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EX-32 - EX-32 - BlackRock Capital Investment Corpbkcc-ex32_7.htm
EX-31.2 - EX-31.2 - BlackRock Capital Investment Corpbkcc-ex312_8.htm
EX-31.1 - EX-31.1 - BlackRock Capital Investment Corpbkcc-ex311_6.htm

 

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

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

For the quarterly period ended June 30, 2021

OR

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

For the transition period from                  to                 

Commission file number 814-00712

BLACKROCK CAPITAL INVESTMENT CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

 

Delaware

20-2725151

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

 

 

40 East 52nd Street, New York, NY

10022

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s Telephone Number, Including Area Code: 212-810-5800

 

      

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

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

Large accelerated filer     Accelerated filer     Non-Accelerated filer     

Smaller reporting company     Emerging growth company

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

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

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, $0.001 par value

BKCC

NASDAQ Global Select Market

The number of shares of the Registrant’s common stock, $.001 par value per share, outstanding at August 4, 2021 was 74,101,740.

 

 

 


 

 

 

 

BLACKROCK CAPITAL INVESTMENT CORPORATION

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2021

Table of Contents

 

 

INDEX

PAGE NO.

 

 

 

PART I.

FINANCIAL INFORMATION

 

 

 

 

Item 1.

CONSOLIDATED FINANCIAL STATEMENTS

3

 

 

 

 

Consolidated Statements of Assets and Liabilities as of June 30, 2021 and December 31, 2020 (unaudited)

3

 

 

 

 

Consolidated Statements of Operations for the three and six months ended June 30, 2021 and 2020 (unaudited)

4

 

 

 

 

Consolidated Statements of Changes in Net Assets for the three and six months ended June 30, 2021 and 2020 (unaudited)

5

 

 

 

 

Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020 (unaudited)

6

 

 

 

 

Consolidated Schedules of Investments as of June 30, 2021 and December 31, 2020 (unaudited)

7

 

 

 

 

Notes to Consolidated Financial Statements (unaudited)

22

 

 

 

Item 2.

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

45

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

55

 

 

 

Item 4.

Controls and Procedures

56

 

 

 

PART II.

OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

57

 

 

 

Item 1A.

Risk Factors

57

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

58

 

 

 

Item 3.

Defaults Upon Senior Securities

58

 

 

 

Item 4.

Mine Safety Disclosures

58

 

 

 

Item 5.

Other Information

58

 

 

 

Item 6.

Exhibits

59

 

 

SIGNATURES

60

 

 

 

2


 

 

 

 

PART I. FINANCIAL INFORMATION

In this Quarterly Report, “Company”, “we”, “us” and “our” refer to BlackRock Capital Investment Corporation unless the context states otherwise.

Item 1. Consolidated Financial Statements

BlackRock Capital Investment Corporation

Consolidated Statements of Assets and Liabilities  

 

 

 

June 30,

2021

 

 

December 31,

2020

 

 

 

(Unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Investments at fair value:

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments (cost of $469,917,118 and $369,079,320)

 

$

493,129,011

 

 

$

354,957,936

 

Non-controlled, affiliated investments (cost of $5,121,773 and $20,927,907)

 

 

4,281,369

 

 

 

13,099,313

 

Controlled investments (cost of $143,128,356 and $216,768,227)

 

 

51,869,839

 

 

 

110,968,227

 

Total investments at fair value (cost of $618,167,247 and $606,775,454)

 

 

549,280,219

 

 

 

479,025,476

 

Cash and cash equivalents

 

 

17,030,583

 

 

 

23,332,831

 

Interest, dividends and fees receivable

 

 

2,484,493

 

 

 

2,138,304

 

Receivable for investments sold

 

 

25,156

 

 

 

5,439,507

 

Deferred debt issuance costs

 

 

1,741,443

 

 

 

1,374,115

 

Prepaid expenses and other assets

 

 

1,153,459

 

 

 

409,357

 

Total assets

 

$

571,715,353

 

 

$

511,719,590

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Debt (net of deferred issuance costs of $896,656 and $1,360,356)

 

$

193,926,217

 

 

$

179,798,037

 

Distributions payable

 

 

7,413,594

 

 

 

 

Payable for investments purchased

 

 

16,845,569

 

 

 

9,193,917

 

Management fees payable

 

 

1,775,684

 

 

 

2,313,447

 

Incentive fees payable

 

 

1,849,597

 

 

 

1,849,597

 

Interest and debt related payables

 

 

620,493

 

 

 

502,682

 

Accrued administrative expenses

 

 

314,886

 

 

 

389,064

 

Accrued expenses and other liabilities

 

 

1,758,928

 

 

 

2,662,569

 

Total liabilities

 

 

224,504,968

 

 

 

196,709,313

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (see Note 9)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets

 

 

 

 

 

 

 

 

Common stock, par value $.001 per share, 200,000,000 common shares authorized, 84,478,251 and 84,478,251 issued and 74,129,659 and 74,466,665 outstanding

 

 

84,478

 

 

 

84,478

 

Paid-in capital in excess of par

 

 

858,079,713

 

 

 

858,079,713

 

Distributable earnings (losses)

 

 

(443,485,518

)

 

 

(476,857,055

)

Treasury stock at cost, 10,348,592 and 10,011,586 shares held

 

 

(67,468,288

)

 

 

(66,296,859

)

Total net assets

 

 

347,210,385

 

 

 

315,010,277

 

Total liabilities and net assets

 

$

571,715,353

 

 

$

511,719,590

 

 

 

 

 

 

 

 

 

 

Net assets per share

 

$

4.68

 

 

$

4.23

 

 

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

3


 

 

 

 

BlackRock Capital Investment Corporation

Consolidated Statements of Operations

(Unaudited)

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2021

 

 

June 30, 2020

 

 

June 30, 2021

 

 

June 30, 2020

 

Investment income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income (excluding PIK):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

$

9,210,827

 

 

$

7,600,731

 

 

$

17,260,077

 

 

$

15,722,654

 

Non-controlled, affiliated investments

 

 

 

 

 

118,000

 

 

 

11,867

 

 

 

243,474

 

Controlled investments

 

 

135,371

 

 

 

5,486,595

 

 

 

718,571

 

 

 

10,902,430

 

PIK income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

815,710

 

 

 

1,358,694

 

 

 

1,596,389

 

 

 

2,454,125

 

Non-controlled, affiliated investments

 

 

117,985

 

 

 

112,958

 

 

 

237,014

 

 

 

221,789

 

Controlled investments

 

 

 

 

 

180,156

 

 

 

 

 

 

1,053,664

 

Dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, affiliated investments

 

 

 

 

 

 

 

71,500

 

 

 

Controlled investments

 

 

536,908

 

 

 

2,566,148

 

 

 

1,047,975

 

 

 

5,473,651

 

Other income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

40,958

 

 

 

17,087

 

 

 

186,990

 

 

 

63,254

 

Non-controlled, affiliated investments

 

 

 

 

 

1,436

 

 

 

 

 

 

2,871

 

Controlled investments

 

 

 

 

 

61,153

 

 

 

 

 

 

64,340

 

Total investment income

 

 

10,857,759

 

 

 

17,502,958

 

 

 

21,130,383

 

 

 

36,202,252

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other debt expenses

 

 

2,969,177

 

 

 

4,359,441

 

 

 

5,722,273

 

 

 

8,571,715

 

Management fees

 

 

1,775,684

 

 

 

2,708,862

 

 

 

3,575,450

 

 

 

6,004,549

 

Incentive fees

 

 

 

 

 

1,608,740

 

 

 

 

 

 

3,533,138

 

Professional fees

 

 

254,834

 

 

 

544,845

 

 

 

666,993

 

 

 

1,069,857

 

Administrative expenses

 

 

314,886

 

 

 

375,704

 

 

 

637,001

 

 

 

689,265

 

Insurance expense

 

 

201,597

 

 

 

123,223

 

 

 

400,961

 

 

 

242,843

 

Director fees

 

 

153,125

 

 

 

152,500

 

 

 

306,250

 

 

 

337,250

 

Investment advisor expenses

 

 

87,500

 

 

 

87,500

 

 

 

175,000

 

 

 

175,000

 

Other operating expenses

 

 

258,232

 

 

 

384,693

 

 

 

613,514

 

 

 

723,596

 

Total expenses, before incentive fee waiver

 

 

6,015,035

 

 

 

10,345,508

 

 

 

12,097,442

 

 

 

21,347,213

 

Incentive fee waiver (see Note 3)

 

 

 

 

 

(1,608,740

)

 

 

 

 

 

(3,533,138

)

Expenses, net of incentive fee waiver

 

 

6,015,035

 

 

 

8,736,768

 

 

 

12,097,442

 

 

 

17,814,075

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

4,842,724

 

 

 

8,766,190

 

 

 

9,032,941

 

 

 

18,388,177

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Realized and unrealized gain (loss) on investments and foreign currency

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net realized gain (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

6,773

 

 

 

(12,316,751

)

 

 

(639,501

)

 

 

(12,311,266

)

Non-controlled, affiliated investments

 

 

 

 

 

(42,238,921

)

 

 

(7,989,591

)

 

 

(43,774,013

)

Controlled investments

 

 

(8,749,931

)

 

 

 

 

 

(11,040,074

)

 

 

 

Net realized gain (loss)

 

 

(8,743,158

)

 

 

(54,555,672

)

 

 

(19,669,166

)

 

 

(56,085,279

)

Net change in unrealized appreciation (depreciation):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

27,464,721

 

 

 

11,084,426

 

 

 

37,333,277

 

 

 

(15,942,530

)

Non-controlled, affiliated investments

 

 

153,217

 

 

 

42,458,272

 

 

 

6,988,190

 

 

 

34,178,158

 

Controlled investments

 

 

8,689,595

 

 

 

(35,387,880

)

 

 

14,826,843

 

 

 

(66,790,209

)

Foreign currency translation

 

 

(381,379

)

 

 

239,587

 

 

 

(285,360

)

 

 

(337,060

)

Net change in unrealized appreciation (depreciation)

 

 

35,926,154

 

 

 

18,394,405

 

 

 

58,862,950

 

 

 

(48,891,641

)

Net realized and unrealized gain (loss)

 

 

27,182,996

 

 

 

(36,161,267

)

 

 

39,193,784

 

 

 

(104,976,920

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in net assets resulting from operations

 

$

32,025,720

 

 

$

(27,395,077

)

 

$

48,226,725

 

 

$

(86,588,743

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income per share—basic

 

$

0.07

 

 

$

0.13

 

 

$

0.12

 

 

$

0.27

 

Earnings (loss) per share—basic

 

$

0.43

 

 

$

(0.40

)

 

$

0.65

 

 

$

(1.27

)

Weighted average shares outstanding—basic

 

 

74,150,425

 

 

 

68,117,628

 

 

 

74,292,637

 

 

 

68,365,792

 

Net investment income per share—diluted

 

$

0.07

 

 

$

0.13

 

 

$

0.12

 

 

$

0.27

 

Earnings (loss) per share—diluted

 

$

0.38

 

 

$

(0.40

)

 

$

0.58

 

 

$

(1.27

)

Weighted average shares outstanding—diluted (see Note 8)

 

 

91,144,162

 

 

 

85,111,365

 

 

 

91,286,374

 

 

 

85,359,529

 

 

 

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

4


 

 

 

 

BlackRock Capital Investment Corporation

Consolidated Statements of Changes in Net Assets

(Unaudited)

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares Outstanding

 

 

Par Amount, Shares Issued

 

 

Paid in Capital

in Excess of Par

 

 

Distributable

earnings (loss)

 

 

Treasury Stock at Cost

 

 

Total Net

Assets

 

Balance at December 31, 2020

 

 

74,466,665

 

 

$

84,478

 

 

$

858,079,713

 

 

$

(476,857,055

)

 

$

(66,296,859

)

 

$

315,010,277

 

Repurchase of common stock

 

 

(256,062

)

 

 

 

 

 

 

 

 

(869,726

)

 

 

(869,726

)

Net investment income

 

 

 

 

 

 

 

 

4,190,217

 

 

 

 

 

4,190,217

 

Net realized and unrealized gain

 

 

 

 

 

 

 

 

12,010,788

 

 

 

 

 

12,010,788

 

Distributions to common stockholders(1)

 

 

 

 

 

 

 

 

(7,441,594

)

 

 

 

 

(7,441,594

)

Balance at March 31, 2021

 

 

74,210,603

 

 

$

84,478

 

 

$

858,079,713

 

 

$

(468,097,644

)

 

$

(67,166,585

)

 

$

322,899,962

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repurchase of common stock

 

 

(80,944

)

 

 

 

 

 

 

 

 

(301,703

)

 

 

(301,703

)

Net investment income

 

 

 

 

 

 

 

 

4,842,724

 

 

 

 

 

4,842,724

 

Net realized and unrealized gain

 

 

 

 

 

 

 

 

27,182,996

 

 

 

 

 

27,182,996

 

Distributions to common stockholders(1)

 

 

 

 

 

 

 

 

(7,413,594

)

 

 

 

 

(7,413,594

)

Balance at June 30, 2021

 

 

74,129,659

 

 

$

84,478

 

 

$

858,079,713

 

 

$

(443,485,518

)

 

$

(67,468,288

)

 

$

347,210,385

 

 

 

(1)

Sources of distribution to stockholders will be adjusted on an annual basis, if necessary, and calculated in accordance with federal income tax regulations (see Note 2). For the three months ended June 30, 2021, it is estimated that $2,570,870 out of the total $7,413,594 distribution was from a return of capital based on book income. For the three months ended March 31, 2021, it is estimated that $3,251,377 out of the total $7,441,594 distribution was from a return of capital based on book income.

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares Outstanding

 

 

Par Amount, Shares Issued

 

 

Paid in Capital

in Excess of Par

 

 

Distributable

earnings (loss)

 

 

Treasury Stock at Cost

 

 

Total Net

Assets

 

Balance at December 31, 2019

 

 

68,836,255

 

 

$

77,861

 

 

$

849,240,398

 

 

$

(351,040,023

)

 

$

(62,669,255

)

 

$

435,608,981

 

Repurchase of common stock

 

 

(986,554

)

 

 

 

 

 

 

 

 

(3,627,604

)

 

 

(3,627,604

)

Net investment income

 

 

 

 

 

 

 

 

9,621,987

 

 

 

 

 

9,621,987

 

Net realized and unrealized loss

 

 

 

 

 

 

 

 

(68,815,655

)

 

 

 

 

(68,815,655

)

Distributions to common stockholders(1)

 

 

 

 

 

 

 

 

(9,543,152

)

 

 

 

 

(9,543,152

)

Balance at March 31, 2020

 

 

67,849,701

 

 

$

77,861

 

 

$

849,240,398

 

 

$

(419,776,843

)

 

$

(66,296,859

)

 

$

363,244,557

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock from dividend reinvestment plan

 

 

290,254

 

 

 

291

 

 

 

638,269

 

 

 

 

 

 

 

638,560

 

Net investment income

 

 

 

 

 

 

 

 

8,766,190

 

 

 

 

 

8,766,190

 

Net realized and unrealized loss

 

 

 

 

 

 

 

 

(36,161,267

)

 

 

 

 

(36,161,267

)

Distributions to common stockholders(1)

 

 

 

 

 

 

 

 

(6,813,994

)

 

 

 

 

(6,813,994

)

Balance at June 30, 2020

 

 

68,139,955

 

 

$

78,152

 

 

$

849,878,667

 

 

$

(453,985,914

)

 

$

(66,296,859

)

 

$

329,674,046

 

 

 

(1)

Sources of distribution to stockholders will be adjusted on an annual basis, if necessary, and calculated in accordance with federal income tax regulations (see Note 2).

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

5


 

 

 

 

BlackRock Capital Investment Corporation

Consolidated Statements of Cash Flows

(Unaudited)

 

 

 

Six Months Ended

 

 

 

June 30, 2021

 

 

June 30, 2020

 

Operating activities

 

 

 

 

 

 

 

 

Net increase (decrease) in net assets resulting from operations

 

$

48,226,725

 

 

$

(86,588,743

)

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

 

 

 

 

 

 

 

 

Net realized (gain) loss

 

 

19,669,166

 

 

 

56,085,279

 

Change in unrealized (appreciation) depreciation of investments

 

 

(59,148,310

)

 

 

48,554,581

 

Change in unrealized (appreciation) depreciation on foreign currency translation

 

 

285,360

 

 

 

337,060

 

Interest and dividend income paid in kind

 

 

(1,833,403

)

 

 

(3,729,578

)

Net amortization of investment discounts and premiums

 

 

(688,156

)

 

 

(405,343

)

Amortization of deferred debt issuance costs

 

 

863,830

 

 

 

1,220,921

 

Amortization of original issue discount on debt

 

 

464,480

 

 

 

439,089

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Purchase of investments

 

 

(141,841,057

)

 

 

(55,184,092

)

Proceeds from disposition of investments

 

 

113,366,562

 

 

 

59,830,118

 

Decrease (increase) in interest, dividends and fees receivable

 

 

(411,093

)

 

 

(2,318,764

)

Decrease (increase) in receivable for investments sold

 

 

5,414,351

 

 

 

(3,956,572

)

Decrease (increase) in prepaid expenses and other assets

 

 

(744,102

)

 

 

(1,325,601

)

Increase (decrease) in payable for investments purchased

 

 

7,651,652

 

 

 

(7,076,250

)

Increase (decrease) in interest and debt related payables

 

 

117,811

 

 

 

(260,896

)

Increase (decrease) in management fees payable

 

 

(537,763

)

 

 

(542,331

)

Increase (decrease) in accrued administrative expenses

 

 

(74,178

)

 

 

3,297

 

Increase (decrease) in accrued expenses and other liabilities

 

 

(903,641

)

 

 

696,185

 

Net cash provided by (used in) operating activities

 

 

(10,121,766

)

 

 

5,778,360

 

 

 

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

 

 

Draws on credit facility

 

 

64,000,000

 

 

 

98,000,000

 

Repayments of credit facility draws

 

 

(50,800,000

)

 

 

(93,200,000

)

Payments of debt issuance costs

 

 

(767,459

)

 

 

Distributions paid to common stockholders

 

 

(7,441,594

)

 

 

(18,541,668

)

Repurchase of common stock

 

 

(1,171,429

)

 

 

(3,627,604

)

Net cash provided by financing activities

 

 

3,819,518

 

 

 

(17,369,272

)

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

(6,302,248

)

 

 

(11,590,912

)

Cash and cash equivalents at beginning of period

 

 

23,332,831

 

 

 

14,678,878

 

Cash and cash equivalents at end of period

 

$

17,030,583

 

 

$

3,087,966

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information

 

 

 

 

 

 

 

 

Interest payments

 

$

3,762,774

 

 

$

6,685,050

 

Tax payments

 

$

60,050

 

 

$

68,050

 

Share issuance — stock distribution and reinvestment

 

$

 

 

$

638,560

 

 

 

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

6


 

 

 

 

BlackRock Capital Investment Corporation

Consolidated Schedules of Investments

June 30, 2021

(Unaudited)

 

Issuer(P/R)

 

Instrument

 

Ref(E)

 

Floor

 

 

Spread

 

 

Total Coupon

 

 

Maturity

 

Principal

 

 

Cost(A)

 

 

Fair

Value(B)

 

 

Notes

Debt Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace & Defense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unanet, Inc.

 

First Lien Term Loan

 

LIBOR(M)

 

 

 

 

 

6.25

%

 

 

6.38

%

 

5/31/2024

 

$

6,632,653

 

 

$

6,592,263

 

 

$

6,672,449

 

 

 

Unanet, Inc.

 

Sr Secured Revolver

 

LIBOR(M)

 

 

 

 

 

6.25

%

 

 

6.38

%

 

5/31/2024

 

$

816,327

 

 

 

811,423

 

 

 

816,327

 

 

 

Unanet, Inc.

 

First Lien Delayed Draw Term Loan

 

LIBOR(M)

 

 

 

 

 

6.25

%

 

 

6.38

%

 

5/31/2024

 

$

1,709,183

 

 

 

1,699,755

 

 

 

1,724,490

 

 

T

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9,103,441

 

 

 

9,213,266

 

 

 

Airlines

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One Sky Flight, LLC

 

First Lien Term Loan

 

LIBOR(S)

 

 

1.00

%

 

 

7.50

%

 

 

8.50

%

 

12/27/2024

 

$

6,567,338

 

 

 

6,443,462

 

 

 

6,633,011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Automobiles

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ALCV Purchaser, Inc

 

First Lien Term Loan

 

LIBOR(M)

 

 

1.00

%

 

 

6.75

%

 

 

7.75

%

 

2/25/2026

 

$

3,201,324

 

 

 

3,155,170

 

 

 

3,182,116

 

 

 

ALCV Purchaser, Inc

 

First Lien Revolver

 

LIBOR(M)

 

 

1.00

%

 

 

6.75

%

 

 

7.75

%

 

2/25/2026

 

$

 

 

 

(3,364

)

 

 

(1,401

)

 

N/T

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,151,806

 

 

 

3,180,715

 

 

 

Building Products

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Porcelain Acquisition Corporation

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

6.00

%

 

 

7.00

%

 

4/30/2027

 

$

2,207,518

 

 

 

2,163,760

 

 

 

2,176,613

 

 

 

Porcelain Acquisition Corporation

 

First Lien Delayed Draw Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

6.00

%

 

 

7.00

%

 

4/30/2027

 

$

 

 

 

(18,395

)

 

 

(13,245

)

 

N/T

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,145,365

 

 

 

2,163,368

 

 

 

Capital Markets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pico Quantitative Trading, LLC

 

First Lien Term Loan (1.0% Exit Fee)

 

LIBOR(S)

 

 

1.50

%

 

 

7.25

%

 

 

8.75

%

 

2/7/2025

 

$

500,000

 

 

 

483,169

 

 

 

505,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Services & Supplies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kellermeyer Bergensons Services, LLC

 

First Lien Term Loan

 

LIBOR(S)

 

 

1.00

%

 

 

6.50

%

 

 

7.50

%

 

11/7/2026

 

$

1,609,477

 

 

 

1,597,880

 

 

 

1,577,288

 

 

 

Kellermeyer Bergensons Services, LLC

 

First Lien Delayed Draw Term Loan A

 

LIBOR(S)

 

 

1.00

%

 

 

6.50

%

 

 

7.50

%

 

11/7/2026

 

$

354,085

 

 

 

351,325

 

 

 

347,003

 

 

 

Kellermeyer Bergensons Services, LLC

 

First Lien Delayed Draw Term Loan B

 

LIBOR(S)

 

 

1.00

%

 

 

6.50

%

 

 

7.50

%

 

11/7/2026

 

$

149,359

 

 

 

149,008

 

 

 

139,574

 

 

T

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,098,213

 

 

 

2,063,865

 

 

 

Construction & Engineering

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sunland Asphalt & Construction, LLC

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

6.00

%

 

 

7.00

%

 

1/13/2026

 

$

2,512,708

 

 

 

2,467,213

 

 

 

2,500,144

 

 

 

Sunland Asphalt & Construction, LLC

 

First Lien Delayed Draw Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

6.00

%

 

 

7.00

%

 

1/13/2026

 

$

844,898

 

 

 

829,424

 

 

 

840,673

 

 

 

Sunland Asphalt & Construction, LLC

 

First Lien Revolver

 

LIBOR(Q)

 

 

1.00

%

 

 

6.00

%

 

 

7.00

%

 

1/13/2022

 

$

422,993

 

 

 

417,260

 

 

 

420,389

 

 

T

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,713,897

 

 

 

3,761,206

 

 

 

Consumer Finance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Barri Financial Group, LLC

 

First Lien Term Loan

 

LIBOR(M)

 

 

1.00

%

 

 

7.75

%

 

 

8.75

%

 

6/30/2026

 

$

7,146,364

 

 

 

7,005,180

 

 

 

7,217,827

 

 

 

Barri Financial Group, LLC

 

First Lien Incremental Term Loan

 

LIBOR(M)

 

 

1.00

%

 

 

7.75

%

 

 

8.75

%

 

6/30/2026

 

$

6,301,021

 

 

 

6,143,552

 

 

 

6,364,032

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13,148,732

 

 

 

13,581,859

 

 

 

Containers & Packaging

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paragon Films, Inc.

 

Second Lien Term Loan

 

LIBOR(M)

 

 

1.00

%

 

 

8.50

%

 

 

9.50

%

 

3/29/2026

 

$

21,000,000

 

 

 

20,696,557

 

 

 

20,947,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributors

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Colony Display LLC

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

6.50

%

 

 

7.50

%

 

6/30/2026

 

$

2,382,508

 

 

 

2,334,858

 

 

 

2,334,858

 

 

 

Colony Display LLC

 

First Lien Delayed Draw Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

6.50

%

 

 

7.50

%

 

6/30/2026

 

$

 

 

 

(23,825

)

 

 

(23,825

)

 

N/T

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,311,033

 

 

 

2,311,033

 

 

 

Diversified Consumer Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Razor Group GmbH (Germany)

 

First Lien Delayed Draw Term Loan

 

LIBOR(M)

 

 

1.00

%

 

 

9.00

%

 

 

10.00

%

 

4/30/2025

 

$

4,742,041

 

 

 

4,854,306

 

 

 

4,553,830

 

 

H/J/T

Thras.io, LLC

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

7.00

%

 

 

8.00

%

 

12/18/2026

 

$

4,684,712

 

 

 

4,574,759

 

 

 

4,778,406

 

 

 

Thras.io, LLC

 

First Lien Delayed Draw Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

7.00

%

 

 

8.00

%

 

12/18/2026

 

$

941,651

 

 

 

896,399

 

 

 

1,003,800

 

 

T

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,325,464

 

 

 

10,336,036

 

 

 

Diversified Financial Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2-10 Holdco, Inc.

 

First Lien Term Loan

 

LIBOR(M)

 

 

0.75

%

 

 

6.00

%

 

 

6.75

%

 

3/26/2026

 

$

6,638,745

 

 

 

6,512,124

 

 

 

6,600,905

 

 

 

2-10 Holdco, Inc.

 

Sr Secured Revolver

 

LIBOR(M)

 

 

0.75

%

 

 

6.00

%

 

 

6.75

%

 

3/26/2026

 

$

 

 

 

(4,552

)

 

 

(1,369

)

 

N/T

Callodine Commercial Finance, LLC

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

9.00

%

 

 

10.00

%

 

11/3/2025

 

$

25,000,000

 

 

 

25,000,000

 

 

 

24,850,000

 

 

 

Callodine Commercial Finance, LLC

 

Delayed Draw Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

9.00

%

 

 

10.00

%

 

11/3/2025

 

$

 

 

 

 

 

 

(48,387

)

 

N/T

Callodine Commercial Finance, LLC

 

Subordinated Debt

 

LIBOR(Q)

 

 

0.25

%

 

 

8.50

%

 

 

8.75

%

 

11/30/2024

 

$

5,000,000

 

 

 

5,000,000

 

 

 

5,000,000

 

 

U

Gordon Brothers Finance Company

 

Unsecured Debt

 

LIBOR(M)

 

 

1.00

%

 

 

11.00

%

 

 

12.00

%

 

10/31/2021

 

$

41,861,533

 

 

 

41,861,533

 

 

 

21,169,000

 

 

G/S

Oasis Financial, LLC

 

Second Lien Term Loan

 

LIBOR(M)

 

 

1.00

%

 

 

8.50

%

 

 

9.50

%

 

7/5/2026

 

$

5,000,000

 

 

 

4,908,565

 

 

 

4,930,000

 

 

 

Worldremit Group Limited (United Kingdom)

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

9.25

%

 

 

10.25

%

 

2/11/2025

 

$

9,600,000

 

 

 

9,425,478

 

 

 

9,216,960

 

 

H/J

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

92,703,148

 

 

 

71,717,109

 

 

 

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

7


 

 

 

 

BlackRock Capital Investment Corporation

Consolidated Schedules of Investments—(Continued)

June 30, 2021  

(Unaudited)

 

Issuer(P/R)

 

Instrument

 

Ref(E)

 

Floor

 

 

Spread

 

 

Total Coupon

 

 

Maturity

 

Principal

 

 

Cost(A)

 

 

Fair

Value(B)

 

 

Notes

Debt Investments (continued)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diversified Telecommunication Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MetroNet Systems Holdings, LLC

 

Second Lien Term Loan

 

LIBOR(M)

 

 

0.75

%

 

 

7.00

%

 

 

7.75

%

 

6/2/2029

 

$

1,414,105

 

 

$

1,393,000

 

 

$

1,390,630

 

 

 

MetroNet Systems Holdings, LLC

 

Second Lien Delayed Draw Term Loan

 

LIBOR(M)

 

 

0.75

%

 

 

7.00

%

 

 

7.75

%

 

6/2/2029

 

$

 

 

 

(28,533

)

 

 

(48,329

)

 

N/T

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,364,467

 

 

 

1,342,301

 

 

 

Electrical Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advanced Lighting Technologies, Inc.

 

Second Lien Sr Secured Notes

 

LIBOR(Q)

 

 

2.00

%

 

16.00% PIK + 6.00% Cash

 

 

 

24.00

%

 

3/16/2027

 

$

1,961,356

 

 

 

935,927

 

 

 

657,054

 

 

D/I/S

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy Equipment & Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sphera Solutions, Inc. (Diamondback)

 

First Lien FILO Term Loan B

 

LIBOR(Q)

 

 

1.00

%

 

 

9.76

%

 

 

10.76

%

 

6/14/2023

 

$

13,477,796

 

 

 

13,344,730

 

 

 

13,747,352

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Health Care Equipment & Supplies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Zest Acquisition Corp.

 

Second Lien Term Loan

 

LIBOR(M)

 

 

1.00

%

 

 

7.50

%

 

 

8.50

%

 

3/14/2026

 

$

15,000,000

 

 

 

14,908,074

 

 

 

14,662,500

 

 

Q

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Health Care Providers & Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INH Buyer, Inc.

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

6.00

%

 

 

7.00

%

 

6/28/2028

 

$

2,700,000

 

 

 

2,646,000

 

 

 

2,646,000

 

 

 

Outcomes Group Holdings, Inc.

