gains and distributions, if any, on portfolio company investments that we originate or acquire. Our debt investments typically have a term of three to seven years and bear interest at a fixed or floating rate. In some instances, we receive payments on our debt investments based on scheduled amortization of the outstanding balances. In addition, we receive repayments of some of our debt investments prior to their scheduled maturity date. The frequency or volume of these repayments fluctuates significantly from period to period. Our portfolio activity also reflects the proceeds of sales of securities. In some cases, our investments provide for deferred interest payments or payment-in-kind, or PIK, interest. The principal amount of loans and any accrued but unpaid interest generally become due at the maturity date. In addition, we may generate revenue in the form of commitment, origination, amendment, structuring or due diligence fees, fees for providing managerial assistance and consulting fees. Loan origination fees, original issue discount and market discount or premium are capitalized, and we accrete or amortize such amounts as interest income. We record prepayment premiums on loans as fee income. For additional details on revenues, see “Critical Accounting Policies - Revenue Recognition.”

We recognize realized gains or losses on investments based on the difference between the net proceeds from the disposition and the amortized cost basis of the investment, without regard to unrealized gains or losses previously recognized. We record current period changes in fair value of investments that are


71


measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investments in the consolidated statements of operations.

Expenses: Our primary operating expenses include the payment of fees to GC Advisors under the Investment Advisory Agreement and interest expense on our outstanding debt. We bear all out-of-pocket costs and expenses of our operations and transactions, including:

reimbursement to GC Advisors of organizational and offering expenses up to an aggregate amount of $0.7 million;
calculating our NAV (including the cost and expenses of any independent valuation firm);
fees and expenses incurred by GC Advisors payable to third parties, including agents, consultants or other advisors, in monitoring financial and legal affairs for us and in monitoring our investments and performing due diligence on our prospective portfolio companies or otherwise relating to, or associated with, evaluating and making investments, which fees and expenses may include, among other items, due diligence reports, appraisal reports, any studies that may be commissioned by GC Advisors and travel and lodging expenses;
expenses related to unsuccessful portfolio acquisition efforts;
administration fees and expenses, if any, payable under the Administration Agreement (including payments based upon our allocable portion of the Administrator’s overhead in performing its obligations under the Administration Agreement, including rent and the allocable portion of the cost of our chief compliance officer, chief financial officer and their respective staffs);
fees payable to third parties, including agents, consultants or other advisors, relating to, or associated with, evaluating and making investments in portfolio companies, including costs associated with meeting financial sponsors;
transfer agent, dividend agent and custodial fees and expenses;
U.S. federal and state registration and franchise fees;
U.S. federal, state and local taxes;
independent directors’ fees and expenses;
costs of preparing and filing reports or other documents required by the SEC or other regulators;
costs of any reports, proxy statements or other notices to stockholders, including printing costs;
costs associated with individual or group stockholders;
our allocable portion of any fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums;
direct costs and expenses of administration, including printing, mailing, long distance telephone, copying, secretarial and other staff, independent auditors and outside legal costs;
proxy voting expenses; and
all other expenses incurred by us or the Administrator in connection with administering our business.

We expect our general and administrative expenses to be relatively stable or decline as a percentage of total assets during periods of asset growth and to increase during periods of asset declines.

GC Advisors, as collateral manager for Golub Capital Investment Corporation 2016(M) LLC, or the GCIC 2016 Issuer, our wholly-owned subsidiary, under a collateral management agreement, or the GCIC 2016 Collateral Management Agreement, is entitled to receive an annual fee in an amount equal to 0.25% of the principal balance of the portfolio loans held by the GCIC 2016 Issuer at the beginning of the collection period relating to each payment date, which is payable in arrears on each payment date. Under the GCIC 2016 Collateral Management Agreement, the term “collection period” refers to a quarterly


72


period running from the day after the end of the prior collection period to the tenth business day prior to the payment date.

Collateral management fees are paid directly by the GCIC 2016 Issuer to GC Advisors and offset against the management fees payable under the Investment Advisory Agreement. In addition, the GCIC 2016 Issuer paid Wells Fargo Securities, LLC structuring and placement fees for its services in connection with the initial structuring of a $410.1 million term debt securitization, or the GCIC 2016 Debt Securitization. The GCIC 2016 Issuer also agreed to pay ongoing administrative expenses to the trustee, collateral manager, independent accountants, legal counsel, rating agencies and independent managers in connection with developing and maintaining reports, and providing required services in connection with the administration of the GCIC 2016 Debt Securitization.

We believe that these administrative expenses approximate the amount of ongoing fees and expenses that we would be required to pay in connection with a traditional secured credit facility. Our common stockholders indirectly bear all of these expenses.

Recent Developments

On February 7, 2017 and May 4, 2017, our board of directors declared distributions to holders of record as set forth in the table below:

Record Date
 
Payment Date
 
Amount Per Share
April 30, 2017
 
July 28, 2017
 
Net increase in net assets resulting from operations earned by us (if positive) as determined in accordance with generally accepted accounting principles in the United States of America, or GAAP, for the period April 1, 2017 through April 30, 2017 per share
May 18, 2017
 
July 28, 2017
 
Net increase in net assets resulting from operations earned by us (if positive) as determined in accordance with GAAP for the period May 1, 2017 through May 31, 2017 per share
June 16, 2017
 
July 28, 2017
 
Net increase in net assets resulting from operations earned by us (if positive) as determined in accordance with GAAP for the period June 1, 2017 through June 30, 2017 per share
July 21, 2017
 
September 25, 2017
 
Net increase in net assets resulting from operations earned by us (if positive) as determined in accordance with GAAP for the period July 1, 2017 through July 31, 2017 per share

We issued capital calls to stockholders that were due on April 3, 2017 and May 1, 2017, which are summarized in the following table:
 
 
Date
 
Shares Issued
 
NAV ($) per share
 
Proceeds
 
 
 
 
 
 
 
 
(In thousands)
Issuance of shares
 
04/03/2017
 
2,187,285.533
 
$
15.00

 
$
32,809

Issuance of shares
 
05/01/2017
 
2,223,285.533
 
15.00

 
33,349




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On May 11, 2017, GCIC Funding, LLC, or GCIC Funding, our wholly-owned subsidiary, entered into an amendment, or the Credit Facility Amendment, to the documents governing the senior secured revolving credit facility, or the Credit Facility. The Credit Facility Amendment is effective as of May 11, 2017. The Credit Facility Amendment, among other things, (a) extended the expiration of the reinvestment period from May 12, 2017 to August 10, 2017, during which period GCIC Funding, subject to certain conditions, may make borrowings under the facility and (b) extended the stated maturity date to August 11, 2020. The size, interest rate and other material terms of the Credit Facility were unchanged.

Consolidated Results of Operations

Consolidated operating results for the three and six months ended March 31, 2017 and 2016 are as follows:
 
For the three months ended March 31,
 
Variances
 
For the six months ended March 31,
 
Variances
  
2017
 
2016
 
2017 vs. 2016
 
2017
 
2016
 
2017 vs. 2016
  
(In thousands)
 
(In thousands)
Interest income
$
19,824

 
$
10,309

 
$
9,515

 
$
39,183

 
$
19,803

 
$
19,380

Income from accretion of discounts and origination fees
989

 
887

 
102

 
2,379

 
1,403

 
976

Interest and dividend income from investments in GCIC SLF (1)
1,242

 
730

 
512

 
2,395

 
1,215

 
1,180

Dividend income

 
17

 
(17
)
 
1

 
17

 
(16
)
Fee income
65

 
359

 
(294
)
 
211

 
375

 
(164
)
Total investment income
22,120

 
12,302

 
9,818

 
44,169

 
22,813

 
21,356

Net expenses
11,176

 
5,616

 
5,560

 
22,421

 
10,627

 
11,794

Net investment income
10,944

 
6,686

 
4,258

 
21,748

 
12,186

 
9,562

Net realized gain (loss) on investments
134

 
48

 
86

 
331

 
733

 
(402
)
Net change in unrealized appreciation
   (depreciation) on investments
1,616

 
560

 
1,056

 
5,195

 
1,033

 
4,162

Net increase in net assets resulting from operations
$
12,694

 
$
7,294

 
$
5,400

 
$
27,274

 
$
13,952

 
$
13,322

Average earning debt investments, at fair value (2)
$
1,067,235

 
$
585,497

 
$
481,738

 
$
1,041,217

 
$
561,206

 
$
480,011

Average investment in subordinated notes
 of GCIC SLF, at fair value

 
34,820

 
(34,820
)
 
17,266

 
29,126

 
(11,860
)
Average earning portfolio company investments, at fair value
$
1,067,235

 
$
620,317

 
$
446,918

 
$
1,058,483

 
$
590,332

 
$
468,151

 
(1) 
The investments in GCIC SLF include our investments in both subordinated notes and LLC equity interests in GCIC SLF for the three and six months ended March 31, 2016 and the six months ended March 31, 2017.  For the three months ended March 31, 2017, the investments in GCIC SLF include our investment in LLC equity interests in GCIC SLF.
(2) 
Does not include our investment in LLC equity interests in GCIC SLF.

Net income can vary substantially from period to period for various reasons, including the recognition of realized gains and losses and unrealized appreciation and depreciation. As a result, quarterly comparisons of net income may not be meaningful.

As we have continued to raise and deploy capital we have experienced significant growth in total assets, total liabilities and net assets from March 31, 2016 to March 31, 2017. As a result, quarterly comparisons of operating results may not be meaningful.

Investment Income

Investment income increased from the three months ended March 31, 2016 to the three months ended March 31, 2017 by $9.8 million primarily as a result of an increase in the average earning debt investment


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balance, which is the average balance of accruing loans, excluding our investment in the subordinated notes of GCIC SLF, in our investment portfolio of $481.7 million.

Investment income increased from the six months ended March 31, 2016 to the six months ended March 31, 2017 by $21.4 million primarily as a result of an increase in the average earning debt investment balance of $480.0 million and an increase of $1.0 million of interest and dividend income from our investments in GCIC SLF.

The annualized income yield by debt security type for the three and six months ended March 31, 2017 and 2016 was as follows:
 
For the three months ended March 31,
 
For the six months ended March 31,
  
2017
 
2016
 
2017
 
2016
Senior secured
6.3%
 
6.2%
 
6.3%
 
6.1%
One stop
7.7%
 
7.5%
 
7.8%
 
7.5%
Subordinated debt (1)
19.8%
 
N/A
 
19.8%
 
N/A
Subordinated notes in GCIC SLF (2)
N/A
 
8.4%
 
8.5%
 
8.3%
 
(1) 
Represents one portfolio company investment.
(2) 
GCIC SLF’s proceeds from the subordinated notes were utilized by GCIC SLF to invest in senior secured loans.
Annualized income yields on senior secured loans remained relatively stable for the three and six months ended March 31, 2017 compared to the three and six months ended March 31, 2016. Annualized income yields on one-stop loans have increased for the three and six months ended March 31, 2017 compared to the three and six months ended March 31, 2016 as the result of several larger transactions with attractive pricing originated during the second half of our 2016 fiscal year. As of March 31, 2017, we have one subordinated debt investment as shown in the consolidated schedule of investments.

