First Eagle Alternative Capital BDC, Inc. - FORM 10-K - EX-99.1

Attached files

file	filename
EX-32.2 - EX-32.2 - First Eagle Alternative Capital BDC, Inc.	tcrd-ex322_8.htm
EX-32.1 - EX-32.1 - First Eagle Alternative Capital BDC, Inc.	tcrd-ex321_6.htm
EX-31.2 - EX-31.2 - First Eagle Alternative Capital BDC, Inc.	tcrd-ex312_10.htm
EX-31.1 - EX-31.1 - First Eagle Alternative Capital BDC, Inc.	tcrd-ex311_9.htm
EX-10.10 - EX-10.10 - First Eagle Alternative Capital BDC, Inc.	tcrd-ex1010_505.htm
EX-4.7 - EX-4.7 - First Eagle Alternative Capital BDC, Inc.	tcrd-ex47_506.htm
10-K - 10-K - First Eagle Alternative Capital BDC, Inc.	tcrd-10k_20191231.htm

Exhibit 99.1

THL Credit Logan JV LLC

(A Delaware Limited Liability Company)

Consolidated Financial Statements for the years ended December 31, 2019, 2018, and 2017

THL Credit Logan JV LLC

(A Delaware Limited Liability Company)

Table of Contents

	Page(s)

Report of Independent Auditors	1

Financial Statements:

Consolidated Statements of Assets, Liabilities and Members’ Capital	2

Consolidated Statements of Operations	3

Consolidated Statements of Changes in Members’ Capital	4

Consolidated Statements of Cash Flows	5

Consolidated Schedules of Investments	6-17

Notes to Consolidated Financial Statements	18-28

Report of Independent Auditors

To the Board of Directors of THL Credit Logan JV LLC:

We have audited the accompanying consolidated financial statements of THL Credit Logan JV LLC and its subsidiary (the “Company”), which comprise the consolidated statements of assets, liabilities, and members' capital, including the consolidated schedules of investments as of December 31, 2019 and 2018, and the related consolidated statements of operations, of changes in members' capital and of cash flows for each of the three years in the period ended December 31, 2019.

Management's Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on the consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of THL Credit Logan JV LLC and its subsidiary as of December 31, 2019 and 2018, and the results of their operations, changes in their members’ capital and their cash flows for each of the three years in the period ended December 31, 2019 in accordance with accounting principles generally accepted in the United States of America.

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts

March 5, 2020

THL Credit Logan JV LLC

Consolidated Statements of Assets, Liabilities and Members’ Capital

As of December 31, 2019 and 2018

	2019			2018
Assets
Investments at fair value (cost $340,083,379 and $337,104,247, respectively)	$	332,181,728		$	329,771,204
Cash and cash equivalents		11,560,071			26,867,919
Interest and fees receivable		1,316,733			1,137,544
Receivable for investments sold and paydown of investments		2,917,850			1,056,516
Total assets	$	347,976,382		$	358,833,183
Liabilities and Members’ Capital
Liabilities
Loans payable ($236,141,123 and $241,679,121 face amounts, respectively, reported net of unamortized debt issuance costs of $1,519,639 and $2,322,632, respectively)	$	234,621,484		$	239,356,489
Distribution payable		3,650,000			3,360,000
Payable for investments purchased		2,888,182			7,342,000
Accrued credit facility expense		2,365,145			2,571,500
Accrued expenses		210,728			172,000
Total liabilities	$	243,735,539		$	252,801,989
Commitments and contingencies (Note 9)
Members’ Capital
Paid in capital	$	121,750,000		$	115,750,000
Accumulated deficit		(17,509,157	)		(9,718,806	)
Members’ capital		104,240,843			106,031,194
Total liabilities and members’ capital	$	347,976,382		$	358,833,183

The accompanying notes are an integral part of these consolidated financial statements.

THL Credit Logan JV LLC

Consolidated Statements of Operations

For the years ended December 31, 2019, 2018, and 2017

	2019			2018			2017
Investment Income
Interest income	$	25,190,249		$	22,626,925		$	16,996,380
Other income		117,514			182,822			417,141
Total investment income		25,307,763			22,809,747			17,413,521
Expenses
Credit facility interest and fees		11,838,691			9,769,526			5,861,844
Amortization of deferred financing costs		805,229			740,789			468,483
Professional fees		95,340			96,000			99,406
Other general and administrative expenses		361,430			329,460			265,839
Total expenses		13,100,690			10,935,775			6,695,572
Net investment income		12,207,073			11,873,972			10,717,949
Realized (Loss) Gain and Change in Unrealized Depreciation on Investments
Net realized (loss) gain		(7,078,816	)		(2,132,328	)		1,133,423
Net change in unrealized depreciation on investments		(568,608	)		(5,022,870	)		(3,134,738	)
Net realized (loss) gain and change in unrealized depreciation on investments		(7,647,424	)		(7,155,198	)		(2,001,315	)
Net increase in members’ capital resulting from operations	$	4,559,649		$	4,718,774		$	8,716,634

The accompanying notes are an integral part of these consolidated financial statements.

THL Credit Logan JV LLC

Consolidated Statements of Changes in Members’ Capital

For the years ended December 31, 2019, 2018, and 2017

Members’ capital, December 31, 2016	$	74,670,786
Contributions		10,000,000
Distributions		(11,625,000	)
Net investment income		10,717,949
Net realized gain		1,133,423
Net change in unrealized depreciation on investments		(3,134,738	)
Members’ capital, December 31, 2017	$	81,762,420
Contributions		32,000,000
Distributions		(12,450,000	)
Net investment income		11,873,972
Net realized loss		(2,132,328	)
Net change in unrealized depreciation on investments		(5,022,870	)
Members’ capital, December 31, 2018	$	106,031,194
Contributions		10,000,000
Return of capital		(4,000,000	)
Distributions		(12,350,000	)
Net investment income		12,207,073
Net realized loss		(7,078,816	)
Net change in unrealized depreciation on investments		(568,608	)
Members’ capital, December 31, 2019	$	104,240,843

The accompanying notes are an integral part of these consolidated financial statements.

THL Credit Logan JV LLC

Consolidated Statements of Cash Flows

For the years ended December 31, 2019, 2018, and 2017

	2019			2018			2017
Cash flows from operating activities:
Net increase in members’ capital resulting from operations	$	4,559,649		$	4,718,774		$	8,716,634
Adjustments to reconcile net (decrease) increase in members’ capital resulting from operations to net cash used in operating activities:
Net change in unrealized depreciation on investments		568,608			5,022,870			3,134,738
Net realized loss (gain)		7,078,816			2,132,328			(1,133,423	)
Amortization of deferred financing costs		805,229			740,789			468,483
Accretion of discount		(994,590	)		(1,203,605	)		(2,316,674	)
Increase in investments due to PIK		—			—			(29,894	)
Purchase of investments		(100,531,577	)		(195,767,808	)		(170,454,801	)
Proceeds from sales and repayments of investments		85,153,067			109,812,981			124,561,998
Changes in operating assets and liabilities:
Increase in interest receivable		(179,189	)		(231,091	)		(264,692	)
(Decrease) increase in accrued credit facility expense		(206,355	)		873,582			499,318
Increase (decrease) in accrued expenses		38,728			16,000			(12,000	)
Net cash used in operating activities		(3,707,614	)		(73,885,180	)		(36,830,313	)
Cash flows from financing activities:
Repayments to credit facility		(22,000,000	)		—			—
Borrowings under credit facility		16,462,002			72,047,588			40,374,283
Contributions received		10,000,000			32,000,000			10,000,000
Return of capital		(4,000,000	)		—			—
Distributions paid		(12,060,000	)		(12,390,000	)		(12,520,000	)
Financing costs paid		(2,236	)		(1,541,564	)		(234,913	)
Net cash (used in) provided by financing activities		(11,600,234	)		90,116,024			37,619,370
Net (decrease) increase in cash		(15,307,848	)		16,230,844			789,057
Cash and cash equivalents, beginning of year		26,867,919			10,637,075			9,848,018
Cash and cash equivalents, end of year	$	11,560,071		$	26,867,919		$	10,637,075
Supplemental Disclosure of Cash Flow Information:
Cash interest paid		12,012,296			8,895,945			5,329,393
Supplemental Disclosure of Non Cash Flow Information:
Securities issued in restructuring of investments		1,577,377			—			869,704
PIK income earned		—			—			29,894

The accompanying notes are an integral part of these consolidated financial statements.

THL Credit Logan JV LLC

Consolidated Schedule of Investments

As of December 31, 2019

Company/Security/Country⁽¹¹⁾	Industry	Interest Rate ⁽¹⁾	Initial Acquisition Date	Maturity Date	Principal / Shares		Amortized Cost		Fair Value ⁽²⁾
Senior Secured First Lien Term Loans
Australia
Ticketek Pty Ltd ⁽⁹⁾	Services: Consumer	6.16% (LIBOR +4.25%)	11/22/2019	11/23/2026	$	1,500,000	$	1,485,000	$	1,500,000
Total Australia							$	1,485,000	$	1,500,000
Canada
Avison Young Canada, Inc.	Services: Business	6.91% (LIBOR +5%)	03/07/2019	02/01/2026	$	3,963,741	$	3,892,831	$	3,902,639
PNI Canada Acquireco Corp	High Tech Industries	6.3% (LIBOR +4.5%)	10/31/2018	10/31/2025		1,716,000		1,708,808		1,697,415
Total Canada							$	5,601,639	$	5,600,054
Germany
Rhodia Acetow	Consumer goods: Non-Durable	7.42% (LIBOR +5.5%)	04/21/2017	05/31/2023	$	975,000	$	966,675	$	887,250
VAC Germany Holding GmbH	Metals & Mining	5.94% (LIBOR +4%)	02/26/2018	03/08/2025		2,947,500		2,936,579		2,520,113
Total Germany							$	3,903,254	$	3,407,363
Luxembourg
Travelport Finance	Services: Consumer	6.94% (LIBOR +5%)	03/18/2019	05/30/2026	$	2,992,500	$	2,937,404	$	2,806,965
Total Luxembourg							$	2,937,404	$	2,806,965
United Kingdom
Auxey Bidco Ltd.	Services: Consumer	6.8% (LIBOR +5%)	08/07/2018	06/16/2025	$	5,000,000	$	4,836,237	$	4,850,000
Connect Finco SARL ⁽⁹⁾	Telecommunications	6.41% (LIBOR +4.5%)	09/23/2019	12/11/2026		1,431,818		1,403,182		1,442,443
EG Group	Retail	5.96% (LIBOR +4%)	03/23/2018	02/07/2025		2,816,521		2,805,937		2,810,958
Total United Kingdom							$	9,045,356	$	9,103,401
United States of America
1A Smart Start, LLC ⁽¹³⁾	Services: Consumer	6.3%(LIBOR +4.5%)	08/28/2015	02/21/2022	$	4,302,393	$	4,291,001	$	4,302,393
A Place for Mom, Inc.	Media: Advertising, Printing & Publishing	5.55% (LIBOR +3.75%)	07/28/2017	08/10/2024		3,910,000		3,897,061		3,851,350
A10 Capital, LLC ⁽¹³⁾	Banking, Finance, Insurance & Real Estate	8.24% (LIBOR +6.5%)	04/25/2018	05/01/2023		5,000,000		4,966,740		4,950,000
Achilles Acquisition, LLC	Banking, Finance, Insurance & Real Estate	5.81% (LIBOR +4%)	10/04/2018	10/03/2025		3,970,000		3,961,774		4,017,144
Advanced Integration Technology, LP	Aerospace & Defense	6.55% (LIBOR +4.75%)	07/15/2016	04/03/2023		1,935,275		1,924,782		1,903,827
Advisor Group Holdings, Inc.	Banking, Finance, Insurance & Real Estate	6.8% (LIBOR +5%)	07/31/2019	07/31/2026		1,714,286		1,698,089		1,704,651
AG Parent Holdings, LLC	High Tech Industries	6.91% (LIBOR +5%)	07/30/2019	07/31/2026		2,666,667		2,641,550		2,648,893
AgroFresh Inc.	Chemicals, Plastics & Rubber	6.55% (LIBOR +4.75%)	12/01/2015	07/31/2021		1,914,787		1,910,741		1,637,143
Air Medical Group Holdings, Inc.	Healthcare & Pharmaceuticals	6.05% (LIBOR +4.25%)	09/26/2017	03/14/2025		2,205,000		2,192,991		2,144,363
Alcami Carolinas Corp	Healthcare & Pharmaceuticals	6.05% (LIBOR +4.25%)	07/09/2018	07/06/2025		3,950,000		3,934,242		3,634,000
Alchemy US Holdco 1, LLC	Chemicals, Plastics & Rubber	7.29% (LIBOR +5.5%)	10/01/2018	10/10/2025		1,950,000		1,925,832		1,921,364
AMCP Clean Acquisition Co, LLC	Wholesale	6.19% (LIBOR +4.25%)	07/10/2018	06/16/2025		2,383,065		2,373,531		2,329,446
AMCP Clean Acquisition Co, LLC	Wholesale	6.19% (LIBOR +4.25%)	07/10/2018	06/16/2025		576,606		574,299		563,632
American Sportsman Holdings Co	Retail	6.8% (LIBOR +5%)	11/22/2016	09/25/2024		3,910,000		3,874,343		3,905,934
Ansira Holdings, Inc. ^{(3) (13)}	Media: Diversified & Production	7.55% (LIBOR +5.75%)	04/17/2018	12/20/2022		609,184		400,804		341,481

The accompanying notes are an integral part of these consolidated financial statements.