 

Second Lien Term Loan

 

LIBOR(Q)

 

 

 

 

 

7.50

%

 

 

7.65

%

 

10/26/2026

 

$

5,769,231

 

 

 

5,760,361

 

 

 

5,769,231

 

 

 

Team Services Group, LLC

 

Second Lien Term Loan

 

LIBOR(S)

 

 

1.00

%

 

 

9.00

%

 

 

10.00

%

 

11/13/2028

 

$

5,788,615

 

 

 

5,612,927

 

 

 

5,759,672

 

 

 

Tempus, LLC (Epic Staffing)

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

6.25

%

 

 

7.25

%

 

2/5/2027

 

$

4,074,248

 

 

 

3,996,265

 

 

 

4,119,065

 

 

 

Tempus, LLC (Epic Staffing)

 

First Lien Delayed Draw Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

6.25

%

 

 

7.25

%

 

2/5/2027

 

$

 

 

 

(15,076

)

 

 

8,696

 

 

N/T

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18,000,477

 

 

 

18,302,664

 

 

 

Health Care Technology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appriss Health, LLC

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

7.25

%

 

 

8.25

%

 

5/6/2027

 

$

2,875,899

 

 

 

2,820,287

 

 

 

2,829,885

 

 

 

Appriss Health, LLC

 

First Lien Revolver

 

LIBOR(Q)

 

 

1.00

%

 

 

7.25

%

 

 

8.25

%

 

5/6/2027

 

$

 

 

 

(3,738

)

 

 

(3,068

)

 

N/T

CareATC, Inc.

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

7.25

%

 

 

8.25

%

 

3/14/2024

 

$

4,673,873

 

 

 

4,621,305

 

 

 

4,720,612

 

 

 

CareATC, Inc.

 

Sr Secured Revolver

 

LIBOR(Q)

 

 

1.00

%

 

 

7.25

%

 

 

8.25

%

 

3/14/2024

 

$

 

 

 

(3,830

)

 

 

 

 

N/T

ESO Solutions, Inc.

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

7.00

%

 

 

8.00

%

 

5/3/2027

 

$

5,176,619

 

 

 

5,075,243

 

 

 

5,124,852

 

 

 

ESO Solutions, Inc.

 

First Lien Revolver

 

LIBOR(Q)

 

 

1.00

%

 

 

7.00

%

 

 

8.00

%

 

5/3/2027

 

$

 

 

 

(11,998

)

 

 

(6,163

)

 

N/T

Gainwell Acquisition Corp.

 

Second Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

8.00

%

 

 

9.00

%

 

10/2/2028

 

$

2,016,737

 

 

 

2,006,654

 

 

 

2,026,821

 

 

 

Sandata Technologies, LLC

 

First Lien Term Loan

 

LIBOR(Q)

 

 

 

 

 

6.00

%

 

 

6.19

%

 

7/23/2024

 

$

4,500,000

 

 

 

4,456,912

 

 

 

4,531,500

 

 

 

Sandata Technologies, LLC

 

Sr Secured Revolver

 

LIBOR(Q)

 

 

 

 

 

6.00

%

 

 

6.19

%

 

7/23/2024

 

$

 

 

 

(4,739

)

 

 

 

 

N/T

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18,956,096

 

 

 

19,224,439

 

 

 

Insurance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AmeriLife Holdings, LLC

 

Second Lien Term Loan

 

LIBOR(S)

 

 

1.00

%

 

 

8.50

%

 

 

9.50

%

 

3/18/2028

 

$

6,697,322

 

 

 

6,578,684

 

 

 

6,710,716

 

 

 

AmeriLife Holdings, LLC

 

Second Lien Incremental Term Loan

 

LIBOR(S)

 

 

1.00

%

 

 

8.50

%

 

 

9.50

%

 

3/18/2028

 

$

2,337,744

 

 

 

2,299,496

 

 

 

2,342,420

 

 

 

IT Parent, LLC

 

First Lien Term Loan

 

LIBOR(M)

 

 

1.00

%

 

 

6.25

%

 

 

7.25

%

 

10/1/2026

 

$

1,741,250

 

 

 

1,710,819

 

 

 

1,776,075

 

 

 

IT Parent, LLC

 

First Lien Incremental Term Loan

 

LIBOR(M)

 

 

1.00

%

 

 

6.25

%

 

 

7.25

%

 

10/1/2026

 

$

221,997

 

 

 

217,749

 

 

 

226,437

 

 

 

IT Parent, LLC

 

Sr Secured Revolver

 

LIBOR(M)

 

 

1.00

%

 

 

6.25

%

 

 

7.25

%

 

10/1/2026

 

$

 

 

 

(4,406

)

 

 

 

 

N/T

Peter C. Foy & Associates Insurance Services, LLC

 

First Lien Delayed Draw Term Loan

 

LIBOR(S)

 

 

1.00

%

 

 

6.25

%

 

 

7.25

%

 

3/31/2026

 

$

1,288,736

 

 

 

1,245,965

 

 

 

1,258,258

 

 

T

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12,048,307

 

 

 

12,313,906

 

 

 

Internet & Catalog Retail

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Live Auctioneers, LLC

 

First Lien Last Out B-2 Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

6.76

%

 

 

7.76

%

 

5/21/2025

 

$

7,654,498

 

 

 

7,547,597

 

 

 

7,731,043

 

 

 

Live Auctioneers, LLC

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

6.76

%

 

 

7.76

%

 

5/21/2025

 

$

2,990,085

 

 

 

2,937,049

 

 

 

3,019,986

 

 

 

Syndigo, LLC

 

Second Lien Term Loan

 

LIBOR(S)

 

 

0.75

%

 

 

8.00

%

 

 

8.75

%

 

12/14/2028

 

$

4,673,472

 

 

 

4,606,716

 

 

 

4,626,737

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15,091,362

 

 

 

15,377,766

 

 

 

Internet Software & Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FinancialForce.com, Inc.

 

First Lien Delayed Draw Term Loan (3.0% Exit Fee)

 

LIBOR(M)

 

 

2.75

%

 

 

6.75

%

 

 

9.50

%

 

2/1/2024

 

$

10,000,000

 

 

 

9,892,087

 

 

 

10,090,000

 

 

 

FinancialForce.com, Inc.

 

First Lien Incremental Delayed Draw Term Loan (3.0% Exit Fee)

 

LIBOR(M)

 

 

2.75

%

 

 

6.75

%

 

 

9.50

%

 

2/1/2024

 

$

 

 

 

(42,442

)

 

 

45,000

 

 

N/T

McAfee, LLC

 

Second Lien Term Loan

 

LIBOR(M)

 

 

0.75

%

 

 

8.25

%

 

 

9.00

%

 

5/3/2029

 

$

7,000,000

 

 

 

6,895,000

 

 

 

6,912,500

 

 

 

MetricStream, Inc.

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

8.00

%

 

 

9.00

%

 

9/28/2024

 

$

9,535,314

 

 

 

9,378,301

 

 

 

9,363,678

 

 

 

MetricStream, Inc.

 

First Lien Incremental Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

8.00

%

 

 

9.00

%

 

9/28/2024

 

$

1,466,971

 

 

 

1,439,559

 

 

 

1,440,566

 

 

 

Persado, Inc.

 

First Lien Delayed Draw Term Loan (4.25% Exit Fee)

 

LIBOR(M)

 

 

1.80

%

 

 

7.00

%

 

 

8.80

%

 

2/1/2025

 

$

1,562,500

 

 

 

1,551,337

 

 

 

1,546,875

 

 

 

Pluralsight, Inc.

 

First Lien Term Loan

 

LIBOR(S)

 

 

1.00

%

 

 

8.00

%

 

 

9.00

%

 

4/6/2027

 

$

10,931,797

 

 

 

10,720,408

 

 

 

10,899,001

 

 

 

Pluralsight, Inc.

 

First Lien Revolver

 

LIBOR(S)

 

 

1.00

%

 

 

8.00

%

 

 

9.00

%

 

4/6/2027

 

$

 

 

 

(17,882

)

 

 

(2,791

)

 

N/T

Quartz Holding Company (Quick Base)

 

Second Lien Term Loan

 

LIBOR(M)

 

 

 

 

 

8.00

%

 

 

8.09

%

 

4/2/2027

 

$

5,512,958

 

 

 

5,428,597

 

 

 

5,444,046

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

45,244,965

 

 

 

45,738,875

 

 

 

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

8


 

 

 

 

BlackRock Capital Investment Corporation

Consolidated Schedules of Investments—(Continued)

June 30, 2021  

(Unaudited)

 

Issuer(P/R)

 

Instrument

 

Ref(E)

 

Floor

 

 

Spread

 

 

Total Coupon

 

 

Maturity

 

Principal

 

 

Cost(A)

 

 

Fair

Value(B)

 

 

Notes

Debt Investments (continued)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IT Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ensono, Inc.

 

Second Lien Term Loan B

 

LIBOR(S)

 

 

 

 

 

8.00

%

 

 

8.17

%

 

6/2/2029

 

$

5,000,000

 

 

$

4,950,000

 

 

$

4,950,000

 

 

 

Idera, Inc.

 

Second Lien Term Loan

 

LIBOR(S)

 

 

0.75

%

 

 

6.75

%

 

 

7.50

%

 

2/4/2029

 

$

2,867,296

 

 

 

2,846,250

 

 

 

2,845,790

 

 

Q

Puppet, Inc.

 

First Lien Term Loan (3.0% Exit Fee)

 

LIBOR(Q)

 

 

1.00

%

 

 

8.50

%

 

 

9.50

%

 

6/19/2023

 

$

1,000,000

 

 

 

981,217

 

 

 

987,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8,777,467

 

 

 

8,782,790

 

 

 

Machinery

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sonny's Enterprises, LLC

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

6.75

%

 

 

7.75

%

 

8/5/2026

 

$

1,452,093

 

 

 

1,424,406

 

 

 

1,447,736

 

 

 

Sonny's Enterprises, LLC

 

First Lien Incremental Delayed Draw Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

6.75

%

 

 

7.75

%

 

8/5/2026

 

$

117,144

 

 

 

109,747

 

 

 

116,000

 

 

T

Sonny's Enterprises, LLC

 

First Lien Delayed Draw Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

6.75

%

 

 

7.75

%

 

8/5/2026

 

$

2,811,330

 

 

 

2,745,999

 

 

 

2,800,730

 

 

T

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,280,152

 

 

 

4,364,466

 

 

 

Media

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MBS Opco, LLC

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

9.00

%

 

 

10.00

%

 

12/29/2022

 

$

14,475,000

 

 

 

14,475,000

 

 

 

14,366,438

 

 

 

NEP II, Inc.

 

Second Lien Term Loan

 

LIBOR(M)

 

 

 

 

 

7.00

%

 

 

7.10

%

 

10/19/2026

 

$

3,131,760

 

 

 

2,861,739

 

 

 

3,061,296

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

17,336,739

 

 

 

17,427,734

 

 

 

Metals & Mining

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kemmerer Operations, LLC

 

First Lien Term Loan

 

Fixed

 

 

 

 

15.00% PIK

 

 

 

15.00

%

 

6/21/2023

 

$

2,867,558

 

 

 

2,867,558

 

 

 

2,867,558

 

 

D/F

Kemmerer Operations, LLC

 

First Lien Delayed Draw Term Loan

 

Fixed

 

 

 

 

15.00% PIK

 

 

 

15.00

%

 

6/21/2023

 

$

360,767

 

 

 

360,768

 

 

 

360,768

 

 

D/F/T

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,228,326

 

 

 

3,228,326

 

 

 

Personal Products

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paula's Choice Holdings, Inc.

 

First Lien Term Loan

 

LIBOR(M)

 

 

1.00

%

 

 

6.25

%

 

 

7.25

%

 

11/17/2025

 

$

7,653,125

 

 

 

7,463,453

 

 

 

7,614,860

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Professional Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dude Solutions Holdings, Inc.

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

7.50

%

 

 

8.50

%

 

6/13/2025

 

$

9,298,457

 

 

 

9,152,484

 

 

 

9,391,441

 

 

 

Dude Solutions Holdings, Inc.

 

Sr Secured Revolver

 

LIBOR(Q)

 

 

1.00

%

 

 

7.50

%

 

 

8.50

%

 

6/13/2025

 

$

 

 

 

(18,297

)

 

 

 

 

N/T

GI Consilio Parent, LLC

 

Second Lien Term Loan

 

LIBOR(M)

 

 

0.50

%

 

 

7.50

%

 

 

8.00

%

 

5/14/2029

 

$

5,000,000

 

 

 

4,951,128

 

 

 

4,980,000

 

 

 

JobandTalent USA, Inc. (United Kingdom)

 

First Lien Term Loan

 

LIBOR(M)

 

 

1.00

%

 

 

8.75

%

 

 

9.75

%

 

2/17/2025

 

$

7,200,000

 

 

 

7,066,014

 

 

 

7,257,600

 

 

H/J

JobandTalent USA, Inc. (United Kingdom)

 

First Lien Delayed Draw Term Loan

 

LIBOR(M)

 

 

1.00

%

 

 

8.75

%

 

 

9.75

%

 

2/17/2025

 

$

2,400,000

 

 

 

2,354,990

 

 

 

2,419,200

 

 

H/J

JobandTalent USA, Inc. (United Kingdom)

 

First Lien Incremental Delayed Draw Term Loan

 

LIBOR(M)

 

 

1.00

%

 

 

8.75

%

 

 

9.75

%

 

2/17/2025

 

$

2,900,000

 

 

 

2,843,539

 

 

 

2,923,200

 

 

H/J

RigUp, Inc.

 

First Lien Delayed Draw Term Loan (3.5% Exit Fee)

 

LIBOR(M)

 

 

1.50

%

 

 

7.00

%

 

 

8.50

%

 

3/1/2024

 

$

500,000

 

 

 

493,042

 

 

 

511,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26,842,900

 

 

 

27,482,441

 

 

 

Road & Rail

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GlobalTranz Enterprises LLC

 

Second Lien Term Loan

 

LIBOR(M)

 

 

 

 

 

8.25

%

 

 

8.35

%

 

5/15/2027

 

$

10,808,429

 

 

 

10,639,581

 

 

 

10,613,877

 

 

 

Keep Truckin, Inc.

 

First Lien Incremental Term Loan

 

LIBOR(M)

 

 

1.00

%

 

 

7.25

%

 

 

8.25

%

 

4/8/2025

 

$

9,600,000

 

 

 

9,461,632

 

 

 

9,580,800

 

 

 

St. George Warehousing & Trucking Co. of California, Inc.

 

First Lien Last Out Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

6.89% PIK + 3.09% Cash

 

 

 

10.98

%

 

4/28/2023

 

$

37,119,075

 

 

 

37,119,075

 

 

 

35,077,526

 

 

D

St. George Warehousing & Trucking Co. of California, Inc.

 

First Lien Last Out Delayed Draw Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

6.89% PIK + 3.09% Cash

 

 

 

10.98

%

 

4/28/2023

 

$

7,608,955

 

 

 

7,608,955

 

 

 

7,190,463

 

 

D

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

64,829,243

 

 

 

62,462,666

 

 

 

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

9


 

 

 

 

BlackRock Capital Investment Corporation

Consolidated Schedules of Investments—(Continued)

June 30, 2021  

(Unaudited)

 

Issuer(P/R)

 

Instrument

 

Ref(E)

 

Floor

 

 

Spread

 

 

Total Coupon

 

 

Maturity

 

Principal

 

 

Cost(A)

 

 

Fair

Value(B)

 

 

Notes

Debt Investments (continued)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aras Corporation

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

3.25% Cash + 3.75% PIK

 

 

 

8.00

%

 

4/13/2027

 

$

3,071,441

 

 

$

3,011,929

 

 

$

3,028,440

 

 

D

Aras Corporation

 

First Lien Delayed Draw Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

3.25% Cash + 3.75% PIK

 

 

 

8.00

%

 

4/13/2027

 

$

 

 

 

(3,802

)

 

 

(5,733

)

 

D/N/T

Aras Corporation

 

First Lien Revolver

 

LIBOR(Q)

 

 

1.00

%

 

 

6.50

%

 

 

7.50

%

 

4/13/2027

 

$

 

 

 

(5,923

)

 

 

(4,300

)

 

N/T

Backoffice Associates Holdings, LLC

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

7.50

%

 

 

8.50

%

 

4/30/2026

 

$

4,927,912

 

 

 

4,783,694

 

 

 

4,809,643

 

 

 

Backoffice Associates Holdings, LLC

 

First Lien Revolver

 

LIBOR(Q)

 

 

1.00

%

 

 

7.50

%

 

 

8.50

%

 

4/30/2026

 

$

 

 

 

(19,057

)

 

 

(15,769

)

 

N/T

Bluefin Holding, LLC

 

Second Lien Term Loan

 

LIBOR(M)

 

 

 

 

 

7.75

%

 

 

7.85

%

 

9/6/2027

 

$

4,809,535

 

 

 

4,749,726

 

 

 

4,809,535

 

 

 

Rhode Holdings, Inc. (Kaseya)

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

4.00% Cash + 3.00% PIK

 

 

 

8.00

%

 

5/2/2025

 

$

4,169,152

 

 

 

4,115,378

 

 

 

4,189,998

 

 

D

Rhode Holdings, Inc. (Kaseya)

 

First Lien Incremental Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

4.00% Cash + 3.00% PIK

 

 

 

8.00

%

 

5/2/2025

 

$

97,085

 

 

 

95,397

 

 

 

97,570

 

 

D

Rhode Holdings, Inc. (Kaseya)

 

First Lien Delayed Draw Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

4.00% Cash + 3.00% PIK

 

 

 

8.00

%

 

5/2/2025

 

$

487,940

 

 

 

485,570

 

 

 

490,380

 

 

D

Rhode Holdings, Inc. (Kaseya)

 

First Lien Incremental Delayed Draw Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

4.00% Cash + 3.00% PIK

 

 

 

8.00

%

 

5/2/2025

 

$

70,107

 

 

 

68,173

 

 

 

70,982

 

 

D/T

Rhode Holdings, Inc. (Kaseya)

 

Sr Secured Revolver

 

LIBOR(Q)

 

 

1.00

%

 

 

6.50

%

 

 

7.50

%

 

5/2/2025

 

$

164,770

 

 

 

160,324

 

 

 

164,770

 

 

T

Sep Raptor Acquisition Inc. (Loopio) (Canada)

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

7.00

%

 

 

8.00

%

 

3/31/2027

 

$

3,686,254

 

 

 

3,615,178

 

 

 

3,664,137

 

 

H/J

Sep Raptor Acquisition Inc. (Loopio) (Canada)

 

First Lien Revolver

 

LIBOR(Q)

 

 

1.00

%

 

 

7.00

%

 

 

8.00

%

 

3/31/2027

 

$

 

 

 

(7,850

)

 

 

(2,458

)

 

H/J/N/T

Sep Vulcan Acquisition Inc. (Canada)

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

7.00

%

 

 

8.00

%

 

3/16/2027

 

$

3,016,305

 

 

 

2,957,715

 

 

 

3,010,273

 

 

H/J

Sep Vulcan Acquisition Inc. (Canada)

 

First Lien Revolver

 

LIBOR(Q)

 

 

1.00

%

 

 

7.00

%

 

 

8.00

%

 

3/16/2027

 

$

 

 

 

(8,203

)

 

 

(862

)

 

H/J/N/T

Superman Holdings, LLC

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

5.39

%

 

 

6.39

%

 

8/31/2027

 

$

2,301,935

 

 

 

2,251,543

 

 

 

2,347,974

 

 

 

Superman Holdings, LLC

 

First Lien Incremental Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

5.39

%

 

 

6.39

%

 

8/31/2027

 

$

408,126

 

 

 

400,110

 

 

 

416,288

 

 

 

Superman Holdings, LLC

 

Sr Secured Revolver

 

LIBOR(Q)

 

 

1.00

%

 

 

5.39

%

 

 

6.39

%

 

8/31/2026

 

$

 

 

 

(7,101

)

 

 

 

 

N/T

Syntellis Performance Solutions, Inc.

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

8.00

%

 

 

9.00

%

 

8/2/2027

 

$

851,801

 

 

 

828,911

 

 

 

868,837

 

 

 

WinShuttle, LLC

 

First Lien FILO Term Loan

 

LIBOR(M)

 

 

1.00

%

 

 

8.42

%

 

 

9.42

%

 

8/9/2024

 

$

7,451,190

 

 

 

7,320,906

 

 

 

7,488,446

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

34,792,618

 

 

 

35,428,151

 

 

 

Specialty Retail

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calceus Acquisition, Inc. (Cole Haan)

 

First Lien Term Loan B

 

LIBOR(Q)

 

 

 

 

 

5.50

%

 

 

5.64

%

 

2/12/2025

 

$

173,649

 

 

 

165,870

 

 

 

167,571

 

 

 

Calceus Acquisition, Inc. (Cole Haan)

 

First Lien Sr Secured Notes

 

Fixed

 

 

 

 

 

9.75

%

 

 

9.75

%

 

2/19/2025

 

$

1,000,000

 

 

 

975,332

 

 

 

1,049,700

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,141,202

 

 

 

1,217,271

 

 

 

Textile, Apparel & Luxury Goods

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WH Buyer, LLC (Anne Klein)

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

7.47

%

 

 

8.47

%

 

12/31/2025

 

$

15,273,116

 

 

 

15,160,900

 

 

 

15,578,578

 

 

 

WH Buyer, LLC (Anne Klein)

 

First Lien Incremental Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

7.47

%

 

 

8.47

%

 

12/31/2025

 

$

1,153,846

 

 

 

1,144,616

 

 

 

1,176,923

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16,305,516

 

 

 

16,755,501

 

 

 

Tobacco Related

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Juul Labs, Inc.

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.50

%

 

 

8.00

%

 

 

9.50

%

 

8/2/2023

 

$

13,138,997

 

 

 

13,068,989

 

 

 

13,060,163

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trading Companies & Distributors

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Whele LLC

 

First Lien Incremental Term Loan

 

LIBOR(M)

 

 

1.00

%

 

 

7.62

%

 

 

8.62

%

 

10/15/2025

 

$

4,697,931

 

 

 

4,744,545

 

 

 

4,744,910

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Debt Investments - 141.2% of Net Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

509,029,842

 

 

 

490,350,104

 

 

 

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

10


 

 

 

 

BlackRock Capital Investment Corporation

Consolidated Schedules of Investments—(Continued)

June 30, 2021  

(Unaudited)

 

Issuer(P/R)

 

Instrument

 

 

 

 

 

 

 

 

 

Expiration

 

Shares

 

 

Cost(A)

 

 

Fair

Value(B)

 

 

Notes

Equity Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Markets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marsico Holdings, LLC

 

Limited Partnership/Limited Liability Company Interests

 

 

 

 

 

 

 

 

 

 

91,445

 

 

$

1,848,077

 

 

$

 

 

C/I

Pico Quantitative Trading, LLC

 

Warrants to Purchase Membership Units (144A)

 

 

 

 

 

 

 

2/7/2030

 

 

162

 

 

 

14,804

 

 

 

24,118

 

 

C/I

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,862,881

 

 

 

24,118

 

 

 

Chemicals

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AGY Equity, LLC

 

Class A Preferred Stock

 

 

 

 

 

 

 

 

 

 

 

 

4,195,600

 

 

 

1,139,597

 

 

 

570,184

 

 

C/F/I

AGY Equity, LLC

 

Class B Preferred Stock

 

 

 

 

 

 

 

 

 

 

 

 

2,936,920

 

 

 

 

 

 

 

 

C/F/I

AGY Equity, LLC

 

Class C Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

2,307,580

 

 

 

 

 

 

 

 

C/F/I

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,139,597

 

 

 

570,184

 

 

 

Diversified Consumer Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Razor Group GmbH (Germany)

 

Warrants to Purchase Preferred Stock

 

 

 

 

 

 

 

 

 

4/28/2028

 

 

182

 

 

 

 

 

 

190,948

 

 

C/H/I/J

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diversified Financial Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BCIC Senior Loan Partners, LLC

 

Limited Partnership/Limited Liability Company Interests

 

 

 

 

 

 

 

 

 

 

54,030,590

 

 

 

54,030,590

 

 

 

30,700,839

 

 

G/I/J/O/Q/T

Gordon Brothers Finance Company

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

10,612

 

 

 

10,611,549

 

 

 

 

 

C/G

Gordon Brothers Finance Company

 

Preferred Stock

 

 

 

 

 

 

 

 

 

 

 

 

34,285

 

 

 

36,624,684

 

 

 

 

 

C/G/S

Worldremit Group Limited (United Kingdom)

 

Warrants to Purchase Series D Stock

 

 

 

 

 

 

 

2/11/2031

 

 

7,662

 

 

 

 

 

 

177,682

 

 

C/H/I/J

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

101,266,823

 

 

 

30,878,521

 

 

 

Household Durables

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SVP - Singer Holdings, LP

 

Limited Partnership/Limited Liability Company Interests

 

 

 

 

 

 

 

 

 

 

1,416,279

 

 

 

3,513,710

 

 

 

25,917,906

 

 

C/I

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Internet Software & Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FinancialForce.com, Inc.

 

Warrants to Purchase Series C Preferred Stock

 

 

 

 

 

 

 

1/30/2029

 

 

450,000

 

 

 

100,544

 

 

 

231,706

 

 

C/I

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Media

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MBS Parent, LLC

 

Limited Partnership/Limited Liability Company Interests

 

 

 

 

 

 

 

 

 

 

546

 

 

 

500,000

 

 

 

633,873

 

 

C/M

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metals & Mining

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kemmerer Operations, LLC

 

Limited Partnership/Limited Liability Company Interests

 

 

 

 

 

 

 

 

 

 

8

 

 

 

753,850

 

 

 

482,859

 

 

C/F/K

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil, Gas & Consumable Fuels

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ETX Energy Management Company, LLC

 

Limited Partnership/Limited Liability Company Interests

 

 

 

 

 

 

 

 

 

 

53,815

 

 

 

 

 

 

 

 

C

ETX Energy, LLC

 

Limited Partnership/Limited Liability Company Interests

 

 

 

 

 

 

 

 

 

 

51,119

 

 

 

 

 

 

 

 

C/L

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Equity Securities - 17.0% of Net Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

109,137,405

 

 

 

58,930,115

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Investments - 158.2% of Net Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

618,167,247

 

 

$

549,280,219

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and Cash Equivalents - 4.9% of Net Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

17,030,583

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Cash and Investments - 163.1% of Net Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

566,310,802

 

 

 

 

 

Notes to Consolidated Schedules of Investments:

 

(A)

Represents amortized cost for fixed income securities and cost for preferred and common stock, limited partnership/limited liability company interests and equity warrants/options.

(B)

Fair value is determined by or under the direction of the Company’s Board of Directors. See Note 2 for further details.

(C)

Non-income producing equity securities at June 30, 2021.

(D)

Interest may be paid in cash or payment-in-kind (“PIK”), or a combination thereof which is generally at the option of the borrower. PIK earned is included in the cost basis of the security. In accordance with the Company’s policy, PIK is recorded on an effective yield basis.

(E)

Approximately 99.3% of the fair value of total senior secured loans in the Company’s portfolio bear interest at a floating rate that may be determined by reference to the London Interbank Offered Rate (LIBOR), “L”, or other base rate (commonly the Federal Funds Rate or the Prime Rate), “P”, at the borrower’s option. In addition, 89.4% of the fair value of such senior secured loans have floors of 0.25% to 2.75%. The borrower under a senior secured loan generally has the option to select from interest reset periods of one, two, three or six months and may alter that selection at the end of any reset period. The stated interest rate represents the weighted average interest rate at June 30, 2021 of all contracts within the specified loan facility.

(F)

Transaction and other information for “non-controlled, affiliated” investments under the Investment Company Act of 1940, whereby the Company owns 5% or more (but not more than 25%) of the portfolio company’s outstanding voting securities, is presented in a separate table in Consolidated Schedules of Investments.

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

11


 

 

 

(G)

Transaction and other information for “controlled” investments under the Investment Company Act of 1940, whereby the Company owns more than 25% of the portfolio company’s outstanding voting securities, is presented in a separate table in Consolidated Schedules of Investments.

(H)

Non-U.S company or principal place of business outside the U.S.

(I)

Security is either exempt from registration under Rule 144A of the Securities Act of 1933, or sale of the security is subject to certain contractual restrictions. Securities that are exempt from registration under 144A may be resold in transactions, normally to qualified institutional buyers. In aggregate, these securities represent 16.8% of the Company’s net assets at June 30, 2021. The acquisition dates for restricted securities of unaffiliated issuers were as follows as of June 30, 2021:

 

Investment

 

Initial Acquisition Date

Marsico Holdings, LLC, Limited Partnership/Limited Liability Company Interests

 

11/28/2007

SVP-Singer Holdings LP, Limited Partnership/Limited Liability Company Interests

 

3/16/2018

FinancialForce.com, Warrants to Purchase Series C Preferred Stock

 

1/30/2019

Pico Quantitative Trading, LLC, Warrants to Purchase Membership Units

 

2/7/2020

Worldremit Group Limited (United Kingdom), Warrants to Purchase Series D Stock

 

2/11/2021

Advanced Lighting Technologies, LLC, Senior Secured Notes

 

3/16/2021

Razor Group GmbH (Germany), Warrants to Purchase Preferred Stock

 

4/28/2021

 

(J)

Investments that the Company has determined are not “qualifying assets” under Section 55(a) of the 1940 Act. Under the 1940 Act, we may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of our total assets. The status of these assets under the 1940 Act may be subject to change. The Company monitors the status of these assets on an ongoing basis. As of June 30, 2021, approximately 11.3% of the total assets of the Company were not qualifying assets under Section 55(a) of the 1940 Act.

(K)

The Company is the sole stockholder of BKC ASW Blocker, Inc., a consolidated subsidiary, which is the beneficiary of 5% or more (but not more than 25%) of the voting securities of Kemmerer Operations, LLC and thus non-controlled, affiliated investments.

(L)

The Company is the sole stockholder of BKC ASW Blocker, Inc., a consolidated subsidiary, which is the beneficiary of less than 5% of the voting securities of ETX Energy, LLC, and thus non-controlled, non-affiliated investments.