For additional details on investment yields and asset mix, refer to the “Liquidity and Capital Resources - Portfolio Composition, Investment Activity and Yield” section below.



75


Expenses

The following table summarizes our expenses:
 
 
For the three months ended March 31,
 
Variances
 
For the six months ended March 31,
 
Variances
  
 
2017
 
2016
 
2017 vs. 2016
 
2017
 
2016
 
2017 vs. 2016
  
 
(In thousands)
 
(In thousands)
Interest and other debt financing expenses
 
$
4,431

 
$
1,910

 
$
2,521

 
$
8,454

 
3,646

 
$
4,808

Amortization of debt issuance costs
 
882

 
486

 
396

 
1,781

 
964

 
817

Base management fee, net of waiver
 
2,822

 
1,559

 
1,263

 
5,583

 
3,006

 
2,577

Income Incentive Fee, net of waiver
 
1,830

 
1,042

 
788

 
3,860

 
1,705

 
2,155

Capital gain incentive fee accrued under GAAP
 
392

 
135

 
257

 
1,090

 
274

 
816

Professional fees
 
480

 
248

 
232

 
922

 
573

 
349

Administrative service fee
 
343

 
232

 
111

 
705

 
445

 
260

General and administrative expenses
 
(4
)
 
4

 
(8
)
 
26

 
14

 
12

Total expenses
 
$
11,176

 
$
5,616

 
$
5,560

 
$
22,421

 
$
10,627

 
$
11,794

Average debt outstanding
 
$
538,522

 
$
262,133

 
$
276,389

 
$
525,738

 
$
256,038

 
$
269,700


Interest

Interest and other debt financing expenses increased by $2.5 million from the three months ended March 31, 2016 to the three months ended March 31, 2017 primarily due to an increase in the weighted average of outstanding borrowings from $262.1 million for the three months ended March 31, 2016 to $538.5 million for the three months ended March 31, 2017 and an increase in the average London Interbank Offered Rate, or LIBOR, which is the index that determines the interest rate on our floating rate liabilities. The increase in our debt was driven by the issuance of $252.5 million of notes pursuant to the GCIC 2016 Debt Securitization as well as the use of our revolving credit facility, or SMBC Revolver, entered into on May 17, 2016 by GCIC with Sumitomo Mitsui Banking Corporation, or SMBC, as administrative agent, sole lead arranger and sole manager, which had an outstanding balance of $49.2 million as of March 31, 2017. These increases were partially offset by a decrease in our use of debt under the Credit Facility entered into by GCIC Funding with Wells Fargo Securities, LLC, as administrative agent, and Wells Fargo Bank, N.A., as lender, to $270.2 million as of March 31, 2017 from an outstanding balance of $303.9 million as of March 31, 2016.

Interest and other debt financing expenses increased by $4.8 million from the six months ended March 31, 2016 to the six months ended March 31, 2017 primarily due to an increase in the weighted average of outstanding borrowings from $256.0 million for the six months ended March 31, 2016 to $525.7 million for the six months ended March 31, 2017. The effective annualized average interest rate on our outstanding debt increased to 3.9% for the six months ended March 31, 2017 from 3.6% for the six months ended March 31, 2016 primarily due to the increase in LIBOR.

Amortization of debt issuance costs increased by $0.4 million from the three months ended March 31, 2016 to the three months ended March 31, 2017 primarily due to additional capitalized debt issuance costs associated with the GCIC 2016 Debt Securitization. The effective annualized average interest rate on our outstanding debt increased to 4.0% for the three months ended March 31, 2017 from 3.7% for the three months ended March 31, 2016 primarily due to the increase in LIBOR.




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Management Fees

The base management fee increased as a result of a sequential increase in average assets from March 31, 2016 to March 31, 2017.

Incentive Fees

The incentive fee payable under the Investment Advisory Agreement consists of two parts: (1) the income component, or the Income Incentive Fee, and (2) the capital gains component, or the Capital Gain Incentive Fee. The Income Incentive Fee increased by $0.8 million and $2.2 million from the three and six months ended March 31, 2016 to the three and six months ended March 31, 2017 primarily as a result of the $481.7 million and $480.0 million increases in our average earning debt investment balances that resulted in an increase in our Pre-Incentive Fee Net Investment Income (as defined below). For the three months ended March 31, 2017, while still not fully through the catch-up provision of the Income Incentive Fee calculation, the Income Incentive Fee as a percentage of Pre-Incentive Fee Net Investment Income increased to 13.9% compared to 13.2% for the three months ended March 31, 2016. For the six months ended March 31, 2017, while still not fully through the catch-up provision of the Income Incentive Fee calculation, the Income Incentive Fee as a percentage of Pre-Incentive Fee Net Investment Income increased to 14.5% compared to 12.0% for the six months ended March 31, 2016. "Pre-Incentive Fee Net Investment Income" means interest income, dividend income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that we receive from portfolio companies, but excluding fees for providing managerial assistance) accrued during the calendar quarter, minus operating expenses for the calendar quarter (including the base management fee, taxes, any expenses payable under the Investment Advisory Agreement and the Administration Agreement, any expenses of securitizations and any interest expense and dividends paid on any outstanding preferred stock, but excluding the incentive fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature such as market discount, debt instruments with PIK interest, preferred stock with PIK dividends and zero coupon securities, accrued income that we have not yet received in cash.

The Capital Gain Incentive Fee payable as calculated under the Investment Advisory Agreement for each of the three and six months ended March 31, 2017 and 2016 was $0. However, in accordance with GAAP, we are required to include the aggregate unrealized capital appreciation on investments in the calculation and accrue a capital gain incentive fee as if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Advisory Agreement.

We recorded an accrual for capital gain incentive fee under GAAP of $0.4 million, or $0.01 per share, and $1.1 million, or $0.03 per share, for the three and six months ended March 31, 2017, respectively. We recorded an accrual for capital gain incentive fee under GAAP of $0.1 million, or less than $0.01 per share, and $0.3 million, or $0.01 per share, for the three and six months ended March 31, 2016, respectively. The increase in the accrual for capital gain incentive fee under GAAP for the three and six months ended March 31, 2017 from the three and six months ended March 31, 2016 was primarily the result of increased unrealized appreciation on portfolio company investments and realized gains on the sale of debt investments. For additional details on unrealized appreciation and depreciation of investments, refer to the “Net Realized and Unrealized Gains and Losses” see section below.



77


Professional Fees, Administrative Service Fees, and General and Administrative Expenses

In total, professional fees, the administrative service fee, and general and administrative expenses increased by $0.3 million from the three months ended March 31, 2016 to the three months ended March 31, 2017 and increased by $0.6 million from the six months ended March 31, 2016 to six months ended March 31, 2017. These increases are associated with increased costs to service a growing portfolio. In general, we expect certain of our operating expenses, including professional fees, the administrative service fee, and other general and administrative expenses to decline as a percentage of our total assets during periods of growth and increase as a percentage of our total assets during periods of asset declines.

The Administrator pays for certain expenses incurred by us. These expenses are subsequently reimbursed in cash. Total expenses reimbursed by us to the Administrator for the three and six months ended March 31, 2017 were $0.5 million and $0.8 million, respectively. Total expenses reimbursed by us to the Administrator for the three and six months ended March 31, 2016 were $0.4 million and $0.5 million, respectively.

As of March 31, 2017 and September 30, 2016, included in accounts payable and accrued expenses were $0.2 million and $0.3 million, respectively, for accrued expenses paid on behalf of us by the Administrator.

Net Realized and Unrealized Gains and Losses

The following table summarizes our net realized and unrealized gains (losses) for the periods presented:
 
For the three months ended March 31,
 
Variances
 
For the six months ended March 31,
 
Variances
  
2017
 
2016
 
2017 vs. 2016
 
2017
 
2016
 
2017 vs. 2016
  
(In thousands)
 
(In thousands)
Net realized gain (loss) on investments
$
134

 
$
48

 
$
86

 
$
331

 
$
733

 
$
(402
)
Net realized gain (loss)
134

 
48

 
86

 
331

 
733

 
(402
)
Unrealized appreciation on investments
4,483

 
2,836

 
1,647

 
8,582

 
4,614

 
3,968

Unrealized (depreciation) on investments
(2,968
)
 
(2,548
)
 
(420
)
 
(3,689
)
 
(3,810
)
 
121

Unrealized appreciation on investments in GCIC SLF(1)
101

 
621

 
(520
)
 
302

 
578

 
(276
)
Unrealized (depreciation) on investments in GCIC SLF(2)

 
(349
)
 
349

 
 
 
(349
)
 
349

Net change in unrealized appreciation (depreciation) on
   investments, investments in GCIC SLF
$
1,616

 
$
560

 
$
1,056

 
$
5,195

 
$
1,033

 
$
4,162

 
(1) 
Unrealized appreciation on investments in GCIC SLF includes our investment in LLC equity interests in GCIC SLF.
(2) 
Unrealized (depreciation) on investments in GCIC SLF includes our investment in subordinated notes in GCIC SLF.
For the three months ended March 31, 2017, we had a net realized gain of $0.1 million primarily due to the sale of portfolio company investments to GCIC SLF. For the six months ended March 31, 2017, we had a net realized gain of $0.3 million primarily due to sale of portfolio company investments to GCIC SLF.

For the three months ended March 31, 2017, we had $4.5 million in unrealized appreciation on 80 portfolio company investments, which was partially offset by $3.0 million in unrealized depreciation on 123 portfolio company investments. For the six months ended March 31, 2017, we had $8.6 million in unrealized appreciation on 105 portfolio company investments, which was partially offset by $3.7 million


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in unrealized depreciation on 112 portfolio company investments. Unrealized appreciation during the three and six months ended March 31, 2017 resulted from an increase in fair value primarily due to the rise in market prices of portfolio company investments. Unrealized depreciation primarily resulted from the amortization of discounts, negative credit related adjustments that caused a reduction in fair value and the reversal of the net unrealized appreciation associated with the sales of portfolio company investments during the three and six months ended March 31, 2017.

For the three months ended March 31, 2017, we had $0.1 million in unrealized appreciation on our investment in GCIC SLF LLC equity interests, which was primarily driven by net positive credit related adjustments associated with GCIC SLF's investment portfolio. For the six months ended March 31, 2017, we had $0.3 million in unrealized appreciation on our investment in GCIC SLF LLC equity interests, which was driven by net positive credit related adjustments associated with GCIC SLF's investment portfolio.

For the three months ended March 31, 2016, we had net realized gains in an amount less than $0.1 million primarily due to the sale of portfolio company investments to GCIC SLF. For the six months ended March 31, 2016, we had net realized gains of $0.7 million primarily due to the sale of portfolio company investments to GCIC SLF.