THL Credit Logan JV LLC

Consolidated Schedule of Investments

As of December 31, 2019

Company/Security/Country ⁽¹¹⁾

Industry

Interest Rate ⁽¹⁾

Initial

Acquisition

Date

Maturity

Date

Principal /

Amortized

Cost

Fair Value ⁽²⁾

Ansira Holdings, Inc. (13)

Media: Diversified & Production

7.55% (LIBOR +5.75%)

12/20/2016

12/20/2022

1,831,160

1,822,062

1,648,044

AP Gaming I, LLC

Hotel, Gaming & Leisure

5.3% (LIBOR +3.5%)

06/06/2016

02/15/2024

2,437,891

2,433,719

2,450,080

APC Aftermarket

Automotive

6.91% (LIBOR +5%)

11/11/2019

05/09/2025

184,294

139,522

172,814

APC Aftermarket

Automotive

6.9% (LIBOR +5%)

11/12/2019

05/10/2024

329,195

236,637

157,740

APFS Staffing Holdings,

Inc.

Services: Consumer

6.79% (LIBOR +5%)

04/04/2019

04/15/2026

1,990,000

1,953,817

1,990,000

AQA Acquisition

Holdings, Inc.

High Tech Industries

6.19% (LIBOR +4.25%)

10/01/2018

05/24/2023

1,974,684

1,964,810

Ascend Performance

Materials Operations,

LLC

Chemicals, Plastics & Rubber

7.19% (LIBOR +5.25%)

08/16/2019

08/27/2026

1,147,125

1,125,241

1,158,596

Avaya, Inc.

Telecommunications

5.99% (LIBOR +4.25%)

11/09/2017

12/15/2024

2,344,982

2,327,029

2,308,048

Axiom Global, Inc.

Services: Business

6.85% (LIBOR +4.75%)

09/25/2019

10/01/2026

3,000,000

2,970,842

2,988,750

Barbri, Inc.

Media: Diversified & Production

6.46% (LIBOR +4.25%)

12/01/2017

12/01/2023

3,121,622

3,111,379

3,074,797

BCP Qualtek Merger

Sub, LLC

Telecommunications

8.18% (LIBOR +6.25%)

07/16/2018

07/18/2025

3,875,000

3,813,238

3,787,813

Big Ass Fans, LLC

Capital Equipment

5.69% (LIBOR +3.75%)

11/07/2017

05/21/2024

2,449,635

2,441,348

2,463,426

Big River Steel, LLC

Metals & Mining

6.94% (LIBOR +5%)

08/15/2017

08/23/2023

1,955,000

1,943,056

1,959,281

BI-LO, LLC

Retail

9.89% (LIBOR +8%)

05/15/2018

05/31/2024

1,477,500

1,433,778

1,369,768

Brand Energy &

Infrastructure

Services, Inc.

Energy: Oil & Gas

6.12% (LIBOR +4.25%)

06/16/2017

06/21/2024

2,925,000

2,906,202

2,921,344

California Cryobank,

LLC

Healthcare & Pharmaceuticals

5.94% (LIBOR +4%)

08/03/2018

08/06/2025

3,168,229

3,155,531

3,148,586

Cambium Learning,

Inc.

Services: Consumer

6.3% (LIBOR +4.5%)

12/18/2018

12/18/2025

1,980,000

1,894,473

1,920,600

Canister International

Group Inc.

Forest Products & Paper

6.51% (LIBOR +4.75%)

12/18/2019

12/21/2026

2,000,000

1,980,039

2,008,750

CC Amulet Intermediate,

LLC ^{(4) (10) (13)}

Healthcare & Pharmaceuticals

6.66% (LIBOR +4.75%)

06/18/2018

04/30/2020

1,538,462

(2,723

)

(3,846

)

CC Amulet Intermediate,

LLC ⁽¹³⁾

Healthcare & Pharmaceuticals

6.55% (LIBOR +4.75%)

06/18/2018

04/30/2024

3,409,615

3,384,414

3,401,091

Cengage Learning Acquisitions,

Inc.

Media: Advertising, Printing & Publishing

6.05% (LIBOR +4.25%)

11/07/2019

06/07/2023

2,992,248

2,774,392

2,869,087

Clarity Telecom, LLC

Telecommunications

6.3% (LIBOR +4.5%)

06/27/2019

08/31/2026

3,990,000

3,951,978

4,019,925

Clarkson Eyecare, LLC

Healthcare & Pharmaceuticals

8.05% (LIBOR +6.25%)

08/21/2019

04/02/2021

2,094,750

2,060,377

2,063,329

Clarkson Eyecare, LLC

Healthcare & Pharmaceuticals

8.05% (LIBOR +6.25%)

08/21/2019

04/02/2021

1,396,500

1,373,584

1,375,553

Clear Balance Holdings,

LLC ⁽¹³⁾

Banking, Finance, Insurance & Real Estate

7.69% (LIBOR +5.75%)

07/07/2015

10/05/2023

4,783,123

4,769,385

4,783,123

Commercial Barge Line Co

Transportation: Cargo

10.68% (LIBOR +8.75%)

11/06/2015

11/12/2020

1,237,500

1,226,932

643,500

Constellis Holdings,

LLC ⁽¹³⁾

Aerospace & Defense

11.74% (LIBOR +10%)

12/16/2019

12/16/2020

363,746

Constellis Holdings,

LLC ⁽¹²⁾

Aerospace & Defense

6.93% (LIBOR +5%)

04/18/2017

04/21/2024

1,955,000

1,942,981

830,875

Conyers Park Parent

Merger Sub, Inc.

Beverage, Food & Tobacco

5.73% (LIBOR +3.75%)

06/21/2017

07/07/2024

1,955,000

1,948,651

1,976,994

CT Technologies

Intermediate

Holdings, Inc.

Healthcare & Pharmaceuticals

6.05% (LIBOR +4.25%)

02/11/2015

12/01/2021

1,900,450

1,903,286

1,797,826

Deerfield Holdings Corp

Banking, Finance, Insurance & Real Estate

5.05% (LIBOR +3.25%)

12/06/2017

02/13/2025

245,625

245,173

245,383

Discovery Practice

Management, Inc. ⁽¹³⁾

Healthcare & Pharmaceuticals

6.3% (LIBOR +4.5%)

07/22/2019

06/15/2024

4,974,791

4,952,182

4,912,606

Drilling Info, Inc.

High Tech Industries

6.05% (LIBOR +4.25%)

07/27/2018

07/30/2025

4,443,138

4,425,347

4,420,922

The accompanying notes are an integral part of these consolidated financial statements.

THL Credit Logan JV LLC

Consolidated Schedule of Investments

As of December 31, 2019

Company/Security/Country ⁽¹¹⁾

Industry

Interest Rate ⁽¹⁾

Initial

Acquisition

Date

Maturity

Date

Principal /

Amortized

Cost

Fair Value ⁽²⁾

DXP Enterprises, Inc.

Wholesale

6.55% (LIBOR +4.75%)

08/16/2017

08/29/2023

1,466,250

1,457,277

1,471,748

E2open, LLC ⁽¹³⁾

Transportation: Cargo

7.66% (LIBOR +5.75%)

06/21/2019

11/26/2024

4,987,500

4,942,226

4,937,625

Eliassen Group, LLC ⁽¹³⁾

Services: Business

6.3% (LIBOR +4.5%)

10/19/2018

11/05/2024

4,643,956

4,624,791

4,620,736

Empower Payments

Acquisition

Services: Business

5.94% (LIBOR +4%)

10/05/2018

10/05/2025

3,960,000

3,951,741

3,964,950

Evo Payments

International, LLC

Banking, Finance,

Insurance & Real

Estate

5.06% (LIBOR +3.25%)

12/08/2016

12/22/2023

2,567,862

2,553,245

2,587,660

Gold Standard Baking,

Inc. ^{(12) (13)}

Wholesale

6.5% (LIBOR +4.5%)

05/19/2015

07/23/2022

2,528,421

2,390,918

1,238,926

Golden West Packaging

Group, LLC

Containers, Packaging & Glass

7.55% (LIBOR +5.75%)

02/09/2018

06/20/2023

4,618,880

4,603,747

4,607,333

Granite Holdings US

Acquisition Co

Capital Equipment

7.21% (LIBOR +5.25%)

09/25/2019

09/30/2026

2,926,000

2,840,616

2,940,630

Great Dane Merger

Sub, Inc.

High Tech Industries

5.3% (LIBOR +3.5%)

05/02/2018

05/21/2025

2,955,000

2,943,651

2,914,369

Gruden Acquisition, Inc.

Transportation: Cargo

7.44% (LIBOR +5.5%)

06/21/2017

08/18/2022

1,949,239

1,924,155

1,954,112

Higginbotham Insurance

Agency, Inc.

Banking, Finance,

Insurance & Real

Estate

5.8% (LIBOR +4%)

12/14/2017

12/19/2024

4,900,000

4,882,416

4,777,500

Hoffman Southwest

Corporation ⁽¹³⁾

Environmental

Industries

6.44% (LIBOR +4.5%)

05/16/2019

08/14/2023

1,610,023

1,596,150

1,593,923

Hornblower Sub, LLC

Hotel, Gaming

& Leisure

6.44% (LIBOR +4.5%)

03/08/2019

04/27/2025

1,771,192

1,763,281

1,779,676

Idera, Inc.

High Tech Industries

6.3% (LIBOR +4.5%)

06/27/2017

06/28/2024

2,308,095

2,293,175

2,319,647

Infoblox, Inc.

High Tech Industries

6.3% (LIBOR +4.5%)

11/03/2016

11/07/2023

2,114,146

2,086,103

2,126,482

Institutional Shareholder

Services, Inc.

Services: Business

6.44% (LIBOR +4.5%)

03/04/2019

03/05/2026

1,985,000

1,967,439

1,955,225

Intermedia Holdings, Inc.

Telecommunications

7.8% (LIBOR +6%)

07/13/2018

07/11/2025

2,970,000

2,946,310

2,977,425

International Textile

Group, Inc.

Consumer

goods: Durable

6.69% (LIBOR +5%)

04/20/2018

05/01/2024

962,500

959,013

798,875

Isagenix International,

LLC

Services: Consumer

7.7% (LIBOR +5.75%)

04/26/2018

06/14/2025

1,848,782

1,834,353

1,329,274

Liaison

Services: Business

6.41% (LIBOR +4.5%)

12/13/2019

12/20/2026

2,500,000

2,493,762

2,506,250

LifeScan Global Corp

Healthcare &

Pharmaceuticals

8.06% (LIBOR +6%)

06/19/2018

10/01/2024

2,092,500

2,042,626

2,003,569

LSCS Holdings, Inc.

Healthcare &

Pharmaceuticals

6.31% (LIBOR +4.25%)

03/09/2018

03/17/2025

2,270,406

2,261,921

2,247,702

MAG DS Corp.

Aerospace & Defense

6.55% (LIBOR +4.75%)

06/01/2018

05/30/2025

2,955,000

2,932,030

2,940,225

Mavenir Systems, Inc.

Telecommunications

7.91% (LIBOR +6%)

05/01/2018

05/08/2025

1,970,000

1,939,810

1,960,150

MDVIP, Inc.

Healthcare &

Pharmaceuticals

6.05% (LIBOR +4.25%)

11/10/2017

11/14/2024

2,218,546

2,215,108

2,207,453

Merrill Communications,

LLC

Media: Advertising,

Printing & Publishing

7.09% (LIBOR +5%)

09/26/2019

09/25/2026

2,000,000

1,980,546

2,019,999

Miller’s Ale House, Inc.

Hotel, Gaming

& Leisure

6.96% (LIBOR +4.75%)

05/24/2018

05/21/2025

2,364,000

2,354,767

2,163,059

Nasco Healthcare, Inc. ⁽¹³⁾

Healthcare &

Pharmaceuticals

6.7% (LIBOR +4.5%)

07/13/2015

06/30/2021

4,442,762

4,437,196

4,442,762

National Seating &

Mobility, Inc.

Healthcare &

Pharmaceuticals

7.19% (LIBOR +5.25%)

11/12/2019

11/16/2026

2,312,500

2,289,748

2,306,719

New Insight Holdings,

Inc.

Services: Business

7.41% (LIBOR +5.5%)

12/08/2017

12/20/2024

1,960,000

1,890,326

1,962,695

NextCare, Inc. ^{(5) (10) (13)}

Healthcare &

Pharmaceuticals

6.41% (LIBOR +4.5%)

02/13/2018

06/30/2024

630,036

(4,550

)

(6,300

)

NextCare, Inc. ⁽¹³⁾

Healthcare &

Pharmaceuticals

6.3% (LIBOR +4.5%)

02/13/2018

06/30/2024

3,816,667

3,788,716

3,778,501

The accompanying notes are an integral part of these consolidated financial statements.