(M)

The Company is the sole stockholder of BCIC-MBS, LLC, a consolidated subsidiary, which is the beneficiary of less than 5% of the voting securities of MBS Parent, LLC and thus a non-controlled, non-affiliated investment.

(N)

Negative balances represent unfunded commitments that were acquired and/or valued at a discount.

(O)

BCIC Senior Loan Partners, LLC was formed on June 23, 2016. See Note 5 for summarized financial information of BCIC Senior Loan Partners, LLC.

(P)

Unless otherwise indicated, all investments are considered Level 3 in accordance with ASC Topic 820 (see Note 2).

(Q)

Investments are considered other than Level 3 in accordance with ASC Topic 820 (see Note 2).

(R)

As of June 30, 2021, the Company generally uses Global Industry Classification Standard (“GICS”) codes to identify the industry groupings. This information is unaudited.

(S)

The investment is on non-accrual status as of June 30, 2021 and therefore non-income producing. At June 30, 2021, the aggregate fair value and amortized cost of the Company’s debt and preferred stock investments on non-accrual status represents 4.45% and 14.53%, respectively.

(T)

Position or associated portfolio company thereof has an unfunded loan commitment as of June 30, 2021 (see Note 9). Note that there may be additional unfunded positions which do not have a funded component at period end, and therefore are not displayed herein.

(U)

This investment will have a first lien security interest after the senior tranches are repaid.

 

LIBOR resets monthly (M), quarterly (Q), semiannually (S), or annually (A).

 

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

12


 

 

 

 

BlackRock Capital Investment Corporation

Consolidated Schedules of Investments—(Continued)

June 30, 2021

(Unaudited)

 

Non-Controlled Affiliate Security(1)

 

Dividends or interest(2)

 

 

Fair Value at

December 31, 2020

 

 

Net realized gain (loss)

 

 

Net increase or decrease in unrealized appreciation or depreciation

 

 

Acquisitions(3)

 

 

Dispositions(4)

 

 

Fair Value

at

June 30,

2021

 

 

Advanced Lighting Technologies, LLC.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior Secured Note, Second Lien

 

$

 

 

$

 

 

$

(1,999,678

)

 

$

2,181,306

 

 

$

 

 

$

(181,628

)

 

$

 

Senior Secured Loan, First Lien

 

 

13,185

 

 

 

3,223,664

 

 

 

(3,017,339

)

 

 

1,774,757

 

 

 

 

 

 

(1,981,082

)

 

 

 

Limited Liability Co. Interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Warrants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advantage Insurance Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Stock

 

 

 

 

 

5,720,010

 

 

 

(2,972,574

)

 

 

2,972,574

 

 

 

 

 

 

(5,720,010

)

 

 

 

Preferred Stock Series B

 

 

71,500

 

 

 

 

 

 

 

 

 

 

 

 

3,575,000

 

 

 

(3,575,000

)

 

 

 

AGY Equity, LLC:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class A Preferred Stock

 

 

 

 

 

1,557,200

 

 

 

 

 

 

(987,016

)

 

 

 

 

 

 

 

 

570,184

 

 

Class B Preferred Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class C Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kemmerer Operations, LLC:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Delayed Draw Term Loan, First Lien

 

 

30,994

 

 

 

284,343

 

 

 

 

 

 

214,865

 

 

 

31,052

 

 

 

(169,492

)

 

 

360,768

 

 

Senior Secured Loan, First Lien

 

 

204,702

 

 

 

2,314,096

 

 

 

 

 

 

348,845

 

 

 

204,617

 

 

 

 

 

 

2,867,558

 

 

Limited Liability Co. Interest

 

 

 

 

 

 

 

 

 

 

 

482,859

 

 

 

 

 

 

 

 

 

482,859

 

 

Totals

 

$

320,381

 

 

$

13,099,313

 

 

$

(7,989,591

)

 

$

6,988,190

 

 

$

3,810,669

 

 

$

(11,627,212

)

 

$

4,281,369

 

 

 

(1)

The issuers of the securities listed on this schedule are considered non-controlled, affiliated investments under the Investment Company Act of 1940 due to the ownership by the Company of 5% to 25% of the issuers’ voting securities.

(2)

Also includes fee income as applicable.

(3)

Acquisitions include new purchases, PIK income and amortization of original issue and market discounts, and the movement of an existing portfolio company into this category from a different category.

(4)

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

Investment no longer held as of June 30, 2021.

The aggregate fair value of non-controlled, affiliated investments at June 30, 2021 represents 1.2% of the Company’s net assets.  

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

13


 

 

 

BlackRock Capital Investment Corporation

Consolidated Schedules of Investments—(Continued)

June 30, 2021  

(Unaudited)

 

Controlled Affiliate Security(1)

 

Dividends or interest(2)

 

 

Fair Value at

December 31, 2020

 

 

Net realized gain (loss)

 

 

Net increase or decrease in unrealized appreciation or depreciation(5)

 

 

Acquisitions(3)

 

 

Dispositions(4)

 

 

Fair Value

at

June 30,

2021

 

 

BCIC Senior Loan Partners, LLC:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Limited Liability Co. Interest

 

$

1,047,975

 

 

$

36,150,259

 

 

$

 

 

$

2,428,301

 

 

$

 

 

$

(7,877,721

)

 

$

30,700,839

 

 

First Boston Construction Holdings, LLC:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subordinated Debt

 

 

163,125

 

 

 

32,625,000

 

 

 

 

 

 

 

 

 

 

 

 

(32,625,000

)

 

 

 

Limited Liability Co. Interest

 

 

 

 

 

4,557,035

 

 

 

(2,290,144

)

 

 

3,599,215

 

 

 

 

 

 

(5,866,106

)

 

 

 

Gordon Brothers Finance Company:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured Debt

 

 

 

 

 

22,850,000

 

 

 

 

 

 

(253,748

)

 

 

 

 

 

(1,427,252

)

 

 

21,169,000

 

 

Preferred Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Red Apple Stores Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior Secured Loan, Second Lien

 

 

555,446

 

 

 

14,785,933

 

 

 

(1,998,478

)

 

 

2,016,263

 

 

 

 

 

 

(14,803,718

)

 

 

 

Preferred Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

 

 

 

(6,751,452

)

 

 

6,751,452

 

 

 

 

 

 

 

 

 

 

Totals

 

$

1,766,546

 

 

$

110,968,227

 

 

$

(11,040,074

)

 

$

14,541,483

 

 

$

 

 

$

(62,599,797

)

 

$

51,869,839

 

 

 

(1)

The issuers of securities listed on this schedule are considered controlled affiliates under the Investment Company Act of 1940 due to the ownership by the Company of more than 25% of the issuers’ voting securities.

(2)

Also includes fee income as applicable.

(3)

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

(4)

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

(5)

Net unrealized gain (loss) before taxes includes the net change in unrealized appreciation (depreciation) on controlled investments and net change in unrealized appreciation (depreciation) on foreign currency translation associated with the controlled investments. For the six months ended June 30, 2021, the net change in unrealized appreciation (depreciation) and foreign currency translation associated with the Red Apple Stores Inc.’s common stock was $285,360 and $(285,360), respectively.

Investment no longer held as of June 30, 2021.

The aggregate fair value of controlled investments at June 30, 2021 represents 14.9% of the Company’s net assets.  

 

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

14


 

 

 

 

BlackRock Capital Investment Corporation

Consolidated Schedules of Investments—(Continued)

December 31, 2020

 

Issuer(Q/S)

 

Instrument

 

Ref(E)

 

Floor

 

 

Spread

 

 

Total Coupon

 

 

Maturity

 

Principal

 

 

Cost(A)

 

 

Fair

Value(B)

 

 

Notes

Debt Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace & Defense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unanet, Inc.

 

First Lien Term Loan

 

LIBOR(M)

 

 

 

 

 

6.25

%

 

 

6.44

%

 

5/31/2024

 

$

6,632,653

 

 

$

6,584,223

 

 

$

6,526,531

 

 

 

Unanet, Inc.

 

Sr Secured Revolver

 

LIBOR(M)

 

 

 

 

 

6.25

%

 

 

6.44

%

 

5/31/2024

 

$

816,327

 

 

 

810,431

 

 

 

803,265

 

 

 

Unanet, Inc.

 

First Lien Delayed Draw Term Loan

 

LIBOR(M)

 

 

 

 

 

6.25

%

 

 

6.44

%

 

5/31/2024

 

$

1,709,183

 

 

 

1,697,471

 

 

 

1,668,367

 

 

U

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9,092,125

 

 

 

8,998,163

 

 

 

Airlines

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One Sky Flight, LLC

 

First Lien Term Loan

 

LIBOR(S)

 

 

1.00

%

 

 

7.50

%

 

 

8.50

%

 

12/27/2024

 

$

7,125,000

 

 

 

6,974,333

 

 

 

7,196,250

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Markets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pico Quantitative Trading, LLC

 

First Lien Term Loan (1.0% Exit Fee)

 

LIBOR(Q)

 

 

1.50

%

 

 

7.25

%

 

 

8.75

%

 

2/7/2025

 

$

500,000

 

 

 

481,114

 

 

 

495,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Services & Supplies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kellermeyer Bergensons Services, LLC

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

6.50

%

 

 

7.50

%

 

11/7/2026

 

$

1,617,647

 

 

 

1,604,958

 

 

 

1,633,824

 

 

 

Kellermeyer Bergensons Services, LLC

 

First Lien Delayed Draw Term Loan A

 

LIBOR(Q)

 

 

1.00

%

 

 

6.50

%

 

 

7.50

%

 

11/7/2026

 

$

355,882

 

 

 

352,753

 

 

 

359,441

 

 

 

Kellermeyer Bergensons Services, LLC

 

First Lien Delayed Draw Term Loan B

 

LIBOR(Q)

 

 

1.00

%

 

 

6.50

%

 

 

7.50

%

 

11/7/2026

 

$

92,778

 

 

 

92,620

 

 

 

97,676

 

 

U

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,050,331

 

 

 

2,090,941

 

 

 

Consumer Finance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Barri Financial Group, LLC

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

7.75

%

 

 

8.75

%

 

10/23/2024

 

$

7,740,371

 

 

 

7,585,234

 

 

 

7,817,774

 

 

 

Open Lending, LLC

 

First Lien Term Loan

 

LIBOR(M)

 

 

1.00

%

 

 

6.50

%

 

 

7.50

%

 

3/11/2027

 

$

490,625

 

 

 

474,859

 

 

 

488,172

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8,060,093

 

 

 

8,305,946

 

 

 

Containers & Packaging

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paragon Films, Inc.

 

Second Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

8.50

%

 

 

9.50

%

 

3/29/2026

 

$

21,000,000

 

 

 

20,667,384

 

 

 

20,580,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diversified Consumer Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Thras.io, LLC

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

7.00

%

 

 

8.00

%

 

12/18/2026

 

$

4,708,253

 

 

 

4,590,547

 

 

 

4,590,547

 

 

 

Thras.io, LLC

 

First Lien Delayed Draw Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

7.00

%

 

 

8.00

%

 

12/18/2026

 

 

 

 

 

(77,687

)

 

 

(77,687

)

 

O/U

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,512,860

 

 

 

4,512,860

 

 

 

Diversified Financial Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aretec Group, Inc. (Cetera)

 

Second Lien Term Loan

 

LIBOR(M)

 

 

 

 

 

8.25

%

 

 

8.40

%

 

10/1/2026

 

$

3,563,440

 

 

 

3,525,253

 

 

 

3,313,999

 

 

 

Callodine Commercial Finance, LLC

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

9.00

%

 

 

10.00

%

 

11/3/2025

 

$

25,000,000

 

 

 

25,000,000

 

 

 

25,000,000

 

 

U

Callodine Commercial Finance, LLC

 

Subordinated Debt

 

LIBOR(Q)

 

 

 

 

 

8.50

%

 

 

8.75

%

 

11/30/2024

 

$

5,000,000

 

 

 

5,000,000

 

 

 

5,000,000

 

 

V

Gordon Brothers Finance Company

 

Unsecured Debt

 

LIBOR(M)

 

 

1.00

%

 

 

11.00

%

 

 

12.00

%

 

10/31/2021

 

$

43,288,785

 

 

 

43,288,785

 

 

 

22,850,000

 

 

G/T

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

76,814,038

 

 

 

56,163,999

 

 

 

Electrical Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advanced Lighting Technologies LLC

 

Second Lien Sr Secured Notes

 

LIBOR(Q)

 

 

1.00

%

 

17.00% PIK

 

 

 

18.00

%

 

10/4/2023

 

$

9,762,878

 

 

 

2,181,306

 

 

 

 

 

D/F/J/T

Advanced Lighting Technologies LLC

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

7.50

%

 

 

8.50

%

 

10/4/2022

 

$

5,036,975

 

 

 

4,998,421

 

 

 

3,223,664

 

 

F

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,179,727

 

 

 

3,223,664

 

 

 

Energy Equipment & Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sphera Solutions, Inc. (Diamondback)

 

First Lien FILO Term Loan B

 

LIBOR(Q)

 

 

1.00

%

 

 

9.98

%

 

 

10.98

%

 

6/14/2023

 

$

13,546,524

 

 

 

13,379,697

 

 

 

13,370,419

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Health Care Equipment & Supplies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PharmaLogic Holdings Corp.

 

Second Lien Term Loan

 

LIBOR(M)

 

 

 

 

 

8.00

%

 

 

8.15

%

 

12/11/2023

 

$

8,786,087

 

 

 

8,740,207

 

 

 

8,522,504

 

 

 

PharmaLogic Holdings Corp.

 

Second Lien Term Loan

 

LIBOR(M)

 

 

 

 

 

8.00

%

 

 

8.15

%

 

12/11/2023

 

$

3,323,478

 

 

 

3,309,838

 

 

 

3,223,774

 

 

H/K

PharmaLogic Holdings Corp.

 

Second Lien Delayed Draw Term Loan

 

LIBOR(M)

 

 

 

 

 

8.00

%

 

 

8.15

%

 

12/11/2023

 

$

2,690,435

 

 

 

2,681,775

 

 

 

2,609,722

 

 

 

Zest Acquisition Corp.

 

Second Lien Term Loan

 

LIBOR(M)

 

 

1.00

%

 

 

7.50

%

 

 

8.50

%

 

3/14/2026

 

$

15,000,000

 

 

 

14,895,219

 

 

 

13,650,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

29,627,039

 

 

 

28,006,000

 

 

 

Health Care Providers & Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Midwest Physician Administrative Services, LLC

 

Second Lien Term Loan

 

LIBOR(M)

 

 

0.75

%

 

 

7.00

%

 

 

7.75

%

 

8/15/2025

 

$

10,000,000

 

 

 

9,947,414

 

 

 

9,725,000

 

 

R

Outcomes Group Holdings, Inc.

 

Second Lien Term Loan

 

LIBOR(Q)

 

 

 

 

 

7.50

%

 

 

7.75

%

 

10/26/2026

 

$

11,538,462

 

 

 

11,515,750

 

 

 

11,538,462

 

 

 

Team Services Group, LLC

 

Second Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

9.00

%

 

 

10.00

%

 

11/13/2028

 

$

5,788,615

 

 

 

5,601,268

 

 

 

5,730,729

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27,064,432

 

 

 

26,994,191

 

 

 

 

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

15


 

 

 

 

BlackRock Capital Investment Corporation

Consolidated Schedules of Investments—(Continued)

December 31, 2020

 

Issuer(Q/S)

 

Instrument

 

Ref(E)

 

Floor

 

 

Spread

 

 

Total Coupon

 

 

Maturity

 

Principal

 

 

Cost(A)

 

 

Fair

Value(B)

 

 

Notes

Debt Investments (continued)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Health Care Technology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CareATC, Inc.

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

7.25

%

 

 

8.25

%

 

3/14/2024

 

$

4,733,036

 

 

$

4,669,959

 

 

$

4,780,367

 

 

 

CareATC, Inc.

 

Sr Secured Revolver

 

LIBOR(Q)

 

 

1.00

%

 

 

7.25

%

 

 

8.25

%

 

3/14/2024

 

$

 

 

 

(4,515

)

 

 

 

 

O/U

Sandata Technologies, LLC

 

First Lien Term Loan

 

LIBOR(Q)

 

 

 

 

 

6.00

%

 

 

6.31

%

 

7/23/2024

 

$

4,500,000

 

 

 

4,449,231

 

 

 

4,383,000

 

 

 

Sandata Technologies, LLC

 

Sr Secured Revolver

 

LIBOR(Q)

 

 

 

 

 

6.00

%

 

 

6.31

%

 

7/23/2024

 

$

 

 

 

(5,506

)

 

 

(13,000

)

 

O/U

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9,109,169

 

 

 

9,150,367

 

 

 

Insurance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AmeriLife Holdings, LLC

 

Second Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

8.50

%

 

 

9.50

%

 

3/18/2028

 

$

6,697,322

 

 

 

6,572,096

 

 

 

6,657,138

 

 

 

AmeriLife Holdings, LLC

 

Second Lien Incremental Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

8.50

%

 

 

9.50

%

 

3/18/2028

 

$

2,337,744

 

 

 

2,297,151

 

 

 

2,323,718

 

 

 

IT Parent, LLC

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

6.25

%

 

 

7.25

%

 

10/1/2026

 

$

1,750,000

 

 

 

1,716,183

 

 

 

1,741,250

 

 

 

IT Parent, LLC

 

Sr Secured Revolver

 

LIBOR(Q)

 

 

1.00

%

 

 

6.25

%

 

 

7.25

%

 

10/1/2026

 

$

200,000

 

 

 

195,206

 

 

 

198,750

 

 

U

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,780,636

 

 

 

10,920,856

 

 

 

Internet & Catalog Retail

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Live Auctioneers, LLC

 

First Lien Last Out B-2 Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

6.76

%

 

 

7.76

%

 

5/21/2025

 

$

7,693,552

 

 

 

7,572,688

 

 

 

7,555,068

 

 

 

Live Auctioneers, LLC

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

6.76

%

 

 

7.76

%

 

5/21/2025

 

$

3,005,110

 

 

 

2,945,191

 

 

 

2,951,018

 

 

 

Syndigo, LLC

 

Second Lien Term Loan

 

LIBOR(Q)

 

 

0.75

%

 

 

8.00

%

 

 

8.75

%

 

12/14/2028

 

$

4,673,472

 

 

 

4,603,370

 

 

 

4,603,370

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15,121,249

 

 

 

15,109,456

 

 

 

Internet Software & Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FinancialForce.com, Inc.

 

First Lien Delayed Draw Term Loan (3.0% Exit Fee)

 

LIBOR(M)

 

 

2.75

%

 

 

6.75

%

 

 

9.50

%

 

2/1/2024

 

$

10,000,000

 

 

 

9,868,861

 

 

 

10,120,000

 

 

 

MetricStream, Inc.

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

8.00

%

 

 

9.00

%

 

9/28/2024

 

$

9,535,314

 

 

 

9,356,259

 

 

 

9,344,608

 

 

 

Persado, Inc.

 

First Lien Delayed Draw Term Loan (4.25% Exit Fee)

 

LIBOR(M)

 

 

1.80

%

 

 

7.00

%

 

 

8.80

%

 

2/1/2025

 

$

1,562,500

 

 

 

1,549,386

 

 

 

1,546,875

 

 

 

Quartz Holding Company (Quick Base)

 

Second Lien Term Loan

 

LIBOR(M)

 

 

 

 

 

8.00

%

 

 

8.15

%

 

4/2/2027

 

$

5,512,958

 

 

 

5,421,288

 

 

 

5,444,046

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26,195,794

 

 

 

26,455,529

 

 

 

IT Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Puppet, Inc.

 

First Lien Term Loan (3.0% Exit Fee)

 

LIBOR(Q)

 

 

1.00

%

 

 

8.50

%

 

 

9.50

%

 

6/19/2023

 

$

1,000,000

 

 

 

976,937

 

 

 

982,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Machinery

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sonny's Enterprises, LLC

 

First Lien Term Loan

 

LIBOR(M)

 

 

1.00

%

 

 

7.00

%

 

 

8.00

%

 

8/5/2026

 

$

1,459,390

 

 

 

1,430,241

 

 

 

1,430,202

 

 

 

Sonny's Enterprises, LLC

 

First Lien Delayed Draw Term Loan

 

LIBOR(M)

 

 

1.00

%

 

 

7.00

%

 

 

8.00

%

 

8/5/2026

 

$

 

 

 

(70,750

)

 

 

(70,885

)

 

O/U

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,359,491

 

 

 

1,359,317

 

 

 

Media

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MBS Opco, LLC

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

9.00

%

 

 

10.00

%

 

12/29/2022

 

$

14,550,000

 

 

 

14,550,000

 

 

 

14,222,625

 

 

 

NEP II, Inc.

 

Second Lien Term Loan

 

LIBOR(M)

 

 

 

 

 

7.00

%

 

 

7.15

%

 

10/19/2026

 

$

6,631,760

 

 

 

6,324,455

 

 

 

5,623,733

 

 

R

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20,874,455

 

 

 

19,846,358

 

 

 

Metals & Mining

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kemmerer Operations, LLC

 

First Lien Term Loan

 

Fixed

 

 

 

 

15.00% PIK

 

 

 

15.00

%

 

6/21/2023

 

$

2,662,942

 

 

 

2,662,942

 

 

 

2,314,096

 

 

D/F

Kemmerer Operations, LLC

 

First Lien Delayed Draw Term Loan

 

Fixed

 

 

 

 

15.00% PIK

 

 

 

15.00

%

 

6/21/2023

 

$

499,207

 

 

 

499,207

 

 

 

284,343

 

 

D/F/U

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,162,149

 

 

 

2,598,439

 

 

 

Multiline Retail

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Red Apple Stores Inc.

 

Second Lien Term Loan

 

Fixed

 

 

 

 

 

10.00

%

 

 

10.00

%

 

8/1/2024

 

$

16,802,196

 

 

 

16,802,197

 

 

 

14,785,933

 

 

G/H/K

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personal Products

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paula's Choice Holdings, Inc.

 

First Lien Term Loan

 

LIBOR(M)

 

 

1.00

%

 

 

6.25

%

 

 

7.25

%

 

11/17/2025

 

$

7,750,000

 

 

 

7,537,774

 

 

 

7,556,250

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Professional Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dude Solutions Holdings, Inc.

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

7.50

%

 

 

8.50

%

 

6/13/2025

 

$

9,321,820

 

 

 

9,158,283

 

 

 

9,508,256

 

 

 

Dude Solutions Holdings, Inc.

 

Sr Secured Revolver

 

LIBOR(Q)

 

 

1.00

%

 

 

7.50

%

 

 

8.50

%

 

6/13/2025

 

$

 

 

 

(20,601

)

 

 

 

 

O/U

RigUp, Inc.

 

First Lien Delayed Draw Term Loan (3.5% Exit Fee)

 

LIBOR(M)

 

 

1.50

%

 

 

7.00

%

 

 

8.50

%

 

3/1/2024

 

$

333,333

 

 

 

325,097

 

 

 

324,333

 

 

U

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9,462,779

 

 

 

9,832,589

 

 

 

Road & Rail

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GlobalTranz Enterprises LLC

 

Second Lien Term Loan

 

LIBOR(M)

 

 

 

 

 

8.25

%

 

 

8.40

%

 

5/15/2027

 

$

10,808,429

 

 

 

10,627,175

 

 

 

9,262,824

 

 

 

St. George Warehousing & Trucking Co. of California, Inc.

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

9.25% PIK + 1.00% Cash

 

 

 

11.25

%

 

4/28/2023

 

$

35,796,853

 

 

 

35,796,853

 

 

 

32,038,183

 

 

D

St. George Warehousing & Trucking Co. of California, Inc.

 

First Lien Delayed Draw Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

9.25% PIK + 1.00% Cash

 

 

 

11.25

%

 

4/28/2023

 

$

7,337,916

 

 

 

7,337,916

 

 

 

6,567,435

 

 

D

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

53,761,944

 

 

 

47,868,442

 

 

 

 

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

16


 

 

 

 

BlackRock Capital Investment Corporation

Consolidated Schedules of Investments—(Continued)

December 31, 2020

 

Issuer(Q/S)

 

Instrument

 

Ref(E)

 

Floor

 

 

Spread

 

 

Total Coupon

 

 

Maturity

 

Principal

 

 

Cost(A)

 

 

Fair

Value(B)

 

 

Notes

Debt Investments (continued)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bluefin Holding, LLC

 

Second Lien Term Loan

 

LIBOR(M)

 

 

 

 

 

7.75

%

 

 

7.90

%

 

9/6/2027

 

$

4,809,535

 

 

$

4,745,288

 

 

$

4,857,631

 

 

 

Rhode Holdings, Inc. (Kaseya)

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

4.00% Cash + 3.00% PIK

 

 

 

8.09

%

 

5/2/2025

 

$

4,106,632

 

 

 

4,045,856

 

 

 

4,135,378

 

 

D

Rhode Holdings, Inc. (Kaseya)

 

First Lien Incremental Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

4.00% Cash + 3.00% PIK

 

 

 

8.00

%

 

5/2/2025

 

$

96,058

 

 

 

94,164

 

 

 

96,730

 

 

D

Rhode Holdings, Inc. (Kaseya)

 

First Lien Delayed Draw Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

4.00% Cash + 3.00% PIK

 

 

 

8.00

%

 

5/2/2025

 

$

482,361

 

 

 

479,191

 

 

 

485,737

 

 

D

Rhode Holdings, Inc. (Kaseya)

 

First Lien Incremental Delayed Draw Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

4.00% Cash + 3.00% PIK

 

 

 

8.00

%

 

5/2/2025

 

$

 

 

 

(2,133

)

 

 

1,223

 

 

D/O/U

Rhode Holdings, Inc. (Kaseya)

 

Sr Secured Revolver

 

LIBOR(Q)

 

 

1.00

%

 

 

6.50

%

 

 

7.50

%

 

5/2/2025

 

$

164,770

 

 

 

159,711

 

 

 

164,770

 

 

U

Superman Holdings, LLC

 

First Lien Term Loan

 

PRIME

 

 

 

 

 

7.00

%

 

 

10.25

%

 

8/31/2027

 

$

2,313,532

 

 

 

2,258,098

 

 

 

2,322,786

 

 

 

Superman Holdings, LLC

 

Sr Secured Revolver

 

PRIME

 

 

 

 

 

7.00

%

 

 

10.25

%

 

8/31/2026

 

$

 

 

 

(7,780

)

 

 

 

 

O/U

Syntellis Performance Solutions, Inc.

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.00

%

 

 

8.00

%

 

 

9.00

%

 

8/2/2027

 

$

856,092

 

 

 

831,337

 

 

 

860,372

 

 

 

WinShuttle, LLC

 

First Lien FILO Term Loan

 

LIBOR(M)

 

 

1.00

%

 

 

8.42

%

 

 

9.42

%

 

8/9/2024

 

$

7,655,992

 

 

 

7,496,633

 

 

 

7,770,832

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20,100,365

 

 

 

20,695,459

 

 

 

Specialty Retail

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calceus Acquisition, Inc. (Cole Haan)

 

First Lien Term Loan B

 

LIBOR(Q)

 

 

 

 

 

5.50

%

 

 

5.73

%

 

2/12/2025

 

$

234,650

 

 

 

222,915

 

 

 

222,918

 

 

 

Calceus Acquisition, Inc. (Cole Haan)

 

First Lien Sr Secured Notes

 

Fixed

 

 

 

 

 

9.75

%

 

 

9.75

%

 

2/19/2025

 

$

1,000,000

 

 

 

972,795

 

 

 

1,098,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,195,710

 

 

 

1,321,418

 

 

 

Textile, Apparel & Luxury Goods

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WH Buyer, LLC (Anne Klein)

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.50

%

 

 

7.76

%

 

 

9.26

%

 

7/16/2025

 

$

15,273,116

 

 

 

15,146,958

 

 

 

15,181,476

 

 

 

WH Buyer, LLC (Anne Klein)

 

First Lien Incremental Term Loan

 

LIBOR(Q)

 

 

1.50

%

 

 

7.76

%

 

 

9.26

%

 

7/16/2025

 

$

1,153,846

 

 

 

1,143,530

 

 

 

1,146,922

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16,290,488

 

 

 

16,328,398

 

 

 

Thrifts & Mortgage Finance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Boston Construction Holdings, LLC

 

Subordinated Debt

 

Fixed

 

 

 

 

 

12.00

%

 

 

12.00

%

 

2/23/2023

 

$

32,625,000

 

 

 

32,625,000

 

 

 

32,625,000

 

 

D/G/K

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tobacco Related

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Juul Labs, Inc.

 

First Lien Term Loan

 

LIBOR(Q)

 

 

1.50

%

 

 

8.00

%

 

 

9.50

%

 

8/2/2023

 

$

13,226,497

 

 

 

13,134,287

 

 

 

13,200,044

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Debt Investments - 136.7% of Net Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

464,393,597

 

 

 

430,573,788

 

 

 

 


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

17


 

 

 

 

BlackRock Capital Investment Corporation

Consolidated Schedules of Investments—(Continued)

December 31, 2020

 

Issuer(Q/S)

 

Instrument

 

 

 

 

 

 

 

 

 

Expiration

 

Shares

 

 

Cost(A)

 

 

Fair

Value(B)

 

 

Notes

Equity Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Markets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marsico Holdings, LLC

 

Limited Partnership/Limited Liability Company Interests

 

 

 

 

91,445

 

 

$

1,848,077

 

 

$

 

 

C/J

Pico Quantitative Trading, LLC

 

Warrants to Purchase Membership Units (144A)

 

2/7/2030

 

 

162

 

 

 

14,804

 

 

 

16,046

 

 

C/J

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,862,881

 

 

 

16,046

 

 

 

Chemicals

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AGY Equity, LLC

 

Class A Preferred Stock

 

 

 

 

 

 

 

 

 

 

 

 

4,195,600

 

 

 

1,139,597

 

 

 

1,557,200

 

 

C/F/J

AGY Equity, LLC

 

Class B Preferred Stock

 

 

 

 

 

 

 

 

 

 

 

 

2,936,920

 

 

 

 

 

 

 

 

C/F/J

AGY Equity, LLC

 

Class C Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

2,307,580

 

 

 

 

 

 

 

 

C/F/J

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,139,597

 

 

 

1,557,200

 

 

 

Diversified Financial Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BCIC Senior Loan Partners, LLC

 

Limited Partnership/Limited Liability Company Interests

 

 

 

 

61,908,311

 

 

 

61,908,311

 

 

 

36,150,259

 

 

G/J/K/P/R/U

Gordon Brothers Finance Company

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

10,612

 

 

 

10,611,548

 

 

 

 

 

C/G

Gordon Brothers Finance Company

 

Preferred Stock

 

 

 

 

 

 

 

 

 

 

 

 

34,285

 

 

 

36,624,684

 

 

 

 

 

C/G/T

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

109,144,543

 

 

 

36,150,259

 

 

 

Electrical Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advanced Lighting Technologies LLC

 

Equity Warrants/Options

 

 

 

 

 

 

 

 

 

10/4/2027

 

 

2,360

 

 

 

 

 

 

 

 

C/F/J

Advanced Lighting Technologies LLC

 

Limited Partnership/Limited Liability Company Interests

 

 

 

 

149,717

 

 

 

 

 

 

 

 

C/F

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Health Care Equipment & Supplies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Facet Investment, Inc.