During the three months ended March 31, 2016, we had $2.8 million in unrealized appreciation on 63 portfolio company investments, which was partially offset by $2.5 million in unrealized depreciation on 88 portfolio company investments. For the six months ended March 31, 2016, we had $4.6 million in unrealized appreciation on 78 portfolio company investments, which was partially offset by $3.8 million in unrealized depreciation on 85 portfolio company investments. Unrealized depreciation primarily resulted from the amortization of discounts and negative credit related adjustments that caused a reduction in fair value. Unrealized appreciation during the three and six months ended March 31, 2016 resulted from an increase in fair value primarily due to the rise in market prices of portfolio company investments.

For the three and six months ended March 31, 2016, we had $0.6 million in unrealized appreciation on our investment in GCIC SLF equity interests which was partially offset by $0.3 million in unrealized depreciation on our investment in GCIC SLF subordinated notes. The unrealized depreciation was the result of the lower yielding contractual rate compared to comparable market pricing of subordinated notes. The unrealized appreciation on the GCIC SLF LLC equity interests was driven by the offsetting impact of the pricing on the subordinated notes.

Liquidity and Capital Resources

For the six months ended March 31, 2017, we experienced a net increase in cash and cash equivalents of $10.5 million. During the period we used $67.2 million in operating activities, primarily as a result of fundings of portfolio investments of $185.1 million, partially offset by proceeds from principal payments and sales of portfolio investments of $96.8 million and net investment income of $21.7 million. During the same period, cash provided by investment activities of $33.4 million was driven by the decrease in restricted cash and cash equivalents. Lastly, cash provided by financing activities was $44.3 million, primarily driven by borrowings on debt of $187.8 million that were partially offset by repayments of debt of $136.5 million and distributions paid of $13.0 million.

For the six months ended March 31, 2016, we experienced a net increase in cash and cash equivalents of less than $0.1 million. During the period we used $139.3 million in operating activities, primarily as a result of fundings of portfolio investments of $334.0 million. This was partially offset by proceeds from


79


principal payments and sales of portfolio investments of $189.1 million and net investment income of $14.0 million. During the same period, cash provided by investment activities of $3.0 million was driven by the decrease in restricted cash and cash equivalents. Lastly, cash provided by financing activities was $136.4 million, primarily driven by borrowings on debt of $324.3 million and proceeds from issuance of common shares of $88.4 million that were partially offset by repayments of debt of $270.1 million and distributions paid of $6.1 million.

As of March 31, 2017 and September 30, 2016, we had cash and cash equivalents of $15.2 million and $4.7 million, respectively. In addition, we had restricted cash and cash equivalents of $37.6 million and $71.1 million as of March 31, 2017 and September 30, 2016, respectively. Cash and cash equivalents are available to fund new investments, pay operating expenses and pay distributions. As of March 31, 2017, $10.6 million of our restricted cash and cash equivalents could be used to fund new investments that meet the investment guidelines established in the GCIC 2016 Debt Securitization, which is described in further detail in Note 8 to our consolidated financial statements, and for the payment of interest expense on the notes issued in the GCIC 2016 Debt Securitization. $27.0 million of such restricted cash and cash equivalents could be used to fund investments that meet the guidelines under the Credit Facility as well as for the payment of interest expense and revolving debt of the Credit Facility.

As of March 31, 2017, the Credit Facility allowed GCIC Funding to borrow up to $420.0 million at any one time outstanding, subject to leverage and borrowing base restrictions. As of March 31, 2017 and September 30, 2016, subject to leverage and borrowing base restrictions, we had approximately $149.8 million and $226.9 million, respectively, of remaining commitments and $52.0 million and $109.7 million, respectively, of availability on the Credit Facility. As of March 31, 2017 and September 30, 2016, we had $270.2 million and $193.1 million outstanding under the Credit Facility, respectively.

As of March 31, 2017, the SMBC Revolver allowed us to borrow up to $75.0 million at any one time outstanding, subject to leverage and borrowing base restrictions. As of March 31, 2017 and September 30, 2016, subject to leverage and borrowing base restrictions, we had approximately $25.8 million and $0 million, respectively, of remaining commitments and availability under the SMBC Revolver. As of March 31, 2017 and September 30, 2016, we had $49.2 million and $75.0 million outstanding under the SMBC Revolver, respectively.

As of March 31, 2017, we were permitted to borrow up to $40.0 million at any one time outstanding, under the terms of our unsecured revolving credit facility, or Revolver, with GC Advisors. We entered into the Revolver in order to have the ability to borrow funds on a short-term basis and have in the past, and generally intend in the future, that borrowings under the Revolver will be repaid within the same quarter in which they are drawn. As of March 31, 2017 and September 30, 2016, we had no amounts outstanding under the Revolver.

On August 16, 2016, we completed the GCIC 2016 Debt Securitization in which the GCIC 2016 Issuer issued an aggregate of $410.1 million of notes, or the GCIC 2016 Notes, including $220.0 million of Class A GCIC 2016 Notes, which bear interest at a rate of three-month LIBOR plus 2.15%, $32.5 million of Class B GCIC 2016 Notes, which bear interest at a rate of three-month LIBOR plus 3.00%, $42.3 million of Class C GCIC 2016 Notes, which bear interest at a rate of three-month LIBOR plus 3.10%, and $28.6 million of Class D GCIC 2016 Notes, which bear interest at a rate of three-month LIBOR plus 3.25%, and $86.7 million of LLC equity interests in the GCIC 2016 Issuer that do not bear interest. We retained all of the Class C GCIC 2016 Notes, Class D GCIC 2016 Notes and LLC equity interests in the GCIC 2016 Issuer totaling $42.3 million, $28.6 million and $86.7 million, respectively. The Class A and Class B GCIC 2016 Notes are included in the March 31, 2017 and September 30, 2016 consolidated


80


statements of financial condition as our debt and the Class C GCIC 2016 Notes, Class D GCIC 2016 Notes and LLC equity interests in the GCIC 2016 issuer were eliminated in consolidation. As of March 31, 2017 and September 30, 2016, we had outstanding debt under the GCIC 2016 Debt Securitization of $252.5 million.

As of March 31, 2017 and September 30, 2016, we had investor capital subscriptions totaling $1,301.6 million and $942.9 million, respectively, of which $594.3 million and $594.3 million, respectively, had been called and contributed, leaving $707.3 million and $348.6 million of uncalled investor capital subscriptions, respectively. Prior to the completion of a public offering or other liquidity event, we expect to target a leverage ratio of between 0.85x to 0.90x and may issue capital calls to shareholders as our leverage ratio is at or approaching its target.

In accordance with the 1940 Act, with certain limited exceptions, we are only allowed to borrow amounts such that our asset coverage, as defined in the 1940 Act, is at least 200% after such borrowing. As of March 31, 2017, our asset coverage for borrowed amounts was 210.1%.

As of March 31, 2017 and September 30, 2016, we had outstanding commitments to fund investments, excluding our investment in GCIC SLF, totaling $54.2 million and $42.7 million, respectively. These amounts may or may not be funded to the borrowing party now or in the future. The unfunded commitments relate to loans with various maturity dates, but the entire amount was eligible for funding to the borrowers as of March 31, 2017 and September 30, 2016, respectively, subject to the terms of each loan’s respective credit agreement. As of March 31, 2017, we believe that we had sufficient assets and liquidity to adequately cover future obligations under our unfunded commitments based on historical rates of drawings upon unfunded commitments, cash and restricted cash balances that we maintain, availability under our Credit Facility, Revolver and SMBC Revolver, ongoing principal repayments on debt investments assets and uncalled investor capital subscriptions.

Although we expect to fund the growth of our investment portfolio through net proceeds from capital calls on existing and future investor capital subscriptions and through our dividend reinvestment plan as well as future borrowings, to the extent permitted by the 1940 Act, we cannot assure you that our efforts to raise capital will be successful. In addition to capital not being available, it also may not be available on favorable terms. To the extent we are not able to raise capital on what we believe are favorable terms, we will focus on optimizing returns by investing in capital generated by repayments into new investments we believe are attractive from a risk/reward perspective. Furthermore, to the extent we are not able to raise capital and are at or near our targeted leverage ratios, we may receive smaller allocations, if any, on new investment opportunities under GC Advisors’ allocation policy.

Portfolio Composition, Investment Activity and Yield

As of March 31, 2017 and September 30, 2016 we had investments in 162 and 158 portfolio companies, respectively, with a total fair value of $1,114.9 million and $1,021.8 million, respectively. As of March 31, 2017 and September 30, 2016, we had investments in GCIC SLF with a total fair value of $52.4 million and $48.0 million, respectively.



81


The following table shows the asset mix of our new investment commitments for the three and six months ended March 31, 2017 and 2016:
 
For the three months ended March 31,
 
For the six months ended March 31,
  
2017
 
2016
 
2017
 
2016
  
(In thousands)
 
Percentage of
Commitments
 
(In thousands)
 
Percentage of
Commitments
 
(In thousands)
 
Percentage of
Commitments
 
(In thousands)
 
Percentage of
Commitments
Senior secured
$
48,697

 
48.1
%
 
$
35,395

 
17.6
%
 
$
65,687

 
32.2
%
 
$
70,387

 
20.0
%
One stop
51,222

 
50.6

 
161,927

 
80.4

 
128,092

 
62.8

 
235,960

 
67.0

Subordinated debt

 

 

 

 
11

 
0.0

* 

 

Subordinated notes in GCIC SLF(1)

 

 
1,254

 
0.6

 

 

 
34,917

 
9.9

LLC equity interests in GCIC SLF(1)

 

 
2,211

 
1.1

 
8,803

 
4.3

 
9,344

 
2.6

Equity
1,250

 
1.3

 
547

 
0.3

 
1,407

 
0.7

 
1,684

 
0.5

Total new investment commitments
$
101,169

 
100.0
%
 
$
201,334

 
100.0
%
 
$
204,000

 
100.0
%
 
$
352,292

 
100.0
%
 
* Represents an amount less than 0.1%.
(1) 
GCIC SLF’s proceeds from the subordinated notes and LLC equity interests were utilized by GCIC SLF to invest in senior secured loans. As of March 31, 2017, GCIC SLF had investments in senior secured loans to 43 different borrowers.

For the three and six months ended March 31, 2017, we had approximately $18.3 million and $60.8 million, respectively, in proceeds from principal payments and return of capital distributions of portfolio companies, excluding $34.9 million of proceeds from the repayment in full and termination of our investment in subordinated notes of GCIC SLF. For the three and six months ended March 31, 2017, we had sales of securities in 7 and 15 portfolio companies, respectively, aggregating approximately $13.2 million and $36.0 million, respectively, in net proceeds.

For the three and six months ended March 31, 2016, we had approximately $31.3 million and $61.8 million, respectively, in proceeds from principal payments and return of capital distributions of portfolio companies. For the three and six months ended March 31, 2016, we had sales of securities in 11 and 33 portfolio companies, respectively, aggregating approximately $44.1 million and $127.2 million, respectively in net proceeds.