THL Credit Logan JV LLC

Consolidated Schedule of Investments

As of December 31, 2019

Company/Security/Country ⁽¹¹⁾

Industry

Interest Rate ⁽¹⁾

Initial

Acquisition

Date

Maturity

Date

Principal /

Amortized

Cost

Fair Value ⁽²⁾

Northern Star

Holdings, Inc.

Utilities: Electric

6.56% (LIBOR +4.5%)

03/28/2018

03/28/2025

4,175,625

4,159,917

4,112,991

Oak Point Partners,

LLC ⁽¹³⁾

Banking, Finance, Insurance & Real Estate

6.99% (LIBOR +5.25%)

09/13/2017

09/13/2023

2,925,000

2,902,455

2,895,750

OB Hospitalist Group,

Inc.

Healthcare & Pharmaceuticals

5.95% (LIBOR +4%)

08/08/2017

08/01/2024

2,191,714

2,184,483

2,169,797

Odyssey Logistics &

Technology Corporation

Transportation: Cargo

5.8% (LIBOR +4%)

10/06/2017

10/12/2024

1,943,300

1,936,006

1,921,437

Orion Business

Innovations ⁽¹³⁾

High Tech Industries

6.45% (LIBOR +4.5%)

03/04/2019

10/21/2024

827,083

819,992

822,948

Orion Business

Innovations ⁽¹³⁾

High Tech Industries

6.45% (LIBOR +4.5%)

10/18/2018

10/19/2024

2,476,411

2,456,424

2,464,029

OSM MSO, LLC ⁽¹³⁾

Healthcare & Pharmaceuticals

6.94% (LIBOR +5%)

10/16/2018

08/09/2023

3,898,052

3,868,839

3,742,130

Output Services

Group, Inc.

Services: Business

6.3% (LIBOR +4.5%)

03/26/2018

03/21/2024

4,424,566

4,407,307

3,748,639

Park Place Technologies,

LLC

High Tech Industries

5.8% (LIBOR +4%)

03/22/2018

03/22/2025

2,304,900

2,296,237

2,297,225

Parts Town

Beverage, Food & Tobacco

7.45% (LIBOR +5.5%)

11/07/2019

10/15/2025

1,000,000

995,113

997,500

Patriot Rail Co, LLC

Transportation: Cargo

7.22% (LIBOR +5.25%)

10/15/2019

10/11/2026

3,500,000

3,431,872

3,526,250

PH Beauty Holdings

III, Inc.

Containers, Packaging & Glass

6.8% (LIBOR +5%)

10/04/2018

09/28/2025

2,962,500

2,937,799

2,829,188

Pivotal Payments

Services: Business

6.8% (LIBOR +5%)

09/27/2018

09/29/2025

3,719,480

3,695,733

3,747,376

PLH Group, Inc.

Energy: Oil & Gas

7.89% (LIBOR +6%)

08/01/2018

07/25/2023

3,909,822

3,839,462

3,787,641

Polar US Borrower

Chemicals, Plastics & Rubber

6.79% (LIBOR +4.75%)

08/21/2018

10/15/2025

2,970,000

2,871,435

2,962,575

Portillo’s Holdings,

LLC

Beverage, Food & Tobacco

7.44% (LIBOR +5.5%)

11/27/2019

08/02/2024

1,995,000

1,975,235

1,996,247

Premise Health Holding

Corp ^{(6) (10)}

Healthcare & Pharmaceuticals

5.41% (LIBOR +3.5%)

08/14/2018

07/10/2025

71,456

(145

)

(744

)

Premise Health Holding

Corp

Healthcare & Pharmaceuticals

5.44% (LIBOR +3.5%)

08/14/2018

07/10/2025

889,234

885,637

879,973

Project Leopard Holdings,

Inc.

High Tech Industries

6.3% (LIBOR +4.5%)

06/21/2017

07/07/2023

1,710,713

1,707,907

1,725,690

PSC Industrial Outsourcing,

Chemicals, Plastics & Rubber

5.49% (LIBOR +3.75%)

10/05/2017

10/11/2024

1,960,000

1,946,560

1,951,827

Pure Fishing, Inc.

Consumer goods: Non-Durable

6.3% (LIBOR +4.5%)

12/20/2018

11/30/2025

1,191,000

1,149,773

1,115,967

QuickBase, Inc.

Services: Business

5.8% (LIBOR +4%)

03/29/2019

04/03/2026

2,089,500

2,080,161

2,086,888

Quidditch Acquisition Inc.

Beverage, Food & Tobacco

8.8% (LIBOR +7%)

03/16/2018

03/21/2025

1,003,404

988,410

1,013,438

Red Ventures, LLC

Media: Advertising, Printing & Publishing

4.8% (LIBOR +3%)

10/18/2017

11/08/2024

2,018,203

2,004,450

2,035,136

Sabre Industries, Inc.

Capital Equipment

6.04% (LIBOR +4.25%)

04/04/2019

04/15/2026

1,194,000

1,183,255

1,203,331

Silverback Merger

Sub, Inc.

High Tech Industries

5.44% (LIBOR +3.5%)

08/11/2017

08/21/2024

1,173,000

1,170,909

1,006,821

SMS Systems

Maintenance

Services, Inc.

High Tech Industries

6.8% (LIBOR +5%)

02/09/2017

10/30/2023

2,910,000

2,901,640

2,285,805

SoClean, Inc. ⁽¹³⁾

Healthcare & Pharmaceuticals

7.91% (LIBOR +6%)

02/13/2018

12/20/2022

4,943,595

4,911,507

4,844,723

Starfish- V Merger

Sub, Inc.

High Tech Industries

7.95% (LIBOR +6.25%)

08/11/2017

08/16/2024

1,222,031

1,213,892

1,176,205

Starfish- V Merger

Sub, Inc.

High Tech Industries

7.91% (LIBOR +6%)

11/06/2019

08/16/2024

1,000,000

921,259

955,000

Teneo Holdings, LLC

Services: Business

6.99% (LIBOR +5.25%)

07/15/2019

07/11/2025

2,244,375

2,161,458

2,140,573

ThoughtWorks, Inc.

High Tech Industries

5.8% (LIBOR +4%)

10/06/2017

10/11/2024

3,941,058

3,931,810

3,950,911

The accompanying notes are an integral part of these consolidated financial statements.

THL Credit Logan JV LLC

Consolidated Schedule of Investments

As of December 31, 2019

Company/Security/Country ⁽¹¹⁾

Industry

Interest Rate ⁽¹⁾

Initial

Acquisition

Date

Maturity

Date

Principal /

Amortized

Cost

Fair Value ⁽²⁾

Titan Sub, LLC

Aerospace &

Defense

6.8% (LIBOR +5%)

09/19/2019

09/21/2026

2,250,000

2,228,304

2,258,438

TOMS Shoes, LLC ⁽¹³⁾

Retail

7.29% (LIBOR +5.5%)

12/20/2019

09/30/2025

310,025

TOMS Shoes, LLC ⁽¹³⁾

Retail

6.96% (LIBOR +5%)

12/27/2019

12/31/2025

654,703

621,968

Tupelo Buyer, Inc.

Transportation:

Cargo

5.55% (LIBOR +3.75%)

10/02/2017

10/07/2024

2,182,133

2,170,299

2,183,507

Uber Technologies, Inc.

Services:

Consumer

5.74% (LIBOR +4%)

03/22/2018

04/04/2025

2,758,000

2,747,580

2,760,951

Unified Physician

Management, LLC

Healthcare &

Pharmaceuticals

6.24% (LIBOR +4.5%)

12/12/2019

11/27/2023

2,375,000

2,351,481

2,363,125

Upstream Newco, Inc.

Healthcare &

Pharmaceuticals

6.3% (LIBOR +4.5%)

10/24/2019

11/20/2026

2,933,333

2,918,899

2,959,000

US Shipping Corp

Utilities: Oil &

Gas

6.05% (LIBOR +4.25%)

03/09/2016

06/26/2021

205,934

202,560

182,252

Utility One Source, L.P.

Construction &

Building

7.3% (LIBOR +5.5%)

04/07/2017

04/18/2023

975,000

969,627

984,750

Vertiv Group

Corporation

Capital

Equipment

5.93% (LIBOR +4%)

09/30/2016

11/30/2023

1,504,310

1,477,977

1,504,310

Vistage Worldwide,

Inc.

Services:

Consumer

5.8% (LIBOR +4%)

02/06/2018

02/10/2025

2,475,900

2,471,363

2,463,521

W3 Topco, LLC

Energy: Oil &

Gas

7.90% (LIBOR +6%)

08/13/2019

08/16/2025

1,975,000

1,845,098

1,876,260

Weight Watchers

International, Inc.

Services:

Consumer

6.72% (LIBOR +4.75%)

11/20/2017

11/29/2024

2,254,675

2,222,998

2,263,130

Women’s Care

Florida, LLP

Healthcare &

Pharmaceuticals

6.3% (LIBOR +4.5%)

08/18/2017

09/29/2023

4,900,000

4,883,438

4,851,000

Wrench Group, LLC

Construction &

Building

6.19% (LIBOR +4.25%)

04/15/2019

04/30/2026

3,109,375

3,081,105

3,117,148

Wrench Group,

LLC ^{(7) (10)}

Construction &

Building

4.25% (LIBOR +2.125%)

04/15/2019

04/30/2026

1,041,667

(9,472

)

2,604

Yak Access, LLC

Energy: Oil &

Gas

6.8% (LIBOR +5%)

06/29/2018

07/02/2025

2,887,500

2,818,276

2,796,371

Zenith American

Holding, Inc. ⁽¹³⁾

Services:

Business

7.19% (LIBOR +5.25%)

03/11/2019

12/13/2024

3,948,054

3,938,771

3,908,573

Zenith American

Holding, Inc. ^{(8) (13)}

Services:

Business

7.19% (LIBOR +5.25%)

03/11/2019

12/13/2024

496,514

119,860

119,163

Total United States

of America

308,072,379

302,397,245

Total Senior Secured

First Lien Term Loans

331,045,032

324,815,028

Second Lien Term Loans

United States of America

AQA Acquisition

Holdings, Inc.

High Tech

Industries

10.09% (LIBOR +8%)

10/01/2018

05/24/2024

1,000,000

992,066

995,000

Constellis Holdings,

LLC ⁽¹²⁾

Aerospace &

Defense

10.93% (LIBOR +9%)

04/18/2017

04/21/2025

1,000,000

990,053

105,000

DiversiTech Holdings, Inc.

Consumer

goods: Durable

9.44% (LIBOR +7.5%)

05/18/2017

06/02/2025

2,000,000

1,986,408

1,960,000

Gruden Acquisition, Inc.

Transportation:

Cargo

10.44% (LIBOR +8.5%)

07/31/2015

08/18/2023

500,000

488,656

496,720

Midwest Physician

Administrative

Services, LLC

Healthcare &

Pharmaceuticals

8.8% (LIBOR +7%)

08/11/2017

08/15/2025

979,043

972,163

954,567

Park Place Technologies,

LLC

High Tech

Industries

9.8% (LIBOR +8%)

03/22/2018

03/29/2026

700,000

694,516

694,750

TKC Holdings, Inc.

Services:

Business

9.8% (LIBOR +8%)

01/31/2017

02/01/2024

1,849,630

1,840,410

1,683,163

The accompanying notes are an integral part of these consolidated financial statements.

THL Credit Logan JV LLC

Consolidated Schedule of Investments

As of December 31, 2019

Company/Security/Country ⁽¹¹⁾	Industry	Interest Rate ⁽¹⁾	Initial Acquisition Date	Maturity Date	Principal / Shares		Amortized Cost		Fair Value ⁽²⁾
Wash Multifamily Acquisition, Inc.	Services: Consumer	8.8% (LIBOR +7%)	05/04/2015	05/15/2023	$	425,479	$	424,129	$	406,333
Wash Multifamily Acquisition, Inc.	Services: Consumer	8.8% (LIBOR +7%)	05/04/2015	05/12/2023		74,521		74,284		71,167
Total United States of America							$	8,462,685	$	7,366,700
Total Second Lien Term Loans							$	8,462,685	$	7,366,700
Equity Investments
United States of America
TOMS Shoes, LLC ⁽¹³⁾	Retail		12/27/2019			8,511	$	575,662	$	—
Total United States of America							$	575,662	$	—
Total Equity Investments							$	575,662	$	—
Total Investments							$	340,083,379	$	332,181,728
Cash equivalents
Dreyfus Government Cash Management Fund							$	10,596,212	$	10,596,212
Total Cash equivalents							$	10,596,212	$	10,596,212

⁽¹⁾	Variable interest rates indexed to 30-day, 60-day, 90-day or 180-day LIBOR rates, at the borrower’s option. LIBOR rates may be subject to interest rate floors.

⁽²⁾	Represents fair value in accordance with ASC Topic 820.