 

Equity Warrants/Options

 

 

 

 

 

 

 

 

 

1/18/2021

 

 

1,978

 

 

 

250,000

 

 

 

 

 

C

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Household Durables

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SVP - Singer Holdings, LP

 

Limited Partnership/Limited Liability Company Interests

 

 

 

 

1,416,279

 

 

 

5,030,156

 

 

 

 

 

C/J

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Insurance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advantage Insurance Inc.

 

Preferred Stock

 

 

 

 

 

 

 

 

 

 

 

 

572,001

 

 

 

8,692,584

 

 

 

5,720,010

 

 

C/D/F/J/T

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Internet Software & Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FinancialForce.com, Inc.

 

Warrants to Purchase Series C Preferred Stock

 

1/30/2029

 

 

62,840

 

 

 

100,544

 

 

 

137,714

 

 

C/J

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Media

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MBS Parent, LLC

 

Limited Partnership/Limited Liability Company Interests

 

 

 

 

546

 

 

 

500,000

 

 

 

313,424

 

 

C/N

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metals & Mining

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kemmerer Operations, LLC

 

Limited Partnership/Limited Liability Company Interests

 

 

 

 

8

 

 

 

753,850

 

 

 

 

 

C/F/L

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Multiline Retail

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Red Apple Stores Inc.

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

8,756,859

 

 

 

6,751,452

 

 

 

 

 

C/G/H/I/K

Red Apple Stores Inc.

 

Preferred Stock

 

 

 

 

 

 

 

 

 

 

 

 

6,806,383

 

 

 

 

 

 

 

 

C/G/H/K

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,751,452

 

 

 

 

 

 

Oil, Gas & Consumable Fuels

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ETX Energy Management Company, LLC

 

Limited Partnership/Limited Liability Company Interests

 

 

 

 

53,815

 

 

 

 

 

 

 

 

C

ETX Energy, LLC

 

Limited Partnership/Limited Liability Company Interests

 

 

 

 

51,119

 

 

 

 

 

 

 

 

C/M

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Thrifts & Mortgage Finance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Boston Construction Holdings, LLC

 

Limited Partnership/Limited Liability Company Interests

 

 

 

 

8,156,250

 

 

 

8,156,250

 

 

 

4,557,035

 

 

C/G/K

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Equity Securities - 15.4% of Net Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

142,381,857

 

 

 

48,451,688

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Investments - 152.1% of Net Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

606,775,454

 

 

$

479,025,476

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and Cash Equivalents - 7.4% of Net Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

23,332,831

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Cash and Investments - 159.5% of Net Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

502,358,307

 

 

 

 

Notes to Consolidated Schedules of Investments:

 

(A)

Represents amortized cost for fixed income securities and cost for preferred and common stock, limited partnership/limited liability company interests and equity warrants/options.

(B)

Fair value is determined by or under the direction of the Company’s Board of Directors. See Note 2 for further details.

(C)

Non-income producing equity securities at December 31, 2020.

(D)

Interest may be paid in cash or payment-in-kind (“PIK”), or a combination thereof which is generally at the option of the borrower. PIK earned is included in the cost basis of the security. In accordance with the Company’s policy, PIK may be recorded on an effective yield basis.

(E)

Approximately 95.3% of the fair value of total senior secured loans in the Company’s portfolio bear interest at a floating rate that may be determined by reference to the London Interbank Offered Rate (LIBOR), “L”, or other base rate (commonly the Federal Funds Rate or the Prime Rate), “P”, at the borrower’s option. In addition, 80.7% of the fair value of such senior secured loans have floors of 0.75% to 2.75%. The borrower under a senior secured loan generally has the option to select from interest reset periods of one, two, three or six months and may alter that selection at the end of any reset period. The stated interest rate represents the weighted average interest rate at December 31, 2020 of all contracts within the specified loan facility.

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

18


 

 

 

(F)

Transaction and other information for “non-controlled, affiliated” investments under the Investment Company Act of 1940, whereby the Company owns 5% or more (but not more than 25%) of the portfolio company’s outstanding voting securities, is presented in a separate table in Consolidated Schedules of Investments.

(G)

Transaction and other information for “controlled” investments under the Investment Company Act of 1940, whereby the Company owns more than 25% of the portfolio company’s outstanding voting securities, is presented in a separate table in Consolidated Schedules of Investments.

(H)

Non-U.S company or principal place of business outside the U.S.

(I)

Original purchase denominated in Canadian dollars.

(J)

Security is either exempt from registration under Rule 144A of the Securities Act of 1933, or sale of the security is subject to certain contractual restrictions. Securities exempt under 144A may be resold in transactions that are exempt from registration, normally to qualified institutional buyers. In aggregate, these securities represent 13.8% of the Company’s net assets at December 31, 2020. The acquisition dates for restricted securities of unaffiliated issuers were as follows as of December 31, 2020.

 

Investment

 

Acquisition Date

Marsico Holdings, LLC, Limited Partnership/Limited Liability Company Interests

 

11/28/2007

SVP-Singer Holdings LP, Limited Partnership/Limited Liability Company Interests

 

3/16/2018

FinancialForce.com, Warrants to Purchase Series C Preferred Stock

 

1/30/2019

Pico Quantitative Trading, LLC, Warrants to Purchase Membership Units

 

2/7/2020

 

(K)

Investments that the Company has determined are not “qualifying assets” under Section 55(a) of the 1940 Act. Under the 1940 Act, we may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of our total assets. The status of these assets under the 1940 Act may be subject to change. The Company monitors the status of these assets on an ongoing basis. As of December 31, 2020, approximately 17.9% of the total assets of the Company were not qualifying assets under Section 55(a) of the 1940 Act.

(L)

The Company is the sole stockholder of BKC ASW Blocker, Inc., a consolidated subsidiary, which is the beneficiary of 5% or more (but not more than 25%) of the voting securities of Kemmerer Operations, LLC and thus non-controlled, affiliated investments.

(M)

The Company is the sole stockholder of BKC ASW Blocker, Inc., a consolidated subsidiary, which is the beneficiary of less than 5% of the voting securities of ETX Energy, LLC, and thus a non-controlled, non-affiliated investment.

(N)

The Company is the sole stockholder of BCIC-MBS, LLC, a consolidated subsidiary, which is the beneficiary of less than 5% of the voting securities of MBS Parent, LLC and thus a non-controlled, non-affiliated investment.

(O)

Negative balances represent unfunded commitments that were acquired and/or valued at a discount.

(P)

This investment is deemed significant under Regulation S-X Rule 4-08(g). BCIC Senior Loan Partners, LLC was formed on June 23, 2016. See Note 5 for summarized financial information of BCIC Senior Loan Partners, LLC.

(Q)

Unless otherwise indicated, all investments are considered Level 3 in accordance with ASC Topic 820 (see Note 2).

(R)

Investments are considered other than Level 3 in accordance with ASC Topic 820 (see Note 2).

(S)

As of December 31, 2020, the Company generally uses Global Industry Classification Standard (“GICS”) codes to identify the industry groupings. This information is unaudited.

(T)

The investment is on non-accrual status as of December 31, 2020 and therefore non-income producing. At December 31, 2020, the aggregate fair value and amortized cost of the Company’s debt and preferred stock investments on non-accrual status represents 6.53% and 17.77%, respectively.

(U)

Position or portion thereof has an unfunded loan commitment as of December 31, 2020 (see Note 9). Note that there may be additional unfunded positions which do not have a funded component at period end, and therefore are not displayed herein.

(V)

This investment will have a first lien security interest after the senior tranches are repaid.

 

LIBOR resets monthly (M), quarterly (Q), semiannually (S), or annually (A).

 

 

 

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

19


 

 

 

 

BlackRock Capital Investment Corporation

Consolidated Schedules of Investments—(Continued)

December 31, 2020

 

Non-Controlled Affiliate Security(1)

 

Dividends or interest(2)

 

 

Fair Value at

December 31, 2019

 

 

Net

realized gain

(loss)

 

 

Net increase or decrease in unrealized appreciation or depreciation

 

 

Acquisitions(3)

 

 

Dispositions(4)

 

 

Fair Value at

December 31, 2020

 

 

Advanced Lighting Technologies, LLC.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior Secured Note, Second Lien

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

Senior Secured Loan, First Lien

 

 

473,544

 

 

 

4,885,476

 

 

 

 

 

 

(1,628,467

)

 

 

18,717

 

 

 

(52,062

)

 

 

3,223,664

 

 

Limited Liability Co. Interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Warrants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advantage Insurance Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Stock

 

 

 

 

 

5,752,610

 

 

 

(77,952

)

 

 

195,352

 

 

 

 

 

 

(150,000

)

 

 

5,720,010

 

 

AGY Equity, LLC:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class A Preferred Stock

 

 

 

 

 

 

 

 

 

 

 

417,602

 

 

 

1,139,598

 

 

 

 

 

 

1,557,200

 

 

Class B Preferred Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class C Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kemmerer Operations, LLC:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Delayed Draw Term Loan, First Lien

 

 

89,317

 

 

 

576,294

 

 

 

 

 

 

(214,865

)

 

 

92,405

 

 

 

(169,491

)

 

 

284,343

 

 

Senior Secured Loan, First Lien

 

 

370,313

 

 

 

2,292,783

 

 

 

 

 

 

(348,845

)

 

 

370,158

 

 

 

 

 

 

2,314,096

 

 

Limited Liability Co. Interest

 

 

 

 

 

508,730

 

 

 

 

 

 

(508,730

)

 

 

 

 

 

 

 

 

 

 

U.S. Well Services, Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock, Class A

 

 

 

 

 

8,457,631

 

 

 

(43,774,013

)

 

 

37,611,309

 

 

 

 

 

 

(2,294,927

)

 

 

 

Totals

 

$

933,174

 

 

$

22,473,524

 

 

$

(43,851,965

)

 

$

35,523,356

 

 

$

1,620,878

 

 

$

(2,666,480

)

 

$

13,099,313

 

 

 

(1)

The issuers of the securities listed on this schedule are considered non-controlled, affiliated investments under the Investment Company Act of 1940 due to the ownership by the Company of 5% to 25% of the issuers’ voting securities.

(2)

Also includes fee income as applicable.

(3)

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

(4)

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

Investment no longer held as of December 31, 2020.

The aggregate fair value of non-controlled, affiliated investments at December 31, 2020 represents 4.2% of the Company’s net assets.

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

20


 

 

 

BlackRock Capital Investment Corporation

Consolidated Schedules of Investments—(Continued)

December 31, 2020

 

Controlled Affiliate Security(1)

 

Dividends or interest(2)

 

 

Fair Value at

December 31, 2019

 

 

Net 

realized gain

(loss)

 

 

Net increase or decrease in unrealized appreciation or depreciation(5)

 

 

Acquisitions(3)

 

 

Dispositions(4)

 

 

Fair Value at

December 31, 2020

 

 

AGY Holding Corp.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior Secured Note, Second Lien

 

$

 

 

$

9,186,817

 

 

$

(24,503,088

)

 

$

15,316,271

 

 

$

 

 

$

 

 

$

 

Senior Secured Loan, First Lien

 

 

765,271

 

 

 

25,509,040

 

 

 

(24,116,266

)

 

 

 

 

 

773,773

 

 

 

(2,166,547

)

 

 

 

Senior Secured Loan, First Lien

 

 

106,269

 

 

 

 

 

 

288,157

 

 

 

 

 

 

2,639,252

 

 

 

(2,927,409

)

 

 

 

Delayed Draw Term Loan, First Lien

 

 

192,019

 

 

 

 

 

 

189,577

 

 

 

 

 

 

4,792,093

 

 

 

(4,981,670

)

 

 

 

KAGY Holding Company, Inc. (AGY Holding Corp.):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Stock

 

 

 

 

 

 

 

 

(11,053,124

)

 

 

11,053,124

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BCIC Senior Loan Partners, LLC:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Limited Liability Co. Interest

 

 

5,850,565

 

 

 

88,272,340

 

 

 

 

 

 

(17,697,061

)

 

 

143,053

 

 

 

(34,568,073

)

 

 

36,150,259

 

 

First Boston Construction Holdings, LLC:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subordinated Debt

 

 

4,297,856

 

 

 

40,237,500

 

 

 

 

 

 

 

 

 

 

 

 

(7,612,500

)

 

 

32,625,000

 

 

Limited Liability Co. Interest

 

 

 

 

 

5,999,814

 

 

 

 

 

 

460,346

 

 

 

 

 

 

(1,903,125

)

 

 

4,557,035

 

 

Gordon Brothers Finance Company:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured Debt

 

 

13,104,111

 

 

 

118,168,342

 

 

 

 

 

 

(20,438,785

)

 

 

31,925,097

 

 

 

(106,804,654

)

 

 

22,850,000

 

 

Subordinated Debt

 

 

111,639

 

 

 

 

 

 

 

 

 

 

 

 

5,000,000

 

 

 

(5,000,000

)

 

 

 

††

Preferred Stock

 

 

2,339,934

 

 

 

34,284,760

 

 

 

 

 

 

(36,624,694

)

 

 

2,339,934

 

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

10,611,550

 

 

 

 

 

 

(10,611,550

)

 

 

 

 

 

 

 

 

 

 

Red Apple Stores Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior Secured Loan, Second Lien

 

 

2,341,681

 

 

 

17,979,000

 

 

 

 

 

 

3,054,736

 

 

 

 

 

 

(6,247,803

)

 

 

14,785,933

 

 

Preferred Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Totals

 

$

29,109,345

 

 

$

350,249,163

 

 

$

(59,194,744

)

 

$

(55,487,613

)

 

$

47,613,202

 

 

$

(172,211,781

)

 

$

110,968,227

 

 

 

(1)

The issuers of the securities listed on this schedule are considered controlled affiliates under the Investment Company Act of 1940 due to the ownership by the Company of more than 25% of the issuers’ voting securities.

(2)

Also includes fee income as applicable.

(3)

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

(4)

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

(5)

Net unrealized gain (loss) before taxes includes the net change in unrealized appreciation (depreciation) on controlled investments and net change in unrealized appreciation (depreciation) on foreign currency translation associated with the controlled investments. For the year ended December 31, 2020, the net change in unrealized appreciation (depreciation) and foreign currency translation associated with the Red Apple Stores Inc.’s common stock was $(135,427) and $135,427, respectively.

Investment no longer held as of December 31, 2020.  

††

Investment moved from the controlled category into the non-controlled, non-affiliated category.

The aggregate fair value of controlled investments at December 31, 2020 represents 35.2% of the Company’s net assets.

 

 

 

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

21


 

 

 

 

BlackRock Capital Investment Corporation

Notes to Consolidated Financial Statements

(Unaudited)

1. Organization

BlackRock Capital Investment Corporation (together with its subsidiaries, the “Company”) was organized as a Delaware corporation on April 13, 2005 and was initially funded on July 25, 2005. The Company has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”). In addition, for tax purposes the Company has qualified and has elected to be treated as a regulated investment company (“RIC”) under the Internal Revenue Code of 1986 (the “Code”).

The Company’s investment objective is to generate both current income and capital appreciation through debt and equity investments. We invest primarily in middle-market companies in the form of senior debt securities and loans, and our investment portfolio may include junior secured and unsecured debt securities and loans, each of which may include an equity component.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company is an investment company following the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 946, Financial Services-Investment Company (“ASC 946”).

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries, which were established to hold certain investments of the Company. The Company owns 100% of each subsidiary and, as such, the subsidiaries are consolidated into the Company’s consolidated financial statements. The subsidiaries hold investments which are treated as pass through entities for tax purposes. By investing through these 100% owned subsidiaries, the Company is able to benefit from corporate tax treatment for these entities and thereby create a tax structure that is more advantageous with respect to the RIC status of the Company. Intercompany balances and transactions are eliminated in consolidation.

Certain prior period information has been reclassified to conform to the current period presentation. The reclassification has no effect on the Company’s consolidated financial position or the consolidated results of operations as previously reported.

Expenses are recorded on an accrual basis.

Unaudited Interim Consolidated Financial Statements

Certain financial information that is normally included in annual financial statements, including certain financial statement footnotes, prepared in accordance with GAAP, is not required for interim reporting purposes and has been condensed or omitted herein. These consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes related thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the Securities and Exchange Commission (“SEC”) on March 3, 2021.

The interim financial information at June 30, 2021 and for the three and six months ended June 30, 2021 and 2020 is unaudited. However, in the opinion of management, the interim information includes all normal recurring adjustments necessary for the fair presentation of the Company’s results for the periods presented. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well the reported amounts of revenues and expenses during the reporting periods presented. Although management believes these estimates and assumptions to be reasonable, actual results could differ from those estimates and such differences could be material.

 

 

22


 

 

 

Investment Valuation

Investments are recorded at fair value in accordance with GAAP, based upon the principles and methods of valuation set forth in policies adopted by the Company’s Board of Directors. Securities traded on a recognized securities exchange are valued using the close price on the exchange on valuation date. Investments for which market prices from an exchange are not readily available are valued using the last available bid price or quote provided by an independent pricing service or one or more broker-dealers or market makers, unless they are deemed not to represent fair value. Debt and equity securities for which market quotations are not readily available or for which market quotations are deemed not to represent fair value are valued at fair value as determined in good faith by or under the direction of the Company’s Board of Directors.

Because the Company expects that there will not be a readily available market for all of the investments in its portfolio, the Company expects to value a significant portion of its portfolio investments at fair value as determined in good faith by or under the direction of the Board of Directors using a consistently applied valuation process in accordance with a documented valuation policy that has been reviewed and approved by the Board of Directors. Due to the inherent uncertainty and subjectivity of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may differ significantly from the values that would have been used had a readily available market value existed for such investments and may differ materially from the values that the Company may ultimately realize, as these amounts depend on future circumstances and cannot reasonably be determined until the individual investments are actually liquidated. Such circumstances may include macroeconomic, geopolitical and other events and conditions such as the COVID-19 pandemic that may significantly impact the profitability or viability of businesses in which the Company is invested, and therefore may significantly impact the return on and realizability of the Company’s investments.

In addition, changes in the market environment and other events may have differing impacts on the market quotations used to value some of the Company’s investments than on the fair values of the Company’s investments for which market quotations are not readily available. Market quotations may be deemed not to represent fair value in certain circumstances where BlackRock Capital Investment Advisors, LLC (“BCIA” or the “Advisor”), believes that facts and circumstances applicable to an issuer, a seller, a purchaser or the market for a particular security cause current market quotations to not reflect the fair value of the security. Examples of these events could include cases where a security trades infrequently causing a quoted purchase or sale price to become stale, where there is a “forced” sale by a distressed seller, where market quotations vary substantially among market makers, or where there is a wide bid-ask spread or significant increase in the bid-ask spread.

With respect to the Company’s investments for which market quotations are not readily available or for which market quotations are deemed not to represent fair value, the Board of Directors has approved a multi-step valuation process applied each quarter, as described below:

 

(i)

The quarterly valuation process begins with each portfolio company or investment being initially evaluated and rated by the investment professionals of the Advisor responsible for the portfolio investment;

 

(ii)

The investment professionals provide recent portfolio company financial statements and other reporting materials to independent valuation firms engaged by the Board of Directors (with the exception of statements and materials related to investments priced directly by the Advisor as described in (iv) below), such firms conduct independent appraisals each quarter and their preliminary valuation conclusions are documented and discussed with senior management of the Advisor;

 

(iii)

The Audit Committee of the Board of Directors reviews the preliminary valuations prepared by the independent valuation firm and the Advisor, as applicable;

 

(iv)

The fair value of certain investments, comprising in the aggregate, less than 5% of the Company’s net asset value and no more than 15% of total positions held, respectively, may be determined by the Advisor in good faith without the engagement of an independent valuation firm in accordance with the Company’s valuation policy; provided that if only the threshold with respect to the number of all positions valued at zero or immaterial amounts is exceeded, the Advisor may request Board approval to not request a fair valuation from an independent valuation firm for all such positions; and

 

(v)

The Board of Directors discuss valuations and determines the fair value of each investment in the portfolio in good faith based on the input of the Advisor, the respective independent valuation firms (to the extent applicable) and the Audit Committee.

Those investments for which market quotations are not readily available or for which market quotations are deemed not to represent fair value are valued utilizing a market approach, an income approach, or both approaches, as appropriate. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that the Company may take into account in determining the fair value of its investments include, as relevant and among other factors: available current market data, including relevant and applicable market trading and transaction comparables, applicable market yields and multiples, security covenants, call protection provisions, information rights, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, (e.g. non-performance risk), its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, M&A comparables, the Company’s principal market (as the reporting entity), any bid for a Company asset (irrespective of the perceived validity of such bid), and enterprise values. For positions acquired during the current quarter, the Advisor generally believes that cost will approximate fair value. As such, an independent valuation, in certain cases, will not be obtained until the quarter-end after the quarter the investment is acquired in.

 

 

23


 

 

 

ASC 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”), issued by the FASB, defines fair value, establishes a framework for measuring fair value and requires disclosures about fair value measurements. ASC 820-10 defines fair value as the price that the Company would receive upon selling an investment or pay to transfer a liability in an orderly transaction to a market participant in the principal or most advantageous market for the investment. ASC 820-10 emphasizes that valuation techniques maximize the use of observable market inputs and minimize the use of unobservable inputs. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances.

Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2 – Valuations based on unadjusted quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The inputs into the determination of fair value may require significant management judgment or estimation.

Transfers between levels, if any, represent the value as of the beginning of the period of any investment where a change in the pricing level occurred from the beginning to the end of the period.

At June 30, 2021, the Company’s investments were categorized as follows:

 

Level

 

Basis for Determining Fair Value

 

Bank Debt(1)

 

 

Other

Corporate Debt(2)

 

 

Equity

Securities

 

 

Total

 

1

 

Quoted prices in active markets for identical assets

 

$

 

 

$

 

 

$

 

 

$

 

2

 

Other direct and indirect observable market inputs(3)

 

 

17,508,290

 

 

 

 

 

 

 

 

 

17,508,290

 

3

 

Valuation sources that employ significant unobservable inputs

 

 

444,966,060

 

 

 

27,875,754

 

 

 

28,229,276

 

 

 

501,071,090

 

 

 

 

 

$

462,474,350

 

 

$

27,875,754

 

 

$

28,229,276

 

 

$

518,579,380

 

NA

 

Investment measured at net asset value(4)

 

 

 

 

 

 

 

 

30,700,839

 

 

 

30,700,839

 

Total

 

 

 

$

462,474,350

 

 

$

27,875,754

 

 

$

58,930,115

 

 

$

549,280,219

 

 

 

(1)

Includes senior secured loans

 

(2)

Includes senior secured notes, unsecured debt and subordinated debt

 

(3)

For example, quoted prices in inactive markets or quotes for comparable investments

 

(4)

In accordance with ASC 820-10, BCIC Senior Loan Partners, LLC is measured at fair value using the net asset value practical expedient and has not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Assets and Liabilities. See Note 5 for further details on BCIC Senior Loan Partners, LLC.

Unobservable inputs used in the fair value measurement of Level 3 investments as of June 30, 2021 included the following:

 

Asset Type

 

Fair Value

 

 

Valuation Technique

 

Unobservable Input

 

Weighted Average Range(1) (Concluded Value)(2)

Bank Debt

 

$

393,499,109

 

 

Income approach

 

Discount rate

 

9.1% - 9.9% (9.5%)

 

 

 

48,238,625

 

 

Market quotations

 

Indicative quotes

 

1 (1)

 

 

 

3,228,326

 

 

Market comparable companies

 

EBITDA multiples

 

1.4x - 2.1x (1.7x)

Other Corporate Debt

 

 

27,218,700

 

 

Income approach

 

Discount rate

 

11.4% - 13.0% (12.2%)

 

 

 

657,054

 

 

Market comparable companies

 

Revenue multiples

 

0.2x - 0.2x (0.2x)

Equity

 

 

624,454

 

 

Option Pricing Model

 

EBITDA/Revenue multiples

 

6.3x - 6.5x (6.4x)

 

 

 

 

 

 

 

 

Implied volatility

 

54.8% - 64.4% (59.6%)

 

 

 

 

 

 

 

 

Term

 

2.7 years - 3.7 years (3.2 years)

 

 

 

25,917,906

 

 

Market comparable companies

 

Expected transaction proceeds

 

1.0x (1.0x)

 

 

 

1,116,732

 

 

Market comparable companies

 

EBITDA multiples

 

3.9x - 4.4x (4.2x)

 

 

 

570,184

 

 

Market comparable companies

 

Revenue multiples

 

0.6x - 0.8x (0.7x)

 

 

$

501,071,090

 

 

 

 

 

 

 

 

 

(1)

Representing the weighted average of each significant unobservable input range at the investment level by fair value

 

(2)

Representing the weighted average of each significant unobservable input for concluded value at the investment level by fair value

 

 

24


 

 

 

 

Certain fair value measurements may employ more than one valuation technique, with each valuation technique receiving a relative weight between 0% and 100%. Generally, a change in an unobservable input may result in a change to the value of an investment as follows:

 

Input

 

Impact to Value if

Input Increases

 

Impact to Value if

Input Decreases

Discount rate

 

Decrease

 

Increase

Revenue multiples

 

Increase

 

Decrease

EBITDA multiples

 

Increase

 

Decrease

Book value multiples

 

Increase

 

Decrease

Implied volatility

 

Increase

 

Decrease

Term

 

Increase

 

Decrease

Yield

 

Increase

 

Decrease

 

Changes in investments categorized as Level 3 during the three months ended June 30, 2021 were as follows:

 

 

 

Bank Debt

 

 

Other

Corporate Debt

 

 

Equity

Securities

 

 

Total

 

Beginning balance

 

$

381,815,800

 

 

$

29,236,227

 

 

$

4,442,357

 

 

$

415,494,384

 

Net realized and unrealized gains (losses)

 

 

3,402,345

 

 

 

(1,361,661

)

 

 

23,786,919

 

 

 

25,827,603

 

Acquisitions(1)

 

 

89,124,878

 

 

 

1,188

 

 

 

 

 

 

89,126,066

 

Dispositions

 

 

(17,995,123

)

 

 

 

 

 

 

 

 

(17,995,123

)

Transfers into Level 3(2)

 

 

2,868,160

 

 

 

 

 

 

 

 

 

2,868,160

 

Transfers out of Level 3(3)

 

 

(14,250,000

)

 

 

 

 

 

 

 

 

(14,250,000

)

Ending balance

 

$

444,966,060

 

 

$

27,875,754

 

 

$

28,229,276

 

 

$

501,071,090

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above)

 

$

3,728,589

 

 

$

(1,361,661

)

 

$

23,786,919

 

 

$

26,153,847

 

 

 

(1)

Includes payments received in kind and accretion of original issue and market discounts.

 

(2)

Comprised of one investment that was transferred from Level 2 to Level 3 due to decreased observable market activity.

 

(3)

Comprised of one investment that was transferred from Level 3 to Level 2 due to increased observable market activity.

Changes in investments categorized as Level 3 during the six months ended June 30, 2021 were as follows:

 

 

 

Bank Debt

 

 

Other

Corporate Debt

 

 

Equity

Securities

 

 

Total

 

Beginning balance

 

$

353,651,555

 

 

$

61,573,500

 

 

$

12,301,429

 

 

$

427,526,484

 

Net realized and unrealized gains (losses)

 

 

6,963,248

 

 

 

(402,330

)

 

 

29,030,409

 

 

 

35,591,327

 

Acquisitions(1)

 

 

141,565,848

 

 

 

938,464

 

 

 

3,575,000

 

 

 

146,079,312

 

Dispositions(1)

 

 

(49,188,324

)

 

 

(34,233,880

)

 

 

(16,677,562

)

 

 

(100,099,766

)

Transfers into Level 3(2)

 

 

5,623,733

 

 

 

 

 

 

 

 

 

5,623,733

 

Transfers out of Level 3(3)

 

 

(13,650,000

)

 

 

 

 

 

 

 

 

(13,650,000

)

Ending balance

 

$

444,966,060

 

 

$

27,875,754

 

 

$

28,229,276

 

 

$

501,071,090

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above)

 

$

7,956,370

 

 

$

(583,958

)

 

$

27,721,338

 

 

$

35,093,750

 

 

 

(1)

Includes payments received in kind, accretion of original issue and market discounts, and cost basis impact of non-cash restructures.

 

(2)

Comprised of one investment that was transferred from Level 2 to Level 3 due to decreased observable market activity.

 

(3)

Comprised of one investment that was transferred from Level 3 to Level 2 due to increased observable market activity.