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The following table shows the par, amortized cost and fair value of our portfolio of investments by asset class:
 
As of March 31, 2017 (1)
 
As of September 30, 2016 (1)
  
Par
 
Amortized
Cost
 
Fair
Value
 
Par
 
Amortized
Cost
 
Fair
Value
  
(In thousands)
 
(In thousands)
Senior secured:
  

 
  

 
  

 
  

 
  

 
  

Performing
$
148,619

 
$
146,676

 
$
147,329

 
$
113,576

 
$
112,122

 
$
112,994

Non-accrual (2)

 

 

 

 

 

One stop:
  

 
  

 
  

 
  

 
  

 
  

Performing
954,636

 
941,378

 
950,467

 
902,025

 
888,864

 
894,633

Non-accrual (2)
53

 
28

 
16

 
53

 
28

 
16

Subordinated debt:
  

 
  

 
  

 
  

 
  

 
  

Performing
53

 
53

 
53

 
40

 
40

 
40

Non-accrual (2)

 

 

 

 

 

Subordinated notes in GCIC SLF (3)(4)
  

 
  

 
  

 
  

 
  

 
  

Performing

 

 

 
34,917

 
34,917

 
34,917

Non-accrual (2)

 

 

 

 

 

LLC equity interests in GCIC SLF (3)(4)
N/A

 
51,340

 
52,423

 
N/A

 
12,258

 
13,039

Equity
N/A

 
14,321

 
17,037

 
N/A

 
13,147

 
14,071

Total
$
1,103,361

 
$
1,153,796

 
$
1,167,325

 
$
1,050,611

 
$
1,061,376

 
$
1,069,710

 
(1) 
16 and 12 of our loans included a feature permitting a portion of the interest due on such loan to be PIK interest as of March 31, 2017 and September 30, 2016, respectively.
(2) 
We refer to a loan as non-accrual when we cease recognizing interest income on the loan because we have stopped pursuing repayment of the loan or, in certain circumstances, it is past due 90 days or more on principal and interest or our management has reasonable doubt that principal or interest will be collected. See “— Critical Accounting Policies — Revenue Recognition.”
(3) 
On December 30, 2016, GCIC SLF issued a capital call in an aggregate amount of $39.9 million the proceeds of which were used to redeem in full the outstanding balance on the subordinated notes previously issued by GCIC SLF and terminate all remaining subordinated note commitments.
(4) 
GCIC SLF's proceeds from the subordinated notes and LLC equity interest in GCIC SLF were utilized by GCIC SLF to invest in senior secured loans.
As of March 31, 2017 and September 30, 2016, the fair value of our debt investments as a percentage of the outstanding par value was 99.5% and 99.2%, respectively.



83


The following table shows the weighted average rate, spread over LIBOR of floating rate and fees of investments originated and the weighted average rate of sales and payoffs of portfolio companies during the three and six months ended March 31, 2017 and 2016:
 
For the three months ended March 31,
 
For the six months ended March 31,
  
2017
 
2016
 
2017
 
2016
Weighted average rate of new investment fundings(1)
6.6%
 
7.0%
 
6.8%
 
6.8%
Weighted average spread over LIBOR of new floating rate investment fundings(1)
5.6%
 
6.0%
 
5.8%
 
5.8%
Weighted average fees of new investment fundings
1.3%
 
1.9%
 
1.5%
 
1.7%
Weighted average rate of sales and payoffs of portfolio investments(1)
6.7%
 
6.6%
 
6.5%
 
6.3%
Weighted average annualized income yield (2)(3)
7.6%
 
7.4%
 
7.6%
 
7.3%
 
(1) 
Excludes subordinated note investments in GCIC SLF.
(2) 
Represents income from interest, including subordinated note investment in GCIC SLF, and fees excluding amortization of capitalized fees and discounts divided by the average fair value of earning debt investments and does not represent a return to any investor in us.
(3) 
For the three months ending March 31, 2017, weighted average annualized income yield does not reflect interest income from subordinated notes in GCIC SLF, which were redeemed on December 30, 2016.
As of March 31, 2017, 99.8% and 99.8% of our debt portfolio at fair value and at amortized cost, respectively, had interest rate floors that limit the minimum applicable interest rates on such loans. As of September 30, 2016, 96.4% and 96.4% of our debt portfolio, including our investment in GCIC SLF subordinated notes which were not subject to an interest rate floor, at fair value and at amortized cost, respectively, had interest rate floors that limit the minimum applicable interest rates on such loans.
As of March 31, 2017, the portfolio median earnings before interest, taxes, depreciation and amortization, or EBITDA, for our portfolio companies (excluding GCIC SLF and its underlying borrowers) was $27.0 million. The portfolio median EBITDA is based on the most recently reported trailing twelve-month EBITDA received from the portfolio company.



84


As part of the monitoring process, GC Advisors regularly assesses the risk profile of each of our investments and rates each of them based on an internal system developed by Golub Capital and its affiliates. This system is not generally accepted in our industry or used by our competitors. It is based on the following categories, which we refer to as GC Advisors’ internal performance ratings:
 
 
 
Internal Performance Ratings
Rating
 
Definition
5
 
Involves the least amount of risk in our portfolio. The borrower is performing above expectations, and the trends and risk factors are generally favorable.
4
 
Involves an acceptable level of risk that is similar to the risk at the time of origination. The borrower is generally performing as expected, and the risk factors are neutral to favorable.
3
 
Involves a borrower performing below expectations and indicates that the loan’s risk has increased somewhat since origination. The borrower may be out of compliance with debt covenants; however, loan payments are generally not past due.
2
 
Involves a borrower performing materially below expectations and indicates that the loan’s risk has increased materially since origination. In addition to the borrower being generally out of compliance with debt covenants, loan payments may be past due (but generally not more than 180 days past due).
1
 
Involves a borrower performing substantially below expectations and indicates that the loan’s risk has substantially increased since origination. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. Loans rated 1 are not anticipated to be repaid in full and we will reduce the fair market value of the loan to the amount we anticipate will be recovered.

Our internal performance ratings do not constitute any rating of investments by a nationally recognized statistical rating organization or represent or reflect any third-party assessment of any of our investments.

For any investment rated 1, 2 or 3, GC Advisors will increase its monitoring intensity and prepare regular updates for the investment committee, summarizing current operating results and material impending events and suggesting recommended actions.

GC Advisors monitors and, when appropriate, changes the internal performance ratings assigned to each investment in our portfolio. In connection with our valuation process, GC Advisors and our board of directors review these internal performance ratings on a quarterly basis.



85


The following table shows the distribution of our investments on the 1 to 5 internal performance rating scale at fair value as of March 31, 2017 and September 30, 2016:
 
 
March 31, 2017
 
 
September 30, 2016
Internal
Performance
Rating
 
Investments
at Fair Value
(In thousands)
 
Percentage of
Total
Investments
 
 
Investments
at Fair Value
(In thousands)
 
Percentage of
Total
Investments
 
5
 
$
103,685

 
8.9

 
$
5,889

 
0.6

4
 
980,757

 
84.0

 
 
995,410

 
93.0

 
3
 
81,886

 
7.0

 
 
64,783

 
6.1

 
2
 
997

 
0.1

 
 
3,628

 
0.3

 
1
 

 

 
 

 

 
Total
 
$
1,167,325

 
100.0

 
$
1,069,710

 
100.0


GCIC Senior Loan Fund LLC:

We co-invest with Aurora National Life Assurance Company, a wholly-owned subsidiary of RGA Reinsurance Company, or Aurora, in senior secured loans through GCIC SLF, an unconsolidated Delaware LLC. GCIC SLF is capitalized as transactions are completed and all portfolio and investment decisions in respect of GCIC SLF must be approved by the GCIC SLF investment committee consisting of two representatives of each of us and Aurora (with unanimous approval required from (i) one representative of each of us and Aurora or (ii) both representatives of each of us and Aurora). GCIC SLF may cease making new investments upon notification of either member but operations will continue until all investments have been sold or paid-off in the normal course of business.

As of March 31, 2017, GCIC SLF is capitalized from LLC equity interest subscriptions from its members. On December 14, 2016, the GCIC SLF investment committee approved the recapitalization of the commitments of GCIC SLF’s members. On December 30, 2016, GCIC SLF’s members entered into additional LLC equity interest subscriptions totaling $100.0 million, GCIC SLF issued capital calls totaling $39.9 million to us and Aurora and the subordinated notes previously issued by GCIC SLF were redeemed and terminated. As of March 31, 2017 and September 30, 2016, we and Aurora owned 87.5% and 12.5%, respectively, of the LLC equity interests. GCIC SLF’s profits and losses are allocated to us and Aurora in accordance with our respective ownership interests. As of September 30, 2016, we and Aurora owned 87.5% and 12.5%, respectively, of the outstanding subordinated notes issued by GCIC SLF.


86


As of March 31, 2017 and September 30, 2016, GCIC SLF had the following commitments from its members:
 
As of March 31, 2017
 
As of September 30, 2016
  
Committed
 
Funded(1)
 
Committed
 
Funded
  
(Dollars in thousands)
Subordinated note commitments (2)(3)
$

 
$

 
$
100,000

 
$
39,905

LLC equity commitments (3)
125,000

 
58,674

 
25,000

 
14,009

Total
$
125,000

 
$
58,674

 
$
125,000

 
$
53,914

 
(1) 
Funded LLC equity commitments are presented net of return of capital distributions subject to recall.
(2) 
The subordinated note commitments were terminated as of December 30, 2016.
(3) 
Commitments presented are combined for us and Aurora.
On October 21, 2015, GCIC Senior Loan Fund II LLC, or GCIC SLF II, a wholly-owned subsidiary of GCIC SLF, entered into a senior secured revolving credit facility, or the GCIC SLF Credit Facility, with Wells Fargo Bank, N.A., which allowed GCIC SLF II to borrow up to $150 million at any one time outstanding, subject to leverage and borrowing base restrictions. The reinvestment period of the GCIC SLF Credit Facility ends October 22, 2017, and the stated maturity date is October 21, 2020. As of March 31, 2017 and September 30, 2016, GCIC SLF II had outstanding debt under the GCIC SLF Credit Facility of $102.0 million and $95.5 million, respectively.

Through the reinvestment period, the GCIC SLF Credit Facility bears interest at one-month LIBOR plus a rate between 1.75% and 2.25%, depending on the composition of the collateral asset portfolio, per annum. After the reinvestment period, the rate will reset to one-month LIBOR plus 2.75% per annum for the remaining term of the GCIC SLF Credit Facility.

As of March 31, 2017 and September 30, 2016, GCIC SLF had total assets at fair value of $161.2 million and $149.5 million, respectively. As of March 31, 2017 and September 30, 2016, GCIC SLF did not have any investments on non-accrual status. The portfolio companies in GCIC SLF are in industries similar to those in which we may invest directly. Additionally, as of March 31, 2017 and September 30, 2016, GCIC SLF had commitments to fund various undrawn revolvers and delayed draw investments to its portfolio companies totaling $7.2 million and $10.7 million, respectively.