⁽³⁾

Represents a delayed draw commitment of $609,184, of which $206,785 was unfunded as of December 31, 2019. Unfunded amounts of a delayed draw position have a lower rate than the contractual fully funded rate. Issuer pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁴⁾	Represents a delayed draw commitment of $1,538,462, which was unfunded as of December 31, 2019. Issuer pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁵⁾	Represents a delayed draw commitment of $630,036, which was unfunded as of December 31, 2019. Issuer pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁶⁾	Represents a delayed draw commitment of $71,456, which was unfunded as of December 31, 2019. Issuer pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁷⁾	Represents a delayed draw commitment of $1,041,667, which was unfunded as of December 31, 2019. Issuer pays 4.25% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁸⁾

Represents a delayed draw commitment of $496,514, of which $372,386 was unfunded as of December 31, 2019. Unfunded amounts of a delayed draw position have a lower rate than the contractual fully funded rate. Issuer pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁹⁾	Unsettled trade that interest will start to accrue on when the trade settles. 3 month LIBOR as of December 31, 2019 is shown to reflect possible projected interest rate.

⁽¹⁰⁾	Unfunded amount will start to accrue interest when the position is funded. 3 month LIBOR as of December 31, 2019 is shown to reflect possible projected interest rate.

⁽¹¹⁾	All investments are pledged as collateral for loans payable unless otherwise noted.

⁽¹²⁾	Loan was on non-accrual as of December 31, 2019.

⁽¹³⁾	Investments are valued using significant unobservable inputs. Refer to Level 3 fair value measurements quantitative information table in Note 3 of the Consolidated Financial for further detail.

The accompanying notes are an integral part of these consolidated financial statements.

THL Credit Logan JV LLC

Consolidated Schedule of Investments

As of December 31, 2018

Company/Security/Country ⁽¹³⁾	Industry	Interest Rate ⁽¹⁾	Initial Acquisition Date	Maturity Date	Principal / Shares		Amortized Cost		Fair Value ⁽²⁾
Senior Secured First Lien Term Loans
Canada
PNI Canada Acquireco Corp	High Tech Industries	6.85% (LIBOR +4.5%)	10/31/2018	10/31/2025	$	1,733,333	$	1,724,824	$	1,698,667
Total Canada							$	1,724,824	$	1,698,667
Germany
Rhodia Acetow	Consumer goods: Non-Durable	8.09% (LIBOR +5.5%)	04/21/2017	05/31/2023	$	985,000	$	974,127	$	955,450
VAC Germany Holding GmbH	Metals & Mining	6.8% (LIBOR +4%)	02/26/2018	02/26/2025		2,977,500		2,964,329		2,973,778
Total Germany							$	3,938,456	$	3,929,228
United Kingdom
Auxey Bidco, Ltd.	Services: Business	7.97% (LIBOR +5.5%)	08/07/2018	08/07/2025	$	5,000,000	$	4,806,114	$	4,812,500
EG Group	Retail	6.81% (LIBOR +4%)	03/23/2018	02/07/2025		2,845,171		2,832,386		2,749,146
Total United Kingdom							$	7,638,500	$	7,561,646
United States of America
1A Smart Start, LLC	Services: Consumer	7.09% (LIBOR +4.5%)	08/28/2015	02/21/2022	$	4,346,634	$	4,329,746	$	4,346,634
A Place for Mom, Inc.	Media: Advertising, Printing & Publishing	6.27% (LIBOR +3.75%)	07/28/2017	08/10/2024		3,950,000		3,934,094		3,969,750
A10 Capital, LLC	Banking, Finance, Insurance & Real Estate	8.96% (LIBOR +6.5%)	04/25/2018	04/27/2023		5,000,000		4,956,723		4,925,000
Achilles Acquisition LLC	Banking, Finance, Insurance & Real Estate	6.56% (LIBOR +4%)	10/04/2018	10/03/2025		4,000,000		3,990,272		3,950,000
Advanced Computer Software	High Tech Industries	7.14% (LIBOR +4.75%)	05/25/2018	05/31/2024		1,496,250		1,492,854		1,485,028
Advanced Integration Technology LP	Aerospace & Defense	7.46% (LIBOR +4.75%)	07/15/2016	04/03/2023		1,955,175		1,941,317		1,935,623
AgroFresh, Inc.	Chemicals, Plastics & Rubber	7.55% (LIBOR +4.75%)	12/01/2015	07/31/2021		1,934,837		1,928,162		1,909,442
Air Medical Group Holdings, Inc.	Healthcare & Pharmaceuticals	6.75% (LIBOR +4.25%)	09/26/2017	03/14/2025		2,227,500		2,212,807		2,081,120
Alcami Carolinas Corp	Healthcare & Pharmaceuticals	6.71% (LIBOR +4.25%)	07/09/2018	07/06/2025		3,990,000		3,971,197		3,970,050
Alchemy US Holdco 1, LLC	Chemicals, Plastics & Rubber	8.12% (LIBOR +5.5%)	10/01/2018	09/28/2025		2,000,000		1,970,898		1,995,000
Alpha Media, LLC	Media: Broadcasting & Subscription	9% (LIBOR +6.5%)	02/24/2016	02/25/2022		3,042,741		2,962,067		2,930,539
AMCP Clean Acquisition Co, LLC	Wholesale	7.05% (LIBOR +4.25%)	07/10/2018	07/10/2025		2,407,258		2,395,885		2,386,194
AMCP Clean Acquisition Co, LLC ⁽³⁾	Wholesale	7.15% (LIBOR +4.25%)	07/10/2018	07/10/2025		580,645		224,531		222,193
American Sportsman Holdings Co	Retail	7.52% (LIBOR +5%)	11/22/2016	09/25/2024		3,950,000		3,906,373		3,795,950
Ansira Holdings, Inc. ⁽⁴⁾	Media: Diversified & Production	8.27% (LIBOR +5.75%)	04/17/2018	12/20/2022		612,820		149,790		148,870
Ansira Holdings, Inc.	Media: Diversified & Production	8.27% (LIBOR +5.75%)	12/20/2016	12/20/2022		1,849,798		1,837,513		1,840,549
AP Gaming I, LLC	Hotel, Gaming & Leisure	6.02% (LIBOR +3.5%)	06/06/2016	02/15/2024		2,462,578		2,457,343		2,423,583
APC Aftermarket	Automotive	7.62% (LIBOR +5%)	05/09/2017	05/10/2024		492,500		484,949		448,175
Aptean, Inc.	High Tech Industries	7.06% (LIBOR +4.25%)	12/15/2017	12/20/2022		928,740		922,011		920,224
AQA Aquisition Holdings, Inc.	High Tech Industries	7.05% (LIBOR +4.25%)	10/01/2018	05/24/2023		1,994,937		1,994,937		1,984,962
ATI Merger Sub, Inc. ⁽¹¹⁾	Healthcare & Pharmaceuticals	7.31% (LIBOR +4.5%)	12/19/2018	12/05/2025		4,333,333		4,290,000		4,300,833

The accompanying notes are an integral part of these consolidated financial statements.

THL Credit Logan JV LLC

Consolidated Schedule of Investments

As of December 31, 2018

Company/Security/Country ⁽¹³⁾

Industry

Interest Rate ⁽¹⁾

Initial

Acquisition

Date

Maturity

Date

Principal /

Amortized

Cost

Fair

Value ⁽²⁾

Avaya, Inc.

Telecommunications

6.71% (LIBOR+4.25%)

11/09/2017

12/15/2024

2,588,021

2,564,212

2,505,527

Barbri, Inc.

Media:

Diversified &

Production

6.6% (LIBOR +4.25%)

12/01/2017

12/01/2023

3,121,622

3,108,777

3,059,189

BCP Qualtek Merger Sub, LLC

Telecommunications

8.28% (LIBOR+5.75%)

07/16/2018

07/18/2025

3,990,000

3,914,946

3,902,719

Beasley Mezzanine Holdings, LLC

Media:

Broadcasting &

Subscription

6.47% (LIBOR +4%)

11/17/2017

11/01/2023

2,927,347

2,915,319

2,893,199

Big Ass Fans, LLC

Capital Equipment

6.55% (LIBOR+3.75%)

11/07/2017

05/21/2024

2,474,878

2,464,598

2,443,942

Big River Steel, LLC

Metals & Mining

7.8% (LIBOR +5%)

08/15/2017

08/23/2023

1,975,000

1,959,623

1,960,187

BI-LO, LLC

Retail

10.78% (LIBOR +8%)

05/15/2018

05/31/2024

1,492,500

1,438,227

1,434,039

Bomgar Corp

High Tech Industries

6.52% (LIBOR +4%)

04/17/2018

04/18/2025

3,984,987

3,975,621

3,865,438

Brand Energy & Infrastructure Services, Inc.

Energy: Oil & Gas

6.76% (LIBOR+4.25%)

06/16/2017

06/21/2024

2,955,000

2,931,765

2,813,810

California Cryobank, LLC

Healthcare &

Pharmaceuticals

6.8% (LIBOR +4%)

08/03/2018

08/06/2025

3,200,313

3,185,200

3,200,313

Cambium Learning, Inc.

Services: Consumer

4.5%(LIBOR+4.5%)

12/18/2018

12/11/2025

2,000,000

1,900,000

1,907,500

CC Amulet Intermediate, LLC ^{(5) (12)}

Healthcare &

Pharmaceuticals

7.56% (LIBOR+4.75%)

06/18/2018

04/30/2024

1,538,462

(13,996

)

(15,385

)

CC Amulet Intermediate, LLC

Healthcare &

Pharmaceuticals

7.27%(LIBOR+4.75%)

06/18/2018

04/30/2024

3,444,231

3,412,896

3,409,788

Clear Balance Holdings, LLC

Banking, Finance,

Insurance & Real

Estate

8.55% (LIBOR+5.75%)

07/07/2015

10/05/2023

4,937,500

4,919,549

4,937,500

Commercial Barge Line Co

Transportation:

Cargo

11.27% (LIBOR +8.75%)

11/06/2015

11/12/2020

1,293,750

1,269,693

939,263

Constellis Holdings, LLC

Aerospace &

Defense

7.52% (LIBOR +5%)

04/18/2017

04/21/2024

1,970,000

1,955,062

1,891,200

Conyers Park Parent Merger Sub, Inc.

Beverage, Food &

Tobacco

6.27% (LIBOR +3.5%)

06/21/2017

07/07/2024

1,975,000

1,967,167

1,955,250

Country Fresh Holdings, LLC

Beverage, Food &

Tobacco

7.8% (LIBOR +5%)

07/14/2017

03/31/2023

4,340,351

4,307,788

3,667,596

Covenant Surgical Partners, Inc.

Healthcare &

Pharmaceuticals

7.3%(LIBOR+4.5%)

09/29/2017

10/04/2024

2,972,216

2,965,823

2,927,633

CPI Acquisition, Inc.

Services: Consumer

7.02% (LIBOR +4.5%)

08/14/2015

08/17/2022

4,187,266

4,106,515

2,684,038

CryoLife, Inc.

Healthcare &

Pharmaceuticals

6.05%(LIBOR+3.25%)

11/15/2017

12/02/2024

1,980,000

1,971,620

1,940,400

CT Technologies Intermediate Holdings, Inc.

Healthcare &

Pharmaceuticals

6.77% (LIBOR+4.25%)

02/11/2015

12/01/2021

1,920,350

1,924,711

1,601,889

Deerfield Holdings Corp

Banking, Finance,

Insurance & Real

Estate

5.77% (LIBOR+3.25%)

12/06/2017

02/13/2025

248,125

247,580

235,616

DigiCert, Inc.

High Tech

Industries

6.52% (LIBOR +4%)

09/20/2017

10/31/2024

995,006

990,819

977,594

Drilling Info, Inc.

High Tech

Industries

6.77%(LIBOR+4.25%)

07/27/2018

07/30/2025

4,488,750

4,467,558

4,477,528

DXP Enterprises, Inc.

Wholesale

7.27% (LIBOR+4.75%)

08/16/2017

08/29/2023

1,481,250

1,469,708

1,470,141

Eliassen Group, LLC

Services: Business

7.02% (LIBOR +4.5%)

10/19/2018

11/05/2024

4,166,667

4,146,173

4,145,833

Empower Payments Acquisition

Services: Business

7.05% (LIBOR+4.25%)

10/05/2018

10/05/2025

4,000,000

3,990,210

3,990,000

Evo Payments International, LLC

Banking, Finance,

Insurance & Real

Estate

5.76% (LIBOR+3.25%)

12/08/2016

12/22/2023

2,593,998

2,575,517

2,511,846

Gold Standard Baking, Inc.

Wholesale

7.31% (LIBOR +4.5%)

05/19/2015

04/23/2021

2,480,570

2,475,680

2,257,318

Golden West Packaging Group, LLC

Containers,

Packaging & Glass

7.77% (LIBOR+5.25%)

02/09/2018

06/20/2023

4,731,099

4,711,129

4,719,271

The accompanying notes are an integral part of these consolidated financial statements.