 

 

25


 

 

 

 

At December 31, 2020, the Company’s investments were categorized as follows:

 

Level

 

Basis for Determining Fair Value

 

Bank Debt(1)

 

 

Other

Corporate Debt(2)

 

 

Equity

Securities

 

 

Total

 

1

 

Quoted prices in active markets for identical assets

 

$

 

 

$

 

 

$

 

 

$

 

2

 

Other direct and indirect observable market inputs(3)

 

 

15,348,733

 

 

 

 

 

 

 

 

 

15,348,733

 

3

 

Valuation sources that employ significant unobservable inputs

 

 

353,651,555

 

 

 

61,573,500

 

 

 

12,301,429

 

 

 

427,526,484

 

 

 

 

 

$

369,000,288

 

 

$

61,573,500

 

 

$

12,301,429

 

 

$

442,875,217

 

NA

 

Investment measured at net asset value(4)

 

 

 

 

 

 

 

 

36,150,259

 

 

 

36,150,259

 

Total

 

 

 

$

369,000,288

 

 

$

61,573,500

 

 

$

48,451,688

 

 

$

479,025,476

 

 

 

(1)

Includes senior secured loans

 

(2)

Includes senior secured notes, unsecured debt and subordinated debt

 

(3)

For example, quoted prices in inactive markets or quotes for comparable investments

 

(4)

In accordance with ASC 820-10, BCIC Senior Loan Partners, LLC is measured at fair value using the net asset value practical expedient and has not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Assets and Liabilities. See Note 5 for further details on BCIC Senior Loan Partners, LLC.

 

Unobservable inputs used in the fair value measurement of Level 3 investments as of December 31, 2020 included the following:

 

Asset Type

 

 

 

Fair Value

 

 

 

 

Valuation Technique

 

 

 

Unobservable Input

 

Weighted Average Range(1)

(Concluded Value)(2)

Bank Debt

 

 

 

$

299,811,858

 

 

 

 

Income approach

 

 

 

Discount rate

 

9.9% - 10.8% (10.4%)

 

 

 

 

 

33,231,661

 

 

 

 

Market quotations

 

 

 

Indicative quotes

 

1 (1)

 

 

 

 

 

3,223,664

 

 

 

 

Market comparable companies

 

 

 

Revenue multiples

 

0.3x - 0.3x (0.3x)

 

 

 

 

 

2,598,439

 

 

 

 

Market comparable companies

 

 

 

EBITDA multiples

 

1.8x - 2.8x (2.3x)

 

 

 

 

 

14,785,933

 

 

 

 

Market comparable companies

 

 

 

Expected transaction proceeds

 

1.0x (1.0x)

Other Corporate Debt

 

 

 

 

28,948,500

 

 

 

 

Income approach

 

 

 

Discount rate

 

11.3% - 12.9% (12.1%)

 

 

 

 

 

32,625,000

 

 

 

 

Market comparable companies

 

 

 

Book value multiples

 

0.9x - 1.0x (1.0x)

Equity

 

 

 

 

153,760

 

 

 

 

Option Pricing Model

 

 

 

EBITDA/Revenue multiples

 

3.9x - 4.4x (4.2x)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Implied volatility

 

51.0% - 60.0% (55.5%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Term

 

1.6 years - 2.5 years (2.1 years)

 

 

 

 

 

1,557,200

 

 

 

 

Market comparable companies

 

 

 

Revenue multiples

 

0.6x - 0.8x (0.7x)

 

 

 

 

 

313,424

 

 

 

 

Market comparable companies

 

 

 

EBITDA multiples

 

5.8x - 6.3x (6.0x)

 

 

 

 

 

10,277,045

 

 

 

 

Market comparable companies

 

 

 

Book value multiples

 

0.8x - 1.0x (1.0x)

 

 

 

 

$

427,526,484

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Representing the weighted average of each significant unobservable input range at the investment level by fair value; reclassified to conform to the current period presentation

 

(2)

Representing the weighted average of each significant unobservable input for concluded value at the investment level by fair value

 

 

26


 

 

 

 

Changes in investments categorized as Level 3 during the three months ended June 30, 2020 were as follows:

 

 

 

Bank Debt

 

 

 

 

Other

Corporate Debt

 

 

 

 

Equity

Securities

 

 

 

 

Total

 

Beginning balance

 

$

392,646,677

 

 

 

 

$

157,762,386

 

 

 

 

$

49,942,134

 

 

 

 

$

600,351,197

 

Net realized and unrealized gains (losses)

 

 

(12,942,345

)

 

 

 

 

182,430

 

 

 

 

 

(23,057,210

)

 

 

 

 

(35,817,125

)

Acquisitions(1)

 

 

3,214,535

 

 

 

 

 

18,536,982

 

 

 

 

 

 

 

 

 

 

21,751,517

 

Dispositions

 

 

(16,645,991

)

 

 

 

 

(2,898,003

)

 

 

 

 

(543,750

)

 

 

 

 

(20,087,744

)

Transfers into Level 3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transfers out of Level 3(2)

 

 

(2,494,408

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,494,408

)

Ending balance

 

$

363,778,468

 

 

 

 

$

173,583,795

 

 

 

 

$

26,341,174

 

 

 

 

$

563,703,437

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above)

 

$

(7,513,015

)

 

 

 

$

182,430

 

 

 

 

$

(23,057,216

)

 

 

 

$

(30,387,801

)

 

 

(1)

Includes payments received in kind and accretion of original issue and market discounts.

 

(2)

Comprised of one investment that was transferred out of Level 3 into Level 2 due to increased observable market activity.

Changes in investments categorized as Level 3 during the six months ended June 30, 2020 were as follows:

 

 

 

Bank Debt

 

 

 

 

Other

Corporate Debt

 

 

 

 

Equity

Securities

 

 

 

 

Total

 

Beginning balance

 

$

390,746,388

 

 

 

 

$

176,713,298

 

 

 

 

$

57,825,747

 

 

 

 

$

625,285,433

 

Net realized and unrealized gains (losses)

 

 

(39,052,513

)

 

 

 

 

(10,988,057

)

 

 

 

 

(30,140,002

)

 

 

 

 

(80,180,572

)

Acquisitions(1)

 

 

25,771,411

 

 

 

 

 

33,432,019

 

 

 

 

 

14,804

 

 

 

 

 

59,218,234

 

Dispositions

 

 

(18,730,689

)

 

 

 

 

(25,573,465

)

 

 

 

 

(1,359,375

)

 

 

 

 

(45,663,529

)

Transfers into Level 3(2)

 

 

5,043,871

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,043,871

 

Transfers out of Level 3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending balance

 

$

363,778,468

 

 

 

 

$

173,583,795

 

 

 

 

$

26,341,174

 

 

 

 

$

563,703,437

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above)

 

$

(27,329,588

)

 

 

 

$

(10,988,056

)

 

 

 

$

(30,140,002

)

 

 

 

$

(68,457,646

)

 

 

(1)

Includes payments received in kind and accretion of original issue and market discounts.

 

(2)

Comprised of one investment that was transferred into Level 3 from Level 2 due to decreased observable market activity.

Investment Transactions

Security transactions are accounted for on the trade date unless there are substantial conditions to the transaction. Realized gains or losses are measured by the difference between the net proceeds from the disposition and the amortized cost of the investment. Unrealized gains or losses primarily reflect the change in investment values, including the reversal of previously recorded unrealized gains or losses when gains or losses are realized. Realized gains or losses on the disposition of investments are calculated using the specific identification method.

Cash and Cash Equivalents

Cash consists of amounts held in accounts with the custodian bank. Cash equivalents include short-term liquid overnight investments with original maturities of three months or less and may not be insured by the FDIC or may exceed federally insured limits. Cash equivalents are classified as Level 1 in the GAAP valuation hierarchy.

 

 

27


 

 

 

Restricted Investments

The Company may invest without limitation in instruments that are subject to legal or contractual restrictions on resale. These instruments generally may be resold to institutional investors in transactions exempt from registration or to the public if the securities are registered. Disposal of these investments may involve time-consuming negotiations and additional expense, and prompt sale at an acceptable price may be difficult. See footnotes to the Consolidated Schedule of Investments. Restricted investments, including any restricted investments in affiliates, are valued in accordance with the investment valuation policies discussed above.

Foreign Currency Investments

The Company may invest in instruments traded in foreign countries and denominated in foreign currencies. Foreign currency amounts are translated into United States dollars on the following basis:

 

(i)

market value of investment securities, other assets and liabilities—at the spot exchange rate on the last business day of the period; and

 

(ii)

purchases and sales of investment securities, income and expenses—at the rates of exchange prevailing on the respective dates of such transactions, income or expenses.

Although net assets and fair values are presented based on the applicable foreign exchange rates described above, the Company may not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in fair values of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.

Investments denominated in foreign currencies and foreign currency transactions may involve certain considerations and risks not typically associated with those of domestic origin, including unanticipated movements in the value of the foreign currency relative to the U.S. dollar.

Derivatives

The Company may enter into forward foreign currency contracts from time to time to facilitate settlement of purchases and sales of investments denominated in foreign currencies or to help mitigate the impact that an adverse change in foreign exchange rates would have on the value of the Company’s investments denominated in foreign currencies. A forward foreign currency contract is a commitment to purchase or sell a foreign currency at a future date (usually the security transaction settlement date) at a negotiated forward rate. These contracts are marked-to-market by recognizing the difference between the contract exchange rate and the current market rate as unrealized appreciation or depreciation. Realized gains or losses are recognized when contracts are settled. The Company’s forward foreign currency contracts generally have terms of approximately three months. The volume of open contracts at the end of each reporting period is reflective of the typical volume of transactions during each calendar quarter. Risks may arise as a result of the potential inability of the counterparties to meet the terms of their contracts. The Company attempts to limit this risk by dealing with only creditworthy counterparties. There were no open forward foreign currency contracts at June 30, 2021 and December 31, 2020.

The Company holds warrants and options in certain portfolio companies in an effort to achieve additional investment return. In purchasing warrants and options, the Company bears the risk of an unfavorable change in the value of the underlying equity interest. The aggregate fair value of warrants and options as of June 30, 2021 and December 31, 2020 represents 0.18% and 0.05% of the Company’s net assets, respectively.

The Company may enter into other derivative instruments and incur other exposures with other counterparties in the future. The derivative instruments held as of June 30, 2021 and December 31, 2020 reflect the volume of derivative activity throughout the periods presented.

Debt Issuance Costs

Certain costs incurred in connection with the issuance and/or extension of debt of the Company and its subsidiaries were capitalized and are being amortized on a straight-line basis over the estimated life of the respective instruments. The impact of utilizing the straight-line amortization method versus the effective-interest method is not material to the operations of the Company.

Revenue Recognition

Interest and dividend income, including income paid in kind, is recorded on an accrual basis, when such amounts are considered collectible. Origination, structuring, closing, commitment and other upfront fees, including original issue discounts, earned with respect to capital commitments are generally amortized or accreted into interest income over the life of the respective debt investment, as are end-of-term or exit fees receivable upon repayment of a debt investment. Other fees, including certain amendment fees, prepayment fees and commitment fees on broken deals, are recognized as earned.

 

 

28


 

 

 

Certain debt investments are purchased at a discount to par as a result of the underlying credit risks and financial results of the issuer, as well as general market factors that influence the financial markets as a whole. Discounts on the acquisition of corporate bonds are generally amortized using the effective-interest or constant-yield method assuming there are no questions as to collectability. When principal payments on a loan are received in an amount in excess of the loan’s amortized cost, the excess principal payments are recorded as interest income.

For loans and securities with payment-in-kind (“PIK”) income, which represents contractual interest or dividends accrued and added to the principal balance and generally due at maturity, such income is accrued only to the extent that the Advisor believes that the PIK income is likely to be collected. To maintain the Company’s status as a RIC, this non-cash source of income must be paid out to stockholders in the form of distributions, even though the Company has not yet collected the cash.

Income Taxes

The Company has elected to be treated as a RIC under Subchapter M of the Code and operates in a manner so as to continue to qualify for the tax treatment applicable to RICs.

In order to qualify for favorable tax treatment as a RIC, the Company is required to distribute annually to its stockholders at least 90% of its investment company taxable income, as defined by the Code. To avoid federal excise taxes, the Company must distribute annually at least 98% of our ordinary income and 98.2% of net capital gains from the current year and any undistributed ordinary income and net capital gains from the preceding years. The Company, at its discretion, may carry forward taxable income in excess of calendar year distributions and pay regular federal income taxes or a 4% excise tax on this income. If the Company chooses to do so, all other things being equal, this would increase expenses and reduce the amount available to be distributed to stockholders. The Company will accrue excise tax on estimated undistributed taxable income as required.

Distributions from net investment income and distributions from net realized capital gains are determined in accordance with U.S. federal income tax regulations, which may differ from those amounts determined in accordance with GAAP. These book/tax differences are either temporary or permanent in nature. To the extent these differences are permanent, they are charged or credited to paid-in-capital or accumulated net realized gain (loss), as appropriate, in the period that the differences arise. Temporary and permanent differences are primarily attributable to differences in the tax treatment of certain loans and the tax characterization of income and non-deductible expenses. These differences are generally determined in conjunction with the preparation of the Company’s annual RIC tax return.

Book and tax basis differences relating to stockholder distributions and other permanent book and tax differences are reclassified among the Company’s capital accounts. In addition, the character of income and gains to be distributed is determined in accordance with income tax regulations that may differ from GAAP.

The final tax characterization of distributions is determined after the fiscal year and is reported on Form 1099 and in the Company’s annual report to shareholders. Distributions can be characterized as ordinary income, capital gains and/or return of capital. To the extent that distributions exceed the Company’s current and accumulated earnings and profits, the excess may be treated as a non-taxable return of capital.

ASC 740-10, Income Taxes (“ASC 740-10”) clarifies the accounting for income taxes by prescribing the minimum recognition threshold an uncertain tax position is required to meet before tax benefits associated with such uncertain tax position are recognized in the consolidated financial statements. Based on its analysis of its tax position, the Company has concluded that it does not have any uncertain tax positions that met the recognition or measurement criteria of ASC 740-10.

The Company files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Company’s U.S. federal income tax returns remains open for each of the three years ended December 31, 2020. The statute of limitations on the Company’s state and local tax returns may remain open for an additional year depending upon the jurisdiction.

As of December 31, 2020, the Company had a net capital loss carryforward of $372,373,557, which can be used to offset future capital gains and is not subject to expiration.

The Company holds certain portfolio investments through taxable subsidiaries. Income earned and gains realized on the investment held by the taxable subsidiary are taxable to such subsidiary. A tax provision for income, if any, is shown as income tax in the Consolidated Statements of Operations for the Company. A tax provision for realized and unrealized gains is included as a reduction of realized and/or unrealized gain (loss) in the Consolidated Statements of Operations for the Company.

 

 

29


 

 

 

Non-Accrual Loans

Loans or debt securities are placed on non-accrual status, as a general matter, when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected. Accrued interest generally is reversed when a loan or debt security is placed on non-accrual status. Interest payments received on non-accrual loans or debt securities may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans and debt securities are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current. The Company may make exceptions to this treatment if the loan has sufficient collateral value and is in the process of collection.

Recent Accounting Pronouncements

In May 2020, the SEC adopted rule amendments that will impact the requirements of investment companies, including BDCs, to disclose the financial statements of certain of their portfolio companies or certain acquired funds (the “Final Rules”). The Final Rules adopted a new definition of “significant subsidiary” set forth in Rule 1-02(w)(2) of Regulation S-X under the Securities Act. Rules 3-09 and 4-08(g) of Regulation S-X require investment companies to include separate financial statements or summary financial information, respectively, in such investment company’s periodic reports for any portfolio company that meets the definition of “significant subsidiary.” The Final Rules adopt a new definition of “significant subsidiary” applicable only to investment companies that (i) modifies the investment test and the income test, and (ii) eliminates the asset test currently in the definition of “significant subsidiary” in Rule 1-02(w) of Regulation S-X. The new Rule 1-02(w)(2) of Regulation S-X is intended to more accurately capture those portfolio companies that are more likely to materially impact the financial condition of an investment company. The Final Rules became effective on January 1, 2021, but voluntary compliance was permitted in advance of the effective date. The Company has early adopted the amendments as of December 31, 2020. The adoption resulted in fewer portfolio companies meeting the significant subsidiary definition under the Final Rules, thus resulting in reduced disclosures.

In March 2020 and January 2021, FASB issued ASU No. 2020-04 and ASU No. 2021-01, respectively, “Reference Rate Reform (Topic 848),” which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. ASU 2020-04 is effective and can be adopted by all entities through December 31, 2022. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2022, except for hedging transactions as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The Company is currently evaluating the impact of adopting ASU 2020-04 on its consolidated financial statements.

3. Management Fees, Incentive Fees and Other Expenses

Investment Management Agreement

At the annual meeting of the Company’s stockholders, held on May 1, 2020, the Company’s stockholders approved, among other matters, a proposal to allow the Company to increase leverage by approving the application to the Company of a minimum asset coverage ratio of 150%, pursuant to Section 61(a)(2) of the Investment Company Act of 1940, to become effective on May 2, 2020. Effective at the same time, the Company and BCIA, the Advisor, amended and restated its previous investment management agreement to reduce the base management fee (“Management Fee”) and incentive management fees (“Incentive Fees”) as follows: (i) the Management Fee was reduced from 1.75% of total assets to 1.50% on total assets up to 200% of net asset value and 1.0% on total assets that exceed 200% of net asset value; (ii) the Incentive Fee based on net investment income was reduced from 20% over a 7% hurdle to 17.5% over a 7% hurdle; and (iii) the Incentive Fee based on net capital gains was reduced from 20% to 17.5% (the “Current Management Agreement”).

The investment management agreement will be in effect from year-to-year if approved annually by the Board of Directors or by the affirmative vote of the holders of a majority of outstanding voting securities, including, in either case, approval by a majority of the directors who are not interested persons. The Company’s Board of Directors approved the continuation of the Current Management Agreement on November 3, 2020.

For Management Fee and Incentive Fee terms prior to March 6, 2017, refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the SEC on March 4, 2020.

Management Fee

Under the Current Management Agreement, the investment advisor, subject to the overall supervision of the Board, manages the day-to-day operations and provides the Company with investment advisory services. For providing these services, effective May 2, 2020, the Advisor receives a Management Fee at an annual rate of 1.50% of total assets (excluding cash and cash equivalents), including any assets acquired with the proceeds of leverage, payable quarterly in arrears based on the asset valuation as of the end of the prior quarter. Additionally, the Management Fee is calculated at 1.00% on assets that exceed 200% of net asset value of the Company. Prior to May 2, 2020, the

 

 

30


 

 

 

Management Fee was calculated at an annual rate of 1.75% of total assets (excluding cash and cash equivalents). The Management Fee for any partial quarter is prorated.

For the three and six months ended June 30, 2021, the Company incurred $1,775,684 and $3,575,450 respectively, in management fees under the investment management agreement. For the three and six months ended June 30, 2020, the Company incurred $2,708,862 and $6,004,549, respectively, in management fees under the Current Management Agreement.

Incentive Fees

 

(i)

Quarterly Incentive Fee Based on Income

The current investment management agreement provides that the investment advisor or its affiliates may be entitled to an Incentive Fee under certain circumstances. The Incentive Fee has two parts. The first portion is based on income other than capital gains and is calculated separately for each calendar quarter and will be paid on a quarterly basis. Effective May 2, 2020, the Incentive Fee based on income is calculated as follows:

 

No Incentive Fee based on income other than capital gains for any calendar quarter in which the Pre-Incentive Fee Net Investment Income does not exceed 1.75% (7.00% annualized) of net assets attributable to common stock at the beginning of such quarter.

 

100% of the Pre-Incentive Fee Net Investment Income in any calendar quarter with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, for such calendar quarter, that exceeds 1.75% (7.00% annualized) of net assets attributable to common stock at the beginning of such quarter but is less than approximately 2.12% (8.48% annualized).

 

17.5% of the Pre-Incentive Fee Net Investment Income, if any, for any calendar quarter that exceeds approximately 2.12% (8.48% annualized) of net assets attributable to common stock at the beginning of such quarter.

Prior to May 2, 2020 (and since March 6, 2017), the Incentive Fee based on income was calculated as follows:

 

No Incentive Fee based on income other than capital gains for any calendar quarter in which the Pre-Incentive Fee Net Investment Income does not exceed 1.75% (7.00% annualized) of net assets attributable to common stock at the beginning of such quarter.

 

100% of the Pre-Incentive Fee Net Investment Income in any calendar quarter with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, for such calendar quarter, that exceeds 1.75% (7.00% annualized) of net assets attributable to common stock at the beginning of such quarter but is less than approximately 2.19% (8.75% annualized).

 

20% of the Pre-Incentive Fee Net Investment Income, if any, for any calendar quarter that exceeds approximately 2.19% (8.75% annualized) of net assets attributable to common stock at the beginning of such quarter.

The calculations described above will be appropriately prorated for any period of less than a quarter and adjusted for the net proceeds from any common stock issuances and the cost of any common stock repurchases during such quarter.

The payment of any such Incentive Fee based on income otherwise earned by our investment advisor will be deferred if, for the most recent four full calendar quarter period ending on or prior to the date such payment is to be made, the Annualized Rate of Return is less than 7.0% of net assets attributable to common stock at the beginning of such four quarter period as adjusted for the net proceeds from any common stock issuances and the cost of any common stock repurchases during such four full calendar quarter period, with any deferred Incentive Fees to be carried over for payment in subsequent quarterly calculation periods to the extent such payment can then be made in accordance with the investment management agreement.

For the three and six months ended June 30, 2021, the Company incurred no Incentive Fees on income for both periods. For the three and six months ended June 30, 2020, the Company incurred $1,608,740 and $3,533,138, respectively, in Incentive Fees based on income. For the three and six months ended June 30, 2020, the Advisor has voluntarily waived incentive fees of $1,608,740 and $3,533,138, respectively, resulting in no net incentive fees for both periods.

As of June 30, 2021 and December 31, 2020, there was $1,849,597 and $1,849,597 of Incentive Fees payable based on income, respectively, for Incentive Fees earned and accrued in 2019, for which the payment was deferred and carried over in accordance with the payment deferral clause described above. Such Incentive Fees payable balance was paid subsequent to June 30, 2021 as a result of the payment hurdle of the Annualized Rate of Return being met for the trailing four quarter period ended June 30, 2021.

 

(ii)

Annual Incentive Fee Based on Capital Gains

The second portion of the Incentive Fee is based on capital gains and is calculated separately for each Annual Period. Effective May 2, 2020, our investment advisor will be entitled to receive an Incentive Fee based on capital gains for each Annual Period in an amount equal to 17.5% of the amount by which (1) net realized capital gains occurring during the period, if any, exceeds (2) gross unrealized capital depreciation, if any, occurring during the period. In calculating the portion of the Incentive Fee based on capital gains payable for any period, investments are accounted for on a security-by-security basis. In addition, the portion of the Incentive Fee based on capital gains is determined

 

 

31


 

 

 

using the “period-to-period” method pursuant to which the portion of the Incentive Fee based on capital gains for any period will be based on realized capital gains for the period reduced by realized capital losses for the period and unrealized capital depreciation for the period. Prior to May 2, 2020 (and since March 6, 2017), the Incentive Fee on capital gains was calculated at an annual rate of 20%.

The capital gains Incentive Fee as calculated under the Current Management Agreement at June 30, 2021 and December 31, 2020, respectively, resulted in no capital gains incentive fee accrual. The Company did not have any cumulative accrued balance at June 30, 2021 and December 31, 2020.

 

(iii)

Calculation of Incentive Fee Based on Capital Gains

For purposes of calculating the Incentive Fee based on capital gains, (i) “Annual Period” means the period beginning on July 1 of each calendar year, including the calendar year prior to the year in which the investment management agreement became effective, and ending on June 30 of the next calendar year; (ii) “Annualized Rate of Return” is computed by reference to the sum of (i) the aggregate distributions to common stockholders for the period in question and (ii) the change in net assets attributable to common stock (before taking into account any Incentive Fees otherwise payable during such period); (iii) “net assets attributable to common stock” means total assets less indebtedness and preferred stock; and (iv) “Pre-Incentive Fee Net Investment Income” means net investment income (as determined in accordance with United States generally accepted accounting principles) accrued by the Company during the calendar quarter excluding any accruals for or payments in respect of the Incentive Fee.

The Company is required under GAAP to accrue a hypothetical capital gains Incentive Fee based upon net realized capital gains and unrealized capital appreciation and depreciation on investments held at the end of each period. The accrual of this hypothetical capital gains Incentive Fee assumes all unrealized capital appreciation and depreciation is realized in order to reflect a hypothetical capital gains Incentive Fee that would be payable at each measurement date. If such amount is positive at the end of the period, then we recorded a capital gains Incentive Fee equal to 17.5% of such amount, for period ended after May 2, 2020 (or 20%, for period ended prior to May 2, 2020), less the amount of capital gains related Incentive Fees already accrued in prior periods.

If the resulting amount is negative, the accrual for GAAP in a given period may have resulted in the reduction of an expense. There can be no assurance that such unrealized capital appreciation will be realized in the future. However, it should be noted that a fee so calculated and accrued would not be payable under the Advisers Act, the Current Management Agreement or the BlackRock Advisors Management Agreement. Amounts actually paid were consistent with the Advisers Act, which specifically excludes consideration of unrealized capital appreciation. In accordance with GAAP, the hypothetical liquidation for the three and six months ended June 30, 2021 and 2020 resulted in no capital gains Incentive Fee.

 

(iv)

Calculation of Capital Gains

Capital gains and losses are calculated using the proceeds received and either (i) fair market value at the beginning of the Annual Period or (ii) cost for investments acquired during the Annual Period. In calculating whether the portion of the Incentive Fee based on capital gains is payable with respect to any period, the Company accounts for assets on a security-by-security basis. In addition, the Company uses the “period-to-period” method pursuant to which the portion of the Incentive Fee based on capital gains for any period is based on realized capital gains for the period reduced by realized capital losses and gross unrealized capital depreciation for the period. Based on current interpretations of Section 205(b)(3) of the Investment Advisers Act of 1940 by the SEC and its staff, the calculation of unrealized depreciation for each portfolio security over a period is based on the fair value of the security at the end of the period compared to the fair value at the beginning of the period. Incentive Fees earned in any of the periods described above are not subject to modification or repayment based upon performance in a subsequent period.

Other Expenses

The Company bears all expenses incurred in connection with its business, including fees and expenses out outside contracted services, such as custodian, administrative, legal, audit and tax preparation fees, costs of valuing investments, insurance costs, brokers’ and finders’ fees relating to investments, and any other transaction costs associated with the purchase and sale of investments.

4. Debt

Debt is comprised of a senior secured revolving credit facility dated as of February 19, 2016 (as amended, amended and restated, supplemented or otherwise modified from time to time, including as amended and restated by the sixth amendment thereto, dated as of April 23, 2021, the “Credit Facility”) and unsecured convertible senior notes due June 2022 issued by the Company (the “2022 Convertible Notes”). Effective on May 2, 2020, after obtaining stockholder approval at the annual meeting of the Company’s stockholders held on May 1, 2020, the Company’s asset coverage requirement was reduced from 200% to 150%, as set forth in Section 61(a)(2) of the 1940 Act, as amended by the Small Business Credit Availability Act (the “SBCAA”). As of June 30, 2021 and December 31, 2020, the Company’s asset coverage was 276% and 271%, respectively.

 

 

32


 

 

 

Total debt outstanding and available at June 30, 2021 was as follows:

 

 

 

Maturity

 

Rate

 

Carrying Value (1)

 

 

Available

 

 

Total

Capacity

 

 

Credit Facility

 

2025

 

L+2.00%

(2)

$

52,000,000

 

 

$

213,000,000

 

(3)

$

265,000,000

 

(4)

2022 Convertible Notes (1)

 

2022

 

5.00%

 

 

141,926,217

 

 

 

 

 

 

141,926,217

 

 

Debt, net of unamortized issuance costs

 

 

 

 

 

$

193,926,217

 

 

$

213,000,000

 

 

$

406,926,217

 

 

 

 

(1)

The carrying value of 2022 Convertible notes was comprised of the following:

 

 

 

June 30, 2021

 

Principal amount of debt

 

$143,750,000

 

Original issue discount, net of accretion

 

(927,127)

 

Unamortized issuance costs

 

(896,656)

 

Carrying value

 

$141,926,217

 

 

 

(2)

The applicable margin for LIBOR-based borrowings could be either 2.00% or 2.25% depending on a ratio of the borrowing base to certain indebtedness. If the Company elects to borrow based on the alternate base rate, the applicable margin could be either 1.00% or 1.25% depending on a ratio of the borrowing base to certain indebtedness.

 

(3)

Subject to borrowing base and leverage restrictions.

 

(4)

Provides for a feature that allows the Company, under certain circumstances, to increase the size of the Credit Facility up to $325 million effective April 23, 2021.

Total debt outstanding and available at December 31, 2020 was as follows:

 

 

Maturity

 

Rate

 

Carrying Value (1)

 

 

Available

 

 

Total

Capacity

 

 

Credit Facility

 

2023

 

L+2.00%

(2)

$

38,800,000

 

 

$

261,200,000

 

(3)

$

300,000,000

 

(4)

2022 Convertible Notes (1)

 

2022

 

5.00%

 

 

140,998,037

 

 

 

 

 

 

140,998,037

 

 

Debt, net of unamortized issuance costs

 

 

 

 

 

$

179,798,037

 

 

$

261,200,000

 

 

$

440,998,037

 

 

 

 

(1)

The carrying value of 2022 Convertible notes was comprised of the following:

 

 

December 31, 2020

 

Principal amount of debt

 

$143,750,000

 

Original issue discount, net of accretion

 

(1,391,607)

 

Unamortized issuance costs

 

(1,360,356)

 

Carrying value

 

$140,998,037

 

 

 

(2)

As of December 31, 2020, the applicable margin for LIBOR-based borrowings was either 2.00% or 2.25% depending on a ratio of the borrowing base to certain indebtedness. If the Company elects to borrow based on the alternate base rate, the applicable margin could be either 1.00% or 1.25% depending on a ratio of the borrowing base to certain indebtedness.

 

(3)

Subject to borrowing base and leverage restrictions.

 

(4)

As of December 31, 2020, provided for a feature that allowed the Company, under certain circumstances, to increase the size of the Credit Facility up to $375 million.

The Company’s average outstanding debt balance during the three months ended June 30, 2021 and 2020 was $173,454,058 and $346,765,223, respectively. The maximum amounts borrowed during the three months ended June 30, 2021 and 2020 were $193,926,217 and $356,300,739, respectively. The Company’s average outstanding debt balance during the six months ended June 30, 2021 and 2020 was $161,052,536 and $332,595,186, respectively. The maximum amounts borrowed during the six months ended June 30, 2021 and 2020 were $193,926,217 and $356,300,939, respectively.