87



Below is a summary of GCIC SLF’s portfolio, followed by a listing of the individual investments in GCIC SLF’s portfolio as of March 31, 2017 and September 30, 2016:
 
As of March 31, 2017
 
As of September 30, 2016
  
(Dollars in thousands)
Senior secured loans (1)
$
158,273

 
$
146,481

Weighted average current interest rate on senior secured loans (2)
6.2
%
 
6.0
%
Number of borrowers in GCIC SLF
43

 
41

Largest portfolio company investments (1)
$
8,973

 
$
8,346

Total of five largest portfolio company investments (1)
$
40,543

 
$
39,053

 
(1) 
At principal amount.
(2) 
Computed as the (a) annual stated interest rate on accruing senior secured loans divided by (b) total senior secured loans at principal amount.
GCIC SLF Investment Portfolio as of March 31, 2017
Portfolio Company
 
Business Description
 
Security Type
 
Maturity
Date
 
Current
Interest
Rate(1)
 
Principal ($)
 
Fair
Value(2)
 
 
 
 
 
 
 
 
 
 
 
(In thousands)
1A Smart Start LLC
 
Home and Office Furnishings, Housewares, and Durable Consumer
 
Senior loan
 
02/2022
 
5.9
 
$
1,358

 
$
1,357

Accellos, Inc. (3)
 
Diversified/Conglomerate Service
 
Senior loan
 
07/2020
 
6.9
 
 
6,252

 
6,252

Aimbridge Hospitality, LLC (3)
 
Hotels, Motels, Inns, and Gaming
 
Senior loan
 
10/2018
 
5.8
 
 
2,406

 
2,406

American Seafoods Group LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
08/2021
 
6.0
 
 
2,971

 
2,971

Argon Medical Devices, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2021
 
5.9
 
 
3,133

 
3,133

Boot Barn, Inc.
 
Retail Stores
 
Senior loan
 
06/2021
 
5.6
 
 
5,568

 
5,568

Brandmuscle, Inc.
 
Printing and Publishing
 
Senior loan
 
12/2021
 
5.9
 
 
4,233

 
4,227

Certara L.P. (3)
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2018
 
6.6
 
 
3,698

 
3,671

Certara L.P. (4)
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2018
 
N/A
(5) 
 

 
(2
)
Checkers Drive-In Restaurants, Inc.
 
Beverage, Food and Tobacco
 
Senior loan
 
01/2022
 
6.6
 
 
3,725

 
3,697

CLP Healthcare Services, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
6.1
 
 
2,060

 
2,060

CLP Healthcare Services, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
6.1
 
 
1,038

 
1,038

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
6.5
 
 
2,106

 
2,106

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
6.5
 
 
1,059

 
1,059

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
6.5
 
 
59

 
59

Curo Health Services LLC (3)
 
Healthcare, Education and Childcare
 
Senior loan
 
02/2022
 
5.8
 
 
4,900

 
4,939

Encore GC Acquisition, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2020
 
6.6
 
 
2,119

 
2,119

Encore GC Acquisition, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2020
 
8.3
 
 
92

 
92

Express Oil Change, LLC
 
Retail Stores
 
Senior loan
 
12/2017
 
6.1
 
 
331

 
331

Express Oil Change, LLC
 
Retail Stores
 
Senior loan
 
12/2017
 
7.8
 
 
16

 
16

Flexan, LLC
 
Chemicals, Plastics and Rubber
 
Senior loan
 
02/2020
 
6.9
 
 
2,704

 
2,704

Flexan, LLC
 
Chemicals, Plastics and Rubber
 
Senior loan
 
02/2020
 
6.9
 
 
753

 
753

Gamma Technologies, LLC (3)
 
Electronics
 
Senior loan
 
06/2021
 
6.0
 
 
4,434

 
4,434

Harvey Tool Company, LLC
 
Diversified/Conglomerate Manufacturing
 
Senior loan
 
03/2020
 
6.1
 
 
1,995

 
1,995

III US Holdings, LLC
 
Diversified/Conglomerate Service
 
Senior loan
 
09/2022
 
7.2
 
 
5,166

 
5,166

Jensen Hughes, Inc.
 
Buildings and Real Estate
 
Senior loan
 
12/2021
 
6.4
 
 
2,009

 
2,009



88


GCIC SLF Investment Portfolio as of March 31, 2017 - (continued)
Portfolio Company
 
Business Description
 
Security Type
 
Maturity
Date
 
Current
Interest
Rate(1)
 
Principal ($)
 
Fair
Value(2)
 
 
 
 
 
 
 
 
 
 
 
(In thousands)
Jensen Hughes, Inc.
 
Buildings and Real Estate
 
Senior loan
 
12/2021
 
6.0
 
$
89

 
$
89

Jensen Hughes, Inc.
 
Buildings and Real Estate
 
Senior loan
 
12/2021
 
6.0
 
 
56

 
56

Loar Group Inc.
 
Aerospace and Defense
 
Senior loan
 
01/2022
 
5.8
 
 
1,990

 
1,990

Pasternack Enterprises, Inc. and Fairview Microwave, Inc.
 
Diversified/Conglomerate Manufacturing
 
Senior loan
 
05/2022
 
6.0
 
 
3,807

 
3,807

PetVet Care Centers LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
12/2020
 
5.9
 
 
2,896

 
2,896

PetVet Care Centers LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
12/2020
 
5.9
 
 
602

 
602

PetVet Care Centers LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
12/2019
 
7.4
 
 
91

 
91

Polk Acquisition Corp. (3)
 
Automobile
 
Senior loan
 
06/2022
 
6.0
 
 
8,570

 
8,570

Polk Acquisition Corp.
 
Automobile
 
Senior loan
 
06/2022
 
6.0
 
 
54

 
54

Polk Acquisition Corp.
 
Automobile
 
Senior loan
 
06/2022
 
6.6
 
 
35

 
35

PowerPlan Holdings, Inc. (3)
 
Utilities
 
Senior loan
 
02/2022
 
5.8
 
 
7,494

 
7,494

Premise Health Holding Corp. (3)
 
Healthcare, Education and Childcare
 
Senior loan
 
06/2020
 
5.6
 
 
5,955

 
5,955

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2019
 
7.5
 
 
2,358

 
2,358

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2019
 
7.5
 
 
79

 
79

Radiology Partners, Inc. (3)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
6.9
 
 
7,131

 
7,131

Radiology Partners, Inc. (3)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
6.9
 
 
545

 
545

Radiology Partners, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
6.9
 
 
462

 
462

RSC Acquisition, Inc. (3)
 
Insurance
 
Senior loan
 
11/2022
 
6.4
 
 
3,340

 
3,340

RSC Acquisition, Inc.
 
Insurance
 
Senior loan
 
11/2020
 
5.8
 
 
15

 
15

Rubio's Restaurants, Inc
 
Beverage, Food and Tobacco
 
Senior loan
 
11/2018
 
5.9

 
 
1,685

 
1,685

Rug Doctor LLC
 
Personal and Non Durable Consumer Products (Mfg. Only)
 
Senior loan
 
06/2018
 
6.3

  
 
1,698

 
1,698

Saldon Holdings, Inc.
 
Diversified/Conglomerate Service
 
Senior loan
 
09/2021
 
5.5

 
 
2,103

 
2,103

Sarnova HC, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2022
 
5.8

 
 
3,317

 
3,317

SEI, Inc. (3)
 
Electronics
 
Senior loan
 
07/2021
 
5.8

  
 
5,244

 
5,243

Self Esteem Brands, LLC (3)
 
Leisure, Amusement, Motion Pictures, Entertainment
 
Senior loan
 
02/2020
 
5.8

  
 
6,729

 
6,662

Self Esteem Brands, LLC (4)
 
Leisure, Amusement, Motion Pictures, Entertainment
 
Senior loan
 
02/2020
 
 N/A

(5) 
 

 
(8
)
Severin Acquisition, LLC (3)
 
Diversified/Conglomerate Service
 
Senior loan
 
07/2021
 
6.0

  
 
7,888

 
7,809

Severin Acquisition, LLC
 
Diversified/Conglomerate Service
 
Senior loan
 
07/2021
 
6.1

  
 
1,085

 
1,078

Severin Acquisition, LLC (3)(4)
 
Diversified/Conglomerate Service
 
Senior loan
 
07/2021
 
 N/A

(5) 
 

 
(1
)
Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

  
 
5,537

 
5,426

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

  
 
437

 
429

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

 
 
436

 
427

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.6

 
 
435

 
426

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

  
 
434

 
425

Smashburger Finance LLC (4)
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
 N/A

(5) 
 

 
(14
)
Southern Anesthesia and Surgical
 
Healthcare, Education and Childcare
 
Senior loan
 
11/2017
 
6.6

  
 
187

 
187

Southern Anesthesia and Surgical
 
Healthcare, Education and Childcare
 
Senior loan
 
11/2017
 
6.6

  
 
117

 
117

Tate's Bake Shop, Inc.
 
Beverage, Food and Tobacco
 
Senior loan
 
08/2019
 
6.1

 
 
708

 
708

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior loan
 
10/2020
 
5.4

  
 
1,104

 
1,100

Transaction Data Systems, Inc.
 
Diversified/Conglomerate Service
 
Senior loan
 
06/2021
 
6.4

  
 
3,912

 
3,912

Young Innovations, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2019
 
6.1

  
 
755

 
755

Zest Holdings, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2020
 
5.9

  
 
4,708

 
4,708

  
 
 
 
 
 
 
 
 
 
 
$
158,273

 
$
157,921



89


 
(1) 
Represents the weighted average annual current interest rate as of March 31, 2017. All interest rates are payable in cash.
(2) 
Represents the fair value in accordance with Accounting Standards Codification, or ASC, Topic 820 - Fair Value Measurement, or ASC Topic 820. The determination of such fair value is not included in our board of directors' valuation process described elsewhere herein.
(3) 
We also hold a portion of the first lien senior secured loan in this portfolio company.
(4) 
The negative fair value is the result of the unfunded commitment being valued below par.
(5) 
The entire commitment was unfunded at March 31, 2017. As such, no interest is being earned on this investment.

GCIC SLF Loan Portfolio as of September 30, 2016
Portfolio Company
 
Business Description
 
Security Type
 
Maturity
Date
 
Current
Interest
Rate(1)
 
Principal ($)
 
Fair
Value(2)
 
 
 
 
 
 
 
 
 
 
 
(In thousands)
1A Smart Start LLC
 
Home and Office Furnishings, Housewares, and Durable Consumer
 
Senior loan
 
02/2022
 
5.8

 
$
1,365

 
$
1,361

Aimbridge Hospitality, LLC
 
Hotels, Motels, Inns, and Gaming
 
Senior loan
 
10/2018
 
5.8

  
 
2,431

 
2,431

American Seafoods Group LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
08/2021
 
6.0

  
 
3,108

 
3,100

Argon Medical Devices, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2021
 
5.8

  
 
3,444

 
3,444

Boot Barn, Inc.
 
Retail Stores
 
Senior loan
 
06/2021
 
5.5

 
 
5,596

 
5,596

Brandmuscle, Inc.
 