THL Credit Logan JV LLC

Consolidated Schedule of Investments

As of December 31, 2018

Company/Security/Country ⁽¹³⁾

Industry

Interest Rate ⁽¹⁾

Initial

Acquisition

Date

Maturity

Date

Principal /

Amortized Cost

Fair

Value ⁽²⁾

Great Dane Merger Sub, Inc.

High Tech Industries

6.27%(LIBOR+3.75%)

05/02/2018

05/21/2025

2,985,000

2,971,387

2,917,838

Gruden Acquisition, Inc.

Transportation: Cargo

8.3%(LIBOR+5.5%)

06/21/2017

08/18/2022

1,969,543

1,934,561

1,933,432

Gulf Finance, LLC

Energy: Oil & Gas

8.06%(LIBOR+5.25%)

08/17/2016

08/25/2023

1,874,821

1,837,436

1,445,956

Heartland Dental, LLC ^{(6) (12)}

Healthcare & Pharmaceuticals

6.56%(LIBOR+3.75%)

04/19/2018

04/17/2025

125,217

(567

)

(4,852

)

Heartland Dental, LLC

Healthcare & Pharmaceuticals

6.27%(LIBOR+3.75%)

04/19/2018

04/30/2025

1,368,085

1,361,889

1,315,072

Help/Systems Holdings, Inc.

High Tech Industries

6.27%(LIBOR+3.75%)

03/23/2018

03/28/2025

1,990,000

1,985,544

1,915,375

Higginbotham Insurance Agency, Inc.

Banking, Finance, Insurance & Real Estate

6.26%(LIBOR+3.75%)

12/14/2017

12/19/2024

4,950,000

4,928,625

4,801,500

Idera, Inc.

High Tech Industries

7.03% (LIBOR +4.5%)

06/27/2017

06/28/2024

2,331,764

2,313,336

2,336,136

Infoblox, Inc.

High Tech Industries

7.02% (LIBOR +4.5%)

11/03/2016

11/07/2023

2,135,719

2,100,036

2,132,440

Intermedia Holdings, Inc.

Telecommunications

8.52% (LIBOR +6%)

07/13/2018

07/11/2025

3,000,000

2,971,743

2,996,250

International Textile Group, Inc.

Consumer goods: Durable

7.35% (LIBOR +5%)

04/20/2018

04/19/2024

987,500

983,091

970,219

Isagenix International, LLC

Services: Consumer

8.55%(LIBOR+5.75%)

04/26/2018

06/14/2025

1,950,000

1,931,991

1,896,375

Kestra Financial, Inc.

Banking, Finance, Insurance & Real Estate

6.76%(LIBOR+4.25%)

06/10/2016

06/24/2022

3,901,935

3,867,900

3,901,935

LifeScan Global Corp

Healthcare & Pharmaceuticals

8.4% (LIBOR +6%)

06/19/2018

10/01/2024

2,250,000

2,185,070

2,131,875

LSCS Holdings, Inc.

Healthcare & Pharmaceuticals

6.96%(LIBOR+4.25%)

03/09/2018

03/17/2025

466,993

464,911

464,658

LSCS Holdings, Inc.

Healthcare & Pharmaceuticals

6.96%(LIBOR+4.25%)

03/09/2018

03/17/2025

1,809,103

1,801,037

1,800,057

Lyons Magnus, Inc.

Beverage, Food & Tobacco

6.02% (LIBOR +3.5%)

06/08/2018

11/11/2024

3,963,797

3,951,634

3,943,978

MAG DS Corp.

Aerospace & Defense

7.27%(LIBOR+4.75%)

06/01/2018

05/30/2025

2,985,000

2,957,510

2,970,075

Mavenir Systems, Inc.

Telecommunications

8.39% (LIBOR +6%)

05/01/2018

05/01/2025

1,990,000

1,953,787

1,983,791

MCS Group Holdings, LLC

Banking, Finance, Insurance & Real Estate

7.27%(LIBOR+4.75%)

05/12/2017

05/20/2024

1,970,000

1,962,388

1,622,788

MDVIP, Inc.

Healthcare & Pharmaceuticals

6.75%(LIBOR+4.25%)

11/10/2017

11/14/2024

4,256,451

4,243,775

4,229,849

Merrill Communications, LLC

Media: Advertising, Printing & Publishing

7.78%(LIBOR+5.25%)

05/29/2015

06/01/2022

747,744

745,465

747,744

Miller’s Ale House, Inc.

Hotel, Gaming & Leisure

7.1% (LIBOR +4.75%)

05/24/2018

05/21/2025

2,388,000

2,376,942

2,352,180

MLN US Holdco, LLC

Telecommunications

7.02% (LIBOR +4.5%)

07/13/2018

11/30/2025

3,000,000

2,992,562

2,915,640

Morphe, LLC

Consumer goods: Non-Durable

8.52% (LIBOR +6%)

02/21/2017

02/10/2023

2,737,500

2,709,123

2,723,813

Nasco Healthcare, Inc.

Healthcare & Pharmaceuticals

7.28% (LIBOR +4.5%)

07/13/2015

06/30/2021

4,489,283

4,479,899

4,466,837

New Insight Holdings, Inc.

Services: Business

8.02% (LIBOR +5.5%)

12/08/2017

12/20/2024

1,980,000

1,895,366

1,947,825

NextCare, Inc. ^{(7) (12)}

Healthcare & Pharmaceuticals

7.56%(LIBOR+4.75%)

02/13/2018

02/28/2023

588,235

(4,893

)

—

NextCare, Inc.

Healthcare & Pharmaceuticals

7.27%(LIBOR+4.75%)

02/13/2018

02/28/2023

3,386,176

3,358,008

3,386,176

Northern Star Holdings, Inc.

Utilities: Electric

7.55%(LIBOR+4.75%)

03/28/2018

03/14/2025

4,218,125

4,199,207

4,212,852

Oak Point Partners, LLC

Banking, Finance, Insurance & Real Estate

8.03%(LIBOR+5.25%)

09/13/2017

09/13/2023

3,000,000

2,970,630

2,955,000

OB Hospitalist Group, Inc.

Healthcare & Pharmaceuticals

6.35% (LIBOR +4%)

08/08/2017

08/01/2024

2,238,000

2,229,007

2,204,430

The accompanying notes are an integral part of these consolidated financial statements.

THL Credit Logan JV LLC

Consolidated Schedule of Investments

As of December 31, 2018

Company/Security/Country ⁽¹³⁾

Industry

Interest Rate ⁽¹⁾

Initial

Acquisition

Date

Maturity

Date

Principal /

Amortized Cost

Fair

Value ⁽²⁾

Odyssey Logistics & Technology Corporation

Transportation: Cargo

6.52% (LIBOR +4%)

10/06/2017

10/12/2024

1,980,037

1,971,052

1,920,636

OpenLink

High Tech Industries

7.27%(LIBOR+4.75%)

03/02/2018

03/21/2025

1,830,529

1,822,324

1,820,233

Orion Business Innovations ^{(8) (12)}

High Tech Industries

7.31% (LIBOR +4.5%)

10/18/2018

10/19/2024

564,516

(5,525

)

(5,645

)

Orion Business Innovations

High Tech Industries

7.16% (LIBOR +4.5%)

10/18/2018

10/19/2024

1,930,645

1,911,750

1,911,339

OSM MSO, LLC

Healthcare & Pharmaceuticals

7.8% (LIBOR +5%)

10/16/2018

08/09/2023

3,990,000

3,951,804

3,950,100

Output Services Group, Inc.

Services: Business

6.77%(LIBOR+4.25%)

03/26/2018

03/21/2024

4,468,173

4,448,349

4,345,298

Park Place Technologies, LLC

High Tech Industries

6.52% (LIBOR +4%)

03/22/2018

03/22/2025

2,328,300

2,317,874

2,307,927

PH Beauty Holdings III, Inc.

Containers, Packaging & Glass

7.52% (LIBOR +5%)

10/04/2018

09/28/2025

2,992,500

2,963,206

2,887,763

Ping Identity Corp

High Tech Industries

6.27%(LIBOR+3.75%)

01/23/2018

01/24/2025

1,492,500

1,485,967

1,485,038

Pivotal Payments

Services: Business

9% (LIBOR +4.5%)

09/27/2018

09/29/2025

3,095,690

3,065,755

3,064,733

Pivotal Payments ⁽⁹⁾

Services: Business

6.98% (LIBOR +4.5%)

09/27/2018

09/29/2025

896,552

549,826

549,530

PLH Group, Inc.

Energy: Oil & Gas

8.59% (LIBOR +6%)

08/01/2018

07/25/2023

3,172,857

3,084,659

3,109,400

Polar US Borrower

Chemicals, Plastics & Rubber

7.19%(LIBOR+4.75%)

08/21/2018

10/15/2025

3,000,000

2,883,250

2,895,000

Premise Health Holding Corp ^{(10) (12)}

Healthcare & Pharmaceuticals

6.56%(LIBOR+3.75%)

08/14/2018

07/10/2025

294,107

(703

)

(4,412

)

Premise Health Holding Corp

Healthcare & Pharmaceuticals

6.55%(LIBOR+3.75%)

08/14/2018

07/10/2025

3,696,629

3,678,968

3,641,179

Project Leopard Holdings, Inc.

High Tech Industries

6.52% (LIBOR +4%)

06/21/2017

07/07/2023

1,728,169

1,724,529

1,691,445

PSC Industrial Outsourcing, LP

Chemicals, Plastics & Rubber

6.21%(LIBOR+3.75%)

10/05/2017

10/11/2024

1,980,000

1,963,573

1,935,450

Pure Fishing, Inc. ⁽¹¹⁾

Consumer goods: Non-Durable

7.06%(LIBOR+4.25%)

12/20/2018

11/30/2025

1,200,000

1,152,000

1,158,000

Quidditch Acquisition, Inc.

Beverage, Food & Tobacco

9.47% (LIBOR +7%)

03/16/2018

03/21/2025

1,013,617

995,561

1,008,549

Red Ventures, LLC

Media: Advertising, Printing & Publishing

5.52% (LIBOR +3%)

10/18/2017

11/08/2024

2,038,641

2,021,888

1,946,902

SCS Holdings, Inc.

High Tech Industries

6.77%(LIBOR+4.25%)

11/20/2015

10/30/2022

1,558,453

1,550,985

1,540,921

Silverback Merger Sub, Inc.

High Tech Industries

6.01% (LIBOR +3.5%)

08/11/2017

08/21/2024

1,185,000

1,182,430

1,068,473

Situs Group Holdings Corporation

Banking, Finance, Insurance & Real Estate

7.02% (LIBOR +4.5%)

02/21/2018

02/27/2023

2,971,667

2,959,124

2,971,667

SMS Systems Maintenance Services, Inc.

High Tech Industries

7.52% (LIBOR +5%)

02/09/2017

10/30/2023

2,940,000

2,929,348

2,239,927

SoClean, Inc.

Healthcare & Pharmaceuticals

8.74% (LIBOR +6%)

02/13/2018

12/20/2022

5,101,090

5,056,831

5,126,595

Starfish- V Merger Sub, Inc.

High Tech Industries

7.02% (LIBOR +4.5%)

08/11/2017

08/16/2024

1,234,406

1,224,408

1,223,223

STS Operating, Inc.

Capital Equipment

6.77%(LIBOR+4.25%)

04/27/2018

12/11/2024

1,488,722

1,485,345

1,452,747

ThoughtWorks, Inc.

High Tech Industries

6.52% (LIBOR +4%)

10/06/2017

10/11/2024

3,981,069

3,969,773

3,931,305

TKC Holdings, Inc.

Services: Business

6.28%(LIBOR+3.75%)

06/08/2017

02/01/2023

294,750

293,681

281,304

TOMS Shoes, LLC

Retail

8.3%(LIBOR+5.5%)

12/18/2014

10/30/2020

1,925,000

1,879,189

1,519,143

Tupelo Buyer, Inc.

Transportation: Cargo

6.22%(LIBOR+3.75%)

10/02/2017

10/07/2024

2,204,343

2,189,883

2,160,256

The accompanying notes are an integral part of these consolidated financial statements.

THL Credit Logan JV LLC

Consolidated Schedule of Investments

As of December 31, 2018

Company/Security/Country ⁽¹³⁾

Industry

Interest Rate ⁽¹⁾

Initial

Acquisition

Date

Maturity

Date

Principal /

Amortized Cost

Fair

Value ⁽²⁾

TV Borrower US, LLC

High Tech

Industries

7.55% (LIBOR +4.75%)

02/16/2017

02/22/2024

982,500

978,858

977,587

Uber Technologies, Inc.

Services:

Consumer

6.39% (LIBOR +4%)

03/22/2018

04/04/2025

2,786,000

2,773,473

2,721,574

US Salt, LLC

Consumer

goods:

Non-Durable

7.27% (LIBOR +4.75%)

11/30/2017

12/01/2023

2,977,500

2,952,396

2,977,500

US Shipping Corp

Utilities: Oil &

Gas

6.77% (LIBOR +4.25%)

03/09/2016

06/26/2021

205,934

200,288

197,697

Utility One Source L.P.