The weighted average annual interest cost, including the amortization of debt issuance cost, for the three and six months ended June 30, 2021 was 6.26% and 6.45% respectively, exclusive of commitment fees. The weighted average annual interest cost, including the amortization of debt issuance cost, for the three and six months ended June 30, 2020 was 4.90% and 5.00%, respectively, exclusive of commitment fees. With respect to any unused portion of the commitments under the Credit Facility, the Company incurs an annual commitment fee of 0.40% (0.375% prior to May 22, 2020).

 

 

33


 

 

 

Total expenses related to debt for the three and six months ended June 30, 2021 and 2020 included the following:

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Stated interest expense

 

$

1,979,648

 

 

$

3,186,922

 

 

$

3,819,434

 

 

$

6,609,206

 

Amortization of original issue discount

 

 

232,790

 

 

 

220,065

 

 

 

464,480

 

 

 

439,089

 

Amortization of deferred debt issuance costs

 

 

493,678

 

 

 

821,295

 

 

 

863,830

 

 

 

1,220,921

 

Total interest expense

 

 

2,706,116

 

 

 

4,228,282

 

 

 

5,147,744

 

 

 

8,269,216

 

Commitment and credit facility fees

 

 

263,061

 

 

 

131,159

 

 

 

574,529

 

 

 

302,499

 

Total

 

$

2,969,177

 

 

$

4,359,441

 

 

$

5,722,273

 

 

$

8,571,715

 

 

Outstanding debt is carried at amortized cost in the Consolidated Statements of Assets and Liabilities. The fair value of the Company’s Credit Facility and 2022 Convertible Notes is derived by taking the average of the high and low quotes as obtained from a broker. The fair value of the Credit Facility and 2022 Convertible Notes would be classified as Level 2 with respect to the fair value hierarchy.

The carrying and fair values of the Company’s outstanding debt as of June 30, 2021 and December 31, 2020 were as follows:

 

 

 

June 30, 2021

 

 

December 31, 2020

 

 

 

Carrying Value

 

 

Fair Value

 

 

Carrying Value

 

 

Fair Value

 

Credit Facility

 

$

52,000,000

 

 

$

49,400,000

 

 

$

38,800,000

 

 

$

35,696,000

 

2022 Convertible Notes

 

 

141,926,217

 

 

 

145,367,188

 

 

 

140,998,037

 

 

 

143,210,938

 

Total

 

$

193,926,217

 

 

$

194,767,188

 

 

$

179,798,037

 

 

$

178,906,938

 

At June 30, 2021, the Company was in compliance with all covenants required under the Credit Facility and 2022 Convertible Notes.

Senior Secured Revolving Credit Facility

On February 19, 2016, the Company entered into the Credit Facility, which has an initial aggregate principal amount of up to $440,000,000, a stated commitment termination date of February 19, 2020, and a stated maturity date of February 19, 2021. The interest rate applicable to Eurocurrency borrowings thereunder is generally LIBOR plus an applicable margin of either 1.75% or 2.00% based on a pricing grid using the borrowing base as a multiple of the combined debt amount. The interest rate applicable to alternate base rate borrowings thereunder is generally the prime rate in effect plus an applicable margin of either 0.75% or 1.00% based on a pricing grid using the borrowing base as a multiple of the combined debt amount. The Credit Facility’s commitment may increase in size, under certain circumstances, up to a total of $750,000,000. From the commitment termination date to the stated maturity date, the Company is required to repay outstanding principal amounts under the Credit Facility on a monthly basis in an amount equal to 1/12th of the outstanding amount at the commitment termination date. On June 5, 2017, the Company entered into a Second Amendment to the Credit Facility which extended the commitment termination date on the Credit Facility to June 5, 2021 and the maturity date to June 5, 2022. On March 15, 2018, the Company entered into a Third Amendment to the Credit Facility which (i) permanently reduced the aggregate amount of multicurrency commitments under the Credit Facility from $440,000,000 to $400,000,000 and (ii) reduced the amount of shareholders’ equity required under the Credit Facility from $500,000,000 plus 25% of net proceeds from the sale of equity interests to $450,000,000 plus 25% of net proceeds from the sale of equity interests. On August 30, 2019, the Company entered into a Fourth Amendment to the Credit Facility which (i) permanently reduced the aggregate amount of multicurrency commitments under the Credit Facility from $400,000,000 to $340,000,000 and (ii) reduced the amount of shareholders’ equity required under the Credit Facility from $450,000,000 plus 25% of net proceeds from the sale of equity interests to $375,000,000 plus 25% of net proceeds from the sale of equity interests after August 30, 2019. On March 31, 2020, the Company had entered into a Waiver and Agreement to the Credit Facility to waive certain requirements under the Credit Facility from March 31, 2020 through May 10, 2020, which was extended to August 10, 2020 with a Second Waiver and Agreement that the Company entered into on May 1, 2020. As a result of the Fifth Amendment of the Credit Facility, the waivers are no longer required or applicable. On May 22, 2020, the Company entered into a Fifth Amendment to the Credit Facility which (i) extended the maturity date on loans made under the Credit Facility from June 5, 2022 to June 5, 2023, (ii) changed the interest rate applicable to borrowings to, at the Company’s option, either (x) LIBOR plus an applicable margin equal to either 2.00% or 2.25% or (y) an alternate base rate, plus an applicable margin equal to either 1.00% or 1.25%, in each case, depending on a ratio of the borrowing base to certain indebtedness, (iii) reduced the aggregate commitment under the Credit Facility from $340,000,000 to $300,000,000, (iv) made certain changes to the calculation of the borrowing base, and (v) reduced the amount that the Company’s commitment may increase in size, under certain circumstances, from $750,000,000 to $375,000,000. The Fifth Amendment also modified the financial covenants under the Credit Facility to (i) reduce the amount of shareholders’ equity required under the Credit Facility from $375,000,000 to $275,000,000 plus 25% of the net proceeds of the sale of Equity interests by the Company and its subsidiaries, (ii) reduce the minimum asset coverage ratio from 200% to 150% and (iii) incorporate a new senior coverage ratio to be maintained by the Company.

 

 

34


 

 

 

On April 23, 2021, the Company entered into a Sixth Amendment to the Credit Facility which, among other items, (i) extended the maturity date on loans made under the Credit Facility from June 5, 2023 to April 23, 2025, (ii) reduced the aggregate principal amount of the commitments under the Credit Facility from $300,000,000 to $265,000,000, (iii) reduced the amount by which the Company may seek an increase in the commitments under the Credit Facility (subject to satisfaction of certain conditions, including obtaining commitments) from $375,000,000 to $325,000,000, and (iv) revised to require a minimum shareholders’ equity under the Credit Facility to the greater of (i) 33% of the total assets of the Company and its subsidiaries and (ii) $240,000,000 plus 25% of net proceeds from the sale of equity interests by the Company its subsidiaries. Additionally, the Sixth Amendment (i) eliminated the springing maturity date that would have occurred if the 2022 Convertible Notes were not refinanced by March 16, 2022 and (ii) removed certain restrictions on repurchase or prepayment of the 2022 Convertible Notes.

Under the Credit Facility, the Company is required to comply with various customary affirmative and restrictive covenants, including reporting requirements and financial covenants, including, without limitation, covenants related to: (a) limitations on the incurrence of additional indebtedness and liens, (b) limitations on certain investments and fundamental changes, (c) limitations on distributions and certain other restricted payments, (d) certain restrictions on subsidiaries, (e) maintaining a certain minimum shareholders’ equity, (f) maintaining an asset coverage ratio of not less than 1.5:1.0, (g) maintaining a senior coverage ratio of not less than 2.0:1:0, (h) limitations on certain transactions with affiliates, (i) limitations on pledging certain unencumbered assets, and (j) limitations on the creation or existence of agreements that prohibit liens on certain properties of the Company and certain of its subsidiaries. These covenants are subject to important limitations and exceptions that are described in the Credit Facility and other loan documents. Further, amounts available to borrow under the Credit Facility (and the incurrence of certain other permitted debt) are also subject to compliance with a borrowing base that applies different advance rates to different types of assets in the Company’s portfolio that are pledged as collateral. The Credit Facility is secured by a lien on substantially all of the assets of the Company and its wholly owned domestic subsidiaries, subject to certain customary exceptions.

Unsecured Convertible Senior Notes Due 2022

On June 13, 2017, the Company issued $143,750,000 in aggregate principal amount ($125,000,000 of the initial offering and $18,750,000 of the underwriters’ exercise of the overallotment option) of 5.00% Convertible Notes due 2022 under an indenture, dated as of June 13, 2017. Net proceeds to the Company from the offering, including the exercise of the overallotment option, were approximately $139,800,000. The 2022 Convertible Notes will mature on June 15, 2022, unless previously converted, repurchased or redeemed in accordance with their terms. The interest rate on the notes is 5.00% per year, payable semiannually in arrears on June 15 and December 15 of each year, commencing on December 15, 2017. Holders may convert their notes at their option prior to the close of business on the business day immediately preceding December 15, 2021, in integral multiples of $1,000 principal amount, only under certain circumstances. Upon conversion of a note, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election at an initial conversion rate of 118.2173 shares of common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $8.46 per share of the Company’s common stock. On or after December 23, 2021, the Company may redeem the 2022 Convertible Notes for cash, in whole or from time to time in part, at its option in accordance with their terms.

The 2022 Convertible Notes are accounted for in accordance with ASC 470-20, Debt – Debt with Conversion and Other Options. The Company has determined that the embedded conversion options in the 2022 Convertible Notes are not required to be separately accounted for as a derivative under U.S. GAAP. In accounting for the 2022 Convertible Notes, at the time of issuance the Company estimated separate debt and equity components, and an original issue discount equal to the equity component was recorded in additional paid-in-capital in the accompanying Consolidated Statements of Assets and Liabilities.

The 2022 Convertible Notes contain certain covenants, including covenants requiring the Company to reserve shares of common stock for the purpose of satisfying all obligations to issue the underlying securities upon conversion of the securities and to furnish to holders of the securities upon request, any information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

5. Investments

Purchases of investments, including PIK, for the three and six months ended June 30, 2021 totaled $88,868,915 and $143,739,364, respectively. Purchases of investments, including PIK, for the three and six months ended June 30, 2020 totaled $21,546,265 and $58,829,199, respectively. Proceeds from sales, repayments and other exits of investments for the three and six months ended June 30, 2021 totaled $25,398,787 and $113,366,562, respectively. Proceeds from sales, repayments and other exits of investments for the three and six months ended June 30, 2020 totaled $22,574,615 and $59,830,118, respectively.

 

 

35


 

 

 

At June 30, 2021, investments consisted of the following:

 

 

 

Cost

 

 

 

 

Fair Value

 

Senior secured notes

 

$

1,911,259

 

 

 

 

$

1,706,754

 

Unsecured debt

 

 

41,861,533

 

 

 

 

 

21,169,000

 

Subordinated debt

 

 

5,000,000

 

 

 

 

 

5,000,000

 

Senior secured loans:

 

 

 

 

 

 

 

 

 

 

First lien

 

 

348,192,528

 

 

 

 

 

349,739,408

 

Second/other priority lien

 

 

112,064,522

 

 

 

 

 

112,734,942

 

Total senior secured loans

 

 

460,257,050

 

 

 

 

 

462,474,350

 

Preferred stock

 

 

37,764,281

 

 

 

 

 

570,184

 

Common stock

 

 

10,611,549

 

 

 

 

 

 

Limited partnership/limited liability company interests

 

 

60,646,227

 

 

 

 

 

57,735,477

 

Equity warrants/options

 

 

115,348

 

 

 

 

 

624,454

 

Total investments

 

$

618,167,247

 

 

 

 

$

549,280,219

 

 

At December 31, 2020, investments consisted of the following:

 

 

 

Cost

 

 

Fair Value

 

Senior secured notes

 

$

3,154,101

 

 

$

1,098,500

 

Unsecured debt

 

 

43,288,785

 

 

 

22,850,000

 

Subordinated debt

 

 

37,625,000

 

 

 

37,625,000

 

Senior secured loans:

 

 

 

 

 

 

 

 

First lien

 

 

242,048,582

 

 

 

236,547,705

 

Second/other priority lien

 

 

138,277,129

 

 

 

132,452,583

 

Total senior secured loans

 

 

380,325,711

 

 

 

369,000,288

 

Preferred stock

 

 

46,456,865

 

 

 

7,277,210

 

Common stock

 

 

17,363,000

 

 

 

 

Limited partnership/limited liability company interests

 

 

78,196,644

 

 

 

41,020,718

 

Equity warrants/options

 

 

365,348

 

 

 

153,760

 

Total investments

 

$

606,775,454

 

 

$

479,025,476

 

 

 

36


 

 

 

 

Industry Composition

As of June 30, 2021, the Company generally uses Global Industry Classification Standard (“GICS”) to classify the industries of its portfolio companies. The following table shows the industry composition of the portfolio, at fair value, at June 30, 2021 and December 31, 2020 by GICS.

 

Industry

 

June 30, 2021

 

 

December 31, 2020

 

Diversified Financial Services

 

 

18.7

%

 

 

19.3

%

Road & Rail

 

 

11.4

 

 

 

10.0

 

Internet Software & Services

 

 

8.4

 

 

 

5.6

 

Software

 

 

6.4

 

 

 

4.3

 

Professional Services

 

 

5.0

 

 

 

2.1

 

Household Durables

 

 

4.7

 

 

 

 

Containers & Packaging

 

 

3.8

 

 

 

4.3

 

Health Care Technology

 

 

3.5

 

 

 

1.9

 

Health Care Providers & Services

 

 

3.3

 

 

 

5.6

 

Media

 

 

3.3

 

 

 

4.2

 

Textile, Apparel & Luxury Goods

 

 

3.1

 

 

 

3.4

 

Internet & Catalog Retail

 

 

2.8

 

 

 

3.2

 

Health Care Equipment & Supplies

 

 

2.7

 

 

 

5.8

 

Energy Equipment & Services

 

 

2.5

 

 

 

2.8

 

Consumer Finance

 

 

2.5

 

 

 

1.7

 

Tobacco Related

 

 

2.4

 

 

 

2.8

 

Insurance

 

 

2.2

 

 

 

3.5

 

Diversified Consumer Services

 

 

1.9

 

 

 

0.9

 

Aerospace & Defense

 

 

1.7

 

 

 

1.9

 

IT Services

 

 

1.6

 

 

 

0.2

 

Personal Products

 

 

1.4

 

 

 

1.6

 

Airlines

 

 

1.2

 

 

 

1.5

 

Trading Companies & Distributors

 

 

0.9

 

 

 

 

Machinery

 

 

0.8

 

 

 

0.3

 

Construction & Engineering

 

 

0.7

 

 

 

 

Metals & Mining

 

 

0.7

 

 

 

0.5

 

Automobiles

 

 

0.6

 

 

 

 

Distributors

 

 

0.4

 

 

 

 

Building Products

 

 

0.4

 

 

 

 

Commercial Services & Supplies

 

 

0.3

 

 

 

0.3

 

Diversified Telecommunication Services

 

 

0.2

 

 

 

 

Specialty Retail

 

 

0.2

 

 

 

0.3

 

Electrical Equipment

 

 

0.1

 

 

 

0.7

 

Chemicals

 

 

0.1

 

 

 

0.3

 

Capital Markets

 

 

0.1

 

 

 

0.1

 

Multiline Retail

 

 

 

 

 

3.1

 

Oil, Gas & Consumable Fuels

 

 

 

 

 

 

Thrifts & Mortgage Finance

 

 

 

 

 

7.8

 

Totals

 

 

100.0

%

 

 

100.0

%

 

The geographic composition of the portfolio at fair value at June 30, 2021 was United States 93.9%, Canada 1.2%, United Kingdom 4.0%, and Germany 0.9% and at December 31, 2020 was United States 96.2%, and Canada 3.8%. The geographic composition is determined by several factors including the location of the corporate headquarters of the portfolio company.

 

 

37


 

 

 

Market and Credit Risk

In the normal course of business, the Company invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer of a security to meet all its obligations (issuer credit risk). The value of securities held by the Company may decline in response to certain events, including those directly involving the issuers whose securities are owned by the Company; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. An outbreak of infectious respiratory illness caused by a novel coronavirus known as “COVID-19” has been detected globally. This coronavirus has resulted in authorities implementing numerous measures attempting to contain the spread and impact of COVID-19, such as travel bans and restrictions, quarantines, shelter in place orders, and limitations on business activity, including closures. The impact of epidemics and pandemics such as the coronavirus, could affect the economies of many nations, individual companies and the market in general in ways that cannot necessarily be foreseen at the present time. Similar to issuer credit risk, the Company may be exposed to counterparty credit risk, or the risk that an entity with which the Company has unsettled or open transactions may fail to or be unable to perform on its commitments. The Company manages counterparty risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Company to market, issuer and counterparty credit risks, consist principally of investments in portfolio companies. The extent of the Company’s exposure to market, issuer and counterparty credit risks with respect to these financial assets is generally approximated by their value recorded in the consolidated statements of assets and liabilities. The Company is also exposed to credit risk related to maintaining all of its cash at a major financial institution.

The Company has investments in lower rated and comparable quality unrated senior and junior secured, unsecured and subordinated debt securities and loans, which are subject to a greater degree of credit risk than more highly rated investments. The risk of loss due to default by the issuer is significantly greater for holders of such securities and loans, particularly in cases where the investment is unsecured or subordinated to other creditors of the issuer.

BCIC Senior Loan Partners, LLC

On June 23, 2016, the Company and Windward Investments LLC (“Windward”) entered into an agreement to create BCIC Senior Loan Partners, LLC (“Senior Loan Partners”), a joint venture. Senior Loan Partners is structured as an unconsolidated Delaware limited liability company, and makes loans to and other investments in portfolio companies. All portfolio and other material decisions regarding Senior Loan Partners must be submitted to its board of directors, which is comprised of four members, two of whom were selected by the Company and two of whom were selected by Windward, and must be approved by at least one member appointed by the Company and one appointed by Windward. In addition, certain matters may be approved by Senior Loan Partners’ investment committee, which is comprised of one member appointed by the Company and one member appointed by Windward.

The Company does not consolidate its non-controlling interests in Senior Loan Partners because the entity is not considered a substantially wholly owned investment company subsidiary, as provided under ASC 946. Senior Loan Partners is a joint venture for which shared power exists relating to the decisions that most significantly impact the economic performance of the entity.

As of June 30, 2021, the Company and Windward are committed to provide an aggregate of approximately $68.6 million of equity to Senior Loan Partners, with the Company committing to provide $58.3 million and Windward committing to provide $10.3 million (of which the Company and Windward had funded $54.0 million and $9.5 million, respectively, and remaining commitments from the Company and Windward as of June 30, 2021 were $4.2 million and $0.8 million, respectively). Capital redemptions generally are received associated with the sales or dispositions of the underlying investments in portfolio companies of Senior Loan Partners. During the three and six months ended June 30, 2021, Senior Loan Partners returned $4.5 million and $9.3 million, respectively, of capital pro-rata to its members, which is not recallable. Capital contributions have primarily been used to make investments and fund ongoing administrative expenses of Senior Loan Partners.

As previously disclosed, in December 2020, Senior Loan Partners sold a majority of its loan portfolio and part of the proceeds were used to fully prepay and terminate its credit facility. Therefore, there was no debt balance outstanding as of June 30, 2021.

 

 

38


 

 

 

As of June 30, 2021, Senior Loan Partners had total investments at fair value of $29.6 million. Below is a summary of Senior Loan Partners’ portfolio as of June 30, 2021:

 

 

Portfolio Company

 

Industry(3)

 

Interest

Rate(1)

 

Maturity

 

Principal

Amount

 

 

Cost

 

 

Fair

Value(2)

 

Senior Secured Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Crown Paper Group, Inc., First Lien Term Loan

 

Paper & Forest Products

 

7.75% (L + 475, 1.00% Floor Cash / 2.00% PIK)

 

4/3/24

 

$

19,466,747

 

 

$

19,297,402

 

 

$

16,157,400

 

Crown Paper Group Inc., Delayed Draw Term Loan(4)

 

Paper & Forest Products

 

8.75% (L + 475, 1.00% Floor Cash / 3.00% PIK)

 

12/31/21

 

 

422,129

 

 

 

422,129

 

 

 

422,129

 

PVHC Holding Corp., First Lien Term Loan

 

Containers & Packaging

 

5.75% (L + 475,1.00% Floor)

 

8/2/24

 

 

10,337,675

 

 

 

10,308,603

 

 

 

8,812,868

 

TLE Holdings, LLC, First Lien Term Loan

 

Professional Services

 

7.00% (L + 600,1.00% Floor)

 

6/28/24

 

 

3,880,374

 

 

 

3,858,188

 

 

 

3,327,421

 

TLE Holdings, LLC, Delayed Draw Term Loan

 

Professional Services

 

7.00% (L + 600,1.00% Floor)

 

6/28/24

 

 

993,075

 

 

 

977,664

 

 

 

851,562

 

Total

 

 

 

 

 

 

 

 

 

 

 

$

34,863,986

 

 

$

29,571,380

 

 

 

 

 

(1)

100% of the senior secured loans in BCIC Senior Loan Partners’ portfolio bear interest at a floating rate that may be determined by reference to the London Interbank Offered Rate (LIBOR), “L”, or other base rate (commonly the Federal Funds Rate or the Prime Rate), “P”, at the borrower’s option. In addition, each of such senior secured loans has a floor of 1.00%. The borrower under a senior secured loan generally has the option to select from interest reset periods of one, two, three or six months and may alter that selection at the end of any reset period. The stated interest rate represents the weighted average interest rate at June 30, 2021 of all contracts within the specified loan facility.

 

(2)

Represents fair value in accordance with ASC Topic 820. The determination of such fair value is not included in the Company’s Board of Directors’ valuation process described elsewhere herein.

 

(3)

Unaudited. As of June 30, 2021, Senior Loan Partners uses Global Industry Classification Standard (“GICS”) codes to identify the industry groupings.

 

(4)

Portfolio company has an unfunded loan commitment as of June 30, 2021.

Below is certain summarized financial information for Senior Loan Partners as of June 30, 2021 and December 31, 2020 and for the three and six months ended June 30, 2021 and 2020:

Selected Balance Sheet Information

 

 

 

June 30,

2021

 

 

December 31,

2020

 

Investments, at fair value (cost $34,863,986 and $43,959,430)

 

$

29,571,380

 

 

$

35,521,942

 

Cash and cash equivalents

 

 

6,703,042

 

 

 

7,862,709

 

Other assets

 

 

7,187

 

 

 

233,626

 

Total assets

 

$

36,281,609

 

 

$

43,618,277

 

Debt

 

 

 

 

 

 

Distribution payable

 

 

28,956

 

 

 

110,102

 

Other accrued expenses and payables

 

 

134,019

 

 

 

978,459

 

Total liabilities

 

$

162,975

 

 

$

1,088,561

 

Members’ equity

 

 

36,118,634

 

 

 

42,529,716

 

Total liabilities and members’ equity

 

$

36,281,609

 

 

$

43,618,277

 

 

Selected Statement of Operations Information

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2021

 

 

June 30, 2020

 

 

June 30, 2021

 

 

June 30, 2020

 

Total investment income

 

$

675,638

 

 

$

3,226,636

 

 

$

1,376,247

 

 

$

7,769,105

 

Interest and credit facility fees

 

 

 

 

 

1,419,985

 

 

 

 

 

 

3,679,345

 

Other fees and expenses

 

 

43,982

 

 

 

164,111

 

 

 

143,327

 

 

 

403,034

 

Total expenses

 

$

43,982

 

 

$

1,584,096

 

 

$

143,327

 

 

$

4,082,379

 

Net realized and unrealized appreciation (depreciation)

 

 

1,098,289

 

 

 

(3,573,667

)

 

 

2,856,815

 

 

 

(17,958,376

)

Net increase (decrease) in members' capital

 

$

1,729,945

 

 

$

(1,931,127

)

 

$

4,089,735

 

 

$

(14,271,650

)

 

For the three and six months ended June 30, 2021, the Company’s share of net investment income from Senior Loan Partners was $0.5 million and $1.0 million, respectively, which are included in dividend income from controlled investments on the Company’s Consolidated

 

 

39


 

 

 

Statements of Operations. For the three and six months ended June 30, 2020, the Company’s share of net investment income from Senior Loan Partners was $1.4 million and $3.1 million, respectively.

6. Other Related Party Transactions

Advisor Reimbursements

The investment management agreement provides that the Company will reimburse the Advisor for costs and expenses incurred by the Advisor for administrative or operating services, office space rental, office equipment and utilities allocable to the Advisor under the investment management agreement, as well as any costs and expenses incurred by the Advisor relating to any non-investment advisory, administrative or operating services provided by the Advisor to the Company. For the three and six months ended June 30, 2021, the Company incurred $87,500 and $175,000, for such investment advisor expenses. For the three and six months ended June 30, 2020, the Company incurred $87,500 and $175,000 respectively, for such investment advisor expenses.

From time to time, the Advisor and its affiliates may pay third party providers for goods or services utilized by the Company. The Company will subsequently reimburse the Advisor and its affiliates for such amounts. Reimbursements to the Advisor and their affiliates for such purposes during the three and six months ended June 30, 2021 were $72,910 and $137,634, respectively. Reimbursements to the Advisor, BlackRock Advisors and their affiliates for such purposes during the three and six months ended June 30, 2020 were $48,524 and $218,749, respectively.

No person who is an officer, director or employee of the Advisor and who serves as a director of the Company receives any compensation from the Company for such services. Directors who are not affiliated with the Advisor receive compensation for their services and reimbursement of expenses incurred to attend meetings.

Administration

The Company also has entered into an administration agreement with BlackRock Financial Management, Inc. (the “Administrator”) under which the Administrator provides certain administrative services to the Company. For providing these services, facilities and personnel, the Company reimburses the Administrator for the Company’s allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the administration agreement, including rent and the Company’s allocable portion of the cost of certain of the Company’s officers and their respective staffs. For the three and six months ended June 30, 2021, the Company incurred $314,886 and $637,001 respectively, for such administrative services expenses. For the three and six months ended June 30, 2020, the Company incurred $375,704 and $689,265, respectively, for such administrative services expenses.

Advisor Stock Transactions

At June 30, 2021 and December 31, 2020, BCIA did not own any shares of the Company. At both June 30, 2021 and December 31, 2020, other entities affiliated with the Administrator and Advisor beneficially owned less than 1% of the Company’s total shares of common stock outstanding.

7. Stockholders’ Equity and Distributions

Distributions to common stockholders are recorded on the ex-dividend date. The amount to be paid out as a distribution is determined by the Board of Directors. Net realized capital gains, if any, generally are distributed at least annually, although the Company may decide to retain such capital gains for investment.

The Company has adopted a dividend reinvestment plan (the “Plan”) that provides for reinvestment of distributions on behalf of stockholders, unless a stockholder elects to receive cash. As a result, if the Board of Directors authorizes, and the Company declares, a cash distribution, then stockholders who have not “opted out” of the dividend reinvestment plan will have their cash dividends automatically reinvested in additional shares of Common Stock, rather than receiving the cash distributions. Additionally, if the Company makes a distribution to be paid in cash or in stock at the election of stockholders as of the applicable dividend record date (a “Cash/Stock Distribution”), the terms are subject to the amended Plan dated May 13, 2020 described below.

 

 

40


 

 

 

For the three and six months ended June 30, 2021 and 2020, declared distributions to common stockholders were as follows:

 

For the quarter ended

Distribution in Cash

 

Distribution in newly issued common shares

 

 

Total Declared Distribution

 

Reinvested distributions paid during quarter  (1) (2)

 

 

March 31, 2021

$

7,441,594

 

$

 

 

$

7,441,594

 

$

 

 

June 30, 2021

 

7,413,594

 

 

 

 

 

7,413,594

 

 

541,771

 

 

Total

$

14,855,188

 

$

 

 

$

14,855,188

 

$

541,771

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the quarter ended

Distribution in Cash

 

Distribution in newly issued common shares

 

 

Total Declared Distribution

 

Reinvested distributions paid during quarter (1)

 

 

March 31, 2020

$

9,543,152

 

$

 

 

$

9,543,152

 

$

719,692

 

(2)

June 30, 2020

 

1,363,316

 

 

5,450,678

 

(4)

 

6,813,994

 

 

638,560

 

(3)

Total

$

10,906,468

 

$

5,450,678

 

 

$

16,357,146

 

$

1,358,252

 

 

 

 

(1)

The Company has adopted a dividend reinvestment plan that provides for reinvestment of distributions on behalf of stockholders, unless a stockholder elects to receive cash.

 

(2)

Distributions reinvested through purchase of shares in the open market.

 

(3)

Distributions reinvested through issuance of new shares.

 

(4)

Declared distribution in newly issued common shares includes $858,364 of distribution reinvested through 100% stock election for the dividend paid on 7/7/2020.

On March 6, 2018, the Board of Directors of the Company adopted amendments to the Plan. Under the terms of the amended Plan, if the Company declares a dividend or determines to make a capital gain or other distribution, the reinvestment plan agent will acquire shares for the participants’ accounts, depending upon the following circumstances, (i) through receipt of additional unissued but authorized shares from the Company (“newly issued shares”) and/or (ii) by purchase of outstanding shares on the open market (“open-market purchases”). If, on the distribution payment date, the last quarterly net asset value per share (“NAV”) is equal to or less than the closing market price per share on such distribution payment date (such condition often referred to as a “market premium”), the reinvestment plan agent will invest the distribution amount in newly issued shares on behalf of the participants. The number of newly issued shares to be credited to each participant’s account will be determined by dividing the dollar amount of the distribution by the greater of (i) the NAV or (ii) 95% of the closing market price on the distribution payment date. If, on the distribution payment date, the NAV is greater than the closing market price per share on such distribution payment date (such condition often referred to as a “market discount”), the reinvestment plan agent may, upon notice from the Company, either (a) invest the distribution amount in newly issued shares on behalf of the participants or (b) invest the distribution amount in shares acquired on behalf of the participants in open-market purchases.