Printing and Publishing
 
Senior loan
 
12/2021
 
5.8

  
 
4,255

 
4,246

C.B. Fleet Company, Incorporated
 
Personal and Non Durable Consumer Products
 
Senior loan
 
12/2021
 
5.8

  
 
8,346

 
8,346

Checkers Drive-In Restaurants, Inc.
 
Beverage, Food and Tobacco
 
Senior loan
 
01/2022
 
6.5

 
 
3,945

 
3,915

CLP Healthcare Services, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
6.3

  
 
1,043

 
1,043

CLP Healthcare Services, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
6.3

 
 
2,070

 
2,070

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
6.5

  
 
1,064

 
1,059

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
6.5

 
 
2,117

 
2,106

Curo Health Services LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
02/2022
 
6.5

  
 
4,925

 
4,940

Encore GC Acquisition, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2020
 
7.8

  
 
73

 
73

Encore GC Acquisition, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2020
 
6.3

  
 
2,130

 
2,130

Express Oil Change, LLC
 
Retail Stores
 
Senior loan
 
12/2017
 
6.0

  
 
340

 
340

Flexan, LLC
 
Chemicals, Plastics and Rubber
 
Senior loan
 
02/2020
 
6.3

  
 
2,718

 
2,718

Harvey Tool Company, LLC
 
Diversified/Conglomerate Manufacturing
 
Senior loan
 
03/2020
 
6.0

  
 
2,005

 
2,005

Jensen Hughes, Inc.
 
Diversified/Conglomerate Service
 
Senior loan
 
12/2021
 
6.2

  
 
56

 
56

Jensen Hughes, Inc.
 
Diversified/Conglomerate Service
 
Senior loan
 
12/2021
 
6.0

  
 
89

 
89

Jensen Hughes, Inc.
 
Diversified/Conglomerate Service
 
Senior loan
 
12/2021
 
6.3

 
 
2,014

 
2,014

Loar Group Inc.
 
Aerospace and Defense
 
Senior loan
 
01/2022
 
5.8

  
 
2,000

 
2,000

Mediaocean LLC
 
Diversified/Conglomerate Service
 
Senior loan
 
08/2022
 
5.8

 
 
2,025

 
2,025

Pasternack Enterprises, Inc. and Fairview Microwave, Inc (3)
 
Diversified/Conglomerate Manufacturing
 
Senior loan
 
05/2022
 
6.0

  
 
1,530

 
1,515

Pentec Acquisition Sub, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
05/2018
 
6.3

  
 
438

 
438

PetVet Care Centers LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
12/2020
 
5.8

 
 
605

 
605

PetVet Care Centers LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
12/2020
 
5.8

  
 
2,911

 
2,911

PowerPlan Holdings, Inc. (3)
 
Utilities
 
Senior loan
 
02/2022
 
5.8

 
 
7,521

 
7,521

PPT Management, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
04/2020
 
6.0

  
 
10

 
10

PPT Management, LLC (3)
 
Healthcare, Education and Childcare
 
Senior loan
 
04/2020
 
6.0

  
 
6,293

 
6,293

Premise Health Holding Corp. (3)
 
Healthcare, Education and Childcare
 
Senior loan
 
06/2020
 
5.5

 
 
5,985

 
5,985

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2019
 
7.8

  
 
90

 
90

Pyramid Healthcare, Inc. (3)
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2019
 
6.8

 
 
2,012

 
2,012



90


GCIC SLF Loan Portfolio as of September 30, 2016 - (continued)
Portfolio Company
 
Business Description
 
Security Type
 
Maturity
Date
 
Current
Interest
Rate(1)
 
Principal ($)
 
Fair
Value(2)
 
 
 
 
 
 
 
 
 
 
 
(In thousands)
Radiology Partners, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
6.5

%
 
$
465

 
$
460

Radiology Partners, Inc. (3)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
6.5

  
 
728

 
722

Radiology Partners, Inc. (3)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
6.5

  
 
6,438

 
6,373

Radiology Partners, Inc. (4)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
N/A

(5) 
 

 
(5
)
Radiology Partners, Inc. (4)
 
Healthcare, Education and Childcare
 
Senior loan
 
09/2020
 
N/A

(5) 
 

 
(3
)
RSC Acquisition, Inc.
 
Insurance
 
Senior loan
 
11/2020
 
6.8

 
 
33

 
33

RSC Acquisition, Inc. (3)
 
Insurance
 
Senior loan
 
11/2022
 
6.3

  
 
148

 
148

RSC Acquisition, Inc. (3)
 
Insurance
 
Senior loan
 
11/2022
 
6.3

  
 
3,209

 
3,209

Rubio's Restaurants, Inc
 
Beverage, Food and Tobacco
 
Senior loan
 
11/2018
 
6.0

  
 
1,693

 
1,693

Rug Doctor LLC
 
Personal and Non Durable Consumer Products
 
Senior loan
 
06/2018
 
6.3

 
 
2,016

 
2,016

Saldon Holdings, Inc.
 
Diversified/Conglomerate Service
 
Senior loan
 
09/2021
 
5.5

 
 
2,186

 
2,186

Sarnova HC, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2022
 
5.8

  
 
3,334

 
3,334

SEI, Inc.
 
Electronics
 
Senior loan
 
07/2021
 
5.8

  
 
5,270

 
5,270

Self Esteem Brands, LLC
 
Leisure, Amusement, Motion Pictures and Entertainment
 
Senior loan
 
02/2020
 
5.0

  
 
5,106

 
5,106

Severin Acquisition, LLC (3)
 
Diversified/Conglomerate Service
 
Senior loan
 
07/2021
 
5.9

 
 
7,928

 
7,890

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

 
 
455

 
445

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

  
 
456

 
447

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

  
 
457

 
448

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

  
 
458

 
449

Smashburger Finance LLC
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
6.8

  
 
5,800

 
5,685

Smashburger Finance LLC (4)
 
Beverage, Food and Tobacco
 
Senior loan
 
05/2018
 
N/A

(5) 
 

 
(14
)
Tate's Bake Shop, Inc. (3)
 
Beverage, Food and Tobacco
 
Senior loan
 
08/2019
 
6.0

 
 
712

 
712

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior loan
 
10/2020
 
5.3

  
 
1,104

 
1,100

Transaction Data Systems, Inc.
 
Diversified/Conglomerate Service
 
Senior loan
 
06/2020
 
5.5

  
 
9

 
8

Transaction Data Systems, Inc.
 
Diversified/Conglomerate Service
 
Senior loan
 
06/2021
 
6.3

 
 
2,763

 
2,763

Worldwide Express Operations, LLC
 
Cargo Transport
 
Senior loan
 
07/2019
 
6.0

 
 
100

 
100

Worldwide Express Operations, LLC (3)
 
Cargo Transport
 
Senior loan
 
07/2019
 
6.0

  
 
5,963

 
5,963

Young Innovations, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2018
 
6.8

  
 
10

 
10

Young Innovations, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2019
 
5.3

  
 
354

 
356

Zest Holdings, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2020
 
5.8

  
 
4,732

 
4,732

  
 
 
 
 
 
 
 
 
 
 
$
146,481

 
$
146,123

 
(1) 
Represents the weighted average annual current interest rate as of September 30, 2016. All interest rates are payable in cash.
(2) 
Represents the fair value in accordance with ASC Topic 820. The determination of such fair value is not included in our board of directors' valuation process described elsewhere herein.
(3) 
We also hold a portion of the first lien senior secured loan in this portfolio company.
(4) 
The negative fair value is the result of the unfunded commitment being valued below par.
(5) 
The entire commitment was unfunded at September 30, 2016. As such, no interest is being earned on this investment.


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As of March 31, 2017, we have committed to fund $109.4 million of LLC equity interest subscriptions to GCIC SLF. As of March 31, 2017 and September 30, 2016, $51.3 million and $12.3 million, respectively, of our LLC equity interest subscriptions to GCIC SLF had been called and contributed, net of return of capital distributions subject to recall. For the three and six months ended March 31, 2017, we received $1.2 million and $1.7 million, respectively, in dividend income from the GCIC SLF LLC equity interests. For the three and six months ended March 31, 2016, we did not earn dividend income from the GCIC SLF LLC equity interests.

As of September 30, 2016, the amortized cost and fair value of the subordinated notes held by us was $34.9 million and $34.9 million, respectively. As of September 30, 2016, the subordinated notes paid a weighted average interest rate of three-month LIBOR plus 8.0%. For the six months ended March 31, 2017, we earned interest income on the subordinated notes of $0.7 million. The subordinated notes held by us were redeemed on December 30, 2016, and, therefore, no interest income was earned for the three months ended March 31, 2017. For the three and six months ended March 31, 2016, we earned interest income on the subordinated notes of $0.7 million and $1.2 million, respectively.

For the three and six months ended March 31, 2017, we earned an annualized total return on our weighted average capital invested in GCIC SLF of 9.5% and 10.0%, respectively. For the three and six months ended March 31, 2016, we earned an annualized total return on our weighted average capital invested in GCIC SLF of 9.2% and 8.1%, respectively. The annualized total return on weighted average capital invested is calculated by dividing total income earned on our investments in GCIC SLF by the combined daily average of our investments in (1) the principal of the GCIC SLF subordinated notes, if any, and (2) the NAV of the GCIC SLF LLC equity interests.

See below for certain summarized financial information for GCIC SLF as of March 31, 2017 and September 30, 2016 and for the three and six months ended March 31, 2017 and 2016:
  
As of March 31, 2017
 
As of September 30, 2016
  
(In thousands)
Selected Balance Sheet Information:
  

 
  

Investments, at fair value
$
157,921

 
$
146,123

Cash and other assets
3,319

 
3,344

Total assets
$
161,240

 
$
149,467

Senior credit facility
$
102,000

 
$
95,500

Unamortized debt issuance costs
(984
)
 
(1,122
)
Other liabilities
312

 
282

Total liabilities
101,328

 
94,660

Subordinated notes and members’ equity
59,912

 
54,807

Total liabilities and members' equity
$
161,240

 
$
149,467



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Three months ended March 31,
 
Six months ended March 31,
  
2017
 
2016
 
2017
 
2016
 
(In thousands)
 
(In thousands)
Selected Statement of Operations Information:
  

 
  

 
 
 
 
Interest income
$
2,612

 
$
1,642

 
$
5,053

 
$
2,353

Total investment income
2,612

 
1,642

 
5,053

 
2,353

Interest expense
903

 
1,415

 
2,616

 
2,249

Administrative service fee
51

 
57

 
106

 
74

Other expenses
24

 
20

 
48

 
39

Total expenses
978

 
1,492

 
2,770

 
2,362

Net investment income (loss)
1,634

 
150

 
2,283

 
(9
)
Net change in unrealized appreciation (depreciation) on investments and subordinated notes
(99
)
 
558

 
(37
)
 
669

Net increase (decrease) in net assets
$
1,535

 
$
708

 
$
2,246

 
$
660


Prior to their termination, GCIC SLF elected to fair value the subordinated notes issued to us and Aurora under ASC Topic 825 — Financial Instruments, or ASC Topic 825. The subordinated notes were valued by calculating the net present value of the future expected cash flow streams using an appropriate risk-adjusted discount rate model. For each of the three and six months ended March 31, 2017, GCIC SLF did not recognize unrealized appreciation or depreciation on the subordinated notes. For each of the three and six months ended March 31, 2016, GCIC SLF recognized $0.4 million in unrealized depreciation on the subordinated notes.