Construction &

Building

8.02% (LIBOR +5.5%)

04/07/2017

04/18/2023

985,000

977,925

985,000

Verdesian Life Sciences, LLC

Chemicals,

Plastics &

Rubber

7.53% (LIBOR +5%)

12/09/2014

07/01/2020

1,996,192

1,897,545

1,876,421

Vertiv Group Corporation

Capital

Equipment

6.71% (LIBOR +4%)

09/30/2016

11/30/2023

1,504,310

1,471,251

1,374,564

Vistage Worldwide, Inc.

Services:

Consumer

6.46% (LIBOR +4%)

02/06/2018

02/10/2025

2,501,100

2,495,616

2,463,583

Weight Watchers International, Inc.

Services:

Consumer

7.56% (LIBOR +4.75%)

11/20/2017

11/29/2024

2,565,000

2,521,594

2,542,556

Women’s Care Florida, LLP

Healthcare &

Pharmaceuticals

7.02% (LIBOR +4.5%)

08/18/2017

09/29/2023

4,950,000

4,929,660

4,950,000

Yak Access, LLC

Energy: Oil &

Gas

7.52% (LIBOR +5%)

06/29/2018

07/02/2025

2,981,250

2,896,793

2,504,250

Zenith Merger Sub, Inc.

Services:

Business

8.3% (LIBOR +5.5%)

12/22/2017

12/13/2023

2,970,000

2,945,336

2,970,000

Total United States of America

306,979,198

299,971,903

Total Senior Secured First Lien Term Loans

320,280,978

313,161,444

Second Lien Term Loans

United States of America

ABG Intermediate Holdings 2, LLC

Retail

10.27% (LIBOR +7.75%)

09/26/2017

09/29/2025

2,333,333

2,318,455

2,298,333

AQA Aquisition Holding, Inc.

High Tech

Industries

10.4% (LIBOR +8%)

10/01/2018

05/24/2024

1,000,000

990,262

1,000,000

CH Hold Corp

Automotive

9.77% (LIBOR +7.25%)

01/26/2017

02/03/2025

1,000,000

996,187

998,750

Constellis Holdings, LLC

Aerospace &

Defense

11.52% (LIBOR +9%)

04/18/2017

04/21/2025

1,000,000

988,171

957,500

DigiCert, Inc.

High Tech

Industries

10.52% (LIBOR +8%)

09/20/2017

10/31/2025

600,000

597,475

584,250

DiversiTech Holdings, Inc.

Consumer

goods: Durable

10.3% (LIBOR +7.5%)

05/18/2017

06/02/2025

2,000,000

1,983,901

1,930,000

Gruden Acquisition, Inc.

Transportation:

Cargo

11.3% (LIBOR +8.5%)

07/31/2015

08/18/2023

500,000

485,531

501,250

Midwest Physician Administrative Services, LLC

Healthcare &

Pharmaceuticals

9.5% (LIBOR +7%)

08/11/2017

08/15/2025

979,043

970,936

948,448

NextCare, Inc.

Healthcare &

Pharmaceuticals

11.27% (LIBOR +8.75%)

02/13/2018

08/28/2023

1,000,000

987,295

1,030,000

Optiv Security Inc

High Tech

Industries

9.77% (LIBOR +7.25%)

01/19/2017

01/31/2025

1,500,000

1,494,292

1,365,000

Park Place Technologies, LLC

High Tech

Industries

10.52% (LIBOR +8%)

03/22/2018

03/29/2026

700,000

693,638

696,500

SESAC Holdco II LLC

Media:

Diversified &

Production

9.76% (LIBOR +7.25%)

02/13/2017

02/24/2025

1,000,000

992,303

985,000

TKC Holdings, Inc.

Services:

Business

10.53% (LIBOR +8%)

01/31/2017

02/01/2024

1,850,000

1,838,493

1,824,729

The accompanying notes are an integral part of these consolidated financial statements.

THL Credit Logan JV LLC

Consolidated Schedule of Investments

As of December 31, 2018

Company/Security/Country ⁽¹³⁾	Industry	Interest Rate ⁽¹⁾	Initial Acquisition Date	Maturity Date	Principal / Shares		Amortized Cost		Fair Value ⁽²⁾
TV Borrower US, LLC	High Tech Industries	11.05% (LIBOR + 8.25%)	02/16/2017	02/22/2025	$	1,000,000	$	988,389	$	1,006,250
Wash Multifamily Laundry Systems, LLC	Services: Consumer	9.52% (LIBOR+7%)	05/04/2015	05/15/2023		425,479		423,727		411,651
Wash Multifamily Laundry Systems, LLC	Services: Consumer	9.52% (LIBOR+7%)	05/04/2015	05/12/2023		74,521		74,214		72,099
Total United States of America							$	16,823,269	$	16,609,760
Total Second Lien Term Loans							$	16,823,269	$	16,609,760
Total Investments							$	337,104,247	$	329,771,204
Cash equivalents
Dreyfus Government Cash Management Fund					$	25,230,010	$	25,230,010	$	25,230,010
Total Cash equivalents							$	25,230,010	$	25,230,010

⁽¹⁾	Variable interest rates indexed to 30-day, 60-day, 90-day or 180-day LIBOR rates, at the borrower’s option. LIBOR rates may be subject to interest rate floors.

⁽²⁾	Represents fair value in accordance with ASC Topic 820.

⁽³⁾

Represents a delayed draw commitment of $580,645, of which $353,371 was unfunded as of December 31, 2018. Unfunded amounts of a delayed draw position have a lower rate than the contractual fully funded rate. Issuer pays 1.50% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁴⁾

Represents a delayed draw commitment of $612,820, of which $460,886 was unfunded as of December 31, 2018. Unfunded amounts of a delayed draw position have a lower rate than the contractual fully funded rate. Issuer pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁵⁾	Represents a delayed draw commitment of $1,538,462, which was unfunded as of December 31, 2018. Issuer pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁶⁾	Represents a delayed draw commitment of $125,217, which was unfunded as of December 31, 2018. Issuer pays 3.75% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁷⁾	Represents a delayed draw commitment of $588,235, which was unfunded as of December 31, 2018. Issuer pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁸⁾	Represents a delayed draw commitment of $564,516, which was unfunded as of December 31, 2018. Issuer does not pay unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽⁹⁾

Represents a delayed draw commitment of $896,552, of which $338,056 was unfunded as of December 31, 2018. Unfunded amounts of a delayed draw position have a lower rate than the contractual fully funded rate. Issuer pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽¹⁰⁾	Represents a delayed draw commitment of $294,107, which was unfunded as of December 31, 2018. Issuer pays 1.00% unfunded commitment fee on delayed draw term loan and/or revolving loan facilities.

⁽¹¹⁾	Unsettled trade that interest will start to accrue on when the trade settles. 3 month LIBOR as of December 31, 2018 is shown to reflect possible projected interest rate.

⁽¹²⁾	Unfunded amount will start to accrue interest when the position is funded. 3 month LIBOR as of December 31, 2018 is shown to reflect possible projected interest rate.

⁽¹³⁾	All investments are pledged as collateral for loans payable unless otherwise noted.

The accompanying notes are an integral part of these consolidated financial statements.

THL Credit Logan JV LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements

1.	Organization and Structure

On December 2, 2014, THL Credit Logan JV LLC (the “Logan JV”) was formed as a Delaware limited liability company to invest primarily in senior secured first lien term loans.

Logan JV operates under a limited liability agreement dated December 3, 2014 (the “Agreement”), by and among THL Credit, Inc., a Delaware corporation (“THL Credit”) and Perspecta Trident LLC, an affiliate of Perspecta Trust LLC, (“Perspecta”), each, a “Member” and, collectively, the “Members”. All Logan JV investment decisions must be unanimously approved by Logan JV’s investment committee consisting of one representative from each of THL Credit and Perspecta.

Logan JV is capitalized with capital contributions which are called from the Members, on a pro-rata basis based on their capital commitments, as transactions are completed. Any decision by Logan JV to call down on capital commitments requires the explicit authorization of each Member, and each Member may withhold such authorization for any reason in its sole discretion.

Logan JV invests capital contributions into its wholly owned investment company subsidiary, THL Credit Logan JV SPV I LLC (the “SPV”), a Delaware limited liability company formed on December 1, 2014. The SPV operates under a limited liability agreement dated December 3, 2014, with Logan JV, its “Initial Member” and “Designated Manager”. Logan JV shall continue without dissolution until all investments are liquidated by the company.

The SPV invests capital contributions from Logan JV, along with borrowings from a syndicated senior credit facility, primarily in broadly syndicated loans, in addition to directly originated loans.

The fully consolidated company is herein referred to as the “Company”.

2.	Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements of Logan JV have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Designated Manager has determined Logan JV is an investment company under ASC 946 in accordance with GAAP. Therefore Logan JV follows the accounting and reporting guidance for investment companies.

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires the use of certain estimates and assumptions that may affect the reported amount 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 amounts could differ significantly from the estimates included in the financial statements, and such differences could be material.

Consolidation

Logan JV follows the guidance in ASC Topic 946 Financial Services—Investment Companies (“ASC Topic 946”) and will not generally consolidate its investment in a company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to Logan JV. Logan JV has consolidated its wholly owned subsidiary, the SPV. All inter-company accounts and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

Cash and cash equivalents consist of demand deposits and a money market fund held with one financial institution as of December 31, 2019 and 2018. Cash held in demand deposit accounts may exceed the Federal Deposit Insurance Corporation insured limit and therefore is subject to credit risk. Cash equivalents are assets with an original maturity of three months or less. As of December 31, 2019 and 2018, Logan JV held $10,596,212 and $25,230,010 of cash equivalents, respectively.

THL Credit Logan JV LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (continued)

Deferred Financing Costs

Deferred financing costs consist of fees and expenses paid in connection with the closing of the credit facility. These costs are capitalized at the time of payment and are amortized using the straight line method over the term of the credit facility. Capitalized deferred financing costs related to the credit facility are presented net against the respective balance outstanding on the Consolidated Statements of Assets, Liabilities and Members’ Capital.

Distributions

Logan JV intends to make regular quarterly cash distributions of all or a portion of its net investment income and net realized gains.

Investment Transactions and Investment Income

Investment transactions are recorded on a trade-date basis. Logan JV measures realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, using the specific identification method. Logan JV reports changes in fair value of investments that are measured at fair value as a component of net change in unrealized appreciation or depreciation on investments in the Consolidated Statements of Operations.

Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis to the extent that Logan JV expects to collect such amounts. Original issue discount, principally representing the market discount or premium are capitalized and accreted or amortized into interest income over the life of the respective security using the effective yield method. The amortized cost of investments represents the original cost adjusted for the accretion/amortization of discounts and premiums and upfront loan origination fees.

Logan JV capitalizes and amortizes upfront loan origination fees received in connection with the closing of investments. The unearned income from such fees is accreted into interest income over the contractual life of the loan based on the effective interest method. Upon prepayment of a loan or debt security, any prepayment penalties, unamortized upfront loan origination fees, and unamortized discounts are recorded as interest income.

Logan JV may have investments in its portfolio which contain a contractual paid-in-kind, or PIK, interest provision. PIK interest is computed at the contractual rate specified in each investment agreement, is added to the principal balance of the investment, and is recorded as income. Logan JV will cease accruing PIK interest if there is insufficient value to support the accrual or if amounts are not expected to be collectible and will generally only begin to recognize PIK income again when all principal and interest have been paid or upon a restructuring of the investment where the interest is deemed collectable.

Loans are placed on non-accrual status when principal or interest payments are past due 30 days or more and/or when it is no longer probable that principal or interest will be collected. However, Logan JV may make exceptions to this policy if the loan has sufficient collateral value and is in the process of collection. As of December 31, 2019, the Company has loans on non-accrual with an amortized cost basis of $5,323,952 and fair value of $2,174,801. As of December 31, 2018 the Company had no loans on non-accrual.

Other income includes unused commitment fees associated with investments in portfolio companies and amendment fees.

Expenses are recorded on an accrual basis.

Revolving and Unfunded Delayed Draw Loans

For Logan JV’s investments in revolving and delayed draw loans, the cost basis of the investments purchased is adjusted for the cash received for the discount on the total balance committed. The fair value is also adjusted for unrealized appreciation or depreciation on the unfunded portion. As a result, the purchase of commitments not completely funded may result in a negative value until it is offset by the future amounts called and funded. As of December 31, 2019 and 2018, Logan JV had $3,860,792 and $4,262,850 of unfunded commitments, respectively.

THL Credit Logan JV LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (continued)

Income Taxes

As a limited liability company, Logan JV itself is not subject to U.S. Federal income taxes. Each Member is individually liable for income taxes, if any, on its share of Logan JV’s net taxable income. Interest, dividends and other income realized by Logan JV from non-U.S. sources and capital gains realized on the sale of securities of non-U.S. issuers may be subject to withholdings and other taxes levied by the jurisdiction in which the income is sourced. Each Member is required for income tax purposes to take into account its distributive share of all items of Logan JV’s income, gain, loss, deductions, and other items for such taxable year of Logan JV. The tax basis income and losses may differ from the income and losses in the Statements of Operations, which is prepared in accordance with GAAP.