On May 13, 2020, the Board of Directors of the Company adopted further amendments to the Plan. Under the terms of the amended Plan, if the Company makes a Cash/Stock Distribution, each stockholder will be required to elect whether to receive the distribution in cash or in shares of the Company's common stock (“Common Shares”), pursuant to such notices, forms or other documentation as may be provided to the stockholder by the Company (the “Election Forms”). If the stockholder is a Plan participant and elects to receive the Cash/Stock Distribution in cash, the stockholder will be deemed to have elected not to participate in the Plan solely with respect to such Cash/Stock Distribution and will receive the distribution in cash subject to any rules applicable to the distribution that may limit the portion of the distribution the Company is required to pay in cash. If the stockholder is a Plan participant and elects to receive the Cash/Stock Distribution in stock, the stockholder will receive the distribution in newly issued Common Shares. The number of newly issued Common Shares credited to the stockholders' account in either case will be determined by dividing the dollar amount of the distribution (or portion of the distribution to be paid in Common Shares) by the price per Common Share determined in accordance with the Election Forms rather than pursuant to the formula(s) otherwise applicable under the Plan.

On November 3, 2020, the Company’s Board of Directors authorized the Company to purchase up to a total of 7,500,000 shares, effective until the earlier of November 2, 2021 or such time that all of the authorized shares have been repurchased, in accordance with the guidelines specified in Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934 (the “Company Repurchase Plan”). As of June 30, 2021, 7,162,994 shares remained available for repurchase.

The following table summarizes the total shares repurchased and amounts paid by the Company under the Company Repurchase Plan, including broker fees, for the three and six months ended June 30, 2021:

 

June 30, 2021

 

Shares

Repurchased

 

 

Price Per

Share

 

 

Total Cost

 

Three Months Ended

 

 

80,944

 

 

$

3.73

 

 

$

301,703

 

Six Months Ended

 

 

337,006

 

 

 

3.48

 

 

 

1,171,429

 

 

 

 

41


 

 

 

 

The following table summarizes the total shares repurchased and amounts paid by the Company under the Company Repurchase Plan, including broker fees, for the three and six months ended June 30, 2020:

 

June 30, 2020

 

Shares

Repurchased

 

 

Price Per

Share

 

 

Total Cost

 

Three Months Ended

 

 

 

 

$

 

 

$

 

Six Months Ended

 

 

986,554

 

 

 

3.68

 

 

 

3,627,604

 

 

Since inception of the original repurchase plan through June 30, 2021, the Company has purchased 10,348,592 shares of its common stock on the open market for $67,468,288, including brokerage commissions through the repurchase plan. The Company currently holds the shares it repurchased in treasury.

8. Earnings (Loss) per share

The following information sets forth the computation of basic and diluted net increase (decrease) in net assets from operations per share (earnings (loss) per share) for the three and six months ended June 30, 2021 and 2020.

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2021

 

 

June 30, 2020

 

 

June 30, 2021

 

 

June 30, 2020

 

Earnings (Loss) per share – basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in net assets resulting from operations

 

$

32,025,720

 

 

$

(27,395,077

)

 

$

48,226,725

 

 

$

(86,588,743

)

Weighted average shares outstanding – basic

 

 

74,150,425

 

 

 

68,117,628

 

 

 

74,292,637

 

 

 

68,365,792

 

Earnings (Loss) per share – basic

 

$

0.43

 

 

$

(0.40

)

 

$

0.65

 

 

$

(1.27

)

Earnings (Loss) per share – diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in net assets resulting from operations, before adjustments

 

$

32,025,720

 

 

$

(27,395,077

)

 

$

48,226,725

 

 

$

(86,588,743

)

Adjustments for interest on unsecured convertible senior notes(1)

 

 

2,262,796

 

 

 

 

 

 

4,521,930

 

 

 

 

Net increase (decrease) in net assets resulting from operations, as adjusted

 

$

34,288,516

 

 

$

(27,395,077

)

 

$

52,748,655

 

 

$

(86,588,743

)

Weighted average shares outstanding – diluted(1)

 

 

91,144,162

 

 

 

68,117,628

 

 

 

91,286,374

 

 

 

68,365,792

 

Earnings (Loss) per share – diluted

 

$

0.38

 

 

$

(0.40

)

 

$

0.58

 

 

$

(1.27

)

 

(1)

No adjustments for interest or incremental shares were included for periods ended June 30, 2020 because the effect would be antidilutive.

9. Commitments and contingencies

In the normal course of business, the Company may enter into guarantees on behalf of portfolio companies. Under these arrangements, the Company would be required to make payments to third parties if the portfolio companies were to default on their related payment obligations. There were no such guarantees outstanding at June 30, 2021 and December 31, 2020. In addition, from time to time, the Company may provide for a commitment to a portfolio company for investment in an existing or new security. At June 30, 2021 and December 31, 2020, the Company had unfunded commitments of $45.2 million across 30 portfolio companies and $24.3 million across 14 portfolio companies, respectively. Of the $45.2 million and $24.3 million total unfunded commitments at June 30, 2021 and December 31, 2020, $4.2 million was on our aggregate $58.3 million and $66.1 million equity commitment to BCIC Senior Loan Partners, LLC, at June 30, 2021 and December 31, 2020, respectively (see Note 5). The aggregate fair value of unfunded commitments at June 30, 2021 and December 31, 2020 was $40.7 million and $22.2 million, respectively. We maintain sufficient cash on hand and available borrowings to fund such unfunded commitments should the need arise.

In the normal course of business, the Company enters into contractual agreements that provide general indemnifications against losses, costs, claims and liabilities arising from the performance of individual obligations under such agreements. The Company’s individual maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. However, based on management’s experience, the Company expects the risk of loss to be remote.

From time to time, the Company and the Advisor may be a party to certain legal proceedings incidental to the normal course of its business, including the enforcement of its rights under contracts with our portfolio companies. Further, third parties may try to seek to impose liability on the Company in connection with the activities of its portfolio companies. While the Company cannot predict the outcome of these legal proceedings with certainty, we do not expect that these proceedings will have a material effect on its consolidated financial statements.

 

 

 

42


 

 

 

 

10. Financial highlights

The following per share data and ratios have been derived from information provided in the consolidated financial statements. The following is a schedule of financial highlights for a common share outstanding for the six months ended June 30, 2021 and 2020:

 

 

 

Six Months Ended

 

 

 

June 30, 2021

 

 

June 30, 2020

 

Per Share Data:

 

 

 

 

 

 

 

 

Net asset value, beginning of period

 

$

4.23

 

 

$

6.33

 

 

 

 

 

 

 

 

 

 

Investment Operations:

 

 

 

 

 

 

 

 

    Net investment income

 

 

0.12

 

 

 

0.27

 

    Net realized and unrealized gain (loss)

 

 

0.53

 

 

 

(1.53

)

Total from investment operations

 

 

0.65

 

 

 

(1.26

)

 

 

 

 

 

 

 

 

 

Repurchase of common stock

 

 

 

 

 

0.02

 

Distributions to stockholders(6)

 

 

(0.20

)

 

 

(0.24

)

Issuance/reinvestment of stock at prices (below) net asset value

 

 

 

 

 

(0.01

)

Net asset value, end of period

 

$

4.68

 

 

$

4.84

 

 

 

 

 

 

 

 

 

 

Market price at end of period

 

$

3.93

 

 

$

2.67

 

Total return based on market price(1)

 

 

53.77

%

 

 

(40.73

)%

Total return based on net asset value(2)

 

 

16.45

%

 

 

(15.67

)%

Shares outstanding at end of period

 

 

74,129,659

 

 

 

68,139,955

 

 

 

 

 

 

 

 

 

 

Ratios to average net assets:

 

 

 

 

 

 

 

 

    Operating expenses(3)(4)

 

 

3.98

%

 

 

4.76

%

    Interest and other debt related expenses(3)

 

 

3.57

%

 

 

4.42

%

    Total expenses(3)(4)

 

 

7.55

%

 

 

9.18

%

    Net investment income(3)

 

 

5.64

%

 

 

9.47

%

 

 

 

 

 

 

 

 

 

Net assets at end of period

 

$

347,210,385

 

 

$

329,674,046

 

Portfolio turnover rate

 

 

24

%

 

 

8

%

Weighted average interest rate on debt(7)

 

 

6.45

%

 

 

5.00

%

Weighted average debt outstanding

 

$

161,052,536

 

 

$

332,595,186

 

Weighted average shares outstanding

 

 

74,292,637

 

 

 

68,365,792

 

Average debt per share(5)

 

$

2.17

 

 

$

4.86

 

 

(1)

Total return based on market value is calculated by determining the percentage change in market value per share during the period and assuming that the dividend distributions are reinvested in accordance with the Company’s dividend reinvestment plan. Not annualized.

(2)

Total return based on net asset value is calculated by determining the percentage change in net asset value per share during the period and assuming that the dividend distributions are reinvested in accordance with the Company’s dividend reinvestment plan. Not annualized.

(3)

Annualized.

(4)

Ratio including incentive fee based on income waived for the six months ended June 30, 2020 (see Note 3 for more detail). Excluding incentive fee waiver, the ratio of operating expenses to average net assets would be 6.58% and the ratio of total expenses to average net assets would be 11.00% for the same respective period. There was no incentive fee based on income for the six months ended June 30, 2021.

(5)

Average debt per share is calculated as average debt outstanding divided by the weighted average shares outstanding during the applicable period.

(6)

For the six months ended June 30, 2021, $9.0 million out of the total $14.9 million declared distributions were from net investment income based on book income. The amount of distribution related to a return of capital will be adjusted on an annual basis if necessary, and calculated in accordance with federal income tax regulations (see Note 2).

(7)

Weighted average interest rate on debt includes contractual interest, amortization of original issue discount and amortization of debt issuance costs (see Note 4).

 

 

 

43


 

 

 

 

11. Subsequent events

On July 28, 2021, the Company’s Board of Directors declared a distribution of $0.10 per share, payable on October 6, 2021 to stockholders of record at the close of business on September 15, 2021.

 

The Company has reviewed subsequent events occurring through the date that these consolidated financial statements were available to be issued, and determined that no subsequent events occurred requiring accrual or disclosure, except as disclosed above and elsewhere in these notes to consolidated financial statements.

 

 

44


 

 

 

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

The information contained in this section should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this report.

This report, and other statements that we may make, may contain forward-looking statements with respect to future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as “trend,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “potential,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” or similar expressions.

Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and we assume no duty to and do not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.

In addition to factors previously identified elsewhere in the reports BlackRock Capital Investment Corporation has filed with the Securities and Exchange Commission (the “SEC”), the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance:

 

our future operating results;

 

our business prospects and the prospects of our portfolio companies;

 

the impact of investments that we expect to make;

 

our contractual arrangements and relationships with third parties;

 

the dependence of our future success on the general economy and its impact on the industries in which we invest;

 

the financial condition of and ability of our current and prospective portfolio companies to achieve their objectives;

 

our expected financings and investments;

 

the adequacy of our cash resources and working capital, including our ability to obtain continued financing on favorable terms;

 

the timing of cash flows, if any, from the operations of our portfolio companies;

 

the impact of increased competition;

 

the impact of COVID-19 on our portfolio companies and the markets in which they operate, interest rates and the economy in general;

 

the ability of the Advisor to locate suitable investments for us and to monitor and administer our investments;

 

changes in law and policy accompanying the new administration and uncertainty pending any such changes;

 

increased geopolitical unrest, terrorist attacks or acts of war, which may adversely affect the general economy, domestic and local financial and capital markets, or the specific industries of our portfolio companies;

 

changes and volatility in political, economic or industry conditions, the interest rate environment, foreign exchange rates or financial and capital markets;

 

the unfavorable resolution of legal proceedings; and

 

the impact of changes to tax legislation and, generally, our tax position.

Overview

We were incorporated in Delaware on April 13, 2005 and commenced operations with private funding on July 25, 2005, and completed our initial public offering on July 2, 2007. Our investment objective is to generate both current income and capital appreciation through debt and equity investments. We invest primarily in middle-market companies in the form of senior debt securities and loans, and our investment portfolio may include junior secured and unsecured debt securities and loans, each of which may include an equity component.

We are externally managed and have elected to be regulated as a BDC under the 1940 Act. As a BDC, we are required to comply with certain regulatory requirements. For instance, we generally have to invest at least 70% of our total assets in “qualifying assets,” including securities of private or thinly traded public U.S. companies, cash, cash equivalents, U.S. Government securities and high-quality debt investments that mature in one year or less.

Certain items previously reported may have been reclassified to conform to the current year presentation.

 

 

45


 

 

 

Investments

Our level of investment activity can and does vary substantially from period to period depending on many factors, including the amount of debt and equity capital available to middle-market companies, the level of merger and acquisition activity, the general economic environment and the competitive environment for the types of investments we make.

As a BDC, we generally do not acquire any assets other than “qualifying assets” specified in the 1940 Act unless, at the time the acquisition is made, at least 70% of our total assets are qualifying assets (with certain limited exceptions). Qualifying assets include investments in “eligible portfolio companies.” Under the relevant SEC rules, the term “eligible portfolio company” includes most private companies, companies whose securities are not listed on a national securities exchange, and certain public companies that have listed their securities on a national securities exchange and have a market capitalization of less than $250 million. These rules also permit us to include as qualifying assets certain follow-on investments in companies that were eligible portfolio companies at the time of initial investment but that no longer meet the definition. As of June 30, 2021, approximately 11.3% of the total assets of the Company were not qualifying assets under Section 55(a) of the 1940 Act.

Revenues

We generate revenues primarily in the form of interest on the debt we hold, dividends on our equity interests and capital gains on the sale of warrants and other debt or equity interests that we acquire in portfolio companies. Our investments in fixed income instruments generally have an expected maturity of three to ten years, although we have no lower or upper constraint on maturity, and typically bear interest at a fixed or floating rate. Interest on our debt securities is generally payable quarterly or semi-annually. In some cases, our debt instruments and preferred stock investments may defer payments of cash interest or dividends or pay interest or dividends in-kind. Any outstanding principal amount of our debt securities and any accrued but unpaid interest will generally become due at the maturity date. In addition, we may generate revenue in the form of prepayment fees, commitment, origination, capital structuring fees, and fees for providing significant managerial assistance.

Expenses

Our primary operating expenses include the payment of a Management Fee and, depending on our operating results, an Incentive Fee, interest and credit facility fees, expenses reimbursable under the management agreement, professional fees, administration fees and the allocable portion of overhead under the administration agreement. The Management Fee and Incentive Fee compensate the Advisor for work in identifying, evaluating, negotiating, closing and monitoring our investments. Our Current Management Agreement with the Advisor provides that we will reimburse the Advisor for costs and expenses incurred by the Advisor for office space rental, office equipment and utilities allocable to the Advisor under the Current Management Agreement, as well as any costs and expenses incurred by the Advisor relating to any non-investment advisory, administrative or operating services provided by the Advisor to us. We bear all other costs and expenses of our operations and transactions.

Critical accounting policies

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in the economic environment, financial markets and any other parameters used in determining such estimates could cause actual results to differ.

Management considers the significant accounting policies important to understanding the consolidated financial statements. In addition to the discussion below, our significant accounting policies are further described in the notes to the consolidated financial statements. See Note 2 to the consolidated financial statements for a description of significant accounting policies and of recently issued accounting pronouncements. Management considers Investments to be an area deemed a critical accounting policy as a result of the judgments necessary for management to select valuation methodologies and to select significant unobservable inputs to estimate fair value (see Note 2 to the consolidated financial statements).

Financial and operating highlights

At June 30, 2021:

Investment portfolio, at fair value: $549.3 million

Net assets: $347.2 million

Indebtedness, excluding deferred issuance costs: $194.8 million

Net asset value per share: $4.68

 

 

46


 

 

 

Portfolio Activity for the Three Months Ended June 30, 2021:

Cost of investments during period, including PIK: $88.9 million

Sales, repayments and other exits during period: $25.4 million

Number of portfolio companies at end of period: 74

Operating Results for the Three Months Ended June 30, 2021:

Net investment income per share: $0.07

Distributions declared per share: $0.10

Basic earnings (loss) per share: $0.43

Net investment income: $4.8 million

Net realized and unrealized gain (loss): $27.2 million

Net increase (decrease) in net assets from operations: $32.0 million

Net investment income per share, as adjusted1: $0.07

Basic earnings (loss) per share, as adjusted1: $0.43

Net investment income, as adjusted1: $4.8 million

Net increase (decrease) in net assets from operations, as adjusted1: $32.0 million

As Adjusted1: Amounts are adjusted to remove the Incentive Fee expense based on gains, as required by GAAP, and to include only the incremental Incentive Fee expense based on income. Under the Current Management Agreement, Incentive Fee expense based on income is calculated for each calendar quarter and may be paid on a quarterly basis if certain thresholds are met. Amounts reflect the Company’s ongoing operating results and reflect the Company’s financial performance over time.

Portfolio and investment activity

We invested approximately $88.9 million during the three months ended June 30, 2021. The new investments consisted of senior secured loans secured by first lien ($68.7 million, or 77.3%) or second lien ($20.2 million, or 22.7%). Additionally, we received proceeds from sales, repayments and other exits of approximately $25.4 million during the three months ended June 30, 2021.

Concentration of our assets in an issuer, industry or sector may present certain risks. To the extent that we assume large positions in the securities of a small number of issuers, our net asset value may fluctuate to a greater extent than that of a diversified investment company as a result of changes in the financial condition or the market’s assessment of the issuer. At June 30, 2021, our portfolio of $549.3 million (at fair value) consisted of 74 portfolio companies and was invested approximately 84% in senior secured loans, 5% in unsecured or subordinated debt securities, 11% in equity investments, and less than 1% in senior secured notes. Our average investment by portfolio company at amortized cost was approximately $8.4 million at June 30, 2021. Our largest portfolio company investment at fair value was approximately $35.1 million and our five largest portfolio company investments at fair value comprised approximately 25% of our portfolio at June 30, 2021. At December 31, 2020, our portfolio of $479.0 million (at fair value) consisted of 55 portfolio companies and was invested 77% in senior secured loans, 13% in unsecured or subordinated debt securities, 10% in equity investments and 1% in senior secured notes. Our average investment by portfolio company at amortized cost was approximately $11.0 million at December 31, 2020. Our largest portfolio company investment by value was approximately $36.2 million and our five largest portfolio company investments by value comprised approximately 31% of our portfolio at December 31, 2020.

In addition, we may, from time to time, invest a substantial portion of our assets in the securities of issuers in any single industry or sector of the economy or in only a few issuers. A downturn in an industry or sector in which we are concentrated could have a larger impact on us than on a company that does not concentrate in that particular industry or sector. Our investment advisor monitors industry and sector uncertainties on an ongoing basis, including substantial regulatory challenges in the healthcare sector, volatility and extensive government regulation in the financial services sector, cyclical risks associated with the overall economy and events outside of our control, including public health crises such as COVID-19 which may have resulted in a negative impact to certain industries, including significant reductions in demand for certain goods and services, reductions in business activity and financial transactions, supply chain interruptions and overall economic and financial market instability both globally and in the United States (see Note 5 to the consolidated financial statements), among various other industry and sector uncertainties due to certain exposures. At June 30, 2021, our top three industry concentrations at fair value consisted of Diversified Financial Services (18.7%), Road & Rail (11.4%), and Internet Software & Services (8.4%). At December 31, 2020, our top three industry concentrations at fair value consisted of Diversified Financial Services (19.3%), Road & Rail (10.0%) and Thrifts & Mortgage Finance (7.8%) (see Note 5 to the consolidated financial statements).

 

 

47


 

 

 

The weighted average portfolio yields at fair value and cost as of June 30, 2021 and December 31, 2020 were as follows:

 

 

 

June 30, 2021

 

 

December 31, 2020

 

 

 

Fair Value

 

 

Cost

 

 

Fair Value

 

 

 

 

Cost

 

Weighted Average Yield(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total portfolio

 

 

8.1

%

 

 

7.3

%

 

 

8.7

%

 

 

 

7.4

%

Senior secured loans

 

 

9.3

%

 

 

9.3

%

 

 

9.5

%

 

 

 

9.5

%

Other debt securities(2)

 

 

2.0

%

 

 

1.1

%

 

 

7.3

%

 

 

 

5.3

%

Debt and income producing equity securities

 

 

8.6

%

 

 

8.0

%

 

 

8.9

%

 

 

 

8.5

%

 

(1)

Computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of original issue discount, divided by (b) the amortized cost or at fair value of each category, as applicable. The calculation excludes exit fees that are receivable upon repayment of certain loan investments.

(2)

The decrease from December 31, 2020 to June 30, 2021 is primarily attributable to a majority of the securities in this category being on non-accrual, after the intended exit in First Boston Construction Holdings, LLC during 2021.

 

 

For the three and six months ended June 30, 2021, the total return based on net asset value was 10.3% and 16.4%, respectively. For the three and six months ended June 30, 2021, the total return based on market price was 20.3% and 53.8%, respectively. For the three and six months ended June 30, 2020, the total return based on net asset value was (6.2)% and (15.7)%, respectively. For the three and six months ended June 30, 2020, the total return based on market price was 25.9% and (40.7)%, respectively. Total returns are historical and are calculated by determining the percentage change in the net asset value or market price with all distributions reinvested, if any. Distributions are assumed to be reinvested in accordance with the Company’s dividend reinvestment plan and do not reflect brokerage commissions.

The Advisor generally employs a grading system for our entire portfolio. The Advisor grades all loans on a scale of 1 to 4. This system is intended to reflect the performance of the borrower’s business, the collateral coverage of the loans and other factors considered relevant. Generally, the Advisor assigns only one loan grade to each portfolio company for all loan investments in that portfolio company; however, the Advisor will assign multiple ratings when appropriate for different investments in one portfolio company. The following is a description of the conditions associated with each investment rating:

Grade 1: Investments in portfolio companies whose performance is substantially within or above the Advisor’s original base case expectations and whose risk factors are neutral to favorable to those at the time of the original investment or subsequent restructuring.

Grade 2: Investments in portfolio companies whose performance is materially below the Advisor’s original base case expectations or risk factors have increased since the time of original investment or subsequent restructuring; no loss of investment return or principal (or invested capital) is expected.

Grade 3: Investments in portfolio companies whose performance is materially below the Advisor’s original base case expectations or risk factors have increased materially since the time of original investment or subsequent restructuring. Some loss of investment return is expected, but no loss of principal (or invested capital) is expected.

Grade 4: Investments in portfolio companies whose performance is materially below the Advisor’s original base case expectations or risk factors have increased substantially since the time of original investment or subsequent restructuring. Some loss of principal (or invested capital) is expected.

The Advisor monitors and, when appropriate, changes the investment ratings assigned to each investment in our portfolio. In connection with our valuation process, the Advisor and Board of Directors review these investment ratings on a quarterly basis. Our weighted average investment rating was 1.37 at June 30, 2021 and 1.90 at December 31, 2020. The following is a distribution of the investment ratings of our portfolio companies, at fair value, at June 30, 2021 and December 31, 2020:

 

 

 

June 30,

2021

 

 

December 31,

2020

 

Grade 1

 

$

390,367,981

 

 

$

189,012,640

 

Grade 2

 

 

136,516,000

 

 

 

198,713,376

 

Grade 3

 

 

 

 

 

38,605,618

 

Grade 4

 

 

21,826,054

 

 

 

51,136,642

 

Not Rated(1)

 

 

570,184

 

 

 

1,557,200

 

Total investments

 

$

549,280,219

 

 

$

479,025,476

 

 

 

(1)

Not Rated category consists primarily of the Company’s residual equity investments in AGY Equity, LLC at June 30, 2021 and December 31, 2020.

 

 

 

48


 

 

 

 

Results of operations

Results comparisons for the three months ended June 30, 2021 and 2020.

Investment income

 

 

 

Three Months Ended

 

 

 

June 30, 2021

 

 

June 30, 2020

 

Investment income

 

 

 

 

 

 

 

 

Interest and fees on senior secured loans

 

$

10,184,389

 

 

$

9,699,935

 

Interest and fees on other debt securities

 

 

136,106

 

 

 

5,227,745

 

Interest earned on short-term investments, cash equivalents

 

 

356

 

 

 

9,130

 

Dividends and fees on equity securities

 

 

536,908

 

 

 

2,566,148

 

Total investment income

 

$

10,857,759

 

 

$

17,502,958

 

 

Total investment income for the three months ended June 30, 2021 decreased $6.6 million, or 38.0%, as compared to the three months ended June 30, 2020. Excluding fee income and other income, total investment income decreased by approximately 37.9%, primarily due to a 28.8% decrease in the average investment portfolio at amortized cost for the comparative periods, and a decrease in dividend income period over period. The decrease in portfolio size is primarily due to exits during 2020 and the first quarter of 2021, primarily consisting of reduced non-core and junior capital exposure. The decrease in dividend income is comprised of i) a $0.9 million decrease from BCIC Senior Loan Partners, LLC period over period; and ii) a $1.2 million decrease from Gordon Brothers Finance Company, as a result of our preferred stock investment going on non-accrual status during the second half of 2020.

Expenses

 

 

 

Three Months Ended

 

 

 

June 30, 2021

 

 

June 30, 2020

 

Operating expenses

 

 

 

 

 

 

 

 

Interest and other debt expenses

 

$

2,969,177

 

 

$

4,359,441

 

Management fees

 

 

1,775,684

 

 

 

2,708,862

 

Incentive fees

 

 

 

 

 

1,608,740

 

Professional fees

 

 

254,834

 

 

 

544,845

 

Administrative expenses

 

 

314,886

 

 

 

375,704

 

Insurance expense

 

 

201,597

 

 

 

123,223

 

Director fees

 

 

153,125

 

 

 

152,500

 

Investment advisor expenses

 

 

87,500

 

 

 

87,500

 

Other operating expenses

 

 

258,232

 

 

 

384,693

 

Total expenses, before incentive fee waiver

 

 

6,015,035

 

 

 

10,345,508

 

Incentive fee waiver

 

 

 

 

 

(1,608,740

)

Expenses, net of incentive fee waiver

 

$

6,015,035

 

 

$

8,736,768

 

 

 

 

 

 

 

 

 

 

 

Total expenses, net of incentive fee waiver, decreased $2.7 million, or 31.2%, for the three months ended June 30, 2021 from comparable period in 2020, primarily due to decreases in interest and other debt expenses, and management fees period over period.

 

Interest and other debt expenses decreased approximately $1.4 million, or 31.9%, for the three months ended June 30, 2021 from the comparable period in 2020, primarily due to a significant decrease in the average debt outstanding period over period, and a lower rate environment (see Note 4 to the consolidated financial statements).

 

Management fees decreased approximately $0.9 million, or 34.4%, for the three months ended June 30, 2021 from the comparable period in 2020 due to a decrease in the total assets on which management fees are calculated (in arrears), and a decrease in the management fee rate effective May 2, 2020 (see Note 3 to the consolidated financial statements). The decrease in total assets was primarily due to net sales and repayments during 2020 and during the first quarter of 2021.

 

For the three months ended June 30, 2021, there was no Incentive Fee waiver as a result of no Incentive Fees being earned for the period. For the three months ended June 30, 2020, the Advisor voluntarily waived incentive fees of $1.6 million, resulting in no net incentive fees for the period. For the three months ended June 30, 2021 and 2020, there was no incentive fees based on gains incurred (see Note 3 to the consolidated financial statements).

 

 

49


 

 

 

Net investment income

Net investment income was $4.8 million and $8.8 million for the three months ended June 30, 2021 and 2020, respectively. The decrease of approximately $4.0 million, or 45% was due to a $6.6 million decline in total investment income, partially offset by a $2.7 million decrease in expenses described above.

Net realized gain or loss

Net realized gain (loss) for the three months ended June 30, 2021 was approximately $(8.7) million, primarily due to the full exit of our debt and equity positions in Red Apple Stores Inc. Substantially all of the net realized losses were reflected in unrealized depreciation in prior periods. Net realized gain (loss) for the three months ended June 30, 2020 was approximately $(54.6) million, primarily due to the sale of our equity investment in U.S. Well Services, Inc., and debt investment in Sur La Table, Inc.

Net unrealized appreciation or depreciation

For the three months ended June 30, 2021 and 2020, the change in net unrealized appreciation or depreciation on investments and foreign currency translation was a decrease in net unrealized depreciation of $35.9 million and $18.4 million, respectively. The decrease in net unrealized depreciation for the three months ended June 30, 2021 was primarily due to a $23.2 million increase in the fair value of SVP-Singer Holdings, LP, based on expected proceeds on the sale of the portfolio company which successfully closed in July 2021, and an $8.4 million reversal of previously recognized depreciation, including foreign currency translation, related to the full exit of our debt and equity investments in Red Apple Stores Inc. The decrease in net unrealized depreciation for the three months ended June 30, 2020 was primarily due to i) the reversal of previously recognized depreciation of $50.3 million related to the sale of our equity investment in U.S. Well Services, Inc. and sale of our debt investment in Sur La Table, Inc., partially offset by ii) $41.1 million increase in valuation depreciation in our investments in AGY Holding Corp., Gordon Brothers Finance Company and BCIC Senior Loan Partners.

Net increase or (decrease) in net assets resulting from operations

The net increase or (decrease) in net assets resulting from operations for the three months ended June 30, 2021 and 2020 was $32.0 million and $(27.4) million, respectively. As compared to the prior period, the increase is reflective of net realized and unrealized gain (loss) of $27.2 million for the current period, as compared to $(36.2) million of net realized and unrealized gain (loss) for the three months ended June 30, 2020, the impact which was partially offset by a decrease in net investment income of approximately $4.0 million period-over-period.

Results comparisons for the six months ended June 30, 2021 and 2020.