As of March 31, 2017, GCIC SLF had no subordinated notes outstanding. As of September 30, 2016, GCIC SLF had $39.9 million of aggregate contractual principal amounts of subordinated notes outstanding for which the fair value option was elected with a fair value and carrying value of $39.9 million.

Contractual Obligations and Off-Balance Sheet Arrangements

A summary of our significant contractual payment obligations as of March 31, 2017 is as follows:
 
Payments Due by Period (In millions)
  
Total
 
Less Than
1 Year
 
1 – 3 Years
 
3 – 5 Years
 
More Than
5 Years
GCIC 2016 Debt Securitization
$
252.5

 
$

 
$

 
$

 
$
252.5

Credit Facility
270.2

 

 

 
270.2

 

SMBC Revolver
49.2

 

 
49.2

 

 

Revolver

 

 

 

 

Unfunded commitments (1)
54.2

 
54.2

 

 

 

Total contractual obligations
$
626.1

 
$
54.2

 
$
49.2

 
$
270.2

 
$
252.5

 
(1) 
Unfunded commitments represent unfunded commitments to fund investments, excluding our investments in GCIC SLF, as of March 31, 2017. These amounts may or may not be funded to the borrowing party now or in the future. The unfunded commitments relate to loans with various maturity dates, but we are showing this amount in the less than one year category as this entire amount was eligible for funding to the borrowers as of March 31, 2017, subject to the terms of each loan’s respective credit agreement.


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We may become a party to financial instruments with off-balance sheet risk in the normal course of our business to meet the financial needs of our portfolio companies. These instruments may include commitments to extend credit and involve, to varying degrees, elements of liquidity and credit risk in excess of the amount recognized in the balance sheet. As of March 31, 2017 and September 30, 2016, we had outstanding commitments to fund investments, excluding our investments in GCIC SLF, totaling $54.2 million and $42.7 million, respectively. We have commitments of up to $58.0 million and $62.2 million to GCIC SLF as of March 31, 2017 and September 30, 2016, respectively, that may be contributed primarily for the purpose of funding new investments approved by the GCIC SLF investment committee.

We have certain contracts under which we have material future commitments. We have entered into the Investment Advisory Agreement with GC Advisors in accordance with the 1940 Act. Under the Investment Advisory Agreement, GC Advisors provides us with investment advisory and management services.

Under the Administration Agreement, the Administrator furnishes us with office facilities and equipment, provides us with clerical, bookkeeping and record keeping services at such facilities and provides us with other administrative services necessary to conduct our day-to-day operations. The Administrator also provides on our behalf managerial assistance to those portfolio companies to which we are required to offer to provide such assistance.

If any of the contractual obligations discussed above is terminated, our costs under any new agreements that we enter into may increase. In addition, we would likely incur significant time and expense in locating alternative parties to provide the services we receive under our Investment Advisory Agreement and our Administration Agreement. Any new investment advisory agreement would also be subject to approval by our stockholders.

Distributions

We intend to make monthly or quarterly distributions to our stockholders as determined by our board of directors. For additional information on distributions, see “Critical Accounting Policies - Income Taxes.”

We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of our distributions from time to time. In addition, we may be limited in our ability to make distributions due to the asset coverage requirements applicable to us as a business development company under the 1940 Act. If we do not distribute a certain percentage of our income annually, we will suffer adverse U.S. federal income tax consequences, including the possible loss of our ability to be subject to tax as a RIC. We cannot assure stockholders that they will receive any distributions.

To the extent our taxable earnings fall below the total amount of our distributions for any tax year, a portion of those distributions may be deemed a return of capital to our stockholders for U.S. federal income tax purposes. Thus, the source of a distribution to our stockholders may be the original capital invested by the stockholder rather than our income or gains. Stockholders should read any written disclosure accompanying a distribution payment carefully and should not assume that the source of any distribution is our ordinary income or gains.

We have adopted an “opt out” dividend reinvestment plan for our common stockholders. As a result, if we declare a distribution, our stockholders’ cash distributions will be automatically reinvested in additional shares of our common stock unless a stockholder specifically “opts out” of our dividend reinvestment plan. If a stockholder opts out, that stockholder will receive cash distributions. Although distributions paid


94


in the form of additional shares of our common stock will generally be subject to U.S. federal, state and local taxes in the same manner as cash distributions, stockholders participating in our dividend reinvestment plan will not receive any corresponding cash distributions with which to pay any such applicable taxes.

Related Party Transactions

We have entered into a number of business relationships with affiliated or related parties, including the following:

We entered into the Investment Advisory Agreement with GC Advisors. Each of Mr. Lawrence Golub, our chairman, and Mr. David Golub, our president and chief executive officer, is a manager of GC Advisors, and each of Messrs. Lawrence Golub and David Golub owns an indirect pecuniary interest in GC Advisors.

Golub Capital LLC provides us with the office facilities and administrative services necessary to conduct day-to-day operations pursuant to our Administration Agreement.

We have entered into a license agreement with Golub Capital LLC, pursuant to which Golub Capital LLC has granted us a non-exclusive, royalty-free license to use the name “Golub Capital.”

GC Advisors serves as collateral manager to the GCIC 2016 Issuer under the 2016 GCIC Collateral Management Agreement and receives a fee for providing these services that is offset against the base management fee payable by us under the Investment Advisory Agreement.

Under a staffing agreement, or the Staffing Agreement, Golub Capital LLC has agreed to provide GC Advisors with the resources necessary to fulfill its obligations under the Investment Advisory Agreement. The Staffing Agreement provides that Golub Capital LLC will make available to GC Advisors experienced investment professionals and provide access to the senior investment personnel of Golub Capital LLC for purposes of evaluating, negotiating, structuring, closing and monitoring our investments. The Staffing Agreement also includes a commitment that the members of GC Advisors’ investment committee will serve in such capacity. Services under the Staffing Agreement are provided on a direct cost reimbursement basis.

We have entered into the Revolver with GC Advisors in order to have the ability to borrow funds on a short-term basis.

Immediately prior to our election to be regulated as a business development company, we acquired our initial portfolio of investments by purchasing (1) all of the outstanding equity interests of GCIC Holdings LLC, or GCIC Holdings, and GCIC Funding, from GEMS Fund, L.P., a Delaware limited partnership whose general partner is controlled by GC Advisors, and (2) loans from certain unaffiliated third-party investors. At the time of our acquisition of their respective equity interests, the only assets (other than certain cash and cash equivalents) of GCIC Funding and GCIC Holdings were senior secured and one stop loans to U.S. middle-market companies consistent with our investment objectives and strategies. Each of the loans acquired in our formation transactions had been underwritten by GC Advisors at the time of origination or acquisition using the same criteria and standards as GC Advisors uses in connection with the origination or acquisition of loans for us.

GC Advisors also sponsors or manages, and may in the future sponsor or manage, other investment funds, accounts or investment vehicles (together referred to as “accounts”) that have investment mandates that are


95


similar, in whole and in part, with ours. For example, GC Advisors presently serves as the investment adviser to Golub Capital BDC, Inc., a publicly-traded business development company (NASDAQ: GBDC) that focuses on investing primarily in senior secured and one stop loans of U.S. middle-market companies. In addition, our officers and directors serve in similar capacities for Golub Capital BDC, Inc. GC Advisors and its affiliates may determine that an investment is appropriate for us and for one or more of these other accounts. In such event, depending on the availability of such investment and other appropriate factors, and pursuant to GC Advisors’ allocation policy, GC Advisors or its affiliates may determine that we should invest side-by-side with one or more other accounts. We do not intend to make any investments if they are not permitted by applicable law and interpretive positions of the SEC and its staff, or if they are inconsistent with GC Advisors’ allocation procedures.

In addition, we have adopted a formal code of ethics that governs the conduct of our and GC Advisors’ officers, directors and employees. Our officers and directors also remain subject to the duties imposed by both the 1940 Act and the General Corporation Law of the State of Maryland.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following items as critical accounting policies.

Fair Value Measurements

We value investments for which market quotations are readily available at their market quotations. However, a readily available market value is not expected to exist for many of the investments in our portfolio, and we value these portfolio investments at fair value as determined in good faith by our board of directors under our valuation policy and process.

Valuation methods may include comparisons of the portfolio companies to peer companies that are public, determination of the enterprise value of a portfolio company, discounted cash flow analysis and a market interest rate approach. The factors that are taken into account in fair value pricing investments include: available current market data, including relevant and applicable market trading and transaction comparables; applicable market yields and multiples; 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 discounted cash flows and the markets in which it does business; comparisons of financial ratios of peer companies that are public; comparable merger and acquisition transactions; and the principal market and enterprise values. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we will consider the pricing indicated by the external event to corroborate the private equity valuation. Due to the inherent uncertainty of determining the fair value of 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 used had a readily available market value existed for such investments and may differ materially from values that may ultimately be received or settled.

Our board of directors is ultimately and solely responsible for determining, in good faith, the fair value of investments that are not publicly traded, whose market prices are not readily available on a quarterly basis or any other situation where portfolio investments require a fair value determination.

With respect to investments for which market quotations are not readily available, our board of directors undertakes a multi-step valuation process each quarter, as described below:



96


Our quarterly valuation process begins with each portfolio company investment being initially valued by the investment professionals of GC Advisors responsible for credit monitoring.
Preliminary valuation conclusions are then documented and discussed with our senior management and GC Advisors.
The audit committee of our board of directors reviews these preliminary valuations.
At least once annually, the valuation for each portfolio investment is reviewed by an independent valuation firm.
The board of directors discusses valuations and determines the fair value of each investment in our portfolio in good faith.

In connection with each sale of shares of our common stock, we make a determination that we are not selling shares of our common stock at a price below the then-current net asset value per share of common stock at the time at which the sale is made or otherwise in violation of the 1940 Act.  GC Advisors will consider the following factors, among others, in making such determination:

The net asset value of our common stock disclosed in the most recent periodic report filed with the SEC; 
Its assessment of whether any change in the net asset value per share of our common stock has occurred (including through the realization of gains on the sale of portfolio securities) during the period beginning on the date of the most recently disclosed net asset value per share of our common stock and ending two days prior to the date of the sale; and
The magnitude of the difference between the sale price of the shares of common stock and management’s assessment of any change in the net asset value per share of our common stock during the period discussed above.

Determination of fair values involves subjective judgments and estimates. Under current accounting standards, the notes to our consolidated financial statements refer to the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our consolidated financial statements.