Logan JV determines whether a tax position is more likely than not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. For tax positions meeting the more likely than not threshold, any tax amount recognized in the financial statements is reduced by the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant taxing authority. There were no uncertain tax positions as of December 31, 2019 and 2018. Logan JV’s federal tax years 2017 forward remain subject to examination by taxing authorities.

3.	Investment Valuation

Investments, for which market quotations are readily available, are valued using market quotations, which are generally obtained from an independent pricing service, broker-dealers or market makers.

Investments for which market quotations are not readily available, or are not considered to be the best estimate of fair value, are valued at fair value as determined in good faith by Logan JV. Consequently, it is expected that certain portfolio investments’ values will be determined in good faith by Logan JV following its documented valuation policy. 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 Logan JV’s investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.

With respect to investments for which market quotations are not readily available or not considered to be the best estimate, Logan JV develops a valuation for each investment in the Company. Logan JV may also use independent valuation firms to provide independent appraisals and present a valuation recommendation that it considers in determining the fair value of certain investments in the Company.

The types of factors that Logan JV may take into account in estimating fair value pricing of its investments include, as relevant, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, comparison to publicly traded securities and other relevant factors. Logan JV generally utilizes an income approach to value its debt investments and a combination of income and market approaches to value equity investments, if applicable. With respect to unquoted securities, Logan JV, in periodic consultation with independent third party valuation firms, values each investment considering, among other measures, discounted cash flow models, comparisons of financial ratios of peer companies that are public and other factors. For debt investments, Logan JV determines the fair value primarily using an income or yield approach that analyzes the discounted cash flows of interest and principal for the debt security, as set forth in the associated loan agreements, as well as the financial position and credit risk of each portfolio investment. Logan JV’s estimate of the expected repayment date is generally the legal maturity date of the instrument. The yield analysis considers changes in leverage levels, credit quality, portfolio company performance and other factors.

In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, Logan JV discloses the fair value of its investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The guidance establishes three levels of the fair value hierarchy as follows:

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

THL Credit Logan JV LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (continued)

Level 2 – Quoted prices in markets that are not considered to be active or financial instruments for which significant inputs are observable, either directly or indirectly;

Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

The level of an asset or liability within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by management.

Logan JV considers whether the volume and level of activity for the asset or liability have significantly decreased and identifying transactions that are not orderly in determining fair value. Accordingly, if Logan JV determines that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value. Valuation techniques such as an income approach might be appropriate to supplement or replace a market approach in those circumstances.

The following is a summary of the industry classification in which Logan JV was invested as of December 31, 2019:

Industry	Cost		Fair Value		% of Members’ Capital
Aerospace & defense	$	10,381,895	$	8,402,111		8.06	%
Automotive		376,159		330,554		0.32	%
Banking, finance, insurance & real estate		25,979,277		25,961,210		24.91	%
Beverage, food & tobacco		5,907,410		5,984,179		5.74	%
Capital equipment		7,943,196		8,111,697		7.78	%
Chemicals, plastics & rubber		9,779,810		9,631,505		9.24	%
Construction & Building		4,041,260		4,104,502		3.94	%
Consumer goods		5,061,870		4,762,092		4.57	%
Containers, packaging & glass		7,541,545		7,436,521		7.13	%
Energy		11,409,038		11,381,616		10.92	%
Environmental industries		1,596,150		1,593,923		1.53	%
Forest Products & Paper		1,980,039		2,008,750		1.93	%
Healthcare & pharmaceuticals		62,960,951		62,217,484		59.69	%
High tech industries		37,179,971		36,466,923		34.98	%
Hotel, gaming & leisure		6,551,766		6,392,816		6.13	%
Media		15,990,694		15,839,895		15.20	%
Metals & Mining		4,879,635		4,479,394		4.30	%
Retail		9,654,449		9,018,653		8.65	%
Services		67,208,070		65,999,954		63.30	%
Telecommunications		16,381,547		16,495,803		15.82	%
Transportation		16,120,145		15,663,151		15.03	%
Utilities		4,362,477		4,295,243		4.12	%
Wholesale		6,796,025		5,603,752		5.38	%
Total investments	$	340,083,379	$	332,181,728		318.67	%

THL Credit Logan JV LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (continued)

The following is a summary of the industry classification in which Logan JV was invested as of December 31, 2018:

Industry	Cost		Fair Value		% of Members’ Capital
Aerospace & defense	$	7,842,060	$	7,754,398		7.31	%
Automotive		1,481,136		1,446,925		1.36	%
Banking, finance, insurance & real estate		33,378,307		32,812,852		30.95	%
Beverage, food & tobacco		11,222,150		10,575,373		9.97	%
Capital equipment		5,421,195		5,271,253		4.97	%
Chemicals, plastics & rubber		10,643,428		10,611,313		10.01	%
Construction & Building		977,925		985,000		0.93	%
Consumer goods		10,754,638		10,714,982		10.11	%
Containers, packaging & glass		7,674,335		7,607,034		7.17	%
Energy		10,750,653		9,873,416		9.31	%
Healthcare & pharmaceuticals		63,613,182		63,052,654		59.46	%
High tech industries		50,795,705		49,555,003		46.74	%
Hotel, gaming & leisure		4,834,285		4,775,763		4.50	%
Media		18,667,217		18,521,742		17.47	%
Metals & Mining		4,923,952		4,933,965		4.65	%
Retail		12,374,630		11,796,611		11.13	%
Services		48,536,180		46,977,761		44.31	%
Telecommunications		14,397,249		14,303,927		13.49	%
Transportation		7,850,720		7,454,837		7.03	%
Utilities		4,399,495		4,410,549		4.16	%
Wholesale		6,565,805		6,335,846		5.98	%
Total investments	$	337,104,247	$	329,771,204		311.01	%

The following is a summary of the geographical concentration of Logan JV’s investment portfolio as of December 31, 2019:

	Cost		Fair Value		% of Members’ Capital
Australia	$	1,485,000	$	1,500,000		1.44	%
Canada		5,601,639		5,600,054		5.37	%
Germany		3,903,254		3,407,363		3.27	%
Luxembourg		2,937,404		2,806,965		2.69	%
United Kingdom		9,045,356		9,103,401		8.73	%
United States of America		317,110,726		309,763,945		297.17	%
Total investments	$	340,083,379	$	332,181,728		318.67	%

The following is a summary of the geographical concentration of Logan JV’s investment portfolio as of December 31, 2018:

	Cost		Fair Value		% of Members’ Capital
Canada	$	1,724,824	$	1,698,667		1.60	%
Germany		3,938,456		3,929,228		3.71	%
United Kingdom		7,638,500		7,561,646		7.13	%
United States of America		323,802,467		316,581,663		298.57	%
Total investments	$	337,104,247	$	329,771,204		311.01	%

THL Credit Logan JV LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (continued)

The following is a summary of the levels within the fair value hierarchy in which Logan JV was invested as of December 31, 2019:

	Fair Value		Level 1		Level 2		Level 3
First Lien	$	324,815,028	$	—	$	49,805,817	$	275,009,211
Second Lien		7,366,700		—		—		7,366,700
Equity		—		—		—		—
Total investments		332,181,728		—		49,805,817		282,375,911
Cash equivalents		10,596,212		10,596,212		—		—
Total assets at fair value	$	342,777,940	$	10,596,212	$	49,805,817	$	282,375,911

The following is a summary of the levels within the fair value hierarchy in which Logan JV was invested as of December 31, 2018:

	Fair Value		Level 1		Level 2		Level 3
First Lien	$	313,161,444	$	—	$	40,389,119	$	272,772,325
Second Lien		16,609,760		—		—		16,609,760
Total investments		329,771,204		—		40,389,119		289,382,085
Cash equivalents		25,230,010		25,230,010		—		—
Total assets at fair value	$	355,001,214	$	25,230,010	$	40,389,119	$	289,382,085

The following table rolls forward the changes in fair during the year ended December 31, 2019 for investments classified within Level 3:

	First Lien			Second Lien			Equity			Total
Balance as of January 1, 2019	$	272,772,325		$	16,609,760		$	—		$	289,382,085
Purchases		81,580,870			—			575,662			82,156,532
Sales and repayments		(66,992,882	)		(7,653,635	)		—			(74,646,517	)
Unrealized depreciation		(1,793,025	)		(882,476	)		(575,662	)		(3,251,163	)
Net realized gain		(4,408,564	)		(761,308	)		—			(5,169,872	)
Net accretion of premiums, discounts and fees		863,145			54,359			—		917,504
Transfers into Level 3		13,163,797			—			—			13,163,797
Transfers out of Level 3		(20,176,455	)		—			—			(20,176,455	)
Balance as of December 31, 2019	$	275,009,211		$	7,366,700		$	—		$	282,375,911

Transfers into and out of Level 3 are primarily attributable to changes in the level of market activity during the period. It is Logan JV’s policy to recognize transfers into and out of Level 3 at the beginning of the reporting period.

The following table rolls forward the changes in fair during the year ended December 31, 2018 for investments classified within Level 3:

	First Lien			Second Lien			Total
Balance as of January 1, 2018	$	183,679,166		$	15,161,368		$	198,840,534
Purchases		185,197,887			3,784,807			188,982,694
Sales and repayments		(96,549,705	)		(5,260,966	)		(101,810,671	)
Unrealized depreciation		(4,713,021	)		(302,254	)		(5,015,275	)
Net realized gain		40,454			40,563			81,017
Net accretion of premiums, discounts and fees		860,913			67,247			928,160
Transfers into Level 3		10,322,079			3,118,995			13,441,074
Transfers out of Level 3		(6,065,448	)		—			(6,065,448	)
Balance as of December 31, 2018	$	272,772,325		$	16,609,760		$	289,382,085

THL Credit Logan JV LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (continued)

The following provides quantitative information about Level 3 fair value measurements as of December 31, 2019:

Description	Fair Value at December 31, 2019 (1)		Valuation Technique	Unobservable Inputs	Weighted Average(2)
First Lien	$	30,739,069	Discounted Cash Flows (income approach)	Comparative Yield	5.9%-10.0% (7.6%)
		22,202,025	Discounted Cash Flows (income approach)	Weighted Average Cost of Capital (WACC)	5.5%-13.1% (6.7%)
		12,093,026	Market comparable companies (market approach)	EBITDA multiple	0.3x-8.0x (6.1x)
Equity		0	Market comparable companies (market approach)	EBITDA multiple	5.7x
	$	65,034,120

⁽¹⁾

Included within the Level 3 assets of $282,375,911 is an amount of $217,341,791 for which Logan JV did not develop the unobservable inputs for the determination of fair value (examples included single source quotation and prior or pending transactions).

⁽²⁾

Weighted average based upon the fair value of the investments in each investment category.

The following provides quantitative information about Level 3 fair value measurements as of December 31, 2018:

Description	Fair Value at December 31, 2018 ⁽¹⁾		Valuation Technique	Unobservable Inputs	Weighted Average⁽²⁾
First Lien	$	54,894,557	Discounted Cash Flows (income approach)	Weighted Average Cost of Capital (WACC)	7.0%-13.9% (9.0%)
		2,257,318	Market comparable companies (market approach)	EBITDA multiple	(6.2x)
Second Lien		1,030,000	Discounted Cash Flows (income approach)	Weighted Average Cost of Capital (WACC)	9.9%-11.8% (10.9%)
	$	58,181,875

⁽¹⁾

Included within the Level 3 assets of $289,382,085 is an amount of $231,200,210 for which the Logan JV did not develop the unobservable inputs for the determination of fair value (examples included single source quotation and prior or pending transactions).

⁽²⁾

Weighted average based upon the fair value of the investments in each investment category.

The two primary significant unobservable input used in the fair value measurement of the Company’s debt securities is the weighted average cost of capital, or WACC, and the comparative yield. Significant increases (decreases) in the WACC or in the comparative yield in isolation would result in a significantly lower (higher) fair value measurement. In determining the WACC, for the income, or yield approach, the Company considers current market yields and multiples, portfolio company performance, leverage levels, credit quality, among other factors, the performance of the portfolio company and the expected term of the investment. Changes in one or more of these factors can have a similar directional change on other factors in determining the appropriate WACC to use in the income approach. In determining the comparative yield, for the income, or yield approach, the Company considers current market yields and multiples, weighted average cost of capital, portfolio company performance,

THL Credit Logan JV LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (continued)

leverage levels, credit quality, among other factors. Changes in one or more of these factors can have a similar directional change on other factors in determining the appropriate comparative yield to use in the income approach. Significant increases (decreases) in the multiple in isolation would result in a significantly higher (lower) fair value measurement. To determine the multiple for the market approach, the Company considers current market trading and/or transaction multiples, portfolio company performance (financial ratios) relative to public and private peer companies and leverage levels, among other factors. Changes in one or more of these factors can have a similar directional change on other factors in determining the appropriate multiple to use in the market approach.

4.	Credit Facility

On December 17, 2014, Logan JV, through Logan JV SPV, entered into a senior credit facility (the “Facility”) with Deutsche Bank AG. The facility as amended allows the Company to borrow up to $275,000,000 subject to a borrowing base from Deustche Bank AG and other co-lenders. The current revolving loan period ends on January 12, 2021 and the final maturity date is January 12, 2023.