Investment income

 

 

 

Six Months Ended

 

 

 

June 30, 2021

 

 

June 30, 2020

 

Investment income

 

 

 

 

 

 

 

 

Interest and fees on senior secured loans

 

$

19,575,574

 

 

$

20,366,098

 

Interest and fees on other debt securities

 

 

433,903

 

 

 

10,337,733

 

Interest earned on short-term investments, cash equivalents

 

 

1,431

 

 

 

24,770

 

Dividends and fees on equity securities

 

 

1,119,475

 

 

 

5,473,651

 

Total investment income

 

$

21,130,383

 

 

$

36,202,252

 

 

Total investment income for the six months ended June 30, 2021 decreased $15.1 million, or 41.6%, as compared to the six months ended June 30, 2020. Excluding fee income and other income, total investment income decreased by approximately 41.6%, primarily due to a  30.3% decrease in the average investment portfolio at amortized cost for the comparative periods, and a decrease in dividend income period over period. The decrease in portfolio size is primarily due to exits during 2020 and during the first quarter of 2021. The decrease in dividend income is comprised of i) a $2.1 million decrease from BCIC Senior Loan Partners, LLC period over period; and ii) a $2.3 million decrease from Gordon Brothers Finance Company, as a result of our preferred stock investment going on non-accrual status during the second half of 2020.

 

 

50


 

 

 

Expenses

 

 

 

Six Months Ended

 

 

 

June 30, 2021

 

 

June 30, 2020

 

Operating expenses

 

 

 

 

 

 

 

 

Interest and other debt expenses

 

$

5,722,273

 

 

$

8,571,715

 

Management fees

 

 

3,575,450

 

 

 

6,004,549

 

Incentive fees

 

 

 

 

 

3,533,138

 

Professional fees

 

 

666,993

 

 

 

1,069,857

 

Administrative expenses

 

 

637,001

 

 

 

689,265

 

Insurance expense

 

 

400,961

 

 

 

242,843

 

Director fees

 

 

306,250

 

 

 

337,250

 

Investment advisor expenses

 

 

175,000

 

 

 

175,000

 

Other operating expenses

 

 

613,514

 

 

 

723,596

 

Total expenses, before incentive fee waiver

 

 

12,097,442

 

 

 

21,347,213

 

Incentive fee waiver

 

 

 

 

 

(3,533,138

)

Expenses, net of incentive fee waiver

 

$

12,097,442

 

 

$

17,814,075

 

 

Total expenses, net of incentive fee waiver, decreased $5.7 million, or 32.1%, for the six months ended June 30, 2021 from comparable period in 2020, primarily due to decreases in interest and other debt expenses and management fees period over period.

Interest and other debt expenses decreased $2.8 million, or 33.2% for the six months ended June 30, 2021 from the comparable period primarily due to a significant decrease in average debt outstanding period over period, and a lower rate environment (see Note 4 to the consolidated financial statements).

Management fees decreased approximately $2.4 million, or 40.5%, for the six months ended June 30, 2021 from the comparable period in 2020 due to a decrease in the total assets on which management fees are calculated (in arrears), and a decrease in the management fee rate effective May 2, 2020 (see Note 3 to the consolidated financial statements). The decrease in total assets was primarily due to net sales and repayments during 2020 and during the first quarter of 2021.

For the six months ended June 30, 2021, there was no Incentive Fee waiver as a result of no Incentive Fees being earned for the period. For the six months ended June 30, 2020, the Advisor voluntarily waived incentive fees of $3.5 million, resulting in no net incentive fees for the period. For the six months ended June 30, 2021 and 2020, there was no incentive fees based on gains incurred (see Note 3 to the consolidated financial statements).

Net investment income

Net investment income was $9.0 million and $18.4 million for the six months ended June 30, 2021 and 2020, respectively. The decrease of $9.4 million over the comparable period was due to the $15.1 million decline in investment income, partially offset by a $5.7 million decrease in expenses.

Net realized gain or loss

Net realized gain (loss) for the six months ended June 30, 2021 was $(19.7) million, primarily due to the restructure of Advanced Lighting Technologies, LLC, and exits of our investments in Red Apple Stores Inc., First Boston Construction Holdings, LLC, and Advantage Insurance Inc. Substantially all of the net realized losses were reflected in unrealized depreciation in prior periods. Net realized gain (loss) for the six months ended June 30, 2020 was $(56.1) million, primarily due to the sale of our equity investment in U.S. Well Services, Inc. and debt investment in Sur La Table, Inc. 

Net unrealized appreciation or depreciation

For the six months ended June 30, 2021 and 2020, the change in net unrealized appreciation or depreciation on investments and foreign currency translation was a decrease in net unrealized depreciation of $58.9 million and an increase in net unrealized depreciation of $(48.9) million, respectively. The decrease in net unrealized depreciation for the six months ended June 30, 2021 was primarily due to i) a $27.4 decrease in net unrealized depreciation on SVP-Singer Holdings, LP, including the reversal of previously recognized depreciation of $1.5 million associated with a distribution from the portfolio company and $25.9 million of valuation appreciation, based on expected proceeds on the sale of the portfolio company which successfully closed in July 2021; ii) the reversal of previously recognized depreciation of $19.3 million, including foreign currency translation, related to the exits of our investments in Red Apple Stores Inc., First Boston Construction Holdings, LLC and Advantage Insurance Inc., and the restructure of Advanced Lighting Technologies, LLC; and iii) overall increase in valuation appreciation across our portfolio. The increase in net unrealized depreciation for the six months ended June 30, 2020 was primarily due to i) $(44.8) million increase in valuation depreciation in our investments in BCIC Senior Loan Partners, LLC, Gordon Brothers Finance Company

 

 

51


 

 

 

and First Boston Construction Holdings, LLC ii) $(23.5) million increase in valuation depreciation in our debt investment in AGY Holding Corp., iii) overall increase in valuation depreciation across our portfolio as a result of macro-economic conditions impacted by the COVID-19 outbreak (see Note 5 to the consolidated financial statements), partially offset by iv) $37.6 million reversal of previously recognized depreciation related to the sale of our equity investment in U.S. Well Services, Inc.

Net increase or (decrease) in net assets resulting from operations

The net increase or (decrease) in net assets resulting from operations for the six months ended June 30, 2021 and 2020 was $48.2 million and $(86.6) million, respectively. As compared to the prior period, the increase is reflective of a net realized and unrealized gain (loss) of $39.2 million for the current period, as compared to $(105.0) million of net realized and unrealized gain (loss) for the six months ended June 30, 2020, the impact which was partially offset by an overall decrease in net investment income of $9.4 million period-over-period.

 

Supplemental Non-GAAP information

We report our financial results on a GAAP basis; however, management believes that evaluating our ongoing operating results may be enhanced if investors have additional non-GAAP basis financial measures. Management reviews non-GAAP financial measures to assess ongoing operations and, for the reasons described below, considers them to be effective indicators, for both management and investors, of our financial performance over time. Management does not advocate that investors consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

After March 6, 2017, Incentive Fees based on income are calculated for each calendar quarter and may be paid on a quarterly basis if certain thresholds are met. We record our liability for Incentive Fee based on capital gains by performing a hypothetical liquidation at the end of each reporting period. The accrual of this hypothetical capital gains Incentive Fee is required by GAAP, but it should be noted that a fee so calculated and accrued is not due and payable until the end of the measurement period, or every June 30. The incremental Incentive Fee disclosed for a given period are not necessarily indicative of actual full year results. Changes in the economic environment, financial markets and other parameters used in determining such estimates could cause actual results to differ and such differences could be material. See Note 3 to the consolidated financial statements for a more detailed description of the Company’s Incentive Fee. In addition, as previously disclosed, the Advisor, in consultation with the Company’s Board of Directors, had agreed to waive Incentive Fee based on income from March 7, 2017 to June 30, 2019. BCIA had agreed to honor such waiver. The Advisor had voluntarily waived a portion of its Incentive Fee based on income from July 1, 2019 through December 31, 2020.

Computations for all periods are derived from our consolidated financial statements as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2021

 

 

June 30, 2020

 

 

June 30, 2021

 

 

June 30, 2020

 

GAAP Basis:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Investment Income

 

$

4,842,724

 

 

$

8,766,190

 

 

$

9,032,941

 

 

$

18,388,177

 

Net Investment Income per share

 

 

0.07

 

 

 

0.13

 

 

 

0.12

 

 

 

0.27

 

Addback: GAAP incentive fee based on Gains

 

 

 

 

 

 

 

 

 

 

 

 

Addback: GAAP incentive fee based on Income net of incentive fee waiver

 

 

 

 

 

 

 

 

 

 

 

 

Pre-Incentive Fee1:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Investment Income

 

$

4,842,724

 

 

$

8,766,190

 

 

$

9,032,941

 

 

$

18,388,177

 

Net Investment Income per share

 

 

0.07

 

 

 

0.13

 

 

 

0.12

 

 

 

0.27

 

Less: Incremental incentive fee expense based on Income net of incentive fee waiver

 

 

 

 

 

 

 

 

 

 

 

 

As Adjusted2:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Investment Income

 

$

4,842,724

 

 

$

8,766,190

 

 

$

9,032,941

 

 

$

18,388,177

 

Net Investment Income per share

 

 

0.07

 

 

 

0.13

 

 

 

0.12

 

 

 

0.27

 

 

Pre-Incentive Fee1: Amounts are adjusted to remove all incentive fees. Such fees are calculated but not necessarily due and payable at this time.

As Adjusted2: Amounts are adjusted to remove the incentive fee based on gains, as required by GAAP, and to include only the incremental incentive fee based on income. Under the Current Management Agreement, incentive fee based on income is calculated for each calendar quarter and may be paid on a quarterly basis if certain thresholds are met. Amounts reflect the Company’s ongoing operating results and reflect the Company’s financial performance over time.

Financial condition, liquidity and capital resources

During the six months ended June 30, 2021, we generated operating cash flows primarily from interest and fees received on senior secured loans and other debt securities, as well as from sales of selected portfolio company investments or repayments of principal. Net cash

 

 

52


 

 

 

used in operating activities for the six months ended June 30, 2021 was $(10.1) million. Our primary use of cash from operating activities during the period primarily consisted of $(28.5) million in net purchases of investments, excluding PIK capitalization.

Net cash provided by financing activities during the six months ended June 30, 2021 was $3.8 million. Our uses of cash consisted of cash distributions paid of $(7.4) million, purchases of treasury stock of $(1.2) million and payment of debt issuance costs of $(0.8) million. Our source of cash from financing activities consisted of $13.2 million in net debt borrowings under the Credit Facility.

Contractual obligations

A summary of our significant contractual payment obligations for the repayment of outstanding borrowings at June 30, 2021 is as follows:

 

 

 

Payments Due By Period (dollars in millions)

 

 

 

Total

 

 

Less than 1 year

 

 

1-3 years

 

 

3-5 years

 

 

After 5 years

 

Credit Facility(1)

 

$

52.0

 

 

$

 

 

$

 

 

$

52.0

 

 

$

 

2022 Convertible Notes

 

 

143.8

 

 

 

143.8

 

 

 

 

 

 

 

 

 

 

Interest and Debt Related Payables

 

 

0.6

 

 

 

0.6

 

 

 

 

 

 

 

 

 

 

 

(1)

At June 30, 2021, $213.0 million remained undrawn under our Credit Facility. See Note 4 to the consolidated financial statements.

Off-balance sheet arrangements

In the normal course of business, the Company may enter into guarantees on behalf of portfolio companies. Under these arrangements, the Company would be required to make payments to third parties if the portfolio companies were to default on their related payment obligations. There were no such guarantees outstanding at June 30, 2021 and December 31, 2020. In addition, from time to time, the Company may provide for a commitment to a portfolio company for investment in an existing or new security. At June 30, 2021 and December 31, 2020, the Company was obligated to existing portfolio companies for unfunded commitments of $45.2 million across 30 portfolio companies and $24.3 million across 14 portfolio companies, respectively. Of the $45.2 million and $24.3 million total unfunded commitments at June 30, 2021 and December 31, 2020, $4.2 million was on our aggregate $58.3 million and $66.1 million equity commitment to BCIC Senior Loan Partners, LLC, (“Senior Loan Partners”) at June 30, 2021 and December 31, 2020, respectively (see Note 5 to the consolidated financial statements). We maintain sufficient cash on hand and available borrowings to fund such unfunded commitments should the need arise.

Distributions

Our quarterly distributions, if any, are determined by our Board of Directors. Distributions are declared considering our estimate of annual taxable income available for distribution to stockholders and the amount of taxable income carried over from the prior year for distribution in the current year. We cannot assure stockholders that they will receive any distributions at all or distributions at a particular level. The following table lists the quarterly distributions per share from our common stock since June 2019:

 

Distribution Amount

Per Share

Outstanding

 

 

Record Date

 

Payment Date

$

0.18

 

 

June 18, 2019

 

July 9, 2019

$

0.14

 

 

September 16, 2019

 

October 7, 2019

$

0.14

 

 

December 18, 2019

 

January 8, 2020

$

0.14

 

 

March 17, 2020

 

April 7, 2020

$

0.10

 

 

June 1, 2020

 

July 7, 2020

$

0.10

 

 

August 18, 2020

 

September 29, 2020

$

0.10

 

 

November 18, 2020

 

December 30, 2020

$

0.10

 

 

March 17, 2021

 

April 7, 2021

$

0.10

 

 

June 16, 2021

 

July 7, 2021

$

0.10

 

 

September 15, 2021

 

October 6, 2021

 

Tax characteristics of all distributions are reported to stockholders on Form 1099 after the end of the calendar year.

 

 

53


 

 

 

We have elected to be taxed as a RIC under Subchapter M of the Code. In order to maintain favorable RIC tax treatment, we must distribute annually to our stockholders at least 90% of our ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any, out of the assets legally available for distribution. Under the Regulated Investment Company Modernization Act of 2010, capital losses incurred by the Company after December 31, 2010 will not be subject to expiration. In addition, such losses must be utilized prior to the losses incurred in the years preceding enactment. In order to avoid certain excise taxes imposed on RICs, we must distribute during each calendar year an amount at least equal to the sum of:

 

98% of our ordinary income for the calendar year;

 

98.2% of our capital gains in excess of capital losses for the one-year period ending on October 31st; and

 

any ordinary income and net capital gains for preceding years that were not distributed during such years.

We may, at our discretion, carry forward taxable income in excess of calendar year distributions and pay a 4% excise tax on this income. If we choose to do so, all other things being equal, this would increase expenses and reduce the amounts available to be distributed to our stockholders. We will accrue excise tax on estimated taxable income as required. In addition, although we currently intend to distribute realized net capital gains (i.e., net long-term capital gains in excess of short-term capital losses), if any, at least annually, out of the assets legally available for such distributions, we may in the future decide to retain such capital gains for investment. There was no provision for federal excise taxes recorded for the years ended December 31, 2020 and 2019.

The final tax characterization of distributions is determined after the fiscal year and is reported on Form 1099 and in the Company’s annual report to stockholders. Distributions can be characterized as ordinary income, capital gains and/or return of capital. To the extent that distributions exceed the Company’s current and accumulated earnings and profits, the excess may be treated as a non-taxable return of capital. Distributions that exceed a Company’s taxable income but do not exceed the Company’s current and accumulated earnings and profits, may be classified as ordinary income which is taxable to stockholders.

The Company estimates the source of its distributions as required by Section 19(a) of the 1940 Act. On a quarterly basis, for any payment of dividends estimated to be paid from any other source other than net investment income accrued for current period or certain cumulative periods based on the Section 19(a) requirement, the Company posts a Section 19(a) notice through the Depository Trust Company’s Legal Notice System and its website, as well as sends its registered stockholders a printed copy of such notice along with the dividend payment. The estimates of the source of the distribution are interim estimates based on GAAP that are subject to revision, and the exact character of the distributions for tax purposes cannot be determined until the final books and records are finalized for the calendar year. Therefore, these estimates are made solely in order to comply with the requirements of Section 19(a) of the 1940 Act and should not be relied upon for tax reporting or any other purposes and could differ significantly from the actual character of distributions for tax purposes.  For the $0.10 dividend paid on July 7, 2021, the Company noted that approximately $0.07 was from net investment income and approximately $0.03 was estimated to be a return of capital. For Consolidated Statements of Changes in Net Assets, sources of distribution to stockholders will be adjusted on an annual basis, if necessary, and calculated in accordance with federal income tax regulations.

We maintain an “opt out” dividend reinvestment plan for our common stockholders. As a result, except as discussed below, if we declare a distribution, stockholders’ cash distributions will be automatically reinvested in additional shares of our common stock, unless they specifically “opt out” of the dividend reinvestment plan as to receive cash distributions. Additionally, if the Company makes a distribution to be paid in cash or in stock at the election of stockholders as of the applicable dividend record date (a “Cash/Stock Distribution”), the terms are subject to the amended Plan dated May 13, 2020 described below (see Note 7 to the consolidated financial statements).

On March 6, 2018, the Board of Directors of the Company adopted amendments to the Company’s dividend reinvestment plan (the “Plan”). Under the terms of the amended Plan, if the Company declares a dividend or determines to make a capital gain or other distribution, the reinvestment plan agent will acquire shares for the participants’ accounts, depending upon the following circumstances, (i) through receipt of additional unissued but authorized shares from the Company (“newly issued shares”) and/or (ii) by purchase of outstanding shares on the open market (“open-market purchases”). If, on the distribution payment date, the last quarterly net asset value per share (“NAV”) is equal to or less than the closing market price per share on such distribution payment date (such condition often referred to as a “market premium”), the reinvestment plan agent will invest the distribution amount in newly issued shares on behalf of the participants. The number of newly issued shares to be credited to each participant’s account will be determined by dividing the dollar amount of the distribution by the greater of (i) the NAV or (ii) 95% of the closing market price on the distribution payment date. If, on the distribution payment date, the NAV is greater than the closing market price per share on such distribution payment date (such condition often referred to as a “market discount”), the reinvestment plan agent may, upon notice from the Company, either (a) invest the distribution amount in newly issued shares on behalf of the participants or (b) invest the distribution amount in shares acquired on behalf of the participants in open-market purchases.

On May 13, 2020, the Board of Directors of the Company adopted further amendments to the Plan. Under the terms of the amended Plan, if the Company makes a Cash/Stock Distribution, each stockholder will be required to elect whether to receive the distribution in cash or in shares of the Company's common stock (“Common Shares”), pursuant to such notices, forms or other documentation as may be provided to the stockholder by the Company (the “Election Forms”). If the stockholder is a Plan participant and elects to receive the Cash/Stock Distribution in cash, the stockholder will be deemed to have elected not to participate in the Plan solely with respect to such Cash/Stock Distribution and will receive the distribution in cash subject to any rules applicable to the distribution that may limit the portion of the distribution the Company is required to pay in cash. If the stockholder is a Plan participant and elects to receive the Cash/Stock Distribution in stock, the stockholder will receive the distribution in newly issued Common Shares. The number of newly issued Common Shares credited to the stockholders' account in

 

 

54


 

 

 

either case will be determined by dividing the dollar amount of the distribution (or portion of the distribution to be paid in Common Shares) by the price per Common Share determined in accordance with the Election Forms rather than pursuant to the formula(s) otherwise applicable under the Plan. This feature of the Plan means that, under certain circumstances, we may issue shares of our common stock at a price below net asset value per share, which could cause our stockholders to experience dilution. We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of these distributions from time to time. Also, we may be limited in our ability to make distributions due to the asset coverage test applicable to us as a BDC under the 1940 Act and due to provisions in our existing and future debt arrangements.

If we do not distribute a certain percentage of our income annually, we will suffer adverse tax consequences, including possible loss of favorable RIC tax treatment. In addition, in accordance with U.S. generally accepted accounting principles and tax regulations, we include in income certain amounts that we have not yet received in cash, such as payment-in-kind interest, which represents contractual interest added to the loan balance that becomes due at the end of the loan term, or the accretion of original issue or market discount. Since we may recognize income before or without receiving cash representing such income, we may have difficulty meeting the requirement to distribute at least 90% of our investment company taxable income to obtain tax benefits as a RIC and may be subject to income or excise taxes. In order to satisfy the annual distribution requirement applicable to RICs, we may have the ability to declare a large portion of a dividend in shares of our common stock instead of in cash. As long as a sufficient portion of such dividend is paid in cash and certain requirements are met, the entire distribution would generally be treated as a dividend for U.S. federal income tax purposes.

Recent developments

On July 28, 2021, the Company’s Board of Directors declared a distribution of $0.10 per share, payable on October 6, 2021 to stockholders of record at the close of business on September 15, 2021.

Notice is hereby given in accordance with Section 23(c) of the 1940 Act that from time to time the Company may purchase shares of its common stock in the open market at prevailing market prices.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are subject to financial market risks, including changes in interest rates. At June 30, 2021, 99% of our yielding debt investments, at fair value, bore interest based on floating rates, such as LIBOR, the Federal Funds Rate or the Prime Rate. The interest rates on such investments generally reset by reference to the current market index after one to six months. Of those yielding floating rate debt investments, 90% contained an interest rate floor. Floating rate investments subject to a floor generally reset by reference to the current market index after one to six months only if the index exceeds the floor. Interest rate sensitivity refers to the change in our earnings that may result from changes in the level of interest rates. Since we fund a portion of our investments with borrowings, our net investment income is affected by the difference between the rate at which we invest and the rate at which we borrow. The Company’s Credit Facility bears interest at variable rates with a reference rate floor of 0.00%, while our 2022 Convertible Notes bear interest at a fixed rate. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.

The following table shows the approximate annual impact on net investment income of base rate changes in interest rates (considering interest rate floors for variable rate instruments) to our debt portfolio and outstanding borrowings as of June 30, 2021, assuming no changes to our investment and borrowing structure:

 

 

 

Net

Investment

Income(1)

 

 

Net

Investment

Income

Per Share(1)

 

Basis Point Change ($ in millions, except per share data)

 

 

 

 

 

 

 

 

Up 400 basis points

 

$

13.1

 

 

$

0.18

 

Up 300 basis points

 

$

8.9

 

 

$

0.12

 

Up 200 basis points

 

$

4.7

 

 

$

0.06

 

Up 100 basis points

 

$

0.6

 

 

$

0.01

 

Down 100 basis points

 

$

(0.0

)

 

$

(0.00

)

 

(1)

Excludes the impact of incentive management fees based on income

While hedging activities may help to insulate us against adverse changes in interest rates, they also may limit our ability to participate in the beneficial interest rates with respect to our portfolio of investments. There can be no assurance that we will be able to effectively hedge our interest rate risk. During the three and six months ended June 30, 2021 and 2020, we did not engage in any interest rate hedging activity.

 

 

55


 

 

 

Item 4. Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Interim Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15 under the Securities Exchange Act of 1934). Based on that evaluation, our Interim Chief Executive Officer and Chief Financial Officer have concluded that our current disclosure controls and procedures are effective in timely alerting them to material information relating to us that is required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934.

There have been no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. In addition, there was no material impact to our internal controls over financial reporting while the majority of the Advisor’s employees were working remotely due to COVID-19. The Company is continually monitoring and assessing the COVID-19 situation to determine any potential impact on the design and operating effectiveness of our internal controls over financial reporting.

 

 

56


 

 

 

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we and the Advisor may be a party to certain legal proceedings incidental to the normal course of our business, including the enforcement of our rights under contracts with our portfolio companies. Further, third parties may try to seek to impose liability on us in connection with the activities of our portfolio companies. While we cannot predict the outcome of these legal proceedings with certainty, we do not expect that these proceedings will have a material effect on our consolidated financial statements.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the risk factor discussed below and the risk factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (the “Annual Report”), which could materially affect our business, financial condition and/or operating results. The risks described in our Annual Report and discussed below are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.

 

A cyber-attack or a failure to implement effective information and cybersecurity policies, procedures and capabilities could disrupt operations and cause financial losses that may have a material adverse effect on our or a portfolio company's business, results of operations and financial condition.

 

We are dependent on the effectiveness of the information and cybersecurity policies, procedures and capabilities maintained by our Advisor and other service providers to protect their computer and telecommunications systems and the data that reside on or are transmitted through them. Our portfolio companies similarly are dependent on the effectiveness of the information and cybersecurity policies that they and their service providers maintain. An externally caused information security incident, such as a hacker attack, ransomware attack, virus, phishing scam or worm, or an internally caused issue, such as failure to control access to sensitive systems, could materially interrupt business operations or cause disclosure or modification of sensitive or confidential or competitive information. Moreover, the increased use of mobile and cloud technologies could heighten these and other operational risks as certain aspects of the security of such technologies may be complex and unpredictable. Reliance on mobile or cloud technology or any failure by mobile technology and cloud service providers to adequately safeguard their systems and prevent cyber-attacks could disrupt our operations, the operations of a portfolio company or the operations of our or their service providers and result in misappropriation, corruption or loss of personal, confidential or proprietary information or the inability to conduct ordinary business operations. In addition, there is a risk that encryption and other protective measures may be circumvented, particularly to the extent that new computing technologies increase the speed and computing power available.

  

There have been a number of recent highly publicized cases of companies reporting the unauthorized disclosure of client or customer information, as well as cyber-attacks involving the dissemination, theft and destruction of corporate information or other assets, as a result of failure to follow procedures by employees or contractors or as a result of actions by third parties, including actions by terrorist organizations and hostile foreign governments.

 

Our Advisor has been the target of attempted cyber-attacks, as well as the co-opting of its brand to create fraudulent websites, and must continuously monitor and develop its systems to protect its technology infrastructure and data from misappropriation or corruption, as the failure to do so could disrupt our Advisor’s operations and cause financial losses. Although our Advisor takes protective measures and endeavors to strengthen its computer systems, software, technology assets and networks to prevent and address potential cyber-attacks, there can be no assurance that any of these measures prove effective. Moreover, due to the complexity and interconnectedness of our Advisor’s systems, the process of upgrading or patching our Advisor’s protective measures could itself create a risk of security issues or system disruptions for the Company, as well as for external stakeholders who rely upon, or have exposure to, our Advisor’s systems.

 

In addition, due to our Advisor’s and other service providers’ interconnectivity with third-party vendors, central agents, exchanges, clearing houses and other financial institutions, our Advisor and other service providers may be adversely affected if any of them are subject to a successful cyber-attack or other information security event, including those arising due to the use of mobile and cloud technologies.

 

Our Advisor and other service providers also routinely transmit and receive personal, confidential or proprietary information by email and other electronic means. Our Advisor and other service providers collaborate with clients, vendors and other third parties to develop secure transmission capabilities and protect against cyber-attacks. However, our Advisor or our other service providers cannot ensure that they or such third parties have all appropriate controls in place to protect the confidentiality of such information.

 

Our portfolio companies also have been the target of cyber-attacks, including ransomware attacks, that have affected their ability to conduct ordinary business operations or may subject them to liability to third-party suppliers, vendors or customers.  Such cyber-attacks may materially and adversely affect their business results and the value of our investment in them.

 

Any information security incident or cyber-attack against our Advisor, our other service providers or third parties with whom they are connected or our portfolio companies, including any theft, interception, mishandling or misuse of personal, confidential or proprietary corporate

 

 

57


 

 

 

information or other assets, could result in material financial loss, loss of competitive position, regulatory fines and/or sanctions, breach of client contracts, reputational harm or legal liability, which, in turn, may have a material adverse effect on our business, results of operations and financial condition.

 

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

Sales of unregistered securities

None.

Issuer purchases of equity securities

The following table provides information regarding our purchases of our common stock for each month in the six months period ended June 30, 2021:

 

Period

 

Average Price Paid

per Share(1)

 

 

Total Number of

Shares Purchased

 

 

Total Number of

Shares Purchased as

Part of Publicly

Announced Plans or

Programs

 

 

Maximum Number

(or Approximate

Dollar Value) of

Shares that May Yet

Be Purchased Under

the Plans or

Programs

 

January 2021

 

$

 

 

 

 

 

 

 

 

 

7,500,000

 

February 2021

 

 

 

 

 

 

 

 

 

 

 

7,500,000

 

March 2021

 

 

3.40

 

 

 

256,062

 

 

 

256,062

 

 

 

7,243,938

 

April 2021

 

 

3.65

 

 

 

58,743

 

 

 

58,743

 

 

 

7,185,195

 

May 2021

 

 

3.92

 

 

 

15,916

 

 

 

15,916

 

 

 

7,169,279

 

June 2021

 

 

3.94

 

 

 

6,285

 

 

 

6,285

 

 

 

7,162,994

 

 

 

$

3.48

 

 

 

337,006

 

 

 

337,006

 

 

 

 

 

 

 

(1)

The average price paid per share includes $0.03 commission fee per share.

The repurchase plan does not obligate us to acquire any specific number of shares and may be discontinued at any time. We intend to fund any repurchases with available cash and borrowings under the Credit Facility.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable

Item 5. Other Information

None.

 

 

58


 

 

 

Item 6. Exhibits.

(a)

Exhibits.

 

 

 

 

  3.1

 

Certificate of Incorporation of the Registrant (1)

 

 

 

  3.2

 

Certificate of Amendment to the Certificate of Incorporation of the Registrant (2)

 

 

 

  3.3

 

Amended and Restated By-laws of the Registrant (3)

 

 

 

  4.1

 

Form of Stock Certificate of the Registrant (4)

 

 

 

10.1

 

Sixth Amendment, dated as of April 23, 2021, by and among BlackRock Capital Investment Corporation, the subsidiary guarantors party thereto, the lenders party thereto and Citibank, N.A., as administrative agent (5)

 

 

 

31.1*

 

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

 

31.2*

 

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

 

32*

 

Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

*

Filed herewith

(1)

Previously filed with the Registrant’s Registration Statement on Form 10 (Commission File No. 000-51327), as amended, originally filed on May 24, 2005.

(2)

Previously filed with the Registrant’s Form 8-K dated as of March 9, 2015.

(3)

Previously filed with the Registrant’s Form 8-K dated as of April 30, 2018.

(4)

Previously filed with the Registrant’s pre-effective Amendment No. 2 to the Registration Statement on Form N-2 (Commission File No. 333-141090), filed on June 14, 2007.

(5)

Previously filed with the Registrant’s Form 8-K dated as of April 29, 2021.

 

 

59


 

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

BLACKROCK CAPITAL INVESTMENT

CORPORATION

 

 

 

Date: August 5, 2021

By:

/s/ James E. Keenan

 

 

James E. Keenan

 

 

Interim Chief Executive Officer

 

 

 

Date: August 5, 2021

By:

/s/ Abby Miller

 

 

Abby Miller

 

 

Chief Financial Officer and Treasurer

 

 

 

60