We follow ASC Topic 820 for measuring fair value. Fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the assets or liabilities or market and the assets’ or liabilities’ complexity. Our fair value analysis includes an analysis of the value of any unfunded loan commitments. Assets and liabilities are categorized for disclosure purposes based upon the level of judgment associated with the inputs used to measure their value. The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the asset or liability as of the measurement date. The three levels are defined as follows:

Level 1: Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
Level 2: Inputs include quoted prices for similar assets or liabilities in active markets and inputs that are observable for the assets or liabilities, either directly or indirectly, for substantially the full term of the assets or liabilities.
Level 3: Inputs include significant unobservable inputs for the assets or liabilities and include situations where there is little, if any, market activity for the assets or liabilities. The inputs into the determination of


97


fair value are based upon the best information available and may require significant management judgment or estimation.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset’s or a liability’s categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and we consider factors specific to the asset or liability. We assess the levels of assets and liabilities at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfers. There were no transfers among Level 1, 2 and 3 of the fair value hierarchy for assets and liabilities during the three and six months ended March 31, 2017 and 2016. The following section describes the valuation techniques used by us to measure different assets and liabilities at fair value and includes the level within the fair value hierarchy in which the assets and liabilities are categorized.

Valuation of Investments

Level 1 investments are valued using quoted market prices. Level 2 investments are valued using market consensus prices that are corroborated by observable market data and quoted market prices for similar assets and liabilities. Level 3 investments are valued at fair value as determined in good faith by our board of directors, based on input of management, the audit committee and independent valuation firms that have been engaged at the direction of our board of directors to assist in the valuation of each portfolio investment without a readily available market quotation at least once during a trailing twelve-month period under a valuation policy and a consistently applied valuation process. This valuation process is conducted at the end of each fiscal quarter, with approximately 25% (based on the number of portfolio companies) of our valuations of debt and equity investments without readily available market quotations subject to review by an independent valuation firm. As of March 31, 2017 and September 30, 2016, with the exception of money market funds included in cash and cash equivalents and restricted cash and cash equivalents (Level 1 investments) and investments measured at fair value using the NAV, all investments were valued using Level 3 inputs of the fair value hierarchy.

When determining fair value of Level 3 debt and equity investments, we may take into account the following factors, where relevant: the enterprise value of a portfolio company, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons to publicly traded securities, and changes in the interest rate environment and the credit markets generally that may affect the price at which similar investments may be made and other relevant factors. The primary method for determining enterprise value uses a multiple analysis whereby appropriate multiples are applied to the portfolio company’s EBITDA. A portfolio company’s EBITDA may include pro-forma adjustments for items such as acquisitions, divestures, or expense reductions. The enterprise value analysis is performed to determine the value of equity investments and to determine if debt investments are credit impaired. If debt investments are credit impaired, we will use the enterprise value analysis or a liquidation basis analysis to determine fair value. For debt investments that are not determined to be credit impaired, we use a market interest rate yield analysis to determine fair value.

In addition, for certain debt investments, we may base our valuation on indicative bid and ask prices provided by an independent third party pricing service. Bid prices reflect the highest price that we and others may be willing to pay. Ask prices represent the lowest price that we and others may be willing to


98


accept. We generally use the midpoint of the bid/ask range as our best estimate of fair value of such investment.

Due to the inherent uncertainty of determining the fair value of Level 3 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 used had a market existed for such investments and may differ materially from the values that may ultimately be received or settled. Further, such investments are generally subject to legal and other restrictions or otherwise are less liquid than publicly traded instruments. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we may realize significantly less than the value at which such investment had previously been recorded.

Our investments are subject to market risk. Market risk is the potential for changes in the value due to market changes. Market risk is directly impacted by the volatility and liquidity in the markets in which the investments are traded.

Valuation of Other Financial Assets and Liabilities

Fair value of our debt is estimated using Level 3 inputs by discounting remaining payments using comparable market rates or market quotes for similar instruments at the measurement date, if available.

Revenue Recognition:

Our revenue recognition policies are as follows:

Investments and Related Investment Income: Interest income is accrued based upon the outstanding principal amount and contractual interest terms of debt investments. Premiums, discounts, and origination fees are amortized or accreted into interest income over the life of the respective debt investment. For investments with contractual PIK interest, which represents contractual interest accrued and added to the principal balance that generally becomes due at maturity, we do not accrue PIK interest if the portfolio company valuation indicates that the PIK interest is not likely to be collectible. In addition, we may generate revenue in the form of amendment, structuring or due diligence fees, fees for providing managerial assistance, consulting fees and prepayment premiums on loans and record these fees as fee income when received. Loan origination fees, original issues discount and market discount or premium are capitalized, and we accrete or amortize such amounts as interest income. We record prepayment premiums on loans as fee income. Dividend income on preferred equity securities is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies. Distributions received from LLC and limited partnership, or LP, investments are evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, we 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.

We account for investment transactions on a trade-date basis. Realized gains or losses on investments are measured by the difference between the net proceeds from the disposition and the cost basis of investment, without regard to unrealized gains or losses previously recognized. We report changes in fair value of investments from the prior period that is measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investments in our consolidated statements of operations.


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Non-accrual: Loans may be left on accrual status during the period we are pursuing repayment of the loan. Management reviews all loans that become past due 90 days or more on principal and interest or when there is reasonable doubt that principal or interest will be collected for possible placement on non-accrual status. We generally reverse accrued interest when a loan is placed on non-accrual. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. We restore non-accrual loans to accrual status when past due principal and interest are paid and, in our management’s judgment, are likely to remain current. The total fair value of our non-accrual loans was less than $0.1 million as of each of March 31, 2017 and September 30, 2016.

Income taxes:

We have elected to be treated as a RIC under Subchapter M of the Code and operate in a manner so as to qualify for the tax treatment applicable to RICs. In order to be subject to tax as a RIC, we are required to meet certain source of income and asset diversification requirements, as well as timely distribute to our stockholders dividends for U.S. federal income tax purposes of an amount generally at least equal to 90% of investment company taxable income, as defined by the Code and determined without regard to any deduction for dividends paid, for each tax year. We have made and intend to continue to make the requisite distributions to our stockholders, which will generally relieve us from U.S. federal income taxes.

On January 1, 2015, GCIC Equity LLC, or GCIC Equity, elected to be classified as a corporation for U.S. federal income tax purposes. Effective May 2, 2016, GCIC Equity merged with GCIC Holdings, with GCIC Holdings as the surviving LLC. As part of the merger, GCIC Equity elected deemed-sale treatment and the assets of GCIC Equity were treated as sold at fair value for tax purposes. This resulted in U.S. federal income tax expense of $44,000 and state income tax expense of $13,100, each of which was paid in August 2016.

Depending on the level of taxable income earned in a tax year, we may choose to retain taxable income in excess of current year distributions into the next tax year in an amount less than what would trigger payments of U.S. federal income tax under Subchapter M of the Code. We may then be required to incur a 4% excise tax on such income. To the extent that we determine that our estimated current year annual taxable income may exceed estimated current year distributions, we accrue excise tax, if any, on estimated excess taxable income as taxable income is earned.

Because federal income tax regulations differ from GAAP, distributions in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified within capital accounts in the financial statements to reflect their tax character. For example, permanent differences in classification may result from the treatment of distributions paid from short-term gains as ordinary income dividends for tax purposes. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future.



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Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are subject to financial market risks, including changes in interest rates. Many of the loans in our portfolio have floating interest rates, and we expect that our loans in the future may also have floating interest rates. These loans are usually based on a floating LIBOR and typically have interest rate reset provisions that adjust applicable interest rates under such loans to current market rates on a quarterly basis. The loans that are subject to floating LIBOR are also subject to a minimum base rate, or floor, that we charge on our loans if the current market rates are below the respective floors. As of March 31, 2017 and September 30, 2016, the weighted average LIBOR floor on the loans subject to floating interest rates was 1.01% and 1.01%, respectively. In addition, the Credit Facility has a floating interest rate provision based on one-month LIBOR that resets daily, the SMBC Revolver has a floating interest rate provision based on one-month LIBOR that resets monthly, and the Class A and B GCIC 2016 Notes issued as part of the GCIC 2016 Debt Securitization have floating interest rate provisions based on three-month LIBOR that reset quarterly. We expect that other credit facilities into which we enter in the future may have floating interest rate provisions.

Assuming that the interim and unaudited consolidated statement of financial condition as of March 31, 2017 were to remain constant and that we took no actions to alter our interest rate sensitivity as of such date, the following table shows the annualized impact of hypothetical base rate changes in interest rates.
Change in interest rates
 
Increase (decrease) in
interest income
 
Increase (decrease) in
interest expense
 
Net increase
(decrease) in
 investment income
  
 
(In thousands)
Down 25 basis points
 
$

 
$
(1,430
)
 
$
1,430

Up 50 basis points
 
7,042

 
2,860

 
4,182

Up 100 basis points
 
12,509

 
5,719

 
6,790

Up 150 basis points
 
17,976

 
8,579

 
9,397

Up 200 basis points
 
23,444

 
11,438

 
12,006


Although we believe that this analysis is indicative of our sensitivity to interest rate changes as of March 31, 2017, it does not adjust for changes in the credit market, credit quality, the size and composition of the assets in our portfolio and other business developments, including borrowings under the GCIC 2016 Debt Securitization, the Credit Facility, the Revolver, the SMBC Revolver or other borrowings, that could affect net increase in net assets resulting from operations, or net income. Accordingly, we can offer no assurances that actual results would not differ materially from the analysis above.

We may in the future hedge against interest rate fluctuations by using standard hedging instruments such as interest rate swaps, futures, options and forward contracts to the limited extent permitted under the 1940 Act and applicable commodities laws. While 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 with respect to the investments in our portfolio with fixed interest rates.



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Item 4: Controls and Procedures.

As of March 31, 2017 (the end of the period covered by this report), management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, or the Exchange Act). Based on that evaluation, our management, including the chief executive officer and chief financial officer, concluded that, at the end of such period, our disclosure controls and procedures were effective and provided reasonable assurance that information required to be disclosed in our periodic SEC filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in the Company’s periodic reports. There has not been any change in our internal controls over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.



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Part II - Other Information

Item 1: Legal Proceedings.

Golub Capital Investment Corporation, GC Advisors and Golub Capital LLC are not currently subject to any material legal proceedings.

Item 1A: Risk Factors.

None.

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

None.

Item 3: Defaults Upon Senior Securities.

None.

Item 4: Mine Safety Disclosures.

None.

Item 5: Other Information.

None.

Item 6: Exhibits.

EXHIBIT INDEX
 
 
 
Number
 
Description
 
 
 
 
31.1
 
Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*
 
31.2
  
Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*
 
32.1
  
Certification 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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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


 
Golub Capital Investment Corporation
 
 
 
Dated: May 11, 2017
By
/s/ David B. Golub
 
 
David B. Golub
 
 
Chief Executive Officer
 
 
(Principal Executive Officer)
 
 
 
Dated: May 11, 2017
By
/s/ Ross A. Teune
 
 
Ross A. Teune
 
 
Chief Financial Officer
 
 
(Principal Accounting and Financial Officer)



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