As of December 31, 2019 and 2018, the Company had $236,141,123 and $241,679,121 of outstanding borrowings under the Facility, respectively. The Facility requires payment of interest on a quarterly basis using three month LIBOR (with no LIBOR floor) plus 2.20%. The Facility’s all-in interest rate as of December 2019 and 2018 was 4.19% and 4.64%, respectively.

Borrowings under the Facility are subject to, among other things, a minimum borrowings base. The Facility has certain collateral requirements and/or financial covenants, including covenants related to: (a) limitations on the incurrence of additional indebtedness, (b) eligibility of certain investments, (c) limitations on concentrations, (d) collateral quality tests, and (e) compliance with certain financial maintenance standards including minimum Members’ capital. In addition to the financial maintenance standards, described in the preceding sentence, borrowings under the Facility are subject to compliance with a borrowing base that applies different advance rates to different types of assets in the Company’s portfolio.

The Facility’s document also includes default provisions such as the failure to make timely payments, uncured breach of the borrowing base, borrower bankruptcy, the occurrence of a change in control, and the Company’s failure to materially perform under the operative agreements governing the Facility, which, if not complied with, could, at the option of the lender, accelerate repayment under the Facility, thereby materially and adversely affecting liquidity, financial condition and results of operations. Each loan originated under the Facility is subject to the satisfaction of certain conditions. It cannot be assured that Logan JV will be able to borrow funds under the Facility at any particular time or at all. The Company is currently in compliance with all financial covenants under the Facility; and was so during the period.

As of December 31, 2019 and 2018, the carrying amount of the Company’s outstanding loan approximated fair value. The fair values of the Company’s loan is determined in accordance with ASC 820, which defines fair value in terms of the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value of the Company’s loan is estimated based upon market interest rates and entities with similar credit risk. As of December 31, 2019 and 2018, the loan would be deemed to be Level 3 of the fair value hierarchy.

For the years ended December 31, 2019, 2018, and 2017, the Company incurred interest expense and related fees, excluding amortization of deferred financing costs, of $11,838,691, $9,769,526 and $5,861,844, respectively.

For the years ended December 31, 2019, 2018, and 2017, amortization of deferred financing costs totaled $805,229, $740,789 and $468,483 respectively. The unamortized fees and expenses are presented in the Consolidated Statements of Assets, Liabilities and Members’ Capital as a reduction to the loans payable balance and are being amortized using the straight line method.

5.	Recent Accounting Pronouncements

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230)”, which seeks to reduce diversity in how certain cash payments are presented in the Statement of Cash Flows. Under ASU 2016-15, an entity will need to conform to the presentation as prescribed for eight specific cash flow issues. ASU 2016-15 will be effective for annual and interim reporting periods after December 15, 2017. The application of this guidance does not have a material impact on Logan JV’s consolidated financial statements.

THL Credit Logan JV LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (continued)

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement”, which impacts fair value disclosure for both private and public companies. ASU 2018-13 removes, modifies, and adds certain fair value related disclosures. ASU 2018-13 is effective for annual and interim reporting periods beginning after December 15, 2019. The application of this guidance does not have a material impact on Logan JV’s consolidated financial statements. For further detail, refer to Footnote 3, Investment Valuation.

6.	Investment Risk

Logan JV’s investing activities expose it to various types of risks that are associated with the markets and financial instruments in which it invests. The significant types of financial risks to which Logan JV is exposed include, but are not limited to, market risk, credit risk, liquidity risk, and interest risk.

Market Risk

Market risk encompasses the potential for both losses and gains and includes, but is not limited to, price risk. Logan JV’s investments are long-term and illiquid and there is no assurance that Logan JV will achieve investment objectives including targeted returns.

Credit Risk

The value of Logan JV’s investments will generally fluctuate in response to company, political, or economic developments and can decline significantly over short periods of time or during periods of general or regional economic difficulty. Lower-quality debt securities involve greater risk of default or price changes due to changes in the credit quality of the issuer. Lower-quality debt securities can be thinly traded or have restrictions on resale, making them difficult to sell at an acceptable price. The default rate for lower-quality debt securities is likely to be higher during economic recessions or periods of high interest rates.

Liquidity Risk

Logan JV invests in syndicated bank loans. Syndicated loans are typically bought and sold by institutional investors in individually negotiated private transactions that function in many respects like an over-the-counter (“OTC”) secondary market, although no formal market-makers exist. This market, while having grown substantially, generally has fewer trades and less liquidity than the secondary market for other types of securities. Some syndicated loans have few or no trades, or trade infrequently, and information regarding a specific senior loan may not be widely available or may be incomplete. For loans that are provided directly to borrowers, all of these positions are subject to legal and other restrictions on resale or will be otherwise less liquid than publicly traded securities. The illiquidity of its investments may make it difficult for Logan JV to sell such investments if the need arises. In addition, if Logan JV is required to liquidate all or a portion of its portfolio quickly, Logan JV may realize significantly less than the value at which it had previously recorded its investments. The extent of this exposure is reflected in the carrying value of these financial assets and recorded in the Consolidated Statements of Assets, Liabilities and Members’ Capital. Further, Logan JV may face other restrictions on its ability to liquidate an investment in a portfolio company to the extent that it, or an affiliated entity, has material non-public information regarding such portfolio company.

Interest Risk

The value of Logan JV’s investments will generally fluctuate with, among other things, changes in prevailing interest rates, general economic conditions, the condition of certain financial markets, developments or trends in any particular industry and the financial condition of the issuer. Some of Logan JV’s investments involve the acquisitions of fixed income securities. Any increase to prevailing interest rates may result in a decrease in the value of fixed income securities held or vice versa. Additionally, changes in market rates may result in declining yields upon reinvestment of excess cash balances.

THL Credit Logan JV LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (continued)

LIBOR Risk

LIBOR, the London Interbank Offered Rate, is the basic rate of interest used in lending transactions between banks on the London interbank market and is widely used as a reference for setting the interest rate on loans globally. Logan JV typically uses LIBOR as a reference rate in floating-rate loans Logan JV extends to portfolio companies such that the interest due to Logan JV pursuant to a term loan extended to a portfolio company is calculated using LIBOR. The terms of Logan JV’s debt investments generally include minimum interest rate floors which are calculated based on LIBOR.

On July 27, 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021. It is expected that a transition away from the widespread use of LIBOR to alternative rates will occur over the course of the next several years. As a result of this transition, interest rates on financial instruments tied to LIBOR rates, as well as the revenue and expenses associated with those financial instruments, may be adversely affected. Further, any uncertainty regarding the continued use and reliability of LIBOR as a benchmark interest rate could adversely affect the value of our financial instruments tied to LIBOR rates. The U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions, is considering replacing U.S. dollar LIBOR with a new index calculated by short term repurchase agreements, backed by Treasury securities, called the Secured Overnight Financing Rate (“SOFR”). The first publication of SOFR was released in April 2018. Whether or not SOFR attains market traction as a LIBOR replacement remains a question and the future of LIBOR at this time is uncertain. Upon LIBOR’s phase out, Logan JV will need to renegotiate the credit agreements extending beyond 2021 with the Company’s portfolio companies that utilize LIBOR as a factor in determining the interest rate to replace LIBOR with the new standard that is established.

There is no guarantee that a transition from LIBOR to an alternative will not result in financial market disruptions, volatility in risk-free benchmark rates, significant increases in benchmark rates, or borrowing costs to borrowers, any of which could have a material adverse effect on Logan JV’s business, result of operations, financial condition, and unit price.

7.	Related Party Transactions

Administration Expenses

Administration services are provided by THL Credit Advisors LLC, (the “Administrator”) a Delaware limited liability company, through an administration agreement approved by Logan JV on December 3, 2014. In accordance with the agreement, the Administrator shall provide such services necessary for the operation of Logan JV; including, but not limited to, office facilities, clerical, bookkeeping and record keeping services. In connection with these services, the Administrator is entitled to be reimbursed for the costs and expenses incurred by the Administrator in performing its responsibilities under the agreement. Logan JV will reimburse the Administrator for its allocable portion of the costs and expenses incurred by the Administrator in performance of its duties under the administration agreement. For the years ended December 31, 2019 and 2018, and 2017, Logan JV incurred $161,645, $191,992 and $180,142, respectively, that are included in other general and administrative expenses in the Consolidated Statements of Operations. As of December 31, 2019 and 2018, $50,000 was payable to the Administrator, and is included within accrued expenses on the Consolidated Statements of Assets, Liabilities and Members’ Capital.

Logan JV does not pay management fees or incentive fees.

8.	Members’ Capital

Commitments and Contributions

Member interests in Logan JV, as defined in the Agreement, refer to percentage interests (the “Percentages”) based on capital commitments. As set forth in the Agreement, each Member is deemed to be a Managing Member. Aggregate commitments totaling $250,000,000 have been raised from the Members. THL Credit has committed to provide 80%, or $200,000,000, of the total commitment, of which $100,600,000 has been called through December 31, 2019. The remaining 20%, or $50,000,000, of the total commitment will be provided by Perspecta, of which $25,150,000 has been called through December 31, 2019. For the years ended December 31, 2019, 2018 and 2017, $10,000,000, $32,000,000 and $10,000,000 of capital was called, respectively. The Members had contributed 50.3%, 46.3% and 33.5% of their capital commitments as of December 31, 2019, 2018 and 2017, respectively. In February 2019, the Company returned $4,000,000 to the Members. THL Credit’s and Perspecta’s commitment as of December 31, 2019 were $97,400,000 and $24,350,000, respectively.

THL Credit Logan JV LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (continued)

Capital Accounts

Capital Accounts are maintained for each Member consisting of the Members’ Capital Contribution, increased or decreased by Profit or Loss (each as defined in the Agreement) allocated to the Member, decreased by the cash or Value (as defined in the Agreement) of property distributed to the Member (giving net effect to any liabilities to which the property is subject or which the Member assumes), and otherwise maintained consistent with this Agreement. In the event that the Administrator under the agreement, determines that it is prudent to modify the manner in which capital accounts, including all debits and credits to the capital accounts, are computed in order to be maintained consistent with the Agreement, the Administrator is authorized to make those modifications to the extent that they do not result in a material adverse effect to any Member.

Allocations of Profit and Loss

Subject to the Agreement, Profit or Loss is allocated among the Members on a pro rata basis. Loss is allocated among the Members pro rata in accordance with their capital accounts. Profit is allocated among the Members (i) first, pro rata until the cumulative amount of profit allocated to a Member (or any transferee of any Member) equals the cumulative amount of Loss previously allocated to the Member (or any transferee of that Member) and (ii) thereafter pro rata in accordance with the Members’ capital accounts. All allocations for the years ended December 31, 2019 and 2018 and 2017 were based on each Member’s pro rata share in accordance with their capital accounts.

Distributions

To the extent of available cash and cash equivalents after payment of expenses, Logan JV shall make distributions quarterly in the amounts as determined by board approval, shared among the Members in proportion to their respective capital accounts after payment of any temporary advances or fees related thereto. All distributions for the years ended December 31, 2019, 2018 and 2017 were based on Members’ pro rata share of their capital accounts. For the years ended December 31, 2019, and 2018, $12,350,000 and $12,450,000 of distributions were declared, respectively. As of December 31, 2019, and 2018, $3,650,000 and $3,360,000 of distributions were payable to Members, respectively.

9.	Commitments and Contingencies

From time to time, Logan JV or the Administrator, in its capacity as the investment adviser to Logan JV, may become party to legal proceedings in the ordinary course of business, including proceedings related to the enforcement of Logan JV’s rights under contracts with its portfolio companies. Neither Logan JV, nor the Administrator, in such capacity, is currently subject to any material legal proceedings.

As of December 31, 2019 and 2018, Logan JV did not have any additional commitments or contingencies except revolving and unfunded delayed draw loans described in Note 2.

10.	Financial Highlights

Nonpublic investment vehicles, such as Logan JV, are required to disclose certain financial highlights related to their investment performance and operations. However, since the Members are responsible for all investment making and business decisions, there is no requirement to show financial highlights in accordance with ASC Topic 946. Therefore, since Logan JV only consists of Managing Members, the financial highlights have been omitted.

11.	Subsequent Events

On December 8, 2019, THL Credit Advisors LLC and First Eagle Investment Management, LLC (“First Eagle”) entered into a definitive agreement, whereby First Eagle agreed, subject to the satisfaction of certain closing conditions, to merge a newly formed subsidiary of First Eagle with and into the Administrator, with the Administrator as the surviving company (the “Transaction”). The Transaction closed on January 31, 2020. Immediately after closing of the Transaction, the Administrator changed its name to First Eagle Alternative Credit, LLC.

Logan JV has evaluated the events or transactions that may require disclosure in Logan JV’s financial statements and no additional items were noted that required disclosure or adjustment through March 4, 2020, the date that the financial statements were available to be issued.

First Eagle Alternative Capital BDC, Inc. - FORM 10-K - EX-99.1 - March 5, 2020

Attached files

First Eagle Alternative Capital BDC, Inc. Reports